Wrap Text
Reviewed Results for the year ended 30 June 2012
SUPER GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1943/016107/06
ISIN: ZAE000161832 Share code: SPG
("Super Group" or "the Group" or "the company")
Reviewed Results for the year ended 30 June 2012
Highlights
Revenue for the year increased by 30% to R10,2 billion
Operating profit of R930 million up by 52% on the prior year
Profit before taxation increased by 80% to R847 million
Cash generated from operations up by 90% to R1,8 billion
Headline earnings increased by 58% to R536 million
Consolidated net cash position of R429 million
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENNSIVE INCOME
Year ended Year ended
30 June 30 June
2012 2011
Reviewed Audited
R'000 R'000
Revenue 10 204 811 7 834 829
Trading profit before depreciation and amortisation 1 419 267 1 171 960
Depreciation and amortisation (459 381) (538 399)
Trading profit 959 886 633 561
Capital items (30 293) (21 095)
Operating profit 929 593 612 466
Net finance charges (82 118) (142 508)
Profit before taxation 847 475 469 958
Income tax expense (252 548) (101 525)
Profit for the year from continuing operations 594 927 368 433
Total profit for the year from discontinued operations 274
Profit for the year from discontinued operations 3 368
Fair value loss on discontinuation (3 094)
Profit for the year 594 927 368 707
Other comprehensive income
Effect of foreign exchange 158 851 54 111
Revaluation of land and buildings 36 128 12 238
Hedge accounting 332 2 428
Other comprehensive income for the year
(net of taxation) 195 311 68 777
Total comprehensive income for the year 790 238 437 484
Profit for the year attributable to:
Non-controlling interests continuing operations 79 314 48 055
Equity holders of Super Group continuing operations 515 613 320 378
Equity holders of Super Group discontinued operations 274
Profit for the year 594 927 368 707
RECONCILIATION OF HEADLINE EARNINGS
Profit attributable to equity holders of Super Group 515 613 320 652
Capital items after tax (continuing operations) 20 744 18 966
Fair value profit on discontinuation 3 094
Headline profit for the year 536 357 342 712
Profit from discontinued operations (3 368)
Headline earnings for the year continuing 536 357 339 344
Basic earnings per share (cents) 172,4 101,3
Basic earnings per share (continuing operations) (cents) 172,4 101,2
Diluted earnings per share (cents) 167,4 100,8
Diluted earnings per share (continuing operations) (cents) 167,4 100,8
Headline earnings per share (cents) 179,4 108,3
Headline earnings per share (continuing operations) (cents) 179,4 107,2
Diluted headline earnings per share (cents) 174,1 107,8
Diluted headline earnings per share
(continuing operations) (cents) 174,1 106,7
Weighted number of shares ('000) 299 013 316 510
Diluted weighted number of shares ('000) 308 009 317 983
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 30 June
2012 2011
Reviewed Audited
R'000 R'000
ASSETS
Property, plant and equipment 1 634 269 1 435 649
Investment property 70 816
Full maintenance lease assets 491 069 862 186
Intangible assets 27 077 64 208
Goodwill 1 575 837 1 412 628
Investments and other non-current assets 5 534 1 650
Deferred tax assets 311 060 225 536
Current assets 3 877 730 3 483 709
Inventories 650 312 490 737
Trade and other receivables 1 375 649 1 302 346
Finance lease receivables 1 928 246 140
Insurance-related assets 73 411 233 690
Cash and cash equivalents 1 776 430 1 210 796
Total assets 7 993 392 7 485 566
EQUITY AND LIABILITIES
Capital and reserves
Capital and reserves attributable to equity holders
of Super Group 3 020 123 2 572 777
Non-controlling interests 380 522 258 508
Total equity 3 400 645 2 831 285
Liabilities
Fund reserves 341 681 357 369
Deferred tax liabilities 145 982 149 050
Full maintenance lease liabilities (including Australia) 164 183 778 137
Non-current 61 514 109 219
Current 102 669 668 918
Interest-bearing borrowings 1 183 630 1 035 213
Non-current 1 027 956 879 296
Current 155 674 155 917
