| Thu 26 Sep 2002, 17:25 | | Integrear - Audited Results For The Year Ended 30 |
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Integrear - Audited Results for the year ended 30 June 2002
Integrear Limited
("Integrear" or "the group")
(Registration number 1989/001319/06)
(Share code: ITG ISIN number: ZAE000027231)
Audited Results for the year ended 30 June 2002
Group Income Statement
2002 2001
R R
Revenue 11 603 112 10 613 980
Cost of sales (6 666 442) (5 904 688)
Gross profit 4 936 670 4 709 292
Operating expenses (5 135 021) (3 970 224)
(Loss)/profit from operations (198 351) 739 068
Finance costs (16 478) (15 483)
Income from investments 119 735 325 544
Goodwill amortised (336 196) -
Profit on disposal of subsidiaries - 720 664
(Loss)/profit before taxation (431 290) 1 769 793
Income tax 23 779 (371 898)
Net (loss)/profit for the year (407 511) 1 397 895
(Loss)/earnings per share
Basic (loss)/earnings per share (cents)* (3,24) 11,13
Headline (loss)/earnings per share (cents)** (0,51) 5,38
*Basic earnings per share is calculated based on net loss of R407 511 divided by
the number of shares in issue being 12 564 190 x 100.
**Headline earnings per share is calculated based on net loss of R407 511
adjusted by the amortisation of goodwill of R336 196 and loss on disposal of
equipment R7 301 divided by the number of shares in issue being 12 564 190 x
100.
Group Balance Sheet
2002 2001
R R
ASSETS
Non-current assets 1 822 691 2 176 471
Equipment 293 310 302 195
Goodwill 672 391 -
Deferred tax asset 850 137 166 864
Loans receivable 6 853 1 707 412
Current assets 3 526 176 3 214 447
Trade and other receivables 1 620 248 644 465
Bank balances and cash 1 905 928 2 569 982
TOTAL ASSETS 5 348 867 5 390 918
EQUITY AND LIABILITIES
Capital and reserves 3 224 917 3 632 428
Share capital 125 642 125 642
Share premium 686 031 686 031
Non-distributable reserves 827 687 827 687
Capital redemption fund 48 558 48 558
Accumulated profits 1 536 999 1 944 510
Non-current liabilities
Long-term borrowings 61 666 62 538
Current liabilities 2 062 284 1 695 952
Trade and other payables 2 069 608 1 600 127
Short-term borrowings 69 162 40 581
Taxation (asset)/liability (76 486) 55 244
TOTAL EQUITY AND LIABILITIES 5 348 867 5 390 918
GROUP CASH FLOW STATEMENT
2002 2001
R R
Operating activities
Cash receipts from customers 11 022 129 14 526 314
Cash paid to suppliers and employees (11 382 318) (9 241 898)
Cash (used in)/from operations (360 189) 5 284 416
Interest paid (16 478) (15 483)
Dividends paid - (204 925)
Taxation paid (358 544) (1 155 668)
Income from investments 119 735 325 544
Net cash (used in)/from operating
activities (615 476) 4 233 884
Investing activities
Purchases of equipment (91 452) (108 400)
Proceeds on disposal of equipment - 11 702
Increase in loans receivable (5 880) (1 997 332)
Reverse acquisition of subsidiary,
net of cash acquired - 3 711 820
Acquisition of subsidiaries, net
of cash acquired 21 045 -
Disposal of subsidiaries - (100)
Net cash (used in)/from
investing activities (76 287) 1 617 690
Financing activities
Share capital reduction - (3 586 448)
JSE listing expenses paid - (982 164)
Increase/(decrease) in borrowings 27 709 (801 907)
Net cash from/(used in)
financing activities 27 709 (5 370 519)
Net (decrease)/increase in cash and
cash equivalents (664 054) 481 055
Cash and cash equivalents at
beginning of the year 2 569 982 2 088 927
Cash and cash equivalents at
end of the year 1 905 928 2 569 982
Group Statement of changes in equity
Non- Capital Accumu-
Share Share distributable redemption lated
capital premium reserve fund profits Total
R R R R R R
Balance at
30 June 2000 500 - 827 687 - 546 615 1 374 802
Shares
issued 113 078 7 386 922 - - - 7 500 000
Listing
expenses - (982 164) - - - (982 164)
Reverse listing
adjustment 12 064 (5 718 727) - 48 558 - (5 658 105)
Net profit for
the year - - - - 1 397 895 1 397 895
Balance at
30 June
2001 125 642 686 031 827 687 48 558 1 944 510 3 632 428
Net loss for
the year - - - - (407 511) (407 511)
Balance at
30 June
2002 126 642 686 031 827 687 48 558 1 536 999 3 224 917
COMMENTS
Vision and Market Focus
Integrear has a vision of being the preferred player in the Southern African
market by bringing insight and effectiveness to the financial and credit value
chain. It has adopted a differentiation approach to achieve its future growth
goals. Integrear`s market focus is on credit grantors and organisations
generating large numbers of periodic payments.
