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Audited condensed consolidated year end results and dividend declaration
NU-WORLD HOLDINGS LIMITED
Registration No. 1968/002490/06
(Incorporated in the Republic of South Africa)
JSE share code: NWL ISIN code: ZAE000005070
(“Nu-World” or “the Group” or “the Company”)
AUDITED CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31 AUGUST 2015 AND DIVIDEND DECLARATION
NET OPERATING INCOME (EBITDA) R 133,6 MILLION + 20.2%
PROFIT ATTRIBUTABLE TO EQUITY HOLDERS R 92,5 MILLION + 23.1%
EPS (CENTS) 430,1 CENTS + 22.3%
DIVIDEND PER SHARE (CENTS) 163,5 CENTS + 47.8%
NET ASSET VALUE PER SHARE (CENTS) 4 029,1 CENTS + 13.6%
Year ended Year ended
31-Aug 31-Aug
2015 2014 %
R000 R000 change
CONDENSED GROUP STATEMENT OF PROFIT
OR LOSS AND OTHER COMPREHENSIVE
INCOME
Revenue 2 159 240 2 108 073
Net operating income 133 587 111 152 20,2%
Depreciation 2 437 1 915
Interest paid 7 180 4 356
Income before taxation 123 970 104 881
Taxation 33 457 26 256
Income after taxation 90 513 78 625
Share of associate company income 41 13
Net profit for the year 90 554 78 638
Other comprehensive income:
Exchange differences on translating 688 7 241
foreign operations
Total comprehensive income for the 91 242 85 879
year
Total profit attributable to:
Non-controlling interest (1 990) 3 475
Equity holders of the company 92 544 75 163 23,1%
90 554 78 638
Total comprehensive income
attributable to:
Non-controlling interest (8 621) 6 798
Equity holders of the company 99 863 79 081
91 242 85 879
Year ended Year ended
31-Aug 31-Aug
2015 2014 %
R000 R000 change
Headline earnings reconciliation:
Determination of attributable
earnings and headline earnings:
Basic and diluted basic earnings 92 544 75 163 23,1%
Less IAS 16 gains on disposal of (437) (156)
plant and equipment
Total tax effects of adjustment 122 44
Total non-controlling interest
effects of adjustments
Headline earnings 92 229 75 051 22,9%
OTHER GROUP INFORMATION
Dividend – proposed / paid 37 027 25 047 47,8%
Earnings per share (cents) 430,1 351,6 22,3%
Headline earnings per share (cents) 428,6 351,1 22,1%
Diluted earnings per share (cents) 408,7 337,3 21,2%
Dividend per share (cents) 163,5 110,6 47,8%
Dividend cover (times) 2,5 3,0
Interest cover (times) 18,3 25,1
Shares in issue (total issued) 22 646 465 22 646 465
Shares in issue (less treasury 20 905 690 21 354 720
shares)
Shares in issue – weighted 21 518 864 21 377 497
Shares in issue – diluted 22 645 690 22 286 220
Operating income as percentage of 6,2% 5,3% 16,8%
revenue
Net debt / (Negative debt) to equity 4,6% (9,0)%
ratio
Effective taxation rate 27,0% 25,0%
Net asset value per share (cents) 4 029,1 3 548,2 13,6%
Intangible assets
Goodwill and amortisation
Balance at beginning of year 30 878 29 510
Translation difference (900) 1 368
Balance at end of year 29 978 30 878
Patents and trademarks
Balance at beginning of year 31 706 31 706
Amount impaired during year - -
Balance at end of year 31 706 31 706
Total intangible assets 61 684 62 584
SEGMENTAL INFORMATION
Year ended Year ended
31-Aug 31-Aug
2015 2014 %
R000 R000 change
Geographical revenue
South Africa 1 443 802 1 325 341
Offshore subsidiaries 715 438 782 732
2 159 240 2 108 073
Geographical income
South Africa 59 532 46 089
Offshore subsidiaries 33 012 29 074
92 544 75 163
Attributable income as percentage of
turnover (%)
South Africa 4,1% 3,5%
Offshore subsidiaries 4,6% 3,7%
4,3% 3,6%
Year ended Year ended
31-Aug 31-Aug
2015 2014
R000 R000
CONDENSED GROUP STATEMENT OF FINANCIAL
POSITION
ASSETS
Non-current assets
Property, plant and equipment 23 148 30 482
Intangible assets 61 684 62 584
Investment in associate 149 107
Deferred taxation 3 301 9 731
Current assets
Assets classified as held for sale 9 940 4 000
Inventory 422 095 373 498
Stock in transit 212 883 89 000
