| Mon 28 May 2001, 0:00 | | Infowave - Annual Report |
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INFOWAVE HOLDINGS LIMITED
Registration number 1998/017276/06
* Profit before tax up
* Attributable Earnings up
* Headline Earnings per share up
Income Statements
for the year ended 28 February 2001
Notes GROUP GROUP COMPANY COMPANY
2001 2000 2001 2000
R R R R
Revenue 2 21 881 556 22 814 868 1 537 538 -
Operating costs (19 830 598) (32 633 254) (1 533 276) -
Interest and
investment income 3 397 262 785 464 - -
Finance costs (6 493) (67 977) (4 262) -
Income/(loss)
before taxation 4 2 441 727 (9 100 899) - -
Taxation 6 1 027 805 (1 202 698) - -
Net profit/(loss)
for the year 1 413 922 (7 898 201) - -
Earnings/(loss)
per share (cents) 7 1,64 (9,30)
Headline earnings/(loss)
per share (cents) 7 1,88 (9,10)
Balance Sheets
as at 28 February 2001
Notes GROUP GROUP COMPANY COMPANY
2001 2000 2001 2000
R R R R
ASSETS
Non-current assets 3 647 958 3 189 001 6 483 658 4 975 372
Plant and equipment 9 1 029 255 1 986 303 - -
Interest in subsidiaries 10 6 483 658 4 975 372
Investments 8 2 443 810 - - -
Deferred taxation asset 11 174 893 1 202 698 - -
Current assets 7 854 474 6 956 784 90 90
Accounts receivable 2 956 066 4 216 516 90 90
Short-term loans 300 035 300 035 - -
Cash resources 4 598 373 2 440 233 - -
Total assets 11 502 432 10 145 785 6 483 748 4 975 462
EQUITY AND LIABILITIES
Capital and reserves 6 389 384 4 975 462 6 389 384 4 975 462
Issued capital 12 8 615 8 615 8 615 8 615
Share premium 13 8 942 609 8 942 609 8 942 609 8 942 609
Accumulated deficit (2 561 840) (3 975 762) (2 561 840) (3 975 762)
Non-current liabilities
Long-term borrowings 15 562 500 833 333 - -
Current liabilities 4 550 548 4 336 990 94 364 -
Accounts payable 4 300 548 4 086 990 94 364 -
Current portion of
long-term borrowings 250 000 250 000 - -
Total equity and liabilities 11 502 432 10 145 785 6 483 748 4 975 462
Cash Flow Statement
for the year ended 28 February 2001
NOTE GROUP GROUP
2001 2000
R R
Cash flows from operating activities
Net profit /(loss) before taxation 2 441 727 (9 100 899)
Adjustment for:
Investment income (397 262) (785 464)
Interest expense 6 493 67 977
Depreciation on plant and equipment 632 183 697 566
(Surplus)/loss on disposal of
plant and equipment (50) 233 054
Write down of investments 49 930 -
Loss on disposal of investments - 1 723 360
Loss on disposal of business 201 509 -
Operating profit/(loss)
before working capital changes 2 934 530 (7 164 406)
Working capital changes
Decrease/(increase) in receivables 809 992 (1 298 564)
Increase in payables 262 699 990 119
Cash generated from/
(utilised by) operations 4 007 221 (7 472 851)
Normal taxation paid - (1 507 850)
Investment income 303 522 785 464
Finance costs (6 493) (67 977)
Net cash inflow/(outflow)
from operating activities 4 304 250 (8 263 214)
Cash flow from investing activities
Acquisition of plant and equipment (141 642) (1 591 182)
Proceeds on disposal of
plant and equipment 50 113 984
(Acquisition of)/proceeds
from investments (2 400 000) 984 232
Proceeds on disposal of business A 666 315 -
Increase in short-term loans - (300 035)
Net cash (outflow)/inflow from
investing activities (1 875 277) (793 001)
CASH FLOWS FROM FINANCING ACTIVITIES
Long-term loans repaid (270 833) (166 667)
Proceeds from share issues - 850 034
Net cash (outflow)/inflow from
financing activities (270 833) 683 367
Net increase/(decrease)
in cash resources 2 158 140 (8 372 848)
Cash resources at beginning of year 2 440 233 10 813 081
Cash resources at end of the year 4 598 373 2 440 233
Note A
Proceeds on disposal of business
Net assets sold
- Plant and equipment 466 507
- Receivables 450 458
- Payables (49 141)
867 824
Loss on disposal of business (201 509)
Proceeds on disposal of business 666 315
Chairman's Report
I am pleased to report that InfoWave not only achieved its targets for
turnover and profitability, but also accelerated its 2002 plans by investing
in new initiatives towards the end of 2001. This will provide a solid and
sustainable foundation for future growth. The company has returned to
profitability, and moreover the cash and investment position has improved
from R2,4 million to R7 million.
