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The House of Busby Limited - Reviewed Preliminary Results: 30 June 2002
Share Code: BSB
ISIN code: ZAE000013637
The House of Busby Limited
Reviewed preliminary results for the year ended 30 June 2002
Summarised consolidated income statements
Restated
Reviewed Audited
Year ended Year ended
30 June 30 June
2002 2001 %
R`000 R`000 change
Revenue 332 417 371 540
Continuing operations 323 175 281 845 15
Discontinued operations 9 242 89 695
Operating income before
depreciation and amortisation 31 993 30 516
Continuing operations 31 484 29 058 8
Discontinued operations 509 1 458
Depreciation 4 713 3 981
Amortisation of intangibles 1 055 1 055
Operating income before net
finance charges 26 225 25 480 3
Net finance cost 2 435 2 928
Preference dividend paid 1 603 1 631
22 187 20 921 6
Exceptional items 17 353 5 571
Net income before taxation 4 834 15 350
Taxation 4 085 1 847
Net income after taxation 749 13 503
Attributable to minorities 1 561 4 446
Attributable to ordinary
shareholders 2 310 17 949
Weighted average number of
shares in issue (`000) 74 498 76 586
Headline earnings per
share (cents) 26,4 30,7 (14)
Headline earnings per share
continuing operations (cents) 25,7 28,8 (11)
Earnings per share (cents) 3,1 23,4 (87)
Reconciliation of headline earnings
Restated
Reviewed Audited
Year ended Year ended
30 June 30 June
2002 2001 %
R`000 R`000 change
Attributable to ordinary
shareholders 2 310 17 949
Add: Loss on discontinuance of
clothing divisions 10 491 2 487
Cost of control on acquisition
of minority shareholder`s
interest 7 716 -
Value retail distribution
division - 6 214
Amortisation of goodwill 269 -
Deduct: Profit on disposal of
investment 1 123 3 130
Headline earnings 19 663 23 520 (16)
Operating lease commitments
Restated
Reviewed Audited
Year ended Year ended
30 June 30 June
2002 2001
R`000 R`000
Payable in one year 25 242 24 399
Payable thereafter 50 117 73 659
Summarised consolidated balance sheets
Restated
Reviewed Audited
30 June 30 June
2002 2001
R`000 R`000
Assets
Non-current assets 67 861 72 691
Property, plant and equipment 35 754 33 553
Intangible assets 13 461 10 965
Non-current receivables 3 892 13 645
Deferred taxation 14 754 14 528
Current assets 248 371 304 723
Inventories 101 371 85 090
Trade and other receivables 58 143 73 211
Cash and cash equivalents 88 857 146 422
Total assets 316 232 377 414
Equity and liabilities
Shareholders` funds 197 102 203 571
Foreign currency translation reserve (1 419) (1 141)
Minority interest (757) 2 506
Long-term liabilities - 34
Overdraft and interest-bearing debt 88 873 137 477
Current liabilities 32 433 34 967
Total equity and liabilities 316 232 377 414
Number of shares in issue (net of
treasury shares) (000`s) 70 037 75 985
Net asset value per share (cents) 279 266
Tangible net asset value per share (cents) 260 252
Summarised consolidated cash flow statements
Restated
Reviewed Audited
Year ended Year ended
30 June 30 June
2002 2001
R`000 R`000
Cash generated from operations 18 232 18 470
Net finance cost (2 435) (414)
Dividends paid (3 119) (6 890)
Taxation paid (1 837) (3 057)
Cash flow from operating activities 10 841 8 109
Cash flow from investing activities (14 108) (11 376)
Cash flow from financing activities (5 694) (16 966)
Decrease in cash and cash equivalents (8 961) (20 233)
Cash and cash equivalents at beginning
of year 8 945 29 178
Cash and cash equivalents at end of year (16) 8 945
Statements of changes in equity
Non-
distri- Accumu-
Share Share butable lated
capital premium reserve profit Total
R`000 R`000 R`000 R`000 R`000
Balance at 30 June
2000 - as previously
reported 75 123 391 15 362 59 452 198 280
Special purpose entity
consolidated (6 200) (6 200)
Inter-group charges (2 594) (2 594)
Deferred taxation
adjustment 295 295
Balance at 30 June
2000 - as restated 75 123 391 15 362 50 953 189 781
Issue of share capital 1 2 730 2 731
Dividends paid (6 890) (6 890)
Net income attributable
to ordinary
shareholders 17 949 17 949
Balance at 30 June
2001 76 126 121 15 362 62 012 203 571
Shares repurchased (6) (5 654) (5 660)
Dividends paid (3 119) (3 119)
Net income attributable
to ordinary
shareholdes 2 310 2 310
Balance at 30 June
2002 70 120 467 15 362 61 203 197 102
Comments
Earnings
During the financial year under review, revenue from continuing operations
increased by 15% as a result of organic growth. Operating income before
depreciation and amortisation of trademarks from continuing operations rose by
8% compared to the previous financial year.
