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MEDIA RELEASE
THURSDAY, 10 FEBRUARY 2000
COUNTRY ROAD ANNOUNCES RESULTS FOR THE HALF-YEAR ENDING DECEMBER 1999
COUNTRY ROAD, THE AUSTRALIAN SUBSIDIARY OF WOOLWORTHS HOLDINGS LIMITED
("WOOLWORTHS"), ANNOUNCED ITS INTERIM RESULTS FOR THE SIX MONTHS TO DECEMBER
1999 TODAY.
MR SYD MULLER, THE CHAIRMAN OF WOOLWORTHS, SAID THAT THE TURNAROUND OF COUNTRY
ROAD WAS ON TRACK AND IN LINE WITH THE PROMISE THAT WAS MADE TO SHAREHOLDERS.
AT A PROFIT OF $1.036 MILLION (R4,4M), COUNTRY ROAD HAS ACHIEVED AN IMPROVED
PROFIT BEFORE TAX OF $1.579 MILLION (R6,6M) AS COMPARED TO THE LOSS OF
$543,000 (R2,2M) DECLARED FOR THE SAME PERIOD LAST YEAR.
"WE HAVE CONSISTENTLY ADVISED SHAREHOLDERS THAT COUNTRY ROAD WAS IN A
TURNAROUND SITUATION AND THAT IT WOULD TAKE THREE YEARS TO RETURN TO A HEALTHY
STATE. WE ARE PLEASED WITH THE PROGRESS THAT WE HAVE BEEN ABLE TO MAKE IN THE
PAST EIGHTEEN MONTHS. PROFIT BEFORE INTEREST WAS ACHIEVED IN BOTH AUSTRALIA AND
THE USA," MULLER SAID.
COUNTRY ROAD HAS BEEN RESTRUCTURED AND RE-ORGANISED AND IS STILL BEDDING DOWN,
BUT DIRECTORS BELIEVE THAT THE FUNDAMENTALS FOR FUTURE SUCCESS ARE NOW IN
PLACE. THE COMPANY HAS BEEN ABLE TO RETURN TO PROFITABILITY ON THE BACK OF
SOME VERY SOLID AND SUSTAINABLE BUSINESS IMPROVEMENTS.
"MUCH WORK REMAINS TO BE DONE OVER THE NEXT EIGHTEEN MONTHS,' SAYS MULLER. 'WE
HAVE, HOWEVER, A BUSINESS PLAN IN PLACE WHICH WE BELIEVE WILL DELIVER IMPROVED
RESULTS FOR OUR SHAREHOLDERS. THE BOARD IS CONFIDENT THAT THE FULL-YEAR
RESULTS WILL SHOW CONTINUED PROGRESS," HE ADDED.
WOOLWORTHS HOLDINGS LIMITED, WHOSE MAJOR TRADING SUBSIDIARY IS WOOLWORTHS IN
SOUTH AFRICA, WILL BE ANNOUNCING THEIR HALF-YEAR RESULTS TO DECEMBER 1999 ON
THURSDAY, 17 FEBRUARY 2000.
CONTACT PERSON: IAN STURROCK 083 251 6270
WOOLWORTHS HOLDINGS LIMITED TODAY ANNOUNCES THE RESULTS OF ITS AUSTRALIAN
SUBSIDIARY COUNTRY ROAD LIMITED FOR THE SIX MONTH PERIOD TO 31 DECEMBER 1999
COUNTRY ROAD LIMITED
ACN 006 759 182
FINANCIAL SUMMARY FOR THE SIX MONTH PERIOD TO 31 DECEMBER 1999
1999/2000 1998/1999 % INCREASE
$A'000 SA'000 (DECREASE)
CONSOLIDATED SALES FROM AUSTRALASIAN
OPERATIONS 106,603 104,885 1.6
U.S.A. SALES (1999 - US$20,669,000,
1998 - US$19,778,000) 32,111 32,962 (2.6)
TOTAL GROUP CONSOLIDATED SALES 138,714 137,847 0.6
AUSTRALASIAN OPERATING PROFIT BEFORE
INTEREST, ABNORMAL ITEMS AND TAX 435 545 (20.2)
U.S.A. OPERATING PROFIT/(LOSS) BEFORE
INTEREST AND TAX 828 (826) 200.2
GROUP OPERATING PROFIT BEFORE INTEREST,
ABNORMAL ITEMS AND TAX 1,263 (281)
NET INTEREST (227) (262)
PROFIT BEFORE ABNORMAL ITEMS AND TAX 1,036 (543)
INCOME TAX EXPENSE 54 -
NET OPERATING PROFIT/(LOSS) BEFORE
ABNORMAL ITEMS 1,090 (543)
ABNORMAL ITEMS - -
TAX EFFECT ON ABNORMAL ITEMS - -
CONSOLIDATED NET PROFIT BEFORE
MINORITIES 1,090 (543)
OUTSIDE EQUITY INTEREST IN NET
OPERATING PROFIT AFTER TAX - -
CONSOLIDATED NET PROFIT AFTER
MINORITIES 1,090 (543)
FOR FURTHER INFORMATION, PLEASE CONTACT:
IAN THOMSON, CHIEF EXECUTIVE OFFICER, COUNTRY ROAD LIMITED
658 CHURCH STREET, RICHMOND, VICTORIA, 3121
PHONE: (03) 9267 1400
COUNTRY ROAD LIMITED
ACN 006 759 182
SUMMARY OF FINANCIAL POSITION AS AT 31 DECEMBER 1999
EARNINGS PER SHARE $0.016 ($0.008)
GROSS CASH FLOW $5.15 MILL. $3.35 MILL.
