| Wed 4 Jun 2003, 14:29 | | Metro Cash And Carry Limited - Reviewed Financial |
|
METRO CASH AND CARRY LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1946/021315/06
Share code: MTC ISIN: ZAE000012688
* Turnover above R50 billion
* Income before tax exceeds R1 billion
* Headline earnings per share increases by 29%
* Cash generated by operating activities exceeds R1 billion
REVIEWED FINANCIAL RESULTS FOR THE YEAR ENDED 30 APRIL 2003
INCOME STATEMENT
Year ended Year ended
30 April 30 April
2003 2002
R"000 R"000
Revenue 51 787 714 43 089 541
Cost of sales (49 637 845) (41 376 427)
Administration, human resource and
information systems costs (682 372) (597 547)
Operating income 1 467 497 1 115 567
Depreciation of fixed assets (233 606) (182 620)
1 233 891 932 947
Interest paid (197 264) (194 906)
Income before exceptional items
and taxation 1 036 627 738 041
Exceptional items - see comments 18 046 183 021
Amortisation of goodwill (53 624) (43 222)
Income before taxation 1 001 049 877 840
Taxation (328 991) (248 978)
Income after taxation 672 058 628 862
Income attributable to outside
shareholders (232 378) (168 390)
Income attributable to ordinary
shareholders 439 680 460 472
Determination of headline earnings
Income attributable to ordinary
shareholders 439 680 460 472
Carrying value of Zimbabwe operations
written off - 19 407
Profit on sale of investment in Israeli
operations - (244 894)
Carrying value of Zambian operations
written off 25 131 4 327
Surplus arising from allotment of
shares by the Australian subsidiary (63 569) -
Costs relative to aborted investment in the
Philippines 12 457 -
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 - 28 668
Amortisation of goodwill 43 001 36 325
Headline earnings 456 700 342 444
Ordinary shares in issue (000"s)
- total 1 771 466 1 707 762
- weighted average 1 744 530 1 693 151
Headline earnings per share (cents) 26.18 20.23
Attributable earnings per share (cents) 25.20 27.20
BALANCE SHEET
Year ended Year ended
30 April 30 April
2003 2002
R"000 R"000
Assets
Non-current assets 2 287 891 2 231 685
Tangible assets 1 102 677 1 090 165
Intangible assets 857 325 835 722
Investments and sundry loans 214 876 161 560
Deferred taxation 113 013 144 238
Current assets 7 079 151 7 612 781
Inventories 2 923 435 2 919 095
Accounts receivable 3 524 060 3 885 271
Cash and cash equivalents 631 656 808 415
Total assets 9 367 042 9 844 466
Equity and liabilities
Capital and reserves 1 641 610 1 301 016
Outside shareholders" equity 665 880 442 465
Non-current liabilities 1 098 738 1 706 882
Interest bearing 1 084 398 1 701 771
Deferred taxation 14 340 5 111
Current liabilities 5 960 814 6 394 103
Accounts payable 5 144 903 5 431 045
Provisions 382 857 411 476
Taxation 41 447 86 714
Interest bearing 391 607 464 868
Total equity and liabilities 9 367 042 9 844 466
Capital expenditure
Expended during the period 281 434 100 923
Committed or authorised 20 999 12 509
Contingent liabilities 20 620 26 870
Ordinary shares in issue (000"s) 1 771 466 1 707 762
Net asset value per share (cents) 92.7 76.2
ABRIDGED CASH FLOW STATEMENT
30 April 30 April
2003 2002
R"000 R"000
Cash generated from operating activities 1 004 139 1 085 118
Finance costs (197 264) (194 906)
Taxation paid (319 170) (102 652)
Cash inflow from operations 487 705 787 560
Cash (utilised)/realised from investing
activities (332 691) 93 982
Net cash outflow from financing activities*(226 455) (472 876)
(Decrease)/Increase in net cash resources (71 441) 408 666
Net cash resources
Cash and cash equivalents 631 656 808 415
Bank borrowings (163 126) (268 444)
Net cash resources* 468 530 539 971
(Decrease)/Increase (71 441) 408 666
*In 2002 net cash resources included R171.7 million in respect of the short term
portion of the securitised loan which has now been treated as a financing
activity.
