Wrap Text
Reviewed Condensed Consolidated Financial results for the year ended 31 March 2014
Tsogo Sun Holdings Limited
Reviewed Condensed Consolidated Financial results for the year ended 31 March 2014
(Incorporated in the Republic of South Africa)
(Registration number 1989/002108/06)
Share code: TSH ISIN: ZAE000156238
(“Tsogo Sun” or “the company” or “the group”)
Income R10.8 billion up 9%
Ebitdar R4.2 billion up 8%
Adjusted earnings R1.9 billion up 18%
Adjusted HEPS 176.5 cents up 18%
Final dividend per share 60.0 cents up 18%
Review of operations
Trading during the financial year was satisfactory in a tough economic environment. Year-on-year growth was achieved
in both casino and hotel revenues assisted by the merger and acquisition activity undertaken as part of the group’s
growth strategy.
Tsogo Sun has continued to allocate capital in terms of this strategy and accordingly has invested R2.4 billion during
the year as follows:
- acquired an additional 8.7% effective interest in Tsogo Sun KwaZulu-Natal Proprietary Limited in May 2013 at a cost
of R363 million and the remaining 1.3% effective interest in November 2013 for R37 million with the resultant
shareholding in Suncoast being 100%;
- completed the R400 million redevelopment of the Hemingways casino in East London;
- spent R154 million during the year on the R206 million expansion of the Emnotweni casino, which included the
construction of an expanded casino floor, additional gaming positions, additional covered parking, a conference and eventing
area and restaurants. The project will be completed during May 2014;
- commenced construction of the US$30 million expansion of Southern Sun Maputo including the addition of 111 rooms
and conference facilities, the expansion of the existing restaurant, lobby and back-of-house facilities and the
refurbishment of the existing 158 rooms. The hotel has closed with effect from 1 April 2014 and the project is scheduled for
completion during July 2014;
- completed the acquisition of a 75.5% stake in Ikoyi Hotels Limited in Lagos, Nigeria on 29 June 2013 for US$50.6
million and the re-financing of US$19.7 million debt in the business. The property was previously managed by the group on
behalf of the third-party owners;
- acquired shares in various properties during the year for an aggregate R73 million;
- acquired additional effective interests from non-controlling interests and in associates in various cinemas and
hotels during the year for an aggregate R41 million;
- completed the expansion project at Blackrock casino including an additional 50 slot machines and three tables and
an expansion of the Garden Court Blackrock hotel by an additional 40 rooms;
- commenced construction on the R560 million expansion and redevelopment of the Silverstar casino which includes
additional dining options, an outdoor events area, cinemas, ten-pin bowling alley, laser tag games, an expanded and enhanced
casino floor and parking. R160 million was spent during the year and the project is scheduled for completion by
September 2014;
- commenced the R630 million refurbishment and expansion of the Gold Reef City casino and Theme Park which will
include an increased casino offering, cinemas and additional restaurants at the casino and additional food and beverage
outlets and improved access systems at the Theme Park with an improved linkage to the casino complex and an expansion of the
Apartheid Museum. R22 million was spent during the year on the project; and
- in addition to these acquisitions and expansion projects, the group also invested R769 million on maintenance capex
group-wide, including gaming system replacements and major hotel refurbishments, ensuring our assets remain best in
class.
Total income for the year of R10.8 billion ended 9% above the prior year with a 5% growth in gaming win assisted by a
16% growth in hotel rooms revenue and a 22% growth in food and beverage revenue. Earnings before interest, income tax,
depreciation, amortisation, property rentals, long-term incentives and exceptional items (“Ebitdar”) at R4.2 billion for
the year reflected an 8% increase on the prior year.
The overall group Ebitdar margin of 39.1% is 0.1 percentage points (“pp”) down on the prior year. As previously
reported, the underlying operations of the group remain highly geared towards the South African consumer (in gaming) and the
corporate market (in hotels) with both sectors still experiencing difficult economic conditions and increased
administered costs (electricity, water and property rates). The results for the year continue to reflect the growth potential
of the group should these sectors of the South African economy improve.
Gaming win for the year grew by 5% on the prior year with growth in slots win at 2% and tables win growth at 14%.
Gauteng recorded provincial growth in gaming win of 3.4% for the year. Gaming win growth of 4.8% was achieved at
Montecasino, 7.4% at Gold Reef City and 7.1% at Silverstar.
