| Tue 27 Sep 2011, 16:00 | | HSP - Holdsport Limited - Unaudited interim condensed consolidated results |
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HSP
HSP
HSP - Holdsport Limited - Unaudited interim condensed consolidated results
for the half-year ended 31 August 2011
HOLDSPORT LIMITED
("Holdsport" or "the company" or "the group")
Registration number: 2006/022252/06
Share code: HSP
ISIN : ZAE000157046
UNAUDITED INTERIM CONDENSED CONSOLIDATED RESULTS
FOR THE HALF-YEAR ENDED 31 AUGUST 2011
SALES UP 7.2% TO R546.9 MILLION
CORE HEADLINE EARNINGS PER SHARE UP 22.3% TO 159.2 CENTS
STRONG CASH FLOW FROM OPERATING ACTIVITIES
INTERIM DIVIDEND DECLARED OF 47 CENTS PER SHARE
GROUP OVERVIEW
The Holdsport Group comprises Sportsmans Warehouse and Outdoor Warehouse,
the leading sports and outdoor retailers in South Africa, as well as First
Ascent, a rapidly expanding outdoor apparel and equipment brand.
Holdsport was listed on the JSE Limited ("JSE") on 18 July 2011 and these
are its maiden set of interim results.
The group produced a pleasing result in the first half of the year, with
total sales increasing by 7.2% to R546.9 million and retail sales
increasing by 6.5% to R523.7 million. The group operating profit increased
by 8.7% to R89.8 million.
Shareholder loans were capitalised during the current period before the
group was listed. Pro forma comparative figures have therefore been
provided to allow for a better appreciation of the performance of the
group, which has benefited from lower interest charges in the period to 31
August 2011. The profit after taxation of R61.2 million is 19.6% higher
than the pro forma profit after taxation for the period ended 31 August
2010.
Holdsport calculates core headline earnings for management purposes. This
excludes exceptional once-off costs and the amortisation of trademarks,
fair value adjustments to loans and the lease straight-lining expense. Core
headline earnings per share increased by 22.3% to 159.2 cents. Headline
earnings increased by 30.4% per share to 141.7 cents.
Holdsport has maintained strong margins through its ongoing procurement
strategies and rigorous cost management. The group`s operating profit
margin for the period increased from 16.2% to 16.4%.
The group opened two new stores during the period and relocated one store,
with a weighted increase in trading area of 2.3% relative to the prior
corresponding period.
A maiden interim dividend has been declared of 47.0 cents per share, in
line with the group`s dividend policy.
TRADING DIVISIONS
Retail sales and growth in the various trading divisions was as follows:
Number of Sales
stores Rm % change
Sportsmans Warehouse 33 392.1 6.1
Outdoor Warehouse 18 131.6 7.7
Retail sales 51 523.7 6.5
First Ascent - 23.2 28.1
Total 51 546.9 7.2
Total sales increased by 7.2%. Retail sales increased by 6.5%, whilst same
store retail sales grew by 5.0%. We estimate price deflation of
approximately 1.4% for the period. Total trading expenses increased by 8.2%
on a like-for- like basis.
The Sportsmans Warehouse division opened one new store in Pietermaritzburg
and relocated a store in Pretoria, and is now trading out of 33 stores.
Sales grew by 6.1% to R392.1 million. Same store sales increased by 5.1%.
The Outdoor Warehouse division opened one new store in Vanderbijlpark and
is now trading out of 18 stores. Sales grew by 7.7% to R131.6 million. Same
store sales increased by 4.8%.
First Ascent SA has traded very well and achieved R23.2 million of external
sales, a 28.1% growth from the previous period. The brand continues to gain
in popularity and is extending its product range successfully.
PROSPECTS
Whilst continued unemployment in the economy and general economic
volatility remains a potential risk, we are cautiously optimistic regarding
trading in the second half of this year. As always, the second half is
heavily dependent on Christmas trading, which will largely determine the
performance of the group in the second half.
