2000/08/17
AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 JUNE 2000 [JSE Securities Exchange - SENS]
 
17/08/2000 - 20:04:00

WOOLWORTHS HOLDINGS LIMITED
REGISTRATION NUMBER 1929/001986/06
AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 JUNE 2000
*  IMPROVED PERFORMANCE IN THE SECOND HALF
*  COUNTRY ROAD RETURNS TO PROFITABILITY
*  HEADLINE EARNINGS PER SHARE (CENTS) 27,0 (1999: 30,6)
*  HEADLINE EARNINGS, EXCLUDING RESTRUCTURING COSTS,
   PER SHARE 30,6 (1999: 30,6)
*  PROFIT BEFORE EXCEPTIONAL ITEMS R393 M (1999: R381 M)
INCOME STATEMENT
                                         YEAR ENDED
                                           30 JUNE
                                        2000      1999      %
                                 NOTE   RM        RM        CHANGE
REVENUE                                 6 629,8   6 193,3   7,0
TURNOVER                                6 320,8   5 880,5   7,5
INTEREST                                267,0     278,6     -4,2
OTHER REVENUE                           42,0      34,2      22,8
EXPENSES                                6 236,5   5 812,6   7,3
COST OF MERCHANDISE                     4 128,1   3 834,0
DEPRECIATION                            195,8     184,7
OCCUPANCY COST                          382,0     342,3
EMPLOYMENT COST                         1 002,1   924,7
OTHER OPERATING COST                    480,8     441,5
INTEREST PAID                           47,7      85,4
NET PROFIT BEFORE EXCEPTIONAL ITEMS     393,3     380,7     3,3
EXCEPTIONAL ITEMS                   1   42,6      8,6
NET PROFIT BEFORE TAX                   350,7     372,1
TAX                                     114,2     119,9
NET PROFIT AFTER TAX                    236,5     252,2     -6,2
OUTSIDE SHAREHOLDERS' INTEREST          1,8       (0,9)
NET PROFIT ATTRIBUTABLE TO ORDINARY
SHAREHOLDERS                            234,7     253,1     -7,3
NUMBER OF SHARES ISSUED (MILLIONS)      890,6     866,4     2,8
WEIGHTED AVERAGE NUMBER OF
SHARES IN ISSUE (MILLIONS)              878,9     852,7     3,1
EARNINGS PER SHARE (CENTS)              26,7      29,7      -10,1
DILUTED EARNINGS PER SHARE (CENTS)  2   26,4      29,2      -9,6
HEADLINE EARNINGS PER SHARE (CENTS) 3   27,0      30,6      -11,8
HEADLINE EARNINGS, EXCLUDING
RESTRUCTURING COSTS, PER SHARE (CENTS)  30,6      30,6      -
DIVIDEND PER SHARE (CENTS)              14,0      14,0
DIVIDEND COVER (BASED ON HEADLINE
EARNINGS, EXCLUDING RESTRUCTURING
COSTS, PER SHARE)                       2,2       2,2
GROUP ANALYSIS
TURNOVER                                6 320,8   5 880,5   7,5
WOOLWORTHS                              5 237,6   4 846,9   8,1
- TEXTILES                              3 031,1   2 813,5   7,7
- FOODS                                 2 206,5   2 033,4   8,5
COUNTRY ROAD                            1 083,2   1 033,6   4,8
NET PROFIT BEFORE EXCEPTIONAL ITEMS     393,3     380,7     3,3
WOOLWORTHS                              378,7     388,7     -2,6
COUNTRY ROAD                            14,6      (8,0)     -
BALANCE SHEET YEAR ENDED
                                           30 JUNE
                                        2000      1999
                                 NOTE   RM        RM
ASSETS
LONG-TERM ASSETS                        1 458,4   1 398,9
PROPERTY, PLANT AND EQUIPMENT           1 028,3   1 039,8
INVESTMENTS                             20,9      0,1
LOANS TO CUSTOMERS                      67,2      13,1
PARTICIPATION LOANS TO
EXPORT PARTNERSHIPS                 4   252,7     269,2
OTHER LOANS                             89,3      76,7
CURRENT ASSETS                          2 036,7   1 834,4
INVENTORIES                             485,5     504,8
DEBTORS                                 1 242,2   1 105,0
LOANS TO CUSTOMERS                      74,4      4,0
BANK BALANCES AND CASH                  234,6     220,6
TOTAL ASSETS                            3 495,1   3 233,3
EQUITY AND LIABILITIES
CAPITAL AND RESERVES                    2 104,1   1 916,0
ORDINARY SHAREHOLDERS' INTEREST         2 071,3   1 886,2
OUTSIDE SHAREHOLDERS' INTEREST          32,8      29,8
