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PNG - Pinnacle Point Group Limited - Reviewed results for the year ended 28
February 2009
PINNACLE POINT GROUP LIMITED
(formerly ACC-ROSS HOLDINGS LIMITED)
(Registration Number: 2000/000059/06)
Share code: PNG ISIN code: ZAE000127122
("Pinnacle Point" or "the Company")
REVIEWED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2009
Condensed Consolidated Balance Sheet
at 28 February 2009
Reviewed Restated
2009 2008
R`000 R`000
ASSETS
Non-current assets 1 051 953 94 084
Property, plant and equipment 27 863 6 742
Investment property 6 075 -
Inventory/Freehold land and stands 854 403 49 351
Goodwill 17 504 17 504
Other intangible assets 1 621 -
Loans and receivables at amortised 59 520 7 535
cost
Deferred tax assets 84 967 12 952
Current assets 630 139 295 068
Inventory/Freehold land and stands 398 326 195 584
Loans and receivables at amortised 154 248 91 844
cost
Trade and other receivables 21 347 6 077
Current tax receivable 1 532 -
Cash and cash equivalents 54 686 1 563
Total Assets 1 682 092 389 152
EQUITY AND LIABILITIES
Equity and reserves
Issued capital1 813 866 1
Foreign currency translation reserve (11 615) -
Accumulated loss (50 738) (48 004)
Equity attributable to equity 751 513 (48 003)
holders of the parent
Minority interest 16 100 27
Total equity 767 613 (47 976)
Non-current liabilities 418 854 43 656
Borrowings 177 786 37 648
Finance lease obligation 3 670 2 470
Other non-current liabilities 2 500 -
Deferred tax liabilities 234 898 3 538
Current liabilities 495 625 393 472
Trade and other payables 175 663 56 694
Borrowings 250 436 303 398
Finance lease obligation 3 908 797
Current tax payable 8 730 67
Provisions 14 073 -
Deferred revenue 2 078 -
Bank overdraft 40 737 32 516
Total Equity and Liabilities 1 682 092 389 152
Calculated shares in issue at year 4 599 738 1 946 980
end (`000) 2
Net asset (liability) value per 16.69 (2.46)
share issued (cents)
Actual shares in issue at year end 4 579 783 1 420 175
(`000)
Condensed Consolidated Income Statement
for the year ended 28 February 2009
Reviewed Restated
2009 2008
R`000 R`000
Revenue 102 713 50 936
Cost of sales (66 254) (41 867)
Gross profit 36 459 9 069
Other gains and losses 36 165 31 030
Investment revenue 37 079 23 972
Marketing and sales expenses (15 948) (9 197)
Impairment charges - (32 023)
Other expenses (60 643) (53 992)
Finance costs (35 344) (14 858)
Loss before tax (2 232) (45 999)
Income tax (expense) income (844) 6 786
Loss for the year (3 076) (39 213)
Attributable to:
Ordinary shareholders of the parent (2 734) (39 213)
Minority interest (342) -
Loss per share:
Basic loss per share (cents) (0.09) (2.01)
Diluted loss per share (cents) (0.09) (2.01)
Headline loss reconciliation:
Loss attributable to ordinary (2 734) (39 213)
shareholders of the parent
Adjusted for the after-tax effect
of:
Impairment charges - 32 023
Profit on disposal of investment (3 081) -
property
Profit on disposal of property, (95) -
plant and equipment
Headline loss for the year (5 910) (7 190)
Headline loss per share (cents) (0.20) (0.37)
Diluted headline loss per share (0.20)
(cents) (0.37)
2 987 903
Weighted average shares in issue 1 946 980
(`000) 3
There are no securities with potential dilutive effects as
at 28 February 2009 (2008: Nil) and accordingly, diluted
loss per share equals basic loss per share, and headline
loss per share equals diluted headline loss per share.
