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BRISCOE GROUP LIMITED Results for announcement to the market Reporting Period; Half-Year 30 January 2012 to 29 July 2012 Previous reporting period; Half-Year 31 January 2011 to 31 July 2011
Amount (000s); Percentage change
Sales revenue from ordinary activities $204,733 +5.5%
Profit from ordinary activities after tax attributable to shareholders $13,280 +28.6%
Net profit attributable to shareholders. $13,280 +28.6%
EPS: 6.2cps 4.9cps
Interim Dividend Gross amount per share 4.00 cents Imputed amount per share 4.00 cents
Record Date: 21/09/12 Payment Date: 27/09/12 Imputation tax credit: $0.017
Half Year Review
Highlights for the 26 week period ended 29 July 2012: • Total sales $204.73 million, +5.48% • Same store sales growth, +6.77% • Gross profit $83.39 million, +7.48% • Gross profit margin 40.73% vs 39.97% last year • EBIT $17.47 million, +28.87% • NPAT $13.28 million, +28.59% • Interim Dividend 4.00 cents per share, +14.29%
The directors of Briscoe Group Limited announce a 28.6% increase in net profit after tax (NPAT) to $13.28 million for the half-year ended 29 July 2011. This compares to last year’s $10.33 million half year result. The half-year results are unaudited.
The directors have resolved to pay an interim dividend of 4.00 cents per share (cps). This compares to last year’s interim dividend of 3.50 cps and represents 64% of the Group’s NPAT. Books will close to determine entitlements at 5pm on 21 September 2012 and payment will be made on 27 September 2012.
The earnings were generated on sales of $204.73 million compared to the $194.10 million generated for the same period last year. On a same store basis the Group’s sales for the half year ended 29 July 2012 were 6.77% ahead of the same period last year.
Earnings before interest and tax (EBIT) of $17.47 million were generated for the six months to 29 July 2012. This compares to $13.56 million for the same period last year and represents an increase of 28.87%.
Gross margin percentage increased from 39.97% to 40.73% reflecting a strong buying and inventory management performance and effective marketing.
In the period under review, homeware sales increased 5.49% from $130.09 million to $137.24 million and sporting goods sales increased 5.46% from $64.00 million to $67.50 million.
On a same store basis, homeware sales increased by 7.90%, while sporting goods sales increased by 4.56%.
Rod Duke, Group Managing Director, said: “We are very pleased with this result. A strong sales and margin performance has enabled the Group to deliver a very strong increase in bottom line profit compared to the first half of last year.
“Customer confidence remained subdued throughout most of the first half of the year as the economic news focused on the deepening financial worries being experienced in Europe and the potential flow-on effects for the New Zealand economy. Against this background, customers tended to react by maintaining conservative spending habits, suggesting that the Group’s sales gains have resulted in improved market share.
“These gains have been driven by our marketing strategies of offering customers products they want and need in ways that have reinforced the quality and value proposition of our brands.
“During the first half of this year the number of stores remained unchanged at 79, but in early August we reopened our rebuilt Salisbury Street Briscoes Homewares store in the centre of Christchurch and to date the response from customers has been outstanding.
“We completed the space realignment project between the Briscoes Homeware and Rebel Sport stores at Botany at the beginning of the year, resulting in more retail space for Briscoes Homeware, less for Rebel Sport and shared storage and office facilities (as was the case for similar projects at Albany and Henderson). These projects have been received well by our customers and are generating incremental sales and profit.
“In May we successfully completed a full re-fit at Briscoes Homeware Blenheim. Before Christmas we are planning to open a new Rebel Sport store in a new building adjoining the existing Briscoes Homeware site; finally bringing Rebel Sport to this region.
“In July we relocated the Rebel Sport Hamilton store to an improved location in the revamped Centre Place shopping centre. This move has allowed us to retain a modern Rebel Sport store in a prominent city centre location.
“Ground works are well under way to allow us to extend and refit the Briscoes Homeware store at Cambridge. This project will increase both the retail selling area and the storage area, allowing for a much improved operation at the site.
“Work has commenced on the 1000 square metre extension to the Briscoes Homeware Hornby store in Christchurch. Like the Cambridge project this work will increase both the current selling and storage areas and is due for completion in early 2013.
“The fully transactional websites for all three of the Group’s retail brands which were launched just prior to Christmas 2011 continue to grow and develop. Sales and earnings contributions are continuing to improve as we work to maximize the opportunity offered by online retailing.”
Inventory levels at 29 July 2012 were $64.60 million, slightly higher than the $63.19 million at the same time last year. The increase is primarily due to additional stock required for the reopening in early August of the Briscoes Homeware Salisbury Street in Christchurch.
Rod Duke, said: “While the economic outlook remains uncertain, we are cautiously optimistic about Group performance as we move into the second half of this year. The strong first half should enable us to more than offset the one-off boost in business levels generated in the third quarter of last year on the back of the Rugby World Cup. The Group is well placed to better last year’s full year reported profit of $27.53 million.”
Thursday 6 September 2012
Contact for enquiries:
Rod Duke Group Managing Director Tel: (09) 815 3737
BGR - Announcement to NZX Half Year to 29 July 2012.pdf
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THE WAREHOUSE GROUP LIMITED Results for announcement to the market Reporting Period: 1 August 2011 to 29 July 2012 Previous Reporting Period: 2 August 2010 to 31 July 2011
CONSOLIDATED OPERATING STATEMENT 2011 Full Year Performance
REVENUE $1,732.168 million versus $1,667.777 million in 2011, an increase of 3.9 %
OPERATING PROFIT $96.462 million versus $114.136 million in 2011, a decrease of 15.5 %
EARNINGS BEFORE INTEREST AND TAX $125.244 million versus $119.375 million in 2011, an increase of 4.9 %
PROFIT BEFORE TAX $114.936 million versus $109.530 million in 2011, an increase of 4.9 %
PROFIT ATTRIBUTABLE TO PARENT SHAREHOLDERS $89.848 million versus $77.829 million in 2011, an increase of 15.4 %
EARNINGS PER SHARE 29.0 cents per share versus 25.1 cents per share in 2011, an increase of 15.4 %
Final Dividend: 6.5 cps Record Date: 02 November 2012 Date Payable: 14 November 2012
Tax credits on final and special dividend: Fully imputed for New Zealand residents; Supplementary dividend payable to non-residents. MEDIA RELEASE
THE WAREHOUSE GROUP ANNOUNCES ANNUAL RESULT
• Same store sales up 3.8% in Q4 for The Warehouse’s 6th consecutive quarter of growth and same store sales up 2.6% for the year • Total Group sales for the year up $64.4m, representing 3.9% growth • Reported NPAT of $89.8m and adjusted NPAT of $65.2m • Positive momentum in second half sales and gross profit • Final dividend held at 6.5 cents per share, unchanged from last year
Auckland, 7 September 2012 – The Board of The Warehouse Group today announced a reported net profit after tax for the year of $89.8 million, up 15.4% compared to $77.8 million last year. Adjusted net profit after tax for the year was $65.2 million, which is at the upper end of guidance, down 14.3% compared to $76.0 million last year.
Group sales for the year were $1.732 billion, up 3.9% on last year with sales in the year increasing $64.4m, our highest level of annual growth since 2004.
Of particular note was the Group’s improved performance in the second half of the year with sales up 4.5% to $794.2m and gross profit up 5.5% on the previous year.
The Directors have expressed confidence in the momentum demonstrated by the second half performance by holding the final dividend unchanged at 6.5 cents per share the same as the prior year. This brings the total ordinary dividends for the year to 20.0 cents per share, and increases the dividend payout ratio based on adjusted net profit to 95.5%, exceeding the Group’s policy of 90%. Dividends will be fully imputed at 30.0 per cent.
The Warehouse Limited (Red Sheds) reported total sales for the year of $1.524 billion, an increase of 4.2% compared to $1.463 billion in F11. Total sales for the second half were $688.4 million, an increase of 5.1% compared to $654.9 million last year. Same store sales in Q4 were up 3.8% for the sixth consecutive quarter of same store sales growth, resulting in a same store sales increase in the second half of 2.5% and a same store sales increase for the full year of 2.6%.
The Warehouse Limited (Red Sheds) delivered an operating profit of $80.9 million for the year compared to $98.8 million last year, down 18.1% which was consistent with our strategic plan.
In commenting on the 2012 results Chief Executive Officer Mark Powell said “inline with our strategy our results for the year saw sales and profit growth driven by key categories such as Technology, Jewellery, Health & Beauty, Baby Care and Men’s & Woman’s Apparel. I am especially pleased by the momentum we have seen in the second half of the year and the positive reaction from our customers to our refitted stores.
Our online business grew 63% in F12. We have taken important steps forward in our strategy to be the House of Bargains and Home of Essentials, wherever our customers want to shop. Launching Red Alert, our one day deal site, and getting our full range online allows us to follow our customers and position us well for strong growth online in 2013.”
Warehouse Stationery Limited (Blue Sheds) reported sales for the year of $206.6 million, an increase of 2.6% compared to $201.5 million in F11. Sales for the second half were $106.5 million, up 3.0% compared to last year. Same store sales were up 3.0% for the year and up 3.7% for the second half.
Warehouse Stationery Limited (Blue Sheds) achieved an operating profit of $9.8 million for the year. This compares to operating profit for F11 of $10.1 million.
Chairman, Graham Evans said “2012 was a critical transition year for the company to show it could grow sales and gross profit after a number of years of declining sales. While it is early days in our turnaround strategy Mark and his team have shown that their new strategy can drive positive momentum and we are looking forward to this continuing in 2013, resulting in an increase in earnings.”
We expect the retail sector to continue to experience mixed trading conditions in F13. Our earnings are significantly influenced by the Christmas trading performance over the critical January quarter, which means it is too early to provide specific earnings guidance at this stage. However, key elements of the Group’s strategic plan including investments in store experience and multichannel, together with category and margin dollar growth strategies should ensure adjusted profit in F13 is above that recorded in F12.
A sales update for the Q1 F13 period ending 28 October 2012, is due for release on Friday, 9 November 2012.
Subject to any event or material change in trading conditions that may trigger a continuous disclosure obligation, earnings guidance will be provided at the time of the half year result announcement in March 2013.
The final dividend will be paid on 14 November 2012 with the entitlement date being 2 November 2012.
ENDS Background: The Warehouse Group Limited
The Warehouse Group Limited comprises 89 Warehouse stores and 56 Warehouse Stationery stores in New Zealand. The company has a turnover of $1.7 billion and employs over 9,000 people.