LONG-TERM LIABILITIES                   298,8     303,0
INTEREST BEARING BORROWINGS             11,1      21,5
DEFERRED TAX                        4   287,7     281,5
CURRENT LIABILITIES                     1 092,2   1 014,3
CREDITORS                           4   684,5     664,2
TAX                                 4   42,9      28,1
INTEREST BEARING BORROWINGS             335,8     302,5
SHAREHOLDERS FOR DIVIDENDS              29,0      19,5
TOTAL EQUITY AND LIABILITIES            3 495,1   3 233,3
NET ASSET BOOK VALUE -
 PER SHARE (CENTS)                      232,6     217,7
INTEREST BEARING DEBT
(NET OF INTEREST EARNING CASH):
EQUITY RATIO                            8,1%      9,3%
GROUP ANALYSIS
TOTAL ASSETS                            3 495,1   3 233,3
WOOLWORTHS                              3 125,4   2 882,0
COUNTRY ROAD                            369,7     351,3
INVENTORIES                             485,5     504,8
WOOLWORTHS                              318,3     317,3
COUNTRY ROAD                            167,2     187,5
APPROVED COMMITMENTS FOR CAPITAL
EXPENDITURE                             233,9     222,8
WOOLWORTHS                              201,7     188,3
COUNTRY ROAD                            32,2      34,5
CASH FLOW STATEMENT
                                                   YEAR ENDED
                                                     30 JUNE
                                                  2000      1999
                                           NOTE   RM        RM
CASH FLOW FROM OPERATING ACTIVITIES
CASH INFLOW FROM TRADING                          350,4     376,9
WORKING CAPITAL MOVEMENTS                         (27,6)    (35,7)
CASH GENERATED BY OPERATING ACTIVITIES            322,8     341,2
INTEREST RECEIVED AND INVESTMENT INCOME           267,4     278,9
INTEREST PAID                                     (47,7)    (85,4)
TAX PAID                                      4   (95,0)    (55,9)
CASH GENERATED BY OPERATIONS                      447,5     478,8
DIVIDENDS PAID                                    (62,7)    (42,5)
NET CASH INFLOW FROM OPERATING ACTIVITIES         384,8     436,3
CASH FLOW FROM INVESTING ACTIVITIES
INVESTMENT TO MAINTAIN OPERATIONS                 (90,0)    (96,3)
INVESTMENT TO EXPAND OPERATIONS                   (115,0)   (154,9)
PROCEEDS ON DISPOSAL OF PROPERTY,
PLANT AND EQUIPMENT                               23,2      41,7
INVESTMENTS                                       (36,0)    -
LOANS TO CUSTOMERS                                (124,6)   (17,1)
PARTICIPATION LOANS TO EXPORT PARTNERSHIPS    4   (61,3)    (99,8)
LOANS ADVANCED TO DIRECTORS AND EMPLOYEES         (11,0)    (10,0)
NET CASH OUTFLOW FROM INVESTING ACTIVITIES        (414,7)   (336,4)
CASH FLOW FROM FINANCING ACTIVITIES
SHARES ISSUED                                     21,3      15,7
LONG-TERM LIABILITIES REPAID                      (11,7)    (6,8)
NET CASH INFLOW FROM FINANCING ACTIVITIES         9,6       8,9
(INCREASE)/DECREASE IN NET OVERDRAFT              (20,3)    108,8
NET OVERDRAFTS AT THE BEGINNING OF THE YEAR       (81,9)    (188,3)
EFFECT OF FOREIGN EXCHANGE RATE CHANGES           1,0       (2,4)
NET OVERDRAFTS AT THE END OF THE YEAR             (101,2)   (81,9)
GROUP ANALYSIS
CASH GENERATED BY OPERATIONS - BEFORE TAX         542,5     534,7
WOOLWORTHS                                        478,6     512,4
COUNTRY ROAD                                      63,9      22,3
CAPITAL EXPENDITURE (GROSS)                       205,0     251,2
WOOLWORTHS                                        161,8     205,1
COUNTRY ROAD                                      43,2      46,1
NOTES: THIS PRELIMINARY REPORT HAS BEEN EXTRACTED FROM FINANCIAL INFORMATION
WHICH COMPLIES WITH SOUTH AFRICAN GENERALLY ACCEPTED ACCOUNTING PRACTICE AND
HAS BEEN PREPARED USING POLICIES WHICH ARE CONSISTENT WITH THOSE EMPLOYED IN
THE PREVIOUS FINANCIAL YEAR, EXCEPT AS INDICATED:
1. THE EXCEPTIONAL ITEMS OF R42,6 M CONSISTS OF RESTRUCTURING COSTS OF R41,6 M,
WRITE-DOWN OF INVESTMENT OF R8,8 M, OFFSET BY PROFIT ON DISPOSAL OF NAMIBIAN
STORES OF R7,8 M (1999: R8,6 M LOSS ON REPURCHASE OF SHARES UNDER SHARE
PURCHASE SCHEME).
