| Thu 28 Apr 2005, 15:18 | | Group results for the year to 28 February 2005 |
|
Tradehold Limited - Group results for the year to 28 February 2005
Tradehold Limited
(Registration number 1970/009054/06)
JSE share code: TDH ISIN: ZAE000026902
Group results for the year to 28 February 2005
Group income statement
Audited Reviewed Reviewed Audited
12 months 12 months 12 months 12 months
to to to to
29/02/04 28/02/05 28/02/05 29/02/04
GBP`000 GBP`000 R`000 R`000
313 392 276 094 Revenue 3 175 209 3 776 851
280 281 276 094 Continued operations 3 175 209 3 373 663
33 111 - Discontinued operations - 403 188
(8 626) 14 910 Operating profit/(loss) 163 592 (112 415)
(5 366) 14 910 Continued operations 163 592 (71 703)
(3 260) - Discontinued operations - (40 712)
696 1 441 Net interest received 16 402 8 462
Profit/(loss) before
(7 930) 16 351 exceptional items 179 994 (103 953)
(1 960) 656 Exceptional items 6 966 (23 950)
Profit/(loss) before
(9 890) 17 007 taxation 186 960 (127 903)
(976) 3 477 Taxation 38 286 (13 981)
Profit/(loss) after
(8 914) 13 530 taxation 148 674 (113 922)
(1 480) 4 330 Minority interest 46 728 (20 781)
Attributable to normal
(1 632) 4 521 activities 49 238 (22 587)
Attributable to
152 (191) exceptional items (2 510) 1 806
(7 434) 9 200 Net profit/(loss) 101 946 (93 141)
pence pence cents cents
Earnings per share
(1,5) 2,4 - before exceptional items 26,6 (19,4)
(2,1) 2,6 - after exceptional items 29,4 (26,8)
(2,0) 1,3 - headline earnings 13,6 (24,7)
Number of shares for
calculation of earnings
347 330 347 330 per share (`000) 347 330 347 330
Group balance sheet
Audited Reviewed Reviewed Audited
29/02/04 28/02/05 28/02/05 29/02/04
GBP`000 GBP`000 R`000 R`000
52 504 69 480 Non-current assets 775 471 648 583
Property, plant and
34 654 53 897 equipment 601 550 428 079
12 856 13 681 Investments 152 693 158 808
4 994 1 902 Deferred taxation 21 228 61 696
89 023 79 317 Current assets 885 253 1 099 692
42 372 39 734 Inventories 443 471 523 421
12 640 10 375 Accounts receivable 115 794 156 138
34 011 29 208 Cash and cash equivalents 325 988 420 133
141 527 148 797 Total assets 1 660 724 1 748 275
Ordinary shareholders`
54 747 63 993 equity 714 215 676 292
12 12 Preference share capital 144 144
8 187 23 633 Minority interest 263 772 101 131
17 547 16 779 Non-current liabilities 187 270 216 756
- 4 300 Long-term loans 47 992 -
- 487 Deferred taxation 5 435 -
17 547 11 992 Provisions 133 843 216 756
61 034 44 380 Current liabilities 495 323 753 952
Short-term loans and bank
8 689 1 156 overdrafts 12 906 107 336
52 345 43 224 Other current liabilities 482 417 646 616
Total equity and
141 527 148 797 liabilities 1 660 724 1 748 275
Group cash flow statement
Audited Reviewed Reviewed Audited
12 months 12 months 12 months 12 months
to to to to
29/02/04 28/02/05 28/02/05 29/02/04
GBP`000 GBP`000 R`000 R`000
(25 892) 9 417 Cash flow from operations 84 242 (376 764)
20 688 (21 980) Investment activities (254 642) 292 920
Net acquisition of fixed
13 188 (20 282) assets (234 760) 166 459
Other investment
7 500 (1 698) activities (19 882) 126 461
(5 204) (12 563) Net cash flow (170 400) (83 844)
(960) 15 760 Financing activities 175 079 (12 794)
Proceeds from share issue
389 10 993 of subsidiary 122 693 5 123
(1 349) 4 767 Net debt raised/(repaid) 52 386 (17 917)
Decrease in cash and cash
(6 164) 3 197 equivalents 4 679 (96 638)
Group statement of changes in equity
Audited Reviewed Reviewed Audited
12 months 12 months 12 months 12 months
to to to to
29/02/04 28/02/05 28/02/05 29/02/04
GBP`000 GBP`000 R`000 R`000
62 560 54 747 Balance at 1 March 676 292 811 288
