To view the PDF file, sign up for a MySharenet subscription.

HSP - Holdsport Limited - Final results for the year ended 29 February 2012

Release Date: 18/05/2012 08:00
Code(s): HSP
Wrap Text

HSP - Holdsport Limited - Final results for the year ended 29 February 2012 Holdsport Limited (Incorporated in the Republic of South Africa) Registration number: 2006/022252/06 Share code: HSP ISIN: ZAE000157046 ("Holdsport" or "the company" or "the group") FINAL RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2012 - SALES UP 9.8% TO R1 243.5 MILLION - CORE HEADLINE EARNINGS PER SHARE UP 22.5% TO 387.4 CENTS - STRONG CASH FLOW FROM OPERATING ACTIVITIES - FINAL GROSS DIVIDEND DECLARED OF 115 CENTS PER SHARE GROUP OVERVIEW The Holdsport Limited group comprises the retail chains: Sportsmans Warehouse and Outdoor Warehouse; and Performance Brands (previously First Ascent SA), an expanding outdoor apparel and equipment wholesale business. Holdsport was listed on the JSE Limited on 18 July 2011, and these are its maiden set of final results. The group delivered a pleasing result for the year with total sales increasing by 9.8% to R1 243.5 million and retail sales increasing by 8.7% to R1 195.9 million. The group`s core headline earnings increased by 22.5% to R167.2 million. Pro forma comparative figures have been provided to allow for a better evaluation of the group`s performance. Holdsport has maintained strong margins through its procurement strategies and rigorous cost management. The group`s operating profit margin for the period increased from 17.3% to 18.2%, mainly as a result of profits on foreign exchange denominated transactions of R1.4 million in this financial year compared to losses of R6.7 million in the previous year. The group opened two new stores during the period and relocated three stores, with a weighted increase in trading area of 3.0%. A final gross dividend of 115.0 cents per share has been declared, this being in line with the group`s dividend policy of two times cover by core headline earnings, which amounted to 228.2 cents per share in the second half of the year. TRADING DIVISIONS Sales for the various trading divisions were as follows: Increase Number of Sales in sales stores Rm % Sportsmans Warehouse 33 896.0 9.2 Outdoor Warehouse 18 299.9 7.3 Retail sales 51 1 195.9 8.7 Performance Brands - 47.6 45.9 Total sales 51 1 243.5 9.8 Like-for-like store retail sales grew by 6.6%, while the retail chains experienced price inflation of approximately 0.6% for the year. Total group trading expenses increased by 7.7% on a like-for-like basis, excluding foreign exchange profits and losses. The Sportsmans Warehouse division opened one new store in Pietermaritzburg and relocated two stores in Pretoria and Johannesburg, and is now trading out of 33 stores. Like-for-like store sales increased by 7.5%. The Outdoor Warehouse division opened one new store in Vanderbijlpark and relocated a store in Somerset West, and is now trading out of 18 stores. Like- for-like store sales increased by 3.7%. Performance Brands (previously First Ascent SA) has been positioned as a wholesale business specialising in the development and distribution of sports and outdoor apparel and equipment. The company traded well, and achieved R47.6 million of external sales, a 45.9% growth from the previous year. FUTURE CAPITAL EXPENDITURE The group purchased the CAPESTORM trademark and related inventory on 1 March 2012. Performance Brands will manage this trademark as part of its portfolio of wholesale brands. Holdsport is currently considering the expansion of its distribution facilities. This could result in the group developing two new distribution centres over the next 15 months which will increase the distribution capacity for its retail stores and cater for Performance Brands` growth. The group signed lease agreements for a further three new stores to be opened in the next financial year, and is currently evaluating other opportunities. In addition, the group will be increasing the size of its Fourways store and relocate a store in Polokwane. PROSPECTS The 2010 FIFA World CupTM and the 2011 Rugby World Cup in the last two years created a high base from which to grow. Furthermore, low selling price inflation, creeping cost inflation, increased competition and the risk of overtrading in the sporting goods sector are likely to present challenges in the year ahead. Notwithstanding the above challenges, the group is confident that it will attract customers and show growth as long as it continues to provide its distinctive retail experience with exciting choice, depth of product and exceptional service. FINAL DIVIDEND ANNOUNCEMENT The directors declared a final