| Wed 31 May 2006, 15:00 | | Super Group Limited - Unaudited Interim Results fo |
|
SPG
SPG
Super Group Limited - Unaudited Interim Results for the twelve months
ended 31 March 2006
Super Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1943/016107/06)
ISIN number ZAE000011334
Share code SPG
Unaudited Interim Results for the twelve months ended 31 March 2006
- Revenue +17%
- Trading income +15%
- Net profit +15%
- Cash generated from operations +27%
CONSOLIDATED BALANCE SHEETS
31 March 2006 31 March 2005
Unaudited Unaudited
R"000 R"000*
ASSETS
Property, vehicles and equipment 1 184 664 819 450
Full maintenance lease assets 1 356 271 1 245 162
Intangible assets 1 202 798 976 756
Investments and loans 183 126 196 335
Deferred tax assets 62 736 63 671
Current assets 3 233 195 2 986 239
Inventories 1 002 384 778 725
Trade and other receivables 1 616 132 1 297 933
Cash and bank 614 679 909 581
Total assets 7 222 790 6 287 613
EQUITY AND LIABILITIES
Capital and reserves
Shareholders" equity 1 784 970 1 809 008
Minority interest 131 870 110 987
Total equity 1 916 840 1 919 995
Liabilities
Fund reserves 209 141 104 064
Deferred tax liabilities 237 196 193 079
Interest-bearing debt 2 938 208 2 425 035
- Non-current 2 623 502 1 731 024
- Current 314 706 694 011
Current liabilities 1 921 405 1 645 440
Total equity and liabilities 7 222 790 6 287 613
Net asset value per share cents 502,9 495,7
Net tangible asset value per share 164,0 228,1
cents
Included in interest-bearing debt:
Non-recourse liabilities 180 317 157 032
Full maintenance lease liabilities 1 119 962 997 649
Bond and other 1 286 847 1 165 285
Property liabilities 349 533 97 526
Bank overdraft 1 549 7 543
2 938 208 2 425 035
CONSOLIDATED INCOME STATEMENTS
Year ended Year ended
31 March 2006 31 March 2005
Unaudited Unaudited %
R"000 R"000* change
Revenue 9 888 532 8 444 942 17,1
Trading income before
depreciation and amortisation 973 293 895 106 8,7
Depreciation and amortisation 220 102 238 781
Trading income 753 191 656 325 14,8
Translation losses 29 156 19 600
Goodwill impairment 20 113 27 404
Impairment/net loss on
disposal/closure of businesses 37 079 27 803
Operating income 666 843 581 518 14,7
Net interest costs 199 824 153 328
Income from associates (net of
taxation) 4 755 6 775
Profit before taxation 471 774 434 965 8,5
Taxation 96 316 103 220
Net profit for the year 375 458 331 745 13,2
Attributable to: Minorities 28 068 28 901 (2,9)
Attributable to: Ordinary
shareholders 347 390 302 844 14,7
Number of shares in issue ("000)
- Total effective 354 951 364 929
- Weighted 357 130 348 006
- Diluted 373 603 364 278
Basic earnings per share (cents) 97,3 87,0 11,8
Diluted basic earnings per share
(cents) 93,0 83,1 11,9
Headline earnings per share
(cents) 113,3 102,9 10,1
Diluted headline earnings per
share (cents) 108,3 98,3 10,2
Dividend per ordinary share
(cents) paid
during the year as per IAS 10 37,0 32,0 15,6
RECONCILIATION OF HEADLINE EARNINGS
Net profit attributable to
ordinary shareholders 347 390 302 844 14,7
Adjusted for:
Impairment/net loss on
disposal/closure of businesses 37 079 27 803
Goodwill impairment 20 113 27 404
Headline earnings for the year 404 582 358 051 13,0
CONSOLIDATED CASH FLOW STATEMENTS
Year ended Year ended
31 March 2006 31 March 2005
Unaudited Unaudited
R"000 R"000*
Cash flows from operating activities
Operating cash flow before working
capital changes 917 837 820 733
Working capital changes (234 593) (284 675)
Increase in inventories (240 642) (45 920)
Increase in trade and other receivables (296 201) (141 972)
Increase/(decrease) in trade and other
payables 218 584 (33 444)
Increase/(decrease) in fund reserves 106 112 (16 645)
Foreign currency translation effect (22 446) (46 694)
Cash generated from operations 683 244 536 058
Net interest paid (200 190) (154 903)
Net dividend paid (132 652) (112 670)
Taxation paid (41 897) (67 282)
Net cash inflow from operating activities 308 505 201 203
Cash flows from investing activities
Net cost on acquisition of subsidiaries
and operations (177 785) (409 339)
Additions to operating property, vehicles
and equipment - net of disposals (576 424) (271 148)
Additions to full maintenance lease
assets - net of disposals (275 099) (249 393)
Increase in investments and loans (13 334) (26 106)
Net cash outflow from investing activities (1 042 642) (955 986)
Cash flows from financing activities
Net (cost)/proceeds on share purchases,
share issues and options exercised (139 422) 274 955
Increase in interest-bearing debt 456 963 1 082 660
Increase in full maintenance debt 128 450 30 233
Net cash inflow from financing activities 445 991 1 387 848
Net (decrease)/increase in cash and cash
equivalents (288 146) 633 065
Cash and cash equivalents at beginning of
year 902 038 268 322
Foreign currency translation effect (762) 651
Cash and cash equivalents at end of year 613 130 902 038
*Comparative figures have been reclassified, where necessary, in
accordance with current year classifications and accounting policies.
