| Thu 11 Oct 2001, 0:00 | | Wetherlys Investment Holdings Limited - Interim Gr |
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WETHERLYS INVESTMENT HOLDINGS LIMITED
(Registration No. 96/16455/06)
Share code: WET
ISIN: ZAE000013827
INTERIM GROUP RESULTS
FOR THE SIX MONTHS ENDED 31 AUGUST 2001
* TURNOVER UP 19.4%
* OPERATING INCOME UP 24.8%
* HEADLINE EPS UP 21.3%
INCOME STATEMENT
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
31/8/2001 31/8/2000 28/2/2001
R'000 R'000 R'000
Turnover 123 797 103 684 220 644
Operating income 20 399 16 341 44 974
-Operational
income before
depreciation and
net interest
Depreciation (1 391) (1 092) (2 497)
Net interest 2 605 2 914 4 515
Investment 2 994 3 017 5 028
income
Interest paid (389) (103) (513)
Net income before 21 613 18 163 46 992
taxation
Taxation (7 123) (6 269) (14 352)
Net income after 14 490 11 894 32 640
taxation
attributable to
ordinary
shareholders
Number of shares 127.0 126.6 126.6
in issue (m)
Weighted number of 126.7 126.4 126.5
shares (m)
Earnings per share 11.4 9.4 25.8
(cents)
Headline earnings
Net income 14 490 11 894 32 640
attributable to
ordinary
shareholders
Headline earnings 11.4 9.4 25.8
per share (cents)
Ordinary dividends - - 6 315
declared (R'000)
Dividends per - - 5
share (cents)
BALANCE SHEET
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
31/8/2001 31/8/2000 28/2/2001
R'000 R'000 R'000
ASSETS
Fixed assets 79 766 51 176 66 488
Deferred taxation 3 018 2 157 3 430
Loan to share 4 000 4 000 4 000
trust
Investments 35 823 17 183 45 890
Current assets 95 479 103 287 79 871
Inventory 51 883 37 703 46 548
Accounts 14 587 6 339 8 816
receivable
Cash at bank 29 009 59 245 24 507
TOTAL ASSETS 218 086 177 803 199 679
EQUITY AND
LIABILITIES
Shareholders' 160 992 132 553 153 298
funds
Non-current 11 272 12 261 13 153
liabilities
Current 45 822 32 989 33 228
liabilities
Accounts payable 42 537 31 968 28 987
Taxation payable 3 279 1 016 3 216
Bank overdraft - - 1 022
Shareholders for 6 5 3
dividends
Assets employed 218 086 177 803 199 679
Net asset value 126.7 104.7 121.1
per share (cents)
STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
31/8/2001 31/8/2000 28 Feb
R'000 R'000 2001
R'000
Balance at 153 298 119 834 119 834
beginning of the
year
Issue of shares 825 825 824
Net profit 14 490 11 894 32 640
Ordinary dividend (7 621) - -
paid
Balance at the end 160 992 132 553 153 298
of the year
ABRIDGED GROUP CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
31/8/2001 31/8/2000 ended
R'000 28 Feb 2001
R'000 R'000
Cash generated from 22 941 24 552 42 638
operations
Net interest income 2 605 2 914 4 515
Net dividends (7 620) (6 312) (6 314)
received/(paid)
Taxation paid (7 060) (6 516) (12 400)
Cash flows from operating 10 866 14 638 28 439
activities
Cash flows from investing (3 461) (14 997) (66 276)
activities
Cash flows from financing (1 881) 7 422 9 140
activities
Net increase/(decrease) in 5 524 7 063 (28 697)
cash
Bank balances at beginning 23 485 52 182 52 182
of financial year
Bank balances at end of the 29 009 59 245 23 485
six month period
REVIEW
It is once again pleasing to report on an encouraging set of results for the
six months ended 31 August 2001.
Turnover for the six months increased 19.4% to R123 797 (2000:R103 684) with
headline earnings per share increasing 21.3% to 11.4 cents (2000: 9.4
cents). Operating income increased 24.8% to R20 399 (2000:R16 341)
The increased stock holding is attributed mainly to the stocking of both the
new Osiers warehouses situated in Cape Town and Durban.
Cash balances have dropped only marginally, this despite the continuing
investment in the Osiers warehouses and the ongoing development of the Cape
Town lifestyle centre.
Operating margins have improved to 16.47% (2000:15.76%) and will improve
further as we move into the traditionally busier half of the year.
WETHERLYS
All Wetherlys stores traded in line with expectations
This period under review witnessed the opening on the new Wetherlys
warehouse in the Palms centre in Cape Town. This warehouse has been well
received to date and continued growth is anticipated through this region.
Plans are being assessed for the extension of the Wetherlys presence in the
Cape region, and to this end negotiations are in the initial stages for
development of a presence in the Eastern Cape.
