Wrap Text
Audited group results for the 52 weeks ended 28 June 2015 and cash dividend declaration and changes to the board
Woolworths Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1929/001986/06
Share code: WHL
ISIN: ZAE000063863
("the Group" or "the company")
AUDITED GROUP RESULTS FOR THE 52 WEEKS ENDED 28 JUNE 2015 AND CASH DIVIDEND DECLARATION AND CHANGES TO THE BOARD
FINANCIAL HIGHLIGHTS
TURNOVER AND CONCESSION SALES: +54.9%
ADJUSTED PROFIT BEFORE TAX: +20.5%
HEADLINE EARNINGS PER SHARE: +6.1%
ADJUSTED HEADLINE EARNINGS PER SHARE: +10.4%
TOTAL DIVIDEND PER SHARE (CENTS): 247.0 (2014: 240.0) + 2.9%
RETURN ON EQUITY: 26.3%
COMMENTARY
This year has been transformational. The August 2014 acquisition of the iconic Australian department store
chain, David Jones, enabled us to step change the Group's operations, transforming it into a retailer with
significant scale across sub-Saharan Africa and Australasia.
Group sales (including concession sales) increased by 54.9%, and by 12.0% excluding David Jones. This was
a strong result with good market share gains in both South Africa and Australia. Adjusted profit before tax
increased by 20.5%. Basic and headline earnings grew by 8.3% and 19.4% respectively, and adjusted headline
earnings increased by 24.3%. Adjusted headline earnings per share grew by 10.4%. Earnings per share
declined by 3.8%.
WOOLWORTHS
The new investment in Australia has not detracted from our strategic objectives and plans in South Africa
and the rest of sub-Saharan Africa where Woolworths continues to perform well, despite the constrained
economic environment and the impact of load shedding on our trading performance.
CLOTHING AND GENERAL MERCHANDISE
The late winter impacted sales, but we still managed to produce growth of 9.6% and 4.0% in comparable
stores (including Country Road Group sales in South Africa). Importantly, we saw an improvement in our
kidswear and women's footwear and accessories divisions that had underperformed earlier in the year. Total
Clothing and General Merchandise sales grew by 8.6% excluding Country Road Group sales in South Africa.
Gross profit margin increased by 0.7% to 47.4%. Store costs increased by 19.5%, due to a 6.3% increase
in trading space, extensive store refurbishments and the conversion of previously franchised stores.
Comparable store costs grew by 5.6%. Other operating costs were also well controlled, increasing by 5.7%.
Operating profit grew by 3.3% to R2 094 million and return on sales declined by 0.8% to 16.8%.
FOOD
Our Food business is differentiated on quality, freshness and innovation and we continue to gain market
share through our strategy of building larger format stores and extending our catalogue to offer a complete
shop at competitive prices.
A strong performance well ahead of the market saw sales grow by 13.5%, with price movement of 7.7%. Sales
in comparable stores grew by 6.6%.
Gross profit margin increased by 0.4% to 25.7%. Store costs increased by 13.4% with the addition of converted
franchise stores and a net 10.2% increase in trading space. Other operating costs were well controlled, and
operating profit grew by 25.6% to R1 579 million. Return on sales improved by 0.7% to 7.1%, 0.1% ahead of the
medium-term target.
WOOLWORTHS FINANCIAL SERVICES
The average debtors book grew by 10.7% and the impairment rate was kept to an industry-leading level of
5.4% (June 2014: 4.8%). Net interest income grew by 15.5% and operating costs were 1.1% lower, resulting in
a 21.9% increase in profit before tax. Return on equity was 26.6% (June 2014: 24.3%), above the medium-term
target of 22.0%.
DAVID JONES
The results of David Jones for the eleven months from the acquisition date of 1 August 2014 are included for the
first time and consequently no comparative figures are presented.
