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Hagar — Interim / Quarterly Report 2016
Jun 29, 2016
2196_rns_2016-06-29_ff794fe8-afc9-40c5-ac2e-7828f4d54406.pdf
Interim / Quarterly Report
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Hagar hf.
Condensed Consolidated Interim Financial Statements
1 March - 31 May 2016
Hagar hf.
Hagasmára 1
201 Kópavogi
Iceland
Reg. no. 670203-2120
Contents
Endorsement and Signatures by the Board of Directors and the CEO ... 3
Consolidated Statement of Comprehensive Income ... 4
Consolidated Balance Sheet ... 5
Consolidated Statement of Changes in Equity ... 6
Consolidated Statement of Cash Flows ... 7
Notes to the Consolidated Interim Financial Statements ... 8
Condensed Consolidated Interim Financial Statement 31 May 2016
Endorsement and Signatures by the Board of Directors and the CEO
The condensed consolidated interim financial statements of Hagar hf. ("the Company") for the period 1 March to 31 May 2016 have been prepared in accordance with International Financial Reporting Standards (IFRSs) for interim financial statements (IAS 34). The financial statements comprise the consolidated interim financial statements of Hagar hf. and its subsidiaries, together referred to as the "Group". The Company's auditors have not audited or reviewed these interim financial statements.
According to the statement of comprehensive income, profit of the Group for the period amounted to ISK 948 million. According to the balance sheet, equity at the end of the period amounted to ISK 17.316 million.
On 3 June, the Annual General Meeting of the Company approved that a ISK 1.70 per share dividend shall be paid to shareholders. The dividend payment in the amount of ISK 1.992 million was paid on 24 June 2016.
Statement by the Board of Directors and the CEO
To the best of our knowledge, the condensed consolidated interim financial statements give a true and fair view of the consolidated financial performance of the Company for the three month period ended 31 May 2016, its assets, liabilities and consolidated financial position as at 31 May 2016 and its consolidated cash flow for the period then ended in accordance with International Financial Reporting Standards (IFRSs) for interim financial statements (IAS 34).
The Board of Directors and the CEO have today discussed the condensed consolidated interim financial statements of Hagar hf. for the period 1 March to 31 May 2016 and confirm them by means of their signatures.
Kópavogur, 29 June 2016
The Board of Directors:
Kristín Friðgeirsdóttir
Erna Gísladóttir
Salvör Nordal
Sigurður Arnar Sigurðsson
Stefán Árni Auðólfsson
CEO:
Finnur Árnason
Condensed Consolidated Interim Financial Statement 31 May 2016
Consolidated Statement of Comprehensive Income for the three months ended 31 May 2016
| | Note | 2016
1.3.-31.5. | 2015
1.3.-31.5. |
| --- | --- | --- | --- |
| Sales | | 19.981 | 18.668 |
| Cost of goods sold | | ( 15.069) | ( 14.183) |
| Gross profit | | 4.912 | 4.485 |
| Other operating income | | 54 | 45 |
| Salaries and salary-related expenses | | ( 1.940) | ( 1.697) |
| Other operating expenses | | ( 1.653) | ( 1.621) |
| Profit from operating activities before depreciation and amortisation | | 1.373 | 1.212 |
| Depreciation and amortisation | 7 | ( 191) | ( 171) |
| Profit from operating activities | | 1.182 | 1.041 |
| Finance income | | 82 | 48 |
| Finance expenses | | ( 79) | ( 75) |
| Net finance income (expense) | 8 | 3 | ( 27) |
| Profit before income tax | | 1.185 | 1.014 |
| Income tax | | ( 237) | ( 203) |
| Comprehensive income for the period | | 948 | 811 |
| Earnings per share: | | | |
| Basic and diluted earnings per share of ISK 1 | | 0,81 | 0,69 |
The notes on pages 8 to 10 are an integral part of these financial statements.
Condensed Consolidated Interim Financial Statement 31 May 2016
Amounts are in ISK million
Consolidated Balance Sheet as at 31 May 2016
| Note | 31.5.2016 | 29.2.2016 | |
|---|---|---|---|
| Assets | |||
| Operating assets | 9.008 | 8.956 | |
| Intangible assets | 7.724 | 7.728 | |
| Total non-current assets | 16.732 | 16.684 | |
| Inventories | 9 | 5.342 | 4.756 |
| Trade and other receivables | 591 | 660 | |
| Trade receivable - customers' credit cards | 4.239 | 3.795 | |
| Cash and cash equivalents | 4.733 | 3.810 | |
| Total current assets | 14.905 | 13.021 | |
| Total assets | 31.637 | 29.705 | |
| Equity | |||
| Share capital | 1.172 | 1.172 | |
| Share premium | 1.272 | 1.272 | |
| Retained earnings | 14.872 | 13.924 | |
| Total equity | 17.316 | 16.368 | |
| Liabilities | |||
| Loans and borrowings | 10 | 3.560 | 3.748 |
| Deferred income tax liability | 424 | 509 | |
| Total non-current liabilities | 3.984 | 4.257 | |
| Loans and borrowings | 10 | 765 | 763 |
| Trade and other payables | 11 | 8.188 | 7.018 |
| Current tax liabilities | 959 | 874 | |
| Provisions | 425 | 425 | |
| Total current liabilities | 10.337 | 9.080 | |
| Total liabilities | 14.321 | 13.337 | |
| Total equity and liabilities | 31.637 | 29.705 |
The notes on pages 8 to 10 are an integral part of these financial statements.
