Wrap Text
Unaudited interim condensed group financial results for the six months ended 31 August 2012
Wilderness Holdings Limited
Unaudited interim condensed group financial results for the six
months ended 31 August 2012
Wilderness Holdings Limited: (Wilderness or the Company or
the Group)
Share code: WIL ISIN: BW0000000868
Registration number: 2004/2986
Registered office: Plot 1 Mathiba Road Maun Botswana
External company registration number: 2009/022894/10
Registered office: 373 Rivonia Boulevard Rivonia South Africa
BSE: Primary Listing
BSE Sponsor: Capital Securities (a member of the Botswana
Stock Exchange)
JSE: Secondary Listing
JSE Sponsor: Rand Merchant Bank (a division of FirstRand
Bank Limited)
Transfer secretaries: Corpserve Botswana Computershare
Highlights
- Turnover increased by nearly 17% to BWP672 million
- EBITDA increased to BWP71 million, 16% up on the
corresponding period
- Profits after tax increased by 134% to BWP28 million
- Headline earnings per share up 27%
Condensed Group statements of comprehensive income
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 August 31 August 29 February
BWP000 2012 Change 2011 2012
Revenue 672 323 17% 576 329 1 066 243
Cost of sales (382 931) (318 959) (604 373)
Gross profit 289 392 257 370 461 870
Other gains 4 132 4 905 4 382
Operating expenses (214 654) 6% (202 372) (393 965)
Foreign exchange
(losses)/gains (7 571) 1 513 5 494
Operating profit for year
before items listed below
EBITDA) 71 299 16% 61 416 77 781
Impairment loss (136) (11 449) (4 371)
Depreciation and
amortisation (23 981) (23 600) (45 718)
Operating profit 47 182 79% 26 367 29 739
Net finance costs (3 990) (2 624) (5 021)
Unrealised foreign
exchange loss on
loans (3 324) (3 343) (8 207)
Share of associate
company profit/(loss) 712 1 015 (492)
Profit before
taxation 40 580 89% 21 415 16 019
Taxation (12 300) (9 349) (7 824)
Profit for the period 28 280 134% 12 066 8 195
Other comprehensive
(loss)/income (2 209) 3 192 4 647
Exchange differences on
translating foreign
operations:
Equity holders of the
Company 6 244 4 477 15 203
Non-controlling
interest (847) (346) 333
Net investment in
foreign operation (7 606) (939) (10 889)
Total comprehensive
income for the period 26 071 15 258 12 842
Profit/(loss)
attributable to:
Owners of the Company 24 545 14 432 11 344
Non-controlling
interest 3 735 (2 366) (3 149)
28 280 12 066 8 195
Total comprehensive
income/(loss) attributable
to:
Owners of the Company 23 183 17 970 15 657
Non-controlling
interest 2 888 (2 712) (2 815)
26 071 15 258 12 842
Number of shares issued
thousands)
Issued and weighted
average 231 000 231 000 231 000
Diluted weighted
average 231 000 231 000 231 000
Earnings per share
(thebe)
Headline and diluted
headline 8.98 27% 7.05 3.76
Basic and diluted 10.63 6.25 4.91
Condensed Group statements of financial position
Unaudited Unaudited Audited
as at as at as at
31 August 31 August 29 February
BWP000 2012 2011 2012
ASSETS
Non-current assets 468 338 432 650 440 997
Property, plant and
equipment 392 869 368 081 382 334
Goodwill 31 396 30 877 30 917
Intangible assets 3 190 1 405 2 539
Investment and loans in
associates 15 275 11 909 10 373
Loans receivable 2 009 558 2 053
Deferred taxation 23 599 19 820 22 884
Current assets 414 723 376 963 287 451
