| Fri 27 May 2011, 15:00 | | WIL - Wilderness Holdings Limited - Reviewed abridged group financial results |
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WIL
WIL
WIL - Wilderness Holdings Limited - Reviewed abridged group financial results
for the year ended 28 February 2011 and a cash dividend declaration
Wilderness Holdings Limited
Share code WIL ISIN: BW0000000868
Registration number 2004/2986
("Wilderness" or "the Company" or "the Group")
REVIEWED ABRIDGED GROUP FINANCIAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2011
AND A CASH DIVIDEND DECLARATION
Highlights
- Turnover has increased by 9% to P949 million
- Operating profits have decreased by 26% to P51 million
- Continuing profits after tax increased by 79% to P92 million, due to gains
from sale of two non-core assets
- Increase in cash and cash equivalents of P90 million and a net cash position
of P153 million at year-end
- Maiden dividend of 8.6 thebe per share declared
Abridged Group Statement of Comprehensive Income
Reviewed
Reviewed Restated
Year ended Year ended
BWP `000 28 Feb 2011 Change 28 Feb 2010
Revenue 948 607 9% 871 986
Cost of sales (526 837) (448 222)
Gross profit 421 770 423 764
Other gains 12 995 3 688
Operating expenses (359 184) (315 749)
Foreign exchange gains 1 836 7 781
Operating profit for the year before
items listed below 77 417 119 484
Impairment loss on property, plant and
equipment (4 085) -
Depreciation and amortisation (43 707) (48 137)
Profit on sale of business 29 219 -
Goodwill impairment (8 312) (3 239)
Operating profit 50 532 (26%) 68 108
Net finance costs (6 925) (6 521)
Unrealised foreign exchange gain on loans 7 974 24 124
Share of associate company profit 59 437 2 521
Profit before taxation 111 018 88 232
Taxation (18 895) (36 692)
Profit for the year from continuing
operations 92 123 79% 51 540
Profit for the year from discontinuing
operations - 1 701
Profit for the year 92 123 53 241
Other comprehensive (loss)/income (3 054) 4 191
Exchange differences on translating
foreign operations (3 054) 4 191
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 89 069 57 432
Profit/(Loss) attributable to:
Owners of the Company 100 033 52 437
Non-controlling interest (7 910) 804
92 123 53 241
Total comprehensive income attributable to:
Owners of the Company 96 979 56 628
Non-controlling interest (7 910) 804
89 069 57 432
Number of ordinary shares in issue (`000) 231 000 200 000
Weighted number of ordinary shares in
issue (`000) 228 417 199 950
Basic earnings per share (thebe) 43.79 26.23
Basic headline earnings per share (thebe) 11.05 23.85
Diluted earnings per share (thebe) 43.30 26.23
Diluted headline earnings per share (thebe) 10.92 23.85
Abridged Group Statement of Financial Position
Reviewed Reviewed
Reviewed Restated Restated
As at As at As at
28 Feb 28 Feb 28 Feb
BWP`000 2011 2010 2009
ASSETS
Non-current assets 440 997 465 922 485 604
Property, plant and equipment 375 732 364 172 335 190
Goodwill 31 022 37 937 39 688
Investment and loans in associates 18 754 49 731 50 831
Loans receivable 1 155 949 35 101
Deferred taxation 14 334 13 133 24 794
Current assets 289 769 209 325 142 556
Inventories 17 053 15 542 13 917
Receivables and pre-payments 72 197 88 957 66 104
Derivative asset - 2 351 -
Current tax receivable 14 105 8 537 4 383
Bank balances and cash 186 414 93 938 58 152
Assets of disposal group classified
as held for sale - 1 197 -
TOTAL ASSETS 730 766 676 444 628 160
EQUITY AND LIABILITIES
Equity attributable to owners of
the Company 350 368 244 775 200 164
Non-controlling interest (17 418) (4 518) 386
Total equity 332 950 240 257 200 550
Non-current liabilities 141 138 156 579 181 104
Borrowings - interest bearing 114 071 131 449 165 649
Deferred taxation 27 067 25 130 15 455
