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NU-WORLD HOLDINGS LIMITED - REVIEWED INTERIM REPORT FOR THE HALF YEAR ENDED 29
FEBRUARY 2004
NU-WORLD HOLDINGS LIMITED
(Registration No. 1968/002490/06)
REVIEWED INTERIM REPORT FOR THE HALF YEAR ENDED 29 FEBRUARY 2004
5 Year Compound Average Annual
growth Rate in Headline Earnings - 18.5%
Fourteen consecutive years of Growth in
Turnover, Operating Income, Attributable Income,
Headline Earnings per Share and Dividend
Group Turnover up 21.1%
Attributable Income up 35.0%
Headline earnings per share up 34.2%
Dividend paid per share up 27.2%
Cash generated by operations R20,658m.
INCOME STATEMENT
Reviewed Six Reviewed Six Audited
Months Ended Months Ended % Change Year Ended
29 Feb 2004 28 Feb 2003 31 Aug 2003
Turnover 794,483 655,926 21.1% 1,179,455
Net operating income 45,737 37,698 21.3% 72,835
Depreciation 4,145 3,098 6,852
Interest paid 4,048 4,747 5,018
Income before taxation 37,544 29,853 25.8% 60,965
Taxation 8,196 5,381 12,127
Income after taxation 29,348 24,472 48,838
Minority interests 3,252 5,139 5,739
Attributable earnings 26,096 19,333 35.0% 43,099
Dividend paid 8,621 6,791 8,626
Headline earnings 26,327 19,613 34.2% 43,562
Earnings per share (cents) 120.3 89.1 35.0% 198.7
Headline Earnings per share
(cents) 121.3 90.4 34.2% 200.8
Dividend per share (cents) 39.8 31.3 27.2% 39.8
Interest Cover 10.3 7.3 13.1
Shares in issue 21,695,465 21,695,465 0.0% 21,695,465
Shares in issue - weighted 21,695,465 21,695,465 0.0% 21,695,465
OTHER GROUP INFORMATION
Determination of attributable
earnings and headline earnings
Net income attributable to
ordinary shareholders 26,096 19,333 35.0% 43,099
Adjustment for amortisation
of goodwill 231 280 463
Headline earnings 26,372 19,613 34.2% 43,562
Operating income as
percentage
of turnover (%) 5.8 5.7 6.2
Net negative debt to equity
ratio (%) (34.1) (24.3) (33.6)
Effective taxation rate 21.8 18.0 19.9
Net asset value per share
(cents) 1,516.2 1,322.7 1,428.4
Capital Expenditure
Expansion 1,249 2,224 4,270
Replacement 700 745 588
1,949 2,969 4,858
Goodwill and amortisation
At beginning of period 5,786 -
Net acquisition of
subsidiaries 11,203 6,249
Goodwill written off (231) (280) (463)
At end of period 5,555 10,923 5,786
SEGMENTAL INFORMATION
Reviewed Six Reviewed Six Audited
Months Ended Months Ended % Change Year Ended
29 Feb 2004 28 Feb 2003 31 Aug 2003
Geographical revenue
Republic of South
Africa 564,542 497,571 13.5% 929,253
Australasia 159,363 158,355 0.6% 250,202
United Kingdom 70,578
794,483 655,926 21.1% 1,179,455
Geographical income
Republic of South
Africa 22,068 13,984 57.8% 37,126
Australasia 1,925 5,349 (64.0%) 5,973
United Kingdom 2,103
26,096 19,333 35.0% 43,099
BALANCE SHEET
Reviewed Six Reviewed Six Audited
Months Ended Months Ended Year Ended
29 Feb 2004 28 Feb 2003 31 Aug 2003
Assets
Non-current assets
Fixed assets 49,603 37,148 50,905
Goodwill 5,555 10,923 5,786
Current assets
Inventory 162,030 174,376 132,695
Trade and other receivables 228,734 183,848 183,714
Cash equivalents 112,145 69,849 103,437
Total assets 558,067 476,144 476,537
Equity and liabilities
Capital and reserves
Shareholders" funds 328,957 286,961 309,862
Minority interest 26,416 18,512 20,471
Total shareholders" funds 355,373 305,473 330,333
Non-current liabilities
Deferred Tax 9,688 8,733 8,149
Current liabilities
Trade and other payables 193,006 161,938 138,055
Total equity and liabilities 558,067 476,144 476,537
STATEMENT OF CHANGES IN EQUITY
Equity at beginning of
period 309,862 274,845 274,845
Foreign currency translation
diff. 4,509 (1,194) (3,616)
Transfer to deferred
taxation (1,353) 358 1,085
Transfer to minority interest (1,536) 410 1,240
Retained earnings for the
period 26,096 19,333 43,099
Dividend paid (8,621) (6,791) (6,791)
Balance at the end of period 328,957 286,961 309,862
CASH FLOW STATEMENT
