Wrap Text
Abridged audited Group financial results for the year ended 30 June 2017 and cash dividend declaration
Choppies Enterprises Limited
(Registration number 2004/1681)
BSE Share code : CHOPPIES (Primary Listing)
JSE share code : CHP ( Secondary Listing)
ISIN: BW0000001072
("Choppies" or the "Company")
CHOPPIES ENTERPRISES : ABRIDGED AUDITED GROUP FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2017 AND CASH DIVIDEND DECLARATION
Key information
- Revenue up 20%
- Gross profit up 30%
- Asset value up 20%
- Footfall up 29%
- HEPS down 8%
- EBITDA up 15%
- Retail space up 21%
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Year ended 30 June 2017 Year ended 30 June 2016
P ' 000 P ' 000
Revenue 8 852 397 7 369 005
Cost of sales (6 979 223) (5 924 214)
Gross profit 1 873 174 1 444 791
Other income 39 749 52 265
Operating income 1 912 923 1 497 056
Expenditure (1 773 975) (1 348 442)
Administrative expenses (1 430 322) (1 086 843)
Selling and distribution expenses (56 416) (49 022)
Other operating expenses (287 237) (212 577)
Operating profit before interest 138 948 148 614
1.57% 2.02%
Interest cost (53 889) (26 664)
Interest income 10 930 5 450
Profit before taxation 95 989 127 400
Taxation (21 349) (22 495)
Profit for the year 74 640 104 905
Attributable to:
Owners of the company 83 923 109 527
Non-controlling interests (9 283) (4 622)
Other comprehensive income
Foreign currency translation differences from foreign operations (net of taxes) 3 186 (19 861)
Attributable to:
Owners of the company 5 721 (21 055)
Non-controlling interests (2 535) 1 194
Profit and total comprehensive income for the year 77 826 85 044
Attributable to:
Owners of the company 89 644 88 472
Non-controlling interests (11 818) (3 428)
Basic earnings per share - Thebe 6.50 8.48
Diluted earnings per share - Thebe 6.50 8.48
Basic Headline earnings per share - Thebe 6.68 7.25
Diluted headline earnings per share - Thebe 6.68 7.25
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Year ended 30 June 2017 Year ended 30 June 2016
P ' 000 P ' 000
Assets
Non-current assets 1 874 559 1 740 579
Plant and equipment 1 206 087 1 082 968
Deferred taxation 105 267 51 431
Investments in new projects 46 651 95 560
Goodwill 516 554 510 620
Current assets 1 547 005 1 115 556
Inventories 1 006 479 703 539
Investments 3 3
Advances and deposits 93 638 83 212
Taxation refundable 2 045 -
Trade and other receivables 238 043 191 444
Amounts due from related entities 19 051 4 901
Cash and cash equivalents 187 746 132 457
Total assets 3 421 564 2 856 135
Equity and liabilities
Equity 1 514 889 1 473 593
Stated capital 906 196 875 476
Preference shares 87 87
Retained earnings 682 216 634 823
Treasury shares (30 720)
Non-controlling interests (13 211) (1 393)
Foreign currency translation reserve (29 679) (35 400)
Non-current liabilities 670 695 468 072
Long term borrowings 557 546 412 897
Deferred taxation 38 298 -
Deferred lease liabilities 74 851 55 175
Current liabilities 1 235 980 914 470
Current portion of deferred lease liabilities 5 988 4 651
Bank overdrafts 110 977 80 371
Trade and other payables 994 055 694 411
Amounts due to related entities 1 499 9 551
Taxation payable 9 370 20 027
Current portion of long term borrowings 114 091 105 459
Total equity and liabilities 3 421 564 2 856 135
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Particulars Stated capital Preference shares Retained earnings Treasury Shares Foreign currency Non-controlling Total
translation reserve interest
P ' 000 P ' 000 P ' 000 P ' 000 P ' 000 P ' 000 P ' 000
Balance at 30 June 2015 875 476 86 588 286 - (14 345) 2 035 1 451 538
Total comprehensive income for the year - - 109 527 - (21 055) (3 428) 85 044
Profit - - 109 527 - - (4 622) 104 905
Other comprehensive income - - - - (21 055) 1 194 (19 861)
Transactions with owners - 1 (62 990) - - - (62 989)
Dividend declared - - (62 990) - - - (62 990)
Issue of preference shares - 1 - - - - 1
Balance at 30 June 2016 875 476 87 634 823 - (35 400) (1 393) 1 473 593
Total comprehensive income for the year - - 83 923 - 5 721 (11 818) 77 826
Profit - - 83 923 - - (9 283) 74 640
Other comprehensive income - - - - 5 721 (2 535) 3 186
Transactions with owners 30 720 - (36 530) (30 720) - - (36 530)
