Wrap Text
Summarised audited results of the Group for the year ended 30 June 2015 and cash dividend declaration
Distell Group Limited
Registration number 1988/005808/06
JSE share code: DST ISIN: ZAE000028668
("Distell" or "the Group" or "the Company")
Summarised audited results of the Group for the year ended 30 June 2015 and cash dividend declaration
SALIENT FEATURES
Sales volumes up 5,7%
Revenue up 10,4%
Operating profit
-normalised up 6,5%
-reported down 1,8%
Headline earnings
-normalised up 6,5%
-reported down 5,2%
Final dividend of 188,0 cents per share
Net cash generated from operating activities up 62,0%
SUMMARISED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Audited
30 June
2015 2014
R'000 R'000
ASSETS
Non-current assets
Property, plant and equipment 4 351 965 3 882 077
Biological assets 105 914 104 559
Loans and receivables 191 159 211 288
Available-for-sale financial assets 99 754 91 424
Investments in associates 233 685 77 064
Investments in joint ventures 160 423 137 901
Intangible assets 1 879 680 1 798 065
Retirement benefit assets 310 985 265 293
Deferred income tax assets 101 686 71 210
Total non-current assets 7 435 251 6 638 881
Current assets
Inventories 7 509 937 6 872 615
Trade and other receivables 2 223 009 1 839 808
Current income tax assets 20 204 56 818
Cash and cash equivalents 619 367 451 611
Total current assets 10 372 517 9 220 852
Total assets 17 807 768 15 859 733
EQUITY AND LIABILITIES
Capital and reserves
Capital and reserves 9 537 114 8 569 623
Non-controlling interest 19 283 31 532
Total equity 9 556 397 8 601 155
Non-current liabilities
Interest-bearing borrowings 3 323 446 3 114 090
Retirement benefit obligations 24 243 25 176
Deferred income tax liabilities 627 983 584 221
Total non-current liabilities 3 975 672 3 723 487
Current liabilities
Trade and other payables 3 017 128 2 567 301
Interest-bearing borrowings 870 378 761 761
Provisions 331 655 203 038
Current income tax liabilities 56 538 2 991
Total current liabilities 4 275 699 3 535 091
Total equity and liabilities 17 807 768 15 859 733
SUMMARISED CONSOLIDATED INCOME STATEMENTS
Audited
Year ended
30 June
2015 2014 Change %
R'000 R'000
Revenue 19 588 970 17 739 609 10.4
Operating costs (17 454 599) (15 744 401) 10.9
Costs of goods sold (12 813 730) (11 610 234)
Sales and marketing costs (2 699 733) (2 501 977)
Distribution costs (1 120 368) (1 063 200)
Administration and other costs (820 768) (568 990)
Other losses (5 315) 172 114
Operating profit 2 129 056 2 167 322 (1.8)
Dividend income 6 698 6 150
Finance income 23 241 15 082
Finance costs (259 711) (232 709)
Share of equity-accounted earnings 89 401 86 266
Profit before taxation 1 988 685 2 042 111 (2.6)
Taxation (569 024) (517 846)
Profit for the year 1 419 661 1 524 265 (6.9)
Attributable to:
Equity holders of the company 1 437 136 1 523 304 (5.7)
Non-controlling interest (17 475) 961
1 419 661 1 524 265 (6.9)
Per share performance:
Issued number of ordinary shares ('000) 221 737 221 435
Weighted number of ordinary shares ('000) 218 621 209 881
Earnings per ordinary share (cents)
- basic earnings basis 657.4 725.8 (9.4)
- diluted earnings basis 654.9 695.6 (5.9)
- headline basis 656.2 721.3 (9.0)
- diluted headline basis 653.7 691.3 (5.4)
Dividends per ordinary share (cents)
- interim 158.0 154.0 2.6
- final 188.0 183.0 2.7
346.0 337.0 2.7
Reconciliation of headline earnings:
Net profit attributable to equity holders of
the company 1 437 136 1 523 304 (5.7)
Adjusted for (net of taxation):
net other capital gains (2 575) (9 421)
Headline earnings 1 434 561 1 513 883 (5.2)
Adjusted for (net of taxation):
remeasurement of contingent consideration 8 891 (159 029)
Normalised headline earnings 1 443 452 1 354 854 6.5
SUMMARISED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Audited
Year ended
30 June
2015 2014
R'000 R'000
Profit for the year 1 419 661 1 524 265
Other comprehensive income (net of taxation) 244 821 474 198
