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SQE
SQE
Square One - Unaudited Interim Results: Six Months Ended 30 June 2006
SQUARE ONE SOLUTIONS GROUP LIMITED
Registration number 1999/026822/06
Share code: SQE
ISIN: ZAE000023768
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2006
BALANCE SHEETS
Six months Six months Twelve
to 30 June to 30 June months to
31 December
2006 2005 2005
R "000 Unaudited Unaudited Audited
Assets
Non-current assets 18,453 16,870 19,733
Fixed assets 1,807 951 1,493
Intangible assets 9,690 7,943 10,151
Loans receivable - - 14
Deferred tax 6,956 7,976 8,075
Current assets 64,884 49,382 66,611
Inventories 15,965 15,764 18,397
Accounts receivable 45,354 33,501 42,530
Bank balances 3,565 117 5,684
Total assets 83,337 66,252 86,344
Equity and liabilities
Issued capital 13,726 9,020 13,726
Accumulated profits 981 (2,377) (1,758)
/(losses)
Ordinary shareholders" 14,707 6,643 11,968
funds
Outside shareholders" 686 686 686
interest
Outside shareholders" loans 271 246 271
Long term liabilities 19,761 17,848 19,462
Current liabilities 47,912 40,829 53,957
Accounts payable 42,338 35,906 49,129
Taxation - 78 -
Current portion of long 4,205 1,927 4,030
term liabilities
Provisions 1,369 2,022 798
Bank overdraft - 896 -
Total equity and 83,337 66,252 86,344
liabilities
EARNINGS PER SHARE
2006 2005 2005
Earnings per share (cents) 9.8 2.8 5.3
Headline earnings per share 9.8 4.9 9.4
(cents)
Earnings per share is
calculated by using the
relevant attributable
profit and issued shares.
Reconciliation of earnings
per share
Attributable profit 2,740 626 1,245
Impairment of goodwill - 443 976
Headline earnings 2,740 1,069 2,221
Number of issued shares 28,101 22,000 23,641
ABRIDGED CASH FLOW STATEMENTS
Six months Six months Twelve
to to months to
30 June 30 June 31 December
2006 2005 2005
Unaudited Unaudited Audited
R "000
Net flow from operating (2,134) 3,950 2,955
activities
Net flow from investing (283) 2,322 3,208
activities
Net flow from financing 298 (8,859) (2,287)
activities
(Decrease)/increase in cash (2,119) (2,587) 3,876
equivalents
Cash at beginning of period 5,684 1,808 1,808
Cash at end of period 3,565 (779) 5,684
NOTE:
The statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) and the accounting policies used in
the preparation of these results are consistent with those applied in the
previous reporting period.
INCOME STATEMENTS
R "000 Six months Six months Twelve
to 30 June to 30 June months to
2006 2005 31 December
Unaudited Unaudited 2005
Audited
Turnover 96,621 95,911 204,653
Operating profit 5,188 2,359 5,526
Net finance costs (1,328) (1,508) (3,093)
Net profit before tax 3,860 851 2,433
Taxation (1,120) (225) (1,188)
Net profit after tax 2,740 626 1,245
Net profit attributable to 2,740 626 1,245
ordinary shareholders
STATEMENTS OF CHANGES IN EQUITY
R "000 Share Share Distribu- Total Minority Total
capital premium table interest equity
reserves
Balance at 1 281 13,445 (1,758) 11,968 686 12,654
January 2006
Surplus for 2,740 2,740 2,740
the period
Balance at 30 281 13,445 982 14,708 686 15,394
June 2006
COMMENTARY:
The Group has returned positive financial results for the period under
review where operating profit has increased by 120% over the same period in
2005.
Operating profit increased from R2,359 million for the first six months of
2005 to a very pleasing R5,188 million in the period under review.
Headline earnings have increased from R1,069 million in 2005 to R2,740 in
2006, an increase of 156%.
Headline earnings per share has doubled from 4,9 cents per share in 2005 to
9,8 cents per share in 2006 whilst earnings per share increased from 2,8
cents per share in 2005 to 9,8 cents per share in 2006.
The ongoing transition of the business to a turnkey, technology centric,
solutions provider is paying dividends and the above results are in line
with our strategic intent.
NATURE OF BUSINESS
Square One is an information technology company listed under the "Software
and Computer Services - Computer Services" Sector of the JSE Limited.
Square One"s primary service focuses on providing niche business-enabling
solution offerings, which create value for our clients through the
application of business knowledge and best practices, technological skills
and capability.
The Group"s primary focus is the provision of value-based offerings centred
around IP infrastructure solutions, policy solutions, power solutions,
product coding and marking solutions, mobile and wireless solutions,
storage, telecommunications and service provider solutions to its key
target market of Enterprise, SME, Corporate and Government clients.
Channel Services continue to play an important role in the Group and has a
well-established and mature reseller channel.
Square One boasts 20 years of business experience with national
representation. The operations of the Group are made up of four primary
business units - Coding and Marking, Channel Services, Square One Capital
and Business solutions, incorporating IP Infrastructure, Services and
Managed services, Policy solutions and Infrastructure. Square One has,
since inception, partnered with businesses that are market leaders who
offer world-class brands or have significant technological advantages to
benefit the Group"s strategy. The Group focuses on coupling innovation,
technology and service in order to achieve value for its clients while
achieving superior returns and growth in earnings for its shareholders.
On behalf of the board.
G A Coetser
Chairman
R T Muzariri
Vice-Chairman
W T James
Chief Executive Officer
Sandton
29 September 2006
Registered Address
34 Monkor Drive, Randpark Ridge, 2156
(PO Box 1163, Gallo Manor 2052)
Telephone: (011) 321-5900
Telefax: (011) 444-2462
Transfer Secretaries
Link Market Services South Africa (Pty) Ltd
PO Box 4844, Johannesburg, 2000
Sponsor
Bridge Capital Services (Pty) Ltd
PO Box 651010, Benmore, 2010
Directors: G A Coetser* (Chairman), C L Alexander, W T James (Chief
Executive Officer), Prof S Makanya*, R R Masebelanga* (Deputy Chairman), A
Meyer, R T Muzariri (Vice Chairman), K X T Socikwa*
(*Non-executive)
www.sq1.co.za
Date: 28/09/2006 01:56:07 PM Produced by the JSE SENS Department
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