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SHF
SHF
SHF - Steinhoff - Unaudited interim results for the six months ended 31
December 2008
Steinhoff International Holdings Limited
("Steinhoff" or "the company" or "the group")
Registration number: 1998/003951/06
(Incorporated in the Republic of South Africa)
JSE share code: SHF & ISIN code: ZAE000016176
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2008
- Highlights
- Improved net cash flow from operating activities increased threefold to
R1,4bn.
- Healthy liquidity with a long-term debt profile.
- Strong balance sheet sustained with gearing at 39%.
- Headline earnings maintained at R1,5 bn.
- Headline earnings per ordinary share of 118 cps.
Condensed Consolidated Income Statement
Notes 6 months 6 months % Year ended
ended 31 Dec ended 31 Dec change 30 June
2008 2007 2008
Unaudited Unaudited Audited
R`000 R`000 R`000
Revenue 25 939 636 20 570 051 26 45 045 885
Operating profit 2 331 267 29 5 492 166
before depreciation 3 012 514
and capital items
Depreciation (543 312) (356 641) (830 553)
Operating profit 2 469 202 1 974 626 25 4 661 613
before capital
items
Capital items 1 39 515 (132 926) (192 890)
Earnings before 2 508 717 1 841 700 36 4 468 723
interest, dividend
income, associate
earnings and
taxation
Net finance charges (609 214) (237 139) (704 637)
Dividend income 301 303 584
Earnings before 1 899 804 1 604 864 18 3 764 670
associate earnings
and taxation
Share of
(loss)/profit of
associate companies (976) 24 166 37 071
Profit before
taxation 1 898 828 1 629 030 17 3 801 741
Taxation (164 410) (162 853) (366 133)
Profit for the
period 1 734 418 1 466 177 18 3 435 608
Attributable to:
Equity holders of
the parent 1 597 851 1 455 087 10 3 310 037
Minority interest 136 567 11 090 125 571
Profit for the
period 1 734 418 1 466 177 18 3 435 608
Headline earnings 117,9 120,4 (2) 263,5
per ordinary share
(cents)
Fully diluted 117,1 (2) 251,4
headline earnings
per ordinary share
(cents) 114,8
Basic earnings per
ordinary share
(cents) 120,9 110,6 9 249,8
Fully diluted 107,8 9 238,8
earnings per
ordinary share
(cents) 117,6
Number of ordinary
shares in issue
(`000) 1 279 595 1 308 445 (2) 1 268 743
Weighted average 1 263 494 1 1 280 541
number of ordinary
shares in issue
(`000) 1 271 661
Earnings 2 1 397 002 10 3 199 039
attributable to
ordinary
shareholders
(R`000) 1 537 210
Headline earnings 3 1 521 574 (1) 3 374 761
attributable to
ordinary
shareholders
(R`000) 1 499 270
Average currency 9,8000
translation rate 10,7631
(rand:euro) 12,4152 27
ADDITIONAL INFORMATION
6 months 6 months Year ended
ended ended 30 June
31 Dec 2008 31 Dec 2007 2008
Unaudited Unaudited Audited
R`000 R`000 R`000
Note 1: Capital items
Loss on scrapping of (3 462) (3 682) (7 650)
rental fleet vehicles
Goodwill adjustments - 5 833 (15 581)
Impairments (25) (140 164) (166 314)
Negative goodwill - - 8 723
released on business
combination
Profit on disposal of 18 612 - 2 348
investment property
Loss on disposal of (3) - -
intangible assets
Profit/(loss) on disposal 24 393 5 087 (14 416)
of property, plant and
equipment
39 515 (132 926) (192 890)
Note 2: Earnings
attributable to ordinary
shareholders
Earnings attributable to 1 597 851 1 455 087 3 310 037
equity holders
Dividend entitlement on (60 641) (58 085) (110 998)
non-redeemable cumulative
preference shares
1 537 210 1 397 002 3 199 039
Note 3: Headline earnings
attributable to ordinary
shareholders
Earnings attributable to 1 597 851 1 455 087 3 310 037
equity holders
Adjustment for:
Capital items (note 1) (39 515) 132 926 192 890
Taxation effects on 1 575 (7 433) (17 231)
capital items
(Profit)/loss on disposal -
of property, plant and
equipment included in
share of (loss)/profit of
associate companies (921) 63
Dividend entitlement on (60 641) (58 085) (110 998)
