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AOO / AON / AOVP - African & Overseas Enterprises Limited - Unaudited interim group results for the six months ended 31 December 2010 AFRICAN & OVERSEAS ENTERPRISES LIMITED (Incorporated in the Republic of South Africa) (Reg No. 1947/027461/06) Share codes: AOO - AON - AOVP ISIN: ZAE000000485 - ZAE000009718 - ZAE000000493 UNAUDITED INTERIM GROUP RESULTS for the six months ended 31 December 2010 HIGHLIGHTS: - REVENUE UP 17.7% - OPERATING PROFIT UP 55.2% - HEADLINE EARNINGS PER SHARE UP 47.0% COMMENTARY The principal operating subsidiary Rex Trueform Clothing Company Limited reports as follows: "Group results Revenue increased by 17.7% during the six-month period to end-December 2010 reflecting an improvement in the trading environment. Operating profit increased by 54.2%. This was achieved through a better performance by the group`s core retail activities and an improvement in the contribution of the manufacturing and property segments of the group compared to last year. As a result earnings per share increased by 46.0% to 106.7 cents (73.1 cents in 2009). Headline earnings per share increased by 46.2% to 106.7 cents (73.0 cents in 2009). Retail A higher level of consumer confidence resulted in an improvement of 14.4% in the turnover of the group`s QUEENSPARK and J CREW retail stores. This increase in turnover was largely generated by existing stores, certain of which were refurbished, relocated or expanded during the past year. One new store was opened during the period as management concentrated on improving the performance of the existing store base. Same store sales increased by 11%. The operating profit of the retail segment improved by 17.2% representing a return of 10.1% on turnover compared to 9.9% in the corresponding period of last year. Manufacturing Extraneous expenses related to a reorganisation of the manufacturing operation during the comparative period of last year impacted negatively on results for that period. The reorganised operation which represents a relatively modest 6% of group revenue contributed positively to profit during the period under review. The volumes realised in this segment were higher than usual and there is no certainty that this level of profitability will be achieved again in the future. Prospects Although the six months under review reflected some recovery in consumer confidence, particularly in Queenspark`s niche retail market, it is expected that the second half of the current financial year will not provide the same level of growth as achieved during this first half to December 2010. In particular, the material benefits provided by the Duty Credit Certificate Scheme are now no longer available from the beginning of January and this, together with expected inflationary pressures, will result in pressure on margins. Queenspark continues to focus on initiatives to further strengthen and consolidate its position in the market-place through the opening of new stores, upgrades of existing stores and improvements in its product offering. The achievement of sales and profit targets will, however, remain challenging during the remainder of the current financial year." Signed on behalf of the board ML Krawitz Chairman PE Shub Chief Executive Officer Cape Town 2 March 2011 Statement of comprehensive income Consolidated (R`000) Six months ended 31 December % 2010
change (Unaudited) Revenue 17.7% 290 126 Turnover 17.9% 284 911 Cost of sales (136 819) Gross profit 19.4% 148 092 Employment costs (45 748) Occupancy costs (34 209) Depreciation and amortisation (7 481) Other operating costs (34 738) Rental income 249 Royalties 503 Operating profit 55.2% 26 668 Dividends received 12 Interest received 4 451 Interest paid (122) Profit before tax 45.5% 31 009 Income tax expense (9 919) Profit for the period 47.1% 21 090 Other comprehensive income Net changes in fair value of available-for-sale financial assets - Total comprehensive income for the period 21 090 Profit attributable to: Ordinary and `N` ordinary shareholders 11 251 Preference shareholders 132 Profit attributable to equity holders of the parent 11 383 Non-controlling interest 9 707 Profit for the period 21 090 Total comprehensive income attributable to: Ordinary and `N` ordinary shareholders 11 251 Preference shareholders 132 Comprehensive income attributable to equity holders of the parent 11 383 Non-controlling interest 9 707 Total comprehensive income for the period 21 090 Reconciliation of headline earnings Attributable earnings 11 251 (Profit)/loss on disposal of plant and equipment (2) Headline earnings 11 249 Headline earnings per share (cents) 47.0% 98.8 Earnings per share (cents) 46.8% 98.8 Weighted average number of equity shares on which earnings per share is based (000) 11 387 Consolidated (R`000) Year Six months ended ended
