Wrap Text
Audited Group results for the 52 weeks ended 29 June 2014 and cash dividend declaration and changes to the board
WOOLWORTHS HOLDINGS LIMITED
Registration number:
1929/001986/06
Share code: WHL
ISIN: ZAE000063863
Audited Group results for the 52 weeks ended 29 June 2014 and cash dividend declaration and changes to the board
FINANCIAL HIGHLIGHTS ON A 52:52 WEEK BASIS
REVENUE
+14.4%
ADJUSTED PROFIT BEFORE TAX
+20.1%
ADJUSTED HEADLINE EARNINGS PER SHARE
+17.1%
RETURN ON EQUITY
46.7%
Commentary
In line with industry practice, the group operates on a 52-week retail calendar basis. To realign the calendar, the
2013 financial year included a 53rd week and the group's earnings were approximately 2.0% higher last year as
a result of this additional week. To aid comparison this commentary is based on pro-forma 52-week financial
information for the prior period.
Group sales for the 52 weeks to 29 June 2014 increased 14.4% and adjusted profit before tax increased 20.1%.
Headline earnings per share ("HEPS") increased by 9.0% to 365.2 cents per share and adjusted HEPS ("aHEPS")
grew 17.1% to 398.0 cents per share. aHEPS excludes transaction costs of R182 million relating to the acquisition
of David Jones Limited and the minority interest in Country Road Limited and the net impact of unrealised
foreign exchange losses of R139 million - all stated before tax. June 2013 adjustments included transaction and
integration costs of R77 million relating to the Witchery Group acquisition, unrealised foreign exchange gains of
R67 million and store restructuring costs of R43 million (all stated before tax).
Earnings per share ("EPS") increased 10.5% to 367.3 cents.
Woolworths
Clothing and General Merchandise ("C&GM")
C&GM sales grew 9.0%. South African Clothing sales (including Country Road Group's sales in South Africa) grew
ahead of the market by 10.6% with a price movement of 8.8% with clothing sales in comparable stores growing
8.6% and general merchandise growing 7.1% (4.2% in comparable stores). Africa also performed well, with the
acquisition of the former franchise operations in Botswana, Namibia, Swaziland and Ghana adding scale to our
operations in the sub-Saharan region.
Gross profit margin in C&GM grew 0.3% to 46.7% with sourcing gains offset to a degree by higher investment in
entry price points and in-season promotions. Adjusted profit before tax grew 11.7% and return on sales increased
0.4% to 17.6%.
Store costs increased 12.6% with the addition of 4.0% net footage. Other operating costs (excluding the impact of
unrealised foreign exchange movements and last year's restructuring costs) were well controlled, growing by just 2.5%.
Food
Food sales grew well ahead of the market at 14.8% with price movement of 7.9%. Our bigger store 'Supermarket'
strategy continues to perform well and is encouraging our customers to complete their shop and spend more with us.
Sales in comparable stores grew by 10.7%. Gross profit margin reduced 0.3% to 25.3% as a result of investment in
price and increased promotions. Adjusted profit before tax grew 20.7% and return on sales improved 0.3% to 6.4%.
Store costs increased 12.6% with the addition of 8.1% net footage. Other operating costs (excluding the impact of
unrealised foreign exchange movements and last year's restructuring costs) were well controlled, growing by 7.5%.
Country Road group
With the inclusion of the Witchery Group for the full period (compared to three quarters in the prior period) sales
increased 20.3% in Australian dollar terms. Sales in comparable stores increased 8.0% and net space (excluding
the acquisition) increased by 4.2% in Australasia. The launch of Witchery and Mimco in South Africa was well
received and presents a significant new opportunity for growth of these premium brands.
Gross margins were maintained and operating costs were well controlled resulting in a 46.9% increase in
adjusted profit before tax from A$64 million to A$94 million. Earnings before interest and tax ("EBIT") margin
increased by 2.0% to 11.5% and return on equity increased by 0.2% to 30.4%.
Woolworths Financial Services
The business experienced growth in the average debtors book of 13.7%, with the impairment rate (including collection
costs) increasing to 4.8% (June 2013: 3.0%), well below industry averages. Net interest income grew 17.7% with non-
interest revenue up 13.2%. Operating costs were well controlled, up 7 .2%. Profit before tax was flat as a result of the
higher impairment charge although return on equity remains above the targeted 22.0% at 24.3% (June 2013: 27.6%).
