| Mon 24 Feb 2003, 17:43 | | DigiCore - INTERIM RESULTS FOR THE SIX MONTHS ENDE |
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DIGICORE HOLDINGS LIMITED
Registration Number 1998/012601/06
Share Code: DGC
ISIN: ZAE000016945
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2002
COMMENTS
The directors of DigiCore Holdings Limited are pleased to announce the company`s
interim results for the six months ended 31 December 2002.
NATURE OF BUSINESS
The business of the DigiCore group is to provide telematic solutions to
disseminate pertinent management information for its customers, both commercial
and industrial, for the efficient and effective management of mobile assets such
as vehicles and their cargo for logistic and security purposes, using cutting-
edge information technology. The group uses its vast intellectual property base
to design and manufacture a range of on-board mobile computers and software for
this purpose.
FINANCIAL OVERVIEW
Operating profit before depreciation increased slightly to R15,1 million
although revenue decreased compared with the same period in 2001. This can be
attributed to a comprehensive cost review orchestrated by DigiCore and Nashua
Mobile for certain major customers, particularly relating to cellular usage.
Consequently, higher margins were achieved on the total spectrum of our products
and services.
Depreciation was 37% lower at R2,3 million as all capitalised development costs
were depreciated fully during the previous financial year. Net operating profit
increased by 15,7% to R12,1 million.
Due to heightened marketing initiatives followed by a downturn in economic
activity, DigiCore Europe made a small loss for the period. Our share of the
loss amounted to R278 000. The business has since returned to profitability.
Headline earnings per share remained constant at 4.1 cents. No dividend will be
declared at the interim stage.
Operating efficiencies flowing through from the centralisation of the accounting
department and the use of an ERP system resulted in a decrease in debtors and
creditors levels. Stricter credit control procedures have also been implemented
during the last year.
Cash on hand rose to R23,1 million. The net tangible asset value grew from 34.7
cents to 38.9 cents a share, where cash on hand represents 9.7 cents per share
as at 31 December 2002.
CURRENT STATUS OF BUSINESS
The proper strategies, financial and operational structures are now in place.
Although the results for the past six months were important, the emphasis was,
by and large, on the long-term viability and growth of the company. With the
continuing expansion of our international business, we anticipate continued
growth coupled with a diminishing influence of local market fluctuations as was
the case in the past.
The roles of certain executives have been refined in support of group strategy
and to ensure that all critical areas receive continued attention. In future,
the executive deputy chairman will concentrate on the local market as well as
the introduction of new technology and products, where his knowledge of the
domestic market and its needs will play an important role in developing
additional market segments.
The group managing director will focus on gaining international business,
managing the debis account, as well as the cellular division. This should ensure
the successful establishment of more international markets in the medium term.
Much time and effort were dedicated to training and developing our staff. A
profit share scheme was initiated to give staff members increasing ownership of
the business.
We remain the undisputed leader in the on-board fleet management arena, having
maintained our 70% share of the local market throughout the period. Having
recently strengthened the sales and marketing division, we are confident that
our market coverage can be increased even further.
As research and development remains a priority in our organisation, our resource
base has been further strengthened during the past eight months. With our new
technology platform internationally accredited, the focus is now foremost on
meeting customer and international market requirements. Easily adaptable, the
latest technology platform is also more responsive to changing market and
customer requirements.
A range of innovative products will be launched towards the second half of the
financial year, illustrating our collective development experience. Not only
will the re-engineered line secure continued world technology leadership, but
the launch should also boost sales later in the financial year.
Our solid cash position will support steady organic growth in the medium term.
4. THE FUTURE
As a credible and sizeable organisation in our industry, supported by a dynamic
economic empowerment partner, the pace of doing business with government and
quasi-government organisations should accelerate. The opportunity for government
to enhance its services to the public by monitoring its fleet has created a
certain need for our technology solutions in most state departments.
A revolutionary `track-and-trace` product has been pioneered in conjunction with
one of the major vehicle recovery companies in South Africa, and will be
launched towards our June year end. The annuity income derived from this source
should be considerable in the long term.
We are also developing a more cost-effective product for the service industry
and light commercial vehicle market. This has the potential to penetrate a large
market, estimated to be over 50 million vehicles worldwide.
Annuity income, as a portion of total turnover, will continue to grow in coming
years from our cellular division; software licence fees; service and product
maintenance agreements; as well as bureau services.
