| Wed 7 Mar 2007, 13:10 | | DLG - Dialogue Group - Abridged Audited Consolidat |
|
DLG
DLG
DLG - Dialogue Group - Abridged Audited Consolidated Financial Results For
The Year Ended 31 December 2006
Dialogue Group Holdings
(FORMERLY AFRICA`S BEST 364 LIMITED)
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NO 2005/039219/06)
JSE CODE: DLG & ISIN: ZAE000083820
("DIALOGUE GROUP" OR "THE COMPANY")
HIGHLIGHTS
REVENUE UP 55%
HEPS UP 111% (from pro forma
HEPS in 2005)
PROFIT BEFORE TAX UP 309%
CASH FROM
OPERATING ACTIVITIES UP 456%
Abridged audited consolidated financial results for the year ended 31
December 2006
CONSOLIDATED INCOME STATEMENT
Audited Audited Year- Forecast
Year ended Year ended on- Year ended
31 December 31 December year 31 December
2006 20051 Change 2006
R`000 R`000 (%) R`000
Revenue 121 255 78 255 55 113 957
Cost of sales (69 158) (50 347) (65 627)
Gross profit 52 097 27 908 48 330
Operating expenses
excluding depreciation (31 455) (23 175) (27 796)
Depreciation (2 014) (1 755) (1 792)
Other income 1 340 1 835 592
Operating profit for
the year 19 968 4 813 315 19 334
Finance income 2 196 686 871
Finance expenses (17) (86) (10)
Profit before tax 22 147 5 413 309 20 195
Income tax expense (6 466) 899 (5 643)
Profit for the year 15 681 6 312 148 14 552
Attributable to
- Minority 1 532 - 2 257
shareholders
- Equity holders of
the group 14 149 6 312 12 295
Profit for the year 15 681 6 312 148 14 552
Headline earnings
calculation
Net profit
attributable to equity
holders of the company 14 149 6 312 12 295
Adjusted for
- Gain on loan (178) - -
expunged
Headline earnings 13 971 6 312 121 12 295
Number of shares
(`000)
- Total 210 000 175 0002 175 0002
- Weighted in issue 184 877 175 0002 175 0002
Headline earnings per
share(weighted and
diluted) (cents) 7,6 3,62 111 7,02
Earnings per share
(weighted and diluted)
(cents) 7,7 3,62 114 7,02
CONSOLIDATED BALANCE SHEET
Audited Audited
At At
31 December 31 December
2006 20051
R`000 R`000
Assets
Non-current assets 5 338 4 983
Property, plant and equipment 4 646 4 189
Deferred tax asset 692 794
Current assets 61 001 11 241
Loan to shareholder - 21
Trade and other receivables 16 077 6 133
Cash and cash equivalents 44 924 5 087
Total assets 66 339 16 224
Equity and liabilities
Capital and reserves 48 046 (147)
Share capital 360 10
Share premium 33 659 1 597
Share option reserve 101 -
Revaluation reserve 63 382
Retained earnings/(accumulated loss) 12 331 (2 136)
Attributable to equity holders of the
company 46 514 (147)
Minority interest 1 532 -
Current liabilities 18 293 16 371
Loan from holding company - 5 589
Current portion of instalment sale - 107
Other current liability 641 333
Trade and other payables 17 055 10 342
Taxation 597 -
Total equity and liabilities 66 339 16 224
Net asset value and net tangible asset
value per share (cents) 22,9 (0,1)2
CONSOLIDATED CASH FLOW STATEMENT
Audited Audited
Year ended Year ended
31 December 31 December
2006 20051
R`000 R`000
Cash flows from operating activities 15 571 2 799
Cash flows from investing activities (2 472) (1 032)
Cash flows from financing activities 26 738 3 424
Net increase in cash and cash equivalents 39 837 5 191
Cash and cash equivalents at beginning of
year 5 087 (104)
Cash and cash equivalents at end of year 44 924 5 087
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Audited Audited
Year ended Year ended
31 December 31 December
2006 20051
R`000 R`000
Opening equity (147) (6 459)
Issue of shares 34 999 -
Share options issued 101 -
Share issue expenses (2 588) -
Net profit for the year 14 149 6 312
Minorities 1 532 -
Closing equity 48 046 (147)
Commitments
Non-cancellable operating lease rental:
Less than one year 8 752 8 169
Between one and five years 29 845 23 620
More than five years 20 560 14 380
1 Comparative figures for 2005 are given for Dialogue Group SA (Pty)
Limited in line with IFRS 3 Business Combinations (see `Basis of
preparation`).
2 Pro forma based on the issued shares pre-listing to give comparable
result.
Comments
The directors of Dialogue Group are pleased to present the maiden audited
results for the year ended 31 December 2006 ("the year") which exceeded pre-
listing forecasts as a result of a strong demand for the group`s services
in Quarter 4 of 2006.
Existing client contracts were expanded, while new contracts with major
blue-chip local and international clients were aggressively pursued and
won.
The company listed successfully on the Alternative Exchange ("AltX") of the
JSE Limited on 19 September 2006.
