| Tue 9 Sep 2008, 14:35 | | SHF/SHFF - Steinhoff/Steinhoff Investments - Audited results for the year |
|
SHF
SHF SHFF
SHF/SHFF - Steinhoff/Steinhoff Investments - Audited results for the year
ended 30 June 2008
STEINHOFF INTERNATIONAL HOLDINGS LTD
Registration number: 1998/003951/06
(Incorporated in the Republic of South Africa)
JSE share code: SHF ISIN code: ZAE000016176
("Steinhoff" or "the company" or "the group")
STEINHOFF INVESTMENT HOLDINGS LIMITED
(Steinhoff Investments)
Registration number: 1954/001893/06
(Incorporated in the Republic of South Africa)
JSE share code: SHFF ISIN code: ZAE 000068367
Audited results for the year ended 30 June 2008
HIGHLIGHTS
64% increase in net cash flow from operating activities
32% increase in headline earnings
23% increase in headline earnings per ordinary share
10,3% operating margin increased from 8,9%
UK Retail turnaround continues
European Retail first-time consolidation
www.steinhoffinternational.com
To view results on a mobile: www.steinhoff.mobi
CONDENSED CONSOLIDATED INCOME STATEMENT
Audited Audited*
Year ended Year ended
30 June 2008 30 June 2007 %
Notes R`000 R`000 change
Revenue 45 045 885 34 228 573 32
Operating profit before 5 492 166 3 754 696 46
depreciation and capital
items
Depreciation (830 553) (720 539)
Operating profit before 4 661 613 3 034 157 54
capital items
Capital items from 1 (192 890) (56 505)
continuing operations
Earnings before interest, 4 468 723 2 977 652 50
dividend income, associate
earnings and taxation
Net finance charges (704 637) (453 827)
Dividend income 584 24 209
Earnings before associate 3 764 670 2 548 034 48
earnings and taxation
Share of profit of associate 37 071 67 159
companies
Profit before taxation 3 801 741 2 615 193 45
Taxation (366 133) (325 208)
Profit for the year from 3 435 608 2 289 985 50
continuing operations
Profit for the year from - 142 552
discontinued operations
Profit on disposal of - 541 903
discontinued operations
Profit for the year 3 435 608 2 974 440 16
Attributable to:
Equity holders of the parent 3 310 037 2 969 621 11
Minority interest 125 571 4 819
Profit for the year 3 435 608 2 974 440 16
Headline earnings per 263,5 200,1* 32
ordinary share (cents) -
restated
- per previous definition 264,4 215,3 23
Diluted headline earnings 251,4 192,8* 30
per ordinary share (cents)
From continuing and
discontinued operations:
Basic earnings per share 249,8 241,9 3
(cents)
Fully diluted earnings per 238,8 233,0 2
share (cents)
From continuing operations:
Basic earnings per share 249,8 184,3 36
(cents)
Fully diluted earnings per 238,8 177,1 35
share (cents)
Number of shares in issue 1 268 743 1 256 453 1
(`000)
Weighted average number of 1 280 541 1 188 015 8
shares in issue (`000)
Earnings attributable to 2 3 199 039 2 873 508 11
ordinary shareholders
(R`000)
Headline earnings
attributable
to ordinary shareholders
(R`000) - restated 3 3 374 761 2 377 760 42
- per previous definition 3 385 185 2 557 638 32
Distribution per ordinary 60 50 20
share (cents)
Average currency translation 10,7631 9,4103 14
rate (rand:euro)
*Headline earnings, diluted headline earnings per ordinary share and capital
items were restated for the year ended 30 June 2007 in accordance with SAICA
Circular 8/2007 - Headline Earnings, effective for financial periods ending on
or after 31 August 2007.
