Wrap Text
Unaudited Interim Results for the six months ended 31 December 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”)
UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2015
HIGHLIGHTS
for the six months ended 31 December 2015
+40.0%
Revenue
R12,2 billion
+23.3%
Operating profit
R883 million
+21.2%
HEPS
159 cents
+10.8%
Core HEPS
159 cents
+23.2%
Operating cash flow
R1,2 billion
+22.8%
NAV per share (since 30 June 2015)
2 063 cents
INTRODUCTION
Super Group concluded a number of transactions during the six-month period ended 31 December 2015 which resulted in the
Group expanding its international footprint. The interim results for the Group are commendable given the continued
challenges being faced by some of the Supply Chain Africa businesses, the weakening of the Rand against all major
currencies and the competitive business environment in the geographical locations in which the Group operates.
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 Supply Chain division comprises Supply Chain Africa (consisting of
Supply Chain South Africa and African Logistics) and Supply Chain Europe (representing the 75% interest in IN tIME
acquired effective 2 November 2015); the Fleet Solutions division comprises FleetAfrica and SG Fleet (Super Group's 52%
interest in SG Fleet Group Limited, a listed Australian fleet management business); the Dealerships division comprises
Dealerships SA and Dealerships UK (being the 100% interest in Allen Ford (UK)) and Services.
The performance of the South African logistics and transport industry is closely linked to the prevailing state
of the country's economy. As a result, economic factors including interest rates, exchange rates and inflation have
a significant influence on logistics costs. The competitive logistics industry in South Africa continues to place
pressure on operating margins. The key, however, to survive and remain competitive is to offer an end-to-end integrated
supply chain solution to customers to ensure that turnaround times, inventories and costs are kept to a minimum.
As a result of the turmoil in the mining sector, certain transport companies, including SG Coal, have seen a substantial
decline in volumes.
The fleet management market is largely dependent on decisions by governments, parastatals and large companies to
outsource the management and maintenance of their vehicle fleets. The lead times in securing and rolling-out contracts
of this nature are lengthy, but once secured, the contracts are long-term. This market is driven by the need for
operational efficiencies in the large fleets. The Australian fleet management market including the novated lease segment
has consistently shown good growth. SG Fleet continues to gain traction in the United Kingdom and New Zealand.
The South African dealership market has reported negative growth over the past 18 months on the back of pressure on
consumers, rising new vehicle prices on the back of a weak Rand and the interest rate hikes late last year as well as in
the beginning of this year. The United Kingdom dealership market has shown consistent growth during the period under
review.
During the period under review, Super Group concluded various transactions that are explained in more detail in the
Financial Performance section and the Divisional Review section of this document.
FINANCIAL PERFORMANCE
Revenue increased by 40.0% to R12,2 billion mainly as a result of the inclusion of Allen Ford (UK) for the full period
as compared to only one month in the comparable period to 31 December 2014. IN tIME's results for two months and
NLC Pty Ltd (NLC) results for one month, through SG Fleet; are now also included in the results.
Operating profit increased by 23.3% to R883 million (December 2014: R716 million). The main reasons for operating profit
increasing at a lower rate than revenue is the inclusion of Allen Ford (UK) for the full period at UK dealership margins
and the poor performance by SG Coal within Supply Chain Africa.
The increase in net finance costs by 49.4% to R97 million (December 2014: R65 million) is mainly attributable to the
inclusion of the property and inventory funding of Allen Ford for the period and increases in Full Maintenance Leases,
asset based financing and as a result of other acquisitions.
Profit before taxation increased by 20.7% to R786 million (December 2014: R652 million). The tax rate reduced to 23.6%
(December 2014: 24.7%) as a result of the recognition of the remaining historical assessed losses in South Africa.
Earnings per share (EPS) and headline earnings per share (HEPS) for the period under review increased by 21.5% to
153,9 cents (December 2014: 126,7 cents) and 21.2% to 159,2 cents (December 2014: 131,4 cents), respectively. Core HEPS
increased by 10.8% to 158,5 cents (December 2014: 143,1 cents). Core HEPS excludes the one-off foreign exchange profit
on the IN tIME forward foreign exchange contract, the acquisition costs for both the IN tIME and NLC acquisitions, the
amortisation of intangibles and the Broad-Based Black Economic Empowerment (B-BBEE) related costs. As a result of the
Rights Offer undertaken by Super Group in October 2015, the weighted and diluted weighted number of shares in issue for
the prior comparable period had to be adjusted in terms of IAS 33.28, which resulted in the December 2014 and June 2015
EPS, HEPS and Core HEPS having to be restated.
The increase in total assets of 49.5% to R22 866 million (30 June 2015: R15 291 million) is mainly as a result of newly
acquired assets of IN tIME and NLC during the period under review. The Group's normalised Return on Net Operating
Assets, after tax and excluding the effects of acquisitions during the period, was 15.7% (December 2014: 18.9%).
Super Group's net debt position at 31 December 2015 increased to R2 763 million, with R1 240 million debt raised by SG
Fleet to fund the NLC acquisition. The Rights Offer of R900 million in October 2015 was used to fund the IN tIME
acquisition and the Accelerated Bookbuild of R360 million in December 2015 bolstered the Group's capital structure
following the acquisition of NLC by SG Fleet. Although the Group's total gearing as at 31 December 2015 was 31.9%
(30 June 2015: 16.8%), management is comfortable that the cash generating ability of the newly acquired businesses will
reduce the level of debt over the next six months. The net asset value per share increased by 22.8% for the six months
to 2 063,0 cents at 31 December 2015 (30 June 2015: 1 680,5 cents).
