Wrap Text
Audited Condensed Results for the Year Ended 28 February 2013
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”)
AUDITED CONDENSED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2013
FINANCIAL HIGHLIGHTS
Feb 2013 Feb 2012
Revenue 36 657 577 32 369 732 13.3%
Total Costs 31 992 748 27 416 502 16.7%
Profit Before Tax 5 059 137 5 319 814 (4.9%)
Profit After Tax 3 885 974 4 123 318 (5.8%)
Headline Earnings 3 884 614 4 214 390 (7.8%)
Basic and diluted earnings per share (cents) 0.8285 0.8247 0.5%
Headline Earnings per share (cents) 0.8283 0.8429 (1.7%)
GENERAL COMMENTS
The Board is pleased to present the consolidated audited results for RGT SMART and its
subsidiaries (“the Group”) for the year ended 28 February 2013.
During the 2012/2013 financial year we have continued integrating the two operational
companies, extracting synergies and building a strong highly motivated team.
As planned, the RGT SMART strategy for 2013 focused on investing for growth, recruiting and
developing the company’s people talent and knowledge base. This bodes well for the RGT
SMART Motor data systems into the future.
Our development team maintained Microsoft Gold Development Partner Status, confirming our
“best of breed” reputation. The systems, security and software are cutting edge, and our new
developments are exploring the boundaries in touch screen, tablet and mobile interfaces.
During the period under review, the RGT SMART team completed a successful roll-out of the
new AutoMSA platform (www.automsa.co.za/). The team also completed development of, and
took to market, the following products: the Go! Dealer Sales Tool (www.gogetsmart.co.za); the
SmartMapping online geo-mapping tool; (www.smartmapping.co.za), the ECHO Customer
Feedback Platform (www.echoecho.co.za); and the Hashtag Social Media Scanning, Scraping
and Linguistic Analytics Solution.
The new CFO/COO, Frans Botha, has quickly assimilated into the business and is making a
significant impact on the business.
We have continued to develop and explore synergies between RGT SMART and sister
companies and a number of new data sources and data enhancements have been made
possible.
FINANCIAL RESULTS
Revenues of R36 657 577 are 13.3% up over the comparative period. Mainly due to significant
investment in additional personnel and product development, and a number of once off
expenses incurred related to the specific share repurchase and legal fees early in the year,
profit after tax (PAT) is down 5.8% over the prior year to R3 885 974. As a consequence of the
share buy-back during the year, basic earnings per share remained stable at 0.8285 cents
(previously 0.8247 cents).
CHANGES TO THE BOARD
As already reported in the results for the first six months, a number of important changes to the
board occurred during the year:
1. Mr Pete Backwell was appointed to the board of RGT SMART as a non-executive director
with effect from 27 March 2012.
2. Dr Neal Bruton changed his role from Executive Director to a Non-Executive Director on
the RGT SMART Board with effect from 4 July 2012.
3. Mr Cliff Reed the Financial Director resigned with effect from the 1 August 2012.
4. Mr Frans Botha was appointed Chief Financial Officer and Chief Operating Officer RGT
SMART with effect from 1 August 2012.
PROSPECTS
The platform established, the infrastructure, technology and the talented team assembled bode
well for the future of RGT SMART. New product platforms, AutoMSA, Go and Echo are already
making a positive contribution. Towards the end of the year in review, negotiations were
concluded to secure the acquisition of the business of Douglas Parker and Associates (DPA) on
28 February 2013 and this will add significantly to the revenue in the coming year.
OFFER BY HALLS TECH AND PROPOSED DELISTING
As was published on SENS on 30 April 2013, Halls Technologies (Pty) Ltd (“Halls Tech”) has
made an offer to acquire 100% of RGT SMART. In terms of the offer and scheme of
arrangement, RGT SMART will become a wholly owned subsidiary of the Halls Tech group,
following which the listing of RGT SMART Shares on the JSE will be terminated. The rationale
for this action in broad terms is as follows:
- Halls Tech is already a 74.9% (seventy four comma nine percent) shareholder in RGT
SMART, through its wholly owned subsidiary Lightstone Proprietary Limited (“Lightstone”)
and is of the opinion that it does not make economic sense for RGT SMART to remain
listed.
