| Thu 8 Mar 2001, 0:00 | | Wooltru Limited - Interim Results 31 December 2000 |
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INTERIM RESULTS - 31 DECEMBER 2000
GROUP
Headline earnings from continuing operations declined by 20% to R151,6 million.
Headline earnings per share from continuing operations declined by 24% to 32,3
cents per share. These results were caused primarily by the negative impact
upon earnings of the start-up costs of inthebag, the losses incurred by Topics
and the dilution of Wooltru's holding in Massmart.
COMPARABILITY WITH PRIOR YEARS
Income statement and balance sheet items can not be directly compared on a line
by line basis with prior years because of the following reasons:
* Massmart listed on 4 July 2000 and is no longer consolidated as a
subsidiary, but its results are incorporated as an associate.
* An agreement for the sale of CNA has been concluded. CNA has consequently
been treated as a discontinuing operation and its contribution to group
headline earnings is no longer included in the analysis of headline earnings.
WOOLWORTHS
Woolworths Holdings' headline earnings grew by 11,3% to R155,2 million, which
translated into a 9,8% increase in contribution to Wooltru group headline
earnings. During the period under review, revenue grew by 8,4% to R3,7 billion
and net profit before exceptional items grew by 17,2% to R239,5 million.
The improvement in Woolworths' performance in South Africa, which commenced in
the second half of the last financial year, has continued. Turnover grew by
9,2% to R2,9 billion and profit before tax and exceptional items grew by 18,7%
to R237,3 million.
These results reflect the reduction in overhead costs, that ensued from the
restructuring programme that was implemented in the prior financial year, as
well as the improved contribution from food sales, which increased by 14,0%.
The textile business continues to be tough.
In Australia, the introduction of GST and a post-Olympic decline in the levels
of consumer spending, resulted in Country Road showing a limited increase in
turnover. Profit before tax and exceptional items declined by 50% to R2,2
million. Management does not foresee an improvement in consumer demand or
market conditions over the next six months.
It is anticipated that the modest increase in the profitability of the
Woolworths group will continue into the second half of the year.
TRUWORTHS INTERNATIONAL
The headline earnings contribution from continuing operations from Truworths
International to Wooltru increased by 18,0%, in line with the 19,6% growth in
headline earnings to R103,4 million. Revenue from continuing operations grew by
11,3% to R857,6 million, resulting in a 20,6% increase in operating profit
before exceptional items to R149,7 million.
This improvement in results from all operations during the six-months reflects
the elimination of the losses from Sportsgirl, which negatively impacted the
comparable results in 1999.
Truworths merchandise sales grew by 12,1% to R823,3 million and trading was
ahead of expectations. Operating profit as a percentage of revenue increased
through a growth in market share and improved productivity.
Truworths expects to show a reasonable growth in profits for the full year.
MASSMART
Although Massmart achieved a 39,8% increase in comparable headline earnings, to
R144,7 million, Massmart's contribution to Wooltru's earnings increased by only
10,5%. The reason for this discrepancy is that Wooltru's holding in Massmart
has been diluted as a result of the sale of debentures to SHV, in January 2000,
and the listing of Massmart in July.
Turnover increased by 9,2% to R6,2 billion and net profit before tax and
exceptional items grew to R 200,5 million.
These results were attained primarily through a 39% increase in profits before
tax by Makro and 22% increase by CCW.
Massmart's particular approach to mass distribution is well suited to the
changing South African market place. On the basis of continued economic
recovery, Massmart management is confident that they will outperform the retail
sector.
TOPICS
Topics' contribution to group earnings deteriorated further during the period
under review. Revenue decreased by 1,8% to R200,4 million and net profit before
exceptional items deteriorated from R10,7 million last year to a loss of R18,9
million. Headline earnings decreased to a loss of R11,8 million.
Over-optimistic budgeting and poor stock control last year left the business
heavily over-stocked. The cost of clearance has had a serious impact on
profitability. Unbalanced ranges over the critical Christmas period, which
resulted in poor sales, were further contributors to the unacceptable results.