gross dividend of 115.0 cents per share payable on Monday, 25 June 2012 to ordinary shareholders recorded in the books of the company at the close of business on Friday, 22 June 2012. The last day to trade ("cum" the dividend) in order to participate in the dividend will be Friday, 15 June 2012. The Holdsport Limited ordinary shares will commence trading "ex" the dividend from the commencement of business on Monday, 18 June 2012 and the record date, as indicated, will be Friday, 22 June 2012. Ordinary shareholders should take note that share certificates may not be dematerialised or rematerialised during the period Monday, 18 June 2012 to Friday, 22 June 2012, both dates inclusive. In terms of the new withholding tax on dividends which became effective on 1 April 2012, the following additional information is disclosed: - the dividend has been declared out of total reserves; - the South African tax dividend rate is 15%; - there are no STC credits utilised; - the net local dividend amount is 97.75 cents per ordinary share for shareholders liable to pay the new dividend tax, and 115 cents per ordinary share for shareholders exempt from the new dividend tax; - the issued share capital of Holdsport at the date of declaration is 43 150 220 ordinary shares; and - Holdsport`s tax reference number is 9618595152. Certificated ordinary shareholders are reminded that all entitlements to dividends with a value less than R5.00 per certificated shareholder will be aggregated and the proceeds donated to a registered charity of the directors` choice, in terms of the memorandum of incorporation of the company. PRO FORMA INFORMATION The unaudited pro forma statement of financial position at 28 February 2011 and pro forma statement of comprehensive income of Holdsport for the year then ended is included in these results. This information was previously published in Annexure 3 of Holdsport`s prelisting statement (dated 28 June 2011) to show the impact of Holdsport`s listing and of the shareholder loans which were converted to share capital before the listing. The unaudited pro forma financial information for the year ended 28 February 2011 has been provided to allow for a better evaluation of the group`s performance. Pro forma information has been prepared consistently with the accounting policies applied to the current and prior periods presented. The independent reporting accountants` report on the unaudited pro forma statement of financial position and statement of comprehensive income was also published in Holdsport`s prelisting statement and is available for inspection at the company`s registered office during normal business hours and on its website www.holdsport.co.za. Signed on behalf of the board. SA Muller KG Hodgson Chairman CEO Cape Town 18 May 2012 Preliminary Consolidated Statements of Financial Position 29 February 28 February 28 February 2012 2011 2011
Audited Pro forma Audited R`000 R`000 R`000 Assets Non-current assets Plant and equipment 51 903 42 759 42 759 Goodwill and other intangibles 638 083 650 637 650 637 Total non-current assets 689 986 693 396 693 396 Current assets Inventories 296 723 232 762 232 762 Trade and other receivables 19 389 15 558 15 558 Cash and cash equivalents 77 374 19 337 67 919 Total current assets 393 486 267 657 316 239 Total assets 1 083 472 961 053 1 009 635 Equity and liabilities Capital and reserves Share capital 229 312 229 312 19 Other reserves (13 370) (15 500) - Retained earnings 515 603 382 189 384 244 Equity attributable to owners of the company 731 545 596 001 384 263 Non-controlling interest - - 1 027 Total equity 731 545 596 001 385 290 Non-current liabilities Loans 124 841 150 642 379 935 Deferred taxation 55 595 59 738 59 738 Straight-lining lease liability 21 972 19 160 19 160 Total non-current liabilities 202 408 229 540 458 833 Current liabilities Trade and other payables 120 562 100 132 100 132 Derivative instruments 1 095 6 563 6 563 Short-term portion of loans 25 693 24 174 54 174 Taxation 2 169 4 643 4 643 Total current liabilities 149 519 135 512 165 512 Total liabilities 351 927 365 052 624 345 Total equity and liabilities 1 083 472 961 053 1 009 635 Preliminary Consolidated Cash Flow Statements Year ended Year ended 29 February 28 February 2012 2011 Audited Audited