Insurance-related liabilities 139 559 296 911
Other current liabilities 2 617 712 2 037 601
Total equity and liabilities 7 993 392 7 485 566
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended Year ended
30 June 30 June
2012 2011
Reviewed Audited
R'000 R'000
Cash flows from operating activities
Operating cash flow 1 573 024 1 243 186
Working capital changes 271 318 (272 063)
Cash generated from operations 1 844 342 971 123
Finance costs paid (189 397) (208 877)
Investment income and interest received 107 184 77 208
Income tax paid (232 496) (115 282)
Dividend paid to non-controlling interest (399) (37 727)
Net cash generated from operating activities 1 529 234 686 445
Net cash outflow from investing activities (272 886) (13 951)
Net cash outflow from financing activities (781 666) (685 949)
Net increase/(decrease) in cash and cash equivalents 474 682 (13 455)
Net cash and cash equivalents at beginning of the year 1 210 456 1 197 258
Effect of foreign exchange on cash and cash equivalents 91 292 26 653
Cash and cash equivalents at end of the year 1 776 430 1 210 456
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended Year ended
30 June 30 June
2012 2011
Reviewed Audited
R'000 R'000
Capital and reserves attributable to equity holders
of Super Group
Balance at beginning of the year 2 572 777 2 362 644
Share repurchases/buybacks net of expenses (227 962) (79 597)
Total comprehensive income for the year attributable
to equity holders of Super Group 666 515 372 573
Profit for the year 515 613 320 652
Effect of foreign exchange 114 442 37 255
Revaluation of land and buildings 36 128 12 238
Hedge accounting 332 2 428
Share-based payment reserve movement 16 330 8 475
Changes in equity as a result of acquisitions, disposals
and transactions with equity partners (91 318)
Effect of change in capital gains taxation rate (7 537)
Balance at end of the year 3 020 123 2 572 777
Non-controlling interests
Balance at beginning of the year 258 508 188 211
Ordinary dividends paid to non-controlling interests (399) (37 727)
Total comprehensive income for the year attributable to
non-controlling interests 123 723 64 911
Profit for the year 79 314 48 055
Effect of foreign exchange 44 409 16 856
Changes in non-controlling interests as a result of
acquisitions and disposals (2 023) 43 113
Movement in other reserves 713
Balance at end of the year 380 522 258 508
Total equity at end of the year 3 400 645 2 831 285
Comprising:
Share capital 315 334 327 310
Share premium 1 746 798 1 893 091
Capital redemption reserve fund 5 486 5 486
Retained earnings 1 057 030 524 176
Share buyback reserve (691 899) (622 206)
General reserve 556 036 556 036
Revaluation reserve 185 346 157 666
Foreign currency translation reserve (153 745) (268 187)
Contingency reserve insurance 1 064 1 064
Hedging reserve (1 327) (1 659)
Non-controlling interests 380 522 258 508
Total equity at end of the year 3 400 645 2 831 285
SALIENT FEATURES
Year ended Year ended
30 June 30 June
2012 2011
Reviewed Audited
R'000 R'000
1. Interest-bearing borrowings
Australian ring-fenced borrowings 494 906 506 594
Property borrowings 339 143 308 312
Asset-based finance 349 581 219 967
Bank overdraft 340
Interest-bearing borrowings and bank overdraft 1 183 630 1 035 213
2. Cash and cash equivalents and bank overdrafts
Cash and cash equivalents 1 776 430 1 210 796
Bank overdraft (340)
Total cash and cash equivalents as per condensed
consolidated statement of cash flows 1 776 430 1 210 456
3. Share statistics
Total issued less treasury shares ('000) 289 195 309 070
Weighted number of shares ('000) 299 013 316 510
Diluted weighted number of shares ('000) 308 009 317 983
Net asset value per share (cents) 1 044,3 832,4
Net asset value excluding goodwill per share (cents) 499,4 375,4
4. Capital commitments
Authorised but not yet contracted for capital
commitments, excluding full maintenance lease assets 174 640 242 178
Capital commitments will be funded from normal operating cash
flows and the utilisation of existing borrowing facilities.
