Your SlideShare is downloading. ×

SilverBridge Holdings Ltd HY 2014 results

222
views

Published on

SilverBridge Holdings Ltd HY 2014 results

SilverBridge Holdings Ltd HY 2014 results


0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
222
On Slideshare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. First Floor, Castle View North, 495 Prieska Street, Erasmuskloof, Pretoria, 0048 (P.O. Box 11799, Erasmuskloof, Pretoria, 0048) www.silverbridge.co.za UNAUDITED CONDENSED INTERIM GROUP FINANCIAL STATEMENTS for the six month period ended 31 December 2013
  • 2. 1 GROUP PROFILE SilverBridge offers clients in the insurance industry reliable solutions that aim to simplify their operations by enabling and improving their business processes. We achieve this by implementing our system platforms and customising them to meet client needs. After being implemented, our software is rented to our clients on a usage basis. The valuable experience we have gained through our existing African footprint and strategic partnerships positions us well to take advantage of opportunities while making life insurance simpler and more accessible. Exergy is our flagship platform that enables core back office policy administration in the life assurance industry. The broader Exergy solution package has specific applications which can be customised to suit the needs of a long-term insurer. We aim to enable our clients to drive their strategic business objectives more efficiently. Our approach is to identify and define strategic client business objectives, translate them into IT requirements and implement sustainable solutions. 60 000 50 000 40 000 30 000 20 000 10 000 0 H1’10 H2’10 H1’11 H2’11 4m’11 H1’12 H2’12 H1’13 H2’13 H1’14 ConsultingConnect Implementation Connect SupportSilverBridge software rental & maintenance TOTAL REVENUE PER SEGMENT REVENUE AND EBIT MARGIN 0 -10% 20 000 -5% 40 000 0% 60 000 5% 80 000 10% 100 000 15% 120 000 20% 140 000 Revenue(R’000) EBITMargin% 25% 2009 2010 2011 2011 2012 (16m) 2013 H1 2014 Revenue R’000 EBIT margin Revenue(R’000) GROUP STRUCTURE *SilverBridge support was a minor contributor to Total Revenue and although included in Total Revenue not visible on the graph
  • 3. 32 Unaudited Condensed Consolidated Statement of Financial Position as at 31 December 2013 Unaudited Unaudited Audited as at as at as at 31 December 31 December 30 June 2013 2012 2013 Notes R’000 R’000 R’000 ASSETS Non-Current Assets Equipment 1 069 1 715 841 Intangible assets 11 206 11 705 11 670 Deferred tax assets - 1 116 280 Withholding tax rebates receivable 2 523 2 017 2 017 Total Non-Current Assets 14 798 16 553 14 808 Current Assets Income tax receivable - 833 1 102 Revenue recognised not yet invoiced 1.3 3 978 1 540 1 297 Trade and other receivables 8 058 13 341 12 308 Cash and cash equivalents 4 757 874 3 203 Total Current Assets 16 793 16 588 17 910 Total Assets 31 591 33 141 32 718 EQUITY AND LIABILITIES Capital and Reserves Issued capital 348 348 348 Share premium 11 871 11 871 11 871 Treasury shares (197) (197) (197) Share based payment reserve 330 1 488 1 070 Retained earnings 13 981 8 566 11 137 Total Equity 26 333 22 076 24 229 Non-Current Liabilities Deferred tax liability 224 - - Total Non-Current Liabilities 224 - - Current Liabilities Deferred revenue 1.3 473 4 478 1 682 Income tax payable - 75 - Trade and other payables 1.4 4 561 6 512 6 807 Total Current Liabilities 5 034 11 065 8 489 Total Liabilities 5 258 11 065 8 489 Total Equity and Liabilities 31 591 33 141 32 718 Net asset value per share (cents) 75.9 63.7 69.9 Net tangible asset value per share (cents) 43.6 29.9 36.2 Unaudited Condensed Consolidated Statement of Comprehensive Income for the six month period ended 31 December 2013 Unaudited Unaudited Audited six months six months 12 months ended ended ended 31 December 31 December 30 June Percentage 2013 2012 2013 Change Notes R’000 R’000 R’000 % Revenue 39 072 41 720 82 247 (6) Other income 33 126 316 (74) Operating expenses (36 404) (41 019) (79 348) (11) Operating profit 2 701 827 3 215 227 Finance income 77 44 182 75 Finance expense (26) (84) (310) (69) Profit before taxation 2 752 787 3 087 250 Taxation (820) (321) (765) 155 Profit and total comprehensive income for the period 1 932 466 2 322 315 Number of shares in issue (‘000) 1.2 34 781 34 781 34 781 Weighted average number of shares in issue (‘000) 1.2 34 675 34 675 34 675 Diluted weighted average number of shares (‘000) 1.2 34 675 34 675 34 675 Basic earnings per share (cents) 1.2 5.6 1.3 6.7 331 Diluted earnings per share (cents) 1.2 5.6 1.3 6.7 331 39 072 41 720 82 247 (6) 33 126 316 (74) (36 404) (41 019) (79 348) (11) 2 701 827 3 215 227 77 44 182 75 (26) (84) (310) (69) 2 752 787 3 087 250 (820) (321) (765) 155 1 932 466 2 322 315 34 781 34 781 34 781 34 675 34 675 34 675 34 675 34 675 34 675 5.6 1.3 6.7 331 5.6 1.3 6.7 331
