2018/02/22
WHLE - WOOLWORTHS HOLDINGS LIMITED - Unaudited interim group results for the 26 weeks ended 24 December 2017 and cash dividend declaration [JSE Securities Exchange - SENS]
 
Unaudited interim group results for the 26 weeks ended 24 December 2017 and cash dividend declaration

Woolworths Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1929/001986/06
Share code: WHL
Bond code: WHLI
Share ISIN: ZAE000063863
Bond ISIN: ZAG000147133
('the Group' or 'the Company')
 
UNAUDITED INTERIM GROUP RESULTS FOR THE 26 WEEKS ENDED 24 DECEMBER 2017 AND CASH DIVIDEND DECLARATION 
 
HIGHLIGHTS
Turnover and concession sales:                       +2.5% to R38.8 billion
Adjusted diluted headline earnings per share:            -8.8% to 223.4 cps
Headline earnings per share:                            -15.0% to 206.3 cps
Earnings per share:                                   -246.6% to -505.9 cps
Interim dividend per share:                             -18.4% to 108.5 cps
Return on equity*:                                         20.1% from 22.8%

* Impairment added back

COMMENTARY

Group sales for the first 26 weeks of the 2018 financial year increased by 2.5% to R38.8 billion over
the prior period.

Woolworths South Africa's overall performance was slightly ahead of last year, due to a strong
result from Food and Financial Services.

Woolworths Fashion, Beauty and Home

Woolworths Fashion, Beauty and Home was impacted by the underperformance of womenswear,
whilst other categories performed in line with a difficult market. Overall sales decreased by 0.2%, with
price movement of 0.7% and comparable store sales were 3.4% lower. Gross profit margin was
impacted by higher womenswear markdowns, declining by 1.1% to 46.6%.

Store costs were well controlled, increasing by 6.6% in total (and by 2.3% in comparable stores) and
other operating costs decreased by 4.3%. Adjusted operating profit declined by 13.1% to R1 038
million. Net retail space grew by 3.6%.

Woolworths Food

Woolworths Food sales increased by a market-leading 9.4%, with comparable store sales up 5.3%.
Price movement of 4.4% supported positive volume growth. Gross profit margin was maintained at
25.0%.

Store costs increased by 9.0%, as a result of new space, with comparable store cost growth of 4.1%.
Other operating costs were 1.3% higher than last year. Adjusted operating profit increased by 15.9%
to R1 065 million. Net retail space grew by 6.8%.

Woolworths Financial Services

The Woolworths Financial Services debtors book reflected positive year-on-year growth of 4.1%, with
strong growth in the credit card portfolio. The annualised impairment rate for the six months ended 31
December 2017 reduced to 5.0% from 5.9% in the prior period.

David Jones

Sales for the 26 weeks were 3.3% lower on a comparable basis and 3.8% lower in total. Particularly
difficult trading conditions were experienced in the first quarter, compounded by significant
transformation to systems and structures through this period. Sales improved through the second
quarter and particularly over the last six weeks of the period. Gross profit margin increased by 1.2% to
40.7%.

Net trading space reduced by 2.2%, in line with our strategy of improving space utilisation. The cost
annualisation of new stores, as well as costs relating to the new merchandise system and other
transformational initiatives, resulted in an increase in operating costs of 9.7%.

The very challenging first quarter, and the increase in the cost base ahead of expected benefits,
resulted in adjusted operating profit declining by 37.7% to A$66 million.

The re-assessment of the carrying value of the David Jones assets has resulted in the recognition of
an impairment charge of A$712.5 million (R6 927 million), reflecting the cyclical downturn and
structural changes that have impacted performance across the Australian retail sector, as well as poor
or delayed execution in certain of our key initiatives.

Country Road Group

Country Road Group sales increased by 5.2%, including Politix, with sales in comparable stores 1.0%
lower, in line with the market. Gross profit margin improved by 3.1% to 63.7%, as a result of higher
full-priced merchandise sales and lower generic discounting, as well as from sourcing benefits.
Trading space reduced by a net 3.8%, with the closure of end of lease under-performing stores.

