| Wed 22 Feb 2006, 8:01 | | Shoprite Holdings - Interim results for the 26 wee |
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SHP
SHP
Shoprite Holdings - Interim results for the 26 weeks ended December 2005
SHOPRITE HOLDINGS LIMITED
(Reg. No. 1936/007721/06)
(ISIN: ZAE000012084)
(JSE Share code: SHP)
(NSX Share code: SRH)
(LuSE Share code: SHOPRITE)
("the Group")
INTERIM RESULTS FOR THE 26 WEEKS ENDED DECEMBER 2005
When evaluating these results please note that this interim report covers 26
weeks compared to 27 weeks in the corresponding reporting period ended December
2004. To make comparisons meaningful, percentages provided in the section "Key
information" below are given for both a 27-week and a 26-week period ended
December 2004.
Key information
* Turnover increased 9,4%
(13,7% if compared to 26 weeks in the corresponding
period) - from R15,194 billion to R16,621 billion.
* Non-RSA operations achieved 14,0% (26 weeks: 18,3%)
sales growth in stable currency terms.
* Trading profit was up 6,9%
(26 weeks: 25,3%) to R560,9 million.
* Headline earnings per share grew to 66,6 cents,
up from 64,6 cents in the corresponding period
(26 weeks: up from 54,3 cents).
* Headline earnings per share, adjusted for exchange
differences, rose 5,1% to 72,4 cents
(26 weeks: up 23,8%).
* Net asset value per share increased 23,7%
to 485 cents.
* Dividend per share declared increased 22,7%
to 27,0 cents.
Whitey Basson, chief executive, commented:
All the divisions in the Group, the core businesses in particular, posted
excellent results for the reporting period, growing turnover by 13,7% on a
comparable 26-week basis despite food inflation averaging only 3% for the
period. This achievement also led to an increase in market share. Strong growth
in the number of customers was echoed in the findings of a recent AC Nielsen
survey in which 65% of consumers stated they shopped at Group outlets compared
to 62% previously. At the same time basket size increased, confirming the
greater liquidity in the Group"s target market. Trading profit of R560,9 million
was 25,3% higher on a 26-week comparable basis as turnover growth outstripped
cost increases and the benefits of the Group"s vastly improved operating
systems, better ranging and product availability increasingly benefited the
bottom line.
21 February 2006
Enquiries:
Shoprite Holdings Limited Tel: (021) 980 4000
Whitey Basson, chief executive
Carel Goosen, deputy managing director
De Kock Communications Tel: (021) 422 2690
Ben de Kock 076 390 7725
Operating environment
The South African retail market and the food sector in particular, remained
highly competitive through the six months to December 2005, characterised by
strong downward pressure on prices in an environment marked by continuing low
food inflation. At the same time the market saw strong growth in not only the
numbers but also the disposable income of the emerging black middle class which
now covers the spectrum from LSM 4 to 7 and is the main driver for retail growth
in South Africa. According to AMPS the black middle class grew by 30% in 2005,
adding more than 420 000 adults to this LSM group, which now forms the biggest
consumer base. With annual economic growth predicted at 5% for the next three
years, this surge should prove sustainable. Shoprite is seen as better
positioned than any other food retailer is to capitalise on this growth as it is
happening in its core target market. However, the increasingly affluent black
consumer is also important for the Checkers brand as a source of incremental
future growth.
Comments on the results
Income statement
Total revenue
Total revenue increased by 9,2% from R15,505 billion to R16,926 billion. If the
extra week in the corresponding reporting period is disregarded, the growth in
total revenue was 13,4%.
Gross profit
Gross profit was 10,6% higher at R3,201 billion. The Group managed to maintain
its low-price leadership despite aggressive competition in the market. The
strong rand continued to benefit the sale of imported higher-margin non-food
items which increased their contribution to total gross profit. The negative
effect of the strong rand on exports was reduced by the strengthening of several
key African currencies.
Trading profit
The trading margin of 3,3% was slightly softer than the 3,4% for the 27 weeks of
the corresponding reporting period. If the extra week is disregarded, the
trading margin in the comparative period was 3,0%.
Expenses
Expenses were well managed over the period, although they increased slightly
above inflation, mainly as a result of the increase in new stores opened and
refurbishments undertaken during the period.