Historical Dividend Distributions (fully imputed)
Dividends (cents) 2012 2011 2010 2009 2008 Interim 13.5 15.5 15.5 15.5 15.5 Final 6.5 6.5 8.5 5.5 5.5 Sub Total 20.0 22.0 24.0 21.0 21.0 Special - - 6.5 10.0 - Total 20.0 22.0 30.5 31.0 21.0
Kathmandu Holdings Limited Chief Executive Officer, Mr Peter Halkett said “this was a solid result given the difficult economic environment. It was pleasing to achieve positive same store sales growth throughout the year. The second half year EBIT of $44.3m was an improvement on last year following a difficult first half. It was also a year in which we lifted our investment programme to deliver future growth.”
For the full year same store sales growth was 5.7% (7.0% at comparable exchange rates). Online sales are growing rapidly from a relatively small base. The company opened ten new permanent stores and sales to Summit Club members continued to rise at a faster rate than the overall rate of increase in sales.
SALES, STORE NUMBERS AND GROSS PROFIT MARGIN
Year ending 31 July 2012 (NZ $m) FY12 % of Total Total sales growth %*1 Same store growth % FY12 # of new stores Sales – Australia 214.0 61.7% 15.8% 6.5% 6 Sales – New Zealand 126.1 36.3% 14.3% 9.2% 4 Sales – United Kingdom 7.0 2.0% (7.7%) (7.7%) 0 Total 347.1 100.0% 13.4% 5.7% 10 1 Calculated on local currency sales results (not affected by year-on-year exchange rate variation)
New Zealand outperformed Australia in same store sales growth. As for the first half of the year, Kathmandu’s relative sales performance in Australia has generally been weaker in those states not directly benefitting from activity in the resource sector.
Permanent stores open 31 July 2012 FY12 FY11 Australia 72 66 New Zealand 42 38 United Kingdom 6 6 Total Group 120 110
Kathmandu opened five new permanent stores in the second half (following five in the first half), four in Australia and one in New Zealand:
• Australia: Tamworth, Shellharbour, The Rocks (Sydney) and Moorabbin DFO (Melbourne). • New Zealand: Masterton.
Additionally in New Zealand the Newmarket (Auckland) store was opened in a new location and the refurbished Victoria St (Auckland) store was reopened following a ten month closure.
In the first half of FY13, an accelerated store rollout programme will have nine new stores open, all in Australia, compared to five in the same period last year.
“To support our strong growth in online sales we are about to launch a new platform to deliver an improved customer experience in existing markets, and to enable us to pursue global sales opportunities through this channel” said Peter Halkett. He commented further that future sales growth in the UK market will be targeted via the online channel rather than building a larger store network.
Year ending 31 July 2012 FY12 FY11 Gross profit margin % 63.2% 65.5%
Gross profit margin reduced by c. 230bps, although it was still within Kathmandu’s target range of 62% - 64%. Margin reduction was primarily due to the cost of a new loyalty incentive structure introduced in FY12 for our Summit Club members. Summit Club membership grew by over 30% in the year.
Operating Expenses NZ $m & % of Sales (excluding depreciation) FY12 FY11 Rent 39.6m 31.9m % of Sales 11.4% 10.4% Other operating costs 113.4m 97.3m % of sales 32.7% 31.8% Total 153.0m 129.2m % of sales 44.1% 42.2%
Kathmandu’s operating expenses increased by 190 bps as a % of sales. Expenses in the second half year decreased as a % of sales by 30 bps. In the first half, one off expenditure arose primarily from dealing with issues encountered following the implementation of our new warehouse management systems, as well as higher costs associated with relocation of key new stores, including rent.
Peter Halkett said “we also took steps during FY12 to reduce our UK cost base by outsourcing warehousing and distribution to a third party service provider and restructuring our support functions. The expense incurred in FY12 as a result of these actions was approximately $1m.”
EBIT margin decreased from 20.9% to 16.4% of sales.
OTHER FINANCIAL INFORMATION
NZ $m Year ending 31 July 2012 FY12 FY11 Capital Expenditure 21.8 11.9 Operating Cashflow 32.5 39.8 Inventories 73.3 54.0 Net Debt 51.9 42.9 Net Debt : Net Debt + Equity 15.7% 14.4%
Interim Dividend (cents per share) 3 cents 3 cents Final Dividend proposed (cents per share) 7 cents 7 cents
The increase in capital expenditure year on year has primarily been in store relocations and refurbishments, along with an increased level of expenditure on infrastructure and systems. Five stores have either been relocated or refurbished during the period and the Perth store was in progress at 31 July. Several other major infrastructure projects were completed during the year including the new distribution centre for New Zealand. Our key systems investment in FY12 was the new online platform (about to launch).
Total inventories increased by 35.7%, or NZ$19.3 million and by 21.6% on a $ per store basis. This was mainly as a result of the planned investment in product range growth and earlier deliveries of new season product.
Total net debt at 31 July increased by 21.0% on the previous year as a result of funding required for the earlier delivery of inventory. The ratio of net debt to net debt plus equity has increased slightly to 15.7%.
Kathmandu confirms that a final dividend of NZ 7 cents will be paid, bringing the total dividend payout for FY12 to 10 cents. The dividend will be fully imputed for New Zealand shareholders and fully franked for Australian shareholders. This payout is consistent with the 50%-60% range we are targeting over the medium term in conjunction with our capital investment programme.
Peter Halkett confirmed Kathmandu’s overall key growth strategies remain consistent. “We will improve company performance by continuing to invest in our store network through opening new stores and relocating or refurbishing existing stores. Maximising the return on the investment made in inventory will be a key focus, and operating costs will continue to be effectively managed.” Mr. Halkett noted that “Kathmandu’s investment in systems to grow our online sales, both within Australasia and globally, will continue given the opportunity presented by this channel.” He concluded by saying that “providing there is no further deterioration in economic conditions, Kathmandu expects an improvement in performance in FY13.”
For further information please contact:
Peter Halkett, Chief Executive Officer or Mark Todd Chief Financial Officer
+64 3 3736110
Media Enquiries to Peter Brooks, Citadel PR +61 2 9290 3033
KMD - Final Results Presentation July 2012.pdf
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The Directors advise that the audited Net Profit after tax was $21.020 million ($18.283 million) an increase of 14.97% on the prior year. Total sales were $215.581 million ($205.485 million) an increase of 4.91%. Despite an economic environment in both New Zealand and Australia that can be categorised as anything but helpful to retail all chains in the group performed well and increased market share.
Dividend The Directors have resolved that a final dividend of 19 cents per share (last year 17 cents) will be paid on 7th December 2012 to shareholders on the company’s register as at 5:00pm, 30th November 2012. Together with the interim dividend of 14.5 cents per share paid in April 2012 total dividend for the year is 33.5 cents compared with 31.0 cents per share last year.
Segment Results Glassons New Zealand Sales increased 2.2% and net profit after tax increased 5.4%. In the second half of the year Glassons completed major refurbishments in Cuba Mall, Hamilton, and Queen Street Auckland. Since balance date Dunedin has also been completed. Investment in these stores translate into improved sales and strengthen the brand.
Glassons Australia Sales improved 9.7% and net profit after tax turned from a loss in 2011 to a modest return in 2012. The second half of the year profit improved 48%. The business in Australia is beginning to show positive returns and further stores will be added as sites become available in selected locations. During the year new stores were opened in Chapel Street, Melbourne, and Carindale, Brisbane. Since balance date a further store has been opened in Brisbane at Chermside. The new stores have immediately contributed to earnings. To better support the business in Australia a new distribution facility was opened in April 2012. This facility allows better flow of stock to the stores and we have seen immediate benefits. The retail environment in Australia is undergoing considerable change, and to some extent the market is experiencing a delayed impact from the global financial crisis. While Government intervention initially softened the blow that has now played out and we are witnessing fallout at every level. In the circumstances we are encouraged by our results in this market.
Hallensteins Sales improved 4.2% and net profit after tax increased 17.7%. The repositioning of Hallensteins to a more youthful fashionable brand has earned positive results and over the next year we will begin investing in store refurbishments that will underpin the strength of this brand.
Storm Sales improved 25.3% and net profit after tax increased 46.7%. Same store sales improved 8%. During the year a further store was opened in Dunedin in March 2012 and other sites in selected areas are under consideration. Storm has continued to refine its offer and has delivered credible results for the period.
Ecommerce From a base of almost zero in 2011, revenue from sales on the web are now at a level where it represents a key store for each brand. Our ecommerce platform is world class and we are projecting strong growth in the near term. In October we will begin to fulfil orders for Australia from our Sydney distribution facility so that we can offer our Australian customers an experience that is more than competitive to that achieved by the pure play etailers in that market. We have invested in an infrastructure to ensure we capitalise on what we see as an important part of our business moving forward.
Future Outlook The first 7 weeks of the new financial year have seen sales increase 7%, with profitability ahead of last year. While this is a good start, in a macro economic sense there is little on the horizon that suggests the environment in which we operate will materially improve. What we see is what we get. Despite historically low interest rates the consumer remains cautious and has the opportunity with the internet to browse and shop on a truly international stage. Our focus is to understand our customer better than our competitors and to deliver a superior product and in store experience. Our investment in store refurbishment will continue for all our brands and our attention to detail will remain a core focus for 2013.
POSTIE PLUS GROUP LTED 2011-12 Full Year Performance
Nationwide retailer Postie Plus Group reported a normalised full year net profit of $493,000 before one off restructuring costs (net loss of $183,000 including one off costs) relating to the sale of Babycity and consolidation of its marketing and distribution centres to Auckland as key strategic steps to build its flagship Postie apparel brand. (please refer to attached PDF file for full details).
Chairman Richard Punter said the performance reflected the Group’s determined decision to forge ahead with the restructuring to focus the business on extending the store and on-line presence of the iconic Postie brand, in order to be competitively positioned when consumer confidence recovered.
“We took the hit now with costs associated with the sale of Babycity which no longer fitted our business model and the decision to recruit new retail expertise, outsource our distribution systems and processes to a new purpose-built centre at Mangere airport and begin a progressive shift of key marketing and other functions to Auckland,” he said.
Mr Punter said that having taken into account the company’s financial position and compliance with all banking covenants, directors were pleased to advise shareholders that the Board had determined that it was appropriate to pay a fully imputed dividend of one cent per share. The dividend will be paid on 14 December 2012 with an entitlement date of the 7 December 2012.
Postie, voted New Zealanders favourite clothing retailer in an independent survey in 2012, had maintained margins and sales volumes while Group sales for the year slipped 4 per cent, indicative of the continuing flat trading conditions and Babycity being sold in May.
“We have continued to move swiftly to drive value chain efficiencies to deliver savings in the future and extend both our retail capability and nationwide footprint of the Postie brand where we have genuine traction and an opportunity to grow as an appealing retailer for everyday Kiwis,” Mr Punter said.
