Sharenet Sites 
Sharenet Sites
LABAT AFRICA LIMITED - REVIEWED RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2004 AND CAUTIONARY ANNOUNCEMENT Labat Africa Limited REVIEWED RESULTS for the year ended 29 February 2004 (Incorporated in the Republic of South Africa) Share code: LAB ISIN: ZAE000018354 (Registration number 1986/001616/06) ("the company" or "the group") THE POWER TO DELIVER GROUP CONSOLIDATED INCOME STATEMENT Reviewed Audited 12 months 12 months
29-Feb-04 28-Feb-03 R"000 R"000 Revenue 175 651 244 930 Net operating income before depreciation and amortisation 7 019 38 162 Depreciation and amortisation (16 324) (8 507) Net operating (loss)/income before interest and taxation (9 305) 29 655 Interest paid (11 518) (11 680) Interest received 931 1 291 Net (loss)/income before taxation (19 892) 19 266 Taxation 6 896 11 902 Net (loss)/income after taxation (12 996) 31 168 Attributable to outside shareholders (650) (774) (Loss)/Income attributable to shareholders (13 646) 30 394 Shares in issue throughout the year ("000) 184 415 184 415 Basic (loss)/earnings per share (cents) (7,4) 16,5 Headline (loss)/earnings per share (cents) (7,1) 17,2 Reconciliation Basic earnings (13 646) 30 394 Write-off share premium - 1 142,0 Write-off goodwill 193,0 133,0 Loss on sale of investment 431,0 - Headline earnings (13 022) 31 669 CASH FLOW STATEMENT Year ended Year ended 29-Feb-04 28-Feb-03 Net flow from operating activities 3 302 6 799 Net outflow from investing activities (23 233) (41 161) Net flow from financing activities 2 728 17 305 Net decrease in cash (17 203) (17 057) Cash at beginning of year 22 555 39 612 Cash at end of year 5 352 22 555 GROUP CONSOLIDATED BALANCE SHEET Reviewed Audited 12 months 12 months
29-Feb-04 28-Feb-03 R"000 R"000 ASSETS Fixed assets 46 567 53 201 Investments 55 386 37 953 Deferred taxation 22 305 13 912 Non-current assets 124 258 105 066 Cash 5 352 22 555 Inventories 26 336 35 417 Instalment sale debtors 92 913 94 221 Trade and other receivables 22 588 21 947 Current assets 147 189 174 139 Total assets 271 447 279 205 EQUITY AND LIABILITIES Share capital and reserves 138 539 151 584 Outside shareholders 5 178 4 369 Total shareholders" funds 143 717 155 953 Long-term liabilities 18 680 23 502 Deferred taxation 11 600 12 117 Non-current liabilities 30 280 35 619 Bank overdraft 21 113 14 827 Instalment sale bank finance 36 109 35 411 Accounts payable 40 228 37 395 Current liabilities 97 450 87 633 Total equity and liabilities 271 447 279 205 Total net asset value per share (cents) 75 82 STATEMENT OF CHANGES IN EQUITY Share Share Distributable Capital and
capital premium reserves reserves R"000 R"000 R"000 R"000 Balance 28 February 2003 1 844 48 855 102 854 153 553 Prior year capitalisation of leased assets (1 969) (1 969) Subtotal 1 844 48 855 100 885 151 583 Loss for year (13 646) (13 646) Revaluation of investment 601 601 Balance at 29 February 2004 1 844 48 855 87 840 138 539 COMMENTARY AND REVIEW OF RESULTS The worst downturn in the history of the semi-conductor industry and the continued strength of the Rand has led to our first ever trading loss. Corrective action has been taken and there are positive signs of a turnaround in the semi-conductor industry. SAMES, our semi-conductor company, is again projecting to make a profit in the year ahead. In common with all exporting companies we have had to make radical changes to our business model to counteract the weakness of our trading currency (US$). Apart from the obvious cost-cutting exercises which all Dollar dependent businesses have had to do, we have developed new markets to increase volumes and have launched new products and downstream businesses which are initially focused on the local market. We have entered into negotiations to sell our retail business. This transaction will eliminate most of our debt and as a further debt reduction and capital raising exercise we are proposing a rights issue. These items are more fully detailed below. Each of our Technology businesses is projecting substantial profits for the year(s) ahead and we are confident that we will meet these projections. SAMES The past year has been extremely difficult for SAMES. In common with all exporters, SAMES has been badly affected by the continued appreciation of the Rand which has cost SAMES some R22 million over the past year and consequently has led to a period of substantial trading losses. Management have put plans in place to counteract the almost total dependence on exports and are confident that these initiatives and a projected increase in volumes will bring the business back to profitability in the short term. The two most immediate initiatives flowing from SAMES are: the manufacture of meters for the local, African and International markets. Together with local partners we have developed a new sophisticated meter which is aimed at the fast developing pre-paid electricity market. With built-in GSM communication capability linked to back office financial and management systems we believe that this meter will revolutionise the energy metering and