| Tue 26 Sep 2006, 17:30 | | Super Group - Reviewed results for the fifteen mon |
|
SPG
SPG
Super Group - Reviewed results for the fifteen month period ended 30 June 2006
Super Group Limited
Incorporated in the Republic of South Africa
Registration number 1943/016107/06
ISIN number: ZAE000011334
Share code: SPG
Reviewed results for the fifteen month period ended 30 June 2006
HIGHLIGHTS
Revenue R12,4 billion
Trading profit R889 million
Headline earnings per share 133.6 cents
Cash generated from operations R1,1 billion
GROUP PROFILE
Super Group is an integrated supply chain management business comprising two
core operating divisions, namely Supply Chain and Automotive.
FINANCIAL REVIEW
Super Group changed its financial year-end to 30 June. As a result, the reported
upon financial period comprises 15 months. The group has included an unaudited
abridged pro forma income statement for the 12 months ended 30 June 2006 ("pro
forma"). For income statement comparative purposes, the pro forma is compared
with the 12 months to 31 March 2005.
Super Group has delivered satisfactory growth in its tenth year as a public
company listed on the JSE Limited. The group earned revenue of R12,4 billion and
trading profit of R889 million for the 15 month period. Headline earnings per
share for the 15 months was 133,6 cents.
Pro forma revenue for the 12 months to June 2006 increased 19% to R10 billion,
with organic growth of 12%. Pro forma trading profit increased 16% to R740
million achieving a pro forma trading margin of 7,4%. Pro forma headline
earnings per share increased 12% from 102,9 cents to 115,1 cents.
Cash generated from operations for the 15 month period increased to R1,1
billion, underpinning the strong trading profit growth and cash generating
ability of the group. The investment in working capital funded the new
commercial vehicle importation strategy and Mica"s inventory procurement
strategy. The higher inventory levels were funded largely by an increase in
trade payables. Trade receivables increased owing to strong revenue growth,
specifically within Supply Chain Management.
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. During the period, Super Group expanded its 70%-owned
Australian fleet management business with the acquisition of SMB Fleet
Management Pty Limited, the leading provider of private consumer leases in
Australia. Construction of the first 40 000 m2 warehouse in the new warehousing
park was completed with construction of the second 40 000 m2 warehouse almost
complete. The new Grand Central Mercedes Dealership was successfully opened and
is trading ahead of expectations. External long-term property funding was
secured to finance these new facilities.
The Super Group Share Trust acquired 12,5 million shares during the financial
period at an average price of R10,93 to meet its future obligations.
The balance sheet of the group remains strong with net cash and cash equivalents
of R842 million. Liabilities include full maintenance lease liabilities of R1,1
billion and non-recourse loans raised from Australian banks and financial
institutions of R268 million. At 30 June 2006, Super Group had net debt, after
excluding full maintenance leasing and non-recourse Australian debt, of R944
million resulting in gearing of 54%.
DIVISIONAL OVERVIEW
Supply Chain Division
Supply Chain Management achieved revenue of R2.8 billion for the 15 month
period. The strong revenue growth in the lower margin procurement and bulk
materials handling businesses and additional costs incurred in the transition to
the new state-of-the-art warehouse facility reduced trading margins. Super Group
continues to be awarded new contracts and extend the scope of services within
clients.
Fleet Solutions reported strong growth in revenue and trading profit primarily
as a result of the acquisition of SMB Fleet Management in Australia and the
annualisation of the FleetAustralia acquisition. Vehicles under management
worldwide increased 27% to almost 84 000 vehicles. Both the South African and
Australian operations performed in line with expectations. The group has been
successful in securing a number of smaller contracts. The award of a five-year
maintenance contract by General Motors South Africa and the reawarding of the
City of Johannesburg contract for a further five years will underpin local
growth. Capitalising on its fleet management experience, the South African
operations has expanded its offering to include equipment management.
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 effectively managed.
Retail Supply Chain"s revenue was positively impacted by the annualisation of
the Mica acquisition. The reorganisation of the AutoZone business into a single
brand negatively affected performance in the current period. AutoZone has
maintained its market leadership position 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. The poor performance
by used commercial vehicles was partly offset by the new commercial vehicle
initiative.
Services Division
This division, which comprises group treasury and insurance, performed in line
with expectations. Strong revenue growth resulted from increased insurance
activities. The impact on trading profit is marginal as the majority of risk is
re-insured. The impairment of investments of R34 million relates to the group"s
investment in CIC Holdings Limited, which was sold subsequent to period-end.
