REG - Dairy Farm IntnlJardine Matheson HdgJardine Strategic - Half Yearly Results <Origin Href="QuoteRef">DAIR.SI</Origin> <Origin Href="QuoteRef">JARD.SI</Origin> <Origin Href="QuoteRef">JSH.SI</Origin> - Part 2
03/08/2017 10:10
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1st January 2016 75.1 31.1 30.2 1,561.3 0.3 (322.2) 1,375.8 79.4 1,455.2
Total comprehensive income - - - 482.5 1.4 (85.9) 398.0 4.4 402.4
Dividends paid by the - - - (270.4) - - (270.4) - (270.4)
Company
Dividends paid to non - - - - - - - (3.1) (3.1)
-controlling interests
Unclaimed dividends - - - 0.6 - - 0.6 - 0.6
forfeited
Employee share option - - 1.3 - - - 1.3 - 1.3
schemes
Change in interest in a - - - - - - - (2.2) (2.2)
subsidiary
Capital repayment to non - - - - - - - (4.4) (4.4)
-controlling interests
Transfer - - (3.2) 3.2 - - - - -
At 31st December 2016 75.1 31.1 28.3 1,777.2 1.7 (408.1) 1,505.3 74.1 1,579.4
Total comprehensive income
for the six months ended
30th June 2017 included in
revenue reserves comprises
profit attributable to
shareholders of the Company
of US$212.7 million (2016:
US$199.3 million) and net
fair value loss on other
investments of US$0.7
million (2016:US$1.2
million). Cumulative net
fair value gain on other
investments amounted to
US$4.1 million. Total
comprehensive income for the
year ended 31st December
2016 included in revenue
reserves comprises profit
attributable to shareholders
of the Company of US$469.0
million and net fair value
loss on other investments of
US$0.6 million. Cumulative
net fair value gain on other
investments amounted to
US$4.8 million.
Dairy Farm International Holdings LimitedConsolidated Cash Flow Statement
(unaudited)Six months ended30th June Year ended 31st December
2017 US$m 2016 US$m 2016 US$m
Operating activities
Operating profit (note 3) 200.7 196.9 458.8
Depreciation and amortization 107.1 107.2 212.8
Other non-cash items 6.7 5.5 8.4
Increase in working capital (24.5) (130.6) (97.1)
Interest received 0.8 0.5 1.3
Interest and other financing charges paid (13.1) (8.9) (22.0)
Tax paid (28.9) (28.2) (85.3)
248.8 142.4 476.9
Dividends from associates and joint ventures 56.8 38.9 66.0
Cash flows from operating activities 305.6 181.3 542.9
Investing activities
Purchase of associates and joint ventures (4.9) (3.7) (197.0)
(note 11(a))
Purchase of intangible assets (32.0) (13.2) (32.1)
Purchase of tangible assets (118.3) (97.2) (212.5)
Sale of convenience stores in Indonesia and restaurants in Cambodia - - 5.1
Sale of properties (note 11(b)) 1.5 - 7.2
Sale of tangible assets 0.4 1.6 1.3
Cash flows from investing activities (153.3) (112.5) (428.0)
Financing activities
Change in interest in a subsidiary - - (2.2)
Capital repayment to non-controlling interests - (4.4) (4.4)
Drawdown of borrowings 325.6 972.6 1,769.7
Repayment of borrowings (430.4) (1,033.5) (1,660.6)
Net increase in other short-term borrowings (note 11(c)) 113.6 152.9 128.5
Dividends paid by the Company (note 9) (196.1) (182.5) (270.4)
Dividends paid to non-controlling interests (0.5) (2.0) (3.1)
Cash flows from financing activities (187.8) (96.9) (42.5)
Net (decrease)/increase in cash and cash equivalents (35.5) (28.1) 72.4
Cash and cash equivalents at beginning of period 322.6 256.7 256.7
Effect of exchange rate changes 3.1 3.6 (6.5)
Cash and cash equivalents at end of period(note 11(d)) 290.2 232.2 322.6
Dairy Farm International Holdings Limited
Notes to Condensed Financial Statements
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION
The condensed financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting'. The
condensed financial statements have been prepared on a going concern basis. The condensed financial statements have not
been audited or reviewed by the Group's auditors pursuant to the UK Auditing Practices Board guidance on the review of
interim financial information.