Trade and other receivables 400 893 371 514
Cash and cash equivalents 90 077 105 596
Total assets 1 224 170 1 046 512
EQUITY AND LIABILITIES
Ordinary shareholders’ funds 842 317 757 713
Non-controlling interest 31 333 39 954
Total shareholders’ funds 873 650 797 667
Current liabilities
Bank overdraft 128 873 37 648
Trade and other payables 221 647 211 197
Total equity and liabilities 1 224 170 1 046 512
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Year ended Year ended
31-Aug 31-Aug
2015 2014
R000 R000
Balance as at 1 September 757 713 677 956
Total attributable income for the year 92 544 75 163
Dividend paid (26 205) (13 452)
Movement in foreign currency translation 7 319 3 918
reserve
Treasury shares acquired (15 444) (1 241)
Issue of share-based payment awards 26 390 15 369
Balance as at 31 August 842 317 757 713
CONDENSED GROUP STATEMENT OF CASH FLOWS
Year ended Year ended
31-Aug 31-Aug
2015 2014
R000 R000
Cash absorbed by operating activities (94 257) (43 480)
Cash absorbed by operations (28 735) (10 700)
Interest paid (7 180) (4 356)
Dividend paid (26 205) (13 452)
Taxation paid (32 137) (14 972)
Cash flows from investing activities (763) (3 580)
Purchase of tangible fixed assets (5 720) (3 783)
Proceeds on disposal of fixed assets 4 957 203
Purchase of treasury shares (15 444)
Net decrease in cash and cash equivalents (110 464) (47 060)
Cash and cash equivalents at the beginning of 67 948 110 206
the year
Effect on exchange rate changes on the 3 720 4 802
balance of cash held in foreign currencies
Cash and cash equivalents at end of the year (38 796) 67 948
COMMENTARY
Corporate information
Nu-World is an integrated distributor / manufacturer / importer trading
in branded consumer durables including consumer electronics, hi-tech,
small electrical appliances, white goods, liquor and furniture in
Southern Africa. Internationally, the Group trades in tier 1 branded
consumer electronics and appliances in the rest of Africa, Middle East,
CIS, various countries in South America and Australasia.
Basis of preparation
The audited condensed consolidated annual financial statements for the
year ended 31 August 2015 have been prepared in accordance with the
framework concept and measurement and recognition requirements of
International Financial Reporting Standards (IFRS), and information
required by IAS34: Interim Financial Reporting, the SAICA Reporting
Guides as issued by the Accounting Practices Committee and Financial
Reporting Pronouncements as issued by the Financial Reporting Standards
Council, the JSE Limited’s Listings Requirements and the requirements of
the Companies Act of South Africa. The accounting policies and their
application are consistent, in all material respects, with those detailed
in Nu-World’s 2014 annual report. All new and revised standards that
became effective during the current period were adopted and did not lead
to any significant changes in accounting policies.
The annual financial statements were prepared under the supervision of
the Financial Director, G R Hindle CA(SA).
Auditor’s opinion
The independent auditors, RSM South Africa, and designated auditor Jackie
Kitching, have issued their unqualified audit opinion on the Group’s
annual financial statements and this set of condensed consolidated
financial statements for the year ended 31 August 2015. The audit was
conducted in accordance with International Standards on Auditing. The
directors take full responsibility for the preparation of this condensed
report and the financial information has been correctly derived from the
Group financial statements and are consistent in all material aspects
with the Group financial statements. Their unqualified audit report for
this set of condensed consolidated financial information is available for
inspection at the Company’s registered office.
