5th Mar 2007 09:05
Dairy Farm International Hldgs Ld05 March 2007 To: Business Editor 5th March 2007 For immediate release The following announcement was today issued to a Regulatory Information Serviceapproved by the Financial Services Authority in the United Kingdom. DAIRY FARM INTERNATIONAL HOLDINGS LIMITED2006 PRELIMINARY ANNOUNCEMENT OF RESULTS Highlights • Underlying earnings per share up 10% • Good results in all major markets • Maxim's performing strongly • Full year dividend per share up 11% "Dairy Farm is in a strong financial position and operates retail businessesthat enjoy leading positions in their major markets. We shall continue to investand expand in all our current markets to take advantage of the expected growthin demand from Asian consumers." Simon Keswick, Chairman5th March 2007 Results+----------------------------------------------------------------------------+| Year ended 31st December | | 2006 2005 Change|| US$m US$m %|+----------------------------------------------------------------------------+|Sales ||- subsidiaries 5,175 4,749 +9||- including associates 6,010 5,539 +9|| | |Underlying profit attributable to 211 190 +11||shareholders || ||Underlying PBIT to sales 4.5% 4.7% -0.2%|+----------------------------------------------------------------------------+| USc USc %|+----------------------------------------------------------------------------+|Underlying earnings per share 15.70 14.23 +10|| ||Dividends per share 9.40 8.50 +11|+----------------------------------------------------------------------------+ The final dividend of USc6.80 per share will be payable on 16th May 2007,subject to approval at the Annual General Meeting to be held on 9th May 2007, toshareholders on the register of members at the close of business on 23rd March2007. The ex-dividend date will be on 21st March 2007, and the share registerswill be closed from 26th to 30th March 2007, inclusive. DAIRY FARM INTERNATIONAL HOLDINGS LIMITED PRELIMINARY ANNOUNCEMENT OF RESULTSFOR THE YEAR ENDED 31ST DECEMBER 2006 OVERVIEWDairy Farm celebrated its 120th anniversary in 2006 with another year of goodgrowth in sales and earnings. The investment the Group has made to develop itsbusinesses in major markets in Asia, assisted by generally favourable economicconditions, has continued to be rewarding. PERFORMANCESales, including 100% of those of associate companies, increased by 9% to US$6.0 billion in 2006. Underlying profit for the year rose by 11% to US$211 million as both the North Asia and South Asia regions achieved improved results. Underlying earnings per share were 10% higher at USc15.70. The inclusion of a non-trading gain of US$15 million in the prior year meant that the increase in net profit was 3%. The Group's financial position remains sound, with ample cashflow to fund its investment requirements and net cash of US$20 million at the end of2006. The Board is recommending a final dividend of USc6.80 per share, bringing thetotal dividend for 2006 to USc9.40 per share, 11% higher than 2005. OPERATIONSDairy Farm's strategy, which has been applied consistently in recent years, isto build leading retail businesses that meet the needs of Asia's growingconsumer markets. Dairy Farm now has 27 operations in nine countries acrossNorth Asia and South Asia. In North Asia, sales growth of 4% was achieved in 2006 and operating profit roseby 6%. All Hong Kong retail formats - Wellcome, 7-Eleven, Mannings, and IKEA -enjoyed improved operating results. At 7-Eleven in Southern China, salesincreased strongly and the level of overall loss was again reduced. In Taiwan, Wellcome maintained its profit despite poor consumer sentiment. IKEATaiwan made significant investments in two new large stores, including one inKaohsiung. While the associated pre-opening costs affected IKEA's overallresult, this expansion is providing broader market coverage and lays thefoundation for future growth. Hong Kong restaurant associate, Maxim's, produced a strong improvement inunderlying profit due in part to the excellent progress made by Genki Sushi,which was acquired early in 2006. Most of Maxim's other divisions achieved goodresults. In South Asia, the Group's businesses generally performed well with salesincreasing by 15%. The overall profit growth was, however, held back to 3% by aweak result from Giant hypermarkets in Singapore where the business was affectedby store pre-opening costs and provisions for closure costs for twounderperforming stores. Active expansion programmes are being pursued inMalaysia by Giant and Guardian, both of which enjoyed substantial increases insales and operating profit in 2006. Income from property ownership was reducedfollowing