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Audited results for the twelve months ended 31 July 2013
SECUREDATA HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/010017/06)
Share code: SDH ISIN: ZAE000096368
(“SecureData” or “the Group” or “the Company”)
AUDITED RESULTS FOR THE TWELVE MONTHS ENDED 31 JULY 2013
Condensed consolidated statement of comprehensive income for the twelve months ended
31 July 2013
Audited Audited
twelve twelve
months ended months ended
31 July 2013 31 July 2012
R'000 R'000
Revenue 289 677 222 229
Earnings/(loss) before interest, taxation, depreciation and
amortisation (EBITDA) and other items 39 (44 961)
Depreciation and amortisation (3 170) (4 109)
- Depreciation (1 735) (1 345)
- Amortisation (1 435) (2 764)
Loss from operations (3 131) (49 070)
Finance income 2 208 161
Finance costs (464) (3 590)
Goodwill written off - (2 359)
Fair value movements in derivatives 3 199 1 664
Profit/(loss) before taxation 1 812 (53 194)
Taxation 571 5 469
Profit/(loss) on continuing operations 2 383 (47 725)
Discontinued operations (Note 1) - 9 631
Profit/(loss) for the year 2 383 (38 094)
Attributable to:
- owners of the parent 2 383 (39 395)
- non-controlling interest - 1 301
Profit/(loss) for the year 2 383 (38 094)
Profit/(loss) for the year 2 383 (38 094)
Other comprehensive income
Items that will be reclassified subsequently to profit /(loss)
Foreign exchange conversion movements (141) 25 440
Reclassified to profit/(loss) 138 -
Other comprehensive (loss)/income for the year, net of tax (3) 25 440
Total comprehensive income/(loss) for the year 2 380 (12 654)
Total comprehensive income/(loss) for the year attributable to:
- owners of the parent 2 380 (14 809)
- non-controlling interest - 2 155
Total comprehensive income/(loss) for the year 2 380 (12 654)
Earnings/(loss) per share (cents) 1.0 (17.3)
- Continued operations 1.0 (20.9)
- Discontinued operations - 3.6
Diluted earnings/(loss) per share (cents) 1.0 (17.3)
- Continued operations 1.0 (20.9)
- Discontinued operations - 3.6
Weighted average numbers of shares on which
- earnings per share is based ('000) 227 129 228 395
- diluted earnings per share is based ('000) 227 129 228 395
Number of ordinary shares in issue ('000) 246 320 246 320
Reconciliation between earnings and headline earnings
Profit/(loss) for the year attributable to owners of the parent 2 383 (39 395)
FCTR reclassified to profit/(loss) 138 -
Goodwill written off - 2 359
Loss on disposal of subsidiary - 1 112
Loss on disposal of property, plant and equipment net of tax 50 1 161
Headline earnings/(loss) 2 571 (34 763)
Headline earnings/(loss) per share (cents) 1.1 (15.2)
- Continued operations 1.1 (19.4)
- Discontinued operations - 4.2
Note 1
Discontinued operations
Revenue - 220 317
Earnings before interest, taxation, depreciation and
amortisation (EBITDA) and other financial items - 17 360
Depreciation and amortisation - (7 707)
- Depreciation - (1 402)
- Amortisation - (6 305)
Profit from operations - 9 653
Finance income - 67
Finance costs - 9 486
- Interest paid - (3 126)
- Foreign exchange gains on loan to subsidiary - 12 612
Profit before taxation - 19 206
Taxation - (8 463)
- Normal taxation - (8 463)
Loss on sale of subsidiary - (1 112)
Profit for the year - 9 631
Condensed consolidated statement of financial position at 31 July 2013
Audited at Audited at
31 July 2013 31 July 2012
R'000 R'000
ASSETS
Non-current assets 66 540 65 917
Property, plant and equipment 3 161 3 836
Goodwill 37 459 37 459
Intangible assets 4 182 5 084
Deferred tax asset 21 738 19 538
Current assets 91 904 139 415
Inventories 3 720 7 482
Trade and other receivable's 73 359 41 207
Derivative financial instruments 492 -
Taxation prepaid 6 1 139
Cash and cash equivalents 14 327 89 587
Total assets 158 444 205 332
EQUITY AND LIABILITIES
Equity 88 375 143 402
Share capital 246 246
Share premium 57 320 118 900
Treasury shares (19 163) (23 336)
Share-based payment equity reserve - 1 255
Foreign currency translation reserve 22 25
Retained earnings 49 950 46 312
Non-current liabilities 1 018 1 301
Deferred tax liability 1 018 1 301
Current liabilities 69 051 60 629
Trade and other payables 68 440 56 459
Derivative financial instruments - 2 707
Taxation 601 1 454
Bank overdrafts 10 9
Total equity and liabilities 158 444 205 332
Net asset value per share (cents) 35.9 58.2
Net asset value per share net of treasury (cents) 38.9 62.8
Condensed consolidated statement of cash flows for the twelve months ended 31 July 2013
Audited Audited
twelve twelve
months months
ended ended
31 July 2013 31 July 2012
R'000 R'000
Cash flows from operating activities (16 277) (53 358)
Profit/(loss) before taxation 1 812 (35 100)
Adjustments not affecting the flow of funds (1 952) 8 809
