| Tue 5 May 2009, 7:05 | | SPP - The Spar Group Limited - Unaudited interim results for the six months |
|
SPP
SPP
SPP - The Spar Group Limited - Unaudited interim results for the six months
ended 31 March 2009 and cash dividend declaration
THE SPAR GROUP LIMITED ("SPAR" or "the company" or "the group")
REGISTRATION NUMBER: 1967/001572/06
ISIN: ZAE000058517 JSE share code: SPP
UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 MARCH 2009
AND CASH DIVIDEND DECLARATION
FINANCIAL HIGHLIGHTS
OPERATING PROFIT +21.9%
ATTRIBUTABLE PROFIT +39.3%
HEADLINE EARNINGS PER SHARE +20.5%
INTERIM DIVIDEND 122 CENTS PER SHARE +22.0%
Condensed Income Statement
Unaudited
Six months
ended
% March
Rmillion Change 2009
REVENUE 24.4 16 247.5
Turnover 24.5 16 100.8
Cost of sales (14 827.0)
Gross profit 1 273.8
Other income 146.7
Operating expenses (815.4)
OPERATING PROFIT 21.9 605.1
Interest received 17.8
Interest paid (17.7)
Profit on sale of Western Cape distribution centre 63.0
Profit before taxation 31.7 668.2
Taxation (198.2)
PROFIT FOR THE PERIOD ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS 39.3 470.0
Earnings per share (cents) 37.7 278.2
Diluted earnings per share (cents) 269.3
SALIENT STATISTICS
Headline earnings per share (cents) 20.5 242.5
Diluted headline earnings per share (cents) 234.7
Dividend per share (cents) 22.0 122.0
Net asset value per share (cents) 1 011.8
Operating profit margin (%) 3.8
Return on equity (%) 29.3
HEADLINE EARNINGS RECONCILIATION
Profit for the year attributable to
ordinary shareholders 470.0
Adjusted for:
Profit on sale of property, plant and equipment (65.0)
Tax effects of adjustments 4.7
Headline earnings 21.9 409.7
Unaudited Audited
Six months Year
ended ended
March September
Rmillion 2008 2008
REVENUE 13 056.2 27 002.2
Turnover 12 936.7 26 742.2
Cost of sales (11 884.3) (24 582.5)
Gross profit 1 052.4 2 159.7
Other income 119.5 260.0
Operating expenses (675.7) (1 447.8)
OPERATING PROFIT 496.2 971.9
Interest received 21.7 45.9
Interest paid (10.4) (19.3)
Profit on sale of Western Cape distribution centre
Profit before taxation 507.5 998.5
Taxation (170.0) (316.9)
PROFIT FOR THE PERIOD ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS 337.5 681.6
Earnings per share (cents) 202.0 406.5
Diluted earnings per share (cents) 193.0 390.5
SALIENT STATISTICS
Headline earnings per share (cents) 201.2 405.7
Diluted headline earnings per share (cents) 192.2 389.8
Dividend per share (cents) 100.0 255.0
Net asset value per share (cents) 764.4 883.5
Operating profit margin (%) 3.8 3.6
Return on equity (%) 28.0 52.5
HEADLINE EARNINGS RECONCILIATION
Profit for the year attributable to
ordinary shareholders 337.5 681.6
Adjusted for:
Profit on sale of property, plant and equipment (1.8) (1.8)
Tax effects of adjustments 0.5 0.5
Headline earnings 336.2 680.3
Condensed Balance Sheet
Unaudited Unaudited Audited
March March September
Rmillion 2009 2008 2008
ASSETS
Non-current assets 1 746.9 1 462.3 1 549.6
Property, plant and equipment 1 300.9 940.4 1 083.3
Goodwill 245.6 245.6 245.6
Investment in associate 3.5 3.5 3.5
Finance lease receivables 27.4 14.4 20.4
Operating lease receivables 127.0 118.5 125.2
Loans 14.5 122.2 52.6
Other non-current assets 2.8 3.6 3.3
Deferred taxation asset 25.2 14.1 15.7
Current assets 4 654.0 3 784.5 4 284.3
Inventories 872.0 689.7 795.7
Trade and other receivables 3 686.9 2 869.2 3 341.4
Prepayments 11.3 9.0 24.2
Finance lease receivables 7.6 3.6 5.5
Operating lease receivables 14.7 11.5 13.4
Loans 8.9 29.7 15.9
Bank balances and cash 66.6
Bank balances - Guilds 52.6 77.5 57.9
4 654.0 3 756.8 4 254.0
Non-current assets held for sale 27.7 30.3
TOTAL ASSETS 6 400.9 5 246.8 5 833.9
EQUITY AND LIABILITIES
Capital and reserves 1 719.1 1 298.8 1 487.8
Share capital and premium 14.3 13.4 13.4
Treasury shares (6.5) (105.9) (77.6)
Share based payment reserve 88.8 20.5 78.4
Retained earnings 1 622.5 1 370.8 1 473.6
Non-current liabilities 190.2 175.7 184.7
Post retirement medical aid provision 65.0 57.8 60.8
Operating lease payables 125.2 117.9 123.9
Current liabilities 4 491.6 3 772.3 4 161.4
