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ABRIDGED RESULTS OF LABAT AFRICA LTD FOR YEAR ENDING 29 FEBRUARY 2000

Release Date: 05/05/2000 07:53
Code(s): LAB
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LABAT AFRICA LIMITED
(FORMERLY ACREM HOLDINGS LIMITED)
INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
REGISTRATION NUMBER 86/01616/06
("LABAT")
THE POWER TO DELIVER

AUDITED RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2000 * TURNOVER UP * NET INCOME UP * EARNINGS PER SHARE UP CONSOLIDATED INCOME STATEMENT
AUDITED AUDITED
12 MONTHS 11 MONTHS
29.02.2000 28.02.99
R'000 R'000
TURNOVER 112 083 32 071
GROSS INCOME 79 099 23 629
OPERATING EXPENSES (61 230) 21 774
NET INCOME BEFORE INTEREST AND TAXATION 17 869 1 855
NET INTEREST RECEIVED/(PAID) (4 324) (3 352)
NET INCOME/(LOSS) BEFORE TAXATION 13 545 (1 497)
TAXATION 925 289
NET INCOME AFTER TAXATION 14 470 (1 208)
ATTRIBUTABLE TO OUTSIDE SHAREHOLDERS 280 -
INCOME ATTRIBUTABLE TO SHAREHOLDERS 14 750 (1 208)
WEIGHTED AVERAGE NUMBER OF SHARES ('000) 140 757 19 388
BASIC EARNINGS/(LOSS) PER SHARE (CENTS) 10,5 (6,2)
FULLY DILUTED EARNING PER SHARE (CENTS) 10,3
HEADLINE EARNINGS/(LOSS) PER SHARE (CENTS) 10,5 (6,2) CONSOLIDATED BALANCE SHEETS
AUDITED AUDITED
AT AT
29.02.2000 28.02.99
R'000 R'000 EMPLOYMENT OF CAPITAL NON-CURRENT ASSETS
INVESTMENTS 17 622 -
FIXED ASSETS 20 758 1 182
NET CURRENT ASSETS 37 227 24 027 CURRENT ASSETS
CASH AND CASH EQUIVALENTS 5 495 10
INVENTORIES 16 828 3 250
TRADE AND OTHER RECEIVABLES 91 056 43 252
113 379 46 512 CURRENT LIABILITIES
BANK OVERDRAFT 39 995 6 355
SHORT-TERM DEBT 36 157 16 130
76 152 22 485
75 607 25 209 CAPITAL EMPLOYED
SHARE CAPITAL 1 829 776
SHARE PREMIUM 46 711 12 752
DISTRIBUTABLE RESERVES 16 995 2 245
SHAREHOLDERS' FUNDS 65 535 15 773
OUTSIDE SHAREHOLDERS (417) -
TOTAL SHAREHOLDERS' FUNDS 65 118 15 773
LONG-TERM LIABILITIES 2 364 320
DEFERRED TAXATION 8 125 9 116
75 607 25 209
NUMBER OF SHARES IN ISSUE ('000) 182 721 19 388
NET ASSET VALUE PER SHARE (CENTS) 36 81 GROUP PROFILE AND FOCUS
AFTER THE SUCCESSFUL REVERSE LISTING INTO ACREM HOLDINGS IN JUNE 1999, THE COMPANY HAS CONTINUED TO EXPAND ITS RANGE OF SERVICES IN ORDER TO BETTER OFFER SOLUTIONS TO ITS PUBLIC AND PRIVATE SECTOR CLIENTS. THE BUSINESS IS
DIVISIONALLY GROUPED INTO THREE MAIN FOCUS AREAS NAMELY TECHNOLOGY, PROFESSIONAL SERVICES, AND RETAIL SERVICES. COMMENTARY ON RESULTS
THE COMPANY HAS PERFORMED WELL IN DIFFICULT TIMES AND HAS GROWN ITS REVENUE AND PROFITS IN LINE WITH EXPECTATIONS AS SET OUT IN THE PRE-LISTING STATEMENT. ALL THREE DIVISIONS OF THE GROUP PERFORMED WELL AND MET EXPECTATIONS DESPITE DIFFICULT TRADING CONDITIONS. ALL THREE DIVISIONS ARE POISED FOR STRONG GROWTH.
