| Mon 18 Feb 2002, 0:00 | | Faritec Holdings Limited - Interim Results For The |
|
December 2001
Faritec Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/004872/06)
("Faritec" or "the group")
(Share code: FRT)
(ISIN number: ZAE 0000 16838)
Interim results for the six months ended 31 December 2001
Faritec highlights
Revenue up 29%
Profit from operations up 130%
Operating margin up 78%
Attributable earnings up 82%
Headline earnings per share up 94%
Abridged income statement
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 June
2001 2000 % 2001
R'000 R'000 change R'000
Revenue 152 242 118 084 29 273 722
Operating expenses
before depreciation 141 515 112 901 259 298
Depreciation 930 926 1 599
Profit from operations 9 797 4 257 130 12 825
Finance income 1 021 883 2 690
Goodwill amortised (362) - (98)
Profit before taxation 10 456 5 140 103 15 417
Taxation (2 361) (605) (2 915)
Net profit for the
period 8 095 4 535 79 12 502
Attributable to
minorities 153 (11) 184
Attributable earnings
for the period 8 248 4 524 82 12 686
Goodwill amortised 362 - 98
Headline earnings for
the period 8 610 4 524 12 784
Weighted average number
of ordinary shares in
issue ('000) 137 897 143 183 141 758
Number of ordinary
shares in issue
('000) 137 084 143 183 136 543
Basic earnings per
share (cents) 6,0 3,2 88 8,9
Headline earnings per
share (cents) 6,2 3,2 94 9,0
Fully diluted earnings
per share (cents) 5,6* 3,2 8,4#
*Based on 148 538 000 shares in issue
#Based on 151 636 000 shares in issue
Abridged balance sheet
Unaudited Unaudited Audited
31 Dec 31 Dec 30 June
2001 2000 2001
R'000 R'000 R'000
Assets
Non-current assets 14 732 12 848 13 112
Property and equipment 4 196 5 183 5 447
Share incentive trust 1 104 5 5
Development costs capitalised 1 772 - -
Investments 7 660 7 660 7 660
Current assets 155 708 108 922 151 728
Inventories 4 089 2 304 3 944
Trade and other receivables 70 454 37 434 70 859
Taxation - 119 -
Cash and cash equivalents 81 165 69 065 76 925
Total assets 170 440 121 770 164 840
Equity and liabilities
Capital and reserves 87 283 73 500 79 442
Ordinary shareholders' interest 87 283 73 500 79 442
Minority interests 1 349 153
Non-current borrowings 649 649 649
Current liabilities 82 507 47 272 84 596
Trade and other payables 75 314 41 913 77 709
Taxation 1 813 - 1 499
Current borrowings 5 380 5 359 5 388
Total equity and liabilities 170 440 121 770 164 840
Total number of ordinary
shares in issue ('000) 137 084 143 183 136 543
Net asset value per share
(cents) 63,7 51,3 58,1
Statement of changes in equity
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 June
2001 2000 2001
R'000 R'000 R'000
Share capital 144 143 136
Balance at beginning of period 136 142 142
Issued during the period 11 1 1
Shares repurchased (3) - (7)
Share premium 36 966 39 594 37 381
Balance at beginning of period 37 381 39 594 39 594
Issued during the period or to
be issued 1 088 - 361
Shares repurchased (1 503) - (2 574)
Retained income 50 173 33 763 41 925
Balance at beginning of period 41 925 29 239 29 239
Net income for the period 8 248 4 524 12 686
Total capital and reserves 87 283 73 500 79 442
Abridged cash flow statement
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 June
2001 2000 2001
R'000 R'000 R'000
Cash flow from operating
activities 5 998 4 654 16 805
Cash flow from investing
activities (1 342) (485) (1 745)
Cash flow from financing
activities (416) 649 (2 382)
Net movement in cash and cash
equivalents 4 240 4 818 12 678
Cash and cash equivalents at
beginning of period 76 925 64 247 64 247
Cash and cash equivalents at end
of period 81 165 69 065 76 925
Comments
Introduction
Faritec is pleased to report strong growth in all major areas of our
business for the six months ended 31 December 2001. These excellent results
have been achieved against the background of difficult trading conditions in
the IT Industry. Strong organic growth in our core business augmented by the
integration of key new initiatives and joint ventures contributed materially
to our earnings growth.
Results
Although revenue increased by 29%, operating profit increased by 130%.
Operating expenses, salaries and depreciation increased, but this was offset
by better margin control. This is reflected in an improvement in operating
margins from 3,6% to 6,4%. Attributable earnings increased by 82%, basic
earning per share increased by 88% and headline earnings per share adjusted
for goodwill amortisation increased by 94%.
Cash on hand increased to R41 million over the last six months, despite
utilising R1,5 million to repurchase 3,1 million shares (due to be
cancelled) and R1,8 million invested in ICP (Pty) Limited. A fixed property,
considered to be non-core, was disposed of resulting in a cash inflow of R2
million.
ICP (Pty) Limited is an e-commerce initiative that has been in progress
since 2000. Development expenditure to date of R1,8 million has been
capitalised, with the intention of amortising such costs when revenue is
generated. Current indications are that this will occur in the new financial
year.
Trade receivables have increased to R70 million, due to the finalisation of
several sizeable infrastructure solution contracts at year-end which were
only settled in January 2002. This has been financed primarily by trade
payables.
Accounting policies
The same accounting policies and methods of computation that were used in
the annual financial statements of 30 June 2001 have been used in the
preparation of this report and are compliant with South African Statements
of Generally Accepted Accounting Practice.
Operations
All of the group's existing operations performed above expectations and once
again this can be attributed to the efforts of our management team and
staff.
The infrastructure solutions business is one of the driving forces behind
the group's performance. The solid partnership with IBM and the focus on
midrange server and storage solutions resulted in considerable success in
the period under review.
Our outsourcing business has successfully implemented and integrated the new
large contracts we concluded in our last financial year. Extensive new
business won during the period under review, in addition to the existing
annuity revenue stream, has ensured continued strong growth. The growth in
our contracting base also contributed to the operation's performance.
The new e-commerce initiative, Faritec ICP, is progressing according to the
business plan and the costs are below budget.
Faritec's joint venture, MDS, the value add distributor in Africa, continues
to perform above expectations.
Prospects
Faritec is well positioned to take advantage of the growth opportunities in
the market. The performance over the next six months is under pinned by
strong prospects and solid recurring revenues. We expect steady growth out
of our existing operation and our various new initiatives are on track to
add to the group's revenue streams 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 to
assist with the group's anticipated growth.
For and on behalf of the board
SM Tomlinson J Long
Chief executive officer Financial director
Johannesburg
18 February 2002
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
SM Tomlinson (Chief executive officer), Dr DF da Silva*, BM Khoza*, J Long,
AR Timm, PJ Winn
*Non-executive
Company secretary
DA Nieuwoudt CA(SA)
www.faritec.com
