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STEERS HOLDINGS LIMITED
SUMMARISED AUDITED RESULTS FOR THE YEAR TO 28 FEBRUARY 1998 AND DIVIDEND
DECLARATION
- TURNOVER +32,2%
- PROFIT AFTER TAX +30,3%
- EARNINGS PER SHARE 17,5C
- DIVIDENDS PER SHARE 8C
THE GROUP'S AUDITED FINANCIAL RESULTS FOR THE TWELVE MONTHS ENDED 28 FEBRUARY
1998 ARE AS FOLLOWS:
CONSOLIDATED 1998 1997 %
INCOME STATEMENT R000'S R000'S CHANGE
TURNOVER 137 468 103 985 32,2
OPERATING PROFIT 14 442 12 113 19,2
NET INTEREST RECEIVED 700 171
PROFIT BEFORE TAXATION 15 142 12 284 23,3
TAXATION 5 209 4 724
PROFIT AFTER TAXATION 9 933 7 560 31,4
ATTRIBUTABLE TO
OUTSIDE SHAREHOLDERS (27) 40
ATTRIBUTABLE PROFIT 9 906 7 600 30,3
ORDINARY DIVIDENDS 4 640 3 936 17,9
RETAINED SURPLUS 5 266 3 664
EARNINGS PER SHARE 17,48 14,51 20,5
DIVIDEND PER SHARE 8,0 7,5 6,7
NUMBER OF SHARES
IN ISSUE ACTUAL 58 005 200 52 732 000
NUMBER OF SHARES
IN ISSUE
WEIGHTED AVERAGE 56 647 170 52 377 334
NET ASSET VALUE
PER SHARE 68,46 42,12 62,54
CONSOLIDATED
BALANCE SHEET
CAPITAL EMPLOYED
SHAREHOLDERS' FUNDS 39 709 22 212
LONG-TERM LIABILITIES 24 057 1 370
63 766 23 582
EMPLOYMENT OF CAPITAL
FIXED ASSETS AND
TRADEMARKS 44 244 15 572
OTHER 1 401 -
DEFERRED TAX 13 (285)
CURRENT ASSETS 38 458 21 745
TOTAL ASSETS 84 116 37 032
CURRENT LIABILITIES 20 350 13 450
63 766 23 582
CONSOLIDATED
CASH FLOW STATEMENT
OPERATING PROFIT BEFORE
WORKING CAPITAL CHANGES 17 374 13 519
WORKING CAPITAL CHANGES (6 202) (4 300)
CASH GENERATED BY
OPERATIONS 11 172 9 219
NET INTEREST RECEIVED 700 171
TAXATION PAID (5 128) (5 714)
DIVIDENDS PAID (4 369) (3 244)
NET CASH INFLOW FROM
OPERATING ACTIVITIES 2 375 432
CASH FLOW FROM
INVESTING ACTIVITIES (11 007) (2 750)
CASH FLOW FROM
FINANCING ACTIVITIES 13 743 550
INCREASE IN CASH
RESOURCES 5 111 (1 768)
CASH RESOURCES AT
BEGINNING OF YEAR 2 017 3 785
CASH RESOURCES AT
END OF YEAR 7 128 2 017
COMMENTS
FINANCIAL RESULTS
THE EFFORTS OF ALL THE DEPARTMENTS WITHIN THE STEERS ORGANISATION HAVE
CONTRIBUTED TO MAKE THE ENTIRE OPERATION A VIABLE AND VIBRANT ONE PRODUCING YET
AGAIN AN EXCELLENT GROUP PERFORMANCE FOR THE FINANCIAL YEAR TO 28 FEBRUARY 1998
THIS YEAR'S TURNOVER INCREASED BY 32,2% ACHIEVING AN INCREASE IN EARNINGS OF
30,3%.
THE ADDITIONAL NUMBER OF SHARES IN ISSUE RESULTED IN EPS OF 17,48C (AN INCREASE
OF 20,5%). THESE ADDITIONAL SHARES WERE AS A RESULT OF THE ISSUE OF SHARES FOR
CASH DURING THE YEAR.
THE DIVIDEND COVER WAS INCREASED SLIGHTLY THIS YEAR WITH A VIEW TO SETTING THIS
AT A MORE PRUDENT LEVEL AND ALSO TO ENABLE THE COMING EXPANSION TO BE MORE
COMFORTABLE. THE DIVIDENDS DECLARED FOR THE YEAR TOTALLED 8C (1997-7,5C).
