| Mon 29 Sep 2003, 16:07 | | FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2003 |
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PINNACLE TECHNOLOGY HOLDINGS LIMITED
Share code: PNC
ISIN: ZAE000022570
("the group")
AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2003
Audited Audited
30 June 30 June
2003 2002
INCOME STATEMENTS R R
Revenue 417 818 272 358 547 585
Operating profit before interest 17 363 783 12 529 607
Interest received 700 795 944 577
Interest paid (5 051 792) (5 673 542)
Net profit before taxation 13 012 786 7 800 642
South African normal taxation (1 646 999) (2 641 372)
Net profit for the year 11 365 787 5 159 270
Share of (loss)/net income from associates (229 902) 1 953 178
Net profit attributable to minority shareholders (1 730 005) (598 934)
Net profit from ordinary activities 9 405 880 6 513 514
Exceptional items (4 554 306) -
Net profit for the year 4 851 574 6 513 514
Closing and weighted average number of
ordinary shares 148 607 297 148 607 297
Earnings per share (cents) 3,26 4,38
Headline earnings per share (cents) 6,43 4,38
RECONCILIATION OF HEADLINE EARNINGS
Net profit for the year 4 851 574 6 513 514
Adjusted for:
Exceptional items 4 554 306 -
Amortisation of goodwill 142 758 -
Headline earnings 9 548 638 6 513 514
BALANCE SHEETS
ASSETS
Non-current assets 59 388 047 60 691 228
Investment 6 909 852 14 413 437
Deferred tax 16 335 710 16 927 168
Intangible assets 1 562 561 1 144 684
Fixed assets 34 579 924 28 205 939
CURRENT ASSETS 106 535 718 123 285 925
Accounts receivable 46 042 370 50 517 007
Inventories 49 049 335 64 634 381
Cash and cash equivalents 11 444 013 8 134 537
Total assets 165 923 765 183 977 153
EQUITY AND LIABILITIES
Capital and reserves 82 119 492 70 454 556
Share capital and premium 125 885 817 125 885 817
Non-distributable reserves 10 402 770 3 589 408
Accumulated loss (54 169 095) (59 020 669)
Outside shareholders" interest 4 145 895 2 126 260
Non-current liabilities 13 278 121 12 393 082
Interest bearing borrowings 13 278 121 12 393 082
Current liabilities 66 380 257 99 003 255
Taxation 449 344 580 659
Accounts payable 65 930 913 98 422 596
Total equity and liabilities 165 923 765 183 977 153
STATEMENTS OF CHANGES IN EQUITY
Changes in share capital 1 486 073 1 486 073
Balance at beginning of period 1 486 073 1 480 695
Issue of shares - 5 378
Changes in share premium 124 399 744 124 399 744
Balance at beginning of period 124 399 744 124 190 004
Premium on shares issued - 209 740
Non-distributable reserves 10 402 770 3 589 408
Balance at beginning of period 3 589 408 3 583 675
Revaluation of land and buildings 6 813 362 5 733
Retained earnings (54 169 095) (59 020 669)
Balance at beginning of period (59 020 669) (65 534 183)
Net profit for the period 4 851 574 6 513 514
Ordinary shareholders" equity at end of
period 82 119 492 70 454 556
CASH FLOW STATEMENTS
Cash flow from operating activities 4 612 484 25 530 921
Cash flow from operations 11 645 902 30 275 593
Investment income 700 795 944 577
Interest paid (5 051 792) (5 673 542)
Taxation paid (2 682 421) (15 707)
Cash flow to investing activities (2 188 047) (18 608 696)
Net additions to intangible and fixed assets (2 187 947) (5 718 155)
Additions to investments - (12 310 143)
Acquisition of subsidiaries (100) (580 398)
Cash inflow from financing activities 885 039 420 152
Increase in long-term liabilities 885 039 420 152
Cash flow for period 3 309 476 7 342 377
Cash and cash equivalents at beginning of
period 8 134 537 792 160
Cash and cash equivalents at end of period 11 444 013 8 134 537
SEGMENTAL REPORT
Turnover Turnover PBIT PBIT
Audited Audited Audited Audited
30 June 30 June 30 June 30 June
2003 2002 2003 2002
IT Infrastructure 392 836 813 336 333 633 14 335 328 9 867 054
Software & Storage 24 233 986 19 302 187 2 827 690 1 596 701
IT Services 5 416 770 409 962 474 316 (144 914)
Properties 3 263 727 2 501 903 2 168 904 2 031 597
Directors" statement
The directors take pleasure in presenting the audited results of the group
for the year ended 30 June 2003.
