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Cullinan Holdings Limited - Interim results for the six months ended 31 March
2005
CULLINAN HOLDINGS LIMITED
(Registration number 1902/001808/06)
(Share code: CUL ISIN:ZAE000013710)
Interim results for the six months ended 31 March 2005
- Headline earnings maintained - Dividend maintained
Group balance sheet
Unaudited Unaudited Audited
six months six months year end
31 March 31 March 30 September
2005 2004 2004
R"000 R"000 R"000
ASSETS
Property, plant and equipment 38 170 30 615 34 744
Goodwill 11 751 11 790 9 909
Deferred taxation 7 652 9 000 12 000
Current assets 180 686 169 391 179 544
Inventory 9 566 8 537 9 749
Accounts receivable 61 785 65 573 62 771
Cash resources 109 335 95 281 107 024
Total assets 238 259 220 796 236 197
EQUITIES AND LIABILITIES
Ordinary shareholders" equity 63 593 49 464 54 277
Preference shareholders" equity 1 046 1 046 1 046
Total shareholders" equity 64 639 50 510 55 323
Outside shareholders interest - - -
Current liabilities 173 620 170 286 180 874
Accounts payable 140 691 138 971 146 433
Short-term loans - - -
Provisions 7 561 6 107 9 211
Redeemable preference shares 25 000 25 000 25 000
Receiver of Revenue 41 23 22
Preference dividends 327 185 208
Total equity and liabilities 238 259 220 796 236 197
Financial statistics
Gearing (%) - - -
Current ratio 1:1 1:1 1:1
Net asset value per share (cents) 9,0 7,0 7,7
Group income statement
Unaudited Unaudited Audited
six months six months year end
31 March 31 March 30 September
2005 2004 2004
R"000 R"000 R"000
Revenue 111 440 102 889 204 838
Net operating expenses (98 371) (89 507) (180 120)
Operating income before
exceptional items 13 069 13 382 24 718
Exceptional items (Note 2) (1 262) (1 226) (930)
Operating income 11 807 12 156 23 788
Interest income 2 779 2 356 4 800
Preference dividend (986) (1 089) (2 109)
Income before taxation 13 600 13 423 26 479
Taxation - STC (123) (136) (1 162)
- Normal* (4 349) - -
Net income after taxation 9 128 13 287 25 317
Outside shareholder"s portion of
losses/(profits) - - -
Income attributable to ordinary
shareholders 9 128 13 287 25 317
Ordinary shares (000"s)
In issue 718 188 718 088 718 188
Earnings per ordinary share 1,3 1,9 3,5
Fully diluted earnings per share 1,3 1,9 3,5
Headline earnings per ordinary
share (cents) 1,4 2,0 3,6
Determination of headline
earnings
Net attributable income 9 128 13 287 25 317
Exceptional items (Note 2) 1 262 1 226 930
Headline income 10 390 14 513 26 247
Group statement of changes in equity
Unaudited Unaudited Audited
six months six months year end
31 March 31 March 30 September
2005 2004 2004
R"000 R"000 R"000
Ordinary share capital
Balance at the beginning of
period 7 182 7 172 7 172
Issued during the period - 9 10
Balance at the end of period 7 182 7 181 7 182
Share premium
Balance at the beginning of
period 59 900 59 870 59 870
Premium on issue of shares - 27 30
Balance at the end of period 59 900 59 897 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 (12) (147) (147)
Reserve on translation of foreign
subsidiary 188 175 135
Balance at the end of period 176 28 (12)
Accumulated profit/(loss)
Balance at beginning of period (33 673) (51 809) (51 809)
Attributable income for the
period 9 128 13 287 25 317
Ordinary dividend paid - - (7 181)
Balance at the end of period (24 545) (38 522) (33 673)
Ordinary shareholders" equity 63 593 49 464 54 277
Group cash flow statement
Unaudited Unaudited Audited
six months six months year end
31 March 31 March 30 September
2005 2004 2004
R"000 R"000 R"000
Cash flow from operating
activities
Operating income 11 807 12 156 23 788
Depreciation 3 455 3 098 6 711
(Profit)/Loss on sale of fixed
assets 88 134 25
Other non-cash Items 847 889 (270)
(Increase)/Decrease in working
capital (6 224) 7 958 20 111
Cash generated from
operating activities 9 973 24 235 50 365
Interest received 2 779 2 356 4 800
Preference dividends paid (867) (1 078) (2 075)
Ordinary dividends paid - - (7 181)
Secondary Taxation on Companies (103) (137) (1 164)
Net cash inflow/(outflow)
from operating activities 11 782 25 376 44 745
Cash flows from investing
activities
Investment to maintain
operations:
Additions to property, plant and
equipment (7 399) (5 671) (14 437)
Acquisition of goodwill (2 500) - -
Proceeds on disposal of property,
plant and equipment 428 395 1 531
Net cash inflow/(outflow)
from investing activities (9 471) (5 276) (12 906)
Cash flows from financing
activities
Ordinary share capital issued - 36 40
Interest bearing term loans
repaid - (1 627) (1 627)
Net cash inflow/(outflow) from
financing activities - (1 591) (1 587)
Net increase in cash and cash
equivalents 2 311 18 509 30 252
Cash and cash equivalents at
beginning of period 107 024 76 772 76 772
Cash and cash equivalents at
end of period 109 335 95 281 107 024
Notes:
1. Accounting policies
The accounting policies used in the preparation of the interim financial
statements for the six months to March 2005 are the same as those used in the
audited results for the financial year ended September 2004.