Condensed Consolidated Cash Flow Statement
for the year ended 28 February 2009
Reviewed Restated
2009 2008
R`000 R`000
Net cash outflow from operating (65 612) (143 503)
activities
Net cash inflow (outflow) from 34 732 (100 713)
investing activities
Net cash inflow from financing 75 782 224 112
activities
Net increase (decrease) in cash and 44 902 (20 104)
cash equivalents
Cash and cash equivalents at (30 953) (10 849)
beginning of the year
Cash and cash equivalents at end of 13 949 (30 953)
the year
Consolidated Statement of Changes in Equity
for the year ended 28 February 2009
Issu Accumu Foreig Attribu Mino Total
ed lated n table rity
Capi loss curren to inte R`000
tal1 R`000 cy equity rest
R`00 transl holders s
0 ation of R`00
reserv parent 0
e R`000
R`000
Balance at 1 March 1 (8 - (8 790) 27 (8
2007 791) 763)
Loss for the year - (39 - (39 - (39
as restated 213) 213) 213)
Loss for the year - (50 - (50 - (50
as previously 182) 182) 182)
reported
Prior year - 10 969 - 10 969 - 10
adjustments 969
Restated balance
at 29 February 1 (48 - (48 27 (47
2008 004) 003) 976)
Balance at 29 1 (58 - (58 27 (58
February 2008 as 973) 972) 945)
previously
reported
Prior year - 10 969 - 10 969 - 10
adjustments 969
Issue of ordinary 450 - - 450 000 - 450
shares for cash 000 000
Issue of ordinary 364 - - 364 034 - 364
shares to acquire 034 034
assets
Loss for the year - (2 - (2 734) (342 (3
734) ) 076)
Share issue costs (169 - - (169) - (169)
)
Acquisition of - - - - 854 854
subsidiaries
Fair value - - - - 1 1 991
adjustments on 991
acquisition
Platinum Club - - - - 13 13
570 570
Foreign exchange - - (11 (11 - (11
movement 615) 615) 615)
Balance at 28 813 (50 (11 751 513 16 767
February 2009 866 738) 615) 100 613
1 Includes share capital, share premium, share based payment reserve and equity
reserve arising from the reverse acquisition consolidation.
2 Excluding treasury shares and including shares contracted for but not yet
issued. In line with the requirements of IFRS3 Business Combinations for the
calculation of the weighted average shares in issue, calculated shares in issue
at the prior year end has been calculated as the number of shares issued to the
owners of Pinnacle Point Investments (Pty) Ltd ("PPI Group"), the accounting
acquirer, during the reverse acquisition transaction, adjusted for changes in
the share capital of PPI Group from the prior year balance sheet date until the
date of the acquisition transaction.
3 In accordance with IFRS 3 Business Combinations, the weighted average shares
in issue for the prior year have been calculated as the number of shares issued
during the reverse acquisition ("the transaction") to the former shareholders of
PPI Group, adjusted for changes in the issued share capital of PPI Group prior
to the transaction date. Weighted average shares in issue for the current year
have been based on this number until the transaction date, and thereafter
incorporates all shares in issue by the Company.
BASIS OF PREPARATION
These results are presented in accordance with IAS 34 Interim Financial
Reporting. The accounting policies adopted comply with International Financial
Reporting Standards ("IFRS"), and have been consistently applied in all material
respects. The adoption of new and revised standards and interpretations had no
material impact on the accounting policies of the Group. The results have been
prepared in terms of accounting policies consistent with the prior year and have
been reviewed by the company`s auditors, Deloitte & Touche, whose qualified
reviewed report is available for inspection at the registered office of the
company. The report was qualified following the going concern matters which are
discussed in more detail in the commentary below.
On 24 October 2008 the shareholders of Acc-Ross Holding Limited ("Acc-Ross") in
General Meeting approved the acquisition of all the issued share capital of
various companies of the former Pinnacle Point group of companies. This
transaction constituted a reverse acquisition in terms of the IFRS 3 Business
Combinations statement as the former Pinnacle Point group shareholders assumed
effective control of the combined Group. The company changed its name to
Pinnacle Point Group Limited ("Pinnacle Point") on 31 October 2008 and commenced
trading on the JSE Limited under its new name on 17 November 2008.
Applying the principles of IFRS 3 Business Combinations, Pinnacle Point
Investments (Proprietary) Limited ("PPI Group"), the dominant entity in the
former Pinnacle Point group of companies, has been determined to be the
accounting acquirer (accounting holding company). The former Acc-Ross Group and
remaining companies of the former Pinnacle Point group of companies are treated
as the accounting acquirees (accounting subsidiaries). The comparative numbers
presented accordingly reflect the historical position of the PPI Group. The
current year results comprise those of PPI Group from 1 March 2008 and the
results of the former Acc-Ross Group and the remaining Pinnacle Point companies
with effect from 31 October 2008, being the acquisition date.
