Wrap Text
Unaudited Condensed Consolidated Results for the six months ended 30 September 2014
HOSKEN CONSOLIDATED INVESTMENTS LIMITED
Incorporated in the Republic of South Africa
Registration number: 1973/007111/06
Share code: HCI
ISIN: ZAE000003257
("HCI" or "the company" or "the group")
UNAUDITED CONDENSED CONSOLIDATED RESULTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
30 Sep 2014 30 Sep 2013* 31 Mar 2014
R'000 R'000 R'000
ASSETS
Non-current assets 38 089 516 16 576 576 16 851 858
Property, plant and equipment 16 931 496 4 153 234 3 735 578
Investment properties 2 123 455 1 274 855 1 695 532
Goodwill 11 940 199 272 200 279 011
Interest in associates and joint ventures 1 294 880 9 582 535 9 974 196
Other financial assets 67 120 62 657 9 163
Intangibles 5 158 461 1 042 752 806 887
Deferred taxation 287 347 79 138 127 941
Operating lease equalisation asset 29 921 8 276 27 185
Long-term receivables 256 637 100 929 196 365
Current assets 7 028 151 5 219 481 4 935 432
Other 5 319 587 4 321 525 3 746 752
Bank balances and deposits 1 708 564 897 956 1 188 680
Non-current assets held for sale 1 120 270 2 067 1 006 446
Total assets 46 237 937 21 798 124 22 793 736
EQUITY AND LIABILITIES
Equity 22 967 168 14 403 341 14 930 161
Equity attributable to equity holders
of the parent 15 193 516 11 310 566 12 094 478
Non-controlling interest 7 773 652 3 092 775 2 835 683
Non-current liabilities 15 144 713 3 517 595 3 407 985
Deferred taxation 2 109 482 249 628 277 439
Long-term borrowings 11 843 786 2 988 230 2 917 689
Operating lease equalisation liability 287 419 2 675 3 596
Other 904 026 277 062 209 261
Current liabilities 7 996 834 3 877 121 4 336 792
Non-current liabilities held for sale 129 222 67 118 798
Total equity and liabilities 46 237 937 21 798 124 22 793 736
Net asset carrying value per share (cents) 14 400 10 637 11 391
* Restated.
CONDENSED CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
% 30 Sep 2014 30 Sep 2013* 31 Mar 2014
change R'000 R'000 R'000
Revenue 4 956 877 4 029 689 8 382 905
Net gaming win 1 037 069 396 988 818 421
Income 35.4 5 993 946 4 426 677 9 201 326
Expenses (4 886 938) (3 553 961) (7 588 450)
EBITDA 26.8 1 107 008 872 716 1 612 876
Depreciation and amortisation (312 366) (213 309) (407 177)
Operating profit 794 642 659 407 1 205 699
Investment income 28 822 23 230 48 806
Finance costs (215 842) (92 426) (248 621)
Share of profits of associates
and joint ventures 251 520 278 693 748 228
Profit on deemed disposal of associate
on obtaining control 2 757 227 - -
Fair value adjustments of
investment properties - - 23 284
Impairment reversals - - 509
Asset impairments (32 762) (1 824) (12 489)
Fair value adjustments of financial
instruments 7 085 996 21 010
Impairment of goodwill and investments - - (329)
Profit before taxation 313.6 3 590 692 868 076 1 786 097
Taxation (224 762) (166 741) (306 259)
Profit for the period from continuing
operations 3 365 930 701 335 1 479 838
Discontinued operations (14 740) (66 038) (214 141)
Profit for the period 3 351 190 635 297 1 265 697
Attributable to:
Equity holders of the parent 3 121 283 540 430 1 060 455
Non-controlling interest 229 907 94 867 205 242
3 351 190 635 297 1 265 697
* Restated.
