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Pinnacle - Preliminary Audited Results for the year ended 30 June 2004
Pinnacle Technology Holdings Limited
Registration number 1986/000334/06
Share Code: PNC
ISIN: ZAE000022570
"Pinnacle" or "The Group" or "The Company"
www.pinnacle.co.za
Preliminary Audited Results for the year ended 30 June 2004
Comments
1) Accounting Policies
The Preliminary Audited Results have been prepared in accordance with South
African Statements of Generally Accepted Accounting Practice, the Listings
Requirements of the JSE Securities Exchange South Africa ("JSE") and the
South African Companies Act.
The Accounting Policies used in preparation of the Preliminary Audited
Results are consistent in all material respects with those applied in the
Annual Financial Statements for the year ended 30 June 2003.
2) Audit opinion
Grant Thornton has audited the financial information set out in this report
and their unqualified Audit Report is available for inspection at the
registered office of the Company.
3) Introduction
This report covers the consolidated results of Pinnacle Technology Holdings
Limited and its subsidiaries.
4) Financial Review
Operating Environment:
The group is divided into the following Operating Groups
a. Infrastructure and support
Exceptional growth in the Proline brand, the provision of additional
products and successful tenders to Government contributed to the
growth in revenue and profits for the year, despite the strengthening
of the Rand against the US Dollar.
b. Software and storage
During the year, Explix Technologies (Pty) Ltd, an associate of the
Group, acquired the Sun Microsystems distributorship, increased the
turnover of its Retail division and developed a focused merchandising
arm. Workgroup, as the company is known, successfully increased its
dealer and retail bases to contribute to the net profit of Group.
Further success was enjoyed by Intelligent Systems (Pty) Ltd, who,
despite the strengthening of the Rand, returned positive results
through growth in unit sales.
c. ICT Services
RentNet (Pty) Ltd continued to evolve into the short term technology
solution provider of choice, providing national and international
support to the following events; the 2003 Cricket World Cup, the World
Summit on Sustainable Development; the Africa Summit held in
Mozambique; the Cisco Networkers 2003 conference and more recently the
Independent Electoral Commission"s operations centre during the South
African elections.
d. Telecommunication
National and international communication systems on offer by e-Tel
Telecommunication Solutions (Pty) Ltd have matured during the latter
part of the year, these services will form the basis of the Company"s
growth, with additional services being rolled out to take advantage of
the recent relaxation of Telecommunication legislation in South
Africa.
5) Resolution of Contingent Liability
In the interim financial report dated 25 March 2004, the Directors reported
a contingent liability of R 30,5m, being a claim by the South African
Revenue Services against two of the Group"s subsidiaries. The Group has
materially addressed the requirements of the Revenue Services and an
outflow of material economic resources is no longer probable.
6) Future Prospects
Pinnacle, as a diversified ICT Group, is well positioned for further
growth. However, one needs to be cognisant of the vagaries of the present
economic climate - globally and locally - and the possible impact on our
business.
Suffice it to say, committed management, strict corporate governance,
continued aggressive marketing and focused concentration on growing the
business will certainly yield ongoing positive results.
7) Social Responsibility
Negotiations with Black Economic Empowerment ("BEE") entities are
continuing. The successful conclusion of these negotiations will result in
BEE entities becoming shareholders of Pinnacle. Shareholders will be
advised once discussions have reached an advanced stage.
8) Corporate Governance
The Group continues to apply all material aspects of the requirements of
the King Report on Corporate Governance for South Africa.
9) Dividend
A maiden dividend of 1.5 cents per share is proposed by the Directors,
subject to approval by the Shareholders at the Annual General Meeting to be
held at Pinnacle Park on Friday, 29th October 2004. On the basis that the
resolution is approved, the salient dates pertaining to the dividend are as
follows:
2004
Last day to trade cum div Friday, 12 November
Ordinary shares trade ex div Monday, 15 November
Record date Friday, 19 November
Payment date Monday, 22 November
Shares may not be rematerialised or dematerialised from Monday 15, November
to Friday, 19 November, both days inclusive.
