| Thu 18 Nov 2010, 12:11 | | RGT - RGT Smart Market Intelligence Limited - Unaudited group results for the |
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RGT
RGT
RGT - RGT Smart Market Intelligence Limited - Unaudited group results for the
six month period ended 31 August 2010
RGT SMART MARKET INTELLIGENCE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2008/014367/06)
Share Code: RGT ISIN: ZAE000143715
("RGT SMART" or "the company")
UNAUDITED GROUP RESULTS FOR THE SIX MONTH PERIOD ENDED 31 AUGUST 2010
The board presents its unaudited results for the six months ended 31 August 2010
below, together with audited results for the year ended 28 February 2010 and
reviewed results for the six months ended 31 August 2009.
Condensed consolidated statement of financial position
Figures in Rand Unaudited Audited Reviewed six
six months 28 months ended
ended 31 February 31 August
August 2010 2010 2009
R`000 R`000 R`000
Assets
NonCurrent Assets 23 603 22 653 23 521
Property, plant and equipment 502 400 420
Goodwill 17 449 17 449 19 439
Intangible assets 5 2044 4 521 3 662
Deferred tax 448 283 -
Current Assets 4 094 2 490 3 664
Trade and other receivables 2 107 2 162 3 023
Current tax asset - - 200
Cash and cash equivalents 1 987 328 441
Total Assets 27 697 25 143 27 185
Equity and Liabilities
Equity
Share capital 4 024 1 790 1
Reserves - - 1 124
Retained earnings 12 582 10 773 15 869
Total Equity 16 606 12 563 16 994
Liabilities
Non-Current Liabilities
Loans from shareholders 1 913 - -
Other financial liabilities - 3 363 -
Finance lease obligation - 41 79
Deferred tax 1 237 960 21
Current Liabilities
Loans from shareholders 1 174 569 98
Other financial liabilities 2 695 3 656 5 555
Current tax payable 629 680 1 060
Finance lease obligation - 49 23
Operating lease liability 19 - -
Trade and other payables 1 364 1 750 2 542
Revenue received in advance 1 140 590 -
Provisions 920 541 497
Bank overdraft - 381 316
Total Liabilities 11 091 12 580 10 191
Total Equity and Liabilities 27 697 25 143 27 185
Net asset value per share (cents per 6.92 7.77
share) 6.60
Net tangible asset value per share 1.26 1.17
(cents per share) 0.83
Number of shares in issue at year end 400 018 380 800 350 000
(`000)
Condensed consolidated statement of comprehensive income
Figures in Rand Unaudited Audited Reviewed six
six months 28 months ended
ended 31 February 31 August
August 2010 2010 2009
R`000 R`000 R`000
Revenue 12 984 25 584 13 238
Cost of sales (3 648) (2 466) (1 370)
Gross profit 9 336 23 118 11 868
Operating expenses (6 654) (19 066) (7 941)
Operating profit before interest 2 682 4 052 3 927
Investment revenue 40 3 1
Finance costs (310) (397) (163)
Profit before taxation 2 412 3 658 3 765
Taxation (603) (2 717) (1 291)
Profit after taxation 1 809 941 2 474
1 809 2 474
Profit for the period 941
Attributable to:
Equity holders of the parent 1 809 941 2 474
Minority interest - - -
Profit for the period 1 809 941 2 474
Headline earnings reconciliation 1 809 941 2 474
(R`000)
Profit attributable to owners of the
parent
Adjusted for:
(Profit)/Loss on disposal of property, (31) 9 -
plant and equipment
Impairment of goodwill - 1 433 -
Impairment of intangibles - 72 -
Headline earnings for the period 1 778 2 455 2 474
Per share information
Headline earnings per share (cents) 0.46 0.70 0.71
Diluted headline earnings per share 0.46 0.60 0.71
(cents)
Basic earnings per share (cents per 0.46 0.27 0.71
share)
Diluted earnings per share (cents per 0.46 0.23 0.71
share)
Dividend per share (cents) 0.00 1.06 0.29
Weighted average number of shares in 390 518 353 450 350 000
issue (`000)
Condensed consolidated statement of cash flows
Figures in Rand Unaudited six Audited Reviewed six
months ended 28 February months ended
31 August 2010 2010 31 August 2009
R`000 R`000 R`000