Interest received and finance costs
Low interest rates as well as increased capital expenditure on new and
refurbished stores continue to put pressure on net interest income.
Exchange rate losses
In December 2005 the rand exchange rate against the US dollar was R6,37 compared
to R5,69 in December 2004 and R6,73 in June 2005. In accordance with
International Financial Reporting Standards (IFRS) only the exchange rate losses
on short-term loans and cash balances are reflected in the income statement,
while foreign currency translation differences and exchange rate losses on long
term loans are taken on to the balance sheet. The net result is that the Group
suffered an exchange rate loss of R28,7 million as against a loss of R14,1
million in the corresponding period.
Income of a capital nature
The income of a capital nature (previously described as exceptional items) in
the income statement in both years relates mainly to the sale of a few smaller,
non-strategic properties.
Loss from discontinued operations
The Group is at present involved in negotiations concerning the sale of its
operations in Egypt. This business is consequently treated in the accounts as a
discontinued operation.
Dividend per share declared
The increase to 27,0 cents in the dividend per share declared flows from the
Board"s previous decision to reduce dividend cover to 2 times for the full
financial year.
Balance Sheet
Intangible assets
The increase in intangible assets from R43,6 million to R172,3 million was due
mainly to the acquisition of Foodworld Stores and Computicket, transactions only
finalised towards the end of the period under review.
Inventories
The increase of 13,7% in inventory to R3,622 billion was mainly the result of
stocking up for the Back-to-School campaign in anticipation of buoyant customer
demand and the need to provision the net 62 new stores opened during the period,
44 of which are supermarkets. Stock turn was 7,8 times as against 8,0 times in
the six months to December 2004.
Operational review
The first half of the 2006 financial year has been a rewarding trading period
for the Group with all the main divisions achieving highly satisfactory results
in relation to a comparable 26-week reporting period ended December 2004. The
increase in net cash balances and trade creditors was in line with turnover for
the period and a cash flow-positive month-end closing date. The strong turnover
growth was supported by a most pleasing increase in the number of customer
transactions and the growth in basket size. The number of consumers in the lower
to lower-middle income groups - LSM 4 to 7 - constituting the Group"s main
target market, grew strongly by 5,3% in 2005. The rise in their disposable
income was due mainly to government assistance in the form of tax concessions
and social grants as well as the vast expansion planned to infrastructure in
terms of housing and the provision of essential services. This will be further
boosted by the R13,5 billion in personal tax concessions contained in the new
Budget.
Number of outlets:
JUN 2005 Open Closed DEC 2005
SUPERMARKETS 529 53 9 573
- SHOPRITE 326 29 3 352
- CHECKERS 96 10 106
- CH HYPER 23 23
- USAVE 84 14 6 92
HUNGRY LION 57 9 1 65
FURNITURE 177 10 0 187
- OK FURNITURE 154 7 161
- HOUSE & HOME 23 3 26
TOTAL OWN STORES 763 72 10 825
- OK FRANCHISE 248 22 12 258
- H/LION 3 1 2 2
FRANCHISE
TOTAL FRANCHISE 251 23 14 260
TOTAL STORES 1014 95 24 1085
COUNTRIES OUTSIDE 16 1 17
RSA
Supermarkets
The Group"s supermarket division continued its strong growth cycle of past
years, boosting the total number of customers served by 8,3% and basket size by
5,1%. The combined revenue of the three supermarket chains - Shoprite, Checkers
and Usave - increased by 9,3% (26 weeks: 13,9%) to R14,865 billion. In the light
of the Group"s growing consumer support - a recent AC Nielsen report found that
65% of all South African consumers shop at the Group"s outlets - an aggressive
new store programme is being followed. This saw 36 Shoprite and Checkers
supermarkets and 8 Usave stores being opened during the period under review.
Hypermarkets seem to have reached a plateau while there are clear indications of
a growing preference among consumers to shop at smaller format convenience
stores closer to home. This resulted in a growth in the Group"s share of the
formal food market of 0,3%.
