Wrap Text
Unaudited interim announcement of condensed financial results for the six months ended 31 August 2014
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 2014
Highlights
Revenue up 13% to BWP880 million
EBITDA up 34% to BWP142 million
Profit after tax up 69% to BWP82 million
HEPS up 73% to 33 thebe per share
Cash generated by operations up 15% to BWP198 million
RevPar up 9%
Occupancy percentage up to 73% from 67%
Condensed group statements of comprehensive income
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
BWP’000 31 Aug 2014 Change 31 Aug 2013 28 Feb 2014
Revenue 880 356 13% 778 460 1 401 206
Cost of sales (501 284) (449 297) (816 387)
Gross profit 379 072 329 163 584 819
Other gains 5 140 2 836 17 200
Operating expenses (238 349) 6% (225 303) (452 166)
Foreign exchange
(losses)/gains (3 695) (329) 1 315
Operating profit
for year before
items listed below
(EBITDA) 142 168 34% 106 367 151 168
Impairment loss (5 179) (2 830) (8 902)
Depreciation and
amortisation (26 536) (23 846) (50 093)
Operating profit 110 453 39% 79 691 92 173
Net finance costs (2 274) (3 854) (7 509)
Unrealised foreign
exchange loss on
loans (1 412) (5 041) (9 851)
Share of associate
company profit 3 365 1 524 2 708
Profit before
taxation 110 132 52% 72 320 77 521
Taxation (27 821) (23 715) (29 031)
Profit for the
period 82 311 69% 48 605 48 490
Other comprehensive
income/(loss) 2 271 (917) (5 275)
Items that may be
subsequently reclassified
to profit or loss
Exchange differences
on translating foreign
operations 2 271 (917) (5 275)
Total comprehensive
income for the
period 84 582 47 688 43 215
Profit attributable to:
Owners of the
Company 74 787 43 434 46 147
Non-controlling
interest 7 524 5 171 2 343
82 311 48 605 48 490
Total comprehensive
income attributable to:
Owners of the
Company 77 037 43 270 41 581
Non-controlling
interest 7 545 4 418 1 634
84 582 47 688 43 215
Number of shares issued (thousands)
Issued and weighted
average 231 000 231 000 231 000
Diluted weighted
average 236 531 232 604 234 003
Earnings per share
(thebe)
Basic 32.38 72% 18.80 19.98
Diluted 31.62 69% 18.67 19.72
Basic headline 32.55 73% 18.79 16.07
Diluted headline 31.79 70% 18.66 15.86
Condensed group statement of financial position
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
BWP’000 31 Aug 2014 31 Aug 2013 28 Feb 2014
Assets
Non-current assets 484 464 474 328 474 933
Property, plant and
equipment 407 947 387 753 387 920
Goodwill 34 889 32 874 32 696
Intangible assets 16 365 11 085 17 913
Investments and loans in
associates 12 003 14 840 13 982
Loans receivable – 1 664 237
Deferred tax assets 13 260 26 112 22 185
Current assets 553 092 502 137 407 530
Inventories 24 841 21 150 19 707
Receivables and
prepayments 119 020 150 603 77 903
Current tax receivable 5 846 8 023 14 530
Bank balances and cash 403 385 322 361 295 390
Total assets 1 037 556 976 465 882 463
Equity and liabilities
Equity attributable to
owners of the Company 442 284 382 200 382 695
Stated capital 153 703 153 703 153 703
Foreign currency
translation reserve 13 056 15 251 10 840
Common control reserve (73 324) (73 324) (73 324)
Other non-distributable 21 039 18 295 20 346
reserves
Share-based payment
reserve 16 316 8 442 10 802
Retained income 311 494 259 833 260 328
Non-controlling interest (325) (4 661) (7 747)
Total equity 441 959 377 539 374 948
Non-current liabilities 105 537 133 095 124 221
Borrowings 77 219 105 754 96 597
Deferred tax liabilities 28 318 27 341 27 624
Current liabilities 490 060 465 831 383 294
Trade and other payables 412 142 385 627 311 324
Borrowings – current
portion 26 075 25 377 25 613
Current tax liabilities 4 666 3 266 1 686
Bank overdrafts 47 177 51 561 44 671
Total liabilities 595 597 598 926 507 515
Total equity and
liabilities 1 037 556 976 465 882 463
Net asset value per share
(thebe) 191 165 166
Net tangible asset value
per share (thebe) 169 146 152
Condensed group statement of cash flows
