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Steers Holdings Limited - Unaudited interim results for the six months ended 31
august 2002
Steers Holdings Limited
Share code STE ISIN code ZAE000008330
(lncorporated in the Republic of South Africa)
(Registration number 1969/004875/06)
("the Company")
www.steersholdings.co.za
Unaudited interim results for the six months ended 31 august 2002
* Operating profit +24%
* Headline EPS +44%
* Interim dividend +20%
Over 500 franchised stores under management
Consolidated income statement
Six months Six months Year
ended ended ended
31 Aug 2002 31 Aug 2001 % 28 Feb 2002
R000 R000 change R000
Gross revenue 142 049 121 957 16 253 865
Operating profit before
depreciation 13 787 11 997 15 23 669
Depreciation (3 216) (3 501) (4 785)
Operating profit 10 571 8 496 24 18 884
Net interest paid (69) (771) (638)
Net income before taxation 10 502 7 725 36 18 246
Taxation (3 906) (3 285) (7 556)
Net income after taxation 6 596 4 440 49 10 690
Attributable to outside
shareholders - - - -
Attributable profit 6 596 4 440 49 10 690
Adjusted for:
Amortisation of goodwill 220 237 479
Loss on loans written off - - 16
Profit on sale of
non-current assets (97) (151) (223)
Headline earnings 6 719 4 526 48 10 962
Weighted average
Number of shares in issue 64 513 599 62 765 949 63 187 918
Operating margin - % 7,4 7,0 6 7,4
Earnings per share - cents 10,2 7,1 44 16,9
Headline earnings
per share - cents 10,4 7,2 44 17,3
Consolidated balance sheet
Six months Six months Year
ended ended ended
31 Aug 2002 31 Aug 2001 28 Feb 2002
R000 R000 R000
ASSETS
Non-current assets 54 203 50 364 49 948
Tangible fixed assets 12 923 13 154 12 963
Intangible fixed assets 31 841 30 032 30 079
Deferred taxation 1 710 - 573
Loans 7 729 7 178 6 333
Current assets 67 933 52 774 53 772
Inventory 21 731 16 373 17 061
Accounts receivable 37 957 39 059 35 624
Bank/(overdraft) 8 245 (2 658) 1 087
Total assets 122 136 103 138 103 720
EQUITY AND LIABILITIES
Share capital and reserves 77 678 68 853 75 659
Ordinary shareholders` interest 77 535 68 709 75 516
Outside shareholders` interest 143 144 143
Non-current liabilities 3 080 3 423 2 652
Long-term liabilities 3 080 2 891 2 652
Deferred taxation - 532 -
Current liabilities 41 378 30 862 25 409
Accounts payable 36 297 24 636 23 627
Shareholders for dividend 142 - 142
South African Revenue Service 4 939 6 226 1 640
Total equity and liabilities 122 136 103 138 103 720
Consolidated statement of changes in equity
Six months Six months Year
ended ended ended
31 Aug 2002 31 Aug 2001 28 Feb 2002
R000 R000 R000
Balance at start of period 75 516 63 821 63 821
Change in accounting policies - 5 646 5 646
Restated balance 75 516 69 467 69 467
Net gains not recognised in the
income statement - currency
translation differences (661) 350 2 692
Attributable earnings 6 596 4 440 10 690
Dividends (4 516) (5 646) (8 229)
Net movement in share capital 600 98 896
Balance at end of period 77 535 68 709 75 516
Consolidated cash flow statement
Six months Six months Year
ended ended ended
31 Aug 2002 31 Aug 2001 28 Feb 2002
R000 R000 R000
Net cash flow from
operating activities 14 993 (1 630) 7 391
Cash generated by operations 19 662 6 370 27 569
Net interest paid (69) (771) (638)
Taxation paid (84) (2 253) (11 390)
Dividends paid (4 516) (4 976) (8 150)
Net cash flow from
investing activities (6 235) (1 876) (4 609)
Expended on non-current assets (5 226) (2 106) (5 507)
Proceeds from disposal of
non-current assets 387 431 1 068
Increase in loans receivable (1 396) (201) (170)
Net cash inflow from
financing activities (1 600) (1 305) (3 848)
(Decrease)/increase in share
capital and reserves (60) 98 896
Decrease in long-term liabilities (1 540) (1 403) (4 744)
Change in cash and cash
equivalents 7 158 (4 811) (1 066)
Cash and cash equivalents at
beginning of period 1 087 2 153 2 153
Cash and cash equivalents at
end of period 8 245 (2 658) 1 087
Notes 1 These financial statements have been prepared in conformity with South
African Statements of Generally Accepted Accounting Practice, and the accounting
policies are consistent with those applied in the previous year ended 28
February 2002.
2 During the financial year ended 28 February 2002, the Group changed its
accounting policy in respect of accounting for dividends paid in order to bring
it in line with South African Statements of Generally Accepted Accounting
Practice. The Group previously accounted for dividends on an accrual basis.
Dividends are now accounted for when declared. The comparative interim results
for the period ended 31 August 2001 have been adjusted to take the new policy
into account. 3 For the purposes of consistency with revised management
structures, the Store Development business unit is now accounted for in the
Franchising Division. The comparative figures have been amended.