Issue of ordinary shares 30 720 - - - - - 30 720
Purchase of treasury shares - - - (30 720) - - (30 720)
Dividend declared - - (36 530) - - - (36 530)
Balance at 30 June 2017 906 196 87 682 216 (30 720) (29 679) (13 211) 1 514 889
SEGMENTAL RESULTS
2017 Botswana South Africa Zimbabwe Other regions Total
P ' 000 P ' 000 P ' 000 P ' 000 P '000
Statement of profit or loss and other comprehensive
income
Revenue:
Trading income 4 044 027 2 864 087 1 366 116 578 167 8 852 397
Other income 26 446 10 077 1 592 1 634 39 749
Total segment revenue 4 070 472 2 874 164 1 367 708 579 801 8 892 145
Reportable segment gross profit 967 047 582 455 241 635 82 037 1 873 174
Reportable segment profit/(loss) before taxation 212 002 (56 528) 11 124 (70 609) 95 989
Reportable segment depreciation 92 294 72 008 20 668 18 239 203 209
Reportable segment EBITDA 321 064 33 386 39 228 (51 522) 342 156
Reportable segment profit/(loss) after taxation 164 557 (43 955) 6 038 (52 000) 74 640
Statement of financial position
Reportable segment assets 1 478 828 1 067 879 508 902 365 955 3 421 564
Reportable segment liabilities 920 080 596 626 233 234 156 735 1 906 675
2016 Botswana South Africa Zimbabwe Other regions Total
P ' 000 P ' 000 P ' 000 P ' 000 P '000
Statement of profit or loss and other comprehensive
income
Revenue:
Trading income 4 545 097 1 534 999 1 201 593 87 316 7 369 005
Other income 45 926 4 540 1 762 37 52 265
Total segment revenue 4 591 023 1 539 539 1 203 355 87 353 7 421 270
Reportable segment gross profit 925 692 316 153 188 709 14 237 1 444 791
Reportable segment profit/(loss) before taxation 261 791 (93 630) (16 225) (24 536) 127 400
Reportable segment depreciation 77 517 49 911 17 433 3 243 148 104
Reportable segment EBITDA 353 134 (43 105) 7 679 (20 991) 296 717
Reoportable segment profit/(loss) after taxation 203 202 (68 079) (12 384) (17 834) 104 905
Statement of financial position
Reportable segment assets 1 384 022 745 168 531 327 195 618 2 856 135
Reportable segment liabilities 750 693 291 250 270 262 70 337 1 382 542
CONSOLIDATED STATEMENT OF CASH FLOWS
Particulars Year ended 30 June 2017 Year ended 30 June 2016
P ' 000 P ' 000
Net cash flows generated from operating activities 211 655 199 039
Net cash flows used in investment activities (286 364) (567 125)
Net cash flows generated from financing activities 99 392 138 917
Movement in cash and cash equivalents 24 683 (229 169)
Cash and cash equivalents at the begining of the year 52 086 281 255
Cash and cash equivalents at the end of the year 76 769 52 086
COMMENTARY
1. Basis of preparation and accounting policies
The abridged consolidated financial results and financial position of Choppies Enterprises Limited are extracted from the group annual financial statements prepared in accordance with International Financial Reporting Standards ("IFRS").
The accounting policies applied during the current year are consistent with those applied in the previous year.
2. Group Results
The Group operates predominantly in commodity dependent markets, and despite the difficult trading circumstances, Choppies performed well.
Balanced growth in revenue and gross profit was achieved. The 2016 operating results benefited from the profit on sale of an aircraft of P20m and higher realised foreign exchange gains of P31m compared to the current financial year.
Excluding these two items, group operating profit improved by 28%.
Choppies strategy of creating a strong African supermarket business moved forward during the past year with the establishment of businesses in Tanzania and Mozambique.
The store footprint increased from 183 to 212 during the financial year.
3. Segmental reporting
The group operates in seven geographic areas: Botswana, South Africa, Zimbabwe, Zambia, Kenya, Tanzania and Mozambique. Due to its increased geographical spread, the company has changed its segmental reporting by disclosing matured markets separately.
Botswana
Despite challenging economic conditions the Botswana operations traded well and maintained market share. As noted above, the last years operating profits were enhanced by an aircraft sale and higher realised foreign exchange gains. Excluding these two items, the segment’s
EBITDA grew by 6% .