the sale and leaseback of most of Giant's property portfolio in late2005. While the trading results in Indonesia are showing improvement, levels ofoperating profitability remain inadequate. Nevertheless, the medium-termprospects for the market are attractive and the Group will continue to addstores in all its major formats. There was an encouraging growth in sales inIndia as nine supermarkets and eight health and beauty stores were added. TheIndian market is, however, becoming more competitive and experiencing asignificant increase in operating costs. The Group's development of new markets continues. It entered the Macau and Thaimarkets in 2005, and in 2006 began operations in Vietnam with the acquisition ofa small chain of supermarkets. In addition, a first site has been secured inBrunei for a hypermarket that will open in 2008. PROSPECTSIn conclusion, the Chairman, Simon Keswick said, "Dairy Farm is in a strongfinancial position and operates retail businesses that enjoy leading positionsin their major markets. We shall continue to invest and expand in all ourcurrent markets to take advantage of the expected growth in demand from Asian consumers." GROUP CHIEF EXECUTIVE'S REVIEW Dairy Farm made solid progress in 2006. We increased sales and earnings in ouroperations in North Asia, South Asia and Maxim's. At year end, we operated 27separate businesses across nine countries, and improved the earnings in themajority of these businesses. This was accomplished by remaining committed tothe strategy that has served us well in recent years. In summary, this strategyhas been to: •Focus exclusively on operating retail businesses in Asia; •Operate in multiple retail formats, where we have established expertise; •Build leading market positions in each country and format; and •Support these formats with efficient shared services. A number of important steps were taken in 2006 to continue the implementation ofthis strategy: •We opened six Giant hypermarkets in Malaysia, bringing our total to 28. These included three hypermarkets in East Malaysia, where Giant is becoming established as the region's leading retailer. We will continue to expand into this attractive market. Also in Malaysia, our Guardian business expanded, adding 57 stores to bring its total to 228 at year end. •We received a licence to operate a number of supermarkets in Vietnam on a wholly-owned basis, and completed the acquisition of the Citimart chain. This business comprises six stores, predominantly in Ho Chi Minh City, and two of these had been transferred to our operation by year end. •We opened the new ThreeSixty supermarket format in Hong Kong, offering shoppers an extensive range of natural and organic foods and associated products, many of which are exclusive to ThreeSixty. •We now have six 7-Eleven franchisees in China, following approval of the concept by the government. Many more are planned for the future. •In Singapore, we took control of the convenience stores managed by Shell. We converted five of these stores to the 7-Eleven banner by year end, and conversion of the remaining 60 stores will be completed by mid-2007. •In Brunei, construction of our first hypermarket commenced in January 2007. •Our associate company, Maxim's, completed the acquisition of a majority shareholding in the 18-outlet Genki Sushi chain early in 2006. This business has achieved strong growth in sales and profit. A further five stores were added during the year and there is scope for continued expansion. REGIONAL REVIEW NORTH ASIA Hong Kong Wellcome supermarkets recorded another year of sales and profit growth. Thenetwork was upgraded as eight new stores were opened and seven were closed. Inaddition, 25 refurbishments were completed. A new promotion was launched inconjunction with Octopus, Hong Kong's most widely used stored value card, toallow customers to accumulate points for redemption on future purchases. 7-Eleven added a net 82 stores to bring its total to 747 at year end. Of these,308 are operated by franchisees. Despite rising rental costs, the business againincreased sales and earnings, assisted by a number of popular promotionsincluding World Cup football and Hello Kitty. Mannings health and beauty stores performed well though also being affected byincreasing rents. Mannings' consistent commitment to superior service hasresulted in a loyal customer base that enables its continued success. IKEA reported improved sales, despite closing one small store in Tsuen Wan.Margins and sales improved at the remaining stores, particularly in the secondhalf, allowing the business to complete the year with satisfactory profit growthand good momentum. Maxim's enjoyed a very good year as most formats achieved substantialimprovements. Apart from the Genki Sushi acquisition, several new formatrestaurants were opened and the Starbucks chain expanded to 72 outlets in HongKong. Mainland China 7-Eleven convenience stores continued to expand in Guangdong Province. 