2. DILUTED EARNINGS PER SHARE IS BASED ON A WEIGHTED AVERAGE NUMBER OF SHARES
OF 890 707 383 (1999: 867 315 543). DILUTION RESULTS FROM OUTSTANDING OPTIONS
UNDER THE SHARE PURCHASE SCHEME.
3. HEADLINE EARNINGS ARE BASED ON NET PROFIT ATTRIBUTABLE TO ORDINARY
SHAREHOLDERS ADJUSTED BY THE IMPACT, AFTER TAX AND OUTSIDE SHAREHOLDERS'
INTEREST, OF A WRITE-DOWN OF INVESTMENT, PROFIT ON DISPOSAL OF NAMIBIAN STORES
AND NET LOSS ON DISPOSAL OF PLANT AND EQUIPMENT OF R3,1 M (1999: R1,2 M PROFIT)
4. THE ACCOUNTING POLICY WITH REGARD TO PARTICIPATION IN EXPORT PARTNERSHIPS
HAS BEEN CHANGED. THE LOAN INVESTMENT AND DEFERRED TAX LIABILITY ARE NOW
BROUGHT TO ACCOUNT. COMPARATIVE FIGURES HAVE BEEN RESTATED. THIS CHANGE DID NOT
HAVE ANY INCOME STATEMENT IMPACT.
STATEMENT OF CHANGES IN ORDINARY SHAREHOLDERS' INTEREST AND RECOGNISED GAINS
AND LOSSES
YEAR ENDED
                                                     30 JUNE
                                                  2000      1999
                                                  RM        RM
ORDINARY SHAREHOLDERS' INTEREST AT
THE BEGINNING OF THE YEAR                         1 886,2   1 642,3
MOVEMENTS FOR THE YEAR:
SHARE PREMIUM ARISING FROM SHARES ISSUED UNDER
SHARE PURCHASE SCHEME                             21,3      15,7
RECOGNISED GAINS AND LOSSES                       163,8     228,2
DISTRIBUTABLE RESERVES                            153,9     206,5
NET PROFIT ATTRIBUTABLE TO ORDINARY SHAREHOLDERS  234,7     253,1
DISTRIBUTIONS TO ORDINARY SHAREHOLDERS            (72,2)    (50,6)
NET UNREALISED (LOSS)/GAIN ON HEDGING INSTRUMENTS (2,5)     4,0
PREMIUM ON ACQUISITION OF SUBSIDIARIES AND
INTANGIBLE ASSETS WRITTEN OFF                     (6,1)     -
NON-DISTRIBUTABLE RESERVES
EXCHANGE DIFFERENCES ON TRANSLATION OF
FOREIGN ENTITIES                                  9,9       21,7
ORDINARY SHAREHOLDERS' INTEREST AT
THE END OF THE YEAR                               2 071,3   1 886,2
COMMENTARY
OVERVIEW
THE TOUGH ECONOMIC CLIMATE WHICH PREVAILED FOR MUCH OF THE FINANCIAL YEAR,
TOGETHER WITH ONCE-OFF RESTRUCTURING COSTS OF R42 MILLION IN THE SOUTH AFRICAN
OPERATION, HAVE RESULTED IN A DECLINE IN HEADLINE EARNINGS PER SHARE TO 27C
(30,6C). HEADLINE EARNINGS PER SHARE EXCLUDING RESTRUCTURING COSTS REMAIN AT
THE LEVEL OF LAST YEAR.
