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SPG
SPG
SPG - Super Group Limited - Unaudited condensed interim financial
statements for the six months ended 31 December 2006
Super Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1943/016107/06)
ISIN number: ZAE000011334
Share code: SPG
Unaudited condensed interim financial statements for the six months ended
31 December 2006
- Revenue +20%*
- Operating profit +36%*
- Profit attributable to equity holders +25%*
- Cash generated from operations R327 million
Consolidated Balance Sheets
31 December 30 September 30 June
2006 2005 2006
Unaudited Unaudited Audited
R`000 R`000 R`000
ASSETS
Property, plant and 1,359,853 981,355 1,247,150
equipment
Full maintenance lease 1,505,336 1,184,420 1,351,538
assets
Intangible assets 218,344 115,917 188,661
Goodwill 1,084,407 1,018,870 1,060,902
Investments in associates 11,441 43,595 6,151
Investments and other non- 126,572 120,826 131,674
current assets
Deferred tax assets 81,175 60,348 73,212
Current assets 3,883,735 3,219,984 3,883,661
Inventories 1,253,537 857,789 1,120,832
Trade and other 1,942,788 1,516,741 1,861,946
receivables
Investments held for sale - - 40,312
Cash and cash equivalents 687,410 845,454 860,571
Total assets 8,270,863 6,745,315 7,942,949
EQUITY AND LIABILITIES
Capital and reserves
Capital and reserves
attributable to equity
holders of Super Group 1,841,687 1,663,703 1,754,857
Limited
Minority interest 151,728 143,944 142,819
Total equity 1,993,415 1,807,647 1,897,676
Liabilities
Fund reserves 252,916 131,326 200,893
Deferred tax liabilities 188,457 168,897 198,234
Interest-bearing 1 3,420,969 2,708,425 3 147 805
borrowings
Non-current 2,700,143 2,583,520 2,572,312
Current 720,826 124,905 575,493
Other current liabilities 2,415,106 1,929,020 2,498,341
Total equity and 8,270,863 6,745,315 7,942,949
liabilities
Consolidated Income Statements
6-month period 6-month period 15-month
period
ended ended ended
31 December 30 September 30 June
2006 2005 2006
Unaudited Unaudited Audited
R`000 R`000 R`000
Revenue 5,787,262 4,814,192 12,363,153
Trading profit
before
depreciation
and
amortisation 610,073 486,196 1,195,359
Depreciation, (151,791) (114,264) (306,381)
amortisation
and recoupments
Trading profit 458,282 371,932 888,978
Capital items 2 (9,872) (42,302) (77,826)
Operating 448,410 329,630 811,152
profit
Investment 58,598 56,869 81,997
income and
interest
received
Finance costs (229,686) (146,246) (357,026)
Share of profit 4,051 2,500 5,544
of associates
(net of
taxation)
Profit before 281,373 242,753 541,667
taxation
Income tax (54,061) (48,978) (110,511)
expense
Profit for the 227,312 193,775 431,156
period
Attributable to 11,626 21,836 32,298
minority
shareholders
Attributable to
equity holders
of
Super Group 215,686 171,939 398,858
Limited
RECONCILIATION
OF HEADLINE
EARNINGS
Profit
attributable to
equity holders
of
Super Group 215,686 171,939 398,858
Limited
Capital items 9,872 42,302 77,826
Closure costs 1,214 38,204 9,242
Costs incurred 5,188 - 7,793
on unsuccessful
acquisition
Impairment of - - 34,091
investments
Impairment of 3,470 4,098 26,700
goodwill
property, plant
and equipment
and intangible
assets
Headline 225,558 214,241 476,684
earnings for
the period
Basic earnings 60.8 47.9 111.8
per share
(cents)
Diluted 57.9 45.4 106.8
earnings per
share (cents)
Headline 63.6 59,6 133.6
earnings per
share (cents)
Diluted 60.6 56,6 127.6
headline
earnings per
share (cents)
Dividends per 40.0 37.0 37.0
ordinary share
paid - (cents)
Consolidated Cash Flow Statements
6-month period 6-month period 15-month period
ended ended ended
31 December 30 September 30 June
2006 2005 2006
Unaudited Unaudited Audited
R`000 R`000 R`000
Cash flows from
operating
activities
Operating cash flow
before working
capital changes 549,330 438,036 1,284 850
Working capital (222,748) 2,457 (137,796)
changes
Cash generated from 326,582 440,493 1,147,054
operations
Net finance charges (129,721) (77,806) (280,829)
paid
Net dividend paid (140,456) (137,687) (128,165)
Taxation paid (27,876) (39,895) (72,583)
Net cash retained
from operating
activities 28,529 185,105 665,477
Cash flows from
investing
