| Wed 31 Jul 2002, 0:00 | | Interconnective Solutions Limited - Audited Result |
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INTERCONNECTIVE SOLUTIONS LIMITED - AUDITED RESULTS FOR THE YEAR ENDED 30 APRIL
2002
INTERCONNECTIVE SOLUTIONS LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 1997/010640/06)
(ISN code: ZAE000017943 alpha code: ILT)
("Solutions" or "the company")
Audited results for the year ended 30 April 2002
30 April
2002 2001 Increase
R R Decrease %
Income Statement
Revenue 7,745,969 13,876,392 -44
Other operating income 1,323,502 1,100,016 20
Changes in inventory -305,652 463,994 -166
Direct operating costs -4,375,983 -10,307,611 -58
Staff Costs -3,937,939 -3,350,172 18
Depreciation and amortisation
expenses -864,149 -583,273 48
Other operating expenses -2,872,137 -5,439,237 -47
Loss from operations -3,286,389 -4,239,891 -22
Finance costs -104,749 -155,472 -33
Investment income 100,626 495,062 -80
Loss attributable to ordinary
Shareholders -3,290,512 -3,900,301 -16
No. of shares in issue at the
end of the year 96,600,000 96,600,000
Weighted no. of shares in
issue at the end
of the year 96,600,000 96,600,000
Earnings per share - fully
diluted -3.4 -4.0 -16
Headline earnings per share
- fully diluted -3.4 -2.4 40
Reconciliation between earnings .
and headline earnings
Per the income statement -3,290,512 -3,900,301 -16
Items included in other
operating expenses above:
Loss on disposal of
Paydirect (Pty) Ltd 0 786,753
Loss on disposal of Value Music
(Pty) Ltd
and BG Music (Pty) Ltd 0 434,122
Provision for permanent dimunition
in value
of Alnal Investments (Pty) Ltd 0 331,072
Headline earnings -3,290,512 -2,348,354 40
30 April
2002 2001
R R
Balance Sheet
ASSETS
Non-current assets 3,920,596 4,070,928
Fixed assets 1,548,838 1,466,496
Intangible assets 1,571,258 1,803,932
Loans receivable 800,000 800,000
Unlisted Investments 0 0
Investments in associates and
Subsidiaries 500 500
Current Assets 3,352,948 6,861,192
Inventory 276,016 581,668
Trade and other receivables 2,183,467 4,255,300
Cash and cash equivalents 893,465 2,024,224
Total Assets 7,273,544 10,932,120
EQUITY AND LIABILITIES
Capital and reserves 3,663,559 6,954,071
Non current liabilities 381,063 202,039
Long term loans
Current liabilities 3,228,922 3,776,010
Trade and other payables 3,021,555 3,577,310
Current portion of non current
Liabilities 186,188 198,700
Bank overdraft 21,179 0
Total liabilities 7,273,544 10,932,120
Cash Flow Statement
Cash flow from operating
Activities -604,633 -1,876,180
Net cash utilised by operations -600,510 -2,209,524
Finance costs -104,749 -155,472
Investment income 100,626 495,062
Taxation paid 0 -6,246
Cash flow from investing
Activities -713,817 -2,907,721
Cash flow from financing
Activities 166,512 341,741
Net decrease in cash and cash
Equivalents -1,151,938 -4,442,160
Cash and cash equivalents at
the beginning of the year 2,024,224 6,466,384
Cash and cash equivalents at
end of the year 872,286 2,024,224
Statement of Changes in Equity
Share Capital 96,600 96,600
Balance at beginning of the year 96,600 95,000
Issue of share capital 0 1,600
Share Premium 12,483,431 12,483,431
Balance at beginning of the
Year 12,483,431 11,707,106
Issues during the year 0 798,400
Share issue costs 0 -22,075
Accumulated losses -8,916,472 -5,625,960
Balance at beginning of the
Year -5,625,960 -1,725,659
Attributable losses -3,290,512 -3,900,301
3,663,559 6,954,071
Financial Results
In line with the groups restructuring, Retail Card Club (Pty) Ltd (RCC) disposed
its trading contracts to Unitrade Management Services (Pty) Ltd during July
2001. The disposal distorts the comparisons between the current and previous
years.
