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Results Announcement: Unaudited Condensed Results for the six months ended 31 August 2024
ISA Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 1998/009608/06)
Share code: ISA
ISIN: ZAE000067344
("ISA" or "the Company")
RESULTS ANNOUNCEMENT: UNAUDITED CONDENSED RESULTS FOR THE SIX MONTHS ENDED
31 AUGUST 2024
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 Aug 24 31 Aug 23 29 Feb 24
Change R'000 R'000 R'000
Highlights from Statement
of Comprehensive Income
Turnover -8% 45,118 49,137 100,797
Profit before
other income and expenses 8% 24,854 23,091 48,941
Profit after tax 10% 13,199 11,946 29,539
Earnings per share (cents) 10% 8.5 7.7 18.9
Highlights from Statement of
Financial Position
Total assets 5% 82,553 78,324 86,447
Cash and cash equivalents -25% 22,453 29,992 30,057
Equity 2% 58,648 57,280 62,921
Total liabilities 14% 23,905 21,044 23,526
Dividends and distribution
Ordinary dividend per share
declared for the period (cents) -100% - 7.7 18.9
Ordinary dividend per share
paid during the period (cents) 81% 11.2 6.2 13.9
Net asset value per share
at end of period (cents) 2% 37.6 36.7 40.3
Headline earnings per
share (cents)* 10% 8.5 7.7 18.9
Diluted headline earnings per
share (cents)* 10% 8.5 7.7 18.9
* There have been no reconciling items that would result in a change to the
Headline earnings per share and the Diluted headline earnings per share.
Operational Review
I am pleased to present our results for the six months ended 31 August 2024
("the current reporting period"), which continue to be underpinned by a high
proportion of recurring revenue, a robust balance sheet and strong cash
flows. Despite the challenging trading conditions in which we operate,
overall performance remains satisfactory.
Turnover unfortunately decreased by 8% during the current reporting period to
R45.1 million compared to R49.1 million in the previous corresponding
reporting period ("the prior reporting period"). 86% is subscription derived
and includes a healthy mix of products, subscriptions and our Managed
Security Service offerings that feature MSS Pulse, our internally developed
security infrastructure management, monitoring and reporting platform. This
decrease in turnover can largely be attributed to the timing differences on a
few larger contracts, when viewed against the prior reporting period.
However, management continued to focus on developing their offerings with a
view of attracting new customers and uncovering additional revenue generating
opportunities within their existing customer base. These product development
initiatives are expected to yield more pleasing and predictable revenue
growth rates over time.
Despite the decline in turnover, profit before other income and expenses
increased by a pleasing 8% during the current reporting period to R24.8
million, representing a gross margin of 55% compared to 47% in the prior
reporting period. This increase in gross margin is largely attributed to a
subtle shift in our revenue composition, including an increased proportion of
more higher margin services compared to the prior reporting period. Operating
expenditure increased by 10% to R15.5 million compared to R14.1 million in
the prior reporting period, which increase is largely due to payroll
inflation rather than any fundamental changes in the business itself.
On another positive note, our share of profits from our equity-accounted
investment ("DataProof") increased by 25% to R5.5 million from R4.4 million
in the prior reporting period. DataProof continues to deliver strong results
and is beginning to be recognised as a strong contender in security
information and event management within the cybersecurity industry,
especially in the public sector.
Total comprehensive income attributable to equity shareholders for the
current reporting period increased to R13.2 million from R11.9 million in the
prior reporting period, representing a 10% increase in headline and earnings
per share to 8.5 cents, from 7.7 cents in the prior reporting period.
Trade and other receivables decreased by 18% to R14.0 million from R17.1
million, while trade and other payables increased by 13% to R22.5 million
from R20.0 million in the prior reporting period. Management is not overly
concerned with these changes, as they are largely a factor of deal and
supplier settlement timing and product mix structuring, as opposed to any
fundamental change in cash management practices of the business.
Cash and cash equivalents decreased by 25% to R22.5 million in the current
reporting period, from R30.0 million in the prior reporting period, this
after the final dividend of R17.5 million that was paid to shareholders
during the current reporting period. Management points out that DataProof
continues to accumulate their cash while considering several capital
allocation options available to them at this time, and as such has not
declared a dividend to ISA, which would have bolstered our cash position.
Distribution
A final dividend totalling R17.5 million was declared and paid to
shareholders during the period under review, representing a gross
distribution of 11.2 cents per share. The board has not declared an interim
dividend, as their current cash reserves are needed to fund our operations
and anticipated short-term growth trajectory.
RESULTS ANNOUNCEMENT
This results announcement is the responsibility of the directors of the
Company. This results announcement does not include full or complete details
of the unaudited condensed results for the six months ended 31 August 2024
("Results") released on SENS on 8 November 2024. The Results, as published on
SENS, can be found on the Company's website at:
https://www.isa.co.za/sens/SENS - 20241108-01.pdf
and on the JSE's cloudlink at:
https://senspdf.jse.co.za/documents/2024/jse/isse/isa/interim24.pdf
Any investment decisions by investors or shareholders should be based on the
consideration of the Results as a whole. None of the information in this
announcement has been reviewed or reported on by the Company's auditors.
SPECIAL THANKS
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, as well as to all stakeholders, customers and vendors for
their support.
For and on behalf of the board,
Clifford Katz
Chief Executive Officer
Johannesburg
8 November 2024
Directors: CS Katz (Chief Executive Officer), PJG Green (Chief Technical
Officer), P Mogoboya (Financial Director), AJ Naidoo#, DC Seaton*, N
Maphothi*, O Seku*(Chairperson)
# Non-executive
* Independent non-executive
Designated Adviser: Merchantec Capital
www.isaholdings.co.za
Date: 08-11-2024 03:25:00
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