| Fri 31 Aug 2001, 0:00 | | The House Of Busby - Audited Results For The Year |
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The House of Busby Limited
Incorporated in the Republic of South Africa
Registration number 1997/009173/06
Share code: BSB ISIN code: ZAE000013637
AUDITED RESULTS
for the year ended 30 June 2001
GROUP INCOME STATEMENT
Year ended Year ended
30 June 30 June
2001 2000
Audited Percentage Audited
R'000 change R'000
Turnover 371 540 78 209 075
Continuing operations 281 845 35 209 075
Discontinued operations 89 695 -
Operating income 24 872 (16) 29 723
Continuing operations 23 414 (21) 29 723
Discontinued operations 1 458 -
Net investment (cost)/income (414) (108) 5 053
Continuing operations 4 140 (18) 5 053
Discontinued operations (4 554) -
Profit on disposal of listed investment 3 130
27 588 (21) 34 776
Attributable to outside shareholders 3 254 718
Continuing operations 2 016 718
Discontinued operations 1 238 -
30 842 (13) 35 494
Taxation 4 472 5 384
Net income after tax 26 370 (12) 30 110
Continuing operations 28 228 (6) 30 110
Discontinued operations (1 858) - (8 701)
Exceptional item - value retail
distribution division (6 214) -
Loss on discontinuance of
clothing divisions (2 487) -
17 669 (41) 30 110
weighted average number of shares
('000) 76 586 74 886
headline earnings ('000) 23 240 (23) 30 110
headline earnings per share (cents) 30,3 (25) 40,2
earnings (R'000) 17 669 (41) 30 110
earnings per share (cents) 23,1 (43) 40,2
RECONCILIATION OF HEADLINE EARNINGS (R'000)
Earnings per income statement 17 669
Add: Exceptional item value retail
distribution division 6 214
Loss on discontinuance
of clothing divisions 2 487
26 370
Deduct: Profit on disposal of
listed investment (3 130)
Headline earnings 23 240
GROUP BALANCE SHEET
30 June 30 June
2001 2000
Audited Audited
R'000 R'000
Assets
Non-current assets 75 682 103 529
Property plant and equipment 33 553 27 114
Intangible assets 2 898 3 220
Investments and non-current receivables 28 512 60 689
Deferred tax 10 719 12 506
Current assets 172 089 152 597
Inventory 88 796 72 933
Receivables 74 348 50 486
Cash and cash equivalents 8 945 29 178
Total assets 247 771 256 126
Equity and liabilities
Shareholders funds 212 842 199 332
Long-term liabilities 34 19 731
Current liabilities 34 895 37 063
Total equity and liabilities 247 771 256 126
Tangible net asset value
per share (cents) 275,9 260,5
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2001
Distri- Accu-
Share Share butable mulated
capital premium reserve Profit Total
R000 R000 R000 R000 R000
Balance at 30 June 1999 75 188 114 1 209 34 944 224 342
Share capital issued 1 634 1 634
Writing-off of intangibe assets (65 305) 14 153 (51 152)
Dividends paid (5 602) (5 602)
Net profit attributable
to ordinary shareholders 30 110 30 110
Balance at 30 June 2000 75 124 443 15 362 59 452 199 332
Share capital issued 1 2 730 2 731
Dividends paid (6 890) (6 890)
Net profit attributable to
ordinary shareholders 17 669 17 669
Balance at 30 June 2001 76 127 173 15 362 70 231 212 842
ABRIDGED CASH FLOW STATEMENT
Year ended Year ended
30 June 30 June
2001 2000
Audited Audited
R'000 R'000
Cash generated from operations 11 939 18 749
Investment (cost)income (414) 5 053
Dividends paid (6 890) (5 602)
Taxation paid (3 057) (6 654)
Cash flow from operating activities 1 578 11 546
Cash outflow from investing activities (4 844) (48 523)
Cash outflows from financing activities (16 966) (8 655)
Decrease in cash and cash equivalents (20 232) (45 632)
Cash and cash equivalents at
beginning of year 29 177 74 809
Cash and cash equivalents at
end of year 8 945 29 177
COMMENTS
Earnings
The earnings of the Group for the year ended 30 June 2001 reflect the result
of tough trading conditions experienced over the past financial year, and
particularly in the second six months of the year under review.
Turnover increased by 78% over the previous financial year. Comprising,
43% that came from the value retail distribution business, which was started
during the current financial year. The remaining 35% growth in turnover came
from existing divisions, the major contributor being the almost 20 new
retail stores opened in the group.
