| Tue 24 Aug 2004, 8:36 | | Preliminary results for the 12 months ended 30 Ju |
|
Shoprite Holdings Limited - Preliminary results for the 12 months ended 30 June
2004
Shoprite Holdings Limited
Registration No 1936/007721/06
ISIN: ZAE000012084
JSE share code: SHP
NSX share code: SRH
LuSE share code: SHOPRITE
(`the Group`)
Preliminary results
for the 12 months ended 30 June 2004
Building on a solid foundation
Key information
Total turnover increased 7.3% from R24,825 billion to R26,641 billion.
Non-RSA operations achieved 26.2% sales growth in stable currency terms.
Operating profit before exchange differences up 16.4% to R702,2 million.
Headline earnings per share up 38.7%.
Headline earnings per share, adjusted for exchange differences, up 16.7%.
Dividend per share declared increased 18.0% to 36,0 cents.
Net asset value per share increased 22.9% to 419 cents.
Whitey Basson, chief executive, commented:
`Quality decision-making based on improved management information systems helped
us overcome the challenges created by extremely low food inflation in our target
market to generate an increase of 16.4% in operating profit. The operating
margin achieved of 2.64% is the highest ever in our business. We intend growing
strongly on the solid foundation laid, not only in South Africa, where capacity
still exists in certain markets, but also in Africa, where we can open a number
of additional outlets without adding to the present infrastructure.`
23 August 2004
Enquiries
Shoprite Holdings Limited
Tel 021 980 4000
Whitey Basson, Chief executive
Carel Goosen, Deputy managing director
De Kock Communications
Tel 021 422 2690
Ben de Kock
082 905 6274
Operating environment
The factors in the economy which in the year to 30 June 2004 worked in the
favour of retailers of durable and semi-durable goods did not have a positive
effect on food retailing in the Group`s primary markets. Lower inflation,
cheaper imports due to the strengthening of the rand and the drop in interest
rates stimulated discretionary spending among middle and higher-income earners
but did not, apart from a limited cascading effect, materially alter the
position of low-income earners. At the same, they were probably most affected by
the strong rand which led to increased job losses as the competitiveness and
profit margins of export-orientated businesses came under pressure.
Although all retail sectors had to contend with low inflation and falling
prices, this was nowhere as marked as in food sales in the sectors of the market
in which the Group operates. Increased sales helped cushion the impact of lower
prices for retailers of durable and semi-durable goods, but comparable increases
did not occur in the food sector as consumers do not buy more food simply
because it is cheaper. As a result, turnover growth in the Group`s main trading
subsidiaries was sluggish and the improved operating profit resulted mainly from
greater efficiencies achieved in cost control and the management of the supply
chain, and from increased global sourcing.
Comments on the results
Income statement
Total revenue:
Total revenue increased 7.5% to R27,172 billion, and sale of merchandise 7.3% to
R26,641 billion in a market in which food inflation averaged 3.6%. This increase
should be viewed against the background of the nationwide strike in October and
November 2003, following the implementation of the new Sectoral Determination
Act, when, in just one month, its main brand, Shoprite, lost 2,7% in market
share. By June, the Group`s market share based on like-for-like stores was 0,3%
above what it had been 12 months earlier.
In addition to sale of merchandise, total revenue also includes smaller amounts
which are in line with performances, as will be clear from the segmental results
discussed later in this report.
Gross profit:
Gross profit increased 8.8% to R4,064 billion, due mainly to improved product
ranges, more efficient replenishment and the greater contribution to income by
the non-foods division which benefited from a stronger rand. Thanks to its
sophisticated distribution facilities the Group was also able to benefit further
from the strength of the currency by sourcing globally to advantage.
Operating profit:
If forex and exceptional items are excluded, the operating margin grew from
2.43% to 2.64%. This represents an operating profit of R702,2 million, which is
an increase of 16.4% on the previous year. This is the highest operating margin
yet achieved in the business.
