| Fri 15 Apr 2016, 7:05 | | PHUMELELA GAMING & LEISURE LIMITED - Unaudited Condensed Consolidated Interim Financial Results for the six months ended 31 January 2016 |
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PHM 201604150001A
Unaudited Condensed Consolidated Interim Financial Results for the six months ended 31 January 2016
Phumelela Gaming and Leisure Limited
(Incorporated in the Republic of South Africa)
Registration number 1997/016610/06
Share code: PHM
ISIN ZAE 000039269
("Phumelela" or "the Company")
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS
ENDED 31 JANUARY 2016 AND DIVIDEND DECLARATION
OPERATIONAL FEATURES OF THE PERIOD
- Continued growth in fixed odds betting and tote betting on soccer
- Exemplary contribution by the Group's international operations
- Interbet online bookmaking business and betting exchange is proving to be an
exciting and profitable investment
FINANCIAL FEATURES OF THE PERIOD
- Earnings per share increased by 32%
- Headline earnings per share increased by 33%
- Interim dividend increased by 21%
- Negligible debt
RESULTS ANALYSIS
Phumelela continues to adapt and invest in securing its future
The period under review was characterised by solid progress in all business areas and
ongoing initiatives to secure a sustainable financial future by diversifying and
internationalising. Betting on sports other than horseracing and international income
underpinned a pleasing overall result.
Total income grew by 19% to R786,5 million with local income growing by 18% to
R659,7 million and international income growing by 29% to R126,7 million.
Local net betting income grew by 18% to R497,2 mllion and other local income grew by 6%
to R119,6 million. Other operating income from international operations grew by 26% to
R132,2 million. Net income, after investment income of R0,5 million, was 17% higher at
R749,5 million.
Including international and local equity accounted profits of R43,4 million, which was up
by 119%, group pre-tax profit increased by 27% to R75,2 million.
Net attributable income and headline earnings increased by 31% to R65,0 million, assisted
by a positive fair value adjustment and a slightly lower effective tax rate.
Adjusted headline earnings increased by 19% to R64,5 million. The adjusted result excludes
the legal and consulting fees associated with combatting piracy of the group's intellectual
property and the mark to market adjustment for the investment held in Automatic
Systems Limited ("ASL").
In order to fulfill obligations in respect of shares exercisable in terms of the executive
option schemes, the company previously repurchased shares and so the weighted average
number of shares in issue was 1.13% lower. Consequently, earnings per share grew
marginally more than total earnings.
Earnings per share increased by 32%, headline earnings per share increased by 33%, and
adjusted headline earnings per share increased by 21%.
This pleasing result is against a backdrop of a weak domestic economy and a weakening in
the Rand. Against the British pound, the Rand averaged R21.54 for the period compared with
R17.75, which is an 18% weakening that resulted in more Rand recognised on translation of
foreign currency. The group benefitted from a foreign exchange gain of R9,6 million.
Income and profitability accelerated across the retail footprint. International operations
performed significantly better in both foreign currency terms and in Rand and are on a
firm footing for further growth on the back of a world-class South African thoroughbred
horseracing export product.
Pre-tax profits from tote betting on sports other than horseracing, from the Group's fixed
odds business and limited pay-out machines grew by 34% in the period to R128 million.
Despite this enormous achievement, the local operations incurred a loss this period of
R7 million.
Phumelela has been calling for a fairer funding dispensation for the sport of thoroughbred
horseracing. The losses incurred in the Group's traditional business of staging
horseracing and conducting tote betting thereon also give financial context to the
necessary legal fight against flagrant piracy of the group's intellectual property by
certain bookmakers.
SOUTH AFRICA OPERATIONS
Fixed odds operations performed strongly and returned materially increased profits.
Net fixed odds betting income on horseracing, sports other than horseracing, and numbers
betting all showed significant growth. Money wagered on fixed odds increased by 46%.
Fixed odds betting on numbers continue to experience exceptional growth and doubled
during the period. Fixed odds betting on sports other than horseracing remains popular,
and grew by 29%.
Net betting income from local tote and fixed odds operations grew by 18% and other income
from local operations grew by 6%. The increase in tote betting income was due entirely to
tote betting on sports other than horseracing, which now comprises a 33% share of total
tote bets.
