| Fri 11 Aug 2006, 16:30 | | Beget - Audited annual results for the 16 months e |
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BEE
BEE
Beget - Audited annual results for the 16 months ended 30 April 2006
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")
Audited Annual Results For The 16 Months Ended 30 April 2006
BALANCE SHEET at 30 April 2006
Audited Audited
16 Months 12 Months
30-Apr-06 31-Dec-04
Assets R `000 R `000
Non-current assets 14,192 3,871
Property, plant and equipment 899 1,636
Intangible assets * 13,293 2,235
Current assets 3,561 2,192
Inventory 1,849 1,450
Trade and other receivables 1,712 550
Cash and cash equivalents - 192
Total assets 17,753 6,063
Equity and liabilities
Capital and reserves 1,595 (935)
Issued capital 24,344 13,599
Distributable reserve (22,750) (14,534)
Non-current liabilities 3,023 1,872
Shareholder loans 2,180 1,589
Long-term liabilities - 283
Deferred revenue 843
Current liabilities 13,135 5,126
Loans payable 6,508 2,750
Tax 12 12
Trade and other payables 5,010 2,035
Deferred Revenue 342 -
Bank overdraft 681 2,556
Provisions 582 328
Total equity and liabilities 17,753 6,063
Net asset value per share (cents) 0.39 (0.26)
INCOME STATEMENT
for the 16 months ended 30 April 2006
Audited Audited
30-Apr-06 31-Dec-04
R `000 R `000
Gross revenue 20,875 6,886
Gross profit/(loss) 7,795 3,439
Operating Expenses (12,289) (5,045)
EBITDA (4,494) (1,606)
Depreciation & Amortization (1,753) (1,328)
Net Finance costs (1,452) (56)
Profit/(Loss) before taxation (7,699) (2,990)
Taxation - 397
Profit/(Loss) after taxation (7,699) (2,593)
Minority interest (516)
Net loss for the period (8,215) (2,593)
Weighted average shares in issue 409,380 360,000
(`000)
Earnings per share (cents) (2.01) (0.72)
Headline earnings per share (cents) (1.96) (0.72)
Diluted headline earnings per share - (0.51)
(cents)
RECONCILIATION BETWEEN EARNINGS AND HEADLINE EARNINGS
Earnings (8,215) (2,593)
Write-off of loan 211 -
Headline earnings (8,004) (2,593)
STATEMENT OF CHANGES IN EQUITY
for the 16 months ended 30 April 2006
Share Share Cumulative Total
capital premium loss
R `000 R `000 R `000 R `000
Balance at 01 January 2004 0.716 13,595 (11,551) 2,045
Change in accounting policy (390) (390)
Restated balance 0.716 13,595 (11,941) 1,655
Net loss for the year (2,593) (2,593)
Issue of share capital 0.008 126 126
Share issue expenses (123) (123)
Balance at 01 January 2005 0.724 13,598 (14,534) (935)
Cancellation of share capital (0.008) (0.008)
Net loss for the period (8,215) (8,215)
Issue of share capital 0.248 11,725 11,725
Share issue expenses+ (980) (980)
Balance at 30 April 2006 0.964 24,343 (22,749) 1,595
CASH FLOW STATEMENT
for the 16 months ended 30 April 2006
AUDITED Audited
30-APR-06 01-Dec-04
R `000 R `000
Cash flows from operating activities (3,611) (2,923)
Cash flows from investing activities (12,073) (89)
Cash flows from financing activities 14,811 3,076
Increase /(decrease) in cash and (873) 64
cash equivalents
Cash and cash equivalents at 192 128
beginning of period
Cash and cash equivalents at end of (681) 192
the period
ACCOUNTING POLICIES
Basis of preparation
The group has adopted International Financial Reporting Standards ("IFRS")
for the financial year ended 30 April 2006. IFRS 1 - First time adoption of
International Financial Reporting Standards has been applied in preparing
the audited consolidated financial results. The annual financial statements
were audited by PKF (PTA). Their unqualified report includes an emphasis of
matter on going concern, and is available for inspection at the company"s
registered office.
All assets and liabilities were restated to fair values in accordance with
the compliance criteria required per IFRS 1. As at the financial year-end
there were no changes to the impairment valuation. The group no longer
provides for amortisation of goodwill and goodwill is now subject to an
annual impairment test. The latest impairment test was done as at 30 April
2006 and the next impairment test will be done as at 30 April 2007.
Reconciliation from SA GAAP to IFRS
Audited financial statements for the year ended 31 December 2004 did not
require any adjustments for IFRS, and as such the group"s opening balance
sheet on 1 January 2005 and comparative information for 2004 complied with
all IFRS effective as at 31 December 2004.
