director's report - woolworths holdings limited

Total assets increased by 8.9% to R4 063,8m,
mainly attributable to the growth in the
debtors book, whilst net capital expenditure
was largely in line with the depreciation charge.
The R131,6m write-off resulting from the
closure of Country Road’s USA operations was
substantially offset by the R87,4m increase in
the value of the remaining assets of Country
Road on translation.
The debtors book, comprising card and
personal loan products, and including our
funding of the Woolworths Visa Card Joint
Venture with Mercantile Bank grew by
R364,8m and now totals R1 800,5m. Bad debt
levels continued to be well managed during the
year and improved recoveries led to a net bad
debt level of 2.7%.The doubtful debt provision
remains conservatively calculated.
the state in taxes, 2.1% to lenders, 7% to
shareholders, and 22.0% was retained in the
business.
The debt:equity ratio of 15.8%, which was
exaggerated as a result of the 53rd week net
cash outflows, reflects the strong balance sheet
position of the group. Return on equity, based
on attributable earnings from continuing
operations, improved to 17.2% from 13.5% last
year, indicating the effect of the improved
trading result on a leaner balance sheet.
Looking forward our goal is to continually
improve the return on our shareholders’ funds
within the group’s financial framework.
Banking facilities totalling R1 549,3m, are
available to the group which greatly exceeds
our estimated peak funding requirements.
Interest rates and foreign exchange exposures
are managed within strict treasury policy
guidelines. At the end of the year, R150m of
short-term borrowings were hedged until April
2003, and all foreign exchange liabilities were
covered by FEC contracts.
Value of R2 093,8m was added during the year
under review from continuing operations.
59.2% was allocated to employees, 9.7% to
tor’s report
w oolwor t hs
47
annual report