Shoprite Holdings Ltd HY 2014 results

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Shoprite Holdings Ltd HY 2014 results

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Shoprite Holdings Ltd HY 2014 results

  1. 1. (Reg. No. 1936/007721/06) | (ISIN: ZAE 000012084) | (JSE Share code: SHP) (NSX Share code: SRH) (LuSE Share code: SHOPRITE) | (“the Group”) Unaudited Interim Results for the 6 months ended December 2013 Turnover increased 9.7% – from R46.572 billion to R51.090 billion. Trading profit was up 7.5% to R2.690 billion. Headline earnings per share rose 7.9% to 341.0 cents (2012: 315.9 cents). Dividend per share declared was 132 cents (2012: 123 cents) an increase of 7.3%.
  2. 2. 2 Condensed Consolidated Statement of Comprehensive Income Unaudited Unaudited Unaudited 6 months 6 months for the year % ended ended ended R’000 change Dec ‘13 Dec ‘12 Jun ‘13 Sale of merchandise 9.70% 51 089 765 46 572 295 92 457 126 Cost of sales 9.80% (40 675 090) (37 045 013) (73 156 023) Gross profit 9.31% 10 414 675 9 527 282 19 301 103 Other operating income 15.39% 1 176 072 1 019 239 2 607 466 Depreciation and amortisation 8.01% (688 067) (637 064) (1 335 722) Operating leases 18.15% (1 278 207) (1 081 861) (2 213 048) Employee benefits 5.94% (3 832 833) (3 618 041) (7 145 301) Other expenses 14.61% (3 101 932) (2 706 491) (5 822 395) Trading profit 7.46% 2 689 708 2 503 064 5 392 103 Exchange rate gains/(losses) -110.28% 4 254 (41 376) (3 843) Items of a capital nature -127.04% (2 437) 9 013 (30 882) Operating profit 8.94% 2 691 525 2 470 701 5 357 378 Interest received -10.92% 119 177 133 779 258 793 Finance costs 6.62% (216 125) (202 706) (429 967) Share of profit of associates and joint ventures -56.93% 3 779 8 774 5 414 Profit before income tax 7.79% 2 598 356 2 410 548 5 191 618 Income tax expense 9.42% (770 685) (704 309) (1 576 310) Profit for the period 7.12% 1 827 671 1 706 239 3 615 308 OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX 514.81% 104 518 17 000 537 727 Items that may be reclassified subsequently to profit or loss Foreign currency translation differences 464.37% 94 667 16 774 513 354 Share of foreign currency translation differences of associates and joint ventures 4258.85% 9 851 226 24 373 TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 12.13% 1 932 189 1 723 239 4 153 035 PROFIT ATTRIBUTABLE TO: Owners of the parent 7.43% 1 822 748 1 696 671 3 597 711 Non-controlling interest -48.55% 4 923 9 568 17 597 7.12% 1 827 671 1 706 239 3 615 308 TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the parent 12.46% 1 927 266 1 713 671 4 135 438 Non-controlling interest -48.55% 4 923 9 568 17 597 12.13% 1 932 189 1 723 239 4 153 035 Shoprite Holdings Ltd Unaudited Interim Results 2013
  3. 3. 3 Condensed Consolidated Statement of Financial Position Unaudited Unaudited Unaudited R’000 Dec ‘13 Dec ‘12 Jun ‘13 ASSETS Non-current assets 14 506 870 12 345 720 13 303 320 Property, plant and equipment Investment in associates and joint ventures Loans and receivables Deferred income tax assets Intangible assets Fixed escalation operating lease accruals 12 778 952 182 166 15 357 425 028 1 093 163 12 204 10 748 795 152 186 11 676 421 803 1 000 687 10 573 11 653 008 168 535 10 325 420 093 1 039 155 12 204 Current assets 25 402 805 22 057 714 20 119 543 Inventories Other current assets Loans and receivables Cash and cash equivalents 13 270 676 4 361 621 17 768 7 752 740 10 597 430 4 058 104 19 093 7 383 087 10 310 046 3 667 405 18 908 6 123 184 Assets held for sale Total assets 57 033 39 966 708 331 918 34 735 352 57 071 33 479 934 EQUITY AND LIABILITIES Total equity 16 021 720 13 477 430 15 252 270 Capital and reserves attributable to owners of the parent Non-controlling