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Abridged Audited Group Results for the year ended 30 September 2012
CULLINAN HOLDINGS LIMITED
TOURISM AND LEISURE
REGISTRATION NUMBER 1902/001808/06
(Share code: CUL ISIN: ZAE000013710)
("Cullinan" or "the company" or "the group")
ABRIDGED AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2012
GROUP FINANCIAL HIGHLIGHTS
- Revenue up 16%
- Headline earnings up 61%
- Cash generated by operations R65 million
- Cash and cash equivalents R188 million
GROUP CONDENSED STATEMENT OF FINANCIAL POSITION
As at As at
30 September 30 September
2012 2011
R'000 R'000
ASSETS
Non-current assets 150 618 123 258
Property, plant and equipment 75 305 58 702
Goodwill 34 030 33 786
Intangible assets 22 112 18 043
Investment properties 7 900 5 700
Investment in associate companies 3 748 2 952
Investment in joint venture 4 346 2 764
Deferred tax asset 3 177 1 311
Current assets 329 370 314 963
Inventories 14 482 18 165
Accounts receivable 122 203 110 575
Other financial asset 2 217 4 395
Taxation 1 869 1 999
Cash and cash equivalents 188 599 179 829
Non-current assets held for sale 2 200
Total assets 479 988 440 421
EQUITY AND LIABILITIES
Ordinary shareholders' equity 189 431 161 139
Preference shareholders' equity 546 546
Non-controlling interest 102 19
Total shareholders' equity 190 079 161 704
Non-current liabilities 17 175 17 373
Deferred tax liability 5 601 5 200
Operating lease accrual 11 074 11 673
Preference shares 500 500
Current liabilities 272 734 261 344
Bank overdrafts 222 243
Operating lease accrual 4 31
Accounts payable 270 802 259 572
Taxation 537 67
Preference dividends 15 15
Provisions 1 154 1 416
Total equity and liabilities 479 988 440 421
GROUP CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
30 September 30 September
2012 2011
R'000 R'000
Revenue 454 848 393 747
Turnover 448 845 390 783
Cost of sales (99 225) (76 177)
Gross profit 349 620 314 606
Net operating expenses (307 833) (287 354)
Operating profit 41 787 27 252
Finance income 6 003 2 964
Finance expenses (13) (151)
Preference dividends paid (55) (55)
Share of (loss)/profit of associates 796 (214)
Share of profit of joint venture 1 582 781
Profit before taxation 50 100 30 577
Tax expense (14 425) (8 502)
Profit for the year 35 675 22 075
Other comprehensive income:
Exchange differences on translating foreign operations (116) (228)
Revaluation of land and buildings 606
Total comprehensive income for the year 35 559 22 453
Profit attributable to:
equity holders 35 592 22 057
non-controlling interest 83 18
Total comprehensive income attributable to:
equity holders 35 476 22 435
non-controlling interest 83 18
Earnings per share (cents) 4,95 3,07
Diluted earnings per share (cents) 4,95 3,07
GROUP CONDENSED STATEMENTS OF CHANGES IN EQUITY
Year ended Year ended
30 September 30 September
2012 2011
R'000 R'000
Ordinary share capital
Balance at beginning of year 7 184 7 184
Issued during year
Balance at end of year 7 184 7 184
Share premium
Balance at beginning of year 59 905 59 905
Premium on issue of shares
Balance at end of year 59 905 59 905
Share capital reduction reserve fund
Balance at beginning of year 20 876 20 876
Balance at end of year 20 876 20 876
Capital redemption reserve fund
Balance at beginning of year 4 4
Balance at end of year 4 4
Foreign currency translation reserve
Balance at beginning of year (1 811) (1 583)
Reserve on translation of foreign subsidiary (116) (228)
Balance at end of year (1 927) (1 811)
Revaluation reserve
Balance at beginning of year 870 264
Revaluation of land and buildings 606
Balance at end of year 870 870
Accumulated profit/(loss)
Balance at beginning of year 74 111 52 054
Attributable income for year 35 592 22 057
Ordinary dividend paid (7 184)
Balance at end of year 102 519 74 111
Ordinary shareholders' equity 189 431 161 139
Non-controlling interest
Balance at beginning of year 19 1
Profit attributable to non-controlling interest for year 83 18
Balance at end of year 102 19
Preference shareholders' equity
Balance at beginning of year 500 500
Balance at end of year 500 500
Total comprehensive income
Profit for year 35 675 22 075
Attributable to equity shareholders 35 592 22 057
Attributable to non-controlling interest 83 18
Translation of foreign subsidiary (116) (228)
Revaluation of land and buildings 606
35 559 22 453
GROUP CONDENSED STATEMENT OF CASH FLOWS
Year ended Year ended
30 September 30 September
2012 2011
R'000 R'000
Cash generated by operations 65 157 90 499
Net cash inflow/(outflow) from operating activities 55 396 85 490
Net cash outflow from investing activities (39 421) (4 173)
Net cash outflow from financing activities (7 184)
Net (decrease)/increase in cash and
cash equivalents 8 791 81 317
Cash and cash equivalents at beginning of year 179 586 98 269
Cash and cash equivalents at end of year 188 377 179 586
NOTES
1. Basis of preparation
The group condensed financial statement extracts have been prepared in accordance with the framework
and the recognition requirements of International Financial Reporting Standards ("IFRS"), and in terms of
IAS 34 Interim Financial Reporting, the AC 500 standards as issued by the Accounting Practice Board
and in compliance with the South African Companies Act (2008). The accounting policies and methods of
computation used in the preparation of the extracted results are consistent with those used in the annual
financial statements for the year ended 30 September 2012.