Items that may be reclassified subsequently to profit
or loss:
Fair value adjustments
- available-for-sale financial assets 5 692 10 917
Currency translation differences 178 460 465 254
Items that will not be reclassified to profit or loss:
Remeasurements of post-employment benefit obligations 60 863 1 215
Share of other comprehensive income of associates (194) (3 188)
Total comprehensive income for the year 1 664 482 1 998 463
Attributable to:
Equity holders of the company 1 683 154 1 997 292
Non-controlling interest (18 672) 1 171
1 664 482 1 998 463
SUMMARISED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Audited
Year ended
30 June
2015 2014
R'000 R'000
Attributable to equity holders
Opening balance 8 569 623 7 246 885
Comprehensive income
Profit for the year 1 437 136 1 523 304
Other comprehensive income (net of taxation)
Fair value adjustments:
- available-for-sale financial assets 5 692 10 917
Currency translation differences 179 657 465 044
Remeasurements of post-employment benefits 60 863 1 215
Share of other comprehensive income of
associates (194) (3 188)
Total other comprehensive income 246 018 473 988
Total comprehensive income for the year 1 683 154 1 997 292
Transactions with owners
Employee share scheme:
- shares paid and delivered 13 436 17 463
- value of employee services 31 265 20 582
Dividends paid (745 680) (708 049)
Changes in ownership interests in subsidiaries that
do not result in a loss of control (14 684) (4 550)
Total transactions with owners (715 663) (674 554)
Attributable to equity holders 9 537 114 8 569 623
Non-controlling interest
Opening balance 31 532 30 650
Loss for the year (17 475) 961
Dividends paid (831) (742)
Currency translation differences (1 197) 210
Contribution by non-controlling interest - 8 104
Transactions with non-controlling interests 7 254 (7 651)
Total non-controlling interest 19 283 31 532
Total equity at the end of the year 9 556 397 8 601 155
SUMMARISED CONSOLIDATED STATEMENTS OF CASH FLOWS
Audited
Year ended
30 June
2015 2014
R'000 R'000
Cash flow from operating activities
Operating profit 2 129 056 2 167 322
Non-cash flow items 512 207 148 225
Working capital changes (529 325) (755 655)
Inventories (580 136) (390 088)
Trade and other receivables (363 624) (41 380)
Trade payables and provisions 414 435 (324 187)
Cash generated from operations 2 111 938 1 559 892
Net financing costs (190 380) (226 245)
Taxation paid (504 671) (459 101)
Net cash generated from operating activities 1 416 887 874 546
Net cash outflow from investment activities (841 650) (671 770)
Net cash inflow from financing activities 369 797 552 158
Dividends paid (745 680) (708 049)
Increase in net cash, cash equivalents and bank
overdrafts 199 354 46 885
Net cash, cash equivalents and bank overdrafts at the
beginning of the year 7 335 (70 197)
Exchange gains on cash and cash equivalents 24 179 30 647
Net cash, cash equivalents and bank overdrafts at
the end of the year 230 868 7 335
SEGMENTAL ANALYSIS
Audited
Year ended
30 June
2015 2014 Change %
R'000 R'000
Revenue from external customers
Sales of alcoholic beverages
South Africa 13 499 183 12 073 559 11.8
International 6 002 238 5 577 014 7.6
19 501 421 17 650 573 10.5
Other revenue 87 549 89 036 (1.7)
Consolidated 19 588 970 17 739 609 10.4
Audited
Year ended
30 June
2015 2014 Change %
R'000 R'000
Operating profit
South Africa 2 216 182 1 796 352 23.4
International 843 890 886 703 (4.8)
3 060 072 2 683 055 14.1
Corporate services (925 701) (687 847) 34.6
2 134 371 1 995 208 7.0
Other gains (5 315) 172 114 (103.1)
Consolidated 2 129 056 2 167 322 (1.8)
Notes
Audited
30 June
2015 2014
R'000 R'000
1. Sales volumes (litres '000) 653 670 618 664
2. Net interest-bearing borrowings
Interest-bearing borrowings
Non-current 3 323 446 3 114 090
Current 870 378 761 761
4 193 824 3 875 851
Cash and cash equivalents (619 367) (451 611)
3 574 457 3 424 240
3. Cash outflow from investment activities
Purchases of property, plant and equipment (PPE)
