| Wed 24 Feb 2010, 17:15 | | SPG - Super Group - Unaudited Results For The Six Month Period Ended 31 December |
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SPG
SPG
SPG - Super Group - Unaudited Results For The Six Month Period Ended 31 December
2009
Super Group Limited
Incorporated in the Republic of South Africa
Registration number 1943/016107/06
ISIN number: ZAE000011334 Share code: SPG
("Super Group" or "the Group")
UNAUDITED RESULTS FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2009
Rights issue successfully completed and debt restructured
Significantly improved capital structure
Profitability from core businesses
Operating profit of R248 million
Trade gearing down from 120% (30 June 2009) to 12%
HEPS from continuing operations 6,5 cents
Cash generated from operations R446 million
Consolidated interim statement of financial position
31 December 31 December 30 June
2009 2008 2009
R`000 Unaudited Unaudited Audited
ASSETS
Property, plant and 1 250 202 925 383 1 242 208
equipment
Full maintenance lease 1 455 313 1 925 335 1 693 351
assets
Intangible assets 119 863 216 948 125 130
Goodwill 1 333 311 1 444 478 1 286 038
Investments in associates - 87 385 42 719
Investments and other non- 26 366 275 064 44 776
current assets
Deferred tax assets 239 494 186 465 229 776
Current assets 4 141 755 5 218 473 4 163 927
Assets held for sale 1 814 863 999 150 2 285 339
Inventories 424 958 1 010 042 389 950
Trade and other 1 126 364 2 085 164 1 304 498
receivables
Insurance related assets - 426 255 -
Cash and cash equivalents 775 570 697 862 184 140
Total assets 8 566 304 10 279 531 8 827 925
EQUITY AND LIABILITIES
Capital and reserves
Capital and reserves 2 200 043 2 086 289 994 047
attributable to equity
holders of Super Group
Limited
Non-controlling interests 178 304 237 776 194 196
Total equity 2 378 347 2 324 065 1 188 243
Liabilities
Fund reserves 226 098 310 575 268 939
Deferred tax liabilities 188 349 199 844 188 143
Full maintenance lease 1 182 918 1 586 845 1 433 261
borrowings (including
Australia)
Non-current 838 940 1 022 176 893 725
Current 343 978 564 669 539 536
Interest-bearing 1 511 452 1 694 031 1 960 744
borrowings
Non-current 1 389 932 1 198 595 1 523 365
Current 121 520 495 436 437 379
Liabilities directly 1 577 848 766 875 1 942 184
associated with assets
held for sale
Other current liabilities 1 501 292 3 397 296 1 846 411
Total equity and 8 566 304 10 279 531 8 827 925
liabilities
Consolidated interim statement of comprehensive income
6 month 6 month
period period Year
ended ended ended
31 December 31 December 30 June
2009 2008 2009
R`000 Unaudited Restated Restated
Revenue 3 463 011 3 752 510 7 138 572
Trading profit before 529 443 562 511 1 160 016
depreciation and
amortisation
Depreciation and (283 866) (214 195) (555 340)
amortisation
Trading profit 245 577 348 316 604 676
Capital items 2 233 (1 744) (63 424)
Operating profit 247 810 346 572 541 252
Net finance charges (154 053) (308 819) (431 074)
Profit before taxation 93 757 37 753 110 178
Income tax (15 219) 25 283 1 490
(expense)/income
Profit for the period 78 538 63 036 111 668
from continuing
operations
Total loss for the (47 366) (413 478) (1 452 339)
period from discontinued
operations
Loss for the period from (53 562) (119 748) (943 848)
discontinued, operations
Fair value profit/(loss) 6 196 (293 730) (508 491)
on discontinuation
Profit/(loss) for the 31 172 (350 442) (1 340 671)
period
Other comprehensive
income
Effect of foreign 36 589 (92 964) (175 687)
exchange
Revaluation of land and - - 4 677
buildings
Hedge accounting 823 3 957 (19 641)
Other comprehensive 37 412 (89 007) (190 651)
income/(expense) for the
period(net of taxation)
Total comprehensive 68 584 (439 449) (1 531 322)
income/(expense) for the
period
Profit/(loss) for the
period attributable to:
Non-controlling 7 437 8 905 15 050
interests - continuing
Non-controlling (2 113) 2 072 (2 743)
interests - discontinued
Equity holders of Super 71 101 54 131 96 618
Group Limited -
