Wrap Text
Final Results for the year ended 30 June 2014
SUPER GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1943/016107/06
Share code SPG
ISIN ZAE000161832
("Super Group" or "the Group" or "the company")
Final Results
for the year ended 30 June 2014
FINANCIAL PERFORMANCE AND
HIGHLIGHTS
for the year ended 30 June 2014
22%
REVENUE
INCREASED BY
22% TO R14,3 BILLION
19%
OPERATING PROFIT
INCREASED BY
19% TO R1,3 BILLION
17%
PROFIT BEFORE TAXATION
INCREASED BY
17% TO R1,2 BILLION
0,3
OPERATING PROFIT MARGIN
DECREASED BY
27 BPS TO 9,4%
17%
HEADLINE EARNINGS PER
SHARE INCREASED BY
17% TO 249 CENTS
18%
ADJUSTED HEADLINE
EARNINGS PER SHARE
INCREASED BY
18% TO 260 CENTS
39%
OPERATING CASH FLOW
INCREASED BY
39% TO R2,0 BILLION
18%
NET ASSET VALUE PER SHARE
INCREASED BY
18% TO 1 437 CENTS
INTRODUCTION
Despite the prevailing difficult economic and trading conditions, Super Group delivered an excellent set of results for the
year ended 30 June 2014. The growth in earnings is testimony to the Group's integrated mobility solutions strategy and has
been achieved despite the highly challenging market conditions and inflationary pressures experienced in both Southern
Africa and Australasia.
The logistics and transport industry in South Africa continued to be impacted by high fuel prices, the e-Toll cost in Gauteng,
weak consumer spending and significant industrial action across many sectors. Logistics into Africa remained robust with
an increase in South-bound activity.
NAAMSA reported a 2,1% decline in new vehicle sales for the year ended 30 June 2014, compared to the 8,8% growth
reported for the year ended 30 June 2013.
On 31 October 2013 Super Group listed its first issuance of its Domestic Medium Term Notes (DMTN) programme on the
JSE Limited (JSE) to the value of R471 million with the coupon rate being 3–month JIBAR plus 180 bps per annum for three
years, maturing on 31 October 2016. The approved Domestic Medium Term Programme totals R2 billion.
Super Group's subsidiary, SG Fleet Group Limited (SG Fleet), was listed on 4 March 2014 on the Australian Securities
Exchange. Super Group continues to be the largest shareholder, with a shareholding of 52,5% as at 30 June 2014.
FINANCIAL PERFORMANCE
Super Group reported an increase in revenue of 22,0% to R14 297 million (June 2013: R11 718 million). This performance was
mainly attributable to new contracts secured in most of the Supply Chain South Africa businesses, a strong performance
in the African Logistics cluster and increased sales in the Dealerships Division.
Operating profit increased by 18,6% to R1 345 million (June 2013: R1 134 million) driven by operational efficiencies, consistent
focus on cost controls within each of the operations as well as securing new contracts. Operating profit margin pressure,
with the exception of Dealerships, was experienced as a result of the competitive landscape, especially in the second half
of 2014, resulting in a margin decline of 27 basis points to 9,4% (June 2013: 9,7%).
Net finance costs increased by 51,8% to R102 million (June 2013: R67 million) as a result of acquisitions and an increase in
asset-based finance.
Profit before taxation was up by 16,5% to R1 242 million (June 2013: R1 067 million), directly as a consequence of the
improved operational profitability of the Group.
Basic earnings per share (EPS) and headline earnings per share (HEPS) for the year under review increased by 13,3%
to 249,2 cents (June 2013: 220.0 cents) and 16,9% to 248,7 cents (June 2013: 212,7 cents), respectively. Adjusted HEPS
increased by 17,9% to 260,0 cents (June 2013: 220,6 cents) on the basis that the B-BBEE expenditure, amortisation of
intangibles and acquisition costs amounting to 11,3 cents per share are excluded from HEPS.
The Group's Return on Net Operating Assets (RNOA), after tax, was 18,6% (June 2013: 20,8%) for the current financial year.
As at 30 June 2014, Super Group's net debt position decreased by 42,6% to R91 million (30 June 2013: R159 million).
The Group's total gearing as at 30 June 2014 was 1,7% (30 June 2013: 3,7%). The net asset value per share increased by
17,7% for the year to 1 437,1 cents at 30 June 2014 (30 June 2013: 1 220,5 cents). The Board is satisfied with the Group's
Statement of Financial Position.
Operating cash flow increased by 39,0% for the year to R2 005 million (June 2013: R1 442 million) with a working capital
outflow of R90 million compared to R286 million in the comparable year as a result of stringent working capital management.
Cash generated from operations, after working capital, increased by 65,7% to R1 915 million (June 2013: R1 155 million).
During the year under review, the company, through a subsidiary, repurchased 2 635 791 shares, totalling 0,8% of its issued
share capital, at an average share price of R25.05. The total consideration relating to these repurchases was R66 million.
These shares are held as treasury shares.
