| Fri 9 Jun 2006, 9:00 | | Zaptronix Limited - Abridged Unaudited Interim Fin |
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ZPT
ZPT
Zaptronix Limited - Abridged Unaudited Interim Financial Statements For
The 6 Months Ended 28 February 2006
ZAPTRONIX LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1997/014928/06)
Share code: ZPT ISIN: ZAE000070934
("Zaptronix" or "the company" or "the group")
ABRIDGED UNAUDITED INTERIM FINANCIAL STATEMENTS FOR THE 6 MONTHS ENDED 28
FEBRUARY 2006
GROUP BALANCE SHEETS
Unaudited Audited Unaudited*
At At At
(R"000) 28-Feb-06 31-Aug-05 31-Oct-04
ASSETS
Non-current assets 9,069 7,787 868
Fixed assets and intangibles 8,786 7,493 460
Investment in associate 283 294 408
Current assets 5,362 4,812 897
Accounts receivable and 5,354 4,532 848
inventory
Cash and cash equivalents 8 281 49
Total assets 14,431 12,600 1,765
EQUITY AND LIABILITIES
Capital and reserves 7,147 6,625 196
Share capital and premium 29,651 29,651 26,749
Reserve for fair valuation of 341 - -
assets
Non-distributable reserve - - 196
exchange variance
Accumulated profits/(losses) (22,845) (23,027) (26,749)
Non-current liabilities 2,925 1,951 957
Deferred tax - - 21
Borrowings 2,925 1,951 936
Current liabilities 4,359 4,025 612
Accounts payable and provisions 3,930 4,025 612
Bank 429
Total equity and liabilities 14,431 12,600 1,765
Net assets value per share 1.88 1.75 0.14
(cents)
Net tangible assets value per 0.53 0.55 -0.08
share (cents)
Closing number of shares (" 000) 379,319 379,319 144,805
GROUP INCOME STATEMENTS
Unaudited Audited Unaudited*
6-months 16-months 6-months
ended ended ended
(R"000) 28-Feb-06 31-Aug-05 31-Oct-04
Revenue 10,059 28,292 889
Cost of sales (3,267) (11,518) (208)
Gross profit 6,792 16,774 681
Operating costs (5,675) (13,243) (423)
Operating profit 1,117 3,531 258
Other income 31 2,787 1
Net income before interest and 1,148 6,318 259
depreciation
Depreciation (784) (1,947) (209)
Net interest paid (92) (276) (3)
Net operating profit before tax 272 4,094 47
Share of associate profit/(loss) (12) (120) 3
Net profit before taxation 260 3,974 50
Taxation (79) (218) (15)
Earnings after taxation 181 3,757 35
Earnings per share (cents) 0.05 0.99 0.02
Excess over cost of combination - (0.70) -
DuO SP
Impairment of investment (cents) 0.01 (0.03) -
Headline earnings per share 0.06 0.26 0.02
(cents)
Weighted average number of 379,319 379,319 144,805
shares (` 000)
GROUP STATEMENTS OF CHANGES IN
EQUITY
Unaudited Audited Unaudited*
6-months 16-months 6-months
ended ended ended
(R"000) 28-Feb-06 31-Aug-05 31-Oct-04
Balance at the beginning of the 6,625 134 134
period
Foreign currency translation - - 28
reserve
Issue of share capital - 2,902 -
Reserve for revaluation surplus 341 - -
De-recognition of subsidiary - (168) -
Net profit for the period 181 3,757 35
Balance at the end of the period 7,147 6,625 197
GROUP CASH FLOW STATEMENTS
Unaudited Audited Unaudited*
6-months 16-months 6-months
ended ended ended
(R"000) 28-Feb-06 31-Aug-05 31-Oct-04
Cash flows from operating 127 2,943 (772)
activities
Cash generated/(utilised) by 1,127 890 262
operating activities
Decrease/(Increase) in working (896) (284) (1,023)
capital
Change in investment in (12) - 7
associate
Negative goodwill - 2,613 -
Cash generated/(utilised) by 219 3,219 (754)
operating activities
Net interest paid (92) (276) (3)
Taxation - - (15)
Cash flows from investing (1,754) (5,049) 28
activities
Purchase of tangible assets (1,065) (1,208) -
Purchase of intangible assets (689) (3,126) -
Foreign currency translation - - 28
Subsidiaries acquired - (715) -
Cash flows from financing
activities
Loans raised 925 2,175 582
Increase/(decrease) in cash and (702) 69 (162)
cash equivalents
Cash and cash equivalents at 281 212 212
beginning of year
Cash and cash equivalents at end (421) 281 50
of year
*These results are prior to the acquisition and consolidation of DuO Solutions
Provider Ltd (DuO SP). Shareholders of Zaptronix Limited approved the
acquisition of Duo SP on 6 September 2005. The consolidated group results
including those of DuO SP were reported on in the 31 August 2005 financial
statements of Zaptronix Limited.
