| Mon 11 Jun 2007, 13:07 | | RAH - Real Africa - Interim results |
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RAH
RAH
RAH - Real Africa - Interim results
Real Africa Holdings Limited
(Registration number 1994/003919/06)
Share code: RAH
ISIN code: ZAE000008702
("Real Africa" or "RAH" or "the company")
SECOND INTERIM RESULTS FOR THE TWELVE MONTHS ENDED 31 MARCH 2007
INCOME STATEMENTS
Twelve months to Year ended
31 March 31 March
2007 2006
Unaudited Restated
R`000 R`000
Revenue 66 520 34 429
Net investment profits 162 281 26 507
Share of profits of associates 88 548 71 503
Interest income 9 852 30 559
Operating income 327 201 162 998
Operating costs (17 476) (11 367)
Interest and preference dividends paid (10 389) (12 882)
Profit for the period 299 336 138 749
Taxation (6 793) (10 055)
Profit after taxation 292 543 128 694
Attributable to:
Minority interest 15 890 7 825
Ordinary shareholders 276 653 120 869
292 543 128 694
Earnings per share (cents) 76,6 33,6
Headline earnings per share (cents) 35,2 33,9
BALANCE SHEETS
Twelve months to Year ended
31 March 31 March
2007 2006
Unaudited Restated
R`000 R`000
ASSETS
Non-current assets
Equipment and furniture 10 111
Investments in associates 201 921 194 496
Other investments 1 091 491 1 219 538
1 293 422 1 414 145
Current assets
Non-current asset held for sale 71 295 174 825
Accounts receivable 3 342
Cash and cash equivalents 67 356 280 565
138 654 455 732
Total assets 1 432 076 1 869 877
EQUITY AND LIABILITIES
Capital and reserves
Ordinary shareholders` equity 1 131 239 1 616 393
Minority interest 113 703 122 139
1 244 942 1 738 532
Non-current liabilities
Preference shares 166 464 121 465
Deferred taxation 264 7 665
166 728 129 130
Current liabilities
Accounts payable 5 797 2 141
Taxation 14 609 74
20 406 2 215
Total liabilities 187 134 131 345
Total equity and liabilities 1 432 076 1 869 877
STATEMENT OF CHANGES IN EQUITY
Ordinary
share Capital Non- Non-
capital redemp- distri- controll-
and tion butable ing
premium reserve reserves reserve
R`000 R`000 R`000 R`000
Balance at March 2006 416 953 1 080 47 828 -
Effect of adoption of
economic entity
model - - - (3 751)
Restated opening 416 953 1 080 47 828 (3 751)
balance
Profit for the period - - - -
Fair value adjustments - - - -
Dividends paid - - - -
Capital distribution (328 258) - - -
Exercise of share 1 726 - - -
options
90 421 1 080 47 828 (3 751)
Fair
Retained value Minority
earnings reserve interests Total
R`000 R`000 R`000 R`000
Balance at March 2006 302 862 850 718 122 139 1 741 580
Effect of adoption of
economic entity
model 703 - - (3 048)
Restated opening 303 565 850 718 122 139 1 738 532
balance
Profit for the period 276 653 - 15 890 292 543
Fair value adjustments - (127 674) (8 075) (135 749)
Dividends paid (307 601) - (16 251) (323 852)
Capital distribution - - - (328 258)
Exercise of share - - - 1 726
options
272 617 723 044 113 703 1 244 942
SUMMARISED CASH FLOW STATEMENT
Twelve months to Year ended
31 March 31 March
2007 2006
Unaudited Restated
R`000 R`000
Cash flows from operating activities 108 285 106 518
Cash flows from investing activities 283 890 9 887
Cash flows from financing activities (605 384) (633 190)
Net cash flows (213 209) (516 785)
HEADLINE EARNINGS PER SHARE
Twelve months to Year ended
31 March 31 March
2007 2006
Unaudited Restated
R`000 R`000
Headline earnings per share (cents) 35,2 33,9
Weighted average number of shares 361,3 360,2
(million)
Reconciliation of headline earnings
(R`000)
Earnings 276 653 120 869
Adjusted for realised investment (149 603) 1 200
(profits)/losses
Headline earnings 127 050 122 069
NET ASSET VALUE
31 March 30 September 31 March
2007 2006 2006
Unaudited Unaudited Unaudited
R`000 R`000 R`000
Afrisun Leisure* 1 597 990 1 408 552 1 759 937
Oceana - - 341 520
Life Esidimeni+ 187 842 205 100 205 100
Other net assets (10 102) (14 800) (1 875)
Cash 40 426 367 682 252 589
Borrowings (121 464) (121 464) (121 464)
Net asset value 1 694 692 1 845 070 2 435 807
Issued shares, net of treasury 361,3 361,3 360,2
shares (million)
Net asset value per share 469 511 676
(cents)
Special distributions paid to
shareholders since calculation
of net asset value:
- Offish proceeds - (92) (92)
- Special dividend - - (67)
Net asset value after 469 419 517
distribution
* African Leisure value is net of preference share debt and cash.
+ Life Esidimeni value includes a provision which may not adequately cover the
potential exposure to the Lifecare Group Pension Fund litigation.