to maintain operations (321 801) (276 349)
Purchases of PPE to expand operations (446 580) (415 463)
Proceeds from sale of PPE 14 550 19 286
Purchases of financial assets and associates (111 428) (23 939)
Proceeds from financial assets 44 159 66 486
Purchases of intangible assets (13 120) (41 791)
Acquisition of subsidiaries, net of cash acquired (7 430) -
(841 650) (671 770)
4. Capital commitments
Contracted 411 334 196 268
Authorised, but not contracted 1 052 387 1 181 503
1 463 721 1 377 771
5. Depreciation of property, plant and
equipment 290 335 246 870
6. Net asset value per share (cents) 4 310 3 884
7. Segment report
Operating segments were identified based on financial information reviewed regularly by management
for the purpose of assessing performance and allocating resources to these segments.
Revenue includes excise duty.
BASIS OF PREPARATION, ACCOUNTING POLICY AND COMPARATIVE FIGURES
The summary consolidated annual financial statements are prepared in accordance
with the JSE Limited Listings Requirements for preliminary reports and the
requirements of the Companies Act applicable to summary financial statements.
For the Listings Requirements preliminary reports must be prepared in accordance with
the framework concepts, the measurement and recognition requirements of
International Financial Reporting Standards (IFRS), the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and must also, as a
minimum, contain the information required by IAS 34 Interim Financial Reporting.
The directors are responsible for the preparation of the summary consolidated
annual financial statements, prepared under supervision of the Group financial
director, MJ Botha CA(SA), and the financial information has been correctly
extracted from the underlying annual financial statements.
The accounting policies applied in the preparation of the consolidated financial
statements from which the summary financial statements are derived are in terms of
IFRS and are consistent with the accounting policies applied in the preparation of the
previous consolidated annual financial statements, with the exception of the
implementation of the following new accounting standards, interpretations and
amendments to IFRS standards that have come into effect and have been adopted
by the Group during the current financial year:
· Amendments to IAS 32: Financial Instruments - Presentation (effective 1 January 2014)
· Amendments to IAS 19: Employee Benefits (effective 1 July 2014)
· Amendments to IAS 36: Impairment of Assets - Recoverable amount disclosures for non-financial
assets (effective 1 January 2014)
· Annual Improvements 2010-12 cycle (effective 1 July 2014)
· Annual Improvements 2011-13 cycle (effective 1 July 2014)
The adoption of these amendments and statements had no material impact on the consolidated results
of either the current or prior periods.
OPERATING PERFORMANCE
Group revenue grew by 10,4% to R19,6 billion on a sales volume increase of 5,7%.
Domestic market revenue increased by a very pleasing 11,8% and sales volumes rose by 6,7% in a
challenging economic and trading environment of curtailed consumer demand. The strong
performance reflects the benefits flowing from the Group’s refreshed corporate strategy and
stepped-up investments in marketing, sales and distribution. The Group’s wine portfolio delivered
strong double-digit growth, while cider and RTD (ready-to-drink) brands reflected satisfactory
volume growth, albeit at a slower pace than in previous years. The spirits portfolio showed a
marginal volume increase, while premium brands grew strongly.
Sub-Saharan African markets, outside South Africa, continued to deliver strong results, despite
slower economic growth in the region. Revenue grew 11,6% on a sales volume increase of 6,6%.
Key markets in Africa such as Namibia, Angola, Mozambique, Kenya and Zambia all recorded strong
growth.The region contributed 51,4% to foreign revenue.
