| Wed 15 Aug 2001, 0:00 | | Tourism Investment Corporation Limited - Audited R |
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Tourism Investment Corporation Limited
Registration number 1996/008144/06
Audited results for the year ended 30 June 2001
Highlights
- EPS up by 13%
- Headline EPS up by 18%
- Attributable income up by 15%
- Turnover up by 11%
- R154 million in cash
INCOME STATEMENT for the year ended 30 June
2001 2000
R'000 R'000
Turnover 1 010 379 914 072
Operating income 129 266 109 037
Interest paid (18 192) (14 041)
Interest received 24 417 21 141
Profit before taxation 135 491 116 137
Taxation 33 840 31 348
Profit after taxation 101 651 84 789
Share of associated
company income 1 316 1 607
Outside shareholders' interest 8 613 4 320
Attributable income 94 354 82 076
Earnings per share (cents) 12,2 10,8
Headline earnings per share (cents) 13,1 11,1
Dividend per share (cents) - -
Depreciation 23 010 17 874
Amortisation of intangibles 1 804 -
Closure costs on
discontinued operations 4 063 2 950
Weighted shares in issue (000s) 771 707 763 767
BALANCE SHEET as at 30 June
2001 2000
R'000 R'000
Assets
Non-current assets
Tangible assets 94 251 82 753
Intangible assets 12 772 -
Deferred taxation 53 140 25 303
Unlisted investments 49 133 33 897
Other financial assets 75 040 75 359
Current assets
Inventories 84 769 69 374
Trade and other receivables 137 073 141 025
Cash and bank balances 171 413 119 985
Foreign notes held 40 898 47 797
Total assets 718 489 595 493
Equity and liabilities
Capital and reserves
Issued capital 78 517 85 662
Non-distributable reserves 54 394 24 581
Retained income 257 307 162 953
Outside shareholders' interest 21 668 9 416
Non-current liabilities
Interest-bearing borrowings 9 946 2 660
Current liabilities
Trade and other payables 217 025 238 438
Interest-bearing borrowings 320 924
Loans re foreign notes held 33 903 39 612
Bank overdraft 24 253 8 540
Taxation payable 21 132 22 683
Dividends payable 24 24
Total equity and liabilities 718 489 595 493
Net asset value per share (cents) 46,99 42,18
Net tangible asset value per
share (cents) 45,45 32,90
Shares in issue (000s) 830 441 830 350
Intangibles written off against
share premium - 77 111
Capital commitments 11 463 11 879
Operating lease commitments 138 139 120 617
Cash flow statement for the year ended 30 June
2001 2000
R'000 R'000
Cash generated from operations 95 821 93 468
Operating income 152 181 131 129
Net investment income 6 225 7 406
Change in working capital (24 737) (11 133)
Taxation paid (37 848) (29 848)
Dividend paid - (4 086)
Cash flow from investing
activities (61 756) (130 601)
Fixed asset replacement (net) (25 518) (18 826)
Net acquisition of operations (36 238) (111 775)
and investments
Cash flow from financing
activities 460 47 684
Proceeds from issue/(payment on
repurchase) of shares (7 145) 79 160
Change in long-term liabilities 286 695
Loan to share option trust 319 (32 171)
Net movement in cash and
cash equivalents 34 525 10 551
Statement of changes in equity
Non-
Share capital Accumulated distributable Total
and premium profit reserve equity
R'000s R'000s R'000s R'000s
Balance 30 June 1999 115 026 80 877 - 195 903
Income to 30
June 2000 82 076 82 076
Shares issued to
30 June 2000 47 747 47 747
Intangibles
written off (77 111) (77 111)
Deferred tax arising
on write off of
trademarks 27 982 27 982
Deferred tax reversed
on set off of
trademarks (3 401) (3 401)
Balance 30 June 2000 85 662 162 953 24 581 273 196
Income to 30 June 2000 94 354 94 354
Shares repurchased in
terms of buy
back awaiting
cancellation (7 145) (7 145)
Deferred tax arising on
set off of trademarks 36 428 36 428
Deferred tax reversed on
set off of trademarks (10 101) (10 101)
Non-distributable reserve
arising on
write back of vendor
creditors 3 386 3 386
Capital profits 100 100
78 517 257 307 54 394 390 218
SEGMENTAL ANALYSIS
Pre-tax Net assets
Turnover % profits % employed %
Travel and financial
services 716 306 71 73 827 54 239 661 65
Retail merchandise 294 073 29 61 664 46 130 999 35
Total 30 June 2001 1 010 379 100 135 491 100 370 660 100
Travel and financial
services 699 426 77 74 570 64 193 678 54
Retail merchandise 214 646 23 41 567 36 166 045 46
Total 30 June 2000 914 072 100 116 137 100 359 72 100
Overview
Tourvest comprises of a number of the industry's top tourism brands, built
by entrepreneurs and still run by them. Their efforts are co-ordinated by a
small, professional head office team.
Tourvest has achieved 13% growth in EPS for the 12 months to June 2001,
despite this having been a poor year for South African tourism.
Tourvest itself has had an interesting year. The major event being the
acquisition by Imperial Holdings of a controlling stake in the group, a deal
which was concluded shortly after year end. This large parent will boost
Tourvest's efforts, assist in expanding globally when and where appropriate
and provide access to a banking licence to facilitate future strategy. It
also ends the uncertainty of the past 18 months, in which the down-rating of
small-cap stocks, the poor perceptions of tourism and consequent commentary
about the future of Tourvest have affected the group.