Chief Executive, Ron Boskell said during the period under review two new Postie stores had been opened and four closed, including one affected by the Canterbury earthquakes, while the other three were combined with existing Postie stores. A nationwide store refresh programme was also rolling out on schedule, overseen by recently appointed Postie GM, Jane Gammon, who has a successful track record in apparel retailing internationally. Since balance date, a new Postie store has opened in Wellington and in the 2012-13 financial year another three stores are to open in Auckland.
“We are making the Postie shopping experience more exciting, fashionable and attractive while continuing to provide the basics that our loyal shoppers buy time and time again,” Mr Boskell said. “We’re seeing a pick-up in on-line sales, generated by our rewards programme and also new season collections that have something for all the family at affordable prices.”
For more information please contact: Ron Boskell, Chief Executive, Postie Plus Group Ltd Mobile (027) 221 7561
Postie Group Limited (PPGL) = Ron please check store numbers as of now Postie Group Limited (PPGL) is a New Zealand retail success story with a nationwide chain of 84 apparel stores located in major cities and heartland towns. The flagship Postie brand offers families a wide range of products including apparel for women, men and children, sleepwear, thermals, lingerie, accessories, cosmetics and school wear. Postie incorporates Schooltex, our national brand in school uniforms, sportswear and footwear. Listed on the New Zealand Stock Exchange, Postie Group aims to double its size to extend its presence as a modern, exciting retailer which is well-connected with customers in multiple retail channels. For more information go to: www.ppgl.co.nz
Pumpkin Patch Limited today reported its audited results for the 12 months ended 31 July 2012.
Neil Cowie, Chief Executive Officer, said “While the trading result exceeded market expectations it clearly reflects the challenging conditions we have experienced across 2012. Regardless of those challenges I am very pleased with how the team has undertaken the difficult task of reorganising the business so we can focus on our core strengths and execute long term strategies that will deliver much improved financial results for shareholders.”
Cowie added “Despite the challenging environment Australian sales were up 4% and New Zealand sales were up 3% driven by very strong online sales growth and positive sales growth from our retail stores. We encountered increased promotional activity and higher product costs, mostly cotton related, and as a result gross margins were impacted. However later in the year margins improved due to lower product costs and higher import exchange rates. We are expecting these improvements to carry over into the 2013 financial year”.
Cowie highlighted the performance of the Online business unit. “Global online sales this year exceeded $30m and global online earnings exceeded the EBIT generated by all of our New Zealand retail stores combined. This is a major milestone and a sign of the growth potential and scalability of our online model. Our online sales in Australia are the equivalent of around 11% of our retail sales which is twice that of the average Australian retailer”.
Cowie continued “One of our key focus areas is the development of multi-channel strategies. The merging of the traditional retail and online models is only just beginning however we believe we are ahead of the pack and will retain that position as we continue to invest in technology and supply chain capability. The customer reaction to our new ‘click and collect’ (buy online and deliver to store) model has been way above our expectations. We will be rolling out free in-store wi-fi for our customers in 2013 and trialling a number of other multi-channel options so watch this space.”
Cowie provided an update on its International business unit. “We are expecting increased revenue from most International markets in local currency terms in the coming year but the continued high NZ dollar will negate much of this growth. We are currently looking at a number of new international franchise and online opportunities for both Pumpkin Patch and Charlie & Me brands however any new markets will take time to generate noticeable earnings.”
Cowie continued by saying “We are becoming a true multi-channel operator. Having a strong Australasian retail presence, a rapidly growing international online operation, and the opportunities for our international wholesale/ franchise business model gives us so much flexibility when looking at growth options. Couple this with the dual brand Pumpkin Patch/ Charlie & Me strategy and you open up a lot more opportunities.”
“We have managed inventory a lot better and have been very disciplined with capital expenditure. As a result inventory is considerably lower than last year at $61m and bank debt is also lower at $55m. With better trading performances in 2013, good control over inventory, costs, and capital expenditure we are forecasting bank debt to further reduce over the coming year”.
Cowie concluded by saying “Not withstanding current retail conditions following the reorganisation, which is now mostly complete, we are a simpler and more agile business that is much better placed to take advantage of the opportunities that exist across Australasia and our international markets. We can now look towards the future with more confidence”.
Pumpkin Patch Limited 27 September 2012 ----------------------------------------------------------------- For further information please contact: Neil Cowie (Chief Executive Officer) or Matthew Washington (Chief Financial Officer) Pumpkin Patch Limited Phone +64 9 274 7088
The full Chief Executive Officer’s commentary that formed part of today’s announcement to the NZX is attached.
----------------------------------------------------------------- Pumpkin Patch Limited Audited result for the 12 months ended 31 July 2012
Notes: • All references to dollars are NZ Dollars unless otherwise stated • The Company has adopted a new segment reporting methodology that more accurately reflects the multi-channel and geographic nature of its operations. Segment results referred to in this document reflect this change. Comparative numbers have been restated.
Overview Pumpkin Patch Limited has today announced its audited result for the 12 months ended 31 July 2012.
Total revenue from the continuing business operations was $300.6m, up 3.1% on last year reflecting increased online and retail sales across Australia (up 4.4%) and New Zealand (up 3.0%). While the International business unit generated increased online and wholesale sales in local currency terms the high exchange rate continued to impact the value of sales in NZ dollar terms.
Total global online sales for the year exceeded $30.0m with online EBIT exceeding the EBIT generated by all New Zealand retail stores.
All markets continued to experience challenging retail conditions and increased promotional activity. This combined with higher product costs, especially cotton in the early part of the year, led to lower margins across all business units. However lower product costs and higher average import exchange rates later in the year led to improved margins in 2H12.
Significant overhead reductions have been achieved during the year however these were not sufficient enough to offset the impact of the lower trading margins. Net profit after tax but before reorganisation costs was above market expectations at $10.1m.
During the year the Company closed its underperforming United States and United Kingdom retail operations and made changes to head office functions and management structures. The 2012 result includes total reorganisation costs of $39.8m of which $34.3m are non-cash in nature.
Overview of FY12 Financial Result
Australia Although trading conditions in Australia were challenging total sales were up 4.4% to $207.6m, driven by strong growth in online sales and higher retail sales.
The market continued to be characterised by higher than normal levels of promotional activity which impacted gross margins. When coupled with higher product costs, especially in 1H12, overall segment margins fell below FY11 levels. However margins did improve in 2H12 with lower products costs and an improving average import exchange rate.
Despite the lower margins and the challenging trading conditions segment EBIT increased 0.2% to $35.0m.
At year end there were 129 Company operated stores open (Pumpkin Patch 120, Charlie & Me 9) with Pumpkin Patch product sold through another 30 wholesale partner ‘doors’. During the year the Company launched a dedicated Charlie & Me website adding to the online presence it had with the Pumpkin Patch website.
New Zealand While trading conditions across the year remained soft total New Zealand sales increased 3.0% to $59.2m. This was mostly driven by higher online sales with a smaller increase coming from retail stores.
As with Australia the market continued to be influenced by higher than normal levels of promotional activity. This combined with higher product costs impacted margins which were down on last year. New Zealand also experienced improved margins in 2H12 due to lower product costs and better import exchange rates.
Total segment EBIT for the period was $9.6m, down 10.6%.
At year end the Company had 51 stores open (Pumpkin Patch 47, Charlie & Me 4) and dedicated Pumpkin Patch and Charlie & Me websites operating.
International Total sales for the year were $33.7m, down 4.2% on last year. While sales in most wholesale markets increased in local currency terms the continued high NZ dollar exchange rate impacted the translation of international sales. Strong sales growth was seen across all online markets.
Segment EBIT was down 6.3% to $6.2m. Margins were impacted by higher product costs and the high NZ dollar export exchange rate. Online margins were impacted by short term stock clearance promotions that were run in the United States and United Kingdom while the retail stores in those markets were being closed.
The International segment currently consists of 3 retail stores in Ireland and Company operated websites selling product in 6 markets, with product also being sold through 339 partner ‘doors’ across 18 markets.
Central Support Functions Total Central Support costs excluding head office reorganisation costs were $27.3m (FY11: $26.0m). Adjusting for increased foreign exchange losses, actual underlying head office overheads were down $5.1m.
Other Financial Information Reorganisation Costs Full recognition has been made for all expected costs relating to the closure of the United Kingdom and United States retail business units and the reorganisation of head office functions across FY12.
An impairment and onerous lease charge of $1.5m has been made in relation to 6 marginal Australian stores which are underperforming and have upcoming lease renewals. Should appropriate lease reductions not be negotiated with landlords the stores will be closed.
Total reorganisation costs recognised in FY12 were $39.8m before tax of which $34.3m are non-cash in nature.
Cash Flows and Balance Sheet Net bank debt at July was $54.7m (1H12: $66.7m; FY11: $61.0m). Based on current trading conditions and the continued control over working capital, overheads, and capital expenditure bank debt is expected to further reduce over the coming year.
The Company has $100m of total available bank facilities in place. It has commenced the scheduled annual facility review and is expecting to soon have in place funding facilities for another three years.
Capital expenditure for the year totalled $7.8 m (FY11: $17.1m) reflecting the lower number of new stores opened this year and the new store mix moving towards the smaller and lower cost Charlie & Me stores. The international and online growth strategies are not expected to lead to any material capital expenditure requirements in the foreseeable future.
Inventory levels were lower at $61.4m (1H12: $63.4m; FY11: $84.4m). Inventory holdings are well matched to current trading conditions and maintaining that position is a key focus area for the coming year.
The total mark to market losses on foreign exchange contracts in existence at the end of July were $21.4m before tax (1H12: $32.6m; FY11: $50.0m) of which $17.5m related to the continuing business while the balance of $3.9m related to discontinuing business units and have been provided for via reorganisation costs.
Dividend No final FY12 dividend will be paid however the Company will review dividend payments at the completion of 1H13.
Key focus areas/ outlook for FY13
Current trading conditions and costs of doing business • Trading conditions are expected to remain challenging in the near term. • Expecting improved margins from lower average product costs and higher average FX import rates. • Higher export FX rates will continue to impact International earnings. • Will continue to work with landlords to develop strategies to reduce rent costs. Stores will be closed if appropriate lease terms cannot be negotiated. • Determined to keep overhead structures at appropriate levels as the business grows into the future.
Multi-channel strategies • Multi-channel growth strategies remain the primary long term strategic focus. • Retail, online and wholesale partner models will progressively merge together. • Multi-channel initiatives will leverage the capabilities and systems already in place. • Using technology to create a true multi-channel shopping experience for all customers through initiatives such as ‘Click & Collect’, ‘E-counter’, and free in-store wi-fi. To date the uptake through such initiatives has exceeded expectations. • Patch General Store’s product range will be expanded to further leverage the Company’s existing customer database and online capabilities. • Will expand the use and development of social networking initiatives to communicate and transact with our customer community.