Cash generated from 2 747 2 994
operating activities 4 843
Cash used in investing (1 046) (2 514) (1 557)
activities
Cash used in financing 339 (2 327) (1 258)
activities
Total cash movement for 2 040 2 179
the year
Cash at the beginning of (53) (55) (55)
the year
Total cash at end of the 1 987 (53) 124
year
Condensed consolidated statement of changes in equity
Figures in Rand Shares to be Share Share Total share
repurchased capital premium capital
-
Balance at 01 March 1 100 - 1 100
2009
Changes in equity -
Profit for the year - - - -
Share based - - - -
payments
Share issue - - - -
expenses
Issue of shares - 307 999 2 331 957 2 639 956
Transfer share -
issue costs to - (851 654) (851 654)
share premium
Dividends - - - -
Balance at 01 March -
2010 309 099 1 480 303 1 789 402
Changes for the -
period
Profit for the - - - -
period
Issue of shares - 570 000 5 130 000 5 700 000
Transfer share - - (438 131) (438 131)
issue costs to
share premium
Repurchase of (3 027 180) - - (3 027 180)
shares
Balance at 31 (3 027 180) 879 099 6 172 172 4 024 091
August 2010
Condensed consolidated statement of changes in equity
Figures in Rand Share based Retained Total equity
payment earnings
reserve
517 163 13 719 347 14 237 610
Balance at 01
March 2009
Changes in equity
Profit for the - 941 530 941 530
year
Share based 2 122 793 - 2 122 793
payments
Share issue - (89 569) (89 569)
expenses
Issue of shares (2 639 956) - -
Transfer share - 231 390 (620 264)
issue costs to
share premium
Dividends - (4 029 351) (4 029 351)
Balance at 01 - 10 773 347 12 562 749
March 2010
Changes for the
period
Profit for the - 1 809 123 1 809 123
period
Issue of shares - - 5 700 000
Transfer share - - (438 131)
issue costs to
share premium
Repurchase of - - (3 027 180)
shares
Balance at 31 - 12 582 470 16 606 561
August 2010
BASIS OF PREPARATION
The board of directors is pleased to present the company`s unaudited interim
results for the period ended 31 August 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
the abridged 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 not been audited or reviewed.
1 INDUSTRY AND BUSINESS OVERVIEW
RGT SMART is an investment holding company engaged in market intelligence
and data analysis in all aspects and related activities and operates in
South Africa. RGT SMART has two wholly-owned subsidiaries namely; KA SMART,
representing approximately 41% of the business based on turnover and 49%
based on profitability, which focuses on the Group`s management consultancy
portion of the business and which was incorporated on 26 June 2001, and
RGT, representing approximately 59% of the business based on turnover and
51% based on profitability, which focuses on the Group`s statistical
information for the automotive industry and which was incorporated on 30
December 1969.
Established in 2001, KA SMART is primarily a specialist market research
company, providing high value market intelligence, market research and
consulting services. While the company operates across all industries,
management`s experience base and track record has tended to focus the
business on the South African motor industry.
RGT established a relationship with the National Association of Automobile
Manufacturers of South Africa (NAAMSA) who produce and disseminate
automotive statistics. RGT is the sole source of and supplier of new
vehicles sales data to the SA motor industry, in association with NAAMSA,
for the past 26 years and owns a dynamic and steadily growing database of
new vehicle models sold by manufacturer, dealer and town and licensing
district in SA by month from 1980 onwards.
RGT`s revenue is based primarily on regular monthly annuity income from
"blue chip" customers and currently has no competitors and is protected by
significant barriers to entry for any prospective competitor.
