5th Mar 2009 09:05
|
To: Business Editor |
5th March 2009 |
|
For immediate release |
The following announcement was issued today to a Regulatory Information Service approved by the Financial Services Authority in the United Kingdom.
DAIRY FARM INTERNATIONAL HOLDINGS LIMITED
2008 PRELIMINARY ANNOUNCEMENT OF RESULTS
Highlights
|
▪ |
Underlying earnings per share up 24% |
|
▪ |
Good results in major markets |
|
▪ |
Low net debt and strong cash flow |
"While the immediate economic outlook remains uncertain, Dairy Farm's retail businesses have established leading positions in their market sectors and are generally trading well. With a secure financial base, we will continue to invest in the long-term growth of the Group."
Simon Keswick, Chairman
5th March 2009
Results
|
Year ended 31st December |
||||
|
2008 |
2007 |
Change |
||
|
US$m |
US$m |
% |
||
|
Sales |
||||
|
- subsidiaries |
6,733 |
5,887 |
+14 |
|
|
- including associates |
7,742 |
6,845 |
+13 |
|
|
Underlying profit attributable to shareholders |
320 |
258 |
+24 |
|
|
Non-trading items |
13 |
- |
n/a |
|
|
Profit attributable to shareholders |
333 |
258 |
+29 |
|
|
Underlying PBIT to sales |
5.5% |
4.7% |
||
|
US¢ |
US¢ |
% |
||
|
Underlying earnings per share |
23.77 |
19.19 |
+24 |
|
|
Basic earnings per share |
24.73 |
19.19 |
+29 |
|
|
Dividends per share |
14.00 |
11.50 |
+22 |
|
The final dividend of US¢10.00 per share will be payable on 13th May 2009, subject to approval at the Annual General Meeting to be held on 6th May 2009, to shareholders on the register of members at the close of business on 20th March 2009. The ex-dividend date will be on 18th March 2009, and the share registers will be closed from 23rd to 27th March 2009, inclusive.
DAIRY FARM INTERNATIONAL HOLDINGS LIMITED
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 31ST DECEMBER 2008
OVERVIEW
Dairy Farm achieved further good results in 2008, with growth in both sales and profit. Trading conditions were generally favourable in the Group's major markets in the first half of the year, although there were signs of some slowing in the second half as consumer sentiment was adversely affected by deteriorating global economic conditions.
PERFORMANCE
Sales, including 100% of associates, increased by 13% to US$7.7 billion in 2008. Underlying net profit for the year increased at a higher rate of 24% to US$320 million, while underlying earnings per share also rose by 24% to US¢23.77. Profit attributable to shareholders of US$333 million included non-trading gains of US$13 million arising from asset disposals.
Overall, the Group's financial position remains sound, with strong cash generation leading to the effective elimination of net gearing at the year end and ensuring that adequate funds are available for expansion. Capital expenditure during the year within the Group's businesses amounted to US$257 million.
The Board is recommending a final dividend of US¢10.00 per share, bringing the total ordinary dividends for 2008 to US¢14.00 per share, a 22% increase over the prior year.
CORPORATE DEVELOPMENTS
In March 2008, the Group exercised an option to acquire a further 25% interest in PT Hero in Indonesia for US$42 million. The Group opened the first Giant hypermarket in Brunei in March, and also acquired the small Guardian health and beauty chain to support its expansion in that territory. Early in the year, the Group disposed of its 50% interest in the Korean joint venture, CJ Olive Young, producing a profit of US$12 million.
Maxim's, the Group's 50%-owned catering associate, acquired the 53-store Arome cake and bakery chain in the first half, giving it a clear leadership position in this sector of the Hong Kong market.
OPERATIONS
The Group continued its strategy of building leading retail businesses that meet the needs of Asia's growing consumer markets. The consistent implementation of this strategy has seen operations expand to seven countries in up to six major formats. In 2008, these operations continued to make good progress, with 500 net new store openings across all formats. In larger format stores, Dairy Farm operated a total of 78 Giant hypermarkets at the year end, with 44 in Malaysia, 26 in Indonesia, seven in Singapore and one in Brunei.
The Group's operations in North Asia performed well as sales increased by 14% and profit by 26%. The Hong Kong businesses - Wellcome, Mannings, 7-Eleven and IKEA - each reported improved results, while there were increased contributions from 7-Eleven and Mannings in Macau. In Taiwan, Wellcome produced better profit in a highly competitive market as it continued to develop smaller-format fresh stores. IKEA Taiwan's underlying performance improved considerably over the prior year, although further progress is still required to reach an acceptable level of return.
In South Asia, the businesses increased sales by 19% and profit by 40%. Singapore's growth was led by the Cold Storage and Shop N Save supermarkets and by 7-Eleven, while Giant hypermarkets also performed better following a difficult year in 2007. Guardian, however, was hampered by a shortage of pharmacists.
In the Group's Indian joint ventures, Health and Glow pursued its measured pace of expansion, while Foodworld supermarkets maintained its scale of operations in a highly competitive trading environment.
In East Asia, sales grew by 12% and profit by 37%. All formats in Malaysia achieved another year of good results as expansion continued in both peninsular and East Malaysia. The development of two purpose-built distribution centres is under way to support this growth, with a dry goods centre in Sepang due for completion in mid-2009 and land acquired for a fresh produce centre.
