| Wed 24 Aug 2005, 11:28 | | Xantium Technology Holdings Limited - Audited Annu |
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Xantium Technology Holdings Limited - Audited Annual Results For The Year Ended
31 May 2005
Xantium Technology Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration No. 2003/012583/06)
Share code: XAN ISIN code: ZAE000057386
(`Xantium` or `the company`)
HIGHLIGHTS
Successful maiden year on Altx
HEPS of 7.1 cents in line with pre-listing forecast
Strategic acquisitions successfully bedded down
AUDITED ANNUAL RESULTS FOR THE YEAR ENDED 31 MAY 2005
CONSOLIDATED BALANCE SHEET
Audited at Audited at
31 May 2005 31 May 2004
R `000 R `000
ASSETS
Non current assets 75,315 4,195
Property, plant and equipment 4,042 1,436
Goodwill 70,879 1,863
Investments 350 -
Deferred taxation 44 896
Current assets 39,394 7,470
Inventory 3,641 55
Trade and other receivables 24,380 6,996
Taxation receivable - 66
Cash resources 11,373 353
Total assets 114,709 11,665
EQUITY AND LIABILITIES
Equity
Capital and reserves 49,035 (1,034)
Share capital 14 10
Share premium 16,345 1,499
Accumulated profit / (loss) 8,286 (2,543)
Amounts due to vendors 24,390 -
Minority interests in subsidiaries 2,068 (251)
Non current liabilities 19,607 363
Non interest-bearing liabilities 19,607 -
Interest-bearing liabilities - 363
Current liabilities 43,999 12,587
Non interest-bearing liabilities 20,590 509
Trade and other payables 16,828 7,303
Interest-bearing
liabilities - 33
Taxation payable 3,643 -
Bank overdraft 1,376 4,147
Provisions 1,562 595
Total equity and liabilities 114,709 11,665
Net asset value per share (cents) 36.32 (1.56)
Net tangible asset value per share (cents) (16.18) (3.42)
CONSOLIDATED INCOME STATEMENT
Audited year Audited nine
ended months ended
31 May 2005 31 May 2004
R `000 R `000
Revenue 93,844 33,587
Earnings / (loss) before interest,
taxation, depreciation and
amortisation 16,624 (3,262)
Depreciation 722 253
Goodwill amortisation - 98
Interest received 229 21
Finance costs 141 98
Profit / (loss) before taxation 15,990 (3,690)
Taxation 4,569 (896)
Profit / (loss) after taxation 11,421 (2,794)
Attributable to outside shareholders 592 (250)
Net profit / (loss) attributable to
shareholders 10,829 (2,544)
Number of shares (000`s)
- Weighted in issue 129,452 100,000
- Weighted in issue and to be issued 150,664 66,667
Headline earnings / (loss) per share
(cents)
- Weighted in issue 8.3 (2.4)
- Weighted in issue and to be issued 7.1 (3.7)
Earnings /(loss) per share (cents)
- Weighted in issue 8.4 (2.5)
- Weighted in issue and to be issued 7.2 (3.8)
Calculation of headline earnings /
(loss)
Net profit / (loss) 10,829 (2,544)
Adjusted for :
Goodwill amortisation - 98
(Profit) / loss on disposal of property,
plant and equipment (86) 3
Headline earnings / (loss) 10,743 (2,443)
Segmental reporting
Revenue
Xantium Professional Services 24,399 3,318
Xantium Integrated Solutions 1,877 -
Xantium IT Services 67,568 30,269
93,844 33,587
Earnings / (loss) before interest,
taxation, depreciation and
amortisation
Xantium Professional Services 7,962 (269)
Xantium Integrated Solutions 308 (512)
Xantium IT Services 8,718 (2,355)
Xantium Technology Holdings (364) (126)
16,624 (3,262)
CONSOLIDATED CASH FLOW STATEMENT
Audited year Audited nine
ended months ended
31 May 2005 31 May 2004
R `000 R `000
Net cash flows from operations 3,647 (2,782)
Net cash flows from investing activities (8,679) (3,426)
Net cash flows from financing activities 9,807 2,414
Net increase / (decrease) in cash resources 4,775 (3,794)
Cash resources at the beginning of the period (3,794) -
Cash and cash equivalents relating to
acquisition of subsidiaries and businesses 9,016 -
Cash resources at the end of the period 9,997 (3,794)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Audited year Audited nine
ended months ended
31 May 2005 31 May 2004
R `000 R `000
Opening equity (1,034) -
Shares issued 15,501 1,509
Share issue expenses (651) -
Acquisition of subsidiaries and businesses 24,390 -
Net profit / (loss) for the period 10,829 (2,543)
Closing equity 49,035 (1,034)
Audited year Audited nine
ended months ended
31 May 2005 31 May 2004
R `000 R `000
Commitments
Equipment and premises - rental 2,406 786
Note:
Weighted number of shares in issue and to be issued includes shares for all
acquisitions weighted to warranted profits in accordance with the company`s
contractual commitment to issue such shares during the relevant accounting
period.