DIVISIONAL REVIEW
SUPPLY CHAIN
Year ended Year ended
R'000 Change % 30 June 2014 30 June 2013
Revenue 37,4 7 192 965 5 236 529
South Africa 38,2 6 525 257 4 723 142
African Logistics 30,1 667 708 513 387
Operating profit 28,5 508 175 395 504
South Africa 30,7 428 786 328 164
African Logistics 17,9 79 389 67 340
Operating margin (%) 7,1 7,6
South Africa 6,6 6,9
African Logistics 11,9 13,1
Profit before taxation 23,6 436 334 353 150
South Africa 20,0 360 615 300 412
African Logistics 43,6 75 719 52 738
Net operating assets 5,4 2 923 174 2 772 984
South Africa 5,3 2 446 482 2 323 375
African Logistics 6,0 476 692 449 609
The majority of Supply Chain South Africa's businesses delivered a strong performance given the current economic climate.
Most notably, Freight, Super Rent, SG Bulk and VsC Technologies reported strong topline growth. Safika Oosthuizens'
financial performance was strong despite being adversely impacted by a decline in Eskom coal delivery days and poor
weather conditions in the third quarter of the 2014 financial year. Digistics' results were impacted by e-Toll costs as well
as depressed consumer spending. Mobility's earnings reflected the poor real growth experienced in the automotive
sector. Sherwood International reported results in line with expectations, whilst Micor reported satisfactory results
despite lower import levels during the year. SG Convenience continued to grow its customer base and reported good
sales growth with the assistance of SG Gateway and the Super Group Brands Division. R&H Liquor Distributors, a liquor
distribution company to restaurants and hotels, was acquired and the business unit's results already contributed positively
to SG Convenience's results for the four months since 1 March 2014.
African Logistics experienced a reasonable increase in kilometres travelled. The Beira-Harare route continued to experience
good volume growth. The African Logistics' fleet is currently running at a slightly lower average fleet utilisation of 83% and
its business was impacted in the second half of the 2014 financial year by a decline in transport rates. The Rand weakness
over the year contributed positively to the results with a foreign exchange gain of R14,9 million (June 2013: R20,3 million).
FLEET SOLUTIONS
Year ended Year ended
R'000 Change % 30 June 2014 30 June 2013
Revenue 6,5 1 935 188 1 817 448
FleetAfrica (11,3) 382 843 431 648
SG Fleet 12,0 1 552 345 1 385 800
Operating profit 5,1 650 366 618 833
FleetAfrica (2,4) 122 519 125 496
SG Fleet 7,0 527 847 493 337
Operating margin (%) 33,6 34,0
FleetAfrica 32,0 29,1
SG Fleet 34,0 35,6
Profit before taxation 7,9 639 796 592 925
FleetAfrica 13,6 134 682 118 528
SG Fleet 6,5 505 114 474 397
Net operating assets 12,7 1 255 701 1 114 304
FleetAfrica 1,7 351 000 345 240
SG Fleet 17,6 904 701 769 064
FleetAfrica delivered an above expectation performance as a result of having secured a number of key corporate and public
sector contracts as well as having commenced delivery of consulting services in the fleet management arena to certain of
its customers. The operating profit margin remained above average mainly as a result of the ad hoc rental contracts.
SG Fleet achieved a marginally better than forecast profit before taxation as a result of lower fleet running costs. A number of
fleet management contracts that were won over the past two years continued to impact revenue growth positively. Revenue
growth during the first half of the 2014 financial year was however negatively impacted by the uncertainty around Fringe
Benefit Tax on novated leases. SG Fleet has experienced a good recovery in the novated lease business since December
2013. The United Kingdom business was re-shaped and a significant improvement in the risk profile of the business was
achieved. The New Zealand business pipeline has experienced growth with sizeable and attractive opportunities being
explored. The Australian Dollar against the Rand contributed positively to the consolidated results of Super Group by an
amount of R19,5 million (June 2013: R52,6 million).
DEALERSHIPS
Year ended Year ended
R'000 Change % 30 June 2014 30 June 2013
Revenue 11,1 5 150 402 4 637 791
Operating profit 15,3 139 032 120 610
Operating margin (%) 2,7 2,6
Profit before taxation 16,9 111 788 95 652
Net operating assets 82,8 877 911 480 230
Dealerships reported an excellent set of results despite challenging market conditions. New vehicle sales were flat but were
once again ahead of the market which recorded a 2,1% decline in new vehicle sales for the year to 30 June 2014. New vehicle
sales continued to slow during the year and reflect the effects of declining consumer spending, higher interest rates and
increased vehicle prices as a result of the weaker Rand. The division reported a 6,0% increase in total used vehicle sales for
the year, and aftermarket activity and contributions grew in line with expectations. This resulted in Dealerships improving
its operating margin to 2,7% (June 2013: 2,6%). The inclusion of the Great Wall Motors (GWM) South Africa distributorship,
which was acquired effective 1 May 2014, and two GWM dealerships acquired during the year, had no material impact on
the division's earnings.
SERVICES
The Services segment includes the Corporate, Insurance and Mauritius operations. The Mauritius and Insurance operations
performed slightly ahead of expectations. In addition, a revaluation surplus was recognised for a warehouse that has been
built for an external tenant. This property has been classified under investment properties, with the effect of the revaluation
surplus going through earnings.
PROSPECTS
Trading conditions in the South African economy are expected to remain challenging over the short to medium term.