Revenue derived from the sale of the Group’s brands in other international markets, outside Africa,
grew 3,8% on a volume decline of 5,5%, amid continued tough trading conditions in many of the
markets where Distell operates. The Group’s international business however benefitted from a
weaker rand. The spirits portfolio delivered revenue growth of 9,2% although volumes declined
by 4,3%. Wines in the portfolio achieved revenue growth of 5,8%, on 2,5% lower volumes.
The financial results for the year, supported by strong overall revenue growth and efficiency
improvements across the business, were impacted by investments made to support the corporate
strategy, improve pricing relative to key competitors and support the Group's capability to
grow in Africa and select international markets. These investments will enhance the
competitiveness of the Group for delivery of sustainable revenue and profit growth over the
longer term. Operating expenses, as a result, increased by 10,9% and the normalised operating
profit margin declined from 11,3% to 10,9%.
Net finance costs increased from R217,6 million to R236,5 million.
The effective tax rate, as reported, increased from 25,4% to 28,6%, mainly due to non-taxable
gains relating to the remeasurement of the Burn Stewart Distillers (BSD) contingent purchase
consideration the previous year.
Normalised headline earnings and operating profit, excluding other gains arising from the
remeasurement and reversal of the contingent purchase consideration for BSD the previous year,
both increased by 6,5%.
Reported headline earnings declined by 5,2% to R1,4 billion
Investment and funding
Total assets increased by 12,3% to R17,8 billion.
Investment in net working capital increased by 7,4% to R6,4 billion and inventory
increased by 9,3% to R7,5 billion. Of this, bulk spirits in maturation, planned in
accordance with the Group's longer-term demand projections, grew 11,7% to R3,3
billion. Bottled stock and packaging materials reflect an increase of 14,3% on the
previous year.
Capital expenditure for the year amounted to R768,4 million (2014: R691,8 million) of
which R321,8 million was spent on the replacement of assets. A further R446,6
million was directed to the expansion of capacity, mainly in relation to the Group's
cider and whisky manufacturing facilities.
During December 2014, the Group acquired a 26% equity stake in KWA Holdings
East Africa Limited (KHEAL), Kenya's leading spirits manufacturer, bottler and
distributor, for a cash consideration of R111,3 million. This transaction enables the
Group to expand its production and distribution footprint in the important East African
market.
Net cash generated before financing activities was R575,2 million (2014: R202,8
million). Cash retained for the year amounted to R199,4 million (2014: R46,9 million).
The Group remains in a strong financial position, as shown by a debt to debt-plus-
equity ratio of 27,2% (2014: 28,5%) and a debt-equity ratio of 37,4% (2014: 39,8%)
at the end of the reporting period.
PROSPECTS
The global environment continues to be challenging due to diverging growth. While
prospects in the developed world are improving, emerging economies, including
South Africa, are showing slower growth. Tough trading conditions are therefore
expected to persist.
The Group nevertheless continues to pursue and invest in its long-term strategy to
grow shareholder value. This is backed by a robust and diverse portfolio of
appealing brands, as well as a strengthened and extended route to market network
that continues to evolve across a range of economies and regions.
DIRECTORATE
Lucas Verwey has been appointed as financial director with effect from 1 September
2015 to succeed Merwe Botha, who will retire as executive director at the
end of December 2015. Johan Carinus will retire as non-executive director with
effect from 28 October 2015.
AUDITORS' REPORT
The summary consolidated annual financial statements are extracted from audited
information, but are not themselves audited. The consolidated annual financial
statements have been audited by PricewaterhouseCoopers Inc., who expressed an
unmodified opinion thereon. The audited consolidated annual financial statements
and the auditor's report thereon are available for inspection at the company's
registered office.
CASH DIVIDEND DECLARATION
Normalised headline earnings increased by 6,5% to R1,4 billion. The weighted average
number of shares in issue increased by 4,2% to 218,6 million shares, mainly due to
the fulfillment of the Group’s obligations under its very successful, innovative
and wealth creating BEE ownership initiative during the previous year.
Headline earnings per share on a normalised basis therefore increased by 2,3%
to 660,3 cents.
