Wrap Text
Reviewed final results for the year ended 30 June 2015
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")
REVIEWED FINAL RESULTS
FOR THE YEAR ENDED 30 JUNE 2015
HIGHLIGHTS
For the year ended 30 June 2015
+39% REVENUE +12% OPERATING PROFIT
R19,8 BILLION R1,5 BILLION
+9% HEPS +11% CORE HEPS
271 CENTS 289 CENTS
+6% OPERATING CASH +17% NAV PER SHARE
FLOW 1 681 CENTS
R2,1 BILLION
INTRODUCTION
The Group reported a good set of results for the year ended 30 June 2015, despite a challenging economic and trading
environment. Super Group is a leading transport logistics and mobility group, headquartered in South Africa. The Group
includes supply chain, dealerships and fleet solutions businesses focused on offering a comprehensive range of services,
utilising world-class skills and technology. The businesses that comprise Super Group are Supply Chain South Africa, African
Logistics, FleetAfrica, a 54% interest in SG Fleet Group Limited (a listed Australian fleet management business), Dealerships
South Africa (SA), Dealerships United Kingdom (UK), which includes the 100% interest in Allen Ford (UK), a franchised Ford
and Kia motor dealer group acquired on 1 December 2014, and Services.
The logistics and transport industry in South Africa has seen a marked increase in new players, increasing the competitive
landscape and eroding margins. Although the outsourcing of logistics continues to gain momentum, it remains challenging to
win meaningful contracts with competitor pressure on prices impacting across all sectors. Logistics into Africa continued to
be exceptionally tough with highly competitive cross-border rates and other factors impacting the results negatively.
The Australian operating environment was muted and business sentiment declined over the reporting period. Despite these
trends, the fleet management market continued to grow and SG Fleet continues to enjoy a strong tender pipeline. The fleet
management market remains competitive, however, SG Fleet is well positioned in the Australian market and continues to gain
traction in the UK market.
The UK market showed positive signs of recovery with Dealerships UK benefitting from the growth experienced by the
dealership market.
During the year under review, Super Group concluded various transactions that are explained in more detail in the Divisional
Review section of this document.
FINANCIAL PERFORMANCE
Revenue increased by 38.6% to R19 818 million (June 2014: R14 297 million). The growth in revenue was mainly attributable to the solid performances
by Supply Chain South Africa, both Fleet Solutions businesses, Dealerships SA and the inclusion of Allen Ford (UK) for the seven months to June 2015.
Although operating profit increased by 11.6% to R1 501 million (June 2014: R1 345 million), operating profit margin declined to 7.6% (June 2014: 9.4%)
as a result of the Allen Ford (UK) acquisition and an extremely disappointing performance by African Logistics.
The increase in net finance costs by 35.7% to R139 million (June 2014: R102 million) relates to an increased net borrowings position as a result of the
Phola Coaches, Allen Ford (UK) and other acquisitions.
Profit before taxation increased by 9.7% to R1 362 million (June 2014: R1 242 million), directly as a result of the improved operational profitability
of the Group.
Earnings per share (EPS) and headline earnings per share (HEPS) for the year under review increased by 8.5% to 270,4 cents (June 2014: 249,2 cents)
and 9.0% to 271,1 cents (June 2014: 248,7 cents), respectively. Core HEPS increased by 11.2% to 289,1 cents (June 2014: 260,0 cents) on the basis
that the Broad-Based Black Economic Empowerment (B-BBEE) scheme, amortisation of intangibles and acquisition costs amounting to 18,0 cents per
share are excluded from HEPS.
The increase in total assets of 25.6% to R15 291 million (30 June 2014: R12 171 million) was mainly as a result of newly acquired assets together with
the completion of a new dealership at Super Park. The Group's Return on Net Operating Assets (RNOA), after tax, was 16.7% (June 2014: 18.6%)
for the year under review. However, normalised RNOA, after tax and excluding the effects of acquisitions and disposals during the period, is 18.1%.
Super Group's net debt position at 30 June 2015 increased to R995 million as a result of the various acquisitions concluded in South Africa and the
Allen Ford (UK) acquisition. The Group's total gearing as at 30 June 2015 was 16.8% (30 June 2014: 1.7%). The net asset value per share increased
by 16.9% for the year to 1 680,5 cents at 30 June 2015 (30 June 2014: 1 437,1 cents). The Group's Statement of Financial Position remains healthy.
Operating cash flow increased by 5.9% for the year to R2 123 million (June 2014: R2 005 million) with a working capital outflow of R102 million (June
2014: R90 million). As a result, cash generated from operations, after working capital, increased by 5.5% to R2 021 million (June 2014: R1 915 million).
During the year under review, the company repurchased 2 514 330 shares, totalling 0.8% of the issued share capital, at an average share price of
R31,26. The total consideration relating to these repurchases was R79 million.