The performance in Indonesia has improved significantly in all formats. Nine new Giant hypermarkets were opened during 2008, bringing the total to 26, and further expansion is planned in 2009. In Vietnam, the Group continued to operate three supermarkets as a base for a planned expansion when opportunities arise.
PROSPECTS
In conclusion, the Chairman, Simon Keswick said, "While the immediate economic outlook remains uncertain, Dairy Farm's retail businesses have established leading positions in their market sectors and are generally trading well. With a secure financial base, we will continue to invest in the long-term growth of the Group."
GROUP CHIEF EXECUTIVE'S REVIEW
Dairy Farm achieved another year of good progress in 2008. Our three operating regions - North Asia, South Asia and East Asia - each reported increases in sales and earnings. We have not departed from our prime strategy of focusing exclusively on retailing in Asia, but we have continued to experiment with new formats and with other initiatives to make our stores more attractive and efficient.
A number of important steps were taken in 2008 in pursuit of our strategy:
|
▪ |
We added a net 500 stores to reach a total of 4,649 by the year end. |
|
▪ |
In Malaysia, we added three Giant hypermarkets, bringing our total number of these stores to 44. Also in Malaysia, our Guardian business was able to expand significantly, adding 35 stores to bring its total to 323 at the year end. |
|
▪ |
In Indonesia, we increased our direct shareholding in PT Hero and completed the programme of converting half of the Hero stores to Giant supermarkets, allowing these stores to focus better on their customer segment. |
|
▪ |
The development of Mannings in China also proceeded well. We added 40 stores including the first outlets in Beijing, Shanghai, Nanjing and Chongqing, to complement our established store base in Guangdong Province. |
|
▪ |
We began operations in Brunei with the opening of our first Giant hypermarket, and also acquired and expanded the Guardian health and beauty chain. |
|
▪ |
Our 50%-owned associate, Maxim's, acquired industrial sites in Hong Kong and Shenzhen, Southern China, to expand the production of bakery and other items. |
|
▪ |
We increased significantly the resources dedicated to private label development, as well as to IT and supply chain management, to drive further benefits in these important areas. |
|
▪ |
Early in the year, we completed the disposal of our interest in the Olive Young joint venture in Korea. |
REGIONAL REVIEW
NORTH ASIA
Hong Kong
Wellcome continued its programme to establish a larger base of MarketPlace stores, featuring an expanded range of international goods. There were seven MarketPlace stores operating by the year end. The Wellcome store portfolio was upgraded with 11 new stores and the closure of three older stores. In addition, 20 major refurbishments were completed.
7-Eleven introduced a new format featuring an extended ready-to-eat section. This format will be used in future expansion and renovations whenever the store size permits.
Mannings' reputation for selling quality products was again demonstrated by the strong sales recorded when consumers reacted to heightened concerns over counterfeit or tainted products. Its consistent commitment to product quality and service has resulted in a loyal customer base that supports Mannings' continuing success.
IKEA suffered some disruption at the Shatin store in the second half as a result of partial re-location. Despite this, sales improved at all stores, although there was some weakening of demand later in the year.
Maxim's enjoyed a generally good start to 2008, despite facing increased ingredient costs, but a reduction in demand in the second half meant that their full-year earnings remained in line with the prior year.
Mainland China
7-Eleven continued its expansion of convenience stores in Guangdong Province, Southern China. The rate of growth slowed as greater emphasis was placed on improving operational and logistics standards, including the move to a new distribution centre. A total of 506 stores were in operation by the year end, representing a net increase of 66 stores for the year.
Mannings also expanded during the year with the addition of 40 stores, including the first 12 stores outside Guangdong Province.
Maxim's continued to invest in its bakery and cake shop business through the acquisition of a site in Shenzhen for a new production facility. Maxim's remains a minority shareholder in the Starbucks chain in Southern and Western China, which also increased its store numbers.
Taiwan
Wellcome supermarkets completed trials of a new smaller format supermarket model, resulting in a total of 61 of these stores in operation by the end of 2008.
IKEA achieved higher sales as the business continued to mature, although it still recorded a small loss for the year.
SOUTH ASIA
Singapore
Both Cold Storage and Shop N Save supermarkets benefited from store refurbishment programmes, which will continue in 2009. A total of 91 stores were operating at the year end.
Giant recovered from a disappointing performance in 2007 to record improved levels of turnover, although further progress is required to reach acceptable profitability.
7-Eleven added 20 stores and benefited from improved performances at the stores in Shell petrol stations. Guardian had a less satisfactory year, with the performance held back by relatively lacklustre sales and the continuing shortage of pharmacists.
India
The rapid expansion of new entrants in the Indian market continued to have an adverse effect on operating costs for Foodworld, where results deteriorated during the year. There are, however, signs that the cost and competitive pressures are now abating and that a more normal trading environment might prevail in 2009.
Health and Glow also had a difficult year, affected by rising costs. Despite this, encouraging sales increases were achieved in a competitive environment that was generally less aggressive than in the supermarket sector.
EAST ASIA
Malaysia
Giant expanded its hypermarket and supermarket businesses in both the major population centres and in secondary locations. In East Malaysia, three new stores were opened, while five stores were added in peninsular Malaysia. Guardian maintained its market leadership, growing to more than 320 stores by the year end.