non-redeemable cumulative
preference shares
1 499 270 1 521 574 3 374 761
Condensed Consolidated Balance Sheet
31 Dec 2008 31 Dec 2007 30 June 2008
Unaudited Unaudited Audited
R`000 R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment, 11 654 710 8 905 822 11 288 468
investment properties and
biological assets
Intangible assets and goodwill 21 563 671 10 175 770 21 226 595
Investments and loans 1 694 376 3 558 965 1 278 679
Investments and loans - 2 589 130 747 220 2 457 992
associate companies
Deferred taxation assets 1 385 926 757 646 1 390 020
38 887 813 24 145 423 37 641 754
Current assets
Accounts receivable, short-term 10 844 474 8 170 794 8 725 726
loans and other current assets
Inventories 5 318 363 3 582 708 5 553 033
Cash and cash equivalents 4 916 387 5 097 482 4 995 231
21 079 224 16 850 984 19 273 990
Total assets 59 967 037 40 996 407 56 915 744
EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital and 20 854 410 17 835 197 20 772 947
reserves
Preference share capital 1 042 474 1 042 474 1 042 474
21 896 884 18 877 671 21 815 421
Minority interest 3 479 087 28 482 2 968 732
Total equity 25 375 971 18 906 153 24 784 153
Non-current liabilities
Deferred taxation liabilities 3 245 564 1 106 517 3 203 448
Interest-bearing long-term 12 809 018 8 766 573 12 684 508
liabilities
Other long-term liabilities and 1 391 929 594 316 1 414 066
provisions
17 446 511 10 467 406 17 302 022
Current liabilities
Interest-bearing short-term 5 264 954 5 020 782 4 001 799
liabilities
Accounts payable, provisions 11 879 601 6 602 066 10 827 770
and other current liabilities
17 144 555 11 622 848 14 829 569
Total equity and liabilities 59 967 037 40 996 407 56 915 744
Net asset value per ordinary 1 630 1 363 1 637
share (cents)
Gearing ratio (net) (%) 39 27 38
Closing exchange rate 13,2037 9,9782 12,3341
(rand:euro)
Condensed consolidated statement of recognised income and expense
6 months 6 months Year ended
ended ended 30 June 2008
31 Dec 2008 31 Dec 2007 Audited
Unaudited Unaudited R`000
R`000 R`000
Actuarial losses recognised in (13 495) (33 487) (13 137)
equity
Cash flow hedges recognised in 13 309 (10 917) 15 219
equity
Exchange differences on (333 589) (52 665) 2 353 086
consolidation of foreign
subsidiaries
Fair value adjustments on - - (3 157)
available-for-sale financial
assets
Net (expense)/income recognised (333 775) (97 069) 2 352 011
directly in equity
Profit for the period 1 734 418 1 466 177 3 435 608
Total recognised income and
expense for the period 1 400 643 1 369 108 5 787 619
Attributable to:
Equity holders of the parent 896 915 1 358 018 5 021 490
Minority interest 503 728 11 090 766 129
1 400 643 1 369 108 5 787 619
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
6 months 6 months Year
ended ended Ended
31 Dec 2008 31 Dec 2007 30 June 2008
Unaudited Unaudited Audited
R`000 R`000 R`000
Operating profit before working 2 942 271 2 320 506 5 386 962
capital changes
Net changes in working capital (757 963) (1 432 005) 97 890
Cash generated from operations 2 184 308 888 501 5 484 852
Net finance costs (549 134) (237 139) (760 034)
Dividends paid (96 451) (54 731) (119 639)
Dividends received 301 11 140 11 423
Taxation paid (161 263) (160 681) (385 623)
Net cash inflow from operating 1 377 761 447 090 4 230 979
activities
Net cash outflow from investing
activities (1 417 525) (1 998 817) (5 943 036)
Net cash (outflow)/inflow from (253 167) 1 467 736 1 398 843
financing activities
Net decrease in cash and cash (292 931) (83 991) (313 214)
equivalents
Effects of exchange rate 214 087 116 486 243 458
changes on cash and cash
equivalents
Cash and cash equivalents at 4 995 231 5 064 987 5 064 987
beginning of period
Cash and cash equivalents at 4 916 387 5 097 482 4 995 231
end of period