Operating costs increased by 9.5%, mainly as a result of Politix, with comparable store costs well
controlled, increasing by 2.7%. Adjusted operating profit increased by 15.7% to A$59 million.

Group earnings

Headline earnings per share (HEPS) and adjusted diluted HEPS, which exclude the impairment, as
well as last year's A$172.6 million profit on disposal of the David Jones Market Street property,
decreased by 15.0% and 8.8% respectively. Earnings per share, which includes both the impairment
charge and last year's property disposal, decreased by 246.6%.

OUTLOOK

In South Africa, trading conditions are expected to remain challenging in the second half, but should
then improve, as the impact of the new political leadership resonates through the economy and
consumer sentiment. We are confident that our Food business will continue to grow ahead of the
market, and that recent changes made to design and buying structures in Fashion, Beauty and Home
are expected to improve the womenswear offering.

In Australia, growth and consumer sentiment is also expected to improve slowly on the back of
improving economic indicators, including a strengthening labour market, although high levels of
promotional activity will continue. We will underpin this with a cost and efficiency review, as we further
consolidate our Australian operations. The Board remains committed to the ongoing transformation of
David Jones, and will continue to invest in the future of the business.

Any reference to future financial performance included in this statement has not been reviewed and
reported on by the Group's external auditors, and does not constitute an earnings forecast.

S N Susman                            I Moir
Chairman                              Group Chief Executive Officer
Cape Town, 21 February 2018

DIVIDEND DECLARATION

Notice is hereby given that the Board of Directors has declared an interim gross cash dividend per
ordinary share ('dividend') of 108.5 cents (86.8 cents net of dividend withholding tax) for the 26 weeks
ended 24 December 2017, a 18.4% decrease on the prior period's 133.0 cents per share. The
dividend has been declared from reserves and therefore does not constitute a distribution of
'contributed tax capital' as defined in the Income Tax Act, 58 of 1962. A dividend withholding tax of
20% will be applicable to all shareholders who are not exempt.

The issued share capital at the declaration date is 1 048 048 817 ordinary shares.

The salient dates for the dividend will be as follows:
Last day of trade to receive a dividend                  Tuesday, 13 March 2018
Shares commence trading 'ex' dividend                    Wednesday, 14 March 2018
Record date                                              Friday, 16 March 2018
Payment date                                             Monday, 19 March 2018

Share certificates may not be dematerialised or rematerialised between Wednesday, 14 March 2018
and Friday, 16 March 2018, both days inclusive. Ordinary shareholders who hold dematerialised
shares will have their accounts at their CSDP or broker credited or updated on Monday, 19 March
2018. Where applicable, dividends in respect of certificated shares will be transferred electronically to
shareholders' bank accounts on the payment date. In the absence of specific mandates, dividend
cheques will be posted to shareholders.

