| Mon 12 Sep 2005, 15:54 | | Results For The Year Ended 30 June 2005 |
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Steinhoff / Steinhoff Investments - Audited Results For The Year Ended 30 June
2005
STEINHOFF INTERNATIONAL HOLDINGS LTD
Registration number: 1998/003951/06
(Incorporated in the Republic of South Africa)
JSE share code: SHF
ISIN code: ZAE000016176
(`Steinhoff` or `the company` or `the Group`)
STEINHOFF INVESTMENT HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1954/001893/06)
(JSE Code: `SHFF` ISIN: ZAE000068367)
(`Steinhoff Investments`)
RAW MATERIALS MANUFACTURING WAREHOUSING DISTRIBUTION AND RETAIL
Audited results for the year ended 30 June 2005
Headlines
- Group Revenues increase by 88% in Euros and 81% in Rand
- 40% growth in headline earnings in Euros and 35% in Rand
- Headline earnings per share increase by 33% in Euros and 28% in Rand
- Strong regional independent balance sheets support future growth
- R1,4 billion cash generated by operations
- Distribution to shareholders increase by 36% to 30 cents per share
Geographically expanded operations and regionally focused business model
continue to deliver sustainable growth
Abridged consolidated income statement for the year ended 30 June 2005
Audited *Audited
(restated)
year year
ended ended
30/06/05 30/06/04 %
Notes R`000 R`000 increase
Revenue 19 114 369 10 572 130 81
Operating income 2 452 885 1 515 590 62
before depreciation
and exceptional
items
Depreciation (435 567) (214 302)
Operating income 2 017 318 1 301 288 55
after depreciation
Exceptional items 1 (24 068) (128 922)
Earnings before 1 993 250 1 172 366 70
goodwill
amortisation,
interest and
taxation
Goodwill amortised - (38 592)
Earnings before 1 993 250 1 133 774 76
interest and
taxation
Net finance charges (165 728) (76 838)
Earnings before 1 827 522 1 056 936 73
taxation
Taxation (222 120) (145 444)
Earnings after 1 605 402 911 492 76
taxation
Share of associate 50 265 115 474
companies` income
Attributable to (64 112) (4 012)
minorities
Income attributable 1 591 555 1 022 954 56
to shareholders
Number of shares in 1 130 584 1 122 966 1
issue (`000)
Weighted average 1 128 054 1 067 461 6
number of shares in
issue (`000)
Attributable income 1 591 555 1 022 954 56
(R`000)
Headline earnings 2 1 589 840 1 177 840 35
(R`000)
Basic earnings per 141 96 47
share (cents)
Headline earnings 141 110 28
per share (cents)
Diluted basic 138 94 47
earnings per share
(cents)
Diluted headline 138 108 28
earnings per share
(cents)
Distribution per 30 22
share (cents)
Note 1: Exceptional
items (R`000)
- Profit on disposal - 234
of business
- Loss on disposal (1 434) -
of business
- Discontinued (7 400) (69 652)
operations and
closure cost
- Impairment of (15 234) (59 504)
property, plant and
equipment
(24 068) (128 922)
Note 2: Headline
earnings calculation
Income attributable 1 591 555 1 022 954
to shareholders
Adjustment for:
- Exceptional items 24 068 128 922
- Goodwill - 38 592
amortisation
- Profit on disposal (27 077) (6 514)
of property, plant
and equipment
- Loss/(profit) on 1 294 (707)
disposal of
property, plant and
equipment included
in share of
associate income
- Goodwill - 3 493
amortisation
included in share of
associate income
- Negative goodwill - (8 900)
included in share of
associate income
Headline earnings 1 589 840 1 177 840
for the year
* Prior year figures have been restated to reflect the effect of the changes in
the methods of recognising operating lease costs, the restatement of associated
companies` figures to reflect the restatement of foreign operations into their
functional currency, the proportionate consolidation of joint ventures and the
change in the method of accounting for operating lease costs. These adjustments
had the effect of reducing basic earnings per share from 97c to 96c and headline
earnings per share from 112c to 110c.