Whilst the Australian consumer has remained under pressure and the department store segment has
underperformed, David Jones had an exceptional second half of the year with sales growth of 10.7%. Sales
of A$1 885 million were 6.4% ahead of the comparative 11-month period prior to our acquisition and ahead
of both the department store segment and the overall Australian clothing market. Operating profit of
A$161 million was 28.8% higher than in the comparative 11-month period.
COUNTRY ROAD GROUP
During the year we acquired the remaining 12% interest in Country Road Group (CRG). Full ownership was a
logical step towards unlocking regional synergy opportunities between David Jones and CRG. In Australasia,
sales grew by 11.5% (by 4.7% in comparable stores), trading well ahead of the Australian market.
CRG trading space grew by 23.1%, 17.0% reallocated within David Jones' existing store footprint. This does not
represent new trading space from a WHL Group perspective.
Higher markdowns, particularly in Country Road womenswear, resulted in gross margin declining by 1.1%
to 60.9%. Operating costs were however well controlled, resulting in a 13.3% increase in operating profit, to
A$111 million.
OUTLOOK
We believe that economic conditions in South Africa & Australia will remain constrained, especially in the lower
and middle-income segments of the market. The upper-income segments in which we operate continue to show
some resilience. Trading for the first eight weeks of the new financial year has been positive.
The transformation and integration of David Jones is progressing ahead of expectations.
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.
CHANGES TO THE BOARD OF DIRECTORS
Hubert Brody and Nombulelo Moholi were appointed as independent non-executive directors to the Board
in July 2014.
Patrick Allaway, an Australian national, was appointed as an independent non-executive director with effect
from 1 December 2014.
Zarina Bassa became Chairman of the Risk and Compliance Committee in February 2015 and Thina Siwendu
took over the Chairmanship of the Social and Ethics Committee from Chris Nissen who retired at the
conclusion of the Annual General Meeting (AGM) held on 26 November 2014. The Board expresses its deepest
gratitude to Chris for his contribution, pursuing in particular with passion the delivery of our transformation
strategy.
With effect from May 2015, Lord Rose assumed the role of Chairman of the Sustainability Committee; and to
comply with the JSE Listings Requirements, Tom Boardman, the Lead Independent Director, was appointed
Chairman of the Nominations Committee.
S N Susman I Moir
Chairman Group Chief Executive Officer
Cape Town, 26 August 2015
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
28 June 2015 to 247.0 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 issued share capital at the declaration date is 1 040 938 812 ordinary shares.
The salient dates for the dividend will be as follows:
Last day of trade to receive a dividend Friday, 11 September 2015
Shares commence trading “ex” dividend Monday, 14 September 2015
Record date Friday, 18 September 2015
Payment date Monday, 21 September 2015
Share certificates may not be dematerialised or rematerialised between Monday, 14 September 2015 and
Friday, 18 September 2015, both days inclusive.
ANNUAL GENERAL MEETING
Shareholders are advised that the 2015 Annual General Meeting will be held at 10h00 on Monday,
