FIVE-YEAR REVIEW
| 2010 | 2009 | 2008 | 2007 | 2006 | |||
| Rm | Rm | Rm | Rm | Rm | |||
| GROUP INCOME STATEMENTS | |||||||
| Revenue | 4 110.6 | 3 807.1 | 3 596.4 | 3 323.5 | 2 874.5 | ||
| Cost of sales | (1 330.6) | (1 318.3) | (1 272.1) | (1 194.0) | (1 020.6) | ||
| Operating costs | (1 872.8) | (1 656.5) | (1 440.8) | (1 269.6) | (1 125.3) | ||
| Operating profit | 907.2 | 832.3 | 883.5 | 859.9 | 728.6 | ||
| Investment income | 77.5 | 76.9 | 71.7 | 42.7 | 28.9 | ||
| Profit before interest and taxes (EBITA) | 984.7 | 909.2 | 955.2 | 902.6 | 757.5 | ||
| Finance costs | (121.2) | (86.5) | (56.8) | (12.4) | (12.8) | ||
| Net profit before tax | 863.5 | 822.7 | 898.4 | 890.2 | 744.7 | ||
| Taxation | (272.1) | (261.5) | (289.9) | (291.9) | (237.6) | ||
| ATTRIBUTABLE PROFIT | 591.4 | 561.2 | 608.5 | 598.3 | 507.1 | ||
| HEADLINE EARNINGS | 565.5 | 556.2 | 584.1 | 594.2 | 510.4 | ||
| GROUP BALANCE SHEETS | |||||||
| ASSETS | |||||||
| Non-current | 980.1 | 760.2 | 702.9 | 746.9 | 730.9 | ||
| Property, plant and equipment | 251.1 | 225.1 | 197.5 | 182.9 | 163.2 | ||
| Investments – insurance business | 716.0 | 535.1 | 505.4 | 461.1 | 478.0 | ||
| Deferred tax asset | 13.0 | – | – | 102.9 | 89.7 | ||
| Current | 3 877.9 | 3 375.3 | 3 058.1 | 2 653.0 | 2 249.1 | ||
| Investments – insurance business | 178.1 | 199.1 | 159.5 | 199.3 | 111.9 | ||
| Inventories | 210.0 | 228.0 | 230.4 | 230.3 | 212.6 | ||
| Trade and other receivables | 3 427.6 | 2 893.4 | 2 571.8 | 2 187.7 | 1 896.5 | ||
| Taxation | – | – | 29.6 | – | – | ||
| Cash and cash equivalents | 62.2 | 54.8 | 66.8 | 35.7 | 28.1 | ||
| TOTAL ASSETS | 4 858.0 | 4 135.5 | 3 761.0 | 3 399.9 | 2 980.0 | ||
| EQUITY AND LIABILITIES | |||||||
| Capital and reserves | 3 273.7 | 2 900.3 | 2 696.2 | 2 527.2 | 2 305.4 | ||
| Non-current liabilities | 486.3 | 191.6 | 59.0 | 93.0 | 97.7 | ||
| Interest-bearing borrowings | 350.0 | 100.0 | – | – | 1.0 | ||
| Retirement benefits | 51.8 | 53.9 | 57.7 | 67.6 | 75.8 | ||
| Deferred taxation | 84.5 | 37.7 | 1.3 | 25.4 | 20.9 | ||
| Current liabilities | 1 098.0 | 1 043.6 | 1 005.8 | 779.7 | 576.9 | ||
| Trade and other payables | 450.0 | 404.1 | 302.4 | 287.7 | 283.5 | ||
| Current portion of interest-bearing borrowings | – | – | – | 1.0 | 0.8 | ||
| Short-term borrowings | 611.4 | 637.0 | 703.4 | 429.3 | 132.8 | ||
| Taxation | 36.6 | 2.5 | – | 61.7 | 159.8 | ||
| TOTAL EQUITY AND LIABILITIES | 4 858.0 | 4 135.5 | 3 761.0 | 3 399.9 | 2 980.0 | ||
| 2010 | 2009 | 2008 | 2007 | 2006 | |
| Rm | Rm | Rm | Rm | Rm | |
| GROUP CASH FLOW STATEMENTS | |||||
| CASH GENERATED FROM OPERATIONS | 478.1 | 669.7 | 556.2 | 591.5 | 593.2 |
| Dividends and interest received | 59.9 | 96.3 | 61.0 | 58.7 | 41.3 |
| Interest paid | (127.2) | (108.5) | (68.2) | (30.0) | (18.7) |
| Tax paid | (214.2) | (185.6) | (290.4) | (403.2) | (244.4) |
| Net cash retained from operations | 196.6 | 471.9 | 258.6 | 217.0 | 371.4 |
| Cash utilised in investing activities | (126.3) | (183.0) | (97.3) | (66.6) | (45.5) |
| Net effect of financing activities | (37.3) | (234.5) | (404.3) | (439.3) | (313.9) |
| Net cash increase / (decrease) in cash and cash | |||||
| equivalents | 33.0 | 54.4 | (243.0) | (288.9) | 12.0 |