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
BWP’000 31 Aug 2014 31 Aug 2013 28 Feb 2014
Net cash generated from
operating activities 197 550 172 183 184 426
Net cash used in
investing activities (46 118) (33 594) (51 819)
Net cash used in
financing activities (45 952) (17 300) (32 959)
Net increase in cash and
cash equivalents 105 480 121 289 99 648
Unrealised exchange gains
on foreign cash balances 9 9 874 11 434
Cash and cash equivalents
at the beginning of the
period 250 719 139 637 139 637
Cash and cash equivalents
at the end of the period 356 208 270 800 250 719
Condensed group statement of changes in equity
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
BWP’000 31 Aug 2014 31 Aug 2013 28 Feb 2014
Opening balance 374 948 337 469 337 469
Minority portion of
dividend paid (1 622) (1 622) (2 093)
Dividends paid (23 100) (9 240) (9 240)
Total comprehensive
income for the period 84 582 47 688 43 215
Share-based payment reserve 5 514 3 791 6 151
Other 1 637 (547) (554)
Closing balance 441 959 377 539 374 948
Comprising:
Stated capital 153 703 153 703 153 703
Foreign currency
translation reserve 13 056 15 251 10 840
Common control reserve (73 324) (73 324) (73 324)
Other non-distributable
reserves 21 039 18 295 20 346
Share-based payment
reserve 16 316 8 442 10 802
Retained income 311 494 259 833 260 328
Total shareholders'
equity 442 284 382 200 382 695
Non-controlling interest (325) (4 661) (7 747)
Total equity 441 959 377 539 374 948
Segmental analysis
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
BWP’000 31 Aug 2014 31 Aug 2013 28 Feb 2014
Revenue
Botswana 280 325 245 470 440 940
Namibia 117 852 113 188 218 296
South Africa 688 640 595 701 1 059 545
Zambezi 91 044 77 698 139 270
Intergroup (297 505) (253 597) (456 845)
Group 880 356 778 460 1 401 206
Segment profit
Botswana 65 326 58 660 98 459
Namibia 13 348 1 145 3 032
South Africa 46 535 36 677 26 533
Zambezi 15 517 7 377 4 592
Intergroup (3) 1 37
Group 140 723 103 860 132 653
Depreciation and amortisation
Botswana (13 418) (13 693) (27 672)
Namibia (4 529) (4 015) (7 292)
South Africa (3 175) (2 042) (4 280)
Zambezi (5 414) (4 096) (10 849)
Group (26 536) (23 846) (50 093)
Transactions unallocated to
a segment
Other gains 5 140 2 836 17 200
Foreign exchange
(losses)/gains (3 695) (329) 1 315
Impairment losses (5 179) (2 830) (8 902)
Interest paid (3 226) (4 484) (8 788)
Interest received 952 630 1 279
Unrealised forex loss –
loans (1 412) (5 041) (9 851)
Associate earnings 3 365 1 524 2 708
Profit before taxation 110 132 72 320 77 521
Taxation (27 821) (23 715) (29 031)
Profit after tax 82 311 48 605 48 490
Segmental assets
Botswana 476 899 451 956 425 292
Namibia 158 391 144 928 130 061
South Africa 374 502 335 913 239 639
Zambezi 114 952 123 209 100 214
Central financing activities
and eliminations (87 188) (79 541) (12 743)
Group 1 037 556 976 465 882 463
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
BWP’000 31 Aug 2014 31 Aug 2013 28 Feb 2014
Determination of
headline earnings
Reconciliation between
profit attributable to
owners of the Company
and headline earnings
Profit attributable to
owners of the Company 74 787 43 434 46 147
Adjustments
Gains and compensation
on disposal of property,
plant and equipment (3 989) (2 836) (4 763)
Profit on disposal of
interests in
subsidiaries (1 020) – –
Profit on deemed disposal
of investment
in associate (105) – (3 051)
Impairment of assets 5 102 855 423
Impairment of Intangible
assets – 1 897 1 897
Profit on disposal of non-
current assets held for sale – – (2 582)
Tax effects of
adjustments 32 (29) (909)
Minority interest 385 82 (41)
Headline earnings 75 192 43 403 37 121
Commitments
Capital
Authorised by directors
and contracted for – – –
Not yet contracted for but authorised by
directors 32 435 17 916 92 797
32 435 17 916 92 797
It is intended to finance capital expenditure from working capital
generated and existing borrowing facilities.
