| Thu 29 May 2003, 9:52 | | Mr Price Group Limited - Audited Group Results For |
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Mr Price Group Limited - Audited group results for the year ended 31 March 2003
MR PRICE GROUP LIMITED
Registration number 1933/004418/06
Incorporated in the Republic of South Africa
ISIN: ZAE 000026951
JSE share code: MPC
Audited group results for the year ended 31 March 2003
Highlights
- Profit before exchange differences up 54% to R279 million
- Headline earnings per share up 20% to 71,5 cents
- Sales increase up 19% to R3,6 billion
- Annual dividends increased by 39%
CONSOLIDATED INCOME STATEMENT
2003 2002 %
R"000 March March change
Turnover 3 560 135 2 979 520 19
Other income 43 468 41 936 4
Total revenue 3 603 603 3 021 456 19
Costs and expenses 3 324 501 2 840 718 17
Profit before net foreign exchange 279 102 180 738 54
(losses)/gains
Net foreign exchange (losses)/gains (28 051) 21 706
Profit from operating activities 251 051 202 444 24
Net finance costs 10 602 9 547 11
Profit before taxation 240 449 192 897 25
Taxation 78 993 54 243 46
Net profit for the year 161 456 138 654 16
Preference dividends 8
Profit attributable to ordinary 161 456 138 646 16
shareholders
Weighted average number of ordinary 235 990 235 525 -
shares in issue (000)
Earnings per ordinary share
(cents)(weighted)
- basic 68,4 58,9 16
- headline 71,5 59,5 20
- diluted 67,3 58,3 15
Distribution per ordinary share 25,0 18,0 39
(cents)
Distribution cover (times) 2,9 3,3 (12)
-CONSOLIDATED BALANCE SHEET
2003 2002
R"000 March March
Assets
Non-current assets 576 582 443 736
Property, plant and equipment 267 619 190 060
Intangibles 9 211 8 044
Long-term receivables 295 038 242 974
Deferred taxation assets 4 714 2 658
Current assets 1 113 048 1 036 126
Inventories 574 211 418 453
Accounts receivable 331 687 334 989
Bank balances and cash 207 150 282 684
Total assets 1 689 630 1 479 862
Equity and liabilities
Capital and reserves 788 918 673 010
Non-current liabilities 360 420 324 249
Long-term liabilities 63 535 86 488
Deferred taxation liabilities 296 885 237 761
Current liabilities 540 292 482 603
Trade and other payables and provisions 519 793 471 970
Other current liabilities 20 499 10 633
Total equity and liabilities 1 689 630 1 479 862
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
2003 2002
R"000 March March
Opening capital and reserves 673 010 564 739
Increase in share capital and share premium 1 625 535
Redemption of preference share capital (300)
Profit attributable to ordinary shareholders 161 456 138 646
Ordinary distribution (47 173) (30 610)
Closing capital and reserves 788 918 673 010
Notes
1. The accounting policies applied are in compliance with South African
Statements of Generally Accepted Accounting Practice and are consistent with
those applied in the latest annual financial statements.
2. The results for the year ended 31 March 2003 have been audited by Ernst &
Young. Their unqualified opinion is available for inspection at the company"s
registered office.
3. The process of resolving the taxation queries relating to the export
partnerships referred to in the previous annual financial statements is ongoing.
CONSOLIDATED CASH FLOW STATEMENT
2003 2002
R"000 March March
Cash inflows from operating activities 148 280 269 870
Operating profit before working capital 284 556 232 600
changes
Working capital changes (105 338) 48 059
Net interest received 28 294 27 458
Taxation paid (12 059) (7 629)
Dividends paid (47 173) (30 618)
Cash outflows from investing activities (202 486) (93 168)
Advances in respect of long-term receivables (42 969) (25 228)
Replacement of property, plant and equipment (27 149) (13 175)
Additions to property, plant and equipment (130 482) (51 080)
Additions to intangible assets (6 223) (5 124)
Proceeds on disposal of property, plant and 4 337 1 439
equipment
Cash outflows from financing activities (21 328) (19 551)
Net (decrease)/increase in cash and cash (75 534) 157 151
equivalents
Cash and cash equivalents at beginning of 282 684 125 533
the year
Cash and cash equivalents at end of the year 207 150 282 684
SUPPLEMENTARY INFORMATION
2003 2002
March March
Number of ordinary shares in issue (000) 236 253 235 605
Net asset value per ordinary share (cents) 334 286
R"000 R"000
Reconciliation of headline earnings
Attributable earnings 161 456 138 646
Amortisation of goodwill 368 1 515
Loss on disposal and scrapping of property, 10 001 108
plant and equipment
Taxation adjustment (3 000) (32)
Headline earnings 168 825 140 237
Depreciation and amortisation for the year 70 790 67 027
Capital expenditure
- expended during the year 163 854 69 379
- authorised or committed at year end 69 190 100 000
Borrowing powers are limited to R1 183 million and unutilised borrowing
facilities amount to R280 million.
SEGMENTAL REPORTING
Business segments
The group"s retail activities are organised into two divisions for operational
and management purposes.
The main constituent of "Other" is the group"s shopfitting business.
