| Tue 1 Apr 2003, 8:45 | | Global Technology Ltd - reviewed RESULTS FOR THE y |
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Global Technology Ltd - reviewed RESULTS FOR THE year ENDED 31 December 2002
Global Technology Limited
Incorporated in the Republic of South Africa
Registration number 1996/009809/06
Share code GLT ISIN code ZAE 000016820
reviewed RESULTS FOR THE year ENDED 31 December 2002
COMMENTARY
Review opinion
These results have been reviewed, not audited, by our external auditors Deloitte
& Touche. The unqualified review opinion is available for inspection at the
company"s registered office. The auditors have raised an emphasis of matter with
regard to the ability of this Group to continue as a going concern. The
directors have been involved in negotiations with funders and shareholders in
order to introduce new capital and funding to the Group. Furthermore, the
directors have entered into a cost reduction programme to restore profitable
operations. Accordingly, the ability of the Group to continue as a going concern
is dependent on these events and we draw attention to the commentary made by the
directors in this announcement.
RESULTS
The 2002 financial year has been the most difficult in Global Technology"s 14-
year history. For the period, the Group suffered an attributable loss of R379
million. Of this, R168 million was related to losses attributable to Temenos and
the write-down to current market value of our 15% stake in Temenos. The
operating loss for the period was R139 million, caused primarily by a revenue
decrease from a 12-month pro forma R437 million to R348 million, a foreign
exchange loss of R23 million, a loss in Global Technology Australasia of R33
million and provisions for bad debts, totalling R27 million, which relates
mainly to Zimbabwean debtors. The resulting headline loss per share was 55,6
cents.
In addition, we have impaired the value of goodwill in subsidiaries by R19
million and have written down development costs by R28 million.
The Group and its associates were all affected by the massive global slow-down
in IT spending and performed poorly, posting large losses which had a very
negative impact on results.
The Group has identified all non-core and non-strategic businesses and has
implemented major cost cuts. The full benefits of these measures will be felt
from July this year onward, with the elimination of R76 million in costs per
annum. This rightsizing will result in the Group"s costs being covered by
annuity-based and reliable support service revenues. From a month-to-month
operational point of view, the Group will have little dependency on new sales,
which are expected to remain under pressure for at least another 12 months.
Our management structure has been streamlined to meet the demands of our long-
standing and still growing client base. Ongoing relationship management and
client support remains as important as ever, including the further development
of relations with our very important partners, such as Temenos and Hyperion.
We have procured a further R10 million in continued support from the Group"s
bankers and major shareholders and have committed ourselves to de-gearing the
balance sheet and reducing our exposure to our bankers over time. The first step
in this process is a rights issue, details of which will be announced shortly.
GROUP STRUCTURE GOING FORWARD
It is our intention, in the ensuing period, to further consolidate our position
and to focus our attention on the four core areas of our business, Banking,
Insurance, Business Intelligence and Professional Solutions.
CHANGES TO THE BOARD
In keeping with the consolidation phase in which the Group is engaged, the
following changes have been made to the board of directors:
* JM Hughes, RC Johnson, G Leonard and DC McWilliam have resigned as directors
with effect from 28 March 2003
* L Matuson has been appointed to the Board with effect from 28 March 2003
* RS Gordon has been appointed as an alternate to L Matuson with effect from 28
March 2003
CAUTIONARY
In the announcement on 11 March 2003, Glotec advised its shareholders that the
company is in discussions which may have a material effect on the price of
Glotec"s securities. Further announcements will be made in this regard during
the course of April 2003.
ANNUAL REPORT FY2002
The annual report will be posted to shareholders in due course.
By order of the Board
Ray Leonard
(Chief Executive Officer)
Ron den Besten
(Director)
31 March 2003
enterprise business solutions globally
SUMMARISED CONSOLIDATED INCOME STATEMENT
12 months 18 months
ended ended
31 December 31 December
2002 2001
Reviewed Audited
Notes R"000 R"000
Revenue 347 903 611 120
Operating (loss)/profit (85 655) 55 825
Exchange (loss)/profit (22 838) 16 784
Depreciation - assets (4 068) (7 210)
Amortisation - development cost (16 781) (8 708)
Amortisation - goodwill (9 583) (13 206)
(Loss)/profit from operations (138 925) 43 485
Net interest paid (15 011) (4 978)
(Loss)/income from associates 2 (167 591) 95 722
Net (loss)/profit before taxation (321 527) 134 229
Exceptional items 3 (75 423) (11 369)
Taxation (5 887) 20 470
(Loss)/profit after taxation (402 837) 143 330
Minority interest 23 454 (16 338)
(Loss)/profit for the year (379 383) 126 992
Number of shares in issue (thousands) 438 805 410 737
Weighted average number of shares in
issue (thousands) 427 930 395 130
Headline (loss)/earnings per ordinary
share (cents) (55,6) 14,6
(Loss)/earnings per ordinary share (cents) (88,7) 32,0
Fully diluted headline (loss)/earnings per share (55,3) 14,6
Fully diluted (loss)/earnings per share (88,2) 31,6
