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Shoprite Holdings Limited
ISIN Code: zae000012084 Share Code: SHP
Interim results for the 6 months ended 31 December 2001
Headline earnings growth: 28,1%
Number of outlets: 594
Group Balance Sheet
Unaudited Unaudited Audited
R'000 31/12/01 31/12/00 30/06/01
ASSETS
Non-current assets 1 614 665 1 429 250 1 489 332
Property, plant and equipment 1 520 795 1 346 661 1 392 196
Investments 88 278 82 210 88 174
Deferred tax assets 335 187 228 709 381 319
Intangible assets (329 595) (228 330) (372 357)
Current assets 4 981 071 4 572 383 4 535 797
Inventories 2 466 856 2 377 754 2 160 958
Trade and other receivables 1 608 205 1 424 102 1 413 019
Cash and cash equivalents 906 010 770 527 961 820
Total assets 6 595 736 6 001 633 6 025 129
EQUITY AND LIABILITIES
Capital and reserves 1 322 551 1 431 506 1 444 966
Minority interest 47 943 41 404 41 630
Non-current liabilities 316 736 349 059 320 298
Interest bearing borrowings 2 450 21 924 2 450
Deferred tax liabilities 2 918 3 937 4 483
Provisions 311 368 323 198 313 365
Current liabilities 4 908 506 4 179 664 4 218 235
Current portion of borrowings - 14 304 17 374
Other current liabilities 4 908 506 4 165 360 4 200 861
Total equity and liabilities 6 595 736 6 001 633 6 025 129
Group Income Statement
Unaudited Unaudited Audited
6 months to % 6 months to 12 months to
R'000 31/12/01 Change 31/12/00 30/06/01
Revenue 10 981 520 10,0 9 985 001 19 596 729
Operating profit before
exceptional items 250 335 37,1 182 639 406 738
Exceptional items 41 602 31 296 (74658)
Operating profit after
exceptional items 291 937 36,5 213 935 332 080
Investment income 13 952 15 716 29 537
Finance costs 16 455 9 145 25 003
Profit before tax 289 434 31,3 220 506 336 614
Tax 70 988 53,8 46 161 99 735
Profit after tax 218 446 25,3 174 345 236 879
Minority interest 6 313 5 476 3 196
Net profit 212 133 25,6 168 869 233 683
Headline earnings
per share (cents) 32,4 28,1 25,3 56,7
Earnings per share
(cents) after
exceptional items 40,4 29,9 31,1 43,0
Proposed distribution
to shareholders
(cents per share) 11,0 15,8 9,5 20,5
Dividend cover (times) 2,9 2,7 2,8
Number of ordinary shares ('000)
used for calculation of earnings
per share (*weighted average)
525 620* 543 479 543 479
Group Cash Flow Statement
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
R'000 31/12/01 31/12/00 30/06/01
Cash generated by operations 760 476 535 980 1 017 959
Net (finance costs) /
investment income (2 503) 6 571 4 319
Dividends received - -
215
Dividends paid (59 783) (51 631) (103262)
Cash flows from
operating activities 698 190 490 920 919 231
Cash flows from
investing activities (283 253) (225 051) (461 484)
Purchase of property,
plant and equipment (283 149) (225 514) (475 192)
Acquisition of further interest in
Subsidiaries - (9 837) (19 994)
Other investment activities (104) 10 300 33 702
Net cash flow 414 937 265 869 457 747
Cash flows from
financing activities (470 747) (32 236) (46 521)
Proceeds on shares issued
by the Company - - 277
Acquisition of treasury shares (453 373) - -
Interest bearing
borrowings repaid (17 374) (32 236) (46 798)
Movement in cash and
cash equivalents (55 810) 233 633 411 226
Acquired through acquisition
of subsidiary - - 13 700
Net movement in cash and
cash equivalents (55 810) 233 633 424 926
Segment Information
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
R'000 31/12/01 31/12/00 30/06/01
REVENUE - by business segment
- Supermarkets 10 612 062 9 634 627 19 000 529
- Furniture 369 458 350 374 596 200
Total revenue 10 981 520 9 985 001 19 596 729
OPERATING PROFIT - by business segment
- Supermarkets 214 315 152 718 361 218
- Furniture 36 020 29 921 45 520
Total operating profit 250 335 182 639 406 738
Statement of Changes in Equity
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
R'000 31/12/01 31/12/00 30/06/01
Balance at 1 July
As previously reported 1 422 650 1 293 016 1 293 016
Effect of AC 135 (44 941) (36 833) (36 833)
Effect of adopting
revised AC 107 67 257 58 085 58 085
As restated 1 444 966 1 314 268 1 314 268
Issue of shares by the Company - - 277
Acquisition of treasury shares (274 765) - -
Net profit for the period 212 133 168 869 233 683
Dividends distributed
to shareholders (59 783) 51 631) (103 262)
Balance at 31 December / 30 June 1 322 551 1 431 506 1 444 966
Supplementary Information
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
R'000 31/12/01 31/12/00 30/06/01
1. Depreciation for the period 154 550 129 941 286 305
2. Dividends received (included in
investment income) - - 215
3. Capital expenditure
for the period 283 149 225 514 475 192
31/12/01 31/12/00 30/06/01
4. Capital commitments 148 139 74 134 126 446
5. Operating lease commitments 4 296 367 4 649 260
6. Investments:
unlisted - at carrying value and
directors' valuation 67 878 82 210 88 174
listed - at cost 20 400 - -
- at market value 20 800 - -
7. Contingent liabilities 160 859 514 313 520 859
8. Net asset value per
share (cents) 260 263 266
9. Total number of
shares in issue 507 761 543 479 543 379
Comments on the Results
1. During the period under review Shoprite's turnover increased by 10% to
R10,982 billion despite the fact that economic conditions in the country had
not improved appreciably. This growth, however, must also be viewed in the
light of the fact that the group is continuing to close or scale down under
performing stores in order to achieve acceptable returns.