PROSPECTS
The group continues to capitalise on supply chain opportunities and new contract
wins are expected. However, rising interest rates, together with food and fuel
inflation, may subdue discretionary consumer spending, thereby impacting on
client volumes.
The home improvement industry continues to experience strong growth. The
expansion of the Mica brand through our focus on the product range, supply chain
improvement and superior service will support growth in the coming year.
The new vehicle market continues to show good growth and our dealerships are
expected to perform in line with the industry. The commercial vehicle
importation strategy will gain momentum in the current period.
The strong growth in new car sales in recent years should start to impact
positively on parts sales in the automotive aftermarket in the years ahead. The
business has been restructured to achieve a growing share of this market and is
expected to perform in line with historical trends in profitability.
The reaward of the City of Johannesburg fleet outsourcing contract bodes well
for further Government outsourcing contracts. FleetAfrica"s market leadership in
fleet outsourcing should result in further contract gains.
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.
DIVIDEND DECLARATION 2006
A dividend of 40 cents (2005: 37 cents) per ordinary share has been declared in
respect of the financial period ended 30 June 2006 and is payable to
shareholders registered at the close of business on Friday, 20 October 2006. The
salient dates are:
Last date to trade shares cum dividend Friday, 13 October 2006
Shares commence trading ex dividend Monday, 16 October 2006
Record date Friday, 20 October 2006
Payment date Monday, 23 October 2006
Share certificates may not be dematerialised or rematerialised between Monday,
16 October 2006 and Friday, 20 October 2006, both days inclusive.
On Monday, 23 October 2006, the dividend will be electronically transferred to
the bank accounts of all certified shareowners who utilise this facility. In all
other instances of certificated holders, cheques dated 23 October 2006 will be
posted on or about that date. Shareholders who have dematerialised their shares
will have their accounts credited on 23 October 2006.
On behalf of the board
Larry Lipschitz Dheven Dharmalingam
Chief Executive Officer Group Financial Director
26 September 2006
Super Group Limited
Incorporated in the Republic of South Africa
Registration number 1943/016107/06
ISIN number: ZAE000011334
Share code: SPG
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, Johannesburg, 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
OTHER NOTES
Corporate governance
The group subscribes to sound corporate governance structures and processes and
complies with the JSE Limited"s Listing Requirements. The group strives to
continually improve reporting to shareholders.
Directorate
As announced previously, the composition of the board has changed during the
period under review. The group continues to evaluate the composition of its
board.
People transformation
The passion and quality of our people continues to be a key success factor.
Additional initiatives introduced in the current period will ensure that we
continue to harness this internal strength within our group.
Social responsibility
Super Group is recognised for its corporate social investment activities.
Management remains committed to supporting social responsibility projects and is
mindful of the needs in this regard. Initiatives embarked upon continue to
contribute to broader skills development and sourcing of appropriately qualified
staff on an ongoing basis.
CONSOLIDATED BALANCE SHEETS
30 June 31 March 31 March
2006 2006 2005
Restated
and
Reviewed Unaudited reviewed
R"000 R"000 R"000
ASSETS
Property, plant and equipment 1 247 150 1 184 664 819 450
Full maintenance lease assets 1 351 538 1 356 271 1 245 162
Intangible assets 188 661 167 441 116 404
Goodwill 1 060 902 1 035 357 860 352
Investments and loans 178 137 183 126 196 335
Deferred tax assets 73 212 62 736 63 671
Current assets 3 843 349 3 233 195 2 986 239
Inventories 1 120 832 1 002 384 778 725
Trade and other receivables 1 861 946 1 616 132 1 297 933
Cash and cash equivalents 860 571 614 679 909 581
Total assets 7 942 949 7 222 790 6 287 613
EQUITY AND LIABILITIES
Capital and reserves
Capital and reserves attributable 1 754 857 1 784 970 1 809 008
to equity holders of Super Group
Limited