KwaZulu-Natal provincial gaming win grew by 3.5% for the year. Gaming win growth of 4.4% was achieved at Suncoast
Casino and Entertainment World and 2.6% at Blackrock casino with Golden Horse casino 2.1% down on the prior year.
Mpumalanga reported growth in provincial gaming win of 2.8% for the year. Gaming win growth of 2.4% was achieved at
The Ridge casino in Emalahleni with Emnotweni casino in Nelspruit 0.2% down on the prior year impacted by the expansion
and redevelopment during the year.
The Eastern Cape provincial gaming win grew by 5.6% for the year. Hemingways reported growth in gaming win of 4.8%.
The Western Cape reported growth in provincial gaming win of 4.8% for the year. The Caledon Casino, Hotel and Spa and
Garden Route casino in Mossel Bay reported growth of 4.3% and 1.4% respectively while gaming win at Mykonos casino in
Langebaan reduced by 1.8%.
The Goldfields casino in Welkom in the Free State experienced difficult conditions with growth in gaming win of 1.3%
on the prior year.
Other Gaming division operations consisting of the Sandton Convention Centre, the StayEasy Century City hotel and head
office costs reflected a net loss of R196 million, R11 million adverse to the prior year.
Overall revenue for the Gaming division increased 6% on the prior year to R8.1 billion. Ebitdar improved 5% to R3.3
billion at a margin of 40.5%, 0.5pp below the prior year partially due to opening additional profitable lower margin
businesses.
The hotel industry in South Africa continues to experience a recovery from the dual impact of depressed demand and
oversupply. Overall industry occupancies have improved to 62.0% (2013: 60.9%) for the year. As a result of the strong sales
and distribution channels and the superior product and service quality available within the group, Tsogo Sun Hotels
continues to achieve an occupancy and rate premium in the segments in which the group operates.
Trading for the group’s South African hotels for the year has been more buoyant recording a system-wide revenue per
available room (“RevPar”) growth of 10% on the prior year due mainly to an increase in average room rates by 11% to R900,
with occupancies below the prior year at 63.9% (2013: 64.1%) impacted by the non-repeat of the BRICS conference in
Durban and with no Easter public holidays in the 2014 financial year. Overall revenue for the South African Hotel division
increased 11% on the prior year to R2.2 billion assisted by the inclusion of 54 on Bath and Southern Sun Hyde Park offset
by the closure of Garden Court Sandton. Ebitdar improved 20% to R737 million at a margin of 34.2% (2013: 31.6%).
The Offshore division of hotels achieved total revenue of R550 million representing a 52% improvement on the prior
year, driven by the acquisition of Southern Sun Ikoyi, effective from 29 June 2013, and the weakening of the Rand against
both the US$ and the Euro. Ebitdar (pre-foreign exchange gains) improved 65% to R153 million. The Rand weakness resulted
in a R33 million (2013: R37 million) foreign exchange gain on the translation of offshore monetary items.
Combined South African and offshore hotel trading statistics, reflecting the Tsogo Sun group owned hotels and
excluding hotels managed on behalf of third parties, are as follows:
for the year ended 31 March 2014 2013
Occupancy (%) 63.6 64.7
Average room rate (R) 897 782
RevPar (R) 570 506
Rooms available (’000) 3 892 3 780
Rooms sold (’000) 2 476 2 445
Rooms revenue (Rm) 2 221 1 914
The increase in average room rate is positively impacted by the inclusion of Southern Sun Ikoyi from 29 June 2013 and
the effect of the Rand weakness on the offshore portfolio.
Operating expenses including gaming levies and VAT and employee costs but excluding exceptional items and long-term
incentives increased by 9% on the prior year mainly due to non-organic growth in the business and increased offshore
overheads as a result of the weakening of the Rand against both the US$ and the Euro offset by savings initiatives.
Property rentals at R221 million are 15% up on the prior year mainly due to contractual increases and straight line
lease provision adjustments. Amortisation and depreciation at R648 million is 7% up on the prior year due mainly to the
capital spend during the year and the acquisition of Southern Sun Ikoyi.
The long-term incentive expense at R150 million is R84 million below the prior year charge and reflects the effect of
the increased long-term incentive liability (including dividend adjustments) at 31 March 2014.
Exceptional losses for the year of R73 million relate mainly to property, plant and equipment and loan impairments,
fair value adjustment to the value of a previously held interest in an associate and transaction and retrenchments costs
on the restructure of various departments in the business offset by a lease termination recovery. Exceptional losses for
the prior year of R19 million relate mainly to goodwill, property, plant and equipment and loan impairments, hotel
pre-opening costs and transaction and restructure costs offset by the settlement fees on termination of the Dubai hotel
management contracts.