Outlook
On 1st August 2014, the acquisition of David Jones Limited ("David Jones") was completed, transforming the
business into a leading southern hemisphere retailer with combined revenue of R58 billion from over 1,150 stores
across 16 countries. The group's enlarged scale will drive sourcing economies, improving value for the customer
and increasing overall profitability. The key initiatives are expected to deliver synergies of at least R1.3 billion
(A$130 million) per annum by year five.
Subsequent to the year-end, we also acquired the 12% minority interests of the Country Road Group that we did
not already own. This acquisition allows us to extract further benefits from the combination of services
across our two wholly-owned Australian subsidiaries.
We believe that economic conditions in South Africa will remain constrained, especially in the lower and middle
income segments of the market where consumer debt levels remain under pressure. However the upper income
segment in which we operate continues to show resilience. Trading for the first eight weeks of the new financial
year has been positive.
In Australia, where consumer confidence remains cautious, there are signs of an improved retail market and we
expect sales to be ahead of the market.
Any reference to future financial performance included in this statement has not been reviewed and reported on
by the company's external auditors and does not constitute an earnings forecast.
Rights offer
As previously announced, the company intends to undertake a Rights Offer. A further announcement in this regard
shall follow in due course.
Changes to the Board of Directors
After serving 10 years as a non-executive director and Chairman of the Social and ethics committee, Chris Nissen will
retire from the board at the conclusion of the November 2014 Annual general meeting. His contribution to the board
has been significant in overseeing the successful implementation of the transformation process and the establishment
of the Social and ethics committee. The board expresses its gratitude to Chris for his contribution to the business.
Other changes to the Board of Directors announced during the year were as follows:
Norman Thomson and Lindiwe Bakoro both retired from the board at the conclusion of the Annual General Meeting
on 26 November 2013 and Reeza Isaacs was appointed to the board as Finance Director on the same date.
The Chief Operating Officer, Sam Ngumeni, was appointed to the board on 12 February 2014 and both Hubert
Brody and Nombulelo Moholi were appointed to the board as non-executive directors on 1 July 2014.
S N Susman I Moir
Chairman Group chief executive officer
Cape Town, 27 August 2014
Dividend Declaration
Notice is hereby given that the directors have declared a final gross cash dividend of 150.5 cents (127.925 cents net
of dividend withholding tax) per ordinary share, bringing the total dividend for the 52 weeks ended 29 June 2014 to
251.5 cents per share. The dividend has been declared from income reserves and a dividend withholding tax of 15%
will be applicable to all shareholders who are not exempt. The company has no STC credits to be utilised to offset
the 15% dividend withholding tax.
The issued share capital at the declaration date is 847 004 975 ordinary shares and 89 192 746 preference shares.
The salient dates for the dividend will be as follows:
Last day of trade to receive a dividend Friday, 5 September 2014
Shares commence trading "ex" dividend Monday, 8 September 2014
Record date Friday, 12 September 2014
Payment date Monday, 15 September 2014
Share certificates may not be dematerialised or rematerialised between Monday, 8 September 2014 and Friday,
12 September 2014, both days inclusive.
A final gross cash dividend of 150.5 cents (127.925 cents net of dividend withholding tax) per preference share,
bringing the total dividend for the 52 weeks ended 29 June 2014 to 251.5 cents per share, will be paid to the
beneficiaries of the Woolworths Employee Share Ownership Scheme on Monday, 15 September 2014.
Thobeka Sishuba-Mashego
Group secretary
Cape Town, 27 August 2014
Disclaimer
This announcement does not constitute an offer of, or an invitation to purchase, any securities of the Company in any jurisdiction.
This announcement does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States.
The securities mentioned herein (the "Securities") have not been, and will not be, registered under the United States Securities Act of 1933
(the "Securities Act"). The Securities may not be offered or sold in the United States absent registration or an applicable exemption from,
or in a transaction not subject to, the registration requirements of the Securities Act. There will be no public offer of the Securities in
the United States, Canada and Japan.
