Wrap Text
Unaudited interim announcement of condensed financial results for the six months ended 31 August 2015
Wilderness Holdings Limited
“Wilderness” or “the Company” or “the Group”
Share code: WIL
ISIN: BW0000000868
Registration number: 2004/2986
BSE: Primary Listing
JSE: Secondary Listing
Tax reference number: C075372-01-01-7
Unaudited interim announcement of condensed financial results for the
six months ended 31 August 2015
www.wilderness-group.com
www.wilderness-safaris.com
www.wilderness-collection.com
www.wilderness-residents.co.za
Revenue down 3% to P539 million (restated)
EBITDA up 6% to P151 million
Total revenue per available room* down 5%
Profit after tax down 6% to P77 million
Cash generated by operations down 21% to P157 million
HEPS down 6% to 31 thebe per share
Occupancy percentage down to 64% from 71% (restated)
*Total revenue per available room (TRevPar) is calculated as total
revenue from Travel Experience divided by total available rooms.
Condensed consolidated statement of comprehensive income
Unaudited
Unaudited Six months
Six months ended Audited
ended 31 August Year ended
31 August 2014 28 February
P’000 2015 Change Restated 2015
Revenue 538 611 (3%) 556 039 944 586
Cost of sales (162 539) (176 967) (301 972)
Gross profit 376 072 379 072 642 614
Other gains 3 891 5 140 7 056
Operating expenses (241 921) 1% (238 349) (476 072)
Foreign exchange
gains/(losses) 12 894 (3 695) 8 103
Operating profit for
year before items
listed below (EBITDA) 150 936 6% 142 168 181 701
Impairment loss (776) (5 179) (10 175)
Depreciation and
amortisation (31 331) (26 536) (55 896)
Operating profit 118 829 8% 110 453 115 630
Net finance costs (1 729) (2 274) (4 607)
Unrealised foreign
exchange loss on
loans (5 733) (1 412) (6 519)
Share of associate
company profit 599 3 365 4 191
Profit before
taxation 111 966 2% 110 132 108 695
Taxation (34 970) (27 821) (32 463)
Profit for the period 76 996 (6%) 82 311 76 232
Other comprehensive
(loss)/income (4 194) 2 271 9 106
Items that may be
subsequently
reclassified to profit
or loss
Exchange differences
on translating foreign
operations (4 194) 2 271 9 106
Total comprehensive
income for the period 72 802 84 582 85 338
Profit attributable
to:
Owners of the Company 73 340 74 787 72 611
Non-controlling
interest 3 656 7 524 3 621
76 996 82 311 76 232
Total comprehensive
income attributable
to:
Owners of the Company 68 573 77 037 81 704
Non-controlling
interest 4 229 7 545 3 634
72 802 84 582 85 338
Number of shares
issued (thousands)
Issued 231 882 231 000 231 882
Weighted average 231 882 231 000 231 588
Diluted weighted
average 241 440 236 531 237 712
Earnings per share
(thebe)
Basic 31,63 (2%) 32,38 31,35
Diluted 30,38 (4%) 31,62 30,55
Basic headline 30,70 (6%) 32,55 32,49
Diluted headline 29,49 (7%) 31,79 31,66
Condensed consolidated statement of cash flow
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 August 31 August 28 February
P’000 2015 2014 2015
Net cash generated from
operating activities 156 559 197 550 130 799
Net cash used in investing
activities (101 260) (46 118) (92 346)
Net cash used in financing
activities (62 768) (45 952) (69 659)
Net increase in cash and
cash equivalents (7 469) 105 480 (31 206)
Unrealised exchange gains
on foreign cash balances 12 320 9 14 404
Cash and cash equivalents
at the beginning of the
period 233 917 250 719 250 719
Cash and cash equivalents
at the end of the period 238 768 356 208 233 917
Condensed consolidated statement of financial position
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 August 31 August 28 February
P’000 2015 2014 2015
Assets
Non-current assets 564 214 484 464 505 514
Property, plant and
equipment 489 510 407 947 424 634
Goodwill 33 890 34 889 34 664
Intangible assets 12 612 16 365 14 683
Investments and loans in
associates 9 197 12 003 9 598
Deferred tax assets 19 005 13 260 21 935
Current assets 451 883 553 092 410 907
Inventories 25 594 24 841 23 480
Receivables and
prepayments 132 691 119 020 98 072
Current tax receivable 6 308 5 846 6 155
Bank balances and cash 287 290 403 385 283 200
Total assets 1 016 097 1 037 556 916 421
Equity and liabilities
Equity attributable to
