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KWV
KWV
KWV - KWV Investments - Unaudited consolidated results for the six months ended
31 December 2007 and dividend declaration
KWV INVESTMENTS LIMITED
ISIN number: ZAE000004016
JSE share code: KWV
Registration number 1979/007263/06
Unaudited consolidated results for the six months ended 31 December 2007
SALIENT FEATURES
- Increase in headline earnings per share: 17,6%
- Increase in interim dividend per share: 20%
- Increase in net asset value per share: 17,1%
CONSOLIDATED BALANCE SHEET
Unaudited Audited
31 December 30 June
2007 2006 2007
R`000 R`000 R`000
Restated
Non-current assets
Investment in associate 1 256 992 1 073 595 1 157 623
Current assets 459 67 329
Cash and cash equivalents 449 67 329
Taxation receivable 10 - -
Total assets 1 257 451 1 073 662 1 157 952
EQUITY AND LIABILITIES
Capital and reserves
Share capital 42 000 42 000 42 000
Reserves 1 214 800 1 031 147 1 115 390
Ordinary shareholders` funds 1 256 800 1 073 147 1 157 390
Current liabilities 651 515 562
Payables 651 511 550
Taxation payable - 4 12
Total equity and liabilities 1 257 451 1 073 662 1 157 952
CONSOLIDATED INCOME STATEMENT
Unaudited Audited
Year
Six months ended ended
31 December 30 June
2007 2006 % 2007
R`000 R`000 Change R`000
Income from associate 161 778 143 421 12,8 249 399
Interest income 28 67 165
Administrative expenses (514) (457) (970)
Profit before taxation 161 292 143 031 248 594
Taxation (8) (19) (47)
161 284 143 012 248 547
Cents Cents Cents
Earnings per share
- attributable earnings 384,0 340,5 12,8 591,8
- headline earnings 378,2 321,7 17,6 543,8
Dividends declared per share 144,0 120,0 20,0 271,0
- interim 144,0 120,0 120,0
- final - - 151,0
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
Unaudited Audited
Six months ended Year ended
31 December 30 June
2007 2006 2007
Note R`000 R`000 R`000
Interest in associate`s
"net income recognised
directly in equity" 2 (127) (60) 27 673
Dilution of investment
in associate (554) (1 834) (5 264)
Net profit attributable to
ordinary shareholders 161 284 143 012 248 547
Total recognised income
for the year 160 603 141 118 270 956
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Audited
Year
Six months ended ended
31 December 30 June
2007 2006 2007
R`000 R`000 R`000
Cash flow from operating
activities
Administrative expenses (514) (457) (970)
Change in payables 101 70 120
Cash utilised in operations (413) (387) (850)
Dividends received 63 955 49 873 100 919
Dividends paid (63 420) (49 560) (99 960)
Interest received 28 67 165
Taxation paid (30) (20) (39)
Net increase/(decrease) in cash
and cash equivalents 120 (27) 235
Cash and cash equivalents at
beginning of the period 329 94 94
Cash and cash equivalents at
end of the period 449 67 329
NOTES TO THE INTERIM REPORT
for the six months ended 31 December 2007
Unaudited Audited
Year
Six months ended ended
31 December 30 June
2007 2006 2007
R`000 R`000 R`000
1. EARNINGS PER SHARE
Ordinary shares issued
(thousands) 42 000 42 000 42 000
Reconciliation of headline
earnings
Net profit attributable to
ordinary shareholders 161 284 143 012 248 547
Share in adjustments (net of (2 429) (7 885) (20 152)
taxation) of associate
Headline earnings 158 855 135 127 228 395
Cents Cents Cents
Earnings per share
- attributable earnings 384,0 340,5 591,8
- headline earnings 378,2 321,7 543,8
R`000 R`000 R`000
2. RECONCILIATION OF MOVEMENTS
ON EQUITY AND RESERVES
Share capital at beginning
and end of the period 42 00 42 000 42 000
Retained earnings
Balance at beginning
of the period (233) (351) (351)
Net profit attributable to
ordinary shareholders 161 284 143 012 248 547
Net transfer to equity
reserve (97 269) (91 715) (143 216)
Dilution of investment in
associate (554) (1 834) (5 264)
Unclaimed dividends written
back - - 11
Dividends (63 420) (49 560) (99 960)
Balance at end of the period (192) (448) (233)
Equity reserve
Balance at beginning
of the period 1 115 623 937 194 937 194
Additions for the period:
- net transfer from retained
earnings 97 269 91 715 143 216
- interest in items
recognised directly in
associate`s equity (127) (60) 27 673
- other movements in equity
of associate 2 227 2 746 7 540
Balance at end of the period 1 214 992 1 031 595 1 115 623
Reserves at end of the period 1 214 800 1 031 147 1 115 390
Equity at end of the period 1 256 800 1 073 147 1 157 390
3. BASIS OF PREPARATION
The interim report have been prepared in accordance with the
recognition and measurement principles of International Financial
Reporting Standards (IFRS), IAS 34: Interim Financial Reporting,
the requirements of the South African Companies Act, Act 61 of
1973, as amended, and the Listings Requirements of the JSE
Limited.
