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FINANCIAL REVIEW - DISCUSSION AND ANALYSIS
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Surplus After Tax
The Groups surplus after tax was $15,060,000 a 47% increase on last years surplus excluding the unusual item for profit on sale of the Australian head office building of $1,326,000. Total sales went up from $224,802,000 to $259,777,000 a 15.6% increase.
The main factor contributing to this record result was an increase in the Australian same store revenue of 9.8% which was achieved while maintaining its gross margin. NZ same store sales increased 1.2% for the year.The NZ EBIT contained a one-off write down associated with the pending centralisation of support services to Brisbane of $705,000. If this one-off cost is added back to the NZ EBIT then they enjoyed an increase in EBIT of 9.1% to $11,714,000. The EBIT loss in Canada reduced from NZ$1,802,000 to NZ$1,366,000 in its first full year of operation. The directors are pleased with this result and more stores are planned in Canada for 04/05.
Occupancy costs represented 6.7% of trade sales this year compared to 6.5% last year.
Depreciation for the group went up from $5,070,000 to $6,025,000 in 03/04.
CASH FLOW
Net cash flow from operating activities was $24,779,000 compared to $6,789,000 last year, an increase of 265%.
Key drivers were:
- an increase in receipts from customers of $21,001,000,a 8.7% increase on last year.
- a decrease in income tax paid of $1,821,000,a decrease of 27.5%.
Net cash outflow relating to investing activities was up by $1,283,000 to $6,124,000.
Key drivers were:
- cash flow from sale of assets down from $5,335,000 (principally from sale of Australian head office building) to $250,000 this year.
- purchase of new assets decreased to $6,409,000,down from $10,313,000.
Net cash outflow from financing activities was $6,487,000 compared to a net inflow of $78,000 last year due mainly to:
- Borrowings reduced from $21,552,000 in 02/03 to only $6,593,000.
- Dividends paid reduced to $6,944,000 from $14,266,000 (special dividend of $7,712,000) in 02/03.
BALANCE SHEET
Net assets increased from $50,048,000 at the end of 02/03 to $57,607,000 this year.Long term borrowings decreased slightly to $40,604,000 from $42,299,000 last year. The net debt to debt plus equity ratio decreased to 32.5% from 44.5% last year. The equity ratio at year end was 46.9% compared to 45.8% at the same time last year. Total assets went up from $109,228,000 to $122,831,000 due principally to:
- Cash on hand up $11,723,000.
- Inventories up $3,768,000.
The working capital ratio decreased from 5.4:1 to 4.3:1.
EVENTS AFTER BALANCE DATE
There were no events after balance date requiring disclosure.
SHAREHOLDERS RETURNS
- Declared dividends total 21 cents per share compared to 37 cents for 02/03 (which included a special dividend of 20 cents per share).
- Shares traded between $4.05 and $6.00 ending at $6.00 at 30 June 2004.
- Average return on equity was 28% compared to 22% last year
- Average return on total assets was 13.0% compared to 11.2% last year.
Trend Statement
|
2004
|
2003
|
2002
|
2001
|
2000
|
1999
|
1998
|
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
| Group Sales |
$ 259,777
|
$ 224,802
|
$ 214,105
|
$ 189,168
|
$ 181,983
|
$ 156,940
|
$ 141,254
|
| Earnings |
|
|
|
|
|
|
|
Surplus before taxation,
before abnormals |
22,063
|
15,096
|
18,340
|
15,130
|
15,517
|
13,549
|
11,059
|
| Surplus before taxation, after abnormals |
22,063
|
16,637
|
18,698
|
15,130
|
15,517
|
13,549
|
11,059
|
| Tax provision |
7,003
|
5,067
|
5,992
|
5,091
|
5,578
|
4,755
|
3,867
|
Surplus after tax,
before abnormals |
15,060
|
10,244
|
