| Mon 19 Sep 2005, 8:20 | | ERP.com Holdings Limited - Reviewed Financial Resu |
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ERP.com Holdings Limited - Reviewed Financial Results For The Year Ended 31 July
2005
ERP.com Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/010017/06)
Share code: ERP
ISIN: ZAE000043493
(ERP.com or the Group)
REVIEWED FINANCIAL RESULTS FOR THE YEAR ENDED 31 JULY 2005
Condensed Income statement
Percentage 2005 2004
change R`000 R`000
Revenue 29 172 022 133 062
Earnings before interest, taxation,
depreciation and amortisation (EBITDA) 14 37 117 32 579
Goodwill amortised - (199)
Depreciation and amortisation (1 401) (1 627)
Profit from operations 16 35 716 30 753
Interest received 3 490 4 683
Finance costs (13) (1)
Profit before taxation 11 39 193 35 435
Taxation 12 13 211 11 745
Current 10 312 12 539
Deferred taxation - current year 1 055 (1 849)
Deferred taxation - tax rate change 121 -
STC 1 723 1 055
Net profit for the year attributable
to shareholders 10 25 982 23 690
Weighted average number of shares on which
earnings per share is based (`000) 167 412 167 142
Earnings per share (cents) 9,2 15,5 14,2
Headline earnings per share (cents) 9,2 15,5 14,2
Dividends per share (cents) 0,0 8,0 8,0
Net asset value per share (cents) 16,3 39,2 33,7
Reconciliation between earnings
and headline earnings
Net profit for the year attributable to
shareholders 25 982 23 690
Loss/(profit) on disposal of assets 7 (212)
Goodwill amortised - 199
Headline earnings 25 989 23 677
Condensed balance sheet
2005 2004
R`000 R`000
ASSETS
Non-current assets 9 304 8 385
Property, plant and equipment 4 110 2 015
Goodwill 2 726 2 726
Deferred taxation 2 468 3 644
Current assets 102 927 94 296
Inventories and contracts in progress 1 211 94
Trade and other receivables 31 408 24 087
Cash and cash equivalents 70 308 70 115
Total assets 112 231 102 681
EQUITY AND LIABILITIES
Capital and reserves 64 851 56 451
Share capital and premium 1 245 5 048
Retained income 63 606 51 403
Current liabilities 47 380 46 230
Accounts payable and other provisions 39 764 35 503
South African Revenue Services 7 616 10 727
Total equity and liabilities 112 231 102 681
Condensed cash flow statement
2005 2004
R`000 R`000
Cash flows from operating activities 7 320 18 744
Profit before taxation 39 193 35 634
Adjustments including those not affecting
the flow of funds (2 248) (3 356)
Operating income before working capital changes 36 945 32 278
(Increase) in working capital (4 177) (7 286)
Cash generated from operations 32 768 24 992
Net interest received 3 477 4 681
Taxation paid (15 146) (2 487)
Dividends paid (13 779) (8 442)
Cash flows from investing activities (3 324) (3 407)
Cash flows from financing activities (3 803) (3 870)
Proceeds from issue of shares 609 541
Share issue expenses (5) (5)
Own shares acquired by subsidiary (4 407) (4 406)
Net increase in cash and cash equivalents 193 11 467
Cash and cash equivalents at beginning of year 70 115 58 648
Cash and cash equivalents at end of year 70 308 70 115
Condensed statement of changes in equity
2005 2004
R`000 R`000
Share capital 168 168
Balance at beginning of year 168 168
Issued during the year 3 3
Own shares acquired by subsidiary (3) (3)
Share premium 1 077 4 880
Balance at beginning of year 4 880 8 750
Issued during the year 606 538
Share issue expenses written off (5) (5)
Own shares acquired by subsidiary (4 404) (4 403)
Retained income 63 606 51 403
Balance at beginning of year 51 403 36 155
Net income for the year 25 982 23 690
Dividends declared (13 779) (8 442)
Total capital and reserves 64 851 56 451
comments
The directors are satisfied with the performance of the Group in the period
under review. Revenue increased by almost 30% and profit from operations grew by
16%. Although significant investments were made in developing new markets for
iServe and SBI, operating margins were maintained at a healthy 21%. Lower
interest received and a larger STC payment resulting from the payment of a
larger divided in the current year saw headline earnings per share grow at 9,2%.
Notwithstanding payment of R15,5 million in dividends and STC, as well as
payments amounting to R15,1 million to the South African Revenue Services, cash
flow from operating activities remained positive at R7,3 million and the balance
sheet remains strong with over R70 million in cash.