SEGMENTAL ANALYSIS
6 months 6 months % Year ended
ended ended change 30 June 2008
31 Dec 2008 31 Dec 2007 Audited
Unaudited Unaudited R`000
R`000 R`00
Revenue
Retail activities
- Household goods and 10 152 391 4 325 244 135 14 889 601
building supplies
- Automotive 5 549 973 6 415 793 (13) 12 419 863
Manufacturing and 12 255 749 9 382 425 31 19 267 783
sourcing of household
goods and related raw
materials
Logistics services 3 042 562 2 347 753 30 4 984 554
Corporate services
- Brand management 191 877 146 177 31 361 619
- Investment 91 575 121 157 (24) 182 004
participation
- Central treasury and 258 503 386 924 (33) 382 122
other activities
31 542 630 23 125 473 36 52 487 546
Intersegment (5 602 994) (2 555 422) (7 441 661)
eliminations
25 939 636 20 570 051 26 45 045 885
Operating profit before
capital items
Retail activities
- Household goods and 522 282 292 969 78 964 689
building supplies
- Automotive 124 817 247 366 (50) 488 623
Manufacturing and 1 220 940 1 027 455 19 2 184 219
sourcing of household
goods and related raw
materials
Logistics services 289 341 181 679 59 460 659
Corporate services
- Brand management 191 877 146 177 31 361 620
- Investment 91 575 121 157 (24) 182 004
participation
- Central treasury and 305 237 127 522 139 501 785
other activities
2 746 069 2 144 325 28 5 143 599
Intersegment
eliminations (276 867) (169 699) (481 986)
2 469 202 1 974 626 25 4 661 613
Segmental Analysis (continued)
31 Dec % 31 Dec 2007 30 June
2008 Unaudited % 2008 %
Unaudited R`000 Audited
R`000 R`000
Total assets
Retail activities
- Household goods and 23 993 655 46 5 555 158 16 23 035 434 45
building supplies
- Automotive 2 425 732 5 2 816 970 8 2 644 111 5
Manufacturing and 13 214 253 26 14 782 414 42 13 920 171 28
sourcing of household
goods and related raw
materials
Logistics services 5 394 936 10 4 021 528 12 4 629 291 9
Corporate services
- Brand management 4 265 191 8 2 666 019 8 4 143 382 8
- Investment 2 145 575 4 3 778 008 11 1 356 566 3
participation
- Central treasury and 637 782 1 1 184 794 3 1 109 408 2
other activities
52 077 124 100 34 804 891 100 50 838 363 100
Reconciliation Of Total Assets Per Segmental Analysis
To Total Assets Per Balance Sheet
31 Dec 2008 31 Dec 2007 30 June 2008
Unaudited Unaudited Audited
R`000 R`000 R`000
Total assets per balance sheet 59 967 037 40 996 407 56 915 744
Less:
Cash and cash equivalents (4 916 387) (5 097 482) (4 995 231)
Investments in associate (2 589 130) (747 220) (739 532)
companies
Investment in preference (209 866) (177 500) (193 285)
shares
Interest-bearing investments (174 530) (169 314) (149 333)
and loans
Total assets per segmental 52 077 124 34 804 891 50 838 363
analysis
GEOGRAPHICAL INFORMATION
6 months % 6 months % Year ended %
ended ended 30 June
31 Dec 2008 31 Dec 2007 2008
Unaudited Unaudited Audited
R`000 R`000 R`000
Revenue
Continental Europe 10 599 377 41 5 128 497 25 13 167 533 29
Pacific Rim 1 367 894 5 1 318 472 6 3 015 132 7
Southern Africa 10 175 226 39 10 255 231 50 20 331 063 45
United Kingdom 3 797 139 15 3 867 851 19 8 532 157 19
25 939 636 100 20 570 051 100 45 045 885 100
Non-current assets
Continental Europe 20 011 760 51 7 638 648 32 16 756 588 44
Pacific Rim 1 433 394 4 1 296 777 5 1 522 139 4
Southern Africa 10 593 900 27 9 399 996 39 10 063 893 27
United Kingdom 6 848 759 18 5 810 002 24 9 299 134 25
38 887 813 100 24 145 423 100 37 641 754 100
Selected explanatory notes
Statement of compliance
The consolidated interim financial information for the half-year ended 31
December 2008, has 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 interim financial statements are presented in
compliance with IAS 34 - Interim Financial Reporting, and should be read in
conjunction with the annual financial statements for the year ended 30 June
2008.