interest 15 960 785 60 935 13 417 265 60 165 15 184 076 68 194 Non-current liabilities 5 022 385 4 838 176 4 846 522 Borrowings Deferred income tax liabilities Provisions Fixed escalation operating lease accruals Other non-current liabilities 3 879 500 239 240 278 953 624 692 — 3 766 856 159 335 367 351 538 679 5 955 3 823 591 195 930 251 354 575 368 279 Current liabilities 18 922 603 16 419 746 13 381 142 16 065 893 88 856 264 997 13 240 118 133 457 7 567 21 257 922 34 735 352 18 227 664 33 479 934 Other current liabilities 18 638 453 Provisions 98 589 Bank overdrafts 185 561 Total liabilities 23 944 988 Total equity and liabilities 39 966 708
  4. 4. 4 Earnings per Share Unaudited Unaudited Unaudited 6 months 6 months for the year % ended ended ended R’000 change Dec ‘13 Dec ‘12 Jun ‘13 Profit attributable to owners of the parent 1 822 748 1 696 671 3 597 711 Re-measurements (9 016) 31 400 2 810 Profit on disposal of property Profit on disposal of assets held for sale Loss on disposal and scrapping of plant, equipment and intangible assets Impairment of property, plant and equipment and assets held for sale Impairment of goodwill Insurance claims paid (Profit)/loss on other investing activities Re-measurements included in equity-accounted profit of associates and joint ventures Income tax effect of re-measurements Headline earnings Earnings per share (cents) 7.41% Headline earnings per share (cents) 7.95% Ordinary dividend per share (cents) 9.46% Final/interim dividend per share paid (cents) 10.82% Interim/final dividend per share declared (cents) 7.32% Number of weighted average ordinary shares (‘000) used for calculation of earnings per share (1 422) — — (19 326) (7 598) (41 946) 2 724 10 283 34 041 — — 1 500 (365) — — — 30 30 607 13 585 — 2 193 373 (3) 518 (808) 1 824 750 340.6 341.0 347.0 215.0 132.0 2 719 1 690 374 317.1 315.9 317.0 194.0 123.0 (14 841) 3 614 270 672.3 675.4 338.0 123.0 215.0 535 143 535 143 535 143 Condensed Operating Segment Information Unaudited Unaudited Unaudited 6 months 6 months for the year % ended ended ended R’000 change Dec ‘13 Dec ‘12 Jun ‘13 Sale of merchandise Supermarkets RSA 7.56% 38 274 568 35 583 201 70 707 959 Supermarkets Non-RSA 28.08% 7 347 355 5 736 530 11 656 635 Furniture 10.50% 2 111 194 1 910 523 3 561 555 Other operating segments 0.44% 3 356 648 3 342 041 6 530 977 9.70% 51 089 765 46 572 295 92 457 126 Trading profit Supermarkets RSA 5.39% 2 184 682 2 072 980 4 514 085 Supermarkets Non-RSA 26.53% 322 044 254 524 599 856 Furniture 10.87% 134 022 120 887 130 652 Other operating segments -10.45% 48 960 54 673 147 510 7.46% 2 689 708 2 503 064 5 392 103 Total assets Supermarkets RSA 12.81% 27 121 702 24 042 901 22 291 102 Supermarkets Non-RSA 28.78% 7 101 063 5 513 980 6 327 461 Furniture 16.79% 3 496 963 2 994 141 3 021 476 Other operating segments 2.87% 2 246 980 2 184 330 1 839 895 15.06% 39 966 708 34 735 352 33 479 934 Shoprite Holdings Ltd Unaudited Interim Results 2013
  5. 5. 5 Condensed Consolidated Statement of Changes in Equity Unaudited Unaudited Unaudited 6 months 6 months for the year ended ended ended R’000 Dec ‘13 Dec ‘12 Jun ‘13 Balance at beginning of July 15 252 270 12 807 717 12 807 717 Total comprehensive income 1 932 189 1 723 239 4 153 035 Proceeds from deferred shares issued — 14 14 Dividends distributed to shareholders (1 162 739) (1 053 540) (1 708 496) Balance at end of December/June 16 021 720 13 477 430 15 252 270 Supplementary Information R’000 1. Capital commitments 2. Contingent liabilities 3. Net asset value per share (cents) 4. Total number of shares in issue (adjusted for treasury shares) % Unaudited Unaudited Unaudited change Dec ‘13 Dec ‘12 Jun ‘13 22.47% 1 572 104 1 283 651 1 736 798 277.27% 215 518 57 125 125 569 