Group overview
The Group is focused on the following market segments:
Information security
SecureData distributes and provides services around a complete range of category
leading information security technologies. The company has recently added
additional technologies to its portfolio in the wireless and biometric security
arenas and is expected to continue its growth for the foreseeable future.
Enterprise applications
iServe completed its transition to a full service, SAP focused business partner
during the period. The company now has significant capabilities in the mySAP
ERP (enterprise), All-in-One (midrange) and Business One (SMME) SAP
applications.
Although a delay in the awarding of a large enterprise implementation contract
affected performance in the period under review, the project is now under way
and will continue throughout the next period. In addition, the company has
already been awarded implementation contracts in the midrange and SMME segments
and these segments are expected to offer significant growth opportunities in the
future.
Data and content management
SBI, in its first full year of operations, grew significantly and now accounts
for 12% of Group revenue. Whilst the investment required in order to fund the
growth of the business meant that it did not contribute significantly to
earnings during the period, it is anticipated that it will make a much greater
contribution in the coming financial period.
Customised Solutions performed steadily and should continue to do so in the next
period.
African operations
The Group`s African operations saw revenues grow by almost 50%. It is
anticipated that this growth will continue into the future as the existing
business partners in Africa acquire additional customers and as additional
partners are recruited.
Prospects
The directors believe that the Group will show reasonable growth in the year
ahead. Historically however, the first six months trading period is somewhat
weaker than the second and this fact, coupled with the ongoing investment
requirements, suggest that the first six months of the financial year will be
challenging.
Black Economic Empowerment
BLITEC (Black Information Technology Empowerment Company Limited) continues to
have a 26,0% shareholding in the Group. The Group and its subsidiaries remain
committed to the transformation process and to compliance with the ICT charter
and its provisions.
Declaration of dividend and special dividend number 4
In accordance with the Group`s dividend policy a dividend of 30% of headline
earnings, amounting to 4,7 cents per share has been declared. A special dividend
of 3,3 cents per share has also been declared bringing the total dividend
declared for the year to 8 cents per share.
In order to comply with the requirements from STRATE the relevant details of the
final and special dividends are:
Event Date 2005
Last day to trade `CUM` dividend Friday, 25 November
Shares to commence trading `EX` dividend Monday, 28 November
Record date Friday, 2 December
Payment date Monday, 5 December
No share certificates may be dematerialised or rematerialised between Monday, 28
November 2005 and Friday, 2 December 2005, both dates inclusive.
Accounting policies
These financial statements have been prepared on a historical cost basis in
accordance with the South African Statements of Generally Accepted Accounting
Practice and the Companies Act in South Africa. The accounting policies of the
Group are consistent with those used in the preparation of the audited annual
financial statements for the year ended 31 July 2004, except where mentioned
below. In accordance with the requirements of IFRS3 (AC140) the Group
discontinued amortisation of goodwill as of 1 August 2004, which was the
beginning of the first annual accounting period after 31 March 2004. As of 1
August 2004, the accumulated amortisation on goodwill was netted off the
original cost of goodwill.
Independent review
The financial statements have been reviewed by KPMG Inc., whose audit review is
available for inspection at the Group`s registered address.
Directorate
Ms YT Moerane, the managing director of BLITEC, was appointed to the Board, as a
non-executive director, with effect from 1 October 2004 and Dr TN Mali was
appointed as an independent non-executive director of ERP.com with effect from 1
April 2005.
Mr P Mather resigned as an executive director on 1 October 2004 and Mr G Morris
resigned as independent non-executive director with effect from 1 April 2005.
Mr P Forsyth resigned as executive director and chief executive officer of the
Group with effect from 31 August 2005.
For and on behalf of the Board of Directors
P Sneddon DTK Brazier 16 September 2005
Chairman Chief executive officer
Directors:
P Sneddon# (Chairman), DTK Brazier (Chief executive officer), P Forsyth* , CJ
Lessing, TN Mali#, YT Moerane*
# Independent non-executive directors *Non-executive directors
Company secretary:
A Ritzlmayr (email: andreasr@erpcom.co.za)
Registered address:
ERP.com House, Nanyuki Office Park, 69 Nanyuki Drive, Sunninghill, Sandton 2157.
(PO Box 2880, Rivonia 2128)
Transfer secretaries:
Computershare Investor Services 2004 (Proprietary) Limited, Registration number
2004/003647/07
70 Marshall Street, Johannesburg 2001. (PO Box 61051, Marshalltown 2107)
www.erpcom.co.za
Date: 19/09/2005 07:05:20 AM
Produced by the JSE SENS Department
