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NU-WORLD HOLDINGS LIMITED
(REGISTRATION NO. 68/02490/06)
INTERIM REPORT OF THE GROUP FOR THE HALF YEAR ENDED 29 FEBBUARY 2000
TURNOVER UP 30.2%
PROFIT BEFORE TAXATION UP 45.3%
ATTRIBUTABLE INCOME UP 44.2%
HEADLINE EARNINGS PER SHARE UP 42.9%
NU-WORLD IS ON TARGET FOR TEN CONSECUTIVE YEARS OF GROWTH IN TURNOVER,
OPERATING INCOME, ATTRIBUTABLE EARNINGS, EARNINGS PER SHARE AND DIVIDEND 40% -
PLUS ORGANIC GROWTH IN PROFIT BEFORE TAX, ATTRIBUTABLE INCOME AND HEADLINE
EARNINGS PER SHARE
INCOME STATEMENT
UNAUDITED YEAR
SIX MONTHS ENDED ENDED
29 FEB 2000 28 FEB 1999 % 31 AUG 1999
(R000) (R000) CHANGE (R000)
TURNOVER 315 030 242 033 30.2 527 706
NET OPERATING
INCOME 20 545 15 567 32.0 38 791
DEPRECIATION 1 913 1 762 3 672
INTEREST PAID 3 801 3 598 6 098
INCOME BEFORE
TAXATION 14 831 10 207 45.3 29 021
TAXATION 3 745 2 521 6 462
INCOME AFTER
TAXATION 11 086 7 686 44.2 22 559
DIVIDEND 3 625
RETAINED EARNINGS
FOR THE PERIOD 11 086 7 686 18 934
HEADLINE EARNINGS 11 086 7 686 44.2 22 559
EARNINGS PER SHARE
(CENTS) 51.1 36.0 41.8 105.8
EARNINGS PER SHARE
(CENTS) WEIGHTED 51.6 36.1 42.9 105.9
HEADLINE EARNINGS
PER SHARE (CENTS) 51.1 36.0 41.8 105.8
HEADLINE EARNINGS
PER SHARE (CENTS)
WEIGHTED 51.6 36.1 42.9 105.9
DIVIDEND PER SHARE
(CENTS) 0 0 17.0
DIVIDEND COVER 6.2
INTEREST COVER 4.9 3.8 5.8
SHARES IN ISSUE 21 695 21 327 1.7 21 327
SHARES IN ISSUE
- WEIGHTED 21 471 21 272 0.9 21 300
BALANCE SHEET
UNAUDITED YEAR
SIX MONTHS ENDED ENDED
29 FEB 2000 28 FEB 1999 31 AUG 1999
(R000) (R000) (R000)
ASSETS
NON-CURRENT ASSETS
FIXED ASSETS 25 244 23 852 24 681
CURRENT ASSETS
INVENTORY 101 941 97 418 80 324
TRADE AND OTHER
RECEIVABLES 121 596 116 214 113 622
CASH EQUIVALENTS 43 089 23 569 79 418
TOTAL ASSETS 291 870 261 053 298 045
EQUITY AND LIABILITIES
SHAREHOLDERS' INTEREST 194 915 169 283 184 157
NON-CURRENT LIABILITIES 21 991 29 721 23 261
CURRENT LIABILITIES
TRADE AND OTHER PAYABLES 72 464 59 549 88 460
CURRENT PORTION OF INTEREST
BEARING LIABILITIES 2 500 2 500 2 167
TOTAL EQUITY AND
LIABILITIES 291 870 261 053 298 045
DEBT:EQUITY RATIO 0.0% 0.0% 0.0%
STATEMENT OF CHANGES IN EQUITY
EQUITY AT BEGINNING
OF YEAR 184 157 162 873 162 873
SHARE CAPITAL ISSUED (328) (1 276) 2 350
RETAINED EARNINGS FOR
THE PERIOD 11 086 7 686 18 934
EQUITY AT END OF PERIOD 194 915 169 283 184 157
CASH FLOW STATEMENT
UNAUDITED YEAR
SIX MONTHS ENDED ENDED
29 FEB 2000 28 FEB 1999 31 AUG 1999
(R000) (R000) (R000)
CASH GENERATED/
(UTILISED) BY
OPERATING ACTIVITIES (32 701) (55 874) 9 158
CASH GENERATED FROM
OPERATIONS (22 448) (50 878) 26 018
INTEREST PAID (3 801) (3 598) (6 098)
DIVIDEND PAID (328) (1 276) (1 276)
NORMAL TAX COMPANIES (6 124) (122) (9 486)
CASH FLOWS FROM
INVESTING ACTIVITIES (2 476) (2 099) (4 792)
PURCHASE OF
TANGIBLE ASSETS (2 476) (2 099) (4 792)
PROCEEDS ON DISPOSAL
OF FIXED ASSETS 0 0 183
CASH FLOWS FROM
FINANCING ACTIVITIES (1 152) (1 690) (8 180)
PROCEEDS FROM LONG
TERM BORROWINGS (1 152) (1 690) (8 180)
NET DECREASE IN CASH AND
CASH EQUIVALENTS (36 329) (59 663) (3 814)
CASH AND CASH
EQUIVALENTS AT
THE BEGINNING OF
THE PERIOD 79 418 83 232 83 232
CASH AND CASH
EQUIVALENT AT THE END
OF THE PERIOD 43 089 23 569 79 418
FINANCIAL COMMENTS
THE DIRECTORS ARE PLEASED TO REPORT ON A STRONG SET OF RESULTS AT THIS INTERIM
STAGE TO THE 29 FEBRUARY 2000.
