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IFCA Technologies Limited - Listing of IFCA Technologies Limited
IFCA TECHNOLOGIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2006/030759/06)
("the company" or "IFCA Tech")
ISIN Code: ZAE000088555 Share code: IFC
LISTING OF IFCA
Introduction
The prospectus to which this announcement relates has been prepared in terms of
the Listings Requirements of the JSE Limited ("the JSE"), relating to a private
placing of 10 000 000 ordinary shares of R0.001 each in the share capital of
IFCA Tech at an issue price of 50 cents per share, which offer was fully
subscribed. The prospectus is not an invitation to the public to subscribe for
securities, but is issued in compliance with the listings requirements of the
JSE, for the purpose of providing information to be public with regard to the
company.
At the date of closing of the offer, IFCA Tech"s share capital comprises 500 000
000 authorised ordinary shares and 100 000 000 issued ordinary shares of R0.001
each.
An English copy of the prospectus was registered by the Registrar of Companies
on 28 November 2006 in terms of section 155(1) of the Companies Act, 1973 (Act
61 of 1973), as amended.
Background, incorporation and nature of business
IFCA Tech was incorporated as a public company in the Republic of South Africa
on 03 October 2006 in order to act as the holding company for the IFCA Tech
Group ahead of the company"s intended listing. IFCA Tech is an investment
holding company which currently has two main subsidiaries namely, IFCA sWare
that focuses on the Group"s software solutions and services and IFCA hWare,
which was incorporated on 25 October 2006 and focuses on the Group"s
Computerised Business Equipment solutions. IFCA Tech has conducted no business
since its incorporation other than to acquire 100% of the shares in its
principal operating subsidiary, IFCA sWare, on 09 October 2006.
There is no government protection of any kind relating the company"s business
and there is no investment encouragement law affecting the business.
IFCA sWare
IFCA sWare first commenced business in August 1999 as MBS Software (Proprietary)
Limited and was founded by Andy Moolman, Brian Schultz and Chris Boshoff, who
remain as directors on the board of IFCA sWare. IFCA sWare was originally
formed for the sole purpose of marketing and supporting the IFCA MSC Malaysian
Group"s suite of software products in Africa under license. The business paid
50% of its software revenue to IFCA MSC in Malaysia in terms of its license
agreement and the business grew primarily through the use of Malaysian
consultants at a very high cost to the South African business.
In September 2004, the IFCA Group in Malaysia vended in the IP to the suite of
software products for the African continent and in return, took up a 49.07%
equity interest in IFCA sWare through its Malaysian listed company, IFCA MSC.
The company then changed its name to IFCA MBS Software (Pty) Limited. BK Wong
was relocated from Malaysia to take up the position of Managing Director in
January 2005 and the name of the company was changed to IFCA sWare on 09 October
2006 in order to house the Group"s software solutions going forward. All of the
founding shareholders remain actively involved in the operations of the company
as executive directors of IFCA sWare.
IFCA sWare is an enterprise-wide integrated business solutions provider
providing industry specific software solutions for four business segments,
namely:
- Property Development and Management (known as Property+);
- Project Management, Engineering and Construction (known as Contract+);
- Hospitality (known as Resorts+, D"Hotel and D"Club); and
- Finance & Leasing (Loans+).
In addition, KM+, which is a knowledge management tool, is used in conjunction
with the product suites above, further details of which are provided below.
Whilst IFCA sWare"s software solutions already incorporate sales and marketing
service features, KM+ expands the scope of these features and is an enterprise-
wide knowledge management software solution that automates five key business
areas, namely, marketing, sales, customer service, project management and office
and personnel administration. This automation enables the organisation to
capture, share and retain business information across all departments, enabling
every employee to work and collaborate intelligently with each other.
IFCA sWare"s solutions encompass the functionalities and features of products
that have been nurtured and matured for almost 20 years, from meeting the
business needs of more than 1 200 customers and 16 000 registered users spread
across four continents. IFCA sWare"s customers include Transnet Housing, The
Country Club Johannesburg, Riviera on Vaal Hotel & Country Club, Arivia.kom,
Kopanong Hotel and Conference Centre, Eagle International Group Holding,
Atlantic Beach Golf Club in Cape Town, The Botswana Housing Corporation, and
Namibia Housing Corporation .
IFCA sWare owns the IP rights to all of its business software solutions and is a
one-stop-shop for companies that have a preference for ready made, fully
integrated, modular business software solutions that can support all aspects of
their operations, with minimal customisations required to tailor-fit the
solution for their use.