There are no new standards or amendments, which are effective in the current accounting period and relevant to the Group's
operations, that have a significant effect on the Group's accounting policies. There have been no changes to the
accounting policies described in the 2016 annual financial statements.
2. SALES
Including associates and joint ventures Subsidiaries
Six months ended 30th June
2017 US$m 2016 US$m 2017 US$m 2016 US$m
Analysis by operating segment:
Food 7,849.4 7,634.3 3,972.7 4,086.1
- Supermarkets/hypermarkets 6,878.1 6,694.2 3,001.4 3,146.0
- Convenience stores 971.3 940.1 971.3 940.1
Health and Beauty 1,320.8 1,289.5 1,229.0 1,193.6
Home Furnishings 303.6 282.2 303.6 282.2
Restaurants 974.1 904.4 - -
10,447.9 10,110.4 5,505.3 5,561.9
Sales including associates and joint ventures comprise 100% of sales from associates and joint ventures.
Operating segments are identified on the basis of internal reports about components of the Group that are regularly
reviewed by the Board for the purpose of resource allocation and performance assessment. Dairy Farm operates in four
segments: Food, Health and Beauty, Home Furnishings and Restaurants. Food comprises supermarket, hypermarket and
convenience store businesses. Health and Beauty comprises the health and beauty businesses. Home Furnishings is the
Group's IKEA businesses. Restaurants is the Group's catering associate, Maxim's, a leading Hong Kong restaurant chain.
3. OPERATING PROFIT
Six months ended 30th June
2017 US$m 2016 US$m
Analysis by operating segment:
Food 105.7 115.8
- Supermarkets/hypermarkets 71.3 88.6
- Convenience stores 34.4 27.2
1
Health and Beauty 88.6 79.7
Home Furnishings 33.4 31.2
227.7 226.7
Support office (27.6) (29.8)
200.1 196.9
Non-trading item:
- profit on sale of a property 0.6 -
200.7 196.9
4. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
Six months ended 30th June
2017 US$m 2016 US$m
Analysis by operating segment:
Food - Supermarkets/hypermarkets 31.1 20.0
Health and Beauty (3.2) (3.7)
Restaurants 34.1 30.2
1
62.0 46.5
Share of results of associates and joint ventures included our share of a net gain of US$0.7 million on the disposal of an
investment by Yonghui Superstores Co., Ltd ('Yonghui') (note 7).
Results are shown after tax and non-controlling interests in the associates and joint ventures.
5. TAX
Six months ended 30th June
2017 US$m 2016 US$m
Tax charged to profit and loss is analyzed as follows:
Current tax (38.1) (38.8)
Deferred tax (1.9) 1.4
(40.0) (37.4)
Tax relating to components of other comprehensive income/(expense) is analyzed as follows:
Remeasurements of defined benefit plans 0.6 1.4
Revaluation of other investments (0.1) 0.1
Cash flow hedges 0.4 0.5
0.9 2.0
Tax on profit has been calculated at rates of taxation prevailing in the territories in which the Group operates. Share of
tax charge of associates and joint ventures of US$15.8 million (2016: US$11.9 million) is included in share of results of
associates and joint ventures.
6. EARNINGS PER SHARE
Basic earnings per share are calculated on profit attributable to shareholders ofUS$212.7 million (2016: US$199.3 million),
and on the weighted average number of1,352.4 million (2016: 1,352.2 million) shares in issue during the period.
Diluted earnings per share are calculated on profit attributable to shareholders ofUS$212.7 million (2016: US$199.3
million), and on the weighted average number of 1,353.1 million (2016: 1,352.3 million) shares in issue after adjusting for
0.7 million(2016: 0.1 million) shares which are deemed to be issued for no consideration under the share-based long-term
incentive plans based on the average share price during the period.
Additional basic and diluted earnings per share are also calculated based on underlying profit attributable to
shareholders. A reconciliation of earnings is set out below:
Six months ended 30th June
2017 2016
US$m Basic earningsper share US¢ Diluted earnings per share US¢ US$m Basic earnings per share US¢ Diluted earnings per share US¢
Profit attributable to shareholders 212.7 15.73 15.72 199.3 14.74 14.73
Non-trading items (note 7) (1.3) -
Underlying profit attributable to shareholders 211.4 15.63 15.62 199.3 14.74 14.73
7. NON-TRADING ITEMS
Non-trading items are separately identified to provide greater understanding of the Group's underlying business
performance. Items classified as non-trading items include gains and losses arising from the sale of businesses,
investments and properties; impairment of non-depreciable intangible assets and other investments; provisions for the
closure of businesses; acquisition-related costs in business combinations; and other credits and charges of a non-recurring
nature that require inclusion in order to provide additional insight into underlying business performance.