Operating leases
Minimum lease payments due
– within one year 24 148 16 285 23 767
– in second to fifth year
inclusive 61 568 53 200 63 936
– after fifth year 100 367 81 297 108 977
186 083 150 782 196 680
Borrowings
Non-current
Interest bearing 92 015 122 484 111 620
Non-interest bearing 11 279 8 647 10 590
Less: Current portion of
long-term liabilities (26 075) (25 377) (25 613)
77 219 105 754 96 597
Commentary
On the back of strong growth over the past four consecutive reporting
periods the Group continued this trend in the first half of the
financial year and recorded an increase of 73% in HEPS. Economic
conditions in the US market remained strong with an encouraging but
modest improvement in the European market.
The Wilderness business model
Founded in 1983, the Group owns and operates more than 60 luxury
safari camps in nine African countries. Most camps are marketed under
one of two trading brands, Wilderness Safaris or Wilderness
Collection, both recognised as leaders in the high-end ecotourism
sector of the travel industry. The camps are classified in terms of
product into four categories: Premier, Classic, Adventure and Tour
Series.
The business is vertically integrated, offering international and
regional guests unique experiences in remote wildlife areas by
providing a multiple service platform of reservations, transfers
and access, as well as accommodation and guest activities (“Owned”).
Itineraries may also include an element of various independent
products (“Independent”), these being hotels, lodges or B&Bs in which
the Group has no shareholding interest.
Financial review
Revenue grew by 13% to BWP880 million (2013: BWP778 million) largely
through organic growth as nearly all camps recorded improved
occupancy rate, with some assistance from the stronger US Dollar.
Owned bednight sales increased by 17% to 82 199
(2013: 70 220), with 7% increase in available bednights to 113 004
from 105 376 due mainly to two additional camps. As a result,
occupancy rate increased from 67% to 73% this year. Reduced discounting
and an increase in bednight rates resulted in an increase of 9% in
Revenue per Available Room (RevPar). This measure excludes revenue
from Independent product. The mix of occupancy reflects an improvement
in all brands with Premier up 6%, Classic up 14%, Adventure up 23% and
Tour Series up 25%.
The average exchange rate for the Group reporting currency (Botswana
Pula) for the period was 6% weaker against the US Dollar at BWP8.81,
having the effect of increasing the reported revenue. The ZAR
depreciated against the Botswana Pula by 6% to R1,20, on translation
of the South African and Namibian operations. The combination of the
net currency movement contributed approximately 3% to the reported
revenue growth.
Gross margin has improved to 43% from 42% as the higher yielding
Owned product contributed 59% of revenue (2013 : 57%). This was a
result of a 17% year-on-year increase in Owned product sales compared
to an 8% growth in Independent product sales. The improved mix has
the effect of increasing margins. However, the decision taken to
invest in further improving the quality of the food and service at
all our camps has increased variable costs per bednight.
EBITDA margin has improved from 14% to 16% with all geographic
segments reporting an improved performance. Operating costs in BWP
are showing an increase of only 6% but this is partly explained by
the translation of costs to Botswana Pula as the South African and
Namibian operations recorded a 9% increase in local currency terms.
Excluding the effects of disposed businesses and additional camps
(refer below for details), like-for-like costs were well
controlled and increased by an acceptable 7%. This result is
satisfactory considering fuel costs were up 10%, strategic spend on
information technology projects continued and an increase to
BWP5.5 million in share-based payments charges arising from the Group
long term incentive plan.
Other gains amounting to BWP5.1million include profit from insurance
claims amounting to BWP3.9 million and BWP1 million from the profit
on sale of two subsidiary companies. Impairment losses amounted to
BWP5.2 million, of which BWP3 million related to impairment of camp
assets as negotiations of a new lease continue, BWP1.8 million due to
the surrender of a concession in Zambia and the balance relating to
various property, plant and equipment.
In line with the Group’s hedging strategy, forward cover remains
between 30% and 50% of the calculated exposure over the next four
months. Foreign exchange losses amounted to BWP3.7 million.
Net finance costs decreased from BWP3.9 million to BWP2.3 million
reflecting the lower level of interest bearing debt.
