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NU-WORLD HOLDINGS LIMITED
(REGISTRATION NO. 68/02490/06)
AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 1999
TURNOVER UP 18.2%
ATTRIBUTABLE INCOME UP 22.5%
HEADLINE EARNINGS PER SHARE UP 12.1%
CASH GENERATED BY OPERATIONS UP 10.1 MILLION
NINE CONSECUTIVE YEARS OF GROWTH IN TURNOVER, OPERATING INCOME, ATTRIBUTABLE
EARNINGS, EARNINGS PER SHARE AND DIVIDEND
ABRIDGED GROUP INCOME STATEMENT
YEAR ENDED YEAR ENDED %
31 AUG 1999 31 AUG 1998 CHANGE
(R000) (R000)
TURNOVER 527 706 446 629 18.2
INCOME BEFORE TAXATION 29 021 26 145 11.0
TAXATION 6 462 7 729
INCOME AFTER TAXATION 22 559 18 416 22.5
DIVIDEND 3 625 3 290 10.2
RETAINED EARNINGS FOR THE YEAR 18 934 15 126 25.2
HEADLINE EARNINGS 22 559 18 416 22.5
EARNINGS PER SHARE (CENTS) 105.8 86.7 22.0
EARNINGS PER SHARE (CENTS) 105.9 94.5 12.1
- WEIGHTED
HEADLINE EARNINGS PER SHARE CENTS 105.8 86.7 22.0
HEADLINE EARNINGS PER SHARE CENTS 105.9 94.5 12.1
- WEIGHTED
DIVIDEND PER SHARE (CENTS) 17.0 15.5 9.7
DIVIDEND COVER 6.2 6.0 3.3
INTEREST COVER 5.8 5.0 16.0
SHARES IN ISSUE 21 327 21 229 0.5
SHARES IN ISSUE - WEIGHTED 21 300 19 495 9.3
ABRIDGED GROUP BALANCE SHEET
YEAR ENDED YEAR ENDED %
31 AUG 1999 31 AUG 1998 CHANGE
(R000) (R000)
ASSETS
NON-CURRENT ASSETS
FIXED ASSETS 24 681 23 517 5.0
CURRENT ASSETS
INVENTORY 80 324 77 431 3.7
TRADE AND OTHER RECEIVABLES 113 622 104 632 8.6
CASH EQUIVALENTS 79 418 83 232 (4.6)
TOTAL ASSETS 298 045 288 812 3.2
EQUITY AND LIABILITIES
SHAREHOLDERS' INTEREST 184 157 162 874 13.1
NON-CURRENT LIABILITIES 23 261 30 089 (22.7)
CURRENT LIABILITIES
TRADE AND OTHER PAYABLES 88 460 92 669 (4.5)
TAXATION 2 167 3 180 (31.9)
TOTAL EQUITY AND LIABILITIES 298 045 288 812 3.2
DEBT-EQUITY RATIO 0.0% 0.0%
ABRIDGED GROUP CASH FLOW STATEMENT
YEAR ENDED YEAR ENDED
31 AUG 1999 31 AUG 1998
(R000) (R000)
CASH GENERATED / (UTILISED) BY
OPERATING ACTIVITIES 9 158 (890)
CASH GENERATED FROM OPERATIONS 26 01 11 006
INTEREST PAID (6 098) (6 636)
DIVIDEND PAID (1 276) (676)
NORMAL TAX COMPANIES (9 487) (4 584)
CASH FLOWS FROM
INVESTING ACTIVITIES (4 792) (4 979)
PURCHASE OF TANGIBLE FIXED ASSETS (4 975) (5 111)
PROCEEDS ON DISPOSAL OF FIXED ASSETS 183 132
CASH FLOWS FROM FINANCING ACTIVITIES (8 180) 87 520
PROCEEDS ON ISSUE OF SHARE CAPITAL 0 73 145
PROCEEDS FROM LONG TERM BORROWING (8 180) 14 375
NET INCREASE / (DECREASE)
IN CASH AND CASH EQUIVALENTS (3 814) 81 651
CASH AND CASH EQUIVALENTS
AT THE BEGINNING OF THE YEAR 83 232 1 581
CASH AND EQUIVALENTS
AT THE END OF THE YEAR 79 418 83 232
COMMENTS
THE DIRECTORS ARE PLEASED TO REPORT ON A FAIR SET OF RESULTS FOR THE FINANCIAL
YEAR TO 31 AUGUST 1999. THESE RESULTS REPRESENT THE NINTH CONSECUTIVE YEAR OF
POSITIVE ORGANIC GROWTH IN TURNOVER, OPERATING INCOME, ATTRIBUTABLE INCOME,
HEADLINE EARNINGS PER SHARE AND DIVIDEND. THESE RESULTS ALSO REFLECT SIX
CONSECUTIVE YEARS OF 20% PLUS GROWTH IN HEADLINE ATTRIBUTABLE EARNINGS.
