| Mon 28 Sep 2009, 16:30 | | IFH - IFA Hotels & Resorts Limited - Condensed Consolidated Financial Results |
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IFH
IFH
IFH - IFA Hotels & Resorts Limited - Condensed Consolidated Financial Results
For The Year Ended 30 June 2009 And Extension Of Cautionary
IFA HOTELS & RESORTS LIMITED
("IFA SA" or "the company" or "the group")
Registration number 1919/001318/06
Share code: IFH
ISIN: ZAE000075669
CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2009 AND
EXTENSION OF CAUTIONARY
CONDENSED CONSOLIDATED
INCOME STATEMENT
Reviewed Audited
Year ended Year ended
30 June 2009 30 June 2008
R`000 R`000
Revenue 82 747 118 800
Operating loss (18 253) (11 119)
Investment revenue 43 493 35 028
Finance costs (60 790) (36 796)
(Loss)/income from equity accounted
investments (16 259) 4 071
Loss before taxation (51 809) (8 816)
Taxation 13 704 3 253
Loss for the period (38 105) (5 563)
Attributable to:
Equity holders of the parent (38 105) (5 563)
Basic and diluted loss per share ("EPS")
(cents) (17,46) (2,55)
Basic and diluted headline loss per share
("HEPS") (cents) (note 1) (17,55) (2,66)
CONDENSED CONSOLIDATED
BALANCE SHEET
Reviewed Audited
30 June 2009 30 June 2008
R`000 R`000
ASSETS
Non-current assets 604 376 443 043
Property, plant and equipment 180 492 166 144
Intangible assets 2 298 2 298
Investment in associates 37 590 44 452
Loans to associates 336 635 189 291
Loans to group companies - 21 261
Financial assets 3 900 4 500
Amount owing by joint venture 22 946 8 402
Deferred tax 20 515 6 695
Current assets 270 621 288 386
Inventories 2 155 1 812
Township properties 150 265 130 306
Trade and other receivables 45 904 49 520
Financial assets 8 642 4 572
Cash and cash equivalents 63 655 102 176
Total assets 874 997 731 429
EQUITY AND LIABILITIES
Capital and reserves 147 401 183 960
Issued share capital and share premium 71 892 71 892
Revaluation reserve 45 595 44 049
Distributable reserves 29 914 68 019
Non-current liabilities 640 710 436 799
Shareholder`s loans 350 155 152 944
Amount owing to joint venture 27 185 25 886
Borrowings 253 248 249 292
Finance lease obligation 112 -
Deferred tax 10 010 8 677
Current liabilities 86 886 110 670
Finance lease obligation 33 -
Trade and other payables 68 292 64 061
Advance deposits 1 275 1 863
Deferred revenue 16 346 32 996
Other financial liabilities - 123
Taxation 940 11 627
Total equity and liabilities 874 997 731 429
Net asset value per share (cents) ("NAV") 67,55 84,30
Net tangible asset value per share (cents)
("NTAV") 66,50 83,25
Number of shares in issue and used for
NAV and NTAV calculation 218 210 680 218 210 680
CONDENSED CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY
Non-
dis-
Share Share tributable
capital premium reserves
R`000 R`000 R`000
Audited
Balance at 1 July 2007 2 182 69 710 32 830
Net loss for the period - - -
Surplus on revaluation of land
and buildings - - 14 293
Deferred tax on revaluation reserve - - (2 882)
Transfer to distributable reserve - - (192)
Balance at 30 June 2008 2 182 69 710 44 049
Reviewed
Balance at 1 July 2008 2 182 69 710 44 049
Net loss for the period - - -
Surplus on revaluation of land
and buildings - - 2 147
Deferred tax on revaluation reserve - - (601)
Balance at 30 June 2009 2 182 69 710 45 595
Dis-
tributable
reserves Total
R`000 R`000
Audited
Balance at 1 July 2007 73 390 178 112
Net loss for the period (5 563) (5 563)
Surplus on revaluation of land and buildings - 14 293
Deferred tax on revaluation reserve - (2 882)
Transfer to distributable reserve 192 -
Balance at 30 June 2008 68 019 183 960
Reviewed
Balance at 1 July 2008 68 019 183 960
Net loss for the period (38 105) (38 105)
Surplus on revaluation of land and buildings - 2 147
Deferred tax on revaluation reserve - (601)
