| Tue 4 Apr 2006, 17:10 | | ERP - Abridged unaudited interim results: six mont |
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ERP
ERP
ERP - Abridged unaudited interim results: six months ended 31 January 2006
ERP.com Holdings Limited
(Incorporated in the Republic of South Africa)
("ERP" or "the group")
(Registration number 1998/010017/06)
www.erpcom.co.za
Share code: ERP & ISIN: ZAE000043493
ABRIDGED UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 JANUARY 2006
CONDENSED INCOME STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Jan 31 Jan 31 July
2006 2005 2005
R"000 R"000 R"000
Revenue 72 069 75 782 172 022
Earnings before interest, taxation,
depreciation and
amortisation (EBITDA) 16 723 16 238 37 117
Depreciation and amortisation (917) (543) (1 401)
Profit from operations 15 806 15 695 35 716
Reorganisation and retrenchment costs (3 588) - -
Interest received 1 267 1 951 3 490
Finance costs - - (13)
Profit before taxation 13 485 17 646 39 193
Taxation (3 911) (5 294) (13 211)
Net profit for the period
attributable to shareholders 9 574 12 352 25 982
Weighted average number of shares on
which earnings per share
is based ("000) 160 232 167 687 167 412
Earnings per share (cents) 6,0 7,4 15,5
Headline earnings per share (cents) 6,0 7,4 15,5
Dividends per share (cents) - - 8,0
Net asset value per share (cents) 26,0 32,7 39,2
Reconciliation between earnings
and headline earnings
Net profit for the period attributable
to shareholders 9 574 12 352 25 982
Loss on disposal of assets - - 7
Headline earnings 9 574 12 352 25 989
CONDENSED BALANCE SHEET
Unaudited Unaudited Audited
31 Jan 31 Jan 31 July
2006 2005 2005
R"000 R"000 R"000
ASSETS
Non-current assets 8 735 10 338 9 304
Property, plant and equipment 3 541 3 968 4 110
Goodwill 2 726 2 726 2 726
Deferred taxation 2 468 3 644 2 468
Current assets 63 119 78 952 102 927
Inventories and contracts in progress 10 625 123 1 211
Trade and other receivables 25 586 29 725 31 408
Cash and cash equivalents 26 908 49 104 70 308
Total assets 71 854 89 290 112 231
EQUITY AND LIABILITIES
Capital and reserves 40 752 54 799 64 851
Share capital and premium 157 4 823 1 245
Retained income 40 595 49 976 63 606
Current liabilities 31 102 34 491 47 380
Accounts payable and other provisions 26 143 28 331 39 764
South African Revenue Services 4 959 6 160 7 616
Total equity and liabilities 71 854 89 290 112 231
CONDENSED CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Jan 31 Jan 31 July
2006 2005 2005
Cash flows from operating
activities (23 435) (18 290) 7 320
Profit before taxation 13 485 17 646 39 193
Adjustments including those not
affecting the flow of funds (350) (1 408) (2 248)
Operating income before working
capital changes 13 135 16 238 36 945
Increase in working capital (17 213) (12 839) (4 177)
Cash (utilised)/generated from
operations (4 078) 3 399 32 768
Net interest received 1 267 1 951 3 477
Taxation paid (6 568) (9 861) (15 146)
Dividends paid (14 056) (13 779) (13 779)
Cash flows from investing
activities (348) (2 496) (3 324)
Cash flows from financing
activities (19 617) (225) (3 803)
Proceeds from issue of shares - - 609
Share issue expenses - - (5)
Own shares acquired by subsidiary (19 617) (225) (4 407)
Net (decrease)/increase in cash and
cash equivalents (43 400) (21 011) 193
Cash and cash equivalents at
beginning of period 70 308 70 115 70 115
Cash and cash equivalents at
end of period 26 908 49 104 70 308
CONDENSED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Jan 31 Jan 31 July
2006 2005 2005
R"000 R"000 R"000
Share capital 157 168 168
Balance at beginning of period 168 168 168
Issued during the period - - 3
Own shares acquired by subsidiary (11) - (3)
Share premium - 4 655 1 077
Balance at beginning of period 1 077 4 880 4 880
Issued during the period - - 606
Share issue expenses written off - - (5)
Own shares acquired by subsidiary (1 077) (225) (4 404)
Retained income 40 595 49 976 63 606
Balance at beginning of period 63 606 51 403 51 403
Net income for the period 9 574 12 352 25 982
Dividends declared (14 056) (13 779) (13 779)
Own shares acquired by subsidiary (18 529) - -
Total capital and reserves 40 752 54 799 64 851
COMMENTS
As anticipated, the first six months of 2006 proved to be challenging. The
removal of all non-SAP related activities from iServe and the refinement of the
SBI business model to better reflect current realities created a once off charge
of R3,6 million. Whilst profit from operations remained static, this non-
recurring item resulted in the reduction of headline earnings by 19% to R9,6
million.
The group spent R19,6 million on the acquisition of its own shares in the open
market and R14 million in payment of dividends.
Historically the group has performed better in the second half of the year and
this trend is expected to continue.
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. SecureData performed to expectation
during the period and added a leading security appliance agency to its portfolio
of products.
Enterprise applications
iServe is a full service, SAP focused sales, implementation and support business
partner. The continued roll-out of a large enterprise implementation contract
and an increased level of SAP Business One sales activity allowed iServe to
reflect a greatly improved performance over the previous period.
Data and content management
SBI performed somewhat below expectation for the period and continued to require
funding. The refinement of the business model is beginning to bear fruit and SBI
is expected to make a small, but positive, contribution in the coming period.
Customised Solutions performed steadily and should continue to do so in the next
period.
BASIS OF PREPARATION
These condensed interim financial statements have been prepared in accordance
with International Financial Reporting Standards ("IFRS") with the date of
transition to IFRS for the group being 1 August 2004. Current application of
IFRS may differ from that applied at 31 July 2006 due to ongoing review. Should
the application change, the reported results may also change. These are the
group"s first interim financial statements prepared in accordance with IFRS and
therefore in terms of IFRS1 First time Adoption of IFRS, the group has restated
the opening reserves at 1 August 2004, the consolidated balance sheets as at 31
January 2005 and 31 July 2005 and the consolidated income statements and cash
flow statements for the periods then ended.
EFFECT OF THE FIRST TIME ADOPTION OF IFRS
IFRS2 - Share-based payments
In accordance with the transitional provisions, the group has elected to apply
IFRS2 to all grants of equity-settled awards granted after 7 November 2002,
which were unvested as of 1 July 2004. Expenses relating to share-based payments
are now recognised in the income statement. The application of this policy has
had no effect on the opening reserves as at 1 August 2004.
IFRS3 - Business combinations
In accordance with the requirements of IFRS3, 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. In terms of the transitional provisions of IFRS3, this transition has
had no effect on the opening reserves as at 1 August 2004.
DIRECTORATE
Mr Peter Forsyth resigned as a non-executive director of the group with effect
from 21 October 2005.
Mr AJ Ritzlmayr was appointed to the Board, as an executive director, with
effect from 07 December 2005.
For and on behalf of the Board of Directors
P Sneddon DTK Brazier 4 April 2006
Non-executive chairman Chief executive officer Johannesburg
Directors:
P Sneddon** (Non-executive chairman), DTK Brazier (Chief executive officer), CJ
Lessing, TN Mali**, T Moerane*, AJ Ritzlmayr
** Independent non-executive directors * Non-executive director
Company secretary:
AJ 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)
Date: 04/04/2006 05:10:09 PM Produced by the JSE SENS Department