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
Unaudited Unaudited Audited
30 Sep 2014 30 Sep 2013* 31 Mar 2014
R'000 R'000 R'000
Profit for the period 3 351 190 635 297 1 265 697
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss
Foreign currency translation differences 139 380 84 564 200 412
Cash flow hedge reserve (8 204) 26 666 38 201
Items that may not be reclassified subsequently
to profit or loss
Actuarial gains on post-employment benefit
liability - - 5 773
Total comprehensive income 3 482 366 746 527 1 510 083
Attributable to:
Equity holders of the company 3 234 529 650 777 1 300 005
Non-controlling interest 247 837 95 750 210 078
3 482 366 746 527 1 510 083
* Restated.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
30 Sep 2014 30 Sep 2013* 31 Mar 2014
R'000 R'000 R'000
Balance at beginning of period 14 930 161 15 432 755 15 432 755
Share capital and premium
Shares issued 25 219 - -
Treasury shares released 4 251 39 314 45 779
Shares repurchased (118 811) (272 899) (457 443)
Current operations
Total comprehensive income 3 482 366 746 527 1 510 083
Equity-settled share-based payments 5 703 8 061 16 170
Non-controlling interest on acquisition
of subsidiaries 4 238 727 - 3 359
Effects of changes in holding 569 613 (1 394 482) (1 347 440)
Dividends (170 061) (155 935) (273 102)
Balance at end of period 22 967 168 14 403 341 14 930 161
* Restated.
RECONCILIATION OF HEADLINE EARNINGS
Unaudited six months Unaudited six months Audited year
ended 30 Sep 2014 ended 30 Sep 2013* ended 31 Mar 2014
% Gross Net Gross Net Gross Net
change R'000 R'000 R'000 R'000 R'000 R'000
Earnings attributable to equity
holders of the parent 477.6 3 121 283 540 430 1 060 455
IAS 16 gains on disposal of plant
and equipment (2 698) (885) (4 737) (3 256) 23 556 17 695
IAS 16 impairment of plant and equipment 5 911 1 746 1 824 712 6 563 2 265
IAS 38 impairment of intangible assets - - - - 4 617 3 396
IFRS 3 profit on deemed disposal of
associate on obtaining control (2 757 227) (2 745 038) - - - -
IFRS 3 impairment of goodwill - - - - 329 172
IAS 28 impairment of associates and
joint ventures 26 851 21 431 - - 5 925 4 823
IAS 36 reversal of impairments - - - - (509) (203)
IAS 38 losses on disposal of
intangible assets - - - - 107 43
IAS 40 fair value adjustment to
investment property - - - - (23 284) (17 418)
Remeasurements included in
equity-accounted earnings of
associates and joint ventures 308 276 54 114 38 227 31 101 14 926
Headline profit (30.8) 398 813 576 113 1 086 154
Basic earnings per share (cents)
Earnings 568.1 2 945.33 440.83 923.84
Continuing operations 2 959.24 494.70 1 084.36
Discontinued operations (13.91) (53.87) (160.52)
Headline earnings (19.9) 376.33 469.94 946.23
Continuing operations 390.24 523.81 1 083.73
Discontinued operations (13.91) (53.87) (137.51)
Weighted average number of shares
in issue ('000) 105 974 122 593 114 788
Actual number of share in issue
at end of year (net of treasury
shares) ('000) 105 510 107 387 106 177
Diluted earnings per share (cents)
Earnings 567.5 2 896.86 433.98 908.62
Continuing operations 2 910.54 487.01 1 066.50
Discontinued operations (13.68) (53.03) (157.88)
Headline earnings (20.0) 370.14 462.63 930.64
Continuing operations 383.82 515.66 1 065.88
Discontinued operations (13.68) (53.03) (135.24)
Diluted weighted average number of
shares in issue ('000) 107 747 124 529 116 710
* Restated.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
30 Sep 2014 30 Sep 2013 31 Mar 2014
R'000 R'000 R'000
Cash flows from operating activities (449 442) 44 493 1 045 692
Cash flows from investing activities (654 873) (430 312) (1 240 277)
Cash flows from financing activities 1 043 688 79 968 430 598
(Decrease)/increase in cash and
cash equivalents (60 627) (305 851) 236 013
Cash and cash equivalents
At beginning of period 574 386 311 762 311 762
Foreign exchange differences 16 695 9 063 26 611
