| Fri 4 Sep 2009, 15:20 | | IFC - IFCA Tech - Unaudited Results For The 6 Months Ended 30 June 2009 And |
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IFC
IFC
IFC - IFCA Tech - Unaudited Results For The 6 Months Ended 30 June 2009 And
Announcement Of Women`s Black Economic Empowerment Partner And Director
Appointment
IFCA TECHNOLOGIES LIMITED
Incorporated in the Republic of South Africa)
(Registration number 2006/030759/06)
Share code: IFC & ISIN: ZAE000088555
("IFCA Tech" or "the company")
UNAUDITED RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2009 AND ANNOUNCEMENT OF
WOMEN`S BLACK ECONOMIC EMPOWERMENT PARTNER AND DIRECTOR APPOINTMENT
Balance Sheets
Figures in Rand 30 June 31 December
2009 2008
R R
ASSETS
NonCurrent Assets 11 378 685 11 371 114
Property, plant and equipment 544 296 536 725
Intangible assets 10 834 389 10 834 389
Current Assets 1 978 147 2 367 062
Trade and other receivables 685 450 776 126
Taxation 241 409 241 409
Cash and cash equivalents 1 051 288 1 349 527
Non Current Assets held for sale and -- 4 471 930
asset disposal group
Total Assets 13 356 832 18 210 106
EQUITY AND LIABILITIES
Equity and reserves 9 313 984 10 131 314
Share capital 42 585 965 42 585 965
Accumulated deficit (33 271 981) (32 454 651)
Current Liabilities 4 042 848 6 234 418
Current tax payable 112 051 158 476
Trade and other payables 3 209 959 5 268 534
Provisions 77 129 76 139
Deferred income 643 709 731 269
Liabilities of disposal groups -- 1 844 374
Total Liabilities 4 042 848 8 078 792
Total equity and liabilities 13 356 832 18 210 106
Net asset value per share (cents per 13.36 37.56
share)
Net tangible asset value per share 2.28 3.26
(cents per share)
Number of shares in issue at period 100 000 000 100 000 000
end
Income Statements
Figures in Rand 6 months 6 months ended
ended 30 June 2008
30 June 2009 R
R
Revenue 1 264 5 130 028
760
Cost of sales (561 873) (2 062 352)
Gross profit 702 887 3 067 676
Operating expenses (2 094 149) (5 807 271)
Operating loss before impairments (1 391 262) (2 739 595)
Impairment of deferred development -- (3 879 797)
expenditure
Operating loss (1 391 262) (6 619 392)
Investment revenue 56 582 33 382
Foreign exchange gains/(losses) 592 219 (432 092)
Finance costs (59 384) (131 722)
Loss before taxation (801 845) (7 149 824)
Taxation 15 487 --
Loss for the period (817 332) (7 149 824)
Attributable to minorities -- --
Attributable to ordinary equity (817 332) (7 149 824)
holders
Adjustments for headline earnings:
- Impairment of deferred development -- 3 879 797
expenditure
Headline loss for the period (817 332) (3 270 027)
Loss per share (cents per share) -0.82 -7.31
Headline loss per share (cents per -0.82 -3.27
share)
Weighted average number of shares in 100 000 000 100 000 000
issue
Statement of Changes in Equity
Figures in Rand Share Share Retained Total
capital premium Income equity
R R R R
Balance at 31 100 000 42 485 965 2 119 415 44 705 380
December 2007
Loss for the 6 month -- -- (7 149 824) (7 149 824)
period
Balance at 30 June 100 000 42 485 965 (5 030 0409) 37 555 556
2008
Balance at 31 100 000 42,485 965 (32 454 646) 10,131,319
December 2008
Loss for the period -- -- (817 332) (817 332)
Balance at 30 June 100 000 42 485 965 (33 371 978) 9 313 987
2009
Abridged Cash Flow Statements
Figures in Rand 30 June 30 June
2009 2008
R R
Cash flows utilised in from operating (298 239) (918 457)
activities
Cash flows utilised in investing -- --
activities
Cash flows from financing activities -- --
Total cash movement for the period (298 239) (918 457)
Cash at the beginning of the period 1 349 527 1 313 607
Total cash at end of the period 1 051 288 395 150
COMMENTARY
The board of directors presents the company`s results for the 6 month period
ended 30 June 2009, which have been prepared in accordance with IAS 34 - Interim
Financial Reporting on the basis of consistent accounting policies that comply
with International Financial Reporting Standards ("IFRS").
