TIDMDFI TIDMJAR

RNS Number : 0661U

DFI Retail Group Holdings Ltd

28 July 2022

 
 Announcement 
 

28th July 2022

The following announcement was issued today to a Regulatory Information Service approved by the Financial Conduct Authority in the United Kingdom.

DFI RETAIL GROUP HOLDINGS LIMITED

HALF-YEAR RESULTS FOR THE SIX MONTHSED 30TH JUNE 2022

Highlights

   --       Underlying loss of US$52 million, including US$60 million loss from associates 

-- Subsidiaries delivered underlying operating profit of US$76 million, 51% lower than prior year

   --       Strong profit growth for Health and Beauty 
   --       Grocery Retail and Convenience profits impacted by pandemic and inflation 
   --       Increased investments in digital to drive long-term sustainable growth 
   --       Interim dividend of USc1.00 per share declared 

" The pandemic has continued to have a significant adverse effect on all of the Group's businesses, with the first quarter particularly difficult on the Chinese mainland and in Hong Kong. Profits are also being impacted by supply chain and inflationary pressures. As a result, the Group's profits for the full year are expected to be materially lower than those of 2021. The Group remains confident, however, in the strengths of the Group's banners and believes that the additional investment being made to advance digital capabilities, and improve stores and the Group's operating standards, will deliver sustainable growth for the Group, as the impact of the pandemic recedes."

Ben Keswick

Chairman

Results

 
 
                                                                     (unaudited) 
                                                           Six months ended 30th 
                                                                            June 
                                                               2022         2021  Change 
                                                               US$m         US$m       % 
 
 
  Combined total sales including 100% 
   of associates and joint ventures                          14,028       13,950      +1 
 Sales                                                        4,483        4,537     - 1 
  Underlying (loss)/profit attributable 
   to shareholders*                                            (52)           32     n/a 
 (Loss)/profit attributable to shareholders                    (58)           17     n/a 
 
 
                                                                USc          USc       % 
 
 
 Underlying (loss)/earnings per share*                       (3.81)         2.38     n/a 
 (Loss)/earnings per share                                   (4.25)         1.24     n/a 
 Interim dividend per share                                    1.00         3.00    - 67 
 
  * the Group uses 'underlying (loss)/profit' in its internal financial 
   reporting to distinguish between ongoing business performance 
   and non-trading items, as more fully described in note 8 to the 
   condensed financial statements. Management considers this to 
   be a key measure which provides additional information to enhance 
   understanding of the Group's underlying business performance. 
 

The interim dividend of USc1.00 per share will be payable on 12th October 2022 to shareholders on the register of members at

the close of business on 19th August 2022.

DFI RETAIL GROUP HOLDINGS LIMITED

HALF-YEAR RE SU LT S FOR THE SIX MONTHSED 30TH JUNE 2022

The Group's performance in the first half of 2022 was impacted by a number of challenges. Within the Group's subsidiaries, strong Health and Beauty profit growth and an increased contribution from IKEA were offset by reduced profit contributions from Grocery Retail and Convenience, which faced a combination of inflation and continuing customer behaviour shifts driven by the pandemic, with the latter leading to reduced levels of eating-at-home. The Group increased investments in digital capacity and capability during the period. While these reduced profit in the period, they are necessary to meet customers' evolving needs for on- and off-line service and are made with a view to driving long-term sustainable growth and value.

The Group's overall financial performance was impacted materially by the performance of key associates in the period. Results were particularly impacted by the substantial loss incurred by Yonghui for the fourth quarter of 2021. Maxim's performance was also significantly adversely impacted by the surge in COVID-19 cases within Hong Kong and resulting Government-imposed restrictions on dining.

RESULTS

Total first half sales for the Group, including 100% of associates and joint ventures, increased by 1% to US$14 billion. Reported subsidiary sales reduced by 1% to US$4.5 billion. However, underlying subsidiary sales, excluding the impact of the Giant Indonesia restructuring in the second half of 2021, increased by 2%. Strong revenue growth in Health and Beauty and the contribution from new IKEA store openings were partially offset by lower sales within the Grocery Retail division, primarily driven by the easing of movement restrictions in Southeast Asia, which led to a reduction in eating-at-home by customers, and store renovation disruptions in Singapore.

The Group reported an underlying loss of US$52 million for the first half, with US$60 million loss attributable to associates. The Group's share of Yonghui's underlying results included US$64 million of loss arising from Yonghui's performance in the fourth quarter of 2021. In addition, key associate Maxim's contributed an underlying loss of US$26 million to the Group's results in the first half, due to the impact of movement restrictions imposed in Hong Kong.

Within the Group's subsidiaries, the profitability of the Health and Beauty division increased significantly as a result of a strong recovery in revenue across both North Asia and Southeast Asia. Overall subsidiary underlying operating profit was, however, US$76 million for the period, a reduction of US$78 million over the prior comparable period, as strong profit growth within Health and Beauty and an increased contribution from IKEA were offset by reduced profit contributions from Grocery Retail and Convenience, as well as operating expense investments to enhance digital capacity and marketing.

Operating cash flow, after lease payments, for the period was a net inflow of US$76 million, compared with US$97 million in the first half of 2021. As at 30th June 2022, the Group's net debt was US$995 million, compared with US$844 million at 31st December 2021.

Given the loss incurred in the first half of the year and the Group's commitment to maintaining a strong balance sheet position while supporting ongoing investments in business and digital transformation, the Board has reduced the interim dividend for 2022 to USc1.00 per share.

OPERATING PERFORMANCE

Like-for-like sales for the Group's Grocery Retail division in the first half were slightly behind the prior year. Good like-for-like growth in North Asia was driven by pantry-stocking behaviour and strong in-store execution in the face of challenging external conditions and supply chain constraints, particularly in the first quarter. Sales performance in Southeast Asia was impacted by the easing of movement restrictions, which led to a reduction in eating-at-home, store renovation disruptions in Singapore and stock availability issues in Malaysia. Overall profitability, however, was behind the comparable period last year, due to a combination of inflation impacting cost of goods sold, operating cost pressures (particularly electricity and labour costs) and e-commerce investment costs.

The Group's Convenience business saw varying operating performance across regions in the first half. In Singapore, a relaxation of movement restrictions led to strong sales and profit recovery. Within North Asia, disruption caused by rising COVID-19 cases significantly impacted both like-for-like sales and profitability. In Hong Kong, the fifth COVID wave in the first quarter significantly impacted customer traffic. On the Chinese mainland, ongoing COVID-19 disruptions continued to have a significant impact on like-for-like sales.

The Health and Beauty division reported strong sales recovery in the first half. Mannings Hong Kong's like-for-like sales were supported by effective in-store execution and a surge in demand for COVID-19 related products and over-the-counter medicines. Guardian reported double-digit like-for-like growth across key geographies, driven by a combination of recovery in mall and tourist locations, strong demand for COVID-19 related products and effective store-level execution. Profitability also grew strongly in the first half, driven by a combination of strong sales recovery, effective promotion management and cost control.

Revenue for the Home Furnishings division increased relative to the corresponding period in 2021 due to the annualisation impact of newly-opened stores in the prior year and strong e-commerce sales. Like-for-like sales were adversely impacted in the first quarter as the pandemic continued to disrupt store operating capacity and there was significantly reduced stock availability. Despite the ongoing challenges faced by IKEA during the first half, profitability was ahead of the same period last year, with like-for-like sales improving in the second quarter.