WHEN COMPARING THE YEAR 29 FEBRUARY 2000 RESULTS WITH THE PRIOR PERIOD IT SHOULD BE REALISED THAT THE FIGURES FOR 2000 LARGELY REPRESENT A NINE MONTH PERIOD. COMPARING THE YEAR 2000 FIGURES WITH THE PRIOR PERIOD, SIGNIFICANT IMPROVEMENT HAS BEEN ACHIEVED, AS FOLLOWS : REVENUE HAS GROWN FROM R32 MILLION TO R112 MILLION
NET INCOME AFTER TAX (NIAT) HAS GROWN FROM A LOSS OF R1,2 MILLION TO A PROFIT OF R14,7 MILLION
EARNINGS PER SHARE HAS GROWN FROM A LOSS OF 6,2 CENTS TO EARNINGS OF 10,5 CENTS PER SHARE
THE GROUP HAS EXCEEDED ITS PRE-LISTING EARNINGS FORECAST OF 10,1 CENTS PER SHARE. RATIONALISATION AND CONSOLIDATION
SINCE LISTING, LABAT AFRICA HAS RE-STRUCTURED INTO THREE MAIN FOCUS AREAS. THE PROFESSIONAL SERVICES AND TECHNOLOGY DIVISIONS HAVE DEVOTED THEIR ENERGIES TO DEVELOPING SOLUTIONS FOR PUBLIC AND PRIVATE SECTOR CLIENTS. RAPID PROGRESS IS BEING MADE ON THIS FRONT THROUGH THE DEVELOPMENT OF INNOVATIVE TECHNOLOGY SOLUTIONS AND PROPRIETARY SOFTWARE - WHICH IS EXPECTED TO BE ROLLED OUT INTERNATIONALLY. DIVIDENDS
IN ACCORDANCE WITH THE COMPANY'S PRE-LISTING STATEMENT, NO DIVIDENDS WILL BE DECLARED UNTIL SUFFICIENT PROFITS HAVE BEEN GENERATED TO FACILITATE THE MOVE FROM VENTURE CAPITAL MARKET TO MAIN BOARD. FUTURE PROSPECTS TECHNOLOGY
DURING THE YEAR LABAT ACQUIRED THE SAMES (SOUTH AFRICAN MICRO-ELECTRONIC SYSTEMS) BUSINESS FROM THE IDC. SAMES IS SOUTH AFRICA'S SOLE MANUFACTURER OF INTEGRATED CIRCUITS FOR USE IN TELEPHONY AND POWER METERS, WITH 70% OF SALES GENERATED ABROAD. THERE IS VAST POTENTIAL TO INCREASE EXPORT SALES,
PARTICULARLY IN ASIA, AND REVENUE OF AT LEAST R70-MILLION IS PROJECTED FOR THE COMING YEAR. THE PLANT IS CURRENTLY OPERATING AT 35% UTILISATION AND ANY ADDITIONAL REVENUE WILL HAVE A MAJOR IMPACT ON THE BOTTOM LINE. SEVERAL INTERNATIONAL STRATEGIC ALLIANCES ARE BEING NEGOTIATED WITH A VIEW TO INCREASING UTILISATION AND PROFITABILITY.
IN RESPONSE TO DECLINING DEMAND FOR ERP SOFTWARE, ARMADA HAS REPOSITIONED ITSELF AS A SUPPLY CHAIN MANAGEMENT SOLUTIONS PROVIDER AND HAS EXTENDED ITS PRODUCT OFFERINGS WITH BEST-OF-INDUSTRY SOFTWARE SOLUTIONS. SINCE JANUARY 2000 LABAT'S CONFIRMED SALES PIPELINE HAS INCREASED REMARKABLY.
