Wrap Text
Unaudited interim announcement of consolidated financial results for the six months ended 31 August 2016
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
Tax reference number: C075372-01-01-7
Unaudited interim announcement of consolidated financial results
for the six months ended 31 August 2016
www.wilderness-group.com
www.wilderness-safaris.com
Highlights
– Revenue up 19% to P642 million
– EBITDA up 16% to P175 million
– Adjusted EBITDA* up 18%
– Total revenue per available room** up 8%
– Profit after tax up 22% to P94 million
– Cash generated by operations up 23% to P192 million
– HEPS up 12% to 35 thebe per share
– Occupancy percentage up to 66% from 64%
* Adjusted EBITDA excludes the effects of the Governors’
acquisition and foreign exchange (losses)/gains.
** 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
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Aug 31 Aug 29 Feb
P'000 2016 Change 2015 2016
Revenue 641 912 19% 538 611 935 087
Cost of sales (184 406) (162 539) (276 186)
Gross profit 457 506 376 072 658 901
Other gains 2 000 3 891 374
Operating expenses (277 278) 15% (241 921) (486 206)
Foreign exchange
(losses)/gains (7 400) 12 894 26 241
Operating profit for
the period before
items listed below
(EBITDA) 174 828 16% 150 936 199 310
Net impairment (3 133) (776) 796
(loss)/reversal
Depreciation and
amortisation (36 121) (31 331) (64 736)
Operating profit 135 574 14% 118 829 135 370
Net finance costs (3 297) (1 729) (4 288)
Unrealised foreign
exchange loss on loans (5 416) (5 733) (12 215)
Share of associate
company profit 1 926 599 1 502
Profit before
taxation 128 787 15% 111 966 120 369
Taxation (35 205) (34 970) (46 241)
Profit for the period 93 582 22% 76 996 74 128
Other comprehensive
income/(loss) 4 764 (4 194) (11 824)
Items that may be
subsequently reclassified
to profit or loss:
Exchange differences on
translating foreign
operations 4 764 (4 194) (11 824)
Total comprehensive
income for the period 98 346 72 802 62 304
Profit attributable to:
Owners of the Company 79 370 73 340 76 525
Non-controlling
interest 14 212 3 656 (2 397)
93 582 76 996 74 128
Total comprehensive
income attributable to:
Owners of the Company 85 422 68 573 62 325
Non-controlling
interest 12 924 4 229 (21)
98 346 72 802 62 304
Number of shares
issued (thousands)
Issued and weighted 231 882 231 882 231 882
average
Diluted weighted
average 242 642 241 440 242 195
Earnings per share (thebe)
Basic 34,23 8% 31,63 33,00
Diluted 32,71 8% 30,38 31,60
Basic headline 34,53 12% 30,70 31,03
Diluted headline 33,00 12% 29,49 29,71
Summarised consolidated statement of financial position
Unaudited Unaudited Audited
As at As at As at
31 Aug 31 Aug 29 Feb
P'000 2016 2015 2016
Assets
Non-current assets 714 620 564 214 554 950
Property, plant and equipment 540 855 489 510 483 688
Goodwill 62 937 33 890 32 901
Intangible assets 71 019 12 612 10 743
Investments and loans in
associates 12 026 9 197 10 100
Deferred tax assets 27 783 19 005 17 518
Current assets 454 500 451 883 378 621
Inventories 32 799 25 594 24 442
Receivables and prepayments 161 602 132 691 95 523
Current tax receivable 11 902 6 308 9 525
Bank balances and cash 248 197 287 290 249 131
Total assets 1 169 120 1 016 097 933 571
Equity and liabilities
Equity attributable to the
owners of the Company 532 329 485 676 481 287
Stated capital 156 086 156 086 156 086
Foreign currency translation
reserve 11 780 15 165 5 733
Common control reserve (73 324) (73 324) (73 324)
Other non-distributable
reserves (9 983) 22 624 19 318
Share-based payment reserve 23 461 19 232 23 051
Retained income 424 309 345 893 350 423
Non-controlling interest (13 402) (4 026) (11 759)
Total equity 518 927 481 650 469 528
Non-current liabilities 100 461 67 973 72 411
Borrowings 49 741 41 291 43 423
Deferred tax liabilities 50 720 26 682 28 988
Current liabilities 549 732 466 474 391 632
Trade and other payables 461 674 368 951 310 873
Borrowings – current portion 12 254 29 473 32 116
Current tax liabilities 13 692 19 528 1 477
Bank overdrafts 62 112 48 522 47 166
Total liabilities 650 193 534 447 464 043
Total equity and liabilities 1 169 120 1 016 097 933 571
Net asset value per share
(thebe) 230 209 208
Net tangible asset value per
share (thebe) 172 189 189
Summarised consolidated statement of cash flow
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Aug 31 Aug 29 Feb
P'000 2016 2015 2016
Net cash generated from
operating activities 191 963 156 559 135 022
