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Aplitec - Group Audited Results For The Year Ended 30 June 2002
NET1 APPLIED TECHNOLOGY HOLDINGS LIMITED("APLITEC")
INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA
REGISTRATION NUMBER 1997/007207/06
WWW.APLITEC.CO.ZA
HIGHLIGHTS: HEADLINE EARNINGS PER SHARE, 44.61 CENTS
PROFIT BEFORE TAX, R149 MILLION
DIVIDEND PER SHARE, 11 CENTS
RETURN ON AVERAGE EQUITY, 28.6%
TANGIBLE NET ASSET VALUE PER SHARE, 171.41 CENTS
CASH AND CASH EQUIVALENTS UP BY R121 MILLION TO, R322
MILLION
ABRIDGED INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE
2002 2001 %
R`000 R`000 CHANGE
REVENUE 525 585 557 445 (5.7)
PROFIT FROM OPERATIONS 135 000 125 756 7.4
NET INTEREST RECEIVED 14 014 10 986 27.6
PROFIT BEFORE TAX 149 014 136 742 9.0
INCOME TAX EXPENSE 43 286 42 471 1.9
PROFIT AFTER TAX 105 728 94 271 12.2
MINORITY INTERESTS 1 695 1 084 56.4
NET PROFIT FOR THE YEAR 104 033 93 187 11.6
EARNINGS PER SHARE (CENTS) 45.23 41.42 9.2
DILUTED EARNINGS PER SHARE (CENTS) 44.82 40.75 10.0
HEADLINE EARNINGS PER SHARE (CENTS) 44.61 42.23 5.6
DILUTED HEADLINE EARNINGS
PER SHARE (CENTS) 44.20 41.56 6.4
WEIGHTED AVERAGE NUMBER
OF SHARES (`000) 230 001 225 004 2.2
DILUTED NUMBER OF SHARES (`000) 232 124 228 661 1.5
RECONCILIATION OF HEADLINE EARNINGS
PROFIT ATTRIBUTABLE TO ORDINARY
SHAREHOLDERS 104 033 93 187
AMORTISATION OF GOODWILL 1 754 1 902
PROFIT ON DISPOSAL OF
PROPERTY, PLANT AND EQUIPMENT (475) (252)
PROFIT ON DISPOSAL OF BUSINESS (2 713) -
LOSS ON DISPOSAL OF JOINT VENTURE - 188
HEADLINE EARNINGS 102 599 95 025
ABRIDGED BALANCE SHEET AT 30 JUNE
2002 2001
R`000 R`000
ASSETS:
NON-CURRENT ASSETS 62 512 74 289
PROPERTY, PLANT AND EQUIPMENT 33 192 39 751
CAPITALISED DEVELOPMENT COSTS 2 279 5 995
TRADE MARKS 1 630 2 174
GOODWILL 14 375 16 129
DEFERRED TAX 11 036 10 240
CURRENT ASSETS 448 205 317 966
INVENTORY 15 521 16 611
TRADE AND OTHER RECEIVABLES 110 870 100 474
CASH AND CASH EQUIVALENTS 321 814 200 881
TOTAL ASSETS 510 717 392 255
EQUITY AND LIABILITIES:
CAPITAL AND RESERVES 418 455 309 075
ISSUED SHARE CAPITAL AND PREMIUM 129 575 124 228
ACCUMULATED PROFIT 288 880 184 847
MINORITY INTERESTS 3 275 1 580
CURRENT LIABILITIES 88 987 81 600
TRADE AND OTHER PAYABLES 58 591 52 805
TAX 30 396 28 795
TOTAL EQUITY AND LIABILITIES 510 717 392 255
SHARES IN ISSUE(`000) 233 464 229 814
TANGIBLE NET ASSET VALUE
PER SHARE (CENTS) 171.41 123.92
NET ASSET VALUE PER SHARE (CENTS) 179.24 134.49
ABRIDGED SEGMENTAL ANALYSIS
THE ESTIMATED PROPORTIONS OF CONSOLIDATED REVENUE AND PROFIT BEFORE TAX
ATTRIBUTABLE TO THE VARIOUS CLASSES OF BUSINESS WERE AS FOLLOWS:
REVENUE PROFIT BEFORE TAX
2002 2001 2002 2001
R`000 R`000 R`000 R`000
RECURRING TRANSACTION- 363 164 366 538 105 906 86 332
BASED ACTIVITIES
TECHNOLOGY SALES 56 224 98 993 27 739 36 060
AND OUTSOURCING
FINANCIAL SERVICES 106 197 91 914 15 369 14 350
525 585 557 445 149 014 136 742
