Wrap Text
RGT - RGT Smart Market Intelligence Limited - Unaudited group results for the
six month period ended 31 August 2011
RGT SMART MARKET INTELLIGENCE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2008/014367/06)
Share Code: RGT ISIN: ZAE000143715
("RGT SMART" or "the company")
UNAUDITED GROUP RESULTS FOR THE SIX MONTH PERIOD ENDED 31 AUGUST 2011
Financial Performance Highlights
Highlights for the period 28 February 2011 to August 2011 are as follows:
August 2011 August 2010
Revenue 15 972 549 12 984 479
Gross profit 12 512 865 9 336 279
Total costs (13 386 185) (10 612 179)
Profit Before Tax 2 751 671 2 412 078
Profit after Tax 1 901 719 1 809 123
Headline Earnings 1 901 719 1 778 133
Headline Earnings per 0.3803 0.4553
Share (HEPS)
Overview:
* Revenue is up by 23%
* Total costs are up by 26%
* Headline earnings up by 6.5%
* The group reflected a positive cash flow of R9.9m in the period under
review.
HEPS down by 16.5%
An increase in the number of weighted average shares in issue up by 21.9%
The board presents its unaudited results for the six months ended 31 August 2011
below, together with audited results for the year ended 28 February 2011 and
unaudited results for the six months ended 31 August 2010.
Condensed consolidated statement of financial position
Figures in Rand Unaudited Audited Unaudited
six months 28 six months
ended 31 February ended 31
August 2011 2011 August 2010
R`000 R`000 R`000
Assets
NonCurrent Assets 26 226 24 021 23 603
Property, plant and 2 564 748 502
equipment
Goodwill 17 449 17 449 17 449
Intangible assets 5 682 5 586 5 204
Deferred tax 531 238 448
Current Assets 12 973 4 352 4 094
Trade and other 2 979 2 931 2 107
receivables
Current tax asset - 1 -
Cash and cash 9 994 1 420 1 987
equivalents
Total Assets 39 199 28 373 27 697
Equity and Liabilities
Equity
Share capital 13 271 4 024 4 024
Retained earnings 16 733 14 080 12 582
Total Equity 30 004 18 104 16 606
Liabilities
Non-Current Liabilities
Loans from shareholders 879 1 365 1 913
Deferred tax 1 546 1 421 1 237
Current Liabilities
Loans from shareholders 1 035 979 1 174
Other financial - 2 470 2 695
liabilities
Current tax payable 156 1 629
Operating lease 315 31 19
liability
Trade and other 2 729 2 154 1 364
payables
Revenue received in 1 189 1 336 1 140
advance
Provisions 1 346 512 920
Total Liabilities 9 195 10 269 11 091
Total Equity and 39 199 28 373 27 697
Liabilities
Condensed consolidated statement of comprehensive income
Figures in Rand Unaudited Audited Unaudited
six months 28 six months
ended 31 February ended 31
August 2011 2011 August 2010
R`000 R`000 R`000
Revenue 15 973 27 704 12 984
Cost of sales (3 460) (7 195) (3 648)
Gross profit 12 513 20 509 9 336
Other income 16 61 -
Operating expenses (9 804) (15 392) (6 654)
Operating profit before 2 725 5 178 2 682
interest
Investment revenue 149 57 40
Finance costs (122) (480) (310)
Profit before taxation 2 752 4 755 2 412
Taxation (850) (1 449) (603)
Profit after taxation 1 902 3 306 1 809
1 902 3 306 1 809
Profit for the period
Attributable to:
Equity holders of the 1 902 3 306 1 809
parent
Minority interest - - -
Profit for the period 1 902 3 306 1 809
Headline earnings 1 902 3 306 1 809
reconciliation (R`000)
Profit attributable to
owners of the parent
Adjusted for:
(Profit)/Loss on - (31) (31)
disposal of property,
plant and equipment
Headline earnings for 1 902 3 275 1 778
the period
Per share information
Headline earnings per 0.38 0.83 0.46
share (cents)
Diluted headline earnings 0.38 0.72 0.46
per share (cents)
Basic earnings per share 0.38 0.84 0.46
(cents per share)
Diluted earnings per share 0.38 0.72 0.46
(cents per share)
Weighted average number of 500 000 395 268 390 518
shares in issue (`000)
Condensed consolidated statement of cash flows
Figures in Rand Unaudited Audited Unaudited
six months 28 six months
ended 31 February ended 31
August 2011 2011 August 2010
R`000 R`000 R`000
Cash generated from 3 857 3 699 2 747
operating activities
Cash used in investing (2 381) (2 031) (1 046)
activities
Cash generated 7 098 (195) 339
by/(used in) financing
activities
Total cash movement 8 574 1 473 2 040
for the period
Cash at the beginning 1 420 (53) (53)
of the year
Total cash at end of 9 994 1 420 1 987
the period
Condensed consolidated statement of changes in equity
Figures Equity Share Share Total Retained Total
in Rand reserve capita premium share Earnings Equity
l capital
(37 3 808 35 480 1 789 10 773 12 563
Balance 499)
at 01
March
2010
Changes
for the
period:
Profit - - - - 1 809 1 809
for the
period
Issue - 570 5 130 5 700 - 5 700
of
shares
Transfe - - (438) (438) - (438)
r share
issue
costs
to
share
premium
Treasur - (378) (2 649) (3 027) - (3 027)
y
shares
held by
subsidi
ary
Total - 192 2 043 2 235 1 809 4 044
changes
Balance (37 4 000 37 523 4 024 12 582 16 607
at 31 499)
August
2010
Profit - - - - 1 497 1 497
for the
period
Total - - - - 1 497 1 497
changes
Balance (37 4 000 37 523 4 024 14 080 18 104
at 01 499)
March
2011
Changes
for the
period:
Profit - - - - 1 902 1 902
for the
period
Issue - 622 5 598 6 220 - 6 220
of
shares
Treasur - 378 2 649 3 027 751 3 778
y
shares
sold
Total - 1 000 8 247 9 247 2 653 11 900
changes
Balance (37 5 000 45 770 13 271 16 733 30 003
at 31 499)
August
2011
BASIS OF PREPARATION
The board of directors is pleased to present the company`s unaudited interim
results for the period ended 31 August 2011. The accounting policies adopted for
purposes of this report comply, and have been consistently applied in all
material respects with International Financial Reporting Standards ("IFRS") and
the abridged financial statements have been prepared in accordance with the
requirements of IAS 34 (Interim Financial Reporting).