Net cash used in investing
activities (141 544) (101 260) (128 270)
Net cash used in financing
activities (63 906) (62 768) (64 679)
Net decrease in cash and cash
equivalents (13 487) (7 469) (57 927)
Unrealised exchange
(loss)/gain on foreign cash
balances (2 393) 12 320 25 975
Cash and cash equivalents at
the beginning of the period 201 965 233 917 233 917
Cash and cash equivalents at
the end of the period 186 085 238 768 201 965
Summarised consolidated statement of changes in equity
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Aug 31 Aug 29 Feb
P'000 2016 2015 2016
Opening balance 469 528 444 031 444 031
Minority portion of dividend
paid (3 269) (3 919) (3 919)
Dividends paid (34 782) (34 782) (34 782)
Total comprehensive income
for the period 98 346 72 802 62 304
Share-based payment reserve 410 3 797 7 616
Other (11 306) (279) (5 722)
Closing balance 518 927 481 650 469 528
Comprising:
Stated capital 156 086 156 086 156 086
Foreign currency translation
reserve 11 780 15 165 5 733
Common control reserve (73 324) (73 324) (73 324)
Other non-distributable
reserves (9 983) 22 624 19 318
Share-based payment reserve 23 461 19 232 23 051
Retained income 424 309 345 893 350 423
Total shareholders' equity 532 329 485 676 481 287
Non-controlling interest (13 402) (4 026) (11 759)
Total equity 518 927 481 650 469 528
Segmental information
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Aug 31 Aug 29 Feb
P'000 2016 2015 2016
Segment profit
Botswana 93 669 87 589 123 736
Kenya 13 360 (508) (1 233)
Namibia 14 492 9 854 17 787
Rwanda 3 802 – –
South Africa 45 831 31 159 32 067
Zambezi 8 509 5 884 342
Intergroup 565 173 (4)
Group 180 228 134 151 172 695
Depreciation and amortisation
Botswana (17 674) (15 149) (31 951)
Kenya (593) (11) (23)
Namibia (5 371) (5 747) (10 826)
Rwanda (165) – –
South Africa (3 537) (3 626) (7 112)
Zambezi (8 781) (6 798) (14 824)
Group (36 121) (31 331) (64 736)
Transactions unallocated
to a segment
Other gains 2 000 3 891 374
Foreign exchange (loss)/gain (7 400) 12 894 26 241
Net impairment (loss)/reversal (3 133) (776) 796
Interest paid (3 739) (2 581) (5 748)
Interest received 442 852 1 460
Unrealised forex loss on loans (5 416) (5 733) (12 215)
Associate earnings 1 926 599 1 502
Profit before tax 128 787 111 966 120 369
Taxation (35 205) (34 970) (46 241)
Profit after tax 93 582 76 996 74 128
Segmental assets
Botswana 627 294 518 617 516 032
Kenya 59 862 1 362 2 465
Namibia 149 775 157 084 133 357
Rwanda 31 059 – 6 619
South Africa 241 447 349 797 208 278
Zambezi 152 124 135 156 111 601
Central financing activities
and eliminations (92 441) (145 919) (44 781)
Group 1 169 120 1 016 097 933 571
Additional disclosure
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Aug 31 Aug 29 Feb
P'000 2016 2015 2016
Reconciliation between profit
attributable to owners of
the Company and headline
earnings
Profit attributable to owners
of the Company 79 370 73 340 76 525
Adjustments
Gains and compensation on
disposal and impairment of
property, plant and equipment (1 977) (3 859) (6 321)
Impairment of assets 3 086 713 (911)
Tax effects of adjustments (130) 863 2 402
Minority interest (286) 139 250
Headline earnings 80 063 71 196 71 945
Commitments
Capital
Authorised by directors and
contracted for 33 483 – 1 783
Not yet contracted for but
authorised by directors 79 234 104 890 211 534
112 717 104 890 213 317
It is intended to finance
capital expenditure from
working capital generated
and existing borrowing
facilities. Operating leases
Minimum lease payments due
– within one year 23 415 21 899 21 369
– in second to fifth year
inclusive 53 667 58 026 59 280
– after fifth year 84 387 89 344 89 743
161 469 169 269 170 392
Borrowings
Non-current
Interest bearing 38 440 58 247 63 053
Non-interest bearing 23 555 12 517 12 486
Less: Current portion of
long-term liabilities (12 254) (29 473) (32 116)
49 741 41 291 43 423
Revenue
Revenues by type of service
Travel experience 573 948 481 220 836 060
Service fees 53 006 44 842 70 761
Other 14 958 12 549 28 266
641 912 538 611 935 087
Revenue by geographical region
Botswana 284 803 269 002 468 735
Kenya 31 430 152 163
Namibia 91 342 87 146 162 017
Rwanda 8 352 – –
South Africa 446 503 395 345 679 961
Zambezi 96 752 84 834 150 071
Intergroup (317 270) (297 868) (525 860)
Group 641 912 538 611 935 087
Revenue by source market (%)
Africa and the Middle East 31 31 33
Americas 44 49 43
Australasia 3 2 2