Other operating income:
This consists mainly of supplier rebates as well as smaller amounts relating to
rental income, commission received, franchise fees, net premiums earned, finance
income and distribution allowances. The increase in rebates above turnover
growth resulted mainly from more efficient collaboration with suppliers while
the increasing number of them following the mutually beneficial route of
distributing to stores through the Group`s structures, led to the improvement in
distribution allowances. Income derived from financial services, which again
grew substantially, is also included under this heading.
Depreciation:
Depreciation is in line with the cost of the Group`s expansion into Africa, the
ongoing refurbishment of existing stores and increased investment in information
technology.
Operating leases:
Increases grew in line with those in the property market.
Staff costs:
The 12.7% increase in staff costs to R2,274 billion was due mainly to the
implementation of the requirements of the Sectoral Determination Act in terms of
which part-time workers became permanent staff members who now qualify for
additional benefits. Flowing from these negotiations two salary increases were
also granted during the review period. The Group will benefit from this
arrangement in the new financial year as the next increase is only due in May
2005. Other contributing factors to the higher staff costs were a substantially
higher provision for post-retirement medical aid expenses and, in terms of new
legislation, a re-calculation of staff leave cost.
Other operating costs:
These costs, which increased 8.4%, cover expenses such as electricity and water,
repairs and maintenance, security, packaging and net advertising cost.
Exchange losses:
In the year to 30 June, the rand strengthened 19.9% against the US dollar
compared to 36.6% in 2003 (calculated on a conversion rate of R10,40 to the US
dollar on 30 June 2002, R7,61 on 30 June 2003 and R6,35 on 30 June 2004). This
lower appreciation of the rand resulted in a currency loss of R78,8 million in
2004 as against R132,9 million in 2003.
Exceptional items:
Exceptional items of R161,6 million (2003: R133,1 million) relate mainly to the
amortisation of negative goodwill, which represents R150,0 million (2003: R153,0
million) of the total. This is the last time negative goodwill will be amortised
as the related accumulated tax losses have been fully utilised.
Net investment income:
The net income was supported by improved cash flow. It was also to some extent
affected by the lower interest rates in the second half of the year.
Taxation:
The tax charge shows an increase of 35.2% to R244,1 million. This is in line
with the growth of 34.8% in profit before tax from R602,8 million to R812,6
million.
Earnings per share:
Earnings per share increased 32.8% from 82,7 cents to 109,8 cents and headline
earnings per share 38.7% from 57,6 cents to 79,9 cents. Once adjusted for
exchange differences, diluted headline earnings per share were 14.8% higher at
91,7 cents.
Balance sheet
Inventory:
A measure of success was achieved in managing down stock levels, which increased
1,3% as against turnover growth of 7.3%, reducing the number of inventory days.
Although disappointed that targets were not met, management is confident that,
in a more stable inflation environment and backed by new IT systems analysing
consumer shopping patterns and stock turn per product per store, stock holding
will be reduced significantly.
Cash and cash equivalents:
Cash flow was well managed during the year and at 30 June, the Group had on hand
cash and cash equivalents of R1,134 billion compared to R0,772 billion at the
end of 2003 financial year. This improved cash balance reflects a favourable
balance sheet date which shows trade and other payables up by 11%.
Property, plant and equipment:
The increase flows mainly from the Group`s expanded investment in land and
buildings. The increase in plant and equipment is referred to in the comment on
depreciation.
Trade and other receivables:
The increase reflects the growth in credit sales reported by the Group`s
furniture business and the impact of the Franchise Division`s results.
Operational review
Store 30.06.03 Opened Closed 30.06.04
Supermarkets 427 67 8 486
Shoprite 297 22 3 316
Checkers 90 2 3 89
Checkers 23 0 1
Hyper 22
Usave 17 43 1 59
Hungry Lion 49 6 3 52
Furniture
Group 165 6 4 167
OK Furniture 144 4 3 145
House & Home 21 2 1 22
Total Own 641 79 15 705
Stores
OK Franchise 357 45 105 297
Hungry Lion 1 2 0 3
Franchise
Total
Franchise 358 47 105 300
Total Stores 999 126 120 1 005
Countries 13 2 0 15
outside South
Africa
Supermarkets
The combined turnover of the three supermarket brands - Shoprite, Checkers and
Shoprite Usave, and including the non-RSA operation - increased 7.6% to R23,629
billion, a considerable improvement on the 6.0% at the end of the first six
months, having grown 9.2% in the second half. The total number of customers
served was 5.3% higher while basket value for the 12 months increased 2.0% as
against 0.8% for the half-year.
