| Thu 5 Dec 2002, 13:40 | | Metro Cash And Carry Limited - Interim Results For |
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Metro Cash And Carry Limited - Interim Results For the six Months Ended 31
October 2002.
METRO CASH AND CARRY LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1946/021315/06
Share code: MTC ISIN: ZAE000012688
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 OCTOBER 2002
Turnover increases by 41%
Operating income increases by 64%
Cash generated from operating activities exceeds R600 million
Headline earnings per share increases by 34%
INCOME STATEMENT
Reviewed Reviewed Audited
Six months Six months Year
ended ended ended
31 October 31 October 30 April
2002 2001 2002
R`000 R`000 R`000
Revenue 25 341 721 18 011 852 43 089 541
Cost of sales (24 268 457) (17 381 839) (41 376 427)
Administration, human
resource and information
systems costs (360 062) (179 814) (597 547)
Operating income before
depreciation and interest paid 713 202 450 199 1 115 567
Depreciation of tangible
and intangible assets (152 115) (107 058) (225 842)
Operating income 561 087 343 141 889 725
Interest paid (108 776) (90 301) (194 906)
Income before exceptional
items and taxation 452 311 252 840 694 819
Exceptional items
before taxation 43 061 225 487 183 021
Income before taxation 495 372 478 327 877 840
Taxation (168 160) (80 146) (248 978)
Income after taxation 327 212 398 181 628 862
Income attributable to
outside shareholders (118 005) (70 650) (168 390)
Income attributable to ordinary
shareholders 209 207 327 531 460 472
DETERMINATION OF HEADLINE EARNINGS
Income attributable to
ordinary shareholders 209 207 327 531 460 472
Carrying value of Zimbabwe
operations written off - 19 407 19 407
Profit on sale of investment in
Israeli operations - (244 894) (244 894)
Carrying value of Zambian
operations written off 21 901 - 4 327
Surplus arising from allotment of
shares by the Australian subsidiary (64 962) - -
Adjustment arising from purchase by
subsidiary of its preference shares
and conversion of remainder to
ordinary shares - - 38 139
Net loss on disposal of businesses
and stores in subsidiaries - 21 725 28 668
Amortisation of goodwill 19 986 11 662 36 325
Headline earnings 186 132 135 431 342 444
Ordinary shares in issue (000`s)
- total 1 741 855 1 685 846 1 707 762
- weighted average 1 736 225 1 685 846 1 693 151
Headline earnings per share (cents) 10.72 8.03 20.23
Attributable earnings per
share (cents) 12.05 19.43 27.20
ABRIDGED BALANCE SHEET
31 October 31 October 30 April
2002 2001 2002
R`000 R`000 R`000
Assets
Non-current assets 2 383 440 1 914 622 2 231 685
Tangible assets 1 207 423 990 068 1 090 165
Intangible assets 878 912 582 409 835 722
Investments and loans 159 874 160 525 161 560
Deferred taxation 137 231 181 620 144 238
Current assets 8 616 579 7 009 392 7 612 781
Inventories 3 347 518 2 717 444 2 919 095
Accounts receivable 4 309 062 3 793 839 3 885 271
Bank balances and cash 959 999 498 109 808 415
Total assets 11 000 019 8 924 014 9 844 466
Equity and liabilities
Shareholders` equity
Capital and reserves 1 466 667 1 395 044 1 301 016
Outside shareholders` interest 757 590 307 064 442 465
Non-current liabilities 1 528 907 1 722 396 1 647 928
Deferred taxation 5 121 4 130 5 054
Interest bearing liabilities 1 523 786 1 718 266 1 642 874
Current liabilities 7 246 855 5 499 510 6 453 057
Non-interest bearing liabilities 6 916 082 4 961 559 5 929 292
Interest bearing liabilities 330 773 537 951 523 765
Total equity and liabilities 11 000 019 8 924 014 9 844 466
Capital expenditure
Expended during the period 108 388 48 959 100 923
Committed or authorised 16 519 20 644 12 509
Contingent liabilities 26 285 42 263 26 870
Ordinary shares in issue (000`s) 1 741 855 1 685 846 1 707 762
Net asset value per share (cents) 84.2 82.8 76.2
ABRIDGED CASH FLOW INFORMATION
31 October 31 October 30 April
2002 2001 2002
R`000 R`000 R`000
Net cash flow
from operations 712 571 401 145 1 071 017
Investment income 18 588 15 141 35 183
(Increase)/Reduction
