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ERP.COM HOLDINGS LIMITED - REVIEWED FINANCIAL RESULTS FOR THE YEAR ENDED 31 JULY
2002
ERP.COM HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/010017/06)
("ERP.com" or "the Group")
www.erpcom.co.za
Share code: ERP
ISIN number: ZAE000019311
REVIEWED FINANCIAL RESULTS FOR THE YEAR ENDED 31 JULY 2002
Revenue up 51%
Net profit for the year up 54%
Headline earnings per share up 53%
Cash and cash equivalents up 180%
INCOME STATEMENT
2002 2001 Percentage
R`000 R`000 change
Revenue 104 453 69 121 51
Profit before taxation 16 840 10 622 59
after taking into
account the following
items:
Net interest received 1 351 714
Depreciation 2 227 1 409
Taxation 5 195 3 060 70
Current 5 957 2 647
Deferred (762) 413
Net profit for the year 11 645 7 562 54
Goodwill amortised 477 43
Net income for the
year attributable
to shareholders 11 168 7 519 49
Weighted number of
shares on which
earnings per share is
based (`000) 161 735 161 399
Earnings per share (cents) 6,9 4,7 47
Headline earnings per
share (cents) 7,2 4,7 53
Net asset value per
share (cents) 17,7 10,7 65
BALANCE SHEET
2002 2001
R`000 R`000
ASSETS
Non-current assets 5 820 6 297
Equipment 3 772 5 408
Goodwill 787 390
Deferred taxation 1 261 499
Current assets 43 834 25 759
Inventories and contracts in progress 604 1 160
Trade and other receivables 16 563 15 064
Cash and cash equivalents 26 667 9 535
Total assets 49 654 32 056
EQUITY AND LIABILITIES
Capital and reserves 28 877 17 399
Share capital and premium 9 065 8 755
Retained income 19 812 8 644
Current liabilities 20 777 14 657
Total equity and liabilities 49 654 32 056
CASH FLOW STATEMENT
2002 2001
R`000 R`000
Cash flows from operating activities 19 028 6 644
Profit before taxation 16 840 10 622
Adjustments including those
not affecting the flow of funds 1 617 694
Operating income before working
capital changes 18 457 11 316
Increase in working capital 7 823 (3 285)
Cash generated from operations 26 280 8 031
Net interest received 1 351 714
Taxation paid (8 603) (2 101)
Cash flows from investing activities (2 206) (4 221)
Cash flows from financing activities 310 -
Proceeds from issue of shares 318 -
Share issue expenses (8) -
Net increase in cash and
cash equivalents 17 132 2 423
Cash and cash equivalents at
beginning of year 9 535 7 112
Cash and cash equivalents
at end of year 26 667 9 535
STATEMENT OF CHANGES IN EQUITY
2002 2001
R`000 R`000
Share capital 164 161
Balance at beginning of year 161 161
Issued during the year 3 -
Share premium 8 901 8 594
Balance at beginning of year 8 594 8 594
Issued during the year 315 -
Share issue expenses written off (8) -
Retained income 19 812 8 644
Balance at beginning of year 8 644 1 125
Net income for the year 11 168 7 519
Total capital and reserves 28 877 17 399
COMMENTS
The directors are pleased with the excellent performance of the Group for the
financial year, which has featured strong organic growth in revenue and headline
earnings whilst maintaining high operating margins. Coupled with tight cash
management, this has resulted in 180% growth in cash reserves. Over the past
three years the Group has achieved average growth of 57% in revenue and 56% in
profit before taxation.
GROUP OVERVIEW AND BUSINESS REVIEW
OVERVIEW
The Group is focused on the implementation, integration and management of
enterprise wide information technology applications. The Group concentrates on
three major markets:
ENTERPRISE APPLICATIONS
The Group provides a range of enterprise application solutions including
implementation, system integration and managed services around JD Edwards,
PeopleSoft and SAP technologies. During the period under review the Group
secured a number of key wins as customers converted their legacy systems to the
new generation of internet-based enterprise applications.
INFORMATION SECURITY
The information security market is growing rapidly along with the growth in
internet-based business. The Group provides a range of world-class security
solutions and services in the areas of anti-virus, content-security, firewalls,
intrusion detection, authentication and network asset management.
NETWORKING AND INFRASTRUCTURE
The Group is involved in the design, implementation and management of network
and IT infrastructure solutions with a focus on thin client and server based
computing architecture.
BUSINESS REVIEW
The three lines of business performed well during the period under review with
excellent growth in market share and earnings.
REVENUE ANALYSIS
Networking and infrastrucutre 21%
Information security 33%
Enterprise applications 46%
PROSPECTS
Whilst market conditions remain tough, an improvement is expected by the second
quarter of 2003.
The focus of the Group in the coming year will be continuing to grow the
business organically whilst investigating new investment opportunities to make
sure it is positioned for the anticipated upturn.
The Group is confident that it will product solid growth in turnover and
earnings per share in the coming year. The level of growth will be dependent on
local trading conditions.
DECLARATION OF DIVIDEND AND DIVIDEND POLICY
The Group believes that it has sufficient cash reserves to declare a dividend
and still fund future growth and consequently a 1,4 cent dividend per share has
been declared. This equates to 20% of headline earnings which will become the
future dividend policy of the Group.
MAIN BOARD LISTING
The Group has now completed three years on the Venture Capital Sector of the JSE
Securities Exchange SouthAfrica ("JSE") and believes that it has met all the
requirements for a Main Board Listing in the Information Technology Sector. We
will shortly apply to the JSE for this transfer.
ACCOUNTING POLICIES
The financial statements have been prepared on a historical cost basis in
accordance with South African Statements of Generally Accepted Accounting
Practice. The accounting policies of the Group are consistent with those used in
the preparation of the audited financial statements for the year ended 31 July
2001.
INDEPENDENT REVIEW
The financial statements have been reviewed by KPMG Inc., whose review opinion
is available for inspection at the Group`s registered address.
DIRECTORATE
Mr Phillip Vallet resigned from the board on the 26 October 2001. Mr Paul Mather
was appointed as an executive director on 1 February 2002. Mr Steven Nathan was
appointed as a non-executive director on 8 April 2002. Mr Rudolf Pretorius was
appointed to the board on 10 April 2002 as the non-executive chairman of the
Group.
For and on behalf of the board of directors
Rudolf Pretorius Peter Forsyth
Non-executive chairman Chief executive officer
17 September 2002
Johannesburg
Directors: R Pretorius (Non-executive chairman), P Forsyth (Chief executive
officer) DTK Brazier*, CJLessing*, P Mather*, GM Morris#, S Nathan#, MM
Spilhaus*
* Executive directors # Non-executive directors
Company secretary: A Ritzlmayr (email: andreasr@erpcom.co.za)
Registered address: ERP.com House, Nanyuki Office Park, 69 Nanyuki Drive
Sunninghill, Sandton 2157. (PO Box 2880, Rivonia 2128)
Transfer secretaries: Computershare Investor Services Limited
70 Marshall Street, Marshalltown 2001. (POBox 61051, Marshalltown 2107)
Date: 17/09/2002 07:05:00 AM Produced by the JSE SENS Department
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