At end of period 530 454 14 974 574 386
Cash in disposal groups held for sale 113 113 - 92 614
Bank balances and deposits 1 708 564 897 956 1 188 680
Bank overdrafts (1 291 223) (882 982) (706 908)
Cash and cash equivalents 530 454 14 974 574 386
SEGMENTAL ANALYSIS
Unaudited six months Unaudited six months Audited year
ended 30 Sep 2014 ended 30 Sep 2013 ended 31 Mar 2014
Net gaming Net gaming Net gaming
Revenue win Revenue win Revenue win
R'000 R'000 R'000 R'000 R'000 R'000
Media and broadcasting 1 275 447 - 1 233 289 - 2 538 841 -
Non-casino gaming 27 928 482 811 13 642 396 988 44 770 818 421
Casino gaming and hotels 368 557 554 258 - - - -
Information technology 160 673 - 152 393 - 294 054 -
Transport 691 106 - 546 717 - 1 194 948 -
Vehicle component manufacture 166 668 - 156 727 - 300 620 -
Beverages 520 560 - 523 219 - 1 110 212 -
Properties 69 684 - 27 234 - 80 944 -
Mining 438 128 - 320 937 - 652 873 -
Branded products and
manufacturing** 1 237 376 - 1 053 099 - 2 163 518 -
Other 750 - 2 432 - 2 125 -
Total 4 956 877 1 037 069 4 029 689 396 988 8 382 905 818 421
EBITDA Unaudited Unaudited Audited
30 Sep 2014 30 Sep 2013 31 Mar 2014
R'000 R'000 R'000
Media and broadcasting 320 061 476 554 777 910
Non-casino gaming 135 111 112 852 215 835
Casino gaming and hotels 337 463 - -
Information technology 32 440 33 053 61 964
Transport 138 354 88 067 224 620
Vehicle component manufacture 12 538 7 068 15 829
Beverages 35 874 (7 010) 26 075
Properties 45 181 15 025 54 905
Mining 77 881 65 062 104 736
Branded products and manufacturing** 36 438 120 729 234 010
Other (64 333) (38 684) (103 008)
Total 1 107 008 872 716 1 612 876
Profit before tax Unaudited Unaudited Audited
30 Sep 2014 30 Sep 2013 31 Mar 2014
R'000 R'000 R'000
Media and broadcasting 214 390 390 139 620 998
Non-casino gaming 78 430 63 948 113 747
Casino gaming and hotels 3 218 613 345 118 779 791
Information technology 22 286 23 968 43 675
Transport 99 025 43 978 126 638
Vehicle component manufacture 4 863 (1 516) 1 520
Beverages 21 439 (19 369) (448)
Properties 26 272 15 201 70 226
Mining (139) 55 031 65 008
Branded products and manufacturing** 5 170 80 474 168 448
Other (99 657) (128 896) (203 506)
Total 3 590 692 868 076 1 786 097
Headline earnings Unaudited Unaudited Audited
30 Sep 2014 30 Sep 2013 31 Mar 2014
R'000 R'000 R'000
Media and broadcasting 64 973 174 118 258 816
Non-casino gaming 31 649 25 147 48 967
Casino gaming and hotels 310 052 348 800 785 062
Information technology 7 784 8 235 15 290
Transport 68 052 32 897 90 589
Vehicle component manufacture 4 707 (3 022) 17
Beverages 4 618 (4 064) 549
Properties 18 500 10 912 31 114
Mining (789) 37 016 47 482
Natural gas (15 085) (17 391) (54 055)
Branded products and manufacturing** 5 139 23 597 10 922
Other (100 787) (60 132) (148 599)
Total 398 813 576 113 1 086 154
** Segment was previously identified as "Clothing, textiles and toys".
NOTES
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The results for the six months ended 30 September 2014 have been prepared in accordance
with International Financial Reporting Standards ("IFRS"), the disclosure requirements
of IAS 34, the SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee, the requirements of the South African Companies Act, 2008, and the Listings
Requirements of the JSE Limited. The accounting policies applied by the group in the
preparation of these condensed consolidated interim financial statements are consistent
with those applied by the group in its consolidated financial statements as at and for the
year ended 31 March 2014. As required by the JSE Limited Listings Requirements, the group
reports headline earnings in accordance with Circular 2/2013: Headline Earnings as issued
by the South African Institute of Chartered Accountants.
These financial statements were prepared under the supervision of the financial director,
Mr TG Govender, B.Compt (Hons).