Chantel Reddiar
Group Company Secretary
Cape Town, 21 February 2018

INTERIM GROUP STATEMENT OF COMPREHENSIVE INCOME

 52 weeks                                                                               26 weeks      26 weeks
to 25 Jun                                                               to 24 Dec     to 25 Dec
     2017                                                                                   2017          2016           %
       Rm                                                                   Notes             Rm            Rm      change
   69 451   Revenue                       36 270        35 262         2.9
   74 273   Turnover and concession sales                                                 38 768        37 819         2.5
  (6 862)   Concession sales                                                             (3 471)       (3 586)       (3.2)
   67 411   Turnover                                                                      35 297      34 233         3.1
   40 739   Cost of sales                                                                 20 914        20 329         2.9
   26 672   Gross profit                                                                  14 383        13 904         3.4
    1 944   Other revenue                                                                    931           988       (5.8)
   22 410   Expenses                                                                      12 181        11 182         8.9
   16 233   Store costs                                                                    8 688         8 167         6.4
    6 177   Other operating costs                                                          3 493         3 015        15.9
    6 206   Operating profit                                                      3 133         3 710      (15.6)
    1 420   Profit on sale of property in Sydney, net of impairment                            -         1 420     (100.0)
    1 762   Profit on sale of property                                                         -         1 762     (100.0)
      342   Impairment due to sale of property                           -           342     (100.0)
        -   Impairment due to re-assessment of David Jones assets               3          6 927             -
       96   Investment income                                                                 42            41         2.4
    1 256   Finance costs                                                                    588           660     (10.9)
    6 466   (Loss)/profit before earnings from joint ventures and associate              (4 340)         4 511      amp;gt;(100)
      260   Earnings from joint ventures                                                     149           134        11.2
    6 726   (Loss)/profit before tax                                                     (4 191)         4 645      amp;gt;(100)
    1 278   Tax                                                                              669         1 328      (49.6)
    5 448   (Loss)/profit for the period                                                 (4 860)         3 317      amp;gt;(100)
            Other comprehensive income:
            Amounts that may be reclassified to profit or loss
    (123)   Fair value adjustments on financial instruments, after tax                     (121)         (140)
  (3 087)   Exchange differences on translation of foreign subsidiaries                    (102)       (2 363)
            Amounts that may not be reclassified to profit or loss
       15   Post-retirement medical benefit liability-actuarial gain, after tax                -            -
  (3 195)   Other comprehensive income for the period                             (223)       (2 503)
    2 253   Total comprehensive (loss)/income for the period                             (5 083)           814
    5 448   (Loss)/profit attributable to:                                               (4 860)         3 317
    5 446   Shareholders of the parent                                                   (4 861)         3 315
        2   Non-controlling interests                                                          1             2
    2 253   Total comprehensive (loss)/income attributable to:                           (5 083)           814
    2 251   Shareholders of the parent                                                   (5 084)           813
        2   Non-controlling interests          1             1
            Reconciliation of headline earnings
    5 446   Basic (loss)/earnings attributable to shareholders of the parent             (4 861)         3 315      amp;gt;(100)
            Net loss/(profit) on disposal of property, plant and equipment and
  (1 752)   intangible assets                                                                 20       (1 758)
      382   Impairment of property, plant and equipment and intangible assets              6 927           350
     (31)   Tax impact of adjustments                                                      (104)           423
    4 045   Headline earnings                                                              1 982         2 330      (14.9)
     (11)   Unrealised foreign exchange losses/(gains)                             19           (6)
      226   Relocation, onerous leases, transaction and swap close-out costs                 227            52
     (60)   Tax impact of adjustments                                                       (69)          (11)
    (164)   Tax base adjustments on David Jones assets at acquisition                          -             -
    4 036   Adjusted headline earnings                                                     2 159         2 365       (8.7)
    566.7   (Loss)/earnings per share (cents)                                   2        (505.9)         345.1      amp;gt;(100)
    420.9   Headline earnings per share (cents)                                            206.3         242.6      (15.0)
    420.0   Adjusted headline earnings per share (cents)                                   224.7         246.2       (8.7)
    563.7   Diluted (loss)/earnings per share (cents)                           2        (503.1)         343.3      amp;gt;(100)
    418.7   Diluted headline earnings per share (cents)                                    205.1         241.3      (15.0)
    417.7   Adjusted diluted headline earnings per share (cents)              223.4         244.9       (8.8)
    961.7   Number of shares in issue (millions)                                           960.6         961.1       (0.1)
    961.0   Weighted average number of shares in issue (millions)                          960.9         960.5         0.0

