| Wed 18 Feb 2009, 12:21 | | DST - Distell - Unaudited Results Of The Group For The Six Months Ended 31 |
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DST - Distell - Unaudited Results Of The Group For The Six Months Ended 31
December 2008 And Cash Dividend Declaration
Distell Group Limited
Registration number 1988/005808/06
JSE share code: DST & ISIN: ZAE000028668
("Distell" or "the Group")
UNAUDITED RESULTS OF THE GROUP FOR THE SIX MONTHS ENDED 31 DECEMBER 2008 AND
CASH DIVIDEND DECLARATION
SALIENT FEATURES
- Total sales volumes up 15,9%
- Total revenue up 21,6%
- Trading income up 21,3%
- Earnings per share up 17,7%
- Headline earnings per share up 19,3%
- Interim dividend per share up 19,2%
Abridged consolidated balance sheets
Unaudited Audited
31 December 30 June
2008 2007 2008
R`000 R`000 R`000
Assets
Non-current assets
Property, plant and equipment 1 575 581 1 504 606 1 546 159
Biological assets 139 795 125 196 122 024
Financial assets 85 523 72 527 85 901
Investments in associates 34 169 26 610 31 636
Intangible assets 37 350 31 344 39 373
Retirement benefit assets 35 687 187 052 114 588
Deferred income tax assets 14 335 21 937 21 870
Total non-current assets 1 922 440 1 969 272 1 961 551
Current assets
Inventories 3 163 565 2 636 173 3 268 555
Trade and other receivables 1 640 221 1 275 127 954 036
Financial assets - 374 528 -
Current income tax assets 48 646 - 62 968
Cash and cash equivalents 344 362 172 978 193 673
Total current assets 5 196 794 4 458 806 4 479 232
Total assets 7 119 234 6 428 078 6 440 783
Equity and liabilities
Capital and reserves
Capital and reserves 4 789 855 4 278 304 4 453 641
Minority interest 2 025 2 190 2 025
Total equity 4 791 880 4 280 494 4 455 666
Non-current liabilities
Interest-bearing borrowings 3 485 3 019 2 938
Retirement benefit obligations 16 654 12 842 15 623
Deferred income tax liabilities 177 456 185 639 177 460
Total non-current liabilities 197 595 201 500 196 021
Current liabilities
Trade and other payables 2 001 996 1 575 187 1 483 691
Provisions 35 628 23 302 49 577
Interest-bearing borrowings - 328 484 226 027
Current income tax liabilities 92 135 19 111 29 801
Total current liabilities 2 129 759 1 946 084 1 789 096
Total equity and liabilities 7 119 234 6 428 078 6 440 783
Abridged consolidated income statements
Unaudited Audited
Six months ended Year ended
31 December 30 June
Restated
2008 2007 Change 2008
R`000 R`000 % R`000
Sales volumes (litres `000) 259 458 223 789 15,9 419 059
Revenue 6 071 747 4 995 213 21,6 9 409 597
Operating expenses (5 119 869) (4 210 370) 21,6 (8 074 774)
Trading income 951 878 784 843 21,3 1 334 823
Net other gains 1 026 10 050 11 667
Operating profit 952 904 794 893 19,9 1 346 490
Dividend income 1 526 466 1 503
Finance income 11 164 28 638 52 448
Finance costs (20 126) (27 123) (46 064)
Share of profit of
associates 13 940 10 061 23 523
Profit before taxation 959 408 806 935 18,9 1 377 900
Taxation (308 455) (256 699) (425 899)
Profit for the period 650 953 550 236 18,3 952 001
Attributable to:
Equity holders of
the company 650 953 550 524 18,2 952 454
Minority interest - (288) (453)
650 953 550 236 18,3 952 001
Per share performance:
Issued number of
ordinary shares (`000) 201 092 200 660 200 660
Weighted number of
ordinary shares (`000) 200 626 199 624 199 974
Earnings per
ordinary share (cents)
- basic earnings basis 324,5 275,8 17,7 476,3
- diluted earnings basis 317,1 266,0 19,2 447,1
- headline basis 324,1 271,6 19,3 471,0
- diluted headline basis 316,8 262,0 20,9 442,2
Dividends per ordinary
(ce (cents)
share (cents)
- interim 124,0 104,0 19,2 104,0
- final - - - 132,0
124,0 104,0 19,2 236,0
Reconciliation of
headline earnings:
Net profit attributable to
equity holders of the 650 953 550 524 18,2 952 454
company
Adjusted for (net
of taxation):
net other capital gains (739) (8 266) (10 530)
Headline earnings 650 214 542 258 19,9 941 924
Abridged consolidated cash flow statements
Unaudited Audited
Six months ended Year ended
31 December 30 June
2008 2007 2008
R`000 R`000 R`000
Trading income 951 878 784 843 1 334 823
Non-cash flow items 64 105 1 617 125 083
Working capital changes (63 488) (279 933) (634 995)
Inventories 107 579 69 098 (567 537)
Trade and other receivables (692 524) (517 220) (191 452)
Trade payables and provisions 521 457 168 189 123 994
Net other gains 1 988 65 363 65 934
Cash generated from operating
activities 954 483 571 890 890 845