The Group’s effective tax rate decreased from 33% in the prior year
to 25%. This reduction is due to the first time recognition of a
deferred tax asset and the turnaround in previously loss making
subsidiaries which are shielded by unrecognised deferred tax assets.
Excluding this, and on a normalised basis, the effective tax rate
would have been approximately 30%. The effective tax rate is higher
than the Group’s nominal rate of 22% largely due to the higher tax
rates applicable in the other geographic segments.
BWP49 million was re-invested in capital expenditure over the period.
This related mainly to the opening of the new Hoanib Skeleton Coast
Camp in Namibia, upgrades of various Botswana based camps, the
purchase of aircraft engines and an investment in new vehicles.
Cash available (being the cash balances less overdrafts) has
increased by 32% to BWP356 million despite the 25% decrease in
average interest bearing debt due to the scheduled repayment of
facilities and the capital expenditure invested.
Dividend
In line with the policy to only consider paying dividends based on
full year results, no interim dividend is proposed.
Leases
The leases for the concessions upon which our Mombo, Little Mombo and
Xigera camps are located expired in July and August 2014. These have
not yet been renewed as the structures and the process by which these
concessions are allocated and administered 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. Acquisitions/expansion On 1 July 2014 the Group increased
its shareholding in Baobab Lodge (Pty) Ltd from 38% to 54% for a
consideration of approximately BWP1.5 million. The results of the
entity were previously equity accounted and are now consolidated. The
business operates two Tour Series camps consisting of 16 beds each.
The new Hoanib Skeleton Coast Camp in Namibia opened on 1 August 2014
and has been well received. This is a 16 bed camp classified under the
Classic brand. In addition, construction of the new Linkwasha camp in
Zimbabwe has commenced and the camp is expected to open during the
second quarter of 2015. This will be an 18 bed Classic camp.
Subsequent events
In line with Group efforts to consolidate and focus on core business,
the Group has disposed of its investment in the Malawian business for
BWP1.2 million. In addition, following the destruction by flooding of
Pafuri Camp in January 2013, the Board took the decision to terminate
the concession agreement and exit from the area. The remaining assets
were disposed for approximately BWP2.3 million.
Segmental information
As reported in the last financial year and in line with a change in
the internal structure of reporting and management, the Group has
modified its operating segments from operating divisions to
geographic segments by country or region. Consequently the segment
report has been amended to reflect these new segments as required by
the “management approach” of IFRS 8 – Operating Segments. Segment
profit and loss excludes other gains and foreign exchange gains and
losses. In order to allow for comparison the segment information has
been restated accordingly.
Basis of preparation
This interim report complies with International Accounting Standard
34 – Interim Financial Reporting and the disclosure requirements of
the Botswana Stock Exchange and the JSE Limited. The interim report
has been prepared using accounting policies that comply with
International Financial Reporting Standards which are consistent with
those applied in the financial statements for the year ended
28 February 2014.
New accounting policies adopted
Improvements to IFRS
During the period under review, the Group adopted all the IFRS and
interpretations that were effective and deemed applicable to the
Group. None of these had any material impact on the financial results
of the Group.
Outlook
Demand from the US is expected to continue and the Group remains
positive for the second half of the year. However, even though the
Group has seen a small number of cancellations and a slight drop off
in enquiries, if the Ebola outbreak in West Africa persists it could
have an impact on the Group and tourism as a whole. In addition, the
potential introduction of the new visa requirements for travellers to
South Africa could further impact the results of the Group. The
implementation of the new regulations has been delayed until 1 June
2015. Both events are viewed as a short-term challenge and are not
expected to have an impact in the medium to long term. The Group is
continuing its assessment of various opportunities identified for
expansion both within the current geographic footprint and beyond into
other regions of Africa.
By order of the Board
Parks Tafa Ami Azoulay
Chairman Chief Financial Officer
27 October 2014
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
BSE: Primary Listing JSE: Secondary Listing
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, RM Hartman, JM Hunt,
RJ Marnitz, MW McCulloch, GB Tollman, MPK ter Haar, J Zeitz
Group Company Secretary: S Mganga
www.wilderness-group.com
www.wilderness-safaris.com
www.wilderness-collection.com
www.wilderness-residents.co.za
Date: 27/10/2014 05:11:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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