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Abridged Audited Results for the Year Ended 28 February 2022, Cash and Special Dividend and Notice of AGM
ISA Holdings Limited
Incorporated in the Republic of South Africa
(Registration number: 1998/009608/06)
Share code: ISA
ISIN: ZAE000067344
(“ISA” or “the company” or “the group”)
SHORT-FORM ANNOUNCEMENT: ABRIDGED SUMMARISED CONSOLIDATED AUDITED RESULTS FOR
THE YEAR ENDED 28 FEBRUARY 2022, CASH AND SPECIAL DIVIDEND DECLARATION AND
NOTICE OF ANNUAL GENERAL MEETING.
Audited Audited
year year
ended ended
28 Feb 22 28 Feb 21
Change R'000 R'000
Highlights from Statement
of Comprehensive Income:
Revenue 11% 74,743 67 316
Profit before
Other income and expenses 4% 39,882 38,505
Earnings after tax 26% 16,354 12,946
Earnings and diluted earnings
per share (cents) 26% 10.5 8.3
Highlights from Statement of
Financial Position:
Total assets 13% 84,307 74,741
Cash and cash equivalents -4% 47,345 49,261
Equity 12% 70,348 62,773
Total liabilities 19% 13,959 11,698
Highlights from Statement of
Changes in Equity:
Dividends paid during the year 49% 11,657 7,800
Ordinary dividend per share
declared (cents) 88% 6.2 3.3
Special dividend per share
declared (cents) 10.0 -
Net asset value per share
at end of period (cents) 12% 45.1 40.2
Headline earnings per
share (cents) 26% 10.5 8.3
Diluted headline earnings per
share (cents) 26% 10.5 8.3
Notes to the statements:
RECONCILIATION OF HEADLINE EARNINGS
Earnings as per statement of comprehensive income 16 354 12 946
Profit on sale of property, plant and equipment - (72)
Headline earnings 16 354 12 874
Headline earnings per share (cents) 10.5 8.3
Operational Review
I am pleased to present our results for the full year ended 28 February 2022
("the current reporting period"), which continue to be underpinned by a high
portion of recurring revenue, a robust balance sheet and strong cash flows.
In context of the exceptionally challenging trading conditions in which we
operate, together with the extreme pressure on the local economy, I am
particularly pleased with our performance and humbled by the tremendous
support that we have received through this challenging time from our staff,
customers, suppliers, vendor partners and shareholders.
Financial
Revenue increased by 11% to R74.7 million compared to R67.3 million in the
previous corresponding reporting period (“the prior reporting period”), of
which a healthy 79.8% is of a recurring nature and includes turnover from
both product subscription sales, and from our various Managed Security
Service subscription offerings. Profit before other income and expenses
(“gross profit”) increased by a relatively modest 3.6% to R39.9 million
during the current reporting period compared to R38.5 million in the prior
reporting period, which was somewhat lower than expected due to the inclusion
of several larger low-margin projects completed and recognised during the
current reporting period.
Operating expenditure decreased by a pleasing 13.8% to R21.1 million compared
to R24.5 million in the prior reporting period, but if the effect of the R2.8
million swing in the revaluation of our foreign currency reserve from a loss
of R1.2 million in the prior reporting period to a profit of R1.6 million in
the current reporting period was to be excluded, the decrease in operating
expenditure would have only been 9.6%, which is in line with managements
anticipated result and illustrates their continued focus on managing
expenditure within the group.
On a less pleasing note, the share of profits from our equity-accounted
investment (“DataProof”) declined by 32.4% to R1.6 million compared to R2.4
million in the prior reporting period, this despite a substantial increase in
turnover. While this decline is unfortunate in the short term, management
remain confident about their prospects as they continue to pivot the business
into a more sustainable and scalable entity that can achieve above average
growth, especially in their cyber security division.
Earnings increased to R16.4 million compared to R12.9 million in the prior
reporting period, which represents a very satisfying increase of 26.3% in
headline and earnings per share to 10.5 cents from 8.3 cents achieved in the
prior reporting period; and total comprehensive income increased by 48.6% to
R19.2 million compared to R12.9 million in the prior reporting period, which
increase beyond earnings is due to the fair value revaluation of our owner-
occupied property in Sandton.
Distribution
During the current reporting period an interim dividend of R6.7 million for
the half year ended 31 August 2021 was declared and paid to shareholders,
representing a cash distribution of 4.3 cents per share. With the realisation
of earnings of 10.5 cents per share for the current reporting period, we are
now pleased to declare a final ordinary dividend to shareholders for the year
ended 28 February 2022 of 6.2 cents per share, as well as a special dividend
of 10.0 cents per share, which is subject to the South African Reserve Bank
(“SARB”) approval. Both the ordinary and special dividend will be subject to
the dividend tax legislation. The reason for declaring the special dividend,
payable from income reserves is to reduce the unnecessarily high level of
cash in the business, which came about when we decided to forgo a final
dividend for the year ended 29 February 2020 in order to preserve the
strength of our balance sheet through those uncertain times.
The board of directors of ISA (“board”) has reasonably concluded that the
company will satisfy the solvency and liquidity requirements immediately
after distribution thereof and for the next 12 months.
The salient dates for the ordinary dividend will be as follows:
Declaration date Friday, 27 May 2022
Last day to trade Tuesday, 19 July 2022
Shares trade ex-dividend Wednesday, 20 July 2022
Record date Friday, 22 July 2022
Payment date Monday, 25 July 2022
Share certificates may not be dematerialised or rematerialised between
Wednesday, 20 July 2022 and Friday, 22 July 2022, both days inclusive.
In terms of the dividend tax legislation, effective 1 April 2012, the
following additional information is disclosed:
- This is a dividend as defined in the Income Tax Act, 1962, and is payable
from income reserves.
