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COMPU-CLEARING OUTSOURCING LIMITED - Reviewed interims for period ended 31 December 2013

Release Date: 14/03/2014 17:00
Code(s): CCL     PDF:  
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Reviewed interims for period ended 31 December 2013

                                                   

COMPU-CLEARING OUTSOURCING LIMITED
(Registration number 1998/015541/06)
(Incorporated in the Republic of South Africa)
Share Code: CCL      ISIN: ZAE000016564
(“Compu-Clearing” or "the Company")




 Reviewed condensed consolidated interim                                                                 Highlights
                                                                                                                                                            Revenue                                                8% ? Cash generated by operations 26% ?
 financial statements for the six months
                                                                                                                                                            Operating profit                                      35% ? Headline earnings per share  17% ?
 ended 31 December 2013
                                                                                                                                                            Profit for the period                                 18% ?

Compu-Clearing Outsourcing Limited | "Compu-Clearing", "The Company" or "The Group" | Incorporated in the Republic of South Africa | Registration number 1998/015541/06 | JSE Share code : CCL | ISIN ZAE 000016564 | Listed on the JSE Limited
   STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME                                                                         STATEMENT OF FINANCIAL POSITION                                             Changes in accounting policies
                                                              6 m onths ended           Year ended                                                           31 Decem ber     31 December        30 June          The Group adopted the new, revised or amended accounting pronouncements as issued by
                                                       31 Decem ber     31 December        30 June                                                               2013             2012            2013            the IASB, which were effective and applicable to the Group from 1 July 2013.
                                                % Inc.     2013             2012            2013                                                              [Review ed]      [Review ed]      [Audited]
                                                        [Review ed]      [Restated]      [Restated]                                                                                                               IFRS 10 Consolidated Financial Statements
                                                                                                                                                                R'000            R'000           R'000
                                                           R'000          R'000           R'000                                                                                                                   IFRS 10 establishes principles for the presentation and preparation of consolidated financial
                                                                                                       ASSETS
                                                                                                                                                                                                                  statements when an entity controls one or more other entities. The Group has revised its
                                                                                                       Non current assets                                         29,733           23,885           28,657
Rental and other revenue                             8       35,599          32,866          66,733                                                                                                               accounting policies on the consolidation of subsidiaries and concluded that the adoption of
                                                                                                        Property, plant and equipment                             25,955           22,116           26,398
Operating costs                                             (26,741)        (26,294)        (54,043)                                                                                                              IFRS 10 did not result in any material change in the consolidation of the Group.
                                                                                                        Intangible asset                                           3,561            1,711            1,590
- Distribution                                              (19,608)        (19,290)        (39,073)    Deferred taxation asset                                      217               58              669        IFRS 13: Fair value measurement
- Administration                                             (5,796)         (6,845)        (14,530)   Current assets                                             25,015           24,670           32,768        IFRS 13 aims to improve consistency and reduce complexity by providing a precise definition
- Other                                                      (1,337)           (159)           (440)    Inventory                                                       -              30               23        of fair value and a single source of fair value measurement and disclosure requirements for
Operating profit                                    35        8,858           6,572          12,690
                                                                                                        Trade and other receivables                                9,266            8,612            9,800        use across IFRS. IFRS 13 was adopted and applied prospectively and it was assessed that
                                                                                                        Taxation receivable                                          753            1,556              477        the adoption did not result in any material impact on the financial results of the Group. The
Finance income                                                  510             476           1,000
                                                                                                        Cash and cash equivalents                                 14,996           14,472           22,468        face value of the financial instruments presented approximates the fair value.
Profit before income tax                            33         9,368          7,048          13,690
Income tax - normal and deferred                              (3,029)        (1,698)         (3,559)   Total assets                                               54,748           48,555           61,425        IAS 19 Employee benefits
                                                                                                       EQUITY AND LIABILITIES                                                                                     As a result of IAS 19 (2011), the Group has changed its accounting policy with respect to the
Profit for the period                               18        6,339           5,350          10,131
                                                                                                       Equity                                                     47,128           43,379           53,262        basis for determining the income or expense related to the defined benefit medical obligation.