Minority shareholders 142 819 131 870 110 987
Total equity 1 897 676 1 916 840 1 919 995
Liabilities
Fund reserves 200 893 209 141 104 064
Deferred tax liabilities 198 234 237 196 193 079
Interest-bearing borrowings# 3 147 805 2 938 208 2 425 035
- Non-current 2 572 312 2 623 502 1 731 024
- Current 575 493 314 706 694 011
Other current liabilities 2 498 341 1 921 405 1 645 440
Total equity and liabilities 7 942 949 7 222 790 6 287 613
Net asset value per share (cents) 494,4 502,9 495,7
Net asset value per share 195,5 211,2 260,0
excluding goodwill (cents)
# Interest-bearing borrowings
comprise:
Non-recourse liabilities 267 600 180 317 157 032
Full maintenance lease 1 143 785 1 119 962 997 649
liabilities
Bond and other 1 400 744 1 286 847 1 165 285
Property liabilities 316 987 349 533 97 526
Bank overdraft 18 689 1 549 7 543
3 147 805 2 938 208 2 425 035
CONSOLIDATED INCOME STATEMENTS
15 month 12 month 12 month
period period period
ended ended ended
30 June 31 March 31 March
2006 2006 2005
Restated
and
Reviewed Unaudited reviewed
R"000 R"000 R"000
Revenue 12 363 153 9 858 532 8 444 942
Trading profit before 1 215 774 944 137 875 506
depreciation and amortisation
Depreciation and amortisation 326 796 220 102 238 781
Trading profit 888 978 724 035 636 725
Capital items* 77 826 57 192 55 207
Operating profit 811 152 666 843 581 518
Net finance charges 275 029 199 824 153 328
Share of profit of associates 5 544 4 755 6 775
(net of taxation)
Profit before taxation 541 667 471 774 434 965
Income tax expense 110 511 96 316 103 220
Profit for the period 431 156 375 458 331 745
Attributable to minority 32 298 28 068 28 901
shareholders
Attributable to equity holders of 398 858 347 390 302 844
Super Group Limited
RECONCILIATION OF HEADLINE
EARNINGS
Profit attributable to equity 398 858 347 390 302 844
holders of Super Group Limited
*Capital items 77 826 57 192 55 207
Closure costs 9 242 6 893 27 803
Costs incurred on unsuccessful 7 793 - -
acquisition
Impairment of investments 34 091 30 186 -
Impairment of goodwill and 26 700 20 113 27 404
intangible assets
Headline earnings for the period 476 684 404 582 358 051
Number of shares in issue ("000)
- Total less treasury shares 354 951 354 951 364 929
- Weighted 356 695 357 130 348 006
- Diluted 373 576 373 603 364 278
Basic earnings per share (cents) 111,8 97,3 87,0
Diluted earnings per share 106.8 93,0 83,1
(cents)
Headline earnings per share 133,6 113,3 102,9
(cents)
Diluted headline earnings per 127,6 108,3 98,3
share (cents)
Dividends per ordinary share paid 37,0 37,0 32,0
- IAS 10 (cents)
ABRIDGED PRO FORMA INCOME STATEMENTS
12 month 12 month
period period
ended ended
30 June 31 March
2006 2005
Restated %
Unaudited@ And change
reviewed
R"000 R"000
Revenue 10 044 704 8 444 942 19
Trading profit 740 125 636 725 16
Operating profit 663 537 581 518 14
Headline earnings 410 961 358 051 15
Headline earnings per share 115,1 102,9 12
(cents)
@ Pro forma financial results for the 12 month period ended 30 June 2006 have
been extracted from the reviewed results for the 15 month period ended 30 June
2006
CONSOLIDATED CASH FLOW STATEMENTS
15 month 12 month 12 month
period period period
ended ended ended
30 June 31 March 31 March
2006 2006 2005
Restated
and
Reviewed Unaudited reviewed
R"000 R"000 R"000
Cash flows from operating
activities
Operating cash flow before 1 284 850 917 837 820 733
working capital changes
Working capital changes (137 796) (234 593) (284 675)
Cash generated from operations 1 147 054 683 244 536 058
Net finance charges paid (280 829) (200 190) (154 903)
Net dividend paid (128 165) (132 652) (112 670)
Taxation paid (72 583) (41 897) (67 282)
Net cash retained from operating 665 477 308 505 201 203
activities
Cash flows from investing
activities
Cost of business acquisitions, (235 899) (177 785) (409 339)
net of cash acquired
Additions to property, plant and
equipment and intangible assets
- net of disposals (757 274) (576 424) (271 148)
Additions to full maintenance
lease assets
- net of disposals (231 423) (275 099) (249 393)
Decrease/(increase) in 16 568 (13 334) (26 106)
investments and loans
Net cash outflow from investing (1 208 (1 042 (955 986)
activities 028) 642)
Cash flows from financing
activities
Net (cost)/proceeds on share (139 422) (139 422) 274 955
purchases, share issues and
options exercised
Increase in interest-bearing 464 850 456 963 1 082 660
borrowings
Increase in full maintenance 157 589 128 450 30 233
lease liabilities
