| Mon 22 Apr 2002, 0:00 | | New Clicks Holdings Limited - Group Results For Th |
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FEBRUARY 2002
NEW CLICKS HOLDINGS LIMITED
Registration Number 1996/000645/06 Share Code: NCL ISIN: ZAE0000014585
GROUP RESULTS FOR THE SIX MONTHS ENDED 28 FEBRUARY 2002
TURNOVER +23.1%
OPERATING PROFIT +20.9%
HEADLINE EARNINGS +21.1%
DILUTED HEADLINE
EARNINGS PER SHARE +17.9%
CONSOLIDATED INCOME STATEMENT
6 months to 6 months to Year to
28 February 28 February 31 August
2002 2001 2001
(unaudited) (unaudited) % (audited)
R'000 R'000 change R'000
Turnover 2 792 414 2 268 336 23.1 4 365 203
Operating profit 177 034 146 455 20.9 262 614
Net interest paid 10 368 9 017 15.0 19 997
Net profit before goodwill
Amortised 166 666 137 438 21.3 242 617
Goodwill amortised 3 786 851 23 552
Profit before tax 162 880 136 587 19.3 219 065
Tax 47 300 38 904 21.6 70 951
Net profit 115 580 97 683 18.3 148 114
Adjustment for goodwill
amortised 3 786 851 23 552
Headline earnings 119 366 98 534 21.1 171 666
Headline earnings per
share (cents)
Undiluted 39.8 34.1 16.7 58.6
Diluted 37.6 31.9 17.9 54.9
Earnings per share (cents)
Undiluted 38.5 33.8 13.9 50.5
Diluted 36.4 31.6 15.2 47.3
Distribution per share (cents)
Interim 9.9 8.6 15.1 8.6
Final 11.2
Total 19.8
Changes to accounting policies
In accordance with new accounting standards the following accounting
policies have been changed during the period under review:
a. Post-retirement medical aid benefits - in accordance with accounting
standard AC116, actuarial gains and losses are reflected in the income
statement during the period in which they arise.
b. Depreciation of investment properties - in accordance with accounting
standard AC123, following the introduction of AC134, depreciation is now
provided on owner-occupied property.
c. Distributions - in accordance with AC107, distributions and the related
STC are now accounted for in the period the distribution is declared.
The comparative figures have been restated to reflect these changes and the
effect on the operating profit is reflected below.
6 months to 6 months to Year to
28 February 28 February 31 Aug
2002 2001 % 2001
R'000 R'000 change R'000
Operating profit before
the new accounting
standards 180 101 149 384 20.6 268 472
AC 116 adjustment 1 479 1 345 2 690
AC 123 adjustment 1 588 1 584 3 168
Operating profit as
per income
Statement 177 034 146 455 20.9 262 614
CONSOLIDATED BALANCE SHEET
As at As at As at
28 February 28 February 31 August
2002 2001 2001
(unaudited) (unaudited) (audited)
R'000 R'000 R'000
ASSETS
Non-current assets
Fixed assets 584 044 504 475 536 111
Goodwill 74 987 67 245 78 773
Loans and investments 382 840 181 374 295 256
Deferred tax 30 116 51 559 44 751
1 071 987 804 653 954 891
Current assets 1 256 787 962 941 1 023 445
Inventories 1 094 058 789 128 897 348
Accounts receivable 162 729 95 777 107 270
Bank balances and cash - 78 036 18 827
Total assets 2 328 774 1 767 594 1 978 336
EQUITY AND LIABILITIES
Capital and reserves
Ordinary shareholders' interest 1 157 809 913 393 1 015 533
Non-current liabilities
Interest-bearing liabilities 235 305 172 549 242 398
1 393 114 1 085 942 1 257 931
Current liabilities 935 660 681 652 720 405
Accounts payable 753 549 643 164 677 198
Compulsorily convertible debentures - 20 800 -
Short-term borrowings 179 428 - 34 333
Tax 2 683 17 688 8 874
Total equity and liabilities 2 328 774 1 767 594 1 978 336
CONSOLIDATED CASH FLOW STATEMENT
6 months to 6 months to Year to
28 February 28 February 31 August
2002 2001 2001
(unaudited) (unaudited) (audited)
R'000 R'000 R'000
Net cash flow from operations 224 238 182 834 341 188
Movement in working capital (149 063) (9 963) (77 272)
Finance costs (10 368) (9 017) (19 997)
Tax paid (55 252) (64 443) (98 582)
Cash flow from operating activities 9 555 99 411 145 337
Dividends paid (16 186) (10 756) (23 752)
Net cash effects of operating
activities (6 631) 88 655 121 585
Net cash flow utilised in investing
Activities (151 099) (163 852) (355 023)
(157 730) (75 197) (233 438)
Net cash effects of financing
Activities (8 576) (2 954) 63 285
