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AOO AOVP AON
AOO
AOO/AON/AOVP - African & Overseas Enterprises - Reviewed Results for the Year
Ended 30 June 2009
AFRICAN & OVERSEAS ENTERPRISES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1947/027461/06)
Share codes: AOO - AON - AOVP
ISIN: ZAE000000485 - ZAE000009718 - ZAE000000493
REVIEWED RESULTS FOR THE YEAR ENDED 30 JUNE 2009
INCOME STATEMENT
Consolidated (R`000)
2009 2008
(Reviewed) (Audited)
Revenue 502 787 465 585
Turnover 491 023 454 126
Cost of sales (274 748) (247 295)
Gross profit 216 275 206 831
Employment costs (70 937) (65 250)
Occupancy costs (53 325) (40 901)
Depreciation and amortisation (12 248) (14 349)
Other operating costs (55 215) (53 029)
Rental income 408 2,567
Royalties 1 118 944
Operating profit 26 076 36 813
Dividends received 23 22
Interest received 10 215 7 926
Interest paid (446) (540)
Profit on disposal of associate - 671
Share of losses of associated company - (59)
Profit before taxation 35 868 44 833
Income tax expense (11 422) (7 025)
Profit for the year 24 446 37 808
Profit attributable to:
Ordinary and `N` ordinary shareholders 12 936 21 102
Preference shareholders 138 87
Equity holders of the parent 13 074 21 189
Minority interest 11 372 16 619
24 446 37 808
Reconciliation of headline earnings
Attributable earnings 12 936 21 102
Profit on disposal of plant and equipment (192) (72)
Profit on disposal of associate - (368)
Headline earnings 12 744 20 662
Headline earnings per share (cents) 111,9 181,5
Earnings per share (cents) 113,6 185,3
Proposed dividend per share (cents) 25,0 25,0
Dividend cover (based on headline earnings) 4,5 7,3
Weighted average number of equity
shares on which earnings per share
is based (000) 11 387 11 387
Number of equity shares in issue (000) 11 387 11 387
BALANCE SHEET
Consolidated (R`000)
2009 2008
(Reviewed) (Audited)
Assets
Non-current assets 60 484 56 153
Property, plant and equipment 47 058 36 561
Investment property 3 511 3 511
Intangible assets 2 720 4 069
Investments (unlisted) 722 722
Deferred taxation 6 473 11 290
Current assets 201 962 185 660
Inventories 68 484 64 096
Trade and other receivables 19 205 22 343
Income tax receivable 14 10
Cash and cash equivalents 114 259 99 211
Total assets 262 446 241 813
Equity and liabilities
Capital and reserves 211 777 193 422
Share capital 1 200 1 200
Share premium 6 076 6 076
Other reserves 530 2 896
Accumulated profits 109 533 97 039
Minority interest 94 438 86 211
Non-current liabilities 11 653 10 595
Post-retirement liability 4 122 4 277
Accrued operating lease liability 7 531 6 318
Current liabilities 39 016 37 796
Provisions 669 897
Trade and other payables 32 578 33 652
Forward exchange contracts 5 642 13
Income tax payable 127 3 234
Total equity and liabilities 262 446 241 813
ABRIDGED CASH FLOW STATEMENT
Consolidated (R`000)
2009 2008
(Reviewed) (Audited)
Cash generated by operations 45 086 53 950
Working capital changes (2 720) (16 269)
Interest received 10 215 7 926
Interest paid (446) (540)
Dividends received 23 22
Dividends paid (6 162) (3 951)
Taxation paid (9 716) (7 646)
Net cash inflows from operations 36 280 33 492
Additions to property, plant and equipment (22 090) (15 520)
Proceeds on disposal of property,
plant and equipment 858 280
Proceeds on disposal of investment in associate - 2 676
Net cash outflows from investing activities (21 232) (12 564)
Proceeds on delivery of shares by share trust - (15)
Net cash outflows from financing activities - (15)
Net increase in cash 15 048 20 913
Cash at the beginning of the period 99 211 78 298
Cash at the end of the period 114 259 99 211
STATEMENT OF CHANGES IN EQUITY Consolidated (R`000)
2009 2008
(Reviewed) (Audited)
Share capital 1 200 1 200
Share premium 6 076 6 076
Other reserves
Opening balance 2 896 2 978
Share-based payments 39 50
Fair value adjustment for available-for-sale
financial assets - 51
Transfer reserve (2 405) -
Foreign exchange translation - (183)
Closing balance 530 2 896
Accumulated profits
Opening balance 97 039 77 531
Profit after taxation 13 074 21 189
Reserve transferred 2 405 -
Dividends (2 985) (1 681)
Closing balance 109 533 97 039
Minority interest
Opening balance 86 211 71 943
Profit after tax 11 372 16 619
Dividends (3 177) (2 274)
Other 32 (77)
Closing balance 94 438 86 211
Total capital and reserves 211 777 193 422
OTHER INFORMATION
Consolidated (R`000)
2009 2008
(Reviewed) (Audited)
Capital expenditure 22 090 15 517
Capital commitments
Authorised - not contracted for 16 168 19 818
Current ratio 5,2 4,9
Gross profit margin 44,0% 45,5%
Operating profit margin 5,3% 8,1%
Retail segment operating profit margin 6,9% 8,8%
SEGMENTAL REPORTING
Consolidated (R`000)
2009 2008
(Reviewed) (Audited)
Turnover
Retail 466 200 415 503
Manufacturing 24 823 38 623
Manufacturing total 27 192 46 795
Less: intersegment sales (2 369) (8 172)
Total 491 023 454 126
Operating profit/(loss)
Retail 32 035 36 624
Property 507 1 350
Manufacturing (2 095) 417
Group services+ (4 371) (1 578)
Total 26 076 36 813
Depreciation included in operating profit
Retail 11 759 13 218
Manufacturing 804 1 533
Total 12 563 14 751
Total segment assets
Retail 180 248 173 029
Property 8 725 8 784
Manufacturing 11 348 19 906
Group services 62 125 40 094
Total 262 446 241 813
Total segment liabilities
Retail (40 638) (36 329)
Manufacturing (5 724) (7 483)
Group services (4 307) (4 579)
Total (50 669) (48 391)
Capital expenditure
Retail 22 087 14 933
Manufacturing - 587
Property 3 -
Total 22 090 15 520
+ Group services includes corporate costs.
