| Mon 1 Oct 2001, 0:00 | | Intervid Limited - Audited Financial Results For T |
|
ended June 30, 2001
Intervid Limited
Share Code: ITV
ISIN Code : ZAE000025615
Abridged Group Income Statement
Sixteen Twelve
Months Ended Months Ended
R 000 30.6.2001 29.2.2000
Turnover 100 459 72 370
Operating profit before interest
received, depreciation,
amortisation, interest paid and taxation 20 304 27 663
Interest received 6 693 526
Foreign exchange gains 15 443 62
Depreciation (2 399) (590)
Amortisation (776) -
Profit before interest paid and taxation 39 265 27 661
Interest paid (1 336) (221)
Profit before taxation 37 929 27 440
Taxation (6 524) (8 198)
Profit after taxation 31 405 19 242
Net profit attributable to minority
shareholders'
of subsidiaries (5 257) (32)
Net profit for the period 26 148 19 210
Weighted average number of ordinary shares in
issue (000) 87 976 82 417
Earnings per share - cents 29.7 23.3
Headline Earnings per share - cents 30.0 23.2
Diluted Earnings per share - cents 28.5 23.1
Abridged Group Balance Sheet
R 000 30.6.2001 29.2.2000
Non Current Assets 53 106 3 721
Property, plant & equipment 11 614 3 226
Loans 11 011 -
Long-term receivables 527 475
Goodwill 21 080 -
Intangibles 8 874 -
Deferred tax asset - 20
Current Assets 456 801 49 298
TOTAL ASSETS 509 907 53 019
Equity and Liabilities
Capital and Reserves 453 969 28 167
Share capital and premium 22 498 7 095
Non distributable reserve 330 330
Translation reserve (9 747) -
Equity portion of convertible loan 394 121 -
Accumulated profit 46 767 20 742
Minority shareholders' interest 888 72
Non Current Liabilities 17 398 309
Deferred tax liability 2 469 -
Long term interest bearing debt 1 943 309
Long term non-interest bearing debt 12 986 -
Current Liabilities 37 652 24 471
TOTAL EQUITY AND LIABILITIES 509 907 53 019
Number of ordinary shares in issue at end of
period (000) 91 219 87 500
Net Asset Value Per Ordinary Share - cents 498 32
Abridged Group Cash Flow Statement
Sixteen Twelve
Months Ended Months Ended
R 000 30.6.2001 29.2.2000
Net cash flows from operating activities (16 245) 9 947
Net cash flows from investing activities (46 257) (852)
Net cash flows from financing activities 428 188 4 931
Net movement in cash and cash equivalents
for the year 365 686 14 026
Effect of exchange rate movement 8 175 62
Cash and cash equivalents at beginning of year 14 649 561
Cash and cash equivalents at end of year 388 510 14 649
Abridged Statement Of Changes in Group Equity
Sixteen Twelve
Months Ended Months Ended
R 000 30.6.2001 29.2.2000
Share Capital and Premium 22 498 7 095
Balance at beginning of period 7 095 -
Issue of share capital - 9
Share premium on shares issued 15 588 8 529
Write-off of share issue expenses (185) (1 443)
Non-distributable Reserve 330 330
Balance at beginning of period 330 490
Transfer to accumulated profit - sale of division - (160)
Translation Reserve (9 747) -
Balance at beginning of period - -
Currency translation reserve (9 747) -
Equity portion of convertible loan 394 121 -
Balance at beginning of period - -
Equity portion of convertible loan 394 121 -
Accumulated Profit 46 767 20 742
Balance at beginning of period 20 742 1 564
Transfer from non-distributable reserve - 160
Dividends paid - (315)
Reversal of retained profit of subsidiaries (123) 123
Net profit for the period 26 148 19 210
Balance at end of period 453 969 28 167
Commentary
1.Change of Year End
Due to Intervid's international expansion, the company has changed its year
end to 30 June. Accordingly, the current reporting period is a 16 month
period.
2.Operating and Trading Review
Intervid's strategy is to become a leading global player in the digital
visual technology market, which encompasses visual security applications,
surveillance, access control, building management and machine vision for
process automation. A conscious decision was taken in this reporting period
to expand operations internationally, and management's focus has been on
funding, staffing and growing the international business. To this end,
capital of 34.5m was raised by way of a non-interest bearing non-refundable
convertible loan, and in this regard we refer you to the Circular to
Shareholders dated 10 April 2001. The strategy to grow the international
business included making an acquisition in each desired geographical
location, and thereafter to fund and grow the business organically by
introducing the Intervid business model. In line with this strategy,
acquisitions have been made in the USA, UK and Australia. In the Middle East
we opened our own operation. Management has been successful in appointing
several key personnel with proven entrepreneurial skills to head
international operations.
