| Tue 25 Nov 2003, 8:02 | | results for the year ended 31 August 2003 |
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JD Group Limited - Reviewed financial results for the year ended 31 August 2003
And withdrawal of cautionary announcement
JD Group Limited
Registration number: 1981/009108/06
JSE code: JDG
NSX code: JDL
ISIN: ZAE000030771
(`JD" or `the Group")
"2003 has been a year of achievement for the JD Group. This year we celebrated
our 20th year of operation and successfully concluded the acquisition of
Profurn."
JD Group
Reviewed financial results for the year ended 31 August 2003
Financial highlights
* Revenue up by 46% to R6,0 billion (2002: R4,1 billion)
* Total sale of merchandise up by 48% to R3,8 billion (2002: R2,6 billion)
* Operating income up by 72% to R803 million (2002: R467 million)
* Headline earnings up by 78% to R453 million (2002: R254 million)
* Headline earnings per share up by 50% to 339 cents (2002: 225 cents)
* Distribution per share up by 96% to 110 cents (2002: 56 cents)
* Gearing down from 54% to 26%
Operational highlights
* Operating margin improved from 11,4% to 13,5%
* Bad debts percentage down
* Profurn successfully integrated
Trading environment and implications
* Favourable economic conditions in local durable credit retail market
* Significant benefits from
- Proactive steps taken to reduce risk exposure
- Profurn integration
* Potential for margin expansion
"Harvesting as we sow"
This year"s results confirm our strategic decisions to close Score, reposition
Price "n Pride and change our approach towards the management of the debtors"
book - all this, whilst not losing sight of the intrinsic power of our brands in
increasing our market share. The recent Markinor/Sunday Times top brands survey
revealed that 4 of the top 10 furniture brands are JD brands, with the Group"s
core market strength being in the metropolitan areas.
Operating environment
Strong growth in durable and semi-durable goods sales was reported in the South
African retail sector during 2003. This was largely due to downward pricing
pressure resulting from the stronger rand. In addition, household debt as a
percentage of disposable income remains low compared to levels reported a few
years ago. Lower interest rates have increased consumer discretionary spending.
The cut in personal tax rates over the past two years; wage increases and
falling inflation levels have further accelerated the growth in disposable
income, particularly in the middle to upper new universal LSM groups. Growth
into 2004 is expected to gain momentum with all these factors in place.
Our top line growth is not simply a result of the impact of the above
conditions, but rather highlights the strength of our brands and our ability to
maximise opportunities as they present themselves.
Financial overview
Income Statement
The year"s results consist of the historical JD operations and the Profurn
legacy stores consolidated for the last five months of this financial year.
These results do not include the contribution from the Profurn legacy chain
Supreme, trading in the rest of Africa, as in line with the IAS 27, these
results were not consolidated, as it was the stated intention of the Group to
dispose of these operations in the foreseeable future.
Revenue constitutes sale of merchandise, finance charges earned on credit sales,
financial services income primarily from insurance products sold and other
income, which consists mostly of furniture club and delivery charges. Revenue
increased by 46% to R5 966 million over last year, of which 15% is organic
growth.
Sale of merchandise increased by 48% to R3 819 million for the Group as a whole
and constituted 64% (2002: 63%) of total revenue. The acquired operations
contributed 25% of total sale of merchandise. European sale of merchandise rose
3% to R302 million.
Credit sales accounted for 63% of total sales reducing from 72% in the prior
period mainly due to the inclusion of Hi-Fi Corporation, which is predominantly
a cash business.
The opportunity for generating other income from the Profurn legacy stores could
not be fully exploited over the first five months since their inclusion. We look
forward to growing this area of the business over the forthcoming year.
European revenue contributed 5% (2002: 7%) of total revenue. Whilst European
operations revenue increased significantly, the impact of the stronger rand on
the translation of foreign revenue negatively impacted their relative
contribution to Group revenue.
