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Cullinan Holdings - Results For The Year Ended 30 September 2002
Release Date: 28/11/2002 08:15:28 Code(s): CUL
Cullinan Holdings - Results for the year ended 30 September 2002
Cullinan Holdings Limited
(Registration number 1902/001808/06)
(Share code: CUL ISIN number: ZAE000013710)
Results for the year ended 30 September 2002
Headline earnings 2,7c per share
Net gearing eliminated
Group balance sheet
Reviewed year ended Audited year ended
30 September 30 September
2002 2001
R`000 R`000
ASSETS
Property, plant and equipment 22 009 53 808
Goodwill 13 416 11 219
Deferred taxation 6 000 3 000
Current assets 126 503 256 499
- Inventories 8 379 68 412
- Accounts receivable 50 056 117 898
- Cash resources 68 068 70 189
Total assets 167 928 324 526
EQUITY AND LIABILITIES
Ordinary shareholders` equity 24 414 7 110
Minority interest 29 11 720
Interest bearing term loans 27 716 39 814
Preference share capital 26 046 26 046
Long-term loans 0 8 393
Short-term loans 1 670 5 375
Current liabilities 115 769 265 882
Accounts payable 115 769 170 508
Bank overdrafts 0 95 374
Total equity and liabilities 167 928 324 526
Financial statistics
Net gearing (%) - 560,0
Current ratio 1,1:1 1,0:1
Net asset value per share (cents) 3,6 1,0
Group income statement
Reviewed Audited
year ended year ended
30 September 30 September
2002 2001
R`000 R`000
Revenue 138 613 428 321
Operating income/(loss)
- Continuing operations 20 985 14 928
- Discontinuing operations - (10 583)
Exceptional items (2 361) (26 109)
Net operating income/(loss) 18 624 (21 764)
Net financing charges (2 129) (7 657)
Income/(Loss) before taxation 16 495 (29 421)
Taxation - STC (324) (431)
Net income/(loss) after taxation 16 171 (29 852)
Minority interest (108) (427)
Net attributable income/(loss) 16 063 (30 279)
Ordinary shares (000`s)
- In issue 715 688 684 638
- Weighted average 684 638 648 638
Income/(Loss) per ordinary
share (cents) 2,3 (4,4)
Headline income/(loss)
per ordinary share (cents) 2,7 (0,6)
Determination of headline earnings
Net attributable income 16 063 (30 279)
Profit on sale of subsidiaries,
plant and equipment - 23 820
Reconstruction, reorganisation
and other expenses 2 361 2 289
Headline income/(loss) 18 424 (4 170)
Group statement of changes in equity
Reviewed Audited
year ended year ended
30 September 30 September
2002 2001
R`000 R`000
Ordinary share capital
Balance at beginning and
end of period 7 157 6 846
Share premium
Balance at beginning and end
of period 59 795 58 865
Revaluation reserve
Balance at beginning and
end of period 232 232
Share capital redemption
reserve fund
Balance at beginning
and end of period 20 876 20 876
Capital redemption reserve fund
Balance at beginning
and end of period 4 4
Accumulated loss
Balance at beginning of period (79 713) (49 434)
Attributable income/(loss)
for the period 16 063 (30 279)
Balance at end of period (63 650) (79 713)
Ordinary shareholders` equity 24 414 7 110
Summarised group cash flow
statement
Reviewed Audited
year ended year ended
30 September 30 September
2002 2001
R`000 R`000
Cash flows from operating
activities
Operating income/(loss) 18 624 (21 764)
Depreciation 5 914 15 029
Restructuring provisions and
exceptional items - 21 649
Other non-cash items (1 061) 657
Changes in working capital 18 044 4 109
Cash generated from
operating activities 41 521 19 680
Net interest (paid)/received 479 (4 523)
Taxation (paid)/refund (2 576) 1 350
Preference dividends paid (3 599) (3 155)
Net cash inflow from
operating activities 35 825 13 352
Cash flows from investing
activities
Investment to maintain
operations:
Additions to goodwill (2 140) -
Additions of property,
plant and equipment (15 933) (21 784)
Net proceeds from disposal
of property,
plant and equipment 2 881 8 824
Net proceeds from disposal of
subsidiaries and
investments (Note 3) 74 171 7 646
Net cash outflow from
investing activities 58 979 (5 314)
Cash flows from financing activities
Long-term liabilities
(repaid)/raised (2 793) (7 428)
Ordinary share capital
(repurchased)/issued 1 242 (2 500)
Redemption of preference shares - (20 000)
Net cash outflow from
financing activities (1 551) (29 928)
(Decrease)/Increase in cash
and cash equivalents 93 253 (21 890)
Cash and cash equivalents
at beginning of period (25 185) (3 295)
Cash and cash equivalents
at end of period 68 068 (25 185)
Notes
1. Basis of preparation
The annual financial statements are prepared in accordance with the
requirements of South African Statements of Generally Accepted Accounting
Practice. The measurement basis used is the historical cost basis which has been
consistently applied. The annual financial statements are prepared on the going
concern basis.
2. Segmental reporting
The directors are of the opinion that a segmental report is no longer
required as the Group`s Outdoor Lifestyle interests were sold with effect from 1
October 2001, and its operations now consist mainly of tourism and travel.
