Wrap Text
Abridged Group Audited Results For The Year Ended 30 June 2013 And Notice Of Annual General Meeting
SILVERBRIDGE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration NUMBER 1995/006315/06)
Share code: “SVB” ISIN: ZAE000086229
(“SilverBridge” or “Group”)
ABRIDGED GROUP AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2013 AND
NOTICE OF ANNUAL GENERAL MEETING
GROUP PROFILE
SilverBridge offers clients in the insurance industry reliable
solutions that aim to simplify their operations by enabling and
improving their business processes. We achieve this by
implementing our system platforms and customising them to meet
client needs. After being implemented, our software is rented to
our customers on a usage basis. The valuable experience we have
gained through our existing African footprint and strategic
partnerships positions us well to take advantage of opportunities
while making life insurance simpler and more accessible.
Exergy is our flagship platform that enables core back office
policy administration in the life assurance industry. The broader
Exergy solution package has specific applications which can be
customised to suit the needs of a long-term insurer. We aim to
enable our clients to drive their strategic business objectives
more efficiently. Our approach is to identify and define strategic
customer business objectives, translate them into IT requirements
and implement sustainable solutions.
GROUP ABRIDGED AUDITED STATEMENT OF COMPREHENSIVE INCOME FOR THE
YEAR ENDED 30 JUNE 2013
2013 2012
Notes R’000 R’000
Revenue 1.5 82 247 82 576
Other income 316 590
Personnel expenses (60 279) (66 931)
Depreciation and amortisation (2 990) (3 058)
Professional fees paid for
services (4 117) (4 885)
Other expenses (11 962) (12 395)
Results from operating activities 3 215 (4 103)
Impairment loss recognised on
non-financial assets – (466)
Impairment loss recognised on
withholding tax – (2 140)
Loss on disposal of subsidiary – (668)
Loss on disposal of associate – (76)
Finance income 182 156
Finance costs (310) (164)
Profit/(Loss) before income tax 3 087 (7 461)
Income tax (765) 858
Profit/(Loss) and total
comprehensive income for the
period 2 322 (6 603)
Earnings/(Loss) per share
Basic earnings/(Loss) per share 1.3 6.70 (19.04)
Diluted earnings/(Loss) per share 1.3 6.70 (19.04)
GROUP ABRIDGED AUDITED STATEMENT OF POSITION AS AT 30 JUNE 2013
2013 2012
Notes R’000 R’000
ASSETS
Non-current assets 14 808 17 938
Plant and equipment 841 2 195
Intangible assets 11 670 12 496
Deferred tax assets 280 1 437
Withholding tax rebates receivable 2 017 1 810
Current assets 17 910 16 454
Income tax receivable 1 102 833
Revenue recognised not yet invoiced 1.4 1 297 712
Trade and other receivables 12 308 10 388
Cash and cash equivalents 3 203 4 521
Total assets 32 718 34 392
EQUITY AND LIABILITIES
Equity 24 229 21 462
Share capital 348 348
Share premium 11 871 11 871
Treasury shares (197) (197)
Share based payment reserve 1 070 1 338
Retained earnings 11 137 8 102
Current liabilities 8 489 12 930
Income tax payable - 248
Trade and other payables 1.2 6 807 7 325
Deferred revenue 1.4 1 682 5 357
Total liabilities 8 489 12 930
Total equity and liabilities 32 718 34 392
Net asset value per share (cents) 69.87 61.89
Net tangible asset value per share
(cents) 36.22 25.86
GROUP ABRIDGED AUDITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR
ENDED 30 JUNE 2013
Issued Share Treasury
capital premium shares
R’000 R’000 R’000
Balance at 1 July 2011 348 11 871 (197)
Total comprehensive income for
the period
Loss for the period – – –
Total comprehensive income for
the period – – –
Transactions with owners,
recorded directly in equity
