Wrap Text
PROVISIONAL REVIEWED RESULTS for the year ended 30 June 2012
Hardware Warehouse Limited
Incorporated in the Republic of South Africa
(Company registration no: 2007/004302/06)
Share code: HWW ISIN: ZAE000104253
(“Hardware Warehouse” or “the Group”)
PROVISIONAL REVIEWED RESULTS for the year ended 30 June 2012
Revenue from continuing operations up 18.80% (2011: up 14.09%)
Gross profit margin from continuing operations up 0.70% (2011: up
1.01%)
Net profit before tax from continuing operations up 82.00% (2011:
up 148.32%)
Basic earnings per share from continuing operations in cents is up
77.94% to 8.63 in 2012 (2011: 4.85)
Group interest bearing debt down from R40.5 million at 30 June
2011 to R20.6 million at 30 June 2012
Revenue growth since listing in September 2007 – Increased from
R126 million to R421 million (234.13%)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE
YEAR ENDED 30 JUNE 2012
GROUP
Reviewed Audited
12 12
months months
ended ended
30 June 30 June
2012 2011
R’000 R’000
Continuing operations
Revenue 420 774 354 177
Cost of sales (332 481) (282 363)
Gross profit 88 293 71 814
Share of profit of associate 102 -
Other income 419 906
Administration expenses (2 633) (1 879)
Personnel costs (38 545) (30 055)
Other expenses (35 968) (30 628)
Profit from operations 11 668 10 158
Investment income 986 167
Finance costs (4 040) (5 592)
Profit before taxation 8 614 4 733
Taxation (2 617) (1 365)
Profit for the year from continuing operations 5 997 3 368
Discontinued operations
Loss for the year from discontinued operations (1 794) (2 775)
Profit for the year 4 203 593
Other comprehensive income - -
Total comprehensive income for the year 4 203 593
Profit attributable to:
Owners of parent
Profit for the year from continuing operations 5 990 3 369
Loss for the year from discontinued operations (1 794) (2 775)
Profit for the year attributable to owners of
the parent 4 196 594
Non-controlling interest
Profit / (Loss) for the year from continuing
operations 7 (1)
Profit / (Loss) for the year attributable to
non-controlling interest 7 (1)
4 203 593
Total comprehensive income attributable to:
Owners of parent
Total comprehensive income for the year from
continuing operations 5 990 3 369
Total comprehensive income for the year from
discontinued operations (1 794) (2 775)
Total comprehensive income for the year
attributable to owners of the parent 4 196 594
Non-controlling interest
Total comprehensive income for the year from
continuing operations 7 (1)
Total comprehensive income for the year
attributable to non-controlling interest 7 (1)
4 203 593
Earnings per share (expressed in cents per
share)
Total basic earnings per share 6.04 0.85
- basic earnings per share from continuing
operations 8.63 4.85
- basic (loss) per share from discontinuing
operations (2.59) (4.00)
Additional information
Headline earnings from continuing operations per
share in cents 8.78 5.11
Total diluted earnings per share 6.03 0.85
- diluted earnings per share from continuing
operations 8.61 4.85
- diluted (loss) per share from discontinuing
operations (2.58) (4.00)
Additional information
Diluted headline earnings from continuing
operations per share in cents 8.75 5.11
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 30 June 2012
GROUP
Reviewed Audited
2012 2011
R’000 R’000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 19 269 34 220
Goodwill 9 807 9 807
Investment in associate 102 -
Related party loans 1 622 3 544
Deferred tax 1 125 5 585
31 925 53 156
CURRENT ASSETS
Inventories 56 973 51 993
Trade and other receivables 12 157 8 567
Taxation receivable 683 668
Cash and cash equivalents 4 216 2 975
74 029 64 203
TOTAL ASSETS 105 954 117 359
EQUITY AND LIABILITIES
EQUITY
Share capital 14 14
Share premium 9 300 9 300
Non-controlling interest 7 -
Share based payment reserve 2 048 427
Retained earnings 22 304 18 108
33 673 27 849
LIABILITIES
NON-CURRENT LIABILITIES