Adjustment at 1 March 2003
in terms of AC132 in
respect of the
consolidation of share
(125) - incentive schemes - (1 620)
(254) 46 Exchange rate adjustments (64 023) (40 235)
Net profit/(loss) for the
(7 434) 9 200 year 101 946 (93 141)
54 747 63 993 714 215 676 292
Supplementary information
Audited Reviewed Reviewed Audited
12 months 12 months 12 months 12 months
to to to to
29/02/04 28/02/05 28/02/05 29/02/04
GBP`000 GBP`000 R`000 R`000
1. Depreciation for the
4 883 5 190 year 59 923 59 080
2. Capital expenditure
15 419 26 484 for the year 304 073 189 770
3. Calculation of
headline earnings
(7 434) 9 200 Net profit/(loss) 101 946 (93 141)
Attributable
343 (1 571) exceptional items (17 831) 3 904
Surplus on revaluation
of investment
properties after
taxation and minority
- (1 777) interest (20 027) -
(Profit)/loss on sale
and scrapping of fixed
assets after taxation
271 (1 457) and minority interest (16 826) 3 284
(6 820) 4 395 47 262 (85 953)
Audited Reviewed Reviewed Audited
29/02/04 28/02/05 28/02/05 29/02/04
4. Number of shares in 347 330 347 330
347 330 347 330 issue (`000)
5. Net asset value per
15,8 18,4 share (pence/cents) 205,6 194,7
6. Investments
12 856 13 681 Loans 152 693 158 808
2 705 2 032 7. Capital commitments 22 679 33 415
13 888 15 355 8. Contingent liabilities 171 377 171 558
9. Operating lease
29 742 29 906 commitments 333 781 367 403
Analysis of results
Audited Reviewed Reviewed Audited
12 months 12 months 12 months 12 months
to to to to
29/02/04 28/02/05 28/02/05 29/02/04
GBP`000 GBP`000 R`000 R`000
Attributable earnings of
(1 931) 5 004 Brown & Jackson plc 54 400 (26 678)
Other Tradehold Ltd group
(3 391) 3 349 companies 38 070 (40 707)
Profit/(loss) before
(5 322) 8 353 exceptional items 92 470 (67 385)
Attributable exceptional
(2 112) 847 items 9 476 (25 756)
(7 434) 9 200 Net profit/(loss) 101 946 (93 141)
Operating review
Tradehold Limited has returned to profitability after three years of operational
losses during which time its retail and property interests in the UK were
extensively restructured and re-aligned. Its investments are now centred in the
listed UK retailing group Brown & Jackson plc (B&J), in which it holds a
controlling 54,5% interest, and in Tradegro UK, which owns a property portfolio
of primarily retail buildings. Tradehold`s return to profitability, signalled
halfway through the 2004 financial year, was delayed by B&J`s poor Christmas
trading season. However, in the 2005 financial year B&J posted much improved
results enabling Tradehold to show a profit for the year.
Brown & Jackson plc (B&J)
During the year, which covered a 52-week reporting period as against 53 weeks in
2004, B&J returned to profitability by posting an operating profit of GBP7,4
million (2004: an operating loss of GBP0,4 million). Overall sales showed a
marginal drop, mainly due to the closure of 15 unprofitable stores, but like-for
like sales increased 2,5% as against nil growth the previous year. Margins
improved due to better cost control within stores while operating expenses were
also lower, and the group ended the year with positive cash flow from
operations, a strong balance sheet and no debt.
The reporting period represented the second year of major change within the
business aimed at turning B&J into a formidable competitor in the variety
discount sector. Its main brand is still Poundstretcher. However, in the
previous financial year B&J piloted a new brand, `...instore`, offering an
improved shopping environment but at prices normally associated with the value
end of the retail market.