284stores were in operation by the end of 2006, an increase of a net 43 stores forthe year. Following the previous year's entry into Dongguan and Zhuhai, in 2006we opened our first store in Foshan, and will continue to open stores in each ofthese cities. Mannings also expanded, but concentrated on continuing to refine its store modelto suit the local market. Maxim's expanded its bakery and related cake shop business in Guangdong, whileStarbucks added another 15 stores in Southern and Western China. Macau 7-Eleven, with 24 stores, and Mannings with four, continued their entry to thedynamic Macau market. We will continue to look for opportunities there. Taiwan Wellcome supermarkets achieved satisfactory results in a very difficult market.Consumer sentiment was negative and competition in the food sector was severe.Constant attention to cost control was the key to achieving an acceptable resultfor the year. A total of 18 stores were opened, including one Jasons superstore. IKEA opened a new large format store in Hsin Chuang in April and another inKaohsiung in November. This completes our initial expansion phase in Taiwan, andwe are now focussing on developing consumer awareness of the new stores,improving our operating efficiency, and increasing sales. Korea Olive Young increased its health and beauty store network to 34 and enjoyed goodsales growth. However, the business needs still greater scale to reachprofitability. Prospects for the joint venture remain attractive. SOUTH ASIA Singapore Cold Storage and Shop N Save supermarkets performed well in 2006, assisted by avery positive customer reaction to a number of stores that were upgraded. Wefinished the year with 80 stores. Giant hypermarkets had a difficult year, absorbing substantial costs associatedwith the planned closure of three stores. These changes, along with the openingof the Vivo City store in late 2006 and a new store in Tampines in the first half of2007, will position us for a much better performance in 2007. Guardian pharmacies performed well, with an emphasis on opening larger formatstores. 7-Eleven also achieved good growth, adding a net 30 stores including the firstof the converted stores located at Shell petrol stations. Malaysia Giant opened a net 15 stores for the year, of which six were hypermarkets. Giantis the leading supermarket/hypermarket chain in Malaysia, and has an activeprogramme of expansion in both peninsular and East Malaysia. Guardian pharmacies added a net 57 stores and had an excellent year. Rapidexpansion was accompanied by a continuation of the business's consistently highcustomer service standard and solid financial returns. Indonesia Hero supermarkets added a net four stores to finish the year with 99. Werecorded an improved result even though consumer spending was affected by risingfuel costs. Giant added a total of five hypermarkets, making a total chain of 17 stores, andrecorded improved profit as this business reaches economic scale. Guardian pharmacies and Starmart convenience stores also continued to expand,adding 33 and 16 stores respectively. Underlying performance was satisfactory. Thailand Guardian opened ten new stores, ending the year with 13 outlets in greaterBangkok. India Foodworld began an extensive refurbishment programme in 2006 that will continuethrough 2007. Retail competition has grown rapidly, with new entrants in thesupermarket sector pushing rental and other costs to significantly higherlevels. This is making profitability harder to achieve in the short-term, butthe market continues to hold good potential. Health and Glow showed good sales growth and its management team is continuingto search for new locations. With only 42 stores at year end, the business needsto grow to reach a fully economic scale, but shows good promise for the future. Vietnam We entered this market in mid-2006 through acquisition of the Citimartsupermarket chain, and are progressively taking over the stores. Vietnam hasgreat potential for expansion in the retail sector as the economy grows, providinginvestment regulations continue to ease. THE YEAR AHEAD We will again direct our efforts to expansion in the countries in which weoperate. We are fortunate to have leading positions in some of the fastest-developingmarkets in the world. Despite facing aggressive competition, we are confidentthat the strength of our businesses will allow