An analysis of non-trading items after interest, tax and non-controlling interests is set out below:
Six months ended 30th June
2017 US$m 2016 US$m
Profit on sale of a property 0.6 -
Share of net gain from disposal of an investment by Yonghui 0.7 -
1.3 -
8. NON-CURRENT ASSETS HELD FOR SALE
At 30th June 2017, the non-current assets held for sale represented a retail property in Taiwan and two apartments in
Indonesia brought forward from 31st December 2016. The sale of these properties is expected to complete in 2017 at amounts
not materially different from their carrying values.
At 30th June 2016, the non-current assets held for sale represented the same apartments in Indonesia.
9. DIVIDENDS
Six months ended 30th June
2017 US$m 2016 US$m
Final dividend in respect of 2016 of US¢14.50 196.1 182.5
(2015: US¢13.50) per share
An interim dividend in respect of 2017 of US¢6.50 (2016: US¢6.50) per share amounting to a total of US$87.9 million (2016:
US$87.9 million) is declared by the Board, and will be accounted for as an appropriation of revenue reserves in the year
ending 31st December 2017.
10. FINANCIAL INSTRUMENTS
Financial instruments by category
The carrying amounts of financial assets and financial liabilities at 30th June 2017 and 31st December 2016 are as
follows:
Loans and receivablesUS$m Derivatives used for hedging US$m Available- for-saleUS$m Other financial instruments at amortized costUS$m Total carrying amountsUS$m
30th June 2017
Assets
Other investments - - 6.4 - 6.4
Debtors 81.1 3.2 - - 84.3
Bank balances and other liquid funds 299.1 - - - 299.1
380.2 3.2 6.4 - 389.8
Liabilities
Borrowings - - - (984.0) (984.0)
Trade and other payables excluding non-financial liabilities - (3.1) - (2,292.3) (2,295.4)
- (3.1) - (3,276.3) (3,279.4)
31st December 2016
Assets
Other investments - - 5.9 - 5.9
Debtors 125.3 3.0 - - 128.3
Bank balances and other liquid funds 323.8 - - - 323.8
449.1 3.0 5.9 - 458.0
Liabilities
Borrowings - - - (964.6) (964.6)
Trade and other payables excluding non-financial liabilities - (0.6) - (2,367.7) (2,368.3)
- (0.6) - (3,332.3) (3,332.9)
The fair values of financial assets and financial liabilities approximate their carrying amounts.
Fair value estimation
(i) Financial instruments that are measured at fair value
For financial instruments that are measured at fair value in the balance sheet, the corresponding fair value measurements
are disclosed by level of the following fair value measurement hierarchy:
(a) Quoted prices (unadjusted) in active markets for identical assets or liabilities ('quoted prices in active markets')
The fair values of listed securities, which are classified as available-for-sale, are based on quoted prices in active
markets at the balance sheet date. The quoted market price used for listed investments held by the Group is the current
bid price.
(b) Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or
indirectly ('observable current market transactions')
The fair values of all interest rate swaps and caps, and forward foreign exchange contracts are determined using rates
quoted by the Group's bankers at the balance sheet date which are calculated by reference to market interest rates and
foreign exchange rates.
The fair values of unlisted investments, which are classified as available-for-sale and mainly include club debentures, are
determined by market prices quoted by a broker at the balance sheet date.
(c) Inputs for assets or liabilities that are not based on observable market data ('unobservable inputs')
The fair values of other unlisted securities, which are classified as available-for-sale, are determined using valuation
techniques by reference to observable current market transactions or the market prices of the underlying investments with
certain degree of entity specific estimates.
There were no changes in valuation techniques during the six months ended 30th June 2017 and the year ended 31st December
2016.
The table below analyzes financial instruments carried at fair value at 30th June 2017 and 31st December 2016, measured by
observable current market transactions.
