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Unaudited Condensed Consolidated Interim Results Of Nu-World For The Six Months Ended 28 February 2017
Nu-World Holdings Limited
(Registration number 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”)
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS OF NU-WORLD
FOR THE SIX MONTHS ENDED 28 FEBRUARY 2017 (“INTERIM RESULTS”)
NET ASSET VALUE PER SHARE 4 363,5 CENTS
CASH GENERATED FROM OPERATIONS R146,6 MILLION
GROUP REVENUE R1 549,4 MILLION
+ 14.0%
NET OPERATING INCOME BEFORE TAXATION R103,8 MILLION
+ 143.6%
NET PROFIT ATTRIBUTABLE TO ORDINARY R73,2 MILLION
SHAREHOLDERS + 65.4%
HEADLINE EARNINGS PER SHARE 344,7 CENTS
+ 63.1%
GROUP CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
28 February 29 February 31 August
2017 2016 % 2016
R'000 R'000 change R'000
Revenue 1 549 494 1 359 483 14,0% 2 590 415
Net operating income 115 693 53 447 116 089
Depreciation 1 379 1 203 2 812
Interest paid 10 494 9 631 14 683
Income before taxation 103 820 42 613 143,6% 98 594
Taxation 26 622 8 699 18 986
Income after taxation 77 198 33 914 79 608
Share of associate
company profit 201 95 36
Net profit for the
period/year 77 399 34 009 79 644
Net profit attributable
to:
Non-controlling interest 4 167 (10 266) (22 484)
Equity holders of the
company 73 232 44 275 65,4% 102 128
77 399 34 009 79 644
Other comprehensive
income:
Exchange differences on
translating foreign
operations (17 450) 24 304 15 899
Total comprehensive
income for the
period/year 59 949 58 313 95 543
Total comprehensive
income attributable to:
Non-controlling interest 2 838 (4 773) (18 569)
Equity holders of the
company 57 111 63 086 114 112
59 949 58 313 95 543
Headline earnings
reconciliation:
Determination of
comprehensive income and
headline earnings
Net profit attributable
to ordinary shareholders 73 232 44 275 65,4% 102 128
Less IAS16 loss /
(gains) on disposal of
fixed assets 87 (104) (9 899)
Total tax effects of
adjustments (24) 19 2 255
Headline earnings 73 295 44 190 65,9% 94 484
CAPITAL DISTRIBUTION 40 851
SUPPLEMENTARY
INFORMATION
Dividend paid (cents) 180,4
Comprehensive income 73 232 44 275 65,4% 102 128
Headline earnings 73 295 44 190 65,9% 94 484
Basic earnings per share
(cents) 344,4 211,8 62,6% 488,4
Headline earnings per
share (cents) 344,7 211,4 63,1% 451,9
Diluted earnings per
share (cents) 326,6 195,5 67,1% 455,3
Dividend per share
(cents) 180,4
Dividend cover 2,5
Shares in issue (total
issued) 22 646 465 22 646 465 0,0% 22 646 465
Shares in issue (less
treasury shares) 21 259 300 20 905 690 1,7% 21 268 900
Shares in issue –
weighted 21 263 754 20 905 690 1,7% 20 910 415
Shares in issue –
diluted 22 419 300 22 645 690 (1,0%) 22 428 900
Operating income as a
percentage of turnover 7,5% 7,4% 7,9%
Debt to equity ratio (%) (6,5%) 12,0% (1,0%)
Effective taxation rate 25,6% 20,4% 19,3%
Net asset value per
share (cents) 4 363,5 4 153,8 5,0% 4 286,6
Intangible assets
Goodwill and
amortisation
Balance at beginning of
period/year 32 758 29 978 29 978
Translation difference (1 661) 3 324 2 780
Balance at end of
period/year 31 097 33 302 32 758
Patent and trademark:
Balance at beginning of
period/year 31 706 31 706 31 706
Balance at end of period 31 706 31 706 31 706
Total intangible assets 62 803 65 008 64 464
SEGMENTAL INFORMATION
Geographical revenue
South Africa 1 109 761 888 577 1 753 783
Offshore subsidiaries 439 733 470 906 836 632
1 549 494 1 359 483 14,0% 2 590 415
Geographical income
South Africa 43 066 40 974 81 404
Offshore subsidiaries 30 166 3 301 20 724
73 232 44 275 65,4% 102 128
GROUP CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
28 February 29 February 31 August
2017 2016 2016
R'000 R'000 R'000
ASSETS
