| Fri 25 May 2012, 16:53 | | 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
29 February 2012 as well as the Proposed Dividend
ISA Holdings Limited
("ISA")
(Registration number: 1998/009608/06)
(Tax reference number: 9340 150 714)
JSE share code: ISA
ISIN number: ZAE000067344
CONDENSED GROUP AUDITED RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2012 AS WELL AS
THE PROPOSED DIVIDEND
2012 2011
Audited Audited
R`000s R`000s
CONDENSED GROUP AUDITED STATEMENTS OF COMPREHENSIVE INCOME
Revenue 64,226 62,064
Turnover 62,946 59,223
Cost of sales (32,498) (28,656)
Profit before other income and expenses 30,448 30,567
Other income 29 1,090
Selling and marketing costs (7,113) (6,384)
Administrative expenses (5,062) (6,454)
Finance income 1,251 1,751
Finance costs (127) (267)
Profit before taxation 19,426 20,303
Taxation (6,566) (6,656)
Total comprehensive income 12,860 13,647
Earnings per share (cents) 7.0 7.2
Diluted earnings per share (cents) 7.0 7.2
Ordinary dividends paid per share (cents) 6.2 6.0
Capital distribution paid per share (cents) 1.0 1.7
CONDENSED GROUP AUDITED STATEMENTS OF FINANCIAL POSITION
ASSETS
Non-current assets 5,202 5,765
- Property, plant and equipment 471 577
- Intangible assets 4,549 4,960
- Deferred tax 182 228
Current assets 47,240 48,862
- Cash and cash equivalents 42,733 41,243
- Trade and other receivables 4,493 7,409
- Current tax receivable 14 210
Total assets 52,442 54,627
EQUITY
Equity capital and reserves 47,020 43,464
- Share capital and share premium 13,442 11,494
- Reserves 33,578 31,970
LIABILITIES
Current liabilities 5,422 11,163
- Interest bearing liabilities - 3,810
- Trade and other payables 4,903 6,974
- Provisions 270 379
- Current tax payable 249 -
Total equity and liabilities 52,442 54,627
Net asset value per share (cents) 25.6 23.7
Number of shares in issue at year-end (`000s) 183,600 183,600
CONDENSED GROUP AUDITED STATEMENT OF CHANGES IN EQUITY
Share Capital
Ordinary shares
Balance at beginning of the year 1,836 1,882
Shares purchased during the year - (46)
Balance at end of the year 1,836 1,836
Share premium
Balance at beginning of the year 9,658 15,687
Reduction in share premium - capital reduction (1,948) (3,200)
EmpowerGroup transaction maturation 3,896 -
Shares purchased during the year - (2,829)
Balance at end of the year 11,606 9,658
Total share capital and share premium 13,442 11,494
Reserves
Retained earnings
Balance at beginning of the year 31,970 29,543
Total comprehensive income 12,860 13,647
Distributions paid during the year (11,252) (11,220)
Balance at the end of the year 33,578 31,970
Total equity capital and reserves 47,020 43,464
CONDENSED GROUP AUDITED STATEMENT OF CASH FLOW
Cash flows from operating activities 13,456 10,651
Cash flows from investing activities 751 6,436
Cash flows from financing activities (13,241) (17,296)
Net increase in cash and cash equivalents 966 (209)
Revaluation of foreign cash balances 524 (1,255)
Cash and cash equivalents at beginning of year 41,243 42,707
Cash and cash equivalents at end of year 42,733 41,243
RECONCILIATION OF EARNINGS AND HEADLINE EARNINGS
Earnings attributable to ordinary shareholders 12,860 13,647
Profit/(loss) on sale of property, plant 7 -
and equipment
Taxation effects of adjustment (4) -
Headline earnings 12,856 13,647
ORDINARY SHARES
Earnings per share (cents) 7.0 7.2
Diluted earnings per share (cents) 7.0 7.2
Headline earnings per share (cents) 7.0 7.2
Diluted headline earnings per share (cents) 7.0 7.2
Weighted average number of shares in issue (`000s) 183,600 188,918
Number of shares in issue at year-end (`000s) 183,600 183,600
Treasury shares held at year-end (`000s) 8,517 8,517
Net asset value per share (cents) 25.6 23.7
Net tangible asset value per share (cents) 23.1 21.0
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, the
Listings Requirements of the JSE Limited and the Companies Act, 2008 (Act 71 of
2008). 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 29 February 2012 Audited Financial Statements and must be read
in conjunction with this report.
Two new amendments became applicable to ISA in the current year. IAS 1:
Presentation of Financial Statements, which resulted in a change in disclosure
of total comprehensive income found in the Statement of Comprehensive Income and
IAS 24: Related Party Disclosures, which resulted in a more detailed description
of Related Parties, but did not alter the disclosures of ISA. Neither of these
changes resulted in a change in policy nor had any effect on the financial
position or results reported in the current or prior years.
AUDITED RESULTS
Mazars has audited the annual financial statements (and group financial
statements) for the year ended 29 February 2012 and their unqualified audit
report on these financial statements, is available for inspection at the
company`s registered office.
