| Thu 21 Sep 2006, 12:02 | | African & Overseas - Reviewed results for the year |
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AON AOVP AOO
AOO
African & Overseas - Reviewed results for the year Ended 30 June 2006
African & Overseas Enterprises Limited
(Incorporated in the Republic of South Africa
- Registration number 1947/027461/06)
Share codes: AOO - AON - AOVP
ISIN: ZAE000000485 - ZAE000009718 - ZAE000000493
Reviewed results for the year ended 30 June 2006
INCOME STATEMENT
Consolidated (R"000)
2006 2005
(Reviewed) (Audited)
Continuing operations
Turnover 317 570 312 569
Net operating profit 15 502 23 412
Net interest received 3 571 4 703
Net profit 19 073 28 115
(Loss)/profit from associated company (159) (101)
Profit before taxation 18 914 28 014
Taxation 6 730 10 138
Income after taxation 12 184 17 876
Attributable to outside
shareholders in subsidiaries 5 862 8 080
Profit for the year
from continuing operations 6 322 9 796
Discontinued operation
Loss for the year from
discontinued operation (Note 2) (4 553) (39 880)
Attributable to outside
shareholders in subsidiaries 2 007 17 575
(2 546) (22 305)
Profit/(loss) for the year 3 776 (12 509)
Attributable to:
Ordinary and `N" ordinary shareholders 3 608 (12 677)
Preference shareholders 168 168
Profit/(loss) for the year 3 776 (12 509)
Reconciliation of headline earnings
Net profit/(loss) for the year 3 608 (12 677)
Loss arising from discontinuance (Note 2) 372 19 037
Headline earnings 3 980 6 360
Headline earnings per share (cents) 35.0 55.9
Earnings/(loss) per share (cents) 31.7 (111.3)
Proposed dividend per share (cents) 14.0 32.0
Dividend cover
- based on headline earnings 2.5 1.7
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
ABRIDGED CASH FLOW STATEMENT
Cash generated/(utilised) by operations 23 567 (8 681)
Working capital changes 13 478 30 473
Interest received (net) 3 571 4 703
Taxation (3 726) (8 356)
Dividends paid (5 927) (5 585)
Net cash inflows from operations 30 963 12 554
Net cash outflows from
investing activities including additions
to property, plant and equipment (16 711) (17 292)
Net increase/(decrease) in cash 14 252 (4 738)
Cash at the beginning of the year 59 964 64 702
Cash at the end of the year 74 216 59 964
OTHER INFORMATION
Capital expenditure 16 990 17 929
Capital commitments
Contracted for 3 697 5 881
Authorised - not contracted for 5 377 1 878
Current ratio 5.3 5.1
NOTES
1. The group has changed its accounting policies to comply with
International Financial Reporting Standards ("IFRS") effective 1 July 2004.
All comparative information has been adjusted accordingly.
2. Discontinued operation
An agreement was concluded in June 2005 in terms of which Rex Trueform
closed its Salt River factory and retrenched approximately 900 employees. A
lease agreement has been entered into with Brimstone who will lease the
property and plant of the Salt River factory.
2006 2005
R"000 R"000
Turnover 10 429 50 846
Loss of discontinued operation (3 887) (8 230)
Loss arising from discontinuance (666) (41 873)
Loss before taxation (4 553) (50 103)
Taxation - (10 223)
Loss for the year from discontinued operation (4 553) (39 880)
3. Compliance with International Financial Reporting Standards ("IFRS")
In order to comply with IFRS the Group has adopted the following accounting
Policies:
3.1 The Group elected to utilise the following exemption in terms of IFRS 1
- First-time adoption.
The fair value of certain buildings at the transition date was adopted as
the deemed cost and the applicable depreciation adjusted accordingly. In
order to determine depreciation, the useful lives and residual values of
properties will be reviewed on an annual basis.
3.2 Share options (share-based payments) granted to employees after 7
November 2002 are valued and this value is charged to the income statement
over the expected life of the option.
These financial statements have been prepared on the standards that were
applicable on 30 June 2006, being the first time that the group has
prepared financial statements under IFRS.
