Wrap Text
Unaudited condensed consolidated interim results for the six months ended 31 January 2015 and dividend declaration
Phumelela Gaming and Leisure Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1997/016610/06)
Share code: PHM ISIN: ZAE000039269
The Group’s unaudited condensed consolidated interim financial results
for the six months ended 31 January 2015 and dividend declaration
Key features of the period
Excellent performance from fixed odds and tote betting on sports other than horseracing
Operating profit from fixed odds increased to R15 million from R7 million
High legal costs associated with combating abuse of intellectual property by certain bookmakers
and related matters
Commercial initiatives well advanced to counter new competitive dynamics affecting Isle of Man
operations
Earnings per share reduced by 4% to 65,96 cents from 68,43 cents
Headline earnings per share decreased by 3% to 65,69 cents from 67,77 cents
Headline earnings per share excluding mark to market loss on ASL (Mauritius) investment
increased by 6% to 71,80 cents
A maintained interim dividend of 28 cents declared
Results analysis
Diversification strategy paying dividends
Phumelela’s long-standing proactive strategy to innovate and diversify income streams is manifest in these
results with positive momentum building in the Group’s fixed odds business. Our meaningful investment in
retail fixed odds and tote betting shops is realising improving returns, as evidenced by a 114% rise in
fixed odds operating profit to R15 million for the period under review.
We have stepped up efforts to diversify into complementary betting offerings and grow income from
non-traditional sources. In addition, we have internationalised South African horseracing content and
betting thereon and we have further exciting geographic expansion initiatives in the pipeline.
Profit from tote betting on sports other than horseracing, limited payout machines and fixed odds is
sustaining the local operations. Net tote betting income on soccer increased by 24% to R116 million, net
fixed odds betting income on sports other than horseracing increased by 206% to R17 million and fixed odds
net betting income on numbers increased by 37% to R31 million. Net betting income from fixed odds overall
grew strongly by 39% to R75 million.
These growth percentages illustrate the degree to which Phumelela’s complementary soccer, numbers and other
sport betting offerings are finding favour with customers. This is being facilitated through the provision
of increased weekly betting opportunities via an expanding retail footprint.
Betting World ended the period with 60 retail outlets and a further 22 licence applications are pending.
The number of retail outlets has grown by 50% in less than two years.
Net betting income from local tote operations increased by 9% to R348 million, with growth driven
predominantly by sports other than horseracing as net betting income from local and imported horseracing
grew by a mere 2% to R232 million. The Group’s total net betting income grew by 13% to R423 million.
Tote betting volumes on horseracing, lost as a result of the temporary suspension of the broadcast of
international content on the Tellytrack channel last financial year, have increased markedly but have not
yet fully recovered.
Tellytrack subscriptions (included in other income) increased by 12% to R11 million. Commission received
from international totes, other than the Isle of Man Tote, betting on South African racing was up by 5%
while fees paid by offshore bookmakers’ for the rights to display South African racing was up by 14%.
The Group’s share of profits from limited payout machines installed in retail outlets grew by 20% to
R11 million. Unclaimed dividends and breakages were unchanged at R16 million. Gambling Board levies
increased by 16% to R29 million. Stable rentals were up by 4%.
The 12% increased in expenses in the local tote operations includes legal and consulting fees associated
with combating abuse of intellectual property by bookmakers and related legal matters. Operating expenses
in our fixed odds operations increased by 24%, mainly as a result of the increase in the number of retail
outlets.
Prize monies increased by 2% to R94 million in accordance with the agreement with the Racing Association.
Profit before tax from local operations amounted to R5,9 million compared with a loss of R0,4 million in
the comparative period.
In the period under review, our associate company Premier Gateway International Limited (PGI) encountered
significant competition from new entrants to the market. Margins came under pressure and PGI was
disadvantaged by contractually being required to incur currency conversions from Euro to Rand to Euro when
placing bets and back when returning winnings, while its new competitors were able to place bets and return
winnings in Euro without the unnecessary and costly currency conversions. The contract has now been amended
and PGI will in future not be required to incur the currency conversions. Share of profit from equity
accounted investees is therefore down by 39% to R19 million.
