DST - Distell Group - Audited Results Of The Group For The Year Ended
Wed, 20 Aug 2008
DST
DST - Distell Group - Audited Results Of The Group For The Year Ended
30 June 2008 And Cash Dividend Declaration
Distell Group Limited
Registration number 1988/005808/06
JSE share code: DST & ISIN: ZAE000028668
("Distell" " or "the Group" or "the company")
AUDITED RESULTS OF THE GROUP FOR THE YEAR ENDED 30 JUNE 2008 AND CASH DIVIDEND
DECLARATION
Salient features
- Total sales volumes up 6,9%
- Total revenue up 14,7%
- Trading
income up 19,7%
- Earnings per share up 11,8%
- Headline earnings per share up 20,3%
- Dividend per share up 20,4%
Abridged consolidated balance sheets
2008 2007
R'000 R'000
Assets
Non-current assets
Property, plant and equipment 1 546 159 1 330 516
Biological assets 122 024 114 675
Financial assets
85 901 72 822
Investments in associates 31 636 23 270
Intangible assets 39 373 34 060
Retirement benefit assets 114 588 187 052
Deferred income tax assets 21 870 28 762
Total non-current assets 1 961 551 1 791 157
Current assets
Inventories 3 268 555 2 703 336
Trade and other receivables 954 036 809 024
Financial assets - 361 152
Current income tax assets 62 968 -
Cash and cash equivalents
193 673 332 426
Total current assets 4 479 232 4 205 938
Total assets 6 440 783 5 997 095
Equity and liabilities
Capital and reserves
Capital and reserves 4 453 641 3 938 202
Minority interest 2 025 2 478
Total equity 4 455 666 3 940 680
Non-current liabilities
Interest-bearing borrowings 2 938 2 629
Retirement benefit obligations 15 623 12 842
Deferred income tax liabilities 177 460
164 033
Total non-current liabilities 196 021 179 504
Current liabilities
Trade and other payables 1 483 691 1 386 401
Provisions 49 577 103 539
Interest-bearing borrowings 226 027 329 264
Current income tax liabilities 29 801 57 707
Total current liabilities 1 789 096 1 876 911
Total equity and liabilities 6 440 783 5 997 095
Abridged consolidated income statements
2008 2007 Change
R'000 R'000 %
Sales volumes (litres'000) 419 059 391 889 6,9
Revenue 9 409 597 8 200 559 14,7
Operating expenses (8 074 774) (7 085 826) 14,0
Trading income 1 334 823 1 114 733 19,7
Net other gains 11 667 73 876
Operating profit 1 346 490 1 188 609 13,3
Dividend income 1 503 1 284
Finance income 52 448 87 172
Finance costs (46 064) (79 203)
Share of profit of associates 23 523 14 255
Profit before taxation 1 377 900 1 212 117 13,7
Taxation (425 899) (367 243)
Profit
for the year 952 001 844 874 12,7
Attributable to:
Equity holders of the company 952 454 847 853 12,3
Minority interest (453) (2 979)
952 001 844 874 12,7
Per share performance:
Issued number of ordinary shares
('000) 200 660 199 760
Weighted number of ordinary shares
('000) 199 974 199 079
Earnings per ordinary share (cents)
- basic earnings basis
476,3 425,9 11,8
- diluted earnings basis 447,1 396,8 12,7
- headline basis 471,0 391,5 20,3
- diluted headline basis 442,2 364,7 21,2
Dividends per ordinary share (cents)
- interim 104,0 87,0 19,5
- final 132,0 109,0 21,1
236,0 196,0 20,4
Reconciliation of headline earnings:
Net profit attributable to equity holders
of the company 952 454 847 853 12,3
Adjusted for (net of taxation):
Net other capital gains
(10 530) (68 559)
Headline earnings 941 924 779 294 20,9
Abridged consolidated cash flow statements
2008 2007
R'000 R'000
Trading income 1 334 823 1 114 733
Non-cash flow items 125 083 117 539
Working capital changes (634 995) (44 171)
Inventories (567 537) (191 065)
Trade and other receivables (191 452) (125 884)
Trade payables and provisions 123 994 272 778
Net other gains 65
934 11 006
Cash generated from operating activities 890 845 1 199 107
Net financing costs (44 629) (21 895)
Taxation paid (476 654) (365 380)
Dividends paid (426 194) (342 729)
Cash utilised in operating activities (56 632) 469 103
Cash outflow from investment activities (6 551) 50 800
