| Tue 29 Jan 2002, 0:00 | | Netactive - Interim Results For The Six Months End |
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NetActive Limited
Registration number 1998/006000/06)
Incorporated in the Republic of South Africa
("NetActive" or "the group")
Interim results for the six months ended 31 October 2001
Balance Sheet
31-Oct-01 31-Oct-00 30-Apr-01
Unaudited Unaudited Audited
R ' 000 R ' 000 R ' 000
Assets
Non Current Assets 7,109 6,438 4,951
Equipment 6,789 6,438 4,631
Intangible assets 320 - 320
Subsidiaries - - -
Current Assets 76,495 81,181 81,960
Inventories 744 386 46
Trade and other receivables 2,684 10,011 13,043
Cash and cash equivalents 73,068 70,784 68,871
Total assets 83,605 87,619 86,911
Equity and liabilities
Capital and reserves 74,007 81,624 77,044
Issued share capital 312 312 312
Share premium 45,832 45,832 45,832
Accumulated profits 27,863 35,480 30,900
Current Liabilities
Trade and other payables 9,597 5,995 9,867
Total equity and liabilities 83,605 87,619 86,911
Number of ordinary shares
in issue ('000) 146,530 146,530 146,530
Net asset value per
ordinary share (cents) 51 56 53
Income Statement
31-Oct-01 31-Oct-00 30-Apr-01
Unaudited Unaudited Audited
R'000 R'000 R'000
Continuing Operations
(Loss)/profit (3,579) 1,460 (1,855)
Revenue 13,696 12,151 29,012
Cost of sales (3,878) (3,116) (8,506)
Gross profit 9,817 9,035 20,506
Operating expenses (13,397) (7,575) (22,361)
Discontinuing Operations
(Loss)/profit (3,282) (2,430) (7,333)
Revenue 5,099 11,825 23,939
Cost of sales (3,760) (4,934) (12,470)
Gross profit 1,338 6,891 11,469
Operating expenses (4,620) (9,321) (18,362)
Operating (loss)/profit (3,282) (2,430) (6,893)
(Loss)/profit on discontinuance - - (440)
Sundry income 74 120 472
Continuing 74 - 352
Discontinuing - 120 120
Net interest received 3,750 4,048 7,333
Continuing 3,750 4,048 7,339
Discontinuing - - (6)
Minority interest - - -
(Loss)/profit for the year (3,037) 3,197 (1,383)
Earnings/(loss) per share (cents) (2.1) 2.2 (0.94)
Fully diluted earnings/(loss)
per share (cents) (1.9) 2.0 (0.88)
Headline earnings/(loss)
per share (cents) (1.8) 1.9 0.14
Cash Flow Statements
31-Oct-01 31-Oct-00 30-Apr-01
Unaudited Unaudited Audited
R'000 R'000 R'000
Cash generated/(utilised) by
continuing operations (1,502) (14 779) (2 605)
Cash received from customers 16,741 6 465 27 308
Cash paid to suppliers and
employees (18,243) (21 244) (29 913)
Cash generated/(utilised) by
discontinuing operations 5,402 (2 311) (19 875)
Cash received from customers 13,783 11 945 16 623
Cash paid to suppliers and
employees (8,381) (14 255) (36 498)
Cash generated/(utilised) by
operations 3,900 (17 090) (22 480)
Net interest received 3,750 4 048 7 333
Cash flows from operating
activities 7,650 (13 042) (15 147)
Cash flows from investing
activities (3,453) (3 848) (1 989)
Additions to equipment (3,453) (3 848) (4 365)
Proceeds from sale of business - - 2 376
Cash flows from financing
activities - - (1 667)
Short term financing included in
creditors - - (1 667)
Net (decrease)/increase in cash
and cash equivalents 4,197 (16 890) (18 803)
Cash and cash equivalents at
beginning of year 68,871 87 674 87 674
Cash and cash equivalents at
end of year 73,068 70 784 68 871
Statements of Changes in Equity
31-Oct-01 31-Oct-00 30-Apr-01
Unaudited Unaudited Audited
R ' 000 R ' 000 R ' 000
Changes in accumulated profits
Net (loss)/profit for the year (3,037) 3,197 (1,383)
Net increase/(decrease) in equity (3,037) 3,197 (1,383)
Equity at the beginning of the year 77,044 78,427 78,427
Equity at end of year 74,007 81,624 77,044
Note: Accounting Policies
The accounting policies and methods of computation used, which are in
conformity with GAAP, are consistent with those used in the 30 April 2001
audited annual financial statements.
COMMENTS
Nature of Business
NetActive focuses on providing innovative managed Internet services to the
mid-tier corporate market, including the provision of Connectivity Solutions
such as Virtual Private Network (VPN) services, Dedicated Leased-Line
connectivity, Shared Dial Access and Single Dial Access; and Hosting
services through Dedicated Hosting, Co-Location Hosting, Shared Hosting, and
Domain Name Registration.
Operational Review
In the past 6 months, NetActive completed the integration of the dial up
subscribers onto M-Web's network. Although this integration required more
resources than expected, its successful completion has enabled NetActive to
apply its focus to mid tier enterprises, its target market. The systems,
infrastructure and processes of the company have been refined and
strengthened in order to deliver on its value proposition to its target
market.
Growth rates have been lower than expected. Factors contributing to this
lower growth include a difficult market, heightened competition in this
market space and the additional focus required for the integration of the
dial up subscribers referred to above.
Financial review
A net loss amounting to R3,037m was incurred for the period, after
recognising Interest income of 3,750m. This includes a loss of R3,282m
incurred from discontinuing operations, which includes Virtual Internet
services (VISP) and NetFlorist. The discontinuing loss arising from VISP
amounting to R2,602 was largely due to the additional resources required to
complete the integration of the dial up subscribers sold to M-Web. Revenue
from continuing operations for the six months increased by 13% from R12,15m
to R13,7m. A loss of R3,579m was incurred in continuing operations, which
increased from the prior year. This was due to the contribution lost, as a
result of the discontinuance of VISP Services. These losses are expected to
increase over the next 6 months, until critical mass is achieved.
The balance sheet is sound, with no interest bearing debt. Cash Balances
increased from R68,8m to R73,068m. This increase arose largely due to the
collection of debtors outstanding at year end. Resolution of the amounts due
in terms of the agreement between M-Web and NetActive has not been achieved.
Discussions between the companies are taking place in order to resolve this
issue.
Prospects
The group's overriding objective is to achieve critical mass, which will
enable it to leverage economies of scale across its customer base. With the
completion of the integration of the dial up subscribers onto M-Web's
network, the resultant focus on providing Internet services to mid tier
enterprises is beginning to realise its potential. The benefits of the
investments made are expected to be realised over the medium term.
For and on behalf of the board
LAWRENCE BRICK
Chief Executive Officer
24 January 2002
TRANSFER SECRETARIES
Computershare Services (Pty) Ltd, 2nd Floor Edura House, 41 Fox Street,
Johannesburg 2001
REGISTERED OFFICE
Block C, Sandhavon Office Park, 18 Pongola Crescent, Sandton.
www.netactive.co.za; email: investorrelations@na.co.za
DIRECTORS
DIRECTORS: L BRICK (CEO), PH BACHER (CFO), JA HACKNER, L PASLOVSKY , JH
STASKUN, R INSKIP*, S LEGGATT*, H ROSTOWSKY*, I STURROCK*, R VAN RENSBURG*,
I DRY+, C LOWE++, *NON-EXECUTIVE + ALTERNATE TO R VAN RENSBURG, ++ALTERNATE
TO R INSKIP
COMPANY SECRETARY: K JAMBELA
