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InfoWave - Unaudited Group Results For The Six Months Ended 31 August 2005
Infowave Holdings Limited
(Registration number 1998/017276/06
Share code: IFW
ISIN ZAE000016440
("InfoWave" or "the company")
UNAUDITED GROUP RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2005
Ukuze uthole imphumela yesingisi kanye neyesizulu uyacelwa ukuba ubheke kwi
"website" ethi
www.infowave.co.za.
Abridged Consolidated Income Statement (unaudited)
6 months 6 months Year
ended ended ended
31 August 31 August 28 February
2005 2004 2005
restated restated
R"000 R"000 R"000
Revenue 17 683 15 610 31 853
Profit from operations
(before interest) 3 462 3 579 7 428
Net interest income 197 267 346
Revaluation of listed
preference shares 4 - 392
Profit before taxation 3 663 3 845 8 166
Taxation (1 406) (1 512) (3 166)
Profit/(loss) attributable
to associated company 88 (45) (8)
Profit attributable to
ordinary shareholders 2 345 2 289 4 992
Headline profit
Profit attributable to
ordinary shareholders 2 345 2 289 4 992
Headline profit 2 345 2 289 4 992
Abridged Consolidated Cash Flow Information (unaudited)
6 months 6 months Year
ended ended ended
31 August 31 August 28 February
2005 2004 2005
restated restated
R"000 R"000 R"000
Net cash (outflows)/inflows
from operating activities
Cash from operations 3 420 2 798 6 953
Normal tax paid (1 312) (1 267) (2 960)
Dividend paid (2 567) (2 745) (2 744)
Net cash (outflows)/inflows
from operating activities (459) (1 214) 1 249
Net cash outflows from
investing activities (165) (274) (676)
Net cash outflows from
purchase of preference shares - (3 875) (3 867)
Net cash inflows/(outflows)
from financing activities 334 (288) (2 759)
Net decrease in cash resources (290) (5 651) (6 053)
Cash and cash equivalents
at beginning of period 1 772 7 824 7 825
Cash and cash equivalents
at end of period 1 482 2 173 1 772
Group Supplementary Information (unaudited)
6 months 6 months Year
ended ended ended
31 August 31 August 28 February
2005 2004 2005
R"000 R"000 R"000
Capital expenditure for
the period 174 274 357
Capital expenditure
authorised 348 250 506
Operating lease
expenses 401 402 773
Abridged Consolidated Balance Sheet (unaudited)
31 August 31 August 28 February
2005 2004 2005
restated restated
R"000 R"000 R"000
Assets
Non-current assets
Fixed and intangible assets 707 756 602
Investment in associated
company 393 - 305
Deferred taxation asset 296 320 296
Investments _ 15 -
1 396 1 091 1 203
Current assets
Trade and other receivables 7 248 5 768 6 669
Listed preference shares* 4 262 3 932 4 259
Cash and cash equivalents 1 482 2 173 1 772
12 992 11 873 12 700
Total assets 14 388 12 964 13 903
Equity and liabilities
Capital reserves
Issued capital 9 9 8
Share premium 438 50 105
Share-based payment reserve** 273 49 134
Accumulated profit 9 784 9 765 10 006
10 504 9 873 10 253
Non-current liabilities
Deferred taxation liability 114 - 114
Current liabilities
Trade and other payables 3 770 3 091 3 536
Total equity and liabilities 14 388 12 964 13 903
* These compromise an investment in Standard Bank preference shares and have a
coupon rate of 75% of prime.
Statistics (unaudited)
6 months 6 months Year
ended ended ended
31 August 31 August 28 February
2005 2004 2005
restated restated
Revenue (R"000) 17 683 15 610 31 853
Number of ordinary
shares in issue ("000) 85 572 90 271 84 054
Weighted average
ordinary shares in issue ("000) 84 831 91 071 88 251
Net asset value (R"000) 10 504 9 873 10 253
Net asset value per
ordinary share (cents) 12,28 10,94 12,20
Headline earnings per
ordinary share (cents) 2,76 2,51 5,66
Earnings per
ordinary share (cents) 2,76 2,51 5,66
Fully diluted earnings
per share (cents) 2,70 2,45 5,56
Return on equity (%) 23,02 25,79 47,95
Return on assets (%) 16,30 17,65 35,91
Liquidity ratio (times) 3,45 3,84 3,59
Solvency ratio (times) 3,70 4,19 3,81
Market price per share
Close (cents) 50 33 35
High (cents) 50 41 43
Low (cents) 33 33 26
Group Statement of Changes in Equity (unaudited)
Share-based
Share Share Accumulated payment
capital premium profit reserve** Total
R"000 R"000 R"000 R"000 R"000
Balance at
29 February 2004 9 338 10 221 10 568
Net profit for the year
restated - - 4 992 4 992
Shares issued during the
year - 239 - 239
Shares repurchased and
cancelled during the year (1) (472) (2 463) (2 936)
Share-based payment
reserve** 134 134
Dividend paid - - (2 744) (2 744)
Balance at 28 February
2005 restated 8 105 10 006 134 10 253
Net profit for the year - - 2 345 2 345
Shares issued during the
period 1 333 - 334
Share-based payment
reserve** 139 139
Dividend paid - - (2 567) (2 567)
Balance at 31 August 2005 9 438 9 784 273 10 504
** This has arisen due to the adoption of IFRS 2 and relates to employee
share options valued using the Black Scholes method.