Europe and Asia 22 18 22
100 100 100
Founded in Botswana in 1983, Wilderness Holdings is an award-winning
and globally respected ecotourism company present in the prime
wilderness and wildlife areas of southern and east Africa. Pivoted
off the continent’s most diverse portfolio of luxury safari camps,
the Group operates a vertically integrated business model that
combines the ownership of product (safari camps), support services
(bush airline, and touring and transfer services), and marketing,
sales and reservations businesses. Collectively, these are termed
“the travel experience” (refer Revenue table below) and serve to
ensure certainty of supply, ownership of the supply chain and a
seamless service to both the client (the travel trade) and the
consumer (our guest).
Our values provide a moral compass and framework for decision making
and day-to-day operations within our organisation
Commerce
We create life-changing journeys for our guests and clients and
work closely with our government partners, conservation and community
stakeholders and shareholders, to ensure the ongoing financial
success and sustainability of our business.
Community
People are at the heart of our business. We hope to provide
opportunities and growth to inspire our staff and external
communities to learn about nature, love and conserve it, and to
realise the importance of ecotourism.
Culture
We respect and promote our unique Wilderness culture, as well as
those of our employees and neighbouring rural communities. We hope
to positively impact a global culture of respect and care for the
environment.
Conservation
We aim to maximise the positive impact of our operations on
biodiversity conservation and to build and manage our camps in the
most eco-friendly way possible to minimise any negative impacts.
Gorillas and reforestation in Rwanda
During the 2016 financial year we completed the largest ever private
land acquisition adjacent to the Volcanoes National Park in Rwanda.
The land is currently undergoing intensive reforestation and will
host the future Bisate Lodge (opening 1 June 2017). More than just a
luxury lodge, the land will become the site of a visionary
reforestation and rewilding project that aims to restore endemic
Albertine Rift flora and fauna.
Commentary
The Group has delivered pleasing trading results for the first
half of the year on the back of a recovery in international travel
within Africa following the end of the Ebola virus. The global
terrorist threat and the Zika virus in South America also impacted as
they contributed to the market’s perception of southern Africa as a
safer and more attractive destination compared with the rest of the
world. The new lodges that opened over the last few years, most
particularly Hoanib Skeleton Coast camp in Namibia, are also proving
successful with positive spin off on other camps and elements of the
business. Conversely, the appreciation of the local currencies,
particularly over the last three months, impacted negatively
on results.
The Group recorded a 14% increase in bednights sold and a 12%
increase in headline earnings per share (HEPS).
Governors’ acquisition
The half-year results include the Governors’ businesses from
1 July 2016 with a contribution of P39 million and P18 million to
Revenue and EBITDA, respectively. The Group holds 51% of the
Governors’ business. Like the rest of the Group, the businesses are
seasonal with high season running from July through to September, the
period consolidated includes only two months of high season.
Financial review
Revenue increased by 19% to P642 million (2015: P539 million)
driven mainly by the change in sales mix with a 12% increase in
contribution by the Classic camp category while the Tour Series
category, with the lowest bednight rate, was down 21%. The Governors’
brand contributed 8 792 or 11% to bednight sales. The Group recorded
a 66% occupancy rate (2015: 64%). Overall bednight sales increased by
14% to 89 309 (2015: 78 307); excluding Governors’, bednight sales
increased by 3%. Available bednights have increased by 10% to 136 038
(2015: 123 280); excluding Governors’, available bednights increased
by 1%.
The benefit of the depreciation of the Pula by 9% against the US
Dollar to P10.89 (2015: P9.96) was offset by the 11% appreciation of
the Pula against the South African Rand to R1.36 (2015: R1.23). The
combination of the net currency movement therefore did not
have a significant impact on revenue.