GROSS CASH FLOW PER ORDINARY SHARE $0.075 $0.048
INTEREST COVER 23.4 TIMES 13.8 TIMES
GEARING RATIO 33.2% 41.6%
DEBT EQUITY RATIO 3.6% 14.5%
CURRENT RATIO 2.8 :1 2.3 :1
NET TANGIBLE ASSET BACKING PER
ORDINARY SHARE $0.909 $0.945
BASIS OF CALCULATIONS
EARNINGS PER ORDINARY SHARE - PROFIT AFTER TAX, LESS PREFERENCE DIVIDEND,
DIVIDED BY WEIGHTED AVERAGE ORDINARY SHARES ISSUED FOR THE 6 MONTHS TO 31
DECEMBER 1999
GROSS CASH FLOW - PROFIT AFTER TAX PLUS DEPRECATION AND AMORTISATION
GROSS CASH FLOW PER ORDINARY SHARE - GROSS CASH FLOW DIVIDED BY WEIGHTED
AVERAGE ORDINARY SHARES ISSUED FOR THE 6 MONTHS TO 31 DECEMBER 1999
INTEREST COVER - PROFIT BEFORE INTEREST AND TAX PLUS DEPRECIATION AND
AMORTISATION DIVIDED BY NET INTEREST EXPENSE
GEARING RATIO - TOTAL LIABILITIES TO TOTAL TANGIBLE ASSETS
DEBT EQUITY RATIO - TOTAL INTEREST BEARING DEBT LESS CASH DIVIDED BY THE SUM OF
NET INTEREST BEARING DEBT AND EQUITY
CURRENT RATIO - CURRENT ASSETS TO CURRENT LIABILITIES
NET TANGIBLE ASSET BACKING PER ORDINARY SHARE - NET TANGIBLE ASSETS LESS
PREFERENCE SHARES TO ISSUED FULLY PAID ORDINARY SHARES AT 31 DECEMBER 1999
STATEMENT TO THE AUSTRALIAN STOCK EXCHANGE
11 FEBRUARY 2000
THE DIRECTORS OF COUNTRY ROAD TODAY ANNOUNCED RESULTS FOR THE HALF-YEAR ENDING
DECEMBER WHICH SAW THE COMPANY CONTINUE ITS RECENT IMPROVEMENT, AND RETURN TO
PROFIT.
PROFIT
AT $1.036 MILLION, THE PROFIT BEFORE TAX REPRESENTS AN IMPROVEMENT OF $1.579
MILLION ON THE LOSS OF $543,000 DECLARED FOR THE SAME PERIOD LAST YEAR. A
PROFIT BEFORE INTEREST WAS ACHIEVED IN BOTH AUSTRALIA ($909,000) AND THE USA
($828,000).
SALES
TOTAL SALES INCREASED BY 0.6% TO $138.7 MILLION FOR THE SIX MONTHS. THE
OCTOBER TO DECEMBER QUARTER HOWEVER SHOWED A 3.3% INCREASE IN AUSTRALIA AND 5%
IN THE USA (IN US $). THE TOTAL RESULT MUST BE SEEN IN THE CONTEXT OF STOCK
LEVELS, WHICH DECLINED BY 28% FROM THE PREVIOUS YEAR, WHEN SUBSTANTIAL
MARKDOWNS WERE NECESSARY IN ORDER TO CLEAR EXCESS STOCKS OF BOTH FABRIC AND
FINISHED GOODS.
BALANCE SHEET
STOCK
STOCK AT DECEMBER STOOD AT $46.4 MILLION, $16.9 MILLION (27%) LOWER THAN THE
PREVIOUS YEAR. THIS REDUCTION WAS THE DIRECT RESULT OF A FUNDAMENTAL CHANGE IN
SOURCING POLICY. THE COMPANY HAD TRADITIONALLY BOUGHT ON A CUT MAKE AND TRIM
BASIS (CMT) AND HAS PROGRESSIVELY OVER THE LAST EIGHTEEN MONTHS CONVERTED ITS
SOURCING TO THE BUYING OF FINISHED GOODS. THIS POLICY HAS SEEN STOCKS OF
FABRIC FALL BY $8.2 MILLION AND INVENTORY OF FINISHED GOODS BY $8.7 MILLION.
