annual report
2007

five-year review


    2007   2006   2005   2004   2003  
    Rm   Rm   Rm   Rm   Rm  
  (Normalised) (SA GAAP)
Group Income Statements                      
Revenue   3 323.5   2 874.5   2 511.2   2 274.7   2 037.9  
Cost of sales   (1 194.0)   (1 020.6)   (885.0)   (919.6)   (813.5)  
Operating costs   (1 269.6)   (1 125.3)   (1 032.7)   (849.5)   (795.1)  
Operating profit before exceptional item   859.9   728.6   593.5   505.6   429.3  
Exceptional item   –   –   –   –   47.9  
Operating profit   859.9   728.6   593.5   505.6   477.2  
Investment income   42.7   28.9   37.6   34.9   39.7  
Profit before interest and taxes (EBITA)   902.6   757.5   631.1   540.5   516.9  
Finance costs   (12.4)   (12.8)   (42.7)   (141.7)   (156.6)  
Net profit before tax   890.2   744.7   588.4   398.8   360.3  
Taxation   (291.9)   (237.6)   (182.4)   (111.5)   (108.2)  
Normalised attributable profit   598.3   507.1   406.0   287.3   252.1  
Normalised headline earnings   594.2   510.4   400.9   287.6   248.1  
Group Balance Sheets                      
Assets                      
   Non-current   746.9   730.9   608.8   257.4   289.9  
      Property, plant and equipment   182.9   163.2   159.5   115.4   117.5  
      Investments – insurance business   461.1   478.0   400.6   146.2   172.4  
      Deferred tax asset   102.9   89.7   48.7   –   –  
      Other   –   –   –   (4.2)   –  
   Current   2 653.0   2 249.1   2 066.9   2 562.5   2 256.9  
      Investments – insurance business   199.3   111.9   105.2   296.7   263.6  
      Inventories   230.3   212.6   155.8   155.3   120.2  
      Trade and other receivables   2 187.7   1 896.5   1 750.6   1 751.7   1 852.6  
      Cash and cash equivalents   35.7   28.1   55.3   358.8   20.5  
Total assets   3 399.9   2 980.0   2 675.7   2 819.9   2 546.8  
Equity and liabilities                      
   Capital and reserves   2 527.2   2 305.4   2 059.6   1 310.0   1 153.5  
   Non-current liabilities   93.0   97.7   86.1   747.9   1 162.2  
      Interest-bearing borrowings   –   1.0   1.7   683.8   1 016.4  
      Retirement benefits   67.6   75.8   72.4   36.0   33.7  
      Deferred taxation   25.4   20.9   12.0   28.1   112.1  
   Current liabilities   779.7   576.9   530.0   762.0   231.1  
      Trade and other payables   287.7   283.5   225.2   207.4   161.7  
      Current portion of interest-bearing borrowings   1.0   0.8   7.2   472.2   9.7  
      Short-term borrowings   429.3   132.8   172.0   –   36.7  
      Taxation   61.7   159.8   125.6   82.4   23.0  
                       
