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SecureData Holdings Ltd HY 2014 results

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SecureData Holdings Ltd HY 2014 results

SecureData Holdings Ltd HY 2014 results

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  • 1. Un audited Results for the six months ended 31 January 2013 Condensed Consolidated Statement of Changes in Equity Condensed Consolidated Statement of Comprehensive Income [ for the six months ended 31 January 2013 ] [ for the six months ended 31 January 2013 ] Unaudited six months ended 31 January 2013 R’000 Revenue Reviewed six months ended 31 January 2012 R’000 138 096 119 469 222 229 Unaudited six months ended 31 January 2013 R’000 246 Share capital Reviewed six months ended 31 January 2012 R’000 246 Audited Twelve months ended 31 July 2012 R’000 246 57 320 118 900 Audited twelve months ended 31 July 2012 R’000 118 900 118 900 118 900 118 900 Share premium Balance at beginning of the period Earnings before interest, taxation, depreciation and amortisation (EBITDA) and other financial items Depreciation and amortisation 845 (1 538) 284 (1 984) (44 961) (4 109) (826) (712) (544) (1 440) (1 345) (2 764) (693) 1 854 (41) 2 046 (1 700) 110 (1 540) 2 062 (49 070) 161 (3 590) (695) Profit/(loss) before taxation Taxation 3 166 (1 113) (1 068) (355) (53 194) 5 469 – Normal taxation (1 113) (355) – Depreciation – Amortisation Loss from operations Finance income Finance costs Other financial items 5 469 Profit/(loss) on continuing operations Discontinued operations (Note 1) 2 053 – (1 423) 10 382 (47 725) 9 631 Profit/(loss) for the period 2 053 8 959 (38 094) Attributable to: – owners of the parent – minority interest 2 053 – 8 834 125 (39 395) 1 301 Profit/(loss) for the period 2 053 8 959 (38 094) Profit/(loss) for the period Foreign exchange conversion movements 2 053 1 8 959 7 796 (38 094) 25 440 Total comprehensive income/(loss) for the period 2 054 16 755 (12 654) Attributable to: – owners of the parent – minority interest 2 054 – 15 390 1 365 (14 809) 2 155 Total comprehensive income/(loss) for the period Capital reduction (61 580) Treasury shares Balance at beginning of the period – (19 163) (23 336) Own shares acquired by subsidiary – (23 336) (23 336) (23 336) (23 336) 4 173 – – 1 255 1 255 3 348 3 322 1 255 3 322 – 26 – Share-based payment equity reserve Balance at beginning of the period Share-based payment transactions during the period – Transfer to retained earnings Foreign currency translation reserve Balance at beginning of the period Foreign exchange movements during the period 26 25 26 (2 093) (18 005) (24 561) 25 (24 561) 1 6 556 24 586 Retained earnings Balance at beginning of the period Profit/(loss) for the period 48 365 46 312 2 053 92 448 83 614 8 834 46 312 83 614 (39 395) Transfer to retained earnings Equity attributable to owners of the parent – – 2 093 88 049 173 601 143 402 Minority interest Balance at beginning of the period Recognised income for the period Disposal of subsidiary – – – – 11 953 10 588 125 – – 10 588 1 301 (12 743) 2 054 16 755 (12 654) Foreign exchange movements – 1 240 854 Earnings/(loss) per share (cents) 0,9 3,9 (17,3) Total capital and reserves 88 049 185 554 143 402 – Continued operations – Discontinued operations 0,9 – (0,6) 4,5 (20,9) 3,6 Commentary Diluted earnings/(loss) per share (cents) 0,9 3,9 (17,3) – Continued operations – Discontinued operations 0,9 – (0,6) 4,5 (20,9) 3,6 Weighted average numbers of shares on which: – earnings per share is based (’000) – diluted earnings per share is based (’000) Number of ordinary shares in issue (’000) 227 129 227 129 246 320 228 395 228 395 246 320 2 053 – 118 8 834 – – 228 395 228 395 246 320 Reconciliation between earnings and headline earnings: – Profit/(loss) for the period attributable to ordinary shareholders – Goodwill written off – Loss on disposal of subsidiary – Loss on disposal of property, plant and equipment net of tax – Headline earnings Headline earnings per share (cents) 2 171 1,0 – Continued operations – Discontinued operations 1,0 – (25) 8 809 3,9 (39 395) 2 359 1 112 1 161 (34 763) (15,2) (0,6) 4,5 (19,4) 4,2 8 834 3 567 – – (1 485) (39 395) 6 656 2 359 1 112 (1 198) Reconciliation between earnings and adjusted earnings: – Profit/(loss) for the period attributable to ordinary shareholders – Amortisation (after taxation) – Goodwill written off – Loss on disposal of subsidiary – Derivatives (after taxation) – Foreign exchange losses on group loans (after taxation) 2 053 513 – 118 (1 558) – Adjusted earnings Adjusted earnings per share (cents) 1 126 0,5 – Continued operations – Discontinued operations 0,5 – (6 525) (9 082) 4 391 1,9 (39 548) (17,3) (0,8) 2,7 General review Security of electronic information of all types is a constant and growing concern for enterprises. SecureData is in the business of keeping the electronic data of our clients safe, available and reliable. Appropriate products and services are supplied by highly trained and skilled personnel. We provide products and services to almost every major corporation in South Africa, to African businesses and governments generally, as well as providing specialised information security services in Europe and USA. Between May 2012 and today Securedata has undergone extensive restructuring and a major overhaul of its leadership team. This process has now been completed and the leadership is functioning as an optimised team. With all legacy issues resolved the team has now been able to focus on the operation and growth of the business. Group headcount has reduced from 140 to 96. Certain products and services were discontinued, and other new ones introduced. Experienced senior personnel were hired to strengthen the team. After very disappointing trading results in the immediate prior six month period to 31 July 2012, the period under review has seen a return to profitability. Group EBITDA from continuing operations increased to R0,85 million (2012: R0,28 million) on revenues from continuing operations that increased to R138,1 million (2012: R119,5 million) reflecting an EBITDA margin of 0,6% (2012: 0,2%) for the past six months compared to the comparable prior period.The increase in revenue is due to focussing on the generation of new business in partnership with our channel resellers. SecureData Africa and SensePost recorded EBITDA profits of R0,3 million and R3,2 million, respectively, for the period. Compared to the group EBITDA loss from continuing operations of R45 million for the year ended 31 July 2012, and taking into account the inclusion of restructuring costs in these results, this has been a remarkable six months for the group. The increase in profits has resulted in headline earnings per share on continuing operations of 1,0 cent (2012: loss of 0,6 cents) and adjusted earnings per share on continuing operations of 0,5 cents (2012: loss of 0,8 cents). The net cash position of the group improved significantly, when compared to the same period ending 31 January 2012, to R41,0 million (2012: R0,4 million) following the sale of SecureData Europe. The sale enabled the group to return excess sale proceeds to shareholders by way of a capital reduction of 25 cents per share (R61,6 million) which was paid to shareholders on 24 December 2012. Technology renewal revenue is important to our business, but the focus turned to the generation of new business in partnership with our channel resellers. This effort is starting to bear fruit and we are seeing the beginnings of some material growth. Any growth will focus on higher margin business opportunities and will be prudently managed so not to stretch the resources of the business.. Operational review SecureData operates through two divisions, SecureData Africa and SensePost. SecureData Africa (19,5) 2,2 Note 1 Discontinued operations Revenue Earnings before interest, taxation, depreciation and amortisation (EBITDA) and other financial items Depreciation and amortisation – – 11 954 (4 146) 17 360 (7 707) – Depreciation – Amortisation – – (727) (3 419) (1 402) (6 305) Profit from operations Finance income