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Interim results for the period ended February 2015
Nu-World Holdings Limited
Registration number 1968/002490/06
(Incorporated in the Republic of South Africa)
JSE share code: NWL ISIN code: ZAE000005070
(‘’Nu-World’’ or ‘’the Group’’ or ‘’the Company’’)
Condensed consolidated unaudited interim financial statements
for the six months ended 28 February 2015
• Group revenue from continuing operations increased by 5,3%
to R1 090,5 million
• Income after tax from continuing operations increased by 14,5%
to R41,2 million
• Net profit attributable to ordinary shareholders for the period
increased by 19,3% to R40,9 million
• Headline Earnings per Share (cents) increased by 16,5% to 186,6 cents
• Net asset value per share increased by 8,4% to 3 542,2 cents
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
28 February 28 February 31 August
2015 2014 % 2014
R’000 R’000 change R’000
Continuing operations
Revenue 1 090 504 1 035 292 5,3% 2 108 073
Net operating income 60 941 54 087 115 617
Depreciation 956 704 1 915
Interest paid 3 471 3 267 4 356
Fair value adjustment on
financial instruments 1 373 1 190 4 465
Income before taxation 55 141 48 926 104 881
Taxation 13 989 12 994 26 256
Income after taxation from
continuing operations 41 152 35 932 14,5% 78 625
Discontinued operations
Net operating profit - 294 -
Profit after taxation from
discontinuing operations - 294 -
Total net income after taxation 41 152 36 226 78 625
Share of associate
company profit 37 - 13
Net profit for the period/year 41 189 36 226 13,7% 78 638
Net profit attributable to:
Non-controlling interest 275 1 942 3 475
Equity holders of the Company 40 914 34 284 19,3% 75 163
41 189 36 226 13,7% 78 638
Headline earnings reconciliation:
Determination of comprehensive
income and headline earnings
Net profit attributable to
ordinary shareholders 40 914 34 284 19,3% 75 163
Less IAS16 gains on disposal
of fixed assets (962) (156)
Total tax effects of adjustments 179 44
Headline earnings 40 131 34 284 17,1% 75 051
SUPPLEMENTARY INFORMATION
Dividend paid 25 047
Comprehensive income 40 914 34 284 19,3% 75 163
Headline earnings 40 131 34 284 17,1% 75 051
Basic earnings per share (cents) 190,2 160,2 18,7% 351,6
Headline earnings per
share (cents) 186,6 160,2 16,5% 351,1
Diluted earnings per
share (cents) 181,3 153,7 18,0% 337,3
Dividend per share (cents) 110,6
Dividend cover 3,0
Shares in issue (total issued) 22 646 465 22 646 465 22 646 465
Shares in issue
(less treasury shares) 21 630 612 21 369 543 21 354 720
Shares in issue – weighted 21 511 969 21 394 786 21 377 497
Shares in issue – diluted 22 562 112 22 301 043 22 286 220
Operating income as a
percentage of turnover (%) 5,6% 5,2% 5,5%
Debt to equity ratio (%) 4,9% (10,4%) (9,0%)
Effective taxation
rate – continuing operations 25,4% 26,4% 25,0%
Net asset value per
share (cents) 3 542,2 3 268,6 8,4% 3 548,2
Intangible assets
Goodwill and amortisation
Balance at beginning of
period/year 30 878 29 510 29 510
Translation difference (1 545) 721 1 368
Balance at end of period/year 29 333 30 231 30 878
Patent and trademark:
Balance at beginning of
period/year 31 706 31 706 31 706
Balance at end of period 31 706 31 706 31 706
Total intangible assets 61 039 61 937 62 584
SEGMENTAL INFORMATION
Geographical revenue
South Africa -
continuing operations 714 310 669 157 6,7% 1 325 341
Offshore subsidiaries –
continuing operation 376 194 366 135 2,7% 782 732
1 090 504 1 035 292 5,3% 2 108 073
Geographical income
South Africa -
continuing operations 30 209 25 370 19,1% 46 089
Offshore subsidiaries –
continuing operation 10 705 8 620 24,2% 29 074
Offshore subsidiaries –
discontinued operation 294
40 914 34 284 19,3% 75 163
Attributable income as
percentage of turnover (%)
South Africa -
continuing operations 4,2% 3,8% 11,5% 3,5%