STATEMENT OF CHANGES IN ORDINARY
SHAREHOLDERS" EQUITY
30 April 30 April
2003 2002
R"000 R"000
Balance at beginning of year
(as previously reported) 1 301 016 1 088 930
Prior year adjustment for employee
benefits (AC116) - (116 512)
Prior year adjustment for financial
instruments (AC133) (33 604) -
1 267 412 972 418
Issue of ordinary shares
Odd-lot offer (156) -
Share issue expenses (803) (170)
Movements in distributable reserves
Income attributable to ordinary
Shareholders 439 680 460 472
Movements in non-distributable reserves
Transfer from distributable reserves - (9 443)
Foreign currency translation reserve (64 523) (122 261)
1 641 610 1 301 016
SEGMENTAL INFORMATION
Australia
Year ended Year ended
30 April 30 April
2003 2002
R"000 R"000
Sales to customers 36 010 305 29 047 610
Dividends received
Interest received
Total revenue
Segmental result 837 800 586 200
Income from associated company 1 039 2 070
Amortisation of goodwill arising on
consolidation (28 305) (23 122)
Loss - discontinued operations
Interest received
Interest paid
Exceptional items
Income before taxation
Total depreciation and amortisation 178 279 121 001
SEGMENTAL INFORMATION
Southern Africa
Year ended Year ended
30 April 30 April
2003 2002
R"000 R"000
Sales to customers 13 237 528 11 406 795
Dividends received
Interest received
Total revenue
Segmental result 299 230 233 925
Income from associated company
Amortisation of goodwill arising on
consolidation
Loss - discontinued operations
Interest received
Interest paid
Exceptional items
Income before taxation
Total depreciation and amortisation 62 217 62 730
SEGMENTAL INFORMATION
Africa
Year ended Year ended
30 April 30 April
2003 2002
R"000 R"000
Sales to customers 2 515 811 2 599 953
Dividends received
Interest received
Total revenue
Segmental result 87 470 89 005
Income from associated company
Amortisation of goodwill arising on
consolidation (1 625) -
Loss - discontinued operations
Interest received
Interest paid
Exceptional items
Income before taxation
Total depreciation and amortisation 18 450 17 518
SEGMENTAL INFORMATION
Corporate
Year ended Year ended
30 April 30 April
2003 2002
R"000 R"000
Sales to customers
Dividends received
Interest received
Total revenue
Segmental result (5 220) 33 467
Income from associated company
Amortisation of goodwill arising on
consolidation (23 694) (20 100)
Loss - discontinued operations
Interest received
Interest paid
Exceptional items
Income before taxation
Total depreciation and amortisation 28 284 24 593
SEGMENTAL INFORMATION
Total
Year ended Year ended
30 April 30 April
2003 2002
R"000 R"000
Sales to customers 51 763 644 43 054 358
Dividends received 10 498 5 949
Interest received 13 572 29 234
Total revenue 51 787 714 43 089 541
Segmental result 1 219 280 942 597
Income from associated company 1 039 2 070
Amortisation of goodwill arising on
consolidation (53 624) (43 222)
Loss - discontinued operations - (40 954)
Interest received 13 572 29 234
Interest paid (197 264) (194 906)
Exceptional items 18 046 183 021
Income before taxation 1 001 049 877 840
Total depreciation and amortisation 287 230 225 842
COMMENTS
TRADING
The financial highlights of the year under review were -
* turnover above R50 billion;
* income before tax in excess of R1 billion.
This achievement places the Group at the forefront of the largest industrial
groups by turnover listed on the JSE Securities Exchange South Africa.
The results for the year are outstanding, with turnover totalling R51.8
billion, an increase of 20% over the R43 billion of the previous year. Offshore
operations contributed 75% of the Group"s turnover and 78% of operating income.
Earnings before interest, tax, depreciation and amortisation, totalled R1.47
billion, an increase of 32% over the previous year. Income before exceptional
items and taxation totalled R1.04 billion, an increase of 40% on the previous
year"s R738 million. Headline earnings per share increased by 29% to 26.18
cents.
These excellent results were achieved despite the strengthening of the Rand
in the last three months of the financial year having taken a little of the
shine off the results of the Australian and African operations, when translated
into Rands.
Cash generated by operating activities exceeded R1 billion, the Group"s net
gearing improved by R514 million and foreign borrowings were reduced by A$67
million during the year.
METCASH TRADING LIMITED, AUSTRALASIA
The Australian operation produced an outstanding set of results for the year,
notwithstanding fierce competition from the major supermarket chains. Turnover,
in Australian Dollars, totalled A$6.7 billion, an increase of 16% on the
previous year. When converted to Rands, this amounted to R36 billion, an
increase of 24% over the R29 billion achieved in 2002. What is particularly
noteworthy is the significant market share gain that this represents.
Earnings after taxation at A$81.3 million increased by 41% and cash generated
from operations increased to A$148 million. Trading results for the year have
been converted to Rand at an average rate of A$1 = R5.36 (2002 - A$1 = R5.00).
IGA Distribution delivered a particularly strong performance, boosted by the
acquisition of new customers and their resultant volumes.
The Campbells Cash & Carry division delivered an increase in earnings of 150% as
a result of the successful strategies adopted to change product mix.
Australian Liquor Marketers reported a 10.2% increase in turnover,
notwithstanding the onslaught of the major chains. Earnings for the year were
flat on the previous year, as a result of the investment in brands, technology
and in customers, to protect market share.
As previously announced, the prospective acquisition in the Philippines was
aborted following an extensive due diligence investigation. The costs incurred,
totalling A$3.8 million, have been treated as an exceptional item in the income
statement.
METCASH S.A. LIMITED
The Southern African businesses traded well during the year and achieved a
commendable set of results, notwithstanding a softening in consumer demand in
the second half. It is particularly pleasing to note that consistently improved
earnings have now been achieved in the last four reporting periods. Turnover for
the year totalled R13.2 billion, an increase of 16% over the previous year. By
comparison, operating income increased by 28% to R299 million and cash generated
by operating activities exceeded R330 million.
