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Unaudited Interim Group Results for the six months ended 31 December 2012
AFRICAN & OVERSEAS ENTERPRISES LIMITED
Registration number: 1947/027461/06
Share codes: AOO - AON - AOVP
ISIN: ZAE000000485 - ZAE000009718 - ZAE000000493
UNAUDITED INTERIM GROUP RESULTS
for the six months ended 31 December 2012
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2012 2011 2012
% Unaudited Unaudited Audited
change R'000 R'000 R'000
Revenue (10.3) 256 743 286 245 541 310
Turnover (10.3) 251 973 280 940 530 593
Cost of sales (130 774) (127 770) (246 182)
Gross profit (20.9) 121 199 153 170 284 411
Employment costs 4.8 (51 777) (49 390) (97 915)
Occupancy costs 13.7 (42 154) (37 090) (76 447)
Depreciation and amortisation (8.5) (8 757) (9 568) (21 338)
Other operating costs (14.6) (32 794) (38 406) (66 296)
Rental income (8.7) 669 733 1 526
Royalties (7.6) 556 602 1 038
Operating (loss)/profit (165.1) (13 058) 20 051 24 979
Dividends received 12 13 13
Interest income 3 533 3 957 8 140
Interest expense (182) (174) (331)
(Loss)/profit before tax (140.7) (9 695) 23 847 32 801
Income tax expense 2 238 (8 112) (10 713)
(Loss)/profit for the period (147.4) (7 457) 15 735 22 088
Other comprehensive (loss)/income
Net change in fair value of
available-for-sale financial assets - - (52)
Total comprehensive (loss)/income
for the period (7 457) 15 735 22 036
(Loss)/profit attributable to:
Ordinary and 'N' ordinary shareholders (4 574) 8 179 11 246
Preference shareholders 165 151 168
(Loss)/profit attributable to
equity holders of the parent (4 409) 8 330 11 414
Non-controlling interest (3 048) 7 405 10 674
(Loss)/profit for the period (7 457) 15 735 22 088
Total comprehensive (loss)/income
attributable to:
Ordinary and 'N' ordinary shareholders (4 574) 8 179 11 217
Preference shareholders 165 151 168
(Loss)/profit attributable to
equity holders of the parent (4 409) 8 330 11 385
Non-controlling interest (3 048) 7 405 10 651
Total comprehensive (loss)/income for the period (7 457) 15 735 22 036
Reconciliation of headline earnings
(Loss)/profit attributable to equity holders (4 574) 8 179 11 246
Adjusted for:
(Profit)/loss from disposal of property,
plant and equipment (21) (44) 10
Impairment loss on equipment and shopfitting (56) - 848
Headline (loss)/earnings (4 651) 8 135 12 104
Basic (loss)/earnings per ordinary
share (cents) (155.9) (40.2) 71.8 98.8
Headline (loss)/earnings per
ordinary share (cents) (157.2) (40.8) 71.4 106.3
Weighted average number of equity
shares used in:
- (loss)/earnings per share (000's) 11 387 11 387 11 387
The company has no dilutionary instruments in issue.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at As at As at
31 December 31 December 30 June
2012 2011 2012
Unaudited Unaudited Audited
R'000 R'000 R'000
ASSETS
Non-current assets 99 591 86 243 90 263
Property, plant and equipment 80 516 75 161 74 910
Investment property 5 607 5 718 5 662
Intangible assets 5 835 1 061 4 510
Other investments 524 576 524
Deferred taxation 7 109 3 727 4 657
Current assets 216 188 238 215 238 727
Inventories 71 802 75 590 61 881
Trade and other receivables 3 160 11 642 11 700
Forward exchange contracts - 910 1 072
Income tax receivable 1 989 21 2 795