Other comprehensive income for the
                                                                   -              634         5,085     Share capital and premium                                  2,576            2,120            2,696
period                                                                                                                                                                                                            Under IAS 19 (2011), the Group determines the net interest expense for the period on the net
                                                                                                        Treasury shares                                                 -            (330)            (265)
Total comprehensive income for the                                                                                                                                                                                defined benefit liability by applying the discount rate used to measure the defined benefit
                                                                                                        Distributable reserves                                    44,552           41,589           50,831        obligation at the beginning of the annual period to the net defined benefit liability at the begin-
period                                                        6,339           5,984          15,216
                                                                                                       Non-current liabilities                                     3,074            1,351            2,687        ning of the annual period, taking into account any changes in the net defined benefit liability
Earnings per share [cents]                                                                              Post retirement medical obligations                          414              451              433        during the period as a result of contributions and benefit payments. Consequently, the net
Basic                                              17           15.1           12.9             24.3    Deferred taxation liability                                2,660              900            2,254        interest on the net defined benefit liability now comprises:
Diluted                                            19           15.1           12.7             24.3   Current liabilities                                         4,546            3,825            5,476
Headline earnings per share [cents]                                                                     Trade and other payables                                   3,777            3,825            5,476        •interest cost on the defined benefit obligation;
Basic                                              17          15.1            12.9            26.0     Income tax payable                                           769                 -                -       •interest income on plan assets; and
Diluted                                            18          15.1            12.7            26.0                                                                                                               •interest on the effect on the asset ceiling.
                                                                                                       Total liabilities                                            7,620           5,176            8,163
Actual number of shares in issue ['000]                      42,061          41,537          42,022
Weighted average number of shares in issue ['000]            42,048          41,531          41,710                                                                                                               In addition the movements in the defined benefit plan are now shown in other comprehensive
                                                                                                       Total equity and liabilities                               54,748           48,555           61,425
Diluted weighted average number of shares in issue           42,048          42,045          41,710                                                                                                               income and not in profit or loss.
Gross ordinary dividend per share declared[cents]                 -               -            30.0    Net asset value per share [cents]                            112.0           104.4            126.7
                                                                                                                                                                                                                  The effect on the statement of profit or loss and other comprehensive income is as follows:
Gross ordinary dividend per share paid [cents]                 30.0            25.0            25.0    Net tangible asset value per share [cents]                   103.6           100.3            123.0
                                                                                                                                                                                                                                                                                          31         31               30
                                                                                                                                      STATEMENT OF CHANGES IN EQUITY                                                                                                                  Decem ber December             June
                           RECONCILIATION OF HEADLINE EARNINGS                                                                                                      6 m onths ended            Year ended
                                                                                                                                                                                                                                                                                        2013        2012             2013
                                                              6 m onths ended           Year ended                                                                                                                                                                                   [Review ed] [Restated]       [Restated]
                                                                                                                                                             31 Decem ber     31 December        30 June
                                                       31 Decem ber     31 December        30 June                                                               2013             2012            2013
                                                % Inc.     2013             2012            2013                                                              [Review ed]      [Review ed]      [Audited]
                                                        [Review ed]      [Restated]      [Restated]
                                                                                                                                                                                                                   Profit for the period:
                                                                                                                                                                 R'000            R'000           R'000
                                                           R'000          R'000           R'000                                                                                                                    Overall decrease in profit for the period                                   -       (634)           (691)
                                                                                                       Balance at beginning of period                               53,262          47,695          47,695
Profit for the period attributable to ordinary                                                         Proceeds of share issues                                        145               78            723         Overall increase in other comprehensive income for the period               -        634             691
                                                              6,339            5,350          10,131
shareholders                                                                                           Total comprehensive income for the period                     6,339            5,984         15,216         Overall impact on total comprehensive income for the period                 -              -                -
Adjusted for :                                                                                         Share-based payment reserve movement                              -                6             12        The change in accounting policy has had no material impact on the statement of financial
Loss on disposal of property, plant and equipment                 8               9           1,009    Dividends paid                                             (12,618)         (10,384)        (10,384)       position. The movement in post retirement medical obligations no longer has a material impact
Taxation effect                                                  (2)             (3)           (283)   Balance at end of period                                     47,128          43,379          53,262        on the statement of cash flows. The movement previously reported for 30 June 2013 and
Headline earnings                                             6,345           5,356          10,857
                                                                                                                                        STATEMENT OF CASH FLOWS                                                   31 December 2012 was R0,9million.
                                                                                                                                                                    6 m onths ended            Year ended         The basic and diluted earnings per share for the year ended 30 June 2013, previously re-
                                      SEGMENTAL REPORT                                                                                                       31 Decem ber     31 December         30 June         ported as 25.9 cents, has moved to 24.3 cents. The basic and diluted earnings per share for
                                                              6 m onths ended           Year ended                                                               2013             2012             2013           the six months ended 31 December 2012, previously reported as 14.4 cents and 14.2 cents
                                                       31 Decem ber     31 December        30 June                                                            [Review ed]      [Restated]       [Restated]
                                                % Inc.     2013             2012            2013
                                                                                                                                                                                                                  have moved to 12.9 and 12.7 cents respectively.
