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STEERS HOLDINGS LIMITED
(LNCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 1969/004875/06)
("THE COMPANY")
AUDITED GROUP RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2000
DRUMMING UP WINNING RESULTS
TURNOVER UP 31%
ATTRIBUTABLE PROFIT UP 32%
HEADLINE EARNINGS PER SHARE UP 19%
DIVIDENDS PER SHARE UP 33%
INCOME STATEMENT
GROUP
FEBRUARY FEBRUARY
2000 1999 %
R000 R000 CHANGE
GROSS REVENUE 260 090 198 400 31
OPERATING PROFIT 25 304 17 286 46
NET INTEREST (PAID)/RECEIVED (1 473) 560
OPERATING PROFIT BEFORE TAXATION 23 831 17 846 34
TAXATION 8 668 6 381
OPERATING PROFIT AFTER TAXATION 15 163 11 465 32
ATTRIBUTABLE TO OUTSIDE
SHAREHOLDERS 119 114
ATTRIBUTABLE PROFIT 15 282 11 579 32
RETAINED EARNINGS - BEGINNING
OF YEAR 18 633 12 479
AS PREVIOUSLY DISCLOSED 21 633 13 961
ADJUSTMENT IN RESPECT OF PRIOR
YEARS (3 000) ( 1 482)
AVAILABLE FOR APPROPRIATION 33 915 24 058 41
DIVIDENDS 7 485 5 425
RETAINED EARNINGS - END OF YEAR 26 430 18 633 42
WEIGHTED AVERAGE NUMBER OF SHARES
IN ISSUE 62 247 696 59 046 354
OPERATING MARGIN (%) 9,7 8,7 11
EARNINGS PER SHARE (CENTS) 24,6 19,6 26
HEADLINE EARNINGS PER SHARE
(CENTS) 24,0 20,2 19
DIVIDENDS PER SHARE (CENTS) 12,0 9,0 33
NET ASSET VALUE PER SHARE (CENTS) 91,0 78,8 15
BALANCE SHEET
GROUP
FEBRUARY FEBRUARY
2000 1999
R000 R000
ASSETS
NON-CURRENT ASSETS 55 706 59 835
TANGIBLE FIXED ASSETS 16 681 18 781
INTANGIBLE FIXED ASSETS 32 601 35 586
LOANS 6 424 5 468
CURRENT ASSETS 59 247 43 667
INVENTORY 14 169 13 472
ACCOUNTS RECEIVABLE 29 416 22 011
BANK BALANCES AND CASH 15 662 8 184
TOTAL ASSETS 114 953 103 502
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES 58 123 51 147
ORDINARY SHAREHOLDERS' INTEREST 57 462 49 235
OUTSIDE SHAREHOLDERS' INTEREST 661 1 912
NON-CURRENT LIABILITIES 10 954 15 789
LONG-TERM LIABILITIES 9 568 15 335
DEFERRED TAXATION 1 386 454
CURRENT LIABILITIES 45 876 36 566
ACCOUNTS PAYABLE 13 175 12 139
LONG-TERM LIABILITIES -
SHORT-TERM PORTION 6 918 9 474
SHAREHOLDERS FOR DIVIDEND 4 748 3 442
SOUTH AFRICAN REVENUE SERVICE 2 321 1 121
BANK OVERDRAFT 18 714 10 390
TOTAL EQUITY AND LIABILITIES 114 953 103 502
CASH FLOW STATEMENT
GROUP
FEBRUARY FEBRUARY
2000 1999
R000 R000
NET CASH FLOW FROM OPERATING
ACTIVITIES 10 151 7 603
CASH GENERATED BY OPERATIONS 24 339 18 270
NET INTEREST (PAID)/RECEIVED (1 473) 560
TAXATION PAID (6 536) (6 845)
DIVIDENDS PAID (6 179) (4 382)
NET CASH FLOW FROM INVESTING
ACTIVITIES (1 801) (21 827)
EXPENDED ON NON-CURRENT ASSETS (10 038) (24 401)
PROCEEDS FROM DISPOSAL OF
NON-CURRENT ASSETS 8 237 2 574
NET CASH INFLOW FROM
FINANCING ACTIVITIES (9 196) 4 890
(DECREASE)/INCREASE IN
SHARE CAPITAL AND RESERVES (873) 6 561
DECREASE IN LONG-TERM LIABILITIES (8 323) (1 671)
CHANGE IN CASH AND CASH
EQUIVALENTS (846) (9 334)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR (2 206) 7 128
CASH AND CASH EQUIVALENTS AT
END OF YEAR (3 052) (2 206)
OVERVIEW
STEERS HOLDINGS LIMITED IS PLEASED TO ANNOUNCE ANOTHER SET OF EXCEPTIONAL
RESULTS. DESPITE THE EFFECTS OF HIGH INTEREST RATES AT THE BEGINNING OF THIS
FINANCIAL YEAR AND INCREASED COMPETITION IN THE FAST FOOD MARKET, THE GROUP HAS
MET ITS EARNINGS GROWTH AND OUTLET EXPANSION TARGETS FOR THE YEAR UNDER REVIEW.
