Wrap Text
for the six months ended 31 August 2001
Steers Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1969/004875/06) ("the Company")
Share code STE ISIN code ZAE000008330
Unaudited consolidated interim results
for the six months ended 31 August 2001
OVERVIEW
Steers Holdings Limited is one of Africa's leading franchisors and suppliers
of retail and catering food products. The Group participates in the
franchise industry through a network of over 450 Steers, Debonairs Pizza and
FishAways outlets, providing investment opportunities to hundreds of
entrepreneurs and employment to thousands of people. The Manufacturing
Division supplies these outlets with branded and non-branded products, and
also manufactures and distributes our famous Steers Sauces and the popular
Pouyoukas range to the retail industry.
FINANCIAL RESULTS
During the six months under review gross revenue increased by 4% from R117
million to R122 million. Operating profit of R8,5 million was 13% below the
prior year figure of R9,8 million. Net income after taxation was R1,7
million below prior year at R4,4 million. The high tax charge recorded in
the results arises mainly pursuant to profits and losses in different
subsidiaries which cannot be set off for taxation purposes. Headline
earnings per share decreased from 9,1 cents per share to 7,2 cents per
share.
SEGMENT REPORT
Gross revenue
Six months ended
31 Aug 2001 31 Aug 2000 Growth
R000 R000 %
Franchising 24 338 25 656 (5,1)
Manufacturing and
Distribution 99 078 92 916 6,6
Management Services 1 623 1 288 26,0
Eliminations (3 082) (2 828) 9,0
Total 121 957 117 032 4,2
Operating profit
Six months ended
31 Aug 2001 31 Aug 2000 Growth
R000 R000 %
Franchising 4 009 3 841 4,4
Manufacturing and
Distribution 4 391 5 339 (17,8)
Management Services 122 631 80,7
Eliminations (26) (44) (40,9)
Total 8 496 9 767 (13,0)
Franchising Division
The gross revenue of the Franchising Division decreased 5% from R25,6
million to R24,3 million. The majority of this decrease is as a result of
Manage-ment's strategic decision to reduce the number of stores in the Group
Store business unit. The gross revenues achieved by the Steers, Debonairs
Pizza and FishAways business units showed a positive increase.
The strength of the Group's franchised brands is reflected in the Franchise
Division's operating profit, which grew by 4,4% to R4,0 million.
As at 31 August 2001, the Group's franchised network was as follows:
Outlets in operation as at 31 August 2001
South Africa Rest of Africa Total
Steers 271 35 306
Debonairs Pizza 126 16 142
FishAways 8 0 8
Total 405 51 456
Manufacturing and Distribution Division
Gross revenue in the Manufacturing and Distribution Division grew 6,6%
toR99,0 million. This growth is mainly in line with the in store growth in
revenue in the Franchise Division. The rationalization program instituted in
the Pouyoukas business unit last year has started to show benefits in the
current year, with gross revenue in this business unit increasing in excess
of 20%, while the Steers Retail Products business unit continues to gain
ground in the retail industry.
The ground gained by the Manufacturing and Distribution Division in the
increase in gross revenue was not carried through to the operating profit
line, with operating profit decreasing R1,0 million to R4,4 million. This
decrease in operating profit can be attributable mainly to tough trading
conditions in the industry as well as pressure on margins caused by the
increase in prices of raw materials. The weakening of the Rand as well as
the decrease in the supply of red meat arising from the Foot-and-Mouth and
Mad Cow epidemics, contributed to the lower margins achieved in this
division.
The Division was further affected by additional costs incurred in respect of
the outsourcing and curtailing of the operations in the Store Development
business unit. Management is confident that operating margins can be
increased to previous levels, and is actively focusing on procedures and
controls in order to achieve this.
NEW BRANDS
The Board is pleased to announce that negotiations have been entered into
with AFC Enterprises Inc of the United States of America for the exclusive
rights to the Church's Chicken trademark for Africa. AFC Enterprises Inc is
the world's second largest Quick Service Restaurant franchisor, with over 3
600 outlets in 28 countries. The Church's Chicken brand is represented in 13
countries through 1 500 stores.
This strategic alliance with Church's Chicken will represent the Group's
entry into the mainstream Quick Service Restaurant's chicken category where
previously the Group was not represented.
In addition to the revenue that will be generated through the franchised
network, the Manufacturing and Distribution Division will supply the
majority of the products required by the Church's Chicken franchisees.
Management is confident that the association with AFC Enterprises Inc will
add immense value to the Group, not only in respect of additional revenue,
but also in respect of the sharing of information and benchmarking of
operating standards.
PROSPECTS
The Board is cautiously optimistic that the Group is well positioned to take
advantage of its traditionally busiest period in the 2nd half of the year,
and that this, together with forecasted new store openings, will deliver
positive results for the year ending 28 February 2002.
DIVIDENDS
Notice is hereby given that an interim dividend (number 18) of 5 cents per
ordinary share has been declared by the Directors. The last day to trade in
order to participate in the dividend will be Friday, 16 November 2001. The
shares will commence trading "Ex" dividend from Monday, 19 November 2001.