Finance costs – – – 7 808 10 7 612 9 653 67 9 486 – Interest paid – Foreign exchange gains/(losses) on loan to subsidiary – (1 452) (3 126) – 9 064 12 612 Profit before taxation Taxation – – 15 430 (5 048) 19 206 (8 463) – Normal taxation – (5 048) (8 463) Loss on sale of subsidiary – – Profit for the period – 10 382 Six months to 31 January 2013 R’000 – 116 244 220 317 Revenue EBITDA 121 319 331 0,3 Twelve months to 31 July 2012 R’000 16,0 122,3 189 207 (45 897) (1,4) (24,3) SecureData Africa has seen a turnaround with EBITDA of R0,3 million (2012: loss of R1,5 million) on revenue of R121,3 million (2012: R104,6 million). The revenue growth of 16,0% over the prior period resulted in revenue for the six months being equal to 64% of the revenue in the prior year to 31 July 2012. Significant growth was achieved from territories north of South Africa which now comprises some 20% (2012: 10%) of the business. We have seen major demand for our products and services come from the emphasis on remote device management, cloud computing, data loss protection and intrusion detection and recovery. Our staff have been retrained to address solutions to specific risks in enterprises. This has been well received by our end-user customers. We always approach end-user customers in partnership with channel resellers. This has introduced transparency and certainty into the market and gives assurance to the procurement functions of end-user customers that they are buying from competitive suppliers who fully understand their needs. SensePost Six months to 31 January 2013 R’000 Six months to 31 January 2012 R’000 16 636 3 145 15 289 4 001 18,9 9 631 26,2 Revenue EBITDA [ at 31 January 2013 ] Growth % 104 582 (1 482) EBITDA margin (%) (1 112) Condensed Consolidated Statement of Financial Position Six months to 31 January 2012 R’000 EBITDA margin (%) Growth % Twelve months to 31 July 2012 R’000 8,8 (21,4) 33 576 8 075 24,0 Unaudited at 31 January 2013 R’000 Reviewed at 31 January 2012 R’000 Audited at 31 July 2012 R’000 64 328 213 802 65 917 3 396 37 459 4 633 18 840 6 420 135 713 37 544 34 125 3 836 37 459 5 084 19 538 106 667 187 650 139 415 12 650 51 753 1 296 40 968 16 026 146 295 724 24 605 7 482 41 207 1 139 89 587 170 995 401 452 205 332 SecureData Africa SensePost Head office Consolidation entries 121 319 16 636 141 – 88 049 185 554 143 402 Continued operations 138 096 845 246 57 320 (19 163) 1 255 26 48 365 246 118 900 (23 336) 3 348 (18 005) 92 448 246 118 900 (23 336) 1 255 25 46 312 SecureData Europe Head office Consolidation entries – – – – – – 116 492 – (248) 11 949 6 – – – 116 244 11 955 220 317 17 360 138 096 845 235 713 12 239 442 546 (27 601) 88 049 – 173 601 11 953 143 402 – 1 159 13 428 1 301 – 1 159 3 116 10 312 – 1 301 ASSETS Non-current assets Property, plant and equipment Goodwill Intangible assets Deferred tax asset Current assets Inventories Trade and other receivables Taxation prepaid Cash and cash equivalents Total assets EQUITY AND LIABILITIES Equity Share capital Share premium Treasury shares Share-based payment equity reserve Foreign currency translation reserve Retained earnings Equity attributable to owners of the parent Minority interest Non-current liabilities Loans and borrowings Deferred tax liability Current liabilities 81 787 202 470 60 629 79 777 543 1 454 13 – 139 956 2 310 2 211 24 220 33 773 56 459 2 707 1 454 9 – 170 995 401 452 205 332 35,7 38,8 70,5 76,0 58,2 62,8 Unaudited six months ended 31 January 2013 R’000 Reviewed six months ended 31 January 2012 R’000 Audited twelve months ended 31 July 2012 R’000 Trade and other payables Derivative financial instruments Taxation Bank overdrafts Loans and borrowings Total equity and liabilities Net asset value per share (cents) Net asset value per share net of treasury (cents) Condensed Consolidated Statement of Cash Flows [ for the six months ended 31 January 2013 ] Cash flows from operating activities 9 613 (18 800) (53 358) Profit/(loss) before taxation Adjustments not affecting the flow of funds 3 166 (2 300) 14 362 (2 584) (35 100) 8 