| Thu 8 Sep 2011, 8:02 | | AOO /AON/AOVP - African & Overseas Enterprises Limited - Reviewed results for |
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AOO AOVP AON
AOO
AOO /AON/AOVP - African & Overseas Enterprises Limited - Reviewed results for
the year ended 30 June 2011
African & Overseas Enterprises Limited
(Incorporated in the Republic of South Africa - Reg No. 1947/027461/06)
Share codes: AOO - AON - AOVP
ISIN: ZAE000000485 - ZAE000009718 - ZAE000000493
REVIEWED RESULTS FOR THE YEAR ENDED 30 JUNE 2011
HIGHLIGHTS:
- REVENUE FROM CONTINUING OPERATIONS UP 10.1%
- OPERATING PROFIT FROM CONTINUING OPERATIONS UP 15.9%
- HEADLINE EARNINGS PER SHARE FROM CONTINUING OPERATIONS UP 14.9%
STATEMENT OF COMPREHENSIVE INCOME
Consolidated (R`000)
2011 2010
(Reviewed) (Audited)
Continuing operations
Revenue 518 506 470 839
Turnover 508 078 460 939
Cost of sales (221 987) (200 760)
Gross profit 286 091 260 179
Employment costs (91 982) (83 322)
Occupancy costs (70 729) (64 637)
Depreciation and amortisation (15 595) (13 636)
Other operating costs (66 306) (62 516)
Rental income 605 128
Royalties 1 009 995
Operating profit 43 093 37 191
Dividends received 12 16
Interest received 8 802 8 761
Interest paid (367) (359)
Profit before tax 51 540 45 609
Income tax expense (16 117) (15 223)
Profit for the year from continuing operations 35 423 30 386
Profit/(loss) from discontinued operation (net of
income tax) 3 135 (1 073)
Profit for the year 38 558 29 313
Other comprehensive income
Net change in fair value for available-for-sale
financial assets - (146)
Total comprehensive income for the year 38 558 29 167
Profit attributable to:
Ordinary and `N` ordinary shareholders of the parent 20 562 15 613
Preference shareholders 148 138
Profit attributable to equity holders of the parent 20 710 15 751
Non-controlling interest 17 848 13 562
Profit for the year 38 558 29 313
Total comprehensive income attributable to:
Ordinary and `N` ordinary shareholders of the parent 20 562 15 532
Preference shareholders 148 138
Profit attributable to equity holders of the parent 20 710 15 670
Non-controlling interest 17 848 13 497
Total comprehensive income for the year 38 558 29 167
Reconciliation of headline earnings
Profit/(loss) attributable to equity holders 20 562 15 613
Continuing operations 18 828 16 210
Discontinued operation 1 734 (597)
Adjusted for:
Loss on disposal of plant and equipment 372 510
Profit on sale of discontinued operation (68) -
Headline earnings/(loss) 20 866 16 123
Continuing operations 19 200 16 720
Discontinued operations 1 666 (597)
Basic earnings per ordinary share (cents) 180.6 137.1
Continuing operations 165.3 142.4
Discontinued operation 15.3 (5.3)
Headline earnings per ordinary share (cents) 183.2 141.6
Continuing operations 168.6 146.8
Discontinued operation 14.6 (5.2)
Dividend cover (based on headline earnings) 6.1 5.1
Weighted average number of equity shares on which earnings per
share is based (000`s) 11 387 11 387
STATEMENT OF FINANCIAL POSITION
Consolidated (R`000)
2011 2010
(Reviewed) (Audited)
ASSETS
Non-current assets 80 584 67 847
Property, plant and equipment 69 328 57 394
Investment property 5 776 3 511
Intangible assets 1 455 2 107
Other investments 576 576
Deferred taxation 3 449 4 259
Current assets 243 580 222 447
Inventories 71 099 57 994
Trade and other receivables 21 562 21 026
Forward exchange contracts - 522
Income tax receivable 2 050 1 248
Cash and cash equivalents 148 869 141 657
Total assets 324 164 290 294
EQUITY AND LIABILITIES
Capital and reserves 266 942 234 874
Share capital 1 200 1 200
Share premium 6 076 6 076
Other reserves 538 500
Retained earnings 139 194 122 299
Non-controlling interest 119 934 104 799
Non-current liabilities 13 573 13 263
Post-retirement liability 3 996 4 122
Accrued operating lease liability 9 577 9 141
Current liabilities 43 649 42 157
Provisions 467 560
Trade and other payables 42 461 40 976
Forward exchange contracts 602 -
Income tax payable 119 621
Total equity and liabilities 324 164 290 294
ABRIDGED STATEMENT OF CASH FLOW Consolidated (R`000)
2011 2010
(Reviewed) (Audited)
