DIGICORE HOLDINGS LIMITED - Provisional summary audited consolidated financial statements for the year ended 30 June 2015

Release Date: 30/09/2015 16:45
Code(s): DGC
 
Wrap Text
Provisional summary audited consolidated financial statements for the year ended 30 June 2015

Digicore Holdings Ltd
Co. Reg. No: 1998/012601/06, JSE code: DGC ISIN: ZAE000016945
(DigiCore or “the company” or “the group”)

Provisional summary audited consolidated financial statements
for the year ended 30 June 2015

Always Visible

Revenue down 4%
EBITDA up 73%
EPS up 1144%

Consolidated Statements of Financial Position
at 30 June 2015 
                                                         30 Jun 15    30 Jun 14  
                                                Notes        R’000        R’000 
ASSETS                                                                          
Non-current assets                                         497 082      473 974 
Property, plant and equipment                       2      161 866      137 619 
Goodwill                                            3      175 720      178 332 
Intangible assets                                          114 207      101 671 
Investments in associates                           4            -       11 002 
Deferred tax                                                45 289       45 350 
Current assets                                             319 926      286 386 
Inventories                                                 57 473       77 716 
Current tax receivable                                       2 216        6 883 
Trade and other receivables                                163 958      182 520 
Other financial assets                              5       20 020            -  
Cash and cash equivalents                                   76 259       19 267 
Total assets                                               817 008      760 360 
EQUITY AND LIABILITIES                                                          
Equity attributable to equity holders of parent            644 763      565 978 
Share capital and premium                           6      168 411      166 324 
Foreign currency translation reserve                         7 116       14 755 
Share-based payment reserve                                 14 214       12 661 
Retained income                                            455 022      372 238 
Non-controlling interest                            7       (1 308)      (2 505) 
Non-current liabilities                                     18 119       26 466 
Other financial liabilities                         8        9 710       14 135 
Finance lease liabilities                                    7 232        7 990 
Deferred tax                                                 1 177        4 341 
Current liabilities                                        155 434      170 421 
Other financial liabilities                         8        3 492       18 235 
Current tax payable                                          2 310        5 920 
Finance lease liabilities                                    9 853        9 837 
Trade and other payables                                    56 738       83 332 
Deferred income                                             16 655          355 
Provisions                                                   1 578        3 019 
Bank overdraft                                              64 808       49 723 
Total equity and liabilities                               817 008      760 360 


Consolidated Statements of Profit and Loss and Other Comprehensive Income 
for the year ended 30 June 2015 
                                                                                         Year-ended             Year-ended
                                                                                          30 Jun 15         %    30 Jun 14  
                                                                                 Notes        R’000    growth        R’000 
Revenue                                                                                     858 527        (4)     891 943 
Cost of sales                                                                              (266 136)      (18)    (325 189) 
Gross profit                                                                                592 391         5      566 754 
Other income                                                                                 82 641                 41 786 
Selling and administrative expenses                                                        (504 579)              (510 050) 
Earnings before interest, impairments, taxation, depreciation and amortisation              170 453        73       98 490 
Depreciation and amortisation                                                               (75 192)               (77 878) 
Impairment of rental stock                                                                   (2 003)                (4 315) 
Impairment of intangible assets                                                                (508)                     -    
Operating Profit before Financing Activities                                                 92 750       469       16 297 
Investment revenue                                                                               79                  3 643 
Finance costs                                                                               (11 076)               (14 345) 
Net finance costs                                                                           (10 997)               (10 702) 
Income from equity-accounted investments                                                      4 956                  3 064 
Profit before taxation                                                                       86 709       901        8 659 
Taxation                                                                                      1 201      (239)        (864) 
Profit after tax                                                                             87 910     1 028        7 795 
Other comprehensive income:                                                                                                
Exchange differences on translating foreign operations - reclassifiable                      (7 641)               (28 427) 
Total comprehensive income for the year                                                      80 269      (489)     (20 632) 
Profit attributable to:  
Owners of the parent                                                                         87 744     1 147        7 036 
Non-controlling interest                                                                        166                    759 
                                                                                             87 910                  7 795 
Total comprehensive income for the year                                                                                 
Attributable to:                                                                                                          
Owners of the parent                                                                         80 103      (474)     (21 391) 
Non-controlling interest                                                                        166                    759 
                                                                                             80 269                (20 632) 
Earnings per share                                                                   9                                    
Earnings per share (cents)                                                                    36,58     1 144         2,94 
Diluted earnings per share (cents)                                                            32,42     1 046         2,83 