Current liabilities 256 678 279 602 246 506
Trade and other payables 222 512 246 559 221 596
Current tax liabilities 345 3 028 5 483
Bank overdrafts 33 821 30 015 19 427
Liabilities of disposal group
classified as held for sale - 6 -
Total liabilities 397 816 436 187 427 610
TOTAL EQUITY AND LIABILITIES 730 766 676 444 628 160
Net asset value per share (Pula) 1.52 1.22 1.00
Net tangible asset value per share
(Pula) 1.38 1.03 0.80
Reviewed
Abridged Group Statement of Cash Flows Reviewed Restated
Year ended Year ended
BWP`000 28 Feb 2011 28 Feb 2010
Net cash inflow from operating activities 45 979 96 223
Net cash inflow/(outflow) from investing activities 84 726 (43 131)
Net cash outflow from financing activities (40 453) (26 810)
Increase in cash and cash equivalents 90 252 26 282
Unrealised exchange losses on foreign cash balances (1 582) (1 084)
Cash and cash equivalents at beginning of year 63 923 38 725
Cash and cash equivalents at end of year 152 593 63 923
Abridged Statement of Changes in Total Equity
Balance at beginning of year - restated 240 257 200 550
Merger accounted reserves 235 038 225 422
Change in accounting policy (note 1) 5 219 (24 872)
Transfer of shareholders` loans to short-term payables - (12 017)
Total comprehensive income for the year 89 069 57 432
Merger accounted total comprehensive income 89 069 52 213
Change in accounting policy (note 1) - 5 219
Minority interest arising on business combination - (2 868)
Minority portion of dividend paid (164) (2 840)
Issue of shares 124 000 -
Expenses related to issue of shares (16 357) -
Common control business combination reserve (103 855) -
Balance at end of year 332 950 240 257
Determination of Headline Earnings
Reconciliation between profit attributable to
owners of the Company and headline earnings
Profit attributable to owners of the Company 100 033 52 437
Adjustments
Goodwill impairment 8 312 3 239
Surplus on disposal of operations, investments and
associates (87 975) -
(Profit)/Loss on disposal of property, plant and
equipment (3 766) 705
Reversal of loan impairment losses - (8 015)
Impairment losses 4 085 -
Tax effects of adjustments 4 541 (345)
Minority interest - (324)
Headline earnings 25 230 47 697
Segmental Analysis
Revenue
Safari consulting 938 075 838 343
Camp, lodge and safari explorations 288 315 295 006
Transfer and touring 176 810 149 380
Finance and asset management 50 645 44 352
Inter-Group (505 238) (455 095)
948 607 871 986
Reportable segment profit/(loss) before tax
Safari consulting 15 523 24 139
Camp, lodge and safari explorations 3 526 28 426
Transfer and touring (1 447) 3 292
Finance and asset management 33 888 32 066
51 490 87 923
Net items unallocated to a segment 59 528 309
Profit before taxation 111 018 88 232
Total assets
Safari consulting 214 457 213 558
Camp, lodge and safari explorations 351 907 440 122
Transfer and touring 73 296 88 186
Finance and asset management 699 262 406 462
Inter-Group (608 156) (471 884)
730 766 676 444
Note 1 - Details of restatement
Impact of change of policy from revaluation of
aircraft to cost basis in respect of
2010 statement of comprehensive income
Reversal of impairment 4 256
Reversal of depreciation 2 432
Tax effect of above reversals (1 469)
Increase in profit before taxation 5 219
Impact of change of policy from revaluation of
aircraft to cost basis in respect
of opening reserves
Reversal of revaluation surplus (26 591)
Increase in retained income 1 999
Decrease in foreign currency translation reserve (280)
Decrease in opening reserves as at 1 March 2009 (24 872)
Commentary
The directors of Wilderness Holdings Limited are pleased to report the results
of the Group`s operations for the year ended 28 February 2011 which represents
the Group`s maiden results as a listed entity.