THE DIVERSIFIED NATURE AND GLOBAL REACH OF THE GROUP, TOGETHER WITH LOWER
INTEREST RATES, HIGHER DISPOSABLE INCOME, A REBOUND IN THE OVERALL GROWTH OF
THE ECONOMY, HAVE ALL CONTRIBUTED TO A SURGE IN THE GROWTH OF THE GROUP, BACK
TO THE 40%-PLUS LEVELS, ACHIEVED THROUGHOUT MOST YEARS OF THE 1990'S.
DESPITE A SLOWER THAN EXPECTED RECOVERY IN CONSUMER SPENDING, THE MONTHS
LEADING UP TO THE 1999 CHRISTMAS SEASON WERE PARTICULARLY STRONG, WITH THE
GROUP ACHIEVING RECORD SALES DURING OCTOBER, NOVEMBER AND DECEMBER.
TURNOVER INCREASED BY 30.2% TO R315,0M, AN INCREASE OF R73,0M (FEB 1999 :
R242.0M).CONSIDERING THAT THE NET INCREASE IN TURNOVER FOR THE PAST FULL
FINANCIAL YEAR TO AUGUST 1999 OVER AUGUST 1998, WAS R81,1M IT IS EVIDENT THAT
THE GROUP IS ON TRACK FOR SUBSTANTIALLY IMPROVED GROWTH FOR THE YEAR TO AUGUST
2000.
NET OPERATING INCOME OF R20,6M IS UP 32.0% (FEB 1999 : R15,6M) INDICATING AN
IMPROVEMENT IN MARGINS.
ATTRIBUTABLE EARNINGS INCREASED 44.2% TO R11,1M (FEB 1999 : R7,7M) WITH THE
TAX RATE MUCH IN LINE WITH THAT OF THE PREVIOUS YEAR.
IN LINE WITH COMPANY POLICY, NO DIVIDEND IS PAID AT THE INTERIM STAGE.
HEADLINE EARNINGS PER SHARE OF 51.6 CENTS IS UP BY 42.9% (FEB 1999 : 36.1
CENTS).
NET INTEREST PAID IS MARGINALLY HIGHER BY 5.6%, WITH INTEREST COVER IMPROVING
TO 4.9 TIMES EARNINGS (FEB 1999 : 3.8 TIMES).
THE DEBT : EQUITY RATIO IS REFLECTED AT NIL, THE GROUP REMAINING IN AN UNGEARED
POSITION WITH CASH BALANCES OF R43.1M (FEB 1999 : R23.6M).
RESTRUCTURING / WAREHOUSING / LOGISTICS
THE GROUP HAS EXPANDED ITS WAREHOUSING OPERATIONS IN SANDTON, TAKING OVER AN
ADJACENT WAREHOUSE AND THE CAPE TOWN BRANCH WILL RELOCATE TO A NEW WAREHOUSING
FACILITY IN JUNE OF THIS YEAR.
THE ADDITIONAL WAREHOUSING CAPACITY WILL PROVIDE THE OPPORTUNITY FOR IMPROVING
LOGISTICS RELATED TO RECEIVING, HOLDING AND DISPATCHING AN EVER INCREASING
RANGE OF PRODUCTS, MANUFACTURED IN SOUTH AFRICA AND IMPORTED FROM MORE THAN 15
COUNTRIES AROUND THE WORLD.
THE IN-HOUSE DRIVE TO IMPROVE LOGISTICS IS AT THE CORNERSTONE OF OUR STRATEGY
TO ENSURE THAT NU-WORLD IS FOCUSED ON RETAINING ITS EDGE AS A LOW-COST IMPORTER
AND DISTRIBUTOR FOR THE BRANDED CONSUMER DURABLES, WHICH WE CARRY.