30 November 2015 in the Auditorium of Woolworths House, 93 Longmarket Street, Cape Town, 8001.
Thobeka Sishuba
Group Secretary
Cape Town, 26 August 2015
GROUP STATEMENT OF COMPREHENSIVE INCOME
Restated*
52 weeks 52 weeks
to 28 Jun to 29 Jun
2015 2014 %
Notes Rm Rm change
Revenue 58 069 39 944 45.4
Turnover and concession sales 6.2 61 970 40 012 54.9
Concession sales 6.2 (5 464) (305) >100
Turnover 56 506 39 707 42.3
Cost of sales 33 356 24 209 37.8
Gross profit 23 150 15 498 49.4
Other revenue 1 447 125 >100
Expenses 19 010 11 680 62.8
Store costs 13 511 7 614 77.4
Other operating costs 5 499 4 066 35.2
Operating profit 5 587 3 943 41.7
Investment income 116 112 3.6
Finance costs 1 494 136 >100
Profit before earnings from joint ventures and associate 4 209 3 919 7.4
Earnings from joint ventures 221 181 22.1
Earnings from associate 2 4 (50.0)
Profit before tax 4 432 4 104 8.0
Tax 1 312 1 114 17.8
Profit for the year 3 120 2 990 4.3
Other comprehensive income:
Amounts that may be reclassified to profit or loss
Net fair value adjustments on financial instruments, after tax 225 (182)
Exchange differences on translation of foreign subsidiaries (1 150) 177
Amounts that may not be reclassified to profit or loss
Post-retirement medical benefit liability-actuarial loss, after tax (6) (6)
Other comprehensive income for the year (931) (11)
Total comprehensive income for the year 2 189 2 979
Profit attributable to: 3 120 2 990
Shareholders of the parent 3 116 2 888
Non-controlling interests 4 102
Total comprehensive income attributable to: 2 189 2 979
Shareholders of the parent 2 180 2 868
Non-controlling interests 9 111
Reconciliation of headline earnings
Earnings attributable to shareholders of the parent 3 116 2 888 7.9
BEE preference dividend 99 103 (3.9)
Basic earnings 3 017 2 785 8.3
Loss/(profit) on disposal of property, plant and equipment, intangible assets
and investment properties 19 (35)
Net impairment of property, plant and equipment and intangible assets 384 16
Tax impact of adjustments (113) 3
Headline earnings 3 307 2 769 19.4
Transaction costs 258 182
Integration and restructuring costs 67 –
Non-recurring finance costs 164 –
Unrealised foreign exchange (gains)/losses (29) 139
Tax impact of adjustments (16) (72)
Adjusted headline earnings 3 751 3 018 24.3
Earnings per share (cents) 2 & 6.1 337.3 350.6 (3.8)
Headline earnings per share (cents) 369.7 348.6 6.1
Adjusted headline earnings per share (cents) 419.4 379.9 10.4
Diluted earnings per share (cents) 2 & 6.1 334.9 346.2 (3.3)
Diluted headline earnings per share (cents) 367.1 344.2 6.7
Adjusted diluted headline earnings per share (cents) 416.4 375.1 11.0
Number of shares in issue (millions) 930.3 759.5 22.5
Weighted average number of shares in issue (millions) 894.4 794.4 12.6
* Certain comparative amounts shown do not correspond to the 2014 Annual Financial Statements and reflect adjustments
made. Refer to note 6.
GROUP STATEMENT OF FINANCIAL POSITION
Restated**
At 28 Jun At 29 Jun
2015 2014
Notes Rm Rm
ASSETS
Non-current assets 33 174 8 192
Property, plant and equipment 3 14 430 3 404
Investment properties 3 78 115
Intangible assets 3 15 700 2 946
Investment in associate 3 2
Investment in joint ventures 891 799
Participation in export partnerships 19 30
Fair value lease adjustment 12 76 –
Other loans 55 106
Derivative financial instruments 8 82 –
Deferred tax 1 840 790
Current assets 8 251 14 077
Inventories 5 881 3 436
Trade and other receivables 1 051 1 067
Derivative financial instruments 8 219 23
Tax 209 9
Cash and cash equivalents 891 9 542
Non-current assets held for sale 3 30 –
TOTAL ASSETS 41 455 22 269
EQUITY AND LIABILITIES
TOTAL EQUITY 14 297 6 952
Equity attributable to shareholders of the parent 14 251 6 629
Non-controlling interests 46 323
Non-current liabilities 18 072 1 918
Interest-bearing borrowings 14 922 623
Operating lease accrual and fair value lease adjustment 12 2 037 614
Post-retirement medical benefit liability 374 349
Provisions 197 –
Derivative financial instruments 8 26 –
Deferred tax 516 332
Current liabilities 9 086 13 399
Trade and other payables 7 699 4 625
Provisions 738 361
Operating lease accrual and fair value lease adjustment 12 122 –
Derivative financial instruments 8 72 185
Tax 259 189
Interest-bearing borrowings 196 8 039
TOTAL LIABILITIES 27 158 15 317
TOTAL EQUITY AND LIABILITIES 41 455 22 269
Net asset book value - per share (cents) 1 532 873
GROUP ANALYSIS
Total assets 41 455 22 269
Woolworths* 10 812 8 986
David Jones 24 139 –
Country Road Group 5 619 4 500
Woolworths Financial Services 885 794
Treasury – Cash and cash equivalents – 7 989
Inventories 5 881 3 436
Woolworths* 2 912 2 433
David Jones 1 864 –
Country Road Group 1 105 1 003
Total liabilities 27 158 15 317
Woolworths* 5 216 4 871
David Jones 5 229 –
Country Road Group 1 834 2 355
Treasury – Interest-bearing borrowings 14 879 8 091
Approved capital commitments 3 636 26 445
Woolworths* 2 032 1 786
David Jones 1 017 –
Country Road Group 587 955
Acquisition of David Jones – 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 2014 Annual Financial Statements and reflect adjustments
made. Refer to note 6.
