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Audited provisional financial results for the year ended 28 February 2015 and cash dividend declaration
Wilderness Holdings Limited
"Wilderness” or “the Company” or “the Group”
Share code: WIL ISIN: BW0000000868
Registration number: 2004/2986
BSE: Primary Listing JSE: Secondary Listing
www.wilderness-group.com
Audited provisional announcement of consolidated financial results
for the year ended 28 February 2015 and a cash dividend
declaration
Highlights
– Revenue up 12% P945 million (restated)
– EBITDA up 20% to P182 million
– Total revenue per available room* up 5% to P7,495
– Profit after tax up 57% to P76 million
– Cash generated by operations down 29% to P131 million
– HEPS up 102% to 32 thebe per share
– Cash dividend of 15 thebe per share up 50%
– Occupancy percentage up to 65% from 62%
*Total revenue per available room (TRevPar) is calculated as total
revenue from Travel Experience divided by total available rooms.
Summarised consolidated statement of comprehensive income
Audited
Audited Year ended
Year ended 28 Feb 2014
P’000 28 Feb 2015 Change Restated
Revenue 944 586 12% 843 288
Cost of sales (301 972) (258 469)
Gross profit 642 614 584 819
Other gains 7 056 17 200
Operating expenses (476 072) 5% (452 166)
Foreign exchange gains 8 103 1 315
Operating profit for year
before items listed below
(EBITDA) 181 701 20% 151 168
Impairment loss (10 175) (8 902)
Depreciation and
amortisation (55 896) (50 093)
Operating profit 115 630 25% 92 173
Net finance costs (4 607) (7 509)
Unrealised foreign exchange
loss on loans (6 519) (9 851)
Share of associate company
profit 4 191 2 708
Profit before taxation 108 695 40% 77 521
Taxation (32 463) (29 031)
Profit for the year 76 232 57% 48 490
Other comprehensive income/(loss)
Items that may be subsequently
reclassified to profit or loss
Exchange differences on translating
foreign operations: 9 106 (5 275)
Equity holders of the Company 12 336 4 270
Non-controlling interest 13 (709)
Net investment in foreign (3 243) (8 836)
operations
Total comprehensive income
for the year 85 338 43 215
Profit attributable to:
Owners of the Company 72 611 46 147
Non-controlling interest 3 621 2 343
76 232 48 490
Total comprehensive income
attributable to:
Owners of the Company 81 704 41 581
Non-controlling interest 3 634 1 634
85 338 43 215
Number of shares issued
(thousands)
Issued 231 882 231 000
Weighted average 231 588 231 000
Diluted weighted average 237 712 234 003
Earnings per share (thebe)
Basic 31.35 57% 19.98
Diluted 30.55 55% 19.72
Basic headline 32.49 102% 16.07
Diluted headline 31.66 100% 15.86
Summarised consolidated statement of financial position
Audited Audited
Year ended Year ended
P’000 28 Feb 2015 28 Feb 2014
Assets
Non-current assets 505 514 474 933
Property, plant and equipment 424 634 387 920
Goodwill 34 664 32 696
Intangible assets 14 683 17 913
Investments and loans in associates 9 598 13 982
Loans receivable – 237
Deferred tax assets 21 935 22 185
Current assets 410 907 407 530
Inventories 23 480 19 707
Receivables and prepayments 98 072 77 903
Current tax receivable 6 155 14 530
Bank balances and cash 283 200 295 390
Total assets 916 421 882 463
Equity and liabilities
Equity attributable to the owners of
the Company 449 026 382 695
Stated capital 156 086 153 703
Foreign currency translation reserve 19 933 10 840
Common control reserve (73 324) (73 324)
Other non-distributable reserves 21 599 20 346
Share-based payment reserve 15 435 10 802
Retained income 309 297 260 328
Non-controlling interest (4 995) (7 747)
Total equity 444 031 374 948
Non-current liabilities 89 376 124 221
Borrowings 60 567 96 597
Deferred tax liabilities 28 809 27 624
Current liabilities 383 014 383 294
Trade and other payables 305 079 311 324
Borrowings – current portion 27 423 25 613
Current tax liabilities 1 229 1 686
Bank overdrafts 49 283 44 671
Total liabilities 472 390 507 515
Total equity and liabilities 916 421 882 463
Net asset value per share (thebe) 194 166