TURNOVER FOR THE YEAR INCREASED BY 7,5% TO R6 321 MILLION (R5 881 MILLION) AND
PROFIT BEFORE EXCEPTIONAL ITEMS GREW BY 3,3% TO R393 MILLION (R381 MILLION).
COUNTRY ROAD, THE GROUP'S AUSTRALIAN SUBSIDIARY, HAS RETURNED TO PROFITABILITY.
CASH FLOWS REMAIN STRONG AND AMOUNTED TO R448 MILLION, WITH R115 MILLION BEING
RE-INVESTED IN EXPANDING TRADING OPERATIONS AND R125 MILLION INVESTED THROUGH
THE FINANCIAL SERVICES DIVISION, TO FUND THE PROFITABLE BUSINESS OF MAKING
LOANS TO CUSTOMERS. THE GROUP'S DEBT TO EQUITY RATIO IMPROVED
FROM 9,3% TO 8,1%.
WOOLWORTHS
IN RECENT MONTHS PERFORMANCE IN BOTH TEXTILES AND FOODS IMPROVED, BUT FRAGILE
TRADING CONDITIONS STILL PERSIST. A 4% IMPROVEMENT IN TRADING PROFITS IN THE
SECOND HALF OF THE YEAR HAS PARTIALLY OFFSET THE 7,8% DECLINE IN THE FIRST SIX
MONTHS.
IN TEXTILES, WINTER 2000 RANGES WERE WELL RECEIVED. THIS WAS ACHIEVED AS WE
BEGAN TO IMPLEMENT OUR CUSTOMER FOCUSSED STRATEGIES INCLUDING BETTER PRICES,
IMPROVED AVAILABILITY AND CATALOGUING.
IN FOODS PROFIT MARGINS WERE MAINTAINED, BUT POOR AVAILABILITY PREVENTED US
ACHIEVING OUR POTENTIAL. NEVERTHELESS MARKET SHARE ROSE MARGINALLY. THE NEW
FOODS SUPPLY CHAIN SYSTEM HAS RECENTLY BEEN COMPLETED AND HAS RESULTED IN A
SIGNIFICANT IMPROVEMENT IN AVAILABILITY.
PLANS TO LEVERAGE THE SERVICE FUNCTIONS OF THE BUSINESS ARE WELL ADVANCED. THE
LOGISTICS AND FINANCIAL SERVICES DIVISIONS ARE CURRENTLY OPERATING AS SEPARATE
BUSINESSES AND PLAN TO ENTER INTO ALLIANCES AND/OR OUTSOURCING ARRANGEMENTS
WHERE SYNERGIES AND OPPORTUNITIES OF SCALE CAN BE ACHIEVED. THE CHIEF EXECUTIVE
OFFICER OF THE CHANNEL OPERATION, BRIAN FROST, WILL RELINQUISH HIS PORTFOLIO TO
TAKE UP A POSITION IN WOOLTRU LIMITED. HE WILL REMAIN A DIRECTOR OF WOOLWORTHS
HOLDINGS LIMITED AND WE WILL CONTINUE TO BENEFIT FROM HIS 18 YEARS EXPERIENCE
IN THE GROUP.
BAD DEBTS WERE WELL CONTROLLED AS A RESULT OF THE EFFECTIVE MANAGEMENT OF THE
DEBTORS AND LOAN BOOKS. DURING THE YEAR THE WOOLWORTHS UNIT TRUST WAS LAUNCHED
AND THERE ARE PLANS TO EXPAND THE PRODUCT RANGE OFFERED BY THE FINANCIAL
SERVICES DIVISION. PERSONAL LOANS TO CUSTOMERS INCREASED SUBSTANTIALLY FROM R17
MILLION IN 1999 TO R142 MILLION THIS YEAR.
AN EXCEPTIONAL R42 MILLION COST WAS EXPENSED IN RESTRUCTURING ALL LEVELS OF
MANAGEMENT OF THE BUSINESS. MANAGEMENT STRUCTURES HAVE BEEN FLATTENED AND
DECISIONS WILL NOW BE TAKEN AT THE APPROPRIATE WORK LEVEL. A RESTRUCTURING
PROGRAMME IS IN PROGRESS AT STORE LEVEL AND THE ANTICIPATED COSTS HAVE BEEN
FULLY ACCOUNTED FOR THIS YEAR.