More details in respect of the business combination are set out below in the
Acquisitions and Disposals section.
COMMENTARY
INTRODUCTION
Due to the global financial crisis the funding for the subscription of 250
million shares by Lurco Trading 278 (Proprietary) Limited for a consideration of
R200 million did not materialise as envisaged in the circular to Acc-Ross
shareholders.
The consequence of this, together with the effect of the challenging economic
conditions created by the global financial crisis on the Group`s projects, has
necessitated the restructuring of the Group`s debt facilities to allow the Group
to continue its operations without undue liquidity constraints.
Discussions are underway with the Group`s stakeholders and lenders to
restructure debt facilities and recapitalise the Group. This process includes
the negotiation of certain debt structures from the Group`s funders. These
negotiations are in process and clarity is being obtained on certain issues.
As part of the process, the board has appointed advisors to the Group to advise
on the various strategic options available, which will allow for a normalisation
of the Group`s liquidity and credit funding position.
BUSINESS OVERVIEW
Pinnacle Point achieved a number of milestones in the past year, which have been
set out below. The merger between Acc-Ross and the former Pinnacle Point group
of companies resulted in the creation of the larger Pinnacle Point Group
Limited. The rationale for the above merger was outlined in the circular to
shareholders in October 2008.
The Group has secured a strong BEE shareholder led by Mr Lazarus Zim as well as
two strategic offshore investors. The Lagos based Goldbanc Management Limited
("GMA"), specialising in asset securitisation and management, and the Ras Al
Khaimah Emirate`s land master-planner and developer, Rakeen Development PJSc
("Rakeen") invested R250 million and R200 million respectively in the Group.
They will both play an important role in the Group`s expansion plans mainly into
Nigeria and the Seychelles.
The secondary listing on the Nigerian Stock Exchange took place on 17 March
2009. This listing will enable the Group to access new capital markets to raise
funding for its Lagos Keys development. It will also give the Nigerian residents
the opportunity to invest in the Lagos Keys development. The market for the
company`s shares has also as a result been broadened considerably.
It is common knowledge that during the past year the property market in South
Africa has slowed considerably. The negative effect of the global credit crisis
has also placed a damper on sales and the tighter lending criteria imposed by
all the major banks have made the funding of new and existing projects less
accessible. In addition, this has also affected property buyers who are having
difficulty in obtaining finance. In response to this management have placed the
launching of new projects in South Africa on hold until such time as the market
improves. The controlling of costs has also become a priority.
In Nigeria, where demand at the high end of the market still remains buoyant the
Group is proceeding with the Lagos Keys development and it is expected to have
all approvals in place prior to the end of this calendar year. With regards to
the Ile Aurore Seychelles development, it is anticipated that the final
approvals will be granted early in the new calendar year, whereafter the Group
will be able to commence with the next phase of the development cycle of this
development.
FINANCIAL RESULTS
The results for the newly merged entity were satisfactory in light of the
current global economic crisis and depressed property market. It should be noted
that due to the fair values attached to assets as required by IFRS 3 Business
Combinations that the sale of the Goldfields Plaza Shopping Centre in Welkom
resulted in a profit to the Group of only R3 million versus a profit of R16
million for the underlying company. The valuation of this investment at 31
October 2008 was higher than initially estimated which resulted in a difference
between the forecasted and actual profit.
Income statement
The net loss for the Group for the year ending February 2009 amounted to R3
million (2008: a loss of R39.2 million) after taxation of R0.8 million (2008:
R6.8 million credit). The loss per share is 0.09 cents (2008: 2.01 cents loss
per share), with a headline loss of 0.20 cents per share after removing the
effects of the sale of the Goldfield Plaza shopping centre, compared to a
headline loss of 0.37 cents per share in the prior year.
In accordance with the Group`s accounting policies, revenue from the sale of
property is only recognised once the property has been transferred to third
parties. Revenue for the year increased from R51 million to R103 million, an
increase of 100%.
Revenue for the year mainly comprises of the proceeds from the transfer of
stands from Phase 1 of the Wedgewood Village Golf and Country Estate
("Wedgewood") and revenue from Phases 2 and 3 of Gardener Ross Golf and Country
Estate ("Gardener Ross") for the four months ended on 28 February 2009.