The year under review has been a complex one to understand. While the year was
dominated by the successful FIFA World Cup hosted in June 2010, underlying
market conditions remain challenging and there appears to be little respite to
this adverse trend. Discretionary income remains scarce in our source markets
(mainly the USA and Europe) and these are still under pressure, demand in the
region is soft after the focus it received during the World Cup, and the local
exchange rates remain strong relative to the US Dollar (USD), having
strengthened significantly in the prior year.
It is against this backdrop, which for the most part was anticipated by the
business, that we report our performance.
We anticipated that, in the period immediately after the onset of the economic
crisis in 2008/09, the revenue line of the business was going to be difficult
to grow at historical rates.
Therefore, we focused on gaining market share, improving our competitive
positioning, cost-cutting and productivity initiatives. During this period we
also recognised the importance of releasing low-yielding capital. We aimed to
both effectively realign the business to softer source markets and to adapt
the value proposition so as to be attractive to new buying trends. At the same
time, we wanted to emerge with cash resources that would enable us to take
advantage of opportunities that might emerge post this challenging trading
period.
Over the past year, Group turnover has increased by 9% to P949 million. With
2.5% of this increase coming from new businesses, the real increase of 6.5% is
attributed to a growth in market share in higher yielding markets. This is
comforting in view of the fact that no rate increase was levied for the
majority of the period under review, meaning that growth was a result of a
combination of improved yield and occupancy. Bednight sales in our infancy
businesses in Zambia and Zimbabwe rose by 30%. In our mature businesses,
Botswana saw some growth in bednights sold but this was largely offset by the
drop in demand for Namibian and South African product. Turnover increased
in all source currencies except the Rand and Namibian Dollar (which together
account for approximately one-third of Group turnover).
Our Group gross margin percentage has reduced by 4% by virtue of adverse
currency movements, the decrease in scale in the Namibian and South African
businesses, and inflation.
Operating expenses were also under pressure from inflation (which has ranged
from 5% to 8% in the regions we operate in) and other factors detailed below.
Excluding the costs associated with new businesses consolidated for the first
time, operating costs have increased by 11%. Factors contributing to this
increase over inflation include:
- The strengthening of the Rand against the Pula, which amounts to 5% of the
increase relative to the prior period;
- Increased lease fees in recently renewed concessions; and
- Extra sales, marketing and promotional initiatives undertaken to counter
the soft demand in source markets.
Other income of P13 million resulted primarily from two insurance claims
amounting to approximately P9 million.
The profit on sale of business of P29 million results from the Duba Plains
transaction as announced in a circular on 16 August 2010. The Group`s share
of the profits from associated companies increased from P3 million in 2010 to
P60 million for the current year. This is largely the result of the disposal
by our associated company Norisco Holdings SA of its investment in North
Island Company Limited, as announced in a circular dated 29 October 2010.
Unrealised foreign exchange gains on loans have reduced from P24 million to
P8 million reflecting the fact that the Rand: USD exchange rate was more
stable than in the prior period.
The tax charge amounted to P19 million, down from P37 million in the prior
year. The effective rate of tax reduced to 17%, mainly due to the capital
profits on the disposals noted above. Profit after tax for the year therefore
amounted to P92 million, 79% more than the P52 million earned in 2010.
The Group`s cash reserves increased by P90 million with the result that the
year-end cash position was P153 million. This is in spite of new and defensive
capital expenditures during the year amounting to P57 million.
The Group has committed capital expenditure for the year ahead of P58 million
of which P22 million relates to the Group`s defensive capital commitment,
ensuring that the business remains fully maintained thereby protecting the
existing earnings base.