| 2010 | 2009 | 2008 | 2007 | 2006 | |
| RATIOS AND STATISTICS | |||||
| RETURNS | |||||
| Return on average shareholders funds (after-tax) | 19.2% | 20.1% | 23.3% | 24.8% | 23.2% |
| Return on average capital employed (after-tax) | 17.2% | 17.7% | 20.4% | 22.5% | 22.1% |
| Return on average assets managed (pre-tax) | 21.9% | 23.0% | 26.7% | 28.3% | 26.8% |
| MARGINS | |||||
| Gross margin | 34.9% | 31.3% | 32.7% | 34.0% | 34.9% |
| Operating margin | 22.1% | 21.9% | 24.6% | 25.9% | 25.3% |
| PRODUCTIVITY | |||||
| Number of stores | 548 | 535 | 525 | 508 | 490 |
| Revenue per store (R 000’s) | 7 501 | 7 116 | 6 850 | 6 542 | 5 866 |
| Operating profit per store (R 000’s) | 1 655 | 1 556 | 1 683 | 1 693 | 1 487 |
| Average number of employees (permanent | |||||
| employees only) | 6 668 | 6 480 | 6 696 | 6 310 | 5 879 |
| Revenue per employee (R 000’s) | 616 | 588 | 537 | 527 | 489 |
| Operating profit per employee (R 000’s) | 136 | 128 | 132 | 136 | 124 |
| Trading space (sqm) | 225 891 | 223 102 | 220 236 | 215 076 | 210 201 |
| Revenue per sqm (R) | 18 197 | 17 064 | 16 330 | 15 453 | 13 675 |
| Operating profit per sqm (R) | 4 016 | 3 731 | 4 012 | 3 998 | 3 466 |
| Inventory turn (times) | 6.0 | 5.8 | 5.5 | 5.2 | 4.8 |
| CREDIT RATIOS | |||||
| Cash and short-term sales as a % of total sales | 31.5% | 35.7% | 33.1% | 30.7% | 29.9% |
| Bad debts as a % of net trade receivables | 8.3% | 6.0% | 5.9% | 5.5% | 6.0% |
| Debtor costs as a % of net trade receivables | 10.9% | 10.0% | 6.5% | 5.8% | 5.2% |
| Debtors’ impairment provision as a % of net trade | |||||
| receivables | 16.0% | 15.7% | 13.5% | 14.9% | 16.5% |
| Arrear instalments on satisfactory paid accounts as | |||||
| a % of net debtors | 9.3% | 9.5% | 10.6% | 10.7% | 10.5% |
| Arrear instalments on slow-paying and non- | |||||
| performing accounts as a % of net debtors | 19.8% | 20.9% | 19.3% | 19.0% | 20.6% |
| Doubtful debts provision on non-performing | |||||
| accounts | 74.9% | 71.3% | 69.6% | 81.2% | 86.4% |
| Credit applications decline rate % | 27.5% | 25.4% | 22.5% | 20.1% | 22.4% |
| 2010 | 2009 | 2008 | 2007 | 2006 | ||
| SOLVENCY AND LIQUIDITY | ||||||
| Financing cover (times) | 8.1 | 10.5 | 16.8 | 72.8 | 59.2 | |
| Dividend cover | 1.87 | 1.79 | 2.00 | 2.25 | 2.25 | |
| Gearing ratio (%) | 27.5% | 23.5% | 23.6% | 15.6% | 4.6% | |
| Current ratio (times) | 3.5 | 3.2 | 3 | 3.4 | 3.9 | |
| SHARE PERFORMANCE | ||||||
| Earnings per share (cents) | 672.0 | 636.2 | 679.3 | 649.9 | 521.2 | |
| Headline earnings per share (cents) | 642.6 | 630.5 | 652.0 | 645.4 | 524.6 | |
| Cash flow per share (cents) | 543.3 | 759.2 | 620.9 | 642.5 | 609.7 | |
| Net book asset per share (cents) | 3 718.8 | 3 302.6 | 3 019.7 | 2 774.3 | 2 425.0 | |
| Share price: | ||||||
| Closing price | 56.50 | 42.69 | 41.90 | 68.50 | 61.60 | |
| High | 61.30 | 52.00 | 75.00 | 75.00 | 62.97 | |
| Low | 40.06 | 28.51 | 43.00 | 43.00 | 32.75 | |
| Normalised price-earnings ratio | 8.4 | 6.7 | 6.2 | 10.5 | 11.8 | |
| Dividends per share for the financial year (cents) | 323 | 323 | 323 | 266 | 225 | |
| Number of shares in issue (million) | 98.1 | 98.1 | 99.2 | 100 | 100 | |