The new stores that we opened are successful and have met our expectations.
We have signed lease agreements for a further two new stores to be opened
in the next financial year, and are evaluating other opportunities. The
weighted trading space for the full financial year is expected to increase
by 3% on the previous year.
INTERIM DIVIDEND ANNOUNCEMENT
The directors declared an interim dividend of 47.0 cents per share payable
on Monday, 14 November 2011 to ordinary shareholders recorded in the books
of the company at the close of business on Friday, 11 November 2011.
The last day to trade ("cum" the dividend) in order to participate in the
dividend will be Friday, 4 November 2011. The Holdsport Group Limited
ordinary shares will commence trading "ex" the dividend from the
commencement of
business on Monday, 7 November 2011 and the record date, as indicated, will
be Friday, 11 November 2011.
Ordinary shareholders should take note that share certificates may not be
dematerialised or rematerialised during the period Monday, 7 November 2011
to Friday, 11 November 2011, both dates inclusive.
Certificated ordinary shareholders are reminded that all entitlements to
dividends with a value less than R5.00 per certificated shareholder will be
aggregated and the proceeds donated to a registered charity of the
directors` choice.
Signed on behalf of board
S MULLER K HODGSON
Chairman CEO
Cape Town
27 September 2011
Condensed Consolidated Statements of Financial Position
31 August 31 August 31 August 28 February
2011 2010 2010 2011
Unaudited Unaudited Pro forma Audited
R`000 R`000 R`000 R`000
Assets
Non-current assets
Plant and equipment 44 554 42 817 42 817 42 759
Goodwill and other
intangibles 644 360 656 914 656 914 650 637
Total non-current assets 688 914 699 731 699 731 693 396
Current assets
Inventories 247 828 214 880 214 880 232 762
Trade and other
receivables 15 295 16 959 16 959 15 558
Taxation 8 106 5 535 5 535 -
Cash and cash equivalents 32 568 39 077 39 077 67 919
Total current assets 303 797 276 451 276 451 316 239
Total assets 992 711 976 182 976 182 1 009 635
Equity and liabilities
Capital and reserves
Share capital 229 312 19 229 312 19
Other reserves (15 085) 110 141 - -
Retained earnings 443 421 244 851 315 796 384 244
Equity attributable to
owners of the company 657 648 355 011 545 108 384 263
Non-controlling interest - 878 - 1 027
Total equity 657 648 355 889 545 108 385 290
Non-current liabilities
Loans 137 817 362 720 163 078 379 935
Deferred taxation 58 944 81 072 61 495 59 738
Operating lease accrual 20 597 17 944 17 944 19160
Total non-current
liabilities 217 358 461 736 242 517 458 833
Current liabilities
Trade and other payables 90 148 86 948 86 948 100 132
Derivative instruments 2 382 8 654 8 654 6 563
Short-term portion of
loans 25 175 62 955 92 955 54 174
Taxation - - - 4 643
Total current liabilities 117 705 158 557 188 557 165 512
Total liabilities 335 063 620 293 431 074 624 345
Total equity and
liabilities 992 711 976 182 976 182 1 009 635
Condensed Consolidated Cash Flow Statement
6 months 6 months Year
ended ended ended
31 August 31 August 28 February
2011 2010 2011
Unaudited Unaudited Audited
R`000 R`000 R`000
Cash flows from operating activities
Cash generated from operations 84 093 84 437 210 713
Finance income 1 959 2 864 4 038
Finance costs (10 148) (11 837) (23 042)
Taxation paid (37 664) (27 692) (52 639)
Net cash inflows from operating
activities 38 240 47 772 139 070
Cash flows from investing activities
Additions to plant and equipment (13 276) (9 172) (20 940)
Proceeds on sale of plant and equipment 91 433 1 072
Net cash outflows from investing
activities (13 185) (8 739) (19 868)
