| Mon 22 Oct 2007, 7:05 | | TDH - Tradehold Ltd - Interim Group Results for th |
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TDH
TDH
TDH - Tradehold Ltd - Interim Group Results for the 6 months to 31 August 2007
Tradehold Limited
(Registration number 1970/009054/06)
JSE share code: TDH ISIN: ZAE000026902
Interim Group Results for the 6 months to 31 August 2007
Group income statement
Audited Unaudited Unaudited Unaudited Unaudited Audited
12 months 6 months 6 months 6 months 6 months 12 months
to to to to to to
28/02/07 31/08/06 31/08/07 31/08/07 31/08/06 28/02/07
GBP`000 GBP`000 GBP`000 R`000 R`000 R`000
280 082 127 988 66 063 Revenue 937 988 1 579 785 3 725 236
(6 148) (7 703) (534) Trading loss (7 522) (90 922) (70 636)
(4 482) (1 133) (8 684) Exceptional items (120 977) (11 170) (60 134)
(10 630) (8 836) (9 218) Operating loss (128 499) (102 092) (130 770)
358 330 473 Net interest paid 6 770 3 883 4 469
(10 988) (9 166) (9 691) Loss before taxation (135 269) (105 975) (135 239)
(351) 22 143 Taxation 2 044 463 (3 574)
(10 637) (9 188) (9 834) Loss after taxation (137 313) (106 438) (131 665)
- - (1 488) Loss of associated (21 418) - -
companies
(10 637) (9 188) (11 322) Net loss (158 731) (106 438) (131 665)
Attributable to
(3 501) (3 610) (448) Minority interest (6 363) (42 161) (42 900)
(2 642) (2 991) (448) Resulting from normal (6 363) (35 493) (31 257)
activities
(859) (619) - Resulting from - (6 668) (11 643)
exceptional items
(7 136) (5 578) (10 874) Ordinary (152 368) (64 277) (88 765)
shareholders
(10 637) (9 188) (11 322) (158 731) (106 438) (131 665)
pence pence pence Earnings per share cents cents cents
(1,2) (1,5) (0,6) - before exceptional (9,0) (17,2) (13,9)
items
(2,1) (1,6) (3,1) - basic (43,9) (18,5) (25,6)
(1,7) (1,9) (0,7) - headline earnings (9,7) (22,2) (20,4)
Number of shares for
calculation
347 330 347 330 347 330 of earnings per 347 330 347 330 347 330
share (`000)
Group balance sheet
Audited Unaudited Unaudited Audited
28/02/07 31/08/07 31/08/07 28/02/07
GBP`000 GBP`000 R`000 R`000
92 883 57 154 Non-current assets 829 934 280 369
38 581 27 Property, plant and equipment 392 540 918
42 601 46 363 Investment properties 673 237 597 292
6 940 - Goodwill - 75 403
- 9 143 Interest in associated companies 132 766 -
2 205 1 621 Loans 23 539 30 920
2 556 - Deferred taxation - 35 836
71 785 24 219 Current assets 351 684 1 006 466
26 494 - Inventories - 371 459
9 316 649 Accounts receivable 9 424 130 612
35 975 23 570 Cash and cash equivalents 342 260 504 395
164 668 81 373 Total assets 1 181 618 2 286 835
59 682 48 808 Ordinary shareholders` equity 708 771 814 891
12 12 Preference share capital 144 144
12 298 882 Minority interest 12 808 172 420
40 085 25 212 Non-current liabilities 366 103 562 015
24 281 24 680 Long-term loans 358 378 340 436
416 532 Deferred taxation 7 725 5 832
15 388 - Provisions - 215 747
52 591 6 459 Current liabilities 93 792 737 365
4 422 4 425 Short-term loans 64 256 62 004
48 169 2 034 Other current liabilities 29 536 675 361
164 668 81 373 Total equity and liabilities 1 181 618 2 286 835
Group cash flow statement
Unaudited Unaudited Unaudited Unaudited
6 months 6 months 6 months 6 months
to to to to
31/08/06 31/08/07 31/08/07 31/08/06
GBP`000 GBP`000 R`000 R`000
1 467 (3 615) Cash flow from operations (51 207) 55 694
(16 962) 6 601 Investment activities 93 944 (192 588)
(4 945) (2 501) Net acquisition of fixed assets (35 752) (60 964)
(12 017) 9 102 Other investment activities 129 696 (131 624)
