| Wed 19 May 2004, 16:31 | | Unaudited Interim Results For The Six Months Ended |
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Spescom Limited - Unaudited Interim Results For The Six Months Ended 31 March
2004
Spescom Limited
(Registration number 1987/001083/06)
Share code: SPS ISIN: ZAE000017919
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2004
INCOME STATEMENT
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31/03/04 31/03/03 30/09/03
R"000 R"000 R"000
Turnover 175 187 185 662 355 544
From continuing operations 175 187 185 662 353 894
From discontinued operations - - 1 650
Cost of sales 68 541 82 320 171 580
From continuing operations 68 541 82 320 171 145
From discontinued operations - - 435
Operating profit 22 361 26 952 32 579
From continuing operations 22 361 26 952 31 743
From discontinued operations - - 836
Amortisation of goodwill (3 121) (3 440) (7 192)
Finance charges (2 654) (8 320) (13 860)
Investment income 1 308 4 184 7 018
Net profit before abnormal items 17 894 19 376 18 545
Non-trading items (308) - (7 648)
Net profit before tax, after abnormal items 17 586 19 376 10 897
Taxation (786) (148) (276)
Net profit after tax 16 800 19 228 10 621
Minority interests 407 (150) 4 105
Profit for the period 17 207 19 078 14 726
HEPS (cents) 39,1 42,4 55,9
EPS (cents) 32,5 36,1 27,8
Notes:
1. Accounting policies
These results have been compiled in accordance with the South African Statements
of Generally Accepted Accounting Practice, the Listings Requirements of the JSE
Securities Exchange South Africa ("JSE") and Schedule 4 of the South African
Companies Act of 1973 (as amended).
The accounting policies adopted are consistent with those of the previous
financial year except for the adjustment noted below.
The external auditors have not reviewed the interim results for the period
ended 31 March 2004.
2. Prior year adjustment
During the period under review, the Group changed its accounting policy with
respect to the consolidation of the Spescom Limited Share Trust (the "staff
trust").
In order to conform with the requirements issued by the JSE, the Group now
consolidates the staff trust. The comparative amounts have been appropriately
restated. There has been no effect on the prior year profit as a result of this
change.
3. Information per share
Based on net profit after taxation adjusted for capital items included in
abnormal items and 52 896 922 weighted average shares in issue (March 2003: 52
896 922 and September 2003: 52 896 922).
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31/03/04 31/03/03 31/09/03
R"000 R"000 R"000
Net profit for the period 17 207 19 078 14 726
Non-trading items 308 - 7 648
Amortisation of goodwill 3 121 3 440 7 192
Loss/(Profit) on sale of fixed assets 23 (111) (11)
20 659 22 407 29 555
4. Earnings per share
Based on a net profit for the year of R17,207 million
(March 2003: R19,078 million and September 2003:
R14,726 million) and weighted average shares in
issue of 52 896 922 (2003: 52 896 922).
5. Non-trading items
Write-down and sale of investments (308) - (4 430)
Capitalisation restructuring costs - - (788)
Loss on discontinuance of businesses - - (2 430)
(308) - (7 648)
6. Post balance sheet events
During April 2004 the shareholders approved a specific issue of 20,0 million
shares for cash to Vantage Capital Fund Managers (Pty) Limited at a price of 120
cents per Spescom share.
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31/03/04 31/03/03 30/09/03
R"000 R"000 R"000
OPERATING ACTIVITIES
Cash generated by operations 26 105 33 745 67 190
Working capital changes (25 071) 10 608 98 655
Cash generated by operating activities 1 034 44 353 165 845
Net finance charges (1 346) (4 136) (6 842)
Taxation paid (650) (166) (738)
Net cash flow from operating activities (962) 40 051 158 265
INVESTING ACTIVITIES
Investment to expand
and maintain operations (4 381) 254 (9 212)
(4 381) 254 (9 212)
FINANCING ACTIVITIES
Bank financing and facilities (64 730) (59 222) (97 456)
(64 730) (59 222) (97 456)
Net change in cash and cash equivalents (70 073) (18 917) 51 597
Cash and cash equivalents:
- At beginning of period 95 637 44 040 44 040
- At end of period 25 564 25 123 95 637
BALANCE SHEET
Unaudited Unaudited Audited
as at as at as at
31/03/04 31/03/03 30/09/03
R"000 R"000 R"000
ASSETS
Non-current assets
Property, vehicles and equipment 31 029 33 564 32 867
Intangible assets 19 311 20 135 19 672
Goodwill 30 618 37 839 34 406
Investments and loans 18 975 32 523 18 986
Deferred Taxation 7 288 6 165 7 709
107 221 130 226 113 640
Current assets 91 746 109 441 164 671
Inventories 13 304 13 666 11 849
Taxation prepaid 1 038 1 602 1 986
Accounts receivable 51 840 69 050 55 199
Cash resources 25 564 25 123 95 637
TOTAL ASSETS 198 967 239 667 278 311
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 23 947 24 016 23 947
Non-distributable reserves 14 412 19 854 14 534
Distributable reserves/(accumulated loss) 3 911 (8 944) (13 296)
Ordinary shareholders" equity 42 270 34 926 25 185
Outside shareholders" interest
in subsidiary companies 556 467 396
Interest of all shareholders 42 826 35 393 25 581
Non-current liabilities 38 428 14 057 67 515
Contract advances and deferred
maintenance revenue - - 20 047
Interest bearing liabilities 38 428 14 057 47 468
Current liabilities 117 713 190 217 185 215
Current portion of interest
bearing liabilities 1 750 - 7 643
Bank finance 4 793 87 318 34 544
Taxation 454 202 1 686
Trade payables 50 001 55 380 41 768
Provisions, contract advances
and deferred maintenance revenue 60 715 47 317 99 574
Total equity and liabilities 198 967 239 667 278 311
EQUITY STATEMENT FOR THE PERIOD ENDED 31 MARCH 2004
Distributable Non-
reserves/ distri-
(accumulated Share Share butable
loss) capital premium reserves Total
R"000 R"000 R"000 R"000 R"000
Balance at