THE GROUP'S STRATEGIC INTENT IS TO REMAIN THE LEADING MARKETER AND DEVELOPER OF
BRANDED FAST FOOD CONCEPTS ON THE AFRICAN CONTINENT. LEADING BRANDS, FOCUSED
BUSINESS UNITS AND SOLID SUPPORT INFRASTRUCTURES ARE KEY TO STEERS HOLDINGS'
SUCCESS.
FINANCIAL RESULTS
DURING THE YEAR UNDER REVIEW, TURNOVER INCREASED BY 31% FROM R198 MILLION TO
R260 MILLION. THE INCREASE IN ATTRIBUTABLE PROFIT FROM R11,5 MILLION TO R15,2
MILLION IS IN LINE WITH THE GROWTH IN TURNOVER. THIS RESULTED IN AN INCREASE IN
HEADLINE EARNINGS PER SHARE OF 19% FROM 20,2 CENTS TO 24,0 CENTS. OPERATING
MARGIN INCREASED FROM 8,7% TO 9,7% MAINLY AS A RESULT OF THE GROUP'S ABILITY TO
OPEN NEW OUTLETS WITHOUT THE CORRESPONDING EXPANSION IN ITS OPERATING
INFRASTRUCTURE.
CONVERSION OF 'N' ORDINARY SHARES
IN NOVEMBER 1999, THE BOARD OF DIRECTORS RESOLVED TO CONVERT THE 'N' ORDINARY
SHARES TO ORDINARY SHARES ON A ONE-FOR-ONE BASIS IN AN EFFORT TO IMPROVE
TRADABILITY OF THE ORDINARY SHARES AND TO ATTRACT NEW INVESTORS.
CHANGE IN ACCOUNTING POLICIES
DURING THE YEAR UNDER REVIEW, THE GROUP CHANGED SEVERAL OF ITS ACCOUNTING
POLICIES IN ORDER TO BRING THEM IN LINE WITH GENERALLY ACCEPTED ACCOUNTING
PRACTICE. AS A RESULT, THE GROUP NOW:
* ACCOUNTS FOR WORK IN PROGRESS ON THE PERCENTAGE OF COMPLETION METHOD;
* AMORTISES GOODWILL OVER ITS EXPECTED USEFUL LIFE;
* PROVIDES FOR AMORTISATION OF TRADEMARKS ARISING ON CONSOLIDATION;
* INCLUDES OVERHEAD COSTS IN THE VALUATION OF INVENTORY; AND
* ACCOUNTS FOR DIFFERENCES ARISING FROM THE TRANSLATION OF THE FINANCIAL
STATEMENTS OF FOREIGN SUBSIDIARIES AS EQUITY.
ACQUISITIONS
THE GROUP ACQUIRED THE OPERATIONS OF 4 STEERS OUTLETS AND 1 FISHAWAYS OUTLET
DURING THE YEAR. THE PRIMARY REASON FOR THESE ACQUISITIONS WAS TO PROTECT THE
BRAND AND IMAGE OF THE GROUP. DURING THE YEAR, 6 STEERS AND 3 DEBONAIRS PIZZA
GROUP-OWNED OUTLETS WERE SOLD ON TO SUITABLE FRANCHISEES.
DIVISIONAL RESULTS
THE GROWTH IN STORE NUMBERS, COUPLED WITH EFFECTIVE MARKETING CAMPAIGNS, HAS
RESULTED IN AN INCREASE IN TURNOVER OF 40,4% FOR THE FRANCHISING DIVISION.
OPERATING PROFIT BEFORE TAXATION GREW BY 9,8% FROM R8,9 MILLION TO R9,7 MILLION
TURNOVER IN THE MANUFACTURING AND DISTRIBUTION DIVISION INCREASED FROM R126,7
MILLION TO R163,3 MILLION. THE INCREASE IN TURNOVER OF 28,9% IS MAINLY
ATTRIBUTABLE TO THE HIGHER VOLUMES OF SALES GENERATED BY THE FRANCHISED
OUTLETS. THE GROUP'S DRIVE FOR IMPROVED QUALITY AND PRICING RESULTED IN AN
INCREASE IN OPERATING PROFIT BEFORE TAXATION FOR THE DIVISION OF 133,8% FROM
R6,6 MILLION TO R15,4 MILLION.
