1999/08/19
AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 JUNE 1999 [JSE Securities Exchange - SENS]
 
19/08/1999 - 23:19:48

WOOLWORTHS HOLDINGS LIMITED
AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 JUNE 1999
INVESTING FOR THE FUTURE
* COUNTRY ROAD REDUCED LOSSES SUBSTANTIALLY
* STRONG CASH FLOW / GEARING DOWN
* NEGATIVE IMPACT ON EARNINGS CONTAINED BY TIGHT CONTROLS
INCOME STATEMENT
                                              YEAR ENDED
                                              30 JUNE
                                              1999      1998       %
                                        NOTE  RM        RM         CHANGE
REVENUE                                       6 193,3   5 300,8
TURNOVER                                      5 880,5   5 039,4    16,7
INTEREST AND OTHER REVENUE                    312,8     261,4      19,7
NET PROFIT BEFORE EXCEPTIONAL ITEM      1     380,7     402,5      -5,4
EXCEPTIONAL ITEM                        2     (8,6)     30,8
NET PROFIT BEFORE TAX                         372,1     433,3
TAX                                           119,9     148,5
NET PROFIT AFTER TAX                          252,2     284,8      -11,4
OUTSIDE SHAREHOLDERS' INTEREST                (0,9)     1,1
NET PROFIT ATTRIBUTABLE TO ORDINARY
SHAREHOLDERS                                  253,1     283,7
NUMBER OF SHARES ISSUED (MILLIONS)            866,4     839,6      3,2
WEIGHTED AVERAGE NUMBER OF SHARES (MILLIONS)  852,7     762,8      11,8
EARNINGS PER SHARE (CENTS)                    29,7      37,2
DILUTED EARNINGS PER SHARE (CENTS)    3       29,2      36,6
HEADLINE EARNINGS (R MILLION)         4       260,6     267,1      -2,4
HEADLINE EARNINGS PER SHARE (CENTS)           30,6      35,0       -12,6
NET CASH INFLOW FROM OPERATING ACTIVITIES
PER SHARE (CENTS)                             39,0      38,3       1,8
DIVIDEND PER SHARE (CENTS)                    14,0      14,0       -
INTERIM                                       6,5       6,5
FINAL PROPOSED                                7,5       7,5
DIVIDEND COVER (BASED ON HEADLINE EARNINGS
PER SHARE)                                    2,2       2,5
GROUP ANALYSIS
TURNOVER                                      5 880,5   5 039,4    16,7
WOOLWORTHS                                    4 846,9   4 702,3    3,1
COUNTRY ROAD                                  1 033,6   337,1      -
NET PROFIT BEFORE EXCEPTIONAL ITEM            380,7     402,5      -5,4
WOOLWORTHS                                    388,7     433,9      -10,4
INTERIM FUNDING COST FOR
INVESTMENT IN COUNTRY ROAD                    -         (7,8)      -
COUNTRY ROAD                                  (8,0)     (23,6)     66,1
BALANCE SHEET
                                                          30 JUNE
                                                          1999       1998
                                                          RM         RM
CAPITAL EMPLOYED
ORDINARY SHAREHOLDERS' INTEREST                           1 886,2    1 642,4
OUTSIDE SHAREHOLDERS' INTEREST                            29,8       27,8
TOTAL SHAREHOLDERS' INTEREST                              1 916,0    1 670,2
LONG-TERM LIABILITIES                                     25,1       25,8
DEFERRED TAX                                              12,3       26,4
                                                          1 953,4    1 722,4
EMPLOYMENT OF CAPITAL
PROPERTY, PLANT AND EQUIPMENT                             1 039,8    1 000,0
INVESTMENTS                                               0,1        0,1
LOANS                                                     89,8       73,5
CURRENT ASSETS                                            1 834,4    1 774,1