2. Shoprite's further expansion outside South Africa was intensified and
continues to produce satisfactory results. The turnover of stores in these
countries increased, and now constitutes more than 8% of group turnover as
compared with 6% in the corresponding period in the 2001 financial year.
3. The operating profit of R250,3 million represents an increase
of 37% as compared with the corresponding period. Should the effect of
mainly foreign exchange surpluses, arising from the consolidation of foreign
subsidiaries be excluded, the increase in operating profit would be a very
favourable 15%. This was due, inter alia, to the better utilisation of
available space, effective cost management at all levels and reduced stock
shrinkage.
4. Net finance costs are attributable to the improvement in retail sales
during November and December 2001 and the increase in the stock of imported
non-food items (as a counter to the depreciation in the value of the Rand),
which slowed down the stock reduction programme. The repurchase of shares
from the Share Incentive Trust, as set out in paragraph 5, contributed to
this.
5. As detailed in the circular to shareholders dated 4 October 2001, certain
transactions with the participants in the Share Incentive Trust were
cancelled. Shoprite Checkers (Pty) Ltd purchased the 35 718 559 shares from
the Shoprite Holdings Ltd Share Incentive Trust and now holds these as
treasury shares. Shoprite's contingent liabilities decreased as a result of
a partial repayment by the Share Incentive Trust of its externally financed
debt.
In order to incentivise employees suitably the Board decided, after
considering various alternatives, to offer these participants share options
under the existing Share Incentive Trust.
6. Tax includes an amount of R46 million representing the utilisation of the
deferred tax asset. Actual tax payable comprises mainly secondary tax on
companies and tax payable by partnership concerns in the group.
7. Other current liabilities increased as a result of a favourable month-
end. This benefit is also reflected in the increase in cash and cash
equivalents.
Prospects
Food inflation is expected to increase, and the momentum in consumer
spending that began to build up during the period under review will possibly
level off in the next six months. It is expected, though, that the group
will maintain its good results in the rest of Africa. An improvement in the
value of the Rand as against other currencies may, however, result in
exchange surpluses with the consolidation of foreign subsidiaries
decreasing.
Dividend
The board has proposed an interim dividend of 11 cents (2000 - 9,5 cents)
per share, payable to shareholders on 18 March 2002.
In terms of STRATE regulations 8 March 2002 is the last day on which shares
will trade cum dividend. As from 11 March 2002 all trading of Shoprite
Holdings Ltd shares will be ex dividend. The record date is 15 March 2002.
The last date of registration (LDR) for certified shareholders is
15 March 2002. Certified shareholders may not dematerialise or rematerialise
their shares from 1 March 2002 to 15 March 2002.
Accountability
The principal accounting policies adopted in preparing the interim
consolidated financial statements comply with the South African Statements
of Generally Accepted Accounting Practice and are consistent with those
applied for the year ended 30 June 2001, with the exception of the
following:
With the introduction of a new accounting statement (AC 135) buildings are
now depreciated in terms of General Accepted Accounting Practice. As this
constitutes a change in accounting policy as per AC 103, the carrying values
of buildings and the related depreciation costs have been restated. The
effect on the group results is set out below.
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
31/12/01 31/12/00 30/06/01
Profit before tax 4,935 4,031 8,108
Tax - - -
Net profit 4,935 4,031 8,108
In accordance with the revised accounting statement (AC 107), which relates
to events after the balance sheet date, the group's dividends and related
secondary tax on companies (STC) are now recognised on the declaration date.
The comparative figures in the interim consolidated financial statements
have been restated to reflect this change in accounting policy. This change
has no effect on the interim results, as the dividend paid was the same in
both periods.
By order of the Board
C H Wiese J W Basson
Chairman Chief Executive Officer
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