1998/05/22
UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE EIGHT MONTHS ENDED [JSE Securities Exchange - SENS]
 
22/05/1998

WOOLWORTHS HOLDINGS LIMITED
UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE EIGHT MONTHS ENDED
28 FEBRUARY 1998
INVESTING FOR THE FUTURE
FURTHER TO THE ANNOUNCEMENTS DATED 15 OCTOBER 1997 AND 8 MAY 1998, WOOLWORTHS
HAVE DECIDED TO RAISE APPROXIMATELY US$ 105 MILLION (EXCLUDING ANY OVER
ALLOTMENT OPTION) THROUGH AN INTERNATIONAL OFFER ("OFFER") OF ORDINARY SHARES
IN THE FORM OF SHARES AND GLOBAL DEPOSITORY RECEIPTS TO REPAY THE BRIDGING
LOANS AND RELATED COSTS OF FINANCING THE ACQUISITION OF COUNTRY ROAD LIMITED
("COUNTRY ROAD") AND TO PURCHASE THE SHARES OF COUNTRY ROAD OWNED BY THE
MINORITY SHAREHOLDERS (IF AVAILABLE) IN TERMS OF AN ACQUISITION ISSUE AND TO
SUPPORT OTHER COUNTRY ROAD INITIATIVES IN TERMS OF A GENERAL ISSUE OF SHARES
FOR CASH. ANY SHARES REQUIRED IN TERMS OF AN OVER ALLOTMENT OPTION WILL BE
ISSUED IN TERMS OF THE GENERAL AUTHORITY TO ISSUE SHARES FOR CASH.
AS A RESULT, WOOLWORTHS WILL BE ISSUING A PRELIMINARY OFFERING CIRCULAR
("CIRCULAR") TO INTERNATIONAL INSTITUTIONS ON 22 MAY 1998. THE CIRCULAR
CONTAINS THE EIGHT MONTH CONSOLIDATED FINANCIAL STATEMENTS OF WOOLWORTHS
("FINANCIAL STATEMENTS") WHICH HAVE NOT BEEN ISSUED TO SOUTH AFRICAN
SHAREHOLDERS PREVIOUSLY. THEREFORE, THE FINANCIAL STATEMENTS ARE PROVIDED BELOW
INCOME STATEMENT
YEAR ENDED                          EIGHT MONTHS ENDED
30 JUNE                                 28 FEBRUARY
1997                                   1998     1997     %
RM                               NOTE    RM       RM   CHANGE
4 333.0  REVENUE                      3 330.2  2 799.3
4 227.6  TURNOVER                     3 166.0  2 732.1   15.9
         INTEREST AND OTHER
105.4    REVENUE                        164.2     67.2
363.0    NET PROFIT BEFORE TAX      1   239.9    222.9    7.6
133.2    TAX                             87.8     78.0   12.5
229.8    NET PROFIT AFTER TAX           152.1    144.9    5.0
-        MINORITY SHAREHOLDERS`           2.4      -       -
         INTERESTS
         NET PROFIT ATTRIBUTABLE TO
229.8    ORDINARY SHAREHOLDERS          154.5    144.9    6.6
         NUMBER OF SHARES
753.2    ISSUED (MILLIONS)              760.8    706.9
         WEIGHTED AVERAGE
         NUMBER OF SHARES
706.4    (MILLIONS)                     755.7    703.2
         EARNINGS PER SHARE
32.5     (CENTS)                         20.4     20.6   (0.8)
         HEADLINE EARNINGS
33.3     PER SHARE (CENTS)          2    20.4     20.7   (1.3)
         DIVIDEND PER
13.2     SHARE (CENTS)                    6.5      5.7   14.0
BALANCE SHEET
30 JUNE                                                  28 FEBRUARY
1997                                                   1998        1997
RM                                           NOTE       RM          RM
         CAPITAL EMPLOYED
1 098.8  ORDINARY SHAREHOLDERS` INTEREST             1 026.8       805.4
-        MINORITY SHAREHOLDERS` INTEREST                54.0           -
1 098.8  TOTAL SHAREHOLDERS` INTEREST                1 080.8       805.4
13.1     LONG-TERM BORROWINGS                          386.5         5.7
4.1      SHORT-TERM BORROWINGS                          49.7         0.5
27.8     DEFERRED TAX                                   21.1        27.8
1 143.8                                              1 538.1       839.4
         EMPLOYMENT OF CAPITAL
791.6    PROPERTY, PLANT AND EQUIPMENT                 908.0       357.0
52.4     INVESTMENTS                           5           -           -
61.4     LOANS                                          61.7        51.3
-        OTHER NON CURRENT ASSETS                       18.5           -
1 283.0  CURRENT ASSETS                              1 806.6       910.2