OPERATING RESULTS
The financial year ended 31 August 2015 has been a successful year for
the Group. While the underlying operations of the Group’s African, Middle
East and Asian businesses all performed well, the deferred tax asset
impairment marred the performance of the Australian Subsidiary.
Over the past year the Group has made significant progress with its
strategic objectives of implementing cost cutting initiatives, the
benefit of which can be seen particularly in the second half of the
financial year.
The Group is focused on becoming a more effective and productive
business. Sustained improvement in financial control and operating
efficiencies are driving the profit growth.
The offshore operations continued to perform particularly well in the
second half of the financial year.
The liquor division expanded its offerings to include an exclusive range
of Irish whiskey as well as additional boutique beers and extended ranges
of branded spirits.
The launch of the new range of Telefunken hi-tech and audio products was
well received by the market and additional new ranges are being
introduced for the upcoming festive season. The initial sales response
has been very positive.
The small domestic appliance division performed well under our various
brands and customer house brands.
The full range of seasonal products, both summer and winter, showed
growth during the year under review.
The launch of additional house brands in consumer electronics in the last
quarter of the financial year assisted in the contribution to the growth
in local revenue. Anticipation is for further growth when annualised.
Nu-World Global (HK) and Nu-World Industries Middle East DMCC continue
expansion into Africa and the Middle East and CIS markets for tier one
branded televisions. The Group is continuously using its resources to
expand these markets and the distributors in the various countries.
Despite the offshore Australian subsidiary making a profit before
interest, the impairment of the deferred tax asset resulted in negative
returns. Going forward, the successful rollout of the JVC branded
consumer electronics product range to additional customers should result
in improved margins to this region. This subsidiary has managed to secure
further major retailer support for the forthcoming financial year.
Effective expense management and improved operational efficiencies is
strengthening the capacity of the Group to achieve its strategy and
objectives.
The Group has consolidated its local warehousing into one distribution
hub that will bring further cost savings in the following financial year.
STATEMENT OF COMPREHENSIVE INCOME
Group revenue increased by 2.4% to R 2 159,2 million (August 2014 –
R 2 108,1 million).
Interest paid increased by 64,8% to R 7,1 million (August 2014 –
R 4,4 million) due to the higher debt levels resulting from the greater
working capital requirements.
Income before taxation increased by 18.2% to R 124,0 million (August 2014
- R 104,9 million) due to improved operating margins and effective
expense management.
Total attributable income for the year increased by 23.1% to R 92,5
million (August 2014 – R 75,2 million).
Earnings per share increased by 22.3% to 430.1 cents (August 2014 – 351.6
cents). Headline earnings per share increased 22.1% to 428.6 cents
(August 2014 – 351.1 cents).
Dividend per share increased 47.8% to 163.5 cents (August 2014 – 110.6
cents). Dividend cover increased to 2.5 times.
STATEMENT OF FINANCIAL POSITION
The balance sheet remains strong with slight gearing (debt: equity) of
4.6%.
The decrease in fixed assets arose primarily from the planned sale of a
portion of the Company’s land and buildings shown currently as assets
held for sale.
Inventory levels of R 422,1 million have increased due to increased
turnover levels and the stocking up of certain customer house brand
product ranges. The stock in transit has increased significantly
primarily due to the introduction of the customer house brand in addition
to the devaluation of the South African rand.
Stocking levels and ranges are being rationalised further and should
improve stock turn rates going forward.
Net asset value per share has increased by 13.6% to 4,029.1 cents (August
2014 – 3,548.2 cents).
Trade and other receivables of R 400,9 million have increased marginally
and in line with turnover volumes.
Trade and other payables of R 221,6 million (August 2014 – R 211,2
million) increased in line with slightly improved turnover levels.
CASH FLOW
Cash absorbed by operations amounted to R 28,7 million (August 2014 :
R 10,7 million) arose from higher debtor levels from slightly increased
turnover, increased inventory levels especially at financial year end as
the Group gears up for the peak season, increased goods in transit levels
and higher import prepayments.
