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Shoprite Holdings Limited - Preliminary Results Shoprite Holdings Limited (Incorporated in the Republic of South Africa) (Registration number: 1936/07721/06) ISIN no: ZAE 000012084 JSE share code: SHP PRELIMINARY RESULTS For the 12 months ended 30 June 2002 www.shoprite.co.za Growth in headline earnings per share: 24.7% Growth in profit after tax: 67.5% Number of outlets: 598 Group Income Statement Reviewed Reviewed 12 months to % 12 months to R`000 30/06/02 change 30/06/01 Revenue 22 109 797 12.8 19 596 729 Operating profit before exceptional items 522 157 28.4 406 738 Exceptional items 39 287 (74 658) Operating profit after exceptional items 561 444 69.1 332 080 Investment income 34 061 29 537 Finance costs 47 465 25 003 Profit before tax 548 040 62.8 336 614 Tax 151 295 51.7 99 735 Profit after tax 396 745 67.5 236 879 Minority interest (8 148) 3 196 Net profit 404 893 73.3 233 683 Headline earnings per share (cents) 70.7 24.7 56.7 Diluted headline earnings per share (cents) 70.4 24.2 56.7 Earnings per share (cents) after exceptional items 78.4 82.3 43.0 Diluted earnings per share (cents) after exceptional items 78.0 81.4 43.0 Proposed distribution to shareholders (cents per share) 25.5 24.4 20.5 Dividend cover (times) 2.8 2.8 Number of ordinary shares (`000) used for calculation of :earnings per share 516 764* 543 479 :diluted earnings per share 519 042* (* weighted average) GROUP BALANCE SHEET Reviewed Reviewed R`000 30/06/02 30/06/01 ASSETS Non-current assets 1 746 673 1 489 332 Property, plant and equipment 1 630 835 1 392 196 Investments 115 748 88 174 Deferred tax assets 303 128 381 319 Negative goodwill (303 038) (372 357) Current assets 4 469 220 4 535 797 Inventories 2 250 278 2 160 958 Trade and other receivables 1 482 791 1 413 019 Cash and cash equivalents 736 151 961 820 Total assets 6 215 893 6 025 129 EQUITY AND LIABILITIES Capital and reserves 1 459 458 1 444 966 Minority interest 30 714 41 630 Non-current liabilities 236 832 270 365 Interest bearing borrowings 2 450 2 450 Deferred tax liabilities 4 006 4 483 Provisions 230 376 263 432 Current liabilities 4 488 889 4 268 168 Current portion of borrowings - 17 374 Other current liabilities 4 457 659 4 250 794 Bank overdraft 31 230 - Total equity and liabilities 6 215 893 6 025 129 Reconciliation of Headline Earnings Reviewed Reviewed 12 months to 12 months to
R`000 30/06/02 30/06/01 Net profit attributable to Shareholders 404 893 233 683 Exceptional items (39 287) 74 658 (Profit) / loss on disposal of property (11 139) 5 232 Impairment of buildings 15 469 - Provision for losses in the employee share incentive trust - 127 378 Write down of unlisted investment 23 781 5 800 Amortisation of negative goodwill (69 319) (65 314) Other 1 921 1 562 Tax effect on exceptional items - (450) Headline earnings 365 606 307 891 GROUP CASH FLOW STATEMENT Reviewed Reviewed
12 months to 12 months to R`000 30/06/02 30/06/01 Cash generated by operations 1 033 855 1 041 426 Net (finance costs) / investment income (14 681) 4 319 Dividends received 1 277 215 Dividends paid (128 705) (102 071) Tax paid (55 043) (24 658) Cash flows from operating Activities 836 703 919 231 Cash flows from investing activities (622 855) (461 484) Purchase of property, plant and equipment (618 549) (475 192) Proceeds on disposal of property, plant and equipment 39 572 48 105 Acquisition of further interest in subsidiaries - (19 994) Other investment activities (43 878) (14 403) Net cash flow 213 848 457 747 Cash flows from financing activities (470 747) (46 521) Proceeds on shares issued by the Company - 277 Acquisition of treasury shares (453 373) - Interest bearing borrowings repaid (17 374) (46 798) Movement in cash and cash equivalents (256 899) 411 226 Acquired through acquisition of subsidiary - 13 700 Net movement in cash and cash Equivalents (256 899) 424 926 SEGMENT INFORMATION Reviewed Reviewed
12 months to 12 months to R`000 30/06/02 30/06/01 REVENUE - by business segment - Supermarkets 21 469 405 19 000 529 - Furniture 640 392 596 200* Total revenue 22 109 797 19 596 729 OPERATING PROFIT - by business segment - Supermarkets 467 364 361 218 - Furniture 54 793 45 520* Total operating profit 522 157 406 738 *House & Home, which up to that stage formed part of Hyperama, was placed under the operational and administrative control of OK Furniture during the second half of the financial year. As House & Home and Supermarkets operated as a single business unit, it was not at that point possible to separate their results in a meaningful way. A complete separation of the different business units was, however, effected from 1 July 2002 and separate reporting will be done in future. SUPPLEMENTARY INFORMATION Reviewed Reviewed R`000 30/06/02 30/06/01 1. Capital commitments 160 603 126 446 2. Contingent liabilities 116 225 520 859 Guarantees issued in respect of debt of the employee share incentive trust decreased from R420 million in the previous year to R60 million currently. 3. Net asset value per share (cents) 287 266 4. Total number of shares in issue 507 761 543 479 STATEMENT OF CHANGES IN EQUITY Reviewed Reviewed 12 months to 12 months to