TURNOVER OF R527.7M AN INCREASE OF MORE THAN R80M OVER AUGUST 1998, IS UP BY
18.2% - (1998 : R446,629M). THIS GROWTH WAS ACHIEVED IN AN ECONOMY WHEN
SPENDING ON CONSUMER DURABLES, DURING THIS PERIOD, DECLINED IN REAL TERMS.
NET OPERATING INCOME IS UP 6.6% TO R38,791M (1998 : R36,382M).
INTEREST PAID OF R6,098M IS 8.1% DOWN ON LAST YEAR'S R6,636M.
INTEREST COVER HAS IMPROVED BY 16% - FROM A MULTIPLE OF 5.0 TO 5.8 TIMES.
THE GROUP REMAINS IN AN UNGEARED POSITION, WITH CASH BALANCES OF R79,418M AT
THE YEAR END.
DURING THE YEAR UNDER REVIEW, THE GROUP HAS CHANGED ITS ACCOUNTING POLICY, TO
ACCOUNT FOR DEFERRED TAXATION ON A FULLY COMPREHENSIVE BASIS. PRIOR YEAR
COMPARATIVE FIGURES HAVE BEEN RESTATED ACCORDINGLY, TO REFLECT THIS CHANGE IN
ACCOUNTING POLICY.
ATTRIBUTABLE INCOME INCREASED 22.5% TO R22,559M (1998 : R18,416M).
THIS EQUATES TO A COMPOUND ANNUAL AVERAGE RATE OF GROWTH IN EXCESS OF 45% OVER
THE PAST FIVE YEARS.
THE WEIGHTED NUMBER OF SHARES IN ISSUE IS UP 9.25% YEAR ON YEAR. AFTER
ALLOWING FOR THE EFFECT OF THIS ADDITIONAL DILUTION, HEADLINE EARNINGS PER
SHARE ON A WEIGHTED BASIS, HAS INCREASED 12.1% TO 105.9 CENTS - (1998 : 94.5
CENTS).
DIRECTORS HAVE AGAIN TAKEN A CONSERVATIVE VIEW ON DIVIDEND POLICY INCREASING
DIVIDEND COVER WITH A CORRESPONDING 9.7% INCREASE IN DIVIDEND PER SHARE TO
17.0 CENTS (1998 : 15.5 CENTS).
INVENTORY LEVELS ARE ONLY MARGINALLY UP ON 1998 FIGURES, REFLECTING AN
IMPROVEMENT OF 14% IN STOCK TURN. THIS, TOGETHER WITH THE MODERATE INCREASE IN
RECEIVABLES, REFLECTS A SATISFACTORY IMPROVEMENT IN WORKING CAPITAL MANAGEMENT.
CASH GENERATED FROM OPERATIONS OF R9,158M REPRESENTS A MORE THAN R10M
TURNAROUND OVER THE 1998 POSITION AND IS THE HIGHEST POSITIVE CASH GENERATION
OVER THE PAST FEW YEARS.
THIS NINTH YEAR OF ORGANIC GROWTH ACROSS THE BOARD, ACHIEVED IN A RECESSIONARY
SOUTHERN AFRICAN CLIMATE, IS A REFLECTION OF THE DIVERSIFIED NATURE AND THE
GLOBAL REACH OF THE GROUP.
OVER THE PAST YEAR THE BROAD BASED OPERATIONAL ACTIVITIES OF THE GROUP HAVE
DIVERSIFIED FURTHER. NU-WORLD WILL CONTINUE TO POSITION ITSELF STRATEGICALLY
AS A FOCUSED ONE-STOP 'BRANDED CONSUMER DURABLES' SUPPLIER TO ITS CUSTOMERS -
LOCALLY AND ABROAD.
