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NU-WORLD HOLDINGS LIMITED
FINAL REPORT OF THE GROUP FOR THE YEAR ENDED 31 AUGUST 2000-11-06
TEN CONSECUTIVE YEARS OF GROWTH IN TURNOVER, OPERATING INCOME, ATTRIBUTABLE
EARNINGS, EARNINGS PER SHARE AND DIVIDEND
TURNOVER UP 23.9%
NET OPERATING INCOME UP 39.8%
PROFIT BEFORE TAXATION UP 50.7%
ATTRIBUTABLE INCOME UP 28.9%
HEADLINE EARNINGS PER SHARE UP 27.2%
INCOME STATEMENT
YEAR ENDED YEAR ENDED % CHANGE
31 AUG 2000 31 AUG 1999
(R000) (R000)
TURNOVER 653 772 527 706 23.9
NET OPERATING INCOME 54 212 38 791 39.8
DEPRECIATION 4 052 3 672
INTEREST PAID 6 414 6 098
INCOME BEFORE TAXATION 43 746 29 021 50.7
TAXATION 12 013 6 462
INCOME AFTER TAXATION 31 733 22 559 40.7
OUTSIDE SHAREHOLDER'S INTEREST 2 648
ATTRIBUTABLE INCOME 29 085 22 559 28.9
DIVIDEND 4 900 3 625
RETAINED EARNINGS FOR THE YEAR 24 185 18 934
HEADLINE EARNINGS 29 085 22 559 28.9
EARNINGS PER SHARE (CENTS) 134.1 105.8 26.7
EARNINGS PER SHARE (CENTS)
- WEIGHTED 134.8 105.9 27.2
HEADLINE EARNINGS PER SHARE
(CENTS) 134.1 105.8 26.7
HEADLINE EARNINGS PER SHARE
(CENTS)- WEIGHTED 134.8 105.9 27.2
DIVIDEND PER SHARE (CENTS) 22.6 17.0
DIVIDEND COVER 5.9 6.2
INTEREST COVER 7.8 5.8
SHARES IN ISSUE 21 695 21 327 1.7
SHARES IN ISSUE - WEIGHTED 21 583 21 300 1.3
BALANCE SHEET
YEAR ENDED YEAR ENDED
31 AUG 2000 31 AUG 1999
(R000) (R000)
ASSETS
NON-CURRENT ASSETS
FIXED ASSETS 28 245 24 681
INTANGIBLE ASSETS 7 567
CURRENT ASSETS
INVENTORY 132 947 80 324
TRADE AND OTHER RECEIVABLES 157 150 113 622
CASH EQUIVALENTS 60 531 79 418
TOTAL ASSETS 386 440 298 045
EQUITY AND LIABILITIES
SHAREHOLDER'S INTEREST 230 981 184 157
NON-CURRENT LIABILITIES 17 433 23 261
CURRENT LIABILITIES
TRADE AND OTHER PAYABLES 136 995 88 460
CURRENT PORTION OF INTEREST
BEARING LIABILITIES 1 031 2 167
TOTAL EQUITY AND LIABILITIES 386 440 298 045
DEBT: EQUITY RATIO 0.0% 0.0%
STATEMENT OF CHANGES IN EQUITY
YEAR ENDED YEAR ENDED
31 AUG 2000 31 AUG 1999
(R000) (R000)
EQUITY AT BEGINNING OF THE YEAR 184 157 162 873
SHARE CAPITAL ISSUED /
(REDEEMED) (328) 2 350
OUTSIDE SHAREHOLDER'S INTEREST 22 880
FOREIGN CURRENCY TRANSITION
RESERVE 87
RETAINED EARNINGS FOR THE YEAR 24 185
EQUITY AT END OF THE YEAR 230 981 184 157
CASH FLOW STATEMENT
YEAR ENDED YEAR ENDED
31 AUG 2000 31 AUG 1999
(R000) (R000)
CASH GENERATED/(UTILISED) BY
OPERATING ACTIVITIES (5 358) 9 158
CASH GENERATED FROM OPERATIONS 7 256 26 018
INTEREST PAID (6 414) (6 098)
DIVIDEND PAID (328) (1 276)
NORMAL TAX ON COMPANIES (5 872) (9 486)
CASH FLOWS FROM INVESTING
ACTIVITIES (18 414) (4 792)
PURCHASE OF TANGIBLE FIXED ASSETS (7 417) (4 975)
PROCEEDS ON DISPOSAL OF FIXED
ASSETS 129 183
INVESTMENT IN SUBSIDIARY (11 126)
CASH FLOWS FROM FINANCING
ACTIVITIES 4 885 (8 180)
REPAYMENT OF LONG TERM BORROWING (7 167) (8 180)
INCREASE IN TRANSLATION RESERVE 201
PROCEEDS FROM OUTSIDE
SHAREHOLDERS 11 851
NET DECREASE IN CASH AND
CASH EQUIVALENTS (18 887) (3 814)
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE YEAR 79 418 83 232
CASH AND CASH EQUIVALENTS AT THE
END OF THE YEAR 60 531 79 418
COMMENTS
DIRECTORS ARE PLEASED TO REPORT ON AN EXCELLENT SET OF RESULTS FOR THE
FINANCIAL YEAR TO 31 AUGUST 2000. THESE RESULTS, WHICH REPRESENT THE TENTH
CONSECUTIVE YEAR OF GROWTH ACROSS THE BOARD, HAVE BEEN ACHIEVED IN AN EVENTFUL
YEAR.