Construction of the new Nelspruit warehouse has commenced. Scheduled for
opening in August 2002, the Nelspruit location will in addition to the
Wetherlys warehouse, include an Osiers warehouse. Given the volumes
presently being transacted in the Mpumalanga region, expectation of solid
growth is anticipated.
The relocation of the Wendywood warehouse to larger premises, in close
proximity to the existing premises, will witness the relocation of this
store in the first quarter of the 2002 calendar year. The new site will
house an Osiers warehouse. The location is more suitable in terms of both
size and layout and will also now be situated in the heart of the Wendywood
decorators hub, which is home to many other complimentary lifestyle
retailers. The new site will have visible signage adjacent to the M1 highway
and thus will be invaluable from a marketing perspective.
Inroads into the Spanish market continue to make good progress. Negotiations
are at an advanced stage which will see the creation of a formalised
structure for continued expansion in this region. Pending the successful
outcome of the negotiations, it is anticipated that the first store will be
operational in the south of Spain, well within the first quarter of the 2002
calendar year.
The southern region of Spain is experiencing rapid growth in leisure related
developments such as residential golf estates and other leisure related
housing projects. Many of the Wetherlys product lines are ideally suited to
this lifestyle trend and the customer profile is a perfect match.
The approach to offshore expansion to date has been extremely cautious and
it is not the group's intention to deviate from this strategy. The success
to date in Spain augers well for the continued growth and development of
offshore markets for our locally produced product.
The NBS initiative commenced with a mail shot of 30 000 pre approved
invitations to NBS clients in August 2001. This marketing strategy enables
the group to reach many thousands of customers and it is the intention to
continue to expand this marketing avenue given the encouraging response to
date. New and exciting avenues continue to be explored to make the offering
to this database as lucrative as possible.
OSIERS
The response to the launch of the Osiers brand in November 2000 at the Kya
Sands location, has exceeded expectations.
The concept concentrates primarily on rattan and bedroom furniture as well
as linens, pyjamas, soaps lamps and other decorative and lifestyle products.
The concept is filling a niche gap in the market.
The second Osiers warehouse commenced trade in the Palms centre in Cape Town
in May 2001 and has had an excellent reception to date. The third Osiers
warehouse will commence trade in October 2001 in KwaZulu Natal, adjacent to
the existing Wetherlys warehouse.
The Osiers brand is still in its infancy and as is the trend with all new
store openings, turnovers will improve as the stores mature. As this trend
emerges, so the benefit of improved margins filter through.
ROODEFURN
The manufacturing subsidiary, Roodefurn, has turned in another solid
performance for the six months under review. Supplying almost exclusively to
the Wetherlys group, manufacturing efficiencies have improved remarkably. As
a result lead times to Wetherlys customers have reduced and the overall
production and quality standards have improved.
PROPERTY INITIATIVES
The development of the 24 000 square meter lifestyle centre in Cape Town is
nearing completion. The centre is host to some 35 retail and office
tenants. Situated just outside the CBD, most of the office tenants command
views of the sea and mountain. With ample parking, security and highly
attractive rentals, the centre is Cape Towns answer to mainstream retail and
office developments.
GENERAL REVIEW
The comparative six month period was characterised by exceptionally strong
retail sentiment and this set of results is encouraging given the high
comparative turnover base. Both locally and abroad, lifestyle trends are
focussing more and more on in home living and entertainment. In line with
this trend, residential and holiday homes are continuously being upgraded
and revamped. Wetherlys has successfully cocooned this lifestyle trend with
its niched, one stop product offering.
The outlook for the next six months remains optimistic, as we move into the
traditionally more bouyant half of the year.
CHANGES TO BOARD
Wetherlys Investment Holdings Limited announces changes to its board. Nick
Davies has stepped down from his dual role as chairman and chief executive
officer, and will take up a position as executive director on the board.
James Smith will now assume the position of chief executive officer, while
Barry van der Merwe has been appointed as chairman.
Davies has always exhibited tremendous creative flair and possesses the
ability to source and create new product opportunities. Allowing him to
direct his energies into those areas of the business will ultimately be
beneficial for the group.
Smith and van der Merwe are both well versed in the Wetherlys business model
and between them have several decades of experience with the organisation.
Both are conscious of the solid business foundation that has been built by
the company and want to continue with its steady growth pattern.
The company recognises the significance of succession management. Since
listing in 1997 key management has been earmarked and incentivised to ensure
the continued, successful growth of the business.
The board is also planning the appointment of a non-executive director in
the near future.
DIVIDEND POLICY
In line with past dividend policy, the Board of Directors has decided to
declare a final dividend at the end of the year, which will be covered not
less than three times.
For and on behalf of the board
NWG Davies, Chairman DG Jacobson CA(SA)
Chairman Group Secretary
11 October 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
