| Fri 23 Mar 2007, 16:56 | | DON - The Don Group Limited - Reviewed Interim Res |
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DON
DON
DON - The Don Group Limited - Reviewed Interim Results For The Six Months
Ended 31 December 2006
The Don Group Limited
Incorporated in the Republic of South Africa
(Registration No. 1946/023123/06)
Share Code: DON & ISIN: ZAE000008462
("Don" or "the group")
Reviewed Interim Results for the six months ended 31 December 2006
SUMMARISED CONSOLIDATED INCOME STATEMENT
6 months 6 months Year
ended ended ended
Dec 2006 Dec 2005 June 2006
Reviewed Reviewed Audited
R`000 R`000 R`000
Revenue 30 441 24 722 49 252
Operating profit 6 353 4 111 8 785
Net finance (expense) (2 663) (2 921) (6 127)
Depreciation (2 213) (2 240) (4 476)
Profit/(Loss) before 1 477 (1 050) (1 818)
exceptional items
Exceptional items - (1 000) (611)
Deferred taxation asset - (1 000) -
written off
Impairment of hotel - - (611)
equipment
Profit/(Loss) after 1 477 (2 050) (2 429)
exceptional items
Taxation - SA normal tax - (1 000) (2 339)
Taxation - deferred 216 (784) (581)
Profit/(Loss) attributable 1 693 (3 834) (5 349)
to ordinary shareholders
Headline profit/(loss) 1 693 (3 834) (4 738)
Number of ordinary shares in 294 485 294 485 294 485
issue (000`s)
Weighted average number of 294 485 294 485 294 485
ordinary shares in issue
(000`s)
Profit/(Loss) per share 0,57 (1,30) (1,82)
(cents)
Headline profit/(loss) per 0,57 (1,30) (1,61)
share (cents)
Reconciliation of headline
profit/(loss)
Profit/(Loss) profit 1 693 (3 834) (5 349)
attributable to ordinary
shareholders
Impairment of hotel - - 611
equipment
Headline profit/(loss) 1 693 (3 834) (4 738)
STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 December 2006
Dec 2006 Dec 2005 June 2006
Reviewed Reviewed Audited
R`000 R`000 R`000
Balance at the beginning of 69 667 75 016 75 016
the period
Profit/(Loss) for the period 1 693 (3 834) (5 349)
Balance at the end of the 71 360 71 182 69 667
period
CONSOLIDATED BALANCE SHEET
At 31 December 2006
Dec 2006 Dec 2005 June 2006
Reviewed Reviewed Audited
R`000 R`000 R`000
Assets
Non-current assets
Property, plant and 147 599 150 399 148 685
equipment
Unlisted investments 1 437 1 437 1 437
Current assets 7 821 4 392 8 056
- Inventory and accounts 6 750 3 703 8 056
receivable
- Cash and cash equivalents 1 071 689 -
Total assets 156 857 156 228 158 178
Equity and liabilities
Capital and reserves 71 360 71 182 69 667
Non-current liabilities 49 047 52 819 50 945
- Interest free 2 390 2 390 2 390
- Interest bearing 46 657 50 429 48 555
Deferred tax 20 989 21 422 21 205
141 396 145 423 141 817
Current liabilities 15 461 10 805 16 361
- creditors and provisions 9 920 5 052 9 578
- Short-term portion of non- 3 998 3 548 3 998
current liabilities
- bank overdraft - - 991
- taxation 1 543 2 205 1 794
Total 156 857 156 228 158 178
SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
Dec 2006 Dec 2005 June 2006
Reviewed Reviewed Audited
R`000 R`000 R`000
Cash generated by operations 5 088 5 959 4 641
Investing activities (1 128) (681) (1 203)
Financing activities (1 898) (3 604) (3 444)
- Repayments to Industrial
Development Corporation (1 898) (3 604) (3 444)
Cash and cash equivalents - (991) (985) (985)
end of period
Cash and cash equivalents - 1 071 689 (991)
end of period
Net asset value per share 0,242 0,242 0,237
(cents)
Capital expenditure during 1 141 1 044 1 578
the period
- Other fixed assets 1 141 1 044 1 578
acquired during the year
Directors` valuation of 1 437 1 437 1 437
unlisted investments
Rental commitments 1 999 834 2 018
Payable in the next year 1 506 438 512
Payable thereafter 493 396 1 506
COMMENTARY
FINANCIAL RESULTS
For the half year to 31 December 2006 Don recorded a 23 percent increase in
revenue from R24,7 million to R30,4 million. Operating profits have
improved from 16,6 percent to 20,9 percent of revenues. It is also pleasing
to report a 4 percent reduction in operating costs relative to revenue,
without service delivery being compromised.