activities
Cost of business
acquisitions, net
of
cash acquired (16,260) (133,330) (235,899)
Disposal of 39,232 - -
associate
Additions to
property, plant and
equipment
and intangible (250,082) (292,664) (757,274)
assets - net of
disposals
Additions to full
maintenance lease
assets -
net of disposals (210,523) (49,876) (231,423)
Decrease/(increase) 3,598 (2,439) 16,568
in investments and
loans
Net cash outflow (434,035) (478,309) (1,208,028)
from investing
activities
Cash flows from
financing
activities
Net proceeds /
(cost) on share
purchases
share issues and 14,200 (101,833) (139,422)
options exercised
Increase in 51,527 195,659 464,850
interest-bearing
borrowings
(decrease)/increase (38,648) 97,101 157,589
in full maintenance
lease borrowings
Net cash inflow 27,079 190,927 483,017
from financing
activities
Net decrease in
cash and
cash equivalents (378,427) (102,277) (59,534)
Cash and cash
equivalents at
beginning
of period 841,882 902,038 902,038
Effect of foreign
exchange on cash
and
cash equivalents 75 4,932 (622)
Net cash and cash
equivalents at
end of period 463,530 804,693 841,882
Consolidated Statements of Changes in Equity
6-month 6-month 15-month
period period period
ended ended ended
31 December 30 September 30 June
2006 2005 2006
Unaudited Unaudited Audited
R`000 R`000 R`000
Capital and reserves
attributable to
equity
holders of Super
Group Limited
Balance at beginning 1,754,857 1,809,008 1,809,008
of period
Share
(repurchases)/issues
and options
exercised, net of 16,950 (101,836) (140,451)
expenses
Effect of foreign
exchange on equity
holders
of Super Group 82 (78,093) (194,555)
Limited
Profit attributable
to equity holders of
Super Group 215,686 171,939 398,858
Limited
Other movements in (3,106) - 14,259
reserves
Ordinary dividends (142,782) (137,315) (132,262)
Balance at end of 1,841,687 1,663,703 1,754,857
period
Minority
shareholders
Balance at beginning 142,819 110,987 110,987
of period
Ordinary dividends
paid to minority
shareholders (2,328) (3,726) (5,608)
Profit attributable 11,626 21,836 32,298
to minority
shareholders
Effect of foreign
exchange on minority
shareholders (631) 5,697 495
Changes in minority
shareholders as a
result
of acquisitions and 242 9,150 4,647
disposals
Balance at end of 151,728 143,944 142,819
period
Total equity at end 1,993,415 1,807,647 1,897,676
of period
Comprising:
Share capital 47,297 40,688 47,297
Share premium 511,229 263,684 511,229
Retained earnings 1,465,010 1,084,155 1,387,678
Share buyback (535,955) ( 238,012) (550,155)
reserve/treasury
shares
General reserve 556,036 556,036 556,036
Revaluation reserve 13,976 22,205 17,082
Foreign currency (228,075) (70,814) (228,157)
translation reserve
Contingency reserve 12,169 5,761 13,847
- insurance
Minority interest 151,728 143,944 142,819
Total equity at end 1,993,415 1,807,647 1,897,676
of period
Salient Features
6-month 6-month 15-month
period period period
ended ended ended
31 30 September 30 June
December
2006 2005 2006
Unaudited Unaudited Audited
R`000 R`000 R`000
1. Interest-bearing
borrowings
Non-recourse 273,182 208,144 267,600
borrowings
Full maintenance 1,127,208 1,094,753 1,143,785
lease borrowings
Bond and other 1,379,802 1,323,725 1,400,744
Property borrowings 416,897 41,042 316,987
Bank overdraft 223,880 40,761 18,689
3,420,969 2, 708,425 3,147,805
2. Capital items
Closure costs 1,214 38,204 9,242
Costs incurred on 5,188 - 7,793
unsuccessful
acquisition
Impairment of - - 34,091
investments
Impairment of
goodwill property,
plant and equipment
and intangible
assets 3,470 4,098 26,700
9,872 42,302 77,826
3. Share statistics
Total issued less 354,929 355,201 354,861
treasury shares
(`000)
Weighted (`000) 354,872 359,315 356,695
Diluted (`000) 372,203 378,490 373,576
Net asset value per 518.9 468.4 494.5
share (cents)
Net asset value per
share excluding
goodwill (cents) 213.4 181.5 195.6
4. Capital commitments
Authorised, but not 99 201 340,134 361 382
yet contracted for
capital commitments,
excluding full
maintenance lease
assets
There have been no significant changes in contingent liabilities and
guarantees, since 30 June 2006, as disclosed in the 2006 annual report.
