| Mon 31 May 2010, 11:40 | | WIL - Wilderness - Pro Forma Results for the year ended 28 February 2010 |
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WIL
WIL
WIL - Wilderness - Pro Forma Results for the year ended 28 February 2010
WILDERNESS HOLDINGS LIMITED
(formerly Wilderness Holdings (Proprietary) Limited)
(Incorporated in Botswana on 23 February 2004)
(Registration number 2004/2986)
(Registered as an external company in South Africa on 27 November 2009)
ISIN: BW0000000868
Share code: WIL
("Wilderness", "company" or "the group")
PRO FORMA RESULTS (COMPILED FROM INDIVIDUALLY-REVIEWED INFORMATION OF WILDERNESS
HOLDINGS LTD AND WILDERNESS SAFARIS INVESTMENT AND FINANCE (PROPRIETARY)
LIMITED, RESPECTIVELY) FOR THE YEAR ENDED 28 FEBRUARY 2010
* EBITDA increased 9% on prior year
* Cost cutting measures improved gross profit percentage from 44% to 48%
* Further rationalisation resulted in 13% reduction in normalised operating
costs
* Strong cash generation of P131 million from operations during the year
Occupancies down relative to the prior year:
- In mature-state businesses, from 65% to 59%
- In infancy businesses and Zimbabwe from 42% to 41%
* Revenues down 12% on prior year
* Pro forma HEPS of 20.44 thebe per share
SALIENT FINANCIAL FEATURES
Pro forma Pro forma
year ended year ended
BWP 000 28 Feb 2010 28 Feb 2009
Headline earnings/(loss) 47 220 (293)
Number of shares* (000)
Issued 231 000 231 000
Weighted average 231 000 231 000
Diluted weighted average 231 000 231 000
Earnings/(loss) per share (thebe)
Basic EPS 20.57 (1.14)
Headline EPS 20.44 (0.13)
Diluted HEPS 20.44 (0.13)
Diluted EPS 20.57 (1.14)
Net asset value per share (thebe) 104 97
Net tangible asset value per share (thebe) 87 80
* The number of shares utilised has been based on shares in issue as at 8 April
2010
and has been applied in both financial periods.
PRO FORMA GROUP STATEMENT OF COMPREHENSIVE INCOME
Pro forma Pro forma
year ended % year ended
BWP 000 28 Feb 2010 change 28 Feb 2009
Revenue 868 139 (12) 986 390
Cost of sales (451 482) (554 877)
Gross margin 416 657 (3) 431 513
Operating costs (301 429) (325 955)
Earnings before depreciation,
amortisation and goodwill
impairment ("EBITDA") 115 228 9 105 558
Depreciation and amortisation (50 569) (50 273)
Goodwill impairment (3 239) (328)
Operating profit 61 420 12 54 957
Finance income 2 838 6 857
Finance costs (9 359) (14 330)
Unrealised foreign exchange
gain/(loss) on loans 24 124 (31 724)
Share of equity accounted
investment earnings/(losses) 2 521 (897)
Profit before taxation 81 544 449 14 863
Taxation (35 789) (22 987)
Profit/(loss) for the year
from continuing operations 45 755 (8 124)
Profit for the year from
discontinuing operations 2 267 3 157
Profit/(loss) for the year 48 022 (4 967)
Other comprehensive
(loss)/income: (23 996) 10 385
(Loss)/gain on revaluation of
property, plant and equipment (35 038) 18 131
Income tax relating to
revaluation of property,
plant and equipment 11 042 (7 746)
Total comprehensive income for
the year 24 026 5 418
Profit/(loss) for the year for
both continuing and discontinued
operations attributable to:
Owners of the company 47 523 (2 641)
Non-controlling interest 499 (2 326)
48 022 (4 967)
Total comprehensive income for
the year for both continuing
and discontinued operations
attributable to:
Owners of the company 23 527 7 744
Non-controlling interest 499 (2 326)
24 026 5 418
KEY RATIOS
Gross margin % 48.0 43.7
EBITDA % 13.3 10.7
Exchange rates
Average Pula/US$ exchange rate 6.97 7.08
Closing Pula/US$ exchange rate 6.98 7.98
Pula/Rand income statement
translation rate 1.15 1.23
Pula/Rand balance sheet
translation rate 1.10 1.29
PRO FORMA GROUP STATEMENT OF FINANCIAL POSITION
Pro forma Pro forma
BWP 000 28 Feb 2010 28 Feb 2009
ASSETS
Non-current assets 459 070 519 623
Property, plant and equipment 357 244 369 209
Goodwill 38 643 39 688
Investment in associates 49 731 50 831
Loans to related parties 319 35 101
Deferred tax assets 13 133 24 794
Current assets 208 901 142 556
Inventories 15 535 13 917
Trade and other receivables* 90 889 66 104