Operating cash flow increased by 23.2% for the period to R1 241 million (December 2014: R1 007 million) as a result of
the increase in EBITDA, with a working capital cash inflow of R154 million (December 2014: R9 million). As a result,
cash generated from operations, after working capital, increased by 37.2% to R1 394 million (December 2014: R1 016 million).
During the year under review, a subsidiary of the company repurchased 30 871 shares, totaling 0.01% of the issued share
capital, at an average share price of R32.62. The total consideration relating to these repurchases was R1 million.
DIVISIONAL REVIEW
Supply Chain
Six months ended Six months ended Year ended
31 December 31 December 30 June
R'000 Change % 2015 2014 2015
Revenue 4 507 415 4 292 223 8 321 231
Supply Chain Africa (2.9) 4 168 570 4 292 223 8 321 231
Supply Chain Europe – 338 845 – –
Operating profit 296 452 302 946 531 807
Supply Chain Africa (9.6) 273 821 302 946 531 807
Supply Chain Europe – 22 631 – –
Operating margin (%)
Supply Chain Africa 6.6 7.1 6.4
Supply Chain Europe 6.7 – –
Profit before taxation 253 562 260 841 456 843
Supply Chain Africa (9.0) 237 445 260 841 456 843
Supply Chain Europe – 16 117 – –
Net operating assets 6 076 582 3 104 420 3 324 366
Supply Chain Africa (0.7)(*) 3 302 117 3 104 420 3 324 366
Supply Chain Europe – 2 774 465 – –
(*)Percentage change since 30 June 2015
The majority of Supply Chain Africa's businesses delivered a strong performance; however the performance by SG Coal was
disappointing. The primary reasons for SG Coal's poor results were due to a substantial drop in deliveries to Eskom,
poor commodity prices and overall volatile mining conditions, aggravated by labour disputes. If SG Coal's results are
excluded, Supply Chain Africa would have increased its revenue, operating profit and profit before taxation by 0.9%,
27.6% and 31.8%, respectively#. SG Consumer reported satisfactory results for the period. Digistics, SG Freight, SG
Bulk, SG Convenience and Super Rent performed well. African Logistics showed a moderate improvement as a result of
exchange rate gains of R38,1 million (2014: R8,1 million).
Supply Chain Europe reflects the two months' results of IN tIME, a Time-critical Delivery Services (TDS) company
headquartered in Germany. Super Group acquired a 75% interest in IN tIME effective 2 November 2015. IN tIME has 20
branches, mainly in Germany but also in Sweden, Hungary, Romania, the Czech Republic and Poland. The results for the two
months were in line with expectations. Super Group took out a forward exchange contract on the purchase consideration
when the deal was concluded and with the Rand weakening over the deal period, realised a one-off foreign exchange gain
of R101 million which off-set related transaction costs of R55 million. The surplus of the foreign exchange profit over
the transaction costs has been included in the Services segment.
(#)Note: The financial information as referenced in this sentence constitutes pro forma financial information. The pro
forma financial information is the responsibility of the Group's Board of directors and is presented for illustrative
purposes only. Because of its nature, the pro forma financial information may not fairly present items in the Statement
of Comprehensive Income.
Fleet Solutions
Six months ended Six months ended Year ended
31 December 31 December 30 June
R'000 Change % 2015 2014 2015
Revenue 1 225 754 1 058 513 2 139 282
FleetAfrica 37.3 320 310 233 282 522 697
SG Fleet 9.7 905 444 825 231 1 616 585
Operating profit 363 721 326 873 676 049
FleetAfrica 62.6 72 434 44 542 115 742
SG Fleet 3.2 291 287 282 331 560 307
Operating margin (%)
FleetAfrica 22.6 19.1 22.1
SG Fleet 32.2 34.2 34.7
Profit before taxation 344 303 321 300 660 590
FleetAfrica 30.3 65 196 50 033 117 561
SG Fleet 2.9 279 107 271 267 543 029
Net operating assets 3 903 515 1 441 719 1 756 386
FleetAfrica 1.7(*) 958 724 588 442 942 255
SG Fleet 261.7(*) 2 944 791 853 277 814 131
(*)Percentage change since 30 June 2015
FleetAfrica delivered an exceptional performance for the period under review. The increase in revenue and operating
profit was achieved on the back of the continued implementation of the Transnet contract as well as securing a number of
key contracts. Although the City of Tshwane's emergency vehicles contract, which includes ambulances and fire engines,
was awarded in July 2015, the roll-out of the contract only commenced early 2016 and therefore not included in this
period's results. The operating profit margin improved to 22.6% compared to the 19.1% achieved in the prior period.
SG Fleet reported a solid set of results, which excluding NLC's results for only one month, would have increased
operating profit and profit before taxation by 10.1% and 11.2%, respectively#. The 100% interest in NLC was acquired
effective 30 November 2015. NLC's results for one month were distorted by the acquisition costs of R33,5 million
incurred. SG Fleet has a fleet size of over 108 000 vehicles. The exchange rate applicable to the Australian Dollar
against the Rand positively impacted the final results of Super Group to an amount of R4,2 million
(December 2014: R13,8 million).
(#)Note: The financial information as referenced in this sentence constitutes pro forma financial information. The pro
forma financial information is the responsibility of the Group's Board of directors and is presented for illustrative
purposes only. Because of its nature, the pro forma financial information may not fairly present certain items in the income.