Indonesia
The performances of all businesses under PT Hero improved in 2008. Giant added nine new hypermarkets, while its supermarkets benefited from the programme of selectively re-branding former Hero stores. Hero supermarkets also benefited from re-focusing as a premium chain. Both Guardian and Starmart made significant progress, adding 25 and 18 stores, respectively.
In Brunei, our Giant hypermarket has not yet reached planned sales level, but the newly acquired Guardian health and beauty business is expanding and achieving encouraging customer acceptance. In Vietnam, we are continuing our efforts to identify sites and gain regulatory approvals for expansion into larger format stores.
THE YEAR AHEAD
In 2009, we are once again concentrating efforts on the expansion of our retailing formats in existing markets. Major items of capital expenditure will include the purchase of land in Indonesia for the development of new hypermarkets, expansion in Vietnam, and investment in a new merchandising system for our supermarket and hypermarket businesses. In addition, we will continue to allocate substantial amounts to developing the Giant hypermarket business in Malaysia, and to refurbishing our supermarkets in Singapore and Hong Kong.
While the markets in which we operate are inevitably being affected by the turbulence in the world economy, we are fortunate to be in the business of providing everyday needs to the mass market. We will work hard in the year ahead to build on the leading positions we have established in each sector. Our successful record in recent years reflects in large part the commitment of our workforce, which numbers over 75,000 people. I thank them sincerely for their commitment and for the success they have achieved for the Company.
Michael Kok
Group Chief Executive
5th March 2009
|
Dairy Farm International Holdings Limited |
||||||||||
|
Consolidated Profit and Loss Account |
||||||||||
|
for the year ended 31st December 2008 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 |
2007 |
|||||||||
|
US$m |
US$m |
|||||||||
|
Sales (note 2) |
6,732.5 |
5,887.2 |
||||||||
|
Cost of sales |
(4,674.2) |
(4,095.7) |
||||||||
|
Gross margin |
2,058.3 |
1,791.5 |
||||||||
|
Other operating income (note 3) |
34.1 |
13.5 |
||||||||
|
Selling and distribution costs |
(1,475.4) |
(1,315.7) |
||||||||
|
Administration and other operating expenses |
(229.2) |
(213.2) |
||||||||
|
Operating profit (note 4) |
387.8 |
276.1 |
||||||||
|
Financing charges |
(23.9) |
(25.6) |
||||||||
|
Financing income |
9.8 |
22.8 |
||||||||
|
|
|
|||||||||
|
Net financing charges |
(14.1) |
(2.8) |
||||||||
|
Share of results of associates and joint ventures (note 5) |
30.2 |
29.4 |
||||||||
|
|
|
|||||||||
|
Profit before tax |
403.9 |
302.7 |
||||||||
|
Tax (note 6) |
(70.7) |
(45.6) |
||||||||
|
|
|
|||||||||
|
Profit after tax |
333.2 |
257.1 |
||||||||
|
|
|
|||||||||
|
Attributable to: |
||||||||||
|
Shareholders of the Company |
333.0 |
258.2 |
||||||||
|
Minority interests |
0.2 |
(1.1) |
||||||||
|
|
|
|||||||||
|
333.2 |
257.1 |
|||||||||
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
US¢ |
US¢ |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (note 7) |
||||||||||
|
- basic |
24.73 |
19.19 |
||||||||
|
- diluted |
24.71 |
19.17 |
||||||||
|
Underlying earnings per share (note 7) |
||||||||||
|
- basic |
23.77 |
19.19 |
||||||||
|
- diluted |
23.75 |
19.17 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Dairy Farm International Holdings Limited |
|||||||||||||
|
Consolidated Balance Sheet |
|||||||||||||
|
at 31st December 2008 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 |
2007 |
||||||||||||
|
US$m |
US$m |
||||||||||||
|
Net operating assets |
|||||||||||||
|
Intangible assets |
304.2 |
292.5 |
|||||||||||
|
Tangible assets |
636.9 |
603.8 |
|||||||||||
|
Associates and joint ventures |
128.7 |
120.3 |
|||||||||||
|
Other investments |
2.3 |
0.4 |
|||||||||||
|
Non-current debtors |
105.3 |
101.3 |
|||||||||||
|
Deferred tax assets |
18.0 |
14.4 |
|||||||||||
|
Pension assets |
8.8 |
72.5 |
|||||||||||
|
|
|
||||||||||||
|
Non-current assets |
1,204.2 |
1,205.2 |
|||||||||||
|
|
|||||||||||||
|
|
|
|
|
|
|
||||||||
|
Stocks |
|
649.0 |
|
|
545.6 |
|
|||||||
|
Current debtors |
|
120.6 |
|
|
106.2 |
|
|||||||
|
Current tax assets |
|
4.9 |
|
|
10.0 |
|
|||||||
|
Bank balances and other liquid funds |
|
462.9 |
|
|
395.9 |
|
|||||||
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
||||||||||
|
|
1,237.4 |
|
|
1,057.7 |
|
||||||||
|
Non-current assets classified as held for sale (note 9) |
|
65.2 |
