| Thu 30 Aug 2001, 0:00 | | Aqua's Results Continue To Defy Tough Markets |
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Aquaonline Holdings Limited
Registration number 1971/005628/06
www.aquaonline.com
Share code: AQU
ISIN code: ZAE 000024360
Making e-Business a Reality
CONSOLIDATED AUDITED results for the year ended 30 june 2001
Financial Highlights
Headline EPS growth of 97%
Revenue growth of 184%
69% Revenue and 86% NIBT in foreign currencies
69% Revenue annuity in nature
R19,3 million cash generated from operations
Income statement
Year ended Year ended
30 June 2001 30 June 2000
Notes R'000 R'000
Revenue 78 472 27 621
Earnings before interest, taxation
and depreciation 23 744 7 398
Depreciation (3 185) (1 572)
Interest received 2 166 581
Income before taxation and
exceptional items 22 725 6 407
Exceptional items 1 (1 409)
Income before taxation 21 316 6 407
Taxation 2 (882) (658)
Attributable earnings 20 434 5 749
Headline earnings adjustment in
respect of exceptional items 1 409 -
Headline earnings 21 843 5 749
Headline earnings per share (cents) 8,30 4,21
Earnings per share (cents) 7,76 4,21
Fully diluted headline EPS (cents) 8,26 4,21
Fully diluted EPS (cents) 7,73 4,21
Weighted shares in issue and to
be issued ('000) 263 181 136 691
Fully diluted shares in issue and to
be issued ('000) 269 112 136 691
Balance sheet
30 June 2001 30 June 2000
R'000 R'000
Assets
Non-current assets 14 813 4 457
Equipment 7 693 3 573
Goodwill 7 120
Investments 884
Current assets 46 569 33 500
Debtors and prepayments 16 566 8 724
Taxation 72
Cash resources 29 931 24 776
Total assets 61 382 37 957
Equity and liabilities
Equity
Ordinary shareholders' funds 48 528 25 509
Non-current liabilities
Deferred taxation 17 48
Current liabilities 12 837 12 400
Creditors 12 837 11 790
Taxation 610
Total equity and liabilities 61 382 37 957
Net asset value per share in (cents) 18,44 13,66
30 June 2001 30 June 2000
Notes to the financial statements R'000 R'000
1. Exceptional items
Investment written off 1 051
Amortisation of goodwill 358
1 409
2. Taxation
South African normal tax
- Current 885 6
Foreign (3) 652
- Current 28 604
- Deferred (31) 48
882 658
Condensed cash flow statement
Year ended Year ended
30 June 2001 30 June 2000
R'000 R'000
Cash flow from operating activities 19 920 12 012
Cash generated from operations 19 348 11 431
Interest received 2 166 581
21 514 12 012
Taxation paid (1 594)
Net cash flow from investing activities (14 787) (142 994)
Net cash flow from financing activities 22 152 768
Net movement in cash resources 5 155 21 786
Opening cash resources 24 776 2 990
Closing cash resources 29 931 24 776
Condensed statement of changes in equity
Year ended Year ended
30 June 2001 30 June 2000
R'000 R'000
Opening ordinary shareholders' funds 25 509 3 490
Shares issued and to be issued 22 152 768
Goodwill written off (136 825)
Translation difference 2 563 327
Attributable earnings 20 434 5 749
Closing balance 48 528 25 509
Comments
Introduction
The directors of Aqua Online Holdings Limited ("Aqua" or the "Group") are
pleased to present the consolidated audited results for the year ended 30
June 2001.
As a specialised provider of value-added e-services Aqua has weathered the
worldwide Internet fallout, which has affected predominantly product-based e-
businesses and Internet start-ups. As a result, the Group's financial
statements indicate exponential growth on the previous financial year.
Group Profile
Aqua offers Internet-focused solutions spanning e-strategy, web design and
software development through to a 24/7 multi-lingual contact centre, offline
payment and back-office processing and international web-hosting. The Group
provides a turnkey e-commerce solution focused on enabling dot.coms and
established corporates to migrate online, and currently services a number of
SA and UK corporate brands. Its dot.com exposure is limited to the online
leisure and gaming industry where client businesses have high volume
transaction flows and solid cash generation.
This industry has maintained its rapid growth despite the e-commerce slow
down and as a result, Aqua's niche expertise in this industry continues to
be profitable. In addition, the Group's participatory pricing model enables
Aqua to benefit from the ongoing success of these clients. Accordingly this
industry will remain a strategic focus going forward.
