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BSB
BSB
BSB - Busby - Unaudited Results For The Six Months Ended 31 December 2007
THE HOUSE OF BUSBY LIMITED
(Incorporated in the Republic of South Africa)
(Registration No. 1997/009173/06)
Share code: BSB & ISIN number: ZAE000013637
("Busby" or "the company)
BUSBY
The hide to seek
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
- Net income before tax up 65%
- Headline earnings per share up 47%
COMMENTS
Nature of the business
The House of Busby Limited is a leading wholesaler and retailer operating in
South Africa and Australia. The group distributes an extensive range of
clothing, luggage, handbags, accessories, eyewear and footwear, bearing
international brand names, house brands and private labels.
Review of results
The directors are pleased with the results for the six months ended 31
December 2007. The group performed well, with revenue up by 34%, operating
income before depreciation up by 62% and earnings per share up by 47%.
Of particular significance was the group`s ability to generate cash flow
which saw cash generated from operations reaching R39,0 million (2006:
(R0,6) million). The group invested a net R55 million (2006: R24 million) in
new store fittings and the acquisition of minority interests as detailed
below.
The group`s increased finance cost is in line with interest rate movements
experienced in the South African economy.
The group purchased the minority interests in Picto-Busby (Pty) Limited,
Busbrand (Pty) Limied and Golden Pond Trading 291 (Pty) Limited (Mango). The
group also acquired a 50,1% interest in Ginsberg Promotional Gifts (Pty)
Limited.
Review of operations
All divisions in the group performed well. Australia continues to deliver
meaningful growth. The relative stability of the rand enabled the South
African distribution division to stabilise its gross margin.
The tightening of the credit cycle, coupled with the decreasing availability
of credit resulted in like-for-like growth decreasing in the South African
Retail division. However, the group delivered meaningful growth across its
portfolio of brands.
The South African Retail division successfully launched the Esprit brand in
South Africa, with the first flagship store opening at the V&A Waterfront.
The group continued to expand its retail presence with 19 new stores being
opened in South Africa and seven new stores in Australia during the period
under review.
The Australian operation continued to expand with the majority of the growth
emanating from the Australian distribution division. This was the primary
driver that led to distributions share of EBITDA increasing to 69% of the
total.
Prospects
The rand`s recent volatility and decline will impact on the margin of the
South African distribution business. The power shortages and high interest
rates will impact on consumer sentiment in the short term, however the
directors believe that the long term fundamentals and product offerings are
compelling to the South African consumer.
The Australian economy continues to perform well. The recent rate hikes will
however dampen consumer spending. This will also lead to a decline in growth
which will be offset by the group`s retail expansion plans.
Commitments
The group has operating lease commitments of R86,0 million (2006: R45,7
million) in the next 12 months, and R153,8 million (2006: R66,5 million)
thereafter.
UPDATE ON ETHOS-BACKED PRIVATE EQUITY BUYOUT
The scheme of arrangement pursuant to which Main Street 251 (Proprietary)
Limited, a company controlled by Ethos Private Equity Fund V is to acquire
the entire issued share capital in the company other than shares held by the
excluded members (as detailed in the scheme of arrangement incorporated in
the circular to Busby shareholders dated 19 December 2007) was approved of
by the requisite majority of scheme members at the scheme meeting held on
Monday, 11 February 2008. Application is to be made to the High Court of
South Africa on 11 March 2008 for an order sanctioning the scheme of
arrangement, subject only to the securing of the necessary approval from the
Competition Authorities to implement the transaction (and which approval is
expected to be secured by no later than 31 May 2008). Further announcements
regarding the date on which the scheme will be implemented will be published
on Sens and in the press in due course.
BASIS OF PREPARATION
The unaudited interim results of the group for the six months ended 31
December 2007 have been prepared in accordance with International Financial
Reporting Standards (IFRS) and the group`s accounting policies. The
accounting policies are consistent with those adopted in the financial year
ended 30 June 2007.
This interim report complies with International Accounting Standard 34 -
Interim financial reporting, the Companies Act and the Listing Requirements
as prescribed by the JSE Limited.
