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CUL - Cullinan - Unaudited Interim Results For The Six Months Ended 31
March 2007 and dividend declaration
Cullinan Holdings Limited
(Registration number 1902/001808/06)
(Share code: CUL & ISIN: ZAE000013710)
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2007
Group balance sheet
Unaudited Unaudited Audited
six months six months year end
31 March 31 March 30 September
2007 2006 2006
R`000 R`000 R`000
Assets
Property, plant and equipment 49 513 18 197 50 721
Investment properties 331 331 331
Goodwill 23 763 11 882 23 802
Intangible assets 24 229 23 069 24 287
Investment in joint venture 200 120 200
Loan to joint venture - 954 -
Deferred taxation 3 573 3 787 3 573
Current assets 238 954 201 028 211 100
Inventories 9 373 9 934 11 042
Accounts receivable 102 382 70 174 75 232
Cash resources 127 199 120 920 124 826
Total assets 340 563 259 368 314 014
Equity and Liabilities
Ordinary shareholders` equity 84 004 72 114 71 188
Equity portion of preference 1 046 1 046 1 046
shareholders` equity
Minority interest 3 - 3
Total shareholders` equity 85 053 73 160 72 237
Non current liabilities 35 350 - 37 071
Deferred tax liability 1 539 - 1 241
Long-term loans 33 811 - 35 830
Current liabilities 220 160 186 208 204 706
Short-term loans 2 380 - 3 218
Accounts payable 202 907 172 569 186 812
Provisions 8 898 9 206 7 041
Receiver of Revenue 5 961 4 423 7 621
Preference dividends 14 10 14
Total equity and liabilities 340 563 259 368 314 014
Financial statistics
Gearing (%) - - -
Current ratio 1:1 1:1 1:1
Net asset value per share (cents) 11,8 10,2 10,0
Group income statement
Unaudited Unaudited Audited
six months six months year end
31 March 31 March 30 September
2007 2006 2006
R`000 R`000 R`000
Revenue 175 483 129 028 269 076
Net operating expenses (159 350) (114 419) (243 872)
Operating profit before 16 133 14 609 25 204
exceptional items
Exceptional items - - (1 629)
(Note 2)
Profit from operations 16 133 14 609 23 575
Finance income 3 076 2 500 5 922
Finance costs (1 323) (240) (1 274)
Preference dividend (27) (27) (54)
Profit before taxation 17 859 16 842 28 169
Taxation - STC (3) (3) (905)
- Normal and (5 212) (4 829) (8 286)
deferred
Profit for period 12 644 12 010 18 978
Profit attributable to equity 12 644 12 010 18 975
holders of the parent
Profit attributable to minority - - 3
interest
12 644 12 010 18 978
Ordinary shares (000`s)
In issue 718 355 718 272 718 272
Earnings per ordinary share 1,8 1,7 2,6
(cents)
Fully diluted earnings per 1,8 1,7 2,6
ordinary share (cents)
Headline earnings per ordinary 1,8 1,7 2,6
share (cents)
Fully diluted headline earnings 1,8 1,7 2,6
per ordinary share (cents)
Determination of headline earnings
There are no adjustments to profit for period in order to determine
headline earnings.