Interest bearing borrowings 2 102 10 857
Related party loans - 214
Deferred tax - 836
2 102 11 907
CURRENT LIABILITIES
Related party loans 24 20
Interest bearing borrowings 2 761 19 884
Taxation payable 8 122
Operating lease accruals 1 126 1 068
Trade and other payables 42 686 40 641
Provisions 3 666 3 160
Bank overdraft 19 908 12 708
70 179 77 603
TOTAL LIABILITIES 72 281 89 510
TOTAL EQUITY AND LIABILITIES 105 954 117 359
NET ASSET VALUE PER SHARE (CENTS) 43.23 35.75
TOTAL NET ASSET VALUE 33 673 27 849
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2012
Treasury
Share share Share Treasury
capital capital premium shares
R’000 R’000 R’000 R’000
Balance at 1 July 2010 –
Audited 16 (2) 17 798 (8 498)
Total comprehensive
profit for the year - - - -
Long term share
incentives - - - -
Non-controlling interest
acquired - - - -
Total changes - - - -
Balance at 30 June 2011 –
Audited 16 (2) 17 798 (8 498)
Total comprehensive
profit for the year - - - -
Long term share
incentives - - - -
Non-controlling interest
acquired - - - -
Total changes - - - -
Balance at 30 June 2012 –
Reviewed 16 (2) 17 798 (8 498)
Share
Total based Equity
share Retained payment attributable
capital earnings reserve to parent
R’000 R’000 R’000 R’000
Balance at 1 July 2010 –
Audited 9 314 17 514 349 27 177
Total comprehensive
profit for the year - 594 - 594
Long term share
incentives - - 78 78
Non-controlling interest
acquired - - - -
Total changes - 594 78 672
Balance at 30 June 2011 -
Audited 9 314 18 108 427 27 849
Total comprehensive
profit for the year - 4 196 - 4 196
Long term share
incentives - - 1 621 1 621
Non-controlling interest
acquired - - - -
Total changes - 4 196 1 621 5 817
Balance at 30 June 2012 –
Reviewed 9 314 22 304 2 048 33 666
Non-controlling Total
interest equity
R’000 R’000
Balance at 1 July 2010 -
Audited - 27 177
Total comprehensive
profit for the year (1) 593
Long term share
incentives - 78
Non-controlling interest
acquired 1 1
Total changes - 672
Balance at 30 June 2011 -
Audited - 27 849
Total comprehensive
profit for the year 7 4 203
Long term share
incentives - 1 621
Non-controlling interest - -
acquired
Total changes 7 5 824
Balance at 30 June 2012 –
Reviewed 7 33 673
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED
30 JUNE 2012
GROUP
Reviewed Audited
12 12
months months
ended ended
30 June 30 June
2012 2011
R’000 R’000
Profit before taxation from continuing
operations 8 614 4 733
Loss before taxation from discontinued
operations - (8 309)
Profit / (Loss) before taxation 8 614 (3 576)
Adjustments for:
Depreciation of property, plant and equipment 3 349 3 829
Share of profit from associate (102) -
Impairment of goodwill - 2 231
Profit on disposal of property, plant and
equipment (702) (184)
Investment income (986) (761)
Finance costs 4 040 5 871
Increase / (Decrease) in operating lease
accruals 58 (229)
Increase in share based payment reserve 1 621 78
Increase in provisions 506 162
Changes in working capital:
(Increase) / Decrease in inventories (4 980) 11 727
(Increase) / Decrease in trade and other
receivables (3 590) 872
Increase / (Decrease) in trade and other
payables 2 045 (2 998)
Cash generated from operations 9 873 17 022
Investment income 986 761
Finance costs (4 040) (5 871)
Taxation paid (916) (3 277)
Net cash generated from operating activities 5 903 8 635
Cash flows absorbed by investing activities
Purchase of property, plant and equipment (3 444) (10 239)
Proceeds on disposal of property, plant and
equipment 15 748 1 799
Goodwill paid on acquisition of businesses - (375)
Disposal of discontinued operations - 925
Net cash generated from / (absorbed by)
investing activities 12 304 (7 890)
Cash flows absorbed by financing activities
(Decrease) / Increase in interest bearing
borrowings (25 878) 2 865
Decrease in loans from related parties (210) (169)
Decrease in loans to related parties 1 922 87
Increase in non-controlling interest - 1
Net cash (absorbed by) / generated from
financing activities (24 166) 2 784
Net (decrease) / increase in cash and cash
equivalents (5 959) 3 529
Cash and cash equivalents at the beginning of
the year (9 733) (13 262)
Cash and cash equivalents at the end of the
year (15 692) (9 733)
Current assets 4 216 2 975
Current liabilities (19 908) (12 708)
(15 692) (9 733)
NOTES TO THE CONDENSED CONSOLIDATED REVIEWED RESULTS
for the year ended 30 June 2012
1. BASIS OF PREPARATION
These condensed consolidated and company financial statements have
been prepared under the supervision of L A Rhind in accordance
with IAS34 Interim Financial Reporting, the Listing Requirements
of the JSE and the Companies Act of South Africa (2008).
The financial statements were approved by the board on 21
September 2012.
The financial statements have been prepared using accounting
policies that comply with IFRS and which are consistent with those
applied in the preparation of the financial statements for the
year ended 30 June 2011 except as follows:
Inventories
The Group changed their accounting policy for inventory costing
from the First-in First-out (FIFO) basis to the weighted average
costing basis. Due to the nature of the inventory items, this
basis provides more reliable and more relevant information. The
impact of the change in costing basis cannot be quantified, but is
believed by management to be insignificant. Retrospective
application is also considered impracticable.
2. REVIEW REPORT
The condensed consolidated financial statements have been reviewed
by BDO South Africa Inc. Their unmodified review report is
available for inspection at the group’s registered office.
3. COMMENTARY
HISTORIC PERSPECTIVE
In line with our listing on the Alt-X in September 2007, and the
Group’s stated intention in the prospectus of our primary
objective, that being our growth strategy, management is pleased
to announce our annual results in line therewith.
Revenue growth since listing in September 2007 – Increase from
R126 million to R421 million (234.13%)
Branch growth since listing in September 2007 - Increase from 11
stores to 17 stores (54.55%)
Provinces growth since listing in September 2007 – Increase from 1
to 3
NATURE OF BUSINESS
The Group's primary business is that of retailing building
materials (“Hardware Warehouse Business”). Previously it also
operated a Plumbing and Sanitary ware business, but has now
reverted substantially to its original “pure play” business of
retailing of building materials.
Hardware Warehouse Business
The Hardware Warehouse Business is a geographically diversified
retailer of quality building and construction material, and
operates in the expanding rural and peri-urban cash consumer
market. With a customer base that includes DIY individuals, rural
buying groups, bakkie builders, small to medium contractors and
government, the Hardware Warehouse Business model continues to
prove its resilience during the muted performance within the
building and construction industry.
Plumbing Business
During late 2008, the Group acquired the franchise rights,
covering a portion of the Eastern Cape, of a Plumbing and Sanitary
ware retailer. On 30 June 2011, the Group’s ownership in the
Plumbing Business was reduced to that of a non-controlling
interest (49% interest was retained), and overall management
control was relinquished, whilst still assisting with the
rationalisation of this business.
FINANCIAL PERFORMANCE
CONSOLIDATED RESULTS
The Net profit before tax for the Group from continuing
operations, increased by R3 881 286 from R4 733 302 to R8 614 588.
This being a 82.00% increase on the previous year. (2011 –
Increase of 148.32%).
Revenue from continued operations grew by 18.80% (2011 – 14.09%).
The overall Interest bearing debt of the Company has been
substantially reduced, from R40.5 million at 30 June 2011 to R20.6
million at 30 June 2012. (See DEBT REDUCTION below).
The debt/equity ratio has accordingly been improved, from 2.24/1
to 0.92/1. No new shares were issued during the year to fund the
debt reduction.
Basic earnings per share from continuing operations in cents is up
77.94% to 8.63 in 2012 (2011: 4.85)
Group net asset value per share in cents at 30 June 2012 is up
20.92% to 43.23 (2011: up 2.46% to 35.75)
HARDWARE WAREHOUSE BUSINESS
The 12 month period under review has improved substantially upon
the base established during the 2011 Financial Year. Management’s
focus on extracting value from our core “pure play” building
materials business continued during 2012.
To further streamline our operations and assist management with
control and information, 2012 saw the embedding of a new IT
system, which was implemented in April 2011. Management are well
pleased with the integration process and the benefits it has
brought as an effective management information tool.
The consolidation and attention to basics strategy adopted during
the financial year ending June 2012 now reflects positively on our
Statement of Comprehensive Income and Statement of Financial
Position for this period. The highlights, which management are
pleased to present, include the following:-
Revenue and Gross Profit Margins – Revenue from continuing
operations grew by 18.80% (2011 – 14.09%). Market share growth is
evidenced by our Store for store increase in revenue of 13.34%
(2011 – 5.2%). This translates into above 10% real growth,
considering a cost inflation of around 3% for the year. Despite
the effects of the decision during the first quarter of 2012 to
grow market share through competitive pricing, the Hardware
Warehouse Business Gross Profit margin grew by 0.54% (2011 –
1.01%) to 20.71% (20.17%).
Expenses – Notwithstanding the growth in Revenue of 18%, the
growth in Operation Expenses of 22.79% (2011 – 17.88%) continues
to receive management focus, through assessing and extracting
value from our expenditure. Increased expenditure remains the
consequence of our growth strategy as management accrue these
expenses, to ensure the support of near term growth objectives, by
building and supplementing the requisite resources and
infrastructure to underpin planned growth prior to the occurrence
thereof.
Strategically expenditure such as additional personnel, staff and
management retention programmes, new store site identification and
retention, in addition to resourcing and expanding the Internal
Audit Department were incurred. This expenditure accounts for
approximately 7.60% (unaudited) of the 22.79%, thus resulting in a
15.19% increase in core expenses for 2012.
The process of store refurbishments with the resultant expenses
also continued for 4 stores during the year.
Profit Before Taxation – The 2012 consolidation strategy is
validated by the increase in the Hardware Businesses Profit before
Interest and Tax of 29.50%. (2012 – R11 022 201 vs. 2011 –
R8 511 066 after the effects of the On Tap Loan write off has been
eliminated in 2011).
PLUMBING BUSINESS
The Plumbing Business is now profitable as a direct result of
extensive rationalisation during the 2011 financial year and
contributed R101 873 profit to the Group’s Consolidated Results
for the financial year ending 2012, being 49% of the associate’s
net profit after tax for the year. This profit is reflected under
“Share of profit of associate” in the Condensed Consolidated
Statement of Comprehensive Income. The Group’s exposure to
financial risk has now been substantially limited in respect of
the plumbing business.
STORE OPENINGS
No new stores were added during the twelve months under review and
the store count for Hardware Warehouse stores remained at 17.
However, one additional store (Mbhizana) was opened during August
2012, taking the total store count to 18 spread over the provinces
of Eastern Cape, KZN and Mpumalanga. Three new stores are planned
for opening during the financial year ending 2013, including the
Mbhizana store. Store expansion is (in the short term) aimed at
obtaining critical mass in the provinces of KZN and Mpumalanga.
DEBT REDUCTION
During the financial year, the Group reduced its Interest Bearing
Debt substantially by R19.9 million, including the expensive R15
million rand loan. This will greatly reduce the interest charge to
the statement of comprehensive income going forward, and will
therefore have a positive effect on the overall earnings of the
Group. The Debt Equity Ratio of the Group, and the attendant risk
associated therewith, has therefore been substantially reduced.
2012 2011
R’000 R’000
Interest bearing borrowings
-non-current liability 2 102 10 857
-current liability 2 761 19 884
Bank Overdraft 19 908 12 708
Cash and cash equivalents (4 216) (2 975)
Total 20 555 40 474
Reduction in Interest Bearing debt-Net of Cash and cash
equivalents is R19.919 million
Debt Equity Ratio
2012 2011
R’000 R’000
Interest bearing debt less cash and cash
equivalents 20 555 40 474
Equity 22 304 18 108
Debt/Equity Ratio 0.92/1 2.24/1
Inventory levels have been well managed. The number of days
stockholding to Cost of Sales has reduced by 4 days, from 67 to 63
days.
CASH FLOW
The Group increased its overdraft facility with the Company’s
bankers by R5.9 million to R20 million. This facility contributed
to the company’s ability in retiring its expensive medium term
debt of R15 million. The repayment was achieved through cash
raised from the following: better stockholding management and
control, the sale of two non-core properties, additional overdraft
facilities, and the profits generated during 2012. Notwithstanding
this debt reduction, the Company remains in a good cashflow
position for optimal operational performance.
NOTEWORTHY COMMENTARY
Since the rationalisation and sale of a 51% share of the Plumbing
business in June 2011, management have continued with intense
focus on extracting added value from the following areas, and
utilising the new computer system to assist therewith: further
strategic margin improvement, expansion of certain ranges and
convenience shopping of “Product Smalls” such as lighting,
electrical, basic plumbing, etc, range re-alignment of inventory
items in line with regional specific demands and customer trends,
and Risk Management through the expanding Internal Audit
Department. Strong attention has also been applied to further
streamlining the business model for rapid store expansion.
PROSPECTS FOR THE FUTURE
The Board will continue to seek a strategic alliance on a value
add basis to give growth prospects impetus, in addition to
increasing the benefits of greater buying power.
During the beginning of the new Financial Year (FYE 2013), revenue
growth has remained consistent with that of the previous year. The
first two trading months of the new financial year have achieved a
revenue growth on core non cementitious products of 18.9% on the
comparable two months last year. (General Information – this has
not been reviewed by the Company’s auditors).
INTERNATIONAL FINANCIAL REPORTING STANDARDS
The accounting policies applied in the preparation of these
provisional consolidated annual results are based on reasonable
judgments and estimates, are in accordance with International
Financial Reporting Standards (“IFRS”) and are consistent with
those applied in the annual financial statements for the year
ended 30 June 2011, except for the change in the basis of
inventory costing which has been explained under the heading,
“Basis of Preparation”. These provisional consolidated annual
results as set out in this report have been prepared in terms of
IAS 34 – Interim Financial Reporting, the Companies Act, 2008 (Act
71 of 2008), and the Listings Requirements of JSE Limited.
4. SEGMENT INFORMATION
Plumbing
business -
Hardware Discontinued
Warehouse Group operations Group
Reviewed Reviewed Reviewed
12 12 12
months months months
ended ended ended
30 June 30 June 30 June
2012 2012 2012
R’000 R’000 R’000
Statement of
comprehensive
income
Revenue 420 774 - 420 774
Profit from
operations 11 668 - 11 668
Investment
income 986 - 986
Finance costs (4 040) - (4 040)
Profit before
taxation 8 614 - 8 614
Taxation (2 617) (1 794) (4 411)
Profit for the
year 5 997 (1 794) 4 203
Statement of
financial
position
Segment assets 105 954 - 105 954
Segment
liabilities 72 281 - 72 281
Plumbing
business -
Hardware Discontinued
Warehouse Group operations Group
Audited Audited Audited
12 12 12
months months months
ended ended ended
30 June 30 June 30 June
2011 2011 2011
R’000 R’000 R’000
Statement of
comprehensive
income
Revenue 354 177 47 278 401 455
Profit /
(Loss) from 10 158 (8 309) 1 849
operations
Investment
income 167 594 761
Finance costs (5 592) (279) (5 871)
Fair value
loss on
discontinued
operations - (315) (315)
Profit /
(Loss) before
taxation 4 733 (8 309) (3 576)
Taxation (1 365) 5 534 4 169
Profit /
(Loss) for the
year 3 368 (2 775) 593
Statement of
financial
position
Segment assets 117 359 - 117 359
Segment
liabilities 89 510 - 89 510
5. CHANGES IN COMPOSITION OF THE GROUP
On Tap Border 30 June
2011
R’000
Assets
Property, plant and equipment (432)
Deferred tax asset (424)
Inventories (2 914)
Trade and other receivables (4 390)
Cash and cash equivalents (10)
Liabilities
Related party loans 3 631
Interest bearing borrowings 302
Tax payables 73
Trade and other payables 3 229
Bank overdrafts 1 250
315
Consideration -
Fair value loss on discontinued operations (315)
At 30 June 2011 On Tap Border was identified as a disposal group.
All associated assets and liabilities were classified as
discontinued operations.
The fair value loss on discontinued operations was disclosed as
part of discontinued operations in the condensed consolidated
statement of comprehensive income.
The disposal was a strategic decision allowing the group to focus
on its core business.
6. DISCONTINUED OPERATIONS
On 30 June 2011 Hardware Warehouse Business disposed of 51% of its
share in On Tap Border. On Tap Border met the definition of a
discontinued operation.
Reviewed Audited
12 months 12 months
ended ended
30 June 30 June
2012 2011
R’000 R’000
Revenue - 47 278
Other income - 248
Administration expenses - (687)
Personnel costs - (6 534)
Other expenses - (7 829)
Loss from operations - (8 309)
Investment income - 594
Finance costs - 279
Fair value loss on discontinued
operations - (315)
Loss before taxation - (8 309)
Taxation (1 794) 5 534
Loss for the period from
discontinued operations (1 794) (2 775)
The net cash flows attributable to the operating, investing and
financing activities of discontinued operations are as follows:
Reviewed Audited
12 months 12 months
ended ended
30 June 30 June
2012 2011
R’000 R’000
Net cash from operating activities
- 1 499
Net cash from investing activities
- 291
Net cash used in financing
activities - (1 621)
Net increase in cash and cash
equivalents - 169
During the prior year, the deferred tax asset in the accounting
records of Hardware Warehouse Ltd was recognised based on an
estimated assessed loss of R17 028 652. During the current year,
the taxable loss was assessed at R10 620 961. The reversal of the
deferred tax asset of R1 794 153 is classified during the current
year as a transaction relating directly to the discontinued
operation.
7. HEADLINE AND DILUTED HEADLINE EARNINGS / (LOSS) PER SHARE
The earnings and weighted average number of ordinary shares used in
the calculation of headline and diluted earnings per share are as
follows:
Reconciliation of total earnings to headline earnings
attributable to equity holders of the parent:
2012 2011
R’000 R’000
Profit attributable to ordinary equity
holders of the parent entity 4 196 594
Adjustments:
Add impairment of goodwill - 2 231
(Less) / Add profit / loss on disposal of
property, plant and equipment (702) 247
Taxation effect of adjustments 804 (69)
Fair value loss on discontinued operations - 315
Headline earnings 4 298 3 318
Weighted average number of ordinary shares in
issue (Excluding treasury shares) (’000) 69 400 69 400
Dilutive weighted average number of ordinary
shares in issue (R’000) 69 611 69 400
Total number of shares in issue (’000) 77 900 77 900
Headline earnings per share in cents 6.19 4.78
Headline earnings from continuing operations
per share in cents 8.78 5.11
Headline (loss) from discontinued operations
per share in cents (2.59) (0.33)
Diluted headline earnings per share in cents 6.17 4.78
Diluted headline earnings from continuing
operations per share in cents 8.75 5.11
Diluted headline (loss) from discontinued
operations per share in cents (2.58) (0.33)
8. CHANGES IN SHARE CAPITAL AND SHARE PREMIUM
There were no changes in share capital and share premium during
the financial year ended 30 June 2012.
9. SELECTED EXPLANATORY NOTES
Property, Plant and Equipment decreased significantly due to the
sale of the two properties in two of the subsidiaries in the
group. Additions for the year amounted to R3 444 210 and disposals
for the year amounted to R15 044 893, inclusive of the properties.
Related party loans decreased due to the part repayment of the
loan from the associate company.
The deferred tax asset reduced significantly due to the over
provision of the deferred tax asset in the previous year based on
the estimated assessed loss as well as utilisation of the assessed
loss in the current year.
Trade and other receivables has increased significantly due to a
normal increase in trade debtors and an insurance debtor relating
to the fire at the Mtubatuba branch.
Interest bearing borrowings has decreased significantly due to the
repayment of the medium term finance as discussed in the
commentary.
10. RELATED PARTY TRANSACTIONS
There is a related party loan of R1 621 668 to On Tap Border (Pty)
Ltd at 30 June 2012. R1 051 169 of the loan bears interest at prime
plus 1% and is repayable within 10 years from the date of the sale
agreement. The remaining R570 499 is interest free and has no fixed
terms of repayment. Interest earned during the year amounted to
R90 385.
On 30 June 2011 Hardware Warehouse Business commenced three lease
improvement agreements with related parties. The value of these
lease improvements were R1 484 944.
All transactions with related parties during the current and
previous year were concluded at arm’s length.
11. ACQUISITION OF BUSINESSES
There were no acquisitions during the current year. The prior year
acquisitions were as follows:
Mpumalanga Branch
R’000
Net asset value -
Goodwill 375
Consideration 375
On 13 August 2010 the acquisition of an existing hardware
retailer in Mpumalanga became effective. The acquisition was
paid for in cash.
The above acquisition was made for strategic growth reasons.
12. EVENTS AFTER THE END OF THE REPORTING PERIOD
No significant transactions which require disclosure have occurred
since the end of the year to the date of this announcement.
However, the Company is currently under a cautionary announcement.
13. CHANGES TO THE COMPOSITION OF THE BOARD
On 16 September 2011, Mrs. EL Mason was appointed to the Board to
fill the vacancy created by the resignation of an Independent Non-
executive Director. In addition a third independent non-Executive
Director, Mr. L Tebbutt joined the Board on 29 June 2012. I would
like to take this opportunity to welcome these new board members.
14. DIVIDENDS
No dividend will be declared for the financial year ended 30 June
2012 (2011: Nil), in line with cash resources that were required
for the debt reduction and the roll-out of branches planned for
2013.
15. APPRECIATION
The strong revenue growth since listing and the expansion of the
Group’s geographic footprint continues. Our appreciation in
supporting and assisting with this growth is extended to our
staff, customers, suppliers, advisors and the Board of Directors.
Ivan Senar
Chairman
26 September 2012
16. CORPORATE INFORMATION
Hardware Warehouse Limited
Country of incorporation and domicile: South Africa
Registration number: 2007/004302/06
Share code: HWW
ISIN: ZAE000104253
Registered office
Triple Point, 52 Quenera Drive, Beacon Bay, 5241
Postal address
PO Box 19514, Tecoma, East London, 5214
Directors
IMJ Senar, Chairman; SC Miller, Chief Executive Officer; LA
Rhind, Financial Director; NE Woollgar, Independent Non-
executive Director; EL Mason, Independent Non-executive
Director; L Tebbutt, Independent Non-executive Director.
Contact details
Tel: +27 43 783 3000
Fax: +27 43 748 2668
Web: www.hwwh.co.za
Transfer secretaries
Computershare Investor Services Proprietary Limited
Auditors
BDO South Africa Inc
Designated Adviser
Merchantec Capital
Date: 26/09/2012 01:13:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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