Wrap Text
Unaudited interim results for the six months ended 31 December 2014
JD Group Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1981/009108/06)
ISIN: ZAE000030771
JSE share code: JDG
("JD Group Limited" or "the Group")
Unaudited interim results
For the six months ended 31 December 2014
# Extracted financial information from the unaudited results for the six months ended 31 December 2014.
Key features
Revenue from continuing operations increased by 10,5% to R17,0 billion (1H2014: R15,3 billion)
Headline earnings per share from continuing operations increased by 57,2% to70,9 cents (1H2014: 45,1 cents)
Operating profit from continuing operations increased by 16,3% to
R356 million (1H2014: R306 million)
Loss from discontinued operations of R1,6 billion (1H2014: R236 million)
Sale of the Consumer Finance business approved by shareholders
Summarised group financial statements
*Re-presented
Summarised group statement of comprehensive income Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2014 2013 2014
R million R million R million
Continuing operations
Revenue 16 968 15 349 30 582
Cost of sales (12 590) (11 284) (22 656)
Operating expenses (4 022) (3 759) (7 389)
Administration and other expenses (3 347) (3 386) (6 564)
Debtors' costs (426) (110) (326)
Depreciation and amortisation (240) (242) (452)
Capital items (note 2) (9) (21) (47)
Operating profit 356 306 537
Investment income 2 7 11
Net finance costs (127) (141) (213)
Share of loss of joint venture - - (6)
Share of loss of associate - (4) -
Profit before taxation from continuing operations 231 168 329
Taxation (34) (67) (128)
Profit for the period from continuing operations 197 101 201
Loss for the period from discontinued operations (note 3) (1 632) (236) (2 124)
Loss for the period (1 435) (135) (1 923)
Profit for the period from continuing operations attributable to:
Owners of parent 181 85 177
Non-controlling interests 16 16 24
Profit for the period from continuing operations 197 101 201
Loss for the period from discontinued operations attributable to:
Owners of parent (1 632) (236) (2 124)
Non-controlling interests - - -
Loss for the period from discontinued operations (1 632) (236) (2 124)
* The prior period figures have been re-presented to reflect the impact of the discontinued operations.
Summarised group statement of other comprehensive income Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2014 2013 2014
R million R million R million
Loss for the period (1 435) (135) (1 923)
Exchange differences on translating foreign operations 11 13 18
Total comprehensive loss for the period (1 424) (122) (1 905)
Attributable to:
Owners of parent (1 440) (138) (1 929)
Non-controlling interests 16 16 24
Total comprehensive loss for the period (1 424) (122) (1 905)
Summarised group statement of cash flows Unaudited *Re-presented *Re-presented
6 months Unaudited Audited
ended 6 months 12 months
31 December ended ended
2014 31 December 30 June
R million 2013 2014
R million R million
Cash generated by trading 1 471 1 540 2 698
Decrease in working capital 16 732 1 429
Cash generated by operations 1 487 2 272 4 127
Increase in installment sales receivables (815) (998) (1 754)
Dividends paid (4) (264) (274)
Taxation paid (154) (218) (454)
Interest paid (341) (348) (736)
Interest received 34 29 41
Net cash flows from operating activities 207 473 950
Net cash flows from investing activities (88) (61) (212)
Net cash flows from financing activities 189 (854) (658)
Effect of exchange rate translation on cash and cash equivalents 11 - 19
Net increase/(decrease) in cash and cash equivalents 319 (442) 99
Cash and cash equivalents at beginning of the period 890 791 791
Cash and cash equivalents at end of the period 1 209 349 890
* The cash flow has been re-presented to combine the secured and unsecured instalment sales receivables movement, previously disclosed separately under
working capital and cash flows from operating activities. Additions to vehicle rental fleet, which are financed through finance leases, are now excluded
from working capital movements as a non-cash item.
