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QHL
QHL
QHL - Queensgate Hotels And Leisure - Abridged Audited Results For The Financial
Year Ended 31 August 2009
QUEENSGATE HOTELS AND LEISURE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/013649/06)
Share code: QHL ISIN code: ZAE000113718
("Queensgate Hotels" or "the company")
ABRIDGED AUDITED RESULTS FOR THE FINANCIAL YEAR ENDED 31 AUGUST 2009
BALANCE SHEETS
Audited Audited
31 Aug 2009 31 Aug 2008
R`000 R`000
ASSETS
Non-current assets 429,302 11 771
Property, plant and equipment 4,888 7
Goodwill 323,333 -
Intangible assets 156 7,600
Loan receivable 42,712 -
Interest in associates 9,336 -
Interest in joint ventures 9,899 -
Deferred taxation 13,284 4,164
Prepaid operating lease 25,694 -
Current assets 28,656 4,698
Inventories 770 -
Trade and other receivables 11,915 4,697
Prepaid operating lease 5,625 -
Loan receivable 6,053 -
Amounts due by associated 3,067 -
companies
Cash and cash equivalents 1,226 1
Total assets 457,958 16,469
EQUITY AND LIABILITIES
Capital and reserves 306,525 15,223
Issued capital 329,841 35,296
Accumulated losses (23,316) (20,073)
Non-current liabilities 62,680 -
Long-term liabilities 62,607 -
Deferred taxation 73 -
Current liabilities 88,753 1,246
Trade and other payables 28,474 563
Amounts due to associated 98 -
companies
Loans payable 30,062 683
Taxation 22,192 -
Provisions 2,955 -
Short-term borrowings 4,972 -
Total equity and liabilities 457,958 16,469
Net asset value per share 19.08 3.04
(cents)
Net tangible asset value per (1.06) 1.52
share (cents)
Number of shares in issue 1,606,819,736 500,000,000
INCOME STATEMENTS
Audited Audited
31 Aug 2009 31 Aug 2008
R`000 R`000
Revenue 121,011 4,032
Cost of sales (22,635) -
Gross profit 98,376 4,032
Other operating income 1,199 10
Operating expenses (83,549) (2,236)
Profit from continued 16,026 1,806
operations
Impairments (2,984) (7,550)
Investment income 3,100 1
Loss on disposal of non- (7,595) -
current assets
Loss from equity accounted (2,077)
investments
Finance costs (10,059) -
Loss before taxation (3,589) (5,743)
Taxation 346 1,220
Net loss for the year (3,243) (4,523)
attributable to equity holders
Weighted average number of 1,544,148,50 500,000,000
shares in issue 3
Loss per share (cents) (0.21) (0.90)
Headline earnings per share 0.48 0.61
(cents)
Diluted loss per share (cents) (0.21) (0.90)
Diluted headline earnings per 0.41 0.61
share (cents)
Reconciliation of headline
earnings:
Basic earnings (3,243) (4.523)
- loss on disposal of non- 7,601
current assets
- profit of disposal of non- (6)
current assets
- impairment loss 2,984 7.550
Headline earnings 7,336 3.027
ABRIDGED CASH FLOW STATEMENTS
Audited Audited
31 Aug 2009 31 Aug 2008
R`000 R`000
Cash (applied to)/generated 11,709 (1,820)
from operating activities
Cash receipts from customers 119,192 43
Cash paid to suppliers and (100,742) (1,864)
employees
Cash (applied to)/ generated 18,450 (1,821)
from operations
Interest paid (8,222) -
Interest received 3,101 1
Taxation paid (1,620) -
-
Cash flows from investing (15,950) (7)
activities
Acquisition of property, (4,134) (7)
plant and equipment
Proceeds on disposal of non- 112 -
current assets
Acquisition of intangible (6) -
assets
Cash acquired on acquisition 2,040 -
of subsidiaries
Net movement in loans and (13, 962) -
other receivables
Cash flows from financing 5,446 614
activities
Net movement in borrowings 5,446 614
-
Net decrease in cash and cash 1,205 (1,213)
equivalents
Cash and cash equivalents at 1 1,214
beginning of period
Cash and cash equivalents at 1,206 1
end of period
STATEMENT OF CHANGES IN
EQUITY
Share Share Accumulated Total
Capital premium loss
R`000 R`000
R`000 R`000
Balance at 31 August 500 34,796 (15,550) 19,746
2007
Net loss for the year - - (4,523) (4,523)
Balance at 31 August 500 34,796 (20,073) 15,223
2008
Shares issued 1,106 293,439 - 294,545
Net loss for the year - - (3,243) (3,243)
Balance at 31 August 1,606 328,235 (23,316) 306,525
2009
COMMENTARY
The attached results for the year ended 31 August 2009 have been approved by the
board of directors on 30 November 2009. The accounting policies adopted for
purposes of this report comply, and have been consistently applied in all
material respects, with International Financial Reporting Standards ("IFRS").
