| Tue 26 Feb 2002, 0:00 | | Tourvest - Interim Results |
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TOURISM INVESTMENT CORPORATION LIMITED
("TOURVEST")
Registration number 1996/008144/06
Share code: TRT ISIN code: ZAE000012472
INTERIM RESULTS
for the six months ended 25 December 2001
Highlights
- Turnover up 23%
- Headline EPS up 14%
- R215 million in cash
- Attributable income up 14%
- EPS up 16%
- Cash from operations R84m
Income statement for the period ending
6 months 6 months 12 months
25 Dec 31 Dec 30 June
2001 2000 2001
Unaudited Unaudited Audited
(Restated) (Restated)
R000s R000s R000s
Turnover 604 820 493 442 1 010 379
Operating income 65 458 59 216 129 266
Net interest received 4 608 2 496 6 225
Profit before taxation 70 066 61 712 135 491
Taxation 22 448 20 226 43 941
Profit after taxation 47 618 41 486 91 550
Share of associated company
income 195 269 1 316
Outside shareholders'
interest (4 706) (3 981) (8 613)
Attributable income 43 107 37 774 84 253
Earnings per share (cents) 5,7 4,9 10,9
Headline earnings per
share (cents) 5,8 5,1 11,8
Dividend per share (cents) 0 0 0
Weighted shares in
issue (000s) 752 896 766 062 771 707
Depreciation (R000s) 12 026 9 005 23 010
Headline earnings
adjustments:
Impairment provisions
(R000s) 0 0 9 582
Profit on sale of
associate (R000s) 0 0 (5 000)
Capital losses (profits)
(R000s) (300) 100 354
Amortisation of goodwill
(R000s) 711 900 1 804
Balance sheet as at
25 Dec 31 Dec 30 June
2001 2000 2001
Unaudited Unaudited Audited
R000s R000s R000s
ASSETS
Non-current assets
Property, plant and equipment 97 677 90 025 92 479
Goodwill 28 015 9 967 12 772
Deferred tax 49 814 23 548 53 140
Financial assets 21 776 75 359 75 040
Unlisted investments 29 697 27 132 42 324
Current assets
Inventories 115 881 90 455 84 769
Trade and other receivables 150 718 143 717 137 072
Cash and bank balances 243 211 148 132 171 413
Foreign notes held 90 961 59 266 40 898
Total assets 827 750 667 601 709 907
EQUITY AND LIABILITIES
Capital and reserves
Issued capital 27 581 85 662 78 517
Non-distributable reserves 50 809 23 051 54 394
Accumulated profits 303 731 202 257 257 307
Minority interest 20 064 17 128 21 668
Non-current liabilities
Interest-bearing borrowings 9 218 3 845 9 946
Current liabilities
Trade and other payables 258 191 204 074 169 711
Provisions 23 173 24 660 38 732
Bank borrowings 36 804 43 763 24 253
Loans re foreign notes held 81 929 53 415 33 903
Current portion of
interest-bearing
borrowings 146 318 320
Taxation payable 16 080 9 404 21 132
Dividends payable 24 24 24
Total equity and liabilities 827 750 667 601 709 907
Net asset value per
share (cents) 48,47 39,51 46,99
Net tangible asset value per
share (cents) 44,91 38,31 45,45
Shares in issue (000s) 830 350 830 350 830 350
Capital commitments 9 625 11 178 11 463
Operating lease commitments 118 963 104 348 138 139
Statement of changes in equity
Share Non-
capital Accumu- distri-
and lated butable Total
premium profit reserve equity
(Restated) (Restated)
R000s R000s R000s R000s
Balance 30 June 2000 85 662 162 953 24 581 273 196
Income to 30 June 2001 84 253 84 253
Set-off of shares
repurchased
in terms of buyback (7 145) (7 145)
Deferred tax arising on
set-off of trademarks 36 428 36 428
Transfer from non-
distributable
reserve 10 101 (10 101) 0
Non-distributable reserve
arising on writeback of
vendor creditors 3 386 3 386
Capital profits 100 100
Balance 30 June 2001 78 517 257 307 54 394 390 218
Income to
31 December 2001 43 107 43 107
Set-off of shares
repurchased in
terms of special
resolution (50 936) (50 936)
Transfer from non-
distributable
reserve 3 317 (3 317) 0
Capital losses (268) (268)
Balance 25 December 2001 27 581 303 731 50 809 382 121
Cash flow statement for the period ending
6 months 6 months 12 months
25 Dec 31 Dec 30 June
2001 2000 2001
Unaudited Unaudited Audited
R000s R000s R000s
Cash generated from operating
activities 84 311 46 210 88 859
Cash generated by operations 75 818 67 391 150 762
Net interest received 4 608 2 496 6 225
Dividend received 0 0 0