Consolidated Statements of Changes in Equity 
for the year ended 30 June 2015 
                                                                                                  30 Jun 15    30 Jun 14  
                                                                                         Notes        R’000        R’000 
Share capital and premium                                                                                                
Share capital and premium at the beginning of the year                                              166 324      166 324 
Issue of shares during the year                                                              6        2 036            - 
Share options exercised                                                                                  51            - 
Share capital and premium at the end of the year                                                    168 411      166 324 
Reserves                                                                                                                 
Foreign currency translation reserve                                                                                     
Balance at the beginning of the year                                                                 14 755       43 182 
Translation differences for the year                                                                 (7 641)     (28 427) 
Balance at the end of the year                                                                        7 114       14 755 
Share-based payment reserve                                                                               
Balance at the beginning of the year                                                                 12 661       10 935 
Share-based payment cost for the year                                                                 2 875        1 726 
Share options exercised                                                                                 (51)           - 
Share options cancelled                                                                              (1 271)           - 
Balance at the end of the year                                                                       14 214       12 661 
Total reserves                                                                                       21 328       27 416 
Retained income                                                                                                          
Retained income at the beginning of the year                                                        372 238      359 794 
Profit for the year                                                                                  87 744        7 036 
Dividends paid                                                                                            -            - 
Share options cancelled                                                                               1 271            - 
Acquisition of remaining 49% shares in Alchemist House Proprietary Limited                   7       (5 814)           - 
Acquisition of remaining 2% in Integrated Fare Collection Services Proprietary Limited       7         (417)           - 
Buyback of shares in DigiCore Fleet Management SA Proprietary Limited                                     -        5 408 
Retained income at the end of the year                                                              455 022      372 238 
Non-controlling interest                                                                                                 
Balance at the beginning of the year                                                                 (2 505)      15 757 
Profit for the year                                                                                     166          759 
Acquisition of remaining 49% shares in Alchemist House Proprietary Limited                   7        1 064            - 
Acquisition of remaining 2% in Integrated Fare Collection Services Proprietary Limited       7          (33)           - 
Buyback of shares in DigiCore Fleet Management SA Proprietary Limited                                     -      (19 021) 
Balance at the end of the year                                                                       (1 308)      (2 505) 


Consolidated Statements of Cash Flows
for the year ended 30 June 2015 
                                                                                         30 Jun 15    30 Jun 14  
                                                                                Notes        R’000        R’000 
Cash flows from operating activities                                                                            
Cash generated from operations                                                             140 076      161 793 
Interest income                                                                                 79        3 643 
Finance costs                                                                              (11 076)     (14 345) 
Tax paid                                                                                    (3 100)      (2 125)                                                                                                               
Net cash from operating activities                                                         125 979      148 966 
Cash flows from investing activities                                                                            
Purchase of property, plant and equipment                                                  (70 271)     (65 005) 
Proceeds on sale of property, plant and equipment                                            6 371        9 169 
Purchase of intangible assets                                                              (38 195)     (36 509) 
Proceeds on sale of shares in TPL Trakker Limited                                   4       51 911            - 
Net cash from investing activities                                                         (50 184)     (92 345) 
Cash flows from financing activities                                                                            
Repayment of other financial liabilities                                            8      (19 168)     (53 705) 
Finance lease payments                                                                     (11 769)     (16 688) 
Payment to Non-controlling shareholders of Alchemist House Proprietary                              
Limited for remaining 49% shareholding                                              7       (2 714)           - 
Payment to Non-controlling shareholders of Integrated Fare Collections                                
Services Proprietary Limited for remaining 2% shareholding                          7         (450)           - 
Buyback of shares in DigiCore Fleet Management SA Proprietary Limited                            -       (9 706) 
Dividends paid                                                                                   -            - 
Net cash from financing activities                                                         (34 101)     (80 099) 
Total cash movement for the year                                                            41 694      (23 478) 
Cash and cash equivalents at the beginning of the year                                     (30 456)      (9 511) 
Effect of exchange rate movements on cash balances                                             213        2 533 
Total cash and cash equivalents at the end of the year                                      11 451      (30 456) 


