| Tue 24 May 2011, 15:23 | | ISA - ISA Holdings Limited - Condensed group audited results for the year ended |
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ISA
ISA
ISA - ISA Holdings Limited - Condensed group audited results for the year ended
28 February 2011 as well as the proposed dividend and the proposed capital
reduction
ISA Holdings Limited
("ISA")
(Registration number: 1998/009608/06)
JSE share code: ISA
ISIN number: ZAE000067344
CONDENSED GROUP AUDITED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2011 AS WELL AS
THE PROPOSED DIVIDEND AND THE PROPOSED CAPITAL REDUCTION
2011 2010
Audited Audited
R`000s R`000s
CONDENSED GROUP AUDITED STATEMENTS OF COMPREHENSIVE INCOME
Revenue 62,064 62,447
Turnover 59,223 57,532
Cost of sales (28,656) (27,862)
Profit before other income and expenses 30,567 29,670
Other income 1,090 2,417
Selling and marketing costs (6,384) (6,918)
Administrative expenses (6,454) (7,273)
Finance income 1,751 2,498
Finance costs (267) (288)
Profit before taxation 20,303 20,106
Taxation (6,656) (5,503)
Total comprehensive income 13,647 14,603
Earnings per share (cents) 7.2 7.7
Diluted earnings per share (cents) 7.2 7.7
Ordinary dividends paid per share (cents) 6.0 2.5
Capital distribution paid per share (cents) 1.7 2.5
CONDENSED GROUP AUDITED STATEMENTS OF FINANCIAL POSITION
ASSETS
Non-current assets 5,765 6,472
- Property, plant and equipment 577 314
- Intangible assets 4,960 5,332
- Deferred tax 228 826
Current assets 48,862 54,703
- Cash and cash equivalents 41,243 42,707
- Equity investments - 4,565
- Trade and other receivables 7,409 7,322
- Current tax receivable 210 109
Total assets 54,627 61,175
EQUITY
Equity capital and reserves 43,464 47,112
- Share capital and share premium 11,494 17,569
- Reserves 31,970 29,543
LIABILITIES
Non-current liabilities - 3,544
- Interest bearing liabilities - 3,544
Current liabilities 11,163 10,519
- Interest bearing liabilities 3,810 -
- Trade and other payables 6,974 9,071
- Provisions 379 897
- Current tax payable - 551
Total equity and liabilities 54,627 61,175
Net asset value per share (cents) 23.7 25.0
Number of shares in issue at year-end (`000s) 183,600 188,235
CONDENSED GROUP AUDITED STATEMENT OF CHANGES IN EQUITY
Share Capital
Ordinary shares
Balance at beginning of the year 1,882 1,921
Shares purchased during the year (46) (39)
Balance at end of the year 1,836 1,882
Share premium
Balance at beginning of the year 15,687 22,070
Reduction in share premium - capital repayment (3,200) (4,791)
Shares purchased during the year (2,829) (1,592)
Balance at end of the year 9,658 15,687
Total share capital and share premium 11,494 17,569
Reserves
Retained earnings
Balance at beginning of the year 29,543 19,731
Total comprehensive income 13,647 14,603
Distributions paid during the year (11,220) (4,791)
Balance at the end of the year 31,970 29,543
Total equity capital and reserves 43,464 47,112
CONDENSED GROUP AUDITED STATEMENT OF CASH FLOW
Cash flows from operating activities 10,651 10,537
Cash flows from investing activities 6,436 2,527
Cash flows from financing activities (17,296) (11,217)
Net increase in cash and cash equivalents (209) 1,847
Revaluation of foreign cash balances (1,255) (2,295)
Cash and cash equivalents at beginning of year 42,707 43,155
Cash and cash equivalents at end of year 41,243 42,707
RECONCILIATION OF EARNINGS AND HEADLINE EARNINGS
Earnings attributable to ordinary shareholders 13,647 14,603
Profit/(loss) on sale of property, plant - 2
and equipment
Taxation effects of adjustment - 1
Headline earnings 13,647 14,604
ORDINARY SHARES
Earnings per share (cents) 7.2 7.7
Diluted earnings per share (cents) 7.2 7.7
Headline earnings per share (cents) 7.2 7.7
Diluted headline earnings per share (cents) 7.2 7.7
Weighted average number of shares in issue (`000s) 188,918 190,213
Number of shares in issue at year-end (`000s) 183,600 188,235
Treasury shares held at year-end (`000s) 8,517 4,360
Net asset value per share (cents) 23.7 25.0
Net tangible asset value per share (cents) 21.0 22.2
BASIS OF PREPARATION
The condensed annual financial statements of the Group and the Company have been
prepared in accordance with the Framework concepts and the measurement and
recognition requirements of the International Financial Reporting Standards
(IFRS), the AC 500 Standards as issued by the Accounting Practices Board,
containing the information requirements of IAS 34 - Interim Financial Reporting,
the Listings Requirements of the JSE Limited and the Companies Act, 2008 (Act 71
of 2008), as amended. The condensed 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 condensed
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. The same accounting policies and methods of computations are
followed in this report as compared with the 28 February 2011 Audited Financial
Statements and must be read in conjunction with this report.
AUDITED RESULTS
Mazars has audited the annual financial statements (and group financial
statements) for the year ended 28 February 2011 and their unqualified audit
report, together with their audit report on these financial statements, is
available for inspection at the company`s registered office.
PROPOSED DIVIDEND AND PROPOSED CAPITAL REDUCTION
Notice is hereby given that the directors propose ordinary dividend number 8, of
6.2 cents per share, to be confirmed at the Annual General Meeting.