During the year the conversion of all stores to scanning was completed. A retail
data warehouse now exists providing information about every product sold in
every store. From this data, sales patterns are determined, facilitating the
correct stocking of each outlet. It also highlights for management the potential
of additional products and product sizes, based on the demographic profile of
every community in which the Group operates.
Geographic breakdown of turnover
R`million % change
Shoprite and Shoprite 12 923 8.7
Usave (RSA)
Checkers (RSA) 8 415 7.1
Non-RSA supermarkets 2 291 2.9
Shoprite
Of the Group`s 705 outlets, this mainstay brand operates 316 in 15 countries.
Of these, 252 do business in South Africa and 64 beyond its borders. The chain
is expected to add a further 53 stores in the next 18 months, 43 of these in
South Africa. For the year to 30 June, like-for-like sales in South Africa grew
4.2% to R11,589 billion. This should be viewed against the disruption caused by
the industrial action in October and November 2003 when mainly Shoprite stores
were targeted.
The effects of the extremely low food inflation were felt mostly at the lower
end of the FMCG market. With the biggest price reductions in staples, negative
internal inflation impacted on 19.2% of total food sales in Shoprite. This was
to a certain extent countered by stronger growth experienced in more profitable
non-food sales, leading to an improvement in the operating margin.
By managing the cost base well and further reducing shrinkage, management
succeeded in balancing food inflation with cost inflation. Management`s efforts
to bring more feet into the stores resulted in the number of customers
increasing by 6.1%. This higher traffic is expected to translate into market
share growth once customer spend increases.
Checkers
Management continued its extensive programme of re-positioning Checkers, giving
it a more clearly defined identity, with a stronger focus on service, product
ranges, freshness and quality. The chain has in particular upgraded its
specialist departments - its meat market, bakery and delicatessen - extending
the range and depth of convenience and value-added foods while also providing a
wider quality selection of perishables and fresh produce.
Checkers was affected less by the consequences of the industrial action against
the Group than Shoprite. In South Africa it grew sales on a like-for-like basis
8.0% from R7,423 billion to R8,019 billion. Operating profit for the total
Checkers operation increased 38.6% compared to 2003 and the operating margin
29.0%.
In the light of the increasing consumer acceptance the new Checkers format
enjoys, management has embarked on an aggressive programme to increase market
penetration, and 34 new-generation stores will open in selected areas during the
next 18 months. At the same time an extensive refurbishment programme has been
launched and in the next 12 months, 20 outlets will be upgraded to new-
generation standard.
Shoprite Usave
During the year the Group continued the roll-out of the new Usave format,
enabling it to enter communities too small to support a conventional
supermarket, whether inside South Africa or outside its borders, thus increasing
its penetration of the lower end of the market. In the 12 months to 30 June, 43
stores were added to bring the total to 59, of which 43 are in South Africa. A
further 60 are planned for the next 18 months.
Although the chain is still in its initial stages, those outlets trading for the
full 12 months produced a return on equity of 35%. Absolute focus on retail
basics is the key to the success of these stores, which stock just the 700
product lines identified by the Group`s IT systems as the top sellers in a
specific area or community. High-frequency replenishment of these small-format
stores reduces stockholding and storage space to the minimum, and every square
centimetre of trading space is used productively.
Operations outside South Africa
The non-RSA operations performed well, with sales growth of 20.7% on a like-for-
like basis and 26.2% on total sales at constant conversion rates. Despite the
continued strengthening of the rand, sales in rand terms still showed positive
growth of 2.9% to R2,291 billion.
Sales growth was lower than expected due to the effect of the strong rand on the
prices of products imported from South Africa. To assist consumers and retain
the Group`s price competitiveness, these products were sold at lower gross
margins. For these same reasons management was impelled to find increasingly
other sources of supply. Establishment costs of R13,0 million also burdened the
results of those countries the Group entered for the first time in the past
financial year.