R`000 R`000 Cash flows from operating activities Cash generated from operations 219 514 210 713 Finance income 3 773 4 038 Finance costs (19 005) (23 042) Dividends paid (20 281) - Taxation paid (70 181) (52 639) Net cash inflows from operating activities 113 820 139 070 Cash flows from investing activities Additions to plant and equipment (32 214) (20 940) Proceeds on sale of plant and equipment 601 1 072 Net cash outflows from investing activities (31 613) (19 868) Cash flows from financing activities Repayment of loans (54 170) (140 660) Forfeitable share plan (15 500) - Acquisition of non-controlling interest (3 082) (13 101) Net cash outflows from financing activities (72 752) (153 761) Net increase/(decrease) in cash and cash equivalents 9 455 (34 559) Cash and cash equivalents at the beginning of the year 67 919 102 478 Cash and cash equivalents at the end of the year 77 374 67 919 Preliminary Consolidated Statements of Comprehensive Income Year Year Year ended ended ended
29 February 28 February 28 February 2012 2011 2011 Audited Pro forma Audited R`000 R`000 R`000
Sales 1 243 539 1 132 482 1 132 482 Cost of sales (638 807) (581 640) (581 640) Gross profit 604 732 550 842 550 842 Other income 5 094 3 389 3 389 Trading expenses (383 395) (365 247) (358 624) Operating profit 226 431 188 984 195 607 Finance income 3 773 4 038 4 038 Finance cost (12 945) (23 036) (100 644) Profit before taxation 217 259 169 986 99 001 Taxation (63 564) (49 584) (29 708) Profit for the year 153 695 120 402 69 293 Attrituable to: Equity holders of the company 153 695 120 402 68 866 Non-controlling interest - - 427 Profit for the period and total comprehensive income for the period 153 695 120 402 69 293 Preliminary Consolidated Segmental Analysis Per- Sportsmans Outdoor formance Warehouse Warehouse Brands
R`000 R`000 R`000 Year ended 29 February 2012 External revenue 896 007 299 956 47 576 External interest received - - 246 External interest paid - - (72) Depreciation and amortisation (15 372) (4 964) (1 991) Group profit/(loss) before taxation 188 362 55 641 20 759 - Segment profit/(loss) before taxation 188 362 55 641 20 759 - IFRS charges - - - Capital expenditure 23 286 7 141 501 Segment assets 230 846 94 765 34 847 Segment liabilities 84 639 18 550 8 643 Year ended 28 February 2011 External revenue 820 382 279 500 32 600 External interest received - - 541 External interest paid - - (18) Depreciation and amortisation (16 253) (4 949) (1 696) Group profit/(loss) before taxation 161 137 49 445 16 089 - Segment profit/(loss) before taxation 161 137 49 445 16 089 - IFRS charges - - - Capital expenditure 13 950 3 853 1 587 Segment assets 210 017 81 526 17 388 Segment liabilities 69 752 18 261 8 636 Corporate Group
R`000 R`000 Year ended 29 February 2012 External revenue - 1 243 539 External interest received 3 527 3 773 External interest paid (12 873) (12 945) Depreciation and amortisation (12 844) (35 171) Group profit/(loss) before taxation (47 503) 217 259 - Segment profit/(loss) before taxation (44 693) 220 069 - IFRS charges (2 810) (2 810) Capital expenditure 1 286 32 214 Segment assets 723 014 1 083 472 Segment liabilities 240 095 351 927 Year ended 28 February 2011 External revenue - 1 132 482 External interest received 3 497 4 038 External interest paid (23 024) (23 042) Depreciation and amortisation (12 908) (35 806) Group profit/(loss) before taxation (127 670) 99 001 - Segment profit/(loss) before taxation (48 033) 178 638 - IFRS charges (79 637) (79 637) Capital expenditure 1 550 20 940 Segment assets 700 704 1 009 635 Segment liabilities 527 696 624 345 Preliminary Consolidated Statements of Changes in Equity Share Other Retained capital reserves earnings R`000 R`000 R`000 Balance at 1 March 2010 19 110 141 216 558 Acquisition of non-controlling interest without a change in control - - (11 321) Reclassification of other reserves to retained earnings - (110 141) 110 141 Total comprehensive income for the year - - 68 866 Balance at 28 February 2011 19 - 384 244 Balance at 1 March 2011 19 - 384 244 Acquisition of non-controlling interest without a change in control - - (2 055) Capitalisation of shareholder loans 229 293 - - Share-based payment reserve: initial award - (15 500) - Share-based payment expense - 2 130 - Dividends paid - - (20 281) Total comprehensive income for the year - - 153 695 Balance at 29 February 2012 229 312 (13 370) 515 603 Non-controlling
Total interest Total R`000 R`000 R`000 Balance at 1 March 2010 326 718 2 380 329 098 Acquisition of non-controlling interest without a change in control (11 321) (1 780) (13 101) Reclassification of other reserves to retained earnings - - - Total comprehensive income for the year 68 866 427 69 293 Balance at 28 February 2011 384 263 1 027 385 290 Balance at 1 March 2011 384 263 1 027 385 290 Acquisition of non-controlling interest without a change in control (2 055) (1 027) (3 082) Capitalisation of shareholder loans 229 293 - 229 293 Share-based payment reserve: initial award (15 500) - (15 500) Share-based payment expense 2 130 - 2 130 Dividends paid (20 281) - (20 281) Total comprehensive income for