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GOODERSON LEISURE CORPORATION LIMITED - Unaudited Condensed Interim Results For The Six Months Ended 31 August 2016

Release Date: 28/10/2016 07:30
Code(s): GDN     PDF:  
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Unaudited Condensed Interim Results  For The Six Months Ended 31 August 2016

Gooderson Leisure Corporation Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1972/004241/06)
(Share Code: GDN ISIN Code: ZAE000084984)
(“Gooderson”, “the company” or “the group”)

 UNAUDITED CONDENSED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2016
 HIGHLIGHTS

 - REVENUE UP 22%
 - NET CASH GENERATED FROM OPERATIONS UP 62%

                CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                   Unaudited     Unaudited        Audited
                                                  31 Aug 2016   31 Aug 2015   29 Feb 2016
                                                        R’000         R’000         R’000
 ASSETS
 Non-current assets                                  241 412       271 379        250 026
 Property, plant and equipment                       202 362       236 672        216 807
 Goodwill                                                999           999            999
 Investment in associates                              1 040           966          1 127
 Timeshare development                                12 533        13 018         12 832
 Deferred tax                                         11 938         9 904          7 962
 Long term debtors                                    12 540         9 820         10 299

 Current assets                                        18 107        25 793        23 341
 Inventories                                            2 201         2 134         2 054
 Other financial assets                                   175           175           175
 Current tax receivables                                  785            49           798
 Trade and other receivables                           11 423        19 718        16 311
 Cash and cash equivalents                              3 523         3 717         4 003

 Non-current assets held for sale                       8 353         9 512        31 022
 and assets of disposal groups

 Total Assets                                        267 872       306 684        304 389

 EQUITY AND LIABILITIES
 Equity capital and reserves                         162 400       188 673        191 475
 Stated capital                                       16 658        16 658         16 658
 Reserves                                             57 828        75 616         74 227
 Retained income                                      87 914        96 399        100 590

 Non-current liabilities                               54 501        65 264        63 786
 Other financial liabilities                           28 154        33 555        31 007
 Deferred income                                        1 715         2 287         2 001
 Deferred tax                                          24 632        29 422        30 778

 Current liabilities                                   50 930        52 661        49 022
 Loans from shareholders                                7 600           —           4 600
 Other financial liabilities                           12 430        15 942        13 243
 Current tax payable                                      816           437           529
 Trade and other payables                              24 186        26 086        24 273
 Deferred income                                          572           572           572
 Bank overdraft                                         5 326         9 624         5 805

 Liabilities of disposal groups                           41            86           106

 Total liabilities                                   105 472       118 011        112 914

 Total Equity and Liabilities                        267 872       306 684        304 389

 Shares in issue                                  121 236 000   121 236 000   121 236 000
 Net asset value per share          (cents)            133.95        155.62        157.94
 Net tangible asset value per share (cents)            133.13        154.80        157.11
           STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

                                                              Unaudited     Unaudited        Audited
                                                             31 Aug 2016   31 Aug 2015   29 Feb 2016
                                                                   R’000         R’000         R’000
Revenue                                                           78 374        64 109       150 330
Cost of Sales                                                   (11 455)       (9 643)      (24 867)
Gross Profit                                                      66 919        54 466      125 463
Net operating expenses                                          (61 945)      (49 327)     (107 988)
EBITDA                                                             4 974         5 139       17 474
Impairment of assets                                            (14 540)           -             -
Investment revenue                                                  118            70           132
Finance costs                                                    (2 693)       (2 622)       (5 410)
(Loss) / Income from equity accounted investments                   (87)         (107)           53
Depreciation and impairment                                      (3 698)       (3 232)       (6 806)
(Loss) / profit before taxation                                 (15 926)         (752)         5 443
Taxation                                                           3 250          681        (1 323)
(Loss) / profit for the year                                    (12 676)          (71)         4 120




Other comprehensive loss:
Reversal of revaluation surplus on property valuation          (22 122)            -             -
Taxation related to the reversal of revaluation surplus on        5 715            -             -
property valuation
Change in Capital Gains Tax rate                                     -             -         (1 396)


Other comprehensive loss for the year net of taxation          (16 407)            -        (1 396)

Total comprehensive income                                     (29 083)           (71)        2 723


Reconciliation of Headline Earnings:
(Loss) / profit attributable to ordinary shareholders           (12 676)          (71)         4 120
Profit / (Loss) on sale of Assets                                   (45)          (22)           29
Impairment loss                                                   14 540
Headline Earnings / (Loss)                                         1 819          (93)         4 149

Weighted average shares in issue                             121 236 000   121 236 000   121 236 000


