| Thu 8 Sep 2005, 16:51 | | African & Overseas - Reviewed results for the year |
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African & Overseas - Reviewed results for the year ended 30 June 2005
African & Overseas Enterprises Limited
(Registration number 1947/027461/06)
(Incorporated in the Republic of South Africa)
Share codes: AOO - AON - AOVP
ISIN: ZAE000000485 - ZAE000009718 - ZAE000000493
REVIEWED RESULTS FOR THE YEAR ENDED 30 JUNE 2005
INCOME STATEMENT
Consolidated (R`000)
2005 2004
(Reviewed) (Audited)
Continuing operations
Turnover 312 549 309 745
Net operating income 23 509 15 546
Net interest received 4 703 2 956
Net income 28 212 18 502
(Loss)/income from associated company (101) 551
Income before taxation 28 111 19 053
Taxation 10 138 6 870
Income after taxation 17 973 12 183
Attributable to outside
shareholders in subsidiaries 8 123 5 464
Attributable profit for the year from
continuing operations 9 850 6 719
Discontinued operation
Loss for the year from discontinued
operation (note 4) (8 502) (39 880)
Attributable to outside shareholders in
subsidiaries 17 575 3 747
Attributable loss for the year from
discontinued operation (22 305) (4 755)
(Loss)/profit for the year (12 455) 1 964
Preference dividends 168 168
Net (loss)/income attributable to ordinary
and `N` ordinary shareholders (12 623) 1 796
Reconciliation of headline earnings
Attributable (loss)/earnings (12 623) 1 796
Loss arising from discontinuance 19 037 -
Headline earnings 6 414 1 796
Headline earnings per share (cents) 56.3 15.8
(Loss)/earnings per share (cents) (110.9) 15.8
Proposed dividend per share (cents) 32.0 32.0
Dividend cover
- based on headline earnings 1.8 0.5
Weighted average number of equity
shares on which earnings per share
is based (000) 11 387 11 387
Number of equity shares in issue (000) 11 387 11 387
BALANCE SHEET
Assets
Non-current assets 48 114 42 376
Property, plant and equipment 35 887 36 512
Investments (unlisted) 2 446 2 182
Deferred taxation 9 781 3 682
Current assets 127 195 166 645
Inventory 40 273 73 626
Debtors 26 958 28 317
Cash 59 964 64 702
Total assets 175 309 209 021
Equity and liabilities
Capital and reserves 77 653 93 716
Share capital 1 200 1 200
Share premium 6 616 6 616
Non-distributable reserves 2 523 2 319
Distributable reserves 67 314 83 581
Minority interest 62 192 73 256
Non-current liability
Post-retirement liability (note 3.2) 6 393 6 748
Current liabilities 28 716 35 656
Accounts payable 28 716 34 232
Taxation - 1 424
Total equity and liabilities 175 309 209 021
ABRIDGED CASH FLOW STATEMENT
Cash (utilised)/generated by operations (8 681) 13 417
Working capital changes 30 473 50 458
Interest received (net) 4 703 2 956
Taxation (8 356) (5 116)
Dividends paid (5 585) (5 585)
Net cash inflows from operations 12 554 56 130
Net cash outflows from investing activities
including additions to property, plant and
equipment (17 292) (15 630)
Net (decrease)/increase in cash (4 738) 40 500
Cash at the beginning of the year 64 702 24 202
Cash at the end of the year 59 964 64 702
OTHER INFORMATION
Capital expenditure 17 929 17 067
Capital commitments
Contracted for 5 881 1 065
Authorised - not contracted for 1 878 8 476
Current ratio 4.4 4.7
SEGMENTAL REPORTING
Turnover
Manufacturing 215 689 244 613
Less: intersegment sales (139 051) (153 140)
External sales 76 638 91 473
Retail 286 777 282 139
Total 363 415 373 612
Net operating (loss)/income
Manufacturing (50 965) (10 238)
Retail 22 222 13 635
Consolidation adjustment 2 148 1 277
Total (26 595) 4 674
Depreciation included in net operating
(loss)/income
Manufacturing 3 253 3 829
Retail 8 867 6 474
Total 12 120 10 303
Total segment assets (excluding cash)
Manufacturing 51 070 106 783
Retail 62 929 65 623
Consolidation adjustment (12 118) (33 930)
Total 101 881 138 476
Total segment liabilities
Manufacturing (24 052) (24 444)
Retail (18 351) (32 705)
Consolidation adjustment 6 939 26 231
Total (35 464) (30 918)
Capital expenditure
Manufacturing 1 057 3 536
Retail 16 872 13 531
Total 17 929 17 067
STATEMENT OF CHANGES IN EQUITY
Consolidated (R`000)
2005 2004
(Reviewed) (Audited)
Share capital 1 200 1 200
Share premium 6 616 6 616
Non-distributable reserves
Opening balance 2 319 2 475
Foreign exchange rate changes 204 (156)
2 523 2 319
Distributable reserves
Opening balance 83 581 89 975
Prior year adjustments - (4 546)
83 581 85 429
(Loss)/profit after taxation (12 455) 1 964
Dividends (3 812) (3 812)
67 314 83 581
Total capital and reserves 77 653 93 716
Notes
1. Basis of preparation
This report complies with the South African Statements of Generally Accepted
Accounting Practice.