electricity billing industry and will generate substantial future profits; and the extension of SAMES into the smart card business is a logical step. We have been building capacity in the card business for several years. The recent acquisition of Africard has given us a major step forward in the expansion of our plans. The launch of our partnerships with major international players in the bank, GSM and I.D. card arenas will be announced in June. LABAT RETAIL Although the Retail industry has performed strongly in the past year it has been decided that the continuing mismatch between Labat Retail and the rest of our businesses, which are technology-related, can no longer be sustained. A decision has therefore been made to sell this business and negotiations are currently taking place to this effect. This potential transaction will have the effect of eliminating the majority of our bank borrowings and interest charges. Further announcements in this regard will be made shortly. LABAT TRAFFIC SOLUTIONS The business has had a successful year as far as winning and rolling out new contracts. Collection levels have been an ongoing problem but various initiatives have been put in place to counteract the non-payment culture. Agreement has now been reached with most of our clients to allow payment of fines via electronic and other easy payment mechanisms thus removing the last impediment to raising collections significantly. Digital camera technology has advanced in the past two years and is now significantly more cost effective than film technology. Consequently we have decided to use digital technology in all new contracts. We expect that this new technology will bring significant operational and financial savings. Our 51% shareholding in Total Computer Services ("T.C.S.") has been very successful. We have agreed that in future Labat Traffic will only tender for the supply of camera solutions in conjunction with T.C.S. doing the back office to ensure adequate collection rates. IT/MC This division has gone through a restructuring and now comprises three distinct but synergistic businesses, Labat Software Solutions which is a sales channel organisation that utilises channel partners to sell the entire SSA Global suite of solutions to customers, Leading Edge Solutions which is a software development company servicing the supply chain management industry and Labat Management Consulting which provides project management services to Government agencies and to the private sector. The businesses have performed well and we are negotiating to obtain new products and services to expand the existing suite. RIGHTS ISSUE In order to further capitalise the business for substantial envisaged growth it is proposed that the company undertakes a rights issue. Discussions are taking place with our advisers on the best way of effecting this and a further notice to this effect will be issued shortly. PRIOR YEAR ADJUSTMENTS During the prior year an adjustment was made to reflect the capitalisation of certain assets held under finance leases. The adjustment was calculated based on our best estimate at the prior year-end. Subsequent finalisation of the affected amount has resulted in an adjustment to comparative figures. The effect on comparative figures has been to reduce attributable income by R1,1 million and R0,9 million in the prior years and to reduce fixed assets by R0,9 million, deferred tax assets by R1,3 million and to increase long-term liabilities by R0,2 million and deferred tax liabilities by R0,4 million. Basic earnings per share is reduced from 17,0 cents to 16,5 cents, and headline earnings per share from 17,7 cents to 17,2 cents. ACCOUNTING POLICIES The accounting policies applied are consistent with those applied in the previous year and are in compliance with the South African Statements of Generally Accepted Accounting Practice. REVIEWED RESULTS The results for the year ended 29 February 2004 have been reviewed by the company"s auditors Pierce and Gampel and their unqualified review opinion is available for inspection at the company"s registered office. CORPORATE GOVERNANCE The group subscribes to the values of good corporate governance at all levels and is committed to conduct business with discipline, integrity and social responsibility. DIVIDENDS It is company policy that no dividends will be declared as group surpluses will be retained to fund future growth. CAUTIONARY Labat shareholders are advised to exercise caution when dealing in their shares until further announcements regarding the disposal of Labat Retail and the rights issue have been made. For and on behalf of the board B G VAN ROOYEN Chairman 31 May 2004 Registered office: Transfer Secretaries: Island House Computershare Investor Services 2004 (Pty) Ltd Constantia Park Centre 70 Marshall Street Corner 14th Avenue and Johannesburg Hendrik Potgieter Road 2001 Weltevreden Park PO Box 61051 1709 Marshalltown, 2107 Sponsor Brait Sponsors REVIEWED results for the year ended 29 February 2004 Date: 31/05/2004 04:59:06 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