Online • Online sales will continue to grow but at lower growth rates than in FY12. • The online and wholesale/ franchise models are expected to become increasingly interlinked with the Company currently developing online business concepts for international franchise partners. • Online will remain a low cost and flexible way to enter new markets. • No significant capital investment is required in the medium term.
International partners • Local currency sales are expected to grow but the high NZ dollar will continue to impact earnings. • The first deliveries of Charlie & Me to the Middle East and Pumpkin Patch to Mexico and Amazon Europe are scheduled for 1H13. These new relationships will take time to generate noticeable earnings. • Exploring a number of franchise and online opportunities for both Pumpkin Patch and Charlie & Me brands. • Will continue to follow a very strategic approach to new markets to ensure brand equity is maximised and protected for the long term
Charlie & Me • Online: o Online uptake of Charlie & Me is exceeding expectations and is showing potential as a strong online brand. o The brand is expected to ultimately become a ‘clicks and bricks’ model in Australasia i.e. primarily an online brand supported by a network of targeted company operated stores. • Australasia retail: o Continue to assess store operating performances vs. the strategic plan. o The 13 Charlie & Me stores open at year end are trading to expectations. • International franchise opportunities o The first deliveries to the Middle East are scheduled for 1H13. o Are currently exploring opportunities with new and existing partners.
Balance Sheet • Focus on maintaining control over working capital especially inventory. • Will continue with a disciplined approach to capital expenditure. • Improved earnings and current initiatives will lead to lower debt levels across 2013.
Summary Although trading conditions across all markets were challenging the Company generated sales growth across its core local and international markets while at the same time undertaking a major reorganisation of its operations.
The reorganisation means the Company can now focus on its core strengths such as product design and online capabilities, and start implementing longer term strategic initiatives that will deliver benefits for shareholders in years to come, and allow the Company and its shareholders to look more confidently into the future.
Neil Cowie Chief Executive Officer
Jane Freeman Chairperson
Pumpkin Patch Limited 27 September 2012
PPL - CEO Presention.pdf
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HALFYR: RBD: Restaurant Brands Half Year Results Announcement
RBD 26/10/2012 09:24 HALFYR
REL: 0924 HRS Restaurant Brands New Zealand Limited
HALFYR: RBD: Restaurant Brands Half Year Results Announcement
Directors' Report to Shareholders For the Half Year ended 10 September 2012
1H 2013 1H 2012 Change (%) Total Group Revenue ($m) 167.2 166.8 +0.2 Group Net Profit after Tax* ($m) 8.8 8.6 +2.4 Dividend (cps) 6.5 6.5 - *Excluding non-trading items
o Net Profit after Tax for the half year (excluding non-trading items) was $8.8 million (9.0 cents per share), up 2.4% on the prior year. Reported profit (including non-trading items) was $6.9 million.
o Total revenues of $167.2 million were up 0.2% on the prior year. Same store sales were up 0.5% for the half year, driven by a significant improvement in Pizza Hut which was up 19.5%.
o Total brand EBITDA was $27.0 million, an increase of $1.0 million (4.0%) on the previous half year, with higher earnings for KFC and Pizza Hut partly offset by reduced earnings for Starbucks Coffee.
o G&A costs increased $1.0 million (16.6%), with increased investment in human resources and information systems, together with Carl's Jr establishment costs, in anticipation of three stores opening in the second half.
o Directors have declared a fully imputed interim dividend payable on 23 November 2012 of 6.5 cents per ordinary share, consistent with last year.
Group Operating Results
Restaurant Brands' unaudited net profit after tax (excluding non-trading items) for the half year ended 10 September 2012 was $8.8 million or 9.0 cents per share, a 2.4% increase on the prior year's result of $8.6 million. Reported profit was $6.9 million (7.0 cents per share) down 9.2% on prior year because of a $1.3 million increase in non-trading items.
Total operating revenue at $167.2 million was up $0.3 million (0.2%) on the prior year with the small decline in KFC revenue of $0.5 million and Starbucks Coffee of $0.6 million being offset by the $1.3 million increase in revenue for Pizza Hut.
Brand EBITDA was up $1.0 million on prior year to $27.0 million. KFC earnings increased $0.7 million (2.9%). Pizza Hut also increased EBITDA by $0.6 million (59.5%), although Starbucks Coffee was down $0.3 million (15.5%). The earnings increase for KFC was mainly from a lower cost of sales (mix variance and some efficiency improvements). Pizza Hut's lift in earnings largely arose from enhanced fixed cost leverage from increased sales volumes. Starbucks Coffee earnings were adversely affected by the fall in revenue.
Directors are comfortable with the improvement in overall trading results (and particularly Pizza Hut), achieved in the face of a continuing challenging retail environment and some increases in key input costs.
The increase in earnings at the brand level was almost completely offset by a $1.0 million increase in above store overhead (G&A). The bulk of the increase was in Carl's Jr set up costs (recruitment, training and salaries of new staff). There were also increases in human resource and information systems costs with the significant "beefing up" of resources in these areas.
Two further stores were closed permanently following the Christchurch earthquake - these were Starbucks Coffee stores located in Cathedral Square and Colombo Street. One further Starbucks Coffee store in Cashel Mall remains closed and is unlikely to re-open.
1H 2013 1H 2012 Change Change (%) Sales ($m) 127.4 127.9 -0.5 -0.4 EBITDA ($m) 23.9 23.2 +0.7 +2.9 EBITDA as a % of Sales 18.7 18.1 - -
KFC produced total revenues of $127.4 million, down 0.4% ($0.5 million) on prior year. Same store sales were down 2.4%. Whilst negative for the first quarter, rolling over the launch of Double Down last year, they improved to a positive 0.7% for the second quarter, a satisfactory result given the comparative period last year also had the impact of the Rugby World Cup.
Despite the negative same store and total sales, operating efficiencies and a higher margin menu mix resulted in an increase in this half year's earnings against prior year. The KFC business produced $23.9 million of EBITDA (up $0.7 million) which was 18.7% of sales versus 18.1% last year.
The transformation process has continued with three stores located at Te Awamutu, Thames and Hawera being refurbished over the period. All of these stores have re-opened with sales at or ahead of expectations. Two stores at Lower Hutt and Park Avenue, Hutt Valley were closed during the half to prepare for site relocation as part of the transformation programme. The new relocated KFC Hutt Valley store re-opened with very strong sales shortly after the end of the half year as one of the flagship stores for the brand.
A total of 62 stores have now been transformed which represents nearly three quarters of the network of 86. A further four transformations and two new stores (including the relocated Hutt Valley store) are planned for the second half of the year.
1H 2013 1H 2012 Change Change (%) Sales ($m) 25.9 24.6 +1.3 +5.4 EBITDA ($m) 1.7 1.0 +0.7 +59.5 EBITDA as a % of Sales 6.4 4.2 - -
Pizza Hut saw a significant lift in sales and margin over this half year.
The increase in sales of $1.3 million (5.4%) to $25.9 million is a particularly pleasing outcome, given it was on a significantly lower store base - 11 stores (15%) less than prior year. The effective same store sales increase was 19.5%.
The introduction of strong value propositions to the Pizza Hut business with the sustained success of the $4.90 Large Classics Pizza and other value price points have successfully driven the improved sales.
The sales leverage together with tight operational controls has seen Pizza Hut EBITDA increase $0.6 million to $1.7 million for the half year (up 59.5%). EBITDA margin also improved to 6.4% of sales, up on the 4.2% in the prior year.
Pizza Hut finished the half with 63 stores, 11 less than the prior year with 20 stores now sold to independents (seven in this half year) and four stores closed (one over this half year).
Sales of regional stores to independent franchisees will continue with a further five stores expected to be sold by the end of the financial year.
Total Pizza Hut system sales (including independent franchisees) were $32.2m for the half year, an increase of 18.8% in total and 18.7% on a same store basis.
1H 2013 1H 2012 Change Change (%) Sales ($m) 13.4 14.0 -0.6 -4.4 EBITDA ($m) 1.4 1.7 -0.3 -15.5 EBITDA as a % of Sales 10.7 12.1 - -
The Starbucks Coffee brand experienced a fall in sales on a total and same store basis in the half year. Despite a strengthening exchange rate and improvement in operational efficiencies, sales deleverage, increased input costs and the end of business interruption insurance cover for three stores in Christchurch resulted in a reduction in earnings. The business returned an EBITDA of $1.4 million for the half, $0.3 million or 15.5% down on the prior year. EBITDA margins declined from 12.1% in the prior year to 10.7%.
Sales at $13.4 million were down by $0.6 million or 4.4% on last year with same store sales down 2.7%.
Store numbers were 33 at balance date, two down on the prior year but only 32 stores were operating consistent with the prior year. During the period, two stores in the Christchurch CBD that did not re-open after the earthquake were permanently closed. These stores were located at Cathedral Square and Colombo Street with a further store at Cashel Mall in the CBD remaining closed since the earthquake.
The development of the Carl's Jr concept continues to gain momentum. Initial training with the franchisor in the US for the first batch of managers has been completed and site acquisition, design and development is well under way for the first stores.
Three stores are expected to open in the second half of the year. They are located in Metro Centre in the Auckland CBD, Palmerston North and Mangere. A number of other stores are also in the development pipeline as part of a progressive rollout of stores across the country.
There have been some initial set up costs (largely personnel and training) incurred for the development of the brand, but all stores once opened are expected to be immediately profitable at the EBITDA level.
Corporate & Other
General and administration (G&A) costs at $7.2 million were up $1.0 million or 16.6% on the prior half year. With the establishment of the Carl's Jr brand, there have been increases in headcount to build the initial management structure and train the first managers. As the brand builds critical mass this expenditure requirement will reduce considerably. There has also been significant investment in human resources and information systems capability to support other significant initiatives such as replacement of the payroll processing system and a centralised recruitment centre to provide greater consistency and quality in selecting staff. G&A costs were 4.3% of sales for the half year, an increase on the 3.7% of sales in the prior year; however a number of these additional costs will progressively reduce and G&A is targeted to return to 4.0% of sales in the new year.
Depreciation charges of $7.4 million for the half year were consistent with the prior year. Although there has been significant capital expenditure over the past year, particularly in KFC, this was largely offset by reductions in depreciation from the sale of Pizza Hut stores to independent franchisees.
Interest expense of $0.4 million is down $0.3 million on the prior year with lower debt levels.
Tax expense is down on the prior year with lower reported profit levels. The effective tax rate of 25.8% is similar to the prior year of 25.6%.
Non-trading items of $2.9 million were up on last year's $1.7 million. Most of the increase came from Pizza Hut store disposals as the $1.0 million book gain on store sales was offset by a $2.8 million write down in associated goodwill. There were also write offs and make good costs on store closures of a further $1.1 million.
