Sharenet Sites 
Sharenet Sites
INTERIM REPORT FOR THE FOUR MONTHS ENDED 31 DECEMBER 1998 CONSOLIDATED INCOME STATEMENT PRO FORMA ADJUSTED UNAUDITED FOUR MONTHS FOUR MONTHS
ENDED ENDED FORECAST 31 DECEMBER 31 DECEMBER 10 MONTH 1997 1 1998 % PERIOD 2 R'000 R'000 CHANGE R'000
660 332 REVENUE 964 405 46 2 329 590 OPERATING INCOME
36 047 BEFORE DEPRECIATION 95 504 165 229 899 6 109 DEPRECIATION 16 317 167 37 698 OPERATING INCOME
29 938 BEFORE FINANCE COSTS 79 187 165 192 201 6 703 NET FINANCE INCOME 3 172 (53) 21 877 36 641 INCOME BEFORE TAXATION 82 359 125 214 078 (9 394) TAXATION (5 960) (37) (48 151) 27 247 NET INCOME AFTER
TAXATION 76 399 180 165 927 (4 074) ABNORMAL ITEMS SHARE OF ASSOCIATE COMPANIES'
4 480 RETAINED INCOME 3 103 (31) 1 408 ATTRIBUTABLE TO
(364) OUTSIDE SHAREHOLDERS (1 205) 231 (866) INCOME ATTRIBUTABLE
27 289 TO SHAREHOLDERS 78 297 187 166 469 NUMBER OF SHARES
653 000 IN ISSUE ('000) 653 000 650 000 WEIGHTED AVERAGE NUMBER OF SHARES 650 516 IN ISSUE ('000) 650 516
27 289 ATTRIBUTABLE INCOME 78 297 187 166 469 ('000) HEADLINE EARNINGS
31 363 ('000) 78 297 150 166 469 EARNINGS PER SHARE
4,2 (CENTS) 12,0 186 25,6 HEADLINE EARNINGS PER
4,8 SHARE (CENTS) 12,0 150 25,6
1 FIGURES EXTRACTED FROM THE ADJUSTED PRO FORMA PROFIT HISTORY AS DISCLOSED IN THE PROSPECTUS DATED 28 AUGUST 1998, PUBLISHED PRIOR TO GOING PUBLIC.
2 FIGURES EXTRACTED FROM THE PROFIT FORECAST ON WHICH THE INDEPENDENT REPORTING ACCOUNTANT'S REPORT WAS ISSUED AND DISCLOSED IN THE PROSPECTUS DATED 28 AUGUST 1998. CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 1998
UNAUDITED PRO FORMA 31 DECEMBER 31 AUGUST 1998 1998 *
R'000 R'000 CAPITAL EMPLOYED
ORDINARY SHAREHOLDERS' INTEREST 1 231 513 1 094 832 OUTSIDE SHAREHOLDERS' INTEREST 10 660 1 688
DEFERRED TAXATION 2 961 1 503
LONG-TERM LIABILITIES 111 344 89 141
1 356 478 1 187 164 EMPLOYMENT OF CAPITAL
FIXED ASSETS 900 301 705 277 INVESTMENTS AND LOANS 141 217 70 907
CURRENT ASSETS 900 660 830 639 TOTAL ASSETS 1 942 178 1 606 823 CURRENT LIABILITIES 585 700 419 659 - INTEREST BEARING 121 133
- OTHER 464 567 419 659 1 356 478 1 187 164 NUMBER OF SHARES IN
ISSUE ('000) 653 000 650 000 TANGIBLE NET ASSET VALUE PER SHARE (CENTS) 189 168
GEARING RATIO (NET) (%) 19 8
* FIGURES EXTRACTED FROM THE PROSPECTUS DATED 28 AUGUST 1998, PUBLISHED PRIOR TO GOING PUBLIC. ABRIDGED GROUP CASH FLOW STATEMENT
FOR THE FOUR MONTHS
ENDED 31 DECEMBER
1998
R'000
CASH FLOW FROM OPERATING ACTIVITIES 69 501
CASH OUTFLOW FROM INVESTING ACTIVITIES (212 837)
