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UCS GROUP LIMITED
(FORMERLY UNIVERSAL COMPUTER SERVICES (PROPRIETARY) LIMITED)
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 93/02253/06)
("UCS" OR "THE COMPANY")
ABRIDGED PROSPECTUS
(ISSUED IN TERMS OF THE LISTINGS REQUIREMENTS OF THE JOHANNESBURG STOCK
EXCHANGE ("THE JSE"))
THIS ABRIDGED PROSPECTUS IS NOT AN INVITATION TO THE PUBLIC TO SUBSCRIBE FOR
SHARES IN UCS BUT IS ISSUED IN COMPLIANCE WITH THE LISTING REQUIREMENTS OF THE
JSE FOR THE PURPOSE OF GIVING INFORMATION TO THE PUBLIC WITH REGARD TO UCS.
THE DIRECTORS OF UCS COLLECTIVELY AND INDIVIDUALLY ACCEPT FULL RESPONSIBILITY
FOR THE ACCURACY OF THE INFORMATION GIVEN AND CERTIFY THAT, TO THE BEST OF
THEIR KNOWLEDGE AND BELIEF, NO OTHER FACTS HAVE BEEN OMITTED WHICH WOULD MAKE
ANY STATEMENT HEREIN FALSE OR MISLEADING AND THAT THEY HAVE MADE ALL REASONABLE
ENQUIRIES TO ASCERTAIN SUCH FACTS.
1. NATURE OF BUSINESS
UCS AND ITS SUBSIDIARIES' ("UCS GROUP") PRINCIPAL OBJECTIVE IS TO PROVIDE
SOFTWARE SOLUTIONS AND OUTSOURCING SERVICES.
UNIVERSAL COMPUTER SERVICES (PROPRIETARY) LIMITED ("UNIVERSAL") PROVIDES
CUSTOMISED TRANSACTION PROCESSING APPLICATION SOFTWARE SOLUTIONS AND
OUTSOURCING SERVICES PRIMARILY TO MEDIUM AND LARGE ORGANISATIONS THAT OPERATE
IN THE RETAIL CHAIN STORE ENVIRONMENT. IT CURRENTLY FOCUSES ON THE FURNITURE
AND APPAREL SECTORS OF THE RETAIL MARKET. THE CURRENT PRESSURE ON MARGINS IN
THE RETAIL INDUSTRY HAS REINFORCED THE NEED FOR RELIABLE, COST-EFFECTIVE
TRANSACTION PROCESSING SOLUTIONS.
ACCSYS (PROPRIETARY) LIMITED ("ACCSYS") DESIGNS, DEVELOPS, MARKETS AND SUPPORTS
A FAMILY OF COMPUTERISED HUMAN RESOURCE MANAGEMENT SYSTEMS, NAMELY: PAYROLL,
TIME AND ATTENDANCE, INDUSTRIAL ACCESS CONTROL, PERSONNEL MANAGEMENT AND
IDENTIFICATION SECURITY CARDS. ITS SYSTEMS RUN ON A WIDE VARIETY OF HARDWARE
PLATFORMS UNDER MOST OPERATING SYSTEMS.
EASIRUN SOFTWARE (PROPRIETARY) LIMITED'S ("EASIRUN") PRIMARY FOCUS IS ON THE
PROVISION OF COBOL COMPILERS AND RUNTIMES, COBOL APPLICATION DEVELOPMENT TOOLS
AND COBOL SOLUTIONS AND SERVICES. IT IS THE LARGEST DISTRIBUTOR OF COBOL
PRODUCTS IN AFRICA, REPRESENTING MICRO FOCUS COBOL, ACUCOBOL, TRANSOFT AND RM
COBOL IN SOUTH AFRICA. IT OFFERS EXTENSIVE SUPPORT AND TRAINING ON ALL THE
PRODUCTS IT SUPPLIES. THE MAJORITY OF EASIRUN'S CLIENTS SIGN UP ON ONGOING
MAINTENANCE AND SUPPORT CONTRACTS FOR THE PRODUCTS PURCHASED.
2. PROSPECTS
THE UCS GROUP IS ANTICIPATED TO BENEFIT FROM STRONG ORGANIC GROWTH IN EACH OF
ITS OPERATING SUBSIDIARIES. THE FACTORS CONTRIBUTING TO ORGANIC GROWTH ARE
OUTLINED BELOW.