Cash outflow from financing activities (312 844) (309 345)
Decrease in net cash and cash equivalents (376 027) 210 558
Net cash and cash equivalents at the
beginning of the year 332 426 121 795
Exchange gains on cash and cash equivalents 12 260 73
Net cash and cash equivalents at the end
of the year (31 341) 332 426
Call accounts and bank overdraft (225 014) -
Cash and cash equivalents 193 673 332 426
Abridged consolidated statements of recognised income and expense
2008 2007
R'000 R'000
Fair value adjustments (net of tax):
- available-for-sale investments 1 697 3 093
Cash flow hedge realised to income - 256
Currency translation differences 4 300 (7 893)
Actuarial gains and losses (45 301) 98 689
Net loss recognised directly in equity (39 304) 94 145
Profit for the year 952 001 844 874
Total recognised income for the year 912 697 939 019
Attributable to:
Equity holders of the company 913 150 941 998
Minority interest (453) (2 979)
912 697 939 019
Notes
2008 2007
R'000 R'000
1. Net
interest-bearing borrowings
Interest-bearing borrowings
Non-current 2 938 2 629
Current 226 027 329 264
228 965 331 893
Cash resources 193 673 332 426
35 292 (533)
2. Cash outflow from investment activities
To maintain operations (178 047) (123 212)
To expand operations (207 823) (89 960)
Preference shares redeemed 379 319 275 277
Investment in associates - (11 305)
(6 551) 50 800
3. Directors' valuation of financial assets
and associates
Preference shares - 361 152
Other investments and loans 85 901 73 107
Associates 187 806 162 046
273 707 596 305
4. Capital commitments
Contracted 85 138 155 772
Authorised but not contracted 472 940 371 260
558 078 527 032
5. Depreciation of property, plant and
equipment 151 655 126 637
6. Net asset value per share (cents) 2 221 1 973
7. Segment report
The Group is engaged in the production, marketing and distribution of
alcoholic beverages. As these activities comprise an integrated
operation, the Group regards this as a single primary business segment,
on which all information is disclosed in this profit announcement.
8. Contingencies
In prior years the Group received compensation for relinquishing its
distribution rights to certain trademarks. The South
African Revenue
Service has issued revised tax assessments to the value of R29,5
million in terms of which the proceeds of R67 million have been
subjected to income and value added tax. The Group has lodged an appeal
against these assessments and the matter will be heard in the Special
Income Tax Court.
Accounting policy and comparative figures
The annual financial statements are prepared in accordance with the recognition
and measurement principles of International Financial Reporting Standards
(IFRS), including IAS 34: Interim Financial Reporting, the requirements of the
South African Companies Act of 1973, as amended, and the Listing Requirements of
the JSE Limited.
The accounting policies and methods of computation are consistent
with those
adopted in the previous period, with the exception of the following new
accounting standards, interpretations and amendments to IFRS:
- IAS 1 (Amendment) - Presentation of Financial Statements - Capital Disclosures
(effective from 1 January 2007)
- IFRS 7 - Financial Instruments: Disclosures, and consequential amendments to
IFRS 4 Implementation Guidance - Financial Instruments: Disclosures and IFRS 4:
Revised Implementation Guidance, (effective from 1 January 2007)
- IFRIC Interpretation 10 - Interim Financial Reporting and Impairment
(effective 1 November 2006)
- IFRIC Interpretation 11 - IFRS 2 - Group and Treasury Share Transactions
(effective 1 March 2007), adopted early in the previous financial year
The adoption of these new accounting standards, interpretations or amendments
to
IFRS has had no material impact on the consolidated results of either the
current or prior periods.