Super Group is also anticipating an increase in competitive pricing pressures across all sectors and will continue focusing
on driving cost efficiencies throughout the Group. The weak Rand, higher fuel prices, inflationary pressures and high
unemployment rates will continue to hamper growth in South Africa. Nevertheless, a number of interesting investment
opportunities are being explored across the Group.
Supply Chain South Africa faces various challenges in generating good earnings growth in the current economic climate,
but its focus remains on its stated strategy of pursuing selected opportunities in higher growth niche markets. The bespoke
warehouses at Super Park have been completed and are fully operational. Subsequent to year end, Super Group acquired
Phola Coaches, a business providing passenger transport solutions for the mining, power generation and construction
industries, effective 1 July 2014.
African Logistics remains strategically positioned to benefit from any increased activity in sub-Saharan Africa. The business
continues to investigate new opportunities within this region.
FleetAfrica has secured a large parastatal contract. As a result, the current level of operating margin is expected to
decline to a more normalised level. It is a five year contract entailing the fleet management of approximately 3 500 light
commercial vehicles. The roll-out of the contract has already commenced. FleetAfrica has also commenced providing fleet
management consulting services to certain of its customers and this has been well received.
SG Fleet's contract tender pipeline remains healthy, with a number of large and exciting opportunities currently in the
market. A focus is also placed on converting new entrants to the business' outsourced model and fleet management
customers to full leasing services. SG Fleet is confident that with its businesses and geographies, technology and continued
innovation, a healthy customer conversion rate can be achieved.
The Dealerships Division is anticipating continuing difficult trading conditions. Super Group's acquisition of a 50,1% interest
in GWM South Africa strongly positions the Group in the cost-competitive light delivery vehicle and small passenger
vehicle sectors.
The culture of service excellence in all areas of its business remains important to Super Group's position as an innovative,
integrated mobility solutions company.
The Board remains of the opinion that Super Group should rather re-invest cash generated in acquisitions or the repurchase
of shares. Accordingly, a decision was taken not to declare a dividend for the year ended 30 June 2014.
The Reviewed Condensed Consolidated Annual Financial Results for the year ended 30 June 2014 will be available on the
Group's website after 17:00 on Monday, 18 August 2014 and the presentation to the investor community can be viewed on
the Group's website from Tuesday, 19 August 2014 after 11:00. Copies of the full announcement are available on request
from Nigel Redford, Company Secretary, nigel.redford@supergrp.com. The Group's website is www.supergroup.co.za.
On behalf of the Board
P Vallet P Mountford
Chairman of the company Chief Executive Officer
18 August 2014
Sandton
REVIEWED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The Condensed 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 of South Africa.
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 Condensed Consolidated Financial
Statements are in terms of IFRS and are consistent with those applied in the previous Consolidated Annual Financial
Statements, except for the standards and amendments to standards that became effective for the first time in Super
Group's financial year commencing 1 July 2013: IFRS 10 – Consolidated Financial Statements; IFRS 11 – Joint Arrangements;
IFRS 13 – Fair Value Measurement; IAS 19 (2011) – Employee Benefits; IAS 28 (2011) – Investments in Associates and Joint
Ventures; Amendments to IFRS 7 – Financial Instruments: Disclosures: Offsetting Financial Assets and Financial Liabilities;
Amendments to IAS 16 – Property, Plant and Equipment: Classification of servicing equipment; Amendment to IAS 32 –
Financial Instruments Presentation: Tax effect of distribution to holders of equity instruments; IAS 34 – Interim Financial
Reporting: Segment information for segment assets. The impact of adopting the above standards have had no material
effect on the Condensed Consolidated Financial Statements. These Condensed Consolidated Financial Statements have
been reviewed by the Group's auditors and their report is available for inspection at the Company's registered office.
The Condensed Consolidated Financial Statements are presented in Rand, which is the company's functional currency and
the Group's presentation currency.