The same accounting policies and methods of computation have been followed as
compared to the prior year. The results have not been audited or reviewed.
INDUSTRY AND BUSINESS OVERVIEW
RGT SMART is an investment holding company engaged in market intelligence and
data analysis in all aspects and related activities and operates in South
Africa. RGT SMART has two wholly-owned subsidiaries namely; KA SMART, which
focuses on the Group`s management consultancy portion of the business and RGT
which focuses on the Group`s statistical information for the automotive
industry.
During the period under review, the two subsidiary companies were moved into one
operational unit, which set-up and unity is working well.
The Group, together with Lightstone (Proprietary) Limited ("Lightstone"), Signio
(Proprietary) Limited and Conclude (Proprietary) Limited have established a
joint venture, CarStats (Proprietary) Limited to develop a data-driven,
statistically robust vehicle valuation and risk management platform for the
South African automotive industry. The platform will offer a range of on-line
and batch-based services, and will become a significant reference for data
relating to motor vehicles, for dealers, Insurance Companies, Banks, Finance
Companies, and the General Public.
FINANCIAL RESULTS
While market conditions in these first six months made for a challenging trading
situation the group has held its own and as the Motor Industry emerges
cautiously from recessionary times the Company is optimistic about the Group`s
future prospects.
Income Statement
Group turnover for the period was R15 942k compared to R 12 984k in 2010, an
increase of 23%. Total expenditure increased by 26% when compared to 2010. This
related mainly to increased staffing costs with a focus on sales and new product
development. Profit after tax increased to R1 901k from R1 809k in the prior
period.
Headline earnings increased to R1 901k in 2011 compared with R1 778k in 2010.
This is an increase in HEPS of 6.5%.
Cost of sales decreased from being 26.7% of turnover in 2010 to 21.7% in 2011
leading to improved gross profit for the Group.
Cash flow and Liquidity
The cash received from the share issue and sale of treasury shares in relation
to the change in control to Halls has significantly improved the Group`s current
ratio.
The Group reflected a positive cash flow of R9.9 million compared with R2
million in 2010.
Balance Sheet
The balance sheet remains sound. Typical of many companies in the services
sector, the largest assets on the balance sheet are intangible.
Share capital was increased by the shares issued in terms of the change in
control to Halls during the period. The proceeds from the change in control
cash injection were used to repay certain debts.
SEGMENTAL REPORTING
The Group has adopted IFRS 8 Operating Segments as its segmental reporting
standard which requires an entity to report financial and descriptive
information about its reportable segments, which are operating segments or the
aggregation of operating segments that meet specified criteria. Operating
segments are components of an entity in respect of which separate financial
information is available is evaluated regularly by management. For management
purposes, the Group is organised into the following segments:
For the six month Market Statistics Total for
period ended 31 research reportable
August 2011 segments
External revenue 7 392 8 581 15 973
Internal revenue - 43 43
Total revenue 7 392 8 624 16 016
Cost of sales (1 929) (1 574) (3 503)
Personnel costs (2 005) (2 318) (4 323)
Lease rentals (329) (447) (776)
Other costs (1 863) (1 918) (3 781)
EBITDA 1 266 2 367 3 633
Depreciation and (269) (170) (439)
amortization
Finance income - 1 1
Finance costs (9) (121) (130)
Profit before tax 988 2 077 3 065
Segment assets 6 532 22 359 28 891
All other Elimination Total RGT
segments of SMART
intersegment
transactions
External revenue - - 15 973
Internal revenue 3 060 (3 104) -
Total revenue 3 060 (3 104) 15 973
Cost of sales - 44 (3 460)
Personnel costs (2 410) - (6 733)
Lease rentals (35) - (811)
Other costs (1 054) 3 060 (1 775)
EBITDA (439) - 3 194
Depreciation and (29) - (469)
amortization
Finance income 277 (129) 149
Finance costs (122) 129 (122)
Profit before tax (313) - 2 752
Segment assets 10 308 - 39 199
Geographical information has not been presented as the company operates in South
Africa only.