R`000 30/06/02 30/06/01 Balance at 1 July As previously reported 1 422 650 1 293 016 Effect of AC 135 (44 941) (36 833) Effect of adopting revised AC 107 67 257 58 085 As restated 1 444 966 1 314 268 Issue of shares by the company - 277 Acquisition of treasury shares (274 765) - Net profit for the period 404 893 233 683 Dividends distributed to shareholders (115 636) (103 262) Balance at 30 June 1 459 458 1 444 966 COMMENTS ON THE RESULTS 1. During the period under review Shoprite increased revenue by 12.8% to R22,11 billion despite consumer spending coming under pressure due to the rapid increase in food prices. Timely purchases of large volumes of stock enabled the group to maintain low prices to the advantage of its customers for some time after food inflation had increased dramatically. 2. The operating profit of R522,2 million represents an increase of 28.4% compared with the previous year. The group once again showed exchange surpluses on its operations outside South Africa. Because of the partial recovery of the rand against certain currencies the surpluses for the full year were considerably less than for the first six months. 3. Shoprite`s operations beyond the borders of South Africa are continuing to grow at a satisfactory rate. In the period under review countries outside South Africa contributed 10.4% (R2.3 billion) to the group`s turnover as against 8.0% (R1,6 billion) in 2001. 4. With the great improvement in the results the group began to reap the benefits of effective management backed by good information and logistic systems. Productivity was improved significantly and stock losses were further reduced. The profit margin increased from 2.07% to 2.36%. 5. As the assessed losses were acknowledged as a deferred tax asset, tax is now fully provided for in the financial statements. However, tax actually payable comprises mainly tax payable by smaller partnership concerns and secondary tax on companies. 6. The increase in finance charges was partly due to the purchase of stock mentioned under point 1 above. 7. The exceptional items consist mainly of the amortisation of negative goodwill that arose with the take-over of OK Bazaars, of which an amount of R69,3 million was written back, and a write down of Shoprite`s investment in Canal Walk Ltd by R23,8 million. The latter company impaired its fixed assets in terms of accounting statement AC 128 (Impairment). 8. The increase in fixed assets represents investment in new stores, store renovations and normal asset replacements. PROSPECTS The high food inflation is expected to continue in the short term and to keep consumer spending under pressure. However, the Board expects that the group should maintain its growth in turnover in at least the first half of the new year, supported by an increasing contribution from its African interests. DIVIDEND The Board has declared a final dividend of 14,5 cents (11 cents in 2001) per share, payable to shareholders on 16 September 2002. The last day to trade cum dividend will be 6 September 2002. As from 9 September 2002 all trading of Shoprite Holdings Ltd shares will be ex dividend. The record date is 13 September 2002. Share certificates may not be dematerialised or rematerialised between Monday, 9 September 2002 and Friday, 13 September 2002, both days inclusive. ACCOUNTABILITY The principle accounting policies adopted in preparing the 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 depreciated in terms of Generally Accepted Accounting Practice. As this represents a change in accounting policy in terms of AC 103, the carrying values of buildings and the related depreciation costs have been restated. The effect on the group`s results is set out below: Reviewed Reviewed
12 months to 12 months to R`000 June 2002 June 2001 Profit before tax 12 274 8 108 Tax - - Net profit 12 274 8 108 In accordance with the revised accounting statement (AC 107), which relates to post balance sheet events, the group`s dividends and related secondary tax on companies (STC) are now recognised on the date of declaration. The comparative figures in the consolidated financial statements have been restated to reflect this change in accounting policy. The effect on the group`s results is set out below: Reviewed Reviewed
12 months to 12 months to R`000 June 2002 June 2001 Profit before tax - - Tax 2 383 1 019 Net profit (2 383) (1 019) Dividends distributed 13 843 8 153 REVIEW BY INDEPENDENT AUDITORS The group`s auditors, PricewaterhouseCoopers, have reviewed the preliminary results. Their unqualified report is available on request from the Company Secretary. By order of the Board C H Wiese J W Basson Chairman Chief Executive Officer Date: 20/08/2002 05:05:00 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