Trade and other payables 3 688.5 3 677.5 3 707.0
Operating lease payables 15.6 12.3 14.4
Provisions 9.1 5.1 8.7
Taxation 14.0 77.4 121.3
Bank overdrafts 764.4 310.0
TOTAL EQUITY AND LIABILITIES 6 400.9 5 246.8 5 833.9
Condensed Cash Flow Statement
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
March March September
Rmillion 2009 2008 2008
CASH FLOWS FROM OPERATING ACTIVITIES (338.8) (93.0) (379.7)
Operating cash flows before working
capital changes 696.4 553.5 1 087.8
Net working capital changes (459.6) (306.7) (870.1)
Interest received 17.2 21.4 45.4
Interest paid (17.7) (10.4) (19.3)
Taxation paid (314.9) (163.6) (268.1)
Dividends paid (260.2) (187.2) (355.4)
CASH FLOWS FROM INVESTING ACTIVITIES (132.8) (242.4) (356.3)
Investment to maintain operations 57.3 (10.9) (55.6)
- Replacement of property, plant
and equipment (38.1) (14.5) (60.8)
- Proceeds on disposal of property,
plant and equipment 95.4 3.6 5.2
Investment to expand operations (226.7) (224.5) (365.3)
Net movement on loans and
investments 36.6 (7.0) 64.6
CASH FLOWS FROM FINANCING ACTIVITIES 11.9 26.0 29.2
Proceeds from issue of share
capital and premium 0.8
Proceeds from exercise of share options 45.9 26.4 37.7
Share repurchases (34.8) (8.1)
Repayment of long-term borrowings (0.4) (0.4)
Net decrease in cash and cash
equivalents (459.7) (309.4) (706.8)
Net cash and cash equivalents at
beginning of period (252.1) 453.5 453.5
Effects of exchange rate changes on
the balance of cash held in foreign
currencies 1.2
NET CASH AND CASH EQUIVALENTS AT
END OF PERIOD (711.8) 144.1 (252.1)
Condensed Statement of Changes in Equity
Share based
Share capital Treasury payment
Rmillion and premium shares reserve
Total capital and reserves at
30 September 2007 13.4 (154.4) 30.2
Net profit for the period
Recognition of share based payments 12.4
Take-up of share options 48.5 (22.1)
Dividends declared
Total capital and reserves at
31 March 2008 13.4 (105.9) 20.5
Net profit for the period
Recognition of share based payments 9.9
Take-up of share options 36.4 (25.1)
Transfer arising from take-up of
share options 73.1
Share repurchases (8.1)
Dividends declared
Total capital and reserves at
30 September 2008 13.4 (77.6) 78.4
Net profit for the period
Share capital issued 0.9 (0.9)
Recognition of share based payments 10.4
Take-up of share options 106.8 (60.9)
Transfer arising from take-up of
share options 60.9
Share repurchases (34.8)
Dividends declared
Total capital and reserves at
31 March 2009 14.3 (6.5) 88.8
Attributable
Retained to ordinary
Rmillion earnings shareholders
Total capital and reserves at
30 September 2007 1 220.5 1 109.7
Net profit for the period 337.5 337.5
Recognition of share based payments 12.4
Take-up of share options 26.4
Dividends declared (187.2) (187.2)
Total capital and reserves at 31 March 2008 1 370.8 1 298.8
Net profit for the period 344.1 344.1
Recognition of share based payments 9.9
Take-up of share options 11.3
Transfer arising from take-up of share options (73.1) -
Share repurchases (8.1)
Dividends declared (168.2) (168.2)
Total capital and reserves at 30 September 2008 1 473.6 1 487.8
Net profit for the period 470.0 470.0
Share capital issued -
Recognition of share based payments 10.4
Take-up of share options 45.9
Transfer arising from take-up of share options (60.9) -
Share repurchases (34.8)
Dividends declared (260.2) (260.2)
Total capital and reserves at 31 March 2009 1 622.5 1 719.1
Notes to the Condensed Financial Statements
1 BASIS OF PRESENTATION AND COMPLIANCE WITH IFRS
The group financial results, from which these condensed financial statements
were derived, are prepared in accordance with International Financial Reporting
Standards and have been prepared on the historical cost basis except for the
revaluation of financial instruments, the valuation of share based payments and
the post retirement medical obligation. The principal accounting policies
adopted are consistent with those of the previous year. These condensed
financial statements have been prepared in terms of IAS 34 - Interim Financial
Reporting.
