Interim results for the six months ended 28
- Slides: 44
Interim results for the six months ended 28 February 2006
Outline of presentation n Strategy & objectives n Review of the period n Financial results n Operational review n Prospects n Medium-term goals n Questions
Strategy & objectives David Kneale
Strategy Specialist retail group … range + value + trust Focus on … health + beauty + entertainment + homewares Operating through multiple formats … to target different customer groups Organised to be … efficient & cost effective … focus on delivery
Strategy (continued) Barriers Priorities n Few measures n Clear targets n Shared accountabilities n Clear accountabilities n Complexity n Make business simpler n Lack of planning n Get the basics right
Medium-term goals n Delight our customers n Motivated & competent people n Improve ROE
Review of the period David Kneale
Review of the period n Satisfactory turnover growth n Clicks performance stabilising n Strong performance from other brands n Headline earnings up 8. 1% … business in transition
Review of the period (continued) n New leadership n New systems ■ Management information starting to flow ■ Business processes being adapted n New financial reporting ■ Implementation of IFRS ■ Accounting standards
Financial results Keith Warburton
Turnover R’m Feb 2006 Feb 2005 Clicks 2 463 2 296 7. 3 10. 0 Discom 541 491 10. 1 5. 7 Entertainment 418 353 18. 5 12. 2 35 33 5. 4 1. 6 4 2 57. 0 Total - Retail 3 461 3 175 9. 0 UPD 1 838 1 426 28. 9 The Body Shop Other Intragroup turnover Total group (301) 4 998 (223) 4 378 % same store change % change 34. 9 14. 2 9. 5
Gross profit margin Feb 2006 R’m Feb 2006 % Feb 2005 R’m Feb 2005 % Retail 973 28. 1 895 28. 2 UPD 60 3. 3 60 4. 2 Total 1 033 20. 7 955 21. 8 n Group margin down due to UPD n UPD margin down due to ethical mix n UPD margin no longer includes logistics fees under IFRS n Retail margin stable n Group surplus shrinkage provision of R 28 million included
Total income Feb 2006 R’m Feb 2005 R’m Increase % 1 088 994 9. 5 Gross profit 973 895 8. 7 Other revenue 115 99 16. 1 158 140 12. 5 Gross profit 60 60 (0. 7) Other revenue 98 80 22. 3 1 246 1 134 9. 8 Retail UPD Total
Operating expenditure Feb 2006 Feb 2005 % change Clicks 511 477 7. 1 Discom 133 118 11. 7 Entertainment 97 85 14. 6 The Body Shop 13 12 11. 5 UPD 105 100 5. 7 Shared services & other 160 133 20. 1 1 019 925 10. 1 R’m Total group
Operating expenditure (continued) Feb 2006 Feb 2005 % change 51 50 2. 7 Occupancy costs 155 148 4. 5 Employment costs 465 406 14. 3 Other operating costs 348 321 8. 6 1 019 925 10. 1 R’m Depreciation & amortisation Total group operating expenditure Increase in employment costs impacted by: n Payment to former director n Growth in EVA payments related to performance n Wage settlements over 9% n IFRS adjustments
Operating profit R’m Feb 2006 Feb 2005 % change 186 168 10. 6 Discom 30 20 51. 2 Entertainment 46 30 52. 2 The Body Shop 7 6 3. 2 UPD 53 41 29. 1 Shared services & other (67) (56) (18. 3) Group surplus shrinkage provision (28) Total operating profit 227 Clicks 209 8. 5
Impact of adjustments Profit after taxation R’m Share options Re-recognise trademarks Feb 2006 (2. 9) - Feb 2005 (2. 5) (3. 2) Aug 2005 (5. 4) (14. 0) Prior to August 2004 (9. 0) 260. 4 Inventory adjustment 2. 4 Irrecoverable debtors - - Leave pay & bonus 6. 8 9. 7 (0. 1) (13. 0) Onerous leases 1. 0 (3. 2) (2. 9) (10. 7) Other 2. 2 (5. 4) (3. 1) (1. 4) Total adjustments 9. 5 (4. 6) (25. 5) 87. 8 - (113. 4) (25. 1)