CASH FLOW FROM FINANCING ACTIVITIES 22 203
NET DECREASE IN CASH POSITION 121 133
BORROWINGS AT BEGINNING OF PERIOD -
BORROWINGS AT END OF PERIOD 121 133 COMMENTS PRE-LISTING STRUCTURING
STEINHOFF INTERNATIONAL HOLDINGS LIMITED ("STEINHOFF INTERNATIONAL") WAS LISTED ON THE JOHANNESBURG STOCK EXCHANGE ON 23 SEPTEMBER 1998 FOLLOWING THE MERGER OF STEINHOFF AFRICA, STEINHOFF GERMANY AND STEINHOFF EUROPE, WITH EFFECT FROM 1 SEPTEMBER 1998. STEINHOFF INTERNATIONAL NOW COMPRISES A MAJOR INTERNATIONAL FURNITURE GROUP WITH 43 FACTORIES SPREAD ACROSS EUROPE AND SOUTH AFRICA. EIGHTY PERCENT OF GROUP REVENUE IS GENERATED OUTSIDE OF SOUTH AFRICA. 1. ACCOUNTING PRINCIPLES
THE SAME ACCOUNTING POLICIES AND METHODS OF MEASUREMENT AND RECOGNITION AS THOSE APPLIED IN THE PRO FORMA 1997 ANNUAL FINANCIAL STATEMENTS HAVE BEEN FOLLOWED IN PREPARING THIS INTERIM REPORT. 2. RESULTS
THE GROUP EXPERIENCED A GROWTH IN REVENUE OF 46% COMPARED TO THE CORRESPONDING PERIOD OF THE PREVIOUS YEAR. OPERATING INCOME BEFORE FINANCE COSTS INCREASED BY 165% FOR THE PERIOD UNDER REVIEW TO R79,187 MILLION (1997: R29,938 MILLION). THE OPERATING MARGIN OF 8% ACHIEVED AGAINST LAST YEAR'S 4,5% WAS BROUGHT ABOUT BY IMPROVED EFFICIENCIES, DUE TO SYNERGIES AND OPTIMUM VOLUME REALISATION ACHIEVED IN MOST FACTORIES. FINANCE INCOME REDUCED AS A RESULT OF THE INCREASED TURNOVER REQUIRING ADDITIONAL WORKING CAPITAL AS WELL AS THE CASH INVESTMENTS MADE IN MEGACOR AND BRAECROFT. THE RESULTS, TOGETHER WITH A DECREASE IN TAXATION, RESULTED IN NET INCOME ATTRIBUTABLE TO ORDINARY SHAREHOLDERS INCREASING BY 187% TO R78,297 MILLION FROM R27,289 MILLION. THE LOWER THAN ANTICIPATED EFFECTIVE TAX CHARGE IS DUE TO THE GROUP'S FAVOURABLE TAX
DISPENSATIONS NEGOTIATED WITH THE RELEVANT AUTHORITIES IN EASTERN EUROPE. IT IS ANTICIPATED THAT THE EFFECTIVE TAX RATE WILL BE MAINTAINED AT THE CURRENT LEVELS OF TAXATION.
EARNINGS PER SHARE INCREASED BY 186% WITH HEADLINE EARNINGS PER SHARE
INCREASING BY 150% COMPARED TO THE CORRESPONDING PERIOD FOR THE PREVIOUS YEAR, DUE TO ABNORMAL ITEMS INCLUDED IN THE PRO FORMA FIGURES OF THAT PERIOD. THE GROUP'S GEOGRAPHIC BUSINESS ACTIVITY ENSURES AN EVEN SPREAD OF EARNINGS THROUGHOUT THE CALENDAR YEAR. 3. REVIEW OF OPERATIONS
THE TRANSFORMATION OF STEINHOFF INTERNATIONAL INTO A PUBLIC LISTED COMPANY HAS OCCURRED EFFECTIVELY AND EFFICIENTLY WITH PROPER MANAGEMENT STRUCTURES IN PLACE. APPROPRIATE DISCIPLINES AND CONTROLS ARE MAINTAINED AT ALL TIMES WITHOUT INHIBITING FLEXIBILITY TO RESPOND TO CHANGES IN THE MARKETPLACE.
