Wrap Text
Unaudited interim condensed consolidated results for the half-year ended 31 August 2015
HOLDSPORT LIMITED
("Holdsport" or "the company" or "the group")
Registration number: 2006/022562/06
Share code: HSP
ISIN: ZAE000157046
UNAUDITED INTERIM CONDENSED CONSOLIDATED RESULTS
FOR THE HALF-YEAR ENDED 31 AUGUST 2015
Sales up 11.9% to R758.0 million
Operating profit up 25.2% to R123.7 million
Core headline earnings per share up 27.1% to 221.1 cents
Interim gross dividend up 41.2% to 120.0 cents per share
GROUP OVERVIEW
The Holdsport Limited group comprises the retail divisions Sportsmans Warehouse and
Outdoor Warehouse and Performance Brands, a wholesale business that includes the
First Ascent and Capestorm brands.
In a challenging retail environment total sales increased 11.9% to R758.0 million
and retail sales increased 13.1% to R733.5 million.
Operating profit increased 25.2% to R123.7 million. Core headline earnings amounted
to 221.1 cents per share, a 27.1% increase on the comparable period.
In evaluating this performance shareholders should take into account that the
aggregate foreign exchange adjustment during this period was a profit of
R5.7 million compared to an aggregate loss of R0.8 million during the prior period.
Core headline earnings excluding the effect of foreign exchange adjustments was
211.5 cents per share, an increase of 20.6% from the 175.4 cents per share in the
first half of last year.
TRADING DIVISIONS
Sales for the various trading divisions were as follows:
Increase
Number Sales in sales
of stores R'm %
Sportsmans Warehouse 36 549.0 10.0
Outdoor Warehouse 22 184.5 23.4
Retail sales 58 733.5 13.1
Performance Brands - 24.5 (14.6)
Total sales 58 758.0 11.9
Like-for-like retail sales grew by 10.5% while the retail divisions experienced
price inflation of approximately 8.9% for the period. The weighted trading area
increased by 7.2% relative to the prior corresponding period.
The Sportsmans Warehouse division trades out of 36 stores. The division opened two
new stores in Hillcrest and George respectively and closed one store in Durban
during the period. Sportsmans will open another store in Secunda in the second half
of the year. Like-for-like sales increased by 8.7%.
The Outdoor Warehouse division currently trades from 22 stores. The division opened
a new store in Woodlands and relocated one store in the West Rand during the period.
Outdoor will open a new store in Pietermaritzburg and relocate the store in Alberton
in the second half of the year. Like-for-like sales increased by 16.5%.
Performance Brands' external sales were 14.6% lower than the previous period but
sales to the group's retail divisions increased by 50.6%.
CASH FLOW
The group's net debt of R92.6 million at the end of this period was 3.1% higher than
the R89.8 million at the end of the prior comparable period.
The aggregate investment in working capital increased by 16.3% due to the increase
in trading space and the effect of the weaker exchange rate on the cost of imported
stock, coupled with slightly earlier imports than the previous year. As a result cash
generated from operations decreased by 16.5% compared to the first half of the
previous year.
The group incurred R33.7 million in maintaining and expanding its retail operations
and anticipates spending a further R37.0 million in the second half of this year.
During the period the group purchased and awarded R14.9 million of Holdsport shares
in terms of and subject to the rules of the 2011 Holdsport Forfeitable Share
Plan (FSP). The forfeitable share plan is expensed over the vesting period and the
expense of R6.0 million for the current period is R0.8 million higher than the
prior period.
SHARE BUY-BACK
The group purchased 507 764 Holdsport shares for R27.3 million in accordance with the
general authority granted by special resolution of the company's shareholders passed
at the company's annual general meetings held on 13 August 2014 and 12 August 2015
and in compliance with the relevant provisions of the JSE Listings Requirements and
the Companies Act (71 of 2008), as amended.
EXPANSION
The group signed lease agreements for a further two new stores to be opened in the
next financial year and will relocate one store.
INTERIM DIVIDEND ANNOUNCEMENT
The directors declared an interim gross dividend of 120.0 cents per share payable
on Monday, 14 December 2015 to ordinary shareholders recorded in the books of the
company at the close of business on Friday, 11 December 2015. The gross dividend is
in line with the dividend policy of the group to have dividends covered
approximately twice by the core headline earnings for the period, which is
221.1 cents per share.