Inventory Turn (times)* Inventory (R’m) Feb 2006 Feb 2005 Clicks 6. 2 5. 8 744 769 Discom 4. 7 5. 0 217 197 Entertainment 5. 2 4. 9 151 135 The Body Shop 8. 7 7. 9 7 7 Other 4. 9 3. 9 1 1 Total Retail 5. 8 5. 6 1 120 1 109 12. 4 13. 1 277 (3) 6. 7 6. 5 1 394 UPD Intragroup inventory Total inventory * Inventory on weighted annualised turnover 232 (3) 1 338
Cash – utilisation R’m Cash from operations (pre dividends) Increase in accounts receivable Decrease in accounts payable Decrease/(increase) in inventory Shares issued Other cash inflow Fixed asset purchases Loan repayments Dividends paid Purchase of treasury shares Net decrease in cash Feb 2006 239 (279) (349) 46 39 (304) (64) (46) (63) (477) Feb 2005 197 (132) (172) (89) 47 6 (143) (73) (34) (75) (127) (452)
Distribution to shareholders n Cash distribution of 11. 2 cents n Distribution out of share premium ■ Earnings enhancing ■ Cash flow benefit
Financial priorities n Enhancing financial management ■ Including final shrinkage numbers n Tighter expense control n Cash flow generation ■ Continued stock reduction ■ Other working capital management … improving ROE
Operational review Michael Harvey & David Kneale
Clicks – category performance Feb 2006 Feb 2005 % change Healthcare 759 696 9. 1 Beauty 914 835 9. 5 Lifestyle & other 790 765 3. 3 2 463 2 296 7. 3 R’m
Clicks – store performance n 5. 9% increase in transactions to 32. 6 million n Attracting new customers ■ Pharmacy ■ Value-based promotions n Front shop baskets ■ Club. Card +1. 4% ■ Non-Club. Card +10. 5% Opportunity to convert new customers to Club. Card
Clicks – store performance (continued) Comparable store sales growth Stores with dispensaries 17. 2% Stores without dispensaries All stores 4. 6% 10. 0% n Stores with dispensaries ■ Front shop an additional 5% ■ Total store growth 17% n Load-up going to plan in existing stores … currently 100 dispensaries
Clicks – pharmacy focus areas n Volume growth ■ Club. Card holders (30% converted in 5 months) ■ OTC
Clicks – OTC merchandising
Clicks – OTC merchandising
Clicks – pharmacy focus areas n Volume growth ■ Club. Card holders (30% converted in 5 months) ■ OTC n Operating efficiency ■ Optimal staffing model, including clinics ■ Building future capacity – accredited training academy n Gross margin ■ Constructive relationship with Department of Health
Clicks – other priorities n Margin management ■ Product mix ■ Private label products (currently 13. 2% of sales)
Clicks – private label product
Clicks – other priorities n Margin management ■ Product mix ■ Private label products (currently 13. 2% of sales) n Stock management ■ Reducing stock levels ■ …. but focus on improving availability ■ Shrinkage …trend improving n Store standards & customer service … getting the basics right
Clicks - summary n Volume growth n 10 new stores n Consolidating pharmacy n Margin opportunities n Stock management n Empowering people … focus on delivery of strategy
Discom n Turnover - Lifestyle up 10. 7% - FMCG up 9. 0% n Performance highlights ■ Strong Christmas ■ Inland division n Operating margin up from 4. 1% to 5. 6% n Focus ■ Driving existing store sales ■ Stock management … continuing to realise potential
Entertainment n Turnover: DVD, gaming & lifestyle increased from 26% to 33% of sales n Operating margin up from 8. 6% to 11. 1% n Growth opportunities ■ Extending the offer – Virgin Mobile ■ Widening access – 3 pilot stores in rural areas ■ Building E-commerce capability – up 59% … broader entertainment strategy successful