continuing
Equity holders of Super (45 253) (415 550) (1 449 596)
Group Limited -
discontinued
31 172 (350 442) (1 340 671)
RECONCILIATION OF
HEADLINE EARNINGS
Profit/(loss) 25 848 (361 419) (1 352 978)
attributable to equity
holders of Super Group
Limited
Capital items (2 233) 1 744 63 424
(continuing operations)
Profit on sale of (2 233) (6 342) (4 956)
property
Impairment of - - 1 630
investments
Impairment of goodwill - - 6 498
Loss on sale of - - 4 499
businesses
Impairment of intangible - - 46 521
assets excluding
goodwill
Impairment of property, - 8 086 9 232
plant and equipment
Fair value (profit)/loss (6 196) 293 730 508 491
on discontinuation
Headline profit/(loss) 17 419 (65 945) (781 063)
for the period
Loss from discontinued 53 562 119 748 943 848
operations
(Loss)/profit (2 113) 2 072 (2 743)
attributable to non-
controlling interests -
discontinued
Headline earnings for 68 868 55 875 160 042
the period - continuing
operations
cents cents cents
Basic earnings/(loss) 2,4 (86,7) (296,1)
per share
Basic earnings per share 6,7 13,0 21,1
(continuing operations)
Diluted earnings/(loss) 2,4 (86,7) (296,1)
per share
Diluted earnings per 6,7 13,0 21,1
share (continuing
operations)
Headline earnings/(loss) 1,6 (15,8) (170,9)
per share
Headline earnings per 6,5 13,4 35,0
share (continuing
operations)
Diluted headline 1,6 (15,8) (170,9)
earnings/(loss) per
share
Diluted headline 6,5 13,4 35,0
earnings per share
(continuing operations)
Consolidated interim statement of changes in equity
6 month 6 month
period period Year
ended ended ended
31 December 31 December 30 June
2009 2008 2009
R`000 Unaudited Unaudited Audited
Capital and reserves
attributable to equity
holders of
Super Group Limited
Balance at beginning of 994 047 2 007 161 2 007 161
period
Share issues and options 1 153 437 506 635 503 642
exercised, net of
expenses
Total comprehensive
income for the period
attributable to equity
holders
of Super Group Limited 58 809 (430 507) (1 519 736)
Profit/(loss) for the 25 848 (361 419) (1 352 978)
period
Effect of foreign 32 138 (73 045) (151 794)
exchange
Revaluation of land and - - 4 677
buildings
Hedge accounting 823 3 957 (19 641)
Share-based payment 2 154 3 000 -
Effect of business (8 404) - 2 980
combinations on equity
holders of Super Group
Limited
Balance at end of period 2 200 043 2 086 289 994 047
Non-controlling interests
Balance at beginning of 194 196 257 777 257 777
period
Ordinary dividends paid - - (188)
to non-controlling
interests
Total comprehensive 9 775 (8 942) (11 586)
income for the period
attributable to non-
controlling interests
Profit for the period 5 324 10 977 12 307
Effect of foreign 4 451 (19 919) (23 893)
exchange
Increase in other - - 1 102
reserves
Changes in non- (25 667) (11 059) (52 909)
controlling interests as
a result of acquisitions
and disposals
Balance at end of period 178 304 237 776 194 196
Total equity at end of 2 378 347 2 324 065 1 188 243
period
Comprising:
Share capital 327 310 54 551 54 551
Share premium 1 891 964 1 010 610 1 002 131
Capital redemption 5 486 - 5 486
reserve fund
Retained earnings 138 087 1 091 276 118 490
Share buyback reserve (546 772) (537 617) (537 617)
General reserve 556 036 556 036 556 036
Revaluation reserve 76 926 89 451 76 926
Foreign currency (260 295) (213 684) (292 433)
translation reserve
Contingency reserve - 30 118 31 709 30 118
insurance
Hedging Reserve (18 818) 3 957 (19 641)
Non-controlling interests 178 304 237 776 194 196
Total equity at end of 2 378 346 2 324 065 1 188 243
period
Salient features
6 month 6 month
period period Year
ended ended ended
31 December 31 30 June
December
2009 2008 2009
R`000 Unaudited Unaudited Audited
1 Interest-bearing borrowings
comprise:
Australia ring-fenced 432 059 455 618 434 334
borrowings
Corporate Bond - 415 069 411 997
Securitisation 255 870 259 041 258 033
Property borrowings 364 690 431 553 425 312
Term loans 374 639 - -
Other borrowings 233 798 361 199 333 153
Bank overdraft - 262 985 317 866
