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CUL - Cullinan Holdings - Unaudited interim results for the six months ended

Release Date: 19/06/2008 17:45
Code(s): CUL
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CUL - Cullinan Holdings - Unaudited interim results for the six months ended 31 March 2008 and dividend declaration CULLINAN HOLDINGS LIMITED (Registration number 1902/001808/06) (Share code: CUL & ISIN: ZAE000013710) ("the company" or "the group") UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2008 Group balance sheet Unaudited Unaudited Audited six months six months year end 31 March 31 March 30 September 2008 2007 2007
R`000 R`000 R`000 Assets Non-current assets 116 809 101 609 117 363 Property, plant and equipment 62 128 49 513 63 876 Investment properties 331 331 331 Goodwill 24 091 23 763 23 721 Intangible assets 25 978 24 229 25 529 Investment in associate 1 265 200 876 companies Deferred taxation 3 016 3 573 3 030 Current assets 262 507 238 954 255 759 Inventories 9 903 9 373 10 008 Accounts receivable 128 441 102 382 123 052 Taxation 24 - 531 Cash resources 124 139 127 199 122 168 Total assets 379 316 340 563 373 122 Equity and Liabilities Ordinary shareholders` equity 102 066 84 004 86 180 Preference shareholders` equity 1 046 1 046 1 046 Outside shareholders` interest 5 3 5 Total shareholders` equity 103 117 85 053 87 231 Non current liabilities 41 288 35 350 50 385 Deferred tax liability 1 806 1 539 1 729 Long-term loans 32 589 33 811 43 061 Operating lease accrual 6 893 - 5 595 Current liabilities 234 911 220 160 235 506 Short-term loans 1 716 2 380 1 954 Operating lease accrual 61 - 204 Accounts payable 231 513 211 805 225 067 Taxation 1 607 5 961 8 267 Preference dividends 14 14 14 Total equity and liabilities 379 316 340 563 373 122 Financial statistics Gearing (%) - - - Current ratio 1:1 1:1 1:1 Net asset value per share 14,3 11,8 12,14 (cents) Group income statement Unaudited Unaudited Audited six months six months year end
31 March 31 March 30 September 2008 2007 2007 R`000 R`000 R`000 Revenue 197 677 175 483 353 710 Net operating expenses (177 651) (159 350) (325 651) Operating income 20 026 16 133 28 059 Finance income 3 575 3 076 4 349 Finance expenses (1 854) (1 323) (408) Preference dividends paid (27) (27) (55) Profit before taxation 21 720 17 859 31 945 Taxation (5 456) (5 215) (10 026) Profit for the period 16 264 12 644 21 919 Profit attributable to equity 16 264 12 644 21 917 holders of the company Profit attributable to outside - - 2 shareholders` interest 16 264 12 644 21 919 Ordinary shares (000`s) In issue 718 355 718 355 718 355 Earnings per ordinary share 2,26 1,76 3,05 (cents) Fully diluted earnings per 2,26 1,76 3,05 ordinary share (cents) Headline earnings per ordinary 1,81 1,76 3,19 share (cents) Fully diluted headline earnings 1,81 1,76 3,19 per ordinary share (cents) Determination of headline earnings Reconciliation between attributable earnings and headline earnings Earnings attributable to 16 264 12 644 21 917 ordinary shareholders (Profits)/losses on disposal of (3 769) - 1 406 property, plant and equipment Total tax effect of the 546 - (408) adjustment Total minority interest of the - - - adjustment Headline earnings 13 041 12 644 22 915 Group statement of changes in equity Unaudited Unaudited Audited six months six months year end
31 March 31 March 30 September 2008 2007 2007 R`000 R`000 R`000 Ordinary share capital Balance at the beginning of 7 184 7 183 7 182 period Issued during the period - 1 1 Balance at the end of period 7 184 7 184 7 183 Share premium Balance at the beginning of 59 905 59 902 59 902 period Premium on issue of shares - 3 3 Balance at the end of period 59 905 59 905 59 905 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 (1 063) (1 318) (1 318) period Reserve on translation of (378) 168 255 foreign subsidiary Balance at the end of period (1 441) (1 150) (1 063) Accumulated profit/(loss) Balance at beginning of period (726) (15 459) (15 459) Attributable income for period 16 264 12 644 21 917 Ordinary dividend paid - - (7 184) Balance at end of period 15 538 (2 815) (726) Ordinary shareholders` equity 102 066 84 004 86 180 Group cash flow statement Unaudited Unaudited Audited six months six months year end 31 March 31 March 30 September 2008 2007 2007
R`000 R`000 R`000 Cash flow from operating activities Operating income 20 026 16 133 28 059 Adjustments for: - Depreciation 9 173 7 440 15 267 - (Profit)/Loss on sale of (3 769) 798 1 406 property, plant and equipment - Other non-cash items 965 501 3 404 (Increase)/Decrease in working 1 162 (7 525) (15 572) capital Cash generated by operations 27 557 17 347 32 564 Net finance income 1 721 1 753 3 941 Preference dividends paid (27) (27) (55) Ordinary dividends paid - - (7 184) Normal taxation (11 606) (6 872) (7 974) Secondary Taxation on Companies (3) (3) (905) Net cash inflow/(outflow) from 17 642 12 198 (20 387) operating activities Cash flows from investing activities Additions to property, plant (7 073) (5 836) (27 234) and equipment Additions to intangible assets (2 403) (1 515) (4 701) Proceeds on disposal of 4 904 379 861 property, plant and equipment Investment in associate (389) - (676) companies Net cash outflow from investing (4 961) (6 972) (31 750) activities Cash flow from financing activities Ordinary share capital issued - 4 4 Long-term loans raised/(repaid) (10 472) (2 019) 9 945 Short-term loans (238) (838) (1 244) raised/(repaid) Net cash inflow/(outflow) from (10 710) (2 853) 8 705 financing activities Net increase in cash and cash 1 971 2 373 (2 658) equivalents Cash and cash equivalents at 122 168 124 826 124 826 beginning of year Cash and cash equivalents at 124 139 127 199 122 168 end of year Notes: 1. Basis of preparation The accounting policies used in the preparation of the interim financial statements for the six months to March 2008 are the same as those used in the audited results for the financial year ended September 2007. 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. 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 2008
