| Mon 5 May 2008, 16:37 | | TDH - Tradehold - Group results for the 12 months |
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TDH
TDH
TDH - Tradehold - Group results for the 12 months to 29 February 2008
Tradehold Limited
(Registration number 1970/009054/06)
JSE share code: TDH ISIN: ZAE000026902
Group results for the 12 months to 29 February 2008
OPERATING REVIEW
During the year Tradehold sold, through its wholly-owned subsidiary Tradegro, 68
million shares or 29,8% of Instore plc, in which it held a controlling interest
of 64,5%, to Seaham Investments Limited for GBP9,96 million. In terms of a
shareholders` agreement between the parties, Seaham and Tradegro will exercise
their votes on a consensus basis. At the end of the reporting period Tradehold`s
interest in Instore was 35,8%.
The aforementioned transaction has a material effect on how Tradehold reports
its results as those of Instore are no longer consolidated, given that Instore
is now accounted for on an associated company basis. This change in reporting
method should be kept in mind when comparing the 2008 financial results with
those of 2007.
In the year to 29 February 2008 Tradehold recorded a loss of GBP13,7 million of
which GBP8,2 million relates to the loss on the disposal of the Instore shares
and the consequent impairment of its investment in that company. Tradehold also
reported a GBP2,3 million loss on its investment in Instore following
deconsolidation.
Instore plc
In addition to the changes in the share ownership of Instore, the year also saw
considerable changes to both the board and senior management, the most important
being the appointment of Mr Peter Burdon, previously CEO of Thornton`s plc, as
chief executive in the place of Mr Trevor Coates, and the retirement of Sir
Geoff Mulcahy as a non-executive director. Following the purchase of shares by
Seaham Mr Aziz Tayub joined the board.
During the year Instore made considerable progress in its return to
profitability by reducing its trading loss from GBP9,1 million to GBP2,3 million
on turnover that increased 6% to GBP296,8 million in the highly competitive
value sector of the British retail market. Like-for-like sales grew 2,9% while
the gross profit margin increased to 10,8%.
Linked to this improvement are the substantial changes to the strategy of the
business, its organisation and operational culture initiated in the period under
review and which will continue throughout the new financial year. Departments
across the business are being re-organised and their management strengthened
with the appointment of experienced individuals with proven track records while
a significant investment was made in upgrading information technology systems.
Administration costs reduced by 18,8% due to a major restructuring of staff
while five new stores were opened and nine closed as part of the restructuring
programme.
In December 2007 Instore acquired from the Marsdon Mills Group 33 Ponden Mill
stores. The acquisition is complementary to the company`s existing business.
Moorgarth Properties
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 to identify and develop new space for that business. However, at the
same time Moorgarth is increasingly diversifying into offices and industrial
premises.
The period under review was a very difficult one for the British property
industry as a whole. The turmoil in the credit and banking sectors led to a lack
of confidence in the property market and created significant uncertainty among
both buyers and sellers. These difficult conditions are clearly mirrored in the
results of Moorgarth which reported a loss after tax of GBP0,8 million as
against a profit GBP2,0 million in 2007. No new properties were acquired during
the year and the focus was on managing the existing portfolio, valued at GBP44,9
million (2007: GBP45,0 million).
COMMENTS ON THE RESULT
Exceptional items
Loss on disposal of Instore shares (GBP3,6 million)
Impairment of investment in Instore (GBP4,6 million)
Legal and professional expenditure (GBP1,3 million)
Impairment of other loans (GBP0,7 million)
Recovery on previous write-off on disposal of subsidiary GBP0,2 million
TOTAL (GBP10,0 million)
DIVIDEND
The board does not propose a dividend in respect of the financial year to 29
February 2008.
OUTLOOK
Although the results for 2008 were disappointing, we are heartened by the
improvement in the results of Instore which has come through a difficult few
years. During the review period we could start refocusing the business under its
new leadership and it is now well equipped for a full return to profitability
ACCOUNTING POLICY
Accounting policies comply with International Financial Reporting Standards
(IFRS) which have been applied consistently in line with those adopted for the
year ended 28 February 2007.
The group`s auditors, PricewaterhouseCoopers Inc, reviewed the results and their
unqualified review opinion is available on request from the company secretary.
REPORTING CURRENCY
As the operations of Tradehold`s subsidiaries are con-ducted 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.
