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Interim results for the period ended 30 June 2012
IFA HOTELS & RESORTS LIMITED
("IFA SA Group")
Registration number 1919/001318/06
Share code: IFH ISIN: ZAE000075669
CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE PERIOD ENDED 30 JUNE 2012
CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
Reviewed Reviewed Audited
30 June 30 June 31 December
2012 2011 2011
R'000 R'000 R'000
ASSETS
Non-current assets 464 964 557 159 473 132
Property, plant and equipment 110 325 110 611 111 984
Goodwill 2 298 2 298 2 298
Investments in joint venture
Investment in associates 1 308
Loans to associates 324 304 410 152 324 403
Financial assets 2 416 10 114 11 079
Deferred tax 25 621 22 676 23 368
Current assets 234 958 236 082 218 509
Inventories 960 920 1 138
Financial assets 14 095 34 252 9 479
Current tax receivable
Township properties 153 785 153 824 157 672
Trade and other receivables 24 954 30 084 27 421
Cash and cash equivalents 41 165 17 002 22 799
Total assets 699 921 793 241 691 641
EQUITY AND LIABILITIES
Capital and reserves (72 797) 48 435 (56 893)
Issued share capital and
share premium 71 892 71 892 71 892
Revaluation reserve 45 878 45 595 45 878
Accumulated loss (190 567) (69 052) (174 663)
Non-current liabilities 737 440 656 156 724 362
Loans from group companies 63 540 37 069
Loans from shareholders 417 395 374 833 408 016
Finance lease obligation 236 404 202
Borrowings 246 065 270 432 268 335
Deferred tax 10 203 10 487 10 740
Amount owing to joint venture
Current liabilities 35 279 88 650 24 172
Other financial liabilities 9 369
Current tax payable 105 42 179
Finance lease obligation 54 55 175
Deferred revenue 1 448
Trade and other payables 25 741 18 140 22 072
Advance deposits 1 565
Financial liabilities 65 582
Bank overdraft 11 1 818 1 746
Total equity and liabilities 699 921 793 241 691 641
Net asset value per share ("NAV")
(cents) (33,36) 22,20 (26,07)
Net tangible asset value per share
("NTAV") (cents) (34,41) 21,14 (27,13)
Number of shares in issue and used
for NAV and NTAV calculation 218 210 680 218 210 680 218 210 680
CONDENSED CONSOLIDATED
STATEMENT OF COMPREHENSIVE INCOME
Reviewed Unreviewed Reviewed Audited
6 months 6 months 12 months 18 months
ended ended ended ended
30 June 30 June 30 June 31 Dec
2012 2011 2011 2011
R'000 R'000 R'000 R'000
Continuing operations
Revenue 30 387 27 021 71 486 98 205
Operating profit/(loss) (15 762) (8 474) (100) (122 051)
Investment revenue 6 928 697 29 491 12 407
Loss from equity accounted
investments (9 066) (25 876) (18 919)
Finance costs (9 796) (32 217) (44 964) (33 289)
Profit/(loss) before taxation (18 630) (49 060) (41 449) (161 852)
Taxation 2 728 13 979 10 781 9 887
Profit/(loss) for the period from
continuing operations (15 902) (35 081) (30 668) (151 964)
Discontinued operation
Profit/(loss) from discontinued
operation 15 685
Profit/(loss) for the period (15 902) (35 081) (30 668) (136 279)
Other comprehensive income
Gains on property revaluation
Income tax relating to components
of other comprehensive income 283
Other comprehensive income for
the period, net of tax 283
Total comprehensive income for
the period (15 902) (35 081) (30 668) (135 996)
Profit/(loss) attributable to:
Equity holders of the parent (15 902) (35 081) (30 668) (135 996)
Total comprehensive income
attributable to:
Equity holders of the parent (15 902) (35 081) (30 668) (135 996)
Basic and diluted (loss)/earnings
per share ("EPS") (cents) (7,29) (16,08) (14,05) (62,32)
Notes to the income statement
Basic and diluted headline loss per
share ("HEPS") (note 1) (cents) (7,29) (16,08) (19,17) (64,61)
SEGMENTAL ANALYSIS
The IFA SA Group adopted IFRS 8: Operating Segments with effect from 1 July 2009.
