Wrap Text
Reviewed Condensed Consolidated Financial statements for the year ended 30 JUNE 2012
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.
REVIEWED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Consolidated (R'000)
% 2012 2011
change (Reviewed) (Audited)
Continuing operations
Revenue 4.4% 541 310 518 506
Turnover 4.4% 530 593 508 078
Cost of sales (246 182) (221 987)
Gross profit (0.6%) 284 411 286 091
Employment costs (97 915) (91 982)
Occupancy costs (76 447) (70 729)
Depreciation and amortisation (21 338) (15 595)
Other operating costs (66 296) (66 306)
Rental income 1 526 605
Royalties 1 038 1 009
Operating profit (42.0%) 24 979 43 093
Dividends received 13 12
Interest income 8 140 8 802
Interest expense (331) (367)
Profit before tax (36.4%) 32 801 51 540
Income tax expense (10 713) (16 117)
Profit for the year from continuing operations (37.6%) 22 088 35 423
Profit from discontinued operations (net of income tax) - 3 135
Profit for the year (42.7%) 22 088 38 558
Other comprehensive income
Net change in fair value of available-for-sale financial assets (52) -
Total comprehensive income for the year 22 036 38 558
Profit attributable to:
Ordinary and 'N' ordinary shareholders of the parent 11 246 20 562
Preference shareholders 168 148
Profit attributable to to equity holders of the parent 11 414 20 710
Non-controlling interest 10 674 17 848
Profit for the year 22 088 38 558
Total comprehensive income attributable to:
Ordinary and 'N' ordinary shareholders of the parent 11 217 20 562
Preference shareholders 168 148
Profit attributable to to equity holders of the parent 11 385 20 710
Non-controlling interest 10 651 17 848
Total comprehensive income for the year 22 036 38 558
Reconciliation of headline earnings
Profit attributable to equity holders 11 246 20 562
Continuing operations 11 246 18 828
Discontinued operation - 1 734
Adjusted for:
Loss on disposal of property, plant and equipment 10 372
Impairment loss 848 -
Profit from sale of discontinued operation - (68)
Headline earnings 12 104 20 866
Continuing operations 12 104 19 200
Discontinued operation - 1 666
Basic earnings per ordinary share (cents) (45.3%) 98.8 180.6
Continuing operations 98.8 165.3
Discontinued operation - 15.3
Headline earnings per ordinary share (cents) (42.0%) 106.3 183.2
Continuing operations 106.3 168.6
Discontinued operation - 14.6
Dividend cover (based on headline earnings) 3.0 5.7
Weighted average number of equity shares on
which earnings per share is based (000's) 11 387 11 387
The Company has no dilutionary instruments in issue
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Consolidated (R'000)
2012 2011
(Reviewed) (Audited)
ASSETS
Non current assets 90 263 81 331
Property, plant and equipment 74 910 69 328
Investment property 5 662 5 776
Intangible assets 4 510 1 455
Other investments 524 576
Deferred taxation 4 657 4 196
Current assets 238 727 243 580
Inventories 61 881 71 099
Trade and other receivables 11 700 21 562
Forward exchange contracts 1 072 -
Income tax receivable 2 795 2 050
Cash and cash equivalents 161 279 148 869
Total assets 328 990 324 911
EQUITY AND LIABILITIES
Capital and reserves 280 751 266 942
Share capital 1 200 1 200
Share premium 6 076 6 076
Other reserves 535 538
Retained earnings 146 524 139 194
Non-controlling interest 126 416 119 934
Non current liabilities 15 681 14 320
Post-retirement liability 3 101 3 996
Accrued operating lease liability 11 150 9 577
Deferred taxation 1 430 747
Current liabilities 32 558 43 649
Provisions - 467
Trade and other payables 32 534 42 461
Forward exchange contracts - 602
Income tax payable 24 119
Total equity and liabilities 328 990 324 911
ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS Consolidated (R'000)
2012 2011
(Reviewed) (Audited)
Operating profit before working capital changes 43 793 65 291
Working capital changes 4 875 (11 619)
Interest income 8 140 8 802
Interest expense (331) (367)
Dividends paid (8 583) (7 001)
Dividends received 13 12
Normal tax paid (10 258) (17 004)
Secondary tax on companies paid (1 073) (826)
Net cash inflows from operating activities 36 576 37 288
Additions to property, plant and equipment (30 115) (31 191)
Proceeds from disposal of property, plant and equipment 228 672
Proceeds from disposal of discontinued operation 5 412 -
Net cash outflows from investing activities (24 475) (30 519)
Proceeds on delivery of shares by share trust 309 454
