| Thu 22 Nov 2001, 0:00 | | Mr Price Group Limited |
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Registration number 1933/004418/06
Incorporated in the Republic of South Africa
ISIN number: ZAE 000026951
JSE share code: MPC
GROUP RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2001
HIGHLIGHTS
* Attributable profits up 37%
* Adjusted headline earnings per share up 31%
* Dividend per share increased by 33%
* Strong cash flows enhance growth prospects
CONSOLIDATED INCOME STATEMENT - R'000
2001 2000 2001
26 weeks 27 weeks 53 weeks
September September March
(Restated) %
(Unaudited) (Unaudited) change (Audited)
Turnover 1 323 816 1 188 362 11 2 604 211
Other income 20 437 18 670 9 39 415
Total revenue 1 344 253 1 207 032 11 2 643 626
Costs and expenses 1 289 091 1 161 908 11 2 501 966
Operating profit before
restructuring costs 55 162 45 124 22 141 660
Restructuring costs - 1 975 1 839
Operating profit 55 162 43 149 28 139 821
Finance costs 5 345 6 434 (17) 17 379
Profit before taxation 49 817 36 715 36 122 442
Taxation 14 275 11 410 25 34 318
Profit after taxation 35 542 25 305 40 88 124
Minority interest - 638 1 085
Net profit for the period 35 542 25 943 37 89 209
Preference dividends 8 8 16
Profit attributable to
ordinary shareholders 35 534 25 935 37 89 193
Weighted average number
of ordinary shares in
issue (000) 235 455 233 015 1 233 896
Earnings per ordinary
share(cents) (weighted)
basic 15,1 11,1 36 38,1
headline 15,7 11,2 40 38,6
adjusted headline 15,7 12,0 31 39,4
diluted 14,8 10,9 36 37,6
Distribution per ordinary
share (cents) 4,0 3,0 33 12,0
Distribution cover (times) 3,9 3,7 5 3,2
CONSOLIDATED BALANCE SHEET - R'000
2001 2000 2001
September September March
(Restated)
(Unaudited) (Unaudited) (Audited)
Assets
Non-current assets 428 313 390 082 423 385
Property,plant and equipment 179 515 182 315 188 740
Intangibles 9 512 6 252 8 559
Long-term receivables 237 208 200 318 224 384
Deferred taxation assets 2 078 1 197 1 702
Current assets 892 609 750 954 820 768
Inventories 404 072 426 053 382 596
Accounts receivable 294 342 314 486 312 639
Bank balances and cash 194 195 10 415 125 533
Total assets 1 320 922 1 141 036 1 244 153
Equity and liabilities
Capital and reserves 575 118 499 346 560 715
Ordinary shareholders'
interest 575 118 499 046 560 415
Preference share capital - 300 300
Minority interest - 448 1
Non-current liabilities 299 022 287 563 299 041
Long-term liabilities 96 659 116 460 106 267
Deferred taxation liabilities 202 363 171 103 192 774
Current liabilities 446 782 353 679 384 396
Trade and other payables
and provisions 439 757 347 208 378 063
Other current liabilities 7 025 6 471 6 333
Total equity and
liabilities 1 320 922 1 141 036 1 244 153
CONSOLIDATED CASH FLOW STATEMENT - R'000
2001 2000 2001
26 weeks 27 weeks 53 weeks
September September March
(Restated)
(Unaudited) (Unaudited) (Audited)
Cash inflows/(outflows)
from operating activities 104 935 (20 995) 177 294
Cash flow from trading 66 474 47 987 158 445
Working capital changes 50 619 (66 874) 19 248
Net interest received 13 401 9 767 16 680
Taxation paid (4 364) (2 962) (5 778)
Dividends paid (21 195) (8 913) (11 301)
Cash outflows from investing
activities (26 714) (162 694) (236 737)
Increase in long-term
receivables (4 354) (4 354) (38 104)
Repurchase of accounts
receivable from bank - (118 001) (118 001)
Replacement of property,
plant and equipment (5 052) (2 401) (19 836)
Additions to property,
plant and equipment (13 106) (32 855) (58 088)
Additions to intangible
assets (4 202) (5 083) (2 708)
Cash (outflows)/inflows
from financing activities (9 559) 116 531 107 403
Net increase/(decrease) in
cash and cash equivalents 68 662 (67 158) 47 960
SUPPLEMENTARY INFORMATION
2001 2000 2001
September September March
(Restated)
(Unaudited) (Unaudited) (Audited)
Number of ordinary shares
in issue (000) 235 528 234 140 235 380
(Prior to restructuring in
October 2000: Ordinary and
`N' ordinary shares
After restructuring: Ordinary
and B ordinary shares)
Net asset value per
ordinary share (cents) 244 213 238
R'000 R'000 R'000
Reconciliation of adjusted
headline earnings
Attributable earnings 35 534 25 935 89 193
Amortisation of goodwill 1 332 153 326
Loss on disposal of property,
plant and equipment 14 - 1 047
Taxation adjustment (4) - (314)
Headline earnings 36 876 26 088 90 252
Restructuring costs - 1 975 1 839
Adjusted headline earnings 36 876 28 063 92 091
Depreciation and amortisation
for the period - R'000 30 617 23 084 54 220
Capital expenditure - R'000
expended during the period 21 433 40 339 81 268
authorised or committed
at period end 51 117 30 607 68 871
Borrowing powers are limited to R863 million and unutilised borrowing
facilities amount to R250 million.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - R'000
2001 2000 2001
September September March
(Restated)
(Unaudited) (Unaudited) (Audited)
Opening capital and reserves
restated for change in the
treatment of dividends and
audit fees. 560 715 481 726 481 726
Increase in share capital
and share premium 356 12 556 17 694
Redemption of preference
share capital (300) - -
Profit attributable to
ordinary shareholders 35 534 25 935 89 193
Ordinary distribution (21 187) (20 871) (27 898)
Closing capital and reserves 575 118 499 346 560 715
SEGMENTAL REPORTING - R'000
BUSINESS SEGMENTS
The group's retail activities are organised into two divisions for
operational and management purposes.