Shoprite
Shoprite operates 352 of the Group"s 573 corporate stores and does business in
17 of the 18 countries in which the Group maintains a presence. Its turnover
growth in South Africa of 8,9% (26 weeks: 13,5%) to R7,813 billion mirrors the
continuing high consumer confidence in the brand, especially at the lower end of
the market. The chain grew the number of customers served by a high 8,9% and
basket size by 4,1%. It experienced a continuing increase in higher-margin non-
food sales, especially in smaller electrical appliances which are in great
demand amongst first-time homeowners.
Checkers
This chain reported turnover 8,3% (26 weeks: 12,8%) higher at R5,194 billion
compared with the corresponding period, while increasing profitability by 11,3%
(26 weeks: 29,7%). The number of customers served increased by 5,8% while
continued growth in basket size of 6,3% confirmed that the repositioned chain
with its new product ranges was reaching its targeted higher-income consumer.
This trend was confirmed by the latest AMPS statistics which showed a healthy
increase in the number of LSM 8 to 10 shoppers. Checkers, which now operates 129
supermarkets, focused its attention during the review period on smaller-format
convenience stores in new affluent neighbourhoods.
Usave
Strong consumer support for the Usave brand resulted in a net gain of 8 new
outlets during the period to bring the total number of stores of the Group"s
newest chain to 92. With the accent on hard groceries in its limited product
range, Usave has now developed into an established format. Sales growth of 36,3%
(26 weeks: 42,0%) continues to exceed budget. Basket size increased 5,8% despite
the chain"s all-out focus on low prices while the number of customer
transactions increased by 30,0%. All the chain"s mature branches remain highly
profitable.
Operations outside South Africa
The Group"s non-RSA operations performed satisfactorily, with turnover
increasing by 14,1% (26 weeks: 18,9%) at constant conversion rates. Due to lower
volatility in certain African currencies, this turnover increase translated into
14,0% (26 weeks: 18,9%) in rand terms. However, trading profit was under budget
due mainly to low gross margins and stock losses which have not as yet been
brought under control. Countries in which the Group is well established continue
to be the biggest profit contributors although Angola, in which the first store
was opened in August 2003, is already breaking even. Two further supermarkets
are under construction in this country and will come on stream towards the end
of the year. The Group successfully launched its first store in Nigeria in
December 2005 and remains highly positive about this country"s trading potential
in the long term.
OK Franchise
The division reported 8% turnover growth on existing business. It gained 22 new
members of which 8 do business under the OK brand while closing 12 member
accounts to end the period with 258 members. Several large members resigned just
before the end of the 2005 financial year resulting in total turnover growth of
3% for the six months under review. The tax concessions announced for small
businesses in the recent Budget should also have a beneficial effect on the
franchise sector in general.
Furniture
Lower turnover growth in the Furniture Division confirmed market speculation
that this sector is slowing down after a boom period lasting almost three years.
Excluding the extra week, the division nevertheless grew turnover by 14,0% in a
highly competitive environment. Trading profit increased by the same percentage
to R108 million. The shift to cash continued with credit sales dropping to 35,5%
from 38,7% as more and more consumers obtained credit via banks. At the end of
the review period the division was operating 174 OK Furniture and House & Home
stores as well as 13 small-format OK Power Express outlets.
Group prospects and outlook
Retail is expected to gain considerably from the R13,5 billion tax concessions
announced in the Budget and which would benefit primarily the lower and middle
income groups. This is over and above the Government"s recently announced R400
billion investment in infrastructure which again will first and foremost benefit
these sectors of the population. The Board is therefore looking with confidence
to the second half of the year expecting turnover and profit growth patterns to
at least continue at present levels.
Corporate Governance
Shoprite is committed to the principles embodied in the Code of Corporate
Practice and Conduct in the King Report 2002 ("the Code"). The Group complies
with the significant requirements incorporated in the Code and the JSE Ltd.
Accountability
These condensed consolidated interim results have been prepared in accordance
with International Financial Reporting Standards ("IFRS"), IAS 34: Interim
Reporting and Schedule 4 of the South African Companies Act (Act no 61 of 1973),
as amended. The Group has reported under IFRS for the first time and applied
IFRS 1: First-time Adoption of International Financial Reporting Standards, to
these financial statements. All relevant comparative information has been
adjusted in accordance with IFRS 1.
The accounting policies that have been adopted in order to comply with IFRS, and
their effect on the Group"s results, are listed below.