THE UCS GROUP HAS A LARGE BASE OF SKILLED AND EXPERIENCED EMPLOYEES ACROSS EACH
OF ITS OPERATING SUBSIDIARIES. IN ORDER TO ATTRACT FURTHER STAFF AND RETAIN THE
EXISTING SKILLS BASE, THE UCS GROUP LIMITED STAFF SHARE TRUST HAS BEEN
ESTABLISHED TO INCENTIVISE EMPLOYEES THROUGH DIRECT OWNERSHIP AND WEALTH
CREATION.
EACH OF UNIVERSAL, ACCSYS AND EASIRUN HAS AN ESTABLISHED REPUTATION AND
EXISTING CUSTOMER BASE IN ITS RESPECTIVE MARKET. THE GROUP IS PROACTIVE IN
CREATING NEW PRODUCTS AND SERVICES FOR ITS EXISTING CUSTOMERS AS WELL AS
POTENTIAL LOCAL AND INTERNATIONAL CUSTOMERS.
THE UCS GROUP'S ORGANIC GROWTH IS EXPECTED TO BE FURTHER ENHANCED BY EXPLOITING
THE SYNERGIES WHICH EXIST BETWEEN THE VARIOUS OPERATING SUBSIDIARIES. THESE
INCLUDE INCREASED TECHNICAL COMPETENCE FOR RESEARCH AND SOFTWARE DEVELOPMENT
AND SHARED CUSTOMERS. IN ADDITION, THE UCS GROUP WILL CONSIDER FURTHER
INVESTMENTS IN SYNERGISTIC BUSINESSES WHICH HAVE STRONG MANAGEMENT AND ARE
SOFTWARE AND SERVICE RELATED.
3. DIRECTORS
NAME ADDRESS OCCUPATION
JOHN DENISON BRIGHT 20TH FLOOR, GROUP MANAGING
TOTAL HOUSE, DIRECTOR AND
209 SMIT STREET, MANAGING DIRECTOR
BRAAMFONTEIN, 2001 OF UNIVERSAL
DUNCAN FREDERICK COLES 20TH FLOOR, DEPUTY MANAGING
TOTAL HOUSE, DIRECTOR OF
209 SMIT STREET, UNIVERSAL
BRAAMFONTEIN, 2001
RICHARD BRADLEY 157 VAN RIEBEECK AVENUE, MANAGING DIRECTOR
EDENVALE, 1610 OF ACCSYS
PATRICK STEVEN FITZGERALD KLEINFONTEIN OFFICE PARK, MANAGING DIRECTOR
18 LAKESIDE PLACE, OF EASIRUN
BENONI, 1501
ELIAS BERTRAND LEVENSTEIN 20TH FLOOR, GROUP CHAIRMAN -
TOTAL HOUSE, NON-EXECUTIVE
209 SMIT STREET,
BRAAMFONTEIN, 2001
4. SHARE CAPITAL
THE AUTHORISED AND ISSUED SHARE CAPITALS OF UCS BEFORE AND AFTER THE PLACING
ARE AS FOLLOWS: R
AUTHORISED
500 000 000 ORDINARY SHARES OF 0,5 CENTS EACH 2 500 000
ISSUED PRIOR TO THE PLACING
169 050 000 ORDINARY SHARES OF 0,5 CENTS EACH 845 250
27 270 000 ORDINARY SHARES OF 0,5 CENTS EACH TO THE
UCS GROUP LIMITED STAFF SHARE TRUST 136 350
SHARE PREMIUM 14 128 475
15 110 075
ISSUED IN TERMS OF THE PLACING
27 270 000 ORDINARY SHARES OF 0,5 CENTS EACH 136 350
SHARE PREMIUM 61 221 150
61 357 500
ISSUED AFTER THE PLACING
223 590 000 ORDINARY SHARES OF 0,5 CENTS EACH 1 117 950
SHARE PREMIUM (BEFORE THE EXPENSES OF THE PLACING AND THE
LISTING AND THE SET OFF OF GOODWILL) 75 349 625
76 467 575
UNISSUED
49 110 000 ORDINARY SHARES OF 0,5 CENTS EACH RESERVED
AS DESCRIBED BELOW 245 550
227 300 000 ORDINARY SHARES OF 0,5 CENTS EACH 1 136 500
EFFECTIVE 1 JULY 1998, 49 110 000 SHARES WERE RESERVED FOR THE VENDORS IN TERMS
OF THE EASIRUN ACQUISITION AND THE ACCSYS ACQUISITION (WHICH ACQUISITIONS ARE
MORE FULLY DESCRIBED IN THE PROSPECTUS) BEING THE MAXIMUM NUMBER OF UCS SHARES