Review of operations
Dialogue Group is a call centre outsourcing group servicing both local and
foreign blue-chip companies. The group performs the entire call centre
service for and on behalf of clients, from onsite management of in-house
staff and technology to full outsourcing, operating from three centres
across South Africa.
Focus on quality and training led to increased demand and a widening of
mandates from existing clients. In addition two major offshore contracts
were secured including a UK-based retail bank which doubled the number of
agents on its programme after a successful trial period. A leading US
financial services provider awarded Dialogue Group its `Supplier of the
Month` award in November 2006, reflecting the group`s integral contribution
to generating bottom-line return for clients.
At year-end Dialogue Group employed 1 371 staff, up from 609 in 2005.
Black Economic Empowerment ("BEE")
During the year the group established a 60%-held joint venture, Interaction
Call Centres (Pty) Limited ("Interaction"), with black-owned and managed
Tlhalefang Placements CC. Interaction bid for and won a R106 million
contract awarded by MTN SA to outsource its prepaid call centre operations
in Durban, which commenced in June 2006.
Financial results
The excellent financial results reflect the group`s strong operational
performance. Revenue increased significantly by 55% to R121 million from
R78 million for the previous year and exceeded forecast by 6%. Operating
profit grew by 315% to R20 million, representing approximately 16% of
revenue. Headline earnings per share rose by 111% from 3,6 cents per share
(pro forma) to 7,6 cents per share and exceeds forecasts by 9%.
The growth in revenue can be largely attributed to demand from existing
clients. Increased operational capacity began to come onstream and enabled
the group to attract larger-scale longer-term customer contracts. Operating
margin has improved due to increased efficiencies and economies of scale on
larger client contracts.
Cash generated from operations increased substantially from R2,8 million to
R15,6 million, underpinning headline earnings while still funding increased
levels of working capital. The group invested a total of R2,5 million
during the year in infrastructure as the start of a programme to expand
existing operational capacity which will continue during 2007.
Post balance sheet event
On 16 February 2007, Dialogue Group made an irrevocable offer to lease a
total of 6 330m2 in a new office location in Johannesburg with the
intention of signing a 10-year lease agreement from 1 April 2007 to 31
March 2017.
Prospects
The R32,4 million (after expenses) raised on listing on AltX, will be used
to fund future growth in capacity and acquisition opportunities that
complement the group`s existing call centre operations and support
functions.
Ongoing expansion of existing client contracts will be a further key driver
of the group`s growth. In addition, Dialogue Group is constantly securing
new contract wins both in South Africa and offshore. The President`s public
support for reducing data and call charges should serve as a further
incentive to overseas blue-chip companies to recognise South Africa as a
preferred destination for business process outsourcing ("BPO"). This bodes
well for Dialogue Group`s prospects.
In light of the encouraging start to the new financial year and growth from
the existing client base, the board is confident that the pre-listing
forecasts for the year ending 31 December 2007 will be achieved.
Directorate
With effect from 29 November 2006, G Mkhari was appointed as an independent
non-executive director and JD Johnston resigned as a director.
People
The group recognises the value in its people and continues to foster a
strong management team. Dialogue Group thanks its management and employees
for their commitment and hard work which helped the group to achieve its
listing on AltX and the strong results for the year. The group also thanks
its business partners, customers, business advisors and shareholders for
their continued support.
Dividend
In line with current policy to reinvest profits to fund future growth and
development, no dividend has been declared for the year.
Basis of preparation
The consolidated annual financial statements have been prepared in
accordance with International Financial Reporting Standards ("IFRS"), its
interpretations adopted by the International Accounting Standards Board
("IASB") and the requirements of the South African Companies Act.
On 7 August 2006, Dialogue Group SA (Pty) Limited ("Dialogue Group SA")
acquired the entire share capital of Dialogue Group to facilitate its
listing on AltX. In line with IFRS, this has been treated as a reverse
acquisition and the results for 2006 therefore reflect a consolidation of
Dialogue Group SA as the acquirer. Consolidated comparatives for 2005 are
given for Dialogue Group SA.
The results have been audited by BDO Spencer Steward (Cape Town) Inc, and
their unqualified audit opinion is available for inspection at the
company`s registered office. There has been no change to the group`s
accounting policies for the year.
By order of the Board
Jason Drew (CEO) Paul Oosthuizen (FD)
7 March 2007
Directors: SJH Rodger (Chairman)*+, JJ Drew (CEO)+, DEB Miller,
PS Oosthuizen (FD), RK Mangena*, G Mkhari#*
* Non-executive # independent + British
Registered office:
Dialogue House, Rua Vasco da Gama, Foreshore, Cape Town
(PO Box 8355, Rogge Bay, 8012)
Company Secretary:
SH Rodger FCIS BL
Dialogue House,
Rua Vasco da Gama, Foreshore, Cape Town
(PO Box 8355, Rogge Bay, 8012)
Transfer secretaries:
Computershare Investor Services 2004 (Pty) Limited
Ground Floor, 70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Designated advisor:
Bridge Capital Advisors (Pty) Limited
Building 22A, The Woodlands, Woodland Drive, Woodmead
(PO Box 651010, Benmore, 2010)
www.dialogue-group.com
Date: 07/03/2007 13:10:49 Produced by the JSE SENS Department.