Abridged consolidated cash flow statement for the year ended 30 June 2005
Audited *Audited
year ended year ended
30/06/05 30/06/04
R`000 R`000
Operating profit before working 2 414 635 1 441 942
capital changes
Net changes in working capital (990 526) 97 420
Cash generated from operations 1 424 109 1 539 362
Net finance costs (165 728) (76 838)
Dividends paid (333 076) (34 333)
Dividends received 19 957 18 560
Taxation (201 083) (117 480)
Net cash inflow from operating 744 179 1 329 271
activities
Net cash outflow from investing (2 479 035) (1 363 982)
activities
Net cash inflow from financing 2 996 213 1 688 230
activities
Net increase in cash and cash 1 261 357 1 653 519
equivalents
Effects of exchange rate changes (502) 2 392
on cash and cash equivalents
Cash and cash equivalents at 3 656 442 2 000 531
beginning of period
Cash and cash equivalents at end 4 917 297 3 656 442
of period
Cash and cash equivalents can be
reconciled to the balance sheet
as follows:
- Cash and cash equivalents above 4 917 297 3 656 442
- Overdrafts included in (731 948) (10 677)
financing activities
Cash and cash equivalents per 4 185 349 3 645 765
balance sheet
* The changes in accounting policies had no cash flow effect.
Abridged consolidated balance sheet at 30 June 2005
Audited *Audited
(restated)
year ended year ended
30/06/05 30/06/04
R`000 R`000
Assets
Non-current assets
Property, plant and equipment, 8 876 959 3 291 882
plantations and intangible assets
Investments and loans 1 453 101 1 360 458
Deferred tax assets 375 205 129 675
10 705 265 4 782 015
Current assets
Accounts receivable and short-term 5 877 610 3 766 704
loans
Inventories 2 937 671 1 348 515
Cash and cash equivalents 4 185 349 3 645 765
13 000 630 8 760 984
Total assets 23 705 895 13 542 999
Equity and liabilities
Capital and reserves
Ordinary share capital and reserves 8 276 191 6 454 606
Preference share capital 643 879 -
8 920 070 6 454 606
Minority interest 1 273 815 35 241
Non-current liabilities
Deferred tax liabilities 898 691 118 512
Long-term liabilities 5 393 680 3 174 015
Long-term licence fee liability 143 893 180 621
Long-term provisions 235 478 24 838
6 671 742 3 497 986
Current liabilities
Net interest bearing 763 444 523 269
Accounts payable and provisions 6 076 824 3 031 897
6 840 268 3 555 166
Total equity and liabilities 23 705 895 13 542 999
Net asset value per ordinary share 732 575
(cents)
Gearing ratio (net) 22% 0%
Closing exchange rate - Rand: Euro 8,0965 7,5563
* Prior year figures have been restated to reflect the effect of the changes in
the methods of recognising operating lease costs, the restatement of associated
companies` figures to reflect the restatement of foreign operations into their
functional currency, the proportionate consolidation of joint ventures and the
change in the method of accounting for operating lease costs.