BASIC, HEADLINE EARNINGS PER SHARE
Basic (loss) / earnings per share (EPS) (cents)                  (10.46)        (0.06)          3.40
Headline earnings /(loss) per share (HEPS) (cents)                  1.50        (0.08)          3.42
Diluted (loss) / earnings per share (cents)                      (10.46)        (0.06)          3.40
Diluted headline earnings /(loss) per share (cents)                 1.50        (0.08)          3.42
Dividend per share (cents)                                            -             -           2.02
                      CONDENSDED CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                                           Unaudited                Unaudited             Audited
                                                                                          31 Aug 2016              31 Aug 2015        29 Feb 2016
                                                                                                R’000                    R’000               R’000
Cash flows from operating activities                                                             5 834                    3 608             14 554
Cash flows from investing activities                                                           (5 168)                  (9 922)           (16 115)
Cash flows from financing activities                                                             (666)                    1 156                509
Net movement in cash and cash equivalents                                                           —                   (5 156)            (1 052)
Cash and cash equivalents at beginning of the period                                           (1 803)                    (751)              (751)
Cash and cash equivalents at end of the period                                                 (1 803)                  (5 907)            (1 803)

SEGMENTAL REPORT

31 AUGUST 2016 – UNAUDITED                                             Revenue                EBITDA                    Assets          Liabilities
                                                                          R’000                R’000                     R’000              R’000
Hotels and lodges                                                        67 388                 3 016                  211 911             64 992
Timeshare                                                                10 987                 1 958                   33 670              7 391
Total segments                                                           78 375                 4 974                  245 581             72 383
Unallocated corporate assets and liabilities                                 —                     —                    22 291             33 089
Total                                                                    78 375                 4 974                  267 872            105 472

31 AUGUST 2015 – UNAUDITED                                             Revenue                EBITDA                    Assets          Liabilities
                                                                          R’000                R’000                     R’000              R’000
Hotels and lodges                                                        53 276                 2783                   231 131             81 466
Timeshare                                                                10 832                 2356                    31 887              6 213
Total segments                                                           64 109                 5139                   263 018             87 679
Unallocated corporate assets and liabilities                                 —                    —                     43 666             30 332
Total                                                                    64 109                 5 139                  306 684            118 011



              CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                       Total stated   Share based     Revaluation         Total         Retained         Total
                                                         capital       payment          reserve         reserves         income         Equity
                                                                        reserve
Group                                                         R’000         R’000          R’000            R’000            R’000          R’000
Balance at 1 March 2015                                      16 658          124           75 484          75 608           98 937       191 203
Profit for the year                                              —            —               —                —             4 119         4 119
Other comprehensive loss                                         —            —           (1 396)          (1 396)               —        (1 396)
Total comprehensive income for the year                          —            —           (1 396)          (1 396)           4 119         2 723
Share based payments reserve movement                            —            16              —                16                —            16
Transfer of share premium                                        —            —               —                —                 —             —
Dividends                                                        —            —               —                —            (2 467)       (2 467)
Total contributions by and distributions to owners               —            16              —                16           (2 467)       (2 451)
of company recognised directly in equity

Balance at 1 March 2016                                      16 658          140           74 087          74 228          100 590       191 476
Loss for the year                                                —            —               —                —           (12 676)      (12 676)
Other comprehensive loss                                         —            —          (16 407)        (16 407)                —       (16 407)
Total comprehensive Loss for the year                            —            —          (16 407)        (16 407)          (12 676)      (29 083)
Share based payment reserve movement                             —            7               —                7                 —             7
Total contributions by and distributions to owners               —            7
                                                                                              —                7                 —             7
of company recognised directly in equity
 Balance at 31 August 2016                                   16 658         147           57 680           57 828           87 914       162 400


COMMENTARY
The directors of Gooderson Leisure present the unaudited results for the half year ended 31 August 2016 which are
available on the company’s website: www.goodersonleisure.co.za.

The results show the consolidated position of Gooderson Leisure compared to results for the half year ended
31 August 2016 and the audited results for the Financial Year Ended 29 February 2016.

REVIEW OF OPERATIONS

Trading conditions during the first half of the financial year reflected continued pressure on the consumer due to the tough
economic environment. Despite external factors the group remains focused on improving occupancies, enhancing weak
performing areas, the continuation of stringent cost containment and improving operating efficiencies.

Year on year growth was, however achieved in both Hotels and Lodges and Timeshare and the revenues were positively
impacted by various projects which we have done the previous year, including the acquisition of the business
operations of the Beach Hotel in Durban on 1 June 2015.

Net operating expenses increased substantially to R61.94 million (2015: R49.33 million) due to the full six months
trading of the Beach Hotel, high maintenance costs and the misappropriation of funds of R2.9 million.