These results have been compiled under the supervision of the Chief Financial Officer, Colin Brown, CA(SA), BCompt
(Hons), MBL.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
30 June 30 June
2014 2013
Reviewed Audited
R'000 R'000
Revenue 14 296 765 11 717 972
Trading profit before depreciation and amortisation 1 930 195 1 476 123
Depreciation and amortisation (579 641) (359 254)
Trading profit 1 350 554 1 116 869
Capital items (6 045) 17 147
Operating profit 1 344 509 1 134 016
Net finance charges (102 206) (67 329)
Profit before taxation 1 242 303 1 066 687
Income tax expense (304 609) (250 570)
Profit for the year 937 694 816 117
Profit for the year attributable to:
Non-controlling interests 208 524 179 433
Equity holders of Super Group 729 170 636 684
937 694 816 117
Other comprehensive income
Eff ect of foreign exchange 161 120 143 164
Hedge accounting – 1 989
Revaluation of land and buildings 23 652 14 445
Other comprehensive income taxation eff ect (5 838) (3 780)
Other comprehensive income for the year 178 934 155 818
Total comprehensive income for the year 1 116 628 971 935
Total comprehensive income for the year attributable to:
Non-controlling interests 274 784 212 718
Equity holders of Super Group 841 844 759 217
1 116 628 971 935
RECONCILIATION OF HEADLINE EARNINGS
Profit attributable to equity holders of Super Group 729 170 636 684
Capital items after tax (1 495) (21 145)
Impairment of intangible assets 23 226 2 892
(Reversal of impairment)/impairment of property, plant and equipment
and full maintenance lease vehicles (400) 34 462
Impairment of goodwill 1 350 3 948
Profit on sale of property, plant and equipment (3 791) (20 072)
Negative goodwill on business combination – (38 377)
Fair value adjustment to investment property (14 340) –
Taxation eff ect of capital items (2 675) (4 861)
Non-controlling interest eff ect of capital items (4 865) 863
Headline earnings for the year 727 675 615 539
Earnings per share (cents)
Basic 249,2 220,0
Diluted 241,9 211,7
Headline earnings per share (cents)
Basic 248,7 212,7
Diluted 241,4 204,7
RECONCILIATION OF ADJUSTED EARNINGS
Headline earnings for the year 727 675 615 539
Acquisition costs after tax 5 561 5 989
B-BBEE costs after tax 6 805 6 787
Amortisation of intangible assets arising on business combinations after tax 20 774 10 198
Adjusted headline earnings for the year 760 815 638 513
Adjusted headline earnings per share (cents)
Basic 260,0 220,6
Diluted 252,4 212,3
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 30 June
2014 2013
Reviewed Audited
R'000 R'000
ASSETS
Non-current assets
Property, plant and equipment 2 865 531 2 515 103
Investment property 120 400 64 716
Full maintenance lease assets 554 728 545 247
Intangible assets 199 566 241 831
Goodwill 1 887 982 1 738 323
Investments and other non-current assets 43 650 3 839
Deferred tax assets 371 597 314 469
Current assets 6 127 348 5 133 374
Asset held-for-sale 60 000 6 100
Inventories 1 367 803 840 112
Trade receivables 1 783 680 1 696 839
Sundry receivables 858 999 695 388
Insurance-related assets 16 687 22 390
Cash and cash equivalents 2 040 179 1 872 545
Total assets 12 170 802 10 556 902
EQUITY AND LIABILITIES
Capital and reserves
Capital and reserves attributable to equity holders of Super Group 4 268 796 3 532 396
Non-controlling interests 952 693 751 917
Total equity 5 221 489 4 284 313
Liabilities
Fund reserves 338 948 346 740
Deferred tax liabilities 232 659 254 289
Full maintenance lease liabilities 210 744 146 687
Non-current 101 009 41 515
Current 109 735 105 172
Interest-bearing borrowings 1 920 485 1 884 619
Non-current 1 645 247 1 550 438
Current 275 238 334 181
Non-controlling interest put options and other financial liabilities 222 152 209 339
Provisions 475 756 413 496
Non-current 155 011 –
Current 320 745 413 496
Insurance-related liabilities 37 810 45 511
Trade and other payables 3 428 209 2 852 456
Income tax payable 82 550 119 452
Total equity and liabilities 12 170 802 10 556 902
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
Year ended Year ended
30 June 30 June
2014 2013
Reviewed Audited
R'000 R'000
Cash flows from operating activities
Operating cash flow 2 004 716 1 441 778
Working capital outflow (90 175) (286 412)
Cash generated from operations 1 914 541 1 155 366
Finance costs paid (222 400) (154 143)
Investment income and interest received 123 954 81 501
Income tax paid (293 200) (349 011)
Dividend paid to non-controlling interest (255 588) –
Net cash generated from operating activities 1 267 307 733 713
Cash flows from investing activities
Net additions to plant and equipment (650 805) (239 948)
Net additions to land, buildings and leasehold improvements (114 206) (177 924)
Net additions to full maintenance lease assets (68 789) (141 747)
Net additions to intangible assets (21 535) (19 896)
Proceeds on disposal of asset held-for-sale 6 100 –
Acquisition of businesses (net of cash acquired) (18 147) (217 619)
Additional investment in existing subsidiary (334 639) –
Other investing activities (85 097) (31 178)
