Dfi Retail Intl Regulatory News (DFI)

31 Jul 2008 10:09



The following announcement was issued today to a Regulatory Information Service approved by the Financial Services Authority in the United Kingdom.

DAIRY FARM INTERNATIONAL HOLDINGS LIMITED

HALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2008

Highlights

Underlying earnings per share up 40% 

Good results in major markets

Strong cash flow

"Despite some challenges in the overall economic outlook, Dairy Farm's businesses have continued to trade well, and the prospects for the remainder of the year are positive. The Group intends to maintain its expansion, supported by the growth in demand from consumers in Asia."

Simon Keswick, Chairman

31st July 2008

Results 

The interim dividend of US¢4.00 per share will be payable on 15th October 2008 to shareholders on the register of members at the close of business on 22nd August 2008. The ex-dividend date will be on 20th August 2008, and the share registers will be closed from 25th to 29th August 2008, inclusive.

DAIRY FARM INTERNATIONAL HOLDINGS LIMITED

HALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2008

OVERVIEW

The Dairy Farm Group enjoyed generally favourable trading conditions in its major markets during the first half of the year, enabling it to report strong growth in sales and profit.

PERFORMANCE

Sales, including 100% of associates, rose by 18% to US$3.8 billion in the first half of 2008. Underlying profit for the period increased by 40% to US$141 million, while underlying earnings per share also increase by 40% to US¢10.50. The profit attributable to shareholders of US$154 million benefited from non-trading gains of US$13 million, arising mainly on the disposal of the Group's 50% interest in CJ Olive Young.

Net borrowings at the end of June increased to US$128 million following the payment of the 2007 final dividend, up from US$83 million at the previous year end. The Group's financial position remains sound with the benefit of strong cash flow generation.

The Board has declared an interim dividend of US¢4.00 per share, a 33% increase over last year's interim dividend of US¢3.00 per share.

OPERATIONS

Strong expansion continued in the first half of 2008 with the addition of a net 167 outlets, increasing the total network to 4,359 stores. The first Giant hypermarket was opened in Brunei; which brings the number in operation to 72, including 43 in Malaysia, 22 in Indonesia and six in Singapore.

North Asia

Each of the Group's Hong Kong businesses - Wellcome, Mannings, 7-Eleven and IKEA - reported improved results in the first half of the year, while there were further positive contributions from 7-Eleven and Mannings in Macau. In Taiwan, Wellcome supermarkets continued to open Express Fresh and X-Market stores, recording satisfactory results from these new formats. IKEA Taiwan achieved increased sales and improved its overall financial performance, although its result remains below expectations.

In Southern China, the 7-Eleven chain has been increased to 464 operating outlets, including 46 that are franchised. Improved results were recorded in the 39 Mannings health and beauty stores following refinements to the format and product range, and the first stores have now been opened outside Guangdong province.

The Group's associate, Maxim's, is facing significant increases in ingredient costs, but was able to achieve growth in sales and profit during the period. Its development continued in Hong Kong with the acquisition of the 53-store Arome cake shop chain and the opening of the 100th Starbucks outlet.

East Asia

All formats in Malaysia achieved increases in sales and profit.  Expansion continued in both peninsular Malaysia and East Malaysia with the opening of two hypermarkets, five supermarkets and 19 health and beauty stores. Two sites have also been acquired for the development of purpose-built distribution centres to support this expansion. In Brunei, in addition to opening of the first Giant hypermarket, the local Guardian health and beauty business was acquired and expanded to eight stores. The operation of three Wellcome supermarkets in Vietnam is providing insights into this new market.

Recent changes in the Group's operations in Indonesia have led to improved profitability in all formats. The rebranding to Giant of selected Hero supermarkets continues, and 44 Giant supermarkets were in operation at the end of June. In April, an additional 25% direct interest in PT Hero was acquired pursuant to an option agreement at a cost of US$42 million.

South Asia 

Improved results were achieved in Singapore, particularly in the supermarkets. Hypermarkets, after a somewhat difficult year in 2007, also performed better. The 7-Eleven operation continued to benefit from the rebranding of 62 former Shell stores.

The Group's supermarket joint venture in India maintained a moderate rate of expansion, but the rapid influx of competitors into the sector is making the trading environment difficult. 

PROSPECTS

Despite some challenges in the overall economic outlook, Dairy Farm's businesses have continued to trade well, and the prospects for the remainder of the year are positive. The Group intends to maintain its expansion, supported by the growth in demand from consumers in Asia.

Simon Keswick

Chairman

31st July 2008