Profit from international operations increased by 24% to R38 million.
Included in international operations is a loss of R5 million on writing down the Group’s investment in
Automatic Systems Limited (ASL) to market value as a result of the share price of ASL declining during
the period.
While profit from international operations increased by 24%, the effect of the ASL mark to market loss
of R5 million and the reduction in the share of profit from PGI to R19 million resulted in overall
profit before tax from international operations decreasing by 15% to R53 million.
Group profit before finance costs, share of profit from equity accounted investees and the mark to
market loss on ASL increased by 49% to R46 million. Further excluding the legal costs incurred in
relation to the ongoing Tellytrack/bookmaker litigation, the Group profit increased by 58%.
International operations contributed 90% of Group profit before income tax expense of R59 million.
Attributable profit and earnings per share decreased by 4% to R49,7 million and 65,96 cents respectively
and headline earnings and headline earnings per share decreased by 3% to R49,5 million and 65,69 cents
respectively.
Adjusted headline earnings, excluding the mark to market remeasurement on the listed ASL investment,
increased by 6% to R54 million. Adjusted headline earnings per share on this basis is 71,80 cents.
The weighted average number of shares in issue was 0,27% lower and the number of shares in issue at
period close was 1,5% lower as a result of share repurchases in fulfilment of option scheme
obligations.
Financial position
Phumelela retains a sound financial position with total assets of R800 million. Property, plant and
equipment at carrying value is R434 million.
Cash generated before movement in working capital was R70 million compared with R56 million in the
corresponding period last year.
The Group spent R41 million buying back its owns shares to fulfil obligations in respect of shares
that may become exercisable in terms of the executive option schemes. Capital expenditure amounted
to R31 million and R30 million was applied to working capital. Bridging finance in the amount of
R20 million has been committed to the Mashonaland Turf Club and the statement of financial position
also includes a long-term secured loan to Kenilworth Racing.
Dividends received from PGI amounted to R27 million.
The Group has moved from a net cash position of R50 million in the comparative period to net debt
of R7 million. There are adequate banking facilities and reserve borrowing capacity. The Group has
secured adequate credit facilities.
The Group’s net asset value per share increased to 595,91 cents.
Share capital
There was no movement in authorised share capital during the period. In order to fulfil obligations
in respect of shares exercisable per the executive option schemes, the Company repurchased
2 200 372 shares. 1 052 266 shares were issued in terms of the executive share option scheme.
Investment
In December 2014 the Group concluded an agreement to acquire a strategic stake in Uptonvale Services
(Pty) Limited, a company that owns a bookmaking concern named Interbet. The agreement is subject to
certain conditions precedent that include, inter alia, approval by the Western Cape Gambling and
Racing Board.
Condensed consolidated segmental analysis
The Group stages horseracing events and offers betting opportunities on both South African and
international product in two geographic segments, namely South Africa and the rest of the world. The
reporting segments are set out as local and international operations with local further segmented into
fixed odds and tote and other operations.
