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SPG - Super Group - Reviewed Results for the year ended 30 June 2011
Super Group Limited
(Incorporated in the Republic of South Africa)
Registration number 1943/016107/06
ISIN: ZAE000011334 Share code: SPG
("Super Group" or "the Group")
Reviewed Results
for the year ended 30 June 2011
Highlights
Revenue for the year increased by 12% to R7,835 million
Operating profit of R612 million up by 25% on the prior year
Profit before taxation increased by a satisfactory 116% to R470 million
Cash generated from operations up by 18% to R1,243 million
Headline earnings from continuing operations increased by 114% to R339
million
Reduction in total gearing to 27%
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
30 June 30 June
2011 2010
Reviewed Audited
R`000 R`000
Revenue 7 834 829 6 991 748
Trading profit before depreciation 1 171 960 1 051 705
and amortisation
Depreciation and amortisation (538 399) (537 761)
Trading profit 633 561 513 944
Capital items (21 095) (23 774)
Operating profit 612 466 490 170
Net finance charges (142 508) (272 598)
Profit before taxation 469 958 217 572
Income tax expense (101 525) (45 190)
Profit for the year from 368 433 172 382
continuing operations
Total profit/(loss) for the year 274 (3 697)
from discontinued operations
Profit/(loss) for the year from 3 368 (36 792)
discontinued operations
Fair value (loss)/profit on (3 094) 33 095
discontinuation
Profit for the year 368 707 168 685
Other comprehensive income
Effect of foreign exchange 54 111 (12 485)
Revaluation of land and buildings 12 238 74 250
Hedge accounting 2 428 15 554
Other comprehensive income for the 68 777 77 319
year (net of taxation)
Total comprehensive income for the 437 484 246 004
year
Profit for the year attributable
to:
Non-controlling interests - 48 055 33 936
continuing
Non-controlling interests - - (2 083)
discontinued
Equity holders of Super Group 320 378 138 446
Limited - continuing
Equity holders of Super Group 274 (1 614)
Limited - discontinued
368 707 168 685
RECONCILIATION OF HEADLINE
EARNINGS
Profit attributable to equity 320 652 136 832
holders of Super Group Limited
Capital items after tax 18 966 20 140
(continuing operations)
Fair value loss/(profit) on 3 094 (33 095)
discontinuation
Headline profit for the year 342 712 123 877
(Profit)/loss from discontinued (3 368) 36 792
operations
Loss attributable to non- - (2 083)
controlling interests -
discontinued
Headline earnings for the year - 339 344 158 586
continuing
Earnings per share
Basic earnings per share (cents) 10,1 6,4
Basic earnings per share 10,1 6,5
(continuing operations) (cents)
Headline earnings per share 10,8 5,8
(cents)
Headline earnings per share 10,7 7,4
(continuing operations) (cents)
Diluted earnings per share (cents) 10,1 6,4
Diluted earnings per share 10,1 6,5
(continuing operations) (cents)
Diluted headline earnings per 10,8 5,8
share (cents)
Diluted headline earnings per 10,7 7,4
share (continuing operations)
(cents)
Weighted number of shares (`000) 3 165 103 2 141 758
Diluted number of shares (`000) 3 179 825 2 146 060
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 30 June
2011 2010
Reviewed Audited
R`000 R`000
ASSETS
Property, plant and equipment 1 435 649 1 308 003
Full maintenance lease assets 862 186 1 391 635
Intangible assets 64 208 92 645
Goodwill 1 412 628 1 289 666
Investments and other non-current 1 650 27 856
assets
Deferred tax assets 225 536 238 697
Current assets 3 483 709 3 234 390
Assets held for sale - 108 832
Inventories 490 737 470 021
Trade and other receivables 1 302 346 1 218 515
Finance lease receivables 246 140 22 606
Insurance related assets 233 690 239 912
Cash and cash equivalents 1 210 796 1 174 504
Total assets 7 485 566 7 582 892
EQUITY AND LIABILITIES
Capital and reserves
Capital and reserves attributable 2 572 777 2 362 644
to equity holders of Super Group
Limited
Non-controlling interests 258 508 188 211
Total equity 2 831 285 2 550 855
Liabilities
Fund reserves 357 369 291 364
Deferred tax liabilities 149 050 173 103
Full maintenance lease liabilities 778 137 1 070 461
(including Australia)
Non-current 109 219 72 166
Current 668 918 998 295
Interest-bearing borrowings 1 035 213 1 111 922
Non-current 879 296 974 415
Current 155 917 137 507
Liabilities directly associated - 93 921
with assets held for sale
Insurance related liabilities 296 911 396 485
Other current liabilities 2 037 601 1 894 781
Total equity and liabilities 7 485 566 7 582 892
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended Year ended
30 June 30 June
2011 2010
Reviewed Audited
R`000 R`000
Cash flows from operating
activities
Operating cash flow 1 243 186 1 052 148
Working capital changes (272 063) (204 435)
Cash generated from operations 971 123 847 713
Finance costs paid (208 877) (340 957)
Investment income and interest 77 208 60 715
received
Income tax paid (115 282) (57 333)
Dividend paid (37 727) -
Net cash generated from operating 686 445 510 138
activities
Net cash (outflow)/inflow from (13 951) 275 606