Consolidated Segmental Analysis 
for the year ended 30 June 2015
                                           30 Jun 15     30 Jun 14 
                                               R’000         R’000 
Total segment revenue                                              
SA distribution                              513 833       488 673 
External revenue                             524 220       522 735 
Internal segment revenue                     (10 387)      (34 062)
Foreign distribution                         296 637       297 063 
External revenue                             296 637       297 063 
Internal segment revenue                           -             -   
Product development and manufacturing       (115 336)      (57 974)
External revenue                              26 204        65 698 
Internal segment revenue                    (141 540)     (123 672)
Group services                                 1 137       (12 506)
External revenue                              11 466         6 447 
Internal segment revenue                     (10 329)      (18 953)
Total external revenue                       858 527       891 943 
Eliminations                                 162 256       176 687 
                                           1 020 783     1 068 630 
Profit/(loss) before taxation                                      
SA distribution                               14 509       (42 624)
Foreign distribution                          14 388        24 918 
Product development and manufacturing        (11 763)       50 200 
Group services                                70 065       (23 835)
                                              87 199         8 659
Eliminations                                    (490)            -
Total profit/(loss) before taxation           86 709         8 659 
Segment assets                                                     
SA distribution                              468 266     2 223 343 
Foreign distribution                         366 426       297 063 
Product development and manufacturing        241 556       857 192 
Group services                               637 025     1 265 862 
                                           1 713 273     4 643 460 
Eliminations                                (896 265)   (3 883 100)
Total assets                                 817 008       760 360 
Segment liabilities                                                
SA distribution                             (134 079)   (1 850 175)
Foreign distribution                        (226 696)     (285 038)
Product development and manufacturing        (27 184)     (620 977)
Group services                              (264 275)     (980 728)
                                            (652 234)   (3 736 918)
Eliminations                                 478 681     3 540 031 
Total liabilities                           (173 553)     (196 887)                      


Notes to the consolidated financial statements

1. Basis of preparation and presentation of financial statements
   The consolidated financial statements are prepared in accordance with the framework concepts and the
   measurement and recognition requirements of International Financial Reporting Standards (IFRS) and contain the information
   required by IAS 34 Interim Financial Reporting as well as the SAICA Financial Reporting Guides as issued by the Accounting
   Practices Committee, the JSE Limited Listings Requirements, and the requirements of the Companies Act, Act 71 of 2008, as
   amended.

   The accounting policies are in terms of IFRS and are consistent with those of the consolidated annual financial
   statements at 30 June 2015 as issued on 30 September 2015. The accounting policies are supported by reasonable and prudent
   judgments and estimates.

   The board has approved the financial statements which have been summarised for purposes of this report. The
   financial statements were internally compiled by Mr PJ Grové CA(SA), the group chief financial officer and Mr V Venkatkumar
   CA(SA), the group financial manager.

   Any reference to future financial performance included in this announcement, the commentary within the corporate
   governance, sustainability and corporate profile headings and the financial and operation commentary have not been audited
   by our auditors.
   
   Audit opinion
   The auditors, Mazars (Gauteng) Inc., have issued their unmodified opinion on the group’s annual financial statements
   for the year ended 30 June 2015. A copy of the auditor’s report together with a copy of the audited financial
   statements are available for inspection at the company’s registered office. 

   These consolidated financial statements have been derived from the group’s annual financial statements. The contents 
   of this announcement are extracted from audited information, although the announcement is not itself audited. The 
   directors take full responsibility for the preparation of the consolidated report and the
   financial information has been correctly extracted from the underlying annual financial statements.

