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NU-WORLD HOLDINGS LIMITED - AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31
AUGUST 2003
NU-WORLD HOLDINGS LIMITED
(Registration No. 1968/002490/06)
Share Code: NWL ISIN code: ZAE000005070
5 Year Compound Average Annual
Growth Rate in Headline Earnings - UP 19%
Thirteen consecutive years of Growth in
Turnover, Operating Income, Attributable Income,
Headline Earnings per Share and Dividend
GROUP TURNOVER UP 25.2%
PROFIT AFTER TAXATION UP 29.3%
HEADLINE EARNINGS PER SHARE UP 8.7%
DIVIDEND DECLARED PER SHARE (CENTS) UP 27.2%
CASH GENERATED BY OPERATIONS R 32,465 M
AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2003
CONSOLIDATED INCOME STATEMENT
Year Ended Year Ended
31 Aug 2003 31 Aug 2002 % Change
R000 R000
Turnover 1,179,455 942,084 25.2%
Net operating income 72,835 60,846
Depreciation 6,852 4,724
Interest paid 5,018 8,355
Income before taxation 60,965 47,767 27.6%
Taxation 12,127 9,998
Income after taxation 48,838 37,769 29.3%
Income from associate company 2,296
Minority interests 5,739
Attributable earnings 43,099 40,065 7.6%
-
Dividend declared 8,626 6,791 27.0%
Dividend per share (cents) 39.8 31.3 27.2%
Headline earnings 43,562 40,065 8.7%
Earnings per share (cents) 198.7 184.7 7.6%
Headline Earnings per share
(cents) 200.8 184.7 8.7%
Dividend per share (cents) 39.8 31.3 27.2%
Dividend declared cover 5.0 5.9
Interest Cover 13.1 6.7 95.5%
Shares in issue 21,695,465 21,695,465 0.0%
Shares in issue - weighted 21,695,465 21,695,465 0.0%
OTHER GROUP INFORMATION
Determination of attributable
earnings and headline earnings
Net income attributable to
ordinary shareholders 43,099 40,065 7.6%
Adjustment for amortisation
of goodwill 463
Headline earnings 43,562 40,065 8.7%_
Operating income as percentage
of turnover (%) 6.2 6.5
Net negative debt to equity
ratio (%) (33.6) (31.7)
Effective taxation rate 19.9 20.9
Net asset value per share
(cents) 1,428.4 1,266.8 12.8%
Capital Expenditure
Expansion 4,270 13,667
Replacement 588 336
_ 4,858 14,003
Goodwill and amortisation
At beginning of year -
Net acquisition of
subsidiaries 6,249
Goodwill written off (463)
At end of year 5,786
SEGMENTAL INFORMATION
Year Ended Year Ended
31 Aug 2003 31 Aug 2002 % Change
R000 R000
Geographical revenue
Republic of South Africa 929,253 942,084 (1.4%)
Australasia 250,202 - -
1,179,455 942,084 25.2%
Geographical income
Republic of South Africa 37,126 37,769 (1.7%)
Australasia 5,973 2,296 160.2%
43,099 40,065 7.6%
CONSOLIDATED BALANCE SHEET
Year Ended Year Ended
31 Aug 2003 31 Aug 2002
R000 R000
Assets
Non-current assets
Fixed assets 50,905 36,203
Investment in associated company 21,082
Goodwill 5,786
Current assets
Inventory 132,695 117,385
Trade and other receivables 183,714 156,563
Cash equivalents 103,437 87,143
Total assets 476,537 418,376
Equity and liabilities
Capital and reserves
Ordinary shareholders" funds 309,862 274,845
Minority interest 20,471
Total shareholders" funds 330,333 274,845
Non-current liabilities
Deferred Tax 8,149 8,951
Current liabilities
Trade and other payables 138,055 134,580
Total equity and liabilities 476,537 418,376
STATEMENT OF CHANGES IN EQUITY
Share Capital Retained
and Premium Income TOTAL
Balance as at 1 September 2001 115,849 124,834 240,683
Earnings for the year 40,065 40,065
Dividends paid (5,903) (5,903)
Balance as at 31 August 2002 115,849 158,996 274,845
Earnings for the year 43,099 43,099
Dividends paid (6,791) (6,791)
Foreign currency translation (1,291) (1,291)
Balance as at 31 August 2003 115,849 194,013 309,862
CONSOLIDATED CASH FLOW STATEMENT
Year Ended Year Ended
31 Aug 2003 31 Aug 2002
R000 R000
Cash generated by operating
activities 32,465 45,920
Cash generated by operations 54,369 71,734
Interest paid (5,018) (8,355)
Dividend paid (6,790) (5,856)
Normal tax on companies (10,096) (11,603)
Cash flows from investing
activities (16,207) (18,736)
Purchase of tangible fixed assets (4,858) (14,003)
Proceeds on disposal of fixed assets 336 1,189
Increase in investment in associate (5,922)
Increase in investment in
subsidiaries (11,685)