RESTATEMENT OF PRIOR PERIOD RESULTS
The acquisition of controlling interests in KWV Holdings Limited ("KWV"), effective
1 January 2013 and Sunshine Coast Broadcasters Proprietary Limited ("SCB"), effective
1 March 2013, qualified as business combinations in terms of IFRS 3: Business Combinations.
The results as at 30 September 2013 were determined based on all information available at
the acquisition date ("provisional accounting"). The provisional accounting was adjusted
in the year ended 31 March 2014 for new information obtained within a time frame of
12 months after the acquisition date. These adjustments to the fair value determined in
the provisional purchase price allocations were treated as adjustments to the comparative
results as at 30 September 2013.
In respect of the acquisition of KWV the comparative results were restated as follows:
Income statement:
Depreciation and amortisation increased by R1.5 million
Taxation decreased by R0.5 million
Earnings attributable to non-controlling interest decreased by R0.5 million
Statement of financial position:
Property, plant and equipment increased by R439 million
Intangible assets increased by R48 million
Deferred tax liability increased by R77 million
Equity attributable to equity holders of the parent increased by R112 million
Equity attributable to non-controlling interest increased by R299 million
In respect of the acquisition of SCB the comparative results were restated as follows:
Statement of financial position:
Property, plant and equipment decreased by R1 million
Goodwill increased by R62 million
Intangible assets decreased by R61 million
The income statement in the prior period and opening equity attributable to equity holders
of the parent in the current period were not affected.
In addition to the above, KWV changed their accounting policy in the year ended
31 March 2014 to include excise duty in the valuation of inventory. Comparative results
were restated as follows:
Statement of financial position:
Inventory increased by R118 million
Trade and other receivables decreased by R118 million
Income statement:
Revenue increased by R93 million
Expenses increased by R93 million
Opening equity attributable to equity holders of the parent in the current period was
not affected.
BUSINESS COMBINATIONS
Casino gaming and hotels
During August 2014 Tsogo Sun Holdings Limited ("Tsogo Sun") repurchased 134 million of its
issued ordinary shares from SABSA Holdings Proprietary Limited, a subsidiary of
SABMiller plc. As a result of this the group's effective interest in Tsogo Sun increased
to 47.6%. SABMiller furthermore sold its remaining 302 million shares through a preferred
bidding process.
It was determined that, in terms of IFRS, the group acquired effective control over the
business of Tsogo Sun after the sale of shares by SABMiller and that it would be
appropriate to consolidate the results of Tsogo Sun with effect from the repurchase date
of 25 August 2014, whereas it had been equity accounted prior to that.
The details of the net assets acquired on the above business combination, for which the
purchase price has been allocated to the respective assets and liabilities on a
provisional basis, is as follows:
R'000
Non-current assets 19 888 064
Current assets 1 359 717
Non-current liabilities (11 140 538)
Current liabilities (3 230 990)
Net assets acquired 6 876 253
Non-controlling interest (4 241 146)
Goodwill 9 541 450
Interest held prior to acquisition at fair value (12 176 557)
Purchase consideration -
Cash balances acquired (635 300)
Net cash received (635 300)
The acquired business contributed revenue of R369 million, net gaming win of
R554 million and profit before tax of R159 million to the Group since the acquisition
date. Had the acquisition been effective on 1 April 2014, the contribution to revenue
would have been R2 015 million, net gaming win R3 428 million and profit after tax
R743 million. This profit after tax does not include equity earnings of R236 million
which was recognised in respect of Tsogo Sun for the five months ended 31 August 2014.
The initial accounting is not yet complete due to the proximity of the acquisition to
the reporting date. It is expected that there would be upward adjustments to non-current
assets, relating to the fair value of the properties and the intangible assets acquired
in the business combination. This process will be completed within the 12 months as
allowed by IFRS 3.
DISCONTINUED OPERATIONS AND DISPOSAL GROUPS HELD FOR SALE
Following the group's announcement during March 2014 that it will unbundle and list
its natural gas interests, the results of these operations have been reclassified to
discontinued operations in the income statement and its assets and liabilities
reclassified to disposal groups held for sale in the statement of financial position.
The majority of the clothing divisions of the group's branded products and manufacturing
operations were sold subsequent to the prior period reporting date. Consequently, the
results of these divisions were reclassified to discontinued operations.
Discontinued operations in the current and prior periods consist of the above-mentioned
operations.