Six months ended Six months ended Year ended
31 December 31 December 30 June
R'000 Change % 2015 2014 2015
Revenue 6 505 646 3 379 461 9 347 801
Dealerships SA 10.0 3 372 000 3 065 468 6 069 143
Dealerships UK Nm 3 133 646 313 993 3 278 658
Operating profit/(loss) 180 644 80 886 251 777
Dealerships SA 23.5 105 886 85 764 177 336
Dealerships UK Nm 74 758 (4 878) 74 441
Operating margin (%)
Dealerships SA 3.1 2.8 2.9
Dealerships UK 2.4 Nm 2.3
Profit/(loss) before taxation 138 459 68 514 194 672
Dealerships SA 19.5 84 445 70 651 142 370
Dealerships UK Nm 54 014 (2 137) 52 302
Net operating assets 2 372 958 1 589 279 1 996 821
Dealerships SA (5.8)(*) 636 344 695 825 675 774
Dealerships UK 31.5(*) 1 736 614 893 454 1 321 047
*Percentage change since 30 June 2015
Dealerships SA exceeded expectations. The NAAMSA dealer market reported a 0.6% decline in new vehicle sales for the
period ended 31 December 2015 (December 2014: 2.5% decline), while Dealerships new vehicle sales increased by 7.9% for
the same period. Used vehicle sales increased by 15.4%. Excluding Tommy Martin (Roodepoort) acquired from 1 June 2015,
new vehicle sales increased by 1.1%, still ahead of NAAMSA statistics and used vehicle sales increased by 10.5%. There
was good growth in service revenue and parts sales. The increase in sales, together with strict overhead control and
working capital management, resulted in Dealerships' increasing its operating margin to 3.1% (December 2014: 2.8%).
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 six-month
results for the period under review are not comparable to the one-month results reported at December 2014. For the
period to December 2015 Allen Ford performed ahead of expectations with new car sales in line with budget.
Services
The Services segment includes the Corporate, Insurance and the Mauritius operations. The surplus foreign exchange profit
arising from the IN tIME acquisition, net of its transaction costs, has been allocated to the Services segment.
OUTLOOK
The outlook for the South African economy, over the short to medium term, is subdued and reflective of extreme currency
weakness, escalating interest rates and depressed consumer spending.
The Australian economy, despite falling commodity prices, a slowdown in China and deterioration in international trade,
has remained stable.
The Eurozone is set to show moderate GDP growth which is underpinned by healthy consumer demand. The benefits of the low
oil price continues to benefit private consumption and together with an expansionary monetary policy and a gradual
improvement in the labour market, should support positive growth.
Indications suggest that the GDP growth in the United Kingdom should proceed at a steady pace in 2016 despite some
headwinds from the global economy.
Super Group will continue to explore interesting investment opportunities internationally and in South Africa to
maintain the Group's position as an innovative, integrated mobility solutions company.
No interim dividend for the six months ended 31 December 2015 was declared.
The Unaudited Condensed Consolidated Financial Statements for the six months ended 31 December 2015 will be available on
the Group's website after 08:30 on Tuesday, 16 February 2016 and the presentation to the investor community can be
viewed on the Group's website from Tuesday, 16 February 2016 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
16 February 2016
Sandton
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six-month period ended Six-month period ended Year ended
31 December 31 December 30 June
2015 2014 2015
Unaudited Unaudited Audited
Restated(1) Restated(1)
R'000 R'000 R'000
Revenue 12 242 460 8 747 104 19 817 915
Trading profit before depreciation and amortisation 1 270 656 1 045 333 2 145 276
Depreciation and amortisation (364 731) (315 506) (645 416)
Trading profit 905 925 729 827 1 499 860
Capital items (23 010) (13 534) 1 276
Operating profit 882 915 716 293 1 501 136
Net finance charges (96 503) (64 603) (138 646)
Profit before taxation 786 412 651 690 1 362 490
Income tax expense (185 253) (160 853) (322 246)
Profit for the period 601 159 490 837 1 040 244
Profit for the year attributable to:
Non-controlling interests 110 610 104 745 233 516
Equity holders of Super Group 490 549 386 092 806 728
601 159 490 837 1 040 244
Other comprehensive income
Effect of foreign exchange(2) 591 230 (36 576) (17 385)
Hedge accounting(2) (236) – (67)
Revaluation of land and buildings3 – – 23 029
Taxation effect of revaluation of land and buildings(3) – – (4 338)
ther comprehensive income for the period (net of tax) 590 994 (36 576) 1 239
Total comprehensive income for the period (net of tax) 1 192 153 454 261 1 041 483
Total comprehensive income for the period attributable to:
Non-controlling interests 288 248 71 002 195 599
Equity holders of Super Group 903 905 383 259 845 884
1 192 153 454 261 1 041 483
RECONCILIATION OF HEADLINE EARNINGS
Profit attributable to equity holders of Super Group 490 549 386 092 806 728
Capital items after tax 16 820 14 210 1 863
Headline earnings for the period 507 369 400 302 808 591
RECONCILIATION OF CORE HEADLINE EARNINGS
Headline earnings for the period 507 369 400 302 808 591
Acquisition costs after tax 69 208 22 046 21 107
FEC gain on acquisition after tax (98 283) – –
B-BBEE costs after tax 6 193 1 628 8 401
Amortisation of intangible assets arising on business combinations
after tax 20 714 11 944 24 191
Core headline earnings for the period 505 201 435 920 862 290
Earnings per share (cents)
Basic 153,9 126,7 264,4
Diluted 150,9 123,9 258,2
Headline earnings per share (cents)
Basic 159,2 131,4 265,0
Diluted 156,1 128,5 258,8
Core headline earnings per share (cents)
Basic 158,5 143,1 282,6
Diluted 155,4 139,9 276,0
(1) The earnings per share, headline earnings per share and core headline earnings per share have been restated in terms of IAS 33.28
as a result of the rights issue in October 2015.
