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IFH
IFH
IFH - IFA Hotels & Resorts Limited - Abridged consolidated results for the
period ended 31 December 2011, renewal of cautionary announcement, posting of
the annual report and notice of Annual General Meeting
IFA HOTELS & RESORTS LIMITED
("IFA "or "the company" or "the group")
Registration number 1919/001318/06
Share code: IFH ISIN: ZAE000075669
ABRIDGED CONSOLIDATED RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2011, RENEWAL
OF CAUTIONARY ANNOUNCEMENT, POSTING OF THE ANNUAL REPORT AND NOTICE OF ANNUAL
GENERAL MEETING
These are the abridged consolidated results of the audited financial
statements, which were prepared under the supervision of the financial
director, CJ Schutte (CA) SA
The audited financial statements are available on CD or in a printed form from
the registered office of the company and may be requested by:
Mail: PO Box 12 Zimbali, 4422
Telephone: +2 7 32 538 1205
Email: cornel@ifahotelsresorts.com
CHIEF EXECUTIVE OFFICER`S REPORT
We continue to recognise the impact that the challenging global economy has on
the business of the group. We are managing the group appropriately having
regard to current market conditions. We will endeavour to focus on delivering
an exciting range of internationally renowned residential, leisure and
hospitality property investments.
The group`s financial year-end was aligned with that of its majority
shareholder and consequently this report addresses an 18-month trading period.
OPERATIONS
IFA Hotels
Moderate revenue from real estate sales in the Zimbali Coastal Resort and
commission income from estate agency operations has resulted in a small loss
for the period.
The slower than expected economic recovery has resulted in a more cautious
approach to the development of the Zimbali Lakes and the Westbrook projects.
IFA Zimbali
Despite the opening of the Fairmont Zimbali Resort, the revenue of the
Fairmont Zimbali Lodge has been maintained. Sales have been enhanced from the
vacation club offering that has been launched at the Lodge.
This, together with a reduction in borrowing costs, has resulted in a
significant reduction in the loss reported for the period.
IFA Estates
Trade in leisure property products has not met expectations; however, the
addition of a vacation club offering at more attractive prices has contributed
to the maintenance of revenue.
IFA Boschendal
While the acquisition of a further 5,25% in Boschendal (Pty) Limited was
concluded during the period under review, progress on the development of this
investment has been limited.
In addition to equity accounted losses of R19 million for the period, the
directors, having regard to prevailing market conditions, have made a
provision for impairment of R81 million.
IFA Namibia
Recognising the need to focus on the group`s South African investments lead to
the disposal of our interest in the joint venture. A R15 million recovery was
reported in the period under review compared to the R31 million loss reported
in the prior period.
IFA Legends
Lodging operations continue to improve, with a particular focus on the
corporate market for which a new conference facility has been constructed.
Real estate sales remain limited.
In line with the accounting standards relating to equity accounted
investments, no accounting for our share of losses has been made. However,
having regard to prevailing market conditions, the directors have made a
provision for impairment of R26 million.
Zimbali Rentals
Holiday letting has continued at a moderate pace, but the operation is well
placed to grow as spend in this area recovers.
IFA SA
Provisions of R197 million for the impairment of loans made to the IFA
Boschendal, IFA Namibia and IFA Legends operations have been made. These
reverse on consolidation as the associated losses and impairment provisions
are also recognised in the subsidiary companies.
PROSPECTS
The impairment provisions in IFA Boschendal and IFA Legends recognise the long-
term nature of these "landbank" developments. IFA remains confident that the
foundations we have laid enable us to meet the challenges we face.
APPRECIATION
I thank our shareholders, customers and suppliers for their continued
invaluable support. I also thank our staff, management and fellow directors
for their hard work and dedication during the period.