Cash flows from financing activities (5,119)
Repayment of long term borrowing (5,119)
Net increase in cash
and cash equivalents 16,258 22,065
Effect of exchange rate changes 36
Cash and cash equivalents at the
beginning of the year 87,143 65,078
Cash and cash equivalents at the
end of the year 103,437 87,143
Notes
These results have been compiled in accordance with South African Statements of
Generally Accepted Accounting Practice and Schedule 4 of the Companies Act. The
accounting policies used in the preparation of these results are consistent in
all material respects with those adopted in the annual financial statements for
the year ended 31 August 2002. During the year the Group adopted AC 133,
Financial Statements: Recognition and Measurement. The effect on earnings on the
adoption of this statement was to decrease earnings by R872,930 based on the
loss on unexpired forward exchange contracts. No material events have occurred
subsequent to the year-end.
These results have been audited by Tuffias Sandbergs" and their unqualified
audit opinion is available for inspection at the company"s registered office.
The Group"s annual financial report will be available by the end of December
2003.
Financial Review
Directors of Nu-World Holdings Ltd are pleased to report growth results for the
year ending 31st August 2003. The Group has once again, produced growth in
turnover, operating income, attributable income, headline earnings per share and
dividend.
Nu-World is a leading South African source for branded consumer durables. The
Group manufactures, imports, exports and distributes a one-stop supply of
branded consumer durables. Notwithstanding the difficult economic conditions,
particularly in the second half of the year under review, the Group achieved
satisfactory growth.
Group turnover increased by 25.2% to R1,179,455m. Net operating income
increased 19.7% to R72,835m (August 2002 : R60,846m). Attributable income
increased by 7.6% to R43,099m (August 2002 : R40,065m). Headline earnings
per share - H.E.P.S. increased 8.7% to 200.8 cents (August 2002 : 184.7
cents). Dividend per share is up 27.2% to 39.8 cents (August 2002 : 31.3
cents). Cash generated by operating activities amounted to R32,465m.
The improved working capital position, has resulted in a 39.9% reduction in
interest paid of R5,018m (August 2002 : R8,355m). The Group remains ungeared
at year end with cash balances on hand of R103,437m (August 2002 : R87,143m).
The net asset value per share at 1428 cents is up 12.8% (August 2002 : 1267
cents). At the time of writing, Nu-World shares are trading at a 9.0% discount
to net asset value per share, at the current share price of R13,00.
Operational Review
Nu-World is South Africa"s leading low-cost, high-volume manufacturer, importer
and exporter, of small electrical appliances and one of South Africa"s leading
distributors of consumer electronics.
Nu-World"s consumer electronics division, with our range of complimentary
international brands, differentiated within distinct market segments, from price
entry to top-end, continues to generate growth.
Difficult market conditions prevailed during the year. The appreciation in the
value of the rand created a deflationary environment for imported products,
leading to lower retail price points. However, notwithstanding the extremely
difficult trading environment, consumer electronics continues to grow and gain
market share. The Group has been successful in launching a number of in-house
retail brands, developing a closer working relationship with many key retail
customers.
The Group"s purchasing power, for the Southern African and Australasian markets,
provides a strategic advantage in obtaining world-best pricing and trading
terms.
Prima Australasia PTY LTD - Subsidiary
Akai * Telefunken * Prima * Nu-Tec * RCA
Nu-World increased its share of Prima to 51.0% in September 2002 (previously
44.7%). Prima has been successful in achieving strong growth in a subdued
Australian market. Prima continues to win market share and is making further
inroads into leading Australian retailers.