At 30th June 2017 US$m At 31st December2016 US$m
Assets
Available-for-sale financial assets
- unlisted investments 6.4 5.9
Derivatives designated at fair value
- through other comprehensive income 3.0 3.0
- through profit and loss 0.2 -
9.6 8.9
Liabilities
Derivatives designated at fair value
- through other comprehensive income (3.1) (0.6)
(3.1) (0.6)
(ii) Financial instruments that are not measured at fair value
The fair values of current debtors, bank balances and other liquid funds, current creditors and current borrowings are
assumed to approximate their carrying amounts due to the short-term maturities of these assets and liabilities.
The fair values of long-term borrowings are based on market prices or are estimated using the expected future payments
discounted at market interest rates.
11. NOTES TO CONSOLIDATED CASH FLOW STATEMENT
(a) Purchase of associates and joint ventures for the six months ended 30th June 2017 mainly related to the Group's
capital injection of US$1.5 million in Rose Pharmacy, Inc. ('Rose') which operates a health and beauty business in the
Philippines and US$3.4 million in the business in Vietnam.
Purchase of associates and joint ventures in 2016 mainly related to the Group's capital injection of US$2.4 million in Rose
and US$1.3 million in the business in Vietnam.
(b) Sale of properties
Sale of properties in 2017 included mainly the sale of a piece of land in Malaysia for a total cash consideration of US$1.5
million.
(c) Net increase in other short-term borrowings
The Group has implemented a global liquidity cash pooling facility, which enhances daily cash flow management. The
movements in other short-term borrowings represent the aggregated net drawdown and repayment movement under this facility.
(d) Analysis of balances of cash and cash equivalents
At 30th June
2017 US$m 2016 US$m
Bank balances and other liquid funds 299.1 259.7
Bank overdrafts (8.9) (27.5)
290.2 232.2
12. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
Total capital commitments at 30th June 2017 and 31st December 2016 amounted to US$358.8 million and US$298.1 million,
respectively.
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 condensed financial statements.
13. RELATED PARTY TRANSACTIONS
The parent company of the Group is Jardine Strategic Holdings Limited and the ultimate parent company is Jardine Matheson
Holdings Limited ('JMH'). Both companies are incorporated in Bermuda.
In the normal course of business the Group undertakes a variety of transactions with JMH and its subsidiaries, associates
and joint ventures. The more significant of such transactions are described below.
Under the terms of a Management Services Agreement, the Group paid a management fee of US$1.1 million (2016: US$1.0
million) for the first six months of 2017 to Jardine Matheson Limited ('JML'), a wholly-owned subsidiary of JMH, based on
0.5% of the Group's profit attributable to shareholders in consideration for certain management consultancy services
provided by JML. The Group also paid directors' fees of US$0.3 million (2016: US$0.2 million) to JML for the same period
in 2017.
The Group rents properties from Hongkong Land Holdings Limited ('HKL'), a subsidiary of JMH. The gross rentals paid by the
Group to HKL for the first six months of 2017 were US$1.4 million (2016: US$1.4 million). The Group's 50%-owned associate,
Maxim's Caterers Limited ('Maxim's'), also paid gross rentals of US$5.9 million (2016: US$5.5 million) to HKL for the first
six months of 2017.
The Group uses Jardine Lloyd Thompson Limited ('JLT'), an associate of JMH, to place certain of its insurance. Brokerage
fees and commissions, net of rebates, paid by the Group to JLT for the first six months of 2017 were US$1.0 million (2016:
US$1.2 million).
The Group sources information technology infrastructure and related services from Jardine OneSolution ('JOS'), a subsidiary
of JMH. The total fees paid by the Group to JOS for the first six months of 2017 amounted to US$4.6 million (2016: US$4.8
million).
The Group also obtains repairs and maintenance services from Jardine Engineering Corporation ('JEC'), a subsidiary of JMH.
The total fees paid by the Group to JEC for the first six months of 2017 amounted to US$3.7 million (2016: US$1.9
million).
Maxim's supplies ready-to-eat products at arm's length to certain subsidiaries of the Group. For the first six months of
2017, these amounted to US$11.4 million (2016: US$11.1 million).
In addition, Gammon Construction ('GC'), a joint venture of JMH, was engaged by Maxim's to provide construction and
renovation works. The total fees paid by Maxim's to GC for the first six months of 2017 amounted to US$4.8 million (2016:
US$18.5 million).
There were no other related party transactions that might be considered to have a material effect on the financial position
or performance of the Group that were entered into or changed during the first six months of the current financial year.
Amounts of outstanding balances with associates and joint ventures are included in debtors and creditors, as appropriate.