2003 2002 %
R"000 March March change
Revenue
Cash division 2 593 024 2 091 188 24
Credit division 990 594 908 593 9
Central services 10 814 10 673
Other 93 104 40 673
Eliminations (83 933) (29 671)
Total 3 603 603 3 021 456
Operating profit
Cash division 176 393 117 401 50
Credit division 110 381 76 746 44
Central services (12 248) (13 205)
Other 13 352 533
Net foreign exchange (28 051) 21 706
(losses)/gains
Eliminations (8 776) (737)
Total 251 051 202 444
DECLARATION OF FINAL DIVIDEND
Notice is hereby given that the directors have declared a final dividend of 19
cents per share to the holders of ordinary and the unlisted B ordinary shares.
The following dates are applicable:
Last date to trade "cum" the dividend Friday 20 June 2003
Date trading commences "ex" the dividend Monday 23 June 2003
Record date Friday 27 June 2003
Date of payment Monday 30 June 2003
Shareholders may not dematerialise or rematerialise their shares between
Monday 23 June 2003 and Friday 27 June 2003, both dates inclusive.
On behalf of the board Durban
C S YUILL - Secretary 29 May 2003
COMMENTARY
RESULTS
Group turnover increased by 19% to R3,6 billion compared with growth of 15% for
clothing, footwear and textiles reported by the Retail Liaison Committee (RLC).
Profit from operating activities before net foreign exchange losses and gains
increased by 54% to R279 million with the operating margin at this level
improving from 6,1% to 7,8%. Whereas in the previous year the group highlighted
material foreign exchange gains of R21,7 million resulting from the dramatic
fall in the value of the rand, in the current year operating results were
impacted by losses of R28,1 million attributable to the sharp recovery in the
currency. The foreign exchange differences also contributed to a higher tax
rate. Notwithstanding this, attributable income rose by 16% to R161,5 million
and headline earnings of 71,5 cents per share were 20% higher. The distribution
to shareholders for the year has been increased by 39% to 25 cents per share.
Trading
The first and second halves of the 2003 year were marked by very different
trading characteristics. The RLC recorded a turnover growth of 19% in the first
half and much lower growth of 12% in the second half, as the impact of the
earlier decline in the rand resulted in escalating inflation and higher interest
rates. The group, however, outperformed the index in both of these periods with
growth of 22% in the first half and 18% in the second half.
The cash division (Mr Price Weekend Material, Mr Price Home and Sheet Street)
increased revenue by 24% and achieved operating profits which, before the impact
of the forex differences, rose by 50% to R176,4 million resulting in the
operating margin at this level improving from 5,6% to 6,8%. The expansion
programme has resulted in the addition of over 16 000 square metres of trading
space during the year. Exciting assortment extensions and new brands are being
presented in the enlarged stores and have been well received by customers. With
72 new outlets having opened in the year, the division now operates 530 stores.
The credit division (Milady"s, The Hub and Galaxy & Co) achieved revenue growth
of 9% for the year. Assisted by determined focus on the target customer and
tight control of overheads, operating profits rose by 44% to R110,4 million. The
division"s operating margin increased from 8,8% to 11,6%. The debtors" book
remains well controlled and the bad debt ratio has once again improved, reducing
to 2,4% of credit sales. 264 stores were operated at the year-end.
Finance
Cash sales increased to 84% of total sales, up from 82% in the previous year.
After a significant commitment of R164 million to capital expenditure, the group
was able to report cash resources of R207 million at year-end. Inventories were
37% higher primarily due to the impact of the category extensions, the new
departments and the store opening programme in the cash division.
Post Balance Sheet Event
Subsequent to the end of the financial year, taking into account the changed
economic prospects in the South American region, the decision has been taken to
close the six test stores in Chile. Closure costs are not anticipated to be
material and will not adversely impact on headline earnings.
Prospects
The group has its focus very much on the long-term and is accordingly committed
to continuing with the expansion programme in prime locations. This programme
has proved conclusively that customers respond positively to the new store
layouts, brands and category extensions. While there have been good short-term
gains, the real benefits from the enhanced stores will augment performance in
future years.
The trend of tighter trading conditions experienced in the second half of the
year will continue well into the first half of the new financial year as high
interest rates and inflation continue to negatively impact on consumer spending.
This will inhibit the earnings growth in the first half which is measured
against the base of very strong trading conditions in the comparable period.
Approximately two thirds of the group"s operating profits are, however, earned
in the second half and the value retailing formula of the group, assisted by
lower-priced inputs of merchandise and the overdue reduction in interest rates,
should result in further market share gains and earnings growth for the year.
On behalf of the board
S B COHEN - Joint chairman
L J chiappini - Joint chairman Durban
A E McARTHUR - Chief executive officer 29 May 2003
Directors: L J Chiappini (Joint chairman), S B Cohen (Joint chairman), A E
McArthur (Chief executive officer), C Hultzer, M R Johnston, Prof. L J Ring
(USA), W J Swain, C S Yuill, N P Woodroffe (alternate)
This report is available on our website: www.mrpricegroup.com
TRANSFER SECRETARIES
Computershare Investor Services Limited, 70 Marshall Street, Johannesburg, 2001.
P O Box 1053, Johannesburg, 2000. Telephone: (011) 370 5000
Date: 29/05/2003 09:30:08 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