Contributions by and
distributions to owners
Equity settled share based
payment – – –
Total contributions by and
distributions to owners – – –
Total transactions with owners – – –
Balance at 30 June 2012 348 11 871 (197)
Total comprehensive income for
the period
Profit for the period – – –
Total comprehensive income for
the period – – –
Transactions with owners,
recorded directly in equity
Contributions by and
distributions to owners
Equity settled share based
payment – – –
Transfer of reserve of share
options that did not vest – – –
Total contributions by and
distributions to owners – – –
Total transactions with owners – – –
Balance at 30 June 2013 348 11 871 (197)
Share Retained
based earnings/
payment (Accumulated Total
reserve loss) equity
R’000 R’000 R’000
Balance at 1 July 2011 757 14 705 27 484
Total comprehensive income for
the period
Loss for the period – (6 603) (6 603)
Total comprehensive income for
the period – (6 603) (6 603)
Transactions with owners,
recorded directly in equity
Contributions by and
distributions to owners
Equity settled share based
payment 581 – 581
Total contributions by and
distributions to owners 581 – 581
Total transactions with owners 581 (6 603) (6 022)
Balance at 30 June 2012 1 338 8 102 21 462
Total comprehensive income for
the period
Profit for the period – 2 322 2 322
Total comprehensive income for
the period – 2 322 2 322
Transactions with owners,
recorded directly in equity
Contributions by and
distributions to owners
Equity settled share based
payment 445 – 445
Transfer of reserve of share
options that did not vest (713) 713 –
Total contributions by and
distributions to owners (268) 713 445
Total transactions with owners (268) 713 445
Balance at 30 June 2013 1 070 11 137 24 229
GROUP ABRIDGED AUDITED CASH FLOW STATEMENT FOR THE YEAR ENDED 30
JUNE 2013
2013 2012
R’000 R’000
Cash generated from/(utilised in)
operations 157 (7 841)
Interest received 112 127
Interest paid (190) (164)
Taxation paid (173) (754)
Net cash outflow from operating
activities (94) (8 632)
Cash flows from investing
activities
Plant and equipment acquired to
maintain operations (492) (1 232)
Proceeds from sale of equipment 24 36
Acquisition of Ones & Zeros non-
controlling interest – (1 950)
Cash effect with sale of subsidiary – (200)
Cash outflow with capitalisation of
development costs (756) –
Net cash used in investing
activities (1 224) (3 346)
Cash flows from financing
activities
Dividend paid to equity holders – (1)
Net cash outflow from financing
activities – (1)
Net decrease in cash and cash
equivalents (1 318) (11 979)
Cash and cash equivalents at the
beginning of the period 4 521 16 500
Cash and cash equivalents at the
end of the period 3 203 4 521
GROUP ABRIDGED AUDITED SEGMENT REPORTS FOR THE YEAR ENDED 30 JUNE
2013
BUSINESS SEGMENTS
Imple-
mentation Support
services services
2013 R’000 R’000
Segment revenue 24 673 23 381
Direct segment cost (21 988) (13 519)
Cost capitalised – –
Segment gross profit 2 685 9 862
Indirect segment cost (12 536) (7 708)
Segment result (9 851) 2 154
Unallocated expenses *
Operating profit
Finance income
Finance expense
Income tax
Profit for the period
Software
Research and rental and
development maintenance Total
2013 R’000 R’000 R’000
Segment revenue – 34 193 82 247
Direct segment cost (12 787) (974) (49 268)
Cost capitalised 756 – 756
Segment gross profit (12 031) 33 219 33 734
Indirect segment cost (7 290) (555) (28 090)
Segment result (19 322) 32 663 5 645
Unallocated expenses * (2 431)
Operating profit 3 215
Finance income 182
Finance expense (310)
Income tax (765)
Profit for the period 2 322
* Unallocated expenses relate to costs incurred at a corporate
level.