SEGMENTAL ANALYSIS
Revenue
Year ended Year ended
31 March 31 March
2006 2005 %
R"000 R"000* change
Supply Chain Management 2 176 910 1 755 430 24,0
African Transport 350 190 479 666 (27,0)
Fleet Solutions 984 396 747 862 31,6
Retail Supply Chain 2 225 008 1 876 453 18,6
Dealerships 3 944 963 3 439 053 14,7
Services 207 065 146 478 41,4
Group 9 888 532 8 444 942 17,1
Trading income
Year ended Year ended
31 March 31 March
2006 2005 %
R"000 R"000* change
Supply Chain Management 300 772 281 362 6,9
African Transport (6 911) (53 863) 87,2
Fleet Solutions 254 482 185 829 36,9
Retail Supply Chain 68 972 99 080 (30,4)
Dealerships 120 815 121 339 (0,4)
Services 15 061 22 578 (33,3)
Group 753 191 656 325 14,8
Operating income
Year ended Year ended
31 March 31 March
2006 2005 %
R"000 R"000* change
Supply Chain Management 280 832 280 193 0,2
African Transport (25 625) (84 913) 69,8
Fleet Solutions 246 152 185 829 32,5
Retail Supply Chain 68 227 98 908 (31,0)
Dealerships 114 982 86 018 33,7
Services (17 725) 15 483 (214,5)
Group 666 843 581 518 14,7
RECONCILIATION OF MOVEMENT IN CAPITAL AND RESERVES
Year ended Year ended
31 March 2006 31 March 2005
Unaudited Unaudited
R"000 R"000*
Opening balance as previously reported 1 859 769 1 281 205
Adoption of IFRS and change in
interpretation of accounting policies (50 761) 28 163
Property, vehicles and equipment (2 708) (3 373)
Reconsolidation - Zimbabwean
subsidiaries (9 775) 65 406
Circular 7/2005 - operating lease
straight-lining (40 598) (33 870)
Translation of goodwill at closing rate 2 320 -
Share (repurchases)/issues, and options
exercised net of expenses (140 729) 330 981
Foreign currency translation (113 152) (19 528)
Net profit attributable to: Ordinary
shareholders 347 390 302 844
Movement in other reserves 14 715 -
Ordinary dividends (132 262) (114 657)
Ordinary shareholders" equity at end of
the year 1 784 970 1 809 008
Minorities at beginning of the year 110 987 76 932
Adoption of IFRS and change in
interpretation of accounting policies - (928)
Ordinary dividends paid to minorities (3 618) (1 857)
Net profit attributable to: Minorities 28 068 28 901
Foreign currency translation (6 596) 1 423
Changes in minorities as a result of
acquisitions and disposals 3 029 6 516
Minorities at end of the year 131 870 110 987
Total equity at end of the year 1 916 840 1 919 995
Comprising:
Share capital 43 271 41 627
Share premium 270 121 364 581
Retained earnings 1 188 114 1 020 898
Minority interest 131 870 110 987
Treasury shares (238 012) (238 012)
Equity settled share-based payment
reserve 33 562 22 038
Net surplus on disposal of investments 556 036 556 036
Revaluation reserve 24 338 22 488
Translation reserve (98 996) 14 156
Contingency reserve 6 536 5 196
1 916 840 1 919 995
PROFIT BEFORE TAXATION
Year ended 31 March Year ended 31 March
2006 2005
% %
Rand 15 8
Australian dollar 15 5
US dollar and other 70 87
100 100
RECONCILIATION OF SA GAAP TO IFRS
Year ended 31 March
2005
Unaudited
R"000
Net profit as previously reported - SA GAAP 395 343
IFRS 2 - share-based payments (14 400)
Property, vehicles and equipment 1 181
Reconsolidation - Zimbabwean subsidiaries (72 552)
Restated net profit - IFRS 309 572
Circular 7/2005 - operating lease straight-lining (6 728)
Restated net profit after revised interpretation 302 844
on operating leases and IFRS
Group Profile
Super Group is an integrated supply chain management business comprising
two core operating divisions, namely Supply Chain and Automotive. Supply
Chain Division has contributed 85% of the group"s operating income.
