| Tue 8 Dec 2009, 13:37 | | CUL - Cullinan Holdings Limited - Reviewed Condensed Consolidated Results For |
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CUL
CUL
CUL - Cullinan Holdings Limited - Reviewed Condensed Consolidated Results For
The Year Ended 30 September 2009
CULLINAN HOLDINGS LIMITED
TOURISM AND LEISURE
(Registration number 1902/001808/06)
(Share code: CUL ISIN: ZAE000013710)
("the company" or "the group")
REVIEWED CONDENSED CONSOLIDATED RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2009
GROUP FINANCIAL HIGHLIGHTS
Headline earnings - full year up 194%
Earnings - full year up 10%
Profit before tax - full year up 16%
Profit before tax - first six month period down 61%
Profit before tax - second six month period up 1 585%
Turnover - full year up 4%
Turnover - first six month period down 8%
Turnover - second six month period up 15%
GROUP CONDENSED STATEMENT OF FINANCIAL POSITION
Reviewed Audited
as at as at
30 September 30 September
2009 2008
R`000 R`000
ASSETS
Non-current assets 122 864 118 205
Property, plant and equipment 52 695 60 544
Goodwill 33 593 24 070
Intangible assets 26 055 27 705
Investment properties 5 000 -
Investment in associate companies 3 053 1 220
Investment in joint venture 1 241 1 058
Deferred tax asset 1 227 3 608
Current assets 239 174 283 953
Inventories 16 737 9 925
Accounts receivable 122 445 142 969
Other financial asset 754 -
Taxation 2 708 890
Cash resources 96 530 130 169
Non-current assets held for sale 6 551 7 757
Total assets 368 589 409 915
EQUITY AND LIABILITIES
Ordinary shareholders` equity 111 520 92 855
Preference shareholders` equity 546 546
Non-controlling interest 5 5
Total shareholders` equity 112 071 93 406
Non-current liabilities 46 967 45 928
Deferred tax liability 3 067 2 386
Long-term loans 33 132 34 705
Operating lease accrual 10 268 8 337
Preference shares 500 500
Current liabilities 209 551 270 581
Short-term portion of long-term loans 4 040 4 351
Operating lease accrual 215 68
Accounts payable 197 488 257 527
Taxation 1 121 741
Preference dividends 41 14
Provisions 6 646 7 880
Total equity and liabilities 368 589 409 915
GROUP CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Reviewed Audited
year ended year ended
30 September 30 September
2009 2008
R`000 R`000
Revenue 406 509 397 603
Turnover 403 949 389 939
Net operating expenses (381 383) (373 229)
Operating profit 22 566 16 710
Finance income 2 560 7 664
Finance expenses (417) (4 637)
Preference dividends paid (55) (55)
Share of (loss)/profit of associates (771) 342
Share of profit of joint venture 183 710
Profit before taxation 24 066 20 734
Tax expense (6 115) (4 424)
Profit for the year 17 951 16 310
Other comprehensive income:
Exchange differences on translating foreign (150) (360)
operations
Revaluation of land and buildings 864 -
Total comprehensive income for the year 18 665 15 950
Profit attributable to:
equity holders 17 951 16 310
non-controlling interest - -
Total comprehensive income attributable to:
equity holders 18 665 15 950
non-controlling interest - -
Basic earnings per share (cents) 2,50 2,27
Diluted earnings per share (cents) 2,50 2,27
GROUP CONDENSED STATEMENT OF CHANGES IN EQUITY
Reviewed Audited
year ended year ended
30 September 30 September
2009 2008
R`000 R`000
Ordinary share capital
Balance at beginning of year 7 184 7 184
Issued during year - -
Balance at end of year 7 184 7 184
Share premium
Balance at beginning of year 59 905 59 905
Premium on issue of shares - -
Balance at end of year 59 905 59 905
Share capital reduction reserve fund
Balance at beginning of year 20 876 20 876
Balance at end of year 20 876 20 876
Capital redemption reserve fund
Balance at beginning of year 4 4
Balance at end of year 4 4
Foreign currency translation reserve
Balance at beginning of year (1 423) (1 063)
Reserve on translation of foreign subsidiary (150) (360)
Balance at end of year (1 573) (1 423)
Revaluation reserve
Balance at beginning of year - -
Revaluation of land and buildings 864 -
Balance at end of year 864 -
Accumulated profit/(loss)
Balance at beginning of year 6 309 (3 121)
Gain realised on additional interest acquired - 304
on subsidiary
Total comprehensive income for the year 17 951 16 310
Ordinary dividend paid - (7 184)
Balance at end of year 24 260 6 309
Ordinary shareholders` equity 111 520 92 855
Equity portion of preference share capital
Balance at beginning of year 546 546
Balance at end of year 546 546
Non-controlling interest
Balance at beginning of year 5 5
Profit attributable to non-controlling interest - -
Balance at end of year 5 5
Total income and expense for the year
Profit for year 17 951 16 310
- Attributable to equity shareholders 17 951 16 310
- Attributable to non-controlling interest - -
Total other comprehensive income for the year 714 (360)
18 665 15 950
GROUP CONDENSED STATEMENT OF CASH FLOWS
Reviewed Audited
year ended year ended
30 September 30 September
2009 2008
R`000 R`000
Net cash inflow/(outflow) from operating (3 334) 27 059
activities
Net cash outflow from investing activities (27 667) (13 098)
Net cash outflow from financing activities (2 638) (5 960)
Net (decrease)/increase in cash and cash (33 639) 8 001
equivalents
Cash and cash equivalents at beginning of year 130 169 122 168
Cash and cash equivalents at end of year 96 530 130 169
NOTES
1. Basis of preparation
The reviewed condensed consolidated financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting and in compliance with the
South African Companies Act, No 61 of 1973, as amended. The reviewed condensed
consolidated financial statements are prepared on the historical cost basis,
with the exception of certain financial instruments and properties which are
measured at fair value. The policies are consistent with those of the previous
annual financial statements except for the early adoption of IAS 1:
Presentation of Financial Statements - Revised. The group has complied with
the revised naming conventions as required by IAS 1 and reports one Statement
of Comprehensive Income. In terms of IAS 1 certain items reported in the
Statement of Changes in Equity are now disclosed in the Statement of
Comprehensive Income.