12,298
|
10,039
|
9,939
|
8,774
|
7,192
|
Surplus after tax,
after abnormals |
15,060
|
11,570
|
12,706
|
10,039
|
9,939
|
8,774
|
7,192
|
| Dividend Distributions |
6,944
|
14,266
|
5,978
|
2,518*
|
5,216
|
4,444
|
3,669
|
| Retained surplus for year |
8,116
|
(2,696)
|
6,728
|
7,521
|
4,723
|
4,330
|
3,523
|
| Funds Employed |
|
|
|
|
|
|
|
| Paid-up ordinary capital |
8,078
|
7,712
|
7,712
|
7,712
|
7,712
|
7,712
|
7,712
|
| Reserves and retained earnings |
49,529
|
42,336
|
45,616
|
41,860
|
34,875
|
29,339
|
24,605
|
| Shareholders' funds |
57,607
|
50,048
|
53,328
|
49,572
|
42,587
|
37,051
|
32,317
|
| Non current liabilities |
42,091
|
43,478
|
28,994
|
28,503
|
22,670
|
21,849
|
18,302
|
| |
99,698
|
93,526
|
82,322
|
78,075
|
65,257
|
58,900
|
50,619
|
| Utilisation of funds |
|
|
|
|
|
|
|
| Non current assets |
23,619
|
23,475
|
17,510
|
22,652
|
19,635
|
14,583
|
13,169
|
| Expenditure carried forward/goodwill |
222
|
298
|
393
|
505
|
625
|
756
|
892
|
| Net working capital |
75,857
|
69,753
|
64,419
|
54,918
|
44,997
|
43,561
|
36,558
|
|
$ 99,698
|
$ 93,526
|
$ 82,322
|
$ 78,075
|
$ 65,257
|
$ 58,900
|
$ 50,619
|
| *There was a change in accounting policy in 2001 regarding providing for dividends. |
| |
| CASH FLOW STATEMENT |
2004
|
2003
|
2002
|
2001
|
2000
|
1999
|
1998
|
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
| Net profit before tax |
22,063
|
16,637
|
18,698
|
15,130
|
15,517
|
13,549
|
11,059
|
| Depreciation |
6,025
|
5,070
|
4,855
|
4,280
|
4,264
|
2,903
|
2,783
|
| Other non-cash adjustments |
192
|
311
|
(350)
|
147
|
1,545
|
1,002
|
1,901
|
| Tax paid |
(4,806)
|
(6,627)
|
(6,753)
|
(7,911)
|
(5,718)
|
(4,567)
|
(3,786)
|
|
| Dividends |
(6,944)
|
(14,266)
|
(5,978)
|
(5,410)
|
(4,638)
|
(4,059)
|
(3,091)
|
| Working capital increase |
1,305
|
(8,602)
|
(7,579)
|
(3,759)
|
(1,394)
|
(10,106)
|
(3,455)
|
| Capital expenditure |
(6,409)
|
(10,313)
|
(6,256)
|
(8,028)
|
(9,161)
|
(4,502)
|
(2,652)
|
| Other |
366
|
0
|
0
|
0
|
0
|
(30)
|
(82)
|
| Surplus cash pre external funds |
11,792
|
(17,790)
|
(3,363)
|
(5,551)
|
415
|
(5,810)
|
2,677
|
| External source of funds |
|
|
|
|
|
|
|
| Net borrowings/(repayments) |
0
|
14,656
|
2,326
|
6,250
|
0
|
3,455
|
(1,750)
|
| Treasury stock |
91
|
(312)
|
(435)
|
-
|
-
|
-
|
-
|
| Asset sales |
285
|
5,472
|
1,808
|
178
|
146
|
222
|
238
|
| Surplus cashflow |
$ 12,168
|
$ 2,026
|
$ 336
|
$ 877
|
$ 561
|
($ 2,133)
|
$ 1,165
|
|
| STATISTICS & OTHER FINANCIAL DATA |
2004
|
2003
|
2002
|
2001
|
2000
|
1999
|
1998
|
| Earning per share |
39.07c
|
30.0c
|
32.95c
|
26.03c
|
25.8c
|
22.8c
|
18.7c
|
| Net tangible asset backing |
$1.49
|
$1.29
|
$1.37
|
$1.27
|
$1.09
|
94.6c
|
82.1c
|
| Interest cover (times) |
8.8
|
7.2
|
10.3
|
8.1
|
10.6
|
9.9
|
8
|
Cash flow from operating
activities $000's |
$24,779
|
$6,789
|
$8,871
|
$7,887
|
$14,214
|
$2,781
|
$8,502
|
| Net debt $000's |
$26,587
|
$40,177
|
$27,454
|
$27,113
|
$22,051
|
$21,234
|
$16,023
|
| Dividend per ordinary share |
21.0c
|
|
|
37.0c
|
|
|
17.0c
|
% of tax paid profit as
ordinary dividend |
53.7%
|
56.6%
|
45.6%
|
25.0%
|
52.3%
|
50.5%
|
51.0%
|
| Working capital ratio |
4.3:1
|
5.4:1
|
5.6:1
|
5.1:1
|
3.6:1
|
3.8:1
|
3.9:1
|
| EBIT/Sales % before abnormals |
9.6%
|
7.9%
|
9.5%
|
9.1%
|
9.4%
|
9.6%
|
8.9%
|
| Return on average capital funds |
28.0%
|
22.0%
|
23.90%
|
21.8%
|
24.9%
|
25.3%
|
24.0%
|
| Jewellery stores at year end |
143
|
134
|
120
|
115
|
106
|
102
|
94
|
| Exchange rate for translating Australian results |
0.88
|
0.89
|
0.82
|
0.79
|
0.8
|
0.84
|
0.83
|
| Exchange rate for translating Canadian results |
0.84
|
0.80
|
-
|
-
|
-
|
-
|
-
|
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