Cost of sales, amounted to R2 557 million (2002: R1 657 million). The inclusion
of the lower margin sales of Hi-Fi Corporation has the effect of an incremental
increase of 1,2% in cost of sales. Had the effect of the currency movements been
disregarded in both period ends, cost of sales would have increased in line with
the sale of merchandise. Operating costs grew by 33% to R2 606 million. The
operating costs in JD"s local historical operations grew 8,8%, broadly in line
with inflation. The operating margin widened to 13,5% (2002: 11,4%). This
increase is primarily as a result of margin increases and lower cost growth. We
believe there is potential for margin expansion during the forthcoming year.
Worthy of mention is the fact that finance costs and cost of sales have been
adjusted to give effect to the interest element resulting from the extended
credit terms enjoyed from our suppliers. This is in line with the requirements
of IAS 39.
Our effective tax rate has risen to 26% (2002: 20%). This is largely due to the
increased profitability of the Group.
The weighted average number of shares in issue increased with the acquisition of
Profurn for shares, on 22 April of this year, to 134 million.
Headline earnings increased by 78% with headline earnings per share increasing
by 50% to 339 cents. Headline earnings do not include an adjustment for the
amortisation of the provisional trademark arising on the acquisition of Profurn.
Although the value assigned to the trademark as well as the associated deferred
tax liability is provisional and will only be finalised during the next year, it
is considered appropriate not to exclude the amortisation of the trademark from
the headline earnings calculation in the current year. Had this been excluded,
headline earnings would have increased by 7,2 cents per share.
The proposed dividend of 68 cents for the second half of the year brings the
total dividends for the year to 110 cents, representing an increase of 96% over
the previous year. This increase in dividends was made possible by the strong
cash generation over the period.
Balance sheet
Trademark - provisional increased by R329 million with the associated deferred
tax liability of R98 million during the year as a result of the acquisition of
Profurn. The fair values of the assets and liabilities of Profurn have not as
yet been finalised. Once this has been completed and the trademarks have been
fairly valued, these provisional values may be amended with an adjustment to
goodwill, where applicable.
The increase in investments represents the loan accounts of the Profurn legacy
store Supreme, trading in the rest of Africa. In line with IAS 27, these
operations have not been consolidated into the Group"s results, as it was never
our intention to continue these operations at the time of acquisition.
Inventories increased by 73% with the inclusion of Profurn legacy operations.
The Group"s historic operations grew inventories by only 4%, which bears
testimony to our improved inventory management.
Trade and other receivables reflect an increase of 50% on the prior year
resulting from organic growth and the acquisition of Profurn. The JD business
units" ratios indicate a minor deterioration on the prior year due to certain
Profurn legacy stores being absorbed into old JD business units. The provisions
against trade receivables increased significantly on the prior year principally
as a result of the trade books acquired from Profurn. The old JD business units
reflect a decrease in provisions on the back of improved collection and arrears
percentages.
The share capital and premium increased by approximately R1 billion due to the
issue of 53,7 million ordinary shares for the acquisition of Profurn. Non-
distributable reserves increased by R103 million. This represents differences on
translation of foreign entities and the change in value of the Group"s shares
between the issue price at which the Profurn transaction was agreed (1 842
cents) and the value of the shares on 22 April 2003 when the transaction became
effective (2 101 cents), which in terms of IAS 22, represents the cost of the
investment at the date of exchange.
The increase of non-interest bearing liabilities includes the "at acquisition"
provisions raised on the acquisition of Profurn. These provisions relate to the
costs to be incurred in reducing legacy Profurn activities, as allowed by IAS
22.
Net asset value per share increased by 18% to 2 041,2 cents. Net gearing ratio
reduced to 26% from 54% a year ago, reflecting the increase in share capital and
premium on the acquisition of Profurn. This is significantly below our target-
gearing ratio of between 35% and 50%.
Cash flow
The significant increase in cash generated by trading reflects the inclusion of
Profurn, more specifically Hi-Fi Corporation and our improved overall
profitability.
Cash utilised in investing activities relates to the buy out of the minorities
in BoConcept and the cash costs associated with our acquisition of Profurn.
Our net cash generation for the period was R282 million and on the back of this
strong cash-generating trend we are confident in recommending an increased
dividend payment.