CONDENSED SEGMENTAL ANALYSIS
% Unaudited Unaudited Audited
change 6 months 6 months 12 months
31 Jan 31 Jan 31 Jul
2015 2014 2014
R’000 R’000 R’000
Local - excluding fixed odds
Income 15 471 706 410 723 831 567
Net betting income 9 348 151 320 260 632 592
- Horseracing 2 231 905 226 529 443 746
- Other sports 24 116 246 93 731 188 846
Other income 9 104 430 95 788 184 849
Investment income 537 1 184 186 999
Net income 9 453 765 416 234 818 440
Stakes 2 (93 971) (92 110) (186 299)
Operating expenses 12 (349 742) (311 497) (625 009)
Profit before depreciation and amortisation (20) 10 052 12 627 7 132
Depreciation and amortisation (10) (17 885) (19 891) (28 039)
Profit before finance costs and income tax expense 8 (7 833) (7 264) (20 907)
Finance costs 701 (1 602) (200) (626)
Loss from operations 26 (9 435) (7 464) (21 533)
Share of profit of equity accounted investee 695 474
Loss before income tax expense 17 (8 740) (7 464) (21 059)
Local - fixed odds
Income 40 89 418 63 810 135 840
Net betting income 39 74 594 53 611 113 999
- Horseracing 5 26 674 25 478 45 720
- Other sports 206 16 954 5 547 19 503
- Other 37 30 966 22 586 48 776
Other income 12 7 901 7 040 10 572
Investment income (100) 84 229
Net income 36 82 495 60 735 124 800
Operating expenses 24 (61 022) (49 063) (104 632)
Profit before depreciation and amortisation 84 21 473 11 672 20 168
Depreciation and amortisation 38 (6 313) (4 580) (11 198)
Profit before finance costs and income tax expense 114 15 160 7 092 8 970
Finance costs (317) (14) (557)
Profit from operations 110 14 843 7 078 8 413
Share of loss of equity accounted investee (217)
Profit before income tax expense 107 14 626 7 078 8 413
% Unaudited Unaudited Audited
change 6 months 6 months 12 months
31 Jan 31 Jan 31 Jul
2015 2014 2014
R’000 R’000 R’000
International
Income (12) 98 550 112 095 224 702
Other income (7) 104 611 112 468 234 466
Investment income 1 624 362 21 109
Net income (7) 104 973 112 489 234 575
Intellectual property rights fees (23) (32 127) (41 598) (82 504)
Operating expenses (14) (34 355) (39 907) (79 643)
Profit before depreciation and amortisation 24 38 491 30 984 72 428
Depreciation and amortisation 72 (167) (97) (136)
Profit from operations 24 38 324 30 887 72 292
Profit on conversion of equity accounted
investee to investment 11 135
(Loss)/profit on remeasurement of investment (4 607) 1 478
Share of profit of equity accounted investee (39) 19 388 31 926 57 509
Profit before income tax expense (15) 53 105 62 813 142 414
Total for the Group
Income 12 659 674 586 628 1 192 109
Net betting income 13 422 745 373 871 746 591
- Horseracing 3 258 579 252 007 489 466
- Other sports 34 133 200 99 278 208 349
- Other 37 30 966 22 586 48 776
Other income 1 216 942 215 296 429 887
Investment income 431 1 546 291 1 337
Net income 9 641 233 589 458 1 177 815
Stakes 2 (93 971) (92 110) (186 299)
Intellectual property rights fees (32 127) (41 598) (82 504)
Operating expenses 11 (445 119) (400 467) (809 284)
Profit before depreciation and amortisation 27 70 016 55 283 99 728
Depreciation and amortisation (1) (24 365) (24 568) (39 373)
Profit before finance costs and income tax expense 49 45 651 30 715 60 355
Finance costs 797 (1 919) (214) (1 183)
Profit before share of equity accounted investees 43 43 732 30 501 59 172
Profit on conversion of equity accounted investee
to investment 11 135
(Loss)/profit on remeasurement of investment (4 607) 1 478
Share of profit of equity accounted investees (38) 19 866 31 926 57 983
Profit before income tax expense (6) 58 991 62 427 129 768
Capital commitments
Commitments in respect of capital expenditure approved by directors:
2015 2014
R’000 R’000
Contracted for 4 767 5 781
Not contracted for 66 505 51 328
Not contracted for commitments include R38 million to upgrade and expand the totalisator and fixed odds
retail footprint, R9 million to maintain racing operations facilities, machinery, motor vehicles and
equipment, R6 million to upgrade broadcasting equipment and R9 million to upgrade and maintain the existing
IT equipment and infrastructure.
Capital commitments will be financed out of cash and cash equivalents on hand or borrowing facilities as and
when required.