Change in working capital 28 546 9 843 (29 930)
Taxation paid (24 661) (33 046) (38 198)
Dividend paid 0 (474) 0
Cash flow from investing
activities (24 264) (56 200) (54 794)
Fixed asset replacement - net (13 330) (9 567) (25 518)
Net acquisition of
operations and
investments (10 934) (46 633) (26 894)
Net acquisition of
financial assets 0 0 (2 382)
Cash flow from financing
activities 1 237 580 460
Payments for shares repurchased 0 0 (7 145)
Increase (reduction) in long-term
liabilities (902) 580 7 286
Loan to share option trust 2 139 0 319
Net movement in cash and cash
equivalents 61 284 (9 410) 34 525
Segmental analysis
Pre-tax Net assets
Turnover profits employed
R000s % R000s % R000s %
Six months to
December 2001
Travel and
Financial Services 385 113 64 30 339 43 200 954 58
Retail Merchandise 219 707 36 39 727 57 143 719 42
604 820 100 70 066 100 344 673 100
Six months to
December 2000
Travel and
Financial Services 355 045 72 31 801 52 166 315 51
Retail Merchandise 138 397 28 29 911 48 161 783 49
493 442 100 61 712 100 328 098 100
Commentary
Tourvest is pleased to report a successful half-year against a background of
severe disruption in the travel industry following the 11 September tragedy
in the United States.
Within the Group significant changes have been made to the management
structure as a consequence of the Imperial Holdings acquisition of a
controlling shareholding in Tourvest during the reporting period.
As a consequence of Imperial Holdings Limited having acquired a controlling
interest in Tourvest we have changed our year-end to 25 June to align with
that of Imperial. At the interim stage this means that our reporting period
covers 25 weeks as opposed to 26 in 2000.
Achievements include:
- Headline earnings growth per share of 14%
- Restoration of shareholder value by a substantial increase in the share
price of 50% over that prevailing pre-acquisition
- Strong repositioning for the Group's future with the appointment of a well-
motivated management team
- Cash generated from operations of R84 million resulting in net cash
resources of R215 million
- Tourvest acquired 30% of Gametrackers (Pty) Limited to bring our
shareholding to 90%
- Tourvest acquired 40% of Safari Plans (Pty) Limited to bring our
shareholding to 100%
- Tourvest acquired 70% of Associated Tour Operators (Pty) Limited
- Tourvest Holdings (Pty) Limited repurchased 42 million shares from the
Share Trust in terms of a special resolution
This was achieved by an increase in revenues of 23% over the prior year. Our
operating margin was 11% compared to 12% in the prior year. This
deterioration was directly attributable to the USA events. Our profit before
tax improved by 14%.
The tragedy of 11 September has impacted our pre-tax profits by an estimated
R12 million based on the pattern of income up to that date.
South Africa is well regarded overseas as an attractive destination and the
devaluation of the rand provides a major financial attraction for overseas
visitors. Outbound travel was severely impacted following 11 September and
was further depressed after the rand fall. This impact on our outbound
division will continue during the second half of the year.
The interim trading period can thus be divided into two distinct phases
namely:
- prior to 11 September 2002, and
- post 11 September 2002
Trading conditions during phase (a) were buoyant and during phase (b) were
extremely tough until December.
As December is an excellent trading month the resultant loss of trading days
due to the 25th cut-off has meant a reduction in attributable income of
qR2,3 million (q6% at EPS level).
Despite this factor the Group has achieved growth in:
- attributable income of 14%
- earnings per share of 16%
- headline earnings per share of 14%
The events of 11 September had a significant effect on the Group resulting
in:
- cancellation of tours
- corporate bans on travel
- general reluctance by consumers to travel
The deterioration of the rand, whilst extremely beneficial to some of our
businesses, impacted badly on our outbound tour operating business.