Property, plant and equipment
As per the requirements of IAS 16 Property, Plant and Equipment the Group now
reviews the estimated useful life and residual value of all property, plant and
equipment annually and accounts for any resulting changes as a change in
accounting estimate in accordance with IAS 8: Accounting Policies, Changes in
Accounting Estimates and Errors. As these estimates were not reviewed after
initial recognition in the past, the accumulated depreciation was recalculated
in line with the policy of annual review as stated above.
R"000 Dec 2004 June 2005
Depreciation 24 966 50 024
Other expenses - amortisation of - (2)
software
Trading profit 24 966 50 022
Expenditure of a capital nature (854) (1 780)
Profit before tax 24 117 48 242
Tax (including tax rate 9 729 13 121
adjustment)
Profit for the period 14 388 35 121
ATTRIBUTABLE TO:
Equity holders of the Company 14 243 34 839
Minority interest 140 282
Increase in property, plant and 278 131 302 263
equipment
Decrease in intangible assets 82 84
Decrease in deferred tax assets 77 577 80 703
Increase in deferred tax 5 676 5 942
liabilities
Translating foreign operations
As per the requirements of IAS 21: The Effects of Changes in Foreign Exchange
Rates, the Group now translates the results and financial positions of its
foreign operations with a functional currency other than rand, to rand using the
following procedures:
- Assets and liabilities are translated at closing rate
- Income and expenses are translated at transaction date
- Resulting exchange rate differences are recognised in equity.
As the functional currency of the Group"s foreign operations were considered to
be rand in the past the inventories, property, plant and equipment and the
related depreciation were accounted for at historical rates and all translation
differences were accounted for in the income statement. The translation of all
foreign operations was recalculated and the necessary adjustments were made
retrospectively.
R"000 Dec 2004 June 2005
Depreciation 13 630 27 310
Trading profit 13 630 27 310
Exchange rate gains/(losses) (7 330) (3 830)
Expenditure of a capital nature - 1 655
Profit before tax 6 300 25 135
(Decrease)/increase in foreign (28 333) 26 802
currency translation reserve
Decrease in property, plant and 168 623 123 319
equipment
Increase/(decrease) in deferred tax 58 (458)
assets
Decrease in intangible assets 305 172
(Decrease)/increase in inventories (13 684) 14 974
Intangible assets
As per the requirements of IAS 38: Intangible Assets, the Group now reviews the
estimated useful life and residual value of all intangible assets annually and
accounts for any resulting changes as a change in accounting estimate in
accordance with IAS 8: Accounting Policies, Changes in Accounting Estimates and
Errors. As these estimates were not reviewed after initial recognition in the
past the accumulated amortisation were recalculated in line with the policy of
annual review as stated above.
R"000 Dec 2004 June 2005
Other expenses - amortisation (625) (1 250)
Profit for the period (625) (1 250)
Increase in intangible assets - 625
Share-based payments
In terms of IFRS 2: Share-Based Payment, the Group shall, for all future share-
based payment transactions, expense the related services received over the
vesting period with a corresponding increase in equity or creditors.
For all equity-settled share-based payment transactions granted after 7 November
2002 that have not yet vested by 1 January 2005, as per the transitional
requirements of IFRS 2, and all cash-settled share-based payment transactions
the relevant comparative information has been restated. The effect of the
restatement is reflected below and in the statement of changes in equity.
R"000 Dec 2004 June 2005
Employee benefits (2 631) 6 590
Profit before tax (2 631) 6 590
Tax - (3 556)
Profit for the period (2 631) 3 034
Increase/(decrease) in deferred tax 1 724 (1 832)
assets
Increase/(decrease) in cash settled 5 747 (6 108)
share-based payment accrual
Share-based payment reserve 16 220 13 589
Reclassification of income statement and balance sheet classifications
Various classifications of income statement and balance sheet items were changed
to ensure a more relevant presentation of financial results as per the
requirements of IFRS. The main items adjusted are listed below:
1. Investment income and commissions received are now disclosed as revenue.
2. All outstanding deposits and outstanding cheques are now disclosed as part of
cash and cash equivalents.
3. All expense items of a capital nature, as used in the calculation of headline
earnings per share, are grouped together.