Reporting entity
Phumelela Gaming and Leisure Limited is a company domiciled in South Africa. The condensed consolidated
interim financial statements as at 31 January 2015 comprise the Company and its subsidiaries and the Group’s
interests in equity accounted investees and joint operations.
Statement of compliance and presentation
The condensed consolidated interim financial statements for the six months ended 31 January 2015 have been
prepared in accordance with IAS 34 - Interim Financial Reporting, the SAICA Financial Reporting Guides as
issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the
Financial Reporting Standards Council, the Listing Requirements of the JSE Limited and the requirements of
the South African Companies Act. The financial information does not include all the information required
for full annual financial statements and should be read in conjunction with the consolidated financial
statements of the Group as at and for the year ended 31 July 2014.
The condensed consolidated financial statements are presented in South African Rand rounded to the nearest
thousand, which is the Company’s functional and Group’s presentation currency. They are prepared on the
historical cost basis, except for certain financial instruments that are recognised at fair value.
The accounting policies applied in the presentation of the condensed consolidated financial statements
are in terms of IFRS and consistent with those applied for the year ended 31 July 2014, except for new
standards and interpretations that became effective on 1 August 2014 and deemed applicable to the Group.
The adoption of these standards and interpretations had no impact on the results for the period nor has
it required the restatement of any prior year figures. The amounts disclosed are not audited or reviewed
by the auditors, except if indicated otherwise.
The Board endorses the recommendations set out in King III and supports the Code of Corporate Practices
and Conduct set out therein.
Mr B McLoughlin CA(SA) Chief Financial Officer was responsible for supervising the preparation of this
interim report.
Subsequent events
Betting World Nigeria Limited (BWN) which is 26% owned by Betting World, incurred losses during the
six-month period ended 31 January 2015. These losses continued beyond the end of January and the Company
approached shareholders for additional funding. Shareholders in BWN have to date not been able to agree
to provide their proportionate share of the funding and accordingly BWN ceased trading on 13 March 2015.
Shareholders of BWN are exploring various alternatives, including providing additional funding, sale or
closure of the business. The Group’s exposure to BWN, comprising investment in and monies owed by, amount
to approximately R11 million.
Other than reported above, there are no significant subsequent events that have an impact on the
financial information at 31 January 2015.
Corporate interests
The Competition Commission complaint lodged by Ms Phindi Kema and Africa Race Group (Pty) Limited
referred by the complainant to the Competition Tribunal (the Tribunal) was withdrawn on 15 October
2014.
On 16 October 2014 the Tribunal handed down an order awarding costs and party costs to Phumelela.
Phumelela is a respondent in two consolidated complaints lodged by the Gauteng Off-Course Bookmakers’
Association and various individual bookmakers with the Competition Commission during 2014 regarding,
inter alia, alleged excessive pricing and abuse of a dominant position. The complaints are being
investigated by the Competition Commission and Phumelela has submitted extensive information and
documents to the Competition Commission to assist it with its investigation. Phumelela is a respondent
in a complaint lodged by the KwaZulu-Natal Bookmakers’ Society (KZNBS) with the Competition Commission
on 3 March 2015. The Competition Commission is yet to approach Phumelela or its representatives regarding
this complaint. Phumelela has lodged a counter complaint with the Competition Commission in relation to
certain bookmakers having engaged in a concerted practice by cooperating with one another regarding the
determination of a uniform price at which they will agree to receive the Tellytrack service. The conduct
of these bookmakers constitutes the fixing of a purchase price in contravention of the Competition Act.
On 4 March 2015 the KZNBS lodged a complaint with the Independent Communications Authority of South
Africa (ICASA) against Tellytrack, Phumelela, Gold Circle and Kenilworth Racing for contraventions of
the Electronic Communications Act pertaining to the provision of commercial broadcast services without
the correct licences.
The complaints are being investigated by ICASA and the parties are assisting with its investigation.