Net cash flow from investing activities (1 287 118) (828 312)
Cash flows from financing activities
Net share repurchases (64 338) (59 127)
Net interest-bearing borrowings raised 110 070 183 958
Net full maintenance lease borrowings raised/(repaid) 52 510 (25 264)
Net cash flow from financing activities 98 242 99 567
Net increase in cash and cash equivalents 78 431 4 968
Net cash and cash equivalents at beginning of the year 1 872 545 1 776 430
Eff ect of foreign exchange on cash and cash equivalents 89 203 91 147
Cash and cash equivalents at end of the year 2 040 179 1 872 545
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Non-
Share controlling
Share Share Other Retained buyback interest Total
capital premium reserves earnings reserve Total (NCI) equity
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Audited balance at 30 June 2012 315 334 1 746 798 592 860 1 057 030 (691 899) 3 020 123 380 522 3 400 645
Changes in equity for 2013 year
Other comprehensive income – – 122 533 – – 122 533 33 285 155 818
Translation adjustment – – 110 541 – – 110 541 32 623 143 164
Effective portion of hedge – – 1 327 – – 1 327 662 1 989
Revaluation of land and buildings – – 14 445 – – 14 445 – 14 445
Taxation effect of revaluation of
land and buildings – – (3 780) – – (3 780) – (3 780)
Profit for the year – – – 636 684 – 636 684 179 433 816 117
Total comprehensive income
for the year – – 122 533 636 684 – 759 217 212 718 971 935
Transfer from contingency reserve – – (1 064) 1 064 – – – –
Realisation of revaluation reserve
through depreciation – – (99) 99 – – – –
Realisation of revaluation
reserve through sale of
revalued properties – – (996) 996 – – – –
Share-based payment
reserve movement – – – 19 310 – 19 310 551 19 861
South African share options
exercised – – – (60 601) – (60 601) (230) (60 831)
Non-controlling interest
put options movement – – – (207 356) – (207 356) – (207 356)
Share buybacks – – – – 1 703 1 703 – 1 703
NCI recognised in respect of
subsidiaries acquired – – – – – – 158 356 158 356
Audited balance at 30 June 2013 315 334 1 746 798 713 234 1 447 226 (690 196) 3 532 396 751 917 4 284 313
Changes in equity for 2014 year
Other comprehensive income – – 112 674 – – 112 674 66 260 178 934
Translation adjustment – – 94 860 – – 94 860 66 260 161 120
Revaluation of land and buildings – – 23 652 – – 23 652 – 23 652
Taxation effect of revaluation of
land and buildings – – (5 838) – – (5 838) – (5 838)
Profit for the year – – – 729 170 – 729 170 208 524 937 694
Total comprehensive income
for the year – – 112 674 729 170 – 841 844 274 784 1 116 628
Realisation of revaluation reserve
through depreciation – – (1 136) 1 136 – – – –
Realisation of revaluation
reserve through sale of
revalued properties – – (13 031) 13 031 – – – –
Share-based payment reserve
movement – – – 18 605 – 18 605 1 783 20 388
South African share options
exercised – – – (202 003) – (202 003) (180) (202 183)
South African B-BBEE good
leaver options exercised – – – (1 936) – (1 936) (9) (1 945)
Share buybacks – – – – 199 790 199 790 – 199 790
Deferred tax recorded directly in
equity on movement in options – – – 93 676 – 93 676 1 748 95 424
Non-controlling interest put
options movement – – – 28 032 – 28 032 – 28 032
Dividends paid – – – – – – (255 588) (255 588)
Transactions with equity partners*# – – – (96 576) – (96 576) 209 030 112 454
Australian share options exercised* – – – (116 880) – (116 880) (116 413) (233 293)
Australian initial public offering
transaction costs* – – – (28 152) – (28 152) (28 039) (56 191)
NCI recognised in respect of
subsidiaries acquired – – – – – – 113 660 113 660
Reviewed balance
at 30 June 2014 315 334 1 746 798 811 741 1 885 329 (490 406) 4 268 796 952 693 5 221 489
* Refer to the note on the increase in existing shareholding in subsidiaries.
# Movement in retained earnings and non-controlling interest resulting from the change in percentage holding.
OPERATING SEGMENTS
Supply Chain Services and
Super Group Supply Chain South Africa African Logistics Fleet Solutions FleetAfrica SG Fleet Dealerships inter-company eliminations
Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended
30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June
2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2014 2014 2013 2014 2013
Reviewed Audited Reviewed Audited Reviewed Audited Reviewed Audited Reviewed Audited Reviewed Audited Reviewed Audited Reviewed Audited Reviewed Audited
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Revenue 14 296 765 11 717 972 7 192 965 5 236 529 6 525 257 4 723 142 667 708 513 387 1 935 188 1 817 448 382 843 431 648 1 552 345 1 385 800 5 150 402 4 637 791 18 210 26 204
South Africa 12 169 135 9 813 987
Australia 1 483 768 1 327 726
Africa and other 643 862 576 259
Depreciation and amortisation (579 641) (359 254) (398 808) (199 495) (361 570) (179 281) (37 238) (20 214) (155 297) (138 836) (90 446) (68 851) (64 851) (69 985) (13 971) (9 801) (11 565) (11 122)
Net operating expenditure –