31 December 30 June 2009 2010 (Unaudited) (Audited) Revenue 246 526 490 750 Turnover 241 687 480 850 Cost of sales (117 708) (221 915) Gross profit 123 979 258 935 Employment costs (38 914) (83 322) Occupancy costs (31 106) (62 683) Depreciation and amortisation (6 547) (13 754) Other operating costs (30 753) (64 598) Rental income 17 128 Royalties 503 995 Operating profit 17 179 35 701 Dividends received 16 16 Interest received 4 303 8 761 Interest paid (182) (359) Profit before tax 21 316 44 119 Income tax expense (6 977) (14 806) Profit for the period 14 339 29 313 Other comprehensive income Net changes in fair value of available-for-sale financial assets - (146) Total comprehensive income for the period 14 339 29 167 Profit attributable to: Ordinary and `N` ordinary shareholders 7 662 15 613 Preference shareholders 72 138 Profit attributable to equity holders of the parent 7 734 15 751 Non-controlling interest 6 605 13 562 Profit for the period 14 339 29 313 Total comprehensive income attributable to: Ordinary and `N` ordinary shareholders 7 662 15 532 Preference shareholders 72 138 Comprehensive income attributable to equity holders of the parent 7 734 15 670 Non-controlling interest 6 605 13 497 Total comprehensive income for the period 14 339 29 167 Reconciliation of headline earnings Attributable earnings 7 662 15 613 (Profit)/loss on disposal of plant and equipment (9) 510 Headline earnings 7 653 16 123 Headline earnings per share (cents) 67.2 141.6 Earnings per share (cents) 67.3 137.1 Weighted average number of equity shares on which earnings per share is based (000) 11 387 11 387 Statement of financial position Consolidated (R`000) At 31 December 30 June
2010 2009 2010 (Unaudited) (Unaudited) (Audited) Assets Non-current assets 75 471 65 590 67 847 Property, plant and equipment 65 157 53 883 57 394 Investment property 3 511 3 511 3 511 Intangible assets 1 317 2 065 2 107 Other investments 576 722 576 Deferred taxation 4 910 5 409 4 259 Current assets 226 507 196 126 222 447 Inventories 62 349 50 202 57 994 Trade and other receivables 13 584 16 891 21 026 Forward exchange contracts - - 522 Income tax receivable 15 394 1 248 Cash and cash equivalents 150 559 128 639 141 657 Total assets 301 978 261 716 290 294 Equity and liabilities Capital and reserves 249 382 220 016 234 874 Share capital 1 200 1 200 1 200 Share premium 6 076 6 076 6 076 Other reserves 516 551 500 Retained earnings 129 994 114 299 122 299 Non-controlling interest 111 596 97 890 104 799 Non-current liabilities 12 823 12 353 13 263 Post-retirement liability 4 074 4 085 4 122 Accrued operating lease liability 8 749 8 268 9 141 Current liabilities 39 773 29 347 42 157 Provisions 514 578 560 Trade and other payables 35 785 27 829 40 976 Forward exchange contracts 2 180 940 - Income tax payable 1 294 - 621 Total equity and liabilities 301 978 261 716 290 294 Abridged statement of cash flows Consolidated (R`000) Year Six months ended ended
31 December 30 June 2010 2009 2010 (Unaudited) (Unaudited) (Audited) Operating profit before working capital changes 36 028 25 573 52 149 Working capital changes (1 675) 10 077 11 316 Interest received 4 451 4 303 8 761 Interest paid (122) (182) (359) Taxation paid (8 664) (6 420) (13 332) Dividends received 12 16 16 Dividends paid (6 971) (6 137) (6 162) Net cash inflow from operating activities 23 059 27 230 52 389 Additions to property, plant and equipment (14 726) (12 874) (25 166) Proceeds on disposal of property, plant and equipment 198 24 175 Net cash outflows from investing activities (14 528) (12 850) (24 991) Proceeds on delivery of shares by share trust 371 - - Net cash inflows from financing activities 371 - - Net increase in cash and cash equivalents 8 902 14 380 27 398 Cash and cash equivalents at the beginning of the period 141 657 114 259 114 259 Cash and cash equivalents at the end of the period 150 559 128 639 141 657 Statement of changes in equity Consolidated (R`000) At