The disposal groups held for sale, as disclosed in the statement of financial position,
relate to the assets and liabilities of the group's natural gas operations.
RESULTS
GROUP INCOME STATEMENT
The group income statement contains five months of equity-accounted earnings from
Tsogo Sun and one month consolidated earnings due to the "acquisition" of this entity
effective end of August 2014.
Revenue, including net gaming win, increased by 35%. Although this is somewhat skewed
by the consolidation of Tsogo Sun's revenue for the month of September 2014, other
contributors to this increase were non-casino gaming (up 22%), transport (up 26%),
branded products and manufacturing (up 18%) and mining (up 37%). The steady growth in
machine and site roll-out in the limited payout business and bingo operations increased
non-casino net gaming win significantly. Transport recorded higher passenger revenue
from single and multi ride when compared to the prior period, which was also affected
by a four-week transport strike. The Mbali colliery became operational in the second half
of the previous financial year and now contributed to mining revenue for a full six months.
Properties' revenue increased significantly due to additional revenue from new properties
in Upington, Pretoria and Cape Town. Revenue in respect of media and broadcasting
increased marginally by 3% mainly due to increases in subscription revenue and content
sales in Sabido Investments whilst advertising revenue in respect of e.tv remained relatively
unchanged. This business was negatively affected by a difficult trading environment and
the aggressive local programming investment by its competitors.
EBITDA for the group increased by 27%. EBITDA from media and broadcasting decreased by
33% mainly due to the cost of the e.tv multi-channel business as well as Platco, which
both had limited costs in the prior comparable period owing to their October launch.
EBITDA from non-casino gaming increased 20% with gains in its limited payout operations
funding the expansionary spend in its bingo operations. Casino gaming and hotels is not
comparable due to its inclusion for one month in the current period. The continued
improvement in efficiencies from controlled employment and overhead expenditure in GABS
contributed to a 57% increase in EBITDA when compared to the prior period, which was
significantly affected by the transport strike. Beverages' EBITDA increased by R44 million as
a result of the continuing turnaround at KWV and a reduction in foreign exchange hedging
losses in the current period. Mining EBITDA increased by 20% to R78 million with the Mbali
colliery contributing R24 million. Branded products and manufacturing's EBITDA from continuing
operations decreased due to difficult trading conditions in the manufacturing businesses
exacerbated by the extended industrial action at our customer and supplier bases and
compounded by shorter industrial action in one of our own businesses. The prior year
also included proceeds of R39 million relating to the Searll family settlement.
Profit before tax increased significantly due to the large fair value gain on associates
arising from the accounting treatment of the group's increased interest in Tsogo Sun
following the SABMiller share repurchase. IFRS requires that a deemed disposal of the
group's investment in associate be recognised prior to the acquisition/consolidation
of Tsogo Sun. This resulted in a fair value gain of R2 757 million. Profit before tax
from casino gaming and hotels before this adjustment amounted to R462 million, which
is not comparable to the prior period as this includes one month's consolidated results.
Transport profit increased significantly for the reasons stated above, aided by finance
costs and depreciation decreasing marginally from the prior period. Properties' increase
of 73% relates to additional profits from new developments. Profits relating to mining
decreased by R55 million, substantially due to previously capitalised box cut expenditure
in the amount of R43 million at the Mbali colliery being depreciated, with no such charge
in the prior period. Other profit before tax increased mainly due to R57 million in losses
accruing from Baycorp Holdings in the prior period reversing to a R6 million profit. Media
and broadcasting profit before tax includes an impairment of The Africa Channel joint
venture by R27 million.
Discontinued operations' losses decreased by R51 million and relate mainly to the group's
natural gas operations in the current period. Losses of R15 million from the natural gas
operations represent a reduction of R1 million from the prior period. This is mainly due
to a more favourable natural gas price during the current period being mostly off-set by
reduced hedging gains and production issues at an electricity generation site in April
and May. Prior period losses of R50 million relate to certain clothing divisions of the
group's branded products and manufacturing operations that were sold subsequent to the
prior period reporting date.
