| Thu 20 Feb 2003, 10:12 | | Woolworths Holdings Limited - Unaudited Group Resu |
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WOOLWORTHS HOLDINGS LIMITED - UNAUDITED GROUP RESULTS FOR THE 6 MONTHS ENDED
DECEMBER 2002
WOOLWORTHS HOLDINGS LIMITED
Unaudited Group Results for the 6 months ended December 2002
highlights from continuing operations
* Revenue 20.6% to R5bn
* Operating profit 37.7% to R450m
* Headline earnings per share 60.3% to 33.5c
* Interim dividend per share 40.0% to 10.5c
INCOME STATEMENT
Year ended Six months ended
30 June 2002 31 December
(audited) 2002 2001 %
Rm Note Rm Rm Change
9 020.7 Revenue 5 051.3 4 385.3 15.2%
8 825.6 Continuing operations 5 051.3 4 190.2 20.6%
195.1 Discontinued operations - 195.1
Continuing operations
8 421.4 Turnover 4 794.9 4 004.4 19.7%
5 571.8 Cost of merchandise 3 199.5 2 654.2 20.5%
2 849.6 Gross profit 1 595.4 1 350.2 18.2%
404.2 Other income 256.4 185.8 38.0%
2 568.6 Expenses 1 402.0 1 209.4 15.9%
213.5 Depreciation 110.6 99.9 10.7%
503.4 Occupancy cost 259.3 221.2 17.2%
1 238.7 Employment cost 685.8 586.8 16.9%
613.0 Other operating cost 346.3 301.5 14.9%
685.2 Operating profit 449.8 326.6 37.7%
44.5 Interest paid 34.6 23.5 47.2%
640.7 Net profit before 415.2 303.1 37.0%
exceptional items
(41.5) Exceptional items 2 (17.2) (7.8)
599.2 Net profit before tax 398.0 295.3 34.8%
203.6 Tax 3 111.7 100.5 11.1%
395.6 Net profit after tax 286.3 194.8 47.0%
(2.1) Outside shareholders` interest (0.3) (1.5)
393.5 Net profit from 286.0 193.3 48.0%
continuing operations
Discontinued operations
(14.0) Operating loss - (14.0)
(0.7) Interest paid - (0.7)
(14.7) Loss from discontinued operations - (14.7)
(139.6) Exceptional items 2 - (139.6)
18.8 Outside shareholders` interest - 18.8
(135.5) Net loss from discontinued - (135.5)
operations
Total group
Net profit attributable to ordinary
258.0 shareholders 286.0 57.8 >100%
Reconciliation of headline earnings
258.0 Attributable earnings - 286.0 57.8 >100%
all operations
12.1 Goodwill amortisation 5.0 3.0
Loss/(profit) on disposal of
property, plant and equipment
net of outside shareholders`
(8.8) interest 3.4 (10.2)
Loss on discontinuance
net of outside
115.6 shareholders` interest - 115.6
4.8 Loss on disposal of listed investment - 4.8
17.2 Impairment of property - -
398.9 Headline earnings 294.4 171.0 72.2%
Net loss from discontinued operations
19.9 after outside shareholders` interest - 19.9
Headline earnings from continuing
418.8 operations 294.4 190.9 54.2%
Headline earnings per share (cents)
44.0 - All operations 33.5 18.7 79.1%
46.2 - Continuing operations 33.5 20.9 60.3%
Earnings per share (cents)
28.5 - All operations 32.6 6.3 >100%
43.4 - Continuing operations 32.6 21.2 53.8%
28.0 Diluted earnings per share (cents) 4 31.9 6.2 >100%
20.0 Dividend per share (cents) 10.5 7.5 40.0%
2.2 Dividend cover 3.1 2.8
889.7 Number of shares issued (millions) 868.0 907.0 -4.3%
Weighted average number of shares
905.7 in issue (millions) 877.6 912.0 -3.8%
GROUP ANALYSIS
Revenue
8 421.4 Turnover 4 794.9 4 004.4 19.7%
7 302.0 Woolworths 4 211.8 3 499.5 20.4%
3 834.1 - Textiles 2 185.4 1 863.5 17.3%
3 302.1 - Foods 1 938.6 1 547.8 25.2%
165.8 - Logistics and other 87.8 88.2 -0.5%
1 119.4 Country Road - continuing operations 583.1 504.9 15.5%
355.5 Interest 225.2 164.6 36.8%
48.7 Other revenue 31.2 21.2 47.2%