|
|
39.8 |
|
|||||||
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
||||||||||
|
Current assets |
|
1,302.6 |
|
|
1,097.5 |
|
|||||||
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
||||||||||
|
Current creditors |
|
(1,537.9) |
|
|
(1,436.0) |
|
|||||||
|
Current borrowings |
|
(62.6) |
|
|
(40.0) |
|
|||||||
|
Current tax liabilities |
|
(65.0) |
|
|
(48.7) |
|
|||||||
|
Current provisions |
|
(2.0) |
|
|
(3.0) |
|
|||||||
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
||||||||||
|
Current liabilities |
|
(1,667.5) |
|
|
(1,527.7) |
|
|||||||
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
||||||||
|
Net current liabilities |
(364.9) |
(430.2) |
|||||||||||
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
||||||||||
|
Long-term borrowings |
|
(404.5) |
|
|
(439.1) |
|
|||||||
|
Deferred tax liabilities |
|
(36.6) |
|
|
(43.7) |
|
|||||||
|
Pension liabilities |
|
(27.0) |
|
|
(24.1) |
|
|||||||
|
Non-current creditors |
|
(20.7) |
|
|
(10.9) |
|
|||||||
|
Non-current provisions |
|
(17.0) |
|
|
(16.1) |
|
|||||||
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
||||||||
|
Non-current liabilities |
(505.8) |
(533.9) |
|||||||||||
|
|
|
||||||||||||
|
333.5 |
241.1 |
||||||||||||
|
|
|
||||||||||||
|
Total equity |
|||||||||||||
|
Share capital |
74.8 |
74.8 |
|||||||||||
|
Share premium and capital reserves |
32.6 |
30.3 |
|||||||||||
|
Revenue and other reserves |
223.5 |
133.0 |
|||||||||||
|
|
|
||||||||||||
|
Shareholders' funds (note 10) |
330.9 |
238.1 |
|||||||||||
|
Minority interests |
2.6 |
3.0 |
|||||||||||
|
|
|
||||||||||||
|
333.5 |
241.1 |
||||||||||||
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dairy Farm International Holdings Limited |
|||||||||||
|
Consolidated Statement of Recognized Income and Expense |
|||||||||||
|
for the year ended 31st December 2008 |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 |
2007 |
||||||||||
|
US$m |
US$m |
||||||||||
|
Net actuarial (losses)/gains on defined benefit pension plans |
(69.5) |
12.1 |
|||||||||
|
Net exchange translation differences |
(14.3) |
(13.8) |
|||||||||
|
Gains on revaluation of other investments |
2.2 |
- |
|||||||||
|
(Losses)/gains on cash flow hedges |
(3.0) |
0.3 |
|||||||||
|
Tax on items taken directly to equity |
11.9 |
(0.8) |
|||||||||
|
|
|
||||||||||
|
Net expense recognized directly in equity |
(72.7) |
(2.2) |
|||||||||
|
Transfer to profit and loss on disposal of other investments |
(0.2) |
- |
|||||||||
|
Transfer to profit and loss on realization of exchange reserves |
(2.0) |
2.4 |
|||||||||
|
Profit after tax |
333.2 |
257.1 |
|||||||||
|
|
|
||||||||||
|
Total recognized income and expense for the year |
258.3 |
257.3 |
|||||||||
|
|
|
||||||||||
|
Attributable to: |
|||||||||||
|
Shareholders of the Company |
258.8 |
258.6 |
|||||||||
|
Minority interests |
(0.5) |
(1.3) |
|||||||||
|
|
|
||||||||||
|
258.3 |
257.3 |
||||||||||
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dairy Farm International Holdings Limited |
||||||||||||
|
Consolidated Cash Flow Statement |
||||||||||||
|
for the year ended 31st December 2008 |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 |
2007 |
|||||||||||
|
US$m |
US$m |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities |
||||||||||||
|
|
|
|
|
|
|
|||||||
|
Operating profit (note 4) |
|
387.8 |
|
|
276.1 |
|
||||||
|
Depreciation and amortization |
|
136.4 |
|
|
123.3 |
|
||||||
|
Other non-cash items |
|
(2.5) |
|
|
10.2 |
|
||||||
|
Decrease in working capital |
|
36.9 |
|
|
84.0 |
|
||||||
|
Interest received |
|
10.8 |
|
|
20.5 |
|
||||||
|
Interest and other financing charges paid |
|
(23.8) |
|
|
(25.4) |
|
||||||
|
Tax paid |
|
(47.5) |
|
|
(40.8) |
|
||||||
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|||||||||
|
|
498.1 |
|
|
447.9 |
|
|||||||
|
Dividends from associates and joint ventures |
|
25.1 |
|
|
25.6 |
|
||||||
|
|
|
|
|
|
|
|||||||
|
Cash flows from operating activities |
523.2 |
473.5 |
||||||||||
|
Investing activities |
||||||||||||
|
|
|
|
|
|
|
|||||||
|
Purchase of tangible assets |
|
(215.6) |
|
|
(186.0) |
|
||||||
|
Purchase of subsidiaries (note 12(a)) |
|
(42.0) |
|
|
(3.6) |
|
||||||
|
Store acquisitions (note 12(b)) |
|
(2.6) |
|
|
(0.9) |
|
||||||
|
Purchase of associates and joint ventures |
|
(6.6) |
|
|
(9.2) |
|
||||||
|
Purchase of land use rights (note 12(c)) |
|
(33.7) |
|
|
(21.6) |
|
||||||
|
Purchase of other intangible assets |
|
(7.9) |
|
|
(1.5) |
|
||||||
|
Sale of associates and joint ventures (note 12(d)) |
|
20.5 |
|
|
- |
|
||||||
|
Sale of other investments (note 12(e)) |