Inventories 20 134 19 009 20 615
Receivables and
prepayments 100 909 88 686 65 871
Current tax receivable 8 721 12 021 13 087
Bank balances and cash 284 959 257 247 187 878
Total assets 883 061 809 613 738 551
EQUITY AND LIABILITIES
Equity attributable to
owners of the Company 339 105 335 321 334 845
Stated capital 153 703 153 703 153 703
Foreign currency
translation reserve 16 187 16 774 17 549
Common control reserve (73 324) (73 324) (73 324)
Other non-distributable
reserves 13 501 10 239 12 414
Share-based payment
reserve 2 665 1 622
Retained income 226 373 227 929 222 881
Non-controlling interest (645) (7 652) (3 633)
Total equity 338 460 327 669 331 212
Non-current liabilities 160 650 133 707 145 709
Borrowings 132 218 104 631 113 990
Deferred taxation 28 432 29 076 31 719
Current liabilities 383 951 348 237 261 630
Trade and other payables 329 463 314 589 229 254
Current tax liabilities 2 404 4 640 2 002
Bank overdrafts 52 084 29 007 30 374
Total liabilities 544 601 481 944 407 339
Total equity and
liabilities 883 061 809 613 738 551
Net asset value per
share (thebe) 147 145 145
Net tangible asset
value per share (thebe) 132 132 130
Condensed group statements of cash flow
Unaudited Unaudited Audited
Six months Six months Six months
ended ended ended
31 August 31 August 29 February
BWP000 2012 2011 2012
Net cash generated from
operating activities 112 489 112 465 67 374
Net cash used in investing
activities (34 825) (10 204) (47 469)
Net cash used in financing
activities (12 460) (28 899) (28 016)
Net increase/(decrease)
in cash and cash equivalents 65 204 73 362 (8 111)
Unrealised exchange gains
on foreign cash balances 10 167 2 285 13 022
Cash and cash equivalents
at the beginning of the
period 157 504 152 593 152 593
Cash and cash equivalents
at the end of the period 232 875 228 240 157 504
Condensed group statements of changes in equity
Unaudited Unaudited Audited
Six months Six months Six months
ended ended ended
31 August 31 August 29 February
BWP000 2012 2011 2012
Opening balance 331 212 332 949 332 949
Minority portion of
dividend paid (670) (1 169)
Dividends paid (19 866) (19 868) (19 868)
Total comprehensive
income for the period 26 071 15 258 12 842
Disposal of subsidiary 4 621
Share-based payment
reserve 1 043 1 622
Other 215
Closing balance 338 460 327 669 331 212
Comprising:
Stated capital 153 703 153 703 153 703
Foreign currency
translation reserve 16 187 16 774 17 549
Common control reserve (73 324) (73 324) (73 324)
Other non-distributable
reserves 13 501 10 239 12 414
Share-based payment
reserve 2 665 1 622
Retained income 226 373 227 929 222 881
Total shareholders
equity 339 105 335 321 334 845
Non-controlling interest (645) (7 652) (3 633)
Total equity 338 460 327 669 331 212
Segmental information
During the current period the entity rolled out new management
information systems which have resulted in different information
being available to management with which to monitor financial
performance. Previously certain information relating to segment
assets and liabilities was netted off, this information is now
available on a disaggregated basis. Both the current and comparative
periods segment information are presented in the new format. The
operating segments of the business have remained unaffected by these
changes.
