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Ist Group Limited - Reviewed interim Results for the 6 months ended 31 August
2002
Ist Group Limited
Reg no. 1998/011521/06
ISIN: ZAE000015798
Share code: IST
Reviewed interim Results for the 6 months ended 31 August 2002
* Headline eps (fully diluted) increased by 56%
* All operations contribute to strong performance
* Strategic alliance concluded with GE Power Systems
CONSOLIDATED INCOME STATEMENT
6 Months to 6 Months to Year to
31 Aug 31 Aug 28 Feb
2002 % 2001 2002
R000 Reviewed Change Unaudited Audited
Revenue 145 174 3.7 140 009 279 257
- From
continuing
operations 144 209 138 634 276 277
- From
discontinued
operations - 1 092 2 403
Other operating
income 965 283 577
Cost of sales 76 195 78 702 143 285
Gross profit 68 979 61 307 135 972
Selling,
administration
expenses and
salaries 44 970 46 216 106 191
Earnings before
financing costs,
taxation,
depreciation and
amortisation
("EBITDA") 24 009 59.1 15 091 29 781
Depreciation and
amortisation
expenses 3 018 2 906 6 349
Operating profit 20 991 72.3 12 185 23 432
Interest received 1 803 1 608 3 829
Profit before
financing costs 22 794 13 793 27 261
Financing costs (1 133) 612 5 218
Share of results
of associates - 350 350
Exceptional item (4 799) - -
Profit before
taxation 16 862 14.3 14 755 32 829
Taxation (6 428) (4 435) (9 622)
Profit after
taxation 10 434 10 320 23 207
Attributable to
outside
shareholders (1 057) (866) (1 753)
Earnings 9 377 9 454 21 454
Calculation of
Headline Earnings
Earnings 9 377 9 454 21 454
Foreign debt
written-off 4 799 - -
Amortisation of
goodwill 10 20 60
14 186 49.7 9 474 21 514
Earnings per
consolidated share
(cents)
- Basic 7.8 8.3 7.2 17.0
- Diluted 6.3 3.3 6.1 14.2
Headline earnings per
consolidated share
(cents)
- Basic 11.7 62.5 7.2 17.0
- Diluted 9.5 55.7 6.1 14.2
Shares in issue
Consolidated issued
shares (000) 120 687 131 686 126 286
Fully diluted
shares (000) 150 026 155 292 151 545
Net asset value
per consolidated
share (cents) 92.1 81.8 85.8
Tangible net asset
value per
consolidated share
(cents) 91.4 80.0 84.8
CONSOLIDATED CASH FLOW STATEMENT
6 Months to 6 Months to Year to
31 Aug 31 Aug 28 Feb
2002 2001 2002
R000 Reviewed Unaudited Audited
Cash flows from
operating activities
Cash receipts
from customers 164 192 139 908 278 975
Cash paid to suppliers
and employees (137 832) (110 895) (236 470)
Net cash inflow
from operating
activities 26 360 29 013 42 505
Interest received 2 364 2 287 4 898
Interest paid (930) (1 019) (1 659) Dividends paid to
group shareholders (7 473) (2 894) (2 894)
Tax paid (4 803) (5 393) (6 812)
Net cash flow from
operating activities 15 518 21 994 36 038
Cash flows from
investing activities
Purchase of property,
plant and equipment (5 325) (4 706) (6 272)
Purchase of non-current
investments (13) (179) (13)
Disposal of property -
plant and equipment 116 80 190
Repayment from associate - - 4 228
Net cash (outflow)
/inflow from
investing activities (5 222) (4 805) (1 867)
Cash flows from
financing activities
Purchase of treasury
shares - - (11 877)
Proceeds from staff
share options 899 - -
Proceeds from long-term
borrowings (1 396) (785) (208)
Net cash outflow from
financing activities (497) (785) (12 085)
Net increase/(decrease)
in cash and cash
equivalents 9 799 16 404 22 086
Cash and cash equivalents
at beginning of year 53 851 28 199 27 998
Effects of exchange
rate changes (27) 891 3 767
Cash and cash equivalents
at end of period 63 623 45 494 53 851
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
6 Months to 6 Months to Year to
31 Aug 31 Aug 28 Feb
2002 2001 2002
R000 Reviewed Unaudited Audited
Share capital 1 207 1 326 1 181
Balance at beginning
of year 1 181 1 313 1 313
Issue of share capital -
capitalisation issue - 13 13
Exercise of staff share
options 26 - -
Shares repurchased and
cancelled i.t.o.