Net finance costs of R373 million are 3% below the prior year due to lower average SA debt balances and reduced
preference share interest than the prior year offset by reduced average SA cash balances and increased offshore debt at lower
interest rates.
The effective tax rate for the year is 28.2% is impacted by non-deductible expenditure such as casino building
depreciation offset by the tax holiday at Southern Sun Ikoyi and non-taxable foreign exchange gains. The comparative effective
tax rate of 28.6% is due to the non-taxable gains referred to above in addition to preference share dividends.
Profit attributable to non-controlling interests of R96 million is 23% below the prior year mainly due to the
acquisition of the additional 10% of Suncoast offset by the Southern Sun Ikoyi non-controlling interests.
Group adjusted headline earnings for the year ended 31 March 2014 at R1.9 billion are 18% above the prior year. The
number of shares in issue is largely unchanged year-on-year and thus adjusted headline earnings per share increased by 18%
to 176.5 cents per share.
Cash generated from operations for the year reduced 1% on the prior year at R3.8 billion. Cash flows utilised for
investment activities of R2.4 billion consisted mainly of maintenance capital expenditure and the acquisitions and
investments described above.
Interest-bearing debt net of cash at 31 March 2014 totalled R4.4 billion, which is R0.8 billion above the 31 March
2013 balance of R3.6 billion, with R897 million paid in dividends to group and non-controlling shareholders in addition to
the investment activities during the year. Additional banking facilities of R4.2 billion are under negotiation to fund
the group’s growth strategy and the tenure of the loans have been extended to between 2020 and 2021. A R2.0 billion
preference share issue is in the planning stage to provide additional capital flexibility.
PROSPECTS
The continued improvement in trading performance across the group’s operations during the year remains encouraging.
However, the sustainability of this growth is uncertain due to the weaker second half trading, ongoing macroeconomic
pressure and weak consumer sentiment. Nevertheless, the group remains highly cash generative and continues to pursue
significant opportunities to invest capital in its growth strategy.
The Mpumalanga Gaming board withdrew the previous request for proposal (“RFP”) for the fourth licence in the province
and restarted the project with a new RFP. The group submitted a revised bid and have been subsequently advised that the
board has again withdrawn the RFP. The group will be pursuing a legal challenge in this regard.
The potential to bid for the relocation of one of the smaller casinos in the Western Cape to the Cape Metropole
remains an opportunity for the group, although the increase in provincial taxes in the Western Cape has made this a less
attractive opportunity than before.
The group is also exploring a variety of projects, including the expansion of the Suncoast casino and related
entertainment facilities, as well as a number of potential acquisitions which are at various stages. The group has closed a
number of acquisitions subsequent to year end as follows:
- As announced on the Stock Exchange News Service of the JSE Limited (“SENS”) on 3 April 2014 Southern Sun Hotel
Interests Proprietary Limited (“SSHI”), a group subsidiary, concluded agreements with Liberty Group Limited (“Liberty”) for
a 10% increase in the group’s equity interest in The Cullinan Hotel Proprietary Limited (“Cullinan”) to 60% and the
acquisition by Cullinan of various hotel assets from SSHI and Liberty. The net investment by the group is R762 million and
the effective date of the transaction was 30 April 2014.
- The group acquired a 25% interest in RedefineBDL Hotel Group Limited for R145 million, a leading independent
hotel management company in the United Kingdom with approximately 60 hotels under management, with effect from 1 May 2014.
This acquisition provides the company with access to additional management expertise, exposure to new markets and the
potential for opportunities to deploy capital in attractive investments in the European market in the future.
- As announced on SENS on 13 May 2014 the group has entered into a transaction with Sun International Limited and
Grand Parade Investments Limited for the acquisition of a 40% equity interest in each of SunWest International Proprietary
Limited and Worcester Casino Proprietary Limited for an aggregate R2 185 million. The acquisition is subject to the
fulfilment of conditions precedent which includes the approvals of the provincial Gambling and the Competition Authorities.
The group opened the 353-roomed Southern Sun Abu Dhabi under management contract in the United Arab Emirates on 30
April 2014.
