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sustainability and governance: five-year review
| 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
| Rm | Rm | Rm | Rm | Rm | ||||||||||
| (Normalised) | (SA GAAP) | |||||||||||||
| Group Income Statements | ||||||||||||||
| Revenue | 3 596.4 | 3 323.5 | 2 874.5 | 2 511.2 | 2 274.7 | |||||||||
| Cost of sales | (1 272.1) | (1 194.0) | (1 020.6) | (885.0) | (919.6) | |||||||||
| Operating costs | (1 393.9) | (1 269.6) | (1 125.3) | (1 032.7) | (849.5) | |||||||||
| Operating profit | 930.4 | 859.9 | 728.6 | 593.5 | 505.6 | |||||||||
| Investment income | 71.7 | 42.7 | 28.9 | 37.6 | 34.9 | |||||||||
| Profit before interest and taxes (EBITA) | 1 002.1 | 902.6 | 757.5 | 631.1 | 540.5 | |||||||||
| Finance costs | (56.8) | (12.4) | (12.8) | (42.7) | (141.7) | |||||||||
| Net profit before tax | 945.3 | 890.2 | 744.7 | 588.4 | 398.8 | |||||||||
| Taxation | (303.0) | (291.9) | (237.6) | (182.4) | (111.5) | |||||||||
| Attributable profit | 642.3 | 598.3 | 507.1 | 406.0 | 287.3 | |||||||||
| Headline earnings | 617.9 | 594.2 | 510.4 | 400.9 | 287.6 | |||||||||
| Group Balance Sheets | ||||||||||||||
| Assets | ||||||||||||||
| Non-current | 706.0 | 746.9 | 730.9 | 608.8 | 257.4 | |||||||||
| Property, plant and equipment | 200.6 | 182.9 | 163.2 | 159.5 | 115.4 | |||||||||
| Investments – insurance business | 505.4 | 461.1 | 478.0 | 400.6 | 146.2 | |||||||||
| Deferred tax asset | – | 102.9 | 89.7 | 48.7 | – | |||||||||
| Other | – | – | – | – | (4.2) | |||||||||
| Current | 3 101.9 | 2 653.0 | 2 249.1 | 2 066.9 | 2 562.5 | |||||||||
| Investments – insurance business | 159.5 | 199.3 | 111.9 | 105.2 | 296.7 | |||||||||
| Inventories | 230.4 | 230.3 | 212.6 | 155.8 | 155.3 | |||||||||
| Trade and other receivables | 2 615.6 | 2 187.7 | 1 896.5 | 1 750.6 | 1 751.7 | |||||||||
| Taxation | 29.6 | – | – | – | – | |||||||||
| Cash and cash equivalents | 66.8 | 35.7 | 28.1 | 55.3 | 358.8 | |||||||||
| Total assets | 3 807.9 | 3 399.9 | 2 980.0 | 2 675.7 | 2 819.9 | |||||||||
| Equity and liabilities | ||||||||||||||
| Capital and reserves | 2 730.0 | 2 527.2 | 2 305.4 | 2 059.6 | 1 310.0 | |||||||||
| Non-current liabilities | 72.1 | 93.0 | 97.7 | 86.1 | 747.9 | |||||||||
| Interest-bearing borrowings | – | – | 1.0 | 1.7 | 683.8 | |||||||||
| Retirement benefits | 57.7 | 67.6 | 75.8 | 72.4 | 36.0 | |||||||||
| Deferred taxation | 14.4 | 25.4 | 20.9 | 12.0 | 28.1 | |||||||||
| Current liabilities | 1 005.8 | 779.7 | 576.9 | 530.0 | 762.0 | |||||||||
| Trade and other payables | 302.4 | 287.7 | 283.5 | 225.2 | 207.4 | |||||||||
| Current portion of interest-bearing borrowings | – | 1.0 | 0.8 | 7.2 | 472.2 | |||||||||
| Short-term borrowings | 703.4 | 429.3 | 132.8 | 172.0 | – | |||||||||
| Taxation | – | 61.7 | 159.8 | 125.6 | 82.4 | |||||||||
| Total equity and liabilities | 3 807.9 | 3 399.9 | 2 980.0 | 2 675.7 | 2 819.9 | |||||||||
| Group Cash Flow Statements | ||||||||||||||
| Cash generated from operations | 556.2 | 591.5 | 593.2 | 625.2 | 508.9 | |||||||||
| Dividends and interest received | 61.0 | 58.7 | 41.3 | 46.9 | 49.5 | |||||||||
| Interest paid | (68.2) | (30.0) | (18.7) | (319.9) | (18.9) | |||||||||
| Tax paid | (290.4) | (403.2) | (244.4) | (207.7) | (99.2) | |||||||||
| Net cash retained from operations | 258.6 | 217.0 | 371.4 | 144.5 | 440.3 | |||||||||
| Cash utilised in investing activities | (97.3) | (66.6) | (45.5) | (53.0) | (59.0) | |||||||||
| Net effect of financing activities | (404.3) | (439.3) | (313.9) | (567.0) | (6.3) | |||||||||
| Net cash increase/(decrease) in cash and cash equivalents | (243.0) | (288.9) | 12.0 | (475.5) | 375.0 | |||||||||
| 2008 | 2007 | 20062 | 20052 | 2004 | ||||||||||
| Ratios and Statistics | ||||||||||||||
| Returns | ||||||||||||||
| Return on average shareholders’ equity | 24.4% | 24.8% | 23.2% | 22.1% | 24.8% | |||||||||
| After-tax return on average capital employed | 21.4% | 22.5% | 22.1% | 18.5% | 17.0% | |||||||||
| After-tax return on average assets managed | 18.9% | 19.0% | 18.2% | 15.9% | 14.4% | |||||||||
| Margins | ||||||||||||||
| Gross margin | 32.7% | 34.0% | 34.9% | 34.5% | 33.6% | |||||||||
| Operating margin | 25.9% | 25.9% | 25.3% | 23.6% | 22.2% | |||||||||
| Productivity | ||||||||||||||
| Number of stores | 525 | 508 | 490 | 475 | 465 | |||||||||
| Revenue per store (R 000’s) | 6 850 | 6 542 | 5 866 | 5 287 | 4 892 | |||||||||
| Operating profit per store (R 000’s) | 1 772 | 1 693 | 1 487 | 1 249 | 1 087 | |||||||||
