| Fri 29 Nov 2002, 13:15 | | Nando`s Interim Results |
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Nando`s Interim Results
Release Date: 29/11/2002 08:38:06 Code(s): NDS
Nando`s Interim Results
Nando`s Group Holdings Limited (Incorporated in the Republic of South
Africa)
(Registration number: 1994/007318/06)
("NGH")
Alpha code: NDS
ISIN number:
ZAE000029765
Headline earnings 45.8% increase
Net asset value 17.9% increase
Debt/equity ratio 43,5%
Interim results for the six months ended 31 august 2002
GROUP INCOME STATEMENT R`000 R`000 R`000
Six months ended Year ended
31 August 31 August February
2002 2001 2002
Reviewed Reviewed Audited
Revenue 248,829 221,552 458,140
Cost of sales 98,680 91,911 175,523
Gross margin 150,149 129,641 282,617
Operating costs 124,162 105,643 223,048
Operating income before
depreciation 25,987 23,998 59,569
Depreciation and amortisation 8,960 7,952 17,150
Operating income 17,027 16,046 42,419
Net finance costs 5,643 5,772 9,126
Income before associated
companies 11,384 10,274 33,293
attributable share of net income
Associated companies attributable
share of net income 11,609 5,029 135
Income before taxation 22,993 15,303 33,428
Taxation 5,990 3,641 -7,535
Attributable income 17,003 11,662 40,963
Headline earnings per
share (cents) 2.63 1.80 6.34
Earnings per share (cents) 2.63 1.80 6.34
Net asset value per share (cents) 16.35 9.1 13.86
Weighted average number
of shares in issue (m) 646 .6 646.6 646.6
BALANCE SHEET
Assets
Non-current assets 205,340 175,699 188,569
Property, plant and equipment 90,959 83,946 89,635
Intangibles 26,061 26,166 27,168
Investments in associate
companies and 65,887 59,509 49,333
other investments
Deferred taxation 17,633 1,278 17,633
Employee share incentive scheme 4,800 4,800 4,800
Current assets 96,500 66,797 90,374
Inventory 12,511 8,837 10,756
Accounts receivable and
other receivables 64,224 43,841 53,394
Bank balances and cash 19,765 14,119 26,224
Total Assets 301,840 242,496 278,943
Equity and liabilities
Share capital and premium 6,465 6,465 6,465
Reserves 99,231 52,559 83,156
Ordinary shareholders` funds 105,696 59,024 89,621
Shareholders` loans 9,319 12,461 12,110
Shareholders` funds 115,015 71,485 101,731
Long term liabilities 40,981 54,289 34,283
Convertible debentures - employee
Share incentive scheme 4,800 4,800 4,800
Deferred taxation 4,934 5,306 5,054
Current liabilities 136,110 106,616 133,075
Accounts payable, other accounts 110,380 87,234 101,966
payable and provisions
Current portion of long
term liabilities 4,442 7,286 18,571
Taxation 10,276 10,484 5,802
Bank overdrafts 11,012 1,612 6,736
Total Equity and Liabilities 301,840 242,496 278,943
SUMMARISED CASH FLOW STATEMENTS
Cash generated by operations 19,261 19,047 60,339
Net finance costs -5,643 -5,772 -9,126
Taxation paid -1,174 -822 -10,749
Cashflows from operating
activities 12,444 12,453 40,464
Cashflows from investing
activities -13,544 416 -3,220
Cash flows from financing
activities -10,221 -6,324 -15,396
Net (decrease)/increase
in cash and -11,321 6,545 21,848
cash equivalents
Effect of foreign exchange
rate changes 586 -1,839 -10,161
Cash and cash equivalents
at beginning 19,488 7,801 7,801
of the year
Cash and cash equivalents at end 8,753 12,507 19,488
of the year
SALIENT FEATURES
Capital commitments
- Authorised but not contracted 4,605 5,016 22,210
Capital expenditure 13,884 14,009 24,313
Operating lease
commitments 2003 2004 2005 2006 Thereafter Total
Land and buildings 20,470 34,991 28,527 19,025 25,574 128,587
STATEMENT OF CHANGES IN EQUITY
Share Retained Translation Total
Capital Income Reserve
Balance at 28 February 2001 6,465 36,946 2,720 46,131
Net income for the year - 40,963 - 40,963
Translation differences - - 2,527 2,527
Balance at 28 February 2002 6,465 77,909 5,247 89,621
Net income for the period - 17,003 - 17,003
Translation differences - - -928 -928
Balance at 31 August 2002 6,465 94,912 4,319 105,696
THE NANDO`S MISSION
Nando`s seeks to be recognised as a global brand that consistently delivers
quality, value and commitment to its customers. This underpins the economic
value of the Nando`s brand ensuring future sustainable growth in headline
earnings.