Group statement of changes in equity
Unaudited Unaudited Audited
six months six months year end
31 March 31 March 30 September
2007 2006 2006
R`000 R`000 R`000
Ordinary share capital
Balance at the beginning of 7 183 7 182 7 182
period
Issued during the period 1 1 1
Balance at the end of period 7 184 7 183 7 183
Share premium
Balance at the beginning of 59 902 59 900 59 900
period
Premium on issue of shares 3 2 2
Balance at the end of period 59 905 59 902 59 902
Share capital reduction
reserve fund
Balance at the beginning of 20 876 20 876 20 876
period
Balance at the end of period 20 876 20 876 20 876
Capital redemption reserve
fund
Balance at the beginning of 4 4 4
period
Balance at the end of period 4 4 4
Foreign currency translation
reserve
Balance at the beginning of (1 318) 55 55
period
Reserve on translation of 168 (65) (1 373)
foreign subsidiary
Balance at the end of period (1 150) (10) (1 318)
Property, plant and equipment
revaluation reserve
Balance at the beginning of 95 - -
period
Revaluation of property, - - 600
plant and equipment
Transfer to/(from) reserves (4) - (505)
Balance at the end of period 91 - 95
Accumulated profit/(loss)
Balance at beginning of (15 554) (27 851) (27 851)
period
Profit for period 12 644 12 010 18 975
Transfer to/(from) 4 - 505
revaluation reserve
Ordinary dividend paid - - (7 183)
Balance at the end of period (2 906) (15 841) (15 554)
Ordinary shareholders` equity 84 004 72 114 71 188
Group cash flow statement
Unaudited Unaudited Audited
six months six months year end
31 March 31 March 30 September
2007 2006 2006
R`000 R`000 R`000
Cash flow from operating
activities
Profit from operations 16 133 14 609 23 575
Depreciation 7 440 4 584 7 322
(Profit)/Loss on sale of 798 (17) (95)
property, plant and equipment
Other non-cash items 501 (78) (1 474)
(Increase)/Decrease in (7 525) 6 833 17 562
working capital
Cash generated from operating 17 347 25 931 46 890
activities
Net finance income 1 753 2 260 4 648
Preference dividends paid (27) (32) (55)
Ordinary dividends paid - - (7 183)
Normal taxation (6 872) - (800)
Secondary Taxation on (3) (5) (907)
Companies
Net cash inflow/(outflow) 12 198 28 154 42 593
from operating activities
Cash flows from investing
activities
Investment to maintain
operations:
Additions to property, plant (5 836) (6 088) (19 221)
and equipment
Additions to intangible (1 515) (2 250) (3 712)
assets
Proceeds on disposal of 379 35 281
property, plant and equipment
Investment to expand
operations:
Acquisition of subsidiary - - (30 969)
Investment in joint venture - (724) (80)
Net cash outflow from (6 972) (9 027) (53 701)
investing activities
Cash flows from financing
activities
Ordinary share capital issued 4 3 3
Long-term loans (2 019) - 32 384
raised/(repaid)
Short-term loans (838) - 1 757
raised/(repaid)
Net cash inflow/(outflow) (2 853) 3 34 144
from financing activities
Net increase in cash and cash 2 373 19 130 23 036
equivalents
Cash and cash equivalents at 124 826 101 790 101 790
beginning of period
Cash and cash equivalents at 127 199 120 920 124 826
end of period
Notes:
1. Basis of preparation
The accounting policies used in the preparation of the interim financial
statements for the six months to March 2007 are the same as those used in
the audited results for the financial year ended September 2006.
These consolidated results for the six months were drawn up in compliance
with statement IAS 34 of International Financial Reporting Standards and
the company has complied with the requirements of the Companies Act, 1973
(Act 61 of 1973) as amended.
2. Exceptional items
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 March 31 March 30 September
2007 2006 2006
R`000 R`000 R`000
Acquisition costs - - (1 629)
Total - - (1 629)
3. Business segment analysis
The group is organised into two main business segments:
- Travel and Tourism
Yachting and diving accessories (Manex)
Unaudited
six months
31 March 2007
Travel Yachting Total
and and
Tourism Diving
R`000 R`000 R`000
Revenue 159 791 15 692 175 483
Operating profit/(loss) before 15 260 873 16 133
exceptional items
Other information
Assets excluding deferred 325 705 11 285 336 990
taxation
Current liabilities 217 302 3 072 220 374
Capital expenditure
- Property, plant and 5 797 39 5 836
equipment
- Investment properties - - -
- Intangible assets 1 515 - 1 515
Depreciation 7 338 102 7 440
Unaudited
six months
31 March 2006
Travel Yachting Total
and and
Tourism Diving
R`000 R`000 R`000
Revenue 117 229 11 799 129 028
Operating profit/(loss) before 14 548 61 14 609
exceptional items
Other information
Assets excluding deferred 245 229 10 352 255 581
taxation
Current liabilities 183 017 3 191 186 208
Capital expenditure
- Property, plant and 6 045 43 6 088
equipment
- Investment properties - - -
- Intangible assets 2 250 2 250
Depreciation 4 450 134 4 584
Audited
year end
30 September 2006
Travel Yachting Total
and and
Tourism Diving
R`000 R`000 R`000
Revenue 245 552 23 524 269 076
Operating profit/(loss) before 25 522 (318) 25 204
exceptional items
Other information
Assets excluding deferred 298 184 12 057 310 241
taxation
Current liabilities 236 936 4 841 241 777
Capital expenditure
- Property, plant and 19 058 163 19 221
equipment
- Investment properties - - -
- Intangible assets 3 706 6 3 712
Depreciation 7 103 219 7 322
4. JSE Limited ("JSE")
The directors of the company ensured compliance with the JSE Listings
Requirements during the year under review.