in working capital (123 591) 104 722 (21 082)
Cash generated from
operating activities 607 568 521 008 1 085 118
Finance costs (108 776) (90 301) (194 906)
Taxation paid (101 596) (54 728) (102 652)
Cash inflow from operations 397 196 375 979 787 560
Cash (utilised)/realised from
investing activities (126 459) (90 024) 93 982
270 737 285 955 881 542
Net cash inflow/(outflow) from
financing activities 98 032 (354 098) (644 605)
Net proceeds of
share issues 224 227 14 190 33 924
Net proceeds from sale and
lease-back of properties 112 800 - -
Net repayment of interest bearing
liabilities (181 394) (156 036) (617 164)
Payments to outside shareholders (57 601) (212 252) (61 365)
Increase/(decrease) in cash
and cash equivalents 368 769 (68 143) 236 937
STATEMENT OF CHANGES IN SHAREHOLDERS` EQUITY
31 October 31 October 30 April
2002 2001 2002
R`000 R`000 R`000
Balance at beginning of year
(as previously reported) 1 301 016 1 088 930 1 088 930
Prior year adjustment
for employee benefits - - (116 512)
Restated balance at
beginning of year 1 301 016 1 088 930 972 418
Issue of ordinary shares
Non-cash 85 388 - -
Share issue expenses (354) - (170)
Capital reduction for odd-lot offer (156) - -
Movements in distributable reserves
Income attributable to
ordinary shareholders 209 207 327 531 460 472
Movements in non-distributable reserves
Foreign currency translation reserve (128 434) (21 417) (122 261)
Disposal of joint venture - - (9 443)
Balance at end of period 1 466 667 1 395 044 1 301 016
SEGMENTAL INFORMATION
Southern
Australia Africa Africa Corporate Total
Six Six Six Six Six
months months months months months
ended ended ended ended ended
31 Oct 31 Oct 31 Oct 31 Oct 31 Oct
2002 2002 2002 2002 2002
R`000 R`000 R`000 R`000 R`000
Sales to customers 17 406 133 6 581 690 1 335 310 25 323 133
Dividends received 4 682
Interest received 13 906
Total revenue 25 341 721
Segment result
- continuing
operations 387 277 147 733 47 362 (10 629) 571 743
Income from
associated company - -
Amortisation of
Goodwill
arising on
consolidation (12 715) (11 847) (24 562)
Loss - discontinued
operations -
Interest received 13 906
Interest paid (108 776)
Exceptional items 43 061
Income before taxation 495 372
Total depreciation
and amortisation 94 466 35 125 8 431 14 093 152 115
SEGMENTAL INFORMATION - CONTINUED
Southern
Australia Africa Africa Corporate Total
Six Six Six Six Six
months months months months months
ended ended ended ended ended
31 Oct 31 Oct 31 Oct 31 Oct 31 Oct
2001 2001 2001 2001 2001
R`000 R`000 R`000 R`000 R`000
Sales to customers 11 451 167 5 372 813 1 172 731 17 996 711
Dividends received 5 311
Interest received 9 830
Total revenue 18 011 852
Segment result
- continuing
operations 237 693 94 616 47 532 (2 879) 376 962
Income from
associated company 340 340
Amortisation of
Goodwill
arising on
consolidation (10 516) (2 440) (12 956)
Loss - discontinued
operations (31 035)
Interest received 9 830
Interest paid (90 301)
Exceptional items 225 487
Income before taxation 478 327
Total depreciation
and amortisation 60 288 36 306 8 024 2 440 107 058
SEGMENTAL INFORMATION - CONTINUED
Year ended
30 April 2002
R`000
Sales to customers 43 054 358
Dividends received 5 949
Interest received 29 234
Total revenue 43 089 541
Segment result - continuing
operations 942 597
Income from
associated company 2 070
Amortisation of Goodwill
arising on consolidation (43 222)
Loss - discontinued operations (40 954)
Interest received 29 234
Interest paid (194 906)
Exceptional items 183 021
Income before taxation 877 840
Total depreciation
and amortisation 225 842
COMMENTS
TRADING
Against a backdrop of deteriorating world economic conditions, the threat of
war in the Middle East and escalating terrorist activity around the globe, the
Group has produced outstanding results for the six months to 31 October, with
turnover totalling R25.3 billion, an increase of 41% over the R18 billion of the
previous year. Offshore operations contributed 75% of the Group`s turnover and
77% of operating income.
