| Mon 20 Feb 2012, 17:45 | | SPG - Super Group Limited - Unaudited results for the six months ended 31 |
|
SPG
SPG
SPG - Super Group Limited - Unaudited results for the six months ended 31
December 2011 and a trading statement pertaining to the year ending 30 June
2012
Super Group Limited
(Incorporated in the Republic of South Africa)
Registration number 1943/016107/06
ISIN: ZAE000161832 Share code: SPG
("Super Group" or "the Group")
Unaudited results for the six months ended 31 December 2011 and a trading
statement pertaining to the year ending 30 June 2012
Highlights
Revenue for the period increased by 23% to R4.7 billion
Operating profit of R405 million up by 36% on the prior period
Profit before taxation increased by 63% to R353 million
Cash generated from operations up by 105% to R767 million
Headline earnings increased by 63% to R244 million
Reduction in consolidated gearing to 15%
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Six month Six month
period ended period ended Year ended
31 December 31 December 30 June
2011 2010 2011
Unaudited Unaudited Audited
R`000 R`000 R`000
Revenue 4 667 881 3 800 647 7 834 829
Trading profit before
depreciation and amortisation 655 608 558 772 1 171 960
Depreciation and amortisation (245 223) (258 046) (538 399)
Trading profit 410 385 300 726 633 561
Capital items (5 114) (2 604) (21 095)
Operating profit 405 271 298 122 612 466
Net finance charges paid (52 341) (81 745) (142 508)
Profit before taxation 352 930 216 377 469 958
Income tax expense (87 174) (43 059) (101 525)
Profit for the period from
continuing operations 265 756 173 318 368 433
Total (loss)/profit for the
period from discontinued
operations - (1 697) 274
(Loss)/profit for the period
from discontinued operations - (5 154) 3 368
Fair value profit/(loss) on
discontinuation - 3 457 (3 094)
Profit for the period 265 756 171 621 368 707
Other comprehensive income
Effect of foreign exchange 147 511 (36 199) 54 111
Hedge accounting 218 930 2 428
Revaluation of land and
buildings - - 12 238
Other comprehensive
income/(expense) for the period
(net of taxation) 147 729 (35 269) 68 777
Total comprehensive income for
the period 413 485 136 352 437 484
Profit for the period
attributable to:
Non-controlling interests 26 974 21 325 48 055
Equity holders of Super Group
Limited - continuing 238 782 151 993 320 378
Equity holders of Super Group
Limited - discontinued - (1 697) 274
Profit for the period 265 756 171 621 368 707
RECONCILIATION OF HEADLINE
EARNINGS
Profit attributable to equity
holders of Super Group Limited 238 782 150 296 320 652
Capital items after tax
(continuing operations) 4 865 2 396 18 966
Foreign currency translation
reserve - - 10 851
Impairment on investments 183 - 3 602
Impairment on property, plant,
equipment and full maintenance
lease vehicles 640 526 644
Impairment in intangible assets - 1 870 3 869
Loss on sale of property 4 042 - -
Fair value (profit)/loss on
discontinuation - (3 457) 3 094
Headline profit for the period 243 647 149 235 342 712
Loss/(profit) from discontinued
operations - 5 154 (3 368)
Adjusted headline earnings for
the period 243 647 154 389 339 344
Basic earnings per share
(cents) 78,2 47,0 101,3
Basic earnings per share
(continuing operations) (cents) 78,2 47,5 101,2
Diluted earnings per share
(cents) 77,7 46,9 100,8
Diluted earnings per share
(continuing operations) (cents) 77,7 47,4 100,8
Headline earnings per share
(cents) 79,8 46,6 108,3
Headline earnings per share
(continuing operations) (cents) 79,8 48,2 107,2
Diluted headline earnings per
share (cents) 79,2 46,6 107,8
Diluted headline earnings per
share (continuing operations)
(cents) 79,2 48,2 106,7
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
31 December 31 December 30 June
2011 2010 2011
