| Thu 26 Mar 2009, 16:30 | | IFH - IFA SA - Interim Results For The Six Months Ended 31 December 2008 |
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IFH
IFH
IFH - IFA SA - Interim Results For The Six Months Ended 31 December 2008
IFA HOTELS & RESORTS LIMITED
("IFA SA" or "the company" or "the group")
Registration number 1919/001318/06
Share code: IFH ISIN: ZAE000075669
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2008
CONSOLIDATED INCOME STATEMENT
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2008 2007 2008
Audited Audited Audited
R`000 R`000 R`000
Revenue 40 413 73 817 118 780
Operating (loss)/profit (12 474) 7 906 (11 119)
Investment revenue 28 536 8 906 35 028
Finance costs (30 137) (9 156) (36 796)
(Loss)/profit from equity -
accounted investments (5 290) (2 479) 4 071
(Loss)/profit before taxation (19 365) 5 177 (8 816)
Taxation 4 041 (2 974) 3 253
(Loss)/profit for the period (15 324) 2 203 (5 563)
Attributable to:
Equity holders of the parent (15 324) 2 203 (5 563)
Basic and diluted (loss)/earnings
per share (cents) ("EPS") (7,02) 1,01 (2,55)
Notes to the income statement
Basic and diluted headline
earnings per share (cents)("HEPS") (7,10) 1,01 (2,66)
CONSOLIDATED CASH FLOW STATEMENT
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2008 2007 2008
Audited Audited Audited
R`000 R`000 R`000
Cash flows from operating activities 2 695 9 741 48 698
Cash generated by operating
activities 5 315 22 684 76 111
Interest received 28 536 8 906 25 648
Interest paid (30 137) (9 156) (35 938)
Taxation paid (1 019) (12 693) (17 123)
Cash flows from investing
activities (122 753) (132 768) (236 925)
Expenditure to maintain operating
capacity
Property, plant and equipment
acquired (7 309) (8 972) (60 676)
Proceeds of disposals of property,
plant and equipment 240 4 354
Expenditure for expansion
Investment in associates (13 775) (15 000) (15 000)
Loans to associate and
subsidiaries (102 509) (110 000) (163 403)
Other investments 600 1 200 1 800
Cash flows from financing
activities 113 236 102 550 244 715
Amount owing to joint venture - - 25 887
Loans raised 116 793 180 276 237 058
Loans repaid (3 557) (77 726) (18 230)
(Decrease)/increase in cash and
cash equivalents (6 822) (20 477) 56 488
Cash and cash equivalents at
beginning of the period 102 213 45 688 45 688
Cash and cash equivalents at end
of the period 95 391 25 211 102 176
CONSOLIDATED BALANCE SHEET
31 December 31 December 30 June
2008 2007 2008
Audited Audited Audited
R`000 R`000 R`000
ASSETS
Non-current assets 545 519 292 800 443 043
Property plant and equipment 170 174 102 353 166 144
Intangible assets 2 298 2 298 2 298
Investment in associates 344 772 183 049 233 743
Loans to group companies - - 21 261
Other investments 3 900 5 100 4 500
Amount owing by joint venture 12 266 - 8 402
Deferred tax 12 109 - 6 695
Current assets 283 461 393 312 288 386
Inventories 2 098 3 711 1 812
Township properties 137 676 131 629 130 306
Trade and other receivables 40 674 142 128 49 520
Other financial assets 7 622 90 633 4 572
Cash and cash equivalents 95 391 25 211 102 176
Total assets 828 980 686 112 731 429
EQUITY AND LIABILITIES
Capital and reserves 168 636 180 315 183 960
Issued share capital and share
premium 71 892 71 892 71 892
Revaluation reserve 44 049 32 638 44 049
Distributable reserves 52 695 75 785 68 019
Non-current liabilities 553 978 333 683 436 799
Shareholders` loans 269 602 129 833 152 944
Amount owing to joint venture 26 494 - 25 886
Borrowings 248 843 188 061 249 292
Deferred tax 9 039 15 789 8 677
Current liabilities 106 366 172 114 110 670
Shareholders` loans - 42 211 -
Trade and other payables 67 086 88 479 64 061
Advance deposits 1 390 2 637 1 863
Deferred revenue 26 261 33 279 32 996
Other financial liabilities - 123
Taxation 11 629 5 508 11 627
Total equity and liabilities 828 980 686 112 731 429
Net asset value per share
(cents) ("NAV") 77,28 82,63 84,30
Net tangible asset value per
share (cents) ("NTAV") 76,23 81,58 83,25
Number of shares in issue and