REVENUE
to June
R'Million
2013 2014 2015
11 718 14 297 19 818
SUPPLY CHAIN 42%
FLEET SOLUTIONS 11%
DEALERSHIPS 47%
Contribution indicated as a percentage of Group excl. services
OPERATING PROFIT
to June
R'million
2013 2014 2015
1 134 1 345 1 501
SUPPLY CHAIN 37%
FLEET SOLUTIONS 46%
DEALERSHIPS 17%
Contribution indicated as a percentage of Group excl. services
PROFIT BEFORE TAXATION
to June
R'million
2013 2014 2015
1 067 1 242 1 362
SUPPLY CHAIN 35%
FLEET SOLUTIONS 50%
DEALERSHIPS 15%
Contribution indicated as a percentage of Group excl. services
DIVISIONAL REVIEW
SUPPLY CHAIN
Year ended Year ended
30 June 30 June
R'000 Change % 2015 2014
Revenue 8 321 231 7 192 965
South Africa 18.0 7 696 844 6 525 257
African Logistics (6.5) 624 387 667 708
Operating profit 531 807 508 175
South Africa 18.6 508 514 428 786
African Logistics (70.7) 23 293 79 389
Operating margin (%)
South Africa 6.6 6.6
African Logistics 3.7 11.9
Profit before taxation 456 843 436 334
South Africa 21.0 436 384 360 615
African Logistics (73.0) 20 459 75 719
Net operating assets 3 324 366 2 923 174
South Africa 12.2 2 745 424 2 446 482
African Logistics 21.4 578 942 476 692
The majority of Supply Chain South Africa's businesses delivered a strong performance in a challenging trading environment and sluggish economic
climate. SG Consumer reported good financial results for the year under review with solid volume growth on the back of new contracts. Digistics
performed well, adding Corner Bakery and Pizza Hut as new clients. Safika Oosthuizens experienced unsettled trading conditions in the second half
of the year given the Eskom situation, but delivered a strong financial result for the full year. SG Convenience disappointed on the back of increased
infrastructural costs. SG Consumer, SG Mobility, Freight, Super Rent and Phola Coaches performed in line with expectations. During the first half of the
year, SG Logistics was closed resulting in an impairment charge of R8,4 million.
African Logistics reported disappointing results with revenue, operating profit and profit before taxation declining materially. The reduction in revenue
was as a result of an effective 11.9% reduction in transport rates. Operating profit margin was also significantly below the target level of 12% and was
eroded by sporadic mining labour unrest in the Democratic Republic of Congo and worsening border efficiencies. The cross border operations are of
concern and the results reflect a large increase in South African-based operators expanding into Africa, transport rate reductions and South-bound
volume decline due to mining closures or reduced output levels.
FLEET SOLUTIONS
Year ended Year ended
30 June 30 June
R'000 Change % 2015 2014
Revenue 2 139 282 1 935 188
FleetAfrica 36.5 522 697 382 843
SG Fleet 4.1 1 616 585 1 552 345
Operating profit 676 049 650 366
FleetAfrica (5.5) 115 742 122 519
SG Fleet 6.1 560 307 527 847
Operating margin (%)
FleetAfrica 22.1 32.0
SG Fleet 34.7 34.0
Profit before taxation 660 590 639 796
FleetAfrica (12.7) 117 561 134 682
SG Fleet 7.5 543 029 505 114
Net operating assets 1 756 386 1 255 701
FleetAfrica 168.4 942 255 351 000
SG Fleet (10.0) 814 131 904 701
FleetAfrica performed well and met budget expectations. Revenue increased by 36.5% with operating profit margin returning to a more normalised
level of 22.1%. The lower operating margin is due to the business securing long-term contracts with lower margins. FleetAfrica has managed to secure
a number of meaningful contracts and delivered 77% of the vehicles on the Transnet contract. About 80% of FleetAfrica's contracts are public sector
work-related. The business is also pursuing certain opportunities in Botswana. Its B-BBEE Level 2 rating has been extended until April 2016.
SG Fleet reported a solid set of results and the momentum coming out of the 2014 financial year has been maintained, allowing the business to exceed
its profit forecast disclosed in its listing prospectus. Further customer wins and deeper penetration within existing customers, has resulted in SG Fleet
having a fleet size of over 90 000 vehicles. Good progress was made in both the corporate and government segments with new wins from a Federal
Government department and the Australian arm of a major international professional services firm. The novated lease market showed good growth and
the salary-packaged lease product gained good traction in the UK. The exchange rate applicable to the Australian Dollar against the Rand positively
impacted the final results of Super Group to an amount of R0,5 million (June 2014: R19,5 million).
DEALERSHIPS
Year ended Year ended
30 June 30 June
R'000 Change % 2015 2014
Revenue 9 347 801 5 150 402
Dealerships SA 17.8 6 069 143 5 150 402
Dealerships UK – 3 278 658 –
Operating profit 251 777 139 032
Dealerships SA 27.6 177 336 139 032
Dealerships UK – 74 441 –
Operating margin (%)
Dealerships SA 2.9 2.7
Dealerships UK 2.3 –
Profit before taxation 194 672 111 788
Dealerships SA 27.4 142 370 111 788
Dealerships UK – 52 302 –
Net operating assets 1 996 821 877 911
Dealerships SA (23.0) 675 774 877 911
Dealerships UK – 1 321 047 –
Dealerships SA reported an exceptional set of results despite challenging market conditions. The NAAMSA dealer market reported a 0.7% decline in
new vehicle sales for the year ended 30 June 2015 (June 2014: 2.1% decline), while Dealerships new vehicle sales increased by 5.7% for the same
period. This was attributable to the inclusion of two newly acquired dealerships and opening three new dealerships during the year. The majority of
businesses within Dealerships SA performed really well. Used vehicle performance continued to grow (25.4% up on the prior year) as a direct result
of significant new vehicle price increases and additional focus within the division. The above, together with strict overhead control and working capital
management, resulted in Dealerships' increasing its operating margin to 2.9% (June 2014: 2.7%).