Unaudited Unaudited Audited
R`000 R`000 R`000
ASSETS
Property, plant and equipment 1 562 100 1 317 785 1 435 649
Full maintenance lease assets 808 640 1 142 525 862 186
Intangible assets 48 815 82 232 64 208
Goodwill 1 545 534 1 300 299 1 412 628
Investments and other non-
current assets 16 827 5 669 1 650
Deferred tax assets 230 170 253 711 225 536
Current assets 3 822 826 3 176 891 3 483 709
Assets held for sale - 50 000 -
Inventories 548 821 576 529 490 737
Trade and other receivables 1 464 223 1 198 929 1 302 346
Finance lease receivables 224 536 52 940 246 140
Insurance-related assets 127 458 262 983 233 690
Cash and cash equivalents 1 457 788 1 035 510 1 210 796
Total assets 8 034 912 7 279 112 7 485 566
EQUITY AND LIABILITIES
Capital and reserves
Capital and reserves
attributable to equity holders
of Super Group Limited 2 825 484 2 487 264 2 572 777
Non-controlling interests 324 256 151 818 258 508
Total equity 3 149 740 2 639 082 2 831 285
Liabilities
Fund reserves 415 455 305 511 357 369
Deferred tax liabilities 149 050 171 252 149 050
Full maintenance lease
liabilities (including
Australia) 667 225 958 155 778 137
Non-current 35 566 165 067 109 219
Current 631 659 793 088 668 918
Interest-bearing borrowings 1 123 043 886 130 1 035 213
Non-current 967 036 757 649 879 296
Current 156 007 128 481 155 917
Liabilities directly associated
with assets held for sale - 51 965 -
Insurance-related liabilities 180 558 359 386 296 911
Other current liabilities 2 349 841 1 907 631 2 037 601
Total equity and liabilities 8 034 912 7 279 112 7 485 566
CONDENSED GROUP STATEMENT OF CASH FLOW
Six month Six month
period ended period ended Year ended
31 December 31 December 30 June
2011 2010 2011
Unaudited Unaudited Audited
R`000 R`000 R`000
Cash flows from operating
activities
Operating cash flow 695 289 534 493 1 243 186
Working capital changes 72 098 (159 639) (272 063)
Cash generated from operations 767 387 374 854 971 123
Finance costs paid (106 512) (111 434) (208 877)
Investment income and interest
received 54 247 39 176 77 208
Income tax paid (83 859) (35 929) (115 282)
Dividend paid to non-
controlling interest - (37 727) (37 727)
Net cash generated from
operating activities 631 263 228 940 686 445
Cash flows from investing
activities
Net additions to property,
plant and equipment (122 365) (78 571) (244 697)
Net (additions)/disposals to
full maintenance lease assets (69 959) 88 697 57 159
Net additions to intangible
assets (6 415) (10 788) (21 059)
Business combinations (47 512) (5 303) 103 289
Proceeds on sale of investments - 16 161 16 221
Other investing activities (12 266) (58 270) 75 136
Net cash flow from investing
activities (258 517) (48 074) (13 951)
Cash flows from financing
activities
Share repurchases/buybacks and
related expenses (103 162) - (79 597)
Net interest-bearing borrowings
raised/(repaid) 19 909 (239 964) (310 822)
Net full maintenance lease
borrowings repaid (121 927) (113 560) (295 530)
Net cash flow from financing
activities (205 180) (353 524) (685 949)
Net increase/(decrease)in cash
and cash equivalents 167 566 (172 658) (13 455)
Net cash and cash equivalents
at beginning of the period 1 210 456 1 197 258 1 197 258
Effect of foreign exchange on
cash and cash equivalents 79 766 10 910 26 653
Cash and cash equivalents at
end of the period 1 457 788 1 035 510 1 210 456
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Six month Six month
period ended period ended Year ended
31 December 31 December 30 June
2011 2010 2011
Unaudited Unaudited Audited
R`000 R`000 R`000
Capital and reserves
attributable to equity holders
of Super Group Limited
Balance at beginning of period 2 572 777 2 362 644 2 362 644
Share repurchases / buybacks /
options exercised and related
