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WILDERNESS HOLDINGS LIMITED - Audited abridged Group financial results for the year ended 28 February 2013 and a cash dividend declaration

Release Date: 27/05/2013 09:15
Code(s): WIL     PDF:  
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Audited abridged Group financial results for the year ended 28 February 2013 and a cash dividend declaration

Wilderness Holdings Limited
Wilderness or the Company or the Group)
Share code: WIL  ISIN: BW0000000868
Registration number: 2004/2986
Tax reference number: C075372-01-01-7
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
JSE: Secondary Listing
JSE Sponsor: Rand Merchant Bank 
(a division of FirstRand Bank Limited)
Transfer secretaries: Corpserve Botswana  Computershare
Directors: P Tafa (Chairman), M Tollman (Deputy Chairman), 
D de la Harpe (CFO), C de Fleurieu, R Hartman, J Hunt, 
R Marnitz, M McCulloch, G Tollman, M ter Haar, 
K Vincent (Acting CEO), J Zeitz 
Company secretary: Desert Secretarial Services Pty Ltd
www.wilderness-the4cs.com www.wilderness-safaris.com 
www.wilderness-group.com

Audited abridged Group financial results
for the year ended 28 February 2013 
and a cash dividend declaration

Highlights
Turnover increased by 13% to BWP1 205 million
EBITDA increased to BWP109 million, up 40% on the prior year
HEPS has increased by 196%
Balance sheet continues to be strong with net cash balance 
amounting to BWP140 million
Cash dividend of 4 thebe per share declared

Abridged group statement of comprehensive income
                                  Audited                Audited
                               Year ended             Year ended
P000                         28 Feb 2013   Change   29 Feb 2012
Revenue                         1 205 074      13%     1 066 243
Cost of sales                    (690 529)              (604 373) 
Gross profit                      514 545                461 870
Other gains                        22 889                  4 382
Operating expenses               (419 605)      7%      (393 965) 
Foreign exchange
(loss)/gain                        (8 928)                 5 494
Operating profit for year 
before items listed below
(EBITDA)                          108 901      40%        77 781
Impairment loss on property,
plant and equipment and loans     (14 000)                (4 371)
Depreciation and
amortisation                      (46 982)               (45 718)
Profit on sale of
business                                                  2 047
Operating profit                   47 919      61%        29 739
Net finance costs                  (8 205)                (5 021) 
Unrealised foreign
exchange loss on loans             (7 260)                (8 207)
Share of associate
company profit/(loss)                  66                   (492) 
Profit before taxation             32 520     103%        16 019
Taxation                           (4 816)                (7 824) 
Profit for the year                27 704     238%         8 195
Other comprehensive
(loss)/income:
Exchange differences on 
translating foreign
operations:                        (3 156)                  4 647
Equity holders of the
Company                             9 470                  15 203
Non-controlling interest           (1 013)                    333
Net investment in foreign
operations                        (11 613)                (10 889)
Total comprehensive
income for period                  24 548                  12 842
Profit/(loss)
attributable to:
Owners of the Company              29 561                  11 344
Non-controlling interest           (1 857)                 (3 149)
                                   27 704                   8 195
Total comprehensive income/
(loss) attributable to:
Owners of the Company              27 418                  15 657
Non-controlling interest           (2 870)                 (2 815)
                                   24 548                  12 842
Number of shares issued
(thousands)
Issued                            231 000                 231 000
Weighted average                  231 000                 231 000
Diluted weighted average          231 094                 231 000
Earnings per share
(thebe)
Headline                            11.13      196%          3.76
Diluted headline                    11.13      196%          3.76
Basic                               12.80      161%          4.91
Diluted                             12.79      160%          4.91

Abridged group statement of financial position
                                             Audited      Audited
                                          Year ended   Year ended
P000                                    28 Feb 2013  29 Feb 2012
Assets
Non-current assets                           474 047      451 100
Property, plant and equipment and
intangibles                                  391 235      384 873
Goodwill                                      34 855       30 917
Investment and loans in associates            11 390       10 373
Loans receivable                               1 768        2 053
Deferred taxation                             34 799       22 884
Current assets                               319 065      287 451
Inventories                                   17 889       20 615
Receivables and prepayments                   97 384       65 871
Current tax receivable                        14 467       13 087
Bank balances and cash                       189 325      187 878
Assets of disposal group classified
as held for sale                               1 386            
Total assets                                 794 498      738 551
Equity and liabilities
Equity attributable to owners of the
Company                                      344 728      334 845
Non-controlling interest                      (7 259)      (3 633) 
Total equity                                 337 469      331 212
Non-current liabilities                      130 249      145 709
Borrowings and obligations                   102 129      113 990
Deferred taxation                             28 120       31 719
Current liabilities                          326 780      261 630
Trade and other payables                     273 724      229 254
Current tax liabilities                        3 368        2 002
Bank overdrafts                               49 688       30 374
Total liabilities                            457 029      407 339
Total equity and liabilities                 794 498      738 551
Net asset value per share (thebe)                149          145
Net tangible asset value per share
(thebe)                                          134          130