Interest-bearing borrowings 1 661 056 2 185 465 2 180 695
and bank overdraft before
reallocation to held for sale
Other interest-bearing (149 604) (491 434) (219 951)
borrowings directly
associated with assets held
for sale
Interest-bearing borrowings 1 511 452 1 694 031 1 960 744
2 Share statistics
Total issued less treasury 3 200 530 497 950 497 950
shares (`000)
Weighted (`000) 1 059 141 416 723 457 002
Diluted (`000) 1 062 142 416 723 457 002
Net asset value per share 68,7 419,0 199,6
(cents)
Net asset value excluding 27,1 128,9 (58,6)
goodwill per share (cents)
3 Capital commitments 29 820 24 480 13 960
Authorised but not yet contracted for capital commitments,
excluding full maintenance lease assets.
Capital commitments will be funded from normal operating cash
flows and the utilisation of existing borrowings facilities.
4 Related party transactions
The group, in the ordinary course of business, entered into
various sales and purchase transactions on an arms length basis
with the related parties.
5 Subsequent events
Other than the matters disclosed, the directors are not aware of
any material matter or circumstance arising subsequent to the
balance sheet date up to the date of this report.
Condensed interim statement of cash flow
6 month 6 month
period period Year
ended ended ended
31 December 31 December 30 June
2009 2008 2009
R`000 Unaudited Unaudited Audited
Cash flows from operating
activities
Operating cash flow before 446 067 460 749 1 053 865
working capital changes
Working capital changes (207 332) 262 463 100 614
Cash generated from 238 735 723 212 1 154 479
operations
Net finance charges paid (177 979) (360 437) (585 201)
Net dividend paid - - (188)
Taxation paid (20 496) (42 738) (95 874)
Net cash retained from 40 260 320 037 473 216
operations
Cash flows from investing
activities
Cash effect of business 114 600 (45 541) (89 542)
combinations, net of cash
received
Additions to property
plant and equipment and
intangible assets
- net of disposals (13 233) (57 963) (247 284)
Net disposal/(addition) to 46 076 (122 183) (127 873)
full maintenance lease
assets
Decrease/(increase) in 10 982 (16 262) 164 610
other investments and
loans
Net cash inflow/(outflow) 158 425 (241 949) (300 089)
from investing activities
Cash flows from financing
activities
Net proceeds on share 1 162 592 506 989 503 642
purchases, share issues
and options exercised
Interest bearing 397 631 97 924 198 242
borrowings raised
Interest bearing (647 503) (272 862) (465 568)
borrowings repaid
Full maintenance lease 143 141 183 691 278 671
borrowings raised
Full maintenance lease (406 801) (356 296) (566 822)
borrowings repaid
Net cash inflow/(outflow) 649 060 159 446 (51 835)
from financing activities
Net increase in net cash 847 745 237 534 121 292
and cash equivalents
Cash and cash equivalents 321 350 224 797 224 797
at beginning of the period
Effect of foreign exchange 5 869 (10 139) (24 739)
on net cash and cash
equivalents
Net cash and cash 1 174 964 452 192 321 350
equivalents at end of the
period
Segmental analysis
REVENUE
6 month 6 month Year
period ended period ended ended
31 December 31 December 30 June
2009 2008 2009
R`000 Unaudited Restated Restated
Supply Chain 1 290 973 1 476 795 2 753 531
Fleet Solutions 856 816 875 033 1 742 629
Automotive - Dealership 1 307 774 1 399 948 2 628 818
Services 7 448 734 13 594
Continuing operations 3 463 011 3 752 510 7 138 572
Automotive 410 293 523 088 871 953
Retail Supply Chain 969 106 1 278 456 2 568 846
Services 244 806 410 516 695 478
Discontinued operations 1 624 205 2 212 060 4 136 277
Group 5 087 216 5 964 570 11 274 849
Segmental analysis (continued)
TRADING PROFIT
6 month 6 month Year
period ended period ended ended
31 December 31 December 30 June
2009 2008 2009
R`000 Unaudited Restated Restated
Supply Chain 110 532 188 215 313 383
Fleet Solutions 135 872 150 321 300 522
Automotive - Dealership 19 169 3 535 4 466
Services (19 996) 6 245 (13 695)
Continuing operations 245 577 348 316 604 676
Automotive (8 035) (60 085) (456 518)