general authority - - (110)
Shares repurchased
not cancelled
i.t.o. general
authority - - (35)
Share premium 74 472 85 331 73 599
Balance at beginning
of year 73 599 84 299 84 299
Exercise of staff
share options 873 - -
Issue of share capital
- capitalisation issue - 1 032 1 032
Repurchase and cancellation
i.t.o general authority - - (11 732)
Non-distributable reserves 2 358 -
Balance at beginning of year - 500 500
Currency translation
differences 2 392 150
Disposal on associate - (533) (533)
Transfer (to)/from
retained earnings - - (117)
Retained earnings 35 520 21 500 33 617
Balance at beginning
of year 33 617 11 513 11 513
Net profit 9 377 9 454 21 454
Ordinary dividends (7 617) - -
Share purchase trust
dividends 143 - -
Profit of associate - 533 533
Transfer from/(to)
non-distributable
reserves - - 117
Ordinary shareholders`
equity at end of
period 111 201 108 515 108 397
CONSOLIDATED BALANCE SHEET
At At At
31 Aug 2002 31 Aug 2001 28 Feb 2002
R000 Reviewed Unaudited Audited
ASSETS
Non-current assets 41 010 48 710 44 328
Property, plant and
equipment 37 022 35 192 34 369
Intangible assets 911 2 461 1 367
Investment in associate - 4 228 -
Non-current receivables 3 077 6 829 8 592
Current assets 152 146 121 293 133 283
Inventories 33 557 26 429 29 027
Trade and other
receivables 54 967 49 370 50 405
Cash and cash
equivalents 63 622 45 494 53 851
Total Assets 193 156 170 003 177 611
EQUITY AND LIABILITIES
Capital and reserves 111 201 108 515 108 397
Share capital 1 207 1 326 1 181
Share premium 74 472 85 331 73 599
Non-distributable
reserves 2 358 -
Retained earnings 35 520 21 500 33 617
Minority interest 3 155 1 211 2 098
Non-current liabilities 5 078 5 885 6 066
Interest-bearing
borrowings 2 283 2 984 3 394
Deferred tax
liabilities 2 795 2 901 2 672
Current liabilities 73 722 54 392 61 050
Trade payables and
other liabilities 46 623 37 123 45 284
Advance receipts 18 061 13 602 7 947
Current tax
liabilities 6 381 892 4 877
Ordinary dividend
declared 1 1 1
Current portion of
interest-bearing
borrowings 2 656 2 775 2 941
Total equity and
liabilities 193 156 170 003 177 611
COMMENTS
Review of results
Trading conditions in IST`s markets, particularly the telecoms sector, remained
difficult in the period under review, but the group nevertheless again succeeded
in achieving a significant performance improvement. While turnover grew only
marginally to R145.2 million, earnings before financing costs, taxation,
depreciation and amortisation (EBITDA) increased by 59.1% to R24 million and
operating profit by 72.3% to R21 million. Headline earnings per consolidated
share, fully diluted, rose by 56% to 9.5 cents. The increase in the tax charge
for the period is attributable to the STC due on the dividend declared and paid
in May this year.
The group`s balance sheet remained robust and cash reserves grew to R63.6
million from R45.5 million at the interim stage last year. The tangible net
asset value per share increased to 91.4 cents from 84.8 cents as at the previous
year-end on 28 February 2002.
The provision for the write-off of foreign debt is related to the sale of the
group`s North American guided parachute business in 2000. The terms of the sale
required repayment of long-term debt owed to IST by these former subsidiaries.
The businesses are now in difficulties and, while the group will pursue its
recovery vigorously, it has been deemed prudent to provide for the outstanding
balance of the debt.