INTERIM GROUP STATEMENT OF FINANCIAL POSITION

    At                                              At    Restated**
25 Jun                                                                                                24 Dec     At 25 Dec
  2017                                                                                                  2017          2016
    Rm                                                                                       Notes        Rm            Rm
         ASSETS
34 706   Non-current assets                                                                           27 901        35 208
13 846   Property, plant and equipment                                                           3    13 556        13 814
     -   Investment properties                                                                             -            78
19 595   Intangible assets                                                                       3    13 046        19 895
 1 015   Investment in joint ventures                                                                  1 064         1 025
     -   Participation in export partnerships                                                              -             6
    65   Fair value lease adjustment                                                                      62            71
    42   Other loans                                                                                      50            38
     3   Derivative financial instruments                                                        6         -            21
   140   Deferred tax                                                            123           260
10 287   Current assets                                                                               12 147        13 313
 6 990   Inventories                                                                                   8 146         7 999
 1 218   Trade and other receivables                           1 553         1 552
    40   Derivative financial instruments                                                        6        35           100
   252   Tax                                                                                             241           937
 1 787   Cash and cash equivalents                                                                     2 172         2 725
44 993   TOTAL ASSETS                                                                                 40 048        48 521
         EQUITY AND LIABILITIES
19 066   TOTAL EQUITY                                                                                 12 186        18 959
19 038   Equity attributable to shareholders of the parent                                            12 172        18 931
    28   Non-controlling interests                                                                        14            28
15 336   Non-current liabilities                                                                      15 298        15 087
12 137   Interest-bearing borrowings                                                                  12 323        11 578
 1 980   Operating lease accrual and fair value lease adjustment                                       1 731         2 052
   386   Post-retirement medical benefit liability                                                       394           398
   156   Provisions                                                                                      275           190
    19   Derivative financial instruments                                                    6         8             -
   658   Deferred tax                                                                                    567           869
10 591   Current liabilities                                                                          12 564        14 475
 8 262   Trade and other payables                           9 457         9 473
   825   Provisions                                                                                    1 002           801
   114   Operating lease accrual and fair value lease adjustment                                         114            64
   176   Derivative financial instruments                                                        6       306           148
    26   Tax                                                                                             175         1 387
 1 188   Overdrafts and interest-bearing borrowings                                                    1 510         2 602
25 927   TOTAL LIABILITIES                                                                            27 862        29 562
44 993   TOTAL EQUITY AND LIABILITIES                                                                 40 048        48 521
 1 980   Net asset book value -per share (cents)                                                       1 267         1 970
         GROUP ANALYSIS
44 993   Total assets                                                                                 40 048        48 521
12 680   Woolworths*                                                                                13 682        14 265
24 217   David Jones                                                                                  18 617        25 556
 7 044   Country Road Group                                                                            6 647         7 660
 1 007   Woolworths Financial Services                                                  1 056         1 018
    45   Treasury                                                                                         46            22
 6 990   Inventories                                                                                   8 146         7 999
 3 550   Woolworths*                   3 802         3 728
 2 191   David Jones                                                                                   3 166         2 831
 1 249   Country Road Group                                                                            1 178         1 440
25 927   Total liabilities                                                                            27 862        29 562
 5 893   Woolworths*                                                                                   7 313         7 023
 6 703   David Jones                                                                                   5 964         6 573
 1 586   Country Road Group                                                                            1 297         1 786
11 745   Treasury                                                                               13 288        14 180
 4 697   Approved capital commitments                                                                  3 176         2 023
 2 035   Woolworths*                                                                                   1 285         1 008
 2 157   David Jones                                                 1 511           728
   505   Country Road Group                                                                              380           287

*  Includes Woolworths Fashion, Beauty and Home, Woolworths Food and Woolworths Logistics.
** Certain comparative amounts shown do not correspond to the 2016 interim results and reflect adjustments made. Refer to note 5.1.