Change in net cash resources (166 306) (78 151) (170 153)
CHANGES IN EQUITY
6 months to 6 months to Year to
28 February 28 February 31 August
2002 2001 2001
R'000 R'000 R'000
Increase in share capital and premium 21 990 19 238 52 579
Increase(decrease) in non-distributable
Reserve 33 539 (1 767) 14 989
Deferred tax on write-off of
intangible assets 4 650 4 650 9 300
Net profit for the period 115 580 97 683 148 114
Distribution to shareholders (33 483) (29 993) (55 531)
Net increase in shareholders' funds 142 276 89 811 169 451
Opening shareholders' interest 1 015 533 827 555 827 555
Prior year adjustment - (3 973) (3 973)
1 157 809 913 393 993 033
Sale of trademarks previously
written-off - - 22 500
Closing shareholders' interest 1 157 809 913 393 1 015 533
Percentage increase in closing
shareholders' interest 26.8
GEOGRAPHICAL SPLIT
The geographical split of turnover and
profit is as follows:
6 months to 6 months to
28 February 28 February
2002 2001 %
R'000 R'000 change
Turnover
Clicks1 360 728 1 206 699 12.8
Discom 368 063 333 722 10.3
Music division 242 278 191 347 26.6
The Body Shop 12 056 - -
Southern African operations 1 983 125 1 731 768 14.5
Priceline 799 050 535 362 49.3
House 10 239 1 206 -
Australian operations 809 289 536 568 50.8
Total 2 792 414 2 268 336 23.1
Operating profit before interest
and tax
Clicks 138 317 111 657 23.9
Discom (13 394) 4 904 -
Music division 14 761 6 334 133.0
The Body Shop 965 - -
Southern African operations 140 649 122 895 14.5
Priceline 32 145 21 233 51.4
House 4 240 2 327 82.2
Australian operations 36 385 23 560 54.4
Total 177 034 146 455 20.9
Impact of foreign currency
fluctuations
The rand, relative to the Australian
dollar, depreciated significantly
during the period under review. The
rates of exchange applied are reflected
below. (rands to the Australian dollar)
28 February 28 February
2002 2001
Income statement items - average rate
for the period 5.33 4.10
Balance sheet items - rate at
28 February 5.74 3.93
The impact of the exchange rate
movement on the group's performance
is reflected below by restating the
turnover and operating profit for the
Australian operations for the current
period at the rate applied for the
period ended February 2001.
6 months to 6 months to
28 February 28 February
2002 2001 %
R'000 R'000
change
Turnover
Southern Africa 1 983 125 1 731 768 14.5
Australia 622 208 536 568 16.0
2 605 333 2 268 336 14.9
Operating profit before interest and tax
Southern Africa 140 649 122 895 14.5
Australia 27 975 23 560 18.7
168 624 146 455 15.1
SUPPLEMENTARY INFORMATION
As at As at As at
28 February 28 February 31 August
2002 2001 2001
Ordinary shares in issue ('000) 302 173 290 438 298 541
Weighted average number of shares in
issue ('000) 300 142 289 266 293 165
Weighted average diluted number
of shares in issue ('000) 317 720 308 982 312 916
Net asset value per share (cents) 383 314 340
Net tangible asset value per share
(cents) 361 293 320
Depreciation (R'000) 46 150 36 072 75 332
Capital expenditure (R'000) 70 526 56 128 109 669
Capital commitments (R'000) 43 792 139 361 194 981
Note to the interim profit statement
The interim financial statements comply with South African Statements of
Generally Accepted Accounting Practice.
Review of trading
Exceptional performances from the Australian businesses and the Music
division in South Africa and strong performance by Clicks have characterised
the group's performance for the six months to February 2002.
Sales have increased by 23,1% and operating profit before interest and tax
by 20,9%.
The group had its best December for many years and this trend has continued
into January and February. Although trading conditions are regarded as tough
in both geographies, this momentum is being sustained.
Discom is in the middle of a major repositioning and has recorded a loss.
During the period under review 42 new stores were opened, 30 in southern
Africa and 12 in Australia. In excess of 50 new stores are planned for the
second half-year to August 2002 which will take the total number of stores
in the group to nearly 1 200.