Balance at 30 June 2009 29 914 147 401
CONDENSED CONSOLIDATED
CASH FLOW STATEMENT
Reviewed Audited
Year ended Year ended
30 June 2009 30 June 2008
R`000 R`000
Cash flows from operating activities (63 276) 48 698
Cash generated by operating activities (41 463) 76 111
Interest received 42 970 25 648
Interest paid (54 713) (35 938)
Taxation paid (10 070) (17 123)
Cash flows from investing activities (171 655) (249 882)
Expenditure to maintain operating capacity
Property, plant and equipment acquired (19 134) (60 676)
Proceeds of disposals of property,
plant and equipment 451 354
Expenditure for expansion
Investment in associates (13 810) (15 000)
Loans to associate and joint ventures (156 953) (163 403)
Loans advanced to group companies (4 070) (12 957)
Loans paid by group companies 21 261 -
Other investments 600 1 800
Cash flows from financing activities 196 410 257 672
Loans raised 5 276 262 945
Shareholder`s loan raised 191 134 -
Shareholder`s loan repaid - (5 273)
(Decrease)/increase in cash and cash
equivalents (38 521) 56 488
Cash and cash equivalents at beginning
of the year 102 176 45 688
Cash and cash equivalents at end of the year 63 655 102 176
SEGMENTAL ANALYSIS
IFA Hotels IFA Zimbali
Year ended Year ended
30 June 30 June
2009 2008 2009 2008
Reviewed Audited Reviewed Audited
R`000 R`000 R`000 R`000
Revenue 22 908 69 877 34 801 38 370
EBITDA 4 955 24 864 (8 316) (15 764)
EBIT 4 526 24 727 (13 435) (19 136)
(Loss)/profit after tax 6 488 20 754 (17 206) (22 956)
Segment assets 214 417 253 417 127 983 126 363
IFA Boschendal IFA Estates
Year ended Year ended
30 June 30 June
2009 2008 2009 2008
Reviewed Audited Reviewed Audited
R`000 R`000 R`000 R`000
Revenue - - 5 098 67
EBITDA (16 355) (7 562) (600) (7 697)
EBIT (16 355) (7 562) (657) (7 724)
(Loss)/profit after tax (15 490) (5 355) (2 170) (6 485)
Segment assets 102 787 52 828 11 215 4 669
IFA SA IFA Namibia
Year ended Year ended
30 June 30 June
2009 2008 2009 2008
Reviewed Audited Reviewed Audited
R`000 R`000 R`0010 R`000
Revenue 13 544 8 602 11 190 6 655
EBITDA (241) (7 866) (6 136) 244
EBIT (742) (8 167) (6 750) 190
(Loss)/profit after tax 3 994 (1 218) (8 275) (1 087)
Segment assets 646 030 417 073 68 604 63 193
IFA Legends Zim Rentals
Year ended Year ended
30 June 30 June
2009 2008 2009 2008
Reviewed Audited Reviewed Audited
R`000 R`000 R`000 R`000
Revenue - - 1 798 -
EBITDA (6 205) 10 625 715 -
EBIT (6 205) 10 625 694 -
(Loss)/profit after tax (5 946) 10 784 500 -
Segment assets 271 968 181 398 3 172 -
Eliminations Consolidated
Year ended Year ended
30 June 30 June
2009 2008 2009 2008
Reviewed Audited Reviewed Audited
R`000 R`000 R`000 R`000
Revenue (6 592) (4 771) 82 747 118 800
EBITDA 4 412 (1) (27 771) (3 157)
EBIT 4 412 (1) (34 512) (7 048)
(Loss)/profit after tax - - (38 105) (5 563)
Segment assets (571 179) (367 512) 874 997 731 429
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The accounting policies applied in the preparation of these condensed
consolidated provisional results, which are based on reasonable judgements and
estimates, are in accordance with International Financial Reporting Standards
("IFRS") and are consistent with those applied in the annual financial
statements for the year ended 30 June 2008. These condensed financial
statements as set out in this report have been prepared in terms of IAS 34 -
Interim Financial Reporting, the Companies Act of South Africa, as amended, and
the Listings Requirements of JSE Limited.
These condensed consolidated provisional results for the year ended 30 June
2009 have been reviewed by the group`s auditors and have been prepared on the
fair value and going concern bases. The review report is available for
inspection at the company`s registered office.
