| Mon 30 May 2005, 8:33 | | Super Group Limited - Reviewed Results For The Yea |
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Super Group Limited - Reviewed Results For The Year Ended 31 March 2005
Super Group Limited
(Incorporated in the Republic of South Africa) (Registration number1943/016107/06)
ISIN number: ZAE000011334
Share code SPG
REVIEWED RESULTS FOR THE YEAR ENDED 31 MARCH 2005Revenue increased to exceed R8,3 billion + 19%
Net profit for the year + 13%
Headline earnings + 18%
Final dividend per share + 16%COMMENTARY
Super Group delivered solid growth from operations for the eighteenth
consecutive year. Revenue increased 19% to R8,3 billion and trading income for
the year increased 19% to R732 million resulting in the group trading marginsbeing maintained at 8,7%. Net profit for the year increased 13% to R395 million
and headline earnings per share increased 5% from 123,8 cents to 129,5 cents.
Operating cash flow before working capital increased by 22% underpinning the
strong trading income growth. The increase in working capital was due to delaysin payment on certain fleet contract debtors, higher Retail Supply Chain
inventory levels from expansions to the product range and a change in payment
terms for freight clearing companies.
Cash was invested to expand the rental fleet, develop a new warehouse park andopen new Autozone stores to support the group`s future organic growth.
Significant investments were made in Fleet Solutions, through the acquisition of
FleetAustralia, and the addition of the Mica group to Retail Supply Chain. In
August 2004, Super Group concluded one of the most significant black empowermenttransactions to date. In terms of this transaction, Peu Group acquired a 25,1%
stake in Super Group through a share-for-share swap of its original 30%
shareholding in FleetAfrica and a further subscription for Super Group ordinary
and `A` ordinary shares. The increase in goodwill and intangibles isattributable to the above acquisitions.
The balance sheet of the group remains strong. In June 2004, Super Group
successfully raised a R900 million corporate bond. There is no recourse to Super
Group and its remaining subsidiaries in respect of the debt portion of theFleetAustralia acquisition. At year end, Super Group had net cash of R904
million and is well positioned to capitalise on growth opportunities within its
various businesses.
Divisional overviewSupply Chain Division
Supply Chain Management remains a core focus of the group. Revenues increased
23%, excluding businesses acquired in the comparative period, as a result of
being awarded significant new contracts and extending the scope of services toexisting clients. As expected, trading margins declined to 16% with the
inclusion of lower margin businesses. During the year, Super Group was awarded
two significant FMCG supply chain contracts. A full pipeline of potential new
supply chain contracts has been maintained.Fleet Solutions, managing in excess of 66 000 vehicles in South Africa and
Australia, had another exciting year. FleetAfrica increased operating income by
25% for the period as a result of new contracts and operating efficiencies
coming to the fore. FleetAustralia, acquired in June 2004, is the largest fleetmanagement company not owned by a bank or motor manufacturer. FleetAustralia
performed in line with expectations. The recent acquisition of SMB Fleet
Management further strengthens Super Group`s position within the Australian
fleet management industry.Cross-border Transport business performed poorly as a result of the continuing
deterioration in trading conditions in the region. The continued uncertainty,
instability and high levels of inflation in Zimbabwe have necessitated a partial
impairment of goodwill relating to the investment in the Zimbabwean operation.The transport and logistics infrastructure continues to service the region
awaiting an upturn in the medium term.
Retail Supply Chain comprises Super Group`s existing Automotive Parts business
and the recently acquired Mica home improvement group. The underlying philosophyof these investments is to create a competitive advantage through the
implementation of the group`s supply chain skills and technologies. The strong
revenue growth is attributable to Mica. Revenues in the Automotive Parts
business increased 8% as prices were negatively affected by the strengtheningRand. Trading margins are expected to improve as the benefits of the group`s
supply chain and procurement expertise, particularly within the Mica group,
comes to the fore.
Automotive DivisionDealerships results, including the Extreme 16 closure cost of R24 million, were
disappointing with margins continuing to be negatively affected by the
challenging used vehicle market. In the latter part of the year, investment in
dealerships was made which will support future growth.Services
This division comprises group treasury and insurance and performed to
expectations.
Accounting PoliciesThe principle accounting policies, as outlined in the 2004 annual report, which
comply with South African Statements of Generally Accepted Accounting Practice
(GAAP) have been consistently applied except for the adoption of AC140 Business
Combinations (IFRS 3) and AC128 Impairment of Assets (IAS 36). The group hasprospectively applied the requirements of these revised statements to business
combinations with agreement dates on or after 1 April 2004. As a consequence of
this change in policy, goodwill is not amortised but must be tested for
impairment annually or more frequently if events or changes in circumstancesindicate that the goodwill might be impaired.