The dividend will be payable to all shareholders recorded in the books of
the Company at the close of business on Friday, 23 November 2001 ("record
date"). The dividend will be payable on Monday, 26 November 2001. No
dematerialisation or rematerialisation of share certificates may take place
between Monday, 12 November 2001 and Friday, 23 November 2001, both days
inclusive. Share certificates may not be dematerialized/rematerialized
between Monday, 12 November 2001 and Friday, 23 2001, both days inclusive.
On behalf of the Board
P Halamandaris T Halamandaris
Chairman Chief Executive Officer
1 November 2001
Registered office 478 James Crescent Midrand 1685 PO Box 2884
Halfway House 1685
E-mail investorrelations@steers.co.za Website www.steersholdings.co.za
Transfer secretaries Ultra Registrars (Pty) Ltd (Reg no 2000/007239/07)
11 Diagonal Street Johannesburg PO Box 15610 Woodmead 3610
Available on SENS
Consolidated income statement
Six months Six months Year
ended ended ended
31 Aug 2001 31 Aug 2000 % 28 Feb 2001
R000 R000 change R000
Gross revenue 121 957 117 032 4 235 534
Operating profit before
depreciation 11 997 13 212 (9) 31 695
Depreciation (3 501) (3 445) (6 853)
Operating profit 8 496 9 767 (13) 24 842
Net interest (paid)
/received (771) (924) (740)
Net income before
taxation 7 725 8 843 (13) 24 102
Taxation (3 285) (2 744) (10 124)
Net income after taxation 4 440 6 099 (27) 13 978
Attributable to outside
shareholders 101 139
Attributable profit 4 440 6 200 (28) 14 117
Adjusted for :
Amortisation of goodwill 237 233 479
(Profit)/loss on sale
of non-current assets (151) (755) 75
Prior year underprovisions - - 1 009
Headline earnings 4 526 5 678 (20) 15 680
Weighted average number of
shares in issue 62 765 949 62 583 106 62 625 933
Operating margin - % 7,0 8,3 (16) 10,5
Earnings per share
- cents 7,1 9,9 (28) 22,5
Headline earnings per
share - cents 7,2 9,1 (21) 25,0
Consolidated balance sheet
Six months Six months Year
ended ended ended
31 Aug 2001 31 Aug 2000 28 Feb 2001
R000 R000 R000
ASSETS
Non-current assets 50 364 52 228 51 837
Tangible fixed assets 13 154 14 532 13 934
Intangible fixed assets 30 032 31 966 30 926
Loans 7 178 5 730 6 977
Current assets 55 432 44 821 52 269
Inventory 16 373 13 594 18 185
Accounts receivable 39 059 31 227 31 931
Bank balances and cash - - 2 153
Total assets 105 796 97 049 104 106
EQUITY AND LIABILITIES
Share capital and
reserves 68 853 64 144 63 965
Ordinary shareholders'
interest 68 709 63 517 63 821
Outside shareholders'
interest 144 627 144
Non-current liabilities 3 423 7 338 4 761
Long-term liabilities 2 891 6 259 4 693
Deferred taxation 532 1 079 68
Current liabilities 33 520 25 567 35 380
Accounts payable 24 636 22 373 24 838
Shareholders for dividend - - 5 082
South African Revenue
Service 6 226 2 286 5 460
Bank overdraft 2 658 908 -
Total equity and
liabilities 105 796 97 049 104 106
Consolidated changes in equity
Six months Six months Year
ended ended ended
31 Aug 2001 31 Aug 2000 28 Feb 2001
R000 R000 R000
Balance at start of
period 63 821 56 984 57 463
Change in accounting
policies - - (479)
Restated balance 63 821 56 984 56 984
Net gains not recognised
in the income
statement - currency
translation differences 350 333 773
Attributable earnings 4 440 6 200 14 117
Dividends - - (8 147)
Net movement in
share capital 98 - 94
Attributable profit 68 709 63 517 63 821
Consolidated cash flow statement
Six months Six months Year
ended ended ended
31 Aug 2001 31 Aug 2000 28 Feb 2001
R000 R000 R000
Net cash flow from
operating activities (1 630) 4 551 13 335
Cash generated by
operations 6 370 12 710 29 961
Net interest paid (771) (924) (740)
Taxation paid (2 253) (2 854) (8 073)
Dividends paid (4 976) (4 381) (7 813)
Net cash flow from
investing activities (1 876) 1 121 (2 744)
Expended on non-current
assets (2 307) (733) (4 505)
Proceeds from disposal of
non-current assets 431 1 854 1 761
Net cash inflow from
financing activities (1 305) (3 528) (5 386)
(Increase)/decrease
in share capital
and reserves 98 67 (239)
Decrease in long-term
liabilities (1 403) (3 595) (5 147)
Change in cash and cash
equivalents (4 811) 2 144 5 205
Cash and cash equivalents at
beginning of year 2 153 (3 052) (3 052)
Cash and cash equivalents at
end of year (2 658) (908) 2 153
Directors P Halamandaris (Chairman) T Halamandaris (Chief Executive
Officer) KA Hedderwick JL Halamandres* HR Levin* P Halamandaris (jnr)
*Non-executive
Steers
Debonairs Pizza
FishAways
Pouyoukas Foods
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