| Wed 5 Mar 2003, 17:34 | | Intervid Ltd - Interim report for the half year en |
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INTERVID LIMITED
Registration Number: 1999/011483/06
Share code: ITV
ISIN: ZAE000025615
Interim report for the half year ended 31 December 2002
Consolidated income statement for the six months ended 31 December 2002
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2002 2001 2002
(Reviewed) (Restated) (Restated)
R000`s R000`s R000`s
Gross revenue 282 651 43 850 161 323
Turnover 277 956 33 322 141 321
Interest received 4 695 10 528 18 217
Liquidation proceeds - - 1 785
Operating loss from (24 605) (35 883) (71 018)
operating activities before
forex gains, depreciation,
amortisation, interest paid
and taxation
Foreign exchange 10 541 (5 837) 30 433
gains/(loss)
Depreciation (5 378) (2 105) (6 596)
Amortisation (16 919) (3 315) (14 029)
Loss before interest paid (36 361) (47 140) (61 210)
Interest paid (3 081) (1 434) (3 585)
Loss before taxation (39 442) (48 574) (64 795)
Taxation 3 148 13 089 16 253
Loss after taxation (36 294) (35 485) (48 542)
Net loss attributable to 1 5 10
minority shareholders of
subsidiaries
Net loss for the period (36 293) (35 480) (48 532)
Weighted average number of 92 466 91 575 91 728
shares in issue
Loss per share - cents (39.3) (38.7) (52.9)
Headline loss per share - (23.0) (35.7) (44.8)
cents
Diluted loss per share - (39.3) (38.7) (52.9)
cents
Reconciliation of headline
loss:
Net loss for the period (36 293) (35 480) (48 532)
Impairment of assets 89 - -
Loss on sale of plant and 1 660 28 115
equipment
Goodwill amortisation 13 292 2 718 7 321
Headline loss (21 252) (32 734) (41 096)
Consolidated balance sheet as at 31 December 2002
31 December 31 December 30 June
2002 2001 2002
(Reviewed) (Restated) (Restated)
R000`s R000`s R000`s
Assets
Non-current assets 161 382 104 922 177 133
Property, plant and 39 780 27 098 37 558
equipment
Loans to share trusts 4 865 13 544 4 913
Long-term receivables 172 483 557
Goodwill 77 268 31 396 101 341
Intangibles 17 369 16 919 18 267
Deferred tax asset 21 928 15 482 14 497
Current assets 501 090 623 259 594 035
Inventories 66 782 20 398 42 282
Contracts in progress 2 030 7 986 14 799
Trade and other receivables 132 698 34 322 85 156
Taxation 2 198 - 6 342
Cash and cash equivalents 297 382 560 553 445 456
Total assets 662 472 728 181 771 168
Equity and liabilities
Capital and reserves 409 444 626 111 518 323
Share capital and premium 27 189 25 277 27 189
Non-distributable reserves 455 497 455
Foreign currency translation 29 272 197 120 101 857
reserves
Equity portion of 394 121 394 121 394 121
convertible loan
Accumulated (loss)/profit (41 592) 9 096 (5 299)
Minority shareholders` 56 62 57
interest
Non-current liabilities 31 430 24 504 24 851
Deferred tax liability 6 899 - 2 103
Long-term liabilities : 19 135 17 956 5 709
interest bearing
Long-term liabilities : non- 5 396 6 548 17 039
interest bearing
Current liabilities 221 541 77 504 227 938
Short-term borrowings 66 869 26 639 86 533
Trade and other payables 118 313 38 275 133 989
Taxation 11 765 1 297 3 907
Provisions 5 802 11 293 2 562
Bank overdraft 18 792 - 946
Total equity and liabilities 662 472 728 181 771 168
Number of ordinary shares in
issue at end of period 92 920 91 774 92 222
Net asset value per ordinary 441 682 562
share - cents
Abridged consolidated cashflow for the six months ended 31 December 2002
31 December 31 December 30 June
2002 2001 2002
(Reviewed) (Restated) (Restated)
R000`s R000`s R000`s
Earnings before interest (14 064) (44 259) (33 794)
paid, tax, depreciation and
amortisation
Loss on disposal of assets 1 798 28 128
Working capital movements (73 778) 21 426 28 905
Net company tax paid 8 371 2 080 2 137
Interest paid (3 081) (1 434) (3 585)
Net cash flows from (80 754) (22 159) (6 209)
operating activities
Net cash flows from (18 182) (28 195) (56 123)
investing activities
Net cash flows from (11 668) 1 116 971
financing activities
Net movements in cash and (110 604) (49 238) (61 361)
cash equivalents for the
year
Effect of exchange rate (55 315) 194 643 117 361
movement
Cash and cash equivalents at 444 510 388 510 388 510
beginning of period
Cash and cash equivalents at 278 591 533 915 444 510
end of period
Changes in Group Equity
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2002 2001 2002
(Reviewed) (Restated) (Restated)
R000`s R000`s R000`s
Opening balance 518 322 456 542 456 542
Issue of shares - 2 779 4 731
Share issue expenses written - - (40)
off