Total operating expenses in the local tote and fixed odds operations grew by 21% and
reflects the growth in the expanded retail footprint, IFRS 2 share-based payment charges
for options expected to vest by year end, incentive bonus payments and legal and
consulting fees associated with combatting piracy abuse of the group's intellectual
property by bookmakers and related legal matters.
Like-for-like normalised expenses in the local tote operations grew by 8%. Across
both tote and fixed odds operations like-for-like expenses grew by 15%, largely a
reflection of investment in retail. Day to day operating expenses in the local
operations remain tightly controlled.
Prize monies increased by 3% in accordance with the agreement with the Racing Association.
The 26% investment in Interbet positively affected equity accounted income and investment
returns.
Civil and criminal lawsuits have been filed and will be filed against all local bookmakers
who are unlawfully displaying Tellytrack. As at reporting date, 232 bookmakers have
subscribed to Tellytrack.
INTERNATIONAL OPERATIONS
Phumelela's 50% investment in Premier Gateway International (PGI), located on the Isle of
Man, together with the export of live broadcast of South African horseracing to six
continents, contributed positively for the period. The combined pre-tax profit contribution
of R77,5 million comprises 106% of group pre-tax profit before the ASL fair value
adjustment compared with 91% in 2015.
International demand for South African horseracing content and betting thereon remained
buoyant with the result that net income from international operations increased by 26% to
R132 million.
Operating expenses increased by 44% to R95,5 million. More than half of the expense
comprises intellectual property rights fees and the remainder normal running costs.
The mark to market gain on ASL of R2 million compared to a loss last year. The group's
investment in ASL is a held for sale.
FINANCIAL POSITION
Despite increases in costs associated with staging thoroughbred horseracing in South
Africa, Phumelela continues to invest in the sport and ensuring that there is a sound
basis for exporting excellent content globally. Furthermore, as investments in
complementary activities yield improving returns the cash flow and financial position of
the group is bolstered.
Cash generated from operating activities was R58,1 million and benefitted from reduced
working capital of R9 million.
Capital expenditure, including stay in business and expansion, was R37,6 million compared
to R31,2 million last year.
Dividends paid to equity shareholders amounted to R44,7 million.
Total assets are R864 million, which includes property, plant and equipment at a carrying
value of R453 million, goodwill and intangibles valued at R64 million, and equity accounted
investees valued at R56 million.
Attributable equity amounts to R474 million and represents net asset value per share of
636,17 cents.
Net debt is a negligible R4,9 million and represents a debt to equity ratio of 1%.
The group has adequate banking facilities and reserve borrowing capacity.
SHARE CAPITAL
There was no movement in authorised or issued share capital during the period.
INVESTMENTS
In September 2015 the Group concluded an agreement to acquire a 51% shareholding in Afribet
(Pty) Limited, a retail bookmaking concern licensed in the Eastern Cape. The Eastern Cape
Gambling and Betting Board granted approval on 14 December 2015 and suspensive conditions
were fulfilled post the half year end.
On 9 December 2015 Phumelela announced that the Company had agreed with Supabets SA
Holdings (Pty) Ltd ("Supabets") and its controlling shareholder, the Anastassopoulos
Family Investments Holding Company (Pty) Ltd ("AF"), to acquire 50% of the shares in
Supabets. Supabets is one of the leading and fastest growing sports betting and gaming
groups in Africa with a specific focus in the high growth fixed odds sports betting
market. Founded in 2008, Supabets has grown substantially in a relatively short time and
has captured a meaningful share of the South African sports betting market through its
unique product offering, high customer service standards, strategically located retail
network and strong brand recognition. This investment is subject to the fulfillment of
certain conditions precedent including, inter alia, regulatory approvals, Supabets and
AF restructuring and the completion of a due diligence investigation. The group expects
implementation in the latter half of the calendar year.
CONDENSED SEGMENTAL ANALYSIS
The group stages horseracing events in South Africa, offers betting opportunities on
South African and international sports, and exports televisual horseracing content
internationally. Reporting disclosure corresponds to management reporting lines.