A new top management team has been appointed and they will be refocusing the
business to concentrate on core merchandise departments, and reinforcing
discipline and procedures with a particular emphasis on stock control.
This notwithstanding, the company will continue to make losses for the second
half of the year, although not to the same extent as the first six months.
However, the changes that have been implemented should see the start of a
return to acceptable levels of profitability in the year ending June 2002.
CNA
The CNA group results include the results of Constantia Greetings. Group
revenue decreased marginally, by 1,8%, to R592,2 million in the period under
review. Net loss before exceptional items decreased by 21,5% to a loss of R5,1
million, which reflects progress in the turnaround process.
In the light of the decision to unbundle Wooltru, the directors did not
consider it appropriate to continue to provide financial support to CNA through
the remainder of the turnaround process and the decision was taken to dispose
of the company.
CNA has been sold for R150 million, R100 million of which is backed by bank
guarantees and the balance is secured over equity within the restructured CNA
group. The sale is not subject to any profit warranties, but the purchase price
could be subject to adjustment, up or down, based on the final determination of
stocks and trade creditors as at 1 March 2001, which figures will be verified
by the company's auditors. It is not anticipated that the audit will result in
a downward adjustment of the purchase price.
The proceeds of the sale will be applied towards retiring related bank
borrowings, which have grown to R338 million as at 28 February 2001. This was
largely as a result of funding the seasonal purchases and settling creditor
balances, which could ultimately result in an increase in the amount received
for CNA, in terms of the purchase price adjustment formula contained on the
sale agreement.
The purchasers of CNA have entered into an 8 year outsource agreement with
Affinity Logic and are in the process of finalising a logistical support
agreement with UPN, the logistical arm of Woolworths.
AFFINITY LOGIC
Affinity Logic's growth in pre-tax profits for the half-year ended 30 September
2000 was in line with expectations. However, Wooltru's share of attributable
earnings is only finally determinable as at 31 March 2001, in accordance with
the provisions of the Datatec profit warranty. Consequently, only the minimum
assessment of attributable earnings has been brought to account as at 31
December 2000.
As a consequence of Wooltru's decision to unbundle, comprehensive outsource
agreements with CNA and Massmart have been renegotiated. Investments in
developing the outsource business have resulted in significant improvements in
service levels.
Revenue from e-commerce consulting services has exceeded expectations,
reflecting the growth of the business beyond the Wooltru group.
Strategic investments in related technology companies have also performed above
expectations.
WOOLTRU PROPERTIES
An increase in the cost of borrowing in order to fund the Kensington
development, together with high repairs and maintenance spent on the investment
portfolio, has resulted in headline earnings, at R7,1 million, being 19,9% less
than last year.
In anticipation of an unbundling of Wooltru, Wooltru Properties has begun a
process of disposing of its portfolio of investment properties, which has a
directors' valuation of R300 million.
Subsequent to 31 December 2000, Woolworths House, which represents one third of
the portfolio, has been sold and negotiations for the disposal of the balance
of the portfolio are underway with several interested institutional investors.
Progress in the redevelopment of the old Kensington Golf Course is encouraging.
Sales of residential and office land are promising and the construction of the
shopping centre on the portion of the site adjacent to Eastgate Regional Mall
has commenced. This development, consisting of 23 000m2 of retail space, is due
for completion by the end of 2001. Anchored by a Pick 'n Pay Superstore, the
centre is already 75% pre-let.
inthebag
The group's business-to-consumer e-commerce venture, undertaken in partnership
with Woolworths, was successfully launched in October 2000. Trading to date has
met expectations. Set-up costs amounted to R38,7 million, as at the end of
December, of which R26,0 million has been expensed.
Wooltru is committed to funding inthebag until June 2001. The success of
inthebag is closely linked to Woolworths and suitable structures are currently
being investigated to secure its long-term future.
WOOLTRU HEAD OFFICE
Wooltru's reduced contribution to group earnings resulted from lower interest
income following the utilisation of available cash reserves in further
investments in group companies and lower interest rates.