The remainder of the revenue was made up of sales from the completed Pinnacle
Point Beach and Golf Estate ("PPR") near Mossel Bay and The Clarens Golf and
Trout Estate ("Clarens") in the eastern Free State Province.
Sales at the Romansbaai Beach and Fynbos Estate ("Romansbaai") were relatively
buoyant due to its uniqueness, which is pleasing given the current market
conditions. Sales of R107 million were concluded during the period under review.
This amount is not included in revenue in the current year as the properties are
not yet transferable.
The Gross profit percentage at 35% was up on the 18% achieved in the prior
period. The prior year sales mainly consisted of sales from the Clarens
development where lower margins are being achieved due to the longer than
expected sell out cycle and consequent higher holding costs.
Investment revenue increased by R13 million to R37 million. The selling and
marketing expenses were in line with the increased revenue while other costs
increased by 12% to R60.6 million.
Finance costs, from other borrowings and development debt not capitalised,
increased by R20.5 million to R35.3 million. This increase, together with the
increase in interest bearing borrowing during the year, is distorted by the
inclusion of the finance costs of the accounting subsidiaries acquired during
the current year. The finance costs attributable to these entities resulted in
a decrease of 0.27 cents in earnings per share and headline earnings per share
for the current year.
The higher effective rate of taxation is mainly the result of a lower accounting
profit recognised on the sale of the Goldfields Plaza shopping centre, the
reversal of loan impairments and the effect of unrecognised estimated tax losses
in the individual group companies.
Had the reverse acquisition business combination referred to elsewhere occurred
at the beginning of the financial year, revenue for the Group for the year would
have amounted to R143.5 million and loss after tax would have amounted to R72.5
million, which includes R58.5 million non-recurring impairments, write-offs and
losses.
Balance sheet
The underlying assets and liabilities of the accounting subsidiaries acquired
have been incorporated on the acquisition date at fair value. The full excess
purchase consideration paid over and above the net book values of the companies
so acquired have been attributed to inventory and accordingly, no goodwill arose
on the transaction.
Inventories increased by R1 billion during the year following the business
combination. Inventory has also been fair valued which has resulted in a net
write up of inventory amounting to R436 million. R547 million of this net write
up is attributable to the Lagos Keys project. Construction activity in Lagos and
Seychelles is only expected to start in earnest in the next financial year.
Construction activity for the year was centred on the completion of phase 2 of
Wedgewood, which has been earmarked for a retirement development and the
commencement of the Romansbaai project. Due to the current market conditions and
tightening of banks` lending criteria, most of this infrastructure expenditure
amounting to R107 million was funded from the Group`s internal cash resources.
Where possible, construction activity has been slowed having regard to the
current market conditions.
Total interest bearing borrowings amounted to R436 million at year-end and is
1.8 times covered by equity. All of the borrowings are self-liquidating through
sales of existing stock on hand. The exclusion of the accounting subsidiaries
acquired during the year in the comparative results, again distorts the
reduction in interest bearing borrowings during the year.
Prior year restatement
A loan payable by PPI Group to Annford Investments (Proprietary) Limited was
previously stated at cost. A prior year adjustment arose in order to restate
the loan at amortised cost according to IAS 39 Financial Instruments:
Recognition and Measurement. The effective interest rate method was used.
Loan payable prior to adjustment R46.2 million
Discounted amount (R15.4 million)
Imputed interest R 4.5 million
Loan payable after adjustment R35.3 million
The net impact of the above adjustment was an increase in interest income which
resulted in a decrease in the prior year loss of R11 million (tax effect is
Rnil) and a decrease in the loss per share and headline loss per share of 0.56
cents. No adjustment was required for the opening retained income for the
comparative period.
SEGMENTAL REPORTING
The Group early adopted IFRS 8 Operating Segments during the prior year. This
Standard requires an entity to report financial and descriptive information
about its reportable segments, which are operating segments or the aggregation
of operating segments that meet specified criteria. Operating segments are
components of an entity in respect of which separate financial information is
available is evaluated regularly by management. For management purposes, the
Group is organised into the following segments:
* Sale of freehold land and stands (project development);
* Real estate agency services; and
* Golf course operations.