2 FINANCIAL RESULTS
While market conditions in these first six months made for a challenging
trading situation the group has held its own and as the Motor Industry
emerges cautiously from recessionary times the Company is optimistic about
the Group`s future prospects. RGT SMART listed on AltX in April and these
results reflect a little over 4 months in the listed environment. Results
have been affected by a number of pre-listing and listing costs carried in
the first six months trading figures and these are not expected to have a
continuing impact.
These first few months have been engaged with adjustments to business
processes and a great deal of development for the directors and senior
executive.
All of this has been bedded down and the team is now focusing on increasing
sales and completing projects in the second half of the trading year which
we expect to show improved outcomes.
The key indicators are as follows:
* Revenue at R12 984 479 is down 1.9% from the comparable period in 2009 (R13
238 470). The renewed focus on sales will generate improved returns in the
coming months.
* Gross profit is down a significant 27% to R9.3 million for the six months
ended 31 August 2010. Much of this reduced profitability is due to
improved accuracy in the proper allocation of costs of sales and is off set
by a reduction in salary costs in the operating expenses line. In
addition, the once off costs mentioned above amounted to approximately R632
000 If the effect of the once off costs allocation is removed, profit
before tax would be up to approximately R3 million.
* Cash flow significantly improved - from a deficit in the preceding
comparative period to a surplus exceeding R2m for the six months ended 31
August 2010.
* Profit after tax for the period is 13.9% of revenue.
* Earnings per share and headline earnings per share of 0.49 cents was
achieved with a higher number of weighted average shares in issue.
3 SEGMENTAL REPORTING
The Group has adopted IFRS 8 Operating Segments as its segmental reporting
standard which requires an entity to report financial and descriptive
information about its reportable segments, which are operating segments or
the aggregation of operating segments that meet specified criteria.
Operating segments are components of an entity in respect of which separate
financial information is available is evaluated regularly by management.
For management purposes, the Group is organised into the following
segments:
For the six month period ended Market Statistics Total for
31 August 2010 research reportable
segments
External revenue 5 806 638 7 090 341 12 896 979
Internal revenue - 570 000 570 000
Total revenue 5 806 638 7 660 341 13 466 979
Cost of sales (1 777 351) (2 440 849) (4 218 200)
Personnel costs (1 671 516) (1 564 064) (3 235 580)
Lease rentals (301 983) (406 475) (708 458)
Other costs (604 963) (1 177 896) (1 782 859)
EBITDA 1 450 825 2 071 057 3 521 882
Depreciation and amortization (170 080) (128 246) (298 326)
Finance income 4 587 591
Finance costs (20 281) (115 056) (135 137)
Profit before tax 1 260 668 1 828 342 3 089 010
Segment assets 3 780 235 20 812 932 24 593 167
All other Elimination Total RGT
segments of SMART
intersegment
transactions
External revenue 87 500 - 12 984 479
Internal revenue 1 198 831 (1 768 831) -
Total revenue 1 286 331 (1 768 831) 12 984 479
Cost of sales - 570 000 (3 648 200)
Personnel costs (427 909) - (3 663 489)
Lease rentals - (708 458)
Other costs (1 393 780) 1 198 831 (1 997 808)
EBITDA (535 358) - 2 986 524
Depreciation and amortization (5 421) - (303 747)
Finance income 124 481 (85 294) 39 778
Finance costs (260 634) 85 294 (310 477)
Profit before tax (676 932) - 2 412 078
Geographical information has not been presented as the company operates in
South Africa only.
Revenue from external customers for each product and service, or each group
of similar products and services has not been presented, as the information
is not available and the cost to develop it would be excessive. The Group
does not earn revenue in excess of 10% from one single customer, and as
such does not place reliance on a single customer or group of customer for
its continued existence.
4 ISSUES OF SHARES
Subsequent to the Company`s financial year end of 28 February 2010, and
during the six months period ended 31 August 2010, in terms of the
Company`s listing on the Alternative Exchange of the JSE, a public offer
involving the issue of 57 000 000 ordinary shares at 10 cents per share
took place on 14 April 2010.