COUNTRY ROAD
THE TURNAROUND STRATEGIES IMPLEMENTED HAVE RESULTED IN THE COMPANY DELIVERING A
PROFIT FOR THE FIRST TIME IN THREE YEARS. A PROFIT OF R14,6 MILLION COMPARED
WITH A LOSS OF R8 MILLION IN THE PREVIOUS YEAR.
SALES REMAINED STATIC OVER THE PREVIOUS YEAR AND THE ANTICIPATED LIFT FROM THE
INTRODUCTION OF GST IN AUSTRALIA DID NOT MATERIALISE UNTIL LATE IN JUNE. SALES
IN THE USA GREW BY SOME 3,5% ON LAST YEAR.
A CHANGE IN THE SOURCING POLICY HAS REDUCED RAW MATERIAL AND FINISHED GOODS
INVENTORIES DRAMATICALLY AND RESULTED IN ENHANCED QUALITY, FASTER RESPONSE AND
BETTER VALUE PRODUCTS FOR CUSTOMERS.
DESPITE THE TURNAROUND OVER THE PAST TWO YEARS, IT IS RECOGNISED THAT MUCH WORK
HAS TO BE DONE TO RETURN TO SATISFACTORY LEVELS OF PROFITABILITY.
DIRECTORATE
SUBSEQUENT TO THE CHANGES IN THE BOARD ANNOUNCED IN FEBRUARY, JOHANN VAN VUUREN
AND IAN STURROCK HAVE RESIGNED AS EXECUTIVE DIRECTORS AND FATIMA JAKOET AND
GRAEME SEABROOK HAVE RESIGNED AS NON-EXECUTIVE DIRECTORS.
PROSPECTS
WHILE THE OUTLOOK FOR TRADING CONDITIONS INEVITABLY REMAIN UNCERTAIN,
SHAREHOLDERS CAN EXPECT A REAL INCREASE IN PROFITS IN THE YEAR AHEAD AS THE
IMPACT OF THE COMPANY'S FOCUSED STRATEGIES BECOME MORE APPARENT AND SAVINGS ARE
REALISED FROM THE RESTRUCTURING PROGRAMME.
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, 1 SEPTEMBER
2000 ("THE LAST DAY TO REGISTER"), PROVIDED THAT SUCH SHAREHOLDERS MAY ELECT
INSTEAD TO RECEIVE A FINAL CASH DIVIDEND OF 7,5 CENTS PER SHARE (1999: 7,5
CENTS PER SHARE) DECLARED IN RESPECT OF THE FINANCIAL YEAR ENDED 30 JUNE 2000.
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 TRADING PRICE
OF THE WOOLWORTHS ORDINARY SHARES ON THE JOHANNESBURG STOCK EXCHANGE FOR THE
FOUR BUSINESS DAYS ENDING AT THE CLOSE OF BUSINESS ON THURSDAY, 28 SEPTEMBER
2000.
DOCUMENTATION DEALING WITH THE CAPITALISATION SHARE AWARD AND THE CASH
ALTERNATIVE WILL BE POSTED TO ORDINARY SHAREHOLDERS ON OR ABOUT FRIDAY, 8
SEPTEMBER 2000. 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, 29 SEPTEMBER 2000. THE LAST DAY FOR THE RECEIPT OF LATE
POSTAL ACCEPTANCES WILL BE 12H00 ON WEDNESDAY, 4 OCTOBER 2000. THE NEW ORDINARY
SHARES WILL BE ISSUED AND THE CASH DIVIDEND PAID ON WEDNESDAY, 11 OCTOBER 2000.
ON BEHALF OF THE BOARD OF DIRECTORS.
C A HALL                      S N SUSMAN                I N THOMSON
CHAIRMAN                      CEO - WOOLWORTHS          CEO - COUNTRY ROAD
CAPE TOWN
16 AUGUST 2000
DIRECTORATE CHAIRMAN C A HALL  EXECUTIVE DIRECTORS S N SUSMAN (CEO -
WOOLWORTHS), I N THOMSON (CEO - COUNTRY ROAD)
NON-EXECUTIVE DIRECTORS M BARNES (BRITISH), N L COLNE (BRITISH), B J FROST, C A
GROLMAN, J D NEWTON, R S J VAN RENSBURG  COMPANY SECRETARY C L LOWE
WOOLWORTHS HOLDINGS LIMITED COMPANY REGISTRATION NUMBER 1929/001986/06
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: MARY-JANE KOEN 17-08-2000 08:00 SENS

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