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Months Ended 31 December 2001
NET1 APPLIED TECHNOLOGY HOLDINGS LIMITED("APLITEC")
INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA
REGISTRATION NUMBER 1997/007207/06
WWW.APLITEC.CO.ZA
HIGHLIGHTS: HEADLINE EARNINGS PER SHARE, 21.55 CENTS
PROFIT BEFORE TAX, R72.7 MILLION
NET PROFIT, R48.4 MILLION
TANGIBLE NET ASSET VALUE PER SHARE, 146.23 CENTS
CASH EQUIVALENT EARNINGS PER SHARE, 28.27 CENTS
ABRIDGED INCOME STATEMENT UNAUDITED AUDITED
SIX MONTHS ENDED YEAR ENDED
31 DECEMBER 30 JUNE
2001 2000 % 2001
R000 R000 CHANGE R000
REVENUE 270 868 281 656 (3.8) 557 445
PROFIT FROM OPERATIONS 65 838 56 725 16.1 125 756
NET INTEREST RECEIVED 6 885 5 290 30.2 10 986
PROFIT BEFORE TAX 72 723 62 015 17.3 136 742
INCOME TAX EXPENSE 21 075 18 590 13.4 42 471
PROFIT AFTER TAX 51 648 43 425 18.9 94 271
MINORITY INTERESTS 3 249 1 501 116.5 1 084
NET PROFIT 48 399 41 924 15.4 93 187
EARNINGS PER SHARE (CENTS) 21.06 18.78 12.1 41.42
DILUTED EARNINGS PER SHARE (CENTS) 20.67 18.34 12.7 40.75
HEADLINE EARNINGS PER SHARE (CENTS) 21.55 19.12 12.7 42.23
DILUTED HEADLINE EARNINGS
PER SHARE (CENTS) 21.16 18.64 13.5 41.56
WEIGHTED AVERAGE NUMBER
OF SHARES (`000) 229 831 223 216 3.0 225 004
DILUTED NUMBER OF SHARES (`000) 234 106 228 535 2.4 228 661
RECONCILIATION OF HEADLINE EARNINGS
PROFIT ATTRIBUTABLE TO ORDINARY
SHAREHOLDERS 48 399 41 924 93 187
AMORTISATION OF GOODWILL 878 796 1 902
LOSS / (PROFIT) ON DISPOSAL OF
PROPERTY, PLANT AND EQUIPMENT 254 (39) (252)
LOSS ON DISPOSAL OF JOINT VENTURE - - 188
HEADLINE EARNINGS 49 531 42 681 95 025
ABRIDGED BALANCE SHEET UNAUDITED UNAUDITED AUDITED
31 DECEMBER 31 DECEMBER 30 JUNE
2001 2000 2001
R000 R000 R000
ASSETS:
NON-CURRENT ASSETS 71 511 67 951 74 289
PROPERTY, PLANT AND EQUIPMENT 42 446 34 040 39 751
CAPITALISED DEVELOPMENT COSTS 4 047 8 444 5 995
TRADE MARKS 1 901 2 581 2 174
GOODWILL 15 427 13 788 16 129
DEFERRED TAX 7 690 9 098 10 240
CURRENT ASSETS 344 059 258 545 317 966
INVENTORY 16 645 18 450 16 611
TRADE AND OTHER RECEIVABLES 122 257 109 845 100 474
CASH AND CASH EQUIVALENTS 205 157 130 250 200 881
TOTAL ASSETS 415 570 326 496 392 255
EQUITY AND LIABILITIES:
CAPITAL AND RESERVES 357 461 252 488 309 075
ISSUED SHARE CAPITAL AND PREMIUM 124 214 118 905 124 228
ACCUMULATED PROFIT 233 247 133 583 184 847
MINORITY INTERESTS 4 829 4 082 1 580
CURRENT LIABILITIES 53 280 69 926 81 600
TRADE AND OTHER PAYABLES 40 865 51 136 52 805
INTEREST-BEARING LIABILITIES - 1 966 -
TAX 12 415 16 824 28 795
TOTAL EQUITY AND LIABILITIES 415 570 326 496 392 255
SHARES IN ISSUE(000) 229 831 226 189 229 814
TANGIBLE NET ASSET VALUE
PER SHARE (CENTS) 146.23 100.66 123.92
NET ASSET VALUE PER SHARE (CENTS) 155.53 111.63 134.49
ABRIDGED CASH FLOW STATEMENT UNAUDITED AUDITED
SIX MONTHS ENDED YEAR ENDED
31 DECEMBER 30 JUNE
2001 2000 2001
R000 R000 R000
CASH FLOWS FROM OPERATING ACTIVITIES:
CASH RECEIPTS FROM CUSTOMERS 246 519 308 345 594 094
CASH PAID TO SUPPLIERS AND EMPLOYEES (200 600)(239 417) (429 869)
CASH GENERATED FROM OPERATIONS 45 919 68 928 164 225