GROUP STATEMENT OF CASH FLOWS
52 weeks 52 weeks
to 28 Jun to 29 Jun
2015 2014
Notes Rm Rm
Cash flow from operating activities
Cash inflow from trading 8 016 5 375
Working capital movements (657) (407)
Cash generated by operating activities 7 359 4 968
Interest income 160 104
Finance costs paid (1 190) (106)
Tax paid (1 199) (1 047)
Cash generated by operations 5 130 3 919
Dividends received from joint ventures 129 95
Dividends received from associate – 62
Dividends to ordinary shareholders (2 047) (1 969)
Dividends to preference shareholders (99) (103)
Net cash inflow from operating activities 3 113 2 004
Cash flow from investing activities
Net investment in property, plant and equipment, intangible assets
and investment properties (2 828) (1 314)
Acquisition of subsidiary, net of cash acquired 12 (21 447) –
Acquisition of non-controlling interests 13 (2 153) –
Acquisition of franchise operations 4 (68) (396)
Other 69 18
Net cash outflow from investing activities (26 427) (1 692)
Cash flow from financing activities
Settlement of share-based payments through share purchase 5 (308) (71)
Share purchase costs (2) (1)
Rights issue proceeds 5 9 984 –
Finance lease payments (15) (46)
Long–term borrowings raised 15 364 55
Short–term borrowings raised 10 044 –
Borrowings repaid (11 876) (94)
Costs associated with debt and equity raising (598) (169)
Net cash inflow/(outflow) from financing activities 22 593 (326)
Decrease in cash and cash equivalents (721) (14)
Net cash and cash equivalents at the beginning of the year 1 666 1 582
Effect of foreign exchange rate changes (54) 98
Net cash and cash equivalents at the end of the year 891 1 666
GROUP ANALYSIS
Cash inflow from trading 8 016 5 375
Woolworths 5 168 4 329
David Jones 1 784 –
Country Road Group 1 064 1 046
Additions to property, plant and equipment, intangible assets and investment
properties (gross) 2 891 1 939
Woolworths 1 422 1 552
David Jones 504 –
Country Road Group 965 387
GROUP STATEMENT OF CHANGES IN EQUITY
Share- Total Share- Total
holders Non- 52 weeks holders Non- 52 weeks
of the controlling to 28 Jun of the controlling to 29 Jun
parent interests 2015 parent interests 2014
Notes Rm Rm Rm Rm Rm Rm
Shareholders' interest at the
beginning of the year 6 629 323 6 952 5 652 285 5 937
Movements for the year:
Profit for the year 3 116 4 3 120 2 888 102 2 990
Other comprehensive income (936) 5 (931) (20) 9 (11)
Total comprehensive income
for the year 2 180 9 2 189 2 868 111 2 979
Shares issued 5 10 124 – 10 124 246 – 246
Rights issue costs 5 (421) – (421) – – –
Settlement of share-based
payments and share
purchases 5 (308) – (308) (60) – (60)
Share purchase costs (2) – (2) (1) – (1)
Settlement of share-based
payments through share issue 5 (140) – (140) (246) – (246)
Share-based payments 202 – 202 169 – 169
Dividends to shareholders (2 146) – (2 146) (1 999) (73) (2 072)
Acquisition of non-controlling
interests 13 (1 867) (286) (2 153) – – –
Shareholders' interest at the
end of the year 14 251 46 14 297 6 629 323 6 952
Restated
Dividend per ordinary share (cents) 247.0 240.0
Dividend cover (based on headline earnings) 1.4 1.4
Dividend per preference share (cents) 96.5 240.0
SEGMENTAL ANALYSIS