The operating segments which conduct Real estate agency services and Golf course
operations are immaterial to the Group and accordingly, the Group`s consolidated
results materially reflect only the results relating to Sale of freehold land
and stands. Sale of freehold land and stands are further divided into
geographical regions, namely South Africa, Nigeria and Seychelles. The
developments in the countries other than South Africa are still in their initial
phases, and accordingly, no revenue has been generated from those segments as
yet.
Freehold land and stands Group
2009 S- Nigeri Seychel Total Other4 consolid
Africa a les ated
R`000 R`000 R`000 R`000 R`000 R`000
Segment 102 873 - - 102 873 (160) 102 713
revenue
Segment (11 (3 5 195 (10 7 942 (2 232)
profit 484) 885) 174)
(loss)
before
taxation
Segment 672 791 569 10 248 1 252 - 1 252
inventory 690 729 729
Segment 407 957 - - 407 957 20 265 428 222
borrowings
Freehold land and stands Group
2008 S- Nigeria Seychel Total Other4 Consolid
Africa les ated
R`000 R`000 R`000 R`000 R`000 R`000
Segment 50 936 - - 50 936 - 50 936
revenue
Segment
loss before (13 - (4 417) (18 (27 (45 999)
taxation 763) 180) 819)
Segment 235 723 - 9 212 244 935 - 244 935
inventory
Segment 176 511 - - 176 511 164 765 341 276
borrowings
4 Other comprise non-reportable segments and consolidation adjustments
Whilst the South African segment comprise a number of projects, the various
projects are exposed to similar risks and have similar characteristics and
accordingly, are aggregated into one segment for financial statement and
management reporting purposes.
ACQUISITIONS AND DISPOSALS
Other than the reverse acquisition transaction as described above, the Group did
not acquire or dispose of any subsidiaries during the year. More details of the
reverse acquisition transaction are set out below.
Details of the companies acquired
Details of accounting subsidiaries acquired as part of the reverse acquisition
transaction and the profit (loss) of the companies since acquisition included in
the Group results are as follows:
Name of subsidiary % Nature of Net
Ownership business profit
(loss)
after
tax
R`000
Acc-Ross Networks (Pty) 100% Advertising (4)
Ltd
Gardener Ross Holdings 100% Investment (56)
Ltd holding
Accretio Holdings (Pty) 100% Investment (6)
Ltd holding
Accretio Investments 100% Investment (3)
(Pty) Ltd holding
Accretio Property 100% Investment (3 835)
Development (Pty) Ltd holding
Eagle Creek Investments 100% Property (346)
74 (Pty) Ltd development
GR Equity (Pty) Ltd 84.5% Property (50)
development
Tauve Developments (Pty) 100% Investment (68)
Ltd holding
Comuine Golf Estate 50% Property -
Limitada* development
Northern Jungle Trading 100% Property (3)
17 (Pty) Ltd development
Zamien Investments 67 100% Investment (3)
(Pty) Ltd holding
Redlex 89 (Pty) Ltd 100% Property (26)
development
Gardener Ross Holdings 100% Investment (17)
Nominees (Pty) Ltd holding
Chestnut Hill 100% Property (55)
Investments 111 (Pty) development
Ltd
Eagle Creek Investments 100% Investment (5)
257 (Pty) Ltd holding
Gardener Ross Golf & 90% Property (3 955)
Country Estate (Pty) Ltd development
Zamien Investments 66 100% Property 2 244
(Pty) Ltd development
Zeranza 50 (Pty) Ltd 100% Property (121)
development /
Rental of
property
Pinnacle Point Platinum 100% Investment 1
(Pty) Ltd holding
Pinnacle Point Resorts 100% Property (11 124)
(Pty) Ltd development
Annford Investments 100% Property 2 371
(Pty) Ltd investment
Goldfields Plaza (Pty) 100% Property 678
Ltd development
Festival Bay Trading 55 100% Property (582)
(Pty) Ltd development
Flashing Star Trading 98 100% Marketing and (4)
(Pty) Ltd advertising
Wheatfields Investments 100% Marketing and (328)
No 170 (Pty) Ltd advertising
Manupont 105 (Pty) Ltd 100% Shelf company 57
Grindstone Investments 100% Property (36)
127 (Pty) Ltd investment
Mascodor 182 (Pty) Ltd 100% Property (5)
development
Pinnacle Point Financial 100% Property (1)
Services (Pty) Ltd development
* incorporated in Mozambique
