| Mon 10 Sep 2001, 0:00 | | Gold Reef Casino Resorts - Interim Results |
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Share code : GDF
ISIN : ZAE000028338.
Interim results or the six months ended 30 june 2001
- Increase in attributable profit of 43%
- NAV per share at 296 cents
- Golden Horse Casino opens on schedule
GROUP INCOME STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
% 2001 2000 2000
change R'000 R'000 R'000
Net profit 28 438 31 469 51 186
Taxation 8 531 9 559 17 881
Net profit after tax 19 907 21 910 33 305
Share of results in associates 19 460 5 663 28 742
Akani Egoli 18 517 3 934 26 177
West Coast Leisure - - -
CAI Gold Reef Management 943 1 729 2 565
Profit attributable to
shareholders 43 39 367 27 573 62 047
Number of shares
in issue (000) 177 262 131 807 177 262
Weighted average number
of shares in issue (000) 177 262 131 807 152 854
Earnings per
share (cents) 6 22,2 20,9 40,6
Headline earnings per
share (cents) 6 22,2 20,9 40,4
GROUP BALANCE SHEET
Unaudited Unaudited Audited at
at 30 June at 30 June 31 December
2001 2000 2000
R'000 R'000 R'000
Assets
Non-current assets
Property, plant and equipment 202 128 102
Investment in associates 518 938 470 843 445 652
- Akani Egoli 425 688 449 114 396 369
- West Coast Leisure 9 257 - 8 514
- Akani Msunduzi 62 743 - 19 554
- CAI Gold Reef Management 21 250 21 729 21 215
Other investments 500 4 127 500
Loan to share incentive trust 7 406 - 7 406
527 046 475 098 453 660
Current assets
Receivables and prepayments 494 342 2 461
Cash and cash equivalents 47 101 17 736 97 462
47 595 18 078 99 923
574 641 493 176 553 583
Equity and liabilities
Capital and reserves
Ordinary shareholders' equity 360 885 260 979 360 885
Non-distributable reserves 15 002 17 650 15 885
Retained earnings 149 654 75 813 110 287
525 541 354 442 487 057
Non-current liabilities
Non-interest bearing borrowings - 92 500 -
Current liabilities
Payables and provisions 11 849 3 495 13 213
Bank overdraft 28 720 33 180 35 438
Tax liabilities 8 531 9 559 17 875
49 100 46 234 66 526
574 641 493 176 553 583
Net asset value per
share (cents) 296 269 275
GROUP STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2001 2000 2000
R'000 R'000 R'000
Share capital
Ordinary shares
- at the beginning of the period 3 545 2 636 2 636
- ordinary shares issued - - 909
- at the end of the period 3 545 2 636 3 545
Share premium
- at the beginning of
the period 357 340 258 343 258 343
- share premium raised - - 98 997
- at the end of the period 357 340 258 343 357 340
Total share capital at the
end of the period 360 885 260 979 360 885
Non-distributable reserves
- at the beginning of
the period 15 885 17 650 17 650
- NDR released (883) - (1 765)
- at the end of the period 15 002 17 650 15 885
Retained earnings
- at the beginning
of the period 110 287 48 240 48 240
- net profit for the period 39 367 27 573 62 047
- at the end of the period 149 654 75 813 110 287
GROUP CASH FLOw statement
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2001 2000 2000
R'000 R'000 R'000
Cash flow from operating activities
Net profit 28 438 31 469 51 186
Non-cash items and other
adjustments (30 705) (28 831) (52 789)
Cash flow from trading
activities (2 267) 2 638 (1 603)
Decrease in working capital 603 6 008 291
Cash flow from operating
activities (1 664) 8 646 (1 312)
Net interest received 29 867 28 858 55 178
Tax paid (17 875) (13 027) (15 323)
Net cash generated by
operating activities 10 328 24 477 38 543
Cash flow from investing
activities (145) (20 000) (20 000)
Cash flow from financing
activities (53 826) (19 650) 43 752
Net (decrease)/increase in cash
and cash equivalents (43 643) (15 173) 62 295
Cash and cash equivalents at the
beginning of the period 62 024 (271) (271)
Cash and cash equivalents at the
end of the period 18 381 (15 444) 62 024
Comment
The period under review
The period under review marks the start of the third financial year of Gold
Reef Casino Resorts (GRCR). Each half-year has witnessed substantial
developments within the group when compared with the preceding period.