Dealerships UK holds the 100% interest in Allen Ford (UK), a franchised motor dealership group operating 13 franchised Ford motor dealerships
and two franchised Kia dealerships in the UK, acquired effective 1 December 2014. The seven-month results reported by Allen Ford were ahead of
expectations and are reflected after the deduction of once-off acquisition costs of R16,8 million.
SERVICES
The Services segment includes the Corporate, Insurance and Mauritius operations.
SUBSEQUENT EVENTS
Super Group announced the acquisition of a 75% equity interest in IN tIME, a German-based company providing time-critical delivery services across
Europe. Super Group is acquiring the 75% interest from Equistone Partners. The enterprise value for IN tIME, via Telo Zwei Vermögensverwaltung GmbH
(the holding company), before deducting the Euro debt of €58,0 million, is €153,5 million (approximately R2,1 billion). The settlement arrangement
will be in the form of Super Group's 75% equity interest of €48,9 million (R685 million) and the Super Group Shareholder's Loan of €30,3 million (R424
million). IN tIME management will retain a 25% equity interest valued at €16,3 million (R228 million). The valuation of IN tIME was based on a historic PE
multiple of 8.4 times and the effective return on equity, including the shareholders' loans, is 11.9%.
Super Group's investment will be funded via existing cash on hand within the Group and a proposed fully underwritten renounceable Rights Offer of
approximately R900 million. The conditions precedent include approval by the South African Reserve Bank, received on 14 August 2015, and the
successful completion of the proposed Rights Offer.
The IN tIME presentation is available on Super Group's website www.supergroup.co.za
PROSPECTS
The South African economy is expected to remain under severe pressure over the short to medium term. The operational challenges the Group is
expecting are an increase in the competitive landscape resulting in pricing compressions across all sectors, the South African currency weakening
against all major currencies, interest rate hikes, inflationary pressures including the high costs of running facilities during power load-shedding and
depressed consumer spending as a result of higher unemployment rates.
Supply Chain South Africa's stated strategy of pursuing selected opportunities in higher growth niche markets, remains unchanged. The Group will
further focus on increasing customer penetration and expanding its clientbase in the consumer and industrial products environment.
African Logistics' results are unlikely to reverse significantly over the medium term, but the Group is of the view that good opportunities remain in this
market.
FleetAfrica continues to explore and tender on new fleet management contract opportunities and is pursuing opportunities outside of South Africa.
SG Fleet's focus will remain on increased penetration of existing customers, converting fleet management customers to full leasing services, bringing
new entrants to the outsourced fleet management model, introducing innovative products to major customers and differentiated product and
service propositions.
The Dealerships SA business is anticipating difficult trading conditions to continue as consumers remain under pressure. The weak Rand and potential
interest rate hikes will place pressure on operations. Dealerships SA remain confident that its dealerships are well positioned to continue its good
trading performance.
Dealerships UK is expecting good growth in the new and second hand vehicle market in the UK.
On 30 June 2015 Super Group announced that Mr Neill Davies, a director since November 2009, retired from the Board of directors. The Board would
like to express its appreciation for the valuable input and contribution Neill contributed during his tenure and wishes him a long and fulfilling retirement.
Super Group is also pleased to announce the appointment of Ms Mariam Cassim to the Board as an Independent Non-Executive Director with effect
from 1 July 2015.
Super Group's position as an innovative, integrated mobility solutions company is strong and the Group remains committed to, organically and through
strategic acquisitions, achieve a real increase in earnings for the medium to longer term and unlock shareholder value.
A decision was taken not to declare a dividend for the year ended 30 June 2015. The Board remains of the opinion that Super Group should rather re-
invest cash generated in acquisitions or to repurchase shares.
The reviewed Condensed Consolidated Financial Statements for the year ended 30 June 2015 will be available on the Group's website after 17:00 on
Monday, 24 August 2015 and the presentation to the investor community can be viewed on the Group's website from Tuesday, 25 August 2015 after
12:00. 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
24 August 2015
Sandton
The auditor's report does not necessarily report on all of the information contained in this announcement/financial results. Shareholders are therefore
advised that in order to obtain a full understanding of the nature of the auditor's engagement they should obtain a copy of the auditor's report together
with the accompanying financial information from the company's registered office.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The Condensed Consolidated Financial Statements for the year ended 30 June 2015 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 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 for the year ended 30 June 2015, 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 are relevant to and became effective for the first time in Super Group's financial year commencing 1 July 2014: Offsetting Financial Assets
and Financial Liabilities (Amendments to IAS 32), Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36), Classification
and measurement of contingent consideration (Amendments to IFRS 3), Disclosure on the aggregation of operating segments (Amendments IFRS
8), Measurement of short-term receivables and payables (Amendments to IFRS 13), Restatement of accumulated depreciation (amortisation) on