18.99% 2 983 2 507 2 837 0.00% 535 143 535 143 535 143 Condensed Consolidated Statement of Cash Flows Unaudited Unaudited Unaudited 6 months 6 months for the year ended ended ended R’000 Notes Dec ‘13 Dec ‘12 Jun ‘13 Cash flows from operating activities 3 390 675 1 187 521 1 121 394 Operating profit 2 691 525 2 470 701 5 357 378 Less: investment income (18 560) (16 838) (39 581) Non-cash items 1 843 702 844 293 1 568 468 Payments for cash settlement of share appreciation rights (20 960) (534 727) (534 727) Changes in working capital 2 1 190 268 284 879 (1 901 690) Cash generated from operations 4 685 975 3 048 308 4 449 848 Net interest paid (30 906) (9 908) (43 275) Dividends received 8 388 7 249 14 298 Dividends paid (1 161 026) (1 051 798) (1 707 017) Income tax paid (111 756) (806 330) (1 592 460) Cash flows utilised by investing activities 3 Cash flows from financing activities 4 Net movement in cash and cash equivalents Cash and cash equivalents at the beginning of the period Effect of exchange rate movements on cash and cash equivalents Cash and cash equivalents at the end of the period (1 946 017) 45 1 444 703 (1 984 195) 6 086 (790 588) (3 009 799) 13 052 (1 875 353) 6 115 617 7 900 677 7 900 677 6 859 7 567 179 8 001 7 118 090 90 293 6 115 617
  6. 6. 6 Condensed Consolidated Statement of Cash Flows (continued) Unaudited Unaudited Unaudited 6 months 6 months for the year ended ended ended R’000 Dec ‘13 Dec ‘12 Jun ‘13 Cash Flow Information 1. Non-cash items Depreciation of property, plant and equipment 753 281 628 971 Amortisation of intangible assets 71 980 69 059 Net fair value losses/(gains) on financial instruments 7 129 (3 257) Exchange rate (gains)/losses (4 254) 41 376 Profit on disposal of property (1 422) — Profit on disposal of assets held for sale — (19 326) Loss on disposal and scrapping of plant, equipment and intangible assets 2 724 10 283 Impairment of property, plant and equipment and assets held for sale — — Impairment of goodwill — — Movement in provisions (7 486) (19 459) Movement in cash-settled share-based payment accrual (30 387) 104 405 Movement in fixed escalation operating lease accruals 52 137 32 241 843 702 844 293 2. Changes in working capital Inventories (2 911 164) (1 933 879) Trade and other receivables (827 021) (841 573) Trade and other payables 4 928 453 3 060 331 1 190 268 284 879 3. Cash flows utilised by investing activities Investment in property, plant and equipment and intangible assets to expand operations (1 325 740) (1 729 401) Investment in property, plant and equipment and intangible assets to maintain operations (653 002) (326 320) Investment in assets held for sale — — Proceeds on disposal of property, plant and equipment and intangible assets 38 178 88 739 Proceeds on disposal of assets held for sale — 53 102 Other investing activities (3 880) (10 860) Acquisition of operations (1 573) (59 455) (1 946 017) (1 984 195) 4. Cash flows from financing activities Proceeds from deferred shares issued — 14 Increase in borrowing from First National Bank of Namibia Ltd 45 6 072 45 6 086 Shoprite Holdings Ltd Unaudited Interim Results 2013 1 332 567 142 010 (23 807) 3 843 (7 598) (41 946) 34 041 30 607 13 585 (92 389) 97 899 79 656 1 568 468 (1 441 485) (506 122) 45 917 (1 901 690) (2 584 204) (698 721) (3 602) 156 485 212 045 (9 297) (82 505) (3 009 799) 14 13 038 13 052
