90 / 198
For the year ended 31 May 2016
BLUE LABEL INTEGRATED ANNUAL REPORT 2016
88
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS
continued
1.
Results of operations
1.1 Segmental summary
The Group’s segment reporting follows the organisational structure as reflected in its internal management reporting
systems, which are the basis for assessing the financial performance of the business segments and for allocating
resources to these segments. Management’s assessment of the Group’s organisational structure takes the
geographical location of the segments into account.
Operating segments are reported internally to the chief operating decision-maker in a manner consistent with the financial
statements. In addition, the chief operating decision-maker uses core net profit and core headline earnings as non-IFRS
measures in evaluating the Group’s performance on a segmental level. The chief operating decision-maker, who is responsible
for allocating resources and assessing performance of the operating segments, has been identified as the executive directors,
who are responsible for making strategic decisions on behalf of the Group.
Transactions between reportable segments are conducted on similar terms as other transactions of a similar nature.
The segment results for the year ended 31 May are as follows:
Total
South Africa Distribution
2016
R’000
2015
R’000
2016
R’000
2015
R’000
Total segment revenue
32 439 100
27 780 173
31 934 736
27 364 493
Inter-segment revenue
(6 234 378)
(5 735 951)
(6 212 196)
(5 706 602)
Revenue
26 204 722
22 044 222
25 722 540
21 657 891
Segment result
Operating profit/(loss) before depreciation, amortisation and
impairment charges
1 240 559
1 080 165
1 133 433
1 038 252
Depreciation and amortisation
(95 615)
(89 112)
(74 562)
(72 649)
Impairment of property, plant and equipment
—
—
—
—
Impairment of intangible assets
(2 568)
—
(1 042)
—
Impairment of loans
—
(4 907)
—
(219)
Finance costs
(214 110)
(233 165)
(203 713)
(225 994)
Finance income
193 899
173 047
169 198
156 703
Share of (losses)/profits from associates and joint ventures
(71 770)
(79 338)
(4 937)
—
Taxation
(318 783)
(265 497)
(258 313)
(222 905)
Net profit/(loss) for the year
731 612
581 193
760 064
673 188
Reconciliation of net profit for the year to core headline
earnings for the year
Net profit/(loss) for the year
731 612
581 193
760 064
673 188
Amortisation of intangibles raised through business
combinations net of tax
17 457
19 628
11 617
13 389
Core net profit/(loss) for the year*
749 069
600 821
771 681
686 577
Headline earnings adjustment
(23 029)
(30 570)
435
(1 016)
Core headline earnings for the year*
726 040
570 251
772 116
685 561
Core headline earnings for the year attributable to:
Equity holders of parent
684 911
566 012
751 086
683 744
Non-controlling interest
41 129
4 239
21 030
1 817
Non-cash items
Net (loss)/profit on sale of subsidiaries
(3 885)
3 691
—
—
Net profit on disposal of associates
—
18 771
—
—
Discounting of receivables
129 633
142 326
129 633
142 326
Discounting of payables
(165 903)
(165 201)
(165 903)
(165 201)
The segment assets and liabilities at 31 May are as follows:
Assets excluding investments in associates and joint ventures
6 395 384
6 478 248
5 725 082
5 866 457
Investments in associates and joint ventures
910 567
548 572
62 649
6 000
Total assets
7 305 951
7 026 820
5 787 731
5 872 457
Additions to non-current assets
Property, plant and equipment
41 956
54 897
37 706
44 673
Intangible assets and goodwill
85 175
374 095
53 562
344 909
Investment in associates
210 416
51 424
—
—
Investment in joint ventures
—
30 051
—
—
Total liabilities
(2 786 387)
(3 108 839)
(2 482 650)
(2 781 588)
Segmental summary
The Company is domiciled in the Republic of South Africa. The result of its revenue from external customers in South
Africa is R26.188 billion (2015: R22.026 billion), and the total revenue from external customers from other countries
is R16.9 million (2015: R18.6 million).
The total non-current assets other than financial instruments and deferred tax assets located in South Africa is
R1.426 billion (2015: R1.483 billion), and the total non-current assets located in other countries is R792 million
(2015: R459 million).
The South African Distribution segment includes revenues of R7.647 billion and R4.637 billion earned from two
external customers.