8 825.6 Continuing operations 5 051.3 4 190.2 20.6%
195.1 Discontinued operations - 195.1
9 020.7 5 051.3 4 385.3 15.2%
Net profit/(loss) before tax and
exceptional items
625.5 Woolworths 411.6 292.8 40.6%
15.2 Country Road 5 3.6 10.3 -65.0%
640.7 Continuing operations 415.2 303.1 37.0%
(14.7) Discontinued operations - (14.7)
626.0 415.2 288.4 44.0%
CASH FLOW STATEMENT
Year ended Six months ended
30 June 2002 31 December
(audited) 2002 2001
Rm Rm Rm
Cash flow from operating activities
581.7 Cash inflow from trading 357.8 274.5
(262.0) Working capital movements (68.0) (92.4)
319.7 Cash generated by operating activities 289.8 182.1
355.5 Interest received and investment income 225.2 165.2
(45.2) Interest paid (34.6) (24.2)
(284.5) Tax paid (100.0) (160.0)
345.5 Cash generated by operations 380.4 163.1
(145.8) Dividends paid (110.4) (77.9)
199.7 Net cash inflow from operating activities 270.0 85.2
187.4 Continuing operations 270.0 88.9
12.3 Discontinued operations - (3.7)
(404.8) Cash outflow from investing activities (257.4) (181.8)
Cash flow from financing activities
41.3 Shares issued 16.6 25.5
(134.7) Shares repurchased by subsidiary (120.2) (38.5)
(0.1) Non-current liabilities repaid (0.1) -
(93.5) Net cash outflow from financing activities (103.7) (13.0)
(298.6) Decrease in cash and cash equivalents (91.1) (109.6)
Cash and cash equivalents at the beginning
(64.0) of the period (361.7) (64.0)
0.9 Effect of foreign exchange rate changes (0.9) 16.8
Cash and cash equivalents at the end of
(361.7) the period (453.7) (156.8)
GROUP ANALYSIS
630.0 Cash generated by operations - before tax 480.4 323.1
579.2 Woolworths 447.1 281.0
50.8 Country Road 33.3 42.1
Gross capital expenditure on property,
335.0 plant and equipment 199.0 175.4
273.7 Woolworths 176.5 112.5
61.3 Country Road 22.5 62.9
BALANCE SHEET
Year ended Six months ended
30 June 2002 31 December
(audited) 2002 2001
Rm Rm Rm
assets
1 535.2 Non-current assets 1 595.7 1 518.8
916.1 Property, plant and equipment 966.7 895.3
81.4 Investments 119.7 63.4
180.2 Loans to customers 170.6 179.0
210.0 Participation in export partnerships 187.9 219.0
20.1 Goodwill 15.0 27.1
112.6 Other loans 123.2 130.2
14.8 Deferred tax 12.6 4.8
2 528.6 Current assets 2 974.4 2 780.3
511.2 Inventories 601.3 636.0
1 348.7 Woolworths card debtors 1 508.6 1 222.8
348.7 Accounts receivable 463.0 464.5
201.5 Loans to customers 229.7 178.2
118.5 Cash and cash equivalents 171.8 278.8
4 063.8 Total assets 4 570.1 4 299.1
equity and liabilities
2 375.8 Capital and reserves 2 374.8 2 371.2
2 350.2 Ordinary shareholders` interest 2 352.9 2 343.2
25.6 Outside shareholders` interest 21.9 28.0
300.8 Non-current liabilities 282.1 318.7
111.0 Post-retirement medical aid liability 119.1 102.8
189.8 Deferred tax 163.0 215.9
1 387.2 Current liabilities 1 913.2 1 609.2
809.7 Accounts payable 1 178.4 1 087.4
97.3 Provisions 109.3 86.2
480.2 Interest-bearing borrowings 625.5 435.6
4 063.8 Total equity and liabilities 4 570.1 4 299.1
264.2 Net asset value per share (cents) 271.1 258.3
GROUP ANALYSIS
4 063.8 Total assets 4 570.1 4 299.1
3 658.0 Woolworths 4 220.6 3 835.5
405.8 Country Road 349.5 463.6
511.2 Inventories 601.3 636.0
339.1 Woolworths 471.6 416.0
172.1 Country Road 129.7 220.0
STATEMENT OF CHANGES IN ORDINARY SHAREHOLDERS` INTEREST
