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CUL
CUL
Cullinan Holdings Limited - Interim results for the six months ended
31 March 2006
Cullinan Holdings Limited
(Registration number 1902/001808/06)
(Share code: CUL & ISIN:ZAE000013710)
Interim results for the six months ended 31 March 2006
- Attributable earnings up 31%
- Headline earnings up 15%
- Dividend maintained
Group balance sheet
Unaudited Unaudited Audited
six months six months year end
31 March 31 March 30 September
2006 2005 2005
R"000 R"000 R"000
Assets
Property, plant and equipment 18 197 19 101 16 204
Investment properties 331 331 331
Goodwill 11 882 11 751 11 869
Intangible assets 23 069 18 738 21 326
Investment in joint venture 120 - 120
Loan to joint venture 954 - 230
Deferred taxation 3 787 7 652 4 193
Current assets 201 028 180 686 174 751
Inventories 9 934 9 566 10 209
Accounts receivable 70 174 61 785 62 752
Cash resources 120 920 109 335 101 790
Total assets 259 368 238 259 229 024
Equity and Liabilities
Ordinary shareholders" equity 72 114 63 593 60 166
Preference shareholders" equity 1 046 1 046 1 046
Total shareholders" equity 73 160 64 639 61 212
Outside shareholders" interest - - -
Current liabilities 186 208 173 620 167 812
Accounts payable 172 569 140 691 154 114
Provisions 9 206 7 561 13 681
Redeemable preference shares - 25 000 -
Receiver of Revenue 4 423 41 2
Preference dividends 10 327 15
Total equity and liabilities 259 368 238 259 229 024
Financial statistics
Gearing (%) - - -
Current ratio 1:1 1:1 1:1
Net asset value per share (cents) 10,2 9,0 8,5
Group income statement
Unaudited Unaudited Audited
six months six months year end
31 March 31 March 30 September
2006 2005 2005
R"000 R"000 R"000
Revenue 129 028 113 771 230 299
Net operating expenses (114 419) (100 702) (207 047)
Profit before
exceptional items 14 609 13 069 23 252
Exceptional items (Note 2) - (1 262) (2 527)
Profit from operations 14 609 11 807 20 725
Interest income 2 260 2 779 4 968
Preference dividend (27) (986) (1 566)
Profit before taxation 16 842 13 600 24 127
Taxation - STC (3) (123) (1 094)
- Normal and deferred (4 829) (4 349) (7 807)
Profit for period 12 010 9 128 15 226
(Profit) or loss attributable
to minority interest - - -
Profit attributable to ordinary
shareholders 12 010 9 128 15 226
Ordinary shares (000"s)
In issue 718 272 718 188 718 188
Earnings per ordinary share 1,7 1,3 2,1
Fully diluted earnings per share 1,7 1,3 2,1
Headline earnings per ordinary
share (cents) 1,7 1,4 2,5
Determination of headline
earnings
Net attributable income 12 010 9 128 15 226
Exceptional items (Note 2) - 1 262 2 527
Headline income 12 010 10 390 17 753
Group statement of changes in equity
Unaudited Unaudited Audited
six months six months year end
31 March 31 March 30 September
2006 2005 2005
R"000 R"000 R"000
Ordinary share capital
Balance at the beginning of
period 7 182 7 182 7 182
Issued during the period 1 - -
Balance at the end of period 7 183 7 182 7 182
Share premium
Balance at the beginning of
period 59 900 59 900 59 900
Premium on issue of shares 2 - -
Balance at the end of period 59 902 59 900 59 900
Share capital reduction
reserve fund
Balance at the beginning of
period 20 876 20 876 20 876
Balance at the end of period 20 876 20 876 20 876
Capital redemption reserve fund
Balance at the beginning of
period 4 4 4
Balance at the end of period 4 4 4
Foreign currency translation
reserve
Balance at the beginning of
period 55 (12) (12)
Reserve on translation of foreign
subsidiary (65) 188 67
Balance at the end of period (10) 176 55
Accumulated profit/(loss)
Balance at beginning of period (27 851) (33 673) (35 896)
Attributable income for the
period 12 010 9 128 15 226
Ordinary dividend paid - - (7 181)
Balance at the end of period (15 841) (24 545) (27 851)
Ordinary shareholders" equity 72 114 63 593 60 166
Group cash flow statement
Unaudited Unaudited Audited
six months six months year end
31 March 31 March 30 September
2006 2005 2005
R"000 R"000 R"000
Cash flow from
operating activities
Operating income 14 609 11 807 20 725