52 weeks 52 weeks
to 28 Jun to 29 Jun
2015 2014 %
Notes Rm Rm change
Revenue
Turnover 56 506 39 707 42.3
Woolworths Clothing and General Merchandise 12 499 11 505 8.6
Woolworths Food 22 352 19 694 13.5
Woolworths Logistics 444 418 6.2
David Jones 12 130 – –
Country Road Group 9 081 8 090 12.2
Other revenue and investment income 1 563 237 >100
Woolworths Clothing and General Merchandise 19 18 5.6
Woolworths Food 93 73 27.4
David Jones 1 512 – –
Country Road Group 39 55 (29.1)
Treasury 100 91 9.9
Intragroup 11 (200) – –
Total group 58 069 39 944 45.4
Gross profit
Woolworths Clothing and General Merchandise 5 925 5 373 10.3
Woolworths Food 5 754 4 983 15.5
David Jones 5 773 – –
Country Road Group 5 537 5 009 10.5
Intragroup 11 161 133 21.1
Total group 23 150 15 498 49.4
Profit before tax-adjusted
Woolworths Clothing and General Merchandise 2 095 2 029 3.3
Woolworths Food 1 580 1 259 25.5
Woolworths Financial Services 221 181 22.1
David Jones 1 492 – –
Country Road Group 1 042 891 16.9
Treasury (1 160) 15 <(100)
Total group-adjusted 5 270 4 375 20.5
Adjustments (838) (271)
Transaction costs (258) (182)
Integration and restructuring costs (67) –
Non-recurring finance costs (164) –
Impairment of property, plant and equipment and intangible assets (378) –
Unrealised foreign exchange gains/(losses) 29 (139)
Profit on sale of investment properties – 50
Profit before tax 4 432 4 104 8.0
NOTES
1. BASIS OF PREPARATION
These preliminary Group Annual Financial Statements comply with IAS 34 Interim Financial Reporting.
Accounting policies used in the preliminary Group Annual Financial Statements are consistent with
the prior year, except for the changes in accounting policy disclosed in note 7, and are the same as
those used to prepare the 28 June 2015 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 preliminary 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. Furthermore, the weighted average
number of shares in issue and the earnings per share measures have been restated by a factor of
1.0477 to reflect the bonus element of the rights offer, in terms of IAS 33: Earnings per share (refer to notes
5 and 6.1).
3. PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND
INVESTMENT PROPERTIES
The Group acquired property, plant and equipment at a fair value of R13 329 million (2014: R1 338 million)
and acquired intangible assets (including goodwill and brands) at a fair value of R14 100 million
(2014: R601 million). This included acquisitions related to business combinations (refer to notes 4 and 12).
Investment properties amounting to R37 million were transferred to property, plant and equipment due
to a change in use in the current year.
Two fixed properties, amounting to R30 million, previously disclosed under property, plant and
equipment (within the Woolworths segment) have been reclassified as non-current assets held for sale.
These properties are subject to suspensive conditions under sale agreements. The directors consider
the conclusion of the sales to be highly probable. At year-end, these properties are recognised at the
lower of their carrying amounts and fair value, less costs to sell. No depreciation has been recognised
on these properties.
