| Tue 27 Feb 2001, 0:00 | | Aqua Online Holdings Limited - Unaudited Interim R |
|
Aqua online Holdings Limited
Registration number 1971/005628/06
www.aquaonline.com
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2000
* Making e-Business a Reality
* Financial Highlights
* EPS growth of 141%
* 62% of Revenue annuity in nature
* Revenue growth of 309%
* Strong cash flows - R32 million cash balanced
* 66% Revenue and 91% income before taxation in foreign currencies
* Healthy order book for 2001
Consolidated income statements
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 31 Dec 30 June
2000 1999 2000
R'000 R'000 R'000
Revenue 36 249 8 869 27 621
Earnings before interest, taxation
and depreciation 11 063 2 624 7 398
Depreciation (1 256) (177) (1 572)
Interest received 1 165 177 581
Income before taxation 10 972 2 624 6 407
Taxation (note 1) 537 603 658
Attributable earnings 10 435 2 021 5 749
Earnings per share (cents) 3,97 1,65 4,21
Headline earnings per share (cents) 3,97 1,65 4,21
Weighted shares in issue and to be
issued (000) 262 549 122 367 136 691
Consolidated balance sheets
Unaudited Unaudited Audited
31 Dec 31 Dec 30 June
2000 1999 2000
R'000 R'000 R'000
Assets
Non-current assets 6 251 2 711 4 457
Equipment 6 251 2 338 3 573
Deferred taxation - 373 -
Other investments - - 884
Current assets 41 968 6 954 33 500
Debtors and prepayments 9 918 4 001 8 724
Cash resources 32 050 2 953 24 776
Total assets 48 219 9 665 37 957
Equity and liabilities
Equity
Ordinary shareholders' funds 37 586 2 818 25 509
Non-current liabilities
Deferred taxation 48 55 48
Current liabilities 10 585 6 792 12 400
Creditors 9 438 3 095 11 790
Purchase consideration
payable - 3 149 -
Taxation 1 147 548 610
Total equity and liabilities 48 219 9 665 37 957
Net asset value per share (cents) 14,32 2,03 13,66
Condensed consolidated cash flow statements
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 31 Dec 30 June
2000 1999 2000
R'000 R'000 R'000
Cash generated from operations 11 063 2 624 7 704
Interest received 1 165 177 581
Working capital changes (3 545) 178 3 727
Net cash generated 8 683 2 979 12 012
Net cash outflow from investing
activities (1 409) (4 391) (142 994)
Net cash inflow from financing
activities - 1 375 152 768
Net movement in cash resources 7 274 (37) 21 786
Opening cash resources 24 776 2 990 2 990
Closing cash resources 32 050 2 953 24 776
Condensed consolidated statements of
changes in ordinary shareholders' funds
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 31 Dec 30 June
2000 1999 2000
R'000 R'000 R'000
Opening ordinary shareholders' funds 25 509 3 490 3 490
Shares issued and to be issued - 123 079 152 768
Goodwill written off - (125 796) (136 825)
Translation difference 1 642 24 327
Attributable earnings 10 435 2 021 5 749
Closing balance 37 586 2 818 25 509
Notes to the financial statements
Unaudited Unaudited Audited
31 Dec 31 Dec 30 June
2000 1999 2000
R'000 R'000 R'000
1. Taxation
South African normal tax
- Current - 236 6
Foreign 537 367 652
- Current 537 367 604
- Deferred - - 48
537 603 658
No provision has been made for South Africa taxation due to estimated tax
losses brought forward of R2 million.
2. Earnings per ordinary share
The calculation of earnings per ordinary share is based on profit after
taxation of R10435000 and the weighted average of 262548787 ordinary shares in
issue and to be issued.
Introduction
The directors of Aqua Online Holdings Limited ("Aqua" or the "Group") have
pleasure in presenting the unaudited interim results for the six-month period
ended 31 December 2000 ("the interim period").
