| Wed 19 Feb 2003, 15:24 | | Tradehold Limited - Interim results for the six mo |
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Tradehold Limited
(Registration number 1970/009054/06)
JSE share code: TDH ISIN number: ZAE000026902
Interim results for the six months to 31 December 2002
Group income statement
12
months Unaudited Unaudited 12 months
to 6 months to 6 months to to
30/6/02 30/6/02
31/12/01 31/12/02 31/12/02 31/12/01
GBP`000 GBP`000 GBP`000 R`000 R`000 R`000
451 673 262 490 236 414 Turnover 3 635 080 3 674 860 6 824 309
Continued
324 914 185 315 184 888 operations 2 842 821 2 594 410 4 907 860
Discontinued
126 759 77 175 51 526 operations 792 259 1 080 450 1 916 449
Operating
(19 238) 10 878 (1 358) (loss)/profit (33 178) 152 286 (268 904)
Continued
4 363 17 216 12 535 operations 181 886 241 018 65 755
Discontinued
(23 601) (6 338) (13 893) operations (215 064) (88 732) (334 659
Net interest
(610) (1 001) 511 received/(paid) 8 049 (14 013) (4 685)
(Loss)/profit
before
exceptional
(19 848) 9 877 ( 847) items (25 129) 138 273 (273 589)
Exceptional
(4 009) - (12 190) items (195 079) - (63 924)
(Loss)/profit
(23 857) 9 877 (13 037) before taxation (220 208) 138 273 (337 513)
(1 017) 627 1 505 Taxation 22 523 8 777 (15 000)
(Loss)/profit
(22 840) 9 250 (14 542) after taxation (242 731) 129 496 (322 513)
Outside
shareholders`
(8 319) 3 060 (3 619) interest (65 265) 42 839 (118 718)
Attributable to
normal
(6 262) 3 060 271 activities (1 748) 42 839 (86 093)
Attributable to
exceptional
(2 057) - (3 890) items (63 517) - (32 625)
Net
(14 521) 6 190 (10 923) (loss)/profit (177 466) 86 657 (203 795)
Earnings per
share (cents)
- before
exceptional
(4,5) 2,9 (0,8) items (13,2) 41,0 (61,9)
- after
exceptional
(5,2) 2,9 (3,1) items (51,1) 41,0 (73,1)
- headline
(4,4) 2,9 (0,5) earnings (9,7) 40,4 (60,7)
Number of
shares for
calculation of
earnings
278 688 211 165 347 330 per share (`000) 347 330 211 165 278 688
Group balance sheet
Unaudited Unaudited
30/6/02 31/12/02 31/12/02 30/6/02
GBP`000 GBP`000 R`000 R`000
83 709 79 526 Non-current assets 1 105 417 1 318 035
72 898 68 555 Property, plant and equipment 952 915 1 147 807
10 811 10 971 Investments 152 502 170 228
94 918 106 293 Current assets 1 477 476 1 494 526
57 133 30 769 Inventories 427 689 899 582
16 777 35 914 Accounts receivable 499 208 264 167
21 008 39 610 Bank balances and cash 550 579 330 777
178 627 185 819 Total assets 2 582 893 2 812 561
85 385 78 777 Ordinary shareholders` funds 1 095 196 1 344 455
12 12 Preference share capital 144 144
Outside shareholders` interest
18 970 19 478 270 720 298 693
10 676 9 996 Non-current liabilities 138 944 168 098
24 - Long-term loans - 378
67 68 Deferred taxation 945 1 055
10 585 9 928 Other non-current liabilities 137 999 166 665
63 584 77 556 Current liabilities 1 077 889 1 001 171
Short-term loans and bank
2 736 10 889 overdrafts 151 354 43 086
60 848 66 667 Other current liabilities 926 535 958 085
Total shareholders` funds and
178 627 185 819 liabilities 2 582 893 2 812 561
Analysis of results
Unaudited Unaudited
6 months to 6 months to
31/12/01 31/12/02 31/12/02 31/12/01
GBP`000 GBP`000 R`000 R`000
Attributable earnings of
6 693 40 Brown & Jackson plc (6 510) 93 689
- (3 755) Earnings of Tradegro (UK) Ltd (56 325) -
(503) 1 092 Earnings of Tradehold Ltd 16 931 (7 032)
(Loss)/profit before
6 190 (2 623) exceptional items (45 904) 86 657
Attributable exceptional items
- (8 300) (131 562) -