Previously, sales of non-liquor products were shown net of expenses within `cost
of goods sold' as these were regarded as agency sales. In terms of IAS 18 -
Revenue, the Group now accounts for these sales on a gross basis.
The comparative financial statements for 30 June 2007 have been restated to
reflect this change. The effect of the restatement is summarised below. There is
no effect on any balance sheet item, trading income, operating profit, profit
before tax, profit for the year, basic and diluted earnings per share.
Previously Currently Difference
reported reported
R'000 R'000 R'000
Income
statement
Revenue 7 954 602 8 200 559 245 957
Operating expenses (6 839 869) (7 085 826) 245 957
Cost of goods sold (5 178 362) (5 424 319) 245 957
Operating performance
Revenue grew 14,7% to R9,4 billion on a sales volume increase of 6,9%.
Domestically, sales volumes increased 4,0%. Cider brands and RTDs (ready-to-
drinks) continued their strong performances, with sales volumes growing 6,7%.
This was despite the production constraints resulting from the national shortage
in supplies of packaging and carbon dioxide which impacted on the entire
beverage industry, as well as capacity limitations at Distell's own production
plants. Additional facilities to expand cider production capacity were
successfully
commissioned during the review period. Spirit volumes rose 2,1%,
driven primarily by the growth of key brands in the brandy, whisky and liqueur
categories. The white spirits market, however, remained under pressure. Despite
the highly fragmented and price-competitive nature of the wine market, the wine
portfolio was still able to deliver profitable volume growth of 2,0%.
International sales volumes, excluding Africa, increased 13,4%. Spirit volumes
grew 10,8%, thanks to solid performances in most key markets. Wine sales volumes
also showed a healthy increase, rising 12,6%. As a result, international revenue
grew 23,9%.
Revenue derived from African countries rose 27,7% on a volume growth of 24,5%.
African countries outside the BLNS region (Botswana, Lesotho, Namibia and
Swaziland) have now started to make a significant contribution, delivering
revenue growth of 43,5%.
The increase of 19,7% in trading income resulted not only from satisfactory
revenue growth, but also from improved throughput and enhanced efficiencies
across the business. The Group's ability to raise the performance of its
operating units once again allowed for significantly greater brand investment,
stepped-up marketing activities, as well as stronger sales support and
representation, while net operating margin improved from 13,6% to 14,2%.
In August 2007, a fire at the company's brandy maturation facility at De Wet,
near Worcester, caused partial damage to buildings, machinery and inventory.
The portion of the insurance claim relating to damages to infrastructure
amounted to R10,7 million (2007: R63,6 million) and is disclosed separately in
the income statement in net other gains.
Cash generated from trading activities
amounted to R1,46 billion (2007: R1,23
billion).
Headline earnings grew 20,9% to R941,9 million and headline earnings per share
improved by 20,3%. However, earnings per share, including net other gains, grew
11,8%.
Investment and funding
Total assets increased 7,4% to R6,4 billion.
Capital expenditure amounted to R383,3 million, of which R176,8 million was
spent on the replacement of assets. A further R206,5 million was directed to the
expansion of cider and spirit production capacity, as well as the refurbishment
of the Wadeville plant.
Investment in net working capital increased R612,9 million to R2,7 billion.
Inventory rose R565,2 million. Investment in bulk
spirit stock in maturation,
annually planned in accordance with the Group's longer-term view of consumer
demand for our spirit brands, increased significantly. Spirit sales volumes in
the short term were less than anticipated and as a consequence inventory levels
are higher than planned. Bottled stock and packaging material at year-end
reflected an increase of 18,1%. This increase was mostly driven by the
normalisation of stock levels of our cider brands, now that the material supply
chain has stabilised and our plants are running at increased capacity. Rising
input costs also contributed to the increased investment in inventory.
Capital expenditure and investment in working capital amounted to R996,2
million, funded mostly from internal resources. The Group remains in a strong
financial position.
