| Thu 20 Nov 2003, 17:52 | | Unaudited interim results for the six months ended |
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CCN Holdings Limited - Unaudited interim results for the six months ended 31
October 2003.
CCN Holdings Limited
(formerly NetActive Limited)
Incorporated in the Republic of South Africa
Registration Number: 1998/006000/06
JSE Share Code: CCN
ISIN Code: ZAE000046819
Unaudited interim results for the six months ended 31 October 2003.
BALANCE SHEETS
Unaudited Unaudited Audited
6 months 6 months 12 months
31 October 31 October 30 April
2003 2002 2003
R"000 R"000 R"000
ASSETS
Non-current assets 5 908 526 4 571
Property, plant and equipment 4 850 - 3 513
Loan to share incentive trust 1 058 526 1 058
Current assets 86 259 83 535 82 646
Inventories - 60 -
Trade and other receivables 7 509 2 839 4 193
Short-term receivables 4 721 15 111 10 389
Cash and cash equivalents 74 029 65 525 68 064
TOTAL ASSETS 92 167 84 061 87 217
EQUITY AND LIABILITIES
Capital and reserves 77 943 78 346 73 826
Share capital 139 144 139
Share premium 25 384 27 178 25 420
Accumulated profit 52 420 51 024 48 267
Current liabilities
Trade and other payables 14 224 5 715 13 391
TOTAL EQUITY AND LIABILITIES 92 167 84 061 87 217
Number of shares in issue
(net of treasury stock) ("000) 69 712 72 547 69 762
Net asset value per ordinary
share (cents) 112 108 106
INCOME STATEMENTS
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 October 31 October 30 April
2003 2002 2003
R"000 R"000 R"000
CONTINUING OPERATIONS
LOSS (1 339) (212) (4 854)
Revenue 16 759 307 6 729
Cost of sales (9 442) (202) (4 762)
Gross profit 7 317 105 1 967
Operating expenses (8 656) (317) (6 821)
DISCONTINUING OPERATIONS
PROFIT/(LOSS) (14) 17 735 14 533
Revenue 5 818 17 710 23 076
Cost of sales (4 008) (8 051) (12 296)
Gross profit 1 810 9 659 10 780
Operating expenses (1 824) (14 950) (19 273)
Operating loss (14) (5 291) (8 493)
Profit on discontinuance - 23 026 23 026
SUNDRY INCOME 71 - 34
Continuing 1 - 34
Discontinuing 70 - -
NET INTEREST RECEIVED 5 435 3 213 8 266
Continuing 5 435 3 213 8 265
Discontinuing - - 1
NET PROFIT FOR THE PERIOD 4 153 20 736 17 979
Headline profit/(loss) per
share (cents) 5.96 (3.16) (7.00)
Profit per share (cents) 5.96 28.58 24.93
Fully diluted profit per
share (cents) 5.96 28.58 24.93
Weighted average number of
shares in issue
(net of treasury stock) ("000) 69 737 72 548 72 123
Reconciliation between profit and
headline profit/(loss)
Net profit for the period 4 153 20 736 17 979
Less: profit on disposal of
ISP business (23 026) (23 026)
Headline profit/(loss) 4 153 (2 290) (5 047)
CASH FLOW STATEMENTS
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 October 31 October 30 April
2003 2002 2002
R"000 R"000 R"000
CASH FLOW FROM OPERATING
ACTIVITIES 2 328 3 619 4 196
Cash (utilised)/generated by
continuing operations (5 945) (2 374) 261
Cash received from customers 14 035 383 5 967
Cash paid to suppliers and
employees (19 980) (2 757) (5 706)
Cash (utilised)/generated by
discontinuing operations 2 838 2 780 (4 331)
Cash received from customers 5 226 25 455 32 680
Cash paid to suppliers and
employees (2 388) (22 675) (37 011)
Cash (utilised)/generated by
continuing and discontinuing
operations (3 107) 406 (4 070)
Net interest received 5 435 3 213 8 266
CASH FLOW FROM INVESTING
ACTIVITIES 3 673 13 129 16 854
Additions to property,
plant and equipment (1 995) - (2 705)
Movement in loan to share trust - - (556)
Proceeds on disposal of
businesses - 13 129 33 504
Movement in short-term
receivable 5 668 - (10 389)
Acquisition of business - - (3 000)
CASH FLOW FROM FINANCING
ACTIVITIES (36) (4) (1 767)
Shares issued during the year - - 1
Net purchase of ordinary shares (36) (4) (1 768)
Net increase in cash and cash
equivalents 5 965 16 744 19 283
Cash and cash equivalents at
the beginning of the period 68 064 48 781 48 781
Cash and cash equivalents at the
end of the period 74 029 65 525 68 064
STATEMENTS OF CHANGES IN EQUITY for the six months ended
31 October 2003
Share Share Accumulated
capital premium profit Total
R"000 R"000 R"000 R"000
Balance at 30 April 2002 144 27 182 30 288 57 614
Shares issued during
the year 1 1
Shares purchased by
subsidiary (6) (1 762) (1 768)
Net profit for the year 17 979 17 979
Balance at 30 April 2003 139 25 420 48 267 73 826
Shares purchased by
subsidiary (36) (36)
Net profit for the period
ended 31 October 2003 4 153 4 153
Balance at 31 October 2003 139 25 384 52 420 77 943
Note:
The financial information has been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice, on a basis consistent with
the audited financial statements in respect of the year ended 30 April 2003.
