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Interconnective Solutions Limited - Group Audited Results For The 14-month
Release Date: 01/08/2003 07:17:05 Code(s): ILT
INTERCONNECTIVE SOLUTIONS LIMITED - GROUP AUDITED RESULTS FOR THE 14-MONTH
PERIOD ENDED 30 JUNE 2003 AND THE REVIEWED RESULTS FOR THE
INTERCONNECTIVE SOLUTIONS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/010640/06)
("the group" or "the Company")
GROUP AUDITED RESULTS FOR THE 14-MONTH PERIOD ENDED 30 JUNE 2003 AND THE
REVIEWED RESULTS FOR THE
12-month period ended
30 April 2003
INCOME STATEMENTS
14 months 12 months 12 months
ended ended ended
30 June 30 April 30 April
2003 2003 2002 Increase/**
(Audited) (Reviewed) (Audited) (Decrease)
R"000 R"000 R"000 %
Revenue 19 021 14 422 7 826 143
Other operating income 672 852 1 324 (49)
Direct operating costs (8 655) (6 621) (4 722) 83
Staff costs (5 475) (4 265) (3 938) 39
Depreciation and amortisation
expenses (1 332) (845) (864) 54
Other operating expenses (3 639) (3 043) (2 872) 27
Profit/(Loss) from operations 591 500 (3 246)
Finance costs (59) (47) (105) (44)
Investment income 57 51 101 (43)
Profit/(Loss) from ordinary
activities 589 505 (3 250)
Attributable to outside
shareholders (22) - -
Retained profit/(loss) for
period 567 505 (3 250) 117
Opening accumulated losses as
restated (8 743) (8 743) (5 493)
Opening accumulated losses as
previously reported - - (5 626)
Change in accounting policy - - 133
Closing accumulated losses (8 176) (8 239) (8 743)
Number of shares
in issue at
end of period 111 090 000 96 600 000 96 600 000
Weighted number
of shares in issue
at end of period 98 152 500 96 600 000 96 600 000
Basic earnings/(loss)
per share (cents) 0,58 0,52 (3,40)
Headline earnings/(loss)
per share (cents) 0,90 0,52 (3,40)
Reconciliation between
earnings and headline
earnings
Per the income statement 567 505 (3 250)
Items included in other
operating expenses
above:
Goodwill amortised 312 - -
Loss on disposal of
investments 1 - -
Headline earnings 880 505 (3 250)
**Percentage change is for the 14 months ended 30 June 2003.
Change in accounting policy
During the year the Company changed its policy with respect to revenue
recognition. In order to conform with the benchmark treatment in the statement
on revenue, the Company now accrues for revenue in the month in which it is
generated rather than when invoiced. The comparative amounts have been restated.
R" 000
Effect on profit for financial year: 2001 133
(increase in each period) 2002 40
2003 323
STATEMENTS OF CHANGES IN EQUITY
14 months 12 months 12 months
ended ended ended
30 June 2003 30 April 2003 30 April 2002
(Audited) (Reviewed) (Audited)
R"000 R"000 R"000
Share capital 111 97 97
Balance at beginning of period 97 97 95
Issue of share capital 14 - 2
Share premium 14 034 12 483 12 483
Balance at beginning of period 12 483 12 483 12 483
Issues during period 1 550 - -
Share issue costs - - -
Accumulated losses (8 176) (8 239) (8 743)
Balance at beginning of period (8 743) (8 743) (5 493)
Attributable profits/(losses) 567 505 (3 250)
5 969 4 341 3 837
BALANCE SHEETS
30 June 30 April 30 April
2003 2003 2002
(Audited) (Reviewed) (Audited)
R"000 R"000 R"000
ASSETS
Non-current assets 4 512 3 201 3 921
Fixed assets 1 407 1 374 1 549
Intangible assets 2 305 1 026 1 571
Loans receivable 800 800 800
Investments in associates and subsidiaries - 1 1
Current assets 6 418 5 428 3 699
Inventory 256 297 276
Trade and other receivables 4 154 3 878 2 530
Cash and cash equivalents 2 009 1 253 893
Total assets 10 930 8 628 7 620
EQUITY AND LIABILITIES
Capital and reserves 5 969 4 341 3 837
Non-current liabilities
Long-term loans 148 150 381
Minority shareholders" interest 22 - -
Current liabilities 4 791 4 137 3 402
Trade and other payables 4 567 3 877 3 195
Current portion of non-current liabilities 223 261 186
Bank overdraft - - 21
Total equity and liabilities 10 930 8 628 7 620
CASH FLOW STATEMENTS
14 months 12 months 12 months
ended ended ended
30 June 30 April 30 April
2003 2003 2002
(Audited) (Reviewed) (Audited)
R"000 R"000 R"000
Cash flow from operating activities 2 378 662 (605)
Net cash (utilised) /generated by
operations 2 380 658 (601)
Finance costs (59) (47) (105)
Investment income 57 51 101
Cash flow from investing activities (2 643) (125) (714)
Cash flow from financing activities 1 402 (157) 167
Net increase in cash and cash equivalents 1 137 380 (1 152)
Cash and cash equivalents at beginning
of period 872 872 2 024
Cash and cash equivalents at end of period 2 009 1 253 872
COMMENTS:
RESULTS AND BUSINESS
The restructuring of the group to a telecommunications service provider has
shown positive results which have translated into the group moving into profit.
