| Tue 13 Apr 2010, 16:27 | | IFC - IFCA Technologies Limited - Audited results for the year ended 31 December |
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IFC
IFC
IFC - IFCA Technologies Limited - Audited results for the year ended 31 December
2009
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")
AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2009
The audited results of IFCA Tech for the year ended 31 December 2009, as
compared to the year ended 31 December 2008, are presented below:
Condensed statement of Financial
Position
Figures in Rand 31-Dec-09 31-Dec-08
R R
Assets
NonCurrent Assets 11 265 525 11 371 114
Property, plant and equipment 431 136 536 725
Intangible assets 10 834 389 10 834 389
Current Assets 902 236 2 367 062
Current tax receivable 280 622 241 409
Trade and other receivables 337 226 776 126
Cash and cash equivalents 284 388 1 349 527
Non-current assets held for sale - 4 471 930
and assets of disposal groups
Total Assets 12 167 761 18 210 106
Equity and Liabilities
Equity 8 213 458 10 131 319
Share capital 42 585 965 42 585 965
Retained income (34 372 507) (32 454 646)
Current Liabilities 3 954 303 6 234 413
Current tax payable 112 051 158 476
Trade and other payables 3 095 030 5 268 529
Deferred income 693 454 731 269
Provisions 53 768 76 139
Liabilities of disposal groups - 1 844 374
Total Equity and Liabilities 12 167 761 18 210 106
Net asset value per share (cents 8.21 10.13
per share)
Net tangible asset value per -2.62 -0.70
share (cents per share)
Number of shares in issue at 100 000 000 100 000 000
period end
Condensed statement of
comprehensive income
Figures in Rand Year ended Year ended
31-Dec-09 31-Dec-08
Revenue 2 656 099 7 251 407
Cost of sales (906 324) (3 943 809)
Gross profit 1 749 775 3 307 598
Other income 29 147 8 688
Operating expenses (3 739 525) (36 343 088)
Operating loss (1 960 603) (33 026 802)
Investment revenue 125 789 83 815
Fair value 5 496
Finance costs (5 723) (12 141)
Loss before taxation (1 835 041) (32 955 128)
Taxation - (943 980)
Loss for the period for continuing (1 835 041) (33 899 108)
operations
Loss from discontinued operations (82 820) (684 039)
Loss for the year (1 917 861) (34 583 147)
Attributable to:
Equity holders of the parent (1 917 861) (34 574 064)
From Continuing operations (1 835 041) (33 890 025)
From Discontinued operations (82 820) (684 039)
Minority interest (9 083)
Loss for the year (1 917 861) (34 583 147)
Basic loss per share (cents per 1.84 33.89
share)
Headline loss per share (cents per 1.80 6.38
share)
Weighted average number of shares 100 000 000 100 000 000
in issue
Condensed statement of cash flows 31-Dec-09 31-Dec-08
Figures in Rand R R
Cash (utilised in)/generated from (3 600 340) 538 979
operating activities
Cash generated from/(used in investing 2 535 201 (516 735)
activities)
Cash generated from financing activities - 13 676
Total cash movement for the year (1 065 139) 35 920
Cash at the beginning of the year 1 349 527 1 313 607
Total cash at end of the year 284 388 1 349 527
Condensed statement
of changes in
equity
Figures in Share Share Total Retained Total Mino Total
Rand capital premium share income/ attributa rity equity
capital (Accumulate ble to inte
d loss) equity rest
holders
of the
group
Balance at 100 000 42 485 42 585 2 119 418 44 705 9 44 714
01 January 965 965 383 083 466
2008
Changes in - - - - - - -
equity
Loss for - - - (34 574 (34 574 (9 (34 583
the year 064) 064) 083) 147)
Balance at 100 000 42 485 42 585 (32 454 10 131 - 10 131
01 January 965 965 646) 319 319
2009
Changes in - - - - - - -
equity
Loss for - - - (1 917 861) (1 917 - (1 917
the year 861) 861)
Balance at 100 000 42 485 42 585 (34 372 8 213 458 - 8 213
31 December 965 965 507) 458
2009
COMMENTARY
The board of directors presents the company`s results for the year ended 31
December 2009, which have been approved by the board on 31 March 2010. The
accounting policies adopted for purposes of this report comply, and have been
consistently applied in all material respects with International Financial
Reporting Standards ("IFRS") and these financial statements have been prepared
in accordance with the requirements of IAS 34 (Interim Financial Reporting).
The same accounting policies and methods of computation have been followed as
compared to the prior year. The results have been audited by Nolands Inc.
The audit report contains an emphasis of matter relating to the valuation of
intellectual property rights, which valuation after impairment is based on
recently approved budgets and forecasts, which in turn assume continuing and
new software support agreements, as well as an emphasis of matter as to going
concern, which has been assumed on the basis of the above budgets and
forecasts and the continued support of the controlling shareholder and
significant creditor IFCA MSC Berhad.