The cost of maintaining the existing central corporate structure will be
reduced in the ensuing months and the head office will be scaled down
accordingly. Further savings will result from the elimination of all
expenditure peripheral to the task of unbundling the company.
The management needs of the group going forward have changed fundamentally and
are now directed solely towards the unbundling and release of value to
shareholders through the disposal of other assets. In line with this change in
emphasis, the role of the board will alter and will be much more narrowly
focussed.
Accordingly, Colin Hall, Mair Barnes, Bryan Kent, Thandi Ndlovu, Eddie Parfett
and Richard van Rensburg resigned from the board with effect from the close of
the meeting on 6 March 2001. We thank them for their valued contribution to the
group over the years.
Louise Tager has been appointed chairman of the board. The three board
sub-committees, namely the Remuneration Committee, the Corporate Governance
Committee and the Audit Committee, have been reconstituted.
UPDATE ON PROGRESS WITH THE UNBUNDLING
In order to prepare the group for an unbundling, which is likely to lead to the
final dissolution of Wooltru, certain key issues have first to be resolved.
The disposal of CNA has been implemented, conditional upon formal lodging of
securities for payment of the purchase consideration and approval by the
Competition Authorities.
Further, Wooltru is bound by certain guarantees that were originally put in
place to support lease obligations of Masstores and CNA. Discussions are
underway with the institutional holders of these guarantees in order that they
may be replaced by alternative securities.
Once these impediments to an unbundling have been dealt with, the disposal of
the balance of the unlisted investments can be initiated, provided that the
directors are satisfied that the residual assets remaining within the group
constitute a solvent and liquid entity.
As at 6 March 2001, Wooltru's external borrowings have grown to R550 million.
R338 million is attributable to CNA, R70 million to Topics, R98 million to
Properties and R44 million to inthebag. Besides the listed and unlisted
investments, Wooltru has other assets, represented by recoverable claims upon
third parties, amounting to some R175 million.
While the directors are satisfied that the net amount of these borrowings will
be covered by the proceeds received from the disposal of the unlisted
investments, this process may extend over a period of fifteen months.
Nevertheless, it is not the intention to hold back a distribution of the listed
investments, which may be either complete or partial.
DIVIDEND
The board is committed to a process of complete unbundling. Accordingly, the
directors have resolved to declare no further ordinary dividends, other than
those that will be paid out of the net proceeds received from the realisation
of assets, as part of this process.
PROSPECTS
The value of Wooltru is no longer related to its earning potential, but is a
function of the realisable value of its investments.
The value of the listed assets will be determinable by reference to their share
prices as quoted on the JSE Securities Exchange South Africa. The property
portfolio is expected to realise close to the directors' valuation. The
remainder of the portfolio, namely Topics, the shareholding in Affinity Logic
and inthebag, will be dealt with when appropriate, and shareholders will be
kept informed on progress towards this end. It is not anticipated that any of
these investments will require significant additional funding before being
disposed of.