4. Unearned insurance premiums are reclassified from trade and other payables as
instalment sales under trade and other receivables, and warranties from
provisions to unearned premiums.
5. Accretion of discount on provisions is reclassified from other expenses to
finance costs.
6. Claims incurred but not reported are reclassified from trade and other
payables to provisions.
As reported in the Group"s results for the year ended 30 June 2005, the
accounting for leases was adjusted. All payments in respect of operating leases
with a fixed escalation clause are now recognised as an expense or income on a
straight-line basis over the lease term. The results for the six months ended
December 2004 are restated in accordance with this accounting policy. The effect
of the restatement is reflected below and in the statement of changes in equity.
R"000 Dec 2004
Trading profit 4 032
Profit before tax 4 032
Tax 1 278
Profit for the period 2 754
Increase in non-current assets 161 580
Increase in trade and other receivables 3 080
Increase in non-current liabilities 528 654
Increase in trade and other payables 8 832
Dividend
Dividend no 114
The board has declared an interim dividend of 27,0 cents (2005: 22,0 cents) per
ordinary share, payable to shareholders on Monday 20 March 2006. The last day to
trade cum dividend will be Friday 10 March 2006. As from Monday 13 March 2006
all trading of Shoprite Holdings Ltd shares will take place ex dividend. The
record date is Friday 17 March 2006.
Share certificates may not be dematerialised or re-materialised between Monday,
13 March 2006, and Friday, 17 March 2006, both days inclusive.
CONDENSED GROUP INCOME STATEMENT
R"000 Unaudited % Unaudited Unaudited
26 weeks change 27 weeks 53 weeks
ended ended ended
Dec 05 Dec 04 Jun 05
Revenue 16 925 863 9,2 15 504 30 299 898
578
Sale of merchandise 16 620 683 9,4 15 194 29 704 233
297
Finance income earned 78 666 (3,7) 81 701 164 791
Investment income 4 283 (21,7) 5 470 13 056
Franchise fees received 10 258 1,3 10 131 18 760
Operating lease income 77 396 (19,1) 95 626 184 874
Commissions received 54 317 71,5 31 672 67 032
Net premiums earned 80 260 (6,3) 85 681 147 152
Gross profit 3 200 914 10,6 2 895 077 5 980 233
Other operating income 347 850 (1,7) 353 960 688 325
Depreciation (197 521) 27,0 (155 577) (360 880)
Operating leases (368 168) 5,7 (348 324) (817 809)
Employee benefits (1 330 250) 10,3 (1 205 (2 446
483) 849)
Other expenses (1 091 942) 7,6 (1 015 (2 010
125) 404)
Trading profit 560 883 6,9 524 528 1 032 616
Exchange rate (losses)/gains (28 658) 103,3 (14 094) 1 921
Income/(expenditure) of a 8 153 (46,2) 15 145 (35 392)
capital nature
Operating profit 540 378 2,8 525 579 999 145
Interest received 37 578 70,0 22 109 56 329
Finance costs (34 460) 297,6 (8 667) (52 543)
Profit before tax 543 496 0,8 539 021 1 002 931
Tax (185 924) 4,2 (178 498) (339 949)
Profit after tax 357 572 (0,8) 360 523 662 982
Loss for the period from (7 622) (8 549) (25 978)
discontinued operation
Profit for the period 349 950 (0,6) 351 974 637 004
ATTRIBUTABLE TO:
Equity holders of the Company 344 953 0,3 344 069 629 613
Minority interest 4 997 (36,8) 7 905 7 391
349 950 351 974 637 004
Earnings per share from 69,5 0,0 69,5 129,2
continued operations (cents)
Earnings per share (cents) 68,0 0,3 67,8 124,1
Diluted earnings per share 67,1 (0,9) 67,7 125,7
from continued operations
(cents)
Diluted earnings per share 65,7 (0,6) 66,1 120,7
(cents)
Ordinary dividend per share 28,0 43,6 19,5 41,5
paid (cents)
Number of ordinary shares
("000) used for
calculation of 507 355* 507 387* 507 373*
: earnings per share