INTERIM GROUP STATEMENT OF CASH FLOWS

 52 weeks                                                                                            26 weeks     26 weeks
to 25 Jun                                                                                           to 24 Dec    to 25 Dec
     2017       2017         2016
       Rm                                                                                  Notes           Rm           Rm
            Cash flow from operating activities
    8 177   Cash inflow from trading                                                                    4 301        4 803
    (615)   Working capital movements                        (17)        (926)
    7 562   Cash generated by operating activities                                                      4 284        3 877
       96   Investment income received                                                                     42           41
  (1 216)   Finance costs paid                                                                          (596)     (655)
  (1 701)   Tax paid                                                                                    (548)      (1 073)
    4 741   Cash generated by operations                                                                3 182        2 190
      223   Dividends received from joint ventures                                                        100           87
  (3 015)   Dividends paid to ordinary shareholders                                                   (1 735)      (1 733)
    1 949   Net cash inflow from operating activities                                                   1 547          544
            Cash flow from investing activities
  (2 552)   Net investment in property, plant and equipment and intangible assets                     (1 558)      (1 228)
    3 677   Proceeds on disposal of property in Sydney                                                      -        3 677
    (711)   Acquisition of subsidiary, net of cash acquired                                                 -        (703)
        8   Other                                                                                         (6)            4
      422   Net cash (outflow)/inflow from investing activities                                       (1 564)        1 750
            Cash flow from financing activities
     (39)   Settlement of share-based payments through share purchase                          4        (107)         (37)
      (2)   Share purchase costs                                                                          (1)            -
     (14)   Finance lease payments                                                                        (8)          (5)
    1 900   Borrowings raised*                                                                          2 042          900
  (3 852)   Borrowings repaid*                                                                        (2 000)      (1 951)
  (2 007)   Net cash outflow from financing activities                                                   (74)      (1 093)
      364   (Decrease)/increase in cash and cash equivalents                                             (91)        1 201
    1 497   Net cash and cash equivalents at the beginning of the period                                1 761        1 497
    (100)   Effect of foreign exchange rate changes                           (5)           27
    1 761   Net cash and cash equivalents at the end of the period                                      1 665        2 725
            GROUP ANALYSIS
    7 562   Cash generated by operating activities                                                      4 284        3 877
    5 050   Woolworths                     2 932        2 542
    1 075   David Jones                                                                                   480          857
    1 437   Country Road Group                                                                            872          478
            Additions to property, plant and equipment and intangible
    3 344   assets                                                            1 317        1 900
    1 244   Woolworths                                                                                    619          654
      996   David Jones                                                                                   587          345
      336   Country Road Group                               111          206
      768   Country Road Group - Politix acquisition                                                        -          695

* Comparative information has been restated to reflect the reclassification of R3 364 million between Borrowings raised and Borrowings repaid,
  as a result of the revolving credit facility now being disclosed on a net basis.

INTERIM GROUP STATEMENT OF CHANGES IN EQUITY

    Total                                                                   Total                                    Total
 52 weeks                                      Share-          Non-      26 weeks       Share-           Non-     26 weeks
to 25 Jun                                  holders of   controlling     to 24 Dec   holders of    controlling    to 25 Dec
     2017                                  the parent     interests          2017   the parent      interests         2016
       Rm                          Notes           Rm            Rm            Rm           Rm             Rm           Rm
            Shareholders'
            interest at the
            beginning of the
   19 853   period                             19 038        28        19 066       19 826             27       19 853
            Movements for
            the period:
    5 448   (Loss)/profit for the period      (4 861)             1       (4 860)        3 315              2        3 317
            Other comprehensive
  (3 195)   income                              (223)             -         (223)      (2 502)            (1)      (2 503)
      Total comprehensive (loss)/
    2 253   income for the period             (5 084)             1       (5 083)          813              1          814
            Shares issued,
      138   net of costs               4           12             -            12          104              -          104
            Share-based
            payments, including
    (163)   settlements and costs            (74)             -          (74)         (79)              -         (79)
        -   Transfer of reserves                   15          (15)             -            -              -            -
            Dividends to ordinary
  (3 015)   shareholders                      (1 735)             -       (1 735)      (1 733)              -      (1 733)
            Shareholders'
    interest at the
   19 066   end of the period                  12 172            14        12 186       18 931             28       18 959
    313.0   Dividend per ordinary share (cents)                             108.5                                    133.0
     1.34   Dividend cover (based on headline earnings)                      1.90                                     1.80