Cash Flow & Balance Sheet
Total assets of $103.4 million were $1.5 million lower than last year end, with property, plant and equipment at $76.6 million versus $78.0 million at year end. Despite payment of $0.3 million in franchise fees, intangible assets of $18.2 million were down from $20.9 million at the last year end with Pizza Hut continuing to write off goodwill as stores are sold to independent franchisees. There are no further impairment write downs on intangibles as all three brands continued to maintain enterprise values in excess of their carrying values.
Total liabilities at $46.0 million were up $0.9 million on the previous year end with total borrowings reduced by $7.3 million to $6.4 million; however this was largely offset by an increase in current liabilities. Creditors and accruals increased $7.3 million compared to prior year end.
Operating cash flows of $19.8 million were $4.6 million up on the previous half year mainly because of favourable working capital movements in creditors and accruals and the receipt of insurance proceeds from the earthquake.
Cash outflows from investing activities of $3.1 million were down $7.8 million on the previous half year with a reduction in KFC transformation expenditure to $4.9 million and the benefit of proceeds from the sales of Pizza Hut franchises ($2.1 million).
With higher operating cash flows and reduced investing cash outflows, debt reduced by $7.3 million over the half year reducing total borrowings to $6.4 million.
Given the fact the financial performance for the first half is anticipated to continue for the balance of the year, the company's relatively low levels of debt and factoring in the capital expenditure requirements of bringing the Carl's Jr stores progressively to market, the board has declared an interim dividend of 6.5 cents per share, the same as the prior year.
Following the change in corporate tax rate from 30% to 28% from 1 March 2011, the company has been gradually utilising imputation credits at the rate of 30% with each dividend paid since that change to ensure that the maximum benefit of these imputation credits are passed onto shareholders within the statutory two year transition period. As a result, the interim dividend will be at a blended rate with 2.8 cents fully imputed at 30% and the balance of 3.7 cents fully imputed at 28%.
The dividend will be paid on Friday 23 November 2012 to all shareholders on the register at 5pm on Friday 9 November 2012. For overseas shareholders, a supplementary dividend of 1.1471 cents per share will be paid at the same time.
Directors have elected to continue to suspend the dividend reinvestment plan for the time being, but will review this again prior to the declaration of a final dividend.
This continues to be a challenging period for the sector and for the company in the current tight economic and retail environment.
Pizza Hut has performed significantly better than the prior year with the significant sales lift providing a platform for sales leverage and an improvement in margin; this is expected to continue.
The KFC business faces further input cost increases in the second half of the year but is anticipating being able to manage these through some sales growth and operating efficiencies. KFC will receive a further boost in the second half with the opening of two of its new "Fusion" stores and a number of smaller transformations.
Starbucks Coffee has experienced a decline in sales and margins; however pricing changes, revised beverage formulations and a revamped food range are expected to address this.
The level of increased G&A is also expected to reduce in the second half.
With three Carl's Jr stores opening towards the end of the year, and all expecting to be immediately profitable, there will be some positive contribution from this new brand to the full year result.
Directors therefore anticipate a similar trend in profit in the second half over to a full year NPAT (excluding non-trading items) in the vicinity of $18 million.
For further information, please contact:
Russel Creedy Grant Ellis CEO CFO/Company Secretary Phone: 525 8710 Phone: 525 8710 ENDS
RESTAURANT BRANDS GROUP Consolidated Income Statement For the period 1 March to 10 September 2012 (2013 Half Year)
1st Half 2013 vs Prior 1st Half 2012 10 September 2012 % 12 September 2011 $NZ000's (Unaudited)
Total operations Sales KFC 127,443 (0.4) 127,912 Pizza Hut 25,884 5.4 24,565 Starbucks Coffee 13,369 (4.4) 13,980 Total sales 166,696 0.1 166,457
Other revenue 465 29.2 360 Total operating revenue 167,161 0.2 166,817
Cost of goods sold (137,905) (0.1) (137,834)
Gross margin 29,256 0.9 28,983
Distribution expenses (1,529) 10.3 (1,704) Marketing expenses (7,921) 7.6 (8,576) General and administration expenses (7,204) (16.6) (6,179)
Ratios Net tangible assets per security (net tangible assets divided by number of shares) in cents 40.0c 36.7c
Cost of goods sold are direct costs of operating stores: food, paper, freight, labour and store overheads. Distribution expenses are costs of distributing product from store. Marketing expenses are call centre, advertising and local store marketing expenses. General and administration expenses (G&A) are non-store related overheads.
Restaurant Brands New Zealand Limited Results for announcement to the market
Reporting Period 6 months to 10 September 2012 Previous Reporting Period 6 months to 12 September 2011
Amount (000s) Percentage change Revenue from ordinary activities NZ$167,161 0.2% Profit from ordinary activities after tax attributable to security holder. NZ$6,858 (9.2)% Net profit attributable to security holders. NZ$6,858 (9.2)%
Interim/Final Dividend Amount per share Imputed amount per share Interim NZ 6.5 cents NZ 2.6 cents
Record Date 9 November 2012 Dividend Payment Date 23 November 2012
Comments: A brief Refer to attached report
This report is based on accounts which have not been audited. The report is provided with the accounts which accompany this announcement. End CA:00228901 For:RBD Type:HALFYR Time:2012-10-26 09:24:26
RBD - Report 2013.pdf
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The Directors of Kirkcaldie & Stains Limited (the “Company”) announce that the Group’s audited result for the year ended 31 August 2012 showed a net loss after tax of $773,000 which compares to the prior year loss of $56,000.
The retail operations reported a pre-tax loss of $1,760,000 which compares to a loss of $643,000 in the prior year. Sales revenue for the year fell from $35.1 million to $34.2 million, a decrease of 2.6%. The gross margin percentage decreased by 1.6% due to increased competitive pressures and the impact of the rollout of the new merchandise system which was completed in August 2012. Closing stock held for resale was down by $1,040,000 from last year and this had a positive impact on the net cash flows from operations.
Despite the difficult retail trading environment, the focus remains in bringing the retail business back into profitability.
The property operations reported a pre-tax profit of $908,000 compared to a pre-tax profit of $626,000 in the prior year. The property business benefited from the reinstatement of rental income from the new Country Road store which opened in November 2011 and from the reinstatement, in April 2012, of rental income from the newly redeveloped and earthquake strengthened space leased to Contact Energy. However the result was negatively impacted by another significant increase in insurance premiums and increased funding costs.
In September 2012 the property company entered into a long term agreement with Contact Energy for the lease of 5 floors of the Harbour City Centre building. The agreement requires a $6 million refurbishment of levels 4 and 5 and common areas of the building. This work commenced this month. Also this month the property company entered into a conditional sale and purchase agreement for the sale of the Harbour City Centre building. The agreement is conditional on the purchaser carrying out a due diligence investigation of the property, the board of directors approving the transaction, and the shareholders of Kirkcaldie & Stains Limited approving the proposed sale.
The Group’s balance sheet remains robust with shareholders’ funds of $19 million which represents an equity ratio of 41%. The Harbour City Centre building is shown in the financial statements as an asset of $26.8 million, but the most recent valuation of August 2012, completed prior to the agreement with Contact Energy mentioned above, values the asset at $46,550,000 (last year: $46,500,000).
Given the disappointing result, the Directors resolved not to pay a final dividend for the year ended 31 August 2012.
Falcon Clouston Chairman
For further information: Mr John Milford P O Box 1494 Wellington 6140 P: 04 494 7260 E: [email protected]
The Board of AWF Group has reported a significant lift in Revenue and Profitability for the period and announced an increase in interim dividend to 6.4 cents; a 28% increase over the previous year (5 cents).
Directors noted that turnover lifted by 29% to $61.9 million ($47.9 million 2011) whilst net profit after tax (NPAT) jumped to $4.4 million up from $1.7 million in 2011. After removing the one off impact of the sale of Panacea Healthcare, net profit after tax from continuing operations was $2.4 million ($1.8 million 2011) an increase of 33% for the period.
Chairman Ross Keenan reported that all divisions of the business performed well with particular strength seen in the food processing sector; the AWF Trades division in both Christchurch and Auckland; and the Christchurch region overall. “Employers across the country have continued to adopt temporary staffing as a viable strategy. Only the Wellington region remains suppressed due to a lack of Government spending.” says Mr Keenan.
Given the strong trading performance Directors have declared an interim dividend of 6.4 cents (last year 5 cents) fully inputed, and payable on 30 November 2012 to shareholders registered on 23rd November 2012. This reflects a payout rate of 60% of underlying earnings consistent with previous advice.
The Board noted that following receipt of the proceeds of the Panacea sale, the Group has significantly reduced debt and has returned to a strong balance sheet with extensive funding capability available should further opportunities be identified.
TrustPower Limited Unaudited Financial Results for the Six Months Ended 30 September 2012
TrustPower’s profit after tax attributable to the shareholders of the Group was $69.8 million for the six months ended 30 September 2012 compared with $68.8 million for the prior period, an increase of 1.6 per cent. This includes the impact of fair value movements on financial instruments which were broadly in line with the prior period. TrustPower’s consolidated underlying surplus after tax was $76.2 million for the half year (an increase of 0.8 per cent) compared with $75.6 million for the same period last year. Underlying surplus after tax excludes fair value movements on financial instruments and one-off adjustments impacting on the prior period such as the change of company tax rate and the removal of depreciation deductibility for long life buildings both of which took effect from 1 April 2011 and affected the comparative result. Earnings before interest, tax, depreciation, amortisation and fair value movements on financial instruments (“EBITDAF”) increased by 2.8 per cent to $166.1 million from $161.6 million in the previous year. The primary driver of increased EBITDAF was trading gains from placement of generation to high priced periods as well as the sale of electricity forward contracts through ASX when wholesale electricity prices were firm earlier in the reporting period. Approximately $3.9 million relating to the cost of transacting currency options to hedge currency exposure was expensed during the period prior to the Group committing to the Snowtown Stage 2 wind farm investment. This amount was included in other operating expenses.
Total electricity volume sold in New Zealand was 1,986 GWh compared with 2,137 GWh in the prior year a decrease of 7 per cent. Electricity customer numbers decreased to 206,000 as at 30 September 2012 from 209,000 at 31 March 2012 and 218,000 as at 30 September 2011. Mass market sales were down 9 per cent versus prior period largely as a result of the decrease in customer numbers and to a lesser extent lower customer usage. Retail competition remained intense during the period with customer switching continuing albeit some reduction in customer churn has been experienced towards the end of the period.
Time of use sales decreased by 77 GWh to 1,076 GWh in the current period. However, this reduction was offset by 109 GWh of sales through ASX given attractive pricing available in this market.
