African & Overseas Enterprises Limited FY 2013 results (South Africa)

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African & Overseas Enterprises Limited FY 2013 results (South Africa)

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African & Overseas Enterprises Limited FY 2013 results (South Africa)

  1. 1. AFRICAN & OVERSEAS ENTERPRISES LIMITED (Incorporated in the Republic of South Africa) (Registration No.: 1947/027461/06) ("the company" or "the group" or "African & Overseas") JSE share codes: AOO - AON - AOVP ISIN: ZAE000000485 - ZAE000009718 - ZAE000000493 REVIEWED CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2013 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION ASSETS Non-current assets Property, plant and equipment Investment property Intangible assets Other investments Deferred tax asset Current assets Inventories Trade and other receivables Forward exchange contracts Income tax receivable Cash and cash equivalents Total assets EQUITY AND LIABILITIES Capital and reserves Share capital Share premium Other reserves Retained earnings Non-controlling interest Non-current liabilities Post-retirement liability Accrued operating lease liability Deferred tax liability Current liabilities Provisions Trade and other payables Income tax payable Total equity and liabilities CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME % change Revenue (10.7%) Turnover (10.6%) Cost of sales Gross profit (14.5%) Employment costs Occupancy costs Depreciation and amortisation Other operating costs Rental income Royalties Operating (loss)/profit (181.5%) Dividends received Interest income Interest expense (Loss)/profit before tax (143.0%) Income tax expense (Loss)/profit for the year (148.6%) Other comprehensive (loss)/income Net change in fair value of available-for-sale financial assets Total comprehensive (loss)/income for the year (Loss)/profit attributable to: Ordinary and "N" ordinary shareholders of the parent Preference shareholders (Loss)/profit attributable to equity holders of the parent Non-controlling interest (Loss)/profit for the year Total comprehensive (loss)/income attributable to: Ordinary and "N" ordinary shareholders of the parent Preference shareholders (Loss)/profit attributable to equity holders of the parent Non-controlling interest 2013 (Reviewed) R'000 114 89 5 8 10 204 88 11 3 1 100 319 458 631 551 010 524 742 901 231 187 660 656 167 359 2012 (Audited) R'000 90 74 5 4 4 238 61 11 1 2 161 328 263 910 662 510 524 657 727 881 700 072 795 279 990 260 464 1 200 6 076 544 135 692 116 952 16 123 2 776 11 168 2 179 42 772 3 077 39 631 64 319 359 280 751 1 200 6 076 535 146 524 126 416 15 681 3 101 11 150 1 430 32 558 32 534 24 328 990 2013 (Reviewed) R'000 483 517 474 438 (231 176) 243 262 (104 281) (84 102) (17 585) (60 252) 1 599 1 009 (20 350) 13 6 458 (241) (14 120) 3 380 (10 740) 2012 (Audited) R'000 541 310 530 593 (246 182) 284 411 (97 915) (76 447) (21 338) (66 296) 1 526 1 038 24 979 13 8 140 (331) 32 801 (10 713) 22 088 (10 740) (52) 22 036 (6 659) 181 (6 478) (4 262) (10 740) 11 246 168 11 414 10 674 22 088 (6 659) 181 (6 478) (4 262) 11 217 168 11 385 10 651
  2. 2. Total comprehensive (loss)/income for the year Reconciliation of headline (loss)/earnings (Loss)/profit attributable to equity holders Adjusted for: Loss from disposal of property, plant and equipment Impairment (reversal)/loss on equipment and shopfitting Headline (loss)/earnings Basic (loss)/earnings per ordinary share (cents) (159.2%) Headline (loss)/earnings per ordinary share (cents) (156.1%) Dividend cover (based on headline (loss)/earnings) Weighted average number of equity shares on which earnings per share is based (000's) The company has no dilutionary instruments in issue. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITy Share capital Share premium Other reserves Opening balance Share-based payment expense Fair value adjustment of available-for-sale financial assets Closing balance Retained earnings Opening balance (Loss)/profit for the year Preference dividends paid Ordinary dividends paid Net effect of take-up of share options Change in degree of control Closing balance Non-controlling interest Opening balance (Loss)/profit for the year Preference dividends paid Ordinary dividends paid Net effect of take-up of share options Change in degree of control Other Closing balance Total capital and reserves CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Operating (loss)/profit before working capital changes Working capital changes Interest income Interest expense Dividends paid Dividends received