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December 2001
Global Technology limited
enterprise business solutions globally
Incorporated in the Republic of South Africa
Registration number 1996/009809/06
Share code GLT ISIN code ZAE 000016820
GLOBAL TECHNOLOGY ACHIEVES SOLID RESULTS
* Revenue of R624,7 million HEPS of 19,9 cents
* Headline earnings of R78,7 million
COMMENTARY
Introduction
Global Technology is the leading provider of software solutions to the
banking, insurance and financial communities across Africa and Australia.
The Group has had an extremely strong 18 months, and is pleased to announce
solid results for the fourth consecutive year. During the period under
review, Global Technology achieved significant success in acquiring new
business, with a total of 325 new deals being recorded, 115 with existing
customers and 210 with new customers.
Results
During the period under review, the Group achieved strong headline earnings
of R78,7 million. For the 12 months ended 31 December 2001, operating profit
increased by 10% and turnover by 17% on the same period during 2000.
The Group has substantially increased its level of dollar-denominated
revenue, which comprises 88% of its earnings.
Significant events
The following significant events occurred during the period:
* Global Technology opened its West Africa office in the Ivory Coast
* Global Technology's international partner, TEMENOS, in which it owns a
strategic 15%, listed on the Swiss Stock Exchange
* The International Finance Corporation made an equity investment in Global
Technology's DBS, the developer of micro finance software, TEMENOS eMerge
* GLOBUS was named by the International Banking Systems Review as the
world's top selling wholesale back office banking system for the fourth
consecutive year
* IBM and TEMENOS announced a global e-business alliance to jointly market
TEMENOS' world-leading banking system, GLOBUS. The agreement opened up new
markets for Global Technology, most significantly making GLOBUS sales
possible to the larger financial institutions that use mainframe technology
* In September 2001, Global Technology sold its first Banking Enterprise
Resource Planning (ERP) solution to Botswana Building Society, the longest
standing GLOBUS user in southern Africa, and Global Technology's first
GLOBUS client
Streamlining of operations
In line with Global Technology's strategic objectives, the Group will refine
its operations under the executive chairmanship of Ray Leonard. The Group's
four operating subsidiaries are:
* Global Technology Africa
* Global Technology Australasia
* Global Technology Business Intelligence
* Global Technology Insurance
Each subsidiary is headed up by a Chief Executive Officer and the Group will
present segmental reports for each one, as well as for its international
investment in TEMENOS. Global Technology Africa and Global Technology
Australasia have been further sub-divided into GLOBUS Banking Products and
Services, and Global Technology Complementary Banking Solutions.
Rights issue
In order to reduce gearing Global Technology has obtained the major
shareholder's (Global Technology Investment Holdings) approval to convert an
approximate R15 million loan to capital. This will take the form of a rights
issue so that all shareholders are given the opportunity to follow their
rights. Details of the rights offer will be published within two weeks.
Prospects
Prospects for the fiscal year 2002 are extremely promising. The IDC predicts
that, by 2004, IT spending will climb and more will be spent on IT services
than hardware. This bodes well for Global Technology. In addition, Global
Technology has a strong sales pipeline going forward.
The Group will target new territories in Africa, particularly in East
Africa, where it intends to increase its presence in Kenya and Tanzania, as
well as expanding into the Democratic Republic of Congo.
Global Technology intends to continue identifying and building value within
the Group. In support of this, the Group will continue to source business
opportunities through its African and Australasian subsidiaries, and
considerable effort will be channelled into extending its penetration into
the Asia Pacific region.
Global Technology's ongoing excellent relationship with TEMENOS will ensure
a continuous flow of product sales and implementations of GLOBUS and GLOBUS-
related products, in the northern hemisphere.
