| Tue 20 May 2003, 17:08 | | Ucs Group Limited Interim Results For The Period E |
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Ucs Group Limited Interim Results For The Period Ended 31 March 2003 Renewal Of
Release Date: 20/05/2003 17:00:02 Code(s): UCS
UCS Group Limited Interim results for the period ended 31 March 2003 Renewal of
cautionary
UCS Group Limited
Incorporated in the Republic of South Africa
Registration number 1993/002253/06
Share code: UCS
ISIN: ZAE000016150
The interim results for the period ended 31 March 2003 have been reviewed by the
auditors, Kaplan and Kaplan, are consistent with the Group"s accounting policies
and in compliance with South African Statements of Generally Accepted Accounting
Practice. The review opinion is available for inspection at the company"s
offices.
Income statement
for the period ended 31 March 2003
Reviewed Reviewed % Audited
6 months 6 months change 12
months
31/03/03 31/03/02 30/09/0
R"000 R"000 R"000
Revenue 140372 100655 39.5 218746
Profit from operations before
interest, depreciation and
research and development 28927 22060 31.1 49758
Research and development expenditure -12055 -6506 85.3 -16826
Depreciation and amortisation -7411 -5876 26.1 -12986
Impairment of loan: staff share trust -1704 0 100 -8115
Profit before interest and investment income 7757 9678 -19.8 11831
Net interest and investment income 3592 3905 -8 7631
Dividend and investment income 5262 6495 13055
Interest received 2017 1052 2945
Interest paid -3687 -3642 -8369
Profit before taxation 11349 13583 -16.4 19462
Taxation -1973 -1431 37.9 -1476
Profit after taxation 9376 12152 -22.8 17986
Minority share of subsidiary loss
(earnings) -30 218 -113.8 132
Net profit for the period 9346 12370 -24.4 18118
Earnings per share attributable
(cents) 4 4.8 -16.7 7.2
Adjusted for: (net of taxation)
Amortisation of intangible assets 1.3 0.6 1.4
Impairment of loan: staff share trust 0.7 0 2.3
Headline earnings per share as
previously reported (cents) 6 5.4 11.1 10.9
Adjustment required by
circular 7/2002
Amortisation of intangible assets
(excl goodwill) -1.1 -0.5 -1.2
Headline earnings per share -
circular 7/2002 4.9 4.9 0 9.7
Dividend per share 1.8 0 100 1.8
Net asset value per share (cents) 78.8 73.7 6.9 0
Ordinary shares in issue
(excl shares held in treasury) 211205 251436 -16 240093
Weighted average of ordinary shares
in issue 233733 257071 -9.1 251478
Balance sheet
at 31 March 2003
Reviewed Reviewed Audited
6 months 6 months 12 months
31/03/03 31/03/02 30/09/02
R"000 R"000 R"000
ASSETS
Non current assets 96374 86773 96696
Property, plant and equipment 20619 18984 19308
Goodwill and trademarks 58082 33408 47294
Investments and loans 7969 30983 24108
Deferred taxation 9704 3398 5986
Current assets 110991 130148 114686
Inventories 5593 4363 4711
Receivables 50091 40581 44332
Cash 52727 82723 63081
Taxation 2580 2481 2562
Total assets 207365 216921 211382
EQUITY AND LIABILITIES
Capital and reserves
Shareholder"s interest 166429 185258 178659
Non current liabilities 2694 2443 3713
Minority shareholders in subsidiary 2414 1977 3165
Long and medium term loans 280 306 548
Deferred taxation 0 160 0
Current liabilities 38242 29220 29010
Payables 34279 24993 28272
Current portion of long term loans 0 116 17
Taxation 3963 4111 721
Total equity and liabilities 207365 216921 211382
Statement of changes in equity
for the period ended
31 March 2003
Share Prefe Share Distri Total
capital rence premium butable
share reser
capital ves
R"000 R"000 R"000 R"000 R"000
Balance at 30 September 2002 1201 20 62685 114753 178659
Shares acquired -144 -17133 -17277
Attributable earnings
for the period 9346 9346
Cash dividend paid -4299 -4299
Balance at 31 March 2003 1057 20 45552 119800 166429
Segmental information for the
period ended 31 March 2003
Business segments
Reviewed Reviewed % Audited
6 months 6 months change 12 months
31/03/03 31/03/02 30/09/02
R"000 R"000 R"000
Revenue 140372 100655 39.5 218746
Retail solutions 106944 69250 54.4 158052
Non retail solutions 33428 31405 6.4 60694
Profit (loss) from operations 28926 22060 31.1 49758
Retail 22472 18500 21.5 23736
Non retail 8502 5792 46.8 12006
Corporate & eliminations -2048 -2232 -8.2 14016
Cashflow statement
for the period ended 31 March 2003
Reviewed Reviewed Audited
6 months 6 months 12 months
31/03/03 31/03/02 30/09/02
R"000 R"000 R"000
Cash flow from operating activities 11703 15103 24862
Cash generated from operations 15065 15554 33149
Working capital changes -366 -936 -1756
Cash generated from operating activities 14699 14618 31393
Investment income and net finance cost 3592 3905 7631
Taxation -2289 -3420 -9684
Dividend paid -4299 0 -4478
Cash applied to investing activities -3761 -14004 -36647
Cash applied to financing activities -18296 -6571 -13330
Cash and cash equivalents
- Net change -10354 -5473 -25115
- At beginning of period 63081 88196 88196
- At end of period 52727 82723 63081
COMMENTS
- 40% growth in revenue
- 37% growth in annuity revenue
- 7% growth in net asset value
- 11% growth in dividend distribution
UCS Group Limited continued the growth of its footprint in the retail solutions
market, with revenue up at R 140 million for the six months to 31 March 2003, an
increase of 40% in comparison to the same period last year. Organic growth came
in at just over 11%, with the balance of the growth being attributable to
acquisitions. The focus on the generation of sustainable annuity revenue streams
remains key to our strategy with annuity revenue as a percentage of total
revenue approximating its previous reported level of 57% and with growth in Rand
terms of some 37% to R80.4m (March 2002: R58.9m).