Subsidiary shares repurchased - (11)
Net cash inflows from financing activities 309 443
Net increase in cash and cash equivalents 12 410 7 212
Cash and cash equivalents at the beginning of the year 148 869 141 657
Cash and cash equivalents at the end of the year 161 279 148 869
OTHER INFORMATION
Capital commitments
Authorised - not contracted for 56 685 53 436
Authorised - contracted for 7 955 -
Gross profit margin from continuing operations 53.6% 56.3%
Operating profit margin from continuing operations 4.7% 8.5%
Retail segment operating profit margin 5.4% 9.2%
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Consolidated (R'000)
2012 2011
(Reviewed) (Audited)
Share capital 1 200 1 200
Share premium 6 076 6 076
Other reserves
Opening balance 538 500
Share-based payment expense 26 38
Fair value adjustment of available-for-sale financial assets (29) -
Closing balance 535 538
Retained earnings
Opening balance 139 194 122 299
Profit for the year 11 414 20 710
Preference dividends paid (168) (148)
Ordinary dividends paid (3 644) (3 189)
Subsidiary shares repurchased - (6)
Net effect of take up of share options 171 251
Change in degree of control (443) (723)
Closing balance 146 524 139 194
Non-controlling interest
Opening balance 119 934 104 799
Profit for the year 10 674 17 848
Preference dividends paid (17) (17)
Ordinary dividends paid (4 754) (3 647)
Subsidiary shares repurchased - (5)
Net effect of take up of share options 138 203
Change in degree of control 443 723
Other (2) 30
Closing balance 126 416 119 934
Total capital and reserves 280 751 266 942
SEGMENTAL REPORTING Consolidated (R'000)
2012 2011
(Reviewed) (Audited)
Revenue
Total external retail revenue 531 631 509 087
Retail segment revenue 533 815 511 307
Intersegment revenue earned from continuing operations (2 184) (1 548)
Intersegment revenue earned from discontinued operation - (672)
Total external property revenue 1 526 605
Property segment revenue 5 388 4 758
Intersegment revenue earned from continuing operations (3 862) (3 635)
Intersegment revenue earned from discontinued operation - (518)
Dividends received 13 12
Interest income 8 140 8 802
Segment revenue from continuing operations 541 310 518 506
Total external manufacturing revenue - 34 990
Manufacturing segment revenue - 35 067
less: intersegment revenue - (77)
Segment revenue from discontinued operation - 34 990
Total group revenue 541 310 553 496
Segment operating profit/(loss)
Retail segment profit - continuing operations 28 681 46 906
Property segment profit - continuing operations 1 287 1 331
Group services operating loss - continuing operations* (4 989) (5 144)
Group profit from continuing operations 24 979 43 093
Manufacturing operating profit - discontinued operation - 4 354
Total group operating profit 24 979 47 447
Depreciation and amortisation
Retail 21 113 15 416
Property 225 179
Segment depreciation and amortisation from continuing operations 21 338 15 595
Manufacturing - discontinued operation - 259
Total depreciation and amortisation 21 338 15 854
Segment assets
Retail 214 762 201 102
Property 15 286 11 751
Group services* 98 942 100 686
Segment assets from continuing operations 328 990 313 539
Manufacturing - discontinued operation - 11 372
Total segment assets 328 990 324 911
Segment liabilities
Retail 42 389 48 986
Property 2 099 1 931
Group services* 3 751 3 940
Segment liabilties from continuing operations 48 239 54 857
Manufacturing - discontinued operation - 3 112
Total segment liabilities 48 239 57 969
Capital expenditure
Retail 26 991 30 559
Property 3 124 602
Capital expenditure from continuing operations 30 115 31 161
Manufacturing - discontinued operation - 30
Total capital expenditure 30 115 31 191
* Group services include corporate costs.
NOTES
1 Review by auditors
The condensed group financial statements of African & Overseas Enterprises Limited for the year ended
30 June 2012 have been reviewed by the company's auditor, KPMG Inc. In their review report dated 06 September 2012,
which is available for inspection at the Company's Registered Office, KPMG Inc state that their review was
conducted in accordance with the International Standard on Review Engagements 2410, Review of Interim
Information Performed by the Independent Auditor of the Entity, which applies to a review of group preliminary
financial information, and have expressed an unmodified conclusion on the condensed group preliminary
financial statements.
