HOMECHOICE INTERNATIONAL PLC - Interim results for the six months ended 30 June 2018 and cash dividend declaration

Release Date: 27/08/2018 07:05
Code(s): HIL
 
Wrap Text
Interim results for the six months ended 30 June 2018 and cash dividend declaration

HOMECHOICE INTERNATIONAL PLC
(Incorporated in Malta)
Registration number: C66099
JSE share code: HIL
ISIN: MT0000850108
("HIL" or "the group")

INTERIM results
for the six months ended 30 June 2018 and cash dividend declaration


FINANCIAL HIGHLIGHTS
Revenue up 16.1% to R1.5 billion
Retail sales up 18.9% to R856 million
Loan disbursements up 30.0% to R853 million
Credit extended on digital channels up 54.7% to 39.1% of all credit
Cash generated from operations up 37.9% to R240 million
Headline earnings per share up 14.7% to 250 cents
Customer base up 5.0% to 836 000
Interim dividend up 15.9% to 95 cents


Commentary

INTRODUCTION 
HomeChoice International plc is an investment holding company listed on the JSE Limited. The group 
has specialised in the provision of retail and financial services to the mass market in 
southern Africa for more than 30 years. HomeChoice services its large, primarily female and 
LSM 4 - 8 customer base through two trading operations, HomeChoice (Retail) and FinChoice 
(Financial Services).

The Retail business is an omni-channel retailer on a digital transformation journey, with considerable 
expertise in both retail and credit management. We provide the customer with the convenience to 
engage with our group through their preferred channel, utilising digital platforms, contact centres, 
sales agents' networks and showrooms. Our Financial Services business is a fully fledged FinTech 
business with a contact centre providing digital support. 

The Retail product offering comprises homeware textiles and related products with an increasing 
contribution from electronics, home appliances, apparel and footwear. Personal loans, value-added 
services and insurance products comprise the Financial Services offering.

KEY FINANCIAL STATISTICS
                                                                                          12 months
                                                                   6 months                   ended
                                                       6 months       ended                  31 Dec
                                                          ended     30 June    % change        2017
                                                        30 June        2017    (June to    (audited)
                                                           2018*  (restated)**     June)  (restated)**
Group                                                        
Revenue                                         (Rm)      1 524       1 313        16.1       2 993
EBITDA                                          (Rm)        406         354        14.7         793
EBITDA margin                                    (%)       26.6        27.0                    26.5
Operating profit                                (Rm)        374         327        14.4         744
Operating profit margin                          (%)       24.5        24.9                    24.9
Headline EPS (HEPS)                          (cents)      249.6       217.7        14.7       503.8
Cash generated from operations                  (Rm)        240         174        37.9         359
Interim dividend declared/paid               (cents)       95.0        82.0        15.9       191.0
                                                        
Retail                                                        
Revenue                                         (Rm)      1 167         997        17.1       2 328
Retail sales                                    (Rm)        856         720        18.9       1 749
Gross profit margin                              (%)       51.9        50.1                    51.2
EBITDA                                          (Rm)        230         196        17.3         467
EBITDA margin                                    (%)       19.7        19.7                    20.1
                                                        
Financial Services                                                        
Loan disbursements                              (Rm)        853         656        30.0       1 468
Revenue                                         (Rm)        357         316        13.0         666
EBITDA                                          (Rm)        168         145        15.9         314
EBITDA margin                                    (%)       47.1        45.9                    47.1
                                                        
*  IFRS 9, Financial Instruments, adopted effective 1 January 2018. IAS 39 applied for the 
   2017 financial year.
** Restated based on the application of IFRS 15, Revenue from Contracts with Customers.

CONTINUED STRONG TRADING AND FINANCIAL PERFORMANCE
Group revenue growth substantially outperformed the market, increasing by 16.1% to R1.5 billion. 
Retail sales increased by 18.9%, driven by strong volume growth in homeware textiles and the roll-out 
of further external brands which proved popular with customers. The group now sells more than 
100 external brands, which contributes 13.3% to the total sales mix. 

FinChoice grew revenue by 13.0%, supported by a 30.0% increase in loan disbursements, as well as 
insurance revenue. A notable 86% of loan customers are registered for FinChoice's digital platforms, 
underscoring its status as a leading FinTech services provider in the mass market.

Pleasingly, the group continues to acquire more than 20 000 new customers per month, contributing to 
a 5.0% growth in the group's customer base during the period. 

In considering the results, investors should note that the group has adopted IFRS 15, Revenue from 
Contracts with Customers and IFRS 9, Financial Instruments with effect from 1 January 2018. 
The adoption of IFRS 9 increased the group's provision for the impairment of trade and loan 
receivables by 20% on a comparable basis from IAS 39. The application of IFRS 15 reduced revenue 
in prior periods by R1 million for the six months ended 30 June 2017 and by R10 million for 
the full 2017 financial year. For further details, refer to the Accounting policies note below.

Group finance income showed pleasing growth of 11.3% to R494 million, with a normalisation of the 
reduction of the National Credit Regulator's (NCR) maximum prescribed interest rates.

Good traction was achieved in the group's strategy to diversify its income streams beyond finance 
income. Fees from ancillary services, which comprises insurance and service fees, increased by 
16.8% to R174 million, bolstered by good growth in our new insurance business, and strong adoption 
by customers of our mobi-wallet concept, MobiMoneyTM.

Expenses were well controlled, with investments in IT, distribution, merchandise and customer 
experience teams. Lingering uncertainty in the regulatory environment continues to necessitate 
additional expenditure in systems and processes in respect of compliance.

The group has continued to invest to improve customer experience and accelerate digital transformation. 
A R37 million new distribution centre, opened in Gauteng in January 2018, will substantially reduce 
delivery times for customers and the roll-out of showrooms and micro hubs is aimed at significantly 
enhancing the purchasing experience for our customers. Investment in key data and analytical skills, 
and fraud and technology platforms will continue to accelerate digital adoption by our customers 
and drive growth. 

Excellent progress was achieved in digital transformation across the group during the period. 
Credit extended via digital channels increased by 54.7% to R792 million and now accounts for 39.1% 
(2017: 32.0%) of total credit extended.

Group earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 14.7% to 
R406 million. The EBITDA margin has been maintained, with an 18.7% increase in debtor costs off-set 
by lower trading expenses. 

Operating profit increased by 14.4% to R374 million. Headline earnings increased by 16.1% to 
R260 million and HEPS increased by 14.7% to 249.6 cents, continuing its growth trajectory and 
pleasingly ahead of the five-year annual compound growth in HEPS of 13.2%.

The group declared an interim dividend of 95 cents, up 15.9% on the previous year. A dividend cover 
of 2.6 times was maintained.

RETAIL
NOTABLE PROGRESS IN OUR TRANSFORMATION TO A DIGITAL DEPARTMENT STORE
Retail revenue increased 17.1% to R1.2 billion, driven by robust merchandise sales growth of 18.9% 
and a finance income growth of 11.3%. The latter has normalised, following the lower interest rate 
credit facility product introduced in 2016. The good trading performance generated a 17.3% increase 
in EBITDA to R230 million.

Improved customer segmentation and strong data analytics continued to drive customer acquisition, 
with Retail adding 128 000 new customers during this period. Innovation in our market-leading 
homeware textiles category, as well as the introduction of 37 additional retail brands provide 
variety to existing customers and attract new customers looking for quality homeware, fashion, 
furniture and personal electronics. The contribution from branded sales increased from 11.0% 
at June 2017 to 13.3% at the end of June 2018. 

Digital continues to be the fastest-growing channel, up 46.7%, and now represents 18.5% of Retail 
sales (2017: 14.8%). Customer engagement through digital, especially mobi channels is growing 
rapidly, with 60% of Retail digital sales executed from mobile phones. Our investment in Oracle 
Commerce Cloud will further accelerate our digital transformation.

The gross profit margin showed a strong improvement to 51.9% from 50.1% in the corresponding period. 
Gains made on favourable foreign exchange rates more than off-set both the increase in the VAT rate 
on 1 April 2018 (which was absorbed by the group) and the increase in operating cost from the new 
distribution centre.

