| Tue 30 Mar 2010, 16:40 | | IFH - IFA SA - Condensed Consolidated Results For The Six Months Ended 31 |
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IFH
IFH
IFH - IFA SA - Condensed Consolidated Results For The Six Months Ended 31
December 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 RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2009
AND EXTENSION OF CAUTIONARY
CONDENSED CONSOLIDATED
STATEMENT OF COMPREHENSIVE INCOME
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2009 2008 2009
Audited Audited Audited
R`000 R`000 R`000
Revenue 45 906 40 413 82 747
Operating profit/(loss) 1 779 (12 474) (18 253)
Investment revenue 14 248 28 536 43 493
Finance costs (28 233) (30 137) (60 790)
Loss from equity accounted
investments (8 740) (5 290) (16 259)
Loss before taxation (20 946) (19 365) (51 809)
Taxation (1 772) 4 041 13 704
Loss for the period (22 718) (15 324) (38 105)
Other comprehensive income
Gains on property revaluation - - 2 147
Income tax relating to
components of
other comprehensive income - - (601)
Other comprehensive income for
the period, net of tax - - 1 546
Total comprehensive income for
the period (22 718) (15 324) (36 559)
Loss attributable to:
Equity holders of the parent (22 718) (15 324) (36 559)
Total comprehensive income
attributable to:
Equity holders of the parent (22 718) (15 324) (36 559)
Basic and diluted earnings per
share (cents) ("EPS") (10,41) (7,02) (17,46)
Notes to the income statement
Basic and diluted headline
earnings per
share (cents) ("HEPS") (note 1) (10,41) (7,10 ) (17,55)
CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
31 December 31 December 30 June
2009 2008 2009
Audited Audited Audited
R`000 R`000 R`000
ASSETS
Non-current assets 648 293 545 519 604 376
Property, plant and equipment 179 703 170 174 180 492
Goodwill 2 298 2 298 2 298
Investments in joint venture 26 839 12 266 22 946
Investment in associates 26 275 52 972 37 590
Loans to associates 389 470 291 800 336 635
Financial assets 3 600 3 900 3 900
Deferred tax 20 108 12 109 20 515
Current assets 251 148 283 461 270 621
Inventories 2 497 2 098 2 155
Financial assets 20 426 7 622 8 642
Township properties 161 625 137 676 150 265
Trade and other receivables 39 699 40 674 45 904
Cash and cash equivalents 26 901 95 391 63 655
Total assets 899 441 828 980 874 997
EQUITY AND LIABILITIES
Capital and reserves 124 683 168 636 147 401
Issued share capital and share
premium 71 892 71 892 71 892
Revaluation reserve 45 595 44 049 45 595
Distributable reserves 7 196 52 695 29 914
Non-current liabilities 667 586 553 978 640 710
Loans from shareholders 374 636 269 602 350 155
Borrowings 252 489 248 843 253 248
Finance lease obligation 1 145 - 112
Deferred tax 12 042 9 039 10 010
Amount owing to joint venture 27 274 26 494 27 185
Current liabilities 107 172 106 366 86 886
Current tax payable 305 11 629 940
Finance lease obligation 32 - 33
Deferred revenue 9 544 26 261 16 346
Trade and other payables 66 620 67 086 68 292
Advance deposits 1 193 1 390 1 275
Financial liabilities 29 478 - -
Total equity and liabilities 899 441 828 980 874 997
Net asset value per share
(cents)("NAV") 57,14 77,28 67,55
Net tangible asset value per
share (cents) ("NTAV") 56,09 76,23 66,50
Number of shares in issue and
used for NAV and NTAV
calculation 218 210 680 218 210 680 218 210 680
SEGMENTAL ANALYSIS
The group has adopted IFRS 8 Operating Segments with effect from 1 July 2009.
IFRS 8 requires operating segments to be identified on the basis of internal
reporting about components of the group that are regularly reviewed by the
chief operating decision maker (CODM) to allocate resources to the segments and
to assess their performance. The CODM has been identified as the executive
directors. Management has determined the operating segments based on the
internal reports. The group has identified eight reportable segments as
follows:
- IFA Hotels - IFA Zimbali
- IFA Boschendal - IFA Estates
- IFA SA - IFA Namibia
- IFA Legends - Zimbali Rentals
The executive directors evaluate the segment performance based on operating
profit or loss before tax and exceptional items.
