| Wed 15 Aug 2007, 12:15 | | TRT - Tourvest - Group Results: Year Ended 25 June |
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TRT
TRT
TRT - Tourvest - Group Results: Year Ended 25 June 2007 and Further Cautionary
Tourism Investment Corporation Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/008144/06)
Share code: TRT
ISIN: ZAE000012472
"Tourvest"
TOURVEST GROUP RESULTS FOR THE YEAR ENDED 25 JUNE 2007 AND FURTHER CAUTIONARY
ANNOUNCEMENT
- Operating income grows by 18%
- Attributable earnings increase by 28%
- Revenue grows by 25%
- Headline earnings per share grows by 26%
The South African market remained buoyant, assisting our retail travel
operations to perform well. The overseas inbound market grew by an estimated
6% - 7% and the rand depreciated by 12.4% against the dollar.
Against this background, operating income grew by 18% with the growth in
attributable earnings to ordinary shareholders being 28%.
The group expanded its operations in South Africa adding the restaurant
business and expanding its hospitality facilities.
International growth was achieved with the acquisition of a souvenir craft and
curio business in the Caribbean, the Nigerian retail travel business and a
tour operator business in East Africa.
These developments, which resulted in an increase of property, plant and
equipment of R98 million and goodwill of R92 million, are expected to make
substantial contributions to profits over the next few years and have resulted
in the group having a net overdraft of R42 million compared to net cash of R90
million last year.
Review of operations
Inbound Tourism Services
This division showed a decline in operating income of 7%. This was because we
relinquished our high risk business, experienced reduced margins in our
inbound operator business and had low returns from the recently acquired
hospitality operations.
A strategy has been put in place to ensure improvement in margins. The
Namibian inbound tour operator has had a good year due to higher volumes and
new product introductions.
The inbound product division performed well and would have preformed better
had we accounted for the income from acquisitions for the full period since
acquisition.
Although the East African tour operation performed to expectation we accounted
for losses due to seasonal factors.
Outbound Travel Services
The retail travel business continued to gain market share and performed to
expectations.
The outbound tour operator business was discontinued during the year as it
continued to make losses due to low business volumes.
The Nigerian operation made a small loss for the year due to a later start
than anticipated. Profits are expected in 2008.
Financial Services
This business performed exceptionally well with operating profit growing by
57%.
The volume of business in dollar terms grew by 6% which, together with tight
control over costs and improved loss control, all contributed to the result.
Retail Merchandising
This division had another good year. The major business within the division,
the Tigers Eye group, grew operating income in excess of 25%. Its operation
in the Caribbean, Ganzee, contributed to profits in its first year of
operation.
The Duty Free operations performed in line with last year but struggled on the
UK/USA Virgin route due to the high GBP/$ exchange rate.
The Jewellery business grew operating income more than 130% with Lorraine
Efune having an exceptional year.
Although profitable since acquisition, in terms of IFRS, we were only able to
account for May and June results, a traditional loss making period, for the
newly acquired Cape Town seafront restaurants.
Prospects
Subject to the exchange rate remaining at around R7 to the dollar, we expect a
good increase in profits for the year ahead. The increased awareness of South
Africa resulting from the World Cup in 2010 and the continued strength of the
South African market should support all the businesses in our group.
Ordinary dividend
An ordinary dividend of 6.4 cents per share was paid on 18 September 2006.
An ordinary dividend of 8 cents per share (2006: 6.4 cents per share) has been
declared in line with our policy of paying an annual dividend equal to 50% of
earnings per share.
In compliance with Strate, the following dates are applicable:
Last date to trade
cum dividend Friday 12 October 2007
Date trading commences
ex dividend payment Monday 15 October 2007
Record date Friday 19 October 2007
Date of payment Monday 22 October 2007
Share certificates may not be dematerialised or rematerialised from Monday 15
October 2007 to Friday 19 October 2007.
Board of directors
On 13 November 2006, the Tourvest board was restructured to ensure compliance
with best corporate practice and accordingly, Tourvest appointed three
independent non-executive directors to its board. They are Thembi Kunene,
Blacky Komani and Tanya Abrahamse.
Jan Roesch, the CFO, resigned from the board to assume responsibility for
Tourvest Inbound Products and Luvhengo Neswiswi joined the board as CFO. At
the same time Bill Lynch, the former chief executive of Imperial Holdings,
retired from the board. The board takes this opportunity to thank him for his
wise counsel during his tenure on the board.
Manny de Canha, an executive director of Imperial, joined the board.
Corporate governance
The group fully supports the Code on Corporate Practices and Conduct as
contained in the King Report on corporate governance.
Contingent liability
In the prior year, a contingent liability of R5.9 million was disclosed in the
annual financial statements relating to the disallowance of previously claimed
trademarks allowance for tax purposes. Tourvest are in settlement
negotiations with SARS in respect of this matter and an additional liability
of R6.8 million has been raised in the current year. The total liability (net
of interest) raised in respect of the disallowance is R32.6 million.