On 6 September 2013 Phumelela, in terms of its conditions of racecourse licence, submitted an application
to the Eastern Cape Gambling and Betting Board (ECGBB) to obtain approval for television signal fees to
be levied on Eastern Cape-based bookmakers in respect of horseracing events at Arlington and Fairview. The
television signal option was offered as an alternative to Tellytrack. The Gauteng Off-course Bookmakers
Association (GOBA) requested the ECGBB to urgently investigate and take steps to ensure that the televised
broadcasting of horserace events from Arlington and Fairview continue to be received by GOBA. On
7 April 2015 the ECGBB resolved that:
• it is empowered in terms of Phumelela’s racecourse licence conditions, read with the Act to regulate or
approve those signal fees which pertain to horseracing events taking place in the Eastern Cape televised
to bookmakers which are licensed by the Board (i.e. the Board’s jurisdiction);
• the signal fees proposed by Phumelela are reasonable and thus approved;
• Tellytrack is not a subsidiary of Phumelela and that its activities do not fall within the ambit of
clause 8(6) of Phumelela’s racecourse licence;
• to the extent that Tellytrack is desirous to continue to render a service to Eastern Cape bookmakers,
Tellytrack must therefore apply for a certificate of suitability in terms of and in accordance with
section 86(1) of the Act within thirty (30) calendar days of this resolution being communicated to
Phumelela and/or Tellytrack; and
• the payment by the Board to Phumelela of the 50% portion of the 6% gambling tax in respect of
horseracing events and other contingencies is prescribed by Act.
Litigation
On 9 October 2014 the Gauteng Gambling Board handed down an interim order directing Phumelela to ensure
that the status quo ante, regarding the provision of the entire Tellytrack channel to bookmakers, is
immediately restored at the price at which the Tellytrack channel was provided in 2013 together with
inflation. Phumelela instituted an application in the Gauteng High Court to review and set aside the
order made by the Gauteng Gambling Board. In the interim a limited number of bookmakers have reverted
to paying the previous fee which is being held in a trust account by the Group’s attorneys.
Phumelela is a respondent in an application in the Gauteng High Court instituted by, inter alia, the
KZNBS to enforce the order made by the Gauteng Gambling Board on 9 October 2014.
Phumelela is a defendant in an action instituted by the KZNBS in the Gauteng High Court claiming damages
from Phumelela pursuant to the alleged infringement by Phumelela of the copyright vesting in the fixed
betting odds supplied by the KZNBS distributed by the Bookmaking Odds and Distribution System (BODDS).
The outcome of the relevant actions noted above, and under Corporate interests, remains uncertain and
may have an impact on future earnings. Phumemela remains confident of a positive outcome.
Related parties
There have been no significant changes in related party relationships since the previous year.
Other than in the normal course of business, there have been no significant transactions during the period
with equity accounted investees, joint operations and other related parties.
Social responsibility
Phumelela is an AAA level 2 broad-based black economic empowerment contributor. The Company is proud to
report that its most recent verification audit (March 2015) confirmed an improved score to 91,99%, up
from 86,12% in the previous year.
The Group recognises that it has a responsibility to the broader community to act in a socially
responsible manner, for the benefit of all South Africans. Contributions to selected training, sports
and community service-related projects continue. The Group has adopted appropriate BEE and employment
equity, training and procurement policies.
Directors
There were no changes to the composition of the Board during the year under review.
Mrs Freda Moloi was appointed Company Secretary effective from 16 February 2015.
Prospects
Phumelela’s traditional business of staging horseracing and conducting tote betting thereon remains loss
making. The labour-intensive sport of horseracing, the value chain of which benefits many, including
government tax receipts, cannot be sustained if it is to be funded and regulated inequitably. In our
guidance last year, we made it quite clear that Phumelela is committed to achieving an equitable funding
dispensation that nurtures and grows this important sport. We also said that Tellytrack is determined to
take all such measures as are open to it to achieve a fair economic return and to protect its intellectual
property rights, however long it takes and irrespective of cost. The events that have unfolded during the
period under review have strengthened our resolve to do so.