GROUP STATEMENT OF COMPREHENSIVE INCOME
Restated*
52 weeks 53 weeks
to 29 Jun to 30 Jun
2014 2013 %
Notes Rm Rm change
Revenue 39 944 35 399 12.8
Turnover 39 707 35 227 12.7
Cost of sales 24 209 21 674 11.7
Gross profit 15 498 13 553 14.4
Other revenue 125 115 8.7
Expenses 11 680 10 199 14.5
Store costs 10.3 7 614 6 639 14.7
Other operating costs 10.3 4 066 3 560 14.2
Operating profit 3 943 3 469 13.7
Investment income 112 57 96.5
Finance costs 136 68 100.0
Profit before earnings from joint ventures and associate 3 919 3 458 13.3
Earnings from joint ventures 181 180 0.6
Earnings from associate 4 9 (55.6)
Profit before tax 4 104 3 647 12.5
Tax 1 114 1 009 10.4
Profit for the year 2 990 2 638 13.3
Other comprehensive income:
Amounts that may be reclassified to profit or loss
Net fair value adjustments on financial instruments, after tax (182) 88
Exchange differences on translation of foreign subsidiaries 177 92
Amounts that may not be reclassified to profit or loss
Post-retirement medical benefit liability-actuarial (loss)/gain, after tax 10.1 (6) 22
Other comprehensive income for the year (11) 202
Total comprehensive income for the year 2 979 2 840
Profit attributable to: 2 990 2 638
Shareholders of the parent 2 888 2 597
Non-controlling interests 102 41
Total comprehensive income attributable to: 2 979 2 840
Shareholders of the parent 2 868 2 770
Non-controlling interests 111 70
Reconciliation of headline earnings
Earnings attributable to shareholders of the parent 2 888 2 597 11.2
BEE preference dividend 103 62 66.1
Basic earnings 2 785 2 535 9.9
(Profit)/loss on disposal of property, plant and equipment, intangible
assets and investment properties (35) 15
Net impairment of property, plant and equipment and intangible assets 16 12
Tax impact of adjustments 3 (8)
Headline earnings 2 769 2 554 8.4
Abnormal foreign exchange related loss/(gain) 139 (67)
Transaction and integration costs 182 77
Restructuring costs – 43
Tax impact of adjustments (72) (15)
Adjusted headline earnings 3 018 2 592 16.4
Earnings per share (cents) 2 367.3 337.9 8.7
Headline earnings per share (cents) 365.2 340.4 7.3
Adjusted headline earnings per share (cents) 398.0 345.5 15.2
Diluted earnings per share (cents) 2 362.7 331.3 9.5
Diluted headline earnings per share (cents) 360.6 333.8 8.0
Adjusted diluted headline earnings per share (cents) 393.0 338.7 16.0
Number of shares in issue (millions) 759.5 753.4 0.8
Weighted average number of shares in issue (millions) 758.2 750.3 1.1
*Certain comparative amounts shown do not correspond to the 2013 Annual Financial Statements and reflect
adjustments made. Refer to note 10.
GROUP STATEMENT OF FINANCIAL POSITION
Restated** Restated**
At 29 Jun At 30 Jun At 25 Jun
2014 2013 2012
Notes Rm Rm Rm
ASSETS
Non-current assets 8 192 6 773 5 015
Property, plant and equipment 3 3 404 2 683 2 225
Investment properties 115 43 106
Intangible assets 3 2 946 2 440 1 219
Investment in associate 2 60 51
Investment in joint ventures 799 713 616
Prepaid employment costs – – 13
Participation in export partnerships 30 38 49
Other loans 106 83 89
Deferred tax 790 713 647
Current assets 14 077 5 367 5 054
Inventories 3 436 2 901 2 216
Trade and other receivables 1 067 668 631
Derivative financial instruments 23 211 41
Tax 9 5 1
Cash and cash equivalents 9 542 1 582 2 165
Non-current assets held for sale 9 – 63 –
TOTAL ASSETS 22 269 12 203 10 069
EQUITY AND LIABILITIES
TOTAL EQUITY 6 952 5 937 4 583
Equity attributable to shareholders of the parent 13 6 629 5 652 4 476
Non-controlling interests 323 285 107
Non-current liabilities 1 918 1 890 1 190
Interest-bearing borrowings 623 705 25
Operating lease accrual 614 487 457
Post-retirement medical benefit liability 10.1 349 338 348
Deferred tax 332 360 360
Current liabilities 13 399 4 376 4 296
Trade and other payables 4 625 3 837 3 172
Provisions 361 297 230
Derivative financial instruments 185 8 16
Tax 189 107 368
Interest-bearing borrowings 8 039 127 510
TOTAL LIABILITIES 15 317 6 266 5 486
TOTAL EQUITY AND LIABILITIES 22 269 12 203 10 069
Net asset book value – per share (cents) 873 750 600
GROUP ANALYSIS
Total assets 22 269 12 203 10 069
Woolworths* 8 986 7 507 6 972
Country Road Group 4 500 3 901 1 156
Woolworths Treasury 7 989 87 1 326
Woolworths Financial Services 794 708 615
Inventories 3 436 2 901 2 216
Woolworths* 2 433 2 200 1 835
Country Road Group 1 003 701 381
Total liabilities 15 317 6 266 5 486
Woolworths* 4 871 4 395 4 529
Country Road Group 2 355 1 871 457
Woolworths Treasury 8 091 – 500
Approved capital commitments 26 445 2 063 1 216
Woolworths* 1 786 1 703 1 043
Country Road Group 955 360 173
Acquisition of David Jones Limited 21 604 – –
Acquisition of Country Road Group non-controlling interests 2 100 – –
*Includes Woolworths Clothing and General Merchandise, Woolworths Food and Woolworths Logistics
**Certain comparative amounts shown do not correspond to the 2013 Annual Financial Statements and reflect
adjustments made. Refer to note 10.