used for NAV and NTAV
calculation 218 210 680 218 210 680 218 210 680
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Non-distributable
Share capital Share premium reserves
Audited R`000 R`000 R`000
Balance at 1 July 2007 2 182 69 710 32 830
Net profit for the period - - -
Transfer to
distributable reserve - - (270)
Income tax effect - - 78
Balance at
31 December 2007 2 182 69 710 32 638
Balance at 1 July 2008 2 182 69 710 44 049
Net loss for the period - - -
Balance at
31 December 2008 2 182 69 710 44 049
Distributable
reserves Total
Audited R`000 R`000
Balance at 1 July 2007 73 390 178 112
Net profit for the period 2 203 2 203
Transfer to distributable reserve 270 -
Income tax effect (78) -
Balance at 31 December 2007 75 785 180 315
Balance at 1 July 2008 68 019 183 960
Net loss for the period (15 324) (15 324)
Balance at 31 December 2008 (52 695) 168 636
SEGMENTAL ANALYSIS
IFA Hotels IFA Zimbali
Six months ended Six months ended
31 December 31 December
2008 2007 2008 2007
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue 8 190 53 695 19 318 18 917
EBITDA 1 108 19 260 (3 451) 964
EBIT 908 19 343 (6 180) (734)
(Loss)/profit after tax 3 773 14 966 (10 765) (2 977)
Segment assets 218 356 337 861 124 417 119 573
IFA Boschendal IFA Estates
Six months ended Six months ended
31 December 31 December
2008 2007 2008 2007
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue - - - 66
EBITDA (3 774) (7 549) (2 455) (4 096)
EBIT (3 774) (7 549) (2 477) (4 106)
(Loss)/profit after tax (1 977) (7 435) (3 078) (2 912)
Segment assets 86 354 53 444 5 826 3 147
IFA SA IFA Namibia
Six months ended Six months ended
31 December 31 December
2008 2007 2008 2007
Audited Audited Audited Audited
R`000 R`000 R`0010 R`000
Revenue 6 975 2 980 7 948 -
EBITDA (2 701) (6 033) (1 780) (309)
EBIT (2 940) (6 099) (1 860) (309)
(Loss)/profit after tax 1 829 (4 100) (2 360) (219)
Segment assets 562 142 316 968 71 817 1 097
IFA Legends ZIM Rentals
Six months ended Six months ended
31 December 31 December
2008 2007 2008 2007
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue - - 1 140 -
EBITDA (2 182) 4 880 749 -
EBIT (2 182) 4 880 741 -
(Loss)/profit after tax (3 280) 4 880 534 -
Segment assets 260 010 129 880 6 375 -
Eliminations Consolidated
Six months ended Six months ended
31 December 31 December
2008 2007 2008 2007
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue (3 158) (1 841) 40 413 73 817
EBITDA - - (14 486) 7 117
EBIT - - (17 764) 5 426
(Loss)/profit after tax - - (15 324) 2 203
Segment assets (506 317) (275 858) 828 980 686 112
BASIS OF PREPARATION
The condensed consolidated financial results for the six months ended 31
December 2008 ("the period") have been prepared in compliance with the group`s
accounting policies and are consistent with the audited financial statements
for the previous financial year ended 30 June 2008. The interim condensed
consolidated financial results have been prepared in accordance with IAS 34:
Interim Financial Reporting, and fully comply with International Financial
Reporting Standards ("IFRS"), the South African Companies Act, and the Listings
Requirements of the JSE Limited ("JSE").
The interim condensed consolidated financial results have been audited by BDO
Spencer Steward (KZN) Inc., Registered Auditors. Their unqualified opinion is
available for inspection at the company`s registered office.
The board acknowledges its responsibility for the preparation of the interim
condensed consolidated financial statements in accordance with IFRS, the South
African Companies Act and the Listings Requirements of the JSE.
NOTES TO THE FINANCIAL RESULTS
1. Basic and diluted earnings and basic and diluted headline earnings per
ordinary share
The earnings and weighted average number of ordinary shares used in the
calculation of basic and diluted earnings and headline earnings per ordinary
share are as follows:
Reconciliation of total earnings to headline earnings attributable to equity
holders of the parent.