The main constituent of "Other" is the group's shopfitting business.
2001 2000 2001
26 weeks 27 weeks 53 weeks
September September March
(Restated) %
(Unaudited) (Unaudited) change (Audited)
Revenue - external
Cash division 877 346 749 217 17 1 676 600
Credit division 456 866 448 179 2 948 253
Head office 2 307 2 006 15 5 068
Other 7 734 7 630 1 13 705
Total 1 344 253 1 207 032 11 2 643 626
Operating profit
Cash division 40 182 27 715 45 88 632
Credit division 24 350 21 530 13 63 742
Head office (8 925) (8 043) 11 (15 245)
Other 16 2 781 (99) 4 326
Eliminations (461) (834) (45) (1 634)
Total 55 162 43 149 28 139 821
NOTES
1. The accounting policies applied are in compliance with South African
Statements of Generally Accepted Accounting Practice and are consistent with
those applied in the latest annual financial statements.
2. Subsequent to the interim results to 30 September 2000 being released,
the Group adopted:
- AC107 "Events after Balance Sheet date" early,
- AC130 "Provisions, Contingent Liabilities and Contingent Assets"
and
- AC129 "Intangible Assets"
and applied these to the 2001 annual financial statements. In terms of AC107
dividends and related STC charges are accounted for in the period when the
dividends are declared and in terms of AC130 audit fees are accounted for in
the period when audit services are rendered.
AC129 provides for a reclassification of certain assets between property,
plant and equipment and intangibles.
The interim September 2000 figures have been restated where necessary to
accord with the current accounting policies.
3. The resolution of the taxation queries referred to in the previous
annual financial statements is ongoing.
COMMENTS
RESULTS
Sales increased by 11% to R1,3 billion for the 26 weeks against a 27 week
period in the previous year. Sales for the comparable 26 week period
increased by 16% compared with the Retail Liaison Committee growth index for
clothing and footwear of 2,9% for the same period, reflecting further market
share gains.
Operating profits increased by 28% to R55,2 million and attributable income
was up by 37%. Adjusted headline earnings at 15,7 cents per share were 31%
higher.
The interim dividend has been increased by 33% to 4,0 cents.
TRADING
Earnings were down 12% at the interim stage last year and the steps taken to
correct merchandise assortments and counter the diversion of consumer
spending have proved successful.
The Cash Retailing Division, trading under the Mr Price brand, increased
sales by 17% to R877 million and by 22% for the comparable 26 week period.
Profits for the division were up 45%. Mr Price Weekend Material recorded a
strong profit performance while Mr Price Home also significantly improved
profitability. The three store Mr Price operation in Chile recorded a loss
as expected, which incorporated set-up costs for a further three stores that
opened in October and November. The company remains confident about
prospects in Chile and to that end has acquired the minority interest of its
partner in Chile. With the opening of 20 new stores, the number of stores
under the Mr Price brand increased to 395.
The Credit Retailing Division increased revenue by 2% (6% for the comparable
26 week period) to R457 million and increased profits by 13%. Milady's
recorded a strong profit result as a consequence of its consistent and
focused product assortment. The performance of The Hub was slightly below
last year's level but a better second half is expected. A decision to
significantly reduce stockholdings and increase stockturns in Sheet Street
and Galaxy impacted negatively on profitability in these two chains but will
improve their performance in the second half. The debtors book continued
to be well controlled with bad debt expense running at 3,1% of credit sales
and collections ahead of plan. The division opened six new stores and
operated 327 stores at period end.
FINANCE
Cash sales rose to 80% of total sales compared with 77% in the interim
period last year. Inventories were tightly controlled and were 5% lower
than the levels at September 2000. The strong cash flow and the good
working capital control enabled the group to end the period with a net cash
surplus and continuing strong cash flows will fund the group's expansion
programme.
PROSPECTS
28 new stores will be opened in the second half of the year and this will
take the total number of stores operated by the group to 750 at year end.
We expect the improved performance of the group to continue into the second
half and that the forecast of an increase in earnings for the year will be
achieved.
On behalf of the board
S B Cohen - Joint chairman
L J Chiappini - Joint chairman
A E McArthur - Chief executive officer.
Durban - 16 November 2001
DECLARATION OF INTERIM DIVIDEND
Notice is hereby given that the directors have declared an interim dividend
of 4,0 cents per share to the holders of ordinary and B ordinary shares.
In compliance with the requirements of STRATE the following dates are
applicable:
Last date to trade "cum" the dividend Thursday 13 December 2001
Date trading commences "ex" the dividend Friday 14 December 2001
Record date Friday 21 December 2001
Date of payment Monday 24 December 2001
Certificated shareholders may not dematerialise their share certificates
between Friday 7 December and Friday 21 December 2001, both dates inclusive.
On behalf of the board
C S Yuill - Secretary
Durban
16 November 2001
Transfer secretaries: Mercantile Registrars Limited,
10th Floor, 11 Diagonal Street, Johannesburg 2001.
P O Box 1053, Johannesburg, 2000.
Telephone: (011) 370 5000.
This report is available on our website: www.mrpricegroup.com
Directors: LJ Chiappini (Joint chairman), SB Cohen (Joint chairman), AE
McArthur (Chief executive officer), C Hultzer, MR Johnston, Prof. LJ Ring
(USA), SM Rubinstein, WJ Swain, CS Yuill, NP Woodroffe (alternate)