INVENTORIES                                               504,8      481,8
DEBTORS                                                   1 109,0    1 087,9
BANK BALANCES AND CASH                                    220,6      204,4
TOTAL ASSETS                                              2 964,1    2 847,7
CURRENT LIABILITIES                                       1 010,7    1 125,3
CREDITORS                                                 594,6      606,3
TAX                                                       94,1       114,8
OVERDRAFTS AND SHORT-TERM LIABILITIES                     302,5      392,8
DIVIDENDS                                                 19,5       11,4
                                                          1 953,4    1 722,4
NET ASSET BOOK VALUE - PER SHARE (CENTS)                  217,7      195,6
INTEREST BEARING DEBT (NET OF CASH): EQUITY RATIO         5,4%       12,6%
GROUP ANALYSIS
TOTAL ASSETS                                              2 964,1    2 847,7
WOOLWORTHS                                                2 612,8    2 491,3
COUNTRY ROAD                                              351,3      356,4
INVENTORIES                                               504,8      481,8
WOOLWORTHS                                                317,3      294,8
COUNTRY ROAD                                              187,5      187,0
APPROVED COMMITMENTS FOR CAPITAL EXPENDITURE              222,8      223,0
WOOLWORTHS                                                188,3      204,4
COUNTRY ROAD                                              34,5       18,6
CASH FLOW STATEMENT
                                                          YEAR ENDED
                                                          30 JUNE
                                                          1999       1998
                                                          RM         RM
CASH FLOW FROM OPERATING ACTIVITIES
CASH INFLOW FROM TRADING                                  379,5      433,5
WORKING CAPITAL MOVEMENTS                                 (39,7)     (92,7)
CASH GENERATED BY OPERATING ACTIVITIES                    339,8      340,8
INTEREST RECEIVED AND INVESTMENT INCOME                   276,2      231,7
INTEREST PAID                                             (85,4)     (83,3)
TAX PAID                                                  (155,7)    (176,8)
CASH GENERATED BY OPERATIONS                              374,9      312,4
DIVIDENDS PAID                                            (42,5)     (20,5)
NET CASH INFLOW FROM OPERATING ACTIVITIES                 332,4      291,9
CASH FLOW FROM INVESTING ACTIVITIES
INVESTMENT TO MAINTAIN OPERATIONS                         (96,3)     (73,5)
INVESTMENT TO EXPAND OPERATIONS                           (154,9)    (188,8)
PROCEEDS ON SALE OF PROPERTY, PLANT AND EQUIPMENT         41,7       13,8
INVESTMENT IN SUBSIDIARIES                                -          (304,9)
LOANS AND OTHER INVESTMENTS                               (13,1)     -
PURCHASE OF OUTSIDE SHAREHOLDERS' INTEREST                -          (18,2)
NET CASH OUTFLOW FROM INVESTING ACTIVITIES                (222,6)    (571,6)
CASH FLOW FROM FINANCING ACTIVITIES
SHARES ISSUED                                             15,7       460,7
LOANS AND ADVANCES TO RELATED PARTIES                     -          (388,5)
LOANS ADVANCED TO DIRECTORS AND EMPLOYEES                 (10,0)     (12,1)
LONG-TERM LIABILITIES REPAID                              (6,8)      (46,2)
NET CASH (OUTFLOW)/INFLOW FROM FINANCING ACTIVITIES       (1,1)      13,9
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS      108,7      (265,8)
NET CASH/(OVERDRAFTS) AT  BEGINNING OF THE YEAR           (188,4)    53,6