2. Property, plant and equipment
During the year the group purchased property, plant and equipment of R5,482
million (2008: R13,522 million) and disposed of property, plant and equipment
with a book value of R0,963 million (2008: R2,796 million).
The group has future commitments to purchase property, plant and equipment of
R6,895 million (2008: R1,307 million).
3. Notes to the statement of comprehensive income
2009 2008
Ordinary shares (`000)
- In issue 718,355 718,355
- Weighted average 718,355 718,355
R`000 R`000
Determination of headline earnings:
Profit attributable to ordinary shareholders 17 951 16 310
Share of (profit)/loss of associate and joint 588 (1 052)
venture
Fair value adjustment on investment properties (4 411) (7 426)
including those classified as held for sale
(Profits)/losses on disposal of property, plant (99) (4 247)
and equipment
Total tax effect of the adjustments 607 1 387
Headline earnings 14 636 4 972
Headline earnings per share (cents) 2,04 0,69
Diluted headline earnings per share (cents) 2,04 0,69
Net asset value per share (cents) 15,60 13,00
4. Acquisition of business
The company purchased Central Boating with effect 1 October 2008 which is a
marine leader in the importation and distribution of leisure marine equipment
to both the yachting and power boat sectors of the market in South Africa.
This acquisition has strengthened the company`s presence in the marine
industry and will add additional profits to the group in the future.
Details of net assets and goodwill as follows:
Purchase consideration paid in cash R17,537 million
Fair value of net assets acquired - inventory R7,864 million
Goodwill R9,673 million
Goodwill is attributable to significant synergies expected to arise between
Manex and Central Boating.
Since the acquisition date, the following amounts have been included in the
Statement of comprehensive income for Central
Boating for the year:
Revenue R40,483 million
Profit R2,342 million
5. Related parties
The group`s head offices and the Thompsons Johannesburg operation in Rosebank
are leased from Motolla Property Investments (Pty) Limited, an entity to which
one of the group`s shareholders, Travcorp Financial Services Limited, is a
related party. The registered office and Central Boating premises are also
leased from Motolla Property Investments (Pty) Limited. Rentals paid to
Motolla for the year were market related and amounted to R6,652 million (2008:
R4,011 million).
6. Auditor`s review
The reviewed condensed consolidated results for the year have been reviewed by
the group`s auditors, Mazars Moores Rowland. Their unqualified review opinion
is available for inspection at the company`s registered office.
7. JSE Limited ("JSE")
The directors of the company ensured compliance with the JSE Listings
Requirements during the year under review.
8. Segmental reporting
Travel & Yachting &
Tourism Diving Total
R`000 R`000 R`000
2009
Revenue 335 782 70 727 406 509
Operating profit 18 963 3 603 22 566
2008
Revenue 368 282 29 321 397 603
Operating profit 15 471 1 239 16 710
9. Contingent liabilities
On 2 December 2009, the company received a summons from the Powerpack Pension
Fund (in liquidation) claiming payment of approximately R45 million plus
interest relating to pension fund transactions during 1999. The company
disputes liability and will be defending the claim. Details regarding this
matter have been disclosed in the notes of the company`s 2008 annual financial
statements.
Overview
The group implemented a change in management, midway during the year, in March
2009. The new management team refocused the business by implementing
efficiencies in operations, a continued drive to improve service levels and to
provide the best value holidays to its customers. The result was a significant
improvement in profitability in the second half of the year. Profit before tax
was down R13,279 million during the first half of the year, and up R16,611
million in the second half of the year. We would like to thank the Board,
Management and our employees for their efforts, commitment and contribution in
achieving these improved results. Economic conditions remained challenging
throughout the year.
Cash flow
Cash resources declined in the first half of the year with Central Boating
being acquired for cash, a general decline in business and change in booking
patterns for Holidays. The second half saw an increase in cash resources of R9
million which is pleasing, particularly as the second half of the year is
traditionally a slow period for cash generation.