4. ACQUISITION OF FRANCHISE OPERATIONS
The Group acquired five previously franchised stores in South Africa for a total purchase consideration
of R39 million. In the prior year, nine previously franchised stores in South Africa and 33 in the rest of
Africa were acquired for a total purchase consideration of R425 million.
Jun 2015 Jun 2014
Rm Rm
Fair value of assets acquired at the date of acquisition
Property, plant and equipment 4 18
Reacquired rights 9 67
Deferred tax liability (3) (19)
Goodwill arising on acquisition 29 359
Consideration 39 425
Prior year amount paid/(accrued) 29 (29)
Cash outflow 68 396
Goodwill of R29 million (2014: R359 million) comprises the fair value of growth and synergies expected to
accrue from the acquisitions that does not qualify for separate recognition.
From the dates of the acquisitions, R74 million of additional revenue and R17 million profit before tax has
accrued. Had the acquisitions been effective from the beginning of the year, the directors consider that,
on a pro forma basis, the contribution to revenue and profit before tax for the 52 weeks ended 28 June
2015 would have been a further R2 million and R1 million respectively.
5. ISSUE AND PURCHASE OF SHARES
167 803 572 (2014: nil) ordinary shares totalling R9 984 million were issued by way of a rights offer on
2 October 2014. Rights offer costs of R421 million have been charged to equity.
3 061 441 (2014: 723 060) ordinary shares at a net cost of R238 million (2014: R52 million) were purchased
from the market and transferred to employees in terms of the Group's share incentive schemes. 1 768 311
(2014: 4 361 450) ordinary shares totalling R140 million (2014: R246 million) were issued and allocated to
employees.
835 560 (2014: 288 026) ordinary shares totalling R70 million (2014: R19 million) were purchased from the
market by Woolworths Proprietary Limited and are held as treasury shares by the Group. 2 031 491
(2014: 1 904 651) ordinary shares totalling R43 million (2014: R46 million) were allocated to employees
in terms of the Group's Restricted Share Plan.
6. RESTATEMENT OF COMPARATIVE FIGURES AND ADDITIONAL DISCLOSURES
6.1 Earnings per share
Earnings per share, dividend per share and other related share measures have been restated to
reflect the bonus element arising from the rights offer (refer to notes 2 and 5).
6.2 Turnover and concession sales
Turnover and concession sales includes the sale of goods by concession operators. Turnover
excludes concession sales on the basis that the inventory sold is owned by the concession
operator at the time of sale. The Group's share of concession sales is recognised as Other revenue
at the time the sale is made.
7. CHANGE IN ACCOUNTING POLICY
The adoption of certain new standards, which became effective in the current year, has resulted in
minor changes to accounting policies and disclosure, none of which have a material impact on the
financial position or performance of the Group.
8. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of trade and other receivables, trade and other payables and borrowings
approximate their fair values.
In terms of IFRS 13: Fair value measurement, the Group's derivative financial instruments are measured
using the fair value hierarchy and determined to be level two with inputs that are observable for the
asset or liability, either directly or indirectly.
9. 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.
10. BORROWING FACILITIES
Unutilised banking and debt facilities amount to R7 102 million (2014: R3 181 million). In terms of the
Memorandum of Incorporation, the Group has unlimited borrowing powers.
11. RELATED PARTY TRANSACTIONS
The Group entered into related party transactions, the substance of which is similar to those explained
in the Group's 2015 Annual Financial Statements. Intragroup adjustments relate to the sale of concession
goods between segments and supply chain distribution adjustments.
12. 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 A$2.1 billion (R21.4 billion).
The acquisition was funded by cash of R10 billion, A$264 million (R2.5 billion) Australian senior debt and
a R9.9 billion equity bridge loan. The equity bridge loan was repaid out of the proceeds of a rights offer
completed on 2 October 2014.