Operational review
Over the two years to 31 August 2003, a significant repositioning of the Group
took place. Fast changing demographics within the environment necessitated this.
We can now face the future with a much greater degree of confidence.
The majority of the work in repositioning the chains was done in the previous
year whilst the durable goods market was somewhat depressed.
This past year has seen the Group reap some of the rewards of these efforts. We
are now ideally positioned to benefit from the upturn in consumer demand, and to
take full advantage of the improvement in the economic environment.
During the year under review, following the Profurn acquisition, we rationalised
the store base from 1 234 stores to 978 and discontinued Protea as a brand.
These changes are in line with our stated strategy of focusing our efforts on
the middle-income market. Our ability to execute this strategy has been
demonstrated by the successes achieved to date at Price "n Pride.
The detailed segmental report sets out the performance of the separate business
units. The key highlights are discussed below.
The success of the Price `n Pride chain is self-evident in the segmental
analysis. This chain has the task of collecting 27 closed and 10 rebranded
debtors" books. The increased customer base emanating from the above will be
maximised by the executive team.
A further nine closed Profurn books are currently being collected at Russells,
two at Bradlows and nine at Joshua Doore. The inclusion of these Profurn legacy
books into the historic operations" books has impacted on certain of the
debtors" statistics in the respective operations" books.
Operational review
Over the two years to 31 August 2003, a significant repositioning of the Group
took place. Fast changing demographics within the environment necessitated this.
We can now face the future with a much greater degree of confidence.
The majority of the work in repositioning the chains was done in the previous
year whilst the durable goods market was somewhat depressed.
This past year has seen the Group reap some of the rewards of these efforts. We
are now ideally positioned to benefit from the upturn in consumer demand, and to
take full advantage of the improvement in the economic environment.
During the year under review, following the Profurn acquisition, we rationalised
the store base from 1 234 stores to 978 and discontinued Protea as a brand.
These changes are in line with our stated strategy of focusing our efforts on
the middle-income market. Our ability to execute this strategy has been
demonstrated by the successes achieved to date at Price "n Pride.
The detailed segmental report sets out the performance of the separate business
units. The key highlights are discussed below.
The success of the Price `n Pride chain is self-evident in the segmental
analysis. This chain has the task of collecting 27 closed and 10 rebranded
debtors" books. The increased customer base emanating from the above will be
maximised by the executive team.
A further nine closed Profurn books are currently being collected at Russells,
two at Bradlows and nine at Joshua Doore. The inclusion of these Profurn legacy
books into the historic operations" books has impacted on certain of the debtors
statistics in the respective operations" books.
Cost efficiencies arising from Profurn acquisition
We previously stated that we anticipated synergistic savings of R70 million to
arise from the acquisition of Profurn. A large percentage of this saving is
expected to come from the standardisation of IT systems, the biggest area of
challenge in this acquisition.
All business units at Profurn operate on different IT platforms. We are in the
final stages of development of the PeopleSoft branch processing system, which
will be piloted at branch level in 2004. In 18 to 24 months, the process of
standardising the IT systems onto PeopleSoft should be completed. Significant
savings should arise once this has been fully rolled out.
In addition, there is duplication of data networks between the two groups.
However, most of the synergistic gains will be made through a complete
rationalisation of the data infrastructure and optimisation between the
satellite and terrestrial based networks.
Business unit structures have been rationalised at a senior and middle
management level and brought in line with JD structures. Savings from
duplication of Board of Directors, company secretarial, external audit and
insurance management fees will also arise. Additional savings will be realised
from the closure of the Profurn head office in Braamfontein and the service
centre in Vereeniging.
JD/Nedcor Alliance
Whilst the results are disappointing, we nevertheless remain positive about the
potential inherent in our alliance relationship with Nedcor. This is
particularly in light of the recently launched Financial Services Charter and
the opportunities that the charter provides to extend financial services to a
broader base of the market. The JD Group store infrastructure will play an
important role in this regard. In addition to the term loan, home loan and basic
assurance products sold through the "in-store points of presence", the product
range will be expanded to include term deposit accounts in the year ahead. With
an expanded range of products in place, the alliance will be in a position to
capitalise on the low cost banking distribution that has been established in
selected JD Group stores in recent years.
