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CUL
CUL
CUL - Cullinan- Reviewed results for the year ended 30 September 2006
CULLINAN HOLDINGS LIMITED
(Registration number 1902/001808/06)
(Share code: CUL & ISIN number: ZAE000013710)
REVIEWED RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2006
Cullinan is a holding company that invests in travel and travel related
businesses. Most of its current investments are in Southern Africa where it
has interests in inbound and outbound tour operating, destination
management activities, retail travel agencies, coach charter, escorted
tours, open vehicle game drives and sightseeing.
Results
* Attributable earnings UP 24%
* Headline earnings UP 16%
* NAV UP 18%
* Strong operational cash flows
Group balance sheet
Reviewed Audited
as at as at
30 September 30 September
2006 2005
R`000 R`000
Assets
Property, plant and equipment 50 721 16 204
Investment properties 331 331
Goodwill 23 802 11 869
Intangible assets 24 287 21 326
Investment in subsidiary - -
companies
Investment in joint venture 200 120
Loan to joint venture - 230
Deferred taxation 3 573 4 193
Current assets 211 100 174 751
- Inventories 11 042 10 209
- Accounts receivable 75 232 62 752
- Cash resources 124 826 101 790
Total assets 314 014 229 024
Equity and liabilities
Ordinary shareholders` equity 71 188 60 166
Equity portion of preference 1 046 1 046
shareholders` equity
Total shareholders` equity 72 234 61 212
Outside shareholders` interest 3 -
Non-current liabilities 37 071 1 371
- Loans from subsidiaries - -
- Deferred tax liabilities 1 241 -
- Long-term loans 35 830 1 371
Current liabilities 204 706 166 441
- Short-term loans 3 218 229
- Accounts payable 186 812 154 114
- Provisions 7 041 12 081
- Receiver of Revenue 7 621 2
- Preference dividends 14 15
Total equity and liabilities 314 014 229 024
Group income statement
Reviewed Audited
year ended year ended
30 September 30 September
2006 2005
R`000 R`000
Revenue 269 076 230 299
Net operating expenses (243 872) (207 047)
Operating income before 25 204 23 252
exceptional items
Exceptional items (1 629) (2 527)
Operating income 23 575 20 725
Finance income 5 922 5 840
Finance expenses (1 274) (872)
Preference dividends paid (54) (1 566)
Profit before taxation 28 169 24 127
Tax expense (9 191) (8 901)
Profit for the year 18 978 15 226
Income attributable to equity 18 975 15 226
holders of the company
Income attributable to outside 3 -
shareholders` interest
Attributable profit per share 2,64 2,12
(cents)
Diluted profit per share 2,64 2,12
(cents)
Headline profit per share 2,64 2,26
Ordinary shares (000`s)
- In issue 718 272 718 188
- Weighted average 718 272 718 188
Determination of headline
earnings
Net attributable income 18 975 15 226
Exceptional items (Note 4) - 1 040
Headline earnings 18 975 16 266
Group statement of changes in equity
Reviewed Audited
year ended year ended
30 September 30 September
2006 2005
R`000 R`000
Ordinary share capital
Balance at the beginning of the 7 182 7 182
year
Issued during the period 1 -
Balance at the end of the year 7 183 7 182
Share premium
Balance at the beginning of the 59 900 59 900
year
Premium on issue of shares 2 -
Balance at the end of the year 59 902 59 900
Share capital reduction reserve
fund
Balance at the beginning of the 20 876 20 876
year
Balance at the end of the year 20 876 20 876
Capital redemption reserve fund
Balance at the beginning of the 4 4
year
Balance at the end of the year 4 4
Foreign currency translation
reserve
Balance at the beginning of the 55 (12)
year
Reserve on translation of (1 373) 67
foreign subsidiary
Balance at the end of the year (1 318) 55
Property, plant and equipment
revaluation reserve
Balance at the beginning of the - -
year
Revaluation of property, plant 600 -
and equipment
Transfer to/(from) reserves (505) -
Balance at end of the year 95 -
Accumulated loss
Balance at the beginning of the (27 851) (35 896)
year
Attributable income for the 18 975 15 226
year
Transfer to/(from) revaluation 505 -
reserve
Ordinary dividend paid (7 183) (7 181)
Balance at the end of the year 15 554 (27 851)
Ordinary shareholders` equity 71 188 60 166
Summarised group cash flow statement
Reviewed Audited
year ended year ended
30 September 30 September
2006 2005
R`000 R`000
Cash flows from operating
activities
Operating income 23 575 20 725
Depreciation 7 322 7 635
Other non cash items (1 799) 1 038
Changes in working capital 17 792 9 257
Cash generated from operating 46 890 38 655
activities
Net finance income 4 648 4 968
Preference dividends paid (55) (1 759)
Ordinary dividends paid (7 183) (7 181)
Normal taxation paid (800) -
Secondary Taxation on Companies (907) (1 114)
Net cash inflow/(outflow) from 42 593 33 569
operating activities
Cash flow from investing
activities
Additions to property, plant (19 221) (7 543)
and equipment
Additions to intangible assets (3 712) (3 779)
Acquisition of goodwill - (3 000)
Acquisition of subsidiary (30 969) -
Proceeds on disposal of 281 639
property, plant and equipment
Investment in joint venture (80) (120)
Net cash inflow/(outflow) from (53 701) (13 803)
investing activities
Cash flow from financing
activities
Ordinary share capital issued 3 -
Preference share capital - (25 000)
redeemed
Long-term loans raised 32 384 -
Short-term loans raised 1 757 -
Net cash inflow/(outflow) from 34 144 (25 000)
financing activities
Net (decrease)/increase in cash 23 036 (5 234)
and cash equivalents
Cash and cash equivalents at 101 790 107 024
beginning of year
Cash and cash equivalents at 124 826 101 790
end of year
Notes
1. Accounting policies
The accounting policies used in the preparation of the annual financial
statements for the year ended 30 September 2006 are the same as those used
in the audited results for the financial year ended 30 September 2005.