EBITDA margin declined slightly from 28% to 27.2%, largely due to the
foreign exchange losses. These are a function of the appreciation of
the home currencies against the US Dollar since the beginning of the
financial year as the Pula and ZAR strengthened by 7% and 13%,
respectively. Adjusted EBITDA margin, which excludes the effects of
the Governors’ transaction and the foreign exchange losses, increased
from 25.6% to 27.1%. Operating costs increased by 11% on a like for
like basis after adjusting for Governors’. The largest contributor to
the increase was an accounting adjustment in provision for
incentives; excluding this adjustment, costs have been well contained
at 6% higher than the prior period.
Other gains of P2 million include proceeds from insurance claims
amounting to P2.6 million offset by losses on disposal of assets
amounting to P0.6 million. Impairment losses amounted to P3.1
million, of which P3 million related to impairment of camp assets due
to fire damage.
In line with the Group’s hedging strategy, forward cover remains at
zero percent of calculated forward exposure until, in the opinion of
the Board, the Rand fundamentals make cover necessary.
Net finance costs were 91% higher at P3.3 million (2015:
P1.7 million) being a consequence of the inclusion of Governors’,
new funding for the additional aircraft acquired in August 2015 and
an accounting adjustment in respect of restoration costs provision.
The Group’s effective tax rate decreased from 31% in the prior year
to 27%, largely due to the delay in the payment of reserves from
South Africa to Botswana and the related dividend tax. The
tax rate is higher than the nominal tax rate due to the higher tax
rates applicable in other tax jurisdictions and losses made by
entities where deferred tax assets could not be recognised.
Capital expenditure amounted to approximately P66 million for the
period. Approximately P18 million has been spent on new camps, and
P15 million on rebuilding existing camps. The balance is largely
defensive in nature.
Cash balances, less overdrafts, have decreased by 22% to
P186 million as the above capital expenditure, debt reduction of
approximately P26 million, dividends amounting to nearly
P35 million and the purchase of Governors’ for P77 million were
financed out of internally generated cash and existing cash reserves.
Geographical operations
Botswana continued to perform respectably, recording an increase
in segmental profit of 7%, despite a decline in bednight sales of
3%. All other regions have outperformed and have recorded increases
in segmental profit in excess of 45%.
Dividend
In line with the Group’s stated policy to only consider paying
dividends based on full year results, no interim dividend is
proposed.
Subsequent events
The Group has secured lending facilities amounting to USD35 million
from Stanbic Bank Limited (Botswana) at favourable rates and on an
extended repayment basis. The facilities are highly flexible and they
position the Group to take advantage of any opportunities that may be
presented in future.
No other material events have occurred between the reporting date and
the date of this report.
Shares in issue
On 5 September 2016, the Company issued 1,821,954 ordinary shares at
no par value (representing approximately 0.78% 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 has
233,704,405 shares in issue.
Leases
As previously reported, the leases for the concessions upon which our
Mombo, Little Mombo 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.
Basis of preparation
This interim report has been prepared in accordance with
International Accounting Standard 34 on Interim Financial Reporting
and complies with the disclosure requirements of the Botswana Stock
Exchange and the JSE. The report has been prepared using accounting
policies that comply with International Financial Reporting Standards
and their interpretations adopted by the International Accounting
Standards Board and the Financial Reporting Guides issued by the
Accounting Practices Committee of the South African Institute of
Chartered Accountants, in a manner that is consistent with the
accounting policies applied for the year ended 29 February 2016.
Outlook
Our forward sales for the rest of the year remain subdued and we
expect a relatively flat performance for the second half of the
financial year. However, an increasing trend in late booking
behaviour could have a positive impact. Continued appreciation of the
home currencies may exert further pressure on performance.
The development of Bisate Lodge in Rwanda is progressing well and
is expected to open in June 2017. The integration of the Governors’
businesses is expected to accelerate with additional rooms planned
for Sabyinyo Silverback Lodge in Rwanda and various upgrades to
the Kenya camps.
The Group’s strategic intent is to invest in African tourism markets
which offer authentic wildlife and safari experiences and where we
feel our specific ecotourism model can have positive conservation
and community impacts.
By order of the Board
Keith Vincent Ami Azoulay
Chief Executive Officer Chief Financial Officer
21 October 2016
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, JM Hunt,
RJ Marnitz, MW McCulloch, GB Tollman, MPK ter Haar, C Vinsonneau,
J Zeitz
Group Company Secretary: B Tumiso
Date: 21/10/2016 08:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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