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COMPU-CLEARING OUTSOURCING LIMITED - Consolidated financial statements for year ended June 2014 and dividend declaration

Release Date: 09/09/2014 16:00
Code(s): CCL     PDF:  
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Consolidated financial statements for year ended June 2014 and dividend declaration

Compu-Clearing Outsourcing Limited
Registration number: 1998/015541/06
JSE share code: CCL ISIN: ZAE000016564


PRELIMINARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014 AND CASH DIVIDEND DECLARATION

REVENUE UP 8%

OPERATING PROFIT UP 38%

PROFIT FOR THE YEAR UP 24%

CASH GENERATED BY OPERATIONS UP 26%

HEADLINE EARNINGS PER SHARE UP 15%

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
                                                                  30 June       30 June
                                                            %        2014          2013
                                                           Inc./               [Audited &
All figures in R'000                                       Dec.  [Reviewed]     restated] 
Rental and other revenue                                    8        71 968        66 733
Operating costs                                             1       (54 488)      (54 043)
 - Distribution                                                     (38 503)      (39 073)
 - Administration                                                   (15 324)      (14 530)
 - Other                                                            (   661)      (   440)
Operating profit                                           38        17 480        12 690
Interest received                                           5         1 050         1 000
Profit before income tax                                   35        18 530        13 690
Income tax - normal and deferred                                     (5 930)       (3 559)
Profit for the year                                        24        12 600        10 131
Other comprehensive income                                            1 556         5 085
Total comprehensive income for the year attributable
to equity holders of the company                           (7)       14 156        15 216
Basic earnings per share [cents]                           23          30.0          24.3
Diluted                                                    23          30.0          24.3

Headline earnings per share [cents]
Basic                                                      15          30.0          26.0
Diluted                                                    15          30.0          26.0
Actual number of shares in issue ['000]                              42,061        42,022
Weighted average number of shares in issue ['000]                    42,055        41,710
Diluted weighted average number of shares in issue ['000]            42,055        41,710
Gross ordinary dividend per share declared[cents]                      32.0          30.0
Gross ordinary dividend per share paid [cents]                         30.0          25.0


RECONCILIATION OF HEADLINE EARNINGS

                                                                         30 June         30 June   
                                                                            2014            2013   
                                                                %                     [Audited & 
All figures in R'000                                           Inc.    [Reviewed]      Restated]
Profit for the period attributable to ordinary shareholders               12 600          10 131   
Adjusted for:
Loss on disposal of property, plant and equipment                             16           1 009
Tax effect                                                                    (4)           (283)

Headline earnings                                              16         12 612          10 857
  


SEGMENTAL REPORT

                                                                            30 June     30 June
                                                                               2014        2013
                                                                    %                [Audited &
All figures in R'000                                               Inc.  [Reviewed]   restated]

Revenue
Software rental                                                     8       55 011       51 063
Hardware rental                                                     3       11 636       11 310
CargoWise One                                                      32        3 841        2 919
Headoffice                                                          3        1 480        1 441
Total revenue from external sources                                 8       71 968       66 733

Segment profit/(loss)
Software rental                                                    14       28 055       24 672
Hardware rental                                                    50        2 706        1 803
CargoWise One                                                      48        1 527        1 030
Headoffice                                                          -      (14 808)     (14 815)
Total operating profit                                             38       17 480       12 690
  
Segment Assets
Software rental                                                             16 698       12 126
Hardware rental                                                              6 746        7 441
CargoWise One                                                                1 153          852
Headoffice                                                                  41 684       41 006
Total assets                                                                66 281       61 425

Segment Liabilities
Software rental                                                              2 105          693 
Hardware rental                                                                175          241 
CargoWise One                                                                1 484          540 
Headoffice                                                                   7 452        6 689 
Total liabilities                                                           11 216        8 163 