  • 4. 54 Unaudited Condensed Consolidated Statement of Cash Flows for the six month period ended 31 December 2013 Unaudited Unaudited Audited six months six months 12 months ended ended ended 31 December 31 December 30 June 2013 2012 2013 R’000 R’000 R’000 Cash generated from/(utilised in) operations 1 587 (3 218) 157 Interest received 77 44 112 Interest paid (26) (84) (190) Taxation received/(paid) 802 (172) (173) Net cash inflow/(outflow) from operating activities 2 440 (3 430) (94) Cash flows from investing activities Plant and equipment acquired to maintain operations (535) (241) (492) Proceeds from disposal of equipment - 24 24 Cash outflow from capitalisation of development costs (351) - (756) Net cash outflow from investing activities (886) (217) (1 224) Cash flows from financing activities Dividends paid to equity holders - - - Net cash outflow from financing activities - - - Net increase/(decrease) in cash and cash equivalents 1 554 (3 647) (1 318) Cash and cash equivalents at the beginning of the period 3 203 4 521 4 521 Cash and cash equivalents at the end of the period 4 757 874 3 203 UnauditedCondensedConsolidatedStatementofChangesinEquityforthesixmonthperiodended31December2013 Sharebased ShareTreasurypaymentRetained IssuedcapitalpremiumsharesreserveearningsTotalequity R’000R’000R’000R’000R’000R’000 Balanceat1July201234811871(197)1338810021460 Totalcomprehensiveincomefortheperiod Profitorloss----466466 Othercomprehensiveincome------ Totalcomprehensiveincomefortheperiod----466466 Transactionswithowners,recordeddirectlyinequity Contributionsbyanddistributionstoowners Equitysettledsharebasedpayment---150-150 Totalcontributionsbyanddistributionstoowners---150-150 Changesinownershipinterestsinsubsidiariesthat donotresultinalossofcontrol Totaltransactionswithowners---150-150 Balanceat31December201234811871(197)1488856622076 Totalcomprehensiveincomefortheperiod Profitorloss––––18581858 Totalcomprehensiveincomefortheperiod––––18581858 Transactionswithowners,recordeddirectlyinequity Contributionsbyanddistributionstoowners Equitysettledsharebasedpayment–––295–295 Transferofreserveofshareoptionsthatdidnotvest–––(713)713– Totalcontributionsbyanddistributionstoowners–––(418)713295 Changesinownershipinterestsinsubsidiariesthat donotresultinalossofcontrol Totaltransactionswithowners–––(418)713295 Balanceat30June201334811871(197)10701113724229 Totalcomprehensiveincomefortheperiod Profitorloss----19321932 Totalcomprehensiveincomefortheperiod----19321932 Transactionswithowners,recordeddirectlyinequity Contributionsbyanddistributionstoowners Equitysettledsharebasedpayment---172-172 Transferofreserveofshareoptionsthatdidnotvest---(912)912- Totalcontributionsbyanddistributionstoowners---(740)912172 Changesinownershipinterestsinsubsidiariesthat donotresultinalossofcontrol Totaltransactionswithowners---(740)912172 Balanceat31December201334811871(197)3301398126333
  • 5. 76 Unaudited Condensed Segment Reports for the six month period ended 31 December 2013 Total Implementation Support Research & Software rental services services development & maintenance R’000 R’000 R’000 R’000 R’000 Unaudited six months ended 31 December 2012 Revenue 41 720 13 120 11 554 - 17 046 Direct segment cost (26 657) (11 406) (7 596) (7 097) (558) Cost capitalised - - - - - Segment gross profit 15 063 1 714 3 958 (7 097) 16 488 Indirect segment cost (12 829) (5 490) (3 656) (3 415) (268) Segment result 2 234 (3 776) 302 (10 512) 16 220 Unallocated expenses * (1 407) Operating profit 827 Finance income 44 Finance expense (84) Income tax expense (321) Profit for the period 466 * Unallocated expenses relate to costs incurred at a corporate level. Implementation Support Research & Software rental Total services services development & maintenance R’000 R’000 R’000 R’000 R’000 Revenue 82 247 24 673 23 381 - 34 193 Direct segment cost (49 268) (21 988) (13 519) (12 787) (974) Cost capitalised 756 - - 756 - Segment gross profit 33 734 2 685 9 862 (12 031) 33 219 Indirect segment cost (28 090) (12 536) (7 708) (7 290) (555) Segment result 5 645 (9 851) 2 154 (19 322) 32 663 Unallocated expenses * (2 431) Operating profit 3 215 Finance income 182 Finance expense (310) Income tax (765) Profit for the period 2 322 * Unallocated