DISTELL GROUP HOLDINGS LIMITED - Trading statement

Release Date: 22/08/2018 17:20
Code(s): DGH
 
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Trading statement

Distell Group Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2016/394974/06)
Share code: DGH
ISIN: ZAE000248811
("Distell" or “the Company” or “the Group”)

TRADING STATEMENT

Distell is currently finalising its financial results for the year
ended 30 June 2018, which should be released on or about 24 August
2018.

In this regard, shareholders are advised that earnings per share
(EPS)is likely to be between 24% and 30% (141,9 cents and 177,4
cents) higher, and headline earnings per share (HEPS) is likely to
be between 4% and 8% (28,3 cents and 56,7 cents) lower than the
corresponding reporting period of the previous year. Distell
reported EPS of 591,4 cents and HEPS of 708,3 cents in the
corresponding reporting period of the previous year.

The anomalies included in EPS for the year but added back for HEPS
purposes includes the gains realised on the disposal of the Group’s
interest in Bisquit Dubouché et Cie (Bisquit) and the gain on the
previous held equity interest in Lusan Holdings Proprietary Limited
when the remaining 50,0% shareholding in the company was acquired.
Prior year impairments of intangible assets and property, plant and
equipment relating to Bisquit, as well as the impairment of other
financial assets, further distorted earnings trends.

Pro forma information
The results of the Group are significantly impacted by abnormal or
non-recurring transactions and the change in foreign exchange
rates. The Group therefore also discloses adjusted measures in
order to indicate the Group’s businesses’ performance excluding the
effect of abnormal transactions and foreign currency fluctuations.
These adjusted measures constitute pro forma financial information.

Normalised HEPS is likely to be between 3% and 6% (21,9 cents and
43,8 cents) higher than the corresponding reporting period of the
previous year. Normalised HEPS in the corresponding reporting
period of the previous year was 729,3 cents based on the
adjustments detailed below.

Impact of abnormal and non-recurring transactions
Certain abnormal or non-recurring income and expenses are disclosed
separately and are added back in calculating Normalised Headline
earnings. In the June 2017 corresponding period none of the
abnormal and non-recurring items listed below were added back in
the calculation of Normalised headline earnings as the net impact
of the items were immaterial.
                               
Normalised headline earnings excludes the impact of the following
items:
                                            2018     2017
                                            R m      R m
losses and write-offs in an associate       78,4     22,2
retrenchment and restructuring costs        40,7     17,0
interest income on the settlement of an
excise dispute                              -       (41,9)

Effect of foreign currencies
The results of the Group are significantly impacted by the change
in foreign exchange rates, mainly relating to the US dollar for
both reporting periods. In the prior year comparative period the
income of foreign subsidiaries was converted at an average
aggregated daily ZAR/US dollar (USD) exchange rate of R13,61
compared to R12,87 in the current year.

The following methodology was applied in calculating the pro forma
financial information:
- The income of foreign operations for the prior year was restated
using the current year average exchange rates as mentioned above.
- Foreign exchange differences reported in the income statement
(net of tax) was added back. The differences relate to realised
foreign exchange gains and losses as well as the unrealised amounts
on translation of monetary assets and liabilities denominated in
foreign currencies to the reporting currency at year-end, including
that of associates

Normalised headline earnings also excludes the impact of the
following foreign currency adjustments:
                                             2018          2017
                                             R m           R m

restatement of income of foreign operations
to current year average exchange rates        -            1,9
foreign exchange differences in the income
statement added back                         97,1          46,9

These adjusted measures represent pro forma financial information
and is the responsibility of the board of directors and is
presented for illustrative purposes only. Because of its nature the
pro forma financial information may not fairly present the Group’s
financial position, changes in equity, results of operations or
cash flows.

The estimate financial information on which this trading statement
is based has not been reviewed and reported on by the Company’s
external auditors.
                               
Stellenbosch
22 August 2018

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

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