FINANCIAL RESULTS AND PROSPECTS
Presented are the financial results for the first 6 months to February 2006.
This financial period incorporates both the Mobile Logistics Managed Service
(MLMS) and Energy Management Services (EMS) channels.
The turnover of R10 059K for the period under review is on a par with the
equivalent 6-months period turnover of the previous 16-months financial period
(2005: R10 609K for the equivalent 6 months and R28 291K for the 16 months
period as reported). The earnings after tax for the 6 months to February 2006,
is R181K. The negative goodwill arising from the acquisition of DuO SP was
realised in full in the financial period to August 2005 and amounted to R2 613K.
Excluding this realisation of negative goodwill, indicative earnings resulting
from ordinary business activities for the 16-months period to August 2005
amounted to R1 143K. In addition, the hardware sales for the Zaptronix EMS over
the current period reflect significantly slow cyclical months of mid November
through to January 2006. The board has already noted the strong upturn in sales
in EMS hardware that have been experienced since February 2006.
The new MLMS technology and related managed services offered have resulted in
expansion in our infrastructure, in order to meet these needs. This is
reflected in the increased operating costs as a percentage of revenue. These
added costs should scale positively with the expected growth in business and
hence an improved ratio should be reflected in future.
In the period leading up to the launch of the MLMS, your company has invested
in:
- additional tangible assets R1 065K, representing the new MLMS technology
which was contracted with customers over the period;
- additional intangible assets R689K, representing the MLMS investment in
hardware and software technology current running the MLMS platform; and
- increase in working capital R896K, being R707K in additional MLMS hardware,
R116K growth in book debt and R73K decrease in payables.
The above investment was achieved through cash flows from operating activities
R1 127K, loans raised R925K and cash resources of R281K.
The investment above has impacted the short-term liquidity of the group,
although, still reflecting a marginal improvement of 2% in the gearing from 53%
in August 2005 to 51% in February 2006.
Management is pleased to announce that a rental discounting facility have been
negotiated with the company"s bankers. The discounting of the rental agreements
will fund the growth and improve the cash flow.
Management believes that the BEE transaction with Royal Bafokeng Capital (Pty)
Ltd has strengthened the company"s ability to be awarded tenders, in both the
MLMS and EMS markets.
EMBEDDED VALUE OF SERVICES CONTRACTS
The group does not reflect the embedded value of the service contracts as an
asset in the financial statements, although, these contracts are the cornerstone
of the annuity business of both the MLMS and EMS channels of the group.
In order to arrive at the embedded value of the group"s service contracts,
management has identified each individual unit and its remaining service
contract period. The present valued cash flows of these receipts are computed
net of the direct costs to provide the services in terms of the contracts.
The embedded value of these contracts as at 28 February 2006 amount to R5 007K
(equivalent to 1.32 cents per share), which is significant in relation to the
group"s net asset base as reflected in the balance sheet.
Management is of the strong opinion that the embedded value of the contracts
represents an asset to the group. This embedded value of the service contracts
is not included in the interim results. The embedded value will further give an
indication of growth in the business before it is reflected through the group"s
income statement.
ACCOUNTING POLICIES
The Group has adopted International Financial Reporting Standards (IFRS) in
preparation of these interim results. Figures for the comparative period and
for the 16 months ended 31 August 2005 have not been restated as the application
of IFRS to the financial statements required no adjustment to the historical
financial results as previously reviewed/ audited and reported.
The financial results for the 6 months ended 31 October 2004 and for the 16
months ended 31 August 2005 were previously prepared in terms of South African
Statements of Generally Accepted Accounting Practice. The Group"s annual
financial statements for the year ending 31 August 2006 will be the first set of
annual financial statements that comply with IFRS.
DIVIDEND
No dividend has been recommended or declared in this interim period.
For and on behalf of the board
JP Nel, Chief Executive Officer
Midrand
8 June 2006
Directors: JP Nel (CEO), A De Canio (FD), K Gribnitz* (Chairman), TG Kgage*
(*non-executive)
Sponsors
Sasfin Capital
(a division of Sasfin Bank Limited)
Corporate Advisers
Radagast Capital (Pty) Ltd
Transfer secretaries
Computershare Investor Services 2004 (Pty) Ltd
Registered address
Solutions House,
Gazelle Close,
Corporate Park,
Midrand
Date: 09/06/2006 09:00:19 AM Produced by the JSE SENS Department