Abridged group statement of cash flows
                                             Audited      Audited
                                          Year ended   Year ended
P000                                    28 Feb 2013  29 Feb 2012
Net cash inflow from operating
activities                                    77 518       67 374
Net cash outflow from investing
activities                                   (66 253)     (47 469)
Net cash outflow from financing
activities                                   (44 960)     (28 016)
Decrease in cash and cash equivalents        (33 695)      (8 111)
Unrealised exchange gains on foreign
cash balances                                 15 828       13 022
Cash and cash equivalents at
beginning of year                            157 504      152 593
Cash and cash equivalents at end of
year                                         139 637      157 504



Abridged statement of changes in total equity
                                             Audited      Audited
                                          Year ended   Year ended
P000                                    28 Feb 2013  29 Feb 2012
Balance at beginning of year                 331 212      332 949
Total comprehensive income for the
year                                          24 548       12 842
Minority portion of dividend paid               (342)      (1 169) 
Dividends paid                               (19 865)     (19 868) 
Other                                                        215
Share based payments                           3 029        1 622 
(Acquisition)/disposal of subsidiary          (1 113)       4 621
Balance at end of year                       337 469      331 212


Determination of headline earnings
Reconciliation between profit attributable 
to owners of the Company and headline 
earnings
                                             Audited      Audited
                                          Year ended   Year ended
P000                                    28 Feb 2013  29 Feb 2012
Profit attributable to owners of the
Company                                       29 561       11 344
Adjustments
Surplus on disposal of operations,
investments and associates                                (2 047)
Profit on disposal of property, plant
and  equipment                               (18 506)      (4 058)
Impairment or reversal of impairments         13 855        2 899
Other                                                        187
Tax effects of adjustments                       347          363
Minority interest                                459            
Headline earnings                             25 716        8 688

Segmental analysis
                                             Audited      Audited
                                          Year ended   Year ended
P000                                    28 Feb 2013  29 Feb 2012
Revenue
Safari consulting                          1 138 763    1 008 505
Camp, lodge and safari explorations          348 753      320 760
Transfer and touring                         220 111      212 567
Finance and asset management                  70 606       63 641
Intergroup                                  (573 159)    (539 230)
                                           1 205 074    1 066 243
Reportable segment profit/(loss)
before tax
Safari consulting                             14 936        1 090
Camp, lodge and safari explorations            5 344      (12 807) 
Transfer and touring                         (11 146)      (4 622) 
Finance and asset management                  (1 340)      24 897
                                               7 794        8 558
Net items unallocated to a segment            24 726        7 461
Profit before taxation                        32 520       16 019
Total assets
Safari consulting                            301 618      248 797
Camp, lodge and safari explorations          202 618      203 398
Transfer and touring                          48 465       67 269
Finance and asset management                 611 322      582 497
Intergroup                                  (369 525)    (363 410)
                                             794 498      738 551

Commentary
The directors of Wilderness Holdings Limited are pleased to report
the results of the Groups operations for the year ended 
28 February 2013. 

Our business
The Wilderness Holdings Group has been in existence for 30 years. We 
own and operate 59 luxury safari camps, with a total of 1 028 beds, 
in eight southern African countries:
                          Camps                     Beds
                           Managed                 Managed 
                               and                     and   
                    Owned marketed  Total   Owned marketed   Total
Country
Botswana               19       4     23     296        36     332
Namibia                 8       4     12     160        92     252
Zimbabwe                6       0      6      90         0      90
Zambia                  6       1      7      88        20     108
South Africa            3       0      3      82         0      82
Seychelles              0       1      1       0        22      22
Republic of Congo       0       2      2       0        24      24
Malawi                  5       0      5     118         0     118
Total                  47      12     59     834       194   1 028

These camps are mainly operated under our trading brand Wilderness 
Safaris, one of the leading brands in our sector of the travel 
industry. During this year, we won numerous regional and 
international accolades for excellence of which the most significant 
was the award for leadership in global vision by
Travel and Leisure magazine.