14. POST BALANCE SHEET EVENT
In July 2017, the Group agreed to increase its shareholding in Rustan Supercenters, Inc. in the Philippines to 100% with
the purchase of the remaining 34% interest. The transaction is targeted to complete in August.
Dairy Farm International Holdings Limited
Principal Risks and Uncertainties
The Board has overall responsibility for risk management and internal control. The following have been identified
previously as the areas of principal risk and uncertainty facing the Company, and they remain relevant in the second half
of the year.
· Economic Risk
· Commercial Risk and Financial Risk
· Concessions, Franchises and Key Contracts
· Regulatory and Political Risk
· Terrorism, Pandemic and Natural Disasters
· Technology Risk
For greater detail, please refer to pages 116 and 117 of the Company's Annual Report for 2016, a copy of which is available
on the Company's website www.dairyfarmgroup.com.
Dairy Farm International Holdings Limited
Responsibility Statement
The Directors of the Company confirm to the best of their knowledge that:
a. the condensed financial statements have been prepared in accordance with IAS 34; and
b. the interim management report includes a fair review of all information required to be disclosed by the Disclosure
Guidance and Transparency Rules 4.2.7 and 4.2.8 issued by the Financial Conduct Authority in the United Kingdom.
For and on behalf of the Board
Graham Allan
Neil Galloway
Directors
The interim dividend of US¢6.50 per share will be payable on 19th October 2017 to shareholders on the register of members at the close of business on 25th August 2017.
The shares will be quoted ex-dividend on the Singapore Exchange and the London Stock Exchange on 23rd and 24th August 2017, respectively. The share registers will be
closed from 28th August to 1st September 2017, inclusive. Shareholders will receive their cash 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 2017 interim dividend by
notifying the United Kingdom transfer agent in writing by 29th September 2017. The sterling equivalent of dividends declared in United States dollars will be calculated
by reference to a rate prevailing on 4th October 2017. Shareholders holding their shares through CREST in the United Kingdom will receive their cash dividends in
sterling only as calculated above. Shareholders holding their shares through The Central Depository (Pte) Limited ('CDP') in Singapore will receive their cash dividends
in United States dollars unless they elect, through CDP, to receive Singapore dollars. Shareholders on the Singapore branch register who wish to deposit their shares into
the CDP system by the dividend record date, being 25th August 2017, must submit the relevant documents to M & C Services Private Limited, the Singapore branch registrar,
no later than 5.00 p.m. (local time) on 24th August 2017.
Dairy Farm
Dairy Farm is a leading pan-Asian retailer. At 30th June 2017, the Group and its associates and joint ventures operated
over 6,600 outlets and employed over 180,000 people. It had total annual sales in 2016 exceeding US$20 billion.
The Group aims to meet the changing needs of Asian consumers by offering leading brands, a pleasant retail experience and
great value, all provided through responsible operations supported by reliable and trusted supply chains.
The Group operates under a number of well-known brands across four divisions. The principal brands are:
Food
· Supermarkets - Wellcome in Hong Kong, Taiwan and the Philippines, Yonghui in mainland China, Cold Storage in Singapore
and Malaysia, Giant in Malaysia, Indonesia and Singapore, Hero in Indonesia;
· Hypermarkets - Giant in Malaysia, Indonesia, Singapore, Brunei and Vietnam, Yonghui in mainland China;
· Convenience stores - 7-Eleven in Hong Kong, Singapore, Southern China and Macau;
Health and Beauty
· Mannings in Greater China, Guardian in the rest of Asia, Rose Pharmacy in the Philippines;
Home Furnishings
· IKEA in Hong Kong, Taiwan and Indonesia; and
Restaurants
· Maxim's in Hong Kong, mainland China, Vietnam, Cambodia and Thailand.
Dairy Farm International Holdings Limited is incorporated in Bermuda and has a standard listing on the London Stock
Exchange, with secondary listings in Bermuda and Singapore. 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
Graham Allan (852) 2299 1881
Neil Galloway (852) 2299 1896
Brunswick Group Limited
Kevin Hartnett (852) 3512 5072
As permitted by the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority in the United Kingdom,
the Company will not be posting a printed version of the Half-Yearly Results announcement to shareholders. The Half-Yearly
Results announcement will remain available on the Company's website, www.dairyfarmgroup.com, together with other Group
announcements.
This information is provided by RNS
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