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TRT
TRT
TRT - Tourism Investment Corporation - Tourvest Group Results For The Six
Months Ended 25 December 2007
TOURISM INVESTMENT CORPORATION LIMITED
Registration number 1996/008144/06
Share code TRT
ISIN code ZAE000012472
TOURVEST GROUP RESULTS FOR THE SIX MONTHS ENDED 25 DECEMBER 2007
Comments
Overseas tourist volumes increased in the period July to November by 5% which
was offset by a 4% strengthening in the rand.
Although operating profit increased by 20% income attributable to ordinary
shareholders only grew by 5%. The interest charge increased because of higher
interest rates and the higher level of borrowings as a consequence of
acquisitions.
The minority share of profits increased due to the good performances of the
East African operations and the businesses at Victoria Falls.
Review of operations
Inbound Tourism Services
The inbound tour operator business benefited from the previous year`s
expansion into East Africa with profits from this acquisition brought to
account for the first time.
The Namibian tour operator and the Victoria Falls businesses continued to
perform exceptionally well.
Global Conferences did not meet expectations as no major conferences were held
during this period.
Although risk and benefits on the acquisition of the Drifters business
transferred to Tourvest on 1 July 2007, income was only accounted for from 1
November 2007.
The property acquisitions have not delivered the expected level of returns
with lower occupancies than budgeted. Occupancy rates are now improving.
The Shongololo business was sold for a profit of R3.8 million during the
period as its risk and reward returns were not considered acceptable.
Outbound Travel Services
This division`s operating income benefited from the closure of the loss-making
tour operator business in the previous year.
The retail travel operation has been very successful in winning new business
and performed in line with expectation.
Financial Services
The division continued to grow operating income with the volume of currency
traded increasing by 8% and margins increasing.
Retail Merchandising
The largest business in the division, Tigers Eye, grew operating income by
11%, but disappointing performances by the jewellery and restaurant
businesses, resulted in a marginal decrease in operating income. Higher
interest rates and the National Credit Act affected the local jewellery
business while the tourist jewellery operation continued to do well.
During the period under review destination stores were secured on Robben
Island (1), Nelson Mandela Gateway (1), Cape Town International Airport (2)
and OR Tambo International Airport (1).
The restaurant business has taken time to settle down. Costs are tightly
under control and improvement is anticipated in the second half of the year.
The duty free business traded strongly on its African routes for the first six
months. This performance was negated by a disappointing performance on the
Virgin contract. Remedial steps have been taken which are showing the
necessary results.
Prospects
The volatility of the rand makes it difficult to predict the volume of
overseas visitors and their spending patterns, and consequently the
performance of the group. At the present exchange rate of approximately R7.80
to the US dollar trading should improve in the second half of the year.
The political upheaval in Kenya will result in losses being suffered in the
second half of the year in the East Africa businesses, wiping out the good
performance in the tour operator business to December 2007. Staff
retrenchments and salary reductions have already been implemented in respect
of the tour operator business. These East African businesses contributed 9%
to the operating income to December 2007.
Ordinary dividend
An ordinary dividend of 8.0 cents per share was paid on 22 October 2007 in
line with our policy of paying an annual dividend equal to 50% of earnings per
share.
Board of directors
Tanya Abrahamse resigned on 30 September 2007 to avoid any conflict of
interest following her appointment as CEO of the South African Biodiversity
Institute. Blacky Komani resigned on 8 February 2008 as he took up an
executive position in the group. Carol Scott has tendered her resignation
effective from 29 February 2008. The board takes this opportunity to thank her
for her wise counsel during her tenure on the board.
Corporate governance
The group fully supports the Code on Corporate Practices and Conduct as
contained in the King Report on corporate governances.
Contingent liability
There were no contingent liabilities at the end of the period.
Cautionary announcement
On 29 January 2008, the board renewed 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, therefore, must
continue to exercise caution in their dealings with the company`s securities
until further information is made available.
Basis of preparation, accounting policies and disclosures
The condensed interim 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, circular 8/2007 headline earnings
that are effective, at 25 December 2007 have been applied. All new accounting
pronouncements, effective for the year have been adopted, but did not have a
material impact on the group, either in the current or prior year, therefore
no restatements have been made.