(2) Item of other comprehensive income which will be reclassified to profit or loss.3 Items of other comprehensive income which will
not be reclassified to profit or loss.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 2015 31 December 2014 30 June 2015
Unaudited Unaudited Audited
R'000 R'000 R'000
ASSETS
Non-current assets 13 333 263 7 177 707 7 690 203
Property, plant and equipment 3 448 462 3 084 062 3 313 348
Investment property 139 200 120 400 139 200
Full maintenance lease assets 1 223 495 803 308 1 065 721
Intangible assets 1 523 440 228 952 275 303
Goodwill 6 555 437 2 374 512 2 420 989
Investments and other non-current assets 113 656 190 615 133 598
Deferred tax assets 329 573 375 858 342 044
Current assets 9 532 254 7 263 775 7 600 710
Assets held-for-sale – – 48 065
Inventories 3 009 520 2 055 953 2 458 192
Trade receivables 2 612 618 2 074 514 2 000 108
Sundry receivables 1 057 223 980 300 971 437
Cash and cash equivalents 2 852 893 2 153 008 2 122 908
Total assets 22 865 517 14 441 482 15 290 913
EQUITY AND LIABILITIES
Capital and reserves
Capital and reserves attributable to equity holders of Super Group 7 120 771 4 590 626 5 021 951
Non-controlling interests 1 553 158 887 511 910 729
Total equity 8 673 929 5 478 137 5 932 680
Liabilities
Non-current liabilities 6 297 109 3 645 240 3 639 691
Fund reserves 531 903 342 883 370 432
Non-controlling interest put option and other liabilities 451 501 290 069 215 282
Full maintenance lease borrowings 562 310 92 912 452 670
Interest-bearing borrowings 4 048 887 2 519 427 2 258 754
Provisions 116 388 150 881 112 320
Deferred tax liabilities 586 120 249 068 230 233
Current liabilities 7 894 479 5 318 105 5 718 542
Non-controlling interest put option liability 64 358 – 61 937
Full maintenance lease borrowings 108 167 81 503 127 760
Interest-bearing borrowings 896 434 257 238 279 191
Trade and other payables 6 379 865 4 696 572 4 865 235
Income tax payable 132 521 145 764 182 702
Provisions 313 134 137 028 201 717
Total equity and liabilities 22 865 517 14 441 482 15 290 913
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Six-month period ended Six-month period ended Year ended
31 December 31 December 30 June
2015 2014 2015
Unaudited Unaudited Audited
Restated(1)
R'000 R'000 R'000
Operating cash flow 1 240 828 1 007 217 2 122 675
Working capital inflow/(outflow) 153 604 8 941 (102 088)
Cash generated from operations 1 394 432 1 016 158 2 020 587
Finance costs paid (147 801) (120 324) (262 205)
Investment income and interest received 59 428 54 424 117 278
Income tax paid (257 461) (105 831) (248 815)
Dividend paid to non-controlling interest (95 630) (56 992) (135 570)
Net cash generated from operating activities 952 968 787 435 1 491 275
Cash flows from investing activities
Net additions to property, plant and equipment (167 648) (317 293) (717 986)
Net additions to full maintenance lease assets (228 291) (340 910) (737 274)
Net additions to intangible assets (11 480) (17 107) (35 328)
Proceeds on disposal of assets held-for-sale 48 065 – –
Acquisition of businesses (net of cash acquired) (1 857 297) (695 799) (759 730)
Dividends received from equity-accounted investee 3 000 – 42 350
Other investing activities 7 040 (566) 31 972
Net cash outflow from investing activities (2 206 611) (1 371 675) (2 175 996)
Cash flows from financing activities
Share issues net of expenses 1 227 115 – –
Net share repurchases (2 575) (72 451) (75 937)
Net additional investment in existing subsidiaries1 – (26 437) (78 940)
Net interest-bearing borrowings raised 471 701 858 468 590 091
Net full maintenance lease borrowings raised/(repaid) 63 843 (33 599) 371 067
Net cash inflow from financing activities 1 760 084 725 981 806 281
Net increase in cash and cash equivalents 506 441 141 741 121 560
Net cash and cash equivalents at beginning of period 2 122 908 2 040 179 2 040 179
Effect of foreign exchange on cash and cash equivalents 223 544 (28 912) (38 831)
Cash and cash equivalents at end of the period 2 852 893 2 153 008 2 122 908
Cash flows from operating activities
(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
Stated Share Share Other Retained buyback Non-controlling Total
capital 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 R'000
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 period
Other comprehensive income – – – (2 833) – – (2 833) (33 743) (36 576)
Translation adjustment – – – (2 833) – – (2 833) (33 743) (36 576)
Profit for the period – – – – 386 092 – 386 092 104 745 490 837
Total comprehensive income for the period – – – (2 833) 386 092 – 383 259 71 002 454 261
Realisation of revaluation reserve through depreciation – – – (66) 66 – – – –
Share-based payment reserve movement – – – – 12 377 – 12 377 1 553 13 930
Share options exercised – – – – (117 955) – (117 955) (228) (118 183)
B-BBEE good leaver options exercised(1) – – – – (1 481) – (1 481) – (1 481)