The Company’s total New Zealand generation production of 1,292 GWh for the first six months was down 122 GWh (9 per cent) due to lower hydro and wind production compared with the prior period. Production in the current period is consistent with expected long term average. Wholesale electricity prices were firmer than the prior period as South Island hydro storage levels fell below long term average in the first quarter.
The Snowtown Wind Farm in South Australia produced 186 GWh which was 5 per cent up on prior period and in line with expected long term average. Debt (including subordinated bonds) to debt plus equity was 37 per cent at 30 September 2012 versus 36 per cent in the previous year reflecting commencement of capital spend on the Snowtown Stage 2 wind farm.
TrustPower continues to maintain high levels of committed credit facilities. Including subordinated bonds, the Company currently has just over $1.4 billion of committed debt funding in place. As at 30 September 2012 Group net debt was $849 million. The undrawn facilities will be used to fund the Snowtown Stage 2 wind project. During the period TrustPower successfully refinanced $108 million of subordinated bonds maturing in September 2012 with a combined retail exchange and general market offer of 7 year subordinated bonds maturing September 2019. A total of $140 million was raised at an interest rate of 6.75 per cent.
The 3.8MW hydro project at Esk Valley in the Hawkes Bay is progressing well towards target commissioning in June 2013. The decision to proceed with the 2.6MW residual flow project at the existing Arnold hydro scheme has been delayed as project economics remain under review.
Earlier this month Environment Canterbury recommended changes to the Rakaia River Water Conservation Order. These recommended changes will now proceed through governmental approval processes. The Water Conservation Order amendment is an important step to enable TrustPower to provide reliable irrigation supply to landowners in the region.
Construction of the 270MW Snowtown Stage 2 wind farm in South Australia has commenced following financial close in July this year. The project remains on target to achieve final commissioning scheduled for November 2014. TrustPower recently announced that it had discontinued exclusive discussions with a party interested in owning the 126MW Snowtown South part of the Stage 2 development. TrustPower is now considering a competitive sales process following commissioning of Snowtown South which is targeted for May 2014.
The Directors are pleased to announce an interim dividend of 20 cents per share, fully imputed, payable 14 December 2012 (record date of 30 November 2012).
HALFYR: MFT: Mainfreight Limited - Half Year Result to 30 September 2012
MFT 13/11/2012 08:30 HALFYR
REL: 0830 HRS Mainfreight Limited
HALFYR: MFT: Mainfreight Limited - Half Year Result to 30 September 2012
Financial Result for the Six Months Ended 30 September 2012 (Unaudited) & Appointment of Director
The Mainfreight Group is pleased to report a net surplus after taxation of $27.74 million for the first six months of the 2013 financial year; a decrease of 4.6% on the previous year's result of $29.08 million (excluding non-recurring items, the decrease is 6.3%).
EBITDA performance declined 5.1% to $61.06 million, down $3.31 million from the previous year's record for the same period of $64.37 million (excluding foreign exchange effects, this represents a decrease of 3.1%).
Total revenue (sales) increased 4.9% or $43.47 million to $936.37 million (excluding foreign exchange effects, this represents an increase of 6.9%).
For comparison purposes, results for the period excluding the European division saw sales revenue improve 9.8% to $742.49 million, and EBITDA improve 15.0% to $52.73 million, an increase of $6.87 million over the same period last year. These increases highlight the continuing strength across the balance of the Mainfreight global network, and of course reflect the poor trading performance from our European operations.
The trading performance from Europe is indicative of ongoing economic weakness in the region, coupled with the European summer holiday period. The loss of warehousing customers post-acquisition, as previously mentioned, has also contributed.
Trading in New Zealand, Australia, Asia and the United States has continued the trends of the first quarter, with revenue and EBITDA showing positive growth and reflecting Mainfreight's improved performance across all four regions.
Similarly, the third quarter has started strongly and includes better weekly trading results from Europe compared to the same period last year.
Regional Performance (figures in local currencies)
New Zealand (NZ$) New Zealand EBITDA improved 8.7% to NZ$24.19 million, compared to the same period last year. Sales revenues were up 5.9% to NZ$228.29 million.
Financial performance in both divisions, Domestic and Air & Ocean, is ahead of the prior year, with Domestic sales contributing more to the result. Trading into the third quarter continues those trends.
In our Air & Ocean division, the gaining of new business is expected to bring an immediate benefit to revenue levels. Logistics (warehousing) activity has increased from the year prior with our new South Auckland facility contributing positively, ahead of expectations.
Domestic freight performance is also ahead of the year prior, with new facilities in Invercargill and Palmerston North expected to be fully operational by early January 2013. A conditional agreement to purchase approximately seven hectares of land in Hamilton has been signed. This land will be rail-served, in line with Mainfreight's commitment to the use of rail freight throughout New Zealand.
Australia (AU$) In Australia EBITDA performance improved 22.0% to AU$13.02 million compared to the same period last year. Sales revenue momentum carried through from the first quarter, up 13.3% on the previous year to AU$209.42 million.
Our Domestic Transport and Logistics operations are the significant contributors to this performance with sales and EBITDA growth both exceeding 20%.
Improved warehouse utilisation and activity have lifted performance, and in our Domestic Transport operations revenue growth is being driven by market share gains.
In both instances, growth is placing pressure on facilities and at times impacting gross margin. The capital investments being made in Queensland, New South Wales, Victoria and South Australia will bring welcome relief.
Our Air & Ocean operations are providing incremental increases in revenue and EBITDA contributions. A clear emphasis remains in place for improved air and ocean freight volume growth, to and from the Australian market.
Trading into the third quarter continues to be strong for our Australian operations.
Asia (US$) Satisfactory inter-company trading (within the Mainfreight network) has boosted EBITDA which is up 19.2% to US$1.37 million. In-country sales declined 4.2% to US$14.75 million and European trade remains weak; both areas are targeted for development.
Good performances from our Southern China, Hong Kong and Shanghai branches assisted the improved EBITDA result.
Both Airfreight and Seafreight categories are ahead, primarily in the export sector although a small improvement in imports is encouraging and one which we will build upon.
Trading into the third quarter has delivered further gains, although we are yet to see peak season volumes of previous years.
United States of America (US$) Revenues in the USA have improved 10.2% to US$182.04 million and EBITDA is up 18.7% to US$8.12 million, with the primary contribution coming from Mainfreight USA.
Growth in the Mainfreight operations has been dominated by international Air & Ocean sales growth and gross margin improvement. Domestic sales, while ahead, are up only marginally by 2.4%. Revenues within this division are now nearly equally split between Air & Ocean and Domestic freight. Our first branch in Canada is now operational in Toronto, and our Mexico City branch is expected to open in early December.
CaroTrans, our wholesale NVOCC operation, has seen EBITDA performance similar to that of the prior year, with revenues up 3.6% to US$68.98 million.
Trading into the third quarter reflects ongoing improvement for Mainfreight and similar year-on-year performance for CaroTrans.
Europe (Euro EUR) Our most disappointing result, exacerbated by poor trading during the European holiday period of August and September. Whilst we have been able to maintain revenue levels at similar levels to those of last year, with just a 1.4% decrease to EUR122.36 million, EBITDA has declined 50.4% to EUR5.26 million as margins reduced through poor warehouse utilisation and activity, and poorly performing transport operations in Belgium and France. Cost structures have also increased as labour costs were incurred to facilitate new customer gains in our Logistics facilities.
We expect improving margins as revenue from new customers bolsters our Logistics and Air & Ocean divisions. Meanwhile the focus remains on better management of cost structures in the Transport operations. We will continue with strong sales efforts in our Air & Ocean business, supported by our global network. Eastern Europe and Russia offer further opportunity for development and recent expansion includes branches opened in Katowice, Poland and Kiev, Ukraine.
We maintain our confidence in the long-term benefits of our European acquisition although we are disappointed with the financial performance over the last six months.
Trading into the third quarter is marginally ahead of the same period last year.
Group Operating Cash Flows Operating cash flows were NZ$31.28 million, on par with the prior year.
Capital Expenditure totalled NZ$32.38 million, of which NZ$20.94 million related to property development.
Dividend The Directors of Mainfreight have approved an interim dividend of 12.0 cents per share (remaining at the same level as that declared for the 2012 year).
This dividend will be fully imputed and will be paid on 14 December 2012, with books closing on 7 December 2012. A supplementary dividend will be paid to non-resident shareholders.
Appointment to Board of Directors We are pleased to announce the appointment of Simon Cotter as a Director of Mainfreight Limited.
Simon (45) has had a long association with Mainfreight as a director of Grant Samuel & Associates and has personally assisted in Mainfreight's mergers and acquisitions activity since 2003. In addition to a comprehensive understanding of the company and the industry, Simon brings strong financial and analytical skills which will be of significant value and will complement the mix of skills and experience of the existing board members.
Simon's appointment will take place effective 1 January 2013. He will stand for election at the Company's Annual Meeting of Shareholders on 31 July 2013.
Outlook Whilst the half-year result has been negatively impacted by our poor European contribution, the performance of all our other divisions remains satisfactory and all continue to find improved sales growth and profitability.
We are confident of maintaining this growth and profitability, and expect to see improving returns from our European interests.
As previously indicated to the market, Mainfreight has moved to half-yearly reporting. Our full year results to 31 March 2013 will be reported on 29 May 2013.
For further information, please contact Don Braid, Group Managing Director, telephone +64 9 259 5503, +64 274 961 637 or email [email protected]. End CA:00229631 For:MFT Type:HALFYR Time:2012-11-13 08:30:28
MFT - Mainfreight - Half Year Results Presentation.pdf
MFT - Financial Statements Half Year to 30 September 2012.pdf
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At the half way point of the 2012/13 financial year Infratil is on track to deliver its full year earnings guidance and has committed significant investment capital to underpin future earnings and value growth.
The most notable event for the period was commencement of the $550 million Snowtown II wind farm. This is the single largest investment project ever undertaken by the Infratil group and is projected to provide an annual EBITDAF contribution of $99 million when fully commissioned. The investment is important in its own right and as an indicator of Infratil’s ability to initiate high-quality investments outside of New Zealand at a time when local demand for privately provided transport and energy infrastructure is limited.
The half year financial performance and solid capital position has allowed the Infratil Group to declare an interim dividend of 3.25 cents per share, an increase of 8.0% over the prior year. Hedge revaluations and a write-down in the value of Infratil’s European airports reduced the Net Parent result to a loss;
• Net Parent Surplus was a loss of $17 million against a profit of $50 million last year. The decline was due to ($73 million) of revaluations, write-downs and the result of discontinued operations of $73 million against $6 million of write-ups last year. • Consolidated Earnings Before Interest, Tax, Depreciation, Amortisation and Financial Adjustments (EBITDAF) from continuing operations were $295 million, up 7% on the same period last year. • A dividend of 3.25 cents per share, up 8%, has been declared and will be paid on 14 December to shareholders on the register as at 30 November. The dividend reinvestment plan will continue to operate. • The group has a comfortable capital position and retains bank and capital markets support. Z Energy and TrustPower undertook well-supported bond issues and after balance date Infratil opened a new bond issue.
