| Mon 5 Mar 2007, 15:44 | | FWX - Foneworx - Reviewed results for the period 0 |
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FWX
FWX
FWX - Foneworx - Reviewed results for the period 01 July 2006 to
31 December 2006
FONEWORX HOLDINGS LIMITED
(Formerly Interconnective Solutions Limited)
(Incorporated in the Republic of South Africa)
(Registration Number: 1997/010640/06)
Share Code: FWX & ISN Code: ZAE000086237
Website www.foneworx.co.za
("Foneworx" or "the group" or "the company")
Reviewed results for the period 01 July 2006 to 31 December 2006
- Revenues: UP by 115% to R29m
- Earnings: UP by 544% to R4,2m
- Headline earnings: UP by 437% to R4,4m
- Cash: UP by 412% to R12,7m
INCOME STATEMENTS
31 December 31 December 30 June
2006 2005 2006
(Reviewed) (Reviewed) (Audited)
six months six months twelve months
R`000 R`000 R`000
Revenue 29,217 13,605 33,191
Other operating income 37 4 57
Direct operating costs (15,465) (6,478) (15,813)
Staff costs (5,708) (3,773) (7,771)
Depreciation and amortisation expenses (779) (551) (1,291)
Other operating expenses (2,585) (2,219) (5,909)
Profit from operations 4,717 588 2,464
Finance costs (133) (25) (131)
Investment income 279 91 174
Profit from ordinary activities 4,863 654 2,507
Taxation (652) - -
Retained profit for the period 4,211 654 2,507
Opening accumulated losses (5,975) (8,482) (8,482)
Closing retained profit for the period (1,764) (7,828) (5,975)
Number of shares in issue
at end of period 115 671 429 112 100 000 115 671 429
Weighted number of shares in issue
at end of period 115 671 429 112 100 000 113 290 476
Basic earnings per share - cents 3.64c 0.58c 2.21c
Headline earnings per share - cents 3.79c 0.73c 2.50c
Reconciliation between earnings and
headline earnings R`000 R`000 R`000
Per the income statement 4,211 654 2,507
Items included in other operating
expenses above:
Intellectual property amortised 176 163 326
Headline earnings 4,387 817 2,833
STATEMENT OF CHANGES IN EQUITY
31 December 31 December 30 June
2006 2005 2006
(Reviewed) (Reviewed) (Audited)
six months six months twelve months
R`000 R`000 R`000
Share capital 116 112 116
Balance at beginning of period 116 112 112
Issue of share capital - - 4
Share premium 14,842 14,096 14,842
Balance at beginning of period 14,842 14,096 14,096
Issues during period - - 746
Share issue costs - - -
Accumulated losses (1,764) (7,828) (5,975)
Balance at beginning of period (5,975) (8,482) (8,482)
Attributable profits 4,211 654 2,507
13,194 6,380 8,983
BALANCE SHEETS
31 December 31 December 30 June
2006 2005 2006
(Reviewed) (Reviewed) (Audited)
six months six months twelve months
R`000 R`000 R`000
ASSETS
Non-current assets 6,058 3,168 5,854
Property, plant and equipment 3,981 1,744 3,904
Intangible assets 219 624 400
Other non-current assets 800 800 800
Investment in associate 750 - 750
Deferred Taxation 308 -
Current Assets 22,167 7,659 15,092
Inventory 87 120 145
Loans to directors, managers 2 - 12
and employees
Trade and other receivables 9,381 5,061 10,406
Cash and cash equivalents 12,697 2,478 4,529
Total assets 28,225 10,827 20,946
EQUITY AND LIABILITIES
Capital and reserves 13,194 6,380 8,983
Non-current liabilities
Long-term loans 1,673 359 1,955
Current liabilities 13,358 4,088 10,008
Trade and other payables 12,027 3,888 9,206
Current portion of non-current 371 200 802
liabilities
Taxation Payable 960 - -
Total equity and liabilities 28,225 10,827 20,946
CASH FLOW STATEMENTS
31 December 31 December 30 June
2006 2005 2006
(Reviewed) (Reviewed) (Audited)
six months six months twelve months
R`000 R`000 R`000
Cashflow from operating 9,556 (257) 2,271
activities
Net cash (utilised)/generated 9,410 (323) 2,228
by operations
Finance costs (133) (25) (131)
Investment income 279 91 174
Cash flow from investing (675) (255) (3,680)
activities
Cash flow from financing (713) (24) 2,924
activities
Net increase/(decrease) in cash
and cash equivalents 8,168 (536) 1,515
Cash at cash equivalents at
beginning of period 4,529 3,014 3,014
Cash and cash equivalents at
end of period 12,697 2,478 4,529
COMMENTS:
RESULTS
The directors of FoneWorx are pleased to present the reviewed results for the
six months ended 31 December 2006.