Movement in treasury shares – – – – – 47 411 47 411 – 47 411
Deferred tax recorded directly in equity on movement in – – – – 20 856 – 20 856 660 21 516
options
NCI put options movement – – – – (4 919) – (4 919) – (4 919)
Dividends paid to NCI – – – – – – (56 992) (56 992)
Additional investment in existing subsidiary – – – – (17 718) – (17 718) (8 719) (26 437)
NCI recognised in respect of subsidiaries acquired – – – – – – – 19 308 19 308
NCI derecognised in respect of subsidiary disposed – – – – – – – (91 766) (91 766)
Balance at 31 December 2014 – Unaudited – 315 334 1 746 798 808 842 2 162 647 (442 995) 4 590 626 887 511 5 478 137
Changes in equity for the period
Other comprehensive income – – – 41 989 – – 41 989 (4 174) 37 815
Translation adjustment – – – 23 334 – – 23 334 (4 143) 19 191
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 period – – – – 420 636 – 420 636 128 771 549 407
Total comprehensive income for the period – – – 41 989 420 636 – 462 625 124 597 587 222
Realisation of revaluation reserve through depreciation – – – (50) 50 – – – –
Realisation of revaluation reserve through – – – (4 403) 4 403 – – – –
reclassification of revalued properties
Share-based payment reserve movement – – – – 11 372 – 11 372 825 12 197
Share options exercised – – – – (9 191) – (9 191) – (9 191)
B-BBEE good leaver options exercised(1) – – – – (3 485) – (3 485) – (3 485)
Movement in treasury shares – – – – – 8 992 8 992 – 8 992
Deferred tax recorded directly in equity on movement in – – – – (14 600) – (14 600) 49 (14 551)
options
NCI put options movement – – – – 7 559 – 7 559 – 7 559
Dividends paid to NCI – – – – – – – (78 578) (78 578)
Additional investment in existing subsidiaries – – – – (31 947) – (31 947) (20 556) (52 503)
NCI recognised in respect of subsidiaries acquired – – – – – – – (3 119) (3 119)
Balance at 30 June 2015 – Audited – 315 334 1 746 798 846 378 2 547 444 (434 003) 5 021 951 910 729 5 932 680
Changes in equity for the period
Other comprehensive income – – – 413 356 – – 413 356 177 638 590 994
Translation adjustment – – – 413 479 – – 413 479 177 751 591 230
Effective portion of hedge – – – (123) – – (123) (113) (236)
Profit for the period – – – – 490 549 – 490 549 110 610 601 159
Total comprehensive income for the period – – – 413 356 490 549 – 903 905 288 248 1 192 153
Realisation of revaluation reserve through depreciation – – – (271) 271 – – – –
Shares issued for cash – 33 751 833 658 – – 32 591 900 000 – 900 000
Share issue expenses – rights issue – – (29 397) – – – (29 397) – (29 397)
Transfer to stated capital 2 900 144 (349 085) (2 551 059) – – – – – –
Bookbuild shares issued for cash(2) 360 000 – – – – – 360 000 – 360 000
Share issue expenses – bookbuild (3 488) – – – – – (3 488) – (3 488)
Share-based payment reserve movement – – – – 15 576 – 15 576 2 542 18 118
Share options exercised – – – – (39 549) – (39 549) (6 096) (45 645)
B-BBEE good leaver options exercised(1) – – – – (1 569) – (1 569) – (1 569)
Movement in treasury shares – – – – – 44 639 44 639 – 44 639
Dividends paid to NCI – – – – – – – (95 630) (95 630)
Deferred tax recorded directly in equity on movement in – – – – 21 333 – 21 333 592 21 925
options
NCI put options movement – – – – (229 294) – (229 294) – (229 294)
Transactions with equity partners - NLC(3) – – – – 156 664 – 156 664 204 297 360 961
NCI recognised in respect of subsidiary acquired - IN tIME(3) – – – – – – – 248 476 248 476
Balance at 31 December 2015 – Unaudited 3 256 656 – – 1 259 463 2 961 425 (356 773) 7 120 771 1 553 158 8 673 929
(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.
(2) A bookbuild is an offer of shares to selected shareholders of the company.
(3) Refer to Business Combinations
(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.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The Condensed Consolidated Interim Financial Statements for the six month period ended 31 December 2015 are prepared in
accordance with International Financial Reporting Standard, (IAS) 34 Interim Financial Reporting, the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by Financial
Reporting Standards Council and the requirements of the Companies Act of South Africa. These Condensed Consolidated
Interim Financial Statements have not been reviewed or audited by the Group's auditors.
The accounting policies applied in the preparation of these Interim Financial Statements for the six month period ended
31 December 2015, are in terms of International Financial Reporting Standards and are consistent with those applied in
the previous Annual Financial Statements. The definitions of capital items, core headline earnings and related
adjustments are included in the accounting policies in the June 2015 Annual Financial Statements. There were no
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 2015.
The Condensed Consolidated Interim 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.