The group is in the process of converting to International Financial Reporting
Standards (IFRS) and will be compliant from 1 April 2005. South African
Statements of GAAP are currently closely aligned with IFRS and changes areexpected to be restricted to a few areas.
Acquisition of SMB Fleet Management (Pty) Limited (`SMB`) (incorporated in
Australia)
Effective from 1 April 2005, Super Group acquired 70% of SMB with the balancebeing acquired by a consortium of private equity investors. With 14 000 vehicles
under management, SMB is the premier provider of novated leases and the
acknowledged market leader in the novated lease segment. Owing to SMB`s
excellent cash generation ability, Super Group has once again used debtfinancing ring-fenced to the Australian subsidiary.
Auditors` Review
The balance sheet, income statement, cash flow statement and condensed statement
of changes in shareholders` equity, has been reviewed by the Company`s auditors,KPMG Inc. Their unqualified review report is available for inspection at the
Company`s registered office.
Prospects
Indications are that the macro economic environment will remain stable withsound fiscal disciplines and favourable interest rates, whilst exchange rates
remain unpredictable. Super Group should continue to achieve real earnings
growth in 2006 driven by:
* improving operational efficiencies in all the businesses;* continued market share growth and improving the supply chain efficiencies in
its retail supply chain business, especially in the Mica business;
* capitalising on its full pipeline of potential new supply chain contracts;
and* other major Government fleet and supply chain outsourcing contracts.
Appreciation
Appreciation is extended to directors, management and staff for their efforts.
Our advisors, financiers, customers and suppliers are similarly thanked. Ourshareholders are thanked for their belief in, and support of, Super Group.
Dividends
A dividend of 37 cents (2004: 32 cents) per ordinary share has been declared in
respect of the year ended 31 March 2005 and is payable to shareholders recordedin the register at the close of business on Friday, 8 July 2005.
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, 1 July 2005
Shares commence trading ex dividend Monday, 4 July 2005
Record date Friday, 8 July 2005
Payment of dividend Monday, 11 July2005
Share certificates may not be dematerialised or rematerialised between Monday, 4
July and Friday, 8 July 2005, both days inclusive.
CONSOLIDATED CASH FLOW STATEMENTS Reviewed Audited
Year ended Year ended
31 March 31 March
2005 2004 R`000 R`000
Cash flows from operating activities
Operating cash flow before working
capital changes 881 262 719 840Working capital changes (291 327) (119 746)
Increase)/decrease in inventories (84 550) 8 437
Increase in trade and other
receivables (151 146) (98 837)Decrease)/increase in trade and
other payables (30 173) 45 183
Decrease in fund reserves (16 645) (34 936)
Foreign currency adjustment toworking capital (8 813) (39 593)
Cash generated from operations 589 935 600 094
Net interest paid (157 009) (90 596)
Net dividend paid (103 205) (85 679)Taxation paid (67 282) (83 381)
Net cash inflow from operating
activities 262 439 340 438
Cash flows from investing activitiesNet cost on (acquisition)/disposal
of subsidiaries
and operations (460 612) (247 928)
Additions to operating fixed assets -net of disposals (278 928) (57 622)
Additions to full maintenance lease
assets - net of disposals (249 393) (384 863)
Increase in investments and loans (25 532) (14 809)Net cash outflow from investing
activities (1 014 465) (705 222)
Cash flows from financing activities
Net proceeds/(cost) of share purchaseand share issues 274 954 (13 655)
Increase in interest-bearing debt 1 087 997 20 075
Increase in full maintenance debt 24 896 351 034
Net cash inflow from financingactivities 1 387 847 357 454
Net increase/(decrease) in cash
and cash equivalents 635 821 (7 330)
Cash and cash equivalents atbeginning of year 268 355 282 948
Movement in foreign currency
translation reserve 207 (7 263)
Cash and cash equivalents at endof year 904 383 268 355
CONSOLIDATED INCOME STATEMENTS
Reviewed Audited
Year ended Year ended 31 March 31 March
2005 2004
R`000 R`000 change
Revenue 8 386 248 7 072 796 18,6Trading income before
depreciation and
amortisation 959 865 836 811 14,7
Depreciation 227 566 222 265Trading income 732 299 614 546 19,2
Translation losses on forward
exchange contracts 7 095 20 628
Goodwill impairment/amortisation 27 404 31 639
