| Wed 29 Sep 2004, 18:11 | | RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2004 |
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SQUARE ONE - UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2004
SQUARE ONE SOLUTIONS GROUP LIMITED
Registration number 1999/026822/06
Share code: SQE ISIN: ZAE000023768
(`Square One` or `the Group`)
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2004
BALANCE SHEETS
30 June 30 June 31 December
2004 2003 2003
R`000 Unaudited Reviewed Audited
ASSETS
Non-current assets 13 613 2 353 13 891
Fixed assets 1 214 2 199 1 327
Intangible assets 8 326 - 8 921
Investments 16 16 16
Loans receivable 430 20 -
Deferred tax 3 627 118 3 627
Current assets 49 265 37 703 44 734
Inventories 15 687 16 190 15 244
Accounts receivable 32 758 20 666 28 620
Taxation 31 - 31
Bank balances 789 847 839
Total assets 62 878 40 056 58 625
EQUITY AND LIABILITIES
Issued capital 9 020 9 020 9 020
Retained income (4 491) (3 526) (3 559)
Outside shareholders` interest 1 217 476 503
Outside shareholders` loans 365 365 365
Long-term liabilities - 1 613 -
Interest bearing liabilities 21 450 - 20 858
Non-distributable reserve - - -
Current liabilities 35 317 32 108 31 438
Accounts payable 26 116 10 820 22 716
Taxation - 33 -
Short-term loans - 845 -
Current portion of long-term
liabilities 4 722 45 7 287
Provisions 1 591 - 1 297
Bank overdraft 2 888 20 365 138
Total equity and liabilities 62 878 40 056 58 625
STATEMENTS OF CHANGES IN EQUITY
Distribu- Capital
Share Share table and
R`000 capital premium reserves reserves
Balance at 31 December 2003 220 8 800 (3 559) 5 461
Deficit for period - - (932) (932)
Balance at 30 June 2004 220 8 800 (4 491) 4 529
NOTE:
The interim statements have been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice and the accounting
policies used in the preparation of these interim results are consistent with
those applied in the previous reporting period.
INCOME STATEMENTS
Six Six
months to months to 12 months to
30 June 30 June 31 December
2004 2003 2003
R`000 Unaudited Reviewed Audited
Turnover 58 753 36 647 91 422
Operating profit 979 4 087 5 612
Net finance costs (1 197) (1 958) (3 335)
(Loss)/Profit before taxation (218) 2 129 2 277
Taxation - (639) (793)
Net (loss)/profit after taxation (218) 1 490 1 484
Profit attributable to
outside shareholders (714) (115) (142)
Net (loss)/profit attributable to
ordinary shareholders (932) 1 375 1 342
Earnings per share (cents) (0.04) 6.3 6.1
Headline earnings per share
(cents)
Earnings per share is calculated
by using the relevant
attributable profits and issued
shares (0.02) 6.3 7.8
Reconciliation of earnings
to headline earnings
Attributable (loss)/profit (932) 1 375 1 342
Goodwill 424 - 369
Headline (loss)/earnings (508) 1 375 1 711
Number of issued shares 22 000 000 22 000 000 22 000 000
ABRIDGED CASH FLOW STATEMENTS
Six Six
months to months to 12 months to
30 June 30 June 31 December
2004 2003 2003
R`000 Unaudited Reviewed Audited
Net flow from operating activities (419) 1 180 4 732
Net flow from investing activities (278) (409) (9 873)
Net flow from financing activities (2 103) (228) 26 642
Net (decrease)/increase in cash (2 800) 543 21 501
Cash at beginning of period 701 (20 711) (20 800)
Cash at end of period (2 099) (20 168) 701
COMMENTARY
NATURE OF BUSINESS
Square One is an information technology company listed under the `Information
Technology (IT) - Software and Computer Services` sector of the JSE Securities
Exchange South Africa (`JSE`) lists. Square One`s primary service focuses on
providing niche, business enabling solution offerings which create value for
our clients through the application of our clients` business knowledge and
Square One`s best practices, technological skills and capability.
The Group`s primary focus is the provi- sion of value-based offerings centred
around biometric authentication, power solutions, product coding and marking
solutions, application and systems integration services, wireless and
infrastructure solutions, storage solutions and telecommunications and service
provider solutions to key target markets.
The overall position of the Group remains strong with sales for the period
under review having increased by 60% over the same period in 2003 primarily on
the back of strong performance by Square One Power and the Coding and Marking
lines of business. The Group has also maintained consistent growth in the
Channel line of business particularly in the colour printer, consumable and
service offering. As part of the Group strategy to expand the Group`s business
offerings, as well as to solidify its Black Economic Empowerment credentials,
the Group concluded two acquisitions in the first half of the year.
These acquisitions have expanded the Group`s skills base in the areas of
Application and Infrastructure Systems Integration, and consists of a team of
dedicated IT professionals who specialise in, inter alia, the following areas
of business: architecture, integration and delivery of IT infrastructure
solutions and the implementation thereof, either on a primary or secondary
contractor basis.
The ongoing investment required in our Business Solutions line of business,
coupled to the costs associated with the acquisitions, have played an
instrumental role in the reflected loss to date. Whilst the strategic decision
to invest in a new line of business, coupled with these acquisitions are
expected to yield positive results in the future, management is still in the
final stages of working through the process of streamlining and re-aligning the
Group so as to maximise the consolidated return to shareholders. The board has,
in the interests of taking the newly consolidated business forward into the
second half of the year, decided to absorb the full extent of the costs of the
acquisitions in the period under review.
These new lines of business have or are in the process of securing new business
at attractive margins in line with our stated objectives.
This has resulted in the operating profit reducing from R4,087 million to R979
000. The conversion of the Group`s overdraft facility to a term loan at
favourable terms and interest rates have assisted Square One in reducing its
net finance cost by 39% to R1,197 million. Headline earnings have reduced by
R1,882 million to a headline loss of R507 000 resulting in a headline loss of
0,02 cent per share.
Square One boasts 18 years of business experience, with national representation
and the expanded Group adds additional value to customers. The above results
are in line with our strategic intent.
DECLARATION OF DIVIDEND
The board has prudently decided not to declare a dividend.
On behalf of the board
Garth A Coetser
Chairman
William T James
Chief Executive Officer
REGISTERED ADDRESS
Eastgate Park, 8 Commerce Crescent West
Eastgate Extension 13, Sandton
(PO Box 1163, Gallo Manor 2146)
Telephone: (011) 321-5900
Telefax: (011) 444-2462
TRANSFER SECRETARIES
Ultra Registrars (Pty) Ltd
PO Box 4844, Johannesburg 2000
SPONSOR
Bridge Capital Service (Pty) Ltd
PO Box 651010, Benmore 2010
Directors: G A Coetser* (Chairman),
C L Alexander,
B A Croza,
W T James (Chief Executive Officer),
R R Masebelanga* (Deputy Chairman),
A Meyer, R T Muzariri (Vice Chairman),
B Thokoane* (Non-executive)
www.sq1.co.za
Date: 29/09/2004 05:09:11 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
