2012/08/23
WHL - WOOLWORTHS HOLDINGS LIMITED - Abridge audited group results [JSE Securities Exchange - SENS]
 
Abridge audited group results for the year ended 24 June 2012 and cash dividend declaration

WOOLWORTHS HOLDINGS LIMITED
Share Code: WHL  
ISIN: ZAE000063863
Registration Number: 1929/001986/06

ABRIDGED AUDITED GROUP RESULTS FOR THE YEAR ENDED 24 JUNE 2012 AND CASH DIVIDEND DECLARATION

TURNOVER
+11.8%

HEADLINE EARNINGS PER SHARE
+24.4%

DIVIDEND PER SHARE
+38.0%

GROUP RESULTS
The group had a good year with turnover up 11.8%
compared to the prior year and profit before tax
and headline earnings per share up 24.5% and
24.4% respectively.

The group's return on equity increased from 44.1% to 47.1%.

A final dividend of 123 cents per share has been
declared taking the total distribution to 198 cents:
an increase of 38% on the prior year, ensuring that
the full STC saving is distributed toshareholders.

WOOLWORTHS
Woolworths sales grew by 11.6% and by 7.0%
in comparable stores.

Clothing and General Merchandise sales grew
by 11.6% and by 5.8% in comparable stores.
South African clothing and footwear sales grew
at 12.6% and by 5.9% in comparable stores and
General Merchandise sales increased by 7.0%
and by 4.7% in comparable stores.

Clothing and footwear trading performance
improved during the year and the second half saw us
grow by 1.2% above the market.

Clothing and General Merchandise's gross
margin increased 0.8% to 44.5% due to franchise
conversions, which together with good cost
control saw segmental profit before tax up 25%
and return on sales (after excluding unrealised net
foreign exchange gains) increased by 1.1% to 16.7%.

Food experienced strong growth for theyear
with sales up 1 1.9% (7.8% comparable) growing
1.3% ahead of the market. Increased margin
together with good cost control resulted in
segmental profit before tax growth of 35.5%
and return on sales increasing 1.0% to 5.8%.

During the year the group acquired a further
34 South African franchise stores at a cost of 
R405 million. In total, 59 local stores
have now been acquired at a cost of R580 million
and the remaining 16 will be acquired over the
next 7 years as the franchise agreements expire.
In the rest of Africa we pursued our aim of converting 
from a franchise model and entered into a range of 
wholly-owned or joint venture arrangements across 8 countries.

Total corporate retail space grew by 3.6%, excluding
franchise conversions.

COUNTRY ROAD
Australian sales contracted 2.6% on the previous
year in Australian dollar terms with comparable
down 6.6%, reflecting the very challenging trading
conditions in that country. Good inventory and
cost control ensured that operating margin and
profit were maintained broadly in line with the
previous year.

On 1st August Country Road announced that it
had entered into an agreement to acquire the
Australian Witchery Group from Gresham Private
Equity for A$172 million. The acquisition will create
one of Australia's largest speciality fashion retailers
with complementary brands and a strong position
in the mid to upper tier specialist retail sector,
which will provide greater scale, a diversified
revenue stream and industry leading margins.
Australia's apparel market is currently at a cyclical
low, providing the opportunity for Country Road
to consolidate its position ahead of the expected
economic recovery.

The transaction will be funded through a
combination of acquisition debt of A$34 million
raised from Australian banks and a A$92 million
rights issue undertaken by Country Road.
As majority shareholder in Country Road
we have undertaken to exercise our rights.

WOOLWORTHS FINANCIAL SERVICES
The joint venture with ABSA performed well with
the debtors' book increasing 8.3% from the prior
year. The quality of the book remains strong with
impairments increasing 0.5% to 1 .9% of gross
receivables, well below the target range of 3.0%  3.5%.
The increase in the impairment charge resulted in
operating profits remaining broadly in line with the
prior year with a return on equity of 23.1%, ahead
of our 22% target.

SHARE PURCHASES
Shares to the value of R286m were repurchased during the year 
and shares to the value of R358m were purchased to settle various 
employee share schemes that became payable during the year.

OUTLOOK
Trading for the first 8 weeks has been encouraging.
We expect the upper end of the market to remain
resilient whilst the economy as a whole remains
subdued. The Australian economy hasshown signs
of recovery and we have seen an improvement in
trading in recent months.