Basis of preparation
The consolidated financial statements are prepared in accordance with South
African Statements of Generally Accepted Accounting Practice, the South African
Companies Act, as amended, and the disclosure requirements of the JSE Securities
Exchange South Africa.
The consolidated financial statements have been prepared on the fair value
and going concern basis. The principal accounting policies are consistent with
those applied in the restated annual financial statements for the year ended 30
June 2002.
Operating performance
During the previous financial year, the group was repositioned to become a
diversified Information Technology group. The group was divided into four
distinct operating divisions, being the IT Infrastructure group, the Software
and Storage group, the IT Services group and the Property group.
This decision was taken to allow distinct attention to the different groups and
has proven to be successful. The overall group turnover has increased by 16,5%
to R417,8 million and net profit from ordinary activities has increased by 44,4%
to R9,4 million.
IT Infrastructure Group
Pinnacle Micro, being the historical core business of the group, was still
affected by the worldwide downturn in the IT industry and the tough local
trading conditions. Despite these conditions, the division has achieved
sustainable growth and we are pleased to report a turnover growth of 16,8% and
an operating income growth of 45,5%.
Software and Storage Group
This division has experienced a downturn in their markets but did however
manage to contribute R24,2 million (2002 - R19,3 million) to group turnover and
R2,8 million (2002 - R1,6 million) to group operating profit before interest and
tax.
IT Services Group
Rentnet Rentals managed to build a sound customer base and secured a number
of national contracts. This resulted in a turnover for this division of R5,4
million (2002 - R0,4 million) and an operating profit before interest and tax of
R0,5 million (2002 - loss of R0,1 million).
The division also expanded through the addition of Pinnacle Infinite
Technology. This company specialises in the supply of information technology
solutions and services.
During the year under review, Tswela Services (Pty) Ltd, a 45% subsidiary, was
identified as a non-core business and has subsequently been disposed of (to the
remaining shareholders) for a consideration of R225k.
Property Group
The division disposed of an undeveloped stand in Port Elizabeth at a loss of
R63k and an unutilised property in Vanderbijl Park at a loss of R106k. Towards
the end of the previous financial year, the division acquired another property
in Port Elizabeth, which is utilised by a branch of Pinnacle Micro and the
excess space is rented to third parties. This enabled the remaining companies of
this division to grow its revenue by 30,5% to R3,2 million and its operating
income before interest and tax by 6,8% to R2,1 million.
Pinnacle Holdings Limited
In view of the continued deterioration of the economy in Zimbabwe, the board
has decided that the investment in Quandry (Pvt) Ltd should be regarded as
irrecoverable in the near to medium future and the total investment of R3
million should accordingly be impaired.
The board also evaluated the remaining investments and loan accounts, which
resulted in a net impairment of R1,5 million.
Balance Sheet
Significant improvements to the balance sheet were achieved this year. The
group also repaid its short-term loan of R23,8 million to Cutfin and the
facility was subsequently cancelled.
During the year under review, the property situated in Midrand was revalued
to R26,5 million which resulted in an increase of non-distributable reserve of
R6,8 million.
The future
During the year under review, the group has consolidated the investments and
acquisitions made during the previous financial year. These investments and
acquisitions have been streamlined and together with internal restructuring, the
group is now set to take advantage of these investments.
AUDIT OPINION
The annual financial statements have been audited by IAPA Johannesburg
Chartered Accountants (SA) and their unqualified audit opinion can be viewed at
the registered offices of the group.
DIVIDENDS
Although the balance sheet has been strengthened since the previous year, no
dividend has been declared for the year under review.
For and on behalf of the board
C D Biddlecombe A J Fourie
(Chairman) (Chief Executive Officer)
Registered Office: Pinnacle Park, 269 16th Road
Randjespark
Midrand
Transfer Secretaries: Computershare Limited
Ground Floor
70 Marshall Street
Johannesburg, 2001
Directors: C D Biddlecombe* (Chairman),
A J Fourie (Chief Executive Officer), L Fourie, D Lelo*,
A Tugendhaft*
*Non-executive
Sponsor:
LPC Manhattan Sponsors (Pty) Ltd
Auditors:
IAPA Johannesburg Chartered Accountants (SA)
www.pinnacle.co.za
Date: 29/09/2003 04:00:57 PM Produced by the JSE SENS Department