Retail has embarked on a strategy to roll out showrooms in key locations. A second small-format 
showroom was opened in Maponya Mall in Soweto during May 2018. We will open a further three 
showrooms in the second half of the year, one being a flagship on Rissik Street, Johannesburg. 
These showrooms will allow customers the opportunity to experience the products and handle customer 
service enquiries, as well as the added choice of a click and collect or delivery. 

FINANCIAL SERVICES
A RAPIDLY GROWING FINTECH PLATFORM
Revenue increased by 13.0% to R357 million, supported by an 11.3% growth in finance income to 
R257 million. EBITDA grew by a creditable 15.9% to R168 million.

The division delivered strong growth in loan disbursements, increasing by 30.0% to R853 million. 
Loans to existing customers increased to 84.5% (2017: 77.5%) of total disbursements over the period, 
with increased utilisation of the new MobiMoneyTM facility product and  good customers qualified 
for increases in their credit limits. 

New customers are primarily acquired by the Retail business. Analytics on the customer base, 
including payment performance, and risk and response scorecards enables Financial Services to offer 
products to selected qualifying Retail customers. This has translated into consistently strong 
credit performance from this preselected base. FinChoice continues to explore external sources of 
new customers to supplement the Retail database and leverage its digital and credit capabilities. 
During the period FinChoice acquired 19 800 new customers, of whom 24% were from external sources. 

Financial Services is rapidly growing as a leading FinTech platform in the mass market. With both 
a USSD and mobi offering, 86% of customers have signed up to our digital platforms. The mobi site 
has grown from 37% registered to 60% due to the strong focus on customer experience and the broader 
product suite offering on the richer smartphone platform. Customers are highly engaged on the 
platforms; of all loan transactions in the period 78% were concluded digitally, one-third outside 
of normal trading hours. The contact centre is now a digital support team, as well as a sales and 
customer service channel.

The innovative digital-only credit facility product, MobiMoneyTM, has been well received by 
customers and has further helped drive platform adoption and engagement. More than 25% of the active 
base has activated and engaged with this new product since its launch in 2017.

The richer mobi platform creates a portal for a multitude of products and value-added services to 
be offered to customers via their smartphones. Airtime and data bundles were successfully added as 
value-added services to drive increasing customer engagement and additional revenue streams. 

The relatively new insurance business continues to show strong growth with its stable of funeral 
insurance products. This vertical represents an attractive growth opportunity to diversify income 
and increase customer share of wallet. The focus is on consolidating the insurance operations 
infrastructure, providing a solid platform to scale and expand the product offering.

MANAGING CREDIT RISK
The group continued to grow a quality credit book with gross trade and loan receivables increasing 
by 22.2% to R3.3 billion. Group debtor costs growth of 18.7%, was marginally above comparable 
revenue growth of 16.1% and remains within the group's acceptable risk tolerances. Non-performing 
loans (NPLs) declined in both divisions, while NPL cover was bolstered by increased provisions. 

Credit performance for the period is summarised below:
                                                                                          12 months
                                                                   6 months                   ended
                                                       6 months       ended                  31 Dec
                                                          ended     30 June    % change        2017
                                                        30 June        2017    (June to    (audited)
                                                           2018*  (restated)***    June)  (restated)***
Group                                                        
Gross trade and loans receivable                (Rm)      3 345       2 738        22.2       3 136
Debtor costs as a % of revenue**                 (%)       17.1        16.7                    16.8
                                                        
Retail                                                        
Gross trade and loans receivable                (Rm)      1 845       1 533        20.4       1 784
Debtor costs as a % of revenue                   (%)       14.7        14.6                    14.9
Provision for impairment as a % of gross 
  receivables                                    (%)       20.6        18.6                    17.9
Non-performing loans (NPLs) (>120 days)          (%)        9.8        10.3                     9.9
NPL cover                                    (times)        2.1         1.8                     1.8
                                                        
Financial Services                                                        
Gross trade and loans receivable                (Rm)      1 500       1 205        24.5       1 352
Debtor costs as a % of revenue                   (%)       24.9        22.9                    23.2
Provision for impairment as a % of gross 
  receivables                                    (%)       16.0        14.9                    14.0
Non-performing loans (NPLs) (>120 days)          (%)        4.2         4.4                     4.2
NPL cover                                    (times)        3.8         3.4                     3.3
                                                        
*   IFRS 9, Financial Instruments, adopted effective 1 January 2018. IAS 39 applied for the 
    2017 financial year.
**  Debtor costs include bad debts written off net of recoveries, as well as movements in provisions.
*** Restated based on the application of IFRS 15, Revenue from Contracts with Customers.

Retail debtor costs as a percentage of revenue was stable at 14.7% (2017: 14.6%), supported by 
continued focus on training of the collections teams, combined with improvements in internal and 
external collections processes. The refinement of scorecards, use of additional credit bureau data 
and investment in fraud prevention tools have culminated in improved Retail vintages and NPLs 
reducing to 9.8% from 10.3%. The new IFRS 9 provisioning methodology has resulted in the provision 
for impairment of trade receivables increasing to 20.6% (Dec 2017: 17.9%), maintaining a conservative 
NPL cover of 2.1 times.

Financial Services debtor costs as a percentage of revenue increased to 24.9% (2017: 22.9%). 
The increase is primarily attributable to the strong disbursements in the period and the provisions 
raised under IFRS 9 on these and is not reflective of a worsening credit performance. Existing 
vintages remain stable and NPLs have improved from 4.4% to 4.2%. The provision for impaired loans 
has been increased under IFRS 9 to 16.0% (Dec 2017: 14.0%) of the book, increasing the NPL 
cover from 3.4 to 3.8 times. The Financial Services business continues to benefit from lending 
primarily to targeted Retail customers who have demonstrated good payment behaviour.

STRONG CASH GENERATION
Cash generated from operations increased by 37.9% to R240 million, driven by good cash collections, 
a reduction in loan terms and actively managing cash requirements in working capital. Consequently, 
the cash conversion rate (cash generated from operations expressed as a percentage of EBITDA) 
increased to 59.1% from 49.2% in June 2017. The strong cash-generation capability of the business 
is evidenced by the fact that the group has managed to grow a gross credit book of more than 
R3.3 billion while maintaining a net debt to equity ratio (excluding property) of 20.3%. 

During December 2017 the group finalised an R800 million long-term funding facility, replacing a 
R350 million facility and R160 million shareholder loan. As at 30 June 2018 the group had drawn 
down R600 million (Dec 2017: R550 million) of this facility. 

The net debt to equity ratio has decreased from 29.2% at December 2017 to 28.2%, comfortably below 
the board's upper limit of 40.0%.

Capital expenditure increased notably in this period as part of an investment cycle which will span 
the next two years. Investments are targeted at upgrading technology and infrastructure such as the 
origination engine and debtors' systems, as well as improving customer experience through self-service 
facilities, rolling out showrooms and speeding up delivery through an additional distribution centre. 

APPLICATION OF NEW ACCOUNTING STANDARDS
As required by International Financial Reporting Standards (IFRS), the group has adopted IFRS 15, 
Revenue from Contracts with Customers and IFRS 9, Financial Instruments with effect from 1 January 2018.

IFRS 15 aligns the recognition of revenue earned to the time period in which the transfer of the goods 
and services takes place to the customer. The impact of the adoption of IFRS 15 on revenue is immaterial 
for the six months ended 30 June 2017 and reduced revenue for the full 2017 financial year by R10 million.

IFRS 9 is the new standard for disclosure and measurement of financial instruments. IFRS 9 requires 
that the group classify and measure receivables at fair value, with any changes in that fair 
value recognised in the income statement as and when they arise. Using an expected credit loss 
model, the group determines the allowance for credit losses on a discounted basis it would incur 
in various default scenarios. Under IFRS 9 the group's provision for the impairment of trade and 
loan receivables has increased by 20% on a comparable basis from IAS 39. The new standard does not 
require restatement to prior periods and the increased provision is accounted for as an adjustment 
to opening retained earnings. 