On behalf of the Board
C A Hall J B Rabb
Non-executive chairman Managing director
6 March 2001
Directorate and administration
Wooltru Limited (Registration number: 1936/008278/06)
Non-executive chairman: c a hall
Directors: M Barnes* (British), B H Kent*, M J Lamberti, D M Lubner*, M S Mark,
C T Ndlovu*, J D Newton, A E Parfett*, J B Rabb, S N Susman, L A Tager*, J C
van der Horst*, R S J van Rensburg
* Non-executive
Company secretary: r j mcwilliams
Registered office: 5 Corporation Street, Cape Town, 8001, South Africa
Postal address: PO Box 671, Cape Town, 8000, South Africa
Website: http://www.wooltru.co.za
Transfer secretaries:
Mercantile Registrars Limited
10th Floor, 11 Diagonal Street, Johannesburg, 2001, South Africa
PO Box 7184, Johannesburg, 2000, South Africa
Transfer Secretaries (Pty) Limited
Shop 12, Kaiserkrone Centre, Post Street Mall, Windhoek, Namibia
PO Box 2401, Windhoek, Namibia
ANALYSIS OF HEADLINE EARNINGS Excluding Sportsgirl and CNA
31 Dec Headline Effective Wooltru's share
earnings holding 2000 1999
Rm % Rm Rm
Wooltru 2000 (5,2) 100 (5,2)
L/Y 5,1 100 5,1
Woolworths group 2000 155,2 45,6 70,8
L/Y 139,5 46,2 64,5
Truworths 2000 103,4 54,0 55,8
International L/Y 86,4 54,7 47,3
Massmart 2000 144,7 40,8 59,1
L/Y 81,9 65,3 53,5
Topics 2000 (11,8) 100 (11,8)
L/Y 6,7 98,5 6,6
Wooltru Properties 2000 7,1 100 7,1
L/Y 8,9 96,6 8,6
Affinity Logic 2000 15,3 38,1 1,8*
L/Y 13,4 41,0 3,5*
inthebag 2000 (26,0) 100 (26,0)
L/Y - - - -
Wooltru group: headline earnings
from continuing operations (Rm) 151,6 189,1
Decrease (20%)
Weighted average number of shares
in issue (millions) 468,8 447,8
Increase 5%
Headline earnings per share from
continuing operations (cents) 32,3 42,3
Decrease (24%)
* Until 31 August 2002 Wooltru's share of Affinity Logic's profit is not in
proportion to its holding due to the provisions of the joint venture agreement.
Wooltru Limited's direct holding in Affinity Logic is 33,3%.
Unaudited Note 14
Six months ended Year ended
31 December 30 June
2000 1999 2000
Restated Restated
Notes Rm Rm Rm
Revenue 2 1 696,9 7 575,2 14 073,5
Continuing operations 1 104,7 6 688,1 12 639,2
Discontinuing operations 592,2 887,1 1 434,3
Cost of sales (838,7) (5 789,1) (10 762,3)
Gross profit 858,2 1 786,1 3 311,2
Continuing operations 590,1 1 363,6 2 635,6
Discontinuing operations 268,1 422,5 675,6
Depreciation (45,1) (84,3) (163,5)
Occupancy costs (147,8) (320,8) (657,2)
Employment costs (271,1) (632,6) (1 228,4)
Other operating costs (248,9) (442,8) (759,5)
Profit from operations 145,3 305,6 502,6
Continuing operations 135,4 309,9 530,7
Discontinuing operations 9,9 (4,3) (28,1)
Finance costs (39,5) (55,4) (123,3)
Continuing operations (24,4) (35,0) (92,5)
Discontinuing operations (15,1) (20,4) (30,8)
Share of associate companies
and joint venture profit 5 132,2 68,4 126,7
Net profit before exceptional items 238,0 318,6 506,0
Exceptional items 4 (186,8) (88,3) 98,8
Continuing operations 58,7 24,4 245,2
Discontinuing operations (245,5) (112,7) (146,4)
Net profit before taxation 51,2 230,3 604,8
Taxation (44,4) (80,2) (125,0)
Continuing operations (43,9) (79,6) (124,0)
Discontinuing operations (0,5) (0,6) (1,0)
Net profit after taxation 6,8 150,1 479,8
Minority interests (51,3) (13,6) (39,6)
Continuing operations (51,3) (72,7) (115,2)
Discontinuing operations - 59,1 75,6
Net (loss)/profit attributable to
ordinary shareholders (44,5) 136,5 440,2
Continuing operations 206,7 215,4 570,9
Discontinuing operations (251,2) (78,9) (130,7)
Number of shares issued (millions) 475,9 454,6 465,4
Weighted average number
of shares (millions) 468,8 447,8 452,9
(Losses)/earnings per share (cents) (9,5) 30,5 97,2
Diluted (losses)/earnings per
share (cents) (9,7) 30,2 96,7
Headline earnings per share (cents) 6 32,2 38,6 55,4
Headline earnings per share from
continuing operations (cents) 6 32,3 42,3 66,3
Dividend per share (cents) - 20,0 37,0
Dividend cover (based on
headline earnings per share) n/a 1,9 1,5
GROUP ANALYSIS
Segment revenue* 1 696,9 7 575,2 14 073,5
Truworths International 826,1 1 021,0 1 707,5
Massmart - 5 652,4 10 648,1
Topics 192,9 195,8 347,2
CNA 591,9 600,4 1 147,4
Properties 24,1 22,3 47,1
Wooltru (includes interest received) 41,1 79,7 140,7
Interest and dividends received
and consolidation adjustments 20,8 3,6 35,5
Segment result** 277,5 374,0 629,3
Truworths International 118,3 77,6 162,2
Massmart - 118,6 158,1
Topics (22,3) 5,1 (1,9)
CNA 9,6 6,7 (15,2)
Properties 15,2 15,3 33,3
Wooltru (includes interest
received and paid) (30,8) 6,7 0,3
Woolworths - associate company 71,5 64,1 123,0
Massmart - associate company 58,8 - -
Affinity Logic - joint venture 1,9 4,3 3,7
Interest and dividends received,
interest paid and consolidation
adjustments 55,3 75,6 165,8
* Excludes interest and dividends received except where indicated.