THE OPERATIONAL ACTIVITIES OF THE GROUP AS IT HAS DIVERSIFIED FURTHER SINCE
LAST REPORTING - ARE ORGANISED ACROSS NINE INTEGRATED DIVISIONS.
THE NINE DIVISIONS COMPRISE:-
1) MANUFACTURE/IMPORT/DISTRIBUTION OF SMALL ELECTRICAL APPLIANCES
2) EXPORT OF SMALL DOMESTIC APPLIANCES
3) MANUFACTURING OF ELECTRICAL WIRING ACCESSORIES
4) BRANDED CONSUMER ELECTRONICS
5) IMPORT AND DISTRIBUTION OF 'WHITE GOODS' - 'LAUNDRY', 'COOKING' AND
`REFRIGERATION'
6) BRANDED CONSUMABLES/SEMI DURABLES/HOUSEWARES
7) BRANDED AIR-CONDITIONING
8) BRANDED PERSONAL COMPUTERS - IMPORT AND DISTRIBUTION OF NICHE PRODUCT
DESKTOPS AND LAPTOPS
9) FURNITURE
INNOVATION AND NEW PRODUCTS DRIVE ORGANIC GROWTH
ALMOST 30% OF THE TOTAL SALES FOR THE YEAR TO AUGUST 1999 HAS BEEN GENERATED BY
NEW PRODUCTS INTRODUCED OVER THE PAST 12 MONTHS. THE INTRODUCTION OF NEW
PRODUCTS IN EXISTING AND NEW DIVISIONS WILL BE STEPPED UP AND IS EXPECTED TO
DRIVE GROWTH FORWARD AT AN ACCELERATED PACE DURING THE FORTHCOMING FINANCIAL
YEAR.
GROWTH IN EXPORTS
EXPORTS REPRESENTS A HUGE POTENTIAL FOR GROWTH OF THE MANUFACTURING DIVISION.
EXPORT REVENUES NOW ACCOUNT FOR ALMOST 20% OF APPLIANCE SALES.
RESTRUCTURING
THE RESTRUCTURING OF THE MANUFACTURING AND WAREHOUSING OPERATIONS OF THE GROUP
HAS BEEN INTENSIFIED DURING THE YEAR UNDER REVIEW. THE STAFF COMPLEMENT HAS
REDUCED BY NATURAL ATTRITION AND SALES PER EMPLOYEE IS UP BY MORE THAN 40% YEAR
ON YEAR. PRODUCTIVITY IMPROVEMENTS OF MORE THAN 20% HAVE BEEN ACHIEVED IN THE
MANUFACTURING DIVISION, OVER THE PAST YEAR.
CONSUMER ELECTRONICS
JVC - CONTINUES TO GAIN MARKET SHARE. IN THE 4 YEARS DURING WHICH THE GROUP
HAS HELD THE JVC AGENCY, GROWTH HAS BEEN STRONG YEAR ON YEAR. THE BRAND IS NOW
WELL ENTRENCHED AS ONE OF THE LEADING BRANDS AT THE UPPER END OF THE MARKET FOR
CONSUMER ELECTRONICS.
NU-TEC, THE IN-HOUSE BRAND OF PRICE - ENTRY CONSUMER ELECTRONICS, WAS
INTRODUCED DURING THE LATTER PART OF THE REPORTING PERIOD. THIS QUALITY RANGE
OF TV'S, HI-FI'S, CAR AUDIO - HAS ACHIEVED REMARKABLE CONSUMER SUPPORT AND THE
DIVISION PROMISES SIGNIFICANT POTENTIAL FOR EXPONENTIAL GROWTH IN THE YEAR
AHEAD.
BRANDED - PERSONAL COMPUTERS 'DAEWOO'
THE GROUP HAS TAKEN ON THE INTERNATIONAL BRAND OF 'DAEWOO' PERSONAL COMPUTERS
AND IS SUPPLYING LEADING EDGE NICHE PRODUCT LAPTOP AND DESKTOP MACHINES THROUGH
APPOINTED AGENTS.
BRANDED AIRCONDITIONING 'FUJITSU'
A NEW DIVISION CARRYING THE INTERNATIONAL JAPANESE 'FUJITSU' BRAND HAS JUST
BEEN ESTABLISHED AND A WIDE RANGE OF COMPETITIVE, TOP QUALITY PRODUCTS ARE
SELLING THROUGH APPOINTED AGENTS.