Condensed Consolidated Interim Financial Statement 31 May 2016
Amounts are in ISK million
Consolidated Statement of Changes in Equity for the three months ended 31 May 2016
| Share capital | Share premium | Retained earnings | Total equity | |
|---|---|---|---|---|
| Changes in equity from 1 March to 31 May 2015: | ||||
| Equity at 1 March 2015 | 1.172 | 1.272 | 12.320 | 14.764 |
| Comprehensive income for the period | 811 | 811 | ||
| Equity at 31 May 2015 | 1.172 | 1.272 | 13.131 | 15.575 |
| Changes in equity from 1 March to 31 May 2016: | ||||
| Equity at 1 March 2016 | 1.172 | 1.272 | 13.924 | 16.368 |
| Comprehensive income for the period | 948 | 948 | ||
| Equity at 31 May 2016 | 1.172 | 1.272 | 14.872 | 17.316 |
On 3 June, the Annual General Meeting of the Company approved that a ISK 1.70 per share dividend shall be paid to shareholders. The dividend payment in the amount of ISK 1.992 million was paid on 24 June 2016. The effect of the dividend has not been recognised to these financial statements as it was approved after the reporting date.
The notes on pages 8 to 10 are an integral part of these financial statements.
Condensed Consolidated Interim Financial Statement 31 May 2016
Amounts are in ISK million
Consolidated Statement of Cash Flows for the three months ended 31 May 2016
| | Note | 2016
1.3.-31.5. | 2015
1.3.-31.5. |
| --- | --- | --- | --- |
| Cash flows from operating activities | | | |
| Profit for the period | | 948 | 811 |
| Adjustment for: | | | |
| Gain on sale of assets | | ( 1) | ( 3) |
| Incentives from operating lease | | ( 10) | ( 11) |
| Depreciation and amortisation | 7 | 191 | 171 |
| Net finance (income) expense | 8 | ( 3) | 27 |
| Income tax | | 237 | 203 |
| Working capital provided by operating activities | | 1.362 | 1.198 |
| Change in current assets | | ( 961) | 184 |
| Change in current liabilities | | 1.184 | 1.107 |
| Cash from operations before interest and taxes | | 1.585 | 2.489 |
| Interest income received | | 80 | 51 |
| Interest expenses paid | | ( 76) | ( 76) |
| Income taxes paid | | ( 239) | ( 261) |
| Net cash provided by operating activities | | 1.350 | 2.203 |
| Cash flows used in investing activities | | | |
| Acquisition of operating assets | | ( 251) | ( 561) |
| Proceeds from the sale of operating assets | | 12 | 11 |
| Net cash used in investing activities | | ( 239) | ( 550) |
| Cash flows used in financing activities | | | |
| Repayment of borrowings | | ( 188) | ( 187) |
| Net increase in cash and cash equivalents | | 923 | 1.466 |
| Cash and cash equivalents at beginning of the period | | 3.810 | 3.348 |
| Cash and cash equivalents at 31 May | | 4.733 | 4.814 |
The notes on pages 8 to 10 are an integral part of these financial statements.
Condensed Consolidated Interim Financial Statement 31 May 2016
Amounts are in ISK million
Notes to the Consolidated Interim Financial Statements
1. Reporting entity
Hagar hf. (the "Company") is a limited liability company incorporated and domiciled in Iceland. The address of the Company's registered office is Hagasmári 1, Kópavogur, Iceland. The condensed consolidated interim financial statements of the Company as at and for the three months ended 31 May 2016 comprise the Company and its subsidiaries, together referred to as the "Group" and individually as "Group entities". The main activity of the Group is retail.
2. Statement of compliance
These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting.
They do not include all of the information required for a complete set of consolidated annual financial statements and should be read in conjunction with the consolidated financial statements of the Company as at and for the year ended 29 February 2016, which are available on the Company's website, www.hagar.is, and the OMX Nasdaq Iceland website, www.nasdaqomx.com.
The condensed consolidated interim financial statements were approved by the Board of Directors on 29 June 2016.
3. Significant accounting policies
The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 29 February 2016.
These consolidated financial statements are presented in Icelandic kronas (ISK), which is the Company's functional currency. All financial information presented in Icelandic kronas has been rounded to the nearest million.
Changes in accounting policies
The Group has adopted all new standards and amendments to standards, including any consequential amendments to other standards as they have been endorsed by the EU, with a date of initial application of 1 January 2016. The adoption does not have any effect on the Group's financial statements.