Earnings before interest, tax, depreciation and amortisation (EBITDA) for the
period totalled R713 million, an increase of 58% over the previous year and
income before exceptional items and taxation totalled R452.3 million, an
increase of 79% on the previous year`s R252.8 million. Headline earnings per
share for the period increased by 34% to 10.7 cents.
Cash generated from operating activities exceeded R607 million, the Group`s
net cash resources increased by R369 million and foreign long term borrowings
were reduced by a further A$35 million during the period. Short term expensive
borrowings in South Africa have been replaced with more cost effective longer
term borrowings to the extent of R120 million, in terms of a property sale and
lease-back transaction concluded in October.
METCASH TRADING LIMITED, AUSTRALASIA
Australia has produced yet another outstanding set of results.
Turnover growth for the period, in Australian Dollars, was a creditable 21%,
while earnings after taxation increased by 43%. The strength of this performance
was again highlighted by the fact that cash generated from operations totalled
A$88 million (R475 million). Turnover, when converted to Rands, totalled R17.4
billion, an increase of 52% over the R11.5 billion achieved in 2001. Trading
results for the year have been converted to Rands at an average rate of A$1 =
R5.40 (2001 - A$1 = R4.30).
All trading divisions reported increased turnover, earnings and strong cash
flows, with IGA Distribution delivering a particularly good performance, boosted
by the acquisition of new customers. This period witnessed the return to
anticipated profitability levels of the Campbells Cash & Carry division.
The recently announced prospective acquisition in the Philippines is currently
the subject of an extensive due diligence. In anticipation of a positive
outcome, the Australian company successfully placed 18 million shares and raised
A$38 million towards the purchase consideration. This transaction has resulted
in a surplus of R65 million which is reflected as an exceptional item.
METCASH S.A. LIMITED
The strategic and rationalisation measures implemented last year have
undoubtedly yielded the desired results that are clearly reflected in the
exceptional performance of this business unit. Turnover for the period totalled
R6.6 billion, an increase of 23% over the previous year. Operating income
increased by 56% to total R148 million for the period. These results were
achieved in a market that is the most competitive yet experienced in the
industry.
The trading results of the Hong Kong operation were included within this
business unit for the first time and contributed R248 million in turnover (2001
- R183 million) and R15 million in operating income (2001 - R11 million) for the
period. The comparative figures have been adjusted accordingly.
All other divisions in this business unit performed well and reflected improved
levels of profitability and stronger cash flows.
METCASH AFRICA (PROPRIETARY) LIMITED
Notwithstanding generally tough trading conditions experienced in the various
African countries in which operations are conducted, this company has produced a
solid set of results for the period.
Turnover totalled R1.3 billion, an increase of 14% over that of the previous
year. Operating profit at R47 million for the period was the same as that for
the previous year and was adversely affected by infrastructure set-up and new
store costs in various countries, as well as the introduction of VAT in Botswana
and the ongoing famine conditions in Malawi.
The Zimbabwe operation continues to trade exceptionally well despite the
problems in that country and its results are only included to the extent of
dividends received.
In view of the persistence of problems previously reported in relation to the
Zambian operations and further deterioration in economic conditions in that
country, the decision was taken to write off the full value of this operation.
This is reflected as an exceptional item in the income statement.
ACCOUNTING POLICIES
This report is prepared on the historical cost basis in accordance with South
African Statements of Generally Accepted Accounting Practice and the accounting
policies are consistent with those applied in the last annual report.
COMPARATIVE FIGURES
The comparative figures at 31 October 2001 have been reflected as reported at
that date and have not been adjusted for the AC116 prior year adjustment for
employee benefits which was given effect to at 30 April 2002.
