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African & Overseas Enterprises Limited(South Africa) HY 2014 results

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African & Overseas Enterprises Limited(South Africa) HY 2014 results

African & Overseas Enterprises Limited(South Africa) HY 2014 results

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  • 1. Unaudited interim condensed consolidated group results for the six months ended 31 December 2013
  • 2. % change Six months ended 31 December 2013 Unaudited R’000 Six months ended 31 December 2012 Unaudited R’000 Year ended 30 June 2013 Audited R’000 Revenue 3.3 265 128 256 743 483 517 Turnover 3.6 261 138 251 973 474 438 Cost of sales (138 432) (130 774) (231 176) Gross profit 1.2 122 706 121 199 243 262 Employment costs (6.5) (48 406) (51 777) (104 281) Occupancy costs 9.7 (46 239) (42 154) (84 102) Depreciation and amortisation 5.5 (9 239) (8 757) (17 585) Other operating costs (18.7) (26 648) (32 794) (60 252) Rental income 112.1 1 419 669 1 599 Royalties 25.0 695 556 1 009 Operating loss (56.3) (5 712) (13 058) (20 350) Dividends received 16 12 13 Interest income 1 860 3 533 6 458 Interest expense (153) (182) (241) Loss before tax (58.9) (3 989) (9 695) (14 120) Income tax 921 2 238 3 380 Loss for the period (58.9) (3 068) (7 457) (10 740) Other comprehensive (loss)/income Net change in fair value of available-for-sale financial assets – – – Total comprehensive loss for the period (3 068) (7 457) (10 740) Loss attributable to: Ordinary and ‘N’ ordinary shareholders (2 153) (4 574) (6 659) Preference shareholders 165 165 181 (Loss)/profit attributable to equity holders of the parent (1 988) (4 409) (6 478) Non-controlling interest (1 080) (3 048) (4 262) Loss for the period (3 068) (7 457) (10 740) Total comprehensive loss attributable to: Ordinary and ‘N’ ordinary shareholders (2 153) (4 574) (6 659) Preference shareholders 165 165 181 Loss attributable to equity holders of the parent (1 988) (4 409) (6 478) Non-controlling interest (1 080) (3 048) (4 262) Total comprehensive (loss)/income for the period (3 068) (7 457) (10 740) Reconciliation of headline earnings Loss attributable to equity holders (2 153) (4 574) (6 659) Adjusted for: (Profit)/loss from disposal of property, plant and equipment and intangible assets (473) (21) 43 Impairment loss on equipment and shopfitting – (56) (170) Headline loss (2 626) (4 651) (6 786) Basic loss per ordinary share (cents) (52.9) (18.9) (40.2) (58.5) Headline loss per ordinary share (cents) (43.5) (23.1) (40.8) (59.6) Weighted average number of equity shares used in: – earnings per share (000’s) 11 387 11 387 11 387 The company has no dilutionary instruments in issue. CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE income
  • 3. As at 31 December 2013 Unaudited R’000 As at 31 December 2012 Unaudited R’000 As at 30 June 2013 Audited R’000 ASSETS Non-current assets 135 549 99 591 114 458 Property, plant and equipment 108 819 80 516 89 631 Investment property 5 496 5 607 5 551 Intangible assets 9 263 5 835 8 010 Other investments 524 524 524 Deferred taxation 11 447 7 109 10 742 Current assets 164 834 216 188 204 901 Inventories 77 039 71 802 88 231 Trade and other receivables 13 914 3 160 11 187 Forward exchange contracts 2 534 – 3 660 Income tax receivable 1 381 1 989 1 656 Cash and cash equivalents 69 966 139 237 100 167 Total assets 300 383 315 779 319 359 Equity and liabilities Capital and reserves 247 602 263 750 260 464 Share capital 1 200 1 200 1 200 Share premium 6 076 6 076 6 076 Other reserves 548 535 544 Retained earnings 129 553 137 774 135 692 Non-controlling interest 110 225 118 165 116 952 Non-current liabilities 17 257 14 797 16 123 Post-retirement liability 2 744 3 100 2 776 Accrued operating lease liability 12 608 10 880 11 168 Deferred taxation 1 905 817 2 179 Current liabilities 35 524 37 232 42 772 Provisions – – 3 077 Trade and other payables 35 417 35 984 39 631 Forward exchange contracts – 1 200 – Income tax payable 107 48 64 Total equity and liabilities 300 383 315 779 319 359 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW Six months ended 31 December 2013 Unaudited R’000 Six months ended 31 December 2012 Unaudited R’000 Year ended 30 June 2013 Audited R’000 Operating loss before working capital changes (1 671) (3 424) (2 971) Working capital changes 7 741 2 967 (18 225) Interest income 1 860 3 533 6 458 Interest expense (153) (182) (241) Dividends paid (9 629) (9 