owners of the Company 485 676 442 284 449 026
Stated capital 156 086 153 703 156 086
Foreign currency
translation reserve 15 165 13 056 19 933
Common control reserve (73 324) (73 324) (73 324)
Other non-distributable
reserves 22 624 21 039 21 599
Share-based payment
reserve 19 232 16 316 15 435
Retained income 345 893 311 494 309 297
Non-controlling interest (4 026) (325) (4 995)
Total equity 481 650 441 959 444 031
Non-current liabilities 67 973 105 537 89 376
Borrowings 41 291 77 219 60 567
Deferred tax liabilities 26 682 28 318 28 809
Current liabilities 466 474 490 060 383 014
Trade and other payables 368 951 412 142 305 079
Borrowings – current
portion 29 473 26 075 27 423
Current tax liabilities 19 528 4 666 1 229
Bank overdrafts 48 522 47 177 49 283
Total liabilities 534 447 595 597 472 390
Total equity and
liabilities 1 016 097 1 037 556 916 421
Net asset value per share
(thebe) 209 191 194
Net tangible asset value
per share (thebe) 189 169 172
Condensed consolidated statement of changes in equity
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 August 31 August 28 February
P’000 2015 2014 2015
Opening balance 444 031 374 948 374 948
Share issue on settlement
of share scheme obligation – – 2 383
Minority portion of
dividend paid (3 919) (1 622) (2 208)
Dividends paid (34 782) (23 100) (23 100)
Total comprehensive income
for the period 72 802 84 582 85 338
Share-based payment reserve 3 797 5 514 5 209
Other (279) 1 637 1 461
Closing balance 481 650 441 959 444 031
Comprising:
Stated capital 156 086 153 703 156 086
Foreign currency
translation reserve 15 165 13 056 19 933
Common control reserve (73 324) (73 324) (73 324)
Other non-distributable
reserves 22 624 21 039 21 599
Share-based payment reserve 19 232 16 316 15 435
Retained income 345 893 311 494 309 297
Total shareholders' equity 485 676 442 284 449 026
Non-controlling interest (4 026) (325) (4 995)
Total equity 481 650 441 959 444 031
Segmental information
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 August 31 August 28 February
P’000 2015 2014 2015
Segment profit
Botswana 85 281 77 956 110 104
Namibia 9 854 11 828 17 853
South Africa 32 959 37 043 29 843
Zambezi 5 884 13 899 8 746
Intergroup 173 (3) (4)
Group 134 151 140 723 166 542
Depreciation and
amortisation
Botswana (15 159) (13 418) (28 799)
Namibia (5 748) (4 529) (9 787)
South Africa (3 626) (3 175) (6 650)
Zambezi (6 798) (5 414) (10 660)
Group (31 331) (26 536) (55 896)
Transactions unallocated
to a segment
Other gains 3 891 5 140 7 056
Foreign exchange
gains/(losses) 12 894 (3 695) 8 103
Impairment losses (776) (5 179) (10 175)
Interest paid (2 581) (3 226) (7 108)
Interest received 852 952 2 501
Unrealised foreign
exchange loss on loans (5 733) (1 412) (6 519)
Associate earnings 599 3 365 4 191
Profit before taxation 111 966 110 132 108 695
Taxation (34 970) (27 821) (32 463)
Profit after tax 76 996 82 311 76 232
Segmental assets
Botswana 519 979 476 899 443 408
Namibia 157 084 158 391 149 230
South Africa 349 797 374 502 252 212
Zambezi 135 156 114 952 108 564
Central financing
activities and
eliminations (145 919) (87 188) (36 993)
Group 1 016 097 1 037 556 916 421
Additional disclosure
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 August 31 August 28 February
P’000 2015 2014 2015
Reconciliation between
profit attributable to
owners of the Company
and headline earnings
Profit attributable to
owners of the Company 73 340 74 787 72 611
Adjustments
Gains and compensation on
disposal and impairment of
property, plant and
equipment (3 859) (3 989) (10 834)
Profit on disposal of
interests in subsidiaries – (1 020) (1 057)
(Profit)/loss on deemed – (105) 4 998
disposal of investment
in associate
Impairment of assets 713 5 102 9 523
Impairment of Intangible
assets – – 500
Tax effects of adjustments 863 32 (903)
Minority interest 139 385 411
Headline earnings 71 196 75 192 75 249
Capital commitments
Authorised by directors and
contracted for – – 33 321
Not yet contracted for but
authorised by directors 104 890 32 435 121 884
104 890 32 435 155 205
It is intended to finance
capital expenditure from
working capital generated,
existing and new borrowing
facilities.