PROPOSED DIVIDEND
Notice is hereby given that the directors propose ordinary dividend number 9, of
7.0 cents (gross) per share, to be confirmed at the Annual General Meeting to be
held on 27 June 2012.
Pertinent information regarding this distribution is as follows:
Local dividend tax rate: 15%
Gross local dividend amount: 7.0 cents per share
STC credits utilised: nil
Net local dividend amount: 5.95 cents per share
Non-reclaimable foreign withholding dividend tax rate: not applicable
Dividend reclaimable tax rate applicable overseas: not applicable
Expected issued share capital as at date of declaration: 192,592,593 shares
(this includes 8,517,044 treasury shares)
The salient dates for the ordinary dividend distribution ("distribution") are as
follows:
Distribution finalisation date: Wed, 27 June 2012
Last day to trade "cum" the distribution: Fri, 13 July 2012
Date trading commences "ex" the distribution: Mon, 16 July 2012
Record date: Fri, 20 July 2012
Date of payment: Mon, 23 July 2012
Shareholders may not dematerialise or rematerialise their shares between Monday
16 July 2012 and Friday 20 July 2012, both days inclusive.
The directors confirm that, after the distribution, 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
We have delivered a satisfactory result for the financial year ending 29
February 2012; this, in light of the increasingly challenging landscape in which
we operate. The composition of our revenue continues to be a focus area for
management, specifically addressing recurring revenues levels and higher profit
service sales.
The weakening of the Rand towards the latter part of the reporting cycle was
welcomed, but the impact was nominal due to its weighted average through the
year. As a substantial part of our revenue is derived from the Dollar price of
goods translated to Rands at the time of sale, a moderately weaker currency
would support higher Rand based revenues.
Our continued focus on cash management and credit risk has once again bore
pleasing results and underpins our strong financial position and favourable
liquidity levels, be it at a cost of lost sales opportunities. Income from
customers north of our borders continues to disappoint and is expected to remain
at low levels for as long as the group maintains its cautious risk profile.
Financial
An exciting aspect of our numbers was that turnover finally broke through the R
60 million milestone for the first time, ending on R 63 million for the year.
Gross profit margin on the sale of goods and services of 48%, compared to last
year`s 52%, was less exciting however, and was largely due to a contraction of
service derived revenues, when viewed against the previous reporting period`s
FIFA World Cup high. Product margin remains under pressure year to year.
The positive momentum of our internally developed MSSRegistered Pulse security
infrastructure monitoring and management products continued through the period
and has given management the confidence needed to increase their investment in
their development initiatives. The revenue received from these products has
already exceeded the cost of the development.
The group`s cash reserve of R 42.7 million is represented by a net asset value
and net tangible asset value of 25.6 and 23.1 cents per share respectively. This
result was achieved after taking into account the reduction in cash due to the
distribution to shareholders of R 14.4 million. Earnings before interest, tax,
depreciation and amortisation (EBITDA) declined by 2% to R 19.3 million and
profits declined by 5% to R 12.9 million. However, earnings per share (EPS) and
headline earnings per share (HEPS) both contracted by only 2.8% to 7.0 cents per
share.
During the period under review, the final leg of our BEE transaction with
EmpowerGroup was successfully concluded and the balance of their interest
bearing loan was credited to the company`s share premium account. This amounted
to R 3.9 million.
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 an ordinary dividend distribution to shareholders of 7.0 cents per
share. This dividend would be subject to the new dividend tax legislation.
During the period under review, distributions totalling 7.2 cents per share were
declared and paid to all shareholders on the 18th of July 2011, comprising of an
ordinary dividend of 6.2 cents per share and a capital distribution of 1.0 cent
per share.
Market and prospects
We maintain our opinion that the economic recovery is underway, albeit over a
longer timeframe than was initially anticipated. Management remains determined
to build a trusted information security brand. Vigilant cost controls,
innovative offerings and a persistent focus on service delivery remain our
priority. We are 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.
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 27th of June 2012.
For and on behalf of the board:
Clifford Katz
Chief Executive Officer
Woodmead
25 May 2012
DIRECTORS:
Clifford Katz (Chief Executive Officer)
Tarryn Marks (Chief Financial Officer)
Philip Green (Chief Technical Officer)
Denzil Perreira (Independent Non-executive Director / Chairperson)
Desmond Seaton (Independent Non-executive Director)
Thapeli Matsabu (Independent Non-executive Director)
Andrew Maren (Non-executive Director)
Alan Naidoo (Non-executive Director)
REGISTERED OFFICE:
Block 9, Pinewood Office Park, 33 Riley Road, Woodmead, South Africa
(P O Box 781667, Sandton, 2149, 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
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein, 2004, South Africa
(P O Box 4844, Johannesburg, 2000, South Africa)
COMPANY SECRETARY:
Clifford Katz
Block 9, Pinewood Office Park, 33 Riley Road, Woodmead, South Africa
(P O Box 781667, Sandton, 2149, South Africa)
WEBSITE AND EMAIL ADDRESS:
www.isaholdings.co.za
ir@isaholdings.co.za
Date: 25/05/2012 16:53:21 Produced by the JSE SENS Department.
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