Sincerely,
Werner Burger
Chief Executive Officer
30 March 2012
ABRIDGED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Group Group Company Company
18 months 12 months 18 months 12 months
ended ended ended ended
31 December 30 June 31 December 30 June
2011 2010 2011 2010
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
ASSETS
Non-current assets 473 131 644 124 516 269 706 661
Property plant and
equipment 111 984 178 677 1 476 2 078
Goodwill 2 298 2 298
Investments in
subsidiaries - - 57 549 57 549
Loans to subsidiaries - - 445 036 646 808
Investment in and
loans to joint ventures - 16 605 - -
Investments in
associates - 19 547 - -
Loans to associates 324 403 410 224 - -
Other financial
assets 11 079 3 400 8 679
Deferred tax 23 367 13 373 3 529 226
Current assets 218 510 243 459 21 360 14 461
Inventories 1 138 1 593 - -
Other financial
assets 9 479 28 136 9 479 8 679
Current tax receivable - 26 - -
Township properties 157 672 161 227 - -
Trade and other
receivables 27 422 32 659 6 919 5 694
Cash and cash
equivalents 22 799 19 818 4 962 88
Total assets 691 641 887 583 537 629 721 122
EQUITY AND
LIABILITIES
Capital and
reserves (56 893) 79 103 (74 012) 131 598
Issued share
capital and share
premium 71 892 71 892 209 237 209 237
Revaluation reserve 45 878 45 595
Accumulated loss (174 663) (38 384) (283 249) (77 639)
Non-current
liabilities 724 363 683 869 607 652 546 903
Loans from group
companies 37 070 - 46 379 -
Loans from
shareholders 408 016 389 475 396 889 379 780
Borrowings 268 335 251 691 164 233 166 800
Finance lease
obligation 202 1 509 151 323
Deferred tax 10 740 11 082 - -
Other financial
liabilities - 30 112 - -
Current liabilities 24 171 124 611 3 989 42 621
Current tax payable 178 99 - -
Finance lease
obligation 175 403 118 104
Trade and other
payables 22 072 72 156 3 871 3 090
Deferred revenue - 11 152 - -
Other financial
liabilities - 39 420 39 427
Bank overdraft 1 746 1 381 - -
Total equity and
liabilities 691 641 887 583 537 629 721 122
Net asset value
per share ("NAV")
(cents) (26,07) 36,25 (33,92) 60,31
Net tangible asset
value per share
("NTAV") (cents) (27,13) 35,20 (33,92) 60,31
Number of shares
in issue and used
for NAV and NTAV
calculation 218 210 680 218 210 680 218 210 680 218 210 680
ABRIDGED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Group Group Company Company
18 months 12 months 18 months 12 months
ended ended ended ended
31 December 30 June 31 December 30 June
2011 2010 2011 2010
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Continuing operations
Revenue 98 208 78 887 9 854 6 432
Operating profit/(loss) (122 051) (22 428) (202 518) (3 598)
Investment revenue 12 407 32 510 12 758 47 446
Finance costs (33 289) (57 115) (19 153) (42 710)
Loss from equity
accounted investments (18 918) (14 396) - -
Profit/(loss) before
taxation (161 851) (61 429) (208 913) 1 138
Taxation 9 887 (6 869) 3 303 (319)
Profit/(loss) for the
period from continuing
operations (151 964) (68 298) (205 610) 819
Discontinued operation
Profit/(loss) from
discontinued operation 15 685 - - -
Total profit/(loss)
for the period (136 279) - - -
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 for the period (136 279) (68 298) (205 610) 819
Profit/(loss)
attributable to:
Equity holders of the
parent (136 279) (68 298) (205 610) 819
Total comprehensive
income attributable to:
Equity holders of the
parent (136 279) (68 298) (205 610) 819
Basic and diluted
(loss)/earnings per
share ("EPS") (cents) (62,45) (31,30) (94,17) 0,44
Notes to the income
statement
Diluted headline loss
per share ("HEPS")
(cents) (note 1) (18,11) (26,59) (26,59) (26,59)
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Revaluation
capital premium reserve
R`000 R`000 R`000
Group
Balance at 1 July 2009 2 182 69 710 45 595
Total comprehensive income for the period - - -
Balance at 30 June 2010 2 182 69 710 45 595
Balance at 1 July 2010 2 182 69 710 45 595
Total comprehensive income for the period - - 283
Balance at 30 June 2011 2 182 69 710 45 878
Company
Balance at 1 July 2009 2 182 207 055 -
Total comprehensive income for the period - - -
Balance at 30 June 2010 2 182 207 055 -
Balance at 1 July 2010 2 182 207 055 -
Total comprehensive income for the period - - -
Balance at 30 June 2011 2 182 207 055 -
Accumulated
profit/(loss) Total
R`000 R`000
Group
Balance at 1 July 2009 29 914 147 401
Total comprehensive income for the period (68 298) (68 298)
Balance at 30 June 2010 (38 384) 79 103
Balance at 1 July 2010 (38 384) 79 103
Total comprehensive income for the period (136 279) (135 996)
Balance at 30 June 2011 (174 663) (56 893)
Company
Balance at 1 July 2009 (78 458) 130 779
Total comprehensive income for the period 819 819
Balance at 30 June 2010 (77 639) 131 598