ANOTHER EXCITING DEVELOPMENT DURING THE YEAR WAS THE FORMATION OF LABAT TRAFFIC SOLUTIONS AS A JOINT VENTURE WITH TROJAN FINANCIAL SERVICES. LABAT TRAFFIC SOLUTIONS HAS DEVELOPED A RANGE OF CUTTING EDGE LICENCE PLATE RECOGNITION AND IMAGE ARCHIVING TECHNOLOGIES CAPABLE OF AUTOMATING THE OTHERWISE
LABOUR-INTENSIVE TASK OF MANUALLY PROCESSING TRAFFIC PHOTOGRAPHS. THIS TECHNOLOGY HAS BEEN IMPLEMENTED IN PRETORIA ON A JOINT VENTURE BASIS WITH PRETORIA METROPOLITAN COUNCIL AND NEGOTIATIONS ARE UNDERWAY TO EXTEND THE SYSTEM TO OTHER LOCAL COUNCILS AROUND THE COUNTRY. THE TECHNOLOGY HAS AROUSED CONSIDERABLE INTEREST AMONG LOCAL GOVERNMENTS AS A MEANS OF COMBATING TRAFFIC DELINQUENCY AND ACCELERATING - AT MUCH LOWER COST - THE LEGAL PROCESS FLOWING FROM TRAFFIC OFFENCES.
THE SPECIALISED SOLUTIONS BUSINESS UNIT ACQUIRED THE RIGHTS TO MARKET SEVERAL NICHE SOFTWARE PRODUCTS. THESE INCLUDE THE BUYTEL VOICE VERIFICATION SYSTEM, WHICH HAS PARTICULAR APPLICATIONS IN FINANCIAL SERVICES AND IN THE PREVENTION OF FRAUD IN THE PUBLIC SECTOR. A JOINT VENTURE WITH AN IRISH SOFTWARE HOUSE, MENTEC WAS FORMED TO PROVIDE SPECIALISED FINANCIAL SOFTWARE SOLUTIONS TO LOCAL GOVERNMENT PROFESSIONAL SERVICES
LABAT PROFESSIONAL SERVICES ORIGINATED AS LABAT ANDERSEN, THE SOUTH AFRICAN ARM OF THE US MANAGEMENT CONSULTANCY. THIS DIVISION SPECIALISES IN TRANSFORMATION AND PERFORMANCE MANAGEMENT AND IS DESIGNED TO BRIDGE THE GAP BETWEEN PUBLIC AND PRIVATE SECTORS BY BRINGING BEST PRACTICES TO THE PUBLIC SECTOR. LABAT PROFESSIONAL SERVICES, WITH OFFICES IN CAPE TOWN, DURBAN AND JOHANNESBURG, IS UNDOUBTEDLY THE LARGEST SINGLE REPOSITORY OF BLACK CONSULTANTS IN SOUTH AFRICA, AND THE DEMAND FOR ITS SERVICES - PARTICULARLY IN THE PUBLIC SECTOR - IS OVERWHELMING.
TO MEET THIS DEMAND A JOINT VENTURE IS BEING CONCLUDED WITH ONE OF THE WORLD'S LEADING MANAGEMENT CONSULTANCY FIRMS, CREATING A PROFESSIONAL SERVICES GROUP WITH A POWERFUL PRESENCE IN BOTH THE PUBLIC AND PRIVATE SECTORS, AND BUDGETED REVENUES OF R100-MILLION FOR THE FINANCIAL YEAR AHEAD. THIS JOINT VENTURE PROFESSIONAL SERVICES GROUP IS EXPECTED TO BECOME THE PREFERRED SUPPLIER FOR MAJOR CONSULTING NEEDS IN THE SOUTHERN AFRICA DEVELOPMENT CONFERENCE (SADC) REGION. RETAIL
LABAT RETAIL, COMPRISING THE ORIGINAL 11 ACME FURNITURE STORES, WAS AUGMENTED BY THE ACQUISITION OF DALES RETAIL STORES, WHICH DOUBLED REVENUES FROM THIS DIVISION. THE DIVISION PERFORMED WELL DESPITE HIGH INTEREST RATES AND JOB LOSSES IN THE MINES ON THE WEST RAND WHICH IS ACME'S TRADITIONAL TRADING AREA, THE BUSINESS IS NOW WELL POSITIONED FOR FURTHER GROWTH.
