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Spescom - Unaudited interim Results for the Six Months ended 31 March 2003
Spescom Limited
(Registration number 1987/001083/06)
Share Code: SPS ISIN: ZAE000017919
Income Statement
6 months 6 months 12 months
ended ended ended
31/03/03 31/03/02 30/09/02
R"000 R"000 R"000
Turnover 185 662 170 937 366 238
From continuing operations 185 662 154 882 339 291
From discontinued operations - 16 055 26 947
Cost of sales 82 320 86 315 175 255
From continuing operations 82 320 73 914 156 163
From discontinued operations - 12 401 19 092
Operating profit/(loss) 26 952 (65 196) (55 920)
From continuing operations 26 952 (53 800) (39 831)
From discontinued operations - (11 396) (16 089)
Amortisation of goodwill (3 440) (672) (6 285)
Finance charges (8 320) (4 276) (13 204)
Investment income 4 184 1 788 4 580
Net profit/(loss) before abnormal 19 376 (68 356) (70 829)
items
Non-trading items - (1 800) (13 767)
Net profit/(loss) before tax, 19 376 (70 156) (84 596)
after abnormal items
Taxation (148) (178) (149)
Net profit/(loss) after tax 19 228 (70 334) (84 745)
Attributable to outside (150) (688) (303)
shareholders
Profit/(Loss) for the period 19 078 (71 022) (85 048)
HEPS (cents) 38.19 (118.91) (111.5)
EPS (cents) 32.52 (123.20) (146.1)
Balance sheet
As at As at As at
31/03/03 31/03/02 30/09/02
R"000 R"000 R"000
ASSETS
Non-current assets
Property, vehicles and equipment 33 564 40 886 36 127
Intangible assets 20 134 29 450 22 690
Goodwill 37 839 46 901 41 288
Investments and loans 42 282 21 122 42 604
Deferred taxation 6 165 5 626 6 165
139 984 143 985 148 874
Current assets 109 442 138 403 146 211
Inventories 13 667 25 154 16 833
Taxation prepaid 1 602 4 074 1 602
Accounts receivable 69 050 84 843 83 736
Cash resources 25 123 24 332 44 040
TOTAL ASSETS 249 426 282 388 295 085
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 33 775 33 775 33 775
Non-distributable reserves 19 854 - 900
Accumulated loss (8 944) (13 996) (28 022)
Ordinary shareholders" equity 44 685 19 779 6 653
Outside shareholders" interest in 467 1 702 317
subsidiary companies
Interest of all shareholders 45 152 21 481 6 970
Non-current liabilities 14 057 572 17 668
Interest bearing liabilities 14 057 572 17 668
Current liabilities 190 217 260 335 270 447
Current portion of liabilities - 61 84
Bank finance 87 318 121 082 143 489
Taxation 202 382 219
Accounts payable 55 380 75 713 66 199
Provisions 47 317 63 097 60 456
Total equity and liabilities 249 426 282 388 295 085
equity statement for the period ended 31 March 2003
Non-dis-
Accumulated Share Share tributable
loss capital premium reserves Total
R"000 R"000 R"000 R"000 R"000
Balance at 57 026 556 18 336 10 411 86 329
30/9/2001
Issue of share 31 5 172 5 203
capital
Excess share 9 680 (9 680) -
premium
reduction
transferred to
share premium
Amortisation of (731) (731)
negative
goodwill
Net loss for the (71 022) (71 022)
year
Balance at (13 996) 587 33 188 - 19 779
31/3/2002
Reserve arising 1 000 1 000
on redemption of
preference
shares
Reserve (100) (100)
transferred to
outside
shareholders
Net loss for the (14 026) (14 026)
period
Balance at (28 022) 587 33 188 900 6 653
30/09/02
Foreign currency 18 954 18 954
translation gain
arising on
consolidation
Net profit for 19 078 19 078
the period
Balance at (8 944) 587 33 188 19 854 44 685
31/03/03
notes
6 months 6 months 12 months
ended ended ended
31/03/03 31/03/02 30/09/02
R"000 R"000 R"000
1. Accounting policies
The financial statements are prepared on the historical cost basis and
incorporate accounting policies which conform with the South African Statements
of Generally Accepted Accounting Practice.
These policies are consistent with that of the previous financial year, other
than where modified to comply with revised South African Accounting Statements.