(15 495) 2 986 Net cash flow 42 737 (136 894)
Financing activities
(1 305) 402 - Net debt raised/(repaid) 20 194 33 666
Increase/(decrease) in cash and
(16 800) 3 388 cash equivalents 62 931 (103 228)
Group statement of changes in shareholders` equity
Unaudited Unaudited Unaudited Unaudited
6 months 6 months 6 months 6 months
to to to to
31/08/06 31/08/07 31/08/07 31/08/06
GBP`000 GBP`000 R`000 R`000
66 009 59 682 Balance at 1 March 814 891 708 048
- - Exchange rate adjustments 46 248 162 400
218 - Share based payments - 2 688
(670) - Adjustment to hedging reserve - (8 260)
(5 578) (10 874) Attributable loss for the period (152 368) (64 277)
59 979 48 808 Balance at 31 August 708 771 800 599
Supplementary information
Unaudited Unaudited Unaudited Unaudited
6 months 6 months 6 months 6 months
to to to to
31/08/06 31/08/07 31/08/07 31/08/06
GBP`000 GBP`000 R`000 R`000
4 104 1 883 1. Depreciation for the period 26 735 50 596
7 463 4 258 2. Capital expenditure for the period 60 542 92 007
3. Calculation of headline earnings
(5 578) (10 874) Net loss (152 368) (64 277)
514 8 684 Attributable exceptional items 120 977 4 502
Surplus on revaluation of investment
properties after taxation and
(1 136) (251) minority interest (3 588) (14 005)
Loss/(profit) on sale and scrapping
of fixed assets after taxation and
(266) 95 minority interest 1 349 (3 279)
(6 466) (2 346) (33 630) (77 059)
Audited Unaudited Unaudited Audited
28/02/07 31/08/07 31/08/07 28/02/07
347 330 347 330 4. Number of shares in issue (`000) 347 330 347 330
17,2 14,1 5. Net asset value per share
(pence/cents) 204,1 234,6
4 261 3 080 6. Contingent liabilities 44 721 59 737
Analysis of results
Unaudited Unaudited Unaudited Unaudited
6 months 6 months 6 months 6 months
to to to to
31/08/06 31/08/07 31/08/07 31/08/06
GBP`000 GBP`000 R`000 R`000
(6 130) (2 470) Attributable earnings of Instore plc (35 394) (72 917)
1 066 280 Other Tradehold Ltd group companies 4 003 13 142
(5 064) (2 190) Loss before exceptional items (31 391) (59 775)
(514) (8 684) Attributable exceptional items (120 977) (4 502)
(5 578) (10 874) Net loss (152 368) (64 277)
OPERATING REVIEW
During the review period Tradehold sold, through its wholly-owned subsidiary
Tradegro, 68 million shares in Instore to Seaham Investments Limited, a company
incorporated in the United Kingdom, for GBP9,96 million. This represents 29,8%
of the shares in Instore and reduced Tradehold`s interest from 64,5% to 34,7%.
Seaham and Tradegro have entered into a shareholders` agreement in terms of
which they exercise their votes on a consensus basis. This transaction has a
material effect on how Tradehold reports its results. Instore is now considered
an associate company and its results are no longer consolidated. The change in
reporting method should be kept in mind when comparing the present financial
results with those of the previous reporting period.
Although Tradehold suffered only a small trading loss of GBP0,5 million during
the reporting period, total losses amounted to GBP10,9 million after exceptional
losses of GBP8,7 million and a further loss of GBP1,5 million representing
Tradehold`s share of Instore losses following deconsolidation.
In addition to the changes in the ownership of Instore the period also saw
significant changes in the board and senior management, the most important of
these being the appointment of Peter Burdon, previously the CEO of Thornton`s
plc, as chief executive in the place of Trevor Coates.