OPERATING SEGMENTS
Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended
30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June
2012 2011 2012 2011 2012 2011 2012 2011
Reviewed Audited Reviewed Audited Reviewed Audited Reviewed Audited
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
REVENUE OPERATING PROFIT PROFIT BEFORE TAX NET OPERATING ASSETS
Supply Chain 3 800 056 2 789 469 223 874 181 497 188 888 155 323 1 533 142 1 187 121
South Africa 3 379 285 2 429 246 181 961 164 801 160 980 148 250 1 156 360 891 000
African Logistics 420 771 360 223 41 913 16 696 27 908 7 073 376 782 296 121
Fleet Solutions 2 201 380 1 880 896 575 810 358 222 532 347 288 375 849 056 1 602 518
FleetAfrica 1 081 671 1 051 717 244 213 149 528 220 450 108 548 234 888 953 038
Sg fleet 1 119 709 829 179 331 597 208 694 311 897 179 827 614 168 649 480
Dealerships 3 790 640 3 161 333 86 288 63 710 63 133 40 879 368 383 317 854
Services 412 735 3 131 43 621 9 037 63 107 (14 619) 509 277 549 154
Continuing operations 10 204 811 7 834 829 929 593 612 466 847 475 469 958 3 259 858 3 656 647
Discontinued operations 61 461 (24 446) (11 722)
Group 10 204 811 7 896 290 929 593 588 020 847 475 458 236 3 259 858 3 656 647
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 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, which will affect these results.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The Condensed Consolidated Financial Statements for the year ended 30 June 2012 have been prepared in
accordance with the framework concepts and measurement and recognition requirements of International Financia
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 used in the preparation of the Reviewed Condensed Consolidated Financia
Statements for the year ended 30 June 2012 are in terms of IFRS and are consistent with those applied in the Audited
Financial Statements for the year ended 30 June 2011 except for the standards and amendments to standards
that became effective on 1 July 2011: IFRS 7 (Financial Instruments Disclosures: Transfers of Financial Assets
amendments to IFRS 7); and those effective 1 January 2011: IAS 24 (Related Party Disclosures revised 2009),
Improvements to IAS 1 (Presentation of Financial Statements Presentation of Statement of Changes in Equity) and
the Improvements to IAS 34 (Interim Financial Statements). The adoption of these standards has no effect on the
results, nor has it required any restatement of the results.
The Condensed Consolidated Financial Statements are presented in Rand, which is Super Group's presentation
currency. These results have been compiled under the supervision of the Chief Financial Officer, C Brown, CA(SA),
BCompt (Hons), MBL.
INDEPENDENT REVIEW BY THE AUDITORS
The Condensed Consolidated Statement of Financial Position at 30 June 2012 and the Condensed Consolidated
Statement of Comprehensive Income, Condensed Consolidated Statement of Changes in Equity, operating segments
and Condensed Consolidated Cash Flows for the year ended 30 June 2012 have been reviewed by the Group
auditors, KPMG Inc. Their unmodified report is available for inspection at the registered office of the company.
COMMENTARY
Overview of results
The Board of Super Group is pleased to present the Group's results for the year ended 30 June 2012. Despite the
difficult prevailing economic and trading environment, the Group has achieved excellent growth in both earnings and
cash flow from operational activities.
The Supply Chain South Africa business reported strong sales volume growth on the back of new contracts but
as a result of the highly competitive environment, operating profit growth lagged that recorded in gross revenue.
African Logistics showed a satisfactory increase in operating profitability due to improved fleet utilisation and
operating efficiencies. Fleet Solutions performed well, mainly as a result of a number of new contracts in Australia,
lower maintenance costs and the stringent control of overheads. Dealerships continued to experience healthy volume
growth in new vehicle sales that exceeded industry statistics and performed well for the year to 30 June 2012.
The vigorous management of working capital resulted in a net cash generated from operations, after a reduction in
working capital of R271,3 million, of R1 844,3 million for the year. During the year under review, the company also
repurchased 19,9 million shares, totaling 6,4% of the issued share capital. The total consideration relating to the share
repurchases amounted to R228,0 million.
Financial performance
The Group's revenue increased by 30,2% to R10 204,8 million, with all businesses other than FleetAfrica reporting
significant increases in sales. The growth in revenue was largely as a result of new business generated in the Supply
Chain South Africa and Sg fleet businesses, as well as a 20,0% increase in new vehicle sales within the Dealership
operations.
Operating profits increased by 51,8% to R929,6 million for the year under review. The improvement in the Group's
operating margin to 9,1% (June 2011: 7,8%) is primarily attributable to the return to profitability of the African Logistics
operations and an excellent performance in the Fleet Solutions Division.
Profit before taxation increased significantly by 80,3% to R847,5 million, reflecting the benefits of improved
operational profitability and lower net finance costs. The reduction in net finance costs reflects the impact of a further
R1 031,2 million reduction in net borrowings over the year concerned. As a result, the Group reported a net cash
position of R428,6 million as at 30 June 2012.
The effective taxation rate for the year to 30 June 2012 was 29,8% (2011: 21,6%). The increase in the tax rate was
partly due to a retrospective change to the Australian tax legislation resulting in a once-off additional tax expense o
R26,3 million in Sg fleet.