ADDITIONAL INFORMATION
Audited Audited*
Year ended Year ended
30 June 2008 30 June 2007
R`000 R`000
Note 1: Capital items
Goodwill adjustments (15 581) (14 648)
Impairments (166 314) (67 252)
Loss on scrapping of rental fleet vehicles (7 650) (8 523)
Profit on disposal of business - 978
(Loss)/profit on disposal of property, (14 416) 32 940
plant and equipment
Negative goodwill released on business 8 723 -
combination
Profit on disposal of investment property 2 348 -
Capital items from continuing operations (192 890) (56 505)
Profit on disposal of discontinued - 541 903
operations
Capital items included in discontinued - (6 678)
operations
(192 890) 478 720
Note 2: Earnings attributable to ordinary
shareholders
Earnings attributable to equity holders 3 310 037 2 969 621
Dividend entitlement on non-redeemable (110 998) (96 113)
cumulative preference shares (including
STC)
3 199 039 2 873 508
Note 3: Headline earnings attributable to
ordinary shareholders
Earnings attributable to equity holders 3 310 037 2 969 621
Adjustment for:
Capital items (note 1) 192 890 (478 720)
Taxation effects on capital items (17 231) (15 925)
Profit on disposal of property, plant and 63 (1 579)
equipment included in share of profit of
associate companies
Impairments included in share of profit of - 476
associate companies
Dividend entitlement on non-redeemable (110 998) (96 113)
cumulative preference shares (including
STC)
3 374 761 2 377 760
CONDENSED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
Audited Audited
Year ended Year ended
30 June 2008 30 June 2007
R`000 R`000
Actuarial (losses)/gains recognised in (13 137) 37 709
equity
Cash flow hedges recognised in equity 15 219 (50 357)
Exchange differences on consolidation of 2 353 086 248 662
foreign subsidiaries
Fair value adjustments on available-for- (3 157) -
sale financial assets
Net income recognised directly in equity 2 352 011 236 014
Profit for the year 3 435 608 2 974 440
Total recognised income and expense for the 5 787 619 3 210 454
year
Attributable to:
Equity holders of the parent 5 021 490 3 205 635
Minority interest 766 129 4 819
5 787 619 3 210 454
CONDENSED CONSOLIDATED BALANCE SHEET
Audited Audited
30 June 2008 30 June 2007
R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment, investment 11 288 468 7 998 870
properties and biological assets
Intangible assets and goodwill 21 226 595 10 247 043
Investments and loans 1 278 679 2 350 921
Interests and loans - associate companies 2 457 992 866 282
Deferred taxation assets 1 390 020 706 212
37 641 754 22 169 328
Current assets
Accounts receivable, short-term loans and
other current assets 8 725 726 6 848 698
Inventories 5 553 033 3 451 445
Cash and cash equivalents 4 995 231 5 064 987
19 273 990 15 365 130
Total assets 56 915 744 37 534 458
EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital and reserves 20 772 947 16 232 948
Preference share capital 1 042 474 1 042 474
21 815 421 17 275 422
Minority interest 2 968 732 82 121
Total equity 24 784 153 17 357 543
Non-current liabilities
Deferred taxation liabilities 3 203 448 991 324
Interest-bearing long-term liabilities 12 684 508 7 261 391
Other long-term liabilities and provisions 1 414 066 598 591
17 302 022 8 851 306
Current liabilities
Interest-bearing short-term liabilities 4 001 799 3 791 143
Accounts payable, provisions and other 10 827 770 7 534 466
current liabilities
14 829 569 11 325 609
Total equity and liabilities 56 915 744 37 534 458
Net asset value per ordinary share (cents) 1 688 1 292
Gearing ratio (net) (%) 38 24
Closing exchange rate (rand:euro) 12,3341 9,5735
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Audited Audited
Year ended Year ended
30 June 2008 30 June 2007
R`000 R`000
Operating profit before working capital 5 386 962 3 929 479
changes
Net changes in working capital 97 890 (475 631)
Cash generated from operations 5 484 852 3 453 848
Net finance costs (759 939) (453 827)
Dividends paid (119 734) (86 603)
Dividends received 11 423 51 537
Taxation paid (385 623) (377 878)
Net cash inflow from operating activities 4 230 979 2 587 077
Net cash outflow from investing activities (5 943 036) (1 943 674)
Net cash inflow/(outflow) from financing 1 398 843 (649 852)
activities
Net decrease in cash and cash equivalents (313 214) (6 449)
Effects of exchange rate changes on cash
and cash equivalents 243 458 14 008
Cash and cash equivalents at beginning of 5 064 987 5 057 428
year
Cash and cash equivalents at end of year 4 995 231 5 064 987
SEGMENTAL ANALYSIS
Audited Audited
Year ended Year ended
30 June 2008 30 June 2007
R`000 R`000 % change
Revenue
Retail activities
- Household goods and building 14 889 601 9 175 267 62
supplies
- Vehicles 12 419 863 11 699 666 6
Manufacturing and sourcing of 19 267 783 13 786 631 40
household goods and related raw
materials
Logistical services 4 984 554 3 784 845 32
Corporate services
- Brand management 361 619 275 472 31
- Investment participation 182 004 176 074 3
- Central treasury and other 382 122 369 510 3
activities
52 487 546 39 267 465 34
Intersegment eliminations (7 441 661) (5 038 892)
45 045 885 34 228 573 32
Operating profit before capital
items*
Retail activities
- Household goods and building 964 689 83 745 1 052
supplies
as previously stated 255 128
restatement closure costs (171 383)
- Vehicles 488 623 463 906 5
as previously stated 464 108
restatement closure costs (202)
Manufacturing and sourcing of 2 184 219 1 680 900 30
household goods and related raw
materials
as previously stated 1 682 973
restatement closure costs (2 073)
Logistical services 460 659 309 508 49
as previously stated 313 845
restatement closure costs (4 337)
Corporate services
- Brand management 361 620 275 412 31
- Investment participation 182 004 176 035 3
- Central treasury and other 501 785 374 000 34
activities
5 143 599 3 363 506 53
Intersegment eliminations (481 986) (329 349)
4 661 613 3 034 157 54
as previously stated 3 212 152
restatement closure costs (177 995)
*Operating profit before capital items was restated for the year ended 30 June
2007 in accordance with the definition of headline earnings in Circular 8/2007
- Headline Earnings, effective for financial periods ending on or after 31
August 2007.