Basis of preparation
The condensed interim 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 derivative financial
instruments and biological assets which are stated at their fair value.
Accounting policies
The accounting policies adopted in preparation of the condensed interim
financial information are consistent with those of the annual financial
statements for the year ended 30 June 2008.
Commentary
Review of results
The growth in revenue and operating profit reflects another period of sound
performance and growth. The consistent performance of the group coupled with
its solid cash generating capabilities, confirms the strategic advantage
gained from the complementary vertically integrated businesses and geographic
spread business model.
Retail segment: Household goods and building supplies
United Kingdom (UK)
The UK has experienced a sharp slowdown in consumer spending. With deflation
likely for the first time in 50 years and a weak currency, the UK is a tough
trading environment.
Against the backdrop of these conditions, the board is pleased to announce
that our UK operations delivered a consistent performance compared to the
prior six months. This was mainly as a result of the group`s vertically
integrated structure, the timeous remedial steps taken in prior periods,
increased advertising and promotional spend, as well as the group`s service
levels and flexibility in terms of own manufactured goods supplemented by
third party sourced products. The different facias under which the group
trades had mixed results but, overall, revenue and profits were consistent
with those of the prior period.
The UK management`s primary focus is on streamlining the group`s existing
businesses by optimising the existing store portfolio, further eliminating
inefficiencies and improving customer service levels. Notwithstanding a
contraction of the market`s absolute size, the group is gaining market share
and positioning itself as one of the few leading furniture and household
goods players remaining in the UK. The Harveys brand awareness has, once
again, grown substantially as a result of the related promotional campaigns
and sponsorship and management is positive about the benefits to be derived
from this going forward.
Continental Europe
The extent of the group`s operations and sales channels within Europe,
particularly countries like Germany, Austria, Switzerland, Scandinavia and
The Netherlands, shielded the group to a degree from adverse economic and
consumer credit conditions. These countries (unlike countries such as Spain,
France, Portugal and Italy) and their consumers, have always been more
conservative with debt and generally use savings and cash for purchases of
household goods and furniture.
The European Retail Management (ERM) group - consolidated for the first time
in the latter half of the financial year ended 30 June 2008 - performed well
during the six months under review and vindicates the board`s decision to
capitalise the group`s former investment participations interest in various
retailers into equity. The positioning of ERM as the market leader in the
lower-end and mass-discount retail segment has been a key contributor to the
sound performance of the retail segment. Given the current financial
environment, many European consumers are "buying down", effectively placing
more emphasis on "value-for-money", thereby benefiting ERM`s market
positioning and product offering. This trend is expected to continue for the
remainder of the year.
Pacific Rim
The revenue of the Australian operations was maintained against a backdrop of
challenging conditions despite several interest rate cuts. The Australian
Government introduced consumer incentives towards the middle of December 2008
which stimulated consumer spending. The beneficial effects of these
incentives have been clearly evident in trading for the period subsequent to
the reporting date.
The New Zealand operations (albeit a small part of the Pacific Rim
operations) performed poorly and this market remains extremely vulnerable.
Management in the region remains confident that the appropriate strategies
including new product ranges, improved logistics and information technology
systems, as well as refreshed campaigns within the current economic
environment, will further benefit results.
Southern Africa
The building supplies retail operations of Timbercity and Pennypinchers
continued to expand its national footprint. Sales on a like-for-like basis
increased by 12% while new stores account for the balance of the growth.
Profitability was impacted by the start-up costs incurred on new stores
opened.
Retail segment: Automotive
In the context of a severely troubled automotive industry, the Unitrans
Automotive division reported a decline in both sales and profitability, but
continues to make a meaningful contribution to earnings from a relatively
small investment base. This division continues to deliver appropriate returns
on invested funds, and provides the logistics segment with cost-savings and
synergies that benefit the entire group.
The decline in sales and profitability resulted not only from the contraction
of the motor retail market but also from the reduction in credit approval
levels for vehicle finance in accordance with more stringent credit granting
criteria applied by financiers. In line with the group`s cash-preserving
measures, management deliberately sacrificed market share pursuant to a
decision to reduce inventory levels and to steer away from sales of less-
profitable models. Furthermore, the rapid increase in credit-default related
repossessions gave rise to a substantial number of pre-owned vehicles
entering the market at discounted prices. Despite these factors, this
division and its highly experienced management team is well-positioned to
benefit from the consolidation trend.