Stocks
55% of all stock now flows through our distribution centres with an increase
to 65% expected by the financial year-end. Stocks have reached a high level
due to strategic buy-ins to ensure that our service levels to the stores
would not be impacted during this process.
Stock levels are planned to be reduced in the next few months with the
consequent paybacks to the balance sheet. This will be assisted by a world-
class category management initiative which is currently underway.
Divisional overview
New Clicks South Africa
Clicks
All store sales have increased by 12,8% with existing stores increasing at
6,1%.
The ClubCard continues to grow from strength to strength and the database
now has in excess of 3,2 million customers.
This year Clicks will open in excess of 32 new stores - a record for the
brand and ensures a continuation of the brand's dominant footprint
throughout southern Africa.
Number of stores
Company owned 238
Franchised 13
Contribution to group sales 48,7%
Contribution to group operating profit 78,1%
The Body Shop
South Africa's new beauty brand, The Body Shop has proved to be an
unqualified success, registering a profit from opening day. Five stores have
been opened to date and a further five stores are scheduled to open by the
end of August.
Number of stores
Company owned 5
Contribution to group sales 0,4%
Contribution to group operating profit 0,6%
Discom
Discom is in the conversion and repositioning stage. The first of the new
look stores
were opened in November 2001 and early signs are encouraging. However, given
the vagaries of the market in which the brand operates, it is still too
early to pronounce this project a success.
We anticipate, however, improved performance during the next review period.
13 stores have been closed and we anticipate that there will be at least a
further 10 store closures.
Number of stores
Company owned 193
Franchised 7
Contribution to group sales 13,2%
Music Division - Musica and the Compact Disc Wherehouse
The Music division has increased its market share with exceptional sales
growth of 26.6% in all stores and 13.4% in existing stores as well as
exceeding profit targets by a substantial margin.
The success of the Compact Disc Wherehouse large store format has given us
the confidence to expand this offer and further opportunities are being
researched.
Number of stores
Company owned 137
Contribution to group sales 8,7%
Contribution to group operating profit 8,3%
Healthcare/The Link Investment Trust
This division comprises the 56% interest the group holds in The Link
Investment Trust. There has been a rapid build up in activities and support
services to the Link and LinkMax brands with consequent improvement in their
profit performance.
Number of stores
Franchised 344
New Clicks Australia
Priceline
Priceline has delivered a sparkling performance and the brand is now
reaching a level whereby it is becoming a household name in Australia. An
all store sales increase of 14,8% and an existing stores sales increases of
6,6% have been achieved in a low inflation environment.
The Priceline ClubCard has been received favourably by customers in Victoria
and will be rolled out nationally in the next few months.
Five stores were opened during the period under review with a further 12
planned to open by the end of August 2002.
Number of stores
Company owned 122
Contribution to group sales 28,6%
Contribution to group operating profit 18,2%
House
House has achieved franchisee sales increases of 32% for all stores and 15%
in existing stores. An aggressive store expansion programme is underway and
we expect to have 86 stores open by August 2002. The introduction of a
direct import programme has resulted in a product differentiation and
increased margins will flow through in the future.
Number of stores
Company owned 2
Franchised 74
Contribution to group operating profit 2,4%
Prospects
Given the focus of management it is realistic to expect the group's improved
performance in both South Africa and Australia to continue.
We have great confidence in South Africa and our store expansion and format
growth strategies are testimony to this. The Australian business grows from
strength to strength and we envisage House entering the New Zealand market
in the third quarter.
The group is in an exciting phase of its development with rapid growth and
continued
brand focus.
Capitalisation issue and interim 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 an interim cash dividend of 9,9 cents per share.
The terms of the award of the capitalisation shares will be published on or
about 14 May 2002 and a circular and form of election will be posted to
shareholders on 27 May 2002.
By order of the Board
Allan Scott
Company Secretary
22 April 2002
Directors:
D.M. Nurek*,
T.C. Honneysett,
R.B. Godfrey,
P.W.G. Green,
E. Osrin*,
J.C. Sher (Australian),
P.E.I. Swartz*,
A. Zimbler*,
E.D.G. Batts* (alt),
M.C. Henkel* (alt)
* non-executive
Registered Address:
Cnr Searle and Pontac Streets, Cape Town 8001. PO Box 5142, Cape Town 8000
Sponsor: Investec Securities Limited
This information is available on the New Clicks Internet site :
http://www.newclicks.co.za