expenses relate to costs incurred at a corporate level. Assets and liabilities The assets and liabilities of the Group are organised and managed at a corporate business support level. As the assets and liabilities contribute at a corporate level, it is not practical to determine a reasonable allocation of the assets and liabilities to the business segments. Unaudited Condensed Segment Reports for the six month period ended 31 December 2013 Reportable Segment Report Owing to structural changes in the operations of the Group and the introduction of the Connect service business, the segment reporting was changed to align with the manner in which the operations are measured. A new segment, SilverBridge support services, was introduced. Prior period segment results have not been restated owing to the relatively small impact of the introduction of the new segment and that a comparison between the prior period and current period is still easily made. For comparison with prior period results, the Connect implementation services segment relates to the previous Implementation segment. The Connect support services segment together with the SilverBridge support services segment relates to the previous Support segment Total Connect Connect SilverBridge SilverBridge SilverBridge implementation support support research & software services services services development rental & maintenance R’000 R’000 R’000 R’000 R’000 R’000 Unaudited six months ended 31 December 2013 Revenue 39 072 13 407 6 381 278 - 19 006 Direct segment cost (20 322) (10 375) (3 435) (407) (5 460) (645) Cost capitalised 351 - - - 351 - Segment gross profit 19 101 3 032 2 946 (129) (5 109) 18 361 Indirect segment cost (14 780) (7 546) (2 498) (296) (3 971) (469) Segment result 4 321 (4 514) 448 (425) (9 080) 17 892 Unallocated expenses * (1 620) Operating profit 2 701 Finance income 77 Finance expense (26) Income tax expense (820) Profit for the period 1 932 * Unallocated expenses relate to costs incurred at a corporate level.
  • 6. 98 1.2. Earnings per share (continued) Headline and diluted headline earnings per ordinary share Headline and diluted headline earnings per ordinary share is calculated by dividing the headline earnings attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period. Unaudited Unaudited Audited six months six months 12 months as at as at as at 31 December 2013 31 December 2012 30 June 2013 Number of Number of Number of shares shares shares ‘000 ‘000 ‘000 Weighted average number of shares in issue 34 675 34 675 34 675 Reconciliation between basic earnings and headline earnings Basic earnings 1 932 466 2 322 Adjusted for: – (Profit)/Loss on disposal of equipment – (23) 298 Headline earnings/(loss) 1 932 443 2 620 Headline and diluted headline earnings/(loss) per share (cents) 5.6 1.3 7.6 1.3 Deferred revenue and revenue recognised but not yet invoiced Deferred revenue and revenue recognised but not yet invoiced refers to the timing difference between recognition of revenue and invoicing to the client based on the contracts. The Group is in a net asset position of R3.5m. The assets will be converted to accounts receivable in the short-term. Unaudited Unaudited Audited six months six months 12 months ended ended ended 31 December 31 December 30 June 2013 2012 2013 R’000 R’000 R’000 Current asset Revenue recognised not yet invoiced 3 978 1 540 1 297 Current liability Deferred revenue (473) (4 478) (1 682) Net asset/(liability) 3 505 (2 938) (385) COMMENTARY 1. NOTES TO THE ABRIDGED GROUP FINANCIAL STATEMENTS 1.1. Basis of preparation The condensed interim financial statements are prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards (“IFRS”) International Accounting Standard 34 (“IAS 34”), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the Listings Requirements of JSE Limited (“the Listings Requirements”) and the requirements of the Companies Act of South Africa (Act 71 of 2008) as amended (“the Companies Act”). The accounting policies applied in the preparation of these condensed interim financial statements, which are based on reasonable judgment and estimates, are in accordance with IFRS and are consistent with those applied in the annual financial statements for the year ended 30 June 2013. These condensed interim financial statements have been prepared by Petro Mostert CA(SA), Head of Finance and Shared Services, under the supervision of the Financial Director, Lee Kuyper CA(SA). The directors take full responsibility for the preparation of these interim financial statements and the financial information has been correctly extracted from the underlying financial information. These interim results have not been audited or reviewed by the Group’s auditors. 