Net tangible asset value per share
(thebe) 172 144
Summarised consolidated statement of cash flow
Audited Audited
Year ended Year ended
P’000 28 Feb 2015 8 Feb 2014
Net cash generated from operating
activities 130 799 184 426
Net cash used in investing activities (92 346) (51 819)
Net cash used in financing activities (69 659) (32 959)
Net (decrease)/increase in cash and
cash equivalents (31 206) 99 648
Unrealised exchange gains on foreign
cash balances 14 404 11 434
Cash and cash equivalents at the
beginning of the year 250 719 139 637
Cash and cash equivalents at the end 233 917 250 719
of the year
Summarised consolidated statement of changes in equity
Audited Audited
Year ended Year ended
P’000 28 Feb 2015 8 Feb 2014
Opening balance 374 948 337 469
Share issue on settlement of share
scheme obligation 2 383 –
Minority portion of dividend paid (2 208) (2 093)
Dividends paid (23 100) (9 240)
Total comprehensive income for the
year 85 338 43 215
Net share-based payment reserve 5 209 6 151
Other 1 461 (554)
Closing balance 444 031 374 948
Comprising:
Stated capital 156 086 153 703
Foreign currency translation reserve 19 933 10 840
Common control reserve (73 324) (73 324)
Other non-distributable reserves 21 599 20 346
Share-based payment reserve 15 435 10 802
Retained income 309 297 260 328
Total shareholders' equity 449 026 382 695
Non-controlling interest (4 995) (7 747)
Total equity 444 031 374 948
Segmental information
Audited Audited
Year ended Year ended
P’000 28 Feb 2015 8 Feb 2014
Segment profit
Botswana 110 104 98 459
Namibia 17 853 3 032
South Africa 29 843 26 533
Zambezi 8 746 4 592
Intergroup (4) 37
Group 166 542 132 653
Depreciation and amortisation
Botswana (28 799) (27 672)
Namibia (9 787) (7 292)
South Africa (6 650) (4 280)
Zambezi (10 660) (10 849)
Group (55 896) (50 093)
Transactions unallocated to a segment
Other gains 7 056 17 200
Foreign exchange gains 8 103 1 315
Impairment losses (10 175) (8 902)
Interest paid (7 108) (8 788)
Interest received 2 501 1 279
Unrealised foreign exchange loss on
loans (6 519) (9 851)
Associate earnings 4 191 2 708
Profit before taxation 108 695 77 521
Taxation (32 463) (29 031)
Profit after tax 76 232 48 490
Segmental assets
Botswana 443 408 425 292
Namibia 149 230 130 061
South Africa 252 212 239 639
Zambezi 108 564 100 214
Central financing activities and
eliminations (36 993) (12 743)
Group 916 421 882 463
Additional disclosure
Audited Audited
Year ended Year ended
P’000 28 Feb 2015 8 Feb 2014
Reconciliation between profit
attributable to owners of the
Company and headline earnings
Profit attributable to owners of the
Company 72 611 46 147
Adjustments
Gains and compensation on disposal of
property, plant and equipment (10 834) (4 763)
Profit on disposal of interests in
subsidiaries (1 057) –
Loss on disposal of investment in
associate 4 998 (3 051)
Impairment of assets 9 523 423
Impairment of Intangible assets 500 1 897
Profit on disposal of non-current
assets held for sale – (2 582)
Tax effects of adjustments (903) (909)
Minority interest 411 (41)
Headline earnings 75 249 37 121
Capital commitments
Authorised by directors and contracted
for 33 321 32 325
Not yet contracted for but authorised
by directors 121 884 60 472
155 205 92 797
It is intended to finance capital
expenditure from working capital
generated and existing borrowing
facilities.
Operating leases
Minimum lease payments due
– within one year 23 618 23 767
– in second to fifth year inclusive 59 342 63 936
– after fifth year 92 420 108 977
175 380 196 680
Borrowings
Non-current
Interest bearing 76 485 111 620
Non-interest bearing 11 505 10 590
Less: Current portion of long-term
liabilities (27 423) (25 613)
60 567 96 597
Commentary
The Group is pleased to report strong results for the year after
recording 102% increase in headline earnings per share. Since
listing on the BSE and JSE in 2010, the Group has delivered a
compound annual growth rate in its HEPS of 31% over the four year
period from 28 February 2011.