The group provides value-added voice and data services as an application service
provider ("ASP") utilising the group"s proprietary interactive digital platform
to provide services to fixed and mobile devices.
The group"s service offering is now focused in two primary areas:
- Infotainment Services:
PROMOTIONS, COMPETITIONS AND VOTING SERVICES. The group, via its wholly-owned
subsidiary FoneWorx (Pty) Ltd, hosts services for a variety of advertising
agencies, Fast Moving Consumer Goods ("FMCG") suppliers and above and below-the-
line media companies such as the SABC and M-Net.
FoneWorx is the IVR (Interactive Voice Response) and SMS service provider for a
number of well known campaigns including Survivor, Telkom Charity Cup, Idols SA
and the Nelson Mandela Birthday campaign.
- Information Exchange Services which incorporates:
ELECTRONIC INFORMATION EXCHANGE SERVICES. These comprise services such as fax
to e-mail, fax on demand, fax to web, desktop to fax and international fax
services. A recently concluded exclusive agency agreement with EasyLink of the
USA has enhanced this offering.
FINANCIAL SERVICES. These incorporate electronic voucher distribution and
financial switching for credit and debit cards.
SHORT MESSAGE SERVICES. These include bulk SMS, premium rate SMS, ringtones,
picture messaging, logos and multi-messaging services.
The group"s strategy, via FoneWorx, is to increase its footprint in the
information exchange environment. This offers more predictable and consistent
annuity-based revenue.
The voice and data platform now provides 780 channels of digital voice and
data, which is the largest independent platform in the country. In addition, the
group has commissioned 120 channel platforms in each of Kenya and Botswana and
is evaluating other African territories.
The business of Telemessage was acquired during February 2003. Telemessage
provided IVR services primarily in the infotainment arena and was the largest
competitor of FoneWorx. This acquisition has expanded the FoneWorx
infrastructure and service offering and has increased the group"s client base.
YEAR-END
During the year, the Company changed its year-end from 30 April to 30 June.
Revenues are traditionally lower in December and January than in other months of
the year and, due to this change, the revenues of the group for the first six
months of the year will in future be more comparable to those of the second six
months of the year. Accordingly, the results for the 12 months ended 30 April
2003, which have been reviewed by the auditors, are published, as well as the
audited results for the 14 months ended 30 June 2003, together with the
comparative figures for the year ended 30 April 2002.
PROSPECTS
It is anticipated that group revenues and profits will continue to grow as
electronic information exchange services are incorporated into the product
portfolio.
ACCOUNTING POLICIES
The accounting policies of the group comply in all material respects with
South African Generally Accounting Practice and the Companies Act, 1973 (Act 61
of 1973), as amended. These policies are consistent with those applied in the
previous financial period, other than as noted above.
DIVIDENDS
No dividend has been declared or recommended as the group wishes to conserve
its cash resources.
The board was restructured and new appointments made as a result of the
group"s restructuring and the acquisition.
The audit report for the 14 months ended 30 June 2003 and the audit review
report for 12 months ended 30 April 2003 are available for inspection at the
registered office of the Company.
For and on behalf of the board
Mark Smith (Chairman & CEO)
Johannesburg
31 July 2003
Transfer Secretaries:
Computershare Limited
PO Box 61051
Marshalltown, 2107
Registered Office:
372B
Oak Avenue
Randburg, 2194
Contact number: (011) 293-0000
Directors:
M A Smith (Chairman & CEO), R Graver, A Mancha*, M M D Mokgatle*,
G Mooney* R Russell, G H Tudor (Financial) (*Non-Executive)
Company Secretary:
G H Tudor, CA(SA)
Auditors:
G Cambanis Inc
Sponsor:
LPC Manhattan Sponsors (Pty) Ltd
Date: 01/08/2003 07:17:18 AM
Produced by the JSE SENS Department
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