| Tue 14 May 2002, 0:00 | | Maxtec Limited - Interim Results For The Six Month |
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MAXTEC LIMITED - INTERIM RESULTS FOR THE SIX MONTHS ENDED 28 FEBRUARY 2002
Maxtec Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/004039/06)
Share Code: MEC ISIN: ZAE000016721
("Maxtec" or "the company")
GROUP INCOME STATEMENT
Six months Six months Year ended
ended ended 31 August
28 February 2002 28 February 2001 2001
(unaudited) (unaudited) (audited)
R`000 R`000 R`000
Revenue 47,139 69,169 117,823
Loss from
operations (2,899) (2,285) (8,799)
Net interest (paid) (989 ) (533) (1,202)
Profit from associate
company 550 389 828
Amortisation of
goodwill in associate
company (91) (100) (181)
Loss on write down
of loan to Share
Incentive Trust (153) - (3,699)
Loss before tax (3,582) (2,529) (13,053)
Taxation 1,197 759 2,785
Loss after tax for
the period (2,385) (1,770) (10,268)
Depreciation
(R`000) 1,048 444 1,319
Net interest paid (989) (533) (1,202)
Interest received 13 38 51
Interest paid (1,002) (571) (1,253)
Earnings per ordinary
share (cents) (2.7) (2.1) (11.6)
Headline earnings
Per ordinary share
(cents)* (2.5) (2.1) (7.2)
Fully diluted
headline earnings
per ordinary share
(cents)* (2.5) (2.0) (7.2)
Weighted number of
Shares in issue
(millions) 88.2 86.1 88.2
Number of shares in
issue (millions) 88.2 88.2 88.2
* The difference between the Earnings per ordinary share and the Headline
earnings is due to the Loss on the write down of the loan to the Share
Incentive Trust.
GROUP BALANCE SHEET
Six months Six months Year ended
ended ended 31 August
28 February 2002 28 February 2001 2001
(unaudited) (unaudited) (audited)
R`000 R`000 R`000
ASSETS
Non-current assets 12,533 15,448 12,904
Plant and equipment 4,466 5,304 5,201
Investment in
associate company 4,692 5,171 5,371
Deferred taxation 3,067 813 1,870
Loan to share
incentive trust 308 4,160 462
Current assets 32,744 46,850 30,927
Inventories 16,786 25,293 18,032
Trade and other
receivables 15,958 16,227 12,895
Cash resources - 5,330 -
TOTAL ASSETS 45,277 62,298 43,831
EQUITY AND LIABILITIES
Capital and
reserves 20,453 31,336 22,838
Issued capital 9 9 9
Share premium 18,446 18,446 18,446
Accumulated profit 1,998 12,881 4,383
Non current
liabilities 137 1,087 203
Interest-bearing
borrowings 137 117 203
Deferred tax - 970 -
Current liabilities 24,687 29,875 20,790
Trade and other
payables 17,118 22,957 12,915
Provisions 473 637
Current portion of
interest-bearing
borrowings 121 32 121
Loans payable - - -
Taxation 1,666 2,931 2,394
Bank overdraft 5,309 3,955 4,723
TOTAL EQUITY AND
LIABILITIES 45,277 62,298 43,831
GROUP CASH FLOW STATEMENT
Six months Six months Year ended
ended ended 31 August
28 February 2002 28 February 2001 2001
(unaudited) (unaudited) (audited)
R`000 R`000 R`000
Cash flows from
operating activities(205) 108 (5,382)
Cash receipts from
customers 44,078 66,394 118,379
Cash paid to
suppliers and
employees (42,567) (64,342) (120,610)
Cash generated from
operations 1,511 2,052 (2,231)
Interest received 13 38 51
Interest paid (1,002) (571) (1,253)
Tax paid (727) (1,411) (1,949)
Cash flows from
investing activities(313) (1,103) (1,885)
Additions to fixed
Assets (324) (1,138) (2,371)
Proceeds on the sale
of assets 11 35 487
Increase in investment
In associate
company - - (1)
Cash flow from
financing
activities (68 ) 45 219
(Decrease) in loans
payable - (85 ) -
Decrease in loan
to the share
incentive trust - 130 130
Decrease in interest
bearing liabilities (68 ) - 89
Net decrease in
cash resources (586 ) (950) (7,048)
Cash resources at
beginning of period (4,723) 2,325 2,325
Cash resources
at the end
of the period (5,309) 1,375 (4,723)
GROUP STATEMENT OF CHANGES IN EQUITY
Six months Six months Year ended
ended ended 31 August
28 February 2002 28 February 2001 2001
(unaudited) (unaudited) (audited)
R`000 R`000 R`000
Share capital 9 9 9
Balance at the
Beginning of the
period 9 9 9
New shares issued
during the period
- 2,043,900 of 0.01c
each in the year
ended 31 August
2001 0 0 0
Share premium 18,446 18,446 18,446
Balance at the
beginning
of the period 18,446 11,918 11,918
Premium on new
shares issued
during the period - 6,528 6,528
Distributable
reserves 1,998 12,881 4,383
Accumulated profits
Balance at the
Beginning of the
period 4,383 14,651 14,651
Net loss for the
Period (2,385) (1,770) (10,268)
Balance at the end
of the period 20,453 31,336 22,838
GROUP OVERVIEW
NATURE OF BUSINESS
Maxtec Limited is a purveyor of data storage solutions and services covering
all areas from the personal computer to the mainframe. This will be
accomplished in future through well-qualified resellers.