2. Notes to the statement of comprehensive income
Year ended Year ended
30 September 30 September
2012 2011
Ordinary shares ('000)
In issue 718 355 718 355
Weighted average 718 355 718 355
R'000 R'000
Determination of headline earnings:
Earnings attributable to ordinary shareholders 35 592 22 057
Adjustment to tax rate change
on investment properties (272)
(Profits)/Losses on disposal of property,
plant and equipment 313 105
Tax effect (88) (29)
Headline earnings 35 545 26 908
Headline earnings per share (cents) 4,95 3,08
Diluted headline earnings per share (cents) 4,95 3,08
Dividends per share (cents) 1,00
Net asset value per share (cents) 26,46 22,51
3. Business combination
The group acquired the business of Ikapa Tours and Travel Proprietary Limited (Ikapa), the business comprising
the fixed assets, trading name, client base and staff employed by Ikapa at 1 November 2011. Ikapa is an Inbound
Tour Operator and Coach Charter operator, based in Cape Town.
Cullinan paid R14,5 million for the business, funded out of cash reserves. The assets of the business were
valued at R14,0 million, with the balance of the purchase price being goodwill paid to acquire the trading name.
Fixed assets comprise coaches, vehicles, computer equipment and furniture and fittings.
The business was acquired as it combines well with the existing Cullinan structure which comprises similar
business and will add to buying power and operational synergy and cost saving.
The following information summarises the effect of the transaction: R'000
ASSETS
Property, plant and equipment 14 000
(motor vehicles, computer equipment and furniture and fittings)
Intangible assets (Trading name) 500
Purchase price paid 14 500
Information relating to the revenue and profit or loss of Ikapa prior to this acquisition has not been disclosed as
the directors are of the opinion that it is impracticable to provide this information.
In addition, this information would be of no value to the users of these financial statements as the business of
Ikapa Travel and Tours Proprietary Limited was materially restructured during the period from June 2011 through
to October 2011 and the business acquired is substantially different to that prior to 1 November 2011.
Since acquisition the revenue added to the group by Ikapa is R17,248 million and a decrease on the group operating
profit of R1,930 million.
4. Segmental reporting
Tour Tour Coaching Marine
Operators Operators and Retail and Head
Outbound Inbound Touring Travel Boating Office
R'000 R'000 R'000 R'000 R'000 R'000
30 September 2012
Revenue 82 650 96 262 123 008 110 348 42 145 435
Operating profit 6 283 26 570 11 025 17 838 (1 030) (18 899)
30 September 2011
Revenue 79 852 67 422 97 842 101 589 46 831 211
Operating profit 5 831 15 509 9 977 13 380 (408) (17 037)
Annual financial statements
These group condensed financial statement extracts should be read in conjunction with the audited annual
financial statements issued on 11 December 2012. The group financial statements were prepared by D Standage,
the Financial Director of the group.
Approval of annual financial statements
The annual financial statements were approved by the Board of directors on 28 November 2012.
Audit opinion
These abridged consolidated group financial statements have been extracted from the audited annual financial
statements upon which Mazars have issued an unqualified report. The group annual financial statements are
available for inspection at the company's registered office.
Annual general meeting
The annual general meeting of shareholders will be held in the boardroom, 2nd Floor, Travel House, 6 Hood
Avenue, Rosebank at 10:00 on Friday, 22 February 2013 to transact the business as stated in the annual general
meeting notice forming part of the integrated annual report.