ABRIDGED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE
2002 2001
R`000 R`000
CASH FLOWS FROM OPERATING ACTIVITIES:
CASH RECEIPTS FROM CUSTOMERS 503 476 594 094
CASH PAID TO SUPPLIERS AND EMPLOYEES (348 648) (429 869)
CASH GENERATED FROM OPERATIONS 154 828 164 225
NET INTEREST RECEIVED 14 014 10 986
TAX PAID (42 481) (38 743)
CASH FLOWS FROM OPERATING ACTIVITIES 126 361 136 468
CASH FLOWS FROM INVESTING ACTIVITIES:
ADDITIONS TO PROPERTY, PLANT
AND EQUIPMENT (19 472) (21 956)
PROCEEDS FROM DISPOSAL OF PROPERTY,
PLANT AND EQUIPMENT 6 335 282
CASH INFLOW FROM DISPOSAL OF BUSINESS 2 362 -
CASH OUTFLOW FROM DISPOSAL
OF JOINT VENTURE - (66)
ACQUISITION OF SUBSIDIARIES - (5 962)
CASH UTILISED IN INVESTING
ACTIVITIES (10 775) (27 702)
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM ISSUE OF SHARE CAPITAL 5 347 40 845
REPAYMENT OF INTEREST-BEARING
BORROWINGS - (4 154)
CASH GENERATED FROM FINANCING ACTIVITIES 5 347 36 691
NET INCREASE IN CASH AND
CASH EQUIVALENTS 120 933 145 457
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 200 881 55 424
CASH AND CASH EQUIVALENTS
AT END OF YEAR 321 814 200 881
CASH EQUIVALENT EARNINGS PER SHARE
(CENTS) 55.04 53.01
ABRIDGED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE
2002 2001
R`000 R`000
ORDINARY SHAREHOLDERS` EQUITY AT
BEGINNING OF YEAR 309 075 155 543
CHANGES IN SHARE CAPITAL:
SHARES ISSUED 3 31
CHANGES IN SHARE PREMIUM: 5 344 60 314
SHARES ISSUED 5 380 60 495
SHARE ISSUE EXPENSES WRITTEN OFF (36) (181)
CHANGES IN ACCUMULATED PROFIT:
NET PROFIT FOR THE YEAR 104 033 93 187
ORDINARY SHAREHOLDERS` EQUITY AT
END OF YEAR 418 455 309 075
ACCOUNTING POLICIES
THE FINANCIAL STATEMENTS HAVE BEEN PREPARED ON THE HISTORICAL COST BASIS
AND IN CONFORMITY WITH STATEMENTS OF GENERALLY ACCEPTED ACCOUNTING
PRACTICE. THE ACCOUNTING POLICIES APPLIED IN THE PREPARATION OF THE
FINANCIAL STATEMENTS ARE CONSISTENT IN ALL MATERIAL ASPECTS WITH THOSE
APPLIED IN THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE
2001.
AUDIT REPORT
THE RESULTS HAVE BEEN AUDITED BY FISHER HOFFMAN PKF AND THE UNQUALIFIED
AUDIT OPINION IS AVAILABLE FOR INSPECTION AT THE COMPANY`S REGISTERED
OFFICE.
COMMENTARY
THE BOARD HAS PLEASURE IN PRESENTING APLITEC`S FIFTH ANNUAL REPORT SINCE
THE COMPANY`S LISTING IN DECEMBER 1997. DURING THIS PERIOD, APLITEC`S
ATTRIBUTABLE EARNINGS AND TANGIBLE NET ASSET VALUE PER SHARE HAVE
INCREASED ON A COMPOUNDED BASIS BY 116% AND 36% PER ANNUM RESPECTIVELY.
FINANCIAL REVIEW
PROFIT FROM OPERATIONS INCREASED BY 7.4% FROM R126 MILLION TO R135
MILLION. NET PROFIT INCREASED BY 11.6% FROM R93 MILLION TO R104 MILLION.
EARNINGS PER SHARE INCREASED BY 9.2% TO 45.23 CENTS AND HEADLINE
EARNINGS PER SHARE ROSE BY 5.6% TO 44.61 CENTS.
THE DECREASE IN GROSS REVENUE OF R32 MILLION AROSE MAINLY DUE TO THE
DECLINE OF R43 MILLION IN TURNOVER IN THE TECHNOLOGY SALES AND
OUTSOURCING DIVISION, WHICH IS IN LINE WITH GLOBAL HARDWARE IT TRENDS.