SEGMENTAL ANALYSIS (continued)
Audited Audited
30 June 2008 30 June 2007
R`000 % R`000 %
Total assets
Retail activities
- Household goods and 23 035 434 45 7 665 963 24
building supplies
- Vehicles 2 644 111 5 2 519 547 8
Manufacturing and 13 920 171 28 11 534 491 37
sourcing of household
goods and related raw
materials
Logistical services 4 629 291 9 3 705 085 12
Corporate services
- Brand management 4 143 382 8 2 623 039 8
- Investment 1 356 566 3 2 354 667 8
participation
- Central treasury 1 109 408 2 966 975 3
and other activities
50 838 363 100 31 369 767 100
GEOGRAPHICAL INFORMATION
Audited Audited
Year ended Year ended
30 June 2008 30 June 2007
R`000 % R`000 %
Revenue
United Kingdom 8 532 157 19 7 652 119 22
European Union 13 167 533 29 6 610 368 19
Pacific Rim 3 015 132 7 2 662 821 8
Southern Africa 20 331 063 45 17 303 265 51
45 045 885 100 34 228 573 100
Non-current assets
United Kingdom 9 299 134 25 5 991 828 27
European Union 16 756 588 44 6 422 771 29
Pacific Rim 1 522 139 4 1 173 434 5
Southern Africa 10 063 893 27 8 581 295 39
37 641 754 100 22 169 328 100
RECONCILIATION OF TOTAL ASSETS PER SEGMENTAL ANALYSIS TO TOTAL ASSETS PER
BALANCE SHEET
Audited Audited
Year ended Year ended
30 June 2008 30 June 2007
R`000 R`000
Total assets per balance sheet 56 915 744 37 534 458
Less:
Cash and cash equivalents (4 995 231) (5 064 987)
Investments in associate companies (739 532) (866 282)
(excluding property transaction)
Investments in preference shares (193 285) (177 500)
Interest-bearing investments and loans (149 333) (55 922)
Total assets per segmental analysis 50 838 363 31 369 767
SELECTED EXPLANATORY NOTES
STATEMENT OF COMPLIANCE
The consolidated annual financial statements from which these condensed
financial statements have been derived, have been prepared in accordance with
International Financial Reporting Standards (IFRS), the interpretations
adopted by the International Accounting Standards Board (IASB), and the
requirements of the South African Companies Act. These condensed financial
statements are presented in compliance with IAS 34 - Interim Financial
Reporting.
BASIS OF PREPARATION
The annual financial statements are prepared in thousands of South African
rands (R`000) on the historical cost basis, except for certain assets and
liabilities which are carried at amortised cost, and certain financial
instruments and biological assets which are stated at their fair values.
FINANCIAL STATEMENTS
The annual financial statements for the year have been audited by Deloitte &
Touche and their accompanying unmodified audit report as well as their
unmodified audit report on this set of summarised financial information are
available for inspection at the company`s registered office. Full details of
the group`s business combinations for the year, additions and disposals of
property, plant and equipment as well as commitments and contingent
liabilities are included in the group`s consolidated financial statements.