The performance of Maxim's, the Group's 50%-owned associate, was severely impacted by Government-imposed dining restrictions in Hong Kong, as well as temporary lockdowns on the Chinese mainland. Like-for-like sales, however, recovered in Hong Kong over the course of the second quarter as restrictions eased.

The Group's share of Yonghui's underlying loss for the six months ended March 2022 was US$38 million. Encouragingly, Yonghui reported improvements in like-for-like sales and a return to profitability in the first quarter of 2022. In addition, Robinsons Retail reported solid sales and profit growth contribution for the first half. Robinsons Retail reported in the first quarter of 2022 that its drugstores, department stores and specialty segments delivered strong sales recovery reflecting increased economic activity as restrictions in the Philippines started to ease in February 2022.

BUSINESS DEVELOPMENTS

Driving digital innovation remains a key strategic priority for DFI Retail Group. In July 2020, DFI launched its yuu coalition loyalty programme, a critical milestone in driving DFI's modernisation and digital transformation. Since its launch, yuu has exceeded expectations and has now welcomed over four million members. The yuu-niverse has grown to include Maxim's restaurants, insurance partners and, most recently, a fuel partner. In May 2022, yuu-to-me was officially launched, offering customers an integrated one-stop online shopping experience and home delivery to customers across leading Hong Kong brands on one yuu mobile app. Initial performance has been encouraging. Digital remains a key priority for the Group, and the Group expects to continue investing to drive long-term value for shareholders.

PEOPLE

The first quarter was a particularly challenging period in our core market of Hong Kong, with a significant surge in COVID-19 cases and consequent constraints on the supply chain and labour shortages. We express deep gratitude to our team members across the Group for their continuing dedication and resolve to putting our customers first during these challenging times.

OUTLOOK

The pandemic has continued to have a significant adverse effect on all of the Group's businesses, with the first quarter particularly difficult on the Chinese mainland and in Hong Kong. Profits are also being impacted by supply chain and inflationary pressures. As a result, the Group's profits for the full year are expected to be materially lower than those of 2021. The Group remains confident, however, in the strengths of the Group's banners and believes that the additional investment being made to advance digital capabilities, and improve stores and the Group's operating standards, will deliver sustainable growth for the Group, as the impact of the pandemic recedes.

Ben Keswick

Chair m an

 
 
DFI Retail Group Holdings Limited 
 Consolidated Profit and Loss Account 
 for the six months ended 30th June 2022 
 
 
                                                  (unaudited) 
                                           Six months ended 30th June                              Year ended 31st December 
                                    2022                                 2021                                 2021 
                    -----------  -----------  ---------  -----------  -----------  ---------  -----------  -----------  --------- 
                     Underlying                           Underlying                           Underlying 
                       business  Non-trading                business  Non-trading                business  Non-trading 
                    performance        items  Total      performance        items      Total  performance        items      Total 
                           US$m         US$m   US$m             US$m         US$m       US$m         US$m         US$m       US$m 
 
 
Sales (note 2)          4,483.1            -    4,483.1      4,536.8            -    4,536.8      9,015.4            -    9,015.4 
Cost of sales         (3,080.4)            -  (3,080.4)    (3,123.9)            -  (3,123.9)    (6,145.7)            -  (6,145.7) 
                    -----------  -----------  ---------  -----------  -----------  ---------  -----------  -----------  --------- 
 
Gross margin            1,402.7            -    1,402.7      1,412.9            -    1,412.9      2,869.7            -    2,869.7 
Other operating 
 income                    94.6          6.6      101.2        105.2          1.3      106.5        207.1         28.4      235.5 
Selling and 
 distribution 
 costs                (1,175.5)            -  (1,175.5)    (1,114.8)            -  (1,114.8)    (2,310.1)            -  (2,310.1) 
Administration and 
 other operating 
 expenses               (245.6)        (7.2)    (252.8)      (248.7)       (35.9)    (284.6)      (452.9)       (31.4)    (484.3) 
                    -----------  -----------  ---------  -----------  -----------  ---------  -----------  -----------  --------- 
 
Operating profit 
 (note 3)                  76.2        (0.6)       75.6        154.6       (34.6)      120.0        313.8        (3.0)      310.8 
 
 
Financing charges        (58.2)            -     (58.2)       (60.5)            -     (60.5)      (119.5)            -    (119.5) 
Financing income            1.6            -        1.6          0.5            -        0.5          0.7            -        0.7 
 
 
Net financing 
 charges 
 (note 4)                (56.6)            -     (56.6)       (60.0)            -     (60.0)      (118.8)            -    (118.8) 
Share of results 
 of associates and 
 joint ventures 
 (note 
 5)                      (59.6)        (5.6)     (65.2)       (43.6)         15.5     (28.1)       (40.4)        (1.4)     (41.8) 
                    -----------  -----------  ---------  -----------  -----------  ---------  -----------  -----------  --------- 
 
(Loss)/profit 
 before 
 tax                     (40.0)        (6.2)     (46.2)         51.0       (19.1)       31.9        154.6        (4.4)      150.2 
Tax (note 6)             (18.3)            -     (18.3)       (19.0)          0.2     (18.8)       (60.0)          1.1     (58.9) 
                    -----------  -----------  ---------  -----------  -----------  ---------  -----------  -----------  --------- 
 
(Loss)/profit 
 after 
 tax                     (58.3)        (6.2)     (64.5)         32.0       (18.9)       13.1         94.6        (3.3)       91.3 
                    -----------  -----------  ---------  -----------  -----------  ---------  -----------  -----------  --------- 
 
Attributable to: 
Shareholders of 
 the 
 Company                 (51.6)        (6.0)     (57.6)         32.1       (15.4)       16.7        104.6        (1.7)      102.9 
Non-controlling 
 interests                (6.7)        (0.2)      (6.9)        (0.1)        (3.5)      (3.6)       (10.0)        (1.6)     (11.6) 
                    -----------  -----------  ---------  -----------  -----------  ---------  -----------  -----------  --------- 
 
                         (58.3)        (6.2)     (64.5)         32.0       (18.9)       13.1         94.6        (3.3)       91.3 
                    -----------  -----------  ---------  -----------  -----------  ---------  -----------  -----------  --------- 
 
                           US c                    US c         US c                    US c         US c                    US c 
 
 
(Loss)/earnings 
per 
share (note 7) 
- basic                  (3.81)                  (4.25)         2.38                    1.24         7.73                    7.61 
- diluted                (3.81)                  (4.25)         2.37                    1.24         7.73                    7.61 
                    -----------               ---------  -----------               ---------  -----------               --------- 
 
 
 
 
 
 
DFI Retail Group Holdings Limited 
 Consolidated Statement of Comprehensive Income 
 for the six months ended 30th June 2022 
 
 
                                                      (unaudited) 
                                                 Six months ended      Year ended 
                                                        30th June   31st December 
                                                    2022     2021            2021 
                                                    US$m     US$m            US$m 
 
 
(L oss)/profit for the period                     (64.5)     13.1            91.3 
 
Other comprehensive (expense)/income 
                                              ----------  -------  -------------- 
 
Items that will not be reclassified 
 to profit or loss: 
                                              ----------  -------  -------------- 
 
Remeasurements of defined benefit 
 plans                                               0.4        -            22.1 
Tax relating to items that will 
 not be reclassified                               (0.1)        -           (3.5) 
 
 
                                                     0.3        -            18.6 
Share of other comprehensive income/ 
 (expense) of associates and joint 
 ventures                                            1.0    (0.5)             1.0 
                                              ----------  -------  -------------- 
 