Taxation 8 537 4 383
Cash and cash equivalents 93 940 58 152
Asset of disposal group classified as
held for sale 1 197 -
Total assets 669 168 662 179
EQUITY AND LIABILITIES
Ordinary shareholders` funds 239 556 225 036
Non-controlling interest (4 518) 386
Total equity 235 038 225 422
Long-term liabilities and payables 131 780 165 649
Deferred tax liabilities 22 736 24 603
Current liabilities 279 608 246 505
Payables, accruals and provisions 163 354 158 961
Future cash 83 211 62 634
Taxation 3 028 5 483
Bank overdrafts 30 015 19 427
Liabilities of disposal group
classified as held for sale 6 -
Total equity and liabilities 669 168 662 179
Capital expenditure incurred in
current year 44 217 90 975
Lease commitments at end of year 121 499 73 994
Payable within one year 19 070 15 500
Payable after one year 102 429 58 494
* Increase over prior year results mainly from reclassification of loans to
related parties shown under non-current assets above.
PRO FORMA ABRIDGED GROUP CASH FLOW STATEMENT
Pro forma Pro forma
year ended year ended
BWP 000 28 Feb 2010 28 Feb 2009
EBITDA 115 228 105 558
Profit from discontinuing operations 2 267 3 157
Loss on disposal of property, plant
and equipment 705 2 081
Revaluation of aircraft below
original cost 4 437 264
Other non-cash items 12 838 -
Cash generated before working
capital changes 135 475 111 060
Working capital changes (4 473) (84 231)
Cash generated from operations 131 002 26 829
Net finance costs paid (6 521) (7 473)
Taxation paid (29 340) (29 878)
Net cash inflow/(outflow) from
operating activities 95 141 (10 522)
Net cash outflow from investing
activities (43 131) (84 625)
Net cash (outflow)/inflow from
financing activities (26 810) 98 938
Increase in cash and cash equivalents 25 200 3 791
Cash and cash equivalents at
beginning of year 38 725 34 934
Cash and cash equivalents at
end of year 63 925 38 725
PRO FORMA ABRIDGED STATEMENT OF CHANGES IN TOTAL EQUITY
Pro forma Pro forma
year ended year ended
BWP 000 28 Feb 2010 28 Feb 2009
Balance at beginning of year 225 422 223 147
Exchange difference arising on
conversion of foreign subsidiaries 3 315 2 700
Revaluation of property, plant and
equipment (35 038) 18 131
Deferred tax effect of revaluation 11 042 (7 746)
Transfer of shareholders` loans to
Short-term payables (12 017) -
Total profit/(loss) for the year
attributable to the owners of
the company 47 523 (2 641)
Minority interest arising on
business combination (2 868) (3 755)
Minority portion of dividend paid (2 840) (2 088)
Non-controlling interest portion of
profit/(loss) 499 (2 326)
Balance at end of year 235 038 225 422
PRO FORMA SEGMENTAL ANALYSIS
Pro forma Pro forma
year ended year ended
BWP 000 28 Feb 2010 28 Feb 2009
Revenue
Safari consulting 838 257 981 523
Camp, lodge and safari explorations 286 619 302 970
Transfer and touring 147 899 145 911
Finance and asset management 50 459 42 981
Intergroup (455 095) (486 995)
868 139 986 390
EBITDA
Safari consulting 25 827 29 047
Camp, lodge and safari explorations 65 778 38 743
Transfer and touring 4 856 10 863
Finance and asset management 18 767 26 905
115 228 105 558
Total assets
Safari consulting 213 558 196 267
Camp, lodge and safari explorations 440 122 404 976
Transfer and touring 80 910 79 547
Finance and asset management 406 462 420 162
Intergroup (471 883) (438 773)
669 168 662 179
DETERMINATION OF HEADLINE EARNINGS
Pro forma Pro forma
year ended year ended
BWP 000 28 Feb 2010 28 Feb 2009
Profit/(loss) attributable to
owners of the parent per the
statement of comprehensive income 47 523 (2 641)
Headline earnings adjustments: 366 2 673
Goodwill impairment 3 239 328
Reversal of impairment relating to
consolidation of Zimbabwe (8 015) -
Revaluation of aircraft below
original cost 4 437 264
Net loss on disposal of property,
plant and equipment 705 2 081
Tax effect on the above (345) (325)
Non-controlling interest portion (324) -
Headline earnings/(loss) 47 220 (293)
COMMENTARY
The directors are pleased to report the maiden results of the Wilderness group
as a listed entity for the year ended 28 February 2010.