The last day to trade ("cum" the dividend) in order to participate in the dividend
will be Friday, 4 December 2015. The Holdsport Limited ordinary shares will commence
trading "ex" the dividend from the commencement of business on Monday, 7 December 2015
and the record date, as indicated, will be Friday, 11 December 2015.
Ordinary shareholders should take note that share certificates may not be
dematerialised or rematerialised during the period Monday, 7 December 2015 to Friday,
11 December 2015, both dates inclusive.
In terms of the withholding tax on dividends which became effective on 1 April 2012,
the following additional information is disclosed:
- the dividend has been declared out of total reserves;
- the South African tax dividend rate is 15%;
- the net local dividend amount is 102.0 cents per ordinary share for shareholders
liable to pay the dividend tax, and 120.0 cents per ordinary share for
shareholders exempt from the dividend tax;
- the issued share capital of Holdsport at the date of declaration is 43 150 220
ordinary shares; and
- Holdsport's tax reference number is 9618595152.
Certificated ordinary shareholders are reminded that all entitlements to dividends with
a value less than R5.00 per certificated shareholder will be aggregated and the
proceeds donated to a registered charity of the directors' choice, in terms of the
memorandum of incorporation of the company.
Signed on behalf of the board
SA MULLER KG HODGSON
Chairman CEO
Cape Town
9 October 2015
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 August 31 August 28 February
2015 2014 2015
Unaudited Unaudited Audited
R'000 R'000 R'000
ASSETS
Non-current assets
Property, plant and equipment 132 146 152 410 121 287
Goodwill and other intangibles 600 894 613 854 607 373
Total non-current assets 733 040 766 264 728 660
Current assets
Inventories 426 554 368 606 365 396
Trade and other receivables 23 672 28 454 25 619
Cash and cash equivalents 37 405 40 170 129 846
Taxation 10 900 9 630 618
Derivative instruments 4 957 - 387
Total current assets 503 488 446 860 521 866
Total assets 1 236 528 1 213 124 1 250 526
EQUITY AND LIABILITIES
Capital and reserves
Share capital 229 312 229 312 229 312
Treasury shares (39 341) - (12 084)
Share-based payment reserve (27 243) (25 964) (18 278)
Retained earnings 752 365 695 769 735 755
Equity attributable to owners of the company 915 093 899 117 934 705
Non-current liabilities
Loans 130 000 130 000 130 000
Deferred taxation 35 901 40 912 35 674
Straight-lining lease liability 32 759 26 984 28 918
Total non-current liabilities 198 660 197 896 194 592
Current liabilities
Trade and other payables 122 775 115 622 121 229
Derivative instruments - 489 -
Total current liabilities 122 775 116 111 121 229
Total liabilities 321 435 314 007 315 821
Total equity and liabilities 1 236 528 1 213 124 1 250 526
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
6 months 6 months Year
ended ended ended
31 August 31 August 28 February
2015 2014 2015
Unaudited Unaudited Audited
R'000 R'000 R'000
Sales 757 977 677 074 1 544 844
Cost of sales (391 015) (350 635) (809 883)
Gross profit 366 962 326 439 734 961
Other income 2 169 2 874 15 719
Trading expenses (245 441) (230 487) (483 936)
Operating profit 123 690 98 826 266 744
Finance income 4 150 2 646 5 380
Finance cost (5 806) (5 192) (10 285)
Profit before taxation 122 034 96 280 261 839
Taxation (34 523) (27 488) (73 944)
Profit and total comprehensive income for
the period attributable to equity holders
of the company 87 511 68 792 187 895
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
6 months 6 months Year
ended ended ended
31 August 31 August 28 February
2015 2014 2015
Unaudited Unaudited Audited
R'000 R'000 R'000
Cash flows from operating activities
Cash generated from operations 99 745 119 433 325 594
Finance income 4 150 2 646 5 380
Finance costs (5 806) (5 192) (10 285)
Dividends paid (70 901) (62 567) (141 684)
Taxation paid (44 578) (38 155) (80 837)
Net cash (outflows)/inflows from
operating activities (17 390) 16 165 98 168
Cash flows from investing activities
