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five-year review

Explanatory notes:

1. All ratios are based on figures at the end of the year unless otherwise disclosed.
2. All amounts for the 2002 to 2004 financial years are in accordance with South African Generally Accepted Accounting Practice (“SA GAAP”). For 2005 and 2006 financial years, the results and financial position are determined in accordance with International Financial Reporting Standards, but exclude share-based payments (IFRS 2) arising from share awards and options granted at date of listing.
3. Where a ratio is referred to as normalised, the earnings in that ratio will exclude the share-based payment of R58.4 million (2005: R10.8 million).
4. No restatement of the prior year figures for the impact of AC 133 which was applied for the first time in the 2004 financial year was made. It has resulted in significant adjustments to the debtors impairment provision, carrying value of investments and opening shareholders’ equity. All ratios using these items have, consequently, not been restated for the prior years.
5. The return on equity for the 2005 financial year has been restated to exclude the effect of the restructuring prior to the listing.
6. The solvency/liquidity ratios for 2004 and prior years have been affected by the group structure prior to its listing.
   

definitions

The definitions below should be read in conjunction with the accounting policies set out in note 1 of the financial statements.

Normalised Profit

Normalised profit is the profit attributable to shareholders determined in accordance with International Financial Reporting Standards, but excludes the effects of share-based payments (IFRS 2) in respect of share awards and options granted at the date of listing (refer normalised earnings and normalised income statement). For 2004 and prior years, the profit is determined in accordance with South African Generally Accepted Accounting Practice.

Return on average shareholders equity

Normalised profit 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 normalised 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.

After-tax return on average assets managed

After-tax return is the normalised profit before interest and taxation less taxation and the attributable tax on finance costs.

The after-tax return on average assets managed is the after-tax return as a percentage of the average total assets.

Gross margin

Gross profit as a percentage of merchandise sales.

Normalised operating margin

Normalised operating profit before exceptional items as a percentage of revenue.

Inventory turn

Cost of merchandise sales divided by the closing inventory.

Average age of the debtors book

Trade receivables divided by the current year’s credit revenue.

Normalised financing cover

Normalised profit before finance costs and taxation divided by the finance costs.

Gearing ratio

Interest-bearing debt, reduced by cash and cash equivalents, divided by shareholders’ equity.

Current ratio

Current assets divided by current liabilities.

Cash conversion ratio

Cash generated from operations divided by the normalised operating profit

Normalised earnings per share

Normalised profit attributable to ordinary shareholders divided by the weighted average number of shares in issue.

Normalised headline earnings per share

Normalised headline earnings divided by the weighted average number of shares in issue.

Cash flow per share

Cash generated from operations divided by the weighted average shares in issue.

Net asset value per share

The net asset value divided by the number of shares in issue, after deducting treasury shares, at the end of the year.

Normalised price-earnings ratio

The closing price on the JSE Ltd divided by the normalised earnings per share.

Dividends per share for the financial year

The 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 are only recorded on declaration.