The directors have resolved to declare a final gross cash dividend, number 54,
of 188,0 cents (2014: 183,0 cents) per share for the year ended 30 June 2015. This
represents a total dividend of 346,0 cents (2014: 337,0 cents), an increase of 2,7%,
for the year and a dividend cover of 1,9 times (2014: 2,1 times) by headline earnings.
The dividend has been declared from income reserves. The dividend withholding tax,
levied at 15%, will amount to 28,2 cents per ordinary share. As a result, ordinary
shareholders who are liable to pay dividends tax will receive a net dividend amount
of 159,8 cents per share. Shareholders exempt from paying dividends tax will receive
188,0 cents per share. The issued ordinary share capital as at 19 August 2015 is
221 737 356 (2014: 221 435 026) ordinary shares. The company’s income tax reference
number is 9115001712.
The dividend will be payable to shareholders on record on Friday, 18 September
2015, and will be paid on Monday, 21 September 2015. The last day to trade cum
dividend will be on Friday, 11 September 2015, and shares commence trading ex-
dividend from Monday, 14 September 2015. Share certificates may not be
dematerialised or rematerialised between Monday, 14 September 2015, and Friday,
18 September 2015, both days inclusive.
Signed on behalf of the board
DM Nurek RM Rushton
Chairman Managing director
Stellenbosch
19 August 2015
Directors: DM Nurek (Chairman), PE Beyers, MJ Botha, JG Carinus, GP Dingaan, JJ Durand,
E de la H Hertzog, MJ Madungandaba, LM Mojela, CA Otto, AC Parker, RM Rushton (Managing director),
CE Sevillano-Barredo, BJ van der Ross
Company secretary: L Malan
Registered office: Aan-de-Wagenweg, Stellenbosch 7600
Transfer secretaries: Computershare Investor Services Proprietary Limited, 70 Marshall Street,
Johannesburg, PO Box 61051, Marshalltown 2107
Sponsor: RAND MERCHANT BANK (A division of FirstRand Bank Limited)
www.distell.co.za
AMARULA
Amarula’s unique flavour and exotic African provenance have seen it win new support from Sandton
to Sao Paolo. Bucking the decline in the global cream liqueurs, it has extended its international
appeal and is the number two brand in its category. Made with wild-harvested marula fruit, double
distilled and oak aged for two years before cream is added. Amarula is worth the wait.
BUNNAHABHAIN
From the west coast of Scotland comes a single malt Islay connoisseur whisky with an international
following. It’s not hard to see why sales value continue to grow across all markets, be it North
America, Taiwan or South Africa. Un-chillfiltered, highly desirable, with a singular flavour,
Bunnahabhain is the result of a traditional technique, an expression of whisky in its purest form.
NEDERBURG
South Africa’s most awarded winery recently earned trophies at the Decanter World Wine Awards and
the International Wine Challenge. Their total now stands at 38 awards in 12 months. It continues
to explore new ideas and tastes as it grows its global footprint. The biggest gains have come from
South Africa, Germany and the US. Nederburg – Dynamic, Progressive, Innovative and always driving
curiosity.
VAN RYN’S
Between the International Wine & Spirit Competition and the International Spirits Challenge,
Van Ryn’s has won the trophy for best brandy no fewer than nine times over the past decade.
Produced at the Van Ryn's Distillery in Stellenbosch, it is arguably South Africa's flagship
name in specialty potstill brandy. This is a brandy with a remarkable consistency of excellence
in international competitions.
THREE SHIPS
Made with home-grown South African grain at the James Sedgwick Distillery in Wellington,
Three Ships’ sales are growing, and turning heads among enthusiasts and experts. Its impressive
list of achievements includes a Best WorldWide Whisky Trophy at the International Wine & Spirit
Competition, and World’s Best Blended Whisky at the World Whisky Awards.
Settle for the best: Three Ships.
SAVANNA
One of South Africa’s most popular ciders … and the fourth biggest cider brand worldwide (sold and
enjoyed in over 60 countries), Savanna is best served ice cold with a slice of lemon in the neck of
its distinctive clear bottle. A unique and different positioning, it has three delicious variants
– Dry, Dark and Light – all making Savanna a dynamic and differentiated brand.
Date: 19/08/2015 01:37:00 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 