Consolidated statement of changes in equity for the year ended 30 June 2005
Ordinary Preference
share share
capital and capital and
premium premium
R`000 R`000
Balance at 30 June 2003* 2 240 944 -
Earnings attributable to - -
shareholders
Dividends paid - -
Issue of shares 920 934 -
Decrease in foreign - -
currency translation
reserve
Financial instruments - -
revaluation reserve
Share of associate - -
companies` retained
earnings transferred to
non-distributable reserves
Share of associate - -
companies` retained
earnings transferred to
distributable reserves
Investment reserves - -
released to income
Increase in investment - -
reserve
Balance at 30 June 2004 3 161 878 -
Non-
distri- Distri
butable butable
reserves reserves Total
R`000 R`000 R`000
Balance at 30 June 2003* 243 609 2 387 948 4 872 501
Earnings attributable to - 1 022 953 1 022 953
shareholders
Dividends paid - (34 141) (34 141)
Issue of shares - - 920 934
Decrease in foreign (329 837) - (329 837)
currency translation
reserve
Financial instruments (14) - (14)
revaluation reserve
Share of associate 13 341 (13 341) -
companies` retained
earnings transferred to
non-distributable reserves
Share of associate (23 292) 23 292 -
companies` retained
earnings transferred to
distributable reserves
Investment reserves (1 125) - (1 125)
released to income
Increase in investment 3 335 - 3 335
reserve
Balance at 30 June 2004 (93 983) 3 386 711 6 454 606
Ordinary Preference
share share
capital and capital and
premium premium
R`000 R`000
Balance at 30 June 2004* 3 161 878 -
Earnings attributable to - -
shareholders
Dividends paid - -
Issue of shares 28 977 643 879
Negative goodwill released - -
Increase in foreign - -
currency translation
reserve
Share of associate - -
companies` retained
earnings transferred from
non-distributable reserves
Financial - -
instrumentsrevaluation
reserve
Decrease in investment - -
reserve
Balance at 30 June 2005 3 190 855 643 879
Non-
distri- Distri
butable butable
reserves reserves Total
R`000 R`000 R`000
Balance at 30 June 2004* (93 983) 3 386 711 6 454 606
Earnings attributable to - 1 591 555 1 591 555
shareholders
Dividends paid - (248 970) (248 970)
Issue of shares - - 672 856
Negative goodwill released - 110 957 110 957
Increase in foreign 342 222 - 342 222
currency translation
reserve
Share of associate (126 893) 126 893 -
companies` retained
earnings transferred from
non-distributable reserves
Financial 482 - 482
instrumentsrevaluation
reserve
Decrease in investment (3 638) - (3 638)
reserve
Balance at 30 June 2005 118 190 4 967 146 8 920 070
* Prior year figures have been restated to reflect the effect of the changes in
the methods of recognising operating lease costs, the restatement of associated
companies` figures to reflect the restatement of foreign operations into their
functional currency, the proportionate consolidation of joint ventures and the
change in the method of accounting for operating lease costs.
Notes
1. Basis of preparation
The accounting policies used in the preparation of the twelve months results
announcement are, unless otherwise indicated herein, consistent with those
applied in the previous period. These results are compiled in accordance with
the South African Statement of Generally Accepted Accounting Practice AC127
applicable to financial reporting, the Listings Requirements of the JSE Limited
and Schedule 4 of the Companies Act of South Africa.
Basic earnings per share is calculated by dividing attributable income by the
weighted average number of ordinary shares in issue during the 2005 year.
Headline earnings per share is calculated by dividing headline earnings by the
weighted average number of ordinary shares in issue during the year. Fully
diluted earnings and headline earnings per share take into account the dilutive
effect of share options held by employees, and the potential ordinary shares
issuable as settlement for the vendors liability as a result of the PG Bison
acquisition.
2. Changes in accounting policies
AC501 accounting for secondary tax on companies (`STC`) is effective for years
commencing on or after 1 January 2004. This statement was effectively adopted
for the first time by the Group in the previous financial year when a deferred
tax asset was raised on the STC credits. The amount carried as an asset at 30
June 2005 amounted to R0,16 million (2004: R1,5 million).
Circular 7/2005: Operating leases which was issued by the South African
Institute of Chartered Accountants on 2 August 2005, and refers to the
requirements of AC105: Leases, in terms of which operating leases with fixed
rental increases must be accounted for on the straight-line basis. In South
Africa, the previous accounting treatment of such operating leases was generally
not consistent with the requirements of AC105. The impact of accounting for
operating lease costs on the straight-line basis rather than the cash flow basis
had the effect that opening retained earnings have been adjusted by
approximately R69 million and the operating lease charges for the current and
prior years have increased by R10 million and R16 million respectively. These
amounts are gross and the deferred tax effect has been accounted for
accordingly.
AC140 (IFRS 3) Business combinations was adopted for the first time by the Group
for the year ended 30 June 2005. The first time adoption of AC140 has the effect
that goodwill is no longer amortised but rather tested for impairment annually
and previously recognised negative goodwill is released to distributable
reserves. The adoption of this statement had a material impact in the current
year as the Group successfully concluded a number of significant strategic
investment deals on a global basis. These include the acquisition of a further
significant portion in Unitrans Limited (`Unitrans`) in terms of the Group`s pre
emptive right against the Murray & Roberts Limited`s shareholding in Unitrans.