Accordingly, the results achieved for each six-month period have not been
strictly comparable with prior periods. The latest half-year is no
exception.
Key developments and events during the period under review have included:
- the first full financial half-year of trading by:
- Akani Egoli in its permanent facility at Gold Reef City
- Casino Mykonos
- CAI Gold Reef Management (CAIGR), the group's management company
jointly controlled with Casinos Austria
- costs incurred in the establishment of the Golden Horse casino
resort which commenced trading in Pietermaritzburg this weekend
- an increase in the number of shares in issue by some 45 million
shares
Other events of significance included ongoing expansion and development at
the Gold Reef City Theme Park and the granting of a permanent casino licence
to Gold Reef City by the Gauteng Gambling Board.
Results
Earnings per share for the half-year ended 30 June 2001 are not strictly
comparable with those of the equivalent period of the previous year or any
subsequent period. However, good growth has been achieved in line with
management's stated objective of establishing the group as a prominent
participant in the gaming and related entertainment sector, capable of
delivering long-term sustainable returns on investment to the benefit of all
stakeholders.
Net operating profit - essentially comprising interest from funds on deposit
and on loan to group operating companies less head office expenses -
declined to R28,44 million compared with
R31,47 million in the equivalent period of the previous year. A virtually
unchanged rate of effective taxation left post-tax profit at R19,91 million
compared with the previous R21,91 million.
The group's share of profits from associates grew substantially from R5,66
million in the first half of the previous year to R19,46 million, derived
almost entirely from the contribution by the group's 75,6% economic interest
in Akani Egoli. This is equivalent to 68% of the total achieved in the
entire 2000 financial year.
Trading by West Coast Leisure, operating from its casino on the Cape west
coast, is strongly influenced by seasonal factors, favouring the second half
of the year. For the first six months the company incurred a loss, the
group's share of which amounted to R0,56 million. As this is treated on an
equity accounted basis, the group's exposure is nil.
CAIGR experienced sound growth, generating management fees of some R6,59
million. A reallocation of bid costs to this company, amounting to R2,5
million over the period, has resulted in a net share of income to the group
from this source totalling R0,94 million.
Profit attributable to shareholders totalled R39,37 million against the
previous R27,57 million which, on the increased equity in issue, produced
headline and ordinary earnings per share of 22,2 cents compared with 20,9
cents a year ago.
The 43% increase in attributable profit did not flow through to the earnings
per share level because of the additional shares issued, which related to
the acquisition of the Theme Park, as previously disclosed.
Cash flow remained healthy in the face of an outflow of R53,83 million,
primarily towards funding the group's Pietermaritzburg venture. The balance
sheet was further strengthened with a reduction in overall borrowings and an
increase in net asset value per share from 275 cents at 31 December 2000 to
296 cents at 30 June 2001.
Prospects
The Golden Horse casino at Scottsville, Pietermaritzburg, commenced trading
this weekend. While it is expected to break even in the current year, after
deducting pre-opening expenses, its contribution from 2002 is expected to be
material.
The second half of the year incorporates the Casino Mykonos active season,
taking in the December festive period, and is expected to show substantial
improvement over the first half.
GRCR has a 50% interest in a company which is the sole bidder for a licence
in the Welkom area of the Free State. This bid is currently under evaluation
by the relevant authorities. Before proceeding, the board will ensure that
the project meets the group's policy that all new ventures should satisfy
strict return on investment criteria and that projected levels of capital
expenditure will be commensurate with anticipated revenues and resultant
profits.
Emphasis will remain on deriving increased returns from the group's existing
businesses in which area management is confident that substantial further
opportunity exists. At the same time, management is actively engaged in
evaluating new opportunities to develop the group's activities, both on its
own and in partnership. The outlook for the balance of the current financial
year is for further steady growth in the group's businesses.
Dividend
In accordance with group policy to reinvest resources in the funding of
ongoing expansion, no dividend has been declared.
Registered office
Gold Reef City
Gate 4
Northern Parkway
Ormonde, 2157
Transfer secretaries
Mercantile Registrars Limited
10th Floor
11 Diagonal Street
Johannesburg, 2001
Directors
M Krok (Chairman), A J Aaron,
J S Friedman, S B Joffe,
R J Khoza, M Z Krok,
B J Schutte
www.grcresorts.co.za