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Jan 31 Jan 31 Jul
% 2016 2015 2015
Change R'000 R'000 R'000
Local sports betting and media
gross income 18 659 746 561 124 1 067 444
International ventures gross income 29 126 726 98 550 198 761
Total local and international income 19 786 472 659 674 1 266 205
Local tote and fixed odds net betting
and other income 15 617 268 536 260 1 072 467
International other income 26 132 216 104 973 205 798
Total local and international net income 17 749 484 641 233 1 278 265
Local expenses, stakes and levies 17 (620 726) (528 933) (1 059 070)
International expenses 43 (95 588) (66 649) (139 894)
Total expenses 20 (716 314) (595 582) (1 198 964)
Local operating (loss)/profit (147) (3 458) 7 327 13 397
Local finance costs 78 (3 412) (1 919) (5 828)
Local (loss)/profit from operations (227) (6 870) 5 408 7 569
International pre-tax profit (4) 36 628 38 324 65 904
International and local equity
accounted profits 119 43 413 19 866 47 060
Total Group pre-tax profit 15 73 171 63 598 120 533
CAPITAL COMMITMENTS
Commitments in respect of capital expenditure approved by directors.
2016 2015
R'000 R'000
Contracted for 5 062 4 767
Not contracted for 83 140 66 505
Capital commitments are financed from cash and cash equivalents on hand or borrowing
facilities as and when required.
REPORTING ENTITY
Phumelela Gaming and Leisure Limited is a company domiciled in South Africa. The condensed
consolidated interim financial statements as at 31 January 2016 comprise of the Company
and its subsidiaries and the Group's interests in equity accounted investees and a joint
operation.
STATEMENT OF COMPLIANCE AND PRESENTATION
The condensed consolidated interim financial statements for the six months ended
31 January 2016 have been prepared in accordance with IAS 34 - Interim Financial
Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee and Financial Reporting Pronouncements as issued by the Financial Reporting
Standards Council, the Listing Requirements of the JSE Limited and the requirements of
the South African Companies Act. The financial information does not include all the
information required for full annual financial statements and should be read in
conjunction with the consolidated financial statements of the Group as at and for
the year ended 31 July 2015.
The condensed consolidated financial statements are presented in South African Rand
rounded to the nearest thousand, which is the Company's functional and Group's
presentation currency. They are prepared on the historical cost basis, except for certain
financial instruments that are recognised at fair value.
The accounting policies applied in the presentation of the condensed consolidated
financial statements are in terms of IFRS and consistent with those applied for the year
ended 31 July 2015, except for new standards and interpretations that became effective on
1 August 2015 and deemed applicable to the Group. The adoption of these standards and
interpretations had no impact on the results for the period nor has it required the
restatement of any prior year figures. The amounts disclosed are not audited or reviewed
by the auditors, except if indicated otherwise.
The Board endorses the recommendations set out in King III and supports the Code of
Corporate Practices and Conduct set out therein.
Mr B. McLoughlin C.A. (S.A.) Chief Financial Officer was responsible for supervising the
preparation of this interim report.
SUBSEQUENT EVENTS
There are no significant subsequent events that have an impact on the financial
information at 31 January 2016.
CORPORATE INTERESTS
Phumelela is a respondent in consolidated complaints lodged by the Gauteng Off-Course
Bookmakers' Association ("GOBA"), the KwaZulu-Natal Bookmakers' Society ("the KZNBS"),
and various individual bookmakers with the Competition Commission during 2014 and 2015
regarding, inter alia, alleged excessive pricing and abuse of a dominant position. The
complaints are being investigated by the Competition Commission and Phumelela has
submitted extensive information and documents to the Competition Commission to assist it
with its investigation.
Phumelela has lodged a counter complaint with the Competition Commission in relation to
certain bookmakers having engaged in a concerted practice by co-operating with one another
regarding the determination of a uniform price at which they will agree to receive the
Tellytrack service. The conduct of these bookmakers constitutes the fixing of a purchase
price in contravention of the Competition Act. The complaint has been referred to the
Cartels Division of the Competition Commission and is under investigation.
On 4 March 2015 the KZNBS lodged a complaint with the Independent Communications Authority
of South Africa (ICASA). The complaint consists of two parts, the first against the joint
parties of Tellytrack, Phumelela, Gold Circle and Kenilworth Racing and the second against
Telemedia (Pty) Ltd, for alleged contraventions of the Electronic Communications Act
pertaining to the provision of commercial broadcast services without the correct licenses.
