| Tue 1 Jun 2004, 9:08 | | REVIEWED RESULTS FOR THE YEAR ENDED 31 MARCH |
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SUPER GROUP LIMITED - REVIEWED RESULTS FOR THE YEAR ENDED 31 MARCH
AND FURTHER CAUTIONARY
Super Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1943/016107/06)
Share code: SPG ISIN: ZAE000011334
REVIEWED RESULTS FOR THE YEAR ENDED 31 MARCH
* Headline earnings per share +21%
* Net profit for the year +33%
* Revenue increased 18% to exceed R7 billion
* Cash generated from operations increased 43% to R600 million
Commentary
Super Group delivered solid growth from operations for the seventeenth
consecutive year. Revenue and operating income before foreign exchange contract
losses and losses on disposal of operations for the year increased by 18% to
R7.1 billion and R583 million respectively, resulting in the group operating
margins being maintained at 8.2%. Headline earnings per share increased 21%
from 102.7 cents to 123.8 cents.
The businesses generated excellent cash flow, with cash generated by operations
increasing 43% to R600 million. Cash was invested in new supply chain and
fleet management contracts and in the extension of the supply chain offering
through the acquisition of several businesses from DNA Supply Chain Investments
Limited.
The balance sheet of the group remains strong. At year end, Super Group had net
cash of R268 million and remains ungeared when full maintenance lease
liabilities are excluded. Super Group is well positioned to use debt funding to
capitalise on growth opportunities within the various businesses and is
considering alternate sources of funding.
Divisional Overview
Supply Chain Division
Supply Chain Management business had another exciting year. This strong
performance was based on providing a wider and more complex range of services
to clients, supporting Super Group`s strategy of developing an integrated
supply chain management business. Businesses acquired from DNA Supply Chain
Investments Limited in October 2003 have been successfully integrated into this
business. During the year, Super Group was very successful in rolling over
expiring contracts as well as extending the scope of services within clients.
Super Group has been awarded significant new contracts in the FMCG and
Automotive industries.
Fleet Solutions performed very well, increasing operating income as a result of
new contracts and operating efficiencies coming to the fore. In August 2003,
FleetAfrica Eastern Cape, a subsidiary of Super Group`s FleetAfrica, was
awarded the Eastern Cape Provincial Government`s 3,000 vehicle fleet
outsourcing contract. To date Super Group has been awarded the largest and
second largest Government fleet outsource contracts.
Cross-border Transport business produced lower earnings as a result of trading
conditions continuing to deteriorate in the region. Reflecting back over a 16
year trading history in sub-Saharan Africa, the past year ranks as one of the
most challenging. The board of directors has decided not to consolidate the
financial results of the Zimbabwean operations given the uncertainty,
instability and high levels of inflation in the country. The effect on earnings
is not material. The changes in the balance sheet are that the assets and
liabilities that were previously consolidated in the group accounts are now
treated as an investment. Given the nature of the assets, the board of
directors believes that it is not necessary to impair this investment as the
fair value of the assets, trucks and trailers excluding land and buildings,
exceed the investment value by 62%. The extensive transport infrastructure
continues to service the region awaiting an upturn.
Automotive Division
Automotive Parts continued to gain market share and produced strong results. A
significant number of new Autozone and SparesLink stores were opened during the
year. The improvement in the operating margins, achieved through the
optimisation of procurement and distribution, was a direct result of the
application of the group`s supply chain skills and technologies.
Dealerships produced acceptable returns with margins being negatively affected
by the weakness in the used vehicle sales market in the second half of the
financial year.
significant number of new Autozone and SparesLink stores were opened during the
year. The improvement in the operating margins, achieved through the
optimisation of procurement and distribution, was a direct result of the
application of the group`s supply chain skills and technologies.
Dealerships produced acceptable returns with margins being negatively affected
by the weakness in the used vehicle sales market in the second half of the
financial year.
Services
This division comprises group treasury and insurance and performed to
expectations.
