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CMA
CMA
Command - Audited Financial Results for the year ended 30 June 2006
Command Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1999/014759/06)
Share Code: CMA & ISIN Code: ZAE000023131
("Command" or "the Group" or "the Company")
Audited Financial Results for the year ended 30 June 2006
Group Consolidated Income Statements
Audited Audited
12 months 12 months
ended ended
30 June 2006 30 June 2005
R000"s R000"s
Revenue 79,103 56,968
Cost of sales (53,176) (38,008)
Gross profit 25,927 18,960
Operating costs
Selling and administrative expenses (17,845) (22,922)
Attributable profit incurred from 8,082 (3,962)
trade
Other income 1,719 11,187
Net profit before interest 9,801 7,225
Interest paid on borrowings (429) (566)
Attributable profit 9,372 6,659
Other net non-operating costs (1,565) (601)
Net income before taxation 7,807 6,058
Taxation (2,562) 162
Net income for the year 5,245 6,220
Ordinary shareholders" net profit 5,245 6,220
Headline earnings per share (cents)
Earning per share is reconciled to
headline earnings per share
as follows:
Earnings per share 5.25 6.22
Headline earnings per share 5.25 6.22
Adjustment:
Significant bad debt write off 6.25
Adjusted headline earnings per share 5.25 12.47
Group Consolidated Cash Flow Statements
12 months 12 months
ended ended
30 June 2006 30 June 2005
R000"s R000"s
Cash flows from operating activities 2,019 1,876
Cash flows from financing activities (1,468) (913)
Cash flows from investing activities (1,419) 1,302
Net movement in cash resources (868) 2,265
Cash resources at the beginning of (1,824) (4,089)
the period
Cash resources at the end of the (2,692) (1,824)
period
Group Segmental Review
Guarding Electronic
Services Services Other Total
R R R R
Revenue 79,103 - - 79,103
Earnings 5,246 - - 5,246
Assets 38,153 - - 38,153
Liabilities 23,680 - - 23,680
Depreciation 1,777 - - 1,777
% % % %
Revenue 100 - - 100
Earnings 100 - - 100
Assets 100 - - 100
Liabilities 100 - - 100
Depreciation 100 - - 100
Group Consolidated Statement of Changes in Equity
Share Accumulated Minority
capital
and premium profit/(loss) Total interest Total
R"000 R"000 R"000 R"000 R"000
Balance at 7,954 (4,557) 3,397 - 3,397
1 July 2005
Loss on - (389) (389) (389)
acquisition
of
subsidiary
Ordinary - 6,170 6,170 50 6,220
shareholders
net income
Balance at
the end of
the period:
30 June 2005 7,954 1,224 9,178 50 9,228
Ordinary - 5,295 5,295 (50) 5,245
shareholders
net income
Balance at
the end of
the period:
30 June 7,954 6,519 - 14,473
2006 14,473
Transitional Report
Group
30 June 30 June 1 July
2006 2005 2004
R"000 R"000 R"000
Assets
SA GAAP 5,110 5,345 2,949
IAS16 120 106 158
As reported under ifrs 5,230 5,451 3,107
Deferred taxation
SA GAAP 3,603 3,844 2,403
IAS16 (35) (31) (46)
As reported under ifrs 3,568 3,813 2,357
Equity
SA GAAP 6,485 1,149 (4,669)
IAS16 85 75 112
As reported under ifrs 6,570 1,224 (4,557)
Profit
SA GAAP 5,236 6,257
IAS16 - 14 106
Decrease/(increase) of
depreciation
IAS16 - Deferred (4) (31)
taxation
As reported under ifrs 5,246 6,332
Group Consolidated Balance Sheets
12 months 12 months
ended ended
30 June 2006 30 June
2005
R000"s R000"s
ASSETS
Non-current assets
Tangible assets 5,230 5,451
Deferred taxation 3,568 3,813
Investment, loans and rental 2,966 1,851
advances
Total non-current assets 11,765 11,115
Current assets
Inventories 188 88
Accounts receivable 25,991 19,626
Bank balances and cash 209 172
Total current assets 26,388 19,886
Total assets 38,152 31,001
EQUITY AND LIABILITIES
Capital and reserves
Share capital 1 1
Share premium 7,953 7,953
Retained income 6,519 1,224
Outside shareholder"s - 50
interests
Total capital and reserves 14,473 9,228
Non-current liabilities
Non-interest bearing
borrowings
Shareholders Loan 935 1,302
Long-term borrowings 1,371 2,472
Total non-current liabilities 2,306 3,774
Current liabilities
Short-term borrowings 2,115 1,932
Accounts payable and accruals 9,927 9,896
Taxation 4,419 2,107
Bank overdrafts 2,901 1,996
Provisions 2,012 2,068
Total current liabilities 21,373 17,999
Total equity and liabilities 38,153 31,001
NAV per share 14.47 9.23
Commentary
The Board of Directors of Command Holdings Limited are pleased to present
the audited results for the year ended 30 June 2006 ("the year").