Safari Consulting
Unaudited Unaudited Audited
Six months Six months Six months
ended ended ended
31 August 31 August 29 February
BWP000 2012 2011 2012
Revenue 627 692 546 688 1 009 452
Reportable segment
income/(loss) before tax 19 903 10 828 2 746
Total assets 351 675 302 276 196 657
Camp, lodge and safari explorations
Unaudited Unaudited Audited
Six months Six months Six months
ended ended ended
31 August 31 August 29 February
BWP000 2012 2011 2012
Revenue 196 762 168 627 315 680
Reportable segment
income/(loss) before tax 35 130 (6 358) (4 457)
Total assets 1 363 636 1 169 310 1 234 609
Transfer and touring
Unaudited Unaudited Audited
Six months Six months Six months
ended ended ended
31 August 31 August 29 February
BWP000 2012 2011 2012
Revenue 120 453 110 206 205 410
Reportable segment
income/(loss) before tax 837 4 160 (20 236)
Total assets 209 686 186 191 176 481
Finance and asset management
Unaudited Unaudited Audited
Six months Six months Six months
ended ended ended
31 August 31 August 29 February
BWP000 2012 2011 2012
Revenue 44 244 34 734 72 532
Reportable segment
income/(loss) before tax (9 066) 11 244 9 615
Total assets 875 115 901 143 950 337
Intergroup eliminations
Unaudited Unaudited Audited
Six months Six months Six months
ended ended ended
31 August 31 August 29 February
BWP000 2012 2011 2012
Revenue (316 827) (283 926) (536 831)
Reportable segment
income/(loss) before tax (14 542) (1 639) 17 954
Total assets (1 910 666) (1 749 308) (1 819 533)
Total reportable segments
Unaudited Unaudited Audited
Six months Six months Six months
ended ended ended
31 August 31 August 29 February
BWP000 2012 2011 2012
Revenue 672 323 576 329 1 066 243
Reportable segment
income/(loss) before tax 32 262 18 235 5 622
Total assets 889 446 809 613 738 551
Reconciliation of
reportable segment profit
to profit before taxation:
Total profit for
reportable segments 32 262 18 235 5 622
Reversal of impairments
not allocated to a segment 1 226
Foreign exchange differences
transferred to equity 7 606 939 10 889
Associates income/(loss) 712 1 015 (492)
Profit before taxation 40 580 21 415 16 019
COMMENTARY
The directors of Wilderness Holdings Limited are pleased
to present the unaudited interim financial results for the
six months ended 31 August 2012.
Our business
Wilderness Holdings owns and manages a network of 63 luxury safari
camps, with a total of 1 052 beds, in eight southern African
countries. During this half year we opened the rebuilt Duma Tau camp
in Botswana and we also built and assumed management responsibilities
for two new camps in the Odzala-Kokoua National
Park in the Republic of Congo, under the Wilderness Collection brand.
We also took the difficult, but necessary, decision to
close two of our camps, both in Namibia: Skeleton Coast and
Kulala Wilderness.
Our camps are serviced by a fleet of 42 aircraft operated under the
Wilderness Air brand. Our main trading brand is Wilderness Safaris
which has been in existence for close to 30 years and is one of the
leading brands in our sector of the travel industry. Wilderness is
also proud to employ approximately 2 800 people across the regions
where we operate.
Trading environment
On-going uncertainty in the world economy continues to limit our
capacity to grow the business. Whilst we have witnessed a slow
recovery in demand from the United States, this has partly been
offset by softer demand from Europe because of conditions in that
economy. Local currencies have been weaker against our main trading
currencies (being the United States dollar and the Euro) and this has
worked in our favour. Inflation continues to exert upward pressure on
costs at national rates varying from 5.8% to 6.6% per annum.
Performance
Total bednight sales for the period were 102 313, just under 2% below
that achieved in the comparable prior period. If we adjust for camps
that have been discontinued in the interim, or closed for
refurbishment, this outturn is a 1% increase on prior period
performance. Price increases for the 2012 calendar year ranging
between 4% and 10% have been successfully absorbed by the market.
The benefits from these price adjustments have to some extent been
offset by changes in sales mix towards our lower yielding products,
and by discounting to maintain bed occupancies. The net result of
these factors combined is that source currency turnover has
increased in all instances except the South African rand. In our most
important trading currencythe US dollarturnover increased by 8%
over the comparative period.
The South African rand weakened against the US dollar by
approximately 18% compared to the comparable period last year but
the positive impact of this depreciation was partially offset by
a 3% unfavourable movement in the Pula:Rand cross-rate. The net
result of all the above factors is that turnover has increased by
nearly 17% to BWP672 million, despite the challenging market.
The changes in sales mix mentioned above have resulted in
a decline in the Groups gross margin percentage from 44.6% to
43.0%.
If we adjust for the increased turnover associated with products
that we manage or market on behalf of non-Group owners, the gross
margin percentage is 0.1% below that previously reported.