Revenue for the group increased by 115% to R29,2 million from R13,6 million
for the corresponding period last year. Net operating profit after tax grew
by 544% to R4,2 million from R0,6 million. Headline earnings rose by 437% to
R4,4 million from R0,8 million.
The increase in revenue can largely be attributed to the group`s business
services which continue to show strong growth. In addition, improved margins
from both our Infotainment Services and Business Services have contributed to
profitability.
The group has provided for taxation for the first time, since the estimated
tax losses at 30 June 2006 of R2,6 million were absorbed by the profits and
R652 000 of taxation was provided for. Furthermore, a deferred tax asset was
created in the aggregate because of timing differences due to depreciation
less provisions. The full profit which will be declared in the second half of
the current financial year will therefore attract tax at the normal company
rate of 29%. The group`s cash position improved with cash on hand of almost
R13 million compared to R2,5 million in the corresponding period.
The group`s two main divisions, Infotainment Services and Business Services,
both performed better than management expectations. Infotainment Services
continues to provide a range of mobile services incorporating short message
services ("SMS") and interactive voice response ("IVR") to a broad range of
clients including: advertising agencies, fast moving consumer goods ("FMCG")
companies and electronic media such as the SABC. This division specializes in
hosting high volume interactive voting campaigns where calls are prompted via
electronic media. In addition, clients are provided with a "one-stop-shop"
incorporating scripting, voice recording, programming and post campaign
analysis.
Business services continues to grow and provides a range of voice and data
applications incorporating: Fax2Email, PC2Fax; Document Storage, SMS and a
broad range of bespoke services aimed at the SMME market. Our dealer network,
which now numbers over 130, was well positioned to leverage a number of new
markets to adopt the group`s business services. Business services continue to
provide the group with solid and growing annuity income and it is anticipated
that it will also provide efficient channels into the SMME market. This
division has established a core of subscribers which will assist in the launch
of a host of new applications which the group has been developing over the
last period.
PROSPECTS:
The outlook for the full financial year to June 2007 is positive. The group
has acquired a 50% equity share in an office block for its new offices which
occupy 50% of the property. This purchase will be financed primarily via a
mortgage loan. The complex move of the computer centre and offices took place
successfully ten days ago. We have developed a state-of-the-art Computer
Innovation Centre in our new premises to house our new voice and data platform
which has now grown substantially, resulting in FoneWorx being the largest
independent switch in South Africa.
The Innovation Centre has been developed to accommodate a number of new
services that the group intends launching shortly primarily within financial
switching and data storage services. The directors believe that these new
services, which are an extension of our business services, will provide strong
organic growth and open new channels to market to cross-sell a number of our
existing services.
The group`s infotainment services will be further enhanced by providing a
number of SMS campaigns throughout Africa for electronic media companies.
Campaigns will be managed in 26 countries over 36 cellular networks. Business
services will continue to provide sound annuity income and smooth the peaks
and valleys associated with Infotainment Services.
The group changed its name to FoneWorx Holdings Limited late last year in
order to align its marketing strategy with that of its wholly owned trading
subsidiary, FoneWorx (Pty) Ltd. The directors are currently considering a
move of the company`s listing from the Venture Capital Market to the
Alternative Exchange of the JSE Limited, and is expecting to commence the
application process in the near future.
IFRS:
The group adopted International Financial Reporting Standards ("IFRS") for the
previous financial year ended 30 June 2006 and the interim reviewed results
have been prepared in accordance with IFRS and IAS34 - Interim Financial
Reporting. The accounting policies used are consistent with those used in the
annual financial statements for the year ended 30 June 2006.
We would like to thank all our management, employees and other business
stakeholders, customers and suppliers as well as shareholders for their loyal
support.
Directorate:
There have been no changes to the directorate during the period under review.
Audit Review:
These interim results have been reviewed by G Cambanis Inc., and a copy of
their unqualified report is available for inspection at the company`s
registered office.
For and on behalf of the board
Ashvin Mancha Mark Smith Gareth Tudor
Chairman CEO Financial Director
Johannesburg
05 March 2007
Business and Registered Office:
1st Floor, Corner of Hendrik Verwoerd Drive and Will Scarlet Road, Ferndale,
Randburg, 2194
PO Box 3386, Pinegowrie, 2123
Telephone +27-11-293-0000
Fax 086-610-1000 / +27-11-787-2137
Directors: Ronald Graver, Ashvin Govan Mancha B Proc * - Chairman, Gaurang
Mooney BA * (Zimbabwe), Robert Russell, Mark Smith BA LLB - Chief Executive
Officer, Gareth Tudor CA (SA) - Financial Director (* Independent)
Company Secretary: G H Tudor CA (SA)
Auditors: G Cambanis Inc.
Transfer Secretaries: Computershare Investor Services 2004 (Pty) Ltd
Sponsor: Deloitte & Touche Sponsor Services (Pty) Ltd
Date: 05/03/2007 15:44:56 Produced by the JSE SENS Department.