Net cash inflow from financing 483 017 445 991 1 387 848
activities
Net (decrease)/increase in cash (59 534) (288 146) 633 065
and cash equivalents
Cash and cash equivalents at 902 038 902 038 268 322
beginning of period
Effect of foreign exchange on (622) (762) 651
cash and cash equivalents
Net cash and cash equivalents at 841 882 613 130 902 038
end of period
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
15 month 12 month 12 month
period period period
ended ended ended
30 June 31 March 31 March
2006 2006 2005
Restated
and
Reviewed Unaudited reviewed
R"000 R"000 R"000
Capital and reserves attributable
to equity holders of Super Group
Limited
Balance at beginning of period 1 859 769 1 859 769 1 281 205
previously reported
Retrospective application of SA (43 306) (43 306) (37 243)
GAAP accounting policy changes
and restatements
Property, plant and equipment (2 708) (2 708) (3 373)
Operating lease straight-lining (40 598) (40 598) (33 870)
Adjustment on adoption of IFRS (7 455) (7 455) 65 406
net of taxation
Reconsolidation and (9 775) (9 775) 65 406
hyperinflation - Zimbabwean
subsidiaries
Translation of goodwill at 2 320 2 320 -
closing rate
Capital and reserves attributable 1 809 008 1 809 008 1 309 368
to equity holders of Super Group
Limited - restated
Share (repurchases)/issues and (140 451) (140 729) 330 981
options exercised, net of
expenses
Effect of foreign exchange on (194 555) (113 152) (19 528)
equity holders of Super Group
Limited
Profit attributable to equity 398 858 347 390 302 844
holders of Super Group Limited
Other movements in reserves 14 259 14 715 -
Ordinary dividends (132 262) (132 262) (114 657)
Balance at end of period 1 754 857 1 784 970 1 809 008
Minority shareholders
Balance at beginning of period 110 987 110 987 76 932
previously reported
Adoption of IFRS and change in - - (928)
interpretation of accounting
policies
Ordinary dividends paid to (5 608) (3 618) (1 857)
minority shareholders
Profit attributable to minority 32 298 28 068 28 901
shareholders
Effect of foreign exchange on 495 (6 596) 1 423
minority shareholders
Changes in minority shareholders 4 647 3 029 6 516
as a result of acquisitions and
disposals
Balance at end of period 142 819 131 870 110 987
Total equity at end of period 1 897 676 1 916 840 1 919 995
Comprising:
Share capital 43 271 43 271 41 627
Share premium net of treasury (15 526) (15 804) 126 569
shares
Retained earnings 1 282 774 1 236 027 1 020 898
Equity-settled share-based 35 182 33 562 22 038
payment reserve
Net surplus on disposal of 556 036 556 036 556 036
investments
Revaluation reserve 16 738 24 338 22 488
Foreign currency translation (180 399) (98 996) 14 156
reserve
Contingency reserve - insurance 16 781 6 536 5 196
Minority shareholders 142 819 131 870 110 987
Total equity at end of period 1 897 676 1 916 840 1 919 995
RECONCILIATION OF SA GAAP TO IFRS PROFIT
12 month
period
ended
31 March
2005
Restated
and
reviewed
R"000
Profit attributable to equity 395 343
holders of Super Group Limited -
SA GAAP
Retrospective application of SA (5 547)
GAAP accounting policy changes
and restatements net of taxation
Property, plant and equipment 1 181
Operating lease straight-lining (6 728)
Adjustment on adoption of IFRS (86 952)
Reconsolidation and (72 552)
hyperinflation - Zimbabwean
subsidiaries
IFRS 2 - Share-based payments (14 400)
Profit attributable to equity 302 844
holders of Super Group Limited
restated - IFRS
CURRENCY ANALYSIS - PROFIT BEFORE TAXATION
15 month 12 month 12 month
period period period
ended ended ended
30 June 31 March 31 March
2006 2006 2005
Restated
and
Reviewed Unaudited reviewed
% % %
Australian dollar 13 15 8
US dollar and other 14 15 5
Rand 73 70 87
100 100 100
SEGMENTAL ANALYSIS
Revenue
15 month 12 month 12 month
period period period
ended ended ended
30 June 31 March 31 March
2006 2006 2005
R"000 R"000 R"000
Supply Chain Management 2 779 621 2 176 910 1 755 430
African Transport 365 814 320 190 479 666
Fleet Solutions 1 214 554 984 396 747 862
Retail Supply Chain 2 806 547 2 225 008 1 876 453
Dealerships 4 918 997 3 944 963 3 439 053
Services 277 620 207 065 146 478
Group 12 363 153 9 858 532 8 444 942
SEGMENTAL ANALYSIS (CONTINUED)
Trading profit
15 month 12 month 12 month
period period period
ended ended ended
30 June 31 March 31 March
2006 2006 2005
R"000 R"000 R"000
Supply Chain Management 348 485 290 838 281 362
African Transport (21 966) (22 788) (66 368)
Fleet Solutions 307 508 254 482 185 829