Comments
Nature of Business
CCN Holdings Limited"s main business is operated through the Call Centre Nucleus
division ("CCN"). CCN provides outsourced customer contact centre services,
specialising in end-to-end inbound customer service and technical support
solutions. The company currently supports the customer relationship management
("CRM") strategies of a number of South Africa"s leading brands, primarily in
the automotive, technology, telecommunications, financial, retail and travel
industry sectors. CCN"S objective is to collaborate with our clients to deliver
rapid improvements in efficiency and effectiveness of customer service delivery,
supported by high-performance processes and world-class technology.
Operational Review
Over the past 6 months, CCN has successfully integrated both the acquisition of
Call Centre Nucleus from MB Technologies, as well as the Tiscali contact centre.
A strong operational management team has been developed in order to deliver
world-class customer service, together with a highly skilled staff complement.
It has invested in training and quality procedures ensuring that staff
continually update and enhance their skills, and is currently undergoing
Customer Operations Performance Centre ("COPC") certification, which ensures
that all processes are in accordance with global best practice.
NetFlorist provides a multi-channel Internet-based retail ordering and delivery
mechanism for flowers and gifts both in South Africa and abroad. Although
NetFlorist is still disclosed as a discontinuing operation, the business has
value and it will continue to receive the group"s support.
Financial review
A net profit amounting to R4,2 million (2002: R20,7 million) was generated for
the period, after recognising interest income of R5,4 million (2002: R3,2
million). Discontinuing operations, which includes NetFlorist, traded at
breakeven levels. Continuing operations, consisting primarily of the outsourced
contact centre division and head office, operated at a loss of R1,3 million
(2002: R0,2 million). It is anticipated that additional investment will be
required in order to grow the market, build infrastructure and develop skills in
the short to medium term, with benefits being realised over the longer term. The
balance sheet is sound, with no interest bearing debt. Cash balances increased
from R68 million on 30 April 2003 to R74 million on 31 October 2003. This
increase arose primarily from the collection of the short term receivable from
Tiscali (Pty) Ltd.
Other issues
Resolution of the amounts due in terms of the agreement between M-Web and CCN
Holdings Limited has not been achieved, despite considerable time and effort
being invested to resolve this. There are significant claims being made by both
companies. The matter has been referred to arbitration.
Shareholders are referred to the announcements published on SENS on 29 September
2003 and 3 November 2003, pertaining to the specific repurchase of 18 226 000
ordinary shares and the voluntary offer to public minority shareholders of 85
cents per share. A circular setting out the details of these transactions will
be mailed to shareholders on or about 24 November 2003.
Dividend
In the light of the planned share repurchase and voluntary offer, as well as
further investments in the medium term, the board has decided not to declare a
dividend for the period under review.
Prospects
CCN believes that growth for outsourced customer management solutions and
services will be driven by the trend of global Fortune 1000 companies turning to
outsourcers to provide cost-effective, high quality customer support solutions.
CCN is currently positioned as one of the leading South African contact centre
outsource providers. The local market for contact centre outsourcing is still at
an early stage, and CCN is playing a significant role in developing this market.
In addition, it is anticipated that the acceleration to an offshore solution,
which combines customer management solutions at significantly lower costs with a
highly skilled labour force, will drive significant growth in the South African
contact centre outsourcing industry. CCN is working closely with all those
including Government who are positioning South Africa as a favoured destination.
The current strength of the Rand will have a short-term impact on the rate of
acceptance of South Africa as a preferred offshore contact centre location.
For and on behalf of the board
Ian Sturrock Lawrence Brick
Chairman Chief Executive Officer
20 November 2003
TRANSFER SECRETARIES
Ultra Registrars (Proprietary) Limited, 11 Diagonal Street, Johannesburg
REGISTERED OFFICE
CCN House, Woodmead Estate, 1 Woodmead Drive, Sandton
DIRECTORS
L Brick (CEO), PH Bacher, JA Hackner, H Rostowsky*, I Sturrock**
*NON-EXECUTIVE ** NON-EXECUTIVE CHAIRMAN
COMPANY SECRETARY: M van der Merwe
SPONSORS: LPC Manhattan Sponsors, 4TH Floor, South Office Tower, Hyde Park
Corner, Johannesburg
email: investorrelations@ccn.co.za
www.ccn.co.za
Date: 20/11/2003 05:10:10 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