Basis of presentation, accounting policies and notes
The results for the year and comparative information have been prepared
in terms of International Financial Reporting Standards ("IFRS")
applicable at 30 June 2006 and comply with the relevant sections of the
Companies Act in South Africa and the JSE Limited.
The results have been audited by TCG Chartered Accountants, and their
unqualified audit opinion is available for inspection at the registered
office of Command.
The Command transition date is 1 July 2004 ("the transition date"). The
annual financial statements for the year are the group"s first
consolidated IFRS-compliant annual financial statements. The disclosures
required by IFRS 1 - First-time adoption of International Financial
Reporting Standards concerning the transition from South African
Statements of Generally Accepted Accounting Practice (`SA GAAP") to IFRS
and the required changes in accounting policies are presented under the
heading "Transition to International Financial Reporting Standards -
Reconciliation of previous SA GAAP and IFRS".
IFRS 1 - first-time adoption of IFRS
At the transition date, IFRS allows a number of exemptions to the
retrospective application principle. The group has elected the following
exemptions available under IFRS 1:
1. Business combinations: the group adopted IFRS 3 - Business
Combinations from 1 July 2004 and accordingly no adjustments were
acquired;
2. Property, plant and equipment: As a first-time adopter the group
elected to fair value its assets. The effect of the adjustment is
disclosed under "Reconciliation of Equity", and
3. Share based payments: The group has elected to apply the share-based
payments exemption. It applied IFRS 2 Share-based Payments from 1
July 2004 to those options that were issued after 7 November 2002
but which had not vested by 1 January 2005. No options were issued
during this period and hence no charge was incurred.
Other adjustments as a result of the adoption of IFRS
The impact of other adjustments as a result of adoption IFRS is
summarised below. The quantification of the adjustments as shown in
the reconciliation of equity and net profit.
4. Where parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items of
property, plant and equipment. Residual values and useful lives of
all assets are reassessed annually. This more robust assessment has
resulted in an increase in estimated useful lives of property, plant
and equipment, and accordingly the depreciation charged to the
income statement has reduced for the year ended 30 June 2006 and the
year ended 30 June 2005;
5. Operating lease charges are now accounted for on a accrual basis.
Previously operating lease charges were expensed on a cash flow
basis as incurred. This has resulted in higher lease costs in
previously reported periods and a reduction of lease costs for the
year ended 30 June 2006 and the year ended 30 June 2005.
Review of operations
The Group"s businesses continued to perform well. The Group achieved
revenue of R79m compared to revenue R57m in 2005, an increase of 38.8%.
This reflects an increase across all divisions and geographic regions.
The Group"s operating profit increased by 307%. The net profit of R5.2m
is down on last year by 15%. This decrease can be ascribed to the
prolonged legal strike which affected the security industry in South
Africa during the months of March, April, May and June 2006. The Guarding
Division, Bank Security Division and Forensic Investigation Division
showed substantial organic growth. The Group has established its brand
nationally and has increased its representation to 25 branches
countrywide. The Group continues to secure long-term contracts from major
corporates and parastatals on a regular basis.
Litigation
The application for the liquidation of a subsidiary within the Group by a
dormant closed corporation; Bright Ideas Projects 426 CC (and controlled
by and ex-vendor: Mr H T Roux) is still pending. This matter is due to be
heard in the Cape High Court on 17 October 2006. The company has been
advised by Senior Counsel"s that its prospects of defending this action
successfully are good.
Financial Results
Revenue for the group increased by 38.8%. Attributable profit has grown
by 307% to R8,082 million, representing approximately 12% of revenue.
Headline earnings per share decreased by 15.59 % from 6.22 cents per
share to 5.25 cents per share.
Prospects
Each company within the Group has built strong management. This, together
with good client service (and its BEE credentials and branding) has
enabled continued organic growth, which will generate sustainable profits
for the Group over the long term.
People
We are satisfied that Command is developing a management team equipped
with appropriate skills to steer the Group"s continued growth. Command
thanks its management, employees and business partners, as well as its
customers, business advisors and shareholders for their continued
support.
Dividend
In line with group policy no dividend has been declared for the year.
By order of the Board
ZJ Sithole MS Mowzer
Non Executive Chairman Chief Executive Officer
Cape Town
28 September 2006
Transfer Secretaries: Computershare Investor Services 2004 (Pty) Limited,
Ground Floor, 70 Marshall Street, Johannesburg, 2001, (PO Box 61051,
Marshalltown, 2107)
Registered Office: The Strand, 37 Strand Street, Cape Town, 8001, (PO Box
12857, N1 City, 7463)
Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited
Date: 28/09/2006 03:30:19 PM Produced by the JSE SENS Department
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