                                                                                                                                                                 R'000           R'000             R'000
                                                        [Review ed]      [Restated]      [Restated]    Profit before income tax                                      9,368           7,048           13,690       Headline earnings and diluted headline earnings per share for the year ended 30 June 2013,
                                                           R'000           R'000            R'000      Adjusted for:                                                 1,390           1,249            3,468       previously reported as 27.7 cents, has moved to 26.0 cents. Headline and diluted headline
Revenue                                                                                                Non cash items                                                1,900           1,725            4,468       earnings per share for the six months ended 31 December 2012, previously reported as 14.4
Software rental                                      9       27,426          25,274           51,063   Net finance income                                             (510)           (476)          (1,000)      cents and 14.2 cents have moved to 12.9 and 12.7 cents respectively.
Hardware rental                                      3        5,720           5,529           11,310
CargoWise One                                       25        1,772           1,417            2,919   Cash generated by trading operations                        10,758            8,297           17,158       We have assessed the impact of all other new standards that are currently effective and these
Headoffice                                           5          681             646            1,441   (Decrease) increase in post retirement medical                                                             standards have no material impact on the results of the Group.
Total revenue from external sources                  8       35,599          32,866          66,733    obligations                                                    (19)             (38)              24
                                                                                                       Increase in working capital                                 (1,142)            (668)            (198)      Distributions to shareholders
Segment profit/(loss)                                                                                  Cash generated by operations                                 9,597            7,591           16,984       Compu-Clearing has a policy of paying a dividend at year end. As a result, the company has
Software rental                                              13,367          11,119           24,672   Net finance income                                             510              476            1,000       not declared an interim dividend.
Hardware rental                                               1,847           1,916            1,803   Income tax paid                                             (1,679)          (2,270)          (3,786)
CargoWise One                                                   687             630            1,030   Dividends paid                                             (12,618)         (10,384)         (10,384)      Reviewed report
Headoffice                                                   (6,533)         (6,617)        (13,815)   Cash (outflow)/inflow from operating                                                                       The condensed consolidated interim financial statements of Compu-Clearing Outsourcing
Profit before income tax                            33        9,368            7,048          13,690   activities                                                   (4,190)          (4,587)           3,814
                                                                                                                                                                                                                  Limited for the six months ended 31 December 2013 have been reviewed by the company’s
                                                                                                       Cash outflow from investing activities                       (3,427)          (1,362)          (2,412)
                                                                                                                                                                                                                  auditor, KPMG Inc. In their reviewed report dated 10 March 2014, which is available for
Segment Assets                                                                                                                                                                                                    inspection at the Company’s Registered Office. KPMG Inc state that their review was con-
Software rental                                              14,114          10,867           12,126   Acquisition of property, plant and equipment                 (1,135)          (1,092)          (1,998)     ducted in accordance with the International Standard on Review Engagements 2410, Review
Hardware rental                                               7,253           8,934            7,441   Acquisition of intangible asset                              (2,313)            (300)            (472)     of Interim Information Performed by the Independent Auditor of the Entity, and have expressed
CargoWise One                                                   423             779              852   Proceeds on disposal of property, plant                                                                    an unmodified conclusion on the condensed consolidated interim financial statements.
Headoffice                                                   32,958          27,975           41,006   and equipment                                                     21              30                  58
Total assets                                                 54,748          48,555           61,425   Cash generated by financing activities                           145              78                 723   Changes to the board of directors
                                                                                                       Proceeds from the issue of shares                                  -              78                 465   Shareholders are referred to the announcement published on SENS on Tuesday, 11 March
Segment Liabilities                                                                                                                                                                                               2014, wherein it was announced that Mr Costas Efthymiades has stepped down as Group
Software rental                                                 206             120             693    Proceeds from the sale of treasury shares                        145               -                 258
                                                                                                                                                                                                                  Financial Director from the Board and that Mr Jonathan Davis has been appointed in his
Hardware rental                                                  87             150             241    (Decrease) increase in cash and cash equivalents             (7,472)          (5,871)           2,125      stead.
CargoWise One                                                   955             625             540    Cash and cash equivalents at the beginning of the
Headoffice                                                    6,372           4,281           6,689    period                                                      22,468           20,343           20,343       The effective date of both changes is 11 March 2014.