Headline earnings decreased by 16%, while headline earnings per share was 14%
lower than the previous financial year at 26,4 cents per share. If analysed on a
continuing operations basis, headline earnings per share decreased by 11%.
Exceptional items were R17,3 million. These are detailed under the
reconciliation of headline earnings.
Review of activities
The retail division of the group performed well during the year under review. It
exceeded its target despite difficult trading conditions in the first four
months of the year. A number of non-performing stores were closed or re-
modelled, which contributed to the growth experienced in this division.
The distribution division continued to experience difficult trading conditions
as mentioned in the interim announcement. This division imports the majority of
its inventory and was affected by the rapid devaluation of the rand. Margins in
the division came under pressure since the increase in costs could not be
recovered immediately. Despite a moderate increase in revenue in this division,
the lower margins impacted negatively on the bottom line.
As part of the group`s ongoing rationalisation drive, a decision was taken by
the board of directors in the second half of the financial year to discontinue
the distribution of all branded clothing except for the Guess label, which is
performing well. The group is still involved in the distribution of many other
well known brands that do not fall under the clothing category. The cost of this
discontinuance has been borne in the current financial year.
The interest of a minority shareholder in one of our distribution operations,
which had previously traded at a loss, was acquired for a nominal consideration
during the second half of the year. The main focus in this division was the
sourcing of merchandise for chainstores, and the expertise of the team will now
be used in the sourcing of cricket world cup merchandise as well as other
specialist merchandise. The cost of control arising on this acquisition has been
expensed.
Prospects
The retail division is expected to meet its budget for the 2003 financial year,
and is currently trading to expectations.
The distribution division is expected to recover some of the ground lost in the
previous year, which is supported by its performance to date. Any sustained
recovery in this division can only be achieved against the backdrop of a stable
local currency.
The rationalisation of the clothing division is expected to have a positive
impact on the distribution business going forward.
A positive contribution is also expected in the 2003 financial year from the
sale of cricket world cup branded merchandise.
Dividends
Notice is hereby given that a final dividend of 4,0 cents per share has been
declared. Shareholders are advised that the last date to trade "cum" dividend
will be Friday, 25 October 2002. The shares will trade "Ex" dividend as from
Monday, 28 October 2002. The record date will be Friday, 1 November 2002, and
the dividend will be payable on Monday, 4 November 2002. Share certificates may
not be dematerialised or rematerialised from Monday, 28 October 2002 to Friday,
1 November 2002, both days inclusive.
Accounting policies
The same accounting policies and methods of computation have been used in the
preparation of these preliminary financial statements as were used in the annual
financial statements to 30 June 2001, except for a special purpose entity that
has been consolidated as required by AC 412, and a deferred tax asset raised in
terms of AC 102. The changes in accounting policy have been applied
retrospectively, and comparative figures restated where appropriate. The
accounting policies comply with South African Statements of Generally Accepted
Accounting Practice.
Independent review
The preliminary results for the year ended 30 June 2002 have been reviewed by
Fisher Hoffman PKF, their unqualified review opinion is available for inspection
at the company`s registered office.
On behalf of the board of directors
KL Brouze
Chief executive officer
Johannesburg
13 September 2002
The House of Busby Limited
Incorporated in the Republic of South Africa
Registration number 1997/009173/06
Share code: BSB
ISIN number: ZAE000013637
Transfer secretaries: Computershare Investor Services Limited, 70 Marshall
Street, Marshalltown 2001. PO Box 61051, Marshalltown 2107.
Registered address: 11 Height Street, Doornfontein 2094. PO Box 16647,
Doornfontein 2028.
Directors: A Rogoff* (Chairman*), KLBrouze, MG Duarte, MG Gordon, SN Melnick,
SMMoss, S Stein*, DS Brouze*
*Non-executive
Date: 12/09/2002 05:40:00 PM Produced by the JSE SENS Department
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