Imple-
mentation Support
services services
2012 R’000 R’000
Segment revenue 29 171 20 081
Direct segment cost (28 326) (13 515)
Cost capitalised – –
Segment gross profit 845 6 566
Indirect segment cost (15 581) (7 434)
Segment result (14 736) (868)
Unallocated expenses *
Operating loss
Impairment loss recognised on
withholding tax
Loss on disposal of subsidiary
Loss on disposal of associate
Impairment loss
Finance income
Finance expense
Income tax
Loss for the period
Research Software
and rental and
development maintenance Total
2012 R’000 R’000 R’000
Segment revenue – 33 324 82 576
Direct segment cost (10 872) (1 334) (54 047)
Cost capitalised – – –
Segment gross profit (10 872) 31 990 28 529
Indirect segment cost (5 980) (734) (29 729)
Segment result (16 852) 31 256 (1 200)
Unallocated expenses * (2 903)
Operating loss (4 103)
Impairment loss recognised
on withholding tax (2 140)
Loss on disposal
of subsidiary (668)
Loss on disposal
of associate (76)
Impairment loss (466)
Finance income 156
Finance expense (164)
Income tax 858
Loss for the period (6 603)
* Unallocated expenses relate to costs incurred at a corporate
level.
COMMENTARY
1. NOTES TO THE ABRIDGED GROUP FINANCIAL STATEMENTS
1.1 BASIS OF PREPARATION
The abridged Group annual financial statements are prepared in
accordance with the recognition and measurement requirements of
International Financial Reporting Standards (“IFRS”) International
Accounting Standard 34 (“IAS 34”), the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and
Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council, the Listings Requirements of JSE
Limited ("the Listings Requirements") and the requirements of the
Companies Act of South Africa (Act 71 of 2008) as amended (“the
Companies Act”).
The abridged Group annual financial statements for the year ended
30 June 2013 incorporate extracts of the Group’s unqualified
audited financial statements, which are prepared in accordance
with IFRS and the Companies Act. The accounting policies applied
are consistent with those of the previous financial year. For a
better understanding of the Group’s financial position and results
of operations, these abridged financial statements must be read in
conjunction with the Group’s audited annual financial statements
for the year ended 30 June 2013 which include all disclosures
required by IFRS, and which are expected to be released on or
about 17 September 2013. The Group’s integrated report which
incorporates the Annual Financial Statements can be obtained from
our website or by contacting the Company directly. These Annual
Financial Statements were prepared by the Head of Finance and
Shared Services, Petro Mostert CA(SA).
The directors take full responsibility for the preparation of the
abridged report and the financial information has been correctly
extracted from the underlying annual financial statements. This
abridged report is extracted from audited information, but is not
itself audited.
1.2 TRADE AND OTHER PAYABLES
Trade and other payables comprised of the following:
2013 2012
R’000 R’000
Trade payables 2 783 3 237
Liability on capital reduction 30 30
Other payables (accruals) 1 487 1 449
Withholding tax rebate payable 278 278
VAT payable 177 317
Leave accrual 2 052 2 014
Total trade and other payables 6 807 7 325
1.3 EARNINGS/(LOSS) PER SHARE
BASIC AND DILUTED EARNINGS/(LOSS) PER ORDINARY SHARE
Basic and diluted earnings/(loss) per ordinary share is calculated
by dividing the earnings/(loss) for the period attributable to
ordinary equity holders of the parent of R2.3 million (2012: loss
of R6.6 million) by the weighted average number of ordinary shares
outstanding during the period of 34.7 million (2012: 34.7
million).
2013 2012
Reconciliation of the weighted average
number of shares in issue
Shares in issue at the beginning of the
period ('000) 34 781 34 781
Effect of treasury shares acquired on 1
March 2007 ('000) (106) (106)
Weighted average number of shares in
issue at the
end of the period ('000) 34 675 34 675
Earnings/(Loss) attributable to ordinary
shareholders (R'000) 2 322 (6 603)
Basic and diluted earnings/(loss) per
share (cents) 6.70 (19.04)
HEADLINE AND DILUTED EARNINGS/(LOSS) PER ORDINARY SHARE
Headline and diluted headline earnings/(loss) per ordinary share
is calculated by dividing the headline earnings attributable to
ordinary equity holders of the parent of R2.6 million (2012:
headline loss of R5.9 million) by the weighted average number of
ordinary shares outstanding during the period of 34.7 million
(2012: 34.7 million).