The ability to continue to pursue the group’s investment strategy will depend on the final outcome and impact of the
variety of proposed regulatory and tax changes considered by government and will require the successful interaction with
various regulatory bodies including gaming boards, city councils, provincial authorities and national departments. The
group continues to constructively engage with the various spheres of government in this regard.
The group continues to assist SABMiller plc with its review of its strategic options in relation to its effective
39.6% shareholding and further announcements will be made to shareholders in due course.
DIVIDEND
The board of directors has declared a final gross cash dividend in respect of the year ended 31 March 2014 of 60.0
(sixty) cents per share. The dividend has been declared in South African currency and is payable to shareholders recorded
in the register of the company at close of business Friday, 13 June 2014. There are no STC credits to be utilised. The
number of ordinary shares in issue at the date of this declaration is 1 098 158 501 (excluding treasury shares). The
dividend will be subject to a local dividend tax rate of 15%, which will result in a net dividend of 51.0 cents per share to
those shareholders who are not exempt from paying dividend tax. The company’s tax reference number is 9250039717.
In compliance with the requirements of Strate, the electronic and custody system used by the JSE, the following dates
are applicable in 2014:
Last date to trade cum dividend Friday, 6 June
Shares trade ex dividend Monday, 9 June
Record date Friday, 13 June
Payment date Tuesday, 17 June
Share certificates may not be dematerialised or rematerialised during the period Monday, 9 June 2014 and Friday, 13
June 2014, both days inclusive. On Tuesday, 17 June 2014 the cash dividend will be electronically transferred to the bank
accounts of all certificated shareholders where this facility is available. Where electronic fund transfer is not
available or desired, cheques dated 17 June 2014 will be posted on that date. Shareholders who have dematerialised their share
certificates will have their accounts at their CSDP or broker credited on Tuesday, 17 June 2014.
SUBSEQUENT EVENTS
The directors are not aware of any matter or circumstance arising since the end of the financial year, not otherwise
dealt with within the financial statements, that would affect the operations or results of the group significantly.
PRESENTATION
Shareholders are advised that a presentation to various analysts and investors which provides additional analysis and
information will be available on the group’s website at www.tsogosun.com.
MN von Aulock RB Huddy
Chief Executive Officer Chief Financial Officer
22 May 2014
NOTES TO THE REVIEWED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1 BASIS OF PREPARATION
The reviewed condensed consolidated financial statements for the year ended 31 March 2014 have been prepared in accordance
with the framework concepts and the recognition and measurement criteria of International Financial Reporting Standards
(“IFRS”) as issued by the International Accounting Standards Board (“IASB”), the preparation and disclosure requirements
of IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee
and Financial Reporting Pronouncements as issued by Financial Reporting Standards Council, the Listings Requirements of the
JSE Limited and the requirements of the Companies Act of South Africa. CFO, RB Huddy CA(SA), supervised the preparation of
the condensed consolidated financial statements. The accounting policies are consistent with IFRS as well as those applied
in the most recent audited annual financial statements as at 31 March 2013 other than as mentioned below. The reviewed
condensed consolidated financial statements should be read in conjunction with the annual financial statements for the
year ended 31 March 2013, which have been prepared in accordance with IFRS. This report has been reviewed by the group’s
auditors, PricewaterhouseCoopers Inc. This review has been conducted in accordance with International Standards on Review
Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”, and their
unmodified review opinion is available for inspection at the company’s registered office.
2 CHANGES IN ACCOUNTING POLICIES
An amendment to IAS 19 Employee Benefits requires service costs and net interest to be allocated to profit or loss, while
all remeasurements are to be allocated to other comprehensive income. Previously the group allocated the adjustment to
profit or loss by applying the corridor method allowed in IAS 19 which has subsequently been withdrawn. The 31 March 2013
comparative numbers in the income statement, statement of other comprehensive income and cash flow statement, and
31 March 2012 comparative numbers in the balance sheet and statement of changes in equity have accordingly been restated. Previously IAS 16 Property, Plant and Equipment permitted spare parts and servicing equipment to be classified as inventory
and the group previously classified all of its operating equipment as inventory. The impact of the amendment to IAS 16
required the group to perform an assessment on all operating equipment used by the casino and hotel operations to determine
which items are used for more than one period and met the definition of property, plant and equipment.