Nature of Business
Integrear is positioning itself in the IT services and software market in
Southern Africa, primarily as an Application Processing Service provider by
utilising its own, as well as proven branded high tech business solutions.
Integrear is a centre of knowledge in its chosen fields. It provides products
and services that address customer business processes such as: credit
application processing, debtor account maintenance, collections of delinquent
debtors, and bringing insight into the debtor asset utilising a portfolio
management approach. In addition, Integrear has developed sophisticated
optimisation solutions to satisfy the needs of tertiary educational
institutions.
Review of Results
The basis of the preparation of the financial statements for the year ended 30
June 2002 and the accounting policies applied are consistent with those
published in our financial statements for the year ended 30 June 2001 and are in
accordance with South African Statements of Generally Accepted Accounting
Practice (GAAP).
The net loss for the year is mainly due to the amortisation of goodwill and the
continuing negative sentiment in the Information Technology sector, further
characterised by slow decision-making.
Without changing the group`s revenue recognition policy, the board decided to
apply the principles of US GAAP (SOP 97-2), which provide more guidance on the
timing of revenue recognition and the application of the group`s accounting
policy on revenue recognition. These principles are more defined in their
application to ensure more consistency in the present and future financial
reports of the group. As a result of the application of these principles,
certain transactions were not recognised in the current financial year and have
been deferred to the next financial year.
All costs relating to the development of software are also recognised as cost
for the reporting period and are not capitalised.
Audit opinion
These results have been audited by Deloitte & Touche and their unqualified audit
report is available for inspection at the company`s registered office.
Prospects
Integrear is optimistic in terms of the opportunities that exist and that are
arising on a daily basis for the application of its products and services in the
debt management market in Southern Africa. It is extending its market reach
through actively supporting its current alliance partners.
Current legislation governing the South African payments industry allows for
multiple non-bank players to participate. Based on expert knowledge, well-
matched skills, and market focus, Integrear foresees a significant opportunity
for itself in the electronic payment management industry.
Management has made a firm decision to adopt a business model that ensures long-
term continuous revenue from services and software utilisation contracts.
Operational Overview
Integrear has spent significant resources on building its own software
solutions. These solutions were developed using proven technologies that are
stable, and for which a wide set of skills and experience exist in the
organisation. These business solutions are ready for deployment in the market
and should add to Integrear`s revenues in the coming financial year.
Two new products were developed and launched during the financial year under
report. The Solidus product suite that includes modules for credit application
processing, debtor account management and debt collections. The second product,
Zeus Debt Manager, is focused on Municipal debt collection. Both products are
well differentiated in the market.
Dividend
No dividend is declared.
Corporate Governance
The group is committed to the principles of sound corporate governance and is
seriously striving to comply with the requirements of the King Report on
Corporate Governance for South Africa 2002 ("King II").
Directors
Mrs Lizette du Plessis was appointed as the chairperson on 11 June 2002, and in
addition, Mr Ben Jones was appointed to the board on the same date.
By order of the board
L du Plessis TJ Hill
Chairperson Managing Director
26 September 2002
Transfer secretaries Registered office
Computershare Investor Services Limited 265 West Avenue
70 Marshall Street Centurion, 0157
Johannesburg, 2001
Auditors: Deloitte & Touche
Sponsors: Deloitte & Touche Sponsor Services (Pty) Limited
Company secretary: H J Bester
Directors
L du Plessis* (Chairperson), TJ Hill (Managing Director), BP Jones*,
GJ Oosthuizen*, LLS van der Watt*
*Non-executive
www.integrear.com
Date: 26/09/2002 05:00:02 PM Produced by the JSE SENS Department