Poland
We are delighted to note that Abra, our middle income soft and case goods
retailer operating in Poland, is now well on its way to achieving the expected
returns initially planned. The under-performance of the Polish operations was
primarily attributable to the conditions in the Polish economy. The strong zloty
has contributed to high levels of unemployment. However, with Poland set to join
the EU in May 2004, we expect broad based economic upliftment to be stimulated.
Abra is ideally positioned to benefit from this upturn.
With our new Polish management team in place, we are confident that the
potential of Abra will be maximised.
We can now increase our network of stores with confidence that Abra has the
infrastructure that will enable us to make a meaningful contribution to earnings
by 2005. We anticipate opening a further 17 stores over the near term, bringing
the total number of stores to 43.
United Kingdom
BoConcept in the UK offered us an opportunity to invest in a unique concept. We
continue to believe in the potential of the brand and in the value to be
extracted from this chain.
The performance of BoConcept over the past year has however been severely
constrained by supply chain problems originating from the franchisor Club 8 and
various ways of addressing this issue are under consideration. Accordingly, the
BoConcept rollout is being restricted until we feel comfortable that Club 8 can
meet its obligations as required by the service level agreement. The performance
of our existing store base, notwithstanding the above mentioned hurdle and the
fact that we have as a result been reluctant to do any real marketing, proves
that BoConcept as a retail format has its place in the competitive trading
conditions in the UK. There is no reason why, once our supply chain has been
improved, we should not revert to our original vision of substantially
increasing our store base.
Africa
The Group"s strategy has never been to expand into the rest of Africa. The
Profurn stores beyond South Africa"s boundaries are therefore being reviewed on
a country-by-country basis. To date, we have ceased operations in the Ivory
Coast, Zambia and Tanzania.
Corporate governance
The Group complies with the Code of Corporate Practices and Conduct as set out
in the King Report on Corporate Governance and further acknowledges our social
responsibilities.
Strategic review and objectives
Our strategy will see JD continuing to maximise the strengths of its brands. We
expect to see an ongoing improvement in all aspects of our business in the year
ahead. We will replicate the successful upward repositioning of Price "n Pride
at Barnetts. The introduction of major appliances at Hi-Fi Corporation is
already a success and we expect to complete the roll out of the broader product
offering in the forthcoming year.
A process of differentiation has been embarked upon in order to maximise the
potential of each brand and limit any internal competition or overlap. We remain
committed to our stated strategy of diversifying our earnings through the
provision of financial services and expanding our offshore operations.
The JD Group provides employment for almost 16 000 people. We accept the
obligation of creating an atmosphere in the workplace that is conducive to
unlocking the inherent potential of every individual. "Our pursuit of excellence
is ongoing. It is only through our people that we can hope to achieve this
excellence. After all, the promise of realising our full potential is far more
exciting than being confined to the boundaries of accepted success".
Outlook
2004 represents our 21st year in business. We will come of age with the energy
and determination to strive to greater heights.
Prevailing economic conditions allow for a feeling of optimism. Should current
trends in trading volumes continue, the year ahead should deliver a rewarding
result for all stakeholders. Our main concern for the year ahead, is the impact
that a stronger rand will have on employment levels.
Declaration of final dividend number 40
The directors have declared a final dividend of 68 cents (2002: 22 cents) per
share for the year ended 31 August 2003.
In accordance with the settlement procedures of STRATE, the following dates will
apply to the final dividend:
Last day to trade cum dividend Thursday 11 December 2003
Trading ex dividend commences Friday 12 December 2003
Record date Friday 19 December 2003
Dividend payment date Monday 22 December 2003
Share certificates may not be dematerialised or rematerialised nor may transfers
between the South African and Namibian registers take place between Friday 12
December 2003 and Friday 19 December 2003, both days inclusive.
I:Proxy
Shareholders are encouraged to register to receive shareholder information
electronically. This facility is made available following requisite changes
having been made to the Group"s Articles of Association. Shareholders are
encouraged to visit www.jdg.co.za to register and receive further information.