This has resulted in Unitrans becoming a subsidiary, effective January 2005. In
Germany, the Group acquired certain assets of the Hukla Group of companies and
in the United Kingdom, the Group acquired a controlling share in the Homestyle
Group Plc. In terms of AC140, the Group also adopted AC129 (Revised) in
connection with intangible assets.
3. Audit opinion
The consolidated annual financial statements for the year ended 30 June 2005 has
been audited by Deloitte & Touche and their accompanying unqualified audit
report as well as their unqualified audit report on this set of summarised
financial information are available for inspection at the company`s registered
office. These summarised financial statements have been derived from the Group
financial statements and are consistent in all material respects, with the Group
financial statements.
4.Corporate governance
The Group subscribes to and complies with the Code on Corporate Governance
Practices as contained in the second King Report on Corporate Governance.
5. Social responsibility
Steinhoff continues to be recognised for its corporate social investment
activities. Management remains committed to the related initiatives. A number of
social responsibility projects are currently underway. A sound working
relationship is maintained with the relevant Unions. Ongoing skills and equity
activities continue to ensure compliance with current legislation.
6. Related party transactions
The company entered into various related party transactions. These transactions
are no less favourable than those arranged with third parties.
7. Subsequent events
No significant events, except for the AMAP transaction referred to under
`Corporate Activity`, have occurred in the period between the year-end and the
date of this report.
Commentary
REVIEW OF RESULTS
PRELIMINARY
The average exchange rate used for converting Euro income and expenditure to
Rand was R7,9091: Euro 1 compared to R8,2145: Euro 1 in respect of the year
ended 30 June 2004, representing a further strengthening in the Rand conversion
rate of 4%.
The Group`s business model of an expanded geographical base, combining and
growing the mix between third party sourcing vis-a-vis own manufacturing, and
diversification and integration strategies which differ from region to region,
remain effective. The results were delivered in a period where the market
conditions in Continental Europe and the United Kingdom continued to be
depressed, whereas the Pacific Rim remains competitive. South Africa continued
to experience strong consumer demand as a result of consumer confidence and
sound economic fundamentals. The competitive situation in the United Kingdom led
to the acquisition, with effect from 30 June 2005, of a 60,8% interest in the
retailer, Homestyle Group Plc.
PERFORMANCE
The Group`s revenues increased by 81% from R10 572 million to R19 114 million. A
portion of this increase was attributable to the consolidation, for the first
time, of the results of Unitrans (6 months) and PG Bison Holdings (Pty) Limited
(`PG Bison`) (12 months), both of which were previously associates and are now
subsidiaries of the Group.
The Group generated 52% (2004: 83%) of its revenues in currencies other than
South African Rand, principally Euro, Pound Sterling (`GBP`), US Dollar (`US$`)
and Australian Dollar (`AUD`). The revenue achieved in Euro terms increased by
88% from Euro 1 287 million to Euro 2 416 million.
Headline earnings grew by 35% from R1 178 million in 2004 to R1 590 million.
Headline earnings per share increased 28% to 141 cents (2004: 110 cents) with
basic earnings per share increasing 47% to 141 cents (2004: 96 cents). The
weighted average number of shares in issue increased by 6% during the year to 1
128,1 million (2004: 1 067,5 million).
Ordinary shareholders` funds at 30 June 2005 amounted to R8 276 million (2004:
R6 455 million). Return on average ordinary shareholders` funds increased to 22%
(2004: 21 %). The net asset value per ordinary share improved further by 27%
from 575 cents to 732 cents per share, notwithstanding an increase in the number
of issued shares to 1 130,6 million at 30 June 2005 (2004: 1 123,0 million).
The Group`s cash flow from operations was R1 424 million (2004: R1 539 million).
Cash generation is calculated after a net increase in working capital of R991
million (2004: decrease of R97 million) This was attributable to an increase in
inventory and accounts receivable commensurate with the Group`s growth in
activity levels, and the continuation of the policy of accelerated payments to
suppliers to obtain preferential treatment.