The profit posted of R1,69 million is a considerable improvement on the
loss of R3,8 million published in the interim financial accounts at 31
December 2005.
As reported earlier, the group has had to deal with historical tax
obligations and the final settlement in this regard will be completed in
due course.
The group`s cash position improved from a negative position of R991 000 in
June 2006 to a positive R1,07 million in December 2006.
Don has dealt expeditiously with and cleared all outstanding negative
historic exposures.
Sourcing goods and services from selected suppliers has not only presented
Don with price stability and quality assurance in this inflationary era,
but it has also aided the group in directing procurement to those companies
with recognisable black empowerment ratings. The group in all its
processes, including recruitment, strives to help historically
disadvantaged individuals.
OPERATIONS
The head office was relocated at a reduced cost per square metre from
Paulshof to a better facility in terms of area space at Kyalami Office
Park. This was accomplished with little disruption.
Internal controls have been further tightened by increasing manpower to
enforce policies and procedures across the group, and computer systems have
been upgraded.
In addition to protecting and advancing the interests of the employees, the
group has a comprehensive Corporate Social Investment programme, based on
the knowledge that the socio-economic needs of South Africa cannot be left
to the government alone. Don has long provided material and financial aid
to projects supporting HIV-Aids knowledge and prevention; prevention of the
abuse of women; and the operation of an orphanage. Further funds have been
put aside for these initiatives.
FINANCIAL STATEMENTS
Basis of preparation
The interim consolidated financial statements of the group have been
prepared in accordance with the group`s accounting policies which comply
with International Financial Reporting Standards (IFRS) and were adopted
with effect from 1 July 2005, and which were applied in the preparation of
the group`s financial statements for the year ended 30 June 2006.
ACCOUNTING POLICIES
Owner-occupied property: Owner-occupied property is recognised initially at
cost. Thereafter, the property is carried at a revalued amount, as
determined by professional valuers, to reflect the values of the properties
had they been converted into residential units. Depreciation is provided at
2 percent per annum. The revaluation is recognised in equity.
Deferred taxation: Impairments in the carrying amount of deferred tax
assets are recognised in the income statement. A deferred tax liability is
recognised on revaluation surpluses on property at the tax rate and as at
the balance sheet date.
Financial liabilities: Financial liabilities are initially measured at
their cost, which is the fair value of the consideration received, less
transaction costs. Thereafter, these are measured on the amortised cost
basis. Interest expense is charged to the income statement.
Investment in associate company: The group continued to hold this
investment as no application for formal deregistration has been made.
Accordingly, there has been no change in the accounting for this asset and
financial liability since June 2005. The group is seeking to minimise any
obligations arising from this de-registration.
Review report: The consolidated interim results to 31 December 2006 have
been reviewed by the group`s auditors PKF (Jhb) Inc., and their unqualified
review report is available for inspection at the company`s registered
office.
Dividends: No dividend has been declared or paid.
Board: Membership remains unchanged.
PROSPECTS
The period under review sets the tone for group performance in the 2007 and
2008 financial years. All known reportable setbacks have been successfully
identified and reversed. Revenues are growing. Operating profits and
headline result are improving. The hospitality sector looks attractive from
many angles.
Prospects for growth have been given impetus by South Africa`s hosting of
the 2010 Soccer World Cup tournament. Don accommodation has been FIFA
accredited for the most important sporting spectacle yet on the African
continent.
By order of the board
Dr Danisa Baloyi Thabiso Tlelai
Chairperson Chief Executive Officer
Johannesburg
23 March 2007
Directors: Dr Danisa Baloyi* (Chairperson), Thabiso Tlelai (Chief Executive
Officer), Professor Francois Viruly*, Max Maisela* * Non-executive
director
Company Secretary: Whitney Green
Registered Office: 65 Kyalami Boulevard, Kyalami Business Park, Kyalami,
1684
Sponsor: Merchant Sponsors (Proprietary) Limited
Transfer Secretaries: Link Market Services South Africa (Proprietary)
Limited
Date: 23/03/2007 16:56:18 Produced by the JSE SENS Department.
