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SDH
SDH
SDH - SecureData Holdings Limited - Unaudited Results for the Six Months Ended
31 January 2010
SecureData Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 1998/010017/06)
Share code: SDH & ISIN: ZAE000096368
("SecureData" or "the group")
SECUREDATA HOLDINGS LIMITED
UNAUDITED RESULTS for the six months ended 31 January 2010
Financial Highlights
- EBITDA up 26% to R24,2 million (2009: R19,3 million)
- Adjusted EPS up 55% to 4,8 cents per share (2009: 3,1 cents per share)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(for the six months ended 31 January 2010)
Unaudited Unaudited Audited
six months six months twelve months
ended ended ended
31 January 2010 31 January 2009 31 July 2009
R`000 R`000 R`000
Revenue 220 208 232 087 464 632
Earnings before
interest, taxation,
depreciation
and amortisation
(EBITDA) 24 212 19 260 57 280
Depreciation and
amortisation (8 364) (11 121) (14 879)
- Depreciation (2 317) (2 187) (3 391)
- Amortisation (6 047) (8 934) (11 488)
Profit from operations 15 848 8 139 42 401
Finance income 142 769 1 282
Finance costs (11 345) (7 458) (27 741)
- Interest paid (5 377) (8 898) (17 938)
- Foreign exchange
(losses)/profit on
loan to subsidiary (5 968) 1 440 (9 803)
Other financial items (750) - (7 075)
Profit before taxation 3 895 1 450 8 867
Taxation (1 852) (918) (3 172)
Profit for the period 2 043 532 5 695
Attributable to:
- owners of the parent 1 875 1 669 6 630
- minority interest 168 (1 137)
(935)
Profit for the period 2 043 532 5 695
Total comprehensive
income for the period 2 043 532 5 495
Total comprehensive
income attributable to
- owners of the parent 1 875 1 669 6 630
- minority interest 168 (1 137) (935)
Total comprehensive
income for the period 2 043 532 5 695
Earnings per share (cents) 0,8 0,7 2,9
Diluted earnings
per share (cents) 0,8 0,7 2,9
Weighted average
numbers of shares on which
- earnings per
share is based (`000) 227 997 227 306 227 076
- diluted earnings per
share is based (`000) 227 997 227 306 227 076
Number of ordinary shares
in issue 242 102 242 102 242 102
Reconciliation
between earnings
and headline earnings
Profit for the period
attributable to ordinary
shareholders 1 875 1 669 6 630
Profit on disposal of
assets - (30)
(30)
Headline earnings 1 875 1 639 6 600
Headline earnings
per share (cents) 0,8 0,7 2,9
Reconciliation
between earnings and
adjusted earnings
- Profit for the period
attributable to ordinary
shareholders 1 875 1 669 6 630
- Amortisation
(after taxation) 4 151 6 358 7 806
- Unrealised losses on
derivatives
(after taxation) 540 - 5 094
- Foreign exchange
losses/(gains) on
group loans
(after taxation) 4 297 (1 037) 7 058
Adjusted earnings 10 863 6 990 26 588
Adjusted earnings
per share (cents) 4,8 3,1 11,7
Net asset value
per share (cents) 66,6 69,3 67,7
Net asset value
per share net of
treasury (cents) 70,7 73,8 72,3
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(at 31 January 2010)
Unaudited Unaudited Audited
31 January 2010 31 January 2009 31 July 2009
R`000 R`000 R`000
ASSETS
Non-current assets 231 790 287 362 248 261
Property, plant and equipment 7 586 7 627 6 859
Goodwill 133 562 122 159 140 394
Intangible assets 55 373 118 648 64 418
Deferred taxation 35 269 38 928 36 590
Current assets 163 839 133 712 143 384
Inventories 3 721 2 896 4 040
Trade and other receivables 131 649 89 123 81 739
Taxation 143 3 591 -
Cash and cash equivalents 28 326 38 102 57 605
Total assets 395 629 421 074 391 645
EQUITY AND LIABILITIES
Equity 177 286 188 345 181 100
Share capital 242 242 242
Share premium 115 234 115 234 115 234
Treasury share reserve (22 215) (21 377) (22 215)
Share-based payment equity 3 496 2 882 3 096
Foreign currency
translation reserve (19 464) (6 357) (14 386)
Retained earnings 83 924 77 088 82 049
Equity attributable to
owners of the parent 161 217 167 712 164 020
Minority interest 16 069 20 633 17 080
Non-current liabilities 71 393 118 328 89 785
Long-term loans 56 829 84 968 72 602
Deferred taxation 14 564 33 360 17 183
Current liabilities 146 950 114 401 120 760
Trade and other payables 122 467 97 773 90 605
Taxation 2 183 2 938 5 015
Derivative financial
instruments 4 939 - 7 075
Short-term loans 17 361 13 690 18 065
Total equity and liabilities 395 629 421 074 391 645
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(for the six months ended 31 January 2010)
Unaudited Unaudited Audited
six months six months twelve months
ended ended ended
31 January 2010 31 January 2009 31 July 2009
R`000 R`000 R`000
Share capital 242 242 242