The Hertz car rental division was affected by reduced inbound tourist volumes
as well as lower than expected profits from de-fleeting.
Manufacturing and sourcing: household goods and related raw materials
United Kingdom
A focus on growing intercompany trade caused the retail group to further
increase orders from the UK manufacturing operations. However, the furniture
manufacturing division`s results were adversely impacted by the distress
experienced by its external customers that resulted in a decrease in external
revenue compared to that of last year. Intra-group sales remain a top-
priority for the group, in the context of the current market and will grow
further in the second half.
The raw material division in the UK - the foam/fibre operations of Pritex -
was also able to switch sales to the group`s retail operations, albeit at
lower margins, to lessen its dependence on the automotive and industrial
sectors.
Operationally, lead times and quality levels are good and costs are managed
aggressively.
Continental Europe and International sourcing operations
The European manufacturing and sourcing division delivered strong growth with
comparative revenue substantially up. The vertical integration model
continued to support growth within the manufacturing and sourcing divisions
as the UK division and ERM increased their focus on intra-group supply
opportunities. Margins were protected by a decrease in raw material and other
input costs as well as the weakening of all emerging market currencies now
included in the European Union relative to the euro.
The increased volumes attributed to the existing supply-chain and overhead
cost base of the global sourcing division not only benefit margins and
bargaining power within Asia but also increase the prospects of growing sales
with external customers making use of the Steinhoff global sourcing division.
Operationally, the division`s focus remains on further benefits to be derived
from improved planning, controls and quality measures.
The Habufa wholesale and trading joint venture in the Benelux and German
regions and the group`s bathroom specialist PurisBad in Germany, recorded
solid performances with growth in revenue and profitability.
Southern Africa
Panel products and timber
The group`s integrated timber and panel product supply chain operating as PG
Bison performed satisfactorily in a market affected by softer demand and
product pricing pressures.
The group`s forestry and sawmilling operations, taking into account the
discontinuance of board production in Pietermaritzburg and Stellenbosch and
the production capabilities of the Ugie plant, will provide the group with
long-term competitive advantages.
The increase in revenue is mostly as a result of price increases and value
added through the newly acquired Woodchem resin operations. Decline in
demand for structural timber products as well as in the sawn timber market
continues to affect growth in revenue. Management is confident that the
robust integrated supply chain, owned forestry and sawmilling operations,
relentless customer service culture and its distribution network will
continue to support PG Bison`s leading market position.
Raw materials
The results of the Raw materials division were adversely affected by the
contraction in the furniture and related household goods market. Management
is continuously assessing the development of new products and the viability
of improving performance through new initiatives.
Logistics services
United Kingdom
The market for logistics services clearly follows the pattern of UK economic
activity in general, and consequently, the UK logistics division was also
affected by the general down-turn. During the year the workforce was reduced
by 20%. Increased focus on intra-group supply is a key development priority.
Continental Europe
The European logistics division recorded an improved performance and
continues to benefit from the growth in integrated services being rendered to
group operations and in particular the ERM group.
Southern Africa
The group`s logistics division in Southern Africa performed well benefiting
from its service levels, new contracts gained and the capital expenditure
incurred in previous financial periods. The Fuel and Chemical and Passenger
divisions achieved outstanding results and stand to benefit further from
recently concluded longer-term contracts, transport related infrastructural
developments (such as Gautrain) and the forthcoming Soccer World Cup in 2010.
Corporate and group services
Entrepreneurial operational management teams supported by corporate and group
services teams were able to structure appropriately flexible currency
management strategies and re-focus operations on cash generation,
substantially benefiting the results of our treasury activities. Management`s
short-term incentives are aligned with profit achievements and cash
generation.
The structuring of the long-term debt profile embarked upon in prior years
shields the group against any short-term liquidity needs.
The group continues to investigate and participate in selected investment
participation opportunities. The benefit of having a professional property
division was highlighted during the period, while the brand management team
managed to increase profits in line with the increased activity levels.
Performance
The average exchange rate used for converting euro income and expenditure to
ZAR was R12.4152 : 1 euro compared to R9.8000 : 1 euro in respect of the
corresponding period in the previous financial year (27% change).
