| Tue 15 May 2001, 0:00 | | Steers Holdings Preliminary Results |
|
Audited group results for the year ended 28 February 2001
The success of Steers Holdings reverberates through 453 Steers,
Debonairs Pizza and FishAways outlets
on the african continent
Steers Holdings
Steers Holdings Limited (Incorporated in the Republic of South Africa)
(Registration number 1969/004875/06) ("the Company")
CONSOLIDATED INCOME STATEMENT
February February
2001 2000 %
R000 R000 change
Gross revenue 235 534 23770 (1%)
Operating profit 24 842 25 146 (1%)
Net interest paid (740) (1 473)
Net income before
Taxation 24 102 23 673 2%
Taxation (10 124) (8 585)
Net income after
Taxation 13 978 15 088 (7%)
Attributable to
minority shareholders 139
Attributable profit 14 117 15 207 (7%)
Weighted average number
of shares in issue 62 625 933 62 247 696
Operating margin 10,5% 10,6% -
Earnings per share -
cents 22,5 24,4 (8%)
Headline earnings per
share - cents 25,0 23,5 6%
Dividends per share -
cents 13,0 12,0 8%
CONSOLIDATED BALANCE SHEET
February February
2001 2000
R000 R000
ASSETS
Non-current assets 51 837 55 706
Tangible fixed assets 13 934 16 681
Intangible fixed assets 30 926 32 601
Loans 6 977 6 424
Current assets 62 532 61 548
Inventory 18 185 14 169
Trade and other receivables 31 931 31 717
Bank balances and cash 12 416 15 662
Total assets 114 369 117 254
EQUITY AND LIABILITIES
Share capital and reserves 63 965 57 645
Ordinary shareholders'
interest 63 821 56 984
Minority shareholders'
Interest 144 661
Non-current liabilities 4 761 10 536
Interest-bearing borrowings 4 693 9 568
Deferred taxation 68 968
Current liabilities 45 643 49 073
Trade and other payables 24 838 23 102
Shareholders for dividend 5 082 4 748
Taxation 5 460 2 509
Bank overdraft 10 263 18 714
Total equity and liabilities 114 369 117 254
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
February February
2001 2000
R000 R000
Balance at beginning of period 57 463 49 236
Change in accounting policies (479) (404)
Restated balance 56 984 48 832
Net gains not recognised in
the income
statement - currency translation
differences 773 171
Attributable profit 14 117 15 207
Dividends (8 147) (7 485)
Net movement in share capital 94 259
Ordinary shareholders' interest 63 821 56 984
CONSOLIDATED CASH FLOW STATEMENT
February February
2001 2000 %
R000 R000 change
Net cash flow from operating
activities 13 335 10 151 31%
Cash generated by operations 29 961 24 339
Net interest paid (740) (1 473)
Taxation paid (8 073) (6 536)
Dividends paid (7 813) (6 179)
Net cash flow from investing
activities (2 744) (1 801)
Expended on non-current assets (4 505) (9 082)
Proceeds from disposal of
non-current assets 1 761 7 281
Net cash flow from financing
activities (5 386) (9 196)
Decrease in share capital and
reserves (239) (873)
Decrease in interest-bearing
borrowings (5 147) (8 323)
Change in cash and cash equivalents 5 205 (846)
Cash and cash equivalents at
beginning of year (3 052) (2 206)
Cash and cash equivalents at
end of year 2 153 (3 052)
OVERVIEW
During the year under review the Group experienced some of its toughest
trading conditions since its listing on the JSE Securities Exchange SA in
1994. Low consumer confidence and heightened competition for the consumer1s
Rand from sources such as cellular phones, the national lottery, casinos, as
well as the increased price of petrol, resulted in flat levels of consumer
spending at store level. Despite this, our Steers and Debonairs Pizza brands
retained their respective leadership positions.
FINANCIAL RESULTS
During the year under review the Group grew headline earnings per share by
6% from 23,5 cents to 25,0 cents. Gross revenue remained relatively constant
at R235 million, mainly as a result of lower volumes from the Store
Development and Group-owned outlets business units. Dividends proposed for
the year increased by 8% from 12 cents per share to 13 cents per share. Net
cash flow from operating activities increased by 31% from R10,1 million to
R13,3 million.
ACQUISITIONS AND DISPOSALS
The Group acquired the remaining 49% of FishAways (Pty) Ltd from the
minority shareholder during the reporting period. The primary reason for
this acquisition was to achieve sole control over the development of this
important brand. Four Group-owned outlets were also disposed of during the
year, bringing the total number of outlets owned by the Group down to 4.
