| To: Business Editor | For immediate release |
EXCEPTIONAL CHARGE WILL AFFECT 1995 DAIRY FARM INTERNATIONAL RESULTS
8th February 1996 - Dairy Farm International Holdings Ltd., the food retailing group,
today announced that it would be taking an exceptional charge of US$36 million after tax
in its 1995 Accounts. As a result, the Company’s 1995 profit after tax and minority interests
is expected to be not less than US$145 million. Excluding exceptional items in both years the
1995 profit is expected to be some 6% below 1994. 1995 sales were US$6.3 billion, an increase
of 13%. Including associates, sales totalled US$11.8 billion.
The announcement was made to ensure that Shareholders and equity markets are kept informed.
The preliminary announcement of the full 1995 results will be released as planned on March 27.
Mr. Tim Westinghouse, Finance Director of Dairy Farm International, said the exceptional
charge arose in Franklins, their wholly-owned Australian subsidiary, due to the correction
of stock differences found during an in-depth review of grocery inventory levels. "The stock
differences date back to 1992, but were mainly caused by processing errors made during major
computer system upgrades in 1993 and 1994. The problem was confirmed following a full stocktake,
and Franklins has now introduced improved reconciliation procedures used in other Group companies,"
he said.
Mr. Graeme Seabrook, Managing Director of Dairy Farm International, said Franklins had recently
increased management resources, and was improving its financial systems. "The reduced profits are
extremely disappointing, but will not have any effect on our ongoing investment programme in
Australia," he said.
"The Franklins 'grocery-only' offer has been under pressure in recent years, primarily due to
extended trading hours and the inability of many of its independent fresh food 'neighbours' to
provide a competitive offer when customers want to shop,"
Mr. Seabrook said. "Franklins is now re-engineering its grocery offer, and in larger stores
introducing a complete 'one-stop' shopping experience. These developments have received good
customer acceptance with Franklins' sales increasing in 1995 by 8% to A$3.6 billion."
For more information please contact:
| Dairy Farm Management Services Ltd | |
| Graeme Seabrook, Managing Director Tim Westinghouse, Finance Director |
(852) 2837-6400 (852) 2837-6420 |
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