RGT
RGT - RGT Smart Market Intelligence Limited - Audited results for the year ended
29 February 2012 and notice of Annual General Meeting
RGT SMART MARKET INTELLIGENCE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2008/014367/06)
Share Code: RGT ISIN: ZAE000143715
("RGT SMART" or "the Company")
AUDITED RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2012 AND NOTICE OF ANNUAL GENERAL
MEETING
The audited results of RGT SMART for the year ended 29 February 2012, as
compared to the year ended 28 February 2011, are presented below:
Financial Performance Highlights
Highlights for the period March 2011 to February 2012, are as follows:
Feb 2012 Feb 2011
Revenue 32 369 732 27 703 937 16.8%
Total Costs 27 416 502 23 066 083 18.9%
Profit Before Tax 5 319 814 4 755 811 11.9%
Profit After Tax 4 123 318 3 306 470 24.7%
Headline Earnings 4 214 390 3 275 476 28.7%
Headline Earnings per 0.8429 0.8287 1.7%
share
Condensed consolidated statement of Financial Position
Figures in Rand Audited Audited
29 February 2012 28 February
2011
R'000 R'000
Assets
NonCurrent Assets
Property, plant and equipment 2 435 748
Goodwill 17 449 17 449
Intangible assets 5 907 5 586
Deferred tax 328 238
Current Assets
Current tax receivable 530 1
Operating lease asset 149 -
Trade and other receivables 2 967 2 931
Cash and cash equivalents 9 880 1 420
Total Assets 39 645 28 373
Equity and Liabilities
Equity
Share capital 13 271 4 024
Retained earnings 18 954 14 080
Total Equity 32 225 18 104
Liabilities
Non-Current Liabilities
Loans from shareholders - 1 365
Other financial liabilities 1 094 -
Operating lease liability 564 -
Deferred tax 1 655 1 421
Current Liabilities
Loans from shareholders - 978
Other financial liabilities 271 2 470
Current tax payable 103 1
Operating lease liability - 31
Trade and other payables 2 301 2 480
Revenue received in advance 1 300 1 336
Provisions 132 187
Total Liabilities 7 420 10 269
Total Equity and Liabilities 39 645 28 373
Figures in Rand Audited Audited
29 February 28 February
2012 2011
Asset value per share (cents per 7.93 7.09
share)
Tangible asset value per share 3.26 1.33
(cents per share)
Number of shares in issue at year 500 000 400 018
end ('000)
Condensed consolidated statement of comprehensive income
Figures in Rand Audited Audited
29 February 28 February
2012 2011
R'000 R'000
Revenue 32 370 27 704
Cost of sales (6 350) (7 195)
Gross profit 26 020 20 509
Other income 32 61
Operating expenses (20 811) (15 392)
Operating profit before interest 5 241 5 178
Investment revenue 334 57
Finance costs (255) (479)
Profit before taxation 5 320 4 756
Taxation (1 197) (1 450)
Profit after taxation 4 123 3 306
Profit for the year 4 123 3 306
Attributable to:
Equity holders of the parent 4 123 3 306
Minority interest - -
Profit for the year 4 123 3 306
Headline earnings reconciliation 4 123 3 306
(R'000)
Profit attributable to owners of the
parent
Adjusted for:
Loss/(Profit) on disposal of property, 91 (31)
plant and equipment
Headline earnings for the period 4 214 3 275
Figures in Rand Audited Audited
29 February 28 February 2011
2012
Per share information
Headline earnings per share (cents) 0.84 0.83
Diluted headline earnings per share 0.84 0.72
(cents)
Basic earnings per share (cents per
share) 0.82 0.84
Diluted earnings per share (cents per
share) 0.82 0.72
Dividend per share (cents) - -
Weighted average number of shares in 500 000 395 268
issue ('000)
Condensed consolidated statement of cash flows
Figures in Rand Audited Audited
29 February 28 February
2012 2011
R R
Cash generated from operating activities
5 228 017 3 699 209
Cash used in investing activities (3 317 618) (2 031 418)
Cash generated from/(used in) financing 6 549 125 (194 534)
activities
Total cash movement for the year 8 459 524 1 473 257
Cash at the beginning of the year 1 420 396 (52 861)
Total cash at end of the year 9 879 920 1 420 396
Condensed consolidated statement of changes in equity
Figures in Rand Share Share Equity Total share
capital premium reserve capital
Balance at 01 March
2010 3 808 001 35 480 303 (37 498 902) 1 789 402
Changes in equity
Profit for the year
- - - -
Issue of shares in
terms of the initial
public offering
569 999 5 130 001 - 5 700 000
Transfer share issue
costs to share premium
- (438 131) - (438 131)
Treasury shares held by
subsidiary
(377 817) (2 649 363) - (3 027 180)
Total changes 192 182 2 042 507 - 2 234 689
Balance at 01 March
2011 4 000 183 37 522 810 (37 498 902) 4 024 091
Changes in equity
Profit for the year - - - -
Issue of shares 622 000 5 598 000 - 6 220 000
Treasury shares sold 377 817 2 649 363 - 3 027 180