CHANGES IN ACCOUNTING POLICIES
The accounting policies of the group have been applied consistently throughout
the periods presented in the consolidated financial statements, except for the
adoption of:
IFRS 2 - Share based payments: Vesting conditions and cancellations
IFRS 7 - Financial Instruments: Disclosure
IAS 23 - Borrowing Costs: Revised to require capitalisation of borrowing costs
IAS 32 - Financial Instruments: Presentation: Puttable instruments and
obligations arising on liquidation
IFRIC 12 - Service Concession Arrangements
IFRIC 13 - Customer Loyalty Programmes
IFRIC 15 - Agreements for Construction of Real Estate
IFRIC 16 - Hedges of a Net Investment in a Foreign Operation
Improvements to IFRS`s
The group adopted the majority of the IASB`s Improvement to International
Financial Reporting Standards. The adoption of the improvements affected
certain disclosures to the consolidated financial statements.
Details of the implementation and adoption of the various IFRSs and IFRICs are
reflected in the consolidated financial statements.
COMMENTARY
REVIEW OF RESULTS
The increase in revenue and operating profit, reflects another year of sound
performance and growth. This was achieved notwithstanding the challenging
operating conditions that prevailed in all the regions where we operate.
RETAIL ACTIVITIES
HOUSEHOLD GOODS AND BUILDING SUPPLIES
United Kingdom
The United Kingdom (UK) retail operations delivered solid results in the midst
of the worst economic conditions experienced in many years. Furniture has been
one of the worst affected businesses in the retail sector, with several of our
competitors being severely impacted.
The board is pleased that the group`s UK Retail interests have held their own.
Despite having near flat revenue growth the group experienced a turnaround in
operating profit after completing the major part of the restructuring process
in the previous financial year.
Continental Europe
In the European Union (EU) the group consolidated its various retail
participation investments throughout the EU for the first time. The interests
are held through a newly formed holding company, European Retail Management SA
(ERM). The consolidated results of these investments provided additional
growth to the group, both at revenue and operating profit level and represent
a further step towards completing the group`s vertical integration strategy in
the EU.
The transaction gives a substantial addition to the current retail base
through an extensive footprint strategically located across the EU. This
investment also provides the base for strong growth in intragroup supply
through our eastern European factories and collective third-party sourcing
from the East.
Pacific Rim
In the Pacific Rim, the retail operations continued to experience competitive
trading conditions on the back of high interest rates, increased fuel prices
and the higher cost of living. Revenue was in line with expectations but
margins were adversely impacted by below expected performances in New Zealand
and the homewares division. The remaining operations in the Pacific Rim
delivered satisfactory results.
Southern Africa
The results of the building supplies business of the group were below
expectations. This was due to cost pressures experienced in product costs,
distribution costs, internal restructurings, strengthening of the management
team and start-up costs associated with increasing the footprint in strategic
areas. The required restructuring measures have been completed.
VEHICLES
The Unitrans Automotive retail division delivered an excellent performance. In
comparing the performance to a number of competitors who have announced major
declines in profitability, Unitrans Automotive managed to grow both its
revenue and operating profit marginally. This is a satisfying performance
mainly attributable to the sales mix of lower-to-middle-end passenger and
light commercial vehicles as well as growth in revenue from spare parts and
workshops. The Hertz division is also benefiting from strengthened management
as well as changes to the composition of its new vehicle fleet and improved
service levels.
MANUFACTURING AND SOURCING OF HOUSEHOLD GOODS AND RELATED RAW MATERIALS
The United Kingdom
The group`s UK manufacturing interests had mixed results. The automotive and
industrial products manufacturing division delivered positive results. The
furniture manufacturing division`s results were adversely impacted by rising
raw material costs which could not be fully passed on to its customers.
Intragroup sales again benefited the group and remains a focus area.
Continental Europe
The European manufacturing and sourcing division delivered satisfying results
with a year-on-year increase in both revenue and operating profit. The margin
benefits were fuelled by the relative strength of the euro against the US
dollar, supplemented by the expansion of the group`s vertical integration
strategy. The wholesale and trading joint ventures in the Benelux and German
regions recorded a strong performance both in profitability and operating
margin.
The restructuring of the group`s eastern European division has been completed.
The centralisation of all administration and distribution functions, as well
as the construction of a new distribution centre, showroom and administrative
offices, to serve our operations in Poland, are expected to be completed by
November 2008. The continued strength of the zloty relative to the euro has
partially countered the beneficial impact of the strong euro versus the US
dollar and GB pound. Polish labour migration to western European countries has
decreased a result of the tougher economic conditions, particularly in the UK.
As a consequence, the retention of Polish staff and skills availability has
improved substantially during the last quarter.
