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WOOLWORTHS HOLDINGS LIMITED - UNAUDITED GROUP RESULTS FOR THE 6 MONTHS ENDED DECEMBER 2002 WOOLWORTHS HOLDINGS LIMITED Unaudited Group Results for the 6 months ended December 2002 highlights from continuing operations * Revenue 20.6% to R5bn * Operating profit 37.7% to R450m * Headline earnings per share 60.3% to 33.5c * Interim dividend per share 40.0% to 10.5c INCOME STATEMENT Year ended Six months ended 30 June 2002 31 December (audited) 2002 2001 % Rm Note Rm Rm Change 9 020.7 Revenue 5 051.3 4 385.3 15.2% 8 825.6 Continuing operations 5 051.3 4 190.2 20.6% 195.1 Discontinued operations - 195.1 Continuing operations 8 421.4 Turnover 4 794.9 4 004.4 19.7% 5 571.8 Cost of merchandise 3 199.5 2 654.2 20.5% 2 849.6 Gross profit 1 595.4 1 350.2 18.2% 404.2 Other income 256.4 185.8 38.0% 2 568.6 Expenses 1 402.0 1 209.4 15.9% 213.5 Depreciation 110.6 99.9 10.7% 503.4 Occupancy cost 259.3 221.2 17.2% 1 238.7 Employment cost 685.8 586.8 16.9% 613.0 Other operating cost 346.3 301.5 14.9% 685.2 Operating profit 449.8 326.6 37.7% 44.5 Interest paid 34.6 23.5 47.2% 640.7 Net profit before 415.2 303.1 37.0% exceptional items (41.5) Exceptional items 2 (17.2) (7.8) 599.2 Net profit before tax 398.0 295.3 34.8% 203.6 Tax 3 111.7 100.5 11.1% 395.6 Net profit after tax 286.3 194.8 47.0% (2.1) Outside shareholders` interest (0.3) (1.5) 393.5 Net profit from 286.0 193.3 48.0% continuing operations Discontinued operations (14.0) Operating loss - (14.0) (0.7) Interest paid - (0.7) (14.7) Loss from discontinued operations - (14.7) (139.6) Exceptional items 2 - (139.6) 18.8 Outside shareholders` interest - 18.8 (135.5) Net loss from discontinued - (135.5) operations Total group Net profit attributable to ordinary
258.0 shareholders 286.0 57.8 >100% Reconciliation of headline earnings 258.0 Attributable earnings - 286.0 57.8 >100% all operations
12.1 Goodwill amortisation 5.0 3.0 Loss/(profit) on disposal of property, plant and equipment net of outside shareholders`
(8.8) interest 3.4 (10.2) Loss on discontinuance net of outside 115.6 shareholders` interest - 115.6 4.8 Loss on disposal of listed investment - 4.8 17.2 Impairment of property - - 398.9 Headline earnings 294.4 171.0 72.2% Net loss from discontinued operations
19.9 after outside shareholders` interest - 19.9 Headline earnings from continuing 418.8 operations 294.4 190.9 54.2% Headline earnings per share (cents)
44.0 - All operations 33.5 18.7 79.1% 46.2 - Continuing operations 33.5 20.9 60.3% Earnings per share (cents) 28.5 - All operations 32.6 6.3 >100% 43.4 - Continuing operations 32.6 21.2 53.8% 28.0 Diluted earnings per share (cents) 4 31.9 6.2 >100% 20.0 Dividend per share (cents) 10.5 7.5 40.0% 2.2 Dividend cover 3.1 2.8 889.7 Number of shares issued (millions) 868.0 907.0 -4.3% Weighted average number of shares 905.7 in issue (millions) 877.6 912.0 -3.8% GROUP ANALYSIS Revenue 8 421.4 Turnover 4 794.9 4 004.4 19.7% 7 302.0 Woolworths 4 211.8 3 499.5 20.4% 3 834.1 - Textiles 2 185.4 1 863.5 17.3% 3 302.1 - Foods 1 938.6 1 547.8 25.2% 165.8 - Logistics and other 87.8 88.2 -0.5% 1 119.4 Country Road - continuing operations 583.1 504.9 15.5% 355.5 Interest 225.2 164.6 36.8% 48.7 Other revenue 31.2 21.2 47.2% 8 825.6 Continuing operations 5 051.3 4 190.2 20.6% 195.1 Discontinued operations - 195.1 9 020.7 5 051.3 4 385.3 15.2% Net profit/(loss) before tax and exceptional items 625.5 Woolworths 411.6 292.8 40.6% 15.2 Country Road 5 3.6 10.3 -65.0% 640.7 Continuing operations 