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IFC - IFCA Technologies Limited - Reviewed results for the six months

Release Date: 14/10/2011 17:30
Code(s): IFC
Wrap Text

IFC - IFCA Technologies Limited - Reviewed results for the six months ended 30 June 2011 IFCA TECHNOLOGIES LIMITED Incorporated in the Republic of South Africa (Registration number 2006/030759/06) Share code: IFC ISIN: ZAE000088555 ("IFCA" or "the Company") REVIEWED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2011 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION Reviewed Unaudited Audited 30 Jun 30 Jun 31 Dec 2011 2010 2010
R`000 R`000 R`000 Non-current assets 100 11 170 2 783 Property, plant and equipment - 336 162 Intangible assets - 10 834 2 523 Deferred tax 100 - 98 Current assets 189 793 223 Current Tax Receivables - 281 - Trade and other receivables 163 8 146 Cash and Cash Equivalents 26 504 77 Total Assets 289 11 963 3 006 Equity (4 290) 7 616 (963) Share Capital 47 971 43 186 43 186 Retained Loss (52 261) (35 570) (44 149) Non-current liabilities - - 14 Deferred tax - - 14
Current Liabilities 4 579 4 347 3 955 Current Tax Payable 92 112 89 Trade and other payables 4 143 3 728 3 556 Deferred income 344 507 310 Total Equity and Liabilities 289 11 963 3 006 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Reviewed Unaudited Audited 12 six months six months months 30 Jun 30 Jun 31 Dec 2011 2010 2010
R`000 R`000 R`000 Revenue 792 1 288 2 110 Cost of Sales (767) (248) (465) Gross profit 25 1 040 1 645 Other income - - 466 Operating expenses (5 587) (2 240) (3 665) Operating loss (5 562) (1 200) (1 554) Impairment of intangible assets (2 523) - (8 311) Profit/(Loss) on disposal of (43) 1 - non-current assets Investment revenue - 2 3 Finance costs - - (32) Loss before taxation (8 128) (1 197) (9 894) Taxation 16 - (163) Loss attributable to ordinary (8 112) (1 197) (10 057) equity shareholders (Loss)/Earnings per share information Weighted average shares in 166 356 100 663 107 890 issue (000`s) Attributable (loss)/earnings (4.88) (1.19) (9.32) per ordinary share (cents) Headline (loss)/earnings per (3.33) (1.19) (1.62) share (cents) Reconciliation of earnings Basic loss (8 112) (1 197) (10 057) - Loss / (Profit)on disposal 43 (1) - of non-current assets - Impairment losses 2 523 - 8 311 Headline loss for the period (5 546) (1 198) (1 746) CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Stated Retained Total Capital Loss R`000
R`000 R`000 Reviewed Balance at 31 December 2010 43 186 (44 149) (963) Total comprehensive loss for the - (8 112) (8 112) six month period Shares issued 4 785 - 4 785 Balance at 30 June 2011 47 971 (52 261) (4 290)
Unaudited Balance at 31 December 2009 42 586 (34 373) 8 213 Total comprehensive loss for the - (1 197) (1 197) six month period Shares issued 600 - 600 Balance at 30 June 2010 43 186 (35 570) 7 616 Audited Balance at 31 December 2009 as 42 586 (34 373) 8 213 previously reported Prior year adjustments - 281 281 Balance at 31 December 2009 as 42 586 (34 092) 8 494 restated Total comprehensive loss for the - (10 057) (10 057) period Shares issued 600 - 600 Balance at 31 December 2010 43 186 (44 149) (963) CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Reviewed Unaudited Audited 30 Jun 30 Jun 31 Dec
2011 2010 2010 R`000 R`000 R`000 Net cash (outflow)/inflow from (4 936) (380) (946) operating activities Net cash inflow/(outflow) from 100 - 139 investing activities Net cash inflow/(outflow) from 4 785 600 600 financing activities Net (decrease)/increase in cash (51) 220 (207) and cash equivalents Cash and cash equivalents at 77 284 284 beginning of period Cash and cash equivalents at 26 504 77 end of period COMMENTARY Basis of preparation The board of directors of IFCA ("Board") presents the Company`s results for the six month period ended 30 June 2011, which have been prepared in accordance with IAS 34 - Interim Financial Reporting, the Companies Act, 2008 (Act 71 of 2008) and the Listings Requirements of the JSE Limited. The principal accounting policies adopted for purposes of this report comply, and have been consistently applied in all material respects, with International Financial Reporting Standards ("IFRS"). The same accounting policies and methods of computation have been followed as compared to the prior year. Review opinion The results for the six month period ended 30 June 2011 have been reviewed by IFCA`s auditors, Nolands Inc and their unmodified review report is available for inspection at the office of the Company, the address of which is detailed below. Industry and Business Overview IFCA has been an enterprise-wide integrated business solutions provider providing industry specific software solutions for various business segments. The Company is however in the process of changing its strategy and shareholders are referred to future prospects and subsequent events below for further details. Financial Overview The results for the six months ended 30 June 2011 reflect an attributable loss and headline loss of 4.88 and 3.33 cents per share respectively (30 June 2010: loss of 1.19 and 1.19 cents per share respectively), based on 166 356 265 weighted average shares in issue (2010: 100 662 983). The increase in the loss is as a result of the impairment of the intangible assets and the increase in the operating expenses as explained below. Revenue has decreased substantially due to a transition phase during which the revenue model is being restructured. The operating