THE GROUP MADE ITS FIRST OFFSHORE ACQUISITION, ACQUIRING A CONTROLLING INTEREST
IN PRIMA-AKAI AUSTRALASIA PTY LTD, EFFECTIVE FROM APRIL 2000. PRIMA-AKAI
MARKETS THE 'AKAI' BRAND OF CONSUMER ELECTRONICS IN AUSTRALIA AND NEW ZEALAND
AS WELL AS A RANGE OF BRANDED SMALL ELECTRICAL APPLIANCES.
FOR THE TENTH YEAR IN SUCCESSION, THE GROUP HAS PRODUCED GROWTH IN TURNOVER,
OPERATING INCOME, ATTRIBUTABLE INCOME, HEADLINE EARNINGS PER SHARE AND DIVIDEND
TURNOVER HAS INCREASED BY 23.9% TO R653,772M. THIS REFLECTS AN INCREASE OF
R126M ON 1999 (AUGUST 1999 : R527,706M).
NET OPERATING INCOME BEFORE DEPRECIATION AND INTEREST PAID IS UP 39.8% TO
R54,212M REFLECTING A MARKED IMPROVEMENT IN OPERATING MARGINS.
INTEREST PAID IS MARGINALLY HIGHER, UP 5.2% TO R6,414M, HOWEVER INTEREST COVER
IS SUBSTANTIALLY IMPROVED TO 7.8 TIMES FROM 5.8 FOR 1999.
THE GROUP REMAINS IN AN UNGEARED POSITION WITH CASH BALANCES OF R60,531M AT THE
YEAR END.
INCOME BEFORE TAX IS UP 50.7% TO R43,746M (1999 : R29,021M).
INCOME AFTER TAX OF R31,733M HAS INCREASED BY 40.7% (1999 : R22,559M).
THE EFFECTIVE TAX RATE HAS INCREASED FROM 22.3% TO 27.5%. THIS IS DUE IN PART
TO THE HIGHER AUSTRALIAN TAX RATE PERTAINING TO THE ACQUISITION, AS WELL AS TO
THE RATE ADJUSTMENT IN THE 1999 YEAR.
OUTSIDE SHAREHOLDERS INTEREST REPRESENTS FIVE TRADING MONTHS FOR THE NEWLY
ACQUIRED AUSTRALIAN SUBSIDIARY AMOUNTING TO R2,648M.
NET INCOME ATTRIBUTABLE TO ORDINARY SHAREHOLDERS HAS GROWN BY 28.9% TO R29,085M
(1999 : R22,559M).
HEADLINE EARNINGS PER SHARE ON A WEIGHTED BASIS - H.E.P.S. IS UP 27.2% TO
134.8 CENTS (1999 : 105.9 CENTS). THE WEIGHTED NUMBER OF SHARES IN ISSUE IS
MARGINALLY UP BY 1.3% ON THE PRIOR YEAR.
DIVIDEND PER SHARE HAS INCREASED BY 32.9% TO 22.6 CENTS FROM 17.0 CENTS LAST
YEAR. THE DIVIDEND COVER REFLECTS A CONSERVATIVE 5.9 TIMES EARNINGS.
CASH UTILISED BY OPERATIONS AMOUNTS TO R5,358M (1999 : GENERATED R9,158M).