Financial Results
Results for the year ended 30 June 2001 reflect exponential increases in
revenue, operating profits and headline earnings per share ("HEPS") compared
with the previous financial year ended 30 June 2000 ("the previous financial
year").
Revenue of R78,5 million exceeded R27,6 million for the previous financial
year by 184%, while operating profit increased by 253% to R20,6 million from
R5,8 million. Attributable earnings of R20,4 million grew by 255% from R5,7
million.
69% of total Group revenue and 86% of income before tax was derived in
foreign currencies, predominantly US dollars and sterling. Earnings before
interest, tax, depreciation and amortisation (EBITDA) margins of 30% reflect
Aqua's specialised focus on the niche e-services industry and ongoing
dedication to maintaining operational efficiency.
HEPS of 8,30 cents exceeded 4,21 cents per share for the previous financial
year by 97%. The weighted average earnings per share is based on the fully
diluted number of shares taking into account shares to be issued in terms of
vendor obligations.
The Group's balance sheet continues to reflect Aqua's strong cash flow
generation. A cash position of R29,9 million at year end exceeds R24,8
million at 30 June 2000. Net cash flow of R5 million reflects cash utilised
in strategic acquisitions, cash settlement of vendor obligations and the
acquisition of assets to maintain and expand operations.
Taxation
Tax benefits have arisen through the utilisation of assessed losses brought
forward. These losses have been fully utilised in the year under review. In
addition certain of the profits of the Group are earned in low tax
jurisdictions. A combination of these factors has contributed to the current
tax rate.
Acquisitions
Interface Solutions CC ("Interface Solutions")
With effect from May 2001 Aqua acquired the business of Interface Solutions,
a leading software-usability consultancy, as a going concern. With web-
usability fast gaining recognition as a key success factor in effective
software applications, Interface provides a significant differentiator for
Aqua. In addition, the consultancy's blue-chip client base complements
Aqua's own and the Group has already started to unlock value through a
number of joint projects.
Integrity Limited ("Integrity")
With effect from May 2001 Aqua acquired the back-office operation of
Australian-based Integrity, previously a direct competitor to the Group. As
a result of the acquisition Aqua has derived additional earnings streams
with only a marginal upscaling of existing infrastructure.
Prospects
Management anticipates future organic growth, tempered by the Group's
exposure to a volatile industry and global economic pressures. In the short
term the enablement division will continue to grow its customer base,
targeting corporates with established bricks-and-mortar brands.
With the value of the global online gaming and leisure industry predicted to
exceed $160 billion by 2015*, it is expected that Aqua's expertise in this
niche industry and scalable infrastructure will continue to contribute
positively to earnings and growth.
Aqua's solid client-base, profitability and a healthy balance sheet will
enable the Group to consolidate organically and acquisitively, focusing on
medium to long term growth.
Strategic acquisitions can be financed off the strong balance sheet and
management will continue to operate within a framework of strict financial
discipline.
*Merrill Lynch - "e-Gambling in-depth Report 2001"
People
The Aqua team's continued focus and sheer hard work over the past year have
largely motivated the Group's success. Aqua remains committed to providing a
stimulating work environment and long term career path for its people, who
form its most valuable asset.
STRATE
Shareholders are advised that Aqua's shares have been dematerialised since 5
March 2001, with electronic trading and settlement having commenced by 2
April 2001. Shareholders are referred to the correspondence and summary of
information in this regard.
Acknowledgements
Aqua thanks its board of directors, management and team for their efforts
over the past year. The Group also thanks its stakeholders and customers for
their invaluable support.
Dividends
In line with Group policy, no dividend has been declared for the year under
review.
Cautionary Announcement
Shareholders' attention is directed to the cautionary announcement dated 17
August 2001. Shareholders will be advised in due course as to the outcome of
these discussions.
By order of the Board
30 August 2001
Directors: Dionne Ellerine* Tal HarpazX Jeffrey Liebesman* (Chairman)
Sean Rose Martin Sacks* Gideon Schachat Brent ShahimX (*Non-
executive) (XJoint CEO)
Registered office: Ground Floor Sanlam Arena c/o Bolton Road and Cradock
Avenue Rosebank POBox 742 Parklands 2121 South Africa Telephone
447-0877 Facsimile 447-0878 www.aquaonline.com
Transfer Secretaries: Mercantile Registrars Limited 11 Diagonal Street
Johannesburg 2001 P O Box 1053 Johannesburg 2000
Company Secretary: Corpgro Management Services (Proprietary) Limited 2
Arnold Road Rosebank P O Box 471917 Parklands 2121
