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RAH
RAH
RAH - Real Africa - Profit and Dividend Announcement for the Six Months
Ended 31 December 2008
Real Africa Holdings Limited
(Registration number 1994/003919/06)
Share code: RAH
ISIN code: ZAE000008702
("Real Africa" or "RAH" or "the company")
PROFIT AND DIVIDEND ANNOUNCEMENT FOR THE SIX MONTHS ENDED 31 DECEMBER 2008
GROUP INCOME STATEMENTS
Six months ended Six months ended Year ended
31 December 31 December 30 June
2008 2007 2008
R`000 Unaudited Unaudited
Revenue 42 839 1 532 67 408
Net investment
(losses)/profits (9 382) 89 635 95 389
Share of profits of
associates 24 820 24 650 48 946
Interest income 1 851 3 030 4 450
Litigation settlement - 110 000 110 000
Operating income 60 128 228 847 326 193
Operating costs (2 592) (4 167) (6 765)
Amortisation (3 791) (4 641) (7 584)
Interest expense (258) (4 001) (5 647)
Profit before tax 53 487 216 038 306 197
Tax (425) (29 425) (33 720)
Profit 53 062 186 613 272 477
Attributable to:
Minority 3 816 32 063 44 713
Ordinary shareholders 49 246 154 550 227 764
53 062 186 613 272 477
Earnings per share (cents) 13,6 42,7 63,0
Headline earnings per
share (cents) 16,1 19,3 37,7
GROUP BALANCE SHEETS
31 December 31 December 30 June
2008 2007 2008
R`000 Unaudited Unaudited Restated
ASSETS
Non current assets
Investments in
associates 123 557 146 634 132 073
Available-for-sale
investments 808 635 1 077 833 732 702
Current assets 932 192 1 224 467 864 775
Trade and other
receivables - 23 245
Tax 2 446 - 2 374
Cash and cash
equivalents 29 991 - 42 234
32 437 23 44 853
Total assets 964 629 1 224 490 909 628
EQUITY AND LIABILITIES
Capital and reserves
Ordinary shareholders`
equity 841 290 1 026 282 778 617
Minority interest 65 091 102 917 58 747
Non current liabilities 906 381 1 129 199 837 364
Preference shares 15 000 49 122 37 392
Deferred tax 264 264 264
Tax 14 548 - 14 548
Current liabilities 29 812 49 386 52 204
Trade and other
payables 1 307 329 2 003
Provisions 27 000 18 000 18 000
Bank overdraft - 8 954 -
Tax 129 18 622 57
28 436 45 905 20 060
Total liabilities 58 248 95 291 72 264
Total equity and
liabilities 964 629 1 224 490 909 628
SUMMARISED GROUP CASH
FLOW STATEMENTS
Six months ended Six months ended Year ended
31 December 31 December 30 June
2008 2007 2008
R`000 Unaudited Unaudited
Cash flows from
operating activities (3 849) 132 193 73 610
Cash flows from
investing activities 74 234 163 204 278 774
Cash flows from
financing activities (82 628) (341 507) (347 306)
Net cash flows (12 243) (46 110) 5 078
GROUP STATEMENT OF CHANGES IN EQUITY
Restated Ordinary
share Capital Non-
capital redemp- controll-
and tion ing Retained
R`000 premium reserve reserve earnings
Balance at
30 June 2007 85 161 1 080 (3 751) 262 014
Profit 227 764
Dividends paid (198 824)
Investment revaluation
Purchase of minorities`
interests (14 192)
Movement in treasury
shares 1 881
Balance at 30 June
2008 as previously stated 87 042 1 080 (17 943) 290 954
Impact of restatement
Restated balance at
30 June 2008 87 042 1 080 (17 943) 290 954
Profit 49 246
Dividends paid (57 915)
Investment revaluation
Balance at
31 December 2008 87 042 1 080 (17 943) 282 285
Fair
value Minority
reserve interest Total
Balance at
30 June 2007 803 334 150 656 1 298 494
Profit 44 713 272 477
Dividends paid (41 644) (240 468)
Investment revaluation (265 465) (22 350) (287 815)
Purchase of minorities`
interests (63 712) (77 904)
Movement in treasury shares 1 881
Balance at 30 June
2008 as previously stated 537 869 67 663 966 665
Impact of restatement (120 385) (8 916) (129 301)
Restated balance at
30 June 2008 417 484 58 747 837 364
Profit 3 816 53 062
Dividends paid (2 063) (59 978)
Investment revaluation 71 342 4 591 75 933
Balance at
31 December 2008 488 826 65 091 906 381
HEADLINE EARNINGS PER SHARE
Six months ended Six months ended Year ended
31 December 31 December 30 June
2008 2007 2008
R`000 Unaudited Unaudited
Headline earnings per
share (cents) 16,1 19,3 37,7
Weighted average
number of shares
(million) 361,6 361,6 361,6
Reconciliation of
headline earnings
(R`000)
Earnings attributable
to ordinary
shareholders 49 246 154 550 227 764
Adjusted for:
Realised investment
profits - (90 705) (114 930)
Pension fund provision 9 000 - 18 000
Tax on above items - 5 940 5 560
Headline earnings 58 246 69 785 136 394
NET ASSET VALUE
31 December 31 December 30 June
2008 2007 2008
R`000 Unaudited Unaudited
Afrisun Leisure 1 246 810 1 566 787 1 041 836
Other net liabilities (27 788) (18 000) (22 610)
Cash/(bank overdraft) 18 432 (9 629) 30 722
Borrowings (7 022) (21 497) (7 584)
Net asset value 1 230 432 1 517 661 1 042 364
Issued shares net of treasury
shares (million) 361,6 361,6 361,6
Net asset value per share (cents) 340 420 288
Notes
1. Afrisun Leisure`s value is stated net of preference share debt and cash.
2. All the investments held by Afrisun Leisure have been valued using the
Discounted Cash Flow (DCF) valuation method applying a discount rate of 12,57%
(31 December 2007: 13,35%; 30 June 2008: 15,10%) at 31 December 2008, to the
directors` current estimated future cash flows. A minority discount of 15% has
been applied to the valuation of the gaming company investments. The significant
volatility in the discount rates used in the respective valuations is due to the
changes in the long-term government bonds used as the risk free rate.
