| Tue 2 Nov 2010, 9:30 | | WIL - Wilderness Holdings Limited - Unaudited consolidated interim results for |
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WIL
WIL
WIL - Wilderness Holdings Limited - Unaudited consolidated interim results for
the six months ended 31 August 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
External company registration number: 2009/022894/10
Share code: WIL
ISIN: BW0000000868
("Wilderness", "the company" or "the group")
UNAUDITED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2010
* Operating profits in line with prior year
* Strong cash generation of P97 million over the six month period resulting
in a net cash balance of P161 million at31 August 2010
* Increases in turnover recorded in all major source currencies
* Bednight sales in line with prior year
* Turnover translated into Pula depressed by adverse exchange rate movements
but in line with prior year
* Gross margins maintained at prior period levels
SALIENT FINANCIAL FEATURES
Unaudited Unaudited Unaudited
six months six months year
ended ended ended
BWP`000 31 Aug 10 31 Aug 09 28 Feb 10
Headline earnings 29 381 88 181 47 220
Number of shares (thousands)
Issued 231 000 300 200 000
Weighted average 225 833 199 950 199 950
Diluted weighted
average 225 833 199 950 199 950
Earnings per share (Thebe)
Basic and diluted 21.83 40.30 23.77
Headline earnings per
share (Thebe)
Basic and diluted 13.01 44.10 23.62
GROUP STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Unaudited
six months six months year
ended ended ended
BWP`000 31 Aug 10 Change 31 Aug 09 28 Feb 10
Revenue 574 240 5% 546 499 871 986
Cost of sales (329 865) (308 059) (448 222)
Gross profit 244 375 2% 238 440 423 764
Other operating
income 35 504 1 820 3 688
Operating
expenses (184 068) (139 491) (320 005)
Foreign exchange
gains/(losses) 3 445 (826) 7 781
Operating profit
before depreciation,
amortisation and
goodwill impairment
("EBITDA") 99 256 (1%) 99 943 115 228
Depreciation and
amortisation (25 021) (25 600) (50 569)
Goodwill
impairment (1 468) (3 239) (3 239)
Operating profit 72 767 2% 71 104 61 420
Net finance costs (3 631) (4 053) (6 521)
Unrealised foreign
exchange gain on
loans 3 105 31 647 24 124
Share of equity
accounted investment
(losses)/earnings (2 731) 3 969 2 521
Profit before
taxation 69 510 (32%) 102 667 81 544
Taxation (21 836) (21 393) (35 223)
Profit for the
period from
continuing
operations 47 674 81 274 46 321
(Loss)/profit for
the period from
discontinuing
operations (132) 983 1 701
Profit for the
period 47 542 82 257 48 022
Other comprehensive
loss: (1 293) (24 294) (23 996)
Reduction in value
of property, plant
and equipment (1 692) (33 107) (35 038)
Tax effect of
reduction in value
of property, plant
and equipment 399 8 813 11 042
Total comprehensive
income for the
period 46 249 57 963 24 026
Profit/(loss) for
the period
attributable to:
Owners of the
company 49 296 80 575 47 523
Non-controlling
interest (1 754) 1 682 499
47 542 82 257 48 022
Total comprehensive
income/(loss) for
the period
attributable to:
Owners of the
company 48 003 56 281 23 527
Non-controlling
interest (1 754) 1 682 499
46 249 57 963 24 026
GROUP STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited
six months year
ended ended
BWP`000 31 Aug 10 28 Feb 10
ASSETS
Non-current assets 462 945 458 309
Property, plant and equipment 358 788 356 559
Goodwill 38 173 37 937
Investment in associates 49 077 49 731
Other receivables 1 606 949
Deferred tax assets 15 301 13 133
Current assets 310 240 209 325
Inventories 18 214 15 542
Trade and other receivables 98 611 91 308
Taxation 9 647 8 537
Cash and cash equivalents 183 768 93 938
Assets of disposal group classified
as held for sale - 1 197
Total assets 773 185 668 831
EQUITY AND LIABILITIES
Ordinary shareholders` funds 292 322 239 556
Non-controlling interest (6 097) (4 518)
Total equity 286 225 235 038
Long-term liabilities and payables 112 337 131 449
Deferred tax liabilities 24 195 22 736
Current liabilities 350 428 279 602