revaluation (Amendments to IAS 16 and IAS 38) and Inter-relationship of IFRS 3 and IAS 40 (Amendments to IAS 40). The impact of adopting the above
standards and amendments to standards had no material effect on the Condensed Consolidated Financial Statements. The Condensed Consolidated
Financial Statements have been reviewed by the Group's auditors, KPMG Inc. and their unqualified 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
2015 2014
Reviewed Audited
R'000 R'000
Revenue 19 817 915 14 296 765
Trading profit before depreciation and amortisation 2 145 276 1 930 195
Depreciation and amortisation (645 416) (579 641)
Trading profit 1 499 860 1 350 554
Capital items 1 276 (6 045)
Operating profit 1 501 136 1 344 509
Net finance charges (138 646) (102 206)
Profit before taxation 1 362 490 1 242 303
Income tax expense (322 246) (304 609)
Profit for the year 1 040 244 937 694
Profit for the year attributable to:
Non-controlling interests 233 516 208 524
Equity holders of Super Group 806 728 729 170
1 040 244 937 694
Other comprehensive income
Effect of foreign exchange# (17 385) 161 120
Hedge accounting* (67) –
Revaluation of land and buildings* 23 029 23 652
Taxation effect of revaluation of land and buildings* (4 338) (5 838)
Other comprehensive income for the year (net of tax) 1 239 178 934
Total comprehensive income for the year (net of tax) 1 041 483 1 116 628
Total comprehensive income for the year attributable to:
Non-controlling interests 195 599 274 784
Equity holders of Super Group 845 884 841 844
1 041 483 1 116 628
RECONCILIATION OF HEADLINE EARNINGS
Profit attributable to equity holders of Super Group 806 728 729 170
Capital items after tax 1 863 (1 495)
Headline earnings for the year 808 591 727 675
RECONCILIATION OF CORE HEADLINE EARNINGS
Headline earnings for the year 808 591 727 675
Acquisition costs after tax 21 107 5 561
B-BBEE costs after tax 8 401 6 805
Amortisation of intangible assets arising on business combinations after tax 24 191 20 774
Core headline earnings for the year 862 290 760 815
Earnings per share (cents)
Basic 270.4 249.2
Diluted 263.9 241.9
Headline earnings per share (cents)
Basic 271.1 248.7
Diluted 264.5 241.4
Core headline earnings per share (cents)
Basic 289,1 260,0
Diluted 282,1 252,4
# Item of other comprehensive income which will be reclassified to profit or loss in the event of deconsolidation of relevent subsidiary.
* Items of other comprehensive income which will not be reclassified to profit or loss.
CONDENSED CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
30 June 2015 30 June 2014
Reviewed Audited
R'000 R'000
ASSETS
Non-current assets 7 690 203 6 043 454
Property, plant and equipment 3 313 348 2 865 531
Investment property 139 200 120 400
Full maintenance lease assets 1 065 721 554 728
Intangible assets 275 303 199 566
Goodwill 2 420 989 1 887 982
Investments and other non-current assets 133 598 43 650
Deferred tax assets 342 044 371 597
Current assets 7 600 710 6 127 348
Assets held-for-sale 48 065 60 000
Inventories 2 458 192 1 367 803
Trade receivables 2 000 108 1 783 680
Sundry receivables 971 437 875 686
Cash and cash equivalents 2 122 908 2 040 179
Total assets 15 290 913 12 170 802
EQUITY AND LIABILITIES
Capital and reserves
Capital and reserves attributable to equity holders of Super Group 5 021 951 4 268 796
Non-controlling interests 910 729 952 693
Total equity 5 932 680 5 221 489
Liabilities
Non-current liabilities 3 639 691 2 695 026
Fund reserves 370 432 338 948
Non-controlling interest put option and other liabilities 215 282 222 152
Full maintenance lease liabilities 452 670 101 009
Interest-bearing borrowings 2 258 754 1 645 247
Provisions 112 320 155 011
Deferred tax liabilities 230 233 232 659
Current liabilities 5 718 542 4 254 287
Full maintenance lease liabilities 127 760 109 735
Interest-bearing borrowings 279 191 275 238
Non-controlling interest put option liability 61 937 –
Trade and other payables 4 865 235 3 466 019
Income tax payable 182 702 82 550
Provisions 201 717 320 745
Total equity and liabilities 15 290 913 12 170 802
CONDENSED CONSOLIDATED STATEMENT
OF CASH FLOWS
Year ended Year ended
30 June 30 June 2014
2015 Audited
Reviewed Restated(1)
R'000 R'000
Cash flows from operating activities
Operating cash flow 2 122 675 2 004 716
Working capital outflow (102 088) (90 175)
Cash generated from operations 2 020 587 1 914 541
Finance costs paid (262 205) (222 400)
Investment income and interest received 117 278 123 954
Income tax paid (248 815) (293 200)
Dividend paid to non-controlling interest (135 570) (255 588)
Net cash generated from operating activities 1 491 275 1 267 307
Cash flows from investing activities
Net additions to plant and equipment (360 110) (650 805)
Net additions to land, buildings and leasehold improvements (357 876) (114 206)
Net additions to full maintenance lease assets (737 274) (68 789)
Net additions to intangible assets (35 328) (21 535)
Proceeds on disposal of assets held-for-sale – 6 100
Net acquisition of businesses (net of cash acquired) (759 730) (18 147)
Dividends received from equity-accounted investee 42 350 –
Other investing activities 31 972 (85 097)
Net cash outflow from investing activities (2 175 996) (952 479)
Cash flows from financing activities
Net share repurchases (75 937) (64 338)
Net additional investment in existing subsidiaries1 (78 940) (334 639)
Net interest-bearing borrowings raised 590 091 110 070
Net full maintenance lease borrowings raised 371 067 52 510
Net cash inflow/(outflow) from financing activities 806 281 (236 397)
Net increase in cash and cash equivalents 121 560 78 431
Net cash and cash equivalents at beginning of the year 2 040 179 1 872 545
Effect of foreign exchange on cash and cash equivalents (38 831) 89 203
Cash and cash equivalents at end of the year 2 122 908 2 040 179
(1) Additional investment in existing subsidiaries was previously classified as cash flow from investing activities. This has been reclassified to financing activities as mandated
by IAS 7.42A.