The interim financial statements comply with Statements of South African
Generally Accepted Accounting Practice.
2. Exceptional items
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 March 31 March 30 September
2005 2004 2004
R000"s R000"s R000"s
Amortisation of goodwill (585) (489) (982)
Impairment of goodwill - - (1 469)
Computer implementation costs (677) (723) (1 805)
Other - (14) 326
Deferred tax change - - 3 000
Total (1 262) (1 226) (930)
3. Basis of accounting
These consolidated results for the six months were drawn up in
compliance with statement AC127 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.
4. JSE Securities Exchange South Africa ("JSE")
The directors of the company ensured compliance with the JSE Listings
Requirements during the year under review.
5. Segmental reporting
The directors are of the opinion that a segmental report is not required
as the Group"s operations consist mainly of tourism and travel.
Comments
Cullinan Holdings controls a spread of business units that trade in the travel
and tourism industry in Southern Africa. The bulk of the company"s income is
derived from Tour Operating where its core brand Thompsons enjoys significant
market shares in both the incoming and outgoing sectors. It also has a small
share of the retail travel business. The retail brand Pentravel caters
exclusively for the leisure traveller and has 18 branches. Thompsons Travel
provides corporate travel services and has three branches. The company has
sales offices in Japan and Singapore which supply the incoming business. The
intention is to expand both the delivery footprint within the region, and
exploit international opportunities when they arise.
Review of the past six months
Profit before taxation for the six months to March 2005 was similar to that
for the comparable period last year. *The accounts reflect a taxation charge
which reduces the attributable and headline earnings by approximately 30%.
This provision for taxation is a non cash charge to the income statement as
the company has an assessed tax loss. It is expected that this loss will be
fully utilised over the next two financial years.
Cash flow remained positive during the six month period despite an ongoing
capital expenditure programme, mainly on computer and telephone technology, a
small acquisition and an increase in working capital.
The outbound business performed well in spite of the tsunami tragedy which
occurred over the peak season in Thailand, a major market for our outbound
business. The inbound business achieved its budget in difficult circumstances.
Thompsons Tours (Outbound)
The strong rand continues to support growth in the market for outbound travel.
On the domestic front, a significant switch from scheduled to low cost air
carriers is taking place. This is attracting new buyers into the air holiday
market which will be good for tour operators.
Thompsons Africa (Inbound)
A shortage of air seats at affordable prices from major hubs to South Africa
is a source of concern. The Thompsons African delivery footprint is expanding
and the new offices in Victoria Falls and Windhoek are performing well.
Traffic to countries outside South Africa itself is increasing, which is
encouraging.
Retail Travel
Pentravel has opened three new shops, and start up costs reduced an otherwise
good performance. The Corporate retail brand Thompsons Travel showed a welcome
improvement in its performance. The traditional commission based model for air
ticket sales is being changed to a fee based structure. The new business model
has been accepted by all corporate customers, and no disruption to the
business is anticipated.
Manex and Power Marine
Manex supplies components to the local yacht building industry and distributes
scuba diving gear to the retail trade. This division had a difficult six
months. It is largely dependent on the health of the local yacht building
industry which is being adversely affected by the strong currency.
Prospects for the next six months
Assuming that the currency remains stable at current levels, no major changes
are expected in the trading performance during the next six months.
Dividend
The board has declared an ordinary dividend for the financial year ending
September 2005 of 1 cent per ordinary share (number 126) to all shareholders.
The last date to trade cum dividend will be on Thursday 9 June 2005. Shares
will commence trading ex dividend on Friday 10 June 2005. The record date will
be Friday 17 June 2005. The dividend will be paid on Monday 20 June 2005.
Share certificates may not be dematerialised or rematerialised between Friday
10 June 2005 and Friday 17 June 2005, both days inclusive.
26 May 2005
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 R Bagus (Non-executive)
G B Tollman(Non-executive),
L A Pampallis
Registered Office
1st Floor, Dunkeld West Centre, Corner Jan Smuts Avenue and Bompas Road,
Dunkeld West, Johannesburg, South Africa
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: 26/05/2005 05:28:14 PM Supplied by www.sharenet.co.za
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