                                                     1.3    (0.5)            19.6 
                                              ----------  -------  -------------- 
 
Items that may be reclassified 
 subsequently to profit or loss: 
 
Net exchange translation differences 
 
  *    net loss arising during the period        (108.1)    (5.4)          (19.8) 
 
 
Cash flow hedges 
                                              ----------  -------  -------------- 
 
 
  *    net gain arising during the period           29.2      7.2            10.1 
 
  *    transfer to profit and loss                 (2.1)      5.5            11.6 
 
 
                                                    27.1     12.7            21.7 
 
Tax relating to items that may 
 be reclassified                                   (1.7)    (2.5)           (3.3) 
 
Share of other comprehensive expense 
 of associates and joint ventures                  (4.3)    (0.5)           (1.1) 
                                              ----------  -------  -------------- 
 
                                                  (87.0)      4.3           (2.5) 
                                              ----------  -------  -------------- 
 
 
Other comprehensive (expense)/income 
 for the period, net of tax                       (85.7)      3.8            17.1 
                                              ----------  -------  -------------- 
 
Total comprehensive income for 
 the period                                      (150.2)     16.9           108.4 
                                              ----------  -------  -------------- 
 
Attributable to: 
Shareholders of the Company                      (144.1)     20.6           120.1 
Non-controlling interests                          (6.1)    (3.7)          (11.7) 
                                              ----------  -------  -------------- 
 
                                                 (150.2)     16.9           108.4 
                                              ----------  -------  -------------- 
 
 
 
 
DFI Retail Group Holdings Limited 
 Consolidated Balance Sheet 
 at 30th June 2022 
 
 
                                             (unaudited)    At 31st 
                                            At 30th June   December 
                                         2022 
                                         US$m  2021 US$m  2021 US$m 
 
 
Net operating assets 
Intangible assets                       404.8      406.6      411.9 
Tangible assets                         760.7      754.5      803.3 
Right-of-use assets                   2,614.8    2,795.6   2, 747.6 
Associates and joint ventures         1,968.9    2,134.5    2,164.3 
Other investments                        21.7        6.2       11.5 
Non-current debtors                     125.4      112.3      113.2 
Deferred tax assets                      17.8       13.6       14.7 
Pension assets                            9.3          -       13.3 
 
Non-current assets                    5,923.4    6,223.3    6,279.8 
 
 
Stocks                                  793.1      745.8      781.9 
Current debtors                         211.2      219.5      232.0 
Current tax assets                       17.5       21.1       15.6 
Cash and bank balances                  219.1      262.7      210.4 
                                    ---------  ---------  --------- 
 
                                      1,240.9    1,249.1    1,239.9 
Non-current assets held for sale 
 (note 9)                                81.8       19.9       85.1 
 
Current assets                        1,322.7    1,269.0    1,325.0 
                                    ---------  ---------  --------- 
 
Current creditors                   (1,976.7)  (1,892.4)  (2,081.3) 
Current borrowings                    (799.8)    (692.5)    (743.5) 
Current lease liabilities             (602.0)    (633.0)    (640.3) 
Current tax liabilities                (32.2)     (52.6)     (26.6) 
Current provisions                     (38.0)     (67.8)     (49.2) 
                                    ---------  ---------  --------- 
 
Current liabilities                 (3,448.7)  (3,338.3)  (3,540.9) 
                                    ---------  ---------  --------- 
 
 
Net current liabilities             (2,126.0)  (2,069.3)  (2,215.9) 
 
 
Long-term borrowings                  (414.0)    (505.5)    (310.8) 
Non-current lease liabilities       (2,212.4)  (2,324.7)  (2,320.0) 
Deferred tax liabilities               (42.9)     (37.5)     (44.0) 
Pension liabilities                     (5.7)     (16.1)      (7.5) 
Non-current creditors                  (10.0)     (32.6)     (11.4) 
Non-current provisions                (105.9)    (105.1)    (103.0) 
 
 
Non-current liabilities             (2,790.9)  (3,021.5)  (2,796.7) 
                                    --------- 
 
                                      1,006.5    1,132.5    1,267.2 
                                    ---------  ---------  --------- 
 
 
 
Total equity 
Share capital                            75.2     75.2     75. 2 
Share premium and capital reserves       65.0     60.2      60.2 
Revenue and other reserves              872.6    987.2  1, 131.8 
                                      -------  -------  -------- 
 
Shareholders' funds                   1,012.8  1,122.6   1,267.2 
Non-controlling interests               (6.3)      9.9         - 
                                      -------           -------- 
 
                                      1,006.5  1,132.5   1,267.2 
                                      -------  -------  -------- 
 
 
 
 
DFI Retail Group Holdings Limited 
 Consolidated Statement of Changes in Equity 
 for the six months ended 30th June 2022 
 
 
                                                                  Attributable       Attributable 
                                                     Revenue   to shareholders                 to 
                      Share     Share    Capital   and other            of the    non-controlling    Total 
                    capital   premium   reserves    reserves           Company          interests   equity 
                       US$m      US$m       US$m        US$m              US$m               US$m     US$m 
 
 
Six months ended 
30th June 2022 
(unaudited) 
At 1st January 
 2022                  75.2      35.6       24.6     1,131.8           1,267.2                  -  1,267.2 
Total 
 comprehensive 
 income                   -         -          -     (144.1)           (144.1)              (6.1)  (150.2) 
Dividends paid by 
 the Company 
 (note 10)                -         -          -      (87.4)            (87.4)                  -   (87.4) 
Dividends paid to 
 non-controlling 
 interests                -         -          -           -                 -              (0.2)    (0.2) 
Share-based 
 long-term 
 incentive plans          -         -        4.8           -               4.8                  -      4.8 
Shares purchased 
 for a 
 share-based 
 long-term 
 incentive 
 plan                     -         -          -      (20.0)            (20.0)                  -   (20.0) 
Change in 
 interests in 
 associates and 
 joint ventures           -         -          -       (7.7)             (7.7)                  -    (7.7) 
Transfer                  -       2.0      (2.0)           -                 -                  -        - 
 
At 30th June 2022      75.2      37.6       27.4       872.6           1,012.8              (6.3)  1,006.5 
 
Six months ended 
30th June 2021 
(unaudited) 
At 1st January 
 2021                  75.1      34.1       25.5     1,187.6           1,322.3               13.6  1,335.9 
Total 
 comprehensive 
 income                   -         -          -        20.6              20.6              (3.7)     16.9 
Dividends paid by 
 the Company 
 (note 10)                -         -          -     (155.6)           (155.6)                  -  (155.6) 
Exercise of 
 options                0.1         -          -           -               0.1                  -      0.1 
Share-based 
 long-term 
 incentive plans          -         -        0.6           -               0.6                  -      0.6 
Change in 
 interests in 
 associates and 
 joint ventures           -         -          -      (65.4)            (65.4)                  -   (65.4) 
Transfer                  -       1.5      (1.5)           -                 -                  -        - 
 
At 30th June 2021      75.2      35.6       24.6       987.2           1,122.6                9.9  1,132.5 
                   --------  --------  ---------  ----------  ----------------  -----------------  ------- 
 
 
                                                                  Attributable       Attributable 
                                                     Revenue   to shareholders                 to 
                      Share     Share    Capital   and other            of the    non-controlling    Total 
                    capital   premium   reserves    reserves           Company          interests   equity 
                       US$m      US$m       US$m        US$m              US$m               US$m     US$m 
 