GROUP STATEMENT OF CASH FLOWS
Restated*
52 weeks 53 weeks
to 29 Jun to 30 Jun
2014 2013
Notes Rm Rm
Cash flow from operating activities
Cash inflow from trading 5 375 4 450
Working capital movements (407) (196)
Cash generated by operating activities 4 968 4 254
Interest income 104 48
Finance costs paid (106) (63)
Tax paid (1 047) (1 140)
Cash generated by operations 3 919 3 099
Dividends received from joint ventures 95 83
Dividends received from associate 62 –
Dividends to ordinary shareholders (1 969) (1 578)
Dividends to preference shareholders (103) (62)
Net cash inflow from operating activities 2 004 1 542
Cash flow from investing activities
Net investment in property, plant and equipment, intangible assets and investment
property (1 314) (781)
Acquisition of subsidiary, net of cash acquired – (1 490)
Acquisition of franchise operations 4 (396) (67)
Other 18 26
Net cash outflow from investing activities (1 692) (2 312)
Cash flow from financing activities
Shares repurchased 5 (71) (192)
Share repurchase costs (1) (1)
Finance lease payments (46) (15)
Borrowings raised 55 872
Borrowings repaid (94) (607)
Costs associated with debt and equity raising (169) –
Acquisitions – non-controlling interest contribution – 108
Net cash (outflow)/inflow from financing activities (326) 165
Decrease in cash and cash equivalents (14) (605)
Net cash and cash equivalents at the beginning of the year 1 582 2 165
Effect of foreign exchange rate changes 98 22
Net cash and cash equivalents at the end of the year 1 666 1 582
GROUP ANALYSIS
Cash inflow from trading 5 375 4 450
Woolworths 4 329 3 512
Country Road Group 1 046 938
Additions to property, plant and equipment, intangible assets and investment
property (gross) 1 939 2 313
Woolworths 1 552 788
Country Road Group 387 1 525
*Certain comparative amounts shown do not correspond to the 2013 Annual Financial Statements and reflect
adjustments made. Refer to note 10.
