THE FOSCHINI GROUP LIMITED - interim condensed... · SALIENT FEATURES These unaudited interim consolidated…

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  • UNAUDITED INTERIM CONDENSED CONSOLIDATED RESULTSFOR THE HALF-YEAR ENDED 30 SEPTEMBER 2016

    THE FOSCHINI GROUP LIMITED

  • SALIENT FEATURES

    These unaudited interim consolidated condensed results were prepared by the TFG Finance and Advisory

    department of The Foschini Group Limited, acting under supervision of Anthony Thunstrm CA(SA),

    CFO of The Foschini Group Limited.

    * TFG Africa includes all operations on the African continent.

    +16,9% +8,1% +5,7%TFG GROUP TURNOVER up 16,9% to R11,4 billion

    (TFG Africa*: +9,5%)

    HEADLINE EARNINGS

    up 8,1%

    HEADLINE EARNINGS PER SHARE up 5,7% to 496,8 cents

    +4,6% 61,4% 29,5%INTERIM DIVIDEND

    of 320,0 cents per share

    a 4,6% increase

    TOTAL CASH COMPONENT

    of turnover 61,4% (TFG Africa: 50,2%)

    STRONG CASH TURNOVER GROWTH of 29,5%

    (TFG Africa: 19,0%)

    INTERIM HEADLINE EARNINGS exceed

    R1 billion for the first time

  • TFG SEPTEMBER 2016 UNAUDITED INTERIM CONDENSED CONSOLIDATED RESULTS 1

    CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

    Sept 2016Restated

    Sept 2015 March 2016Unaudited Unaudited Audited

    Rm Rm Rm

    ASSETSNon-current assetsProperty, plant and equipment (note 15) 2380,1 2055,6 2335,7Goodwill and intangible assets (note 15) 4861,4 5436,2 5577,8Participation in export partnerships 10,6 8,1 8,2Deferred taxation asset 519,7 368,9 527,2

    7771,8 7868,8 8448,9

    Current assetsInventory (note 4) 5126,5 4363,2 5116,1Trade receivables retail 6669,5 6339,2 6695,0Other receivables and prepayments 726,3 733,9 592,9Concession receivables 272,8 171,4 347,2Participation in export partnerships 2,5 9,0 6,2Cash 973,5 1003,7 888,8Taxation receivable 39,3

    13771,1 12659,7 13646,2Total assets 21542,9 20528,5 22095,1

    EQUITY AND LIABILITIESEquity attributable to equity holders of The Foschini Group Limited 9951,1 9125,6 9896,7Non-controlling interest 4,5 3,2 4,0Total equity 9955,6 9128,8 9900,7

    LIABILITIESNon-current liabilitiesInterest-bearing debt 4119,4 3897,2 5026,3Put option liability 40,7 36,8 48,1Cash-settled share incentive scheme 7,2 4,8 8,5Operating lease liability 247,8 236,1 238,2Deferred taxation liability 381,5 396,4 435,4Post-retirement defined benefit plan 225,2 198,8 217,3

    5021,8 4770,1 5973,8

    Current liabilitiesInterest-bearing debt 3589,0 3949,9 3139,4Trade and other payables 2933,5 2671,2 3046,7Operating lease liability 11,4 8,5 10,8Taxation payable 31,6 23,7

    6565,5 6629,6 6220,6Total liabilities 11587,3 11399,7 12194,4Total equity and liabilities 21542,9 20528,5 22095,1

  • TFG SEPTEMBER 2016 UNAUDITED INTERIM CONDENSED CONSOLIDATED RESULTS2

    CONDENSED CONSOLIDATED INCOME STATEMENT

    6 months ended

    30 Sept 2016

    UnauditedRm

    6 months ended

    30 Sept 2015

    UnauditedRm

    Year ended

    31 March 2016

    AuditedRm

    %change

    Revenue (note 5) 12 854,9 11 082,6 23 746,4Retail turnover 11 415,7 9 761,2 16,9 21 107,5Cost of turnover (5 756,3) (4 972,4) (10 613,1)Gross profit 5 659,4 4 788,8 10 494,4Interest income (note 6) 862,8 732,4 1 533,0Other income (note 7) 576,4 589,0 1 105,9Trading expenses (note 8) (5369,5) (4 511,9) (9 537,2)Operating profit before once-off acquisition costs and finance costs 1729,1 1 598,3 8,2 3 596,1Once-off acquisition costs (65,9)Finance costs (307,5) (240,4) (509,0)Profit before tax 1 421,6 1 357,9 3 021,2Income tax expense (378,8) (385,9) (863,9)Profit for the period 1 042,8 972,0 2 157,3