Accounting Policies
The financial statements are prepared in accordance with Statements of
Generally Accepted Accounting Practice in South Africa. The principle
accounting policies as set out in the 2003 annual report have been consistently
applied in producing these results, except for the changes detailed below.
During the year the group changed the following accounting policies to comply
with changes in Statements of Generally Accepted Accounting Practice in South
Africa:
* To comply with AC 132 Consolidations. The Super Group Share Option Trusts,
which hold Super Group shares, are now consolidated. This change has no effect
on prior year earnings and the prior year balance sheet has not been restated
as the financial effect is immaterial. However, the reduction in the weighted
average shares in issue has necessitated the restatement of earnings per share
in the prior year.
* To comply with AC 133 Financial Instruments: Recognition and Measurement. In
accordance with the adoption provisions of AC 133 an adjustment of R37 million
has been made to the Group`s reserves at the beginning of the year and no
adjustment has been made to prior year figures.
Acquisition of FleetAustralia
Effective 1 June 2004, Super Group acquired 70% of FleetAustralia with the
balance being acquired by a consortium of private equity investors. With an
established national network and a high quality, diversified client base,
FleetAustralia is one of the largest providers of fleet management and fleet
leasing services in the Australian market. It is financially sound with a good
financial track record based on its performance driven culture and robust risk
management processes and policies.
Owing to its excellent cash generation ability, FleetAustralia has raised
loans, secured solely by the assets of FleetAustralia, from Australian banks
and financial institutions to fund a portion of the purchase consideration. The
banks have no recourse to Super Group and its remaining subsidiaries.
Prospects
The impact of the Rand on the South African economy continues to provide a
challenging trading environment. Super Group should continue to achieve real
earnings growth in 2005 driven by:
* improving operational efficiencies in all the businesses;
* continued market share growth and improving the supply chain efficiencies in
Automotive Parts;
* a full pipeline of potential contracts is anticipated to result in contracts
valued at more than R1 billion being secured during the next financial year;
* continuing to extend Super Group`s service offering within existing clients`
supply chains and acquiring new clients by offering them strategically
competitive supply chains;
* being strategically positioned to benefit from anticipated outsourcing
opportunities in both private and Government sectors.
The momentum that has been building over the past few years will continue to
provide exciting growth opportunities.
Further cautionary announcement
Further to the cautionary announcement regarding an empowerment transaction
that will result in Peu Investment Group acquiring an equity holding of 25.1%
in Super Group dated 8 April 2004 and 20 May 2004, shareholders are advised
that the requisite legal agreements are still being finalised. Accordingly,
shareholders are advised to continue to exercise caution when trading in their
securities until a further announcement is made.
Appreciation
Appreciation is extended to directors, management and staff for their efforts.
Our advisors, financiers, customers and suppliers are similarly thanked. Our
shareholders are thanked for their belief in, and support of, Super Group.
Dividends
A dividend of 32 cents (2003: 28 cents) per ordinary share has been declared in
respect of the year ended 31 March 2004 and is payable to shareholders
recorded in the register of the company at the close of business on Friday, 30
July 2004.
In compliance with the requirements of STRATE, the electronic settlement and
custody system used by the JSE Securities Exchange South Africa, the company
has determined the following salient dates for the payment of the dividend:
Last day to trade cum-dividend Friday, 23 July 2004
Shares commence trading ex-dividend Monday, 26 July 2004
Record date Friday, 30 July 2004
Payment of dividend Monday, 2 August 2004
Share certificates may not be dematerialised or rematerialised between Monday,
26 July 2004 and Friday, 30 July 2004, both days inclusive.
On behalf of the board
Larry Lipschitz Keith Grunow
Chief Executive Officer Group Financial Director
1 June 2004
Auditors Review
The condensed balance sheets, income statements, cash flow statements and
statements of changes in shareholders` equity, have been reviewed by KPMG Inc.
Their unqualified review report is available for inspection at the Company`s
registered office.