Aqua has performed exceptionally well against a background of negative
sentiment towards companies in the information technology sector. The
significant growth in demand for Aqua's e-services has translated into results
which reflect strong organic growth from operations. With 81% of pre-tax
profits being annuity in nature, the Group has built a solid foundation of
repeat and predictable cash flows. Management's focus on the provision of
superior e-services and dedication to sustaining strong cash flow, complemented
by stringent working capital management, have enhanced Aqua's financial
strength. Consequently the Group is well positioned to take full advantage of
the exciting growth challenges posed by the global e-services market.
Group Profile
Aqua is a fully integrated group of both International and South African
businesses. The Group offers e-commerce-related services across the e-services
continuum ranging from e-strategy consulting, front-end web design, back-end
software development and integration through to Internet-related security
services, 24/7 multi-lingual (European) contact centre, US dollar and European
currency payment gateways, off-line processing services and multi-location
International web hosting. These e-services concentrate particularly on the
enablement and administration of high volume, cash intensive e-commerce
environments.
The limitation on in-house e-commerce and technical services capacity
experienced recently by established corporates, and by start-up businesses
alike, has created an increasing demand for Aqua's e-services. The Group's
niche expertise in the lucrative and fast growing online gaming and leisure
industry is finding an ever increasing application to other industries with
similar requirements. Aqua's flexible and participatory pricing model enables
it to share directly in the ongoing success of its clients and at the same time
to seek out new annuity streams, while continually adding new clients to its
portfolio.
The Group will continue to direct its efforts primarily towards growing its
offshore annuity revenue streams, while servicing these with South African
skills.
Financial results
Results for the six months ended 31 December 2000 reflect exponential increases
in revenue, operating profits and earnings per share (EPS), compared to both
the preceding six-month period and the previous corresponding interim period.
Revenue for the interim period of R36,2 million grew by 309% from R8,9 million
for the six months to December 1999. Operating profits increased by 301%, from
R2,4 million for the previous corresponding interim period to R9,8 million, and
net income after tax of R10,4 million grew by 416% from R2,0 million to
December 1999.
66% of total Group revenue and 91% of income before tax is derived in foreign
currencies, predominantly US dollars and sterling. Earnings before interest,
tax, depreciation and amortisation (EBITDA)/revenue margins of 30,5% (June
2000: 26,8%) reflect the scalability of Aqua's business model and operating
structure.
EPS of 3,97 cents compares to 1,65 cents for the previous corresponding interim
period and 4,21 cents for the full twelve months to June 2000. The weighted
average earnings per share has been based on 262,5 million shares. This takes
into account all the shares to be issued in terms of the vendor obligations.
The Group's balance sheet again reflects a strong cash position of R32 million,
significantly up from R24,8 million in June 2000.
Prospects
Management will continue to operate within a framework of strict financial
discipline, focusing on Aqua's core competencies in the e-services market. The
six months ahead look positive for the Group with a substantial order book in
the enablement division, and increased clients and client performance on the
administration side of Aqua's business.
Management is confident of sustained future success and looks forward to
further enhancing stakeholder value.
People
The directors would like to thank the Aqua team, now numbering more than 130,
for their outstanding performance. The Group is committed to providing a
stimulating work environment and long-term career path for its people, who
remain its most valuable asset, thereby retaining its status as the e-services
employer of choice.
STRATE
Shareholders are advised that the company's shares will be dematerialised with
effect from 5 March 2001, with electronic trading and settlement commencing on
26 March and 2 April 2001 respectively. Shareholders are referred to the
correspondence and summary of information in this regard previously dispatched
to all shareholders.
Dividends
In line with Group policy, no dividend has been declared for the interim period
under review.
Cautionary Announcement
Your attention is drawn to the cautionary announcement made on the 1 February
2001. Shareholders will be advised in due course as to the outcome of these
discussions.