Group revenue increased by 26% from R20 570 million to R25 940 million,
mainly as a result of the consolidation of ERM (which, in the comparative
period, was accounted for in the Investment Participation Segment),
supplemented by the euro-denominated growth achieved in Continental Europe.
The group generated 61% (2007: 50%) of its revenue in currencies other than
South African rand, principally euro, pound and Australian dollar. The actual
foreign revenue achieved in currencies other than South African rand, but
denominated in euro, increased by 23% from Euro 1 033 million to Euro 1 269
million.
Headline earnings attributable to ordinary shareholders was maintained at R1
499 million, compared to R1 522 million in respect of the six months ended 31
December 2007.
Headline earnings per ordinary share decreased by 2% to 117,9 cents (2007:
120,4 cents) with basic earnings per ordinary share increasing 9% to 120,9
cents (2007: 110,6 cents). The latter increase is mainly attributable to the
non-recurrence in the current period of a prior period impairment provision
of R139 million against the carrying value of Steinhoff`s listed associate
company investments. The weighted average number of ordinary shares in issue
during the period increased by 1% to 1 272 million (2007: 1 263 million).
Ordinary shareholders` funds at 31 December 2008 amounted to R20 854 million
(30 June 2008: R20 773 million). The annualised return on average ordinary
shareholders` funds was 18%. The net asset value per ordinary share (NAV) was
1 630 cps at 31 December 2008 compared to 1 637 cps as at 30 June 2008. The
decrease in NAV is as a result of the capital distribution of 60 cps (R761
million) paid on 8 December 2008 and negative exchange differences arising on
consolidation of foreign subsidiaries amounting to R333 million (30 June
2008: positive of R2 353 million).
The group`s net cash flow from operating activities increased by 208% to R1
378 million (2007: R447 million). This cash generation underscores the
group`s consistency of earnings and management`s focus on preserving (and
growing) cash resources in the current economic climate. Cash generation is
determined after taking account of a net increase in working capital of R758
million (2007: R1 432 million). It remains management`s top priority to
maintain profitability, focus on cash generation and further consolidate the
group`s funding profile.
The group`s average operating margin was stable at 9,5% (2007: 9,6%), despite
the first-time consolidation of ERM (which focuses on the lower margin mass-
discount segment of the European furniture and household goods market) and
the trading conditions in particular the UK, the Pacific Rim and the
Automotive retail segment in South Africa. Margins were also adversely
impacted by the weakness in the pound and Australian dollar relative to the
euro, due to the translation of the UK and Pacific Rim results into euro as
the reporting currency of the non-Southern African operations. The adverse
effects of these currency movements on margins was countered, to an extent,
by the beneficial impact of the relative strength of the euro against the
zloty and forint. Benefits were also derived from a substantial decline in
raw material input costs, freight and shipping rates and the purchase prices
of products sourced from the Far East with its excess capacity. The group
also benefited from increased volume through-put, especially brought about by
the incremental intra-group supply growth into the UK and ERM retail
distribution bases.
Net finance charges for the year rose to R609 million (2007: R237 million),
due mainly to the interest-effect of the R1,6 billion convertible bond issued
in June 2008 and the higher ZAR : euro exchange rate at which non-South
African finance charges were translated.
At 31 December 2008, Steinhoff had net interest-bearing debt of R9 974
million (30 June 2008: R9 388 million) resulting in a net debt : equity ratio
of 39% (30 June 2008: 38%). The gearing ratio is influenced by the increase
in the closing exchange rate at which non-South African borrowings were
translated to ZAR (being R13.2037 compared to R12.3341 : 1 euro at 30 June
2008). This gearing ratio is well within the group`s internal target and
should be viewed in conjunction with the strong cash generation capabilities
of the group. At 31 December 2008 the group had cash and confirmed
unutilised borrowing facilities of R8,7 billion and a debt maturity profile
ranging to beyond 2014.
The group`s taxation charge was R164 million (2007: R163 million),
translating to an average tax rate of 8,6% (2007: 10,0%), mainly attributable
to the assessed losses utilised in the UK and Pacific Rim regions.
As reflected in the Segmental Analysis, the group benefited from the balanced
mix of its operating and geographical segments. In addition, its vertically
integrated operations delivered the desired results and represents a distinct
defensive advantage in respect of the current global economic climate. The
increased intra-group trading levels are evident from the inter-segment
revenue eliminations of R5 603 million compared to R2 555 million in respect
of the 2007 comparable period.