NET INTEREST RECEIVED 6 885 5 290 10 986
TAX PAID (34 904) (25 773) (38 743)
CASH FLOWS FROM OPERATING ACTIVITIES 17 900 48 445 136 468
CASH FLOWS FROM INVESTING ACTIVITIES:
ADDITIONS TO PROPERTY, PLANT
AND EQUIPMENT (13 774) (6 564) (21 956)
PROCEEDS FROM DISPOSAL OF PROPERTY,
PLANT AND EQUIPMENT 163 41 282
CASH OUTFLOW FROM DISPOSAL
OF JOINT VENTURE - - (66)
ACQUISITION OF SUBSIDIARIES - (1 342) (5 962)
CASH UTILISED IN INVESTING
ACTIVITIES (13 611) (7 865) (27 702)
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM ISSUE OF SHARE CAPITAL (13) 35 522 40 845
REPAYMENT OF INTEREST-BEARING
BORROWINGS - (2 188) (4 154)
CASH (UTILISED IN) / GENERATED
FROM FINANCING ACTIVITIES (13) 33 334 36 691
NET INCREASE IN CASH AND
CASH EQUIVALENTS 4 276 73 914 145 457
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 200 881 55 424 55 424
CASH ON ACQUISITION OF SUBSIDIARY - 912 -
CASH AND CASH EQUIVALENTS
AT END OF PERIOD 205 157 130 250 200 881
CASH EQUIVALENT EARNINGS PER SHARE
(CENTS) 28.27 24.89 53.01
ABRIDGED STATEMENT OF CHANGES IN EQUITY UNAUDITED AUDITED
SIX MONTHS ENDED YEAR ENDED
31 DECEMBER 30 JUNE
2001 2000 2001
R000 R000 R000
ORDINARY SHAREHOLDERS' EQUITY AT
BEGINNING OF PERIOD 309 075 155 542 155 543
CHANGES IN SHARE CAPITAL: - 27 31
SHARES ISSUED
CHANGES IN SHARE PREMIUM: (13) 54 995 60 314
SHARES ISSUED - 54 995 60 495
SHARE ISSUE EXPENSES WRITTEN OFF (13) - (181)
CHANGES IN ACCUMULATED PROFIT:
NET PROFIT FOR THE PERIOD 48 399 41 924 93 187
ORDINARY SHAREHOLDERS' EQUITY AT
END OF PERIOD 357 461 252 488 309 075
SEGMENTAL ANALYSIS
THE ESTIMATED PROPORTIONS OF CONSOLIDATED REVENUE, PROFIT BEFORE TAX AND NON-
CURRENT ASSETS ATTRIBUTABLE TO THE VARIOUS CLASSES OF BUSINESS WERE AS
FOLLOWS:
REVENUE PROFIT BEFORE TAX NON-CURRENT ASSETS
6 MONTHS ENDED 6 MONTHS ENDED AS AT 31 DECEMBER
31 DECEMBER 31 DECEMBER
2001 2000 2001 2000 2001 2000
R000 R000 R000 R000 R000 R000
RECUR. 196 642 177 923 54 177 33 079 57 799 63 718
TRANS-
BASED
ACTIVITES
TECH 28 062 58 711 16 805 16 415 1 564 3 490
SALES
MAINT.
AND
OUTSOURCING
FINAN- 46 164 45 022 1 741 12 521 12 148 743
CIAL
SERVICES
270 868 281 656 72 723 62 015 71 511 67 951
NOTES ON THE ABRIDGED FINANCIAL STATEMENTS:
ACCOUNTING POLICIES
THE INTERIM FINANCIAL STATEMENTS HAVE BEEN PREPARED ON THE HISTORICAL COST
BASIS AND IN CONFORMITY WITH STATEMENTS OF GENERALLY ACCEPTED ACCOUNTING
PRACTICE. THE ACCOUNTING POLICIES APPLIED IN THE PREPARATION OF THE INTERIM
FINANCIAL STATEMENTS ARE CONSISTENT IN ALL MATERIAL ASPECTS WITH THOSE
APPLIED IN THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2001.
COMMENTARY
THE MANAGEMENT AND STAFF OF APLITEC CAN ONCE AGAIN BE PROUD OF THE GROUP'S
ACHIEVEMENTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2001.
FINANCIAL REVIEW
PROFIT FROM OPERATIONS INCREASED BY 16% FROM R56.7 MILLION TO R65.8 MILLION
DUE TO CONTINUING IMPROVEMENT IN EFFICIENCIES AND SIGNIFICANTLY IMPROVED
MARGINS ACHIEVED BY THE TECHNOLOGY SALES, MAINTENANCE AND OUTSOURCING
DIVISION. NET PROFIT INCREASED BY 15% FROM R41.9 MILLION TO R48.4 MILLION.