The average operating margin of the Group was 10,6 % for the year. However, in
order to facilitate comparison with previous periods, if the effects of
Unitrans` lower margins are eliminated on a pro forma basis, the operating
margin of the remainder of the Group improved to 13% (2004: 12,5%). The Group
continues to benefit from enhanced efficiencies throughout the supply chain, its
critical mass and its policy to fund third party suppliers to achieve favourable
terms of supply of outsourced products.
Net finance charges for the year were R166 million (2004: R77 million). These
finance charges include the net finance charges of Unitrans for the latter six
months of the year and reflect the higher activity levels of the Group. The
impact of the increased finance charges was partially off-set by strong
operating cash generation, the lower cost of debt in South Africa as well as in
Europe, and the lower average exchange rate at which Euro finance charges were
converted to South African Rand. The funding of approximately GBP 87 million
required for the Homestyle investment (R1 050 million at the spot rate of
R12,0633: 1 GBP ruling at 30 June 2005) was met from the Group`s cash resources
in the UK.
At 30 June 2005 Steinhoff had net interest bearing debt of R1 972 million (2004:
net cash assets of R34 million) resulting in a debt: equity ratio of 22%.
The Group`s taxation charge increased to R222 million (2004: R145 million) in
line with expectations. Management remains confident that the average tax rate
of the Group will not exceed 15% of pre-tax income for the foreseeable future.
The Group`s expansion of the buying office in China and the centralisation of
all third party sourcing and distribution activities under the Pacific Rim
division are continuing to deliver positive results. The wholesale, distribution
& retail business segment, which already comprises 51% of Steinhoff`s sourcing
revenue, enhances the Group`s flexibility and product offering and continues to
contribute to market share gains in the Group`s principal markets.
SEGMENTAL ANALYSIS
The Group`s main activity as an integrated global lifestyle supplier is focused
on manufacturing and wholesale, distribution and retail.
Segmental analysis in euro `000
12 months ended 30 June 2005
Revenue Revenue %
30/06/2005 30/06/2004 change
Manufacturing 1 189 241 892 890 33
Wholesale, distribution 1 227 516 394 118 211
and retail
Total 2 416 757 1 287 008 88
Segmental analysis in euro `000
12 months ended 30 June 2005
Earnings* Earnings* %
30/06/2005 30/06/2004** change
Manufacturing 154 865 110 266 40
Wholesale, distribution 95 295 60 179 58
and retail
Total 250 160 170 445 47
Geographical analysis in euro `000
12 months ended 30 June 2005
Revenue Revenue# %
30/06/2005 30/06/2004 change
Southern Africa 1 278 831 337 487 279
European Community 836 548 746 918 12
Pacific Rim 301 378 202 603 49
Total 2 416 757 1 287 008 88
Geographical analysis in euro `000
12 months ended 30 June 2005
Earnings Earnings# %
30/06/2005 30/06/2004** change
Southern Africa 81 836 41 880 95
European Community 137 885 111 711 23
Pacific Rim 30 439 16 854 81
Total 250 160 170 445 47
Segmental analysis in rand `000
year ended 30 June 2005
Revenue % Earnings* % Net %
assets
Manufactur- 9 405 831 49 1 224 843 62 5 581 701 63
ing
Wholesale, 9 708 538 51 753 695 38 3 338 369 37
distribution
and retail
Total 19 114 369 100 1 978 538 100 8 920 070 100
Year ended 30 June 2004**
Revenue % Earnings* % Net %
assets
Manufactur- 7 334 650 69 905 781 65 4 311 835 67
ing
Wholesale, 3 237 480 31 494 341 35 2 142 771 33
distribution
and retail
Total 10 572 130 100 1 400 122 100 6 454 606 100
Geographical analysis in rand `000
Year ended 30 June 2005
Revenue % Earnings* % Net %
assets
Southern 10 114 406 53 647 255 33 2 182 154 24
Africa
European 6 616 334 35 1 090 538 55 5 970 158 67
Community
Pacific Rim 2 383 629 12 240 745 12 767 758 9
Total 19 114 369 100 1 978 538 100 8 920 070 100
Year ended 30 June 2004**
Revenue# % Earnings*# % Net %
assets
Southern 2 772 290 26 344 029 25 1 458 975 23
Africa
European 6 135 558 58 917 650 65 4 381 961 68
Community
Pacific Rim 1 664 282 16 138 443 10 613 670 9
Total 10 572 130 100 1 400 122 100 6 454 606 100
* Income before interest, taxation, discontinued operations and impairment
writes offs, including share of associate companies` income, and excluding
minority interests.