IFRS 8 requires operating segments to be identified on the basis of internal reporting
about components of the group that are regularly reviewed by the chief operating decision
maker ("CODM") to allocate resources to the segments and to assess their performance.
The CODM has been identified as the executive directors. Management has determined
the operating segments based on the internal reports. The group has identified eight
reportable segments as follows:
IFA Hotels IFA Zimbali IFA Boschendal
IFA Estates IFA SA IFA Namibia
IFA Legends Zimbali Rentals
The executive directors evaluate the segment performance based on operating profit
or loss before tax and exceptional items. The following is an analysis of IFA SA Group's
revenue and operating results by reportable segment:
IFA Hotels IFA Zimbali IFA Boschendal IFA Estates IFA SA IFA Namibia IFA Legends Zimbali Rentals Eliminations Consolidated
Reviewed Audited Reviewed Audited Reviewed Audited Reviewed Audited Reviewed Audited Reviewed Audited Reviewed Audited Reviewed Audited Reviewed Audited Reviewed Audited
6 months 18 months 6 months 18 months 6 months 18 months 6 months 18 months 6 months 18 months 6 months 18 months 6 months 18 months 6 months 18 months 6 months 18 months 6 months 18 months
ended ended ended ended ended ended ended ended ended ended ended ended ended ended ended ended ended ended ended ended
30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec
2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Revenue from
external customers 6 413 27 873 19 878 54 772 2 681 10 204 6 681 369 1 483 (6 681) 29 341 94 332
Intersegment revenue 3 336 9 854 (2 290) (5 982) 1 046 3 872
EBITDA (977) 5 531 54 (3 079) (199) (1 763) (1 162) (2 511) (1 638) (5 002) 14 952 (330) (1 006) (136) (152) (14 401) (4 388) (7 431)
EBIT (1 200) 4 852 (1 269) (7 635) (6 294) (101 829) (1 126) (2 585) (12 310) (202 518) 14 419 (3 957) (27 767) (136) (190) 10 530 182 282 (15 762) (140 970)
Net profit/(loss) (925) (1 442) (2 424) (3 062) (6 820) (106 227) (2 559) (5 848) (9 773) (205 610) 15 685 (3 848) (26 381) (83) (95) 10 530 196 701 (15 902) (136 279)
Segment assets 195 742 196 840 127 684 125 341 79 428 76 788 37 612 33 477 526 165 537 630 245 440 248 067 1 989 3 403 (514 137) (529 906) 699 921 691 641
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS
Reviewed Unreviewed Audited
30 June 30 June 31 December
2012 2011 2011
R'000 R'000 R'000
Cash flows from operating activities 1 591 (37 640) (42 096)
Cash used in operations 5 812 (23 179) (18 837)
Interest income 5 712 4 434 10 090
Finance cost (9 796) (19 637) (33 290)
Tax (paid)/received (137) 742 (59)
Cash flows from investing activities 20 818 52 574 53 951
Expenditure to maintain
operating capacity
Purchase of property,
plant and equipment (66) (4 073) (7 439)
Sale of property, plant and equipment 75 67 439 67 439
Expenditure for expansion
Disposal of interest in joint venture 32 099
Net movement of loans
to subsidiaries
Net movement of loans to
fellow subsidiaries 26 471 (12 821) 17 073
Net movement of loans to associate (9 708) (37 126)
Net movement of loans to
joint venture 11 053
Net movement of financial assets 4 046 600 (8 471)
Purchase of additional
shares in associate (9 624) (9 624)
Cash flows from financing activities (2 308) (18 187) (9 240)
Movement of borrowings (12 463) (21 951) (24 252)
Movement of loan from joint venture 26 161 (30 112)
Net movement of shareholders' loan 10 242 (22 397) 46 659
Finance lease payments (87) (1 535)
Total cash movement for the period 20 101 (3 253) 2 615
Cash at the beginning of the period 21 053 18 437 18 438
Total cash at end of the period 41 154 15 184 21 053
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed consolidated financial statements as set out in this report have been prepared in
accordance with the framework concepts and the measurement and recognition requirements
of IFRS and the AC 500 standards as issued by the Accounting Practices Board and containing
the information required by IAS 34: Interim Financial Reporting, the Companies Act of South
Africa and the JSE Listings (Listings Requirements).