Net financing costs (7 436) 1 959 (44 629)
Taxation paid (219 806) (266 864) (476 654)
Dividends paid (264 855) (217 572) (426 194)
Cash retained from operating
activities 462 386 89 413 (56 632)
Cash outflow from investment
activities (102 932) (251 278) (6 551)
Cash outflow from financing
activities 735 1 141 (312 844)
Increase in net cash and cash
equivalents 360 189 (160 724) (376 027)
Net cash and cash equivalents
at the beginning of the period (31 341) 332 426 332 426
Exchange gains on cash and cash
equivalents 15 514 1 276 12 260
Net cash and cash equivalents at
the end of the period 344 362 172 978 (31 341)
Abridged consolidated statements of recognised income and expense
Unaudited Audited
Six months ended Year ended
31 December 30 June
2008 2007 2008
R`000 R`000 R`000
Fair value adjustments (net
of tax):
- available-for-sale investments 689 258 1 697
Currency translation differences (579) (689) 4 300
Actuarial gains and losses (57 412) - (45 301)
Net loss recognised directly in
equity (57 302) (431) (39 304)
Profit for the period 650 953 550 236 952 001
Total recognised income for the
period 593 651 549 805 912 697
Attributable to:
Equity holders of the company 593 651 550 093 913 150
Minority interest - (288) (453)
593 651 549 805 912 697
Notes
Unaudited Audited
31 December 30 June
2008 2007 2008
R`000 R`000 R`000
1. Net interest-bearing borrowings
Interest-bearing borrowings
Non-current 3 485 3 019 2 938
Current - 328 484 226 027
3 485 331 503 228 965
Cash resources 344 362 172 978 193 673
(340 877) 158 525 35 292
2. Cash outflow from investment
activities
To maintain operations (48 554) (108 428) (178 047)
To expand operations (54 378) (142 850) (207 823)
Preference shares redeemed - - 379 319
(102 932) (251 278) (6 551)
3. Directors` valuation of
financial assets and associates
Preference shares - 374 528 -
Other investments and loans 85 503 72 527 85 901
Associates 226 293 170 165 187 806
311 796 617 220 273 707
4. Capital commitments
Contracted 67 349 172 155 85 138
Authorised but not contracted 267 778 103 458 472 940
335 127 275 613 558 078
5. Depreciation of property, plant
and equipment 82 182 73 351 151 655
6. Net asset value per share
(cents) 2 383 2 133 2 221
7. Segment report
The Group is engaged in the production, marketing and distribution of
alcoholic beverages. As these activities comprise an integrated operation,
the Group regards this as a single primary business segment, on which all
information is disclosed in this profit announcement.
8. Contingencies
In prior years the Group received compensation for relinquishing its
distribution rights to certain trademarks. The South African Revenue
Service has issued revised tax assessments to the value of R29,5 million
in terms of which the proceeds of R67 million have been subjected to
income tax and value added tax. The Group has lodged an appeal against
these assessments and the matter will be heard in the Special Income Tax
Court.
Accounting policy and comparative figures
The interim financial statements are prepared in accordance with the recognition
and measurement principles of International Financial Reporting Standards
(IFRS), including IAS 34: Interim Financial Reporting; the requirements of the
South African Companies Act of 1973, as amended; and the Listing Requirements of
the JSE Limited.
The accounting policies and methods of computation are consistent with those
adopted for the previous period, with the exception of the following new
accounting standards, interpretations and amendments to IFRS:
- IFRIC Interpretation 12 - Service Concession Arrangements (effective 1 January
2008)
- IFRIC Interpretation 13 - Customer Loyalty Programmes (effective 1 January
2008)
- IFRIC Interpretation 14 - The limit on a Defined Benefit Asset, minimum
funding requirements and their interaction (effective 1 January 2008)
- Amendments to IAS 39 - Financial Instruments: Recognition and Measurement and
IFRS 7 Financial Instruments: Disclosures - Reclassification of Financial Assets
(effective 1 July 2008)
The adoption of these new accounting standards, interpretations or amendments to
IFRS has had no material impact on the consolidated results of either the
current or prior periods.
Previously, sales of non-liquor products were shown net of expenses within `cost
of goods sold` as these were regarded as agency sales. In terms of IAS 18
Revenue, the Group now accounts for these sales on a gross basis.
