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Audited Summarised Consolidated Results for the year ended 28 February 2014
HOLDSPORT LIMITED
("Holdsport" or "the company" or "the group")
Registration number: 2006/022562/06
Share code: HSP
ISIN: ZAE000157046
AUDITED SUMMARISED CONSOLIDATED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2014
Sales up 3.1% to R1 417.5 million
Operating profit up 2.8% to R250.0 million
Core headline earnings per share up 1.9% to 423.3 cents
Final gross dividend increased by 11.5% to 145 cents per share
GROUP OVERVIEW
The Holdsport Limited group comprises the retail divisions Sportsmans Warehouse and
Outdoor Warehouse and Performance Brands, a wholesale business that includes the
First Ascent and Capestorm brands.
In a challenging environment total sales increased by 3.1% to R1 417.5 million and
retail sales increased by 3.3% to R1 365.1 million.
Operating profit increased by 2.8% to R250.0 million. Core headline earnings amounted
to 423.3 cents per share, a 1.9% increase on the previous year.
During the current year the aggregate foreign exchange adjustment was an expense of
R0.4 million compared to an aggregate expense of R1.8 million during the prior year.
Core headline earnings excluding the effect of foreign exchange adjustments increased
by 1.3% to 424.0 cents per share.
TRADING DIVISIONS
External sales for the various trading divisions were as follows:
Increase
Number Sales in sales
of stores R'm %
Sportsmans Warehouse 35 1 042.0 4.3
Outdoor Warehouse 20 323.1 0.2
Retail sales 55 1 365.1 3.3
Performance Brands - 52.4 (1.4)
Total sales 55 1 417.5 3.1
Like-for-like retail sales grew by 1.1% while the retail divisions experienced price
inflation of approximately 4.9% for the year. The time weighted trading area increased
by 5.6% relative to the prior year.
The Sportsmans Warehouse division now trades out of 35 stores. The division opened a
new store in Sea Point and closed a store in Amanzimtoti. Like-for-like sales
increased by 2.9%.
The Outdoor Warehouse division comprises 20 stores after opening a new store in
Rondebosch. Like-for-like sales decreased by 3.9%.
Performance Brands' external sales were 1.4% lower than last year but sales to the
group's retail divisions increased by 26.9%.
CAPITAL EXPENDITURE
During the year the group incurred R42.1 million on maintaining and expanding its
retail operations and R40.2 million to complete construction of its retail and
wholesale distribution centres in Cape Town.
CASH FLOW
Holdsport repaid loans of R124.3 million to Standard Bank during the year and replaced
them with a R130 million loan from the FirstRand Group, repayable by 31 August 2016.
The group's net debt amounted to R72.4 million at the end of the current year compared
to R87.9 million in the prior year.
During the year the group purchased and awarded R4.9 million of Holdsport shares in
terms of and subject to the rules of the 2011 Holdsport Forfeitable Share Plan (FSP).
The forfeitable share plan is expensed over the vesting period and the expense of
R7.5 million for the current year is R2.6 million higher than the prior year.
PROSPECTS
We expect trading conditions to remain challenging in 2014. The group signed lease
agreements for a further two new stores to be opened in the next financial year and
are evaluating other opportunities.
FINAL DIVIDEND ANNOUNCEMENT
The directors declared a final gross dividend of 145.0 cents per share for the year
ended 28 February 2014 payable on Monday, 9 June 2014 to ordinary shareholders
recorded in the books of the company at the close of business on Friday, 6 June 2014.
The last day to trade ("cum" the dividend) in order to participate in the dividend
will be Friday, 30 May 2014. The Holdsport Limited ordinary shares will commence
trading "ex" the dividend from the commencement of business on Monday, 2 June 2014
and the record date, as indicated, will be Friday, 6 June 2014.
Ordinary shareholders should take note that share certificates may not be dematerialised
or rematerialised during the period Monday, 2 June 2014 to Friday, 6 June 2014, both
dates inclusive.
In terms of the withholding tax on dividends which became effective on 1 April 2012,
the following additional information is disclosed:
- the dividend has been declared out of total reserves;
- the South African tax dividend rate is 15%;
- there are no STC credits utilised;
- the net local dividend amount is 123.25 cents per ordinary share for shareholders
liable to pay dividend tax and 145.0 cents per ordinary share for shareholders
exempt from the dividend tax;
- the issued share capital of Holdsport at the date of declaration is 43 150 220
ordinary shares; and
- Holdsport's tax reference number is 9618595152.
Certificated ordinary shareholders are reminded that all entitlements to dividends
with a value less than R5.00 per certificated shareholder will be aggregated and the
proceeds donated to a registered charity of the directors' choice, in terms of the
memorandum of incorporation of the company.