All of IFCA sWare"s solutions are plug-in modular applications that cater to a
specific industry"s entire business process ranging from pre-sales, sales and
post-sales to operations, administration, accounting, management reporting and
control and third party interfaces. Embedded into all of IFCA sWare"s solutions
is "Push Technology" which drives event activated alerts to users for proactive
responses and action.
The industry specific business software solutions offered are detailed below:
Property+ for the property industry
This fully integrated software application was developed specifically for
property companies that build, sell or rent their developments. Its strength
lies in its functionalities to track front-end activities such as claims
management, project cash flow modelling, prospecting, sales management, progress
billings, sales receivables, handing-over, warranty periods, tenancy management,
tenancy receivables, utility billings and seamless integration to the back-end
financial accounting and reporting functions. It supports multiple companies,
multiple projects and multiple types of developments.
IFCA sWare has already secured large parastatal clients in the housing industry
in South Africa, Botswana, Namibia and more recently, Swaziland.
Resorts+, D"Hotel and D"Club for the hospitality industry
Resorts+ is a fully integrated Resort management system which provides a total
solution for the management of a multi-facility resort where there is a need to
integrate the resort"s hotel and club operations. This includes the functions
of sales and marketing, front desk management, on-line verification of guest and
member status and credit, food and beverage management (point-of-sales,
banqueting, events management, inventory and purchasing), hotel and club
facilities and maintenance management and golfing (flight booking and
reservation, tournaments, handicapping, caddies and buggy management). These
functions are seamlessly integrated to the back-end financial accounting and
reporting functions.
D"Hotel is a fully integrated hotel management system that supports the entire
operations of a hotel, ranging from a three to five star property, with full
integration to sales and marketing, front office operations, on-line guest
credit verification, food and beverage, (point-of-sales, banqueting, events
management, inventory and purchasing) maintenance management, PABX and
electronic key card interfaces. These functions are seamlessly integrated to
the back-end financial accounting and reporting functions.
D"Club is a fully integrated club management system that supports the entire
operations of both golfing and non-golfing clubs with full integration to sales
and marketing (membership, recruitment), food and beverage management (point-of-
sales, banqueting, events management, inventory and purchasing), on-line credit
and member status verification, golfing management (flight booking and
reservation, tournaments, handicapping, caddies and buggy management),
maintenance and facilities management. These functions are seamlessly
integrated to the back-end financial accounting and reporting functions.
In the hospitality industry, market penetration commenced during 2005 with the
roll out of the company"s D"Club product to a private residential golf estate
near Muldersdrift and more recently to a leading golf and country club in
Johannesburg. The client base has subsequently been expanded and the prospect
pipeline has grown significantly during the past twelve months.
Loans+ for the finance and leasing sector.
Loans+ is a fully integrated bonds, leasing and hire-purchase system that
provides a total solution to companies providing external or internal financing
of properties, vehicles and consumer items. The software is designed to support
front-end operations like marketing, credit processing, cashiering, loan
administration, asset and collateral documentation, collections, loan re-pricing
and risk management. These functions are seamlessly integrated to the back-end
financial accounting and reporting functions. The loans+ product has recently
been introduced to certain of the Group"s parastatal clients in South Africa and
Swaziland.
Contracts+ for the project management, engineering and construction industry
Contracts+ is a multi-company, multi-project and multi-currency software that
facilitates and automates project costing from project tendering to the final
hand-over stage of the project. It is an integrated business application
designed to empower project-driven businesses and is a cost effective business
solution that supports tendering, purchasing/labour/materials management,
budgeting and the administration of project-based activities. These front-end
activities are seamlessly integrated to the back-end financial accounting and
reporting functions.
IFCA hWare
The marketing and distribution of Computerised Business Equipment solutions has
only commenced during the current year. The two products being marketed by IFCA
hWare are the mimio Xi and the TOTalizer.
The mimio Xi system
The mimio Xi is a portable interactive whiteboard system that captures and
records writing off a whiteboard and, when in use with a PC and projector,
converts an ordinary whiteboard into a touch screen interactive whiteboard.
