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Nu-World Holdings Limited - Reviewed Interim Report For The Half Year Ended 28
February 2003
Nu-World Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1968/002490/06)
("Nuworld")
SHARE CODE: NWL ISIN: ZAE000005070
Turnover - Group up 42.0%
Profit before Taxation up 41.6%
Attributable Income up 13.1%
Headline Earnings per Share up 14.8%
REVIEWED INTERIM REPORT FOR THE HALF YEAR ENDED 28 FEBRUARY 2003
The board of directors of Nu-World Holdings Ltd (herein after referred to as Nu-
World or the Group) is again pleased to report satisfactory growth results for
the interim period to 28th February 2003.
Nu-World is a leading South African source for branded consumer durables. The
Group manufactures, imports, exports and distributes a one-stop supply of a
broad range of consumer durables under a total of 19 international and local
brands.
The Group holds a majority interest in subsidiary company Prima Australasia Pty
Ltd, a Melbourne based distributor of branded consumer durables.
At the outset of the period under review, the Group increased its shareholding
in Prima Australasia to 51% (Feb 2002 : 44.7%). Prima has emerged as an
integral part of the Group"s growth strategy and is consolidated as a subsidiary
as from 1 September 2002 (in these accounts). Where appropriate, deconsolidated
comparative figures have been provided.
Notwithstanding the difficult economic conditions however, the Group achieved
satisfactory growth for the period.
FINANCIAL OVERVIEW
Growth has been achieved in turnover, operating income, attributable income and
headline earnings per share.
Headline earnings per share is up by 14.8% to 90.4 cents (Feb 2002 : 78.8
cents).
The Group remains in an ungeared position with cash balances on hand up 25.0% to
R69,849m. ( Feb 2002 : R55,889m).
The focus on working capital management is reflected in the increase in cash on
hand year-on-year and the continued improvement in the debtors book and stock
control.
The net asset value per share at 1323 cents, has increased by 14.4 % (Feb 2002
: 1157 cents).
The accounting policies used in the preparation of the results are consistent
with those applied in the prior year, and are in accordance with the South
African Statements of Generally Accepted Accounting Practice.
OPERATIONAL REVIEW
In-house manufacturing / Exports
Small electrical appliances
Nu-World is South Africa"s leading low-cost, high-volume manufacturer, importer
and exporter of small electrical appliances.
Manufacturing performed well during the period. The current strength of the
Rand has placed pressure on exports. Export margins are down, but our
international customers are enthusiastic about a new range of stainless steel
appliances currently being finalised for the USA, UK, Europe and Australia.
Top-end, value-added appliances will afford higher margins in export markets.
Consumer Electronics
JVC * Telefunken * Thomson * Nu-Tec
Nu-World"s consumer electronics division, with our range of complimentary
international brands, differentiated within distinct market segments, from price
entry to top-end, performed reasonably under difficult market conditions.
Prima Australasia Pty Ltd
Telefunken * Akai * Prima Electronics * Nu-Tec
The Australian market has been under pressure since the beginning of calendar
2003. Prima is performing reasonably well in difficult market conditions.
The introduction of Telefunken, by Prima, into the Australian market, has proved
successful. The Telefunken brand now represents a sizeable percentage of the
company"s turnover and continues to win market share.
PROSPECTS
Notwithstanding difficult market conditions over many years, the diversified
nature of the Nu-World Group, together with its international reach, has
provided shareholders with twelve consecutive years of growth.
The economic climate in the South African market is expected to improve in the
short to medium term. It is anticipated that there will be a significant
reduction in interest rates during the forthcoming six months.
Lower inflation and increased discretionary income and expenditure, will provide
a healthier climate for sales of consumer durables.
Government"s electrification programme has pledged to undertake 243,000 grid and
14,000 non grid connections by March 2004. The electrification programme
together with the national housing initiative will provide an improving platform
for growth in the electrical appliance and consumer electronics sectors.
Directors are optimistic that the Group remains strategically well positioned to
sustain growth for the remainder of the financial year.
CORPORATE GOVERNANCE
The Group, at all levels subscribes to the spirit of good corporate governance
as set out in both the King Report and the JSE Listings Requirements and accepts
the need to conduct the enterprise with integrity, transparency and equal
opportunity.
SEGMENTAL REPORTING
The Group predominantly markets and distributes Branded Consumer Durables, and
therefore the disclosure of segmental information in terms of AC115 would not be
meaningful. Nevertheless the Group reports comprehensively on its performance
without divulging information that could jeapordise its competitive advantage.
DIVIDENDS
Nu-World has resolved to continue the policy of a single annual dividend paid
after the end of each financial year.
THE BOARD
The non-executive directors continue to play an important role in the strategic
direction of the Group, as well as provide valuable operational guidance and
advice, which is always appreciated. It gives us great pleasure to welcome Mr D.
Piaray to the board as a non-executive director.
REVIEW BY INDEPENDENT AUDITORS
The financial information has been reviewed by Tuffias Sandberg whose
unqualified review report is available for inspection at the company"s
registered office.