Assets acquired and liabilities assumed
WHL has measured the identifiable assets and liabilities of David Jones at their acquisition-date fair
values. The values are presented below:
Rm A$m
Non-current assets 17 616 1 770
Property, plant and equipment 10 703 1 076
Intangible assets 6 042 607
Fair value lease adjustment 95 9
Deferred tax assets 776 78
Current assets 2 499 251
Inventories 1 675 168
Trade and other receivables 236 24
Tax 431 43
Cash and cash equivalents 157 16
Non-current liabilities 1 815 182
Fair value lease adjustment 1 685 169
Provisions 130 13
Current liabilities 4 489 451
Trade and other payables 2 986 300
Provisions 233 24
Fair value lease adjustment 134 13
Derivative financial instruments 7 1
Interest-bearing borrowings 1 129 113
Total identifiable net assets at fair value 13 811 1 388
Goodwill arising from acquisition 7 793 761
Purchase consideration 21 604 2 149
Purchase consideration transferred 21 383 2 149
Loss on hedging instrument 221 –
Cash and cash equivalents acquired (157) (16)
Cash outflow on acquisition 21 447 2 133
Goodwill of A$760.5 million (R7.8 billion) and the David Jones brand amounting to A$583.5 million
(R5.8 billion) have been recognised. Goodwill represents the value paid in excess of the fair value of
net assets and consists largely of synergies and economies of scale expected from strategic initiatives.
Transaction costs of R247 million have been expensed in the current period and are included in other
operating costs.
As a result of the acquisition, leases were determined to be either favourable or unfavourable in
comparison to market-related rentals, and accordingly, have been disclosed separately as assets
or liabilities on the statement of financial position. Included in the operating lease accrual and fair
value lease adjustment are R1.5 billion non-current liabilities and R122 million current liabilities on the
statement of financial position. These will unwind over the duration of the leases through the statement
of comprehensive income.
The Australian dollar values have been translated at the closing exchange rate at 1 August 2014 of
A$1:R9.95.
13. ACQUISITION OF NON-CONTROLLING INTERESTS
13.1 Country Road Limited
The Group acquired the remaining 12.12% shares in Country Road Limited (Country Road Group) for
a cash consideration of A$213 million (R2.1 billion). As a wholly-owned subsidiary within the Group,
Country Road Group was delisted from the Australian Securities Exchange (ASX). The full ownership
was a logical step to unlocking the regional synergy opportunities between David Jones and
Country Road Group, transforming the Group into a leading southern hemisphere retailer. The
acquisition was funded by new Australian debt facilities.
The excess of the purchase price over the carrying value of the related non-controlling interests in
Country Road Group totalling R1.9 billion has been charged to equity.
13.2 Woolies (Zambia) Limited
The Group acquired the remaining 49% shareholding in Woolies (Zambia) Limited not already
owned by the WHL Group for a total purchase consideration of R29 million.
14. EVENTS SUBSEQUENT TO THE REPORTING DATE
On 30 June 2015, the Group's black economic empowerment employee share ownership scheme
reached maturity. 38 406 566 preference shares converted into 24 345 647 ordinary shares based on the
five-day volume weighted WHL share price of R98.855. Settlements to scheme participants were made
in August 2015.
15. APPROVAL OF PRELIMINARY GROUP ANNUAL FINANCIAL STATEMENTS
The preliminary Group Annual Financial Statements were approved by the Board of Directors
on 26 August 2015.
16. AUDIT OPINION
These preliminary 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.
DIRECTORATE AND STATUTORY INFORMATION
Non-executive Directors
Simon Susman (Chairman), Patrick Allaway (Australian), Peter Bacon (British), Zarina Bassa,
Tom Boardman (Lead Independent Director), Hubert Brody, Andrew Higginson (British), Mike Leeming,
Nombulelo Moholi, Lord Rose (British), Thina Siwendu
Executive Directors
Ian Moir (Group Chief Executive Officer) (Australian), Reeza Isaacs, Sam Ngumeni, Zyda Rylands
Group Secretary
Thobeka Sishuba
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
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