| Fri 13 Sep 2002, 10:24 | | Gold Reef Casino Resorts - Unaudited Interim Finan |
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GOLD REEF CASINO RESORTS - UNAUDITED INTERIM FINANCIAL RESULTS FOR THE SIX-
MONTHS ENDED 30 JUNE 2002
Gold Reef Casino Resorts Limited
(Registration number 1989/002108/06)
Share Code: GDF
ISIN Code: ZAE 000028338
HIGHLIGHTS
- Attributable profit of R45,1 million
- HEPS of 25.4 cents
- NAV per share of 345 cents
- Mossel Bay casino license awarded
UNAUDITED INTERIM FINANCIAL RESULTS FOR THE SIX-MONTHS ENDED 30 JUNE 2002
COMMENTS
Introduction
The directors of Gold Reef Casino Resorts Limited ("GRCR") are pleased to
present the interim financial results for the six-months ended 30 June 2002
("the interim period").
These unaudited interim financial results have been prepared in accordance with
South African statements of Generally Accepted Accounting Practice. The
accounting policies used in the preparation of the unaudited interim financial
results are consistent with those used in the annual financial statements for
the year ended 31 December 2001.
GRCR`s continued growth during the interim period was reflected in sturdy profit
levels and a steady rise in headline earnings per share (HEPS).
The Casinos Austria transaction
As the acquisition by GRCR of the South African casino assets of Casinos Austria
International Holding GmbH ("Casinos Austria") and the specific issue of shares
for cash announced on 7 March 2002 ("the Casinos Austria transaction") remain
subject to the fulfilment of two outstanding conditions precedent, the results
for the interim period do not incorporate the effects of the transaction. The
two outstanding conditions precedent are the approvals of shareholders and of
the competition authorities to the extent required. A circular detailing the
Casinos Austria transaction and a notice of general meeting to seek approval of
the transaction will be posted today. A ruling from the competition authorities
to the effect that their approval is not required has been sought. The ruling is
expected shortly.
As evidenced by the diluted earnings per share of 24.7 cents, arising primarily
from the potential issue of 35,600,000 shares to Casinos Austria, the Casinos
Austria transaction would not have enhanced earnings for the interim period.
However, the alignment of GRCR and Casinos Austria as a result of the
transaction has significant strategic impact going forward.
The Interim Period
Gold Reef City Casino continued to trade strongly and exceeded its performance
in the previous comparative period. A resilient gaming market and successful
marketing initiatives contributed to improved revenues during the latter part of
the interim period. However, the increase in interest rates impacted on the
casino`s bottom line and consequently on GRCR`s equity-accounted profits. Gold
Reef City Theme Park also performed well, benefiting from completion of all
major developments.
The effects of its rationalisation exercise in 2001 resulted in Casino Mykonos
exceeding targets. Development at Golden Horse in Pietermaritzburg was completed
with the opening of the science centre and museum. Initial revenue levels were
below expectations but are showing signs of strengthening.
Casino management company CAI Gold Reef Management ("CAI GoldReef") continued to
pursue new management contracts and showed strong growth in revenues.
Financial Results
Attributable profit of R45,135 million grew 14,7% from R39,367 million for the
half -year period ended 30 June 2001. Healthy EBITDA percentages for all three
casinos reflect ongoing cost discipline.
HEPS increased 14,4% to 25.4 cents from 22.2 cents, reflecting the robust
performances of Gold Reef City and Casino Mykonos as well as overall effective
cost-control.
Gold Reef City Casino`s contribution to GRCR`s equity-accounted profits of
R20,561 million was up 11% from the previous comparative period, after payment
of interest on shareholders` loans of R21,532 million. Casino Mykonos achieved a
trading profit of R1,85 million for the interim period. Interest was levied on
shareholders` loans in the same amount. No interest was charged on shareholders`
loans to Golden Horse, reducing interest received by GRCR to R24,439 million
from R29,867 million.
Net asset value per share of 345 cents was 16,6% higher than the 296 cents at 30
June 2001. At 30 June 2002 GRCR had no interest bearing liabilities.
New Projects and Future Developments
In line with strategy announced at year-end GRCR acquired for
R10 million a 10% equity interest and loan account in the company which was
granted the casino licence for Mossel Bay. CAI GoldReef was awarded the casino
management contract. It is intended that the casino be open in time for the
December holiday season.
GRCR`s bid for a casino licence at Welkom in the Free State is still pending.
Any investment will not be material.
Outlook
The Casinos Austria transaction will realise immediate cash-flow benefits for
GRCR and enable the company to endeavour to secure casino projects and
management contracts locally and internationally.
GRCR anticipates that traditionally stronger market conditions during the second
half of the year will sustain the recent improvement in revenues at Gold Reef
City Casino, with similar positive expectations for Casino Mykonos during the
holiday season. Management does not expect that the new Durban casino to be
opened in December will impact materially on Golden Horse. While the Mossel Bay
casino will have no significant effect on results to year-end it is expected to
contribute to profits in 2003.
Possible offer, proposed pro-rata share repurchase and renewal of cautionary
announcement
As announced on 3 September 2002 a consortium including the controlling
shareholders of GRCR is considering making an offer to acquire GRCR`s assets and
assume its liabilities for a consideration equivalent to R3,25 per share (less
STC and transaction costs of approximately 5 cents per share), a significant
premium over the share price at the date of the announcement.
GRCR`s proposed pro-rata share repurchase of 8% of its issued share capital at
R3,00 per share referred to in the announcement dated 20 March 2002, has been
placed on hold until the consortium indicates whether or not it will make the
offer. If the offer is not made, or if it is made but not accepted, GRCR will
proceed with the proposed repurchase. The consortium is expected to make an
announcement on or about 31 October 2002.