Dividend notice
The Board is pleased to announce the declaration of 1 cent per ordinary share of the year ended 30 September
2012. Details can be reviewed in the dividend notice forming part of the integrated annual report.
OVERVIEW
Referring to our report last year, we indicated that Cullinan expected a successful trading year in 2012, so it gives
us pleasure to report that this was achieved. Headline earnings for the year ended 30 September 2012 were
61% ahead of the prior year and these results continue the positive annual profit trend for the group since 2009.
The group increased market share during the year, with a resultant growth in revenue of 16%, with all travel
divisions (Inbound and outbound tour operations, travel agency retail, and coaching and touring) contributing to
this growth. Margins were also maintained and costs were well managed throughout the year.
Cash generation was strong with approximately R65 million in cash generated by operations in the year. Much of
these funds were re-invested in upgrades to the coach fleet or utilised for the acquisition of the Ikapa Tours and
Charter business in November 2011.
The group also resumed its dividend policy in 2012 with the payment of its first dividend since 2008 of 1 cent
per share in July 2012. The directors have also approved a final dividend for the year of 1 cent per share with the
result that the group will have increased its dividend payout in the last 12 months by 100% when compared to
2008, the last year in which the group paid a dividend. This dividend will be paid in December 2012.
New developments
Aside from delivering a successful financial performance in 2012, the year under review also saw a number of
fundamental new and important developments which are expected to impact positively on future growth of the
business. These include:
The establishment of new coach depots in Johannesburg and Cape Town. Both depots are state of the art,
applying the highest standards of quality, environmental and conservation planning, and ultimately minimising
the impact on the environment. These new depots will provide the group with a significant opportunity to grow
the Coaching and Touring business.
The various travel brands that operate in Cape Town will also be moving into a new and improved reservations
office in Cape Town in 2013. These offices will improve the quality and efficiency of the operation.
The group is in the process of implementing a new Travel Reservations system throughout its tour operating
businesses. This system is expected to materially improve performance and efficiency. Roll-out of this system
begins in December 2012.
The SAA Division, Manex Diving, Thompsons Corporate Travel Division and Thompsons Meetings and Incentives
division all recently received BBBEE ratings of between Level 2 and Level 4 which will improve their access
to new markets.
The launch of a broad-based staff share incentive scheme.
The appointment of Cullinan by SAA to develop and operate the SAA Holidays programme out of South Africa.
The second phase of the roll-out of the SAA Holidays programme to the rest of Africa is planned for 2013.
Thompsons Africa has opened an office in Shanghai in 2012 and will commence operating a programme to
bring Chinese tourists to Southern Africa in 2013.
Thompsons Africa successfully opened its Meetings and Incentives division in 2011. This proved to be highly
successful with the successful management of the COP17 Conference (Conference on climate change) in
Durban in December 2011. The division is seeking further opportunities for expansion in this area.
Ikapa Tours and Travel, which was acquired in the prior year, commenced trading on 1 November 2011. Ikapa
encompasses both an Inbound Tours division and a Coach Charter division. In addition, effective 1 October
2012, Cullinan acquired 90% in Glacier Enterprises Proprietary Limited. Glacier acts as an import facilitator
and agent and represents the intent to broaden the business profile of Cullinan, better utilise its excess cash
reserves, and diversify its overall risk portfolio.
PROSPECTS FOR 2013
The prospects for the group for the 2013 year remain positive and we expect continued growth within the group.
Whilst there are concerns around external factors such as the economy, inflationary pressure and exchange rates,
the fundamentals of the business are strong. The group owns many leading travel brands, has proven leadership
within each business unit, an ability to increase market share and a robust financial position, while a number
of fundamental steps have also been taken in 2012 to support the group's growth strategy for the year ahead.
Based upon the above, the group will continue to actively look for acquisitions and growth opportunities and also
continue to focus on providing consistent and outstanding service levels in each business unit.
On behalf of the Board
M Tollman D Standage
Executive Chairman Financial Director
11 December 2012
Directors:
M Tollman, MA Ness*, DD Hosking*, LA Pampallis, G Tollman*, DK Standage, M Madlala
R Arendse, S Nhlumayo, A Azoulay
*Non-resident Non-executive
Company secretary:
B Allison
Registered office:
6 Hood Avenue, Rosebank, 2196
Auditors:
Mazars were re-elected as auditors in 2012.
Sponsor:
Arcay Moela Sponsors Proprietary Limited
(Registration number 2006/033725/07)
Transfer secretaries:
Computershare Investor Services Proprietary Limited
Ground Floor, 70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
For further information on group activities, please write to:
The Company Secretary, Cullinan Holdings Limited
PO Box 41032, Craighall, 2024
Registration number 1902/001808/06
(Share code: CUL ISIN: ZAE000013710)
("Cullinan" or "the company" or "the group")
Date: 12/12/2012 07:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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