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CUL
CUL
CUL - Cullinan Holdings - Unaudited interim results for the six months ended
31 March 2008 and dividend declaration
CULLINAN HOLDINGS LIMITED
(Registration number 1902/001808/06)
(Share code: CUL & ISIN: ZAE000013710)
("the company" or "the group")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2008
Group balance sheet
Unaudited Unaudited Audited
six months six months year end
31 March 31 March 30 September
2008 2007 2007
R`000 R`000 R`000
Assets
Non-current assets 116 809 101 609 117 363
Property, plant and equipment 62 128 49 513 63 876
Investment properties 331 331 331
Goodwill 24 091 23 763 23 721
Intangible assets 25 978 24 229 25 529
Investment in associate 1 265 200 876
companies
Deferred taxation 3 016 3 573 3 030
Current assets 262 507 238 954 255 759
Inventories 9 903 9 373 10 008
Accounts receivable 128 441 102 382 123 052
Taxation 24 - 531
Cash resources 124 139 127 199 122 168
Total assets 379 316 340 563 373 122
Equity and Liabilities
Ordinary shareholders` equity 102 066 84 004 86 180
Preference shareholders` equity 1 046 1 046 1 046
Outside shareholders` interest 5 3 5
Total shareholders` equity 103 117 85 053 87 231
Non current liabilities 41 288 35 350 50 385
Deferred tax liability 1 806 1 539 1 729
Long-term loans 32 589 33 811 43 061
Operating lease accrual 6 893 - 5 595
Current liabilities 234 911 220 160 235 506
Short-term loans 1 716 2 380 1 954
Operating lease accrual 61 - 204
Accounts payable 231 513 211 805 225 067
Taxation 1 607 5 961 8 267
Preference dividends 14 14 14
Total equity and liabilities 379 316 340 563 373 122
Financial statistics
Gearing (%) - - -
Current ratio 1:1 1:1 1:1
Net asset value per share 14,3 11,8 12,14
(cents)
Group income statement
Unaudited Unaudited Audited
six months six months year end
31 March 31 March 30 September
2008 2007 2007
R`000 R`000 R`000
Revenue 197 677 175 483 353 710
Net operating expenses (177 651) (159 350) (325 651)
Operating income 20 026 16 133 28 059
Finance income 3 575 3 076 4 349
Finance expenses (1 854) (1 323) (408)
Preference dividends paid (27) (27) (55)
Profit before taxation 21 720 17 859 31 945
Taxation (5 456) (5 215) (10 026)
Profit for the period 16 264 12 644 21 919
Profit attributable to equity 16 264 12 644 21 917
holders of the company
Profit attributable to outside - - 2
shareholders` interest
16 264 12 644 21 919
Ordinary shares (000`s)
In issue 718 355 718 355 718 355
Earnings per ordinary share 2,26 1,76 3,05
(cents)
Fully diluted earnings per 2,26 1,76 3,05
ordinary share (cents)
Headline earnings per ordinary 1,81 1,76 3,19
share (cents)
Fully diluted headline earnings 1,81 1,76 3,19
per ordinary share (cents)
Determination of headline
earnings
Reconciliation between
attributable earnings and
headline earnings
Earnings attributable to 16 264 12 644 21 917
ordinary shareholders
(Profits)/losses on disposal of (3 769) - 1 406
property, plant and equipment
Total tax effect of the 546 - (408)
adjustment
Total minority interest of the - - -
adjustment
Headline earnings 13 041 12 644 22 915
Group statement of changes in equity
Unaudited Unaudited Audited
six months six months year end
31 March 31 March 30 September
2008 2007 2007
R`000 R`000 R`000
Ordinary share capital
Balance at the beginning of 7 184 7 183 7 182
period
Issued during the period - 1 1
Balance at the end of period 7 184 7 184 7 183
Share premium
Balance at the beginning of 59 905 59 902 59 902
period
Premium on issue of shares - 3 3
Balance at the end of period 59 905 59 905 59 905
Share capital reduction reserve
fund
Balance at the beginning of 20 876 20 876 20 876
period
Balance at the end of period 20 876 20 876 20 876
Capital redemption reserve fund
Balance at the beginning of 4 4 4
period
Balance at the end of period 4 4 4
Foreign currency translation
reserve
Balance at the beginning of (1 063) (1 318) (1 318)
period
Reserve on translation of (378) 168 255
foreign subsidiary
Balance at the end of period (1 441) (1 150) (1 063)
Accumulated profit/(loss)
Balance at beginning of period (726) (15 459) (15 459)
Attributable income for period 16 264 12 644 21 917
Ordinary dividend paid - - (7 184)
Balance at end of period 15 538 (2 815) (726)
Ordinary shareholders` equity 102 066 84 004 86 180
Group cash flow statement
Unaudited Unaudited Audited