  7. 7. 7 The Group The Group increased turnover by 9.7% to R51.090 billion in an environment which, in South Africa, has remained ­ ifficult. d On this turnover it produced a trading profit of R2.690 billion, which was 7.5% higher than in the corresponding six ­ months. The trading margin of 5.3% was just marginally below the 5.4% of 2012. The Group’s operations in South Africa were affected by the disruptions to the economy by prolonged strikes in several sectors, continuing widespread unemployment and the lack in ­ isposable income among over-burdened middled ­­ and lower-income consumers struggling to make ends meet due to spiralling increases in living expenses. At the end of the reporting period the Group was trading from 1 525 own stores in 16 countries in Africa and on ­ islands in the Indian Ocean. Supermarkets RSA Supermarkets RSA, with its three retail brands Shoprite, Checkers and Usave, increased turnover by 7.6% to R38.275 billion­ which produced a trading profit that was 5.4% higher at R2.185 billion. Internal food inflation averaged 3.8% compared to the official food inflation figure of 5.2%. The  division, which is the Group’s core business, added a net of 47  new supermarkets for a total of 848 supermarkets at the end of December 2013. Consumers’ lack of disposable income was particularly noticeable in the results of Shoprite, with 382 supermarkets by far the largest of the Group’s brands, which increased turnover by 6.5%. During the six months much of the chain’s focus was on strengthening its price positioning through programmes such as a R20 million food subsidy campaign to assist low-income ­ onsumers. c Both Checkers’ supermarkets and hyper stores saw slower growth off its high base in an environment of intensified ­ competition. Much work continues to be done on improving product ranges and in-store experiences for customers. The brand has been extending its presence through the opening of both supermarkets (now 177) and hypers (now 30). Usave gained a net 16 new stores to bring its number of outlets to 259. The brand continued to grow market share and is building a growing following of price-conscious consumers in especially rural and semi-urban areas. ­ Supermarkets Non-RSA The Group’s non-RSA supermarkets continued their strong growth across the 15 countries in which it trades. Sales increased by 28.1% in rand terms, and by 14.9% in constant currencies. Growth was supported by the rand weakening more against the US dollar than did the currencies of some of the African countries in which the Group trades. During the reporting period a net 10 new stores were opened with a further 13 confirmed to start trading by the end of the c ­ urrent financial year. The Group now operates 163 supermarkets outside South Africa. Furniture Against the general trend, the Furniture Division achieved an overall sales increase of 10.5%, due mainly to strong growth in the dominant OK Furniture brand. The growth was achieved ­ otwithstanding deflation of 1.7% in major product catn egories and without sacrificing margins. Credit exposure was carefully monitored and arrears kept within acceptable levels. During the reporting period the total number of outlets increased to 350 with a further 20 expected to start trading by the end of June 2014. Other Operating Segments The OK Franchise division showed healthy turnover growth of 8.9% on existing business. After a period of ­ onsolidation c following the acquisition of the Metcash franchise business of 148 stores two years ago, membership has stabilised at 377, with 339 of these in South Africa and 38 in Namibia. The Group’s pharmacy division consists of MediRite, which at the end of December 2013 operated 150 pharmacies in Shoprite and Checkers stores, and Transpharm, a wholesale pharmaceutical company. MediRite increased sales by 18.2% ­ in South Africa with the number of prescriptions filled growing to 2.4 million. Computicket was affected by general market conditions and the fact that major overseas shows had become p ­ rohibitively expensive for local promoters due to the weakening of the rand against the American dollar.