Instore plc
During the first half of the year management`s focus was on improving the
performance and profitability of the business. A number of initiatives were
introduced to strengthen Instore`s position as a leading value retailer. While
on the one hand expanding product ranges in certain categories such as homeware
and everyday consumables, a programme was launched to reduce costs at every
level of the business, to raise operating standards in stores and to improve the
supply chain and product availability.
After a very good start to the reporting period, trading conditions became more
difficult, also because of exceptionally poor summer weather which had a
significant effect on sales. Total sales for the period nevertheless increased
by 4,5% to GBP133,8 million from GBP128,0 million in the corresponding period
while the growth on existing business was 4,3%. As the cost of sales remained
almost unchanged at GBP120,7 million, gross profit before exceptional items
increased from 6,1% to 9,7% or GBP13,0 million. Net operating expenses before
exceptional items were slightly lower at GBP16,7 million (2006: GBP17,6 million)
and helped reduce the operating loss before exceptional items from GBP9,7
million to GBP3,6 million, an improvement of GBP6,1 million. After exceptional
items and interest received the total loss before tax was GBP5,2 million
compared to last year`s loss of GBP11,6 million.
During the reporting period stock levels were increased by 22,6% compared to the
2007 year-end to GBP33,3 million to improve product availability in stores. At
the end of the reporting period the company had a net cash balance of GBP10,2
million (2006: GBP11,3 million).
Moorgarth
Tradehold`s property interests are vested in several Moorgarth companies in
which it holds the controlling interest. The portfolio initially consisted
mainly of retail properties, and management continues to work closely with
Instore plc in identifying and developing new space for the chain. At the same
time Moorgarth has started diversifying into offices and industrial premises.
The reporting period coincided with a troubled time for the UK property market
combined with considerable uncertainty in banking circles. Together these
conditions delayed or derailed a number of transactions. The delays affected
mainly planning applications while a number of the large potential assignments
for Moorgarth`s project management business, Bowcliffe, were either deferred or
cancelled. However, Moorgarth managed to maintain a high occupancy level in its
properties.
While a number of acquisition opportunities were investigated, the price
expectation of most sellers does not take into consideration the much higher
cost of borrowing, and the Group has no firm acquisitions in the pipeline.
However, the refurbishing of a number of the properties in the portfolio is
continuing.
Although market conditions are not expected to change materially in the second
half of the year, the medium-term outlook remains positive for both Moorgarth
and Bowcliffe.
COMMENTS ON THE RESULTS
Exceptional items
Exceptional items consisted of the following:
- Loss with the sale of Instore shares (GBP3,613 million)
- Mark-down of Instore investment to market price of
11,5 pence/share (GBP4,687 million)
- Impairment of staff share loans (GBP0,384 million)
- TOTAL (GBP8,684 million)
DIVIDEND
Based on the results achieved, the board does not recommend paying a dividend to
shareholders.
OUTLOOK
Tradehold expects to achieve approximate break-even status before exceptional
items for the full year. The board remains confident of the medium to long-term
potential of its major investments. The new leadership at Instore is refocusing
on the basic principles of the discount market while Moorgarth is establishing a
sound, diversified portfolio aimed at long-term capital growth.
ACCOUNTING POLICY
Accounting policies comply with International Financial Reporting Standards
which have been applied consistently in line with those adopted for the year
ended 28 February 2007. The interim results were prepared in accordance with IAS
34 - Interim Financial Reporting, and have not been audited.
REPORTING CURRENCY
As the operations of Tradehold`s subsidiaries are conducted in pound sterling
and because of the distortion caused by the fluctuating value of the rand, the
company is reporting its results in the former currency. Rand equivalents are
provided to comply with regulatory requirements.
CH Wiese C Moore
Chairman Director
Luxemburg
19 October 2007
Sponsor: Barnard Jacobs Mellet Corporate Finance (Pty) Ltd
Date: 22/10/2007 07:05:01 Produced by the JSE SENS Department.
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