The complaints are being investigated by ICASA and the parties are assisting with its
investigation.
On 14 December 2015 Phumelela announced a landmark agreement with Arena Racing Company
("ARC") which ensures that South African horseracing will continue to be available for
display in betting shops in the UK and Ireland until at least the end of 2022. From
1 June 2016 until the end of 2022 Phumelela has licensed ARC to supply and distribute
audio-visual coverage, including data, of all South African race meetings to all licensed
betting offices in the UK and Ireland. ARC will also continue to distribute South African
racing to online betting operators in the UK via the At The Races streaming platform
Sports Media Stream.
On 9 March 2016 Cabinet approved the National Gambling Policy Review Document which will
form the basis of a National Gambling Amendments Act that will be open for broader public
comment upon publication. Whilst a number of Phumelela's concerns have been favourably
addressed including the bookmakers' "open bet" and the right to be compensated for the use
of the Group's intellectual property, a few pressing issues remain, the most notable being:
- Operators in the business of taking bets or wagers should be prevented from collecting
bets on the lottery results or conducting sports pools in terms of a licence issued
under gambling legislations across the country. Bets on lottery results and sports
pools must only be authorised in terms of the lottery legislation; or
- Operators must be required to contribute a reasonable percentage from their gross
gambling revenue into the National Lotteries Distribution Trust Fund ("NLDTF") as shall
be prescribed by the Minister after consulting Council.
Implementation of the policy in respect of Tote bets on sports other than horseracing
would put the Tote operators at a competitive disadvantage to bookmakers and the National
Lottery and could potentially have a detrimental effect on Phumelela, horseracing and
betting taxes earned by each of the provinces. Phumelela offered Tote bets on sports other
than horseracing prior to the introduction of the National Lottery and has done so with
approval from the provincial gambling boards ever since. Phumelela believes that the
removal of its right to offer Tote bets on sports other than horseracing would be
unconstitutional and has engaged Government in this regard.
LITIGATION
Phumelela is a respondent in an application:
- in the High Court of South Africa, Gauteng Division, Johannesburg instituted by,
inter alia, the KZNBS to enforce the order made by the Gauteng Gambling Board on
9 October 2014 and secure access to the Tellytrack service pending the outcome of the
proceedings before the Gauteng Gambling Board and Phumelela's review application;
- instituted by the KZNBS and GOBA in the High Court of South Africa, Gauteng Division,
Pretoria. The applicants seek an order interdicting Phumelela from offering totalisator
betting on sports other than horseracing. The parties have filed answering affidavits
and the matter may be set down by the applicants.
Phumelela is a defendant in an action instituted by the KZNBS in the High Court of South
Africa, Gauteng Division, Pretoria in which the KZNBS is claiming damages from Phumelela
pursuant to the alleged infringement by Phumelela of the copyright vesting in the fixed
betting odds supplied by the KZNBS distributed by the Bookmaking Odds and Distribution
System ("BODDS"). Phumelela lodged exception to the particulars of claim lodged by the
KZNBS on, inter alia, the ground that it was vague and embarrassing. On 25 August 2015
Judge Potterill ordered that the exception be upheld with costs. The plaintiff subsequently
amended its particulars of claim. However, Phumelela again took exception thereto on the
aforementioned grounds. The plaintiff must either cure the deficiencies in its particulars
of claim or Phumelela will set the exception down for hearing.
Phumelela is the appellant in an appeal against the dismissal of its application to review
and set aside a decision made by the Gauteng Gambling Board on 9 October 2014.
The outcome of the relevant actions noted above, and under Corporate Interests, remains
uncertain and may have an impact on future earnings.
RELATED PARTIES
There have been no significant changes in related party relationships since the previous year.
Other than in the normal course of business, there have been no significant transactions
during the period with equity accounted investees, joint operations and other related parties.
SOCIAL RESPONSIBILITY
Phumelela is an AAA level two broadly-based black economic empowerment contributor.
Phumelela was ranked eighth on the Johannesburg Stock Exchange in the most recent top 100
Most Empowered Companies ranked by Empowerdex.