CONDENSED CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY
Share
Share Share Other Retained buyback Non-controlling Total
capital premium reserves earnings reserve Total interest (NCI) equity
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Balance at 30 June 2013 – Audited 315 334 1 746 798 713 234 1 447 226 (690 196) 3 532 396 751 917 4 284 313
Changes in equity for the 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
reclassification 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
exercised1 – – – (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
NCI put options movement – – – 28 032 – 28 032 – 28 032
Dividends paid to NCI – – – – – – (255 588) (255 588)
Transactions with equity partners – – – (96 576) – (96 576) 209 030 112 454
SG Fleet share options exercised – – – (116 880) – (116 880) (116 413) (233 293)
SG Fleet initial public offering (IPO) transaction
costs – – – (28 152) – (28 152) (28 039) (56 191)
NCI recognised in respect of subsidiaries
acquired – – – – – – 113 660 113 660
Balance at 30 June 2014 – Audited 315 334 1 746 798 811 741 1 885 329 (490 406) 4 268 796 952 693 5 221 489
Changes in equity for the 2015 year
Other comprehensive income – – 39 156 – – 39 156 (37 917) 1 239
Translation adjustment – – 20 501 – – 20 501 (37 886) (17 385)
Effective portion of hedge – – (36) – – (36) (31) (67)
Revaluation of land and buildings – – 23 029 – – 23 029 – 23 029
Taxation effect of revaluation of land and
buildings – – (4 338) – – (4 338) – (4 338)
Profit for the year – – – 806 728 – 806 728 233 516 1 040 244
Total comprehensive income for the year – – 39 156 806 728 – 845 884 195 599 1 041 483
Realisation of revaluation reserve through
depreciation – – (116) 116 – – – –
Realisation of revaluation reserve through
reclassification of revalued properties – – (4 403) 4 403 – – – –
Share-based payment reserve movement – – – 23 749 – 23 749 2 378 26 127
South African share options exercised – – – (127 146) – (127 146) (228) (127 374)
South African B-BBEE good leaver options
exercised (1) – – – (4 966) – (4 966) – (4 966)
Share buybacks – – – 56 403 56 403 – 56 403
Deferred tax recorded directly in equity on
movement in options – – – 6 256 – 6 256 709 6 965
NCI put options movement – – – 2 640 – 2 640 – 2 640
Dividends paid to NCI – – – – – – (135 570) (135 570)
Additional investment in existing subsidiaries – – – (49 665) – (49 665) (29 275) (78 940)
NCI recognised in respect of subsidiaries
acquired – – – – – – 16 189 16 189
NCI derecognised in respect of subsidiary
disposed – – – – – – (91 766) (91 766)
Balance at 30 June 2015 – Reviewed 315 334 1 746 798 846 378 2 547 444 (434 003) 5 021 951 910 729 5 932 680
(1) A good leaver is an employee who participated in the Broad-Based Black Economic Empowerment Scheme whose employment was terminated due to their death, retrenchment,
retirement or sale of the subsidiary or business which employed the participant.
OPERATING SEGMENTS
Super Group Supply Chain South Africa African Logistics
Year ended Year ended Year ended Year ended Year ended Year ended
30 June 2015 30 June 2014 30 June 2015 30 June 2014 30 June 2015 30 June 2014
Reviewed Audited Reviewed Audited Reviewed Audited
R'000 R'000 R'000 R'000 R'000 R'000
Revenue 19 817 915 14 296 765 7 696 844 6 525 257 624 387 667 708
South Africa 14 487 141 12 169 135
Australia 1 543 177 1 483 768
United Kingdom 3 327 302 48 342
Africa and other 460 295 595 520
Depreciation and amortisation (645 416) (579 641) (385 926) (361 570) (51 461) (37 238)
Net operating expenditure – excluding capital items (17 672 639) (12 366 570) (6 797 223) (5 734 376) (550 572) (552 948)
Trading profit 1 499 860 1 350 554 513 695 429 311 22 354 77 522
Capital items 1 276 (6 045) (5 181) (525) 939 1 867
Operating profit 1 501 136 1 344 509 508 514 428 786 23 293 79 389
Net finance charges (138 646) (102 206) (72 130) (68 171) (2 834) (3 670)
Profit before tax 1 362 490 1 242 303 436 384 360 615 20 459 75 719
Super Group Supply Chain South Africa African Logistics
As at 30 June As at 30 June As at 30 June As at 30 June As at 30 June As at 30 June
2015 2014 2015 2014 2015 2014
Reviewed Audited Reviewed Audited Reviewed Audited
R'000 R'000 R'000 R'000 R'000 R'000
ASSETS
Non-current assets
Property, plant and equipment 3 313 348 2 865 531 1 582 889 1 594 716 395 386 332 734
Investment property 139 200 120 400 – – – –
Full maintenance lease assets 1 065 721 554 728 – – – –
Intangible assets 275 303 199 566 140 324 144 596 – –
Goodwill 2 420 989 1 887 982 521 829 395 320 55 200 48 278
Investments and other non-current assets 133 598 43 650 74 5 208 – –
Current assets
Asset held for sale 48 065 60 000 – – – –