** Excludes interest and dividends received and interest paid except where
indicated.
Unaudited Note 14
Six months ended Year ended
31 December 30 June
2000 1999 2000
Restated Restated
Notes Rm Rm Rm
Assets
Non-current assets 2 472,5 2 718,8 2 785,3
Property, plant and equipment 596,4 931,7 937,4
Investment in associates 5 & 8 1 505,3 931,6 968,9
Other investments 8 20,4 76,4 74,5
Loans 8 343,7 491,1 523,3
Deferred taxation 6,7 288,0 281,2
Current assets 1 649,0 4 595,8 3 799,4
Inventories 549,4 2 179,2 1 924,0
Debtors 821,3 1 706,6 1 604,0
Bank balances and cash equivalents 278,3 710,0 271,4
Total assets 4 121,5 7 314,6 6 584,7
EQUITY AND LIABILITIES
Equity 2 923,9 2 660,6 3 242,4
Ordinary shareholders' interest 2 538,4 2 268,1 2 584,6
Preference share capital 1,5 1,5 1,5
Minority interests 384,0 391,0 656,3
Non-current liabilities 202,0 529,8 619,9
Long-term liabilities: interest-bearing 0,2 212,0 327,9
Long-term liabilities: interest-free 33,2 146,8 114,4
Deferred taxation 168,6 171,0 177,6
Current liabilities 995,6 4 124,2 2 722,4
Short-term liabilities: interest-bearing 331,5 629,9 35,0
Creditors 611,8 3 397,9 2 602,8
Amount owing to associate and
joint venture 46,8 25,2 23,2
Taxation 5,5 71,2 61,4
Total equity and liabilities 4 121,5 7 314,6 6 584,7
Net asset value per share (cents) 533 499 555
Unaudited Note 14
Six months ended Year ended
31 December 30 June
2000 1999 2000
Restated Restated
Rm Rm Rm
Cash flow from operating activities
Cash flow from trading 81,7 327,4 454,1
Working capital movements (37,4) 76,0 (329,3)
Net investment income 16,2 4,5 65,6
Taxation paid (91,2) (66,6) (124,9)
Dividends paid (49,5) (24,9) (67,6)
Net cash (outflow)/inflow from operations (80,2) 316,4 (2,1)
Cash flow from investing activities
Net investment in property, plant
and equipment (82,9) (142,1) (278,8)
Net investment in subsidiaries and
businesses - (82,9) (83,5)
Net proceeds from loans and other
investments 39,9 39,5 392,0
Settlement of long-term liability:
interest-free (19,0) (18,5) (41,5)
Net cash outflow from investing
activities (62,0) (204,0) (11,8)
Cash flow from financing activities
Shares issued 41,9 77,1 216,0
Long-term borrowings (repaid)/raised (312,6) (88,8) 25,8
Net cash (outflow)/inflow from
financing activities (270,7) (11,7) 241,8
Net (decrease)/increase in cash and
cash equivalents (412,9) 100,7 227,9
Net cash of associate no longer
consolidated 92,5 - -
Net cash inflow/(outflow) on discontinuance 7,2 (108,0) (76,9)
Cash and cash equivalents at beginning
of period 213,2 62,2 62,2
Cash and cash equivalents at end
of period (100,0) 54,9 213,2
Unaudited Note 14
Six months ended Year ended
31 December 30 June
2000 1999 2000
Restated Restated
Rm Rm Rm
Ordinary shareholders' interest 2 584,6 2 106,6 2 106,6
Changes in accounting policies
prior year adjustment - 58,6 58,6
Movements for the period:
Share capital and share premium on
issue of shares 40,7 68,1 115,7
Recognised gains and losses
(Accumulated loss)/retained