External factors impacting on the group included the Zimbabwe crisis, the
crime situation, the withdrawal of several airlines and general negative
perceptions of the region. These factors hit passenger numbers and squeezed
margins throughout the industry.
Divisional performance
Inbound
The inbound division most tangibly felt the drop-off in inbound passenger
volumes. For the first time since 1994 overseas passenger numbers into South
Africa failed to grow and even declined out of certain key markets. However,
we are pleased to note that despite this Tourvest managed to grow profit
from this division. The focus of the division during the period was the
implementation of a major cost-reduction exercise, a more focused sales
effort and the development of closer and more efficient supplier
relationships.
Prospects for the year ahead are more positive. In July 2001 a major new
Tourvest strategic partnership programme came into effect and the co-
operative marketing agreements being put in place around the world by the
industry are sure to boost inbound numbers.
Outbound
A strong focus on the leveraging of strategic partnerships with airlines,
hotel groups and car hire firms enabled the Outbound division to minimise
the impact of poor exchange rates on the outbound sector. Thus, while
corporates have been cutting back on their travel budgets and retail
consumers have been hard hit by a number of factors, among them the fall in
the rand, our outbound businesses have performed well ahead of expectations.
In particular, American Express Travel and Seekers outperformed by a
combination of growth in turnover and harnessing the buying power to be
derived from being such large players in the market.
During the year the business of Associated Tour Operators (ATO) was
acquired.
Financial Services
American Express Foreign Exchange showed satisfactory growth in profit
despite the increasingly competitive environment as some of the major banks
entered the travel forex market in a big way. Extensive research was
conducted into the extension of the Amex Forex product range into the
commercial forex arena, and to this end the relationship with Imperial is
likely to be exceedingly beneficial.
Retail Merchandising
The decline in inbound numbers, exacerbated by the trend towards last-minute
bookings by international travellers, brought a different kind of customer
into South Africa - those who are not buying the high end products and
booking expensive hotel rooms which have traditionally been sold to the
inbound market. Despite the difficult trading conditions the division was
still able to show good growth.
During the year the businesses of Kraalkraft and Indaba were acquired from
the Fedics Group. Our outbound duty free operations were extended to Kenya
Airways.
Dotcoms
We remain convinced that travel will increasingly become one of the most
sustainable web categories, as can be seen from the fact that in the US one
in three online purchases involves travel and associated services. However,
a high level of investment is required to gain the high ground.
Tourvest's dotcom businesses need to reach critical mass more quickly in
order to reduce the group's exposure to the downside of this cash-hungry
sector. We are currently reviewing our investments in these businesses.
Results
EPS grew by 13% to 12,2 cps on turnover of R1,010bn. Attributable earnings
increased to R94,3m. Net cash resources were R154m. These good results are
due primarily to the major cost-reduction exercise which has been ongoing
throughout the group and far greater leveraging of synergies and buying
power. In addition our effective tax rate reduced due to tax allowances
granted in excess of prior year estimates.
Prospects
We are cautiously optimistic about the year ahead. Sound operational
structures and procedures are firmly in place - allowing management to focus
on organic growth. The business is now also positioned to look for new
growth opportunities. Macro-environmental conditions suggest a slight
improvement, with the country's international marketing effort picking up
pace and no new upheavals on the horizon in Southern Africa. However, the
shortage of capacity on the South African routes, exacerbated by the
withdrawal of three airlines, needs to be addressed.
DIVIDEND
This policy will be reviewed in due course.
strate
Tourvest is due to commence dematerialisation on 22 October 2001. A letter
containing further information will be included with the annual report to be
posted to members early September 2001.
NOTES
1. COMPLIANCE WITH GAAP
These results have been compiled in accordance with South African Statements
of Generally Accepted Accounting Practice.
2. ACCOUNTING POLICIES
The same accounting policies and methods of computation have been used in
the preparation of these financial statements as were used in the annual
financial statements to 30 June 2000 except that intangible assets are no
longer written off against share premium but are amoritsed in terms of AC131
and AC129.
3. UNUSUAL ITEMS
No unusual items are contained in these results.
4. MATERIAL SUBSEQUENT EVENTS
No events of note have occurred subsequent to the final results other than
the acquisition of a controlling interest of 60,54% in the group by Imperial
Holdings Ltd.
5. changes in the business
The following businesses were acquired during the year:
- 70% of Associated Tour Operators (Proprietary) Limited
- 100% of Kraalkraft (Proprietary) Limited
- 100% of Indaba (Proprietary) Limited
- 16% of African Retail Experience (Proprietary) Limited
- 25% of Sense of Africa (Proprietary) Limited
On behalf of the board
C E Scott I W Hay
Chairman Chief financial officer
Johannesburg
15 August 2000
Registered office: Moorgate, Dunkeld Park, 6 North Road, Dunkeld West
Transfer secretaries: Computershare Services Limited, 4th Floor, Edura
House, 41 Fox Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)
Directors: C E Scott (Chairman), B W Gutkin, J M P Desmidt, I W C Hay*, W G
Lynch, J M Shabangu *Executive Company secretary: A C McDonic
