| Fri 1 Oct 2010, 11:53 | | IFH - IFA Hotels & Resorts Limited - Audited abridged results for the year ended |
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IFH
IFH
IFH - IFA Hotels & Resorts Limited - Audited abridged results for the year ended
30 June 2010
IFA HOTELS & RESORTS LIMITED
("IFA SA" or "the company" or "the group")
Registration number 1919/001318/06
Share code: IFH ISIN: ZAE000075669
AUDITED ABRIDGED RESULTS FOR THE YEAR ENDED 30 JUNE 2010
ABRIDGED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
30 June 2010 30 June 2009
Audited Audited
R`000 R`000
Revenue 78,887 82,747
Operating profit/(loss) (22,429) (18,253)
Investment revenue 32,511 43,493
Finance costs (57,115) (60,790)
Loss from equity-accounted investments (14,396) (16,259)
Loss before taxation (61,429) (51,809)
Taxation (6,869) 13,704
Loss for the year (68,298) (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 year (68,298) (36,559)
Loss attributable to:
Equity holders of the parent (68,298) (38,105)
Total comprehensive income attributable to:
Equity holders of the parent (68,298) (36,559)
Basic and diluted basic earnings per share
(cents)("EPS") (31.24) (17.46)
Basic and diluted basic headline earnings per
share (cents) ("HEPS") (note 1) (26.59) (17.55)
ABRIDGED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 2010 30 June 2009
Audited Audited
R`000 R`000
ASSETS
Non-current assets 644,124 604,376
Property, plant and equipment 178,677 180,492
Goodwill 2,298 2,298
Investments in joint venture 16,605 22,946
Investment in associates 19,547 37,590
Loans to associates 410,224 336,635
Other financial assets 3,400 3,900
Deferred tax 13,373 20,515
Current assets 243,459 270,621
Inventories 1,593 2,155
Other financial assets 28,136 8,642
Current tax receivable 26 -
Township properties 161,227 150,265
Trade and other receivables 32,659 45,904
Cash and cash equivalents 19,818 63,655
Total assets 887,583 874,997
EQUITY AND LIABILITIES
Capital and reserves 79,103 147,401
Issued share capital and share premium 71,892 71,892
Revaluation reserve 45,595 45,595
Accumulated (loss)/ profit (38,384) 29,914
Non-current liabilities 683,868 640,710
Loans from shareholders 389,475 350,155
Borrowings 251,691 253,248
Finance lease obligation 1,509 112
Deferred tax 11,081 10,010
Amount owing to joint venture 30,112 27,185
Current liabilities 124,612 86,886
Current tax payable 99 940
Finance lease obligation 403 33
Deferred revenue 11,152 16,346
Trade and other payables 69,780 68,292
Advance deposits 2,376 1,275
Other financial liabilities 39,421 -
Bank overdraft 1,381 -
Total equity and liabilities 887,583 874,997
Net asset value per share (cents) ("NAV") 36.25 67.55
Net tangible asset value per share (cents)("NTAV") 35.20 66.50
Number of shares in issue and used for NAV and
NTAV calculation 218,210,680 218,210,680
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Revaluation
capital premium reserve
R`000 R`000 R`000
Audited
Balance at 1 July 2008 2,182 69,710 44,049
Comprehensive income
- Profit or loss - - -
- Other comprehensive income - - 1,546
Total comprehensive income - - 1,546
Transaction with owners - - -
Total transactions with owners - - -
Balance at 30 June 2009 2,182 69,710 45,595
Balance at 1 July 2009 2,182 69,710 45,595
Comprehensive income
- Profit or loss - - -
- Other comprehensive income - - -
Total comprehensive income - - -
Transaction with owners - - -
Total transactions with owners - - -
Balance at 30 June 2010 2,182 69,710 45,595
Accumulated
profit/(loss) Total
R`000 R`000
Audited
Balance at 1 July 2008 68,019 183,960
Comprehensive income
- Profit or loss (38,105) (38,105)
- Other comprehensive income 1,546
Total comprehensive income (38,105) (36,559)
Transaction with owners - -
Total transactions with owners - -
Balance at 30 June 2009 29,914 147,401
Balance at 1 July 2009 29,914 147,401
Comprehensive income
- Profit or loss (68,298) (68,298)
- Other comprehensive income - -
Total comprehensive income (68,298) (68,298)
Transaction with owners - -
Total transactions with owners - -
Balance at 30 June 2010 (38,384) 79,103
ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS
30 June 2010 30 June 2009
Audited Audited
R`000 R`000