 
Year ended 31st 
December 2021 
At 1st January 
 2021                  75.1      34.1       25.5     1,187.6           1,322.3               13.6  1,335.9 
Total 
 comprehensive 
 income                   -         -          -       120.1             120.1             (11.7)    108.4 
Dividends paid by 
 the Company              -         -          -     (196.2)           (196.2)                  -  (196.2) 
Dividends paid to 
 non-controlling 
 interests                -         -          -           -                 -              (1.9)    (1.9) 
Exercise of 
 options                0.1     (0.1)          -           -                 -                  -        - 
Share-based 
 long-term 
 incentive plans          -         -        0.7           -               0.7                  -      0.7 
Change in 
 interests in 
 associates and 
 joint ventures           -         -          -        20.3              20.3                  -     20.3 
Transfer                  -       1.6      (1.6)           -                 -                  -        - 
 
At 31st December 
 2021                  75.2      35.6       24.6     1,131.8           1,267.2                  -  1,267.2 
 
Revenue and other reserves at 30th June 2022 comprised revenue reserves of US$1,187.4 million (2021: 
US$1,212.2 
million), hedging reserves of US$34.4 million gain (2021: US$0.8 million gain) and exchange reserves of 
US$349.2 million loss (2021: US$225.8 million loss). 
 
Revenue and other reserves at 31st December 2021 comprised revenue reserves of US$1,363.1 million, hedging 
reserves of US$9.0 million gain and exchange reserves of US$240.3 million loss. 
 
 
 
DFI Retail Group Holdings Limited 
 Consolidated Cash Flow Statement 
 for the six months ended 30th June 2022 
 
 
                                                  (unaudited) 
                                             Six months ended      Year ended 
                                                    30th June   31st December 
                                              2022 
                                              US$m  2021 US$m       2021 US$m 
 
 
Operating activities 
                                          --------  ---------  -------------- 
 
Operating profit (note 3)                     75.6      120.0           310.8 
Depreciation and amortisation                437.7      439.3           885.7 
Other non-cash items                         (7.9)     (26.0)          (63.7) 
Increase in working capital                 (32.0)     (18.5)          (10.4) 
Interest received                              1.5        0.5             0.8 
Interest and other financing charges 
 paid                                       (57.8)     (59.5)         (117.2) 
Tax paid                                    (21.0)     (51.3)         (110.1) 
                                          --------  ---------  -------------- 
 
                                             396.1      404.5           895.9 
Dividends from associates and joint 
 ventures                                     11.5       23.7            46.4 
 
 
Cash flows from operating activities         407.6      428.2           942.3 
 
Investing activities 
                                          --------  ---------  -------------- 
 
Purchase of subsidiaries (note 
 12(a))                                      (8.8)          -               - 
Purchase of associates and joint 
 ventures                                        -          -           (1.6) 
Purchase of other investments (note 
 12(b))                                     (10.0)          -           (5.0) 
Purchase of intangible assets                (2.9)      (4.7)          (26.9) 
Purchase of tangible assets                (121.1)    (100.1)         (185.1) 
Sale of associates and joint ventures 
 (note 12(c))                                  6.9          -               - 
Sale of properties (note 12(d))                  -       35.0            86.3 
Sale of tangible assets                        0.8        0.5             7.6 
 
 
Cash flows from investing activities       (135.1)     (69.3)         (124.7) 
 
Financing activities 
                                          --------  ---------  -------------- 
 
Purchase of shares for a share-based 
 long-term incentive plan (note 
 12(e))                                     (20.0)          -               - 
Drawdown of borrowings                       710.5      759.3         1,248.3 
Repayment of borrowings                    (619.5)    (760.6)       (1,308.2) 
Net increase in other short-term 
 borrowings                                   83.0      100.8            88.7 
Principal elements of lease payments       (331.7)    (330.9)         (672.0) 
Dividends paid by the Company (note 
 10)                                        (87.4)    (155.6)         (196.2) 
Dividends paid to non-controlling 
 interests                                   (0.2)          -           (1.9) 
 
 
Cash flows from financing activities       (265.3)    (387.0)         (841.3) 
                                          -------- 
 
Net increase/(decrease) in cash 
 and cash equivalents                          7.2     (28.1)          (23.7) 
Cash and cash equivalents at beginning 
 of period                                   210.0      234.2           234.2 
Effect of exchange rate changes              (5.8)      (0.1)           (0.5) 
                                          --------  ---------  -------------- 
 
Cash and cash equivalents at end 
 of period (note 12(f))                      211.4      206.0           210.0 
                                          --------  ---------  -------------- 
 
 

DFI Retail Group Holdings Limited

Notes to Condensed Financial Statements

   1.    Accounting Policies and Basis of Preparation 

The condensed financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' and on a going concern basis. The condensed financial statements have not been audited or reviewed by the Group's auditors pursuant to the UK Auditing Practices Board guidance on the review of interim financial information.

There are no changes to the accounting policies as described in the 2021 annual financial statements and the Group has not early adopted any standards or amendments that have been issued but not yet effective. A number of amendments were effective from 1st January 2022. The more important amendments applicable to the Group is as follows:

Amendments to IAS 37 - Onerous Contracts - Cost of Fulfilling a Contract (effective from 1st January 2022)

The amendments clarify that for the purpose of assessing whether a contract is onerous, the cost of fulfilling the contract includes both the incremental costs of fulfilling that contract and an allocation of other costs that relate directly to fulfilling contracts. The Group applied the amendments from 1st January 2022 and there is no significant impact on the Group's consolidated financial statements.

   2.    Sales 
 
                              Including associates 
                                and joint ventures        Subsidiaries 
 
 
                                      Six months ended 30th June 
                                    2022                 2022 
                                    US$m   2021 US$m     US$m  2021 US$m 
 
 
 Analysis by operating 
  segment: 
 Food                           10,958.1    11,031.5  3,089.0    3,264.9 
 
 
 
   *    Grocery retail           9,824.0     9,903.2  2,004.8    2,190.6 
 
   *    Convenience stores       1,134.1     1,128.3  1,084.2    1,074.3 
 
 
 Health and Beauty               1,276.0     1,146.5    984.5      887.1 
 Home Furnishings                  409.6       384.8    409.6      384.8 
 Restaurants                     1,000.1     1,005.4        -          - 
 Other Retailing                   384.5       381.7        -          - 
                              ----------  ----------  -------  --------- 
 
                                14,028.3    13,949.9  4,483.1    4,536.8 
                              ----------  ----------  -------  --------- 
 

Sales including associates and joint ventures comprise 100% of sales from associates and joint ventures.

Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the Board for the purpose of resource allocation and performance assessment. DFI Retail Group operates in five segments: Food, Health and Beauty, Home Furnishings, Restaurants and Other Retailing. Food comprises grocery retail and convenience store businesses (including the Group's associate, Yonghui, a leading grocery retailer in the Chinese mainland). Health and Beauty comprises the health and beauty businesses. Home Furnishings is the Group's IKEA businesses. Restaurants is the Group's food and beverage associate, Maxim's, a leading Hong Kong restaurant chain. Other Retailing represents the department stores, specialty and Do-It-Yourself ('DIY') stores of the Group's Philippines associate, Robinsons Retail.

Sales and share of results of Yonghui and Robinsons Retail represent six months from October 2021 to March 2022 (2021: October 2020 to March 2021), based on their latest published announcements (note 5).