The annual financial statements comply with International Financial
Reporting Standards and the requirements of the Companies Act, 1973 (Act 61
of 1973) as amended.
2. JSE Limited ("JSE")
The directors of the Company ensured compliance with the JSE Listings
Requirements during the year under review.
3. Exceptional items
12 months 12 months
2006 2005
R`000 R`000
Impairment of goodwill - (1 040)
Computer implementation costs - (1 362)
Other - 266
Acquisition costs (1 629) (391)
(1 629) (2 527)
Chief Executive Officer`s Report
Overview
The past year has been one of continued growth for the group, highlighted by
the acquisition of Hylton Ross, a well known coach touring and sightseeing
tour operator based in the Western Cape.
The group results are summarised as follows:
* Profit before tax increased by 16,7%
* Headline earnings per share improved by 16,6%
* Attributable earnings per share improved by 24,6%
* Operating cash flows remained strong.
The year was characterised by growth in the incoming markets, particularly
from the Eastern and North American markets. The outbound business was
steady and Pentravel posted very good results.
Review of Operations
Thompsons Tours (the outbound division)
The outbound division is a wholesale supplier of travel related product and
holidays to the South African market. The domestic market has been steady.
It is being affected by the growth of low cost carriers and the change in
buying patterns. This however is part of the evolution of the industry and
the division is making the necessary adjustments to the business model to
accommodate the new trends.
Thompsons Africa (the inbound division)
The inbound division is a tour wholesaler and destination marketing
organisation that sells Southern Africa to the rest of the world. Turnover
is influenced by the relative strength of our currency and the air lift
into South Africa. Over the past few months the rand has weakened which has
boosted turnover, but the availability of incoming air seats at reasonable
prices remains a problem. The division has had a good year showing an
improvement in both turnover and profits. The growth out of both the Far
East and the USA has been most encouraging.
Thompsons Africa Touring and Safaris
The Touring division provides tourism products for the incoming division.
These include escorted tours, general sightseeing and open vehicle game
drives in the National Parks which are offered throughout Southern Africa.
While turnover was up, profits were reduced as a result of the introduction
of new touring products which always take time to become established.
The roll out of the Thompsons Africa footprint continues: two new locations
were established this year at Malelane and Chobe and an office is planned
for Maputo in the new year.
Thompsons Travel
Thompsons Travel is a retail travel agency with offices in Johannesburg, Cape
Town and Durban. The Corporate division showed a welcome return to
profitability.
Pentravel
Pentravel is a chain of 20 retail travel outlets located in the major shopping
malls throughout South Africa. It enjoyed a year of record turnover and
profits and is well placed to continue its growth in the leisure travel
market.
Hylton Ross
The company acquired the entire share capital of Hylton Ross (Pty) Limited
with effect from 1 August 2006. Hylton Ross Tours operates coaches and
vehicles for hire and charter in the domestic travel market and also
provides day tours in and around the Western Cape and the Garden Route. It
is a well known brand in the travel market and enjoys a substantial market
share in the Western Cape. As only two months trading has been accounted
for in the current financial year, the impact of this strategic acquisition
has been limited in the current year`s result. The coach charter market
remains firm and our branded tours in the Western Cape and Garden route
continue to sell well. The new Cape Town Convention Centre is beginning to
generate traffic in the low season which is providing a useful lift to our
turnover.
Thompsons Gateway Singapore
Gateway, a sales office in Singapore, had a good year, showing improved
turnover and profits.
Manex
Manex is a supplier of equipment to the yacht building industry. It had
another difficult year in an industry that is dependent on the relative
value of the rand.
Prospects
At current levels of the rand, the incoming business is poised to continue its
growth. The growth in inbound traffic will have a positive effect on both
Thompsons Touring and Hylton Ross Tours. At the same time the outbound
business should remain steady, and the retail travel businesses should
continue to benefit from the buoyant consumer expenditure.
AA Thompson M Ness
Chief Executive Officer Chairman 13 December 2006
Directors
MA Ness (Chairman)*#, VET O`Hana #, DD Hosking **#, M Tollman ***#,
AA Thompson, LA Pampallis Company Secretary: QA Southey
* British ** New Zealand *** USA # Non-Executive
Registered office
6 Hood Avenue, Rosebank, 2196
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
Auditors
BDO Spencer Steward (Jhb) Inc. will continue to act as auditors to the
Company.
An unqualified audit review report is available for inspection. The audited
annual financial statements will be mailed to shareholders in January 2007.
Sponsor
Arcay Moela Sponsors (Proprietary) Limited
(Registration number 2006/033725/07)
Date: 13/12/2006 17:15:01 Produced by the JSE SENS Department.
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