1.2. Earnings per share Basic and diluted earnings per ordinary share Basic and diluted earnings per ordinary share is calculated by dividing the earnings for the period attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period. Unaudited Unaudited Audited six months six months 12 months as at as at as at 31 December 2013 31 December 2012 30 June 2013 Number Number Number of shares of shares of shares ‘000 ‘000 ‘000 Reconciliation of the weighted average number of shares in issue Shares in issue at the beginning of the period 34 781 34 781 34 781 Effect of treasury shares acquired on 1 March 2007 (106) (106) (106) Weighted average number of shares in issue at the end of the period 34 675 34 675 34 675 Earnings attributable to ordinary shareholders (R’000) 1 932 466 2 322 Basic and diluted earnings per share (cents) 5.6 1.3 6.7
  • 7. 1110 SEGMENTAL REVIEW Connect implementation services This segment implements our solutions for clients and is project based. Revenue was slightly up by 2%. The gross profit margin improved to 23% as a result of careful project management and improvements in our project methodology. We remained focused on our largest implementation project, which from a margin perspective, still weighs heavily on the Group. We also have a number of smaller projects with shorter timeframes and healthier margins. We intend making further improvements in this segment over time through further refinement of our project methodology and sharing implementation risk with implementation partners on larger projects. Connect support services Support is contracted on a monthly basis and is annuity based. Revenue declined significantly as a result of our strategic decision to enable our clients and partners to implement and support our software in two of our large support clients. The decision is in line with our overall strategy to focus on the software rental. The gross margin remained healthy and after indirect costs, support made a small profit. The remainder of our support contracts relate to smaller clients throughout Africa and will continue to be a focus and a source of margin to the Group. SilverBridge support services This is a new segment that was created from the separation of SilverBridge’s software activities (SilverBridge) from its implementation and support activities (Connect). The segment provides expert level software support and training services to clients and implementation partners. The segment is still small and posted a small loss for the period. SilverBridge software rental Software rental is annuity based. It depends on usage, increasing with the number of contracts or policies administered. We are pleased to report an improved 11% growth in software rental revenue. This was driven mainly by increased usage from the existing client base. We saw reasonable increases in the number of policies administered this period – a positive change from being flat for some time. Our software and the growth of our annuity rental stream remain a core focus and a priority going forward. SilverBridge research and development (R&D) Although we continue to keep our core software relevant, the bulk of our R&D efforts remained on further development of the Eco-Suite, a set of assets that forms a platform for implementing more efficiently and enabling partners and clients. It includes tools, processes, testing and training. It enables implementation partners to implement SilverBridge’s systems more easily using only high level specialist services from SilverBridge. The Eco-Suite remains important to the Group and will continue to be refined. It helped us internally with our own improved methodology and continues to be actively used in the engagement with new implementation partners. 1.4 Trade and other payables Trade and other payables comprised of the following: Unaudited Unaudited Audited six months six months 12 months as at as at as at 31 December 31 December 30 June 2013 2012 2013 R’000 R’000 R’000 Trade payables 1 568 2 650 2 783 Withholding tax rebate payable 278 278 278 Leave accrual 1 905 1 804 2 052 Liability on capital reduction 30 30 30 Other payables (accruals) 780 1 750 1 664 Total 4 561 6 512 6 807 2. CORPORATE ACTIVITY 2.1 Changes to the board During the period Mr Lee Kuyper CA(SA), an Executive Director had also assumed the role of Financial Director of the Group with effect from 11 September 2013. As such Mr Jaco Swanepoel, the Chief Executive Officer of the Group, is no longer fulfilling the role of acting Financial Director. No other changes occurred during the period. 