Offshore subsidiaries –
continuing operation 2,8% 2,4% 20,9% 3,7%
3,8% 3,3% 13,3% 3,6%
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
28 February 28 February 31 August
2015 2014 2014
R’000 R’000 R’000
ASSETS
Non-current assets
Fixed assets 30 113 33 181 30 482
Intangible assets 61 039 61 937 62 584
Investment in associate 144 94 107
Deferred taxation 8 479 6 699 9 731
Current assets
Assets classified as held
for sale 4 000
Inventory 465 854 408 493 431 440
Trade and other receivables 417 061 313 452 402 572
Cash equivalents 47 519 72 433 105 596
Total assets 1 030 209 896 289 1 046 512
Equity and liabilities
Ordinary shareholders’ funds 766 197 698 485 757 713
Minority interests 36 737 36 904 39 954
Total shareholders’ funds 802 934 735 389 797 667
Current liabilities
Bank borrowings 84 733 37 648
Trade and other payables 142 542 160 900 211 197
Total equity and liabilities 1 030 209 896 289 1 046 512
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
28 February 28 February 31 August
2015 2014 2014
R’000 R’000 R’000
Balance as at 1 September 757 713 677 956 677 956
Total attributable income
for the period/year 40 914 34 284 75 163
Dividend paid (27 897) (13 452) (13 452)
Movement in foreign currency
translation reserve 589 648 3 918
Treasury share movement 2 562 (951) (1 241)
Issue of share-based
payment awards (7 684) 15 369
Balance at end of period/year 766 197 698 485 757 713
CONDENSED GROUP STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
28 February 28 February 31 August
2015 2014 2014
R’000 R’000 R’000
Cash utilised by
operating activities (112 105) (35 755) (43 480)
Cash absorbed by operations (60 425) (7 985) (10 700)
Interest paid (3 471) (3 267) (4 356)
Dividends paid (27 897) (13 452) (13 452)
Normal tax on companies (20 312) (11 051) (14 972)
Cash flows from investing
activities 6 943 (2 018) (3 580)
Purchase of tangible fixed
assets (561) (1 250) (3 783)
Proceeds on disposal of
fixed assets 4 942 183 203
Investment in treasury
Shares 2 562 (951)
Net decrease in cash
and cash equivalents (105 162) (37 773) (47 060)
Effects of exchange rate
changes on the balance of
cash held in foreign currencies 4 802
Cash and cash equivalents at
the beginning of the period/year 67 948 110 206 110 206
Cash and cash equivalents
at the end of the period/year (37 214) 72 433 67 948
COMMENTARY
Corporate information
Nu-World is a limited liability company incorporated and domiciled in South
Africa with subsidiaries and associates in Australia, Brazil, Dubai, Hong Kong
and Lesotho. The main business of Nu-World, its subsidiaries, joint ventures
and associates is the importing, assembling, marketing and distribution of
branded consumer goods including consumer electronics, hi-tech, small
electrical appliances, white goods, liquor and furniture.
Basis of preparation
These condensed consolidated interim financial statements for the six months
ended 28 February 2015 have been prepared in accordance with the framework
concepts and the measurement and recognition requirements of International
Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides
as issued by the Accounting Practices Committee and the financial pronouncements
as issued by the Financial Reporting Standards Council, the Companies Act,
No 71 of 2008 (as amended) and comply with the disclosure requirements of IAS 34:
Interim Financial Reporting.
The condensed consolidated financial statements have been prepared under the
historical cost convention.
The accounting policies used in the preparation of these results are in
accordance with IFRS and consistent in all material respects with those used
in the audited annual financial statements for the year ended 31 August 2014.
The condensed consolidated interim financial statements are presented in Rand
rounded to the nearest thousand (‘000).