Operating profit before working capital changes 65 200 52 149
Working capital changes (11 528) 11 316
Interest received 8 802 8 761
Interest paid (367) (359)
Dividends paid (7 001) (6 162)
Dividends received 12 16
Taxation paid (17 830) (13 332)
Net cash inflow from operating activities 37 288 52 389
Additions to property, plant and equipment (31 191) (25 166)
Proceeds on disposal of property, plant and equipment 672 175
Net cash outflows from investing activities (30 519) (24 991)
Proceeds on delivery of shares by share trust 454 -
Subsidiary shares repurchased (11) -
Net cash inflow from financing activities 443 -
Net increase in cash and cash equivalents 7 212 27 398
Cash and cash equivalents at the beginning of the year 141 657 114 259
Cash and cash equivalents at the end of the year 148 869 141 657
OTHER INFORMATION
Capital commitments
Authorised - not contracted for 53 436 16 998
Gross profit margin from continuing operations 56.3% 56.4%
Operating profit margin from continuing operations 8.5% 8.1%
Retail segment operating profit margin 9.2% 9.4%
STATEMENT OF CHANGES IN EQUITY
Consolidated (R`000)
2011 2010
(Reviewed) (Audited)
Share capital 1 200 1 200
Share premium 6 076 6 076
Other reserves
Opening balance 500 530
Share-based payments 38 51
Fair value adjustment for available-for-sale
financial assets - (81)
Closing balance 538 500
Retained earnings
Opening balance 122 299 109 533
Profit for the year 20 710 15 751
Dividends paid (3 337) (2 985)
Subsidiary shares repurchased (6) -
Net effect of take up of share options 251 -
Change in degree of control (723) -
Closing balance 139 194 122 299
Non-controlling interest
Opening balance 104 799 94 438
Profit for the year 17 848 13 562
Dividends paid (3 664) (3 177)
Subsidiary shares repurchased (5) -
Net effect of take up of share options 203 -
Change in degree of control 723 -
Other 30 (24)
Closing balance 119 934 104 799
Total capital and reserves 266 942 234 874
SEGMENTAL REPORTING Consolidated (R`000)
2011 2010
(Reviewed) (Audited)
Revenue
Total external retail revenue 509 087 461 934
Retail segment revenue 511 307 464 032
Intersegment revenue earned from continuing operations (1 548) (1 446)
Intersegment revenue earned from discontinued operations (672) (652)
Total external property revenue 605 128
Property segment revenue 4 758 1 973
Intersegment revenue earned from continuing operations (3 635) (1 365)
Intersegment revenue earned from discontinued operations (518) (480)
Dividends received 12 16
Interest received 8 802 8 761
Segment revenue from continuing operations 518 506 470 839
Total external manufacturing revenue 34 990 19 911
Manufacturing segment revenue 35 067 21 170
Less: intersegment revenue (77) (1 259)
Segment revenue from discontinued operation 34 990 19 911
Total revenue 553 496 490 750
Segment operating profit/(loss)
Retail segment profit 46 906 43 678
Property segment profit/(loss) 1 331 (681)
Group services operating loss* (5 144) (5 806)
Group profit from continuing operations 43 093 37 191
Manufacturing operating profit/(loss) - discontinued
operation 4 354 (1 490)
Total group operating profit 47 447 35 701
Depreciation and amortisation
Retail 15 417 13 518
Property 179 118
Segment depreciation and amortisation from
continuing operations 15 596 13 636
Manufacturing - discontinued operation 259 358
Total depreciation and amortisation 15 855 13 994
Segment assets
Retail 200 355 171 860
Property 10 571 9 236
Group services* 101 866 95 618
Segment assets from continuing operations 312 792 276 714
Manufacturing - discontinued operation 11 372 13 580
Total segment assets 324 164 290 294
Segment liabilities
Retail 48 239 46 622
Property 751 30
Group services* 5 120 5 132
Segment liabilties from continuing operations 54 110 51 784
Manufacturing - discontinued operation 3 112 3 636
Total segment liabilities 57 222 55 420
Capital expenditure
Retail 30 559 25 159
Property 602 -
Capital expenditure from continuing operations 31 161 25 159
Manufacturing - discontinued operation 30 7
Total capital expenditure 31 191 25 166
* Group services include corporate costs.