IFT - unaudited financial statements 300912.pdf
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Ryman Healthcare today announced an underlying profit of $48 million for the first half - a new record for the company and up 16% on last year. Unrealised valuation gains lifted the reported profit after tax to $69 million.
“It’s a terrific result,” said Ryman chairman Dr David Kerr. “We’ve invested heavily in new aged care and retirement communities over the past 18 months, and we are seeing some reward for that commitment.”
Ryman shareholders will receive an 18% lift in their interim dividend. The dividend of 4.6 cents per share will be paid on December 7, with the record date for entitlements being November 30.
The most notable project completed in the half was the Diana Isaac Retirement Village in Christchurch, which was designed and built post quake.
Sales of occupation rights lifted 15% to 447 units, and the company opened 226 new resthome, hospital and dementia rooms in the six months under review.
Operating cashflows were also at record levels with $109 million generated for the half, and the balance sheet received a boost - shareholders equity lifted 7% to $691 million.
“We are trading well and we’re on track to achieve our target of 15% underlying profit growth for the full year.”
In May the company marked a milestone of ten consecutive years of record profit results. The company also announced that it had lifted its build rate to 700 retirement units and aged care beds per annum, in response to the strong demand for its villages.
Ryman has new villages planned for Waikanae, Howick and Melbourne, and recently announced plans to develop a new village in Petone.
“We are delighted to have received planning approval for our first Melbourne village,” said Dr Kerr, “and you can expect to see building works under way early in the New Year.”
The company remains committed to investing in aged care and retirement communities in New Zealand.
The NZ Government has recognised the need for an additional 12,000 – 20,000 aged care beds to meet the projected growth in demand over the next 15 years.
Statistics NZ estimates the number of New Zealanders aged 75 plus will more than double from 250,000 to 516,000 over the next twenty years. In Australia the outlook is similar, with the number aged 75 plus set to double to 2.8 million.
Established in 1984 Ryman currently owns 25 villages nationwide, which each offer a combination of retirement living and aged care, and serves over 6,500 residents.
Media advisory: For further information, photos, interviews or comment please contact Ryman chairman Dr David Kerr on 021 362 403, or Ryman managing director Simon Challies on 03 3664069 or 0274 968 762
CONSOLIDATED OPERATING STATEMENT FOR THE HALF YEAR ENDED 30 SEPTEMBER 2012
Current Half Year NZ$; Up/(Down) %; Previous Corresponding Half Year NZ$
UNDERLYING PROFIT: 48,122,000; 16%; 41,424,000
Trading Revenue: 87,514,000; 19%; 73,718,000 Other Revenue 410,000; -215%; 419,000 Total Operating Revenue 87,924,000; 19%; 74,137,000
Fair value movement of investment properties: 59,134,000; 15%; 51,572,000
TOTAL INCOME: 147,058,000; 17%; 125,709,000
NET PROFIT BEFORE TAXATION: 75,418,000; 17%; 64,388,000
Less tax on operating profit: 6,643,000; 40%; 4,751,000
NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS OF LISTED ISSUER: 68,775,000; 15%; 59,637,000
Earnings per share: 13.8 cps; 16%; 11.9 cps
Interim Dividend 4.6 cps; 18%; 3.9 cps Record Date: 30 November 2012 Date Payable: 7 December 2012 Imputation Tax Credit: No Imputation Credit
Rakon Limited Results for announcement to the market Reporting period 6 months to 30th September 2012 Previous reporting period 6 months to 30th September 2011
Amount NZ$000 % Change Revenue from ordinary activities 89,414 -5.5% Earnings before interest, tax, depreciation, amortisation & share based payments 4,695a -24% Earnings before interest & tax -3,348b -3,482% Net profit after tax -3,960b -1,429% Note a: includes share of EBITDA from associates and joint venture of NZ$1,942,000. b: includes share of profit of associates and joint venture of NZ$501,000.
Amount per security Imputed amount per security Interim / Final Dividend Nil Nil Record Date Not Applicable Not Applicable Dividend Payment Date Not Applicable Not Applicable
Rakon (RAK) has posted a half year revenue of NZ$89 million, down $5 million on the previous year but up $6 million on the preceding 6 months, reflecting the company’s re-invigorated strategy in the Asian market.
Rakon Managing Director, Brent Robinson, said the company had been building its position in several markets and investing in its manufacturing platforms to meet anticipated growth. This has required the business to continue to carry additional costs over that period. The results in the current half year also reflected a softer than expected Telecommunications infrastructure market.
The economic situation in Europe and North America has impacted the Telecommunications market for longer than had been expected. Operator spend has been down but recent announcements, such as those from AT&T, show this is turning, as operators begin building their 4G networks.
Mr Robinson said Rakon is strongly positioned in this market and beginning to see an increase in demand. “Although recent announcements by several operators to roll out 4G networks have been later coming than the market expected, we remain in a very strong position as a preferred supplier to the leading vendors of equipment for these networks.”
“These new 4G networks will incorporate both traditional macro base station equipment and small cells. This equipment and associated backhaul investment will provide significant growth for Rakon in the coming years.” Mr Robinson said SWD (smart wireless device) growth has continued strongly, which meshed well with Rakon’s strategy.
During 2012, China has surpassed the US as the largest market for smartphone sales and Chinese brand names are taking an increasing share of this market.
“Rakon is a leading supplier not only to the well-recognised names but also to the leading Chinese brands. Rakon’s RCC (Rakon Crystal Chengdu) facility is operating well. Capacity will increase with the planned movement of two high volume lines from NZ and additional new capacity in the new year,” he said.
EBITDA on a look through basis including JVs and Associates for the first half was NZ$4.7 million compared with $6.2 million in the same period in the prior year and $6.9 million in the last 6 months of the prior year. A bottom line Net Loss after tax of NZ$4.0 million was recorded.
“Our manufacturing facilities in China and India are now well established which will enable us to reduce costs we have been carrying through the transition and allow us to improve earnings and continue to invest in growth.”
Recently Rakon announced a realignment of its global business, taking advantage of its scale manufacturing plants in India and China that form a vital part in the company’s long term growth strategy. This realignment will reduce global costs by NZ$10 million per annum, with 70% of the planned changes expected to be in place by April 2013. It would also enable the NZ business to concentrate more heavily on growing its R&D activities and new product development.
Commenting upon full year guidance given to the market in August, Mr Robinson said that with the current prospects and orders being received Rakon should achieve a result within the range predicted.
The Directors declare that the consolidated financial statements on pages 3 to 15 have been prepared in compliance with applicable Financial Reporting Standards. The accounting policies the Directors consider critical to the portrayal of the company’s financial condition and results which require judgements and estimates about matters which are inherently uncertain are disclosed in note 2.17 of the financial statements for the year ended 31 March 2012. Unaudited Consolidated Interim Statement of Comprehensive Income
The accompanying notes form an integral part of these interim financial statements. Unaudited Consolidated Interim Statement of Changes in Equity
The accompanying notes form an integral part of these interim financial statements. Unaudited Consolidated Interim Balance Sheet
The accompanying notes form an integral part of these interim financial statements. Unaudited Consolidated Interim Statement of Cash Flows
The accompanying notes form an integral part of these interim financial statements. Unaudited Consolidated Interim Statement of Cash Flows
The accompanying notes form an integral part of these interim financial statements.
Notes to the Unaudited Consolidated Interim Financial Statements 1. General information Rakon Limited (“the Company”) and its subsidiaries (together “the Group”) is a world leader in the development of frequency control solutions for a wide range of applications. Rakon has leading market positions in the supply of crystal oscillators to the GPS, telecommunications network timing/synchronisation, and aerospace markets. The Company is a limited liability company incorporated and domiciled in New Zealand. It is registered under the Companies Act 1993 and is an issuer in terms of the Securities Act 1978. The Company is listed on the New Zealand Stock Exchange. These consolidated interim financial statements have been approved for issue by the Board of Directors on 15 November 2012. 2. Summary of significant accounting policies 2.1. Basis of preparation This condensed consolidated interim financial information for the six months ended 30 September 2012 has been prepared in accordance with NZ IAS 34, Interim Financial Statements (“NZ IAS 34”). The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 March 2012, which have been prepared in accordance with NZ IFRS. 2.2. Accounting policies The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 March 2012 with the addition of the following: 2.3. The Group has adopted the following new and amended IFRSs as of 1 April 2012: NZ IFRS 7 (amendment): Financial Instruments disclosures – Transfer of Financial Assets (effective for annual periods beginning on or after 1 July 2011) The amendments require additional disclosures about transfer of financial assets to enable users of financial statements - To understand the relationship between transferred financial assets that are not derecognised in their entirety and the associated liabilities; and - To evaluate the nature of, and risks associated with, the entity’s continuing involvement in derecognised financial assets. The amendment is not expected to have a material impact on the Group or Company’s financial statements and will be adopted in the financial statements for the annual reporting period ending 31 March 2013. FRS 44 New Zealand Additional Disclosures and Harmonisation Amendments (effective for annual periods beginning on or after 1 July 2011) FRS 44 sets out New Zealand specific disclosures for entities that apply NZ IFRSs. These disclosures have been relocated from NZ IFRSs to clarify that these disclosures are additional to those required by IFRSs. The Harmonisation Amendments amends various NZ IFRSs for the purpose of harmonising with the source IFRSs and Australian Accounting Standards. The new standard and amendments are not expected to have a material impact on the Group or Company’s financial statements and will be adopted in the financial statements for the annual reporting period ending 31 March 2013. NZ IAS 1 Amendments Presentation of Items of Other Comprehensive Income (effective for annual periods beginning on or after 1 July 2012) The amendment requires entities to separate items presented in other comprehensive income into two groups, based on whether they may be recycled to profit or loss in the future. This will not affect the measurement of any of the items recognised in the balance sheet or the profit or loss in the current period. The Group and Company expect to adopt the amendment in the financial statements for the annual reporting period ending 31 March 2014. NZ IAS 12 Recovery of Underlying Assets (effective from 1 January 2012) The amendment requires the measurement of deferred tax assets or liabilities to reflect the tax consequences that would follow from the way management expects to recover or settle the carrying of the relevant assets or liabilities, that is through use or through sale and introduces a rebuttable presumption that investment property which is measured at fair value is recovered entirely by sale. The amendment is not expected to have a material impact on the Group or Company’s financial statements. The Group and Company expect to adopt the amendment in the financial statements for the annual reporting period ending 31 March 2014.