During this year we opened the rebuilt Duma Tau camp in Botswana and 
built and assumed management responsibility 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 three of our Namibian camps due to continued soft 
demand for products in that country.
Our camps are serviced by a fleet of 42 aircraft operated under the 
Wilderness Air brand. Between the various operations, the Wilderness 
Group is proud to employ nearly 2 600 people.

Trading environment
The Group has seen a recovery in demand from its primary source 
market, the United States, partially offset by continued soft demand 
from Europe. 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 with local country inflation rates that range 
between 5.5% and 7.5%.

Performance
Total bednight sales declined 3.7% to 182 764, this decline being 
caused by the permanent closure of non-performing camps and the 
temporary closures of others for maintenance. If we normalise for 
these closures, we achieved a 1% increase in bednight sales. For the 
2012 calendar year we increased our rates on average by between 4% 
and 10%. It is gratifying to note that our US dollar turnover 
increased by 6.4% and that source currency turnover has increased in 
all other currencies except the Namibian dollar.
The positive impact of the Rand weakening by an average of 13% 
against the US dollar over the year was partially offset by a 2% 
unfavourable movement in the Rand:Pula cross rate. The net result is 
that turnover has increased by 13% to BWP1 205 million.
Changes in sales mix to lower yielding products, and significant 
increases in the price of fuel, offset by a VAT refund received in 
Namibia, saw our gross profit percentage decrease slightly to
42.7%.
Other gains amounting to BWP22.9 million (BWP4.4 million) were 
realised. These include BWP13 million proceeds from an insurance 
claim on the Pafuri camp flood damage together with PWP5.2 million 
arising from the fair valuation upon exercising of an option to 
acquire shares in an associate company.
Despite above inflationary cost pressure in many areas, overall 
operating expenses have been contained at 7% for the year, in line 
with inflation. Foreign exchange losses amounted to BWP8.9 million, 
compared to a profit of BWP5.5 million in the prior year. Of the 
losses recorded in the current year, BWP10.4 million arose from
the realisation of forward foreign exchange contracts in existence
at the beginning of the year.
The net effect of the above factors is that EBITDA was 
BWP108.9 million, up 40% from BWP77.8 million in the prior year. 
Impairment losses amounted to BWP14.0 million, mostly arising from 
the damage to the assets of Pafuri camp in South Africa. Operating 
profits increased by 61% to BWP47.9 million.
Net finance costs increased from BWP5.0 million in 2012 to 
BWP8.2 million as the result of increased borrowings as well as 
the effects of devaluation of the Rand and the Pula on finance charges
incurred on US dollar loans. Unrealised losses on these foreign 
currency loans decreased by 12% to BWP7.3 million.
Profits before tax were BWP32.5 million, more than double what was 
achieved in 2012. The Groups effective tax rate declined from 49% in 
the prior year to 15% in the current year. (The effective tax rate in 
the prior year was higher than would be expected owing to the 
non-recognition of deferred tax assets in that year.)
The Groups after tax profits amounted to BWP27.7 million, 
representing a 238% increase over the comparable result last year. A 
feature of the Groups business model is that our net working capital 
investments are generally low as guests pay significant deposits, if 
not the full cost of the itinerary, well in advance of travelling. 
The movement in net working capital for the year was BWP12 million.
One of the focus areas for the past three years has been to invest in 
our camps to ensure that they are refreshed to enhance the
guest experience and enable the group to maintain its luxury rating. 
Our total capital expenditure in the current year was BWP65 million 
(2012: BWP65 million) of which BWP54 million (2012: BWP31 million) 
was defensive capital to maintain and upgrade our existing camps.
Given the investment cycle that the Group has undergone, and which 
remains a feature of this business, the Group strives to ensure that 
it has an efficient capital structure without introducing too high a 
level of financial risk.
The Group has loans from third parties of BWP127 million and these
have been used to construct and refurbish or upgrade camps and 
associated infrastructure. The Group is in compliance with all of its 
lenders covenants and, as at 28 February 2013, has unutilised 
facilities that could be drawn of BWP27 million.