Headline earnings decreased by 31%. Media and broadcasting reported a decrease of 63%
in headline earnings, impacted by the multi-channel and Platco expansionary spend in
Sabido Investments. Casino gaming and hotels showed a decrease of 11% in its headline
earnings contribution. Included in Tsogo Sun's contribution to the group's headline
earnings is an effective R49 million portion relating to the share-based payment expense
in respect of the facility granted to senior management to acquire shares in that
company. The results of Tsogo Sun were equity accounted at 41.5% for the five months
ending August 2014 and consolidated at an effective 48% for the month of September 2014.
Information technology's decrease is mainly attributable to lower new business activity
and lower margins achieved on its JMPD contract. Other includes R55 million HCI head
office finance costs and R42 million in HCI and Niveus head office costs.
Notable items on the income statement include:
Finance costs increased in media and broadcasting by R12 million, R5 million of which
accrued to SACTWU; properties by R22 million and head office by R18 million. A further
R68 million arose on the consolidation of Tsogo Sun.
Profit from associates and joint ventures is not comparable to the prior year due to
Tsogo Sun being consolidated from September. The amount includes R236 million from
Tsogo Sun, with R345 million recorded in the prior period. Fair value adjustments on
financial instruments consist mainly of unrealised gains on forward exchange contracts.
Taxation increased substantially as a result of the consolidation of Tsogo Sun.
Headline earnings per share decreased by 20% with headline earnings decreasing by 31%.
The discrepancy can be attributed to the weighted average number of shares in issue in
the prior period of 122 593 000 being reduced to 105 974 000 in the current period as a
result of 17.7 million shares being repurchased during the 2014 financial year.
Group statement of financial position and cash flow
The group's overall financial position remains strong, with the major businesses still
generating strong cash flows.
The statement of financial position changed significantly with the consolidation of
Tsogo Sun in its results at the end of August 2014.
Group long-term borrowings at 31 March 2014 comprise central borrowings of R1 442 million,
investment property-related borrowings of R776 million, borrowings in Tsogo Sun of
R8 525 million and R1 093 million in other operating subsidiaries. Included in current
liabilities is R1 239 million owing to SACTWU, being part of their proportionate
non-controlling share in Seardel and following their indirect paticipation in Seardel's
recent rights issue.
0.7 million shares in the company, to the value of R119 million, were repurchased during
the current period.
Cash flow from operating activities contain expenditure of R127 million on programme rights
and an increase of R209 million in trade receivables in the toys division of branded products
and manufacturing ahead of the festive season. The group invested R710 million in property,
plant and equipment and R328 million in investment properties. Also included in cash flow from
investing activities is the dividend of R273 million received from Tsogo Sun Holdings.
Borrowings of R144 million was raised in respect of investment property developments and
R244 million by casino gaming and hotel operations.
Shareholders are referred to the individually published results of Seardel Investment
Corporation Limited, Tsogo Sun Holdings Limited and Niveus Investments Limited for further
commentary on the media and broadcasting; branded products and manufacturing; casino gaming
and hotels; non-casino gaming; and beverages operations.
COMMENTARY
The past six months have been a difficult period for the group. Marcel Golding, who has
been the group's executive chairperson for the last 17 years, resigned from the group
in strained circumstances. It is also the first period in a long time that our main
media interest, Sabido Investments, recorded only marginal increases in revenue in etv.
Likewise, Tsogo Sun had a far lower growth rate for revenue over the previous period than
we have seen in a long time.
Nevertheless, the group has continued to see a lot of progress.
We obtained three additional bingo licences in the Eastern Cape and Vukani was awarded an
additional limited payout operator's licence for the Northern Cape, this province being the
last region to finally award such licences. Disappointingly, these awards are caught up in
delays by various challenges of others who are aggrieved and there will be delays in their
implementation as a result. Your directors remain confident that these awards will nevertheless
become operational in the fullness of time and are valuable additions to the subsidiaries
concerned.
Physical developments across the group have continued with the doubling of capacity of the
Southern Sun Maputo hotel being completed on schedule and the extensive improvements to
Tsogo Sun's Silverstar casino having been completed, with similar major renovations of the
Gold Reef casino in progress. Likewise, The Point development in Sea Point has been
completed and the construction of phase one of the office park at Monte Circle has commenced.
Newly commenced developments are also the conversion of the former Rand Daily Mail offices
into inner city residential accommodation in the centre of Johannesburg and the building of
a greenfield shopping centre development at Blue Hills in Midrand. Niveus is on track to
complete the physical development of its casino at Kuruman and hope to have it open by the
end of the calendar year.