CHANGE IN YEAR-END
The company has changed its year-end from 31 March to 30 June and the current
financial period will be for 15 months from 1 April 2006 to 30 June 2007.
COMMENTARY
The gaming industry continued to enjoy favourable trading conditions in South
Africa and the group`s core interests performed strongly over the past twelve
months.
SunWest International (Pty) Limited, in which the group has a 14,1% effective
economic interest, owns the GrandWest Casino and the Table Bay hotel in Cape
Town.
GrandWest achieved satisfactory revenue growth of 14,4%. The expanded salon
prive opened at the beginning of December 2006 while the new smoking casino is
scheduled to open at the end of June 2007. The slot machine capacity available
at GrandWest will be increased to 2 500 slot machines.
Afrisun Gauteng (Pty) Limited, trading as Carnival City, in which the group has
an effective economic interest of 22,9%, enjoyed revenue growth of 16,6%.
Carnival City recently added 57 rooms to its existing hotel, increasing rooms
inventory to 105. The additional rooms were opened in April 2007.
Emfuleni Resorts (Pty) Limited, owns the Boardwalk Casino in Port Elizabeth and
the Fish River Sun in which the group has an effective economic interest of
7,0%. This interest was increased from 2,3% on 2 August 2006. The Boardwalk
Casino has enjoyed good trading with revenues up 15,2% for the twelve months.
Afrisun KZN (Pty) Limited, in which the group has an effective economic interest
of 11,5% operates the Sibaya Casino north of Durban. The new 118 room Sibaya
Lodge was opened in October 2006 and Sibaya has enjoyed gaming revenue growth of
21,6% over the past twelve months.
The offer by Sun International (South Africa) Limited (SISA) to acquire the
entire issued share capital of Real Africa closed on 15 September 2006 and SISA
now controls 61,3% of RAH. The company disposed of its indirect interest in the
Oceana Group held through Ocfish Holdco for R338 million, realising a profit of
R162 million. A capital reduction of R328 million (net of treasury shares),
which equated to 92 cents per share, was effected on 16 October 2006 as a result
of this disposal.
Dividend
The board has resolved that future dividends will be determined at the board
meetings, which deal with the half-year and year-end results.
Litigation and pre-emptive rights
A special purpose committee was appointed by the Afrisun Leisure board to
consider the merits of the litigation brought against SISA and to reach a
decision regarding the matter. The Afrisun board requested the committee to
complete an agreed process and is awaiting the final decision of the committee.
Notes to the condensed income statements
1. Revenue of R66,5 million increased by 93% and comprises predominantly
dividends received by Afrisun Leisure.
2. The net investment profits primarily relate to the disposal of Ocfish Holdco.
3. As a result of the cash distributions during the period, interest income
reduced from R30,6 million in the prior year to R9,9 million for the twelve
months under review.
4. The increase in operating costs is attributed to costs incurred on the SISA
offer (R5,3 million) and the Ocfish transaction (R1 million).
5. The interest expense has decreased due to the group no longer paying interest
to the minorities in the PQAH structure, which has been unwound.
Note to the condensed balance sheets
6. The interest in Life Esidimeni has been reclassified from investments in
associate to non-current asset held for sale in terms of IFRS5. The value has
been based on the historical cost of the investment adjusted for equity
accounted profits and losses.
Notes to the net asset valuation
7. All the investments held by Afrisun Leisure have been valued using the
Discounted Cash Flow (DCF) valuation method applying a discount rate of 12,14%
(September 2006 - 12,5%), to management`s current estimated future cash flows.
National Manco and Gauteng Manco were valued at March 2006 using a dividend
discount methodology which the board considers to be incorrect as both companies
distribute 100% of their earnings on a quarterly basis.
8. The value of Life Esidimeni has been reduced based on the valuation equating
to a dividend yield of 6,2% (September 2006 - 6,7%) plus surplus cash on hand.
Accounting policies
The condensed interim financial information has been prepared in accordance with
International Financial Reporting Standards (IFRS) and complies with IAS34,
Interim Financial Reporting. The accounting policies applied are consistent with
those in the annual financial statements for the year ended 31 March 2006 except
for the adoption of IAS27 (revised) - Consolidated and Separate Financial
Statements.
The group has elected to adopt the economic entity model in accounting for
transactions with minority shareholders in terms of the revisions to IAS27 to
bring their accounting policies in line with Sun International Limited, their
holding company. This model requires all premiums paid and profits and/or losses
on transactions with minorities to be recognised directly in equity. As a
consequence the 2006 income statement has been restated and the intangible
assets and ordinary shareholders` equity at 31 March 2006 have been reduced by
R3 million.
Registered office
The registered office of Real Africa Holdings Limited was changed on 6 March
2007 to 27 Fredman Drive, Sandown, Sandton, 2031.
For and on behalf of the board
DA Hawton RP Becker
(Chairman) (Director)
11 June 2007
PHYSICAL ADDRESS
27 Fredman Drive
Sandown
Sandton, 2031
SPONSOR
Investec Bank Limited
DIRECTORS
DA Hawton (Chairman), RP Becker, DC Coutts-Trotter, Dr NN Gwagwa, MJ Leeming, MV
Moosa
SECRETARIES
Sun International Corporate Services (Pty) Limited
Date: 11/06/2007 13:07:53 Produced by the JSE SENS Department.