During the period under review, Tourvest acquired businesses for R84.8 million
with a provisional fair value allocation of R22.6 million to assets and the
balance of R62.2 million allocated to intangibles. The fair value allocation
will be finalised by year end. The businesses made a marginal loss for the
periods that they were consolidated. Had the businesses been consolidated from
25 June 2007, revenue of R29.4 million and profit of R6.2 million would have
been included in the six month period results as the businesses are seasonal
in their trade.
The accounting policies adopted and method of computation are consistent with
those applied in the financial statements for the year ended 25 June 2007.
GROUP BALANCE SHEET at 25 December
R000 2007 2006 25 Jun
Unaudited Unaudited 2007
Audited
ASSETS
Non-current assets
Property and equipment 273 760 206 715 234 975
Intangible assets 314 331 143 584 231 387
Deferred taxation 15 070 17 546 22 713
Financial assets 31 507 30 223 29 358
Current assets
Inventories 256 582 223 070 211 401
Trade and other 358 741 283 917 394 990
receivables
Cash and bank balances 150 447 - 157 481
Taxation paid in advance 1 565 1 973 2 168
Assets of disposal group - - 11 103
held for sale
Foreign notes held 59 694 45 741 32 503
Total current assets 827 029 554 701 809 646
Total assets 1 461 697 952 769 1 328 079
EQUITY AND LIABILITIES
Capital and reserves
Share capital and 85 662 85 662 85 662
premium
Share repurchases and (70 266) (71 104) (70 286)
consolidated shares
Other reserves 19 163 25 045 21 464
Accumulated profits 384 566 321 334 394 231
Attributable to Tourvest 419 125 360 937 431 071
shareholders
Minority interest 64 158 45 784 56 552
Total equity 483 283 406 721 487 623
Non-current liabilities
Interest bearing 39 620 15 527 31 060
borrowings
Deferred taxation 3 227 3 687 5 507
Current liabilities
Non-interest bearing
Trade and other payables 512 068 430 614 486 688
Provisions 18 744 13 601 21 131
Taxation payable 28 866 28 024 37 113
Liabilities of disposal - - 6 116
group held for sale
Dividends payable 710 654 710
Interest bearing
Current portion of 25 624 2 560 10 962
interest bearing
borrowings
Bank borrowings 289 942 3 404 199 585
Loans relating to 59 613 47 977 41 584
foreign notes held
Total current 935 567 526 834 803 889
liabilities
Total equity and 1 461 697 952 769 1 328 079
liabilities
GROUP INCOME STATEMENT for the six months ended 25 December
R000 % 2007 2006 25 Jun
change Unaudited Unaudited 2007
Audited
Revenue 20 951 103 789 741 1 623 780
Operating 20 119 111 98 951 225 230
income
Net interest (14 409) (3 853) (8 437)
paid
Income before 10 104 702 95 098 216 793
taxation
Taxation (36 830) (34 307) (64 826)
Profit for the 12 67 872 60 791 151 967
period before
loss on
discontinued
operation
Loss on - - (3 936)
discontinued
operation
Profit for the 12 67 872 60 791 148 031
period
Attributable
to:
Shareholders 5 52 479 49 900 124 781
Minority 41 15 393 10 891 23 250
shareholders
Profit for the 12 67 872 60 791 148 031
period
Earnings per 6 6.8 6.4 16.0
share (cents)
Diluted 6 6.7 6.3 15.8
earnings per
share (cents)
ADDITIONAL
INFORMATION
Reconciliation
of attributable
income to
headline
earnings
Profit for the 52 479 49 900 124 781
period
attributable to
shareholders
(Profit)/loss (3 691) (421) 106
on disposal of
subsidiaries
and other
capital assets
Closure cost - - 2 254
Impairment of 568 - -
intangibles
Headline - 49 356 49 479 127 141
earnings
Headline - 6.4 6.4 16.3
earnings per
share (cents)
Diluted 6.3 6.3 16.1
headline
earnings per
share (cents)
Weighted 776 483 774 343 778 044
average shares
(000)
Closing number 830 350 830 350 830 350
of shares (000)