1 INDUSTRY AND BUSINESS OVERVIEW
IFCA sWare first commenced business in August 1999 as MBS Software (Pty)
Limited and was originally formed for the sole purpose of marketing and
supporting the IFCA MSC Malaysian Group`s suite of software products in
Africa under license. The business paid 50% of its software revenue to
IFCA MSC in Malaysia in terms of its license agreement and the business
grew primarily through the use of Malaysian consultants at a very high cost
to the South African business.
In September 2004, the IFCA Group in Malaysia vended in the IP to the suite
of software products for the African continent and in return, took up a 49%
equity interest in IFCA sWare through its Malaysian listed company, IFCA
MSC. The company then changed its name to IFCA MBS Software (Pty) Limited.
The name of the company was changed to IFCA sWare on 9 October 2007 in
order to house the group`s software solutions going forward. IFCA sWare
became a wholly owned subsidiary of IFCA Tech and IFCA MSC now holds 44.1%
in IFCA Tech.
IFCA sWare 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 sWare`s solutions encompass the functionalities and features of
products that have been nurtured and matured for almost 20 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.
2 FINANCIAL RESULTS
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 year ended 31 December 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 for the next financial
year is to secure new sales and to restore profitability.
The company has presented segmental information for the revenue relating to
the Software Solutions and Computerised Business Equipment as follows:
31 Dec 09 31 Dec 08
R R
External sales
- Software Solutions 2 656 099 5 932 244
- Equipment Solutions 0 7 250
Inter-segment sales 0 0
Total revenue 2 656 099 5 939 494
Segment loss after tax -2 499 142 -34 321 123
Balance sheet
Net current assets and liabilites held for resale declined from the prior
period due to the sale of property owned by the company.
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. No further impairment of intangible assets is indicated
at present.
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, which has indicated
continued support for the Company.
3 ACQUISITIONS, DISPOSALS AND ISSUES OF SHARES FOR CASH
During the period the company separately disposed of two properties for
purchase considerations of R3 150 000 and R1 300 000 respectively.
There were no acquisitions or issue of shares for cash during the year
under review.
4. BEE SHAREHOLDER
During the year under review, the company secured a Black Economic
Empowerment partner namely Kutana Investments Group Limited ("Kutana"),
which women`s investment group is led by Thoko Mokgosi-Mwantembe.
Kutana has acquired a 26% shareholding in IFCA from existing shareholders.
5 DIRECTOR CHANGES
The following director changes occurred during the period under review:
Director Date appointed Date resigned
Jeffrey Christopher (Chief 17 February 2009
Executive Officer)
Thoko Mokgosi-Mwantembe 27 August 2009
Willie Thomas Hindshaw 11 November 2009
Kean Cheun ("Ken") Yong 03 October 2006 17 February 2009
Mr Jeffrey Christopher was appointed as Chief Executive Officer in 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 and Mr Billy
Hindshaw have been appointed to the board of directors.
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.
6 AUDITORS
During the period under review, RAiN resigned as auditors as they were not
admitted to the JSE Limited`s Register of auditors. Nolands Inc accepted
appointment as the new auditors and will continue in office in accordance
with section 270(2) of the Companies Act, 1973.
7 SHARE CAPITAL
As at 31 December 2009, there were 100 000 000 issued ordinary shares and
500 000 000 unissued ordinary shares. The unissued shares are under the
control of the directors until the annual general meeting. Shareholders
will be asked to approve the directors` authority in respect of the
unissued shares at the forthcoming annual general meeting.
8 DIVIDEND
The directors have decided not to declare a dividend for the period under
review.
9 LITIGATION
There is no litigation pending against the company or its subsidiaries,
which is expected to have a material impact on the results of the company.
10. SUBSEQUENT EVENTS
There are no subsequent events that have occurred outside of normal
business operations from 31 December 2009 until the date of this report.
11. FUTURE PROSPECTS
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:
* 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. 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.
* 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.
* IFCA Tech has successfully secured a Black Economic Empowerment partner
namely Kutana Investments Group Limited ("Kutana"), which women`s
investment group is led by Thoko Mokgosi-Mwantembe and is playing an active
role in the sales and marketing aspects of the business.
* The company has been working on developing relationships and presenting the
IFCA product range to potential customers in order to establish a solid
pipeline of new projects, certain of which are expected to be secured in
the next couple of months. Given the company`s low cost base and the
ability to engage additional services where required from the Malaysian
controlling shareholder on a variable cost basis, it is expected that the
company will return to profitability in the coming year.
By order of the Board
Ms T Mokgosi-Mwantembe Mr J Christopher
Chairman Chief Executive Officer
31 March 2010
Johannesburg
Registered Office
Arcay House, Number 3 Anerley Road, Parktown, Johannesburg,
2193
PO Box 62397, Marshalltown, 2107
Directors
T Mokgosi-Mwantembe *(Chairman), J Christopher (CEO) M Shaw
(FD), MR Gahaganv*, KK Yong*, WT Hindshaw*, IJ Jones*, Dr CT
Ndlovu *
* Non-executive, * Alternate, Malaysian, vBritish
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