COMMENTS
Basis of Preparation
The annual financial statements (`the financial statements`) have been prepared
in accordance with South African Statements of Generally Accepted Accounting
Practice (GAAP). The accounting policies applied in the preparation of the
financial statements are consistent with those applied in the annual financial
statements for the nine months ended 31 May 2004, save in respect of
amortisation of goodwill which is reported in accordance with revised
statements of GAAP and the interpretations thereto. The group no longer provides
amortisation of goodwill and goodwill is now subject to an annual impairment
test. There is no requirement to restate the comparative results.
The financial statements have been audited by PKF (JHB) Inc. and the audit
opinion is available for inspection at Xantium`s registered office.
Introduction
The directors of Xantium present the maiden annual results for the year ended
31 May 2005 (`the year`), reflecting headline earnings per share (HEPS)
in line with the pre-listing forecast.
The year has been both exciting and challenging with the group achieving a
number of strategic milestones. On 19 August 2004 Xantium successfully debuted
on Altx as the first direct listing on the exchange. The group has since grown
from 55 to 241 employees while building a sustainable private sector and
government client base. Notably Xantium has established a national presence and
currently has offices in Gauteng, KwaZulu-Natal and the Western Cape.
Group profile
Xantium is a Proudly South African black-empowered company offering strategic
consulting and IT systems infrastructure design, deployment and support.
Services are delivered through three integrated business silos:
Xantium Professional Services;
Xantium Integrated Solutions (formerly Xantium Digital Card Services); and
Xantium IT Services.
In line with strategy we focussed successfully during the year on entrenching
Xantium`s leadership in the three core areas through organic growth
complimented by strategic acquisitions. We bolstered our services and product
offering while at the same time strengthening our management team. The group`s
partnerships with leading global technology partners continue to elevate our
delivery capability.
Acquisitions
The successful bedding down of the acquisitions made during the year has
enabled Xantium to continue operating as a seamlessly integrated group with
enhanced capability and an unparalleled range of services.
Spec Systems (Pty) Limited
Xantium purchased Spec Systems for up to R30 million. Established in 1992 the
company supplies PVC-card printing solutions and provides an in-house barcode
label printing bureau. The acquisition helped to establish the group`s national
footprint with Spec Systems offices in Johannesburg, Cape Town and Durban.
Waymark Consulting (Pty) Limited
Xantium purchased 51% of Waymark Consulting for up to R8,4 million. As a
certified Oracle Business Partner focussing on the deployment of Oracle
technology in government, the company counts among its clients SITA and the SA
Police Services.
Foster-Melliar (Pty) Limited
Foster-Melliar was purchased for up to R6,1 million. Founded in 1991
the company provides specialist customer training to effectively optimise IT
systems and process, or IT Service Management (ITSM), and is SA`s leading
Information Technology Infrastructure Library (ITIL) company. ITIL is the world
standard for the deployment of ITSM.
ITQ (Pty) Limited
The acquisition of Oracle specialist ITQ for up to R40 million complimented the
earlier acquisition of Waymark Consulting. ITQ also offers custom-made fleet
management and leasing solutions as well as business intelligence and data
warehousing solutions.
BEE
In 2004 EmpowerDEX calculated Xantium`s BEE ownership at 34,5% with 67,7%
effective BEE management control. General employee demographics are 45% HDIs.