While PGI continues to operate in a competitive environment, it has an exciting pipeline of new betting
opportunities that is expected to compensate for the decline in revenues and provide additional growth
opportunities. Commingling, notably into large offshore pools, offers excellent growth prospects. Phumelela
will continue to be a leading platform to punters for South African and international betting.
Our initiatives to grow complementary betting opportunities to horseracing are bearing fruit and are
providing a solid and profitable underpin to our local activities. The strategic shareholding that we have
acquired in Interbet is an exciting new development. Interbet is expected to be earnings accretive to the
Group and it dovetails very well with our diversification strategy.
Any forward looking statements of forecasts contained in these results have not been reviewed or reported
on by the Group auditors.
Cash dividend to shareholders
Notice is hereby given that the Board has declared an interim gross cash dividend from income reserves of
28 cents per share (23,80 cents per share net of dividend withholding tax at a rate of 15%) payable to
shareholders recorded in the register on Friday, 22 May 2015. The issued share capital at the declaration
date is 77 101 885 ordinary shares. Shareholders are advised that the last date to trade “cum distribution”
will be Friday, 15 May 2015. As from commencement of business on Monday, 18 May 2015 all trading in Phumelela
shares will be “ex dividend”. Payment will be made on Monday, 25 May 2015. Share certificates may not be
dematerialised or rematerialised between Monday, 18 May 2015 and Friday, 22 May 2015, both days inclusive.
The Company’s tax reference number is 9171/393/84/7.
For and on behalf of the Board
M P Malungani W A du Plessis
Chairman Chief Executive Officer
Turffontein, Johannesburg
10 April 2015
Condensed consolidated statement of comprehensive income
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Jan 31 Jan 31 Jul
% 2015 2014 2014
change R’000 R’000 R’000
Income
- Local operations 18 561 124 474 533 967 407
- International operations (12) 98 550 112 095 224 702
12 659 674 586 628 1 192 109
Gross betting income
- Local operations 13 525 921 464 606 927 253
Net betting income
- Local operations 13 422 745 373 871 746 591
Other operating income
- Local operations 9 112 331 102 828 195 421
- International operations (7) 104 611 112 468 234 466
Investment income
- Local operations 339 1 184 270 1 228
- International operations 1 624 362 21 1 587
Net income 9 641 233 589 458 1 179 293
Operating expenses and overheads
- Stakes 2 (93 971) (92 110) (186 299)
- Local operations 14 (410 764) (360 560) (729 641)
- International operations (13) (71 089) (81 505) (162 147)
Profit before finance costs, income tax, depreciation
and amortisation 18 65 409 55 283 101 206
Depreciation and amortisation (1) (24 365) (24 568) (39 373)
Profit from operations 34 41 044 30 715 61 833
Finance costs
- Local operations 797 (1 919) (214) (1 183)
Profit before share of profit of equity accounted investees 28 39 125 30 501 60 650
Profit on conversion of equity accounted investee to investment 11 135
Share of profit of equity accounted investees (38) 19 866 31 926 57 983
Profit before income tax expense (6) 58 991 62 427 129 768
Income tax expense (13) (9 261) (10 692) (19 373)
Profit for the period (4) 49 730 51 735 110 395
Other comprehensive income net of taxation
Items that may subsequently be reclassified to profit or loss
- Exchange differences on translating foreign operations (91) 262 2 793 (3 313)
Items that will never be reclassified to profit or loss
- Remeasurement of defined benefit obligation 1 223
- Tax effect (342)