Additions to property, plant and equipment (33 646) (20 544) (47 102)
Proceeds on sale of assets 832 216 43 306
Net cash outflows from investing activities (32 814) (20 328) (3 796)
Cash flows from financing activities
Share-based payment award (14 980) (13 244) (10 019)
Treasury shares acquired (27 257) - (12 084)
Net cash outflows from financing activities (42 237) (13 244) (22 103)
Net (decrease)/increase in cash
and cash equivalents (92 441) (17 407) 72 269
Cash and cash equivalents at the beginning
of the period 129 846 57 577 57 577
Cash and cash equivalents at the end
of the period 37 405 40 170 129 846
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share-
based
Share Treasury payment Retained Total
capital shares reserve earnings equity
R'000 R'000 R'000 R'000 R'000
Equity at 28 February 2014 229 312 - (17 926) 689 544 900 930
Share-based payment reserve:
initial reward - - (13 244) - (13 244)
Share-based payment expense - - 5 206 - 5 206
Dividends paid - - - (62 567) (62 567)
Total comprehensive income
for the year - - - 68 792 68 792
Equity at 31 August 2014 229 312 - (25 964) 695 769 899 117
Share buy-back - (12 084) - - (12 084)
Share-based payment reserve:
initial reward - - 3 225 - 3 225
Share-based payment expense - - 4 461 - 4 461
Dividends paid - - - (79 117) (79 117)
Total comprehensive income
for the year - - - 119 103 119 103
Equity at 28 February 2015 229 312 (12 084) (18 278) 735 755 934 705
Share buy-back - (27 257) - - (27 257)
Share-based payment reserve:
initial reward - - (14 980) - (14 980)
Share-based payment expense - - 6 015 - 6 015
Dividends paid - - - (70 901) (70 901)
Total comprehensive income
for the year - - - 87 511 87 511
Equity at 31 August 2015 229 312 (39 341) (27 243) 752 365 915 093
GROUP SEGMENTAL ANALYSIS
Sportsmans Outdoor Performance
Warehouse Warehouse Brands Corporate Group
R'000 R'000 R'000 R'000 R'000
6 months ended 31 August 2015
(unaudited)
External revenue 549 023 184 489 24 465 - 757 977
Internal revenue - - 52 615 - 52 615
External interest received - - 130 4 020 4 150
External interest paid - - (5) (5 801) (5 806)
Depreciation and amortisation (15 263) (4 591) (1 902) (7 246) (29 002)
Profit/(loss) before taxation 110 878 25 910 17 361 (32 115) 122 034
Capital expenditure 22 186 9 321 884 1 255 33 646
Segment assets 375 191 134 143 112 030 615 164 1 236 528
Segment liabilities 107 395 55 302 4 773 153 965 321 435
6 months ended 31 August 2014
(unaudited)
External revenue 498 951 149 491 28 632 - 677 074
Internal revenue - - 34 930 - 34 930
External interest received - - 64 2 583 2 646
External interest paid - - (2) (5 190) (5 192)
Depreciation and amortisation (11 872) (3 646) (1 925) (7 345) (24 788)
Profit/(loss) before taxation 90 883 17 246 13 799 (25 647) 96 281
Capital expenditure 16 385 3 211 432 516 20 544
Segment assets 322 829 116 120 104 637 669 539 1 213 124
Segment liabilities 77 469 29 380 10 587 196 569 314 006
Year ended 28 February 2015
(audited)
External revenue 1 133 594 360 590 50 660 - 1 544 844
Internal revenue - - 65 877 - 65 877
External interest received - - 187 5 193 5 380
External interest paid - - (23) (10 262) (10 285)
Depreciation and amortisation (25 702) (7 669) (3 850) (14 598) (51 819)
Profit/(loss) before taxation 234 089 55 454 21 762 (49 466) 261 839
Capital expenditure 34 411 9 596 739 2 356 47 102
Segment assets 328 096 114 743 109 220 698 467 1 250 526
Segment liabilities 85 600 24 180 5 602 200 439 315 821
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. The unaudited interim condensed consolidated results for the half-year ended
31 August 2015 have been prepared in accordance with the recognition, measurement,
presentation and disclosure requirements of IAS 34: Interim Financial Reporting,
using the group's accounting policies that are in line with International
Financial Reporting Standards (IFRS), the Companies Act No. 71 of 2008, as
amended, SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee and Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council and have been consistently applied to prior periods.