5. Basis of preparation and accounting policies
The condensed consolidated financial statements for the 6-month period
ended 31 December 2006 have been prepared in compliance with the Listing
Requirements of the JSE Limited, International Financial Reporting
Standards (IFRS) (in particular International Accounting Standard 34 -
Interim Financial Reporting) and the South African Companies Act, 1973,
as amended.
The accounting policies applied in the presentation of the condensed
consolidated interim financial statements are consistent with those
applied in the preparation of the financial statements for the 15-month
period ended 30 June 2006.
Super Group changed its financial year end to June in the prior financial
period. As a result, the comparative results are in respect of the six
month period ended 30 September 2005.
6. Related party transactions
The group, in the ordinary course of business, entered into various sale
and purchase transactions on an arm`s length basis at market rates with
related parties.
7. Selected ratios
Trading margin 7.9% 7.7% 7.2%
Operating margin 7.7% 6.8% 6.6%
Gearing - excluding FML and non-recourse
Borrowings 81.0% 37.0% 54.0%
Gearing excluding FML non-recourse and
property borrowings 57,0% 35,0% 36,0%
Currency analysis - profit before taxation
6-month 6-month 15-month
period period period
ended ended ended
31December 30 September 30 June
2006 2005 2006
Unaudited Unaudited Audited
% % %
Rand 72 67 73
Australian dollar 9 14 13
US dollar and other 19 19 14
100 100 100
Segmental Analysis
Revenue
6 months ended 6 months ended 15 months ended
31 December 30 September 30 June
2006 2005 2006
Unaudited Unaudited Audted
R`000 R`000 R`000
Supply Chain
Management 1,221,325 1,006,252 2,779,621
African 120,391 157,089 365,814
Transport
Fleet Solutions 579,650 494,480 1,214,554
Retail Supply 1,279,577 1,084,682 2,806,547
Chain
Dealerships 2,382,014 1,909,059 4,918,997
Services 204,305 162,630 277,620
Group 5,787,262 4,814,192 12,363,153
Segmental Analysis continued
Trading profit
6 months ended 6 months ended 15 months ended
31 December 30 September 30 June
2006 2005 2006
Unaudited Unaudited Audited
R`000 R`000 R`000
Supply Chain
Management 175,261 135,669 348,485
African (4,126) (12,333) (21,966)
Transport
Fleet Solutions 128,852 124,068 307,508
Retail Supply 65,851 53,076 87,142
Chain
Dealerships 79,317 65,550 152,314
Services 13,127 5,902 15,495
Group 458,282 371,932 888,978
Segmental Analysis continued
Operating
profit
6 months ended 6 months ended 15 months ended
31 December 30 September 30 June
2006 2005 2006
Unaudited Unaudited Audited
R`000 R`000 R`000
Supply
Chain 172,182 141,266 336,585
Management
African (4,126) (12,333) (27,966)
Transport
Fleet Solutions 123,662 121,568 291,415
Retail Supply 65,851 51,872 87,142
Chain
Dealerships 77,713 65,550 142,572
Services 13,128 (38,293) (18,596)
Group 448,410 329,630 811,152
Group Profile
Super Group is an integrated supply chain management business comprising
two core operating divisions, namely Supply Chain and Automotive.