The new IFRS 9 models have been reviewed by our independent external auditor, PwC.

OUTLOOK
The group is continuing to position itself strongly for ongoing growth. Innovative Retail and 
Financial Services product ranges will appeal to our existing loyal customers and attract new 
customers to the group. The rapidly increasing digital engagement by our customers and 
development of our omni-channel offering further enhance this growth trajectory.

Whilst investing for the future, the group remains cognisant of the tough trading environment. 
Consumers remain under severe pressure, unemployment is at record highs and there is a prevailing 
climate of political and labour uncertainty. Exchange rate volatility, as well as strike action, 
and particularly the recent postal strike, have the ability to negatively impact on the business. 

In this environment tight credit policies, robust cash collections and cost control will remain 
key management priorities. We will continue to position ourselves as a leading digital player in 
the mass market, with an omni-channel offering that provides an attractive and seamless retailing 
experience across all channels. 

The above information has not been reviewed or reported on by the group's external auditor.


S Portelli        G Lartigue                    S Maltz
Chairman          Chief executive officer       Chief executive officer (South Africa) 

Qormi, Malta, 27 August 2018


DIVIDEND DECLARATION
Notice is hereby given that the board of directors has declared an interim gross cash dividend of 
95.0000 cents (76.0000 cents net of dividend withholding tax) per ordinary share for the six-month 
period ended 30 June 2018. The dividend has been declared from income reserves. HIL is registered 
in the Republic of Malta and the dividend is a foreign dividend. Withholding tax of 20% will be 
applicable to all South African shareholders who are not exempt.

The issued share capital at the declaration date is 104 762 901 ordinary shares.

The salient dates for the dividend will be as follows:
Last day of trade to receive a dividend                                  Tuesday, 11 September 2018
Shares commence trading "ex" dividend                                  Wednesday, 12 September 2018
Record date                                                               Friday, 14 September 2018
Payment date                                                              Monday, 17 September 2018

Share certificates may not be dematerialised or rematerialised between Wednesday, 12 September 2018 
and Friday, 14 September 2018, both days inclusive.


G Said 
Company secretary 

Qormi, Malta, 27 August 2018


GROUP STATEMENT OF FINANCIAL POSITION
                                                                               Restated*   Restated*
                                                                  Unaudited   Unaudited     Audited
                                                                   Jun 2018    Jun 2017    Dec 2017
                                                          Notes          Rm          Rm          Rm
Assets                                                 
Non-current assets                                                 
Property, plant and equipment                                           456         421         429 
Intangible assets                                                        93          82          86 
Investment in associates                                                  1          14          14 
Financial assets at fair value through profit and loss                   36          22          30 
Deferred taxation                                                         -          45           - 
                                                                        586         584         559 
                                                
Current assets                                                 
Inventories                                                             274         295         257 
Taxation receivable                                                       1          14           4 
Trade and other receivables                                   4       2 772       2 303       2 642 
  Trade receivables - Retail                                          1 465       1 248       1 464 
  Loans receivable - Financial Services                               1 260       1 026       1 163 
  Other receivables                                                      47          29          15 
Cash and cash equivalents                                                80         155         130 
Derivative financial instruments                                          1           -           - 
                                                                      3 128       2 767       3 033 
Total assets                                                          3 714       3 351       3 592 
                                                
Equity and liabilities                                                 
Equity attributable to equity holders of the parent                                                 
Stated and share capital                                                  1           1           1 
Share premium                                                         3 003       3 000       3 003 
Reorganisation reserve                                               (2 961)     (2 961)     (2 961)
                                                                         43          40          43 
Treasury shares                                                          (3)         (3)         (3)
Other reserves                                                           21           7          14 
Retained earnings                                                     2 453       2 116       2 319 
Total equity                                                          2 514       2 160       2 373 
                                                
Non-current liabilities                                                 
Interest-bearing liabilities                                            627         547         616 
Deferred taxation                                                        92         140         120 
Other payables                                                            4           4           6 
                                                                        723         691         742 
                                                
Current liabilities                                                 
Interest-bearing liabilities                                            157          50         166 
Taxation payable                                                         31          15           8 
Trade and other payables                                                282         232         241 
Provisions                                                                3          15          38 
Derivative financial instruments                                          -           -           5 
Bank overdraft                                                            4          26          19 
Shareholder loan                                                          -         162           - 
                                                                        477         500         477 
Total liabilities                                                     1 200       1 191       1 219 
Total equity and liabilities                                          3 714       3 351       3 592

* See note 3 for details regarding the restatement as a result of the adoption of IFRS 15.


GROUP STATEMENT OF COMPREHENSIVE INCOME
                                                                               Restated*   Restated*
                                                      Unaudited               Unaudited     Audited
                                                     six months              six months        year
                                                          ended                   ended       ended
                                                       Jun 2018           %    Jun 2017    Dec 2017
                                              Notes          Rm      change          Rm          Rm
Revenue                                                   1 524        16.1       1 313       2 993
  Retail sales                                              856        18.9         720       1 749
  Finance income                                            494        11.3         444         933
  Fees from ancillary services                              174        16.8         149         311
Cost of Retail sales                                       (412)       14.8        (359)       (853)
Other operating costs                                      (742)       16.7        (636)     (1 408)
  Credit impairment losses                        8        (260)       18.7        (219)       (502)
  Other trading expenses                          8        (482)       15.6        (417)       (906)
Other net gains and losses                                    2       (60.0)          5           1
Other income                                                  2       (50.0)          4          11
Operating profit                                            374        14.4         327         744
Interest received                                             2       (33.3)          3           7
Interest paid                                               (43)        7.5         (40)        (83)
Share of loss of associates                                   -        <100          (1)         (9)
Profit before taxation                                      333        15.2         289         659
Taxation                                                    (73)       12.3         (65)       (145)
Profit and total comprehensive income for the period        260        16.1         224         514
                                                                
Earnings per share (cents)                                                                
Basic                                           9.1       249.6        14.7       217.7       496.3
Diluted                                         9.2       245.8        14.0       215.6       491.2
                                                                
Additional information (%)                                                                
Retail gross profit margin (%)                             51.9                    50.1        51.2
                                                                
The Retail gross profit margin percentage has been calculated as Retail sales less cost of Retail 
sales, divided by Retail sales.

* See note 3 for details regarding the restatement as a result of the adoption of IFRS 15.


GROUP STATEMENT OF CHANGES IN EQUITY
                                                                  Unaudited   Unaudited     Audited
                                                                 six months  six months        year
                                                                      ended       ended       ended
                                                                   Jun 2018    Jun 2017    Dec 2017
                                                                         Rm          Rm          Rm 
Equity at the beginning of the period as originally presented         2 386       2 030       2 030 
Change in accounting policy                                             (13)         (7)         (7)
Change on initial application of IFRS 9                                 (11)          -           -
Restated equity at the beginning of the period                        2 362       2 023       2 023 
                                        
Profit and total comprehensive income for the period 
  (restated for 2017)                                                   260         224         514 
Dividends paid                                                         (114)        (90)       (175)
Shares issued                                                             -           2           4 
Share incentive scheme                                                    6           1           7
Equity at the end of the period                                       2 514       2 160       2 373


GROUP STATEMENT OF CASH FLOWS
                                                                               Restated*   Restated*
                                                      Unaudited               Unaudited     Audited
                                                     six months              six months        year
                                                          ended                   ended       ended
                                                       Jun 2018           %    Jun 2017    Dec 2017
                                              Notes          Rm      change          Rm          Rm
Cash flows from operating activities                                                         
Operating cash flows before working 
  capital changes                                           401        14.2         351         806 
Movement in working capital                                (161)       (9.0)       (177)       (447)
Cash generated from operations                   10         240        37.9         174         359
Interest received                                             2       (33.3)          3           7 
Interest paid                                               (44)       15.8         (38)        (78)
Taxation paid                                               (69)       (2.8)        (71)       (123)
Net cash inflow from operating activities                   129        89.7          68         165 
                                                        