expenses (103 162) 60 (79 597)
Total comprehensive income for
the period attributable to
equity holders of Super Group
Limited 347 737 105 474 372 573
Profit for the period 238 782 150 296 320 652
Effect of foreign exchange 108 737 (45 752) 37 255
Revaluation of land and
buildings - - 12 238
Hedge accounting 218 930 2 428
Share-based payment reserve
movement 8 132 3 788 8 475
Effect of business combinations
on equity holders of Super
Group Limited - 15 298 (91 318)
Balance at end of period 2 825 484 2 487 264 2 572 777
Non-controlling interests
Balance at beginning of period 258 508 188 211 188 211
Ordinary dividends paid to non-
controlling interests - (37 727) (37 727)
Total comprehensive income for
the period attributable to non-
controlling interests 65 724 30 878 64 911
Profit for the period 26 974 21 325 48 055
Effect of foreign exchange 38 750 9 553 16 856
Changes in non-controlling
interests as a result of
acquisitions and disposals - (19 621) 43 113
Non-controlling interest loan
repaid - (9 841) -
Movement in other reserves 24 (82) -
Balance at end of period 324 256 151 818 258 508
Total equity at end of period 3 149 740 2 639 082 2 831 285
Comprising:
Share capital 324 310 327 310 327 310
Share premium 1 862 621 1 893 091 1 893 091
Capital redemption reserve fund 5 486 5 486 5 486
Retained earnings 771 538 453 392 524 176
Share buyback reserve (691 898) (542 549) (622 206)
General reserve 556 036 556 036 556 036
Revaluation reserve 157 218 147 792 157 666
Foreign currency translation
reserve (159 450) (351 194) (268 187)
Contingency reserve - insurance 1 064 1 057 1 064
Hedging reserve (1 441) (3 157) (1 659)
Non-controlling interests 324 256 151 818 258 508
Total equity at end of period 3 149 740 2 639 082 2 831 285
SEGMENTAL ANALYSIS
Six month Six month
period ended period ended Year ended
31 December 31 December 30 June
2011 2010 2011
Unaudited Unaudited Audited
R`000 R`000 R`000
REVENUE
Supply Chain 1 718 406 1 408 710 2 789 469
- South Africa 1 507 677 1 224 360 2 429 246
- African Logistics 210 729 184 350 360 223
Fleet Solutions 1 167 536 913 478 1 880 896
- Fleet Africa 662 433 505 856 1 051 717
- Sg fleet (Australia) 505 103 407 622 829 179
Dealerships 1 780 453 1 478 459 3 161 333
Services 1 486 - 3 131
Continuing operations 4 667 881 3 800 647 7 834 829
Discontinued operations - 11 122 61 461
Group 4 667 881 3 811 769 7 896 290
Six month Six month
period ended period ended Year ended
31 December 31 December 30 June
2011 2010 2011
Unaudited Unaudited Audited
R`000 R`000 R`000
OPERATING PROFIT
Supply Chain 126 666 106 151 181 497
- South Africa 102 639 94 852 164 801
- African Logistics 24 027 11 299 16 696
Fleet Solutions 243 368 147 250 358 222
- Fleet Africa 131 751 74 545 149 528
- Sg fleet (Australia) 111 617 72 705 208 694
Dealerships 38 580 28 182 63 710
Services (3 343) 16 539 9 037
Continuing operations 405 271 298 122 612 466
Discontinued operations - (11 922) (24 446)
Group 405 271 286 200 588 020
Six month Six month
period ended period ended Year ended
31 December 31 December 30 June
2011 2010 2011
Unaudited Unaudited Audited
R`000 R`000 R`000
PROFIT BEFORE TAX
Supply Chain 109 034 89 743 155 323
- South Africa 92 305 83 319 148 250
- African Logistics 16 729 6 424 7 073
Fleet Solutions 214 043 109 064 288 375
- Fleet Africa 116 038 51 231 108 548
- Sg fleet (Australia) 98 005 57 833 179 827
Dealerships 27 438 16 202 40 879
Services 2 415 1 368 (14 619)
Continuing operations 352 930 216 377 469 958
Discontinued operations - (3 791) (11 722)
Group 352 930 212 586 458 236
Six month Six month
period ended period ended Year ended
31 December 31 December 30 June
2011 2010 2011
Unaudited Unaudited Audited
R`000 R`000 R`000
NET OPERATING ASSETS
Supply Chain 1 524 785 1 166 776 1 187 121