629) (9 827) Dividends received 16 12 13 Normal tax refunded/(paid) 260 3 (777) Net cash outflow from operations (1 576) (6 720) (25 570) Additions to property, plant and equipment (28 119) (15 785) (36 000) Additions to intangible assets (1 506) – – Proceeds from disposal of property, plant and equipment and intangible assets 1 000 205 195 Net cash outflow from investing activities (28 625) (15 580) (35 805) Proceeds from delivery of shares by share trust – 258 263 Net cash inflow from financing activities – 258 263 Net decrease in cash and cash equivalents (30 201) (22 042) (61 112) Cash and cash equivalents at the beginning of the period 100 167 161 279 161 279 Cash and cash equivalents at the end of the period 69 966 139 237 100 167
  • 4. Six months ended 31 December 2013 Unaudited R’000 Six months ended 31 December 2012 Unaudited R’000 Year ended 30 June 2013 Audited R’000 Revenue Total external retail revenue 261 833 252 529 475 447 Retail segment revenue 263 668 253 994 478 234 Intersegment revenue earned (1 835) (1 465) (2 787) Total external property revenue 1 419 669 1 599 Property segment revenue 3 540 2 608 5 527 Intersegment revenue earned (2 121) (1 939) (3 928) Dividends received 16 12 13 Interest income 1 860 3 533 6 458 Total group revenue 265 128 256 743 483 517 Segment operating loss Retail (3 772) (10 149) (14 754) Property (169) (96) (243) Group services* (1 771) (2 813) (5 353) Total group operating loss (5 712) (13 058) (20 350) Depreciation and amortisation Retail 9 001 8 647 17 308 Property 238 110 277 Total depreciation and amortisation 9 239 8 757 17 585 Segment assets Retail 212 506 215 079 217 474 Property 49 382 23 390 32 672 Group services* 38 495 77 310 69 213 Total segment assets 300 383 315 779 319 359 Segment liabilities Retail 45 373 45 656 51 333 Property 3 634 2 489 2 606 Group services* 3 774 3 884 4 956 Total segment liabilities 52 781 52 029 58 895 Capital expenditure Retail 12 783 7 347 19 030 Property 16 842 8 438 16 970 Total capital expenditure 29 625 15 785 36 000 * Group services include corporate costs. GROUP SEGMENTAL REPORTING OTHER INFORMATION Six months ended 31 December 2013 Unaudited R’000 Six months ended 31 December 2012 Unaudited R’000 Year ended 30 June 2013 Audited R’000 Capital commitments Authorised but not yet contracted for (R’000) 21 808 29 769 56 685 Authorised and contracted for (less amounts already incurred) (R’000) 8 613 5 154 7 955 Gross profit margin (%) 47.0 48.1 51.3 Operating loss margin (%) (2.2) (5.2) (4.3) Retail segment operating loss margin (%) (1.4) (4.0) (3.1)
  • 5. As at 31 December 2013 Unaudited R’000 As at 31 December 2012 Unaudited R’000 As at 30 June 2013 Audited R’000 Share capital 1 200 1 200 1 200 Share premium 6 076 6 076 6 076 Other reserves Opening balance 544 535 535 Share-based payment expense 4 – 9 Net change in fair value of available-for-sale financial assets – – – Closing balance 548 535 544 Retained earnings Opening balance 135 692 146 524 146 524 Loss for the period (1 988) (4 409) (6 478) Preference dividends declared/paid (165) (165) (181) Ordinary dividends paid (3 986) (3 986) (3 986) Net effect of take-up of share options – 142 145 Change in degree of control – (332) (332) Closing balance 129 553 137 774 135 692 Non-controlling interest Opening balance 116 952 126 416 126 416 Loss for the period (1 080) (3 048) (4 262) Preference dividends declared/paid (8) (8) (17) Ordinary dividends paid (5 643) (5 643) (5 643) Net effect of take-up of share options – 116 118 Change in degree of control – 332 332 Other 4 – 8 Closing balance 110 225 118 165 116 952 Total capital and reserves 247 602 263 750 260 464 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Notes 1 Basis of presentation of financial statements These condensed consolidated interim financial statements have been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the interpretations adopted by the International Accounting Standards Board, the South African Institute of Chartered Accountants’ Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and include disclosure as required by IAS 34: Interim Financial Reporting, the Companies Act of South Africa 2008 and the JSE Listings Requirements. The financial statements have been prepared using accounting policies that comply with IFRS and which are consistent with those applied in the preparation of the financial statements for the year ended 30 June 2013. 