Cash flows from investing activities                                                        
Purchase of property, plant and equipment                   (44)                     (8)        (28)
Purchase of intangible assets                               (22)                     (8)        (28)
Investment in associates                                     13                       -         (12)
Financial assets at fair value through profit and loss        -                      (8)         (8)
Net cash outflow from investing activities                  (53)     (119.6)        (24)        (76)
                                                        
Cash flows from financing activities                                                        
Proceeds from issuance of shares                              -                       2           4 
Proceeds from interest-bearing liabilities                   55                       4         715 
Repayments of interest-bearing liabilities                  (52)                    (18)       (700)
Finance-raising costs paid                                    -                       -          (9)
Dividends paid                                             (114)                    (90)       (175)
Net cash outflow from financing activities                 (111)        8.8        (102)       (165)
                                                        
Net decrease in cash, cash equivalents and 
  bank overdrafts                                           (35)                    (58)        (76)
Cash, cash equivalents and bank overdrafts 
  at the beginning of the period                            111                     187         187 
Cash, cash equivalents and bank overdrafts 
  at the end of the period                                   76       (40.9)        129         111


GROUP SEGMENTAL INFORMATION
                                                         Financial
                                       Total     Retail   Services   Property      Other Intragroup
2018                                      Rm         Rm         Rm         Rm         Rm         Rm
                                                                
Six months ended 30 June - Unaudited                                                                 
Segmental revenue                      1 553      1 167        357         29          -          -
  Retail sales                           856        856          -          -          -          -
  Finance income                         494        237        257          -          -          -
  Fees from ancillary services           203         74        100         29          -          -
Intersegment revenue                     (29)         -          -        (29)         -          -
Revenue from external customers        1 524      1 167        357          -          -          -
                                                                
Total trading expenses (refer to 
  note 8)                                742        551        192         14          8        (23)
                                                                
EBITDA                                   406        230        168         16         (8)         -
Depreciation and amortisation            (32)       (29)        (2)        (1)         -          -
Interest received                          2                     1                    34        (33)
Interest paid                            (29)                  (31)                  (31)        33
Segmental operating profit**             347        201        136         15         (5)         -
                                                                
Interest received                          -          -                     -
Interest paid                            (14)        (3)                  (11)
Profit before taxation                   333        198        136          4         (5)         -
Taxation                                 (73)       (45)       (25)        (2)        (1)         -
Profit after taxation                    260        153        111          2         (6)         -
                                                                
Segmental assets                       3 714      2 244      1 916        340      1 264     (2 050)
Segmental liabilities                  1 200        930      1 242        280        798     (2 050)
                                                                
Operating cash flows before working 
  capital changes                        401        225        168         16         (8)         -
Movements in working capital            (161)       (53)      (107)         1         (2)         -
Cash generated/(utilised) by operations  240        172         61         17        (10)         -
                                                                
Gross profit margin (%)                 51.9       51.9
Segmental operating profit margin (%)   22.3       17.2       38.1       51.7

** Refer to note 11 for further details on segments and segmental results.

                                                         Financial
                                       Total     Retail   Services   Property      Other Intragroup
2017 Restated*                            Rm         Rm         Rm         Rm         Rm         Rm
Six months ended 30 June - Unaudited
Segmental revenue                      1 341        997        316         28          -          -
  Retail sales                           720        720          -          -          -          -
  Finance income                         444        213        231          -          -          -
  Fees from ancillary services           177         64         85         28          -          -
Intersegment revenue                     (28)         -          -        (28)         -          -
Revenue from external customers        1 313        997        316          -          -          -
                                                                
Total trading expenses (refer to 
  note 8)                                636        470        172         11          7        (24)
                                                                
EBITDA                                   354        196        145         17         (3)        (1)
Depreciation and amortisation            (28)       (27)         -         (1)         -          -
Interest received                          2                     2                    26        (26)
Interest paid                            (26)                  (26)                  (26)        26
Segmental operating profit**             302        169        121         16         (3)        (1)
                                                                
Interest received                          1          1                     -
Interest paid                            (14)        (2)                  (12)
Profit before taxation                   289        168        121          4         (3)        (1)
Taxation                                 (65)       (39)       (28)        (1)         3          -
Profit after taxation                    224        129         93          3          -         (1)
                                                                
Segmental assets                       3 351      1 833      1 141        340        660       (623)
Segmental liabilities                  1 191        627        394        286        506       (622)
                                                                
Operating cash flows before working 
  capital changes                        351        196        141         17         (3)         -
Movements in working capital            (177)      (122)       (46)        (2)        (7)         -
Cash generated/(utilised) by operations  174         74         95         15        (10)         -
                                                                
Gross profit margin (%)                 50.1       50.1
Segmental operating profit margin (%)   22.5       17.0       38.3       57.1
                                                                
*  See note 3 for details regarding the restatement as a result of the adoption of IFRS 15. 
** Refer to note 11 for further details on segments and segmental results.


NOTES TO THE INTERIM FINANCIAL STATEMENTS
1.   BASIS OF PRESENTATION
     The condensed consolidated interim financial statements 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, Financial 
     Pronouncements as issued by the Financial Reporting Standards Council and the requirements 
     of the Maltese Companies Act.

2.   ACCOUNTING POLICIES
     The accounting policies applied in the preparation of these interim financial statements are in 
     terms of International Financial Reporting Standards and are consistent with those applied in 
     the previous consolidated annual financial statements except for the adoption of the following 
     new standards and interpretations by the group on 1 January 2018:
     -  IFRS 9, Financial Instruments; and
     -  IFRS 15, Revenue from Contracts with Customers.

     The impact of the adoption of these standards are disclosed in note 3 below.

3.   CHANGES IN ACCOUNTING POLICIES
     3.1 IFRS 9, Financial Instruments: Classification and Measurement - Impact of adoption
         IFRS 9 addresses the classification, measurement and derecognition of financial assets and 
         financial liabilities, introduces new rules for hedge accounting and a new impairment model 
         for financial assets.

         The adoption of IFRS 9 financial instruments from 1 January 2018 resulted in changes in 
         accounting policies and adjustments to the amounts recognised in the financial statements. 

         The new accounting policies are set out in note 3.4 below. In accordance with the 
         transitional provisions in IFRS 9 (7.2.15), comparative figures have not been restated.

         The total impact on the group's retained earnings as at 1 January 2018 is as follows:

                                                                                  Notes          Rm
         Closing retained earnings 31 December 2017                                           2 332 
         Net decrease in trade receivables                                         (iii)        (19)
         Net increase in loans receivable                                          (iii)          3
         Increase in deferred tax assets relating to the above                                    5
         Adjustment to retained earnings from adoption of IFRS 9                                (11)
         Opening retained earnings 1 January 2018 (before restatement for IFRS 15)            2 321

         (i)   Classification and measurement
               IFRS 9 requires all financial assets to be classified and measured on the basis of the 
               entity's business model for managing the financial assets and the contractual cash flow 
               characteristics of the financial assets. 

               The group's management have assessed which business models apply to the financial assets 
               held by the group and have classified financial instruments into the appropriate 
               IFRS 9 categories. 

               There has been no change to the classification of the group's financial liabilities 
               and they continue to be classified and measured at amortised cost.

               (a) Cell captive insurance contracts
                   Previously the South African insurance cell captive was accounted for as an 
                   Investment in insurance contract where the net profit or loss after tax was accounted 
                   for in "Fees from ancillary services" in the statement of comprehensive income. 
                   The net investment was shown under "Investment in associates and other" in the 
                   statement of financial position together with the group's investment in associates.

                   The insurance cell captive satisfies the conditions for classification as financial 
                   assets at fair value through profit and loss and hence there is no change to the 
                   measurement of these assets.The net profit or loss after tax is accounted for in 
                   "Fees from ancillary services" in the statement of comprehensive income. The net 
                   profit or loss after tax from insurance cell operations is the net insurance result 
                   of the investment in insurance contracts. The net result takes into account 
                   insurance premium revenue, insurance claims, salvage and recoveries, acquisition 
                   costs, reinsurance and taxes as accounted for by the insurance cell. The amounts 
                   are payable to the group in terms of the contract subject to certain liquidity and 
                   solvency requirements of the insurance cell. The net investment is no longer shown 
                   under "Investment in associates and other" in the statement of financial position 
                   together with the group's investment in associates, but separately under "Financial 
                   assets at fair value through profit and loss".