NOTES
1 Basis of preparation
These reviewed results have been prepared in terms of the South African
Companies Act (71 of 2008, as amended), IFRS, IAS 34: Interim Financial
Reporting, the JSE Listings Requirements and the AC 500 Standards as issued by
the Accounting Practices Board or its successor. These reviewed results have
been prepared under the supervision of the group financial director, Damian
Johnson (CA(SA)).
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 2010.
3 Reclassification
The group is presenting the sale of its manufacturing division as a discontinued
operation in the current year and where applicable certain comparative
information has been reclassified.
4 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 2011.
Commentary
The principal operating subsidiary Rex Trueform Clothing Company Limited reports
as follows:
"The group continued to perform well despite the unfavourable global and
domestic economic conditions which resulted in a difficult trading environment.
As anticipated in the interim report, turnover growth in the second half of the
financial year slowed down following the high level of performance during the
first six months of the year. Accordingly, and in line with expectations, group
revenue from continuing operations for the year was restricted to an increase of
10.1% over the previous year with an increase in operating profit from
continuing operations of 15.8%. Total group operating profit increased by 32.3%.
The property and manufacturing segments contributed positively and profit was
further supplemented by a marginal increase in interest earned and a slightly
lower effective rate of tax.
Group profit after tax amounted to R39.9 million compared to R30.5 million last
year, an increase of 30.7%.
In line with performance, headline earnings improved by 28.3% to 198.3 cents per
share. Earnings increased by 30.4% to 195.6 cents per share.
Retail
The Queenspark retail segment achieved R508.1 million in turnover, an
improvement of 10.2% on last year.
As a consequence of the reallocation of intersegment rentals, retail operating
profit was restricted to an improvement of 7.4% over the comparative period.
Had the reallocation not taken place the retail segment operating profit would
have improved by 10.8%.
Manufacturing
The manufacturing segment posted a positive return for the year. This followed
losses in the previous years where interventions were required to downsize the
business as a consequence of a decrease in orders from the major customer.
The group disposed of the manufacturing facility on 30 June 2011 in line with
group strategy.
Prospects
It is likely that the South African economy will be faced with slower growth and
higher inflation during the remainder of the current year. This scenario will
result in extended low levels of confidence in consumers as they continue to
feel the effects of a depressed economy.
The group benefited in the 2011 and prior financial years from the Duty Credit
Certificate Scheme. This benefit ceased during the course of last year and as a
result there will be a materially negative impact on operating profit in the
2012 financial year.
Although Queenspark is presently experiencing a reasonable level of acceptance
of its current ranges in stores, we anticipate the achievement of turnover and
profit targets will remain challenging."
Dividend
The board is recommending to shareholders that the dividend on the ordinary and
`N` ordinary shares be increased to 32 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 24.5% (49 cents per share) which will be included in the half-
yearly payment in December 2011.
Shareholders will be asked to consider and approve the directors` dividend
recommendation at the annual general meeting of the company to be held on 16
November 2011.
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
8 September 2011
Directors: ML Krawitz+ (Chairman), PE Shub (Chief Executive Officer)
(alt ML Krawitz), CEA Radowsky, DS Johnson, PM Naylor*, RV Orlin* and
RW Rees(UK)*
+Non-executive * Independent non-executive
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
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