Review of operations
All the group`s operations contributed to the satisfactory results for the half-
year. Notable highlights were:
- The conclusion of an agreement in terms of which IST Energy will assemble
and distribute GE Power Systems` substation control products in Southern Africa.
- IST Otokon`s first appointments as an energy service company (to AngloGold
and Samancor) in terms of Eskom`s recently introduced demand-side management
initiative.
- The R50 million turnkey contract awarded to IST Industrial for the
upgrading and expansion of the compressed air system at the Hillside aluminium
smelter.
- The renewal by Telkom of IST Telecom`s contract to supply and support its
UMC 1000 access multiplexers.
Dividend
It is IST`s policy to consider dividend payments at the end of its financial
year.
Accounting policy and practice
The accounting policies and methods of computation applied are consistent with
those applied in the financial statements for the year ended 28 February 2002
and are in compliance with SA Statements of Generally Accepted Accounting
Practice and the SA Companies Act.
REVIEW BY INDEPENDENT AUDITORS
The financial information set out in this announcement has been reviewed, but
not audited, by PricewaterhouseCoopers, whose review reports are available for
inspection at the company`s registered office.
Prospects
Trading conditions are not expected to improve in the second half of the year
and the group`s defence-sector market in the Middle East may be affected if the
threat of military action against Iraq becomes a reality. However, all IST`s
divisions expect to sustain their strong performance and, barring a major
deterioration in its operating environment, the group is well placed to improve
on last year`s performance.
Gary Morolo Harry Coetzee
Chairman Chief Executive
Pretoria
3 October 2002
IST GROUP LIMITED
Directors:
G Morolo* (Chairman), L Robertson* (Deputy Chairman),
H Coetzee (Group CEO), J Blignaut*, N Kuper-Cohen*,
P Flack*, A Moffat*, T Steyn, E Toerien, J Visagie
*Non-executive directors
(P van Niekerk was not available for re-election)
Transfer secretaries:
Computershare Investor Services Limited, 70 Marshall Street, Johannesburg 2001
Registered office:
IST Building, 221 Garstfontein Road, Menlyn, Pretoria, 0145
Tel: +27 12 426 7200 * Fax: +27 12 348 9472
E-mail: ist@ist.co.za * www.istltd.com
Stakeholder and media relations:
For further information contact Kathy du Plessis at
Tel: +27 11 728 4701 * Fax: +27 11 728 2547 * e-mail: ist@dpapr.com
Date: 03/10/2002 10:00:35 AM Produced by the JSE SENS Department
Ist Sustains Strong Performance With Interim Earnings Surge
Ist Sustains Strong Performance With Interim Earnings Surge
Ist Group Limited
Reg no. 1998/011521/06
ISIN: ZAE000015798
Share code: IST
For further information, please contact
Harry Coetzee Etienne Toerien
Chief Executive Financial Director
012-426-7300 012-426-7400
or 082-881-9255 or 083-305-5737
IST SUSTAINS STRONG PERFORMANCE WITH INTERIM EARNINGS SURGE
Pretoria, 3 October 2002 - The technology group IST today posted a 56% headline
earnings per share improvement at the halfway mark to maintain its high
performance rate of recent years.
Results for the six months to August show operating profit up by 72.3% to R21
million on revenues which increased marginally to R145.2 million. Fully diluted
headline earnings per share grew from 6.1 cents to 9.5 cents. The group`s
balance sheet remained solid and cash reserves increased to R63.6 million from
R45.5 million at last year`s interim stage.
Chief executive Harry Coetzee said all the group`s operations had contributed
positively to these results, which were achieved in tough trading conditions,
notably in the telecoms sector. While market conditions were not expected to
ease in the latter half of the year to February 2003, the group was well set to
improve on its 2002 performance.
Operational highlights of the year to date include the recently finalised deal
in terms of which IST Energy will assemble and distribute GE Power Systems`
substation control products in Southern Africa. Coetzee said this marked a
major advance in IST Energy`s drive to be a provider of world-class products for
the automation and protection sectors of the electricity supply industry.
