<B>Salient figures</B>
Softline results for the six months to 30 September 2002.
Year-earlier figures in parentheses:
Revenue: R337.54m (R231.93m)
Gross profit: R279.24m (R199.06m)
Profit before taxation and impairment of investments: R41.17m (R23.5m)
Profit before tax: -R113.5m (R23.5m)
Profit after tax: -R127.28m (R7.94m)
Cash flows from operating activities: R100.07m (R35.25m)
Current assets: R229.8m (R127.95m)
Cash and cash equivalents: R133.45m (R53.46m)
Current liabilities: R184.78m (R108.47m)
NAV per share: 104.3c (124.8c)
The accounting, payroll and taxation software developer's revenue for the period increased by 46% over last year, while the operating margin grew from 17.2% at year-end to 18.6% for the interim period.
Headline earnings per share rose 21% to 12.1c.
SA contributed 45% of revenue, Australia 33% and North America 22%. Operations in Australia, Canada and the US contributed 60% of operating profit while SA contributed 40%.
"Softline's results for the interim period reflect a solid performance from our operations in all geographic regions," says CEO Ivan Epstein.
However, the group reported an attributable loss after the impairment of investments, mainly in US-based SVI.
The investments were impaired by R155 million to R77 million from R232 million at the March year-end. The impairment resulted in an after-tax loss of R127 million.
The group says it decided to write down the carrying value of SVI as a result of a continuing decline in global economic conditions, primarily in the US, with the consequence of deferred IT expenditure and negative perception in IT stocks.
"The loss after tax, as a result of the impairment, does not provide a clear reflection of the trading performance of the business," Epstein says.
"Excluding this non-trading item the group made an attributable profit after tax of R27 million compared to R8 million in the comparable period and R38 million for the previous full financial year."
He attributes the solid trading performance of the business to enhanced organic growth in revenue and profits backed by cash, improved working capital management, the closure of loss-making start-up operations and the inclusion of MicrOpay in the period.
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