|
1.0 |
|
|
- |
|
||||||
|
Sale of other tangible assets |
|
1.0 |
|
|
1.1 |
|
||||||
|
Sale of properties (note 12(f)) |
|
- |
|
|
4.4 |
|
||||||
|
|
|
|
|
|
|
|||||||
|
Cash flows from investing activities |
(285.9) |
(217.3) |
||||||||||
|
Financing activities |
||||||||||||
|
|
|
|
|
|
|
|||||||
|
Issue of shares |
|
0.4 |
|
|
1.0 |
|
||||||
|
Drawdown of borrowings |
|
991.0 |
|
|
934.6 |
|
||||||
|
Repayment of borrowings |
|
(990.3) |
|
|
(903.1) |
|
||||||
|
Dividends paid by the Company (note 11) |
|
(168.3) |
|
|
(347.1) |
|
||||||
|
|
|
|
|
|
|
|||||||
|
Cash flows from financing activities |
(167.2) |
(314.6) |
||||||||||
|
Effect of exchange rate changes |
(1.7) |
1.2 |
||||||||||
|
|
|
|||||||||||
|
Net increase/(decrease) in cash and cash equivalents |
68.4 |
(57.2) |
||||||||||
|
Cash and cash equivalents at 1st January |
384.8 |
442.0 |
||||||||||
|
|
|
|||||||||||
|
Cash and cash equivalents at 31st December |
453.2 |
384.8 |
||||||||||
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dairy Farm International Holdings Limited |
|||||||||||||
|
Notes |
|||||||||||||
|
1. |
ACCOUNTING POLICIES AND BASIS OF PREPARATION |
||||||||||||
|
The financial information contained in this announcement has been based on the audited results for the year ended 31st December 2008 which have been prepared in conformity with International Financial Reporting Standards, including International Accounting Standards and Interpretations adopted by the International Accounting Standards Board. |
|||||||||||||
|
In 2008, the Group adopted the following interpretations to existing standards which are relevant to its operations: |
|||||||||||||
|
IFRIC 11, IFRIC 2 - |
Group and Treasury Share Transactions |
||||||||||||
|
IFRIC 14, IAS 19 - |
The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction |
||||||||||||
|
There have been no changes to the accounting policies described in the 2008 annual financial statements as a result of adoption of the above interpretations. |
|||||||||||||
|
Certain comparative figures have been reclassified to conform with the current year presentation. |
|||||||||||||
|
The Group's reportable segments are set out in notes 2, 4 and 5. |
|||||||||||||
|
2. |
SALES |
||||||||||||
|
Including associates |
|||||||||||||
|
and joint ventures |
Subsidiaries only |
||||||||||||
|
|
|
|
|
|
|
||||||||
|
2008 |
2007 |
2008 |
2007 |
||||||||||
|
US$m |
US$m |
US$m |
US$m |
||||||||||
|
|
|
|
|
|
|
||||||||
|
Analysis by geographical area of operation: |
|||||||||||||
|
North Asia |
4,453.7 |
3,975.7 |
3,502.8 |
3,081.9 |
|||||||||
|
East Asia |
1,892.9 |
1,684.9 |
1,892.9 |
1,684.9 |
|||||||||
|
South Asia |
1,395.0 |
1,184.7 |
1,336.8 |
1,120.4 |
|||||||||
|
|
|
|
|
||||||||||
|
7,741.6 |
6,845.3 |
6,732.5 |
5,887.2 |
||||||||||
|
Analysis by business: |
|||||||||||||
|
Supermarkets/hypermarkets |
4,190.8 |
3,696.3 |
4,151.7 |
3,651.1 |
|||||||||
|
Health and beauty stores |
1,077.1 |
965.0 |
1,058.0 |
891.0 |
|||||||||
|
Convenience stores |
1,261.8 |
1,111.1 |
1,261.8 |
1,111.1 |
|||||||||
|
Home furnishings stores |
261.0 |
234.0 |
261.0 |
234.0 |
|||||||||
|
Restaurants |
950.9 |
838.9 |
- |
- |
|||||||||
|
|
|
|
|
||||||||||
|
7,741.6 |
6,845.3 |
6,732.5 |
5,887.2 |
||||||||||
|
Dairy Farm operates in three regions: North Asia, East Asia and South Asia, and accordingly, its primary segment reporting is by geographical areas with secondary segment information reported by business. North Asia comprises Hong Kong, Mainland China, Macau, Taiwan and South Korea. East Asia comprises Malaysia, Indonesia, Vietnam and Brunei. South Asia comprises Singapore, India and Thailand. |
|||||||||||||
|
3. |
OTHER OPERATING INCOME |
||||||||
|
2008 |
2007 |
||||||||
|
US$m |
US$m |
||||||||
|
Exchange gain and others |
6.5 |
4.8 |
|||||||
|
Rental income |
12.5 |
8.7 |
|||||||
|
Gain on sale of associates and joint ventures |
14.2 |
- |
|||||||
|
Gain on sale of other investments |
0.9 |
- |
|||||||
|
|
|
||||||||
|
34.1 |
13.5 |
||||||||
|
|
|
||||||||
|
4. |
OPERATING PROFIT |
||||||||
|
2008 |
2007 |
||||||||
|
US$m |
US$m |
||||||||
|
|
|
|
|
||||||
|
Analysis by geographical area of operation: |
|||||||||
|
North Asia |
205.3 |
162.4 |
|||||||
|
East Asia |
111.8 |
81.8 |
|||||||
|
South Asia |
79.0 |
56.6 |
|||||||
|
|
|
||||||||
|
396.1 |
300.8 |
||||||||
|
Support office |
(23.4) |
(24.7) |
|||||||
|
|
|
||||||||
|
372.7 |
276.1 |
||||||||
|
Non-trading items in North Asia: |
|||||||||
|
- Gain on sale of associates and joint ventures |
14.2 |
- |
|||||||
|
- Gain on sale of other investments |