EFFECT OF EXCHANGE RATE CHANGES                           (2,2)      23,8
NET CASH/(OVERDRAFTS) AT END OF THE YEAR                  (81,9)     (188,4)
GROUP ANALYSIS
CASH FLOW FROM OPERATING ACTIVITIES                       332,4      291,9
WOOLWORTHS                                                309,9      240,9
COUNTRY ROAD                                              22,5       51,0
CAPITAL EXPENDITURE (GROSS)                               251,2      262,3
WOOLWORTHS                                                205,1      248,4
COUNTRY ROAD                                              46,1       13,9
NOTES 1. NET PROFIT BEFORE EXCEPTIONAL ITEM IS STATED AFTER INTEREST RECEIVED
OF R278,6 MILLION (1998: R231,3 MILLION), INTEREST PAID OF R85,4 MILLION (1998:
R83,3 MILLION) AND DEPRECIATION OF R184,7 MILLION (1998: R135,8 MILLION). FOR
1998 COUNTRY ROAD LIMITED RESULTS ARE INCLUDED FOR FIVE MONTHS FROM 1 FEBRUARY
1998. 2. THE EXCEPTIONAL ITEM (R8,6 MILLION) RELATES TO THE REPURCHASE OF
SHARES BY THE WOOLWORTHS HOLDINGS SHARE TRUST FROM EMPLOYEES PARTICIPATING IN
THE SHARE PURCHASE SCHEME AND THE WRITE-OFF OF A LOAN TO THE TRUST AS A RESULT
THEREOF. 3. THE DIFFERENCE BETWEEN EARNINGS PER SHARE AND DILUTED EARNINGS PER
SHARE RESULTS SOLELY FROM THE OUTSTANDING OPTIONS IN TERMS OF THE SHARE
PURCHASE SCHEME. DILUTED EARNINGS PER SHARE IS BASED ON A WEIGHTED AVERAGE
NUMBER OF SHARES OF 867 315 543 (1998: 774 518 321). 4. HEADLINE EARNINGS ARE
BASED ON NET PROFIT ATTRIBUTABLE TO ORDINARY SHAREHOLDERS ADJUSTED BY THE
EXCEPTIONAL ITEM OF R8,6 MILLION (1998: R17,3 MILLION PROFIT) AND NET PROFIT ON
SALE OF FIXED ASSETS OF R1,2 MILLION (1998: R0,7 MILLION LOSS). 5. SUBSEQUENT
TO 30 JUNE 1999,  A 13% INTEREST IN NETACTIVE LIMITED WAS ACQUIRED FOR R18,4
MILLION. 6. CONTINGENT LIABILITIES AT THE END OF THE PERIOD AMOUNT TO R1,1
MILLION (1998: R3,1 MILLION). 7. UNUTILISED BANKING FACILITIES AMOUNT TO R975
MILLION (1998: R751 MILLION) WITH NO LIMIT ON THE GROUP'S YEAR END INTEREST
BEARING DEBT. STATEMENT OF CHANGES IN ORDINARY SHAREHOLDERS' INTEREST AND
RECOGNISED PROFITS AND LOSSES YEAR ENDED
                                                          30 JUNE
                                                          1999       1998
                                                          RM         RM
ORDINARY SHAREHOLDERS' INTEREST AT BEGINNING OF THE YEAR  1 642,4    1 098,8
MOVEMENTS DURING THE YEAR:
ORDINARY SHARE CAPITAL
OFFSHORE PLACEMENT                                        -          0,1
SHARE PREMIUM                                             15,7       460,7
OFFSHORE PLACEMENT                                        -          442,7
SHARE PURCHASE SCHEME                                     15,7       18,0
RECOGNISED GAINS AND LOSSES                               228,1      82,8
DISTRIBUTABLE RESERVES                                    206,5      44,9
NET PROFIT ATTRIBUTABLE TO ORDINARY SHAREHOLDERS          253,1      283,7
DIVIDENDS                                                 (50,6)     (21,4)
NET PROFITS ON HEDGING INSTRUMENTS
TEMPORARILY CARRIED IN EQUITY                             4,0        -
PREMIUM ON ACQUISITION AND INTANGIBLE ASSETS WRITTEN OFF  -          (217,4)
NON-DISTRIBUTABLE RESERVES
EXCHANGE DIFFERENCES ON TRANSLATION OF FOREIGN ENTITIES   21,6       37,9
ORDINARY SHAREHOLDERS' INTEREST AT END OF THE YEAR        1 886,2    1 642,4
COMMENT
OVERVIEW
THE YEAR UNDER REVIEW WAS DOMINATED BY THE EXTRAORDINARY EVENTS THAT AFFECTED
AND INDEED CONTINUE TO AFFECT THE SOUTH AFRICAN ECONOMY. THE VERY RAPID RISE IN
INTEREST RATES HAD A SEVERE IMPACT ON THE SPENDING POWER AND CONFIDENCE OF
CUSTOMERS AND AS A RESULT THE GROUP'S SOUTH AFRICAN OPERATION, WOOLWORTHS,
SUFFERED ACCORDINGLY.