International Sourcing
The International Sourcing operations increased their year-on-year activity
levels by more than 50%. The management of these operations have been
strengthened to accommodate the increased activity levels and the anticipated
future growth.
Southern Africa
Panel products and timber
The group`s panel products and timber division achieved satisfactory results.
Turnover growth was achieved mainly due to market share gains. However,
operating profit (excluding the revaluation effect of biological assets) was
negatively impacted by unprecedented increases in raw material costs,
particularly during the latter part of the financial year and price cutting
activities adopted by our competitors. The forestry and sawmilling operations
delivered a pleasing performance.
Raw materials
The results of the raw material division were adversely affected by the
slowdown in the household goods retail market in South Africa and aggravated
by increases in input costs. Appropriate restructurings have been done.
LOGISTICAL SERVICES
United Kingdom
The UK logistics division underperformed compared to the previous year, which
was attributable to the deferral of a number of key projects and the general
slowdown and negative sentiment prevailing in the UK market.
Continental Europe
The European logistics division has performed well and has benefited from
increased product flow, particularly arising from the investment in ERM.
Southern Africa
The logistics division achieved excellent results with significant year-on-
year growth in operating profit. This achievement is mainly attributable to
new contracts gained and high quality service level management of existing
contracts. The passenger division delivered good results in line with
expectations.
PERFORMANCE
The group`s revenue increased by 32% from R34 229 million to R45 046 million,
aided by the first-time consolidation of ERM and supplemented by the growth
achieved in the EU. The group generated 55% (2007: 49%) of its revenue in
currencies other than South African Rand (ZAR), principally euro, GB pound and
Australian dollar. The actual foreign revenue achieved in currencies other
than ZAR, but denominated in euro, increased by 31% from euro 1 749 million
to euro 2 296 million.
The average exchange rate used for converting euro income and expenditure to
ZAR was R10,7631:1 euro compared to R9,4103: 1 euro in respect of the previous
financial year (14% change).
Headline earnings attributable to ordinary shareholders grew by 42% (after
restatement) to R3 375 million, compared to R2 378 million (R2 558 million
before restatement) for the year ended 30 June 2007.
Headline earnings per ordinary share (HEPS) increased by 32% to 263,5 cents
(2007: 200,1 cents) with basic earnings per ordinary share increasing 3% to
249,8 cents (2007: 241,9 cents). It should be noted that the reported HEPS in
respect of the 2007 financial year have been restated to 200,1 cents per share
(cps) (from 215 cps) in accordance with the requirements of Circular 8/2007
issued by the South African Institute of Chartered Accountants. The principal
change relates to closure costs amounting to R178 million which would have
been shown as part of HEPS. With regard to basic earnings per ordinary share,
the lower percentage increase is attributable to the capital profit realised
in respect of the disposal of Steinhoff`s southern African furniture
manufacturing interests of R542 million in 2007 and an impairment of R155
million in the year ended 30 June 2008 against the carrying value of
Steinhoff`s listed associate company, Amalgamated Appliance Holdings Limited.
The weighted average number of ordinary shares in issue during the period
increased by 8% to 1 281 million (2007: 1 188 million).
Ordinary shareholders` funds at 30 June 2008 amounted to R20 773 million (30
June 2007: R16 233 million). The return on average ordinary shareholders`
funds was 18%. (The return on average ordinary shareholders` funds, adjusted
for the currency impact on the conversion of foreign net assets at the closing
rate of ZAR 12,3341: 1 euro (29% higher) vis-?-vis the average currency
translation rate of ZAR 10,7631:1 euro (15% higher) at which the income
statement was converted, amounted to 19%.) The net asset value per ordinary
share increased to 1 688 cps from 1 292 cps.
The increase in total assets of the group arose mainly from:
the first-time consolidation of ERM, with the related investment being
allocated to the identifiable assets and liabilities of ERM in accordance with
IFRS 3 - Business Combinations. The gross assets of ERM included in the group
balance sheet are stated before providing for the associated deferred tax
provision and minority interests; and
the conversion of euro denominated assets at a 29% higher ZAR : euro
conversion rate applicable at the reporting date (i.e. ZAR 12.3341 : 1 euro at
30 June 2008 vs ZAR 9.5735 : 1 euro as at 30 June 2007).
The group`s net cash flow from operating activities was 64% higher at R4 231
million (2007: R2 587 million). The extent of cash generation bears testimony
to the group`s quality of earnings. Cash generation is determined after
taking account of a net decrease in working capital of R98 million (2007:
increase of R476 million).