The following is an analysis of the group`s revenue and operating results by
reportable segment:
IFA Hotels
Six months ended
31 December
2009 2008
Audited Audited
R`000 R`000
Revenue from external customers 15 744 8 190
Intersegment revenue - -
EBITDA 10 284 1 108
EBIT 10 054 908
Net profit/(loss) 5 941 3 773
Segment assets 215 497 218 356
IFA Zimbali
Six months ended
31 December
2009 2008
Audited Audited
R`000 R`000
Revenue from external customers 15 834 19 318
Intersegment revenue - -
EBITDA (2 560) (3 451)
EBIT (4 945) (6 180)
Net profit/(loss) (12 765) (10 765)
Segment assets 128 113 124 417
IFA Boschendal
Six months ended
31 December
2009 2008
Audited Audited
R`000 R`000
Revenue from external customers - -
Intersegment revenue - -
EBITDA (5 257) (3 774)
EBIT (5 257) (3 774)
Net profit/(loss) (5 180) (1 977)
Segment assets 137 404 86 354
IFA Estates
Six months ended
31 December
2009 2008
Audited Audited
R`000 R`000
Revenue from external customers 4 943 -
Intersegment revenue - -
EBITDA 908 (2 455)
EBIT 880 (2 477)
Net profit/(loss) (268) (3 078)
Segment assets 16 965 5 826
IFA SA
Six months ended
31 December
2009 2008
Audited Audited
R`000 R`000
Revenue from external customers 1 858 6 975
Intersegment revenue 2 264 6 592
EBITDA (653) (2 701)
EBIT (916) (2 940)
Net profit/(loss) 1 943 1 829
Segment assets 698 159 562 142
IFA Namibia
Six months ended
31 December
2009 2008
Audited Audited
R`000 R`000
Revenue from external customers 6 591 7 948
Intersegment revenue - -
EBITDA (2 312) (1 780)
EBIT (2 765) (1 860)
Net profit/(loss) (5 771) (2 360)
Segment assets 101 526 71 817
IFA Legends
Six months ended
31 December
2009 2008
Audited Audited
R`000 R`000
Revenue from external customers - -
Intersegment revenue - -
EBITDA (6 987) (2 182)
EBIT (6 987) (2 182)
Net profit/(loss) (6 906) (3 280)
Segment assets 279 094 260 010
Zimbali Rentals
Six months ended
31 December
2009 2008
Audited Audited
R`000 R`000
Revenue from external customers 936 1 140
Intersegment revenue - -
EBITDA 416 749
EBIT 403 741
Net profit/(loss) 290 534
Segment assets 4 652 6 375
Eliminations
Six months ended
31 December
2009 2008
Audited Audited
R`000 R`000
Revenue from external customers - (3 158)
Intersegment revenue (2 264) (6 592)
EBITDA 2 572 -
EBIT 2 572 -
Net profit/(loss) -2 -
Segment assets (681 969) (506 317)
Consolidated
Six months ended
31 December
2009 2008
Audited Audited
R`000 R`000
Revenue from external customers 45 906 40 413
Intersegment revenue - -
EBITDA (3 589) (14 486)
EBIT (6 961) (17 764)
Net profit/(loss) (22 718) (15 324)
Segment assets 899 441 828 980
CONDENSED CONSOLIDATED
CASH FLOW STATEMENT
31 December 31 December 30 June
2009 2008 2009
Audited Audited Audited
R`000 R`000 R`000
Cash flows from operating
activities (20 136) 2 695 (63 276)
Cash generated by operating
activities (8 903) 5 315 (41 463)
Interest received 17 601 28 536 42 970
Interest paid (27 864) (30 137) (54 713)
Taxation paid (970) (1 019) (10 070)
Cash flows from investing
activities (70 572) (122 753) (171 655)
Expenditure to maintain operating
capacity
Property, plant and equipment
acquired (4 255) (7 309) (19 134)
Proceeds of disposals of
property, plant
and equipment 1 673 240 451
Expenditure for expansion
Investment in associates - (13 775) (13 810)
Loans to associates and joint
ventures (56 506) (102 509) (156 953)
Loans advanced to group companies (11 784) - (4 070)
Loans paid by group companies - - 21 261
Other investments 300 600 600
Cash flows from financing
activities 53 954 113 236 196 410
Loans raised 30 601 135 5 276
Loans repaid (760) (3 557) -
Shareholder`s loan raised 24 113 116 658 191 134
Total cash movement for the period (36 754) (6 822) (38 521)
Cash at the beginning of the
period 63 655 102 213 102 176
Total cash at end of the period 26 901 95 391 63 655
CONDENSED CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY
Share Share Revaluation
capital premium reserve
Audited R`000 R`000 R`000
Balance at 1 July 2008 2 182 69 710 44 049
Total comprehensive income
for the period - - -
Balance at
31 December 2008 2 182 69 710 44 049