THE ACQUISITION OF DALES STORES DURING THE YEAR UNDER REVIEW PROVIDED LABAT RETAIL WITH THE CRITICAL MASS NEEDED TO SUSTAIN LONG-TERM PROFITABILITY AND GROWTH. THE INTEGRATION OF THE TWO CHAINS INTO A SINGLE COHESIVE BUSINESS IS PROCEEDING WELL AND WILL BE COMPLETED WITHIN THREE MONTHS. LABAT RETAIL HAS A TOTAL DEBTOR'S BOOK OF ABOUT R85 MILLION, AND SALES OF R70 MILLION ARE FORECAST FOR THE COMING FINANCIAL YEAR. THE GROUP SEES POTENTIAL TO DEVELOP THIS INTO SA'S FIRST BLACK-OWNED FURNITURE FRANCHISE BUSINESS. FOR AND ON BEHALF OF THE BOARD 4TH MAY 2000
J.J. MODISE B.G. VAN ROOYEN
CHAIRMAN GROUP CHIEF EXECUTIVE
REGISTERED OFFICE TRANSFER SECRETARIES
LABAT AFRICA LIMITED MERCANTILE REGISTRARS LIMITED
LABAT HOUSE, CONSTANTIA PARK CENTRE 11 DIAGONAL STREET
CNR 14TH AVENUE & HENDRIK POTGIETER ROAD JOHANNESBURG 2001
WELTEVREDEN PARK, 1709 PO BOX 1053
SUITE 248, PRIVATE BAG X09 JOHANNESBURG 2000 WELTEVREDEN PARK,1715 LABAT MEETS PRE-LISTING EARNINGS FORECAST MAY 5, 2000
BLACK OWNED AND OPERATED BUSINESS SOLUTIONS GROUP, LABAT AFRICA LIMITED, HAS SHRUGGED OFF NEGATIVE SENTIMENT TOWARD SMALL CAP AND BLACK-OWNED STOCKS BY REPORTING EARNINGS PER SHARE OF 10,5 CENTS. THE GROUP REVERSE LISTED INTO ACREM HOLDINGS IN JUNE LAST YEAR, WHICH HAD REPORTED A LOSS OF 6,2 CENTS FOR THE PREVIOUS PERIOD.
ANNOUNCING THE GROUP'S MAIDEN FINANCIAL RESULTS TODAY, CEO BRIAN VAN ROOYEN, SAID INCOME AFTER TAX OF R14,75 MILLION FROM A LOSS OF R1,2 MILLION ARE A MAJOR ACHIEVEMENT, WHILE OPERATING REVENUE GREW TO R112 MILLION FROM R32 MILLION. "WE ARE PLEASED THAT WE HAVE MET OUR FORECAST AS SET OUT IN OUR PRE-LISTING STATEMENT. THE RESULTS ATTAINED IN THE FACE OF DIFFICULT MARKET CONDITIONS WHICH WERE EXACERBATED BY Y2K FEARS, NEGATIVE SENTIMENT TOWARDS VENTURE CAPITAL SECTOR STOCKS, AND WORST OF ALL, THE COLLAPSE OF BLACK ECONOMIC EMPOWERMENT. "IN A TIME WHEN THE STOCK MARKET HAS BEEN SHAKY AND COMPANIES HAVE REGULARLY ISSUED PROFIT WARNINGS, WE BELIEVE WE HAVE MANAGED TO EXTRACT MAXIMUM VALUE FOR SHAREHOLDERS. THIS TREND WILL CONTINUE INTO THE FUTURE".
CHAIRMAN JOE MODISE SAYS LABAT HAS POSITIONED ITSELF AS A KEY PROVIDER OF TECHNOLOGY AND PROFESSIONAL SERVICES TO THE PUBLIC SECTOR. THE GROUP IS AN EXAMPLE OF GENUINE BLACK EMPOWERMENT - WITH BLACKS TAKING BOTH SHAREHOLDER AND OPERATIONAL CONTROL.
THIS, AND THE DEPTH OF PROFESSIONAL CAPACITY WITHIN THE GROUP, LEFT THE GROUP IN A STRONG POSITION TO PARTICIPATE IN FORTHCOMING PRIVATISATION AND OUTSOURCING OPPORTUNITIES.