Net asset value 58.20 48.98 58.73
per share
(cents)
Dividend paid 8.00 6.40 6.40
per share
(cents)
Capital 82 066 114 655 176 624
Commitments
Authorised 47 070 99 082 108 122
and contracted
Authorised 34 996 15 573 68 502
but not yet
contracted
GROUP CASH FLOW STATEMENT for the six months ended 25 December
R000 2007 2006 25 Jun
Unaudited Unaudited 2007
Audited
Cash flows from 25 991 21 956 103 785
operating activities
Cash flow from investing (125 659) (113 046) (247 466)
activities
Cash flow from financing 4 677 (2 684) 11 811
activities
Net movement in cash and (94 991) (93 774) (131 870)
cash equivalents
Cash and cash (42 104) 90 115 90 115
equivalents at beginning
of period
Cash reallocated from 1 196 - (1 196)
(to) disposal group held
for sale
Foreign currency (3 596) 255 847
translation reserve
Cash and cash (139 495) (3 404) (42 104)
equivalents at end of
period
GROUP SEGMENTAL ANALYSIS at 25 December
R000 % 2007 2006
change Unaudited Unaudited
Revenue
Inbound Tourism Services 27 166 374 131 334
Outbound Travel Services 13 139 623 123 589
Financial Services 8 63 027 58 319
Retail Merchandising 22 582 079 476 499
Group 20 951 103 789 741
Operating income
Inbound Tourism Services 109 25 021 11 950
Outbound Travel Services 30 25 539 19 645
Financial Services 11 18 409 16 587
Retail Merchandising (1) 50 142 50 769
Group 20 119 111 98 951
Net operating assets
Inbound Tourism Services 67 213 944 127 764
Outbound Travel Services 39 85 126 61 353
Financial Services (10) 42 723 47 443
Retail Merchandising 68 276 806 164 465
Group 54 618 599 401 025
GROUP STATEMENT OF CHANGES IN EQUITY at 25 December
Share Share Other Accumulated
capital repurchases reserves profit
and and
premium consolidated
shares
Opening 85 662 (71 907) 27 062 319 962
balance at 25
Jun 2006
Attributable 284 124 781
income to 25
Jun 2007
Dividend paid (53 142)
Dividend 3 642
accruing to
treasury stock
Transfer from 1 012 (1 012)
statutory
reserve
Deferred tax (8 254)
release on
trademark
Purchase of
business
Foreign 1 360
exchange
translation
differences
Exercise of 1 621
options in
share trust
Balance at 25 85 662 (70 286) 21 464 394 231
Jun 2007
Attributable 142 52 479
income to 25
Dec 2007
Dividend paid (66 428)
Dividend 4 284
accruing to
treasury stock
Foreign (2 443)
exchange
translation
differences
Exercise of 20
options in
share trust
Balance at 25 85 662 (70 266) 19 163 384 566
Dec 2007
Group statement of changes in equity at 25 December (continued)
Attributable to Minority Total
Tourvest interest equity
Opening balance at 360 779 37 662 398 441
25 Jun 2006
Attributable 125 065 23 250 148 315
income to 25 Jun
2007
Dividend paid (53 142) (8 414) (61 556)
Dividend accruing 3 642 3 642
to treasury stock
Transfer from - -
statutory reserve
Deferred tax (8 254) (8 254)
release on
trademark
Purchase of - 3 740 3 740
business
Foreign exchange 1 360 314 1 674
translation
differences
Exercise of 1 621 1 621
options in share
trust
Balance at 25 Jun 431 071 56 552 487 623
2007
Attributable 52 621 15 393 68 014
income to 25 Dec
2007
Dividend paid (66 428) (6 731) (73 159)
Dividend accruing 4 284 4 284
to treasury stock
Foreign exchange (2 443) (1 056) (3 499)
translation
differences
Exercise of 20 20
options in share
trust
Balance at 25 Dec 419 125 64 158 483 283
2007
For and on behalf of the board.
CE Scott RT Edmond
Chairman Chief executive
Johannesburg
25 February 2008
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)*, MP de Canha, E de Jager*, 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 or e-mail: tourvest@dpapr.com
Website: www.tourvest.co.za
Date: 25/02/2008 11:43:02 Produced by the JSE SENS Department.
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