0.9 |
- |
|||||||
|
|
|
||||||||
|
387.8 |
276.1 |
||||||||
|
|
|
||||||||
|
Analysis by business: |
|||||||||
|
Supermarkets/hypermarkets |
209.2 |
155.7 |
|||||||
|
Health and beauty stores |
94.1 |
73.5 |
|||||||
|
Convenience stores |
70.2 |
59.5 |
|||||||
|
Home furnishings stores/property |
22.6 |
12.1 |
|||||||
|
|
|
||||||||
|
396.1 |
300.8 |
||||||||
|
|
|
||||||||
|
5. |
SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES |
||||||||
|
2008 |
2007 |
||||||||
|
US$m |
US$m |
||||||||
|
Analysis by geographical area of operation: |
|||||||||
|
North Asia |
34.7 |
33.4 |
|||||||
|
South Asia |
(4.5) |
(4.0) |
|||||||
|
|
|
||||||||
|
30.2 |
29.4 |
||||||||
|
|
|
||||||||
|
Analysis by business: |
|||||||||
|
Restaurants |
34.7 |
34.4 |
|||||||
|
Supermarkets |
(3.9) |
(3.5) |
|||||||
|
Health and beauty stores |
(0.6) |
(1.5) |
|||||||
|
|
|
||||||||
|
30.2 |
29.4 |
||||||||
|
|
|
||||||||
|
Results are shown after tax and minority interests in the associates and joint ventures. |
|||||||||
|
6.
|
TAX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
|
US$m
|
|
US$m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
70.1
|
|
49.6
|
|
|
|
Deferred
|
|
|
|
0.6
|
|
(4.0)
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70.7
|
|
45.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax on profits has been calculated at rates of taxation prevailing in the territories in which the Group operates. The increase is caused by changes in the profitability of the Group subsidiaries in the respective countries. Share of tax of associates and joint ventures of US$7.7 million (2007: US$8.2 million) is included in share of results of associates and joint ventures.The Group has no tax payable in the United Kingdom (2007: nil).
|
||||||||
|
7. |
EARNINGS PER SHARE |
|||||||||||||||||||||||||
|
Basic earnings per share are calculated on profit attributable to shareholders of US$333.0 million (2007: US$258.2 million), and on the weighted average number of 1,346.4 million (2007: 1,345.3 million) shares in issue during the year. The weighted average number excludes the shares held by the Trustee under the Senior Executive Share Incentive Schemes. |
||||||||||||||||||||||||||
|
Diluted earnings per share are calculated on profit attributable to shareholders of US$333.0 million (2007: US$258.2 million), and on the weighted average number of 1,347.7 million (2007: 1,347.0 million) shares in issue after adjusting for 1.3 million (2007: 1.7 million) shares which are deemed to be issued for no consideration under the Senior Executive Share Incentive Schemes based on the average share price during the year. |
||||||||||||||||||||||||||
|
Additional basic and diluted earnings per share are also calculated for the year ended 31st December 2008 based on underlying profit attributable to shareholdersof US$320.1 million. A reconciliation of earnings is set out below: |
||||||||||||||||||||||||||
|
Basic earnings |
Diluted earnings |
|||||||||||||||||||||||||
|
per share |
per share |
|||||||||||||||||||||||||
|
US$m |
US¢ |
US¢ |
||||||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||||||||
|
Profit attributable to shareholders |
333.0 |
24.73 |
24.71 |
|||||||||||||||||||||||
|
Non-trading items (note 8) |
(12.9) |
|||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||
|
Underlying profit attributable to |
||||||||||||||||||||||||||
|
shareholders |
320.1 |
23.77 |
23.75 |
|||||||||||||||||||||||
|
|
||||||||||||||||||||||||||
|
There were no non-trading items for the year ended 31st December 2007. |
||||||||||||||||||||||||||
|
8. |
NON-TRADING ITEMS |
|||||||||||||||||||||||||
|
Non-trading items are separately identified to provide greater understanding of the Group's underlying business performance. Items classified as non-trading items include gains and losses arising from the sale of businesses, investments and properties; impairment of non-depreciable intangible assets and other investments; provisions for the closure of businesses; and other credits and charges of a non-recurring nature that require inclusion in order to provide additional insight into underlying business performance. |
||||||||||||||||||||||||||
|
An analysis of non-trading items after interest, tax and minority interests for the year ended 31st December 2008 (2007: nil) is set out below: |
||||||||||||||||||||||||||
|
US$m |
||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||
|
Sale of 50% shareholding in CJ Olive Young |
12.2 |
|||||||||||||||||||||||||
|
Sale of other investments |
0.7 |
|||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||