: diluted earnings 525 277* 520 914* 521 644*
per share
(* weighted average)
CONDENSED GROUP BALANCE SHEET
R"000 Unaudited Unaudited Unaudited
Dec 05 Dec 04 Jun 05
ASSETS
Non-current assets 3 189 377 2 860 348 2 872 400
Property, plant and equipment 2 686 734 2 448 906 2 490 585
Available-for-sale investments 45 679 32 675 33 100
Loans and receivables 48 319 79 445 61 530
Deferred tax assets 232 991 250 599 242 193
Intangible assets 172 337 43 618 40 779
Fixed escalation operating lease 3 317 5 105 4 213
accrual
Current assets 6 589 410 5 676 403 5 497 446
Assets classified as held for sale 257 784 - 183 025
Inventories 3 622 068 3 184 278 2 711 532
Trade and other receivables 1 732 397 1 786 408 1 522 087
Loans and receivables 18 814 11 229 3 993
Cash and cash equivalents 958 347 694 488 1 076 809
Total assets 9 778 787 8 536 751 8 369 846
EQUITY AND LIABILITIES
Total equity 2 503 833 2 038 846 2 265 877
Capital and reserves attributable to 2 458 181 1 992 298 2 224 118
equity holders
Minority interest 45 652 46 548 41 759
Non-current liabilities 754 472 752 217 739 211
Borrowings 2 450 2 450 2 450
Deferred tax liabilities 9 189 7 674 10 073
Provisions 214 062 213 439 211 859
Fixed escalation operating lease 528 771 528 654 514 829
accrual
Current liabilities 6 520 482 5 745 688 5 364 758
Liabilities classified as held for 23 160 - -
sale
Other current liabilities 5 830 383 5 115 634 4 531 418
Provisions 43 127 30 054 48 952
Bank overdraft 623 812 600 000 784 388
Total equity and liabilities 9 778 787 8 536 751 8 369 846
CONDENSED SEGMENT INFORMATION
R"000 Unaudited % Unaudited Unaudited
26 weeks change 27 weeks 53 weeks
ended ended ended
Dec 05 Dec 04 Jun 05
SEGMENT REVENUE - by business
segment
- Supermarkets 15 727 730 9,3 14 386 254 28 283 473
- Furniture 1 193 850 7,3 1 112 854 2 003 369
Total segment revenue 16 921 580 9,2 15 499 108 30 286 842
Segment revenue comprises
total revenue less investment
income.
SEGMENT RESULT - by business
segment
- Supermarkets 420 203 4,5 402 208 830 084
- Furniture 107 739 4,8 102 756 191 397
Total segment result 527 942 4,6 504 964 1 021 481
Segment result comprises trading profit plus exchange rate losses/gains less
investment income.
RECONCILIATION OF HEADLINE EARNINGS
R"000 Unaudited Unaudited Unaudited
26 weeks 27 weeks 53 weeks
ended ended ended
Dec 05 Dec 04 Jun 05
Net profit attributable to 344 953 344 069 629 613
shareholders
Loss for the period from 7 622 8 549 25 978
discontinued operation
Earnings from continued operations 352 575 352 618 655 591
(Income)/expenditure of a capital (7 225) (16 173) 32 448
nature after tax
Profit on disposal of unlisted - (17 978) (19 906)
investment
Profit on disposal of listed - (669) (660)
investment
Profit on disposal of property (9 264) - (6 644)
Loss on disposal and scrapping of 2 039 2 474 3 511
plant, equipment and software
Insurance claim for building - - (5 864)
received
Impairment of property, plant and - - 40 177
equipment
Impairment of goodwill - - 26 151
Payment made for lease - - 3 484
cancellation
Profit on lease cancellation - - (6 840)
Prescription of amounts owing - - (961)
Headline earnings from continued 345 350 336 445 688 039
operations
Exchange rate losses/(gains) 21 886 12 991 (3 305)
after tax
Adjusted headline earnings from 367 236 349 436 684 734
continued operations
Headline earnings from continued 345 350 336 445 688 039
operations
Add loss for the period from (7 622) (8 549) (25 978)
discontinued operations
(Income)/expenditure of a capital - - 9 787
nature after tax from discontinued
operations
Headline earnings 337 728 327 896 671 848