Financial Overview
Super Group produced solid growth from operations for the period under
review. Revenue for the period increased 20% from R4.8 billion to R5.8
billion. Strong growth from operations resulted in operating profit
increasing 36% to R448 million and operating margins improving from 6.8%
to 7.7%. Headline earnings per share for the six-month period under
review was 63.6 cents.
The group has strategically invested in new greenfields businesses. These
include the importation and assembly of commercial vehicles, industrial
and yellow equipment, predominantly from China. They are positioned in
the high growth construction sector and should lead to sustained growth
and profitability over the medium term. The investment to date includes
an assembly plant in Pietermaritzburg, various retail sites and working
capital of approximately R200 million.
Super Group generated cash of R549 million before working capital
movements. A further R223 million was invested in working capital mainly
in inventory required for the greenfields businesses and trade
receivables owing to strong revenue growth, particularly in Mica and
Micor.
Investments were made in assets required for supply chain contracts
including the development of the second warehouse in Super Park
warehousing facility as well as associated transport and rental fleets. A
further R250 million was utilised to acquire vehicles following the re-
award of the City of Johannesburg contract and other new contracts won in
the full maintenance lease business.
The group has cash and cash equivalents of R464 million. At 31 December
2006, Super Group had net debt of R1,419 million and gearing of 81%,
after excluding full maintenance leasing and non-recourse debt. The
increase in debt relates largely to property funding where the group has
opted to own strategic properties excluding the property borrowing
results in gearing of 57%. Management is confident that the strong cash
generative abilities of the group will result in a reduction in debt and
gearing over the medium term.
Divisional overview
Supply Chain Division
Supply Chain Management produced pleasing results showing an increase of
21% in revenue to R1.2 billion and an increase in operating profit of
22%. This is as a result of a broader range of services and excellent
service levels. The construction of the second 40,000 m2 warehouse in
Super Park was completed with DaimlerChrysler occupying 13,600 m2; the
balance will be fully occupied by year-end. Super Group continues to
expand its supply chain offering to its clients.
Fleet Solutions performed in line with expectations. FleetAfrica
increased its revenue and operating profit by 13%, resulting in operating
margins of 24,8%. The re-award of the City of Johannesburg contract has
been successfully implemented. The Australian operations achieved 24%
increase in revenue. Additional costs relating to an unsuccessful
acquisition and the employment of additional executives to position the
business to capitalise on future growth opportunities resulted in a
temporary decline in operating margins to 15.9%. The Australian
operations have secured several new clients with substantial fleets.
African Transport produced an operating loss for the period as
operational efficiencies were negated by a foreign currency conversion
loss of USD1.2 million. The business has secured several longer term
contracts that should provide a platform for improved operational
performance going forward. The challenging trading conditions remain.
Retail Supply Chain increased revenue by 18%. Operating margins of 5,1%
are improving to historical levels. Profitability in the automotive part
business has improved significantly but the operating environment remains
highly competitive. The business rationalisation that started in the
prior financial period will contribute to improving performance. The home
improvement business, trading under the Mica brand, benefited from the
buoyant market conditions and improving member loyalty resulting in
growth of 21% in members` revenue.
Automotive Division
Dealerships achieved revenue growth of 25% ad operating margins of 3,3%.
The strong revenue growth is largely attributable to the commercial
vehicle importation initiative which continued to gain impetus.
Dealership activity for the second half of the financial year would be
affected by lower demand due to higher interest rates. The greenfield
businesses have good potential and are performing in line with
expectations.
Services Division
This division, which comprises group treasury and insurance, performed
according to expectations. The insurance business continued to show good
growth.
Prospects
Over the next six months, Super Group should continue to achieve real
earnings growth as the businesses benefit from the supportive
macroeconomic environment and strategic initiatives implemented.
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, no interim dividend has been
declared.
On behalf of the board
Larry Lipschitz Dheven Dharmalingam
Chief Executive Officer Group Financial Director
26 February 2007
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.
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.
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
P.O. 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 #Independent
Group Company Secretary
J. van Es
*The comparative results are in respect of the six-month period ended 30
September 2005.
Also available on the internet: www.supergrp.com
Date: 26/02/2007 14:42:57 Produced by the JSE SENS Department.
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