The Group continued its bricks and mortar expansion in Africa as well as
building technology and infrastructure. The 64 Shoprite and four Checkers stores
operated outside South Africa are fully-fledged supermarkets largely
indistinguishable from their South African counterparts in equipment, lay-out
and ambiance. The product choice is comparable, with selected fresh produce
flown from South Africa to certain countries when not available locally. All
these stores are linked by satellite into the Group`s central database and
replenishment system.
Among the major property developments of the year were the completion of the
Group`s R90 million shopping centre and distribution facility in Luanda, Angola,
fully operational since August, 2003; and the R34 million shopping complex in
Kampala, Uganda, developed in conjunction with Massmart and housing a 4 000 m2
Shoprite superstore.
OK Franchise
The division suffered an operating loss of R11,7 million due to further right-
offs. The number of franchise stores reduced by 60 resulting from poor trading
conditions and a continuing shake-out of doubtful debtors. It is the view of
management that the OK Franchise business now has a solid base for growth that
will accelerate as trading conditions improve. For this reason, supporting
management structures available to members were not scaled despite the reduction
in membership, to ensure sufficient capacity to handle the envisaged growth.
A concerted campaign was launched during the year to upgrade franchise stores to
OK brand standards. This resulted in a considerable improvement in the general
offering of converted stores. At year-end there were 102 outlets trading under
the OK brand in addition to 117 Sentra and Value stores. The division also has
75 wholesale members trading as Megasave.
The Group remains confident that the OK Franchise concept is the correct one for
addressing opportunities in the smaller neighbourhood market. However, it also
accepts time is needed to build a base of sufficient size that the brand
requires for competing effectively in this environment.
Furniture
This furniture business, which includes the chains OK Furniture and House &
Home, performed extremely well ahead of the rest of the furniture retail sector.
It increased revenue 26.0% to R1,716 billion and operating profit 108.3% to R154
million. Despite a highly competitive market characterised by aggressive
discounting, the pressure on margins was countered by good house-keeping,
meticulous cost control and a tenacious focus on reducing inventory,
notwithstanding the need to supply new stores and to retain buffer stock to
counter long lead times on imported merchandise. The net debtors` book grew 21%
and provisions for unearned finance charges and doubtful debts remain more than
adequate.
During the year six new stores were opened and four unprofitable ones closed.
The two chains now operate a total of 167 outlets in South Africa, Lesotho,
Swaziland, Namibia and Botswana, with OK Furniture planning to open at least six
and House & Home two new outlets in the new financial year. The division`s
extensive refurbishment programme is also nearing completion and during the past
five years, most OK Furniture stores were fully refurbished, as were 15 of the
22 House & Home outlets.
Group prospects and outlook
Despite challenging trading conditions in certain segments of our market, we are
confident that the stronger turnover growth which manifested itself in the
second half of 2004 will continue to gain momentum in the new financial year and
lead to improved results. Our confidence is also based on the fact that we
expect to derive increasing benefits from our very substantial investment in our
advanced IT systems. These same systems will also enable us to achieve further
efficiencies in the management of our complex supply chains while allowing us to
extend our involvement in the area of virtual retailing through the growing
number of services we offer consumers. Africa, too, offers us the opportunity of
opening a number of additional stores on the existing infrastructure to achieve
economies of scale in certain countries to the north. Within South Africa, the
revitalised Checkers chain has potential for further growth in its existing
stores. The accelerated rollout of Usave outlets will also enable us to tap into
new markets both here and elsewhere on the continent.
Corporate governance
Shoprite acts in accordance with the principles embodied in the Code of
Corporate Practice and Conduct in the King Report 2002 (`the Code`). The Group
complies with the significant requirements incorporated in the Code and the JSE
Securities Exchange SA listing requirements.
Dividend no 111
The Board has declared a final dividend of 19,5 cents (2003: 16,5 cents) per
share, payable to shareholders on Monday, 20 September 2004. This brings the
total dividend for the year to 36,0 cents per ordinary share (2003: 30,5 cents).
