Johannesburg, 01 Jun 2004
Information security solutions provider Y3K Group says it will remain dependent on financiers and creditors unless proposed acquisitions are approved.
The group`s results for the year to end-February show an increase in net profit from R86 000 to R135 000, despite a slip in revenue from R11.2 million to R9.14 million.
Headline earnings of 0.3c a share compare with previous headline earnings of 0.2c a share. The group`s net asset value has risen from 1.8c to 2.1c a share. Although the net tangible asset value per share has improved, it is still in negative territory at -0.3c a share compared with -3.2c a share previously.
"The historic restructuring challenges have finally been resolved and the group is appropriately positioned to leverage opportunities in its sector," says CEO Ryan Price.
"Trading activity for the year ending 29 February 2004 was not at an acceptable level," he says. "If the proposed acquisitions of Information Security Architects and iSecure are approved, as announced on 9 March 2004, these acquisitions should ensure the group`s ability to be a trusted provider of information security solutions."
The transactions are conditional upon shareholder and regulatory approval. Information Security Architects is being bought for R6.37 million while iSecure is being acquired for R579 600. The purchase is being settled by the issue of about 52.1 million Y3K Group shares at an issue price of 13.336c a share.
Price says the acquisitions would boost turnover to more than R30 million, resulting in a substantial improvement in profitability for the year to 28 February 2005.
However, he says if the deals are not approved, Y3K will remain dependent on its financiers and creditors to provide ongoing working capital for the business activities for the foreseeable future.
"Furthermore, should continued finance not be made available to the group, Y3K may not be sustainable as a going concern."
Related story:
Y3K makes two acquisitions
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