Non-current assets
Fixed assets 25 828 32 234 25 119
Intangible assets 62 803 65 008 64 464
Investment in associate 386 244 185
Deferred taxation 18 225 8 819 22 195
Current assets
Inventory 548 318 510 764 391 860
Stock in transit 90 969 71 796 178 422
Trade and other
receivables 350 060 506 828 500 733
Cash equivalents 242 824 137 844 80 401
Total assets 1 339 413 1 333 537 1 263 379
Equity and liabilities
Ordinary shareholders'
funds 927 656 868 376 911 711
Minority interests 15 602 26 560 12 764
Total shareholders'
funds 943 258 894 936 924 475
Current liabilities
Bank borrowings 182 544 242 301 71 017
Trade and other payables 213 611 196 300 267 887
Total equity and
liabilities 1 339 413 1 333 537 1 263 379
GROUP CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
28 February 29 February 31 August
2017 2016 2016
R0'00 R'000 R'000
Balance as at 1
September 911 711 842 317 842 317
Total attributable
income for the
period/year 73 232 44 275 102 128
Dividend paid (40 854) (37 027) (37 027)
Movement in foreign
currency translation
reserve (16 121) 18 811 11 985
Treasury share movement (312) 0 6 228
Issue of share-based
payment awards 0 0 (13 920)
Balance at end of
period/year 927 656 868 376 911 711
GROUP CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
28 February 29 February 31 August
2017 2016 2016
R'000 R'000 R'000
Cash generated from
operating activities 69 117 (85 628) 8 679
Cash generated from
operations 146 646 (21 542) 98 289
Investment income 216
Interest paid (10 493) (9 631) (14 683)
Dividends paid (40 854) (37 026) (37 027)
Taxation paid (26 182) (17 428) (38 116)
Cash flows from
investing activities (2 398) 1 286 21 814
Purchase of tangible
fixed assets (2 087) (3 714) (4 726)
Proceeds on disposal of
fixed assets 82
Investment in treasury
Shares (311) 6 228
Proceeds on disposal of
assets held for sale 5 000 20 230
Net increase in cash and
cash equivalents 66 719 (84 342) 30 493
Effects of exchange rate
changes on the balance
of cash held in foreign
currencies (15 823) 18 681 17 687
Cash and cash
equivalents at the
beginning of the
period/year 9 384 (38 796) (38 796)
Cash and cash 60 280 (104 457) 9 384
equivalents at the end
of the period/year
COMMENTARY
Corporate information
Nu-World is a limited liability company incorporated and
domiciled in South Africa with subsidiaries and associates in
Australia, Brazil, Dubai, Hong Kong and Lesotho. The main
business of Nu-World, its subsidiaries, joint ventures and
associates includes the importing, manufacturing, assembling,
marketing and distribution of branded consumer goods including
consumer electronics, hi-tech, small electrical appliances,
white goods, liquor and furniture.
Basis of preparation
These Interim Results have been prepared in accordance with the
framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards
(IFRS), the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee, the Companies Act, No 71 of
2008 (as amended) and comply with the disclosure requirements
of IAS 34: Interim Financial Reporting.
The Interim Results have been prepared under the historical
cost convention.
The accounting policies used in the preparation of these
Interim Results are in accordance with IFRS and consistent in
all material respects with those used in the audited annual
financial statements for the year ended 31 August 2016.
The Interim Results are presented in Rand rounded to the
nearest thousand („000).
The condensed consolidated statement of financial position at
28 February 2017 and the related condensed consolidated
statements of comprehensive income, statement of changes in
equity and cash flows for the six months then ended, have not
been reviewed or reported on by the Group's auditors.