The same accounting policies and methods of computation have been followed as
compared to the prior year. The results have been audited by Nolands
Incorporated and a copy of their unqualified audit report on these abridged
results are available for inspection at the registered office of the company.
Overview
During the period under review Queensgate expanded its operations within the
hospitality sector through the acquisition of Queensgate Leisure Holdings (Pty)
Ltd ("Queensgate Leisure") and Queensgate Business Development (Pty) Ltd ("QBD")
Queensgate Leisure is a services business that specialises in the hospitality
and leisure sector in South Africa with strong global alliances. Local
alliances include the partnership with Mvelaphanda Holdings (Pty) Ltd
("Mvelaphanda").
Queensgate Leisure has an attractive portfolio of synergistic businesses and
brands. The Queensgate Leisure hospitality and wellness portfolio includes the
ultra-exclusive Tinga Private Game Lodge in the heart of the Kruger National
Park, the Cape Town Hollow, Hollow on the Square (both 4-star), Park Inn and the
five-star Radisson Hotel in Cape Town. During 2008, Queensgate successfully
launched its OneWellness brand at the Waterfront Radisson Hotel.
QBD identifies, designs and develops hospitality properties. The services of
QBD include the provision of technical assistance and marketing of the
properties to investors.
Results and prospects
The results for the year ended 31 August 2009 reflect an attributable loss and
headline earnings of (0.21) and 0.48 cent per share respectively (31 August
2008: (0.90) cent earnings per share and 0.61 cent headline earnings per share),
based on 1 544 148 503 weighted average shares in issue (2008: 500 000 000).
The decrease in the attributable earnings are as a result of the impairment of
losses on disposal of non-current assets and finance charges.
QBD realised a healthy profit from its leisure property development that was
concluded during the period under review.
In line with the group`s policy to increase its footprint, a management contract
has been concluded with the owners of a hotel in Shelley Point.
Taking into account the effect of the recent global financial crisis, the
hospitality sector has performed in line with the directors` expectations. The
results have however been impacted by two new hotels that have been opened
recently and are still incurring losses as a result of low occupancy levels as
is normally experienced by new operations. The directors however expect these
new operations to improve as they become more established and higher occupancy
levels are attained.
The OneWellness operations are expected to become profitable within the next
twelve months.
In summary, despite the global economic downturn, Queensgate is well positioned
to benefit from a number of international sporting events to be hosted in South
Africa.
In addition, Queensgate expects that the expansion of its activities into
hospitality business development will contribute significantly to future revenue
generation.
Issue of shares and acquisitions
The company acquired 100% of the shares in Queensgate Leisure, a company that
operates in the leisure industry, from the controlling shareholder of Queensgate
and Mvelaphanda and 100% of the shares in QBD, a company that operates in the
hospitality development industry, from the controlling shareholder of
Queensgate.
Queensgate Leisure was acquired effective 1 September 2008 for an amount of R219
545 921 which was settled through the allotment of 731 819 736 shares at 30
cents per share. QBD was acquired effective 31 October 2008 for an amount of
R75 000 000 which was settled through the allotment of 375 000 000 shares at 20
cents per share.