Year ended Six months ended
30 June 2002 31 December
(audited) 2002 2001
Rm Rm Rm
Ordinary shareholders` interest at the beginning
2 238.4 of the period 2 336.1 2 238.4
2 238.4 As previously reported 2 350.2 2 238.4
Adjustment to opening balance arising from the
change in accounting policy for:
- - revaluation of listed investment 2.1 -
- - unearned finance income from export partnerships (16.2) -
Movements for the period:
Share premium arising from shares issued under
41.3 share purchase scheme 16.6 25.5
(134.7) Shares repurchased by subsidiary (120.2) (38.5)
205.2 Recognised gains and losses 120.4 117.8
125.1 Distributable reserves 158.5 28.2
258.0 Net profit attributable to ordinary shareholders 286.0 57.8
(145.8) Dividends paid (110.4) (77.9)
12.9 Net unrealised (loss)/gain on hedging instruments (17.1) 48.3
80.1 Non-distributable reserves (38.1) 89.6
87.4 Exchange differences on translation of (38.1) 96.9
foreign entity
Realisation of translation reserve on closure of
(7.3) discontinued operations - (7.3)
Ordinary shareholders` interest at the end of
2 350.2 the period 2 352.9 2 343.2
NOTES
1. The interim financial statements comply with South African Statements of
Generally Accepted Accounting Practice.
Accounting policies used are consistent with those applicable for the June
2002 financial statements, except as follows:
Following the introduction of AC133, Financial Instruments - Measurement and
Recognition, gains and losses on certain qualifying financial instruments taken
out as cash flow hedges for future transactions are carried in equity and fair
value adjustments on available for sale financial assets are recognised in the
income statement. Opening retained income has been restated to take into account
the change in the basis of valuation of the participation in export partnerships
to amortised cost and the listed investment to market value. These changes have
had the effect of reducing reported profit after tax by R3.9m.
2. Exceptional items
Year ended Six months ended
30 June 2002 31 December
(audited) 2002 2001
Rm Rm Rm
41.5 Continuing operations 17.2 7.8
7.4 Provision for onerous lease commitments 12.2 -
12.1 Goodwill amortisation 5.0 3.0
4.8 Loss on disposal of listed investment - 4.8
17.2 Impairment of property - -
139.6 Discontinued operations - 139.6
131.6 Loss on discontinuance - 131.6
8.0 Restructuring costs - 8.0
181.1 17.2 147.4
3. The effective tax rate of 28.1% (2001: 34.0%) is mainly due to the STC
charge, offset by a tax adjustment of R23.2m relating to previous years.
4. The difference between earnings per share and diluted earnings per share
results from outstanding options in terms of the share purchase scheme.
5. Country Road`s profit before tax is A$0.9m (2001: A$0.3m). The lower rand
profit resulted from second quarter profits being translated at an exchange rate
stronger than the rate at which first quarter losses were sustained, whereas the
rand`s significant weakening in the second quarter of the 2001 interim reporting
period had the opposite effect on that period`s translated results.
6. Unutilised banking facilities amount to R1 470.6m (2001: R1 215.2m), with no
limit on the group`s ability to raise interest-bearing debt.
7. The loss on discontinuance at 31 December 2001 has been restated in line with
the amount disclosed at 30 June 2002.