The Interim Results have been prepared under the supervision of
Graham Hindle CA (SA) in his capacity as Financial Director.
Operating results
The Group produced strong results for the period ended 28
February 2017 despite the trading environment being difficult
and extremely competitive. Accordingly, the directors are
pleased to report on top-line growth of 14,0% and positive
earnings growth attributable to equity holders of the Company
of 65,4%.
South Africa
Despite the relatively slow economic growth and weakening
consumer demand in the local economy, the South African
operations showed strong positive growth in both sales and
profitability. Sales growth was achieved in all divisions.
Consumer electronics –
Additional models and categories were added during the period
under review. New affordable retail price points were achieved.
Liquor division
International agencies were secured for additional brands of
whisky, gin and vodkas.
Seasonal (summer)
Increased sales and profitability due to better stocking and
planning.
Small domestic appliances
The company added additional ranges in most categories.
General
The Group continues to invest in the development of new models
and designs, to ensure that their customers and consumers are
afforded the latest designs at affordable prices.
The Group's exclusive local and international brands continue
to expand with new ranges, designs, modifications,
specifications and styles.
Offshore operations
Australia
The operating costs pertaining to the Australian operations
were reduced, affording stronger operating profits despite
sales being marginally down. The Group invested in new
technologies and solutions which were required specifically for
the Australian and New Zealand markets.
During the current period under review, the trading results of
the Australian operations were not jeopardised nor distorted by
the impairment of trade debtors (Dick Smith Holdings Limited)
as in the prior comparative period. Insurance is taken on
current trade debtors, wherever possible.
Africa / Middle East / CIS / Brazil
The company managed to show growth in these markets, despite
conditions remaining tough, especially in the oil producing
economies. Uruguay continues to be a strong presence in Latin
America.
India / Pakistan / Sri Lanka
The company has been afforded these new territories as from
January 2017. The population is in excess of 1.5 billion
people. Sub-distributors have been appointed and initial orders
received.
FINANCIAL OVERVIEW
STATEMENT OF COMPREHENSIVE INCOME
Group revenue increased by 14,0% to R 1 549,4 million (February
2016 – R 1 359,5 million).
Income before taxation increased by 143,6% to R 103,8 million
(February 2016 – R 42,6 million).
Total headline earnings per share for the period increased by
63,1% to 344,7 cents (February 2016 – 211,4 cents).
STATEMENT OF FINANCIAL POSITION
The balance sheet remains strong with negative gearing ratio
(debt:equity) of 6,5% (February 2016 – positive 12,0%).
Inventory levels of R 548,3 million increased by 7,4% from
February 2016 (R 510,7 million). Directors and management
remain focused on improving working capital management and
stock turn rates.
The decrease in trade and other receivable of 30,9% to R 350,0
million (February 2016 – R 506,8 million) arose due to the
improved trade collections in both local and offshore
operations, in addition to the reduction of the comparative
period remaining DSE debt that was subsequently fully written
off in the second half of the comparative year.
Trade and other payables increased by 8,8% to R 213,6 million
(February 2016 – R 196,3 million).
Net asset value per share has increased by 5,0% to 4 363,5
cents (February 2016 – 4 153,8 cents).
SUBSEQUENT EVENTS
No events material to the understanding of the report have
occurred during the period between 28 February 2017 and the
date of this report.
On behalf of the board of directors
J.A. Goldberg
Chief Executive Officer
G.R. Hindle
Financial Director
25 April 2017
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
Rosebank Towers, 15 Bierman Avenue, Rosebank, 2196
Company secretary
B.H. Haikney
Auditors
RSM South Africa
Sponsor
Sasfin Capital, (a division of Sasfin Bank Limited)
Directors
M.S. Goldberg (Executive Chairman)
J.A. Goldberg (Chief Executive Officer)
G.R. Hindle (Chief Financial Officer)
Non-executive directors
J.M. Judin (Lead), D. Piaray, R. Kinross, F.J. Davidson
www.nuworld.co.za
Johannesburg
25 April 2017
Date: 25/04/2017 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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