Income tax paid Secondary tax on companies paid Net cash (outflows)/inflows from operating activities Additions to property, plant and equipment Additions to intangible assets Proceeds from disposal of property, plant and equipment Proceeds from disposal of discontinued operation Net cash outflows from investing activities Proceeds on delivery of shares by share trust Net cash inflows from financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year GROUP SEGMENTAL REPORTING Revenue Total external retail revenue Retail segment revenue Intersegment revenue earned Total external property revenue Property segment revenue (10 740) 22 036 (6 659) 11 246 43 (170) (6 786) 10 848 12 104 (58.5) 98.8 (59.6) (1.7) 106.3 3.0 11 387 11 387 2013 (Reviewed) R'000 1 200 6 076 2012 (Audited) R'000 1 200 6 076 535 9 544 538 26 (29) 535 146 524 (6 478) (181) (3 986) 145 (332) 135 692 139 194 11 414 (168) (3 644) 171 (443) 146 524 126 416 (4 262) (17) (5 643) 118 332 8 116 952 260 464 119 934 10 674 (17) (4 754) 138 443 (2) 126 416 280 751 2013 (Reviewed) R'000 (2 971) (18 225) 6 458 (241) (9 827) 13 (777) (25 570) (31 866) (4 134) 195 (35 805) 263 263 (61 112) 161 279 100 167 2012 (Audited) R'000 43 793 4 874 8 140 (331) (8 583) 13 (10 258) (1 073) 36 575 (26 253) (3 862) 229 5 412 (24 474) 309 309 12 410 148 869 161 279 2013 (Reviewed) R'000 2012 (Audited) R'000 475 447 478 234 (2 787) 1 599 5 527 531 631 533 815 (2 184) 1 526 5 388
  3. 3. Intersegment revenue earned Dividends received Interest income Total group revenue Segment operating (loss)/profit Retail segment (loss)/profit Property segment (loss)/profit Group services operating loss Total group operating (loss)/profit Depreciation and amortisation Retail Property Total group depreciation and amortisation Segment assets Retail Property Group services* Total group segment assets Segment liabilities Retail Property Group services* Total group segment liabilities Capital expenditure Retail Property Total group capital expenditure * Group services include corporate costs. OTHER INFORMATION Capital commitments Authorised - not contracted for Authorised - contracted for Gross profit margin Operating (loss)/profit margin Retail segment operating profit margin (3 928) 13 6 458 483 517 (3 862) 13 8 140 541 310 (14 754) (243) (5 353) (20 350) 28 681 1 287 (4 989) 24 979 17 308 277 17 585 21 113 225 21 338 217 32 69 319 474 672 213 359 214 15 98 328 762 286 942 990 51 2 4 58 333 606 956 895 42 2 3 48 389 099 751 239 19 030 16 970 36 000 26 991 3 124 30 115 32 361 3 048 51.3% (4.3%) (3.1%) 56 685 7 955 53.6% 4.7% 5.4% NOTES 1 REVIEW BY AUDITORS The condensed consolidated financial statements of African & Overseas for the year ended 30 June 2013 have been reviewed by the company's auditors, KPMG Inc. In their review report dated 5 September 2013 which is available for inspection at the company's registered office, KPMG Inc. state that their review was conducted in accordance with the International Standard on Review Engagements 2410 Review of Interim Information Performed by the Independent Auditor of the Entity, which applies to a review of consolidated preliminary financial information, and have expressed an unmodified conclusion on the condensed consolidated preliminary financial statements. 2 BASIS OF PREPARATION The condensed consolidated preliminary financial statements are prepared in accordance with the framework concepts and recognition and measurement principles of International Financial Reporting Standards and presented in accordance with the minimum content, including disclosures, prescribed by IAS 34 Interim Financial Reporting applied to year-end reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council, the requirements of the Companies Act of South Africa and the JSE Listings Requirements. These reviewed results have been prepared under the supervision of the group financial director, Damian Johnson CA(SA). 3 Accounting policies The accounting policies applied are consistent with those applied in the preparation of the group's annual financial statements for the year ended 30 June 2012. The integrated annual report containing a detailed review of the operations of the company together will be posted to shareholders towards the end of September 2013. The annual financial statements will be posted onto the company's website www.rextrueform.co.za at the end of September 2013. COMMENTARY The principle operating subsidiary Rex Trueform Clothing Company Limited ("Rex Trueform"), reports as follows: As anticipated in the interim report, the group's retail segment continued to find trading conditions difficult in the second six months. The group's revenue for the year decreased by 10.7% to R484.0 million (2012: R541.7 million) and the gross profit decreased by 14.5% to R243.3 million (2012:
  4. 4. R284.4 million). Group operating costs increased by 1.8% to R265.5 million (2012: R260.8 million) and included a R3.1 million retrenchment provision incurred as a result of the reorganising of the retail business. The above resulted in the group's operating profit decreasing from R26.6 million to a loss of R19.1 million. The loss after tax amounted to R9.5 million (2012: profit of R23.8 million). In line with performance, headline earnings per share decreased by 138.3% resulting in a headline loss per share of 47.4 cents, and the earnings per share decreased by 139.8% resulting in a loss per share of 46.3 cents. RETAIL The turnover in the Queenspark retail segment was R474.4 million (2012: R530.6 million), a decrease of 10.6% on last year. The gross profit margin decreased to 51.3% (2012: 53.6%) mainly due to product inflation pressures resulting from the weakening of the Rand. The retail segment operating profit decreased by 151.3% resulting in loss of R14.7 million for the year (2012: profit of 28.7 million). PROPERTY As noted in the interim report and in line with the business strategy, the development of the Rex Trueform Office Park in Salt River continued during the year. The segment made a small operating loss for the year (R0.2 million) mainly due to higher operating costs. Capital expenditure of R17.0 million was incurred in the segment during the current year, of which R16.6 million relates to the Rex Trueform Office Park. PROSPECTS Retail The outlook for retail sales continues to be impacted by the slow-down in the growth of economy, consumer debts levels, tight lending standards and rising living costs. Ongoing weakness in the Rand exchange rate against the US Dollar will continue to add inflationary pressure to the cost of merchandise. International brands continue to enter the local clothing retail market, intensifying industry competition. Against this back-drop, the company's retail segment will remain under pressure in the 2014 financial year. Certain strategic initiatives initiated during the year are expected to positively impact the year ahead. Further initiatives are planned and will be implemented during the forthcoming year. Property The main focus of this segment relates to the development of the Rex Trueform Office Park. The main construction activities are expected to be completed during the 2014 financial year, whereafter substantial tenant occupancy is expected." Dividend The board of directors is proposing to shareholders that the dividend on the ordinary and "N" ordinary shares be kept at 35 cents per share (2012: 35 cents per share). In terms of the Memorandum of Incorporation, 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 ordinary shares in any one financial year.Preference shareholders will be entitled to an extra dividend of 27.0% (54 cents per share) which will be included in the half-yearly payment in December 2013. Shareholders will be asked to consider and approve the directors' dividend proposal at the annual general meeting of the company to be held on 14 November 2013. An announcement detailing the terms of the dividend declaration will be made immediately following the annual general meeting. Any reference to the future financial performance included in this statement has not been reviewed and reported on by the company's external auditors and does not constitute an earnings forecast. African & Overseas Enterprises Limited (Incorporated in the Republic of South Africa) (Reg No.: 1947/027461/06) ("the company" or "the group" or "African & Overseas") JSE share codes: AOO - AON - AOVP ISIN: ZAE000000485 - ZAE000009718 - ZAE000000493 Registered office: Rex Buildings, 263 Victoria Road, Salt River, Cape Town, 7925 Directors: ML Krawitz+ (Chairman), PE Shub (Chief Executive Officer) (alt ML Krawitz), CEA Radowsky, DS Johnson, PM Naylor*, RV Orlin* and RW Rees (UK)* + Non-executive *Independent non-executive There were no changes to the board of directors during the year, other than the resignation of SM Lawrence as company secretary and the appointment of AT Snitcher in her stead with effect from 12 July 2013. Company secretary: AT Snitcher Transfer secretaries: Computershare Investor Services (Pty) Ltd, 70 Marshall Street, Johannesburg, 2001 Sponsor: Java Capital Websites: www.queenspark.com - www.rextrueform.com

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