Fair value ascribed to assets and liabilities acquired
Carrying Fair
value at value
31 Oct at 31 Oct
2008 2008
R`000 R`000
Non-Current assets
Property, plant and equipment 142 347 24 032
Investment property 31 075 31 075
Inventory/Freehold land and 165 857 746 748
stands
Goodwill 37 605 -
Loans and receivables 75 717 75 717
Deferred tax assets5 27 043 69 837
479 644 947 409
Current assets
Inventory/Freehold land and 311 533 166 390
stands
Loans and receivables 85 119 85 119
Current tax receivable 2 680 2 680
Trade receivables 28 091 28 091
Cash and cash equivalents 6 834 6 834
434 257 289 114
Non-current liabilities
Borrowings and finance leases 249 428 249 428
Deferred tax liabilities5 39 518 231 665
288 946 481 093
Current liabilities
Borrowings and finance leases 304 827 272 804
Trade and other payables 67 452 67 452
Current tax payable 5 119 5 119
Bank overdraft 22 437 22 437
Provisions 20 740 20 740
420 575 388 552
Net assets acquired 204 380 366 878
Minority interest 854 2 844
Equity attributable to 203 526 364 034
shareholders
5 Deferred tax assets and liabilities includes deferred tax and liabilities
arising from the fair value adjustments made to other assets at acquisition
No additional intangible assets or contingent liabilities were recognised upon
consolidation. The fair value of the Group`s projects, which are all classified
as inventory, includes any value potentially attributable to the brand of the
Group.
Determination of purchase price
As is common in a reverse acquisition transaction, PPI group (the accounting
acquirer) paid no consideration for acquisition of the former Acc-Ross group and
other companies of the former Pinnacle Point group of companies (the accounting
subsidiaries or acquires). Instead, Acc-Ross issued 2 557 748 082 shares at 65
cents each to the former owners of the PPI group. Accordingly, for accounting
purposes, the acquisition-date fair value of the consideration transferred by
the PPI group for its interest in the accounting subsidiaries is based on the
number of equity interests the PPI group would have had to issue to give the
owners of Acc-Ross the same percentage equity interest in the combined entity
that resulted from the reverse acquisition.
The equity value of the PPI group was determined as the present value of the
expected future cash flows of the various projects and companies in the PPI
group. The effective purchase consideration was calculated as 38.2% of the
equity value of the PPI group so calculated, as this represents the percentage
of its equity it would have had to issue to give the owners of the accounting
subsidiaries the same effective percentage equity interest in the combined
entity that resulted from the reverse acquisition. The purchase consideration so
determined amounts to R364 million.
ISSUE OF SHARES
On 17 November 2008 the following shares were issued in terms of the reverse
acquisition transaction approved by shareholders in general meeting on 24
October 2008:
* 2 714 877 381 fully paid up shares to the various sellers in
the transaction, at 65 cents per Acc-Ross share, which includes
384 615 385 shares issued to GMA;
* 400 000 000 shares to Rakeen at 50 cents per Acc-Ross share
for cash amounting to R200 000 000;
* 10 000 000 shares to Sales Affiliates 85 (Pty) Ltd at 100 cents
per Acc-Ross share as compensation for fees due to such parties for
introducing the GMA Consortium to the Pinnacle Point Group;
* 5 500 000 Acc-Ross shares to Mayibuye Capital (Pty) Ltd at 90 cents
per Acc-Ross share as compensation for fees for introducing the BEE
Consortium to Acc-Ross in terms of its mandate to assist Acc-Ross in
finding a suitable BEE partner;
* 769 231 shares to QuestCo Sponsors and 8 461 538 shares to D van
Huyssteen at 65 cents per Acc-Ross share as payment for professional
fees for acting as Transaction Advisor; and
* 20 000 000 shares to Rowmoor Investments 756 (Pty) Ltd at 100 cents
per Acc-Ross share as compensation for introducing the sellers to
Acc-Ross.