six months six months year end
31 March 31 March 30 September
2008 2007 2007
R`000 R`000 R`000
Cash flow from operating
activities
Operating income 20 026 16 133 28 059
Adjustments for:
- Depreciation 9 173 7 440 15 267
- (Profit)/Loss on sale of (3 769) 798 1 406
property, plant and equipment
- Other non-cash items 965 501 3 404
(Increase)/Decrease in working 1 162 (7 525) (15 572)
capital
Cash generated by operations 27 557 17 347 32 564
Net finance income 1 721 1 753 3 941
Preference dividends paid (27) (27) (55)
Ordinary dividends paid - - (7 184)
Normal taxation (11 606) (6 872) (7 974)
Secondary Taxation on Companies (3) (3) (905)
Net cash inflow/(outflow) from 17 642 12 198 (20 387)
operating activities
Cash flows from investing
activities
Additions to property, plant (7 073) (5 836) (27 234)
and equipment
Additions to intangible assets (2 403) (1 515) (4 701)
Proceeds on disposal of 4 904 379 861
property, plant and equipment
Investment in associate (389) - (676)
companies
Net cash outflow from investing (4 961) (6 972) (31 750)
activities
Cash flow from financing
activities
Ordinary share capital issued - 4 4
Long-term loans raised/(repaid) (10 472) (2 019) 9 945
Short-term loans (238) (838) (1 244)
raised/(repaid)
Net cash inflow/(outflow) from (10 710) (2 853) 8 705
financing activities
Net increase in cash and cash 1 971 2 373 (2 658)
equivalents
Cash and cash equivalents at 122 168 124 826 124 826
beginning of year
Cash and cash equivalents at 124 139 127 199 122 168
end of year
Notes:
1. Basis of preparation
The accounting policies used in the preparation of the interim financial
statements for the six months to March 2008 are the same as those used in the
audited results for the financial year ended September 2007.
These consolidated results for the six months were drawn up in compliance with
statement IAS 34 of International Financial Reporting Standards and the company
has complied with the requirements of the Companies Act, 1973 (Act 61 of 1973)
as amended.
2. Business segment analysis
The group is organised into two main business segments:
- Travel and Tourism
- Yachting and diving accessories (Manex)
Unaudited
six months
31 March 2008
Travel Yachting Total
and and
Tourism Diving
R`000 R`000 R`000
Revenue 183 203 14 474 197 677
Operating Income 19 690 336 20 026
Other information
Assets excluding deferred 363 895 12 405 376 300
taxation
Current liabilities 230 709 4 202 234 911
Capital expenditure
- Property, plant and equipment 6 949 124 7 073
- Investment properties - - -
- Intangible assets 2 403 - 2 403
Depreciation 9 097 76 9 173
Unaudited
six months
31 March 2007
Travel Yachting Total
and and
Tourism Diving
R`000 R`000 R`000
Revenue 159 791 15 692 175 483
Operating Income 15 260 873 16 133
Other information
Assets excluding deferred 325 705 11 285 336 990
taxation
Current liabilities 217 088 3 072 220 160
Capital expenditure
- Property, plant and equipment 5 797 39 5 836
- Investment properties - - -
- Intangible assets 1 515 - 1 515
Depreciation 7 338 102 7 440
Audited
year end
30 September 2007
Travel Yachting Total
and and
Tourism Diving
R`000 R`000 R`000
Revenue 325 898 27 812 353 710
Operating Income 27 661 398 28 059
Other information
Assets excluding deferred 358 234 11 858 370 092
taxation
Current liabilities 230 404 5 102 235 506
Capital expenditure
- Property, plant and equipment 26 978 256 27 234
- Investment properties - - -
- Intangible assets 4 701 - 4 701
Depreciation 15 053 214 15 267
3. JSE Limited ("JSE")
The directors of the company ensured compliance with the JSE Listings
Requirements during the year under review.
Comments
Cullinan Holdings owns businesses that focus on the travel and tourism industry
in Southern Africa. The major part of its income comes from Tour Operating under
the Thompsons brand in both the incoming and outgoing markets and a day tour and
coaching business under the Hylton Ross brand. The retail brand Pentravel
operates in the leisure travel sector with 24 outlets located in prime retail
shopping malls in the country. A small corporate travel retail business is run
under the Thompsons Travel label with three branches. The incoming delivery
footprint extends to all major travel nodes in the region. The company also owns
Manex, a supplier of accessories to the yacht building and diving industries.