Balance at 1 July 2010 (77 639) 131 598
Total comprehensive income for the period (205 610) (205 610)
Balance at 30 June 2011 (283 249) (74 012)
ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS
Group Group Company Company
18 months 12 months 18 months 12 months
ended ended ended ended
31 December 30 June 31 December 30 June
2011 2010 2011 2010
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Cash flows from
operating activities (42 096) (28 144) (6 265) (163)
Cash generated by
operating activities (18 837) (4 365) (5 447) (4 898)
Interest received 10 090 32 064 18 336 47 445
Interest paid (33 289) (56 319) (19 154) (42 710)
Taxation paid (59) 476
Cash flows from
investing activities 53 951 (98 155) (31 363) (109 513)
Property, plant and
equipment acquired (7 439) (5 052) (213) (1 044)
Proceeds of disposals
of property, plant and
equipment 67 439 504
Disposal of interest
in joint venture 32 099
Net movement in loans
to subsidiaries (28 624) (108 385)
Net movement in loans
to fellow subsidiaries 17 073 (19 495) 6 953 -
Net movement in loans
to associate (37 126) (69 496) - -
Net movement in loan
to joint venture (5 116) - -
Net movement in
financial assets (8 471) 500 (9 479) (84)
Purchase of additional
shares in associate (9 624) - - -
Cash flows from
financing activities (9 240) 81 082 42 502 78 220
Movement in borrowings (24 252) 39 631 (2 567) 39 853
Movement in loan from
joint venture (30 112) 2 927
Net movement in
shareholder`s loan 46 659 38 524 45 227 38 367
Finance lease payments (1 535) (158)
Total cash movement
for the period 2 615 (45 217) 4 874 (31 456)
Cash at beginning of
the period 18 438 63 655 88 31 544
Total cash at end of
the period 21 053 18 438 4 962 88
ABRIDGED 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 group`s revenue and operating results by
reportable segment:
IFA Hotels IFA Zimbali
18 months 12 months 18 months 12 months
ended ended ended ended
31 Dec 30 June 31 Dec 30 June
2011 2010 2011 2010
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue from
external customers 27 873 21 338 54 772 34 186
Intersegment revenue - - - -
EBITDA 5 531 9 760 (3 079) (4 620)
EBIT 4 853 9 297 (7 635) (8 813)
Discontinued operations
Net profit/(loss) (1 442) 4 035 (3 062) (21 889)
Segment assets 196 841 207 370 125 341 127 286
IFA Boschendal IFA Estates
18 months 12 months 18 months 12 months
ended ended ended ended
31 Dec 30 June 31 Dec 30 June
2011 2010 2011 2010
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue from
external customers - - 10 204 7 941
Intersegment revenue - - - -
EBITDA (1 763) 196 (2 511) 161
EBIT (101 829) 3 065 (2 585) 104
Discontinued operations
Net profit/(loss) (106 227) 2 720 (5 848) (1 861)
Segment assets 76 789 151 931 33 477 21 220
IFA SA IFA Namibia
18 months 12 months 18 months 12 months
ended ended ended ended
31 Dec 30 June 31 Dec 30 June
2011 2010 2011 2010
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue from
external customers - 2 901 6 681 11 123
Intersegment revenue 9 854 3 531 - -
EBITDA (5 002) (3 044) 14 953 (18 347)
EBIT (202 518) (3 598) 14 419 (19 423)
Discontinued operations
Net profit/(loss) (205 610) 819 15 685 (31 087)
Segment assets 537 630 721 123 - 84 743
IFA Legends Zimbali Rentals
18 months 12 months 18 months 12 months
ended ended ended ended
31 Dec 30 June 31 Dec 30 June
2011 2010 2011 2010
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue from
external customers - - 1 483 1 398
Intersegment revenue - - - -
EBITDA (1 006) (511) (152) 348
EBIT (27 767) (21 424) (190) 323
Discontinued operations
Net profit/(loss) (26 381) (21 281) (95) 248
Segment assets 248 067 279 215 3 403 1 610
Eliminations Consolidated
18 months 12 months 18 months 12 months
ended ended ended ended
31 Dec 30 June 31 Dec 30 June
2011 2010 2011 2010
Audited Audited Audited Audited
R`000 R`000 R`000 R`000
Revenue from
external customers (6 681) - 94 332 78 887
Intersegment revenue (5 982) (3 531) 3 872 -
EBITDA (14 401) (2) (7 430) (16 059)
EBIT 182 282 3 645 (140 970) (36 824)
Discontinued operations 15 685 15 685
Net profit/(loss) 196 701 (2) (136 279) (68 298)
Segment assets (529 906) (706 915) 691 641 887 583
BASIS OF PREPARATION AND ACCOUNTING POLICIES
These abridged consolidated financial statements for the period ended 31
December 2011 have been prepared in accordance with and containing the
information required by IAS 34 and comply with the framework concepts and the
measurement and recognition requirements of International Financial Reporting
Standards (IFRS), the AC 500 standards as issued by the Accounting Standards
Board and its successor, the Listings Requirements of the JSE Limited and the
Companies Act (No 71 of 2008, as amended) of South Africa.
