RNS Number:5150O
Orpak Systems Ltd
21 February 2008
The following replaces the final results announcement released at 0700 under RNS
number 43790.
The consolidated statements of cash flow have been added.
The full amended text appears below.
21 February 2008
Orpak Systems Ltd
("Orpak" or "the Company")
Fourth quarter and twelve month results to 31 December 2007
Orpak Systems Ltd, the leading provider of card-free secure fuel payment systems
based on vehicle identification and end-to-end solutions for the automation of
fuel stations, announces its financial results for the fourth quarter and twelve
months ended 31 December 2007.
--------------- ------------------- -------------------
Financial Highlights Three months ended Twelve months ended
$m 31 December 31 December
2007 2006 % Change 2007 2006 % Change
--------------- -------- ------- -------- ------- -------- --------
Revenue 16.8 13.1 28% 58.0 45.0 29%
Net Profit (per GAAP) 2.7 2.0 31% 9.0 6.9 30%
Fully diluted earnings
per 7.8 6.1 28% 26.4 20.6 28%
share (cents)
Net Profit (Non GAAP) 2.8 2.1 33% 9.5 7.3 30%
Highlights
*Achieved 18th consecutive quarter of growth in revenues and net profits
in the fourth quarter on a year-on-year basis
*Acquisition of two software solutions corporations which will add
capability to develop software solutions for convenience store management in
fuelling stations
*For full year 2007, revenues from Europe increased by 38% to $40.1m
(2006: $29.1m) making it the largest contributor to revenues at 69% due to
winning significant new orders such as $5m order from British Petroleum (BP)
*Asia and Africa combined increased their revenue in 2007 by about 75% to
$7.2m (2006: $4.1m) led by strong growth in India with accumulated 1,360
automation systems shipped to Indian Oil Company (IOCL) and Hindustan
Petroleum Company (HPCL)
*Entered first quarter 2008 with a robust order book including a
high-level of repeat business
*Net cash and cash equivalents totaled $28.8m as at 31 December 2007
(2006: $25.5m). This was despite $2.6m payments made on two acquisitions
*Final dividend of US$ 7 cents per Ordinary Share in respect of the year
ended Dec 31, 2007
Hayim Kohen, Chief Executive of Orpak, said: "We are pleased to have delivered
another year of significant growth as demand for our products across all markets
remained buoyant.
Looking ahead, we entered the first quarter with a robust order book including a
high-level of repeat business. It remains the Company's strategy to augment
growth through selective acquisitions as well as continue to gain market
share through its excellent product set and strong sales network. As a result,
the Board looks forward to delivering further significant growth during 2008 and
deliver shareholder value."
Hayim Kohen, CEO and Hemi Shtral will be hosting a conference call for investors
on 21 February 2008 at 4pm GMT (11am EST, 8am PST)
In the US, please dial +1 866 966 5335
In the UK, please dial 0808 109 0700
Outside the US and UK, please dial +44 20 3003 2666
Enquiries:
Orpak Systems Ltd
Hayim Kohen, CEO +972 3 577 6868
Hemi Shtral, CFO
Libertas Capital
Sandy Jamieson, Charlie Wilson +44 20 7569 9650
Corfin Communications
Harry Chathli, Clare Perks +44 20 7977 0020
Note to Editors:
Orpak develops, manufactures and markets end-to-end solutions for the automation
of fuel stations and fleet management. Orpak is a market leader in automated
refueling systems that incorporate fuel payment based on vehicle identification.
Using advanced technologies to meet customer requirements, Orpak's solutions
integrate forecourt automation and management, convenience-store management
systems, commercial and retail sales solutions, and fuel delivery systems. The
Company's solutions are designed to benefit customers through enabling fuel
savings, preventing fuel fraud, maximizing loyalty programs and providing other
advanced services that increase profitability.
The Company's products have been delivered to more than 10,000 fuel stations and
1.9 million vehicles in 30 countries across the globe and are distributed
through an international network of subsidiaries and partners.
Orpak has been ISO-9001 certified since 1995, and the Company's products meet
appropriate local safety standards and regulations in markets in which it
operates.
Orpak (AIM: ORPK) was admitted to AIM in December 2005.