GROUP STATEMENT OF CHANGES IN EQUITY
Restated
Total Total
Share- Share-
holders Non- 52 weeks holders Non- 53 weeks
of the controlling to 29 Jun of the controlling to 30 Jun
parent interests 2014 parent interests 2013
Notes Rm Rm Rm Rm Rm Rm
Shareholders' interest at the beginning
of the year as previously reported 5 652 285 5 937 4 465 107 4 572
Post-retirement medical benefit liability
restatement 10.1 – – – (9) – (9)
Consolidation of trust 10.2 – – – 20 – 20
Shareholders' interest at the beginning
of the year as restated 5 652 285 5 937 4 476 107 4 583
Movements for the year:
Profit for the year 2 888 102 2 990 2 597 41 2 638
Other comprehensive income 10 (20) 9 (11) 173 29 202
Total comprehensive income for the year 2 868 111 2 979 2 770 70 2 840
Shares issued 5 246 – 246 337 – 337
Shares repurchased 5 (60) – (60) (192) – (192)
Share repurchase costs (1) – (1) (1) – (1)
Dividends to shareholders (1 999) (73) (2 072) (1 640) – (1 640)
Share-based payments 169 – 169 239 – 239
Settlement of share-based payments
through share issue 5 (246) – (246) (337) – (337)
Non-controlling interest arising on
business acquisitions – – – – 108 108
Shareholders' interest at the end of
the year 6 629 323 6 952 5 652 285 5 937
Dividend per ordinary share (cents) 251.5 234.0
Dividend cover (based on headline earnings per share) 1.4 1.4
Dividend per preference share (cents) 251.5 207.0
SEGMENTAL ANALYSIS
52 weeks 53 weeks
to 29 Jun to 30 Jun
2014 2013 %
Rm Rm change
Revenue
Turnover 39 707 35 227 12.7
Woolworths Clothing and General Merchandise 11 505 10 764 6.9
Woolworths Food 19 694 17 469 12.7
Woolworths Logistics 418 561 (25.5)
Country Road Group 8 090 6 433 25.8
Other revenue and investment income 237 172 37.8
Woolworths Clothing and General Merchandise 18 14 28.6
Woolworths Food 73 74 (1.4)
Country Road Group 55 45 22.2
Woolworths Treasury 91 39 >100
Total group 39 944 35 399 12.8
Gross profit
Woolworths Clothing and General Merchandise 5 373 4 994 7.6
Woolworths Food 4 983 4 475 11.4
Woolworths Intragroup 133 100 33.0
Country Road Group 5 009 3 984 25.7
Total group 15 498 13 553 14.4
Profit before tax-adjusted
Woolworths Clothing and General Merchandise 2 029 1 856 9.3
Woolworths Food 1 259 1 060 18.8
Country Road Group 891 588 51.5
Woolworths Financial Services 181 180 0.6
Woolworths Treasury 15 16 (6.3)
Total group-adjusted 4 375 3 700 18.2
Adjustments (271) (53)
Profit on sale of investment properties 50 -
Abnormal foreign exchange related (loss)/gain (139) 67
Transaction and integration costs (182) (77)
Restructuring costs - (43)
Profit before tax 4 104 3 647 12.5
Notes
1. Basis of preparation
These abridged group annual financial statements comply with IAS 34 Interim Financial Reporting.
Accounting policies used in the abridged group annual financial statements are consistent with the prior
year, except for the changes in accounting policies disclosed in note 10, and are the same as those used to
prepare the group annual financial statements. They have been prepared in compliance with International
Financial Reporting Standards (IFRS) and interpretations adopted by the International Accounting Standards
Board (IASB), South African Institute of Chartered Accountants (SAICA) and the Financial Reporting Standards
Committee (FRSC), and the Companies Act of South Africa. The abridged group annual financial statements
have been prepared under the supervision of the group's finance director, Reeza Isaacs, CA(SA), and are
the full responsibility of the directors.
2. Earnings per share
The difference between earnings per share and diluted earnings per share is due to the impact of
unexercised options under the group's share incentive schemes.
3. Property, plant and equipment and intangible assets
During the financial year, the group acquired property, plant and equipment at a cost of R1 338 million
(2013: R937 million) and acquired intangible assets (including goodwill) at a cost of R601 million
(2013: R1 376 million). This includes acquisitions related to business combinations (refer to note 4), as well as
an R8 million goodwill adjustment arising from the finalisation of the business combination accounting for
the acquisition of the Witchery Group.
4. Acquisition of franchise operations
During the year, the group acquired nine previously franchised stores in South Africa and 33 in the rest of
Africa, for a total purchase consideration of R425 million. In the prior year, eight previously franchised stores
in the rest of Africa were acquired for a total purchase consideration of R67 million.
2014 2013
Rm Rm
Fair value of assets acquired at the date of acquisition
Property, plant and equipment 18 13
Reacquired rights 67 –
Deferred tax liability (19) –
Goodwill arising on acquisition 359 54
Consideration 425 67
Amount payable (29) –
Cash outflow 396 67
Goodwill of R359 million (2013: R54 million) comprises the fair value of intangible assets that do not qualify
for separate recognition, and represents growth and synergies expected to accrue from the acquisitions.
