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Synergy - Reviewed Interim Results
Synergy Holdings Limited
(Registration number 1995/006315/06)
Share code: SNG ISIN: ZAE000017760
(`Synergy`, `the company` or `the group`)
REVIEWED INTERIM RESULTS
for the six months ended 31 August 2003
SUMMARISED INCOME STATEMENT
Six months Six months Twelve months
ended ended ended
31-Aug-2004 31-Aug-2003 29-Feb-2004
(Reviewed) (Reviewed) (Audited)
R`000 R`000 R`000
Gross revenue 10 357 11 792 21 818
Net profit before taxation 591 991 1 688
Taxation (212) (68) (147)
Net profit after taxation 379 923 1 541
Notes:
Number of shares issued
(`000) 54 410 54 410 54 410
Earnings per share (cents) 0,70 1,70 2,83
Headline earnings
per share (cents) 0,70 1,70 2,83
SUMMARISED BALANCE SHEET
31-Aug-2004 31-Aug-2003 29-Feb-2004
(Review ed) (Reviewed) (Audited)
R`000 R`000 R`000
ASSETS
Non- current assets 2 253 1 711 1 835
Fixed assets 1 612 1 684 1 665
Investments 641 27 170
Current assets 5 631 5 283 5 575
Accounts receivable 2 902 2 234 1 860
Inventories 162 364 256
Cash on deposit and bank
balances 2 567 2 685 3 459
Total assets 7 884 6 994 7 410
EQUITY AND LIABILITIES
Capital and reserves 5 100 4 702 4 882
Issued capital
(including
share premium) 3 593 3 593 3 593
Accumulated
profit/(loss) 1 507 1 109 1 289
Non- current liabilities
Long - term liabilities 411 384 342
Current liabilities 2 373 1 908 2 186
Accounts payable 2 373 1 908 2 186
7 884 6 994 7 410
Number of shares issued
(`000) 54 410 54 410 54 410
Net asset value
per share (cents) 9,37 8,64 8,97
Net tangible value per
share (cents) 9,37 8,64 8,97
CASH FLOW STATEMENT
Six months Six months Twelve months
ended ended ended
31-Aug-2004 31-Aug-2003 29-Feb-2004
(Reviewed) (Reviewed) (Audited)
R`000 R`000 R`000
Cash generated by
operations
(including interest) 82 934 2 649
Dividends paid (160) (543) (980)
Taxation (140) (68) (123)
Net cash from
operating activities (218) 323 1 546
Net cash from
investing activities (665) (544) (1 056)
Net cash from financing
activities (10) 338 4 01
Net (decrease)/increase
in cash (893) 117 891
Cash at beginning of year 3 459 2 568 2 568
Cash at end of year 2 566 2 685 3 459
Statement of changes in
Equity
Opening balance 4 882 4 321 4 321
Share repurchased
and cancelled - - -
Net income for year 379 923 1 541
Dividends paid (160) (543) (980)
Closing balance 5 101 4 701 4 882
Commentary
Synergy focuses on providing Accpac Accounting Software solutions around
software sales, implementation, customisation and associated networking
support.The Group continues to focus specifically in this area.
Accounting policies
These reviewed interim results of the Group comply in all material respects
with South African Statements of Generally Accepted Accounting Practice and
are consistent with those applied in the audited financial statements to 28
February 2004.
Auditor`s review opinion
Synergy`s external auditors, Van Sitterts, Chartered Accountants (SA), have
reviewed these results. Their unqualified review opinion is available for
inspection at Synergy`s registered office.
Financial comment
We anticipated and warned of the possibility of flat to slightly negative EPS
numbers, due to a larger taxation charge. This does represent a portion of the
decline in earnings. Costs associated to the creation of a Cape Town branch
and a decrease in sales have however, been the material factors affecting the
decline in earnings.
Cape Town Branch - Costs were incurred in the pursuit of acquisition
possibilities in the Cape Area. After exploring these options, the decision
was taken to create a branch from scratch. The branch is in startup phase and
as such will continue to impair earnings and reduce cash reserves. As at the
date of this publication however, we are optimistic as to this branches
potential and its ability to reach a break-even by, or soon thereafter, the
financial year end.
Decrease in sales - Historically we have had a high level of success with
campaigns targeted at upgrading DOS users to the Windows application. This
year the level of response was significantly less than we had experienced
before and we believe that the bulk of the users intending to upgrade have
done so already. This is particular to the Johannesburg market.
Prospects
We have identified a material downward trend in terms of labour billing
related to ad- hoc software support. This is particularly concerning as this
revenue stream has always represented a significant portion of our earnings.
We believe that this trend relates to the stabililsation of the platforms
ACCPAC runs on, and further, a maturity in the ACCPAC product itself.
We have been hesitant to restructure on the basis of this observation as it
has taken a period to determine whether this is a purely cyclical occurrence.
We have determined that this trend is not cyclical and as such we will modify
our product model and overhead structure to accommodate this change. We
anticipate a negative impact on earnings until these changes have been
effected.
Dividend
Given the increase in debtors days, the cash requirements of the new branch
and the anticipated change in business model, the board has decided that it
would not be prudent to declare an interim dividend.
For and on behalf of the Board
Ashley Regenass
CEO
18 November 2004
ACCPAC
Business Partner
ACCPAC
Development Partner
Date: 18/11/2004 04:51:59 PM
Produced by the JSE SENS Department
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