- The South African dividend tax (DT) rate is 20%.
- The DT to be withheld by the company in respect of the ordinary dividend
amounts to 1.24 cents per share.
- The net ordinary dividend payable to shareholders who are not exempt from
DT is therefore 4.96 cents per share, while a gross ordinary dividend
of 6.2 cents per share is payable to those shareholders who are exempt
from DT.
- The DT to be withheld by the company in respect of the special dividend
amounts to 2.0 cents per share.
- The net special dividend payable to shareholders who are not exempt from
DT is therefore 8.0 cents per share, while a gross special dividend of
10.0 cents per share is payable to those shareholders who are exempt from
DT.
- The issued share capital of the company at the declaration date comprises
170 592 593 ordinary shares.
- The company’s income tax reference number is 9340/150/71/4.
The salient dates for the special dividend will be announced once we have
received the approval from SARB.
Market and prospects
While our journey to reaching and exceeding our former turnover and
profitability levels is likely to be somewhat tougher and longer than
initially anticipated, I am particularly encouraged by the depth and
complexity of security solutions making their way into our growing sales
pipeline, especially noting a sense of excitement within our customer base
and prospects of our recently onboarded ‘next generation’ security
technologies and evolving Managed Security Service offerings that now include
more advanced threat detection and incident response service deliverables.
I continue to be optimistic about our long-term prospects, as the key drivers
of the information security market remain robust. With the continued
evolution and persistence of threats and attack vectors against corporate
information and IT resources, together with the increased regulatory and
legislative compliance requirements, stakeholders continue to elevate the
importance of IT security within their organisations. By leveraging this
positive sentiment towards the information and infrastructure security
market, as well as our positioning as a thought leader in this niche market
segment, we are likely to continue delivering above average tangible returns
over time.
Conclusion
On behalf of the board, I would like to take this opportunity to thank the
ISA team for their continued dedication and hard work. My appreciation is
also extended to my colleagues on the board for their wise counsel and
valuable input. Finally, I thank all stakeholders, customers and vendors for
their support, and I look forward to meeting shareholders at the Annual
General Meeting to be held on Thursday, 30 June 2022.
Integrated Annual Report
Shareholders are advised that the integrated annual report has been
distributed to shareholders and will be available on the company’s website at
www.isa.co.za.
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of shareholders of ISA
(“AGM”) will be held at 10:00 on Thursday, 30 June 2022 through electronic
participation.
The salient information pertaining to the AGM is set out below:
Issuer name ISA Holdings Limited
Type of instrument Ordinary shares
ISIN number ZAE000067344
JSE code ISA
Meeting type Annual General Meeting
Meeting venue Virtual
Record date – to determine
which shareholders are entitled to
receive the notice Friday, 20 May 2022
Publication/Electronic distribution date Friday, 27 May 2022
Last day to trade – last day to trade to determine
eligible shareholders that may attend, speak and
vote at the AGM Tuesday, 21 June 2022
Record date – record date to determine eligible
Shareholders that may attend, speak and vote at
the AGM Friday, 24 June 2022
Meeting deadline date - (for administrative
purposes), forms of proxy for the AGM to be
lodged 10:00 on Monday, 27 June 2022
Virtual AGM date 10:00 on Thursday, 30 June 2022
Publication of results Thursday, 30 June 2022
Website link www.isaholdings.co.za
Shareholders who wish to participate electronically at the Annual General
Meeting are required to contact JSE Investor Services at
meetfax@jseinvestorservices.co.za; or alternatively contact JSE Investor
Services’ offices on +27 86 154 6572 as soon as possible, but in any event,
for administrative purposes only, by no later than 10:00 on Monday, 27 June
2022.
SHORT-FORM ANNOUNCEMENT
The content of this short-form announcement is the responsibility of the
directors of the company. The short-form announcement contains only a summary
of the information in the Abridged Summarised Consolidated Audited Results
for the year ended 28 February 2022 (“Full Announcement”) which is available
at: https://senspdf.jse.co.za/documents/2022/jse/isse/isa/ye22.pdf and is also
published on the company’s website at https://www.isa.co.za/sens/SENS-
20220527-01.pdf, and accordingly does not contain full or complete details.
Any investment decisions by investors or shareholders should be based on the
consideration of the Full Announcement.
The information in this short-form announcement has been extracted from the
Full Announcement, but the short-form announcement itself has not been
reviewed or audited by the company's auditors.
The abridged summarised consolidated audited results have been extracted from
the annual financial statements for the year ended 28 February 2022 which was
audited by Mahdi Meyer Steyn Chartered Accountants Inc, who expressed an
unmodified audit opinion. The key audit matters addressed in the auditor’s
report relate to the change in accounting policy and revenue recognition. A
copy of their audit report and the group annual financial statements are
available for inspection at the company's registered office, Block 9 Pinewood
Office Park, 33 Riley Road, Woodmead 2191 and on the company's website at
www.isa.co.za
Copies of the short-form announcement and the Full Announcement will be
available for inspection at the registered offices of ISA or the Designated
Adviser, Merchantec Capital, during business hours. These announcements may
also be obtained at no cost on request from the Company Secretary who is
contactable on +27 11 325 6363 or isa@acorim.co.za
For and on behalf of the board,
Clifford Katz
Chief Executive Officer
Johannesburg
27 May 2022
Directors: CS Katz (Chief Executive Officer), PJG Green (Chief Technical
Officer), P Mogoboya (Financial Director), AJ Naidoo#, C. Pillay#, DC
Seaton*, N Maphothi*, O Seku*(Chairperson)
# Non-executive
* Independent non-executive
Designated Adviser: Merchantec Capital
www.isaholdings.co.za
Date: 27-05-2022 04:35:00
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