FINANCIAL RESULTS
The directors of Maxtec Limited, classified under the Information Technology
sector of the JSE Securities Exchange South Africa Lists, hereby announce
the interim results for the six months ended 28 February 2002.
Revenue decreased from R69,169 million for the period ending 28 February
2001 to R47,139 million during the current six-month period. If one were,
however, to compare the six-month period March to August 2001 revenue levels
achieved decreased marginally from R48,654 million to R47,139 million. Due
to poor demand and further restructuring, Maxtec recorded a net loss of
R2,385 million equating to a headline loss of 2,5 cents per share.
The share incentive trust has been written down by a further R153 000 to the
average ruling market price at 28 February 2002 of 10 cents per share.
To ensure profitability the Group has disposed (post-balance sheet) of its
local authority division, Maxtec Global Support Services (Pty) Ltd (MGSS)
and are in the process of disposing of its interest in Sagitta Performance
Systems Ltd. This selling off of non-core operations will free working
capital and eradicate borrowings.
Management is narrowing the activity of the group to consulting,
outsourcing, implementation and distribution of data storage products.
With the consolidation in the local authorities market, MGSS was subject to
an ever-diminishing market. The R1,35 million realised has a minimal effect
on Maxtec`s current net asset value, since goodwill relating to the initial
acquisition has been written off in full against the share premium in
previous years.
Other non-local authority business entities that were housed within MGSS
have been incorporated into Maxtec Peripherals. These include the consulting
division that originally formed part of the local authority entity when
acquired.
In an effort to expand its reseller base, Maxtec has elected to divest from
direct sales to the end-user, transferring the business activities of
Enterprise Storage Solutions (Pty) Ltd (ESS) to current management. ESS will
become an independent storage reseller.
Selling its 20% holding in Sagitta Performance Systems back to the company
for GBP 500,000, Maxtec, calculated using the closing price on 10th May,
will realise R7,590,000, enabling the company to recapitalise its local
operations.
Net cash outflows have been limited to R586,000 over the reporting period.
The same accounting policies have been used in the computation of the
interim figures as was used in the previous financial year.
These results have been prepared in compliance with South African Generally
Accepted Accounting Practices.
PROSPECTS
Disposal of non-core business and assets should result in the company being
ungeared by the end of the financial year. This will obviously reduce
interest charges. Management aims to effect further improvements in
inventory levels and cash flow management. In improving operating margins
and profitability, management is concentrating on consolidating all business
activities under Maxtec Peripherals, retracing its steps to data storage
distribution and management.
In order to broaden its reseller base Maxtec will be entering into a
strategic alliance to market IBM`s xSeries range of products with Tri-
Continental (Pty) Ltd in the Durban and Cape Town areas. Tri-Continental is
IBM`s largest central African distributor.
The positive effects of all the foregoing will only be fully realized in the
next financial year.
DIVIDENDS
No dividends have been declared.