The board acknowledges its responsibility for the preparation of the 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
Reviewed Audited
Year ended Year ended
30 June 2009 30 June 2008
R`000 R`000
1. Basic and diluted earnings and 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:
Headline and diluted headline loss per share
(HEPS) (cents) (17,55) (2,66)
Reconciliation of total earnings to headline
earnings attributable to equity holders of
the parent:
Earnings attributable to ordinary shareholders (38 105) (5 563)
Less: profit on disposal of property, plant
and equipment (258) (347)
Tax effect of adjustments 72 97
Headline loss (38 291) (5 813)
Number of shares
- in issue 218 210 680 218 210 680
- for EPS and HEPS calculation 218 210 680 218 210 680
2. Capital expenditure commitments
Contracted 22 233 22 910
Approved but not contracted 30 400 48 043
52 633 70 953
3. Operating lease commitments 328 277
4. Investments and loans
Investment in associate companies 37 590 44 452
Loans to associate companies 336 635 189 291
Other unlisted investments 3 900 4 500
378 125 238 243
Directors` valuation of unlisted investments
- unlisted associate companies 374 225 233 743
- other unlisted investments 3 900 4 500
378 125 238 243
Acquisiton:
IFA Boschendal Investments (Pty) Limited a wholly owned subsidiary of IFA
Hotels & Resorts Limited, acquired an additional 5,51% of the issued shares in
Boschendal Limited and in Purple Plum Properties 59 (Pty) Limited.
The total purchase consideration in respect of the acquisition was R23,8
million, which represented R13,8 million for the additional shares and R10
million in shareholder`s loan acquired. The effective date was 1 October 2008.
The acquired business contributed a net loss to the group of (R2,3 million) for
the period from 1 October 2008 to 30 June 2009. If the acquisition had occurred
on 1 July 2008, the net loss would have been (R2,7 million).
5. Post balance sheet events
On 9 June 2009, an Acquisition agreement was signed between Citation Holdings
SA and IFA Boschendal relating to the acquisition by IFA Boschendal of an
additional 5,25% of the issued shares ("the Shares and Ancillary rights") in
Boschendal and an effective 5,25% in Purple Plum Properties 59 (Pty) Limited
(all inclusive "the Acquisition"). Purple Plum is a dormant company in the
process of being deregistered.
The effective date of the Acquisition is the date of transfer of the Shares and
Ancillary rights to IFA SA which has not been finalised at the date of this
report.
Other than the above, the directors are not aware of any material matter or
circumstance arising since the end of the financial year, not otherwise dealt
with in this report or the financial statements, which significantly affect the
financial position of the company or the results of its operations to the date
of this report.
COMMENTS
IFA H&R Kuwait holds the majority interest in IFA SA with an 85% shareholding.
IFA SA owns:
IFA Hotels & Resorts (SA) (Pty) Limited ("IFA Hotels")
IFA Hotels and Tongaat Hulett Zimbali Developments (Pty) Limited have
established a joint venture ("TIFAZ") which developed the Zimbali Coastal
Resort and recently launched the neighbouring Zimbali Lakes Resort and Zimbali
Office Estate developments. IFA Zimbali Hotel & Resorts (Pty) Limited will be
developing the new signature Gary Player golf course, driving range and golf
academy within Zimbali Lakes. The real estate opportunities created around this
new golf course again provides for secure investment potential and is being
marketed as one of South Africa`s finest integrated resort developments.
IFA Zimbali Lodge (Pty) Limited ("IFA Zimbali")
IFA Zimbali is the owner of the Fairmont Zimbali Lodge, operated by Fairmont
Hotels & Resorts, a leading global luxury hotel management company with almost
a century of experience of "turning moments into memories" in the hospitality
industry.
IFA Boschendal Investments (Pty) Limited ("IFA Boschendal")
IFA Boschendal holds a 32,08% stake in the 2 240 hectare Boschendal Estate
("Boschendal") near Franschhoek, which includes plans for upmarket residential,
a retirement village, a 120-room boutique hotel and a mixed-use development
that includes retail outlets, offices and apartments. A further stake of 5,25%
was acquired subsequent to year end and completion of the transaction is
imminent (refer to note 5).
IFA Hotels and Resorts 8 (Pty) Limited ("IFA Estates")
IFA SA`s estate agency has the sole mandate to sell the Fairmont Zimbali Hotel
& Resort ("Fairmont Zimbali") development situated in Zimbali and the
residential elements of the pending developments in Namibia (see "IFA Namibia"
below). IFA Estates is also appointed as the sole sales and marketing agent of
Legends and Boschendal.