Cash flows from operating activities (28,144) (63,276)
Cash generated by operating activities (4,365) (41,463)
Interest received 32,064 42,970
Interest paid (56,319) (54,713)
Taxation paid 476 (10,070)
Cash flows from investing activities (98,158) (171,655)
Property, plant and equipment acquired (5,052) (19,134)
Proceeds of disposals of property, plant and
equipment 502 451
Investment in associates - (13,810)
Loans to associates (69,496) (142,409)
Loans to joint ventures (5,117) (14,544)
Loans advanced to group companies (19,495) (4,070)
Repayment of debentures 500 600
Loans paid by group companies - 21,261
Cash flows from financing activities 81,082 196,410
Loans raised 39,631 3,978
Loans raised from joint venturer 2,927 1,298
Shareholder`s loan raised 38,524 191,134
Total cash movement for the period (45,218) (38,521)
Cash at the beginning of the period 63,655 102,176
Total cash at end of the period 18,437 63,655
ABRIDGED OPERATING SEGMENTS
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 IFA Zimbali
Year ended Year ended
30 June 30 June
2010 2009 2010 2009
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue 21,338 22,908 34,186 34,801
EBITDA 9,760 4,955 (4,620) (8,316)
EBIT 9,297 4,526 (8,813) (13,435)
Net profit/(loss) 4,035 6,488 (21,889) (17,206)
Segment assets 207,370 214,417 127,286 127,983
IFA Boschendal IFA Estates
Year ended Year ended
30 June 30 June
2010 2009 2010 2009
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue - - 7,941 5,098
EBITDA 3,065 (16,355) 161 (600)
EBIT 3,065 (16,355) 104 (657)
Net profit/(loss) 2,720 (15,490) (1,861) (2,170)
Segment assets 151,931 102,787 21,219 11,215
IFA SA IFA Namibia
Year ended Year ended
30 June 30 June
2010 2009 2010 2009
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue 6,432 13,544 11,123 11,190
EBITDA (3,044) (241) (18,347) (6,136)
EBIT (3,598) (742) (19,423) (6,750)
Net profit/(loss) 819 3,994 (31,087) (8,275)
Segment assets 721,123 646,030 84,743 68,604
IFA Legends Zimbali Rentals
Year ended Year ended
30 June 30 June
2010 2009 2010 2009
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue - - 1,398 1,798
EBITDA (21,424) (6,205) 348 715
EBIT (21,424) (6,205) 323 694
Net profit/(loss) (21,281) (5,946) 248 500
Segment assets 279,215 271,968 1,610 3,172
Eliminations Consolidated
Year ended Year ended
30 June 30 June
2010 2009 2010 2009
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue (3,531) (6,592) 78,887 82,747
EBITDA 3,645 4,412 (30,456) (27,771)
EBIT 3,645 4,412 (36,824) (34,512)
Net profit/(loss) (2) - (68,298) (38,105)
Segment assets (706,914) (571,179) 887,583 874,997
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The accounting policies applied in the preparation of these audited abridged
consolidated results for the year ended 30 June 2010, 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 2009 except for IAS 1
and IFRS 8. The adoption of these standards had no material effect on the
results, nor has it required any restatement. These audited abridged results as
set out in this report have been prepared in accordance and containing the
information required by IAS 34 - Interim Financial Reporting, the Companies Act
of South Africa, as amended, and the Listings Requirements of JSE Limited.
These audited abridged results have been prepared in accordance with the
historic cost basis, except for the measurement of revaluation of land and
buildings which are stated at fair value.
The financial results are presented in Rand, which is IFA Hotels & Resorts
Limited functional and presentation currency.
Estimates
The financial statements do not include any material estimates.
Auditors` report
The audited financial results for the year ended 30 June 2010 set out above have
been extracted from the Group`s annual financial statements which have been
audited by BDO South Africa Inc. A copy of the unmodified audit opinion on the
consolidated annual financial statements and on the audited abridged
consolidated results is available for inspection at the Company`s registered
offices.
Annual general meeting
The annual general meeting of IFA Hotels & Resorts Limited will be held at
Zimbali Northgate Suites on Monday, 25 October 2010 at 10:00.