The concept proved so successful that during the period under review 78
Poundstretcher shops were converted to `...instore` outlets and, as the number
of conversions increased, so did the consumer recognition and approval of the
brand and the values it represents. A further 50 conversions are being planned
for the new financial year as well as 10 new stores. At the end of February 2005
B&J operated a total of 319 stores throughout the UK and Northern Ireland, 87 of
them being `...instore` outlets.
B&J`s combined new head office and distribution centre at Huddersfield was
completed during the year on time and within budget. The distribution centre
became fully operational in early March this year and is to play a pivotal role
in the group`s turnaround programme.
The group was able to significantly reduce the high carry-over seasonal stock
from the disappointing 2003 Christmas trading period while retaining margins,
but found it difficult to grow sales at the same time. The switchover from the
old distribution facilities in Leeds to the new centre in Huddersfield was
managed with the minimum disruption.
Tradegro UK
The assets of Tradegro UK, a wholly-owned subsidiary of Tradehold, consist of a
portfolio of mainly retail properties which were let predominantly to the retail
chain Your More Store (YMS) before the latter ceased trading in September 2004.
This necessitated an extensive restructuring of the portfolio, with a number of
ex-YMS sites sold off and new properties to the value of more than GBP8 million
acquired.
As the primary function of the group`s property portfolio is to support its core
retail activity, management works closely with B&J, especially in obtaining
properties that can accommodate new `...instore` outlets. It is management`s
intention to grow the group`s property portfolio strongly in the new financial
year.
Comments on the results
AC133 - Financial instruments: Recognition and measurement
The application of AC133 last year resulted in a reduction of B&J`s operating
profit by GBP4,3 million when consolidated at Tradehold level due to the
recognition of open foreign exchange contracts at year-end. This year, the
adjustment produced an increase in the operating profit of GBP4,4 million; after
tax and minority interest, GBP1,7 million is attributable to Tradehold
shareholders. This adjustment is the result of differences between South African
and UK accounting standards.
Exceptional items
Profit on the disposal of fixed property GBP0,591 million
Relocation expenditure (GBP1,290
million)
Rights issue cost and loss on change of interest in
B&J (GBP1,279
million)
Net recovery of previous write-offs on disposal of
subsidiaries GBP2,634 million
GBP0,656 million
Revaluation of investment properties
Properties that are not occupied by group companies were reclassified as
investment properties with effect from 1 March 2004. These properties are
revalued annually, resulting in the operating profit for this year being
increased by GBP2,6 million.
Dividend
The board does not propose to recommend a dividend in respect of the financial
year to 28 February 2005.
Outlook
The board believes the foundations are now in place for sustainable future
growth and is optimistic about the outlook for the new financial year. B&J is
entering the third year of its five-year turnaround programme and is already
delivering a much improved trading and financial performance within a clear
strategic framework. The roll-out of the highly successful `...instore` is
continuing apace while the enlarged capacity of the new distribution facility, a
crucial component of its turnaround programme, will enable management to add new
stores, expand ranges and further contain operating costs.
Accounting policy
The annual financial statements have been prepared mainly on the historical cost
basis in accordance with South African Statements of Generally Accepted
Accounting Practice. In all material respects the accounting policies accord
with those adopted during the previous financial year, except as set out below.
To comply with the requirements of AC132: Consolidated financial statements and
accounting for investment in subsidiaries, share incentive schemes in the group
are now consolidated. The effect of the restatement of comparative figures is
negligible and, in sterling terms, had no impact on either headline earnings per
share or net asset value per share for the year ended 29 February 2004.
The group`s auditors, PricewaterhouseCoopers Inc., reviewed the group`s results.
Their unqualified review report is available on request from the company
secretary.
Reporting currency
As the operations of Tradehold`s subsidiaries are conducted in pound sterling
and because of the distortion caused by the fluctuating value of the rand, the
company is reporting its results in the former currency. Rand equivalents are
provided to comply with regulatory requirements.
C H Wiese C Moore
Chairman Director
Luxemburg
28 April 2005
Tradehold Limited
(Registration number 1970/009054/06)
JSE share code: TDH ISIN: ZAE000026902
Date: 28/04/2005 03:01:30 PM
Produced by the JSE SENS Department
