The entire business of Zaptronix could be sold as a result of talks with potential black economic empowerment partners.
The group`s results for the year to 30 April show the high cost of closing down its Durban-based manufacturing business.
<B>Salient figures</B>
Zaptronix results for the year to 30 April 2002
Previous year`s figures in parentheses, move in square brackets
Revenue: R9.13m (R16.12m) [-43%]
EBITDA: -R7.9m (-R11.48m) [+31%]
Exceptional items: -R13.4m (--)
Net profit before tax: -R23.53m (-R13.13m) [-79%]
Net profit after tax: -R23.12m (-R9.56m) [-142%]
HEPS: -6.68c (-6.37c) [+4.9%]
Cash utilised from operations: R7.05m (R7.98m) [-11.7%]
Current assets excluding cash: R1.89m (R5.84m) [-67.6%]
Cash and equivalents: R3.16m (R10.64m) [-70.3%]
Current liabilities: R1.32m (R2.97m) [-55.6%]
NTAV per share: 5.0c (19.34c) [-73.9%]
Although the operating loss was reduced significantly, closure costs and write-backs led to a substantially worse net loss.
In addition to normal closure expenses such as retrenchment costs (R2.7m), the revaluation of the manufacturing assets on the balance sheet has been reversed. The net loss on the sale of assets after the reversal was R1.3m.
The Zaptronix board also decided to write back a significant portion of capitalised development costs, resulting in an exceptional charge of R13.4m.
The group says the remaining business now has a significantly reduced overhead structure. However, it says it is not trading profitably.
"Even though contracts are being concluded for the sale of product, the financial statements will include an emphasis of matter regarding the going concern."
It says opportunities are being explored with other market players around specific packages of technology.
"Further information will be forthcoming in the weeks ahead but discussions are under way with a number of potential partners, especially those involved in black economic empowerment who have requirements and markets for some of the company`s offerings."
The company said the talks could lead to the sale of the business of Zaptronix, either in part or in full.
The group has retained the equipment to manufacture specialised hybrid circuits and there may be a joint venture with an existing manufacturer to continue the high-margin operation.
"The 'electrical` side of our business might be repackaged into a joint venture dedicated to this industry and other joint ventures could be structured around the company`s smart card activities, leaving the listed vehicle strictly as a holding company.
"Whatever the outcome, the directors are working at maximising the return to its shareholders."
The share price was untraded at 2c on the JSE this morning.
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