Operating expenses have been well contained, increasing by 6% over
the prior period, which is in line with inflation.
Foreign exchange losses amounted to BWP7.6 million, compared with a
gain of BWP1.5 million in the prior period. The current year losses
include mark to market unrealised losses on forward foreign exchange
contracts amounting to nearly BWP11 million.
The net result of the above factors is that EBITDA for the half year
was BWP71 million, which is an increase of 16% over what was achieved
in the corresponding period.
Impairment losses of BWP11.5 million were reported in the prior
period. Because we have restructured the various businesses there was
limited need for further impairments in the current period and so the
charge to income amounted to just BWP136 thousand. Net
finance costs have increased from BWP2.6 million to BWP4.0 million,
largely the result of the weaker local currencies (65% of the
Groups long and short term debt is US dollar denominated).
Profits before tax were BWP41 million, compared with BWP21 million in
the prior period. The Groups effective tax rate was 44% in the prior
period due to non-recognition of deferred tax assets. In the current
period all relevant deferred tax assets were recognised
due to restructuring of the businesses concerned, resulting in an
effective tax rate of 30%. This remains higher than local tax
rates (the corporate tax rate applicable to Wilderness in Botswana is
22%) due to the higher tax regimes in the different jurisdictions in
which we operate. Consequently, profits after tax have increased by
134% from BWP12 million to BWP28 million.
A dividend amounting to BWP20 million was paid and levels of
capital expenditure are being maintained to enhance product quality.
BWP35 million has been invested in the current year (BWP26 million
was invested in the comparable period and BWP65 million for the prior
year). Net cash balances at the half year
amounted to BWP233 million, up from BWP158 million at the year end.
However, it should be noted that the year end is the low point in
the business cash cycle and that the comparable sum for the prior
half year was BWP228 million. At the half year, our cash reserves are
significantly bolstered by payments received in advance from guests
with a corresponding liability being raised until the
guests travel.
Dividend
As was stated in the prospectus issued prior to the Group listing,
due to the annual cash flow cycle of the business, an interim
dividend has not been declared. It is anticipated that, in the event
that a dividend is declared, this will be in the form of a final
dividend declared in May each year, subject to the operating results,
financial position, investment strategy, capital requirements and
other factors.
Capital commitments
The Group is committed to fully maintain all of its assets in order
to enhance product quality and protect its earnings base. For the
current financial year, the Board authorised expenditure
of BWP45 million in sustaining capital and a further BWP57 million
for new developments. We have, however, subsequently reduced the
proposed capital expenditure on new developments by BWP36 million.
This is the result of deferring proposed developments in Zimbabwe and
Namibia. Of the adjusted total capital expenditure of BWP66 million
authorised for the year, a total of BWP35 million has been incurred
in the first half.
Directorate
At the Companys Annual General Meeting held on 28 August 2012,
Mr John Gnodde did not offer himself for re-election due to other
commitments. We express our appreciation to him for his wise counsel
during the seven years that he served on various boards within the
Group.
Outlook for the remainder of the year
The Group has completed implementing most of the measures adopted to
re-organise the business for lower levels of demand now being
experienced as the result of the weak global economy. Most
importantly, we have:
- Down-sized our Namibian and Zambian businesses;
- Merged the Zambian and Zimbabwean businesses to create efficiencies
and economies of scale in the combined business;
- Reorganised the business model of our flying operations.
The results of these changes are starting to be felt. In addition, we
continue to make major investments in staff training and development,
in order to maintain and improve product quality. We therefore feel
that the business is well placed to capitalise on any improvements in
the business climate, as they occur.
The Group enters its quietest period in the first three months of the
coming calendar year. This is the so-called green season in which
demand is soft due to an incorrect market perception that guest
experiences are reduced in this period as the result of lush
vegetation growth. We have launched a number of initiatives to
increase demand during this period but have also scheduled a
number of temporary camp closures in order to reduce overheads until
demand increases again in April next year.