Dividends per ordinary share (cents) - -
Reconciliation of headline earnings per share
(Loss)/earnings per share (88,7) 32,0
adjusted for:
Exceptional items 29,2 (23,0)
Amortisation - goodwill 3,9 5,6
Headline (loss)/earnings per share (55,6) 14,6
Reconciliation of headline earnings per share
per AC 306 to Circular 7
Headline earnings per AC 306 19,7
adjusted for:
Loss on the disposal of investment (2,9)
Exceptional item in associate (2,2)
Headline earnings per share 14,6
Summarised consolidated balance sheet
Assets
Non-current assets 163 122 468 629
Equipment 7 191 9 799
Goodwill 26 595 57 611
Development cost 17 182 49 639
Deferred tax asset 27 333 47 135
Loans receivable 3 645 14 738
Investment in associate 77 895 276 554
Investment in joint venture 3 153 -
Investments - unlisted 4 128 13 153
Current assets 124 834 188 618
Accounts receivable 69 999 122 556
Other debtors 4 321 25 279
Deferred expenses 20 614 15 177
Taxation owed 9 080 2 336
Bank balances and cash 20 820 23 270
Total assets 287 956 657 247
Equity and liabilities
Ordinary shareholders" interest 36 655 425 798
Minority interest - 23 526
Non-current liabilities 7 736 54 953
Deferred tax liability 321 3 729
Interest-bearing long-term liabilities 5 7 415 51 224
Current liabilities 243 565 152 970
Accounts payable 38 517 58 213
Other creditors 40 563 11 191
Deferred revenue 44 248 40 193
Short-term portion of long-term liabilities 30 395 1 091
Short-term loan - interest-bearing 8 580 -
Taxation owing 9 286 14 393
Bank overdraft - interest-bearing 71 976 27 889
Total equity and liabilities 287 956 657 247
Net asset value per share 8,4 103,7
ABRIDGED CASH FLOW STATEMENT
31 December 31 December
2002 2001
Reviewed Audited
R"000 R"000
Cash (utilised in)/generated from operations
before working capital changes (108 125) 65 506
Working capital changes 85 343 (42 741)
Net finance costs (15 193) (4 978)
Taxation paid (5 852) (12 090)
Cash flow from operating activities (43 827) 5 697
Cash flow from investing activities (14 089) (39 162)
Cash flow from financing activities 12 591 19 696
Net decrease in cash and cash equivalents (45 325) (13 769)
Cash and cash equivalents at beginning of year (4 619) 8 556
Foreign currency translation reserve on
cash balance (1 212) 594
Cash and cash equivalents at end of year (51 156) (4 619)
ABRIDGED STATEMENT OF CHANGES IN EQUITY
Accumu-
Non-distri- mulated
Share Share butable profit/
capital premium reserve (loss) Total
R"000 R"000 R"000 R"000 R"000
Balance at beginning of year 410 186 86 64 015 174 512 425 798
Share issue 28 23 372 23 400
Loss for the year (379 383) (379 383)
Write-off of share issue expenses (1 200) (1 200)
Share of associate"s non-
distributable reserve 5 651 5 651
Foreign exchange difference arising
on translation of foreign subsidiary (37 611 (37 611)
Balance at end of year 438 209 033 32 055 (204 871) 36 655
ABRIDGED SEGMENTAL ANALYSIS
Business
Intelligence Banking Insurance Total
R"000 R"000 R"000 R"000
Segment revenue 83 061 242 318 46 674 372 053
Intercompany - (24 150) - (24 150)
83 061 218 168 46 674 347 903
Segment result (5 823) (129 632) 6 113 (129 342)
Amortisation - goodwill - (6 217) (3 366) (9 583)
(5 823) (135 849) 2 747 (138 925)
31 December 31 December
2002 2001
Reviewed Audited
R"000 R"000
Notes
1 These results are presented in accordance with Statements of South African
Generally Accepted Accounting Practice. Policies are consistent with those used
in the prior year.
2 (Loss)/income from associate
(Loss)/income from associate (76 154) 22 712
Amortisation - goodwill (7 044) (9 241)
Impairment - goodwill (84 393) -
Exceptional income - 82 251
(167 591) 95 722
3 Exceptional items
Profit/(loss) on the sale of investments 5 159 (11 369)
Loss on realisation of loan (11 921) -
Impairment - investment and loan (21 993) -
Impairment - goodwill (18 607) -
Impairment - development cost (28 061) -
(75 423) (11 369)
4 Directors" valuation of unlisted investments 128 13 153
5 Interest-bearing long-term liabilities
Pref shares - subsidiaries 5 152 5 152
CommerzeBank Aktiengesellschaft 27 237 29 100
Global Technology Investment Holdings 240 12 927
Finance leases 3 367 1 930
Commercial bills 1 814 3 206
Less: Current portion included in
current liabilities (30 395) (1 091)
7 415 51 224
6 Operating lease commitments Due within Due within
one year 2 to 5 years Thereafter
Computer equipment 12 063 6 481 -
Motor vehicles 325 466 -
Equipment 435 146 -
Buildings 8 148 29 378 11 509
20 971 36 471 11 509
7 Contingent liabilities
Litigation - Bank of Queensland
As at 31 December 2002, Global Technology Australasia Limited ("GTA"), a 60%
owned subsidiary of Global Technology Limited, has proceedings in progress
against the Bank of Queensland ("Bank") for a claim of approximately AUD6.68
million.
The Bank has issued a counter claim against GTA and Global Technology Limited
for approximately AUD8.67 million.
Negotiations and litigation are continuing in relation to this matter.
8 Other
There were no material capital commitments existing at the end of the year.
www.glotec.com
Registered office
Arcay House II Number 3 Anerley Road 2193 PARKTOWN PO Box 62397 2107
Marshalltown
Transfer secretaries
Computershare Investor Services Limited 17 Marshall Street 2001 Johannesburg
Directors
DR Geeringh* (Chairman) R Leonard (Chief Executive Officer) RA den Besten* G
Koukis* **
L Matuson* AM Mhlongo* PJ Moffett ME Tshivhase* *Non-
executive **Greek
Company secretary
Arcay Client Support (Pty) Ltd Registration number 1998/025284/07
Incorporated in the Republic of South Africa Registration number 1996/009809/06
Share code GLT ISIN code ZAE 000016820