WHICH MAY BE ALLOTTED AND ISSUED TO SUCH VENDORS AND/OR THEIR NOMINEES IN
SETTLEMENT OF THE AGGREGATE PURCHASE CONSIDERATION OF R19 571 249 IN TERMS OF
THE EASIRUN ACQUISITION AND THE ACCSYS ACQUISITION, INCLUDING R1 732 671
RELATING TO GOODWILL AND R10 890 000 RELATING TO TRADEMARKS, LESS ASSUMED
LIABILITIES OF R7 293 645. THE NUMBER OF UCS SHARES, SUBJECT TO THE MAXIMUM OF
49 110 000, TO BE ISSUED TO SATISFY THE PURCHASE CONSIDERATION IN TERMS OF THE
EASIRUN ACQUISITION AND THE ACCSYS ACQUISITION, BY 30 NOVEMBER 1999, WILL BE
DETERMINED BY A FORMULA WHICH RELATES THE SUSTAINABLE PROFITS OF UNIVERSAL TO
THE SUSTAINABLE PROFITS OF ACCSYS AND THE EASIRUN GROUP (MEANING EASIRUN AND
EASIRUN SOFTWARE II (PROPRIETARY) LIMITED AFTER THE EASIRUN ACQUISITION) FOR
THE 15 MONTH PERIOD ENDING 30 SEPTEMBER 1999.
5. PROFIT HISTORY AND FORECAST
5.1. PROFORMA PROFIT HISTORY
THE TABLE BELOW CONTAINS THE PRO FORMA RESULTS OF THE UCS GROUP FOR THE
PREVIOUS FOUR FINANCIAL YEARS ENDED 30 SEPTEMBER 1994, 1995, 1996 AND 1997 AS
EXTRACTED FROM THE REPORTING ACCOUNTANTS REPORT CONTAINED IN APPENDIX I TO THE
PROSPECTUS.
1997 1996 1995 1994
YEAR ENDED 30 SEPTEMBER R'000 R'000 R'000 R'000
TURNOVER 44 317 36 675 31 061 26 375
OPERATING INCOME
BEFORE INTEREST 6 904 4 768 3 627 2 702
NET INTEREST PAID 1 075 499 389 482
NET INCOME BEFORE TAXATION 5 829 4 269 3 238 2 220
TAXATION 2 233 1 661 1 332 1 005
NET INCOME AFTER TAXATION 3 596 2 608 1 906 1 215
NUMBER OF ORDINARY
SHARES IN ISSUE ('000) 218 160 218 160 218 160 218 160
EARNINGS PER SHARE (CENTS)* 1,65 1,20 0,87 0,56
DIVIDENDS PER SHARE (CENTS)** 0,55 0,40 0,29 0,19
* AMOUNTS SHOWN FOR EARNINGS PER SHARE ARE BASED ON THE PRO FORMA ATTRIBUTABLE
INCOME ON 218 160 000 ORDINARY SHARES, BEING THE NUMBER OF SHARES IN ISSUE
AFTER THE SUBDIVISION AND ASSUMING THE MAXIMUM NUMBER OF 49 110 000 SHARES WILL
BE ISSUED TO THE VENDORS IN TERMS OF THE EASIRUN ACQUISITION AND THE ACCSYS
ACQUISITION.
** THE PRO FORMA DIVIDENDS PER SHARE HAVE BEEN COMPUTED ON THE BASIS OF A
3 TIMES DIVIDEND COVER.
5.2. INTERIM RESULTS FOR THE NINE MONTHS ENDED 30 JUNE 1998
THE TABLE BELOW SETS OUT THE PRO FORMA INTERIM RESULTS OF THE UCS GROUP FOR THE
NINE MONTHS ENDED 30 JUNE 1998 AND 30 JUNE 1997.
1998 1997
R'000 R'000
TURNOVER 40 574 33 238
OPERATING INCOME BEFORE INTEREST 7 727 5 178
NET INTEREST PAID 758 806
NET INCOME BEFORE TAXATION 6 969 4 372
TAXATION 2 873 1 675
NET INCOME AFTER TAXATION ATTRIBUTABLE
TO ORDINARY SHAREHOLDERS 4 096 2 697
WEIGHTED AVERAGE NUMBER OF ORDINARY
SHARES IN ISSUE ('000)* 163 620 163 620
EARNINGS PER SHARE (CENTS)** 2,50 1,65
* 218 160 000 SHARES WEIGHTED FOR NINE MONTHS.
