| Thu 18 Dec 2008, 16:04 | | CUL - Cullinan Holdings Limited - Reviewed results for the year ended 30 |
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CUL
CUL
CUL - Cullinan Holdings Limited - Reviewed results for the year ended 30
september 2008
CULLINAN HOLDINGS LIMITED
(Registration number 1902/001808/06)
(Share code: CUL ISIN: ZAE000013710)
("the company" or "the group")
Reviewed results for the year ended 30 september 2008
Cullinan is a holding company that invests in travel and travel related
businesses. Most of its current investments are in Southern Africa where it has
interests in inbound and outbound tour operating, destination management
activities, retail travel agencies, coach charter, escorted tours, open vehicle
game drives and sightseeing as well as leisure marine equipment.
Results
Attributable earnings per share down 27%
Headline earnings per share down 77%
Consolidated balance sheet
Reviewed Restated
as at as at
30 September 30 September
2008 2007
Notes R`000 R`000
Assets
Non-current assets 118 205 117 711
Property, plant and equipment 60 544 63 876
- Investment properties 2 - 331
- Goodwill 24 070 23 721
- Intangible assets 27 705 25 529
- Investment in associate companies 1 220 876
- Investment in joint venture 3 1 058 348
- Deferred taxation 3 608 3 030
Current assets 283 953 288 532
- Inventories 9 925 10 008
- Accounts receivable 4,5 142 969 155 825
- Taxation 890 531
- Cash resources 130 169 122 168
Non-current assets held for sale 2 7 757 -
Total assets 409 915 406 243
Equity and liabilities
Ordinary shareholders` equity 92 855 83 785
Preference shareholders` equity 6 546 546
Outside shareholders` interest 5 5
Total shareholders` equity 93 406 84 336
Non-current liability 45 928 50 885
- Deferred tax liability 2 386 1 729
- Long-term loans 34 705 43 061
- Operating lease provision 8 337 5 595
- Preference shares 6 500 500
Current liabilities 270 581 271 022
- Short-term portion of long-term
loans 4 351 1 954
- Operating lease provision 68 204
- Accounts payable 4,5 257 527 253 305
- Taxation 741 8 267
- Preference dividends 14 14
- Provisions 7 7 880 7 278
Total equity and liabilities 409 915 406 243
Consolidated income statement
Reviewed Restated
year ended year ended
30 September 30 September
2008 2007
Notes R`000 R`000
Revenue 8 389 939 352 751
Net operating expenses (373 229) (325 368)
Operating income 8 16 710 27 383
Finance income 9 7 664 6 965
Finance expenses 9 (4 637) (3 024)
Preference dividends paid (55) (55)
Share of profit of associates 8 342 676
Share of profit of joint venture 3 710 348
Profit before taxation 20 734 32 293
Tax expense (4 423) (10 026)
Profit for year 16 310 22 267
Profit attributable to equity
holders
of the company 16 310 22 265
Profit attributable to outside
shareholders` interest - 2
Attributable earnings per share
(cents) 2,27 3,10
Diluted earnings per share (cents) 2,27 3,10
Headline earnings per share (cents) 0,69 3,10
Diluted headline earnings per share
(cents) 0,69 3,10
Ordinary shares (`000)
- In issue 718 355 718 355
- Weighted average 718 355 718 355
Determination of headline earnings
Reconciliation between attributable
earnings and headline earnings:
Earnings attributable to ordinary
shareholders 16 310 22 267
Share of profit of associate and
joint venture (1 052) (1 024)
Adjustment to fair value on
investment properties (7 426) -
(Profits)/Losses on disposal
of property, plant and equipment (4 247) 1 406
Total tax effect of the adjustments 1 387 (408)
Total minority interest of the
adjustments - -
Headline earnings 4 972 22 243
Consolidated statement of changes in equity
Reviewed Restated
year ended year ended
30 September 30 September
2008 2007
Note R`000 R`000
Ordinary share capital
Balance at beginning of year 7 184 7 183
Issued during year - 1
Balance at end of year 7 184 7 184
Share premium
Balance at beginning of year 59 905 59 902
Premium on issue of shares - 3
Balance at end of year 59 905 59 905