415.2 303.1 37.0% (14.7) Discontinued operations - (14.7) 626.0 415.2 288.4 44.0% CASH FLOW STATEMENT Year ended Six months ended 30 June 2002 31 December (audited) 2002 2001 Rm Rm Rm Cash flow from operating activities 581.7 Cash inflow from trading 357.8 274.5 (262.0) Working capital movements (68.0) (92.4) 319.7 Cash generated by operating activities 289.8 182.1 355.5 Interest received and investment income 225.2 165.2 (45.2) Interest paid (34.6) (24.2) (284.5) Tax paid (100.0) (160.0) 345.5 Cash generated by operations 380.4 163.1 (145.8) Dividends paid (110.4) (77.9) 199.7 Net cash inflow from operating activities 270.0 85.2 187.4 Continuing operations 270.0 88.9 12.3 Discontinued operations - (3.7) (404.8) Cash outflow from investing activities (257.4) (181.8) Cash flow from financing activities 41.3 Shares issued 16.6 25.5 (134.7) Shares repurchased by subsidiary (120.2) (38.5) (0.1) Non-current liabilities repaid (0.1) - (93.5) Net cash outflow from financing activities (103.7) (13.0) (298.6) Decrease in cash and cash equivalents (91.1) (109.6) Cash and cash equivalents at the beginning
(64.0) of the period (361.7) (64.0) 0.9 Effect of foreign exchange rate changes (0.9) 16.8 Cash and cash equivalents at the end of (361.7) the period (453.7) (156.8) GROUP ANALYSIS 630.0 Cash generated by operations - before tax 480.4 323.1 579.2 Woolworths 447.1 281.0 50.8 Country Road 33.3 42.1 Gross capital expenditure on property, 335.0 plant and equipment 199.0 175.4 273.7 Woolworths 176.5 112.5 61.3 Country Road 22.5 62.9 BALANCE SHEET Year ended Six months ended 30 June 2002 31 December (audited) 2002 2001 Rm Rm Rm assets 1 535.2 Non-current assets 1 595.7 1 518.8 916.1 Property, plant and equipment 966.7 895.3 81.4 Investments 119.7 63.4 180.2 Loans to customers 170.6 179.0 210.0 Participation in export partnerships 187.9 219.0 20.1 Goodwill 15.0 27.1 112.6 Other loans 123.2 130.2 14.8 Deferred tax 12.6 4.8 2 528.6 Current assets 2 974.4 2 780.3 511.2 Inventories 601.3 636.0 1 348.7 Woolworths card debtors 1 508.6 1 222.8 348.7 Accounts receivable 463.0 464.5 201.5 Loans to customers 229.7 178.2 118.5 Cash and cash equivalents 171.8 278.8 4 063.8 Total assets 4 570.1 4 299.1 equity and liabilities 2 375.8 Capital and reserves 2 374.8 2 371.2 2 350.2 Ordinary shareholders` interest 2 352.9 2 343.2 25.6 Outside shareholders` interest 21.9 28.0 300.8 Non-current liabilities 282.1 318.7 111.0 Post-retirement medical aid liability 119.1 102.8 189.8 Deferred tax 163.0 215.9 1 387.2 Current liabilities 1 913.2 1 609.2 809.7 Accounts payable 1 178.4 1 087.4 97.3 Provisions 109.3 86.2 480.2 Interest-bearing borrowings 625.5 435.6 4 063.8 Total equity and liabilities 4 570.1 4 299.1 264.2 Net asset value per share (cents) 271.1 258.3 GROUP ANALYSIS 4 063.8 Total assets 4 570.1 4 299.1 3 658.0 Woolworths 4 220.6 3 835.5 405.8 Country Road 349.5 463.6 511.2 Inventories 601.3 636.0 339.1 Woolworths 471.6 416.0 172.1 Country Road 129.7 220.0 STATEMENT OF CHANGES IN ORDINARY SHAREHOLDERS` INTEREST Year ended Six months ended 30 June 2002 31 December (audited) 2002 2001 Rm Rm Rm Ordinary shareholders` interest at the beginning 2 238.4 of the period 2 336.1 2 238.4 2 238.4 As previously reported 2 350.2 2 238.4 Adjustment to opening balance arising from the change in accounting policy for: - - revaluation of listed investment 2.1 -