us to continue to perform well inthe coming year and beyond. As always, our progress this year has been due inlarge part to the abilities and commitment of our people, who now number 64,000.I thank them sincerely for their hard work and for the success they have allowedus to achieve. Ronald J FlotoGroup Chief Executive5th March 2007 ----------------------------------------------------------------------------Dairy Farm International Holdings LimitedConsolidated Profit and Loss Accountfor the year ended 31st December 2006---------------------------------------------------------------------------- 2006 2005 US$m US$m---------------------------------------------------------------------------- Sales (note 2) 5,175.0 4,749.4Cost of sales (3,604.0) (3,334.9) -------- --------Gross margin 1,571.0 1,414.5Other operating income (note 3) 13.7 32.0Selling and distribution costs (1,155.2) (1,034.8)Administration and other operating expenses (195.7) (179.2) -------- --------Operating profit (note 2) 233.8 232.5 -------- --------Financing charges (23.0) (25.7)Financing income 17.0 16.3 -------- --------Net financing charges (6.0) (9.4) Share of results of associates and joint ventures (note 4) 27.7 28.5 -------- --------Profit before tax 255.5 251.6Tax (note 5) (44.5) (45.0) -------- --------Profit for the year 211.0 206.6 -------- -------- Attributable to:Shareholders of the Company 210.8 205.3Minority interests 0.2 1.3 -------- -------- 211.0 206.6 -------- ------------------------------------------------------------------------------------ USc USc---------------------------------------------------------------------------- Earnings per share (note 6)- basic 15.70 15.34- diluted 15.66 15.25 Underlying earnings per share (note 6)- basic 15.70 14.23- diluted 15.66 14.15----------------------------------------------------------------------------- ----------------------------------------------------------------------------Dairy Farm International Holdings LimitedConsolidated Balance Sheetat 31st December 2006---------------------------------------------------------------------------- 2006 2005 US$m US$m Net operating assetsIntangible assets 266.1 226.8Tangible assets 540.0 463.4Associates and joint ventures 113.9 106.6Deferred tax assets 9.4 7.0Other non-current assets 62.2 54.3 -------- -------- Non-current assets 991.6 858.1 -------- --------Stocks 472.1 423.8Debtors and prepayments 200.9 157.3Current tax assets 5.0 2.1Bank balances 456.5 389.1 -------- -------- 1,134.5 972.3Non-current assets classified as held for sale 0.5 2.2 -------- --------Current assets 1,135.0 974.5 -------- --------Creditors and accruals (1,219.6) (1,116.9)Current borrowings (47.0) (35.9)Current tax liabilities (33.7) (31.8) -------- -------- (1,300.3) (1,184.6) Liabilities directly associated with non-current assets classified as held for sale (0.1) (0.5) -------- --------Current liabilities (1,300.4) (1,185.1) -------- --------Net current liabilities (165.4) (210.6)Long-term borrowings (389.5) (352.1)Deferred tax liabilities (41.3) (34.9)Other non-current liabilities (67.1) (17.4) -------- -------- 328.3 243.1 -------- --------Total equityShare capital 74.7 74.5Share premium and capital reserves 27.8 26.1Revenue and other reserves 221.5 123.5 -------- --------Shareholders' funds (note 7) 324.0 224.1Minority interests 4.3 19.0 -------- -------- 328.3 243.1 ----------------------------------------------------------------------------Dairy Farm International Holdings LimitedConsolidated Statement of Recognized Income and Expensefor the year ended 31st December 2006---------------------------------------------------------------------------- 2006 2005 US$m US$m---------------------------------------------------------------------------- Surplus on revaluation of intangible assets - 3.0Net (deficit)/surplus on revaluation of properties (2.6) 7.6Net actuarial gains on defined benefit pension plans 11.7 3.0Net exchange translation differences 2.8 (8.7)(Losses)/gains on cash flow hedges (2.8) 5.0Tax on items taken directly to equity (1.9) (3.9) -------- -------- Net income recognized directly in equity 7.2 6.0Profit for the year 211.0 206.6 -------- --------Total recognized income and expense for the year 218.2 212.6 -------- -------- Attributable to: Shareholders of the Company 216.1 213.0Minority interests 2.1 (0.4) -------- -------- 218.2 212.6 -------- -------- Surplus on revaluation of intangible assets in 2005 represented the increase in fair value attributable to the Group's previously held interests in PT HeroSupermarket on the date it became a subsidiary. ---------------------------------------------------------------------------- Dairy Farm