The operating income has decreased by 16% compared to the previous
financial year. Despite achieving significant turnover, the value retail
distribution division performed poorly, negatively impacting on the Group's
operating income. Following on from a decision by the board of Directors,
this division has been discontinued as from 30 June 2001. A new division has
been formed on a totally different structure which will contribute to Group
profitability for the new financial year. The discontinued operation had to
trade until the end of the financial year under review as it was committed
to supplying the major chain stores with orders that had been received prior
to December 2000. As explained in detail in our interim results, the
validity of certain Duty Free Credit permits purchased by this division have
been challenged, a provision of R6,2 million has been raised to cover the
full loss that may arise should the permits eventually prove to be invalid.
The restructuring will avoid adverse profit consequences in future years.
The significant investment made by the Group in its various divisions to
expand operations and ensure future growth, as well as investing in the
group's infrastructure, will position the Group to take advantage of the
investment in future trading periods. This is particularly applicable in the
retail division.
The Group's investment in a listed entity was sold at a profit of R3,1
million in the second half of the financial year.
The directors have decided to discontinue certain clothing divisions
within the group. A provision of R2,4 million has been raised to fully cover
the losses that will be incurred as a result of the discontinuance.
Review of activities
The retail division of the Group expanded significantly during the past 12
months, with the opening of almost 20 new stores. The group now owns more
than 50 stores in the most sought after shopping centres in the country. The
full benefit of these new stores will be felt in the years to come, with the
operating margins improving significantly as the stores mature.
The core businesses within the distribution division of the group
performed solidly under difficult trading conditions.
The sunglasses division successfully launched a number of new
international brands including, BOLLE Action Eyegear and more recently PRADA
Eyewear. This division continues to gain market share, and is making
significant in roads with house brands for the major chain stores.
The corporate promotions division performed extremely well, and showed
significant growth over the previous financial year.
The Guess apparel division traded well above budget for the year, while
the Calvin Klein brand is now fully integrated. The impact of the
aforementioned is expected to translate into enhanced earnings in future
financial years.
As previously commented on, the value retail distribution division has
been restructured as from 1 July 2001. Its role is to act as a facilitator
on behalf of the major chain stores, and in return the division earns a
commission for the service it provides.
Prospects
The Group continues to trade reasonably well under difficult market
conditions. With the solid infrastructure and sound systems currently in
place, we feel that all our divisions are well positioned to take advantage
of any improvements in trading conditions as soon as they occur. As a result
of the Group's sensitivity to volumes, an upswing in volumes going forward
will have a material impact on future operating margins.
The Group has a strong balance sheet, reflecting a positive net cash
position and very little debt. Management continues to focus its attention
on working capital management and cash generation.
While the Group does not expect to benefit significantly in the 2002
financial year from Picto Busby's appointment as the official licensing
agent to the Cricket World Cup in 2003, we do expect to see significant
returns in the following years. The Group as a whole is, however, already
benefiting from the exposure obtained as a result of the appointment.
Dividends
Notice is herby given that a final dividend of 4c per share has been
declared in respect of dividend number 4 for the year ended 30 June 2001.
Shareholders are advised that the last day to trade cum dividend will be
Friday 12 October 2001. The shares will trade ex dividend as from Monday,
15 October 2001. The record date will be Friday, 19 October 2001 and the
dividend will be payable on Monday, 22 October 2001.
In terms of the resolution approved at the previous AGM, the company has
bought R1,9 million of its own shares during the period under review.
Application is being made to the necessary authorities for the cancellation
and delisting of these shares.
The audited results have been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice. The accounting
policies used in the preparation of these results are consistent with those
used in the annual financial statements for the year ended 30 June 2000.
On behalf of the Board of Directors
K.L. Brouze (Chief Executive Officer)
Johannesburg
31 August 2001
Directors:
A. Rogoff* (Chairman), M.A. Stange*, K.L. Brouze, M.G. Duarte, M.G.
Gordon, P. Klisser, S.N. Melnick, S.M. Moss, S. Stein*, D.S. Brouze*, J.H.
Krein (Alternate)
*Non-executive
Transfer secretaries:
Mercantile Registrars Limited, 11 Diagonal Street, Johannesburg, 2001
Registered address:
11 Height Street, Doornfontein, 2094.
PO Box 16647, Doornfontein, 2028
