| Mon 29 Apr 2002, 0:00 | | Altech: Audited Consolidated Financial Results And |
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Allied Technologies Limited
(Incorporated in the Republic of South Africa)
(Registration number 1946/020415/06)
Audited consolidated financial results and dividend declaration
for the year ended 28 February 2002.
* Operating Income increased by 26%
* HEPS increased by 22%
* Dividend increased by 25%
* Balance sheet remains strong
Income statement Figures in R000
Year Year
Ended ended
28.02.02 28.02.01
Change
Revenue 3,604,706 3,690,851
Operating income 25.6% 357,293 284,431
Amortisation of goodwill (13,118) (12,354)
Dividend income 30,832 7,558
Net interest income 39,159 38,501
Exceptional items (Note 1) (60,430) (13,567)
Income before taxation 353,736 304,569
Taxation - normal and STC 111,481 81,771
STC on special dividend
paid by subsidiary 21,5% 276.4 -
Income after taxation 220,380 222,798
Attributable to outside
shareholders 21,871 (17,549)
Attributable earnings 18.0% 242,251 205,249
Basic earnings
per share (cents) 17.8% 230.8 195.8
Headline earnings
per share (cents) 21.5% 268.1 220.6
Adjusted headline earnings
per share (cents) 25.3% 276.4 220.6
Dividends per share (cents)
- Ordinary 100.0* 80.0
- Special - 20.0
* Proposed
Weighted average number
of ordinary shares in issue (000) 104,966 104,800
Notes:
1. Exceptional items
Net loss arising on disposal
and closure (60,430) (13,567)
2. Reconciliation between earnings and
headline earnings
Attributable earnings 242,251 205,249
Adjustments for:
Amortisation of goodwill 13,118 12,354
Exceptional items 26,056 13,567
Gross (note 1) 60,430 13,567
Tax effect (8,879) -
Outside shareholders (25,495) -
Headline earnings 281,425 231,170
STC on special dividend
paid by subsidiary 21,875 -
Outside shareholders (13,125) -
Adjusted headline earnings 290,175 231,170
3. The comparitives have been adjusted to take into account the adoption of
AC 107
(Events after the balance sheet date).
The accounting policies and methods of computation followed in this
report are consistent with South African Statements of Generally Accepted
Accounting Practice.
4. It is group policy for the annual dividend to be declared after the end
of the financial year.
5. Diluted earnings per share and diluted headline earnings per share are
not materially different from basic earnings per share and headline earnings
per share respectively.
Balance sheet Figures in R000
28.02.02 28.02.01
Assets
Non-current assets 428,517 470,673
Property, plant and equipment 118,684 136,420
Goodwill 40,400 54,654
Investments and loans 244,264 261,223
Deferred taxation 25,169 18,376
Current assets 1,321,878 1,298,752
Inventories 306,474 309,933
Accounts receivable 417,684 461,811
Cash and cash equivalents 597,720 527,008
Total assets 1,750,395 1,769,425
Equity and liabilities
Capital and reserves 915,341 777,962
Outside shareholders' interest 49,012 243,097
Deferred taxation 8,629 9,185
Current liabilities 777,413 739,181
Total equity and liabilities 1,750,395 1,769,425
Net asset value per share (cents) 872 741
Ordinary shares in issue
at end of period (000) 104,972 104,959
Statement of changes in equity
Figures in R000
Year Year
ended ended
28.02.02 28.02.01
Balance at beginning of year 669,439 567,332
Changes in accounting policy 108,523 73,385
Restated balance 777,962 640,717
Issue of shares 87 2,817
Attributable earnings 242,251 205,249
Dividends (104,959) (69,110)
Net gains and losses not recognised
in the income statement - (1,711)
Balance at end of year 915,341 777,962
Cash flow statement
Figures in R000
Year Year
ended ended
28.02.02 28.02.01
Operating activities 88,897 313,272
Cash generated by operations 343,867 316,660
Investment income 69,991 51,485
Changes in working capital 71,018 119,035
Taxation paid (118,806) (84,366)
Cash available from operating activities 366,070 402,814
Dividends paid, including to
outside shareholders (277,173) (89,542)
Investing activities (18,272) (318,585)
Financing activities 87 7
Net funds generated / (utilised) 70,712 (5,306)
Cash and cash equivalents
- at beginning of year 527,008 532,314
- at end of year 597,720 527,008
Operational contribution
Figures in R000
Revenue: Year ended Year ended
28.02.02 % 28.02.01 %
Telecommunication division 2,340,961 64.9% 2,322,384 62.9%
Multi-Media and
Electronics divisions 1,206,417 33.5% 1,502,523 40.7%
Information
technology division 225,607 6.3% 192,650 5.2%
Inter group sales (168,279) -4.7% (326,706) -8.9%
3,604,706 100.0% 3,690,851 100.0%
Operating income
Telecommunication division 163,057 45.6% 139,340 49.0%
Multi-Media and
Electronics divisions 163,604 45.8% 115,232 40.5%
Information
technology division 26,430 7.4% 20,317 7.1%
Corporate net income 4,202 1.2% 9,542 3.4%
357,293 100.0% 284,431 100.0%
Message to our shareholders
Altech's proven strategy of focusing on Telecommunications, Multi-Media
and Technology (TMT) convergence continues to strengthen the group's
significant standing as a TMT leader, and it is pleasing to report, for the
sixth consecutive year, an excellent set of results, notwithstanding tough
global and local market conditions.
