| Thu 14 Feb 2002, 0:00 | | Prism - Unaudited Results |
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PRISM HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration code 1998/018949/06)
Share code: PIM ISN ZAE000022257
("Prism")
Unaudited results for the six months ended 31 December 2001
The board is pleased to announce that Prism has increased revenues by 24% on
the comparable period last year to R141m. Operating margins (before
depreciation and amortisation) have been preserved at a healthy 28%, and, in
line with our strategy of globalisation, we enjoyed a very material gain
from hard currency invoicing of 71% in the context of a depreciating Rand.
Prism has faced a number of challenges over the six months to 31st December
2001, experiencing a shortage of cash to fund the growth opportunities for
the company's proprietary payment technologies and solutions around the
world. Notwithstanding these difficulties, we have delivered fully diluted
headline earnings per share (eps) of 8.3c - down on the 11,5c we produced
over the first six months of our last financial year.
As a matter of prudence, Prism has decided to re-value its investment in
PayShop, based on a change in market sentiment, and given that the schedule
for sign-up of additional international licensees has taken longer than
expected. This has resulted in a write-down of R59.4m. Notwithstanding
this, PayShop has letters of intent to purchase the PayShop system from a
number of franchise prospects. Prism is still confident about the long term
prospects for PayShop and are, along with PayShop management, in advance
discussions with two separate international funding entities to inject
capital into the company.
The board has satisfied itself through formal investigation and close co-
operation with our blue-chip customer base that our significant investments
in debtors, particularly those outstanding from the close of our last
financial year, are recoverable. This investment clearly affects our cash
generating capability, and although we finished the period with R44m in
cash, up 61% on the same period last year, cash from operations remains less
than optimal until debtors are cleared. We have taken proactive and
aggressive steps to reduce expenses, including the shedding of non-core
activities (B2B and Tinderbox Interactive), the reduction of staff in other
areas, and the tightening of travel and other general and administrative
expenses. The benefit of these savings should show over the next six months.
The current rights offer underway has already secured R55m (before expenses)
from underwriters (including R10m from a management team confident of the
group's prospects), providing us access to adequate cash reserves for
growing over the next twelve months, albeit at a more measured pace than we
could achieve with a full R90m take-up.
Our strategy remains unchanged: a dedicated focus on secure electronic
payment solutions for major customers around the world. With recent
successes in licensing our technologies to major world players we are also
succeeding in moving away from working capital intensive production to a
software licensing model that leverages our low-cost development expertise
for high margin returns through the international reach of our partners.
The board remains confident of attaining our targets for the financial year
ending 30th June 2002, reducing our investment in debtors, generating
positive cash flows, and we look forward to significant market potential
opening up for our world class secure electronic payment offerings in our
coming financial year.
PRISM HOLDINGS LIMITED
Condensed Income Statement for the six
months ended 31 December 2001
Unaudited Unaudited Audited
6 months 6 months 12 months
R 000's 31-Dec-01 31-Dec-00 30-Jun-01
Revenue 141,035 114,194 314,639
Operating profit before 33,449 32,745 81,969
depreciation &
amortisation
Depreciation (4,513) (1,703) (6,257)
Amortisation of intangible (6,538) (1,186) (11,570)
assets
Impairment -Investments (59,404) - -
Impairment - Intangible (11,431) - -
assets
Operating (loss)/profit (48,437) 29,856 64,142
Net finance (6,626) 2,747 840
(expense)/income
Attributable profits of 3,879 - 2,176
associate
Loss on disposal of (6,133) - (7,297)
investments
(Loss)/profit before (57,317) 32,603 59,861
taxation
Taxation (2,248) (8,404) (4,164)
(Loss)/profit after (59,565) 24,199 55,697
taxation
Outside shareholders' (148) (71) (189)
interest
(Loss)/profit attributable (59,713) 24,128 55,508
to ordinary shareholders
Reconciliation of headline
earnings
(Loss)/profit attributable (59,713) 24,128 55,508
to ordinary shareholders
loss on disposal of 6,133 - 7,297
investments
loss on disposal of - - 22
property, plant and
equipment
Amortisation of goodwill 3,269 - 4,306
Impairment - Investments 59,404 - -
Impairment - Intangible 11,431 - -
assets
20,524 24,128 67,133
000's
Number of ordinary shares 212,942 212,942 212,942
in issue
Weighted average number of 212,942 208,390 205,190
ordinary shares in issue
Weighted potentially 246,243 210,477 222,502
dilutive shares
Earnings per Share (cents)
- basic (28.0) 11.6 27.1
- headline 9.6 11.6 32.7
Diluted Earnings per Share
(cents)
- basic (24.2) 11.5 24.9
- headline 8.3 11.5 30.2
PRISM HOLDINGS LIMITED
Condensed Balance Sheet as