4. Estimates
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimating uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 29 February 2016.
5. Segment reporting
The Group does not present business segments as its operation is mainly in retail and in Iceland.
6. Goodwill
Impairment tests
There was no indication of impairment at 31 May 2016 and therefore goodwill was not tested for impairment.
Condensed Consolidated Interim Financial Statement 31 May 2016
Amounts are in ISK million
Notes, cont.:
7. Depreciation and amortisation
Depreciation and amortisation is specified as follows:
| 2016 | 2015 | |
|---|---|---|
| 1.3-31.5. | 1.3-31.5. | |
| Depreciation of operating assets | 187 | 169 |
| Amortisation of intangible assets | 4 | 2 |
| 191 | 171 |
8. Finance income and expense
Finance income and finance expense are specified as follows:
Interest income ... 82 47
Net foreign exchange gain ... 0 1
Total finance income ... 82 48
Interest expense and indexation ... ( 79) ( 75)
Total finance expense ... ( 79) ( 75)
Net finance income (expense) ... 3 ( 27)
9. Inventories
Inventories are specified as follows: 31.5.2016 29.2.2016
Groceries ... 3.668 3.213
Non food goods ... 1.344 1.242
Goods in transit ... 330 301
Total inventories ... 5.342 4.756
Inventory write-down at period-end ... 103 103
10. Loans and borrowings
Loans and borrowings are specified as follows:
Non-current loans and borrowings
Secured bank loans ... 3.424 3.605
Finance lease liability ... 136 143
Total non-current loans and borrowings ... 3.560 3.748
Current loans and borrowings
Current portion of secured bank loans ... 740 739
Current portion of finance lease liability ... 25 24
Total current loans and borrowings ... 765 763
Total interest bearing loans and borrowings ... 4.325 4.511
Terms and conditions of outstanding loans were as follows:
| Weighted average interest rate | Carrying amount 31.5.2016 | Carrying amount 29.2.2016 | ||
|---|---|---|---|---|
| 31.5.2016 | 29.2.2016 | |||
| Debt in ISK, non-indexed | 7,15% | 7,15% | 4.164 | 4.344 |
| Debt in ISK, indexed | 10,50% | 10,50% | 161 | 167 |
| Non-current loans and borrowing, incl. current portion | 4.325 | 4.511 | ||
| Current portion of non-current loans and borrowings | ( 765) | ( 763) | ||
| Total non-current loans and borrowings | 3.560 | 3.748 |
Condensed Consolidated Interim Financial Statement 31 May 2016
Amounts are in ISK million
Notes, cont.:
- Loans and borrowings, contd.
| Contractual repayments of loans and borrowings are specified as follows: | 31.5.2016 | 29.2.2016 |
|---|---|---|
| Repayments in 1 year or less | 765 | 763 |
| Repayments in 1 - 2 years | 768 | 767 |
| Repayments in 2 - 3 years | 773 | 771 |
| Repayments in 3 - 4 years | 1.972 | 2.165 |
| Repayments in 4 - 5 years | 47 | 45 |
| Total | 4.325 | 4.511 |
The fair value of financial assets and liabilities is equal to the carrying amount.
- Trade and other payables
Trade and other payables are specified as follows:
| Trade payables | 5.787 | 4.979 |
|---|---|---|
| Other payables | 2.387 | 2.014 |
| Incentives from operating leases | 14 | 25 |
| Total trade and other payables | 8.188 | 7.018 |
- Group entities
At 31 May 2016 the Company's subsidiaries were six. The subsidiaries included in the condensed consolidated interim financial statements are the following:
| Place of registration and operation | Ownership interest | ||
|---|---|---|---|
| 31.5.2016 | 29.2.2016 | ||
| Hagar verslanir ehf. | Iceland | 100% | 100% |
| Bananar ehf. | Iceland | 100% | 100% |
| Ferskar kjötvörur ehf. | Iceland | 100% | 100% |
| Noron ehf. | Iceland | 100% | 100% |
| Íshöfn ehf. | Iceland | 100% | 100% |
| Eignarhaldsfélagið Dagar ehf. | Iceland | 100% | 100% |
| Gargon ehf. | Iceland | - | 100% |
The Parent Company has pledged all its shares in the above mentioned subsidiaries as collateral for loans and borrowings, except for Gargon ehf.
At 1 March 2016 the subsidiary, Gargon ehf., merged with the parent company.
- Financial Ratios
The Group's primary financial ratios are as follows:
| Balance Sheet: | 31.5.2016 | 29.2.2016 |
|---|---|---|
| Current ratio - Current assets/current liabilities | 1,44 | 1,43 |
| Equity ratio - equity/total capital | 54,7% | 55,1% |
| Internal value of share capital | 14,77 | 13,97 |
Condensed Consolidated Interim Financial Statement 31 May 2016
Amounts are in ISK million