CASH WAS UTILISED FOR THE TAKE ON OF THE JAMES RALPH STOCK AND THE INCREASED
WORKING CAPITAL REQUIREMENTS.
ACQUISITION OF PRIMA-AKAI AUSTRALASIA PTY LTD
EFFECTIVE THE 1ST APRIL 2000, THE GROUP ACQUIRED A CONTROLLING INTEREST IN THE
CONSUMER ELECTRONIC BRAND " AKAI" IN AUSTRALIA AND NEW ZEALAND, THROUGH THE
ACQUISITION OF PRIMA AUSTRALASIA PTY LTD - FOR R11,1 MILLION.
THIS IS THE FIRST ACQUISITION BY THE GROUP SINCE ITS LISTING IN 1987 AND MARKS
A MAJOR STEP FORWARD FOR NU-WORLD'S OFF-SHORE AMBITIONS.
PRIMA-AKAI IS AN IMPORTER AND DISTRIBUTOR OF CONSUMER ELECTRONICS AND SMALL
ELECTRICAL APPLIANCES. APART FROM THE 'AKAI' BRAND, PRIMA HAS THE RIGHTS TO A
STABLE OF INTERNATIONAL BRANDS SUCH AS 'PRIMA', 'MAGIC LINE', 'WINTERWARM',
'TIMEX AUDIO', 'FENICI' AND 'IDEAL', IN AUSTRALIA AND NEW ZEALAND.
PRIMA WILL STRENGTHEN THE GROUP'S POSITION AS AN INTERNATIONAL PLAYER IN
BRANDED CONSUMER ELECTRONICS AND ELECTRICAL APPLIANCES.
THIS ACQUISITION WILL BRING THE GROUP CLOSER TO THE R1 BILLION TURNOVER MARK
FOR THE FORTHCOMING FINANCIAL YEAR TO AUGUST 2001.
THE "AKAI" BRAND IS A PARTICULARLY STRONG AND WELL RECOGNIZED LABEL IN CONSUMER
ELECTRONICS IN AUSTRALIA, ACROSS A BROAD RANGE OF QUALITY PRODUCTS INCLUDING,
TELEVISIONS, HIFI'S, VIDEO RECORDERS, DVD PLAYERS AND COMPONENT SYSTEMS.
FROM NU-WORLD'S PERSPECTIVE THE ACQUISITION WILL FURTHER SECURE AND BOOST
IN-HOUSE MANUFACTURED EXPORTS TO AUSTRALIA AND NEW ZEALAND.
MANAGEMENT EXPECTS POSITIVE SPIN-OFFS FROM THE ENLARGED GROUP'S PURCHASING
POWER - FROM SUPPLIERS IN SOUTH EAST ASIA AND CHINA.
RAND HEDGE BY AUGUST 2002 MANAGEMENT IS BUDGETING FOR A MINIMUM 20% OF
EARNINGS BEING GENERATED FROM OFF-SHORE OPERATIONS AND HARD CURRENCY EXPORTS.
AGENCY / DISTRIBUTION - CASIO / JAMES RALPH (PTY) LTD
NU-WORLD HAS CONCLUDED AN AGREEMENT WITH THE DIRECTORS OF JAMES RALPH (PTY)
LTD. WITH EFFECT FROM THE 1ST OF AUGUST 2000, NU-WORLD HAS TAKEN OVER THE
FINANCE AND LOGISTIC OPERATIONS OF JAMES RALPH (PTY) LTD.
THIS NEW DIVISION COMPRISES A HIGHLY REGARDED RANGE OF INTERNATIONALLY BRANDED
CONSUMER DURABLES WHICH INCLUDES :-
CASIO WATCHES * CALCULATORS * CAMERAS * HANDHELD COMPUTERS *
ELECTRONIC MUSICAL INSTRUMENTS * CASH REGISTERS
SAMSUNG CASH REGISTERS
SANJI CALCULATORS * MAGNETIC TAPE
MANAGEMENT ANTICIPATES SUBSTANTIAL BENEFITS FROM THIS ARRANGEMENT. THE
ADDITIONAL TURNOVER WILL BE INJECTED INTO NU-WORLD'S EXISTING INFRASTRUCTURE
WITHOUT INCURRING SIGNIFICANT ADDITIONAL COSTS.