Audited Annual Financial Statements
The annual report for the year ended 31 August 2003, including the audited
financial statements will be mailed to shareholders on or before 12 December
2003.
Review by the independent auditors
The financial information has been reviewed, but not audited, by Deloitte &
Touche, whose unqualified review report is available for inspection at the
Company"s registered office.
Withdrawal of cautionary announcement
Shareholders are hereby advised that the cautionary issued on 17 November 2003,
is withdrawn.
For and on behalf of the board
I David Sussman Gerald Volkel
Executive Chairman Financial Director
Johannesburg
24 November 2003
JD Group Limited
(`JD" or `the Group")
Registration number: 1981/009108/06
JSE code: JDG
NSX code: JDL
ISIN: ZAE000030771
Registered Office
11th Floor, JD House
27 Stiemens Street
Braamfontein, Johannesburg, 2001
(PO Box 4208, Johannesburg, 2000)
Telephone: +27 11 408 0408
Facsimile: +27 11 408 0604
Transfer secretaries
South Africa
Computershare Limited
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Telephone: +27 11 370 5000
Facsimile: +27 11 370 5663
Namibia
Transfer Secretaries (Proprietary) Limited
Shop 12, Kaiserkrone Centre, Post Street Mall,
Windhoek, Namibia
Telephone: +264 61 227647
Facsimile: +264 61 248531
Sponsors
South Africa
JP Morgan
1 Fricker Road, Illovo, Johannesburg, 2001
Telephone: +27 11 507 0300
Facsimile: +27 11 302 1660
Namibia
Simonis Storm Securities (Pty) Limited
(Registration number 96/421)
Suite C
152 Robert Mugabe Avenue, Windhoek
(PO Box 3970, Windhoek, Namibia)
Telephone: +264 61 254194
Facsimile: +264 61 254193
Executive directors
ID Sussman (executive chairman), HC Strauss (chief executive officer), JL
Bezuidenhout, G Volkel
Non-executive director
IS Levy
Independent non-executive directors
ME King, Dr D Konar, M Lock, MJ Shaw
Company secretary
MI Jaye
Email
info@jdg.co.za
Abridged income statement
Reviewed Audited
year ended year ended
31 August 31 August 2002 %
2003
R million R million change
Sale of merchandise 3 819 2 583 48
Finance charges earned 1 113 750 48
Financial services 761 551 38
Other services 273 199 37
Revenue 5 966 4 083 46
Cost of sales 2 557 1 657 54
Operating expenses before the 2 522 1 890 33
following:
Depreciation 67 57 18
Amortisation
- goodwill 5 15
- trademark-provisional 14 -
Surplus on disposal of property, plant (2) (3)
and equipment
Operating income before finance costs 803 467 72
Investment income (15) (11) 36
Finance costs - net 210 179 17
Income before taxation 608 299 103
Taxation 160 60 167
Income after taxation 448 239 87
Attributable to outside shareholders (1) (2)
Income attributable to shareholders 449 241 86
Reconciliation of headline earnings
Income attributable to shareholders 449 241
Goodwill amortised 5 15
Surplus on disposal of property, plant (2) (3)
and equipment
Taxation thereon 1 1
Headline earnings 453 254 78
Number of shares in issue (000) 166 830 112 730 48
Weighted average number of shares in
issue (000)
- basic 133 837 112 709 19
- diluted 135 413 113 285 20
Headline earnings per share (cents)
- basic 338,8 225,2 50
- diluted 334,9 224,1 49
Earnings per share (cents)
- basic 335,7 213,8 57
- diluted 331,8 212,7 56
Distribution to shareholders (cents) 110 56 96
- Interim declared 42 34
- Final proposed 68 22
Operating margin (%) 13,5 11,4
Abridged balance sheet
Reviewed Audited
31 August 31 August
2003 2002
R million R million
Assets
Non-current assets 1 038 355
Property, plant and equipment 210 144
Goodwill 42 54
Trademark - provisional 315 -
Share incentive trusts 12 10
Investments 146 110
Deferred taxation 313 37
Current assets 6 150 3 898
Inventories 739 427
Trade and other receivables 4 860 3 231
Financial assets 27 13
Taxation 80 5
Bank balances and cash 444 222
Total assets 7 188 4 253
Equity and liabilities
Equity and reserves
Share capital and premium 1 765 782
Non-distributable reserve 127 24
Retained income 1 401 1 112
Shareholders for dividend 113 25
Shareholders" equity 3 406 1 943
Outside shareholders" interest - 21
Non-current liabilities 1 412 1 310
Interest bearing long term liabilities 831 1 049
Deferred taxation 581 261
Current liabilities 2 370 979
Trade and other payables 1 799 745
Interest bearing liabilities 506 219
Financial liabilities - 11
Taxation 64 2
Bank overdraft 1 2
Total equity and liabilities 7 188 4 253
Directors" valuation of unlisted investments 146 110
Capital expenditure authorised and contracted 11 1
Capital expenditure authorised but not yet 90 94
contracted
Operating lease commitments 1 541 920
The Group has no other material commitments
or contingent liabilities.