   The auditor’s report does not necessarily report on all the information contained in this announcement. Shareholders
   are therefore advised that, in order to obtain a full understanding of the nature of the auditor’s engagement, they
   should obtain a copy of the auditor’s report together with the accompanying financial information from the company’s
   registered office.
   
2. Property, plant and equipment
   The Group has invested R65,1 million into rental assets for the year ended 30 June 2015 (2014: R59,4 million).
   Depreciation for the year ended 30 June 2015 on rental units amounts to R41,4 million (2014: R41,1 million).

3. Goodwill
   The goodwill amount per the statement of financial position is reconciled as follows:

                                                    R’000    
   Cost                                           235 832  
   Accumulated impairments                        (57 500) 
   Carrying value at 30 June 2014                 178 332  
   Foreign exchange movements                      (2 612)  
   Carrying value at 30 June 2015                 175 720  
   Cost at 30 June 2015                           233 220  
   Accumulated impairments at 30 June 2015        (57 500) 

4. Investments in associates
   TPL Trakker Limited
   During the year, the Group sold 45 629 000 shares or 81,23% of its shareholding in TPL Trakker Limited, an associate
   company of the Group incorporated in Pakistan, for an amount equivalent to R51 910 842. The Group previously held
   25,86% of the issued share capital of TPL Trakker Limited and subsequent to this transaction, the Group’s shareholding in the
   company amounts to 4,85%. 

   The Group recognised a profit on the sale of the shares of R35 414 339 and the profit is included in other income in
   the statement of profit and loss and other comprehensive income.

   The Group has classified the remaining interest in TPL Trakker Limited as a financial asset designated at fair value
   through profit and loss. Refer to the other financial assets note.

   Mega Fortris Ctrack Solutions Sdn Bhd
   During the year under review the Group sold its entire 30% shareholding in Mega Fortris Ctrack Solutions Sdn Bhd,
   the Group’s associate company incorporated in Malaysia, for an amount equivalent to R3. The Group recognised a loss on the
   sale of the shares of R99 341 and this is included in sales and administrative expenses in the statement of profit and
   loss and other comprehensive income.

5. Other financial assets
   The remaining investment in TPL Trakker Limited is designated at fair value through profit and loss because the
   investment is managed on a fair value basis and TPL Trakker is listed on the Karachi Stock Exchange and the company’s share
   price can be actively monitored. The Group also intends to sell the remaining shares within the next 12 months.

   At 30 June 2015 the Group owned 10 545 689 (2014: 56 174 689) shares in the company. The investment was classified
   as an investment in associate in 2014 and with the sale of shares, the Group has reclassified the investment due to the
   loss of significant influence. 

   The closing share price on 30 June 2015 was 15,86 Pakistan Rupees (PKR). Using the spot rate of PKR0.1197:1 at 30 June 2015, 
   the Group realised a gain of R20 020 337 on measurement to fair value. The gain is shown under other income in
   the statement of profit and loss and other comprehensive income.

6. Share capital and premium
   During the year under review the Group bought a further 49% shareholding held by the non-controlling shareholders of
   Alchemist House (Proprietary) Limited. The fair value purchase consideration was set at R4 750 000, which consisted of
   cash of R2 714 288 and 1 017 856 shares in DigiCore Holdings Limited issued at a price of R2 each. 

7. Acquisition of Non-Controlling Interest
   Alchemist House Proprietary Limited T/A Fleet Connect
   On 25 September 2014 the Group bought a further 49% shareholding held by the non-controlling shareholders of
   Alchemist House Proprietary Limited. The fair value purchase consideration was set at R4 750 000, which consisted of cash of
   R2 714 288 and 1 017 856 shares in DigiCore Holdings Limited issued at a price of R2 each. The acquisition took the
   Group’s shareholding in the company from 51% to 100%. The Group recognised an increase in non-controlling interest of 
   R1 064 915 and a decrease in retained earnings of R5 814 915.