ADDITIONAL BENEFITS HAVE BEEN A MARKED IMPROVEMENT IN QUALITY STANDARDS AND THE
DELIVERY TO CUSTOMERS OF BETTER VALUE PRODUCT.
DEBT
EXTERNAL DEBT OF $ 2.8 MILLION IS $10.4 MILLION LOWER THAN DECEMBER 1998, WHEN
IT STOOD AT $13.2 MILLION. THIS REDUCTION WAS LARGELY DUE TO BETTER MANAGEMENT
OF EXPENSES AND STOCKS.
CAPITAL EXPENDITURE
STORES
CAPITAL EXPENDITURE OF $2.8M IN THE SIX MONTHS WAS INVESTED IN MINOR STORE
REFURBISHMENTS AND COMPUTER SYSTEM UPGRADES. WORK HAS RECENTLY COMMENCED ON
THE REFURBISHMENT OF THE FLAGSHIP SOUTH YARRA STORE, AS WELL AS STORES IN
HOBART AND IN INDOOROOPILLY. IN THE USA THE COMPANY IS RENOVATING STORES IN
CONNECTICUT AND MASSACHUSETTS. IT IS ALSO THE INTENTION TO OPEN NEW STORES IN
LONG ISLAND USA AND QUEEN STREET BRISBANE IN THE CURRENT HALF.
CURRENT SALES
RETAIL
RETAIL SALES IN JANUARY HAVE CONTINUED TO SHOW GROWTH ON LAST YEAR AND
DIRECTORS LOOK FORWARD TO MAINTAINING THAT IMPROVEMENT.
WHOLESALE
SALES TO WHOLESALE CUSTOMERS HAVE BEEN POSITIVE WITH FORWARD RANGES TO THE END
OF JUNE 2000 BEING SOLD IN LINE WITH BUDGET AND REFLECTING THE VERY POSITIVE
SALES GROWTH ACHIEVED BY OUR WHOLESALE CUSTOMERS AT A RETAIL LEVEL,
PARTICULARLY IN WOMEN'S WEAR.
COMMENT
SYD MULLER THE CHAIRMAN OF COUNTRY ROAD SAID, "WE HAVE CONSISTENTLY ADVISED
SHAREHOLDERS THAT COUNTRY ROAD WAS IN A TURNAROUND SITUATION AND THAT IT WOULD
TAKE 3 YEARS TO RETURN THE COMPANY TO A HEALTHY STATE. WE ARE PLEASED WITH THE
PROGRESS WE HAVE BEEN ABLE TO MAKE IN THE FIRST EIGHTEEN MONTHS THAT THE NEW
TEAM HAS BEEN IN PLACE.
THE COMPANY HAS BEEN RESTRUCTURED AND REORGANISED AND IS STILL BEDDING DOWN,
BUT WE BELIEVE THAT THE FUNDAMENTALS FOR FUTURE SUCCESS ARE NOW IN PLACE.
COUNTRY ROAD HAS BEEN ABLE TO RETURN TO PROFITABILITY ON THE BACK OF SOME VERY
SOLID AND SUSTAINABLE BUSINESS IMPROVEMENTS.
* CONTROL OF OVERHEAD COST
* REDUCTION IN STOCKS
* IMPROVED SOURCING AND MARGIN
* HIGHER QUALITY STANDARDS
* A SOLID BALANCE SHEET
DIRECTORS ARE PLEASED TO NOTE THAT THESE RESULTS AND BUSINESS IMPROVEMENTS WERE
ACHIEVED DURING A PERIOD WHEN CONSIDERABLE EFFORT AND COST WAS INCURRED TO
ENSURE YEAR 2000 READINESS. ADDITIONALLY THE COMPANY IS NOW IN THE PROCESS OF
ENSURING THAT IT IS PROPERLY SET UP FOR THE INTRODUCTION OF THE GST IN JULY
2000.
MUCH WORK REMAINS TO BE DONE OVER THE NEXT EIGHTEEN MONTHS. WE HAVE IN PLACE A
BUSINESS PLAN WHICH WE BELIEVE WILL DELIVER IMPROVED RESULTS FOR OUR
SHAREHOLDERS. THE BOARD IS CONFIDENT THAT RESULTS FOR THE FULL YEAR WILL SHOW
CONTINUED PROGRESS.
I WOULD LIKE TO EXPRESS THE BOARDS' APPRECIATION AND THANKS TO EVERYONE AT
COUNTRY ROAD FOR THEIR EFFORTS THUS FAR."
WOOLWORTHS HOLDINGS LIMITED WILL BE ANNOUNCING THE GROUPS INTERIM RESULTS FOR
THE SIX MONTHS TO DECEMBER 1999 ON THURSDAY, 17 FEBRUARY 2000
ENDS
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