DIVISIONAL RESULTS
The Franchising Division achieved a 3% increase in gross revenue across all
business units. This lower than expected increase is mainly attributable to
the decrease in gross revenue reported by the Group-owned outlets business
unit, arising from the strategic decision taken by management in previous
years to dispose of these outlets to suitable franchisees. The increased
competition for the consumer1s Rand, as detailed above, further impacted on
the growth experienced by the division.
The Manufacturing and Distribution Division recorded a 2% decline in gross
revenue during the year under review. The main reason for this decline was
the decrease in gross revenue reported by the Store Development business
unit. The Wholesale, Pouyoukas Foods and Steers Retail Products business
units collectively reported a 9,5% increase in gross revenue.
Gross revenue
2001 2000 Growth
R000 R000 %
Franchising 48 238 46 801 3
Manufacturing and Distribution 186 049 190 774 (2)
Corporate Services 1 247 195 +100
Total 235 534 237 770 (1)
Operating profit
2001 2000 Growth
R000 R000 %
Franchising 7 755 7 538 3
Manufacturing and Distribution 16 721 16 015 4
Corporate Services 486 1 947 (75)
Eliminations (120) (354) -
Total 24 842 25 146 (1)
FRANCHISING
Outlets in operation as at 28 February 2001
South Africa Rest of Africa Total
Steers 270 35 305
Debonairs Pizza 126 15 141
FishAways 7 0 7
Total 403 50 453
Steers
The year under review has seen Steers operating in a weak economy amid
fierce competition. Despite this and some rationalisation of the store
network, 30 new stores were opened during the year. Overall in-store
turnover grew by 8,3%. Steers plans to add a further 22 stores to its
existing network in the year ahead.
Debonairs Pizza
While the number of competitors in the pizza home delivery market continues
to grow, Debonairs Pizza has maintained its leadership position in the
branded pizza market. During the year under review, 22 new stores were
opened, and in-store turnover increased by 33%. Of the 22 new stores we
anticipate opening in the year ahead, 6 will be 3Dash-In} stores, the new
concept launched in April of this year.
FishAways
Whilst changes to FishAways ownership and management were being implemented
and the brand1s positioning and concept finalised, a decision was taken to
defer new store openings. Accordingly only 7 new stores were opened during
the year. During the coming year, FishAways plans to add a further 15 new
stores to its existing network.
International
The Group1s International Franchising business unit was proud to open its
50th outlet outside of South Africa during the year under review. This,
together with the establishment of an extended management structure, places
the business unit on a firm foundation from which to open the targeted 12
new stores in the coming year.
Group-owned stores
In line with the Group1s policy of reducing its portfolio of Group-owned
stores, 4 stores were disposed of to suitable franchisees during the year
under review. Of the remaining 4 stores, 1 will be retained for new product
development and the balance will be sold off in the coming year.
MANUFACTURING AND DISTRIBUTION
Wholesale
The Wholesale business unit1s gross revenue increased by 10% in the year
under review, in line with in-store growth in the Franchising Division.
Supporting our network of franchisees with the supply of superior quality
product at competitive prices is key to the success of the individual brands
within the Steers family. The installation of a food laboratory on our
premises to be run by a full time food technologist is further evidence of
the business unit1s dedication to meeting the demands of its customers.
This, together with the organic growth forecast by the Franchise Division,
promises to result in an exciting year for the Wholesale business unit.
Steers Retail Products
The Steers Retail Products business unit showed strong gross revenue growth
of 16% in the year under review. In addition to increasing our market share
of pourable mustards and salad dressings, several new products, aimed at
tightly niched markets, were launched during the year. This business unit is
well poised to maintain its excellent historical growth rate in the year
ahead.
Pouyoukas Foods
During the year under review Pouyoukas Foods1 gross revenue decreased by 6%,
mainly due to an internal product rationalisation programme. Tight control
over the manufacturing process and overhead costs resulted in the business
unit reporting substantial growth in profitability. Management is confident
that this will be maintained in the coming year.
CHANGE IN ACCOUNTING POLICIES
During the year under review the Group changed its accounting policies in
order to bring them in line with generally accepted accounting practice and
to improve the quality of the financial information. As a result, the Group
now:
* accounts for franchise fees on the accrual basis, with the time of the
accrual being when the fees fall due for payment,
* accounts for joining fees on the accrual basis, with the time of the
accrual being when a new store opens for trading,
* accounts for leave pay as and when it accrues to the employees,
* does not include advertising levies as part of gross revenue.