31 December 30 June 2010 2009 2010 (Unaudited) (Unaudited) (Audited) Share capital 1 200 1 200 1 200 Share premium 6 076 6 076 6 076 Other reserves Opening balance 500 530 530 Share-based payments 16 21 51 Fair value adjustment for available-for- sale financial assets - - (81) Closing balance 516 551 500 Retained earnings Opening balance 122 299 109 533 109 533 Profit attributable to equity holders of the parent 11 383 7 734 15 751 Dividends (3 316) (2 968) (2 985) Loss from dilution of interest in subsidiary (372) - - Closing balance 129 994 114 299 122 299 Non-controlling interest Opening balance 104 799 94 438 94 438 Profit attributable to non-controlling interest 9 707 6 605 13 562 Share-based payments 13 16 41 Fair value adjustment for available-for-sale financial assets - - (65) Change in degree of control 732 - - Dividends (3 655) (3 169) (3 177) Closing balance 111 596 97 890 104 799 Total capital and reserves 249 382 220 016 234 874 Segmental reporting Consolidated (R`000) Year Six months ended ended
31 December 30 June 2010 2009 2010 (Unaudited) (Unaudited) (Audited) Segment revenue Retail 268 200 234 461 461 934 Property 249 17 128 Property total 1 244 786 1 973 Less: intersegment rentals (995) (769) (1 845) Manufacturing 17 214 7 729 19 911 Manufacturing total 17 291 8 815 21 170 Less: intersegment sales (77) (1 086) (1 259) Total segment revenue 285 663 242 207 481 973 Dividends received 12 16 16 Interest received 4 451 4 303 8 761 Total revenue 290 126 246 526 490 750 Segment profit/(loss) Retail 27 151 23 162 44 409 Property 456 (348) (202) Manufacturing 1 875 (3 116) (2 700) Segment profit 29 482 19 698 41 507 Group Services* (2 814) (2 519) (5 806) Total operating profit 26 668 17 179 35 701 Depreciation and amortisation Retail 7 359 6 375 13 439 Manufacturing 57 109 190 Total manufacturing depreciation 138 266 430 Less: included in cost of sales (81) (157) (240) Property 65 63 125 Total depreciation and amortisation 7 481 6 547 13 754 Total segment assets 301 978 261 716 290 294 Retail 178 051 180 388 171 860 Property 10 412 8 695 9 236 Manufacturing 13 117 10 288 13 580 Group Services* 100 398 62 345 95 618 Total segment liabilities 52 596 41 700 55 420 Retail 41 691 34 096 46 622 Property 30 - 30 Manufacturing 5 030 2 259 3 636 Group Services* 5 845 5 345 5 132 Capital expenditure 14 726 12 874 25 166 Retail 14 396 12 874 25 159 Property 330 - - Manufacturing - - 7 Group Services* - - - * Group Services includes corporate costs. Other information Capital commitments (authorised - not contracted for) 6 011 11 050 16 998 Gross profit margin 52.0% 51.3% 53.8% Operating profit margin 9.4% 7.1% 7.4% Retail segment operating profit margin 10.1% 9.9% 9.6% Notes 1. Basis of preparation These interim financial statements have been prepared in accordance with International Accounting Standard IAS 34: Interim Financial Reporting and the AC 500 Standards as issued by the Accounting Practices Board or its successor. They are also compliant with International Financial Reporting Standards (IFRS). These results have not been audited or reviewed by the company`s auditors, KPMG Inc. 2. Accounting policies The accounting policies applied in these interim statements are consistent with those applied in the preparation of the group`s annual financial statements for the year ended 30 June 2010. 3. Preference dividend A dividend on the 6% cumulative participating preference shares for the six months ended 31 December 2010 in the amount of R132 000 was declared on 1 December 2010 and paid on 28 December 2010. Directors: ML Krawitz+ (Chairman), PE Shub (Chief Executive Officer) (alt ML Krawitz), CEA Radowsky, JC O`Brien, PM Naylor*, RV Orlin* and DS Johnson. * Independent non-executive + Non-executive African & Overseas Enterprises Limited (Incorporated in the Republic of South Africa) (Reg No. 1947/027461/06) Share codes: AOO - AON - AOVP ISIN: ZAE000000485 - ZAE000009718 - ZAE000000493 Registered office: Rex Buildings, 263 Victoria Road, Salt River, Cape Town, 7925 Secretary: AA Hodgkinson Transfer secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg, 2001 Sponsor: Java Capital Websites: www.queenspark.com www.rextrueform.com Date: 04/03/2011 12:20:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