The abovementioned changes in accounting policies have been applied retrospectively and have reduced earnings per share
by 0.2 cents from 148.5 cents per share to 148.3 cents per share for the year ended 31 March 2013. Other than the
abovementioned changes in accounting policies, the accounting policies have been consistently applied with those of the
annual financial statements for the year ended 31 March 2013, as described in those annual financial statements. The monetary effects have been disclosed as footnotes to the condensed statements. 3 BUSINESS COMBINATIONS The following were the major business combinations concluded during the year under review in line with the group’s
strategy of owning its hotel properties: Acquisition of Ikoyi hotel With effect from 29 June 2013, the acquisition of 75.5% of the shares of Ikoyi Hotels Limited, the company which owns
the Southern Sun Ikoyi hotel, was concluded. The fair value of the consideration paid for the acquisition is R505 million
(US$50.6 million) cash. The group acquired the above mentioned hotel, which was previously a managed property, as an addition to its property
portfolio.The fair valuation of the net assets acquired equates to the fair value of the consideration paid at the date
of acquisition, and therefore no goodwill has arisen and no intangible assets have been identified. The acquired business
contributed incremental revenues of R140 million and profit after tax, including exceptional and acquisition costs of
R10 million, of R40 million to the group for the period from the date of control to 31 March 2014. Had the acquisition
occurred on 1 April 2013, group revenue would have increased by an additional R47 million and profit after tax would have
increased by an additional R20 million. These amounts have been calculated using the group’s accounting policies.
The fair value of net assets acquired is as follows: Rm
Hotel property, plant and equipment 978
Net liabilities (309)
Total identifiable net assets acquired 669
Less: Non-controlling interests (on the proportionate basis) (164)
Net assets acquired 505
Purchase consideration paid in cash (505)
Goodwill -
Acquisition of Hyde Park hotel
As previously reported, with effect from 17 May 2013 the group acquired the Southern Sun
Hyde Park hotel business, previously a managed property. The fair value of the consideration paid for the property is
R132 million cash. Due to the value of the net assets acquired equating to the consideration paid, no goodwill has arisen
on this acquisition.
4 TRANSACTIONS WITH NON-CONTROLLING INTERESTS
The following major transaction with non-controlling interests was concluded during the year under
review:
Share buy-back of additional Durban Add-Ventures Limited and Adventure World Management (Pty) Limited
non-controlling interests
As previously reported, agreement was reached with 89% of the outstanding shareholders in Durban
Add-Ventures Limited and 100% in Adventure World Management (Pty) Limited for the acquisition of the remaining outstanding 10%
effective interest in Tsogo Sun KwaZulu-Natal (Pty) Limited. An effective 8.7% was acquired at a cost of R363 million in May
2013 with the resultant shareholding in Tsogo Sun KwaZulu-Natal (Pty) Limited being 98.7%. The group then acquired
these remaining shares in terms of section 124 of the Companies Act for R37 million in September 2013. The group now owns
100% in Tsogo Sun KwaZulu-Natal (Pty) Limited.
5 SEGMENT INFORMATION
In terms of IFRS 8 Operating Segments the chief operating decision maker has been identified as the group’s Chief Executive
Officer and the Group Executive Committee. Management has determined the operating segments based on the reports reviewed by
the chief operating decision maker.
There has been no change in the basis of segmentation or in the basis of measurement of segment profit or loss from the last
annual financial statements.
6 CAPITAL COMMITMENTS
The board has committed a total of R4.5 billion for maintenance and expansion
capital items at its gaming and hotel properties of which R2.4 billion is anticipated to be spent during the next
financial year. R1.0 billion of the committed capital expenditure has been contracted for.