               (b) All other financial assets
                   All of the group's other financial assets which were classified as loans and 
                   receivables satisfy the conditions for classification at amortised cost and hence 
                   there is no change to the classification and measurement of these assets.

         (ii)  Derivatives and hedging activities
               The group does not currently apply hedge accounting and continues to account for 
               forward exchange contracts at fair value through profit and loss.

         (iii) Impairment of financial assets - expected credit loss model
               IFRS 9 has introduced new expected credit loss (ECL) impairment requirements that  
               result in the earlier recognition of credit provisions. The ECL requirements apply to 
               debt financial assets measured at either amortised cost or at fair value through other 
               comprehensive income (OCI) (FVOCI), loan commitments where there is a present 
               commitment to extend credit (unless these are measured at fair value through profit 
               or loss (FVTPL)) and financial guarantees.

               ECL is, at a minimum, required to be measured through a loss allowance at an amount 
               equal to the 12-month ECL of the financial asset. A loss allowance for full lifetime 
               ECL is required for a financial asset if the credit risk of that financial instrument 
               has increased significantly since initial recognition.

               The group has the following types of financial assets measured at amortised cost 
               that are subject to IFRS 9's new ECL model:
               -  trade receivables - Retail;
               -  loans receivables - Financial Services; and
               -  other receivables.

               The group was required to revise its impairment methodology under IFRS 9 for 
               each of these classes of assets. The group applies the IFRS 9 general approach 
               to measuring ECLs for all trade, loans and other receivables. The impact of the 
               change in impairment methodology on the group's retained earnings and equity 
               is disclosed in the table above.

               Significant accounting judgements, estimates and assumptions
               Measurement of ECL allowance
               The measurement of the ECL allowance is an area that requires the use of complex 
               models and significant assumptions about future economic conditions and credit 
               behaviour. Explanation of the inputs, assumptions and estimation techniques used 
               in measuring ECL is further detailed below.

               A number of significant judgements are also required in applying the accounting 
               requirements for measuring ECL, such as:
               -  determining criteria for significant increase in credit risk;
               -  choosing appropriate models and assumptions for the measurement of ECL;
               -  establishing the number and relative weightings of forward-looking scenarios 
                  for each type of product/market and the associated ECL; and
               -  establishing groups of similar financial assets for the purposes of measuring ECL.

               The key judgements and assumptions adopted by the group in addressing the 
               accounting requirements of the standard for ECL measurement are discussed below:

               (a) Significant increase in credit risk (SICR)
                   The group considers a financial instrument to have experienced a SICR since 
                   the time of initial recognition when one or more of the following quantitative, 
                   qualitative or backstop criteria has been met:

                   Quantitative criteria
                   -  Where a customer has not met his or her minimum contractual obligations 
                      for at least two months

                   Qualitative criteria
                   -  Where a customer applies for or enters into debt review; where a customer 
                      is allocated a higher risk score category based on the group's various 
                      behaviour scorecards; or where the customer has demonstrated a significant 
                      increase in credit risk on other group credit products

                   Backstop
                   A backstop is applied if the borrower is more than 30 days past due on its 
                   contractual payments

                   The assessment of SICR happens on a monthly basis at a portfolio and person 
                   level for all customers. The criteria used to identify SICR are monitored 
                   and reviewed periodically for appropriateness by the credit risk team.

               (b) Definition of default and credit-impaired assets
                   The group defines a financial instrument as in default, which is fully aligned 
                   with the definition of credit impaired, when it meets one or more of the 
                   following criteria:

                   Retail
                   -  Where a customer has not met their minimum contractual obligations for 
                      four months since the time of initial recognition

                   Financial Services
                   -  Where a customer has not met their minimum contractual obligations for 
                      three consecutive months

               (c) Measuring ECL - explanation of inputs, assumptions and estimation techniques
                   The ECL is measured on either a 12-month or lifetime basis depending on whether 
                   a significant increase in credit risk has occurred since initial recognition 
                   or whether an asset is considered to be credit impaired. ECLs are the discounted 
                   product of the probability of default (PD) and exposure at default (EAD) 
                   defined as follows:
                   -  The PD represents the likelihood of a customer defaulting on her financial 
                      obligation, either over 12 months (12-month PD) or over the remaining 
                      lifetime (lifetime PD) of the obligation.
                   -  EAD is based on the amounts the group expects to be owed at the time of 
                      default, over the next 12 months (12-month EAD) or over the remaining 
                      lifetime (lifetime EAD). 

                   The ECL is determined by projecting the PD and EAD for each future month and 
                   for each collective segment. These three components are multiplied together. 
                   This effectively calculates the ECL for each future month, which is then 
                   discounted back to the reporting date and aggregated. The discount rate used 
                   in the ECL calculation is the original effective interest rate, or an 
                   approximation thereof.

                   The lifetime PD is developed by applying a behavioural matrix against the 
                   current balances. The behavioural matrix looks at how defaults develop on a 
                   portfolio from the point of initial recognition throughout the lifetime of 
                   the contracts. The behavioural matrix is based on historically observed data 
                   and is assumed to be the same across all assets within a portfolio and 
                   credit band. This is supported by historical analysis.

                   The 12-month and lifetime EADs are determined based on the probability of 
                   write-off, which varies by product type.

               (d) Forward-looking information incorporated in the ECL models
                   The assessment of SICR and the calculation of ECL both incorporate forward-
                   looking information. The group has performed historical analysis and identified 
                   certain macroeconomic variables correlating with credit losses.

                   Due to the relative short-term nature of the book and constantly evolving 
                   credit criteria being applied, the impact of extrapolating the forward-looking 
                   information against credit variables was not material, however will continue 
                   to be monitored and reassessed at year-end.

               (e) Groupings of instruments for losses on a collective basis
                   For ECL provisions modelled on a collective basis, a grouping of exposures 
                   is performed on the basis of shared risk characteristics, such that risk 
                   exposures within the group are homogenous. In performing this grouping there 
                   must be sufficient information for the group to be statistically credible. 
                   Group information include the following characteristics:
                   -  new versus existing customers;
                   -  term of the loan; and
                   -  merchandise category.

                   Each segmentation was further segmented into IFRS 9-defined stages.

                   The appropriateness of groupings is monitored and reviewed on a periodic 
                   basis by the credit risk team.

                   Write-off policy
                   The group writes off financial assets, in whole or in part, when it has 
                   exhausted all practical recovery efforts and has concluded there is no 
                   reasonable expectation of recovery. This is usually the case when the group's 
                   in-house collection department and external collection companies which 
                   supplement the group's collection activities are unable to recover outstanding 
                   balances. The group's write-off policy by segment is as follows:

                   Retail
                   -  Where the customer has not met his or her minimum contractual obligations 
                      for six months and has not made any payment at all within the last 90 days; or 

                   Financial Services
                   -  Where the debtor has not met his or her minimum contractual obligations 
                      for at least four months and has not made any payment at all within the 
                      last four months.

     3.2 IFRS 15, Revenue from Contracts with Customers - Impact of adoption
         IFRS 15, which replaces IAS 18, is based on the principle that revenue is recognised when 
         control of a good or service transfers to a customer.

         The adoption of IFRS 15, Revenue from Contracts with Customers from 1 January 2018 resulted 
         in changes in accounting policies and adjustments to the amounts recognised in the 
         financial statements. 

         The new accounting policies are set out in note 3.4 below. In accordance with the transition 
         provisions in IFRS 15 the group has adopted the new standard retrospectively and has restated 
         comparatives for the 2017 financial year.

