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AOO AOVP AON
AOO
AOO/AON/AOVP - African & Overseas Enterprises Limited - Reviewed results for
the year ended 30 June 2010
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 2010
HIGHLIGHTS:
- OPERATING PROFIT UP 36.9%
- HEADLINE EARNINGS UP 26.5%
- STRONG BALANCE SHEET
COMMENTARY
The principal operating subsidiary Rex Trueform Clothing Company Limited
reports as follows:
"The group has produced a robust performance in the adverse economic
conditions which persisted throughout the 2010 financial year.
In the group`s interim report for the half-year to December 2009 it was
anticipated that the depressed retail conditions would continue and that the
achievement of sales and profit targets would remain challenging.
In line with expectations revenue was down 2.4% on last year. The group has
however met the challenge regarding performance, an improvement of 35.6% in
group operating profit having been achieved.
Earnings continued to benefit significantly from the Duty Credit Certificate
Scheme during the past year. The use of duty credit certificates will phase
out during the coming year.
A lower level of interest earned and a slightly higher effective tax rate
diluted the full effect of the operating profit improvement on earnings.
Headline earnings per share improved by 24.5% to 154.5 cents per share.
Earnings per share increased by 19.2% to 150.0 cents per share.
Retail
Queenspark delivered a pleasing performance, particularly in the second six
months during which operating profit improved substantially over the previous
year.
The turnover growth of 0.4% in the first half of the year was followed by a
more difficult second half where turnover decreased by 2.6% on last year.
Turnover was down 1.2% for the full year to June 2010.
There were significant increases in costs due to the addition of new stores,
rental escalations and increased electricity charges.
Operating profit improved by 38.6% over last year to R44.4 million. This was
largely due to improved margins achieved through better product sourcing and
less mark-downs.
The ratio of operating profit to turnover improved to 9.6% compared to 6.9%
achieved last year.
Manufacturing
The manufacturing operation in Atlantis experienced a difficult first six
months of the year during which production levels were reduced to match the
lower demand. This plant produced a much improved performance during the
second half of the year during which it delivered a positive return.
Prospects
Four new retail stores were opened by Queenspark during last year. The full
benefit of these together with store refurbishments and relocations will
reflect in performance in the coming year.
Queenspark`s seasonal ranges currently in stores are receiving a high level of
acceptance. Turnover for the first eight weeks of the new financial year was
more than 13% improved on last year."
Dividend
The board is recommending to shareholders that the dividend on the ordinary
and `N` ordinary shares be increased to 28 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 21.5% (43 cents per share) which will be included in
the half-yearly payment in December 2010.
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 17 November 2010.
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
(Chairman)
PE Shub
(Chief Executive Officer)
Cape Town
7 September 2010
STATEMENT OF COMPREHENSIVE INCOME
Consolidated (R`000)
2010 2009
(Reviewed) (Audited)
Revenue 490 750 502 787
Turnover 480 850 491 023
Cost of sales (221 915) (274 748)
Gross profit 258 935 216 275
Employment costs (83 322) (70 997)
Occupancy costs (62 683) (53 325)
Depreciation and amortisation (13 754) (12 248)
Other operating costs (64 598) (55 155)
Rental income 128 408
Royalties 995 1 118
Operating profit 35 701 26 076
Dividends received 16 23
Finance income 8 761 10 215
Finance expenses (359) (446)
Profit before taxation 44 119 35 868
Income tax expense (14 806) (11 422)
Profit for the period 29 313 24 446
Other comprehensive income
Net change in fair value for
available-for-sale
financial assets (146) -
Total comprehensive income for
the period 29 167 24 446
Profit attributable to:
Ordinary and `N` ordinary
shareholders 15 613 12 936
Preference shareholders 138 138
Equity holders of the parent 15 751 13 074
Non-controlling interest 13 562 11 372
Profit for the period 29 313 24 446
Total comprehensive income
attributable to:
Ordinary and `N` ordinary
shareholders 15 532 12 936
Preference shareholders 138 138
Equity holders of the parent 15 670 13 074
Non-controlling interest 13 497 11 372
Total comprehensive income for
the period 29 167 24 446
Reconciliation of headline earnings
Attributable earnings 15 613 12 936
Loss/(profit) on disposal of plant
and equipment 510 (192)
Headline earnings 16 123 12 744
Headline earnings per share (cents) 141.6 111.9
Earnings per share (cents) 137.1 113.6