Trade and other payables 314 431 246 559
Taxation 12 868 3 028
Bank overdrafts 23 129 30 015
Liabilities of disposal group
classified as held for sale - 6
Total equity and liabilities 773 185 668 831
Net asset value per share (thebe) 127 120
Net tangible asset value per share
(thebe) 110 101
ABRIDGED GROUP STATEMENT OF CASH FLOW
Unaudited Unaudited Unaudited
six months six months year
ended ended ended
BWP`000 31 Aug 10 31 Aug 09 28 Feb 10
EBITDA 99 256 99 943 115 228
(Loss)/profit from
discontinuing operations (132) 983 1 701
(Profit)/loss on disposal
of property, plant and
equipment and business
operations (33 689) (1 269) 705
Revaluation of aircraft
below original cost 2 407 7 130 4 437
Other non-cash items 1 276 (4 609) 13 404
Cash generated before
working capital changes 69 118 102 178 135 475
Working capital changes 44 234 35 171 (4 475)
Cash generated from
operations 113 352 137 349 131 000
Net finance costs paid (3 631) (4 053) (6 521)
Taxation paid (13 500) (17 757) (29 340)
Net cash inflow from
operating activities 96 221 115 539 95 139
Net cash outflow from
investing activities (105 477) (13 910) (43 131)
Net cash inflow/(outflow)
from financing
activities 105 972 (25 388) (26 810)
Increase in cash and
cash equivalents 96 716 76 241 25 198
Cash and cash
equivalents at
beginning of year 63 923 38 725 38 725
Cash and cash
Equivalents at end of
period* 160 639 114 966 63 923
* Comprises cash resources, net of bank overdrafts and trade finance
advances.
ABRIDGED STATEMENT OF CHANGES IN TOTAL EQUITY
Unaudited Unaudited
six months year
ended ended
BWP`000 31 Aug 10 28 Feb 10
Balance at beginning of year 235 038 225 422
Exchange difference arising on
conversion of foreign subsidiaries 855 3 315
Revaluation of property, plant and
equipment (1 692) (35 038)
Deferred tax effect of revaluation 399 11 042
Transfer of shareholders` loans to
short-term payables - (12 017)
Total profit for the period 49 296 47 523
Minority interest arising on
business combination - (2 868)
Minority portion of dividend paid (79) (2 840)
Non-controlling interest (1 754) 499
Share issue 124 000 -
Listing expenses (16 358) -
Common control business combination
reserve (103 480) -
Balance at end of period 286 225 235 038
SEGMENTAL ANALYSIS
Unaudited Unaudited Unaudited
six months six months year
ended ended ended
BWP`000 31 Aug 10 31 Aug 09 28 Feb 10
Revenue
Safari consulting 534 287 517 181 838 343
Camp, lodge and
safari explorations 162 457 138 937 295 006
Transfer and touring 98 477 82 006 149 380
Finance and asset
management 24 875 22 792 44 352
Intergroup (245 856) (214 417) (455 095)
574 240 546 499 871 986
Total assets
Safari consulting 255 520 231 405 213 558
Camp, lodge and
safari explorations 404 584 365 995 440 122
Transfer and touring 97 397 91 511 80 910
Finance and asset
management 568 305 415 874 406 462
Intergroup (552 621) (351 981) (472 221)
773 185 752 804 668 831
Reportable segment
income/(loss) before tax
Safari consulting 21 616 32 877 24 139
Camp, lodge and
safari explorations 24 784 23 555 22 153
Transfer and touring 5 435 7 597 (175)
Finance and asset
management 16 619 34 669 28 846
68 454 98 698 74 963
Net items unallocated
to a segment 1 056 3 969 6 581
Total profit before tax 69 510 102 667 81 544
DETERMINATION OF HEADLINE EARNINGS
Unaudited Unaudited Unaudited
six months six months year
ended ended ended
BWP`000 31 Aug 10 31 Aug 09 28 Feb 10
Profit attributable
to owners of the
company 49 296 80 575 47 523
Headline earnings
adjustments: (24 647) 9 100 366
Goodwill impairment 1 468 3 239 3 239
Net impairment losses/
(reversals) 5 167 - (8 015)
Reduction in value of
aircraft below original
cost 2 407 7 130 4 437
Net (profit)/loss on
disposal of property,
plant and equipment
and business operations (33 689) (1 269) 705
Tax effect 4 719 (1 494) (345)
Non-controlling interest 13 - (324)
Headline earnings 29 381 88 181 47 220
COMMENTARY
The directors are pleased to report the results of the Wilderness group for
the six months ended 31 August 2010.