CONDENSED CONSOLIDATED INCOME STATEMENT
for the year ended 31 March Change 2014 2013
% Reviewed Restated(1)
Rm Rm
Net gaming win 5 6 819 6 525
Rooms revenue 16 2 221 1 914
Food and beverage revenue 22 1 063 869
Other revenue 664 602
Income 9 10 767 9 910
Gaming levies and Value Added Tax (1 411) (1 341)
Property and equipment rentals (291) (258)
Amortisation and depreciation (648) (608)
Employee costs (2 604) (2 512)(2)
Other operating expenses (2 691) (2 359)
Operating profit 10 3 122 2 832
Interest income 21 45
Finance costs (394) (430)
Share of profit of associates and joint ventures - 6
Profit before income tax 2 749 2 453
Income tax expense (776) (701)
Profit for the year 1 973 1 752
Profit attributable to:
Equity holders of the company 1 877 1 627
Non-controlling interests 96 125
1 973 1 752
Number of shares in issue (million) 1 098 1 098
Weighted average number of shares in issue (million) 1 098 1 097
Basic and diluted earnings per share (cents) 15 170.9 148.3(1)
(1) Restated for changes in accounting policies - refer note 2
(2) Employee costs in the 2013 income statement was previously reported as R2 510 million
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2014 2013
Reviewed Restated(1)
Rm Rm
Profit for the year 1 973 1 752
Other comprehensive income for the year, net of tax
Items that may be reclassified subsequently to profit or loss: 178 47
Cash flow hedges 128 (33)
Currency translation adjustments 86 71
Income tax relating to items that may subsequently be reclassified (36) 9
Items that may not be reclassified subsequently to profit or loss: 4 1
Actuarial gains on post-employment benefit liability 5 1
Income tax relating to items that may not subsequently be reclassified (1) -
Total comprehensive income for the year 2 155 1 800
Total comprehensive income attributable to:
Equity holders of the company 2 059 1 675
Non-controlling interests 96 125
2 155 1 800
(1) Restated for changes in accounting policies - refer note 2
SUPPLEMENTARY INFORMATION
for the year ended 31 March Change 2014 2013
% Reviewed Restated(2)
Rm Rm
Reconciliation of earnings attributable to equity holders of the company
to headline earnings and adjusted earnings(1)
Earnings attributable to equity holders of the company 1 877 1 627
Loss/(gain) on disposal of property, plant and equipment 2 (1)
Impairment of property, plant and equipment 14 9
Fair value loss on revaluation of previously held interest in associate 6 -
Impairment of goodwill - 16
Headline earnings 15 1 899 1 651
Other exceptional items 39 (4)
Adjusted headline earnings 18 1 938 1 647
Number of shares in issue (million) 1 098 1 098
Weighted average number of shares in issue (million) 1 098 1 097
Basic and diluted HEPS (cents) 15 173.0 150.5
Basic and diluted adjusted HEPS (cents) 18 176.5 150.1
(1) Net of tax and non-controlling interests
Reconciliation of operating profit to Ebitdar(3)
Group Ebitdar pre-exceptional items is made up as follows:
Operating profit 3 122 2 832
Add:
Property rentals 221 193
Amortisation and depreciation 648 608
Long-term incentive expense 150 234
4 141 3 867
Add: Exceptional losses 73 19
Loss/(gain) on disposal of property, plant and equipment 3 (1)
Settlement fee received net of expenses on termination of tenant leases (21) -
Settlement fee received on termination of management contract - (33)
Impairment of financial instruments, net of recoveries 2 4
Pre-opening expenses - 6
Transaction costs 9 6
Impairment of property, plant and equipment 16 9
Restructuring costs 58 12
Impairment of goodwill - 16
Fair value loss on revaluation of previously held interest in associate 6 -
Ebitdar 8 4 214 3 886
(2) Restated for changes in accounting policies - refer note 2
(3) The measure excludes the effects of long-term incentives, non-recurring expenditure,
headline adjustments including impairments and fair value adjustments on non-current assets and
liabilities and other exceptional items.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March 2014 2013
Reviewed Restated(1)
Rm Rm
Cash flows from operating activities
Profit before interest and income tax 3 122 2 832
Non-cash movements 1 139 1 154(2)
Increase in working capital (497) (180)(2)
Cash generated from operations 3 764 3 806
Interest received 20 46
Finance costs paid (396) (445)
3 388 3 407
Income tax paid (756) (842)
Dividends paid to shareholders (878) (702)
Dividends paid to non-controlling interests (19) (42)
Dividends received 3 3
Net cash generated from operations 1 738 1 824