Summarised group statement of financial position Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2014 2013 2014
R million R million R million
Assets
Non-current assets
Intangible assets and goodwill 3 246 3 582 3 341
Property, plant and equipment 2 446 2 694 2 525
Investments and loans 119 201 130
Deferred taxation asset 1 441 390 801
Trade-, loan- and other receivables 55 2 406 55
Total non-current assets 7 307 9 273 6 852
Current assets
Inventories 4 423 4 482 4 124
Trade- and loan receivables and other current financial assets 1 778 8 028 1 464
Vehicle rental fleet 1 162 715 534
Taxation 69 - 13
Cash and cash equivalents 1 224 1 295 1 199
Total current assets 8 656 14 520 7 334
Assets classified as held for sale 4 746 - 6 849
Total assets 20 709 23 793 21 035
Equity and liabilities
Stated capital 5 445 4 472 5 445
Other reserves (48) 175 (67)
Retained earnings 946 4 007 2 399
Shareholders' equity 6 343 8 654 7 777
Non-controlling interests 58 47 47
Total equity 6 401 8 701 7 824
Non-current liabilities
Interest-bearing borrowings 860 7 228 1 860
Loans from related parties 1 122 - 3 174
Non-interest-bearing liabilities and provisions 260 234 399
Deferred taxation liability 238 475 293
Total non-current liabilities 2 480 7 937 5 726
Current liabilities
Trade, other payables, provisions and other current financial liabilities 6 545 6 165 5 656
Interest-bearing borrowings 2 351 - 1 324
Loans from related parties 2 883 - -
Taxation - 44 -
Bank overdraft 15 946 309
Total current liabilities 11 794 7 155 7 289
Liabilities classified as held for sale 34 - 196
Total liabilities 14 308 15 092 13 211
Total equity and liabilities 20 709 23 793 21 035
Net debt 6 007 6 879 5 468
Gearing ratio (net) (%) 95 79 70
Net asset value per share (cents) 2 387 3 835 2 927
Supplementary information Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2014 2013 2014
R million R million R million
Loss per share from continuing and discontinued operations:
Headline loss per ordinary share (cents) (450,9) (59,1) (563,2)
Diluted headline loss per ordinary share (cents) (447,6) (58,9) (518,8)
Basic loss per ordinary share (cents) (546,0) (67,1) (859,5)
Diluted basic loss per ordinary share (cents) (542,0) (66,9) (791,7)
Earnings per share from continuing operations:
Headline earnings per ordinary share (cents) 70,9 45,1 93,9
Diluted headline earnings per ordinary share (cents) 70,3 45,0 86,5
Basic earnings per ordinary share (cents) 68,3 37,1 77,9
Diluted basic earnings per ordinary share (cents) 67,8 37,0 71,8
Reconciliation of headline loss
From continuing and discontinued operations:
Loss attributable to owners of parent (1 451) (151) (1 947)
Capital items (note 2) 351 21 909
Taxation thereon (98) (6) (236)
Headline loss (1 198) (136) (1 274)
Reconciliation of headline earnings
From continuing operations:
Profit attributable to owners of parent 181 85 177
Capital items (note 2) 9 21 47
Taxation thereon (3) (6) (10)
Headline earnings from continuing operations 187 100 214
Number of shares held outside the Group (000) 265 681 225 681 265 681
Weighted average number of shares in issue (000)
- basic 265 681 225 681 226 558
- diluted 267 641 244 808 245 958
EBITDA from continuing operations (excluding capital items) 605 569 1 036
The earnings/(loss) and headline earnings/(loss) per share are calculated based on actual amounts as opposed to amounts rounded to R million. Where
dilutive earnings per share are anti-dilutive, these have been included for reconciliation purposes only.
Summarised group statement of changes in equity Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2014 2013 2014
R million R million R million
Balance at beginning of the period 7 824 9 141 9 141
Changes in stated capital
Proceeds from rights issue (net of costs associated with rights issue) - - 973
Change in reserves
Loss for the period attributable to owners of the parent (1 451) (151) (1 947)
Foreign currency translation reserve through other comprehensive income 11 13 18
Share-based payment 8 - (26)
Dividends paid - (264) (264)
Settlement of convertible bond, net of tax - - (22)
Other reserve movements (3) - (11)
Change in non-controlling interests
Total comprehensive income for the period attributable to non-controlling interests 16 16 24
Other non-controlling interests movements (4) (54) (62)
Balance at end of period 6 401 8 701 7 824
Notes
1. Accounting policies and basis of preparation
The summarised consolidated financial information has been prepared and presented in accordance with the framework concepts and the measurement and
recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the Listings Requirements of the JSE Limited, the
information as required by IAS 34: Interim Financial Reporting and the requirements of the South African Companies Act 71 of 2008. The report has been
prepared using accounting policies that comply with IFRS, which are consistent with those applied in the financial statements for the year ended 30 June
2014, except for the adoption of accounting standards and interpretations that became effective during the current period. The adoption of these standards
had no material impact on the Group.
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2014 2013 2014
R million R million R million
2. Capital items
From continuing operations
Loss on disposal of assets 9 16 45
Other impairments - 5 -
Impairment of goodwill - - 2
Total 9 21 47
From discontinued operations
Impairment loss on disposal group 342 - 808
Impairment of goodwill - - 54
Total 342 - 862
Total capital items 351 21 909
3. Loss for the period from discontinued operations
Included in the loss for the period from discontinued operations:
Debtors' costs 1 903 985 2 932
4. Diluted earnings and headline earnings per share
The number of shares for diluted earnings purposes has been calculated after considering the dilutive impact of share rights, the cash value to be
received in future in respect of unissued shares granted to employees.