The Body Shop n Turnover up 5. 7% n Comparable stores up 1. 6% n Operating margin 18. 8% n ‘Love Your Body’ loyalty programme launched n New make-up stands being rolled out n L’Oreal acquisition of Body Shop International not expected to impact local franchise … brand generating healthy returns
UPD n Turnover growth boosted by strong increase in ■ Sales to hospitals ■ Sales to Clicks n Margin impacted by higher volumes of ethical products n Expenses well-managed to 5. 7% of sales (2005: 7. 0%) n Operating margin maintained at 2. 9% n Prospects ■ Awarded contract by Medi. Clinic / Disamed ■ Lea Glen automation … driving volume & efficiency
Summary & outlook David Kneale
Prospects n Trading in line with expectations n 21 new stores anticipated by year end n Pharmacy rollout continues ■ Building volume ■ Improving operational efficiency ■ Pricing clarity n Improving working capital … increasing profitability
Medium-term goals n Delighting our customers ■ Building health & beauty authority ■ Building our entertainment proposition n Motivated & competent people ■ Strengthened HR function ■ Better performance management n Improving ROE ■ Higher operating profit ■ Better stock management ■ More efficient capital structure
Handout only slides
Interest Debt R‘m Average rate 191. 5 16. 3 (16. 9) (21. 9) 7. 2 (16. 9) (5. 8) (33. 8) (27. 7) Interest received 3. 8 1. 2 Net interest paid (30. 0) (26. 5) Structured rate debt Variable rate Total interest paid Feb 2006 R’m Feb 2005 R’m
Clicks – pharmacy stores Nonintegrated pharmacies Clicks stores with dispensaries Total Aug 2005 29 60 89 Closed / sold (9) - (9) Transferred (8) 8 - - 12 12 Feb 2006 12 80 92 Close / sell (3) - (3) Transfer (8) 8 - New - 21 21 Aug 2006 1 109 110 New
Retail – store footprint Aug 2005 Opened Clicks Closed Feb 2006 Committed new stores H 2 2006 286 13 (3) 296 10 29 - (17) 12 - Discom 179 10 (6) 183 5 Entertainment 139 7 (5) 141 6 27 2 (1) 28 - 3 - 663 32 663 21 Non-integrated pharmacies The Body Shop Style Studio Total (company owned stores only) (32) … continued growth strategy
- Degree works smccd
- Iron deficiency symptoms
- A polygon with six congruent sides and six congruent angles
- Double ended queue
- Facilitation skills ppt
- Single ended ac voltage gain
- Reggio emilia and open-ended materials
- Blind-ended crypts are found in the
- Open ended questions about the renaissance
- Open ended video games
- Lymphatic capillaries are thin-walled closed-ended tubes
- What ended reconstruction
- Difference between simple queue and circular queue
- Animal farm quotes about power
- "cayman closed ended fund"
- Double ended triangle floral arrangement
- The ming dynasty ended rule of china.
- Open ended questions for counseling
- Contoh open question dan close question
- Socratic seminar open ended questions examples
- Vus 7b when did the civil war officially begin?
- The zhou dynasty ended in
- Chemistry open ended questions with answers
- The sky is low answer key
- Open ended approach
- Openended questions
- What ended reconstruction
- Pin ended column
- Materi antrian struktur data
- The art of asking essential questions
- Projective testing
- Entry points differentiated instruction
- Thinking and working mathematically
- Questions for the cask of amontillado
- Pin ended column
- Double-ended priority queue
- Antigone final test
- A mob's illegal seizure and execution of a person.
- Short response questions
- Development that ended much development crossword
- Oedipus rex reading questions
- Min max heap
- Close ended question
- Close ended questions examples
- Summer has ended and we are not saved