DURING THE YEAR LABAT ACQUIRED THE SAMES (SA MICRO-ENTERPRISE SYSTEMS) BUSINESS FROM THE INDUSTRIAL DEVELOPMENT CORPORATION; AND ARMADA, A SUPPLY CHAIN MANAGEMENT SOLUTIONS PROVIDER. BOTH FALL UNDER THE LABAT TECHNOLOGY DIVISION. SPECIAL SOLUTIONS WAS FORMED AS A SEPARATE UNIT UNDER LABAT TECHNOLOGY TO PROVIDE SOFTWARE SOLUTIONS, PRIMARILY TO THE PUBLIC SECTOR.
SAMES IS SA'S SOLE MANUFACTURER OF INTEGRATED CIRCUITS FOR USE IN TELEPHONY AND POWER METERS, WITH 70% OF SALES GENERATED ABROAD. VAN ROOYEN SAYS THERE IS VAST POTENTIAL TO INCREASE EXPORT SALES, PARTICULARLY IN ASIA, AND REVENUE OF AT LEAST R70-MILLION IS PROJECTED FOR THE COMING YEAR. THE PLANT IS CURRENTLY OPERATING AT 35% CAPACITY UTILISATION AND ANY ADDITIONAL REVENUE WILL HAVE A MAJOR IMPACT ON THE BOTTOM LINE. SEVERAL INTERNATIONAL STRATEGIC ALLIANCES ARE BEING NEGOTIATED WITH A VIEW TO INCREASING CAPACITY UTILISATION AND PROFITABILITY.
"WE ARE CURRENTLY IN NEGOTIATIONS WITH A LEADING INTERNATIONAL MANUFACTURER OF IDENTITY SMARTCARDS TO GET INVOLVED IN THE PRODUCTION OF SUCH DEVICES IN SOUTH AFRICA," SAYS VAN ROOYEN.
IN RESPONSE TO DECLINING DEMAND FOR ERP SOFTWARE, ARMADA HAS REPOSITIONED ITSELF AS A SUPPLY CHAIN MANAGEMENT SOLUTIONS PROVIDER AND HAS EXTENDED ITS PRODUCT OFFERINGS WITH BEST-OF-INDUSTRY SOFTWARE SOLUTIONS. SINCE JANUARY 2000 LABAT'S CONFIRMED SALES PIPELINE HAS INCREASED REMARKABLY, SAYS VAN ROOYEN. ANOTHER EXCITING DEVELOPMENT DURING THE YEAR WAS THE FORMATION OF LABAT TRAFFIC SOLUTIONS AS A JOINT VENTURE WITH TROJAN FINANCIAL SERVICES. LABAT TRAFFIC SOLUTIONS HAS DEVELOPED A RANGE OF CUTTING EDGE LICENCE PLATE RECOGNITION AND IMAGE ARCHIVING TECHNOLOGIES CAPABLE OF AUTOMATING THE OTHERWISE
LABOUR-INTENSIVE TASK OF MANUALLY PROCESSING TRAFFIC PHOTOGRAPHS.
THE SUCCESSFUL IMPLEMENTATION OF THE STARTRAP TRAFFIC FINE PROCESSING SYSTEM FOR THE PRETORIA MUNICIPALITY IS ANOTHER EXAMPLE OF THE GROUP'S COMMITMENT TO DEVELOPING INNOVATIVE SOLUTIONS FOR THE PUBLIC SECTOR. THE STARTRAP SYSTEM IS BEING IMPLEMENTED ON A PUBLIC-PRIVATE PARTNERSHIP BASIS.
THE TECHNOLOGY HAS AROUSED CONSIDERABLE INTEREST AMONG LOCAL GOVERNMENTS AS A MEANS OF COMBATING TRAFFIC DELINQUENCY AND ACCELERATING - AT MUCH LOWER COST - THE LEGAL PROCESS FLOWING FROM TRAFFIC OFFENCES.
LABAT HAS RECENTLY ACQUIRED A MAJORITY INTEREST IN COMPUTER NETWORKS, A SUPPLIER OF COMPUTER HARDWARE, SOFTWARE AND CONSULTING SERVICES WITH A STRONG FOOTHOLD IN THE CAPE LOCAL GOVERNMENT MARKET.