STATEMENT OF FINANCIAL POSITION

                                                                           30 June      30 June   
                                                                   %         2014         2013   
All figures in R'000                                              Inc.   [Reviewed]    [Audited]
ASSETS
Non current assets                                                          33 035       28 657  
   Property, plant and equipment                                            27 449       26 398  
   Intangible asset                                                          5 139        1 590  
   Deferred taxation asset                                                     447          669  
Current assets                                                              33 246       32 768  
   Inventory                                                                     -           23
   Trade and other receivables                                              11 425        9 800  
   Taxation receivable                                                         789          477  
   Cash and cash equivalents                                                21 032       22 468  
Total assets                                                                66 281       61 425  
EQUITY AND LIABILITIES
Equity                                                                      55 065       53 262  
   Share capital and premium                                                 2 696        2 696  
   Treasury shares                                                               -         (265)
   Distributable reserves                                                   52 369       50 831
Non-current liabilities                                                      3 198        2 687
   Post retirement medical obligations                                         394          433
   Deferred taxation liability                                               2 804        2 254
Current liabilities                                                          8 018        5 476
   Trade and other payables                                                  7 319        5 476
   Income tax payable                                                          699            -
Total equity and liabilities                                                66 281       61 425

 Net asset value per share [cents]                                           130.9        126.7
 Net tangible asset value per share [cents]                                  118.7        123.0


STATEMENT OF CHANGES IN EQUITY                                                               Non-                       Share-based
                                                                Share    Share     Treasury  Distributable   Retained   payment
                                                                capital  premium   shares    reserve         earnings   reserve Total
                                                                R'000    R'000     R'000     R'000            R'000     R'000   R'000
Balance at 30 June 2012 as previously reported                    419    1 630      (341)    2 813           42 413       761  47 695
Impact of change in accounting policy
on Other Comprehensive Income                                                                  108             (108)                -
Total comprehensive income for the year as restated                                          5 085           10 131             15 216
   Profit for the year as previously reported                                                                10 822             10 131
   IAS19                                                                                                       (960)              (960)
   Tax effect                                                                                                  (269)              (269)
Other Comprehensive Income as previously reported                                            4 394                               4 394
   Surplus on revaluation of property                                                        5 848                               5 848
   Tax effect                                                                               (1 454)                             (1 454)

   Transfer of post retirement actuarial gains from profit and loss                            960                                 960
   Tax effect                                                                                 (269)                               (269)
Transactions with owners recorded directly in equity
  -Transfer from revaluation surplus                                                           (45)              45                 - 
  -Sale of treasury shares                                               182      76                                              258
  -Share issued                                                  3       462                                                      465
  -Dividend paid                                                                                           (10 384)           (10 384)
Share-based payment transaction                                                                                          12        12
Balance at 30 June 2013 as restated                            422     2 274    (265)       7 961           42 097      773    53 262
Total comprehensive income for the year                                                     1 556           12 600             14 156
   Profit for the year                                                                                      12 600             12 600
   Surplus on revaluation of property                                                       2 090                               2 090
   Tax effect                                                                                (534)                               (534)
Transactions with owners recorded directly in equity
  -Sale of treasury shares                                                       265                                              265
  -Dividend paid                                                                                          (12,618)            (12,618)
Transfer from share-based payments reserve
to retained earnings                                                                                          773     (773)         -
Balance at 30 June 2014                                        422     2 274       -        9 517          42 852        -     55,065



STATEMENT OF CASH FLOWS

                                                                 30 June         30 June
                                                                    2014            2013
                                                                              [Audited &
All figures in R'000                                            Reviewed        restated]
Profit before income tax                                          18 530          13 690
Adjusted for:                                                      2 679           3 468
Non cash items                                                     3 729           4 468
Interest received                                                 (1 050)         (1 000)
Cash generated by trading operations                              21 209          17 158
(Decrease) increase in post retirement medical obligations           (39)             24
Decrease (increase) in working capital                              (241)           (198)
Cash generated by operations                                      21 411          16 984
Interest received                                                  1 050           1 000
Income tax paid                                                   (5 306)         (3 786)
Dividends paid                                                   (12 618)        (10 384)
Cash inflow from operating activities                              4 537           3 814
Cash outflow from investing activities                            (6 238)         (2 412)
Utilised to maintain operations:
Acquisition of property, plant and equipment                      (1 913)         (1 998)
Acquisition of intangible assets                                  (4 379)           (472)
Proceeds on disposal of property, plant
and equipment                                                         54              58
Cash inflow from financing activities                                265             723
Proceeds from the issue of shares                                     -              465
Proceeds from the sale of treasury shares                            265             258
(Decrease) increase in cash and cash equivalents                  (1 436)          2 125
Cash and cash equivalents at the beginning of the year            22 468          20 343
Cash and cash equivalents at the end of the year                  21 032          22 468

Commentary 
CompuClearing is South Africa’s market leader in the provision of IT services and products to the Customs Clearing and Freight Forwarding
industry, which it has proudly serviced for the past 30 years. 