Operating segments
Supply Chain Supply Chain Services and
Super Group Africa Europe FleetAfrica SG Fleet Dealerships SA Dealerships UK intercompany eliminations
Six-month Six-month Six-month Six-month Six-month Six-month Six-month Six-month Six-month Six-month Six-month Six-month Six-month Six-month Six-month Six-month
period period period period period period period period period period period period period period period period
ended ended ended ended ended ended ended ended ended ended ended ended ended ended ended ended
31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
R'000 Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Revenue 12 242 460 8 747 104 4 168 570 4 292 223 338 845 – 320 310 233 282 905 444 825 231 3 372 000 3 065 468 3 133 646 313 993 3 645 16 907
Depreciation
and amortisation (364 731) (315 506) (207 540) (215 218) (13 978) – (70 688) (53 291) (41 661) (32 877) (12 689) (7 566) (10 955) (965) (7 220) (5 589)
Net operating
expenditure –
excluding capital
items (10 971 804) (7 701 771) (3 689 612) (3 770 776) (302 201) – (177 188) (135 449) (572 752) (510 023) (3 253 414) (2 973 941) (3 047 933) (317 906) 71 296 6 324
Trading profit 905 925 729 827 271 418 306 229 22 666 – 72 434 44 542 291 031 282 331 105 897 83 961 74 758 (4 878) 67 721 17 642
Capital items (23 010) (13 534) 2 403 (3 283) (35) – – – 256 – (11) 1 803 – – (25 623) (12 054)
Operating profit 882 915 716 293 273 821 302 946 22 631 – 72 434 44 542 291 287 282 331 105 886 85 764 74 758 (4 878) 42 098 5 588
Net financ
costs and share
of profit in
equity
– accounted
investee (96 503) (64 603) (36 376) (42 105) (6 514) – (7 238) 5 491 (12 180) (11 064) (21 441) (15 113) (20 744) 2 741 7 990 (4 553)
Profit before
tax 786 412 651 690 237 445 260 841 16 117 – 65 196 50 033 279 107 271 267 84 445 70 651 54 014 (2 137) 50 088 1 035
Net capex 407 419 675 310 103 254 233 154 5 506 – 193 154 331 117 49 884 17 521 10 557 61 132 11 845 1 871 33 219 30 515
Supply Chain Supply Chain Services and
Super Group Africa Europe FleetAfrica SG Fleet Dealerships SA Dealerships UK intercompany eliminations
As at As at As at As at As at As at As at As at As at As at As at As at As at As at As at As at
31 December 30 June 31 December 30 June 31 December 30 June 31 December 30 June 31 December 30 June 31 December 30 June 31 December 30 June 31 December 30 June
2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015
R'000 Unaudited Audited Unaudited Audited Unaudited Audited Unaudited Audited Unaudited Audited Unaudited Audited Unaudited Audited Unaudited Audited
ASSETS
Non-current assets
Property, plant and equipment 3 448 462 3 313 348 1 976 020 1 978 275 41 103 – 1 847 805 19 958 9 392 298 026 300 168 355 287 294 540 756 221 730 168
Investment property 139 200 139 200 – – – – – – – – – – – – 139 200 139 200
Full maintenance lease assets 1 223 495 1 065 721 – – – – 1 014 291 900 231 209 204 165 490 – – – – – –
Intangible assets 1 523 440 275 303 103 581 140 324 662 386 – – – 672 025 58 357 – – 79 157 69 312 6 291 7 310
Goodwill 6 555 437 2 420 989 592 751 577 029 1 891 075 – 87 822 87 822 3 314 130 1 169 059 159 705 159 029 509 954 428 050 – –
Investments and other non-current assets 113 656 133 598 – 74 – – – – – – – – – – 113 656 133 524
Current assets
Assets held-for-sale – 48 065 – – – – – 48 065 – – – – – – – –
Inventories 3 009 520 2 458 192 496 475 396 069 1 166 – 4 423 3 176 85 146 46 078 741 381 776 562 1 680 929 1 236 307 – –
Trade receivables 2 612 618 2 000 108 1 344 827 1 184 795 392 973 – 141 331 168 095 429 506 309 563 125 425 143 366 166 789 171 545 11 767 22 744
Sundry receivables 1 057 223 971 437 701 930 606 795 14 605 – 19 107 35 541 86 338 65 537 5 509 1 260 35 638 31 407 194 096 230 897
Intercompany trade receivables – – 25 910 19 407 – – 505 1 282 – – 1 396 1 125 – – (27 811) (21 814)
SEGMENT ASSETS 19 683 051 12 825 961 5 241 494 4 902 768 3 003 308 – 1 269 326 1 245 017 4 816 307 1 823 476 1 331 442 1 381 510 2 827 754 2 231 161 1 193 420 1 242 029
LIABILITIES
Non-current liabilities
Long-term borrowings 4 611 197 2 711 424 470 802 537 846 953 994 – 476 538 401 157 1 517 445 353 051 – – 710 101 603 622 482 317 815 748
Non-controlling interest put options and other
liabilities 451 501 215 282 127 515 125 127 224 303 – – – 22 837 16 291 53 875 50 875 – – 22 971 22 989
Fund reserves 531 903 370 432 – – – – 96 494 73 695 435 409 296 737 – – – – – –
Long-term provisions 116 388 112 320 2 877 3 643 – – – – 104 984 100 150 – – – – 8 527 8 527
Current liabilities
Short-term borrowings 1 004 601 406 951 176 768 206 311 2 856 – 44 947 70 492 235 268 57 695 – – – – 544 762 72 453
Non-controlling interest put options 64 358 61 937 64 358 61 937 – – – – – – – – – – – –
Trade and other payables and provisions 6 692 999 5 066 952 1 895 695 1 526 065 228 843 – 114 861 126 148 1 308 034 595 655 1 131 974 1 186 231 1 815 388 1 419 941 198 204 212 912
Intercompany trade payables – – 30 610 38 242 – – 20 316 17 275 – – 1 026 13 – – (51 952) (55 530)
SEGMENT LIABILITIES 13 472 947 8 945 298 2 768 625 2 499 171 1 409 996 – 753 156 688 767 3 623 977 1 419 579 1 186 875 1 237 119 2 525 489 2 023 563 1 204 829 1 077 099
Net operating assets 13 160 891 7 896 800 3 302 117 3 324 366 2 774 465 – 958 724 942 255 2 944 791 814 131 636 344 675 774 1 736 614 1 321 047 807 836 819 227
BUSINESS COMBINATIONS