The current results were achieved in a period characterised by
uncertainty in the African tourism industry driven by the Ebola
outbreak in West Africa in March 2014. The effect of Ebola was not
evident in the first three quarters, as there were few cancellations
of existing bookings as was first feared at the onset of the outbreak.
However, the effect came later in our booking cycle showing the
impact in a lower than expected fourth quarter and a slow start to
the new financial year.
Financial review
Financial performance
The Group has elected to early adopt IFRS 15 Revenue from Contracts
with Customers, we believe this provides a more meaningful
representation of our business as it takes into account only revenue
that is generated by businesses owned by the Group. Further
information is included under “Changes in accounting policies” below.
The adoption of IFRS 15 resulted in a reduction in revenue and cost of
sales of P561 million in 2015 against P558 million in the prior year.
On a restated basis revenue grew by 12% to P945 million. Bednights
sold increased by 11% driven mainly by Namibia and a greater
contribution from our lower end products. Available bednights have
increased by 6% from 210 880 to 224 228.
The average exchange rate for the year was 6% weaker against the
US Dollar from P8.56 to P9.08, whilst the Rand depreciated against
the Botswana Pula by 3% from R1.17 to R1.21. The combination of the
net currency movement contributed approximately 5% of the revenue
growth.
Gross margin has decreased by 1% to 68% as a result of greater
contribution by the lower margin Namibian business.
EBITDA margin has improved from 17.9% to 19.2% with operating costs
well contained at 5% increase despite growth in available bednights,
continued investment in information technology and an increase of 35%
to P8.3 million in share-based payments charges. The weakening by 3%
of the South African Rand and the Namibian
Dollar against the Botswana Pula resulted in a benefit on conversion
to our Pula reported results.
All geographical segments reported an improved operational
performance, with Namibia now contributing 11% of segmental profit
compared to 2% in the prior year. The closure of loss making camps,
improved service levels and a depreciation of the Namibian Dollar
against the US Dollar resulted in high demand for our Namibian
offering with bednight sales increasing by 25% over the prior year.
Other gains amounting to P7 million include P10.7 million insurance
claim for damage to an aircraft, profit from the disposal of
subsidiaries amounting to P1.1 million and a loss from disposal of
associates of P5 million.
In line with the Group’s hedging strategy, during the latter half of
the year the forward cover taken was reduced to 30% of the unhedged
position expected over the next four months. Subsequent to the
year-end the level of forward cover taken was reduced to zero and
will remain at this level until in the opinion of the Board the Rand
fundamentals make cover necessary. Foreign exchange gains amounted
to P8.1 million.
Impairment losses amounted to P10.2 million, this mainly arose from
damage to an aircraft that was impaired for P4.3 million and
P4.9 million impairment of our Zambian assets until the leases are
renewed. The remaining balance is attributed to impairments of
intangible assets, loans and property, plant and equipment.
Net finance costs decreased from P7.5 million to P4.6 million
reflecting the lower level of interest-bearing debt.
The Group’s effective tax rate decreased from 37% in the prior
year to 30% in the current year. The effective tax rate is higher
than the Group’s nominal rate of 22% largely due to the higher tax
rate in other jurisdictions and expenses that are not deductible for
tax purposes.
Financial position and cash flow
Capital expenditure and commitments
Approximately P99 million was invested in capital expenditure,
including camp assets, vehicles and new camps. Hoanib Skeleton Coast
Camp opened in Namibia in August 2014 and Linkwasha Camp in Zimbabwe
opened in May 2015. The Botswana camps have been going through
various refurbishments and a significant investment in solar energy.
The Board approved P84 million in capital expenditure to maintain and
refurbish existing camps and other assets and develop two new camps
in Botswana and one in Zimbabwe. The Group has also embarked on an
aircraft replacement programme totalling in excess of USD8 million
over the next three years to provide our guests with the safest and
most comfortable flying experience. The Board envisage that this will
be funded by existing cash balances and new borrowing facilities.
Acquisitions/disposals
On 1 July 2014 the Group increased its shareholding in Baobab
Lodge (Proprietary) Limited from 38% to 54% for a consideration of
approximately P1.5 million. The results of the entity were previously
equity accounted and are now consolidated. The business operates two
Tour Series camps consisting of 16 beds each.