Operating leases
Minimum lease payments due
– within one year 21 899 24 148 23 618
– in second to fifth year
inclusive 58 026 61 568 59 342
– after fifth year 89 344 100 367 92 420
169 269 186 083 175 380
Borrowings
Non-current
Interest bearing 58 247 92 015 76 485
Non-interest bearing 12 517 11 279 11 505
Less: Current portion of
long-term liabilities (29 473) (26 075) (27 423)
41 291 77 219 60 567
Founded in Botswana in 1983, Wilderness Holdings is an award- winning
and globally respected ecotourism company present in the prime
wilderness and wildlife areas of southern and east Africa. Pivoted
off the continent’s most diverse portfolio of luxury safari camps the
Group operates a vertically integrated business model that combines
the owning of product (safari camps) with ownership of associated
support services (such as a bush airline,and touring and transfer
companies), and ownership of a marketing, sales and reservations entity
(an inbound tour operating business), Collectively, these are termed
“the travel experience” (refer Revenue table below) and serve to ensure
certainty of supply, ownership of the supply chain and a seamless service
to both the client (the travel trade) and the consumer (our guest).
Commentary
In difficult economic conditions, the effects of the Ebola outbreak
became apparent over the first six months of the year as bednight
sales declined as guests elected to travel to destinations other than
Africa. In addition, the strength of the US Dollar against the South
African, British and European currencies made South Africa and
European destinations moreattractive to our American guests as these
locations are generally priced in currencies other than the US Dollar.
Despite the difficult trading environment, the Group limited the negative
impacts to a decline of 6% in headline earnings.
Financial review
On a restated basis, revenue for the first half of the year declined
by 3% to P539 million (2014: P556 million) mainly due to lower bednight sales,
especially in the Premier camp category, and a decline of 23% in our road
transfer business that is less dependent on bednight sales but is reliant on
the Asian and group series business. This was, however, largely offset by
a benefit from the stronger US Dollar. Notwithstanding the challenging
conditions the Group recorded 64% occupancy rate (2014: 71% restated). Overall
bednight sales decreased by 6% to 78 307 (2014:83 620 restated), with 5%
increase in available bednights to 123 280 (2014: 117 178 restated). While the
Classic camp category remained steady in bednight sales, all other categories
reported decreases with Premier down 10%, Adventures down 7% and Tour Series
down 12%.
Available bednights increased due to the opening of the new Linkwasha
Camp in May 2015, the inclusion of two new camps, Baobab Safari Lodge (through
acquisition) and Hoanib Skeleton Coast (developed), that came into operation
in July and August 2014 respectively and are now reported on for the full six
months of the current year. In addition, we restated our comparatives to
include two mobile camps that were previously not reported on but have now been
included in our Adventures camp category. These are not deemed material for
reporting purposes.
The average exchange rate for the Group’s reporting currency (Botswana
Pula) for the period was 13% weaker against the US Dollar at P9.96,
whilst the ZAR depreciated against the Botswana Pula by 2% to R1.23.
The combination of the net currency movement contributed approximately
11% to the reported revenue growth. This also had the effect of increasing
the gross margin from 68% to 70%.
