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Integrear Limited - Interim Results
INTEGREAR LIMITED
(Registration number: 1989/001319/06)
Share Code: ITG
ISIN: ZAE000027231
INTERIM RESULTS
CONSOLIDATED INCOME STATEMENT
Unaudited Audited
For the six months ended Year ended
31 December 30 June
2003 2002 2003
R"000 R"000 R"000
Revenue 4 902 5 322 8 835
Cost of sales (1 430) (1 940) (4 284)
Gross profit 3 472 3 382 4 551
Operating expenses (2 987) (3 174) (5 721)
Profit (loss) from 485 208 (1 170)
operations
Finance costs (12) (15) (29)
Goodwill amortised (168) (168) (336)
Income from investments 29 50 145
Profit (loss) before tax 334 75 (1 390)
Income tax (expense) (150) (73) 172
benefit
Net profit (loss) for 184 2 (1 218)
the period
Weighted average number 12 564 190 12 564 190 12 564 190
of ordinary shares in
issue
Basic earnings (loss) 1,46 0,02 (9,70)
per share (cents)
Headline earnings (loss) 2,80 1,35 (7,02)
per share (cents)
Reconciliation between
basic and headline
earnings (loss)
Basic earnings (loss) 184 2 (1 218)
Goodwill amortisation 168 168 336
Headline earnings (loss) 352 170 (882)
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Audited
For the six months ended Year ended
31 December 30 June
2003 2002 2003
R"000 R"000 R"000
OPERATING ACTIVITIES
Cash receipts from customers 3 241 3 348 8 886
Cash paid to suppliers and (4 052) (4 514) (8 770)
employees
Cash (used in) from operations (811) (1 166) 116
Interest paid (12) (15) (29)
Interest received 29 50 145
Income taxes received (paid) 48 (84) (84)
Net cash (used in) from operating (746) (1 215) 148
activities
INVESTING ACTIVITIES
Purchases of equipment (19) (38) (74)
Increase in loans receivable (10) (20) 0
Net cash used in investing (29) (58) (74)
activities
FINANCING ACTIVITIES
Decrease in borrowings (33) (6) (17)
Net cash used in financing (33) (6) (17)
activities
Net (decrease) increase in cash (808) (1 279) 57
and cash equivalents
Effect of foreign exchange rate (30) 0 0
changes
Cash and cash equivalents at 1 963 1 906 1 906
beginning of the period
Cash and cash equivalents at end 1 125 627 1 963
of the period
CONSOLIDATED BALANCE SHEET
Unaudited Audited
For the six Year ended
months ended 30 June
31 December
2003 2002 2003
R"000 R"000 R"000
ASSETS
Non-current assets 1 324 1 712 1 728
Equipment 154 245 202
Goodwill 168 504 336
Deferred tax asset 872 781 1 022
Tax asset 113 156 161
Loans receivable 17 26 7
Current assets 4 355 4 222 3 532
Trade and other receivables 3 230 3 595 1 569
Bank balances and cash 1 125 627 1 963
Total assets 5 679 5 934 5 260
EQUITY AND LIABILITIES
Capital and reserves 2 191 3 227 2 007
Share capital 126 126 126
Share premium 686 686 686
Non-distributable reserves 828 828 828
Capital redemption fund 48 48 48
Accumulated profits 503 1 539 319
Non-current liabilities
Long term borrowings 37 83 52
Current liabilities 3 451 2 624 3 201
Trade and other payables 3 408 2 583 3 140
Short term borrowings 43 41 61
Total equity and liabilities 5 679 5 934 5 260
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Non share Capital Distribu- Redemption Accumulated
capital share table fund profits Total
R"000 premium reserve
R"000 R"000 R"000 R"000 R"000
Balance 126 686 828 48 1 537 3 225
at 30
June
2002
Net - - - - 2 2
profit
for the
period
Balance 126 686 828 48 1 539 3 227
at 31
December
2002
Net loss - - - - (1 220) (1 220)
for the
period
Balance 126 686 828 48 319 2 007
at 30
June
2003
Net - - - - 184 184
profit
for the
period
Balance 126 686 828 48 503 2 191
at 31
December
2003
COMMENTS
Leading indicators in the market show that the South African IT sector is once
again poised for an upswing and our company is ready and prepared for this
eventuality.
The group is experiencing growing sales success in the market while gaining
practical experience in implementing its software solutions and services in the
Credit Management, Municipal Debt Collection and Tertiary Education industries.
FINANCIAL
The financial statements are unaudited and have been prepared in accordance with
South African statements of Generally Accepted Accounting Practice and are based
on approved accounting policies which have been consistently applied.
The headline earnings are positive at 2.80 cents per share after a reported loss
of 7.02 cents per share as at 30 June 2003.
Even though sales are still modest, the controls exercised in the company to
increase the gross margin and decrease operating expenses have been successful.
The result is an overall increase in the profitability of the group.
New contracts have been concluded which will not only increase the exposure of
our products in their respective target markets, but also ensure a steady income
stream over the lifetime of these application"s utilisation in the market.
One example is AIG, an existing client, selected Integrear to implement a
workflow solution for their short term insurance processes. The company is
proud to have been selected by such a large corporation to assist them in this
application.
PROSPECTS
The Solidus Credit Management Suite is making inroads into the commercial credit
management sector. This product suite manages processes throughout the credit
management cycle, from credit application approval to client maintenance and
debt collection. Businesses are experiencing an increasing awareness of the
need of credit grantors to automate their credit processes, while providing
higher levels of service at a reduced cost.
The Zeus debt collection system, specially developed for the municipal sector,
has been purchased by and implemented at a number of municipalities in the
country. The results from these implementations are positive, and the company
is convinced that more contracts will be concluded in the near future, based on
the amount of interest in the market.
As the market leader for timetable optimisation systems to Tertiary Education
institutions in South Africa, Integrear is well positioned to dominate this
market and to extend this product offering to other areas of Southern Africa.
The company is continuously aware of the clients" needs and our research and
development remains in constant contact with the market, and is cognizant of the
necessity to provide practical business solutions at competitive prices.
The quality of the products, and the accessible superior service to our clients,
remain the focal areas of the company to continue to distinguish itself in a
competitive environment.
POST BALANCE SHEET EVENTS
It was resolved that an application will be made to the Alternative Exchange
(Alt-X) of the JSE for a listing due to the proposed closure of the Development
Capital Market, where the company is currently listed.
Mr LLS van der Watt resigned as director on 12 March 2004 and Mr M Lindeque was
appointed to be responsible for the portfolio of Finances on the same date.
DIVIDEND
No dividend is declared for the period under review.
By order of the Board
L du Plessis
Chairperson
16 March 2004
Transfer secretaries Registered office
Computershare Limited 265 West Avenue
9th Floor, 70 Marshall Street Centurion, 0157
Johannesburg, 2001
Directors: L du Plessis* (Chairperson), TJ Hill (Managing), BP Jones*, GJ
Oosthuizen*, M Lindeque
* Non-executive
Date: 26/03/2004 03:28:44 PM Produced by the JSE SENS Department
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