FRANCHISE AND RETAIL OPERATIONS
DURING THE YEAR UNDER REVIEW 56 NEW OUTLETS WERE ESTABLISHED IN THE GROUP.
THESE COMPRISED 36 STEERS AND 20 DEBONAIRS.
12 STEERS AND 9 DEBONAIRS OUTLETS WERE REFURBISHED DURING THE YEAR WITH A VIEW
TO RENEWING THE LIFE OF THESE OUTLETS.
EXPANSION INTO AFRICA CONTINUES AT A STRONG RATE AND THE PERFORMANCE OF THOSE
STORES OPENED TO DATE HAVE EXCEEDED ALL EXPECTATIONS. THE GROUP'S INTERNATIONAL
EXPANSION PROVIDES A HEDGE AGAINST FURTHER WEAKENING OF THE RAND THUS
POSITIONING THE GROUP MORE FIRMLY AS AN INTERNATIONAL PLAYER.
THE TURNOVER OF THE GROUP'S RETAIL SAUCES INCREASED BY 40% THIS YEAR. BESIDES
INCREASED LOCAL DEMAND, THE LISTING OF STEERS SAUCES IN MAJOR U.K. AND EUROPEAN
CHAIN STORES WILL ADD A FURTHER AVENUE OF GROWTH FOR THIS SECTOR OF THE GROUP'S
BUSINESS.
THE ACQUISITION OF KWAZULU NATAL REGIONAL OPERATION WHICH INCLUDED THE
DEBONAIRS FRANCHISE BECAME EFFECTIVE FROM
1 SEPTEMBER 1997. THIS HAS BEEN VERY WELL ABSORBED INTO THE GROUP AND THE
DEBONAIRS FRANCHISE IS PROGRESSING AT THE EXPECTED RATE.
THE PURCHASE PRICE FOR THIS ACQUISITION IS BASED ON FUTURE WARRANTED PROFITS
WITH MINIMUM AND MAXIMUM PARAMETERS. THE FINAL PURCHASE PRICE IS THEREFORE
UNKNOWN. IN THE FINANCIAL STATEMENTS WE HAVE TAKEN A CONSERVATIVE VIEW AND
ACCOUNTED AS FAR AS POSSIBLE FOR THE MAXIMUM PAYABLE OVER THE 3 YEAR PERIOD.
OUR MARKETING EFFORTS WERE MAINTAINED AT CONSISTENTLY HIGH LEVELS, WITH FOCUS
BEING PLACED ON PRODUCT DEVELOPMENT AND MARKET PENETRATION.
THE INTRODUCTION OF OUR NEW MENU WHICH INCLUDES PERMANENT COMBINATION MEALS,
HAS BEEN A TURNING POINT FOR STEERS, NOT ONLY BY POSITIONING US AS BEING
INNOVATIVE AND LEADERS IN THE FAST FOOD CATEGORY BUT ALSO BY INCREASING THE
SPEND PER HEAD.
PROSPECTS
THE STEERS BRAND IS ATTAINING A LEVEL OF ACCEPTANCE WHICH HAS BEEN ENHANCED BY
THE COMPARISON TO THE INTERNATIONAL COMPETITION THAT HAS ARRIVED THUS FAR.
THE NEW BUSINESS DEPARTMENT IS STILL EXPERIENCING A STRONG DEMAND FOR
FRANCHISES FROM PERSONS WISHING TO BE IN BUSINESS ON THEIR OWN.
THERE ARE STILL UNCATERED FOR AREAS IN SOUTH AFRICA AND MORE RECENTLY SOUTHERN
AFRICA AS WELL AS AFRICA NORTH OF THE EQUATOR HAVE HAD A TASTE OF STEERS AND
THEY LOVED IT.
THE RECENT BREAKTHROUGHS ACHIEVED IN THE MARKET PLACE BY THE GROUP'S RETAIL
SAUCES ADD A VERY EXCITING DIMENSION TO THE FUTURE PROSPECTS OF THE OVERALL
BUSINESS AS DOES THE COMFORTABLE INCLUSION OF THE DEBONAIRS BRAND WITHIN THE
GROUP'S OFFERINGS.