- South Africa 1 148 548 908 412 891 000
- African Logistics 376 237 258 364 296 121
Fleet Solutions 1 335 492 1 684 339 1 602 518
- Fleet Africa 759 697 1 161 930 953 038
- Sg fleet (Australia) 575 795 522 409 649 480
Dealerships 344 290 289 769 317 854
Services 523 756 575 220 549 154
Group 3 728 323 3 716 104 3 656 647
SALIENT SALIENT FEATURES
Six month Six month
period ended period ended Year ended
31 December 31 December 30 June
2011 2010 2011
Unaudited Unaudited Audited
R`000 R`000 R`000
1. Interest-bearing borrowings
Australian ring-fenced
borrowings 513 929 381 783 506 594
Property borrowings 303 593 364 757 308 312
Asset-based finance 305 521 191 555 219 967
Bank overdraft - - 340
Interest-bearing borrowings and
bank overdraft before re-
allocation to held for sale 1 123 043 938 095 1 035 213
Other interest-bearing
borrowings directly associated
with assets held for sale - (51 965) -
1 123 043 886 130 1 035 213
2. Cash and cash equivalents
and bank overdrafts
Cash and cash equivalents 1 457 788 1 035 510 1 210 796
Bank overdraft - - (340)
Total cash and cash equivalents
as per statement of cash flows 1 457 788 1 035 510 1 210 456
3. Share statistics
Total issued less treasury
shares (`000) 298 170 320 053 309 070
Weighted (`000) 305 217 320 059 316 510
Diluted (`000) 307 478 320 528 317 983
Net asset value per share
(cents) 947,4 777,1 832,4
Net asset value excluding
goodwill per share (cents) 429,2 370,9 375,4
4. Capital commitments
Authorised but not yet
contracted for capital
commitments, excluding full
maintenance lease assets 68 580 34 777 242 178
Capital commitments will be
funded from normal operating
cash flows and the utilisation
of existing borrowings
facilities.
5. Related party transactions
The Group, in the ordinary
course of business, entered
into various sales and purchase
transactions on an arm`s length
basis with related parties.
6. Subsequent events
Other than the matters
disclosed, the directors are
not aware of any matter or
circumstance arising subsequent
to the balance sheet date up to
the date of this report, which
would affect these results.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed Group financial statements for the six months ended 31
December 2011 have been prepared in accordance with the framework concepts
and measurement and recognition requirements of International Financial
Reporting Standards ("IFRS"), in particular the presentation and disclosure
requirements of International Accounting Standard ("IAS") 34 Interim
Financial Reporting, the AC 500 series issued by the Accounting Practices
Board or its successor, the Listings Requirements of the JSE Limited and the
South African Companies Act 71 of 2008, as amended. The accounting policies
used in the preparation of the unaudited interim results for the six months
ended 31 December 2011, are in terms of IFRS and are consistent with those
applied in the audited financial statements for the year ended 30 June 2011,
except for the standards and amendments to standards that became effective
on 1 January 2011: Improvements to IFRS 2010, and that became effective on 1
July 2011: IFRS 1 (Severe Hyperinflation and Removal of Fixed Dates for
First-time Adopters); IFRS 7 (Disclosures: Transfers of Financial Assets)
and IFRIC 14 (Prepayments of a Minimum Funding Requirement). The adoption of
these standards has not effect on the results, nor has it required any
restatement of the results. The condensed consolidated financial statements
are presented in Rand, which is Super Group`s presentation currency. These
results have been compiled under the supervision of the Chief Financial
Officer, C Brown CA(SA), BCompt (Hons), MBL. The interim results have not
been reviewed or reported on by the Group auditors, KPMG Inc.