SEGMENTAL INFORMATION
TURNOVER OPERATING PROFIT
BEFORE TAXATION
FEB FEB FEB FEB
2000 1999 % 2000 1999 %
R000 R000 GROWTH R000 R000 GROWTH
FRANCHISING 106 047 75 518 40,4 9 747 8 877 9,8
MANUFACTURING AND
DISTRIBUTION 163 304 126 682 28,9 15 383 6 579 133,8
OTHER 18 501 12 199 51,7 8 380 6 663 25,8
ELIMINATIONS (27 762) (15 999) 73,5 (9 679) (4 273) 126,5
260 090 198 400 23 831 17 846
FRANCHISING
OUTLETS IN OPERATION AS AT 29 FEBRUARY 2000
SOUTH AFRICA REST OF AFRICA TOTAL
BEGINNING NET END BEGINNING NET END BEGINNING NET END
OF YEAR GROWTH OF OF YEAR GROWTH OF OF YEAR GROWTH OF
YEAR YEAR YEAR
STEERS 253 8 261 24 5 29 277 13 290
DEBONA
IRS 72 33 105 4 7 11 76 40 116
FISH
AWAYS 0 3 3 0 0 0 0 3 3
325 44 369 28 12 40 353 56 409
STEERS
DURING THE YEAR UNDER REVIEW STEERS' IN-STORE TURNOVER IN SOUTH AFRICA SHOWED A
15% GROWTH ON THE PREVIOUS YEAR. THE BRAND HAS MAINTAINED ITS NUMBER ONE
POSITION IN THE SOUTH AFRICAN BURGER MARKET.
THE BRAND'S STRATEGY HAS BEEN ADAPTED TO TAKE ACCOUNT OF CHANGING TRADING
CONDITIONS AND ITS EVOLVING TARGET MARKET PROFILE IN SOUTH AFRICA. THE BRAND'S
PRODUCT RANGE, MENU AND COMMUNICATIONS STRATEGY ARE BEING ADJUSTED ACCORDINGLY.
DEBONAIRS PIZZA
NINE YEARS AFTER ITS INCEPTION, DEBONAIRS PIZZA OUTLETS CONTINUE TO HAVE A 100%
SUCCESS RATE. WITH A 22% MARKET SHARE, DEBONAIRS PIZZA IS THE LEADING PLAYER IN
THE SOUTH AFRICAN PIZZA MARKET. IN-STORE TURNOVER IN SOUTH AFRICA INCREASED BY
118% ON THE PREVIOUS YEAR.
FISHAWAYS
FISHAWAYS, LAUNCHED LAST YEAR, IS STILL IN ITS DEVELOPMENT PHASE. MARKET
TRENDS INDICATE AN INCREASED DEMAND FOR FISH AND SEAFOOD OPTIONS, WHICH BODES
WELL FOR FISHAWAYS IN THE COMING YEAR. AT 29 FEBRUARY 2000, FISHAWAYS HAD THREE
GAUTENG-BASED STORES IN OPERATION. BRAND DEVELOPMENT AND EXPANSION STRATEGIES
HAVE BEEN FORMALISED FOR FUTURE GROWTH.
INTERNATIONAL FRANCHISING
AT 29 FEBRUARY 2000, THE STEERS BRAND HAD A PRESENCE IN 12 COUNTRIES, WHILST
DEBONAIRS PIZZA WAS OPERATIONAL IN 7. THE GROUP INTENDS TO INCREASE THE NUMBER
OF OUTLETS IN THESE TERRITORIES, AS WELL AS TO EXPAND INTO NEW COUNTRIES ON THE
CONTINENT. EXPERIENCE TO DATE HAS SHOWN THAT THESE OUTLETS TYPICALLY GENERATE
SUBSTANTIALLY HIGHER TURNOVERS THAN EQUIVALENT LOCAL STORES. THIS BODES WELL
FOR FURTHER EXPANSION INTO NEW TERRITORIES IN THE YEAR AHEAD.
MANUFACTURING AND DISTRIBUTION
THE MANUFACTURING AND DISTRIBUTION DIVISION HAS REPORTED A HEALTHY INCREASE IN
TURNOVER FOR THE YEAR UNDER REVIEW. FOLLOWING THE EXPANSION OF THE
MIDRAND-BASED FACILITY IN 1998, THE DIVISION HAS AMPLE CAPACITY FOR INCREASED
PRODUCTION AND DISTRIBUTION.