Review of the past six months
Attributable earnings per share increased by 28% to R16,2 million for the six
months to March 2008 and headline earnings per share increased by 3% to R13,0
million. The contributors to the growth were the Thompsons Inbound division,
Thompsons Touring and Hylton Ross, all of which enjoyed good trading conditions
and improved profits. The Outbound division and the Leisure retail operations
experienced slower sales.
The group`s cash flow remained positive for the period under review.
TRAVEL AND TOURISM
Thompsons Holidays (Outbound)
Thompsons Holidays, the Outbound division, is a wholesale supplier of travel
products and holidays to the South African market. The domestic market is being
affected by a weaker and volatile rand, high interest rates, rising inflation
and political uncertainties which has resulted in lower sales in recent months.
In addition, Thompsons Holidays faces the ongoing challenge of realigning itself
with the disintermediation taking place in the industry.
Thompsons Africa (Inbound)
Thompsons Africa, the Inbound division, deals with foreign Tour Operators and
provides a wide range of services to tourists in the Southern African region.
This division provides a full destination management service in South Africa,
Namibia, Zimbabwe, Zambia, Botswana, Mozambique and Mauritius. Thompsons Africa
has a geographically well diversified client base with customers in Europe, UK,
USA, Far East, Middle East, Australia and South America. The mature UK and
European market continues to grow and there has been good growth out of the US
and Asia which is particularly price sensitive.
Thompsons Africa had a good six months with increased sales and profitability.
Although sales are generally priced in rands, the weaker currency has
contributed to sales growth by making the Southern Africa destination more
competitive. In addition, there are indications that the 2010 World Cup is
continuing to increase awareness of Southern Africa as a holiday destination.
Thompsons Africa Touring and Safaris
The Touring and Safaris division provides ground handling services in the
Southern African region with offices in 13 tourist hubs in Southern Africa.
These services include transfers, day tours, game drives, camping safaris and
guaranteed departure tours.
Sales growth in the six months has been good with a commensurate increase in
profits. The sales growth has occurred across most of the offices.
Retail Travel
The Leisure retail outlets have also experienced slower sales with turnover at
the same levels as those achieved in the equivalent period last year.
Hylton Ross
Hylton Ross Tours operates coaches and vehicles for hire and charter in the
domestic travel market and also provides day tours in and around the Western
Cape and the Garden Route. It is a well known brand in the travel market and
enjoys a substantial market share in the Western Cape.
This company experienced good trading conditions in the six months with
increases in both sales and profitability.
YACHTING AND DIVING
Manex
Manex is a supplier of accessories to the yacht building industry and also
distributes diving equipment to the retail trade. This division has experienced
slow sales in the six months. Steps are being taken to improve the performance
of this business.
PROSPECTS FOR THE NEXT SIX MONTHS
The poor global economic outlook, the high inflation rate and the high interest
rates facing South Africans, is expected to have a negative impact on the sales
of holidays and travel products in the next six months.
Pension Fund Surplus Distribution
Shareholders will be aware of the various allegations made in the press
regarding the Midmacor Pension Fund, details of which were disclosed in the 2006
and 2007 Annual Reports. This matter stems from actions in 1999 which did not
involve any of the current management, directors and shareholders of the
company. No claim has been instituted against the company and should any claim
be instituted it will be opposed. The company will continue to assist the
Financial Services Board in its enquiries.
DIVIDEND
The board has declared a dividend of 1 cent per ordinary share (number 129) to
all shareholders for the financial year ending 30 September 2008. The salient
dates relating to payment of the dividend are as follows:
Last date to trade cum dividend Friday, 18 July 2008
Shares commence trading ex dividend Monday, 21 July 2008
Record date Friday, 25 July 2008
Payment date Monday, 28 July 2008
Share certificates may not be dematerialised or rematerialised between Monday,
21 July 2008 and Friday, 25 July 2008, both days inclusive.
19 June 2008
Directors
MA Ness (Chairman)*, VET O`Hana , DD Hosking **, M Tollman ***,
AN Viljoen (Managing), LA Pampallis
* British ** New Zealand *** USA Non-Executive
Registered office
6 Hood Avenue, Rosebank, 2196
Transfer secretaries
Computershare Investor Services (Pty) Limited,
Ground Floor, 70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
For further information on group activities, please write to:
The Group Secretary, Cullinan Holdings Limited
PO Box 41032, Craighall, 2024
Auditors
Mazars Moores Rowland were appointed to act as auditors to the company with
effect from 13 May 2008.
Sponsor
Arcay Moela Sponsors (Proprietary) Limited
(Registration number 2006/033725/07)
Date: 19/06/2008 17:45:01 Produced by the JSE SENS Department.
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