There is one or more whiteboard in almost every office, classroom and training
centre in Africa today and when a mimio Xi is attached to the whiteboard, it
effectively makes the whiteboard interactive. This means that any software
application or file that is running on a computer, when projected onto the
whiteboard with the mimio Xi attached, can be operated from that whiteboard as
if one were operating it from the computer itself. Any program that runs on a
computer can be projected and operated on a "mimio-nized" whiteboard, unlike
most dedicated interactive whiteboards that only support the manufacturer"s
proprietary software. In addition, everything written on the whiteboard is
captured and recorded, no transcribing is required and a complete set of the
meeting notes or work performed can be immediately e-mailed to its intended
recipients.
Adding to the features already described above, the mimio Xi comes with optional
software, which is independent of the hardware device, that can also record
voice for playback on Windows Media. This means that an entire presentation,
whether done on a "mimio-nized" whiteboard or straight from a computer, can be
recorded for playback with synchronized strokes and voice on a CD.
The mimio Xi target markets are corporates, hotels, conference and meeting
centres and training and educational institutions. The mimio Xi utilises both
hardware and software and is marketed under a non-exclusive sub-distributorship
agreement entered into with the Master Distributor for Africa. The Group is the
only sub-distributor appointed in Africa to date and the agreement authorises
the Group to market the mimio Xi system directly and through the appointment of
resellers within South Africa and sub-Saharan Africa.
The TOTalizer system
The TOTalizer also utilises both hardware and software and is a revolutionary
stock taking system that can electronically measure the quantity of items in any
container in a pre-set unit of measure by simply placing the item on the
TOTalizer, such as liquor bottles in a bar or a bottle or box of pills in a
pharmacy. The TOTalizer then uploads the electronic count directly to the
TOTalizer"s proprietary software and onwards to any other third party"s
inventory software system. The TOTalizer comes in several models for measuring
the lightest of items such as pills to items as heavy as those packed in pallets
and kegs.
The target markets are hotels, bars, restaurants, pharmacies, hospitals and any
business which carries voluminous, standardised stock items that are required to
be counted regularly for cost control or regulatory reasons. With the
TOTalizer, stock-taking is fast and accurate and because it is done
electronically through reading of bar codes and can be interfaced directly to
inventory control software, which ensures integrity in the count figures.
The TOTalizer is marketed under a distributorship agreement entered into with
the inventor, principal and manufacturer of the TOTalizer system in South Africa
and the Group is licensed to distribute the TOTalizer both into Africa and
internationally. Sales of TOTalizer commenced during the current year and good
growth is expected from both local and international sales, with resellers
already appointed in the United Kingdom, Kenya and Tanzania.
The forecasts set out below are based on the assumption that the private
placement of 10 000 000 shares in terms of the prospectus is fully subscribed:
Notes 31 December 31 December 31 December
2008 2007 2006
R R
Revenue 1 48 557 175 34 219 589 16 058 404
Cost of sales 2 20 627 594 13 490 378 3 516 256
Gross profit 27 929 581 20 729 211 12 542 148
Interest earned - - 13 836
Operating expenses 3 13 113 060 12 537 644 7 524 892
Operating profit 14 816 522 8 191 567 5 031 092
before interest
Finance costs - - -
Profit before 14 816 522 8 191 567 5 031 092
taxation
Taxation 4 4 296 791 2 375 554 1 459 017
Secondary Tax on
Companies
Profit after taxation 10 519 731 5 816 012 3 572 076
Minority interest in 5 140 000 140 000 -
subsidiaries
Attributable earnings 10 379 731 5 676 012 3 572 076
Ordinary dividends -- 3 350 000 1 890 000 -
proposed
Fully diluted shares 100 000 000 100 000 000 100 000 000
Earnings per share 10.38 5.68 3.57
(cents)
Headline earnings per 10.38 5.68 3.57
share (cents)
Dividend per share 3.45 1.89 -
(cents)
Notes
Revenue is based on anticipated revenue, excluding VAT, from the existing
annuity income and known pipeline of business quoted for IFCA sWare over the
next 24 months and thereafter expected growth at 25% per annum. In addition,
sales of mimio Xi and TOTalizer by IFCA hWare, which only commenced in the
current period, have been assumed on a minimum off-take to the current and
planned local resellers at 5 units per month for the TOTalizer and 3 units per
month for the mimio Xi and for the international resellers and distributors at
the rate of 20 units each per month for the TOTalizer and 5 units per month for
the mimio Xi.
Cost of sales in 2006 primarily relates to the cost of Malaysian consultants.
In 2007 and 2008 the large increase primarily relates to the cost of sales of
hWare, which has a much larger cost of sale element.