EVENTS SUBSEQUENT TO YEAR-END
Subsequent to year-end, the decision was taken by management to dispose of
the Store Development business unit so as to allow the Group to focus purely
on its core activities, namely that of Franchising and Manufacturing and
Distribution. Negotiations for the disposal of the business unit are at an
advanced stage and an agreement should be concluded shortly.
Dematerialisation of shares
Steers was selected by the JSE Securities Exchange SA to transfer its share
capital to the 3STRATE} (Share Transactions Totally Electronic) environment
with effect from 30 April 2001. Trading for electronic settlement will begin
on 28 May 2001. From this date, shareholders will not be able to sell their
shares in Steers unless they exist in electronic form in the STRATE
environment.
PROSPECTS
The Group remains intent on maintaining its position as the leading fast
food marketer and developer on the African continent. The Board is
cautiously confident that, through a balanced combination of new stores and
organic growth in retail turnover throughout Africa, it will again be able
to report positive earnings growth in the coming financial year.
DIVIDENDS
Notice is hereby given that a final dividend (number 17) of 8 cents per
ordinary share has been proposed by the directors. The dividend will be
payable to all shareholders registered in the books of the Company at the
close of business on 8 June 2001. The dividend will be payable on or about
15 June 2001.
On behalf of the Board
P Halamandaris T Halamandaris
Chairman Chief Executive Officer
15 May 2001
Registered office 478 James Crescent Midrand 1685 PO Box 2884 Halfway
House 1685
E-mail investorrelations@steers.co.za Website www.steersholdings.co.za
Transfer secretaries Ultra Registrars (Pty) Ltd (registration no
2000/007239/07)
11 Diagonal Street Johannesburg PO Box 15610 Woodmead 3610
Available on SENS
Directors P Halamandaris (Chairman) T Halamandaris (Chief Executive
Officer) KA Hedderwick JL Halamandres* HR Levin* P Halamandaris (jnr)*
* Non-executive
STEERS HOLDINGS LIMITED - PRESS RELEASE
STEERS HOLDINGS ANNOUNCES ANNUAL RESULTS
Steers Holdings Limited today announced its audited results for the year
ended 28 February 2001. The fast food franchising group showed a 6% increase
in headline earnings per share and an 8% increase in dividends per share. A
31% increase in cash flow from operations was also reported for the period.
In light of the significant shift in consumer spending towards new
industries during the period, Kevin Hedderwick, Chief Operating Officer:
Franchising, described the Group's performance as satisfactory. "Amid some
of the toughest trading conditions since the Group listed on the JSE in
1994, both Steers and Debonairs Pizza retained their leadership positions in
their respective markets. The lower than expected results were primarily due
to depressed consumer spending and confidence," he said.
At 28 February 2001, the Group had a network of 453 franchised fast food
outlets throughout Africa, of which 449 were owned by franchisees and four
by the Group. Steers Holdings reached a milestone in Africa during the
period, opening its 50th outlet beyond South Africa's borders.
In line with Steers Holdings' policy of reducing the number of Group-owned
stores, four such stores were sold to franchisees during the financial year.
By year-end, Steers Holdings had opened 69 new stores for the year, after
reporting some delays in new store openings at the half-year stage. During
the period under review, FishAways became a wholly-owned subsidiary of the
Group. Changes in accounting policies were implemented during the period to
bring them in line with generally accepted accounting practice and to
improve the quality of the financial information. Subsequent to year-end, a
decision was taken to dispose of the Store Development business unit in
order to provide greater focus on the Group's core activities.
Hedderwick is cautiously confident that Steers Holdings will be able to
report positive earnings growth in the coming financial year. "We are
pleased that despite the difficulties experienced, our leading brands have
maintained their status as "best in their class". We believe that the Group
is well placed to take advantage of any upturn in economic conditions and
consumer spending in the year ahead," he said.
Steers Holdings is the leading South African fast food franchisor. The
Group's brands include Steers, Debonairs Pizza and FishAways
Written and distributed by : Arcay Financial Communications
On behalf of : Steers Holdings Limited
Further information : Gayle Barbour-Rodrigues
Tel : 27 11 480 8573
Fax : 27 11 480 8556
Cell : 083 307 6484
e-mail : barbg@arcay.co.za