|
12.9 |
||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||
|
9. |
NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE |
|||||||||||||||||||||||||
|
The major classes of assets and liabilities classified as held for sale are set out below: |
||||||||||||||||||||||||||
|
2008 |
2007 |
|||||||||||||||||||||||||
|
US$m |
US$m |
|||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||
|
Intangible assets - land use rights |
15.1 |
- |
||||||||||||||||||||||||
|
Tangible assets |
50.1 |
32.5 |
||||||||||||||||||||||||
|
Associates and joint ventures |
- |
7.3 |
||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||
|
Total assets |
65.2 |
39.8 |
||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||
|
At 31st December 2008, the non-current assets classified as held for sale represented two retail properties in Malaysia. At 31st December 2007, the balancerepresented a retail property in Malaysia with a carrying value of US$32.5 million and a 50% interest in CJ Olive Young with a carrying value of US$7.3 million. The sale of CJ Olive Young was completed in February 2008. |
||||||||||||||||||||||||||
|
10. |
SHAREHOLDERS' FUNDS |
||||||||||||||||||
|
2008 |
2007 |
||||||||||||||||||
|
US$m |
US$m |
||||||||||||||||||
|
|
|
||||||||||||||||||
|
|
|
||||||||||||||||||
|
At 1st January |
238.1 |
324.0 |
|||||||||||||||||
|
Recognized income and expense attributable to shareholders |
258.8 |
258.6 |
|||||||||||||||||
|
Dividends (note 11) |
(168.3) |
(347.1) |
|||||||||||||||||
|
Employee share option schemes |
|||||||||||||||||||
|
- value of employee services |
1.9 |
1.6 |
|||||||||||||||||
|
- exercise of share options |
0.4 |
1.0 |
|||||||||||||||||
|
|
|
||||||||||||||||||
|
At 31st December |
330.9 |
238.1 |
|||||||||||||||||
|
|
|
||||||||||||||||||
|
11. |
DIVIDENDS |
||||||||||||||||||
|
2008 |
2007 |
||||||||||||||||||
|
US$m |
US$m |
||||||||||||||||||
|
|
|
|
|
||||||||||||||||
|
Final dividend in respect of 2007 of US¢8.50 |
|||||||||||||||||||
|
(2006: US¢6.80) per share |
114.4 |
91.4 |
|||||||||||||||||
|
Interim dividend in respect of 2008 of US¢4.00 |
|||||||||||||||||||
|
(2007: US¢3.00) per share |
53.9 |
40.4 |
|||||||||||||||||
|
|
|
||||||||||||||||||
|
168.3 |
131.8 |
||||||||||||||||||
|
Special dividend of US¢16.00 per share |
- |
215.3 |
|||||||||||||||||
|
|
|
||||||||||||||||||
|
168.3 |
347.1 |
||||||||||||||||||
|
|
|
||||||||||||||||||
|
A final dividend in respect of 2008 of US¢10.00 (2007: US¢8.50) per share amounting to a total of US$134.7 million (2007: US$114.4 million) is proposed by the Board. The dividend proposed will not be accounted for until it has been approved at the Annual General Meeting. This amount will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2009. |
|||||||||||||||||||
|
12. |
NOTES TO CONSOLIDATED CASH FLOW STATEMENT |
||||||||||||||||||
|
(a) |
Purchase of subsidiaries |
||||||||||||||||||
|
In April 2008, the Group paid US$42.0 million in cash under a put option agreement to settle an acquisition of 25.2% interests in PT Hero Supermarket from minority shareholders. |
|||||||||||||||||||
|
In March 2007, the Group's subsidiary, Guangdong Sai Yi Convenience Stores, acquired a 100% interest in Guangzhou Lianhua Quik Convenience Co from a third party for a total cash consideration of US$3.6 million. The fair value of net liabilities assumed was as follows: |
|||||||||||||||||||
|
2007 |
|||||||||||||||||||
|
US$m |
|||||||||||||||||||
|
Tangible assets |
0.9 |
||||||||||||||||||
|
Current assets |
1.7 |
||||||||||||||||||
|
Current liabilities |
(3.1) |
||||||||||||||||||
|
Net liabilities assumed |
(0.5) |
||||||||||||||||||
|
Goodwill |
4.2 |
||||||||||||||||||
|
Total consideration |
3.7 |
||||||||||||||||||
|
Cash and cash equivalents acquired |
(0.1) |
||||||||||||||||||
|
3.6 |
|||||||||||||||||||
|
2008 |
2007 |
|||||||||
|
|
|
|
|
|||||||
|
|
|
|||||||||
|
Book |
Fair value |
Fair |
Fair |
|||||||
|
Value |
Adjustments |
Value |
Value |
|||||||
|
US$m |
US$m |
US$m |
US$m |
|||||||
|
|
|
|
|
|||||||
|
|
|
|||||||||
|
(b) |
Store acquisitions |
|||||||||
|
Tangible assets |
0.2 |
- |
0.2 |
(0.9) |
||||||
|
Current assets |
0.9 |
(0.1) |
0.8 |
1.4 |
||||||
|
|
|
|
|
|||||||
|
|
||||||||||
|
Fair value of operating assets |
||||||||||
|
acquired |
1.1 |
(0.1) |
1.0 |
0.5 |
||||||
|
Goodwill |
1.6 |
0.4 |
||||||||
|
|
|
|||||||||
|
Total consideration |
2.6 |
0.9 |
||||||||
In 2008, Giant TMC (B), a wholly-owned subsidiary, acquired the store operating assets of seven Guardian stores in Brunei for a total cash consideration of US$2.6 million.