809 Operating income before working capital changes Increase/(decrease) in working capital 866 7 606 11 778 (27 706) (26 291) (18 459) Cash generated from operations 8 472 1 141 (15 928) (2 872) (44 750) (8 608) 1 854 (41) (672) 120 (2 992) – 228 (6 716) (2 120) Cash flows from investing activities Cash flows from financing activities (984) (57 407) (1 440) (10 332) 155 406 (44 012) Capital reduction of shares in issue Own shares capital reduction by subsidiary Loans repaid (61 580) 4 173 – – – (10 332) – – (44 012) (Decrease)/increase in cash equivalents Foreign exchange movements in cash balances Cash and cash equivalents at beginning of the period (48 778) Finance income Finance costs Taxation paid Cash and cash equivalents at end of the period (30 572) 58 036 155 3 797 4 382 89 578 27 160 27 160 40 955 385 89 578 SensePost remained profitable with an EBITDA of R3,1 million (2012: R4 million) on increased revenues of 8,8% compared to the same period last year. Some major training events which generate significant revenue are not always performed during the same period year on year and this has resulted in the lower EBITDA compared to the same period for last year. We expect to recover this in the second half of the year. SensePost continues to keep their clients’ data and systems safe by performing complex and skilled penetration testing, vulnerability assessments and training. Approximately a quarter of the revenues were generated outside of South Africa, mainly in the USA and UK. We are continuing to invest in the UK operations. The table below summarises the group results: Six months to 31 January 2013 Revenue EBITDA R’000 R’000 Discontinued operations Group results 331 3 145 (2 631) – Six months to 31 January 2012 Revenue EBITDA R’000 R’000 Twelve months to 31 July 2012 Revenue EBITDA R’000 R’000 104 582 15 289 – (402) 189 207 33 576 – (554) (45 897) 8 075 (7 139) – 222 229 (44 961) 221 314 – (997) 20 482 (3 122) – 119 469 (1 482) 4 001 (2 235) – 284 Basis of preparation These unaudited condensed interim consolidated financial statements have been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards and the presentation and disclosure requirements of IAS 34 – Interim Financial Reporting, the Companies Act, 2008 (Act 71 of 2008), as amended, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, and with the JSE Limited Listings Requirements. The accounting policies applied in the preparation of these unaudited condensed interim consolidated financial statements conform to the requirements of International Financial Reporting Standards, and are consistent with those applied in the prior year. The results have been prepared on the going-concern basis under the supervision of Carlo Venter, the Financial Director, and have not been reviewed or audited by the group’s auditors. Subsequent events The directors are not aware of any material matter or circumstance arising since the end of the financial period under review to the date of this report. Directorate Andrew Aitken resigned as director on 24 January 2013, and we would like to thank him for his contribution made to the group over a number of years. For and on behalf of the board PR Pretorius MG Crisp Chairman Chief Executive Officer 22 March 2013 SecureData Holdings Limited Incorporated in the Republic of South Africa (Registration number 1998/010017/06) Share code: SDH ISIN: ZAE000096368 (“SecureData” or “the group”) Directors: PR Pretorius† (Chairman), MG Crisp (Chief Executive Officer), CW Venter (Financial Director) P Sneddon^, VJ Archer*, L Koyana*, S Midgley*, N Mthembu† †Non-executive ^Lead independent non-executive *Independent non-executive Registered office: SecureData Holdings Limited Nicol Main Office Park 4 Bruton Road, Bryanston, 2021 (PO Box 4673, Rivonia, 2128) Company secretary: Merchantec Proprietary Limited Transfer secretaries: Computershare Investor Services Proprietary Limited (Registration number 2004/003647/07) 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) Sponsor: Merchantec Capital www.securedataholdings.com