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Abridged Audited Group Results for the year ended 30 September 2013
CULLINAN HOLDINGS LTD
TOURISM AND LEISURE
Registration number: 1902/001808/06
ABRIDGED AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2013
GROUP FINANCIAL HIGHLIGHTS
Revenue up 32%
Headline earnings up 54%
Cash generated before adjustments for working capital R88 M (2012: R62M)
Cash generated by operations R56 M (R2012: R65M)
Cash and cash equivalents R206 M (2102: R188M)
Group condensed statement of financial position
As at As at
30 September 30 September
2013 2012
R'000 R'000
ASSETS
Non-current assets 267 141 150 618
Property, plant and equipment 140 018 75 305
Goodwill 66 758 34 030
Intangible assets 31 041 22 112
Investment properties 10 900 7 900
Investment in associate companies 4 243 3 748
Investment in joint venture 5 341 4 346
Deferred tax asset 8 840 3 177
Current assets 502 373 329 370
Inventories 29 127 14 482
Accounts receivable 266 109 122 203
Other financial asset 234 2 217
Taxation 964 1 869
Cash and cash equivalents 205 939 188 599
Total assets 769 514 479 988
EQUITY AND LIABILITIES
Ordinary shareholders' equity 323 373 189 431
Preference shareholders' equity 546 546
Non-controlling interest 1 804 102
Total shareholders' equity 325 723 190 079
Non-current liabilities 15 356 17 175
Deferred tax liability 5 688 5 601
Operating lease accrual 9 168 11 074
Preference shares 500 500
Current liabilities 428 435 272 734
Bank overdrafts 202 222
Operating lease accrual 1 467 4
Accounts payable 421 514 270 802
Taxation 3 801 537
Preference dividends 15 15
Provisions 1 436 1 154
Total equity and liabilities 769 514 479 988
Group condensed statement of comprehensive income
Year ended Year ended
30 September 30 September
2013 2013
R'000 R'000
Revenue 600 553 454 848
Turnover 592 689 448 845
Net operating expenses (526 484) (407 058)
Trading profit 66 205 41 787
Finance income 7 864 6 003
Finance expenses (192) (13)
Preference dividends paid (55) (55)
Share of (loss) / profit of associates 495 796
Share of profit of joint venture 995 1 582
Profit before taxation 75 312 50 100
Tax expense (18 314) (14 425)
Profit for the year 56 998 35 675
Other comprehensive income:
Exchange differences on translating
foreign operations 262 (116)
Total comprehensive income for the year 57 260 35 559
Profit attributable to:
equity holders 56 859 35 592
non-controlling interest 139 83
Total comprehensive income attributable to:
equity holders 57 121 35 476
non-controlling interest 139 83
Earnings per share (cents) 7.85 4.95
Diluted earnings per share (cents) 7.73 4.95
Group condensed statements of changes in equity
Year ended Year ended
30 September 30 September
2013 2012
R'000 R'000
Ordinary share capital
Balance at beginning of year 7 184 7 184
Issued during year 743 -
Balance at end of year 7 927 7 184
Share premium
Balance at beginning of year 59 905 59 905
Premium on issue of shares 81 037 -
Balance at end of year 140 942 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 (1 927) (1 811)
Reserve on translation of foreign subsidiary 262 (116)
Balance at end of year (1 665) (1 927)
Revaluation reserve
Balance at beginning of year 870 870
Balance at end of year 870 870
Share-based payment reserve
Balance at beginning of year - -
Expense for the year 2 225 -
Balance at end of year 2 225 -
Accumulated profit / (loss)
Balance at beginning of year 102 519 74 111
Attributable income for year 56 859 35 592
Ordinary dividend paid (7 184) (7 184)
Balance at end of year 152 194 102 519
Ordinary shareholders' equity 323 373 189 431
Non-controlling interest
Balance at beginning of year 102 19
Arising from business combination 1 645 -
Profit attributable to non-controlling
interest for year 139 83
Dividend paid to non-controlling interest (82) -
Balance at end of year 1 804 102
Preference shareholders' equity
Balance at beginning of year 500 500
Balance at end of year 500 500
Total comprehensive income is made up of
Profit for year 56 998 35 675
- Attributable to equity shareholders 56 859 35 592
- Attributable to non-controlling interest 139 83
Translation of foreign subsidiary 262 (116)
57 260 35 559
Group condensed statement of cash flows
Year ended Year ended
30 September 30 September
2013 2012
R'000 R'000
- Cash generated by operations 56 194 65 157
Net cash inflow / (outflow) from
operating activities 38 751 48 212
Net cash outflow from
investing activities (45 247) (39 421)
Net cash outflow from
financing activities (82) -
Net (decrease) / increase in cash
and cash equivalents (6 578) 8 791
Cash acquired on acquisition 23 938 -
Cash and cash equivalents
at beginning of the year 188 377 179 586
Cash and cash equivalents
at end of the year 205 737 188 377
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 as well as the
SAICA Financial Reporting Guides as issued by the Accounting Practices Committee
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 2013.