Another significant development was IST Otokon`s appointment as an energy
service company (ESCO) to AngloGold and Samancor under the auspices of Eskom`s
recently introduced Demand Side Management initiative (DSM). The first IST
Otokon DSM projects will impact significantly on the DSM goal of peak load
reduction, contributing a total of 16.5MW load reduction. IST Otokon received
the go-ahead for these projects after the DSM funding capital budget was
approved in September 2002.
Issued by du Plessis Associates on behalf of IST Group.
dPA contact: Kathy du Plessis on tel:011-728-4701,
fax:011-728 2547, mobile:083 266 5847 or e-mail: ist@dpapr.com
The full results are available on the company`s web site at www.istltd.com
Date: 03/10/2002 10:01:01 AM Produced by the JSE SENS Department
Ist Group Limited - Ist Stakeholders
IST GROUP LIMITED - IST STAKEHOLDERS
IST Group Limited
Reg no. 1998/011521/06
ISIN: ZAE000015798
Share code: IST
3 October 2002
Dear IST stakeholder
As you will no doubt have seen by now, the IST group succeeded in producing
highly satisfactory results for the six months to August. (A copy of the full
results announcement is enclosed for your information.) Market conditions
remained tough, particularly in the telecoms sector, but we nevertheless managed
to improve our operating profit by 72.3% and fully diluted headline earnings per
share by 56%. It is particularly pleasing to be able to report that the steady
performance improvement which started in 2000 is being sustained, and that we
are confident of doing well again in the full year to February 2003.
Global giant to partner IST Energy
I indicated in my last letter to you that an alliance was being concluded
between IST Energy and one of the world leaders in power engineering. Earlier
this week, we were finally able to announce the details of the deal in terms of
which IST Energy will assemble, distribute and support GE Power Systems`
substation control products in Southern Africa. This will enable IST Energy to
offer the local market the latest international technology, backed by on-the-
spot support, and marks a major advance in its drive to be a provider of world-
class product-based solutions to the automation and protection sectors of the
electricity supply industry. It is worth noting that IST already has strong
links with GE through the Smallworld spatial planning system, for which IST Data
is the Southern African distributor.
First DSM appointments for IST Otokon
Eskom recently launched a Demand Side Management (DSM) initiative, designed to
change the current load shape of electricity usage in South Africa by shifting
or reducing consumption peaks. The initiative involves a partnership with
energy service companies (ESCOs) who will be responsible for identifying, and in
due course implementing, appropriate DSM projects with a significant impact on
peak load reduction. IST Otokon has since been appointed as ESCO to AngloGold
(Vaal River and West Wits) and Samancor (Meyerton Works) and Eskom has approved
the capital expenditure for IST Otokon`s first two DSM projects, for a total of
16.5 MW load reduction. The DSM funding budget has been approved by the Eskom
Management Board and IST Otokon has been instructed to start with the
implementation of its first DSM projects. This appointment further strengthens
IST Otokon`s position in becoming the preferred choice supplier of energy
information solutions in Southern Africa.
A final farewell to Petroman
In July IST handed over the last of the Petroman systems to its owner, in this
case Namdeb. This brought to a final end the difficult two-year period in which
this problem-child product had to be not so much fixed as reinvented. In a
letter to IST confirming their take-over of the system, Namdeb wrote: "Namdeb
would like to congratulate IST on the successful completion of the project, and
thank IST for going the extra mile in ensuring the final delivery of a quality
product." On balance, this is not a bad epilogue for
the Petroman saga - and a welcome tribute to the commitment of the IST team.
Parachute provision
While Petroman is now safely behind us, another legacy from IST`s past is not
quite dead and buried yet. You may recall that when the current management took
over at IST they concluded that the group`s North American guided-parachute
business was not viable and it was consequently disposed of. The business is
now in difficulty and we have deemed it prudent to make a provision for the
outstanding balance of the debt owed to IST. We will nevertheless make every
effort to secure the repayment thereof.
JSE sector change-back
Following a brief sojourn in Software and Computer, IST has been moved back to
the Electronics sector
of the JSE Securities Exchange South Africa. Our thanks to the JSE for
responding promptly to our request for recategorisation.
Harry Coetzee
Chief Executive
Date: 03/10/2002 10:02:02 AM Produced by the JSE SENS Department
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