Retail Supply Chain 87 142 68 227 99 080
Dealerships 152 314 120 815 121 339
Services 15 495 12 461 15 483
Group 888 978 724 035 636 725
SEGMENTAL ANALYSIS (CONTINUED)
Operating profit
15 month 12 month 12 month
period period period
ended ended ended
30 June 31 March 31 March
2006 2006 2005
R"000 R"000 R"000
Supply Chain Management 336 585 280 832 280 193
African Transport (27 966) (25 625) (84 913)
Fleet Solutions 291 415 246 152 185 829
Retail Supply Chain 87 142 68 227 98 908
Dealerships 142 572 114 982 86 018
Services (18 596) (17 725) 15 483
Group 811 152 666 843 581 518
NOTES TO THE FINANCIAL STATEMENTS
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The group complies with the South African Companies Act and has adopted
International Financial Reporting Standards (IFRS) for the reporting period
ended 30 June 2006. Comparative figures have been restated and reviewed, where
applicable, as required by IFRS and changes in existing accounting
interpretations.
The effective date of the group"s transition to IFRS was 1 April 2004.The group
has applied the following optional exemptions from full retrospective
application at this date.
* Not to restate business combinations that took place prior to the n date.
* To include goodwill on the basis of deemed cost, being cost less
accumulated amortisation.
* To transfer to retained earnings the accumulated foreign currency
translation reserves at the transition date.
* To only account for the cost of options to acquire shares in the company
granted subsequent to 7 November 2002, which had not vested by 1 January
2005.
The following significant new accounting policies were applied for IFRS
reporting:
* Foreign exchange - Foreign exchange differences arising on translation of
all foreign operations are recognised directly in a separate component of
equity (foreign currency translation reserve).
* Basis of consolidation - Subsidiaries in the group which operate under
severe long-term restrictions that significantly impair their ability to
transfer funds, were not consolidated under South African Generally
Accepted Accounting Practice (SA GAAP). These exclusions are no longer
provided for in IAS 27 (revised) and such subsidiaries are now
consolidated. This required the reconsolidation 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 rate of
exchange.
* Share-based payments - The compensation expense is recognised over the
vesting period and adjusted to reflect actual levels of vesting with a
corresponding increase in equity.
After consideration of the previous accounting standards, it was noted that
revisions were required with regard to the interpretation of certain standards
as previously reported. The following changes were made resulting in a
restatement of comparatives previously reported:
* Operating leases - 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 capitalized.
* Property, plant 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.
ADDITIONAL INFORMATION
* Capital items are defined as items of income and expenditure relating to
the acquisition, disposal or impairment of investments, businesses,
property, plant and equipment and intangible assets, closure of businesses,
as well as the impairment of goodwill.
* The group has authorised, but not yet contracted for, capital commitments
of R276 million, excluding full maintenance lease assets.
* Full details of the group"s business combinations for the period, additions
and disposals of property, plant and equipment, as well as commitments and
contingencies, will be included in the group"s financial statements.
* The group, in the ordinary course of business, entered into various related
party transactions on an arm"s length basis on terms no less favourable
that those arranged with third parties.
* The net realised and unrealised foreign exchange translation losses
included in trading profit amounted to R17,4 million for the fifteen month
period ended 30 June 2006 (2005:R 19,6 million).
* Subsequent to period end, Super Group has disposed of its equity interest
in CIC Holdings Limited effective 1 September 2006 for a total cash
consideration of R40 million.
REVIEW BY KPMG INC
The provisional financial statements for the 15 month period ended 30 June 2006
have been reviewed by our auditors, KPMG Inc. Their unmodified review report is
available for inspection at the registered office of Super Group Limited.
Date: 26/09/2006 05:30:40 PM Produced by the JSE SENS Department