excluding capital items (12 366 570) (10 241 849) (6 287 324) (4 653 166) (5 734 376) (4 224 063) (552 948) (429 103) (1 129 762) (1 059 528) (169 878) (237 301) (959 884) (822 227) (4 998 818) (4 507 380) 49 334 (21 775)
Trading profit 1 350 554 1 116 869 506 833 383 868 429 311 319 798 77 522 64 070 650 129 619 084 122 519 125 496 527 610 493 588 137 613 120 610 55 979 (6 693)
Capital items (6 045) 17 147 1 342 11 636 (525) 8 366 1 867 3 270 237 (251) – – 237 (251) 1 419 – (9 043) 5 762
Operating profit 1 344 509 1 134 016 508 175 395 504 428 786 328 164 79 389 67 340 650 366 618 833 122 519 125 496 527 847 493 337 139 032 120 610 46 936 (931)
Share of profit of equity-accounted
investee 1 082 1 143 – – – – – – – – – – – – – – 1 082 1 143
Net finance costs (103 288) (68 472) (71 841) (42 354) (68 171) (27 752) (3 670) (14 602) (10 570) (25 908) 12 163 (6 968) (22 733) (18 940) (27 244) (24 958) 6 367 24 748
Profit before taxation 1 242 303 1 066 687 436 334 353 150 360 615 300 412 75 719 52 738 639 796 592 925 134 682 118 528 505 114 474 397 111 788 95 652 54 385 24 960
ASSETS
Non-current assets
Property, plant and equipment 2 865 531 2 515 103 1 927 450 1 622 639 1 594 716 1 311 729 332 734 310 910 12 489 8 747 469 276 12 020 8 471 225 785 208 832 699 807 674 885
Investment property 120 400 64 716 – – – – – – – – – – – – – – 120 400 64 716
Full maintenance lease assets 554 728 545 247 – – – – – – 554 728 545 247 397 210 380 383 157 518 164 864 – – - -
Intangible assets 199 566 241 831 144 596 204 825 144 596 204 825 – – 49 149 28 727 – – 49 149 28 727 499 1 118 5 322 7 161
Goodwill 1 887 982 1 738 323 443 598 419 989 395 320 375 098 48 278 44 891 1 338 774 1 215 684 87 822 87 822 1 250 952 1 127 862 105 610 102 650 – –
Investments and other
non-current assets 43 650 3 839 5 208 – 5 208 – – – – – – – – – 3 992 – 34 450 3 839
Current assets
Asset held-for-sale 60 000 6 100 – – – – – – – – – – – – – – 60 000 6 100
Inventories 1 367 803 840 112 324 313 181 207 290 317 156 985 33 996 24 222 47 212 83 707 689 28 617 46 523 55 090 996 278 570 398 – 4 800
Trade receivables 1 783 680 1 696 839 1 115 664 1 121 252 1 011 646 1 021 570 104 018 99 682 434 660 357 284 86 754 103 356 347 906 253 928 218 162 134 636 15 194 83 667
Sundry receivables 858 999 695 388 531 099 537 234 507 776 510 660 23 323 26 574 86 752 94 038 16 697 28 538 70 055 65 500 19 877 5 834 221 271 58 282
Insurance-related assets 16 687 22 390 – – – – – – – – – – – – – – 16 687 22 390
Intercompany trade receivables – – 10 341 11 223 9 607 10 522 734 701 289 867 289 867 – – 557 747 (11 187) (12 837)
SEGMENT ASSETS 9 759 026 8 369 888 4 502 269 4 098 369 3 959 186 3 591 389 543 083 506 980 2 524 053 2 334 301 589 930 629 859 1 934 123 1 704 442 1 570 760 1 024 215 1 161 944 913 003
South Africa 7 072 637 5 901 870
Australia 1 806 961 1 607 754
Africa and other 879 428 860 264
LIABILITIES
Non-current liabilities
Long-term borrowings 1 746 256 1 591 953 491 776 403 869 491 776 403 869 – – 424 156 500 339 67 044 19 666 357 112 480 673 – – 830 324 687 745
Non-controlling interest put options
and other financial liabilities 222 152 209 339 222 152 209 339 222 152 209 339 – – – – – – – – – – – –
Fund reserves 338 948 346 740 – – – – – – 338 948 346 740 42 912 76 826 296 036 269 914 – – – –
Long-term provisions 155 011 – – – – – – – 145 576 – – – 145 576 – – – 9 435 –
Current liabilities
Short-term borrowings 384 973 439 353 255 215 285 614 255 215 285 614 – – 119 988 132 952 41 053 58 191 78 935 74 761 – – 9 770 20 787
Trade and other payables and
provisions 3 748 954 3 265 952 1 549 747 1 302 196 1 488 443 1 250 077 61 304 52 119 679 791 868 108 93 524 202 644 586 267 665 464 1 295 370 903 671 224 046 191 977
Insurance-related liabilities 37 810 45 511 – – – – – – – – – – – – – – 37 810 45 511
Intercompany trade payables – – 24 140 23 189 19 053 17 937 5 087 5 252 4 039 5 149 4 039 5 149 – – 6 851 (28 185) (29 189)
SEGMENT LIABILITIES 6 634 104 5 898 848 2 543 030 2 224 207 2 476 639 2 166 836 66 391 57 371 1 712 498 1 853 288 248 572 362 476 1 463 926 1 490 812 1 295 376 904 522 1 083 200 916 831
South Africa 4 987 063 4 160 435
Australia 1 459 627 1 493 630
Africa and other 187 414 244 783
Net capex 855 335 579 515 639 847 212 717 600 303 212 937 39 544 (220) 97 376 158 193 44 986 93 005 52 390 65 188 11 758 76 888 106 354 131 717
South Africa 763 401 514 547
Australia 52 390 65 188
Africa and other 39 544 (220)
Net operating assets 5 825 949 5 072 222 2 923 174 2 772 984 2 446 482 2 323 375 476 692 449 609 1 255 701 1 114 304 351 000 345 240 904 701 769 064 877 911 480 230 769 163 704 704
BUSINESS COMBINATIONS
Purchase
Interest consideration
Subsidiaries and Nature of Operating Date acquired transferred
businesses acquired business segment acquired (%) R'000
GWM (S.A.) Proprietary Limited Distributorship Dealerships 1 May 2014 50,1 127 877
Supply Chain
South Africa
Logistics and and 1 March 2014 and
Other acquisitions Dealerships Dealerships 7 September 2013 100,0 50 671
Total purchase consideration 178 548
GWM (S.A.)