Net asset value per share (cents) 2 041,2 1 723,9
Gearing ratio (net) (%) 26,2 53,9
Abridged cash flow statement
Reviewed Audited
year ended year ended
31 August 2003 31 August 2002
R million R million
Cash generated by trading 816 489
Increase in working capital (110) (238)
Increase in inventories (41) (60)
Increase in accounts receivable (120) (179)
Increase in accounts payable 51 1
Cash generated by operations 706 251
Investment income 15 11
Finance costs - net (163) (146)
Taxation paid (103) (195)
Cash available from/(utilised by) operating 455 (79)
activities
Dividends paid (72) (80)
Cash flows from operating activities 383 (159)
Cash utilised in investing activities (113) (88)
Cash flows from financing activities 12 (184)
Net increase/(decrease) in cash and cash 282 (431)
equivalents
Cash and cash equivalents at beginning of 161 651
year and acquired
Cash and cash equivalents at end of year 443 220
Capital expenditure incurred 99 67
Notes
1. ACCOUNTING POLICIES
Basis of accounting
The financial statements are prepared on the historical cost basis in accordance
with South African Statements of Generally Accepted Accounting Practice specific
to preliminary financial reporting as required by AC 127: Interim Financial
Reporting and the equivalent International Financial Reporting Standards IAS 34,
applied by JD Group since its 2000 financial year, which are consistent in all
material respects with those of the previous year.
2. Comparative figures
Comparative figures have been restated where necessary in order to facilitate
more meaningful comparison.
The comparative amounts for cost of sales and finance costs have been restated
as a result of adjustments which are required to be made in terms of IAS 39
relating to imputing the interest cost included in the valuation of inventories
as a result of the Group obtaining extended credit terms from its suppliers.
The impact thereof is as follows:
Cost of sales Finance costs
As previously reported 1 706 130
Adjustment (49) 49
Restated amounts 1 657 179
Notes (continued)
3. SUBSEQUENT EVENTS
No material events occurred between the year end date and the date of this
report.
4. RELATED PARTIES
The Group entered into various transactions with related parties, which occurred
under terms that are no less favourable than those arranged with independent
third parties.
5. Finance costs - net
Reviewed Audited
year ended year ended
31 August 31 August
2003 2002
R million R million
Interest paid 181 176
Interest received (21) (30)
Fair value adjustments on financial assets and
liabilities 50 33
210 179
6. Diluted earnings and headline earnings per share
The diluted number of shares has been calculated after considering the dilutive
impact of share options and the cash value to be received in future, in respect
of unissued shares granted to employees.
7. TRADE AND OTHER receivableS
Reviewed Audited
31 August 31 August
2003 2002
R million R million
Instalment sale receivables 6 592 3 972
Less: Provisions (2 100) (915)
Unearned finance charges (965) (522)
Bad debts (697) (137)
Other(1) (438) (256)
Net instalment sales receivables 4 492 3 057
Other receivables 368 174
Total accounts receivables 4 860 3 231
Provisions as a percentage of
instalment sales receivables (%) 31,9 23,0
Amounts due from installment sale receivables after one year are included in
current assets. The credit terms of installment sale receivables range from 6 to
24 months.