   The following summarises the changes in the Group’s ownership interest in Alchemist House Proprietary Limited
   (amounts in R’000):

                                                              R’000 
   Group’s ownership interest at 1 July 2014                  3 350 
   Effect of increase in Group’s ownership interest          (1 064)
   Share of comprehensive income                              5 814 
   Group’s ownership interest at 30 June 2015                 8 100 

   Schedule for effects on the equity attributable to owners of the parent of change in its ownership interest in a
   subsidiary that did not result in a loss of control

                                                                       R’000   
   Non-controlling interest derecognised                              (1 064) 
   Difference between consideration paid over 
   non-controlling interest recognised in retained earnings            5 814  
                                                                       4 750   

    Non-controlling interest
    Non-controlling interest, which is a present ownership interest, entitles its holders to a proportionate share of
    the entity’s net assets in the event of liquidation, and is measured at the present ownership interest’s proportionate
    share of the acquiree’s identifiable net assets. There are no other components of non-controlling interests.

    Acquisition date fair value of consideration paid

                                                                        R’000  
    Cash                                                               (2 714) 
    Equity - 1 017 856 ordinary shares in DigiCore Holdings Limited    (2 036) 
                                                                       (4 750) 

    Equity issued as part of consideration paid
    The fair value of 1 017 856 ordinary shares issued as part of the consideration for the non-controlling interest was
    determined with reference to the closing market price of the shares at the time the acquisition was concluded.

    Integrated Fare Collection Services Proprietary Limited
    On 1 March 2015 the Group bought a further 2% shareholding held by the non-controlling shareholders of Integrated
    Fare Collection Services Proprietary Limited. The fair value purchase consideration was set at R450 000, which was paid
    in cash. The acquisition took the Group’s shareholding in the company from 98% to 100%. The Group recognised a decrease
    in non-controlling interest of R33 260 and a decrease in retained earnings of R416 740.

    The following summarises the changes in the Group’s ownership interest in Integrated Fare Collection Services
    Proprietary Limited:

                                                            R’000   
    Group’s ownership interest at 1 July 2014               5 011  
    Effect of increase in Group’s ownership interest           33     
    Share of comprehensive income                             417     
    Group’s ownership interest at 30 June 2015              5 467  

    Schedule for effects on the equity attributable to owners of the parent of change in its ownership interest in a
    subsidiary that did not result in a loss of control

                                                                 R’000 
    Non-controlling interest derecognised                           33    
    Difference between consideration paid over 
    non-controlling interest recognised in retained earnings       417   
                                                                   450   

    Non-controlling interest
    Non-controlling interest, which is a present ownership interest, entitles its holders to a proportionate share of
    the entity’s net assets in the event of liquidation, and is measured at the present ownership interest’s proportionate
    share of the acquiree’s identifiable net assets. There are no other components of non-controlling interests.

                                                                 R’000   
    Acquisition date fair value of consideration paid                    
    Cash                                                          (450)  

8.  Other financial liabilities
    The Group’s facilities of R15 million with Merchant West was settled in September 2014. The Group also repaid Absa
    Bank R4,1 million for facilities granted.

9.  Earnings per share
    Basic earnings per share are calculated by dividing the profit attributable to equity holders of the parent amount
    by the weighted average number of shares in issue. Diluted earnings per share are calculated by dividing the relevant
    earnings by the weighted average number of shares in issue after taking the dilutive impact of potential ordinary shares to
    be issued into account.

