Financial results

Reviewed Group results
for the six months ended 31 December 2013 and interim cash dividend

Download the entire paid announcement 

Commentary |  System-wide turnover analysis |  Condensed Group statements of comprehensive income | 
Condensed Group statements of financial position |  Store network |  Condensed Group statement of cash flows 
Group statement of changes in equity
 |  Segmental report |  Notes


1.   Commitments and contingencies
  As previously disclosed, legal proceedings have been instituted against Majuba Aviation Proprietary Limited, a subsidiary company of the Group providing aircraft charter services, for which there is insurance cover.  
  There were no material contingent assets or liabilities at 31 December 2013 in addition to the above.
  Capital commitments at 31 December 2013:     Rand millions      
  – Contracted     10      
  – Authorised, not contracted     106      
  Total     118      
2.   Changes in accounting policy
  The accounting policies adopted and methods of computation are in terms of International Financial Reporting Standards (“IFRS”) and consistent with those of the previous financial year except for the adoption of new and amended IFRS and IFRIC interpretations which became effective during the current financial year. The application of these standards and interpretations did not have a significant impact on the Group’s reported results and cash flows for the six months ended 31 December 2013 and the financial position at 31 December 2013. Certain items within Other income (R56 million) have been reclassified to Cost of sales for the half year ending December 2012 to ensure the consistent treatment of these items with the year end results. This reclassification will have no impact on the profit for the year and Statement of Financial Position.
3.   Fair values of financial instruments
  The Group does not fair value its financial assets or liabilities in accordance with quoted prices in active markets or market observables, as there is no material difference between the fair value and carrying value due to the short-term nature of these items, and/or existing terms are equivalent to market observables. There were no transfers into or out of Level 3 during the period.
4.   Sale of non-controlling interests in Cedar Point Trading 326 Proprietary limited
  As previously reported, the Group sold a 20% stake in Cedar Point Trading 326 Proprietary Limited to two new business partners during the period. This stake was sold at a cost of R14 million, and reduces the Group’s interest in this entity to 80%.
5.   Discontinued operations
  The Group disposed of the following non-core businesses (date of disposal disclosed in brackets):
Cladding Finance Proprietary Limited – the entity used to extend and manage credit to the contractors market (30 September 2013);
The eight store CTM retail operation in Australia (31 October 2013); and
Allmuss Properties Zambia Limited – a property holding company (31 December 2013).
The results of these businesses have thus been recorded as discontinued operations in these results. Cladding Finance Proprietary Limited and Allmuss Properties Zambia Limited’s contribution to Group earnings is immaterial, although R4 million profit was realised on the sale of the latter. The sale of the Australian retail operation was concluded via a management buyout, and was preceded by fixed asset impairment and other rationalisation costs totalling R10 million.
6.   Staff Share Scheme
  During the period, the Group implemented a share incentive scheme for all employees of the Group and its franchisees in South Africa that had been in the employ of the Group and/or franchise network for a period of three uninterrupted years as at 31 August 2013. This has resulted in the issue of 15 million of the Group’s shares held by the Italtile Empowerment Trust to qualifying staff members. The allotment is funded by the Group and the shares are restricted instruments which will vest with employees following a further three years of employment. Until vesting, the shares will continue to be accounted for as treasury shares, although this does have an impact on the diluted weighted average number of shares. The scheme is classified as an equity settled scheme in terms of IFRS 2, Share-based Payment, and has resulted in a charge of R14 million to the Group’s income (R11 million thereof being a once-off charge for franchisee staff). Given the unique nature of the scheme, a comprehensive review of the accounting treatment adopted will be undertaken, although it is likely that the current treatment is appropriate.
six months to  
31 December  
six months to  
31 December  
year to  
30 June  
7.   Earnings per share            
  Reconciliation of shares in issue (all figures in millions):          
  – Total number of shares issued     1 033      1 033    1 033
  – Shares held by Share Incentive Trust     25      26    25
  – BEE treasury shares     88      88    55
  Shares in issue to external parties     920      919    920
  Share numbers used for earnings per share calculations
(all figures in millions):  
  – Weighted average number of shares     920     919   919
  – Diluted weighted average number of shares     941     922   921
  Reconciliation of headline earnings: (Rand millions):            
  – Profit attributable to equity shareholders     251     222   444
  – Profit on sale of property, plant and equipment     (5)      1    (13)
  – Impairment of Australian Property     10     —   5
  Headline earnings     256      223   436
  Reconciliation of headline earnings for continuing operations (Rand millions):            
  – Profit attributable to equity shareholders     263      220   443
  – Profit on sale of property, plant and equipment     (5)      1    (13)
  – Impairment of Australian Property     —     —   5
  Headline earnings      258     221   435