Inventories 2 458 192 1 367 803 358 061 290 317 38 008 33 996
Trade receivables 2 000 108 1 783 680 1 079 967 1 011 646 104 828 104 018
Sundry receivables 971 437 875 686 581 429 507 776 25 366 23 323
Intercompany trade receivables – – 18 706 9 607 701 734
SEGMENT ASSETS 12 825 961 9 759 026 4 283 279 3 959 186 619 489 543 083
South Africa 8 031 123 7 072 637
Australia 1 691 625 1 806 961
United Kingdom 2 313 187 96 226
Africa and other 790 026 783 202
LIABILITIES
Non-current liabilities
Long-term borrowings 2 711 424 1 746 256 537 846 491 776 – –
Non-controlling interest put options and other liabilities 215 282 222 152 125 127 222 152 – –
Fund reserves 370 432 338 948 – – – –
Long-term provisions 112 320 155 011 3 643 – – –
Current liabilities
Short-term borrowings 406 951 384 973 206 311 255 215 – –
Non-controlling interest put option 61 937 – 61 937 – – –
Trade and other payables and provisions 5 066 952 3 786 764 1 490 574 1 488 443 35 491 61 304
Intercompany trade payables – – 33 183 19 053 5 059 5 087
SEGMENT LIABILITIES 8 945 298 6 634 104 2 458 621 2 476 639 40 550 66 391
South Africa 5 224 151 4 987 063
Australia 1 404 574 1 459 627
United Kingdom 2 040 240 62 940
Africa and other 276 333 124 474
Net capex 1 490 588 855 335 287 983 600 303 73 283 39 544
South Africa 1 075 585 763 401
Australia 81 486 52 390
United Kingdom 260 234 15 039
Africa and other 73 283 24 505
Net operating assets 7 896 800 5 825 949 2 745 424 2 446 482 578 942 476 692
Services and intercompany
FleetAfrica SG Fleet Dealerships SA Dealerships UK eliminations
Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended
30 June 2015 30 June 2014 30 June 2015 30 June 2014 30 June 2015 30 June 2014 30 June 2015 30 June 2014 30 June 2015 30 June 2014
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
522 697 382 843 1 616 585 1 552 345 6 069 143 5 150 402 3 278 658 – 9 601 18 210
(102 540) (90 446) (67 728) (64 851) (15 243) (13 971) (10 007) – (12 511) (11 565)
(304 415) (169 878) (988 584) (959 884) (5 881 496) (4 998 818) (3 194 210) – 43 861 49 334
115 742 122 519 560 273 527 610 172 404 137 613 74 441 – 40 951 55 979
– – 34 237 4 932 1 419 – – 552 (9 043)
115 742 122 519 560 307 527 847 177 336 139 032 74 441 – 41 503 46 936
1 819 12 163 (17 278) (22 733) (34 966) (27 244) (22 139) – 8 882 7 449
117 561 134 682 543 029 505 114 142 370 111 788 52 302 – 50 385 54 385
Services and intercompany
FleetAfrica SG Fleet Dealerships SA Dealerships UK eliminations
As at 30 June As at 30 June As at 30 June As at 30 June As at 30 June As at 30 June As at 30 June As at 30 June As at 30 June As at 30 June
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
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
805 469 9 392 12 020 300 168 225 785 294 540 – 730 168 699 807
– – – – – – – – 139 200 120 400
900 231 397 210 165 490 157 518 – – – – – –
– – 58 357 49 149 – 499 69 312 – 7 310 5 322
87 822 87 822 1 169 059 1 250 952 159 029 105 610 428 050 – – –
– – – – – 3 992 – – 133 524 34 450
48 065 – – – – – – – – 60 000
3 176 689 46 078 46 523 776 562 996 278 1 236 307 – – –
168 095 86 754 309 563 347 906 143 366 218 162 171 545 – 22 744 15 194
35 541 16 697 65 537 70 055 1 260 19 877 31 407 – 230 897 237 958
1 282 289 – – 1 125 557 – – (21 814) (11 187)
1 245 017 589 930 1 823 476 1 934 123 1 381 510 1 570 760 2 231 161 – 1 242 029 1 161 944
401 157 67 044 353 051 357 112 – – 603 622 – 815 748 830 324
– – 16 291 – 50 875 – – – 22 989 –
73 695 42 912 296 737 296 036 – – – – – –
– – 100 150 145 576 – – – – 8 527 9 435
70 492 41 053 57 695 78 935 – – – – 72 453 9 770
– – – – – – – – – –
126 148 93 524 595 655 586 267 1 186 231 1 295 370 1 419 941 – 212 912 261 856
17 275 4 039 – – 13 6 – – (55 530) (28 185)
688 767 248 572 1 419 579 1 463 926 1 237 119 1 295 376 2 023 563 – 1 077 099 1 083 200
667 972 44 986 91 597 52 390 64 255 11 758 250 123 – 55 375 106 354
942 255 351 000 814 131 904 701 675 774 877 911 1 321 047 – 819 227 769 163
BUSINESS COMBINATIONS
Purchase
consideration
Interest (received)/
Nature of Operating Date disposed/ (disposed)/ transferred
Subsidiaries and businesses acquired/disposed business segment acquired acquired (%) R'000
GWM (S.A.) Proprietary Limited (GWM) Distributorship Dealerships SA 1 October 2014 (25) (15 000)
Supply Chain
Phola Coaches Proprietary Limited (Phola) Logistics South Africa 1 July 2014 75 110 744
25 August
2014 &
Volvo, Land Rover and Tommy Martin Dealerships Dealerships Dealerships SA 1 June 2015 100 83 389
1 December
Allen Ford (UK) Limited (Allen Ford) Dealerships Dealerships UK 2014 100 614 490
1 July 2014,
1 December
Supply Chain 2014 &