The Group recognises that it has a responsibility to the broader community to act in a
socially responsible manner, for the benefit of all South Africans. Contributions to
selected training, sports and community service related projects continue. The Group has
adopted appropriate BEE and employment equity, training and procurement policies.
DIRECTORS
Other than the appointment of Mr. Brian Finch as a director of the Company effective from
8 October 2015, there were no changes to the composition of the Board during the period
under review.
PROSPECTS
The landmark agreement with ARC is effective 1 June 2016. A positive contribution in the
final two months of this financial year is expected and will contribute meaningfully to
group earnings thereafter.
The group's investment in Afribet is not expected to contribute to profits in this financial
year, but is expected to do so in the medium and long term.
The Group's substantial investment in growing Betting World's footprint is yielding results
with returns expected to continue.
Interbet will contribute positively for a full year in 2016 compared with nine months
in 2015.
With a strong balance sheet, there is substantial headroom for investment in new growth
vectors.
Phumelela management are vigorously pursuing diversification and expansion opportunities
locally and abroad, as evidenced recently by the investment in Interbet and Afribet and
the proposed investment in Supabets and are further expanding visual broadcasts and Tote
betting in existing as well as new markets.
The group has had a successful first half and is targeting real growth in earnings per
share for the remainder of the financial year.
Any forward looking statements of forecasts contained in these results have not been
reviewed or reported on by the group's auditors.
CASH DIVIDEND TO SHAREHOLDERS
Notice is hereby given that the Board has declared an interim gross cash dividend from
income reserves of 34 cents per share (28,90 cents per share net of dividend withholding
tax at a rate of 15%) payable to shareholders recorded in the register on Friday,
20 May 2016. The issued share capital at the declaration date is 77 101 885 ordinary
shares. Shareholders are advised that the last date to trade "cum distribution" will be
Friday 13 May 2016. As from commencement of business on Monday 16 May 2016 all trading in
Phumelela shares will be "ex dividend". Payment will be made on Monday 23 May 2016. Share
certificates may not be dematerialised or rematerialised between Monday 16 May 2016 and
Friday 20 May 2016, both days inclusive. The Company's tax reference number is
9171/393/84/7.
For and on behalf of the Board
M P Malungani W A Du Plessis
Chairman Chief Executive Officer
Turffontein, Johannesburg
15 April 2016
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Jan 31 Jan 31 Jul
% 2016 2015 2015
Change R'000 R'000 R'000
Income
- Local operations 18 659 746 561 124 1 067 444
- International operations 29 126 726 98 550 198 761
19 786 472 659 674 1 266 205
Gross betting income
- Local operations 17 617 803 525 921 1 044 329
Net betting income
- Local operations 18 497 189 422 745 840 506
Other operating income
- Local operations 6 119 576 112 331 230 269
- International operations 26 132 200 104 611 205 416
Investment income
- Local operations (58) 503 1 184 1 692
- International operations (96) 16 362 382
Net income 17 749 484 641 233 1 278 265
Operating expenses and overheads
- Stakes 3 (96 790) (93 971) (189 772)
- Local operations 21 (495 217) (410 764) (819 763)
- International operations 44 (95 447) (66 482) (139 604)
Profit before finance costs,
income tax, depreciation
and amortisation (11) 62 030 70 016 129 126
Depreciation and amortisation 18 (28 860) (24 365) (49 825)
Profit from operations (27) 33 170 45 651 79 301
Finance costs
- Local operations 78 (3 412) (1 919) (5 828)
Profit before share of profit of
equity accounted investees (32) 29 758 43 732 73 473
Equity accounted investee impaired (8 545)
Share of profit of equity
accounted investees 119 43 413 19 866 47 060