Corporate activity
As announced, on 1 December 2008, shareholders approved the Broad Based Black
Economic Empowerment transaction (BBBEE) proposed at the Annual General
Meeting of the company. Since then, the terms of the BBBEE transaction have
been communicated to approximately 19 000 Steinhoff Africa participating
staff members and the transaction was well received. It is the directors`
belief that this BBBEE transaction will preserve shareholder value as a
result of the alignment of interests between employees and shareholders and
should contribute to the sustainability and growth of the group`s South
African operations.
Outlook
The current global economic conditions remain challenging. The resultant
impact on consumer confidence and spending patterns are causing the markets
to contract. The group`s financial standing and focus on cash generation and
preservation, existing trading relationships and spread of businesses, will
stand it in good stead. The vertically integrated structure and
entrepreneurial culture of the group will continue to protect the group`s
sustainable earnings capability whilst participating in the consolidation
trend.
Cash distribution of Steinhoff
It is the group`s policy to declare cash distributions once a year after its
financial year-end at 30 June.
On behalf of the board of directors
D Konar MJ Jooste
Non-executive chairman Chief executive officer
2 March 2009
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 7 to preference shareholders
The board of Steinhoff Investments has resolved to declare a dividend of 584
cents per preference share in respect of the period from 1 July 2008 up to
and including 31 December 2008 (the dividend period), payable on Tuesday, 28
April 2009, to those preference shareholders recorded in the books of the
company at the close of business on Friday, 24 April 2009. 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.
2009
Last date to trade cum dividend Friday, 17 April
Shares trade ex dividend Monday, 20 April
Record date Friday, 24 April
Payment date Tuesday, 28 April
Share certificates may not be dematerialised or rematerialised between
Monday, 20 April 2009 and Friday, 24 April 2009, both days inclusive.
Note: In the event that the South African National Elections are confirmed
for Wednesday, 22 April 2009, a Public Holiday may be declared and the
dividend timetable above would be impacted. In such instance, Steinhoff
would likely bring the Steinhoff branch register dividend dates forward by
one day to Thursday, 16 April 2009 with the respective ex dividend date being
changed to Friday, 17 April 2009. The record and payment dates would remain
as stated above.
On Tuesday, 28 April 2009, 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 Tuesday, 28 April 2009.
Proposed taxation amendments
We refer to our previous communications regarding the conversion of Secondary
Tax on Companies (STC) to a shareholder dividend tax.
During the 2009 budget speech the Minister of Finance reiterated the fact
that the new dividends tax will only come into effect once tax treaty
ratification processes are completed. The Minister indicated that all the
relevant treaties have been renegotiated and that it is likely that the
dividends tax will be implemented during the second half of 2010.
The basic legislative framework for the introduction of dividends tax was
enacted in 2008. As indicated by the Minister, further legislative amendments
during 2009 will provide for the completion of the dividend tax reform.
Accordingly, the preference shareholders are advised that, until such time as
all the legislative amendments are finalised and promulgated, legal opinion
obtained and shareholder approval procured, it is still not possible to
determine exactly what the impact will be on the cumulative non-redeemable
non-participating preference shares issued by Steinhoff Investments.
A further announcement in this regard will be made once the detailed
legislation is published and duly considered.
On behalf of the board of directors
D Konar JHN van der Merwe
Non-executive director Executive director
2 March 2009
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 - 9 March 2009 www.amap.co.za
- KAP International Holdings Limited - 2 March 2009
www.kapinternational.com
Administration
Steinhoff International Holdings Limited
("Steinhoff" or "the company" or "the group")
Registration number: 1998/003951/06 (Incorporated in the Republic of South
Africa)
JSE share code: SHF ISIN code: ZAE000016176
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: D Konar (chairman), MJ Jooste (chief executive officer), DE
Ackerman, DC Brink, YZ Cuba, CE Daun*, JF Mouton, FJ Nel, FA Sonn, BE
Steinhoff*, IM Topping#, DM van der Merwe, JHN van der Merwe
Alternate directors: JNS du Plessis, HJK Ferreira, SJ Grobler, KJ Grove, A
Kruger-Steinhoff*
#British *German non-executive
www.steinhoffinternational.com
To view results on mobile: www.steinhoff.mobi
Date: 02/03/2009 14:58:01 Produced by the JSE SENS Department.
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