This is the first year in which the trading results of the Hong Kong
subsidiary - that had a particularly tough year - are included with those of
this operation. All other divisions in this business unit performed well,
reflecting improved levels of turnover and profitability as well as stronger
cash flows.
The recently announced proposed acquisition of the Seven-11 convenience chain
is progressing through the various conditions that require satisfaction before
finalisation. It is anticipated that the successful conclusion of this
transaction will provide a boost to the conventional distribution business, both
in volume and earnings.
METCASH AFRICA (PROPRIETARY) LIMITED
With the exception of Botswana, operations in all countries performed well in
local currency terms, reflecting strong growth and positive cash flows. The
Botswana results were negatively impacted by the drought, the introduction of
VAT in that country and mushrooming competition in a small market.
The results of the Angolan operation, which in essence represent set-up and
infrastructure costs, are consolidated for the first time. The Group now has
eight stores in Angola and current trading trends suggest that the operation in
this country will be a major profit contributor in the future.
Turnover totalled R2.5 billion, a decrease of 3% over that of the previous
year, whilst operating profit at R87.5 million was approximately 2% lower, after
absorbing the loss from Angola.
Despite the continued deterioration of conditions in Zimbabwe, this operation
continues to trade exceptionally well. Results are only included to the extent
of dividends received.
ACCOUNTING POLICIES
This report is prepared on the historical cost basis in accordance with South
African Statements of Generally Accepted Accounting Practice. The Group has
adopted AC133, Financial Instruments: Recognition and Measurement, ahead of its
effective date. As a consequence, long term loans are now recognised at present
value. This change has been effected as an adjustment to opening retained
income. Save for the foregoing, the accounting policies are consistent with
those applied in the last annual report.
INTEREST PAID
The charge includes non-recurring interest of R18 million relating to prior
year normal taxation assessments raised and paid during the period.
EXCEPTIONAL ITEMS
Year ended Year ended
30 April 30 April
2003 2002
R"000 R"000
Carrying value of Zambian operations
written off (25 131) (4 327)
Surplus arising from allotment of
shares by the Australian subsidiary 63 569 -
Costs relative to aborted investment in
the Philippines (20 392) -
Carrying value of Zimbabwe operations
written off - (19 407)
Profit on sale of investment in
Israeli operations - 244 894
Adjustment arising from purchase by
subsidiary of its preference shares
and conversion of remainder to
ordinary shares - (38 139)
18 046 183 021
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$130 million (R577 million) syndicated loan for the balance of the purchase
price of the investment in Australia, bearing interest at approximately 7% per
annum, maturing on 30 April 2006.
A$75 million (R333 million) in terms of a formal accounts receivable
securitisation programme in the Australian subsidiary, bearing interest at
approximately 5% per annum.
R101 million in terms of a formal sale and lease-back property transaction,
payable over fifteen years and bearing interest at approximately 13% per annum.
R73 million in respect of leased assets, payable over five years and bearing
interest at approximately 5% per annum.
Current
R392 million, being the current portion of syndicated and securitised loans,
amounts owing in respect of leased assets and fluctuating bank borrowings in
various operations, bearing interest at prime overdraft rates or below.
HEADLINE EARNINGS
The calculation is based on 1 744 530 401 shares
(2002 - 1 693 151 333 shares), being the weighted average number of shares in
issue during the period under review.
PROSPECTS
Notwithstanding the generally poor economic climate, the volatile currency
and the various uncertainties confronting the international community, the Group
has laid a sound foundation for the future. This, coupled with the Group"s
improved gearing position, should result in solid future growth and earnings.
CAPITALISATION ISSUE
The Board has resolved to award capitalisation shares to shareholders
registered in the books of the company on 4 July 2003 in the ratio of 3 new
fully paid ordinary shares for every 100 held. The maximum number of
capitalisation shares that will be issued is
53 143 987.
The salient dates are -
Last day to trade cum capitalisation issue Friday, 27 June 2003
New shares listed Monday, 30 June 2003
First date to trade ex capitalisation issue Monday, 30 June 2003
Record date for capitalisation issue Friday, 4 July 2003
Issue of new share certificates or shareholders"
safe custody accounts at CSDPs or brokers
updated Monday, 7 July 2003
Shareholders may not dematerialise or rematerialise their holding of ordinary
shares between Monday, 30 June 2003, and
Friday, 4 July 2003, both dates inclusive.
AUDIT REVIEW
The information set out above has been reviewed, but not audited, by the
Group"s auditors, Ernst & Young. The review report 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
4 June 2003
DIRECTORATE AND ADMINISTRATION
Directors: Dr F van Zyl Slabbert (Chairman)*,
C S dos Santos (Chief Executive), J L Grainger,
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)
Sponsor: Sasfin Corporate Finance, a Division of Sasfin Bank Limited
Sasfin Place, North Block
13 - 15 Scott Street
Waverley
Johannesburg 2090
(PO Box 95104, Grant Park 2051)