Operating expenses primarily comprise salaries and wages and occupancy costs,
which are projected to increase in line with the growth of the business and
incorporates the planned expansion into the Cape and Kwa-Zulu Natal regions.
Taxation has been assumed at a notional rate of 29% per annum.
The minority interest represents the 20% minority interest in hWare.
Authorised and issued share capital
The authorised and issued share capital of IFCA Tech is set out below. The
share capital of the company has been calculated before setting off the
estimated expenses against share premium.
R"000
Authorised
500 000 000 ordinary shares of R0.001 each 500
Issued, after the offer
100 000 000 ordinary shares of R0.001 each 100
Share premium 45 641
Directors of IFCA Tech
The full name, ages, addresses and occupations of the directors of
IFCA Tech are set out below:
Name (Age) Address Occupation
Dr Cynthia Thandiwe 328 Kent Avenue Businesswoman
Ndlovu*(51) Randburg
(Chairman) Johannesburg
Boon Kee Wong# (46) Agulhas House CPA and IT
(Chief Executive Glenhove Square professional
Officer) Cnr Glenhove Road
and 4th Street
Houghton Estate
Johannesburg
Christiaan Hendrik Agulhas House Engineer and MBL
Boshoff (58) Glenhove Square
(Financial Director) Cnr Glenhove Road
and 4th Street
Houghton Estate
Johannesburg
Michael Roderick Number 3 Anerley CA(SA) and
Gahagan* (53) Road businessman
Parktown
Johannesburg
Kian Keong Yong * 24B Perslaran Zaaba IT professional
#(45) Tantan Tun Drive and businessman
Ismail
6000
Kuala Lumpur
Malaysia
Keang Cheun Yong * 24B Perslaran Zaaba Marketing
#(47) Tantan Tun Drive professional and
Ismail businessman
6000
Kuala Lumpur
Malaysia
(Unless otherwise indicated all directors are South African citizens.) * Non-
executive #Malaysian British
Purpose of the offer
In terms of the offer, IFCA Tech has raised R5 million before anticipated
expenses of R886 563 through the issue of 10 000 000 new shares in IFCA Tech,
which capital will be utilised as set out below.
The purpose of the offer is to accelerate the growth of IFCA Tech into a
significant African player through:
- enhancing the Group"s profile and product recognition that is generated
through, and associated with, a listed company;
- creating a work environment that can attract, motivate, retain and reward -
the best possible human resources;
- strengthening the Group"s balance sheet by raising capital to enable it to
take advantage of key opportunities that may arise from strategic acquisitions;
- opening of branches in the Western Cape and Kwa-Zulu Natal to improve
access to, and the support of, the Group"s target market and existing customers;
- enlarging the sales force to focus on untapped opportunities for
Contracts+, KM+, Property+, Loans+, iFinance and the Computerised Business
Equipment, being some of the product offerings of the Group;
- developing a more active and vibrant business partner recruitment, training
and support program to open new markets within South Africa and throughout the
rest of Africa; and
- afford selected participants the opportunity to potentially participate
directly in the equity and future growth of IFCA Tech.
As at the last practicable date, the company had made an offer to acquire larger
premises for the company, which offer is still subject to board approval. The
purchase price for the building is R3 million and a bond of R2.3 million will be
registered over the property. Whilst certain of the proceeds of the offer may
be used in the interim to reduce the bond, it is not the intention of the
company to apply the proceeds of the offer to this acquisition.
Salient dates
Date of listing at Friday, 08 December 2006
commencement of business on
Note: The dates and times provided for in the prospectus are subject to
amendment. Any such amendment will be published on SENS.
In accordance with AltX Listings Requirements, shareholders are advised of the
risks of investing in a company listed on AltX and that the JSE does not
guarantee the viability or the success of a company listing on AltX. In terms of
JSE Listings Requirements a Designated Adviser has to be retained by the
company. The Designated Adviser 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 a Designated Adviser it must make arrangement to
appoint a new Designated Adviser within 10 business days, failing which the
company faces suspension of trading of its securities. If a Designated Adviser
is not appointed within 30 days of its suspension, the company faces the
termination of its listing without an offer to minorities.
Designated Adviser Reporting Accountants
Arcay Moela Sponsors RAiN Chartered Accountants
Stockbrokers Attorneys
Watermark Securities Gordon, Stevens & Ranchhoojee
Date of issue: 07 December 2006
Date: 07/12/2006 04:12:25 PM Produced by the JSE SENS Department
