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(REGISTRATION NUMBER 86/01503/06)
("CASHBUILD" OR "THE GROUP")
AUDITED GROUP FINANCIAL RESULTS FOR THE 52 WEEKS ENDED 26 JUNE 1999
HIGHLIGHTS:
* 21,2% INCREASE IN HEADLINE EARNINGS
* 38,2% INCREASE IN HEADLINE EARNINGS ON COMPARABLE BUSINESS
* 6,2% INCREASE IN TURNOVER ON COMPARABLE BUSINESS
* DIVIDEND COVER MAINTAINED
THE AUDITED GROUP FINANCIAL RESULTS FOR CASHBUILD AND ITS SUBSIDIARIES ARE AS
FOLLOWS:
SUMMARISED GROUP INCOME STATEMENT
PROFORMA
FIGURES
EXCLUDING
SUBSIDIARY
AUDITED AUDITED DISPOSED
JUNE JUNE CHANGE JUNE CHANGE
R000 1999 1998 % 1998 %
TURNOVER 924271 910217 1,5 870679 6,2
OPERATING PROFIT BEFORE
EXCEPTIONAL ITEM 19896 20788 (4,3) 14865 33,8
EXCEPTIONAL ITEM 3110 - -
OPERATING PROFIT AFTER
EXCEPTIONAL ITEM 16786 20788 (19,2) 14865 12,9
NET FINANCING CHARGES (3714) (6350) (41,5) (2182) 70,2
INCOME BEFORE TAXATION 13072 14438 (9,5) 12683 3,1
TAXATION (4047) (4596) (11,9) (4186) (3,3)
INCOME AFTER TAXATION 9025 9842 (8,3) 8497 6,2
OUTSIDE SHAREHOLDERS'
INTEREST (1484) (1152) 28,8 (698) 112,6
INCOME ATTRIBUTABLE TO
SHAREHOLDERS 7541 8690 (13,2) 7799 (3,3)
NUMBER OF SHARES IN ISSUE
(000) 23225 23225 - 23225 -
EARNINGS PER SHARE (CENTS) 32,5 37,4 (13,2) 33,6 (3,3)
HEADLINE EARNINGS PER SHARE
(CENTS) 45,2 37,3 21,2 32,7 38,2
DIVIDEND PER SHARE (CENTS) 15,0 12,0 25
DIVIDEND COVER (TIMES) 2,1 3,1
DIVIDEND COVER BASED ON HEADLINE
EARNINGS (TIMES) 3,0 3,1
DEPRECIATION 10633 12480 11574
SUMMARISED GROUP BALANCE SHEET
AUDITED AUDITED
JUNE JUNE
R000 1999 1998
CAPITAL EMPLOYED
SHAREHOLDERS' FUNDS 71735 67678
OUTSIDE SHAREHOLDERS' INTEREST 5230 4241
INTEREST-BEARING DEBT 14926 6396
91891 78315
EMPLOYMENT OF CAPITAL
FIXED ASSETS 53534 61285
UNLISTED INVESTMENTS 3045 6454
CURRENT ASSETS 211133 191554
TOTAL ASSETS 267712 259293
INTEREST-FREE LIABILITIES 175420 177489
DEFERRED TAXATION 401 3489
91891 78315
CAPITAL EXPENDITURE 5894 15889
NET ASSET VALUE PER SHARE (CENTS) 3,31 3,10
CAPITAL COMMITMENTS 2250 3000
CONTINGENT LIABILITIES 12252 12252
SUMMARISED GROUP CASH FLOW STATEMENT
AUDITED AUDITED
JUNE JUNE
R000 1999 1998
CASH FLOWS FROM OPERATING
ACTIVITIES 11683 56339
CASH FLOWS FROM INVESTING
ACTIVITIES (2416) (12088)
CASH FLOWS FROM FINANCING
ACTIVITIES (1470) (39256)
NET INCREASE IN CASH
AND CASH EQUIVALENTS 7797 4995
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 9790 4795
CASH AND CASH EQUIVALENTS AT
END OF PERIOD 17587 9790
COMMENTARY
INTRODUCTION
CASHBUILD LIMITED AND ITS SUBSIDIARIES HAVE CONCLUDED THE FINANCIAL YEAR ENDING
26 JUNE 1999 WITH A SOLID PERFORMANCE. THE INTERIM REPORT NOTED VERY DIFFICULT
TRADING CONDITIONS WHICH HAVE PERSISTED FOR THE REMAINDER OF THE FINANCIAL
YEAR. THESE SUBDUED CONDITIONS IMPACTED ON TRADING MARGINS AND THE AVERAGE
TRANSACTIONS SPEND. FURTHER, COMPETITOR ACTIVITY MANIFESTED ITSELF THROUGH
AGGRESSIVE PRICING TACTICS.
THE STEADY IMPROVEMENTS IN EVIDENCE IN THE FIRST SIX MONTHS OF THE FINANCIAL
YEAR IN THE KEY AREAS OF OUR BUSINESS HAVE CONTINUED. THESE AREAS INCLUDE,
INTER ALIA, THE INCREASE IN CUSTOMER TRANSACTION VOLUMES, MARKET DOMINANCE IN
KEY PRODUCT LINES, AND IMPROVED STAFF PRODUCTIVITY.
THE COMPARATIVE FIGURES INCLUDE THE RESULTS OF CREDITBUILD (PTY) LIMITED
("CREDITBUILD") WHICH WAS SUBSEQUENTLY DISPOSED OF ON 1 MARCH 1998. THE
RATIONALE FOR DISPOSING OF CREDITBUILD WAS TO ENABLE THE GROUP TO FOCUS ON THE
CASH CUSTOMER AND TO PROVIDE RELIEF FROM FINANCING A GROWING DEBTORS' BOOK.