** Prior year figures have been restated to reflect the changes in accounting
policies.
# Prior year figures have been reallocated between European Community and
Pacific Rim to incorporate all trading activities conducted and the expansion in
the Pacific Rim area to correspond with the classification in the current
period.
An amount of R886 million (2004: R947 million) of southern Africa`s revenue
comprised exports to the European Community and the USA amounting to
approximately 9% (2004: 34%) of its activities. The Group`s revenue exposure to
the local South African furniture market amounted to 10% (2004: 17%)
CORPORATE ACTIVITY
The Group concluded the following corporate transactions during the year under
review:
- with effect from 1 October 2004, Steinhoff acquired, from the liquidator
concerned, the assets, including designs, brands, trademarks, drawings and
manufacturing equipment, of Hukla Mobelwerke GmbH. This acquisition is proving
to be beneficial and its incorporation as part of the Group is delivering the
desired results;
- following the exercise by Steinhoff of its pre-emptive right on the 34 216 680
shares held by Murray & Roberts Limited in Unitrans, at 2632 cps, the related
offer to Unitrans minorities attracted acceptances in respect of 1 050 Unitrans
shares, translating to an additional investment in Unitrans of R900,6 million.
As a result, Steinhoff now holds 62,8% of Unitrans` issued share capital;
- Steinhoff Europe AG (Austria) (`Steinhoff Europe`) successfully placed 7 and
10-year long-term loan notes in the United States private placement market to
raise amounts of US$ 284,5 million and Euro 23,5 million. On closing this
transaction, the amounts raised were swapped into the Euro equivalent of Euro
244 million. From the proceeds, the term loan portion of Euro 175 million of the
previous Syndicated Loan Facility (`SLF`) was redeemed and the balance is to be
used for general corporate purposes;
- Steinhoff Europe concluded a new SLF for an amount of Euro 235 million
comprising a new revolving credit facility. The new SLF replaced, and expanded,
the previous revolving credit facility of Euro 125 million, at an improved
interest margin, and has a term of 3 years from 30 June 2005, with an option to
extend for a further year. A syndicated acquisition finance facility of GBP 100
million was raised in the UK at an average margin above LIBOR of 45 bps;
- on 15 June 2005, Steinhoff Investments, a wholly-owned subsidiary of the
company, issued Perpetual Preference shares to raise an amount of R650 million
before costs in order to optimise the Group`s balance sheet structure through
the provision of appropriate permanent capital to fund its growth and
development. These preference shares are non-participating, non-redeemable and
bear a cumulative semi-annual dividend based on 75% of the prime bank overdraft
rate from time to time;
- in June 2005, Steinhoff Europe acquired 60,8% of Homestyle`s issued share
capital, pursuant to a subscription for 157,6 million shares in Homestyle at 55
pence per share and through a series of placements of shares for cash (`the
Homestyle re-financing`) underwritten by Steinhoff Europe. The Homestyle re-
financing raised an amount of GBP 105 million, before expenses, from the
proceeds of which Homestyle`s entire amount of bank borrowings were redeemed and
an outstanding Value Added Tax claim in respect of structural guarantees
settled. In addition, Steinhoff Europe agreed to make available a working
capital facility of GBP 20 million to Homestyle for the period ending on 31
October 2006. As a result of the re-financing, Homestyle is largely interest-
bearing debt free. It is now in a position to enhance its product offering
through better merchandising and increase its margins through improved
suppliers` terms. Homestyle operates through two divisions : the Bed division,
with 400 stores under the `Bensons for Beds`, `Sleepmasters` and `Bedshed` trade
names, and the Furniture division which trades through 180 stores under the
`Harveys` trade name. Homestyle last reported an annual revenue of approximately
GBP450 million (R5 428 million at R12,0633: 1 GBP as at 30 June 2005) none of
which was included in the results for the year under review. Following this
acquisition, Ian Topping, our UK Chief Executive Officer (`CEO`), was appointed
as CEO of Homestyle. Markus Jooste and Jan van der Merwe joined the Board as non
executive directors. Homestyle is listed on the London Stock Exchange.