THE RELATIVE CONTRIBUTIONS TO GROUP TURNOVER AND EARNINGS OF STEINHOFF EUROPE AND STEINHOFF GERMANY COMPARED TO STEINHOFF AFRICA ARE AS FOLLOWS FOR THE PERIOD UNDER REVIEW:
R'000 R'000 R'000
GERMANY AND EUROPE AFRICA TOTAL
REVENUE 768 382 196 023 964 405
PERCENTAGE 80 20 100
ATTRIBUTABLE EARNINGS 54 471 23 826 78 297
PERCENTAGE 70 30 100
AN AVERAGE EXCHANGE RATE OF R3,59: 1 DM WAS USED TO CONVERT FOREIGN CURRENCY AMOUNTS INTO LOCAL CURRENCY.
R88,024 MILLION OF THE REVENUE OF AN ASSOCIATE COMPANY OF STEINHOFF AFRICA WAS EXPORTED TO EUROPE AND THE USA. THIS IS NOT REFLECTED AS REVENUE FOR THE PERIOD UNDER REVIEW AS MEGACOR, THE ASSOCIATE COMPANY, WAS NOT CONSOLIDATED AT 31 DECEMBER 1998. MEGACOR BECAME A WHOLLY OWNED SUBSIDIARY WITH EFFECT FROM 1 JANUARY 1999. HAD THE RESULTS OF MEGACOR BEEN INCLUDED IN THE RESULTS OF STEINHOFF AFRICA ON A CONSOLIDATED BASIS FOR THE PERIOD UNDER REVIEW, IT WOULD HAVE INCREASED STEINHOFF AFRICA'S REVENUE BY 45%. STEINHOFF AFRICA CURRENTLY DERIVES 31% OF ITS REVENUE FROM EUROPE AND THE USA. IT IS THE GROUP'S STRATEGY TO INCREASE THIS CONTRIBUTION SUBSTANTIALLY. 4. YEAR 2000 COMPLIANCE
THE BOARD DOES NOT FORESEE ANY SIGNIFICANT IMPACT ON THE GROUP'S PERFORMANCE WITH THE ADVENT OF THE YEAR 2000 AS IT IS CONFIDENT THAT ALL SYSTEMS WORLDWIDE WILL BE YEAR 2000 COMPLIANT BY NOVEMBER 1999. IT IS NOT EXPECTED THAT MATERIAL ADDITIONAL COSTS WILL BE INCURRED IN THIS REGARD. 5. DIVIDEND POLICY
IT IS THE COMPANY'S POLICY TO DECLARE AN ANNUAL DIVIDEND AT THE FINANCIAL YEAR-END. 6. PROSPECTS
THE GROUP PERFORMED EXCEPTIONALLY NOTWITHSTANDING THE DEPRESSED LOCAL MARKET. STEINHOFF INTERNATIONAL IS WELL POSITIONED TO INCREASE ITS MARKET SHARE IN A HIGHLY FRAGMENTED EUROPEAN FURNITURE MARKET. THE GROUP'S EXCELLENT MARKETING INFRASTRUCTURE IN EUROPE BODES WELL FOR THE EXPORT DRIVE OF ITS SOUTH AFRICAN PRODUCTS.
MANAGEMENT IS CONFIDENT THAT IT WILL EXCEED ITS PROFIT FORECAST FOR THE FINANCIAL PERIOD ENDING 30 JUNE 1999. BY ORDER OF THE BOARD F J NEL SECRETARY 2 MARCH 1999 DIRECTORS
BRUNO STEINHOFF*# (EXECUTIVE CHAIRMAN), NORBERT STEINHOFF*#, MARKUS JOOSTE* FRIKKIE NEL*, CLAAS DAUN#, LEN KONAR, DIRK ACKERMAN *EXECUTIVE DIRECTOR #GERMAN CITIZEN REGISTERED OFFICE 22 DACRES AVENUE, EPPING 2, CAPE TOWN, 7460 TEL (021) 535 0867 FAX (021) 544 553 TRANSFER SECRETARIES
MERCANTILE REGISTRARS, 11 DIAGONAL STREET, JOHANNESBURG, 2001