- Halls Tech therefore wishes acquire all the shares in RGT Smart not already held by
Lightsone and make RGT SMART a wholly owned subsidiary of Halls Tech.
- The Scheme provides RGT Shareholders, other than Lightstone (“Scheme Participants”)
with an opportunity to exit from an illiquid share and thus provides the Scheme Participants
with a cash exit opportunity.
THANK YOU
Finally, I would like to extend sincere thanks to our Board who continue to provide valuable
insight and guidance. Thanks to our Customers and suppliers for their on-going support and
our shareholders for their continued faith and commitment to our collective vision. Last, but by
no means least, thanks must also go to the Management Team and Staff for their commitment
and motivation; it continues to be a privilege to lead this team.
Condensed Consolidated Statement of Financial Position
2013 2012
R R
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 2 324 506 2 435 306
Goodwill 17 448 704 17 448 704
Intangible assets 6 570 374 5 907 381
Deferred tax 439 990 327 642
26 783 574 26 119 033
CURRENT ASSETS
Current tax receivable 6 880 529 503
Operating lease asset 33 067 149 040
Trade and other receivables 3 796 984 2 967 120
Cash and cash equivalents 6 312 028 9 879 920
10 148 959 13 525 583
TOTAL ASSETS 36 932 533 39 644 626
EQUITY AND LIABILITIES
EQUITY
Share capital 3 638 756 13 271 271
Retained earnings 22 840 099 18 954 125
26 478 855 32 225 396
LIABILITIES
NON-CURRENT LIABILITIES
Other financial liabilities - 1 094 187
Operating lease liability 547 747 -
Deferred tax liabilities 1 764 029 1 654 715
2 311 776 2 748 902
CURRENT LIABILITIES
Other financial liabilities 3 852 398 270 737
Current tax payable 3 065 103 434
Operating lease liability 28 822 563 503
Trade and other payables 2 762 015 2 300 562
Revenue received in advance 1 106 036 1 300 432
Provisions 389 566 131 654
8 141 902 4 670 322
TOTAL LIABILITIES 10 453 678 7 419 224
TOTAL EQUITY AND LIABILITIES 36 932 533 39 644 616
Net asset value per share (cents per share) 6.00 6.45
Tangible net asset value per share (cents per share) 0.60 1.80
Number of shares in issue at year end (’000) 441 322 500 000
Condensed Consolidated Statement of Comprehensive Income
2013 2012
R R
Revenue 36 657 577 32 369 732
Cost of sales (6 568 812) (6 350 281)
Gross profit 30 088 765 26 019 451
Other income 52 543 32 569
Operating expenses (25 322 433) (20 811 453)
Operating profit 4 818 875 5 240 567
Investment revenue 341 765 334 015
Finance costs (101 503) (254 768)
Profit before taxation 5 059 137 5 319 814
Taxation (1 173 163) (1 196 496)
Profit for the period 3 885 974 4 123 318
Other comprehensive income - -
TOTAL COMPREHENSIVE INCOME 3 885 974 4 123 318
Basic and diluted earnings per share (cents) 0.8285 0.8247
Headline earnings per share (cents) 0.8283 0.8492
Earnings and Headline Earnings Reconciliation
Earnings 3 885 974 4 123 318
(Profit)/Loss on disposal of plant and equipment (962) 91 072
Headline earnings 3 884 614 4 214 390
Condensed Consolidated Statement of changes in equity
Total
Share Share Equity share Retained Total
capital premium Reserve capital earnings equity
R R R R R R
Balance at 1
March 2011 4 000 183 37 522 810 (37 498 902) 4 024 091 14 079 817 18 103 908
Changes in
equity -
Profit for the year - - - - 4 123 318 4 123 318
Issue of shares 622 000 5 598 000 - 6 220 000 - 6 220 000
Treasury shared
sold 377 817 2 649 363 - 3 027 180 750 990 3 778 170
Total changes 999 817 8 247 363 - 9 247 180 4 874 308 14 121 488
Balance at 1
March 2012 5 000 000 45 770 173 (37 498 902)13 271 271 18 954 125 32 225 396
Changes in
equity -
Profit for the year - - - - 3 885 974 3 885 974
Business
combination of
entity under