WITH ALL THESE POSITIVE FACTORS IN PLACE, SUBJECT TO THE DOMESTIC ECONOMY
HOLDING UP FROM FURTHER WEAKNESS, THE GROUP'S PROFIT PERFORMANCE SHOULD BE
SUSTAINED.
J. L. HALAMANDRES P. HALAMANDARIS
CHIEF EXECUTIVE OFFICER CHAIRMAN
DECLARATION OF FINAL DIVIDEND
NOTICE IS HEREBY GIVEN THAT A FINAL DIVIDEND NO. 11 OF 4C PER ORDINARY SHARE
AND 4C PER "N" ORDINARY SHARE HAS BEEN DECLARED FOR THE YEAR ENDED 28 FEBRUARY
1998 TO ALL SHAREHOLDERS REGISTERED ON 29 MAY 1998. THE DIVIDEND WILL BE
PAYABLE ON OR ABOUT 5 JUNE 1998.
ON BEHALF OF THE BOARD
D. H. PAPPADOPOULOS
MIDRAND
14 MAY 1998
STEERS REGISTERED OFFICE
478 JAMES CRESCENT
HALFWAY HOUSE
MIDRAND, 1685
MEDIA RELEASE - STEERS
STEERS - EXCELLENT ANNUAL RESULTS AND MAJOR EXPANSION PLANS
FAST FOOD FRANCHISE GROUP STEERS HOLDINGS' RAPID STORE EXPANSION PROGRAMME AND
ITS ACQUISITION OF THE DEBONAIRS PIZZA CHAIN, HELPED IT GROW ITS ATTRIBUTABLE
PROFIT BY 30,3% TO R9,9 MILLION IN THE YEAR TO FEBRUARY.
EARNINGS A SHARE ARE 20,5% HIGHER AT 17,48C ON THE BACK OF A HIGHER NUMBER OF
SHARES IN ISSUE BECAUSE OF STEPS TAKEN LAST YEAR TO RAISE R12 MILLION IN CASH.
DESPITE HEIGHTENED INTERNATIONAL COMPETITION, TURNOVER ROSE 32,2% TO R137,5
MILLION, THANKS TO THE OPENING OF 56 NEW OUTLETS AND A 40% JUMP IN RETAIL SALES
OF SAUCES AND SPICES.
THE ACQUISITION OF THE KWAZULU NATAL OPERATIONS, WHICH INCLUDE DEBONAIRS, TOOK
EFFECT FROM SEPTEMBER 1, 1997, AND HAS ADDED AN EXTRA 5% TO THE YEAR'S
ATTRIBUTABLE PROFITS.
STEERS HOLDINGS CHIEF EXECUTIVE JOHN HALAMANDRES SAYS THESE OPERATIONS HAVE
BEEN SUCCESSFULLY ABSORBED INTO THE GROUP AND DEBONAIRS IS BEING RAPIDLY
EXPANDED FROM ITS STRONGHOLD IN KWAZULU NATAL INTO A NATIONAL CHAIN.
THE NUMBER OF ITS STORES HAS ALMOST DOUBLED SINCE THE TAKE-OVER TO 43 AT
PRESENT, USING EXISTING INFRASTRUCTURE. TWO OUTLETS HAVE ALSO BEEN OPENED IN
ZIMBABWE AND MORE ARE PLANNED FOR KENYA AND ZAMBIA.
BECAUSE THE PURCHASE PRICE OF THE KWAZULU NATAL OPERATIONS IS BASED ON FUTURE
WARRANTED PROFITS, THE FINAL PRICE OF THE DEAL IS UNKNOWN. AS A RESULT STEERS
HOLDINGS HAS TAKEN A CONSERVATIVE VIEW AND HAS, AS FAR AS POSSIBLE, ACCOUNTED
FOR THE MAXIMUM AMOUNT IN THIS YEAR'S FINANCIAL STATEMENTS.
THE GROUP HAS DECLARED A DIVIDEND OF 8C (7,5C) A SHARE FOR THE YEAR, AFTER
RAISING ITS DIVIDEND COVER TO A MORE PRUDENT 2,2 (1,9) TIMES TO ACCOMMODATE ITS
FUTURE GROWTH PLANS.