Total comprehensive income for the period (8) 49 992 54 528 107 963
Profit attributable to:
Ordinary equity holders of the parent (4) 49 723 51 727 110 409
Non-controlling interest 7 8 (14)
Profit for the period (4) 49 730 51 735 110 395
Total comprehensive income attributable to:
Ordinary equity holders of the parent (8) 49 985 54 520 107 977
Non-controlling interest 7 8 (14)
Total comprehensive income for the period (8) 49 992 54 528 107 963
Earnings per ordinary share (cents)
- Basic (4) 65,96 68,43 146,07
- Diluted (4) 63,23 65,64 139,13
Supplementary statement of comprehensive income information
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Jan 31 Jan 31 Jul
2015 2014 2014
% change R’000 R’000 R’000
Reconciliation of headline earnings
Earnings attributable to equity holders of the parent (4) 49 723 51 727 110 409
Adjusted for:
Profit on conversion of equity accounted investee to investment (11 135)
Net (profit)/loss on disposal of property, plant and equipment (283) (694) 804
Tax effect 79 194 (225)
Headline earnings (3) 49 519 51 227 99 853
Headline earnings per share (cents) (3) 65,69 67,77 132,10
Diluted headline earnings per share (cents) (3) 62,97 65,01 125,83
Net asset value per share (cents) 2 595,91 585,69 633,04
Reconciliation of headline earnings to adjusted headline earnings
Headline earnings 49 519 51 227 99 853
Loss/(profit) on remeasurement of investment 4 607 (1 478)
Adjusted headline earnings 6 54 126 51 227 98 375
Adjusted headline earnings per share (cents) 6 71,80 67,77 130,15
Dividend to shareholders
Interim dividend
Dividend per ordinary share (cents) 28,00 28,00
Final dividend
Dividend per ordinary share (cents) 60,00
Number of shares in issue 74 438 486 75 586 838 75 586 838
Weighted average number of shares in issue for basic and headline
earnings per share calculation 75 380 149 75 586 838 75 586 838
Weighted average number of shares in issue for diluted earnings
per share calculation 78 641 878 78 799 418 79 356 413
Condensed consolidated statement of financial position
Unaudited Unaudited
as at as at Audited
31 Jan 31 Jan as at
2015 2014 31 Jul
R’000 R’000 2014
R’000
ASSETS
Non-current assets 536 438 540 009 567 518
Property, plant and equipment 426 342 407 994 426 712
Goodwill 12 362 12 362 12 362
Intangible assets 48 944 48 016 48 733
Interest in equity accounted investees 27 111 26 989 34 954
Investments 696 718 18 263
Long-term loan 13 995 34 670 19 929
Deferred taxation asset 6 988 9 260 6 565
Current assets 263 440 239 677 220 537
Inventories 964 6 920 5 849
Trade and other receivables 160 341 137 270 114 705
Pension fund surplus 973 1 568 973
Income tax receivable 9 177 4 807 4 106
Assets held for sale 25 022
Cash and cash equivalents 66 963 89 112 94 904
Total assets 799 878 779 686 788 055
EQUITY AND LIABILITIES
Total equity 443 887 443 021 478 791
Share capital and premium 1 862 1 890 1 890
Retained earnings 442 105 435 352 477 250
Non-distributable reserves (381) 5 463 (643)
Equity attributable to ordinary shareholders 443 586 442 705 478 497
Non-controlling interest 301 316 294
Non-current liabilities 32 994 3 993 9 397
Deferred taxation liability 2 555 2 096 2 555
Finance lease liability 693 237 525
Borrowings 29 746 6 317
Retirement benefit obligations 1 660
Current liabilities 322 997 332 672 299 867
Trade and other payables 264 555 282 861 285 999
Bank overdrafts 30 290 31 441
Short-term borrowings 13 691 7 768 2 400
Contingent consideration liability 1 056 3 000 4 056
Income tax payable 35 526 408
Betting dividends payable 13 370 7 076 7 004
Total equity and liabilities 799 878 779 686 788 055
Condensed consolidated statements of cash flow
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Jan 31 Jan 31 Jul
2015 2014 2014
R’000 R’000 R’000
