Shoprite Holdings Limited · JSE:SHP
Shoprite — H1 2007 Earnings Presentation
14 slides from Shoprite's earnings presentation, February 2007
Slide 1: Shoprite Holdings Limited Interim Financial Results – December 2006
1 Shoprite Holdings Limited Interim Financial Results – December 2006
Slide 2: Carel Goosen, Deputy Managing Director
2 Carel Goosen Deputy Managing Director
Slide 3: Size of Operation
3 Size of Operation Dec 2006 Turnover R19 bn Owned outlets 886 Franchised outlets 265 Countries 17 Employees 66,000
Slide 4: Financial Results
4 Financial Results Dec 2005 Dec 2006 Growth % Turnover (R’m) 16,621 19,105 14.9 Trading Profit (R’m) 561 717 27.9 Trading Margin (%) 3.4 3.8 Diluted HEPS (cents) - All operations 64.3 82.8 28.8 - Continued operations 65.7 82.8 26.0 Dividend per share proposed (cents) 27.0 35.0 29.6 NAV per share (c
Slide 5: Highlights of Results: Gross margin
5 Highlights of Results Dec 2005 Dec 2006 Gross margin 19.3% 20.1% Increase due to: • Higher margin perishable foods and • Service departments • Larger non-food sales contribution • Central Distribution
Slide 6: Highlights of Results: Other operating income
6 Highlights of Results Other operating income increased 14.3% Dec 2005 Dec 2006 Growth R’m R’m % Commission received 54 79 45.0 Finance income earned 79 78 (1.0) Franchise fees received 10 11 9.0 Operating head-lease income 77 86 11.7 Net premiums earned 80 89 10.8 Investment income 4 6 41.5 Sundry
Slide 7: Highlights of Results: Operating expenses
7 Highlights of Results • Depreciation and amortisation increased 25.3% – Increased spend on revamps and new branches in previous financial year • Operating leases increased 26.5% – Due to 68 stores opened in last 12 months • Employee benefits increased 11.8% – Productivity increased – New stores
Slide 8: Highlights of Results: Trading profit
8 Highlights of Results • Trading profit increased 27.9% with turnover increasing by 14.9% – Increased margins – Contained overhead costs – Consumer convenience services and ticket sales – Trading margin of 3.8% highest ever
Slide 9: Highlights of Results: Exchange rate gains and losses
9 Highlights of Results Exchange rate gains / (losses) • Dec 2005: R28.7 million loss • Dec 2006: R19.5 million gain Rand to US Dollar exchange Rates (R:$) • June 2005 R6.73 • December 2005 R6.37 • June 2006 R7.11 • December 2006 R6.97
Slide 10: Highlights of Results: Capital income, interest and tax
10 Highlights of Results Dec 2005 Dec 2006 R’m R’m Income of a capital nature 8.2 21.8 – Mainly due to sale of land and buildings Net interest received 3.1 2.5 – Almost unchanged due to investment in new stores Tax – Normal and deferred 166.9 267.0 – STC 19.0 31.6 Total 185.9 298.6
Slide 11: Highlights of Results: Capital Expenditure
11 Highlights of Results Capital Expenditure Dec 2005 Dec 2006 R’m R’m Land and buildings 111.5 142.8 Store refurbishment 97.7 160.1 New stores 211.5 146.0 Information technology 23.1 26.7 Other replacements* 82.3 183.2 Total 526.1 658.8 * Other replacements represent amongst others refrigeration, m
Slide 12: Highlights of Results: Inventory
12 Highlights of Results Dec 05 Dec 06 Growth R’m R’m % Inventory 3,622 4,074 12.5 Provisioning 40 new stores Avoid “out-of-stock” over festive season Back to School 2007 Cash balances vs. Trade Creditors Increases due to balance sheet closing date
Slide 13: Highlights of Results: Debtors
13 Highlights of Results Debtors Dec 2005 Dec 2006 Growth R’m R’m % Furniture 696 672 (3.4) Franchise 277 346 24.9 Buy aid organisations 162 162 0.0 Other receivables 597 562 (5.7) Total 1,732 1,742 0.6
Slide 14: Highlights of Results: Cash flow reconciliation
14 Highlights of Results Cash flow reconciliation R’m Cash at June 2006 537 Cash from operations 961 Changes in working capital 1,176 Net interest received 9 Dividends paid (235) Tax paid (287) Purchase of assets and other investments (663) Proceeds on disposal of assets and investments 79 Other (14