South Africa
South African business achieved an EBITDA profit of 1.17% compared to a loss of 2.81% in the previous financial year and reduced net losses by 55%. North West region stores achieved a like for like growth of 31% and broke even in the last quarter of the year.
The continuation of this trend will result in an improved performance for the region. KZN performed well under the prevailing difficult trading circumstances, showing a like for like stores growth of 18% compared to the same period operated in FY16.
Zimbabwe and other regions
Depressed economic conditions in Zimbabwe were exacerbated by a shortage of cash in circulation. Despite this revenue grew by 14%. Management focus has resulted in improved margins and profits.
Operations commenced in Tanzania and Mozambique and we expanded our presence in Zambia and Kenya.
4. Prospects and events after balance sheet date
Expansion is continuing in accordance with the long term strategy. Five more stores have been added post year end increasing the store total to 217. The acquisition of a further eight stores in KZN is being negotiated, which, if concluded,
will be complementary to our current business and will bring significant operating synergies. There were no significant events that occurred after the reporting date that require adjustment to or disclosure in the financial statements
for the year ended 30 June 2017.
5. Employee share incentive scheme (Treasury shares)
On 22 May 2017, the Group issued 12 000 000 ordinary shares valued at P30 720 000 to the Choppies Group Share Incentive Trust. The fair value of the shares was based on the market price at the date of issue. The shares will be issued to employees
as part of an employee share incentive scheme. The vesting of the shares will be dependent on conditions stipulated in the trust deed. Of the 12 000 000 shares, 1 475 000 shares were granted to selected employees on 30 June 2017 at
the market price of the shares on that date. No shares had vested to these employees at the reporting date. The shares remain under the control of the trust, and ultimately the Group, until they have vested. As such, all the 12 000 000 shares
issued to the trust were classified as treasury shares at the reporting date.
6. Dividends
Dividend per share of 2.83 thebe in respect of the year ended 30 June 2016 was declared and paid during the year compared to 4.88 thebe for 30 June 2015 declared and paid during 2015-16.
Final Distribution
Notice is hereby given that the gross final dividend of 2.1459 (2016: 2.8266)thebe (or ZAR equivalent) per share in respect of the year ended 30 June 2017 was declared on 20 September 2017, for payment to those ordinary shareholders
registered in the books of the Company at the close of business on 20 October 2017. In line with our dividend policy, dividend was maintained at 1/3rd of the distributable profit.
Net dividend cheques will be dispatched or electronically paid by the transfer secretaries on or about Tuesday, 21 November 2017.
Notice is hereby given that, as approved by the Botswana Stock Exchange, dividend payments of less than P50 will be paid electronically to shareholders. We now request all shareholders to contact the transfer secretaries,
Grant Thornton Business Services (Proprietary) Limited, by post/fax/hand delivery providing their bank account details to enable dividends to be paid electronically.
In respect of shareholders registered on the Johannesburg Stock Exchange:
The last date to trade shall be Tuesday, 17 October 2017 and shall commence trading ex dividend on Wednesday, 18 October 2017. The record date to appear in the register to participate in the dividend will
be Friday, 20 October 2017 and the dividend will be paid on Tuesday, 21 November 2017. The South African register will be closed for the purposes of dematerialisation, rematerialisation from Wednesday, 18 October 2017 to Friday, 20 October 2017,
both dates inclusive, and for transfers between the South African register and the South African and Botswana registers between Tuesday, 10 October 2017 and Friday 20 October 2017 both dates inclusive. The exchange rate applicable for the conversion
of Pula to ZAR and tax implications for payment to shareholders on the South African register will be confirmed in a separate announcement to be released on SENS on Tuesday, 10 October 2017, being the finalisation date. The issued shares at the declaration
date is 404 232 042 . The dividend has been declared from income reserves.Distributable reserves available for the final dividend are net of Botswana withholding taxes at 7.5% deducted from dividends received from group entities, and as such, can be
distributed to shareholders registered on Botswana Stock Exchange free of any further deduction. In respect of shareholders registered on the Johannesburg Stock Exchange, the dividends payable are subject to withholding tax as required under the South African Income Tax Act.
This dividend is treated as a foreign dividend
Headline Earnings per Share Computation
Basic Earnings 83 923
Remeasurements
Loss on disposal of asset 3 013
Tax Impact (669)
Headline Earnings 86 267
Number of shares for basic earnings 1 291 628 341
Weighted Average Number of Shares 1 291 789 985
Basic HEPS Thebe 6.68
Diluted HEPS Thebe 6.68
Botswana
06 October 2017
Sponsor
RAND MERCHANT BANK LIMITED( A division of First Rand Bank)
Date: 06/10/2017 05:35:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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