    Attributable to:Equity holders of The Foschini Group Limited 1 042,3 971,5 2 155,6Non-controlling interest 0,5 0,5 1,7Profit for the period 1 042,8 972,0 2 157,3

    Earnings per ordinary share (cents)TotalBasic 494,5 471,6 4,9 1 041,5Headline 496,8 470,2 5,7 1 024,0Diluted (basic) 491,6 467,7 5,1 1 031,9Diluted (headline) 493,9 466,3 5,9 1 014,5

    Weighted average ordinary shares in issue (millions) 210,8 206,0 207,0

  • TFG SEPTEMBER 2016 UNAUDITED INTERIM CONDENSED CONSOLIDATED RESULTS 3

    CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

    6 months ended

    30 Sept 2016

    UnauditedRm

    6 months ended

    30 Sept 2015

    UnauditedRm

    Year ended

    31 March 2016

    AuditedRm

    Profit for the period 1 042,8 972,0 2157,3Other comprehensive income:Items that will never be reclassified to profit or lossActuarial losses on post-retirement defined benefit plan (11,8)Deferred tax on items that will never be reclassified to profit or loss 3,3Items that are or may be reclassified to profit or lossMovement in effective portion of changes in fair value of cash flow hedges (16,6) 44,3 (70,3)Foreign currency translation reserve movements (604,8) 442,2 464,0Deferred tax on items that are or may be reclassified to profit or loss 4,7 (12,4) 19,7Other comprehensive income for the period, net of tax (616,7) 474,1 404,9Total comprehensive income for the period 426,1 1446,1 2562,2

    Attributable to:Equity holders of The Foschini Group Limited 425,6 1445,6 2560,5Non-controlling interest 0,5 0,5 1,7Total comprehensive income for the period 426,1 1446,1 2562,2

    SUPPLEMENTARY INFORMATION

    Sept 2016Unaudited

    Restated Sept 2015Unaudited

    March 2016Audited

    Net ordinary shares in issue (millions) 213,4 207,0 209,3Weighted average ordinary shares in issue (millions) 210,8 206,0 207,0Tangible net asset value per ordinary share (cents) 2 385,0 1782,4 2063,5

  • TFG SEPTEMBER 2016 UNAUDITED INTERIM CONDENSED CONSOLIDATED RESULTS4

    CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

    Equity holders of

    The Foschini Group

    LimitedRm

    Non-controlling

    interestRm

    Totalequity

    Rm

    Equity at 31 March 2015 audited 8130,9 2,7 8133,6Total comprehensive income for the period 1445,6 0,5 1446,1Profit for the period 971,5 0,5 972,0Other comprehensive incomeMovement in effective portion of changes in fair value of cash flow hedges 44,3 44,3Foreign currency translation reserve movements 442,2 442,2Deferred tax on movement in other comprehensive income (12,4) (12,4)Contributions by and distributions to ownersShare-based payments reserve movements 57,7 57,7Dividends paid (685,7) (685,7)Scrip distribution: share capital issued and share premium raised 336,5 336,5Proceeds from sale of shares in terms of share incentive schemes 8,0 8,0Shares purchased in terms of share incentive schemes (191,3) (191,3)Increase in the fair value of the put option liability (15,9) (15,9)Current tax on shares purchased 13,3 13,3Deferred tax on shares purchased 26,5 26,5Equity at 30 September 2015 unaudited 9125,6 3,2 9128,8Total comprehensive income for the period 1114,9 1,2 1116,1Profit for the period 1184,1 1,2 1185,3Other comprehensive incomeActuarial losses on post-retirement defined benefit plan (11,8) (11,8)Movement in effective portion of changes in fair value of cash flow hedges (114,6) (114,6)Foreign currency translation reserve movements 21,8 21,8Deferred tax on movement in other comprehensive income 35,4 35,4Contributions by and distributions to ownersShare-based payments reserve movements 57,0 57,0Dividends paid (641,5) (0,4) (641,9)Scrip distribution: share capital issued and share premium raised 243,3 243,3Proceeds from sale of shares in terms of share incentive schemes 10,1 10,1Shares purchased in terms of share incentive schemes (2,3) (2,3)Increase in the fair value of the put option liability (11,3) (11,3)Current tax on shares purchased 0,3 0,3Deferred tax on shares purchased 0,6 0,6Equity at 31 March 2016 audited 9896,7 4,0 9900,7