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. The rationale included attending
to certain dormant subsidiaries and streamlining of inter company
transactions. Consequently the amounts in these Annual results for
corresponding items in the income statement, changes in equity, cash flow
and related notes reflect the 16 months ended 30 April 2006.
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 R20,9 million from R6,9 million in 2004, attributable to a substantial
increase in the sales of biometric time and attendance and access control
units, 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. The losses were incurred as a result
of: the previously reported large investments in the upgrade, re-
development and replacement of BegetBIO units, increased overhead costs in
gearing up sales and management, low cyclical sales over the December,
January and April months and losses as a result of investments in the roll-
out of Voice over Internet Protocol (VoIP) services. The losses further
contain non operational items including write-offs of inter company loans
and IFRS adjustments.
OPERATIONAL REVIEW
The group has narrowed its efforts to focus on GPRS transactions in the
areas of Biometrics and Transactional Banking. The profitable SMS (Short
Message Service) products and LBS (Location Based Services) products are
managed in accordance with market and customer demands.
A substantial effort has been made in the areas of business and information
systems in the areas of operational and financial reporting. All key areas
of the business are now well reported on and clear goals have been set.
Attention has further been given to the sales division; this includes a
rigorous recruitment and performance management system installed.
A number of efforts have been made in an attempt to conclude a BEE
transaction, these have yielded reasonable business opportunities, but
unfortunately as yet no equity transaction has been concluded. Beget
remains committed to identifying and concluding an appropriate deal for the
company and shareholders.
What follows is a brief operational overview of the Beget divisions:
MobileBIO is a biometric identification device used for time and attendance
and access control. The device which communicates using wireless GPRS
technology remains the only one of its kind globally. This division
accounts for approximately 65% of group revenue and it continues to focus
on market and revenue growth both locally and abroad. The product still
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, and despite long
sales cycles and resistance to the adoption of new technologies, a number
leading South African banking groups have initiated trials and orders to
utilize these products. GPRS Point of Sale (POS) devices still represent a
compelling business model and prospects for these products are still being
pursued.
SMSmalls is affordable bulk SMS messaging and this division, which
contributes approximately 20% of the group revenue, continues to grow at a
strong rate consistent with the industry.
Voice Over Internet Protocol (VoIP) - Beget has disposed of its interest in
the VoIP concern Talknet Africa Pty Ltd and recovered its original
investment. 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.
The ongoing cash requirements and instability of the technology raised many
risk concerns and in conjunction with a greater focus on core operations
and mitigation of risk Beget will in the short term halt all existing VoIP
operations. This industry will be monitored and no actions will be taken in
the foreseeable 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 is currently implementing a traffic incident management
application as a trial, this is intended to yield a number of similar
business applications.
INVESTMENT
In April 2005 Beget acquired 23% of the share capital of VOIP specialist
Talknet Africa with a loan of R1,6 million. The interest was subsequently
sold for the original investment and the loan recovered. As a result of the
sale of the interest and the poor performance of the VoIP division, VoIP
operations and services have been suspended in the short term.
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, partially funded by a cash issue of 13,4 million shares at 9
cents per share and the balance of settled by the issue of 36 million
shares at 20 cents per share. It is considered that the acquisition of the
IP, in respect of both existing and future products, will enhance the value
of Beget Interactive as it will enjoy complete control over its product
offering. A majority of shareholders voted in favour of the abovementioned
Beget Interactive (Pty) Ltd transaction resulting in the transaction being
successfully completed on 14 April 2006.
PROSPECTS
The BegetBio units continue to be well received by the local and
international markets; the GPRS modem and Point of Sale (POS) markets are
yielding some results.
Notwithstanding the above mentioned emphasis of matter, 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 2006 financial
year have been addressed.
Beget"s outlook for the next 12 months remains positive, with a number of
potential large deals underpinning local sales prospects.
POST BALANCE SHEET EVENTS
There are no post balance sheet events to report.
CHANGES TO THE BOARD
There are no changes to the board.
DECLARATION OF DIVIDEND
In line with the group policy no dividend has been declared for the period.
ANNUAL GENERAL MEETING
The annual general meeting will be held at 12h00 on Wednesday, 20 September
2006 at Podium Building no 2, corner Atterbury and Lois Streets, Menlyn,
Pretoria. A notice of annual general meeting is included in the annual
financial statements posted to shareholders.
On behalf of the Board
11 August 2006
DB Harington - Chairman AH Potgieter - CEO
Directors: DB Harington* (Chairman); AH Potgieter (CEO); S Hirschowitz
(Financial Director); 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: Link Market Services South Africa (Pty) Limited, 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: 11/08/2006 04:30:08 PM Produced by the JSE SENS Department
