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POY - Poynting - Provisional Summarised Consolidated Financial Statements for
the year ended 30 June 2010
POYNTING HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1997/011142/06)
Share code: POY ISIN: ZAE000121299
("Poynting" or "the company" or "the group")
PROVISIONAL SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
JUNE 2010
HIGHLIGHTS
- Revenue up by 16%
- Gross profit up by 66%
- Operating profit up to R4.30 million compared to loss of R9.36 million in
previous comparative period
- Positive cash flow of R1.79 million with R6.40 million from operating
activities
Summarised consolidated statement of comprehensive income
Audited Audited
year year
ended ended
30 June 30 June
2010 2009
R`000 R`000
Revenue 76 294 65 819
Cost of sales (27 405) (36 419)
Gross profit 48 889 29 400
Other income 508 1 590
Operating expenses (45 092) (40 349)
Operating profit/(loss) 4 305 (9 359)
Investment income 232 359
Finance costs (1 123) (1 124)
Profit/(loss) before taxation 3 414 (10 124)
Taxation (888) 3 554
Profit/(loss) for the year 2 526 (6 570)
Other comprehensive income - -
Total comprehensive income/(loss) 2 526 (6 570)
Attributable to:
Equity holders of parent 2 537 (6 571)
Non-controlling interest (11) 1
Reconciliation of total comprehensive income to headline
earnings
Total comprehensive income 2 537 (6 571)
Adjustments for:
Profit on the sale on assets - (65)
Impairments of intangible assets 91 -
Headline earnings/(loss) attributable to ordinary 2 628 (6 636)
shareholders
Weighted average number of ordinary shares in issue 88 554 87 493
275 935
Earnings per ordinary share (cents) 2.86 (7.51)
Headline earnings per ordinary share (cents) 2.97 (7.58)
Diluted weighted average number of ordinary shares in 88 684 87 493
issue 020 935
Diluted earnings per ordinary share (cents) 2.86 (7.51)
Diluted headline earnings per ordinary share (cents) 2.96 (7.58)
Summarised consolidated statement of financial position
Audited
Audited year
year ended
ended 30 June
30 June 2009
2010 R`000
R`000
ASSETS
Non-current assets 17 538 20 803
Property, plant and equipment 3 206 4 513
Intangible assets 13 139 14 284
Deferred tax 1 020 1 908
Other financial assets 173 98
Current assets 25 465 27 239
Inventories 7 744 10 633
Trade and other receivables 11 215 11 127
Cash and cash equivalents 6 506 5 479
Total assets 43 003 48 042
EQUITY AND LIABILITIES
Equity 29 294 26 547
Equity attributable to owners of the parent 29 266 26 508
Non-controlling interest 28 39
Non-current liabilities 2 223 1 897
Interest-bearing liabilities 2 223 1 897
Current liabilities 11 486 19 598
Interest-bearing liabilities 3 357 4 830
Trade and other payables 8 104 14 725
Bank Overdraft 25 43
Total equity and liabilities 43 003 48 042
Number of ordinary shares in issue 88 554 88 554
275 275
Net asset value per ordinary share (cents) 33.08 29.98
Net tangible asset value per ordinary share (cents) 18.24 13.85
Summarised consolidated statement of changes in equity
Share Share Retain Non- Total
capita based ed control R`000
l payment earnin ling
R`000 reserve gs interes
R`000 R`000 t R`000
Balance at 1 July 2008 5 276 - 8 699 38 14 013
Changes in equity
Issue of shares 20 803 - - - 20 803
Net profit for the period - - (6 1 (6 570)
571)
Share issue cost (1 - - - (1 699)
699)
Total changes 19 - (6 1 12 534
104 571)
Balance at 30 June 2009 24 - 2 128 39 26 547
380
Changes in equity
Net profit for the period - - 2 537 (11) 2 526
Employees share option scheme: - 221 - - 221
Options issued
Total changes - 221 2 537 (11) 2 747
Balance at 30 June 2010 24 221 4 665 28 29 294
380
Summarised consolidated cash flow statement
Audited Audited
year year
ended ended
30 June 30 June
2010 2009
R`000 R`000
Cash flow from operating activities 6 401 (679)
Cash flow from investing activities (3 687) (9 456)
Cash flow from financing activities (927) 19 936
Net increase in cash and cash equivalents 1 787 9 801
Cash and cash equivalents at the beginning of the period 5 436 (4 365)
Effect of exchange rate movement on cash held (742) -
Cash and cash equivalents at the end of the period 6 481 5 436
Segmental analysis
Audited
Audited year
year ended
ended 30 June
30 June 2009
2010 R`000
R`000
Revenues
Commercial 31 091 32 235
Defence 30 476 17 521
Base Station 9 482 7 936
Other 5 245 8 126
Total 76 294 65 818
Other Revenues
Commercial 347 855
Defence 22 493
Base Station 15 145
Other 124 96
Total 508 1 589
Profit/(loss) after tax
Commercial (2 620) (9 219)
Defence 6 618 2 974
Base Station (375) 283
Other (1 097) (608)
Total 2 526 (6 570)
GROUP COMMENTARY
INTRODUCTION
Poynting Holdings Limited ("Poynting") designs, manufactures and sells antenna
and telecommunication products to the cellular, wireless data and defence
markets. The company operates as three divisions, namely Commercial, Defence and
Base Station Equipment division.