Cash flows from investment activities
Purchase of property, plant and equipment (1 337) (960)(2)
Proceeds from disposals of property, plant and equipment 11 6
Purchase of intangible assets (37) (47)
Purchase of investment property (45) (7)
Acquisition of subsidiaries, net of cash acquired (507) -
Acquisition of business (67) (20)
Acquisition of associate (6) -
Advance payment on acquisition of casino licence - (116)
Advance payment for business acquisition - (65)
Other loans and investments repaid (18) 1
Net cash utilised for investment activities (2 006) (1 208)
Cash flows from financing activities
Borrowings raised 2 407 782
Borrowings repaid (797) (2 079)
Acquisition of non-controlling interests (419) -
Settlement of contingent consideration for Millennium acquisition - (58)
Loan repayments to non-controlling interests - (3)
Decrease in amounts due by share scheme participants 6 3
Net cash generated from/(utilised in) financing activities 1 197 (1 355)
Net increase/(decrease) in cash and cash equivalents 929 (739)
Cash and cash equivalents at beginning of year 750 1 443
Foreign currency translation 36 46
Cash and cash equivalents at end of year 1 715 750
(1) Restated for changes in accounting policies - refer note 2
(2) Non-cash movements, increase in working capital and purchase of property, plant and equipment in
the 2013 cash flow were previously reported as R1 131 million, R216 million and R903 million respectively
CONDENSED CONSOLIDATED BALANCE SHEET
as at 31 March 2014 2013 2012
Reviewed Restated(1) Restated(1)
Rm Rm Rm
ASSETS
Non-current assets
Property, plant and equipment 10 939 9 123(2) 8 670
Investment property 102 7 -
Goodwill and other intangible assets 6 467 6 330 6 342
Investments in associates and joint ventures 149 171 170
Non-current receivables 64 49 54
Derivative financial instruments 67 - -
Deferred income tax assets 120 179 114
Amounts due by share scheme participants 27 30 19
17 935 15 889 15 369
Current assets
Inventories 103 85(2) 74
Trade and other receivables 524 633 407
Current income tax assets 137 73 82
Cash and cash equivalents 1 715 750 1 443
2 479 1 541 2 006
Total assets 20 414 17 430 17 375
EQUITY
Capital and reserves attributable to equity holders
of the company
Ordinary share capital and premium 4 771 4 768 4 754
Share-based payment reserve 3 3 3
Surplus arising on change in control in joint venture 130 130 130
Other reserves (114) (583) (230)
Retained earnings 5 000 3 997 3 071
Total shareholders’ equity 9 790 8 315 7 728
Non-controlling interests 732 807 727
Total equity 10 522 9 122 8 455
LIABILITIES
Non-current liabilities
Interest-bearing borrowings 5 062 3 386 4 245
Derivative financial instruments - 45 9
Deferred income tax liabilities 1 603 1 449 1 520
Provisions and other liabilities 493 503(3) 438
7 158 5 383 6 212
Current liabilities
Interest-bearing borrowings 1 092 944 1 382
Derivative financial instruments 19 37 38
Trade and other payables 1 044 984 958
Provisions and other liabilities 525 921 269
Current income tax liabilities 54 39 61
2 734 2 925 2 708
Total liabilities 9 892 8 308 8 920
Total equity and liabilities 20 414 17 430 17 375
(1) Restated for changes in accounting policies - refer note 2
(2) The amount of property, plant and equipment and inventory was previously reported in 2013 balance sheet as R9 004 million
and R204 million respectively
(3) The amount of the post retirement benefit for 2013 was previously reported as R23 million and has been restated to R13 million,
included in provisions and other liabilities
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of the company
Ordinary share Share-based Surplus arising Other Retained Total
capital and payment on change reserves earnings Rm
premium reserve in control in Rm Rm
Rm Rm joint venture
Rm
Balance at 31 March 2012 as previously reported 4 754 3 130 (230) 3 063 7 720
Recognition of net interest and service costs as well as - - - - 8 8
remeasurements of actuarial gains and losses due to
amendments to IAS 19 Employee Benefits
Balance at 31 March 2012 (restated)(1) 4 754 3 130 (230) 3 071 7 728
Total comprehensive income - - - 47 1 628 1 675
Profit for the year - - - - 1 627 1 627
Other comprehensive income - - - 47 1 48
Shares issued to share scheme participants 15 - - - - 15
Share options lapsed (1) - - - - (1)
Obligation for subsidiary share buyback scheme - - - (400) - (400)
Repayment of non-controlling interests' equity loans - - - - - -
Ordinary dividends - - - - (702) (702)