These condensed consolidated interim financial results for the six months ended 30 June 2012 ("the period"),
have been reviewed by the group's auditors, BDO South Africa Incorporated, and have been prepared on the
historical cost basis, except for the measurement of revaluations of land and buildings.
The unmodified review report is available for inspection at IFA Hotels & Resorts Limited's registered office.
The preperation of these interim results were done under the supervision of the Company's Financial Director,
C J Schutte CA (SA).
The board acknowledges its responsibility for the preparation of the interim condensed
consolidated financial statements in accordance with IAS 34, the Companies Act of South
Africa and the JSE Listings Requirements.
The accounting policies applied conform with IFRS and are consistent with those followed
in the preparation of the annual financial statements for the year ended 31 December 2011.
NOTES TO THE FINANCIAL RESULTS
Reviewed Unreviewed Audited
6 months 6 months 18 months
ended ended ended
30 June 30 June 31 December
2012 2011 2011
R'000 R'000 R'000
1. Basic and diluted earnings and headline earnings
per ordinary share
The earnings and weighted average number of
ordinary shares used in the calculation of basic
and diluted earnings and headline earnings per
ordinary share are as follows:
Headline and diluted headline loss per share
("HEPS") (cents) (7,29) (16,08) (64,61)
Reconciliation of total earnings to headline earnings
attributable to equity holders of the parent.
Earnings attributable to ordinary shareholders (15 902) (35 081) (135 996)
Less profit on disposal of joint venture
Add tax effect
Less IAS 16 (profit)/loss on disposal of property,
plant and equipment
Add tax effect
Add impairment of share of associate 6 176
Add impairment of goodwill
Add loss/(less profit) on disposal of JV or associate (15 513)
Add/(less) tax effect 4 344
Headline loss (15 902) (35 081) (140 989)
Number of shares
in issue 218 210 680 218 210 680 218 210 680
for EPS and HEPS calculation 218 210 680 218 210 680 218 210 680
2. Capital expenditure commitments
Contracted 3 214 3 214
Approved but not contracted
3 214 3 214
3. Operating lease commitments 329 134 377
4. Investments and loans
Investment in associate companies 1 308
Loans to associate companies 324 303 410 152 324 403
Other unlisted investments 2 416 10 114 2 400
326 719 421 574 326 803
Directors' valuation of unlisted investments
unlisted associate companies 324 303 411 460 324 403
other unlisted investments 2 416 10 114 2 400
326 719 421 574 326 803
5. Related party transactions
During the reporting period, companies in the group entered into various transactions.
These transactions were entered into in the ordinary course of business and under terms
that are no less favourable than those arranged with independent third parties. All
related party transactions and outstanding balances are eliminated in preparation of the
consolidated financial statements of the group. All transactions with joint ventures and the
associates are concluded on an arm's length basis.
6. Post balance sheet events
The directors are not aware of any significant matter or circumstance arising since the end
of the reporting period not otherwise dealt with in this report or the financial results which
materially affect the financial position of IFA SA Group or the results of its operations to the
date of this report.
CONDENSED CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY
Share Share Revaluation Accumulated
capital premium reserve profit/(loss) Total
Audited R'000 R'000 R'000 R'000 R'000
Balance at 1 July 2010 2 182 69 710 45 595 (38 384) 79 103
Total comprehensive
income for the period 283 (136 279) (135 996)
Balance at
31 December 2011 2 182 69 710 45 878 (174 663) (56 893)
Balance at
1 January 2012 2 182 69 710 45 878 (174 663) (56 893)
Total comprehensive
income for the period (15 902) (15 902)
Balance at 30 June 2012 2 182 69 710 45 878 (190 567) (72 797)
COMMENTS
IFA Hotels & Resorts KSCC ("IFA H&R Kuwait") holds the majority interest in IFA Hotels &
Resorts Limited with an 85% shareholding. The IFA SA Group comprises:
IFA Hotels & Resorts (South Africa) (Pty) Limited ("IFA Hotels")
IFA Hotels and Tongaat Hulett Developments' joint venture ("TIFAZ") developed the Zimbali
Coastal Resort and includes an estate agency which markets the joint venture's real estate and
that of other owners in Zimbali. The slower than expected economic recovery has resulted in a
more cautious approach to the development of the Zimbali Lakes and the Westbrook projects.
