| Wed 26 Aug 2009, 13:51 | | DST - Distell Group - Audited results of the Group for the year ended |
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DST - Distell Group - Audited results of the Group for the year ended
30 June 2009 and cash dividend declaration
Distell Group Limited
Registration number 1988/005808/06
JSE share code: DST ISIN: ZAE000028668
("Distell" or "the Group")
Audited results of the Group for the year ended
30 June 2009 and cash dividend declaration
Salient features
- Total sales volumes up 10,8%
- Total revenue up 15,5%
- Operating profit up 4,8%
- Headline earnings per share up 0,9%
- Annual dividend per share up 8,5%
Abridged consolidated balance sheets
2009 2008
R`000 R`000
Assets
Non-current assets
Property, plant and equipment 1 773 480 1 546 159
Biological assets 146 375 122 024
Financial assets 74 281 85 901
Investments in associates 38 487 31 636
Intangible assets 244 685 39 373
Retirement benefit assets 58 150 114 588
Deferred income tax assets 24 861 21 870
Total non-current assets 2 360 319 1 961 551
Current assets
Inventories 3 714 655 3 268 555
Trade and other receivables 1 155 381 954 036
Current income tax assets 74 381 62 968
Cash and cash equivalents 178 472 193 673
Total current assets 5 122 889 4 479 232
Total assets 7 483 208 6 440 783
Equity and liabilities
Capital and reserves
Capital and reserves 4 831 501 4 453 641
Minority interest 2 025 2 025
Total equity 4 833 526 4 455 666
Non-current liabilities
Interest-bearing borrowings 422 386 2 938
Retirement benefit obligations 18 300 15 623
Deferred income tax liabilities 207 769 177 460
Total non-current liabilities 648 455 196 021
Current liabilities
Trade and other payables 1 650 532 1 483 691
Provisions 9 282 49 577
Interest-bearing borrowings 324 267 226 027
Current income tax liablilities 17 146 29 801
Total current liabilities 2 001 227 1 789 096
Total equity and liabilities 7 483 208 6 440 783
Abridged consolidated income statements
2009 2008 Changes
R`000 R`000 %
Revenue 10 863 728 9 409 597 15,5
Operating expenses (9 453 995) (8 074 774) 17,1
Costs of goods sold (7 273 020) (6 124 859)
Sales and marketing expenses (1 293 616) (1 154 963)
Distribution costs (652 208) (546 897)
Administration and other costs (235 151) (248 055)
Other gains 1 273 11 667
Operating profit 1 411 006 1 346 490 4,8
Dividend income 1 552 1 503
Finance income 30 938 52 448
Finance costs (54 162) (46 064)
Share of profit of associates 30 058 23 523
Profit before taxation 1 419 392 1 377 900 3,0
Taxation (464 994) (425 899)
Profit for the year 954 398 952 001 0,3
Attributable to:
Equity holders of the company 954 398 952 454 0,2
Minority interest - (453)
954 398 952 001 0,3
Per share performance:
Issued number of ordinary shares 201 092 200 660
(`000)
Weighted number of ordinary shares 200 667 199 974
(`000)
Earnings per ordinary share (cents)
- basic earnings basis 475,6 476,3 (0,1)
- diluted earnings basis 455,8 447,1 1,9
- headline basis 475,2 471,0 0,9
- diluted headline basis 455,3 442,2 3,0
Dividends per ordinary share (cents)
- interim 124,0 104,0 19,2
- final 132,0 132,0 -
256,0 236,0 8,5
Reconciliation of headline earnings:
Net profit attributable to equity 954 398 952 454 0,2
holders of the company
Adjusted for (net of taxation):
Net other capital gains (917) (10 530)
Headline earnings 953 481 941 924 1,2
Abridged consolidated cash flow statements
2009 2008
R`000 R`000
Cash flow from operating activities
Operating profit 1 411 006 1 346 490
Non-cash flow items 135 065 124 785
Working capital changes (515 665) (580 430)
Inventories (441 923) (567 537)
Trade and other receivables (224 453) (136 887)
Trade payables and provisions 150 711 123 994
Cash generated from operations 1 030 406 890 845
Net financing costs (9 258) (44 629)
Taxation paid (451 523) (476 654)
Dividends paid (513 727) (426 194)
Net cash generated from operating activities 55 898 (56 632)
Cash outflow from investment activities (591 749) (6 551)
Cash inflow from financing activities 423 480 (312 844)
Decrease in net cash, cash equivalents and (112 371) (376 027)
bank overdrafts
Net cash, cash equivalents and bank (31 341) 332 426
overdrafts at the beginning of the year
Exchange gains on cash and cash equivalents (1 132) 12 260
Net cash, cash equivalents and bank (144 844) (31 341)
overdrafts at the end of the year
Abridged consolidated statements of recognised income and expense
2009 2008
R`000 R`000
Fair value adjustments (net of tax):
- available-for-sale investments 3 419 1 697
Currency translation differences (56 848) 4 300
Actuarial gains and losses (28 215) (45 301)
Net loss recognised directly in equity (81 644) (39 304)
Profit for the year 954 398 952 001
Total recognised income for the year 872 754 912 697
Attributable to:
Equity holders of the company 872 754 913 150
Minority interest - (453)
872 754 912 697
Notes
2009 2008
R`000 R`000
1. Sales volumes (litres `000) 464 119 419 059
2. Net interest-bearing borrowings
Interest-bearing borrowings
Non-current 422 386 2 938
Current 324 267 226 027
746 653 228 965
Cash resources (178 472) (193 673)
568 181 35 292
3. Cash outflow from investment activities
Purchases of property, plant and (99 966) (176 845)
equipment (PPE) to maintain operations
Purchases of PPE to expand operations (282 142) (206 486)
Proceeds from sale of PPE 5 279 12 724
Proceeds from financial assets disposed 27 475 3 283
Proceeds from preference shares redeemed - 379 319
Purchases of intangible assets (242 395) (18 546)
(591 749) (6 551)
4. Directors` valuation of financial assets
and associates
Other investments and loans 74 281 85 901
Associates 304 785 187 806
379 066 273 707
5. Capital commitments
Contracted 254 836 85 138
Authorised but not contracted 551 567 472 940
806 403 558 078
6. Depreciation of property, plant and 144 080 151 655
equipment
7. Net asset value per share (cents) 2 404 2 221
8. 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.