common control (3 457 490) - - (3 457 490) - (3 457 490)
Purchase of own
shares –
cancelled (1 454 580) - - (1 454 580) - (1 454 580)
Treasury shares (4 413 220) - - (4 413 220) - (4 413 220)
Share purchase
costs (307 225) - - (307 225) - (307 225)
Convert to no par
value shares 45 770 173 (45 770 173) - - - -
TOTAL
CHANGES 36 137 658 (45 770 173) - (9 632 515) 3 885 974 (5 746 541)
Balance at 28
February 2013 41 137 658 - (37 498 902) 3 638 756 22 840 099 26 478 855
Condensed Consolidated Statement of Cash Flows
2013 2012
R R
Cash generated from operations 5 988 747 6 627 386
Investment income 341 765 334 015
Finance costs (101 503) (254 768)
Tax paid (753 943) 1 478 616)
Net cash from operating activities 5 475 066 5 228 017
Cash flows from investing activities
Acquisition of property, plant and equipment (668 366) (2 548 892)
Sale of property, plant and equipment 56 542 16 438
Expenditure on product development (1 180 797) (785 164)
Acquisition of business 18 875 -
Net cash from investing activities (1 773 746) (3 317 618)
Cash flows from financing activities
Proceeds on share issue - 6 220 000
Reduction of share capital or buy back of shares (6 175 025) -
Proceeds from sale of treasury share - 3 778 170
Repayment of other financial liabilities - (1 105 574)
Repayment of shareholders loan (1 094 187) (2 343 471)
Net cash from financing activities (7 269 212) 6 549 125
Total cash movement for the year (3 567 892) 8 459 524
Cash at the beginning of the year 9 879 920 1 420 396
Total cash at end of the year 6 312 028 9 879 920
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The board of directors is pleased to present the company’s audited results for the year ended
28 February 2013, which have been approved by the board on 22 May 2013. The preliminary
condensed financial statements have been compiled in accordance with IAS 34: Interim
Financial Reporting and in compliance with the JSE Limited Listings Requirements. The results
have been audited by Mazars and the unqualified audit opinion is available for inspection at the
Company’s registered office.
The accounting policies and critical accounting estimates and judgements applied to these
financial statements are consistent with those applied for the year ended 29 February 2012.
These results have been prepared by Mr F Botha, the Financial Director of RGT SMART.
ACQUISITION OF BUSINESS
On 28 February 2013, RGT Smart Operations Proprietary Limited, a wholly owned subsidiary of
RGT SMART, acquired the business of Douglas Parker and Associates (“DPA”) for a
consideration of R3 581 661. DPA has been in operation since 1978 and specialises in the
assessment and evaluation of market potential for commercial ventures.
RGT SMART is focussed on market research and market intelligence, with a strong focus on
the motor industry. Due to the increased demand for market research and RGT SMART’s
intention to diversify its skills and technology into other sectors, the acquisition of DPA is seen
as a natural fit.
Fair value of assets acquired R
Property, plant and equipment 174 875
Trade and other receivables 15 000
Trade and other payables (84 579)
Cash and cash equivalents 18 875
Total 124 171
Consideration Payable R
Loan from Lightstone Proprietary Limited (3 581 661)
Excess goodwill on acquisition recognised in equity 3 457 490
(124 171)
Trade and other receivables are considered fully recoverable. The purchase price was settled in
cash during March 2013.
The goodwill is attributable to the synergistic benefit that RGT SMART will gain from the
reputation and market presence of the combined entity. Goodwill is recognised in equity in
accordance with the Group’s policy for business combinations of entities under common control.