Reviewed Six Reviewed Six Audited
Months Ended Months Ended Year Ended
29 Feb 2004 28 Feb 2003 31 Aug 2003
Cash generated/(utilised) by
operating activities 20,658 (10,124) 32,465
Cash generated by operations 41,635 8,630 54,369
Interest paid (4,048) (4,748) (5,017)
Dividend paid (8,675) (6,791) (6,791)
Normal tax on companies (8,254) (7,215) (10,096)
Cash flows from investing
activities (11,950) (7,170) (16,207)
Purchase of tangible fixed
assets (1,949) (2,969) (4,858)
Proceeds on disposal of fixed
assets 21 336
Increase in investment in
subsidiaries (10,001) (4,222) (11,685)
Net increase/(decrease) in cash
and cash equivalents 8,708 (17,294) 16,258
Effect of exchange rate
changes 36
Cash and cash equivalents at the
beginning of the period 103,437 87,143 87,143
Cash and cash equivalents
at the end of the period 112,145 69,849 103,437
NOTES
These results have been compiled in accordance with South African Statements
of Generally Accepted Accounting Practice and Schedule 4 of the South African
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 2003.
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 R1, 010, 527 based on the unreleased loss on unexpired forward
exchange contracts. No material events have occurred subsequent to
29th February 2004.
These results have been reviewed by Tuffias Sandberg KSi and their unqualified
review report is available for inspection at the company"s registered office.
FINANCIAL OVERVIEW
Directors of Nu-World Holdings Ltd are pleased to report excellent results
for the period ending 29th February 2004. The Group has produced solid
growth in turnover, operating income, attributable income, headline earnings
per share and dividend, for the fourteenth successive interim period. Nu-World
is a leading South African source for branded consumer durables. The Group
manufactures, imports, exports and distributes an extensive range of branded
consumer durables. Lower interest rates and increased consumer spending,
particularly over the Christmas season, contributed to the Group"s interim
period performance.
Group turnover increased by 21.1% to R794,483m, (February 2003 : R655,926m).
Net operating income increased 21.3% to R45,737m, (February 2003 : R37,698m).
Attributable income increased by 35.0% to R26,096m, (February 2003 : R19,333m).
Headline earnings per share on a weighted basis - H.E.P.S. increased 34.2%
to 121.3 cents, (February 2003 : 90.4 cents). Cash generated by operating
activities amounted to R20,658m. Interest paid was down 14.7% to R4,048m,
February 2003 : R4,747m). The Group holds cash balances on hand of R112,145m,
February 2003 : R69,849m). The net asset value per share
at 1516.2 cents is up 14.6%, (February 2003 : 1322.7 cents).
OPERATIONAL REVIEW
Nu-World is one of South Africa"s leading players in branded consumer
durables, across a broad range of small electrical appliances, consumer
electronics and large appliances. The South African operation produced a
positive rebound in margins. South African attributable income increased
57.8% to R22,068m, (February 2003 : R13,984m). The stronger Rand, coupled
with the Group"s increased buying power, contributed to lower landed product
costs. The lower retail selling prices were more than offset by lower landed
costs and increased volumes.
Small electrical appliances
Nu-World is South Africa"s leading low-cost, high-volume manufacturer,
importer and exporter, of small electrical appliances.
Notwithstanding the current strength of the Rand and the lower cost of
imported appliances, manufacturing performed relatively well. Export
volumes and margins were substantially down on the previous two years, but
the upsurge in local demand, offset the lower exports.
JVC * Telefunken * Thomson * Nu-Tec
Nu-World"s consumer electronics division houses a range of complimentary
international and in-house brands.