Set out below is an analysis of the Group's sales by geographical locations:

 
                             Including associates 
                               and joint ventures        Subsidiaries 
 
 
                                     Six months ended 30th June 
                                   2022                 2022 
                                   US$m   2021 US$m     US$m  2021 US$m 
 
 
 Analysis by geographical 
  area: 
 North Asia                    10,745.5    10,606.6  3,054.0    2,993.9 
 Southeast Asia                 3,282.8     3,343.3  1,429.1    1,542.9 
 
                               14,028.3    13,949.9  4,483.1    4,536.8 
                             ----------  ----------  -------  --------- 
 

The geographical areas covering North Asia and Southeast Asia, are determined by the geographical location of customers. North Asia comprises Hong Kong, the Chinese mainland, Macau and Taiwan. Southeast Asia comprises Singapore, Cambodia, the Philippines, Thailand, Malaysia, Indonesia, Vietnam and Brunei.

   3.    Operating Profit 
 
                                                    Six months ended 30th 
                                                                     June 
                                                       2022 
                                                       US$m     2021 US$m 
 
 
 Analysis by operating segment: 
 Food                                                  47.3         103.5 
 
 
 - Grocery retail                                      47.4          84.9 
 - Convenience stores                                 (0.1)          18.6 
 
 
 Health and Beauty                                     39.3          20.6 
 Home Furnishings                                      15.2          11.5 
                                                  ---------  ------------ 
 
                                                      101.8         135.6 
 Selling, general and administrative expenses 
  (+)                                                (64.8)        (31.2) 
                                                  ---------  ------------ 
 
 Underlying operating profit before IFRS 
  16 (*)                                               37.0         104.4 
 IFRS 16 adjustment (^)                                39.2          50.2 
                                                  ---------  ------------ 
 
 Underlying operating profit                           76.2         154.6 
 
 Non-trading items: 
 - impairment of intangible assets                    (6.3)             - 
 - gain on partial disposal of a joint 
  venture                                               6.3             - 
 - business restructuring costs                       (0.9)        (35.8) 
 - profit on sale of properties                           -           1.0 
 - change in fair value of equity investments           0.3           0.2 
 
                                                       75.6         120.0 
                                                  ---------  ------------ 
 

Set out below is an analysis of the Group's underlying operating profit by geographical locations:

 
                                                    Six months ended 30th 
                                                                     June 
                                                       2022 
                                                       US$m     2021 US$m 
 
 
 Analysis by geographical area: 
 North Asia                                           100.6         122.0 
 Southeast Asia                                         1.2          13.6 
                                                  ---------  ------------ 
 
                                                      101.8         135.6 
 Selling, general and administrative expenses 
  (+)                                                (64.8)        (31.2) 
                                                  ---------  ------------ 
 
 Underlying operating profit before IFRS 
  16 (*)                                               37.0         104.4 
 IFRS 16 adjustment(^)                                 39.2          50.2 
                                                  ---------  ------------ 
 
 Underlying operating profit                           76.2         154.6 
                                                  ---------  ------------ 
 

In relation to the COVID-19 pandemic, the Group had received government grants and rent concessions of US$ 1.1 million (202 1 : US$ 6.6 million) and US$ 14.2 million (202 1 : US$ 23.2 million) , respectively, for the six months ended 30th June 202 2 . These subsidies were accounted for as other operating income.

   (+)   Included costs incurred for e-commerce development and digital innovation. 

(*) Property lease payments and depreciation of reinstatement costs under the lease contracts were included in the Group's analysis of operating and geographical segments' results.

(^) Represented the reversal of lease payments which were accounted for on a straight-line basis, adjusted by the lease contracts recognised under IFRS 16 'Leases', primarily for the depreciation charge on right-of-use assets.

   4.    Net Financing Charges 
 
                                 Six months ended 30th 
                                                  June 
                                    2022 
                                    US$m     2021 US$m 
 
 
 Interest expense                 (55.2)        (57.4) 
 
 
 - bank loans and advances        (13.0)         (9.9) 
 - lease liabilities              (41.9)        (46.8) 
 - other loans                     (0.3)         (0.7) 
 
 
 Commitment and other fees         (3.0)         (3.1) 
                               ---------  ------------ 
 
 Financing charges                (58.2)        (60.5) 
 Financing income                    1.6           0.5 
                               ---------  ------------ 
 
                                  (56.6)        (60.0) 
                               ---------  ------------ 
 
   5.    Share of Results of Associates and Joint Ventures 
 
                                      Six months ended 30th 
                                                       June 
                                         2022 
                                         US$m     2021 US$m 
 
 
 Analysis by operating segment: 
 Food                                  (43.2)        (14.2) 
 
 
 - Grocery retail                      (43.0)        (13.1) 
 - Convenience stores                   (0.2)         (1.1) 
 
 
 Health and Beauty                        1.7           0.6 
 Restaurants                           (25.5)        (13.2) 
 Other Retailing                          1.8         (1.3) 
                                    ---------  ------------ 
 
                                       (65.2)        (28.1) 
                                    ---------  ------------ 
 

Share of results of associates and joint ventures included the following (losses)/gains from non-trading items (note 8):

 
                                                  Six months ended 30th 
                                                                   June 
                                                     2022 
                                                     US$m     2021 US$m 
 
 
 Change in fair value of Yonghui's equity 
  investments                                         5.4          29.2 
 Change in fair value of Robinsons Retail's 
  equity investments                                  1.4           0.1 
 Impairment charge of Yonghui's investments        (12.5)        (13.9) 
 Net gains from sale of debt investments 
  by Robinsons Retail                                 0.1           0.1 
 
                                                    (5.6)          15.5 
                                                ---------  ------------ 
 

Results are shown after tax and non-controlling interests in the associates and joint ventures.

In relation to the COVID-19 pandemic, included in share of results of associates and joint ventures were the Group's share of the government grants and rent concessions of US$14.6 million (202 1 : US$ 10.8 million) and US$8.8 million (2021: US$9.9 million), respectively, for the six months ended 30th June 2022.

Included six months results from October 2021 to March 2022 (2021: October 2020 to March 2021) for Yonghui and Robinsons Retail (note 2).

   6.    Tax 
 
                                                         Six months ended 30th 
                                                                          June 
                                                            2022 
                                                            US$m     2021 US$m 
 
 
 Tax charged to profit and loss is analysed 
  as follows: 
 Current tax                                              (24.9)        (26.1) 
 Deferred tax                                                6.6           7.3 
                                                       ---------  ------------ 
 
                                                          (18.3)        (18.8) 
                                                       ---------  ------------ 
 
 Tax relating to components of other comprehensive 
  income is analysed as follows: 
 Remeasurements of defined benefit plans                   (0.1)             - 
 Cash flow hedges                                          (1.7)         (2.5) 
                                                       ---------  ------------ 
 
                                                           (1.8)         (2.5) 
                                                       ---------  ------------ 
 

Tax on profits has been calculated at rates of taxation prevailing in the territories in which the Group operates. Share of tax credit of associates and joint ventures of US$0.2 million (2021: US$3.3 million) is included in share of results of associates and joint ventures.

   7.    (Loss)/Earnings per Share 

Basic (loss)/earnings per share are calculated on loss attributable to shareholders of US$57.6 million (2021: profit of US$16.7 million), and on the weighted average number of 1,353.3 million (2021: 1,352.9 million) shares in issue during the period.