EBITDA margin has improved from 25.5% to 28% largely due to exchange gains
on working capital and other gains. Excluding these EBITDA margin is down from
24.9% to 25.3% in 2015. Operating costs increased by 1% on prior year mostly
explained by a reduction of accounting provisions relating to incentives and
the share scheme as well as the benefit gained on translation of costs to
Pula as the South African and Namibian operations recorded a 19% costs increase
in local currency terms compared to a 16% increase in Pula terms. On a
normalised basis, excluding new camps and businesses and the forex gain
on conversion, like-for-like costs increased by an acceptable 5%.
Other gains of P3.9 million include proceeds from insurance claims
amounting to P3.8 million. Impairment losses amounted to P0.8 million,
of which P0.5 million related to impairment of camp assets relating to
expired leases that have, subsequent to reporting date, been renewed
and the balance relates to various impairments of property, plant and
equipment.
In line with the Group’s hedging strategy, forward cover remains at
zero percent until in the opinion of the Board the Rand fundamentals
make cover necessary. Foreign exchange losses on matured contracts
amounted to P0.1 million.
Net finance costs decreased from P2.3 million to P1.7 million
reflecting the lower level of interest bearing debt.
The Group’s effective tax rate increased from 25% in the prior year
to 31% largely due to the payment of dividend tax charged on reserves
declared from South Africa to Botswana, the higher tax rates
applicable in the other geographic segments and losses made by
entities where deferred tax assets could not be recognised.
Capital expenditure amounted to approximately P103 million for the period.
This related mainly to the construction of the new Linkwasha Camp,
the acquisition of four new aircraft, a new solar plant and upgrades
of various Botswana camps.
Cash balances less overdrafts has decreased by 33% to P239 million as
the capital expenditure, debt reduction of approximately P24 million
and dividends amounting to nearly P35 million was financed out of
cash reserves.
Geographical operations
Botswana recorded the largest decline in bednight sales but still
achieved a commendable occupancy rate of 65% (2014: 74%). If we
exclude various accounting adjustments, segmental profit increased by
5% due to the assistance from the stronger US Dollar. Namibia
recorded an increase in bednight sales but an overall decline in
profit of 17% as a result of on-going restructuring of our flying
business as we attempt to move away from servicing third party
business. Zambezi bednight sales were 9% down on prior period with
segmental profit down 58% as the implementation of the new VAT rules
in Zimbabwe came into effect and the business absorbed half of those
costs. In addition, the road services business declined
by 34% unrelated to occupancy and the flying operations operated at
lower load factor due to the decline in the Tour Series business.
South Africa would have been down in line with occupancy had it not
been for the 33% decline in profit in our road transfer business.
Dividend
In line with the policy to only consider paying dividends based on
full year results, no interim dividend is proposed.
Acquisitions/expansion
The new Linkwasha Camp, an 18 bed Classic camp, in Hwange National
Park, Zimbabwe, opened in May 2015. The camp has been well received
and reported occupancy rate of 60% for the period.
Subsequent events
No material events have occurred between the reporting date and the
date of this report.
Leases
As previously reported, the leases for the concessions upon which our
Mombo, Little Mombo and Xigera camps are located expired in mid-2014.
These have not yet been renewed as the structures and the process by
which these concessions are allocated and administered by the
Botswana authorities are being changed in order to improve stability
and long-term confidence in the industry. A number of our competitors
are similarly affected. On the basis of correspondence with senior
Government representatives, the Group is confident that the concessions
concerned will be reissued to existing operators in good standing.
Directorate
On 7 October 2015 Mr Charles de Fleurieu had resigned form the Board,
we wish to thank him for his contribution and commitment to the Group
over the last three year.
We welcome Mr Christophe Vinsonneau to the Board, appointed
21 October 2015, and trust he will add great value to the business.
Basis of preparation
This interim report has been prepared in accordance with
International Accounting Standard 34 on Interim Financial Reporting
and complies with the disclosure requirements of the Botswana Stock
Exchange and the JSE. The report has been prepared using accounting
policies that comply with International Financial Reporting Standards
and their interpretations adopted by the International Accounting
Standards Board and the Financial Reporting Guides issued by the
Accounting Practices Committee of the South African Institute of
Chartered Accountants, in a manner that is consistent with the
accounting applied in the year ended 28 February 2015. The impact of
adoption of IFRS 15 in the year ended 28 February 2015 is addressed
below.
