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Netactive Limited - Unaudited Interim Results For The Six Months Ended 31
Release Date: 20/12/2002 07:02:05 Code(s): NET
NetActive Limited - Unaudited interim results for the six months ended 31
October 2002
NetActive Limited
(Registration number 1998/006000/06)
(Incorporated in the Republic of South Africa)
("NetActive" or "the group")
ISIN: ZAE000017935
Share Code: NET
Unaudited interim results for the six months ended 31 October 2002
Income Statements
for the period ended 31 October 2002
October October April
2002 2001 2002
R`000 R`000 R`000
Continuing Operations
Loss (212) (3,579) (4,003)
Revenue 307 13,696 34,787
Cost of sales (202) (3,878) (11,171)
Gross profit 105 9,817 23,616
Operating expenses (317) (13,397) (27,619)
Discontinuing Operations
Profit/(loss) 17,735 (3,282) (3,592)
Revenue 17,710 5,099 9,079
Cost of sales (8,051) (3,760) (6,682)
Gross profit 9,659 1,338 2,397
Operating Expenses (14,950) (4,620) (5,989)
Operating loss (5,291) (3,282) (3,592)
Profit on discontinuance 23,026 - -
Sundry income - 74 245
Continuing - 74 35
Discontinuing - - 210
Net interest received 3,213 3,750 6,738
Continuing 3,213 3,750 6,770
Discontinuing - - (32)
Profit/(loss) for the period 20,736 (3,037) (612)
Earnings/(loss) per share (cents) 28.58 (2.1) (0.42)
Fully earnings diluted earnings/(loss)
per share (cents) 28.58 (1.9) (0.41)
Headline earnings/(loss)
per share (cents) (3.16) (1.8) (0.42)
Weighted average number of shares
in issue 72,548 146,530 147,130
Balance Sheets
for the period ended 31 October 2002
October October April
2002 2001 2002
R`000 R`000 R`000
Assets
Non-current assets - 7,109 6,054
Property, plant and equipment - 6,789 5,841
Intangible assets - 320 213
Current assets 84,061 76,495 59,547
Inventories 60 744 523
Trade and other receivables 18,476 2,684 10,243
Cash and cash equivalents 65,525 73,068 48,781
Total assets 84,061 83,605 65,601
Equity and liabilities
Capital and reserves 78,346 74,007 57,614
Share capital 144 312 144
Share premium 27,178 45,832 27,182
Accumulated profits 51,024 27,863 30,288
Current liabilities
Trade and other payables 5,715 9,597 7,987
Total equity and liabilities 84,061 83,605 65,601
Number of shares in issue (`000) 72,548 146,530 147,130
Net assets value per ordinary
share (cents) 108 51 80
Cash Flow Statements
for the period ended 31 October 2002
October October April
2002 2001 2002
R`000 R`000 R`000
Cash flows from operating
activities 3,619 7,650 3,124
Cash utilised by
continuing operations (2,374) (1,502) (9,459)
Cash received from customers 383 16,741 29,168
Cash paid to suppliers and
employees (2,757) (18,243) (38,627)
Cash generated by
discontinuing operations 2,780 5,402 5,845
Cash received from customers 25,455 13,783 17,743
Cash paid to suppliers and
employees (22,675) (8,381) (11,898)
Cash utilised by operations 406 3,900 (3,614)
Net interest received 3,213 3,750 6,738
Cash flows from investing
activities 13,129 (3,453) (4,401)
Additions to computer equipment - (3,453) (4,301)
Additions to Furniture - - (84)
Additions to Motor Vehicles - - (24)
Net proceeds from sale of business 13,129 - 8
Cash flows from financing activities (4) - (18,813)
Shares issued during the year - - 1
Net repurchase of ordinary shares (4) - (18,800)
Net redemption of preference shares - - (14)
Net increase (decrease) in cash and
cash equivalents 16,744 4,197 (20,090)
Cash and cash equivalents at
beginning of year 48,781 68,871 68,871
Cash and cash equivalents at
end of period 65,525 73,068 48,781
Statements of Changes in Equity
for the period ended 31 October 2002
GROUP
Share Share Accumulated
Capital Premium loss Total
R`000 R`000 R`000 R`000
Balance at 30 April 2001 312 45,832 30,900 77,044
Shares repurchased (150) (18,650) - (18,800)
Redemption of preference
shares (19) - - (19)
Shares issued during
the year 1 - - 1
Net loss for the year - - (612) (612)
Balance at 30 April 2002 144 27,182 30,288 57,614
Shares repurchased - (4) - (4)
Net profit for the period
ended 31 Oct 2002 - - 20,736 20,736
Balance at 31 October 2002 144 27,178 51,024 78,346
Notes:
The financial information has been prepared in terms of the South African
Statements of Generally Accepted Accounting Practice.