Notice is hereby given that the directors propose a capital reduction out of
share premium of 1.0 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 reduction and ordinary dividend distributions
("distributions") are as follows:
Distributions finalisation date: Wednesday, 22 June 2011
Last day to trade "cum" the distributions: Friday, 8 July 2011
Date trading commences "ex" the distributions: Monday, 11 July 2011
Record date: Friday, 15 July 2011
Date of payment: Monday, 18 July 2011
Shareholders may not dematerialise or rematerialise their shares between Monday
11 July 2011 and Friday 15 July 2011, both days inclusive.
The directors confirm that, after the distributions, ISA will be able to pay its
debts as they become due in the ordinary course of business, and that its
consolidated assets, fairly valued, will exceed its consolidated liabilities.
COMMENTS
I am pleased to present our results for the year ending 28 February 2011.
Overall performance fairly reflects the hard work and devotion demonstrated by
the ISA team, despite the challenging economic landscape in which we operate.
Our robust financial position and healthy cash flows continue to underpin the
business framework, whilst a satisfactory mix of recurring income and service
derived revenue provides the impetus for steady growth into the future.
Financial
A nominal increase in turnover of 3% was disappointing and fell short of our
anticipated double digit growth for the period. The unexpected strengthening of
the Rand dampened what could have been a satisfactory sales performance, as a
substantial part of our revenue is derived from the Dollar price of goods
converted to Rands at the time of sale. The effect of the strong Rand further
impacted our results with a charge of R1.3 million resulting from the
revaluation of our US$1.5 million foreign currency reserve. The Group sold its
equity investments in the current financial period for an amount of R 5.1
million.
Receipts from the sale of higher margin services through the period grew by a
healthy 18%, which adequately compensated for lower margins received on the sale
of products. Gross profit margin remained constant at 52%. Most pleasing is that
we have developed a steady recurring revenue stream from MSSRegistered Pulse,
our internally developed security infrastructure monitoring and management
products. This encouraging momentum early in the product lifecycle has given us
the confidence needed to increase our investment in this part of the business
and accelerate the development cycle further.
Net asset value and net tangible asset value of 23.7 and 21.0 cents per share
respectively is derived predominantly from our strong cash holding of R41.2
million. This result was achieved after taking into account the R2.9 million
spent on buying back company shares, as well as the cash distribution to
shareholders of R14.4 million which was paid during the period.
Pre-tax profit growth of 1% and EBITDA growth of 4% was impacted by our
comparatively high tax bill, resulting in a decline in earnings and headline
earnings of 6.5% to 7.2 cents per share. This result was slightly lower than
expectation.
Distribution
ISA will 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 a distribution to shareholders of 7.2 cents per share, comprising of
an ordinary dividend of 6.2 cents per share and a capital distribution of 1.0
cents per share.
During the period under review distributions totaling 7.7 cents per share were
declared and paid to all shareholders on the 19th of July 2010, comprising of an
ordinary dividend of 6.0 cents per share and a capital distribution of 1.7 cents
per share.
Market and prospects
We are of the view that the economic recovery is underway, although it is likely
to play itself out over a longer timeframe than was initially anticipated. It is
with this view in mind that we remain cautiously optimistic about the year
ahead. The strength of our underlying business, together with its healthy
capital structures and market positioning, bodes well for ISA and we remain
confident that we have the tools at our disposal to outperform our peers in the
years to come.
The key drivers of the IT security market remain robust and we are well
positioned to benefit from this. The continued evolution of threats and attacks
against organisations, together with the increased regulatory and legislative
compliance requirements, continue to elevate the importance of IT security
within organisations. In addition, IT security remains a cornerstone for
business enablement, which we believe should create opportunities for us in
other areas of the ICT market, as customers are giving more priority to their
need for a secure converged information and communication framework.
Conclusion
On behalf of the Board, I would like to take this opportunity to thank the ISA
team for their continued dedication and hard work. 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 22nd of June 2011.
For and on behalf of the board:
Clifford Katz
Chief Executive Officer
Randburg
24 May 2011
DIRECTORS:
Clifford Katz (Chief Executive Officer)
Tarryn Brits (Chief Financial Officer)
Philip Green (Chief Technical Officer)
Andrew Maren (Non-executive Director)
Alan Naidoo (Non-executive Director)
Desmond Seaton (Independent Non-executive Director)
Denzil Perreira (Independent Non-executive Director)
REGISTERED OFFICE:
Unit 12, 152 Bram Fischer Drive, Randburg, 2194, South Africa
(P O Box 142, Randburg, 2125, South Africa)
DESIGNATED ADVISOR:
Exchange Sponsors (2008) (Proprietary) Limited
44a Boundary Road, Inanda, 2196, South Africa
(P O Box 411216, Craighall, 2024, South Africa)
TRANSFER SECRETARIES:
Link Market Services South Africa (Proprietary) Limited
5th Floor, 11 Diagonal Street, Johannesburg, 2001, South Africa
(P O Box 4844, Johannesburg, 2000, South Africa)
COMPANY SECRETARY:
Clifford Katz
Unit 12, 152 Bram Fischer Drive, Randburg, 2194, South Africa
(P O Box 142, Randburg, 2125, South Africa)
WEBSITE AND EMAIL ADDRESS:
www.isaholdings.co.za
ir@isaholdings.co.za
Date: 24/05/2011 15:23:02 Produced by the JSE SENS Department.
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