DIRECTORS AND EXECUTIVE MANAGEMENT
The Board recently announced the appointment of Hennie Pretorius to the Board of
Pinnacle as Chief Executive Officer in succession to Wilfred Robinson. Hennie
has a proven track record in the legal, financing, and property fields both in
South Africa and Europe. The Board is delighted to have secured the services of
someone of Hennie`s calibre and is confident that he will be instrumental in
Pinnacle Point achieving its full potential. In addition to this appointment,
the executive team has been strengthened with the appointment of Stefan Braun as
Chief Operating Officer. Stefan brings a wealth of experience in property
development, which will be particularly useful as the Group moves into the next
growth phase. The Group believes that he will be a valuable addition to the
executive team.
During the year under review and to the date of this report, the directors of
the Group are as follows:
Director Date appointed Date resigned
PL Zim (Chairman)* 31 October 2008
IC Stratford (Deputy 31 October 2008
Chairman)*
YT Moerane*# 16 May 2008
KS Mthembu*# 07 October 2005
S Kruger (Group Financial 31 October 2008
Director)
R Moonsamy* 31 October 2008
AO Austen-Peters 31 October 2008
(Nigerian)*
AV Fasedemi* 31 October 2008
B Igbinedion (Nigerian)* 20 February 2009
K Massaad (Swiss)* 20 March 2009
H Pretorius (Chief 5 May 2009
Executive Officer)
AB Mashiatshidi* 07 October 2005 10 March 2008
A Wiese 28 February 2006 31 October
2008
MJ Krastanov* 14 April 2008 31 October
2008
MH Veyrassat (Swiss)* 14 November 2008 24 February
2009
W Robinson 21 June 2006 5 May 2009
* non-executive # independent
FUTURE PROSPECTS
The challenging economic conditions are set to continue as the uncertainty
created by the global financial crisis impacts on global growth and the lending
policies of banks. We expect these factors to adversely affect performance,
particularly in the first half of the 2010 financial year.
The Group intends to focus on its two international developments in Lagos and
the Seychelles. Both developments offer unique opportunities and we believe that
they will be successful, even in the current market situation, as they are aimed
at high net worth individuals. It is expected that the Lagos Keys development
will commence shortly and that it will be the largest contributor to the Group`s
performance for the year ahead.
In the South African market the Group intends to focus on completing certain of
its existing projects and ensuring that these will be well positioned to take
advantage of any improvement in market conditions and certain projects will be
land banked.
The ability of the Group to continue as a going concern is dependent on the
successful conclusion of the negotiations with the Group`s funders as mentioned
above. The board advises that on this basis the preparation of the financial
statements on a going concern basis is appropriate.
CONTINGENT LIABILITIES AND POST BALANCE SHEET EVENTS
At the balance sheet date the Group does not have any contingent liabilities
(2008: RNil).
On 3 April 2009, the Company signed an agreement to buy out the 26% minority
equity holders in Wedgewood Village Golf and Country Estate for an amount of R4
million being settled by way of an issue of 8 800 000 shares in the Company. No
other significant post balance sheet events took place, apart from those
disclosed elsewhere in this announcement.
CAUTIONARY ANNOUNCEMENT
As mentioned above, the Group is in discussions with its stakeholders and
lenders, to restructure the existing debt and to recapitalise the Group, which
if successfully concluded, may have a material effect on the price of Pinnacle
Point`s securities.
Accordingly shareholders are advised to exercise caution when dealing in
Pinnacle Point securities until a further announcement is made.
DIVIDENDS
The directors have decided not to declare a dividend for the year under review
(2008: R Nil).
ANNUAL GENERAL MEETING
Shareholders will be advised of the date of the annual general meeting in due
course.
By order of the Board
P.L. Zim H. Pretorius
Chairman Chief Executive Officer
29 June 2009
Johannesburg
Registered Office
Arcay House Number 3 Anerley Road Parktown Johannesburg 2193
PO Box 62397 Marshalltown Johannesburg 2107
Directors
PL Zim (Chairman)*, IC Stratford (Deputy Chairman)*, H
Pretorius (CEO), Dr AO Austen-Peters (Nigerian)*, AV Fasedemi*,
BA Igbinedion (Nigerian)*, S Kruger (Group Financial Director),
Dr K Massaad (Swiss)*, YT Moerane*, R Moonsamy*, KS Mthembu*.
* Non-executive
Designated Advisor Transfer Office
Arcay Moela Sponsors Computershare Investor Services
(Proprietary) Limited
Date: 30/06/2009 15:37:03 Produced by the JSE SENS Department.
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