| Fri 13 Sep 2002, 8:56 | | Global Technology - Interim Results For The Six Mo |
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Global Technology
Incorporated in the Republic of South Africa
Registration number 1996/009809/06
Share code GLT
ISIN code ZAE 000016820
www.glotec.com
Enterprise business solutions globally
- Revenue increased by 19%
- Operating margins increased by 33%
- Operating profits increased by 59%
COMMENTARY
Introduction
Global Technology is the leading provider of software solutions to the banking,
insurance and financial communities across Africa and Australasia. The Group`s
mission is to optimise the business performance of its customers through
increasing their return on IT investment. This will be done through implementing
effective business solutions combining appropriate software, services and
skills.
Global Technology`s key differentiator is the extensive experience it has had
implementing and supporting banking and financial systems with clients in 56
countries globally. Since its inception in 1989, the Group has built a winning
combination of African-based skills coupled with vast international experience,
enabling it to offer its customers the world`s best banking, insurance and
business intelligence IT services.
Global Technology`s key focus is on its customers, establishing their
requirements, and then building structures and processes to ensure that the
Group delivers a business solution that adds value to their businesses. Global
Technology is technology independent, offering its customers freedom of choice
in their IT platforms and ensuring that it has access to the world`s best IT
products.
Footprint
Global Technology operates in 26 African countries, across the continent,
including Kenya, Nigeria, Botswana, Mozambique, Zambia, Ethiopia, Ivory Coast
and Uganda. In addition to its South African operations, the Group has offices
in Australia, Zimbabwe and the Ivory Coast.
Results
In a difficult trading environment during the period under review, Global
Technology is able to report that revenue, operating margins and operating
profits have increased considerably, when compared with the same period last
year. However, attributable profits are substantially lower than those reported
in the same period last year. This is due to the lower associate income from
TEMENOS, foreign exchange losses, which resulted from the dramatic recovery of
the Rand in the first quarter of 2002, and increased interest costs.
The Group has, however, continued to maintain a significantly high level of
dollar-denominated revenue, which currently comprises 74% of its earnings.
During the period under review, the Group achieved headline earnings of R3,5
million, operating profit increased by 59% to R17,5 million and revenue
increased by 19% to R219,5 million.
Significant events
The following significant events occurred during the period under review:
- Global Technology expanded its geographical reach by concluding deals with
Development Bank in Ethiopia, Tropical Africa Bank in Uganda and Rural
Development Bank of New Guinea in Papua New Guinea
- Global Technology entered into a partnership with Everest, a specialist
organisation that primarily targets the public sector and has specific
experience in the utilities and post office environments
- Global Technology and ICL Kenya Limited formed a partnership, that will
facilitate ICL Kenya providing first line support services to the Kenyan market,
as well as allowing ICL Kenya to act as a reseller of Global Technology`s
products and services in Kenya
- Hyperion, whose products are distributed in Southern Africa by Global
Technology, was named the number one provider of multidimensional analysis/OLAP
products, based on worldwide 2001 software licence and maintenance revenues, for
the third year running
- GLOBUS was rated by the International Banking Systems Review as the world`s
top selling wholesale back office banking system for the fourth consecutive year
- Global Technology Australasia was awarded a tender to supply Queensland Rail
with Metify, an activity-based management solution
- TEMENOS, in which Global Technology owns a strategic 15% stake, was awarded
its largest GLOBUS contract to date, to support ING Bank`s international branch
network operations
- Non-core businesses, Fin-X and Bankplus, were disposed of. Both businesses
will continue their strategic alliance with Global Technology
- In addition to his current role as Chairman, Ray Leonard, founder of and major
shareholder in the Group, has taken up the position of Chief Executive Officer
of Global Technology Southern Africa. Former Chief Operating Officer, David
McWilliam, has moved to a non-executive role and remains on the Board
Interim dividend
In line with Global Technology`s conservative dividend policy, the directors
have agreed that no interim dividend will be declared.
The way forward
Prospects for the next six months are promising. Global Technology expects a
continued improvement in operating profit, and TEMENOS has indicated that it is
expecting improved results in the second half of the financial year. TEMENOS`
excellent relationship with Global Technology will continue to ensure a steady
flow of product sales and implementations of GLOBUS and GLOBUS-related products,
for Global Technology in the northern hemisphere.
In the long term, Global Technology is not expecting the foreign exchange losses
to be repeated and anticipates reduced interest costs. In addition, the Group
has a strong new business pipeline.