Revenue from external customers for each product and service, or each group of
similar products and services has not been presented, as the information is not
available and the cost to develop it would be excessive. The Group does not earn
revenue in excess of 10% from one single customer, and as such does not place
reliance on a single customer or group of customer for its continued existence.
ISSUES OF SHARES AND CHANGE IN CONTROL
In terms of a change in control circular dated 14 June 2011, the Company issued
215 512 128 new ordinary shares to H.L. Halls and Sons Investments (Proprietary)
Limited ("Halls"). This change in control triggered a mandatory offer in terms
of the Takeover Regulations (the then Securities Regulations Panel Code) which
uptake of the mandatory offer resulted in Halls obtaining a further 42 916 444
ordinary shares.
With the total 258 428 572 shares, Halls achieved a total shareholding in RGT
SMART of 51.68% making Halls the controlling shareholder. The Halls shareholding
will be held by Halls` subsidiary Lightstone.
Halls, through Lightstone, invested in the Company to assist in building RGT
SMART`s business using capabilities, data and technology available to Halls
through its strategic investments in Halls and Lightstone and other intellectual
property and technology based organisations, facilitate collaboration between
RGT SMART and various subsidiaries and associates of Halls to create value for
all collaborating parties and add value to the product and service offerings
provided to RGT SMART`s customers.
Other than the above mentioned issue, there were no further shares issued during
the period under review.
ACQUISITIONS AND DISPOSALS
There were no acquisitions or disposals during the period under review. Due to
the cash resources within the Company, the Company will be looking for suitable
strategic acquisitions going forward in addition to building the staffing
complement for organic growth.
DIRECTOR CHANGES
Subsequent to the year end and during the interim period ended 31 August 2011,
the following changes to the board occurred:
Director Date appointed
S Pretorius*# 1 March 2011
A Miller* 1 June 2011
Non-executive* Independent#
The current board of directors consists of:
Director Date appointed
A Da Costa*# 12 June 2008
P De Vantier (CEO) 12 June 2008
C Reed (FD) 12 June 2008
N Bruton 12 June 2008
C Moodliar*# 5 May 2010
T Hayter*# 9 September 2010
S Pretorius*# 1 March 2011
A Miller* 1 June 2011
Non-executive* Independent#
Further to the SENS announcement published on 30 September 2011, it has been
agreed that Mr Reed would continue his service as financial director.
SHARE CAPITAL
As at 31 August 2011, there were 500 000 000 issued ordinary shares and no
unissued ordinary shares. The Company will consider increasing its authorised
share capital in the event that any new shares are required to be issued.
DIVIDEND
No interim dividend has been declared. The Board may consider the declaration
of a dividend at year end.
LITIGATION
There is no litigation pending against the company or its subsidiaries, which is
expected to have a material impact on the results of the company.
CONTINGENT LIABILITIES
At the balance sheet date the Group does not have any contingent liabilities.
SUBSEQUENT EVENTS
There are no material events subsequent to the period end that require
reporting.
NOTIFICATION TO SHAREHOLDERS IN TERMS OF SECTION 45 OF THE COMPANIES ACT 71 OF
2008 ("THE ACT")
In accordance with Section 45(5) of the Act, notification is given to
shareholders of the Company that a loan of up to R1.7 million to an associate of
the Company was approved by the board.
The board of directors have considered the solvency and liquidity of the Company
before having approved the above-mentioned loan.
FUTURE PROSPECTS
The directors are exceedingly pleased with the investment by Lightstone, besides
substantial improvements to the company balance sheet Lightstone and other Halls
subsidiaries bring a wealth of knowledge and expertise exploitation of many
synergies between the sister companies is expected to open up a number of
exciting opportunities.
This existing business is sound, profitable, cash flow generative with annuity
business that continues to grow steadily.
By order of the Board
Mr AA Da Costa Mr PB De Vantier
Chairman Chief Executive Officer
Cliff Reed
Financial Director
21 November 2011
Johannesburg
Registered Office
Arcay House, Number 3 Anerley Road, Parktown, Johannesburg, 2193 (PO Box
62397, Marshalltown, 2107)
Directors
AA Da Costa*#(Chairman), PB De Vantier(CEO), CW Reed (FD), NS Bruton, CJ
Moodliar*#, TB Hayter*#, S Pretorius*#, A Miller*
* Non-executive, #Independent
Designated Advisor Transfer Office
Arcay Moela Sponsors Link Market Services (Proprietary)
(Proprietary) Limited Limited
Date: 21/11/2011 08:45:55 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.
Sharenet Sites 