Balance at 31 March 2013 (restated) (1) 4 768 3 130 (583) 3 997(2) 8 315
Total comprehensive income - - - 178 1 881 2 059
Profit for the year - - - - 1 877 1 877
Other comprehensive income - - - 178 4 182
Shares issued to share scheme participants 4 - - - - 4
Share options lapsed (1) - - - - (1)
Non-controlling interests arising on business combinations - - - - - -
Transactions with non-controlling interests - - - 291 - 291
Ordinary dividends - - - - (878) (878)
Balance at 31 March 2014 (reviewed) 4 771 3 130 (114) 5 000 9 790
(1) Restated for changes in accounting policies - refer note 2
(2) The amount of retained earnings in the statement of changes in equity for 2013 was previously reported as R3 990 million
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
Non- Total
controlling equity
interests Rm
Rm
Balance at 31 March 2012 as previously reported 727 8 447
Recognition of net interest and service costs as well as - 8
remeasurements of actuarial gains and losses due to amendments
to IAS 19 Employee Benefits
Balance at 31 March 2012 (restated)(1) 727 8 455
Total comprehensive income 125 1 800
Profit for the year 125 1 752
Other comprehensive income - 48
Shares issued to share scheme participants - 15
Share options lapsed - (1)
Obligation for subsidiary share buyback scheme - (400)
Repayment of non-controlling interests' equity loans (3) (3)
Ordinary dividends (42) (744)
Balance at 31 March 2013 (restated) (1) 807 9 122
Total comprehensive income 96 2 155
Profit for the year 96 1 973
Other comprehensive income - 182
Shares issued to share scheme participants - 4
Share options lapsed - (1)
Non-controlling interests arising on business combinations 163 163
Transactions with non-controlling interests (315) (24)
Ordinary dividends (19) (897)
Balance at 31 March 2014 (reviewed) 732 10 522
(1) Restated for changes in accounting policies - refer note 2
(2) The amount of retained earnings in the statement of changes in equity for 2013 was previously reported as R3 990 million
SEGMENTAL ANALYSIS
for the year ended 31 March
Income(1) Ebitdar(2) Ebitdar margin Amortisation and
depreciation
2014 2013 2014 2013 2014 2013 2014 2013
Rm Rm Rm Restated(3) % Restated(3) Rm Rm
Rm %
Montecasino 2 415 2 266 1 088 1 026 45.1 45.3 95 83
Suncoast 1 517 1 440 717 692 47.2 48.1 104 102
Gold Reef City 1 298 1 218 514 479 39.6 39.3 65 74
Silverstar 648 602 263 237 40.6 39.4 39 49
The Ridge 400 387 186 187 46.5 48.3 25 26
Hemingways 336 303 138 125 41.1 41.3 45 22
Emnotweni 328 319 144 147 44.0 46.1 15 14
Golden Horse 318 303 146 150 46.1 49.5 34 30
Garden Route 179 173 78 76 43.7 43.9 14 13
Goldfields 142 136 57 60 40.3 44.1 9 9
Blackrock 139 135 54 53 38.8 39.3 9 7
The Caledon 135 128 35 32 25.7 25.0 6 6
Mykonos 132 134 57 59 43.1 44.0 6 7
Other gaming operations 123 104 (196) (185) 9 11
Total gaming operations 8 110 7 648 3 281 3 138 40.5 41.0 475 453
South African hotels division(4) 2 153 1 937 737 613 34.2 31.6 151 139
Offshore hotels division 550 361 186 130 33.8 36.0 18 14
Pre-foreign exchange gains 153 93 27.8 25.8
Foreign exchange gains 33 37
Corporate(5) (46) (36) 10 5 4 2
Group 10 767 9 910 4 214 3 886 39.1 39.2 648 608
(1) All revenue and income from gaming and hotel operations is derived from external customers. No one customer contributes
more than 10% to the group’s total revenue
(2) All casino units are reported pre-internal gaming management fees
(3) Restated for changes in accounting policies - refer note 2
(4) Includes R48 million (2013: R39 million) intergroup management fees
(5) Includes the treasury and management function of the group
DIRECTORS: JA Copelyn (Chairman)* JA Mabuza (Deputy Chairman)* MN von Aulock (Chief Executive Officer) RB Huddy (Chief Financial Officer)
MJA Golding* J Davidson*† VE Mphande* JG Ngcobo** Y Shaik* RG Tomlinson (Lead Independent)** JS Wilson*† MI Wyman*†
(*Non-executive Director **Independent Director †British)
COMPANY SECRETARY: GD Tyrrell
REGISTERED OFFICE: Palazzo Towers East, Montecasino Boulevard, Fourways, 2055 (Private Bag X200, Bryanston, 2021)
TRANSFER SECRETARIES: Link Market Services South Africa Proprietary Limited, 13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein, 2001
(PO Box 4844, Johannesburg, 2000)
SPONSOR: Deutsche Securities (SA) Proprietary Limited, 3 Exchange Square, 87 Maude Street, Sandton, 2196
(Private Bag X9933, Sandton, 2146)
www.tsogosun.com
Date: 22/05/2014 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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