Share capital reduction reserve fund
Balance at beginning of year 20 876 20 876
Balance at end of year 20 876 20 876
Capital redemption reserve fund
Balance at beginning of year 4 4
Balance at end of year 4 4
Foreign currency translation reserve
Balance at beginning of year (1 063) (1 318)
Reserve on translation of foreign
subsidiary (360) 255
Balance at end of year (1 423) (1 063)
Accumulated loss
Balance at beginning of year as
previously stated (3 121) (15 459)
Prior year adjustment 4 - (2 744)
Restated opening balance (3 121) (18 203)
Gain realised on additional interest
acquired on subsidiary 304 -
Attributable income for year 16 310 22 267
Ordinary dividend paid (7 184) (7 184)
Balance at end of year 6 309 (3 121)
Ordinary shareholders` equity 92 855 83 785
Equity portion of preference share
capital
Balance at beginning of year 546 546
Balance at end of year 546 546
Outside shareholders` interest
Balance at beginning of year 5 3
Profit attributable to outside
shareholders - 2
Balance at end of year 5 5
Total income and expense for the year
Profit for year 16 310 22 267
- Attributable to equity shareholders 16 310 22 265
- Attributable to outside
shareholders - 2
Reserve on translation of foreign
subsidiary (360) 255
15 950 22 174
Summarised consolidated cash flow statement
Reviewed Restated
year ended year ended
30 September 30 September
2008 2007
Notes R`000 R`000
Net cash inflow from
operating activities 8 26 755 19 711
Net cash outflow from
investing activities 8 (12 794) (31 074)
Net cash inflow/(outflow) from
financing activities (5 960) 8 705
Net (decrease)/increase in cash
and cash equivalents 8 001 (2 658)
Notes
1. Basis of preparation
The reviewed condensed consolidated financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting and in compliance with the
South African Companies Act, No 61 of 1973, as amended. The reviewed condensed
consolidated financial statements are prepared on the historical cost basis,
with the exception of certain financial instruments which are measured at fair
value.
2. Investment properties were not revalued in the prior year due to unresolved
suspensive conditions. During the current year these conditions have been met
or are expected to be met subsequent to the year end and investment properties
have been remeasured to fair market value. Management`s intention is to sell
all investment properties and therefore they have been transferred to non-
current assets held for sale at year-end.
3. An investment in a joint venture has been recognised, effectively
increasing 2007 earnings and investments in joint ventures by R348 000.
4. Accounts receivable were restated for 2007 for debit balances amounting to
R33 million previously included in accounts payable and accounts payable have
been restated for the equivalent amount in 2007.
5. Accounts receivable amounting to R500 000 have been written off in years
prior to 2007 as they could not be substantiated. A debit balance in accounts
payable amounting to R2,244 million (2007) has been written off as the amount
could not be substantiated. The effect of these two adjustments was to increase
the opening accumulated loss in 2007 by R2,744 million.
6. The financial liablity portion of preference shares amounting to R500 000
has been reclassified out of equity and into non- current liabilities in the
prior year.
7. Provisions amounting to R7,278 million (2007) were previously included in
accounts payable and have now been separately disclosed.
8. Income from associates has been separately disclosed on the face of the
income statement, effectively reducing revenue and operating income by R676 000
(2007).
Profit from associates is a "non- cash" item and has been removed from the cash
flow statement for 2007.
9. Finance income and expenses have been restated to correct offsetting in the
prior year.
10. JSE Limited ("JSE")
The directors of the company ensured compliance with the JSE Listings
Requirements during the year under review.