272.5    INVENTORIES                                   577.2       319.4
914.4    ACCOUNTS RECEIVABLE                         1 013.2        92.5
79.4     CASH AND BANK BALANCES                        211.9        72.0
16.7     AMOUNTS OWING BY FELLOW SUBSIDIARIES            4.3       426.3
2 188.4  TOTAL ASSETS                                2 794.8     1 318.5
1 044.6  CURRENT LIABILITIES                         1 256.7       479.1
463.8    CREDITORS                                     573.1       389.1
139.4    TAX                                            60.0        89.5
25.6     OVERDRAFTS                                     50.7         0.4
10.6     DIVIDENDS                                       9.9           -
405.2    AMOUNTS OWING TO FELLOW SUBSIDIARIES          563.0         0.1
1 143.8                                              1 538.1       839.4
145.9    NET ASSET VALUE - PER SHARE (CENTS)           142.1       113.9
         BORROWINGS TO TOTAL SHAREHOLDERS`
28.7%    FUNDS (NET OF CASH)                            76.9%          -
CASH FLOW STATEMENT
YEAR ENDED                                              EIGHT MONTHS ENDED
30 JUNE                                                      28 FEBRUARY
1997                                                       1998       1997
RM                                                          RM         RM
CASH FLOW FROM OPERATING ACTIVITIES
397.9    CASH INFLOW FROM TRADING                          229.1       242.0
(710.4)  WORKING CAPITAL MOVEMENTS                        (163.8)        3.7
         CASH (UTILISED IN)/GENERATED BY OPERATING
(312.5)  ACTIVITIES                                         65.3       245.7
82.7     INTEREST RECEIVED                                 152.2        54.4
(1.5)    INTEREST PAID                                     (52.8)       (0.8)
(102.9)  TAX PAID                                         (173.8)      (97.7)
(334.2)  CASH (UTILISED IN)/GENERATED BY OPERATIONS         (9.1)      201.6
(15.4)   DIVIDENDS PAID                                    (10.8)       (8.1)
(349.6)  NET CASH (OUTFLOW)/INFLOW FROM OPERATIONS         (19.9)      193.5
         CASH FLOW FROM INVESTING ACTIVITIES
(573.7)  INVESTMENT IN OPERATIONS                         (108.9)     (111.1)
-        ACQUISITION OF SUBSIDIARY                        (294.9)          -
(52.4)   LOANS AND OTHER INVESTMENTS                           -           -
(626.1)  NET CASH OUTFLOW FROM INVESTING ACTIVITIES       (403.8)     (111.1)
         CASH FLOW FROM FINANCING ACTIVITIES
227.9    SHARES ISSUED                                       6.7         1.9
-        MINORITY INTERESTS                                  0.4           -
         LOANS AND ADVANCES FROM/(TO) GROUP
738.0    COMPANIES                                         170.1       (76.7)
         LOANS (ADVANCED TO)/REPAID BY DIRECTORS
(9.8)    AND EMPLOYEES                                      (0.2)        0.2
9.1      LONG-TERM LIABILITIES RAISED                      309.9         1.7
         NET CASH INFLOW/(OUTFLOW) FROM FINANCING
965.2    ACTIVITIES                                        486.9       (72.9)
         NET (DECREASE)/INCREASE IN CASH
(10.5)   AND CASH EQUIVALENTS                               63.2         9.5
         CASH AND CASH EQUIVALENTS AT BEGINNING
60.2     OF PERIOD                                          49.7        61.4
-        EFFECT OF EXCHANGE RATE CHANGES                    (1.4)        0.2
49.7     CASH AND CASH EQUIVALENTS AT END OF PERIOD        111.5        71.1
NOTES: 1. NET PROFIT BEFORE TAX IS STATED AFTER INTEREST PAID R52.8M (1997:
R0.8M), INTEREST RECEIVED R152M (1997: R54.2) AND DEPRECIATION OF R79.6M (1997:
R68.2M). 2. HEADLINE EARNINGS PER SHARE IS BASED ON NET PROFIT AFTER TAX
ADJUSTED BY NET PROFIT/(LOSS) ON SALE OF FIXED ASSETS OF R0.4M (1997: - R0.5M).