INTEREST PAID
The charge includes non-recurring interest of R18 million relating to prior
year income tax assessments raised and paid during the period.
EXCEPTIONAL ITEMS
Six months Six months
ended ended Year ended
31 October 31 October 30 April
2002 2001 2002
R`000 R`000 R`000
Carrying value of Zimbabwe
operations written off - (19 407) (19 407)
Profit on sale of investment in
Israeli operations - 244 894 244 894
Carrying value of Zambian
operations written off (21 901) - (4 327)
Surplus arising from allotment
of shares by the
Australian subsidiary 64 962 - -
Adjustment arising from purchase
by subsidiary of its preference
shares and conversion of remainder
to ordinary shares - - (38 139)
43 061 225 487 183 021
BORROWING CAPACITY AND INTEREST BEARING DEBT
In terms of the relevant articles of association, the Group has unlimited
borrowing powers.
Interest bearing debt comprises -
Non-current
A$157 million (R879 million) syndicated loan for the balance of the purchase
price of the investment in Australia, bearing interest at approximately 7% per
annum.
A$95 million (R532 million) in terms of a formal accounts receivable
securitisation programme in the Australian subsidiary, bearing interest at
approximately 5% per annum.
R113 million owing in relation to a formal sale and lease-back property
transaction, payable over fifteen years and bearing interest at approximately
13% per annum.
Current
Current portion of securitised loan and fluctuating bank borrowings in
various operations, bearing interest at prime overdraft rates or below.
HEADLINE EARNINGS
The calculation is based on 1 736 225 shares (2001 - 1 685 846 shares), being
the weighted average number of shares in issue during the period under review.
PROSPECTS
The Group has made considerable progress in the six months under review and a
solid foundation has been laid for the future. Trading in Africa is expected to
remain difficult and the various economic and political uncertainties facing the
international community are likely to have some impact. Despite these issues,
the Board is confident that the Group`s growth in headline earnings per share
for the year will be in line with that of the first six months.
CAPITALISATION ISSUE
The Board has resolved to award capitalisation shares to shareholders
recorded in the books of the company on 3 January 2003 in the ratio of 1.7 new
fully paid ordinary shares for every 100 held.
The maximum number of capitalisation shares that will be issued is 29 611
529.
The salient dates are -
Last day to trade cum capitalisation issue Friday, 27 December 2002
New shares listed Monday, 30 December 2002
First date to trade ex capitalisation issue Monday, 30 December 2002
Record date for capitalisation issue Friday, 3 January 2003
Issue of new share certificates or shareholder
account credited with CSDP or broker Monday, 6 January 2003
Shareholders may not dematerialise or rematerialise their holdings of ordinary
shares between Monday, 23 December 2002, and Friday, 3 January 2003, both dates
inclusive.
COMPLIANCE
This interim report complies in all material respects with the requirements
of the Statement of Generally Accepted Accounting Practice AC127 (Interim
Financial Reporting).
AUDIT REVIEW
The interim financial results have been reviewed by the Group`s auditors,
Ernst & Young. Their unqualified review opinion is available for inspection at
the company`s registered office.
On behalf of the Board
Dr F van Zyl Slabbert C S dos Santos
Chairman Chief Executive
5 December 2002
DIRECTORATE AND ADMINISTRATION
Directors: Dr F van Zyl Slabbert (Chairman)*, C S dos Santos (Chief
Executive), J L Grainger, B J Hale, D Kashuv (Israeli), B Joseph, L M
Mathabathe, J R McAlpine*, H Mer, G H Pieterse*, A Reitzer, G B Rubenstein*, V D
Rubin, S O Shonhiwa*, R D Taurog *non-executive
Group Company Secretary: P M Gishen (Miss)
Registered office: First Floor, 33 Scott Street, Waverley, Johannesburg 2090
(PO Box 1970, Highlands North 2037)
Transfer secretaries: Computershare Investor Services Limited, 70 Marshall
Street, Johannesburg 2001 (PO Box 1053, Johannesburg 2000)
Date: 05/12/2002 01:19:15 PM Produced by the JSE SENS Department