COUNTRY ROAD, THE GROUP'S AUSTRALIAN OPERATION, REDUCED LOSSES SUBSTANTIALLY
DURING THE YEAR.
PROFIT BEFORE TAX AND EXCEPTIONAL ITEM DROPPED BY 5,4%. HEADLINE EARNINGS PER
SHARE DROPPED BY 12,6%, MAINLY DUE TO THE EFFECT OF ADDITIONAL SHARES IN ISSUE.
WOOLWORTHS TRADING
WOOLWORTHS HAS IN THE PAST BEEN ABLE TO COPE WITH DIFFICULT ECONOMIC
CIRCUMSTANCES. TIGHT CONTROLS TOGETHER WITH A VERY STRONG CASH FLOW HAVE
PROVIDED A BUFFER TO A DOWNTURN IN SALES. IN THE PAST YEAR, HOWEVER, THE
SEVERITY OF THE DOWNTURN WAS THE WORST THAT HAS BEEN EXPERIENCED FOR MANY
YEARS.
THE GROUP HAS OVER THE PAST TWO YEARS EMBARKED ON A CAPITAL DEVELOPMENT
PROGRAMME THAT RESULTED IN A 19,5% INCREASE IN TRADING SPACE. THE SUBSTANTIAL
ADDITIONAL COSTS OF THESE STORES, TOGETHER WITH MATERIAL EXPENDITURE ON YEAR
2000 COMPLIANCE AND THE INVESTMENT IN SUPPLY CHAIN SYSTEMS DEVELOPMENT, MEANT
THAT PROFITS WERE SEVERELY IMPACTED. PROFIT BEFORE TAX AND EXCEPTIONAL ITEM IN
THE WOOLWORTHS OPERATING GROUP DECLINED BY 10,4% AND AIDED BY THE DROP IN TAX
RATES THAT OCCURRED DURING THE YEAR, PROFIT AFTER TAX EXCLUDING EXCEPTIONAL
ITEM DECLINED BY 5,8%.
THE GROUP GENERATED CASH FROM OPERATING ACTIVITIES OF R310M DURING THE YEAR AND
ENDED THE PERIOD WITH A BALANCE SHEET THAT IS PRACTICALLY UNGEARED.
THE TEXTILE DIVISION TRADED POORLY FOR MUCH OF THE YEAR. SALES WERE ONLY
SLIGHTLY AHEAD OF LAST YEAR AND PROFITS FROM THIS DIVISION SUFFERED. WERE IT
NOT FOR THE EXCEPTIONAL CONTROLS THAT ARE IN PLACE IN THIS DIVISION THE PROFIT
FALL WOULD HAVE BEEN MUCH GREATER.
FOODS GREW AT 6,6% IN THE FACE OF THE MOST INTENSE COMPETITION ENCOUNTERED BY
THIS DIVISION FOR SOME YEARS. TIGHT CONTROL OVER WASTE, SHRINKAGE AND OTHER
COSTS RESULTED IN THIS DIVISION IMPROVING PROFIT AND NET MARGIN TO SALES.
THE QUALITY OF THE DEBTORS BOOK REMAINS EXCELLENT DESPITE THE SUBSTANTIAL
FINANCIAL STRAIN THAT CUSTOMERS HAVE BEEN UNDER.  A SHORT-TERM LOAN PRODUCT WAS
TRIALED AND THIS, THE FIRST IN A SERIES OF FINANCIAL SERVICE PRODUCTS, WILL BE
LAUNCHED TO WOOLWORTHS CUSTOMERS.