INTERIM SEGMENTAL ANALYSIS

 52 weeks                                                                                  26 weeks     26 weeks
to 25 Jun                                                                                 to 24 Dec    to 25 Dec
     2017                                                                                      2017         2016         %
       Rm                                                  Notes         Rm           Rm    change
            REVENUE
   67 411   Turnover                                                                         35 297       34 233       3.1
   13 894   Woolworths Fashion, Beauty and Home                                               7 223        7 238     (0.2)
   27 075   Woolworths Food                                                 14 488       13 256       9.3
      597   Woolworths Logistics                                                                332          291      14.1
   15 030   David Jones                                                                       7 597        8 018     (5.3)
   10 815   Country Road Group                   5 657        5 430       4.2
    2 040   Other revenue and investment income                                                 973        1 029     (5.4)
       19   Woolworths Fashion, Beauty and Home                                                   7            6      16.7
      124   Woolworths Food                                                                      68    58      17.2
    2 139   David Jones                                                                       1 116        1 110       0.5
       52   Country Road Group                                                                   19           19       0.0
       69   Treasury                                                                             29           24      20.8
    (363)   Intragroup                                                                 9      (266)        (188)      41.5
   69 451   Total Group                                                                      36 270       35 262       2.9
            GROSS PROFIT
    6 650   Woolworths Fashion, Beauty and Home                                               3 367        3 454     (2.5)
    6 794   Woolworths Food                                                                   3 616        3 313       9.1
    6 506   David Jones                                                                       3 684        3 749     (1.7)
    6 520   Country Road Group                                                                3 599        3 287       9.5
      202   Intragroup                                    9        117          101      15.8
   26 672   Total Group                                                                      14 383       13 904       3.4
            PROFIT/(LOSS) BEFORE TAX
    2 168   Woolworths Fashion, Beauty and Home                                               1 038        1 195    (13.1)
    1 977   Woolworths Food                                                 1 065          919      15.9
      259   Woolworths Financial Services                                                       149          134      11.2
    1 279   David Jones                                                                         663        1 078    (38.5)
      958   Country Road Group                    602          517      16.4
  (1 096)   Treasury                                                                          (535)        (572)     (6.5)
    5 545   Total Group-adjusted                                                              2 982        3 271     (8.8)
    1 181   Adjustments                                                                     (7 173)        1 374
        -   Impairment due to re-assessment of David Jones assets                      3    (6 927)            -
    (250)   Relocation, onerous leases, transaction and swap close-out costs                  (227)         (52)
       11   Unrealised foreign exchange (losses)/gains                                         (19)            6
    1 762   Profit on sale of property in Sydney                                           -        1 762
    (342)   Impairment due to sale of property                                                    -        (342)
    6 726   Total Group                                                                     (4 191)        4 645    amp;gt;(100)
    2 177   Woolworths Fashion, Beauty and Home                                               1 021    1 200    (14.9)
    1 979   Woolworths Food                                                                   1 063          920      15.5
      259   Woolworths Financial Services                                                       149          134      11.2
    2 502   David Jones                                                                     (6 491)        2 493    amp;gt;(100)
      939   Country Road Group                                                                  602          498      20.9
  (1 130)   Treasury                                                                          (535)        (600)    (10.8)

NOTES

1.   STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION

     The interim Group financial statements have been prepared in accordance with International Financial Reporting
     Standards (IFRS) and interpretations adopted by the International Accounting Standards Board (IASB), IAS 34: Interim
     Financial Reporting, the South African Institute of Chartered Accountants (SAICA) Financial Reporting Guides as issued
     by the Accounting Practices Committee, Financial Pronouncements as issued by the Financial Reporting Standards Council
     (FRSC), the requirements of the Companies Act of South Africa and the JSE Limited Listings Requirements.

     The interim Group financial statements have been prepared under the supervision of the Group Finance Director,
     Reeza Isaacs CA(SA) and are the full responsibility of the directors.

     Accounting policies applied in the preparation of these interim Group financial statements are consistent with those
     applied in the preparation of the Group Annual Financial Statements for the 52-week period ended 25 June 2017, and
     are consistent with the prior period, except for the changes in accounting policy disclosed in note 5. The interim Group
     financial statements have been prepared on the historical cost and going concern bases, except where otherwise
     indicated. The presentation and functional currency is the South African rand, rounded to the nearest million, except
     where otherwise indicated.