COMMENTARY
Overview of results
The Board of Super Group is pleased to present the Group`s interim results
for the six months ended 31 December 2011. Despite the prevailing highly
competitive economic and trading environment, the Group has achieved
significant growth in its earnings.
The Supply Chain South Africa business delivered a satisfactory performance,
and African Logistics reflected a strong improvement in operating margins
for the period concerned. Fleet Solutions outperformed the Group`s
expectations in both South Africa and Australia mainly as a result of a
number of new contracts, favourable residual values, lower maintenance
costs, and stringent control of overheads. Dealerships continued to
experience sales volume growth that exceeded industry statistics and
performed well for the six months to December 2011.
The strong focus on effective cash generation and the management of working
capital exposures resulted in a net cash retention, after working capital,
of R767 million for the six month period. As announced on SENS on 8 February
2012, the previous Bank Facility Agreements were terminated and normalised
funding arrangements were concluded in February 2012. During the period
under review, the company embarked on a repurchase of its own shares and the
Super Group Share Incentive Scheme also purchased shares with regard to
employee share options issued during 2011. The Share Incentive Scheme
acquired 7,899,528 shares during the period. These shares are classified as
treasury shares. SENS announcements pertaining to these trades were
released. The company also repurchased 3,000,000 shares (totaling 0.9% of
the issued share capital). The total consideration for all of the above
shares bought was approximately R103 million.
Financial performance
The Group`s revenue increased by 23% to R4 668 million mainly as a result of
new business generated and volume growth in the Supply Chain South Africa
and Fleet Solutions businesses, as well as a 19% increase in new vehicle
sales within the Dealership operations.
Operating profits increased by 36% to R405 million for the period under
review. The improvement in operating margin to 8,7% (December 2010: 7,8%) is
mainly attributable to the return to profitability of the African Logistics
operations and an excellent performance in the Fleet Solutions Division.
Profit before taxation increased by 63% to R353 million, reflecting the
benefits of improved operational profitability and lower net finance costs.
The reduction in net finance costs reflects the impact of a further R330
million reduction in net borrowings over the period concerned.
The Group`s Statement of Financial Position remains robust, reflecting a net
asset value per share of 947 cents, up 14% from the 832 cents at 30 June
2011. The consolidated gearing ratio as at 31 December 2011 of 15% (30 June
2011: 27%) is well below the targeted range of 30 - 40%.
Divisional review
Supply Chain South Africa performed above expectations despite strikes and
inclement weather conditions. The increase in revenue, operating profit and
profit before taxation over the period was driven by good operational
performances in the Mobility (previously known as Automotive), Super Rent
and Freight operations. Although the Sherwood International business
outperformed in relation to budget, it still made no profit contribution for
the period concerned. The Micor business reported improved results as well
as higher margins on the back of a number of new contracts. The Haulcon
business was integrated into the division from 1 July 2011. SG Convenience
traded at record highs as a result of excellent regional performance in
Gauteng, Nelspruit and the Western Cape, the successful launch of a number
of new product ranges and the implementation of a preferred forecourt
distribution solution for a major local fuel distributor.
African Logistics reported an increase in revenue and operating margin
primarily as a result of improved South-Bound transport activity, a
continued escalation in commodity prices and a modest increase per kilometer
revenue rate. North-Bound freight volumes continue to improve overall and
capacity utilisation is currently in excess of 85%. The newer fleet offering
and the improved commodity trading cycle should bode well for this business
over the next six months.
Fleet Africa`s operating results were positively impacted by new tenders
awarded during the period, lower depreciation as a result of improved
residual values and the stringent control of maintenance costs.
Sg fleet (Australia) delivered good financial results in a competitive
trading environment. The demand for used vehicles remains strong in
Australia, keeping residual values at current high levels. The business has
a full opportunity pipeline, despite the current uncertain economic
environment. The relationship with Champ Ventures continues to add value to
the business.
