| Wed 6 Jun 2001, 0:00 | | Y3k Group Limited - Audited Annual Financials |
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Y3K GROUP LIMITED
Y3K GROUP LIMITED
(Registration number 1998/009608/06)
Audited results for the 14 months ended 28 February 2001
GROUP BALANCE SHEET
14 months ended 12 months ended
28 February 2001 31 December 1999
R'000s R'000s
ASSETS
Non-current assets 1,164 2,400
- Property, plant and equipment 871 2,229
- Goodwill 204 82
- Investments 89 89
Current assets 8,604 9,135
Total assets 9,768 11,535
EQUITY AND LIABILITIES
Shareholders' Funds 3,091 5,074
- Ordinary shareholders' interest 70 2,053
- Non distributable reserved 3,021 3,021
Non-current liabilities 86 495
- Interest bearing borrowings 86 495
Current liabilities 6,591 5,966
- interest bearing borrowings 1,230 1,394
- other 5,361 4,572
Total equity and liabilities 9,768 11,535
Net asset value per share (cents) 5.9 12.2
Net tangible asset value
per share (cents) 5.5 12.0
GROUP INCOME STATEMENT
14 months ended 12 months ended
28 February 2001 31 December 1999
R'000s R'000s
Revenue 17,074 53,061
- continuing operations 16,020 10,966
- discontinued operations 1,054 42,095
Operating loss before
exceptional item (6,279) (5,094)
- continuing operations (3,549) (1,693)
- discontinued operations (2,730) (3,401)
Exceptional item 2,883 (36)
Operating loss (3,396) (5,130)
Net funding costs (125) 700
- continuing operations (105) 1,127
- discontinued operations (20) (427)
Net loss for the period (3,521) (4,430)
ORDINARY SHARES
Loss per share (cents) (7.7) (5.9)
Fully diluted loss per share
(cents) (6.6) (5.9)
Fully diluted loss includes
7,549,676 to be issued.
Headline loss per share (cents) (13.2) (5.9)
- continuing operations (7.2) (0.8)
- discontinued operations (6.0) (5.1)
Weighted number of
ordinary shares in issue ('000s) 45,858 74,498
Number of shares in issue ('000s) 52,253 41,553
COMMENTS
Overview
It became apparent that the original group of companies listed as Y3K Group
Limited was put together by the incumbent management solely for the purposes
of achieving a listing on the main board. Few, if any, synergies could be
realised between group companies, either because the businesses concerned
were not compatible, or because management was unable to achieve such
synergies. Furthermore, it soon became apparent that these companies were
unlikely to be successful either individually or together. As a consequence
Y3K failed to meet its listing forecasts, and the group essentially
collapsed.
During the period new management continued to implement extensive
restructuring, the disposal of businesses and the introduction of focused,
professional management. The liquidation of Y3K was avoided. Only one of the
original businesses survived the restructuring, and it is now operating
profitably. Management has achieved stability for Y3K and the confidence of
its principals, staff and clients. The strategy going forward is to
aggressively grow the company, but only on the basis of a conservative and
well-focused expansion plan.
Results
The loss of R3,5 million reported for the 14 months ended 28 February 2001
reflects the substantial costs of continuous restructuring and refocusing in
order that Y3K can have a profitable future.
Lanlink, a network and groupware systems integrator, was acquired during the
period, and has made a positive contribution to Y3K's earnings. Lanlink met
its warranties and in terms of the acquisition agreement, the vendors of
Lanlink will be issued with an additional 7,5 million Y3K shares at the
forthcoming AGM. Lanlink's contribution to the group is expected to show
above average growth.
The exceptional item reflects the disposal of the Micro Angelo business to
its management for R4 million and a write off of R1,1 million from the
amount owing for the disposal of AMJ Business Systems. Y3K has retained the
rights to the Micro Angelo software until the purchase price is paid in
full.
Prospects
South African organizations are increasing their expenditure on securing
their information and databases, as the use of the internet, e-mail and e-
commerce continues to grow. The Y3K Group is in position to provide top
quality digital information security products and services, and has the
skills and technology to take advantage of opportunities in this fast
growing sector. Operating divisions Lanlink and Y3K Security Products
(formerly Gas Software) have strengthened their positions in their
respective sectors, and revenue growth is expected to be above average. Y3K
Security Products was recently awarded the distribution rights for Antigen
from Sybari. Antigen is a leading anti-virus product used for Lotus Notes
and Microsoft Exchange. A number of leading corporate clients have purchased
this product and more large sales are in the pipeline.
In the absence of unforeseen circumstances the group is expected to achieve
acceptable profits in the periods ahead.
For and on behalf of the board:
L Wengrowe
Chairperson
Johannesburg
31st May 2001
