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Unaudited Interim Results For The Six Months Ended 31 December 2013 And Cash Dividend Declaration
CAPEVIN HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1997/020857/06
JSE share code CVH
ISIN ZAE000167714
("Capevin Holdings" or "the Company" or "the Group")
UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2013 AND CASH DIVIDEND DECLARATION
· Normalised headline earnings per share +5.4% to 31.2 cents
· Headline earnings per share +19.5% to 35.0 cents
· Intrinsic value per share at 31 December 2013, compared to 30 June 2013 +21.5% to R9.87
· Interim dividend per share +2.5% to 10.25 cents
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 30 June
2013 2012 2013
Restated* Restated*
R'000 R'000 R'000
ASSETS
Non-current assets 2 446 006 1 978 879 2 094 567
Investment in joint venture 2 444 206 1 978 629 2 094 317
Available-for-sale financial asset 1 800 250 250
Current assets 6 360 4 950 2 641
Sundry debtors 20 - -
Cash and cash equivalents 6 340 4 950 2 641
Total assets 2 452 366 1 983 829 2 097 208
EQUITY AND LIABILITIES
Equity
Ordinary shareholders' interest 2 447 355 1 979 115 2 092 013
Non-controlling interests - - -
Total equity 2 447 355 1 979 115 2 092 013
Non-current liabilities
Deferred taxation 264 47 47
Current liabilities 4 747 4 667 5 148
Trade payables 388 511 606
Unclaimed dividends 3 949 4 156 4 037
Income tax payable 410 - 505
Total equity and liabilities 2 452 366 1 983 829 2 097 208
Net asset value per share
(cents) 278.1 224.9 237.7
* The audited 30 June 2013 annual results and the unaudited 31 December 2012 interim results were
restated due to a change in accounting policy that is disclosed in note 2 to these interim financial
statements. Restatements to the comparative results have not been audited.
CONSOLIDATED INCOME STATEMENT
Six months ended Year ended
31 December 30 June
2013 2012 2013
Restated* Restated*
R'000 R'000 R'000
Share in profits of joint venture 309 738 251 734 314 879
(Loss)/gain on dilution of interest
in joint venture (2 448) 1 463 2 649
Investment income 130 262 527
Interest expense (16) - -
Administrative expenses (1 123) (1 112) (2 476)
Profit before taxation 306 281 252 347 315 579
Taxation - 127 (3 335)
Profit for the period 306 281 252 474 312 244
Attributable to:
Owners of the parent 306 281 230 073 289 843
Non-controlling interests - 22 401 22 401
306 281 252 474 312 244
Profit for the period attributable
to equity holders of the company 306 281 230 073 289 843
Non-headline items
Share of adjustments of joint
venture, net of taxation (931) (37) (3 005)
Loss/(gain) on dilution of interest
in joint venture 2 448 (1 463) (2 649)
Headline earnings 307 798 228 573 284 189
Abnormal excise provision, net of
taxation - - 46 700
Impact of new business
acquisitions 12 360 1 699 29 717
Remeasurement of contingent
consideration (45 959) - -
Normalised headline earnings# 274 199 230 272 360 606
Earnings per share (cents)
- Attributable: basic 34.8 29.5 35.0
diluted 33.3 28.4 31.4
- Headline: basic 35.0 29.3 34.3
diluted 33.4 28.4 31.4
- Normalised headline: basic 31.2 29.6 43.5
diluted 29.8 28.6 39.8
Number of shares (thousands)
- In issue 880 103 880 103 880 103
- Weighted average 880 103 779 105 829 189
# Normalised headline earnings for the June 2012 year-end reporting period exclude the impact of an
additional excise duty provision by Distell. Distell made adequate provision for additional excise
duty on wine aperitifs and no further provisions are needed. During the current reporting period
Distell's contingent consideration for the acquisition of Burns Stewart Distillers Limited was
adjusted through earnings. This adjustment is excluded from normalised earnings.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended Year ended
31 December 30 June
2013 2012 2013
Restated* Restated*
R'000 R'000 R'000
Profit for the period 306 281 252 474 312 244
Items that may be reclassified
subsequently to profit or loss:
Fair value adjustments available-
for-sale financial assets 1 333 - -
Share of other comprehensive income
of joint venture 124 798 8 103 86 964
Fair value adjustments available-
for-sale financial assets 2 903 1 262 2 396
Currency translation differences 121 895 6 841 84 568
Items that may not be reclassified to
profit or loss:
Share of other comprehensive income
of joint venture
Actuarial gains and losses 20 798 10 286 68 839
Other equity movements of joint venture 4 375 2 287 5 415
Total comprehensive income for the period 457 585 273 150 473 462
Attributable to:
Owners of the parent 457 585 252 405 452 717
Non-controlling interests - 20 745 20 745
457 585 273 150 473 462
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months ended Year ended
31 December 30 June
2013 2012 2013
Restated* Restated*
R'000 R'000 R'000
Ordinary shareholders' equity at
the beginning of the period 2 092 013 911 191 911 191
Total comprehensive income 457 585 252 405 452 717
Unclaimed dividends written back - 816 1 412
Shares issued - 2 485 035 2 485 035
Dividends paid (102 243) (85 370) (173 380)
Transactions with non-controlling interest - (1 584 962) (1 584 962)
Ordinary shareholders' equity at
the end of the period 2 447 355 1 979 115 2 092 013