On behalf of the board of directors
K L Brouze
Chief Executive Officer
Johannesburg
21 February 2008
SUMMARISED CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
Six months six months 12 months
ended ended ended
31 Dec 31 Dec 30 June
2007 2006 Change 2007
R`000 R`000 % R`000
Revenue 741 093 552 731 34 1 062 302
Operating income
before
profit/(loss) on
foreign exchange 116 160 69 492 67 123 971
Profit/(loss) on (553) 2 003 2 967
foreign exchange
Operating income
before depreciation
and amortisation of 115 607 71 495 62 126 938
intangibles
Depreciation 13 171 9 636 21 683
Amortisation of - - 138
intangibles
Operating income
before net
finance charges 102 436 61 859 105 117
Net finance cost 6 273 3 529 6 068
Interest received 248 429 1 045
Interest paid (6 521) (3 958) (7 113)
Net income before 96 163 58 330 65 99 049
taxation
Taxation 27 887 16 916 30 979
Net income after 68 276 41 414 65 68 070
taxation
Attributable to 9 231 1 383 6 407
minorities
Net income
attributable to
ordinary
shareholders 59 045 40 031 47 61 663
Weighted average
number of shares
in issue (`000) 50 376 50 292 50 292
(net of treasury
shares)
Headline earnings 117,2 79,6 47 122,80
per share (cents)
Earnings per share 117,2 79,6 47 122,60
(cents)
Fully diluted 112,5 77,9 44 118,90
earnings per share
(cents)
Fully diluted 112,5 77,9 44 119,2
healine earnings
per share (cents)
SUMMARISED CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
31 Dec 31 Dec 30 June
2007 2006 2007
R`000 R`000 R`000
ASSETS
Non-current assets 167 411 94 458 104 772
Property, plant and equipment 112 547 74 632 87 200
Intangible assets 45 110 8 924 8 324
Deferred taxation 9 754 10 902 9 248
Current assets 532 510 419 682 442 029
Inventories 302 123 208 432 266 012
Trade and other receivables 182 600 179 878 140 951
Bank balances and cash 47 787 31 372 35 066
Total assets 699 921 514 140 546 801
EQUITY AND LIABILITIES
Shareholders` funds 345 554 271 961 295 930
Minority interest 29 920 (9 997) (4 581)
Overdraft 139 362 105 631 70 422
Interest-bearing debt 10 369 10 116 8 998
Current liabilities 174 716 136 429 176 032
Total equity and liabilities 699 921 514 140 546 801
Number of shares in issue
(`000)
(net of treasury shares) 50 460 50 217 50 292
Net asset value per share 685 542 588
(cents)
Net tangible asset value per 595 524 572
share (cents)
SEGMENTAL ANALYSIS (Unaudited)
Revenue EBITDA Net asset value
31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec
2007 2006 2007 2006 2007 2006
% % % % % %
Distribution 55 60 69 56 66 67
Retail 45 40 31 44 34 33
Total 100 100 100 100 100 100
South Africa 67 74 53 57 82 90
Australia 33 26 47 43 18 10
Total 100 100 100 100 100 100
RECONCILIATION OF HEADLINE EARNINGS
Unaudited Unaudited Audited
Six months Six months 12 months
ended ended ended
31 Dec 31 Dec 30 June
2007 2006 2007
R`000 R`000 R`000
Net income attributable to 59 045 40 031 61 663
ordinary shareholders
Loss on disposal of property, - - 126
plant and equipment
Headline earnings 59 045 40 031 61 789
SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
Six months Six months 12 months
ended ended ended
31 Dec 31 Dec 30 June
2007 2006 2007
R`000 R`000 R`000
Cash generated from/(utilised 39 002 (602) 84 257
in) operations
Net finance cost (6 273) (3 529) (6 068)
Dividend paid (10 130) (7 030) (7 032)
Taxation paid (25 404) (10 568) (28 704)
Cash flows from operating (2 805) (21 729) 42 453
activities
Cash flows from investing (55 192) (24 214) (48 545)
activities
Cash flows from financing 1 778 (1 443) (2 391)
activities
Decrease in cash and cash (56 219) (47 386) (8 483)
equivalents
Cash and cash equivalents at (35 356) (26 873) (26 873)
the beginning of year
Cash and cash equivalents at (91 575) (74 259) (35 356)
the end of year
Statement of changes in equity
Accu-
Share Share mulated Minority
capital premium NDR profits interest Total
R`000 R`000 R`000 R`000 R`000 R`000
Balance at 51 73 766 15 645 149 198 (11 472) 227 188
30 June 2006
Currency 826 92 918
translation
differences
Net income 40 031 40 031
attributable
to ordinary
shareholders
Net income 1 383 1 383
attributable
to
minorities
Share-based 696 696
payments
Shares (1 222) (1 222)
repurchased
Dividends (7 030) (7 030)
paid
Balance at 51 72 544 17 167 182 199 (9 997) 261 964
31 December
2006
Share 170 170
options
exercised
Currency 1 595 392 1 987
translation
differences
Net income 21 632 21 632
attributable
to ordinary
shareholders
Net income 5 024 5 024
attributable
to
minorities
Share-based 574 574
payments
Balance at 51 72 714 19 336 203 831 (4 581) 291 351
30 June 2007
Share 407 407
options
exercised
Share-based 300 300
payments
Net income 59 045 59 045
attributable
to ordinary
shareholders
Net income 9 231 9 231
attributable
to
minorities
Transactions 25 270 25 270
with
minorities
Dividends (10 (10
paid 130) 130)
Balance at 51 73 121 19 636 252 746 29 920 375 474
31 December
2007
THE HOUSE OF BUSBY LIMITED
Incorporated in the Republic of South Africa
Registration number: 1997/009173/06
Share code: BSB ISIN: ZAE000013637
TRANSFER SECRETARIES:
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg 2001. PO Box 61051, Marshalltown 2107
REGISTERED OFFICE:
11 Height Street, Doornfontein 2094.
PO Box 16647, Doornfontein 2028
DIRECTORS:
Keith Brouze Chief executive officer, David Brouze Non-executive director,
Martin Duarte Managing director - Busby Retail,
Mark Gordon Operations director, Shawn Lashansky Financial director, Selwyn
Moss Managing director - Eyewear, Steven Stein Independent non-executive
chairman
www.busbyhouse.com
Date: 21/02/2008 17:17:01 Produced by the JSE SENS Department.
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