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Audited results 2017 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 2017 AND A DIVIDEND DECLARATION
GROUP REVENUE R 2 948,0 MILLION + 13.8%
NET OPERATING INCOME BEFORE TAXATION R 219,2 MILLION + 122.3%
HEADLINE EARNINGS PER SHARE (CENTS) 780,0 CENTS + 72.6%
DIVIDEND PER SHARE (CENTS) 292,7 CENTS + 62.2%
NET ASSET VALUE PER SHARE (CENTS) 4 674,6 CENTS + 9.1%
RETURN ON SHAREHOLDERS' FUNDS 16,8 % + 95.3%
CASH GENERATED FROM OPERATIONS 176,5 MILLION
Year ended Year ended
31-Aug 31-Aug
2017 2016 %
Restated
R000 R000 Change
CONDENSED GROUP STATEMENT OF PROFIT AND
LOSS AND OTHER COMPREHENSIVE INCOME
Revenue 2 948 025 2 590 415 13,8%
Net operating income 242 318 116 089 108,7%
Depreciation 4 884 2 812
Interest paid 18 235 14 683
Income before taxation 219 199 98 594 122,3%
Taxation 48 702 18 986
Income after taxation 170 497 79 608
Share of associate company income 82 36
Net profit for the year 170 579 79 644
Total profit attributable to:
Non-controlling interest 4 887 (22 484)
Equity holders of the Company 165 692 102 128 62,2%
170 579 79 644
Other comprehensive income:
Exchange differences on translating foreign operations (19 659) 15 899
Total comprehensive income for the year 150 920 95 543
Total comprehensive income attributable to:
Non-controlling interest 3 876 (18 569)
Equity holders of the Company 147 044 114 112
150 920 95 543
Headline earnings reconciliation:
Determination of attributable earnings and headline
earnings:
Basic earnings 165 692 102 128
Year ended Year ended
31-Aug 31-Aug
2017 2016 %
Restated
R000 R000 Change
Loss/(profit) on disposal of property, plant and equipment 227 (9 899)
Total tax effects of adjustment (63) 2 255
Headline earnings 165 856 94 484 75,5%
OTHER GROUP INFORMATION
Dividend – proposed / paid 66 277 40 851
Earnings per share (cents) 779,2 488,4 59,5%
Headline earnings per share (cents) 780,0 451,9 72,6%
Dividend per share (cents) 292,7 180,4 62,2%
Dividend cover (times) 2,5 2,5
Shares in issue (total issued) 22 646 465 22 646 465
Shares in issue (less treasury shares) 21 340 947 21 268 900
Shares in issue – weighted 21 263 167 20 910 415
Shares in issue – diluted 21 920 947 22 428 900
(Negative debt) to equity ratio (5,5%) (1,0%)
Net asset value per share (cents) 4 674,6 4 286,6 9,1%
Intangible assets
Goodwill and amortization
Balance at beginning of year 32 758 29 978
Translation difference during year (1 236) 2 780
Balance at end of year 31 522 32 758
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 63 228 64 464
SEGMENTAL INFORMATION
Year ended Year ended
31-Aug 31-Aug
2017 2016 %
Restated
R000 R000 Change
Geographical revenue
South Africa 2 024 484 1 753 783
Offshore subsidiaries 923 541 836 632
2 948 025 2 590 415 13,8%
Geographical income
South Africa 90 101 81 404
Offshore subsidiaries 75 591 20 724
165 692 102 128 62,2%
Attributable income as percentage of turnover (%)
South Africa 4,4% 4,6%
Offshore subsidiaries 8,2% 2,5%
5,6% 3,9% 43,5%
Year ended Year ended
31-Aug 31-Aug
2017 2016
Restated
R000 R000
CONDENSED GROUP STATEMENT OF FINANCIAL
POSITION
ASSETS
Non-current assets
Property, plant and equipment 23 188 25 120
Intangible assets 63 228 64 464
Investment in associates 267 185
Deferred taxation 18 369 22 195
Current assets
Inventory 427 841 391 861
Stock in transit 238 337 178 422
Trade and other receivables 471 423 450 143
Cash and cash equivalents 114 279 80 401
Total assets 1 356 932 1 212 791
EQUITY AND LIABILITIES
Ordinary shareholders' funds 997 606 911 711
Non-controlling interest 16 640 12 764
Total shareholders' funds 1 014 246 924 475
Current liabilities
Bank overdraft 59 263 71 017
Trade and other payables 283 423 217 299
Total equity and liabilities 1 356 932 1 212 791
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Year ended Year ended
31-Aug 31-Aug
2017 2016
Restated
R000 R000
Balance as at 1 September 911 711 842 317
Total attributable income for the year 165 692 102 128
Dividend paid (40 854) (37 027)
Movement in foreign currency translation reserve (18 648) 11 985
Treasury share movement (6 375) 6 228
Redemption of share-based payment awards (13 920) (13 920)
Balance as at 31 August 997 606 911 711
CONDENSED GROUP STATEMENT OF CASH FLOWS
Year ended Year ended
31-Aug 31-Aug
2017 2016
Restated
R000 R000
Cash generated from operating activities 74 264 8 679
Cash generated from operations 176 527 98 289
Investment income 317 216
Interest paid (18 235) (14 683)
Dividend paid (40 854) (37 027)
Normal tax on companies (43 491) (38 116)
Cash flows from investing activities (9 537) 21 814
Purchase of tangible fixed assets (3 651) (4 724)
Investment in subsidiary 80 -
Proceeds on disposal of fixed assets 409 80
(Purchase)/issue of treasury shares (6 375) 6 228
Proceeds on disposal of assets held for sale 20 230
Net increase in cash and cash equivalents 64 727 30 493
Cash and cash equivalents at the beginning of the year 9 384 (38 796)
Effect on exchange rate changes on the balance of cash held in foreign (19 095) 17 687
currencies
Cash and cash equivalents at end of the year 55 016 9 384
COMMENTARY
Corporate information
Nu-World is a company incorporated and domiciled in South Africa with subsidiaries in Australia, Brazil, Dubai, Hong
Kong and Lesotho. The main business of Nu-World and its subsidiaries includes the importing, 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 audited condensed consolidated annual financial statements for the year ended 31 August 2017 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), the JSE Limited Listings
Requirements and comply with the disclosure requirements of IAS 34: Interim Financial Reporting.
