| Mon 14 May 2001, 0:00 | | Wetherlys Investment Holdings Limited - Audited An |
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WETHERLYS INVESTMENT HOLDINGS LIMIT
Registration No. 1996/016455/06)
AUDITED ANNUAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2001
* TURNOVER UP 22.6%
* OPERATING INCOME UP 34.1%
* HEADLINE EPS UP 21.1%
SUMMARISED GROUP BALANCE SHEET
Audited Audited
12 Months 12
ended Months
28 Feb ended
2001 29 Feb
R'000 2000
R'000
ASSETS
Fixed assets 66 488 36 381
Deferred taxation 3 430 2 557
Loan to share trust 4 000 4 000
Investments 45 890 16 848
Current assets 79 871 97 513
Inventory 46 548 37 421
Accounts receivable 8 816 7 910
Bank balances 24 507 52 182
TOTAL ASSETS 199 679 157 299
EQUITY AND LIABILITIES
Shareholders' funds 153 298 119 834
Non-current liabilities 13 153 4 839
Current liabilities 33 228 32 626
Accounts payable 28 427 25 046
Short term portion of 560 -
long term liabilities
Taxation payable 3 216 1 263
Bank overdraft 1 022 -
Shareholders for 3 6 317
dividends
TOTAL EQUITY AND 199 679 157 299
LIABILITIES
Total capital employed 153 298 119 834
Net asset value per share 121.1 94.9
(cents)
SUMMARISED GROUP INCOME STATEMENT
Audited Audited
12 Months 12
ended Months
28 Feb ended
2001 29 Feb
R'000 2000
R'000
Turnover 220 644 179 943
Operating income 44 974 33 538
- Operational income
before depreciation, net
interest.
- Depreciation (2 497) (1 802)
- Net interest income 4 515 6 470
- Investment income 5 028 6 756
- Interest paid (513) (286)
Net income before 46 992 38 206
taxation
Taxation (14 352) (11 308)
Net income attributable 32 640 26 898
to ordinary shareholders
Number of shares in issue 126.6 126.3
(m)
Weighted average number 126.5 126.3
of shares (m)
Earnings per share 25.8 21.3
(cents)
Headline earnings -
32 640
Net income attributable 32 640 26 898
to ordinary shareholders
Headline earnings per 25.8 21.3
share (cents)
Ordinary dividends - 6 315
declared (R'000)
Dividends per share - 5
(cents)
CAPITAL EXPENDITURE
APPROVED AND CONTRACTED - 4 000
FOR
STATEMENT OF CHANGES IN EQUITY
Audited Audited
12 Months 12
ended Months
28 Feb ended
2001 29 Feb
R'000 2000
R'000
Balance at beginning of 119 834 99 251
the year
Attributable profit 32 640 26 898
Proceeds of share issue 824 -
Ordinary dividend - (6 315)
declared
Balance at the end of the 153 298 119 834
year
ABRIDGED GROUP CASH FLOW STATEMENT
Audited Audited
12 Months 12
ended Months
28 Feb ended
2001 29 Feb
R'000 2000
R'000
Cash generated from 42 638 39 595
operations
Net interest income 4 515 6 470
Net dividends (6 314) (4 348)
received/(paid)
Taxation paid (12 400) (17 616)
Cash flows from operating 28 439 24 101
activities
Cash flows from investing (66 276) (21 028)
activities
Cash flows from financing 9 140 2 185
activities
Net increase/decrease in (28 698) 5 258
cash
Bank balances at beginning 52 182 46 924
of year
Bank balances at end of the 23 485 52 182
year
1. REVIEW OF RESULTS AND TRADING ENVIRONMENT
The group demonstrated its resilience by generating growth in excess of 20%
in both the turnover and operating profit levels. Warehouses in all regions
traded in line with expectations and Roodefurn, the manufacturing
subsidiary, reported results above expectation. It is encouraging to note
that positive trading patterns were experienced in both January and February
2001, and the perpetuation thereof into the first quarter of the new
financial year bodes well for continued growth.
Turnover for the 12 months increased 22.6% to R220.7M (2000:R179.9M) with
headline earnings per share increasing by 21.1% to 25.8 cents (2000:21.3
cents). The dividend has increased by 20% to 6.0 cents (2000: 5.0 cents).
The increase in turnover is predominantly organic as all Wetherlys'
warehouses were operational for the full period under review and the new
Osiers warehouse opened late in the 2000 calendar year. Cost containment
remained a key focus of the Group, with the cost to turnover ratio being
well maintained.
Cash generated from operating activities remains positive and the cash
balances have remained in tact. This despite the extensive investment in the
Cape Town life style centre and the completion of the Kya Sands development
which houses the new Osiers warehouse and the national distribution centre,
which to date have been funded internally. The funding for these projects
will be finalised shortly. The increase in the inventory levels experienced
in the late part of the year were largely due to the stocking of the two new
Osiers stores as well as the relocation of the Cape Town warehouse to larger
premises.