8. Approved commitments for capital expenditure amount to R140.9m of which
R58.0m has been contracted (2001: R133.7m, R89.0m contracted).
COMMENTARY
GROUP RESULTS
The directors are pleased to report an excellent performance for the 26 weeks
to December 2002.
Headline earnings per share at 33.5c were 60.3% on comparable earnings for
the six months period last year. Headline earnings per share excluding the tax
adjustment relating to previous years increased by 47.8%. Revenue was up 20.6%
to R5 billion (2001: R4 billion) and operating profit was up 37.7% to R450
million (2001: R327 million).
An interim dividend of 10.5 cents (2002: 7.5 cents) per share has been
declared, an increase of 40.0% on the interim dividend last year.
WOOLWORTHS
Positive trading, particularly in the first quarter, and good expense
containment in all divisions resulted in an increase in the net profit before
tax of 40.6% compared to the corresponding period last year. Inflation which was
high at 13.0% in Textiles and 18.2% in Foods is now showing signs of softening.
Sales in our Textiles division improved by 17.3% and by 14.1% in comparable
South African stores and reflected our customers` positive response to our
improved fabrics and styling. Ladieswear performed particularly well while
homeware performed below expectations. Market share on a twelve month moving
average increased to 16.7% (2001: 16.1%).
Our drive to provide our customers with healthy food and innovative ranges at
convenient locations resulted in a growth in food sales of 25.2% and 18.2% in
comparable South African stores. Our market share grew on a twelve month moving
average to 6.8% (2001: 6.3%).
Woolworths Financial Services` interest income grew substantially by 36.8%
due to increased retail sales and higher interest rates. The card and personal
loan books were tightly managed and bad debts were well within acceptable
levels.
COUNTRY ROAD
Trading conditions in Australia remained highly competitive due to major
discounting particularly through Christmas trading. Despite this, sales from
continuing operations grew by 3.3% (in Australian dollar terms) compared to the
corresponding period last year, resulting in a profit of A$0.9 million (2001:
A$0.3 million).
SHARE BUY-BACK
During the period under review, a subsidiary of the company repurchased a
further 26.5 million shares of the company, bringing the total to 59.6 million
shares, at an average cost of R4.28 per share, representing 6.5% of the
company`s issued share capital.
PROSPECTS
Trading at the beginning of the second half has been softer and is unlikely
to improve in the short term. Nevertheless we are still expecting satisfactory
results for the second half.
DIVIDEND
Notice is hereby given that an interim dividend of 10.5 cents per share has
been declared in respect of dividend number 11, for the six months ended 31
December 2002.
Shareholders are advised that the last day to trade ("cum dividend") in order
to participate in the dividend will be Friday, 7 March 2003. The shares will
trade "ex" the dividend from commencement of business on Monday, 10 March 2003
and the record date will be Friday, 14 March 2003. The dividend will be payable
on Monday, 17 March 2003.
Share certificates may not be dematerialised or re-materialised between
Monday, 10 March 2003 and Friday, 14 March 2003, both days inclusive.
On behalf of the board of directors.
DA Hawton SN Susman
Non-executive chairman Chief executive officer
Cape Town
19 February 2003
DIRECTORATE:
Non-executive directors: DA Hawton (Chairman), M Barnes (British),
NL Colne (British), BJ Frost, SV Zilwa
Executive directors: SN Susman (CEO), MR Canning, GP de Kock, RJD Inskip,
NW Thomson
Company Secretary: CL Lowe
Woolworths Holdings Limited: Company registration number 1929/001986/06
Share code: WHL ISIN ZAE000028288
Auditors: Ernst & Young
Sponsor: HSBC Investment Services (Africa) (Pty) Ltd
Registered Office: Woolworths House,
93 Longmarket Street,
Cape Town 8001
Transfer Secretaries: Computershare Investor Services Limited,
70 Marshall Street,
Johannesburg 2001
visit our investor relations site:
www.woolworthsholdings.co.za
Date: 20/02/2003 08:30:00 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