INDUSTRY AND BUSINESS OVERVIEW
IFCA Tech is an enterprise-wide integrated business solutions provider providing
industry specific software solutions for four business segments, namely:
- Property Development and Management (known as Property+);
- Project Management, Engineering and Construction (known as Contract+);
- Hospitality (known as Resorts+, D`Hotel and D`Club); and
- Finance & Leasing (Loans+).
IFCA Tech`s solutions encompass the functionalities and features of products
that have been nurtured and matured for almost 22 years by the IFCA group
worldwide, from meeting the business needs of more than 1 200 customers and 16
000 registered users spread across four continents. IFCA Tech`s customers
include Transnet Housing, The Country Club Johannesburg, Maccauvlei Learning
Academy, Kopanong Hotel and Conference Centre, Eagle International Group Holding
(Eagle Canyon), Atlantic Beach Golf Club in Cape Town, Eduloan (Namibia), The
Swaziland National Housing Corporation and The Serengeti Golf and Wildlife
Estate.
FINANCIAL OVERVIEW
Income Statement
In the prior period the group experienced a series of negative events, including
the loss of a major customer following the sale of the loans book, various
senior management changes and loss of key staff. This caused problems with
customer service levels. In the second half of 2008, Mr Jack Yong, one of the
founders of the controlling shareholder, IFCA MSC Berhad, Malaysia and a
director of IFCA Tech, took over as acting CEO of the company. In addition, Mr
BH Loh was seconded to South Africa to take over as the general manager with a
key focus of stabilising the company and resolving customer service issues in
order to regain good reference sites before focussing on new sales. In
addition, the board took steps to rationalise and right-size the business to
position it for future growth.
The results for the 6 months ended 30 June 2009 reflects a material improvement
in earnings compared to last year primarily due to the following reasons:
- The company rationalised unprofitable business operations and has focused
on the core business, that of Software solutions;
- Although revenue has shown a substantial decline, the business has reduced
the cost structure in line with current business activities; and
- Customer service issues have been resolved with new orders being received
from existing customers and customers now referring new clients to IFCA.
Despite the improvement in earnings, the company has not yet returned to
profitability and the main objective for the company in the second half of the
financial year is to secure new sales and to restore profitability.
Balance sheet
Property, plant and equipment declined from the prior period due to the sale of
property owned by the company. This resulted in a decrease in long term
borrowings and an increase in cash and cash equivalents.
At the end of the prior year, a decision was taken to impair intangible assets
and reverse the deferred tax asset that had been raised against assessable
losses.
Trade receivables and trade payables have declined in line with the current
levels of business. The main component of trade payables is an amount owing to
the controlling shareholder in Malaysia.
DIVIDENDS
The directors have decided not to declare an interim dividend.
SEGMENTAL REPORTING
The company decided to withdraw from marketing and distribution of Computerised
Business Equipment and concentrate on software solutions.
In view thereof no segmental reporting has been disclosed.
Geographical areas:
Analysis of revenue from geographical Areas:
South Africa : R 930,998
Africa : R 333,762
ACQUISITIONS AND ISSUE OF SHARES FOR CASH
During the period the company separately disposed of two properties for a
purchase considerations of R3 150 000 and R1 300 000 respectively.
There were no issues of shares during the period under review.
SUBSEQUENT EVENTS
There have been no significant subsequent events that require reporting.
LITIGATION
There is no litigation pending against the company.