Operating margins have increased from 18.6% to 20.4% which is a direct
result of stringent cost containment and groups ability to preserve margins.
This increase is a positive sign given the tighter trading environment that
prevailed in the second half of the year.
2 STRATEGIC DEVELOPMENTS
The year under review was a watershed year for the Group in that a number of
significant initiatives were embarked upon, the success of which will lay
the foundation for future growth.
The new cane and linen division, Osiers, opened its first store in November
2000 at the Kya Sands location. Osiers offers a comprehensive range of both
indoor and outdoor quality cane products, supplemented by a wide range of
linen and household decorative smalls. Wetherlys' strategic objective of
creating a one stop destination lifestyle experience has commenced. Based on
the initial reaction and trading patterns exhibited to date, the concept
should prove to be a meaningful contributor to both turnover and profits,
with scope to widen the product offering.
The combination of the Osiers acquisition and the strong growth experienced
in the Cape Town warehouse prompted the acquisition and development of a 24
000 square meter lifestyle centre in Woodstock, Cape Town The Palms
lifestyle centre , as it has been named, opened in May 2001 and marks the
commencement of an innovative and exciting lifestyle venture.
The centre houses the new 7,000 m2 Wetherlys warehouse, as well as the 2,500
m2 Osiers warehouse. A variety of complementary lifestyle retailers will
also be tenanted in the centre which features an Italian styled piazza
complete with gourmet delicatessen and coffee shop. In addition, an
underground wine cellar representing most of the boutique local wineries as
well as famous names in French Champagne will be on offer, making a trip to
the centre more than just an exercise in furniture shopping.
The development includes a 350 parking bay facility which will cater for the
expected demand. It is encouraging to note that besides the lifestyle
tenants, very good demand has been received for office space in the centre.
We believe that the development will act as the catalyst for the revamp and
upgrade of the Woodstock area. Evidence of this fact is already being
witnessed in the form of new leases and parking developments all in the
close vicinity.
The Cape Town lifestyle concept will be extended next to the Kwa Zulu Natal
region in August 2001 when the third Osiers warehouse will be constructed
above the existing Wetherlys warehouse.
Plans are also being assessed for the next phase of the Kya Sands
development which will include the introduction of complementary lifestyle
tenants as well as a gourmet delicatessen and wine bar.
Plans for the Nelspruit region are in progress which include both a
Wetherlys and an Osiers warehouse. It is anticipated that the Nelspruit
initiative will be trading in the first quarter of the next calendar year.
The organic growth strategy will continue to see Wetherlys warehouses
constructed in lucrative regions where we are not presently represented. The
strategy for the roll out of the Osiers warehouses is to firstly construct
warehouses attached or adjacent to existing Wetherlys locations. The nature
of the Osiers product and brand does however lend itself to stand alone
locations in busy retail nodes and the viability thereof is presently being
researched.
Negotiations are well advanced, which if successful will enable the group to
tap into lucrative databases to which Wetherlys and Osiers product can be
marketed. The concept involves a financial institution offering a financial
package to selected clients within their database, thus facilitating a
purchase within the group. With no additional credit risk or negative cash
flow implications, it is anticipated that the initiative could add
meaningfully to sales and profits.
Against the backdrop of the large scale expansion undertaken this year and
planned thereafter, much time, effort and energy has been expended in
instilling the Wetherlys culture and ethos in all new and existing staff
members.
Much activity has occurred this past year which we believe has resulted in a
group well poised for continued demand and growth.
I would like to take this opportunity to thank my board, all staff members,
suppliers and customers for your invaluable support and effort over the past
year.
3. DIVIDEND POLICY
The Board of Directors has declared a final dividend of 6,0 cents per share
in respect of the 12 months ended 28 February 2001.
4. DIVIDEND DECLARATION
Notice is hereby given that a final dividend of 6,0 cents per share has been
declared payable on 06 July 2001 to shareholders registered in the books of
the company at the close of business on 01 June 2001.
For and on behalf of the board
NWG Davies, Chairman DG Jacobson CA(SA)
Chairman Group Secretary
15 May 2001
EXECUTIVE DIRECTORS:
NWG DAVIES, JA SMITH, SJF DAVIES, BD VAN DER MERWE, DG JACOBSON, AM MORGAN,
JW ASHTON
REGISTERED OFFICE: CNR. HANS STRYDOM DRIVE & PRECISION ROAD, KYA SANDS,
RANDBURG
TRANSFER SECRETARIES: MERCANTILE REGISTRARS LIMITED, 11 DIAGONAL STREET,
P.O. BOX 1053, JOHANNESBURG, 2000