Changes to the Board of Directors
After serving nine years as chairman, Buddy Hawton
retired from the board at the company's annual
general meeting on 17 November 2011. On the same
date, Simon Susman was appointed as chairman,
Tom Boardman was appointed as the lead
independent director and Zarina Bassa was
appointed a non-executive director.

The board wishes to thank Buddy for his wisdom
and guidance during his years as chairman and wish
him a happy and fruitful retirement with his family.

Sindi Zilwa will retire as a non-executive director on
15 November 2012 after having completed eleven
years of service on the Woolworths board. Sindi has
been a passionate, competent and committed director and the
board expresses its gratitude to her and wishes her
well in her future endeavours.

Andrew Higginson was appointed as a non-
executive director on 1 June 2012.

Change of Group Secretary
Cherrie Lowe resigned as group secretary on
31 January 2012. Thobeka Sishuba-Mashego was
appointed as group secretary effective
1 February 2012.

S N Susman        I Moir
Chairman         Group chief executive officer

Cape Town, 22 August 2012

Cash Dividend Declaration
Notice is hereby given that the directors have
declared a final gross cash dividend of 123.0 cents
(104.55 cents net of dividend withholding tax) per
ordinary share for the fifty two weeks ended
24 June 2012. The dividend has been declared from
income reserves. The company has no secondary
tax on companies credits available. The dividend
withholding tax rate is 15%.

The issued share capital at the declaration date
is 835 378 333 ordinary shares and 89 400 000
preference shares.

The salient dates for the dividend will be as follows:
Last day to trade to receive
a dividend              Friday, 7 September 2012
Shares commence trading
"ex" dividend             Monday, 10 September 2012
Record date             Friday, 14 September 2012
Payment date             Monday, 17 September 2012

Share certificates may not be dematerialised or
rematerialised between Monday 10 September 2012
and Friday 14 September 2012 both days inclusive.

In accordance with the company's Memorandum
of Incorporation, dividends amounting to less than
R5.00 due to any one holder of the company's
ordinary shares held in certificated form will not be
paid, unless otherwise requested in writing, but will
be aggregated with other such amounts and be
donated to a charity nominated by the directors.

A final gross cash dividend of 85.0 cents (72.25 cents
net of dividend withholding tax) per preference share
for the fifty two weeks ended 24 June 2012 will be paid
to the beneficiaries of Woolworths Employee Share
Ownership Scheme on Monday 17 September 2012.

T Sishuba-Mashego
Group secretary 

Cape Town, 22 August 2012

Directorate and Statutory Information

Non-executive Directors:
Simon Susman (Chairman), Peter Bacon (British),
Zarina Bassa, Lindiwe Bakoro, Tom Boardman,
Andrew Higginson (British), Mike Leeming, Chris Nissen,
Sir Stuart Rose (British), Thina Siwendu, Sindi Zilwa

Executive Directors:
Ian Moir (Group chief executive officer) (Australian),
Zyda Rylands, Norman Thomson

Group Secretary: Thobeka Sishuba-Mashego

Share Code: WHL  ISIN: ZAE000063863

Registered Address:
PO Box 680, Cape Town 8000
Woolworths House, 93 Longmarket Street
Cape Town 8001

Registration Number: 1929/001986/06

Tax number: 9300/149/71/4

JSE Sponsor: Rand Merchant Bank (A division of
FirstRand Bank Limited)

Transfer Secretaries:
Computershare Investor Services (Proprietary) Limited
70 Marshall Street, Johannesburg 2001

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                                           52 weeks    52 weeks
                                                                          to 24 Jun   to 26 Jun
                                                                               2012   2011           %
                                                                    Notes        Rm          Rm      change
Revenue                                                                      28 813      25 841        11.5
Turnover                                                                     28 604      25 582        11.8
Cost of sales                     18 419      16 683        10.4
Gross profit                                                                 10 185       8 899        14.5
Other revenue                                                                   127         127           
Expenses                                                                      7 625       6 904        10.4
Store costs                                                     5 165       4 448        16.1
Other operating costs                                                         2 460       2 456         0.2

