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Erp.com Holdings Limited - Abridged Unaudited Interim Results For The Six Months
Release Date: 19/02/2004 07:00:01 Code(s): ERP
ERP.com Holdings Limited - Abridged unaudited interim results for the six months
ended 31 January 2004
ERP.com Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/010017/06)
("ERP.com" or "the Group")
Share code: ERP
ISIN: ZAE000043493
www.erpcom.co.za
Abridged unaudited interim results for the six months ended 31 January 2004
Revenue up 8%
Net profit for the period up 25%
Headline earnings per share up 24%
Cash equivalents up 44%
Condensed consolidated income statement
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Jan 31 Jan 31 July
2004 2003 2003
R"000 R"000 R"000
Revenue 69 810 64 386 130 728
Profit before taxation 16 350 13 140 27 478
after taking into account the
following items:
Net interest received 2 488 1 705 4 717
Depreciation (620) (840) (1 993)
Taxation (4 987) (4 073) (8 429)
Net profit for the period 11 363 9 067 19 049
Goodwill amortised (43) (43) (371)
Net income for the period
attributable to shareholders 11 320 9 024 18 678
Weighted number of shares on
which earnings per share is
based ("000) 167 506 164 619 166 420
Earnings per share (cents) 6,8 5,5 11,2
Headline earnings per share
(cents) 6,8 5,5 11,5
Dividends per share (cents) - - 5,0
Net asset value per share
(cents) 27,6 21,3 26,8
Reconciliation between earnings and
headline earnings
Net income for the period
attributable to shareholders 11 320 9 024 18 678
Profit on disposal of assets - - 135
Goodwill amortised 43 43 371
Headline earnings 11 363 9 067 19 184
Balance sheet
Unaudited Unaudited Audited
31 Jan 31 Jan 31 July
2004 2003 2003
R"000 R"000 R"000
ASSETS
Non-current assets 6 420 5 331 4 653
Equipment 2 216 3 323 2 439
Goodwill 2 409 747 419
Deferred taxation 1 795 1 261 1 795
Current assets 78 930 58 362 74 095
Inventories and contracts
in progress 525 625 68
Trade and other receivables 18 854 16 466 15 379
Cash and cash equivalents 59 551 41 271 58 648
Total assets 85 350 63 693 78 748
EQUITY AND LIABILITIES
Capital and reserves 47 058 35 573 45 073
Share capital and premium 8 024 9 072 8 918
Retained income 39 034 26 501 36 155
Current liabilities 38 292 28 120 33 675
Total equity and liabilities 85 350 63 693 78 748
Statement of changes in equity
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Jan 31 Jan 31 July
2004 2003 2003
R"000 R"000 R"000
Share capital 168 167 168
Balance at beginning of period 168 164 164
Issued during the period - 3 5
Own shares acquired by subsidiary - - (1)
Share premium 7 856 8 905 8 750
Balance at beginning of period 8 750 8 901 8 901
Issued during the period - 4 320
Share issue expenses written off - - (135)
Own shares acquired by subsidiary (894) - (336)
Retained income 39 034 26 501 36 155
Balance at beginning of period 36 155 19 812 19 812
Net income for the period 11 320 9 024 18 678
Dividend declared (8 441) (2 335) (2 335)
Total capital and reserves 47 058 35 573 45 073
Cash flow statement
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Jan 31 Jan 31 July
2004 2003 2003
R"000 R"000 R"000
Cash flows from operating
activities 12 669 14 991 35 528
Cash flows from investing
activities (2 431) (394) (1 066)
Cash flows from financing
activities (9 335) 7 (2 481)
Net increase in cash and cash
equivalents 903 14 604 31 981
Cash and cash equivalents at
beginning of period 58 648 26 667 26 667
Cash and cash equivalents at
end of period 59 551 41 271 58 648
Comments
The directors are satisfied with the performance of the Group for the first six
months in difficult trading conditions. During the period under review:
- Headline earnings per share increased by 24% to 6,8 cents per share
- Operating margins increased to 19,9%
- Cash resources grew by 44% to R59,5 million despite paying dividends and STC
taxes of almost R9,5 million in November 2003.
The strong Rand caused many customers to postpone planned IT spend, limiting the
turnover increase to 8%.
Group overview
The Group consists of three lines of business:
Enterprise applications
The implementation, integration and management of enterprise applications
solutions. This business was most affected by a slowdown in spend over the first
six months but the pipeline of planned projects is strong and the directors are
confident that there will be an improved performance in the second six months.
Information security
The sale, distribution and support of security products including anti-virus,
intrusion detection, firewalls, authentication and network asset management and
the provision of managed security services. This division continues to show
strong growth through increased market penetration and the addition of new
products and solutions. This line of business should continue to perform well in
the next six months.
Data and content management
The Networking Solutions division performed steadily in the period under review
and should continue to do so in the next six months.
This line of business was enhanced by the acquisition of the business of Exsol,
specialising in document and record management solutions, on the 1st of January
2004. This transaction had no material impact on revenue or earnings for the
period under review and is not expected to have a material impact on earnings
for the year ended 31 July 2004.
Revenue analysis
Enterprise applications - 33%
Information security - 53%
Data and content management - 14%
Expansion into Africa
The newly formed Africa division is profitable and performed steadily during the
period under review. Partners have been established in all major African
countries with a growing pipeline of prospects. This is a long-term initiative,
which the directors believe will make a significant contribution to earnings
over the next five years.
Change to dividend policy
The directors have reviewed the dividend policy that was set two years ago and
have decided to increase the dividend from 20% of headline earnings to 30% of
headline earning with effect from the current financial year.
Directorate
Mr SJ Nathan resigned from the board as a non-executive director with effect
from 31 January 2004. The board is considering a suitable replacement.
Accounting policies
These unaudited interim financial statements have been prepared on a historical
cost basis in accordance with the South African Statements of Generally Accepted
Accounting Practice applicable to interim financial reporting. The accounting
policies of the Group, used in the preparation of the unaudited interim results
announcement, are consistent with those applied in the annual financial
statements for the year ending 31 July 2003.
Rudolf Pretorius Peter Forsyth 19 February 2004
Non-executive chairman Chief executive officer Johannesburg
Directors: R Pretorius (Non-executive chairman), P Forsyth (Chief executive
officer), DTK Brazier*, CJ Lessing*, P Mather*, GM Morris#, P Sneddon#
* Executive directors
Non-executive director
# Independent non-executive directors
Company secretary: A Ritzlmayr (email: andreasr@erpcom.co.za)
Registered address: ERP.com House, Nanyuki Office Park, 69 Nanyuki Drive,
Sunninghill, Sandton 2157. (PO Box 2880, Rivonia 2128)
Transfer secretaries: Computershare Limited, 70 Marshall Street, Marshalltown
2001. (PO Box 61051, Marshalltown 2107)