Fair value of assets Proprietary Other
acquired and liabilities assumed Limited acquisitions Total
at date of acquisition: R'000 R'000 R'000
Assets
Property, plant and equipment 16 818 2 005 18 823
Intangible assets 66 6 018 6 084
Goodwill 2 959 21 572 24 531
Equity-accounted investee 3 992 – 3 992
Deferred tax asset 4 391 – 4 391
Inventories 326 418 66 680 393 098
Trade and other receivables 102 799 8 646 111 445
Cash and cash equivalents 95 572 4 829 100 401
553 015 109 750 662 765
Liabilities
Deferred tax liabilities – 1 685 1 685
Interest-bearing borrowings – 2 466 2 466
Trade and other payables 284 215 54 340 338 555
Income tax payable 207 – 207
Provisions 37 858 588 38 446
322 280 59 079 381 359
Acquirees' carrying amount at acquisition 230 735 50 671 281 406
Less: Non-controlling interests (113 660) – (113 660)
Net assets acquired 117 075 50 671 167 746
Deferred contingent purchase consideration 10 802 – 10 802
Purchase consideration transferred 127 877 50 671 178 548
Equity instruments (2 216 076 ordinary shares) (60 000) – (60 000)
Cash acquired (95 572) (4 829) (100 401)
Cash (inflow)/outfow (27 695) 45 842 18 147
The GWM SA Distributorship acquisition agreement gives rise to a deferred contingent purchase consideration payable on
28 February 2017. The Group has estimated that this will be a receivable of R10,802 million, calculated based on estimated
future profits and discounted using an (after tax) interest rate of 5.4%. This acquisition positions the Group in the cost-
competitive light delivery vehicle and small passenger vehicle sectors.
The other acquisitions will enable the Group to bolster the respective Dealership and Supply Chain South Africa divisions.
The non-controlling interests have been calculated using the present ownership instruments' proportionate share in the
recognised amounts of the acquiree's identifiable net assets.
Goodwill has been recognised on the acquisition of the GWM SA Distributorship and the other immaterial acquisitions
amounting to R2,959 million and R21,572 million respectively.
Goodwill is attributable mainly to the skills and technical talent of the workforce and synergies expected to be achieved
from integrating the acquired businesses into the Group's various operations. None of the goodwill recognised is expected
to be deductible for tax purposes.
The acquisition related costs of R1,758 million relating to these acquisitions are included in the consolidated statement of
comprehensive income.
GWM (S.A.)
Proprietary Other
Impact of the acquisitions Limited acquisitions Total
on the results of the Group R'000 R'000 R'000
From the dates of acquisition, the acquired
businesses contributed:
Revenue 30 875 166 940 197 815
Attributable (loss)/profit (2 156) 957 (1 199)
Net costs on increase in existing shareholding in subsidiaries:
During the year, CHAMP Ventures (CV), an Australian private equity firm, explored alternatives for it's 41,36% non-controlling
interest in SG Fleet. This was consistent with the shareholding arrangements between CV and the Group entered into in 2011.
In order to facilitate the exit of CV's shareholding in SG Fleet, an initial public offering (IPO) of ordinary shares was executed
by way of an offer for sale of existing shares in SG Fleet and a listing of SG Fleet Group on the Australian Securities
Exchange. This transaction occurred on 4 March 2014. The Group held 50,6% of the shares after this transaction.
This transaction consisted of the following events that resulted in the change of the Group's percentage holding in SG Fleet:
- The current executive share option scheme vested and shares were issued accordingly;
- A dividend of AUD67,4 million was declared of which AUD47,0 million was funded by free cash flows and the remaining
AUD20,4 million was funded via the proceeds from the issue of shares;
- The Group purchased additional 3,5% shares from CV and SG Fleet management shareholders for AUD18,0 million;
- The redemption of the existing Redeemable Preference Shares of AUD20,5 million was funded via the proceeds from
the issue of shares;
- Transaction costs of AUD8,24 million were incurred on the issue of shares and consequently recorded in equity resulting
in a deferred tax asset of AUD2,471 million being raised;
- SG Fleet issued shares to the value of AUD4,6 million to the Group's staff in respect of a bonus.
Subsequent to the IPO on March 2014, Super Group purchased an additional 1,94% of shares in SG Fleet for AUD8,256 million
resulting in a holding of 52,54% in SG Fleet.
The acquisition related costs of R4,9 million relating to these acquisitions are included in the consolidated statement of
comprehensive income.