Retail selling prices were on average lower, due to the strength of the
Rand, but this was more than offset by lower landed costs and margins improved
significantly. Lower prices encouraged an upswing in volumes and revenue.
The Group successfully launched an in-house retail brand for one of South
Africa"s leading retail chains, during the period under review.
The Group continues to establish closer working relationships with many
key retail customers in the three countries in which we operate.
The Group"s purchasing power, for the Southern African, Australasian
and United Kingdom markets, provides a strategic advantage in obtaining
world-best pricing and trading terms.
PRIMA AUSTRALASIA PTY LTD - SUBSIDIARY
Akai * Telefunken * Prima Electronics * Nu-Tec * RCA -
Prima Australasia Pty Ltd is a 51% held subsidiary.
The strong Australian Dollar caused considerable price deflation at retail
level, explaining the marginal growth in Prima"s revenue. The growth in
volumes however, was reasonable. Prima"s margins improved year on year,
resulting in a 25.2% increase in comparable attributable income. The higher
income contribution during the previous year, arose from a once-off benefit
from the sale of discounted liquidated stock.
Prima has been successful in achieving reasonable growth in the Australian
market. Prima continues to win market share and to make further inroads into
leading Australian retailers. Prima"s leading international consumer
electronics brands of Akai, Telefunken and RCA, performed well and the
electrical appliance division recorded good growth. Prima is expected to
continue to contribute to the Group"s bottom line, at these levels, for the
remainder of the financial year.
NU-WORLD UK LIMITED - SUBSIDIARY
Nu-World UK is a 60% held subsidiary, established on 1st September 2003.
The results from our newly established U.K. subsidiary are being consolidated
for the first time in these results.
Nu-World UK contributed R70,578m to Group turnover and R2,103m to attributable
income. Nu-World UK imports and distributes a range of branded consumer
durables with a primary focus on small electrical appliances.
CONTI SOUTH AFRICA - SUBSIDIARY
Conti S.A. is a 100% held subsidiary acquired on the 1st June 2003. As a
result of obtaining approval, in terms of the Competition Act 1998
(Act No. 89 of 1998) as amended, the Conti S.A. acquisition is now
unconditional. The Conti brand is well recognized for value and quality in the
South African appliance market. Conti S.A., has performed reasonably well
during the period and continued growth is expected for the remainder of the
year.
MORPHY RICHARDS
Nu-World was appointed the exclusive agent for the Morphy Richards brand of
appliances in South Africa, as of the beginning of the period under review.
The up-market range of Morphy Richards appliances has been well received and
continues to grow.
MANPOWER AND SOCIAL RESPONSIBILITY
The Nu-World Group of companies remains committed to creating an environment
where all of our employees worldwide, can develop to their fullest potential.
The Nu-World health clinic serves to provide occupational health and safety
and to focus on HIV/Aids awareness programs and supportive medical assistance.
The Group remains committed to comply with environmental regulations.
PROSPECTS
Consumer sentiment has shown a significant improvement during the period under
review. Lower interest rates have afforded increasing levels of disposable
income which has boosted consumer spending. 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. The overall market continues to grow due the
government"s successful delivery of its electrification program. With 14
consecutive periods of growth, a strong balance sheet and the generation
of cash, directors believe that the Group is well positioned to focus on
organic growth and appropriate growth opportunities through acquisition.
Directors are optimistic that the Group remains strategically well positioned
to sustain growth at historical levels, for the remainder of the financial year.
DIVIDENDS
Nu-World has resolved to continue the policy of a single annual dividend paid
after the end of each financial year.
NU-WORLD HOLDINGS LTD
Directors: M.S. Goldberg (Chairman), J.A. Goldberg (Chief Executive),
G.R. Hindle (Financial Director)
Company Secretary: B.H. Haikney
Non-executive Director: J.M. Judin Independent Non-executive Director:
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 SPONSORS:
Nedbank Corporate; Sasfin Corporate Finance, a division of Sasfin Bank Limited
NU-WORLD HOLDINGS LIMITED: Registration number: 1968/002490/06
Share Code: NWL ISIN code: ZAE000005070 Registered Office: 35 - 3rd Street,
Wynberg, Sandton 2199
Date: 30/03/2004 04:00:16 PM Supplied by www.sharenet.co.za
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