These unaudited interim results have not been reviewed or reported on by the
group`s external auditors.
Unaudited Unaudited Audited
Six months Six months Year ended
March March September
2009 2008 2008
Rmillion Rmillion Rmillion
2 NON-CURRENT ASSETS CLASSIFIED
AS HELD FOR SALE
Property, plant and equipment held
for sale 27.7 30.3
3 SHARE CAPITAL AND PREMIUM
Authorised
250 000 000 (March 2008: 250 000
000) ordinary
shares of 0.06 cents (March 2008:
0.06 cents) each 0.2 0.2 0.2
Issued
170 010 935 (March 2008: 169 940
035) ordinary
0.1 0.1 0.1
shares of 0.06 cents (March 2008:
0.06 cents) each
Share premium account 14.2 13.3 13.3
Balance at beginning of year 13.3 13.3 13.3
Shares issued during the year 0.9
Total share capital and premium 14.3 13.4 13.4
Issued share capital amounts to R102 007 consisting of 170 010 935 ordinary
shares. 70 900 shares were issued during the six months ended 31 March 2009.
The weighted average number of ordinary shares (net of treasury shares) used in
the calculation of earnings per share and headline earnings per share was 168
949 525 (March 2008: 167 100 486).
Diluted earnings and headline earnings per share were based on a weighted
average number of ordinary shares (net of treasury shares) of 174 518 888
(March 2008: 174 890 154).
4 CONTINGENT LIABILITIES
Guarantees issued in respect of the
finance obligations
of SPAR retailer members 310.2 128.6 226.9
5 OPERATING LEASES
Operating lease costs charged
against
operating profit
Immovable property 5.8 5.2 10.0
- Lease rentals 108.3 81.0 167.8
- Sub-lease recoveries (102.5) (75.8) (157.8)
Plant, equipment and vehicles 5.6 2.6 8.7
Operating lease commitments
Future minimum lease payments
under non-
cancellable operating leases 1 817.3 1 630.0 1 706.0
- Land and buildings 1 815.5 1 627.9 1 703.9
- Other 1.8 2.1 2.1
Future minimum sub-lease
receivables under
non-cancellable property leases (1 808.2) (1 597.9) (1 683.8)
Net commitments 9.1 32.1 22.2
6 CAPITAL COMMITMENTS
Contracted 149.3 188.2 248.7
Approved but not contracted 0.9 163.3 117.7
150.2 351.5 366.4
7 SEGMENTAL REPORTING
The group operates its business from six distribution centres situated
throughout South Africa. The distribution centres individually supply goods and
services of a similar nature to the group`s voluntary trading members. The
directors are of the opinion that the operations of the individual distribution
centres are substantially similar to one another and that the risks and returns
of these distribution centres are likewise similar. As a consequence thereof,
the business of the group is considered to be a single geographic segment. TOPS
at SPAR and Build it, although constituting distinct businesses at retail, do
not satisfy the thresholds of significance for disclosure as separate
reportable segments of the group.
8 POST BALANCE SHEET EVENTS
No material events have occurred subsequent to 31 March 2009 which may have an
impact on the group`s reported financial position at this date.
Review of Trading Results
The group continued to perform well in the half year under review
despite tight economic conditions and a competitive retail trading environment.
Growth at existing stores, new store openings, aggressive promotional activity
and the impact of inflation resulted in the group`s turnover increasing by
24.5% for the six months under review.