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 (refer to note 4).

3.   PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

     The Group acquired property, plant and equipment at a fair value of R759 million (2016: R976 million) and acquired
     intangible assets at a fair value of R558 million (2016: R924 million).

     As a result of the cyclical downturn and structural changes that have impacted performance across the Australian
     retail sector, and the impact of poor or delayed execution in certain key initiatives within David Jones, the carrying
     value of property, plant and equipment and intangible assets within David Jones was reassessed during the period.
     Consequently, an impairment charge of R6 927 million (A$712.5 million) relating to goodwill and other assets was
     recognised.

4.   ISSUE AND PURCHASE OF SHARES

     519 502 (2016: 103 152) previously purchased ordinary shares totalling R34 million (2016: R7 million) were allocated to employees
     in terms of the Group's Restricted Share Plan. 201 023 (2016: 1 328 464) ordinary shares totalling R12 million (2016: R104 million)
     were issued and allocated to employees in terms of the Group's other share incentive schemes.

     1 776 791 (2016: 432 469) ordinary shares totalling R107 million (2016: R37 million) were purchased from the market by
     Woolworths Proprietary Limited for the purposes of share incentive schemes and are held as treasury shares by the Group.

5.   CHANGE IN ACCOUNTING POLICY

     5.1 IFRS Interpretations Committee (IFRIC) restatement

     The following IFRIC restatement was applied to the audited annual financial statements for the year ending 25 June 2017.
     Historically, the Group has assessed deferred tax on indefinite life intangible assets using the assumption that the value
     will be recovered through sale, rather than use, as these assets are not amortised.

     In November 2016, the IFRS Interpretations Committee (IFRIC) issued a final agenda decision, clarifying that an intangible
     asset with an indefinite useful life is subject to consumption and therefore not a non-depreciable asset in terms of
     paragraph 51B of IAS 12: Income Taxes. IFRIC therefore concluded that the assumption of sale could not be presumed in
     calculating the deferred tax liability on an intangible asset.

     As a consequence of this decision, the Group has amended its accounting policy to comply with the revised guidance.
     The impact of the restatement is to increase goodwill by R2 004 million (A$199 million) as at 25 December 2016, with a
     corresponding credit to deferred tax, split as follows:

                                                                                                   Dec 2016
                                                                                                   Deferred       Deferred
                                                                              tax            tax
                                                                                       Goodwill      assets    liabilities
                                                                                             Rm          Rm             Rm
     David Jones                                 1 764         993            771
     Country Road Group                                                                     240         149             91
     Total                                                                                2 004       1 142            862
     
     5.2 New standards

     The adoption of certain new standards, which became effective in the current period, has resulted in minor changes to
     accounting policies and disclosure, none of which have a material impact on the financial position or performance of
     the Group.

     The Group has undertaken initial assessments of the financial impact of IFRS 9: Financial Instruments, IFRS 15: Revenue from
     Contracts with Customers and IFRS 16: Leases and have identified the following, which will impact on the Group's financial
     results in the periods these standards are adopted:

     IFRS 9: The standard is effective for financial periods beginning on or after 1 January 2018. The measurement of provisions
     against receivables will be revised to comply with the expected credit loss method. The Group continues to assess the
     potential impact on its financial statements in respect of the application of IFRS 9.

     IFRS 15: The standard is effective for financial periods beginning on or after 1 January 2018. There will be a change in the
     classification of statement of comprehensive income disclosure; however it is anticipated that any reclassification will not
     have a material impact on operating profit. The Group continues to assess the potential impact on its financial statements
     in respect of the application of IFRS 15.

     IFRS 16: The standard is effective for financial periods beginning on or after 1 January 2019. The standard is expected to
     have a material impact due to the significant number of leases, and will result in changes to the statement of financial
     position, whereby a right-of-use asset and lease liability will be recognised. Changes to the statement of comprehensive
     income will result in the current operating lease costs being replaced by an amortisation of the right-of-use asset
     and associated finance costs. The Group continues to assess the impact on its financial statements in respect of the
     application of IFRS 16.