5. Related parties
The Group entered into various transactions with related parties, which occurred under terms that are no more favourable than those arranged with
independent third parties.
6. Subsequent events
On 25 February 2015, a general meeting of shareholders was held and the sale of the Consumer Finance division was approved by 100% of all shares voted by
shareholders present in person or represented by proxy. The remaining conditions precedent will be fulfilled or waived on or before 31 May 2015.
Segmental analysis for continuing operations RETAIL* AUTOMOTIVE CORPORATE AND OTHER GROUP
6 months 6 months 12 months 6 months 6 months 12 months 6 months 6 months 12 months 6 months 6 months 12 months
ended ended ended ended ended ended ended ended ended ended ended ended
31 Dec 31 Dec 30 June 31 Dec 31 Dec 30 June 31 Dec 31 Dec 30 June 31 Dec 31 Dec 30 June
2014 2013 2014 2014 2013 2014 2014 2013 2014 2014 2013 2014
Revenue Rm 7 452 7 085 13 455 9 762 8 485 17 547 (246) (221) (420)# 16 968 15 349 30 582
Sale of merchandise Rm 6 172 5 968 11 024 8 809 7 635 15 842 - - (6) 14 981 13 603 26 860
Sale of merchandise on credit Rm 1 696 1 729 2 920 - - - - - - 1 696 1 729 2 920
Depreciation and amortisation Rm 82 78 164 98 102 172 60 62 116 240 242 452
Operating profit/(loss) before debtors' costs Rm 613 529 609 266 232 512 (97) (345) (258) 782 416 863
Debtors' costs Rm (426) (110) (326) - - - - - - (426) (110) (326)
Operating profit/(loss) after debtors' costs Rm 187 419 283 266 232 512 (97) (345) (258) 356 306 537
Operating margin before debtors' costs % 8,2 7,5 4,5 2,7 2,7 2,9 - - - 4,6 2,7 2,8
Total assets Rm 5 088 4 933 5 167 6 949 6 360 6 258 3 926 3 211 2 761 15 963 14 504 14 186
Capital expenditure Rm 62 70 98 17 28 60 33 50 212 112 148 370
Number of stores 1 216 1 223 1 223 124 121 118 - - - 1 340 1 344 1 341
# Elimination of interdivisional origination fees
* Insurance entities are included under the retail segment following the disposal of the Consumer Finance business
for additional information www.jdg.co.za
Period under review
Challenging operating conditions within the retail market, linked to reduced consumer spending as a result of pressure on disposable income and over-
indebtedness of consumers, continued to inhibit market growth during the period under review.
Despite these conditions, the Group managed to increase revenue from continuing operations by 10,5% to R17,0 billion while gross margins, which were
subject to significant pressure due to the trading conditions, were largely maintained. The initial restructuring and cost optimisation initiatives
implemented by management resulted in operating expenses, excluding debtors' costs, decreasing by 1,5% during the period under review. Operating profit
increased by 16,3% to R356 million (1H2014: R306 million).
The other key features of the period's results are as follows:
- Headline earnings per share from continuing operations increased by 57,2% to 70,9 cents (1H2014: 45,1 cents)
- Basic earnings per share from continuing operations increased by 84,1% to 68,3 cents (1H2014: 37,1 cents)
- Loss from discontinued operations of R1,6 billion (1H2014: R236 million)
Note: 1H2014 numbers have been re-presented to reflect the impact of discontinued operations.
RETAIL
The Retail segment, consists of the retail of furniture and related supply chain services, consumer electronics, appliances, building materials and do-it-
yourself (DIY) products and the Insurance operations. The Insurance operations are excluded from the sale of the Consumer Finance business. As a result of
this, and based on its direct link to retail activities, it is now reported as part of the Retail segment.
The Retail segment reported growth in merchandise sales of 3,4% to R6,2 billion (1H2014: R6,0 billion). Merchandise sales increased by 7,8% within the
furniture retail chains. This growth was achieved despite more stringent credit granting criteria being applied, reducing the credit sales mix in
furniture retail from 64,9% to 59,7%. In addition, SteinBuild reported an increase of 10,1% in merchandise sales within the building materials and
DIY market. Consumer electronics and appliances retail experienced challenging trading conditions as a result of competitive pricing.
