Financial results

Preliminary profit announcement, reviewed Group results
for the year ended 30 June 2014 and dividend declaration

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 are no material contingent assets or liabilities at 30 June 2014 in addition to the above.  
  Capital commitments at 30 June 2014 total R175 million (contracted: R68 million; authorised and not contracted:
R107 million).  
2.   Changes in accounting policies  
  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 year ended 30 June 2014 and the financial position at 30 June 2014, but will result in additional disclosures.  
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 their fair value and carrying value due to the short-term nature of these items. 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.   Purchase of non-controlling interests in TopT Ceramics Proprietary Limited  
  Subsequent to the financial year end, 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. The Group is currently in the process of identifying new business partners for this business.  
6.   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 seven 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 operations was concluded via a management buyout, and was preceded by fixed asset impairment and other rationalisation costs totalling R9 million. A further consequence of the sale of the Australia retail operations was the derecognition of deferred assets totalling R8 million, also included in the discontinued operations results.  
7.   Staff share scheme  
  During the year, 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. As a result 13 million of the Group’s shares were held by qualifying staff members at 30 June 2014 (the shares were previously held by the Italtile Empowerment Trust). 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 they do 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 R17 million to the Group’s income (R11 million thereof being a once-off charge for franchisee staff).  
8.   Impairment of Australian property  
  Given the continued restrained economic conditions in Australia, the Group has recorded a further R20 million impairment (2013: R5 million) on Australian property.
              Reviewed     Audited  
              year to     year to  
              30 June     30 June  
              2014     2013  
9.   Earnings per share                  
  Reconciliation of shares in issue (all figures in millions):                  
  – Total number of shares issued             1 033     1 033  
  – Shares held by Share Incentive Trust             (24)    (26) 
  – BEE treasury shares             (88)    (88) 
  Shares in issue to external parties             921     919  
  Share numbers used for earnings per share calculations (all figures in millions):                  
  – Weighted average number of shares             921     919  
  – Diluted weighted average number of shares             929     921  
      Total operations     Continuing operations  
      Reviewed     Audited     Reviewed     Audited  
      year to     year to     year to     year to  
      30 June     30 June     30 June     30 June  
      2014     2013     2014     2013  
  Reconciliation of headline earnings:
(Rand millions):  
  – Profit attributable to equity shareholders     509     444     529     443  
  – Profit on sale of property, plant and equipment     (8)    (13)    (8)    (13) 
  – Impairment of Australian property, plant and equipment     29     5     20     5  
  Headline earnings     530     436     541     435