Net cash (outflow)/inflow from operating activities (20 642) (885) 40 724
Cash generated by operations 69 719 55 798 103 360
Movements in working capital (29 614) 3 742 22 685
Cash generated by operating activities 40 105 59 540 126 045
Income tax paid (15 127) (15 150) (20 436)
Investment income received 1 546 291 2 815
Finance costs paid (1 919) (214) (1 183)
Dividends to shareholders (45 247) (45 352) (66 517)
Net cash outflow from investing activities (31 086) (11 806) (11 293)
Acquisition of property, plant and equipment and intangible assets (31 225) (30 742) (66 565)
Proceeds on disposal of property, plant and equipment and
intangible assets 338 1 610 2 244
Dissolution of PGE joint operation 24 032 24 031
Prepayment and contingent settlements on investments (34 313)
Investment in equity accounted investee and investment (7 231) (9 650)
Loans advanced 6 404 (27 236) (12 495)
Dividends received from equity accounted investee 27 710 27 761 51 142
Net cash (outflow)/inflow from financing activities (6 765) 7 369 8 586
Finance lease payments (335) (31) (131)
Finance raised 34 719 7 400 8 717
Shares repurchased (41 149)
Net (decrease)/increase in cash and cash equivalents (58 493) (5 322) 38 017
Effect of exchange fluctuations on cash and cash equivalents 262 2 793 (3 313)
Cash and cash equivalents at beginning of period 94 904 60 200 60 200
Cash and cash equivalents at end of period 36 673 57 671 94 904
Condensed consolidated statement of changes in equity
Equity
Non- attributable Non-
Share distributable Retained to ordinary controlling Total
capital reserves earnings shareholders interst equity
R’000 R’000 R’000 R’000 R’000 R’000
Balance at 31 July 2013 1 890 2 670 427 477 432 037 308 432 345
Total comprehensive income for the period 2 793 51 727 54 520 8 54 528
- Profit for the period 51 727 51 727 8 51 735
- Foreign currency translation reserve 2 793 2 793 2 793
Share-based payment 1 500 1 500 1 500
Transactions with owners recorded directly in equity
- Dividends paid to equity holders (45 352) (45 352) (45 352)
Balance at 31 January 2014 1 890 5 463 435 352 442 705 316 443 021
Total comprehensive income for the period (6 106) 59 563 53 457 (22) 53 435
- Profit for the period 58 682 58 682 (22) 58 660
- Remeasurement of defined benefit obligation 881 881 881
- Foreign currency translation reserve (6 106) (6 106) (6 106)
Share-based payment 3 500 3 500 3 500
Transactions with owners recorded directly in equity
- Dividends paid to equity holders (21 165) (21 165) (21 165)
Balance at 31 July 2014 1 890 (643) 477 250 478 497 294 478 791
Total comprehensive income for the period 262 49 723 49 985 7 49 992
- Profit for the period 49 723 49 723 7 49 730
- Foreign currency translation reserve 262 262 262
Share-based payment 1 500 1 500 1 500
Transactions with owners recorded directly in equity
- Shares repurchased (28) (20 990) (21 018) (21 018)
- Shares issued in terms of executive share option scheme (20 131) (20 131) (20 131)
- Dividends paid to equity holders (45 247) (45 247) (45 247)
Balance at 31 January 2015 1 862 (381) 442 105 443 586 301 443 887
Directors:
M P Malungani (Chairman), W A du Plessis* (Group Chief Executive), A W Heide* (Finance Director and COO),
R Cooper, M J Jooste, B Kantor, S K C Khampepe, N J Mboweni (Mrs), V J Moodley*, Dr E Nkosi, M L Ramafalo*,
J A Stuart*, C J H van Niekerk, J B Walters
(*Executive)
Company Secretary: F Moloi (Mrs)
Sponsor: Investec Bank Limited
Registered Office:
Turffontein Racecourse, 14 Turf Club Street, Turffontein
Transfer Secretaries: Computershare Investor Services (Pty) Limited
Share code: PHM ISIN: ZAE000039269
Website: www.phumelela.com
Date: 10/04/2015 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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