| Wed 14 Mar 2001, 0:00 | | Gold Reef Casino Resorts - Audited Results |
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GOLD REEF CASINO RESORTS
AUDITED RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2000
- Headline EPS of 48 cents before deducting pre-opening expenses
- NAV per share of 274,8 cents
- Two more casino licences awarded in 2000
GROUP INCOME STATEMENT
Audited Audited
12 months ended 18 months ended
31 December 2000 31 December 1999
R'000 R'000
Net operating profit 51 186 8 065
Taxation 17 881 13 029
Net profit/(loss) after
taxation 33 305 (4 964)
Share of results in
associates 28 742 25 015
Akani Egoli 26 177 25 015
- Trading results 37 765 27 615
- Pre-opening expenses
recognised in the current
year (11 588) (2 600)
West Coast Leisure - -
- Trading results 704 -
- Pre-opening expenses
recognised in the current
year (704) -
CAI Gold Reef Management 2 565 -
Profit attributable to
shareholders 62 047 20 051
Number of shares in
issue (000) 177 262 131 807
Weighted average number
of shares in issue (000) 152 854 80 225
Headline earnings per
share (cents) 48,0 37,4
- before deducting
pre-opening expenses
Headline earnings per
shares (cents) 40,4 34,2
- after deducting
pre-opening expenses
- GROUP BALANCE SHEET
Audited at Audited at
31 December 31 December
2000 1999
R'000 R'000
Assets
Non-current assets
Property, plant and equipment 102 156
Investment in associates 445 651 442 162
- Akani Egoli 396 368 442 162
- West Coast Leisure 8 514 -
- Akani Msunduzi 19 554 -
- CAI Gold Reef Management 21 215 -
Other investments 500 3 100
Loan to Share Incentive Trust 7 406 -
453 659 445 418
Current assets
Receivables and prepayments 2 461 2 038
Cash and cash equivalents 97 462 35 179
99 923 37 217
553 582 482 635
Equity and liabilities
Capital and reserves
Ordinary shareholders' equity 360 885 260 979
Non-distributable reserves 15 885 17 650
Retained earnings 110 287 48 240
487 057 326 869
Non-current liabilities
Non-interest bearing
borrowings - 92 500
Current liabilities
Payables and provisions 13 212 12 499
Bank overdraft 35 438 35 450
Tax liabilities 17 875 15 317
66 525 63 266
553 582 482 635
Net asset value per
share (cents) 274,8 248,0
CASH FLOW STATEMENT
Audited Audited
12 months 18 months
ended ended
31 December 31 December
2000 1999
R'000 R'000
Cash flow from operating
activities
Income for the period 51 186 8 065
Non-cash items and other
adjustments (52 789) (24 489)
Cash flow from trading
operations (1 603) (16 424)
Decrease/(increase) in
working capital 413 (35 879)
Cash flow from operations (1 190) (52 303)
Dividends received - 1 523
Net interest received 55 178 42 011
Tax paid (15 323) (221)
Net cash generated/(utilised)
in operating activities 38 665 (8 990)
Cash flow from investing
activities (20 002) 130 694
Cash flow from financing
activities 43 632 (95 410)
Net increase in cash and
cash equivalents 62 295 26 294
Cash and cash equivalents at
the beginning of the period (271) (26 565)
Cash and cash equivalents at
the end of the period 62 024 (271)
STATEMENT OF CHANGES IN EQUITY
Audited Audited
12 months 18 months
ended ended
31 December 31 December
2000 1999
R'000 R'000
Share capital
Ordinary shares
- at the beginning of
the period 2 636 1 398
- ordinary shares issued 909 1 238
- at the end of the period 3 545 2 636
Share premium
- at the beginning of the
period 258 343 136 663
- share premium raised 98 997 192 506
- share premium utilised - (70 826)
- at the end of the period 357 340 258 343
Total share capital at the end
of the period 360 885 260 979
Non-distributable reserve
- at the beginning of the
period 17 650 24 028
- raised on acquisition
of subsidiary - 17 650
- released (1 765) (24 028)
- at the end of the period 15 885 17 650
Retained earnings
- at the beginning of the
period 48 240 (678)
- writeback of retained
income on sale of subsidiaries - 4 839
- net income for the period 62 047 20 051
- transfer from reserves - 24 028
- at the end of the period 110 287 48 240
COMMENTARY
The year under review
Gold Reef Casino Resorts (GRCR) expanded significantly from the operating
platform which existed in the previous period. The new permanent Gold Reef City
Casino and its contiguous Theme Park, in which GRCR holds a 50% direct
investment and a 75,6% economic interest, opened its doors to the public on 18
March 2000. The move from the temporary to the permanent site resulted in the
loss of four weeks of trading.
The casino exceeded budget, producing earnings before interest, tax,
depreciation and amortisation (EBITDA) equivalent to 44% of gross gaming
revenue. Net profit from the enhanced Theme Park grew in excess of 500%.
New developments during the year included the awards of licences to operate
casinos at Club Mykonos on the Western Cape coast to West Coast Leisure (Pty)
Limited and at Scottsville, Pietermaritzburg, to Akani Msunduzi (Pty) Limited.
GRCR has a 26,67% shareholding in West Coast Leisure (Pty) Limited and a 38%
investment in Akani Msunduzi (Pty) Limited.
Casino Mykonos commenced trading on 14 November 2000. Trading over the six
weeks was well in excess of budget and a major portion of the R5 450 000
pre-opening expenses was recouped. The balance attributable to GRCR, of
R750000, will be offset against the group's share of profits from the
investment in 2001. The Scottsville casino will commence trading in the last
quarter of the current financial year.
An important development during the year was the establishment of CAI Gold Reef
Management (Pty) Limited, a joint venture between GRCR and Casinos Austria,
specialising in casino management. This company will manage all of the casinos
in which GRCR is involved, together with any independent operations managed in
sub-Saharan Africa. It completed a most successful first year with GRCR's R15
million net investment generating R2 565 000 in management fees.
Results
The results for the year are not comparable with those of the previous 18-month
period during which income was earned from discontinued activities.
GRCR's pre-listing statement forecast headline earnings per share of 47,9
cents. This forecast was made at a time when pre-opening expenses could be
capitalised, whereas the new accounting treatment now requires these to be
expensed during the year in which incurred. GRCR has met the forecast by
achieving a headline earnings per share of 48,0 cents before deducting such
expenses.
GRCR's attributable income for the first half of the year was R27 573 000,
whereas for the second half it amounted to R34 209 000, an increase of 24%. Due
to the issue of, approximately, an additional 45 million shares in the second
half of the year, headline earnings per share for the two periods were 20,9
cents and 19,5 cents respectively.
Prospects
Both Gold Reef City and Casino Mykonos will contribute for the full current
year and the Golden Horse Casino at Scottsville will begin to contribute in the
last quarter of the year. The group is a participant in a consortium seeking a
licence to operate a casino at George in the southern Cape. Adjudication of
that award is currently subject to litigation. Consideration is also being
given to participating in a licence application for a casino at Welkom in the
Free State.
The board is confident that the above developments, together with prevailing
levels of trading, will result in further growth in profits in the current
year.
The group is exploring the potential of online gaming. Any developments in this
field are unlikely to contribute towards results in the current year.
Dividend
In view of the capital expenditure on the Pietermaritzburg casino and on any
other casinos for which licences may be acquired, the directors have decided
not to declare a dividend for the 2000 financial year.
On behalf of the board
R J Seabrook
Secretary
14 March 2001