SYNERGIES IN TERMS OF IMPROVED PROFITABILITY FOR JAMES RALPH (PTY) LTD,
INCLUDE IMPROVEMENTS IN:- PROCUREMENT / FREIGHT / FINANCE COSTS /
DISTRIBUTION COSTS / INCREASED SALES POTENTIAL TO NU-WORLD'S WIDER CUSTOMER
BASE AND BENEFITS FROM NU-WORLD'S INFORMATION TECHNOLOGY AND MANAGEMENT
INFORMATION SYSTEMS.
BRANDS
NU-WORLD IS A LEADING SOUTH AFRICAN SOURCE FOR BRANDED CONSUMER DURABLES. THE
GROUP MANUFACTURES, IMPORTS, EXPORTS AND DISTRIBUTES A ONE-STOP SUPPLY OF A
BROAD RANGE OF CONSUMER DURABLES UNDER A TOTAL OF 19 INTERNATIONAL AND LOCAL
BRANDS.
EXPORTS / IN-HOUSE MANUFACTURING OF SMALL ELECTRICAL APPLIANCES
EXPORT TURNOVER HAS INCREASED BY MORE THAN 50% YEAR ON YEAR. NEW LOW-COST
PRODUCTS MANUFACTURED IN OUR WYNBERG FACTORY ARE SELLING WELL INTO THE UNITED
KINGDOM, EUROPE, THE MIDDLE EAST, AUSTRALIA AND AFRICA.
AFRICAN EXPORTS HAVE RECEIVED A BOOST FROM SOUTH AFRICAN RETAILERS ESTABLISHING
A PRESENCE IN COUNTRIES APART FROM THE SADC.
ESKOM'S ONGOING ELECTRIFICATION PROGRAMME CONTINUES TO INCREASE THE OVERALL
SIZE OF THE MARKET FOR ELECTRICAL APPLIANCES. WHILST NEW CONSUMERS PURCHASE
THE BASIC PRICE-ENTRY APPLIANCES OF NECESSITY, ESTABLISHED CONSUMERS ARE
UPGRADING THEIR FIRST TIME PURCHASES WITH A BROADER RANGE OF APPLIANCES.
CONSUMER ELECTRONICS - JVC * NU-TEC
JVC OF JAPAN HAVE INTRODUCED A NUMBER OF INNOVATIVE PRODUCTS OVER THE PAST
YEAR. JVC SUPERFLAT TELEVISIONS AND SPECIALISED MICRO COMPONENT AUDIO SYSTEMS
WILL BE AVAILABLE TO CONSUMERS AT MAJOR RETAILERS OVER THE CHRISTMAS PERIOD.
JVC HAS LAUNCHED A STATE-OF-THE-ART MULTIMEDIA HOME ENTERTAINMENT SYSTEM WHICH
WAS VOTED BEST EUROPEAN PRODUCT OF THE YEAR. A LIMITED NUMBER OF THESE SYSTEMS
WILL BE AVAILABLE TO S.A. CONSUMERS THIS YEAR.
THE NU-TEC RANGE OF PRODUCTS, THE IN-HOUSE VALUE BRAND OF CONSUMER ELECTRONICS
- HAS UNDERGONE AN EXTENSIVE EXPANSION. THE COMPREHENSIVE RANGE OF NU-TEC
PRODUCTS IS NOW GAINING RECOGNITION AS A 'ONE-STOP PRICE ENTRY BRAND'.
FLAT-LOOK TELEVISIONS, FULLY-FEATURED DVD PLAYERS, CUTTING-EDGE DESIGN AUDIO
SYSTEMS, VIDEO DECKS AND CAR AUDIO, HAVE BEEN ADDED TO THE RANGE DURING THE
PERIOD.
'WHITE GOODS', 'LAUNDRY', 'COOKING' AND 'REFRIGERATION'
WITH THE RATIONALIZATION IN THE S.A. MARKET OVER THE PAST YEAR, NEW
OPPORTUNITIES ARE EMERGING. THE GROUP IS A RELATIVELY SMALL NICHE PLAYER IN THE
LARGE APPLIANCE INDUSTRY, BUT A NUMBER OF NEW PRODUCTS HAVE BEEN INTRODUCED
OVER THE PAST FEW MONTHS. A NEW RANGE OF TABLETOP STOVES WILL BE LAUNCHED
LATER THIS YEAR. THE APPLIANCES ARE SOURCED FROM LEADING MANUFACTURERS IN SOUTH
EAST ASIA, CHINA, TURKEY, SPAIN AND SOUTH AMERICA.