REVIEW OF OPERATIONS
The results of the group for the six months ended 31 August 2002, together with
comparative figures, are shown alongside.
1. Financial overview
The group has performed in line with the board`s expectations for the six
months ended 31 August 2002.
Nando`s has continued to maintain its growth path with headline earnings
increasing by 45.8 % over the corresponding previous period.
Group revenue comprising sales, royalties and master franchise premiums
increased by 12.31 %.
Finance costs reduced by 2.23 %. Net income before taxation and before
contribution from associated companies increased by 10.80 % over the
corresponding previous period. The group`s attributable share of the net
income from associated companies increased by 130.8%. This reflects the
increased contribution from the United Kingdom operation in which the group
has a 36% interest.
Interest bearing debt was R45.9 million (including shareholders` loans of
R 9.3 million) compared to R45.5 million (including shareholders` loans of
R12.5 million) at 28 February 2002. The debt to equity ratio improved
from
50.7 % to 43.5 %.
Following a strong operational and financial performance, the group`s net
asset value improved by 17.9%, from 13.86 cents per share at 28 February
2002 to 16.35 cents per share.
2. Operational review
The total number of stores increased by 5.3% from 357 stores to 376 stores.
There are now 196 stores (52.1% of the group`s store base) located
outside
South Africa, which stores contribute 74.04% of the group`s net income
before tax (including net income from associated companies). The segmental
analysis provides a detailed breakdown of jurisdictional performance.
The core international focus areas continue to be the United Kingdom and
Australia. The United Kingdom reported an extremely pleasing
performance,
especially given the intense level of competition experienced in this
market. The contribution received from Australia reduced from the
corresponding previous period due to the slowing momentum of franchise
store fee receipts. The Australian business platform is to be consolidated
before the store opening programme is again accelerated.
The performance of Malaysia improved significantly over the previous year.
Trading conditions in the Middle East continue to be affected by volatile
economic and political conditions. This uncertainty is reflected in the
regional performance. We do not expect this situation to resolve itself in
the near future.
Innscor Regional Foods, the group`s African joint venture, has delivered a
meaningful contribution following the restructured arrangement with Innscor
Africa Limited and ExxonMobil.
All costs incurred by the group in relation to the establishment of a
retail presence in North America have been expensed in the year under
review. Further losses are expected to be sustained for the remainder of
the year in developing the grocery business in this highly competitive
market.
3. Accounting policies
The accounting policies adopted for purposes of this interim report comply,
in all material respects, with South African Statements of Generally
Accepted Accounting Practice. These accounting policies are consistent
with those applied in the audited annual financial statements for the year
ended 28 February 2002.
4. Independent global review by Deloitte & Touche
This interim report has been the subject of review by our auditors,
Deloitte & Touche, who have performed this review in accordance with the
guideline entitled "Guidance for Auditors on Review of Interim Financial
Information", issued by the South African Institute of Chartered
Accountants. A copy of their unqualified review report is available for
inspection at the registered office of the company.
5. Dividend
The board has resolved not to declare an interim dividend. Cashflow from
operations will be utilised to reduce interest- bearing debt.