By order of the Board
Ray Leonard
(Executive Chairman)
14 March 2002
Registered office
Arcay House II Number Three Anerley Road Parktown 2193 PO Box 62397
Marshalltown 2107
Transfer secretaries
Computershare Services Limited
2nd Floor Edura House
41 Fox Street Johannesburg 2001
Directors
R Leonard Executive Chairman
KDD de Villiers* JM Hughes** R Johnson G Koukis* *** G Leonard DC
McWilliam A Mhlongo*
PJ Moffett M Tshivhase*
*Non-executive **British ***Greek
Company secretary
Arcay Client Support (Pty) Ltd
Registration number 1998/025284/07
Consolidated Income Statement
12 months 12 months 18 months 12 months
ended ended ended ended
31 December 31 December 31 December 30 June
% 2001 2000 2001 2000
R000 change Pro forma Pro forma Unaudited Unaudited
Revenue 17% 437 152 374 957 624 716 222 247
Operating profit 53 895 43 461 76 892 21 713
Depreciation
- assets and
development
cost (13 201) (6 598) (20 201) (4 081)
Goodwill amortisation - - (13 206) -
Operating profit
before interest
and tax 10% 40 694 36 863 43 485 17 632
Net interest paid (5 476) 498 (4 978) (399)
Income from associates 16 359 9 910 13 471 -
Exceptional income
from associate 82 251
Net profit before
Taxation 51 577 47 271 134 229 17 233
Exceptional items
- Note 2 - - (11 369) 5 692
Taxation (10 565) (11 208) 20 470 (2 881)
Profit after taxation 41 012 36 063 143 330 20 044
Minority interest (1 494) (1 989) (16 338) (2 755)
Net profit before
Associates 39 518 34 074 126 992 17 289
Profit attributable
to ordinary shareholders 39 518 34 074 126 992 17 289
Dividend paid -
preference shares (689) -
Retained profit 126 303 17 289
Net operating profit - % 9,3 9,8 9,1 7,9
Number of shares in
issue (thousands) 410 737 373 508 410 737 248 441
Weighted average
number of shares
in issue (thousands) 404 980 360 934 395 130 246 638
Headline earnings
per ordinary
share (cents) 4% 9,8 9,4 19,9 4,7
Earnings per ordinary
share (cents) 9,8 9,4 32,1 7,0
Fully diluted earnings
per share - - 31,6 6,8
Dividends per ordinary
share (cents) - - - -
Reconciliation of
headline earnings per share
Earnings per share 9,8 9,4 32,1 7,0
adjusted for:
Exceptional items - Note 2 - - (17,9) (2,3)
Adjustment for goodwill
Amortisation - - 5,7 -
Headline earnings per share 9,8 9,4 19,9 4,7
SUMMARISED CONSOLIDATED BALANCE SHEET
Assets
Non-current assets
Equipment 11 561 11 053
Goodwill 57 611 7 583
Development cost capitalized 47 877 4 385
Deferred tax asset 47 135 7 696
Loans receivable 14 738 25 107
Investments in associates - Note 3 276 554 -
Investments - unlisted 9 108 17 097
Total current assets 188 618 133 595
Accounts receivable 122 556 57 638
Contract debtors 25 279 36 294
Deferred expenses 15 177 24 681
Taxation owed 2 336 -
Cash and cash equivalents 23 270 14 982
Total assets 653 202 206 516
Equity and liabilities
Capital and reserves
Ordinary shareholders' interest 425 798 56 340
Minority interest 28 606 1 925
Non-current liabilities
Deferred taxation 3 729 -
Interest bearing long-term liabilities 46 513 5 222
Current liabilities 148 556 143 029
Accounts payable 53 799 33 788
Contract payables 12 282 43 916
Deferred revenue 40 193 51 872
Taxation owing 14 393 7 027
Bank overdraft - interest bearing 27 889 6 426
Total liabilities 653 202 206 516
Net asset value per share 107,8 22,8
Net tangible asset value per
ordinary share (cents) 18,0
- TEMENOS at book value 81,1
- TEMENOS at market value 188,5
abridged CASH FLOW STATEMENT
Cash generated from operations
before working capital changes 82 647 26 696
Working capital changes (61 022) 33 555
Net finance cost (4 978) (399)
Taxation paid (10 796) (8 287)
Dividends paid (689)
Cash flow from operating activities 5 162 51 565
Cash flow from investing activities (45 875) (169 407)
Cash flow from financing activities 27 538 110 274
Net (decrease)/increase in cash and
cash equivalents (13 175) (7 568)
Cash and cash equivalents at
beginning of period 8 556 16 124
Cash and cash equivalents at
end of period (4 619) 8 556
STATEMENT OF CHANGES IN EQUITY
Share
capital and Distributable Retained
premium reserves profits Total
Balance at 30 June 2000 10 546 8 479 56 021 75 046
Change in accounting policies (10 934) (7 772) (18 706)
Balance at beginning of
period restated 10 546 (2 455) 48 249 56 340
Issue of shares 181 937 181 937
Profit for the period 126 303 126 303
Foreign currency
translation reserve 66 430 66 430
Write off of share issue
Expenses (5 212) (5 212)
Balance at end of year 187 271 63 975 174 552 425 798
Notes
1 Changes in accounting
policies - effect on current profit
Adjusted for new revenue recognition policy 2 130 (10 141)
Development cost capitalized (42 863) 4 386
Development cost amortised 7 357 -
Leave pay provision 1 062
Adjustment to operating profit (32 314) (5 755)
2 Exceptional items
Net (loss)/surplus on the sale
of investments and loans (11 369) 11 954
Write off of trademarks and
restructuring cost - (6 262)
(11 369) 5 692
3 Investments in associates
Cost plus share of post-acquisition profits 276 554 3 963
Loans to associates - 12 580
276 554 16 543
4 Income from associates
Trading income net of goodwill amortised 13 471 -
Exceptional income from associate 82 251
Profit on IPO of TEMENOS AG 91 120 -
Non-recurring expenses (8 869) -
95 722 -
5 Operating lease commitments
Due within 1 year 16 904 789
2 to 5 years 58 018 670
74 923 459
6 Other
There were no contingent liabilities or material capital commitments
existing at the end of the period
Date: 13/03/2002 04:44:00 PM Produced by the JSE SENS Department
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