In addition, on 1 September 2005 a book-building process managed by Nedcor
Securities (Pty) Limited, closed in respect of the sale by Salton Inc. of 111
544 628 shares in Amalgamated Appliance Holdings Limited (`AMAP`) (being 52,6%
of the issued share capital). The book-build was closed at a price of 495 cents
per AMAP share (cum the dividend of 17 cps declared on 24 August 2005) and
delivery and settlement will occur on or about 30 September 2005. Steinhoff
Africa Holdings (Pty) Limited and its nominee(s) were allocated 53 259 690 AMAP
shares (a 25,1% interest) for a total consideration of R263,6 million payable
against delivery of the relevant shares in dematerialised form.
AMAP is a well-known distributor in South Africa of consumer electronic
equipment and electrical appliances. Major brand names include: Appliance
division: Russell Hobbs, Remington, Salton, Tedelex, Pineware and Haz, and
Consumer Electronics division: Pioneer, Toshiba, Sansui, Tedelex and Tannoy.
Substantial synergies between AMAP and Steinhoff Africa exist in respect of,
particularly warehousing, logistics and distribution. AMAP, as an associated
company of Steinhoff, should also bring other benefits to bear in the form of
enhanced utilisation of sourcing, infrastructure and purchasing power.
OUTLOOK
The previously separate European sourcing activities had been combined with
those of the Australian sourcing businesses to form Steinhoff International
Sourcing division which now operates an expanded centralised buying office in
China. This venture is showing good potential and is expected to become a major
growth driver into the future.
In the German region, the Group continues to gain market share on the back of
the consolidation trend that continued during the year under review. The German
economy is showing signs of recovery and increased consumer confidence as a
result of political change and economic policy reforms that are expected. The
level of order books in respect of our main product categories augurs well for
the future. Efficiency enhancements are delivering the desired results and
strategies such as, centralised distribution and logistics, have already had a
positive effect on European margins.
The acquisition of Homestyle, coupled with the Group`s production capacity in
Eastern Europe and sourcing and logistic capabilities, point to excellent
prospects in terms of incremental business and hence, a better recovery of fixed
overheads. The recent corporate failures in the United Kingdom and fully
integrated nature of Steinhoff`s operations in that market, positions the Group
for growth in market share through the optimisation of Homestyle`s substantial
retail distribution base.
In South Africa, the buoyancy in the retail sector is expected to continue.
PG Bison forms a pivotal part of the Group`s Timber strategy and further
investments will be made to secure future sustainable sources of supply. The
expansion at PG Bison`s Piet Retief plant was completed in May 2005 and is
delivering satisfying results.
The Unitrans acquisition and the related operational synergies are expected to
contribute favourably to future earnings growth.
Management expects to achieve growth in headline earnings from the continuing
operations in the financial year ahead.
On behalf of the Board of Directors
BE Steinhoff MJ Jooste
Executive Chairman Chief Executive Officer
Steinhoff Investments is a wholly-owned subsidiary of Steinhoff International
Holdings Limited (`Steinhoff`), except for the 6 500 000 variable rate,
cumulative, non-redeemable, non-participating preference shares with a par value
of 0,1 cent each in the capital of Steinhoff Investments, issued at a premium of
R99,99 per share (`the Preference Shares)`. The Preference Shares were listed on
the JSE Limited on 15 June 2005. With effect from 1 May 2005, Steinhoff
Investments acquired the entire issued share capital held by Steinhoff in its
two main operating subsidiaries, Steinhoff Mobel Holdings Alpha GmbH and
Steinhoff Africa Holdings (Proprietary) Limited (`the acquisition`) and as such,
Steinhoff Investments became the intermediate wholly-owned holding company for
all of Steinhoff`s investments.
