Directors’ report

for the year ended 28 February 2010


Structure and function

The Company, which is domiciled and incorporated in the Republic of South Africa and listed on the JSE Limited (JSE), the recognised securities exchange in South Africa, was formed with the sole purpose of holding a controlling interest in Pick n Pay Stores Limited. The Company is entitled to redistribute any dividend received from Pick n Pay Stores Limited.

General review

The Group statement of comprehensive income is presented here and reflects the Group’s operational results.

The Group’s headline earnings from continuing operations and dividends for the year is as follows:

Per share – cents   2010   % increase   2009  
Headline earnings   117.93   0.9   116.92  
Dividends*   84.94   2.4   82.97  
* The dividend per share presented is the interim dividend paid in the current year and the final dividend declared after year-end, but in respect of current year profit.

 

Relative share value

The directors consider that the ratio of the dividend paid per share for the year of Pick n Pay Holdings Limited (PIKWIK) of 84.94 cents, to that of Pick n Pay Stores Limited (PICKNPAY), 174.50 cents, determines the relative value of a Pick n Pay Holdings Limited share, which, based on these figures, is 48.7% (2009: 48.8%) of a Pick n Pay Stores Limited share.

Audit committee

We draw your attention to the Company’s corporate governance report on here.

Investment

The Company’s sole asset is its 53.6% (2009: 50.8%) direct shareholding in its subsidiary, Pick n Pay Stores Limited, and its only source of income is the dividend received from Pick n Pay Stores Limited. After taking into account the Pick n Pay Stores Limited treasury shares held by the Group, the Company’s effective holding in Pick n Pay Stores Limited at year-end is 54.3% (2009: 54.4%).

Dividends paid and declared

A cash dividend (number 55) of 65.52 cents per share was paid to shareholders on 15 June 2009.

A cash dividend (number 56) of 19.31 cents per share was paid to shareholders on 14 December 2009.

For further details refer to note 5. The directors have declared a cash dividend (number 57) of 65.63 cents per share. The last day of trade in order to participate in the dividend (CUM dividend) will be Friday, 4 June 2010. Shares will trade EX dividend from the commencement of business on Monday, 7 June 2010 and the record date is Friday, 11 June 2010. The dividend will be paid on Monday, 14 June 2010. Share certificates may not be dematerialised or rematerialised between Monday, 7 June 2010 and Friday, 11 June 2010, both dates inclusive.

As dividend number 57 was declared on 20 April 2010 it will only be accounted for in the 2011 financial year. No liability for secondary tax on companies (STC) will be payable on this dividend as the Company will have sufficient STC credits to offset any liability.

Share capital

There was no movement in the number of issued ordinary shares during the year, which remains at 527 249 082.

As at year-end, the Pick n Pay Employee Share Purchase Trust and a subsidiary company held 10 077 639 (2009: 10 418 493) and 1 784 303 (2009: 1 708 203) shares in the Company, respectively. These shares are reflected as treasury shares in the annual financial statements.

Going concern

These annual financial statements have been prepared on the going concern basis.

The Board has performed a formal review of the Group’s ability to continue trading as a going concern in the foreseeable future and, based on this review, consider that the presentation of the financial statements on this basis is appropriate.

There are no pending or threatened legal or arbitration proceedings, which have had or may have a material effect on the financial position of the Company or the Group.

Special resolutions

On 12 June 2009 the Company’s shareholders approved the following special resolution:

General authority to repurchase Company shares

It was resolved that the Company or any of its subsidiaries may, in accordance with sections 85 and 89 of the Companies Act, acquire issued shares of the Company upon such terms and conditions and in such amounts as the directors of the Company may determine from time to time. Acquisition of such shares is subject to the articles of association of the Company, the provisions of the Companies Act and the Listings Requirements of the JSE Limited (JSE), and provided further that acquisitions by the Company and its subsidiaries of shares in the Company may not, in the aggregate, exceed in any one financial year 5% of the Company’s issued share capital.

Directors and Secretary

In terms of the Company’s articles of association the directors listed here retire by rotation and they offer themselves for re-election. Information pertaining to the directors and the Company Secretary appear here.

Directors’ interest in shares

   2010 %   2009 %  
Beneficial   0.8   0.8  
Non-beneficial   50.5   50.5  
Total   51.3   51.3  


Borrowings

The Company’s overall level of borrowings is unchanged from the prior year.

Corporate governance

We refer you here for a review of the Company’s corporate governance processes.

Subsequent events

There have been no facts or circumstances of a material nature that have arisen between the financial year-end and the date of this report.

 

 

p of page