THE PROFORMA FIGURES FOR THE PREVIOUS FINANCIAL YEAR EXCLUDE THE CREDITBUILD
FINANCIAL RESULTS AND HAVE BEEN PROVIDED TO FACILITATE COMPARISON WITH THE
CURRENT YEAR RESULTS.
COMMENTS ON THE FINANCIAL PERFORMANCE
THE GROUP HAS GROWN HEADLINE EARNINGS PER SHARE 21,2% FROM 37,3 CENTS TO 45,2
CENTS IN THE 52 WEEKS UNDER REVIEW OVER THE CORRESPONDING PERIOD IN THE
PREVIOUS YEAR. ATTRIBUTABLE EARNINGS HOWEVER, FELL BY R1,1 MILLION OR 13,2%
LARGELY AS A RESULT OF THE EXCEPTIONAL ITEM. THIS EXCEPTIONAL ITEM REFERS TO
THE DECLINE OF R3,1 MILLION IN THE CARRYING VALUE OF THE LOAN TO THE CASHBUILD
SHARE INCENTIVE SCHEME. WHEN EXCLUDING THE RESULTS OF CREDITBUILD FROM THE
PREVIOUS YEAR COMPARATIVE THE ATTRIBUTABLE EARNINGS DECLINED BY 3,3%. TURNOVER
ROSE 1,5% BUT WHEN EXCLUDING THE IMPACT OF CREDITBUILD IS A PLEASING INCREASE
OF 6% OR R53,6 MILLION. THIS INCREASE, COMBINED WITH THE OPERATING MARGIN
IMPROVEMENT, YIELDED AN INCREASE ON THE PRIOR YEAR IN OPERATING PROFIT BEFORE
EXCEPTIONAL ITEM OF 33,8% ON COMPARABLE BUSINESS. THIS GAIN IN OPERATING INCOME
REFLECTS THE PROGRESS IN IMPROVING THE FINANCIAL HEALTH OF CASHBUILD.
THE LEVEL OF CAPITAL EMPLOYED IN THE BUSINESS HAS GROWN BY SOME R14 MILLION.
CASH FLOWS REMAIN SATISFACTORY.
PROSPECTS
WE BELIEVE THAT THE DEPRESSED TRADING ENVIRONMENT WILL CONTINUE FOR THE
FORESEEABLE FUTURE. HOWEVER, THERE HAS BEEN A NOTICEABLE IMPROVEMENT IN
CUSTOMER ACTIVITY SINCE THE BEGINNING OF THE 2000 FINANCIAL YEAR WHICH BODES
WELL FOR THE GROUP.
WE WILL REMAIN FOCUSED ON IMPROVING MARGINS WHILST MAINTAINING THE GROWTH IN
VOLUMES THROUGH OUR EXISTING STORES WHICH WE BELIEVE CONTINUE TO OFFER EXCITING
POTENTIAL. WORKING CAPITAL WILL BE MANAGED TO OPTIMISE CASHFLOWS
WHILST ENSURING THAT AN APPROPRIATE PRODUCT RANGE IS OFFERED.
SHAREHOLDERS' ATTENTION IS DRAWN TO THE CAUTIONARY ANNOUNCEMENTS PUBLISHED
RECENTLY WHICH REFER TO THE MAJORITY SHAREHOLDER'S INTENTION TO SELL ITS
CONTROLLING INTEREST IN THE GROUP.
YEAR 2000 COMPLIANCE
THE GROUP HAS SUBSTANTIALLY COMPLETED A COMPREHENSIVE EXERCISE TO ENSURE YEAR
2000 COMPLIANCE. NO SIGNIFICANT OPERATIONAL DIFFICULTIES ARE THUS ANTICIPATED
IN THE ABILITY OF CASHBUILD'S INFORMATION TECHNOLOGY SYSTEMS TO HANDLE THE
ADVENT OF THE YEAR 2000. NO MATERIAL EXPENDITURE HAS BEEN INCURRED TO DATE TO
ACHIEVE COMPLIANCE.
FINAL DIVIDEND
THE BOARD HAS DECLARED A FINAL DIVIDEND OF 15 CENTS PER SHARE (1998: 12
CENTS)IN RESPECT OF THE YEAR ENDED 26 JUNE 1999. DIVIDEND COVER IS 3,0 TIMES.
THE DIVIDEND WILL BE PAID ON OR ABOUT 12 NOVEMBER 1999 TO SHAREHOLDERS
REGISTERED AT THE CLOSE OF BUSINESS ON 15 OCTOBER 1999.
FOR AND ON BEHALF OF THE BOARD
C STASSEN PK GOLDRICK
CHAIRMAN CHIEF EXECUTIVE
JOHANNESBURG
16 SEPTEMBER 1999
REGISTERED OFFICE
CNR AEROTON AND AERODROME ROADS
AEROTON, JOHANNESBURG
PO BOX 90115, BERTSHAM 2013
TRANSFER SECRETARIES
MERCANTILE REGISTRARS
11 DIAGONAL STREET
JOHANNESBURG
PO BOX 1053, JOHANNESBURG 2000
DIRECTORS: C STASSEN (CHAIRMAN)*, PK GOLDRICK (CHIEF EXECUTIVE) (IRISH),
BDW BROWN (BRITISH), CA DINHAM, JJ FOUCHE*, RA LISTER, D MASSON*,
C MOORE*
*NON-EXECUTIVE
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