(1) Other provisions consist of provisions for extended guarantees; unearned
club, insurance and collection fees raised on fair valuation of the Profurn
closed branches.
Bank borrowings are secured by a negative pledge of trade receivables.
Statement of changes in equity
Share Share Non-distributable
capital premium reserve
R million R million R million
Balance at 31 August 2001 6 775 4
Income attributable to shareholders
Distributable to shareholders
Paid to shareholders - 19 November
2001
- 27 May 2002
Translation of foreign entities 20
Issue of share capital 1
Balance at 31 August 2002 6 776 24
Income attributable to shareholders
Distributable to shareholders
Paid to shareholders - 13 January
2003
- 22 April
2003
Issue of share capital in respect 2 987
of the acquisition of Profurn
Revaluation of shares issued 139
pursuant to the acquisition of
Profurn
Odd lot offer purchases (2)
Odd lot offer sales 2
Translation of foreign entity (36)
Issue of share capital 7
Treasury shares - (13)
Balance at 31 August 2003 8 1 757 127
Retained Shareholders
income for dividend Total
R million R million R million
Balance at 31 August 2001 934 42 1 761
Income attributable to shareholders 241 241
Distributable to shareholders (63) 63 -
Paid to shareholders - 19 November (42) (42)
2001
- 27 May 2002 (38) (38)
Translation of foreign entities 20
Issue of share capital 1
Balance at 31 August 2002 1 112 25 1 943
Income attributable to shareholders 449 449
Distributable to shareholders (160) 160 -
Paid to shareholders - 13 January (25) (25)
2003
- (47) (47)
22 April 2003
Issue of share capital in respect 989
of the acquisition of Profurn
Revaluation of shares issued 139
pursuant to the acquisition of
Profurn
Odd lot offer purchases (2)
Odd lot offer sales 2
Translation of foreign entity (36)
Issue of share capital 7
Treasury shares (13)
Balance at 31 August 2003 1 401 113 3 406
Segmental analysis - Business unit
Joshua Price Electric
2003 Russells Doore Bradlows "n Pride Express
Revenue Rm 1 572 1 174 647 642 363
Operating income Rm 333 212 85 91 60
Depreciation Rm 2 2 1 1 1
Total assets Rm 1 352 968 513 660 265
Total current Rm 233 184 96 81 61
liabilities
Capital expenditure Rm 1 2 1 2 1
Operating margin % 21,2 18,1 13,1 14,2 16,5
Total sale of Rm 912 689 415 331 222
merchandise
Share of Group sale % 23,9 18,0 10,9 8,7 5,8
of merchandise
Credit sales Rm 760 533 324 308 150
Percentage of total % 83,3 77,4 78,1 93,1 67,6
Cash sales Rm 152 156 91 23 72
Percentage of total % 16,7 22,6 21,9 6,9 32,4
Deposit rate on % 12,0 14,4 18,5 13,5 17,5
credit sales
Number of stores 198 149 88 117 114
Revenue per store R000 7 939 7 879 7 352 5 487 3 184
Retail square 139 002 116 655 65 121 69 726 16 814
meterage
Revenue per square Rand 11 309 10 064 9 935 9 207 21 589
metre
Number of employees 3 016 2 430 1 447 1 912 696
Revenue per employee R000 521 483 447 336 522
Instalment sale Rm 1 684 1 175 574 838 314
receivables - gross
Bad debts written off Rm 95 64 33 67 10
Bad debts written off
as a
percentage of gross % 5,6 5,4 5,7 8,0 3,2
receivables
Receivables" arrears Rm 282 152 63 189 22
Receivables" arrears
as a
percentage of gross % 16,7 12,9 11,0 22,6 7,0
receivables
Collection rate % 6,5 6,7 7,5 5,5 7,4
Average length of the Months 15,3 14,9 13,4 18,3 13,5
book
Sub- Hi-Fi