investing activities
Net cash (outflow)/inflow from (685 949) 95 177
financing activities
Net (decrease)/increase in cash (13 455) 880 921
and cash equivalents
Net cash and cash equivalents at 1 197 258 321 350
beginning of the year
Effect of foreign exchange on cash 26 653 (5 013)
and cash equivalents
Cash and cash equivalents at end 1 210 456 1 197 258
of the year
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended Year ended
30 June 30 June
2011 2010
Reviewed Audited
R`000 R`000
Capital and reserves attributable
to equity holders of Super Group
Limited
Balance at beginning of the year 2 362 644 994 047
Share (repurchases)/issues and (79 597) 1 158 727
options exercised, net of expenses
Total comprehensive income for the 372 573 213 627
year attributable to equity
holders of Super Group Limited
Profit for the year 320 652 136 832
Effect of foreign exchange 37 255 (13 009)
Revaluation of land and buildings 12 238 74 250
Hedge accounting 2 428 15 554
Share-based payment expenses 8 475 2 231
Changes in equity as a result of (91 318) (5 988)
acquisitions, disposals and
transactions with equity partners
Balance at end of the year 2 572 777 2 362 644
Non-controlling interests
Balance at beginning of the year 188 211 194 196
Ordinary dividends paid to non- (37 727) -
controlling interests
Total comprehensive income for the 64 911 32 377
year attributable to non-
controlling interests
Profit for the year 48 055 31 853
Effect of foreign exchange 16 856 524
Movement in other reserves - 903
Non-controlling interest loan - 9 217
capitalised
Changes in non-controlling 43 113 (48 482)
interests as a result of
acquisitions and disposals
Balance at end of the year 258 508 188 211
Total equity at end of the year 2 831 285 2 550 855
Comprising:
Share capital 327 310 327 310
Share premium 1 893 091 1 893 091
Capital redemption reserve fund 5 486 5 486
Retained earnings 524 176 270 620
Share buyback reserve (622 206) (542 609)
General reserve 556 036 556 036
Revaluation reserve 157 666 147 792
Foreign currency translation (268 187) (305 442)
reserve
Contingency reserve - insurance 1 064 14 447
Hedging reserve (1 659) (4 087)
Non-controlling interests 258 508 188 211
Total equity at end of the year 2 831 285 2 550 855
OPERATING SEGMENTS
Year ended Year ended
30 June 30 June
2011 2010
Reviewed Audited
R`000 R`000
REVENUE
Supply Chain 2 792 600 2 572 285
Supply Chain - South Africa 2 429 246 2 228 673
Supply Chain - International 3 131 -
Supply Chain - African Logistics 360 223 343 612
Fleet Solutions 1 880 896 1 739 582
Fleet Africa 1 051 717 976 363
Sg fleet (Australia) 829 179 763 219
Dealerships 3 161 333 2 679 881
Services - -
Continuing operations 7 834 829 6 991 748
Discontinued operations 61 461 2 532 259
Group 7 896 290 9 524 007
Year ended Year ended
30 June 30 June
2011 2010
Reviewed Audited
R`000 R`000
OPERATING PROFIT
Supply Chain 182 716 168 669
Supply Chain - South Africa 164 801 172 784
Supply Chain - International 1 219 14 767
Supply Chain - African Logistics 16 696 (18 882)
Fleet Solutions 358 222 272 269
Fleet Africa 149 528 122 620
Sg fleet (Australia) 208 694 149 649
Dealerships 63 710 41 655
Services 7 818 7 577
Continuing operations 612 466 490 170
Discontinued operations (24 446) 4 671
Group 588 020 494 841
Year ended Year ended
30 June 30 June
2011 2010
Reviewed Audited
R`000 R`000
PROFIT BEFORE TAX
Supply Chain 169 620 128 133
Supply Chain - South Africa 148 250 128 618
Supply Chain - International 14 297 28 130
Supply Chain - African Logistics 7 073 (28 615)
Fleet Solutions 288 375 162 884
Fleet Africa 108 548 58 768
Sg fleet (Australia) 179 827 104 116
Dealerships 40 879 18 160
Services (28 916) (91 605)
Continuing operations 469 958 217 572
Discontinued operations (11 722) (15 791)
Group 458 236 201 781
SALIENT FEATURES
30 June 30 June
2011 2010
Reviewed Audited
R`000 R`000
1. Interest-bearing borrowings
Australian ring-fenced borrowings 506 594 385 463
Property borrowings 308 312 361 002
Term loans - 237 671
Other borrowings 219 967 170 986
Bank overdraft 340 -
Interest-bearing borrowings and 1 035 213 1 155 122
bank overdraft before re-
allocation to held for sale
Other interest-bearing borrowings - (43 200)
directly associated with assets
held for sale
1 035 213 1 111 922
2. Cash and cash equivalents and
bank overdrafts
Cash and cash equivalents 1 210 796 1 174 504
Bank overdraft (340) -
Cash and cash equivalents related - 22 754
to assets held-for-sale
Total cash and cash equivalents as 1 210 456 1 197 258
per statement of cash flows
3. Share statistics
Total issued less treasury shares 3 090 698 3 200 530
(`000)
Weighted (`000) 3 165 103 2 141 758
Diluted (`000) 3 179 825 2 146 060
Net asset value per share (cents) 83,2 73,8
Net asset value excluding goodwill 37,5 33,5
per share (cents)
4. Capital commitments
Authorised but not yet contracted 242 178 55 069
for capital commitments, excluding
full maintenance lease assets
(R`000)
Capital commitments will be funded
from normal operating cash flows
and the utilisation of existing
borrowings facilities.