The Group's Statement of Financial Position remains robust, reflecting a net asset value per share of 1 044 cents, up
25,5% from the 832 cents at 30 June 2012.
Divisional review
Supply Chain South Africa performed in line with expectations despite the very competitive trading environment.
The increase in revenue, operating profit and profit before taxation for the year was driven by good sales volume
growth in the Freight and Super Rent operations. The Sherwood International business began the year poorly but
improved considerably in the last quarter having secured the procurement of a major African electrification project
The Micor business reported improved results and margins on the back of new contracts. Trans Africa Logistics
underperformed due to a dramatic drop in mining volumes through the Mohatas Dry Port Terminal in Maputo.
SG Convenience continued to trade at record highs as a result of the successful launch of a number of new product
ranges and the implementation of a forecourt distribution solution for a major local fuel distributor.
African Logistics reported an increase in revenue of 16,8% and an increase in operating profit of 151,0%, as a result
of improved North-Bound freight volumes and fleet operational efficiencies. The newer fleet offering was significant in
generating improved transport efficiencies and fleet utilisation.
FleetAfrica's revenue and operating profit results were impacted by the expiry of the Eastern Cape Provincia
Government (ECPG) contract at the end of January 2012 and the City of Johannesburg (CoJ) contract in February
2012. The increase in operating profit of 63,3% is significantly influenced by "end-of-life" contract performance
on the ECPG and CoJ contracts. FleetAfrica has undergone restructuring during the year in order to right-size these
operations and stringent cost containment remains a focus area. FleetAfrica continues to expand across a number o
smaller private sector fleet management contracts.
Sg fleet delivered good financial results in a competitive trading environment. The demand for used vehicles remains
strong in Australia, keeping residual values at the current high levels. The company has a strong new business pipeline
and the relationship with Champ Ventures continues to provide enhanced value.
Dealerships delivered a good performance and managed to increase its operating margin to 2,3%. New vehicle sales
were up 20,0% which outperformed the country increase reported by NAAMSA by 6,3%. The used vehicle market
remains under pressure although this is expected to improve on the back of lowerinterest rates and easing of bank
credit approvals. Capital projects on the new Volkswagen and Audi Rustenburg sites are largely completed.
Services segment, which includes the corporate functions, Emerald Insurance and the Mauritius operations, budgeted
to break-even, but the operating profit reported included a strong performance by the Mauritius unit and the once-of
close-out profits on the expiration of the ECPG and CoJ contracts.
Prospects
Global economic prospects remain uncertain, which could impact the growth of the South African economy. The
trading environment in the regions in which the Group operates remains highly competitive but the Group is confident
that with the foundation laid, it will perform satisfactorily in the forthcoming year.
Supply Chain South Africa will continue to focus on niche opportunities with both the Freight and Super Rent
businesses exploring a number of initiatives for temperature-controlled solutions in the food service and retail sectors
African Logistics is pursuing opportunities in relation to bulk fuel and staple food distribution. FleetAfrica has been
awarded a maintenance contract by a large State-owned company and awaits the outcome of a number of tender
submissions. The Group is cognisant of the challenge to replace the loss of earnings resulting from the expiration of the
ECPG and CoJ contracts and is confident that this is achievable. Sg fleet is expected to perform well as a result of its
improved capital availability and strong new business pipeline. The Dealership Division's outlook reflects the market's
expectation of single digit growth in new vehicle sales into 2013.
The Group continues to maintain a culture of service excellence in all areas of its business, to pursue new business
opportunities that will generate acceptable margins and to evaluate value-accretive strategic opportunities.
In line with Super Group's current policy to repurchase shares, no dividend has been declared for the year ended
30 June 2012. The Board re-assesses this strategy on a regular basis.
The reviewed results for the year ended 30 June 2012 will be available on the Group's website on
Monday, 20 August 2012 and the presentation to the investor community can be viewed on the Group's website
from Thursday, 23 August 2012. The Group's website is www.supergroup.co.za
On behalf of the Board
P Vallet P Mountford
Non-Executive Chairman Chief Executive Officer
20 August 2012
Sandton
SUPER GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1943/016107/06
ISIN: ZAE000161832 Share code: SPG
("Super Group" or "the Group" or "the company")
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) Ltd (Registration number 2004/003647/07)
70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)
Sponsor: Deutsche Securities (SA) (Pty) Ltd
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