Performance

We are proud to announce a very solid financial performance for 2011. The Group reported total revenue of R15,7 billion (2010: R12,6 billion), an increase of 25% due to organic growth of R700 million (6%) and acquisitive growth of R2,4 billion (19% ). This is despite a 50-week trading year for Furniture Retail and HiFi Corp (2010: 52 weeks), which arose from the decision to align the trading month with calendar month as part of the SAP implementation. Operating profit before debtors’ cost of R1,7 billion (2010: R1,5 billion) translates into 15% growth while operating profit after debtors’ cost of R1 057 million (2010: R760 million) increased by 39%. This has resulted in strong headline earnings growth of 34% from 303,6 to 407,7 cents per share in 2011.

The improvement in the financial performance is particularly pleasing considering that the recovery in consumer spending was slower than we anticipated due to subdued economic growth and lack of job creation. In addition, cost inflation relating to administered costs, municipal charges and rentals did dampen profit growth somewhat. As strategic projects are completed, the financial performance is set to continue improving, notwithstanding the economic growth constraints that are expected to persist into the future.