| Mon 15 Oct 2001, 0:00 | | New Clicks - Audited Group Results |
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NEW CLICKS HOLDINGS LIMITED
(Registration Number 1996/000645/06)
Share Code: NCL ISIN: ZAE 000014585
AUDITED GROUP RESULTS FOR THE YEAR ENDED 31 AUGUST 2001
FINANCIAL HIGHLIGHTS
52 trading weeks vs 53 trading weeks
TURNOVER UP 9.2%
OPERATING PROFIT UP 11.6%
HEADLINE EARNINGS UP 10.3%
HEADLINE EARNINGS PER SHARE UP 8.1%
52 trading weeks vs 52 trading weeks
TURNOVER UP 11.0%
OPERATING PROFIT UP 20.1%
CONSOLIDATED INCOME STATEMENT
2001 2000 %
R'000 R'000 change
Turnover 4 365 203 3 997 525 9.2
Operating profit 268 472 240 541 11.6
Net interest paid 19 997 11 271 77.4
Net profit before goodwill amortised 248 475 229 270 8.4
Goodwill amortised (see note below) 23 552 -
Profit before tax (see note below) 224 923 229 270
Tax 71 758 69 049 3.9
Net profit (see note below) 153 165 160 221
Adjustment for goodwill amortised 23 552 -
Headline earnings 176 717 160 221 10.3
Headline earnings per share (cents)
Undiluted 60.3 55.8 8.1
Diluted 56.5 52.5 7.6
Earnings per share (cents) (see note below)
Undiluted 52.2 55.8 -
Diluted 48.9 52.5 -
Distribution per share (cents)
Interim 8.6 7.6 13.2
Final 11.2 10.4 7.7
Total 19.8 18.0 10.0
Note: In accordance with the new accounting standards, the group's
accounting policy for goodwill has been changed for the current financial
year to amortise goodwill over its estimated useful life. Goodwill was
previously written off against share premium and reserves. During the
1999/2000 financial year goodwill amounting to R20.6 million was written-off
against distributable reserves.
CHANGES IN EQUITY
2001 2000 %
R'000 R'000 change
Increase in share capital and premium 52 579 29 018
(Decrease) increase in share
distribution reserve (4 277) 4 803
Translation gain (loss) on conversion
of foreign assets and liabilities 24 289 (2 277)
Net profit for the year 153 165 160 221
Distribution to shareholders (58 974) (51 804)
Sale of trademarks previously
written-off 22 500 (22 500)
Goodwill - (20 565)
Net increase in shareholders' interest 189 282 96 896
Opening shareholders' interest 827 555 730 659
Closing shareholders' interest 1 016 837 827 555 22.9
CONSOLIDATED BALANCE SHEET
2001 2000
R'000 R'000
ASSETS
Non-current assets
Fixed assets 544 248 491 581
Goodwill 78 773 -
Loans and investments 295 256 142 232
Deferred tax 40 515 48 353
958 792 682 166
Current assets 1 023 445 1 045 016
Inventories 897 348 742 010
Accounts receivable 107 270 96 676
Bank balances and cash 18 827 206 330
Total assets 1 982 237 1 727 182
EQUITY AND LIABILITIES
Capital and reserves
Ordinary shareholders' interest 1 016 837 827 555
Non-current liabilities
Compulsorily convertible debentures - 20 800
Interest-bearing liabilities 242 398 178 386
1 259 235 1 026 741
Current liabilities 723 002 700 441
Accounts payable 663 077 594 845
Short-term borrowings 34 333 49 125
Tax 8 874 47 473
Dividends 16 718 8 998
Total equity and liabilities 1 982 237 1 727 182
SUPPLEMENTARY INFORMATION
2001 2000
Ordinary shares in issue ('000) 298 541 288 399
Weighted number of shares
in issue ('000) 293 165 286 881
Weighted diluted number of shares in
issue ('000) 312 916 305 249
Net tangible asset value
per share (cents) 314 287
Net asset value per share (cents) 341 287
Depreciation (R'000) 72 164 58 025
Capital expenditure (R'000) 109 669 220 433
CONSOLIDATED CASH FLOW STATEMENT
2001 2000
R'000 R'000
Net cash flow from operations 343 878 302 132
Movement in working capital (79 962) (152 152)
Finance costs (19 997) (11 271)
Tax paid (98 582) (47 263)
Cash flow from operating activities 145 337 91 446
Dividends paid (23 752) (15 925)
Net cash effects of
operating activities 121 585 75 521
Net cash flow utilised in
investing activities (353 215) (251 333)
(231 630) (175 812)
Net cash effects of
financing activities 63 285 81 441
Change in net cash resources (168 345) (94 371)
GEOGRAPHICAL SPLIT
The geographical split of turnover and operating profit is as follows:
2001 2000 %
R'000 R'000 change
Turnover
Clicks 2 333 644 2 110 339 10.6
Discom 642 848 607 495 5.8
Music division 351 840 323 437 8.8
Southern African operations 3 328 332 3 041 271 9.4
Priceline 1 030 894 956 254 7.8
House 5 977 -
Australian operations 1 036 871 956 254 8.4
Total 4 365 203 3 997 525 9.2
Operating profit
Clicks 216 064 186 151 16.1
Discom 9 265 15 971 (42.0)
Music division 11 743 12 394 (5.3)
Southern African operations 237 072 214 516 10.5
Priceline 27 042 26 025 3.9
House 4 358 -
Australian operations 31 400 26 025 20.7
Total 268 472 240 541 11.6
Comparative figures
The year to August 2000 comprised 53 trading weeks with the extra week
having been included in the month of August.
To achieve a realistic comparison of the group's trading performance in the
current year, the turnover and operating profit increase percentages have
been restated below to exclude the impact of the extra week in the 2000
financial year.