The condensed consolidated financial statements have been prepared under the historical cost convention.
The accounting policies used in the preparation of these 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.
Restatement of 2016 comparatives
The directors wish to inform shareholders that trade and other receivables and trade and other payables disclosed in
the Company's annual financial statements for the year ended 31 August 2016 have been restated by R53 086 607 as
a result of the elimination of an inter- company balance between two of the group's offshore subsidiaries. The
restatement had no effect on either the Group's statement of profit or loss and other comprehensive income, equity
statement or cash generated from operating activities for the current or prior year.
The condensed consolidated financial statements are presented in Rand rounded to the nearest thousand („000).
The annual financial statements have been prepared under the supervision of Graham Hindle CA (SA) in his capacity
as Financial Director.
Auditor's opinion
This condensed consolidated report is extracted from audited information but is not itself audited.
The independent auditors, RSM South Africa Inc., and designated auditor Ms. Jacqueline 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 2017.The audit was conducted in accordance with International Standards on
Auditing. The directors take full responsibility for the preparation of this condensed consolidated report and confirm that
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 directors are pleased to report strong positive top-line growth and positive earnings growth attributable to equity
holders of the Company for the year ended 31 August 2017.
South Africa
The South African business operation, now in its 71st year of operation, has survived economic, political and financial
hurdles, by adapting to market conditions. The past year has been no exception. The company has managed to
increase sales by offering the market product and services at affordable pricing. The consumer is continually under
pressure as disposable income becomes increasingly limited. Nu-World brings product to the market which makes
one's daily life easier, better and more affordable.
The local operations contribute 54,4% of the Group's attributable income. The EBITDA of the local operation has been
maintained at 6,3% of the turnover. The further consolidation of warehousing and distribution has reduced overall
warehousing and distribution costs by 3,7% of turnover. Other selling and administration costs have increased in line
with the increase in revenue.
Sales
Consumer electronics
Our consumer electronics local division, spearheaded by the JVC and Telefunken brands, continues to gain
momentum and gain market share in a competitive market space. Smart TV, that allows streaming of latest movies,
documentaries and series, allowing the consumer choice in what they watch and when. The audio division expanded
its range and offering, designs and specifications, which allowed for strong growth. Bluetooth audio, allowing playing of
latest music and live streaming from mobile devices, as well as playing direct from your playlists. Telefunken car audio
offers bluetooth as well as movie streaming, GPS, touch screen and latest technology, at affordable pricing.
Hi-Tech
Brands include Telefunken, Neon IQ and various house brands. The company offers a range of tablets, inclusive of the
latest 10.1” 3G tablet, being the largest 3G tablet, at the best price.
Seasonal products
The seasonal product offering, branded under the Sunbeam, Goldair and Ideal brands, plus certain house brands, has
increased during the year under review. The company has recently introduced the latest invertor air conditioners which
utilize less power and are quieter and more energy efficient. Further innovative product offerings include rechargeable
fans with built-in batteries allowing operation without AC power and patio infrared heaters offering immediate “high
heat” with wall mountable or stand options.
Appliances – Small domestic appliances and white goods
Brands include Ideal, Ideas, Sunbeam, Prima One & Only, Telefunken, Goldair and other house brands. New
innovative products launched in the current year include the latest glass kettle design incorporating LED lights,
electricity efficient induction cookers, filtrated water dispensers offering consumers affordable safe hot and cold
drinking water, gas cookers and ovens utilising LPG gas for continuous efficient cooking, plus a new range of laundry
products.
Liquor
Sales of liquor product to our existing customer base, grew in excess of 20%, assisted by the introduction of new
international Spirit brands inclusive of Muirhead and Highland Queen Scottish whiskey, Murphys Law and Clan Cullen
Irish whiskey, Flirt vodkas plus a full range of single malt whiskey. Our offerings also includes an extensive range of
fully imported UK beers.