Global Technology is also intent on expanding its existing reach in Africa,
through key partnerships and a growing client base in new territories.
The Group will continue to place strong emphasis on product development and
services, focusing particularly on distributing its locally-developed products
globally.
The unaudited interim results for the six months ended 30 June 2002 set out
below have been prepared in accordance with the South African Statements of
Generally Accepted Accounting Practice and on a basis consistent with the prior
year`s interim report and the audited financial statements at 31 December 2001.
By order of the Board
Ray Leonard
(Chairman)
Pat Moffett
(Director)
12 September 2002
Registered office
Arcay House II Number Three Anerley Road
Parktown 2193 PO Box 62397 Marshalltown 2107
Transfer secretaries
Computershare Services Limited 2nd Floor
Edura House 41 Fox Street Johannesburg 2001
Directors
R Leonard (Chairman) KDD de Villiers* JM Hughes**
RC Johnson G Koukis* *** G Leonard DC McWilliam*
A Mhlongo* PJ Moffett M Tshivhase*
*Non-executive **British ***Greek
Company secretary
Arcay Client Support (Pty) Ltd
Registration number 1998/025284/07
CONSOLIDATED INCOME STATEMENT
Six months Six months
ended ended
30 June 30 June %
R000 2002 2001 move
Revenue 219 590 184 014 19,3
Operating profit 17 504 11 035 58,6
Exchange (loss)/profit (4 980) 584
Depreciation - assets (2 668) (2 422)
Net development cost
(amortised)/capitalised (506) 6 663
Operating profit before
interest, tax and
exceptional items 9 350 15 860 (41,0)
Net interest (paid)/received (4 614) 972
Operating profit before tax
and exceptional items 4 736 16 832
Exceptional items - Note 1 (6 302) 68 695
Goodwill amortised (4 974) (4 225)
Net (loss)/profit before
associates (6 540) 81 302
Share of profits in
associated company 692 15 847
Net (loss)/profit before
taxation (5 848) 97 149
Taxation (1 744) (2 174)
(Loss)/Profit after taxation (7 592) 94 975
Profit attributable to
outside shareholders (153) (1 982)
(Loss)/Profit for the period (7 745) 92 993
Operating profit % of revenue 8,0 6,0
Number of shares in issue
(thousands) 438 805 400 425
Weighted average number
of shares
in issue (thousands) 415 415 383 316
Headline earnings per
ordinary share 0,9 7,4
Earnings per ordinary share (1,9) 24,3
Reconciliation of headline
earnings per share
Earnings per share (1,9) 24,3
Exceptional items 1,6 (17,9)
Goodwill amortised 1,2 1,0
SUMMARISED CONSOLIDATED BALANCE SHEET
Assets
Non-current assets 425 763 332 827
Property, plant and equipment 11 406 10 609
Loans receivable 14 106 16 439
Development cost 49 133 15 076
Goodwill 52 467 66 698
Deferred taxation 45 426 -
Investment in associate 240 227 223 014
Investments 12 998 991
Current assets 171 537 170 324
Trade and other receivables 153 003 141 856
Deferred expenses 17 918 9 741
Bank and cash on hand 616 18 727
597 300 503 151
Equity and liabilities
Capital and reserves 409 062 337 603
Outside shareholders` interest 28 758 12 473
Non-current liabilities 40 947 26 035
Long-term borrowings 37 218 24 878
Deferred taxation 3 729 1 157
Current liabilities 118 533 127 040
Trade and other payables 44 086 83 794
Deferred revenue 35 540 22 346
Current portion of
long-term borrowings 1 120 680
Taxation 6 883 3 870
Bank overdrafts 30 904 16 350
597 300 503 151
Net tangible asset value
per share (cents) 76,6 67,0
ABRIDGED CASH FLOW STATEMENT
Cash generated from operations 16 600 24 092
Working capital changes (31 005) (15 553)
Net finance costs (4 978) (972)
Taxation paid (5 209) (1 526)
Net cash flow from operating
activities (24 592) 6 041
Net cash flow from investing
activities (10 927) (2 631)
Net cash flow from financing
activities 9 850 5 421
Net movement in cash (25 669) 8 831
Notes
1 Exceptional items
Net (deficit)/surplus on the sale/dilution
of investments (6 302) 77 943
Exceptional item from associate - (9 248)
(6 302) 68 695
2 Other
There were no contingent liabilities or material capital commitments existing at
the end of the period.
Date: 13/09/2002 07:10:00 AM Produced by the JSE SENS Department
