| Wed 30 Mar 2011, 16:45 | | IFH - IFA Hotels & Resorts Limited - Condensed consolidated results for the six |
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IFH
IFH
IFH - IFA Hotels & Resorts Limited - Condensed consolidated results for the six
months ended 31 December 2010
IFA HOTELS & RESORTS LIMITED
("IFA SA Group" or "the group")
Registration number 1919/001318/06
Share code: IFH ISIN: ZAE000075669
CONDENSED CONSOLIDATED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2010
CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
31 December 31 December 30 June
2010 2009 2010
Audited Audited Audited
R`000 R`000 R`000
ASSETS
Non-current assets 572 207 648 293 644 124
Property, plant and equipment 112 286 179 703 178 677
Goodwill 2 298 2 298 2 298
Investments in joint ventures - 26 839 16 605
Investment in associates 11 400 26 275 19 547
Loans to associates 421 359 389 470 410 224
Financial assets 10 114 3 600 3 400
Deferred tax 14 750 20 108 13 373
Current assets 265 472 251 148 243 459
Inventories 1 252 2 497 1 593
Financial assets 61 819 20 426 28 136
Current tax receivable 6 - 26
Township properties 154 218 161 625 161 227
Trade and other receivables 26 752 39 699 32 659
Cash and cash equivalents 21 425 26 901 19 818
Total assets 837 679 899 441 887 583
EQUITY AND LIABILITIES
Capital and reserves 83 516 124 683 79 103
Issued share capital and share premium 71 892 71 892 71 892
Revaluation reserve 45 595 45 595 45 595
Accumulated profit/(loss) (33 971) 7 196 (38 384)
Non-current liabilities 622 342 667 586 683 868
Loans from shareholders 374 370 374 636 389 475
Borrowings 231 799 252 489 251 691
Finance lease obligation 370 1 145 1 509
Deferred tax 15 803 12 042 11 081
Amount owing to joint venture - 27 274 30 112
Current liabilities 131 820 107 172 124 612
Current tax payable 269 305 99
Finance lease obligation 167 32 403
Deferred revenue 578 9 544 11 152
Trade and other payables 60 723 66 620 69 780
Advance deposits 1 220 1 193 2 376
Financial liabilities 68 207 29 478 39 421
Bank overdraft 656 - 1 381
Total equity and liabilities 837 679 899 441 887 583
Net asset value per share (cents)
("NAV") 38,27 57,14 36,25
Net tangible asset value per share
(cents) ("NTAV") 37,22 56,09 35,20
Number of shares in issue and used
for NAV and NTAV calculation 218 210 680 218 210 680 218 210 680
CONDENSED CONSOLIDATED
STATEMENT OF COMPREHENSIVE INCOME
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2010 2009 2010
Audited Audited Audited
R`000 R`000 R`000
Revenue 44 465 45 906 78 887
Operating profit/(loss) 8 374 1 779 (22 428)
Investment revenue 28 794 14 248 32 510
Finance costs (12 747) (28 233) (57 115)
Loss from equity-accounted
investments (16 810) (8 740) (14 396)
Profit/(loss) before taxation 7 611 (20 946) (61 429)
Taxation (3 198) (1 772) (6 869)
Profit/(loss) for the period 4 413 (22 718) (68 298)
Other comprehensive income
Gains on property revaluation - - -
Income tax relating to components of
other comprehensive income - - -
Other comprehensive income for the
period, net of tax - - -
Total comprehensive income/(loss)
for the period 4 413 (22 718) (68 298)
Profit/(loss) attributable to:
Equity holders of the parent 4 413 (22 718) (68 298)
Total comprehensive income/(loss)
attributable to:
Equity holders of the parent 4 413 (22 718) (68 298)
Basic and diluted earnings
per share (cents) ("EPS") 2,02 (10,41) (31,24)
Notes to the income statement
Basic and diluted headline loss
per share (cents) ("HEPS") (note 1) (3,10) (10,41) (26,59)
SEGMENTAL ANALYSIS
The group 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
Six months ended Six months ended
31 December 31 December
2010 2009 2010 2009
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue from
external customers 14 541 15 744 17 276 15 834
Intersegment revenue - - - -
EBITDA 476 10 284 (2 011) (2 560)
EBIT 249 10 054 (3 576) (4 945)
Net profit/(loss) (1 017) 5 941 1 630 (12 765)
Segment assets 193 325 215 497 126 527 128 113
IFA Boschendal IFA Estates
Six months ended Six months ended
31 December 31 December
2010 2009 2010 2009
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue from
external customers - - 3 664 4 943
Intersegment revenue - - - -
EBITDA (337) (5 257) (292) 908
EBIT (18 108) (5 257) (317) 880
Net profit/(loss) (18 392) (5 180) (1 410) (268)
Segment assets 150 939 137 404 25 035 16 965
IFA SA IFA Namibia
Six months ended Six months ended
31 December 31 December
2010 2009 2010 2009
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue from
external customers 1 548 1 858 6 727 6 591
Intersegment revenue 2 123 2 264 - -
EBITDA (35 834) (653) 14 943 (2 312)
EBIT (36 121) (916) 14 409 (2 765)
Net profit/(loss) (20 847) 1 943 10 289 (5 771)
Segment assets 710 039 698 159 39 084 101 526
IFA Legends Zimbali Rentals
Six months ended Six months ended
31 December 31 December
