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Audited year end results and dividend declaration
NU-WORLD HOLDINGS LIMITED
Registration No. 1968/002490/06
(Incorporated in the Republic of South Africa)
JSE share code: NWL ISIN code: ZAE000005070
(“Nu-World” or “the Group” or “the Company”)
AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2012 AND A
DIVIDEND DECLARATION
GROUP REVENUE FROM CONTINUING OPERATIONS INCREASED BY 31,3% TO
R 2 114,5 MILLION
INCOME AFTER TAXATION FROM CONTINUING OPERATIONS INCREASED BY 81,1% TO
R 62,9 MILLION
TOTAL ATTRIBUTABLE INCOME INCREASED BY 91.6% TO R 38,4 MILLION.
EPS AND HEPS (CENTS) INCREASED BY 91,4% TO 179,2 CENTS.
DIVIDEND PER SHARE (CENTS) INCREASED BY 91,6% TO 56,5 CENTS.
NET ASSET VALUE PER SHARE (CENTS) INCREASED BY 5,9% TO 3,045.8 CENTS.
Year ended Year ended
31-Aug 31-Aug
2012 2011 %
R000 R000 change
CONDENSED GROUP STATEMENT OF
COMPREHENSIVE INCOME
CONTINUING OPERATIONS
Revenue 2 114 500 1 609 922 31,3%
Net operating income 93 843 50 493 85,9%
Depreciation 5 643 4 677
Interest paid 13 224 8 573
Fair value adjustment on financial 1 618 5 389
instruments
Income before taxation 76 594 42 632
Taxation 13 669 7 888
Income after taxation from continuing 62 925 34 744 81,1%
operations
DISCONTINUED OPERATIONS
Revenue 8 859 55 663
Net operating loss (20 233) (11 427)
Depreciation 60 1 703
Loss before taxation (20 293) (13 130)
Taxation 9 0
Loss after taxation from discontinued (20 302) (13 130)
operations
Total net income after taxation 42 623 21 614 97,2%
Share of associate company income / 28 (292)
(loss)
Net profit for the year 42 651 21 322 100,0%
Year ended Year ended
31-Aug 31-Aug
2012 2011 %
R000 R000 change
Other comprehensive income:
Exchange differences on translating 10 774 9 229
foreign operations
Total comprehensive income for the 53 425 30 551
year
Total profit attributable to:
Non-controlling interest 4 256 1 278
Equity holders of the company 38 395 20 044 91,6%
42 651 21 322
Total comprehensive income
attributable to:
Non-controlling interest 10 511 6 646
Equity holders of the company 42 914 23 905
53 425 30 551
Headline earnings reconciliation:
Determination of attributable
earnings and headline earnings:
Net profit attributable to ordinary 38 395 20 044 91,6%
shareholders
Headline earnings 38 395 20 044 91,6%
OTHER GROUP INFORMATION
Dividend / Capital distribution 12 798 6 681 91,6%
Earnings per share (cents) 179,2 93,6 91,4%
Headline earnings per share (cents) 179,2 93,6 91,4%
Diluted earnings per share (cents) 171,8 89,7 91,5%
Dividend / Capital distribution per 56,5 29,5 91,6%
share (cents)
Dividend / Capital distribution cover 3,0 3,0
Shares in issue (less treasury 21 418 695 21 420 795
shares)
Shares in issue – weighted 21 420 083 21 400 205
Shares in issue – diluted 22 350 195 22 352 295
OTHER GROUP INFORMATION
Determination of attributable
earnings and headline earnings:
Net income attributable to ordinary 38 395 20 044 91,6%
shareholders
Headline earnings 38 395 20 044 91,6%
Operating income from continuing 4,4% 3,1%
operations as percentage of revenue
Net debt / (negative debt) to equity 8,4% -14,3%
ratio (%)
Effective taxation rate (%) 24,3% 26,7%
Net asset value per share (cents) 3 045,8 2 876,4 5,9%
Capital expenditure
Expansion 3 975 3 295
Replacement 544 1 125
4 519 4 420
Year ended Year ended
31-Aug 31-Aug
2012 2011 %
R000 R000 change
Intangible assets
Goodwill
At beginning and end of year 43 484 37 991
Translation difference 4 289 5 493
47 773 43 484
Intellectual property
At beginning of year 13 182 12 627
Translation of intellectual property 973 555
At end of year 14 155 13 182
Total intangible assets 61 928 56 666
SEGMENTAL INFORMATION
Geographical revenue
South Africa – continuing operations 1 353 710 938 562
South Africa – discontinued 8 859 55 663
operations
Offshore subsidiaries 760 790 671 360
2 123 359 1 665 585 27,5%
Geographical income
South Africa – continuing operations 56 349 31 422
South Africa – discontinued (20 302) (13 130)
operations
Offshore subsidiaries 2 348 1 752
38 395 20 044 91,6%
Year ended Year ended
31-Aug 31-Aug
2012 2011
R000 R000
CONDENSED GROUP STATEMENT OF FINANCIAL
POSITION
ASSETS
Non-current assets
Fixed assets 17 651 16 774
Intangible assets 61 928 56 666
Financial assets and other investments 584 54 318
Deferred taxation 6 938 10 769
Current assets
Current assets classified as held for sale 12 490
Financial assets 51 706
Inventory 481 689 372 885
Trade and other receivables 318 308 244 412
Cash equivalents 10 085 87 800
Total assets 948 889 856 114
EQUITY AND LIABILITIES
Ordinary shareholders’ funds 652 371 616 138
Non-controlling interests 43 812 35 781
Total shareholders’ funds 696 183 651 919
Year ended Year ended
31-Aug 31-Aug
2012 2011
R000 R000
Non-current liabilities
Long term liability 20 000
Current liabilities
Bank overdraft 64 725
Trade and other payables 187 981 184 195
Total equity and liabilities 948 889 856 114
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Balance as at 1 September 616 138 620 102
Total comprehensive income for the year 38 395 20 044
Dividend paid (1 771)
Capital distribution from share premium (6 681) (22 873)
Fair value movement 4 519 3 862
Net treasury share movement (3 226)
Balance as at 31 August 652 371 616 138
CONDENSED GROUP STATEMENT OF CASH FLOWS
Cash (utilized) / generated by operating (139 362) 36 559
activities
Cash (absorbed by) / generated from operations (108 511) 84 458
Interest paid (13 224) (8 573)
Capital distribution/dividend paid (9 161) (24 644)
Normal tax on companies (8 466) (14 682)
Cash flows from investing activities (3 078) (7 279)
Purchase of tangible fixed assets (5 874) (4 420)
Proceeds on disposal of fixed assets 114 367
Proceeds on disposal of assets held for sale 2 711
Decrease in loan to associate company (29)
Increase in investment in treasury shares (3 226)
Cash flows from financing activities 0 0
Net increase / (decrease) in cash and cash (142 440) 29 280
equivalents
Cash and cash equivalents at the beginning of 87 800 58 520
the year
Cash and cash equivalents at end of the year (54 640) 87 800
NOTES
1. Basis of preparation
The audited condensed consolidated Group annual financial statements for
the year ended 31 August 2012 have been prepared in accordance with
accounting policies compliant with International Financial Reporting
Standards (IFRS), information as required by IAS 34 Interim Financial
Reporting, the AC 500 Standards as issued by the Accounting Practices
Board, the JSE Limited’s Listings Requirements and the requirements of
the Companies Act of South Africa. The accounting policies and their
application are consistent, in all material respects, with those detailed
in Nu-World’s 2011 annual report. All new and revised standards that
became effective during the current period were adopted and did not lead
to any significant changes in accounting policies.
The annual financial statements were prepared under the supervision of
the Financial Director, G R Hindle CA(SA).
2. Assets classified as held for sale
During the previous financial year to 31 August 2011, the assets of the
Group’s manufacturing operation was transferred to “assets held for sale”
in line with the reporting requirements of IFRS 5, non-current assets
held for sale and discontinued operations. During the year under review,
the closure process was completed and those assets which were not sold
have been written down to fair value. This loss is included in the
trading loss from discontinued operations.
3. Discontinued operations
The results have been adjusted for the effect of the assets held for sale
in note 2 above.
4. Audit Report
The auditors, Tuffias Sandberg KSi, issued an unqualified audit opinion
on the Group’s annual financial statements for the year ended 31 August
2012. A copy of their audit report is available for inspection at the
company’s registered office. These condensed Group annual financial
statements have been derived from the Group annual financial statements
and are consistent, in all material respects, with the Group annual
financial statements.
COMMENTARY
The release of our interim results to 29th February 2012 indicated the
beginning of a positive turnaround of the group’s trading and financial
position.
The directors of Nu-World, a leading international source for branded
consumer durables, are now pleased to report a strong continuation of
growth with the release of these results for the financial year to 31st
August 2012.
These strong results have been achieved against a background of low
consumer confidence coupled with lackluster retailer confidence. The
trading period has been particularly challenging, but Nu-World retains
the depth of field within its range of international and local brands to
provide value-for-money at each lifestyle level. Furthermore, it is
commendable that these results have been achieved notwithstanding the
trading loss incurred from discontinued operations.
The group’s line-up of international and in-house value brands encompass
a range of consumer durables within 6 key market categories which
include: -consumer electronics, hi-tech, small electrical appliances,
white goods, liquor and furniture.
Consumer electronics under our JVC, Telefunken, Nu-Tec and Palsonic
brands performed particularly well, with an impressive line-up of flat
panel televisions. JVC televisions as an aspirational purchase offers an
extensive range from 19” LED’s to 65” 3D state-of-the-art panels at
affordable pricing. Our range of white goods continues to grow with an
impressive offering of microwaves, ovens, hobs, stoves, cooker hoods,
fridges, freezers, dishwashers, washing machines and tumble dryers.
Small appliances also performed well including our recently launched
premium range Prima One&Only, as an aspirational brand at competitive
pricing. At this time we are extending our furniture offering to include
bedding, kitchenette units, occasional and outdoor furniture.
Our South African base accounts for 64% of the group’s revenue and 94% of
group income. Australian operations account for 36% of turnover and 6% of
income. At the beginning of October 2012, the Reserve Bank of Australia
cut its benchmark interest rate to 3.25%, the lowest level since 2009, in
an effort to support the economy and revive consumer demand. The
Australian economic environment remains challenging and competitive.
FINANCIAL OVERVIEW
STATEMENT OF COMPREHENSIVE INCOME
Group revenue from continuing operations increased by 31.3% to R2 114,5
million (August 2011 – R1 609,9 million).
Net operating income – EBITDA from continuing operations increased by
85.9% to R 93,8 million (August 2011 : R 50,5 million).
Group margins from continuing operations have improved by 42% to 4.4%
(August 2011 – 3.1%).
Income after tax from continuing operations increased 81.1% to R62,9
million (August 2011 – R34,7 million).
Total attributable income for the year increased by 91.6% to R38,4
million (August 2011 – R20,1 million).
Earnings per share – EPS and Headline earnings per share - HEPS increased
91.4% to 179.2 cents (August 2011 – 93.6 cents).
Dividend per share increased 91.6% to 56.5 cents (August 2011 – 29.5
cents). Dividend cover remains the same at 3 times.
STATEMENT OF FINANCIAL POSITION
The balance sheet remains strong with a gearing ratio (debt : equity) of
8.4%.
Inventory levels of R481,7 million have increased in line with increased
revenue. The high level of inventory can be attributed to an unusually
high carryover of winter season stock due to the short, late winter
season, coupled with the early receipt of an increased range of summer
season products. In addition, we are carrying an extended range of JVC
televisions and a newly introduced range of furniture. At this time of
year we have a buildup of stock in preparation for our peak Christmas
season.
Trade and other receivables have also increased in line with the increase
in revenue.
Directors and management are focused on improving working capital
management. Stocking levels and ranges are being rationalized and stock
turn rates will improve going forward. Similarly debtors’ collection days
have improved and will improve further.
Net asset value per share has increased by 5.9% to 3,045.8 cents (August
2011 – 2,876.4 cents).
SUBSEQUENT EVENTS
No events material to the understanding of this report have occurred
during the period between 31 August 2012 and the date of this report.
DECLARATION OF FINAL DIVIDEND
Notice is hereby given that a final dividend of 56,5 cents per share
(2011: 29,5 cents per share) was declared on 25 October 2012 payable to
shareholders recorded in the register of Nu-World at the close of
business on the record date appearing below.
The salient dates pertaining to the final dividend are as follows:
Last date to trade ‘’cum’’ dividend Friday, 30 November 2012
Date trading commences
‘’ex’’ dividend Monday, 3 December 2012
Record date Friday, 7 December 2012
Date of payment Monday, 10 December 2012
Ordinary share certificates may not be dematerialised or rematerialised
between Monday, 3 December 2012 and Friday, 7 December 2012, both days
inclusive.
In determining the dividends tax (DT) of 15% to withhold in terms of the
Income Tax Act for those shareholders who are not exempt from the DT, the
total secondary tax on companies (STC) credits utilized as part of this
declaration amount to R12,795,252.73 and consequently the STC credits
utilized per share amount to 56,5 cents per share. Shareholders who are
not exempt from the DT will therefore receive a dividend of 56,5 cents
net of DT. Nu-World has 22 646 465 ordinary shares in issue and its
income tax reference number is 9100/085/71/2.
Where applicable, dividends in respect of certificated shares will be
transferred electronically to shareholders’ bank accounts on the payment
date. In the absence of specific mandates, dividend cheques will be
posted to shareholders. Ordinary shareholders who hold dematerialized
shares will have their accounts at their CSDP or broker credited/updated
on Monday, 10 December 2012.
ANNUAL REPORT
The annual report will be mailed to shareholders prior to end November
2012. The annual general meeting will take place at 10h00 on Wednesday,
13 February 2013, at the registered office of the company.
PROSPECTS
The current state of the South African economy within the context of the
broader global economy represents a challenging trading environment for
the forthcoming financial year. We expect that the current constrained
consumer demand environment will persist for some time.
The July interest rate cut brought some relief to indebted households,
but the ongoing devaluation of the Rand will influence inflation
increases going forward. The Bureau for Economic Research latest
revisions forecast GDP growth for 2012 at 2.5% ticking upwards to 3.3%
for 2013. Likewise consumer inflation is forecast to average 5.7% during
2012 and 5.3% for 2013.
Amongst ongoing successful trading initiatives to generate revenue and
improve margins, management throughout the group is focusing on working
capital management and cost-cutting initiatives.
On behalf of the board of directors
M.S. Goldberg B.H. Haikney
Executive Chairman Company Secretary
25 October 2012
Administration
Registration number 1968/002490/06
(Incorporated in the Republic of South Africa)
JSE share code: NWL
ISIN code: ZAE000005070
Registered office
35 3rd Street, Wynberg, Sandton 2199
Republic of South Africa
Tel +27 (11) 321 2111
Fax +27 (11) 440 9920
Transfer secretaries
Computershare Investor Services (Pty) Ltd
70 Marshall Street, Johannesburg 2001
Company secretary
B.H. Haikney
Auditors
Tuffias Sandberg KSi
Directors
M.S. Goldberg (Executive Chairman),
J.A. Goldberg (Chief Executive),
G.R. Hindle (Financial Director)
Non-executive directors
J.M. Judin (Lead)
D. Piaray
R. Kinross
www.nuworld.co.za
25 October 2012
Johannesburg
Sponsor
Sasfin Capital,
(a division of Sasfin Bank Limited)
Date: 25/10/2012 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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