The accounting policies and the methods of computation are
consistent with those applied in the previous financial periods,
with the exception of a number of new statements, amendments and
interpretations to IFRS that became effective during the current
reporting period. The adoption of these new policies had no impact
on the results of either the current or prior periods, except as
disclosed in note 4.
4. RESTATEMENT OF COMPARATIVE INTERIM RESULTS
As disclosed in the 2007 annual report the company`s associate,
Distell Group Limited, had changed its accounting policy regarding
Employee Benefits, as allowed in terms of the amended IAS 19-
statement. This change in accounting policy impacted on Distell`s
31 December 2006 interim results and accordingly KWV Investments`
comparative interim results have also been restated. The effect of
the restatement on the 31 December 2006 interim period is a R12,6
million increase in the investment in associate and in equity, but
the change in policy had no effect on net profit.
5. GROUP STRUCTURE
The sole investment of KWV Investments Limited is an effective
interest of 29,38% (2006: 29,50%) in the issued share capital of
Distell Group Limited (Distell), held via Remgro-KWV Investments
Limited. Each issued share in KWV Investments represents 1,397
issued shares in its associate, Distell.
6. FINANCIAL RESULTS
In the six months under review Distell`s revenue grew by 12,9% to
R4,8 billion, on a sales volume increase of 7,6%. It achieved an
increase of 17,3% in trading income as a result of satisfactory
revenue growth, as well as from improved throughput and the
continued improvement in efficiencies across its business.
Distell`s ability to raise the performance of its operating units
once again allowed for significantly greater brand investment,
sales support and representation, as well as stepped-up marketing
activities, while its net operating margin improved from 15,6% to
16,2%.
KWV Investments` results reflects this improved performance and
attributable earnings and headline earnings for the six months
under review increased by 12,8% and 17,6% respectively, while the
dividend declared increased by 20%, compared to the prior period.
7. PROSPECTS
The board of Distell has indicated the following:
- While South Africa`s economic fundamentals remain sound, the
expected moderation in real disposable income could have an
adverse impact on consumer spending in the short term.
Nevertheless, the growth in consumer demand is expected to
continue, albeit at a slower pace. The erratic supply of
electricity has a disruptive impact on business and if this
deteriorates it could impact on Distell`s ability to meet
consumer demand.
- Leading indicators suggest that global economic growth is
likely to slow down considerably in the year ahead, despite
the still robust growth occurring in the major emerging
markets.
- The trading environment is expected to remain competitive
locally and further afield and the alcoholic beverage industry
will continue to face challenges globally. The Distell group
believes its business is appropriately structured, with a
portfolio of compelling brands across a range of segments and
price points that will allow it to compete effectively, and to
continue to capture opportunities in key markets.
- The group expects to continue to reflect growth in revenue and
headline earnings.
These expectations will largely be mirrored in the results of
KWV Investments Limited.
8. DECLARATION OF INTERIM DIVIDEND
The directors have resolved to declare an interim dividend of
144,0 cents (2006: 120,0 cents) per share.
Last day to trade cum dividend Friday 7 March 2008
Trading ex dividend commences Monday 10 March 2008
Record date Friday 14 March 2008
Dividend payment date Monday 17 March 2008
Share certificates may not be dematerialised or rematerialised
between Monday, 10 March 2008 and Friday, 14 March 2008, both days
inclusive.
Signed on behalf of the board of directors
PBB Hugo MJ Loubser
Chairman Chief Executive Officer
Paarl
19 February 2008
Directors: D de Wet, AS du Plessis, PBB Hugo, MJ Loubser
Company secretary: AW Eksteen
Registered office: La Concorde, 57 Main Street, Suider-Paarl, 7646
Transfer secretaries: Computershare Investor Services 2004 (Pty) Ltd, PO Box
61051, Marshalltown, 2001
Sponsor: KPMG Services (Pty) Ltd
KWV Investments Limited is a subsidiary of KWV Limited
Date: 19/02/2008 16:47:54 Produced by the JSE SENS Department.
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