Non-controlling interests' equity at the
end of the period - - -
Beginning of the period - 879 328 879 328
Total comprehensive income - 20 745 20 745
Transactions with non-controlling interest - (900 073) (900 073)
Total equity at the end of the period 2 447 355 1 979 115 2 092 013
Dividend per share (cents)
- Interim 10.25 10.0 10.0
- Final 11.7
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended Year ended
31 December 30 June
2013 2012 2013
Restated* Restated*
R'000 R'000 R'000
Cash flows from operating activities
Administrative expenses (1 123) (1 112) (2 476)
Decrease in trade and other receivables (20) - -
(Decrease)/increase in payables and
unclaimed dividends (306) (1 531) (959)
Cash utilised by operations (1 449) (2 643) (3 435)
Interest received 130 254 519
Taxation refunded/(paid) (112) 72 (2 885)
Dividends received 107 373 89 192 178 377
Dividends paid (102 243) (85 370) (173 380)
Net increase/(decrease) in cash and cash
equivalents 3 699 1 505 (804)
Cash and cash equivalents at the beginning
of the period 2 641 3 445 3 445
Cash and cash equivalents at the end of
the period 6 340 4 950 2 641
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES
The accounting policies applied in the preparation of these summarised Group interim financial
statements, which are based on reasonable judgements and estimates, are in accordance with
International Financial Reporting Standards (IFRS) and are consistent with those applied in the
financial statements for the year ended 30 June 2013, except for the adoption of the new and
revised standards.
During the period under review, the following accounting standards, all with an effective date of
1 January 2013, were adopted:
· IFRS 10 Consolidated financial statements
· IFRS 11 Joint arrangements
· IFRS 12 Disclosure of interest in other entities
· Revised IAS 27 Separate financial statements
· Revised IAS 28 Investments in associates and joint ventures
· Revised IAS 19 Employee benefits
Refer to the "Changes in accounting policy" note for further detail.
The summarised Group interim financial statements have been prepared in terms of IAS 34 Interim
Financial Reporting as well as in compliance with the Companies Act 71 of 2008, as amended, and
the Listings Requirements of the JSE Limited. The preparation of the summarised Group interim
financial statements was supervised by the Chief Financial Officer, Mr LC Verwey CA (SA), CFA,
an employee of the Company's appointed manager, Remgro Management Services Limited. The interim
financial statements have not been audited or reviewed by the Company's auditors.
2. CHANGES IN ACCOUNTING POLICY
IFRS 10 Consolidated financial statements
IFRS 10 broadened the definition of "control". Therefore the Group reassessed the classification
of its investment in Distell Group Limited ("Distell") and concluded that,in terms of the revised
definition of control contained in IFRS 10, it should be classified as a joint venture. Previously
the investment in Distell was classified as an associate. The change in classification had no impact
on the Group's measurement of the investment as the equity method is used to measure both associates
and joint ventures. The adjustment was retrospectively applied in accordance with the transitional
provisions of the standards.
Increase/(decrease)
31 Dec 2012 30 Jun 2013
R'000 R'000
INCOME STATEMENT
Share in profit of associate (253 949) (317 249)
Share in profit of joint venture 253 949 317 249
STATEMENT OF FINANCIAL POSITION
Investment in associate (1 980 641) (2 095 280)
Investment in joint venture 1 980 641 2 095 280
IAS 19 Employee benefits
The revised IAS 19 requires that all past service costs and actuarial gains and losses be
recognised in other comprehensive income during the period in which they arise. It also
replaced interest cost and expected return on plan assets with a net interest amount that is
calculated by applying the discount rate to the net defined benefit asset/liability. The Group
applied IAS 19 retrospectively in accordance with the transitional provision of the standard.
The impact of the adoption of IAS 19 on the financial statements was as follows:
Increase/(decrease)
31 Dec 2012 30 Jun 2013
R'000 R'000
INCOME STATEMENT
Share in profit of joint venture (2 215) (2 370)
Gain on dilution of interest in joint venture 4 5
Profit attributable to owners of the parent (2 211) (2 365)
Headline earnings and normalised headline earnings (2 215) (2 370)
STATEMENT OF COMPREHENSIVE INCOME
Remeasurements of defined benefit plans 956 1 909
Total comprehensive income for the period attributable to
owners of the parent (1 255) (465)
STATEMENT OF FINANCIAL POSITION
Investment in joint venture (1 762) (963)
Total equity (1 762) (963)
STATEMENT OF CHANGES IN EQUITY
Ordinary shareholders' equity at the beginning of the period (507) (507)
Ordinary shareholders' equity at the end of the period (1 762) (963)
Earnings, headline earnings and normalised
headline earnings per share (cents) (0.3) (0.3)
3. GROUP STRUCTURE
The sole investment of Capevin Holdings is an effective interest of 28.87% (31 December 2012:
28.93% and 30 June 2013: 28.90%) in the issued share capital of Distell, held via its 50%
interest in Remgro-Capevin Investments Proprietary Limited.