2 Unaudited results These results have not been reviewed or reported on by the group’s auditors. The condensed consolidated interim financial statements have been prepared under the supervision of Damian Johnson CA(SA) and were approved by the board of directors on 4 March 2014. 3 Preference dividend A dividend on the 6% cumulative participating preference shares for the six months ended 31 December 2013 in the amount of R165 000 was declared by the board of directors on 26 November 2013 and paid on 13 January 2014. Revenue increased by 3.3% to R265.1 million (31 December 2012: R256.7 million) Operating loss reduced by 56.3% to (R5.7 million) (31 December 2012: (R13.1 million)) Gross profit margin % decreased to 47.0% (31 December 2012: 48.1%) Headline loss per share reduced by 43.5% to (23.1 cents) (31 December 2012: (40.8 cents)) Earnings loss per share reduced by 52.9% to (18.9 cents) (31 December 2012: (40.2 cents)) Net asset value per share decreased by 6.1% to 2 174 cents (31 December 2012: 2 316 cents) Ordinary dividend per share paid amounted to 35 cents per share (31 December 2012: 35 cents) Highlights
  • 6. African & Overseas Enterprises Limited (Incorporated in the Republic of South Africa – Reg. No. 1947/027461/06) (“the group”) JSE share codes: AOO – AON – AOVP  ISIN: ZAE000000485 – ZAE000009718 – ZAE000000493 Directors: ML Krawitz† (Chairman), PE Shub (Chief Executive Officer) (alt ML Krawitz), CEA Radowsky, DS Johnson (FD), PM Naylor*, RV Orlin* and RW Rees (UK)*  † Non-executive  * Independent non-executive Registered office: Rex Buildings, 263 Victoria Road, Salt River, CapeTown, 7925 Secretary: AT Snitcher Transfer secretaries: Computershare Investor Services (Pty) Ltd, 70 Marshall Street, Johannesburg, 2001 Sponsor: Java Capital There were no changes to the board of directors during the year. “Group results The group’s performance improved for the six months ending 31 December 2013 when compared to the corresponding period mainly due to the improved performance of the retail segment. Turnover increased by 3.6% during the period, whereas the gross profit increased marginally by 1.2%. Initiatives introduced contributed to the reduction in operating expenses, which decreased by 3.6%. The reduction in costs and the slight increase in the gross profit were the main contributors to the improvement in the results for the six months ended 31 December 2013, whereby the loss reduced from R6.8 million (31 December 2012) to R2.4 million. Accordingly, headline earnings for the six months ended 31 December 2013 amounted to a loss of 15.9 cents per share compared to a loss of 33.8 cents per share in the corresponding period. Retail When compared to the corresponding comparable period the Queenspark retail segment turnover increased by 3.6% from R252 million (31 December 2012) to R261 million, whereas the gross margin decreased from 48.1% to 47%. The impact thereof resulted in the gross profit increasing by R1.5 million. The decrease in the gross profit margin percentage was partly influenced by the higher product costs resulting from the weaker Rand. The retail segment reduced its operating costs by 3.4% partly as a result of the reorganisation of this segment. The above resulted in the retail operating loss of R3.8 million (2012: R12.4 million). Property The development of the Rex Trueform Office Park is nearing completion. Capital expenditure of R36.5 million has been spent on the project to date, in line with the budget. Prospects Retail The difficult retail market trading conditions will continue to make trading challenging during the second half of the year. The business will continue to open new stores, where feasible, in order to increase its trading space. The implementation of the new ERP system should start to provide benefits during the 2015 financial year. Property It is anticipated that the major construction works in respect of the Rex Trueform Office Park will be complete by the end of the financial year, whereafter tenancy levels are expected to increase substantially. Any reference to the future financial performance included in the above commentary has not been reviewed or reported on by the company’s external auditors and does not constitute an earnings forecast.” Signed on behalf of the board ML Krawitz PE Shub (Chairman) (Chief Executive Officer) CapeTown 6 March 2013 COMMENTARY www.queenspark.com • www.rextrueform.com • www.rextrueformofficepark.com The principal operating subsidiary Rex Trueform Clothing Company Limited reports as follows: