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Unaudited Interim Report for the six months ended 28 February 2013
Nu-World Holdings Limited
Registration number 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’’)
Unaudited Interim Report for the six months ended 28 February
2013
- Group revenue from continuing operations increased by 1.0%
to R1 133,1 million
- Net profit attributable to ordinary shareholders decreased
by 11.5% to R29,7 million
- EPS and HEPS (cents) decreased by 11.5% to 138.6 cents
- Cash generated by operations R58,8 million
- Net asset value per share 3 129,5 cents
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
28 February 29 February 31 August
2013 2012 % 2012
R’000 R’000 change R’000
Continuing operations
Revenue 1 133 069 1 122 187 1,0% 2 114 500
Net operating income 55 388 70 735 93 843
Depreciation 2 817 2 267 5 643
Interest paid 7 538 7 062 13 224
Fair value adjustment on
financial instruments 3 609 3 128 (1 618)
Income before taxation 41 424 58 278 76 594
Taxation 11 950 14 972 13 669
Income after taxation
from continuing
operations 29 474 43 306 62 925
Discontinued operations
Revenue 7 623 8 859
Net operating loss (5 505) (20 233)
Depreciation 21 60
Loss before taxation (5 526) (20 293)
Taxation 9
Loss after taxation from
discontinued operations (5 526) (20 302)
Total net income after
taxation 29 474 37 780 42 623
Share of associate
company profit/(loss) 28
Net profit for the
period/year 29 474 37 780 42 651
Other comprehensive
income:
Exchange differences on
translating foreign
operations 8 742 6 655 10 774
Total comprehensive
income for the
period/year 38 216 44 435 53 425
Net profit attributable
to:
Non-controlling interest (216) 4 222 4 256
Equity holders of the
company 29 690 33 558 -11,5% 38 395
29 474 37 780 42 651
Total comprehensive
income attributable to:
Non-controlling interest 3 500 7 269 10 511
Equity holders of the
company 34 716 37 166 42 914
38 216 44 435 53 425
Determination of
attributable earnings
and headline earnings
Net income attributable
to ordinary shareholders 29 690 33 558 -11,5% 38 395
Headline earnings 29 690 33 558 -11,5% 38 395
SUPPLEMENTARY
INFORMATION
Dividend paid 12 798
Dividend paid per share
(cents) 56,5
Dividend cover 3,0
Earnings per share
(cents) 138,6 156,7 -11,5% 179,3
Headline earnings per
share (cents) 138,6 156,7 -11,5% 179,3
Shares in issue 21 418 695 21 420 195 21 418 695
Shares in issue -
weighted 21 418 695 21 420 195 21 420 083
Shares in issue -
diluted 22 350 195 22 351 695 22 350 195
Operating income as a
percentage of turnover
(%) 4,9% 6,3% 4,4%
Debt to equity ratio (%) 5,1% 6,6% 8,4%
Effective taxation rate 28,8% 28,4% 24,3%
Net asset value per
share (cents) 3 129,5 3 000,6 4,3% 3 045,8
Intangible assets
Goodwill
At beginning of
period/year 47 773 43 484 43 484
Revaluation of goodwill 2 034 1 866 4 289
At end of period/year 49 807 45 350 47 773
Intellectual property
At beginning of
period/year 14 155 13 182 13 182
Revaluation of
intellectual property 265 464 973
At end of period/year 14 420 13 646 14 155
Total intangible assets 64 227 58 996 61 928
SEGMENTAL INFORMATION
Geographical revenue
South Africa -
continuing operations 689 207 692 580 1 353 710
South Africa -
discontinued operations 7 623 8 859
Offshore subsidiaries 443 862 429 607 760 790
1 133 069 1 129 810 2 123 359
Geographical income
South Africa -
continuing operations 27 221 36 542 56 349
South Africa -
discontinued operations (5 526) (20 302)
Offshore subsidiaries 2 469 2 542 2 348
29 690 33 558 38 395
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
29 February 29 February 31 August
2013 2012 2012
R’000 R’000 R’000
Balance as at 1
September 652 371 616 138 616 138
Total comprehensive
income for the
period/year 29 690 33 558 38 395
Dividend paid (14 476) (2 479)
Capital distribution
from share premium (6 681) (6 681)
Fair value movement 2 710 2 204 4 519
Balance at end of
period/year 670 295 642 740 652 371
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
28 February 29 February 31 August
2013 2012 2012
R’000 R’000 R’000
ASSETS
Fixed assets 44 178 18 320 17 651
Intangible assets 64 227 58 996 61 928
Financial assets and
other investments 31 776 54 348 584
Deferred taxation 5 200 5 775 6 938
Current assets
Non-current assets
classified as held for
sale 11 892
Investment 51 706
Inventory 502 274 484 630 481 689
Trade and other
receivables 261 434 275 590 318 308
Total assets 909 089 909 551 938 804
Equity and liabilitie
Ordinary shareholders’
funds 670 295 642 740 652 371
Minority interests 44 939 43 050 43 812
Total shareholders’
funds 715 234 685 790 696 183
Current liabilities
Bank borrowings 34 196 42 737 54 640
Short term loan 20 000
Trade and other payables 159 659 161 024 187 981
Total equity and
liabilities 909 089 909 551 938 804
CONDENSED GROUP STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
28 February 29 February 31 August
2013 2012 2012
R’000 R’000 R’000
Cash generated /
(utilised) by operating
activities 29 274 (127 316) (139 362)
Cash generated /
(absorbed) by
operations 58 792 (107 473) (108 511)
Interest paid (7 538) (7 062) (13 224)
Capital
distributions/dividends
paid (14 476) (9 161) (9 161)
Normal tax on companies (7 504) (3 620) (8 466)
Cash flows from
investing activities (8 830) (3 221) (3 078)
Purchase of tangible
fixed assets (29 344) (3 833) (5 874)
Investment in
trademarks (31 706)
Proceeds on disposal of
fixed assets 612 114
Proceeds on disposal of
assets held for sale 2 711
Decrease in loan to
associate company 514 (29)
Redemption of
preference share issue 51 706
Net increase /(decrease)
in cash and cash
equivalents 20 444 (130 537) (142 440)
Cash and cash
equivalents at the
beginning of the
period/year (54 640) 87 800 87 800
Cash and cash
equivalents at the end
of the period/year (34 196) (42 737) (54 640)
COMMENTARY
The stagnant economy and reduced consumer spending, both
locally and offshore, has contained Nu-World’s growth. The
South African consumer environment remains difficult and sales
growth may be under some pressure for the remainder of the
financial year. Rising household debt and escalating utility
costs have strained disposable income. During April 2013, the
index compiled by the Bureau for Economic Research and
sponsored by First National Bank, showed consumer confidence
falling to a nine-year-low in the first quarter of this year.
There are no positive signs that cost pressures on consumers
will ease in the short term.
The directors of Nu-World, a leading international source for
branded consumer durables, are pleased to report on marginal
top-line growth and a positive return to cash generated by
operations for the interim results to 28th February 2013.
The trading period has been particularly challenging, but Nu-
World retains the depth of field within its range of local and
international brands to provide a full range of products at
each lifestyle level.
Nu-World is pleased to announce that JVC-Kenwood of Japan have
appointed the company to manage the marketing and sales of JVC
flat panel televisions in Africa and the Middle East. The
visual category is the largest single category in consumer
electronics. Africa is undergoing a renaissance as consumers
change from old CRT television to flat panels. The Middle East
markets have huge potential as demand increases, this provides
the Group and their appointed distributors an opportunity to
enter into expanding markets and allows for a tier one brand
at effectively one of the most competitive prices in each
respective market. Nu-World has started appointing exclusive
distributors in various countries and initial results have
been very promising. Further growth into Angola, Morocco,
Nigeria, Saudi Arabia and Libya is expected during the
remainder of the financial year.
The small appliance division continued to show strong growth
under its full range of brands including the premium range
Prima One & Only. The summer range of fans, air coolers and
air conditioners showed particularly strong growth in the
period under review.
FINANCIAL OVERVIEW
STATEMENT OF COMPREHENSIVE INCOME
Group revenue from continuing operations increased by 1,0% to
R 1 133,1 million (February 2012 – R 1 122,2 million).
Total attributable income for the period decreased by 11,5% to
R 29,7 million (February 2012 – R 33,5 million).
Operating margins declined due to the minimal top-line growth
while expenses and fixed costs increased with inflation.
STATEMENT OF FINANCIAL POSITION
The balance sheet remains strong with a gearing ratio
(debt:equity) of 5,1%.
Fixed assets increased as a result of the Group’s strategic
decision to acquire the land and buildings previously leased.
In addition to this, the Group acquired full ownership over
its trademarks. Inventory levels of R 502,2 million remain
high due to the excess carryover of summer stock, in addition
to the high level of consumer electronic stock holding,
arising from the slowdown in consumer spending in the first
quarter of this year. Proactive reduction in procurement will
ensure reduced inventory levels before the end of the
financial year. Directors and management remain focused on
improving working capital management. Stocking levels and
ranges are being rationalized and stock turn rates will
improve going forward.
Net asset value per share has increased by 4,3% to 3 129,5
cents (February 2012 – 3 000,6 cents).
REPORTING ENTITY
Nu-World Holdings Limited is a holding company with operations
in South Africa, Hong Kong and Australia. The condensed
consolidated interim financial statements as at and for the
period ended 28 February 2013 comprise the Company, its
subsidiaries and interest in associate.
BASIS OF PREPARATION
These condensed consolidated interim financial statements for
the six months ended 28 February 2013 have been prepared in
accordance with the framework concepts and the measurement and
recognition requirements of International Financial Reporting
Standards (IFRS), the SAICA Financial Reporting Guides as
issued by the Accounting Practices Committee, the Companies
Act, No 71 of 2008 (as amended) and comply with the disclosure
requirements of IAS 34: Interim Financial Reporting. The
condensed consolidated financial statements have been prepared
under the historical cost convention.
The accounting policies used in the preparation of these
results are in accordance with IFRS and consistent in all
material respects with those used in the audited annual
financial statements for the year ended 31 August 2012.
The condensed consolidated interim financial statements are
presented in Rand rounded to the nearest thousand (‘000).
The condensed consolidated statement of financial position at
28 February 2013 and the related condensed statements of
comprehensive income, statement of changes in equity and cash
flows for the six months then ended, have not been reviewed or
reported on by the Group’s auditors.
The interim financial statements have been prepared under the
supervision of Graham Hindle CA (SA) in his capacity as
Financial Director.
SUBSEQUENT EVENTS
No events material to the understanding of the report have
occurred during the period between 28 February 2013 and the
date of this report.
On behalf of the board of directors
J.A. Goldberg B.H. Haikney
Chief Executive Officer Company Secretary
14 May 2013
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
14 May 2013
Johannesburg
Sponsor
Sasfin Capital, a division of Sasfin Bank Limited
Date: 14/05/2013 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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