ACCOUNTING POLICIES
The unaudited condensed consolidated financial information has been prepared in
accordance with the recognition and measurement criteria of all applicable
statements and interpretations of International Financial Reporting Standards
(IFRS) and is presented in terms of the disclosure requirements set out in IAS
34 - Interim Financial Reporting. The accounting policies applied to the
condensed consolidated financial information are consistent with those as set
out in the annual financial statements for the year ended 30 June 2008.
RESTATEMENT
As disclosed in the group`s audited annual financial statements for the year
ended 30 June 2008, a minority discount of 15% is applied by RAH in determining
the fair value of its minority investments. In calculating the fair value of
the available-for-sale investments at 30 June 2008, the 15% minority discount
was inadvertently omitted. The audited financial statements at 30 June 2008
have been restated to correct this omission. This restatement has no impact on
the income statement with the only impact on the balance sheet being:
Available- Fair value
for-sale reserve Minority
R`000 investments (Equity) interest
Balance as previously stated 862 003 537 869 67 663
Adjustment (129 301) (120 385) (8 916)
Restated balance 732 702 417 484 58 747
REVIEW OF RESULTS
Revenue comprising dividends received was above the previous period due to
SunWest and Afrisun KZN not having declared a dividend in the prior period.
Share premium distributions totalling R42,7 million were effected by these
entities in that period.
The net investment loss of R9,4 million (2007: R89,6 million profit) relates
primarily to an increase of the pension fund provision relating to Life
Esidimeni (Pty) Limited (R9 million), resulting from Life Esidimeni continuing
to negotiate a settlement in the matter between the company and the curator of
the Life Healthcare Pension Fund. Included in the comparative period is the
profit on the sale of Life Esidimeni of R90,7 million following its disposal for
R180 million. The share of profits of associates includes the group`s share of
income from Afrisun Gauteng, Zonwabise as well as the management companies.
Interest expense has been significantly reduced due to the redemption of
preference shares during the six months under review.
The tax charge for the comparative six months includes capital gains tax on the
litigation settlement and the gain on the disposal of Life Esidimeni.
Headline earnings per share declined by 17%. In the prior period, headline
earnings included the litigation settlement of R110 million, the impact of
which has been partially offset by higher dividends received in the current
period.
The board has declared an interim dividend of 4 cents per share.
NON CURRENT ASSETS
During the period, the group`s effective interest in Afrisun Leisure`s
underlying investments remained unchanged, except for the shareholding in
SunWest that decreased from 14,6% to 14,0% due to SunWest shares issued to GPI
on the exercising of options held by GPI.
The value of Afrisun Leisure has increased from R1 042 million at 30 June 2008
to R1 247 million principally due to the lower discount rate used in the
valuations as a result of a decline in long-term interest rates.
DIRECTORATE
Mr DA Hawton will be retiring from the board of the company on 30 June 2009.
The position of chairman, following Mr Hawton`s retirement, will be assumed by
Mr MV Moosa. Mr RP Becker, who is presently a member of the board, has been
appointed financial director with effect from 5 March 2009.
OUTLOOK
Trading at the group`s major investments is expected to remain subdued.
Assuming no material change in trading conditions and long-term interest rates,
the NAV of RAH is not expected to change significantly.
DIVIDEND
Notice is hereby given that an interim dividend of 4 cents (2007: 8 cents) per
share for the six months ended 31 December 2008 has been declared, payable to
shareholders recorded in the register of the company at the close of business on
the record date appearing below. The salient dates applicable to the interim
dividend are as follows:
2009
Last day to trade cum interim dividend Friday, 20 March
First day to trade ex interim dividend Monday, 23 March
Record date Friday, 27 March
Payment date Monday, 30 March
No share certificates may be dematerialised or rematerialised between Monday,
23 March and Friday, 27 March 2009, both days inclusive. Dividend cheques will
be posted and electronic payments made, where applicable, to certificated
shareholders on the payment date. Dematerialised shareholders will have their
accounts with their Central Securities Depository Participant or broker
credited on the payment date.
For and on behalf of the board
DA Hawton RP Becker
Chairman Financial Director
6 March 2009
REGISTERED OFFICE
27 Fredman Drive, Sandown, Sandton, 2031
REGISTRAR
Computershare Investor Services (Pty) Limited, 70 Marshall Street,
Johannesburg, 2001
SPONSOR
Investec Bank Limited
DIRECTORS
DA Hawton (Chairman), RP Becker, DC Coutts-Trotter, MJ Leeming, MV Moosa,
MMT Ramano
SECRETARIES
Sun International Corporate Services (Pty) Limited
Date: 06/03/2009 11:52:01 Produced by the JSE SENS Department.
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