From the dates of acquisitions, R105 million of additional revenue has accrued, with no impact on profit
before tax. Had the acquisitions been effective from the beginning of the year, the directors consider that,
on a pro-forma basis, the contribution to revenue for the 52 weeks ended 29 June 2014 would have been a
further R99 million, with no impact on profit before tax.
5. Issue and repurchase of shares
During the year, 4 361 450 (2013: 7 265 192) ordinary shares totalling R246 million (2013: R337 million) were
issued and allocated to employees and 723 060 (2013: 2 710 328) ordinary shares were purchased from the
market and transferred to employees at a net cost of R52 million (2013: R151 million) in settlement under the
group's share incentive schemes.
288 026 (2013: 623 011) ordinary shares totalling R19 million (2013: R41 million) were purchased from the
market by Woolworths (Proprietary) Limited and are held as treasury shares by the group. 1 904 651
(2013: 1 066 402) ordinary shares totalling R46 million (2013: R23 million) were allocated to employees in
terms of the group's Restricted Share Plan.
6. Contingent liabilities
Group companies are party to legal disputes and investigations that have arisen in the ordinary course of
business. Whilst the outcome of these matters cannot readily be foreseen, the directors do not expect them
to have any material financial effect.
7. Borrowing facilities
Unutilised banking facilities amounted to R3 181 million (2013: R3 025 million). There is no limit imposed by the
Memorandum of Incorporation on the group's authority to raise interest-bearing debt.
8. Related party transactions
During the year the group entered into related party transactions, the substance of which is similar to those
explained in the group's annual financial statements.
9. Non-current assets held for sale
Two fixed properties, previously disclosed as non-current assets held for sale (within the Woolworths
segment) were sold in the current financial year for R110 million.
2014 2013
Rm Rm
Investment properties – 63
Non-current assets held for sale – 63
10. Change in accounting policy and restatement of comparative
figures
10.1 Post-retirement medical benefit liability-actuarial (loss)/gain
In terms of the revised IAS 19: Employee Benefits, comparative figures have been restated to recognise
actuarial gains and losses in other comprehensive income. The opening balance of the post-retirement
medical benefit liability as at 25 June 2012 has been restated by R13 million (from R335 million as
previously reported, to R348 million) and the liability as at 30 June 2013 has been further restated by
R18 million (from R356 million as previously reported, to R338 million) representing the net gain during
the 2013 financial year. As a result, the opening balance of the deferred tax asset as at 25 June 2012
has been restated by R4 million (from R643 million as previously reported, to R647 million) and has been
further restated at 30 June 2013 by R5 million (from R718 million as previously reported, to R713 million).
The adjustments have no impact on earnings per share or headline earnings per share. The group's
policy is to perform an annual valuation at the end of the financial year.
10.2 Consolidation of trust
In terms of IFRS 10: Consolidated Financial Statements, the Woolworths Trust, which was not previously
consolidated, is now included as part of the group. The consolidation resulted in a restatement of cash
and equity at 25 June 2012 by R20 million, representing the net assets of the Woolworths Trust. There
has been no movement in the net assets of the trust for the financial year ending 30 June 2013, and no
impact on previously reported earnings per share or headline earnings per share.
10.3 Reclassification of comparative figures
Marketing and administration expenses totalling R189 million previously disclosed in store costs have
been included in other operating costs.
The adoption of other new standards becoming effective in the current year resulted in minor changes to
accounting policies, which did not have a material impact on the financial position or performance of the
group.
11. Approval of abridged group annual financial statements
The abridged group annual financial statements were approved by the board of directors on 27 August 2014.
12. Events subsequent to the reporting date
Acquisition of David Jones Limited
On 1 August 2014, Woolworths Holdings Limited ("WHL"), through its subsidiaries, Osiris Holdings Proprietary
Limited and Vela Investments Proprietary Limited, acquired all of the ordinary shares of David Jones Limited
("David Jones") for a total value of R21.4 billion (A$2.1 billion).
The acquisition was funded via a combination of cash on hand and South African Senior Debt Facilities of
R10 billion, a A$264 million (R2.5 billion) Australian Senior Debt Facility and a R9 billion Equity Bridge Facility.
The Equity Bridge Facility will be repaid out of the proceeds of an underwritten, renounceable rights offer
by WHL, expected to commence during September 2014.