  • TFG SEPTEMBER 2016 UNAUDITED INTERIM CONDENSED CONSOLIDATED RESULTS 5

    CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

    Equity holders of

    The Foschini Group

    LimitedRm

    Non-controlling

    interestRm

    Totalequity

    Rm

    Equity at 31 March 2016 audited 9 896,7 4,0 9 900,7Total comprehensive income for the period 425,6 0,5 426,1Profit for the period 1 042,3 0,5 1 042,8Other comprehensive incomeMovement in effective portion of changes in fair value of cash flow hedges (16,6) (16,6)Foreign currency translation reserve movements (604,8) (604,8)Deferred tax on movement in other comprehensive income 4,7 4,7Contributions by and distributions to ownersShare-based payments reserve movements 60,2 60,2Dividends paid (814,8) (814,8)Scrip distribution: share capital issued and share premium raised 542,9 542,9Proceeds from sale of shares in terms of share incentive schemes 73,9 73,9Shares purchased in terms of share incentive schemes (233,4) (233,4)Equity at 30 September 2016 unaudited 9 951,1 4,5 9 955,6

    6 months ended

    30 Sept 2016

    Unaudited

    6 months ended

    30 Sept 2015

    Unaudited

    Year ended

    31 March 2016

    Audited

    Distribution per ordinary share (cents)Interim 320,0 306,0 306,0Final 385,0Total 320,0 306,0 691,0

  • TFG SEPTEMBER 2016 UNAUDITED INTERIM CONDENSED CONSOLIDATED RESULTS6

    CONDENSED CONSOLIDATED CASH FLOW STATEMENT

    6 months ended

    30 Sept 2016

    UnauditedRm

    6 months ended

    30 Sept 2015

    UnauditedRm

    Year ended

    31 March 2016

    AuditedRm

    Cash flows from operating activitiesOperating profit before working capital changes (note 9) 2 053,5 1 876,4 4127,2Increase in working capital (268,2) (648,9) (1509,4)Cash generated from operations 1 785,3 1 227,5 2617,8Interest income 11,6 10,8 22,3Finance costs (307,5) (240,4) (509,0)Taxation paid (353,3) (424,9) (921,8)Dividends paid (271,9) (349,2) (747,8)Net cash inflows from operating activities 864,2 223,8 461,5

    Cash flows from investing activitiesPurchase of property, plant and equipment and intangible assets (435,8) (411,0) (901,0)Acquisition of assets through business combinations (15,0) (152,4)Proceeds from sale of property, plant and equipment 5,3 7,7 14,6Repayment of participation in export partnerships 1,3 4,5 7,2Proceeds from disposal of investment 1,1Net cash outflows from investing activities (429,2) (413,8) (1030,5)

    Cash flows from financing activitiesShares purchased in terms of share incentive schemes (233,4) (191,3) (193,6)Proceeds from sale of shares in terms of share incentive schemes 73,9 8,0 18,1(Decrease) increase in interest-bearing debt (119,2) 490,3 760,6Net cash (outflows) inflows from financing activities (278,7) 307,0 585,1

    Net increase in cash during the period 156,3 117,0 16,1Cash at the beginning of the period 888,8 800,4 800,4Effect of exchange rate fluctuations on cash held (71,6) 86,3 72,3Cash at the end of the period 973,5 1 003,7 888,8

  • TFG SEPTEMBER 2016 UNAUDITED INTERIM CONDENSED CONSOLIDATED RESULTS 7

    CONSOLIDATED SEGMENTAL ANALYSIS

    6 months ended 30 September 2016

    Retail trading

    divisionsUnaudited

    Rm

    Customer value- added

    productsUnaudited

    Rm

    CreditUnaudited

    Rm

    Central and

    shared services

    UnauditedRm

    Inter-national

    divisionsUnaudited

    Rm

    Total retail

    UnauditedRm

    External revenue 8 860,1 402,3 164,8 9,3 2 555,6 11 992,1External interest income 851,2 11,6 862,8Total revenue* 8 860,1 402,3 1 016,0 20,9 2 555,6 12 854,9External finance costs (259,8) (47,7) (307,5)Depreciation and amortisation (206,1) (55,7) (261,8)Group profit before tax 1 421,6