Diluted ( loss)/ earnings per share are calculated on loss attributable to shareholders of US$57.6 million (2021: profit of US$16.7 million), and on the weighted average number of 1,353.5 million (2021: 1,353.1 million) shares in issue after adjusting for 0.2 million (2021: 0.2 million) shares which are deemed to be issued for no consideration under the share-based long-term incentive plans based on the average share price during the period.

Additional basic and diluted (loss)/earnings per share are also calculated based on underlying (loss)/profit attributable to shareholders. A reconciliation of earnings is set out below:

 
                                     Six months ended 30th June 
                               2022                           2021 
 
                                  Basic     Diluted             Basic     Diluted 
                                   loss        loss          earnings    earnings 
                             p er share   per share         per share   per share 
                      US$m          USc         USc  US$m         USc         USc 
 
 
 (Loss)/profit 
  attributable 
  to shareholders   (57.6)       (4.25)      (4.25)  16.7        1.24        1.24 
 Non-trading 
  items (note 
  8)                   6.0                           15.4 
                    ------                           ---- 
 
 Underlying 
  (loss)/profit 
  attributable 
  to shareholders   (51.6)       (3.81)      (3.81)  32.1        2.38        2.37 
                    ------                           ---- 
 
   8.    Non-trading Items 

Non-trading items are separately identified to provide greater understanding of the Group's underlying business performance. Items classified as non-trading items include fair value gains and losses on equity and debt investments which are measured at fair value through profit and loss; gains and losses arising from the sale of businesses, investments and properties; impairment of non-depreciable intangible assets, properties, associates and joint ventures, and other investments; provisions for the closure of businesses; acquisition-related costs in business combinations; and other credits and charges of a non-recurring nature that require inclusion in order to provide additional insight into underlying business performance.

An analysis of non-trading items after interest, tax and non-controlling interests is set out below:

 
                                              Six months ended 30th June 
                                                         2022 
                                                         US$m  2021 US$m 
 
 
 Impairment of intangible assets                        (6.3)          - 
 Gain on partial disposal of a joint venture              6.3          - 
 Business restructuring costs                           (0.7)     (32.0) 
 Profit on sale of properties                               -        0.9 
 Change in fair value of equity investments               0.3        0.2 
 Share of change in fair value of Yonghui's 
  equity investments                                      5.4       29.2 
 Share of change in fair value of Robinsons 
  Retail's equity investments                             1.4        0.1 
 Share of impairment charge of Yonghui's investments   (12.5)     (13.9) 
 Share of net gains from sale of debt investments 
  by Robinsons Retail                                     0.1        0.1 
 
                                                        (6.0)     (15.4) 
                                                       ------  --------- 
 

In April 2022, the Group acquired 100% interest in DFI Digital (Hong Kong) Limited ('Digital Hong Kong') and DFI Digital (Singapore) Pte. Limited ('Digital Singapore') from its joint venture, Retail Technology Asia Limited ('RTA'). Following the acquisitions, Digital Hong Kong and Digital Singapore became wholly-owned subsidiaries of the Group. Goodwill amounting to US$13.2 million was recognised and an impairment charge of US$6.3 million on the related goodwill was recorded during the period.

Gain on partial disposal of a joint venture represented the gain arising from the Group's disposal of its 8.5% interest in RTA, a 50% owned joint venture in May 2022. The Group's interest in RTA is reduced to 41.5% upon the completion of the transaction.

In 2021, the management decided to withdraw its Giant brand investment in Indonesia following a strategic review recommendation. Exit costs of US$30.5 million mainly relating to impairment charge against tangible assets, landlord compensation and the expected payments to employees were charged in the profit and loss.

   9.    Non-current Assets Held for Sale 

At 30th June 2022, the non-current assets held for sale represented 18 properties in Indonesia, three properties in Hong Kong and one retail property in Malaysia brought forward from 31st December 2021 remained unsold. The sale of these properties is highly probable in the remainder of the year.

10. Dividends

 
                                       Six months ended 30th June 
                                                  2022 
                                                  US$m  2021 US$m 
 
 
 Final dividend in respect of 2021 of USc6.50 
  (2020: USc11.50) per share                      87.9      155.6 
 Dividends on shares held by a subsidiary of 
  the Group 
  under a share-based long-term incentive plan   (0.5)          - 
                                                 -----  --------- 
 
                                                  87.4      155.6 
                                                 -----  --------- 
 

An interim dividend in respect of 2022 of USc1.00 (2021: USc3.00) per share amounting to a total of US$13.5 million (2021: US$40.6 million) is declared by the Board, and will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2022 .

11. Financial Instruments

Financial instruments by category

The carrying amounts of financial assets and financial liabilities at 30th June 2022 and 31st December 2021 are as follows:

 
                                           Fair value      Financial 
                               Fair value     through         assets         Other      Total 
                               of hedging      profit   at amortised     financial   carrying 
                              instruments    and loss           cost   liabilities    amounts 
                                     US$m        US$m           US$m          US$m       US$m 
 
 
 At 30th June 202 2 
 Financial assets measured 
  at fair value 
 Other investments 
  - equity investments                  -        11.7              -             -       11.7 
  - debt investments                    -        10.0              -             -       10.0 
 Derivative financial 
  instruments                        37.4           -              -             -       37.4 
                             ------------  ----------  -------------  ------------  --------- 
 
                                     37.4        21.7              -             -       59.1 
                             ------------  ----------  -------------  ------------  --------- 
 
 Financial assets not 
  measured at fair value 
 Debtors                                -           -          226.0             -      226.0 
 Cash and bank balances                 -           -          219.1             -      219.1 
 
                                        -           -          445.1             -      445.1 
                             ------------  ----------  -------------  ------------  --------- 
 
 Financial liabilities 
  measured at fair value 
 Derivative financial 
  instruments                       (0.1)           -              -             -      (0.1) 
 
                                    (0.1)           -              -             -      (0.1) 
                             ------------  ----------  -------------  ------------  --------- 
 
 Financial liabilities 
  not measured at fair 
  value 
 Borrowings                             -           -              -     (1,213.8)  (1,213.8) 
 Lease liabilities                      -           -              -     (2,814.4)  (2,814.4) 
 Trade and other payables 
  excluding non-financial 
  liabilities                           -           -              -     (1,769.8)  (1,769.8) 
 
                                        -           -              -     (5,798.0)  (5,798.0) 
                             ------------  ----------  -------------  ------------  --------- 
 
 
                                           Fair value      Financial 
                               Fair value     through         assets         Other      Total 
                               of hedging      profit   at amortised     financial   carrying 
                              instruments    and loss           cost   liabilities    amounts 
                                     US$m        US$m           US$m          US$m       US$m 
 
 
 At 31st December 202 
  1 
 Financial assets measured 
  at fair value 
 Other investments 
  - equity investments                  -        11.5              -             -       11.5 
 Derivative financial 
  instruments                        10.5           -              -             -       10.5 
                             ------------  ----------  -------------  ------------  --------- 
 
                                     10.5        11.5              -             -       22.0 
                             ------------  ----------  -------------  ------------  --------- 
 
 Financial assets not 
  measured at fair value 
 Debtors                                -           -          253.1             -      253.1 
 Cash and bank balances                 -           -          210.4             -      210.4 
 
                                        -           -          463.5             -      463.5 
                             ------------  ----------  -------------  ------------  --------- 
 
 Financial liabilities 
  measured at fair value 
 Derivative financial 
  instruments                       (0.4)           -              -             -      (0.4) 
 
                                    (0.4)           -              -             -      (0.4) 
                             ------------  ----------  -------------  ------------  --------- 
 
 Financial liabilities 
  not measured at fair 
  value 
 Borrowings                             -           -              -     (1,054.3)  (1,054.3) 
 Lease liabilities                      -           -              -     (2,960.3)  (2,960.3) 
 Trade and other payables 
  excluding non-financial 
  liabilities                           -           -              -     (1,888.1)  (1,888.1) 
 
                                        -           -              -     (5,902.7)  (5,902.7) 
                             ------------  ----------  -------------  ------------  --------- 
 

The fair values of financial assets and financial liabilities approximate their carrying amounts.