2. Notes to the statement of comprehensive income
Year ended Year ended
30 September 30 September
2013 2012
Ordinary shares ('000)
October - August 718 355 718 355
September 792 701 718 355
Weighted average number of net shares
in issue 724 551 718 355
Adjusted for effect of future share-based
compensation payments 10 541 -
Diluted weighted average number of shares 735 092 718 355
Determination of headline earnings: R'000 R'000
Earnings attributable to ordinary shareholders 56 859 35 592
Adjustment to fair value of investment
property (3 000) -
Profit / (Losses) on disposal
of property, plant and equipment 211 313
Total tax effect 563 (360)
Headline earnings 54 633 35 545
Headline earnings per share (cents) 7.54 4.95
Diluted headline earnings per share (cents) 7.43 4.95
Dividends per share (cents) 1.00 1.00
3. BUSINESS COMBINATION
Glacier Enterprises (Pty) Ltd
On 1 October 2012, the Company acquired 90% of the issued share capital of Glacier Enterprises (Pty) Ltd. Glacier is
engaged in import facilitation, including financing, foreign exchange management, stock management and handling
of shipping and clearing arrangements for selected clients.
Goodwill on acquisition arose largely on the synergy between Glacier Enterprises and Cullinan in the utilisation of
Cullinan unutilised cash resources.
Tourism Interests of Imperial Holdings Limited
On 1 September 2013, the Company acquired the business of various tourism brands of Imperial Holdings Limited. These
businesses included Springbok Atlas Tours & Safaris, Springbok Atlas Coach Charter, Grosvenor Tours and Eastgate
Safaris. In addition as part of the transaction, the Company acquired 74.9% of the issued share capital of Silverton Travel(Pty) Ltd,
trading as Edusport Travel.
These businesses are engaged primarily in Inbound Tourism, Incentive Travel, destination management and ground
handling services and coach charter. The goodwill arising out of this acquisition consists largely of the synergies and
economies of scale expected through the combining of these business units with existing tourism businesses.
The acquisition date fair value of assets acquired and laibilities assumed and the consideration transferred were:
Tourism 74.9% of
Glacier Interests Silverton Travel
Enterprises of Imperial (Pty) Ltd t/a Total
(Pty) Ltd Holdings Ltd Edusport Travel Transaction
R'000 R'000 R'000 R'000
Property, plant and equipment 51 48 251 368 48 670
Vendor loan 2 718 - - 2 718
Intangible assets - 1 077 - 1 077
Inventory 12 946 191 - 13 137
Trade and other receivables 11 876 15 984 20 577 48 437
Deferred tax 584 - 1 261 1 845
Taxation payable 145 - 560 705
Cash and cash equivalents 2 423 16 600 4 915 23 938
Trade and other payables (32 331) (35 584) (20 493) (88 408)
Non - controlling interest 159 - (1 804) (1 645)
Net asset value (1 429) 46 519 5 384 50 474
Purchase consideration - cash 1 170 1 170
- shares 65 781 16 000 81 781
Goodwill 2 599 19 262 10 616 32 477
Since the acquisition date, the following amounts have been included in the statement of comprehensive income for
Cullinan for the year:
R'000 R'000 R'000 R'000
Revenue 48 832 13 878 58 62 768
Profit 4 217 3 259 (1 440) 6 036
The gross amount due under trade and other receivables is R48.604m of which R0.167m is expected to be uncollectible.
