| To : Business Editor | 18th September 1997 For immediate release |
The following announcement was today issued to the London Stock Exchange.
DAIRY FARM INTERNATIONAL HOLDINGS LIMITED
INTERIM REPORT 1997 HIGHLIGHTS
Results
"We continue to develop in Asia and to adapt our businesses to meet changing retail environments. While it will be some time before the full benefits are achieved, the outlook has improved."
Simon Keswick, Chairman
18th September 1997
The interim dividend of US¢1.65 per ordinary share will be payable on 25th November 1997 to ordinary Shareholders on the register of members at the close of business on 3rd October 1997 and will be available in cash with a scrip alternative. The ordinary share registers will be closed from 6th to 10th October 1997, inclusive.
DAIRY FARM INTERNATIONAL HOLDINGS LIMITED
INTERIM REPORT 1997
RESULTS
Dairy Farm International Holdings Limited today announced that sales, including associates, for the six months ended 30th June 1997 were US$6,671 million, an increase of 5% over the same period in 1996.
Trading profit in the first half was US$67 million, an increase of 27% .
The net profit after taxation, minority interests and preference dividends was US$38 million, an increase of 80%, helped by lower interest costs arising from a reduction in working capital, while currency movements also enhanced profit by 5%.
Earnings per ordinary share for the half year were US¢2.17, up 76% compared with the first half of 1996. After allowing for a discontinued activity in both periods the earnings per ordinary share would have increased 87% to US¢2.52.
The Directors have declared an unchanged interim dividend of US¢1.65 per ordinary share, payable in cash with a scrip alternative at Shareholders' option.
GROUP REVIEW
Turning to the operations, the Chairman, Simon Keswick, said that in Australia, Franklins' results have begun to show the benefit of repositioning its business, with the Big Fresh and Franklins Fresh formats now well established. In June, 45% of Franklins' sales were generated from the Fresh formats. In New Zealand, Woolworths again reported increased sales and profit.
In Hong Kong, a modest growth in sales at Wellcome was achieved, but profit was flat due to higher costs associated with the current investment in systems and logistics. 7-Eleven and Oliver's produced improved results and Mannings' performance was satisfactory, but Sims Trading had a slow start to the year. Maxim's, the Group's 50%-owned restaurant associate, again performed excellently with continuing growth in sales, profit and market share in a highly competitive market.
In China, the Group has continued to invest in 7-Eleven, which has operations in Guangzhou and Shenzhen, and in Wellcome Gintian in Shenzhen. It also established a new supermarket joint venture in Chengdu.
In Taiwan where the performance of the Wellcome and Mannings operations remained disappointing, the Group is continuing its preparations to enter the hypermarket sector. In Japan, the total number of Wellsave stores is now 15, and efforts are being focused on reducing start-up losses and on refining the format and customer offer.
The Singapore businesses performed steadily, and the supermarket joint venture in Malaysia continued to increase sales. In Indonesia, the Group provides technical assistance to the Mitra supermarket chain, which has upgraded its store formats, and more recently to the Guardian drugstore chain. The Group has established drugstore joint ventures in Malaysia and India.
Continued sluggish consumer demand in Spain resulted in soft sales in Simago, although the trading performance achieved a modest improvement.
In the United Kingdom, Kwik Save has experienced a reduction in like-for-like sales offset by an improvement in margins. The company has started to implement its three-year repositioning programme with the introduction of own label products and the launch of pilot stores in a new format, the first of which was opened in April 1997.
In order to concentrate the Group's resources on its core retailing businesses, agreement has been reached for the sale of its 49% interest in the Nestlé Dairy Farm joint venture to its partner. The disposal will produce an exceptional gain of US$24 million, which will be taken into the full year's results.
OUTLOOK
In conclusion, Simon Keswick said, "We continue to develop in Asia and to adapt our businesses to meet changing retail environments. While it will be some time before the full benefits are achieved, the outlook has improved."
Dairy Farm International Holdings Limited
Notes
1. BASIS OF PREPARATION
The unaudited half-year results have been prepared in conformity with International Accounting Standards. There have been no changes to the accounting policies described in the 1996 Financial Statements.
2. PROFIT BEFORE INTEREST
| Notes : | (i) Share of results of Associates are shown after amortisation of goodwill. (ii) Includes Corporate and Other. |
3. TAXATION
Tax on profits has been calculated at the rates of taxation prevailing in the territories in which the Group operates and includes United Kingdom tax of US$6.8 million (1996: US$7.0 million).
4. EARNINGS PER ORDINARY SHARE
Earnings per ordinary share are calculated on the profit after taxation, minority interests and preference dividends of US$38.3 million (1996: US$21.3 million) and on the weighted average number of ordinary shares in issue of 1,762.2 million (1996: 1,727.9 million) during the period. The weighted average number excludes the Company's ordinary shares held by the Trustee under the Senior Executive Share Incentive Schemes.
Earnings per ordinary share excluding non-recurring items are calculated on the profit after taxation, minority interests and preference dividends and after adjusting for the losses of Nestlé Dairy Farm of US$6.0 million (1996: US$2.1 million).
Full conversion of the convertible cumulative preference shares and full exercise of the options granted under the Senior Executive Share Incentive Schemes would not result in a material dilution of the earnings per ordinary share.
5. INTERIM REPORT
The Interim Report will be posted to Shareholders on or about 13th October 1997. Copies may be obtained from Butterfield Corporate Services Limited, P.O. Box HM 1540, Hamilton HM FX, Bermuda; Independent Registrars Group Limited, Bourne House, 34 Beckenham Road, Beckenham, Kent BR3 4TU, England; Coopers & Lybrand, Level 8, 580 George Street, Sydney NSW 2000, Australia and M & C Services Private Limited, 16 Raffles Quay #23-01, Hong Leong Building, Singapore 048581.
The interim dividend of US¢1.65 per share will be payable on 25th November 1997 to ordinary Shareholders on the register of members at the close of business on 3rd October 1997 and will be available in cash with a scrip alternative. The ordinary share registers will be closed from 6th to 10th October 1997, inclusive. Ordinary Shareholders will receive their cash dividends in United States Dollars, unless they are registered on the Australia or United Kingdom branch registers where they will have the option to elect for Australian Dollars or Sterling respectively. These Shareholders may make new currency elections by notifying any one of the Company's registrars or the United Kingdom transfer agent in writing by 6th November 1997. The Australian Dollar and Sterling equivalent of dividends declared in United States Dollars will be calculated by reference to rates prevailing ten business days prior to the payment date. Ordinary 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 or the scrip alternative.
- end -
For further information, please contact:
| Dairy Farm Management Services Limited Ronald J. Floto Edouard Ettedgui |
(852) 2837 6401 (office) |
| Ludgate Asia Limited Martin Spurrier |
(852) 2543 5413 (office) |
Full text of this announcement can be accessed through the Internet at "http://www.irasia.com/listco/sg/dairyfarm" and is also available through "First Call".
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