Total changes 999 817 8 247 363 - 9 247 180
Balance at 29 February 5 000 000 45 770 173 (37 498 902) 13 271 270
2012
Condensed consolidated statement of changes in equity
Figures in Rand Retained earnings Total equity
Balance at 01 March 2010 10 773 347 12 562 749
Changes in equity
Profit for the year 3 306 470 3 306 470
Issue of shares in terms of the
initial public offering
- 5 700 000
Transfer share issue costs to
share premium - (438 131)
Treasury shares held by
subsidiary - (3 027 180)
Total changes 3 306 470 5 541 159
Balance at 01 March 2011 14 079 817 18 103 908
Changes in equity
Profit for the year 4 123 318 4 123 318
Issue of shares - 6 220 000
Treasury shares sold 750 990 3 778 170
Total changes 4 874 308 14 121 488
Balance at 29 February 2012 18 954 125 32 225 395
BASIS OF PREPARATION
The board of directors is pleased to present the company's audited results for
the year ended 29 February 2012, which have been approved by the board on 23 May
2012. The accounting policies adopted for purposes of this report comply, and
have been consistently applied in all material respects with International
Financial Reporting Standards ("IFRS") and the abridged financial statements
have been prepared in accordance with the requirements of IAS 34 (Interim
Financial Reporting).
The same accounting policies and methods of computation have been followed as
compared to the prior year. The results have been audited by Mazars and the
unqualified and unmodified audit report is available for inspection at the
Company's registered office.
1 INDUSTRY AND BUSINESS OVERVIEW
RGT SMART Market Intelligence Limited (RGT SMART) is an investment holding
company that currently operates two wholly owned subsidiaries, Republic
Computer Services (Pty) Ltd (Trading as Response Group Trendline or RGT)
and RGT Smart Operations (Pty) Ltd (formerly KA SMART)(RGT Ops).
RGT has been the sole source of new vehicles sales data to the SA motor
industry for over 25 years. In addition RGT provide a range of analytical
products which the motor industry uses in planning, forecasting and
marketing. RGT Ops (previously known as KA SMART) provides high value
consulting support and service quality management and monitoring systems.
During the year under review as part of a strategy to simplify
administration and unify our branding operational companies within the RGT
SMART Group were amalgamated under one trading company; RGT Smart
Operations (Pty) Ltd, (formerly KA SMART Management Consultants (Pty) Ltd).
This move greatly simplifies administration and accounting and will reduce
administrative costs in the coming years. Additionally a more unified
approach to branding and brand development will make marketing more
effective.
Details of the product offerings of the Company are as follows:
MOTOR INDUSTRY DATA AND ANALYTICAL SYSTEMS
AutoStats - Online subscription based service providing detailed motor
industry Sales Volumes Vehicle Specifications, Dealer Promotions and
Economic statistics.
AutoMSA - Sophisticated Motor Industry Market Segmentation and Analysis
Tool with customised subscription based online access.
Parts Pricing Analyser - An analysis and reporting system that provides
live, real-time comparative pricing for parts used in Passenger and LCV
sold in South Africa.
Smart Mapping - Google supported Online Mapping System for Geo-Spatial
analysis of data.
Greenfleet - Analysis and Management of Vehicle Fleet Carbon Emissions.
National Labour Rate Monitor - Interactive Online reporting that allows
subscribers to accurately monitor and track Retail. Service and Warranty
labour rates by region, city, and manufacturer.
MARKET RESEARCH
Qualitative - RGT SMART has experience in the entire qualitative research
process. Scope of operations initial conceptualisation of the research
project design, data collection instruments, analysis and interpretation of
the data.
Quantitative - Data collection methods include Online, Email, SMS, Computer
Aided Telephonic, Face to Face while world class systems efficiently
facilitate research project management and analysis.
Service Quality Systems - An approach that delivers real-time consistent
and accurate measurement of the customer experience and at the same time
provides corrective action and improvement support.
CONSULTING SUPPORT
Strategic Planning
RGT SMART incorporates all of the acquired knowledge over the years to
provide a consultative approach to each and every project. We believe
Strategic planning is a management tool for organizing the present on the
basis of the projections of the desired future.