SPAR retail outlets continued to trade strongly and the group gained further
market share. Thirty four new stores opened during the period and retail
trading space increased by 4.4%. At 31 March 2009 the group serviced 239
SUPERSPAR, 460 SPAR and 147 KWIKSPAR stores.
TOPS at SPAR liquor outlets grew market share with 46 stores being opened.
Organic growth at existing stores was a healthy 14%. Trading remains buoyant
and turnover ex-distribution centres increased in excess of 36%. Further store
openings are scheduled for the balance of the year.
Build it was affected by the economic slowdown and turnover growth at retail
was correspondingly lower. The supply of critically important cement again
became a problem in some areas, which adversely affected retailers` sales
performance. Eleven new stores were opened during the six months. Turnover to
Build it outlets increased by 21.2%.
The group`s continued focus on responsible competitive food pricing resulted in
the gross margin declining to 7.9% (2008: 8.1%). Expenditure increased 20.7%,
inclusive of higher operating costs at new facilities. The net margin however
remained unchanged at 3.8%.
The overdraft reflects the effects of earlier creditor payments, continued
expenditure on facilities, share buybacks and increased taxation and dividend
payments. The cash flow however remains strong and the group continues to be
able to self-fund its capital expenditure programme.
DISTRIBUTION FACILITIES
The group`s South Rand distribution centre has taken occupation of its expanded
dry goods facility and the upgrade of its perishable facility is progressing
according to schedule. Final handover of the facility remains October 2009.
Construction of a new perishable facility in Mount Edgecombe, KwaZulu-Natal is
progressing according to timetable and budget. Scheduled handover of the
facility is September 2009 with deliveries commencing from this operation
shortly thereafter.
With the group`s new Western Cape distribution centre fully operational, the
supply of goods to SPAR retailers in Namibia has been transferred from the
group`s North Rand facility to the Western Cape. This move will provide the
Western Cape operation with increased flow through and economies of scale,
whilst at the same time easing the volume pressure on the North Rand facility.
PROSPECTS
Reduced economic activity and the likelihood of declining inflation will result
in lower turnover growth for the balance of the financial year. This will,
however, be countered by further new store openings and ongoing marketing
activity. The group is confident that it will produce a satisfactory level of
revenue and profit growth for the remainder of 2009.
Mike Hankinson Wayne Hook
Chairman Chief Executive
DECLARATION OF ORDINARY DIVIDEND
Notice is hereby given that an interim dividend of 122 cents per share has been
declared in respect of the six months ended 31 March 2009.
The salient dates for the payment of the interim dividend are detailed below:
Last day to trade cum-dividend Friday, 29 May 2009
Shares to commence trading ex-dividend Monday, 1 June 2009
Record date Friday, 5 June 2009
Payment of dividend Monday, 8 June 2009
Shareholders will not be permitted to dematerialise or rematerialise their
share certificates between Monday, 1 June 2009 and Friday, 5 June 2009, both
days inclusive.
By order of the board
KJ O`Brien
Company Secretary
Pinetown
05 May 2009
DIRECTORATE AND ADMINISTRATION
DIRECTORS: MJ Hankinson* (Chairman), WA Hook (Chief Executive), RW Coe,
DB Gibbon*, PK Hughes*, RJ Hutchison*, MP Madi*, HK Mehta*, P Mnganga*,
R Venter *Non-executive
COMPANY SECRETARY: KJ O`Brien
THE SPAR GROUP LIMITED ("SPAR" or "the company" or "the group")
REGISTRATION NUMBER: 1967/001572/06
ISIN: ZAE 000058517 JSE share code: SPP
REGISTERED OFFICE: 22 Chancery Lane, PO Box 1589, Pinetown, 3600
TRANSFER SECRETARIES: Link Market Services South Africa (Pty) Limited
PO Box 4844, Johannesburg, 2000
AUDITORS: Deloitte & Touche, PO Box 243, Durban, 4000
SPONSOR: Barnard Jacobs Mellet Corporate Finance (Pty) Limited
PO Box 62200, Marshalltown, 2107
BANKERS: First National Bank, PO Box 4130, Umhlanga Rocks, 4320
ATTORNEYS: Garlicke & Bousfield
PO Box 1219, Umhlanga Rocks, 4320
WEBSITE: www.spar.co.za
Date: 05/05/2009 07:05:05 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.