Shareholders are advised to continue exercising caution in their share dealings
pending further announcements.
Dividend
Pending the decision of the consortium in respect of its proposed offer and the
consequent effect on GRCR`s proposed pro-rata share repurchase, no dividend has
been declared for the interim period.
On behalf of the Board.
12 September 2002
Directors: M Krok (Chairman)*; A J Aaron*; J S Friedman; S B Joffe; R J Khoza*;
A Krok**; M Z Krok*; S Krok**; B J Schutte
* Non-executive director ** Alternate director
Registered office: Gold Reef City, Gate 4, Northern Parkway, Ormonde, 2157
(Private Bag X1890, Gold Reef City, 2159) www.grcresorts.co.za
Transfer secretaries: Computershare Investor Services Limited, 11 Diagonal
Street, Johannesburg 2001 (PO Box 1053, Johannesburg, 2000)
Group Income Statement
% Unaudited Unaudited 6 Audited
increase 6 months months 12
ended 30 ended 30 months
June 2002 June 2001 ended 31
December
R`000 R`000 2001
R`000
Net operating profit 24,904 28,438 64,092
Taxation 6,404 8,531 17,077
Net profit after taxation 18,500 19,907 47,015
Share of results in associates 36,9 26,635 19,460 35,792
Akani Egoli - (Gold Reef City) 20,561 18,517 37,595
Akani Msunduzi - (Golden Horse) 3,108 - (3,840)
West Coast Leisure - (Casino - - (955)
Mykonos)
CAI Gold Reef Management 2,966 943 2,992
Profit attributable to 14,7 45,135 39,367 82,807
shareholders
Number of shares in issue (000) 177,941 177,262 177,262
Weighted average number of 177,941 177,262 177,262
shares in issue (000)
Earnings per share (cents) 14,4 25.4 22.2 46.7
Headline earnings per share 14,4 25.4 22.2 46.7
(cents) 24.7 22.2 46.5
Diluted earnings per share
(cents)
Group Balance Sheet
Unaudited Unaudited Audited at
at 30 June at 30 31 December
2002 June 2001 2001
R`000 R`000 R`000
Assets
Non-current assets
Property, plant and equipment 149 202 188
Investment in associates 549,938 518,938 538,196
Akani Egoli 422,516 425,688 409,100
Akani Msunduzi 95,351 62,743 99,702
West Coast Leisure 7,305 9,257 6,837
CAI Gold Reef Management 24,766 21,250 22,557
Other Investments 2 500 2
Loan to share incentive trust 7,406 7,406 7,406
Deferred taxation 111 - 111
557,606 527,046 545,903
Current assets
Receivables and prepayments 3,792 494 1,140
Cash and cash equivalents 52,730 47,101 45,801
56,522 47,595 46,941
614,128 574,641 592,844
Equity and liabilities
Capital and reserves
Ordinary shareholders` equity 362,924 360,885 360,885
Non-distributable reserves 13,238 15,002 14,120
Retained earnings 237,479 149,654 192,344
613,641 525,541 567,349
Current liabilities
Payables and provisions 455 11,849 6,799
Bank overdraft 32 28,720 14,582
Taxation liabilities - 8,531 4,114
487 49,100 25,495
614,128 574,641 592,844
Net asset value per share (cents) 345 296 320
Group Statement of Changes in Equity
Unaudited Unaudited Audited 12
6 months 6 months months ended
ended 30 ended 30 31 December
June 2002 June 2001 2001
R`000 R`000 R`000
Share capital
Ordinary shares
- at the beginning of the period 3,545 3,545 3,545
- ordinary shares issued 13 - -
- at the end of the period 3,558 3,545 3,545
Share premium
- at the beginning of the period 357,340 357,340 357,340
- share premium raised 2,026 - -
- at the end of the period 359,366 357,340 357,340
Total share capital at the end of 362,924 360,885 360,885
the period
Non-distributable reserves
- at the beginning of the period 14,120 15,885 15,885
- NDR released (882) (883) (1,765)
- at the end of the period 13,238 15,002 14,120
Retained earnings
- at the beginning of the period 192,344 110,287 110,287
- net profit for the period 45,135 39,367 82,807
- prior year adjustment - - (750)
- at the end of the period 237,479 149,654 192,344
Group Cash Flow
Unaudited Unaudited Audited 12
6 months 6 months months
ended 30 ended 30 ended 31
June 2002 June 2001 December
2001
R`000 R`000 R`000
Cash flow from operating activities
Net operating profit 24,904 28,438 64,092
Non-cash items and other (25,273) (30,705) (56,339)
adjustments
Cash flow from trading activities (369) (2,267) 7,753
(Increase)/decrease in working (7,033) 603 (5,093)
capital
Cash flow from operating activities (7,402) (1,664) 2,660
Net interest received 24,439 29,867 56,903
Taxation paid (12,481) (17,875) (30,949)
Net cash generated by operating 4,556 10,328 28,614
activities
Cash flow from investing activities (9) (145) (2,556)
Cash flow from financing activities 16,932 (53,826) (56,863)
Net increase/(decrease) in cash and 21,479 (43,643) (30,805)
cash equivalents
Cash and cash equivalents at the 31,219 62,024 62,024
beginning of the period
Cash and cash equivalents at the 52,698 18,381 31,219
end of the period
Date: 13/09/2002 07:05:00 AM Produced by the JSE SENS Department