6 190 (10 923) Net (loss)/profit (177 466) 86 657
Group cash flow statement
Unaudited Unaudited
6 months to 6 months to
31/12/01 31/12/02 31/12/02 31/12/01
GBP`000 GBP`000 R`000 R`000
45 090 19 254 Cash flow from operations 247 677 682 744
(1 655) - Dividends paid - (20 066)
43 435 19 254 Cash retained from operations 247 677 662 678
(7 100) (8 985) Investment activities (139 087) (104 574)
Net acquisition of fixed
(6 620) (9 219) assets (142 710) (97 856)
(480) 234 Other investment activities 3 623 (6 718)
36 335 10 269 Net cash flow 108 590 558 104
(32 578) 8 333 Financing activities 111 212 (273 678)
39 436 204 Proceeds from share issue 3 322 541 028
(72 014) 8 129 Net debt raised/(repaid) 107 890 (814 706)
Increase in bank balances and
3 757 18 602 cash 219 802 284 426
Supplementary information
Unaudited Unaudited
6 months to 6 months to
31/12/01 31/12/02 31/12/02 31/12/0
1
GBP`000 GBP`000 R`000 R`000
5 393 4 795 1. Depreciation for the period 74 227 75 502
2. Capital expenditure for the
6 620 9 219 period 142 710 97 856
3. Calculation of headline
earnings
6 190 (10 923) Net (loss)/profit (177 466) 86 657
Attributable exceptional
- 8 300 items 131 562 -
Loss/(profit) on sale and
scrapping of fixed assets
after taxation and outside
(91) 779 shareholders` interest 12 052 (1 278)
6 099 (1 844) (33 852) 85 379
Unaudited Unaudited
30/6/02 31/12/02 31/12/02 30/6/02
4. Number of shares in issue
347 330 347 330 (`000) 347 330 347 330
5. Net asset value per share
24,6 22,7 (cents) 315,3 387,1
6. Investments
10 811 10 971 Loans 152 502 170 228
4 782 381 7. Capital commitments 5 296 75 294
12 421 13 328 8. Contingent liabilities 185 259 195 573
47 923 34 171 9. Operating lease commitments 474 977 754 567
Group statement of changes in shareholders` funds
Unaudited Unaudited
6 months to 6 months to
31/12/01 31/12/02 31/12/02 31/12/01
GBP`000 GBP`000 R`000 R`000
53 327 85 385 Balance at 1 July 1 344 455 605 621
39 429 - Proceeds from share issue - 540 930
8 323 (103) Exchange rate adjustments (143 929) 479 593
Surplus on revaluation of land
- 4 418 and buildings 72 136 -
Net (loss)/profit for the
6 190 (10 923) period (177 466) 86 657
(915) - Dividend paid - (11 097)
106 354 78 777 Balance at 31 December 1 095 196 1 701 704
The six months covered by this report have been a most eventful period.
Just before the end of the financial year, Brown & Jackson gave notice of
its intention to restructure its business.
Simultaneously Tradehold reduced its holding in Brown & Jackson from 69%
to 55%, thus enabling Mr Angus Monro, a well-known figure in British
retailing, to acquire 10% of the issued share capital of the company. The
other 4% was sold to a number of senior retail executives who had
previously worked with Mr Monro. In all instances these share transactions
were subject to their joining the group.
On 30 August 2002 Brown & Jackson announced that it was to sell some of
its wholly-owned subsidiaries to Tradegro, a wholly-owned subsidiary of
Tradehold. These were three of Brown & Jackson`s four retail chains - What
Everyone Wants (WEW), Your More Store (YMS) and The Famous Brunswick
Warehouse (TFBW) - as well as 16 stores in Poland and a portfolio of 73
properties valued at GBP34,4 million. The three retail chains all reported
a loss in the 2002 financial year while the Polish operation had not yet
reached break-even. All the properties acquired by Tradegro were at the
time occupied by stores operated by the four chains.
