| Tue 7 Aug 2001, 0:00 | | Dna - Audited Results For The Year Ended 30 June 2 |
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DNA SUPPLY CHAIN INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/004875/06) ("DNA")
Audited Results for the year ended 30 June 2001
We're providing solutions to problems our clients don't even know they're
going to have
In a fast-changing world that poses new challenges daily, the ability to
respond depends entirely on one's constitution. And the ability to perform
needs to be an integral part of one's genetic make-up. To this end, DNA
Supply Chain' strategy of investing in primary intellectual capital and
technology is beginning to pay off. As with any operation at the frontier
of its field, our best-of-breed components are being integrated in many ways
to produce advanced supply chain solutions for customers.
Revenue up 142.2%
Headline Earnings up 59.7%
Headline EPS up 24.4%
Performance Review
This is the first full reporting year for DNA. The significance of this
period has been confirmation of the opportunity that exists in supply chain
management as well as validation of the viability of our business model,
which is focused around the delivery of tailored, integrated supply chain
solutions.
The measurement of the achievements of DNA in the past year needs to be
viewed relative to the objectives we had established for ourselves:
World class supply chain management
The building of an organisation offering world class supply chain solutions
at a strategic, tactical and operational level has been assisted by the
strategic acquisitions made by DNA during the year. These have added
significant value to DNA's approach to supply chain management and have
substantially enhanced our value offering to clients.
Acquisition of Jumpoint
As the new generation of business efficiency embraces technology that
removes inefficiencies through an integrated planning process, higher levels
of technology and skills are required. Jumpoint delivers this. Its members
were responsible for the majority of large technology aided advanced
planning supply chain projects in South Africa in the past three years.
Jumpoint allows DNA, as an outsourcing partner to:
- strategically conceptualise clients' supply chains in the context of
market changes
- source and implement appropriate technologies
- systematically manage and add value to day-to-day operations
2. Acquisition of Streamworks
Streamworks, a leading South African technology company, provides solutions
in the manufacturing and distribution environments. Streamworks is involved
in factory automation and shop floor systems, addressing the interface
between ERP systems and automation environments. This substantially
strengthens DNA's ability to offer solutions in the manufacturing component
of the supply chain. In the area of distribution, Streamworks offers full
warehouse management and tracking systems and solutions. The Streamworks'
acquisition is effective from 1 August 2001.
Market Leadership
The combination of supply chain capability, together with best-of-breed
technology, has positioned DNA as a leading supply chain management company.
The scale of our operations, and our market penetration, have helped us to
improve our profile in the business and investment communities.
Strategic partnerships
At listing we identified the need to introduce strategic shareholders who
would help us build DNA.
Our success in attracting three offshore investors, together with our
relationship with Temasek, positions us with four important strategic
partners, who between them hold over 25% of DNA's equity. They add value
through access to resources, expertise, business opportunities and knowledge
of international markets.
Financial platform
The successful achievement of our financial objectives is contingent on
building an appropriate platform to fund working capital requirements and to
take advantage of expansion opportunities. In the past year our activities
have resulted in:
- Cash of R85.8 million generated from operations
- Cash of R40.3 million raised through an issue of shares
Client migration
Given DNA's footprint across multiple industries and our blue chip client
base, opportunities exist for organic growth through the mining of this
client base and the migration of clients up the value chain. A substantial
portion of DNA's growth this year has resulted from focus in this area.
Integration of supply chain solutions
DNA's value proposition is dependent on our ability to integrate the service
offerings of the businesses making up DNA. Our initiatives in developing
large scale client engagements have been enhanced by the integration of
various solutions across DNA, enabling us to present an increasingly
integrated solution.
Challenges
The key challenges we face going forward are:
Opportunity selection
The requirement to prudently balance growth against resource constraints
identifying optimal opportunities for annuity revenue growth and long term
profitability.
Structuring for growth
The need to further evolve flexible and scaleable structures and processes
which will support the development of client opportunities.
Resourcing
The ability to attract and develop an appropriate resource pool.
Prospects
We expect ongoing positive growth to come from our existing client base and
additional growth from new clients who recognise the value that DNA can
bring to their business. Consequently the year ahead is expected to yield
continued organic growth in revenue streams and earnings.
Dividend
Given the current growth phase of DNA and the supply chain industry, the
board has decided that cash reserves should be retained to fund future
expansion opportunities and organic growth, and consequently no dividend has
been declared for the current period.
SEE PRESS FOR DETAILS
Notes to the Consolidated Financial Statements
These Financial Statements have been prepared in accordance with Statements
of Generally Accepted Accounting Practice.
The accounting policies used in the preparation of the financial statements
are consistent with those used in the Annual Financial Statements for the
year ended 30 June 2000.
The accounting policy for goodwill has been changed in order to comply with
AC 131. With effect from 1 July 2000 goodwill is amortised on a straight
line basis over 3 to 7 years. Previously goodwill was written off against
share premium.
All South African bank accounts participate in the benefits of a cash
management set-off system, but are shown separately as gross bank balances
and overdrafts in order to comply with AC 125.
Depreciation and amortisation for the group amounts to R22.1 million (June
2000: R4.3 million).
The loss from the discontinued operations have arisen from the closure and
write-off of fixed assets of the Rail Brokerage division of Powerbulk (Pty)
Ltd.
The group has commitments for future capital expenditure of R19.7 million.
Revenue is calculated by deducting statutory and other disbursements, made
on behalf of clients, from turnover which represents gross billings.
