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SHOPRITE HOLDINGS LIMITED (REGISTRATION NUMBER 05/7721/06)
PROFIT ANNOUNCEMENT FOR THE 12 MONTHS ENDED 30 JUNE 1998 * HEADLINE EARNINGS GROWTH: 42,7% * NUMBER OF OUTLETS: 545 CONSOLIDATED INCOME STATEMENT
AUDITED AUDITED
12 MNTHS 12 MNTHS TO % (R'000) 30/06/98 30/06/97 CHANGE TURNOVER 14 476 324 9 365 493 54,6 OPERATING PROFIT BEFORE EXCEPTIONAL ITEMS 236 655 200 045 18,3 EXCEPTIONAL ITEMS (2 028) 15 804
OPERATING PROFIT AFTER EXCEPTIONAL ITEMS 234 627 215 849
INVESTMENT INCOME 93 126 101 460 (8,2) FINANCE CHARGES 46 611 45 837 1,7 PROFIT BEFORE TAXATION 281 142 271 472
TAXATION 31 843 88 103 (64,2) PROFIT AFTER TAXATION 249 299 183 369
OUTSIDE SHAREHOLDERS' INTEREST 7 468 2 643
NET PROFIT 241 831 180 726
HEADLINE EARNINGS PER SHARE (CENTS) 46,1 32,3 42,7 EARNINGS PER SHARE (CENTS) AFTER
EXCEPTIONAL ITEMS 45,7 35,6
DISTRIBUTION TO SHAREHOLDERS (CENTS PER SHARE) 14,0 13,0
DIVIDEND COVER (TIMES) 3,3 2,5 NUMBER OF ORDINARY SHARES (000'S) USED FOR CALCULATION OF EARNINGS PER SHARE
(WEIGHTED AVERAGE*) 529 275* 508 277 CONSOLIDATED BALANCE SHEET
AUDITED AUDITED
(R'000) 30/06/98 30/06/97
ORDINARY SHAREHOLDERS, FUNDS 1 055 427 554 491
PREFERENCE SHARE CAPITAL 2 450 2 450
OUTSIDE SHAREHOLDERS INTEREST 21 601 7 569
INTEREST-BEARING DEBT 171 356 208 309
CAPITAL EMPLOYED 1 250 834 772 819
FIXED ASSETS 963 471 617 693
INVESTMENTS 364 550 297 683
CURRENT ASSETS 3 432 170 1 565 916
INVENTORIES 2 052 037 925 967
ACCOUNTS RECEIVABLE 1 336 190 284 085
BANK BALANCES AND CASH 43 943 355 864
TOTAL ASSETS 4 760 191 2 491 292
INTEREST-FREE LIABILITIES 3 509 357 1 708 473
EMPLOYMENT OF CAPITAL 1 250 834 772 819 CONSOLIDATED CASH FLOW STATEMENT
AUDITED AUDITED
12 MNTHS TO 12 MNTHS TO
(R1000) 30/06/98 30/06/97
CASH GENERATED/(UTILISED) BY OPERATIONS 91 020 (43 150)
NET INVESTMENT INCOME 24 732 30 932
DIVIDENDS RECEIVED 21 784 24 692
DIVIDENDS PAID (68 378) (33 537)
CASH FLOW FROM OPERATIONS 69 158 (21 063)
INVESTMENT ACTIVITIES (387 469) (198 072)
ACQUISITION OF FIXED ASSETS (317 910) (179 429)
OTHER INVESTMENT ACTIVITIES (69 559) (18 643)
NET CASH FLOW (318 311) (219 135)
FINANCING ACTIVITIES (133 571) (32 923)
PROCEEDS ON SHARE ISSUE 332 991 -
NET DEBT REPAID (466 562) (32 923)
MOVEMENT IN BANK BALANCES AND CASH (451 882) (252 058)
ACQUIRED THROUGH ACQUISITION OF OPERATIONS 139 961 -
NET MOVEMENT IN BANK BALANCES AND CASH (311 921) (252 058) SUPPLEMENTARY INFORMATION
AUDITED AUDITED
12 MNTHS TO 12 MNTHS TO
(R'000) 30/06/98 30/06/97
1. DEPRECIATION FOR THE PERIOD 138 761 85 406 2. DIVIDENDS RECEIVED (INCLUDED IN
INVESTMENT INCOME) 21 784 24 692
3. CAPITAL EXPENDITURE FOR THE PERIOD 317 910 179 429
30/06/98 30/06/97 4. COMMITMENTS FOR CAPITAL EXPENDITURE
CONTRACTED FOR 44 990 47 749 5. INVESTMENTS: UNLISTED - AT COST AND DIRECTORS'
VALUATION 361 279 294 412
LISTED - AT COST 3 271 3271
- AT MARKET VALUE 8 569 7 498
6. CURRENT LIABILITIES 3 554 628 1 743 593
7. NUMBER OF ORDINARY SHARES IN ISSUE 543 479 508 277
8. CONTINGENT LIABILITIES 683 4 883
9. NET ASSET VALUE PER SHARE (CENTS) 194 109 10. ACQUISITION OF OK BAZAARS 1929 LTD
(CENTS) 100 - COMMENTS ON THE RESULTS
1. IN COMPARING THE RESULTS FOR THE PERIOD UNDER REVIEW WITH THOSE OF THE PREVIOUS YEAR, IT MUST BE BORNE IN MIND THAT THE RESULTS FOR OK BAZAARS WERE INCORPORATED WITH THOSE OF SHOPRITE AS FROM 1 NOVEMBER 1997, AND THAT AN EXTRA TRADING WEEK WAS INCLUDED IN THE 1997 FINANCIAL YEAR.