The group`s average operating margin improved to 10,3% (2007: 8,9% restated
from 9,4%), mainly due to the progress made in the turnaround of the UK Retail
operations as well as the impact of the relative strength of the euro against
the US dollar, as the group`s principal sourcing currency. The group also
benefited from volume-driven growth in the EU. Enhanced efficiencies
throughout the supply chain, increased capacity utilisation and growth in
collective intragroup sourcing remain priority and will continue to benefit
margins.
Net finance charges for the year rose to R705 million (2007: R454 million)
mainly due to higher interest rates prevailing in all territories in which the
group operates as well as the higher ZAR: euro conversion rate applicable to
non-South African finance charges. Finance charges also increased as a result
of the first-time consolidation of ERM.
At 30 June 2008, Steinhoff had net interest-bearing debt of R9 388 million (30
June 2007: R4 119 million) resulting in a net debt: equity ratio of 38% (30
June 2007: 24%). The gearing position of the group includes the first-time
consolidation of ERM`s property-related debt and the issue by Steinhoff on 9
June 2008 of a ZAR-denominated convertible bond of R1,6 billion. (The
liability portion of the bond amounts to R1,4 billion and is included in non-
current interest-bearing loans and borrowings). The increase of the ZAR : euro
closing conversion rate of 29% also contributed towards the increased ZAR
denominated debt and accordingly the net debt : equity ratio in ZAR terms.
The group`s taxation charge was R366 million (2007: R325 million), translating
into an average tax rate of 10% (2007: 12%). The decrease is mainly
attributable to the higher profits in the UK retail division attracting no
current tax due to prior accumulated tax losses on which no deferred tax
assets were raised. Management anticipates that the average tax rate should
not exceed 15% of pre-tax income in the foreseeable future. This is
attributable to the lower statutory tax rates applicable, favourable tax
dispensations and allowances utilised by the group in certain jurisdictions.
As reflected in the segmental analysis, the group benefited substantially from
improved operating margin. The largest improvement was achieved in the retail
of household goods and building supplies segment. The intragroup trading
levels have also increased.
CORPORATE ACTIVITY
During the year under review, in addition to the corporate transactions
announced at interim stage, the group concluded, or is in the process of
concluding, the following notable corporate transactions:
- The group continued to expand its retail interests in Continental Europe.
This has led to the consolidation of its retail participation interests in
Continental Europe within ERM. ERM is earmarked as the vehicle for further
expansion of the group`s retail activities, towards completing its vertical
integration strategy in all major markets in Continental Europe.
- On 9 June 2008, Steinhoff issued its second convertible bond to raise an
amount of R1,6 billion, before expenses. This bond relates to 64,6 million
underlying ordinary shares in Steinhoff at a reference price, from launch to
closing, of 1 869 cps to be issued at an initial conversion price of 2 477
cps, being an initial conversion premium of 32,5% above the reference price.
It is redeemable at a redemption premium of 20% on 20 July 2015, resulting in
an effective conversion price of 2 972 cps (a premium of 59% to the reference
price). The proceeds of the bond were used for general corporate purposes.
- During June 2008, Steinhoff Europe merged its property holdings in Germany,
Poland and Hungary into a Dutch property holding company structure. This
transaction resulted in Steinhoff Europe exchanging its interest in the
property companies, at book value, for a 45% interest in Hemisphere
International Properties BV. Steinhoff Europe entered into a long-term head
lease agreement with Hemisphere. In addition, Steinhoff Europe will also
receive management and administration fees from this investment.
- Steinhoff supports the South African Government`s Black Economic Empowerment
(BEE) initiatives and remains committed to achieving the objectives set out in
the Department of Trade and Industry`s Broad-Based Black Economic Empowerment
codes of Good Practice (DTI Codes). The group is pleased to announce that it
is at an advanced stage of finalising the detailed terms of its BEE ownership
transaction and anticipates that an announcement containing the full details
will be published during October 2008.
The group has accumulated 50 million treasury shares which will be made
available as the medium to implement the BEE transaction. The transfer of
these treasury shares to an appropriate BEE investment vehicle will be
submitted for shareholders` approval at the annual general meeting of
shareholders in December 2008.