Retail Supply Chain 18 005 50 998 (219 551)
Services (19 312) 12 025 (98 350)
Discontinued operations (9 342) 2 938 (774 419)
Group 236 235 351 254 (169 743)
Segmental analysis (continued)
OPERATING PROFIT
6 month 6 month Year
period ended period ended ended
31 December 31 December 30 June
2009 2008 2009
R`000 Unaudited Restated Restated
Supply Chain 110 532 188 215 277 136
Fleet Solutions 135 872 150 321 282 768
Automotive - Dealership 19 169 ( 3 166) (9 913)
Services (17 763) 11 202 (8 739)
Continuing operations 247 810 346 572 541 252
Automotive (6 257) (353 815) (601 298)
Retail Supply Chain 28 419 50 198 (510 565)
Services (25 308) 12 025 (171 047)
Discontinued operations (3 146) (291 592) (1 282
910)
Group 244 664 54 980 (741 658)
Overview
Despite tough economic and trading conditions that prevailed during the six
months ended 31 December 2009, the Group is pleased to announce that the
financial restructuring of the Group has been substantially completed and the
rights issue successfully concluded. These were the Group`s main focus areas
during the period and the Group is confident that the restructured and
recapitalised Super Group is in a stronger position to capitalise on
opportunities presented in the leasing and supply chain markets.
During July 2009 the Group signed a debt restructuring agreement with its
lenders whereby the Group`s secured facilities, in place at 19 December 2008,
were renewed for a period of three years. On 22 November 2009, with the support
of the Group`s shareholders, the rights offer was concluded with subscription
proceeds received being in excess of R1.2 billion, a 22.7% over subscription in
relation to the expected proceeds of R1.0 billion. An amount of R1.0 billion was
utilised to partly settle the Group`s short term banking facilities and the
remainder was retained to fund the future working capital requirements of the
Group. The excess subscription of R0.2 billion was applied to pro-rata settle
existing secured and unsecured facilities of the underwriting lenders.
The Group has made progress on disposing of the discontinued businesses. During
the period the Group concluded the sale of Herman`s Truck Accident Repairs
(Hermans), the Mica business (including the Mica brand), various Mica corporate
stores, the Powerstar business and the Group`s minority interest in Emerald Risk
Transfer (Proprietary) Limited (an associate of Emerald Insurance Company
(Proprietary) Limited (Emerald)).
Financial results
The depressed global economic conditions continued to impact the industry
sectors in which Super Group operates and lower sales volumes across all the
divisions affected the results. Notwithstanding this position, the Group was
able to generate revenue of R3.5 billion (31 December 2008: R3.8 billion).
Operating profit from continuing operations for the period decreased by 28.5% to
R247.8 million from R346.6 million in the previous financial period. This was
mainly as a result of significantly lower earnings from the African Logistics
and the offshore procurement businesses as well as lower revenue and increased
depreciation in FleetAfrica.
The loss from discontinued businesses is mainly as a result of more frequent and
significant claims and higher reinsurance costs in the offshore insurance
business and continued trading losses in the remaining Mica and SGIP businesses
partially offset by a profit in AutoZone. The curtailment of these loss-making
operations has been prioritised to avoid future additional losses.
The net finance charge of R154 million was impacted by the delay in the rights
issue, brought about by the consideration of an alternative recapitalisation
proposal, to the amount of approximately R32 million. Despite the delay in the
rights issue, net finance costs were lower than the prior period due to lower
prime borrowing rates, a R48.8 million fair value charge to interest rate swaps
in the prior period and the steady repayment of borrowings (in particular FML
borrowings) over the period.