Signed on behalf of the board
S MULLER K HODGSON
Chairman CEO
Cape Town
6 May 2014
SUMMARISED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
28 February 28 February
2014 2013
Audited Audited
R'000 R'000
ASSETS
Non-current assets
Property, plant and equipment 150 265 98 282
Goodwill and other intangibles 620 336 633 299
Total non-current assets 770 601 731 581
Current assets
Inventories 354 436 346 054
Trade and other receivables 24 782 22 346
Cash and cash equivalents 57 577 36 284
Taxation 857 -
Derivative instruments - 402
Total current assets 437 652 405 086
Total assets 1 208 253 1 136 667
EQUITY AND LIABILITIES
Capital and reserves
Share capital 229 312 229 312
Other reserves (17 926) (20 521)
Retained earnings 689 544 604 291
Equity attributable to owners of the company 900 930 813 082
Non-current liabilities
Loans 130 000 -
Deferred taxation 42 806 49 623
Straight-lining lease liability 24 590 24 452
Total non-current liabilities 197 396 74 075
Current liabilities
Trade and other payables 109 843 125 085
Derivative instruments 84 -
Short-term portion of loans - 124 282
Taxation - 143
Total current liabilities 109 927 249 510
Total liabilities 307 323 323 585
Total equity and liabilities 1 208 253 1 136 667
SUMMARISED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended Year ended
28 February 28 February
2014 2013
Audited Audited
R'000 R'000
Sales 1 417 584 1 374 531
Cost of sales (734 035) (717 971)
Gross profit 683 549 656 560
Other income 5 470 3 667
Trading expenses (439 010) (416 937)
Operating profit 250 009 243 290
Finance income 2 441 3 104
Finance cost (10 000) (11 652)
Profit before taxation 242 450 234 742
Taxation (68 740) (66 226)
Profit and total comprehensive income for the year
attributable to equity holders of the company 173 710 168 516
SUMMARISED CONSOLIDATED CASH FLOW STATEMENTS
Year ended Year ended
28 February 28 February
2014 2013
Audited Audited
R'000 R'000
Cash flows from operating activities
Cash generated from operations 274 182 239 122
Finance income 2 441 3 104
Finance costs (10 000) (11 652)
Dividends paid (88 457) (79 828)
Taxation paid (76 557) (74 224)
Net cash inflows from operating activities 101 609 76 522
Cash flows from investing activities
Additions to property, plant and equipment (82 353) (72 489)
Additions to intangibles - (8 179)
Proceeds on sale of assets 1 265 1 357
Net cash outflows from investing activities (81 088) (79 311)
Cash flows from financing activities
Increase/(decrease) in loans 5 718 (26 252)
Forfeitable share plan awards (4 946) (12 049)
Net cash inflow/(outflows) from financing activities 772 (38 301)
Net (decrease)/increase in cash and cash equivalents 21 293 (41 090)
Cash and cash equivalents at the beginning of the year 36 284 77 374
Cash and cash equivalents at the end of the year 57 577 36 284
SUMMARISED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Other Retained
capital reserves earnings Total
Audited Audited Audited Audited
R'000 R'000 R'000 R'000
Balance at 1 March 2012 229 312 (13 370) 515 603 731 545
Share-based payment reserve: initial award - (12 049) - (12 049)
Share-based payment expense - 4 898 - 4 898
Dividends paid - - (79 828) (79 828)
Total comprehensive income for the year - - 168 516 168 516
Balance at 28 February 2013 229 312 (20 521) 604 291 813 082
Balance at 1 March 2013 229 312 (20 521) 604 291 813 082
Share-based payment reserve: initial award - (4 946) - (4 946)
Share-based payment expense - 7 541 - 7 541
Dividends paid - - (88 457) (88 457)
Total comprehensive income for the year - - 173 710 173 710
Balance at 28 February 2014 229 312 (17 926) 689 544 900 930
SUMMARISED CONSOLIDATED SEGMENTAL ANALYSIS
Sportsmans Outdoor Performance
Warehouse Warehouse Brands Corporate Group
R'000 R'000 R'000 R'000 R'000
Year ended 28 February 2014
Total sales 1 042 008 323 117 111 003 - 1 476 128
Less intersegment sales - - (58 544) - (58 544)
External sales 1 042 008 323 117 52 459 - 1 417 584
External interest received - - 88 2 353 2 441
External interest paid - - (3) (9 997) (10 000)
Depreciation and amortisation (19 732) (6 263) (3 407) (13 323) (42 725)
Profit/(loss) before taxation 219 692 50 739 19 017 (46 998) 242 450
Capital expenditure 28 698 9 190 14 338 30 126 82 352
Segment assets 301 671 105 835 115 149 685 598 1 208 253
Segment liabilities 81 601 18 629 10 790 196 303 307 323
Year ended 28 February 2013
Total sales 999 042 322 251 99 348 - 1 420 641
Less intersegment sales - - (46 110) - (46 110)
External sales 999 042 322 251 53 238 - 1 374 531
External interest received - - 258 2 846 3 104
External interest paid - - (4) (11 648) (11 652)
Depreciation and amortisation (16 856) (5 691) (2 954) (12 572) (38 073)
Profit/(loss) before taxation 201 540 54 300 23 393 (44 491) 234 742
Capital expenditure 29 164 7 891 22 327 21 286 80 668
Segment assets 283 545 100 183 101 925 651 014 1 136 667
Segment liabilities 87 644 24 638 11 117 200 186 323 585
NOTES TO THE SUMMARISED FINANCIAL STATEMENTS
1. KPMG Inc., the group's independent auditor, has audited the consolidated financial
statements for the year to 28 February 2014 and has expressed an unmodified opinion
on the consolidated financial statements. The summary financial statements have been
audited and an unmodified opinion has been expressed on the summary financial
statements. The summary consolidated financial statements presented in this
announcement have been summarised from the audited consolidated financial statements.