The last day to trade cum dividend will be Friday, 10 September 2004. As from
Monday, 13 September 2004 all trading of Shoprite Holdings Ltd shares will take
place ex dividend. The record date is Friday, 17 September 2004.
Share certificates may not be dematerialised or re-materialised between Monday,
13 September 2004, and Friday, 17 September 2004, both days inclusive.
Accountability
These condensed consolidated preliminary results have been prepared in
accordance with South African Statements of Generally Accepted Accounting
Practice (`GAAP`) and Schedule 4 of the South African Companies Act (Act No 61
of 1973), as amended. The accounting policies are consistent with those used in
the annual financial statements for the year ended 30 June 2003, except as
stated below.
In accordance with the recommendations of the JSE Securities Exchange South
Africa, the Group now consolidates its share incentive scheme to ensure
compliance with AC 132: Consolidated financial statements and accounting for
investments in subsidiaries.
As per the requirements of AC103: Net profit or loss for the period, fundamental
errors and changes in accounting policies, the relevant comparative information
has been restated. The effect of the restatement is reflected below. The
restatement had no significant effect on earnings or headline earnings per
share.
30.06.04 30.06.03
R`m R`m
Operating profit (18) (23)
Exceptional items (215) 215
Investment income 27 6 265
Finance costs (315) (6 658)
Profit before tax (521) (201)
Dividends distributed to shareholders 161 134
Decrease in capital and reserves (4 331) (3 413)
(Decrease)/increase in loans originated by the (18 412) 28 307
enterprise
Increase/(decrease) in cash and cash equivalents 14 304 (29 730)
Increase in other 703 182
receivables
Increase in other payables 929 2 172
Adjusted headline earnings are calculated by excluding the after-tax effect of
exchange gains and losses from headline earnings.
Auditors` review opinion
The condensed consolidated preliminary results for the year ended 30 June 2004
have been reviewed by PricewaterhouseCoopers Inc. The auditors` unqualified
review opinion is available for inspection at the Company`s registered office.
Thanks to the management and staff
Difficult trading conditions and disruptive industrial action during the year
made enormous demands on both management and staff. That together they could
overcome these challenges and grow is a testimony to the calibre of our people,
who have coupled bold decision-making with total dedication and sheer hard work.
In thanking them we also want to extend our heartfelt appreciation to our
colleagues on the Board for their support and the conscientious manner in which
they fulfilled their duties to the Group.
By order of the Board
C H Wiese
Chairman
J W Basson
Chief executive
23 August 2004
Condensed group income statement
Reviewed Audited
12 months to % 12 months to
R`000 30/06/04 change 30/06/03
Revenue 27 171 644 7.49 25 278 283
Sale of merchandise 26 641 233 7.32 24 824 516
Finance income earned 171 322 16.69 146 817
Franchise fees received 19 779 (7.11) 21 293
Operating lease income 221 187 2.47 215 862
Net premiums earned 118 123 69.24 69 795
Reclassification of franchise fees
received, operating lease income
and net premiums earned as revenue
in the current year resulted in
adjustments to the relative
comparative figures to conform with
changes in presentations made in
the current year.