Strategy going forward
The board appointed Jeffrey Christopher to the position of CEO at the beginning
of the 2009 financial year. Jeffrey has a wealth of experience in the industry,
and has led IFCA`s operations in the Phillipines, turning the business around
from a loss making operation five years ago, to a business which delivers
sustainable value for stakeholders. His intimate knowledge of the IFCA products
will assist the company in positioning IFCA as a significant player within the
African continent.
The following prospects have been identified to return the company to
profitability:
- Negotiations with a BEE partner to acquire a significant stake in the
company have been successfully concluded.
- The new .Net software, designed in Malaysia will be available to clients in
Africa. The new software, which has recently been successfully launched and
has had a major impact in the Asian market, is set to compete with all the
major ERP business solutions software products in South Africa.
- The controlling shareholders of IFCA Malaysia are committed to the future
success of the South African operation and will continue their support as
an active shareholder.
- Following the launch of .Net in South Africa, an aggressive sales plan will
be implemented into Africa.
- Jeffrey is now focussing on new sales and rebuilding the sale pipeline.
Since his arrival the CEO`s focus has been on implementation of a new sales
and marketing strategy. To this end IFCA has launched its Property .NET
solution at a function in Johannesburg to the major and key players in the
industry and was favourably received. The sales strategy has resulted and
generated a healthy pipeline of prospects.
BEE SHAREHOLDER
The board of directors is pleased to announce that the company has secured a
Black Economic Empowerment partner namely Kutana Investments Limited ("Kutana"),
which women`s investment group is led by Thoko Mokgosi-Mwantembe.
Kutana has acquired a 26% shareholding in IFCA from existing shareholders and in
terms of the agreement, is entitled to nominate two directors to the board of
IFCA.
DIRECTOR CHANGES
Mr Jeffrey Christopher was appointed as Chief Executive Officer on 27 February
2009. Mr J Yong, previously the acting Chief Executive Officer, has reverted to
a non executive director.
Pursuant to the BEE transaction, Ms Thoko Mokgosi-Mwantembe has been appointed
to the board of directors with immediate effect. A second director will be
nominated in due course.
Thoko is a renowned South African business leader with impressive qualifications
and experience. Thoko graduated with a BSC, followed with an MSC (Medicinal
Chemistry) from Loughborough University (UK). To bolster her business acumen she
went on to complete relevant executive courses through Harvard and IMD in
Switzerland. She has worked in senior positions for a number of global
pharmaceutical companies including Glaxo and Merck before focusing her energies
in the area of ICT. Prior to establishing Kutana, Thoko was the Sales and
Marketing Director at Lucent Technologies, a Divisional MD of Siemens
Telecommunications, the CEO at Alcatel SA and most recently, the CEO of Hewlett
Packard SA.
Thoko was named finalist for the IT Personality Award in 2005, the winner of Top
ICT Individual for 2005 and winner of Top ICT Business woman in Africa. She was
a finalist in the ICT Sector in CEO Magazine`s SA`s Most Influential Women in
Business & Government, and in 2007, she was named the Business Woman of the year
in the Corporate category.
Thoko currently holds a number of non-executive board positions for leading
South African companies these include : Knorr-Bremsa (SA), Vodacom Group, ABSA
Group and Paracon SA.
Thoko has been appointed as Chairperson of IFCA Technologies Limited and Dr
Thandi Ndlovu will remain as an independent non-executive director.
By order of the Board
J Christopher
Chief Executive Officer
02 September 2009
Johannesburg
Registered Office
Arcay House, Number 3 Anerley Road, Parktown, Johannesburg,
2193
PO Box 62397, Marshalltown, Johannesburg, 2107
Directors
Dr CT Ndlovu*(Chairman), J Christopher (CEO) M Shaw (FD), MR
Gahaganv*, KC Yong*, KK Yong*, IJ Jones#, NW Keen#, T Mokgosi-
Mwantembe *
* Non-executive, # Alternate, Malaysian, vBritish
Designated Advisor
Transfer Office
Arcay Moela Sponsors Link Market Services
(Proprietary) Limited (Proprietary) Limited
Date: 04/09/2009 15:20:02 Produced by the JSE SENS Department.
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