Assets acquired and liabilities assumed
WHL has measured David Jones' identifiable assets and liabilities at their acquisition-date fair value. The
provisional values are presented below:
Rm A$m
Non-current assets 11 164 1 121
Property, plant and equipment 9 972 1 002
Intangible assets 561 56
Deferred tax assets 631 63
Current assets 2 818 283
Inventories 2 309 232
Trade and other receivables 297 30
Tax 123 12
Cash and cash equivalents 89 9
Non-current liabilities (854) (86)
Long-term provisions (127) (13)
Operating lease accrual (243) (24)
Deferred tax liability (484) (49)
Current liabilities (4 122) (415)
Trade and other payables (2 951) (297)
Provisions (237) (24)
Derivative financial instruments (7) (1)
Interest-bearing borrowings (927) (93)
Total identifiable net assets at fair value 9 006 903
Goodwill arising from acquisition 12 598 1 246
Purchase consideration 21 604 2 149
Loss on hedging instrument 221 –
Purchase consideration transferred 21 383 2 149
Cash and cash equivalents acquired (89) (9)
Cash outflow on acquisition 21 515 2 140
Intangible assets arising from the acquisition of R12.6 billion comprise goodwill and the David Jones brand.
Goodwill represents the value paid in excess of the provisional fair value of net assets (including the brand)
and consists largely of synergies and economies of scale expected from strategic product and customer
initiatives. Transaction costs, excluding debt commitment fees and raising costs, are estimated at R347 million.
These include R182 million already expensed.
The fair values currently presented are provisional and as a result, all the required disclosures have not been
included. These are subject to further review for a period of up to one year from the acquisition date, as
prescribed by International Financial Reporting Standards. The Australian dollar values have been translated at the
closing exchange rate at 1 August 2014 of A$1: R9.95.
Acquisition of non-controlling interests in subsidiaries
Country Road Limited
After the year end the group also acquired the remaining 12.12% shares in Country Road Limited
("Country Road") for a cash consideration of A$213 million (R2.1 billion). As a wholly-owned subsidiary within
the group, Country Road will be delisted from the Australian Securities Exchange (ASX). Given its role in
realising a substantial part of the synergy benefits arising from the acquisition of David Jones, achieving
full ownership of Country Road was a logical next step and in line with the group's longstanding desire
to acquire 100% ownership. The acquisition was funded through new debt facilities raised from Australian
banks.
The excess of the purchase price over the carrying value of the related non-controlling interest in Country
Road, estimated at R1.9 billion, will be accounted for in retained profit.
Woolies (Zambia) Limited
On 29 July 2014, WHL concluded terms to acquire the remaining 49% shareholding in Woolies (Zambia) Limited
not already owned by the WHL group for a total cash consideration of R29 million.
Acquisition of franchise operations
Agreements to purchase a further four stores totalling R32 million are effective from dates subsequent to
this report.
13. Conversion to Stated capital
In terms of the Companies Act of South Africa and schedule 26 of the JSE Listing Requirements, WHL applied
to amend the company's listing to reflect a conversion of the company's ordinary shares from par value
ordinary shares to shares of no par value and to increase the company's authorised share capital by
11 000 million ordinary shares of no par value. This change was effective from 18 June 2014.
The authorised share capital of the company before and after the conversion and increase in authorised
share capital is as follows:
Before the conversion and increase:
1 410 600 000 authorised ordinary shares of 0.15 cents each and 89 400 000 unlisted authorised preference
shares of 0.15 cents each.
After the conversion and increase:
12 410 600 000 authorised ordinary shares of no par value and 89 400 000 unlisted authorised preference
shares of 0.15 cents each.
14. Audit opinion
These abridged group annual financial statements have not been audited but have been correctly
extracted from the audited group annual financial statements, upon which EY have issued an unqualified
report that is available for inspection at the company's registered office.
15. Impact of the 53rd week in the prior year
In line with industry practice, the group operates on a 52-week retail calendar basis. To realign the
calendar, the 2013 financial year included a 53rd week and the group's earnings were approximately 2.0%
higher last year as a result of this additional week. To aid comparison this commentary is based on
pro-forma 52-week financial information for the prior period.