COUNTRY ROAD
COUNTRY ROAD MADE SIGNIFICANT PROGRESS TOWARDS THE RESTORATION OF
PROFITABILITY. THE TRADING LOSS BEFORE TAX OF A$2,6M COMPARES FAVOURABLY TO THE
LOSS OF A$7,2M INCURRED IN THE FIVE MONTH POST ACQUISITION PERIOD ACCOUNTED FOR
LAST YEAR AND A$11M FOR A COMPARABLE TWELVE MONTH PERIOD. IT IS NOTABLE THAT
THE CURRENT YEAR'S LOSS TAKES INTO ACCOUNT A$0,6M FOR EXCEPTIONAL RENTAL
CHARGES, TRADE MARK AMORTISATION OF A$0,3M AND A$1,8M IN HIGHER MERCHANDISE
PURCHASE COSTS DUE TO ADVERSE MOVEMENTS IN THE US DOLLAR/AUSTRALIAN DOLLAR
EXCHANGE RATE.
COUNTRY ROAD WAS FAVOURED BY THE STRONG AUSTRALIAN ECONOMY THAT GREW BY 4%
DESPITE BEING INITIALLY AFFECTED BY THE TRAVAILS OF THE FAR EASTERN ECONOMIES.
INTEREST RATES STAYED LOW, PROTECTING CONSUMER CONFIDENCE. IN AUSTRALASIA,
COUNTRY ROAD RETAIL STORES INCREASED SALES BY 4,7% AND IN THE USA BY 5%.
WHOLESALE SALES WERE FLAT. STOCKS WERE WELL CONTROLLED AND YEAR END STOCKS WERE
12% DOWN ON LAST YEAR IN AUSTRALIAN DOLLAR.
NEW FLAGSHIP STORES WERE OPENED IN THE CITY CENTRE OF PERTH, THE CHADSTONE
CENTRE IN MELBOURNE AS WELL AS THE FLATIRON DISTRICT OF NEW YORK. THE COUNTRY
ROAD TEAM HAS DONE AN OUTSTANDING JOB IN A VERY SHORT SPACE OF TIME AND THE
GROUP HAS BEEN SUBSTANTIALLY RESTRUCTURED WITH KEY FUNCTIONS NOW PLACED ON A
MUCH IMPROVED FOOTING. THIS FOUNDATION SHOULD BEAR SIGNIFICANT BENEFITS IN THE
YEAR TO COME.
GROUP PROSPECTS
WOOLWORTHS HOLDINGS ENTERS THE NEW FINANCIAL YEAR IN AN EXTREMELY STRONG
FINANCIAL POSITION.  THE HEAVY DEVELOPMENT EXPENDITURE AND ASSET ACQUISITION
THAT HAS TAKEN PLACE OVER THE LAST FEW YEARS HAVE LEFT US LARGELY WITH A MODERN
STOCK OF STORES IN EXCELLENT LOCATIONS.  THE BALANCE SHEET HAS STRENGTHENED.
CASH FLOW FROM OPERATING ACTIVITIES OF R332M HAS BEEN GENERATED AND THE DEBT TO
EQUITY RATIO AT YEAR END IS ONLY 5,4%.  THIS ENVIABLE POSITION LED TO THE
FORMATION OF A NEW ENTERPRISE DIVISION THAT WILL EXPLORE OPPORTUNITIES OUTSIDE
THE CURRENT OPERATIONS OF THE GROUP.
IN BOTH THE CORE OPERATIONS OF WOOLWORTHS IN SOUTH AFRICA AND COUNTRY ROAD IN
AUSTRALIA, WE LOOK FORWARD TO A RECOVERY. PLANS ARE IN PLACE IN BOTH THESE
BUSINESSES THAT WILL HERALD A NEW PERIOD OF GROWTH FOR THE GROUP.
YEAR 2000
THE GROUP'S YEAR 2000 COMPLIANCE PROJECT IS PROGRESSING WELL AND WITHIN BUDGET.
WORK ON ALL MAJOR AND CRITICAL SYSTEMS AT WOOLWORTHS HAS BEEN COMPLETED AND
WORK ON THE SYSTEMS OF COUNTRY ROAD SHOULD BE COMPLETED BY SEPTEMBER.