6. Further cautionary announcement
Shareholders are referred to the initial cautionary announcement, published
on SENS and in the press on 13 August 2002 and further cautionary
announcements on 10 September and 13 October in which announcements
shareholders were advised that the controlling shareholders of NGH are
considering a transaction that could result in an offer to the shareholders
of NGH other than the controlling shareholders to acquire all their NGH
shares at 65 cents per share. Shareholders should continue to exercise
caution when dealing in their NGH shares until such time as a further
announcement is made.
7. Prospects.
Based on the existing fundamentals within the group and barring a major
shock in the world economy, we believe that the positive momentum of the
group will be maintained for the six months ending 28 February 2003.
Robert Brozin Les Perlman Sandton
Chief executive officer Chief financial officer 27 November 2002
SEGMENTAL ANALYSIS
South United Australia Middle Canada
Africa Kingdom East
Revenues 168,077 Note 1 46,210 18,948 5,894
Income before 7,731 16,584 531 -3,378 280
Taxation
Pacific Africa USA Europe Total
Rim
Revenues 6,263 3,239 198 248,829
Income before 4,957 2,768 -1,703 198 27,968
Taxation
Note1: Revenues exclude revenues from associate companies.
South Australia Middle Canada Total
Africa East
Assets
- non current 145,949 40,322 14,139 4,930 205,340
- current 67,371 16,415 9,092 3,622 96,500
213,320 56,737 23,231 8,552 301,840
Liabilities
- non current 53,352 5,904 758 20 60,034
- current 99,442 15,228 18,055 3,385 136,110
152,794 21,132 18,813 3,405 196,144
NANDO`S GROUP HOLDINGS GROUP STORE NUMBERS
End of February1997 1998 1999 2000 2001 2002 August 02
Total Total Corporate Franchise
Stores Stores
South Africa 100 122 142 147 160 177 180 63 117
Australia 7 14 32 33 48 59 68 19 49
United Kingdom 7 7 15 23 30 47 52 52 0
Israel 4 6 9 9 10 11 9 6 3
Canada 3 4 7 6 7 8 10 2 8
Malaysia 0 0 3 6 10 13 14 0 14
Saudi Arabia 0 0 2 2 3 3 3 0 3
Pakistan 0 0 0 0 0 1 1 0 1
Qatar 0 0 0 0 0 1 2 0 2
Egypt 0 0 0 1 0 0 0 0 0
Botswana 3 3 3 3 4 6 6 0 6
Ivory Coast 0 0 0 0 1 1 1 0 1
Kenya 0 0 3 6 7 6 6 0 6
Malawi 0 0 0 1 1 1 1 0 1
Mocambique 0 0 0 1 1 1 1 0 1
Tanzania 0 0 0 0 1 1 1 0 1
Uganda 0 0 0 1 1 1 1 0 1
Zambia 0 0 0 1 2 2 2 0 2
Zimbabwe 13 13 18 18 18 18 18 0 18
137 169 234 258 304 357 376 142 234
NGH has a 25% equity interest in Innscor Regional Foods Limited which provides
the group with further interests in an additional 34 units in Ghana, Ivory
Coast, Kenya, Mocambique, Tanzania, Uganda and Zambia, based on the Innscor
multi brand concept.
Directors: RC Brozin (ceo), MA Brey*, LZ Brozin*, FOSD Duarte, RAG
Enthoven*, F Guimaraes,
L Perlman, MD Radomsky, FJ Robertson*, BG Sacks, K Utian. (*non-executive)
Secretary: EHL Klynsmith B Comm (Acc.) (Hons.) C.A (S.A)
Registered office: 64 Third Avenue, Inanda, Sandton, 2196
Transfer Secretaries: Computershare Services (South Africa) (Pty) Ltd.
70 Marshall Street, Johannesburg, 2001 PO Box 61051, Marshalltown, 2107.
Visit the Nando`s website at www.nandos.com
Date: 29/11/2002 08:38:00 AM Produced by the JSE SENS Department