profit (159,6) 23,4 169,3
Net (loss)/profit attributable
to ordinary shareholders (44,5) 136,5 440,2
Distribution to ordinary
shareholders (43,6) (20,8) (63,7)
Premium on acquisition and
intangible assets written off - (79,5) (84,6)
Transfer to non-distributable
reserves (71,5) (12,8) (122,6)
Non-distributable reserves 72,7 11,4 134,4
Exchange difference on
translation of foreign entities 1,5 (0,5) 13,3
Sale of land and buildings (0,3) (0,9) (1,5)
Transfer from retained profit 71,5 12,8 122,6
Ordinary shareholders' interest
at end of period 2 538,4 2 268,1 2 584,6
Six months ended Year ended
Dec 2000 Dec 1999 June 2000
Rm Rm Rm
1. The basis of preparation of the financial information complies with South
African Generally Accepted Accounting Practice and the accounting policies used
are consistent with those applicable for the 30 June 2000 financial statements
other than those mentioned in note 7.
2. Revenue (refer note 5)
Sales, royalties and franchise
fees 1 608,8 7 466,4 13 833,1
Interest received 52,9 75,9 162,4
Dividends received 3,8 7,4 12,8
Rental 23,0 22,1 45,3
Other 8,4 3,4 19,9
1 696,9 7 575,2 14 073,5
3. On 1 March 2001, CNA was sold and has therefore been disclosed as a
discontinued operation. An impairment provision of R145,3 million has been made
relative to the proceeds to be received of R150 million. At 31 December 2000
CNA's total assets and liabilities were R438,9 million and R288,9 million
respectively. Refer to the section on CNA for further details.
4. The exceptional items relate to:
Impairment of group investment in
discontinuing operation - CNA (145,3) - -
Termination of IT contract (89,8) - -
Closure of Constantia
Greetings, a division of CNA (33,1) - -
Distribution from discontinuing
operations - Sportsgirl 7,2 - -
Increase in attributable share-
holders' funds on issue of shares
by subsidiaries and associate 136,1 10,1 206,5
Provision for diminution of shares
in share purchase trust (47,5) - -
Unbundling expenses (6,5) - -
Profit on sale of land and buildings 0,2 0,7 1,6
Loss on discontinuing
operations - Sportsgirl - (112,7) (146,4)
Distribution from share purchase
trust - 14,7 14,7
Surplus on sale of Massmart debentures - - 48,2
Restraint of trade - - (8,3)
Other (2,5) (1,7) (3,1)
(181,2) (88,9) 113,2
Share of associate company and joint
venture exceptional items
IT asset write off (5,6) - -
Restructuring costs - - (14,2)
Surplus on disposal of Namibian stores - - 3,6
Write-down of investment - - (4,1)
Surplus on sale of investment - 0,6 0,3
(186,8) (88,3) 98,8
Taxation - - 0,4
Minorities (3,5) 50,9 76,0
(190,3) (37,4) 175,2
5. On 4 July 2000 Massmart listed and changed from being a subsidiary to an
associate. The effect of this is that Massmart is no longer consolidated on a
line by line basis in the income statement and balance sheet, but included in
share of associate companies and joint venture profit in the income statement
and investment in associates in the balance sheet.