International Holdings LimitedConsolidated Cash Flow Statementfor the year ended 31st December 2006---------------------------------------------------------------------------- 2006 2005 US$m US$m---------------------------------------------------------------------------- Operating activities Operating profit (note 2) 233.8 232.5Depreciation and amortization 110.3 103.2Other non-cash items 10.3 (5.9)(Increase)/decrease in working capital (11.4) 40.3Interest received 15.7 15.8Interest and other financing charges paid (21.9) (25.6)Tax paid (45.8) (31.8) -------- -------- 291.0 328.5Dividends from associates and joint ventures 21.2 23.8 -------- --------Cash flows from operating activities 312.2 352.3 Investing activities Purchase of tangible assets (156.6) (112.2)Purchase of subsidiaries (note 10(a)) (0.3) (38.4)Store acquisitions (note 10 (b)) (17.3) (0.9)Purchase of associates and joint ventures (0.5) (3.0)Purchase of intangible assets (2.6) -Sale of subsidiaries (note 10(c)) 0.6 95.9Sale of properties (note 10 (d)) 8.0 37.0Sale of other tangible assets 0.9 1.3Sale of other investments - 2.3 -------- -------- Cash flows from investing activities (167.8) (18.0) Financing activities Issue of shares 1.1 1.4Capital contribution from minority shareholders 1.1 -Drawdown of borrowings 682.8 1,386.4Repayment of borrowings (651.4) (1,362.7) Dividends paid by the Company (note 9) (118.1) (435.3) -------- -------- Cash flows from financing activities (84.5) (410.2) Effect of exchange rate changes 3.8 (0.4) -------- -------- Net increase/(decrease) in cash and cash equivalents 63.7 (76.3) Cash and cash equivalents at 1st January 378.3 454.6 -------- -------- Cash and cash equivalents at 31st December 442.0 378.3 -------- ------------------------------------------------------------------------------------ ---------------------------------------------------------------------------- Dairy Farm International Holdings LimitedNotes---------------------------------------------------------------------------- 1. ACCOUNTING POLICIES AND BASIS OF PREPERATIONThe financial information contained in this announcement has been based on theaudited results for the year ended 31st December 2006 which have been preparedin conformity with International Financial Reporting Standards, includingInternational Accounting Standards and Interpretations adopted by theInternational Accounting Standards Board. In 2006, the Group adopted the following amendments and interpretation toexisting standards which are relevant to its operations: ---------------------------------------------------------------------------- IAS 21 (amended 2005), Net Investment in a Foreign OperationIAS 39 (amended 2005), Cash Flow Hedge Accounting of Forecast Intragroup TransactionsIAS 39 (amended 2005), The Fair Value OptionIAS 39 and IFRS 4 (amended 2005), Financial Guarantee ContractsIFRIC 4, Determining whether an Arrangement contains a Lease ---------------------------------------------------------------------------- There have been no changes to the accounting policies as a result of adoption of the above amendments and interpretation. The Group's reportable segments are set out in notes 2 and 4. Certain comparative figures have been reclassified to conform with the currentyear presentation. 2. SALES AND OPERATING PROFIT Sales Operating Profit ---------------------------------------------- 2006 2005 2006 2005 US$m US$m US$m US$m ---------------------------------------------- Analysis by geographical area: North Asia 2,822.2 2,709.7 140.4 132.5 South Asia 2,352.8 2,039.7 113.3 109.7 -------- ------- ------- ------- 5,175.0 4,749.4 253.7 242.2 -------- ------- Support office (18.3) (18.8) ------- ------- 235.4 223.4 Profit on sale of other investments (note 3) - 2.0 (Loss)/profit on sale of properties (note 10 (d)) (1.6) 11.1 Loss on sale of subsidiaries - (4.0) ------- ------- 233.8 232.5 ------- ------- Analysis by business: Supermarkets/hypermarkets 3,226.3 2,993.4 132.8 124.3 Health and beauty stores 792.3 728.3 65.1 56.6 Convenience stores 966.6 855.4 52.2 45.4 Home furnishings stores/other 189.8 172.3 3.6 15.9 -------- ------- ------- ------- 5,175.0 4,749.4 253.7 242.2 -------- ------- ------- ------- Dairy Farm operates in two regions: North Asia and South Asia, and accordingly,its primary segment reporting is by geographical areas with secondary segmentinformation reported by business. North Asia comprises Hong Kong, Mainland China,Macau, Taiwan and South Korea. South Asia comprises Singapore, Malaysia,Indonesia, India, Thailand and Vietnam. In 2005, a cost of US$3.3 million was included under support office in respectof restructuring of the joint ventures in India. 