WHOLESALE
THE WHOLESALE BUSINESS UNIT IS CENTRAL TO THE GROUP'S OVERALL PERFORMANCE,
SOURCING PRODUCTS FOR THE FRANCHISED OUTLETS AT THE MOST COMPETITIVE PRICES.
THE PURCHASING POWER RESULTING FROM BULK-BUYING HAS LED TO SIGNIFICANT COST
REDUCTIONS FOR THE FRANCHISED BRANDS.
STEERS RETAIL PRODUCTS
THIS BUSINESS UNIT EXPERIENCED A 20% GROWTH IN TURNOVER AND A 25% INCREASE IN
OPERATING PROFIT BEFORE TAXATION DURING THE YEAR UNDER REVIEW. IN LINE WITH THE
GROUP'S INTERNATIONAL EXPANSION PLANS, NEGOTIATIONS HAVE BEEN ENTERED INTO FOR
THE EXPORT OF THE PRODUCT RANGE TO COUNTRIES WHERE STEERS AND DEBONAIRS PIZZA
OUTLETS HAVE BEEN ESTABLISHED. A NUMBER OF EXPORT ENQUIRIES HAVE ALSO BEEN
RECEIVED FROM NORTH AMERICA, EUROPE AND AUSTRALASIA.
POUYOUKAS FOODS
POUYOUKAS FOODS, WHICH PROVIDES A RANGE OF WHOLESOME FOOD PRODUCTS TO NATIONAL
SUPERMARKET CHAINS, EXPERIENCED A SATISFACTORY INCREASE IN SALES. IT ALSO
SUPPLIES CERTAIN ITEMS, WHICH WERE PREVIOUSLY OUTSOURCED, TO THE GROUP'S
WHOLESALE UNIT FOR DISTRIBUTION TO FRANCHISED OUTLETS.
PROSPECTS
THE BOARD IS CONFIDENT THAT, WITH THE COMBINATION OF IMPROVED ECONOMIC TRADING
CONDITIONS, CONTINUED DEMAND FOR STEERS, DEBONAIRS PIZZA AND FISHAWAYS
FRANCHISES LOCALLY AND IN AFRICA AND THE GROUP'S FOCUSED MANAGEMENT STRUCTURES,
STEERS HOLDINGS WILL ACHIEVE EXCELLENT RESULTS IN THE NEXT FINANCIAL YEAR.
YEAR 2000 COMPLIANCE
THE GROUP COMPLETED ITS PREPARATION AND TESTING THROUGHOUT ALL ITS OPERATIONS
IN ACCORDANCE WITH ITS YEAR 2000 COMPLIANCE PROGRAMME. THE GROUP'S OPERATIONS
AND SYSTEMS DID NOT EXPERIENCE ANY DIFFICULTIES AS A RESULT OF THE MILLENNIUM
DATE CHANGE.
DIVIDENDS
NOTICE IS HEREBY GIVEN THAT A FINAL DIVIDEND (NUMBER 15) OF 7 CENTS PER
ORDINARY SHARE HAS BEEN PROPOSED BY THE DIRECTORS. THE DIVIDEND WILL BE PAYABLE
TO ALL SHAREHOLDERS REGISTERED IN THE BOOKS OF THE COMPANY AS AT THE CLOSE OF
BUSINESS ON 9 JUNE 2000. THE DIVIDEND WILL BE PAYABLE ON 23 JUNE 2000.
ANNUAL REPORT
THE ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS OF STEERS HOLDINGS LIMITED