DIRECTORS
M.S. Goldberg BCom MBA (Wits) (Chairman), J.A. Goldberg BSc (Eng) (Wits)
(Managing), G.R. Hindle CA (SA), B.H. Haikney CA (SA) (Company Secretary),
P. Gross B.Com L.L.B. (Wits)*, J.M. Judin Dip Law (Wits)* ,D.Piaray BEng (Chem)
(Wits) BCom (Unisa) MBA (Wits)*(* Non-executive Directors.)
Registered office
35 - 3rd Street
Wynberg, Sandton
2199
Computershare
Investor Services Ltd.
P.O. Box 61051
Marshalltown 2107
Share Code: NWL
ISIN Code: ZAE000005070
INCOME STATEMENT
Reviewed Six Unaudited Six Year
Months Ended Months Ended Ended
28 Feb 2003 28 Feb 2002 % Change 31 Aug 2002
R000 R000 R000
Turnover 655,926 461,818 42.0% 942,084
Net operating income 38,582 28,522 35.3% 60,846
Depreciation 3,982 2,131 4,724
Interest paid 4,747 5,309 8,355
Income before taxation 29,853 21,082 41.6% 47,767
Taxation 5,381 4,772 9,998
Income after taxation 24,472 16,310 50.0% 37,769
Income from
associate company 778 2,296
Outside shareholders
interest 5,139
Attributable income 19,333 17,088 13.1% 40,065
Dividend 6,791 5,903 5,903
Retained earnings
for the period 12,542 11,185 12,1% 34,162
Headline earnings
and earnings
per share
Net income
attributable to
ordinary shareholders 19,333 17,088 13.1% 40,065
Adjustments:
Net goodwill amortised 280
Headline earnings 19,613 17,088 14.8% 40,065
Attributable earnings 19,333 17,088 13.1% 40,065
Headline earnings 19,613 17,088 14.8% 40,065
Earnings per
share (cents) 89.1 78.8 13.1% 184.7
Earnings per
share (cents) 89.1 78.8 13.1% 184.7
- weighted
Headline earnings
per share
(cents) 90.4 78.8 14.8% 184.7
Headline earnings
per share
(cents) - weighted ..90.4 78.8 14.8% 184.7
Dividend per
share (cents) 31.3 27.2 27.2
Interest cover 7.3 5.0 46.6% 6.7
Shares in issue 21,695 21,695 0.0% 21,695
Shares in
issue - weighted 21,695 21,695 0.0% 21,695
BALANCE SHEET
Assets
Non-current assets
Fixed assets 37,148 30,503 36,203
Goodwill 10,923
Investment
in associate 20,911 21,082
Current assets
Inventory 174,376 119,580 117,385
Trade and other
Receivables 183,848 134,330 156,563
Cash equivalents 69,849 55,889 87,143
Total assets 476,144 361,213 418,376
Equity and liabilities
Shareholders" interest 286,961 251,016 274,846
Minority interest 18,512
Non-current liabilities 8,733 10,430 8,950
Current liabilities
Trade and other payables 161,938 99,767 134,580
Total equity and
Liabilities 476,144 361,213 418,376
Debt : Equity Ratio 0,0% 0,0% 0,0%
NAV (cents per share) 1,323 1,157 1,267
DECONSOLIDATED COMPARATIVE INFORMATION
Fixed assets 35,563 30,503 16,6%
Inventory 134,006 119,580 12,1%
Trade and other
Receivables 147,304 134,331 9,7%
Cash equivalents 68,392 55,890 22,4%
Non-current liabilities 8,733 10,430 (16,3%)
Trade and other
Payables 120,405 99,767 20,7%
STATEMENT OF CHANGES IN EQUITY
Equity at beginning
of period 274,846 240,684 240,684
Conversion of subsidiary
to associate (853)
Foreign currency
translation difference (1,195)
Transfer to
deferred taxation 358
Transfer to
minority interest 410
Retained earnings
for the period 19,333 17,088 40,065
Dividend paid (6,791) (5,903) (5,903)
Equity at end
of period 286,961 251,016 274,846
CASH FLOW STATEMENT
Cash generated/
(utilised) by operating
Activities (10,124) 6,096 45,920
Cash generated
by operations 8,630 21,830 71,734
Interest paid (4,747) (5,309) (8,355)
Dividend paid (6,792) (5,909) (5,856)
Taxation paid (7,215) (4,516) (11,603)
Cash flows from
investing
activities (7,170) (12,666) (18,736)
Purchase of
tangible
fixed assets (2,969) (4,544) (14,003)
Proceeds on disposal
of fixed assets 21 1,189
Increase in investment
in associate (8,122) (5,922)
Increase in investment
in subsidiary (4,222)
Cash flows from financing
Activities 0 (2,619) (5,119)
Repayment of long term
Borrowings (2,619) (5,119)
Net increase/(decrease)
in cash and
cash equivalents (17,294) (9,189) 22,065
Cash and cash equivalents
at the beginning of
the period 87,143 65,078 65,078
Cash and cash equivalents
at the end of the
period 69,849 55,889 87,143
Date: 27/05/2003 04:00:14 PM Supplied by www.sharenet.co.za
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