THE GROUP`S BALANCE SHEET IS VERY SOUND WITH NO INTEREST-BEARING DEBT
AND CASH RESOURCES OF R322 MILLION, AN INCREASE OF R121 MILLION. HEALTHY
LIQUIDITY IS SUBSTANTIATED BY A CURRENT RATIO OF 5.04 : 1 AND AN ACID
TEST RATIO OF 4.7 : 1.
CASH GENERATED BY OPERATING ACTIVITIES AMOUNTED TO R126.4 MILLION AND
CASH EQUIVALENT EARNINGS PER SHARE INCREASED BY 3.8% TO 55.04 CENTS PER
SHARE.
THE RETURN ON AVERAGE EQUITY FOR THE YEAR IS 28.6%, WHILE THE RETURN ON
AVERAGE ASSETS AMOUNTED TO 33%.
OPERATIONAL REVIEW
TECHNOLOGY SALES AND OUTSOURCING DIVISION
MARGINS IN THE TECHNOLOGY SALES AND OUTSOURCING DIVISION HAVE INCREASED
SIGNIFICANTLY. THIS WAS PRIMARILY DUE TO THE DIVISION`S ENHANCED FOCUS
ON ITS STRATEGIC OBJECTIVE OF PROVIDING TURNKEY SOLUTIONS TO GENERATE
RECURRING TRANSACTION REVENUES. THE MALAWI AND MOZAMBIQUE CONTRACTS WERE
SUCCESSFULLY COMPLETED AND INTERNATIONAL INITIATIVES HAVE ACCOUNTED FOR
36% OF THE REVENUE OF THE DIVISION.
DURING THE YEAR, APLITEC CONTINUED TO ENHANCE ITS KERNEL UEPS SYSTEM TO
INCORPORATE FUNCTIONALITY SUCH AS C2C (CARD TO CARD) AND AN INTEGRATED
WAGE PAYMENT SYSTEM, WHICH CAN OPERATE SEAMLESSLY WITH ALL OTHER
EXISTING APPLICATIONS. THESE INITIATIVES, TOGETHER WITH APLITEC`S PROVEN
TRACK RECORD, RESULTED IN THE GROUP BEING AWARDED THE MTN/BUSINESS DAY
TECHNOLOGY TOP 100 AWARD IN THE INFORMATION AND COMMUNICATIONS
TECHNOLOGY SECTOR, AS WELL AS THE PRESTIGIOUS ADVANCED CARDS AWARD FOR
THE BEST WORLDWIDE SMART CARD IMPLEMENTATION OF THE YEAR 2002.
THE COSTS ASSOCIATED WITH THE CONTINUOUS MAINTENANCE AND IMPROVEMENT OF
THE UEPS SUITE OF APPLICATIONS HAVE BEEN EXPENSED AS AND WHEN INCURRED.
THIS DIVISION WILL CONTINUE TO FOCUS ITS EFFORTS ON THE PENETRATION OF
DEVELOPING MARKETS, WHERE THE UEPS HAS PROVEN TO BE THE MOST PRACTICAL
AND COST EFFECTIVE SOLUTION.
PENSION AND WELFARE DIVISION
THE NET PROFIT MARGIN OF THIS DIVISION IMPROVED FROM 24% TO 29% DUE TO
TIGHTER FINANCIAL CONTROLS, ENHANCED REPORTING SYSTEMS AND IMPROVED
DISTRIBUTION METHODS WHICH HAVE ALLOWED THE GROUP TO REDUCE RISK AND TO
OPTIMISE THE RETURN OF ITS CORE TECHNOLOGY OFFERING.
THE DIVISION HAS BEEN AWARDED APPROXIMATELY 60% OF THE NEW EASTERN CAPE
SOCIAL WELFARE CONTRACT FOR AN INITIAL PERIOD OF THREE YEARS. DUE TO
PROLONGED NEGOTIATIONS, THE LIVE IMPLEMENTATION OF THIS PROJECT HAS BEEN
DELAYED UNTIL 1 SEPTEMBER 2002 WHEN THE ENROLMENT PROCESS WILL COMMENCE.
PAYMENT OF THE FIRST BENEFICIARIES WILL START ON 1 NOVEMBER 2002; THE
EFFECTIVE COMMENCEMENT DATE OF THE THREE YEAR CONTRACT. THIS CONTRACT
WILL BOOST REVENUE BY MORE THAN R100 MILLION PER ANNUM AND INCREASE THE
GROUP`S CUSTOMER BASE BY MORE THAN 400 000 CLIENTS.