Dividend
Notice is hereby given that a final dividend for the year ended 
28 February 2013 of 4.0 thebe per share was declared on 22 May 2013 
(3.7 thebe per share net of Botswana withholding tax). Withholding 
tax of 7.5% is applicable to all shareholders who are not exempt
and registered on the Botswana share register. The dividend has been 
declared from income reserves. The dividend will be payable on or 
about 24 June 2013 to those shareholders registered at the close of 
business on Friday, 21 June 2013. For JSE registered shareholders, 
the last date to trade shall be Thursday, 13 June 2013 and shall 
commence trading ex the dividend on Friday, 14 June 2013. The 
South African branch register will be closed for the purposes of 
dematerialisation, rematerialisation and transfers between the South 
African register and the South African and Botswana registers from 
Thursday, 13 June 2013 to Friday, 21 June 2013, both dates inclusive. 
The dividend shall be paid in Rand to shareholders on the South 
African register, calculated at the Pula to Rand exchange rate on 
23 May 2013 which was BWP1/R1.13 and accordingly the gross dividend 
payable is 4.52 cents per share (3.842 cents per share net of South 
African withholding tax). Withholding tax of 15% is applicable to all
shareholders who are not exempt and are registered on the South 
African share register. The issued shares at the declaration date 
are 231 000 000.

Capital commitments
The Board has authorised P54 million in capital expenditure to 
maintain and develop new camps and other assets and thus expand our 
earnings base. The Board envisage that this will be funded by 
existing cash balances and unutilised borrowing facilities. 

Contingencies
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. There have been 
significant delays in satisfying these conditions but a deadline
of 13 August 2013 has been set and the company is working with its 
legal advisers, and with the support of Government, to ensure this is 
achieved.  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.

Directorate
Earlier in 2013 the Board agreed that it should be realigned to 
improve executive capacity and also to further support our operations 
in Botswana. To that end, Messrs Andy Payne, David van Smeerdijk and 
Russel Friedman retired from the Board. Mr van Smeerdijk continues in 
his role as head of marketing and sales of Wilderness Safaris. In 
addition, Malcolm McCulloch retired as Chairman of the Board and will 
continue to serve as a non- executive member of the Board. The Board 
thanks these gentlemen for their many years of loyal service to the 
Group.
The Board was pleased to announce in April 2013 that Parks Tafa has 
agreed to serve as the Chairman of the Board and he will be supported 
by Michael Tollman as Deputy Chairman. Keith Vincent, formerly the 
COO, is serving as the acting CEO and the Board will announce the new 
CEO in due course.

Subsequent events
No material events have occurred between the reporting date and the 
date of this report.

Basis of preparation
The abridged financial information has been prepared in accordance 
with the framework concepts and the measurement and recognition 
requirements of International Financial Reporting Standards and
the information as required by IAS 34  Interim Financial Reporting. 
The report has been prepared using accounting policies that comply 
with International Financial Reporting Standards which are consistent 
with those applied in the prior year financial statements.

Independent auditors opinion
The auditors, Deloitte & Touche, have issued their opinion on the 
Groups financial statements for the year ended 28 February 2013. The 
audit was conducted in accordance with International Standards on 
Auditing. They have issued an unmodified audit opinion. These 
abridged financial statements have been derived from the Group 
financial statements and are consistent in all material respects
with the Group financial statements. A copy of their audit report is 
available for inspection at the companys registered office. Any 
reference to future financial performance included in this 
announcement, has not been reviewed or reported on by the companys 
auditors.

Outlook
As the result of weak demand from its major source markets following 
the global financial crisis, combined with the strength of local 
currencies, the Group has experienced difficult years since listing 
in 2010. It therefore embarked upon a strategic plan designed to 
address changes in the market, improve guest service, increase 
efficiencies and to re-size certain businesses for lower levels of 
demand. We believe that the results of this process are now being 
seen: guest feedback is consistently better than ever before, 
loss-making businesses have been closed or
restructured and the results of efficiency measures are being seen in 
our operational costs.
We expect to see a slow but steady strengthening of our major source 
market the United States, with a muted recovery from source markets 
in Europe against a back drop of on-going uncertainty in the world 
economy. Many of the benefits of strategic actions taken in the 
business over the course of the past year will see a continued 
improvement in overall performance of the business. If the present 
weakness of the Rand and the Pula continues, this will further 
improve results.
The Board is therefore cautiously optimistic about the future and 
thanks the Groups staff for their efforts over the last year and 
wishes them well as we embark upon the busy season from June to 
September.

By order of the Board
Parks Tafa                          
Chairman      
Derek de la Harpe
Chief Financial Officer
27 May 2013
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