         The total impact on the group's retained earnings as at 1 January 2017 is as follows:
                                                                                               2017
                                                                                  Notes          Rm
         Opening retained earnings 1 January before IFRS 15 restatement 
           (see note 3.1)                                                                     1 988 
         Restatement for finance income                                              (i)        (12)
         Decrease in debtor costs                                                    (i)          2 
         Decrease in deferred tax liabilities                                        (i)          3 
         Adjustment to retained earnings from adoption of IFRS 15                                (7)
         Opening retained earnings 1 January after IFRS 15 restatement                        1 981

         (i)   Accounting for finance income
               In previous reporting periods a portion of initiation fees were allocated based on 
               IAS 18 multiple element recognition criteria to be recognised upfront as part of revenue. 
               This recognition criteria was applied to the separately identifiable components of the 
               transaction in order to reflect the substance of the transaction.

               IFRS 15 provides additional guidance on multiple element contracts and, based on this 
               guidance and the trade receivables being at fair value based on the interest and 
               initiation fees charged, it was determined that there are no longer separately 
               identifiable components with regard to initiation fees charged to customers.

               The impact of IFRS 15 in the financial statements is disclosed under 3.4 below.

      3.3 Accounting policies applied from 1 January 2018
          3.3.1 IFRS 9, Financial Instruments
                (i)  Financial assets
                     Classification
                     From 1 January 2018 the group classifies its financial assets in the following 
                     measurement categories:
                     -  those to be measured subsequently at fair value through profit and loss; and
                     -  those to be measured at amortised cost.

                     The classification depends on the entity's business model for managing the 
                     financial assets and the contractual terms of the cash flows.

                     Measurement
                     At initial recognition, the group measures a financial asset at its fair value plus, 
                     in the case of a financial asset not at fair value through profit or loss, 
                     transaction costs that are directly attributable to the acquisition of the financial 
                     asset. Transaction costs of financial assets carried at fair value through profit 
                     or loss are expensed in profit or loss.

                     Subsequent measurement of debt instruments depends on the group's business model 
                     for managing the asset and the cash flow characteristics of the asset. There are 
                     two measurement categories into which the group classifies its financial instruments:

                     Amortised cost
                     These are assets that are held for collection of contractual cash flows where 
                     those cash flows represent solely payments of principal and interest and are 
                     measured at amortised cost.

                     Interest income from these financial assets is included in finance charges earned 
                     using the effective interest rate method. This is calculated by applying the 
                     effective interest rate to the gross carrying amount of a financial asset except for: 

                     (a) purchased or originated credit-impaired financial assets. For these financial 
                         assets the group applies the credit-adjusted effective interest rate 
                         to the amortised cost of the financial asset from initial recognition; and 

                     (b) financial assets that are not purchased or originated credit-impaired financial 
                         assets but subsequently have become credit-impaired financial assets. For these 
                         financial assets the group applies the effective interest rate to the 
                         amortised cost of the financial asset in subsequent reporting periods.

                     Initiation fees which are considered to be an integral part of the effective 
                     interest rate are accounted for over the shorter of the original contractual 
                     term and the actual term of the loan or credit sale using the effective interest 
                     rate. Trade receivables are reduced by the deferred portion of these fees. 

                     Any gain or loss arising on derecognition is recognised directly in profit or 
                     loss and presented in gains and losses arising from the derecognition of financial 
                     assets measured at amortised cost.

                     Fair value through profit and loss 
                     These are assets that do not meet the criteria for amortised cost or fair value 
                     through other comprehensive income and are measured at fair value through profit 
                     and loss. A gain or loss on derivative financial instruments that are subsequently 
                     measured at fair value through profit and loss is recognised in profit or loss and 
                     presented net within other gains/(losses) in the period in which it arises. 
                     Changes in the fair value of equity instruments that are measured at fair value 
                     through profit and loss are recognised in "Fees from ancillary services" in the 
                     statement of profit or loss.

                     Impairment 
                     From 1 January 2018 the group assesses on a forward-looking basis the expected 
                     credit losses associated with its debt instruments carried at amortised cost. 
                     The impairment methodology applied depends on whether there has been a significant 
                     increase in credit risk. The group applies the general impairment approach. 
                     The group assesses at the end of each reporting period whether the credit risk 
                     on a financial instrument has increased significantly since initial recognition. 

                     Where there has been a significant increase in credit risk since initial recognition 
                     the group measures the loss allowance for a financial instrument at an amount equal 
                     to the lifetime expected credit losses. Where there has not been a significant 
                     increase in credit risk since initial recognition the group measures the loss 
                     allowance for that financial instrument at an amount equal to 12-month expected 
                     credit losses. The group recognises in profit or loss, as an impairment gain or 
                     loss, the amount of expected credit losses (or reversal) that is required to 
                     adjust the loss allowance at the end of the reporting period.

                     Note 3.2 provides more detail on how the group determines a significant increase 
                     in credit risk and how the expected credit loss allowance is measured.

               3.3.2 IFRS 15, Revenue from Contracts with Customers
                     Revenue is recognised at the amount of the transaction price that is allocated 
                     to that performance obligation excluding amounts collected on behalf of third 
                     parties. Revenue is recognised when (or as) the entity satisfies a performance 
                     obligation by transferring a promised good or service (i.e. an asset) to a 
                     customer. An asset is transferred when (or as) the customer obtains control of 
                     that asset. 

                     The following specific criteria must also be met before revenue is recognised:

                     (i)  Retail sales
                          Retail sales comprise revenue from the sale of goods, income earned from 
                          the delivery of such goods and related product protection insurance, and is 
                          recognised when control of the products has transferred, usually on delivery 
                          of the goods. It is the group's policy to sell its products to retail 
                          customers with a right to return within 14 days. The group records a 
                          liability for estimated returns based on historical rates. The group does 
                          not operate any loyalty programmes.

                     (ii) Fees from ancillary services
                          Fees from ancillary services include revenue earned for administration of 
                          transactions with customers, as well as insurance profits received on credit 
                          life products and group schemes. These fees are recognised in revenue in 
                          the accounting period in which the services are rendered.

     3.4 Impact on the financial statements
         The following tables set out the impact of the changes in accounting policies and retrospective 
         adjustments made for each individual line item affected in the financial statements. IFRS 9 was 
         adopted without restating comparative information and the impact is not reflected in the restated 
         comparatives but recognised in the opening statement of financial position on 1 January 2018.

         Group statement of financial position
                                              Audited              Restated                Restated 
                                               31 Dec                31 Dec                   1 Jan
                                                 2017    IFRS 15       2017      IFRS 9        2018
                                                   Rm         Rm         Rm          Rm          Rm
         Non-current assets                                        
         Financial assets at fair value 
           through profit and loss                 30          -         30           -          30 
                                        
         Current assets                                        
         Trade receivables - Retail             1 482        (18)     1 464         (19)      1 445 
         Loans receivable - Financial Services  1 163          -      1 163           3       1 166 
                                        
         Equity                                        
         Retained earnings                      2 332        (13)     2 319         (11)      2 308 
                                        
         Non-current liabilities                                        
         Deferred taxation                        125         (5)       120          (5)        115

                                                                  Unaudited                Restated 
                                                                     30 Jun                  30 Jun
                                                                       2017     IFRS 15        2017
                                                                         Rm          Rm          Rm
                        
         Non-current assets                        
         Financial assets at fair value through profit and loss          22           -          22 
                        
         Current assets                        
         Trade receivables - Retail                                   1 258         (10)      1 248 
                        
         Equity                        
         Retained earnings                                            2 123          (7)      2 116 
                        
         Non-current liabilities                        
         Deferred taxation                                              143          (3)        140

         Group statement of comprehensive income                                                
                                                Unaudited             Restated    Audited             Restated
                                               six months           six months       year                 year
                                                    ended                ended      ended                ended
                                                 Jun 2017   IFRS 15   Jun 2017   Dec 2017   IFRS 15   Dec 2017
                                                       Rm        Rm         Rm         Rm        Rm         Rm
         Revenue                                    1 314        (1)     1 313      3 003       (10)     2 993 
                                                
         Finance income                               445        (1)       444        943       (10)       933 
                                                