2.2 Dividends and capital distribution No dividend or capital distribution was declared for the period under review. 2.3 Subsequent events Mr Litha Gcwabe has resigned from the board with effect 13 February 2014, following his resignation from Kagiso Tiso Holdings Ltd., a major shareholder in SilverBridge. No other events occurred subsequent to the period end that would require the interim financial statements to be adjusted. 3. FINANCIAL RESULTS AND PERFORMANCE The Group’s recovery has continued with improved results for this 6-month period. Although we are in a better position than before, we continue to aim for further improvement to get the business performing at an optimal level. The general state of our client engagements is positive. Our projects are being well executed and we remain focused on careful management of our largest current implementation project. Group revenue was slightly down on a comparative basis but the composition has changed to a more favourable contribution from our growing annuity-based software rental stream. This is in line with our strategy and remains a focus area. We continued to reduce our overall cost base and are pleased with the ongoing improvement in our gross and EBIT margin as a result. A net profit after tax of R1.9 million was generated, significantly more than the comparative period. The business has moved into a position of producing monthly profits on a consistent basis. Our cash flow and cash position has improved significantly. We continue to manage cash and working capital carefully.
  • 8. 12 CORPORATE INFORMATION SILVERBRIDGE HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration No. 1995/006315/06) JSE SHARE CODE: “SVB” ISIN CODE: ZAE000086229 (SilverBridge or the Group) DIRECTORS OF SILVERBRIDGE HOLDINGS Robert Emslie (Chairman)**, Jaco Swanepoel (CEO), Jeremy de Villiers **, Litha Gcwabe*, Hasheel Govind *, Tyrrel Murray*, Lee Kuyper (Financial Director). (All the directors are South African citizens). * Non-executive **Independent non-executive REGISTERED OFFICES First Floor, Castle View North 495 Prieska Street, Erasmuskloof, Pretoria, 0048 (PO Box 11799, Erasmuskloof, 0048) COMPANY SECRETARY Fusion Corporate Secretarial Services Proprietary Limited represented by Melinda Gous First Floor, The Greens Office Park Charles de Gaulle Avenue Highveld, Centurion Gauteng LEGAL ADVISERS Gildenhuys Malatji Attorneys Inc. (Registration number: 1997/002114/21) GLMI House Harlequins Office Park, 164 Totius Street, Groenkloof (PO Box 619, Pretoria, 0001) GROUP AUDITORS: KPMG Inc. (Registration number: 1999/021543/21) KPMG Forum, 1226 Francis Baard Street, Hatfield (PO Box 11265, Hatfield, 0028) TRANSFER SECRETARIES Computershare Investor Services Proprietary Limited (Registration number: 2004/003647/07) 70 Marshall Street, Johannesburg, (Call centre: 0861 100 634) (PO Box 61051, Marshalltown, 2107) DESIGNATED ADVISER Merchantec Capital (Registration number: 2008/027362/07) Second Floor, North Block Hyde Park Office Tower, Corner 6th Road and Jan Smuts Avenue, Hyde Park (PO Box 41480, Craighall, 2024) 4. GROUP OUTLOOK The changing environment within our target market continues to present new opportunities as financial service institutions search for ways to reduce costs and improve service to their clients. We continue to see financial service providers driving internal efficiencies and differentiating their products as a means to capture and retain market share. SilverBridge remains well positioned to meet these needs. In our own business we have challenges and risks which we will continue to focus on, manage and mitigate. We continue with the challenge of gearing up an implementation partner to carry out large implementations of our software. We are also carefully managing the risks of our own current large implementation. Nevertheless, the outlook for the Group remains positive. Building our annuity revenue remains an ongoing goal. Making implementations simpler and improving quality for us and our partners will support this goal. We continue to actively develop our partner channel and refine the tools and processes to enable efficient delivery. In addition, we are engaged in several implementations and we remain active in securing new business. On behalf of the board of directors Robert Emslie Jaco Swanepoel Chairman Chief Executive Officer Pretoria 25 February 2014

×