As of September 2003, Prima was selected by Thomson of France as the exclusive
agent and distributor of the RCA brand of consumer electronics. Prima will
distribute the full RCA range of PTVs, CTV,s, videos and accessories. RCA is one
of the most recognised brands of consumer electronics in the world today.
Prima is expected to produce strong growth during the forthcoming year.
Conti South Africa - Subsidiary
Nu-World acquired Conti South Africa. as from the 1st June 2003. The Conti brand
is well recognised for value and quality in the South African appliance market.
The potential for growth of the Conti brand in Southern Africa, with an extended
range of products, is excellent. Conti as a brand, is positioned at the higher
end of the market for electrical appliances and dovetails perfectly into the
Group"s stable of brands, from price-entry to top-end.
Morphy Richards
Nu-World was appointed the exclusive agent for the Morphy Richards brand of
appliances in South Africa, as of 1st September 2003. Morphy Richards is
regarded as a top quality and design brand of appliances, in more than 30
countries worldwide. The premium range of Morphy Richards appliances, is
expected to make a strong impact on the market for the 2003 Christmas season and
generate strong growth for the financial year.
Prospects
The Group has produced 13 consecutive years of solid growth in adverse market
conditions in South Africa and Australia.
Consumer sentiment will improve as interest rates decrease. An increasing level
of disposable income will boost consumer spending in the local market during the
forthcoming year. The Group expects to increase market penetration in each of
its areas of operation in Southern Africa, with new and increased ranges of
products lined up for the consumer electronics and appliances divisions.
Conti S.A. and Morphy Richards appliances, will generate additional growth in
the South African market. In addition to increasing market share in the South
African consumer electronics market, an additional substantial boost is budgeted
for the new in-house retail brands.
Prima Australasia Pty Ltd is budgeting to accelerate growth through increased
market penetration as well as the take-on of the RCA brand. Prima is expected to
generate an increased contribution in the forthcoming year.
Future sustainable growth levels in the medium term, are supported by the
Group"s strategically diversified base.
Dividend Declaration
Dividend No 16 of 39.8 cents per share, being the total dividend for the
financial year ended 31 August 2003 (2002: 31.3 cents per share) has been
declared payable to shareholders recorded in the books of the company at the
close of business on Friday 12 December 2003 ("the dividend").
The salient dates of the dividend are as follows:
Last date to trade shares cum dividend Friday 5 December 2003
Shares trade ex dividend from Monday 8 December 2003
Record date Friday 12 December 2003
Payment date Monday 15 December 2003
No dematerialisation or rematerialisation of shares may take place for the
period from 8 December 2003 to 12 December 2003, both days inclusive.
On Monday 15 December 2003, the dividend will be electronically transferred to
the bank accounts of all certificated shareholders unless this has not been
requested by or is not available to them. If electronic funds transfer is not
applicable, cheques dated 15 December 2003 will be posted on that date.
Transfers will be made to the dematerialised shareholder"s accounts at their
CSDP or broker on 15 December 2003.
By order of the board
M.S. Goldberg (Chairman), J.A. Goldberg (Chief Executive), G.R. Hindle
(Financial Director)
Sandton, 14 October 2003
Nu-World Holdings Limited
Directors: M.S. Goldberg (Chairman), J.A. Goldberg (Chief Executive), G.R.
Hindle (Financial Director) Company Secretary: B.H. Haikney Non-executive
Directors: P. Gross, J.M. Judin , D.Piaray
Registrars: Computershare Limited,- (Registration number 2000/006082/06), 70
Marshall Street, Johannesburg, 2001; PO Box 61051, Marshalltown, 2170 Tel: (011)
370-5000, Telefax: (011) 688-7717
JOINT SPONSOR:
Nedbank Corporate
Sasfin Corporate Finance, a division of Sasfin Bank Limited
NU-WORLD HOLDINGS LIMITED:
Registration number: 1968/002490/06
Registered Office: 35 - 3rd Street, Wynberg, Sandton 2199
Date: 14/10/2003 05:00:13 PM Supplied by www.sharenet.co.za
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