DPA was previously owned by Lightstone, the Group’s controlling shareholder.
SEGMENT REPORT
Management has determined the operating segments based on the reports reviewed by the
strategic committee. Prior to the merger of the separate legal operating entities during the
preceding financial year, the Group reported its results under two segments namely Market
Research and Statistics. As part of the restructuring, the Group’s operations were rearranged
into three reportable segments with distinct product offerings:
Motor data
Provides clients with online subscription based access to detailed motor industry sales volumes,
vehicle specifications and sophisticated market segmentation and analysis tools.
Market research
Provides qualitative and quantitative market research to clients through the implementation of
world class data collection, analysis and interpretation tools and methodologies.
Customer engagement
Delivers real-time consistent and accurate measurement of customer experience combined with
corrective action and improvement support.
Due to the change in the Group’s operational structure, the segmentation below has been
amended and comparative information has been restated where practically possible.
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 customers for its continued existence.
2013 Group and
Market Customer intersegment
Motor data research engagement eliminations Total
R R R R R
Segment revenue 10 658 866 10 894 252 14 857 092 247 367 36 657 577
Cost of sales (1 137 062) (625 860) (4 422 151) (383 738) (6 568 811)
Personnel cost (2 549 018) (3 466 090) (728 309) (10 000 834) (16 744 251)
Lease rentals - - - (1 944 620) (1 944 620)
Other costs (202 400) (301 140) (337 411) (4 323 432) (5 164 383)
EBITDA 6 770 386 6 501 162 9 369 221 (16 405 257) 6 235 512
Depreciation and
amortisation - - - (1 416 637) (1 416 637)
Finance income - - - 341 765 341 765
Finance cost - - - (101 503) (101 503)
Profit before
taxation 6 770 386 6 501 162 9 369 221 (17 581 632) 5 059 137
2012 Group and
Market Customer intersegment
Motor data research engagement eliminations Total
R R R R R
Segment revenue 10 298 958 9 059 935 12 839 026 171 813 32 369 732
Cost of sales (1 801 393) (1 278 847) (3 061 852) (208 189) (6 350 281)
Personnel cost (1 165 383) (531 416) (309 075) (11 388 088) (13 393 962)
Lease rentals - - - (1 288 314) (1 288 314)
Other costs (1 382 661) (569 119) (547 176) (2 415 101) (4 914 057)
EBITDA 5 949 521 6 680 553 8 920 923 (15 127 879) 6 423 118
Depreciation and
amortisation - - - (1 182 551) (1 182 551)
Finance income - - - 334 015 334 015
Finance cost - - - (254 768) (254 768)
Profit before
taxation 5 949 521 6 680 553 8 920 923 (16 231 183) 5 319 814
SHARE CAPITAL
On 22 August 2012, shareholders approved resolutions to the effect that the company convert
the authorised and issued share capital to no par value shares and increased the authorised
share capital to 1 000 000 000 shares. The special resolutions were registered by CIPC on 26
April 2013.
In addition, shareholders approved the repurchase of 58 678 000 shares as part of a specific
repurchase at 10 cents per share on 22 August 2012 from related parties. A portion of the
repurchased shares, 14 545 800 shares, were cancelled and delisted, while the remainder of
44 132 200 shares are held by a subsidiary as treasury shares.
No new shares were issued during the year under review.
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 (2012: RNil).
DIVIDENDS
No interim or final dividend has been declared.
SUBSEQUENT EVENTS
No material events have been identified subsequent to the year end of the Group up to the date
of this report.
By order of the Board
Mr AA Da Costa Mr PB De Vantier
Chairman Chief Executive Officer
22 May 2013
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), FJ Botha (FD), NS Bruton*, CJ Moodliar*#,
TB Hayter*#, SG Pretorius*#, AH Miller*, P Backwell*
* Non-executive, #Independent
Designated Advisor Transfer Office
Arcay Moela Sponsors Proprietary Limited Link Market Services Proprietary Limited
Date: 22/05/2013 05:35:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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