Directors" comment
These results have been prepared in accordance with International Financial
Reporting Standards (IFRS) which were adopted for the first time for the year
ending 28 February 2006. Comparative figures have accordingly been restated.
The transition to IFRS has resulted in the adoption of IFRS 2 (Share-based
payments).
The directors endorse the aims of the King Report on Corporate Governance in
conducting the affairs of the company with integrity and in accordance with the
highest standards of corporate practice. The company is committed to the
principles of openness, integrity and accountability in its dealings with all
its stakeholders.
Report to the stakeholders
Results
Headline earnings per share grew 10% on the comparative six month period. This
takes into account the adjustments relating to the adoption of IFRS, which were
not material. There was no impact on the income of financial years preceding
February 2004. Turnover increased by 13% on the comparative six month period
primarily driven by activities in the core business and based on an 8% increase
in project delivery capacity. During the period under review we have invested
in additional sales and marketing capacity and activities focused on geographic
expansion and diversification. Strategic investments have been made in quality
process improvements, BEE transformation and skills development throughout the
organisation.
Strategy
InfoWave refined its strategy to focus on the health and growth of the core
business of software and service provision to the sugar industry whilst
simultaneously identifying other repeatable niche applications product
development opportunities. The business was reorganised to provide dedicated
focus in each area. This is proving to have positive results on growth and
customer satisfaction.
The Board
During the period under review, Mrs Carol Jessop was appointed to the board.
She is responsible for the operations of the sugar and downstream business
unit. Mrs Bev Carrilho was appointed as the financial director. Mr Pat Naicker
retired by rotation and for personal reasons did not offer himself for
re-election. The board expressed its appreciation to him for his service over
the past five years. His position was not replaced. The board portfolios were
reviewed in line with the strategy, to give dedicated focus in strategic areas.
Pursuant to a black economic empowerment transaction effected by the single
largest shareholder of InfoWave (14,2%), the iCapital growth fund Investment
Trust, InfoWave appointed Mr Wanda Shuenyane, a non-executive director of
iCapital as an additional non-executive director. This enhances the board"s
composition in terms of the ratio of non-executive to executive directors as
well as its BEE composition. The board is satisfied that its collective skill is
aligned with the strategy.
BEE
InfoWave is making progress on all of its broad based black economic
empowerment goals in line with the draft ICT Charter and the DTI"s codes of
good practice. The black ownership equity increased from 22% at 31 August 2004
to 25% at 31 August 2005, through share issues to employees in terms of the
share scheme, a share buy-back and the BEE deal effected by iCapital. We have
made good progress on our employment equity goals and the company now comprises
58% black employees. We continue to support our enterprise development BEE
associate company, Adapt-IT (Pty) Limited which made pleasing progress during
the period. We have increased our corporate social investment (CSI) activities
which are targeted at education, and specifically ICT skills and bridging the
digital divide.
The Listing
In line with its stated intent, the company has applied to the JSE Limited, to
transfer its listing to the software and computer services sector of the main
board, effective 10 October 2005.
Prospects
We are satisfied with the health and organic growth prospects of the core
business. In parallel, we are pursuing niche software business acquisitions to
achieve growth and diversification. The benefits of the investments to increase
capacity, quality and enable BEE transformation should flow through over time.
Appreciation
InfoWave expresses its thanks to its loyal customers and our employees whose
dedication to our customers underpins the business.
On behalf of the board
RP Collis
Non-Executive Chairman
T Dunsdon
Chief Executive Officer
Durban
6 October 2005
Directors
RP Collis (Non-Executive Chairman), T Dunsdon (Chief Executive Officer),
MCB Lionnet CL von Pannier, CL Jessop, BR Carrilho,
WK Shuenyane (non-executive director) P Aposporis*, Dr AB Ravno*,
(*Independent non-executive directors)
NC Swinford-Meyer (Company Secretary)
Registered office
Gleneagles Park
10 Flanders Drive
Mount Edgecombe, 4300
PO Box 2225
M.E.C.C.
Mount Edgecombe, 4301
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street
Johannesburg, 2001
PO Box 61051
Marshalltown, 2107
Sponsor
Sasfin Corporate Finance
a division of Sasfin Bank Limited
Sasfin Place, North Block
13-15 Scott Street
Waverley, 2090
Date: 06/10/2005 05:00:12 PM Produced by the JSE SENS Department
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