IFA Zimbali Lodge (Pty) Limited ("IFA Zimbali")
IFA Zimbali is the owner of the Fairmont Zimbali Lodge. The traditional hotel operation has
been extended to include a vacation club offering.
IFA Boschendal Investments (Pty) Limited ("IFA Boschendal")
IFA Boschendal held a 37,33% stake in the Boschendal Estate ("Boschendal"), a 2 240 hectare
property near Franschhoek in the Western Cape. Subsequent to the reporting period the
group has disposed of its interest in and loans to Boschendal for R80 million to Canombys
Limited as announced on 20 July 2012.
IFA Hotels and Resorts 8 (Pty) Limited ("IFA Estates")
IFA Estates has the sole mandate to sell the Fairmont Zimbali Hotel & Resorts development
("Fairmont Zimbali") and the Zimbali Vacation Club, both situated in the Zimbali Coastal
Resort.
IFA Hotels and Resorts Limited ("IFA SA")
IFA SA is the holding company of the IFA SA Group, is listed on the JSE and fulfils a "head
office" function.
IFA Legends Investments (Pty) Limited ("IFA Legends")
IFA Legends partnered with IFA H&R Kuwait and LGSR Investments (Pty) Limited in the Legend
Golf & Safari Resort and Entabeni Game Reserve ("Legends").
Zimbali Rentals (Pty) Limited ("Zimbali Rentals")
Zimbali Rentals offers a professional service to Zimbali owners renting their properties to
guests wishing to experience the unique beauty and qualities of Zimbali.
FINANCIAL REVIEW
IFA HOTELS Limited revenue from real estate sales in the Zimbali Coastal Resort has been
partially offset by improved commission income from estate agency operations.
IFA ZIMBALI Sale of Zimbali Vacation Club weeks have continued to compliment the hotel
operation's performance.
IFA ESTATES Limited demand for the traditional private residence club and hotel
condominium sales had resulted in lower commission earnings; this has, however, been
partially offset by commissions from the sale of Zimbali Vacation Club weeks.
IFA BOSCHENDAL Operational and debt service funding provided to Boschendal resulted
in a further, but moderate impairment provision. In light of the sale of our interests this will not
impact on future operations.
IFA SA Impairments to intercompany loans, which reverse on consolidation, resulted in the
loss reported for this entity.
IFA LEGENDS IFA Legend's 20% share in associate Legends has been accounted for in
terms of IAS 28 and therefore is not included in IFA SA's total after tax loss for the period.
Appropriate impairment provisions have been made against the loan to Legends.
ZIMBALI RENTALS The slower than expected economic recovery continues to impact on
leisure travel resulting in lower holiday rentals and therefore commissions earned.
PROSPECTS
Having made the required provisions to recognise the long-term nature of land bank
developments, successfully operated the Zimbali Vacation Club for a year and now disposed
of our interest in Boschendal, we remain confident that the Group is well placed to meet its
challenges.
DIVIDEND
No dividend has been declared for the period.
BOARD CHANGE
WP Witthuhn resigned on 31 January 2012.
APPRECIATION
The directors would like to thank management and staff for their ongoing hard work and
dedication during the period, as well as shareholders, customers and suppliers for their
continued invaluable support.
For and behalf of the board
TJM Al-Bahar WJ Burger
Chairman Chief Executive Officer
CORPORATE INFORMATION
Directors
TJM Al-Bahar (Chairman)*, EAA Al-Essa*, WJ Burger (Chief Executive Officer), WP Witthuhn
(resigned 31 January 2012), PGR de Sylva, GE Larson*, KM El-Marsafy*, VM Nkosi*, CJ Schutte
*Non-executive
28 September 2012
Zimbali, Durban, KwaZulu-Natal
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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