Financial review
Orpak is pleased to announce strong growth in revenues and net profits for the
fourth quarter and 12 months of 2007, reflecting continued strong momentum of
demand for its products and services in key territories, in particular Europe,
Asia and Africa regions.
Fourth quarter revenues increased by 28% to $16.8m (2006: $13.1m) and net
profits increased by 31% to $2.7m (2006: $2.0m). Net profits for fourth quarter
2007, prior to the provision of expenses for stock option plans that amounted to
$2.8m. Fully diluted earnings per share were 7.8 cents (2006: 6.1 cents).
Sales and marketing expenditure amounted to $3.3m compared with $2.7m in 2006 as
the Company continued to expand its global sales infrastructure.
Turnover in the twelve months to 31 December rose 29% year on year to $58.0m
(2006: $45.0m). Net profits increased by 30% to $9.0m in the twelve months
(2006: $6.9m). Net profit excluding the provision of expenses for stock option
plans was $9.5m. Fully diluted earnings per share were 26.4 cents (2006: 20.6
cents), up 28%.
Operating review
Orpak continued to gain market share in its established territories and made
further inroads into new territories. To date, Orpak's systems have been
delivered to approximately 10,000 petrol stations and 1.9 million vehicles
across 30 countries.
Twelve month revenues in Europe increased by 38% to $40.1m (2006: $29.1m),
maintaining the region's position as the largest revenue contributor to the
Company at 69%. The revenue growth reflected the impact of major orders
including contracts with oil companies in several countries in Eastern Europe.
The orders were delivered on time and within budget, consolidating Orpak's
position in Eastern Europe.
The Company announced that it has signed a contract with BP - a major global Oil
Company - to equip a network of 580 stations in Turkey with station automation
and fuel payment systems based on vehicle identification of 65,000 vehicles.
Under the terms of the agreement, Orpak commenced the supply, installation and
commissioning of its management system in the petrol stations in fourth quarter
2007 and this process will be completed during the first quarter of 2008. Orpak
will be paid $5m in stages.
The Company also made good progress in sales to retail networks in Spain and the
Netherlands.
Asia/Africa continued to set the pace of growth at the Company level, driven by
Orpak's strong presence in India. The Company made significant progress in
executing current orders with two of India's leading petroleum companies. The
Company shipped an additional 990 end-to-end retail management systems in the
quarter to HPCL and IOCL, two of India's biggest oil companies, increasing the
total number of systems delivered to these customers to 1,360. Progress was also
made in South Africa, where thousands of Vehicle Units were delivered to the
retail market, contributing $1.8m in revenue. Asia and Africa combined increased
their revenue in 2007 by about 75% to $7.2m (2006: $4.1m).
On Dec 31, 2007 the Company announced that its fully owned subsidiary, Delpak
Systems (the "Buyer") has entered into a series of agreements with the
controlling persons of two affiliated foreign corporations, for the purchase of
51% of the issued share capital of the Acquired Corporations. The Acquired
Corporations engage in the development of software for solutions for the
management of convenience stores located in fueling stations worldwide and
support services for such solutions. The consideration for the Purchased Shares
has been set to an amount of approximately US$3.4 million. The Buyer has also
undertaken to pay to the Sellers additional consideration, based on agreed
profit multipliers with respect to the annual profits of the Acquired
Corporations for the years 2007 to 2009. In addition, the Buyer and the Sellers
have granted each other Put and Call options (exercisable during the years 2012
and 2013), for the acquisition of the remainder of the Sellers' shares in the
Acquired Corporations. The exercise price of the option will be determined
through an earn out which will be based on the annual profits of the Acquired
Corporations in the two years preceding the exercise of the option and using
agreed profit multipliers. Orpak estimates the total consideration for the
Acquired Corporations will be in the region of US$15m.
Further to the purchase made on 2 April 2007 of a 51% interest in a
privately-owned company in Eastern Europe - the company's business involves
installation and maintenance services for Orpak's fuel station automation and
vehicle identification systems in the Eastern European region including Ukraine,
Bulgaria and Romania. This activity had a positive contribution to Orpak's
revenue and net profit.
Dividend
In line with the Group's policy, the Directors have declared a final dividend of
NIS 0.24 per Ordinary Share in respect of the year ended Dec 31, 2007. This
amount will be converted to US Dollars per the exchange rate on the date the
dividend is paid. For convenience, as of today, the above-mentioned dividend is
equivalent to US$0.07 per Ordinary Share.