Cash flows from financing activities
Repayment of loans (41 825) (89 333) (140 660)
Acquisition of non-controlling interest (3 082) (13 101) (13 101)
Purchase of shares in terms of
forfeitable share plan (15 500) - -
Net cash outflows from financing
activities (60 407) (102 434) (153 761)
Net decrease in cash during the period (35 351) (63 401) (34 559)
Cash at the beginning of the period 67 919 102 478 102 478
Cash at the end of the period 32 568 39 077 67 919
Condensed Consolidated Statements of Comprehensive Income
6 months 6 months 6 months Year
ended ended ended ended
31 August 31 August 31 August 28 February
2011 2010 2010 2011
Unaudited Unaudited Pro forma Audited
R`000 R`000 R`000 R`000
Sales 546 988 509 993 509 993 1 132 482
Cost of sales (276 258) (262 315) (262 315) (581 640)
Gross profit 270 730 247 678 247 678 550 842
Other income 1 439 1 666 1 666 3 389
Trading expenses (182 381) (166 720) (166 720) (358 624)
Operating profit 89 788 82 624 82 624 195 607
Finance income 1 959 2 864 2 864 4 038
Finance cost (6 392) (29 678) (13 953) (100 644)
Profit before taxation 85 355 55 810 71 535 99 001
Taxation (24 122) (15 918) (20 321) (29 708)
Profit for the period 61 233 39 892 51 214 69 293
Attributable to:
Equity holders of the
company 61 233 39 614 51 214 68 866
Non-controlling interest - 278 - 427
Profit for the period
and total comprehensive
income for the period 61 233 39 892 51 214 69 293
Group Segmental Analysis
Retail Wholesale
Sportsmans Outdoor
Warehouse Warehouse
Unaudited Unaudited Unaudited
6 months ended 31 August 2011 R`000 R`000 R`000
External revenue 392 156 131 628 23 204
External interest received - - 157
External interest paid - - (70)
Depreciation and amortisation (7 744) (2 449) (990)
Group profit before taxation
- Segment profit/(loss) before taxation 71 424 21 206 13 518
- IFRS charges - - -
Capital expenditure 10 088 2 600 163
Segment assets 216 687 82 207 53 764
Segment liabilities 68 257 20 379 3 541
6 months ended 31 August 2010
External revenue 369 546 122 283 18 164
External interest received - - 350
External interest paid - - -
Depreciation and amortisation (8 261) (2 530) (777)
Group profit before taxation
- Segment profit/(loss) before taxation 66 469 19 219 10 381
- IFRS charges - - -
Capital expenditure 5 687 1 297 969
Segment assets 194 192 69 917 45 760
Segment liabilities 59 054 21 871 7 359
Audited Audited Audited
Year ended 28 February 2011 R`000 R`000 R`000
External revenue 820 382 279 500 32 600
External interest received - - 541
External interest paid - - (19)
Depreciation and amortisation (16 253) (4 949) (1 696)
Group profit before taxation
- Segment profit/(loss) before taxation 161 137 49 445 16 089
- IFRS charges - - -
Capital expenditure 13 950 3 853 1 588
Segment assets 210 017 81 526 17 388
Segment liabilities 69 752 18 261 8 636
Corporate Group
Unaudited Unaudited
6 months ended 31 August 2011 R`000 R`000
External revenue - 546 988
External interest received 1 802 1 959
External interest paid (6 323) (6 393)
Depreciation and amortisation (6 434) (17 617)
Group profit before taxation 85 355
- Segment profit/(loss) before taxation (19 356) 86 792
- IFRS charges (1 437) (1 437)
Capital expenditure 425 13 276
Segment assets 640 053 992 711
Segment liabilities 242 886 335 063
6 months ended 31 August 2010
External revenue - 509 993
External interest received 2 514 2 864
External interest paid (13 954) (13 954)
Depreciation and amortisation (6 461) (18 029)
Group profit before taxation 55 810
- Segment profit/(loss) before taxation (23 806) 72 262
- IFRS charges (16 452) (16 452)
Capital expenditure 1 219 9 172
Segment assets 666 313 976 182
Segment liabilities 532 009 620 293