Gross profit 4 063 879 8.77 3 736 360
Other operating income 2 263 846 15.13 1 966 343
Depreciation (407 382) 11.99 (363 772)
Operating leases (857 341) 8.07 (793 347)
Staff costs (2 273 837) 12.69 (2 017 815)
Other operating costs (2 086 996) 8.44 (1 924 487)
Operating profit before exchange
losses 702 169 16.39 603 282
Exchange losses (78 848) (132 945)
Operating profit before exceptional
items 623 321 32.53 470 337
Exceptional items 161 594 133 083
Operating profit after exceptional
items 784 915 30.08 603 420
Investment income 57 739 69 341
Finance costs (30 062) (69 998)
Profit before tax 812 592 34.81 602 763
Tax (244 107) 35.18 (180 585)
Profit after tax 568 485 34.66 422 178
Minority interest (11 674) (2 317)
Net profit attributable to 556 811 32.62 419 861
shareholders
Earnings per share (cents) 109,8 32.8 82,7
Diluted earnings per share (cents) 107,7 30.4 82,6
Headline earnings per share (cents) 79,9 38.7 57,6
Diluted headline earnings per share
(cents) 78,3 36.2 57,5
Adjusted headline earnings per
share (cents) 93,5 16.7 80,1
Adjusted diluted headline earnings
per share (cents) 91,7 14.8 79,9
Ordinary dividend per share (cents) 33,0 15.8 28,5
Number of ordinary shares (`000)
used for
calculation of
- earnings per share 506 979* 507 394*
- diluted earnings per share 517 007* 508 233*
(*weighted average)
Condensed group statement of changes in equity
Reviewed Audited
12 months to 12 months to
R`000 30/06/04 30/06/03
Balance at 1 July 1 732 939 1 457 428
(Acquisition)/disposal of treasury shares (3 080) 2 237
Net fair value profits/(losses) on 8 969 (1 958)
available-for-sale investments, net of tax
Net profit for the year 556 811 419 861
Dividends distributed to shareholders (167 424) (144 629)
Balance at 30 June 2 128 215 1 732 939
Condensed group segment information
Reviewed Audited
12 months to 12 months to
R`000 30/06/04 30/06/03
Revenue - by business segment
- Supermarkets 25 455 828 23 916 381
- Furniture 1 715 816 1 361 902
Total revenue 27 171 644 25 278 283
Operating profit - by business segment
- Supermarkets 469 288 396 381
- Furniture 154 033 73 956
Total operating profit 623 321 470 337
Condensed group balance sheet
Reviewed Audited
R`000 30/06/04 30/06/03
Assets
Non-current assets 2 452 285 1 996 257
Property, plant and equipment 2 178 809 1 822 380
Available-for-sale investments 6 980 55 071
Loans originated by the enterprise 66 537 69 404
Deferred tax assets 169 620 165 853
Intangible assets 30 339 (116 451)
Current assets 5 479 081 4 848 018
Inventories 2 620 150 2 585 363
Trade and other receivables 1 622 520 1 404 578
Current tax asset 29 181 32 349
Available-for-sale investments 53 624 -
Loans originated by the enterprise 19 538 54 022
Cash and cash equivalents 1 134 068 771 706
Total assets 7 931 366 6 844 275
Equity and liabilities
Capital and reserves 2 128 215 1 732 939
Minority interest 38 007 31 205
Non-current liabilities 218 325 227 728
Interest-bearing borrowings 2 450 2 450
Deferred tax liabilities 1 939 4 224
Provisions 213 936 221 054
Current liabilities 5 546 819 4 852 403
Trade and other payables 5 267 095 4 748 780
Current tax liability 223 281 47 877
Provisions 48 567 54 894
Bank overdraft 5 833 -
Shareholders for dividends 2 043 852
Total equity and liabilities 7 931 366 6 844 275
Reconciliation of headline earnings
Reviewed Audited
12 months 12 months
to to
R`000 30/06/04 30/06/03
Net profit attributable to shareholders 556 811 419 861
Exceptional items after tax (160 140) (133 083)
Profit on sale of operation (68) -
(Reversal of impairment)/impairment of
buildings (3 067) 1 742
Impairment of unlisted investment 5 119 6 308
Amortisation of negative goodwill (150 036) (153 002)
Write-off of goodwill - 3 978
(Reversal of impairment)/impairment of
amounts owing by
share incentive trust participants (7 946) 7 946
Payment for lease cancellation 3 000 -
Receipt for lease cancellation (6 975) -
Prescription of amounts owing (167) (55)
Other items after tax