Had the acquisition been effective on 1 July 2004, the relevant financial
information on Steinhoff and Steinhoff Investments for the year ended 30 June
2005 would have been identical. However, no consolidated financial statements
for Steinhoff Investments have been prepared in respect of the two month period
ended 30 June 2005, but preference shareholders are referred to the above
results of Steinhoff for a full appreciation of the consolidated results and
financial position on the basis of a full twelve-month reporting period. With
the annual report of Steinhoff for the year ended 30 June 2005 full details of
the audited company financial statements of Steinhoff Investments, together with
such notes and other information as will be required to arrive at an informed
view of Steinhoff Investments` results and financial position in relation to
Steinhoff as a whole, will be provided to preference shareholders.
The first dividend to be declared in respect of the Preference Shares will be
for the period from their issue date up to and including 31 December 2005. This
dividend will be considered and declared in accordance with the terms of issue
of the Preference Shares, during March 2006 and, after declaration, be payable
by the end of April 2006.
On behalf of the Board of Directors
D Konar JHN van der Merwe
Non Executive Chairman Executive Director
12 September 2005
DISTRIBUTION OUT OF SHARE PREMIUM: CASH DISTRIBUTION
Notice is hereby given that, in accordance with the authority granted to the
directors of the company in terms of Article 56A of the company`s Articles of
Association, a cash distribution from share premium in lieu of a dividend, of 30
cents per share (2004: dividend of 22 cps) has been declared and, subject to
shareholders` approval of the necessary ordinary resolution, will be payable to
shareholders recorded in the books of the company at the close of business on
Friday, 9 December 2005 (`the capital distribution`). The capital distribution
will be made in terms of the general authority to be approved by shareholders at
the annual general meeting of the company to be held on Friday, 25 November 2005
(`the AGM`). At the date hereof, firm indications to vote in favour of the
relevant ordinary resolution have been received from shareholders holding
equivalent to 56% of the total votes exercisable at the AGM. The salient dates
of this distribution are:
2005
AGM held Friday, 25 November
Last date to trade cum capital Friday, 02 December
distribution
Shares trade ex capital distribution Monday, 05 December
Record date Friday, 09 December
Payment date Monday, 12 December
No dematerialisation or rematerialisation of shares may take place between
Monday, 5 December 2005 and Friday, 9 December 2005, both dates inclusive.
On Monday, 12 December 2005, the capital distribution will be electronically
transferred to the bank accounts of certificated shareholders who utilise this
facility. In all other instances of certificated holders, cheques dated 12
December 2005 will be posted on or about that date. Shareholders who have
dematerialised their shares will have their accounts credited on 12 December
2005.
In terms of the Companies Act, the directors confirm that after the payment of
the capital distribution, the company will be able to pay its debts as they come
due in the ordinary course of business and its consolidated assets, fairly
valued, will exceed its consolidated liabilities.
ANNUAL REPORT
The Annual Report will be mailed to shareholders in due course. The annual
general meeting is scheduled to take place at 08:00 on Friday, 25 November 2005,
at the registered office of the Company.
By order of the board
SJ Grobler
Company Secretary
12 September 2005
Administration
Registration number: 1998/003951/06
(Incorporated in the Republic of South Africa)
JSE share code: SHF
ISIN code: ZAE000016176
(`Steinhoff` or `the company` or `the Group`)
Registered office
28 Sixth Street, Wynberg, Sandton, 2090,
Republic of South Africa
Tel +27 (11) 445 3000
Fax +27 (11) 445 3099
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg, 2001
Company secretary: SJ Grobler
Auditors: Deloitte & Touche
Sponsor: PSG Capital Limited
Directors: BE Steinhoff* (chairman), MJ Jooste (chief executive officer), DE
Ackerman#*, CE Daun#*,
JNS du Plessis, KJ Grove, D Konar#, JF Mouton#, FJ Nel, FA Sonn#, NW
Steinhoff#*, DM van der Merwe, JHN van der Merwe, RH Walker# #Australian
*German #*Non-executive
www.steinhoffinternational.com
Date: 12/09/2005 03:50:58 PM
Produced by the JSE SENS Department