Comparative turnover has accordingly increased by 7% while direct costs have
increased by only 3%. Increases in other operating income are due mainly to a
better performance of the Valutronics operations in the UK and Australia.
Valutronics ceased capitalising research and development at the beginning of the
year and Valuecare Telemanagement Services ceased capitalising research and
development in the second six months of the year.
Staff costs increased in line with inflation and as a result of the
non-capitalisation of salaries to R&D. Other operating costs are down due to the
disposal of the RCC trading contracts and a cost cutting exercise that was
pursued by the group. The prior year also included an exceptional item of R1.55
million.
Trade debtors and creditors have been reduced due to the disposal of the RCC
trading contracts.
Cash flows from investing activities shows lower outflows due to the fact that
the group has ceased capitalising R&D and because the prior year included the
R1.55 million exceptional item.
While the group is still not profitable, losses were lower in the second half of
the year compared to the first half. Going forward, the group is expected to
turn the corner as detailed below.
Prospects
The Group has completed its restructuring and now operates within its new focus
as an application service provider using its proprietary interactive digital
platform for information communications using voice or data inputs as the
interface enabling the use of fixed or mobile devices. The group is also in the
final stages of implementing a commercial transaction capability to cater for,
inter alia, virtual recharge and payment services. The Group is a service
provider to Telkom, Vodacom and MTN.
The services offered include: interactive voice response (IVR), fax to e-mail,
fax on demand, text to speech, SMS, voicemail services and related communication
services.
The Group has identified good opportunities within a number of countries in
Africa for the deployment of its technology, software and turnkey service
offerings.
The roll-out of mobile networks in many African countries has created
outstanding prospects for the provision and hosting of value-added services,
primarily on the backbone of IVR platforms.
The Group`s proprietary software and technology platform (FoneWorx) and
intellectual know-how provides the Group with a unique selling proposition and
positions the Group to establish autonomous, turnkey interactive digital
platforms in a number of African countries which have been identified by the
Group.
The Group has signed an agreement with a Kenyan business consortium and is
currently commissioning its FoneWorx platform in Nairobi which will initially
comprise 120 channels of voice and data. In addition, a contract has been signed
for Botswana and a verbal agreement has been secured for Swaziland. We expect to
sign the Swaziland contract shortly. Each country will initially be commissioned
with 120 channels of voice and data enabled FoneWorx technology.
FoneWorx platforms will be commissioned in both Botswana and Swaziland within
the next four months.
In each signed territory the group enjoys a profit on the sale and installation
of the FoneWorx platform and in addition acquires equity in each of the
operating companies of approximately 30%.
The entry into each country is always in association with a local business
consortium who have sound knowledge of the nuances of the territory and who are
responsible for the capitalisation of the local operating company which limits
the Group`s risk in each venture.
Other countries identified for the potential deployment of the FoneWorx platform
and the Group`s solutions include: Nigeria, Mozambique, Angola, Tanzania and
Uganda. The services offered in each of the respective countries will include,
inter alia, voice services (including information and competition services), SMS
services, fax services, virtual recharge for airtime, telephone payment services
and a variety of financial business and information services.
The strategy to roll out into Africa will provide a new impetus to the Group and
enable the Group to operate in relatively uncluttered markets with good revenue
opportunities.
By order of the board
Interconnective Solutions Limited
Johannesburg
31 July 2002
The above financial information, has been prepared in accordance with the South
African statements of GAAP. The accounting policies and methods of computation
used are consistent with those used in the prior year.
The results have been audited by the company`s auditors, G Cambanis Inc. The
audit opinion is available for inspection at the company`s registered office.
Directors: M A Smith (Chairman & CEO), S Bentel, R Graver,
D R McCusker, M M D Mogatle, D J S Smith*, A N Bentel*,
G Mooney*, L T Muller* (*non-executive)
Registered office: 372B Oak Avenue, Randburg, 2194
(P O Box 2404, Randburg, 2125)
Transfer Secretaries: Computershare Investor Services Limited, 2nd floor, Edura,
41 Fox St, Johannesburg 2001
(P O Box 61051, Marshalltown, 2107)
Date: 31/07/2002 05:01:00 PM Produced by the JSE SENS Department