2003 total Morkels+ Barnetts+ Corp+ Other*+
Revenue Rm 4 398 333 221 569 135
Operating income Rm 781 63 41 73 25
Depreciation Rm 7 2 2 1 5
Total assets Rm 3 758 723 500 176 262
Total current Rm 655 120 57 150 54
liabilities
Capital expenditure Rm 7 - - 1 1
Operating margin % 17,8 18,9 18,6 12,8 18,5
Total sale of Rm 2 569 194 114 569 71
merchandise
Share of Group sale % 67,3 5,1 3,0 14,9 1,9
of merchandise
Credit sales Rm 2 075 145 98 34 49
Percentage of total % 80,8 74,7 86,0 6,0 69,0
Cash sales Rm 494 49 16 535 22
Percentage of total % 19,2 25,3 14,0 94,0 31,0
Deposit rate on % 14,4 12,9 24,3
credit sales
Number of stores 666 119 100 15 44
Revenue per store R000 6 604
Retail square 407 318 86 259 56 085 25 950 34 313
meterage
Revenue per square Rand 10 797
metre
Number of employees 9 501 1 709 1 727 1 065 735
Revenue per employee R000 463
Instalment sale Rm 4 585 952 696 4 355
receivables - gross
Bad debts written off Rm 269 24 28 22
Bad debts written off
as a
percentage of gross % 5,9
receivables
Receivables" arrears Rm 708 162 168 106
Receivables" arrears
as a
percentage of gross % 15,4 17,0 24,1 29,9
receivables
Collection rate % 6,5 6,4 6,4
Average length of the Months 15,3 15,6 15,6
book
Sub- Bo- Sub- Corp-
2003 total Abra Concept total orate Group
Revenue Rm 1 258 209 101 310 5 966
Operating income Rm 202 (8) (35) (43) (137) 803
Depreciation Rm 10 2 6 8 42 67
Total assets Rm 1 661 74 98 172 1 597 7 188
Total current Rm 381 37 31 68 1 266 2 370
liabilities
Capital expenditure Rm 2 4 21 25 65 99
Operating margin % 16,1 (3,8) (34,7) (13,9) 13,5
Total sale of Rm 948 205 97 302 3 819
merchandise
Share of Group % 24,8 5,4 2,5 7,9 100,0
sale of merchandise
Credit sales Rm 326 2 401
Percentage of % 34,4 62,9
total
Cash sales Rm 622 205 97 302 1 418
Percentage of % 65,6 100,0 100,0 100,0 37,1
total
Deposit rate on %
credit sales
Number of stores 278 26 8 34 978
Revenue per store R000 8 038 12 625 9 118
Retail square 202 607 26 684 7 012 33 696 643
meterage 621
Revenue per square Rand 7 832 14 404 9 200
metre
Number of employees 5 236 394 98 492 509 15 738
Revenue per R000 530 1 031 630
employee
Instalment sale Rm 2 007 6 592
receivables - gross
Bad debts written Rm 74 343
off
Bad debts written
off as a
percentage of %
gross receivables
Receivables" Rm 436 1 144
arrears
Receivables"
arrears as a
percentage of % 21,7 17,4
gross receivables
Collection rate %
Average length of Months
the book
* Operations to be integrated, disposed of and/or discontinued.
+ These business units have been consolidated for a 5 month period, therefore
certain calculations have not been presented as it is considered that they would
not be meaningful.
Joshua Price
2002 Russells Doore Bradlows "n Pride
Revenue Rm 1 352 989 606 522
Operating income Rm 243 133 74 37
Depreciation Rm 2 2 2 1
Total assets Rm 1 224 884 550 592
Total current liabilities Rm 181 144 84 78
Capital expenditure Rm 2 2 2 1
Operating margin % 18,0 13,4 12,2 7,1
Total sale of merchandise Rm 807 608 395 278
Share of Group sale of % 31,2 23,5 15,3 10,8
merchandise
Credit sales Rm 667 470 320 255
Percentage of total % 82,7 77,3 81,0 91,7
Cash sales Rm 140 138 75 23
Percentage of total % 17,3 22,7 19,0 8,3
Deposit rate on credit sales % 12,5 14,1 18,1 13,8
Number of stores 194 146 93 121
Revenue per store
