| Fri 15 Mar 2002, 0:00 | | Crux Technologies - Results For The Six Months End |
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(Amendment)
Crux Technologies Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/012784/06)
(JSE Share code CRX ISIN ZAE000015855)
("Crux" or "the company")
RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2001
INCOME STATEMENT (R'000)
Six months Six months
ended Year ended ended
30 Nov 31 May 30 Nov
2000 2001 2001
Revenue 54 411 97 525 52 411
Continuing operations 50 132 93 246 52 411
Discontinued operations 4 279 4 279 -
Operating income 5 857 10 606 1 814
Continuing operations 5 604 10 610 1 814
Discontinued operations 253 (4) -
Net financing (expense)/income (56) 41 (401)
Net profit before abnormal items 5 801 10 647 1 413
Abnormal items (note 2) 8 246 147 (20 226)
Net profit/(loss) before tax 14 047 10 794 (18 813)
Taxation 4 453 3 544 640
Net profit/(loss) after tax 9 594 7 250 (19 453)
Weighted average shares in issue 187 487 184 362 177 024
Earnings/(loss) per share 5,1 3,9 (11,0)
Headline earnings/(loss) per share 2,2 4,0 (11,0)
BALANCE SHEET (R'000)
30 Nov 31 May 30 Nov
2000 2001 2001
Assets
Non-current assets
Property, plant and equipment 2 318 2 473 2 911
Intangible assets 2 310 6 999 1 028
Investments 6 693 1 1
Deferred taxation 13 271 11 003 10 363
Total non-current
assets 24 592 20 476 14 303
Current assets 31 258 31 406 27 781
Total assets 55 850 51 882 42 084
Equity and liabilities
Capital and reserves
Share capital 1 812 1 812 1 749
Non-distributable reserves 11 197 10 450 9 810
Distributable reserves 29 405 25 333 5 592
Total shareholders' equity 42 414 37 595 17 151
Non-current liabilities
Interest bearing borrowings 166 41 643
Current liabilities 13 270 14 246 24 290
Total equity and
liabilities 55 850 51 882 42 084
Number of shares in issue
at end of period ('000) 181 237 181 237 174 917
Net asset value per
share (cents) 23 21 10
Net tangible asset value
per share (cents) 22 17 9
STATEMENT OF CHANGES IN EQUITY
(R'000) Total
Non- Distri- share-
Share distributable butable holders'
Capital reserves reserves equity
Balance as at
31 May 2001 1 812 10 450 25 333 37 595
Treasury shares
acquired (63) - (928) (991)
Deferred tax asset
released - (640) 640 -
Net loss for the
six months ended
30 November 2001 - - (19,453) (19,453)
Balance as at
30 November 2001 1 749 9 810 5 592 17 151
NOTES:
1. 6 320 150 Crux shares were purchased by a subsidiary which
has reduced the number of shares in issue to 174 916 633.
2. Abnormal charges to the income statement for the six months to November
2001:
- Write-off of Sandile Telecommunications & Technologies
(Proprietary) Limited debt 4 655
- Legal fees provided for action to recover debts outstanding 450
- Write-off of intangible assets 5 315
- Loss incurred on Professional Services division 6 008
- Trade debtors written off 3 798
20 226
CASH FLOW STATEMENT (R'000)
Six months Six months
ended Year ended ended
30 Nov 31 May 30 Nov
2000 2001 2001
Operating activities (8 792) 538 (3 563)
Investing activities (2 789) (8 704) (1 937)
Cash received/
(disposal of) on
disposal of business 6 830 4 021 -
Financing activities 1 504 189 602
Net decrease in cash
and cash equivalents (3 247) (3 956) (4 898)
Cash and cash
equivalents at
beginning of period 1 757 1 757 (2 199)
Cash and cash
equivalents at end
of period (1 490) (2 199) (7 097)
Overview
The financial year thus far has been an extremely difficult one for the
company. A number of events have occurred that have caused significant
problems and these, together with difficult trading conditions, have forced
management to reconsider its strategic direction. A profit warning was
published on 18 December 2001.
The Skills Resourcing division continued to trade profitably and remains the
company's core business.
The Professional Services division, which focused on Macola software
installations, was severely affected by the resignation of its entire key
management team and most of its staff. They set up business in direct
competition and legal action to stop them was unsuccessful. The consequent
losses to the company amounted to R6 million and the business is in the
process of being discontinued.
The Munsoft division was sold to Sandile Telecommunications & Technologies
(Proprietary) Limited in 2000. An amount of R4,6 million on this transaction
remains unpaid and has now been written-off, with the division reverting to
Crux. It is trading unprofitably and management are seeking a buyer for it.
No progress has been made in the healthcare market and management have
decided not to pursue it any further. Accordingly, development expenditure
of R5,3 million has been written off.
A large provincial government customer has breached its contract with Crux
for the provision of IT solutions and services. This contract has a
termination date of 31 August 2002 and at 30 November 2001 an amount of R7
million is reflected as owing under current assets. Management has taken
legal action and is confident that this amount will be recovered. Provision
for legal costs has been made. Certain other significant debts have proved
extremely difficult to collect and have been written-off.
Restructuring
Crux announced a restructuring of its board on 19 January 2002. G Foster
resigned as a director and was replaced as chief executive by S Kekana. B
Kent resigned as a non-executive director. K McCrindle has been appointed to
the Board as financial director. Z M Zafiropoulos and W Cloete, who
collectively have 30 years of experience in the industry, have been
appointed executive directors. Two major shareholders, Brait Merchant Bank
and Mercantile Bank, have been given the option to nominate non-executive
directors for appointment to the Board.
In the light of the factors set out above, Crux has embarked upon a process
of rationalisation. This process will be completed in the second half of the
year and will leave the company clearly focused on its profitable core
business - Skills Resourcing.
Accounting policies
These condensed interim financial statements are prepared in accordance
with Statement of Generally Accepted Accounting Practice AC127 on Interim
Financial Reporting. The principal accounting policies, as set out in the
2001 annual report, have been consistently applied throughout the period
under review.
Prospects and further cautionary announcement
The restructuring process is expected to be completed by 31 March 2002.
Crux is therefore expected to return to profitability and generate positive
cash flow for the last two months of the financial year. The situation
should improve further in the next financial year as certain fixed costs
come to an end.
Shareholders were advised on 12 February 2002 that Crux is involved in
discussions which may have an effect on the price at which the company's
shares trade. These discussions continue. Accordingly, shareholders are
advised to continue exercising caution when dealing in Crux shares.
15 March 2002
For and on behalf of the board
S Kekana M Diliza
Chief Executive Officer Chairman
Non-executive directors
M G Diliza (Chairman), B Neale, M F Kekana
Executive directors
S Kekana (CEO), Z Zafiropoulos, W Cloete,
K McCrindle
Registered office
Crux House, Thandanani Office Park,
Invicta Road, Midrand 1685
(PO Box 3169, Midrand 1685)