The group performed well in the climate prevailing as the result of the global
financial crisis, where travel spend became discretionary. While occupancies
were lower and yields negatively impacted on, the group acted to both lower the
operating cost of the businesses and increase its market share.
In the last six months of the year, Rand strength had a negative impact on gross
revenues, resulting in a slightly lower than expected performance on the revenue
line. The impact of reduced demand was exacerbated by this Rand and Pula
strength against the group`s main source currencies (approximately 55% of group
revenue is booked in US Dollars). This resulted in P868 million revenue for the
year, 12% below that reported for the prior year.
Without compromising on the guest experience or facility maintenance, the
business was able to achieve a 4% increase in gross profit percentage year-on-
year. Furthermore, Wilderness reduced its normalised fixed cost base by 13%.
This was considered a significant target as the directors believe that this
period of low demand will continue in the short-term, albeit with gradual
improvement.
As reported in the IPO prospectus issued on 26 February 2010, included in the
operating expenses for the year is a once-off cost relating to the re-purchase
of preference share rights amounting to P19 million from related parties. Also
influencing the results for the year is the revaluation of the aircraft that are
owned by the group where reduced international asset values and the depreciation
of the US Dollar resulted in a charge to the profit or loss in the statement of
comprehensive income of P4.4 million (2009: P0.3 million) as the values of the
aircraft reduced below their original cost. A further revaluation loss of P35.9
million, compared with a gain of P18.1 million in 2009, was recorded directly to
other comprehensive income.
The net result was that EBITDA for the year was P115 million, which is 9% higher
than what was achieved in 2009.
Net finance costs amounted to P6.5 million which represents a reduction of 13%
against the prior year. In addition, the continued strength of the Pula and the
Rand against the US Dollar led to the group recognising unrealised gains on its
US Dollar denominated loans amounting to P24 million. This compares with the
unrealised loss of P32 million in 2009 resulting from the significant
depreciation of the Rand that occurred in November 2008. It must be noted that
while the income statement came under pressure from Rand strength, the balance
sheet strengthened as the result of foreign currency denominated debt being
revalued.
The group`s effective rate of tax for the year was 44%. This rate is the result
of a number of compensating factors most importantly the non-recognition of P8.9
million of deferred tax assets, higher standard tax rates in Namibia (35%).
The group`s profit after tax amounted to P48 million which is a creditable
performance given the economic conditions. The profit attributable to the two
holding companies which is included in this pro-forma group profit was P33
million and R10 million for Wilderness Holdings Limited and Wilderness Safaris
Investment and Finance (Pty) Ltd, respectively. The group reported EPS of 20.57
thebe and HEPS of 20.44 thebe for the year.
The group generated P131 million of cash from operations during the year and as
a result the net cash position improved from P39 million to P64 million.
The results for 28 February 2010 as reported are substantially in line with the
profit forecast included in the IPO prospectus prepared in February 2010, the
difference being attributable to the continued strength of the Pula and the
Rand.
Dividend
No dividend has been declared for the year ended 28 February 2010, as the group
was only listed on 8 April 2010 and raised primary capital from investors on its
IPO. It is the directors` intention to institute a dividend policy that will be
reviewed from time to time in the light of prevailing business circumstances,
investment decisions to be taken, working capital requirements and available
cash, while maintaining an appropriate dividend cover of between two and three
times net profit after tax.
