| Tue 21 Aug 2001, 0:00 | | Shoprite Holdings Limited - Profit Announcement Fo |
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JUNE 2001
Shoprite Holdings Limited
Registration Number 1936/007721/06
(SHP) (ISIN: ZAE000012084)
Profit Announcement for the 12 months ended 30 June 2001
Headline earnings growth: 27,5%
Number of outlets: 573
Consolidated Income Statement
Audited Audited
12 months to % 12 months to
RO000 30/06/01 Change 30/06/00
Revenue 19 596 729 6,3 18 430 568
Operating profit before
exceptional items 414 846 27,3 325 801
Exceptional items (74 658) 46 412
Operating profit after
exceptional items 340 188 (8,6) 372 213
Investment income 29 537 84 891
Finance charges 25 003 65 192
Profit before taxation 344 722 (12,0) 391 912
Taxation 100 754 11,2 90 616
Profit after taxation 243 968 (19,0) 301 296
Outside shareholders'
interest 3 196 7 370
Net profit 240 772 (18,1) 293 926
Headline earnings per
share (cents) 58,0 27,5 45,5
Earnings per share (cents)
after
EEexceptional items 44,3 (18,1) 54,1
Distribution to
shareholders
(cents per share) 20,5 13,9 18,0
Dividend cover (times) 2,8 2,5
Number of ordinary shares
(`000)
used for calculation
of earnings
per share 543 479 543 479
Consolidated Balance Sheet
Audited Audited
RO000 30/06/01 30/06/00
Non-current assets 1 534 273 1 377 347
Property, plant and equipment 1 437 137 1 294 358
Investments 88 174 82 841
Deferred tax assets 381 319 437 819
Intangible assets (372 357) (437 671)
Current assets 4 535 798 3 766 049
Inventories 2 160 958 2 108 873
Trade and other receivables 1 413 020 1 120 282
Cash and cash equivalents 961 820 536 894
Total assets 6 070 071 5 143 396
Ordinary shareholdersO funds 1 422 650 1 293 015
Outside shareholdersO interest 41 630 31 777
Non-current liabilities 320 297 387 512
Interest-bearing borrowings 2 450 18 858
Provisions 313 365 364 947
Deferred tax liabilities 4 482 3 707
Current liabilities 4 285 494 3 431 092
Current portion of borrowings 17 374 47 651
Other current liabilities 4 268 120 3 383 441
Total equity and liabilities 6 070 071 5 143 396
Consolidated Cash Flow Statement
Audited Audited
12 months to 12 months to
RO000 30/06/01 30/06/00
Cash generated by operations 1 016 767 689 402
Net investment income 4 319 15 904
Dividends received 215 3 795
Dividends paid (102 071) (83 012)
Cash flow from operating activities 919 230 626 089
Cash flows from investing activities (461 483) (562 867)
Purchase of property, plant and
equipment (475 192) (402 546)
Acquisition of subsidiaryEDEnet of
EEcash acquired (19 994) -
Other investment activities 33 703 (160 321)
Net cash flow 457 747 63 222
Cash flows from financing activities (46 522) (57 092)
Proceeds on share issue 277 -
Payment of capital element of
EElong-term borrowings (46 799) (57 092)
Movement in cash and cash
equivalents 411 225 6 130
Acquired through acquisition
of subsidiary 13 701 -
Net movement in cash and cash
equivalents 424 926 6 130
Segment Information
Audited Audited
12 months to 12 months to
RO000 30/06/01 30/06/00
REVENUEEDEby business segment
-ESupermarkets 19 000 529 17 976 750
-EFurniture 596 200 453 818
Total revenue 19 596 729 18 430 568
OPERATING PROFITEDEby business segment
-ESupermarkets 369 326 288 318
-EFurniture 45 520 37 483
Total operating profit 414 846 325 801
Consolidated Statement of Changes in Equity
Audited Audited
12 months to 12 months to
RO000 30/06/01 30/06/00
Balance at 1 July 1 293 015 1 092 100
Issue of shares by the company 277 -
Movement in foreign currency
EEtranslation reserve - 4 815
Net profit for the year 240 772 293 926
Dividends distributed to shareholders (111 414) (97 826)
Balance at 30 June 1 422 650 1 293 015
Supplementary Information
Audited Audited
12 months to 12 months to
RO000 30/06/01 30/06/00
1. Depreciation for the year 278 197 229 691
2. Dividends received (included in
EEinvestment income) 215 3 795
3. Capital expenditure for the year 475 192 402 546
30/06/01 30/06/00
4. Capital commitments 126 446 109 219
5. Investments:
unlisted DEat carrying value and
directorsO valuation 88 174 79 570
listed DEat cost - 3 271
DEat market value - 6 998
6. Contingent liabilities 520 859 502 645
7. Net asset value per share (cents) 262 238
Comments on the Results
1. In the year under review Shoprite increased revenue by 6.3% to R19,597
billion despite the fact that expenditure by consumers in the lower income
groups decreased. Under-performing stores were scaled down or closed in our
endeavour to achieve acceptable returns.
2. Operating profit of R414,8 million was achieved, representing an increase
of 27.3% as compared with the previous year. This increase was due to better
utilisation of available space, efficient cost control, and a further
reduction in stock shrinkage.
3. Exceptional items comprise mainly the following:
* The amortisation of negative goodwill in terms of the groupOs new
accounting policy (see below), as already announced in the December 2000
results, which amounted to R65,3 million for the period under review; and
* A provision of R127,4 million for the possible irrecoverability of
participation loans in the groupOs Share Incentive Scheme. In view of the
current volatility of share prices and the poor rating of retail shares in
particular, the suitability of this scheme as an incentive mechanism for
staff is being reconsidered.
4. As from the end of the 2000 financial year the Share Incentive Scheme has
been financed by outside institutions. Consequently the composition of the
net financing income as compared with the previous year has changed.
5. Taxation includes an amount of R57,2 million (2000: R66,4 million),
mainly representing the amortisation of the deferred tax asset. The tax
actually payable is mainly secondary tax on companies (STC) and tax payable
by partnership ventures in the group.
6. The dispute between the group and SAB regarding the purchase of OK
Bazaars has not yet been settled.
Prospects
As a result of the composition of ShopriteOs client base the group is well
positioned to benefit from an improvement in the economic climate.
Dividend
The Board has declared a final dividend of 11 cents, bringing the total
distribution for the year to 20,5 cents per share (2000: 18 cents).The final
dividend will be payable on 21 September 2001 to shareholders registered in
the companyOs register of share-holders at the close of business on 7
September 2001.
Accountability
The accounting policies used in preparing the annual financial statements is
in accordance with that for the year ended 30 June 2000, except in the case
of the undermentioned, and conform with the Statements of Generally Accepted
Accounting Practice in South Africa.
The group has changed its accounting policy and now brings to account
negative goodwill and deferred tax assets. The comparative figures have been
restated to reflect the effect of the change. This change has no effect on
the net profit attributable to ordinary shareholders, but only on the
calculation of head-line earnings.
By order of the Board
C H Wiese
Chairman
J W Basson
Managing director