2010 2009 2010 2009
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue from
external customers - - 709 936
Intersegment revenue - - - -
EBITDA (397) (6 987) 135 416
EBIT (397) (6 987) 122 403
Net profit/(loss) (286) (6 906) 104 290
Segment assets 283 245 279 094 3 823 4 652
Eliminations Consolidated
Six months ended Six months ended
31 December 31 December
2010 2009 2010 2009
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue from
external customers - - 44 465 45 906
Intersegment revenue (2 123) (2 264) - -
EBITDA 34 342 2 572 11 025 (3 589)
EBIT 35 303 2 572 (8 436) (6 961)
Net profit/(loss) 34 342 (2) 4 413 (22 718)
Segment assets (694 338) (681 969) 837 679 899 441
CONDENSED CONSOLIDATED
CASH FLOW STATEMENT
31 December 31 December 30 June
2010 2009 2010
Audited Audited Audited
R`000 R`000 R`000
Cash flows from operating activities 5 286 (20 136) (28 144)
Cash generated by operating activities 14 410 (8 903) (4 365)
Interest received 3 285 17 601 32 064
Interest paid (12 747) (27 864) (56 319)
Taxation paid 338 (970) 476
Cash flows from investing activities (20 426) (70 572) (98 157)
Expenditure to maintain operating capacity
Property, plant and equipment acquired (3 328) (4 255) (5 052)
Proceeds of disposals of property,
plant and equipment 67 068 1 673 502
Expenditure for expansion
Investment in associates (9 624) - -
Loans to associate and joint ventures (24 191) (56 506) (74 612)
Loans advanced to group companies (50 951) (11 784) (19 495)
Other investments 600 300 500
Cash flows from financing activities 17 472 53 954 81 083
Loans raised 28 786 30 601 42 559
Loans repaid (21 266) (760) -
Shareholders` loan raised 9 952 24 113 38 524
Total cash movement for the period 2 332 (36 754) (45 218)
Cash at the beginning of the period 18 437 63 655 63 655
Total cash at the end of the period 20 769 26 901 18 437
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed consolidated interim financial results as set out in this report
have been prepared in accordance with and containing the information required by
IAS 34; Interim Financial Reporting, the AC500 standards as issued by the
Accounting Practices Board, the Companies Act of South Africa and the JSE
Limited Listings Requirements ("JSE Listings Requirements").
These condensed consolidated financial results for the six months ended 31
December 2010 ("the period") have been audited by the group`s auditors, namely
BDO South Africa Incorporated, and have been prepared on the fair value and
going concern bases. The unqualified audit report is available for inspection at
IFA Hotels & Resorts Limited`s registered office.
The board acknowledges its responsibility for the preparation of the interim
condensed consolidated financial results in accordance with IAS 34, the South
African Companies Act and the JSE Listings Requirements.
The accounting policies applied conform with IFRS and are consistent with those
followed in the preparation of the annual financial statements for the year
ended 30 June 2010.
NOTES TO THE FINANCIAL RESULTS
Audited Audited
Six months Six months
ended ended
31 December 31 December
2010 2009
R`000 R`000
1. Basic and diluted earnings and headline earnings/(loss)
per ordinary share
The earnings/(loss) and weighted average number of
ordinary shares used in the calculation of basic
and diluted earnings/(loss) and headline earnings/(loss) per
ordinary share are as follows:
Headline and diluted headline loss per share
(HEPS) (cents) (3,10) (10,41)
Reconciliation of total earnings/(loss) to headline
(loss) attributable to equity holders of the parent.
Earnings attributable to ordinary shareholders 4 413 (22 718)
Less: Profit on disposal of joint venture (15 513) (1)
Tax effect of adjustments 4 344 -
Headline loss (6 756) (22 719)
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 1 902 10 703
Approved but not contracted - 30 400
1 902 41 103
3. Operating lease commitments 156 256
4. Investments and loans
Investment in associate companies 11 400 26 275
Loans to associate companies 421 359 389 470
Other unlisted investments 10 114 3 600
442 873 419 345
Directors` valuation of unlisted investments
- unlisted associate companies 432 759 415 745
- other unlisted investments 10 114 3 600
442 873 419 345
5. Related party transactions
During the six months ended, companies in the group 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 related party transactions and outstanding
balances are eliminated in preparation of the consolidated financial interim
results 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 significant matter or circumstance arising
since the end of the financial year, not otherwise dealt with in this report or
in the financial results, which materially affect the financial position of IFA
SA Group or the results of its operations to the date of this report.