Gross margins within the segment were generally maintained while operating profit, before debtors' costs, increased to R613 million (1H2014: R529 million)
resulting in an increased operating margin of 8,2% (1H2014: 7,5%). A more stringent approach has been applied to the recognition of bad debts in the
Insurance operations, resulting in debtors' costs of R426 million (1H2014: R110 million).
The logistics platform remains a key area of focus for management to improve efficiencies and profitability.
CONSUMER FINANCE
Discontinued operations
As reported previously on SENS, the Consumer Finance division, excluding the Insurance operations, is classified as a discontinued operation following the
acceptance of an offer from RCS Cards Proprietary Limited. In terms of International Financial Reporting Standards, the disposal group was written down to
its net realisable asset value of R4,7 billion on 31 December 2014, based on the purchase price formula in terms of the business sale agreement. The
proceeds will be utilised to reduce the Group's interest-bearing debt, thereby improving its gearing.
On 25 February 2015 a general meeting of shareholders was held and the business sale was approved by 100% of all shares voted by shareholders present in
person or represented by proxy. The remaining conditions precedent must be fulfilled or waived on or before 31 May 2015.
AUTOMOTIVE
Unitrans Auto reported a strong performance during the period under review, in particular during the month of December 2014. This performance can largely
be ascribed to the effective execution of management's strategy to focus on traditional automotive brands which are predominantly manufactured in South
Africa. This strategy provides a more sustainable revenue stream, which is less affected by foreign currency movements. Other market factors contributing
to the period's results include interest rates remaining low and pre-emptive buying by consumers in light of expected price increases resulting from the
weakening rand.
Merchandise sales increased by 15,4% to R8,8 billion, contributing 58,8% of the Group's total merchandise sales. Operating profit increased by 14,6% to
R266 million (1H2014: R232 million).
Although new vehicle volumes reduced slightly, pre owned vehicle volumes improved strongly. The servicing and parts division reported good growth in
revenue, while Hertz reported pleasing results in terms of revenue and operating profit growth.
STATEMENT OF FINANCIAL POSITION AND CASH FLOW
Net debt increased from R5,5 billion at 30 June 2014 to R6,0 billion at 31 December 2014. This is a result of an increase in the related-party loan from
the Steinhoff group, the Group's majority shareholder. The loan is utilised to manage the Group's capital requirements and bears interest at market-related
rates.
Cash generated by operations amounted to R1,5 billion compared to R2,3 billion in the comparable period. This is mainly due to working capital remaining
stable compared to the decrease in the previous period.
PROSPECTS
Management will continue to implement its process of operational restructuring during the remainder of the financial year with the aim of creating long-
term sustainable retail operations.
In addition, management's focus will be on the conclusion of the sale of the Consumer Finance business, and the implementation thereof.
The Automotive segment is further expected to provide continued stable performance during the next six months.
DIVIDEND
The Board has resolved that, based on the performance of the Group during the past six months, no interim dividend will be declared.
By order of the Board
Vusi Khanyile
Independent Chairman
Peter Griffiths
Chief Executive Officer
Jan van der Merwe
Chief Financial Officer
2 March 2015
Executive directors: PM Griffiths (Chief executive officer), JHN van der Merwe (Chief financial officer), KR Chauke Independent non-executive directors: VP
Khanyile (Independent chairman), SF Booysen, DC Brink, MT Lategan, SH Muller Non-executive directors: AB la Grange (Snr), AB la Grange (Jnr), MJ Jooste, DM
van der Merwe Company secretary: Steinhoff Africa Secretarial Services Proprietary Limited 28 6th Street Wynberg Sandton, 2090 (PO Box 1955, Bramley,
2018) Press announcement prepared under the supervision of: JHN van der Merwe CA(SA) and the directors of the company take full responsibility for this
press announcement Registered office: 11th Floor, JD House, 27 Stiemens Street, Braamfontein, Johannesburg, 2001 (PO Box 4208, Johannesburg, 2000)
telephone +27 11 408 0408 Transfer secretaries: Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg, 2001, telephone +27
11 370 5000, facsimile +27 11 688 5238 Sponsor: PSG Capital Proprietary Limited, First Floor, Building 8, Inanda Greens Business Park, 54 Wierda Road West,
Wierda Valley, Sandton, 2196, telephone +27 11 032 7400, facsimile +27 11 784 4755 Independent auditor: Deloitte & Touche, Deloitte Place, The Woodlands,
20 Woodlands Drive, Woodmead, Sandton, Johannesburg, Gauteng, 2052, telephone +27 11 806 5000, facsimile +27 11 806 5003
www.jdg.co.za
Date: 02/03/2015 12:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