Loss on disposal and scrapping of plant and 3 194 2 481
equipment
Amortisation of goodwill 5 087 2 855
Headline earnings 404 952 292 114
Exchange losses after tax 68 988 114 111
Adjusted headline earnings 473 940 406 225
Supplementary information
Reviewed Audited
R`000 30/06/04 30/06/03
1. Capital commitments 174 053 188 805
2. Contingent liabilities 14 707 34 106
3. Net asset value per share (cents) 419 341
4. Total number of shares in issue (adjusted for 507 387 507 799
treasury shares)
Condensed cash flow statement
Reviewed Audited
12 months to 12 months to
R`000 Notes 30/06/04 30/06/03
Cash generated by operations 1 341 611 1 036 192
Operating profit before exceptional 623 321 470 337
items
Non-cash items 1 499 276 502 278
Changes in working capital 2 213 447 63 522
Exceptional items 3 5 567 55
Net finance costs 22 971 (6 206)
Dividends received 4 706 5 549
Dividends paid (171 105) (146 130)
Tax paid (75 012) (72 238)
Cash flows from operating activities 1 123 171 817 167
Cash flows from investing activities (736 243) (632 240)
Purchase of property, plant and (792 693) (561 804)
equipment
Proceeds on disposal of property, plant 26 733 27 583
and equipment
Acquisition of interest in operation (14 147) (74 605)
Disposal of interest in
subsidiaries/operations 5 200 -
Acquisition of further interest in - (11 081)
subsidiaries
Other investment activities 38 664 (12 333)
Net cash flow 386 928 184 927
Cash flows from financing activities (3 080) 9 280
Acquisition of treasury shares (3 703) (1 316)
Proceeds on sale of treasury shares 623 3 553
Proceeds on issue of additional share
capital to minorities - 7 043
Movement in cash and cash equivalents 383 848 194 207
Acquired through acquisitions of - 1 316
subsidiaries
Effect of exchange rate movements on
cash and cash equivalents (27 319) (74 554)
Net movement in cash and cash
equivalents 356 529 120 969
Cash flow information
1.Non-cash items
Depreciation on property, plant and 407 382 363 772
equipment
Amortisation of goodwill 5 087 2 855
Loss on disposal and scrapping of plant 4 117 2 919
and equipment
Net fair value losses/(gains) on 3 842 (213)
financial instruments
Exchange losses 78 848 132 945
499 276 502 278
All foreign exchange differences are now
eliminated in the cash flow statement.
The comparative information has been
restated to reflect the change.
2.Changes in working capital
Inventories (98 169) (429 280)
Trade and other receivables (227 341) 20 170
Trade and other payables 552 402 482 441
Movement in provisions (13 445) (9 809)
213 447 63 522
3.Exceptional items
Exceptional items per income statement 161 594 133 083
Profit on disposal of operation (97) -
(Reversal of impairment)/impairment of (3 067) 1 742
buildings
Impairment of unlisted investment 5 119 6 308
(Reversal of impairment)/impairment of
amounts owing by share incentive
trust participants (7 946) 7 946
Write-off of goodwill - 3 978
Amortisation of negative goodwill (150 036) (153 002)
5 567 55
Directorate and administration
Executive directors:
J W Basson (chief executive), C G Goosen (deputy managing director),
BR Weyers, A N van Zyl, B Harisunker
Non-executive directors:
C H Wiese (chairman), J A Louw, J J Fouche, T R P Hlongwane, J F Malherbe, J G
Rademeyer
Company secretary:
A N van Zyl
Registered office:
Cnr William Dabs and Old Paarl Roads, Brackenfell, 7560
PO Box 215, Brackenfell, 7561 , South Africa
Telephone: +27 (0)21 980 4000
Facsimile: +27(0)21 980 4050
Auditors:
PricewaterhouseCoopers Inc
1 Waterhouse Place, Century City
PO Box 2799, Cape Town, 8001, South Africa
Transfer secretaries:
Computershare Investor Services 2004 (Pty) Ltd
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown 2107
Telephone +27 (0)11 370 5000
Facsimile +27 (0)11 688 5520
Sponsor: Nedbank Capital
135 Rivonia Road, Sandown, 2196
PO Box 1144, Johannesburg, 2000, South Africa
Telephone +27 (0)11 295 8602
Facsimile +27 (0)11 294 8602
website: www.shoprite.co.za
Date: 24/08/2004 08:00:34 AM Produced by the JSE SENS Department