Fair value estimation

   (i)    Financial instruments that are measured at fair value 

For financial instruments that are measured at fair value in the balance sheet, the corresponding fair value measurements are disclosed by level of the following fair value measurement hierarchy:

(a) Quoted prices (unadjusted) in active markets for identical assets or liabilities ('quoted prices in active markets')

The fair values of listed securities are based on quoted prices in active markets at the balance sheet date.

(b) Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly ('observable current market transactions')

The fair values of derivative financial instruments are determined using rates quoted by the Group's bankers at the balance sheet date. The rates for interest rate swaps and forward foreign exchange contracts are calculated by reference to market interest rates and foreign exchange rates.

The fair values of unlisted equity investments, club debentures, are determined using prices quoted by brokers at the balance sheet date.

(c) Inputs for assets or liabilities that are not based on observable market data ('unobservable inputs')

The fair values of other unlisted equity and debt investments are determined using valuation techniques by reference to observable current market transactions or the market prices of the underlying investments with certain degree of entity specific estimates or discounted cash flow by projecting the cash inflows from these investments.

There were no changes in valuation techniques during the six months ended 30th June 2022 and the year ended 31st December 2021.

The table below analyses financial instruments carried at fair value at 30th June 2022 and 31st December 2021, by the levels in the fair value measurement hierarchy:

 
                                                Observable 
                                                   current 
                                                    market  Unobservable 
                                              transactions        inputs  Total 
                                                      US$m          US$m   US$m 
 
 
 At 30th June 2022 
 Assets 
 Other investments 
 - equity investments                                  6.7           5.0   11.7 
 - debt investments                                      -          10.0   10.0 
 Derivative financial instruments 
  at fair value 
 - through other comprehensive 
  income                                              36.7             -   36.7 
 
   *    through profit and loss                        0.7             -    0.7 
                                             -------------  ------------  ----- 
 
                                                      44.1          15.0   59.1 
                                             -------------  ------------  ----- 
 
 Liabilities 
 Derivative financial instruments 
  at fair value 
 
   *    through other comprehensive income               -             -      - 
 
   *    through profit and loss                      (0.1)             -  (0.1) 
 
                                                     (0.1)             -  (0.1) 
                                             -------------  ------------  ----- 
 
 
 At 31st December 2021 
 Assets 
 Other investments 
 - equity investments                          6.5  5.0   11.5 
 Derivative financial instruments 
  at fair value 
 - through other comprehensive 
  income                                      10.2    -   10.2 
 
   *    through profit and loss                0.3    -    0.3 
                                             -----  ---  ----- 
 
                                              17.0  5.0   22.0 
                                             -----  ---  ----- 
 
 Liabilities 
 Derivative financial instruments 
  at fair value 
 
   *    through other comprehensive income   (0.2)    -  (0.2) 
 
   *    through profit and loss              (0.2)    -  (0.2) 
 
                                             (0.4)    -  (0.4) 
                                             -----  ---  ----- 
 

There were no transfers between the categories during the six months ended 30th June 2022 and the year ended 31st December 2021 .

Movement of financial instruments which are valued based on unobservable inputs during the year ended 31st December 2021 and six months ended 30th June 2022 are as follows:

 
                                     Unlisted 
                                       equity           Unlisted 
                                  investments   debt investments   Total 
                                         US$m               US$m    US$m 
 
 
 At 1st January 2021                        -                  -       - 
 Addition                                 5.0                  -     5.0 
                                 ------------  -----------------  ------ 
 
 At 31st December 2021 and 1st 
  January 2022                            5.0                  -     5.0 
 Addition                                   -               10.0    10.0 
 
 At 30th June 2022                        5.0               10.0    15.0 
                                 ------------  -----------------  ------ 
 
   (ii)   Financial instruments that are not measured at fair value 

The fair values of current debtors, cash and bank balances, current creditors, current borrowings and current lease liabilities are assumed to approximate their carrying amounts due to the short-term maturities of these assets and liabilities.

The fair values of long-term borrowings are based on market prices or are estimated using the expected future payments discounted at market interest rates. The fair values of non-current lease liabilities are estimated using the expected future payments discounted at market interest rates.

12. Notes to Consolidated Cash Flow Statement

   (a)   Purchase of subsidiaries 
 
                                        Six months ended 30th June 
                                                              2022 
                                                              US$m 
 
 
 Non-current assets                                            0.1 
 Current assets                                                8.1 
 Current liabilities                                         (7.0) 
                                                             ----- 
 
 Fair value of identifiable net assets acquired                1.2 
 Goodwill                                                     13.2 
 
 Consideration paid                                           14.4 
 Cash and cash equivalents at the date of acquisitions       (5.6) 
                                                             ----- 
 
 Net cash outflow                                              8.8 
                                                             ----- 
 

In April 2022, the Group acquired 100% interest in Digital Hong Kong and Digital Singapore, developing and driving digital innovation businesses, from its joint venture, RTA, for a total net cash consideration of US$8.8 million.

The fair values of the identifiable assets and liabilities at the acquisition date are provisional and will be finalised within one year after the acquisition date.

The goodwill arising from the acquisition amounting to US$13.2 million was attributable to its ownership interest in the intellectual property.

None of the goodwill is expected to be deductible for tax purposes.

There were no sales recognised by these subsidiaries during the period. Loss after tax since acquisitions in respect of these subsidiaries during the period amounted to US$8.3 million. Had the acquisitions occurred on 1st January 2022, consolidated loss after tax for the six months ended 30th June 2022 would have been US$77.3 million.

(b) Purchase of other investments mainly related to the Group's subscription of a five-year convertible bond of Pickupp Limited, a delivery platform founded in Hong Kong, for a principal of US$10.0 million in January 2022.

(c) Sale of associates and joint ventures mainly related to the proceeds from the Group's disposal of its 8.5% interest in RTA amounted to US$6.9 million in May 2022.

(d) Sale of properties in 2021 included disposal of three properties in Malaysia and two properties in Indonesia for a total net consideration of US$35.0 million.

(e) Purchase of shares for a share-based long-term incentive plan related to the purchase of 7,912,100 ordinary shares from the stock market by a subsidiary of the Group for a total consideration of US$20.0 million.

   (f)   Analysis of balances of cash and cash equivalents 
 
                            At 30th    At 31st 
                               June   December 
                               2022       2021 
                               US$m       US$m 
 
 
 Cash and bank balances       219.1      210.4 
                                         ( 0.4 
 Bank overdrafts              (7.7)          ) 
 
                              211.4      210.0 
                            -------  --------- 
 

13. Capital Commitments and Contingent Liabilities

Total capital commitments at 30th June 202 2 and 31st December 202 1 amounted to US$214.7 million and US$ 184.6 million, respectively.

Various Group companies are involved in litigation arising in the ordinary course of their respective businesses. Having reviewed outstanding claims and taking into account legal advice received, the Directors are of the opinion that adequate provisions have been made in the condensed financial statements.