3. COMMITMENTS FOR THE NEXT FOUR MONTHS IN RESPECT OF CAPITAL EXPENDITURE
APPROVED BY DIRECTORS AMOUNT TO R143.1M (1997: R39.8M).
4. CONTINGENT LIABILITIES AS AT THE END OF THE PERIOD AMOUNT TO R3.1M (1997:
R3.1M). 5. THE GROUP HAS A CONTINGENT ASSET BEING SHARES WHICH WILL BE RECEIVED
BY COUNTRY ROAD LIMITED THROUGH A DEMUTUALISATION IN AUSTRALIA.
IT IS ANTICIPATED THAT THIS CONTINGENT ASSET WILL BE RECOGNISED IN THE
CONSOLIDATED FINANCIAL STATEMENTS AT 30 JUNE 1998 AS IT IS EXPECTED THAT A
RELIABLE MEASURE OF THE VALUE OF THE ASSET WILL BE AVAILABLE BY THAT DATE. THIS
RECOGNITION OF THIS ASSET WILL GIVE RISE TO A DECREASE IN THE AMOUNT OF THE
PREMIUM ON ACQUISITION AND INTANGIBLE ASSETS WRITTEN OFF AGAINST RESERVES IN
THE CONSOLIDATED FINANCIAL STATEMENTS TO 28 FEBRUARY 1998. COUNTRY ROAD LIMITED
HAS BEEN CONSOLIDATED WITH EFFECT FROM 1 FEBRUARY 1998.
6. THE SHARES IN COUNTRY ROAD HAVE BEEN MORTGAGED TO RMB AUSTRALIA LIMITED AND
MIDLAND BANK PLC AS SECURITY AGAINST LOANS ADVANCED FOR THE PURCHASE OF THE
COUNTRY ROAD SHARES. INTERIM 1998 PERIOD COMPARED TO INTERIM 1997 PERIOD THE
TERMS THE  INTERIM 1998 PERIOD  AND THE  INTERIM 1997 PERIOD  AS USED BELOW
REFER TO THE COMPANY`S EIGHT MONTH PERIODS ENDED 28 FEBRUARY 1998 AND 1997
RESPECTIVELY.
THE FINANCIAL STATEMENTS FOR THE INTERIM 1998 INCLUDES ONE MONTH`S TRADING OF
COUNTRY ROAD LIMITED WITH COUNTRY ROAD CONSOLIDATED WITH EFFECT FROM 1 FEBRUARY
1998.
TURNOVER. TURNOVER FOR THE INTERIM 1998 PERIOD INCREASED BY R434 MILLION, OR
APPROXIMATELY 16%, AS COMPARED TO THE INTERIM 1997 PERIOD. THIS INCREASE WAS
PRIMARILY ATTRIBUTABLE TO AN INCREASE IN TRADING FLOOR SPACE AND, TO A LESSER
EXTENT, THE INCLUSION OF COUNTRY ROAD`S TURNOVER FOR THE ONE MONTH ENDED 28
FEBRUARY 1998 IN THE CONSOLIDATED TURNOVER OF THE COMPANY.
INTEREST RECEIVED ON THE WOOLWORTHS-CREDIT CARD. INTEREST RECEIVED ON THE
WOOLWORTHS-CREDIT CARD WAS R146 MILLION DURING THE INTERIM 1998 PERIOD.
SINCE THE COMPANY ONLY ACQUIRED THE CREDIT CARD DEBTORS BOOK AS OF 30 JUNE
1997, THERE IS NO COMPARABLE FIGURE FOR THE INTERIM 1997 PERIOD.
NET PROFIT. NET PROFIT IN THE INTERIM 1998 PERIOD INCREASED BY R9,6 MILLION OR
APPROXIMATELY 6,6%, AS COMPARED TO THE INTERIM 1997 PERIOD. THIS INCREASE WAS
PRIMARILY ATTRIBUTABLE TO THE INCREASE IN OPERATING PROFITS OF R117.7 MILLION
WHICH WAS MAINLY DUE TO THE INCLUSION OF THE INTEREST RECEIVABLE RELATING TO
THE CREDIT CARD BUSINESS AND THE INCREASE IN TURNOVER, PARTIALLY OFFSET BY THE
INCREASE IN INTEREST PAID AND AN INCREASE IN THE EFFECTIVE TAX RATE.