expenses have also increased substantially, primarily as a result of the corporate actions required to restructure the business model as a direct result of the change in the company direction as explained in more detail under future prospects and subsequent events. It should be noted that a significant portion of these expenses are non-recurring in relation to future group operational expenses. In view of the intended disposal of the Company`s subsidiary, the value of the intangible asset has been impaired in its entirety. The results of the Company`s subsidiary that are included above have caused the group`s liabilities to exceed its assets as at the reporting date. The group`s assets will exceed its liabilities with the intended disposal of this subsidiary as discussed in more details in subsequent events. Segmental analysis The Company does not operate in distinct operating segments and accordingly, no segmental analysis has been reported. Dividends No dividends were paid or declared for the six months ended 30 June 2011 and none are recommended at this stage. Acquisitions and disposals The Company did not enter into any acquisitions or disposals during the period under review. The shareholders are referred to future prospects and subsequent events below for details on acquisitions and disposals that are currently being negotiated. Share capital A total of 64 928 129 shares were issued for cash amounting to R4 785 211 during the period under review. The issue of shares for cash was under the Company`s general authority which authority was resolved at the Company`s annual general meeting held on 2 August 2010. These proceeds were utilised to settle creditors, operating costs, corporate action fees and to fund future growth opportunities. Litigation There is no litigation pending against the Company. Director changes The following changes in directors have taken place during the six months under review and to the date of this announcement: Directors Appointed Resigned A M Barnard 12 July 2011 C W Clarke 26 January 2011 N P Doyle* 30 June 2011 M Gahagan 30 June 2011 I J Jones 1 February 2011 T Mokgosi-Mwantembe 26 January 2011 K B Motshabi 5 July 2011 M W Palmer 14 January 2011 M Shaw 11 May 2011 Z J van Niekerk 14 January 2011** K K Yong 5 April 2011 *Irish **On 15 July 2011, Z J van Niekerk was appointed as an executive director and the Chief Executive Officer of the Company. Future Prospects As previously announced, IFCA is in the process of changing its investment strategy. The Company intends to be a business incubator targeting businesses in high-growth sectors such as mining and resources, property, infrastructure, telecommunications, agriculture, energy and media & marketing throughout South Africa and Africa. IFCA intends to invest in companies with value creation opportunities and will provide financial services and treasury functions to facilitate the funding, re- engineering and development of these investee companies in order to facilitate their growth path. IFCA has successfully negotiated and signed a USD100 million Special Private Placement Agreement ("SPP Agreement") with Singapore based investment fund Equity Partners Fund SPC ("Equity Partners Fund"). Shareholders are referred to the SENS announcement issued on 17 February 2011 where more details of this SPP Agreement are provided. The issue of shares pursuant to the SPP Agreement will be subject to, inter alia, the JSE Listings Requirements. All conditions and terms of the SPP Agreement will be contained in the circular to be distributed to IFCA shareholders in due course. The funds drawn down from this agreement will be utilised to fund future acquisitions on a deal by deal basis, combined with other sources of funding, ensuring the optimal capital structure for the group. With effect from 7 July 2011, a USD2 million fee is payable to Equity Partners Fund in four equal installments. Subsequent events In line with the future prospects set out above and as announced on SENS on 5 August 2011, the Company has entered into negotiations regarding, inter alia, the disposal of its subsidiary, IFCA sWare (Proprietary) Limited ("IFCA sWare Disposal"), the acquisition of a 100% interest in the issued share capital of Third Wave (Proprietary) Limited which in turn will acquire a 57,5% interest in the issued share capital of Johannesburg Expo Centre 2002 (Proprietary)Limited ("Third Wave Acquisition"), and the acquisition of a 45% interest in the issued share capital of Out & About Marketing and Media (Proprietary) Limited ("OAMM Acquisition"), a company duly incorporated and registered in accordance with the laws of Australia. A circular containing full detail of the proposed transactions will be distributed to IFCA shareholders in due course. By order of the Board Z J van Niekerk Chief Executive Officer 14 October 2011 Johannesburg Directors Z J van Niekerk (Chief Executive Officer), C W Clarke* (Chairman), M W Palmer*, N P Doyle*, K B Motshabi* (*Independent Non-executive) Company Secretary and Registered Office Merchantec (Proprietary) Limited (Registration number 2008/027362/07) 2nd Floor, North Block, Hyde Park Office Tower, Corner 6th Road and Jan Smuts Avenue, Hyde Park, Johannesburg, 2196 PO Box 41480, Craighall, 2024 Transfer Office Link Market Services(Proprietary) Limited Designated Adviser Merchantec Capital Date: 14/10/2011 17:30:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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