  8. 8. 8 Dividend no 130 The board has declared an interim dividend of 132 cents (2013: 123 cents) per ordinary share, ­ ayable to shareholders on p Monday, 24 March 2014. The dividend has been declared out of income reserves. The last day to trade cum dividend will be Thursday, 13 March 2014. As from Friday, 14 March 2014, all trading of Shoprite Holdings Ltd shares will take place ex dividend. The  record date is Thursday, 20 March 2014. Share certificates may not be dematerialised or ­ematerialised r between Friday, 14 March 2014, and Thursday, 20 March 2014, both days inclusive. 1. Local dividend tax rate is 15%. 2. There are no STC credits available. 3. Net local dividend amount is 112.20 cents per share for shareholders liable to pay Dividends Tax and 132.00 cents per share for shareholders exempt from paying Dividends Tax. 4. The issued share capital of Shoprite Holdings Ltd as at the date of this declaration is 570 579 460 ordinary shares; and 5. Shoprite Holdings Ltd’s tax reference number is 9775/112/71/8. Accountability These condensed consolidated interim results are for information purposes only. These results are an extract from the condensed consolidated interim financial statements which are available on the Stock Exchange News Service (SENS) and are available for viewing on www.shopriteholdings.co.za. Any investment decisions by investors and/or shareholders should be based on consideration of the condensed consolidated interim financial statements published on SENS which have been prepared in accordance with International Financial Reporting Standard, IAS 34: Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and the requirements of the South African Companies Act. The accounting policies applied in the preparation of the condensed consolidated interim financial statements are in terms of International Financial Reporting Standards and are consistent with those applied in the previous ­ onsolidated c annual financial statements, with the exception of adopting the following new accounting standards: IFRS  10 Consolidated Financial Statements; IFRS 11 Joint Arrangements and IFRS 13 Fair Value Measurement. Where necessary, comparative figures have been restated for the application of IFRS 11. By order of the board. CH Wiese Chairman JW Basson Chief executive Cape Town 24 February 2014 Directorate and Administration Executive directors JW Basson (chief executive), CG Goosen (deputy managing director), B Harisunker, AE Karp, EL Nel, BR Weyers Executive alternate directors JAL Basson, M Bosman, PC Engelbrecht Non-executive director CH Wiese (chairman) Independent non-executive directors JJ Fouché, EC Kieswetter, JA Louw, ATM Mokgokong, JG Rademeyer, JA Rock Non-executive alternate director JD Wiese Registered office Cnr William Dabs and Old Paarl Roads, Brackenfell, 7560, South Africa. PO Box 215, Brackenfell, 7561, South Africa, Telephone: +27 (0)21 980 4000, Facsimile: +27 (0)21 980 4050, Website: www.shopriteholdings.co.za Transfer secretaries South Africa: Computershare Investor Services (Pty) Ltd, PO Box 61051, Marshalltown, 2107, South Africa, Telephone: +27 (0)11 370 5000, Facsimile: +27 (0)11 688 5238, Website: www.computershare.com Namibia: Transfer Secretaries (Pty) Ltd, PO Box 2401, Windhoek, Namibia Telephone: +264 (0)61 227 647, Facsimile: +264 (0)61 248 531 Company secretary PG du Preez Shoprite Holdings Ltd Unaudited Interim Results 2013 Zambia: ShareTrack Zambia, Plot 5 Katemo Road, Rhodes Park, Lusaka, Zambia PO Box 37283, Lusaka, Zambia, Telephone: +260 (0)211 236 783, Facsimile: +260 (0)211 236 785, Website: www.sharetrackzambia.com Sponsors South Africa: Nedbank Capital, PO Box 1144, Johannesburg, 2000, South Africa Telephone: +27 (0)11 295 8525, Facsimile: +27 (0)11 294 8525, Website: www.nedbank.co.za Namibia: Old Mutual Investment Group (Namibia) (Pty) Ltd, PO Box 25549, Windhoek, Namibia Telephone: +264 (0)61 299 3264, Facsimile: +264 (0)61 299 3528 Auditors PricewaterhouseCoopers Incorporated, PO Box 2799, Cape Town, 8000, South Africa Telephone: +27 (0)21 529 2000, Facsimile: +27 (0)21 529 3300

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