The group said that it had adopted the IFRS 9 (hedge accounting) and IFRS 16 (leases) accounting standards for the first time during the period under review. As a result, basic and diluted earnings per share (Eps) would decline by at least 33.7 percent for the six months to end June and basic and diluted Eps would decline by between 23.7 and 33.7 percent, to be between 8.1 cents a share and 9.3c, down from last year’s 12.2c.
The impact of adoption of IFRS 16 will result in the reduction in rental expense of R58 million and would lead to an increase in depreciation expense of R46m.
The group, which owns brands such as Denny Mushrooms and Lancewood, would also see an increase in interest expense of R25m and a reduction in profit before taxation of R13m.
However, despite a weak retail and consumer environment, the group expects to report organic revenue growth of 4.5 percent compared to last year of 3.7 percent.