Overview
As announced previously, Super Group has changed its financial year-end
to 30 June. As a result, the current financial year comprises 15 months.
For comparative purposes the group has published these interim results
for the 12 month period ended 31 March 2006. Detailed financial
statements will be provided for the financial year.
Super Group has delivered satisfactory growth for the period under
review. Revenue increased 17% to R9,9 billion with organic growth of 12%.
Trading income increased 15% to R753 million. Trading margins declined
slightly from 7,8% to 7,6% largely as a result of strong revenue growth
in traditionally low margin businesses. Headline earnings per share
increased 10% from 102,9 cents to 113,3 cents.
Cash generated by operations increased 27% to R683 million underpinning
the strong trading income growth and cash generating ability of the
group. Cash was invested in assets required to ensure that the business
meets the growing demand for integrated supply chain management solutions
and new fleet management contracts. The investment in working capital
funded the new imported commercial vehicle strategy and Mica"s inventory
procurement strategy. The higher inventory levels were partly funded by
an increase in trade payables. Trade receivables increased owing to
strong revenue growth, specifically within Supply Chain Management.
Effective 1 April 2005, Super Group acquired 70% of SMB Fleet Management
Pty Limited, the leading provider of private consumer leases in Australia
which complements the FleetAustralia business. Phase one of the new
warehousing facility, Super Park, and the Grand Central Mercedes
Dealership were successfully completed in the current period. External
long-term property funding was secured to finance these new facilities.
The Super Group Share Trust acquired an additional 12,5 million shares at
an average price of R10,93 to meet future obligations in respect of the
Share Option Trust.
The balance sheet of the group remains strong with cash and cash
equivalents of R613 million. Liabilities include R180 million relating to
loans raised from Australian banks and financial institutions. The loans
are secured solely by the assets of FleetAustralia and the banks have no
recourse to Super Group and the remaining subsidiaries. At 31 March 2006,
Super Group had net debt of R1 billion resulting in gearing of 64%, after
excluding full maintenance leasing and non-recourse debt.
Divisional overview
Supply Chain Division
Supply Chain Management increased revenue by 24% to R2,2 billion and
trading income increased 7% to R301 million. Trading margins declined to
13.8% as the expected strong revenue growth in the lower margin
procurement and bulk materials handling businesses materialised and
additional costs were incurred in the transition to the new state-of-the-
art warehouse facility. Super Group continues to extend the scope of
services within clients and continues to be awarded new contracts.
Fleet Solutions reported strong growth in revenue and trading income
primarily as a result of the acquisition of SMB Fleet Management and the
annualisation of the FleetAustralia acquisition. The South African
operations performed in line with expectations increasing both revenue
and trading income by 11% and 9% respectively. During the period,
FleetAfrica was awarded a five-year contract to manage the Isuzu
maintenance and service plans on behalf of General Motors South Africa
and was re-awarded the contract for the supply of the fleets and fleet-
related services on an outsourced basis for the City of Johannesburg.
Capitalising on its fleet management experience, Super Group has expanded
its offering to include equipment management. The Australian operations
performed according to expectations in a competitive market. During the
period, vehicles under management increased 17% to more than 77 500
vehicles.
African Transport performed slightly ahead of expectations on the back of
improved transport activity and cost containment. The challenging trading
conditions within the various regions continue to be actively managed.
Retail Supply Chain, comprising AutoZone and Mica, increased revenue by
19%. The reorganisation of the automotive parts business into a single
brand has negatively affected performance in the short term. Market share
has been maintained in a highly competitive environment. The home
improvement business, trading under the Mica brand, performed
satisfactorily. The operating margin was depressed by the additional
costs of integrating Mica"s business into the Retail Supply Chain
business.