4. SEGMENT REPORT
Capevin Holdings is an investment holding company, with its sole investment being an effective
interest in Distell. The directors have not identified any other segment to report on.
COMMENTARY
FINANCIAL RESULTS
Distell's reported headline earnings for the six months ended 31 December 2013 increased by 22.9% to
R1 068.5 million, while headline earnings per share increased by 22.6% to 526.1 cents. On a normalised
basis, Distell's headline earnings increased by 8.8% to R952.3 million, whereas headline earnings per
share increased by 8.5% to 468.9 cents.
Capevin Holdings' headline earnings for the six months ended 31 December 2013 consequently increased by
19.5% to 35.0 cents per share and on a normalised basis increased by 5.4% to 31.2 cents per share.
Capevin Holdings' intrinsic value increased by 21.5% to R9.87 per share based on Distell's last traded
share price of R148.00 at 31 December 2013 (excluding capital gains tax). The discount to intrinsic value
has narrowed from 17.6% at 30 June 2013 to 15.4% at 31 December 2013.
IMPACT OF DISTELL'S BLACK ECONOMIC EMPOWERMENT (BEE) TRANSACTION
Due to the restructuring of Distell's BEE transaction on 17 January 2014, Distell issued 17.7 million
ordinary shares that will be entitled to Distell's interim dividend. The effect of the BEE transaction
will dilute Capevin Holdings' effective interest in Distell from 28.87% to 26.88% (refer to Distell's
BEE SENS announcement for more details).
PROSPECTS
Distell's board believes that challenging trading conditions will persist for the remainder of the year.
They are, however, confident that the strength, appeal and versatility of Distell's brands, the company's
enhanced capacity to trade in a spectrum of markets and the security of its financial position will allow
them to continue to pursue their strategic course.
Refer to www.distell.co.za for Distell's comprehensive interim results.
DIRECTORATE
Remgro Management Services Limited was appointed to replace PSG Corporate Services Proprietary Limited
as company secretary of Capevin Holdings with effect from the close of business on 4 November 2013.
Following the change in company secretary, Mr LC Verwey replaced Mr A Mellet as Financial Director.
Effective from close of business on 4 November 2013, Mr Mellet resigned from the Board of Directors and
Mr Verwey's status as director of Capevin Holdings changed from non-executive director to Financial
Director.
Following the appointment of Mr LC Verwey as Financial Director, he no longer served as a member of the
Audit and Risk Committee and Mr CA Otto, the independent non-executive chairman was appointed by the
Board to fill the vacancy on the Audit and Risk Committee.
DECLARATION OF CASH DIVIDEND
In terms of the dividend policy of Capevin Holdings, dividends received from its indirect interest in
Distell, after providing for administrative expenses, will be distributed to shareholders. The directors
have consequently resolved to approve and declare an interim gross dividend (dividend number 19) of
10.25 cents (2012: 10.0 cents) per share for the six months ended 31 December 2013. The dividend has been
declared from income reserves.
There are no STC credits available for utilisation. The dividend is subject to a local dividend tax rate
of 15% or 1.5375 cents per share, resulting in a net dividend of 8.7125 cents per share, unless the
shareholder is exempt from paying dividend tax or is entitled to a reduced rate in terms of the applicable
double-tax agreement.
The number of issued ordinary shares as at 5 March 2014 is 880 103 265. The Company's income tax number
is 9599/656/71/8.
Dates of importance:
Last day to trade in order to participate in the dividend Friday, 4 April 2014
Shares trade ex dividend Monday, 7 April 2014
Record date Friday, 11 April 2014
Payment date Monday, 14 April 2014
Share certificates may not be dematerialised or rematerialised between Monday, 7 April 2014, and Friday,
11 April 2014, both days inclusive.
If you have in the past received dividend cheques, please contact the Transfer Secretaries to provide
them with confirmation of your banking details.
Signed on behalf of the Board of Directors.
Chris Otto Lucas Verwey
Chairman Financial Director
Stellenbosch
5 March 2014
DIRECTORATE
Non-executive directors
C A Otto* (Chairman),
J J Durand, N Celliers, A E v Z Botha*, R M Jansen*
(*Independent)
Executive director
L C Verwey (Financial Director)
CORPORATE INFORMATION
Secretary
Remgro Management Services Limited
Listing
JSE Limited
Sector: Consumer Goods Food and Beverage Beverages
Business address and registered office
Millennia Park, 16 Stellentia Avenue, Stellenbosch 7600
(PO Box 456, Stellenbosch 7599)
Transfer Secretaries
Computershare Investor Services Proprietary Limited,
70 Marshall Street, Johannesburg 2001
(PO Box 61051, Marshalltown 2107)
Auditors
PricewaterhouseCoopers Inc.
Stellenbosch
Sponsor
PSG Capital
Website
www.capevin.com
Date: 05/03/2014 05:01:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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