INCOME STATEMENT
Six months Six months Year
R`000 ended ended ended
31/12/2002 31/12/2001 30/6/2002
Unaudited Unaudited Audited
Revenue 80,441 92,060 193,671
Operating profit before 15,074 14,788 3,635
depreciation
Depreciation 2,325 3,688 5,825
Amortisation of goodwill 613 613 1,217
Net operating profit 12,136 10,487 16,593
Net finance (cost) / income (733) 227 (2,127)
Equity (loss) / income in (278) 377 (212)
associate company
Profit before tax 11,125 11,091 14,254
Taxation 2,002 1,908 1,051
Profit after taxation 9,123 9,183 13,203
Attributable to outside - 29 47
shareholders
Earnings attributable to 9,123 9,212 13,250
ordinary shareholders
Statistics
Number of shares in issue
(000`s)
- end of period 239256 239256 239256
- weighted average 237010 237010 237010
Headline earnings per share 4.1 4.1 7.2
(cents)
Earnings per share (cents) 3.8 3.9 5.5
EBITDA % 18.7% 16.1% 12.2%
RECONCILIATION BETWEEN EARNINGS AND HEADLINE EARNINGS
R`000
Six months Six months Year
ended ended ended
31/12/2002 31/12/2001 30/6/2002
Unaudited Unaudited Audited
Attributable earnings 9,123 9,212 13,250
Amortisation of goodwill 613 613 1,218
Impairment loss on loan 0 0 2,691
Headline Earnings 9,736 9,825 17,159
BALANCE SHEET
R`000 As at As at As at
31-Dec-02 30-Jun- 31-Dec-01
02
Unaudited Audited Unaudited
ASSETS
Non-current assets 42,859 42,061 44,344
Property, plant and equipment 12,160 10,150 7,979
Intangible assets 22,081 23,015 24,459
Investments 4,136 4,414 5,306
Deferred tax 574 574 0
Loans receivable 3,908 3,908 6,600
Current assets 89,059 91,418 78,747
Inventories 32,282 27,591 24,397
Trade receivables 33,711 43,543 46,554
Bank balances 23,066 20,284 7,796
TOTAL ASSETS 131,918 133,479 123,091
EQUITY AND LIABILITIES
Capital and reserves 114,294 105,171 101,846
Issued capital 36,131 36,131 36,826
Minority interest in 0 18 36
subsidiaries
Distributable reserve 78,163 69,022 64,984
Non-current liabilities 2,132 309 818
Long term liabilities 2,132 309 654
Deferred taxation 0 0 164
Current liabilites 15,492 27,999 20,427
Taxation -2,564 -2,331 1,035
Trade payables 17,895 30,012 19,087
Current portion of long term 161 318 305
liabilities
TOTAL EQUITY AND LIABILITIES 131,918 133,479 123,091
Net asset value per share 48.2 44.4 42.9
Tangible asset value per share 38.9 34.7 32.7
STATEMENT OF CHANGES TO EQUITY
R`000
Share Share Minority Distributab Total
le
capital premium Interest Reserve
Balance as at 1 237 35,894 18 69,022 105,171
July 2002
Net profit for 0 0 0 9,123 9,123
the period
Change in -18 18 0
minority interest
Balance as at 31 237 35,894 0 78,163 114,294
December 2002
SUMMARISED CASH FLOW STATEMENT
R`000 Six months Six months Year
ended ended ended
31/12/2002 31/12/2001 30/6/2002
Unaudited Unaudited Audited
Cash generated by operations 7,935 3,619 21,091
Net financing income / (cost) (733) 227 (2,129)
Taxation paid (2,235) (8,345) (11,591)
Cash flow from operating 4,967 (4,499) 7,371
activities
Cash flow from investing (3,851) (3,646) (5,388)
activities
Cash flow from financing 1,666 (2,191) 169
activities
Net movement in cash resources 2,782 (10,336) 2,152
Cash & cash equivalanents at 20,284 18,132 18,132
beginning of period
Cash & cash equivalanents at 23,066 7,796 20,284
end of period
PREPARATION OF RESULTS
The accounting policies used in the preparation of these financial statements
are consistent with those used in the annual financial statements for the year
ended 30 June 2002 and are in all material respects in accordance with the South
African Statements of Generally Accepted Accounting Practice.
REGISTERED ADDRESS
20 Eddington Crescent, Highveld Park, Centurion
Tel: (012) 665-7300
Fax: (012) 665-5376
TRANSFER SECRETARY
Computershare Investor Services Limited
70 Marshall Street, Johannesburg, 2001
(PO Box 1053, Johannesburg, 2000)
DIRECTORS
BP Vundla (Chairman)*, NH Vlok (Deputy Chairman), Dr LE Truter (Managing), SR
Aberdein, FW Britz, D Du Rand, BJ Richards+, KR Stanton, JJ Du Plooy*, NA Gasa*,
U Khumalo*
SA Msibi*, AND Vilakazi*, N Ntsele* **
* Non-executive
** Alternate
+ British
COMPANY SECRETARY
FW Britz
WEBSITE
www.digicore.com
Date: 24/02/2003 05:15:00 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