Earnings per share from continued 69,5 69,5 129,2
operations (cents)
Earnings per share (cents) 68,0 67,8 124,1
Diluted earnings per share from 67,1 67,7 125,7
continued operations (cents)
Diluted earnings per share (cents) 65,7 66,1 120,7
Headline earnings per share from 68,1 66,3 135,6
continued operations (cents)
Headline earnings per share (cents) 66,6 64,6 132,4
Diluted headline earnings per share 65,7 64,6 131,9
from continued operations (cents)
Diluted headline earnings per share 64,3 62,9 128,8
(cents)
Adjusted headline earnings per share 72,4 68,9 135,0
from continued operations (cents)
Adjusted diluted headline earnings 69,9 67,1 131,3
per share from continued operations
(cents)
Ordinary dividend per share paid 28,0 19,5 41,5
(cents)
Ordinary dividend per share declared 27,0 22,0 50,0
(cents)
CONDENSED GROUP CASH FLOW STATEMENT
R"000 Notes Unaudited Unaudited Unaudited
26 weeks 27 weeks 53 weeks
ended ended ended
Dec 05 Dec 04 Jun 05
Cash generated by continued 969 623 (160 765) 790 821
operations
Operating profit before 527 942 504 964 1 021 481
investment income and
income/expenditure of a capital
nature
Non-cash items 1 239 504 179 161 405 491
Changes in working capital 2 202 177 (844 890) (646 069)
(Income)/expenditure of a 3 - - 9 918
capital nature
Net interest received 5 862 17 670 10 162
Dividends received 1 539 1 242 6 680
Dividends paid (145 474) (97 370) (213 336)
Tax paid (150 845) (326 173) (509 097)
Cash utilised by discontinued 4 (6 065) (6 580) (12 951)
operations
Cash flows from operating 674 640 (571 976) 72 279
activities
Cash flows from investing (650 973) (347 485) (810 961)
activities
Purchase of software, property, (526 108) (387 965) (922 535)
plant and equipment
Proceeds on disposal of 49 450 - 57 451
property
Proceeds on disposal of - 50 000 71 069
investments
Acquisition of subsidiaries / (169 628) (2 329) (17 127)
operations
Acquisition of listed - - (21 069)
investment
Other investment activities (4 687) (7 191) 21 250
Net cash flow 23 667 (919 461) (738 682)
Cash flows from financing - (164) 428
activities
Acquisition of treasury shares - (164) (265)
Proceeds on issue of preference - - 693
shares to joint venture
Movement in cash and cash 23 667 (919 625) (738 254)
equivalents
Acquired through acquisition of 31 428 - -
subsidiaries/operations
Effect of exchange rate (12 981) (5 574) 10 988
movements on cash and cash
equivalents
Net movement in cash and cash 42 114 (925 199) (727 266)
equivalents
CASH FLOW INFORMATION
1. Non-cash items
Depreciation on property, plant and 207 146 167 650 385 098
equipment
Amortisation of intangible assets 6 231 6 829 14 742
Net fair value losses/(gains) on 537 (3 838) (3 629)
financial instruments
Exchange rate losses/(gains) 28 554 13 964 (1 921)
Share options granted to a director 765 2 631 5 265
Movement in provisions (3 622) (4 043) 13 275
Movement in fixed escalation (107) (4 032) (7 339)
operating lease accrual
239 504 179 161 405 491
2. Changes in working capital
Inventories (871 280) (577 483) (76 673)
Trade and other receivables (265 585) (307 149) 17 910
Trade and other payables 1 339 042 39 742 (587 306)
202 177 (844 890) (646 069)
3. Income/(expenditure) of a capital
nature
Income/(expenditure) of a capital 8 153 15 145 (35 392)
nature per income statement
Net profit on disposal and scrapping (8 153) 3 524 (2 349)
of property, plant and equipment and
software
Profit on disposal of unlisted - (18 000) (18 000)
investment
Profit on disposal of listed - (669) (669)
investment
Impairment of property, plant and - - 40 177
equipment
Impairment of goodwill - - 26 151
- - 9 918
4. Cash utilised by discontinued