| Average number of employees (permanent | ||||||||||||||
| employees only) | 6 696 | 6 310 | 5 879 | 5 713 | 5 571 | |||||||||
| Revenue per employee (R 000’s) | 537 | 527 | 489 | 440 | 408 | |||||||||
| Operating profit per employee (R 000’s) | 139 | 136 | 124 | 104 | 91 | |||||||||
| Trading space (sqm) | 220 236 | 215 076 | 210 201 | 207 595 | 205 793 | |||||||||
| Revenue per sqm (R) | 16 330 | 15 453 | 13 675 | 12 097 | 11 053 | |||||||||
| Operating profit per sqm (R) | 4 225 | 3 998 | 3 466 | 2 859 | 2 457 | |||||||||
| Inventory turn (times) | 5.5 | 5.2 | 4.8 | 5.7 | 5.1 | |||||||||
| Credit ratios | ||||||||||||||
| Cash and short-term sales % of total sales | 33.1% | 30.7% | 29.9% | 30.1% | 23.0% | |||||||||
| Debtors costs as a % of net debtors | 6.5% | 5.8% | 5.2% | 4.8% | 5.4% | |||||||||
| Debtors impairment provision as a % of | ||||||||||||||
| net debtors | 13.5% | 14.9% | 16.5% | 18.3% | 19.3% | |||||||||
| Arrear instalments on satisfactory paid | ||||||||||||||
| accounts as a % of net debtors | 10.6% | 10.7% | 10.5% | 11.2% | 11.9% | |||||||||
| Arrear instalments on slow-paying and | ||||||||||||||
| non-performing accounts as a % of net debtors | 19.3% | 19.0% | 20.6% | 23.3% | 23.2% | |||||||||
| Doubtful debts provision on non-performing | ||||||||||||||
| accounts | 69.6% | 81.2% | 86.4% | 87.3% | 88.8% | |||||||||
| Decline rate % | 22.5% | 20.1% | 22.4% | 20.5% | 22.3% | |||||||||
| Solvency and liquidity | ||||||||||||||
| Financing cover (times) | 17.6 | 72.8 | 59.2 | 14.8 | 3.8 | |||||||||
| Dividend cover | 2.00 | 2.25 | 2.25 | 3.00 | n/a | |||||||||
| Gearing ratio (%) | 23.3% | 15.6% | 4.6% | 6.1% | 60.9% | |||||||||
| Current ratio (times) | 3.1 | 3.4 | 3.9 | 3.9 | 3.4 | |||||||||
| Share performance | ||||||||||||||
| Earnings per share (cents) | 717.0 | 649.9 | 521.2 | 406.0 | 287.3 | |||||||||
| Headline earnings per share (cents) | 689.9 | 645.4 | 524.6 | 400.9 | 287.6 | |||||||||
| Cash flow per share (cents) | 620.9 | 642.5 | 609.7 | 625.2 | 508.9 | |||||||||
| Net book asset per share (cents) | 3 057.6 | 2 774.3 | 2 425.0 | 2 059.6 | 1 310.0 | |||||||||
| Share price: | ||||||||||||||
| Closing price | 41.90 | 68.50 | 61.60 | 33.51 | n/a | |||||||||
| High | 74.70 | 75.00 | 62.97 | 41.50 | n/a | |||||||||
| Low | 37.00 | 43.00 | 32.75 | 28.20 | n/a | |||||||||
| Price-earnings ratio | 5.8 | 10.5 | 11.8 | 8.3 | n/a | |||||||||
| Dividends per share for the financial year (cents) | 323 | 266 | 225 | 135 | n/a | |||||||||
| Number of shares in issue (million) | 99.2 | 100.0 | 100.0 | 100.0 | n/a | |||||||||
| Volume of shares traded (million) | 110.5 | 120.8 | 156.1 | 61.8 | n/a | |||||||||
| Value of shares traded (million) | 6 284.7 | 6 859.1 | 6 386.8 | 2 139.5 | n/a | |||||||||
| Market capitalisation (million) | 4 190 | 6 850 | 6 160 | 3 351 | n/a | |||||||||
| Number of shareholders | 1 501 | 1 776 | 2 331 | 2 862 | 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 2004 financial year are in accordance with South African Generally Accepted Accounting Practice (“SA GAAP”). The results and financial position are determined in accordance with International Financial Reporting Standards, but in respect of the 2005 and 2006 financial years, it excludes share-based payments (IFRS 2) arising from share awards and options granted at date of listing. |
| 3. | The return on equity for the 2005 financial year has been restated to exclude the effect of the restructuring prior to the listing. |
| 4. | 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.
Return on average shareholders’ equity
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 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 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.
Operating margin
Operating profit as a percentage of revenue.
Inventory turn
Cost of merchandise sales divided by the closing inventory.
Slow-paying accounts (receivables)
These are customers who, to date, have paid between 70% and 65% 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 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.
Earnings per share
Profit attributable to ordinary shareholders divided by the weighted average number of shares in issue.
Headline earnings per share
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.
Price earnings ratio
The closing price on the JSE Limited on 31 March divided by the 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.