Net loss on disposal/closure
of businesses 27 803 -
Operating income 669 997 562 279 19,2Net interest costs 145 972 102 940
Income from associates (net
of taxation) 7 500 9 667
Profit before taxation 531 525 469 006 13,3Taxation 107 201 87 274
Profit after taxation 424 324 381 732 11,2
Minority interest 28 981 31 239
Net profit for the year 395 343 350 493 12,8Number of shares in
issue (`000)
- Total effective 364 929 316 796
- Weighted 348 006 308 723- Diluted 364 278 316 319
Basic earnings per share
(cents) 113,6 113,5 0,1
Headline earnings per share(cents) 129,5 123,8 4,6
Diluted earnings per share
(cents) 108,5 110,8 (2,1)
Diluted headline earnings pershare (cents) 123,7 120,8 2,4
Dividend per ordinary share
(cents) paid during
the year as per AC107 32,0 28,0Final dividend per ordinary
share (cents) declared
subsequent to 31 March 2005 37,0 32,0
RECONCILIATION OF HEADLINE EARNINGSNet profit for the year 395 343 350 493 12,8
Adjusted for:
Net loss on disposal/closure
of businesses 27 803 -Goodwill impairment/
amortisation 27 404 31 639
Headline earnings for
the year 450 550 382 132 17,9CONSOLIDATED BALANCE SHEETS
Reviewed Audited
at at
31 March 31 March 2005 2004
R`000 R`000
ASSETS
Property, vehicles and equipment 630 109 450 315Full maintenance lease assets 1 245 162 1 111 137
Goodwill and intangibles 940 094 385 739
Investments and loans 322 594 280 340
Deferred tax assets 59 880 85 354Current assets 2 973 936 2 154 358
Inventories 762 396 683 900
Trade and other receivables 1 300 103 1 058 236
Cash and cash equivalents 911 437 412 222Total assets 6 171 775 4 467 243
EQUITY AND LIABILITIES
Capital and reserves
Share capital and reserves 1 859 769 1 239 054Compulsorily convertible
debentures - 42 151
Shareholders` interest 1 859 769 1 281 205
Minority interest 111 915 76 932Liabilities
Fund reserves 99 308 111 485
Deferred tax liabilities 149 197 140 522
Interest-bearing debt 2 364 798 1 381 374- Long term
Full maintenance lease
liabilities 369 983 797 066
Australian liabilities 130 600 - Corporate bond and other 1 177 441 185 060
- Short term
Full maintenance lease
liabilities 627 666 175 687 Other 52 054 79 694
- Bank overdraft 7 054 143 867
Current liabilities 1 586 788 1 475 725
Total equity and liabilities 6 171 775 4 467 243Net asset value per share cents 509,6 391,1
Net tangible asset value per share
cents 252,0 269,4
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS` EQUITY Reviewed Audited
Year ended Year ended
31 March 31 March
2005 2004 R`000 R`000
Balance at beginning of year 1 281 205 1 200 005
AC133 adjustment - (37 400)
Share issues 413 151 -Share repurchases (70 979) (53 123)
Share issue expenses written off (11 191) (1 293)
Foreign currency translation (33 103) (91 448)
Net profit for the year 395 343 350 493Ordinary dividends (114 657) (86 029)
Balance at end of year 1 859 769 1 281 205
SEGMENTAL ANALYSIS
Revenue Trading income* 2005 2004 % 2005 2004 %
R`000 R`000 change R`000 R`000 change
Supply Chain
Management 1755430 1350948 29,9 287424 270784 6,1Cross-border
Transport 420 972 493 391 (14,7) 794 53 828 (98,5)
Fleet
Solutions 747 862 548 164 36,4 186 013 102 020 82,3Retail Supply
Chain 1 876 453 1 418 261 32,3 97 916 73 456 33,3
Automotive 3 439 053 3 146 716 9,3 120 508 87 425 37,8
Services 146 478 115 316 27,0 39 644 27 033 46,7 8 386 248 7 072 796 18,6 732 299 614 546 19,2
* Trading income before translation losses on forward exchange contracts,
goodwill impairment and amortisation and net loss on disposal/closure of
businessesTRADING INCOME* BY CURRENCY
2005 2004
% %
Rand 84 87Australian dollar 6 -
US dollar and other 10 13
Share repurchases 100 100
On behalf of the boardLarry Lipschitz Dheven Dharmalingam
Chief Executive Officer Group Financial Director
30 May 2005
Registered office 27 Impala Road, Chislehurston, Sandton, 2196 Private BagX9973, Sandton, 2146
Transfer secretaries Computershare Investor Services 2004 (Pty) Limited,
Ground Floor, 70 Marshall Street, Johannesburg, 2001 PO Box 61051,
Marshalltown, 2107Directors P. Malungani* (Chairman), P. Vallet* (Deputy Chairman), L. Lipschitz
(Chief Executive Officer), S. Abrahams*, L. Bergman*, G. Cohen*, D.
Dharmalingam, P. Granat, B. Greenstone*, K. Grunow, L. Johnston, B. Shongwe*, P.
Smith, B. Tshili*, M. Vico*, * Non-executive Zimbabwean AustrianGroup Company Secretary J. van Es
Website: www.supergrp.com
Issued by Sponsor:
Deutsche Securities (SA) (Proprietary) LimitedDate: 30/05/2005 08:00:44 AM Produced by the JSE SENS Department