Depreciation 4 584 3 455 7 635
(Profit)/Loss on sale
of fixed assets (17) 88 (70)
Other non-cash Items (78) 847 1 108
(Increase)/Decrease in
working capital 6 833 (6 224) 9 257
Cash generated from
operating activities 25 931 9 973 38 655
Interest received 2 260 2 779 4 968
Preference dividends paid (32) (867) (1 759)
Ordinary dividends paid - - (7 181)
Secondary Taxation on Companies (5) (103) (1 114)
Net cash inflow/(outflow)
from operating activities 28 154 11 782 33 569
Cash flows from
investing activities
Investment to maintain
operations:
Additions to property, plant and
equipment (6 088) (5 686) (7 543)
Additions to intangible assets (2 250) (1 713) (3 779)
Proceeds on disposal of property,
plant and equipment 35 428 639
Investment to expand operations:
Acquisition of goodwill - (2 500) (3 000)
Investment in joint venture (724) - (120)
Net cash outflow
from investing activities (9 027) (9 471) (13 803)
Cash flows from
financing activities
Ordinary share capital issued 3 -
Preference share capital reduced - - (25 000)
Net cash inflow/(outflow) from
financing activities 3 - (25 000)
Net increase in cash and
cash equivalents 19 130 2 311 (5 234)
Cash and cash equivalents
at beginning of period 101 790 107 024 107 024
Cash and cash equivalents
at end of period 120 920 109 335 101 790
Notes:
1.Accounting policies and adoption of International Financial Reporting
Standards
The accounting policies used in the preparation of the interim financial
statements for the six months to March 2006 are the same as those used in the
audited results for the financial year ended September 2005 except for the
adoption of International Financial Reporting Standards which has not resulted
in a material adjustment to the group"s financial position.
2. Exceptional items
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 March 31 March 30 September
2006 2005 2005
R000"s R000"s R000"s
Amortisation of goodwill - (585) -
Impairment of goodwill - - (1 040)
Computer implementation costs - (677) (1 362)
Other - - 266
Acquisition costs - - (391)
Total - (1 262) (2 527)
3. Business segment analysis
The Group is organised into two main business segments:
- Travel and Tourism
- Yachting and Diving accessories (Manex)
Unaudited
Six Months
31 March 2006
Travel Yachting Total
and and
Tourism Diving
(R000) (R000) (R000)
Revenue 117 229 11 799 129 028
Operating
profit/(loss)
Result 14 548 61 14 609
Other information
Assets 245 229 10 352 255 581
Liabilities 183 017 3 191 186 208
Capital expenditure
- Property, plant
and equipment 6 045 43 6 088
- Investment
properties - - -
- Goodwill - - -
- Intangible
assets 2 250 - 2 250
Depreciation 4 450 134 4 584
Amortisation
of goodwill - - -
Impairment
of goodwill - - -
Unaudited
Six Months
31 March 2005
Travel Yachting Total
and and
Tourism Diving
(R000) (R000) (R000)
Revenue 101 234 12 537 113 771
Operating
profit/(loss)
Result 13 258 (189) 13 069
Other information
Assets 220 054 10 553 230 607
Liabilities 169 689 3 931 173 620
Capital expenditure
- Property, plant
and equipment 5 477 209 5 686
- Investment
properties - - -
- Goodwill 2 500 - 2 500
- Intangible
assets 1 649 64 1 713
Depreciation 3 335 120 3 455
Amortisation
of goodwill 585 - 585
Impairment
of goodwill - - -
Audited
Year End
30 September 2005
Travel Yachting Total
and and
Tourism Diving
(R000) (R000) (R000)
Revenue 206 523 23 776 230 299
Operating
profit/(loss)
Result 23 792 (540) 23 252
Other information
Assets 213 901 10 930 224 831
Liabilities 163 586 4 226 167 812
Capital expenditure
- Property, plant
and equipment 7 303 240 7 543
- Investment
properties - - -
- Goodwill 3 000 - 3 000
- Intangible
assets 3 660 119 3 779
Depreciation 7 342 293 7 635
Amortisation
of goodwill - - -
Impairment
of goodwill 990 - 990
4. Basis of accounting
These consolidated results for the six months were drawn up in compliance with
statement IAS 34 of South African Statements of Generally Accepted Accounting
Practice and the company has complied with the requirements of the Companies
Act, 1973 (Act 61 of 1973) as amended.
