News detail

UCS Group Limited – Key events since listing in September 1998

September 1998: At listing UCS Group consisted of Universal Computer Services, Accsys and Easirun

1998 – 2000: Run up to 2000 / Y2K Universal Knowledge Software (“UKS”) and ComputerKit Group (“CKS”) acquired with good IT trading fuelled by Y2K required patches or replacements

March 2001: CCS Software (“CCS”) acquired in March 2001 – Point of sale FMCG & Specialised goods

February 2002: GAAP point-of-sale acquired Feb 2002 – Point of sale sit down restaurants

May 2002: Ultimate connection acquired May 2002 – Active Retail Microsoft based package largely for clothing and apparel (eg. Foschini) as well as tier 4 Ultisales product sold through dealer channel

September 2003: Affinity Logic (now UCS Solutions (Pty) Ltd) acquired September 2003 – marked first material positioning in IT Services previously the Group was predominantly a software development house for Retailers in store requirements

2003: Decision taken to merge the software businesses and set-up UCS Software Manufacturing (UCSSM) to harness accumulated Intellectual property and ensure Internationally recognised development environment (set-up based on best practice – CMMi certification) for future large scale customised solutions

Merger broken down into two phases
- phase one Universal computer services, CCS Software, Ultimate Connection and VST with UCSSM independent

phase two was planned to roll GAAP and CKS into the merged UCS Software business but this was later cancelled due to the experiences gained in phase one and a critical re evalution of the benefit therefore of concluding phase two

The 2003 decision to merge the software businesses and set-up UCSSM marked the first official move from what used to be a pure passive investment holding company to the current hybrid situation of part active management (e.g. Retail Solutions Division) and part passive investment holding (e.g. Investments Division) where the underlying businesses run autonomously.

May 2004: Branch Software – Engen forecourt and convenience store Point of Sale business acquired in May 2004 and bought as a going concern business directly into UCS Software

July/Aug 2004: The Sale of business agreements to effect the merger of the Software business became effective in around July and August of 2004 where Ultimate Connections name was changed to UCS Software and the going concern businesses of CCS, VST and Universal Computer Services were sold into UCS Software. The Universal Computer Services company was then used as the shell to set-up UCSSM.

October 2005: With effect from October 2005 the going concern business of CEB Maintenance was acquired (“CEB”) to increase the service offering of the solutions and services division i.e. on-site POS (“man-in-van”) support. The business had a two year profit warranty with a capped upside that ended in September 2007 and final payments in November 2007

July 2006: TSSMS and Quadrant Consulting were acquired in July 2006 as the Group embarked on a BEE transaction to appropriately position its services business which was more exposed due to the competitive landscape for IT services. The transaction was non cash and involved an equity swap between UCS Solutions Holdings and TSS as well as a subsequent three year management agreement with resulting incentive payments (deferred purchase price for TSSMS). The going concern business of Quadrant was then subsequently divisionalised into UCS Solutions through an inter Group sale of business agreement around Sept 2006.

March 2007: In March 2007 UCS Group then agreed with TSS to roll the equity position held by TSS in UCS Solutions Holdings as a consequence of the previous transaction concluded in July 2006 into UCS Group equity thereby allowing UCS Group to regain its 100% shareholding in UCS Solutions Holdings - circular to shareholders records this transaction

The Merger of the Software business was only truly contributing positively by the end of the 2006 financial year and 2007 and 2008 financial years have continued to show margin improvements and the benefits of the original “drive for efficiency” project that was driven post the initial merger of the Software businesses.

March 2007: An investment in 51% of Lifeworld Group (a loyalty consulting business) as well as DiverseIT was concluded with effect from 1 March 2007.

February 2007: Strategic decision at Group level taken in early 2007 – workshops in February 2007 to build a value added services division to comprise services businesses that could leverage the UCS in store retail footprint / positioning e.g. loyalty, store value cards, mobile payment solutions, payment processing and switching etc

2007: UCSSM was commercialised in 2007 (2003 to 2006 represented a pure internal investment phase where no external revenues were realised) when it secured its first assemble to order (A2O) project for Hi-Fi Corp in the JD Group.
September 2007: In September 2007 UCS Group completed the establishment, financing and unbundling of Argility Limited (“Argility or ProductCo”) this was a key strategic initiative that represents 1 part of a 3 part software strategy i.e. Technology focus (i.e. UCSSM); People / services focus (i.e. initially UCS Software and now more broadly the retail solutions division) and finally a branded product focus (i.e. Argility Limited)

Decision taken in September 2007 to commence the evolution of the then two divisional structure of the Group into a three divisional structure – rationale disclosed in the investor relations presentation in November 2007 for the year ended 30 September 2007.

1 October 2007 (i.e. the start of the 2008 financial year) marked the kick off of the first year of an initial 2 year outsourced product development agreement between Argility and UCSSM. This contributed materially to UCSSM and therefore UCS Group in 2008 but also impacted the treatment of R&D and well as the capitalisation of development costs.

April 2008: Commence funding of wiWallet in December 2007 and subsequently concluded loan documentation that provided conversion rights and therefore equity participation – signed in April 2008

The 2008 financial year focused on the acquisition / start up of a number of international initiatives viz:-

Aquitec was acquired w.e.f 1 December 2007 but only accounted for from 1 March 2008 once the conditions precedent were fulfilled (SARB approval in February 2008).

UCS Solutions Inc / Kulu Ventures partnership set-up to focus on SAP All-in-One solution for the mid tier retail market in Northern America – Funding commenced in January 2008 and formal agreements signed in August 2008. Currently no equity holding by UCS but the right to convert loan funding to equity by 28 February 2009

Axon / UCS JV for global SAP Retail consulting practice agreed to with a signed heads of agreement in place November 2008 and a teaming agreement for the Shoprite RFP.

September 2008: Computer Software Consultants was acquired w.e.f 1/6/2008 but accounted for from 1/9/2008 following the successful fulfilment of the conditions precedent in August 2008. This acquisition was as a consequence of the strategic object of building the value added reseller division. The business has a profit warranty period that runs until 30 April.

As at 30 September 2008 (the most recent financial year end) the Group reported its segment results in the two divisional format but will now in 2009 having aligned incentives and management reporting structures for the new three divisional format will report accordingly moving forward.