2. Accounting policies
This report has been prepared on the historical cost basis and in accordance
with the accounting policies which were applied in the preparation of the
group`s annual financial statements in the prior year, except as follows:
3. Prior year adjustments
3.1 Operating lease payments
The change in the manner of recognising lease payments arises as a result of a
change in interpretation of IAS 17 (AC105) by South African entities in order
to align the South African practice with that applied internationally. The
effect of the revised interpretation is that operating lease payments will be
recognised on a straight-line basis over the lease term, and not as cash is
paid. The required adjustment has been made as required by IAS (AC103) with the
necessary restatement of comparative figures. This change, when applied
consistently in the 2005 and 2004 financial years, had the following impact:
2005 2004
Effect on opening distributable reserves (R`000) - (927)
Effect on (loss)/profit for the year (R`000) (246) (371)
Effect on earnings and headline earnings
per share (cents per share) (2.2) (3.3)
The effects disclosed are net of deferred tax at the rates prevailing during
the relevant year.
3.2 Post-retirement benefits
The prior year retained income brought forward on 1 July 2003 has been reduced
by R3.6 million to correct a fundamental error arising from the non-accrual of
post-retirement benefits. This error did not have a significant impact on the
2004 comparative income statement.
4.Discontinued operation
An agreement has been concluded in terms of which Rex Trueform has closed its
Salt River factory and retrenched 984 employees. A lease agreement has been
entered into for the lease of the property and plant of the Salt River
factory.
2005 2004
Turnover 50 866 63 867
Loss of discontinued operation 8 230 12 146
Loss arising from discontinuance 41 873 -
Retrenchment 29 422 -
Impairment 5 916 -
Stock 5 252 -
Other 1 283 -
Loss before taxation 50 103 12 146
Taxation 10 223 3 644
Loss for the year from discontinued operation 39 880 8 502
COMMENT
The principal operating subsidiary Rex Trueform Clothing Company Limited
reports as follows:
Continuing operations
These comprise Queenspark and the associated Atlantis factory. Substantially
improved margins were achieved in Queenspark on a modest increase in sales.
Operating costs have been well contained and stock levels have shown a
pleasing reduction. New stores have been opened at La Lucia Mall and Musgrave
in Durban and Clearwater in Johannesburg. Queenspark`s `flagship` store in
Sandton has been increased in size to cope with the growing demand. Plans for
the current year include the opening of new stores at George and Paarl in the
Western Cape and in the Eastgate Shopping Centre in Johannesburg. All of these
projects can be financed without recourse to borrowings.
Discontinued operation
In agreement with the trade union concerned and the management of Brimstone
Clothing Corporation (Pty) Limited, which owns House of Monatic, the company
has retrenched 984 workers at its Salt River factory. Associated with this,
and subject to approval by the Competition Board, the manufacturing facilities
will be leased to Brimstone on very favourable terms thus enabling it to re-
employ a number of the workforce, all of whom have been paid full retrenchment
benefits at rates well in excess of the statutory rates. The company will
finally cease manufacturing at Salt River by the end of 2005.
Prospects
Plans are in motion to capitalise on further opportunities presented by the
strong consumer market, which shows signs of sustainability.
Prospects for the restructured group have improved substantially following the
closure of the loss-making Salt River manufacturing operations, further
enhanced by the expansion of the retail capacity referred to above. After the
payment of retrenchment costs, almost R58,6 million in cash remains in the
company to support further growth initiatives.
Dividend
The board has recommended that the dividend be maintained. Accordingly the
board has recommended that a dividend of 32.0 cents per share be declared on
the ordinary and `N` ordinary shares. Shareholders will be asked to consider,
and if deemed fit, approve this recommendation of the directors at the annual
general meeting of the company to be held on 14 November 2005.
In terms of the articles of association, the 6% cumulative participating
preference shares carry the right to receive an additional 0.5% dividend for
every completed 1.25% dividend in excess of 2.5% declared on the ordinary
shares in any one financial year. Preference shareholders will therefore be
entitled to an extra dividend of 24.5% (49.0 cents per share) which will be
included in the half-yearly payment in December 2005. An announcement
detailing the terms of the dividend declaration will be made on 14 November
2005, following the annual general meeting.
Review by independent auditors
The financial information has been reviewed by KPMG Inc. whose unqualified
review opinion is available for inspection at the company`s registered office.
It is anticipated that the unqualified audit opinion will be issued once the
detailed financial statements have been finalised.
The annual report containing a detailed review of the operations of the
company together with the audited financial statements will be posted to
shareholders by mid-October 2005.
Signed on behalf of the board:
G M Thomas (Chairman) P E Shub (Chief Executive Officer)
Cape Town
8 September 2005
Transfer Secretaries Registered Office
Computershare Investor Rex Buildings
Services 2004 (Pty) Ltd 263 Victoria Road
70 Marshall Street Salt River
Johannesburg, 2001 Cape Town, 7925
Directors: G M Thomas (Chairman), P E Shub (Chief Executive Officer),
M L Krawitz, C E A Radowsky
Secretary: A A Hodgkinson
Date: 08/09/2005 04:12:10 PM
Produced by the JSE SENS Department