Offshore operations
The Group managed to grow revenue in double digits through adding additional product categories, offerings and
increasing its distributors and territories.
Saudi Arabia
Sales to Saudi Arabia continue with positive prospects of strong sales in 2018.
India
India is the Group's most recently added territory, with the first shipments to this territory being despatched in August
2017. Substantial growth to this region is expected over the next 12 months.
Uruguay/Paraguay
The order book for this region was very strong in the last quarter and future orders look very promising.
Georgia
A strong distribution base has now been established in this territory.
Australia
The continued support of the JVC brand in this region continues to gain momentum. Further major retailers are
stocking the full range of consumer electronics. The gross margins and profitability in this region improved arising from
the cost cutting initiatives introduced in 2016. The traditional business offering was also supported by major retailers
during the year under review. Inroads in both quality and range has been set up by the sales team in Australia.
FINANCIAL OVERVIEW
STATEMENT OF PROFIT AND LOSS AND COMPREHENSIVE INCOME
Group revenue increased by 13,8% to R 2 948,0 million
(August 2016 – R 2 590,4 million).
Net income before taxation increased by 122,3% to R 219,2 million
(August 2016 – R 98,6 million)
Total headline earnings per share for year under review increased by 72,6% to 780,0 cents (August 2016 – 451,9
cents).
STATEMENT OF FINANCIAL POSITION
The balance sheet remains strong with a negative gearing ratio (debt:equity) of (5,5%) (August 2016 – 1,0%).
Inventory levels, inclusive of stock in transit, of R 666,2 million increased by 16,8% from August 2016 (R 570,3 million)
in line with the increase in turnover. Directors and management remain focused on improving working capital
management. Stock levels and ranges are continually being rationalised.
Trade and other receivable increased by 4,7% to R 471,4 million
(August 2016 – R 450,1 million) mainly due to the extended credit terms allowed to certain debtors in the Middle East
region, fully covered by confirmed irrevocable letter of credits.
Net asset value per share has increased by 9,1% to 4 674,6 cents
(August 2016 – 4 286,6 cents).
CASH FLOW
Cash generated from operations amounting to R 176,5 million (August 2016: R 98,3 million) arose from the increased
profitability of the Group, stringent credit control and working capital management.
SEGMENT REPORTING
The South African business operations contributed 68,8% of the Group's revenue and 54,4% of the Group's
attributable income. Offshore operations account for 31,2% of turnover and 45,6% of income. Revenue growth across
all business segments, coupled with improved margins from offshore operations, resulted in operating income as a
percentage of turnover improving by 83,4%.
BOARD OF DIRECTORS
There were no changes 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 the Code on Corporate Governance Practices and Conduct as contained in the King IV
Report on Corporate Governance. Nu-World is committed to transparent and integrated reporting in the spirit of King IV
and the Global Reporting Initiative (GRI).
Nu-World continues its community support and corporate social investment.
SUBSEQUENT EVENTS
No events material to the understanding of this report have occurred during the period between 31 August 2017 and
the date of this report.
DECLARATION OF FINAL DIVIDEND
Notice is hereby given that a final gross dividend of 292,7 cents per share (2016: 180,4 cents per share) was declared
on 24 October 2017, payable to shareholders recorded in the register of Nu-World at the close of business on the
record date appearing below. The dividend is payable out of cash reserves.
The salient dates pertaining to the final dividend are as follows:
Declaration announcement: Tuesday, 24 October 2017
Last date to trade 'cum' dividend Tuesday, 6 February 2018
Date trading commences 'ex' dividend Wednesday, 7 February 2018
Record date Friday, 9 February 2018
Date of payment Monday, 12 February 2018
Ordinary share certificates may not be dematerialised or rematerialised between Wednesday, 7 February 2018 and
Friday, 9 February 2018, both days inclusive.
Dividend withholding tax (DWT) of 20% will be withheld in terms of the Income Tax Act for those shareholders who are
not exempt from the DWT. Shareholders who are not exempt from the DWT will therefore receive a dividend of 234,16
cents net of DWT. Nu-World has 22 646 465 ordinary shares in issue and its income tax reference number is
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, 12 February 2018.
ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING
The 2017 Integrated Annual report will be mailed to shareholders prior to 31 December 2017. The annual general
meeting will take place at 10h00 on Wednesday, 14 February 2018, 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.
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
Chief Executive Officer
G.R. Hindle
Financial Director
24 October 2017
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
Rosebank Towers, 15 Bierman Avenue,
Rosebank, 2196
Company secretary
B.H. Haikney
Auditors
RSM South Africa Inc.
Directors
M.S. Goldberg (Executive Chairman)
J.A. Goldberg (Chief Executive)
G.R. Hindle (Financial Director)
Independent Non-executive directors
J.M. Judin (Lead)
D. Piaray
R. Kinross
F.J. Davidson
www.nuworld.co.za
Johannesburg
24 October 2017
Sponsor
Sasfin Capital(a member of Sasfin Bank Limited)
Date: 24/10/2017 05:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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