Balance at 1 July 2009 2 182 69 710 45 595
Total comprehensive income
for the period - - -
Balance at
31 December 2009 2 182 69 710 45 595
Distributable
Reserves Total
Audited R`000 R`000
Balance at 1 July 2008 68 019 183 960
Total comprehensive income
for the period (15 324) (15 324)
Balance at
31 December 2008 52 695 168 636
Balance at 1 July 2009 29 914 147 401
Total comprehensive income
for the period (22 718) (22 718)
Balance at
31 December 2009 7 196 124 683
BASIS OF PREPARATION AND ACCOUNTING POLICIES
Basis of preparation
These condensed consolidated financial statements as set in this report have
been prepared in accordance with the recognition and measurement requirements
of International Financial Reporting Standards ("IFRS"), the disclosure
requirements of IAS 34, the Companies Act of South Africa and the Listings
Requirements of JSE Limited.
These condensed consolidated financial results for the six months ended 31
December 2009 ("the period"), have been audited by the group`s auditors and
have been prepared on the fair value and going concern bases. The audit report
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.
Significant accounting policies
The accounting policies applied confirm with IFRS and are consistent with those
followed in the preparation of the annual financial statements for the year end
30 June 2009, except for the adoption of the following IFRS`s, IFRIC`s,
Circular and amendments to IFRS`s and IFRIC`s that are relative and that became
effective during the current period and of which had no significant impact on
the reported results other than giving rise to additional disclosures and a
revision to the relevant accounting policies:
IFRS 3 Business Combinations & IAS 27 - Consolidated and Separate
Financial Statements
IFRS 8 Operating Segments
IAS 1 Presentation of Financial Statements (structure of Financial
Statements and current/non-current classification of derivatives)
IAS 7 Statement of Cash Flows (cash flows from assets held for rental
classified as operating activities)
IAS 23 Borrowing Costs (capitalisation model)
IAS 28 Investments in Associates (consequential amendments from changes to
Business Combinations, required disclosures when investments in
associates are accounted for at fair value through profit or loss
and impairment of investment in associate)
IAS 31 Interests in Joint Ventures (consequential amendments from changes
to Business Combinations and required disclosures when interests in
jointly controlled entities are accounted for at fair value through
profit or loss)
Circular 3/2009 (Headline Earnings)
IAS 34 Interim Financial Reporting (earnings per share disclosures in
interim financial reports)
IAS 36 Impairment of Assets (disclosure of estimates used to determine the
recoverable amount)
IAS 40 Investment Property (property under construction or development for
future use as investment property, consistency of terminology with
IAS 8 and investment property held under lease)
IFRIC 15 Agreements for the Construction of Real Estate
NOTES TO THE FINANCIAL RESULTS
Audited Audited
Six months Six months
ended ended
31 December 31 December
2009 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
(cents) (10,41) (7,10)
Reconciliation of total earnings to headline
earnings attributable to
equity holders of the parent.
Earnings attributable to ordinary shareholders (22 718) (15 324)
Less: profit on disposal of property, plant and
equipment (1) (240)
Tax effect of adjustments - 67
Headline loss (22 719) (15 497)
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 10 703 15 367
Approved but not contracted 30 400 52 500
41 103 67 867
3. Operating lease commitments 256 236
4. Investments and loans
Investment in associate companies 26 275 52 972
Loans to associate companies 389 470 291 800
Other unlisted investments 3 600 3 900
419 345 348 672
Directors` valuation of unlisted investments
- unlisted associate companies 415 745 344 772
- other unlisted investments 3 600 3 900
419 345 348 672
5. Related party transactions
During the six months ended, group companies entered into various transactions.