Automotive Division
Dealerships benefited from the buoyant industry conditions. Divisional
performance was adversely affected by the weakness in the used vehicle
market, especially in the commercial vehicle segment resulting from
competitively priced imported new vehicles.
Services division
This division, which comprises group treasury and insurance, performed in
line with expectations. Strong revenue growth resulted from increased
insurance activities; however, as the majority of risk is re-insured, the
impact on trading income was diluted. The impairment/net loss on
disposal/closure of businesses of R37 million relates principally to the
impairment of the group"s investment in CIC Holdings Limited.
Basis of preparation and accounting policies
The group has adopted International Financial Reporting Standards (IFRS)
for the year ended 31 March 2006. The interim results have been prepared
in accordance with the group"s accounting policies which comply with
IFRS, IAS 34 - Interim financial reporting, the Listing Requirements of
the JSE and the Companies Act of South Africa. Comparative figures have
been restated where applicable as required by IFRS and are reflected as
"unaudited".
The following significant new accounting policies were applied for IFRS
reporting:
* Property, vehicle and equipment - Component approach accounting has
been applied where parts of an item of property, plant and equipment have
different useful lives. Residual values, useful lives and depreciation
methods of all assets are assessed annually.
* Foreign exchange - Foreign exchange differences arising on translation
of all foreign operations are recognised directly in a separate component
of equity (translation reserve).
* Basis of consolidation - Subsidiaries in the group that operate under
severe long-term restrictions which significantly impair their ability to
transfer funds, were not consolidated under SA GAAP. These exclusions are
no longer provided for in IAS 27 (revised) and such subsidiaries are now
consolidated. This required the re-consolidation of the Zimbabwean
operations and the adoption of the US Dollar as the functional currency
for consolidation purposes. Goodwill has been translated at the closing
exchange rate.
* Share-based payments - Shares that were granted post 7 November 2002 to
employees and which remain unvested at 1 January 2005 are measured at
fair value at grant date. The expense is recognised over the vesting
period and adjusted to reflect actual levels of vesting with a
corresponding increase in capital reserves.
The change in accounting interpretation for operating leases has resulted
in payments made under fixed escalation operating leases being recognised
in the income statement on a straight-line basis over the term of the
lease. Previously, operating lease payments were expensed on a cash-flow
basis based on an interpretation of the standard that was generally
accepted in South Africa. The required adjustment (net of the deferred
taxation effect), has been made as required by IAS 8 with the necessary
restatement of comparative figures. A reassessment of leases has resulted
in certain leases, previously treated as operating leases, being
capitalised.
Future developments under IFRS
Future amendments to the consolidated financial statements may arise due
to one or more of the following reasons:
* The accounting statements are subject to ongoing review and may change;
* The consolidated financial statements have been prepared based on the
outcome expected at this point in time, of the technical issues and
exposure drafts currently being examined by the IASB and IFRIC, which may
be applicable to the 2006 IFRS consolidated financial statements;
* Interpretations may differ as practice develops; and
* Tax legislation and tax-related interpretations might develop further.
Capital commitments, contingent liabilities and other commitments
The group has authorised, but not yet contracted for, capital commitments
of R215 million, excluding full maintenance lease assets. Contingent
liabilities and other commitments are consistent with those disclosed in
the 2005 annual financial statements.
Prospects
The three months to June 2006, being the financial year-end, is
traditionally the group"s weaker trading period. Performance is expected
to be in line with normal seasonal trends.
Appreciation
We extend our appreciation to our directors, management and staff for
their valued efforts, as well as to our advisors, financiers, customers,
suppliers and shareholders for their continuing belief in and support of
Super Group.
Dividends
In line with the company"s dividend policy, dividends will be declared
after the year-end.
On behalf of the board
Larry Lipschitz Dheven Dharmalingam
Chief Executive Officer Group Financial Director
31 May 2006
Registered office
27 Impala Road, Chislehurston, Sandton, 2196
Private Bag X9973, Sandton, 2146
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited
Ground Floor, 70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Directors
P Malungani* (Chairman), P Vallet* (Deputy Chairman), L Lipschitz
(Chief Executive Officer), S Abrahams*, L Bergman*#, D Dharmalingam,
B Greenstone*, L Johnston, P Smith, B Tshili*
*Non-executive # Austrian
Group Company Secretary
J van Es
Also available on the internet: www.supergrp.com
Sponsor:
Deutsche Securities (SA) (Proprietary) Limited
Date: 31/05/2006 03:01:02 PM Produced by the JSE SENS Department
