| Fri 28 May 2010, 2:04 | | ISA - ISA Holdings Limited - Audited results for t |
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ISA
ISA
ISA - ISA Holdings Limited - Audited results for the year ended 28 February
2010, as well as the proposed dividend declaration and the proposed capital
repayment
ISA Holdings Limited
("ISA")
(Registration number: 1998/009608/06)
JSE share code: ISA
ISIN number: ZAE000067344
AUDITED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2010 AS WELL AS THE PROPOSED
DIVIDEND AND THE PROPOSED CAPITAL REPAYMENT
2010 2009
Audited Audited
R`000s R`000s
GROUP STATEMENTS OF COMPREHENSIVE INCOME
Revenue 62,447 60,302
Turnover 57,532 53,290
Cost of sales (27,862) (29,188)
Profit before other income and expenses 29,670 24,102
Other income 2,417 3,352
Selling and marketing costs (6,918) (6,162)
Administrative expenses (7,273) (7,756)
Finance income 2,498 3,660
Finance costs (288) (346)
Profit before taxation 20,106 16,850
Taxation (5,503) (5,484)
Profit attributable to equity shareholders 14,603 11,366
GROUP STATEMENTS OF FINANCIAL POSITION
ASSETS
Non-current assets 6,472 7,136
- Property, plant and equipment 314 416
- Intangible assets 5,332 6,155
- Deferred tax 826 565
Current assets 54,703 52,192
- Cash and cash equivalents 42,707 43,155
- Equity investments 4,565 2,582
- Trade and other receivables 7,322 6,128
- Inventories - 18
- Current tax receivable 109 309
Total assets 61,175 59,328
EQUITY
Equity capital and reserves 47,112 43,722
- Share capital and share premium 17,569 23,991
- Reserves 29,543 19,731
LIABILITIES
Non-current liabilities 3,544 3,260
- Interest bearing liabilities 3,544 3,260
Current liabilities 10,519 12,346
- Trade and other payables 9,071 8,055
- Provisions 897 961
- Current tax payable 551 3,330
Total equity and liabilities 61,175 59,328
GROUP STATEMENT OF CHANGES IN EQUITY
Balance at beginning of the year 43,722 42,084
Net profit for the year 14,603 11,366
Treasury shares purchased during the year (1,631) (99)
Distributions paid during the year (9,582) (9,629)
Balance at the end of the year 47,112 43,722
GROUP STATEMENT OF CASH FLOW
Cash flows from operating activities 10,537 12,426
Cash flows from investing activities 2,527 4,028
Cash flows from financing activities (11,217) (9,730)
Net increase in cash and cash equivalents 1,847 6,724
Revaluation of foreign cash balances (2,295) 2,278
Cash and cash equivalents at beginning of year 43,155 34,153
Cash and cash equivalents at end of year 42,707 43,155
RECONCILIATION OF EARNINGS AND HEADLINE EARNINGS
Earnings attributable to ordinary shareholders 14,603 11,366
Profit/(loss) on sale of property, plant 2 (2)
and equipment
Taxation effects of adjustment 1 (1)
Headline earnings 14,604 11,365
ORDINARY SHARES
Earnings per share (cents) 7.7 5.9
Diluted earnings per share (cents) 7.7 5.9
Headline earnings per share (cents) 7.7 5.9
Diluted headline earnings per share (cents) 7.7 5.9
Weighted average number of shares in issue (`000s) 190,213 192,591
Number of shares in issue at year-end (`000s) 188,233 192,117
Treasury shares held at year-end (`000s) 4,360 476
Net asset value per share (cents) 25.0 22.8
Net tangible asset value per share (cents) 22.2 19.6
BASIS OF PREPARATION
The annual financial statements of the Group and the Company have been
prepared in accordance with International Financial Reporting Standards
(IFRS), the AC 500 Standards as issued by the Accounting Practices Board, the
presentation and disclosure requirements of IAS 34 - Interim Financial
Reporting, the Listings Requirements of the JSE Limited and the Companies Act
of South Africa, 1973. The annual financial statements have been prepared on
the historical cost basis, except as indicated below, and incorporate the
principal accounting policies set out below. The policies set out below have
been consistently applied to all years presented. The annual financial
statements have been prepared on a going-concern basis, presented in
thousands of South African Rand (R`000s) and are rounded to the nearest
thousand.
AUDITED RESULTS
The annual financial statements for the year ended 28 February 2010 have been
audited by Mazars and their unqualified independent audit report is available
for inspection at the Group`s registered offices.
PROPOSED DIVIDEND AND PROPOSED CAPITAL REPAYMENT
Notice is hereby given that the directors propose ordinary dividend number 7,
of 6.0 cents per share, to be confirmed at the Annual General Meeting.
Notice is hereby given that the directors propose a capital repayment out of
share premium of 1.7 cents per share, to be approved by shareholders at the
Annual General Meeting. This is subject to the passing of an ordinary
resolution.