These transactions were entered into in the ordinary course of business and
under terms that are no less favourable than those arranged with independent
third parties. All such subsidiary-related intra group related party
transactions and outstanding balances are eliminated in preparation of the
consolidated financial statements of the group. All transactions with joint
ventures and the associates are concluded on an arm`s length basis.
6. Post balance sheet events
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 Developments 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 Gary
Player signature golf course, driving range and Gary Player 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 2 400 hectare Boschendal Estate
("Boschendal") near Franschhoek in the Western Cape, 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 during the period, subject to certain
conditions precedent that remains to be fulfilled.
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 sales and marketing agent of
IFA Legends and IFA 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 fourth 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 renowned
international golfer.
Zimbali Rentals (Pty) Limited ("Zimbali Rentals")
Zimbali 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 increase in earnings before interest, taxation, depreciation
and amortisation ("EBITDA") from R1,1 million in the comparative period to
R10,2 million in the current period is attributable to an increased sales pace
and a retrospective adjustment relating to an upward adjustment of gross
margins of land sales within the Zimbali Coastal Resort.
The new Zimbali Lakes was launched in November 2008 and reservations amounting
to R100 million have been made to date. Re-sales of R65 million was achieved in
the Zimbali Coastal Resort in the current period despite the current economic
downturn.
IFA Zimbali - Although revenue decreased 18% to R15,8 million from R19,3
million, EBITDA has decreased from a loss of R3,4 million in the comparative
period to a loss of R2,5 million for the period. This improvement is as a
result of a reduction in cost of sales and operating costs.
The 2010 World Cup which falls into the traditional low season period of
operations will have a positive impact on revenues and profitability in the
last quarter of the financial year.
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 will also
impact positively on IFA Estates due to commissions earned by the latter.
Sales commissions earned for the period of R4,9 million has reduced the net
loss to R0,3 million from R3 million in the prior period.
IFA Boschendal - The development rights for the "Founders Estates" were
received in 2008. Founders Estate, Goede Hoop was sold in December 2009 for
R24,675 million and negotiations for further sales in excess of R100 million
are currently underway. Good progress has been made in the Phase 2 applications
for development rights.
IFA Boschendal`s 32,08% share of the losses in Boschendal has resulted in a
reduction of IFA SA`s after tax loss by R5,1 million.
IFA Namibia - IFA Namibia`s 50% share in OLIFA has incurred a loss of R5,7
million compared to a loss of R2,3 million in the comparative period. The
losses are due to a combination of the recent re-branding (Kempinski) and
completion of the upgrade to the Mokuti Lodge, as well as the main leisure
source market being Germany, reducing travel and leisure spend as a result of
the economic slow-down in Europe.
With the World Cup taking place in South Africa and the increased brand
awareness, an improvement in revenue and profitability is expected.
IFA Legends - IFA Legend`s 20% share of losses in Legends contributed R6,9
million to IFA SA`s total after tax loss for the period due to the current
economic conditions resulting in an impact on sales of certain products
available.
Phase 1 of the development is complete and the golf course was opened for play
in April 2009.
Zimbali Rentals - Zimbali Rentals has contributed a profit of R0,3 million to
the group for the period. The reduction in revenue is partly attributable to
the current economic climate, but the 2010 FIFA World Cup should have a
positive impact on revenue.
PROSPECTS
The directors believe that the prospects for the group remain positive. Legal
sales achieved in Zimbali during the period under review will impact positively
on profitability and cash flows within the financial year and sales activity in
Zimbali is continuing. 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 and Legends in particular.
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 invaluable support.
EXTENSION OF CAUTIONARY
Shareholders are referred to the announcement made on 1 July 2009 ("the July
announcement") and the cautionary announcements dated 12 August 2009,
28 September 2009, 9 November 2009, 6 January 2010 and 16 February 2010 and are
advised that pending the implementation of the transactions set out in the July
announcement, 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
For and behalf of the board
TJM Al-Bahar WJ Burger
Chairman Chief Executive Officer
30 March 2010
Zimbali, Durban, KwaZulu-Natal
CORPORATE INFORMATION
IFA Hotels & Resorts Limited
("IFA SA" or "the group")
Registration number: 1919/001318/06
Share code: IFH ISIN: ZAE000075669
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: 30/03/2010 16:40:02 Produced by the JSE SENS Department.
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