- - unearned finance income from export partnerships (16.2) - Movements for the period: Share premium arising from shares issued under 41.3 share purchase scheme 16.6 25.5 (134.7) Shares repurchased by subsidiary (120.2) (38.5) 205.2 Recognised gains and losses 120.4 117.8 125.1 Distributable reserves 158.5 28.2 258.0 Net profit attributable to ordinary shareholders 286.0 57.8 (145.8) Dividends paid (110.4) (77.9) 12.9 Net unrealised (loss)/gain on hedging instruments (17.1) 48.3 80.1 Non-distributable reserves (38.1) 89.6 87.4 Exchange differences on translation of (38.1) 96.9 foreign entity Realisation of translation reserve on closure of (7.3) discontinued operations - (7.3) Ordinary shareholders` interest at the end of
2 350.2 the period 2 352.9 2 343.2 NOTES 1. The interim financial statements comply with South African Statements of Generally Accepted Accounting Practice. Accounting policies used are consistent with those applicable for the June 2002 financial statements, except as follows: Following the introduction of AC133, Financial Instruments - Measurement and Recognition, gains and losses on certain qualifying financial instruments taken out as cash flow hedges for future transactions are carried in equity and fair value adjustments on available for sale financial assets are recognised in the income statement. Opening retained income has been restated to take into account the change in the basis of valuation of the participation in export partnerships to amortised cost and the listed investment to market value. These changes have had the effect of reducing reported profit after tax by R3.9m. 2. Exceptional items Year ended Six months ended 30 June 2002 31 December (audited) 2002 2001 Rm Rm Rm 41.5 Continuing operations 17.2 7.8 7.4 Provision for onerous lease commitments 12.2 - 12.1 Goodwill amortisation 5.0 3.0 4.8 Loss on disposal of listed investment - 4.8 17.2 Impairment of property - - 139.6 Discontinued operations - 139.6 131.6 Loss on discontinuance - 131.6 8.0 Restructuring costs - 8.0 181.1 17.2 147.4 3. The effective tax rate of 28.1% (2001: 34.0%) is mainly due to the STC charge, offset by a tax adjustment of R23.2m relating to previous years. 4. The difference between earnings per share and diluted earnings per share results from outstanding options in terms of the share purchase scheme. 5. Country Road`s profit before tax is A$0.9m (2001: A$0.3m). The lower rand profit resulted from second quarter profits being translated at an exchange rate stronger than the rate at which first quarter losses were sustained, whereas the rand`s significant weakening in the second quarter of the 2001 interim reporting period had the opposite effect on that period`s translated results. 6. Unutilised banking facilities amount to R1 470.6m (2001: R1 215.2m), with no limit on the group`s ability to raise interest-bearing debt. 7. The loss on discontinuance at 31 December 2001 has been restated in line with the amount disclosed at 30 June 2002. 8. Approved commitments for capital expenditure amount to R140.9m of which R58.0m has been contracted (2001: R133.7m, R89.0m contracted). COMMENTARY GROUP RESULTS The directors are pleased to report an excellent performance for the 26 weeks to December 2002. Headline earnings per share at 33.5c were 60.3% on comparable earnings for the six months period last year. Headline earnings per share excluding the tax adjustment relating to previous years increased by 47.8%. Revenue was up 20.6% to R5 billion (2001: R4 billion) and operating profit was up 37.7% to R450 million (2001: R327 million). An interim dividend of 10.5 cents (2002: 7.5 cents) per share has been declared, an increase of 