Share premium 115 234 115 234 115 234
Treasury share reserve (22 215) (21 377) (22 215)
Balance at beginning
of the period (22 215) (23 586) (23 586)
Own shares acquired by
subsidiary - - (838)
Own shares sold by subsidiary - 2 209 2 209
Share based payment equity 3 496 2 882 3 096
Balance at beginning
of the period 3 096 2 482 2 482
Share based payment
transactions during
the period 400 400 614
Foreign exchange
conversion reserve (19 464) (6 357) (14 386)
Balance at beginning
of the period (14 386) (8 174) (8 174)
Foreign exchange
movements during the period (5 078) 1 817 (6 212)
Retained earnings 83 924 77 088 82 049
Balance at beginning
of the period 82 049 75 419 75 419
Profit for the period 1 875 1 669 6 630
Equity attributable to
owners of the parent 161 217 167 712 164 020
Minority interest 16 069 20 633 17 080
Balance at beginning
of the period 17 080 21 770 21 770
Recognised income for
the period 168 (1 137) (935)
Foreign exchange movements (1 179) - (3 755)
Total capital and reserves 177 286 188 345 181 100
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(for the six months ended 31 January 2010)
Unaudited Unaudited Audited
six months six months twelve months
ended ended ended
31 January 2010 31 January 2009 31 July 2009
R`000 R`000 R`000
Cash flow from
operating activities (9 166) 15 803 35 472
Profit before taxation 3 895 1 450 8 867
Adjustments not
affecting the flow of funds 17 831 18 600 49 603
Operating income
before working
capital changes 21 726 20 050 58 470
Decrease in
working capital (17 730) (2 294) (2 133)
Cash generated from
operations 3 996 17 756 56 337
(13 162) (1 953) (20 865)
Finance income 142 769 1 282
Finance costs (5 377) (413) (17 938)
Taxation paid (7 927) (15 460) (4 209)
Cash flow from
investing activities (3 044) (5 960) (3 558)
Cash flow from
financing activities (16 477) (13 251) (12 923)
Own share acquired by
subsidiary - - (838)
Own shares sold by
subsidiary - 2 209 2 209
Loans repaid (16 477) (15 660) (14 294)
(Decrease)/Increase in
cash equivalents (28 687) (3 408) 18 991
Foreign exchange
movements in cash balances (592) - (2 896)
Cash and cash
equivalents at
beginning of the period 57 605 41 510 41 510
Cash and cash
equivalents at end of
the period 28 326 38 102 57 605
COMMENTARY
(for the 6 month period ended 31 January 2010)
GENERAL REVIEW
The first half of the year was a positive period for SecureData during which
it continued to progress its vision of being a significant provider of
Information Risk Management ("IRM") solutions and services in Europe, Middle
East and Africa ("EMEA").
Group EBITDA increased 26% to R24,2 million from R19,3 million. Turnover
decreased 5% to R220 million, primarily due to the negative effect of a
stronger Rand on the reporting of results achieved by MIS Corporate Defence
Solutions ("MIS- CDS"), the group`s United Kingdom based subsidiary. Net
borrowings at 31 January 2010 stood at R45,9 million, up from R33,0 million at
the prior year end due to poorer working capital management.
The earnings per share ("EPS") and headline earnings per share ("HEPS") include
the following items:
- R6,0 million (2009: R8,9 million) amortisation of intangible assets created by
the group`s acquisitions. This charge is unrealised and has no effect on group
cash flow;
- R6,0 million foreign exchange loss (2009: R1,4 million foreign exchange
profit) on inter-group loans, which reflects the difference in Rand to Sterling
exchange rate, between when the loan was made in order to acquire MIS-CDS, and
the present exchange rate. This expense is unrealised and has no effect on group
cash flow; and
- R0,75 million loss (2009: R Nil) on foreign exchange forward contracts,
entered into to settle outstanding creditor payments by the group, at a time of
great Rand volatility. As at 31 January 2010 these losses were unrealised. These
contracts which relate to future periods, will be realised during the course of
the current and the next financial year.
Together these non-operational and primarily unrealised non-cash items, reduced
EPS and HEPS by 4,0 cents per share, making both EPS and HEPS poor indicators of
the group`s operational performance. The resulting adjusted EPS, which ignores
these items, is 4,8 cents per share (2009: 3,1 cents).
Working capital management was negatively affected by a significant increase in
debtors with debtors days outstanding increasing to 94 days from 50 days at the
year-end. This increase can largely be attributed to late payment by two major
blue chip customers. Management continues to place particular emphasis on
working capital management.