If the tourism interests of Imperial Holdings Ltd had been included in the group statement of comprehensive income
from the beginning of the financial year, the impact would have been:
R'000 R'000 R'000
Revenue 143 417 11 901 155 318
Profit (6 637) (1 536) (8 173)
Acquisition related costs which are included in the statements of comprehensive income:
R'000
Total 312
4. Segmental reporting
Travel and Marine and Financial Corporate
Tourism Boating Services Services Total
R'000 R'000 R'000 R'000 R'000
30 September 2013
Revenue 494 389 46 011 59 114 1 039 600 553
Trading profit 91 975 1 002 5 725 (32 497) 66 205
30 September 2012
Revenue 405 997 42 465 6 003 383 454 848
Trading profit 73 084 (861) - (30 436) 41 787
Annual financial statements
These group condensed financial statement extracts should be read in conjuction with the audited 2013 annual
financial statements issued on the 23rd December 2013. The group financial statements were prepared by
D Standage, the Financial Director of the Group.
The directors take full responsibility for the preparation of the abridged report and that the financial information
has been correctly extracted from the underlying annual financial statements.
Approval of annual financial statements
The annual financial statements were approved by the Board of directors on 23rd December 2013.
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 auditor's report does not necessarily report on all of the information contained in this announcement /
financial results. Shareholders are therefore advised that in order to obtain a full understanding of the nature
of the auditor's engagement they should obtain a copy of the auditor's report tpgeher with the accompanying
financial information from the issuers 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 the 26th February 2014 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 2 cents per ordinary share for the year ended
30 September 2013. Details can be reviewed in the dividend notice released on SENS on 23 December 2013.
SUMMARY GROUP OVERVIEW
We are pleased to report an excellent group performance in 2013. Headline earnings increased by 54% on the prior year and the
fundamentals of our business look strong for the year ahead. These results follow a similar performance in 2012, in which 2012
earnings increased by 61% on the 2011 year.
We attained our goals of increased organic growth and some key acquisitions in 2013. The acquisitions included both the
purchase of Glacier Enterprises (Pty) Ltd for the Cullinan Financial Services Division, and the acquisition of the entire tourism and
travel division from Imperial Holdings Limited. The travel companies acquired comprised Springbok Atlas Touring, Springbok
Atlas Charter, Eastgate Safaris, Grosvenor Tours and Silverton Travel (Pty) Ltd trading as Edusport. These acquisitions have
increased the bulk of the Group and emphasise its position as a leader in travel services in South Africa and the only travel
company with ground transportation, meet and greet, tour operations, retail, corporate and incentive travel services spread
across the Southern African region.
RESULTS
Excluding the effect of businesses acquired in the year, sales increased by 17% on 2012, in fairly tough retail conditions.
Consumer spending has not been particularly robust, and we believe that our growth has been achieved by our continued focus
on service excellence and value for our customers.
Revenue growth has also been matched by effective control over expenditure during the year, and this has seen a resultant
positive cash generation from operations for the year.
Cash generated before adjusting for working capital requirements rose from R62m in 2012 to R88m in 2013. This substantial
increase was offset to some extent through the acquisition of Glacier Enterprises (Pty) Ltd on 1 October 2012 as a result of the
"once off" increase in working capital required by this business and hence, cash generated by operations amounted to a still
substantial R56m. Of this, R45 million has been re-invested in maintaining and increasing our coach fleet and in a new state of
the art travel reservations system.
A final dividend for the year of 2 cents per share has been declared and will be paid in January 2014 and this maintains our
dividend at prior year levels.
EXPANSION
As mentioned above, during the year we successfully concluded the acquisition of Glacier Enterprises (Pty) Ltd and the
acquisition of the tourism interests of Imperial Holdings Limited. We are particularly pleased with the “all equity” transaction
agreed with Imperial Holdings Limited for the acquisition of the latter assets.