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2008 2007 2008
Audited Audited Audited
R`000 R`000 R`000
(Loss)/earnings attributable to
ordinary shareholders (15 324) 2 203 (5 563)
Less: (profit)/loss on disposal
of property, plant and equipment (240) (4) (347)
Tax effect of adjustments 67 1 97
Headline (loss)/profit (15 497) 2 200 (5 813)
Number of shares
- in issue 218 210 680 218 210 680 218 210 680
- for EPS and HEPS calculation 218 210 680 218 210 680 218 210 680
2. Investments and loans
Unlisted associate companies 52 972 37 901 44 453
Loans to associate companies 291 800 145 148 189 290
Other unlisted investments 3 900 5 100 4 500
348 672 188 149 238 243
Directors` valuation of
unlisted investments
- Unlisted associate companies 344 772 183 049 233 743
- Other unlisted investments 3 900 5 100 4 500
3. Borrowing facilities
The group has the following
borrowing facilities:
Utilised 249 300 188 061 249 300
Available 249 300 200 000 249 300
Borrowing rate (%) 13,25 12,75 13,75
Borrowing powers
The borrowing powers in terms of
the articles of association of the
company and its subsidiaries are unlimited.
4. Capital expenditure commitments
Contracted 15 367 9 837 22 910
Approved but not contracted 52 500 48 880 48 043
67 867 58 717 70 953
5. Operating lease commitments 236 304 277
6. Post balance sheet events
No event which is material to the understanding of this report has occurred
between the financial period and the date of this report.
COMMENTS
IFA Hotels & Resorts (IFA HR) Kuwait holds the majority interest in IFA Hotels
& Resorts Limited (IFA SA) with an 85% shareholding. IFA SA owns:
IFA Zimbali Lodge (Pty) Limited ("IFA Zimbali")
IFA Zimbali is the owner of the Fairmont Zimbali Lodge, a world class five-star
boutique hotel with 76 luxurious rooms. Fairmont Hotels & Resorts is a leading
global luxury hotel management company with over a century of experience in the
hospitality industry. Fairmont`s portfolio exceeds 50 distinctive hotels,
including Fairmont Banff Springs, Fairmont San Francisco and New York`s The
Plaza.
IFA Hotels & Resorts (SA) (Pty) Limited ("IFA Hotels")
IFA Hotels and Tongaat Hulett Developments established a joint venture
("TIFAZ") which has developed the Zimbali Coastal Resort and which has also
recently launched the neighbouring Zimbali Lakes and Zimbali Office Estate
developments. IFA Hotels will be developing the new signature Gary Player golf
course, driving range and golf academy within Zimbali Lakes. The real estate
opportunities which will be created around this new golf course again provides
for secure investment potential and will be marketed as one of South Africa`s
finest integrated resort developments.
TIFAZ owns an additional 700 hectares of land on the Zimbali southern border
for longer-term development. The principal business is the subdivision and
servicing of land for sale.
IFA Boschendal Investments (Pty) Limited ("IFA Boschendal")
IFA Boschendal holds a 32,08% stake in the 2 400 hectare Boschendal Estate near
Franschhoek, which includes plans for upmarket residential, a retirement
village, a 120-room boutique hotel and a mixed-use development that includes a
shopping centre, offices and apartments.
IFA Hotels & Resorts 8 (Pty) Limited ("IFA Estates")
IFA SA`s estate agency has the sole mandate to sell the Fairmont Zimbali Hotel
& Resort development situated in Zimbali and the residential elements of the
pending developments in Namibia (see "IFA Namibia" below). IFA Estates is also
assisting with the sales and marketing of IFA Legends and other developments
planned for the Seychelles and Zanzibar.
IFA Hotels & Resorts (Namibia) (Pty) Limited ("IFA Namibia")
In March 2007 IFA Namibia formed a joint venture with the Ohlthaver & List
Group ("OLIFA") to redevelop three hotels - Kempinski Hotel The Strand in
Swakopmund, Kings Den Lodge on the banks of the Chobe River and Kempinski
Mokuti Lodge at the gateway to the Etosha game reserve. OLIFA will also develop
a fourth site in Windhoek into a five-star hotel. Five-star international
hotelier, Kempinski Hotels, has been introduced to Namibia to operate these
hotels. OLIFA is assessing the potential for residential and retail
opportunities surrounding these properties.
IFA Legends Investments (Pty) Limited ("IFA Legends")
IFA H&R Kuwait, IFA SA and Crimson King Properties (Pty) Limited have partnered
in the Legend Golf & Safari Resort, a 22 000 hectare safari conservancy in the
malaria-free Waterberg region of the Limpopo Province. The resort, comprising
approximately 900 residential opportunities, will offer an internationally
branded five-star hotel with a health spa and a wellness centre, as well as
conference and recreational facilities for up to 2 500 delegates.