3. Disposal of subsidiaries and investments
The value of the assets and liabilities sold were as follows:
R`000
Property, plant and equipment 36 934
Inventories 59 225
Accounts receivable 69 466
Accounts payable (71 595)
Long-term liabilities (9 305)
Bank overdrafts (45 421)
39 304
Minorities interest (10 554)
Total purchase price 28 750
Add overdrafts disposed of 45 421
Cash flow on disposal 74 171
Comments
Group Restructure
The past year has been an eventful one. The group`s loss making outdoor
lifestyle investments were sold with effect from 1st October 2001. As part of
this transaction a controlling interest in the group was acquired by Travcorp
Financial Services Limited, an investment company that is part of the
internationally based tourism and travel group, the Travel Corporation Limited.
The Travel Corporation is a significant player in the world travel industry. It
owns, among other interests, Trafalgar Tours, Insight Tours and Contiki Holidays
all of which are coach based holiday brands that are well known throughout the
English speaking world.
The Cullinan group is now focused on travel and tourism in Southern Africa. The
spread of interests includes incoming and outgoing wholesale tour operators,
coach touring, excursions and sightseeing, together with leisure and corporate
travel retailers that trade under the brand names of Thompsons, Pentravel and
Richard Bailey.
All bank borrowings have been eliminated, and at the year end positive cash
balances amounted to R67, 5 million
Overview of Operations
Inbound Tourism and Touring
Thompsons South Africa, the Incoming division, had a very good year. Traffic and
turnover has increased from all major markets, many of whom are experiencing
difficult times at home. The Touring division, which sells sightseeing and
overnight tours and excursions, has been a major beneficiary of this volume
increase. The growth in turnover has not been achieved by acquisition or by the
addition of any major new customers, but from organic growth of long standing
partners. Their business to Southern Africa is now becoming more significant and
attractive, and therefore a greater emphasis is being put into the marketing of
Southern Africa as a holiday destination. This augurs well for the future growth
of this division.
Outbound Tourism
Despite world terrorism and the collapse of the rand that dictated extensive
changes in its product mix, Thompsons Tours, the Outbound division, has had its
best year to date. The outgoing industry is currently over traded which is
reflected in the constant pressure on margins. The industry is in need of
structural adjustment, and this will be driven by the growing move to electronic
transactions. Consistent and ongoing investment in systems is required to be
successful. The group`s expenditure in this area is starting to yield results,
but is a long way from completion. Substantial resources continue to be
allocated to this area. The market for outbound travel is remarkably resilient
and our brands Thompsons and Pentravel are well placed to capitalise on this
demand.
Retail
The corporate retailers Thompsons Travel and Richard Bailey had a steady year
showing an inflation-related increase in profits.
Pentravel, a retail specialist in leisure travel, suffered a dramatic drop in
turnover after the September 11th tragedy. It has since recovered and has turned
the loss of the first 6 months into a profit for the full year.
Cullinan Business Systems (CBS)
Our technology division CBS, is currently installing the group`s new integrated
IT system which will establish a common operating platform for all divisions.
This will in due course lead to higher productivity in this all-important part
of our business.
Manex
The Manex results were steady. It enjoyed strong sales in the local yacht
building industry, which were slightly tarnished by an indifferent year in the
scuba diving division, where it is dependent on imported stock that was
adversely effected by our weak currency. To achieve its potential it is looking
to expand through acquisition or merger.
Prospects
The forward picture for the inbound tourism business remains bullish. However
capacity constraints within the Southern African tourism industry may inhibit
short-term growth. The long-term prospects are excellent as key partners in all
major markets are now starting to treat Southern Africa as an important
destination in their product range. These prospects will improve further as
South Africa moves from being an exotic to a more general holiday destination.
The Outbound business, although culturally mature, is in the throes of technical
change with the Internet presenting simultaneous opportunities and threats. The
expenditure required to stay in the game is high, but thus far has been
worthwhile. The Thompsons Internet sites are now starting to produce meaningful
revenue. The Thompsons and Pentravel brands are well known and continued growth
is expected from this division
The retail businesses together with Manex are small but steady. Neither is
expected to produce exceptional growth in the coming year.
The travel and tourism industry is suffering a downturn in many parts of the
world. We believe that this will lead to opportunities for growth through
acquisition. Your company will be actively pursuing these opportunities.
The new financial year has started well and should current trends carry through,
the growth achieved historically will continue.
In conclusion I would like to thank all of our staff, who in this highly service
orientated environment, have performed admirably. Andre Kruger, the Thompsons
Financial Director of long standing is retiring. We thank him for the major
contribution that he has made to the development of the Travel and Touring
business.
A A Thompson M Ness
Chief Executive Officer Chairman
27 November 2002
Auditors
BDO Spencer Steward (Jhb) Inc. will continue to act as auditors to the Company.
A preliminary audit review report is available for inspection. The audited
annual financial statements will be mailed to shareholders in December 2002.
Directors
MA Ness (Chairman)*, VET O`Hana, DD Hosking **, AA Thompson, QA Southey,
Company Secretary: RS Gordon
* British ** New Zealand - Non Executive
Registered office
1st Floor, Dunkeld West Centre, 277 Jan Smuts Avenue, Dunkeld West
Transfer secretaries
Computershare Investor Services Limited, 8th Floor, 11 Diagonal Street,
Johannesburg, 2001
(PO Box 1053, Johannesburg, 2000)
For further information on group activities, please write to:
The Group Secretary, Cullinan Holdings Limited, PO Box 41032, Craighall, 2024
Sponsor: Doug Greenshields
Telephone: 082 560 1854
Contact: Sharon Preston
Telephone: 770 7724
Date: 28/11/2002 08:15:25 AM Produced by the JSE SENS Department