Currency translation reserve (72 585) 202 270 105 622
Net loss for the period (36 293) (35 480) (48 532)
Closing balance 409 444 626 111 518 323
Segmental Report
For the six
months ended
31 December Inter-segment
2002 consolidation
(Reviewed) Consolidated adjustments Africa Australasia
R000`s R000`s R000`s R000`s R000`s
Revenue 277 956 (37 446) 63 264 11 097
Operating (27 763) (3 609) 820 (596)
results
Segment 640 544 (188 161) 92 709 14 767
assets
Segment (246 073) (9 746) (71 233) (1 722)
liabilities
Capital
commitments
- contracted 1 032
for
- not -
contracted
for
Segmental Report
For the six months ended
31 December 2002 United North Middle
(Reviewed) Kingdom America East Switzerland
R000`s R000`s R000`s R000`s R000`s
Revenue 183 420 27 229 1 931 28 461
Operating results (3 672) (17 814) (3 381) 489
Segment assets 179 404 51 190 10 784 479 850
Segment liabilities (138 658) (18 375) (1 089) (5 250)
Capital commitments
- contracted for 1 032
- not contracted -
for
For the six
months ended
31 December Inter-segment
2001 consolidation
(Restated) Consolidated adjustments Africa Australasia
R000`s R000`s R000`s R000`s R000`s
Revenue 43 850 (14 921) 20 658 5 880
Operating (54 950) (25 728) (21 457) (2 386)
results
Segment 712 698 35 184 88 771 3 379
assets
Segment (102 007) 8 761 (54 730) (4 435)
liabilities
Capital
commitments
- contracted -
for
- not 95 812
contracted
for
For the six months ended
31 December 2001 United North Middle
(Restated) Kingdom America East Switzerland
R000`s R000`s R000`s R000`s R000`s
Revenue - 15 310 165 16 758
Operating results (10 246) (4 360) (3 036) 12 263
Segment assets 23 003 15 883 3 878 542 601
Segment liabilities (789) (34 266) (6 855) (9 693)
Capital commitments
- contracted for -
- not contracted for 95 812
Notes
1. Basis of Preparation
This report has been prepared on the historical cost basis in accordance with
South African Statements of Generally Accepted Accounting Practice.
2. Accounting Policies
With the exception of the change in accounting policy referred to in note 3, all
accounting policies used in the preparation of the interim report are consistent
with those applied in the annual financial statements dated 30 June 2002. This
interim financial report complies in all material respects with AC 127 Interim
Financial Reporting.
3. Change in Accounting Policy
During the period the Group changed its accounting policy with respect to the
treatment of outside shareholders to comply with AC433 which is effective for
all financial years commencing on or after 1 January 2002. In previous financial
periods RFS Holdings Limited qualified as a minority shareholder and their share
(30%) of the net profit and losses of Intervid International Group was allocated
to outside shareholders` interest on the balance sheet. Group net profit and
losses now include 100% of Intervid International Group`s profit and losses.
The effect of this change is as follows:
Outside
R 000`s Gross Taxation Shareholders` Net
Interest
Increase in net
loss
31 December 2002 - - (11 484) (11 484)
30 June 2002 - - (3 788) (3 788)
31 December 2001 - - (6 070) (6 070)
Restatement of
opening retained
earnings in respect of
prior year adjustment
31 December 2002 - - 1 474 1 474
30 June 2002 - - 5 262 5 262
4. Headline Earnings
Headline earnings have been calculated in accordance with Circular 7 issued in
December 2002. This has the impact of removing the add-back of the impairment of
loans (R8,576 million) for the 12 months ended 30 June 2002, thereby increasing
the headline loss per share for that period by 9,3c.
5. Dividends
No dividend has been recommended or declared for the half-year ended 31 December
2002.
6. Contingent Liabilities
Changes to contingent liabilities since 30 June 2002 are reflected below.
The company has guaranteed the overdraft facilities of certain subsidiaries
amounting to R600 000 down from R3 500 000 as at 30 June 2002.
The guarantee relating to repurchases should the customer default on payment has
been reduced from R1 771 000 as at June 2002 to R359 297.
Intervid International`s tax status has been confirmed as that of a holding
company and thus the contingency of R2 552 000 that existed at 30 June 2002 no
longer exists.
Commentary
Operating and Trading Review
Intervid is a global company that delivers leading integrated digital solutions
and managed services. Intervid partners with customers to secure and manage
their people, processes and assets thereby reducing costs, enhancing efficiency
and driving profit.