We were also pleased with the performance of Glacier Enterprises (Pty) Ltd during 2013, since this represents the first
acquisition for our newly formed Cullinan Financial Services Division.
Aside from the acquisitions mentioned, there were a number of other promising developments during the year. These include:
•the continued growth and expansion of our Inbound China Division, requiring further expansion to our offices in Shanghai,
China and South Africa
•the Ikapa Inbound tour operator and Ikapa coach charter businesses purchased in the 2012 financial year have been turned
around from initially struggling performers and are now contributing strongly to the Group’s overall performance
•the opening of new offices at Chiappini Square, creating a travel centre hub in Cape Town for Thompsons Holidays, Thompsons
Travel, Pentravel, Inbound China Division and Glacier Enterprises (Pty) Ltd
•the upgrade of the coach depot in Johannesburg follows the upgrade of the coach depot in Cape Town in the prior year
•the further expansion of Pentravel with the opening of two new shops in 2013 and the decision to open a further 6 shops
•the successful implementation of a state of the art travel reservations system will further improve efficiencies and service to
our customers in our tour operating businesses
•the expansion of the Cullinan Financial Services Division with the launch of additional niche financing businesses in bridging
finance, project finance, treasury management and marine finance
•memoranda of understandings were signed during 2013 to acquire an incentives business and a majority shareholding in a
short term finance company. It is planned that these acquisitions will be completed in 2014.
REVIEW OF OPERATIONS
The Group produced an excellent performance across the board in 2013, meeting and exceeding our financial goals set for the
year. It was particularly satisfying that all segments and divisions performed well and all contributed to the successful overall
Group result.
Marine and Boating
We anticipate an improvement in this sector in 2014 as a result of the weaker rand and improvements implemented in 2013.
Tourism and Travel
This segment outperformed in 2013 with strong performances across the board in the Group’s coach charter, inbound tourism
and domestic tourism divisions.
The additional tourism units acquired during 2013 should add significant benefits in 2014 and beyond.
Cullinan Financial Services Division
Glacier Enterprises (Pty) Ltd exceeded its target for the year and more importantly, was the first step in developing the Cullinan
Financial Services Division. This segment is expected to be a future key contributor to growth and has already expanded into
bridging, marine and project finance in 2013. During the year we also entered into a memorandum of understanding with a term
loan business which will add further bulk and opportunity for growth.
PROSPECTS FOR 2014
We are confident about the future growth prospects for the Group. We anticipate growth in the tourism market to Southern
Africa over the next 5 years, both from Asia and other traditional markets. The fundamentals of our core businesses are strong
and the new acquisitions in the tourism and travel segments are well placed to take advantage of this expected upward trend.
It is two months since we acquired the various tourism companies from Imperial Holdings Limited and we have already taken a
number of key decisions which we believe will achieve a significant improvement in the performance of these business units. We
remain committed to investing and improving our various historical businesses and to maintaining our position as market leader
in the travel services sector. As such we have approved a further robust capital expenditure programme for 2014.
The Cullinan Financial Services Division is a very promising development for the Group and an important diversification from the
Tourism and Leisure sector. We expect that this division will be a major contributor to growth within the Group over the next 5
years and we will continue to look for market opportunities in this niche sector.
On Behalf of the Board
M Tollman D Standage
Chief Executive Officer Financial Director (Preparer)
23 December 2013
Registered office
6 Hood Avenue, Rosebank, 2196
Transfer secretaries
Computershare Investor Services (Pty) 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)
(Share code: CULP ISIN: ZAE000001947)
(“the Company” or “the Group”)
Company secretary
B Allison
Auditors
Mazars were re-elected as auditors in 2013
Sponsor
Arcay Moela Sponsors (Pty) Limited
(Registration number 2006/033725/07)
Directors
M Tollman, MA Ness *‡, DD Hosking *‡, LA Pampallis, G Tollman*‡, DK Standage,
R Arendse ‡, S Nhlumayo ‡, A Azoulay ‡
* Non-Resident, ‡ Non-Executive
Date: 23/12/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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