In 2007, Giant South Asia (Vietnam), a wholly-owned subsidiary, acquired the store operating assets of two supermarkets in Vietnam at fair value from a third party for a cash consideration of US$0.9 million. A reclassification between tangible assets and current assets of US$2.7 million has been taken into account in 2007.
Sales and operating loss since acquisition inrespect of stores acquired during the year amounted to US$3.4 million and US$0.5 million respectively. If the acquisition had occurred on 1st January 2008, Group sales and operating profit would have been US$6,733.1 million and US$387.9 million respectively.
|
(c) |
Purchase of land use rights |
||||||
|
Purchases of land use rights in 2008 and 2007 related to leasehold land for distribution centres and hypermarket developments in Malaysia. |
|||||||
|
(d) |
Sale of associates and joint ventures |
||||||
|
In February 2008, the Group completed the sale of its 50% shareholding in CJ Olive Young to its partner, CJ Corp, for a cash consideration of US$20.5 million. |
|||||||
|
(e) |
Sale of other investments |
||||||
|
In 2008, the Group disposed of several recreational club debentures to third parties for a net cash consideration of US$1.0 million. |
|||||||
|
(f) |
Sale of properties |
||||||
|
In 2007, the Group disposed of four properties in Indonesia for US$4.4 million and generated an operating profit of US$0.3 million. The profit attributable to the Group, after tax and minority interests, is US$0.4 million. |
|||||||
|
13. |
CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES |
|||||||
|
2008 |
2007 |
|||||||
|
US$m |
US$m |
|||||||
|
|
|
|||||||
|
Capital commitments |
212.3 |
134.5 |
||||||
|
|
|
|||||||
|
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. |
||||||||
The final dividend of US¢10.00 per share will be payable on 13th May 2009, subject to approval at the Annual General Meeting to be held on 6th May 2009, to shareholders on the register of members at the close of business on 20th March 2009. The ex-dividend date will be on 18th March 2009, and the share registers will be closed from 23rd to 27th March 2009, inclusive. Shareholders will receive their dividends in United States Dollars, unless they are registered on the Jersey branch register where they will have the option to elect for sterling. These shareholders may make new currency elections for the 2008 final dividend by notifying the United Kingdom transfer agent in writing by 24th April 2009.The sterling equivalent of dividends declared in United States Dollars will be calculated by reference to a rate prevailing on 29th April 2009. Shareholders holding their shares through The Central Depository (Pte) Limited ('CDP') in Singapore will receive United States Dollars unless they elect, through CDP, to receive Singapore Dollars.
Dairy Farm
Dairy Farm is a leading pan-Asian retailer. At 31st December 2008, the Group and its associates operated 4,649 outlets - including supermarkets, hypermarkets, health and beauty stores, convenience stores, home furnishings stores and restaurants; employed over 75,000 people in the region; and had total annual sales of US$7.7 billion.
The Group operates under well-known local brands, including:
|
▪ |
Supermarkets - Wellcome in Hong Kong, Taiwan and Vietnam, ThreeSixty and Oliver's The Delicatessen in Hong Kong, Jasons MarketPlace in Singapore, Taiwan and Hong Kong, Cold Storage in Singapore and Malaysia, Giant in Malaysia and Indonesia, Shop N Save in Singapore, Hero in Indonesia and Foodworld in India; |
|
▪ |
Hypermarkets - Giant in Malaysia, Singapore, Indonesia and Brunei; |
|
▪ |
Health and beauty stores - Mannings in Hong Kong, Macau and China, Guardian in Singapore, Malaysia, Indonesia and Brunei, and Health and Glow in India; |
|
▪ |
Convenience stores - 7-Eleven in Hong Kong, Macau, Southern China and Singapore, and Starmart in Indonesia; and |
|
▪ |
Home furnishings stores - IKEA in Hong Kong and Taiwan. |
|
The Group has a 50% interest in Maxim's, Hong Kong's leading catering chain. |
|
|
Dairy Farm International Holdings Limited is incorporated in Bermuda and has its primary share listing on the London Stock Exchange, and secondary listings on the Bermuda and Singapore stock exchanges. The Group's businesses are managed from Hong Kong by Dairy Farm Management Services Limited through its regional offices. Dairy Farm is a member of the Jardine Matheson Group. |
|
- end -
For further information, please contact:
|
Dairy Farm Management Services Limited |
||||
|
Michael Kok |
(852) 2299 1881 |
|||
|
Howard Mowlem |
(852) 2299 1896 |
|||
|
email: [email protected] |
||||
|
GolinHarris |
||||
|
John Morgan |
(852) 2501 7939 |
|||
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email: [email protected] |
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Full text of the Preliminary Announcement of Results and the Preliminary Financial Statements for the year ended 31st December 2008 can be accessed through the Internet at 'www.dairyfarmgroup.com'.
Related Shares:
Dfi Retail Intl