| Volume of shares traded (million) | 95.9 | 96.0 | 110.5 | 120.8 | 156.1 | |
| Value of shares traded (million) | 4 911.4 | 3 679.7 | 6 284.7 | 6 859.1 | 6 386.8 | |
| Market capitalisation (million) | 5 540 | 4 188 | 4 156 | 6 850 | 6 160 | |
| Number of shareholders | 1 968 | 1 609 | 1 501 | 1 776 | 2 331 | |
EXPLANATORY NOTES:
- All ratios are based on figures at the end of the year unless otherwise disclosed.
- For the 2006 financial year, the results and financial position exclude the share-based payment (IFRS 2) arising from share awards and options granted at date of listing.
- The 2008 and 2009 results have been restated for the change in accounting policy with regard to the deferred costs on initiation fees.
DEFINITIONS
The definitions below should be read in conjunction with the accounting policies set out in the financial statements.
Return on average shareholders’ equityProfit attributable to ordinary shareholders as a percentage of average shareholders’ equity.
After-tax return on average capital employed
After-tax return for capital is the profit attributable to ordinary shareholders plus finance costs paid to providers of capital less the attributable tax on finance costs.
Capital employed is shareholders’ interest and interest-bearing debt.
The after-tax return on average capital employed is the after tax return for capital as a percentage of the average capital employed for the year.
Before-tax return on average assets managedThe before-tax return on average assets managed is the profit before interest and tax as a percentage of the average total assets.
Gross marginGross profit as a percentage of merchandise sales.
Operating marginOperating profit as a percentage of revenue.
Inventory turnCost of merchandise sales divided by the closing inventory.
Slow-paying accounts (receivables)These are customers who, to date, have paid between 65% and 70% of the amount due to Lewis over the whole period of the contract.
Non-performing accounts (receivables)These are customers who, to date, have paid less than 65% of the amount due to Lewis over the whole period of the contract.
Financing coverProfit before finance costs and taxation divided by the finance costs.
Gearing ratioInterest-bearing debt, reduced by cash and cash equivalents, divided by shareholders’ equity.
Current ratioCurrent assets divided by current liabilities.
Earnings per shareProfit attributable to ordinary shareholders divided by the weighted average number of shares in issue.
Headline earnings per shareHeadline earnings divided by the weighted average number of shares in issue.
Cash flow per shareCash generated from operations divided by the weighted average shares in issue.
Net asset value per shareThe net asset value divided by the number of shares in issue, after deducting treasury shares, at the end of the year.
Price earnings ratioThe closing price on the JSE Limited on 31 March divided by the earnings per share.
Dividends per shareThe dividends declared in respect of the financial year expressed as cents per share. Note that this will not correlate to the dividends reflected in the financial accounts since dividends for financial statement purposes are only recorded on payment.