Impact on Condensed Consolidated Statement
of Financial Position and Condensed Consolidated Statement IPO Subsequent Total
of Changes in Equity R'000 R'000 R'000
Non-controlling interests: 65 432 (23 241) 42 191
Transactions with equity partners 232 271 (23 241) 209 030
Options exercised (116 413) – (116 413)
Transaction costs (28 039) – (28 039)
Bonus expense included in profit or loss for the year (22 387) – (22 387)
Retained earnings: (205 851) (58 234) (264 085)
Transactions with equity partners (38 342) (58 234) (96 576)
Options exercised (116 880) – (116 880)
Transaction costs (28 152) – (28 152)
Bonus expense included in profit or loss for the year (22 477) – (22 477)
Interest-bearing borrowings (89 439) – (89 439)
Deferred tax (23 306) – (23 306)
Cash outflow (253 164) (81 475) (334 639)
SALIENT FEATURES
Year ended Year ended
30 June 30 June
2014 2013
Reviewed Audited
R'000 R'000
1. Interest-bearing borrowings
Australian interest-bearing borrowings 333 399 486 604
Asset-based finance 925 811 896 840
Corporate bond 477 060 –
Property and other borrowings 184 215 501 175
Interest-bearing borrowings 1 920 485 1 884 619
2. Share statistics
Total issued less treasury shares ('000) 297 039 289 415
Weighted number of shares ('000) 292 565 289 394
Diluted weighted number of shares ('000) 301 422 300 775
Net asset value per share (cents) 1 437,1 1 220,5
3. Capital commitments
Authorised but not yet contracted for capital commitments,
excluding full maintenance lease assets 562 135 508 585
Capital commitments will be funded from normal operating cash flows
and the utilisation of existing borrowings facilities.
4. Related party transactions
The Group, in the ordinary course of business, entered into various sales
and purchase transactions on an arms' length basis with related parties.
5. Subsequent events
Other than the matters disclosed, the directors are not aware of any matter
or circumstance arising subsequent to the reporting date up to the date of this
report, which will aff ect these results.
6. Significant events or transactions
GWM (S.A.) Proprietary Limited acquisition
The Group purchased the GWM Distributorship during the year for
R127,9 million. The Statement of Financial Position of the Group has been
impacted by increases in Inventories of R326,4 million, Trade and other
receivables of R102,8 million and Trade and other payables of R284,2 million
resulting from this acquisition.
Digistics and Safi ka Oosthuizens' annualisation of earnings
The Statement of Comprehensive Income for the year ended 30 June 2013
included nine months and four months of trading for the Digistics and
Safi ka Oosthuizens businesses respectively, whilst 12 months' worth of
trading has been included in the financial year ended 30 June 2014.
Hierarchy
Level 2 Level 3
R'000 R'000 Valuation technique
7. Fair value
Property, plant and 922 545 Valuation performed by Onyx valuation services.
equipment – land, buildings The valuation model considers the present value of
and leasehold improvements net cash flows to be generated from these properties,
taking into account expected rental growth rate, void
period, occupancy rate, lease incentive costs such as
rent-free periods and other costs not paid by tenants.
The expected net cash flows are discounted using
risk-adjusted discount rates. Among other factors,
the discount rate estimation considers the quality of
a building and its location (prime vs secondary), tenant
credit quality and lease terms.
Investment properties 120 400
Deferred contingent 10 802 This valuation was performed using the present value
purchase consideration of expected future profits, discounted using a rate
of 5,4% after taxation.
FEC Assets 44 820 The fair values are based on broker quotes. Similar
contracts are traded in an active market and reflect
the actual transactions in similar instruments.
FEC Liabilities 63 023
Digistics put option 119 317 This put option has been based on the average
non-controlling interest non-proportionate share
of the profit after tax for the last three financial years
preceding 1 October 2017 of the put option at a price
earnings ratio of 6,5. The present value has been
determined using an after tax discount rate of 5,4%.
Safika Oosthuizens 60 007 This put option is based on a fair market value of
put option the business at 1 March 2016 minus 15%. The present
value has been determined using an after tax discount
rate of 5,4%.
COMPANY INFORMATION
SUPER GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1943/016107/06
ISIN: ZAE000161832 Share code: SPG
("Super Group" or "the Group" or "the company")
Directors:
Executive: P Mountford (Chief Executive Officer) and C Brown (Chief Financial Officer)
Non-Executive: P Vallet (Chairman of the company), N Davies*, J Newbury*, V Chitalu*#, D Rose* and Dr E Banda*
*Independent #Zambian
Company Secretary:
N Redford
Registered office:
27 Impala Road, Chislehurston, Sandton, 2196
Transfer secretaries:
Computershare Investor Services Proprietary Limited
(Registration number 2004/003647/07)
Ground Floor, 70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Sponsor:
Deutsche Securities (SA) Proprietary Limited
(Registration number 1995/011798/07)
3 Exchange Square, 87 Maude Street, Sandton, 2196
Investor Relations:
Keyter Rech Investor Solutions CC
(Registration number 2008/156985/23)
5 2nd Road, Hyde Park, 2196
ADR information:
ISIN US86802E2072
CUSIP 86802E207
Structure Sponsored Level 1 ADR
Exchange OTC
Ratio (ADR:ORD) 1:5
Deutsche Bank Trust Company Americas
c/o American Stock Transfer & Trust Company
Peck Slip Station
PO Box 2050
New York, NY 10272-2050
Email: DB@amstock.com
Shareholder Service (toll-free) Tel: (866) 706-0509
Shareholder Service (international) Tel: (718) 921-8124
www.amstock.com
www.supergroup.co.za
Date: 18/08/2014 04:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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