Profit before fair value adjustment 15 73 171 63 598 111 988
Fair value adjustment to investment 2 001 (4 607) (12 753)
Profit before income tax expense 27 75 172 58 991 99 235
Income tax expense 10 (10 199) (9 261) (19 713)
Profit for the period 31 64 973 49 730 79 522
Other comprehensive income net of taxation
Items that may subsequently be
reclassified to profit or loss
- Exchange differences on translating
foreign operations (60) 105 262 780
Total comprehensive income for the period 30 65 078 49 992 80 302
Profit attributable to:
Ordinary equity holders of the parent 31 64 973 49 723 79 516
Non-controlling interest 7 6
Profit for the period 31 64 973 49 730 79 522
Total comprehensive income attributable to:
Ordinary equity holders of the parent 30 65 078 49 985 80 296
Non-controlling interest 7 6
Total comprehensive income for the period 30 65 078 49 992 80 302
Earnings per ordinary share (cents)
- Basic 32 87,18 65,96 105,98
- Diluted 31 82,66 63,23 101,14
SUPPLEMENTARY STATEMENT OF COMPREHENSIVE INCOME INFORMATION
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Jan 31 Jan 31 Jul
% 2016 2015 2015
Change R'000 R'000 R'000
Reconciliation of headline earnings
Earnings attributable to equity
holders of parent 31 64 973 49 723 79 516
Adjusted for:
Equity accounted investee impaired 8 545
Net loss/(profit) on disposal of property,
plant and equipment 28 (283) (315)
Tax effect (8) 79 88
Headline earnings 31 64 993 49 519 87 834
Headline earnings per share (cents) 33 87,21 65,69 117,06
Diluted headline earnings per share (cents) 31 82,69 62,97 111,72
Net asset value per share (cents) 7 636,17 595,91 600,79
Reconciliation of headline earnings
to adjusted headline earnings
Headline earnings 64 993 49 519 87 834
Fair value adjustment to investment (2 001) 4 607 12 753
Tax effect 373 (2 380)
Legal and consulting fees associated with
combating abuse of intellectual, property
and related legal matters 1 569 11 045
Tax effect (439) (3 093)
Adjusted headline earnings 19 64 495 54 126 106 159
Adjusted headline earnings per share (cents) 21 86,54 71,80 141,48
Dividend to shareholders
Interim dividend
Dividend per ordinary share (cents) 21 34,00 28,00 28,00
Final dividend
Dividend per ordinary share (cents) 60,00
Number of shares in issue 74 525 485 74 438 486 74 525 485
Weighted average number of shares
in issue for basic and headline earnings
per share calculation 74 525 485 75 380 149 75 032 549
Weighted average number of shares
in issue for diluted earnings
per share calculation 78 599 551 78 641 878 78 616 685
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
as at as at as at
31 Jan 31 Jan 31 Jul
2016 2015 2015
R'000 R'000 R'000
ASSETS
Non-current assets 588 338 536 438 575 088
Property, plant and equipment 452 723 426 342 444 682
Goodwill 12 362 12 362 12 362
Intangible assets 52 127 48 944 52 104
Interest in equity accounted investees 56 396 27 111 51 732
Investments 692 696 695
Long-term loan 11 128 13 995 10 603
Deferred taxation asset 2 910 6 988 2 910
Current assets 275 573 263 440 200 751
Inventories 1 864 964 879
Trade and other receivables 148 771 160 341 100 812
Pension fund surplus 7 075 973 7 075
Income tax receivable 10 082 9 177 10 941
Assets held for sale 25 047 25 022 23 046
Cash and cash equivalents 82 734 66 963 57 998
Total assets 863 911 799 878 775 839
EQUITY AND LIABILITIES
Total equity 474 106 443 887 447 743
Share capital and premium 1 863 1 862 1 863
Retained earnings 472 001 442 105 445 743
Non-distributable reserves 242 (381) 137
Equity attributable to ordinary shareholders 474 106 443 586 447 743
Non-controlling interest 301
Non-current liabilities 68 226 32 994 54 735
Deferred taxation liability 4 652 2 555 4 652
Finance lease liability 179 693 488
Borrowings 63 395 29 746 49 595
Current liabilities 321 579 322 997 273 361
Trade and other payables 278 236 264 555 249 707
Bank overdrafts 21 831 30 290 11 537
Short term borrowings 2 400 13 691 2 400
Contingent consideration liability 707 1 056 707
Income tax payable 35 1 625
