Financial results

Reviewed Condensed Group Resultsfor the six months ended 31 December 2015
cautionary announcement and dividend declaration

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

Notes

1.  

Basis of preparation and changes in accounting policy  

 

Basis of preparation
The Interim Condensed Consolidated Financial Statements for the six months ended 31 December 2015 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 2015. 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 2015 and the financial position at 31 December 2015.  

   

2.  

Commitments and contingencies  

  There are no material contingent assets or liabilities at 31 December 2015.

  Capital commitments (Rand millions)    31 December  
2015  
  31 December  
2014  
  30 June  
2015  
               
  – Contracted     32     22     176  
  – Authorised but not contracted for     148     114     197  
  TOTAL     180     136     373  
   

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 difference between their 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.  

TopT Ceramics Proprietary Limited  

  The Group sold a 10% stake in TopT Ceramics Proprietary Limited at the beginning of the period under review, to a new business partner identified during the previous financial year. This stake was sold at a cost of R7 million, and reduces the Group’s interest in this entity to 90%.  
   

5.  

Cedar point trading 326 proprietary limited  

  The Group acquired a 10% non-controlling stake held by one of the previous business partners of Cedar Point Trading 326 Proprietary Limited at a cost of R12 million at the end of November 2015, and increases the Group’s interest in this entity to 90%. An additional business partner has since been identified.  
   

6.  

Reclassification of Australian property  

  Given that the Group’s property in Australia is now leased to third parties, it has been reclassified from property, plant and equipment to investment property. The carrying value of this property is determined using the cost model per IAS 40 Investment Property, and was R115 million at 31 December 2015.  
   

7.  

Staff Share Scheme  

  During the 2014 financial year, 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, 16,3 million of the Group’s shares net of forfeitures were held by qualifying staff members at 31 December 2015 (2014: 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 R11 million (2014: R10 million) to the Group’s income; R9 million (2014: R7 million) of this charge is a once-off accelerated expense for franchise staff.  
               

8.  

Earnings per share  

           
      Reviewed  
six months to  
31 December  
2015  
  Reviewed  
six months to  
31 December  
2014  
  Audited  
year to  
30 June  
2015  
               
  Reconciliation of shares in issue (all figures in millions):

           
  – Total number of share issued     1 033     1 033     1 033  
  – Shares held by Share Incentive Trust     (19)    (22)    (21) 
  – BEE treasury shares     (88)    (88)    (88) 
  Shares in issue to external parties     926     923     924  
  Reconciliation of share numbers used for earnings per share calculations (all figures in millions):              
  Weighted average number of shares     925     921     923  
  – Dilution effect of share awards     12     12     11  
  Diluted weighted average number of shares     937     933     934  
  Reconciliation of headline earnings (Rand millions):              
  – Profit attributable to equity shareholders     410     338     700  
  – Profit on sale of property, plant and equipment     (9)    (9)    (6) 
  – Fair value gain on SER–Export part disposal     –     –     (14) 
  – Reclassification of exchange difference to income     –     –     (19) 
  Headline earnings     401     329     661  
  No adjustments to earnings are required for diluted earnings per share calculations, as the share awards do not have an impact on diluted earnings.