                                                                                               30 Jun 15     % growth    30 Jun 14     
    Earnings per share                                                                                                                 
    Earnings per share (cents)                                                                     36,58        1 144         2,94     
    Diluted earnings per share (cents)                                                             32,42        1 046         2,83     
    Headline earnings per share (cents)                                                            21,24          306         5,23     
    Diluted headline earnings per share (cents)                                                    18,82          273         5,04     
    Final dividend per share (cents)                                                                   -                         -        
    Earnings per share calculations                                                                                                    
    Reconciliation of weighted number of shares to be used in the                                                             
    calculation of basic and headline earnings per share ('000)                                                          
    Opening balance                                                                              239 607                   239 607  
    Weighted number of shares issued for the acquisition of                                                                   
    non-controlling interest in Alchemist House Proprietary Limited                                  218                         -        
    Weighted number of share options exercised                                                        44                         -        
                                                                                                 239 869                   239 607  
    Reconciliation of weighted number of shares to be used in the                                                             
    calculation of diluted and diluted headline earnings per share ('000)                                                         
    Weighted average number of ordinary shares in issue                                          239 869                   239 607  
    Adjusted for: potentially dilutive impact of share options                                    30 782                     9 070    
                                                                                                 270 651                   248 677  
    Reconciliation of headline earnings                                                                                                
    Profit attributable to equity holders of the parent                                           87 744                     7 036    
    Adjusted for:                                                                                                                      
    (Profit)/loss on sale of property, plant and equipment                                        (2 820)                    1 638    
    (Profit) on sale of shares in TPL Trakker Limited                                            (35 414)                        -        
    Loss on sale of investment in Mega Fortris Ctrack Solutions Sdn Bhd                               99                         -        
    Impairment of property, plant and equipment                                                    2 003                     4 315    
    Impairment of intangible assets                                                                  508                         -        
    Adjustment to income from equity-accounted associates - gain on                                                                  
    sale of property, plant and equipment                                                           (229)                        -        
    Adjustment to income from equity-accounted associates - gain on sale of associate             (1 742)                        -        
                                                                                                  50 149                    12 989   
    Tax effect on adjustments                                                                        789                      (459)    
    Non-controlling interest in adjustments                                                            -                         -        
    Basic and diluted headline earnings                                                           50 938                    12 530   


Dividend declaration
No final dividend will be declared and paid to the shareholders. The board agreed to retain cash for future growth (30
June 2014: nil).

Events after the reporting period
Shareholders are referred to the joint announcement published by Novatel Wireless, Inc. and DigiCore on 19 June 2015,
in terms of which shareholders were advised that the Group has entered into a transaction implementation agreement with
Novatel Wireless which constitutes notification to the DigiCore board of directors of a firm intention to make an offer
to acquire all the ordinary shares in the Group other than the ordinary shares held by any subsidiaries of the Group and
the ordinary shares held by the DigiCore Holdings Limited Share Trust (Excluded Shares), by way of a scheme of
arrangement (Scheme) or, if specified conditions of the scheme should not be fulfilled, to acquire all or a majority of the
ordinary shares, excluding the excluded shares, by way of a substitute offer (Substitute Offer).

Shareholders are referred to the joint announcement published by Novatel Wireless and DigiCore on 31 July 2015,
whereby shareholders were advised that a circular, setting out the terms and conditions of the scheme and the substitute
offer, and also incorporating a notice convening a general meeting of shareholders had been distributed to shareholders
(Circular). In addition, shareholders are referred to the announcements published on the SENS dated 2 and 15 September 2015
and are advised that all of the conditions precedent as set out in the circular have now been fulfilled or waived and,
accordingly, the scheme has become unconditional.

Changes to the Board of Directors
Alex Mashinsky, Michael Newman and Lance Wagner Bridges were appointed as directors of the company in order to facilitate 
the transition and change of control pursuant to the scheme of arrangement approved by the shareholders at the general 
meeting held on 2 September 2015.  
                      
Related Parties
During the year, certain subsidiaries in the ordinary course of business, entered into loans and transactions with
related parties under terms that are no less favourable than those arranged with third parties.

Corporate governance
The board of directors aspires to conduct the Group’s business with responsibility, accountability, fairness and
transparency and strives to be a good corporate citizen. 

The directors agree with the spirit and principles of corporate governance set out in the King Report on Governance in
South Africa (2009) (King III). The board is committed to applying appropriate corporate governance policies and
practices in each company in the Group.

Sustainability
Sustainability forms the cornerstone of our values and is part of our board’s mandate. The Group understands that its
business is part of the greater environment in which we live, so our actions are shaped by national and international
trends in sustainable development. DigiCore is a long-term business and this determines our actions as the Group strives
to be a responsible corporate citizen and respect the society and environment in which we operate.