Changes in accounting policies and comparability
During the year ended 28 February 2015, the Group adopted IFRS
15 Revenue from Contracts with Customers which resulted in a restatement
of the prior year results. While the revenues generated for the six
month period ended 31 August 2015 and year ended 28 February 2015 reflect
the accounting requirements of IFRS 15, the previously reported comparative
results for the period ended 31 August 2015 were prepared in terms of
IAS 18 Revenue and are restated for the purposes of comparability. The
detailed impact of the adoption of IFRS 15 was addressed in our financial
statements for the year ended 28 February 2015 and readers are referred
to this document which is available on our website.
Revenue
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 August 31 August 28 February
P’000 2015 2014 2015
1.1 Impact of IFRS15
Revenue
Revenue as reported
under IAS 18 833 578 880 356 1 505 790
Adjustment due to
adoption of IFRS 15 294 967 324 317 561 204
Revenue as reported
under IFRS 15 538 611 556 039 944 586
Cost of sales
Cost of sales as
reported under IAS 18 457 506 501 284 863 176
Adjustment due to
adoption of IFRS 15 294 967 324 317 561 204
Cost of sales as reported
under IFRS 15 162 539 176 967 301 972
1.2 Revenue by type of
service
Travel experience
(comprises booking fees,
flying and road
transfers, and
accommodation 481 220 479 156 840 265
Service fees 44 842 58 343 77 200
Other revenue 12 549 18 540 27 121
538 611 556 039 944 586
1.3 Revenue by
geographical regions
Botswana 269 154 267 210 459 245
Namibia 87 146 87 641 171 287
South Africa 395 345 409 876 683 987
Zambezi 84 834 88 818 146 621
Intergroup (297 868) (297 506) (516 554)
538 611 556 039 944 586
2015 2014 2015
% % %
1.4 Revenue by source
market
Africa and Middle East 31 31 24
Americas 49 50 50
Australasia 2 2 3
Europe and Asia 18 17 23
100 100 100
1.5 Amounts received in advance
At 31 August 2015, the aggregate amount of the amounts received in
advance for which goods and services are still to be delivered
amounts to P85 million (2014: P99 million) and the Group will
recognise this revenue as the services are rendered, which is
expected to occur over the next 12 months.
Outlook
The Ebola outbreak was declared over by the week of 4 October 2015,
however, the World Health Organisation warned that an outbreak
could re-occur. Should the virus not re-emerge we expect more
confidence to return to the market in the second half of the year and
our forward sales position for 2017 is already showing signs of such
improvement. However, as the Group sells primarily in US Dollars the
continued strength of the currency is expected to impact demand for
our product.
Our recently announced investment in two new camps in Rwanda is
progressing well and we expect to see the benefits of that in the
2018 financial year.
The Group’s strategic intent is to invest in African tourism markets
which offer authentic wildlife and safari experiences and where we
feel our specific ecotourism model can have positive conservation and
community impacts. As set out in our cautionary announcements we
continue to be engaged in negotiations in this regard.
By order of the Board
Keith Vincent Ami Azoulay
Chief Executive Officer Chief Financial Officer
23 October 2015
Registered office (Botswana): Deloitte House, Plot 64518,
Fairgrounds, Gaborone, Botswana
External company registration number: 2009/022894/10
Registered office (South Africa): 373 Rivonia Boulevard, Rivonia,
South Africa.
PO Box 5219, Rivonia 2128, South Africa
JSE Sponsor: Rand Merchant Bank (a division of FirstRand Bank
Limited)
Transfer secretaries: Corpserve Botswana – Computershare Directors:
BBP Tafa (Chairman), M Tollman (Deputy Chairman), KNW Vincent (CEO),
A Azoulay (CFO), DA de la Harpe, C de Fleurieu, JM Hunt, RJ Marnitz,
MW McCulloch, GB Tollman, MPK ter Haar, J Zeitz Group Company
Secretary: S Mganga
Date: 23/10/2015 12:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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