INCREASE IN BORROWINGS. THE INCREASE IN BORROWINGS TO TOTAL SHAREHOLDERS` FUNDS
(NET OF CASH) FROM 28,7% AT THE END OF JUNE 1997 TO 76,9% AT THE END OF
FEBRUARY IS PRINCIPALLY DUE TO THE INCREASE IN BORROWINGS TO FUND THE
ACQUISITION OF COUNTRY ROAD LIMITED IN AUSTRALIA AND TO THE WRITE OFF TO
SHAREHOLDERS` INTEREST OF GOODWILL ARISING ON CONSOLIDATION AND THE INTANGIBLE
ASSETS IN COUNTRY ROAD LIMITED OF R221,6 MILLION.
COUNTRY ROAD ACQUISITION
AS AT THE END OF MARCH 1998 WOOLWORTHS OWNED 87,85% OF COUNTRY ROAD ("THE
ACQUISITION"), AN AUSTRALIAN APPAREL RETAILER LISTED ON THE AUSTRALIAN STOCK
EXCHANGE.
COUNTRY ROAD IS A DESIGNER, DEVELOPER, WHOLESALER AND RETAILER OF HIGH QUALITY
MENSWEAR, WOMENSWEAR, ACCESSORIES AND HOMEWARE PRODUCTS. THE COUNTRY ROAD BRAND
IS ONE OF AUSTRALIA`S LEADING APPAREL AND HOMEWARE BRANDS, AND THE BRAND`S
DISTINCTIVE STYLE AIMS TO BE REPRESENTATIVE OF THE RELAXED AUSTRALIAN
LIFESTYLE. COUNTRY ROAD HAS BEEN RECOGNISED WITH INDUSTRY AWARDS FOR ITS
EXCELLENCE IN DESIGN AND RETAILING.
GIVEN WOOLWORTHS` PROVEN TRACK RECORD IN OPERATIONAL CONTROL AND STRONG
RETAILING SKILLS, MANAGEMENT ARE CONFIDENT THAT THEY CAN FACILITATE THE
TRANSFORMATION OF COUNTRY ROAD INTO A SUCCESSFUL COMPANY DELIVERING CONSISTENT
GROWTH IN PROFITS OVER TIME.
THE FINANCIAL EFFECTS OF THE OFFER WILL BE PROVIDED TO SHAREHOLDERS WHEN THE
ISSUE PRICE OF THE OFFER AND THE RELATED NUMBER OF SHARES TO BE ISSUED IS
ESTABLISHED ON OR ABOUT 9 JUNE 1998.
AS PER THE REQUIREMENTS OF THE JOHANNESBURG STOCK EXCHANGE SHAREHOLDERS ARE
ADVISED TO EXERCISE CAUTION WHEN DEALING IN THEIR SHARES UNTIL A FURTHER
ANNOUNCEMENT IS MADE ON OR ABOUT 10 JUNE 1998.
AUDITORS` REVIEW
THE FINANCIAL INFORMATION FOR THE EIGHT MONTHS ENDED 28 FEBRUARY 1998 SET OUT
ABOVE HAS BEEN REVIEWED, BUT NOT AUDITED, BY THE COMPANY`S AUDITORS, ERNST &
YOUNG. THEIR REVIEW REPORT WAS UNQUALIFIED AND IS AVAILABLE FOR INSPECTION AT
THE COMPANY`S REGISTERED OFFICE.
ON BEHALF OF THE BOARD OF DIRECTORS.
C L LOWE
COMPANY SECRETARY
CAPE TOWN
22 MAY 1998 DIRECTORATE  EXECUTIVE CHAIRMAN S A MULLER. DIRECTORS B J FROST
(JOINT MANAGING DIRECTOR), F M RATNER (JOINT MANAGING DIRECTOR), C A GROLMAN, I
L STURROCK, S N SUSMAN, A J VAN VUUREN
NON-EXECUTIVE DIRECTORS  N L COLNE (BRITISH), F JAKOET, C A HALL, G SEABROOK
(AUSTRALIAN).
WOOLWORTHS HOLDINGS LIMITED  COMPANY REGISTRATION NUMBER 05/01986/06
REGISTERED OFFICE WOOLWORTHS HOUSE, 93 LONGMARKET STREET, CAPE TOWN 8001
TRANSFER SECRETARIES  MERCANTILE REGISTRARS LIMITED, 94 PRESIDENT STREET,
JOHANNESBURG 2001
PRODUCED BY: PATIENCE MOATSHE 22-05-1998 08:50 SENS

PUBLISHER : JSE SENS Feed
Source: JSE Securities Exchange - SENS
 
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