** AMOUNTS SHOWN FOR EARNINGS PER SHARE ARE BASED ON THE PRO FORMA ATTRIBUTABLE
INCOME AND ON 218 160 000 ORDINARY SHARES WEIGHTED FOR NINE MONTHS, BEING THE
NUMBER OF SHARES IN ISSUE AFTER THE SUBDIVISION AND ASSUMING THE MAXIMUM NUMBER
OF 49 110 000 SHARES WILL BE ISSUED TO THE VENDORS IN TERMS OF THE EASIRUN
ACQUISITION AND THE ACCSYS ACQUISITION.
5.3. PROFIT FORECASTS FOR THE YEARS ENDING 30 SEPTEMBER 1998 AND 1999.
THE TABLE BELOW SETS OUT THE PROFIT FORECASTS OF THE UCS GROUP FOR THE YEARS
ENDING 30 SEPTEMBER 1998 (PRO FORMA) AND 1999.
1999 1998
R'000 R'000
TURNOVER 86 704 60 379
OPERATING INCOME BEFORE INTEREST 27 643 14 534
NET INTEREST RECEIVED/(PAID) 10 104 (306)
NET INCOME BEFORE TAXATION 37 747 14 228
TAXATION 13 211 3 762
NET INCOME AFTER TAXATION ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS 24 536 10 466
WEIGHTED AVERAGE NUMBER OF ORDINARY
SHARES IN ISSUE ('000) *272 700 224 978
EARNINGS PER SHARE (CENTS) 9,00 4,65
* 223 590 000 SHARES AT LISTING PLUS 49 110 000, BEING THE MAXIMUM NUMBER OF
SHARES TO BE ISSUED TO THE VENDORS IN TERMS OF THE EASIRUN ACQUISITION AND THE
ACCSYS ACQUISITION.
6. RESULTS OF PRIVATE PLACING AND COMMENCEMENT OF LISTING
HSBC SIMPSON MCKIE (PTY) LIMITED ("HSBC") IS AUTHORISED TO ANNOUNCE THAT THE
PRIVATE PLACING OF 27 270 000 ORDINARY SHARES AT AN ISSUE PRICE OF 225 CENTS
PER SHARE IN THE CAPITAL OF UCS HAS BEEN SUCCESSFULLY COMPLETED.
THE COMMITTEE OF THE JSE HAS GRANTED A LISTING OF 223 590 000 ORDINARY SHARES
IN UCS IN THE INDUSTRIAL - "ELECTRONICS & ELECTRICAL" SECTOR OF THE JSE LISTS
UNDER THE ABBREVIATED NAME "UCS" WITH EFFECT FROM TODAY.
7. DETAILED PROSPECTUS
AN ENGLISH COPY OF THE PROSPECTUS, ACCOMPANIED BY THE DOCUMENTS REFERRED TO IN
PARAGRAPH 16 OF THE PROSPECTUS, WAS REGISTERED BY THE REGISTRAR OF COMPANIES ON
28 AUGUST 1998 IN TERMS OF THE COMPANIES ACT (ACT 61 OF 1973), AS AMENDED.
COPIES OF THE PROSPECTUS, WHICH ARE PROVIDED FOR INFORMATION PURPOSES ONLY ARE
AVAILABLE DURING NORMAL BUSINESS HOURS FROM:
* UCS, 20TH FLOOR, TOTAL HOUSE, 209 SMIT STREET, JOHANNESBURG, 2001;
* HSBC, HSBC PLACE, 6-9 RIVIERA ROAD, HOUGHTON, 2198;
* HSBC, 17TH FLOOR, CARTWRIGHT'S CORNER HOUSE, ADDERLEY STREET, CAPE TOWN,
8001; AND
* HSBC, 7TH FLOOR, NEDBANK CENTRE, DURBAN CLUB PLACE, DURBAN, 4001.
JOHANNESBURG
8 SEPTEMBER 1998
INVESTMENT HOUSE
HSBC SIMPSON MCKIE (PTY) LIMITED
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
REG. NO. 84/01736/07
ATTORNEYS
EDWARD NATHAN & FRIEDLAND INC
REG. NO. 77/00525/21
AUDITORS AND REPORTING ACCOUNTANTS
KK
CHARTERED ACCOUNTANTS (SA)
SPONSORING BROKER
HSBC SIMPSON MCKIE (PTY) LIMITED
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
REG. NO. 84/01736/07
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