Registered Office:
27 Impala Road, Chislehurston, Sandton, 2196
Private Bag X9973, Sandton, 2146
Transfer Secretaries:
Computershare Investor Services 2004 (Pty) Limited
Ground Floor, 70 Marshall Street, Johannesburg, 2001
P.O. Box 1053, Johannesburg, 2000
Directors:
P. Vallet* (Chairman), S. Abrahams* (Deputy Chairman),
L. Lipschitz (Chief Executive Officer), R. Ballentine, L. Bergman*,
G. Cohen*, B. Greenstone*, K. Grunow, R. Hounsell*, L. Johnston,
P Malungani*, M. Vico*#.
Austrian
* non-executive # Zimbabwean
Group Company Secretary:
J. van Es
Also available on the Internet: www.supergrp.com
Operating income by currency
2004 2003
% %
US$ and other 13 23
Rand 87 77
100 100
Consolidated Cash Flow Statements
Year ended
31 March
Reviewed Audited
2004 2003
R`000 R`000
Cash flows from operating activities
Operating income before working capital changes 719 840 691 048
Working capital changes (119 746) (269 931)
Decrease/(increase) in inventories 8 437 (135 103)
(Increase) in trade and other receivables (98 837) (42 099)
Increase in trade and other payables 45 183 2 251
(Decrease) in fund reserves (34 936) (3 062)
Movement in foreign currency translation reserve (39 593) (91 918)
Cash generated from operations 600 094 421 117
Net interest paid (90 596) (68 131)
Net dividend paid (85 679) (51 127)
Taxation paid (83 381) (24 994)
Net cash inflow from operating activities 340 438 276 865
Cash flows from investing activities
Net (cost) on acquisition of
subsidiaries, operations and associates (247 928) (46 237)
Additions to operating fixed assets - net of
disposals (57 622) (157 360)
Additions to full maintenance lease assets - net of
disposals (384 863) (322 645)
Investments and loans (14 809) (91 780)
Net cash (outflow) from investing activities (705 222) (618 022)
Cash flows from financing activities
Net cost of share repurchases and share issues (13 655) (12 588)
Increase/(decrease) in interest-bearing debt 20 075 (246 024)
Increase in full maintenance lease liabilities 351 034 393 995
Net cash inflow from financing activities 357 454 135 383
Net (decrease) in cash and cash equivalents (7 330) (205 774)
Cash and cash equivalents at beginning of year 282 948 534 005
Movement in foreign currency translation reserve (7 263) (45 283)
Cash and cash equivalents at end of year 268 355 282 948
Consolidated Income Statements
Year ended
31 March
Reviewed Audited
2004 2003 %
R`000 R`000 change
Revenue 7 072 796 6 013 946 17,6
Operating income before depreciation and
amortisation 836 811 673 995 24,2
Depreciation and amortisation 253 904 181 494
Operating income before foreign exchange
contract
losses and losses on disposal of
operations 582 907 492 501 18,4
Foreign exchange contract losses 20 628 54 591
Losses on disposal of operations - 41 838
Operating income 562 279 396 072 42,0
Net interest cost 102 940 47 935
Income from associates - net of taxation 9 667 13 756
Profit before taxation 469 006 361 893 29,6
Taxation 87 274 73 107
Profit after taxation 381 732 288 786 32,2
Minority interests 31 239 24 438
Net profit for the year 350 493 264 348 32,6
Number of shares in issue (`000)
- Total 316 796 307 000
- Weighted 308 723 309 246
- Diluted 308 723 319 680
Earnings per share (cents) 113,5 85,5 32,7
Headline earnings per share (cents) 123,8 102,7 20,5
Diluted earnings per share (cents) 113,5 84,4 34,5
Dividend per ordinary share (cents) as
per AC 107 28,0 25,0 12,0
CALCULATION OF HEADLINE EARNINGS
Net profit for the year 350 493 264 348
Adjusted for:
Losses on disposal of operations - 41 838
Amortisation of goodwill 31 639 11 290