Proposed dividend per share (cents) 28.0 25.0
Dividend cover (based on headline
earnings) 5.1 4.5
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
STATEMENT OF FINANCIAL POSITION
Consolidated (R`000)
2010 2009
(Reviewed) (Audited)
Assets
Non-current assets 67 847 60 484
Property, plant and equipment 57 394 47 058
Investment property 3 511 3 511
Intangible assets 2 107 2 720
Investments (unlisted) 576 722
Deferred taxation 4 259 6 473
Current assets 221 826 201 962
Inventories 57 994 68 484
Trade and other receivables 21 026 19 205
Forward exchange contracts 522 -
Income tax receivable 627 14
Cash and cash equivalents 141 657 114 259
Total assets 289 673 262 446
Equity and liabilities
Capital and reserves 234 874 211 777
Share capital 1 200 1 200
Share premium 6 076 6 076
Other reserves 500 530
Retained earnings 122 299 109 533
Non-controlling interest 104 799 94 438
Non-current liabilities 13 263 11 653
Post-retirement liability 4 122 4 122
Accrued operating lease liability 9 141 7 531
Current liabilities 41 536 39 016
Provisions 560 669
Trade and other payables 40 976 32 578
Forward exchange contracts - 5 642
Income tax payable - 127
Total equity and liabilities 289 673 262 446
ABRIDGED STATEMENT OF CASH FLOWS
Consolidated (R`000)
2010 2009
(Reviewed) (Audited)
Cash generated by operations 52 149 45 085
Working capital changes 11 316 (2 720)
Interest received 8 761 10 215
Interest paid (359) (446)
Dividends paid (6 162) (6 162)
Dividends received 16 23
Taxation paid (13 332) (9 716)
Net cash inflow from operations 52 389 36 279
Additions to property, plant and
equipment (25 166) (22 090)
Proceeds on disposal of property,
plant and equipment 175 859
Net cash outflow from investing
activities (24 991) (21 231)
Net increase in cash 27 398 15 048
Cash at the beginning of the
period 114 259 99 211
Cash at the end of the period 141 657 114 259
STATEMENT OF CHANGES IN EQUITY
Consolidated (R`000)
2010 2009
(Reviewed) (Audited)
Share capital 1 200 1 200
Share premium 6 076 6 076
Other reserves
Opening balance 530 2 896
Share-based payments 51 39
Fair value adjustment for
available-for-sale
financial assets (81) -
Transfer reserve - (2 405)
Closing balance 500 530
Retained earnings
Opening balance 109 533 97 039
Profit for the period 15 751 13 074
Reserve transferred - 2 405
Dividends (2 985) (2 985)
Closing balance 122 299 109 533
Non-controlling interest
Opening balance 94 438 86 211
Profit for the period 13 562 11 372
Dividends (3 177) (3 177)
Other (24) 32
Closing balance 104 799 94 438
Total capital and reserves 234 874 211 777
SEGMENTAL REPORTING
Consolidated (R`000)
2010 2009
(Reviewed) (Audited)
Revenue
Retail 461 934 467 318
Manufacturing 19 911 24 823
Manufacturing total 21 170 27 192
Less: intersegment sales (1 259) (2 369)
Property 128 408
Total segment revenue 481 973 492 549
Dividends received 16 23
Finance income 8 761 10 215
Total revenue 490 750 502 787
Segment operating profit/(loss)
Retail 44 409 32 035
Property (202) 507
Manufacturing (2 700) (2 095)
Segment profit 41 507 30 447
Group services + (5 806) (4 371)
Total segment operating profit 35 701 26 076
Segment depreciation included in
operating profit
Retail 13 439 11 759
Manufacturing 555 804
Total segment depreciation 13 994 12 563
Segment assets
Retail 171 239 180 248
Property 9 236 8 725
Manufacturing 13 580 11 348
Group Services 95 618 62 125
Total segment assets 289 673 262 446
Segment liabilities
Retail 46 001 40 638
Property 30 -
Manufacturing 3 636 5 724
Group Services 5 132 4 307
Total segment liabilities 54 799 50 669
Segment capital expenditure
Retail 25 159 22 087
Property - -
Manufacturing 7 3
Total segment capital expenditure 25 166 22 090
+ Group services includes corporate costs.
OTHER INFORMATION
Consolidated (R`000)
2010 2009
(Reviewed) (Audited)
Capital commitments
Authorised - not contracted for 16 998 16 168
Gross profit margin 53.8% 44.0%
Operating profit margin 7.4% 5.3%
Retail segment operating profit
margin 9.6% 6.9%
NOTES
1 Basis of preparation
These reviewed results have been prepared in terms of the South African
Companies Act of 1973 (as amended), IFRS, IAS 34: Interim Financial Reporting
and the JSE Listings Requirements.
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 2009.
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 2010.
Directors: ML Krawitz* (Chairman), PE Shub (Chief Executive Officer)
(alt ML Krawitz), CEA Radowsky, JC O`Brien, PM Naylor*, RV Orlin*, DS Johnson
* non-executive
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
Registered office: Rex Buildings, 263 Victoria Road, Salt River, Cape Town,
7925
Secretary: AA Hodgkinson
Transfer secretaries: Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
Sponsor: Java Capital
Websites:
www.queenspark.com
www.rextrueform.com
Date: 08/09/2010 15:03:02 Produced by the JSE SENS Department.
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