On behalf of the board
LGB Talbot WPP Hutton
(Executive Chairman) (Executive Director)
14 May 2002
By order of the board
AC Wilson CA (SA)
(Group Financial Director)
Registered Address Transfer Secretaries
1 - 8th Avenue Computershare Services Ltd
Rivonia 4th Floor, Edura House
Sandton 41 Fox Street
PO Box 69938 Johannesburg, 2001
Bryanston, 2021 PO Box 62931
Marshalltown, 2107
These results are also available on our web site - www.maxtec.co.za
Remember e-business is not possible without s-business
Maxtec Limited - Press Release
MAXTEC REPOSITIONS ITSELF FOR THE FUTURE
JOHANNESBURG - JSE-listed data storage specialist, Maxtec Limited, today
announced interim results for the six months ended 28 February 2002. A
difficult trading climate took its toll on revenue, with revenue decreasing
on a comparable basis from R69,169 million to R47,139 million. However, when
comparing the review period with the six-month period March to August 2001,
revenue decreased only marginally from R48,654 million to R47,139 million.
Poor demand and further restructuring costs culminated in a net loss of
R2,385 million, equating to a headline loss of 2,5 cents per share.
The share incentive trust has been written down by a further R153 000 to the
average ruling market price at 28 February 2002 of 10 cents per share.
To ensure future profitability, management is currently narrowing the
activities of the group to consulting, outsourcing, implementation and the
distribution of storage products; selling off non-core operations in an
effort to free working capital and raise funding to eradicate borrowings.
Post-balance sheet, the company disposed of its local authority division
Maxtec Global Support Services (Pty) Ltd (MGSS), and is in the process of
disposing of its interest in Sagitta Performance Systems Ltd.
According to Maxtec Ltd`s executive chairman, George Talbott, the local
authority businesses MGSS, previously known as Nyl-Data Computer Services
(Pty) Ltd; Unitech Computer Services (Pty) Ltd; and African Financial
Solutions (Pty) Ltd, were acquired initially to broaden Maxtec`s services
and skills base. "Although Nyl-Data and Unitech met their profit warrantees,
and faired well for at least a year after the merger, the businesses were
subject to a shrinking market with the demarcation of local authorities and
resultant consolidation."
The R1,35 million raised from the sale of MGSS has a minimal effect on
Maxtec`s current net asset value, since goodwill relating to the initial
acquisition has been written off in full against share premium in previous
years.
Pursuant to the above disposal within MGSS, Maxtec has opted to restructure
all remaining non-local authority business activities into Maxtec
Peripherals, including the consulting division that originally formed part
of the local authority entity when acquired.
Maxtec is also in the process of selling its 20% equity interest back to the
management of UK-based storage specialist Sagitta Performance Systems Ltd,
raising about GBP 500 000 pounds or approximately R7,5 million. "The capital
gained out of this disposal will enable us to recapitalise our local
operations", states Craston Wilson, group financial director of Maxtec Ltd.
In an effort to build its reseller base, Maxtec has elected to divest from
direct sales to the end-user, transferring the business activities of
Enterprise Storage Solutions (ESS) to current management. ESS will become an
independent storage reseller.
Maxtec will be entering into a strategic alliance with Tri Continental (Pty)
Ltd to market IBM`s xSeries range of products in the Durban and Cape Town
areas. Tri Continental is IBM`s largest central African distributor and will
enable Maxtec to broaden its reseller base.
"Through our technical skills and ability to build affordable solutions,
Maxtec still caters for the end user - by adding value to what the reseller
is offering. We will still have the ability to influence the end user in
terms of what equipment would serve them best. The actual sale however will
be managed by the reseller," explains Talbot.
Net cash outflows have been limited to R586 000 over the reporting period.
The disposal of the non-core business and assets should result in the
company being ungeared by the end of the financial year. This will obviously
reduce interest charges.
"We aim to effect further improvements in inventory levels and cash flow
management. In improving operating margins and profitability, we are
concentrating on consolidating all business activities under Maxtec
Peripherals, retracing our steps to data storage distribution and
management", Talbot concludes.
The restructured and streamlined group will concentrate on core business
only. This will allow the company to leverage the significant investment it
has made in intellectual capital over the last three years. The positive
effects of all the foregoing will only be fully realised in the next
financial year.
No dividends have been declared for this reporting period.
For more information, please contact:
Mr George Talbot
Executive Chairman
MAXTEC LTD
Tel: (011) 803-6635
Fax: (011) 803-4668
Email: george@maxtec-group.com
Editor`s note:
Classified under the Information Technology sector of the JSE Securities
Exchange, Maxtec Ltd (`MEC`) provides complete high-end mass storage
solutions. The company is a purveyor of data storage solutions and services
covering all areas from the personal computer to the mainframe market.
Date: 15/05/2002 12:25:00 PM Produced by the SENS Department
