| Thu 30 Mar 2006, 17:00 | | Beget - Reviewed Interim Results For The 12 Months |
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BEE
BEE
Beget - Reviewed Interim Results For The 12 Months Ended 31 December 2005
BEGET HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number: 2002/011635/06
Share code: BEE ISIN number: ZAE000044111
("Beget" or "the company")
REVIEWED INTERIM RESULTS FOR THE 12 MONTHS ENDED 31 DECEMBER 2005
BALANCE SHEET at 31 December 2005
Reviewed Audited
31-Dec-05 31-Dec-04
Assets R `000 R `000
Non-current assets 6,710 3,871
Property, plant and equipment 1,525 1,636
Intangible assets * 2,084 2,235
Loans receivable ** 3,101 -
Current assets 4,485 2,192
Inventory 1,793 1,450
Trade and other receivables 2,692 550
Cash and cash equivalents - 192
Total assets 11,195 6,063
Equity and liabilities
Capital and reserves (444) (935)
Issued capital 16,794 13,599
Distributable reserve (17,238) (14,534)
Non-current liabilities 1,675 2,067
Shareholder loans 1,675 1,589
Deferred tax 0 478
Current liabilities 9,964 4,931
Trade and other payables 5,973 2,035
Bank overdraft 1,177
Provisions 0 328
Loans payable 2,802 2,556
Taxation Current 12 12
Total equity and liabilities 11,195 6,063
Net asset value per share (cents) 0.11 0.26
* Capitalised development expenditure - self developed computer software.
* Advanced payment on Beget Interactive transaction and loan to Talknet
Africa Pty Ltd
* Refer to Post Balance sheet events
INCOME STATEMENT
for the 12 months ended 31 December 2005
Reviewed Audited
31-Dec-05 31-Dec-04
R `000 R `000
Gross revenue 17,219 6,886
Gross profit/(loss) 5,519 2,738
Operating Expenses (7,568) (5,672)
Net Finance costs (655) (56)
Profit/(loss) before taxation (2,704) (2,990)
Taxation - 397
Profit/(loss) after taxation (2,704) (2,593)
Weighted average shares in issue 397,848 360,000
(`000)
Earnings per share (cents) (0.68) (0.72)
Headline earnings per share (0.68) (0.72)
(cents)
RECONCILIATION BETWEEN EARNINGS AND HEADLINE EARNINGS
Earnings (2,704) (2,593)
Reconciling items / Adjustments - -
Headline earnings (2,704) (2,593)
STATEMENT OF CHANGES IN EQUITY
for the 12 months ended 31 December 2005
Share Share Cumulative Total
capital premium loss
R `000 R `000 R `000 R `000
Balance at 01 January 2004 1 13,595 (11,551) 2,045
Change in accounting policy (390) (390)
Restated balance 1 13,595 (11,941) 1,655
Net loss for the year (2,593) (2,593)
Issue of share capital 126 126
Reduction of share capital (123) (123)
Balance at 01 January 2005 1 13,598 (14,534) (935)
Net loss for the year (2,704) (2,704)
Issue of share capital 3,923 3,923
Share issue expenses+ (728) (728)
Balance at 31 December 2005 1 16,793 (17,238) (444)
+ The expenses of, or the commission paid or discount allowed on, the
creation or issue of any shares of the company;
CASH FLOW STATEMENT
for the 12 months ended 31 December 2005
Reviewed Audited
31-Dec-05 01-Dec-04
R `000 R `000
Cash flows from operating (1,078) (2,923)
activities
Cash flows from investing (716) (89)
activities
Cash flows from financing 425 3,076
activities
Decrease / increase in cash and (1,369) 64
cash equivalents
Cash and cash equivalents at 192 128
beginning of period
Cash and cash equivalents at end (1,177) 192
of the period
ACCOUNTING POLICIES
The interim financial statements for the 12 months ended 31 December 2005 ("the
period") have been prepared in accordance with IFRS (International Financial
Reporting Standards). The Group"s opening balance sheet on 1 January 2004 and
comparative information for 2004 complied with all IFRS effective as at 31
December 2005. The accounting policies applied in the preparation of the interim
financial statements are consistent with those applied in the annual financial
statements for the year ended 31 December 2004. These interim financial
statements have been reviewed by PKF (PTA). Their unqualified review report is
available for inspection at the company"s registered office.
Change of year-end
The group has changed its year-end from 31 December to 30 April, resulting in a
16-month period ending 30 April 2006. Consequently the amounts in these Interim
Results for corresponding items in the income statement, changes in equity, cash
flow and related notes reflect the 12 months ended 31 December 2005 and as such
are comparable to the annual financial statements for the year ended 31 December
2004.
GROUP PROFILE
Beget is an IT and telecoms group specializing in the development of
applications on the GPRS technology platform. This enables the transmission of
data using the cellphone network at a fraction of the cost of fixed and radio
telephony.