Comments
Nature of Business
NetActive disposed of its Internet Service Provider ("ISP") division to Tiscali
World Online, effective from 1 September 2002. The Disposal enables NetActive to
focus and grow within the outsourced call centre business environment through
leveraging the competencies that NetActive developed in the ISP business and
other available resources. NetActive took the decision to pursue this strategy
based on South Africa`s alignment with the rest of the world in terms of
outsourced call centre skills and expertise.
CCN was acquired from MB Technologies, effective from 1 November 2002. The
business of CCN, and the first phase of the Tiscali World Online call center
have been successfully integrated. Additional investment will be required over
the following six months to ensure that a robust platform is developed to cater
for future growth.
CCN provides outsourced customer contact centre services, specialising in the
design, implementation and operation of complex, multi-channel contact centres.
It supports the customer relationship management (CRM) strategies of many of
South Africa`s leading brands, primarily in the automotive, technology,
telecommunications, financial and consumer industry sectors. By providing
customer acquisition, customer care, technical support and helpdesk services on
an outsourced basis, CCN assist clients with attaining greater levels of
customer satisfaction and loyalty.
In light of the transaction with Tiscali World Online, and as approved by the
shareholders of NetActive Limited in annual general meeting, the name of the
company will change to CCN Holdings Limited.
CCN Holdings Limited, currently operates two trading divisions, namely Call
Centre Nucleus ("CCN") and NetFlorist.
NetFlorist has successfully established itself in the South African retailing
environment, providing a multi-channel Internet-based retail ordering and
delivery mechanism for flowers and gifts both in South Africa and abroad.
Operational Review
The business has operated in a difficult trading environment in the last period.
There has been a global slowdown on corporate spend on IT and Internet related
services. The economic recession has affected businesses operating in our target
market, which impacts on their ability to invest in systems and infrastructure
for future growth. The disposal of the ISP division was effective on 1 September
2002. Management devoted a significant amount of time and effort to ensure the
successful transition of this transaction. As a result of this transaction,
Larry Paslovsky has resigned from the board of directors, in order to join
Tiscali World Online.
NetFlorist has continued to grow its client base and its brand. It is currently
operating at above breakeven levels, and is continuing to improve its
profitability. No significant offers have been received for the NetFlorist
division. Although NetFlorist is still disclosed as a discontinuing operation,
the value of the business is improving, and it will continue to receive the
group`s support.
Financial review
A net profit amounting to R20,7m was incurred for the period, after recognising
Interest income of R3,2m. A profit of R17,7m was incurred from discontinuing
operations, which includes a loss primarily from the ISP division of R5,3m and a
profit on the disposal of the ISP division sold to Tiscali World Online. This
profit on disposal, amounting to R23m is calculated after the write off of the
net book value of the assets sold to Tiscali World Online, and the costs
specifically associated with the transaction.
Continuing operations consisting primarily of the outsourced contact centre
division, operated at a loss of R0,2m. The losses from the outsourced contact
centre division are expected to increase over the next reporting period until
critical mass is achieved. The implementation of the second phase of the contact
services with Tiscali World Online, will be implemented primarily from May 2003.
The balance sheet is sound, with no interest bearing debt. The most significant
movements in the cash balances over the past 12 moths were the share repurchase
in April 2002, utilising R18,8m, and the funds received to date in terms of the
disposal of the ISP to Tiscali World Online, amounting to R15,9m.
Other Issues
Resolution of the amounts due in terms of the agreement between M-Web and
NetActive has not been achieved, despite considerable time and effort being
invested to resolve this. There are significant claims being made by both
companies. The dispute resolution procedures of the agreement are currently
being invoked, and the matter will be referred to arbitration in order to
finalise this dispute.
Prospects
The prospects for the group remain positive. The acquisition of CCN has provided
an excellent platform and strong industry specific skills from which the company
can develop its outsourced call centre business. The benefits of the investments
made are expected to be realised over the medium term.
For and on behalf of the board
IAN STURROCK LAWRENCE BRICK
Chairman Chief Executive Officer
20 December 2002
TRANSFER SECRETARIES
Computershare Investor Services (Pty) Ltd, 2nd Floor Edura House, 41 Fox Street,
Johannesburg 2001
REGISTERED OFFICE
Block C, Sandhavon Office Park, 18 Pongola Crescent, Sandton.
DIRECTORS
DIRECTORS: L BRICK (CEO), PH BACHER, JA HACKNER, H ROSTOWSKY*, I STURROCK**.
*NON-EXECUTIVE ** NON-EXECUTIVE CHAIRMAN
COMPANY SECRETARY: K JAMBELA
Date: 20/12/2002 07:02:00 AM Produced by the JSE SENS Department