THE TECHNOLOGICAL SOLUTION PROVIDED FOR THIS PROVINCE INCORPORATES THE
LATEST INTERNET PROTOCOL BASED BI-DIRECTIONAL SATELLITE TECHNOLOGY AND
THE NEW LOW COST FINGERPRINT VERIFICATION SYSTEM, BOTH DEVELOPED BY
APLITEC`S ENGINEERS.
MICRO-FINANCE DIVISION
THE INCREASE IN REVENUE FOR THIS DIVISION IS DUE TO THE MATURATION OF
THE AGE SECURE INITIATIVE, WHICH HAS TO DATE FOCUSSED ON THE PROVINCE OF
KWAZULU NATAL. FOLLOWING INITIAL START UP LOSSES, AGE SECURE IS NOW
PROFITABLE AND CASH GENERATIVE WITH A TOTAL DEBTORS BOOK OF R23 MILLION
AT 30 JUNE 2002.
THE SUCCESS OF AGE SECURE HAS AGAIN DEMONSTRATED THAT APLITEC`S
TECHNOLOGY CAN BE USED TO EFFECTIVELY MANAGE THE CREDIT AND COLLECTION
RISKS INHERENT IN THE MICROLENDING INDUSTRY.
THE DEBTORS BOOK OF APLITEC`S CONVENTIONAL MICROLENDING BUSINESS HAS
DECREASED FROM R45 MILLION TO R37 MILLION, IN LINE WITH MANAGEMENT`S
DECISION NOT TO ACTIVELY GROW THIS ACTIVITY. THE BOARD IS OF THE OPINION
THAT ADEQUATE PROVISION HAS BEEN MADE FOR DOUBTFUL DEBTS.
THE TOTAL DEBTORS BOOK FOR AGE SECURE AND THE CONVENTIONAL MICROLENDING
BUSINESS, WHICH AMOUNTS TO R60 MILLION, IS INCLUDED IN TRADE AND OTHER
RECEIVABLES ON THE BALANCE SHEET.
PROSPECTS
THE MANAGEMENT OF APLITEC WILL CONTINUE TO FOCUS ON THOSE OPPORTUNITIES
THAT DELIVER SUSTAINABLE, PROFITABLE AND CASH GENERATIVE ACTIVITIES,
WHILST PROMOTING THE UEPS TECHNOLOGY AS THE DE-FACTO STANDARD FOR
PAYMENT SYSTEMS IN DEVELOPING ECONOMIES.
DIVIDEND
THE BOARD HAS RESOLVED TO DECLARE A DIVIDEND OF 11 CENTS PER SHARE IN
RESPECT OF THE YEAR ENDED 30 JUNE 2002. TRADING IN THE STRATE
ENVIRONMENT REQUIRES SETTLEMENT WITHIN FIVE BUSINESS DAYS. IN ACCORDANCE
WITH THE SETTLEMENT PROCEDURES OF STRATE, APLITEC HAS DETERMINED THE
LAST DAY FOR TRADING TO PARTICIPATE IN THE DIVIDEND TO BE FRIDAY, 6
SEPTEMBER 2002. THE SHARES WILL COMMENCE TRADING EX DIVIDEND ON MONDAY,
9 SEPTEMBER 2002 AND THE RECORD DATE WILL BE FRIDAY, 13 SEPTEMBER 2002.
PAYMENT WILL BE MADE ON MONDAY, 16 SEPTEMBER 2002. SHARE CERTIFICATES
MAY NOT BE DEMATERIALISED OR REMATERIALISED BETWEEN MONDAY, 9 SEPTEMBER
2002 AND FRIDAY, 13 SEPTEMBER 2002 (BOTH DATES INCLUSIVE).
On behalf of the board
Serge Belamant Herman Kotze
Chief Executive Officer Chief Financial Officer
15 AUGUST 2002
Johannesburg
Transfer Secretaries Secretary and registered office
Ultra Registrars (Pty) Ltd Light and Livingstone Financial
Services CC
11 Diagonal Street 3rd Floor, Palm Grove
Johannesburg 196 Louis Botha Avenue
2001 Houghton Estate, 2198
Directors : S C P Belamant (FRENCH), H G Kotze, D A J Donald*, J C
Livingstone*, B J S Hore*, D G S Muller*
*Non-Executive
SHARE CODE: APL
ISIN: ZAE000024113
Date: 15/08/2002 11:56:00 AM Produced by the JSE SENS Department