The increase in the effective tax rate is attributable to the higher earnings in
tax paying entities and the inability to raise further deferred tax assets in
certain discontinued entities.
An overall profit for the period of R31.2 million was achieved compared to the
loss of R350.4 million in the prior comparable period. Earnings from continuing
operations attributable to shareholders increased by 31% to R71.1 million from
R54.1 million and headline earnings from continuing operations increased by
23.5% from R55.8 million to R68.9 million. Continuing earnings per share and
headline earnings per share decreased by 48% to 6.7 cents and by 51% to 6.5
cents, respectively, compared to the prior period due to the increase in the
weighted average number of shares in issue. This reflects the issuance of an
additional 2.7 billion shares on the completion of the rights issue.
The Group`s total net debt has reduced from R3.0 billion (30 June 2009) to R1.7
billion at 31 December 2009. Super Group`s net trading debt was R280 million at
31 December 2009 (30 June 2009: R1.3 billion), which equates to a trade gearing
ratio of 12% compared to 120% at 30 June 2009, after excluding the full
maintenance leasing and Australian non-recourse borrowings.
Cash generated from operations for the period decreased by 3.2% to R446 million,
underpinning the operating profit and cash generating ability of the Group. The
investment in working capital funded the seasonal growth in inventory in the
Convenience Supply Chain business and AutoZone. Lower import volumes in the
freight forwarding business, the expected pay down of the fund reserves in
FleetAfrica and payment of claims in Emerald have resulted in a significant
reduction in trade payables by R202 million. The operations and wind-down of the
discontinued businesses has had a R125 million adverse impact on working
capital. The disposal of the discontinued businesses generated R114.6 million
cash of which most will be applied in settling borrowings. The Group has
embarked on a cash preservation programme which has resulted in significantly
decreased capital expenditure through the prevailing recessionary cycle whilst
still maintaining the integrity of the underlying assets. The non-supply of
additional vehicles into the Eastern Cape Provincial Government ("ECPG") Full
Maintenance Lease (" FML") contract at near-termination of the contract resulted
in net proceeds from the sale of FML assets. Cash and cash equivalents
increased by 265.6% from R321 million at 30 June 2009 to R1.2 billion at 31
December 2009. The Group has R249 million of cash in the Emerald business which
is statutorily restricted and R245 million in the Australian business.
Super Group`s deleveraged balance sheet and strong operational cash flows
continue to serve the Group well in weathering the economic environment,
repaying maturing debt and in funding the core businesses in tough credit
markets. The economic recession created opportunities for Super Group to examine
all continuing operations. Cost reductions and working capital efficiencies have
paid off and in return positively impacted the Group`s cash position. This,
together with the Group`s focus on efficiency and operational improvements, is
enhancing the Group`s competitiveness. The growth strategy remains unchanged
and, despite the economic crisis, Super Group has opportunities which will
provide for sustainable long-term growth.
Divisional overview of continuing operations
Supply Chain >> When compared to the prior period, Supply Chain delivered
disappointing results. This is largely attributable to lower earnings from
African Logistics, the freight forwarding and the offshore procurement
businesses. Revenue decreased by 12.6% from R1.5 billion to R1.3 billion as a
result of the non-renewal of certain low margin supply chain contracts in the
prior period, lower import volumes whilst the softening in commodity prices and
prevailing economic environment resulted in significantly decreased activity and
a high incidence of empty back loads in the African Logistics` cross border
business. Despite a satisfactory performance from the South Africa Supply Chain
business, the overall operating profit declined by 41.3% from R189 million to
R111 million.
Against the backdrop of substantial reductions in trading volumes in line with
the depressed performance of the automotive, mining and manufacturing sectors,
the overall South African Supply Chain business has produced reasonable results.
However, the core locally based supply chain businesses performed satisfactorily
and managed to retain prior period profitability levels in a competitive and
depressed market. The Convenience Supply Chain business showed improved results
and should benefit going forward from the economies of scale being achieved
through strategic supplier and customer relationships. As a result of the
disposal of the discontinued businesses, the International business, responsible
for offshore procurement for the Group, experienced a marked decline in volume
and trading activity.