In line with Group efforts to consolidate and focus on core business,
the Group has disposed of its investment in the Malawian business for
P1.2 million. In addition, following the destruction by flooding of
Pafuri Camp in January 2013, the Board took the decision to terminate
the concession agreement and exit from the area. The remaining assets
were disposed for approximately P2.3 million.
On 1 March 2014, the Group disposed of its 75% investment in a
Namibian tour operator and 50% in a road transfer business in
Botswana for P1 million and P1.5 million, respectively.
Shares in issue
During the year, the Company issued 882 451 ordinary shares at no par
value (representing approximately 0.38% of the enlarged number of
shares in issue) for no consideration to settle obligations in terms
of the Wilderness Holdings Group 2011 Share Plan.
Following the issue of the new shares, the Company now has
231 882 451 shares in issue at 28 February 2015 and the weighted
average number of shares in issue for the year was 231 588 301
(2014: 231 000 000).
Bank and cash
Net bank balances have decreased by 7% to P234 million as a result of
debt reduction of P36 million, increased capital expenditure and
dividend payment. The existing facilities have been utilised and new
facilities are being renegotiated.
Overall the net asset value per share and net tangible value per
share increased by 17% and 19%, respectively.
Cash generated by operations has declined by 29% due to negative
working capital largely as a result of non-recurring prepayments and
advances of P20 million in respect of camp refurbishments and an
insurance claim of P7 million for a damaged aircraft.
Dividend
Notice is hereby given that a final dividend for the year ended
28 February 2015 of 15 thebe per share was declared on 20 May 2015
(13.88 thebe per share net of Botswana withholding tax). Withholding
tax of 7.5% is applicable to all shareholders who are not exempt and
registered on the Botswana share register. The dividend has been
declared from income reserves. The dividend will be payable on or
about 25 June 2015 to those shareholders registered at the close of
business on Friday, 12 June 2015.
For JSE registered shareholders, the last date to trade shall be
Friday, 5 June 2015 and shall commence trading ex the dividend on
Monday, 8 June 2015. The South African branch register will be closed
for the purposes of dematerialisation, rematerialisation within the
South African register, and transfers between the South African and
Botswana registers, from Monday, 8 June 2015 to Friday, 12 June 2015,
both dates inclusive. The dividend shall be paid in Rand to
shareholders on the South African register, calculated at the Pula
to Rand exchange rate on 21 May 2015 which was P1/R1.21 and
accordingly the gross dividend payable is 18.15 cents per share
(15.4275 cents per share net of South African withholding tax).
Withholding tax of 15% is applicable to all shareholders who
are not exempt and are registered on the South African share
register. The issued shares at the declaration date are 231 882 451.
Leases
As reported in the interim results, the leases for the concessions
upon which our Mombo, Little Mombo, Vumbura and Xigera camps are
located expired in mid 2014. These have not yet been renewed as
the structures and the process by which these concessions are
allocated and administered by the Botswana authorities are being
changed in order to improve stability and long-term confidence in the
industry. A number of our competitors are similarly affected. On the
basis of correspondence with senior Government representatives, the
Group is confident that the concessions concerned will be reissued to
existing operators in good standing.
Directorate
Mr Rolf Hartmann has resigned from the Board on 20 May 2015. The
Board and management wish to thank Rolf for the many years of service
and invaluable contribution to Wilderness and its people.
Subsequent events
In February 2015, the Group announced the termination of its
operating and marketing contract for Odzala Wilderness Camps in the
Republic of Congo. The decision was reached by mutual agreement
between all parties and is effective from 26 April 2015. No other
material events took place between the reporting date and the date
of this report.
Basis of preparation
The summarised financial information has been prepared in accordance
with the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards and the
information as required by IAS 34 Interim Financial Reporting. The
report has been prepared using accounting policies that comply with
International Financial Reporting Standards, in a manner that is
consistent with those applied in the prior year financial statements
with the exception of the accounting for revenue as described below.