CONDENSED CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY
Share Share Revaluation
capital premium reserve
Audited R`000 R`000 R`000
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
Balance at 1 July 2010 2 182 69 710 45 595
Total comprehensive income for the period - - -
Balance at 31 December 2010 2 182 69 710 45 595
Accumulated
profit/(loss) Total
Audited R`000 R`000
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
Balance at 1 July 2010 (38 384) 79 103
Total comprehensive income for the period 4 413 4 413
Balance at 31 December 2010 (33 971) 83 516
COMMENTS
IFA Hotels & Resorts KSCC ("IFA H&R Kuwait") holds the majority interest in IFA
Hotels & Resorts Limited with an 85% shareholding. IFA Hotels and Resorts
Limited owns:
IFA Hotels & Resorts (South Africa) (Pty) Limited ("IFA Hotels")
IFA Hotels and Tongaat Hulett Developments` joint venture ("TIFAZ") developed
the Zimbali Coastal Resort and recently launched the neighbouring Zimbali Lakes
Resort and Zimbali Office Estate developments. The development by IFA Zimbali
Hotel & Resorts (Pty) Limited ("IFA Resorts") of the new Gary Player signature
golf course has commenced, with the driving range and Gary Player Golf Academy
within Zimbali Lakes to commence in due course. The real estate opportunities
created around this new golf course provides further 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 37,33% stake, following the purchase of a further 5,25%,
in the Boschendal Estate ("Boschendal"). Boschendal is a 2 240 hectare property
near Franschhoek in the Western Cape, which includes plans for farming, upmarket
residential, a retirement village, a boutique hotel and mixed-use development
that includes retail outlets, offices and apartments.
IFA Hotels and Resorts 8 (Pty) Limited ("IFA Estates")
IFA Estates has the sole mandate to sell the Fairmont Zimbali Hotel & Resort
development ("Fairmont Zimbali") situated in Zimbali, and is also appointed as
the sole sales and marketing agent for IFA Legends Investments (Pty) Limited.
IFA Hotels and Resorts (Namibia) (Pty) Limited ("IFA Namibia")
IFA Namibia`s interest in the joint venture with Ohlthaver & List Group
("OLIFA") was disposed of during the period under review. The transaction allows
the purchaser to promote the OLIFA operations in Namibia while the group directs
its attention to its South African investments.
IFA Legends Investments (Pty) Limited ("IFA Legends")
IFA H&R Kuwait, IFA SA Group and LGSR Investments (Pty) Limited (formerly
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 currently comprises five operating lodges with associated
conference facilities and spas, 900 residential opportunities and an 18-hole
championship golf course, each hole having been designed by a renowned
international golfer. Further plans include an internationally branded five-star
hotel with a health spa and a wellness centre, conference and recreational
facilities is being planned, all of which, once developed will cater for up to 2
500 guests.
Zimbali Rentals (Pty) Limited ("Zimbali Rentals")
Zimbali Rentals offers a professional service to Zimbali owners renting their
properties to guests wishing to experience the unique beauty and qualities of
Zimbali.
FINANCIAL REVIEW
IFA HOTELS - The Zimbali Lakes and the commencement by IFA Resorts of the new
Gary Player golf course will result in the release of new serviced land stock
within the Zimbali Lakes development and provides a foundation for future growth
in revenue. The positive impact of the new King Shaka International Airport on
the region bodes well for Zimbali Office Estates and Zimbali Lake Developments.
IFA ZIMBALI - Profitability has improved due to, inter alia, revenue increasing
by 10% and improved EBITDA and operational performance.
IFA ESTATES - Sales commissions earned for the period, despite the difficult
economic climate, was R3,6 million. An improvement in profitability is expected
as the economy recovers and the entity settles into its role as sales and
marketing agent at Legends.
IFA BOSCHENDAL - Progress is being made on the obtaining of the planning rights
for Phase 2 of the Boschendal Development, which will ultimately result in the
realisation of full potential and profitability.
IFA NAMIBIA -The disposal of the investment and de-recognition of the group`s
50% share of the assets and liabilities in the joint venture contributed to a
profit being reported for the period.
IFA LEGENDS - IFA Legend`s 20% share in associate Legends has been accounted for
in terms of IAS 28 and therefore is not included in IFA SA Group`s total after
tax loss for the period.
ZIMBALI RENTALS -The reduction in profitability is attributable to the slower
than expected recovery from the challenging economic conditions, which is
expected to improve as the economy recovers.
PROSPECTS
The directors believe that the prospects for the group remain positive. The
group has consolidated its position during the recessionary climate and laid the
foundation for future growth. The continued improvement in operations and sales
will impact positively on profitability and cash flows and encouraging sales
activity, particularly in Zimbali, is continuing.
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.
For and on behalf of the board:
TJM Al-Bahar WJ Burger
Chairman Chief Executive Officer
30 March 2011
Zimbali, Durban, KwaZulu-Natal
CORPORATE INFORMATION
Directors
TJM Al-Bahar (Chairman)*, WJ Burger (Chief Executive Officer), WP Witthuhn,
PGR de Sylva, GE Larson*, JAM Wilson* (resigned 3 March 2011), KM El Marsafy*,
VM Nkosi*, EAA Al Essa* (appointed 3 March 2011). *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: 30/03/2011 16:45:01 Produced by the JSE SENS Department.
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