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Vesta Technology Holdings - Interim Results for the six months ended 28
February 2002
Vesta Technology Holdings Limited
(Registration number: 1998/015580/06)
(Share code: VST)
(ISIN code: ZAE000016267)
Interim Results for the six months ended 28 February 2002
Condensed income statement
Unaudited Unaudited Unaudited Audited
1st 2nd Six Six Year
quarter quarter months months ending
ending ending ending ending
31/11/01 28/2/02 28/2/02 28/2/01 31/8/01
R`000 R`000 R`000 R`000 R`000
Revenue 3 936 4 619 8 555 21 042 31 522
Cost of sales (1 190) (1 376) (2 566) (4 398) (5 600)
Gross profit 2 746 3 243 5 989 16 644 25 922
Other operating 185 185 227 249
income
Other operating (4 361) (4 178) (8 539) (12 736) (25 852)
expenses
Results from (1 615) (750) (2 365) 4 135 319
operating
activities
Loans written off (3 537)
Loss from (9 645)
discontinued
operations
Loss from (4 185)
cancellation of
contracts
Net financing (119) (117) (236) (34) (116)
expense
Profit/(loss) (1 734) (867) (2 601) 4 101 (17 164)
before taxation
Income tax 351 243 594 361
Net profit/(loss) (1 383) (624) (2 007) 4 101 (16 803)
for the period
Reconciliation of
headline earnings
Earnings (1 383) (624) (2 007) 4 101 (16 803)
Goodwill effects 249 249 498 677 1 747
Loss from 9 645
discontinued
operations
Loans written off 3 537
Loss from 4 185
cancellation of
contracts
Fund Mator (2 652)
operating
profits
consolidated
Headline (1 134) (375) (1 509) 4 778 (341)
earnings/(loss)
Earnings/(loss) per (1,6) (0,7) (2,4) 4,8 (19,9)
share (cents)
Headline earnings/ (1,3) (0,4) (1,8) 5,6 (0,4)
(loss) per
share (cents)
Weighted average 84 600 84 600 84 600 84 817 84 600
number of shares
(million)
Condensed statement of changes of equity
Share Share Retained Non- Total
capital premium profits distri- R`000
R`000 R`000 R`000 butable
reserve
R`000
Balance at 1 85 19 381 17 664 77 37 207
September 2000
Foreign exchange 259 259
translation reserve
Net profit for the 4 101 4 101
year
Balance at 28 85 19 381 21 765 336 41 567
February 2001
Balance at 1 85 18 958 749 529 20 321
September 2001
Foreign exchange 718 718
translation reserve
Net profit/(loss) (2 007) (2 007)
for the period
Balance at 28 85 18 958 (1 258) 1 247 19 032
February 2002
Condensed balance sheet
Unaudited Audited
28/2/02 28/2/01 31/8/01
R`000 R`000 R`000
Assets
Non-current assets 20 153 27 499 20 208
Tangible assets 6 200 5 981 6 351
Non-tangible assets 12 461 20 816 12 959
Deferred tax 1 429 835
Other financial assets 63 702 63
Current assets 6 776 24 365 8 279
Inventories 206 9 810 110
Trade and other receivables 6 248 11 926 7 502
Cash and cash equivalents 131 2 096 433
Taxation 180 234
Other financial assets 11 533
Total assets 26 929 51 864 28 487
Equity and liabilities
Capital and reserves 19 032 41 567 20 321
Equity capital 19 043 19 466 19 043
Non-distributable reserves 1 247 336 529
Accumulated profits/(loss) (1 258) 21 765 749
Non-current liabilities 309 304 374
Interest bearing borrowings 114 299 158
Other financial liabilities 195 216
Deferred taxation 5
Current liabilities 7 588 9 993 7 792
Trade and other payables 4 228 8 735 4 681
Short-term borrowings 3 360 218 3 111
Taxation 1 040
Total equity and liabilities 26 929 51 864 28 487
Condensed cash flow statement
Unaudited Six Audited
Six months months Year
ending ending ending
28/2/02 28/2/01 31/8/01
R`000 R`000 R`000
Cash flows from operating activities (9) 856 (4 723)
Cash flows from investment activities (541) (3 058) (2 033)
Cash flows from financing activities (52) (28) 164
Net change in cash and cash equivalents (602) (2 230) (6 592)
Cash and cash equivalents acquisitions (269)
Cash and cash equivalents at beginning (2 538) 4 326 4 323
of period
Cash and cash equivalents at end (3 140) 2 096 (2 538)
of period
COMMENTARY
The Business
Vesta`s core business is to deliver total information technology (IT)
services. Over the last few years, the company invested in a multi-
disciplined development team and products that meet the demands of a fast-
changing environment. Vesta delivers in four main areas: Software
Development, Service and Support, Training and Vesta Developed Products;
these products are positioned in the areas of e-learning, performance
management and collaboration.
Accounting policies
The accounting policies in respect of the financial year ended 31 August
2001 were also consistently applied to the results for the period ended 28
February 2002. These policies conform to the South African Statements of
Generally Accepted Accounting Practice.
Review of results
Various factors had an impact on the results of the Group for the previous
six months. As a result of difficult trading conditions, the market became
more cautious and IT-spend contracted. The Group`s revenue and projected
cash flows were also affected by the cancellation of an acquisition
agreement into which it had previously entered.
In this period, management also embarked on a restructuring process to
create a focused, flexible team and to reduce operating costs. The Group
also suffered the consequences of a depreciating Rand, which restated loans
by R685 000, adding substantially to the Group`s second quarter costs.
In view of these extraordinary circumstances, the Board decided that the
Group should report its results separately for each of the two quarters
comprising the reporting period. This breakdown indicates clearly that the
Group achieved a recovery in the second quarter, with revenues from its
Service and Support area showing an increase.
Operational comment
Rationalisation resulted in a more focused Group. The different divisions of
the Group are responding well to the restructuring and are in good
operational health.
Future
Vesta is streamlining its main operational areas and defining marketing
strategies aimed at optimising the Group`s opportunities and expanding its
markets. The exercise is aimed at ensuring sustainable long-term growth and
annuity revenue streams for each operational area. The Group expects that
this combination of cost reduction and the expansion of its existing
operational areas will permit Vesta to return to profitability in the next
eighteen months.
By order of the Board
Frederick Morrison Johannesburg
Group Chief Executive 31 May 2002
Directors: F Morrison, E Thomas, A Futcher, M Morrison (Non-executive)
Transfer Secretaries: Computershare Investor Services Limited,
Edura House, 41 Fox Street, Johannesburg 2001.
Registered Office: Vesta House, Gazelle Close, Corporate Park,
Old Pretoria Rd, Midrand, Johannesburg. Tel: (011) 314-8181
Fax: (011) 314-8182 www: vesta.co.za
Date: 30/05/2002 04:00:00 PM Produced by the SENS Department
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