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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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