Deferred expenditure is capitalised where, in the opinion of the directors,
the products and attributable costs are clearly defined and related to
specific revenue streams and further where the technical feasibility of the
product can be demonstrated. Capitalised costs are written off over the
period of the applicable revenue streams.
For and on behalf of the Board 6 August 2001
Mark Kaplan
Stephen Conradie (Joint Chief Executive Officers)
Directors
PH Jacobson* (Chairman), SA Conradie (Joint CEO), MJ Kaplan (Joint CEO), PM
Baker, Dr N Binedell*, L Brenner, AG Dandridge, J de Carvalho*, R
Krishnasamy* (Alternate J Yuh-Loh*), H Pieterman*, RC Pople, AB Rubenstein*,
M Smeiman, I Shongwe*. * non-executive
Registered office
The Woodlands, Building 16, 1ST Floor, Cnr Kelvin and Woodlands Drive,
Woodmead, 2199
Transfer secretaries
Computershare Services Limited
Edura House, 41 Fox Street, Johannesburg, 2001
PO Box 61051 Marshalltown 2107
Visit our website: www.dnasc.com
Consolidated balance sheet as at 30 June 2001
30 June 2001 30 June 2000
R'000's R'000's
ASSETS
Non - current assets 133,285 25,472
Fixed assets 23,076 20,452
Deferred expenditure 7,796 -
Goodwill 78,562 -
Deferred taxation 2,955 1,046
Investments and loans 20,896 3,974
Current assets 414,705 272,375
Inventories 26,783 19,673
Accounts receivable 293,942 225,369
Bank and cash 93,980 27,333
Total assets 547,990 297,847
EQUITY AND LIABILITIES
Capital and reserves 230,969 72,654
Share capital and premium 144,623 32,289
Non-distributable reserves 2,567 1,760
Retained income 81,739 37,075
Redeemable preference shares 4 6
Outside shareholders' interest 2,036 1,524
Non-current liabilities 2,477 1,835
Interest-bearing borrowings
Current liabilities 314,544 223,358
Accounts payable 238,095 165,363
Interest-bearing borrowings 10,144 6,958
Vendors for businesses acquired 3,920 35,580
Bank overdraft 51,853 6,074
Taxation 10,532 9,383
Total equity and liabilities 547,990 297,847
Net asset value per share ( cents ) 36.3 14.6
Tangible net asset value per share ( cents ) 23.9 14.6
Consolidated income statement for the year ended 30 June 2001
% Change Year ended Year ended
30 June 2001 30 June 2000
R'000's R'000's
Turnover 42.4 1,700,098 1,194,080
Revenue 142.2 586,087 242,013
Operating income before amortization
and depreciation 85,909 55,180
Depreciation 10,830 4,259
Amortization of goodwill 11,313 -
Net income before finance charges 63,766 50,921
Net finance charges 1,814 1,016
Income before taxation 61,952 49,905
- Continuing 64,063 49,905
- Discontinued operations (2,111) -
Taxation 13,227 11,503
Income after taxation 48,725 38,402
Outside Shareholders' interest 4,061 2,018
Attributable income 22.8 44,664 36,384
- Continuing 46,775 36,384
- Discontinued operations (2,111) -
Headline earnings reconciliation
Attributable income 44,664 36,384
Discontinued operations 2,111 -
Amortisation of goodwill 11,313 -
Headline earnings 59.7 58,088 36,384
Headline earnings per share (cents) 24.4 10.7 8.6
Earnings per share ( cents ) 8.2 8.6
Weighted average number of shares ( 000's ) 543,915 422,937
Number of shares as at 30 June 2001 ( 000's ) 630,020 487,378
Consolidated Cash Flow Statement for the 12 months ended 30 June 2001
Year ended Year ended
30 June 2001 30 June 2000
R'000's R'000's
Cash flows from operating activities 63,020 23,560
Cash flows from operations 85,766 55,180
Increase in working capital (3,446) (25,714)
Net finance costs (1,814) (1,016)
Taxation paid (13,987) (4,890)
Dividends paid to minority shareholders (3,499) -
Cash flows from investing activities (158,024) (355,143)
Additions to property, plant and equipment (13,149) (13,638)
Deferred expenditure (7,796) -
Acquisition of Jumpoint (35,030) -
Warranty consideration for Sherwood (47,601) -
Acquisition of Junkmail (6,008) -
Other investments, loans and vendors
for businesses acquired (48,440) (341,505)
Cash flows from financing activities 115,872 352,132
Increase in share capital 14 42
Increase in share premium 112,830 356,958
Share issue expenses (510) (4,738)
( Decrease ) increase in redeemable
preference shares (2) 6
Increase ( decrease ) in interest-bearing
Borrowings 3,540 (136)
Net increase in cash and cash equivalents 20,868 20,549
Cash and cash equivalents at beginning
of the year 21,259 710
Cash and cash equivalents at end of the year 42,127 21,259
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2001
Share capital Retained Non Total
& premium income -distributable equity
reserves
R'000's R'000's R'000's R'000's
Opening balance - 1 July 2000 32,295 37,075 1,760 71,130
Issue of new shares 112,842 - - 112,842
Share issue expenses (510) - - (510)
NDR - foreign currency translation
Reserve - - 807 807
Attributable income for the year
ended 30 June 2001 - 44,664 - 44,664
Closing balance - 30 June 2001 144,627 81,739 2,567 228,933