Operating loss before working capital changes (140) (26 291)
Decrease in working capital (16 409) (18 459)
Cash (utilised in) operations (16 549) (44 750)
272 (8 608)
Finance income 2 208 228
Finance costs (326) (6 716)
Taxation paid (1 610) (2 120)
Cash flows from investing activities (1 662) 155 406
Cash flows from financing activities (57 407) (44 012)
Capital reduction of shares in issue (61 580) -
Own shares acquired and capital reduction by subsidiary 4 173 -
Loans repaid - (44 012)
(Decrease)/increase in cash equivalents (75 346) 58 036
Foreign exchange movements in cash balances 85 4 382
Cash and cash equivalents at beginning of the year 89 578 27 160
Cash and cash equivalents at end of the year 14 317 89 578
Condensed consolidated statement of changes in equity for the twelve months ended
31 July 2013
Audited Audited
twelve twelve
months months
ended ended
31 July 2013 31 July 2012
R'000 R'000
Share capital 246 246
Share premium 57 320 118 900
Balance at beginning of the year 118 900 118 900
Capital reduction (61 580) -
Treasury shares (19 163) (23 336)
Balance at beginning of the year (23 336) (23 336)
Capital reduction 4 797 -
Own shares acquired by subsidiary (624) -
Share-based payment equity reserve - 1 255
Balance at beginning of the year 1 255 3 322
Share based payment transactions during the year - 26
Transfer to retained earnings (1 255) (2 093)
Foreign currency translation reserve 22 25
Balance at beginning of the year 25 (24 561)
Foreign exchange movements during the year (3) 24 586
Retained earnings 49 950 46 312
Balance at beginning of the year 46 312 83 614
Profit for the year 2 383 (39 395)
Transfer from share-based payment equity reserve 1 255 2 093
Equity attributable to owners of the parent 88 375 143 402
Non-controlling interest - -
Balance at beginning of the year - 10 588
Recognised income for the year - 1 301
Disposal of subsidiary - (12 743)
Foreign exchange movements - 854
Total capital and reserves 88 375 143 402
Commentary
General review
Security of electronic information of all types is a constant and growing concern for enterprises.
SecureData is in the business of keeping the electronic data of our clients safe, available and reliable.
Appropriate products and services are supplied by highly trained and skilled personnel. We provide
products and services to almost every single one of the major corporations in South Africa, as well as
African businesses and governments, and provide specialised information security services in Europe
and USA.
After very disappointing trading results in the financial year ended 31 July 2012 (“the prior year”),
the period under review has seen a return to profitability. Group EBITDA from continued operations
improved to R0.039 million (2012: loss of R45 million) on revenues that increased to R289.7 million
(2012: R222.2 million) reflecting a break even EBITDA margin (2012: -20.2%). The increase in
revenue is due to focussing on the generation of new business in partnership with our channel
resellers.
The net cash position of the Group stood at R14.3 million (2012: R89.6 million following the sale of
SecureData Europe and before a capital reduction of 25 cents per share (R61.6 million) was paid to
shareholders on 24 December 2012).
Between May 2012 and the date of approval of these results, SecureData has undergone extensive
restructuring and a major overhaul of its leadership team. Group headcount has reduced from 140
to 104. Certain products and services were discontinued, and other new ones introduced.
Experienced senior personnel were hired to strengthen the team.
Technology renewal revenue is important to our business, but the focus turned to the generation of
new business in partnership with our channel resellers. This effort is starting to bear fruit and we are
seeing the beginnings of some material growth. Although growth is in some instances constrained by
the cash required to fund it, we focus on the highest gross margin opportunities.
Operational review
SecureData operates through two subsidiaries, SecureData Africa and SensePost.
SecureData Africa
SecureData Africa markets and distributes best-of-class information risk management products in
South Africa and across the rest of the continent.
SecureData Africa
12 months to 12 months to
31 July 2013 Growth 31 July 2012
R'000 R'000
Revenue 252 965 33.7% 189 207
EBITDA (258) 99.4% (45 897)
EBITDA margin (%) (0.1) - (24.3)
SecureData Africa has seen a turnaround with an EBITDA loss of R0.3 million (2012: loss of R45.9
million) on revenue of R253.0 million (2012: R189.2 million). The revenue growth was 33.7%.
Significant growth was achieved from territories north of South Africa which now comprises
approximately 18% (2012: 10%) of the business.