The BEE transaction has been designed to provide sustainable long-term
benefits to a broad base of South African participants, forming an integral
part of the South African operations of the group. Staff participation is seen
as an integral part of the group`s objective of retaining and developing
employees, thereby ensuring their long-term commitment to Steinhoff. The key
features of the BEE transaction include, inter alia:
- participation of all South African employees, not currently forming part of
the long-term share incentive scheme(s). This will involve approximately 19
000 permanent employees, of whom more than 70% are black (as defined in the
Broad-Based Black Economic Empowerment Act, No 53 of 2003), participating on
an equal basis through an Employee Share Ownership Plan;
- participation of black management through a Black Managers` Trust;
- participation of existing community-based and empowerment groupings involved
with the group`s timber plantations in the north-eastern Cape and southern
Cape; and
- a fully vendor-financed structure.
The group believes that the BEE transaction will preserve shareholder value
and contribute to the sustainability and growth of the group`s South African
operations.
OUTLOOK
The current state of the global economy, particularly the credit environment
and consumer spending patterns, represents a challenging trading environment
for the new financial year. However, management is confident that the group`s
business units in all regions are well structured to withstand these
challenges and to continue to maintain and grow activity levels and
profitability.
On behalf of the board of directors
BE Steinhoff MJ Jooste
Non-executive chairman Chief executive officer
9 September 2008
DISTRIBUTION FROM SHARE PREMIUM ACCOUNT
Notice is hereby given that, in accordance with the authority granted to the
directors of the company in terms of Article 56A of the company`s articles of
association and the resolution passed at the annual general meeting of the
company held on 10 December 2007, a cash distribution from the share premium
account of 60 cps (2007: 50 cps) has been declared and is payable to
shareholders recorded in the books of the company at the close of business on
Friday, 5 December 2008 (the capital distribution). The salient dates of this
distribution are:
2008
Last date to trade cum capital Friday, 28 November
distribution
Shares trade ex capital distribution Monday, 1 December
Record date Friday, 5 December
Payment date Monday, 8 December
On Monday, 8 December 2008, the capital distribution will be electronically
transferred to the bank accounts of certificated shareholders who utilise this
facility. In all other instances of certificated holders, cheques dated 8
December 2008 will be posted on or about that date. Shareholders who have
dematerialised their shares will have their accounts credited on 8 December
2008.
In terms of the South African Companies Act, 1973, as amended, the directors
confirm that, after the payment of the capital distribution, the company will
be able to pay its debts as they become due in the ordinary course of
business, and its consolidated assets, fairly valued, will exceed its
consolidated liabilities.
No dematerialisation or rematerialisation of ordinary shares may take place
between Monday, 1 December and Friday, 5 December 2008, both dates inclusive.
ANNUAL REPORT
The annual report will be mailed to shareholders in due course. The annual
general meeting is scheduled to take place on Monday, 1 December 2008, at the
registered office of the company at 10:00.
DIRECTORATE
In accordance with our announcement in March 2008, our chairman, Mr Bruno
Steinhoff, will step down as chairman at the end of September 2008, but will
remain on the board as a non-executive director. The board is pleased to
announce that Dr Len (Deenadayalen) Konar, currently senior independent non-
executive director, has been elected to succeed Mr Steinhoff as chairman. The
board wishes to thank Mr Steinhoff, the founder of the group in Europe, for
his contribution as chairman and shareholder since Steinhoff`s listing in
1998.
Dr Konar will step down as chairman of the audit and risk committee and will
be replaced by Mr DC Brink
On behalf of the board of directors
SJ Grobler
Company Secretary
9 September 2008
STEINHOFF INVESTMENT HOLDINGS LIMITED
(Steinhoff Investments)
Registration number: 1954/001893/06
(Incorporated in the Republic of South Africa)
JSE share code: SHFF ISIN code: ZAE 000068367
Preference shareholders are referred to the above results of Steinhoff for a
full appreciation of the consolidated results and financial position of
Steinhoff Investments.
DECLARATION OF DIVIDEND NUMBER 6 TO PREFERENCE SHAREHOLDERS
The board of Steinhoff Investments has resolved to declare a dividend of 552
cents per preference share in respect of the period from 1 January 2008 up to
and including 30 June 2008 (the dividend period), payable on Monday, 27
October 2008, to those preference shareholders recorded in the books of the
company at the close of business on Friday, 24 October 2008. This dividend has
been determined on the basis of 75% of the prime bank overdraft lending rate
of ABSA Bank Limited prevailing over the dividend period, applied to the
nominal value plus premium (of R100,00 per preference share, in the
aggregate).
The dividend is payable in the currency of South Africa.