In addition, the Zimbabwe crisis remains a significant detractor for travel
into the region.
Travel and Financial Services division
American Express Forex reported satisfactory results with a marked
improvement in December.
The Outbound operations experienced a very difficult period. The two retail
travel companies, Seekers and American Express Travel, were severely
affected by the 11 September events. The Outbound tour operators, namely
Absolute and ATO, were also affected by this and had the additional problem
of the rand devaluation to take into account. Many South Africans chose to
stay within the region as opposed to travelling abroad during December.
The Inbound operations performed well despite the lack of Asian and American
tourists in the second quarter of the half-year. The British and European
market remained buoyant with volumes increasing in November and December.
South Africa is presently being perceived as a safer and inexpensive
destination.
Retail Merchandising division
The Retail Merchandising division produced pleasing results.
In October 2001 we commenced operating the stores in the National Parks,
which have been branded as The Parks Shop. Initial results have been
encouraging.
In September 2001 we opened The Diamond Works in Cape Town. This is an
integrated jewellery retail and manufacturing store, which is performing
satisfactorily.
Board of directors
During the period the following changes took place:
E de Jager Appointed 21 September 2001
A Geldenhuys Appointed 21 September 2001
SK Griessel Resigned 15 July 2001
M Gutkin Resigned 15 July 2001
MJ Kaplan Resigned 15 July 2001
WG Lynch Appointed 15 July 2001
IC Meltzer Appointed 21 September 2001
GB Rubenstein Resigned 15 July 2001
CE Scott Appointed 15 July 2001
With effect from 15 July 2001 BW Gutkin resigned as Non-Executive Chairman
and was replaced by WG Lynch.
CE Scott was appointed Chief Executive Officer.
Subsequent to the period end JMP Desmidt and JM Shabangu have resigned from
the board.
Results
The results were below budget for the period; however, taking into
consideration the circumstances as outlined above, we believe that the
Group's performance has been pleasing.
Prospects
We are confident that there is a recovery in the tourism sector and that
South Africa is well placed, in this instance, to continue benefiting from
the weakness of the rand.
Should Zimbabwe be restored to normality from a political standpoint,
perceptions of the southern African region as a whole will improve.
Provided there are sufficient airline seats and airfares remain relatively
stable, the ongoing marketing efforts of South African Tourism should pave
the way for increased international travel to South Africa and,
significantly, the return of United States visitors.
Tourvest is aiming for satisfactory growth for the full year.
Dividend
The board decided at a meeting in November 2001 that, bearing in mind the
circumstances at the time, no dividend would be declared in respect of the
year ended 30 June 2001. The declaration of a dividend for the current year
will be decided upon approval of the year-end results.
For and behalf of the board
WG Lynch CE Scott
Chairman Chief executive officer
Notes
1. Compliance with GAAP
These results have been compiled in accordance with South African Statements
of Generally Accepted Accounting Practices.
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 2001, except that owner-occupied properties
are now depreciated in terms of AC135 and leave pay accruals now include
bonuses in terms of AC116. The effect of the change is not material.
The Group previously charged the deferred taxation effect of the
amortisation of trademarks directly to a non-distributable reserve. This
charge is now recorded as a charge against earnings and a related amount is
appropriated from non-distributable reserves to accumulated profits. The
effect of the charge is to increase taxation expense for the year ended 30
June 2001 by R10 101 000.
There is no effect on non-distributable reserves and accumulated profits at
30 June 2001 and there is no effect on the financial position at 30 June
2001.
The prior-year figures have been restated to reflect this change.
3. Seasonal impact on interim results
Traditionally the second half of the financial year is a stronger trading
period than the first half.
This year the interim trading period was 25 weeks (F2001 26 weeks). The
second half will be 26 weeks. The USA tragedy also disrupted performance in
the interim period.
4. Changes in estimates
No changes in estimates occurred during the period under review.
5. Material subsequent events
No material events have occurred between 25 December 2001 and the date of
this report.
The group has R35 million invested in short-term deposits with Saambou. It
is anticipated that these deposits will be fully recovered.
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
WG Lynch (Chairman), CE Scott (Chief Executive)*, IWC Hay*, E de Jager*,
A Geldenhuys*, IC Meltzer*, BW Gutkin *Executive
Company secretary: D Goodman