Operating income (before depreciation, amortisation and interest) increased by
8% although this included an expense of R12.1 million in respect of research and
development (2002: R6.5m). UCS Software (previously Ultimate Connection), with
its award winning ActiveRetail solution that runs off a Microsoft platform,
contributed 48% to the increase in R&D. UCS Software was acquired by the Group
on 1 May 2002.
Depreciation and amortisation charges grew by 26% to R7.4m (2002: R5.9m) and
this is largely due to acquisitions concluded over the last year. Net interest
and investment income is down 8% due to the decrease in cash and cash
equivalents as a result of share buybacks and acquisitions.
Profit before tax came in 16% lower at R11.4m (2002: R13.6m) and with a R0.5m
increase in the taxation expense the Groups headline earnings per share on the
basis previously reported shows a moderate improvement to 6cents (2002:
5.4cents). The revised headline earnings per share calculation as required by
circular 7/2002 shows headline earnings to be neutral at 4.9cents (2002
restated: 4.9 cents). This is due to an increase in the amortisation of
intangible assets (excl goodwill) to R2.5m (2002: R1.2m).
The Groups net asset value per share has improved by 7% to 78.8cents (2002:
73.7cents). Headcount at the end of March 2003 was 736 (2002: 586). The Group
has capital commitments of R1.25m in respect of the acquisition of a workflow
product. The payments in favour of this commitment take place in the Group"s
2004 financial year.
Share buybacks
In the current period the Group purchased and cancelled 28.888m shares of which
25.115m were acquired through the specific repurchase from the UCS Group Limited
Staff Share Trust. The specific repurchase was authorised by the special
resolution passed at the general meeting of shareholders on 26 March 2003. On
14 February 2003 the 26.529m treasury shares held by Universal Computer Services
(Pty) Ltd, a 100% held subsidiary company in the Group, were transferred across
to UCS Group Ltd and cancelled. Thus the Group at present holds no treasury
shares.
Acquisitions
Effective 1 October 2002 the Group acquired the business of Virtual System
Technologies ("VST"). Detail regarding this acquisition was included under the
post balance sheet events section of the Directors" report in the Group"s 2002
Annual Report.
Effective 1 February 2003 the Group acquired 51% of the equity and shareholder
loan accounts in Fernridge Consulting (Pty) Ltd for R 1m. This purchase price
could be adjusted based on performance over the next two years with a maximum
additional payment of R1.5m. Fernridge Consulting provides sophisticated sales
optimisation services using aerial photography, spacial modelling techniques and
highlevel database integration, predominantly in the retail environment.
Prospects
The Group is currently in the process of consolidating certain of its retail
focused subsidiaries in order to maximise efficiencies, eliminate duplication,
increase capacity for growth and improve quality of services and products. This
project is expected to significantly enhance the Groups" ability to generate
above average returns for its shareholders in the medium and longer term.
On the international front, the Group has formed a partnership with Compass
Software in the UK for the marketing of its Java-based retail solutions in that
territory. Initial indications are encouraging and the Group is optimistic that
this partnership will lead to our first international order for our Java
technology within the next few months.
As predicted in the 2002 annual report, the harsh and volatile conditions in the
IT market, as well as the Group"s primary trading markets, have continued
through the 6 months under review. The Group will continue to focus on growth of
market share in its chosen markets and will continue to avail itself of
appropriate acquisition opportunities that arise as the consolidation in the
South African IT market gathers momentum.
The outlook for the remainder of the year remains challenging, but the Group has
sufficient work in the pipeline to be optimistic of acceptable results for the
full financial year.
Dividend declaration
Notice is hereby given that the board has declared an interim dividend of 2.0
cents per ordinary share in respect of the 6 months ended 31 March 2003. The
dividend will be paid on Tuesday 17 June 2003.
To comply with the procedures of STRATE, the last day to trade in the shares for
the purpose of entitlement to the interim dividend is Friday 6 June 2003. The
shares will commence trading ex dividend on Monday 9 June 2003 and the record
date will be Friday 13 June 2003.
Share certificates may not be dematerialised or rematerialised between Monday 9
June 2003 and Friday 13 June 2003, both days inclusive.
Renewal of cautionary
Further to the cautionary announcement dated 25 April 2003, UCS shareholders are
advised that negotiations are still in progress, which, if successfully
concluded, could affect the price of UCS shares.
Accordingly, UCS shareholders are advised to continue exercising caution when
dealing in their shares on the JSE Securities Exchange South Africa until a
further announcement is made.
Board of Directors:
Richard Goodman (Chairman)*, John Bright (Chief Executive Officer), Neil
Michelson (Chief Operating Officer), Dean Sparrow (Chief Financial Officer),
Duncan Coles, Patrick Fitzgerald, Rebecca Eliot*+, Joseph Claasen*, Peter
Terblanche*, Bryan Hattingh*, Bert Levenstein*.
*Non-executive +British
Company secretary
Verity Mary-Ann Broadrick
Registered office
20th Floor
209 Smit Street
Braamfontein 2001
PO Box 31266
Braamfontein 2017
www.ucs.co.za
Sponsor
Barnard Jacobs Mellet Corporate Finance
Date: 20/05/2003 05:00:16 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