Their audit reports are available for inspection at the company's registered office.
The summary consolidated financial statements are prepared in accordance with the
requirements of the JSE Limited Listings Requirements for preliminary reports, and
the requirements of the Companies Act applicable to summary financial statements.
The Listings Requirements require preliminary reports to be prepared in accordance
with the framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and Financial Pronouncements
as issued by the Financial Reporting Standards Council and to also, as a minimum,
contain the information required by IAS 34 Interim Financial Reporting.
The accounting policies applied in the preparation of the consolidated financial
statements from which the summary financial statements were derived are in terms of
International Financial Reporting Standards and are consistent with those accounting
policies applied in the preparation of the previous consolidated annual financial
statements.
These audited summarised consolidated results have been prepared under the
supervision of the group's Chief Financial Officer, JP Loubser (CA(SA)).
2. These financial statements incorporate the financial statements of the company, all
its subsidiaries and all entities over which it has operational and financial control.
Year ended Year ended
28 February 28 February
2014 2013
Audited Audited
R'000 R'000
3. Trading expenses
Depreciation on property, plant and equipment 29 762 25 110
Amortisation of intangibles 12 963 12 963
Occupancy cost 123 625 113 791
Straight-lining of leases 138 2 480
Staff costs 167 711 159 888
Foreign exchange gains (862) (461)
Other operating costs 105 673 103 166
439 010 416 937
4. Cash generated from operations
Operating profit 250 009 243 290
Adjustments for:
Depreciation 29 762 25 110
Amortisation of intangibles 12 963 12 963
Profit on sale of assets (657) (357)
Fair value loss/(gain) on derivative instruments 486 (1 497)
Forfeitable share plan expense 7 541 4 898
Straight-lining of leases 138 2 480
Changes in working capital:
Increase in trade and other receivables (2 436) (2 957)
Increase in inventories (8 382) (49 331)
(Decrease)/increase in trade and other payables (15 242) 4 523
Cash generated from operations 274 182 239 122
5. Earnings per share and net asset value per share
Earnings per ordinary share (cents)
- Basic 402.6 390.5
- Headline 401.5 389.9
- Core headline 423.3 415.7
- Core headline before foreign exchange effect 424.0 418.7
Ordinary shares in issue ('000) 43 150.2 43 150.2
Weighted average ordinary shares in issue ('000) 43 150.2 43 150.2
Net asset value per ordinary share (cents) 2 087.9 1 884.3
Net tangible asset value per ordinary share (cents) 789.6 564.2
Reconciliation to core headline earnings
The group uses core headline earnings as a consistent measure of performance for
management purposes. Core headline earnings exclude exceptional once-off costs,
the amortisation of trademarks and the lease straight-lining expense and is
presented below:
Year ended Year ended
28 February 28 February
2014 2013
Audited Audited
R'000 R'000
Basic earnings 173 710 168 516
Adjusted for (net of taxation):
Profit on sale of assets (473) (257)
Headline earnings 173 237 168 259
Adjusted for (net of taxation):
Amortisation of intangibles 9 334 9 333
Straight-lining of leases 99 1 786
Core headline earnings 182 670 179 378
Adjusted for (net of taxation):
Foreign exchange gains (621) (332)
Foreign exchange adjustments in cost of sales 922 1 636
Core headline earnings before foreign exchange effect 182 971 180 682
6. Dividend per share
Dividend declared per share (cents)
- Interim 75.0 70.0
- Final 145.0 130.0
Total dividend 220.0 200.0
Dividend cover (by core headline earnings) 1.9 2.1
Registered office: The Mill House, 1 Canterbury Street, Cape Town 8001
Executive directors: KG Hodgson, JP Loubser, B Moritz
Non-executive directors: SA Muller (Chairman), B Hopkins, C Sonn, M Vilakazi
Company secretary: AE van Zyl
Transfer secretaries: Computershare Investor Services (Proprietary) Limited,
Ground Floor, 70 Marshall Street, Johannesburg 2001
Sponsor: UBS South Africa (Proprietary) Limited
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