9. 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- 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 annual 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.
Operating performance
Revenue grew 15,5% to R10,9 billion on a sales volume increase of 10,8%.
Domestic sales volumes increased by 6,4% and revenue by 11,2%. Cider and RTD
(ready-to-drink) brands continued their strong performance with impressive sales
volume and market share growth. However, spirits sales volumes dropped in line
with the market, which experienced a 5% decline as consumers sought lower-priced
alternatives in an acutely competitive trading environment. Our wine portfolio
was able to deliver marginal volume growth.
International sales volumes, including Africa, increased by 26,7%. Wine sales
volumes showed a healthy increase, outpacing the rise in South African industry
bottled wine exports for the comparable period. Spirit volumes achieved good
growth. As a result, international revenue, grew 36,9%.
Africa, in particular delivered exceptional growth, to contribute 52,0% to
foreign revenue.
Our strong sales performance during the first six months of the financial year,
however, was followed by significant slower growth in the remaining period which
impacted substantially on the full-year performance.
The increase of 4,8% in operating profit resulted mainly from continued revenue
growth. However, net operating margin declined from 14,3% to 13,0%. Benefits
derived from improved throughput and better operating efficiencies were negated
by the substantial increases we experienced in material and distribution costs,
as well as the incremental costs of expanding sales and marketing representation
in key markets. This was compounded by adverse exchange rates. Towards the close
of the financial year the rand strengthened substantially against most major
currencies, giving rise to foreign currency translation losses of R46.6 million
at year end (2008: R57.3 million gain).
Cash generated from operations amounted to R1 030,4 million (2008: R890,8
million).
Headline earnings grew 1,2% to R953,5 million and headline earnings per share
improved by 0,9%.
Investment and funding
Total assets increased by 16,2% to R7,5 billion.
Capital expenditure amounted to R382,1 million, of which R100,0 million was
spent on the replacement of assets. A further R282,1 million was directed to
capacity expansion, mainly to increase production capability at our cider and
RTD facilities, our whisky production plants and our sparkling wine cellars.
In April 2009, we acquired the cognac brand Bisquit and also secured sufficient
inventory to meet medium-term demand for the brand. The total investment
amounted to R396,6 million.
Investment in net working capital, including inventory of R168,4 million
relating to the acquisition mentioned above, increased by 19,4% to R3,2 billion.
Cash generated from operating activities amounted to R55,9 million (2008: R56,6
million consumption), and the Group remains in a strong financial position with
net interest-bearing debt of R568,2 million, and a debt/equity ratio of 11.8%.
Prospects
South Africa has not escaped the impact of the global economic crisis. This
became clearly evident particularly over the second half of the reporting
period. Although there have been early signs of a recovery, the persistent
uncertainty in world markets makes it difficult to predict either the timing or
the extent of the upturn.
However, our strong portfolio of appealing and diverse brands, coupled to our
capacity to trade across a spectrum of markets and the security of our financial
position mean that we are well positioned to continue to pursue our strategic
course.
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 year and serves as chairperson of the audit
and risk committee.
Auditors` report
The consolidated annual financial statements have been audited by
PricewaterhouseCoopers Inc. and their unqualified auditors` report is available
for inspection at the registered office of the company.
Cash dividend declaration
The directors have resolved to declare cash dividend number 42 of 132 cents per
share for the year ended 30 June 2009, thereby maintaining the final dividend of
the previous year. This represents a total dividend of 256 cents (2008: 236
cents) for the year and a dividend cover of 1,9 times (2008: 2,0 times) by
headline earnings. It is the boards intention to restore the full year dividend
cover to 2,0 times by headline earnings, over time.
The salient dates of this dividend distribution are:
Last day to trade cum dividend Friday, 11 September 2009
Shares commence trading ex dividend from
commencement of business on Monday, 14 September 2009
Record date Friday, 18 September 2009
Payment date Monday, 21 September 2009
Share certificates may not be dematerialised or rematerialised between Monday,
14 September 2009 and Friday, 18 September 2009, both days inclusive.
Signed on behalf of the board
DM Nurek JJ Scannell
Chairman Managing director
Stellenbosch
26 August 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)
www.distell.co.za
Date: 26/08/2009 13:51:02 Produced by the JSE SENS Department.
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