Executive management is currently made up of 80% HDIs with middle management
made up of 40% HDIs. The group intends to focus on raising BEE participation at
all levels of operations in the year ahead, with particular attention on
executive board directors and middle management. Integral to this is a strong
emphasis on skills development and training to facilitate advancement where
possible from within the group.
Financial results
Xantium`s maiden HEPS of 7.1 cents is in line with the forecast HEPS as set out
in the prospectus dated 16 August 2004.
Revenue of R94 million was less than forecast due to a change in the
anticipated mix of product sales and solutions services. The increasing number
of direct product sales between Xantium`s international business partners and
end-users adversely impacted on revenue. However Xantium`s commission
participation in these direct sales boosted the group`s profit margins. In
addition the change in focus during the year to services resulted in higher
profit margins. Xantium`s foothold in the services market is particularly
pleasing as the long lead times on securing customers and winning their
confidence together present an initial barrier to market entry.
In terms of AC140 the total liability for all acquisitions made during the year
has been raised as a liability on the group`s balance sheet, irrespective of any
conditions relating to the payment of any of the purchase considerations for the
acquisitions.
Debtors` collection periods present an ongoing challenge for a growing
business, particularly in respect of government customers where administrative
processes inevitably result in debtors` days ranging between 60 and 120 days.
The group is consistently assessing methods of reducing debtors` days to
acceptable timeframes.
As this is the first full year of operation as an integrated group, results are
not comparable with the results of the previous financial period.
Prospects
We are confident that Xantium`s specialist service offering will assist in
sustaining the group`s organic growth. Strategic focus on mining, financial
services and telecommunications customers is expected to yield benefit for the
group in light of the sectors` transformation charters. Xantium will at the
same time continue to pursue opportunities in government to further consolidate
its position as a leading supplier of consulting and IT services.
The board will continue to investigate appropriate strategic acquisitions that
will further enhance Xantium`s capability and deliver additional shareholder
value. Expected consolidation in the local ICT sector bodes well for the group
in this regard. Xantium further intends to pursue appropriate opportunities in
Africa in light of the increasing accessibility of technology.
People
As previously announced on 4 August 2005 Thamsanqa Schrimpton resigned from
the board and we wish him well in his future endeavours.
The commitment, determination and passion of our management and their teams
through a challenging growth phase have been exceptional and we thank them. A
special thanks also to Xantium`s business partners, shareholders and customers
for their invaluable and ongoing support.
Dividend
In line with group policy no dividend has been declared for the year.
By order of the board.
24 August 2005
Dr Popo S Molefe James H Murray
Chairman CEO
Warning: The listing of the ordinary shares in the company is on the ALTX.
Shareholders are advised of the risks of investing in a company listed on the
ALTX. Shareholders are advised that the JSE does not guarantee the viability or
the success of a company listed on the ALTX. In terms of the JSE Listings
Requirements a designated advisor has to be retained by the company. The
designated advisor is required to, inter alia, attend all board meetings held by
the company to ensure that all JSE Listings Requirements and applicable
regulations are complied with, approve the financial director of the company and
guide the company in a competent, professional and impartial manner. If the
company fails to retain the designated advisor it must make arrangements to
appoint a new designated advisor within 10 business days, failing which the
company faces suspension of trading of its securities. If a designated advisor
is not appointed within 30 days of its suspension the company faces the
termination of its listing without an offer to minority shareholders.
Directors:
Dr PS Molefe (Chairman)*; JH Murray (CEO); PA Johnston (CFO); KJ Molefe
(Group Marketing Director); NP Nkwanca*#; NB Senne*#
(*non-executive #independent)
Registered office: 2nd Floor , Milner Place , 4 Carse O` Gowrie, Parktown
(P O Box 5420, Meyersdal, 1447)
Transfer secretaries: Ultra Registrars (Pty) Limited, 11 Diagonal Street,
Johannesburg, 2001 (PO Box 4844, Johannesburg, 2000)
Company secretary: Morestat Corporate Services, 2nd Floor, 220 Peoples Bank
Building, 200 Pretorius Street, Pretoria, 0002
(P O Box 1750, Pretoria, 0001)