The focus of the Group going forward is to balance financial growth with our focus on people, especially staff
satisfaction, while ensuring we remain committed to equal opportunity employment and stakeholder satisfaction. It underpins our
approach to attracting, retaining and developing our people. It guides our actions in the contribution we make to
preserving our environment. It drives our continued cost-effective growth.

In support of the vision and strategy on sustainability, the Group has adopted the Global Reporting Initiative
Framework (GRI) for which a report has been prepared in accordance with GRI G3.1 guidelines and transitioning 
into GRI G4. With the release of the integrated annual report 2014 in October 2014, DigiCore followed the combined 
assurance model as proposed by King III. Please refer to the website for further information on sustainability within
the Group.

Corporate profile
DigiCore is a JSE-listed group that specialises in vehicle tracking, fleet management solutions and insurance
telematics for an international client base. With almost 30 years of innovation, technical and implementation experience,
DigiCore provides advanced machine-to-machine communication and telematics solutions that add value to its global base of
customers with mobile assets.

DigiCore’s end-to-end research, design, development, manufacture, sales and support of tailored solutions for
customers is serviced by a global network of staff and team members in over 50 countries. Our technology and electronic division
designs and develops a range of asset management and monitoring systems using GPS satellite positioning, GSM cellular
communication systems and other advanced communication and sensory technologies. The result is products and solutions
ranging from basic track-and-trace with stolen vehicle response services for the consumer market to complete integrated
enterprise-level solutions for large fleet owners such as Discovery Insure, Network Rail (UK), Thames Water (UK), the South
African Police Service, eThekwini Metro, BHP Billiton (global) and many others under the Ctrack brand.

Operations span six continents with over 1 000 employees.

Commentary
It is with pleasure that the board announces a positive set of results, probably the last announcement as a JSE-listed
entity.

2015’s positive performance attracted the interest of Novatel Wireless Inc. (Novatel), a company listed on the NASDAQ
in the United States of America, which has subsequently resulted in Novatel’s offer to acquire all of the ordinary
shares in DigiCore, other than the ordinary shares held by any subsidiaries of DigiCore and the ordinary shares held by the
DigiCore Holdings Limited Share Trust for an amount of R4,40 per share, which offer became unconditional on 
Tuesday, 15 September 2015 to be executed on Monday, 5 October 2015.

In addition to the exciting prospects and opportunities resulting from the Novatel transaction, 2015 was not only a
year of DigiCore celebrating 30 years of being Always Visible, but also produced results that reconfirmed the long
anticipated turnaround of the business and saw our international business returning to profitability. The restructuring of
management, changing of strategies, policies and the enhanced systems and processes implemented in the current and prior
periods have continued to optimise the business and bear fruit reflected in the results.

From investing in our sales structures and skills across the business and identifying key focus areas in our consumer
channel, we have been able to maintain and further develop a healthy sales pipeline allowing us to leverage off a
variety of our solutions, including and not limited to:

- FleetConnect, a web-based (SaaS) asset management software which integrates fuel, maintenance and toll spend
  providing users with data enriched information to make business decisions to optimise fleet size and performance, and improve
  behaviour for safety and help drive lower maintenance costs
- Bureau service, where Ctrack customers received automated reports as well as dynamic key performance indicator
  reporting on drivers and vehicles respectively
- Insurance telematics
- Jamming detection
- Camera and navigation solutions with workforce management.

Underscoring our continued investment in technology, DigiCore’s Ctrack received the 2014 Technology Top 100 Award for
management of technology (large enterprise category), endorsed by the Department of Science and Technology in South
Africa. To further demonstrate the synergy between DigiCore and Novatel, Ctrack’s OB130 plug and play solution, which is
made up of Novatel hardware coupled with Ctrack’s superior firmware, received high accolades at the Automechanika
Innovation awards in 2015. 

Financial overview
The 2015 financial period was highlighted by the group restoring a positive cash position, the sale of a large portion 
of the TPL Trakker Limited’s shareholdings and the continued application of successful cost saving initiatives.

During the financial period, the investment in TPL Trakker Limited was reduced from 25,8% to 4,86%. 