    Segmental profit (loss) before tax 1 668,2 204,6 256,8 (870,3) 222,3 1 481,6Other material non-cash itemsForeign exchange transactions 10,4Share-based payments (60,2)Operating lease liability adjustment (10,2)

    Capital expenditure 435,8Segment assets 21542,9Segment liabilities 11587,3

    6 months ended 30 September 2015

    UnauditedRm

    UnauditedRm

    UnauditedRm

    UnauditedRm

    UnauditedRm

    UnauditedRm

    External revenue 8091,1 418,6 156,2 14,2 1670,1 10350,2External interest income 721,6 10,8 732,4Total revenue* 8091,1 418,6 877,8 25,0 1670,1 11082,6External finance costs (189,8) (50,6) (240,4)Depreciation and amortisation (161,4) (52,3) (213,7)Group profit before tax 1357,9

    Segmental profit (loss) before tax 1675,1 222,1 94,0 (716,9) 155,0 1429,3Other material non-cash itemsForeign exchange transactions (1,2)Share-based payments (57,7)Operating lease liability adjustment (12,5)

    Capital expenditure 418,0Segment assets 20528,5Segment liabilities 11399,7

    * Includes retail turnover, interest income and other income.

  • TFG SEPTEMBER 2016 UNAUDITED INTERIM CONDENSED CONSOLIDATED RESULTS8

    CONSOLIDATED SEGMENTAL ANALYSIS (CONTINUED)

    Retail trading

    divisions

    Customer value- added

    products Credit

    Central and

    shared services

    Inter-national

    divisionsTotal retail

    Year ended 31 March 2016

    AuditedRm

    AuditedRm

    AuditedRm

    AuditedRm

    AuditedRm

    AuditedRm

    External revenue 17504,4 778,4 312,4 15,1 3603,1 22213,4External interest income 1510,7 22,3 1533,0Total revenue* 17504,4 778,4 1823,1 37,4 3603,1 23746,4External finance costs (409,5) (99,5) (509,0)Depreciation and amortisation (347,1) (117,6) (464,7)Group profit before tax 3021,2

    Segmental profit (loss) before tax 3683,4 437,6 320,1 (1531,0) 241,3 3151,4Other material non-cash itemsForeign exchange transactions 1,4Share-based payments (114,7)Operating lease liability adjustment (16,9)

    Capital expenditure 901,0Segment assets 22095,1Segment liabilities 12194,4

    * Includes retail turnover, interest income and other income.

  • TFG SEPTEMBER 2016 UNAUDITED INTERIM CONDENSED CONSOLIDATED RESULTS 9

    1. Basis of preparation

    The unaudited interim condensed consolidated results for the half-year ended 30 September 2016 are prepared in accordance with the requirements of the Companies Act of South Africa. The Listings Requirements require preliminary reports to be prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by Financial Reporting Standards Council and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting. The accounting policies applied in the preparation of these unaudited interim condensed consolidated results are in terms of IFRS and are consistent with those applied in the previous consolidated annual financial statements except as noted otherwise. These results were prepared by the TFG Finance and Advisory department of The Foschini Group Limited, acting under supervision of Anthony Thunstrm CA(SA), CFO of The Foschini Group Limited.

    2. During the period, the group adopted the following revised accounting standards:

    Annual Improvements to IFRSs 2012-2014 Cycle various standards Disclosure Initiative (Amendments to IAS 1)

    The adoption of these standards had no material impact on these results.

    3. These financial statements incorporate the financial statements of the company, all its subsidiaries and all entities over which it has operational and financial control.

    6 months ended

    30 Sept 2016

    UnauditedRm

    6 months ended

    30 Sept 2015

    UnauditedRm

    Year ended

    31 March 2016

    AuditedRm

    4. InventoryInventory at period end 5126,5 4363,2 5116,1Inventory write-downs included above 91,4 82,4 174,9

    5. RevenueRetail turnover 11 415,7 9761,2 21107,5Interest income (note 6) 862,8 732,4 1533,0Other income (note 7) 576,4 589,0 1105,9

    12 854,9 11082,6 23746,4

    6. Interest incomeTrade receivables retail 851,2 721,6 1510,7Sundry 11,6 10,8 22,3

    862,8 732,4 1533,0

    NOTES

  • TFG SEPTEMBER 2016 UNAUDITED INTERIM CONDENSED CONSOLIDATED RESULTS10

    6 months ended

    30 Sept 2016

    UnauditedRm

    6 m...

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