Other than the above mentioned public offer, there were no further shares
issued during the period under review.
5 REPURCHASE OF SHARES
As announced on SENS on 01 September 2010, shareholders were advised a
heads of agreement had been signed with a related party, Mr Martin Kruger,
pursuant to his retirement as Managing Director of RGT and director on the
RGT board, for the repurchase of 37 781 700 ordinary shares at a repurchase
price of 10 cents per share payable over a 3 year period. Martin will
retain 74 767 352 shares in RGT SMART, being 17.1% shareholding.
In terms of Section 5.69 of the JSE Listings Requirements, this specific
repurchase of shares from a related party requires approval from
shareholders in general meeting. A circular is being prepared for
submission to the JSE.
6 ACQUISITIONS AND DISPOSALS
There were no acquisitions or disposals during the period under review.
7 DIRECTOR CHANGES
During the period under review, following the introduction of the latest
King Code of Governance ("King III") for all companies with year ends
commencing 01 March 2010 and the recent changes to the JSE Listings
Requirements, the Company decided to restructure the board of directors in
order to reduce the number of executive directors on the main board and
appoint additional independent non-executive directors.
The following director`s resigned during the period:
Director Date appointed Date resigned
M Kruger 11 June 2008 28 April 2010
AC Calcutt 11 June 2008 28 April 2010
GJ Grundlingh 11 June 2008 28 April 2010
H Coetzee 10 March 2009 28 April 2010
In addition, Messrs Cumeshan Jayaseelan Moodliar and Trevor Bertram Hayter
were appointed to the board of RGT SMART as independent non-executive
directors with effect from 05 May 2010 and 09 September 2010 respectively.
8 SHARE CAPITAL
As at 31 August 2010, there were 400 018 300 issued ordinary shares and 99
981 700 unissued ordinary shares.
9 DIVIDEND
No interim dividend has been declared. The Board may consider the
declaration of a dividend at year end.
10 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.
11 CONTINGENT LIABILITIES
At the balance sheet date the Group does not have any contingent
liabilities.
12 SUBSEQUENT EVENTS
There are no material events subsequent to the period end that require
reporting.
13 FUTURE PROSPECTS AND PROFIT FORECAST
While it is unlikely, with the slow start, that we will achieve our
original targets for 2010, the Company remains very profitable and is in
remarkably good shape. The Company has invested heavily in system upgrades
and staffing and are well positioned to take advantage of the improving
economic outlook.
A number of exciting initiatives are underway and the Company expects these
to bear fruit in the next year or two:
* New product initiatives will see RGT SMART launching a range of new
subscription based services - many of these innovations by the RGT SMART
team, others as a result of productive joint venture developments. The
majority of these initiatives are focused on the auto industry but a number
see RGT SMART expanding their penetration into the banking and insurance
sectors.
* The launch of the RGT Academy is imminent and is important from a strategic
as well as a revenue generating perspective. The team has encountered huge
demand for training programs and the Company expect this business unit to
contribute significantly in the months to come.
RGT SMART is considering a number of possible acquisitions, but is proceeding
cautiously; we have a firm policy that prospective acquisitions fit the business
model, add significant strategic value and be viable business propositions.
By order of the Board
Mr AA Da Costa Mr PB De Vantier
Chairman Chief Executive Officer
18 November 2010
Johannesburg
Registered Office
Arcay House, Number 3 Anerley Road, Parktown, Johannesburg, 2193 (PO
Box 62397, Marshalltown, 2107)
Directors
AA Da Costa*#(Chairman), PB De Vantier(CEO), CW Reed (FD), NS Bruton,
Jacques Magliolo*, CJ Moodliar*#, TB Hayter*#
* Non-executive, #Independent
Designated Advisor Transfer Office
Arcay Moela Sponsors Link Market Services (Proprietary)
(Proprietary) Limited Limited
Date: 18/11/2010 12:11:00 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