On a worldwide basis Intervid has embarked on a trader/partner initiative
that targets established system integrators as a channel through which to
sell its technology to their existing customer base. Earnings will be shared
with traders/partners. It is envisaged that this model will provide Intervid
with system installation and maintenance in all major centres in the world.
The Group has invested heavily in training to fast track knowledge transfer
to traders/partners.
A strategic technology company has been acquired in South Africa, with final
negotiations in progress for three further acquisitions. These acquisitions
will strengthen Intervid's product offering internationally. The Group has
invested heavily in technology in order to develop our branded technology
for the local and international markets.
The decision to move into international markets had an impact on the South
African operation. The need to have key employees focused on both local and
international markets, and the additional costs incurred in the
globalisation process, have impacted on the revenue and earnings in South
Africa. In the current operating period the effect of this is in excess of
that anticipated by management, but management is of the view that this is
an investment in the future of the Group. At the operating level, management
has focused on consolidating South African operations by focusing on market
segments where margins are highest. The commercial and industrial markets
were identified as markets in which Intervid targeted greater market share.
In focusing on higher margins, a strategic decision was taken to invest in
installing additional fibre during the initial phases of contracts with key
clients where the clients have indicated that further phases of systems
installations would be required in the short to medium term. Margins on
subsequent phases of installations are significantly improved, thereby
providing Intervid with a strategic advantage. Costs incurred in this regard
in the current period amount to R9.9m and have been carried forward in the
balance sheet under current assets.
The Group recorded an increase in turnover to R100.5m and an increase in
earnings to R26.1m. Interest income and foreign exchange gains from
international operations made a significant contribution to these earnings.
The net asset value of the Group increased to 498c per share and cash value
to 426c per share. Headline earnings per share amounted to 30c compared with
23.2c in the previous year.
3. Research and Development
Group research and development is integral to Intervid's international
expansion programme. Our strategy is to develop advanced technologies that
will give Intervid the leading edge in the international market place. R&D
efforts have been expanded on several major fronts:
- Advanced digital video recording and transmission technology was acquired
as a part of the purchase of a technology company. This technology forms the
basis to a new product range of digital surveillance systems.
- The integration of some of the artificial intelligence functionality from
Intervid's previous product range into the new range of products to form a
family of application specific products targeted at particular markets
including the banking, casinos, mining, transport and retail sectors. Such
advanced functionality includes recording of ATM transactions with video
images, perimeter motion detection and people tracking, number plate
recognition and post recording search.
- Completion of a world-leading central monitoring software suite that
provides for remote video surveillance combined with alarm management in a
control room environment. This facility is expected to generate new business
and increase sales volumes of Intervid video transmission systems.
- Commencement of a new business stream in the form of parking control
systems. Intervid will target the larger international projects where pay-on-
foot parking control is required. The system will be integrated with other
Intervid products to provide central management and control, automation
through number plate recognition and voice communications.
- Further development of our environmental monitoring facilities to include
water level and chemical content monitoring as well as gas monitoring. These
facilities supplement those of plume direction tracking and are being
integrated into a single system called EnviroWatch.
4. Outlook
The international expansion holds exciting opportunities for the Group. The
international structures are in place and are staffed with highly motivated
management. The Group expects positive contributions from the international
subsidiaries. Likewise the South African operation has been restructured
with its own management team that can focus solely on South Africa and
Africa. The Group expects the African operation to improve its contribution
in the forthcoming year. Much has been said about the worsening global
economic and security environment, and due to the current state of turmoil,
management are unable at this time to clearly assess the impact on trading
operations in the coming year. However, with the likely increased focus on
security and with significant cash on hand, management believe the Group is
well positioned to take advantage of any opportunities that may materialise.
5.Dividends
No dividend has been recommended or declared for the period ended June 30,
2001. Funds generated will be retained in the business to assist with the
group's anticipated growth both locally and internationally.
For and on behalf of the board:
GR Howard (CEO) RA le Sueur (MD)
Kloof
September 28, 2001
Registration Number : 1999/011483/06
Registered Office : 6 Charles Way, Kloof, 3610. P.O. Box 1218, Kloof, 3640
Transfer Secretaries : Mercantile Registrars Limited, 11 Diagonal Street,
Johannesburg, 2001. P.O. Box 1053, Johannesburg, 2000
Directors : W.F. Lambert (NE, Chairman), G.R. Howard (CEO), R.A. le Sueur
(MD), K.A. Pitout (CFO), G. Hough (Dr), J.R. Howard, C.R. le Sueur, G.J.
Bazley (NE, Alt.), J.P. Clucas (NE), J.J. Durand (NE), J.M. Hancock (NE,
Alt.), I.R. Jones (NE), R.R. Stainton (NE)