The African Logistics business reported disappointing results when compared to
the prior period, during which mining and aid programme volumes and rates were
at peak levels. Despite the recent recovery in commodity prices, the business is
still experiencing low southbound commodity movements and high incidences of
empty northbound loads. The decline in aid programmes experienced in the prior
six months has persisted. Nevertheless, the business is well placed to benefit
from any recovery in the region.
Fleet Solutions >> The Fleet Solutions division reported revenue and operating
profit declines of 2% and 9.6%, respectively. This is mainly attributable to the
application of conservative residual value management policies.
FleetAfrica performed in line with expectations. Revenue decreased by 5% whilst
operating profit declined by 22% compared to the prior period mainly on the back
of a significantly lower interest rate environment and as a result of increased
maintenance, depreciation and restructuring charges incurred on the extension of
the ECPG FML contract. FleetAfrica is consulting with the ECPG to ensure
replacement of essential vehicles over the short term and the optimisation of
service levels. Operational performance on the City of Johannesburg contract is
pleasing with 98% uptime. FleetAfrica has concluded a memorandum of
understanding with a joint venture funding partner to establish a market
accepted solution venture that should underpin future governmental FML growth
without onerous funding challenges.
The sgFleet business in Australia delivered a pleasing performance. Revenue and
operating profit increased 2% and 14% respectively compared to the prior period.
The business made progress in gaining market share with several client wins.
Demand for operating leases continues to be strong although the novated leasing
market remains subdued given consumer market uncertainty. The successful
extension of credit to customers by funders remains challenging in securing new
business. The Australian used vehicle market has improved with better than
expected realisations being attained. During the period the Group acquired 2,3%
additional equity in sgFleet from a minority shareholder for AUD 3250 000 and
the business remains core to the Group.
Dealerships >> Dealerships experienced a 7% decline in revenue compared to the
prior period. Despite the Dealerships sales volumes in the six months being
ahead of the general market trend, like-for-like new vehicle sales were 11.4%
down on the prior period. The decline in unit sales did not have an equivalent
impact on the operating profit result. The operating result increased from a
loss of R3.2 million to a profit of R19.2 million benefiting from the closure of
non-performing dealerships in the prior period with notable contributions from
the used vehicle, parts and finance departments. Ongoing expense control,
specifically relating to advertising, demonstration vehicles and occupancy costs
have yielded positive results although partially offset by inflationary
increases in employee costs. Demand for used vehicles is expected to remain
strong, albeit in the face of poor stock availability. The business was able to
generate cash through positive earnings and working capital efficiencies.
Corporate Services
The Corporate Services segment incurred a R17.8 million operating loss largely
due to the inability to recover management fees from discontinued businesses,
restructuring costs, share-based payment expenses and the disposal of certain
non-core properties under sale and lease back arrangements. Previously, the
Group incurred interest charges on financing these properties which have now
been replaced by rental charges included in operating profit.
Divisional overview of discontinued operations
Automotive >> Super Group Industrial Products (SGIP) - The heavy commercial
vehicle market has been severely depressed for the period under review. During
the period the Group disposed of its Powerstar inventory and settled the related
trade finance liability of R141 million. The business has successfully managed
the remaining overhead structure with priority being given to the disposal of
the residual non-Powerstar vehicles and machinery to avoid further trading
losses. The establishment of the new commercial vehicle assembly and
distribution entity, in which Super Group retains a 23% equity interest until
June 2010, together with the Chinese OEM is still in progress.
Hermans - The Hermans business has been disposed of with effect from 1 October
2009. Super Group realised a profit of R1.78 million (after utilisation of fair
value provisions raised at 30 June 2009) on disposal of the business.
MMS Cranes - The business is in the process of disposing the remaining used
cranes. The business incurred a R9.88 million trading loss as a result of the
weakening in the Yen effectively allowing customers to purchase new cranes at a
lower cost than the Group`s remaining inventory.
Retail Supply Chain >> AutoZone - The disposal of the AutoZone business is still
in progress and will require shareholder approval. Revenue increased 9% from
R856.7 million to R937.1 million however operating profit decreased 34% from
R51.3 million to R33.7 million. Operating margins have been impacted by
increased competitive activity in the industry, larger than expected stock
losses and increased depreciation charges partially offset by the containment of
operating expenditure.