Other acquisitions Logistics South Africa 1 April 2015 100 65 341
Total purchase consideration 858 964
Volvo, Land
Rover and
Tommy
Martin Other
Fair value of assets acquired and liabilities GWM Phola Dealerships Allen Ford acquisitions Total
assumed at date of (disposal)/acquisition: R'000 R'000 R'000 R'000 R'000 R'000
ASSETS
Property, plant and equipment (12 561) 45 718 3 370 34 475 12 698 83 700
Intangible assets – 28 610 – 68 841 – 97 451
Goodwill (2 959) 62 178 56 378 405 562 64 331 585 490
Equity-accounted investee (3 992) – – – – (3 992)
Deferred tax asset (20 925) – – – – (20 925)
Inventories (250 665) 4 601 62 833 769 529 19 517 605 815
Trade and other receivables (120 322) 21 054 – 200 942 27 878 129 552
Provision for impairment of trade receivable 4 099 – – – (13 881) (9 782)
Taxation receivable (6) – – – – (6)
Cash and cash equivalents (59 279) 2 916 – 154 583 1 014 99 234
(466 610) 165 077 122 581 1 633 932 111 557 1 566 537
LIABILITIES
Interest-bearing borrowings – 11 772 – – 1 715 13 487
Trade and other payables (241 957) 10 806 38 857 986 452 44 501 838 659
Income tax payable – 6 314 – 10 399 – 16 713
Provisions (37 794) 1 557 335 10 453 – (25 449)
Deferred tax liabilities – 7 695 – 12 138 – 19 833
(279 751) 38 144 39 192 1 019 442 46 216 863 243
Acquirees' carrying amount at (disposal)/
acquisition (186 859) 126 933 83 389 614 490 65 341 703 294
Non-controlling interest disposed/(acquired) 91 766 (16 189) – – – 75 577
Loss on sale of subsidiary 12 053 – – – – 12 053
Deferred contingent consideration 21 137 – – – – 21 137
Investment in equity-accounted investee
recognised 46 903 – – – – 46 903
Purchase consideration (received)/transferred (15 000) 110 744 83 389 614 490 65 341 858 964
Cash disposed/(acquired) 59 279 (2 916) – (154 583) (1 014) (99 234)
Cash outflow 44 279 107 828 83 389 459 907 64 327 759 730
A 25% shareholding in GWM has been sold effective 1 October 2014. The Group has retained a 25,1% shareholding in GWM and it is being accounted
for as an equity-accounted investee. The sale agreement gives rise to a deferred contingent purchase consideration which will be receivable after the
finalisation of GWM's 30 June 2017 Annual Financial Statements.
The acquisition of Phola positions the Group in the passenger transport sector. The Group performed a purchase price allocation exercise on Phola
whereby intangible assets acquired were seperately valued. The valuation, using projected financial information led to the recognition of R28,6 million
in respect of trade name, customer relationships and customer contracts.
The acquisitions of the Nelspruit Volvo and Land Rover Dealership and Tommy Martin Delta dealerships in Roodepoort bolsters the Dealerships division.
The acquisition of Allen Ford expands the Dealerships division into the United Kingdom. The purchase price allocation exercise on Allen Ford led to
the recognition of R68,8 million in respect of trade name and customer relationships.
The other acquisitions enhance the Supply Chain South Africa division.
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 Phola, the South African dealerships, Allen Ford and the other acquisitions amounting to R62,2 million,
R56,4 million, R405,6 million and R64,3 million respectively. Goodwill of R3,0 million has been derecognised on the disposal of GWM.
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 is expected to be deductible for tax purposes.
The acquisition related costs of R18,3 million relating to these acquisitions are included in the Profit and Loss.
Volvo and
Land Rover Other
Phola Dealerships Allen Ford acquisitions Total
Impact of the acquisitions on the results of the Group R'000 R'000 R'000 R'000 R'000
From the dates of acquisition, the acquired businesses
contributed:
Revenue 184 422 284 051 3 278 658 97 410 3 844 541
Attributable profit/(loss) to equity holders of Super Group (1) 10 992 6 310 34 555 (1 086) 50 771
(1) Profit after tax, non-controlling interest and acquisition cost
Total
Net costs on increase in existing shareholding in subsidiaries: SG Fleet Digistics R'000
Non-controlling interest 20 281 8 994 29 275
Effect of transactions between equity partners on equity 49 929 (264) 49 665
Cash outflow 70 210 8 730 78 940
During the year the Group purchased an additional 1.46% shareholding in SG Fleet for R70,2 million and an additional 4.9% in Digistics for
R8.7 million.
If the above acquisitions had occurred on 1 July 2014 the contribution to revenue would have been R6 428,8 million, profit attributable to equity
holders of Super Group for the year would have been R86,4 million and the profit after tax for the year would have been R90,1 million.