2013 2012
Weighted average number of shares in
issue ('000) 34 675 34 675
Reconciliation between basic earnings and
headline earnings
Basic earnings/(loss) (R'000) 2 322 (6 603)
Adjusted for:
– Loss/(Profit) on disposal of equipment
(R'000) 298 (11)
– Loss on sale of subsidiary (R'000) - 668
– Loss on sale of associate (R'000) - 76
Headline earnings/(loss) (R'000) 2 620 (5 870)
Headline and diluted earnings/(loss) per
share (cents) 7.56 (16.93)
1.4 DEFERRED REVENUE AND REVENUE RECOGNISED BUT NOT YET INVOICED
Deferred revenue and revenue recognised but not yet invoiced
refers to the timing difference between recognition of revenue and
invoicing to the client.
2013 2012
R'000 R'000
Current asset
Revenue recognised not yet invoiced 1 297 712
Current liability
Deferred revenue (1 682) (5 357)
Net liability (385) (4 645)
1.5 REVENUE PER GEOGRAPHICAL SEGMENT
Other
South African
Total Africa countries*
R’000 R’000 R’000
Year ended 30 June 2013 82 247 60 420 21 827
Year ended 30 June 2012 82 576 66 822 15 754
* Other African countries include Botswana, Kenya, Malawi,
Mauritius, Nigeria, Ghana, Namibia, Lesotho, Swaziland, Zambia
and Zimbabwe.
2. CORPORATE ACTIVITY
2.1. DIVIDEND
No dividend or capital distribution was declared for the period
under review.
3. AUDIT REPORT
The financial statements for the year ended 30 June 2013 have been
audited by KPMG Inc. with Shaun van den Boogaard as the designated
partner. Their unmodified audit report is available for
inspection at the Group’s registered office.
4. SUBSEQUENT EVENTS
No events occurred subsequent to the period end that would require
the abridged Group annual financial statements to be adjusted.
5. FINANCIAL RESULTS AND PERFORMANCE
The Group is in a much better position than it was last year. We
have reduced the cost base, improved our methodologies and
restored profitability.
We have made good progress to improve our overall delivery
process. Client relationships have improved. Our contracts have a
clearer scope and are being well executed. Our largest
implementation project is being managed well.
Group revenue was flat largely due to the decline in
implementation segment. Although implementation revenue declined,
annuity revenue increased healthily.
Total costs declined by 9% from a reduction in both direct costs
and general overheads. This was a result of focused efforts. More
use of internal staff instead of expensive external contractors
helped. Cost awareness will remain important going forward.
The Group’s profitability has been restored. Net profit for the
year was R2.3 million and HEPS of 7.6 cents was achieved.
Sequentially, there was an improvement from the first to the
second half of the year.
Cash flow from operating activities was near zero, an R8.5 million
improvement from last year. It was impacted by adverse movements
in working capital. However, shortly after period end, R2.9
million of debtors due at year end was collected. Cash and working
capital continue to be managed carefully.
SEGMENTAL REVIEW
Implementation
This segment implements our solutions for clients and is project
based.
Revenue declined by 15% mainly as a result of being focused on a
single large project, which produced lower than expected revenue.
The gross profit margin increased to 11% from last year’s 3% on
improvements in our project methodology. It is however well below
target. After indirect costs, a loss of R9.9 million was reported.
Although this is an improvement from last year’s R14.7 million
loss, the implementation segment continues to weigh heavily on the
Group’s performance.
We intend making further improvements in this segment over time
through further refinement of our project methodology and sharing
implementation risk with implementation partners.
Support
Support is contracted on a monthly basis and is annuity based.
Revenue grew healthily by 16% with the gross profit margin
increasing to 42%. After indirect costs, R2.2 million profit was
achieved. Our improved methodology has yielded better
efficiencies. We also renegotiated several existing support
contracts for improved cost recovery. Several new support
contracts were also added.
Software rental
Software rental is annuity based. It depends on usage, increasing
with the number of contracts or policies administered.