It also boasts an 18-hole championship golf course designed by 18 top
professional golfers.
Zimbali Rentals (Pty) Limited ("Zim Rentals")
Zim Rentals offers a professional service to property owners of Zimbali wanting
to rent their self-catering residences to guests wishing to experience the
unique beauty and qualities of Zimbali.
FINANCIAL REVIEW
IFA ZIMBALI - although revenue rose 2% to R19,3 million from R18,9 million,
onceoff transitional costs incurred through the appointment of Fairmont Hotels
& Resorts to manage the Zimbali Lodge and increasing operating costs reduced
earnings before interest, taxation, depreciation and amortisation ("EBITDA")
from a profit of R1 million in the comparative period to a loss of R3,5 million
for the period.
The future benefits accruing through this appointment will outweigh these
transitional costs due to the synergies and economies of scale which will arise
to IFA Zimbali, e.g. reduction in labour and procurement costs, due to the
operation by Fairmont Hotels & Resorts of a second larger hotel property within
the Zimbali Coastal Resort, scheduled to open in the third quarter of 2009.
IFA HOTELS - the decline in EBITDA from the comparative period is largely
attributable to slowing down of sales due to limited land stock available for
sale in Zimbali Coastal Resort.
The new Zimbali Lakes was launched in November 2008 and reservations amounting
to R78,3 million have been made to date. In addition the Zimbali Office Estate
has been successfully launched and revenue from sales should be recognised by
June 2009.
IFA BOSCHENDAL - the development rights for the "Founders Estates" was received
in 2008 and sales are currently under negotiation.
IFA Boschendal`s 32,08% share of the losses in Boschendal Limited has resulted
in an increase of IFA SA`s after-tax loss by R2 million.
IFA ESTATES - IFA SA`s estate agency has a number of projects within the Africa
and Indian Ocean region which will help bring the company to profitability. The
Fairmont Zimbali Hotel & Resort project has concluded sales contracts in excess
of R50 million, due to transfer in the second half of 2009. However, costs were
incurred during the current period to achieve these sales which, in the absence
of revenue, resulted in a continued loss.
IFA NAMIBIA - IFA Namibia`s 50% share in OLIFA has incurred a loss of R2,3
million compared to a loss of R0,3 million in the comparative period.
This was attributable to a delay in operations which commenced in February 2008
and the temporary part closure for the upgrade of the existing Mokuti Lodge.
The development of a new Kempinski operated hotel in Swakopmund is currently in
the planning phase.
IFA LEGENDS - IFA Legends 20% share of losses in the Legend Golf & Safari
Resort contributed R3,3 million to IFA SA`s total after-tax loss for the
period, the main contributing factor being lower than expected sales in the
development during the period. Phase One of the development is complete and the
golf course will be opened for play in April 2009.
ZIM RENTALS - this business unit, which prior to 1 July 2008 was operated
through IFA ZIMBALI, has contributed a profit of R0,5 million to the group for
the period.
PROSPECTS
The directors remain confident that the group has established a solid
foundation for future growth.
The downturn in the economies of all the countries that IFA SA has invested in
has been recognised and is being closely monitored and managed.
Fortunately Southern Africa is performing relatively well as is evidenced by
the strong residential sales achieved at Kempinski Hotel The Strand in
Swakopmund (Namibia), Zimbali Lakes, Zimbali Office Estate and Fairmont Zimbali
Heritage Place (SA) despite the economic downturn. We remain confident that the
company is in a position to achieve its performance targets in the short to
medium term.
We are also well positioned strategically to capitalise on the benefits that
will flow into Southern Africa from the 2010 Soccer World Cup.
DIVIDEND
No dividend has been declared for the period.
APPRECIATION
The directors would like to thank the management and staff of the group for
their hard work and dedication during the period, as well as shareholders,
customers and suppliers for their continued support.
For and behalf of the board
TJM Al-Bahar WJ Burger
Chairman Chief Executive Officer
Zimbali, Durban, KwaZulu-Natal
26 March 2009
CORPORATE INFORMATION
Directors
TJM Al-Bahar (Chairman)*, GE Larson*, JAM Wilson*, PGR de Sylva,
K M El Marsafy*, VM Nkosi, WJ Burger (CEO) *Non-executive
Registered office
Zimbali Northgate Suites, Zimbali Coastal Resort, KwaZulu-Natal
Company secretary
K Pillay CA(SA)
Transfer secretaries
Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg
Sponsor
QuestCo Sponsors (Pty) Limited
Date: 26/03/2009 16:30:02 Produced by the JSE SENS Department.
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