THE SPECIALISED SOLUTIONS BUSINESS UNIT ACQUIRED THE RIGHTS TO MARKET SEVERAL NICHE SOFTWARE PRODUCTS.
BUYTEL, THE DIVISION'S VOICE VERIFICATION AND VOICE AUTHENTICATION SYSTEM, IS BEING ROLLED OUT TO THE PUBLIC SECTOR THIS YEAR TO DEAL WITH "GHOST"EMPLOYEES, WHILE A LEADING FINANCIAL INSTITUTION HAS IMPLEMENTED THE SYSTEM AS A PILOT SCHEME.
A JOINT VENTURE WITH AN IRISH SOFTWARE HOUSE, MENTEC WAS FORMED TO PROVIDE SPECIALISED FINANCIAL SERVICES SOFTWARE SOLUTIONS TO LOCAL GOVERNMENT. VAN ROOYEN SAID THE FACT THAT PROFESSIONAL SERVICES ACHIEVED ITS TARGETS IN DIFFICULT CIRCUMSTANCES INDICATED THAT TRANSFORMATION AND RESTRUCTURING CONSULTING SERVICES TO GOVERNMENT DEPARTMENTS AND PARASTATALS, HAD BEEN THE KEY TO LABAT'S GROWTH.
HE ALSO INDICATED THAT THE GROUP WOULD SOON BE ANNOUNCING A DEAL WITH ONE OF THE COUNTRY'S LEADING CONSULTING FIRMS, WHICH WOULD BOLSTER LABAT'S ACCESS TO RESOURCES.
LABAT RETAIL, COMPRISING THE ORIGINAL 11 ACME FURNITURE STORES, WAS AUGMENTED BY THE ACQUISITION OF DALES RETAIL STORES, WHICH DOUBLED REVENUES FROM THIS DIVISION. THE DIVISION PERFORMED WELL DESPITE HIGH INTEREST RATES AND JOB LOSSES IN THE MINES ON THE WEST RAND, WHICH IS ACME'S TRADITIONAL TRADING AREA. THE ACQUISITION OF DALES STORES DURING THE YEAR UNDER REVIEW PROVIDED LABAT RETAIL WITH THE CRITICAL MASS NEEDED TO SUSTAIN LONG-TERM PROFITABILITY AND GROWTH. THE INTEGRATION OF THE TWO CHAINS INTO A SINGLE COHESIVE BUSINESS IS PROCEEDING WELL AND WILL BE COMPLETED WITHIN THREE MONTHS.
LABAT RETAIL HAS A TOTAL DEBTORS BOOK OF ABOUT R85-MILLION, AND SALES OF R70-MILLION ARE FORECAST FOR THE COMING FINANCIAL YEAR. VAN ROOYEN SAYS THE GROUP SEES POTENTIAL BY RE-POSITIONING TO DEVELOP THIS INTO SA'S FIRST BLACK-OWNED FURNITURE FRANCHISE BUSINESS.
"WE HAVE NOW CREATED SUBSTANTIAL CAPACITY IN OUR THREE MAIN BUSINESS AREAS AND AFTER A PERIOD OF CONSOLIDATION AND BEDDING DOWN WE WILL AGGRESSIVELY PURSUE SOME OF THE OPPORTUNITIES WHICH WE HAVE IDENTIFIED IN OUTSOURCING AND IN PUBLIC SECTOR COMMERCIALISATION," CONCLUDES VAN ROOYEN. ENDS ISSUED ON BEHALF OF : BY :
LABAT AFRICA FASEDEMI NEWMAN LEO BURNETT
2ND FLOOR, PARKVIEW HOUSE LEO BURNETT HOUSE
CONSTANTIA PARK CENTRE 3 SIMBA ROAD
CNR 14TH AVENUE & SUNNINGHILL HENDRIK POTGIETER ROAD SANDTON WELTEVREDEN PARK
CONTACT : MR BRIAN VAN ROOYEN CONTACT : MS LOUISE LASAROW
TEL : 011 675 1015 TEL : 011 235 4171
FAX : 011 675 1020 FAX : 011 235 4301
CELL : 082 441 2179 CELL: 083 459 0233 DATE: MAY 4, 2000

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