30 September 2002 (28 022) 587 33 188 900 6 653
Foreign currency translation
loss arising on consolidation 18 954 18 954
Prior year adjustment arising
on consolidation of
Spescom Limited Share Trust (95) (9 664) (9 759)
Net profit for the period 19 078 19 078
Balance at
31 March 2003 (8 944) 492 23 524 19 854 34 926
Foreign currency translation
gain arising on consolidation (5 320) (5 320)
Prior year adjustment arising
on consolidation of
Spescom Limited Share Trust (69) (69)
Net loss for the period (4 352) (4 352)
Balance at
30 September 2003 (13 296) 492 23 455 14 534 25 185
Foreign currency translation
loss arising on consolidation (122) (122)
Net profit for the period 17 207 17 207
Balance at 31 March 2004 3 911 492 23 455 14 412 42 270
SEGMENTAL ANALYSIS FOR THE PERIOD ENDED 31 MARCH 2004
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31/03/04 31/03/03 30/09/03
R"000 R"000 R"000
Sector turnover
Information content management solutions 73 341 74 623 106 065
Communication integration activities 87 598 94 602 169 855
Services and other 14 248 16 437 79 624
175 187 185 662 355 544
Operating profit/(loss)
Information content management solutions 552 (234) 6 515
Communication integration activities 16 559 15 321 24 967
Services and other 5 250 11 865 1 097
22 361 26 952 32 579
Geographic turnover
Africa 104 908 108 229 201 856
Europe 52 098 54 278 113 076
USA 16 137 22 458 40 612
Other 2 044 697 -
175 187 185 662 355 544
Proprietary technology
Own IP 91 178 98 013 193 052
3rd Party IP 84 009 87 649 162 492
175 187 185 662 355 544
COMMENTARY
Review of operations
The financial half year, ended 31 March 2004, was marked by the achievement
of headline earnings of R20,6 million, translating into 39,1 cents per share.
The Group reports a 50% increase in trading profits for the first six months,
when compared to the corresponding period last year. Foreign exchange gains
represent 20% of operating income as opposed to 50% for the first half of 2003.
Trading profits increased despite a 7% revenue decline.
This is mainly attributable to the following factors:
* improved margins on sales of proprietary products.
* continued focus on the management of operating costs and efficient
utilisation of resources.
Substantial debt repayments were effected subsequent to year end resulting in a
notable improvement in gearing levels.
Black Economic Empowerment ("BEE")
Subsequent to March 2004, the Group concluded a BEE equity transaction with
the Vantage Capital Group, chaired by Mutle Mogase, raising R24 million. This
initiative is in keeping with Spescom"s commitment to the concept of BEE and
meaningful transformation at all levels of business.
The cash raised will be used as working capital for expansion purposes.
Prospects
All divisions of the South African operations continue to generate solid
financial results.
The contact centre division of the Group is exceptionally well positioned to
capitalise on the international trend in the contact centre market for the
establishment of local call centres that support offshore-based multinationals.
The Group"s primary strategic objective remains the globalisation of its
business, utilising proprietary technology and intellectual property.
In this regard the Group has directed its technology development endeavours to
focus on acknowledged trends in the ICT industry. The resultant products address
key market sectors including, Information Content Management - regarded as a
central driver of enterprise IT strategy, and the voice transaction management
arena - a rapidly expanding market integral to the trend in technology
convergence.
Spescom has invested in developing products to address these emerging
paradigms, creating product differentiators that extend the traditional content
management capabilities to an integral platform for converging content, asset
management and voice.
This innovative approach has resulted in the Group"s products gaining
international recognition, evidenced by:
* large value contracts being successfully concluded with leading industry
players offshore.
* distributorship agreements concluded with international channel partners
providing Spescom"s products with established global conduits to market plus
support infrastructures.
The immediate challenge facing Spescom in its globalisation strategy is to
increase sales and marketing capabilities primarily in the USA and Europe. In
this regard various offshore fund raising opportunities are being explored.
The outlook for the remainder of the financial year is positive.
Dividend
Spescom continues with its policy of not declaring a dividend. This policy
remains subject to review.
Directorate
Carl Mostert was appointed executive director to the board with effect from 1
January 2004.
Walter Kansteiner III and Colin Rezek were appointed non-executive director and
alternate non-executive director to the board on 5 April 2004 and 13 May 2004,
respectively.
In compliance with the recommendations contained in the King Report, the Spescom
board will continue to undergo reconstitution as and when necessary.
By order of the board
A Farah J Palmer
Chief Executive Officer Chief Financial Officer
Johannesburg
19 May 2004
Directors:
JP Myers*+ (Chairperson), A Farah, HJ Isaacman, W Kansteiner*+, V Leas, MC
Mogase+ (alt. C Rezek+), C Mostert, L Ogilvy+, J Palmer, P Vallet+.
*American, +Non-executive
Company Secretary:
AG Johnston
Registered Office:
Spescom Park,
Cnr Alexandra Avenue and Second Road,
Halfway House, Midrand, 1685
Tel +27 (11) 266 1500
Registrar:
Computershare Investor Services 2004 (Pty) Ltd,
70 Marshall Street, Johannesburg, 2001.
Tel: +27 (11) 370 5000
Spescom Limited
(Registration number 1987/001083/06)
Share code: SPS ISIN: ZAE000017919
Website: www.spescom.com
Date: 19/05/2004 03:55:12 PM Produced by the JSE SENS Department
