| Fri 27 Jul 2001, 0:00 | | Zaptronix: Audited Results Year Ended 30 Apr 01 |
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ZAPTRONIX
(Registration number 1997/014928/06)
AUDITED RESULTS FOR THE YEAR ENDED 30 APRIL 2001
Consolidated Income Statement
Audited for Audited for
the 12 months the 12 months
ended ended
30 April 2001 30 April 2000
R'000 R'000
Revenue 16 119 28 254
Net operating (loss)/income
before interest (13 999) 9 094
Interest received 1 264 20
Finance costs (118) (236)
Net operating (loss)/income
after interest (12 853) 8 878
Share of associate (loss)/income (278) 392
Net (loss)/income before taxation (13 131) 9 270
Taxation 3 575 (2 717)
Net (loss)/income after taxation (9 556) 6 553
Outside shareholders' interest 662 (609)
Net (loss)/profit for the year (8 894) 5 944
(Loss)/Earnings per
ordinary share (cents) (6,37) 6,18
Headline (loss)/earnings
per ordinary share (cents) (6,37) 8,20
Weighted average number
of shares ('000) 139 676 96 192
Consolidated Balance Sheet
Audited at Audited at
30 April 2001 30 April 2000
R'000 R'000
ASSETS
Fixed assets and intangibles 28 445 30 107
Investments 4 376 4 654
Current assets excluding cash 6 641 12 109
Cash and cash equivalents 10 640 4 358
Total assets 50 102 51 228
EQUITY AND LIABILITIES
Share capital and premium 26 749 6 270
Reserves 15 542 24 347
Share capital and reserves 42 291 30 617
Outside shareholders' interest 29 691
Deferred tax 4 814 7 274
Total capital and reserves 47 134 38 582
Current liabilities 2 968 12 646
Total equity and liabilities 50 102 51 228
Net asset value per share (cents) 29,2 31,8
Net tangible asset value
per share (cents) 19,9 20,2
Cash value per share (cents) 7,3 4,5
Consolidated Cash Flow Statement
Audited for Audited for
the 12 months the 12 months
ended ended
30 April 2001 30 April 2000
R'000 R'000
Cash (utilised) generated
from operations (7 982) 9 933
Finance income / (costs) 1 146 (216)
Taxation paid (557) (286)
Cash (utilised) flow
from operating activities (7 393) 9 431
Cash flow from investing activities (6 804) (13 076)
Cash flow from financing activities 20 479 5 987
Net increase in cash and
cash equivalents 6 282 2 342
Cash and cash equivalents at
the beginning of the year 4 358 2 016
Cash and cash equivalents at
the end of the year 10 640 4 358
Note:
No dividend will be declared.
COMMENTARY
On January 22, 2001 we issued a profit warning for the year to April 2001
resulting from the situation that the KidCard project had precipitated. Our
original development agreement with Hitachi envisaged an initial order of
250 000 units with a further 250 000 units expected within the period under
review. At the time (last April) we were asked to give Hitachi written
assurances that we would free up enough production capacity to fulfil both
initial and subsequent orders. This was done at the expense of existing
contracts.
During the period under review Hitachi Europe Limited has undergone many
internal changes and a number of the individuals we had built relationships
with since mid-1999 either left Hitachi voluntarily, or were retrenched. In
the last 12 months the Hitachi representative on our Board has changed four
times. This break in continuity and the resultant uncertainty around the
KidCard project has hurt our company's earnings severely during this period.
The situation remains unclear. Notwithstanding that Hitachi has shipped us
30 000 of the specialised chips that go into the units, we are yet to
receive an order to convert these into finished product. In addition, there
are still moneys outstanding on the development of the unit that have not
been brought to book for this period. We estimate that we have lost in the
region of R17,5 million in pre-tax earnings as a result of the KidCard
orders not being placed.
As previously outlined to shareholders, our business comprises two
activities, viz. the "old commerce" business, which in our case is the
business conducted principally out of Pinetown - a specialised outsourced
manufacturer of electronic assemblies, including "own" products, and the
"new commerce" business that relates to transaction processing, including
but not limited to smart card applications.
It is never easy to regain lost contracts. We have spent most of the past
six months trying to make sure that our "old commerce" business is restored
to profitability - at least to the extent that it can fund the Group's
investments into "new" initiatives. One of the results of this is the
relationship with Invensys which has already resulted in an initial order
for $955 000 to be delivered within the current financial year.
The "old commerce" business has not yet been restored to profitability
but the pipeline of potential business is encouraging. Certain machinery in
the plant has been upgraded to increase production capability and broaden
the scope of our market. It is envisaged that by the end of the current
financial year we will be at a point where this side of our business will be
profitable and the Group generating cash flow.
The loss in revenue and earnings from the envisaged KidCard order has
been compounded by the full effect of previously capitalised development
costs being amortised over a three-year period. In addition to this, certain
costs have been written-off in full during the year under review. A more
conservative view was also taken with respect to the capitalisation of
development costs.
For a while now we have been negotiating with Applied Systems Engineering
Ltd UK (ASE) our shareholding partner in Card Dynamics (CD) to acquire their
24%. Historically ASE has managed CD and its entire turnover has been
derived from their sales activities. In the past year, however, ASE and
Zaptronix have become competitors, and CD has in a sense become the "meat in
the sandwich". This has resulted in a loss of revenue in the year under
review. We are negotiating to acquire the rest of the shares in CD for a
nominal amount. CD will operate as a wholly-owned subsidiary of Zaptronix
and will employ its own staff in the UK.
Despite delays in tender processes, our new biometric-based smart card
payment system has stood up well to the rigors of field testing and has been
engineered into a portable, low cost unit. As a consequence of the KidCard
project we have devised new ways of transferring cash and/or reward points
across unsecured connections. Patent applications have been lodged for some
of these developments. Our rewards back-office platform, GEPS, has been
transformed into a fully-fledged web application, allowing us to run
multiple reward schemes around the world off a single server, with full
remote administration capability.
With the changes to the JSE Securities Exchange South Africa Listings
Requirements, the state of the equity market and the ongoing cost associated
with being listed, the Board has decided to pursue a delisting. We will
actively seek a suitable partner and a proposal will be put to shareholders
when such a partner has been found.
The Hitachi Board representative, Mr Tsukada, has been replaced by Mr
Fujiwara, the new head of the Hitachi IFG Group. John Gorrie remains the
alternate director to the Hitachi representative. This change is effective
immediately.
We would like to thank our shareholders and investors, staff, partners,
customers and suppliers for their ongoing support.
The Board
27 July 2001
Directors:
Nicholas Adams, Robert Appelbaum, Robin Brews, Christopher Curry*, Chiaki
Fujiwara**, John Heath, Jens Stratenwerth, Ian Thompson.
* British ** Japanese
GOLF CARD DYNAMICS GIS MARKETING ZAPTRONIX SYSTEMS ECLUB
