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Synergy -
Synergy Holdings Limited
(Registration number 1995/006315/06)
Share code: SNG ISIN: ZAE000017760
("Synergy", "the company" or "the group")
REVIEWED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2003
AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
SUMMMARISED CONSOLIDATED INCOME STATEMENT
Six months Six months Twelve months
ended ended ended
31 August 31 August 28 February
2003 2002 2003
(Reviewed) (Reviewed) (Audited)
R"000 R"000 R"000
Gross revenue 11 792 10 138 18 909
Net profit before taxation 991 730 1 267
Taxation (68) - -
Net profit after taxation 923 730 1 267
-
Number of shares issued ("000) 54 410 62 562 54 410
Earnings per share (cents) 1,70 1,17 2,32
Headline earnings per
share (cents) 1,70 1,17 2,32
SUMMMARISED CONSOLIDATED BALANCE SHEET
31 August 31 August 28 February
2003 2002 2003
(Reviewed) (Reviewed) (Audited)
R"000 R"000 R"000
ASSETS
Non-current assets 1 711 1 495 1 167
Fixed assets 1 684 1 220 1 140
Investments 27 275 27
Current assets 5 283 4 606 4 558
Accounts receivable 2 234 2 172 1 868
Inventories 364 77 122
Cash on deposit and bank
balances 2 685 2 357 2 568
Total assets 6 994 6 101 5 725
EQUITY AND LIABILITIES
Capital and reserves 4 702 4 028 4 321
Issued capital
- including share premium 3 593 3 837 3 593
Accumulated profit 1 109 191 728
Non-current liabilities
Long-term liabilities 384 174 -
Current liabilities 1 908 1 899 1 404
Accounts payable 1 908 1 899 1 404
Total equity and liabilities 6 994 6 101 5 725
Number of shares issued ("000) 54 410 62 562 54 410
Net asset value per
share (cents) 8,64 6,44 7,94
Net tangible value
per share (cents) 8,64 6,44 7,94
ABRIDGED CASH FLOW STATEMENT
Six months Six months Twelve months
ended ended ended
31 August 31 August 28 February
2003 2002 2003
(Reviewed) (Reviewed) (Audited)
R"000 R"000 R"000
Cash generated by operations
- including net interest 934 1 116 1 418
Dividends paid (543) - -
Secondary Tax on Companies (68) - -
Net cash inflow from
operating activities 323 1 116 1 418
Net cash outflow from
investing activities (544) (181) 73
Net cash inflow from
financing activities 338 21 (324)
Net increase in cash on deposit
and bank balances 117 956 1 167
Cash on deposit and bank
balances at beginning of
period 2 568 1 401 1 401
Cash on deposit and bank
balances at end of period 2 685 2 357 2 568
STATEMENT OF CHANGES IN EQUITY
Share Share Accumulated
capital premium Total profit
R"000 R"000 R"000 R"000
Balance at
1 March 2003 544 3 049 3 049 728
Net profit for period 544 923
Dividends paid (543)
Balance at
31 August 2003 544 3 049 3 593 1 108
COMMENTARY
Synergy focuses on providing Accpac Accounting Software solutions around
software sales, implementation, customisation and associated networking support.
The Group continues to focus specifically in this area.
Accounting policies
These reviewed interim results of the Group comply in all material respects
with South African Statements of Generally Accepted Accounting Practice and are
consistent with those applied in the audited financial statements to 28 February
2003.
Auditor"s review opinion
Synergy"s external auditors, Van Sitterts, Chartered Accountants (SA), have
reviewed these results. Their unqualified review opinion is available for
inspection at Synergy"s registered office.
Financial comment
The directors are pleased with the interim results of Synergy for the six
months ended 31 August 2003. The highlights of these results are:
* Turnover increased by 16%.
* Net profit after taxation increased by 26%.
* Headline earnings per share increased by 46%.
The main reason for these improved results over the prior comparative period
was:
* Synergy was working off a lower base in the comparative period.
* Cost containment in the current period, resulting in increased
margins.
* More efficient utilisation of consultants in 2003.
* Growth in the business in general.
The disproportionate improvement in headline earnings per share, when
compared to the other areas highlighted, over the previous period is
attributable to the effect of the share buy-back programme that resulted in the
cancellation of 8 152 100 shares on 20 February 2003.Shareholders should note
that Synergy has enjoyed the benefit of an assessed tax loss from previous
years. Of this assessed tax loss, a small balance remains and it is therefore
anticipated that Synergy will incur a tax liability in future periods.
Prospects by division
Accpac Software Sales and Consulting (Synergy Accounting)
During the period under review a number of staff were re-allocated from
consulting roles to sales support roles, improving the Company"s ability to
close larger accounts. Despite the increase in turnover, the results do not
display the effects of these changes, as the billings of these staff were lost
to the sales process. Synergy has subsequently employed additional resources to
fill the vacuum created by this re-allocation.
Networking Sales and Consulting (Synergy Networking)
The major factor inhibiting growth in this division has been a lack of capacity.
As a consequence, the Company has started a recruitment drive in this area to
satisfy market needs.
Software Development and Packaged Software Sales (Appsoft) Appsoft contributed
positively for the period, particularly in the areas of software development for
the consulting division"s implementations. A marketing programme for packaged
software has begun to gather momentum with Appsoft actively participating in
international trade shows.
A representative has been employed to promote North American sales. No costs
associated to packaged software development or promotions have been capitalised
in the balance sheet and all costs to date have been expensed.
Interim Dividend
The board has considered the present cash requirements of the Group and
believes there is sufficient cash in the Company to adequately cover its working
capital requirements for the foreseeable future.
Consequently an interim dividend of 0,8 cent per ordinary share has been
declared (Dividend No. 2).
This dividend will be payable to all ordinary shareholders recorded in the
register on the record date, being Friday, 7 November 2003.
The salient dates for the payment of the dividend are:
2003
* The last date to trade cum-dividend in
order to be recorded in the register on
the record date is Friday, 31 October
* Shares will trade ex-dividend on Monday, 3 Novemeber
* Record date is Friday, 7 Novemeber
* The dividend will be paid on Monday, 10 November
No shares may be dematerialised or rematerialised between
Monday, 3 November 2003 and Friday, 7 November 2003, both days inclusive.
Withdrawal of cautionary announcement
Shareholders are referred to the cautionary announcement that accompanied the
recent trading update published on SENS on 30 September 2003. With the
publication of these reviewed interim results, the cautionary announcement is
hereby withdrawn.
For and on behalf of the board
Patrick Toolan
Director
14 October 2003
ACCPAC
BUSINESS PARTNER
ACCPAC
DEVELOPMENT PARTNER
Date: 15/10/2003 02:38:05 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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