For and on behalf of the Board
CD Biddlecombe
(Chairman)
AJ Fourie
(Chief Executive Officer)
Midrand
20 September 2004
Registered Office
Pinnacle Park
269 16th Road
Randjiespark
Midrand
Transfer Secretaries
Computershare Investor Services 2004 (Pty) Ltd
PO Box 61051
Marshalltown
2107
Auditors
Grant Thornton Chartered Accountants (SA)
137 Daisy Street
Cnr Grayston Drive
Sandown
2196
Sponsor
Grant Thornton Corporate Finance (Pty) Ltd
137 Daisy Street
Cnr Grayston Drive
Sandown
2196
GROUP INCOME STATEMENT Group
2004 2003
Audited Audited
R R
Revenue 497,202,551 417,818,272
Cost of Sales (413,289,361) (348,523,766)
Gross profit 83,913,190 69,294,506
Operating expenses (63,785,049) (51,930,723)
Operating profit 20,128,141 17,363,783
Share of net profit /(loss) from associate 2,134,090 (229,902)
Interest received 2,706,146 700,795
Interest paid (4,407,473) (5,051,792)
Net profit before taxation 20,560,904 12,782,884
Taxation (6,385,510) (4,306,545)
Net profit for the year 14,175,394 8,476,339
Net profit attributable to outside
shareholders (1,513,146) (1,509,526)
Attributable profit from ordinary
activities 12,662,248 6,966,813
Impairment of investments and loans (4,554,306)
Net profit for the year 12,662,248 2,412,507
Weighted average number of shares in issue 149,019,718 148,607,297
Earnings per share 8.5 1.6
Headline earnings per share 8.9 4.8
Reconciliation of headline earnings
Net profit for the period 12,662,248 2,412,507
Impairment of investments and loans 100,000 4,554,306
Amortisation of goodwill 431,117 142,758
Headline earnings 13,193,365 7,109,571
SEGMENTAL REPORT Group
2004
Revenue Net Assets Liabilities
profit
R R R R
Business Unit
Infrastructure and 472,995,955 12,397,357 132,281,254 (141,499,105)
support
Software and 16,720,947 1,441,394 11,985,909 (8,629,256)
storage
ICT services 5,240,628 (1,612,632) 2,440,816 (3,789,599)
Telecommunication 2,245,021 (2,291,567) 3,508,177 (6,106,554)
Holdings and 2,727,696 44,573,514 58,687,758
Properties
497,202,551 12,662,248 194,789,670 (101,336,756)
2003
Revenue Net Assets Liabilities
profit
R R R R
Business Unit
Infrastructure and 390,090,661 6,022,597 113,202,669 (123,361,350)
support
Software and 22,310,841 1,320,038 8,674,552 (3,708,906)
storage
ICT services 5,416,770 549,667 2,146,009 (588,390)
Telecommunication (222,176) 399,035 (231,199)
Holdings and (5,257,619) 40,517,976 46,555,445
Properties
417,818,272 2,412,507 164,940,241 (81,334,400)
BALANCE SHEET Group
2004 2003
Audited Audited
R R
ASSETS
Non-current assets 62,364,345 58,404,523
Property, plant and equipment 34,999,862 34,579,924
Intangible assets 3,706,905 1,562,561
Investments 11,968,943 6,909,853
Deferred taxation 11,688,635 15,352,185
Current assets 132,425,325 106,535,718
Inventories 47,932,172 49,049,335
Trade and other receivables 55,115,612 46,042,370
Cash and cash equivalents 29,377,541 11,444,013
Total Assets 194,789,670 164,940,241
EQUITY AND LIABILITIES
Capital and reserves 91,783,047 79,587,863
Share capital and premium 126,065,577 125,885,817
Non-distributable reserves 9,663,384 10,310,208
Accumulated loss (43,945,914) (56,608,162)
Outside shareholders" interest 1,669,867 4,017,978
Non-current liabilities
Interest bearing liabilities 8,911,980 10,992,426
Current liabilities 92,424,776 70,341,974
Trade and other payables 76,670,917 64,484,617
Short-term loans 5,325,003
Current portion of interest bearing liabilities 3,168,714 2,285,696
Warranty provisions 4,853,557 1,446,296
Taxation 2,406,585 2,125,365
Total Equity and liabilities 194,789,670 164,940,241
SUMMARISED GROUP CASH FLOW Group
2004 2003
Audited Audited
R R
Cash flows from operating activities 31,961,795 1,854,027
Cash flows from investing activities (11,025,231) 774,591
Cashflows from financing activities (3,003,036) 680,858
Net increase in cash and cash equivalents 17,933,528 3,309,476
Cash and cash equivalents at the beginning of
the year 11,444,013 8,134,537
Cash and cash equivalents at the end of the
year 29,377,541 11,444,013
STATEMENT OF CHANGES IN EQUITY
Group
Non-
Distri-
Share Share butable Accumulated
capital premium reserves loss Total
R R R R R
Balance at 1
July 2002 1,486,073 124,399,744 3,589,408 (59,020,669) 70,454,556
Net profit for
the year 2,412,507 2,412,507
Revaluation of
fixed property 6,720,800 6,720,800
Balance at 30
June 2003 1,486,073 124,399,744 10,310,208 (56,608,162) 79,587,863
Issue of shares 4,494 175,266 179,760
Net profit for
the year 12,662,248 12,662,248
Deferred
capital gains
tax on
revaluation of
fixed property (675,000) (675,000)
Movement in
foreign
currency
translation
reserve 28,176 28,176
Balance at 30
June 2004 1,490,567 124,575,010 9,663,384 (43,945,914) 91,783,047
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Date: 21/09/2004 10:38:26 AM Supplied by www.sharenet.co.za
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