INDEED, HALAMANDRES SAYS, STEERS HOLDINGS SHOULD EXPERIENCE ITS BIGGEST YEAR OF
EXPANSION YET, WITH AT LEAST 70 NEW OUTLETS POISED TO OPEN IN SOUTH AFRICA IN
THE CURRENT YEAR.
THE GROUP IS ALSO SET TO EXPAND ITS PRESENCE IN ZIMBABWE AND KENYA AND WILL
SOON LAUNCH IN ZAMBIA, GHANA, MOZAMBIQUE AND ANGOLA. IT HAS JUST OPENED ITS
FIRST STORE IN CAIRO AND WILL LAUNCH IN PORTUGAL LATER THIS MONTH.
AGREEMENTS FOR ETHIOPIA, TANZANIA, UGANDA AND NIGERIA ARE CURRENTLY BEING
FINALISED.
HALAMANDRES SAYS: "OUR MOVES INTO AFRICA HAVE EXCEEDED ALL EXPECTATIONS. WE
CURRENTLY HAVE 18 STORES OPERATING OUTSIDE SOUTH AFRICA, BUT SHOULD HAVE CLOSE
TO 40 BY THE END OF THIS FINANCIAL YEAR. THIS WILL PROVIDE US WITH A HEDGE
AGAINST ANY FURTHER DETERIORATION IN THE RAND AND SHOULD POSITION US MORE
FIRMLY AS AN INTERNATIONAL PLAYER."
ON THE LOCAL FRONT, SEVERAL POSITIVE FACTORS ARE EXPECTED TO ENHANCE STEERS'
EARNINGS IN THE CURRENT YEAR.
ONE IS ITS NEW AND INNOVATIVE MENU, WHICH EMPHASISES COMBINATION MEALS. IT HAS
ALREADY BEEN TESTED IN 10 STORES AND IS EXPECTED TO BOOST THE "SPEND PER HEAD"
AT ALL OUTLETS.
ANOTHER IS AN ANTICIPATED JUMP IN RETAIL SALES OF SAUCES AND SPICES NOW THAT
THESE PRODUCTS GRACE THE SHELVES OF CHAINS LIKE TESCOS IN BRITAIN AND
VASILOPOULOUS, GREECE'S LARGEST SUPERMARKET GROUP.
TO CATER FOR THIS INCREASED DEMAND, THE GROUP IS CURRENTLY TRIPLING THE SAUCE
AND SPICE PRODUCTION CAPACITY AT ITS MIDRAND FACTORY.
STEERS' PILOT "DRIVE-THROUGH" STORE IN ALBERTON HAS PROVED A HIT, WITH A RECORD
WAITING TIME OF 62 SECONDS, AND 10 MORE OF THESE OUTLETS WILL OPEN THEIR DOORS
SHORTLY.
IN ADDITION, SIX FAST LANE OUTLETS - A SCALED-DOWN VERSION OF THE CONVENTIONAL
STEERS STORE - HAVE BEEN SUCCESSFULLY LAUNCHED AROUND THE COUNTRY AND AT LEAST
10 MORE SHOULD FOLLOW LATER THIS YEAR.
AS PART OF A DEAL WITH KAGISO KHULANI FOOD SERVICES, THE FIRST COMPANY CANTEEN,
ONE AT BMW'S HEAD OFFICE IN MIDRAND, WILL BE CONVERTED TO THE STEERS BRAND AND
THE POTENTIAL FOR A FURTHER 100 CONVERSIONS EXISTS.
HALAMANDRES BELIEVES THAT AS LONG AS THERE IS NO WEAKENING IN THE DOMESTIC
ECONOMY, THESE OPPORTUNITIES WILL ENABLE STEERS HOLDINGS TO SUSTAIN ITS PROFIT
PERFORMANCE IN THE CURRENT FINANCIAL YEAR.
ISSUED ON BEHALF OF:
STEERS HOLDINGS
478 JAMES CRESCENT MIDRAND
CONTACT:
MR JOHN HALAMANDRES
MR NICK GALATIS
TEL : (011) 315 3000 FAX : (011) 315 0059
OR
FASEDEMI NEWMAN LEO BURNETT
LEO BURNETT HOUSE 3 SIMBA ROAD SUNNINGHILL SANDTON
CONTACT:
MS JENNI NEWMAN
TEL : (O11) 235 4300 FAX : (011) 235 4301 CELL : 082 882 8888
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