The Group’s core revenue is transaction-based and directly linked to customer import and export volumes. Other revenue segments comprise
hardware rental and the   distribution of a globally leading third party freight management solution, CargoWise One. 


Group revenue for the year ended 30 June 2014 grew by 8% to R72,0 million (2013 – R66,7 million). This was driven by an 8% growth in
the software rental segment and a 32% growth in the CargoWise One segment, which although off a small base, continues to make good
progress and gain new clients. 

The consistent rate of revenue growth combined with strong cost control produced a pleasing 38% growth in operating profit. 

Cash flow for the period remained robust with cash generated by operations up 26% to R21,4 million (2013 – R17,0 million).

CompuClearing marked its 30th anniversary with the commencement of a project designed to entrench and enhance its status as a market
leader. The first phase of  the Group’s new flagship product CompuSolutions Diamond (“Diamond”) has been completed and successfully
implemented at a number of sites. Roll out of the first phase will continue in the 2015 financial year. Development of the second
phase of the project is currently  underway and is scheduled for release towards the end of the 2015 financial year. Development
costs totalling R2,5 million (2013—RNil) have been capitalised to intangible assets and will be amortised against the related
revenue flows. Initial revenue flows from Diamond commenced in the latter part of this financial year.  

Prospects 
The CargoWise One segment continues to grow with further implementations expected to go live in the new financial year.

The Group continues to invest in technology that delivers robust systems yielding fast and reliable performance. 

Management will seek further market penetration through the rollout of Diamond, intensified marketing efforts and continued
development of new functionality in existing products. Management continue to monitor costs and maintain operating margins at 
acceptable levels. 

Basis of preparation 
These preliminary condensed consolidated financial statements have been prepared in accordance with the recognition and measurement
requirements of International Financial Reporting Standards, the presentation and disclosure requirements of IAS 34 Interim 
Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, Financial Pronouncements
as issued by the Financial Reporting Standards Council, the Listings Requirements of the JSE Limited and the South African Companies
Act, No 71 of 2008, as amended. 

The accounting policies applied in the presentation of the preliminary condensed consolidated financial statements, are  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 preliminary condensed consolidated financial statements of the Group have been presented on the historical cost basis and are
presented in Rand rounded to the nearest thousand, which is the functional and presentation currency.


Changes in accounting policies
The Group adopted the new, revised or amended accounting pronouncements as issued by the IASB, which were effective and applicable
to the Group from 1 July 2013. 

IFRS 10 Consolidated Financial Statements
IFRS 10 establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one
or more other entities. The Group has revised its accounting policies on the consolidation of subsidiaries and concluded that the 
adoption of IFRS 10 did not result in any material change in the consolidation of the Group.

IFRS 13 Fair value measurement
IFRS 13 aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair
value measurement and disclosure requirements for use across IFRS. IFRS 13 was adopted and applied prospectively and it was assessed 
that the adoption did not result in any material impact on the financial results of the Group. 

IAS 19 Employee benefits 
As a result of IAS 19 (2011), the Group has changed its accounting policy with respect to the basis for determining the income or 
expense related to the defined benefit medical obligation. 

Under IAS 19 (2011), the Group determines the net interest expense for the period on the net defined benefit liability by applying the
discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit liability
at the beginning of the annual period, taking into account any changes in the net defined benefit liability during the period as a
result of contributions and benefit payments. Consequently, the net interest on the net defined benefit liability now comprises:

• interest cost on the defined benefit obligation;
• interest income on plan assets; and
• interest on the effect on the asset ceiling.

There was no significant impact on the liability due to the change in the discount rate. 

In addition, remeasurements in the defined benefit plan are now shown in other comprehensive income and not in profit or loss. 