Revenue grew by 3% and profit by 5%. Adjusting for once-off
software license income, software rental was up 11%. This was
driven by increased usage and new clients.
Research and development (“R&D”)
Our R&D efforts were focused on further development of the Eco-
Suite, a set of assets that forms a platform for implementing more
efficiently and enabling partners and clients. It includes tools,
processes, testing and training. It enables implementation
partners to implement SilverBridge’s systems more easily using
only high level specialist services from SilverBridge. The Eco-
Suite remains important to the Group and will continue to be
refined. The Eco-Suite helped us internally with our own improved
methodology. It was also actively used in the engagement with new
implementation partners.
6. GROUP OUTLOOK
The changing environment within our target market continues to
present new opportunities as financial service institutions search
for ways to reduce costs and improve service to their clients. We
continue to see financial service providers driving internal
efficiencies and differentiating their products as a means to
capture and retain market share. SilverBridge remains well
positioned to meet these needs.
In our own business we have challenges and risks which we will
continue to focus on and mitigate. Specifically key challenges lie
in getting an implementation partner into a position to do large
implementations, as well as managing the risks in our own current
large implementation in Nedgroup Life.
However, despite the above, the outlook for the Group remains
positive. Building our annuity revenue remains an ongoing goal.
Making implementations simpler and improving quality for us and
our partners will support this goal. We continue to actively
develop our partner channel and refine the tools and processes to
enable efficient delivery. In addition, we are engaged in several
implementations and active in securing new business.
7. NOTICE OF THE ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting of the
Company will be held at 10:00 on Friday, 25 October 2013 at the
registered office of SilverBridge, 495 Prieska Street,
Erasmuskloof, Pretoria, to transact the business as stated in the
notice of the Annual General Meeting, which is contained in the
Integrated Annual Report to be posted to shareholders on or about
17 September 2013.
The board of directors of SilverBridge has determined that, in
terms of section 62(3)(a), as read with section 59 of the
Companies Act, 2008 (Act 71 of 2008), the record date for the
purposes of determining which shareholders of the Company are
entitled to participate in and vote at the Annual General Meeting
is Friday, 18 October 2013. Accordingly, the last day to trade in
SilverBridge shares in order to be recorded in the Register to be
entitled to vote at the Annual General Meeting will be Friday,
11 October 2013.
8. DIRECTORATE
During the year under review the following changes to the board
occurred:
Mr H Govind was appointed as non-executive director on 14 November
2012;
Mr L Kuyper was appointed as executive director on 5 September
2012 and as Financial Director on 11 September 2013;
Ms S Duetsch resigned as non-executive director on 1 November
2012;
Mr D Madubela resigned as non-executive director on 14 November
2012;
Mr J Maritz resigned as financial director on 28 February 2013;
and
Mr J Swanepoel fulfilled the role of acting Financial Director
from 1 March 2013 until 11 September 2013.
On behalf of the board
Jaco Swanepoel Robert Emslie
Chief Executive Officer Chairman
Pretoria
17 September 2013
CORPORATE INFORMATION
Directors of SilverBridge:
Robert Emslie (Chairman)*, Jaco Swanepoel (CEO), Jeremy de
Villiers **, Litha Gcwabe*, Hasheel Govind *, Tyrrel Murray*, Lee
Kuyper (Financial Director).
(All the directors are South African citizens).
* Non-executive
**Independent non-executive
SILVERBRIDGE REGISTERED OFFICES
First Floor, Castle View North
495 Prieska Street, Erasmuskloof,
Pretoria, 0048
(PO Box 11799, Erasmuskloof, 0048)
COMPANY SECRETARY:
Fusion Corporate Secretarial Services Proprietary Limited,
represented by Melinda Gous
GROUP AUDITORS:
KPMG Incorporated
(Registration number: 1999/012543/21)
TRANSFER SECRETARIES
Computershare Investor Services Proprietary Limited
(Registration number: 2004/003647/07)
DESIGNATED ADVISER:
Merchantec Proprietary Limited
(Registration number: 2008/027362/07)
www.silverbridge.co.za
Date: 17/09/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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