2 Basis of preparation
The condensed group preliminary financial statements are prepared in accordance with the recognition and
measurement principles of International Financial Reporting Standards and presented in accordance with the minimum
content, including disclosures, prescribed by IAS 34 Interim Financial Reporting applied to year end reporting,
the Companies Act, JSE listing requirements and South African Statements and Interpretations of
Statements of Generally Accepted Accounting Practice (AC 500 Series).
These reviewed results have been prepared under the supervision of the group financial director, Damian Johnson CA(SA).
3 Accounting policies
The accounting policies applied are consistent with those applied in the preparation of the group's annual financial
statements for the year ended 30 June 2011.
The integrated annual report containing a detailed review of the operations of the company together
with the audited financial statements will be posted to shareholders towards the end of
September 2012.
AFRICAN & OVERSEAS ENTERPRISES LIMITED
RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 30 JUNE 2012
COMMENTARY
The principle operating subsidiary Rex Trueform Clothing Company Limited reports as follows:
"As anticipated in the interim report, the group continued to find trading conditions difficult in the second six months. This resulted in
slower turnover growth for the second half as compared with the performance during the first half of the financial year. Accordingly,
and in line with expectations, group revenue from continuing operations for the year was restricted to an increase of 4.4% over the
previous year.
The withdrawal of the Duty Credit Certificate Scheme benefits, which were utilised by the group in the previous financial year, had a
materially negative impact on gross profit during the financial year under review. This impact contributed to the gross profit for the
period being down on last year. Operating costs increased by 7%, and include a R2.1 million impairment of assets recognised in
the second six months.
The factors above resulted in a decrease in operating profit from continuing operations of 40.1%. Group profit after tax amounted to
R23.8 million compared to R39.9 million last year, a decrease of 40.4%. In line with performance, headline earnings per share
decreased by 37.6% to 123.7 cents, and earnings per share decreased by 40.6% to 116.1 cents.
Retail
The Queenspark retail segment achieved R530.6 million in turnover, an improvement of 4.4% on last year. Retail segment
operating profit decreased by 38.9% over the comparative period, as a consequence of the low turnover growth, the withdrawal of
the Duty Credit Certificate Scheme benefits and an impairment loss of R2.1 million. Excluding the Duty Credit Certificate Scheme
benefits and the impairment loss, the decrease in operating profit would have been restricted to 5.5%.
Property
The property segment will continue to implement its property development strategy. In line with this strategy, the development of
the Rex Trueform Office Park in Cape Town has begun. The development costs are being financed through the utilisation of the
Groups cash reserves.
Prospects
In spite of the recent interest rate cuts, the outlook for retail sales is weighed down by high consumer debts levels, tight lending
standards and rising living costs such as municipal rates and electricity. International brands continue to enter the local clothing
retail market, intensifying industry competition. Against this back-drop, the company's retail segment will remain under pressure in
the 2013 financial year. Certain strategic initiatives are being undertaken, however, which should have a positive impact in the
medium term."
Dividend
The board is recommending to shareholders that the dividend on the ordinary and 'N' ordinary shares be increased to 35 cents per
share, which will result in a dividend cover of 3 times.
In terms of the Articles of Association, the 6% cumulative participating preference shares carry the right to receive an additional
0.5% dividend for every completed 1.25% dividend in excess of 2.5% declared on ordinary shares in any one financial year.
Preference shareholders will be entitled to an extra dividend of 27.0% (54 cents per share) which will be included in the half-yearly
payment in December 2012.
Shareholders will be asked to consider and approve the directors' dividend recommendation at the annual general meeting of the
company to be held on 14 November 2012.
An announcement detailing the terms of the dividend declaration will be made immediately following the annual general meeting.
Any reference to future financial performance included in this statement has not been reviewed and reported on by the company's
external auditors and does not constitute an earnings forecast.
Signed on behalf of the board
ML Krawitz PE SHUB
(Chairman) (Chief Executive Officer)
Cape Town
7 September 2012
Directors: ML Krawitz+ (Chairman), PE Shub (Chief Executive Officer) (alt ML Krawitz), CEA Radowsky, DS Johnson, PM Naylor*, RV Orlin* and RW Rees(UK)*
+ Non-executive *Independent 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: SM Lawrence
Transfer secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg, 2001
Sponsor: Java Capital
Websites: www.queenspark.com - www.rextrueform.com
Date: 07/09/2012 07:05:00 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.
Sharenet Sites 