Commentary
Overview
Steers Holdings Limited, with over 500 franchised outlets under its
management, remains Africa`s leading Quick Service Restaurant group.
Participating in all four major segments of the Quick Service Restaurant market,
namely burgers, pizza, chicken and fish, the Group continues to maintain its
"best in class" reputation. Testimony to this are the results of the latest
Leisure Options Awards in which Steers was awarded Best Burger (7th year in a
row), Best Chips and Best Takeaway, whilst Debonairs Pizza was awarded Best
Pizza (4th year in a row). Together with the Group`s ability to supply best
quality product to its franchised network through its Manufacturing and
Distribution Division, the Group provides an attractive investment option to
entrepreneurs wishing to enter the franchised Quick Service Restaurant market.
Financial results
Gross revenue for the period under review increased 16% from R121,9 million
to R142,0 million. Net income after taxation increased 49% to R6,6 million.
Headline earnings per share of 10,4 cents reflect a 44% increase over the
previous period.
Segment report
Gross revenue
Six months ended
31 August 31 August
2002 2001 Growth
R000 R000 %
Franchising 27 780 24 338 14
Manufacturing and Distribution 114 382 99 078 15
Corporate Services 1 749 1 623 8
Less: Inter segment revenue (1 862) (3 082) -
Total 142 049 121 957 16
Operating profit
Six months ended
31 August 31 August
2002 2001 Growth
R000 R000 %
Franchising 3 705 3 056 21
Manufacturing and Distribution 6 536 5 344 22
Corporate Services 352 122 189
Eliminations (22) (26) -
Total 10 571 8 496 24
Franchising Division
Growth in franchise revenue of 14% to R27,8 million in an extremely dynamic
and highly competitive market is testimony to the strength of the Group`s
brands. Coupled with effective management of costs and resources, the
contribution from the Franchising Division increased 21% from R3,1 million to
R3,7 million. During the period under review a decision was taken by management
to provide fully against all Zimbabwe Dollars being held by the Group in
Zimbabwe. Accordingly R1,5 million was charged to the divisional income
statement, thereby reducing growth in contribution by the division from 58% to
21%. During the period under review, the Group opened its first Church`s Chicken
outlets, the first in West Street, Durban and the second in the Southgate
Shopping Mall south of Johannesburg. Market response has been encouraging, and
the Group is poised to open at least 10 outlets before the end of the current
financial year. As at 31 August 2002, the Group`s franchised network was as
follows:
South Africa Rest of Africa Total
Steers 281 37 318
Debonairs Pizza 136 22 158
FishAways 21 1 22
Church`s Chicken 2 0 2
Total 440 60 500
The Group exited the period with 500 branded outlets, adding a net gain of 18
outlets during the period under review. Sixty of the Group`s franchised outlets
are now situated outside the borders of South Africa and contribute 14% of the
Franchising Divisions` revenue.
Adding to this milestone of 500 franchised outlets, the Group`s 501st outlet
was by way of a Steers Quick Service Restaurant opened in Perth, Australia early
in September 2002. Response to the brand both by consumers as well as by
potential franchisees has been extremely positive.
Manufacturing and Distribution Division
The Manufacturing and Distribution Division mirrored the growth achieved in
the Franchising Division, recording 15% growth in revenue from R99,1 million to
R114,4 million. Efficient purchasing management as well as control of costs and
resources resulted in a 22% growth in operating profit from R5,3 million to R6,5
million.
Acquisitions
During the period under review the Group acquired the remaining 25% shares of
Pouyoukas Foods (Pty) Ltd, making it a wholly owned subsidiary. The Group also
bought back the Eastern Cape License agreement, this in line with the Group`s
stated policy of acquiring all licensees within the South African borders.
Prospects
Achievements in the first half of the year, both financial and operational,
have laid the foundation for what promises to be a rewarding year for the Group.
Management is confident that the level of earnings achieved for the first half
of the year will be carried through to the end of the year.
Dividends
The Board of Directors have resolved to declare an interim dividend (number
20) of 6 cents per ordinary share. The last date to trade in order to
participate in the dividend will be Friday 8 November 2002. The shares will
commence trading "Ex" dividend from Monday 11 November 2002. The dividend will
be payable to all shareholders recorded in the books of the Company at the close
of business on Friday 15 November 2002 ("record date"). The dividend will be
payable on Monday 18 November 2002. No dematerialisation or rematerialisation of
share certificates may take place between Monday 11 November 2002 and Friday 15
November 2002, both days inclusive.
On behalf of the Board
P Halamandaris
Chairman
T Halamandaris
Chief Executive Officer
23 October 2002
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
(Registration number 2000/007239/07)
11 Diagonal Street Johannesburg
PO Box 15610 Woodmead 3610
Directors:
P Halamandaris (Chairman) T Halamandaris (Chief Executive Officer)
KA Hedderwick JL Halamandres* HR Levin* P Halamandaris (jnr)*
* Non-executive
Company Secretary: P Papageorgiou
Date: 23/10/2002 05:41:00 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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