Dealerships continued to deliver a good performance, and achieved its
targeted 2.2% operating margin. Revenue from new vehicle sales outperformed
total NAAMSA new vehicle sales (up 15.5%) for the period to 31 December 2011
by 3.3%. The used vehicle market remains under pressure, although this is
expected to reverse due to the recent escalations in new vehicle prices. The
development of the new Volkswagen and Audi Rustenburg site commenced in
October 2011.
Services: Due to materiality, Supply Chain International (Mauritius) and the
remaining discontinued operations, including the run-off of the Emerald
Insurance book, have been included in the Services segment in the current
period. Supply Chain International is substantially a treasury and off-shore
holding company. The operation does generate some external profits, but they
are primarily from treasury related activities.
Prospects
The Southern African economy remains pedestrian and competitive pricing is
the order of the day. The revenue growth rates across all Super Group`s
businesses are expected to be in line with general economic growth, other
than where there has been new business generation or the extension of
product lines.
Supply Chain South Africa will continue to focus on niche pharmaceutical and
bulk tanker opportunities, Freight and Super Rent are exploring the
increased demand for temperature controlled environments arising in the food
service and retail sectors. African Logistics is considering opportunities
in relation to bulk farming and staple food distribution. The ECPG contract
expired at the end of January 2012. The COJ contract, other than the Red
Fleet element, continues on a short term extension to the end of February
2012. A good pipeline of opportunities and a very strong balance sheet
positions Fleet Africa optimally for the potential replacement of these
contracts. Sg fleet (Australia) is expected to perform well in the next six
months despite modest economic growth. This business has improved capital
availability and strong cash generation to underpin its new business
pipeline. The Dealership Division is expected to generate good earnings
growth in the months to June 2012 on the back of continuing buoyant new
vehicle sales growth.
Strong cash generation is expected across the Group and this will underpin a
robust balance sheet and allow Super Group to pursue earnings-enhancing and
value-accretive strategic opportunities.
In line with Super Group`s current policy to repurchase shares, no interim
dividend has been declared for the six months ended 31 December 2011. The
Board reassesses this strategy on a regular basis.
TRADING STATEMENT FOR THE YEAR ENDING 30 JUNE 2012
In terms of the JSE Limited Listings Requirements, issuers are required to
publish a trading statement as soon as they are satisfied that a reasonable
degree of certainty exists that the financial results for the period to be
reported upon next, being for the twelve months ending 30 June 2012, will
differ by at least 20% from those of the prior comparative period.
Despite the loss of the ECPG contract in Fleet Africa, shareholders are
advised that Super Group is expecting to report a consolidated net profit
after taxation for the year ending 30 June 2012 of at least R501 million,
resulting in earnings per share ("EPS") and headline earnings per share
("HEPS") of at least 160.0 cents. This compares with a consolidated net
profit after taxation of R369 million which equates to an EPS of 101.2 cents
and HEPS of 107.2 cents for the year ended 30 June 2011.
30 June 2012 30 June 2011
At least Audited
EPS (cents) 160.0 101.2
HEPS (cents) 160.0 107.2
Weighted number of shares
(`000) 301 748 316 510
The above prospect statements and trading statement have not been reviewed
or reported on by the Group`s auditors.
The interim results and the presentation to the investor community can be
viewed on the Group`s website, www.supergroup.co.za from Thursday, 23
February 2012.
On behalf of the Board
P Vallet P Mountford
Non-Executive Chairman Chief Executive Officer
Directors:
Executive: P Mountford (Chief Executive Officer) and C Brown (Chief
Financial Officer)
Non-Executive:
P Vallet (Chairman), N Davies*, J Newbury*, V Chitalu*#, D Rose* and Dr E
Banda*
*Independent #Zambian
Company Secretary:
N Redford
Registered office:
27 Impala Road, Chislehurston, Sandton, 2196
Transfer secretaries:
Computershare Investor Services (Pty) Limited
(Registration number 20004/003687/07)
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
www.supergroup.co.za
20 February 2012
Sandton
Sponsor:
Deutsche Securities (SA) (Proprietary) Limited
Date: 20/02/2012 17:45:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