Cash and cash equivalents 139 237 150 052 161 279
Total assets 315 779 324 458 328 990
EQUITY AND LIABILITIES
Capital and reserves 263 750 274 119 280 751
Share capital 1 200 1 200 1 200
Share premium 6 076 6 076 6 076
Other reserves 535 538 535
Retained earnings 137 774 143 729 146 524
Non-controlling interest 118 165 122 576 126 416
Non-current liabilities 14 797 12 277 15 681
Post-retirement liability 3 100 3 944 3 101
Accrued operating lease liability 10 880 7 143 11 150
Deferred taxation 817 1 190 1 430
Current liabilities 37 232 38 062 32 558
Provisions - 420 -
Trade and other payables 35 984 36 535 32 534
Forward exchange contracts 1 200 - -
Income tax payable 48 1 107 24
Total equity and liabilities 315 779 324 458 328 990
Net asset value per share (cents) 2 316 2 407 2 466
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2012 2011 2012
Unaudited Unaudited Audited
R'000 R'000 R'000
Operating (loss)/profit before working
capital changes (3 424) 26 065 43 793
Working capital changes 2 967 (6 510) 4 874
Interest income 3 533 3 957 8 140
Interest expense (182) (174) (331)
Dividends paid (9 629) (8 558) (8 583)
Dividends received 12 13 13
Normal tax paid 3 (3 110) (10 258)
Secondary tax on companies paid - (1 073) (1 073)
Net cash (outflow)/inflow from operations (6 720) 10 610 36 575
Additions to property, plant and equipment (15 785) (14 958) (30 115)
Proceeds from disposal of property, plant
and equipment 205 119 229
Proceeds on disposal of discontinued operations - 5 412 5 412
Net cash outflow from investing activities (15 580) (9 427) (24 474)
Proceeds from delivery of shares by share trust 258 - 309
Net cash inflow from financing activities 258 - 309
Net (decrease)/increase in cash and
cash equivalents (22 042) 1 183 12 410
Cash and cash equivalents at the beginning of
the period 161 279 148 869 148 869
Cash and cash equivalents at the end of
the period 139 237 150 052 161 279
GROUP SEGMENTAL REPORTING
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2012 2011 2012
Unaudited Unaudited Audited
R'000 R'000 R'000
Revenue
Total external retail revenue 252 529 281 542 531 631
Retail segment revenue 253 994 282 533 533 815
Intersegment revenue earned (1 465) (991) (2 184)
Total external property revenue 669 733 1 526
Property segment revenue 2 608 2 695 5 388
Intersegment revenue earned (1 939) (1 962) (3 862)
Dividends received 12 13 13
Interest income 3 533 3 957 8 140
Total group revenue 256 743 286 245 541 310
Segment operating (loss)/profit
Retail (10 149) 22 069 28 681
Property (96) 869 1 287
Group services* (2 813) (2 887) (4 989)
Total group operating (loss)/profit (13 058) 20 051 24 979
Depreciation and amortisation
Retail 8 647 9 469 21 113
Property 110 99 225
Total depreciation and amortisation 8 757 9 568 21 338
Segment assets
Retail 215 079 217 312 214 762
Property 23 390 13 156 15 286
Group services* 77 310 93 990 98 942
Total segment assets 315 779 324 458 328 990
Segment liabilities
Retail 45 656 44 956 42 389
Property 2 489 2 184 2 099
Group services* 3 884 3 199 3 751
Total segment liabilities 52 029 50 339 48 239
Capital expenditure
Retail 7 347 13 867 26 991
Property 8 438 1 091 3 124
Total capital expenditure 15 785 14 958 30 115
* Group services include corporate costs.