During the six months to December 2002 Intervid has continued in executing its
international growth strategy. This has required continued investment in
administration support and sales infrastructure. This investment has resulted in
a very satisfactory improvement in sales in all operating regions. Intervid`s
international operations contributed 80.5% to Group revenue with the primary
growth area being the United Kingdom. The negative impact of the international
expansion on the South African operation as previously reported has been
addressed and this operation has regained a strong trading position.
Intervid`s research and development team recently launched a parking and revenue
control system. This is an automated online system that can satisfy extensive
requirements for effective parking facility management. An updated surveillance
system has also been developed. This system is a market leader in surveillance
technology with a core suite of business solutions software and advanced modules
allowing for people counting and license plate recognition. These are just two
examples of Intervid`s success in keeping abreast of technology.
Key Financial Issues
* Turnover for the six months increased 734% over the comparative interim
period and 97% over the full year to 30 June 2002.
* A loss from operating activities of R24,6 million was incurred.
* Earnings before interest paid, tax, depreciation and amortisation reflected a
loss of R14,1 million.
* In certain instances accounting conventions dictate that revenues are
recognised on a monthly rental basis as opposed to an upfront outright sale. The
approximate effect of this on the interim results is a deferral in revenue and
profit before tax of R22,7 million and R10,3 million respectively.
* Foreign exchange gains of R10,5 million were incurred largely due to the
restatement of Euro denominated investments in Intervid International AG to its
measurement currency of US Dollars at the end of the interim period.
* Impairments of investments totaling R4,6 million have been provided for.
* Translation reserves have arisen from the translation of the local currency
of foreign operations to US Dollars and the translation of Intervid
International Group results from US Dollars to Rands at a spot rate of R8,55 on
31 December 2002.
* A net loss for the interim period of R36,3 million was incurred.
* The headline loss per share at 23.0c is substantially lower than the
comparative adjusted interim headline loss per share of 35.7c and the adjusted
headline loss per share for the year ended 30 June 2002 of 44.8c.
* During the six months to 31 December 2002 there was a net cash outflow from
operating activities of R110,6 million. Key outflows were R18,8 million due to
the loss before interest, tax, depreciation and amortisation, R73,8 million
being an investment in working capital (receivables and inventory) to fund sales
growth, and R18,2 million being an investment in capital expenditure which
primarily relates to the equipment capitalised to fund rental sales under the
sustainable recurring revenue model.
Convertible Loan
It is important to note that as reflected above in terms of AC433 RFS Holdings
Limited, an associate of VenFin Limited, no longer qualifies as a minority
shareholder. Note 24 of Intervid Limited`s annual financial statements at 30
June 2002 details the rights and obligations attached to the convertible loan.
Upon conversion RFS Holdings Limited will qualify as a shareholder (with a
holding of between 30% to 50% depending on the performance of Intervid
International). In this event, the related outside shareholders interest will
again be accounted for. This will result in a significant dilution in the net
asset value of the Group. Alternatively RFS Holdings Limited could elect to
convert the loan to shares in Intervid Limited and thereby become a significant
shareholder in Intervid Limited.
Outlook
The company is still progressing with the international expansion strategy. The
focus over the next six months will be on managed growth driven by achieving
targeted sales and ensuring cost effectiveness.
Directorate
On 28 August 2002, Mr Rod Stainton resigned as a non-executive director.
On 31 October 2002, Dr Gavin Hough resigned as an executive director.
At the Annual General Meeting held on 15 November 2002, Messrs James Clucas and
Ivor Jones retired from the Board and did not make themselves available for re-
election.
On 5 March 2003, Messrs Mark Taylor and James Alan Grieve were appointed to the
Board as non-executive directors.
Report of the Independent Auditors
The financial information presented in this release has been reviewed by the
Group`s auditors, Ernst & Young. Their unqualified review report is available
for inspection at the registered office of the company.
For and on behalf of the Board
R.A. le Sueur (CEO) K.A. Pitout (CFO)
Kloof
5 March 2003
Registered Office: 6 Charles Way, Kloof, 3610. P.O. Box 1218, Kloof, 3640
Transfer Secretaries: Computershare Investor Services Limited, 70 Marshall
Street, Johannesburg, 2001. P.O. Box 1053, Johannesburg, 2000
Sponsors: Rand Merchant Bank Corporate Finance
Directors: W.F. Lambert* (Chairman), G.R. Howard* (Deputy Chaiman), R.A. le
Sueur (CEO), J.J. Durand*
J.R. Howard, C.R. le Sueur, K.A. Pitout, M.J.G. Taylor,
J.A. Grieve*+ * Non-Executive +British
Date: 05/03/2003 05:15:00 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