Product Planning and New Product Development/ Distribution Strategies
High level decision support for new product entries into a variety of
markets by utilising experience, statistics and a variety of research
methodologies.
Training and Knowledge Transfer - Qualified facilitators present a variety
of courses supporting the RGT SMART product suite. Training courses are
customised to meet client specifications and will empower clients to
conduct analysis independently.
INDUSTRY MONITORS
Motor Industry & Market Forecasts - Industry insight coupled with base data
and high level statistical expertise provides a range of forecasting
services.
Business Confidence Indicators - On-going monthly, quarterly, bi-annual and
annual Research Reports and Analysis.
2 FINANCIAL RESULTS
The Company's focus was on sustainable growth and because this required re-
investment, conservative, measured and reasonable levels of profitability
were expected. Even with substantial investment and reduction of debt
growth in turnover and profit terms exceeded expectations.
Revenue is up by 16.8%,total costs are up by 18.9%, headline earnings is up
by 28.7% and HEPS up by 1.7%. The group generated R5.2m of cash from
operations. The sale of treasury shares together with the issue of
additional shares generated a further R10m. Loans and other financial
liabilities totalling R3.4m were repaid. The group reflected a positive
cash flow of R8.5m in the period under review.
In 2011 the Company successfully introduced performance oriented KPAs and
KPIs for all employees and performance linked incentives for senior staff.
A priority objective was to secure an investor of reference to acquire a
significant stake in the business, thereby raising additional working
capital. This was realised early in the year with the successful
conclusion of a subscription agreement on 01 March 2011 with H.L. Hall and
Sons Investments (Proprietary) Limited ("Halls") through one of its
subsidiaries, Lightstone, acquiring a total of 215 512 128 shares in RGT
SMART, through the issue of 62 200 000 unissued ordinary shares, the
purchase of 37 781 700 treasury shares and the purchase of 115 530 428
shares from some existing shareholders.
3 SEGMENTAL REPORTING
The Group has adopted IFRS 8 Operating Segments as its segmental reporting
standard which requires an entity to report financial and descriptive
information about its reportable segments, which are operating segments or
the aggregation of operating segments that meet specified criteria.
Operating segments are components of an entity in respect of which separate
financial information is available is evaluated regularly by management.
For management purposes, the Group is organised into the following
segments:
For the year ended 29 February Market research Statistics
2012
External revenue 14 843 828 17 520 204
Internal revenue - 50 794
Total revenue 14 843 828 17 570 998
Cost of sales (3 972 179) (2 428 896)
Personnel costs (4 177 265) (5 194 100)
Lease rentals (755 301) (533 013)
Other costs (4 899 161) (3 776 967)
EBITDA 1 039 922 5 638 022
Depreciation and amortization (765 653) (372 055)
Finance income 418 3 108
Finance costs (14 427) (292 664)
Profit before tax 260 260 4 976 411
Segment assets 7 750 177 24 668 617
Total for All other Elimination of Total RGT
reportable segments intersegment SMART
segments transactions
External revenue 32 364 032 5 700 - 32 369 732
Internal revenue 50 794 6 120 000 (6 170 794) -
Total revenue 32 414 826 6 125 700 (6 170 794) 32 369 732
Cost of sales (6 401 075) - 50 794 (6 350 281)
Personnel (9 371 365) (4 022 - (13 393 962)
costs 597)
Lease rentals (1 288 314) - - (1 288 318)
Other costs (8 676 129) (2 357 6 120 000 (4 914 057)
928)
EBITDA 6 677 943 (254 825) - 6 423 118
Depreciation and (1 137 708) (44 843) - (1 182 551)
amortization
Finance income 3 526 599 467 (268 982) 334 015
Finance costs (307 091) (216 659) 268 982 (254 768)
Profit before tax 5 236 670 83 140 - 5 319 814
Segment assets 32 418 794 7 225 826 - 39 644 620
The "Market Research" segment provides specialist market research, market
intelligence and consulting services focusing on the South African motor
industry.
The "Statistics" segment, is the source of new vehicle sales data to the
South African motor industry. It also provides new vehicle specification
and pricing data and has developed sophisticated suite of analytical
systems.
The revenue derived by all other segments is in the form of management fees
paid by the two operating subsidiaries.
Geographical information has not been presented as the company operates in
South Africa only.
Revenue from external customers for each product and service, or each group
of similar products and services has not been presented, as the information
is not available and the cost to develop it would be excessive.
The Group does not earn revenue in excess of 10% from one single customer,
and as such does not place reliance on a single customer or group of
customer for its continued existence.