Changes in accounting policies and comparability
The Group has adopted certain new standards, amendments and
interpretations to existing standards which are effective for the
financial year beginning on 1 March 2014. Included in the standards
adopted is IFRS 15 Revenue from Contracts with Customers. The
standard was issued in May 2014 with an effective date of
1 January 2018 but allows for early adoption.
The Group opted to early adopt the standard with full retrospective
application as it is the Group’s view that IAS 18 Revenue does not
provide adequate guidance regarding the matter of principal/agency
relationships and the accounting that should be applied. With the
issuance of IFRS 15, the Group now has specific guidance regarding
the application of and accounting for the principal/agency
relationships. As a consequence, substantially more information has
now been collected and considered by management than has been in
previous years. Consideration has also been given to the manner in
which the Group is now constituted following its reorganisation in
recent years and the manner in which the Group generates its revenues.
It is the Group’s view that in light of all of the foregoing, the
adoption of IFRS 15 will better reflect the nature and extent of
its revenue- generating activities.
The impact of the adoption is disclosed in detail in Note 1 below.
The adoption of amendments to other standards has not had any
material impact on previously reported figures.
Note 1 Revenue
P’000 2015 2014
1.1 Impact of adoption of IFRS 15
Revenue
Revenue as reported under IAS 18 1 505 790 1 401 206
Adjustment due to adoption of IFRS 15 561 204 557 918
Revenue as reported under IFRS 15 944 586 843 288
Cost of sales
Cost of sales under previous basis 863 176 816 387
Adjustment due to adoption of IFRS 15 561 204 557 918
Cost of sales as reported under IFRS 15 301 972 258 469
1.2 Revenues by type of service
Travel experience (comprises booking
fees, flying and road transfers,
and accommodation) 840 265 752 921
Service fees 77 200 65 977
Other revenue 27 121 24 390
944 586 843 288
1.3 Revenues by geographical regions
Botswana 459 245 417 156
Namibia 171 287 144 540
South Africa 683 987 601 288
Zambezi 146 621 137 149
Intergroup (516 554) (456 845)
944 586 843 288
2015 2014
% %
1.4 Revenues by source market
Africa and the Middle East 24 20
Americas 50 53
Australasia 3 4
Europe and Asia 23 23
100 100
1.5 Amounts received in advance
At 28 February 2015, the aggregate amount of the amounts received
in advance for which goods and services are still to be delivered
amounts to P76 million (2014: P82 million) and the Group will
recognise this revenue as the services are rendered, which is
expected to occur over the next 12 months.
Independent auditor’s opinion
The auditors, Deloitte & Touche, have issued their opinion on the
Group’s consolidated financial statements for the year ended
28 February 2015. The audit was conducted in accordance with
International Standards on Auditing. They have issued an unmodified
audit opinion. These summarised financial statements have been
derived from the Group financial statements and are consistent in all
material respects with the Group financial statements. A copy of
their audit report is available for inspection at the Company’s
registered office. Any reference to future financial performance
included in this announcement has not been reviewed or reported on
by the Company’s auditors.
Outlook
The impact of the Ebola virus together with the new visa requirements
that the South African authorities have announced are expected to
have a negative effect on the coming financial year. However, we
remain hopeful that the impact on high season will be subdued.
We have announced our investment in two new camps in Rwanda which
country has a unique tourism offering and which we believe will
provide the experience that will complement our existing business.
The Group’s strategic intent is to invest in African tourism markets
which offer authentic wildlife and safari experiences.
As set out in our cautionary announcement we continue to be engaged
in negotiations in this regard.
By order of the Board
Parks Tafa Ami Azoulay
Chairman Chief Financial Officer
22 May 2015
Tax reference number: C075372-01-01-7
Registered office (Botswana): Deloitte House, Plot 64518,
Fairgrounds, Gaborone, Botswana
External company registration number: 2009/022894/10
Registered office (South Africa): 373 Rivonia Boulevard, Rivonia,
South Africa. PO Box 5219, Rivonia 2128, South Africa
BSE: Primary Listing JSE: Secondary Listing
JSE Sponsor:
Rand Merchant Bank (a division of FirstRand Bank Limited)
Transfer secretaries: Corpserve Botswana – Computershare
Directors:
BBP Tafa (Chairman), M Tollman (Deputy Chairman), KNW Vincent (CEO),
A Azoulay (CFO), DA de la Harpe, C de Fleurieu, RM Hartmann, JM Hunt,
RJ Marnitz, MW McCulloch, GB Tollman, MPK ter Haar, J Zeitz
Group Company Secretary: S Mganga
www.wilderness-safaris.com
www.wilderness-collection.com
www.wilderness-residents.co.za
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