Audited Audited
Year ended 28 February 2011 R`000 R`000
External revenue - 1 132 482
External interest received 3 497 4 038
External interest paid (23 024) (23 043)
Depreciation and amortisation (12 908) (35 806)
Group profit before taxation 99 001
- Segment profit/(loss) before
taxation (48 122) 178 548
- IFRS charges (79 547) (79 547)
Capital expenditure 1 550 20 941
Segment assets 700 704 1 009 635
Segment liabilities 527 696 624 345
Condensed Consolidated Statement of Changes in Equity
Share Other Retained
capital reserves earnings
R`000 R`000 R`000
Equity at 28 February 2010 19 110 141 216 558
Total comprehensive income for the
half-year 39 614
Acquisition of non-controlling
interest without a change in control (11 321)
Equity at 31 August 2010 19 110 141 244 851
Total comprehensive income for the
half-year - 29 252
Reclassification of other reserves (110 141) 110 141
Equity at 28 February 2011 19 - 384 244
Acquisition of non-controlling
interest without a change in control - - (2 055)
Capitalisation of shareholders` loans 229 292 - -
Share-based payment reserve: initial
award - (15 500) -
Share-based payment expense - 415 -
Total comprehensive income for the
half-year - - 61 233
Equity at 31 August 2011 229 312 (15 085) 443 421
6 months ended
31 August
2011
Unaudited
Dividends declared per share (cents)
- Interim 47.0
Dividend cover 3.4
Equity holders Non-controlling Total
of Holdsport interest equity
R`000 R`000 R`000
326 718 2 380 329 098
Equity at 28 February 2010
Total comprehensive income
for the half-year 39 614 278 39 892
Acquisition of non-controlling
interest without a change in
control (11 321) (1 780) (13 101)
355 011 878 355 889
Equity at 31 August 2010
Total comprehensive income
for the half-year 29 252 149 29 401
Reclassification of other reserves - - -
Equity at 28 February 2011 384 263 1 027 385 290
Acquisition of
non-controlling interest
without a change in control (2 055) (1 027) (3 082)
Capitalisation of
shareholders` loans 229 292 - 229 292
Share-based payment reserve:
initial award (15 500) - (15 500)
Share-based payment expense 415 - 415
Total comprehensive income
for the half-year 61 233 - 61 233
Equity at 31 August 2011 657 648 - 657 648
6 months ended Year ended
31 August 2010 28 February 2011
Unaudited Audited
Dividends declared per share
(cents)
- Interim - -
Dividend cover - -
Notes to the financial statements
1. The unaudited interim condensed consolidated results for the half-year
ended 31 August 2011 have been prepared in accordance with the recognition,
measurement, presentation and disclosure requirements of IAS 34: Interim
Financial Reporting, using the group`s accounting policies that are in line
with International Financial Reporting Standards (IFRS), the Companies Act
No. 71 of 2008, as amended, and the SAICA AC 500 series and have been
consistently applied to prior periods.
The unaudited pro forma statement of financial position at 31 August 2010
and statement of comprehensive income of Holdsport for the period then
ended is also set out below. The unaudited pro forma financial information
for the six months ended 31 August 2010 has been prepared to show the
impact of the shareholders` loan conversions and the subsequent listing of
the group. Pro forma information have been prepared consistently with the
accounting policies applied to the other periods presented.
These unaudited interim condensed consolidated results have been prepared
under the supervision of the group financial director, JP Loubser (CA(SA)).
2. These financial statements incorporate the financial statements of the
company, all its subsidiaries and all entities over which it has
operational and financial control.