NOTES
1 Basis of preparation
These annual financial statements have been prepared in terms of the South
African Companies Act of 1973 (as amended), IFRS and IAS 34: Interim Financial
Reporting.
2 Accounting policies
The accounting policies applied are consistent with those applied in the
preparation of the group`s annual financial statements for the year ended
30 June 2008.
3 Review by auditors
The financial information has been reviewed by KPMG Inc, whose unqualified
review opinion is available for inspection at the company`s registered office.
It is anticipated that an unqualified audit opinion will be issued once the
detailed financial statements have been finalised.
The annual report containing a detailed review of the operations of the company
together with the audited financial statements will be posted to shareholders
towards the end of September 2009.
COMMENTARY
The principal operating subsidiary Rex Trueform Clothing Company Limited
reports as follows:
"Revenue grew by a modest 8,0% to R502,8 million in a difficult trading
environment. This improvement was not, however, carried through to bottom-line
profit.
As foreseen in the interim report the second half-year to June 2009 presented a
challenge as the downturn in consumer demand took greater effect. This resulted
in a second half performance which moderated the results for the full year.
Earnings benefited last year from a low effective rate of tax of 15,2% which is
not applicable this year.
Headline earnings per share declined by 33,4% to 124,1 cents per share. Earnings
per share have declined by 33,9% to 125,8 cents per share.
Retail
Queenspark achieved an increase in turnover of 12,2% to R466,2 million.
The pleasing performance of the first half of the year was not repeated during
the second half where the turnover improvement moderated to 6,2% on the previous
year, reflecting a deteriorating retail climate.
Performance for the year was impaired by a provision of R5,6 million, being an
unrealised foreign exchange loss resulting from a revaluation of forward
exchange contracts on hand at 30 June 2009.
High increases in the cost of both locally produced and imported clothing
brought gross margins under pressure.
Performance was further tempered by increased occupancy costs, resulting from
the addition of new stores, high rental escalations, increases in municipal
rates and the increased cost of electricity.
All of the above factors contributed to a decrease of 12,5% in operating
profit. As a result the operating profit return on turnover was 6,9% compared
to 8,8% achieved last year.
Manufacturing
Clothing manufacturing activities at the Atlantis plant continued to encounter
absenteeism problems and low levels of productivity. In addition a major
customer cut back on orders as a consequence of the downturn in consumer demand.
Following a profitable period in 2008 this segment incurred a loss of
R2,1 million in 2009. It is likely that a further loss will be incurred in the
2010 financial year.
Prospects
Four new stores were opened during the year. A further four stores will open
before December 2009.
Although turnover for the first two months of the new financial year is
marginally improved on last year it is too early to gauge how the summer season
will develop.
Depressed retail conditions are expected to continue, however, for at least the
remainder of 2009 calendar year, and the achievement of sales targets will
remain challenging.
Earnings benefited materially from the Duty Credit Certificate Scheme operated
by the International Trade Administration Commission of South Africa. The long
term sustainability of these benefits is uncertain."
Dividend
The board is recommending to shareholders that the dividend on the ordinary and
`N` ordinary shares be maintained at 25 cents per share.
In terms of the Articles of Association, the 6% cumulative participating
preference shares carry the right to receive an additional 0,5% dividend for
every completed 1,25% dividend in excess of 2,5% declared on ordinary shares in
any one financial year. Preference shareholders will therefore be entitled to an
extra dividend of 19% (38 cents per share) which will be included in the half-
yearly payment in December 2009.
Shareholders will be asked to consider, and if deemed fit, approve the
directors` dividend recommendation at the annual general meeting of the company
to be held on 11 November 2009.
An announcement detailing the terms of the dividend declaration will be made
immediately following the annual general meeting.
Signed on behalf of the board
ML Krawitz PE Shub
(Chairman) (Chief Executive Officer)
Cape Town
3 September 2009
AFRICAN & OVERSEAS ENTERPRISES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1947/027461/06)
Share codes: AOO - AON - AOVP
ISIN: ZAE000000485 - ZAE000009718 - ZAE000000493
Directors: ML Krawitz (Chairman) , PE Shub (Chief Executive Officer)
(alt ML Krawitz), CEA Radowsky, JC O`Brien, PM Naylor, RV Orlin, DS Johnson
Secretary: AA Hodgkinson
Transfer Secretaries
Computershare Investor Services (Pty) Ltd, 70 Marshall Street, Johannesburg 2001
Registered office
Rex Buildings, 263 Victoria Road, Salt River, Cape Town 7925
Sponsor
Java Capital (Pty) Ltd
Websites
www.queenspark.com
www.rextrueform.com
Date: 03/09/2009 17:14:34 Produced by the JSE SENS Department.
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