         Other operating costs                       (636)        -       (636)    (1 410)        2     (1 408)
           Credit impairment losses                  (219)        -       (219)      (504)        2       (502)
           Other trading expenses                    (417)        -       (417)      (906)        -       (906)
                                                
         Operating profit                             328        (1)       327        752        (8)       744 
         Profit before taxation                       290        (1)       289        667        (8)       659 
         Taxation                                     (65)        -        (65)      (147)        2       (145)
         Profit and total comprehensive income 
           for the period                             225        (1)       224        520        (6)       514 
                                                
         Earnings per share (cents)                                                
         Basic                                      218.1      (0.4)     217.7       501.9     (5.6)     496.3 
         Diluted                                    216.0      (0.4)     215.6       496.7     (5.5)     491.2

         Group statement of cash flows                                                
                                                Unaudited             Restated    Audited             Restated
                                               six months           six months       year                 year
                                                    ended                ended      ended                ended
                                                 Jun 2017   IFRS 15   Jun 2017   Dec 2017   IFRS 15   Dec 2017
                                                       Rm        Rm         Rm         Rm        Rm         Rm
                                                
         Cash flows from operating activities                                                
         Operating cash flows before working 
           capital changes                            352        (1)       351        814        (8)       806
         Movement in working capital                 (178)        1       (177)      (455)        8       (447)


4.   TRADE AND OTHER RECEIVABLES                                                        
                                                                               Restated*   Restated*
                                                                  Unaudited   Unaudited     Audited
                                                                 six months  six months        year
                                                                      ended       ended       ended
                                                                   Jun 2018    Jun 2017    Dec 2017
                                                                         Rm          Rm          Rm 
     Trade receivables - Retail                                       1 845       1 533       1 784
     Provision for impairment                                          (380)       (285)       (320)
                                                                      1 465       1 248       1 464
     Loans receivable - Financial Services                            1 500       1 205       1 352
     Provision for impairment                                          (240)       (179)       (189)
                                                                      1 260       1 026       1 163
     Other receivables                                                   47          29          15
     Trade and other receivables                                      2 772       2 303       2 642
       Trade and loan receivables                                     3 345       2 738       3 136
       Provision for impairment                                        (620)       (464)       (509)
       Other receivables                                                 47          29          15
                                                                
     Movements in the provision for impairment were as follows:
     Retail                                                        
     Opening balance                                                   (320)       (284)       (284)
     Change on initial application of IFRS 9                            (64)
     Restated opening balance                                          (384)       (284)       (284)
                                                                
     Movement in provision                                                4          (1)        (36)
       Total debtor costs charged to profit and loss:                  (171)       (146)       (348)
         Credit impairment losses                                      (171)       (146)       (348)
       Debts written off during the year, net of recoveries             175         145         312
     Closing balance                                                   (380)       (285)       (320)
                                                                
     Financial Services                                                        
     Opening balance                                                   (189)       (178)       (178)
     Change on initial application of IFRS 9                            (38)
     Restated opening balance                                          (227)       (178)       (178)
                                                                
     Movement in provision                                              (13)         (1)        (11)
       Total debtor costs charged to profit and loss:                   (89)        (73)       (154)
         Credit impairment losses                                       (89)        (73)       (154)
       Debts written off during the year, net of recoveries              76          72         143                                                         
     Closing balance                                                   (240)       (179)       (189)
                                                                
     * See note 3 for details regarding the restatement as a result of the adoption of IFRS 15.


                                                                               Restated*   Restated*
                                                                  Unaudited   Unaudited     Audited
                                                                 six months  six months        year
                                                                      ended       ended       ended
                                                                   Jun 2018    Jun 2017    Dec 2017
                                                                         Rm          Rm          Rm 
     Retail                                                
     Total debtor costs as a % of revenue                    (%)       14.7        14.6        14.9         
     Total debtor costs as a % of gross receivables 
       (annualised)                                          (%)       18.5        18.9        19.3         
     Provision for impairment as a % of gross receivables    (%)       20.6        18.6        17.9         
                                                        
     Financial Services                                                
     Total debtor costs as a % of revenue                    (%)       24.9        22.9        23.2         
     Total debtor costs as a % of gross receivables 
       (annualised)                                          (%)       11.9        12.0        11.4         
     Provision for impairment as a % of gross receivables    (%)       16.0        14.9        14.0         
                                                        
     Group                                                
     Total debtor costs as a % of revenue                    (%)       17.1        16.7        16.8         
     Total debtor costs as a % of gross receivables 
       (annualised)                                          (%)       15.5        15.9        15.9         
     Provision for impairment as a % of gross receivables    (%)       18.5        17.0        16.2         
                                                        
     Non-performing trade and loan receivables 
     (being accounts 120 days or more in arrears, as a 
     percentage of the trade and loan receivable books) 
     were as follows at the reporting dates:
                                                        
     Retail                                                  (%)        9.8        10.3         9.9         
     Financial Services                                      (%)        4.2         4.4         4.2         
                                                        
     Credit-impaired trade receivables at transition date and at the end of the current reporting 
     period were R152 million and R156 million respectively.

     Credit-impaired loans receivable at transition date and at the end of the current reporting 
     period were R47 million and R58 million respectively.


5.   CONTINGENT LIABILITIES
     The group had no contingent liabilities at the reporting date.


6.   EVENTS AFTER THE REPORTING DATE                                                
     No event material to the understanding of this interim report has occurred between the end of 
     the interim period and the date of approval of these interim results.

                                                                               Restated*   Restated*
                                                                  Unaudited   Unaudited     Audited
                                                                 six months  six months        year
                                                                      ended       ended       ended
                                                                   Jun 2018    Jun 2017    Dec 2017
                                                                         Rm          Rm          Rm 
7.   FEES FROM ANCILLARY SERVICES                                        
     Service fees                                                       109          97         198 
     Insurance fees                                                      60          51         108 
     Other                                                                5           1           5 
                                                                        174         149         311 
                                                
8.   TOTAL TRADING EXPENSES                                        
     Expenses by nature                                        
     Credit impairment losses                                        
       Trade receivables - Retail                                       171         146         348 
       Loans receivable - Financial Services                             89          73         154 
     Total credit impairment losses                                     260         219         502 
                                                
     Amortisation of intangible assets                                   15          16          32 
     Depreciation of property, plant and equipment                       17          12          26 
     Operating lease charges for immovable property                       1           1           1 
       Total operating lease charges                                      3           4           8 
       Less: disclosed under cost of Retail sales                        (2)         (3)         (7)
     Marketing costs                                                    128         104         220 
     Staff costs                                                        196         165         395 
       Total staff costs                                                231         184         441 
       Less: disclosed under cost of Retail sales                       (20)        (12)        (27)
       Less: staff costs capitalised to intangibles                     (15)         (7)        (19)
     Other costs                                                        125         119         232 
     Total other trading expenses                                       482         417         906 
                                                                        742         636       1 408 
                                                
     * See note 3 for details regarding the restatement as a result of the adoption of IFRS 15.


9.   EARNINGS PER SHARE                                        
     9.1  Basic and headline earnings per share                                        
          The calculation of basic and headline earnings per share is based upon profit for the period 
          attributable to ordinary shareholders divided by the weighted average number of ordinary 
          shares in issue as follows:                                                
                                                
                                                                               Restated*   Restated*
                                                                  Unaudited   Unaudited     Audited
                                                                 six months  six months        year
                                                                      ended       ended       ended
                                                                   Jun 2018    Jun 2017    Dec 2017
                                                                         Rm          Rm          Rm 
          Profit for the period                                         260         224         514 
          Adjusted for the after-tax effect of:                                        
            Impairment of investment in associate and other               -           -           4 
            Share of impairment of property, plant and equipment 
              of associate                                                -           -           4 
          Headline earnings for the period                              260         224         522 
                                                
          Weighted average number of ordinary shares in 
            issue (million)                                             104         103         104 
          Earnings per share (cents)                                        
            Basic                                                     249.6       217.7       496.3 
            Headline                                                  249.6       217.7       503.8

     9.2  Diluted earnings and diluted headline earnings per share                                        
          The calculation of diluted earnings and diluted headline earnings per share is based upon 
          profit for the year attributable to owners of the parent divided by the fully diluted 
          weighted average number of ordinary shares in issue as follows:
                                                
                                                                               Restated*   Restated*
                                                                  Unaudited   Unaudited     Audited
                                                                 six months  six months        year
                                                                      ended       ended       ended
                                                                   Jun 2018    Jun 2017    Dec 2017
                                                                    Million     Million     Million
          Weighted average number of ordinary shares in issue           104         103         104
          Number of shares issuable under the share option scheme 
            for no consideration                                          2           1           1
          Diluted weighted average number of ordinary shares in issue   106         104         105
                                                
          Earnings per share (cents)                                        
            Diluted                                                   245.8       215.6       491.2 
            Diluted headline                                          245.8       215.6       498.6 
                                                
        * See note 3 for details regarding the restatement as a result of the adoption of IFRS 15.