The unaudited interim condensed consolidated results have been prepared under the
supervision of the group financial director, JP Loubser (CA(SA)).
2. These financial statements incorporate the financial statements of the company, all
its subsidiaries and all entities over which it has operational and financial control.
6 months 6 months Year
ended ended ended
31 August 31 August 28 February
2015 2014 2015
Unaudited Unaudited Audited
R'000 R'000 R'000
3. Trading expenses
Depreciation on property, plant
and equipment 22 522 18 306 38 856
Amortisation of intangibles 6 480 6 482 12 963
Occupancy cost 73 010 63 689 132 638
Straight-lining of leases 3 841 2 394 4 328
Staff costs 92 939 85 270 183 795
Foreign exchange (gains)/losses (6 699) 1 762 (559)
Other operating costs 53 348 52 584 111 915
245 441 230 487 483 936
4. Cash generated from operations
Operating profit 123 690 98 826 266 744
Adjustments for:
Depreciation 22 522 18 306 38 856
Amortisation of intangibles 6 480 6 482 12 963
Profit on sale of assets (567) (123) (7 054)
Fair value (gains)/losses on
derivative instruments (4 570) 405 (471)
Forfeitable share plan expense 6 015 5 206 9 667
Straight-lining of leases 3 841 2 394 4 328
Changes in working capital:
Decrease/(increase) in trade and
other receivables 1 947 (3 672) (837)
Increase in inventories (61 158) (14 170) (10 960)
Increase in trade and other payables 1 545 5 779 12 358
Cash generated from operations 99 745 119 433 325 594
5. Earnings per share and net asset value per share
Earnings per ordinary share (cents)
- Basic 204.7 159.4 436.5
- Headline 203.8 159.2 423.4
- Core headline 221.1 174.0 452.3
- Core headline before foreign exchange effect 211.5 175.4 450.0
Ordinary shares in issue ('000) 43 150 43 150 43 150
Weighted average ordinary shares
in issue ('000) 42 739 43 150 43 044
Net asset value per ordinary share (cents) 2 160.7 2 083.7 2 180.9
Net tangible asset value per ordinary
share (cents) 870.8 796.0 895.4
Reconciliation to core headline earnings
The group uses core headline earnings as a consistent measure of performance
for management purposes. Core headline earnings exclude exceptional once-off
costs and the amortisation of trademarks and the lease straight-lining expense,
and are presented below:
6 months 6 months Year
ended ended ended
31 August 31 August 28 February
2015 2014 2015
Unaudited Unaudited Audited
R'000 R'000 R'000
Basic earnings 87 511 68 792 187 895
Adjusted for (net of taxation):
Profit on sale of assets (408) (88) (5 636)
Headline earnings 87 103 68 704 182 259
Adjusted for (net of taxation):
Amortisation of intangibles 4 667 4 667 9 333
Straight-lining of leases 2 766 1 724 3 116
Core headline earnings 94 536 75 095 194 709
Adjusted for (net of taxation):
Foreign exchange (gains)/losses (4 823) 1 269 (402)
Foreign exchange adjustments in cost of sales 691 (676) (599)
Core headline earnings before foreign
exchange effect 90 404 75 688 193 708
6. Dividend per share
Dividend declared per share (cents)
- Interim 120.0 85.0 85.0
- Final - - 165.0
Normal dividend 120.0 85.0 250.0
- Special - - 99.0
Total dividend 120.0 85.0 349.0
Normal dividend cover (by core
headline earnings) 1.8 2.0 1.8
Registered office: The Mill House, 1 Canterbury Street, Cape Town, 8001
Executive directors: KG Hodgson, B Moritz, JP Loubser
Non-executive directors: SA Muller (Chairman), B Hopkins, P Matlakala, K Moloko,
KA Hedderwick
Company secretary: R Thomas
Transfer secretaries: Computershare Investor Services (Proprietary) Limited,
Ground Floor, 70 Marshall Street, Johannesburg, 2001
9 October 2015
Sponsor: UBS South Africa (Proprietary) Limited
Date: 09/10/2015 08:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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