We are also able to report real progress in positioning the business for the
future:
- We have implemented a re-organisation of key roles, responsibilities and
people positioning, all aimed at effective execution of our new strategic plan
and improved future business per formance;
- We have established a shared services platform off which Group businesses
will operate in future;
- The business models of subsidiaries which are experiencing stress have been
reworked and the benefits of this will be felt in future. It has been
necessary to focus in particular on the business in Namibia which has been
hard hit by the strength of the Rand and low demand out of the country`s main
European markets;
- We have launched the `Year of Service` aimed at improving product quality
and client service;
- We have undertaken a re-branding of the business, moving from a `house of
brands` to a `branded house`. The unveiling of this new profile was undertaken
in May at Indaba 2011;
- We have launched a new brand called the `Wilderness Collection`. This brand
will focus on unique sustainable programmes in iconic locations all initially
in Africa and the Indian Ocean islands;
- We are in the process of rolling out a new sustainability platform, based on
the 4Cs (being Community, Culture, Commerce and Conservation), and the results
of the initial baseline setting will be released later this year in the form
of an integrated report; and
- We have entered into exciting new collaboration initiatives with PUMA A.G.,
the Zeitz Foundation and The Travel Corporation.
Dividend
Notice is hereby given that a final dividend for the year ended 28 February
2011 of 8.6 thebe per share was declared on 24 May 2011. The dividend will be
payable on or about 8 July 2011 to those shareholders registered at the close
of business on 17 June 2011. For JSE registered shareholders, the last date to
trade shall be 9 June 2011 and shall commence trading ex the dividend on 10
June 2011. In terms of the Republic of Botswana Income Tax Act, as amended,
withholding tax of 7.5% will be deducted from all Botswana residents from the
gross dividend. South African shareholders are not subject to withholding/non-
resident tax.
The South African branch register will be closed for the purposes of
dematerialisation, rematerialisation and transfers between the South African
register and the SA and Botswana registers from Friday, 10 June 2011 to
Friday, 17 June 2011, both dates inclusive. The dividend shall be paid in Rand
to shareholders on the South African register. The exchange rate and the South
African dividend amount will be announced on 8 June 2011.
Capital commitments and contingencies
The Group has committed P58 million (2010: P41 million) to develop and
refurbish certain camps and properties in the year ahead to maintain standards
and increase bed capacity.
Included in the above results is an amount of P29 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. However, this transaction remains 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.
Subsequent events
On 28 March 2011, shareholders approved the Wilderness Group Share Scheme.
It is envisaged that the first awards and allocations to eligible employees
will be made in June 2011 in accordance with the scheme rules.
A dividend of 8.6 thebe per share was declared on 24 May 2011.
Adoption of a new accounting policy
As previously reported, 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. The financial statements 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 statement of financial position.
Change in accounting policy
The accounting policy for aircraft has been changed from the revaluation model
to the cost model. The effect of the restatement is detailed in Note 1 -
Details of restatement.
Basis of preparation
The abridged financial information has been prepared in accordance with the
framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards and the information as required by
IAS 34 - Interim Financial Reporting. The report has been prepared using
accounting policies that comply with International Financial Reporting
Standards which are consistent with those applied in the prior year financial
statements, except for what has been described above.
Auditors` review
The abridged provisional financial information for the year ended 28 February
2011 has been reviewed by the Group`s auditors, Deloitte & Touche. The review
was conducted in accordance with ISRE 2410 - Review of Interim Financial
Information performed by the Independent Auditor of the Entity. A copy of
their unmodified report is available for inspection at the Company`s
registered office. Any reference to future financial performance included in
this announcement has not be reviewed or reported on by the Company`s
auditors.
Prospects and outlook
We expect the soft trading conditions to persist for the foreseeable future,
due to weak demand in our source markets and the current over-supply of beds
in some destinations. Nonetheless, our booking sheets show a gradual recovery
in occupancies and yields, except in Namibia. The impact of price increases
passed to the market in December 2010 should reflect in results for the
current year although this might be partly offset if the strength of the Rand
persists.
The Wilderness Group is well-placed to weather the present difficult
environment, gaining market share in the process. Our investments in brands,
product and our people have positioned us to take advantage of an upswing in
the market, when it occurs.
Registered office Plot 1 Mathiba Road, Maun, Botswana
External company registration number 2009/022894/10
Registered office 373 Rivonia Boulevard, Rivonia, South Africa
BSE: Primary Listing
JSE: Secondary Listing
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) Limited and
Julia Swanepoel
www.wilderness.travel
Date: 27/05/2011 15:00:03 Produced by the JSE SENS Department.
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