2. Information per share
Headline earnings/(loss) per share Based on net profit/(loss) after taxation
adjusted for capital items included in abnormal items and 58 668 054 weighted
average shares in issue
(March 2002: 57 647 810 and September 2002: 58 215 233)
Net profit/(loss) for the period 19 078 (71 022) (85 048)
Non-trading items - 1 800 13 767
Amortisation of goodwill 3 440 672 6 285
(Profit)/loss on sale of fixed (111) - 79
assets
22 407 (68 550) (64 917)
Earnings per share:
Based on a net profit for the period of R19,078m
(March 2002: net loss of R71,022m and September 2002:
net loss of R85,048m) weighted average shares in issue of 58 668 054 (March
2002: 57 647 810
and September 2002: 58 215 233)
3. Non-trading items
Write down and sale of investments - 1 800 (2 140)
Loss on discontinuance of businesses - - (11 627)
- 1 800 (13 767)
Consolidated cash flow statement
6 months 6 months 12 months
ended ended ended
31/03/03 31/03/02 30/09/02
R"000 R"000 R"000
OPERATING ACTIVITIES
Cash generated/(utilised) by 33 745 (57 343) (53 313)
operations
Working capital changes 10 608 56 178 53 450
Cash generated by operating 44 353 (1 165) 137
activities
Net finance income (4 136) (2 488) (8 624)
Taxation (paid)/refundable (166) (965) 834
Net cash flow from operating 40 051 (4 618) (7 653)
activities
INVESTING ACTIVITIES
Investment to expand and maintain 254 (14 955) (31 738)
operations
254 (14 955) (31 738)
FINANCING ACTIVITIES
Bank financing and facilities (59 222) (3 021) 36 505
(59 222) (3 021) 36 505
Net change in cash and cash (18 917) (22 594) (2 886)
equivalents
Cash and cash equivalents:
- At beginning of period 44 040 46 926 46 926
- At end of period 25 123 24 332 44 040
segmental analysis
6 months 6 months 12 months
ended ended ended
31/03/03 31/03/02 30/09/02
R"000 R"000 R"000
Sector turnover
eBusiness 108 222 107 465 159 137
Communications 61 003 42 655 114 970
Services and other 16 437 20 817 92 131
185 662 170 937 366 238
Operating profit/(loss)
eBusiness (234) (36 907) (57 764)
Communications 15 321 (12 332) (14 751)
Services and other 11 865 (15 957) 16 595
26 952 (65 196) (55 920)
Geographic turnover
Africa 108 229 124 170 253 284
Europe 54 278 10 578 73 988
USA 22 458 36 189 38 966
Other 697 -
185 662 170 937 366 238
COMMENTS
Group Activities and Review of Operations
The performance of the group for the 6 month period ended 31 March 2003 shows a
significant improvement over the corresponding fiscal half of 2002.
Revenues from continuous operations increased by 20%, from R154m to R186m.
The group generated headline earnings of R22.4m compared to a loss of R68.5m for
the corresponding period ended 31 March 2002. This translates into headline
earnings per share of 38c compared to a loss of 119c incurred in the first 6
months of 2002.
The significant increase in profitability can mainly be attributed to the
globalisation strategy of investing for growth through the development of
proprietary technology.
Other contributory factors include:
* Enhanced efficiencies resulting from the closure of loss making operations,
coupled with cost reduction initiatives implemented during the previous
financial year.
* Improved margins on proprietary product revenues.
* Net translated foreign exchange gains, due to the strengthening of the Rand,
contributing 50% of headline earnings.
The stronger Rand has had a beneficial effect on the group debt scenario but has
also been the cause of reducing revenues from the sale of proprietary products
in overseas markets, which are reported in Rands.
Operational review for the period 1 October 2002 to 31 March 2003
Group performance
SA operations
All operations are generating positive cash flow. Several large long-term
contracts are currently in the rollout phase.
USA and UK operations
Performance has increased when compared to the corresponding period last year.
The USA operation has, during the past six months, experienced continued support
and new business from its blue chip customer base.
The UK operation is generating positive cash flow and business opportunities in
mainland Europe are being actively explored.
Future prospects
Improved cash flows generated from operations and the strengthening of the Rand
has resulted in a material debt reduction. Further reduction or restructuring of
the debt remains a high priority. Initiatives in this regard are continuing. As
part of these initiatives the group has negotiated a further extention of one of
its loans which is now disclosed under non-current liabilities.
Despite ongoing uncertain market conditions in the USA which continue to affect
buying decisions, the positive trend reported in the first six month period is
expected to continue for the full year ending 30 September 2003.
Approximately 50% of the group"s revenue is expected to emanate from outside
South Africa during the current financial year.
Dividend
Spescom continues with its policy of not declaring a dividend. This policy may
be reviewed in the future.
Directorate
Mr. Larry Kalmeyer, non executive director, sadly passed away in March 2003,
following an association with Spescom since the company"s inception.
In compliance with the recommendations contained in the King Report, the Spescom
board will continue to undergo reconstitution when necessary.
A Farah H J Isaacman
Executive Chairman Chief Financial Officer
Midrand
21 May 2003
Directors:
A Farah (Chairman), HJ Isaacman, L Ogilvy*, S Pityana* *Non-executive
Company Secretary:
AG Johnston
Registered Office:
Spescom Park, Cnr. Alexandra Avenue and Second Road, Halfway House, 1685,
Midrand. Tel: +27 (11) 266 1500
Transfer Secretaries:
Stakeholder Data Services (Pty) Limited, 108 Johan Avenue, Sandton, 2146. Tel:
+27 (11) 775 3400.
Website: www.spescom.com
Date: 20/05/2003 01:37:23 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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