at 31 December 2001
Unaudited Unaudited Audited
6 months 6 months 12 months
R 000's 31-Dec 01 31-Dec-00 30-Jun-01
ASSETS
Non-current assets 235,503 251,790 271,657
Property,plant & equipment 27,054 21,792 26,038
Intangible assets 103,279 113,757 117,267
Development costs-Eclipse 0
Interest in subsidiaries -0
Investments 80,504 83,675 104,558
Deferred taxation 7,706 - 6,444
Other non-current assets 16,960 32,566 17,350
Amount owing by affiliate
companies
Proceeds on disposal of
investment
Other loans
Share trust loan
Current assets 250,050 89,375 206,852
Inventories 36,061 14,602 23,683
Receivables 169,054 36,935 147,669
Proceeds on disposal of 750 10,382 750
investment
Deferred tax asset
Cash and cash equivalents 44,185 27,456 34,750
Total assets 485,553 341,165 478,509
EQUITY AND LIABILITIES
Capital and reserves 275,719 257,153 289,870
Share capital & share 187,871 187,904 187,871
premium
Share premium
Translation reserve (7,725) - 1,370
Subscription proceeds for 54,657 - -
shares to be issued
Retained earnings 40,916 69,249 100,629
RI Check -26,486
78,034
RI AT boy 100,630
Current year -22,596
Outside shareholders' 548 282 400
interest
Deferred purchase 26,794 41,383 22,504
consideration
Non-current liabilities 33,941 1,936 41,899
Interest bearing 33,941 - 41,899
borrowings
Deferred taxation - 1,936
Current liabilities 148,551 40,411 123,836
Trade and other payables 74,351 21,577 65,257
Short term borrowings 46,202 35,555
Current taxation 27,998 18,834 23,024
Total equity and 485,553 341,165 478,509
liabilities
PRISM HOLDINGS LIMITED
Condensed Cash Flow Statement for the six months ended
31 December 2001
Unaudited Unaudited Audited
6 months 6 months 12 months
R 000's 31-Dec-01 31-Dec-00 30-Jun-01
Cash flows from operating (849) 58,387 30,231
activities
Net cash generated by 6,897 55,678 29,571
operations
Net interest (6,626) 2,747 840
(paid)/received
Taxation paid (1,120) (38) (180)
Cash flows from investing (47,062) (198,159) (232,631)
activities
Cash flow from financing 57,346 137,955 207,877
activities
Net increase/(decrease) in
cash and
cash equivalents 9,435 (1,817) 5,477
Cash and cash equivalents
at beginning
of period 34,750 29,273 29,273
Cash and cash equivalents 44,185 27,456 34,750
at end of period
Condensed Statement of Changes
in Equity
Share Translation Subscription Retained
Capital &
Share Reserve Proceeds Earnings Total
Premium
R'000 R'000 R'000 R'000 R'000
Balance at 30 June 187,871 1,370 - 100,629 289,870
2001
Cash received in - - 54,657 - 54,657
advance of rights
offer
Share issue expenses - - - -
Currency translation - (9,095) - - (9,095)
differences
Loss for the year - - - (59,713) (59,713
Balance at 31 187,871 (7,725) 54,657 40,916 275,719
December 2001
Balance at 1 July 184 - - 45,121 45,305
2000
Shares issued 189,764 - - - 189,764
Share issue expenses (2,077) - - - (2,077)
Currency translation - 1,370 - - 1,370
differences
Profit for the year - - - 55,508 55,508
Balance at 30 June 187,871 1,370 - 100,629 289,870
2001
1. Accounting policies
These consolidated condensed interim financial statements are prepared in
accordance with AC 127 and schedule 4 of the South African Companies Act.
The accounting policies used in the preparation of the interim financial
statements are consistent with those used in the annual financial statements
for the year ended 30 June 2001.
Costs that occur unevenly during the financial year are anticipated or
deferred in the interim report only if it would also be appropriate to
anticipate or defer such costs at the end of the financial year.
Exchange differences arising from the translation of foreign entities are
taken directly to owners' interest.
Exchange differences arisng from the translation of foreign operations are
taken to profit for the period.
Income tax expense is recognised based on the best estimate of the weighted
average annual income tax rate expected for the full financial year.
These interim financial statements were not audited. The comparative figures
for the year ended
30 June 2001 have been audited.
2. Dividends
No dividends have been declared in accordance with the group's policy of
retaining earnings to fund future growth.
3. Segment Information
Business segments
Systems Integration,
Own intellectual Value-added Support and
Property Reseller Transaction Group
Switching
Six months
ended 31
December 2001
Revenue 87,870 10,341 42,824 141,035
Operating profit
before
impairments 14,454 780 7,164 22,398
Six months
ended 31
December 2000
Revenue 72,831 17,091 24,272 114,194
Operating profit 22,868 1,333 5,655 29,856
Year ended
30 June 2001
Revenue 204,936 46,055 63,648 314,639
Operating profit 47,770 3,262 13,110 64,142
On behalf of the board
Alvin Els: Group Chief Executive Officer Dion Smit: Group Financial
Director
13 February 2002, Johannesburg, South Africa
Registered Office: Building 1, Prism Business Park, Ruby Close, Fourways,
2068, Gauteng, South Africa.
Transfer Secretaries: Computershare Services Limited, PO Box 61051,
Marshalltown, 2107, Gauteng, South Africa.
Executive Directors: A W Els (CEO), W Grobler, M E Long (UK), G R McKay
(UK), B H P Mollagrean, M P Serrao, S H Sidley, D R Smit, M A Smith, D R
Todd (UK). Non-executive: RAR Bicker-Caarten, L Bruhns, RDS Came, ORJ da
Silva. Company Secretary: EC de Villiers.
