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The House of Busby Limited - Reviewed Results For The Year Ended 30 June 2004
THE HOUSE OF BUSBY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1997/009173/06)
Share code: BSB
ISIN: ZAE000013637
REVIEWED RESULTS FOR THE YEAR ENDED 30 JUNE 2004
SUMMARISED CONSOLIDATED INCOME STATEMENT
Restated
Reviewed Audited
Year ended Year ended
30 June 30 June
2004 2003 Change
R`000 R`000 %
Revenue 429 368 413 988 4
Continuing operations 418 743 411 069
Discontinued operations 10 625 2 919
Operating income before
loss on foreign exchange 46 971 43 703 8
Loss on foreign exchange 8 951 8 381
Operating income before
depreciation and amortisation
of intangibles 38 020 35 322 8
Continuing operations 40 313 35 479
Discontinued operations (2 293) (157)
Depreciation 8 128 4 501
Amortisation of intangibles 2 332 2 603
Operating income before net
finance charges 27 560 28 218
Net finance cost 2 513 6 307
Interest received 243 57
Interest paid (2 756) (6 364)
Net income before exceptional
items 25 047 21 911 14
Exceptional items 4 202 7 614
Net income before taxation 20 845 14 297
Taxation 7 203 3 563
Net income after taxation 13 642 10 734 27
Attributable to minorities 12 9
Net income attributable to
ordinary shareholders 13 630 10 725
Weighted average number of
shares in issue (`000)
(net of treasury shares) 58 544 63 100
Headline earnings per
share (cents)* 32,5 30,5 7
Earnings per share (cents)* 23,3 17,0 37
*No dilution is expected in respect of headline earnings per share and earnings
per share in the foreseeable future.
RECONCILIATION OF HEADLINE EARNINGS
Restated
Reviewed Audited
Year ended Year ended
30 June 30 June
2004 2003
R`000 R`000
Net income attributable to
ordinary shareholders 13 630 10 725
Add: Loss on discontinuing
operations 3 198 6 941
Impairment of property, plant
and equipment 1 004 -
Amortisation of goodwill 1 166 1 595
Headline earnings 18 998 19 261
SUMMARISED CONSOLIDATED BALANCE SHEET
Restated
Reviewed Audited
30 June 30 June
2004 2003
R`000 R`000
ASSETS
Non-current assets 75 189 80 175
Property, plant and equipment 37 516 36 971
Intangible assets 15 591 17 035
Non-current receivables - 720
Minority interest 12 119 12 131
Deferred taxation 9 963 13 318
Current assets 206 385 184 639
Inventories 117 258 117 753
Trade and other receivables 69 609 55 177
Bank balances and cash 19 518 11 709
Total assets 281 574 264 814
EQUITY AND LIABILITIES
Shareholders` funds 197 755 188 653
Overdraft and interest-bearing
debt 25 073 24 000
Current liabilities 58 746 52 161
Total equity and liabilities 281 574 264 814
Number of shares in issue (`000)
(net of treasury shares) 57 799 59 237
Net asset value per
share (cents) 342 318
Tangible net asset value
per share (cents) 315 290
SUMMARISED STATEMENT OF CHANGES IN EQUITY
Non-
distri- Accu-
Share Share butable mulated
capital premium reserves profits Total
R`000 R`000 R`000 R`000 R`000
Balances at
30 June 2002 as
previously reported 70 120 467 13 943 61 203 195 683
Prior year adjustment
share scheme trust (2) (3 936) - 302 (3 636)
Restated opening
balance at
30 June 2002 68 116 531 13 943 61 505 192 047
Shares repurchased (9) (11 035) (11 044)
Dividends paid (3 119) (3 119)
Currency translation
differences 44 44
Net income
attributable to
ordinary
shareholders 10 725 10 725
Balances at
30 June 2003 59 105 496 13 987 69 111 188 653
Shares repurchased (1) (2 322) (2 323)
Dividends paid (2 435) (2 435)
Currency translation
differences 230 230
Net income
attributable
to ordinary
shareholders 13 630 13 630
Balances at
30 June 2004 58 103 174 14 217 80 306 197 755
SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
Restated
Reviewed Audited
Year ended Year ended
30 June 30 June
2004 2003
R`000 R`000
Cash generated from operations 28 651 36 881
Net finance cost (2 513) (6 307)
Dividend paid (2 435) (3 119)
Taxation paid (3 175) (4 510)
Cash flows from operating activities 20 528 22 945
Cash flows from investing activities (11 469) (8 819)
Cash flows from financing activities (2 323) (26 401)
Increase/(decrease) in cash and cash
equivalents 6 736 (12 275)
Cash and cash equivalents at
beginning of year (12 291) (16)
Cash and cash equivalents at
end of year (5 555) (12 291)
SEGMENTAL ANALYSIS
Revenue Revenue EBITDA EBITDA NAV NAV
% % % % % %
2004 2003 2004 2003 2004 2003
Distribution 62 63 62 64 75 78
Retail 38 37 38 36 25 22
100 100 100 100 100 100
COMMENTS
EARNINGS
Revenue increased by 4% in the current financial year despite the deflationary
environment in which the group operated. In the previous financial year revenue
from the Cricket World Cup accounted for 8% of the group`s revenue and
contributed significantly to the profits in that year.