With the slow recovery in the world economy has come a slight increase in
demand for the group`s products. However, trading conditions remain
challenging in view of continued negative market sentiment. These soft trading
conditions have been exacerbated by the following factors:
* The Rand and Pula have strengthened against the US Dollar by 13% and 4%
respectively. This has had the effect of, firstly, reducing demand for Rand
(and Namibian Dollar) priced products and, secondly, reducing margins on US
Dollar priced products;
* The FIFA Soccer World Cup depressed demand for our products as our
traditional client base avoided the region over that period or stayed at home
to watch the tournament. We estimate the impact of this to be approximately 4
000 bednights or 5% of our total bednight sales to date;
* The poor state of the European economies in particular has dampened demand
for products selling to those markets and this has been most pronounced in our
Namibian operation.
Against this background it is pleasing to record that bednight sales have been
on a par with those achieved in the comparable period in the prior year. Our
infancy products (particularly our operations in Zimbabwe and Zambia) have
performed well, partly offsetting reduced sales in Namibia, although off a low
base and with lower profit margins.
Downward pressure on rates has continued and it is therefore gratifying to
note that most regions have shown increases in US Dollar yields.
The net result of these factors is that turnover has increased in all our
major source currencies. Unfortunately, much of the benefit of this has been
offset, or even reversed, by currency appreciation particularly in the case of
the Rand against the Pula which has appreciated by 10% over the period. Group
turnover therefore increased by 5% to P574 million, from P546 million for the
comparable period. This increase includes P22 million turnover achieved in
Zimbabwe which was not consolidated in the comparable period.
Gross margins have been under pressure as the result of the currency
fluctuations noted above. Nonetheless, strong control of costs by operations
has resulted in variable expenses being maintained at similar levels to those
in the previous year, with the result that the group has achieved comparable
gross margins of P244 million or 42.6% of turnover (2009: 43.6%).
Operating costs are up P44 million (32%) on the comparable period. The
strengthening of the Rand against the Pula accounts for an estimated P10
million (7%) of this increase. In addition, two new businesses are now
consolidated into these results for the first time and these have the effect
of increasing fixed costs by P6 million (4%). The most significant other
increases in fixed costs have been staff expenses (7%) and repairs and
maintenance (4%). The latter has been exacerbated by maintenance costs
associated with the record-level floods in the Okavango delta this season. It
is also recorded that costs associated with the stock market listings on the
Botswana Stock Exchange and JSE Limited, as well as increased governance and
compliance costs, have been incurred in this period.
Other operating income amounted to P36 million, being the proceeds of an
insurance claim on a damaged aircraft, as well as the capital profit on the
Duba Plains transaction as previously announced on 16 August 2010. Operating
profits therefore amounted to P99 million which is in line with the P100
million achieved in the comparable period.
Given the marginal strengthening of the Pula against the US Dollar over the
period, unrealised foreign exchange gains on the group`s US Dollar denominated
loans reduced to P3 million from P32 million in the comparable period.