The dividend will be paid on 21 March 2008, to shareholders on the record date 7
March 2008 with the ex dividend date 5 March 2008.
The Total final dividend amounts to NIS 8.1m (which as mentioned above, is
equivalent to US$ 2.25m).
Net cash and cash equivalents as at 31 December 2007 increased to $28.8m (2006:
$25.5 m).
Outlook
Orpak continues to benefit from buoyant trading conditions across all key
markets and is strongly positioned to deliver long term growth through
consistent organic expansion. In addition, the Company's strategy is to augment
its growth through selective acquisitions.
The Company entered the first quarter 2008 with a robust order book including a
high-level of repeat business. As a result, the Board looks forward to
delivering further significant revenue growth in the year 2008, compared with
the corresponding periods last year.
Consolidated Income Statements for the Year Ended December 31
2006 2007
$ thousands $ thousands
Revenues from sales and services 45,019 58,044
Cost of sales and services 22,370 28,140
Gross profit 22,649 29,904
Research and development costs 4,507 4,374
Selling and marketing costs 9,427 12,727
General and administrative expenses 2,270 3,182
Other operating (income) expense, net 235 (78)
Profit from operations 6,210 9,699
Net financing income 905 617
Profit before income tax 7,115 10,316
Income tax expense (108) (876)
Profit for the year 7,007 9,440
Attributable to:
Equity holders of the Company 6,888 8,978
Minority interest 119 462
Profit for the year 7,007 9,440
Earnings per share (in U.S. dollars)
Basic earning per share 0.207 0.266
Diluted earning per share 0.206 0.264
Consolidated Balance Sheets as at December 31
2006 2007
$ thousands $ thousands
Assets
Current assets
Cash and cash equivalents 8,029 9,061
Marketable securities 17,432 19,780
Trade receivables 11,885 19,889
Other receivables and prepayments 1,820 1,429
Inventories 6,871 10,487
Total current assets 46,037 60,646
Non-current assets
Deferred tax assets 146 562
Employee benefits 133 105
279 667
Property and equipment, net 1,915 2,915
Other intangible assets - 14,857
Total non-current assets 2,194 18,439
Total assets 48,231 79,085
Alex Milner Chairman of the Board
Hayim Kohen General Manager and Member of the Board
Hemi Shtral Chief Financial Officer
Date of approval of the financial statements: February 20, 2008
Orpak Systems Ltd.
and subsidiaries
Consolidated Balance Sheets as at December 31
2006 2007
$ thousands $ thousands
Liabilities and equity
Current liabilities
Overdraft and current maturities of long-term loans 159 388
Trade payables 4,842 6,918
Other payables 11,205 19,989
Total current liabilities 16,206 27,295
Non-Current liabilities
Deferred tax liabilities 258 1,776
Employee benefits 125 213
Other long-term liabilities - 5,749
Total non-current liabilities 383 7,738
Contingent liabilities, commitments and liens
Total liabilities 16,589 35,033
Equity
Share capital 179 179
Share premium 21,648 21,705
Treasury shares (501) (501)
Translation reserve (1,983) 1,631
Retained earnings 12,120 20,400
Total equity attributable to equity holders of the Company 31,463 43,414
Minority interest 179 638
Total equity 31,642 44,052
Total liabilities and equity 48,231 79,085
Orpak Systems Ltd.
