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Reviewed Group Result for the year ended 28 February 2006
Reviewed Group Result for the year ended 28 February 2006   - REVIEW OF OPERATIONS
Review of Operations
Income Statement
Balance Sheet
Cashflow Statement
Changes in Equity
Segmental Report
Capitalisation and Dividends
Compliance with IFRS



We are pleased to report that the Group has achieved a 17.1% increase in Headline Earnings per share for the year ended 28 February 2006. The result is against a background of various challenges we have had to overcome during the financial year including a very competitive trading environment with continued low inflation, and the industrial action at Pick 'n Pay in the middle of the year.

The Group has adopted International Financial Reporting Standards ("IFRS") and we draw your attention to the separate section of this result outlining the changes we have made in this regard.

Group turnover at R35.1 billion is an increase of 10.0% and shows good real growth, above the very low levels of inflation, with the Southern Africa segment achieving a growth of 11.3%.

The increase in trading profit of 16.9% for the Group is a good performance. Trading margin has increased from 2.8% to 3.0%.

Headline earnings at R705.6 million increased by 15.2% for the year. As a result of the concentration effect of share repurchases, mainly towards the end of the prior year, our headline earnings per share at 153.02 cents is up 17.1%.


The Retail division had a commendable increase in both turnover and profitability, despite the negative impact that the industrial action had on the business. The continued low inflation rate, which averaged 3.5% for the year, has been great for consumers and continues to focus our attention on cost control.

Supermarkets - during the year 8 new corporate supermarkets were opened with a further 10 stores planned in the year ahead.

Family and Mini Market franchise stores continue to make a significant contribution to the Group. Franchise stores now total 179 with 11 new Family stores being opened in the current year. In the year ahead we will open a further 24 Family stores.

Hypermarkets were particularly affected by the industrial action, but as a brand still continue to be the cheapest food retail outlet in the country. The next financial year will be particularly exciting with 2 new Hypermarkets in Zambezi Road, Pretoria and Old Pretoria Road, Centurion being opened. These will be the first new Hypermarkets opened in many years and shows our commitment to this large retail format. A further 2 stores are currently being constructed for opening in the year ending February 2008.

The Retail division has also been expanding our liquor outlets to 22 and clothing stores to 18 during the year. Liquor outlets, adjacent to Supermarkets and Hypermarkets, have been particularly successful and as a format show good potential for the future. Our clothing stores expanded by a further 10 stores this year.


Score Supermarkets had a very strong trading year showing real growth in turnover and significantly reduced expenses. Following this turnaround, in the year ahead we will open 7 new stores and convert a further 28 stores to the successful "Nambawane" format as well completing the scanning roll-out.

Boxer Superstores had yet another excellent trading year showing real increases in both turnover and profit contribution. In the current year 3 new stores were opened. Next year will see Boxer open 8 new supermarkets and the completion of its rollout of scanning in all stores.

TM Supermarkets continues to trade under very trying circumstances with inflation reaching levels of over 900%. During the year there was a significant weakening in the Zimbabwean dollar which is currently over $16,500 to the Rand.


Following the change-over to our own distribution channels at the beginning of the year the business is far more efficient, as is evident from the trading loss in the second half of the year being reduced to R29.2 million from the R63.5 million incurred in the first half. The year ahead will see further significant reductions in the losses.

The transition to the SAP software system has been very successful and has assisted us in planning for the implementation of this system in our South African operations.

An important milestone in the last few months has been the development of our franchise model which is currently being piloted.

Our main focus at Franklins in the year ahead will be the refinement and rollout of our franchise format as well as the opening of 3 new corporate stores.


We have had an exceptionally busy trading year and are pleased that we have again produced a strong performance. We are excited by the prospect of a significant number of new stores being opened in the 2007 financial year. Each division within the Group is highly focused on their respective goals in the next year and we are confident that we will be able to achieve an acceptable increase in headline earnings.

We would like to express our appreciation for the loyal support shown by all our employees, customers and suppliers.

For and on behalf of the boards

Raymond Ackerman

19 April 2006

Sean Summers
Chief Executive Officer

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