40.0% on the interim dividend last year. WOOLWORTHS Positive trading, particularly in the first quarter, and good expense containment in all divisions resulted in an increase in the net profit before tax of 40.6% compared to the corresponding period last year. Inflation which was high at 13.0% in Textiles and 18.2% in Foods is now showing signs of softening. Sales in our Textiles division improved by 17.3% and by 14.1% in comparable South African stores and reflected our customers` positive response to our improved fabrics and styling. Ladieswear performed particularly well while homeware performed below expectations. Market share on a twelve month moving average increased to 16.7% (2001: 16.1%). Our drive to provide our customers with healthy food and innovative ranges at convenient locations resulted in a growth in food sales of 25.2% and 18.2% in comparable South African stores. Our market share grew on a twelve month moving average to 6.8% (2001: 6.3%). Woolworths Financial Services` interest income grew substantially by 36.8% due to increased retail sales and higher interest rates. The card and personal loan books were tightly managed and bad debts were well within acceptable levels. COUNTRY ROAD Trading conditions in Australia remained highly competitive due to major discounting particularly through Christmas trading. Despite this, sales from continuing operations grew by 3.3% (in Australian dollar terms) compared to the corresponding period last year, resulting in a profit of A$0.9 million (2001: A$0.3 million). SHARE BUY-BACK During the period under review, a subsidiary of the company repurchased a further 26.5 million shares of the company, bringing the total to 59.6 million shares, at an average cost of R4.28 per share, representing 6.5% of the company`s issued share capital. PROSPECTS Trading at the beginning of the second half has been softer and is unlikely to improve in the short term. Nevertheless we are still expecting satisfactory results for the second half. DIVIDEND Notice is hereby given that an interim dividend of 10.5 cents per share has been declared in respect of dividend number 11, for the six months ended 31 December 2002. Shareholders are advised that the last day to trade ("cum dividend") in order to participate in the dividend will be Friday, 7 March 2003. The shares will trade "ex" the dividend from commencement of business on Monday, 10 March 2003 and the record date will be Friday, 14 March 2003. The dividend will be payable on Monday, 17 March 2003. Share certificates may not be dematerialised or re-materialised between Monday, 10 March 2003 and Friday, 14 March 2003, both days inclusive. On behalf of the board of directors. DA Hawton SN Susman Non-executive chairman Chief executive officer Cape Town 19 February 2003 DIRECTORATE: Non-executive directors: DA Hawton (Chairman), M Barnes (British), NL Colne (British), BJ Frost, SV Zilwa Executive directors: SN Susman (CEO), MR Canning, GP de Kock, RJD Inskip, NW Thomson
Company Secretary: CL Lowe Woolworths Holdings Limited: Company registration number 1929/001986/06 Share code: WHL ISIN ZAE000028288 Auditors: Ernst & Young Sponsor: HSBC Investment Services (Africa) (Pty) Ltd Registered Office: Woolworths House, 93 Longmarket Street, Cape Town 8001
Transfer Secretaries: Computershare Investor Services Limited, 70 Marshall Street, Johannesburg 2001 visit our investor relations site: www.woolworthsholdings.co.za Date: 20/02/2003 08:30:00 AM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