CONTINUITY PLANS ARE BEING DEVELOPED TO MITIGATE THE EFFECTS OF POTENTIAL
DISRUPTIONS THAT MAY OCCUR AT THE DATE CHANGEOVER.
CAPITALISATION SHARE AWARD AND FINAL CASH DIVIDEND
THE DIRECTORS HAVE RESOLVED TO AWARD CAPITALISATION SHARES ("NEW ORDINARY
SHARES") TO ORDINARY SHAREHOLDERS REGISTERED AS SUCH ON FRIDAY, 3 SEPTEMBER
1999 ("THE LAST DAY TO REGISTER"), PROVIDED THAT SUCH SHAREHOLDERS MAY ELECT
INSTEAD TO RECEIVE A FINAL CASH DIVIDEND OF 7,5 CENTS PER SHARE DECLARED IN
RESPECT OF THE FINANCIAL YEAR ENDED 30 JUNE 1999.
THE AWARD OF NEW ORDINARY SHARES TO ORDINARY SHAREHOLDERS REGISTERED AT THE
CLOSE OF BUSINESS ON THE LAST DAY TO REGISTER WILL BE DETERMINED BY THE RATIO
THAT 7,5 CENTS MULTIPLIED BY 1,05 BEARS TO THE WEIGHTED AVERAGE TRADED PRICE OF
THE WOOLWORTHS ORDINARY SHARES ON THE JOHANNESBURG STOCK EXCHANGE FOR THE FOUR
BUSINESS DAYS ENDING AT THE CLOSE OF BUSINESS ON THURSDAY, 30 SEPTEMBER 1999.
DOCUMENTATION DEALING WITH THE CAPITALISATION SHARE AWARD AND THE CASH
ALTERNATIVE WILL BE POSTED TO ORDINARY SHAREHOLDERS ON OR ABOUT FRIDAY, 10
SEPTEMBER 1999. IN ORDER TO BE VALID, COMPLETED ELECTION FORMS WILL HAVE TO BE
RECEIVED BY MERCANTILE REGISTRARS,  WOOLWORTHS' TRANSFER SECRETARIES, BY NO
LATER THAN 12H00 ON FRIDAY, 1 OCTOBER 1999.  THE LAST DAY FOR THE RECEIPT OF
LATE POSTAL ACCEPTANCES WILL BE 12H00 ON WEDNESDAY, 6 OCTOBER 1999. THE NEW
ORDINARY SHARES WILL BE ISSUED AND THE CASH DIVIDEND PAID ON WEDNESDAY, 13
OCTOBER 1999.
ON BEHALF OF THE BOARD OF DIRECTORS.
SA MULLER
EXECUTIVE CHAIRMAN
CAPE TOWN
18 AUGUST 1999
DIRECTORATE EXECUTIVE CHAIRMAN
SA MULLER
DIRECTORS
BJ FROST (MANAGING DIRECTOR), FM RATNER (MANAGING DIRECTOR), IL STURROCK, SN
SUSMAN, AJ VAN VUUREN
NON-EXECUTIVE DIRECTORS
NL COLNE (BRITISH), CA GROLMAN, CA HALL, F JAKOET, G SEABROOK (AUSTRALIAN)
COMPANY SECRETARY
CL LOWE
WOOLWORTHS HOLDINGS LIMITED
COMPANY REGISTRATION NUMBER 05/01986/06
REGISTERED OFFICE
WOOLWORTHS HOUSE, 93 LONGMARKET STREET, CAPE TOWN 8001
TRANSFER SECRETARIES
MERCANTILE REGISTRARS LIMITED,
10TH FLOOR, 11 DIAGONAL STREET, JOHANNESBURG 2001
THIS INFORMATION IS ALSO AVAILABLE ON THE INTERNET: WWW.EDATA.CO.ZA/WOOLWORTHS
PRODUCED BY: ELIZE BLOM 19-08-1999 08:02 SENS

PUBLISHER : JSE SENS Feed
Source: JSE Securities Exchange - SENS
 
DISCLAIMER: http://www.mcgbfa.com/disclaimer.htm
 
Email
 
Print