The condensed consolidated statement of financial position at 28 February 2015
and the related condensed statements of comprehensive income, statement of
changes in equity and cash flows for the six months then ended, have not been
reviewed or reported on by the Group’s auditors.
The interim financial statements have been prepared under the supervision of
Graham Hindle CA (SA) in his capacity as Financial Director.
Discontinued operation
The comparative discontinued operation information relates to the disposal of
a substantial portion of the assets and liabilities of its Australian subsidiary
Nu-World Australia Pty Ltd (formally known as OO Australasia Pty Limited).
The comparative figures have been re-presented.
Operating results
The Group produced satisfactory results for the period ended 28 February 2015
despite trading within a subdued economic environment in most of the territories
we trade in. Accordingly the directors are pleased to report on
positive top-line growth in continuing operations and positive earnings growth
attributable to equity holders of the Company.
South Africa
The local economy and our customer base in general, has been affected by the
decline in consumer unsecured lending. Currency volatility and further depreciation
continued during the period under review. Despite these issues,
the Group experienced reasonable sales and profit growth.
The small appliance division and seasonal product range showed strong growth
due to the launch of new innovative products. The liquor division has
consolidated sales of international brands and used this platform to increase
its range and customer base for its own house brands.
Offshore operations
Africa / Middle East / CIS
This region has experienced tremendous changes from geo-political issues, the
collapse of the oil price, and significant currency devaluations in oil
producing countries in Africa.
This has been a challenge for the Group, however our JVC brand has been well
accepted and the Group is now capitalising on these gains.
Additional distributor network for territories currently not represented are
being finalised for the JVC brand.
The Group has signed an agreement with its Saudi Arabian distributor to introduce
a second brand, Telefunken, for small appliances, white goods and consumer
electronics.
Australia
Huge currency depreciation has taken place making the trading environment
difficult at retail level, however the Group's Australian subsidiary produced
adequate results considering the difficult trading environment.
The JVC brand continues to gain market acceptance and show strong growth.
FINANCIAL OVERVIEW
STATEMENT OF COMPREHENSIVE INCOME
Group revenue from continuing operations increased by 5,3% to R 1 090,5 million
(February 2014 – R 1 035,3 million).
Net profit for the period increased by 13,7% to R 41,2 million
(February 2014 – R 36,2 million).
Total attributable income for the period increased by 19,3% to R 40,9 million
(February 2014 – R 34,3 million).
STATEMENT OF FINANCIAL POSITION
The balance sheet remains strong with a gearing ratio (debt:equity) of 4,9%.
Inventory levels of R 465,8 million increased by 8,0% from August 2014
(R 431,4 million).
Directors and management remain focused on improving working capital management.
Stocking levels and ranges are being rationalised and stock
turn rates should improve going forward.
The increase in trade and other receivables of 33,1% to R 417,1 million
(February 2014 – R 313,4 million) arose due to the substantial increase in
offshore subsidiaries turnover at the end of the period together with the
change in the customer sales mix weighted to customers with less favourable
trading terms.
Net asset value per share has increased by 8,4% to 3 542,2 cents
(February 2014 – 3 268,6 cents).
SUBSEQUENT EVENTS
No events material to the understanding of the report have occurred during
the period between 28 February 2015 and the date of this report.
On behalf of the board of directors
J.A. Goldberg G.R. Hindle
Chief Executive Officer Financial Director
14 April 2015
Registered office
35 3rd Street, Wynberg, Sandton 2199
Republic of South Africa
Tel +27 (11) 321 2111
Fax +27 (11) 440 9920
Transfer secretaries
Computershare Investor Services (Pty) Ltd
70 Marshall Street, Johannesburg 2001
Company secretary
B.H. Haikney
Auditors
RSM Betty & Dickson
Sponsor
Sasfin Capital, a division of Sasfin Bank Limited
Directors
M.S. Goldberg (Executive Chairman)
J.A. Goldberg (Chief Executive Officer)
G.R. Hindle (Financial Director)
Non-executive directors
J.M. Judin (Lead), D. Piaray, R. Kinross
www.nuworld.co.za
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