Further cautionary announcement
On 12 July 2007, the board issued a cautionary announcement advising that
expressions of interest to acquire the company had been received.
Shareholders are advised that these discussions are ongoing and that they must
continue to exercise caution in their dealings with the company`s securities
until further information is made available.
Subsequent events
An agreement, subject to the fulfilment of certain conditions precedent, for
the purchase of the Drifters overland business has been concluded subsequent
to year end.
The Shongololo train business has been sold after year end.
Basis of preparation and accounting policies
The preliminary annual financial statements are prepared in accordance with
IAS 34 Interim Financial Reporting and Schedule 4 of the South African
Companies Act, 1973, as amended.
All IFRS and IFRIC interpretations issued and effective at 25 June 2007 have
been applied. All new accounting pronouncements, effective for the year, have
been adopted by the group in the current year, but did not have a material
impact on the group, either in the current or prior year, therefore no
restatements have been made.
The accounting policies adopted and method of computation are consistent with
those applied in the financial statements for the year ended 25 June 2006.
Independent review by the auditors
The results have been reviewed by Tourvest`s auditors Deloitte & Touche, in
terms of International Standards on Review Engagements 2400. The scope of the
review was to enable the auditors to report that nothing came to their
attention that caused them to believe that the accompanying condensed
consolidated financial information is not presented, in all material respects,
in accordance with IAS 34, Interim Financial Reporting and the South Africa
Companies Act. Their unmodified review opinion is available for inspection at
Tourvest`s registered office.
For and behalf of the board.
CE Scott RT Edmond
Chairman Chief executive
15 August 2007
GROUP BALANCE SHEET at 25 June
R000 2007 2006
Reviewed Audited
ASSETS
Non-current assets
Property, plant and equipment 234 975 108 639
Goodwill 225 318 127 734
Trademarks 6 069 6 032
Deferred taxation 22 713 17 921
Financial assets 29 358 34 484
Current assets
Inventories 211 401 205 832
Trade and other receivables 394 990 294 082
Cash and bank balances 157 481 90 115
Taxation paid in advance 2 168 1 305
Assets of disposal group held for sale 11 103 -
Foreign notes held 32 503 41 899
Total current assets 809 646 633 233
Total assets 1 328 079 928 043
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 85 662 85 662
Share repurchases and consolidated shares (70 286) (71 907)
Non-distributable reserves 21 464 27 062
Accumulated profits 394 231 319 962
Attributable to Tourvest shareholders 431 071 360 779
Minority interest 56 552 37 662
Total equity 487 623 398 441
Non-current liabilities
Interest-bearing borrowings 39 494 14 831
Deferred taxation 5 507 4 065
Current liabilities
- Non interest bearing
Trade and other payables 486 688 391 285
Provisions 21 131 14 407
Taxation payable 37 113 57 124
Liabilities of disposal group held for 6 116 -
sale
Dividends payable 710 321
- Interest bearing
Current portion of interest-bearing 2 528 2 792
borrowings
Bank borrowings 199 585 -
Loans relating to foreign notes held 41 584 44 777
Total current liabilities 795 455 510 706
Total equity and liabilities 1 328 079 928 043
GROUP INCOME STATEMENT for the year ended 25 June
R000 % 2007 2006
change Reviewed Audited
Revenue 25 1 623 780 1 294 794
Operating income 18 225 231 190 576
Net interest paid 1 (8 438) (8 389)
Income before taxation 19 216 793 182 187
Taxation 1 (64 826) (64 098)
Profit for the period before loss 29 151 967 118 089
on discontinued operation
Loss on discontinued operation (3 936) (2 633)
Profit for the period 28 148 031 115 456
Attributable to:
Ordinary shareholders 28 124 781 97 597
Minority shareholders 30 23 250 17 859
Profit for the period 28 148 031 115 456
Earnings per share 25 16.0 12.8
Dilute earnings per share 25 15.8 12.6
Additional information
Reconciliation of attributable
income to headline earnings
Profit for the period 124 781 97 597
attributable to shareholders
Capital (profit)/loss (348) 479
Loss on sale of subsidiaries 454 -
Closure cost 2 254 -
Impairment of intangibles - 830
Headline earnings 29 127 141 98 906
Headline earnings per share 26 16.3 12.9
(cents)
Weighted average shares (000) 778 044 764 426
Closing number of shares (000) 830 350 830 350
Net asset value per share (cents) 22 58.73 47.98
