| Thu 6 Sep 2001, 0:00 | | Faritec - Audited Results For The Year Ended 30 Ju |
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FARITEC HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/004872/06)
Share code:FRT ISIN code: ZAE000016838
("Faritec" or "the company")
Audited results for the year ended 30 June 2001
Turnover up 35%
Attributable earnings up 46%
Cash on hand up 37%
Headline EPS up 5%
INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2001
Audited Audited
year ended year ended
30 June 2001 30 June 2000
R'000 R'000
Revenue 273 722 203 273
Operating profit 12 727 13 160
Abnormal items - (4 435)
Operating profit after abnormal items 12 727 8 725
Finance income 2 690 1 830
Profit before taxation 15 417 10 555
Taxation (2 915) (1 598)
Net income after taxation 12 502 8 957
Attributable to minorities 184 (134)
Attributable earnings 12 686 8 823
Abnormal item net of tax saving - 3 333
Write-off of goodwill 98 -
Headline earnings 12 784 12 156
Weighted average number of
ordinary shares in issue ('000) 141 758 142 000
Number of ordinary shares in
issue ('000) 136 543 142 000
Earnings per share (cents) 8,9 6,2
Headline earnings per share (cents) 9,0 8,6
Fully diluted earnings
per share (cents) 8,4 6,2
(Based on 151 636 000 shares in issue)
CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2001
Cash flow from operating activities 16 805 24 255
Cash flow from investing activities (1 745) (2 788)
Cash flow from financing activities (2 382) (6 047)
Net movement in cash and
cash equivalents 12 678 15 420
Cash and cash equivalents
at beginning of year 64 247 48 827
Cash and cash equivalents
at end of year 76 925 64 247
BALANCE SHEET AT 30 JUNE 2001
Assets
Non-current assets 13 112 12 966
Property and equipment 5 447 5 301
Share incentive trust 5 5
Investments 7 660 7 660
Current assets 151 728 96 617
Inventories 3 944 2 257
Trade and other receivables 70 859 30 113
Cash and cash equivalents 76 925 64 247
Total assets 164 840 109 583
Equity and liabilities
Capital reserves 79 442 68 975
Ordinary shareholders' interest 79 442 68 975
Minority interests 153 338
Non-current borrowings 649 -
Current liabilities 84 596 40 270
Trade and other payables 77 709 33 834
Taxation 1 499 236
Current borrowings 5 388 6 200
Total equity and liabilities 164 840 109 583
Total number of ordinary shares
in issue ('000) 136 543 142 000
Net asset value per share (cents) 58,2 48,6
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2001
Share capital 136 142
Balance at beginning of year 142 138
Issued during year 1 4
Shares repurchased during year (7) -
Share premium 37 381 39 594
Balance at beginning of year 39 594 8 118
Issued during the year or to
be issued 361 8 496
Share issue expenses written-off - (20)
Goodwill and trademarks
written-off - 23 000
Share buy back (2 574) -
Accumulated profit 41 924 29 239
Balance at beginning of year 29 239 20 416
Net income for year 12 686 8 823
Total capital and reserves 79 442 68 975
COMMENT
INTRODUCTION
The board is pleased to announce its results for the year ended 30 June
2001. Despite the difficult trading period for the IT industry and the
economy overall, Faritec managed to show growth in earnings and the
prospects for the future are positive.
RESULTS
Faritec achieved its sixth consecutive year of profitability, with revenue
increasing by 35% to R274 million. The results of Midrange Distribution
Systems ("MDS"), Faritec's joint venture with TCM into Central Africa, have
been included in Faritec's results for the first time. Of the increase in
revenue, MDS contributed R32 million, while the other Faritec operations
increased turnover by 19%
The increase in turnover did not translate into a commensurate growth in
operating margins, with these margins at 4,6%. Pressure on margins dampened
operating profits in 2001, while the margins of MDS are still not at the
desired level. The rebuilding referred to in the 2000 year-end results was
implemented and the group has made investments in other potential revenue
streams. Although the projects are promising, the directors believed it
prudent to write-off these development costs until the new projects become
fully operational. The first six months of the year yielded operating
margins of 3,6%, but these improved to 5,5% in the latter half of the year
under review.
Headline earnings per share increased by 5% to 9 cents per share.
The balance sheet has strengthened, with cash on hand having increased to
R37 million from R27 million as at 30 June 2000. Working capital levels have
increased, due partially to the inclusion of MDS for the first time, as well
as the inclusion of several sizable debtors who were granted extended credit
terms. Sales to these debtors were concluded early June, have resulted in an
increase in trade debtors and trade creditors at year-end.
During the first six months of the year 1 million shares were issued to
vendors of businesses acquired in previous financial years. In the latter
six months the group acquired 6,6 million of its own shares on the open
market. The intention is to cancel these shares.
OPERATIONS
The changes implemented over the last year resulted in the group meeting its
growth expectations. This can be attributed mainly to the efforts of our
management team and staff and the focus on our existing operations.
Faritec's infrastructure solutions business showed strong growth and
continues to be a leader in the mid-range server and storage markets. The
focus on large complex solutions has allowed us to differentiate ourselves
over our competitors and demonstrated our value add to our customers. The
outsourcing business continues to grow and the investment in outsourcing has
been rewarded with a number of large new contracts. The investment in our
people and infrastructure has resulted in our outsourcing business becoming
one of the leaders in its chosen market. Faritec's joint venture, MDS, also
showed strong growth and is becoming one of the leading value-added
distributors in Africa. The teams' efforts and our focus were rewarded with
improved operating margins, new customers and better offerings. The
investments in our existing businesses and the investigation of new
offerings have resulted in Faritec completing the year in a far stronger
position.
PROSPECTS
The outlook for the future is positive with the rebuilding and restructuring
process now complete. Faritec's strategy and focus for the future is to
provide managed business and technology infrastructures. Faritec expects
steady growth out of its existing infrastructure solutions and outsourcing
operations. Faritec has recently launched an e-commerce initiative, which
focuses on service provision and inter-company processes. This initiative is
based on an in-depth investigation into the various market opportunities in
the e-commerce environment and a new, highly skilled management team has
been selected to implement and deliver our new e-commerce offering to the
market. The new e-commerce business is not expected to make a profit in the
new year, but the return on our investment will start to be seen in the
following year.
Faritec still expects to show growth in earnings and operating margin
over the 2001 year despite the start-up costs of the e-commerce business.
The directors are expecting a solid performance in the year ahead and
believe that Faritec is well positioned to show steady growth in the future.
Faritec will continue to explore new offerings, markets and business
model opportunities, an absolute imperative in sustaining the group's
ongoing competitiveness and associated financial strength.
DIVIDENDS
No dividends have been declared with funds generated being retained in the
business to assist with the group's anticipated growth.
ACCOUNTING POLICIES
The same accounting policies and methods of computation have been used in
the preparation of these financial statements that were used in the annual
financial statements to 30 June 2000.
For and on behalf of the board
S M Tomlinson J Long
(Chief Executive Officer) (Financial Director)
Sandton
5 September 2001
Registered address:
Faritec House, 150 Kelvin Drive, Woodmead (PO Box 76784, Wendywood, 2144)
Transfer secretaries:
Mercantile Registrars Limited, 11th Floor, 11 Diagonal Street,
Johannesburg, 2001 (PO Box 1053, Johannesburg, 2000)
Directors:
S M Tomlinson (CEO), Dr D F da Silva*, B M Khoza*, J Long CA(SA), A R
Timm, P I Winn. *Non-executive
Website: www.faritec.co.za