COMMENTARY ON RESULTS
The group"s financial results for the period reflected increased revenues of
R17,2 million compared with the previous comparable period of R6.9 million. This
was largely attributable to an increase in the sales of MobilBIO with
contributions from SMS and Modem sales. The results for the period produced a
lower than expected performance resulting in a loss for the period. This
performance is largely as a result of investments in the upgrade of MobileBIO
and in the roll-out of Voice over Internet Protocol (VoIP) services, as well as
increased overhead costs in gearing up sales and management. The upgrades have
been well received by the local and international markets; this in conjunction
with the bolstered management team has positioned the group to continue its
turnaround.
OPERATIONAL REVIEW
The group continues to focus its efforts into five core areas:
MobileBIO is a biometric identity and access device utilizing wireless GPRS
technology, and is currently the only one of its kind globally. This division
accounts for approximately 65% of group revenue and it continues to focus on
revenue growth locally and abroad. The product enjoys a first mover advantage
and management is currently focused on identifying new local and international
distributors.
GPRS Transactions facilitate the upgrade of banking and transactional equipment.
This market continues to yield good prospects, however long sales cycles and
resistance to the adoption of new technologies has limited the performance. A
leading South African banking group continues to utilize these products in
certain ATM applications. Beget has recently secured a distributorship for GPRS
Point of Sale (POS) devices for South Africa, which, in addition to a host of
features now incorporate Biometric authentication. There are a number of
opportunities and prospects currently being pursued.
SMSmalls is affordable bulk SMS messaging and this division, which contributes
approximately 20% of the group revenue, it continues to grow at a strong rate
consistent with the industry.
Voice Over Internet Protocol (VoIP) - appointed as a Talknet Africa (Pty) Ltd
channel partner which supplies VoIP services to the local market, Beget"s voice
business is still in its infancy and as such this division did not achieve any
revenues during this period, it is expected to contribute significantly in the
future.
Location-Based Services (LBS) combines a suite of services and infrastructure
all locally developed. Solutions include consumer, commercial and emergency
based products currently marketed to security companies. Beget has recently been
awarded a trial using LBS in an incident management application and a number of
new applications using this technology are currently being investigated.
INVESTMENT
In April 2005 Beget acquired 23% of the share capital of VOIP specialist Talknet
Africa with a loan of R1,6 million. The loan was partly funded by a cash issue
of 23,1 million Beget shares at 6,7 cents per share. In September 2005, Beget
acquired from minorities the outstanding 34% shareholding in subsidiary Beget
Interactive (Pty) Ltd and intellectual property relating to certain of its
products, for a total consideration of R12,3 million.
PROSPECTS
Beget"s outlook for the next 6 months remains positive, with a strong sales
pipeline underpinning local sales prospects. Management is satisfied with the
company"s ability to continue as a going concern and that all of the challenges
that faced the company during the 2005 financial year have been addressed. To
this end shareholders loan accounts have been subordinated and creditors have
been significantly reduced. The management remains optimistic with regards to
the future.
POST BALANCE SHEET EVENTS
Sale
Beget has disposed of its interest in the VoIP concern Talknet Africa Pty Ltd.
The rationale for the disposal is that Beget, a shareholder and channel partner
in Talknet, would have been required to fund Talknet as well as its own channel
partner operations in the short and medium term. A greater opportunity was
identified as a channel partner and in terms of the disposal agreement, Beget
has recovered its investment.
Acquisition
A majority of shareholders have irrevocably agreed to vote in favour of the
abovementioned Beget Interactive (Pty) Ltd transaction. The acquisition is still
subject to shareholder approval and amendments to the contract have been
effected.
Changes to the Board of Directors
Mr JS Coetzee resigned as financial director of the company, and has taken up a
position as a non-executive director. Current executive director and Chief
Operating Officer Mr S Hirschowitz assumed the position of financial director,
both appointments were effective from 1 March, 2006.
DECLARATION OF DIVIDEND
In line with the group policy no dividend has been declared for the period.
On behalf of the Board
30 March 2006
DB Harington - Chairman AH Potgieter - CEO
Directors: DB Harington* (Chairman); AH Potgieter (CEO); S Hirschowitz
(Financial Director); F van Wyk; CJ van Coller*, JS Coetzee* *non-executive
Registered Office: Podium Building 2, cnr Lois & Atterbury Streets, Menlyn,
Pretoria (PO Box 40788, Moreleta Park, 0044)
Transfer Secretaries: Ultra Registrars (Pty) Ltd, 11 Diagonal Street,
Johannesburg, 2001 (PO Box 4844, Johannesburg, 2000)
Company Secretary: Secricover Network CC, 685B Verdi Street, Erasmuskloof, 0048
(PO Box 11699, Erasmuskloof, 0048)
Date: 30/03/2006 05:00:31 PM Produced by the JSE SENS Department