FOR THE YEAR ENDED 29 FEBRUARY 2000 WILL BE POSTED TO SHAREHOLDERS ON OR ABOUT
25 MAY 2000.
ON BEHALF OF THE BOARD
JL HALAMANDRES P HALAMANDARIS
CHIEF EXECUTIVE OFFICER CHAIRMAN
24 MAY 2000
REGISTERED OFFICE 478 JAMES CRESCENT MIDRAND 1685 (PO BOX 2884 HALFWAY
HOUSE 1685)
E-MAIL INVESTORRELATIONS@STEERS.CO.ZA WEBSITE WWW.STEERS.CO.ZA
TRANSFER SECRETARIES COMPUTERSHARE SERVICES LIMITED (REGISTRATION NUMBER
58/03546/06)
4TH FLOOR EDURA HOUSE 40 COMMISSIONER STREET JOHANNESBURG 2001
(PO BOX 62391 MARSHALLTOWN 2107)
DIRECTORS P HALAMANDARIS (CHAIRMAN) T HALAMANDARIS (MANAGING DIRECTOR)
JL HALAMANDRES (CHIEF EXECUTIVE OFFICER) JW HAMILTON HR LEVIN* DH
PAPPADOPOULOS N STOKES S TRIAND*+ * NON-EXECUTIVE + AMERICAN
STEERS ANNOUNCES DELIVERS IMPRESSIVE RESULTS (ANNUAL RESULTS)
24 MAY 2000
STEERS HOLDINGS DELIVERS IMPRESSIVE RESULTS
STEERS HOLDINGS LIMITED TODAY ANNOUNCED ITS AUDITED RESULTS FOR THE YEAR ENDED
29 FEBRUARY 2000, REPORTING A 32% INCREASE IN ATTRIBUTABLE PROFIT.
TURNOVER IS UP 31% FROM R198 MILLION TO R260 MILLION. EARNINGS PER SHARE HAVE
INCREASED BY 26% AND HEADLINE EARNINGS PER SHARE HAVE INCREASED BY 19%.
JOHN HALAMANDRES, CEO, STEERS HOLDINGS LIMITED, SAYS: "DESPITE OBSTACLES SUCH
AS HIGH INTEREST RATES AT THE BEGINNING OF THE FINANCIAL YEAR AND INCREASED
COMPETITION IN THE MARKET, STEERS HOLDINGS IS PLEASED TO ANNOUNCE ANOTHER SET
OF EXCEPTIONAL RESULTS. BASED ON THE STRENGTH OF OUR FRANCHISED BRANDS, FOCUSED
MANAGEMENT AND OUR PREFERRED PRODUCTS, I AM CONFIDENT THAT STEERS HOLDINGS WILL
CONTINUE DELIVERING EXCELLENT RESULTS.
BOTH THE STEERS AND DEBONAIRS PIZZA BRANDS HOLD THE LEADING POSITIONS IN THEIR
RESPECTIVE MARKETS, WHICH WE INTEND TO MAINTAIN IN THE FUTURE."
THE GROUP'S FOCUS ON EXPANDING ITS FRANCHISED BRANDS BEYOND SOUTH AFRICA'S
BORDERS WAS REALISED FURTHER WITH THE SUCCESSFUL OPENING OF 17 NEW FRANCHISED
OUTLETS IN THE YEAR UNDER REVIEW. THIS BRINGS THE TOTAL NUMBER OF STEERS AND
DEBONAIRS PIZZA OUTLETS IN OPERATION OUTSIDE OF SOUTH AFRICA TO 40.
IN-STORE TURNOVERS ACROSS THE GROUP HAVE INCREASED SIGNIFICANTLY IN SOUTH
AFRICA. STEERS' OVERALL IN-STORE TURNOVER INCREASED BY 15%, WHILST DEBONAIRS
PIZZA ACHIEVED AN IMPRESSIVE 118% INCREASE.
THE YEAR UNDER REVIEW SAW SIGNIFICANT FOCUS BEING PLACED ON THE GROUP'S
MANAGEMENT STRUCTURES. THIS HAS RESULTED IN SOLID PERFORMANCES FROM THE
BUSINESS UNITS AND THE EFFICIENT MANAGEMENT OF RESOURCES ACROSS THE GROUP.
HALAMANDRES CONCLUDES, "OUR IMPRESSIVE PERFORMANCE OVER THE PAST FINANCIAL YEAR
CAN BE ATTRIBUTED TO OUR LEADING BRANDS, FOCUSED BUSINESS UNITS AND SOLID
INFRASTRUCTURES. THE ONE ELEMENT THAT REMAINS UNCHANGED AFTER FORTY YEARS IN
THIS BUSINESS IS OUR PASSION FOR CUSTOMER SATISFACTION AND THE QUALITY OF OUR
PRODUCTS. THIS COMMITMENT IS SET TO CONTINUE AS WE STRENGTHEN OUR PRESENCE
THROUGHOUT THE AFRICAN CONTINENT AND AS WE EXPAND INTO ADDITIONAL INTERNATIONAL
MARKETS."
ENDS
WRITTEN AND DISTRIBUTED BY : ARCAY FINANCIAL COMMUNICATIONS
ON BEHALF OF : STEERS HOLDINGS LIMITED
FURTHER INFORMATION : JANET COPPIN
TEL : +27 11 480 8573
FAX : +27 11 480 8556
CELL : 083 456 3904
E-MAIL : COPPJ@ARCAY.CO.ZA
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