If the present weakness of the local currencies is maintained through
to the year end, this will have a positive impact on the Groups
earnings.
For and on behalf of the Board
Andrew Payne
Chief executive officer
Derek de la Harpe
Chief financial officer
30 October 2012
Notes to the condensed Group financial statements
for the period ended 31 August 2012
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. The
accounting policies are consistent with those applied in the
financial statements for the year ended 29 February 2012.
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.
Revenue
Traditionally the Group earns between 55% and 65% of its revenue in
the first six months of the financial year. The seasonality is
attributed in part to the holiday season in the American and European
markets together with the attraction of the annual water floods in
the Okavango Delta in Botswana.
Contingent liabilities
Included in the historical results is an amount of BWP29.2 million,
being the capital profit arising on the Duba Plains transaction.
As announced on 16 August 2010, the underlying transaction has been
concluded and full payment has been received by the Group. However,
this transaction remains subject to certain conditions precedent
which have not yet been fulfilled. As at the date of this report,
based on legal advice, the directors are confident that the remaining
resolutive condition will be fulfilled. Accordingly, the capital
profit has been brought to account and the amount is recorded as a
contingent liability until such time
as all necessary regulatory approvals have been formally obtained.
Unusual items
Other gains include profit from disposal of business of BWP3.5
million (2011: nil) and gains on disposal of property, plant and
equipment and insurance proceeds amounting to BWP0.6 million (2011:
BWP4.3 million).
The unrealised foreign exchange loss on loans of BWP3.3 million
(2011: gain BWP3.3 million) has been recognised as a result of the
restatement of the Groups USD-denominated loans amounting to USD16.6
million at 31 August 2012 (2011: USD17.1 million). Translation of
these loans into Pula for financial reporting purposes results in an
unrealised foreign gain or loss, depending on the USD to Pula
exchange rate on the date of reporting. The loans are serviced and
repaid in USD from USD revenue received by the Group from foreign
customers. There is thus a natural currency hedge on the loans.
The movements in working capital reflect the seasonal increase and
the impact of the weaker local currency on foreign currency
denominated balances. Borrowings have increased to BWP132 million
(2011: BWP105 million) with foreign exchange contributing BWP9
million of that increase and the difference being net advances.
Unaudited Unaudited Audited
Six months Six months Six months
ended ended ended
31 August 31 August 29 February
BWP000 2012 2011 2012
Reconciliation between
profit attributable to
owners of the Company
and headline earnings
Profit attributable to
owners of the Company 24 545 14 432 11 344
Adjustments
Surplus on disposal of
operations, investments
and associates (3 494) (2 047)
Profit on disposal of
property, plant and
equipment (567) (4 309) (4 058)
Net impairment losses 136 11 449
Other 187
Tax effects of adjustments 134 (3 244)
Minority interest (2 042)
Headline earnings 20 754 16 286 8 688
Commitments
Capital
Authorised by directors
and contracted for
Not yet contracted for but
authorised by directors 30 807 30 908 101 989
30 807 30 908 101 989
It is intended to finance
capital expenditure from
working capital generated
and existing borrowing
facilities.
Operating leases
Minimum lease payments due
within one year 15 174 15 337 13 394
in second to fifth year
inclusive 54 502 54 413 49 246
after fifth year 42 627 83 483 64 357
112 303 153 232 126 997
Borrowings
Non-current
Interest bearing 143 545 123 180 127 863
Non-interest bearing 8 171 4 434 7 683
Less: Current portion of
long-term liabilities (19 498) (22 983) (21 556)
132 218 104 631 113 990
Directors: M McCulloch (Chairman), A Payne (CEO), D de la Harpe
(CFO), R Friedman, R Hartmann, J Hunt, R Marnitz, R Polet, P Tafa,
G Tollman, M Tollman, M ter Haar, D van Smeerdijk, K Vincent,
J Zeitz
Company secretary: Desert Secretarial Services (Pty) Limited
and Julia Swanepoel
Visit our world www.wilderness-group.com
Date: 29/10/2012 04:21:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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