IFA Hotels and Resorts (Namibia) (Pty) Limited ("IFA Namibia")
IFA Namibia and the Ohlthaver & List Group have formed a joint venture
("OLIFA") to redevelop Kempinski Hotel The Strand in Swakopmund and Kempinski
Mokuti Lodge at the gateway to the Etosha game reserve. OLIFA will also develop
a site in Windhoek into a five-star hotel. Five-star international hotelier,
Kempinski Hotels, the oldest European hotelier, has been introduced to Namibia
to operate these hotels. OLIFA is assessing the potential for residential and
retail opportunities on 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 and Entabeni Game Reserve ("Legends"),
located within a 22 000 hectare wildlife 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, each hole having been designed by a top
international golfer.
Zimbali Rentals (Pty) Limited ("Zim Rentals")
Zim Rentals offers a professional service to property owners of Zimbali renting
their residences to guests wishing to experience the unique beauty and
qualities of Zimbali.
FINANCIAL REVIEW
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 R100 million have been made to date. In addition the Zimbali Office Estate
has been successfully launched where sales amounting to R25 million have been
made to date.
Re-sales of R150 million was achieved in the Zimbali Coastal Resort in the
current period despite the current economic downturn.
IFA Zimbali - Although revenue decreased 9% to R34,8 million from R38,4
million, earnings before interest and taxation ("EBIT") has decreased from a
loss of R19,1 million in the comparative period to a loss of R13,4 million for
the period. The decrease in revenue is partly attributable to the restructure
of the rental business to a separate legal entity (see "Zim Rentals" below).
Once-off charges were incurred in the prior period arising from the change of
operator from Sun International Management Limited to Fairmont Hotels & Resorts
and once-off transitional costs were also incurred in the current period
arising from this appointment.
IFA Estates - Sales and marketing appointments by IFA Fair-Zim Hotel & Resort
(Pty)Limited (sister company that owns the new Fairmont Zimbali, to be operated
by Fairmont Hotels & Resorts), Boschendal and Legends will help bring the
company to profitability. The sales to date at Fairmont Zimbali amounting to
R148 million will also impact positively on IFA Estates due to commissions
earned by the latter.
After tax loss of R2,1 million (R6,5 million in the prior period) has
contributed to the group loss for the period.
IFA Boschendal - The development rights for the "Founders Estates" were
received in 2008. IFA Estates are currently preparing a sales and marketing
strategy for Boschendal and are confident that sales activity will occur in
the next financial year.
IFA Boschendal`s 32,08% share of the losses in Boschendal has resulted in a
reduction of IFA SA`s after-tax loss by R15,4 million.
IFA Namibia - IFA Namibia`s 50% share in OLIFA has incurred a loss of R8,3
million compared to a loss of R1 million in the comparative period. This loss
is attributable to operations only commencing in February 2008 and the
temporary part closure of Mokuti lodge for upgrading and extension works, which
was completed in July 2009.
IFA Legends - IFA Legend`s 20% share of losses in Legends contributed R5,2
million to IFA SA`s total after-tax loss for the period. The main contributing
factor is the slowing of sales in the development during the period. Phase 1
of the development is complete and the golf course was 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 believe that the prospects for the group remain positive.
Legal sales achieved in Zimbali during the year under review will impact
positively on profitability and cash flows in the next financial year and
encouraging sales activity in Zimbali has continued subsequent to year end.
The group is consolidating its position in the current economic climate and
further earnings are expected as the economy recovers through the group`s
investments in Boschendal,Legends and OLIFA.
DIVIDEND
No dividend has been declared for the period.
DIRECTORATE
The board appointed Mr Michael Burns Neilson as its financial director,
effective 30 June 2009.
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 invaluable support.
EXTENSION OF CAUTIONARY
Shareholders are referred to the cautionary announcements dated 10 June 2009, 1
July 2009 and 12 August 2009 and are advised that pending the implementation of
the transactions set out therein, there may be a material effect on the price
of the company`s securities. Accordingly, shareholders are advised to continue
exercising caution when dealing in the company`s securities until a further
announcement in this regard is made.
For and behalf of the board
TJM Al-Bahar WJ Burger
Chairman Chief executive officer
28 September 2009
Zimbali, Durban, KwaZulu-Natal
CORPORATE INFORMATION
Directors
TJM Al-Bahar (Chairman)*, WJ Burger (Chief executive officer), GE Larson*,
JAM Wilson*, KM El Marsafy*, PGR de Sylva, VM Nkosi, MB Neilson. *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: 28/09/2009 16:30:01 Produced by the JSE SENS Department.
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