5. Related party transactions
The Group, in the ordinary course of business, entered into various sales
and purchase transactions on an arm`s length basis with the related parties.
6. Subsequent events
Other than the matters disclosed, the directors are not aware of any matter
or circumstance arising subsequent to the balance sheet date up to the date
of this report.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed consolidated financial statements for the year ended 30 June
2011 have been prepared in accordance with the framework concepts and
measurement and recognition requirements of International Financial
Reporting Standards ("IFRS"), in particular the presentation and disclosure
requirements of International Accounting Standard ("IAS") 34 Interim
Financial Reporting, the AC 500 series issued by the Accounting Practices
Board or its successor, the Listings Requirements of the JSE Limited and the
South African Companies Act 71 of 2008, as amended. The accounting policies
applied in the presentation of the condensed consolidated financial
statements are in terms of IFRS and are consistent with those applied for
the year ended 30 June 2010, except for the standards and amendments to
standards that became effective on 1 January 2010: IFRS 5 (Non-current
Assets Held for Sale and Discontinued Operations), IFRS 8 (Operating
Segments), IAS 1 (Presentation of Financial Statements (revised)), IAS 7
(Statement of Cash Flows), IAS 17 (Leases) and IAS 36 (Impairment of
Assets). The condensed consolidated financial statements are presented in
Rand, which is Super Group`s presentation currency. The adoption of these
standards has no effect on the results, nor has it required any restatement
of the results.
INDEPENDENT REVIEW BY THE AUDITORS
The condensed consolidated statement of financial position at 30 June 2011
and the condensed consolidated statement of comprehensive income, statement
of changes in equity, operating segments and cash flows for the year ended
have been reviewed by KPMG Inc. Their unmodified report is available for
inspection at the registered office of the company.
COMMENTARY
Overview of results
Despite the continuing difficult economic and trading environment, Super
Group delivered a satisfactory set of results for the year to 30 June 2011.
An overall improvement in operating efficiencies and cost
containment initiatives contributed significantly to the improvement in
Group operating margins.
A number of new business contracts were successfully implemented in the
Supply Chain and Fleet Solutions operations in both South Africa and
Australia. Most notable are the renewals of the City of Johannesburg (COJ)
Red Fleet and the Western Australian Government fleet contracts.
Emphasis has been strongly focused on effective cash generation and the
management of working capital exposures, resulting in a net cash retention
for the year of R672 million despite a capital spend on property, plant and
equipment of R245 million.
The Group repaid all of its Term Loans during the past year reducing its
total gearing to 27%, compared to 54% as at the end of June 2010. The
unrestricted gearing ratio, which excludes Full Maintenance Lease (FML)
borrowings and restricted cash, has reduced to 18% as at June 2011.
Financial performance
Revenue from continuing operations increased by 12% to R7 835 million mainly
as a result of new business generated in the Supply Chain South Africa and
Fleet Solutions businesses and a 25% increase in new vehicle sales within
the Dealerships operations.
Operating profits increased by 25% to R612 million for the year under
review. The improvement in operating margin to 7,8% (June 2010: 7,0%) is
mainly attributable to the return to profitability of the African Logistics
operations and excellent performances in the Fleet Solutions and Dealership
Divisions.
Profit before taxation increased by 116% to R470 million, reflecting the
benefits of improved operational profitability and lower finance costs as a
result of the positive net cash retained from operations. The Group`s
operating cash flow of R1 243 million before working capital movements and
finance costs was 18% up on the prior year.