Subsequent events
The company was listed on the Botswana Stock Exchange, with a secondary inward
listing on the Africa board of JSE Limited, on 8 April 2010. 31 million shares
were issued to the public and the net cash proceeds resulting from subscriptions
and after restructuring and listing costs was just under P7 million.
Subsequent to the year end the company disposed of the assets of Duba Plains
camp in Botswana and proceeds amounting to US$4.5 million (P33 million) were
received in May 2010. In terms of the sale agreement, the camp will continue to
be marketed by the group. In terms of IFRS 5 this business unit has been
reported as a discontinuing operation and as non-current assets and liabilities
held for sale in the above results.
The company has also announced that it has concluded an agreement to dispose of
North Island in the Seychelles which is accounted for as an associate in the
above results. The transaction is subject to a number of conditions precedent
which remain subject to completion.
Directors
On 31 March 2010 and subsequent to year end, Karen Mitchley resigned as a
director of the company. Following this, Derek de la Harpe was appointed as
director and chief financial officer with effect from 8 April 2010. On the same
date, Michael Ness resigned and Jochen Zeitz and Robert Polet were both
appointed as non-executive directors.
Capital commitments and contingencies
The group has committed to develop certain camps and properties in the year
ahead to increase bed capacity. This is expected to cost in the region of P41
million of which P17.5 million (2009: P12 million) was committed at the year
end.
Basis of preparation
As outlined above, the listing of the company and the restructuring of the group
occurred on 8 April 2010. Therefore, at 28 February 2010 two parallel holding
companies existed and these were unlisted entities. The unaudited pro forma
consolidated financial results presented above have been prepared for
illustrative purposes. The pro forma results have been prepared in accordance
with the company`s accounting policies and the underlying financial information
used in their compilation is in compliance with International Financial
Reporting Standards and consistent with the accounting policies applied in the
prior year. The information utilised in the preparation of these pro forma
accounts was extracted from reviewed financial information which has been
prepared in accordance with IAS 34 - Interim Financial Reporting.
The pro forma information has been prepared to provide an illustration of the
group`s financial performance for the year ended 28 February 2010 and should be
reviewed in conjunction with the independent reporting accountants` report
thereon. The pro-forma consolidation assumes that the listing and restructuring
occurred on 1 March 2009.
The reporting accountants` report, issued by Deloitte and Touche, is available
for inspection at the company`s registered offices.
Prospects and outlook
The tentative upturn in the world economy has resulted in an improvement in
market conditions and we expect occupancies in 2010/11 to be better than those
in the year under review. Nonetheless, the market remains soft.
In the profit forecast for February 2011 included in the IPO prospectus, we
projected revenue growth of 17%. As set out in the assumptions to the profit
forecast, this projection assumed an average depreciation, over the 12 month
period, of 5% and 8% of the Pula and Rand against the US Dollar, respectively.
Volatility in currency markets makes it difficult to predict the outcome of this
assumption at the present time.
The focus of the group for the coming year is to achieve financial growth
through increasing market share and investing in marketing and operating scale
opportunities. Wilderness, with its strong balance sheet and competitive
offering, is well placed to capitalise on a rebound in markets when that occurs.
On behalf of the board
M McCulloch A Payne
Chairman Chief Executive
31 May 2010
Gaborone
WILDERNESS HOLDINGS LIMITED
Share code: WIL
ISIN: BW0000000868
Registration number: 2004/2986
Registered office: Plot 1 Mathiba Road, Maun, Botswana
External company registration number: 2009/022894/10
Registered office: 373 Rivonia Boulevard, Rivonia, South Africa
BSE Sponsor: Capital Securities (a member of the Botswana Stock Exchange)
JSE Sponsor: Rand Merchant Bank (a division of FirstRand Bank Limited)
Transfer Secretaries: CorpServe Botswana
Directors: M McCulloch (Chairman), A Payne (CEO), D de la Harpe (CFO), R
Friedman, J Gnodde, R Hartmann, J Hunt, R Marnitz, R Polet, P Tafa, G Tollman, M
Tollman, M ter Haar, D van Smeerdijk, K Vincent and J Zeitz.
Company secretary: Desert Secretarial Services (Pty) Ltd and Julia Swanepoel
Website: www.wilderness-group.com
Date: 31/05/2010 11:40:02 Produced by the JSE SENS Department.
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