Travel Yachting Total and and Tourism Diving R`000 R`000 R`000
Revenue 183 203 14 474 197 677 Operating Income 19 690 336 20 026 Other information Assets excluding deferred 363 895 12 405 376 300 taxation Current liabilities 230 709 4 202 234 911 Capital expenditure - Property, plant and equipment 6 949 124 7 073 - Investment properties - - - - Intangible assets 2 403 - 2 403 Depreciation 9 097 76 9 173 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 Income 15 260 873 16 133 Other information Assets excluding deferred 325 705 11 285 336 990 taxation Current liabilities 217 088 3 072 220 160 Capital expenditure - Property, plant and equipment 5 797 39 5 836 - Investment properties - - - - Intangible assets 1 515 - 1 515 Depreciation 7 338 102 7 440 Audited year end 30 September 2007
Travel Yachting Total and and Tourism Diving R`000 R`000 R`000
Revenue 325 898 27 812 353 710 Operating Income 27 661 398 28 059 Other information Assets excluding deferred 358 234 11 858 370 092 taxation Current liabilities 230 404 5 102 235 506 Capital expenditure - Property, plant and equipment 26 978 256 27 234 - Investment properties - - - - Intangible assets 4 701 - 4 701 Depreciation 15 053 214 15 267 3. 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 24 outlets located in prime retail shopping malls in the country. A small corporate travel retail business is run under the Thompsons Travel label with three branches. The incoming delivery footprint extends to all major travel nodes in the region. The company also owns Manex, a supplier of accessories to the yacht building and diving industries. Review of the past six months Attributable earnings per share increased by 28% to R16,2 million for the six months to March 2008 and headline earnings per share increased by 3% to R13,0 million. The contributors to the growth were the Thompsons Inbound division, Thompsons Touring and Hylton Ross, all of which 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 Holidays (Outbound) Thompsons Holidays, 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 and volatile rand, high interest rates, rising inflation and political uncertainties which has resulted in lower sales in recent months. In addition, Thompsons Holidays faces the ongoing challenge of realigning itself with the disintermediation taking place in the industry. Thompsons Africa (Inbound) Thompsons Africa, the Inbound division, 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, Botswana, 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 European 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 continuing to increase 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 most of the offices. Retail Travel The Leisure retail outlets have also experienced slower sales with turnover at the same levels as those achieved in the equivalent period last year. 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. YACHTING AND DIVING Manex Manex is a supplier of accessories to the yacht building industry and also distributes diving equipment to the retail trade. This division has experienced slow sales in the six months. Steps are being taken to improve the performance of this business. PROSPECTS FOR THE NEXT SIX MONTHS The poor global economic outlook, the high inflation rate and the high interest rates facing South Africans, is expected to have a negative impact on the sales of holidays and travel products in the next six months. Pension Fund Surplus Distribution Shareholders will be aware of the various allegations made in the press regarding the Midmacor Pension Fund, details of which were disclosed in the 2006 and 2007 Annual Reports. This matter stems from actions in 1999 which did not involve any of the current management, directors and shareholders of the company. No claim has been instituted against the company and should any claim be instituted it will be opposed. The company will continue to assist the Financial Services Board in its enquiries. DIVIDEND The board has declared a dividend of 1 cent per ordinary share (number 129) to all shareholders for the financial year ending 30 September 2008. The salient dates relating to payment of the dividend are as follows: Last date to trade cum dividend Friday, 18 July 2008 Shares commence trading ex dividend Monday, 21 July 2008 Record date Friday, 25 July 2008 Payment date Monday, 28 July 2008 Share certificates may not be dematerialised or rematerialised between Monday, 21 July 2008 and Friday, 25 July 2008, both days inclusive. 19 June 2008 Directors MA Ness (Chairman)*, VET O`Hana , DD Hosking **, M Tollman ***, AN Viljoen (Managing), LA Pampallis * British ** New Zealand *** USA Non-Executive Registered office 6 Hood Avenue, Rosebank, 2196 Transfer secretaries Computershare Investor Services (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 Auditors Mazars Moores Rowland were appointed to act as auditors to the company with effect from 13 May 2008. Sponsor Arcay Moela Sponsors (Proprietary) Limited (Registration number 2006/033725/07) Date: 19/06/2008 17:45:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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