Mica - During the period the Group successfully concluded the sale of the Mica
business and various Mica Corporate Stores. The remaining exposure to Mica is
limited to two associate stores and the wind-down of the corporate operations.
The associate stores delivered poor results in the face of reduced consumer
spending and high occupancy costs. The recent change in the Mica business model
necessitated that members were required to source their own credit facilities
directly from suppliers. This, coupled with the current economic environment has
resulted in challenges in collecting the residual debtors` book.
Emerald >> Emerald has disposed of its 38% interest in Emerald Risk Transfer
(Proprietary) Limited, its underwriting business, to Santam for R38 million. The
disposal resulted in a R6 million capital loss. The Emerald business performed
in line with expectations but applied a significantly more conservative
reinsurance programme. The Mauritius business ceased writing policies from 1
July 2009 and the local operations experienced significantly lower premiums
resulting in gross written premiums declining from R410.5 million to R244.8
million. The cost of the reinsurance programme and the incidence and severity of
claims that require full provisioning resulted in an operating loss of R25.3
million for the period.
Corporate actions
The remaining discontinued businesses included in `assets held for sale` are
AutoZone, Emerald, Hala Supply Chain Services and residual elements of the
businesses already sold. Negotiations around the sale of AutoZone and Emerald
are ongoing and are expected to be concluded by June 2010.
Outlook
Notwithstanding tough markets and the focus on the implementation of the debt
restructuring agreements and disposal of non-core businesses, the Group
delivered positive results and is satisfied with progress made on the disposal
and exit of non-core operations. With emphasis on growth of the core businesses,
modest signs of economic recovery, improved market sentiment and completion of
the disposals, the Group is well placed to deliver sustainable earnings in the
future.
On behalf of the Board
P Vallet P Mountford
Non-Executive Chairman Chief Executive Officer
Sandton
24 February 2010
Basis of preparation and accounting policies
The condensed consolidated interim financial statements for the six-month period
ended 31 December 2009 have been prepared in compliance with the Listings
Requirements of the JSE Limited, International Financial Reporting Standards
(IFRS) (in particular IAS 34 Interim Financial Reporting) and the South African
Companies Act, 1973, as amended.
The accounting policies applied in the presentation of the condensed
consolidated financial statements are consistent with those applied for the year
ended 30 June 2009 except for the adoption of the amendments to
IAS 1 (Revised) - Presentation of financial statements
IAS 27 (Revised) - Consolidated and separate financial statements
IFRS 2 (Amendment) - Share-based payment
IFRS 8 - Operating segments
IFRS 3 (Revised) - Business combinations
IFRIC 16 - Hedges of a net investment in a foreign operation
The adoption of these revised standards and interpretations have not had a
material impact on the reported results. Consequently, no adjustments relating
to these amendments have been made to previously reported figures.
The condensed consolidated financial statements have been prepared in accordance
with the historic cost convention except for certain financial assets and
liabilities (including derivative instruments), available-for-sale financial
assets and land and buildings which are stated at fair value. The condensed
consolidated financial statements are presented in Rand, which is Super Group`s
functional and presentation currency.
Comparative results have been represented in accordance with IFRS 5 in line with
current classifications of AutoZone, Mica, Super Group Industrial Products, Hala
and Emerald businesses as discontinued operations.
These unaudited results for the six month period ended 31 December 2010 have not
been reviewed or audited by the group`s auditors. This interim report should be
read in conjunction with the annual financial statements for the year ended 30
June 2009.
Registered office: 27 Impala Road, Chislehurston, Sandton, 2196. Private Bag
X9973, Sandton, 2146
Transfer secretaries: Computershare Investor Services (Pty) Limited. Ground
Floor, 70 Marshall Street, Johannesburg, 2001.
PO Box 61051, Marshalltown, 2107
Directors: P. Mountford (CEO), J Jankovich-Besan (CFO), P Vallet* (Chairman), N
Davies*#, J Newbury*#, D Rose*#, V Chitalu*#
*Non-executive #Independent
Group Company Secretary: D de Quintal
Sandton
24 February 2010
Sponsor: Deutsche Securities (SA) (Proprietary) Limited
Date: 24/02/2010 17:15:02 Produced by the JSE SENS Department.
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