Taxes payable of P22 million are in line with those of 2009, but are
substantially higher in effective rate terms (31% effective rate against an
effective rate of 21% in the comparable period), largely due to the reduced
unrealised foreign exchange gains on loans. Profit after tax for the half
year therefore amounted to P48 million, reduced from P81 million in the
previous year. EPS and HEPS were 21.83 and 13.01 thebe respectively, down
from 40.30 and 44.10 thebe respectively, in the comparable period. The main
reconciling item between the two is the capital profits referred to above.
The after tax charges to profit and loss and other comprehensive income
arising on the reduction in value of aircraft were P1.7 million (2009: P5.6
million) and P1.3 million (2009: P24 million), respectively. As a result,
total comprehensive income for the half year was P46 million, compared with
P58 million in 2009.
The group generated P97 million in cash during the period, with the result
that the net cash position improved from P64 million at 1 March to P161
million at 31 August. The balance sheet has therefore been strengthened
considerably.
Listing
The company was listed on the Botswana Stock Exchange with a secondary listing
on the Africa Board of the JSE Limited on 8 April 2010. 31 million shares
were issued to the public and the net cash proceeds resulting from
subscriptions, after restructuring and listing costs, were just under P7
million.
Dividend
As was stated in the prospectus issued prior to the group listing, due to the
annual cash flow cycle of the business, an interim dividend has not been
declared. It is anticipated that, in the event that a dividend is declared,
this will be in the form of a final dividend declared in May each year.
Subject to the operating results, financial position, investment strategy,
capital requirements and other factors, Wilderness group has adopted a
dividend policy of maintaining a dividend cover of between two and three times
net profit after tax.
Subsequent events
In April 2010, the shareholders of an associated company of the group, Norisco
Holdings S.A., in which the group holds 20% of the equity, reached agreement
to dispose of its wholly-owned subsidiary North Island Company Limited. The
final formalities and conditions precedent to this transaction were completed
on 26 October 2010 and the details were reported in a circular dated 29
October 2010. As recorded in that circular, the Wilderness group`s share of
the profit on disposal of that associate is approximately P93 million. The
proceeds of this disposal are expected to be received in the form of a
dividend amounting to approximately US$9.5 million (P63 million), as well as
repayment of shareholder`s loans in the sum of P30 million, thus further
improving the group`s cash reserves and balance sheet.
Capital commitments and contingencies
The group has committed P23 million (2009: P12 million) to develop and
refurbish certain camps and properties in the period ahead to maintain
standards and increase bed capacity.
Included in the above results is an amount of P29.5 million, being the capital
profit before tax arising on the Duba Plains transaction. As announced on 16
August 2010, the underlying transaction has been concluded and full payment
has been received by the group. This transaction is subject to certain
regulatory approvals which have not yet been received. As at the date of this
report, the directors are confident that the remaining resolutive condition
will be fulfilled. Accordingly, the capital profit has been brought to
account and the amount is recorded as a contingent liability until such time
as all necessary regulatory approvals have formally been obtained.
Basis of preparation
The acquisition of Wilderness Safaris Investment and Finance (Pty) Ltd (WSIF),
which occurred on listing on 8 April 2010, has been accounted for using merger
accounting. This treatment was adopted because of the fact that Wilderness
Holdings Limited and WSIF were `common control entities` prior to and
subsequent to the listing and acquisition. The financial statements presented
in this announcement have been prepared as if Wilderness Holdings Limited and
WSIF have always been one group. Adoption of this method has resulted in a
debit of P103 million to the common control reserve on the balance sheet.
Prospects and outlook
Traditionally the group earns between 55% and 65% of its revenue in the first
six months of the year. Our booking sheets for the remainder of the year
suggest that we can expect a slow recovery in occupancies, except in Namibia.
We expect market conditions to remain challenging in the short to medium term
with continued downward pressure on yields. These could be exacerbated if the
exchange rates for our key currency crosses strengthen further.
In such conditions the group will continue with its focus on building
organisational capacity with a particular emphasis on investment in our
people, our brands, and service.
On behalf of the board
M McCulloch A Payne
Chairman Chief Executive
2 November 2010
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
Date: 02/11/2010 09:30:01 Produced by the JSE SENS Department.
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