By order of the Board 27 February 2001
Directors: Dionne Ellerine* Tal Harpaz Jeffrey Liebesman* (Chairman)
Sean Rose Martin Sacks* Gideon Schachat Jonathan Schneider Brent
Shahim (*Non-executive) ( Joint CEO)
Registered office: Ground Floor Sanlam Arena c/o Bolton Road and Cradock
Avenue Rosebank P O Box 742 Parklands 2121 South Africa Telephone
447-0877 Facsimile 447-0878 www.aquaonline.com
Transfer Secretaries: Mercantile Registrars Limited 11 Diagonal Street
Johannesburg 2001 P O Box 1053 Johannesburg 2000
Company Secretary: Corpgro Management Services (Proprietary) Limited 2
Arnold Road Rosebank P O Box 471917 Parklands 2121
AQUA CONTINUES TO EXCEED EXPECTATIONS
PRESS RELEASE
Aqua Online, the JSE-listed focused e-services provider, has reported
attributable earnings of R10,4 million for the 6 months to December 2000, 416%
ahead of the R2 million reported in its previous corresponding interim period
to December 1999.
Interim revenue of R36,2 million exceeded R8,9 million for the corresponding
interim period to December 1999 by 309 %, while earnings per share (EPS) of
3,97 cents were more than double the 1,65 cents for the same period to December
1999. EPS, if annualised for the full trading year to June 2001, is also well
ahead of EPS of 4,21 cents for Aqua's maiden 12 months to June 2000.
Brent Shahim, joint CEO of Aqua Online, says that Aqua's success contrasts the
increasing 'dot.com' fallout and negative sentiment towards technology
companies. "Firstly we have strong cash flows," says Shahim. "Unlike many
technology companies our growth is funded entirely by revenue generated from
day-to-day business operations.
Secondly, more than 90% of net income is generated in US Dollar and Pound
Sterling. As we leverage our South African skills and cost bases to service
our offshore clients, we consistently maintain a favourable cost to revenue
ratio. And with 81% of pre-tax profits annuity-based, the Group has strong,
repeat 'annuity type' cash flows, " he says.
Shahim adds that the Group's ability to manage growth distinguishes it from
other industry players. "Our exponential growth over the past year-and-a-half
has taken place within the constraints of strict financial discipline," he says
He points out the integral role which Aqua's people have played in the Group's
continued success. "Since year end in June 2000 the team has increased from 98
to 130. We are constantly working at capacity and therefore seeking quality
resources. But we make sure that each new member of the Aqua team matches the
enthusiasm, innovation and sheer energy of the rest," he says.
Aqua projects future growth in the online leisure and gaming market, to which
it offers specialist e-services expertise. "Statistics confirm that this is the
Internet's fastest growing industry," says Shahim. "Our online gaming
infrastructure is exceptionally scalable which enables Aqua to offer additional
services to our existing clients and to take on new clients, without
compromising the quality of existing services. And revenue is continuously
boosted by our lucrative transaction participation model. Clients using this
pricing structure have shown exponential growth to date, and by continually
adding new clients to our portfolio we further dilute potential risk."
UK-based joint CEO, Tal Harpaz, says: "Merrill Lynch recently estimated the
global online gambling market to be worth #580 billion, while the online gaming
market in the UK will be worth in excess of #123 billion by 2015. Aqua's
experience in servicing the online leisure and gaming market from its inception
has positioned the Group to capitalise on this lucrative growth opportunity.
In addition the increasing move by corporates from e-strategy to e-business
implementation will continue to generate demand for the services offered by
both our enablement division in Johannesburg and our administration division in
London," says Harpaz.
"The six months ahead look extremely positive for the Group with a substantial
order book in the enablement division and an increase in clients and client
performance on the administration side. Our proven business strategy will
ensure that we continue to maintain momentum and enhance shareholder value," he
adds.
Aqua Online is a fully integrated group of SA-based and international
operations, which provides end-to-end e-commerce related services across the
e-services continuum. These range from e-strategy consulting, front-end web
design and back-end software development and integration, to online security
services, 24/7 hour multilingual (European) call/e-mail centre support,
international multi-currency payment gateways, off-line processing services and
multi-location international web hosting.
Ends.
Issued by: Fleishman-Hillard Vallun Wilkins
Nicole Sacks (011) 706-8800/083 287 2771
On behalf of: Aqua Online Holdings Limited
Brent Shahim (011) 447 0877/082 456 6600
Tal Harpaz (011) 447 9177/083 408 7332
Andrew McHenry, Aqua Online Marketing Manager - (011) 447 0877/082 454 6841
Date: 27 February 2001