Long-standing difficulties in securing development rights at several properties have also
been resolved in this last period, opening the way for further planned developments. First
among these are that the regulatory difficulties to the extension of Tsogo Sun's complex at
Suncoast have finally been resolved. This proposed development will virtually double its
size as well as include the development of a new retail complex. We have also finally managed
to secure our right to develop property, admittedly in a far smaller development, next to
the Steenberg estate in Cape Town after a lengthy period.
HCI Coal has managed to procure its mining right at the Nokuhle property after many years
and significant production improvements were implemented at the recently commissioned
Mbali colliery during September.
Golden Arrow Bus Services managed to conclude a contract to operate the new Khayelitsha
Express service and remains well positioned to negotiate a long-term agreement for its
main services in line with the MOU signed with both the City and the region.
While we have yet to finally unbundle our stake in Montauk and Seardel's interest in its
non-media assets into separate listings, both of these events are now imminent and
formalities in relation to both these events should be complete by calendar year-end.
The group is well positioned in relation to energy opportunities, both in the renewable
energy space where we hope to participate in a concentrated solar energy development
proposed for Upington and in relation to an offshore oil exploration opportunity. In
both these companies we have taken minority positions of large projects but have secured
substantial minority protection for ourselves.
Finally, previously reported turnaround work at Baycorp Holdings in Australia and at
KWV in Paarl has been progressing well and we are pleased to see the significant
improvements in both these businesses over the period.
CHANGES IN DIRECTORATE
With effect from 30 October 2014 Mr MJA Golding resigned as chairman and executive
director of the board of HCI and with effect from 27 October 2014 Ms BA Hogan resigned
as independent non-executive director of the board of HCI.
DIVIDEND TO SHAREHOLDERS
The directors of HCI have resolved to declare an interim ordinary dividend number 50 of
35 cents (gross) per HCI share for the six months ended 30 September 2014. The salient
dates for the payment of the dividend are as follows:
Last day to trade cum dividend Friday, 5 December 2014
Commence trading ex dividend Monday, 8 December 2014
Record date Friday, 12 December 2014
Payment date Monday, 15 December 2014
No share certificates may be dematerialised or rematerialised between Monday, 8 December 2014
and Friday, 12 December 2014, both dates inclusive.
In terms of legislation applicable to dividends tax ("DT") the following additional
information is disclosed:
- The local DT rate is 15%.
- The total STC credits utilised as part of this declaration, based on the number of
ordinary shares in issue at the date of this declaration, amount to Rnil.
- The number of ordinary shares in issue at the date of this declaration is 112 422 189.
- The total STC credits utilised per share amount to Nil cents per share.
- The dividend to utilise for determining the DT due is 35 cents per share.
- The DT amounts to 5.25 cents per share.
- The net local dividend amount is 29.75 cents per share for all shareholders who are
not exempt from the DT.
- Hosken Consolidated Investments Limited's income tax reference number is 9050/177/71/7.
In terms of the DT legislation, any DT amount due will be withheld and paid over to the
South African Revenue Service by a nominee company, stockbroker or Central Securities
Depository Participant (collectively "regulated intermediary") on behalf of shareholders.
All shareholders should declare their status to their regulated intermediary as they may
qualify for a reduced DT rate or exemption.
For and on behalf of the board of directors
JA Copelyn TG Govender
Chief Executive Officer Financial Director
Cape Town
20 November 2014
Directors: JA Copelyn (Chief Executive Officer), TG Govender (Financial Director),
Y Shaik, VM Engel*, LW Maasdorp*, MF Magugu*, ML Molefi*, VE Mphande**, JG Ngcobo*,
R Watson* *Non-executive; **Lead Independent Non-executive
Company secretary: HCI Managerial Services Proprietary Limited
Registered office: Suite 801, 76 Regent Road, Sea Point, Cape Town, 8005.
PO Box 5251, Cape Town, 8000
Transfer secretaries: Computershare Investor Services Proprietary Limited
70 Marshall Street, Johannesburg, 2001.
PO Box 61051, Marshalltown, 2107
Sponsor: Investec Bank Limited
www.hci.co.za
Date: 20/11/2014 01:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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