Purchase
Interest consideration
Subsidiaries and businesses acquired Nature of business Operating segment Date acquired acquired (%) transferred R'000
Supply Chain – 2 November 2015 75 784 606
SG IN tIME Holding GmbH (IN tIME) Logistics Offshore
NLC Proprietary Limited (NLC) Fleet management SG Fleet 30 November 2015 100 1 845 041
Other acquisitions Logistics & Supply Chain
Dealerships Africa & 1 270
Total purchase consideration 2 630 917
Fair value of assets acquired and liabilities assumed at IN tIME NLC Other acquisitions Total
date of acquisition: R'000 R'000 R'000 R'000
Assets
Property, plant and equipment 33 415 6 952 – 40 367
Intangible assets 613 293 555 063 – 1 168 356
Goodwill 1 715 229 1 765 249 1 270 3 481 748
Inventories 1 418 1 868 – 3 286
Trade receivables 394 421 27 860 – 422 281
Sundry receivables 11 174 21 942 – 33 116
Provision for impairment of trade receivable – (52) – (52)
Cash and cash equivalents 262 409 511 211 – 773 620
3 031 359 2 890 093 1 270 5 922 722
Liabilities
Fund reserves – 111 117 – 111 117
Interest-bearing borrowings 1 513 765 – – 1 513 765
Deferred tax liabilities 181 936 154 029 – 335 965
Trade and other payables 218 384 403 163 – 621 547
Income tax payable 41 296 8 100 – 49 396
Provisions 42 896 7 683 – 50 579
1 998 277 684 092 – 2 682 369
Acquirees' fair value at acquisition 1 033 082 2 206 001 1 270 3 240 353
Less: Non-controlling interest (248 476) – – (248 476)
Equity shares of SG Fleet transferred – (360 960) – (360 960)
Purchase consideration transferred 784 606 1 845 041 1 270 2 630 917
Cash acquired (262 409) (511 211) – (773 620)
Cash outflow 522 197 1 333 830 1 270 1 857 297
The acquisition of IN tIME allows the Group to expand into the time-critical delivery services sector across Europe. The Group performed a purchase
price allocation (PPA) exercise on IN tIME whereby intangible assets acquired were separately valued. The valuation, using projected financial
information led to the recognition of R610 549 000 in respect of customer relationships, brand name and self developed software.
The acquisition of NLC bolsters the SG Fleet division. The Group performed a PPA exercise on NLC whereby intangible assets acquired were separately
valued. The valuation, using projected financial information led to the recognition of R555 063 000 in respect of customer contracts and brand name.
The PPA exercises have not been finalised on the acquisitions. The Group has 12 months from the acquisition dates to finalise the exercises.
Goodwill attributable to other acquisitions arose due to additional amounts paid for previously unrecorded take-on liabilities.
The non-controlling interests have been calculated using the present ownership instruments' proportionate share in the recognised amounts of the
acquiree's identifiable net
Goodwill has been recognised on the acquisition of IN tIME, NLC and the other acquisitions amounting to R1,7 billion, R1,8 billion and R1,3 million respectively.
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 expected to the deductible for tax purposes.
The acquisition costs of R86,6 million relating to these acquisitions are included in the consolidated Statement of Comprehensive Income.
IN tIME NLC Other Acquisitions Total
Impact of the acquisitions on the results of the Group R'000 R'000 R'000 R'000
From the dates of acquisition, the acquired businesses
contributed:
Revenue 338 845 41 233 – 380 078
Attributable profit to equity holders of Super Group(1) 15 742 3 531 – 19 273
(1) Profit after tax and non-controlling interest
If the above acquisitions had occurred on 1 July 2015, the contribution to revenue would have been R1 367,6 million, profit
attributable to equity holders of Super Group for the period would have been R59,1 million and the profit after tax and the
amortisation of the PPA intangible for the period would have been R90,3 million.
Decrease in existing shareholding in subsidiary: SG Fleet
Non-controlling interest 204 297
Effect of transactions between equity partners on equity 156 664
Equity shares of SG Fleet issued 360 961
Equity shares of SG Fleet transferred on purchase of NLC(2) (360 961)
Cash flow –
(2) SG Fleet issued 9.1 million shares to the sellers of NLC as part payment for the acquisition of NLC.
SALIENT FEATURES
As at As at As at
31 December 31 December 30 June
2015 2014 2015
Unaudited Unaudited Audited
R'000 R'000 R'000
1. INTEREST-BEARING BORROWINGS
SG Fleet interest-bearing borrowings 1 603 720 304 245 301 966
Asset-based finance 829 381 982 953 920 841
Corporate bond 477 599 476 554 477 334
Acquisition borrowings – United Kingdom 538 711 428 058 452 188
Acquisition borrowings – Germany 956 851 – –
Property and other borrowings 539 059 584 855 385 616
4 945 321 2 776 665 2 537 945
2. SHARE STATISTICS
Total issued less treasury shares ('000) 345 166 298 580 298 839
Weighted number of shares ('000)(1) 318 698 304 654 305 0881
Diluted weighted number of shares ('000)(1) 325 104 311 532 312 440
Net asset value per share (cents)(2) 2 063,0 1 537,5 1 680,5
(1) As a result of the Rights Offer undertaken by Super Group in October 2015,
the weighted and diluted weighted number of shares in issue had to be
adjusted in terms of IAS 33.28, which resulted in the EPS, HEPS, and Core
HEPS for the six month period ended 31 December 2014 and the year ended 30
June 2015 having to be restated.
