Review of trading
The group has achieved outstanding results for the year increasing turnover by 17,8% and operating profits by 35,1%. The second half-year reflected a 16,8% increase in turnover and a 48,5% improvement in operating profit. The year comprised 53 trading weeks compared to 52 weeks in the year to 31 August 1999.

Store expansion, in line with strategic intent, has continued unabated during the year and a total of 54 new stores were opened across the group, bringing the total number of stores to 640. In the year ahead store expansion will continue and a further 77 new stores are planned to open, including 22 in Australia.

Divisional Review
South Africa's leading specialist retailer of health, home and beauty products catering for the middle to upper end of the market. Continued strong sales performance, driven by focused marketing and competitive pricing, has resulted in an excellent trading year for the chain. During the year the chain enhanced the very successful ClubCard, introducing the concept of bonus points.

Sales: R2,110 billion (1999 - R1,790 billion)

Number of stores: 217 (1999 - 205)

Australia's leading specialist retailer of health, beauty and home products. It has rapidly grown the store base and in uncertain economic conditions has achieved strong sales growth. Its level of profit has been affected by the growth in the infrastructure ahead of the growth curve, non-recurrent expenditure of R3,19 million relating to the introduction of sales tax in July 2000 as well as substantial once-off costs relating to the repositioning of the brand.

Sales: R956 million (1999 - R763 million)

Number of stores: 101 (1999 - 83)

Mass market discount retailer focusing on toiletries, household products and gifts in the middle to lower end of the southern African market. Expansion continued strongly although its trading performance, in a target market adversely affected by changes in consumer spending, was below expectations.

Sales: R 608 million (1999 - R560 million)

Number of stores: 196 (1999 - 185)

Music Division
Comprises Musica, South Africa's largest specialist music chain, and the Compact Disc Wherehouse, a large store format for music aficionados. In a difficult trading environment, this division has outperformed the market, gained significant market share and achieved strong growth in both sales and profits.

Sales: R324 million (1999 - R279 million)
Number of stores: 126 (1999 - 123)

The group anticipates that trading conditions both in southern Africa and Australia will remain tough and competitive during the 2000/2001 year. However the group is confident, given the ongoing strategic initiatives and the strong operational focus on the key areas of the businesses, that increased sales and profit levels will be achieved.

Capitalisation issue and final distribution
The directors have resolved to award capitalisation shares to ordinary shareholders registered in the books of the company at the close of business on Friday, 10 November 2000. Shareholders will be given the opportunity to decline the award of capitalisation shares in respect of all or any part of their shareholding and to receive a final cash dividend of 10,4 cents per share. The terms of the award of the capitalisation shares will be published on or about 6 November 2000 and a circular and form of election will be posted to shareholders on 17 November 2000.

By order of the Board

Allan Scott

Company Secretary

16 October 2000


D.M. Nurek*, T.C. Honneysett, R.B. Godfrey, P.W.G. Green, E. Osrin*, P.E.I. Swartz*, W.S.G. Batts*, M.C. Henkel*
* non-executive alternate

Transfer Secretaries:
Mercantile Registrars Limited, 11 Diagonal Street, Johannesburg 2001. PO Box 1053, Johannesburg 2000

Registered Address: Cnr Searle and Pontac Streets, Cape Town 8001. PO Box 5142, Cape Town 8000