C Moore HRW Troskie
Director Director
Luxembourg
5 May 2008
GROUP INCOME STATEMENT
Reviewed Audited
12 months to 12 months to
(GBP`000) 29/02/08 28/02/07
Revenue 66 063 280 082
Trading loss (1 719) (6 148)
Exceptional items (10 029) (4 482)
Operating loss (11 748) (10 630)
Net interest paid 531 358
Loss before taxation (12 279) (10 988)
Taxation (396) (351)
Loss after taxation (11 883) (10 637)
Loss of associated companies (2 473) -
Net loss (14 356) (10 637)
Attributable to:
Minority interest (606) (3 501)
Resulting from normal activities (606) (2 642)
Resulting from exceptional items - (859)
Ordinary shareholders (13 750) (7 136)
(14 356) (10 637)
Earnings per share (pence)
- before exceptional items (1,1) (1,2)
- basic (4,0) (2,1)
- headline earnings (0,8) (1,7)
Number of shares for calculation of earnings per share (`000)
347 330 347 330
GROUP BALANCE SHEET
Reviewed Audited
(GBP`000) 29/02/08 28/02/07
Non-current assets 54 665 92 883
Property, plant and equipment 40 38 581
Investment properties 44 901 42 601
Goodwill - 6 940
Interest in associated companies 9 312 -
Other investments - loans 412 2 205
Deferred taxation - 2 556
Current assets 26 886 71 785
Inventories - 26 494
Accounts receivable 1 216 9 316
Cash and cash equivalents 25 670 35 975
Total assets 81 551 164 668
Ordinary shareholders` equity 46 254 59 682
Preference share capital 12 12
Minority interest 638 12 298
Non-current liabilities 31 128 40 085
Long-term loans 31 128 24 281
Deferred taxation - 416
Other non-current liabilities - 15 388
Current liabilities 3 519 52 591
Short-term loans 499 4 422
Other current liabilities 3 020 48 169
Total equity and liabilities 81 551 164 668
GROUP CASH FLOW STATEMENT
Reviewed Audited
12 months to 12 months to
(GBP`000) 29/02/08 28/02/07
Cash flow from operations (6 158) 17 075
Dividend paid to minority shareholders - (360)
Cash retained from operations (6 158) 16 715
Investment activities (7 071) (34 882)
Net acquisition of fixed assets (2 688) (20 670)
Other investment activities (4 383) (14 212)
Net cash flow (13 229) (18 167)
Financing activities - net debt raised 2 924 11 225
Decrease in cash and cash equivalents (10 305) (6 942)
GROUP STATEMENT OF CHANGES IN EQUITY
Reviewed Audited
12 months to 12 months to
(GBP`000) 29/02/08 28/02/07
Balance at 1 March 59 682 66 009
Exchange rate adjustments 154 471
Revaluation of land and buildings 168 -
Share based payments - 657
Hedging reserve adjustments - (319)
Net loss for the year (13 750) (7 136)
46 254 59 682
SUPPLEMENTARY INFORMATION
Reviewed Audited
12 months to 12 months to
(GBP`000) 29/02/08 28/02/07
1. Depreciation for the year 1 997 6 791
2. Capital expenditure for the year 3 988 24 114
3. Calculation of headline earnings
Net loss (13 750) (7 136)
Attributable exceptional items 10 029 3 125
Shortfall/(surplus) on revaluation of investment properties after
taxation and minority interest 950 (1 785)
Loss/(profit) on sale and scrapping of fixed assets after taxation
and minority interest 53 (84)
(2 718) (5 880)
Reviewed Audited
(GBP`000) 29/02/08 28/02/07
4. Number of shares in issue (`000) 347 330 347 330
5. Net asset value per share (pence) 13,3 17,2
6. Contingent liabilities 11 094 4 261
7. Operating lease commitments 251 342 578
ANALYSIS OF RESULTS
Reviewed Audited
12 months to 12 months to
(GBP`000) 29/02/08 28/02/07
Attributable earnings of Instore plc (3 287) (5 873)
Other Tradehold Ltd group companies (434) 1 703
Loss before exceptional items (3 721) (4 170)
Attributable exceptional items (10 029) (2 966)
Net loss (13 750) (7 136)
Date: 05/05/2008 16:37:01 Produced by the JSE SENS Department.
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