Headline earnings 382 132 317 476
Consolidated Balance Sheets
At
31 March
Reviewed Audited
2004 2003
R`000 R`000
ASSETS
Property, vehicles and equipment 450 315 508 672
Full maintenance lease assets 1 111 137 828 464
Goodwill 385 739 104 874
Investments and loans 280 340 249 275
Deferred tax assets 85 354 80 196
Current assets 2 154 358 1 787 805
Inventories 683 900 671 822
Trade and other receivables 1 058 236 750 375
Cash and cash equivalents 412 222 365 608
Total assets 4 467 243 3 559 286
EQUITY AND LIABILITIES
Capital and reserves
Share capital and reserves 1 239 054 1 059 510
Compulsorily convertible debentures 42 151 140 495
Shareholders` interest 1 281 205 1 200 005
Minority interests 76 932 61 858
Liabilities
Fund reserves 111 485 89 267
Deferred tax liabilities 140 522 160 273
Interest bearing debt
- Long term
- Full maintenance lease liabilities 797 066 562 269
- Other 185 060 84 670
- Short term
- Full maintenance lease liabilities 175 687 94 619
- Other 79 694 71 482
- Bank overdraft 143 867 82 660
Current liabilities 1 475 725 1 152 183
Total equity and liabilities 4 467 243 3 559 286
Net tangible asset value per share (cents) 269,4 311,0
Segmental Analysis
for the year ended 31 March
Group
Reviewed Audited
2004 2003
R`mil R`mil %
Revenue 7 072,8 6 013,9 +18
Operating income 582,9 492,5 +18
Foreign exchange
contract losses 20,6 54,6 -
Losses on disposal of
operations - 41,8 -
Operating income 562,3 396,1 -
Net interest cost 102,9 47,9 -
Supply Chain
Management
2004 2003
R`mil R`mil %
Revenue 1 350,9 577,2 +134
Operating income 253,7 166,6 +52
Foreign exchange
contract losses - - -
Losses on disposal of
operations - - -
Operating income 253,7 166,6 -
Net interest cost - - -
Cross-Border
Transport
2004 2003
R`mil R`mil %
Revenue 493,4 715,6 -31
Operating income 46,9 92,8 -50
Foreign exchange
contract losses - - -
Losses on disposal of
operations - - -
Operating income 46,9 92,8 -
Net interest cost - - -
Fleet Solutions
2004 2003
R`mil R`mil %
Revenue 548,2 633,8 -14
Operating income 102,0 74,6 +37
Foreign exchange
contract losses - - -
Losses on disposal of
operations - - -
Operating income 102,0 74,6 -
Net interest cost 17,5 30,5 -
Automotive Parts
2004 2003
R`mil R`mil %
Revenue 1 418,3 1 266,2 +12
Operating income 70,4 52,7 +34
Foreign exchange
contract losses - - -
Losses on disposal of
operations - - -
Operating income 70,4 52,7 -
Net interest cost - - -
Dealerships
2004 2003
R`mil R`mil %
Revenue 3 146,7 2 714,6 +16
Operating income 85,4 79,9 +7
Foreign exchange
contract losses - - -
Losses on disposal of
operations - - -
Operating income 85,4 79,9 -
Net interest cost - - -
Services
2004 2003
R`mil R`mil %
Revenue 115,3 106,5 +8
Operating income 24,5 25,9 -5
Foreign exchange
contract losses 20,6 54,6 -
Losses on disposal of
operations - 41,8 -
Operating income 3,9 (70,5) -
Net interest cost 85,4 17,4 -
Statement of Changes in Shareholders` Equity
Year ended
31 March
Reviewed Audited
2004 2003
R`000 R`000
Balance at beginning of year 1 200 005 1 317 046
AC 133 adjustment (37 400) -
Share option repurchases (53 123) (12 588)
Share issue expenses written off (1 293) -
Foreign currency translation and hyper inflation (91 448) (290 694)
Net profit for the year 350 493 264 348
Ordinary dividends (86 029) (78 107)
Balance at end of year 1 281 205 1 200 005
Operating income before foreign exchange contract losses and losses on disposal
of operations.
* Adjusted headline earnings
Sandton
1 June 2004
Sponsor
Deutsche Securities
Member of the Deutsche Bank Group
Date: 01/06/2004 09:00:21 AM Produced by the JSE SENS Department