6 months 6 months 6 months Year
ended ended ended ended
31 August 31 August 31 August 28 February
2011 2010 2010 2011
Unaudited Unaudited Pro forma Audited
R`000 R`000 R`000 R`000
3. Trading expenses
Depreciation on plant
and equipment 11 339 11 751 11 751 23 251
Amortisation of
intangibles 6 277 6 277 6 277 12 555
Occupancy cost 50 529 44 664 44 664 91 030
Straight-lining of leases 1 437 729 729 1 945
Staff costs 64 401 59 655 59 655 133 195
Foreign exchange losses 994 4 725 4 725 6 742
Other operating costs 47 404 38 918 38 918 89 906
182 381 166 720 166 720 358 624
4. Finance cost
Interest paid on loans 10 148 13 953 13 953 23 036
Decrease in interest
rate swap derivative (3 756) - - -
Fair value adjustment on
loans - 15 725 - 77 608
6 392 29 678 13 953 100 644
5. Cash generated from
operations
Operating profit 89 788 82 624 195 607
Adjustments for:
Depreciation 11 339 11 752 23 251
Amortisation of intangibles 6 277 6 277 12 555
Profit on sale of plant
and equipment 49 119 (193)
Fair value gains on
derivative instruments (425) 2 257 166
Forfeitable share plan
expense 415 - -
Straight-lining of leases 1 437 729 1 945
Changes in working capital:
Increase/(Decrease) trade
and other receivables 263 (3 743) (2 342)
Increase inventories (15 066) (14 710) (32 592)
(Decrease)/Increase in
trade and other payables (9 984) (868) 12 316
Cash generated from
operations 84 093 84 437 210 713
6. Earnings per share and net asset value per share
6 months 6 months 6 months
ended ended ended Year ended
31 August 31 August 31 August 28 February
2011 2010 2010 2011
Unaudited Unaudited Pro forma Audited
Earnings per share
(cents)
- Basic 141.9 109.1 118.6 189.6
- Headline 141.7 108.7 118.4 189.1
- Core headline 159.2 129.5 130.1 316.2
Ordinary shares in issue
(`000) 43 150 36 306 43 150 36 306
Weighted average shares
in issue (`000) 43 150 36 306 43 150 36 306
Net asset value per
share (cents) 1 523 980 1 263 1 061
Net tangible asset value
per share (cents) 191 (629) (91) (536)
Reconciliation to core headline earnings:
The group uses core headline earnings as a consistent measure of
performance for management purposes, and provided this in its prelisting
statement. Core headline earnings exclude exceptional once-off costs and
the amortisation of trademarks, fair value adjustments to loans and the
lease straight-lining expense, and are presented below:
6 months 6 months 6 months
ended ended ended Year ended
31 August 31 August 31 August 28 February
2011 2010 2010 2011
Unaudited Unaudited Pro forma Audited
R`000 R`000 R`000 R`000
Basic earnings 61 233 39 614 51 214 68 866
Adjusted for:
Profit on disposal of
plant and equipment (49) (119) (119) (193)
Headline earnings 61 184 39 495 51 095 68 673
Adjusted for:
Fair value adjustments
on loans, net of taxation (310) 11 322 - 55 878
Amortisation of intangibles
net of taxation 4 519 4 519 4 519 9 040
Straight-lining of
leases net of taxation 956 546 546 1 400
Non-recurring professional
fees net of taxation 2 363 - - 1 464
Core headline earnings* 68 712 55 883 56 161 136 455
* In order to compare the core headline earnings per share over time, this
is divided by the number of shares in issue at the last reporting date,
being 43 150 220 shares at 31 August 2011.
Executive directors
KG Hodgson, EA Haarburger, JP Loubser
Non-executive directors
SA Muller (Chairman), B Hopkins, C Sonn, M Vilakazi, N Chuphi
Company secretary
AE van Zyl
Registered office
The Mill House, 1 Canterbury Street, Cape Town, 8001
Transfer secretaries
Computershare Investor Services (Proprietary) Limited, Ground Floor,
70 Marshall Street, Johannesburg 2001
Sponsor
UBS South Africa (Proprietary) Limited
27 September 2011
TO VIEW THE RESULTS ONLINE VISIT
www.holdsport.co.za
Date: 27/09/2011 16:00:01 Produced by the JSE SENS Department.
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