EARNINGS PER SHARE INCREASED BY 12% TO 21.06 CENTS AND HEADLINE EARNINGS PER
SHARE ROSE BY 13% TO 21.55 CENTS.
THE GROUP'S BALANCE SHEET IS SOUND WITH NO INTEREST-BEARING DEBT AND CASH
RESOURCES OF R205 MILLION. HEALTHY LIQUIDITY IS SUBSTANTIATED BY A CURRENT
RATIO OF 6.5 : 1 AND AN ACID TEST RATIO OF 6.2 : 1. THE INCREASE IN TRADE
AND OTHER RECEIVABLES OF R21.8 MILLION DURING THE LAST SIX MONTHS AROSE AS A
RESULT OF NEW LOANS AMOUNTING TO R25 MILLION ADVANCED IN THE AGE SECURE
INITIATIVE. LOANS RECEIVABLE IN THE GROUP'S TRADITIONAL MICRO-FINANCE
BUSINESS DECREASED TO R40 MILLION AND THE BOARD IS OF THE OPINION THAT
ADEQUATE PROVISION HAS BEEN MADE FOR DOUBTFUL DEBTS.
CASH GENERATED BY OPERATING ACTIVITIES AMOUNTED TO R17,9 MILLION AND CASH
EQUIVALENT EARNINGS PER SHARE INCREASED BY 14% TO 28.27 CENTS PER SHARE.
SEGMENTAL ANALYSES
MARGINS IN THE TECHNOLOGY SALES, MAINTENANCE AND OUTSOURCING DIVISION HAVE
INCREASED SIGNIFICANTLY. THIS WAS PRIMARILY DUE TO THE DIVISION'S ENHANCED
FOCUS ON ITS STRATEGIC OBJECTIVE OF PROVIDING TURNKEY SOLUTIONS TO GENERATE
RECURRING TRANSACTION REVENUES.
THE DECREASE OF R10,8 MILLION IN THE CONTRIBUTION OF THE FINANCIAL SERVICES
DIVISION TO THE GROUP'S NET PROFIT BEFORE TAX IS PRIMARILY DUE TO R6 MILLION
INCURRED AS START-UP COSTS DURING THE ESTABLISHMENT OF THE AGE SECURE
INITIATIVE, FURTHER DEVELOPMENT AND MARKETING COSTS OF R2 MILLION RELATING
TO THE MILLENNIUM PAYMENT SYSTEM, AS WELL AS A MANAGED REDUCTION IN THE
ACTIVITIES OF THE GROUP'S TRADITIONAL MICRO-LENDING BUSINESSES.
OPERATIONAL REVIEW
TECHNOLOGY SALES AND MAINTENANCE, OUTSOURCING AND DEVELOPING ECONOMIES
DIVISION
THIS DIVISION ACHIEVED A WORLD FIRST BY SUCCESSFULLY IMPLEMENTING A NATIONAL
UEPS SYSTEM IN MALAWI OVER THE LAST NINE MONTHS. INITIATED BY THE MALAWIAN
CENTRAL BANK, THIS SYSTEM HAS BEEN ACCEPTED BY SIX OF MALAWI'S LEADING
BANKS, I.E. COMMERCIAL BANK, FINANCE BANK, FINCOM, INDE BANK, NATIONAL
SAVINGS BANK AND NBS. MORE THAN ONE MILLION CUSTOMERS WILL BE OFFERED A
UEPS SMART CARD THROUGH WHICH THEY WILL GAIN ACCESS TO A MYRIAD OF FINANCIAL
SERVICES UTILISING THE MOST ADVANCED TRANSACTING FACILITIES. THE SYSTEM IS
NOW FULLY OPERATIONAL AND IS BEING SUPPORTED BY MANY LEADING MULTI-NATIONAL
COMPANIES.
THE SUCCESS IN MALAWI HAS LED TO THE SIGNING OF CONTRACTS IN ZIMBABWE,
MADAGASCAR AND MOZAMBIQUE, WHERE CONSORTIUMS HAVE BEEN FORMED TO FUND THE
DEPLOYMENT OF NATIONAL INFRASTRUCTURES. EACH COUNTRY'S CONSORTIUM INCLUDES
THE CENTRAL BANK, NATIONAL BANKS, LARGE INSURANCE GROUPS AND MEDICAL SCHEME
OPERATORS, NATIONAL EMPLOYERS AND LARGE RETAIL ORGANISATIONS. TENDER
SUBMISSIONS HAVE ALSO BEEN FILED FOR THE UEPS TECHNOLOGY IN UGANDA, SYRIA,
KENYA, TANZANIA, ZAMBIA AND A NUMBER OF COUNTRIES IN WEST AFRICA.