6.   FAIR VALUE OF FINANCIAL INSTRUMENTS

     The carrying value of trade and other receivables, trade and other payables and borrowings approximate their fair values.

     In terms of IFRS 13: Fair value measurement, the Group's borrowings are measured at amortised cost and its derivative
     financial instruments at fair value. These are determined to be level two under the fair value hierarchy. Derivatives are
     valued using valuation techniques with market observable inputs with derivatives being mainly in respect of interest
     rate swaps and foreign exchange forward contracts. The most frequently applied valuation technique include
     forward pricing and swap models, using present value calculations. The models incorporate various inputs, including
     the credit quality of counterparties, foreign exchange spot and forward rates, interest rate curves and forward rate
     curves of the underlying index.

7.   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.

8.   BORROWING FACILITIES

     Unutilised banking and debt facilities amount to R11 033 million (2016: R13 089 million) as follows:
     
                                                                                                         2017         2016
                                                                                                           Rm           Rm
     Committed                                                                         10 233       12 289
     Uncommitted                                                                                          800          800
     Total                                                                                             11 033       13 089

     R1 750 million bonds were issued under the DMTN programme, which is a further source of funding to the Group. The
     DMTN programme that was approved by the JSE on 17 March 2017 is guaranteed by Woolworths Proprietary Limited
     and will be used to raise debt on an ongoing basis.

9.   RELATED-PARTY TRANSACTIONS

     The Group entered into related-party transactions, the substance of which is disclosed in the Group's 2017 Annual
     Financial Statements. Intragroup adjustments relate to the sale of concession goods between segments and supply
     chain distribution adjustments.

10.  EVENTS SUBSEQUENT TO THE REPORTING DATE

     No event material to the understanding of these interim Group financial statements has occurred between the end
     of the financial period and the date of approval.

11.  APPROVAL OF INTERIM GROUP FINANCIAL STATEMENTS

     The interim Group financial statements were approved by the Board of Directors on 21 February 2018.

12.  AUDIT OPINION

     These interim Group financial statements have not been reviewed or audited.

AVAILABILITY

The interim results presentation, which will be presented to stakeholders today at 07h30, will be made available on the Company's
website www.woolworthsholdings.co.za following this announcement.

DIRECTORATE AND STATUTORY INFORMATION

NON-EXECUTIVE DIRECTORS                                          REGISTERED ADDRESS
Simon Susman (Chairman), Patrick Allaway (Australian),           Woolworths House, 93 Longmarket Street,
Zarina Bassa, Tom Boardman (Lead Independent Director),          Cape Town, 8001
Hubert Brody, Andrew Higginson (British),                        PO Box 680, Cape Town, 8000
Gail Kelly (Australian), Nombulelo Moholi,
Lord Rose (British)                                              REGISTRATION NUMBER
                                                                 1929/001986/06
EXECUTIVE DIRECTORS
Ian Moir (Group Chief Executive Officer) (Australian),           TAX NUMBER
John Dixon (British), Reeza Isaacs (Group Finance Director),     9300/149/71/4
Sam Ngumeni, Zyda Rylands
                                                                 JSE SPONSOR
GROUP COMPANY SECRETARY                                          Rand Merchant Bank (A division of FirstRand Bank Limited)
Chantel Reddiar
                                                                 TRANSFER SECRETARIES
SHARE CODE       Computershare Investor Services Proprietary Limited
WHL                                                              15 Biermann Avenue, Rosebank, 2196
                                                                 
BOND CODE
WHLI

SHARE ISIN
ZAE000063863

BOND ISIN
ZAG000147133



Date: 22/02/2018 07:05:00 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.
Source: JSE Securities Exchange - SENS
 
DISCLAIMER: http://www.mcgbfa.com/disclaimer.htm
 
Email
 
Print