11. Segmental reporting
30 September 2008
Travel and Yachting and
Tourism Diving Total
R`000 R`000 R`000
Revenue 366 117 29 321 395 438
Operating profit 15 072 1 238 16 310
30 September 2007
Revenue 329 571 27 812 357 383
Operating profit 26 985 398 27 383
CHIEF EXECUTIVE OFFICER AND CHAIRMAN`S REPORT
Overview
This year saw a decline in the profits of the Outbound and Inbound divisions of
the company due to adverse trading conditions. The volatile fluctuation of
currencies, as well as the challenging local and global market economic
conditions, resulted in a decline in both Outbound and Inbound business. The
newly constituted Board of Directors of Cullinan, appointed in July 2008,
addressed these conditions by implementing a cost reduction programme, an
efficiency drive and a number of new sales incentive initiatives.
REVIEW OF OPERATIONS
Thompsons Tours (the Outbound division)
The Outbound division is a wholesale supplier of travel-related products and
holidays to the South African market. The domestic travel market has continued
to be affected by the volatile Rand, high interest rates, high inflation and
the change in buying patterns. This resulted in a slow down of sales in the
second six months of the year. This has been addressed by way of a number of
new sales initiatives, the implementation of cost reduction measures and an
efficiency drive.
Thompsons Africa (the Inbound division)
The Inbound division is a tour wholesaler and destination marketing
organisation that sells Africa to the world. The xenophobic attacks and
negative international publicity resulted in many cancellations by tourists
affecting sales which have been further aggravated by the global slow down in
travel. Steps have been implemented to reduce costs.
Thompsons Africa Touring and Safaris
The Touring division provides tourism products for the Incoming division.
These include escorted tours, general sightseeing and open vehicle game drives
in the National Parks which are offered throughout Southern Africa. Turnover
and profits have declined slightly this year.
Thompsons Travel
Thompsons Travel is a retail travel agency with offices in Johannesburg, Cape
Town and Durban. The Corporate division showed a satisfactory improvement in
profitability this year.
Pentravel
Pentravel is a chain of 23 retail travel outlets located in the major shopping
malls throughout South Africa. It has also experienced a reduction in sales and
profitability this year in line with the general slow down in travel by South
Africans.
Hylton Ross Tours
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. The company continued to
grow turnover and profitability throughout the year.
Thompsons Gateway
Gateway, a sales office in Singapore, had a reasonable year showing improved
turnover, although profits were down due to a decrease in margins. Costs were
well controlled.
Planet Africa
Planet Africa is a joint venture operation formed to sell and market Southern
Africa to Far East tourists. It has had a record year in turnover and profits.
Manex
Manex is a supplier to the yacht building industry. The management was replaced
during the latter part of the year and steps taken to improve profitability.
Acquisition of Central Boating
The company purchased Central Boating with effect from 1 October 2008 which is
a marine leader in the importation and distribution of leisure marine equipment
to both the yachting and power boat sectors of the market in South Africa. This
acquisition will strengthen the company`s presence in the marine industry and
will add additional profits to the group in the future.
Details of net assets and goodwill as follows:
Purchase consideration R17,44 million
Fair value of net assets acquired R7,44 million
Goodwill R10,00 million
Goodwill is attributable to significant synergies expected to arise between
Manex and Central Boating.
Prospects
Difficult market conditions remain an ongoing challenge for management. To
address these conditions, the company embarked upon a cost reduction and
efficiency improvement drive during the year. The company will remain focused
on increasing sales next year. The company will also continue to take
advantage of market opportunities as they arise during 2009.
On behalf of the Board
AN Viljoen M Tollman
Chief Executive Officer Chairman
19 December 2008
Directors
M Tollman (Chairman) , MA Ness *, VET O`Hana , DD Hosking **, AN Viljoen,
LA Pampallis, G Tollman***
* British, ** New Zealand, *** USA
Non-Executive
Company secretary
DK Standage
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 Company Secretary, Cullinan Holdings Limited, PO Box 41032,
Craighall, 2024
Auditors
Mazars Moores Rowland were elected as auditors during the year and will
continue to act as auditors to the company.
An unmodified review opinion is available for inspection at the registered
office of the company.
Sponsor
Arcay Moela Sponsors (Proprietary) Limited
(Registration number 2006/033725/07)
Date: 18/12/2008 16:04:35 Produced by the JSE SENS Department.
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