operations
Loss for the period from discontinued (7 622) (8 549) (25 978)
operation per income statement
Depreciation on property, plant and 1 453 1 839 3 592
equipment
Exchange rate losses/(gains) 104 130 (352)
Impairment of property, plant and - - 9 787
equipment
(6 065) (6 580) (12 951)
SUPPLEMENTARY INFORMATION
R"000 Unaudited Unaudited Unaudited
Dec 05 Dec 04 Jun 05
1. Capital commitments 305 683 344 008 344 438
2. Contingent liabilities 97 790 47 227 53 190
3. Net asset value per share (cents) 485 392 438
4. Total number of shares in issue 507 355 507 387 507 355
(adjusted for treasury shares)
CONDENSED STATEMENT OF CHANGES IN EQUITY
R"000 Unaudited Unaudited Unaudited
26 weeks 27 weeks 53 weeks
ended ended ended
Dec 05 Dec 04 Jun 05
Balance at beginning of July
As previously stated 2 265 877 2 128 215 1 752 635
Effect of adjusted treatment of (375 580)
leases
Reclassification of minority 38 007 38 007
interest to statement of changes in
equity
Effect of IFRS: 180 413 180 413
Property, plant and equipment
Translation of foreign operations (166 454) (166 454)
Share-based payments (4 023) (4 023)
Intangible assets 1 875 1 875
As restated 2 265 877 1 802 453 1 802 453
Net movement in treasury shares - (164) (265)
Net fair value profits on available- 10 933 2 769 2 997
for-sale investments, net of tax
Net profit for the period - as 349 950 351 974 637 004
restated
As previously stated 324 028 567 855
Effect of adjusted treatment of 2 754
leases
Reclassification of minority 7 765 7 109
interest to statement of changes in
equity
Effect of IFRS: 14 383 35 121
Property, plant and equipment
Translation of foreign operations 6 300 25 135
Share-based payments (2 631) 3 034
Intangible assets (625) (1 250)
Transfer to share-based payment 765 2 631 5 265
reserve
Foreign currency translation 19 471 (21 875) 33 260
differences
Dividends distributed to shareholders (143 163) (98 942) (214 837)
Balance at end of December/June 2 503 833 2 038 846 2 265 877
Directorate and administration
Executive directors:
JW Basson (chief executive), CG Goosen (deputy managing director), B Harisunker,
AE Karp, EL Nel, AN van Zyl, BR Weyers
Non-executive directors:
CH Wiese (chairman), JJ Fouche, TRP Hlongwane, JA Louw, JF Malherbe, JG
Rademeyer
Alternate directors:
JAL Basson, M Bosman, PC Engelbrecht, JD Wiese
Company secretary:
AN van Zyl
Registered office:
Cnr William Dabs and Old Paarl Roads, Brackenfell, 7560, South Africa. PO Box
215, Brackenfell, 7561, South Africa
* Telephone: +27 (0)21 980 4000
* Facsimile: +27 (0)21 980 4050
Transfer secretaries
South Africa:
Computershare Investor Services 2004 (Pty) Ltd, PO Box 61051, Marshalltown,
2107, South Africa
* Telephone: +27 (0)11 370 5000
* Facsimile: +27 (0)11 668 5520
* Website: www.computershare.com
Namibia:
Transfer Secretaries (Pty) Ltd, PO Box 2401, Windhoek, Namibia
* Telephone: +264 (0)61 227 647
* Facsimile: +264 (061) 248 531
Zambia:
Lewis Nathan Advocates, PO Box 372668, Lusaka, Zambia
* Telephone: +260 (0)1 223 174
* Facsimile: +260 (0)1 229 868
Sponsors
South Africa:
Nedbank Capital, PO Box 1144, Johannesburg, 2000, South Africa
* Telephone: +27 (0)11 295 8603
* Facsimile: +27 (0)11 294 8602
* Website: www.nedbank.co.za
Namibia:
Old Mutual Asset Managers, PO Box 25549, Windhoek, Namibia
* Telephone: +264 (0)61 299 3527
* Facsimile: +264 (0)61 299 3528
* Zambia:
Lewis Nathan Advocates, PO Box 372668, Lusaka, Zambia
* Telephone: +260 (0)1 223 174
* Facsimile: +260 (0)1 229 868
Auditors:
PricewaterhouseCoopers Incorporated., PO Box 2799, Cape Town, 8000, South Africa
Date: 22/02/2006 08:02:03 AM Produced by the JSE SENS Department