THESE INTERNATIONAL INITIATIVES HAVE ACCOUNTED FOR 35% OF THE REVENUE OF THE
DIVISION, AND HAVE YIELDED THE HIGHEST PROFIT MARGINS IN THE GROUP.
THE DIVISION WILL CONTINUE TO FOCUS ON THESE INITIATIVES AS IT IS WELL
POSITIONED TO DELIVER HIGHLY COMPETITIVE AND PROFITABLE PRODUCTS AND
SOLUTIONS THAT GENERATE FOREIGN CURRENCY REVENUE AT ATTRACTIVE MARGINS.
PENSION AND WELFARE DIVISION
OVER THE LAST SIX MONTHS, THE DIVISION HAS FOCUSED ON IMPROVING SERVICE
LEVELS AS DEFINED IN THE NATIONAL NORMS AND STANDARDS SPECIFICATIONS AND THE
BATHO PELE PRINCIPLES. THIS COMMITMENT HAS LED TO THE RE-STRUCTURE OF A
NUMBER OF THE PROVINCIAL DIVISIONS IN ORDER TO SUPPORT BOTH CENTRAL AND
LOCAL GOVERNMENTS' PERFORMANCE RELATED DELIVERY INITIATIVES.
THE MARGINS OF THE BUSINESS CONTINUE TO IMPROVE DUE TO TIGHTER FINANCIAL
CONTROLS, ENHANCED REPORTING SYSTEMS, IMPROVED MANAGEMENT AND AN INCREASE IN
TRANSACTION VOLUMES.
THE DIVISION HAS BEEN AWARDED A SUBSTANTIAL PORTION OF THE NEW EASTERN CAPE
SOCIAL WELFARE PAYMENT CONTRACT FOR AN INITIAL PERIOD OF THREE YEARS. THIS
PROJECT, WHICH WILL COMMENCE BETWEEN APRIL AND AUGUST 2002, WILL BOOST
REVENUE BY MORE THAN R100 MILLION PER ANNUM AND INCREASE THE GROUPS'
CUSTOMER BASE BY MORE THAN 350 000 CLIENTS.
MICRO-FINANCE DIVISION
THE DIVISION CONTINUES TO MARKET AND IMPLEMENT APLITEC'S MPS SYSTEM TO THE
MICRO-LENDING INDUSTRY AS A WHOLE. MORE THAN 1000 SYSTEMS HAVE BEEN
IMPLEMENTED TO DATE, AND THE ASSOCIATED TRANSACTION REVENUE STREAMS ARE
BEGINNING TO FLOW TO THE COMPANY.
THE AGE SECURE INITIATIVE IN KWAZULU NATAL WAS IMPLEMENTED SUCCESSFULLY IN
DECEMBER 2001 AND MORE THAN 50 000 NEW CLIENTS HAVE BEEN PROVIDED WITH
FINANCIAL SERVICES SUCH AS INSURANCE AND MEDIUM TERM LOANS. ALL NEW CLIENTS
MAKE USE OF THE MPS/UEPS PLATFORM THAT GUARANTEES PREMIUM COLLECTION AND
THUS ELIMINATES THE INHERENT RISKS TYPICALLY ASSOCIATED WITH THIS TYPE OF
BUSINESS.
DIVIDEND
NO DIVIDEND HAS BEEN DECLARED IN ACCORDANCE WITH THE GROUP'S POLICY OF
RETAINING EARNINGS TO FUND FUTURE GROWTH.
PROSPECTS
THE CONSISTENT PERFORMANCE OF THE GROUP'S EXISTING BUSINESSES, BOLSTERED BY
THE EASTERN CAPE SOCIAL WELFARE PAYMENT CONTRACT, THE ENHANCED PENETRATION
OF THE AFRICAN CONTINENT, THE SUCCESS OF THE AGE SECURE INITIATIVE AND THE
INCREASED ACCEPTANCE OF APLITEC'S TECHNOLOGY IN DEVELOPING ECONOMIES, AUGUR
WELL FOR THE FUTURE GROWTH OF THE GROUP.
ON BEHALF OF THE BOARD
SERGE BELAMANT HERMAN KOTZE
CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
15 FEBRUARY 2001
JOHANNESBURG
TRANSFER SECRETARIES SECRETARY AND REGISTERED OFFICE
ULTRA REGISTRARS (PTY) LTD LIGHT AND LIVINGSTONE FINANCIAL SERVICES CC
11 DIAGONAL STREET 3RD FLOOR, PALM GROVE
JOHANNESBURG 196 LOUIS BOTHA AVENUE
2001 HOUGHTON ESTATE, 2198
DIRECTORS : S C P BELAMANT**, H G KOTZE, D A J DONALD*, J C LIVINGSTONE*, B
J S HORE*, D G S MULLER*
*NON-EXECUTIVE **FRENCH