Total liabilities                                             7,620           5,176           8,163    Cash and cash equivalents at the end of the period          14,996           14,472           22,468
                                                                                                                                                                                                                  Related party transactions
                                                                                                                                                                                                                  There has been no significant change in related party relationships since the previous year.
                                                                                                                                                                                                                  Other than in the normal course of business, there have been no significant transactions
Commentary                                                                                                                                                                                                        during the year with related parties.
Compu-Clearing is South Africa’s market leader in the provision of IT services and products to         marketing efforts and continued development of new functionality in existing products. Man-                Significant transactions
the customs clearing and freight forwarding industries.                                                agement continue to monitor costs and maintain operating margins at acceptable levels.
                                                                                                                                                                                                                  No material events or circumstances have occurred subsequent to the period end.
The Group’s core revenue is transaction-based and directly linked to customer import and               Basis of preparation
export volumes. Other revenue segments comprise hardware rental and the distribution of a              The condensed consolidated interim financial statements for the six months ended 31 Decem-
                                                                                                                                                                                                                  For and on behalf of the Board
globally leading third party freight management solution, CargoWise One (formerly                      ber 2013 have been prepared and presented in accordance with the requirements of
ediEnterprise).                                                                                        International Financial Reporting Standard IAS 34 Interim Financial Reporting, the SAICA                   Johannesburg                                A. Garber                                J. du Preez
                                                                                                       Financial Reporting Guides as issued by the Accounting Practices Committee, Financial                      10 March 2014                              (Chairman)                              (Chief Executive)
For the six months to 31 December 2013 Group revenue grew by 8% to R35,6 million                       Pronouncements as issued by the Financial Reporting Standards Council, the Listings
(2012 – R32,9 million). This was driven by a 9% growth in the software rental segment and a            Requirements of the JSE Limited and the South African Companies Act, No 71 of 2008, as                     Executive directors: A. Garber, J. du Preez, M. Acosta-Alarcon, C. Efthymiades
25% growth in the CargoWise One segment, which although off a small base is making good                amended.
progress by adding new clients.                                                                                                                                                                                   Independent non-executive directors : A. Katz, Dr. T. Mogale
                                                                                                       In preparing these condensed consolidated interim financial statements, management makes                   Non-executive directors : D. Cleasby, M. Lutrin, G. McMahon
A pleasing 35% growth in operating profit was achieved. This was a result of reasonable                use of judgements, estimates and assumptions that affect the application of accounting
revenue growth combined with excellent operating costs control.                                                                                                                                                   Prepared by: J Davis B Acc CA(SA) under the supervision of the financial director
                                                                                                       policies and the reported amounts of assets and liabilities, income and expense.
                                                                                                                                                                                                                  email:jonathan@compuclearing.za.com
Cash flow for the period remained robust with cash generated by operations up 26% to R9,6              Actual results may differ from these estimates.
million (2012 – R7,6 million).                                                                                                                                                                                    14 March 2014
                                                                                                       The significant judgements made by management in applying the Group's accounting policies
The period saw the commencement of a project to entrench and enhance Compu-Clearing’s                  and the key sources of estimation uncertainty were the same as those that applied to the                   Transfer secretaries:                                                            Registered office:
position as a market leader. The first phase of the Group’s new flagship product                       consolidated financial statements as at and for the year ended 30 June 2013.                               Computershare Investor Services Proprietary Limited                              7 Drome Road
Compusolutions Diamond (?Diamond?), has already met with an enthusiastic response.                                                                                                                                Ground Floor                                                                     Lyndhurst, 2192
Development costs amounting to R1,2 million (2012—RNil) attributable to this project have              The accounting policies applied in the presentation of the condensed consolidated interim                  70 Marshall Street                                                               PO Box 890856
been capitalised to intangible assets and will be amortised against the related revenue flows.         financial statements, which comply with International Financial Reporting Standards, are                   Johannesburg, 2001                                                               Lyndhurst, 2106
Revenue flows from Diamond will commence in the second half of this financial year.                    consistent with those applied for the year ended 30 June 2013, except for new standards and
                                                                                                       interpretations that became effective on 1 July 2013. The condensed consolidated interim
Prospects                                                                                              financial statements have been presented on the historical cost basis and are presented in
The CargoWise One segment continues to grow with further implementations expected to go                Rand rounded to the nearest thousand, which is the Group`s functional and presentation
live in the second half of the 2014 financial year, which will drive further growth within the         currency.
segment.
                                                                                                       This interim report should be read in conjunction with the financial statements for the year                Sponser: Sasfin Capital
The Group will seek further market penetration through the release of Diamond, intensified             ended 30 June 2013.                                                                                        (a division of Sasfin Bank Limited)


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