FURNITURE
THIS DIVISION IS PROVING TO BE AN ENORMOUSLY SUCCESSFUL GROWTH AREA. THE GROUP
IMPORTS RANGES WITHIN SELECTED NICHE SUB-MARKETS OF THE BROAD FURNITURE MARKET.
THE INITIAL RANGE OF COMPLIMENTARY ADD-ON PRODUCTS SUCH AS TV AND HIFI STANDS
FOR OUR JVC AND NU-TEC RANGES, HAS GROWN WITHIN THE PERIOD UNDER REVIEW TO
INCLUDE, ENTERTAINMENT UNITS, DINETTES, BED SETS, OFFICE FURNITURE FOR THE
HOME, DESKS AND WORK STATIONS. MOST OF THE FURNITURE ITEMS ARE IMPORTED IN SKD
KIT FORM - FOR ASSEMBLY BY THE CONSUMER.
AIR CONDITIONING - FUJITSU * GOLDAIR * WHITE WESTINGHOUSE
GROWTH HAS BEEN EXCELLENT WITHIN THIS DIVISION WHICH IMPORTS AND DISTRIBUTES
QUALITY RANGES UNDER 3 INTERNATIONAL BRANDS.
PROSPECTS
WITH THE ACQUISITION OF PRIMA-AKAI AUSTRALIA, OUR LEADING POSITION IN SOUTHERN
AFRICA AND OUR IN-ROADS INTO THE UNITED KINGDOM, THE GROUP IS EMERGING AS AN
INTERNATIONAL PLAYER IN BRANDED CONSUMER ELECTRONICS AND ELECTRICAL APPLIANCES.
OVER THE PAST NUMBER OF YEARS, THE GROUP HAS DEMONSTRATED ITS RESILIENCE BY
SUSTAINING A REMARKABLE LEVEL OF GROWTH, NOTWITHSTANDING THE DIFFICULT ECONOMIC
CLIMATE IN SOUTHERN AFRICA. THE INTERNATIONAL DIVERSIFICATION HAS ADDED AN
ADDITIONAL LEVEL OF RESILIENCE TO THE GROUP'S FUTURE PERFORMANCE - NOW LESS
RELIANT ON THE SOUTHERN AFRICAN MARKETS.
THE SOUTH AFRICAN FUNDAMENTALS ARE IN PLACE HOWEVER, TO SUPPORT THE IMPROVEMENT
IN ECONOMIC ACTIVITY AND THE RESURGENCE OF CONSUMER CONFIDENCE AND SPENDING.
THE GROUP CONTINUES TO FOCUS AS A ONE-STOP SUPPLIER OF BRANDED CONSUMER
DURABLES TO OUR BROAD CUSTOMER BASE IN SOUTHERN AFRICA AND ABROAD AND PROSPECTS
FOR GROWTH APPEAR MOST PROMISING.
OUR BROADLY DIVERSIFIED PRODUCT RANGE, OUR LOW-COST MANUFACTURING BASE,
TOGETHER WITH OUR GLOBAL REACH, PLACE THE NU-WORLD GROUP OF COMPANIES IN A
STRATEGICALLY STRONGER POSITION, TO SUSTAIN AND IMPROVE OUR LEVEL OF GROWTH,
DURING THE FORTHCOMING YEAR AND THE YEARS AHEAD.
DIVIDEND
NOTICE IS HEREBY GIVEN THAT THE FINAL DIVIDEND NUMBER THIRTEEN OF 22,6 CENTS
PER SHARE(1999 : 17,0 CENTS) HAS BEEN DECLARED PAYABLE ON OR ABOUT 13 DECEMBER
2000 TO SHAREHOLDERS REGISTERED IN THE BOOKS OF THE COMPANY AT THE CLOSE OF
BUSINESS ON 1 DECEMBER 2000.
BY ORDER OF THE BOARD
M.S. GOLDBERG G.R. HINDLE
MANAGING DIRECTOR COMPANY SECRETARY
JOHANNESBURG
8 NOVEMBER 2000
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 B.COM L.L.B. (WITS)
REGISTERED OFFICE TRANSFER SECRETARIES
35 - 3RD STREET MERCANTILE REGISTRARS LTD
WYNBERG, SANDTON 11 DIAGONAL STREET
2199 JOHANNESBURG 2000
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