The Consolidated Statement of Financial Position reflects the benefit of
strong cash flow generation over the past two financial years and both total
and unrestricted gearing levels are well within targeted levels. The net
asset value per share of 83,2 cents is up by 13% from the 73,8 cents level
at 30 June 2010.
Divisional review
The Supply Chain South Africa`s performance in increasing revenue and profit
before taxation over the prior year, was driven by an improved volume
performance in the FMCG business and sales growth albeit modest in the
Automotive and Staple Foods operations. The overall sector result was
moderated by a disappointing result in the Sherwood International business.
The Sherwood operational profitability declined significantly as a result of
lower margins on a number of core beverage procurement contracts and a
marked decline in agricultural and mining equipment expenditure within sub-
Saharan Africa. As a direct consequence, operating profit declined by 4% for
the year to June 2011, whilst the increase in profit before taxation over
the prior year of 16% was below expectations.
Fleet Africa completed the roll-out of the new vehicle fleet on the Eastern
Cape Provincial Government contract as well as extending both the City of
Johannesburg (COJ) Red and Vanilla fleet contracts during the year. Revenue
increased by 8%, operating profit by 22% and profit before taxation by 85%,
mainly as a result of contract re-fleeting and the securing of a number of
new corporate deals.
Sg fleet (Australia) reported strong operational results due to the
strengthening of the Australian economy and a year of record sales
origination. This business delivered a 9% increase in revenue and a 39%
increase in operating profit. Fleet maintenance costs were well controlled
and the business also benefitted from an improvement in vehicle residual
values. Sg fleet increased its vehicle fleet by 3% over the year reflecting
both good contract retention and the acquisition of a large national utility
contract.
Dealerships delivered a good performance, increasing revenue by 18% and
operating profit by 53%. The strong sales performance and stringent control
of costs facilitated a satisfactory increase in operating margins. The
reported growth in new vehicle sales of 24,8% outperformed the industry by
1,7% over the period concerned.
The Dealership Division successfully acquired the Land Rover dealership in
Vereeniging and the Volkswagen and Audi dealerships in Rustenburg. The
introduction of the Volkswagen and Audi product ranges to the Super Group
Dealership Division is complementary to the existing product range and
provides an expanded consumer reach into the future.
Board changes
Super Group announced the appointment of Dr Enos Banda to the Board as an
Independent Non-Executive Director with effect from 1 July 2011. Dr Banda is
a South African entrepreneur and the founder of Freetel Capital (Pty)
Limited. Dr Banda serves on the boards of a number of listed and unlisted
entities including MMC Norilsk Nickel. He is admitted to the New York law
bar and is an Advocate of the Supreme Court of South Africa.
Prospects
Super Group continues to execute its stated strategy for growth in revenue
and earnings through organic expansion in the existing divisions and
selected complementary strategic acquisitions. The acquisition of Haulcon, a
specialised bulk dry powder and liquids distribution business, at a cost of
R28 million effective from 1 July 2011, reflects the type of synergistic
acquisitions being pursued by the Group.
The local economy remains pedestrian and moderate volume growth is projected
within the Supply Chain and Fleet Africa operations over the next year. The
Sg fleet (Australia) business is currently reporting a strong tender
pipeline and is well positioned for the delivery of organic growth in its
core Australasian and United Kingdom markets.
Dealerships anticipate that the new vehicle sales growth will continue,
although not at the double digit percentages experienced over the past year.
The supply issues as a result of the Japanese tsunami should return to
normal by the end of December 2011.
Strong cash flow generation has enabled the Group to reduce its borrowings
substantially and Super Group is in a sound financial position and is
optimally positioned for any improvement in economic activity within its
core markets.
In line with Super Group`s current policy, no dividend has been declared by
Super Group for the year ended 30 June 2011.
For more information pertaining to the final results, the presentation to
the investor community can be viewed on the Group`s website,
www.supergroup.co.za from Thursday, 18 August 2011.
On behalf of the Board
P Vallet P Mountford
Non-Executive Chairman Chief Executive Officer
16 August 2011
Sandton
Preparation of reviewed results
The financial statements have been prepared under the supervision of the
Chief Financial Officer, C Brown, CA(SA), BComp (Hons), MBL
Directors:
Executive: P Mountford (Chief Executive Officer) and C Brown (Chief
Financial Officer)
Non-Executive:
P Vallet (Chairman), N Davies*, J Newbury*, V Chitalu*#, D Rose* and Dr E
Banda*
*Independent #Zambian
Company Secretary:
N Redford
Registered office:
27 Impala Road, Chislehurston, Sandton, 2196
Transfer secretaries:
Computershare Investor Services (Pty) Limited
(Registration number 20004/003687/07)
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
www.supergroup.co.za
16 August 2011
Sandton
Sponsor:
Deutsche Securities (SA) (Proprietary) Limited
Date: 16/08/2011 17:05:01 Supplied by www.sharenet.co.za
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