Dividend declared per share 25 8.00 6.40
(cents)
Capital commitments 175 111 74 031
- Authorised and contracted 108 122 2 077
- Authorised but not yet 66 989 71 954
contracted
GROUP CASH FLOW STATEMENT for the year ended 25 June
R000 2007 2006
Reviewed Audited
Cash flows from operating activities 99 130 102 979
Cash flow from investing activities (244 189) (94 625)
Cash flow from financing activities 12 113 (17 670)
Net movement in cash and cash equivalents (132 946) (9 316)
Cash and cash equivalents at beginning of 90 115 96 347
year
Foreign currency translation reserve 727 3 084
Cash and cash equivalents at end of year (42 104) 90 115
GROUP SEGMENTAL ANALYSIS at 25 June
R000 % 2007 2006
change Reviewed Audited
Revenue
- Inbound Tourism Services 38 264 692 191 359
- Outbound Travel Services 11 270 968 244 477
- Financial Services 13 116 871 103 340
- Retail Merchandising 29 971 249 755 618
Group 25 1 623 780 1 294 794
Operating income
- Inbound Tourism Services (7) 22 688 24 527
- Outbound Travel Services 11 75 566 68 151
- Financial Services 57 32 030 20 337
- Retail Merchandising 22 94 947 77 561
Group 18 225 231 190 576
Net operating assets
- Inbound Tourism Services 184 144 715 50 904
- Outbound Travel Services 110 107 111 50 975
- Financial Services 5 31 218 29 857
- Retail Merchandising 25 241 274 192 915
Group 62 524 318 324 651
GROUP STATEMENT OF CHANGES IN EQUITY at 25 June
Share Share Other Accum-
capital re- reserves ulated
and purchases profit
premium and con-
solidated
shares
Balance at 25 June 2005 85 662 (75 069) 26 180 292 877
Opening retained - (1 140)
earnings adjustment
resulting from the
reversal of foreign
currency embedded
derivatives
Attributable income to 459 97 597
25 June 2006
Dividend paid (47 745)
Dividend accruing to 4 049
treasury stock
Transfer from NDR 25 676 (25 676)
Deferred tax release on (36 429)
trademark
Purchase of business
Purchase of treasury (17 498)
shares
Sale of treasury shares 18 699 6 249
Exercise of options in 1 961 -
share trust
Foreign exchange - 4 927
translation differences
IFRS restated balance at 85 662 (71 907) 27 062 319 962
25 June 2006
Attributable income to 284 124 781
25 June 2007
Dividend paid (53 142)
Dividend accruing to 3 642
treasury stock
Transfer from NDR 1 012 (1 012)
Deferred tax released on (8 254)
trademark
Purchase of business
Foreign exchange 1 360
translation differences
Exercise of options in 1 621
share trust
Balance at 25 June 2007 85 662 (70 286) 21 464 394 231
GROUP STATEMENT OF CHANGES IN EQUITY at 25 June (continued)
Attribut- Minority Total
able to interest equity
Tourvest
share-
holders
Balance at 25 June 2005 329 650 27 254 356 904
Opening retained (1 140) (1 140)
earnings adjustment
resulting from the
reversal of foreign
currency embedded
derivatives
Attributable income to 98 056 17 859 115 915
25 June 2006
Dividend paid (47 745) (7 952) (55 697)
Dividend accruing to 4 049 4 049
treasury stock
Transfer from NDR - -
Deferred tax release on (36 429) (36 429)
trademark
Purchase of business 2 058 2 058
Purchase of treasury (17 498) (17 498)
shares
Sale of treasury shares 24 948 24 948
Exercise of options in 1 961 1 961
share trust
Foreign exchange 4 927 (1 557) 3 370
translation differences
IFRS restated balance at 360 779 37 662 398 441
25 June 2006
Attributable income to 125 065 23 250 148 315
25 June 2007
Dividend paid (53 142) (8 414) (61 556)
Dividend accruing to 3 642 3 642
treasury stock
Transfer from NDR - -
Deferred tax released on (8 254) (8 254)
trademark
Purchase of business - 3 740 3 740
Foreign exchange 1 360 314 1 674
translation differences
Exercise of options in 1 621 1 621
share trust
Balance at 25 June 2007 431 071 56 552 487 623
Registered Office: 33 West Street, Houghton Johannesburg, 2198
Transfer Secretaries: Computershare Investor Services 2004 (Proprietary)
Limited, 70 Marshall Street, Johannesburg, 2001; PO Box 61051, Marshalltown,
2107
Sponsor: Investec Bank Limited
Directors: CE Scott (Chairman), RL Hiemstra (Deputy Chairman), RT Edmond
(Chief Executive)*, TE Abrahamse, MP de Canha, E de Jager*, B Komani, T
Kunene, PM Maisel and LT Neswiswi* (*Executive)
Company Secretary: CG Mortimer
Our website is regularly updated to supply you with the latest information on
the company.
For further information contact: Investor and media relations Helen McKane on
Tel 011 728-4701, Fax 011 728-2547, e-mail: tourvest@dpapr.com
Website: www.tourvest.co.za
Date: 15/08/2007 12:15:01 Produced by the JSE SENS Department.
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