10.  RECONCILIATION OF CASH GENERATED FROM OPERATIONS
                                                                               Restated*   Restated*
                                                                  Unaudited   Unaudited     Audited
                                                                 six months  six months        year
                                                                      ended       ended       ended
                                                                   Jun 2018    Jun 2017    Dec 2017
                                                                         Rm          Rm          Rm 
     Profit before taxation                                             333         289         659 
     Share of loss of associates                                          -           1           9 
     Profit from insurance cells                                         (5)         (5)        (13)
     Impairment of investment in associate                                -           -           5 
     Depreciation and amortisation                                       32          28          58 
     Share-based employee service expense                                 6           1           7 
     Exchange (profits)/losses on foreign exchange contracts             (6)          -           5
     Interest paid                                                       42          38          77 
     Interest received                                                   (2)         (3)         (7)
     Capitalised bond costs - amortised cost adjustment                   1           2           6 
     Operating cash flows before working capital changes                401         351         806 
     Movements in working capital                                      (161)       (177)       (447)
       Increase in inventories                                          (17)        (81)        (43)
       Increase in trade receivables - Retail                           (22)        (35)       (253)
       Increase in loans receivable - Financial services                (94)        (57)       (193)
       (Increase)/decrease in other receivables                         (32)         (5)          9 
       Increase in trade and other payables                              39          17          27 
       (Decrease)/increase in provisions                                (35)        (16)          6 
                                                                        240         174         359 
                                                
        * See note 3 for details regarding the restatement as a result of the adoption of IFRS 15.


11.  GROUP SEGMENTAL ANALYSIS
     The group's operating segments are identified as being Retail, Financial Services, Property and 
     Other. Operating segments are reported in a manner consistent with the internal reporting provided 
     to the chief operating decision-maker, being HomeChoice International plc's executive directors. 
     The group's reportable segments are unchanged from the previous reporting date.

     Retail consists mainly of the group's HomeChoice and FoneChoice operations, whereas Financial 
     Services represents the group's FinChoice operations. The group's property company, which owns 
     commercial properties utilised within the group, are included in the Property segment. The Other 
     segment relates mainly to the holding company's standalone results, as well as those of its associates.

     The chief operating decision-maker monitors the results of the business segments separately for the 
     purposes of making decisions about resources to be allocated and of assessing performance. They 
     assess the performance of Retail and Property segments based upon a measure of operating profit and 
     Financial Services and Other segments based on a measure of operating profit after interest received 
     and interest paid.


12.  FAIR VALUE OF FINANCIAL INSTRUMENTS                                        
     The carrying amounts reported in the statement of financial position approximate fair values. 
     Discounted cash flow models are used for trade and loan receivables. The discount yields in these 
     models use calculated rates that reflect the return a market participant would expect to receive 
     on instruments with similar remaining maturities, cash flow patterns, credit risk, collateral 
     and interest rates.


13.  CAPITAL COMMITMENTS FOR PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
                                                                  Unaudited   Unaudited     Audited
                                                                 six months  six months        year
                                                                      ended       ended       ended
                                                                   Jun 2018    Jun 2017    Dec 2017
                                                                         Rm          Rm          Rm 
     Approved by the directors                                            6          36          14 
            
                                    
14.  RELATED PARTY TRANSACTIONS AND BALANCES                                        
     Related party transactions similar to those disclosed in the group's annual financial statements 
     for the year ended 31 December 2017 took place during the period and related party balances are 
     existing at the reporting date. Related party transactions include key management personnel 
     compensation and intragroup transactions which have been eliminated on consolidation.
            
                                    
15.  SEASONALITY                                        
     Due to its seasonal nature, the Retail business has a history of generating higher revenues 
     during the second half of the year.


16.  PREPARATION AND REVIEW OF INTERIM FINANCIAL STATEMENTS                                        
     These interim financial statements were prepared by the group's finance department, acting under 
     the supervision of P Burnett, CA (SA), finance director of the group.

     The interim results have not been reviewed or audited by our auditors, PricewaterhouseCoopers Inc.


17.  SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
     Other than as disclosed under note 3.1 above, the significant judgements made by management 
     in applying the group's accounting policies and the key sources of estimation uncertainty were 
     the same as those that applied to the consolidated financial statements for the year ended 
     31 December 2017.


STATISTICS
                                                                               Restated*   Restated*
                                                                   Jun 2018    Jun 2017    Dec 2017
Growth in revenue                                            (%)       16.1        14.0        12.3 
Retail gross profit margin                                   (%)       51.9        50.1        51.2 
Operating profit margin                                      (%)       24.5        24.9        24.9 
Earnings before interest, tax, depreciation and 
  amortisation (EBITDA)                                     (Rm)        406         354         793 
Growth in EBITDA                                             (%)       14.7        14.2        13.1 
EBITDA margin                                                (%)       26.6        27.0        26.5 
                                                
Solvency and liquidity                                                
Net asset value per share                                (cents)      2 417       2 077       2 282
Growth in net asset value                                    (%)        5.9         5.3        15.7 
Inventory turn                                           (times)        3.1         2.8         3.6 
Net debt/equity ratio                                        (%)       28.2        29.2        28.3 
                                               
Performance                                                
Growth in trade receivables - Retail                         (%)        0.1         2.2        19.8 
Growth in loans receivable - Financial Services              (%)        8.3         5.8        20.0 
Growth in cash generated from operations                     (%)       37.9        20.0        29.2 
Cash conversion                                              (%)       59.1        49.2        45.3 
Return on equity - annualised                                (%)       21.2        21.4        23.3 
                                                
Shareholding                                                
Number of shares (million)                                        
- In issue, net of treasury shares                                      104         104         104 
- Weighted shares in issue, net of treasury shares                      104         103         104 
- Diluted weighted average                                              106         104         105 
                                                
Earnings per share (cents)                                                
- basic                                                               249.6       217.7       496.3 
- diluted                                                             245.8       215.6       491.2 
- headline (HEPS)                                                     249.6       217.7       503.8 
- diluted HEPS                                                        245.8       215.6       498.6 
                                                
In April 2018 the final dividend for the 2017 financial year of R114 million (109 cents per share) 
was paid to shareholders.

In April 2017 the final dividend for the 2016 financial year of R90 million (87 cents per share) 
was paid to shareholders.

* See note 3 for details regarding the restatement as a result of the adoption of IFRS 15.
              
27 August 2018                     


Directorate
Non-executive directors
S Portelli* (Chairman), A Chorn*, R Garratt, E Gutierrez-Garcia, R Hain*, C Rapa*, 
A Ogunsanya (alternate)    * Independent
Executive directors
G Lartigue (Chief Executive Officer), P Burnett, S Maltz

Administration
Country of incorporation
Republic of Malta
Date of incorporation
22 July 2014
Company registration number: C66099
Registered office: 93 Mill Street, Qormi, QRM3012, Republic of Malta
Company secretary: George Said
Auditors: PricewaterhouseCoopers, Republic of Malta
Corporate bank: Deutsche Bank International Limited, Channel Islands
Sponsor: Rand Merchant Bank, a division of FirstRand Bank Limited
Transfer secretaries: Computershare Investor Services Proprietary Limited
Website: www.homechoiceinternational.com


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