| Thu 5 May 2005, 17:59 | | Infowave - Abridged report relating to the audited |
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Infowave - Abridged report relating to the audited financial results for the
year ended 28 February 2005
Infowave Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/017276/06)
Share code: IFW & ISIN code: ZAE000016440
(`Infowave`, `the Group` or `the Company`)
ABRIDGED REPORT RELATING TO THE AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 28
FEBRUARY 2005
ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING
SPECIFIC ISSUE OF RETENTION SHARES
Consolidated Income Statement
2005 2004
R R
Revenue 31 852 965 30 353 101
Cost of sales (15 469 372) (15 758 491)
Gross profit 16 383 593 14 594 610
Administrative, selling and other (8 821 263) (7 751 454)
costs
Profit from operations 7 562 330 6 843 156
Interest income 347 888 806 567
Revaluation of listed preference 392 070 -
shares
Finance costs (2 139) (27 110)
Profit before taxation 8 300 149 7 622 613
Taxation (3 165 680) (2 683 092)
Profit for the year after taxation 5 134 469 4 939 521
Loss from associate (7 625) -
Profit for the year 5 126 844 4 939 521
Earnings per share (cents) 5,81 5,50
Headline earnings per share (cents) 5,81 5,50
Fully diluted earnings per share 5,71 5,34
(cents)
Dividends per share (cents) 3,00 3,00
Consolidated Balance Sheet
2005 2004
R R
ASSETS
Non-current assets 1 203 337 1 257 737
Property and equipment 578 077 712 515
Intangible assets 24 340 225 274
Investment in associated company 305 000 -
Deferred taxation asset 295 920 319 948
Current assets 12 700 276 11 776 072
Accounts receivable 6 669 475 3 951 173
Listed preference shares 4 258 670 -
Cash resources 1 772 131 7 824 899
Total assets 13 903 613 13 033 809
EQUITY AND LIABILITIES
Capital and reserves 10 253 622 10 568 065
Issued capital 8 405 9 061
Share premium 105 190 338 194
Accumulated profit 10 140 027 10 220 810
Non-current liabilities
Deferred taxation liability 113 700 -
Current liabilities 3 536 291 2 465 744
Accounts payable 3 268 973 2 204 591
Taxation payable 267 318 199 851
Current portion of long-term - 61 302
borrowings
Total equity and liabilities 13 903 613 13 033 809
Consolidated Cash Flow Statement
2005 2004
R R
Cash Flows From Operating
Activities
Profit from operations 7 562 330 6 843 156
Adjustment for:
Depreciation and amortisation 699 263 654 993
Cash generated from operations, 8 261 593 7 498 149
before working capital changes
Working capital changes
Increase in receivables (2 718 302) (556 586)
Increase/(decrease)in payables 1 064 382 (1 687 446)
Cash generated from operations 6 607 673 5 254 117
Taxation paid (2 960 485) (3 090 017)
Interest income 347 888 806 567
Finance costs (2 139) (27 110)
Dividend paid to shareholders (2 744 063) (2 674 961)
Net cash inflow from operating 1 248 874 268 596
activities
Cash Flows From Investing
Activities
Acquisition of equipment (356 827) (342 124)
Investment in intangible assets (7 064) (432 277)
Purchase of listed preference (3 866 600) -
shares
Investment in associated company (312 625)
Net cash outflow from investing (4 543 116) (774 401)
activities
Cash Flows From Financing
Activities
Repurchase of company`s shares (2 936 701) -
Proceeds of share issues 239 477 55 282
Long-term loan repaid (61 302) (224 192)
Net cash outflow from financing (2 758 526) (168 910)
activities
Net decrease cash resources (6 052 768) (674 715)
Cash resources at beginning of 7 824 8 499 614
year 899
Cash resources at end of year 1 772 131 7 824 899
Consolidated Statement of Changes in Equity
Share Share Accumulated Total
Capital Premium Profit R
R R R
Balance at 28 February 8 910 283 063 7 956 250 8 248 223
2003
Profit for the year - - 4 939 521 4 939 521
Shares issued during 151 55 131 - 55 282
the year
Dividend paid - - (2 674 961) (2 674 961)
Balance at 29 February 9 061 338 194 10 220 810 10 568 065
2004
Profit for the year - - 5 126 844 5 126 844
Shares issued during 234 239 243 - 239 477
the year
Shares repurchased (890) (472 247) (2 463 564) (2 936 701)
during the year
Dividend paid - - (2 744 063) (2 744 063)
Balance at 28 February 8 405 105 190 10 140 027 10 253 622
2005
Accounting policies
These annual financial statements have been prepared in accordance with South
African Statements of Generally Accepted Accounting Practice. The accounting
policies used are consistent with those applied in the last annual report.
These annual financial statements have been audited by Deloitte & Touche whose
audit report is available for inspection at the company`s registered office.
Annual Report and Notice of Annual General Meeting
As the annual report for the year ended 28 February 2005 (`the annual report`)
will be posted to shareholders on Friday, 6 May 2005, within 3 months of
InfoWave`s year end, this announcement is not required to appear in the press
and will not be sent to shareholders. The annual report contains a notice
convening the annual general meeting of InfoWave shareholders for the year ended
28 February 2005(`the AGM`). The AGM will be held at Deloitte, Deloitte Place, 2
Pencarrow Crescent, Pencarrow Park, La Lucia Ridge Office Estate, La Lucia on
Tuesday, 31 May 2005 at 15h30.