The comparative financial statements for 31 December 2007 have been restated to
reflect this change. The effect of the restatement, which has no effect on any
balance sheet item, trading income, operating profit, profit before tax, profit
for the period, basic and diluted earnings per share, is summarised below.
Previously Currently Difference
reported reported
R`000 R`000 R`000
Income statement
Revenue 4 837 696 4 995 213 157 517
Operating expenses (4 052 853) (4 210 370) 157 517
Trading income 784 843 784 843 -
Operating performance
Revenue grew 21,6% to R6,1 billion on a sales volume increase of 15,9%.
Domestic sales volumes increased by 10,7% and revenue by 14,8%. Cider and RTD
(ready-to-drink) brands continued their strong performance with impressive sales
volume and market share growth. However, the spirits market remained under
pressure and although the Group was able to increase its share of this category,
its volumes declined. Distell`s wine portfolio was able to deliver profitable
volume growth.
International sales volumes, including Africa, increased by 37,1%. Wine sales
volumes showed a healthy increase, outpacing the 23% rise in South African
industry bottled wine exports for the comparable period. Spirit volumes achieved
satisfactory growth. International revenue, as a result, grew 54,3%.
Africa, in particular delivered exceptional growth, to contribute 54,0% to
foreign revenue.
The increase of 21,3% in trading income resulted mainly from continued revenue
growth. Benefits derived from improved throughput and efficiencies were largely
offset by steep increases in material costs and distribution expenses as well as
incremental costs to expand sales and marketing representation in important
markets. The net operating margin was maintained at 15,7%.
Cash generated from operating activities amounted to R954,5 million (2007:
R571,9 million).
Headline earnings grew 19,9% to R650,2 million and headline earnings per share
improved by 19,3%.
Investment and funding
Total assets increased by 10,5% to R7,1 billion.
Capital expenditure amounted to R102,9 million, of which R48,6 million was spent
on the replacement of assets. A further R54,3 million was directed to the
expansion of cider, wine and spirit production capacity.
Investment in net working capital increased by 19,6% to R2,8 billion, comparing
favourably to an increase of 21,3% in trading income.
Cash retained from operating activities amounted to R462,4 million (2007: R89,4
million), and the Group remains in a strong financial position, as shown by the
positive cash and cash equivalent balance of R344,4 million at the end of the
reporting period.
Prospects
South Africa`s economy and its consumers continue to adjust to the unfavourable
impact of a highly troubled global economy, the increase in debt-servicing
costs, and a moderation in real disposable income. The deterioration in the
global economy is expected to continue with major economies now in recession. An
early end to the depressed conditions seems unlikely.
Distell therefore anticipates that global and local trading conditions will
become increasingly difficult. Nevertheless, the board believes the business is
appropriately structured to compete effectively under these conditions. It has a
portfolio of exceptional brands with strong consumer franchise across a range of
segments and price points affording it the flexibility to adjust to changes in
consumer spending and to capture opportunities in key established and newer
markets. A broad network of trading alliances across a diversity of markets,
some less adversely affected by the global credit crunch than others, should
also provide the Group with a measure of resilience.
It is extremely difficult to forecast under current volatile conditions. Distell
nevertheless expects to reflect lower growth in revenue and earnings for the
financial year.
Directorate
Robert Lumb resigned as director during the course of the year and we thank him
for his valuable contribution. We welcome Catharina Sevillano-Barredo who was
appointed to the board during the period.
Cash dividend declaration
The directors have resolved to declare cash dividend number 41 of 124 cents
(2007: 104 cents) per share for the period ended 31 December 2008.
The salient dates of this dividend distribution are:
Last day to trade cum dividend Friday, 6 March 2009
Shares commence trading ex dividend from
commencement of business on Monday, 9 March 2009
Record date Friday, 13 March 2009
Payment date Monday, 16 March 2009
Share certificates may not be dematerialised or rematerialised between Monday, 9
March 2009, and Friday, 13 March 2009, both days inclusive.
Signed on behalf of the board
DM Nurek JJ Scannell
Chairman Managing director
Stellenbosch
18 February 2009
Directors:
DM Nurek (Chairman), FC Bayly, PM Bester, PE Beyers, MJ Botha, JG Carinus,
GP Dingaan, SJ Genade, E de la H Hertzog, MJ Madungandaba, LM Mojela,
AC Parker, JJ Scannell (Managing director), CE Sevillano-Barredo,
BJ van der Ross, MH Visser
Company secretary: CJ Cronje
Registered office: Aan-de-Wagenweg, Stellenbosch 7600
Transfer secretaries: Computershare Investor Services (Pty) Limited,
PO Box 61051, Marshalltown 2107
Sponsor: RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Website: www.distell.co.za
Date: 18/02/2009 12:21:01 Produced by the JSE SENS Department.
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