Comments
Cullinan Holdings owns businesses that focus on the travel and tourism
industry in Southern Africa. The major part of its income comes from Tour
Operating under the Thompsons brand in both the incoming and outgoing
markets and a day tour and coaching business under the Hylton Ross brand.
The retail brand Pentravel operates in the leisure travel sector with 21
outlets located in prime retail shopping malls in the country. A small
corporate business is run under the Thompsons Travel label with three
branches. The incoming delivery footprint extends to all the major travel
nodes in the region. The company also owns Manex, a supplier of accessories
to the yacht building industry.
Review of the past six months
Attributable and headline earnings for the six months increased by 5,3% to
R12,6 million. The major contributors to this growth were the Inbound
division and Hylton Ross, both of whom enjoyed good trading conditions and
improved profits. The Outbound division and the Leisure retail operations
experienced slower sales.
The group`s cash flow remained positive for the period under review.
TRAVEL AND TOURISM
Thompsons Tours (Outbound)
The Outbound division is a wholesale supplier of travel products and
holidays to the South African market. The domestic market is being affected
by a weaker rand and online distribution channels. The Outbound division
faces the challenge of realigning itself with the changes taking place in
the industry.
Thompsons Africa (Inbound)
Thompsons Africa deals with foreign Tour Operators and provides a wide
range of services to tourists in the Southern African region. This division
provides a full destination management service in South Africa, Namibia,
Zimbabwe, Zambia, Mozambique and Mauritius. Thompsons Africa has a
geographically well diversified client base with customers in Europe, UK,
USA, Far East, Middle East, Australia and South America. The mature UK and
Europe market continues to grow and there has been good growth out of the
US and Asia which is particularly price sensitive.
Thompsons Africa had a good six months with increased sales and
profitability. Although sales are generally priced in rands, the weaker
currency has contributed to sales growth by making the Southern Africa
destination more competitive. In addition, there are indications that the
2010 World Cup is increasing awareness of Southern Africa as a holiday
destination.
Thompsons Africa Touring and Safaris
The Touring and Safaris division provides ground handling services in the
Southern African region with offices in 13 tourist hubs in Southern Africa.
These services include transfers, day tours, game drives, camping safaris
and guaranteed departure tours.
Sales growth in the six months has been good with a commensurate increase
in profits. The sales growth has occurred across all offices.
Retail Travel
The Leisure retail outlets have also experienced sales, in rand terms, at
the same level as those achieved in the equivalent period of last year.
Thompsons Travel, the corporate retail division, continues to improve but
requires a BEE partner in order to achieve the growth required to make this
an acceptable business.
Hylton Ross
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.
This company experienced good trading conditions in the six months with
increases in both sales and profitability. This is the first full reporting
period in which the profits of this acquisition have impacted on the
group`s results.
YACHTING AND DIVING
Manex
Manex is a supplier of accessories to the yacht building industry and also
distributes diving equipment to the retail trade. Trading conditions for
the six months improved on the back of a weaker rand and this division
reported improved sales and profits.
Prospects for the next six months
Trading conditions for the Inbound division and Hylton Ross should continue
to be good and the full impact of the Hylton Ross acquisition will continue
to positively influence the group`s results. However challenges exist in
the Leisure Retail and Outbound divisions. The appointment of Mr Andre
Viljoen as CEO of the group with effect from January 2007 will assist the
management of these divisions to realign their businesses to the new
environment.
Dividend
The board has declared a dividend of 1 cent per ordinary share (number 128)
to all shareholders for the financial year ending 30 September 2007. The
salient dates relating to payment of the dividend are as follows:
Last date to trade cum dividend Friday, 15 June 2007
Shares commence trading ex dividend Monday, 18 June 2007
Record date Friday, 22 June 2007
Payment date Monday, 25 June 2007
Share certificates may not be dematerialised or rematerialised between
Monday, 18 June 2007 and Friday, 22 June 2007, both days inclusive.
31 May 2007
Directors
M A Ness (Non-executive Chairman), D D Hosking (Non-executive) V E T O`Hana
(Non-executive) A A Thompson, A N Viljoen (CEO) M Tollman (Non-executive),
L A Pampallis
Registered Office
The Travel House
6 Hood Avenue, Rosebank
Sponsor
Arcay Moela Sponsors (Pty) Limited
4th Floor, South Office Tower, Hyde Park Corner, Hyde Park
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: 31/05/2007 17:10:01 Supplied by www.sharenet.co.za
Produced by the JSE SENS Department.
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