Reported Restated
Turnover +9.2% +11.0%
Operating profit +11.6% +20.1%
Review of trading
With regard being had to the difficult and tough trading conditions which
have prevailed during the year both in South Africa and Australia, the group
has achieved acceptable results and has increased the operating margin from
6.02% to 6.15%. The group has continued to expand through the opening of new
retail outlets across all its trading brands and through acquisitions.
At August 2001, the number of company-owned stores totalled 684, as against
the 628 at August 2000.
The significant increase in net interest costs resulted in the main from the
funding of the R90 million distribution centre in Midrand, and acquisitions.
Acquisitions
During the year under review, two acquisitions were made:
In Australia, House, a homewares franchise chain comprising 66 stores, was
acquired effective from 5 December 2000. The cost of this acquisition, which
was funded in cash, mainly from South Africa, was R68 million.
In South Africa, the Durban-based Modisons group, comprising 11 company-
owned and franchised stores, was acquired effective from 1 March 2001, for
R20 million.
During the year, the investment in the Link Investment Trust, which operates
the Link pharmacy franchise, was increased from 30% to 56% at a cost of
R12,6 million.
Healthcare
Strategic initiatives to enable the group to be a major player in the
pharmacy and healthcare markets, once the pharmacy industry is deregulated,
have continued. As part of this initiative, funding and support services
have been provided to groupings of pharmacies. Funding provided to these
pharmacy groupings, which is primarily to allow them to follow an
acquisitive strategy, amounts to R239 million. Interest is charged on these
funds at market-related rates.
Divisional review
New Clicks South Africa
Clicks
Clicks is a specialist retailer of health, home/lifestyle and beauty
products, catering to the middle to upper end of the market.
Its sales performance has been impacted by the tough economic conditions and
a very competitive market place. As part of the group's healthcare
initiatives, the Clicks brand has moved significantly in the direction of
wellness and preventative healthcare through its merchandise and customer
communication.
Sales (company-owned stores) R2,334 billion (2000: R2,110 billion)
Number of stores
Company-owned 229 (2000: 209)
Franchised 11 (2000: 8)
Discom
The repositioning of the Discom brand has resulted in the first new format
store being opened in Richards Bay in early September 2001. A further 100
stores will be converted to the new format by December 2001. The Modisons
stores, which were acquired in March 2001, have been integrated into Discom.
Although the initial performance of the new format stores has been very
encouraging, the full benefits will be realised only in the 2002/2003 year
following the roll out of the new format and the introduction of technology
to all stores.
Sales (company-owned stores) R643 million (2000: R607 million)
Number of stores
Company-owned 202 (2000: 192)
Franchised 7 (2000: 4)
Music Division
This division comprises Musica, South Africa's largest specialist music
chain, and the Compact Disc Wherehouse, a larger-store format.
During the year this division has gained significant market share.
Sales R352 million (2000: R323 million)
Number of stores
Company-owned 134 (2000: 126)
Link Investment Trust
The Link Investment Trust operates a franchise, comprising of 307 Link
pharmacies in southern Africa. A business-format franchise, which will set
new standards for pharmacy in South Africa and enhance the role of the
pharmacist as a healthcare provider, is currently being rolled out.
New Clicks Australia
Priceline
Priceline is a specialist retailer of beauty, health and home/lifestyle
products. It has grown the store base rapidly and, in uncertain economic
conditions, has achieved sales growth ahead of the retail sector. The
Priceline ClubCard, which is modelled on the Clicks ClubCard, was launched
in the state of Victoria in May 2001 and already has more than 200 000
customers on the data base.
Sales R1,031 billion (2000: R956 million)
Number of stores
Company-owned 117 (2000: 101)
House
House is Australia's foremost franchised homeware brand and was acquired
effective from December 2000. Leveraging off the support services platform
of New Clicks Australia, the growth will be accelerated in the year ahead.
Sales (company-owned stores) R6 million
Number of stores
Company-owned 2
Franchised 68
Group prospects for the year ahead
The world political situation and the direct economic consequences thereof
could significantly influence economic conditions both in South Africa and
in Australia, and the uncertainty following the events of 11 September have
adversely affected consumer confidence and the group's September sales
performance.
However, we do have a strong belief and confidence in the capabilities,
resilience and determination of our people to take the group forward. Given
that the strategies of growing the group organically as well as through
acquisitions will remain in place, enhanced levels of sales and profits are
expected in the 2001/2002 financial year.
STRATE
The company, as part of the JSE Securities Exchange South Africa initiative
to move to an electronic settlement environment for share transactions, went
onto the STRATE system on 27 August 2001.
Capitalisation issue and final dividend
The directors have resolved to award capitalisation shares to ordinary
shareholders.
Shareholders will be given the opportunity to decline the award of
capitalisation shares in respect of all or any part of their shareholding
and to receive a final cash dividend of 11.2 cents per share.
The terms of the award of the capitalisation shares will be published on or
about 5 November 2001 and a circular and form of election will be posted to
shareholders on 16 November 2001
By order of the Board
Allan Scott
Company Secretary
15 October 2001
Directors: D.M. Nurek*, T.C. Honneysett, R.B. Godfrey,
P.W.G. Green, E. Osrin*, J.C. Sher (Australian), P.E.I. Swartz*,
W.S.G. Batts*+, M.C. Henkel*+ * non-executive + alternate
Transfer Secretaries: Mercantile Registrars Limited,
11 Diagonal Street, Johannesburg 2001.
PO Box 1053, Johannesburg 2000
Registered Address: Cnr Searle and Pontac Streets,
Cape Town 8001. PO Box 5142, Cape Town 8000
This and other financial information is available on
our website: http://www.nuclicks.co.za
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