Review of Operations
Yachting and Diving (Cullinan Marine)
The Marine & Leisure unit consists of Central Boating and Manex Marine. The
unit performed well during the year, despite difficult trading conditions.
Manex
Manex is a supplier to the diving and yacht building industry. The business
holds agencies for a number of key brands in these industries. The business
benefited from a change in management. This resulted in improved service
levels, efficiencies and an improvement in value provided to it`s customers.
Despite a difficult trading year, the financial results for the year
significantly exceeded the prior year.
Central Boating
Central Boating is a supplier to the yacht industry and holds agencies for a
number of leading brands. These are in many cases complementary to Manex. The
business was acquired in October 2008 and met its performance expectations for
the year.
Travel and Tourism
Thompsons Touring & Safaris
The touring division provides tourism products for the inbound division. These
include escorted tours, general sightseeing and open vehicle game drives in
the National Parks which are offered throughout Southern Africa. Steps were
taken by management to address challenging market conditions. This resulted in
profitability for the year exceeding 2008 levels.
Hylton Ross Tours
Hylton Ross Tours operates coaches and vehicles for hire and charter in the
domestic travel market and also provides day tours in and around the Western
Cape and the Garden Route. The business was affected by the decline in demand
in the market place. Again, as this was anticipated, steps were taken in
advance which resulted in profitability for the year exceeding that of 2008.
Thompsons Corporate and Leisure Travel
Thompsons Travel is a retail travel agency with offices in Johannesburg, Cape
Town and Durban. Both the Corporate and Leisure divisions were affected by a
decrease in demand in the local market during the year. Steps have been taken
by management to improve the business for 2010.
Pentravel
Pentravel is a chain of 23 retail travel outlets located in the major shopping
malls throughout South Africa. The business experienced a reduction in
turnover and profitability during the year. This reduction was in line with
the general slow down in the domestic travel market in South Africa. A new
management team was implemented during the latter half of 2009 and steps have
been taken to improve the business for 2010.
Thompsons Holidays (the outbound division)
The Holidays division is the premier wholesale supplier of travel related
products and holidays to the South African market, distributing its holiday
product through domestic travel agencies and consortiums. Sales were affected
by the downturn in the domestic travel market. A new management team was
installed during the second half of the year, with a focus on improved
efficiencies, service levels and providing best value to its customers through
the launch of the Thompsons Specialist Collection. The launch of the Thompsons
Specialist Collection representing best value holiday packages in the South
African marketplace, have proved very successful. The result was a significant
improvement in profitability during the second half of the year in comparison
to the prior year. Further steps are anticipated to improve the business and
the outlook for further growth in 2010 is positive.
Thompsons Africa (the inbound division)
The Thompsons Africa division is the leading South African tour wholesaler and
destination marketing organisation. It sells Southern African travel packages
to international Tour Operators with a blue chip customer base. The customer
base is geographically well spread and Thompsons Africa has been recognised as
the most well known brand amongst South African destination management
companies operating in the International travel market. The downturn in the
market place was anticipated for 2009, and steps taken to reduce costs and
improve efficiencies, have proved successful in increasing profitability in
the second half of the year when compared to the prior year.
Planet Africa
The Planet Africa division is a joint venture operation formed to sell and
market Southern Africa primarily to Japanese and Korean Tour Operators. It is
the largest incoming tour operator operating in the Japanese market and
although affected by a drop in demand out of Japan has maintained
profitability through increased efficiencies.
Thompsons Gateway Singapore
Gateway is a sales office in Singapore, selling Southern African packages to
the South East Asian travel trade. It has maintained a reasonable level of
turnover although profitability has declined during the year.
Prospects
Whilst economic conditions remain challenging, management changes in March
2009 have improved the dynamics of the business and prospects are positive for
the year ahead. The Group plans to continue to focus on growing its business
organically and is well placed to benefit from the 2010 World Cup. Efforts
will also continue to look for further growth opportunities through
acquisition.
On behalf of the Board
M Tollman DK Standage
Executive Chairman Chief Financial Officer
Auditors
Mazars Moores Rowland were re-elected as auditors in 2009.
Sponsor
Arcay Moela Sponsors (Proprietary) Limited
(Registration number 2006/033725/07)
Directors
M Tollman (Executive Chairman)
MA Ness*
VET O`Hana
DD Hosking**
LA Pampallis
G Tollman***
DK Standage (Financial Director)
* British ** New Zealand *** USA Non-Executive
Company secretary
DK Standage
Registered office
6 Hood Avenue, Rosebank, 2196
Transfer secretaries
Computershare Investor Services (Pty) Limited
Ground Floor, 70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
For further information on group activities, please write to:
The Company Secretary, Cullinan Holdings Limited
PO Box 41032, Craighall, 2024
(Registration number 1902/001808/06)
(Share code: CUL ISIN: ZAE000013710)
("the company" or "the group")
8 December 2009
Date: 08/12/2009 13:37:02 Produced by the JSE SENS Department.
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