GROUP STATEMENT OF COMPREHENSIVE INCOME
Restated Restated
52 weeks 53 weeks 52 weeks Change Change
to 29 Jun to 30 Jun 53rd to 23 Jun on prior on prior
2014 2013 week 2013 period period
Audited Audited adjustments Pro-forma 53 weeks 52 weeks
Rm Rm Rm Rm % %
Turnover 39 707 35 227 (532) 34 695 12.7 14.4
Cost of sales 24 209 21 674 (347) 21 327 11.7 13.5
Gross profit 15 498 13 553 (185) 13 368 14.4 15.9
Other revenue 125 115 – 115 8.7 8.7
Expenses 11 680 10 199 (128) 10 071 14.5 16.0
Store costs 7 614 6 639 (81) 6 558 14.7 16.1
Other operating costs 4 066 3 560 (47) 3 513 14.2 15.7
Operating profit 3 943 3 469 (57) 3 412 13.7 15.6
Investment income 112 57 – 57 96.5 96.5
Finance costs 136 68 – 68 100.0 100.0
Profit before earnings from joint ventures and
associate 3 919 3 458 (57) 3 401 13.3 15.2
Earnings from joint ventures 181 180 – 180 0.6 0.6
Earnings from associate 4 9 – 9 (55.6) (55.6)
Profit before tax 4 104 3 647 (57) 3 590 12.5 14.3
Tax 1 114 1 009 (16) 993 10.4 12.2
Profit for the year 2 990 2 638 (41) 2 597 13.3 15.1
Earnings per share (cents) 367.3 337.9 332.4 8.7 10.5
Headline earnings per share (cents) 365.2 340.4 334.9 7.3 9.0
Adjusted headline earnings per share (cents) 398.0 345.5 340.0 15.2 17.1
Diluted earnings per share (cents) 362.7 331.3 325.9 9.5 11.3
Diluted headline earnings per share (cents) 360.6 333.8 328.4 8.0 9.8
Adjusted diluted headline earnings per share
(cents) 393.0 338.7 333.4 16.0 17.9
SEGMENTAL ANALYSIS
52 weeks 53 weeks 52 weeks Change Change
to 29 Jun to 30 Jun 53rd to 23 Jun on prior on prior
2014 2013 week 2013 period period
Audited Audited adjustments Pro-forma 53 weeks 52 weeks
Rm Rm Rm Rm % %
Profit before tax-adjusted
Woolworths Clothing and General
Merchandise 2 029 1 856 (40) 1 816 9.3 11.7
Woolworths Food 1 259 1 060 (17) 1 043 18.8 20.7
Country Road Group 891 588 – 588 51.5 51.5
Woolworths Financial Services 181 180 – 180 0.6 0.6
Woolworths Treasury 15 16 – 16 (6.3) (6.3)
Total group-adjusted 4 375 3 700 (57) 3 643 18.2 20.1
Notes
1. The accounting policies adopted by the group in the prior year audited group annual financial statements,
which have been prepared in accordance with IFRS, have been used in preparing the prior year pro-forma
52-week comparative information.
2. The turnover and other information for the one-week period from 24 June to 30 June 2013 has been
extracted from the group's accounting records.
3. The 53rd week adjustments are calculated with reference to actual turnover and cost of sales for the 53rd
week, expenses based on an assessment of management information and an effective tax rate of 27.7%.
4. The calculation of earnings per share and headline earnings per share for the pro-forma 52-week
comparative period is based on the weighted average number of shares in issue during the prior year.
5. This information is the responsibility of the directors. The group's external auditors issued an assurance report
on the pro-forma 52-weeks information. A copy of their report is available at the group's registered office.
Directorate and statutory information
Non-executive directors:
Simon Susman (Chairman), Peter Bacon (British), Zarina Bassa, Tom Boardman (Lead independent director),
Hubert Brody, Andrew Higginson (British), Mike Leeming, Nombulelo Moholi, Chris Nissen, Stuart Rose (British),
Thina Siwendu
Executive directors:
Ian Moir (Group chief executive officer) (Australian), Reeza Isaacs, Sam Ngumeni, Zyda Rylands
Group secretary:
Thobeka Sishuba-Mashego
Share code:
WHL
ISIN:
ZAE000063863
Registered address:
Woolworths House, 93 Longmarket Street, Cape Town, 8001
PO Box 680, Cape Town, 8000
Registration number:
1929/001986/06
Tax number:
9300/149/71/4
JSE sponsor:
Rand Merchant Bank (A division of FirstRand Bank Limited)
Transfer secretaries:
Computershare Investor Services (Proprietary) Limited
70 Marshall Street, Johannesburg, 2001
Date: 28/08/2014 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