3. OTHER OPERATING INCOME 2006 2005 US$m US$m -------------------------------- Rental income 8.1 16.0 Compensation from landlord 1.8 - Profit on sale of properties in: - Singapore - 9.0 - Indonesia - 2.1 Profit on sale of other investments - 2.0 Exchange gain and others 3.8 2.9 -------- -------- 13.7 32.0 -------- -------- 4. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES 2006 2005 US$m US$m -------------------------------- Analysis by geographical area: North Asia 29.0 30.0 South Asia (1.3) (1.5) -------- -------- 27.7 28.5 -------- -------- Analysis by business: Restaurants 30.8 31.1 Retailing (3.1) (2.6) -------- -------- 27.7 28.5 -------- -------- Results are shown after tax and minority interests. In 2005, a reversal of impairment on land use rights of US$3.9 million wasincluded under North Asia and Restaurants. Retailing is predominantly supermarkets and health and beauty stores. 5. TAX 2006 2005 US$m US$m ---------------------------- Current 43.6 42.1 Deferred 0.9 2.9 -------- -------- 44.5 45.0 -------- -------- Tax on profits has been calculated at rates of taxation prevailing in theterritories in which the Group operates. The Group has no tax payable in theUnited Kingdom (2005: nil). 6. EARNINGS PER SHARE Basic earnings per share are calculated on profit attributable to shareholdersof US$210.8 million (2005: US$205.3 million) and on the weighted average numberof 1,342.9 million (2005: 1,338.2 million) shares in issue during the year. Theweighted average number excludes the shares held by the Trustee under the SeniorExecutive Share Incentive Schemes. Diluted earnings per share are calculated on profit attributable to shareholdersof US$210.8 million (2005: US$205.3 million), and on the weighted average numberof 1,346.3 million (2005: 1,345.8 million) shares in issue after adjusting for3.4 million (2005: 7.6 million) shares which are deemed to be issued for noconsideration under the Senior Executive Share Incentive Schemes based on theaverage share price during the year. There were no material non-trading items in 2006. Additional basic and dilutedearnings per share were calculated for 2005 based on underlying profitattributable to shareholders of US$190.4 million, and the reconciliation ofearnings is set out below: 2005 -------------------------------------- Basic Diluted earnings earnings per share per share US$m USc USc -------------------------------------- Underlying profit attributable to shareholders 190.4 14.23 14.15 Non-trading items: - reversal of impairment on properties 4.4 - profit on sale of investments 4.2 - profit on sale of properties 10.3 - loss on sale of subsidiaries (4.0) ------- 14.9 ------- Profit attributable to shareholders 205.3 15.34 15.25 ------- 7. SHAREHOLDERS' FUNDS 2006 2005 US$m US$m ----------------------- At 1st January 224.1 444.6 Recognized income and expense attributable to shareholders 216.1 213.0 Dividends (note 9) (118.1) (435.3) Employee share option schemes - value of employee services 0.8 0.4 - exercise of share options 1.1 1.4 -------- ------- At 31st December 324.0 224.1 -------- ------- 8. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES 2006 2005 US$m US$m -------------------- Capital commitments as at 31st December 91.7 98.0 ------- ------- Various Group companies are involved in litigation arising in the ordinary course of their respective businesses. Having reviewed outstanding claims and taking into account legal advice received, the Directors are of the opinion that adequate provisions have been made in the financial statements. 9. DIVIDENDS 2006 2005 US$m US$m -------------------- Final dividend in respect of 2005 of USc6.20 (2004: USc5.30) per share 83.2 70.8 Interim dividend in respect of 2006 of USc2.60 (2005: USc2.30) per share 34.9 30.8 ------- ------- 118.1 101.6 Special dividend of USc25.00 per share - 333.7 ------- ------- 118.1 435.3 ------- ------- A final dividend in respect of 2006 of USc6.80 (2005: USc6.20) per shareamounting to a total of US$91.4 million (2005: US$83.2 million) is proposed bythe Board. The dividend proposed will not be accounted for until it has beenapproved at the Annual General Meeting. This amount will be accounted for as anappropriation of revenue reserves in the year ending 31st December 2007. 