5. JSE Limited ("JSE")
The directors of the company ensured compliance with the JSE Listings
Requirements during the year under review.
Comments
Cullinan Holdings owns business units that focus on the travel and tourism
industry in Southern Africa. The major part of the company"s income comes from
Tour Operating where its core brand Thompsons enjoys significant market share
in both the incoming and outgoing markets. The retail brand Pentravel operates
in the leisure travel sector with 20 outlets located in prime retail shopping
malls in the country. A small corporate business is run under the Thompsons
Travel label with three branches. The incoming delivery footprint extends to
all of the major travel nodes in the region, and the intention is to expand
this division further into Africa.
Acquisitions since 31st March 2006
Two new investments have recently been announced. Hylton Ross, a Cape based
day tour and coaching business, was bought for R31 million. It is a well
established brand in the Cape and expands the Cullinan market share in this
all important tourism region. The Thebe Tourism Group will be acquired from the
Thebe Investment Corporation, a significant Black Empowered company, for an
issue of shares. The Thebe Tourism Group owns business units in incoming tour
operating, conferences, exhibitions and events. It also has interests in
retail outlets at the international airports and other tourist growth points.
The nature of these businesses are complementary, and the Thebe transaction
brings Cullinan in line with the BEE scorecard for tourism which ought to have
major benefits for the company in the years to come. Details of these
acquisitions were published on 24 April and 9 May 2006.
The results to 31 March 2006 do not include any effects of these acquisitions.
Review of the past six months
Attributable earnings for the six months were R12.0 million which was 31.6%
higher than the same period last year, while headline earnings increased by
15.5%. The major contributors to the growth were the outbound and retail
divisions, both of whom enjoyed buoyant trading conditions and improved
trading profits.
Cash flow was positive with cash balances improving from R102 million at the
end of September 2005 to R121 million in March 2006.
Thompsons Tours (Outbound)
The outbound travel market remains strong reflecting buoyant consumer demand
and an exchange rate that keeps international travel affordable. While the
high oil price is a concern it has not affected the good demand for travel
both domestically and abroad.
Thompsons Africa (Inbound)
While sales out of Germany and Holland are flat, good growth has been
experienced from Japan and the USA. The market remains difficult with
restricted air lift from major source markets, a strong Rand and the high oil
price. The expansion of the regional footprint continues with pleasing results
coming from all locations.
Retail Travel
The expanded Pentravel has produced good results in what is traditionally a
difficult market sector. The small corporate offices of Thompsons Travel are
likely to be the major beneficiaries of the BEE deal concluded with Thebe.
Manex and Power Marine
Manex supplies components to the local yacht building industry and distributes
diving gear to the retail trade. While trading conditions have improved
marginally, the business is heavily dependent on the local yacht building
industry, which in turn is sensitive to the nuances of the volatile exchange
rate.
Prospects for the next six months
The impact of the new acquisitions will result in improved earnings for the
next six months.
Dividend
The board has declared a dividend of 1 cent per ordinary share (number 127) to
all shareholders for the financial year ending 30 September 2006. The salient
dates relating to payment of the dividend are as follows:
Last date to trade cum dividend Thursday 8 June 2006
Shares commence trading ex dividend Friday 9 June 2006
Record date Thursday 15 June 2006
Payment date Monday 19 June 2006
Share certificates may not be dematerialised or rematerialised between Friday
9 June 2006 and Thursday 15 June 2006, both days inclusive.
30 May 2006
(Registration number 1902/001808/06)
(Share code: CUL ISIN:ZAE000013710)
Directors
M A Ness (Non-executive Chairman), D D Hosking (Non-executive)
V E T O" Hana (Non-executive), A A Thompson (CEO), Q A Southey (FD)
M Tollman (Non-executive), L A Pampallis
Registered Office
1st Floor, Dunkeld West Shopping Centre
277 Jan Smuts Avenue, Dunkeld West, Johannesburg
Transfer Secretaries
Computershare Investor Services 2004 (Pty) Limited
Ground Floor, 70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
For further information on group activities, please write to:
The Group Secretary, Cullinan Holdings Limited, PO Box 41032, Craighall, 2024
Date: 30/05/2006 04:18:02 PM Produced by the JSE SENS Department
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