the year 153 695 - 153 695 Balance at 29 February 2012 731 545 - 731 545 NOTES TO THE PRELIMINARY FINANCIAL STATEMENTS 1. KPMG Inc., the group`s independent auditor, has audited the preliminary financial statements for the year to 29 February 2012 contained in these preliminary financial statements and has expressed an unmodified opinion on the preliminary financial statements. Their audit report is available for inspection at the company`s registered office. These preliminary financial statements are prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards (IFRS) and the disclosure requirements of IAS 34. The audited preliminary consolidated results for the year ended 29 February 2012 have been prepared in accordance with the recognition, measurement, presentation and disclosure requirements of IAS 1: Presentation of Financial Statements, using the group`s accounting policies that are in line with IFRS, the Companies Act No. 71 of 2008, as amended, and the AC 500 series as issued by the APB and have been consistently applied to prior periods. These audited preliminary consolidated results have been prepared under the supervision of the group`s Chief Financial Officer, JP Loubser (CA(SA)). 2. These financial statements incorporate the financial statements of the company, all its subsidiaries and all entities over which it has operational and financial control. 29 February 28 February 28 February 2012 2011 2011 Audited Pro forma Audited
R`000 R`000 R`000 3. Trading expenses Depreciation on plant and equipment 22 617 23 251 23 251 Amortisation of intangibles 12 554 12 555 12 555 Occupancy cost 103 706 91 030 91 030 Straight-lining of leases 2 812 1 945 1 945 Staff costs 145 796 133 195 133 195 Foreign exchange (gains)/losses (1 422) 6 742 6 742 Other operating costs 97 332 96 529 89 906 383 395 365 247 358 624 4. Finance cost Interest paid on loans 19 005 23 036 23 042 Interest rate swap (5 949) - - Fair value adjustment on loans (111) - 45 998 Imputed interest on loans - - 31 604 12 945 23 036 100 644
5. Cash generated from operations Operating profit 226 431 195 607 Adjustments for: Depreciation 22 617 23 251 Amortisation of intangibles 12 554 12 555 Profit on sale of plant and equipment (148) (193) Fair value loss on derivative instruments 480 166 Straight-lining lease 2 812 1 945 Forfeitable share plan expense 2 130 - Changes in working capital: Increase in trade and other receivables (3 831) (2 342) Increase in inventories (63 961) (32 592) Increase in trade and other payables 20 430 12 316 219 514 210 713 6. Earnings per share and net asset value per share Earnings per ordinary share (cents) - Basic 356.1 279.0 189.6 - Headline 355.8 278.5 189.1 - Core headline 387.4 310.8 316.2 Ordinary shares in issue (`000) 43 150 43 150 36 306 Weighted average ordinary shares in issue (`000) 43 150 43 150 36 306 Net asset value per ordinary share (cents) 1 695.3 1 381.2 1 061.2 Net tangible asset value per ordinary share (cents) 372.6 37.5 (535.8) Reconciliation to core headline earnings The group uses core headline earnings as a consistent measure of performance for management purposes, and provided this in its prelisting statement. Core headline earnings exclude exceptional once-off costs and the amortisation of trademarks, fair value adjustments to loans and the lease straight-lining expense, and are presented below: 29 February 28 February 28 February 2012 2011 2011 Audited Pro forma Audited
R`000 R`000 R`000 Basic earnings 153 695 120 402 68 866 Adjusted for: Profit on disposal of plant and equipment (148) (193) (193) Headline earnings 153 547 120 209 68 673 Adjusted for: Fair value adjustments on loans, net of taxation (80) - 55 878 Amortisation of intangibles net of taxation 9 039 9 040 9 040 Straight-lining of leases net of taxation 2 023 1 400 1 400 Non-recurring professional fees net of taxation 2 661 3 468 1 464 Core headline earnings* 167 190 134 117 136 455 * In order to compare the core headline earnings per share over time for this report, earnings are divided by the number of shares in issue at the last reporting date, being 43 150 220 shares at 29 February 2012. Executive directors KG Hodgson, EA Haarburger, JP Loubser Non-executive directors SA Muller (Chairman), BD Hopkins, CF Sonn, M Vilakazi Company secretary AE van Zyl Registered office The Mill House, 1 Canterbury Street, Cape Town 8001 Transfer secretaries Computershare Investor Services (Proprietary) Limited Ground Floor, 70 Marshall Street, Johannesburg 2001 18 May 2012 Sponsor UBS South Africa (Proprietary) Limited TO VIEW THE RESULTS ONLINE VISIT www.holdsport.co.za Date: 18/05/2012 08:00:02 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.

Share This Story