PERFORMANCE
We successfully turned the company around from a R9,1 million loss to a
profit of R2,4 million before tax, after taking into account non-recurring
legacy expenses due to re-structuring in the previous year. The main
contributor to our profitability this year has been a strategy of focusing
on our core strengths of application implementation and support of both
custom-built software solutions and application packages, underpinned by
strong technical services and system integration.
Our decision to back Oracle technology has stood us in good stead, as Oracle
is becoming a technical platform standard for the corporate market in South
Africa and Africa, and is the international market leader. There is a
growing global demand for Oracle related services, which continues to
provide market opportunities for InfoWave. Added to this, a single
technology standard ensures higher quality for deliveries in our project and
support services.
The group plans to remain a KwaZulu Natal based operation, and to partner
with service providers and suppliers nationally. The partner initiative has
facilitated some very successful joint implementations. InfoWave, jointly
with Oracle SA, successfully implemented the first Oracle Process
Manufacturing ERP solution in South Africa. Although based in Durban, our
target market is not restricted to the region, and InfoWave currently
successfully supports solutions for customers in Tanzania, Malawi,
Mozambique and Swaziland, as well as throughout South Africa.
InfoWave's partnership with Bynx, a developer of an Oracle based suite of
Financial, Sales and Distribution application products, was strengthened
when InfoWave took over the Bynx KwaZulu Natal branch during the last
quarter of the financial year. The successful integration of the staff and
customers has provided further opportunity for growth during the next
financial year.
The research and development, mainly in the Web arena, completed during the
last financial year has broadened our offering and skills base, resulting in
the successful implementation of Web solutions for our customers.
InfoWave's increased sales focus created more market awareness and has
provided tangible new business, resulting in InfoWave increasing its number
of IT consultants by 30% in preparation for meeting this demand.
STRATEGIC INTENT
Our strategic intent to find a global partner is in progress. The Board is
committed to making the right choice, which is in the best interests of our
shareholders, our customers and our employees. By its nature this process
may take some time, and accordingly the Board has a strong policy of
'business as usual', demonstrated by our positive results from last year and
our aggressive plans for the coming year.
FUTURE PLANS AND PROSPECTS
Our plans and prospects for the next financial year are extremely positive,
ensuring continued growth in turnover and profit. InfoWave will be focusing
on the following growth opportunities and service offerings, some of which
have already commenced:
* Continue providing quality custom-built application solutions in niche
markets or business areas
* Aggressively market the Bynx products in KwaZulu Natal
* Increase our technical products and services, and actively market in
KwaZulu Natal
* Continue to partner with software companies for Oracle ERP solutions
* Focus on larger clients for outsourcing of application solutions and
support
* Target the sugar industry globally
* Actively pursue the micro-banking sector in order to maximise our niche
banking software and skills
* Continue to increase annuity revenue based on our principle of long-term
partnerships with our customers
* Continue internal research and development for opportunities in the
Internet-related market
* Continue to invest in our people
* Implement strategies for retention of our people.
THANKS
On behalf of the Board, I take this opportunity to thank our customers and
our employees. Our customers, for maintaining the excellent relations with
InfoWave, a vital ingredient for successful long-term partnerships. Our
employees, for remaining committed to InfoWave. Our product is our people,
and InfoWave is fortunate to have such a loyal team of highly skilled
consultants, who are intent on providing a quality service to our customers.
R P Collis
Executive Chairman
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