NOTES TO THE FINANCIAL RESULTS Audited Audited
Year ended Year ended
30 June 2010 30 June 2009
R`000 R`000
1. Basic and diluted basic earnings and headline
earnings per ordinary share
The earnings and weighted average number of
ordinary shares used in the calculation of basic
and diluted basic earnings and headline earnings
per ordinary share are as follows:
Headline and diluted headline loss per share
(HEPS) (cents) (26.59) (17.55)
Reconciliation between earnings and headline
earnings
(Loss)/earnings attributable to ordinary
shareholders (68,298) (38,105)
Less: (profit)/loss on disposal of property,
plant and equipment (4) (257)
Add tax effect 1 72
Add impairment of property, plant and equipment 9,362 -
Add tax effect (2,621) -
Add impairment of goodwill - share of associate 3,540 -
Headline (loss)/earnings (58,020) (38,290)
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 10,923 22,233
Approved but not contracted - 30,400
10,923 52,633
3. Operating lease commitments 196 328
4. Investments and loans
Investment in associate companies 19,547 37,590
Loans to associate companies 410,224 336,635
Other unlisted investments 3,400 3,900
433,171 378,125
Directors` valuation of unlisted investments
- unlisted associate companies 429,771 374,225
- other unlisted investments 3,400 3,900
433,171 378,125
5. Related party transactions
During the year 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
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 (Pty) Ltd 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 materially affect the
financial position of the group or the results of its operations.
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 inventory situated in Zimbali. IFA
Estates is also appointed as the sales and marketing agent of Legends.
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 also intends to develop a
fourth site in Windhoek into a five-star hotel. Five-star international
hotelier, Kempinski Hotels, the oldest European hotelier, was introduced to
Namibia to operate Kempinski Mokuti Lodge. 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 ultimately 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 - This operation has achieved a satisfactory profit, assisted by
commission income from robust resale activity within the Zimbali Coastal Resort.
We expect improvements to the results as our new project, the Zimbali Lakes
Resort, has been boosted by the FIFA 2010 World Cup, the opening of the new King
Shaka International Airport as well as the opening of the Fairmont Zimbali Hotel
& Resort.
In anticipation of accelerated demand arising out of the new airport and the
recovery of the economy, preliminary planning has commenced on the c.700 Ha
Westbrook landholdings, located south of Zimbali between the Tongaat River and
the Watson Highway.
IFA Zimbali - The Fairmont Zimbali Lodge managed to maintain turnover levels
during the difficult trading period. The full benefit of Fairmont`s management
of this Hotel is still to be realized.
IFA Estates - Sales of Fairmont Heritage Place Zimbali units grew significantly
over the past year resulting in an increase in commission revenue from R5
million to R7,9 million, and the posting of a small positive EBITDA to the
group.
Future sales expected at Fairmont Zimbali and Legends should impact positively
on commission earnings.
IFA Boschendal - Limited sales activity has contributed to a small profit for
the period under review. Sales of phase 1, Founder Estates, are expected to
improve with the provision of related service infrastructure to this phase of
the development. The long term profitability of Boschendal is dependent to a
large degree on obtaining development rights for the second phase of
development, which continues to be a challenge.
We have experienced delays in the acquisition of a further 5.25% in Boschendal
(Pty) Ltd; but we are pleased to report that this matter is close to being
finalised.
IFA Namibia - Despite maintaining turnover levels, delays in completing
developments and the need for provisions to recognise the impact of the economic
downturn on the market value of the operations assets, resulted in a significant
increase in the loss.
IFA Legends - Our share of the increased losses from Legends is mainly
attributable to provisions which recognise the delayed recovery of the property
market. Progress towards profitability is expected with the completion of the
first phase of the Legends Golf and Safari Resort which combines 180 luxury
rooms with the signature golf course and Big 5 game experience.
Zimbali Rentals - Expectations for revenue from the FIFA 2010 World Cup
unfortunately did not materialize. Furthermore, the current economic climate has
resulted in a decline in holiday letting. This business unit has nevertheless
contributed a profit of R0,25 million to the group for the period. Profitability
will improve as the market recovers.
PROSPECTS
We have laid solid foundations for sustained and accelerated growth and remain
confident that we will reach our performance targets, so enhancing shareholder
value.
DIVIDEND
No dividend has been declared for the period.
DIRECTORATE
Mr Michael Burns Neilson resigned as the company`s financial director on 24 June
2010. The board appointed Mr Wessel Pretorius Witthuhn as an executive director,
effective 27 May 2010.
APPRECIATION
The directors would like to thank the shareholders, customers and suppliers for
their continued invaluable support, as well as the staff and management for
their hard work and dedication during the year.
For and behalf of the board
TJM Al-Bahar WJ Burger
Chairman Chief Executive Officer
01 October 2010
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*, WP Witthuhn
*non-executive
Registered office
Zimbali Northgate Suites, Zimbali Coastal Resort, KwaZulu-Natal
Company secretary
CJ Schutte CA (SA)
Transfer secretaries
Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg
Sponsor
QuestCo Sponsors (Pty) Limited
Date: 01/10/2010 11:53:14 Produced by the JSE SENS Department.
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