SEGMENT REPORTING
The South African business operations contributed 66.9% of the Group’s
revenue and 64.3% of the Group’s attributable income. Offshore operations
account for 33.1% of turnover and 35.7% of income. Revenue growth across
certain business segments, coupled with improved margins from both local
and offshore operations, resulted in earnings attributable towards
ordinary shareholders improving by 23.1%
BOARD OF DIRECTORS
No changes were made to the board of directors during the year under
review.
CORPORATE ACTIVITIES
There were no corporate activities during the year under review.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ASPECTS
The Group subscribes to, and applies the Code on Corporate Governance
Practices and Conduct as contained in the King III Report on Corporate
Governance. Nu-World is committed to transparent and integrated reporting
in the spirit of King III and the Global Reporting Initiative (GRI).
Nu-World continues its community support and corporate social investment.
The Group has introduced the Nu-World School of Excellence for both
employees and unemployed communities.
SUBSEQUENT EVENTS
No events material to the understanding of this report have occurred
during the period between 31 August 2015 and the date of this report.
DECLARATION OF FINAL DIVIDEND
Notice is hereby given that a final gross dividend of 163,5 cents per
share (2014: 110,6 cents per share) was declared on 27 October 2015 for
the year ended 31 August 2015, payable to shareholders recorded in the
register of Nu-World at the close of business on the record date
appearing below.
The salient dates pertaining to the final dividend are as follows:
Last date to trade ‘’cum’’ dividend Friday, 27 November 2015
Date trading commences
‘’ex’’ dividend Monday, 30 November 2015
Record date Friday, 4 December 2015
Date of payment Monday, 7 December 2015
Ordinary share certificates may not be dematerialised or rematerialised
between Monday, 30 November 2015 and Friday, 4 December 2015, both days
inclusive.
In terms of South African dividends tax, the following additional
information is disclosed:
The Dividend has been declared out of income reserves
Local dividend withholding tax rate – 15%
Net local dividend payable to shareholders who are not exempt from
dividends tax – 138.9750 cents per ordinary share
Total number of ordinary shares in issue – 22 646 465
Company income tax reference number – 9100/085/71/2
Where applicable, dividends in respect of certificated shares will be
transferred electronically to shareholders’ bank accounts on the payment
date. In the absence of specific mandates, dividend cheques will be
posted to shareholders. Ordinary shareholders who hold dematerialised
shares will have their accounts at their CSDP or broker credited on
Monday, 7 December 2015.
ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING
The 2015 Integrated Annual report will be mailed to shareholders prior to
the end of December 2015. The annual general meeting will take place at
10h00 on Wednesday, 10 February 2016, at the registered office of the
Company.
PROSPECTS
Improvements in strategic and operational plans are the focus of
management to grow market share in the consumer electronics and branded
consumer durables sectors, both locally and offshore. This, coupled with
the expanded offshore territories that the Group trades in, should
increase the contribution from these businesses in future years.
Corrective action has been taken in the Australian operations to ensure
the return to profitability.
The Group continues to focus its target market on recognised
International brands for consumer electronics and consumer durables, both
locally and offshore.
Any reference to the Group’s future financial performance contained in
this announcement has not been reviewed or reported on by the Company’s
auditors.
On behalf of the board of directors
J.A. Goldberg G.R. Hindle
Chief Executive Officer Financial Director
27 October 2015
Administration
Registration number 1968/002490/06
(Incorporated in the Republic of South Africa)
JSE share code: NWL
ISIN code: ZAE000005070
Registered office
35 3rd Street, Wynberg, Sandton 2199
Republic of South Africa
Tel +27 (11) 321 2111
Fax +27 (11) 440 9920
Transfer secretaries
Computershare Investor Services (Pty) Ltd
70 Marshall Street, Johannesburg 2001
Company secretary
B.H. Haikney
Auditors
RSM South Africa
Directors
M.S. Goldberg (Executive Chairman),
J.A. Goldberg (Chief Executive),
G.R. Hindle (Financial Director)
Non-executive directors
J.M. Judin (Lead)
D. Piaray
R. Kinross
www.nuworld.co.za
27 October 2015
Sponsor
Sasfin Capital,
(a division of Sasfin Bank Limited)
Date: 27/10/2015 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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