10. NOTES TO CONSOLIDATED CASH FLOW STATEMENT 2005 -------- Fair value US$m -------- (a) Purchase of subsidiaries Intangible assets 27.3 Tangible assets 46.1 Deferred tax assets 5.3 Current assets 81.3 Current liabilities (76.7) Long-term borrowings (8.7) Deferred tax liabilities (8.2) Other non-current liabilities (9.1) Minority interests 7.1 -------- Net assets 64.4 Adjustment for minority interests (26.5) -------- Net assets acquired 37.9 Goodwill 31.4 -------- Total consideration 69.3 Adjustment for carrying value of an associate and deferred consideration (22.1) Adjustment to fair values relating to previously held interests (3.8) Cash and cash equivalents acquired (5.0) -------- 38.4 -------- In 2005, the Group increased its attributable interests in PT Hero Supermarketto 69.1% for a total cash consideration of US$43.3 million. 10. NOTES TO CONSOLIDATED CASH FLOW STATEMENT (continued) 2006 ------------------------------------- Book Fair value Fair amount adjustments Value 2005 US$m US$m US$m US$m ---------------------------------------------------- (b) Store acquisitions Tangible assets 8.0 (1.7) 6.3 0.6 Current assets 3.6 (0.9) 2.7 0.3 ------- --------- ------- ------- Fair value of operating assets acquired 11.6 (2.6) 9.0 0.9 ------- --------- Goodwill 8.3 - ------- ------- Total 17.3 0.9 consideration ------- ------- During the year, GCH Retail (Malaysia), a wholly-owned subsidiary, acquired thestore operating assets of three hypermarkets and seven supermarkets in Malaysiaat fair values from third parties for a total cash consideration of US$14.0million. During the year, Giant South Asia (Vietnam), a wholly-owned subsidiary, acquiredthe store operating assets of two supermarkets in Vietnam at fair values from athird party for a cash consideration of US$3.0 million. In 2005, GCH Retail (Malaysia), a wholly-owned subsidiary, acquired the storeoperating assets of two supermarkets in Malaysia at fair values from a thirdparty for a cash consideration of US$0.9 million. Sales and operating profit since acquisition amounted to US$14.9 million andUS$2.0 million respectively. If the acquisition had occurred on 1st January2006, Group sales and operating profit would have been US$5,204.5 million andUS$237.0 million respectively. 2005 US$m --------(c) Sale of subsidiaries Current assets disposed of 100.7 Loss on disposal (4.0) -------- Sale proceeds (net of expenses) 96.7 Adjustment for deferred consideration (0.8) -------- 95.9 -------- In 2005, the Group completed the sale of its 100% interest in HartanahProgresif, a property-owning subsidiary, to a third party for cash. 10. NOTES TO CONSOLIDATED CASH FLOW STATEMENT (continued) 2006 2005 US$m US$m ------------------- (d) Sale of properties Intangible assets 1.4 15.4 Tangible assets 0.4 4.7 Non-current assets classified as held for sale 7.8 5.8 -------- -------- Net book value of assets disposed of 9.6 25.9 (Loss)/profit on disposal (1.6) 11.1 -------- -------- Sale proceeds (net of expenses) 8.0 37.0 -------- -------- During the year, the Group disposed of eight properties in Indonesia for US$7.8million, and a property in Taiwan for US$0.2 million. The loss attributable tothe Group, after tax and minority interests, is US$0.4 million. In 2005, the Group disposed of 13 properties in Indonesia for US$9.6 million,and a shopping centre in Singapore for US$27.4 million. The profit attributableto the Group, after tax and minority interests, is US$10.3 million. The final dividend of USc6.80 per share will be payable on 16th May 2007,subject to approval at the Annual General Meeting to be held on 9th May 2007, toshareholders on the register of members at the close of business on 23rd March2007. The ex-dividend date will be on 21st March 2007, and the share registerswill be closed from 26th to 30th March 2007, inclusive. Shareholders willreceive their dividends in United States Dollars, unless they are registered onthe Jersey branch register where they will have the option to elect for Sterling.These shareholders may make new currency elections by notifying the UnitedKingdom transfer agent in writing by 27th April 2007. The Sterling equivalent ofdividends declared in United States Dollars will be calculated by reference to arate prevailing on 2nd May 2007. Shareholders holding their shares through TheCentral Depository (Pte) Limited ('CDP') in Singapore will receive United StatesDollars unless they elect, through CDP, to receive Singapore Dollars. -end- Dairy Farm Management Services LimitedRonald J Floto (852) 2299 1881Howard Mowlem (852) 2299 1896 email: [email protected] Matheson & Co., Limited Philip Hawkins (020) 7816 8136 email: [email protected] GolinHarrisJohn Morgan (852) 2501 7939 email: [email protected] Weber Shandwick Financial Richard Hews/ Helen Thomas (020) 7067 0700 email: [email protected] Full text of the Preliminary Announcement of Results and the PreliminaryFinancial Statements for the year ended 31st December 2006 can be accessedthrough the Internet at 'www.dairyfarmgroup.com.' This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Dfi Retail Intl