FURNITURE
A LIMITED RANGE OF FURNITURE, PRIMARILY BASED AROUND TV STANDS AND WALL UNITES
FOR JVC HOME THEATER ENTERTAINMENT SYSTEMS, WILL BE INTRODUCED BEFORE
CHRISTMAS. THIS DIVERSIFICATION IS A NATURAL ADDITION TO NU-WORLD'S RANGES OF
CONSUMER DURABLES, SELLING TO OUR SAME CUSTOMER BASE.
PROSPECTS
THE YEAR AHEAD LOOKS ENORMOUSLY PROMISING.
THE GROUP HAS DEMONSTRATED ITS RESILIENCE IN A RECESSIONARY CLIMATE. DURING A
YEAR IN WHICH SALES OF CONSUMER DURABLES MAY WELL HAVE DECLINED BY 15%, THE
GROUP'S REVENUES HAVE GROWN BY ALMOST 20% AND HEADLINE ATTRIBUTABLE EARNINGS
ARE UP 22.5%.
IT IS APPARENT THAT THE FUNDAMENTALS OF THE SOUTH AFRICAN ECONOMY ARE IN PLACE
FOR IMPROVED ECONOMIC ACTIVITY AND A RESURGENCE OF CONSUMER CONFIDENCE AND
SPENDING.
THE DIVERSIFIED NATURE AND THE GLOBAL REACH OF THE GROUP AND OUR FOCUS AS A
ONE-STOP SUPPLIER OF 'BRANDED CONSUMER DURABLES' TO OUR BROAD CUSTOMER BASE
LOCALLY AND ABROAD, PLACES NU-WORLD IN A STRATEGICALLY STRONG POSITION TO
ACCELERATE GROWTH DURING THE FORTHCOMING YEAR AND INTO THE NEW MILLENNIUM.
YEAR 2000 COMPLIANCE
THE AUDIT COMMITTEE OF THE NU-WORLD GROUP CONTINUOUSLY REVIEWS ALL ASPECTS OF
THE YEAR 2000 COMPLIANCE REQUIREMENTS. DIRECTORS DO NOT ANTICIPATE ANY
UNFORESEEN MATERIAL OPERATIONAL DIFFICULTIES AND ARE CONSEQUENTLY OF THE
OPINION THAT THE GROUP IS COMPLIANT.
AWARD OF CAPITALISATION SHARES AND THE RIGHT
OF ELECTION TO RECEIVE A FINAL DIVIDEND IN CASH
THE DIRECTORS HAVE RESOLVED TO AWARD CAPITALISATION SHARES TO ORDINARY
SHAREHOLDERS REGISTERED IN THE BOOKS OF THE COMPANY AT THE CLOSE OF BUSINESS
FRIDAY 12 NOVEMBER 1999. SHAREHOLDERS ARE ENTITLED AND WILL BE GIVEN THE
OPPORTUNITY TO DECLINE THE AWARD OF CAPITALISATION SHARES IN RESPECT OF ALL OR
ANY PART OF THEIR SHAREHOLDING AND MAY ELECT TO RECEIVE A FINAL CASH DIVIDEND
OF 17.0 CENTS - (1998 : 15.5 CENTS) PER ORDINARY SHARE IN RESPECT OF THE YEAR
ENDED 31 AUGUST 1999.
THE TERMS OF THE AWARD OF THE CAPITALISATION SHARES WILL BE PUBLISHED ON OR
ABOUT THE 25 OCTOBER 1999 AND A CIRCULAR AND FORM OF ELECTION WILL BE POSTED TO
SHAREHOLDERS ON 19 NOVEMBER 1999.
COMPANY SECRETARY
GRAHAM HINDLE CA (SA)
15 OCTOBER 1999
DIRECTORS
DR J.A. TEMPLE PHD (CHAIRMAN), M.S. GOLDBERG BCOM MBA (RAND) (MANAGING),J.A.
GOLDBERG BSC (ENG) (RAND), J.M. JUDIN DIP LAW (RAND), G.R. HINDLE CA (SA)
REGISTERED OFFICE TRANSFER SECRETARIES
35 - 3RD STREET MERCANTILE REGISTRARS LTD
WYNBERG, SANDTON 11 DIAGONAL STREET
2199 JOHANNESBURG 2000
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