The volatile local currency has once again had a significant impact on earnings
in the current financial year. The strong Rand at year-end resulted in
significant unrealised foreign exchange losses arising from the revaluation of
forward exchange contracts as at 30 June 2004.
The revision of the estimated useful lives of fixtures and fittings in the
group, as highlighted in our interim results, led to a R3,5 million increase in
the depreciation charge for the year under review.
Active management of debt levels throughout the year has resulted in a 60%
decrease in net finance charges.
Headline earnings per share increased by 7% over the previous financial year,
while earnings per share increased by 37% over the comparative period.
REVIEW OF OPERATIONS
The retail division performed well in the second half of the financial year,
after a difficult first six months. Management`s focus on non-performing stores
has been successful, and as at year-end there were no loss-making stores in this
division.
The distribution arm of the group performed strongly during the period under
review, and remains a market leader in the distribution of leather goods,
handbags, accessories, eyewear, apparel and related products. This performance
was achieved despite pressure on margins largely brought about by the
strengthening of the South African Rand.
PROSPECTS
Both the retail and distribution divisions are trading to budget subsequent to
year-end.
The retail division has plans to open a number of new stores in key locations
countrywide. The first two Claire`s accessory stores, a new chain, opened in
August and both stores are performing to expectations.
The distribution division has introduced two new business units, both in the
apparel and related products areas of the business. These units are expected to
contribute to earnings in the medium to long term. The existing distribution
businesses are expected to grow organically in the 2005 financial year.
COMMITMENTS
The group has operating lease commitments of R32,9 million (2003: R29,4 million)
in the next 12 months, and R32,4 million (2003: R50,1 million) thereafter.
DIVIDEND
Notice is hereby given that a final dividend of 5 cents per share has been
declared. Shareholders are advised that the last date to trade `CUM` dividend
will be Friday, 22 October 2004. The shares will trade `EX` dividend as from
Monday, 25 October 2004. The record date will be Friday, 29 October 2004 and the
dividend will be payable on Monday, 1 November 2004. Share certificates may not
be dematerialised or rematerialised between Monday, 25 October 2004 and Friday,
29 October 2004, both days inclusive.
ACCOUNTING POLICIES
The same accounting policies and methods of computation have been used in
preparation of these preliminary financial statements as were used in the annual
financial statements to 30 June 2003 except for the consolidation of The House
of Busby share scheme trust. The accounting policies comply with South African
Statements of Generally Accepted Accounting Practice.
RESTATEMENT OF COMPARATIVE FIGURES
The group has consolidated the House of Busby share scheme trust in accordance
with the JSE Securities Exchange South Africa`s interpretation of the provisions
AC132.
Accordingly, the comparative figures have been restated where necessary.
INDEPENDENT REVIEW
The preliminary results for the year ended 30 June 2004 have been reviewed by
Fisher Hoffman PKF (Jhb) Inc., their unqualified review opinion is available for
inspection at the company`s registered office.
On behalf of the board of directors
K L Brouze
Chief executive officer
Johannesburg
14 September 2004
TRANSFER SECRETARIES:
Computershare Investor Services 2004 (Pty) Limited, 70 Marshall Street,
Johannesburg 2001.
PO Box 61051, Marshalltown 2107
REGISTERED OFFICE:
11 Height Street, Doornfontein 2094.
PO Box 16647, Doornfontein 2028
DIRECTORS:
Alec Rogoff Independent non-executive chairman, Keith Brouze Chief executive
officer, David Brouze Non-executive director, Martin Duarte Managing director -
Busby Retail, Mark Gordon Operations director, Stan Melnick Financial director,
Selwyn Moss Managing director - Eyewear, Steven Stein Independent - Non-
executive director.
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