Total equity and liabilities   3 399.9   2 980.0   2 675.7   2 819.9   2 546.8  
Group Cash Flow Statements                      
Cash generated from operations   591.5   593.2   625.2   508.9   428.7  
Dividends and interest received   58.7   41.3   46.9   49.5   48.1  
Interest paid   (30.0)   (18.7)   (319.9)   (18.9)   (267.3)  
Tax paid   (403.2)   (244.4)   (207.7)   (99.2)   (90.5)  
Net cash retained from operations   217.0   371.4   144.5   440.3   119.0  
Cash utilised in investing activities   (66.6)   (45.5)   (53.0)   (59.0)   (44.8)  
Net effect of financing activities   (439.3)   (313.9)   (567.0)   (6.3)   6.3  
Net cash increase/(decrease) in cash and cash equivalents   (288.9)   12.0   (475.5)   375.0   80.5  
    2007   2006   2005   2004   2003  
Ratios and Statistics                      
Returns                      
Return on average shareholders’ funds   24.8%   23.2%   22.1%   24.8%   24.3%  
After tax return on average capital employed   22.5%   22.1%   18.5%   17.0%   16.4%  
After tax return on average assets managed   19.0%   18.2%   15.9%   14.4%   14.1%  
Margins                      
Gross margin   34.0%   34.9%   34.5%   33.6%   32.3%  
Normalised operating margin   25.9%   25.3%   23.6%   22.2%   21.1%  
Productivity                      
Number of stores   508   490   475   465   444  
Revenue per store (R 000’s)   6 542   5 866   5 287   4 892   4 590  
Normalised operating profit per store (R 000’s)   1 693   1 487   1 249   1 087   967  
Average number of employees (permanent employees only)   6 310   5 879   5 713   5 571   5 513  
Revenue per employee (R 000’s)   527   489   440   408   370  
Normalised operating profit per employee (R 000’s)   136   124   104   91   78  
Trading space (sqm)   215 076   210 201   207 595   205 793   197 580  
Revenue per sqm (R)   15 453   13 675   12 097   11 053   10 314  
Normalised operating profit per sqm (R)   3 998   3 466   2 859   2 457   2 173  
Inventory turn (times)   5.2   4.8   5.7   5.1   5.8  
Credit ratios                      
Cash sales % of total sales   30.7%   29.9%   30.1%   23.0%   18.2%  
Bad and doubtful debt charge as a % of                      
gross trade receivables   4.5%   4.0%   3.8%   4.4%   6.4%  
Doubtful debt provision as a % of                      
gross trade receivables   11.4%   12.6%   14.4%   15.6%   10.2%  
Total debtors provisions as a % of gross                      
trade receivables   35.1%   36.3%   35.6%   35.0%   28.2%  
Credit application decline rate %   20.1%   22.4%   20.5%   22.3%   23.7%  
Average age of book (months)   14.1   14.3   14.8   15.4   16.3  
Arrear % (full contractual)   21.0%   22.0%   25.7%   27.3%   27.9%  
    2007   2006   2005   2004   2003  
Solvency and liquidity                      
Normalised financing cover (times)   72.8   59.2   14.8   3.8   3.3  
Dividend cover   2.25   2.25   3.00   n/a   n/a 
Gearing ratio (%)   15.6%   4.6%   6.1%   60.9%   90.4% 
Current ratio (times)   3.4   3.9   3.9   3.4   9.8 
Share performance                     
Normalised earnings per share (cents)   649.9   521.2   406.0   287.3   252.1 
Normalised headline earnings per share (cents)   645.4   524.6   400.9   287.6   248.1 
Cash flow per share (cents)   642.5   609.7   625.2   508.9   428.7 
Net asset value per share (cents)   2 774.3   2 425.0   2 059.6   1 310.0   1 153.5 
   Closing price   68.50   61.60   33.51   n/a   n/a 
   High   75.00   62.97   41.50   n/a   n/a 
   Low   43.00   32.75   28.20   n/a   n/a 
Normalised price-earnings ratio   10.5   11.8   8.3   n/a   n/a 
Dividends per share for the financial year (cents)   266   225   135   n/a   n/a 
Number of shares in issue (million)   100   100   100   n/a   n/a 
Volume of shares traded (million)   120.8   156.1   61.8   n/a   n/a 
Value of shares traded (million)   6 859.1   6 386.8   2 139.5   n/a   n/a 
Market capitalisation (million)   6 850   6 160   3 351   n/a   n/a 
Number of shareholders   1 776   2 331   2 862   n/a   n/a 
Explanatory notes
  1. All ratios are based on figures at the end of the period unless otherwise disclosed.
  2. All amounts for the 2003 and 2004 financial years are in accordance with South African Generally Accepted Accounting Practice (“SA GAAP”). For 2005 to 2007 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. No restatement of the 2003 figure 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.
  4. The return on equity for the 2005 financial year has been restated to exclude the effect of the restructuring prior to the listing.
  5. The solvency/liquidity ratios for 2004 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 the financial statements here.

 

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 here).

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

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.

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 Limited 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 payment.