BALANCE SHEET
Consolidated (R"000)
2006 2005
(Reviewed) (Audited)
Assets
Non-current assets 58 640 54 708
Property, plant and equipment 43 656 42 820
Investment property 3 511 -
Investments (unlisted) 2 340 2 446
Deferred taxation 9 133 9 442
Current assets 124 046 127 195
Inventory 38 530 40 273
Trade and other receivables 11 296 25 720
Taxation 4 1 238
Cash 74 216 59 964
Total assets 182 686 181 903
Equity and liabilities
Equity attributable to equity holders 82 176 82 050
Share capital 1 200 1 200
Share premium 6 616 6 616
Non-distributable reserves 2 847 2 685
Distributable reserves 71 513 71 549
Minority interest 66 077 64 389
Total equity 148 253 146 439
Non-current liabilities 10 924 10 680
Post-retirement liability 6 450 6 748
Operating lease liabilities 4 474 3 932
Current liabilities 23 509 24 784
Trade and other payables 22 048 24 784
Taxation 1 461 -
Total equity and liabilities 182 686 181 903
SEGMENTAL REPORTING
Turnover
Manufacturing 164 565 215 689
less: intersegment sales (128 121) (139 051)
External sales 36 444 76 638
Retail 291 555 286 777
Total (continuing and
discontinued operations) 327 999 363 415
Net operating profit/(loss)*
Manufacturing (8 867) (61 062)
Retail 20 670 32 222
Property (1 158) -
Group services 287 2 148
Total 10 932 (26 692)
Depreciation included in net
operating profit/(loss)
Manufacturing 1 134 3 253
Retail 11 491 8 867
Total 12 625 12 120
Total segment assets (excluding cash)
Manufacturing 41 669 58 002
Retail 52 094 62 929
Property 8 344 -
Consolidation adjustment (5 114) (12 118)
Total 96 993 108 813
Total segment liabilities
Manufacturing (18 730) (24 052)
Retail (17 076) (18 351)
Consolidation adjustment 2 834 6 939
Total (32 972) (35 464)
Capital expenditure
Manufacturing 1 233 1 057
Retail 15 757 16 872
Total 16 990 17 929
*During the prior year, procurement activities were included in the
manufacturing segment.
For the current year this function is included in the retail segment as it
is now considered more closely aligned to retail activities. The prior year
figures have been restated accordingly.
STATEMENT OF CHANGES IN EQUITY
Share capital 1 200 1 200
Share premium 6 616 6 616
Non-distributable reserves
Opening balance 2 685 2 319
Foreign exchange rate changes 29 204
IFRS: share-based payments (Note 3.2) 133 162
2 847 2 685
Distributable reserves
Opening balance 71 549 83 581
IFRS: property, plant and equipment (Note 3.1) - 4 325
IFRS: share-based payments (Note 3.2) - (36)
Restated opening balance 71 549 87 870
Profit / (loss) after taxation 3 776 (12 509)
Dividends (3 812) (3 812)
71 513 71 549
Outside shareholders" interest
Opening balance 64 389 75 496
Movement for the period 1 688 (11 107)
Closing balance 66 077 64 389
Total capital and reserves 148 253 146 439
COMMENT
The operating subsidiary, Rex Trueform Clothing Company Limited, reports as
follows:
"The board is pleased to report that earnings for the year ended June 2006
amounted to 43.4 cents per share compared with a loss of 107.3 cents per
share in 2005. Headline earnings have however fallen short of expectations
having decreased by 25% to 46.7 cents per share.
Following a first half-year during which results were below expectations,
Queenspark produced a much improved performance in the second six months
with turnover improved by 9.5% over the previous year and by 8% on the
first half of the year.
Queenspark has not reached its full potential having achieved a moderate
increase of 1.7% in turnover for the full year which did not reflect the
buoyant conditions prevailing in the South African market. Margins were
maintained but increased occupancy and employment costs and expenses
incurred in the maintenance of infrastructure to support a higher level of
turnover translated into a reduced contribution to group earnings compared
to last year.
Scaled-down manufacturing operations continued at Salt River during the
period July to December 2005 resulting in a manufacturing loss during that
period. Also, the restructured Atlantis factory has not progressed to a
level of efficiency whereby it is operating profitably. These negatives
have diluted the positive Queenspark contribution to earnings.
Prospects
Although consumer demand has possibly peaked, prospects for the retail
business, barring unforeseen circumstances appear sound.
The Queenspark Summer range, currently in stores has been well received and
turnover which is currently exceeding targets will be further boosted by
the additional turnover generated by at least three new stores which will
be opened during the first half of the current year.
The expected improvement in Queenspark"s performance together with a
containment of losses at the Atlantis factory should have a beneficial
effect on the overall group result in 2007. It must however be noted that
the new import quota system introduced by the authorities is likely to have
an adverse effect on profits."
Dividend
In view of the level of earnings and cash resources available the board has
recommended that a dividend of 14 cents per share (32 cents per share in
2005) be declared on the ordinary and `N" ordinary shares. Shareholders
will be asked to consider and, if deemed fit, to approve this
recommendation of the directors at the annual general meeting of the
company to be held on 22 November 2006.
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 10.0% (20.0 cents per share)
which will be included in the half-yearly payment in December 2006.
An announcement detailing the terms of the dividend declaration will be
made on 22 November 2006, 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 towards the end of October 2006.
Signed on behalf of the board:
ML Krawitz (Chairman) PE Shub (Chief Executive Officer)
Cape Town
21 September 2006
Transfer Secretaries:
Computershare Investor Services 2004 (Pty) Ltd, 70 Marshall Street,
Johannesburg, 2001
Registered Office:
Rex Buildings, 263 Victoria Road, Salt River, Cape Town, 7925
African and Overseas Enterprises Limited (Incorporated in the Republic of
South Africa - Registration number 1947/027461/06)
Share codes: AOO - AON - AOVP
ISIN: ZAE000000485 - ZAE000009718 - ZAE000000493
Directors: ML Krawitz (Chairman), PE Shub (Chief Executive Officer),
CEA Radowsky, JC O"Brien
Secretary: AA Hodgkinson
Date: 21/09/2006 12:02:09 PM Produced by the JSE SENS Department