Profit before tax for the group increased to R86,7 million compared to the R8,6 million in the prior period.

The revenue generated by the group compared to the comparative period decreased by R33,4 million. The decrease was
mainly due to a reduction in revenue relating to the international insurance telematics business and a higher conversion of 
sales into annuity contracts.

The gross profit margin increased from 63,5% to 69%. The increase was due to successful cost saving initiatives
implemented by management.

Selling and administrative expenses decreased by R5,5 million. Considering that on 1 July 2014, the general staff cost increased 
by 7%, it is evident that the cost saving initiatives implemented by the group were effective.

The results, however, include adjustments that management does not expect to be reoccurring in the future. Other
income mainly consists of R35,4 million profit on the sale of TPL Trakker Limited shares and a R20 million fair value gain on
the revaluation of the remaining TPL Trakker Limited shares.

With the continued focus to reduce inventory balances, decrease stock days, decrease receivable days and with the
proceeds from the sale of the TPL Trakker Limited shares, the group continued to generate positive cash flows ending the
year on a cash-positive position of R11,4 million after paying back R30,9 million in debt and a further R9,6 million worth of overdraft 
facilities. This demonstrates the significant improvement in collections and the effect of controls and processes implemented 
when compared to the negative cash position of R30,4 million on the prior year. 

Industry comments
DigiCore has progressed well with the requirement from medium to large fleet operators for a more information-based
services and subscription model, allowing third-party information, such as routing and scheduling, and fuel card
transactions to be incorporated into our reporting software. The integration with other systems gives operators the full status
of their operation in one report.

The scalability of our product has enabled us to develop and supply quality products at very attractive prices to
improve our market share in the competitive consumer market, while meeting insurance and safety-driven needs.

In addition, as we support customers with “big data” analysis services, we will strengthen our competitiveness in
corporate and insurance channels.

We have developed a driver behaviour and risk rating programme with the support of the University of Pretoria. This
furthers our reputation in insurance telematics technology and enhances our product offering for insurance houses
internationally. 

Outlook
After optimising our business in the 2014 financial year and stepping up sales resources and skills over the financial
year, we are on track and continue with our growth phase.

Systems, controls and strategies to manage stock, debtors and cash flow more effectively are in place, allowing the
management team to focus externally on relationships, sales and marketing and to identify new opportunities for growth.

With the imminent take over by Novatel, we are excited about the new opportunities that await us, growing our global
footprint and enhancing our product offering ensuring that we supply a superior end-to-end solution to our clients. The
last date to trade was Friday, 25 September 2015 and the termination of listing of the DigiCore shares from the JSE shall
take place at the commencement of trade on Tuesday, 6 October 2015. 

With the delisting of the DigiCore shares from the JSE’s main board, these results will be the last set presented to
the public. The directors and management would like to take this opportunity to thank all stakeholders for their ongoing
support over the last 30 years. We want to thank our loyal customers, suppliers, investors, the non-executive board
members and our staff members for their support over the 30 years and trust we will continue to supply world-class products
and remain on our growth path as planned.

For and on behalf of the board
NH Vlok                                  PJ Grove
Chief executive officer                  Chief financial officer

30 September 2015 
Centurion

Registered office
DigiCore Building, Regency Office Park, 9 Regency Drive, Route 21 Corporate Park, Irene Ext 30, Centurion, South Africa
PO Box 68270, Highveld Park, 0169, Tel: +27 (0)12 450 2222 Fax: +27 (0)12 450 2497

Transfer secretaries
Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg, 2001, PO Box 61051,
Marshalltown, 2107

Sponsor
PSG Capital Proprietary Limited

Auditors
Mazars (Gauteng) Incorporated

Executives
NH Vlok (chief executive officer), PJ Grové (chief financial officer), A Mashinsky, M Newman, LW Bridges

Non-executive
G Pretorius* (chairman), B Marx*, SP Naudé*, SS Ntsaluba*, JP duP le Roux 
*Independent non-executive director

Company secretary
N Bofilatos

www.Digicore.com 
www.ctrack.co.za
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