In terms of the agreement on the acquisition of QBD, Queensgate Holdings (Pty)
Limited is entitled to a performance incentive amounting to 50% of the profit
after tax ("PAT"), adjusted for any items not in ordinary course of business, in
excess of R15 000 000 as earned by QBD. This incentive shall be settled by way
of the issue of new ordinary shares in Queensgate Hotels and Leisure Limited at
a price earnings ratio of 5 after the release of the company`s audited annual
results at a price that is equivalent to the 30 (thirty) day volume weighted
average trading price ("VWAP") calculated from the day prior to the release of
the audited annual results. 199 284 278 shares are estimated to be issued based
on the VWAP estimated at 14.135 cents. This has resulted in an increase in the
cost of investment of QBD of R28 188 833 as at 31 August 2009.
The following financial year ending August 2010, the performance incentive will
be adjusted and increased by 50% of the incentive added to the R15 000 000 PAT
and 50% of the excess over that number will be incentivised on the same basis as
in the financial year ended August 2009. This performance incentive will only
be payable in respect of the financial years ending August 2009 and 2010.
Transfer to the ALTX
The company was transferred from the VCM to the AltX on 12 September 2008,
following approval of the Queensgate Leisure acquisition by shareholders in a
general meeting.
Segmental analysis
The group`s reportable segments have been identified as hospitality and business
development units. The hospitality unit is involved in the hotels and leisure
industry in South Africa. The business development unit is involved in the
development of properties in the hospitality sector.
Business segments
Business
2009 Hospitality development Total
Revenue and other income 68,934 53,275 122,209
Net interest income /
(expense) (7,462) 503 (6,959)
Impairments (2,984) - (2,984)
Profit on disposal of non-
current assets (7,595) - (7,595)
Net loss from equity
accounted investments (2,077) - (2,077)
Segment profits/(losses)
attributable to parent
shareholders (29,835) 26,592 (3,243)
Segment assets 308,927 149,031 457,958
Segment liabilities (104,714) (46,719) (151,433)
Business
2008 Hospitality development Total
Revenue and other income 4,032 - 4,032
Net interest income / 1 - 1
(expense)
Net income/(loss) from
equity accounted - - -
investments
Segment profits
attributable to parent
shareholders (4,523) - (4,523)
Segment profits
attributable to minorities - - -
Segment assets 16,469 - 16,469
Segment liabilities (1,246) - (1,246)
Share Capital
As at 31 August 2009 there were 1 606 819 736 ordinary shares (31 August 2008:
500 000 000) in issue. At year end there were 393 180 264 unissued ordinary
shares.
The unissued shares are under the control of the directors subject to the
provisions of Sections 221 and 222 of the Companies Act and the requirements of
the JSE Limited until the next annual general meeting. Shareholders will be
asked to renew the directors` authority over the unissued shares at the
forthcoming annual general meeting.
Litigation
There is no material litigation pending against the company or being initiated
by company as at the date of this announcement.
Director changes
The following changes in directors have taken place during the year under
review:
Director Date of change Nature of change
L Sipoyo 25 November 2008 Appointed
TN Ndziba 25 November 2008 Appointed
NT Noland 29 January 2009 Appointed
A Keet 8 May 2009 Appointed
A Keet 4 August 2009 Resigned
Dividends
No dividends were paid or declared during 31 August 2009 (2008: Nil) and none
are recommended at this stage.
Subsequent events
There were no material subsequent events outside the normal course of business
from 31 August 2009 to the date of this report.
By order of the Board
Colin Human
Chairman
30 November 2009
Johannesburg
Company Secretary and Registered Office
Arcay Client Support (Proprietary) Limit (Registration number
1998/025284/07)
Arcay House, Number 3 Anerley Road, Parktown, 2193
PO Box 62397, Marshalltown, 2107
Web address: www.queensgate.co.za
Transfer Office
Computershare Investor Services (Proprietary) Limited
Directors
JC Human Chairman*
, AJ Hubbard, HGB Friedrichsen, W Voigt, MH
Weetman*
, S Swana*
, LP Sipoyo*, TN Ndziba, NT Noland, P
Nieman#
*Non-executive,
Independent, #alternate
Designated Advisor
Arcay Moela Sponsors
(Proprietary) Limited
Date: 30/11/2009 08:31:01 Produced by the JSE SENS Department.
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