3. Segment Information The chief operating decision maker assesses the performance of the operating segments based on a measure of adjusted earnings before interest, tax, depreciation and amortisation (EBITDA look through). This EBITDA “look through” measure excludes the non-controlling interest’s share of the subsidiaries EBITDA where applicable. Interest income and expenditure are not included in the result for each operating segment that is reviewed by the chief operating decision maker. Except as noted below, other information provided to the chief operating decision maker is measured in a manner consistent with that in the financial statements. The segment information provided to the chief operating decision maker for the reportable segments for the half year ended 30 September 2012 is as follows:
1 Includes Investments in subsidiaries, Rakon Financial Services Ltd, Rakon UK Holdings Ltd, Rakon Europe Limited. 2 Does not include foreign exchange gains or losses recognised directly in sales and costs of sales. 3 Excludes intercompany receivable balances eliminated on consolidation. 4 The measure of liabilities has been disclosed for each reportable segment as it is regularly provided to the chief operating decision-maker and excludes intercompany payable balances eliminated on consolidation. 5 Includes Investment in subsidiary Rakon Temex SAS. As at 30 September 2011 Rakon Temex SAS was amalgamated into Rakon France SAS. 6 Includes Investment in Rakon Crystal (Chengdu) Co Limited. 7Includes Rakon Limited’s 40% share of investment in Shenzhen Timemaker Crystal Technology Co, Limited, Chengdu Timemaker Crystal Technology Co, Limited and Shenzhen Taixaing Wafer Co, Limited 8 Includes Rakon Limited’s 49% share of investment in Centum Rakon India Private Limited
A reconciliation of adjusted EBITDA to (loss) before tax is provided as follows:
Breakdown of the revenue from all sources is as follows:
The Group’s trading revenue is derived in the following regions.
Revenue is allocated above based on the country in which the customer is located. 4. Operating expenses
Unaudited Six Months ended 30 September 2012 ($000s) Unaudited Six Months ended 30 September 2011 ($000s) Audited Year ended 31 March 2012 ($000s) Operating expense by function: Selling and marketing costs 8,453 8,012 15,459 Research and development 7,541 7,630 14,738 General and administration 13,244 11,440 28,808 29,238 27,082 59,005
5. Other (losses)/gains – net Unaudited Six Months ended 30 September 2012 ($000s) Unaudited Six Months ended 30 September 2011 ($000s) Audited Year ended 31 March 2012 ($000s) Loss on disposal of intangibles, plant and equipment (51) (20) 1,014 (51) (20) 1,014 Foreign exchange (losses)/gains – net Forward foreign exchange contracts - held for trading 476 215 205 - net foreign exchange gains - 636 - (Losses)/gains on revaluation of foreign denominated monetary assets and liabilities1 (954) (1,248) (626) (478) (397) (421) (529) (417) 593 1 Includes realised and unrealised (losses)/gains arising from accounts receivable and accounts payable. Hedge accounting is sought on the initial sale of goods and purchase of inventory, subsequent movements are recognised in trading foreign exchange. 6. Net Finance (costs)/income Unaudited Six Months ended 30 September 2012 ($000s) Unaudited Six Months ended 30 September 2011 ($000s) Audited Year ended 31 March 2012 ($000s) Financial income Interest income 59 143 222 Unwinding of discount on deferred settlement 28 - - 87 143 222
Financial expenses Interest expense on bank borrowings (967) (380) (1,729) Interest expense on other borrowings - (9) (13) Unwinding of discount on deferred settlement - (45) (25) (967) (434) (1,767) Net finance (costs) (880) (291) (1,545) 7. Income Taxes Current tax Current tax expense for the interim periods presented is the expected tax payable on the taxable income for the period, calculated as the estimated average annual effective income tax rate applied to the pre-tax income of the interim period. Deferred tax The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amounts of the assets and liabilities, using the estimated average annual effective income tax rate for the interim periods presented.
8. Share Capital
At 30 September 2012 the total authorised number of ordinary shares is 191,038,591 shares (31 March 2012 and 30 September 2011: 191,038,591): • 188,945,302, are fully paid shares (31 March 2012: 188,945,302, 30 September 2011: 188,868,455); • 743,289 unpaid ordinary shares were on issue and held in trust on behalf of participants in the Rakon Share Plan (31 March 2012: 743,289, 30 September 2011: 743,289); • 1,350,000 fully paid restricted ordinary shares were on issue and held in trust on behalf of participants in the Rakon Restricted Share Plan (31 March 2012: 1,350,000, 30 September 2011: 1,350,000); 9. Dividends The Directors reviewed the dividend policy and no dividend will be paid. 10. Capital expenditure
Unaudited Six Months Ended 30 September 2012 ($000s) Unaudited Six Months Ended 30 September 2011 ($000s) Audited Year Ended 31 March 2012 ($000s) Opening net book value 90,411 79,035 79,035 Additions 5,258 16,726 22,402 Disposals (10) (37) (587) Depreciation (5,645) (4,112) (8,018) Other movements (1,058) (274) (2,421) Closing net book value 88,956 91,338 90,411 Amounts committed to capital expenditure subsequent to the end of the interim period total $1,554,000 (31 March 2012: $112,000, 30 September 2011: $2,306,000). 11. Intangible assets
Goodwill ($000s) Patents ($000s) Software ($000s) Product development ($000) Assets under construction ($000) Total ($000s) At 30 September 2011 Cost 25,654 3,767 8,645 3,326 847 42,239 Accumulated amortisation - (1,740) (4,909) (313) - (6,962) Net book value 25,654 2,027 3,736 3,013 847 35,277
At 31 March 2012 Cost 24,826 3,701 6,347 3,612 274 38,760 Accumulated amortisation - (1,912) (4,970) (398) - (7,280) Net book value 24,826 1,789 1,377 3,214 274 31,480
At 30 September 2012 Cost 24,775 3,697 6,936 3,831 447 39,686 Accumulated amortisation - (2,072) (5,254) (615) - (7,941) Net book value 24,775 1,625 1,682 3,216 447 31,745
12. Impairment tests for goodwill Goodwill is allocated to the Group's cash generating units (CGUs) identified according to country of operation. A geographical-level summary of the goodwill allocation is presented below: Unaudited Six Months Ended 30 September 2012 ($000s) Unaudited Six Months Ended 30 September 2011 ($000s) Audited Year Ended 31 March 2012 ($000s) New Zealand 7,663 7,934 7,678 United Kingdom 15,070 15,605 15,101 France 510 528 511 India – OCXO products transferred from France 1,532 1,587 1,536 Goodwill recognised in Intangible assets 24,775 25,654 24,826 Goodwill recognised in Investment in associates – China (T’Maker) 10,134 10,283 10,182 Goodwill recognised in Investment in joint venture – India (Centum Rakon) 2,937 3,345 3,085
The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use post-tax cash flow projections based on financial budgets and models approved by the directors covering a four year period due to product life cycles and their pricing trends. The projections used in the model are based on industry forecast of continued significant growth in sales of wireless devices including smart phones and significant increases in the utilisation intensity of these devices. This growth is expected to translate into investment by operators into new network infrastructure to handle the increase in data traffic. Rakon’s projection is to both benefit from the industry trend and secure an increasing share in the market for both devices and infrastructure reflecting the quality of its product range, technology advantages, manufacturing competitiveness and diversity. The actual rate of growth may differ from the projections used. At 30 September 2012 goodwill was reviewed for indicators of impairment. The overall global economy has impacted on expected results for the CGUs during the six months under review. The economic conditions have resulted in lower than forecast investment in new network infrastructure equipment by operators and lower demand for consumer electronic products. This generally reduced the actual results below those expected for the CGUs. Despite these factors the New Zealand CGU improved revenue and earnings compared with the comparative period in the prior year and the preceding six month period. This was achieved due to the diverse mix of this business and was due to growth in sales of consumer wireless devices. This market has continued to grow in spite of the overall economic environment. Revenue and earnings from the United Kingdom CGU reduced when compared with the comparative period in the prior year and the preceding six month period due to the lower than forecast spending by operators on network infrastructure which is the prime market for the UK CGU. Revenue and earnings from the French CGU were lower than the comparative period in the prior year but improved on the preceding six month period. The improvement on the preceding six month period was due to increased market share which offset the impact of lower overall spending on network infrastructure. The reduction on the comparative period in the prior year was due to the timing of sales made for high reliability space and defence applications. Results for the India Associate CGU (Centum Rakon) were slightly above expectations and higher than the comparative period in the prior year and the preceding six month period due to improved margins and product mix. Results for the China Associate CGU (T’Maker) were lower than predicted due to slightly lower than forecast demand and tighter margins as a consequence of lower than forecast overall demand for general consumer electronic products. The outlook for this business is for continued growth driven by overall demand and improved margins due to improvement in manufacturing operations and yield. The Directors consider the overall assumptions for the four year period of increasing sales into smart wireless applications and network infrastructure continue to be appropriate and do not consider the results and events in the six month period under review indicate any impairment in the carrying value of goodwill at 30 September 2012. An impairment test will be performed at the year end.
13. Contingent liabilities The Group has contingent liabilities in respect of legal claims arising in the ordinary course of business. It is not anticipated that any material liabilities will arise from the contingent liabilities. 14. Subsequent events On 6th November 2012 Rakon announced plans to realign its global business. These plans include shifting some manufacturing activities from New Zealand to China and prioritising global project activities. Substantial cost savings will be generated as a result and there will be a loss of approximately 60 jobs in New Zealand plus a small number in other locations. No provision has been recorded in these financial results.
Other Information A. Dividends (NZX Listing Rules Appendix 1: 2.3(d)) Rakon Limited currently has adopted a policy that there will not be any dividend payments made for the foreseeable future and surplus funds will be retained in order to capitalise on immediate and future growth opportunities. B. Net Tangible Assets per Security (NZX Listing Rules Appendix 1: 2.3(f)) 30 September 2012 30 September 2011 Net tangible assets $000 157,247 166,441 Number of ordinary securities 000 191,038 191,038 Net tangible asset backing per ordinary security $ 0.82 0.87 C. Control gained and lost over Entities (NZX Listing Rules Appendix 1: 2.3(g)) Rakon Limited has acquired the following entities during the period: Nil D. Associates & Joint Ventures (NZX Listing Rules Appendix 1: 2.3(h)) Rakon Limited has the following associate entities and joint venture arrangements. Shareholding Centum Rakon India Private Limited 49% Shenzhen Timemaker Crystal Technology Co, Limited 40% Chengdu Timemaker Crystal Technology Co, Limited 40% Shenzhen Taixiang Wafer Co, Limited 40% The contribution of Centum Rakon India Private Limited to Rakon Limited’s profit from ordinary activities was a profit of $705,000. The contribution of Shenzhen Timemaker, Chengdu Timemaker and Taixiang to Rakon Limited’s profit from ordinary activities was a loss of $204,000.