Prospects
The global economy has entered a period of slower growth, despite the still
robust growth occurring in major emerging markets. The South African economy has
followed international trends and the deterioration in the domestic market is
being reflected in slower growth in real domestic expenditure and consumer
spending.
The trading environment is expected to remain competitive locally as well as
further afield and the alcoholic beverage industry will continue to face
challenges globally. However, the board believes the business is appropriately
structured, with a portfolio of compelling brands across a range of segments and
price points to allow it to compete effectively and to continue to capture
opportunities in key markets.
Distell expects to show continued growth in revenue and earnings, albeit at
more
modest levels.
Directorate
Jakes Gerwel and Peter Swartz resigned as directors during the course of the
year and we thank them for their valuable contributions. Andr? Parker and Ben
van der Ross were appointed to the board of directors with effect from 1 July
2008.
Auditor's report
The consolidated annual financial statements have been audited by
PricewaterhouseCoopers Inc. and their unqualified auditor's report is available
for inspection at the registered office of the company.
Cash dividend
The directors have resolved to declare cash dividend number 40 of 132 cents
(2007:
109 cents) per share for the year ended 30 June 2008. This represents a
total dividend of 236 cents (2007: 196 cents) for the year and a dividend cover
of 2,0 times (2007: 2,0 times) by headline earnings.
The salient dates of this dividend distribution are:
Last day to trade cum dividend Friday, 12 September 2008
Shares commence trading ex dividend Monday, 15 September 2008
from commencement of business on
Record date Friday, 19 September 2008
Payment date Monday, 22 September 2008
Share certificates may not be dematerialised or rematerialised between Monday,
15 September 2008, and Friday, 19 September 2008, both days inclusive.
Signed on behalf of the board
DM Nurek
JJ Scannell
Chairman Managing director
Stellenbosch
20 August 2008
Directors DM Nurek (Chairman), FC Bayly, PM Bester, PE Beyers, MJ Botha,
JG Carinus, GP Dingaan, SJ Genade, E de la H Hertzog, RL Lumb,
MJ Madungandaba, LM Mojela, AC Parker, JJ Scannell (Managing director),
BJ van der Ross, MH Visser
Company secretary CJ Cronje
Registered office Aan-de-Wagenweg, Stellenbosch 7600
Transfer secretaries Computershare Investor Services (Pty) Limited,
PO Box 61051, Marshalltown 2107
Sponsor RAND MERCHANT BANK (A division
of FirstRand Bank Limited)
Date: 20/08/2008 12:09:29 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
MORE SENS NEWS
RNG - Randgold & Exploration Company - Change In Sponsor
-
IFH - IFA Hotels & Resorts - Trading Statement
-
KCM - Kimberley Consolidated Mining - KCM To Commence Bulk Sampling Of Shone
-
ILV - Illovo Sugar Limited - Dealing in Securities
-
RES - Resilient Property Income Fund - Dealings In Securities By A Director
-
LON - Lonmin - Dealings By Offerors, Offeree Companies Or Their Associates
-
MML - Metmar Limited - Results of Annual General Meeting
-
LON - Lonmin Plc - Notification Of Directors' And PDMRs' Shareholdings Pursuant
-
ESR - Esor - Further Cautionary Announcement
-
KCM - Kimberley Consolidated Mining - Dealing In Securities By A Director
-
ABT - Ambit Properties Limited - Renewal Of Cautionary Announcement
-
CUH - Credit U Holdings Limited - Change To The Board Of Directors
-
EOH - EOH Holdings Limited - Trading Update
-
DST - Distell Group - Audited Results Of The Group For The Year Ended
-
DST - Distell Shows Resilience To Tough Markets
-
AMS - Anglo Platinum - Currency Conversion Rate : Interim Ordinary
-
ADW - African Dawn Capital Limited - Directors Dealing In Securities
-
JCD / RNG - JCI Limited / Randgold & Exploration Company Limited - Shareholders
-
RNG / JCD - Randgold & Exploration Company / JCI Limited - Update To
-
SLM - Sanlam Trading Statement For The Six Months Ended 30 June 2008
-