Revenue remained at R3,6 billion while operating income increased by
25,6 percent to R357 million (R284 million.) Headline earnings per share
increased by 21,5 percent to 268,1cents per share. Excluding the effect of
secondary tax on an exceptional dividend declared by a subsidiary, adjusted
headline earnings per share would have increased by 25 percent to 276,4
cents per share.
The balance sheet is exceptionally strong with cash and cash equivalents
in excess of R597 million. A return on equity of 30.7 percent (29.7) was
realised.
The Altech Board has recommended a dividend of 100 cents per share (80
cents), an increase of 25%.
GROUP HIGHLIGHTS
Telecommunications Division
Wireless Communications
The Wireless Communications Division is focused on providing cellular
telephony services through Autopage Cellular and vehicle tracking and
recovery services through Netstar. Both businesses are leading players in
their respective fields and are important contributors to group profits.
Autopage Cellular
This company performed above expectations during the year under review
and increased its base to more than 460 000 subscribers - so entrenching its
position as the largest independent cellular service provider in South
Africa.
A significant achievement for the year was the development of virtual
sales through the electronic distribution of pre-paid vouchers to ABSA point-
of-sale devices situated in 25 000 retail outlets nationally. The
subsequent launch of voucher sales through 1 700 ABSA ATM's countrywide, has
also been a remarkable success. In line with its strategy of offering a
comprehensive range of cellular services to market, Autopage Cellular has
concluded an agreement to act as a service provider for Cell C in addition
to MTN and Vodacom.
Netstar
Netstar has shown real growth during the past year and has expanded its
subscriber base to some 160 000 vehicles. As a result of high organic
growth, Netstar has significantly increased its market share and is now the
market leader.
Over the past year Netstar recovered 2 835 stolen and hijacked vehicles
with an estimated market value of R354 million. A highlight of the year was
the licensing of the Netstar system to a Malaysian Group. This transaction
secured royalties as well as an annuity income flow for the company. Netstar
intends to actively build on this globalisation initiative.
Infrastructure and Solutions
Alcatel Altech Telecoms (AAT)
AAT's profitability was negatively affected by facility closure costs,
plus the accrual for future closure costs. In addition, AAT did not escape
the impact of the world-wide downturn in the telecoms market.
Altech recently announced that it was exercising its option to sell its
entire 40 percent share of the AAT business to Alcatel CIT of France. This
sale is in furtherance of Altech's policy of placing even greater emphasis
on its 100 percent owned home-grown technology product development, with the
additional advantage of ownership of Intellectual Property Rights. This, in
turn, allows increased globalisation through international exploitation of
those rights. Cash received from this sale will be added to our existing
cash resources and utilised in making acquisitions within the TMT sector,
particularly in the global context. These acquisitions must meet our
stringent requirements regarding risk and sustainable earnings growth.
Multi-Media and Electronics Division
UEC Technologies (UEC)
UEC, a world-leading supplier of digital set-top-box products and
software solutions for global satellite, cable and terrestrial pay-
television operators, has spearheaded Altech's strategic thrust into the
multi-media industry.
In the financial year under review UEC again showed excellent profit and
market share growth despite market conditions which were difficult and
increasingly competitive. UEC ascribes its outstanding performance to its
emphasis on innovational research and development plus its ability to
speedily adapt to new markets, market requirements and channels to market.
Although UEC continues to enjoy a dominant position in the local market,
its growth for the past year came mainly from international markets with
sales to the Middle East and North Africa alone exceeding total sales to
South African clients.
A highlight for UEC for the year included being the first and currently
the only company world-wide to successfully demonstrate a dual-decoder
personal video recorder solution. The company also conducted successful
trials on an interactive internet browser in its cable set-top-boxes in
China's Shanghai Cable Network. With several high profile media events on
the horizon, such as the world's most viewed television event, the FIFA
World Cup, upturn in demand for pay-television product is anticipated.
MediaVerge Solutions (MediaVerge)
MediaVerge, a start-up operation and a division of UEC, has already
turned profitable. Having established itself in the interactive TV market
through strong partnerships with OpenTV and Irdeto, MediaVerge developed a
number of innovative solutions and products for local and international TV
broadcasters, laying the foundation for future growth.
As from March 2002 MediaVerge became an independent company reporting
directly through Altech's Multi-Media Division and will focus on providing
gateway solutions, enabling global operators to derive new sources of
revenue from existing and new markets.