The going concern basis of accounting has been applied based on the
subordination by the majority shareholder of its loan and the directors,
having considered the cash flow forecast for the ensuing 12 months and the
availability of cash resources, being satisfied that this basis of accounting
is appropriate.
The accounting policies adopted are consistent with those applied in the
preparation of the audited annual financial statements for the year ended 30
June 2010, except for amendments to standards, which have had no impact on the
reported information
The condensed consolidated financial statements for the year have been audited
by BDO South Africa Incorporated, and their unmodified audit report is
available for inspection at the company`s registered office
NOTES TO THE FINANCIAL RESULTS
Audited Audited
18 months 12 months
ended ended
31 December 30 June
2011 2010
R`000 R`000
1. Basic and diluted earnings and headline
earnings per ordinary share
The earnings and weighted average number of
ordinary shares used in the
calculation of basic and diluted earnings and
headline earnings per ordinary share
are as follows:
Headline and diluted headline loss per share
("HEPS") (cents) (18,11) (26,59)
Reconciliation of total earnings to headline
earnings attributable to equity holders
of the parent.
Earnings attributable to ordinary shareholders (136 279) (68 298)
Less profit on disposal of joint venture (15 513) -
Add impairment of share in associate 107 927 (4)
Add impairment of property, plant and equipment -
share of associate - 9 361
Add/(less) tax effect 4 344 (2 620)
Add impairment of goodwill - share of associate - 3 541
Headline loss (39 521) (58 020)
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 3 214 10 923
Approved but not contracted - -
3 214 10 923
3. Operating lease commitments 377 196
4. Investments and loans
Investment in associate companies - 19 547
Loans to associate companies 324 403 410 224
Other unlisted investments 11 079 3 400
335 482 433 171
Directors` valuation of unlisted investments
- unlisted associate companies 324 403 429 771
- other unlisted investments 11 079 3 400
335 482 433 171
5. Related party transactions
During the eighteen-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 statements of the group. All
transactions with joint ventures and the associates are concluded on an arm`s
length basis.
The significant change in trade and other payables arises from the
reclassification of a related party loan to borrowings in the current period.
6. Discontinued Operations
During the year the group disposed of its shareholding in a company, Olifa
Hotels and Resorts (Namibia) (Pty) Ltd (Incorporated in Namibia). The
disposal did not have a material effect on the group`s results and is set out
in the audited annual financial statements.
7. 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
the financial results which materially affect the financial position of group
or the results of its operations to the date of this report.
8. Dividend
No dividend has been declared during the period under review.
9.Renewal of cautionary announcement
Shareholders are referred to previous cautionary announcements, the last of
which was published on 8 March 2012 and are advised that the negotiations
referred to therein are ongoing. These negotiations are still at a preliminary
stage and may or may not result in a potential corporate action that may have
a material effect on the price of the company`s securities.
Accordingly, shareholders are advised to continue to exercise caution when
dealing in the company`s securities, until a further detailed announcement is
made.
10. Posting of the annual report and notice of the annual general meeting
Shareholders are advised that the annual report of the company for the year
ended 31 December 2011 has been posted today, 30 March 2012.
Notice is hereby given that the annual general meeting of IFA
will be held at Zimbali Northgate Suites, Zimbali Coastal Resort, Zimbali,
KwaZulu- Natal on Tuesday, 8 May 2012 at 11:00 to transact the business as
stated in the annual general meeting notice forming part of the annual
financial statements.
Salient dates are as follows:
Record date to receive the notice of annual general
meeting Friday, 23 March 2012
Last day to trade in order to be eligible to vote at the annual general
meeting Thursday, 19 April 2012
Record date to be eligible to vote Thursday, 26 April 2012
Forms of proxy for the annual general meeting to be lodged by Friday, 4 May
2012
11. Corporate information
Directors
TJM Al-Bahar (Chairman)*
WJ Burger (Chief Executive Officer)
WP Witthuhn (resigned 31 January 2012)
PGR de Sylva, GE Larson*
JAM Wilson* (resigned 3 March 2011)
KM El-Marsafy*, VM Nkosi*
EAA Al-Essa* (appointed 3 March 2011)
CJ Schutte (appointed 17 November 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
30 March 2012
Sponsor
Sasfin Bank Limited
(a division of Sasfin Bank Limited)
Date: 30/03/2012 15:51:02 Produced by the JSE SENS Department.
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