The effect on the statement of profit or loss and other comprehensive income is as follows:

                                                                   30 June       30 June       30 June
                                                                      2014          2013          2012
                                                                                [Audited &   [Audited &
All figures in R'000                                               Reviewed      restated]    restated]
Profit for the period:
Overall decrease in profit for the period                               -         (691)         108
Overall increase in other comprehensive income for the period           -          691         (108)   
Overall impact on total comprehensive income for the period             -           -            -

The change in accounting policy has had no impact on the statement of financial position. The movement in post retirement
medical obligations no longer has a material impact on the statement of cash flows. The movement previously reported for
30 June 2013 was R1,0 million.

The basic and diluted earnings per share for the year ended 30 June 2013, previously reported as 25.9 cents, has moved 
to 24.3 cents. 

Headline earnings and diluted headline earnings per share for the year ended 30 June 2013, previously reported as 27.7 cents,
has moved to 26.0 cents. 

IAS1 Presentation of items of Other Comprehensive Income (“OCI”)
As a result of amendment to IAS1, the Group has modified the presentation of items of OCI in their statement of comprehensive
income, to present separately items that would be reclassified to profit or loss from those that would never be. 
Comparative information has been restated accordingly.

We have assessed the impact of all other new standards that are currently effective and these standards have no material impact 
on the results of the Group.

Review report 
The preliminary condensed consolidated results of Compu-Clearing Outsourcing Limited for the year ended 30 June 2014 have been
reviewed by the Company’s auditor, KPMG Inc. Their review report dated 10 September 2014 is available for inspection at the
Company’s Registered Office. KPMG Inc state that their review was conducted in accordance with the International Standard on
Review Engagements 2410, Review of Interim Information Performed by the Independent Auditor of the Entity, and have expressed
an unmodified opinion on the preliminary condensed results. 
 
Changes to the board of directors
The following changes in the board of directors took place during the year and up to the date of this report


Name                    Designation             Nature of change        Date
C.Efthymiades           Financial Director      Resignation             11 March 2014
J.Davis                 Financial Director      Appointment             11 March 2014
L. Jacobs               Chairman                Appointment             25 May 2014
M. Lutrin               Non-executive director  Resignation             24 July 2014

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 during the year with related parties. 

Significant transactions
No material events or circumstances have occurred subsequent to the year end.

Ordinary cash dividend declaration 
Notice is hereby given of the declaration of an ordinary cash dividend of 32 cents per share (2013 – 30 cents per share)
(‘the dividend’) for the year ended 30 June 2014. In accordance with the JSE Listing Requirements the following additional
information is disclosed; the dividend has been declared out of income reserves; the local dividend tax rate is 15%; the gross
local dividend amount is 32 cents per ordinary share for shareholders exempt from dividend tax; the net local dividend amount is
27.2 cents per ordinary share for shareholders liable to pay dividend tax; the Company currently has 42 021 645 shares in issue
 and the Company’s income tax reference number is 9913001716. No STC credits have been utilised. 


The following salient dates will apply to the dividend: 
 
Last date to trade `cum` the dividend                                           Friday, 17 October 2014 
Trading commences `ex` the dividend                                             Monday, 20 October 2014 
Record date                                                                     Friday, 24 October 2014 
Date of payment of the dividend                                                 Monday, 27 October 2014 

Share certificates may not be dematerialised or rematerialised during the period Monday, 20 October 2014 to Friday,
24 October 2014 both days inclusive. 

Annual General Meeting
The Annual General Meeting of CompuClearing will be held at 7 Drome Road, Lyndhurst, Johannesburg, 2192
at 14h00 on Thursday 27 November 2014. 

For and on behalf of the Board 

Johannesburg                                  L. Jacobs                               A.Garber
9 September 2014                             (Chairman)                          (Chief Executive)

Executive directors: A. Garber, J. du Preez, M. Acosta-Alarcon, J.Davis
Independent non-executive directors : L. Jacobs, A. Katz, Dr. T. Mogale 
Non-executive directors : D. Cleasby, G. McMahon 

Prepared by: J Davis B Acc CA(SA) Financial Director
email:jonathan@compuclearing.za.com
9 September 2014


Transfer secretaries:                                                           Registered office:
Computershare Investor Services Proprietary Limited                             7 Drome Road
Ground Floor                                                                    Lyndhurst, 2192
70 Marshall Street                                                              PO Box 890856
Johannesburg, 2001                                                              Lyndhurst, 2106

www.compclear.co.za

9 September 2014 
Johannesburg

Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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