OTHER INFORMATION
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2012 2011 2012
Unaudited Unaudited Audited
Capital commitments
Authorised but not yet contracted for (R'000) 29 769 34 075 56 685
Authorised and contracted for (less amounts
already incurred) (R'000) 5 154 - 7 955
Gross profit margin (%) 48.1 54.5 53.6
Operating (loss)/profit margin (%) (5.2) 7.1 4.7
Retail segment operating (loss)/profit margin (%) (4.0) 7.9 5.4
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at As at As at
31 December 31 December 30 June
2012 2011 2012
Unaudited Unaudited Audited
R'000 R'000 R'000
Share capital 1 200 1 200 1 200
Share premium 6 076 6 076 6 076
Other reserves
Opening balance 535 538 538
Share-based payment expense - - 26
Net change in fair value of available-for-sale
financial assets - - (29)
Closing balance 535 538 535
Retained earnings
Opening balance 146 524 139 194 139 194
(Loss)/profit for the period (4 409) 8 330 11 414
Preference dividends paid (165) (151) (168)
Ordinary dividends paid (3 986) (3 644) (3 644)
Net effect of take up of share options 142 - 171
Change in degree of control (332) - (443)
Closing balance 137 774 143 729 146 524
Non-controlling interest
Opening balance 126 416 119 934 119 934
(Loss)/profit for the period (3 048) 7 405 10 674
Preference dividends paid (8) (8) (17)
Ordinary dividends paid (5 643) (4 755) (4 754)
Net effect of take up of share options 116 - 138
Change in degree of control 332 - 443
Other - - (2)
Closing balance 118 165 122 576 126 416
Total capital and reserves 263 750 274 119 280 751
NOTES
1 Basis of preparation of financial statements
These condensed consolidated 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, 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 2012.
2 Unaudited results
These results have not been reviewed or reported on by the group's auditors.
These condensed consolidated financial statements have been prepared under the
supervision of Damian Johnson CA(SA) and were approved by the board of directors
on 6 March 2013.
3 Preference dividend
A dividend on the 6% cumulative participating preference shares for the six months
ended 31 December 2012 in the amount of R165 000 was declared on 5 December 2012
and paid on 7 January 2013.
COMMENTARY
The principal operating subsidiary Rex Trueform Clothing Company Limited reports
as follows:
"Group results
In line with the trading update dated 14 November 2012 the group had a disappointing
first half of the year mainly due to the poor performance of Queenspark. Revenue
decreased by 10.3% largely due to the decrease in retail turnover, whereas the
gross profit decreased by 20.9% during the period under review.
Operating expenses were limited to a 0.9% increase. The operating financial results
reduced from an operating profit of R20.8 million in the prior period to an operating
loss of R12.4 million for the period under review.
The loss for the period amounted to R6.8 million compared to a profit of
R16.6 million in the prior period. Accordingly the headline loss for the six months
amounted to 33.8 cents per share compared to a profit of 80.5 cents per share in the
corresponding period.
Retail
The Queenspark retail segment turnover decreased by 10.3% and the gross profit
margin decreased from 54.5% to 48.1% during the period. The impact of both the
lower sales and lower gross margin resulted in the gross profit decreasing from
R153.2 million to R121.2 million.
As the cost price of goods sold is impacted by the movement in exchange rates
the weaker rand negatively impacted the gross profit margin. The effects of the
movement in the exchange rate could not be passed on to consumers under the current
market conditions.
Property
In line with the business strategy the development of the Rex Trueform Office Park
in Salt River is currently under way. This segment incurred a small loss for the
period (R0.1 million) due to development costs. Capital expenditure of R8.4 million
has been spent on the Rex Trueform Office Park during the period under review.
Prospects
Retail
We anticipate that there will be a continued reduction in both sales and
profitability in the second half of the financial year when compared to the
corresponding period. As noted in the trading update dated 14 November 2012, the
business is implementing various strategic initiatives which should have a positive
impact in the medium term.
Property
The business will continue with the Rex Trueform Office Park development and
accordingly a further R20 million will be spent on the project during the six months
ending 30 June 2013.
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."
Signed on behalf of the board
ML Krawitz PE Shub
(Chairman) (Chief Executive Officer)
Cape Town
6 March 2013
AFRICAN & OVERSEAS ENTERPRISES LIMITED
(Incorporated in the Republic of South Africa - Reg No. 1947/027461/06)
("the company" or "the group")
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, PM Naylor*, RV Orlin* and RW Rees (UK)*
+ Non-executive * Independent non-executive
Registered office: Rex Buildings, 263 Victoria Road, Salt River, Cape Town, 7925
Secretary: SM Lawrence
Transfer secretaries: Computershare Investor Services (Pty) Limited,
70 Marshall Street, Johannesburg, 2001
Sponsor: Java Capital
Date: 07/03/2013 02:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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