Betting dividends payable 18 405 13 370 7 385
Total equity and liabilities 863 911 799 878 775 839
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Jan 31 Jan 31 Jul
2016 2015 2015
R'000 R'000 R'000
Net cash (outflow)/inflow from operating activities (431) (20 642) 3 761
Cash generated by operations 67 537 69 719 117 405
Movements in working capital (9 395) (29 614) (23 446)
Cash generated by operating activities 58 142 40 105 93 959
Income tax paid (10 965) (15 127) (19 579)
Investment income received 519 1 546 1 598
Finance costs paid (3 412) (1 919) (5 828)
Dividends to shareholders (44 715) (45 247) (66 389)
Net cash inflow/(outflow) from
investing activities 1 277 (31 086) (54 057)
Acquisition of property, plant and
equipment and intangible assets (37 585) (31 225) (84 037)
Proceeds on disposal of property, plant and
equipment and intangible assets 633 338 1 322
Investment in equity accounted investee
and contingent settlements on investments 3 (34 313) (33 801)
Loans (advanced)/recouped (525) 6 404 10 271
Dividends received from equity accounted investees 38 751 27 710 52 188
Net cash inflow/(outflow) from financing activities 13 491 (6 765) 1 073
Finance lease payments (309) (335) (474)
Non-controlling interest acquired (130)
Net borrowings raised 13 800 34 719 43 278
Shares repurchased (41 149) (41 601)
Net increase/(decrease) in cash and cash equivalents 14 337 (58 493) (49 223)
Effect of exchange fluctuations on cash
and cash equivalents 105 262 780
Cash and cash equivalents at beginning of period 46 461 94 904 94 904
Cash and cash equivalents at end of period 60 903 36 673 46 461
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity
attribu-
Non- table to Non-
distri- ordinary control-
Share butable Retained share- ling Total
Capital reserves earnings holders interest equity
R'000 R'000 R'000 R'000 R'000 R'000
Balance at 31 July 2014 1 890 (643) 477 250 478 497 294 478 791
Total comprehensive income
for the period 262 49 723 49 985 7 49 992
- Profit for the period 49 723 49 723 7 49 730
- Foreign currency
translation reserve 262 262 262
Transactions with owners
recorded directly in equity
- Share based payment 1 500 1 500 1 500
- Shares repurchased (28) (20 990) (21 018) (21 018)
- Shares issued in terms of
executive share option scheme (20 131) (20 131) (20 131)
- Dividends paid to equity
holders (45 247) (45 247) (45 247)
Balance at 31 January 2015 1 862 (381) 442 105 443 586 301 443 887
Total comprehensive income
for the period 518 29 793 30 311 (1) 30 310
- Profit for the period 29 793 29 793 (1) 29 792
- Foreign currency translation
reserve 518 518 518
Transactions with owners
recorded directly in equity
- Share based payment (4 730) (4 730) (4 730)
- Loss on purchase of
non-controlling interest (130) (130) (130)
- Shares repurchased (27) 1 199 1 172 1 172
- Shares issued in terms of
executive share option scheme 28 (1 652) (1 624) (1 624)
- Dividends paid to
equity holders (20 842) (20 842) (300) (21 142)
Balance at 31 July 2015 1 863 137 445 743 447 743 447 743
Total comprehensive income
for the period 105 64 973 65 078 65 078
- Profit for the period 64 973 64 973 64 973
- Foreign currency
translation reserve 105 105 105
Transactions with owners
recorded directly in equity
- Share based payment 6 000 6 000 6 000
- Dividends paid to
equity holders (44 715) (44 715) (44 715)
Balance at 31 January 2016 1 863 242 472 001 474 106 474 106
Directors: M P Malungani (Chairman), W A du Plessis* (Group Chief Executive),
A W Heide* (Finance Director and COO), R Cooper, B P Finch,
M J Jooste, B Kantor, S K C Khampepe, N J Mboweni (Mrs),
V J Moodley*, Dr E Nkosi, M L Ramafalo*, J A Stuart*,
C J H van Niekerk, J B Walters
(*Executive)
Company Secretary: F Moloi (Mrs)
Sponsor: Investec Bank Limited
Registered Office: Turffontein Racecourse, 14 Turf Club Street, Turffontein
Transfer Secretaries: Computershare Investor Services Pty Ltd
Share code: PHM
ISIN: ZAE000039269
Sponsor: Investec Bank Limited
Web site: www.phumelela.com
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