Operating profit                                                              2 687       2 122        26.6
Investment income                                                                82         132 (37.9)
Finance costs                                                                    38          84      (54.8)
Profit before earnings from joint ventures and associate                      2 731       2 170        25.9
Earnings from joint ventures                                                    133         129         3.1
Earnings from associate              6           7      (14.3)
Profit before tax                                                             2 870       2 306        24.5
Tax                                                                             811         659        23.1
Profit after tax                                                              2 059       1 647        25.0
Other comprehensive income:
Net fair value adjustments on financial instruments, after tax                   21        (17)      >(100)
Exchange differences on translation of foreign subsidiaries                     117          37        >100
Other comprehensive income for the year                                         138          20        >100
Total comprehensive income for the year                                       2 197      1 667        31.8
Profit attributable to:                                                       2 059       1 647        25.0
Shareholders of the parent                                                    2 048       1 631        25.6
Non-controlling interest                                                         11          16      (31.3)
Total comprehensive income attributable to:                          2 197       1 667        31.8
Shareholders of the parent                                                    2 167       1 651        31.3
Non-controlling interest                                                         30          16        87.5

Reconciliation of headline earnings
Earnings attributable to shareholders of the parent                           2 048       1 631        25.6
BEE preference dividend                                                          38          19       100.0
Basic earnings                                                                2 010       1 612        24.7
(Profit)/loss on disposal of investment property, property, plant
and equipment                                                                  (15)           4<(100)
Impairment of property, plant and equipment                                       1          24      (95.8)
Tax impact of adjustments                                                                  (8)     (100.0)
Headline earnings                                                             1 996       1 632        22.3

Headline earnings per share (cents)         267.3       214.9        24.4
Earnings per share (cents)                                              2     269.2       212.2        26.9
Diluted headline earnings per share (cents)                                   260.6       209.8        24.2
Diluted earnings per share (cents)                                      2     262.4       207.2        26.6
Number of shares in issue (millions)                                         745.7       755.2       (1.3)
Weighted average number of shares in issue (millions)                         746.6       759.5       (1.7)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                                                         Total         Total
                                                              Share-       Non-       52 weeks      52 weeks
                                                          holders of controlling     to 24 Jun     to 26 Jun
                                                          the parent    interest          2012          2011
                                                    Notes         Rm          Rm            Rm            Rm
Interest at the beginning
of the year                                                    4 008          85         4 093         3 453
Movements for the year:
Issue of shares                                         5                                              33
Shares repurchased                                      5      (655)                    (655)         (339)
Share repurchase costs       (1)                      (1)           (1)
Dividends to shareholders                                    (1 299)        (14)       (1 313)         (923)
Share-based payments                                             245                      245           186
Business acquisitions                                                         6             6            17
Total comprehensive income for the year                        2 167          30         2 197         1 667
Interest at the end of the year                                4 465         107         4 572         4 093
Distribution per ordinary share (cents)                                                  198.0         143.5
Distribution cover (based on headline earnings per share)                                  1.4       1.5
Distribution per preference share (cents)                                                121.0          61.4

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                             At         At
                                                         24 Jun     26 Jun
                                                           2012       2011
                                        Notes       Rm         Rm
ASSETS
Non-current assets                                        5 011      4 115
Property, plant and equipment                        3    2 225      2 046
Investment properties                                       106        121
Intangible assets                                    3    1 219        693
Investment in associate                                  51         46
Investment in joint ventures                                616        578
Prepaid employment costs                                     13         23
Participation in export partnerships                         49         59
Other loans                                                  89         84
Deferred tax        643        465
Current assets                                            5 034      4 950
Inventories                                               2 216      1 892
Trade and other receivables                                 631        733
Derivative financial instruments                             41         10
Tax                                                           1         22
Cash                                                      2 145      2 293
Total assets                                             10 045      9 065
EQUITY AND LIABILITIES
Capital and reserves                                      4 572      4 093
Interest of shareholders of the parent                    4 465      4 008
Non-controlling interest                                    107         85
Non-current liabilities                                   1 177      1 460
Interest-bearing borrowings                                  25        514
Operating lease accrual                                     457        455
Post-retirement medical benefit liability                   335        315
Deferred tax                                                360        176
Current liabilities                             4 296      3 512
Trade and other payables                                  3 172      3 148
Provisions                                                  230        269
Derivative financial instruments                             16         78
Tax                                                        368           1
Interest-bearing borrowings      510         16
Total equity and liabilities                             10 045      9 065
Net asset book value  per share (cents)                    599        531
GROUP ANALYSIS
Total assets                                             10 045      9 065
Woolworths Retail                                         6 948      5 719
Country Road                                              1 156      986
Treasury                                                  1 326      1 783
Woolworths Financial Services                               615        577
Inventories                                               2 216      1 892
Woolworths Retail                                         1 835      1 547
Country Road                                                381        345
Approved commitment for capital expenditure               1 216        934
Woolworths Retail                                         1 043        809
Country Road                                                173        125
Approved commitment for franchise acquisitions                        384

CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                       52 weeks     52 weeks
                                                                      to 24 Jun    to 26 Jun
                                                                           2012         2011
                                                             Notes           Rm           Rm
Cash flow from operating activities
Cash inflow from trading    3 259        2 848
Working capital movements                                                 (131)          377
Cash generated by operating activities                                    3 128        3 225
Interest income                                                              73          123
Finance costs                                                              (38)         (95)
Tax paid                                                                  (356)        (985)
Cash generated by operations                                              2 807        2 268
Dividends received from associate                                             1            1
Dividends received from joint venture                                        95          125
Dividends to ordinary shareholders                                      (1 275)        (904)
Dividends to preference shareholders                                       (38)         (19)
Net cash inflow from operating activities                                 1 590        1 471
Cash flow from investing activities
Net investment in PPE and intangible assets                               (615)        (585)
Acquisition of franchiseoperations                             4         (494)        (207)
Other                                                                         8           21
Net cash outflow from investing activities                              (1 101)        (771)
Cash flow from financing activities
Shares issued                                                                            33
Shares repurchased                                                        (655)        (339)
Share repurchase costs                                                      (1)          (1)
Finance lease payments                                                     (25)         (18)
Short-term borrowings repaid                                                        (1 020)
Acquisitions  non-controlling interest contribution                          6           17
Net cash outflow from financing activities                                (675)      (1 328)
Decrease in cash and cash equivalents                                     (186)        (628)
Net cash and cash equivalents at the beginning of the year                2 293        2 917
Effect of foreign exchange rate changes 38            4
Net cash and cash equivalents at the end of the year                      2 145        2 293
GROUP ANALYSIS
Cash inflow from trading                                                  3 259        2 848
Woolworths Retail                                                         2 975        2 586
Country Road                                                                284262
Gross capital expenditure                                                   798          624
Woolworths Retail                                                           697          517
Country Road                                                                101          107

SEGMENTAL ANALYSIS
                                       52 weeks     52 weeks
  to 24 Jun    to 26 Jun
                                           2012         2011            %
                                             Rm           Rm       change
Revenue
Turnover                                 28 604       25 582         11.8
Woolworths Retail                        25 231       22 609         11.6
Clothing and General Merchandise          9 585        8 591         11.6
Food                                     15 140       13 535         11.9
Logistics                                   506          483          4.8
Country Road                              3 373        2 973         13.5
Other revenue and investment income         209          259       (19.3)
Woolworths Retail                           105          103          1.9
Clothing and General Merchandise             21           25       (16.0)
Food                                         84           78          7.7
Country Road                                 29           27          7.4
Treasury                                     75          129       (41.9)
Total Group                              28 813       25 841         11.5
Gross profit
Woolworths Retail                         8174        7 134         14.6
Clothing and General Merchandise          4 264        3 751         13.7
Food                                      3 817        3 298         15.7
Intra-group                                  93           85          9.4
Country Road                              2 011        1 765         13.9
Total Group                              10 185        8 899         14.5
Profit before tax
Woolworths Retail                         2 524        1 965         28.4
Clothing and General Merchandise          1 647        1 318         25.0
Food                                        877          647         35.5
Country Road                                172          162          6.2
Woolworths Financial Services               133          129          3.1
Treasury                                 41           50       (18.0)
Total Group                               2 870        2 306         24.5

NOTES

1  Basis of preparation
   The abridged group financial statements comply with IAS 34 Interim Financial Reporting. These abridged
   group financial statements do not contain all the information and disclosures required in the annual
   financial statements.

