| Tue 22 Mar 2005, 7:49 | | Results for the six months ended 31 December 2004 |
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Don Group Limited - Reviewed Interim Results For The Six Months Ended 31
December 2004
DON GROUP LIMITED
(`Don` or `the company`)
(Registration No. 1946/023123/06
Share code: Don ISIN: ZAE000008462
Reviewed interim results for the six months ended 31 December 2004
CONSOLIDATED INCOME STATEMENT
Reviewed Reviewed Audited
Six months Six months Year-end
31 Dec 2004 31 Dec 2003 30 June 2004
R000 R000 R000
Revenue 22 593 21 363 41 249
Operating profit 1 082 533 (1 217)
Net finance income 52 152 218
Depreciation (1 018) (1 190) (2 356)
Profit/(loss) before exceptional
items 116 (505) (3 355)
Exceptional items - - (758)
Profit/(loss) after exceptional
items 116 (505) (4 113)
Profit/(loss) attributable to
ordinary shareholders 116 (505) (4 113)
Headline profit/(loss) 116 (505) (3 355)
Number of ordinary shares in
issue (000s) 294 485 294 485 294 485
Weighted average number of
ordinary shares
in issue (000s) 294 485 294 485 294 485
Earnings/(loss) per share
(cents) 0,04 (0,17) (1,40)
Headline earnings/(loss) per
share (cents) 0,04 (0,17) (1,14)
Reconciliation of headline
profit/(loss)
Profit/(loss) attributable to
ordinary shareholders 116 (505) (4 113)
Impairment of hotel equipment - - 758
Headline profit/(loss) 116 (505) (3 355)
CONDENSED CONOLIDATED CASH FLOW R000 R000 R000
Cash utilised by operations (729) 3 797 2 139
Investing activities (159) (411) (659)
Financing activities (1 433) - -
Cash & cash equivalents -
beginning of year 4 710 3 230 3 230
Cash & cash equivalents -
end of year 2 389 6 616 4 710
CONSOLIDATED BALANCE SHEETS
Reviewed Reviewed Audited
Six months Six months Year-end
31 Dec 2004 31 Dec 2003 30 June 2004
R000 R000 R000
Assets
Non-current assets 19 952 21 041 19 324
Property, plant and equipment 17 040 19 604 17 887
Unlisted investment 1 437 1 437 1 437
Deposit paid on loan 1 475 - -
Current assets 8 594 10 660 9 507
Inventory and accounts
receivable 6 205 4 044 4 797
Cash and cash equivalents 2 389 6 616 4 710
Total assets 28 545 31 701 28 831
Equity and Liabilities
Capital and reserves 21 830 25 323 21 714
Non-current liabilities 3 033 2 990 2 990
Interest free 2 433 2 390 2 390
Interest bearing 600 600 600
24 863 28 313 24 704
Current liabilities
Creditors and provisions 3 682 3 388 4 127
Total equity and liabilities 28 545 31 701 28 831
Net asset value per share
(cents) 0,074 0,086 0,074
Capital expenditure during the
period (R000s) 181 466 779
Directors` valuation of unlisted
investments 1 437 1 437 1 437
Rental commitments (R000s)
Payable in the next year 2 266 7 864 2 246
Payable thereafter 568 23 453 779
STATEMENTS OF CHANGES IN EQUITIES
R000 R000 R000
Balance at the beginning of
the year 21 714 25 828 25 827
Profit/(loss) for the year 116 (505) (4 113)
Balance at the end of the year 21 830 25 323 21 714
COMMENTARY
Financial results:
The Don Group reversed a loss-making trend and moved into a slim profit for the
half year to 31 December 2004. The vast improvement in performance turned a
headline loss of R3,4-million at year-end 30 June 2004 into a headline profit of
R116 000 (31 December 2003: a loss of R505 000).
The transformation at half-year operating profit level is also satisfying: the
Group achieved an operating profit of R1,1-million against a 2004 year-end
operating loss of R1,2-million (there was an operating profit of R533 000 in the
corresponding 2003 interim reporting period).
Revenue posted for the half year period was R22,6-million, an improvement of six
percent on the R21,4-million recorded for the corresponding period a year
previously. An increase in the tariff rate helped towards the pleasing
improvement in performance.
The real pay-off came from extremely hard work by the Don team, which focused on
the goal of returning the hotel group to profitability through tighter control
of expenses, excellent service delivery, improved efficiency through in-depth
training, better technology resources, and expanded guest facilities that
included restaurants. A further substantial aid was the absence of extraneous
negative factors that featured heavily in the 2004 reporting periods (and on
which we reported in detail).
Property buyback:
Shareholders were kept fully informed of the Group`s decision to exercise an
option to buy back the eight hotels leased from Ellwain Investments (Pty)
Limited. Finance for the re-purchase was arranged with the Industrial
Development Corporation of South Africa Limited. The benefits of this
transaction are the achievement of security of tenure and the less expensive
costs of servicing the IDC loan, instead of the increasing cost of leases, which
were a curtailing factor on half-year profitability level.
Cash reserves were reduced as funds amounting to R2,2-million were utilised to
meet property guarantee requirements. This is reflected in cash and cash
equivalents standing at R2,3-million as against R4,7-million at year-end
June 30, 2004.
Accounting policies:
The consolidated year-end financial statements are prepared in accordance with
the accounting policies adopted in the preparation of the Group`s 30 June 2004
audited financial statements and comply in all material aspects with South
African Statements of Generally Accepted Accounting Practice. No provision has
been made for taxation as the Group has accumulated tax losses for offset
against future taxable income. No deferred tax asset has been raised in terms of
AC102 due to uncertainty as to when these losses are expected to be utilised.
Review report:
The review report prepared by the auditors of the company is available for
inspection at the registered office.
Dividends:
No dividend has been declared or paid.
HIV/AIDS responsibilities:
The prevailing status in respect of training and education was set out in the
2004 annual report.
BEE status:
There is no change in the status and compliance as set out in the 2004 Annual
Report.
Corporate governance and board membership:
The composition of the board is: Non-Executive Chairperson: Dr Danisa Baloyi;
Chief Executive: Thabiso Tlelai. Non-Executive Members; Errol Grolman and Max
Maisela.
Prospects:
The remainder of the financial year to June 30, 2005 will see completion of the
property buy back and the further consolidation of the business model, with a
stronger asset base financed at favourable terms. The Don is well positioned to
realise the potential inherent in its core business of suite hotels. By that
time, no doubt, we will be mopping our collective brows from a re-doubled
effort.
Dr Danisa Baloyi Thabiso Tlelai,
Chairman Chief Executive Officer
Johannesburg
22 March 2005
Directors: Danisa Baloyi* (chairman) Thabiso Tlelai (chief executive officer)
Errol Grolman* Max Maisela* Company Secretary: Whitney Green
Registered Office: 3 Cherry Place, Achter Road, Paulshof, 2157 Transfer
secretaries: Ultra Registrars (Pty) Ltd. 11 Diagonal Street, Johannesburg 2001
*non-executive directors
Date: 22/03/2005 07:00:08 AM
Produced by the JSE SENS Department