The main reason for the sale to Tradegro was the poor performance
collectively of YMS, WEW and TFBW which was impacting negatively on the
market rating of Brown & Jackson, and in the process eroding substantial
shareholder value. In addition, efforts to restore them to profitability
were taking up an inordinate amount of group management`s time.
The transaction left Brown & Jackson with only its core business, the
Poundstretcher chain, which produced 60% of the turnover in the 2002
financial year and was the only one of the four business units to report a
profit for that period.
Mr Monro became chief executive of both Brown & Jackson and Poundstretcher
on 1 September 2002. He has since been joined by his ex-colleagues who, in
key positions at Poundstretcher, have greatly strengthened the management
team of that business.
Operating review
Poundstretcher
Much has been done since the restructuring to improve the performance of
Poundstretcher and increase its profitability. The new merchandise ranges
have been well received by customers, and as a result of better trading
the business, which operates 338 stores throughout the UK, is now in good
financial order, with nil debt and a strong cash position.
For the six months ended 28 December 2002 total sales increased by 2,7%
and like-for-like sales by 0,8%. This trend has accelerated in the new
reporting period, and in the seven weeks to 15 February this year total
sales were up 15% while like-for-like sales were 13% higher. Margins were
in line with expectations while stock levels were some 30% lower than the
previous year.
WEW, TFBW and YMS
Before the restructuring, an extensive programme to arrest the
deteriorating performance of the three smaller chains was introduced. Far-
reaching management changes were made while much attention was devoted to
clearing accumulated stock, clogging up the supply chain. This unavoidably
involved heavy write-downs, which greatly affected the bottom line.
Although at the time of the restructuring it seemed as if the
deteriorating performance of the three smaller chains had been arrested,
it was also clear that management had only started to lay the foundation
for a return to profitability, and that it would, at best, be a slow,
risky and costly process. Although the prognosis for YMS was better,
neither WEW nor TFBW was at that stage expected to produce profits within
18 to 24 months.
Although by early December the performance of WEW in particular had
improved considerably, the boards of directors of both WEW and TFBW felt
the substantial additional capital investment required for the full
recovery of these two businesses could not be justified. Consequently, on
9 December 2002, the directors successfully applied for the two chains to
be placed under administration with a view to finally either selling or
restructuring them. Between them they had suffered losses of GBP24 million
in the 2002 financial year.
Comments on the results
The results of WEW and TFBW were deconsolidated as from 9 December 2002,
the date on which these two businesses were placed under administration.
Exceptional items of GBP12,19 million result from the closing of WEW and
TFBW.
Accounting policy
The interim report has been compiled in terms of statement RE127: Interim
financial reporting and the Fourth Schedule to the South African Companies
Act. The accounting policy is in all material respects in accordance with
that adopted in the financial statements for the year ended 30 June 2002.
Outlook
As a result of WEW and TFBW being placed under administration, Tradehold
will no longer have to shoulder the financial burden of these two
businesses. It can consequently apply all its resources to growing its
successful retail interests. At Brown & Jackson an extensive review has
been completed which will result in a major repositioning of
Poundstretcher. The Board consequently feels it can view the future with
considerable confidence.
New offices
In view of its investment focus on the UK and Europe, Tradehold has
established a branch office on the Continent to more effectively manage
its investments and envisaged expansion. A treasury and financing function
was also located in Europe.
The company remains incorporated in South Africa and its listing on the
JSE Securities Exchange South Africa is not affected. On a practical
level, the move will have no impact on shareholders.
Change in year-end
Tradehold has changed its financial year-end and that of its subsidiaries
from 30 June to the last day of February as it was felt that a February
year-end was better suited to the business cycle of its retail
subsidiaries. The current financial year will therefore end on 28 February
2003.
Reporting currency
As the operations of Tradehold`s subsidiaries are conducted in pound
sterling and because of the distortion caused by the fluctuating value of
the rand, the company is reporting its results in the former currency.
Rand equivalents are provided to comply with regulatory requirements.
C H Wiese C Moore
Chairman Director
Luxembourg
13 February 2003
Date: 19/02/2003 03:12:00 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