The impairment charge of R14.54 million was a result of the revaluation of the group property portfolio based on the
asset’s market value which has been significantly reduced. The property valuations were performed by an independent
valuer Mr T.D. Labuscagne Professional Valuer –Reg No. 1374 Fellow, SA Institute of Valuers, of Real Estate Valuations.
The exception was the Gooderson Sanrock Resort and Conference Centre for which an offer to purchase was received,
as announced on SENS on 20 September 2016.

Total revenue for the group rose by 22% to R78.37 million (2015: R64.11 million) for the six months ended 31 August 2016.

EBITDA was R4.97 million (2015: R5.13 million) and the EBITDA margin was two percentage points down on the
previous period.

Depreciation at R3.69 million (2015: R3.23 million) is 14% up on the previous year due to various expansionary projects
and the purchase of assets.

The group has posted a loss of R12.67 million of the period under review.

Net cash generated from operations for the period increased by 62% on the previous period to R5.83 million.

PROSPECTS

The declining business confidence in South Africa is expected to continue beyond 2016, nevertheless the group remains
cautiously optimistic about the improvement in the second half of the financial year and is well positioned to take
advantage of market improvements as they arise.

SUBSEQUENT EVENTS

On 12 July 2016 the Board has received a Letter of firm intention from the Alju Family Trust in terms of Regulation 101
of the Companies Regulations, 2011, in respect of the proposed delisting of Gooderson following approval and
implementation of a scheme of arrangement in terms of section 114 of the Companies Act, 2008. A revised offer of 85
cents to all remaining shareholders was submitted to the Board of Directors on 26 October 2016.

The directors have signed an agreement for the sale of Gooderson Sanrock Resort and Conference Centre in Modimolle
which was announced on SENS on 20 September 2016.

CONDENSED NOTES TO THE UNAUDITED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2016

1)      BASIS OF PREPARATION
These condensed, unaudited interim financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS), in accordance with IAS 34 – Interim financial reporting, the listings requirements of the JSE
Limited and the Companies Act, 2008 (Act 71 of 2008) of South Africa as amended. The accounting policies applied in
preparing these interim financial statements are consistent with those presented in the annual financial statements for the
year ended 29 February 2016 and have not been audited or reviewed by Gooderson’s auditors.
These condensed group interim financial statements were prepared by Rajen Nannoolal, the Financial Director.

2)      SEGMENT INFORMATION
The group operates two main business segments – Hotels and Lodges and develops and manages timeshare resorts.

The executive directors assess the performance of the operating segments as each of these operating segments is managed
separately.

3)      INTERIM DIVIDEND
The board has considered it prudent not to declare a dividend.

On behalf of the board.




Alan Gooderson                                                      Rajen Nannoolal
Executive Chairman                                                  Financial Director
28 October 2016

                                         CORPORATE INFORMATION
 Directors                AW Gooderson, G M Castleman, R Nannoolal, C M De Klerk, J Lakaram, B R Warmback*, S Q Moloko*,
                          J E Gooderson*, M A Pottier* (Non-Executive Directors)
 Company Secretary and    R Nannoolal - 85 O.R. Tambo Parade, Durban, 4001
 Registered Office:       (PO Box 10305, Marine Parade, 4056)
                          Tel: +27 31 337 2672 Fax: +27 31 337 2621
 Transfer Secretaries:    Computershare Investor Services (Pty) Ltd - 70 Marshall Street, Johannesburg, 2001
                          (PO Box 61051, Marshall Street, Johannesburg, 2001)
                          Tel: +27 11 370 5000 Fax: +27 11 688 5210
 Attorneys:               Berkowitz Cohen Wartski - 16th Floor, Southern Life House, Durban, 4001
                          (PO Box 3704, Durban, 4001)
                          Tel: +27 31 314 9300 Fax: +27 31 314 9302
 Designated Adviser:      Exchange Sponsors (2008) (Pty) Ltd - 44A Boundary Road, Inanda, 2196
                          (PO Box 411216, Craighall, 2024)
                          Tel: +27 11 880 2113 Fax: 086 556 5720
 Auditors:                Grant Thornton - 2nd Floor, 4 Pencarrow Crescent, La Lucia Ridge Office Estate, La Lucia, 4019
                          (PO Box 950, Umhlanga Rocks, 4320)
                          Tel: +27 31 576 5500 Fax: +27 31 576 5555
 Commercial Bankers:      First National Bank Limited - Acacia House, 2 Kikembe Drive, La Lucia Ridge, 4320
                          (PO Box 4130, The Square, Umhlanga Rocks, 4320)
                          Tel: 087 335 3500
 Company’s Website:       www.goodersonleisure.co.za

Date: 28/10/2016 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

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