{"id":447,"date":"2014-08-20T14:20:54","date_gmt":"2014-08-20T12:20:54","guid":{"rendered":"http:\/\/www.remgro.com\/ar2014\/reports-to-shareholders\/chief-financial-officers-report\/"},"modified":"2014-10-28T14:14:45","modified_gmt":"2014-10-28T12:14:45","slug":"chief-financial-officers-report","status":"publish","type":"page","link":"https:\/\/www.remgro.com\/ar2014\/index.php\/reports-to-shareholders\/chief-financial-officers-report\/","title":{"rendered":"Chief Financial Officer’s Report"},"content":{"rendered":"
\r\n
\r\n\"Leon\r\n<\/div>\r\n
\r\n

Introduction<\/h2>\r\n

Due to Remgro being an investment holding company, traditional measurements of performance, like sales or gross profit, are not meaningful criteria for evaluating the Group\u2019s performance. However, management uses “headline earnings”, “intrinsic net asset value” and “cash at the centre” to evaluate the performance of the Group on a continuous basis and hence these concepts are used throughout the Integrated Annual Report to provide share\u00adholders with a better understanding of our\u00a0results.<\/p>\r\n

COMPARISON WITH PRIOR YEAR<\/h2>\r\n

During the previous financial year Mediclinic International Limited (Mediclinic) incurred material once-off charges relating to the comprehensive refinancing of its Swiss and South African debt. Remgro\u2019s share of these once-off items included in its results for the year ended 30 June 2013 amounted to a loss of R1 312 million.<\/p>\r\n

Due to the materiality of the amounts involved, headline earnings and headline earnings per share are also presented by excluding Remgro\u2019s share of Mediclinic\u2019s refinancing costs referred to above.<\/p>\r\n

RESULTS<\/h2>\r\n

Headline earnings<\/h4>\r\n

Headline earnings for the year to 30 June 2014 amounted to R6 635 million compared to R4 196 million for the year to 30 June 2013, representing an increase of 58.1%, whereas headline earnings per share increased by 58.2% from 817.1 cents to 1 292.4 cents.<\/p>\r\n

However, excluding the effect of the once-off items relating to Mediclinic\u2019s refinancing transaction referred to earlier, headline earnings increased by 20.5% from R5 508 million to R6 635 million, whereas headline earnings per share also increased by 20.5% from 1 072.6 cents to 1 292.4 cents, as presented in the table below.<\/p>\r\n<\/div>\r\n<\/div>\r\n

\r\n
\r\n

Comparable Headline Earnings Increased by 20.5%<\/p>\r\n<\/div>\r\n<\/div>\r\n\r\n

\r\n\r\n
\r\n
<\/div>\r\n

Salient Features<\/h2>\r\n\"Salient\r\n
<\/div>\r\n

Contribution to Headline Earnings by Reporting Platform<\/h2>\r\n\r\n\"Contribution\r\n\r\nRefer to the composition of headline earnings<\/a> for further information.<\/small>\r\n<\/div>\r\n<\/div>\r\n
<\/div>\r\n
\r\n
\r\n

Commentary on reporting platforms\u2019 performance<\/h4>\r\n

Food, liquor and home care<\/em><\/h4>\r\n

The contribution from food, liquor and homecare to Remgro\u2019s headline earnings amounted to R795 million (2013: R1 123 million), representing a decrease of 29.2%. This decrease is mainly the result of lower contributions from RCL Foods and TSB. RCL Foods reported a headline loss of R303 million for the year under review (2013: R29 million profit), with Remgro\u2019s share of this loss amounting to R239 million (2013: R21 million profit). During the year under review RCL Foods\u2019 results were negatively affected by the following items:<\/p>\r\n