Financial results

Reviewed Group results
for the six months ended 31 December 2014

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




Basis of preparation and changes in accounting policy  

Basis of preparation  
  The Interim Condensed Consolidated Financial Statements for the six months ended 31 December 2014 have been prepared in accordance with IAS 34 Interim Financial Reporting, the Companies Act, 2008 (Act 71 of 2008), as amended, the SAICA Financial Reporting Guides, as issued by the Financial Reporting Standards Council and the Listings Requirements of the JSE. The Interim Condensed Consolidated Financial Statements do not include all information on disclosures required in the Annual Financial Statements and should be read in conjunction with the Group’s Annual Financial Statements as at 30 June 2014. These results have been prepared under the supervision of Chief Financial Officer, Mr B Wood CA(SA).  
New standards, interpretations and amendments adopted  
  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 2014 and the financial position at 31 December 2014.  


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 2014 in addition to the above.  
      (Rand millions) 
      Capital commitments     31 December  
  31 December  
30 June  
    – Contracted     22     10   68  
    – Authorised but not contracted for     114     108   107  


  136     118   175  


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.  


TopT Ceramics Proprietary Limited  

  The Group acquired the 20% non-controlling stake held by the previous business partner of TopT Ceramics Proprietary Limited at a cost of R11 million in the current period. New business partners have been identified during this period.  


Discontinued operations  

  The Group disposed of the following non-core businesses in the prior comparative period:  
– Cladding Finance Proprietary Limited – the entity used to extend and manage credit to the contractors market;  
– The seven store CTM retail operation in Australia; and  
– Allmuss Properties Zambia Limited – a property holding company.  
  The results of these businesses were thus recorded as discontinued operations in the comparative period. 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 R9 million.  


Staff Share Scheme  

  During the prior comparative period, the Group implemented a share incentive scheme for all employees of the Group and its franchisees that had been in the employ of the Group and/or franchise network for a period of three uninterrupted years at each allotment date in August every year from implementation date. As a result, 15 million of the Group’s shares net of forfeitures were held by qualifying staff members at 31 December 2014 (2013: 15 million). Until vesting, the shares will continue to be accounted for as treasury shares and 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 R10 million (2013: R14 million) to the Group’s income; R7 million (2013: R11 million) of this charge is a once-off accelerated expense for franchise staff.  
six months to  
31 December  
six months to  
31 December  
year to  
30 June  


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     22     25     25  
  – BEE treasury shares     88     88     88  
  Shares in issue to external parties     923     920     920  
  Share numbers used for earnings per share calculations (all figures in millions):              
  – Weighted average number of shares     922     920     921  
  – Diluted weighted average number of shares     931     941     929  
  Reconciliation of headline earnings (Rand millions):              
  – Profit attributable to equity shareholders     338     251     509  
  – Profit on sale of property, plant and equipment     (9)    (5)    (8) 
  – Impairment of Australian property, plant and equipment     —     10     29  
  Headline earnings     329     256     530  
  Reconciliation of headline earnings for continuing operations (Rand millions):              
  – Profit attributable to equity shareholders     338     263     529  
  – Profit on sale of property, plant and equipment – net of taxation     (9)    (5)    (8) 
  – Impairment of Australian property*     —     —     20  
  Headline earnings     329     258     541  
*In the prior year, an impairment of R20 million was recorded on property in Australia, reflecting adverse economic conditions in that country.