We have seen major drivers for our products and services come from the emphasis on remote
device management, cloud computing, data loss protection and intrusion detection and recovery.
Our people have been retrained to address solutions to specific risks in enterprises. This has been
well received by our end-user customers. We always approach end-user customers in partnership
with channel resellers. This has introduced transparency and certainty into the market and gives
assurance to the procurement functions of end-user customers that they are buying from
competitive suppliers who fully understand their needs.
SensePost
SensePost provides independent information security assessment services. Based in South Africa,
the company is a recognised global leader in its niche market, and boasts a blue-chip client base
internationally.
SensePost
12 months to 12 months to
31 July 2013 Growth 31 July 2012
R'000 R'000
Revenue 36 577 8.9% 33 576
EBITDA 8 481 5.0% 8 075
EBITDA margin (%) 23.2 - 24.0
SensePost remained profitable with an EBITDA of R8.5 million (2012: R8.1 million) on increased
revenues of 8.9% to R36.6 million (2012: R33.6 million).
SensePost continues to keep our clients’ data and systems safe by performing complex and skilled
penetration testing, vulnerability assessments and training. Approximately a quarter of the revenues
were generated outside of South Africa, mainly in the USA and UK. We are continuing to invest in
the UK operations.
The table below reconciles the divisional results back to the consolidated Group results:
12 months to 12 months to
31 July 2013 31 July 2012
Revenue EBITDA Revenue EBITDA
R'000 R'000 R'000 R'000
SecureData Africa 252 965 (258) 189 207 (45 897)
SensePost 36 577 8 481 33 576 8 075
Head office costs 135 (8 184) - (7 139)
Consolidation entries - - (554) -
Continuing operations 289 677 39 222 229 (44 961)
SecureData Europe - - 221 314 20 482
Head office costs - - - (3 122)
Consolidation entries - - (997) -
Discontinued operations - - 220 317 17 360
Group results 289 677 39 442 546 (27 601)
Prospects
We expect to maintain the present rate of growth in SecureData Africa. The changes to our team
and to our structures and focus areas were implemented steadily throughout the past financial year.
We have started the new year with these improved teams and structures. We have also started the
new year with favourable changes to our product mix.
We also expect to maintain the present more modest rate of growth in SensePost as we take
advantage of the market’s demand for highly technical expertise and training.
Basis of preparation
These provisional audited condensed consolidated financial statements have been prepared in
accordance with the recognition and measurement requirements of International Financial
Reporting Standards and the presentation and disclosure requirements of IAS 34 – Interim Financial
Reporting, the Companies Act, 2008 (Act 71 of 2008), as amended, the SAICA Financial Reporting
Guides, as issued by the Accounting Practices Committee and Financial Reporting Pronouncements
as issued by Financial Reporting Standards Council, and with the JSE Listings Requirements. The
accounting policies applied in the preparation of these provisional audited condensed consolidated
financial statements conform to the requirements of International Financial Reporting Standards,
and are consistent with those applied in the prior year.
These results have been prepared on the going concern basis and have been prepared under the
supervision of Carlo Venter, the Financial Director of the Group.
Audit opinion
The Group’s auditors, Grant Thornton, have issued an unmodified opinion on the Group’s financial
results for the year ended 31 July 2013. The audit was conducted in accordance with International
Standards on Auditing. These condensed consolidated financial statements have been derived from
the Group financial statements and are consistent in all material respects with the Group financial
statements. A copy of the audit report is available for inspection at the Company’s registered office.
Any reference to future financial performance included in this announcement has not been
reviewed or reported on by the Company’s auditor.
Subsequent events
The board of directors of SecureData (“the Board”) are not aware of any material matter or
circumstance arising since the end of the financial year under review to the date of this report.
Directorate
Mr Lwazi Koyana and Mr Steve Midgley were appointed as independent non-executive directors of
SecureData with effect from 8 October 2012.
Mr Johan du Toit resigned as Financial Director with effect from 31 October 2012.
Mr Carlo Venter was appointed as Financial Director with effect from 1 November 2012.
Mr Andrew Aitken resigned as director on 24 January 2013.
For and on behalf of the Board
PR Pretorius MG Crisp
Chairman Chief Executive Officer
18 October 2013
Directors: PR Pretorius# (Chairman), M Crisp (Chief Executive Officer), C Venter (Financial Director), N
Mthembu#, P Sneddon(Lead)*, VJ Archer*, L Koyana*, S Midgley*
*Independent non-executive
#non- executive
Registered office: SecureData Holdings Limited, Building A, 3021 William Nicol Drive, Bryanston,
2021 (PO Box 4673, Rivonia, 2128)
Company secretary: Merchantec Proprietary Limited
Transfer secretaries: Computershare Investor Services Proprietary Limited
Auditors: Grant Thornton
Sponsor: Merchantec Capital
www.securedataholdings.com
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