   Accounting policies used in the abridged group financial statements are the same as those used
   to prepare the group annual financial statements, and consistent with the prior year, which have been prepared in compliance with
   International Financial Reporting Standards (IFRS) and the South African Companies Act (No. 71 of 2008,
   as amended). These summary financial statements have been prepared under the supervision of the
   group finance director, Norman Thomson CA(SA).

2  Earnings per share
   The difference between earnings per share and diluted earnings per share is due to the impact of
   unexercised options under the group's share incentive schemes.

3  Property, plant and equipment and intangible assets
   During the financial year, the group acquired property, plant and equipment at a cost of R652 million
   (2011: R527 million) and acquired intangible assets (including goodwill and reacquired rights) at a cost
   of R657 million (2011: R377 million).

4  Acquisition of franchise operations
   The group continues to wind down its South African franchise operations, acquiring 34 (2011: 22)
   stores in the current year, as well as 10 (2011: 1) stores in Africa for a cash consideration of R451 million
   (2011: R250 million).
                                                                                                2012              2011
                                                                                                  Rm                Rm
   Fair value of assets acquired at the date of acquisition
   Property, plant and equipment                                                                18                 8
   Reacquired rights                                                                             276               138
   Deferred tax liability                                                                       (78)              (39)
   Goodwill arising on acquisition                    235               143
   Consideration                                                                                 451               250
   Accrual  prior year                                                                           43              (43)
   Cash outflow                                                                                  494               207

  The goodwill of R235 million represents growth and synergies expected to accrue from the acquisitions.
    
   From the dates of acquisition, these acquisitions have contributed an additional revenue of R314 million
   and profit before tax of R66 million to the group.

   The directors consider that, on a pro-forma basis, had the acquisitions been effective from the beginning
   of the year, group revenue for the year would have been R79 million higher, and profit before tax
   R28 million higher.

5  Issue and repurchase of shares
   223 938 (2011: 1 122 568) shares totalling R11 million (2011: R28 million) were repurchased from the market by
   Woolworths (Proprietary) Limited and held as treasury shares by the group. 9 298 259 (2011: 7 056 052)
   shares totalling R286 million (2011: R193 million) were repurchased from the market and cancelled.

   10 418 262 (2011: 3 998 422) shares totalling R358 million (2011: R118 million) were purchased from the market
   in the current year and allocated to employees in terms of the group's executive incentive schemes.

   In the prior year, 3 945 838 ordinary shares totalling R33 million were issued in terms of the group's
   executive incentive schemes.

6  Contingent liabilities
   Group companies are party to legal disputes and investigations that have arisen in the ordinary course
   of business. Whilst the outcome of these matters cannot readily be foreseen, the directors do not expect
   them to have any material financial effect. Refer also to note 9.

7  Borrowing facilities 
   Unutilised banking facilities amount to R2 710 million (2011: R2 049 million). There is no limit in the
   Memorandum of Incorporation on the group's authority to raise interest-bearing debt.

8  Related party transactions
   The group entered into related party transactions during the year, the substance of which are similar
   to those explained in the group's annual financial statements.

9  Events subsequent to the reporting date
On 1 August 2012, the group's 88% held Australian subsidiary Country Road Limited announced its intention
   to acquire 100% of the voting shares of unlisted Australian company Witchery Australia (Pty) Limited
   ("Witchery Group") at an enterprise value of R1 445 million (A$172 million). The acquisition is on a cash-free,
   debt-free basis with a normalised level of working capital.

   Based on the unaudited net asset values of the Witchery Group as at 31 December 2011, goodwill of
   approximately R765 million (A$91 million) is expected to result on acquisition, representing the value of
   the business in excess of the fair value of its net assets, subject to finalisation at completion.

10 Approval of annual financial statements
   The annual financial statements were approved by the Board of directors on 22 August 2012.

11 Audit opinion
   These abridged consolidated group financial statements have been extracted from the audited annual
   financial statements upon which Ernst & Young Inc. and NEXIA SAB&T have issued an unqualified report.
   The group annual financial statements is available for inspection at the company's registered office.

visit our investor relations site: www.woolworthsholdings.co.za



Date: 23/08/2012 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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