(2) Net asset value per share is calculated as the capital and reserves
attributable to equity shareholders of Super Group divided by the total issued
less treasury shares.
3. CAPITAL COMMITMENTS
Authorised but not yet contracted for capital commitments, excluding full
maintenance lease assets. 339 465 422 132 341 780
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
Other than the matters disclosed, the directors are not aware of any matter or
circumstance arising subsequent to the Statement of Financial Position date up
to the date of this report, which will affect these results.
6. SIGNIFICANT EVENTS
SG IN tIME Holdings GmbH acquisition
The Group acquired a 75% interest in the share capital of SG IN tIME Holdings
GmbH for R784,6 million. The Statement of Financial Position as at
31 December 2015 has been impacted by increases in intangible assets of
R662,4 million, goodwill of R1,9 billion, trade and other receivables of
R407,6 million, long-term borrowings of R1,2 billion, deferred tax liabilities of
R200,6 million and trade and other payables of R104,0 million as a result of
this acquisition. Trading relating to the two months ended 31 December 2015
has been included in the Statement of Comprehensive Income.
SG Fleet Group Limited acquisition of NLC Proprietary Limited
SG Fleet Group Limited acquired NLC Proprietary Limited effective 30
November 2015 for a purchase consideration of R2,2 billion. The Statement of
Financial Position as at 31 December 2015 has been impacted by increases in
intangible assets of R574,7 million, goodwill of R1,9 billion, deferred tax
liabilities of R164,5 million and trade and other payables of R467,0 million as a
result of the acquisition. Trading relating to the one month ended
31 December 2015 has been included in the Statement of Comprehensive
Income.
Rights Issue
The Group concluded a fully-underwritten renounceable rights offer effective
October 2015 for R900 million. The rights offer consisted of an offer of
35 019 470 rights offer shares at a price of R25.70 per rights offer share. The
Statement of Financial Position has been impacted by an increased stated capital
of R870,6 million (after share issue expenses).
Exchange rate movements
The Group operates in foreign countries which use currencies other than presentation currency. The main currencies used in the Group's foreign operations are
Australian Dollar, US Dollar, Euro and the Great British Pound. The deterioration of the Rand against these currencies has had an effect on the Group's financial
statements and has resulted in a foreign currency translation adjustment of R591,2 million increasing total equity.
The table below reflects the movement in the exchange rates from the prior reporting periods.
31 December 31 December %
2015 2014 Change
Average currency rate to the South African Rand:
Australian Dollar 9.81 9.77 0.4
US Dollar 13.62 11.00 23.8
Euro 15.02 14.14 6.2
Great British Pound 20.88 17.86 16.9
31 December 30 June %
2015 2015 Change
Closing currency rate to the South African Rand:
Australian Dollar 11.27 9.36 20.4
US Dollar 15.48 12.15 27.4
Euro 16.81 13.55 24.1
Great British Pound 22.78 19.12 19.1
The non-South African operations account for 57% (June 2015: 42%) and 58% (June 2015: 40%) of the Group's total assets and liabilities respectively.
The non-South African operations generated 37% (December 2014: 16%) and 52% (December 2014: 46%) of the Group's revenue and operating profit respectively.
Hierarchy
Level 2 Level 3
R'000 R'000 Valuation technique
7. FAIR VALUE
Property, plant and equipment – Land, buildings 1 376 511 All properties are independently valued every three years,
and leasehold improvements centre in Isando, is independently valued every year. The valuation
model considers the present value of net cash
flows to be generated from 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 consideration 65 107 This valuation was performed using the present value of
expected future profits, discounted using a rate of 5.9%
after taxation and assessed for recoverability.
FEC Assets 5 809 The fair values are based on broker quotes. Similar contacts
are traded in an active market and reflect the actual
transactions in similar instruments.
FEC Liabilities 3 112
Digistics put option 117 317 This put option has been based on the average non-controlling interest
non-proportionate share of the profit after tax for the last three 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 etermined using an after tax discount rate of 5.9%.
SG Coal put option 64 358 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 5.9%.
IN tIME put option 224 303 This put option is calculated as the fair value determined by using the average
audited EBITDA for the preceding three years at an EBITDA multiple of 7,5, adjusted for net debt.
The put option can be exercised from 30 June 2020 to 30 June 2025.
The carrying value of all other financial instruments approximates the fair value of the financial instruments as at 31 December 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:
31 December 2015
Unaudited
Financial assets – Deferred contingent purchase consideration R'000
Opening balance 69 694
Fair value adjustment to profit and loss (4 587)
65 107
Financial liabilities – Put option liabilities
Opening balance 176 684
Movement through statement of changes in equity 229 294
Subsidiary acquired 224 303
Fair value adjustment 4 991
405 978
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. An increase of 100
basis points (bps) 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:
31 December
2015
Fair value Increase in liability
R'000 R'000
Digistics 117 317 1 174
SG Coal 64 358 2 396
IN tIME 224 303 17 625
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 RelationsKeyter 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: 16/02/2016 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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