OPERATIONAL AND SEGMENTAL REVIEW
SecureData operates subsidiaries in three major groupings:
SecureData Africa
Six months to Six months to % Twelve months
31 January 31 January growth to 31 July
2010 2009 2009
R`000 R`000 R`000
Revenue 131 868 131 966 (0,1) 265 910
EBITDA 16 322 10 005 63,1 36 842
EBITDA margin (%) 12,4 7,6 63,2 13,9
SecureData Africa markets and distributes leading IRM products in South Africa
and the rest of the continent.
Although revenue was flat, the product portfolio review and cost management
initiatives launched in the previous year continued to bear fruit in the first
half, with EBITDA improvement of 63% and the EBITDA margin improving to 12,4%
from 7,6%. This is a robust performance and management is confident that
SecureData Africa is now stable and well positioned to seek additional revenue
growth, whilst maintaining this strong margin performance.
MIS-CDS
Six months to Six months to % Twelve months
31 January 31 January growth to 31 July
2010 2009 2009
R`000 R`000 R`000
Revenue 78 561 89 269 (12,0) 176 754
EBITDA 5 539 5 288 4,7 13 925
EBITDA margin (%) 7,1 5,9 20,3 7,9
Six months to Six months to % Twelve months
31 January 31 January growth to 31 July
2010 2009 2009
GBP`000 GBP`000 GBP`000
Revenue 6 285 5 690 10,5 12 190
EBITDA 443 337 31,5 960
EBITDA margin (%) 7,1 5,9 20,3 7,9
MIS-CDS is one of the largest and longest established independent information
security solution provider s in the United Kingdom.
In Sterling terms MIS-CDS posted a solid performance with 11% revenue growth
and a pleasing 32% EBITDA growth aided by EBITDA margin strengthening to over
7%. The relative strengthening of the Rand over this period however has reduced
this performance in Rand terms to a decline in revenue and lower EBITDA growth
of 5%. Management is confident that MIS-CDS will continue to show improving
margin and earnings performance in the coming period despite ongoing economic
uncertainty in the United Kingdom.
SensePost
Six months to Six months to % Twelve months
31 January 31 January growth to 31 July
2010 2009 2009
R`000 R`000 R`000
Revenue 9 779 10 851 (9,9) 21 968
EBITDA 2 351 3 967 (40,7) 6 513
EBITDA margin (%) 24,0 36,6 (34,4) 29,6
SensePost provides independent information security assessment services. Based
in South Africa, the company is a recognised leader in this niche market and
boasts a blue-chip client base spanning five continents.
SensePost posted revenue of R9,8 million, and although the EBITDA margin was
lower than that of the comparable period last year, it remains very strong at
24% reflecting the specialist, high value nature of the company`s service
offering. The decline in operating performance is primarily due to ongoing
investment in the company`s offshore operations and the significant portion of
SensePost revenues that are generated outside South Africa.
STRATEGIC REVIEW
The group continues to have a significant presence in the EMEA IRM market,
continues to be cash generative, and operating margins continue to improve.
The IRM market has historically proven to be quite resilient during downturns
in the economic cycle and although it remains difficult to predict to what
extent the current financial market turmoil will impact buyer activity, the
board of directors believes the group is well positioned to take advantage of
attractive opportunities within the IRM sector well into the future.
SUBSEQUENT EVENTS
The board of directors is not aware of any material matters or circumstances
arising since the end of the interim period and up to the date of this report.
DIRECTORATE
There have been no changes to the board of directors during the period under
review.
BASIS OF PREPARATION
These condensed interim consolidated financial statements have been prepared in
accordance with the recognition and measurement requirements of International
Financial Reporting Standards and the presentation and disclosure requirements
of IAS 1 - Presentation of Financial Statements, IAS 34 - Interim Financial
Reporting, the Companies Act, 1973 (Act 61 of 1973), as amended, and with the
Listings Requirements of the JSE Limited. The accounting policies applied in
the preparation of these condensed interim financial statements conform with the
requirements of International Financial Reporting Standards, and are consistent
with those applied in the annual financial statements for the year ended 31 July
2009. These interim financial statements have not been audited or reviewed by
the group`s auditors.
For and on behalf of the board
PR Pretorius
Chairman
DTK Brazier
Chief Executive Officer
17 March 2010
Directors:
PR Pretorius(Chairman), DTK Brazier (Chief Executive Officer), JG du Toit
(Financial Director), A Aitken, N Mthembu, YT Moerane*, S Murray, P Sneddon*
*Independent non-executive director Non-executive director
Company secretary:
Merchantec (Proprietary) Limited
Registered office:
Medscheme Building South
10 Muswell Road South, Bryanston, 2021
(PO Box 4673, Rivonia, 2128)
Transfer secretaries:
Computer share Investor Services (Proprietary) Limited
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Sponsor:
Merchantec Capital
www.securedataholdings.com
Date: 17/03/2010 13:15:01 Produced by the JSE SENS Department.
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