Poynting`s commercial products are used in cellular and 3G end-user equipment,
as well as wireless data networks employing WiFi, iBurst and WiMAX technologies.
During the 2010 financial year, the Commercial division also started providing
antenna installation services. This service offering is focused on the
installation of Poynting`s antennas for end-users of the large network service
providers.
The Defence division is focused on the electronic warfare market which comprises
monitoring, jamming and direction finding antennas. This division sells to
military system integrators and internationally via specialised distribution
partners. Close partnerships are created with customers and antennas are often
custom designed.
The Base Station Equipment division supplies transmission infrastructure
equipment mainly to cellular operators. This equipment includes base station
amplifiers and diplexers as well as some in-building signal splitters and
antennas for in-building repeaters and base stations.
RESULTS OVERVIEW
The highlights of the financial year end results include:
- Revenue of R76.29 million up 16% from R65.82 million;
- Gross profits of R48.89 million up 66% from R29.40 million;
- R13.66 million increase in operating profit from a loss of R9.36 million to
a profit of R4.30 million; and
- R6.40 million cash generated from operations.
Overall company revenue increased by 16% while company profit after tax of R2.53
million was achieved compared to a loss of R6.57 million in the 2009 financial
year. The main reason for improvement was due to excellent performance of the
Defence division. Revenues in the Commercial division stabilised and overheads
in this division were considerably reduced. Cascade Avenue Trading 90
(Proprietary) Limited trading as Poynting Direct increased sales by 41% to R11
million in 2010.
The Commercial division contributed 41% (2009: 49%) of turnover, the Defence
division 40% (2009: 27%) of turnover and Base Station Equipment 12% (2009: 12%)
and the other 7% (2009: 12%) during the 2010 financial year. Commercial revenue
declined by 4% while the Defence division saw a healthy increase of 74% in
revenue during the reporting period.
The Defence division produced healthy profits during the financial year whereas
the Commercial and Base Station divisions showed a small loss and profit
respectively.
Poynting has managed to raise an Industrial Development Corporation order
finance facility of R8 million for major projects. This, together with
profitable results and improved management of working capital, has improved the
company`s liquidity position.
BUSINESS COMBINATIONS
The intended purchase of a substantial or complete share in Poynting Europe has
faltered since we have not been able to achieve a deal structure which is
acceptable to both parties. Management still believes that European sales are
key to the growth of Poynting and is investigating various options.
SUBSEQUENT EVENTS
The board of directors is not aware of any material matters or circumstances
arising since the year end and up to the date of this report.
PROSPECTS
The Defence division should show continued revenue growth and profits in 2011.
This division currently has a stronger long-term order book than at the
corresponding time last year and has a healthy number of proposals and
opportunities in the pipeline. The Defence division had to increase overheads
and infrastructure to cope with the increased revenues, but is seeing an
increase in orders of "off-the-shelf" products, which makes it easier to scale
operations.
The Commercial division product sales have stabilised at lower levels than those
which were achieved in previous years. Our product range is still in demand and
we have not experienced any loss of existing customers. We have seen much lower
sales to such customers, however, especially in our export markets. The
Commercial division acquired new promising customers during the tough year and
is also involved with some exciting new products and projects. The division is
well positioned to benefit from an improving market.
The Base Station Equipment division has been absorbed into the products still
being sold by the Commercial division. We are not very optimistic about the
short-term sales of Base Station equipment and are experiencing low trading as
are competitors.
BASIS OF PREPARATION
The accounting policies applied in the preparation of these summarised
consolidated financial statements, which are based on reasonable judgments and
estimates, are in accordance with International Financial Reporting Standards
("IFRS") and are consistent with those applied in the annual financial
statements for the year ended 30 June 2009. These summarised financial
statements as set out in this report have been prepared in terms of IAS 34 -
Interim Financial Reporting, the Companies Act, 1973 (Act 61 of 1973), as
amended, and the Listings Requirements of JSE Limited.
AUDITOR`S REPORT
The provisional summarised consolidated financial statements for the year ended
30 June 2010 have been audited by the group`s auditors, KPMG Inc. Their
unqualified audit report is available for inspection at the company`s registered
office.
DIRECTORATE
The appointment of Jones Kalunga to the board on 7 June 2010 was the only change
to the board during the period of review. There were no post year-end changes to
the board prior to the date of this report.
Coen Bester* (Chairman), Andre Fourie (Chief Executive Officer), Juergen Dresel
(Managing Director) (German), Johan Ebersohn (Financial Director), Zuko
Kubukeli*, Richard Willis, Jones Kalunga (Sales Director)
*Independent Non-executives
Andre Fourie Johan Ebersohn
Chief Executive Officer Financial Director
29 September 2010
Johannesburg
Registered office
33 Thora Crescent, Wynberg 2090
(PO Box 76579, Wendywood 2144)
Designated adviser
Merchantec Capital
Company secretary
Merchantec Capital
Auditors
KPMG Inc.
Date: 29/09/2010 07:30:01 Supplied by www.sharenet.co.za
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