Share of associate company and
joint venture profit includes
dividends received from
associate company of 38,3 21,0 36,2
6. Headline earnings per share
are calculated as follows:
Net (loss)/profit attributable to
ordinary shareholders (44,5) 136,5 440,2
Net exceptional items (note 4) 190,3 37,4 (175,2)
Re-inclusion of restructuring
costs exceptional item - - (14,2)
Loss/(profit) on sale of plant
and equipment 5,1 (1,1) 0,2
Headline earnings 150,9 172,8 251,0
Headline earnings per share (cents) 32,2 38,6 55,4
Headline earnings per share from
continuing operations are
calculated as follows:
Headline earnings 150,9 172,8 251,0
Headline losses from discontinuing
operations 0,7 16,3 49,1
Headline earnings from
continuing operations 151,6 189,1 300,1
Headline earnings per share
from continuing operations
(cents) 32,3 42,3 66,3
7. In order to comply with AC 130 - Provisions, Contingent Liabilities and
Assets, the group changed its accounting policies with regard to leave pay to
one of full provision and for dividends, and the related secondary tax on
companies, to recording them in the period in which they are declared, rather
than in the period for which the dividend is recommended. An associate changed
the basis of valuing a trademark. This resulted in the balance sheet value for
deferred tax and the corresponding non-distributable reserve being restated.
The changes in accounting policies have been accounted for retrospectively and
accordingly a prior year adjustment has been processed and comparative figures
restated. The effects are as follows:
Effect on opening shareholders' interest:
Opening retained profit as
previously reported 428,0 428,0
Changes in accounting policies:
- leave pay (16,5) (16,5)
- dividends and related STC 34,1 34,1
- deferred tax 6,3 6,3
451,9 451,9
Minorities 1,6 1,6
Opening retained profit as restated 453,5 453,5
Non-distributable reserve as
previously reported 553,0 553,0
Changes in accounting policy:
- deferred tax 33,1 33,1
Non-distributable reserve as restated 586,1 586,1
Current and comparative period profit effects:
Changes in accounting policies:
- leave pay 1,3 1,0 -
- dividends and related STC 1,7 (0,2) (0,1)
Consequential impact on
exceptional items - - (7,1)
Net increase/(decrease)
in profits 3,0 0,8 (7,2)
8. Investment in associates and other
investments include:
listed investments of 1 508,8 945,1 982,5
with a market value of 3 184,4 1 664,8 1 422,6
and unlisted investments of 16,9 62,9 60,9
which the directors value at 241,9 99,3 289,2
9. Commitments in respect of
capital expenditure:
approved by directors 47,1 52,7 215,2
contracted for 2,6 4,2 1,7
10. In terms of the Articles of Association,
the borrowings of the group
are limited to 2 399,0 2 127,8 2 444,9
At the period end borrowings
were 331,7 737,3 362,9
Total facilities were 2 708,9 2 485,1 2 626,7
11. The group leases the majority of its land and buildings and a small amount
of equipment under operating leases. The lease agreements of certain of the
group's store and related premises provide for a minimum annual rental payment
and additional payments determined on the basis of turnover. At the period end
the group's future minimum operating lease commitments were as follows:
Expiring within one year 289,9 407,9 559,9
Expiring between two and
five years 848,0 1 811,7 2 404,9
Expiring after five years 1 278,9 5 002,3 4 778,0
Contingent liabilities
amount to 1 959,2 3,7 -
The Massmart promissory notes are reflected under the above leases for June
2000 and December 1999 and in contingent liabilities for December 2000.
12. Other than for Massmart there is no material seasonal variation between
trading for the first six months and the second six months. It is anticipated
that the traditional seasonality of Massmart's business will result in lower
earnings in the second six months.
13. Certain comparative figures have been regrouped and restated.
14. The previously reported 30 June 2000 figures were audited. These restated
figures arise from the change in accounting policy set out in note 7 and such
restatements have not been audited or reviewed by the group's independent
auditors.