and subsidiaries
Statement of Changes in Equity
Attributable to equity holders of the Company
Share Share Treasury Retained
capital premium shares earnings
$ thousands $ thousands $ thousands $ thousands
Balance as at January 1, 2006 177 21,112 (877) 5,598
Changes during 2006:
Net profit for the year - - - 6,888
Adjustments arising from
translation of
financial statements for
the year (1) - - (27) -
Total recognized income and
expense for the
year - - (27) 6,888
Exercise of share based
payment 2 536 - -
Dividend to equity holders - - - (698)
Share-based payment settled
in shares (Note
15B(2)) - - - 332
Expiration of liability in
respect of
share-based
payments classified as a
liability - - 403 -
Balance as at
December 31, 2006 179 21,648 (501) 12,120
Changes during 2007:
Net profit for the year - - - 8,978
Adjustments arising from
translation of
financial statements for
the year (1) - - - -
Total recognized income
and expense for the
year - - - 8,978
Acquisition of additional
right in subsidiary - - - -
Exercise of share
based payment - 57 - -
Dividend to equity
holders - - - (1,006)
Share-based payment
settled in shares (Note
15B(2)) - - - 308
Balance as at
December 31, 2007 179 21,705 (501) 20,400
Statement of Changes in Equity
Attributable to equity holders of the Company
Translation Minority
reserve Total interest Total equity
$ thousands $ thousands $ thousands $ thousands
Balance as at January 1, 2006 (4,289) 21,721 53 21,774
Changes during 2006:
Net profit for the year - 6,888 119 7,007
Adjustments arising
from translation of
financial statements
for the year (1) 2,306 2,279 7 2,286
Total recognized
income and expense for
the year 2,306 9,167 126 9,293
Exercise of share
based payment - 538 - 538
Dividend to equity
holders - (698) - (698)
Share-based payment
settled in shares
(Note 15B(2)) - 332 - 332
Expiration of liability
in respect of
share-based
payments classified
as a liability - 403 - 403
Balance as at
December 31, 2006 (1,983) 31,463 179 31,642
Changes during 2007:
Net profit for
the year - 8,978 462 9,440
Adjustments arising
from translation of
financial statements
for the year (1) 3,614 3,614 50 3,664
Total recognized
income and expense for
the year 3,614 12,592 512 13,104
Acquisition of
additional right in
subsidiary - - (53) (53)
Exercise of share
based payment - 57 - 57
Dividend to equity
holders - (1,006) - (1,006)
Share-based payment
settled in shares
(Note 15B(2)) - 308 - 308
Balance as at
December 31, 2007 1,631 43,414 638 44,052
Consolidated Statements of Cash Flows for the year ended December 31
2006 2007
$ thousands ($ thousands)
Operating activities
Profit for the year 7,007 9,440
Depreciation 508 766
Gain from sale of property and equipment, net (35) (81)
Increase in value of marketable securities, net (587) (551)
Adjustment of value of long- term loans, net 28 -
Adjustment of value of bank deposits, net (69) -
Deferred taxes, net 4 (133)
Share-based payment 332 308
7,188 9,749
Changes in working capital
Increase in trade receivables (4,210) (5,984)
Increase in other receivables and prepayments (456) 836
Increase in inventories (301) (2,584)
Increase in trade payables 473 992
(Decrease) increase in other payables (1,628) 3,748
Changes in employee benefit 11 105
(6,111) 2,887
Net cash provided by operating activities 1,077 6,862
Investing activities
Long-term loan granted to Rapac group companies, net - (236)
Acquisition of property and equipment (961) (1,341)
Acquisition of other intangible assets - (1,559)
Investments in marketable securities, net (8,459) (27)
Settlement of short-term deposit 2,446 -
Proceeds from sale of property and equipment 66 177
Consolidated for the first time (Schedule A) - (2,656)
Net cash provided by investing activities (6,908) (5,642)
Consolidated Statements of Cash Flows for the (cont'd)
Year ended December 31
2006 2007
$ thousands $ thousands
Financing activities
Proceeds from share capital 418 -
Exercise of share based payment 538 57
Dividend paid (728) (1,006)
Payment of long-term loan (2,342) (28)
Receipt of loan from Rapac group companies 64 (102)
Acquisition of additional rights in subsidiary - (71)
Receipt of long-term financing lease - 2
Net cash used in financing activities (2,050) (1,148)
Translation differences in respect of cash balances 492 731
Net increase (decrease) in cash and cash equivalents (7,389) 803
Cash and cash equivalents at beginning of year 15,259 7,870
Cash and cash equivalents at end of year 7,870 8,673
Schedule A - Investment in company consolidated
for the first
time
Working capital (excluding cash and cash equivalents) - (2,819)
Fixed assets - 266
Other intangible assets - 5,016
Long-term liabilities - (176)
Long-term liabilities in respect of share acquisition - (6,951)
Goodwill created upon acquisition - 7,320
- 2,656
Schedule B - Non-cash transactions
Dividend payable (30) -
Acquisition of additional rights in subsidiary - 167
Expiration of liability in respect of share based
payments classified as liability (376) -
This information is provided by RNS
The company news service from the London Stock Exchange
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