THE IN-HOUSE FLEET OF DELIVERY VEHICLES IS CURRENTLY BEING UPGRADED AND
EXPANDED AND NU-WORLD IS FORGING NEW RELATIONSHIPS WITH KEY 3RD-PARTY
TRANSPORTERS TO FURTHER IMPROVE OUR DISTRIBUTION NATIONWIDE.
NEW PRODUCTS - LOCAL MANUFACTURE AND EXPORTS
NEW PRODUCTS ARE SCHEDULED TO BE INTRODUCED ACROSS OUR CORE MANUFACTURED
RANGES, OVER THE REMAINDER OF THE FINANCIAL YEAR. THESE INCLUDE NEW LOW COST
RANGES OF HOTPLATES / COOKERS, ELECTRIC FRYPANS, JUG KETTLES AND STEAM IRONS.
THESE NEW PRODUCTS WILL FURTHER IMPROVE OUR COMPETITIVENESS IN EXPORT MARKETS
AND ARE EXPECTED TO PROVIDE A SOLID BOOST TO EXPORT VOLUMES.
CONSUMER ELECTRONICS
NU-WORLD IS NOW ONE OF THE LEADING PLAYERS IN 'CONSUMER ELECTRONICS' IN THE
SOUTHERN AFRICAN MARKET. THE TOP-END JAPANESE 'JVC' BRAND TOGETHER WITH OUR
IN-HOUSE PRICE-ENTRY 'NU-TEC' BRAND, COMMAND A SIZEABLE SHARE OF THE MARKET FOR
TELEVISIONS, HIFI'S, CAR AUDIO, VIDEO DECKS AND VIDEO CAMERAS.
THE NU-TEC BRAND OF CONSUMER ELECTRONICS WAS INTRODUCED TO THE SOUTH AFRICAN
MARKET JUST OVER 12 MONTHS AGO. THIS PRICE-ENTRY RANGE OF PRODUCTS IS GROWING
MONTH ON MONTH AND HAS WON A NICHE SHARE IN THE MARKET OVER THIS SHORT PERIOD.
NU-TEC TELEVISIONS, HIFI'S, CAR AUDIO, PORTABLES AND COMPONENT SYSTEMS ARE NOW
AVAILABLE THROUGH ALL LEADING RETAILERS OF 'BROWN GOODS'.
PROSPECTS
AT THE RELEASE OF THE YEAR END FINANCIAL RESULTS FOR THE FULL YEAR TO 31 AUGUST
1999, THE DIRECTORS REMARKED THAT THE GROUP HAD DEMONSTRATED ITS RESILIENCE
OVER THE PAST RECESSIONARY YEARS OF 1998 / 1999 WHICH WERE CATEGORISED BY
RECORD HIGH INTEREST RATES AND LOW DISCRETIONARY INCOME.
THE SOUTH AFRICAN ECONOMY AT THIS POINT IN TIME, IS DISPLAYING A POSITIVE
TURNAROUND AND THE FUNDAMENTALS ARE IN PLACE FOR IMPROVED ECONOMIC ACTIVITY AND
A RESURGENCE OF CONSUMER CONFIDENCE AND SPENDING.
THE ORGANIC GROWTH GENERATED BY THE GROUP OVER THE PAST DECADE HAS BEEN
ACHIEVED BY THE STRATEGIC DIVERSIFICATION INTO A BROADBASED 'ONE-STOP SUPPLIER'
FOR A COMPREHENSIVE RANGE OF 'BRANDED CONSUMER DURABLES'.
THE GLOBAL REACH OF THE GROUP IS SUCH THAT WE ARE IMPORTING PRODUCT FROM MORE
THAN 15 COUNTRIES AND EXPORTING ACROSS MOST CONTINENTS AROUND THE WORLD.
DIRECTORS ARE CONFIDENT THAT WITH THE RESURGENCE IN GROWTH OF THE SOUTH AFRICAN
ECONOMY AND THE CONTINUED PACE OF DELIVERY OF ELECTRIFICATION, THAT THE GROUP
IS ON TARGET FOR A SUSTAINABLE RETURN TO THE LEVELS OF GROWTH ACHIEVED
THROUGHOUT THE 1990'S.
M.S. GOLDBERG JOHANNESBURG
MANAGING DIRECTOR 14 APRIL 2000
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),
P.GROSS DIP LAW (RAND)
REGISTERED OFFICE TRANSFER SECRETARIES
35 - 3RD STREET MERCANTILE REGISTRARS LTD
WYNBERG, SANDTON 11 DIAGONAL STREET
2199 JOHANNESBURG
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