SALIENT FEATURES
Year ended Year ended
30 June 30 June
2015 2014
Reviewed Audited
R'000 R'000
1. INTEREST-BEARING BORROWINGS
SG Fleet interest-bearing borrowings 301 966 333 399
Asset-based finance 920 841 925 811
Corporate bond 477 334 477 060
Acquisition borrowings 452 188 –
Property and other borrowings 385 616 184 215
2 537 945 1 920 485
2. SHARE STATISTICS
Total issued less treasury shares ('000) 298 839 297 039
Weighted number of shares ('000) 298 296 292 565
Diluted weighted number of shares ('000) 305 648 301 422
Net asset value per share (cents) 1 680.5 1 437.1
3. CAPITAL COMMITMENTS
Authorised but not yet contracted for capital commitments, excluding full maintenance lease assets. 341 780 562 135
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
Super Group announced the acquisition of a 75% equity interest in IN tIME, a German-based company
providing time-critical delivery services across Europe. Super Group is acquiring the 75% interest from
Equistone Partners. The enterprise value for IN tIME, via Telo Zwei Vermögensverwaltung GmbH (the holding
company), before deducting the Euro debt of €58,0 million, is €153,5 million (approximately R2,1 billion).
The settlement arrangement will be in the form of Super Group's 75% equity interest of €48,9 million (R685
million) and the Super Group Shareholder's Loan of €30,3 million (R424 million). IN tIME management will retain
a 25% equity interest valued at €16,3 million (R228 million). The valuation of IN tIME was based on a historic PE
multiple of 8.4 times and the effective return on equity, including the shareholders' loans, is 11.9%.
Super Group's investment will be funded via existing cash on hand within the Group and a proposed fully
underwritten renounceable Rights Offer of approximately R900 million. The transaction is subject only to the
successful completion of the proposed Rights Offer.
The IN tIME presentation is available on Super Group's website www.supergroup.co.za
6. SIGNIFICANT EVENTS
Allen Ford (UK) Limited acquisition
The Group acquired 100% of Allen Ford (UK) for R614,5 million. The Statement of Financial Position of the Goup
at 30 June 2015 has been impacted by increases in Property, plant and equipment of R294,5 million, Intangible
assets of R69,3 million, Goodwill of R428,1 million, Inventories of R1 236,3 million, Trade and other receivables
of R203,0 million, Long-term borrowings of R603,6 million and Trade and other payables of R1 419,9 million as
a result of this acquisition. Trading relating to the seven months ended 30 June 2015 has been included in the
Statement of Comprehensive Income.
FleetAfrica contracts
FleetAfrica has managed to secure a number of meaningful contracts, which has increased the Full
maintenance lease assets and Full maintenance lease liabilities by R503,0 million and R363,6 million
respectively, in the Statement of Financial Position.
Phola Coaches Proprietary Limited acquisition
The Group acquired 75% of Phola Coaches for R110,7 million. The Statement of Financial Position of the
Group at 30 June 2015 has been impacted by increases in Goodwill of R62,2 million, Property, plant and
equipment of R42,5 million and Intangibles of R21,3 million as a result of this acquisition. Trading relating to
the 12 months ended 30 June 2015 has been included in the Statement of Comprehensive Income.
GWM (S.A.) Proprietary Limited disposal
During the year the Group disposed of 25% of its shareholding in the GWM Distributorship for R36,1 million
(including present valued deferred contingent consideration). The Statement of Financial Position of the
Group at 30 June 2015 has been impacted by decreases in Inventory of R250,7 million, Trade and other
receivables of R116,2 million and Trade and other payables of R242,0 million as a result of this disposal.
Hierarchy
Level 2 Level 3
R'000 R'000 Valuation technique
7. FAIR VALUE
Property, plant and equipment 1 312 627 Valuation performed by Onyx valuation services. The valuation model
– Land, buildings and leasehold considers the present value of net cash flows to be generated from
improvements 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 139 200
Deferred contingent purchase 69 694 This valuation was performed using the present value of expected
consideration future profits, discounted using a rate of 5,6% after taxation.
FEC Assets 26 466 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 8 268
Digistics put option 114 747 This put option has been based on the average non-controlling interest
non-proportionate share of the profit after tax for the last 3 financial
years preceding the 1 October 2017 expiration 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 5,6%
Safika Oosthuizens put option 61 937 This put option is based on a fair market value of the business at 1
March 2016 minus 15%. The present value has been determined using
an after tax discount rate of 5.6%
The carrying value of all other financial instruments approximates the fair value of the financial instruments as at 30 June 2015.
Movement in level 3 financial instruments measured at fair value
The following table shows a reconciliation from the opening to closing balances of level 3 financial instruments carried at fair value:
30 June 2015
Reviewed
Financial assets – Deferred contingent purchase consideration R'000
Opening balance 10 802
Disposal of subsidiary 21 137
Fair value adjustment to profit and loss 37 755
69 694
Financial liabilities – Put option liabilities
Opening balance 179 324
Movement of NCI liability in statement of changes in equity: (2 640)
Settlement (8 730)
Fair value adjustment 6 090
176 684
Sensitivity analysis
The significant assumption included in the fair value measurement of the deferred contingent purchase consideration relates to the projected
income that is not observable in the market. A change of 100bps to the significant assumption had no material impact on the fair value of the asset.
The significant assumption included in the fair value measurement of the put option liabilities relates to the projected income that is not observable
in the market. The following table shows how the fair value of the liabilities would change if the significant assumption was increased by 100bps:
Increase in
Fair value liability
R'000 R'000
Digistics 114 747 799
Safika Oosthuizens 61 937 2 330
CORPORATE INFORMATION
DIRECTORS:
Executive: P Mountford (Chief Executive Officer) and C Brown (Chief Financial Officer)
Non-Executive: P Vallet (Chairman of the company), Dr E Banda*, M Cassim*, V Chitalu*#, J Newbury* and D Rose*
*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: 24/08/2015 04:57:00 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
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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,
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