The salient dates for the capital repayment and ordinary dividend
distributions ("distributions") are as follows:
Distributions proposed date: Wednesday, 26 May 2010
Distributions finalisation date: Wednesday, 23 June 2010
Last day to trade "cum" the distributions: Friday, 9 July 2010
Date trading commences "ex" the distributions: Monday, 12 July 2010
Record date: Friday, 16 July 2010
Date of payment: Monday, 19 July 2010
Shareholders may not dematerialise or rematerialise their shares between
Monday 12 July 2010 and Friday 16 July 2010, both days inclusive.
COMMENTS
The Group has delivered a strong trading performance, driven by consistent
growth throughout the reporting period. An increase in income derived from
the sale of services was ahead of expectation, whilst recurring income levels
remained on target, at around 60% of turnover. Both of these factors
contributed substantially towards an exceptional performance in gross profit.
Most pleasing is that these results were achieved in an extremely difficult
economic cycle. The strength and quality of the underlying business, together
with a coherent focus on increasing value to our clients through service
delivery, have been instrumental contributors to this strong set of results.
Financial
An 8% growth in turnover to R57.5 million was achieved. Although acceptable
in the face of tough trading conditions, ISA missed its sales objectives and
can attribute the results to a substantial decline in business from the
greater African region, especially from Nigeria, Kenya and Botswana.
Management`s elevated focus on reducing credit risk, together with the
natural effects of the recession on these smaller economies, all but stalled
the sales momentum that had been developed over the last few years.
A pleasing shift towards higher value sales within our local market,
underpinned by strong recurring income and service revenues, resulted in a
23% growth in gross profit to R29.7 million. Stringent cost management during
the period, as well as a pleasing partial reversal of prior year losses in
the Group`s blue chip equities, amounting to R2.0 million, played a further
role towards impressive bottom line earnings and headline earnings growth for
the period of 28%, to R14.6 million.
Our strong balance sheet, including a cash holding of R42,7 million, is
represented by a net asset value and net tangible asset value of 25.0 and
22.2 cents per share respectively. These results were achieved after taking
into account the distributions to shareholders of R9.6 million during this
reporting period, as well as accounting for a R2.3 million foreign exchange
expense caused by the downward revaluation of the Group`s US dollar cash
reserves, being $1.3 million at the close of the period. Management are of
the view that the losses accrued to the Group from the downward revaluation
of their US dollar cash reserves will be reversed in the longer term as the
Rand weakens from the current levels.
Distribution
ISA should be able to sustain its strategic business objectives with little
impact to its capital structures. In this light, and in support of the
directors` opinion that surplus cash should be distributed to shareholders,
the Board recommends an ordinary dividend of 6.0 cents per share, as well as
a capital distribution of 1.7 cents per share.
During the period under review distributions totaling 5.0 cents per share
were declared and paid to all shareholders on the 20th of July 2009. This
distribution was made up of a capital repayment of 2.5 cents per ordinary
share, as well as 2.5 cents per share ordinary dividend.
Market and prospects
Management remains determined to continue to build a trusted information
security brand and to create tangible value for all stakeholders. Vigilant
cost controls, innovative offerings and a persistent focus on high-profit
service delivery remain our priority. Management is of the view that an
essential part of our longer term growth strategy is an investment in organic
growth, where we can build and enhance our existing capabilities. We do
however continue to seek strategic opportunities to complement our existing
business and eliminate inefficiencies by further improving our internal
systems. Although, we have seen early signs of economic recovery, we remain
cautiously optimistic about the year ahead.
The principle market drivers for the IT security industry remain robust.
Enterprise adoption of secure mobile solutions is set to become commonplace
as a result of more affordable and reliable broadband access and the need to
create a more effective distributed workforce. Viewed together with a
maturing corporate governance and legislative framework in this country,
ISA`s solutions and services continue to offer a compelling proposition to
the market.
Annual report and Annual General Meeting
Shareholders are hereby advised that ISA has posted its audited annual
financial statements and annual report for the financial year ended 28
February 2010 to shareholders today, 28 May 2010.
Notice is hereby given that the Annual General Meeting of members of ISA will
be held at the registered office of ISA, Unit 12, 152 Bram Fischer Drive,
Randburg at 10h00 on Wednesday, 23 June 2010, to transact the business as set
out in the notice of annual general meeting circulated together with the
annual financial statements.
Conclusion
On behalf of the board, I would like to take this opportunity to thank the
ISA team who have been unfailing in their efforts to reach the targets set.
It is no understatement to refer to this year as being one of the toughest
yet and these results are a testament to their dedication, loyalty and
passion for the business. My appreciation is also extended to my colleagues
on the board for their wise counsel and valuable input. Finally, I thank all
stakeholders, customers and vendors for their support and I look forward to
meeting shareholders at the Annual General Meeting to be held on the 23rd of
June 2010.
For and on behalf of the board:
Clifford Katz
Chief Executive Officer
Randburg
28 May 2010
Designated advisor: Grindrod Bank Limited
Date: 28/05/2010 14:04:02 Produced by the JSE SENS Department.
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