4 ACQUISITIONS AND DISPOSALS
On 01 March 2011 RGT SMART issued a further 62 200 000 share for cash. The
entire authorised share capital of 500 000 000 shares has therefore been
issued. The 37 781 700 treasury shares were disposed of for cash on 1 March
2011.
5 DIRECTOR CHANGES
During the year under review, the following director changes took place:
Director Date appointed
AH Miller 1 June 2011
SG Pretorius 1 March 2011
Subsequent to the year end, the following director change occurred:
Director Date appointed
P Backwell 27 March 2012
The board of directors is now constituted as follows:
Director Date appointed Designation
AA da Costa 12 June 2008 Independent Non-
executive Chairman
PB De Vantier 12 June 2008 Chief Executive Officer
NS Bruton 12 June 2008 Executive Director
CW Reed 12 June 2008 Financial Director
CJ Moodliar 05 May 2010 Independent Non-
executive director
TB Hayter 03 September 2010 Independent Non-
executive director
SG Pretorius 01 March 2011 Independent Non-
executive director
AH Miller 01 June 2011 Non-executive director
P Backwell 27 March 2012 Non-executive director
6 SHARE CAPITAL
On 1 March 2011, the remaining unissued 62 200 000 shares were issued to
Lighstone. The 37 781 700 treasury shares were also sold to Lightstone.
As at 29 February 2012, there were 500 000 000 issued ordinary shares,
which total the authorised number of shares available and accordingly there
are no unissued ordinary shares.
7 REPURCHASE AND ISSUES OF SHARES
During the year under review, the Company did not repurchase any shares.
8 DIVIDEND
The Company does not have a formal dividend policy at present. The Board of
Directors will continue to consider the payment of dividends on an annual
basis, based on achievement of profit and cash flow requirements.
The Company has not determined any fixed dates on which dividends or
entitlement to dividends arises. There is no arrangement in which future
dividends are waived or agreed to be waived.
9 LITIGATION
There is no litigation pending against the company or its subsidiaries,
which is expected to have a material impact on the results of the Company.
10 CONTINGENT LIABILITIES
At the balance sheet date the Group does not have any contingent
liabilities (2011: RNil).
11 ANNUAL GENERAL MEETING
Shareholders are advised that the Annual General Meeting of the Company
will be held on Wednesday, 22 August 2012 at IQuad House, 56 Mangold
Street, Newton Park, Port Elizabeth at 09h00.
12 SUBSEQUENT EVENTS
On 1 March 2012 the operations of RGT were merged with those of RGT Ops
(previously KA Smart). The merger had no effect on the Group as both
entities are wholly owned subsidiaries.
There were no other significant subsequent events.
13 FUTURE PROSPECTS
There are no major shifts in strategic direction; the group is confidently
committed to the existing strategy and business model. RGT SMART will
continue to play to its strengths - there continues to be scope for growth
in the Automotive Industry.
RGT SMART's role will be to continue to contribute to the resolution of our
clients' real business problems, enhancing their decision making through
deep industry insights and smart analytics using sets of propriety data.
A key objective for the coming year is to actively work with Lightstone and
other sister companies to generate mutually beneficial turnover through
synergies that can be created and exploited. There are already a number of
initiatives being explored in this regard. Regarding product development;
the focus will continue to be on projects designed and structured to
provide recurring income.
In the coming year continued recruitment of top specialists and increased
investment in training and development will remain a priority but now that
the business is properly structured, streamlined and funded RGT SMART will
begin to turn attention to potential acquisitions. Importantly though it
will remain essential that prospective acquisitions add to the data set,
skills and expertise and fit the RGT SMART business model.
Additionally the directors are actively exploring opportunities to launch
RGT SMART products and services in targeted offshore markets.
Longer range development planning for senior executive positions will be
focused on creating business growth and opportunity development capacity as
well as ensuring continuity.
By order of the Board
Mr AA Da Costa Mr PB De Vantier
Chairman Chief Executive Officer
24 May 2012
Johannesburg
Registered Office
Arcay House, Number 3 Anerley Road, Parktown, Johannesburg, 2193
PO Box 62397, Marshalltown, 2107
Directors
AA Da Costa*#(Chairman), PB De Vantier(CEO), CW Reed (FD)(Preparer), NS
Bruton, CJ Moodliar*#, TB Hayter*#, SG Pretorius*#, AH Miller*, P Backwell*
* Non-executive, #Independent
Designated Advisor Transfer Office
Arcay Moela Sponsors (Proprietary) Limited Link Market Services
(Proprietary) Limited
Date: 24/05/2012 11:00:01 Produced by the JSE SENS Department.
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