14. Related Party Transactions

The parent company of the Group is Jardine Strategic Limited ('JSL') and the ultimate parent company is Jardine Matheson Holdings Limited ('JMH'). Both companies are incorporated in Bermuda.

In the normal course of business, the Group undertakes a variety of transactions with JMH and certain of its subsidiaries, associates and joint ventures. The more significant of such transactions are described below.

The Group pays management fees to Jardine Matheson Limited ('JML'), a wholly-owned subsidiary of JMH, under the terms of a Management Services Agreement, for certain management consultancy services provided by JML. The management fees paid by the Group to JML were US$ 0.2 million (202 1 : US$0. 1 million) for the first six months of 202 2 . The Group also paid directors' fees of US$ 0.2 million (202 1 : US$0.2 million) to JML for the same period in 202 2 .

The Group rents properties from Hongkong Land Holdings Limited ('HKL'), a subsidiary of JMH. The lease payments paid by the Group to HKL for the first six months of 2022 were US$1.5 million (2021: US$1.5 million). The Group's 50%-owned associate, Maxim's, also paid lease payments of US$3.9 million (2021: US$4.5 million) to HKL for the first six months of 2022.

The Group obtains repairs and maintenance services from Jardine Engineering Corporation ('JEC'), a subsidiary of JMH. The total fees paid by the Group to JEC for the first six months of 2022 amounted to US$1.2 million (2021: US$0.8 million).

Maxim's supplies ready-to-eat products at arm's length to certain subsidiaries of the Group. For the first six months of 2022, these amounted to US$17.1 million (2021: US$12.2 million).

The Group's digital joint venture, RTA, implements point-of-sale system and provides consultancy services to the Group. The total fees paid by the Group to RTA for the first six months of 202 2 were US$5.6 million (2021: nil).

There were no other related party transactions that might be considered to have a material effect on the financial position or performance of the Group that were entered into or changed during the first six months of the current financial year.

Amounts of outstanding balances with associates and joint ventures are included in debtors and creditors, as appropriate.

Balances with group companies of JMH at 30th June 2022 and 31st December 2021 are immaterial, unsecured, and have no fixed terms of repayment.

DFI Retail Group Holdings Limited

Principal Risks and Uncertainties

The Board has overall responsibility for risk management and internal control. The following have been identified previously as the areas of principal risk and uncertainty facing the Company, and they remain relevant in the second half of the year.

   --     Economic Risk 
   --     Commercial Risk 
   --     Financial and Treasury Risk 
   --     Concessions, Franchises and Key Contracts Risk 
   --     Regulatory and Political Risk 
   --     Pandemic and Natural Disasters Risk 
   --     Cybersecurity and Technology Risk 
   --     Talent Risk 
   --     Environmental and Climate Risk 

For greater detail, please refer to pages 151 to 154 of the Company's 2021 Annual Report, a copy of which is available on the Company's website at www.DFIretailgroup.com.

Responsibility Statement

The Directors of the Company confirm to the best of their knowledge that:

   a.    the condensed financial statements have been prepared in accordance with IAS 34; and 

b. the interim management report includes a fair review of all information required to be disclosed by the Disclosure Guidance and Transparency Rules 4.2.7 and 4.2.8 issued by the Financial Conduct Authority in the United Kingdom.

For and on behalf of the Board

Ian McLeod

Clem Constantine

Directors

DFI Retail Group Holdings Limited

Dividend Information for Shareholders

The interim dividend of USc1.00 per share will be payable on 12th October 2022 to shareholders on the register of members at the close of business on 19th August 2022. The shares will be quoted ex-dividend on 18th August 2022, and the share registers will be closed from 22nd to 26th August 2022, inclusive.

Shareholders will receive their cash dividends in United States Dollars, except when elections are made for alternate currencies in the following circumstances.

Shareholders on the Jersey branch register

Shareholders registered on the Jersey branch register will have the option to elect for their dividends to be paid in Sterling. These shareholders may make new currency elections for the 2022 interim dividend by notifying the United Kingdom transfer agent in writing by 23rd September 2022. The Sterling equivalent of dividends declared in United States Dollars will be calculated by reference to a rate prevailing on 28th September 2022.

Shareholders holding their shares through CREST in the United Kingdom will receive their cash dividends in Sterling only as calculated above.

Shareholders on the Singapore branch register who hold their shares through The Central Depository (Pte) Limited ('CDP')

Shareholders who are on CDP's Direct Crediting Service ('DCS')

Those shareholders who are on CDP's DCS will receive their cash dividends in Singapore Dollars unless they opt out of CDP Currency Conversion Service, through CDP, to receive United States Dollars.

Shareholders who are not on CDP's DCS

Those shareholders who are not on CDP's DCS will receive their cash dividends in United States Dollars unless they elect, through CDP, to receive Singapore Dollars.

Shareholders on the Singapore branch register who wish to deposit their shares into the CDP system by the dividend record date, being 19th August 2022 , must submit the relevant documents to M & C Services Private Limited, the Singapore branch registrar, by no later than 5.00 p.m. (local time) on 18th August 2022 .

DFI Retail Group Holdings Limited

About DFI Retail Group

DFI Retail Group (the 'Group') is a leading pan-Asian retailer. At 30th June 2022, the Group and its associates and joint ventures operated over 10,300 outlets and employed over 220,000 people. The Group had total annual sales in 2021 exceeding US$ 27 billion.

The Group provides quality and value to Asian consumers by offering leading brands, a compelling retail experience and great service; all delivered through a strong store network supported by efficient supply chains.

The Group (including associates and joint ventures) operates under a number of well-known brands across five divisions. The principal brands are:

Food

-- Grocery retail - Wellcome in Hong Kong S.A.R.; Yonghui in Chinese mainland; Cold Storage in Malaysia and Singapore; Giant in Malaysia and Singapore; Hero in Indonesia; and Robinsons in the Philippines.

   --     Convenience stores - 7-Eleven in Hong Kong and Macau S.A.R., Singapore and Southern China. 

Health and Beauty

-- Mannings in Chinese mainland, Hong Kong and Macau S.A.R.; Guardian in Brunei, Cambodia, Indonesia, Malaysia, Singapore and Vietnam.

Home Furnishings

   --     IKEA in Hong Kong and Macau S.A.R., Indonesia and Taiwan. 

Restaurants

-- Hong Kong Maxim's group in Chinese mainland, Hong Kong and Macau S.A.R., Cambodia, Malaysia, Singapore, Thailand and Vietnam.

Other Retailing

   --    Robinsons in the Philippines operating department stores, specialty and DIY stores. 

The Group's parent company, DFI Retail Group Holdings Limited, is incorporated in Bermuda and has a primary listing on the London Stock Exchange, with secondary listings in Bermuda and Singapore. The Group's businesses are managed from Hong Kong by DFI Retail Group Management Services Limited through its regional offices. DFI Retail Group is a member of the Jardine Matheson Group.

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For further information, please contact:

 
DFI Retail Group Management Services 
 Limited 
Christine Chung                        (852) 2299 1056 
 
Brunswick Group Limited 
William Brocklehurst                   (852) 5685 9881 
 

As permitted by the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority in the United Kingdom, the Company will not be posting a printed version of the Half-Year Results announcement for the six months ended 30th June 2022 to shareholders. This Half-Year Results announcement will be made available on the Company's website, www.DFIretailgroup.com, together with other Group announcements.

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(END) Dow Jones Newswires

July 28, 2022 05:28 ET (09:28 GMT)

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