REPORT TO STAKEHOLDERS
Financial results
Revenue grew 5% over the prior year with growth of 12% in the second half
compensating for the 2% decline in revenue reported for the first half. During
the year the company repurchased and cancelled 9,8% of its shares in the open
market in terms of the general authority granted by shareholders. Headline
earnings per share increased by 5,6% to 5,81 cents.
Dividends
Dividend number 2 of 3 cents per share was paid to shareholders on 14 June 2004.
The Board of Directors of the company (`the board`) considers that its dividend
policy remains appropriate and has declared dividend number 3 of 3 cents per
share which will be payable to shareholders recorded in the register of the
company on Friday, 10 June 2005. This represents a dividend cover of 1.94 times.
The salient dates relating to the dividend are as follows:
2005
Last day to trade in order to participate in the Friday, 3 June
dividend `cum` dividend
The shares will trade `ex` dividend from the Monday, 6 June
commencement of business on
The record date will be Friday, 10 June
The dividend will be paid on Monday,13 June
Share certificates may not be dematerialised or rematerialised between Monday 6
June 2005 and Friday 10 June 2005, both dates inclusive
Strategy
During the year, the group revised its strategy to place additional dedicated
focus on the core business with specific emphasis on understanding our clients`
business needs and responding with excellent products and services. In
parallel, property and further niche software business will be pursued with
dedicated focus. The group has been reorganised accordingly and will invest
additional resources in sales and marketing. The group is considering both
organic and acquisitive growth to deliver on the growth and diversification
strategy.
The board
On 1 June 2004 Ralph Collis became non-executive chairman. He expressed his
ongoing commitment to InfoWave and remains a major shareholder of the company.
This change is consistent with the board`s aim to increase the ratio of non-
executive directors to executive directors in accordance with King II guidelines
on corporate governance. InfoWave appointed Carol Jessop an executive director
responsible for the operations of the Sugar and Downstream business unit and
Bevleane Carrilho as financial director on 1 March 2005. Tiffany Dunsdon
continues to manage the overall business development and strategic direction of
the group and the executive. Pat Naicker retires by rotation at the Annual
General Meeting and has chosen not to offer himself for re-election due to
personal reasons. The board would like to extend its sincere thanks to Pat for
his service and contribution to the board over the past five years.
Bruno Lionnet is responsible for the new niche solutions business unit, in terms
of the new strategy and Cindy von Pannier is concentrating on the group`s sales
and marketing portfolio. The board plans to appoint a further non-executive
director pursuant to an ownership equity BEE transaction.
The following is a summary of the responsibilities of the executive board
members:
Tiffany Dunsdon Chief executive officer
Bevleane Carrilho Financial director
Carol Jessop Sugar and downstream business unit director
Bruno Lionnet New niche solutions business unit director
Cindy von Pannier Sales and marketing director
Specific issue of retention shares
As part of the company`s retention and reward strategy since listing, the Board
has decided to award Carol Jessop and Bev Carrilho 300 000 shares each
(`retention shares`) by way of a specific issue of shares for cash as defined by
the JSE at an issue price of 33 cents per share, being the weighted average
trading price of InfoWave securities for the thirty business days ending 21
April 2005 (`the specific issue`). The specific issue is subject to not less
than 75% approval of all shareholders present or voting by proxy at the AGM. As
the specific issue is a related party transaction in terms of rule 5.51(f) of
the JSE Listings Requirements, Sasfin Corporate Finance, a division of Sasfin
Bank Limited (`Sasfin Corporate Finance`) has been appointed by the board to
advise InfoWave shareholders on whether the terms and conditions of the specific
issue are fair and reasonable (`fair and reasonable report`). The fair and
reasonable report is available for inspection at the company`s registered
office.
The listing
InfoWave has achieved one of the key requirements for a main board listing of a
pre-tax profit in excess of R8 million and intends to pursue a main board
listing in due course.
Broad based black economic empowerment
The group`s strategy reinforces that BEE transformation is both a moral
imperative and essential to protect the business and create new avenues for
growth available to the company.
The ICT charter
InfoWave was involved in the KwaZulu-Natal working committee of the ICT BEE
Charter which was due to become effective on 1 March 2005, but which has been
delayed. InfoWave is addressing all elements of the Charter Scorecard and will
seek ICT Council accreditation as soon as it believes it qualifies for
accreditation.
Ownership equity
InfoWave is currently 25% black-owned mainly by virtue of employee share
ownership. The funding of an equity deal with a third party remains a challenge.
Enterprise development
InfoWave assisted in founding Adapt-IT (Pty) Limited a black-owned SMME, by
providing loan capital, facilities and services. InfoWave holds 25% of Adapt-IT
and continues to provide financial and advisory services to Adapt-IT. Adapt-IT
provides internet and intranet application solutions.
Social investment
The company continues with its long term commitment to assist a rural secondary
school, the Ebuta Trust. The corporate social investment budget for the year
ahead has been significantly increased in line with the aims of the ICT Charter.
This includes both general corporate social investment and social investment
targeted at bridging the digital divide by assisting projects which aim to
broaden access to information and communications technology.
Outlook
The clear strategy identifies good prospects for the year ahead in the core
sugar business and the niche property business. Dedicated resources will pursue
the new niche business aspect of the strategy. The executive and management are
focused and committed to the successful implementation of the strategy.
Appreciation
We would like to thank our customers for their ongoing loyalty to InfoWave and
our employees for their dedication to our customers and to InfoWave.
RP Collis
Non-executive chairman
T Dunsdon
Chief executive officer
Date: 05/05/2005 05:30:08 PM
Produced by the JSE SENS Department