Alcom Systems (Alcom)
Alcom sold the first ever Digital Terrestrial Trunked Radio system on the
African continent in December 2001 to the City of Cape Town so providing it
with cutting-edge technology for its public safety services. Alcom also
benefited from pent-up after sales demand for terminals by the City
authorities. During the year under review Alcom also successfully installed
and commissioned a significant analogue trunked radio system within the
Zambian copper belt.
Alcom Radio Distributors (ARD)
ARD once again exceeded its previous year's sales and retained its
dominant market share in South Africa. Major efforts to increase ARD's
distribution area have proved successful and the company, for the second
year running, received the "Top Motorola Distributor" award for the Middle
East and Africa region.
Arrow Altech Distribution (AAD)
The past financial year saw a world-wide recession in the industrial
electronics market with revenues of multi-national suppliers down some 45
percent. However, AAD reversed this negative trend during this difficult
period and actually gained market share - a trend expected to continue into
the new financial year.
During the year AAD's Industrial Components Group signed a new
distribution agreement with Microsoft for Microsoft Embedded Systems. It is
expected that benefits from this agreement will materialise shortly. In the
coming year, AAD is expected to consolidate its position as the leading
value-added distributor of quality industrial electronic components,
computer and networking products for sub-Saharan Africa.
African Capacitors and STC Frequency Technology
These small businesses, both non-core to the TMT convergence focus, have
been disposed of in line with Altech's previously stated objective of
focusing on core TMT operations.
Information Technology Division
Isis Information Systems (Isis)
A leading South African systems integrator and software house, Isis
experienced a good financial year, especially during the second half of the
year. Isis was awarded several major new contracts during the review period
and is well positioned to gain acceptance for a number of new projects in
the coming months. Two major contracts in Tanzania have recently been
successfully concluded.
Keops Isis Industrial Information Systems (Keops Isis)
Specialising in the consultation, design, development and integration of
industrial information technologies, Keops Isis experienced tough trading
conditions during the year. Keops Isis has restructured its operations and
efforts to penetrate additional manufacturing sectors have already shown
positive results. During December the company secured contracts for the
Mozal expansion projects and significant benefits are expected therefrom
during the next few years.
Altech Card Solutions (ACS)
During the year the three card-based companies within the Altech group,
Altech Smart Card Technologies, Africard and Card Personalisation Solutions
were consolidated into Altech Card Solutions. The consolidation has been
successful and well received by the market. Additional major benefits from
it are expected during 2002.
ACS is maintaining its dominant role in the various local sectors in
which it operates while, at the same time, making inroads into export
markets. The future focus of ACS will be to complement the Altech group's
TMT convergence strategy, as well as increasing its value added solution
offerings to the markets it currently services.
Subsequent to the year end, the acquisition of Cardtronics, a magnetic
card based personalisation company, was concluded.
Exports
Altech's products, services and solutions are now exported to a record 37
countries worldwide with export revenue for the year under review totaling
more than R451 million. Exports will continue to form a vital and
significant segment of the group's overall globalisation initiative. For
the second year running, Altech received the State President's award for
export achievement.
Acquisitions
During the financial year under review considerable work was carried out
on acquisition search and investigation, particularly in Australasia and the
United Kingdom. Certain prospects reached an advanced stage of negotiation
but were ultimately turned down due to declining future profitability which
emerged during the due diligence process. We remain committed to securing
acquisitions within the TMT sector, particularly in the global context,
which meet our stringent requirements relating to risk and sustainable
earnings growth.
Outlook
The past year has seen Altech make further progress in strengthening the
group. Looking forward its increased focus on TMT convergence, substantial
and sound acquisitions, together with continuing globalisation, will remain
its core strategies to ensure the maintenance of long-term growth and
increased shareholder value.
Declaration of ordinary dividend number 59
The directors have declared a dividend of 100 cents per share (2001: 80
cents per share) for the year ended 28 February 2002.
Trading in the STRATE environment requires settlement within five
business days, and in accordance with STRATE's settlement procedures, the
following dates will apply to the dividend: -
Last day for trading to qualify for and participate
in the dividend (cum dividend) Friday 24 May 2002
Trading ex dividend commences Monday 27 May 2002
Record date Friday 31 May 2002
Dividend payment date
(electronic and certificated register) Monday 3 June 2002
Dividend cheques in payment of this dividend to certificated shareholders
will be posted to shareholders on or about Monday 3 June 2002. Electronic
payment to certificated shareholders will be undertaken simultaneously.
Shareholders who have dematerialised their share certificates will have
their bank accounts, which are linked to their safe custody accounts,
credited on Monday 3 June 2002.
In the case of certificated shareholders, notice of any change of address
of shareholders must reach the transfer secretaries, Computershare Investor
Services Limited, on or before Friday 31 May 2002.
Certificates may not be dematerialised or rematerialised from Monday 20th
May 2002 to Friday 31 May 2002, both days inclusive.
On behalf of the Board
DR HILTON DAVIES CRAIG VENTER JOHN CARSTENS
Non-Executive Chairman Chief Executive Officer Financial Director