2008
Last date to trade cum dividend Friday, 17 October
Shares trade ex dividend Monday, 20 October
Record date Friday, 24 October
Payment date Monday, 27 October
No dematerialisation or rematerialisation of preference shares may take place
between Monday, 20 October 2008 and Friday, 24 October 2008, both dates
inclusive.
On Monday, 27 October 2008, the preference dividend will be electronically
transferred to the bank accounts of preference shareholders. Preference
shareholders who have dematerialised their shares will have their accounts
credited on Monday, 27 October 2008.
PROPOSED TAX AMENDMENTS
As mentioned in our interim results announcement, dated 5 March 2008, the
Minister of Finance, in his budget speech of 20 February 2008, provided more
details in respect of the second phase of the conversion of secondary tax on
companies (STC) to a shareholder dividends tax.
Subsequently, the Department of National Treasury (National Treasury)
published a draft Revenue Laws Amendment Bill (the Bill) on 1 August 2008. The
Bill, indicates that the dividends tax will be a final withholding tax of 10%
and will apply to all non-corporate and non-South African tax resident
shareholders. The Bill also introduces a new concept called "contributed tax
capital" which will have an impact on the dividend definition for tax
purposes.
National Treasury reiterated the fact that the new dividends tax will only
come into effect once a number of double tax treaties, which are currently
being negotiated, are ratified by the governments involved. The target date
for the implementation of the dividends tax is late 2009.
Accordingly, shareholders are advised that, once the legislation has been
promulgated, the group will obtain legal opinion and announce the impact on
ordinary and preference shareholders.
On behalf of the board of directors
D Konar JHN van der Merwe
Non-executive director Executive director
9 September 2008
OTHER NOTES
1. Corporate governance
Steinhoff has embraced the recommendations of King II on Corporate Governance
and strives to provide reports to shareholders that are timely, accurate,
consistent and informative.
2. Social responsibility
Steinhoff continues to be recognised for its corporate social investment
activities. Management remains committed to the related initiatives and a
number of social responsibility projects are continuing.
3. Human resources
Good working relationships are maintained with the relevant labour unions.
Ongoing skills and equity activities continue to ensure compliance with
current legislation.
Initiatives continue to contribute to broader skills development and sourcing
of appropriately qualified staff on an ongoing basis.
4. Related-party transactions
The group companies entered into various related-party transactions. These
transactions are no less favourable than those arranged with third parties.
5. Further events
No significant events have occurred in the period between the reporting date
and the date of this report.
For more detail on the group`s listed associate investments, shareholders are
referred to the results and/or corporate announcements and financial
information of:
- Amalgamated Appliance Holdings Limited - 29 August 2008
www.amap.co.za
- KAP International Holdings Limited - 9 September 2008
www.kapinternational.com
ADMINISTRATION
STEINHOFF INTERNATIONAL HOLDINGS LIMITED
Registration number: 1998/003951/06
(Incorporated in the Republic of South Africa)
JSE share code: SHF ISIN code: ZAE000016176
("Steinhoff" or "the company" or "the group")
Registered office: 28 Sixth Street, Wynberg, Sandton, 2090, Republic of South
Africa
Tel: +27 (11) 445 3000 Fax: +27 (11) 445 3094
Transfer secretaries: Computershare Investor Services (Proprietary) Limited
70 Marshall Street, Johannesburg, 2001
Company secretary: SJ Grobler
Auditors: Deloitte & Touche
Sponsor: PSG Capital (Proprietary) Limited
Directors: BE Steinhoff^* (chairman), MJ Jooste (chief executive officer), DE
Ackerman^, DC Brink^, YZ Cuba^, CE Daun^*, D Konar^, JF Mouton^,
FJ Nel, FA Sonn^, IM Topping#, DM van der Merwe, JHN van der Merwe
Alternate directors: JNS du Plessis, HJK Ferreira, SJ Grobler,
KJ Grov?, A Kr?ger-Steinhoff^*
#British *German ^non-executive
Retail
Many international brands - around the world nearly 1 000 retail outlets-
market products to a range of customers.
Manufacturing and sourcing
A major contributor to the group`s reputation for value for money.
Environmental standards is just as important to us and we have invested in
systems, practices and facilities to elevate and maintain standards in line
with society`s expectations.
Logistics
The logistics division ensures that every one of the approximate 8 million
units manufactured and sourced reach the desired markets on time - on
different continents, in different currencies and in different time zones.
Corporate activities
Focuses on supporting group operations with effective brand management,
efficient treasury management and managing the group`s properties.
Date: 09/09/2008 14:35:02 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