2. IN LIGHT OF THE ABOVE-MENTIONED FACTORS, THE GROUP'S EXISTING OPERATIONS SHOWED SATISFACTORY GROWTH AS REGARDS BOTH TURNOVER AND OPERATING PROFIT, ESPECIALLY IF VIEWED AGAINST THE BACKGROUND OF THE PREVAILING LOW RATE OF INFLATION.
3. THE REDUCED INCOME FROM INVESTMENTS WAS DUE TO THE FACT THAT THE COMPANY USED SOME OF ITS CASH TO REDEEM INTEREST-BEARING DEBT INCURRED BY OK BAZAARS TO FINANCE HIRE-PURCHASE DEBTORS.
4. THE LARGE DECREASE IN TAX WAS DUE TO THE UTILISATION OF AVAILABLE TAX LOSSES IN THE GROUP. THE EXPECTED CALCULATED AVERAGE TAX RATE OVER THE FOLLOWING 5 YEARS IS 20%. IF THIS RATE WERE TO BE APPLIED TO THIS YEAR'S RESULTS, HEADLINE EARNINGS PER SHARE WOULD BE 41,5 CENTS, WHICH WOULD REPRESENT A GROWTH OF 28,5% ON THE 1997 EARNINGS.
5. THE INCREASE IN ASSETS AND LIABILITIES WAS THE DIRECT RESULT OF THE ACQUISITION OF OK BAZAARS. APART FROM THE UTILISATION OF CASH FOR REDEEMING INTEREST-BEARING DEBT, WHICH HAS ALREADY BEEN REFERRED TO, THERE WAS NO NOTEWORTHY CHANGE IN THE ASSETS AND LIABILITIES OF THE GROUP. PROSPECTS
THE BOARD IS CONFIDENT THAT THE EXISTING BUSINESS UNDERTAKINGS IN THE GROUP WILL CONTINUE TO SHOW REAL GROWTH IN THE NEW YEAR. TO MANAGE THE BUSINESS OF OK BAZAARS, OF WHICH MOST HAS BEEN INTEGRATED INTO THE GROUP, TO SATISFACTORY LEVELS OF PROFITABILITY, IS A COMPREHENSIVE AND IN MANY WAYS A DAUNTING PROCESS. IT, HOWEVER, OFFERS THE POTENTIAL OF SUBSTANTIAL BENEFITS FOR THE GROUP. DIVIDENDS
THE BOARD HAS DECLARED A FINAL DIVIDEND OF 7,5 CENTS PER SHARE, WHICH BRINGS THE TOTAL DIVIDEND FOR THE YEAR TO 14 CENTS (1997: 13 CENTS) PER SHARE. THE FINAL DIVIDEND WILL BE PAYABLE ON 25 SEPTEMBER 1998 TO SHAREHOLDERS REGISTERED IN THE COMPANY'S REGISTER OF SHAREHOLDERS AT THE CLOSE OF BUSINESS ON 11 SEPTEMBER 1998. BY ORDER OF THE BOARD C H WIESE J W BASSON
CHAIRMAN MANAGING DIRECTOR 25 AUGUST 1998 C/O WILLIAM DABS AND OLD PAARL ROADS BRACKENFELL MEMBER OF THE PEPKOR GROUP
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