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Unaudited interim results for the six months ended 31 December 2016 and cash dividend declaration
CAPEVIN HOLDINGS LIMITED
("Capevin Holdings" or "the Company" or "the Group")
(Incorporated in the Republic of South Africa)
Registration number 1997/020857/06
JSE Share code: CVH
ISIN: ZAE000167714
UNAUDITED INTERIM
RESULTS
FOR THE SIX MONTHS ENDED
31 DECEMBER 2016
AND
CASH DIVIDEND DECLARATION
- Headline earnings per share +0.8% to 35.8 cents
- Intrinsic value per share at 31 December 2016 R9.67
- Interim dividend per share 10.60 cents
SUMMARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 30 June
2016 2015 2016
R'000 R'000 R'000
ASSETS
Non-current assets 2 838 244 2 968 953 2 852 443
Investment in joint venture 2 838 244 2 967 153 2 852 443
Available-for-sale asset - 1 800 -
Current assets
Cash and cash equivalents 18 629 15 489 15 871
Total assets 2 856 873 2 984 442 2 868 314
EQUITY AND LIABILITIES
Equity
Ordinary shareholders' interest 2 842 683 2 974 251 2 856 204
Non-current liabilities
Deferred taxation - 335 -
Current liabilities 14 190 9 856 12 110
Trade payables 87 86 268
Unclaimed dividends 14 080 9 733 11 800
Current income tax liability 23 37 42
Total equity and liabilities 2 856 873 2 984 442 2 868 314
Net asset value per share (cents) 323.0 337.9 324.5
SUMMARY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended Year ended
31 December 30 June
2016 2015 2016
R'000 R'000 R'000
Share of profit of joint venture 298 702 311 944 410 662
Loss on dilution of interest in joint venture (586) (2 184) (2 527)
Investment income 666 569 1 452
Profit on sale of investment - - 1 650
Unclaimed dividends forfeited 652 600 1 252
Administrative expenses (1 042) (964) (2 162)
Profit before taxation 298 392 309 965 410 327
Taxation (186) (157) (496)
Profit for the period 298 206 309 808 409 831
Other comprehensive income (186 752) 210 354 92 615
Items that may be reclassified subsequently to profit or loss:
Fair value adjustment - available-for-sale asset - - (150)
Tax charge relating to available-for-sale asset - - 28
Reclassified to profit and loss - - (1 343)
Share of other comprehensive income of joint venture
Fair value adjustment - available-for-sale asset (2 133) 5 245 (4 630)
Currency translation differences (163 401) 193 553 65 244
Reclassified to profit or loss (66) (634) (754)
Items that will not be reclassified to profit or loss:
Share of joint venture's remeasurements of post-employment
benefits (16 195) 7 854 22 092
Other equity movements of joint venture (4 957) 4 336 12 128
Total comprehensive income for the period 111 454 520 162 502 446
Profit for the period attributable to:
Owners of the parent 298 206 309 808 409 831
Total comprehensive income attributable to:
Owners of the parent 111 454 520 162 502 446
Earnings per share (cents)
- Basic 33.9 35.2 46.6
- Diluted 33.8 35.1 46.4
HEADLINE EARNINGS RECONCILIATION
Six months ended Year ended
31 December 30 June
2016 2015 2016
R'000 R'000 R'000
Earnings attributable to ordinary shareholders 298 206 309 808 409 831
Headline earnings adjustable items
Share of joint venture's impairment of intangible assets and
investments* 15 741 - 21 463
Share of joint venture's other capital (gains)/losses 694 103 491
Tax on share of joint venture's other capital gains and losses (128) (19) (91)
Gain on disposal of investment - - (1 650)
Tax effect of gain on disposal of investment - - 92
Loss on dilution of interest in joint venture 586 2 184 2 527
Headline earnings 315 099 312 076 432 663
Earnings per share (cents)
- Basic 33.9 35.2 46.6
- Diluted 33.8 35.1 46.4
Headline earnings per share (cents)
- Basic 35.8 35.5 49.2
- Diluted 35.7 35.3 49.0
Number of shares (thousands)
- In issue 880 103 880 103 880 103
- Weighted average 880 103 880 103 880 103
* During the period under review, Distell impaired the carrying value of industrial property rights held by its Angolan subsidiary,
as well as its investment in a British wine broking company. During the previous financial year, it impaired the Bisquit brand as
the expected potential market growth in China and Russia at the time of acquisition did not materialise.
SUMMARY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months ended Year ended
31 December 30 June
2016 2015 2016
R'000 R'000 R'000
Ordinary shareholders' equity at the beginning of the
period 2 856 204 2 546 060 2 546 060
Total comprehensive income 111 454 520 162 502 446
Dividends paid (124 975) (91 971) (192 302)
Ordinary shareholders' equity at the end of the period 2 842 683 2 974 251 2 856 204
Dividend per share (cents)
- Interim 10.60 11.40 11.40
- Final 14.20
SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended Year ended
31 December 30 June
2016 2015 2016
R'000 R'000 R'000
Cash flows from operating activities
Dividends received 125 563 110 318 207 129
Dividends paid (124 975) (91 971) (192 302)
Interest received 666 559 1 442
Administrative expenses (1 042) (964) (2 162)
Taxation paid (205) (157) (491)
Increase/(decrease) in trade and other payables and
unclaimed dividends 2 751 (7 138) (4 237)
2 758 10 647 9 379
Cash flows from investing activities
Proceeds from disposal of investment - - 1 650
Net increase in cash and cash equivalents 2 758 10 647 11 029
Cash and cash equivalents at the beginning of the
period 15 871 4 842 4 842
Cash and cash equivalents at the end of the period 18 629 15 489 15 871
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES
The summary consolidated interim financial statements as at and for the six months ended
31 December 2016 have been prepared in accordance with the Listings Requirements of the JSE
Limited (JSE) and the requirements of the Companies Act (No. 71 of 2008), as amended, applicable to
summary financial statements. The JSE requires summary financial statements to be prepared in
accordance with the framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued
by the Accounting Practices Committee, and Financial Pronouncements as issued by the Financial
Reporting Standards Council and, to also, as a minimum, contain the information required by IAS 34:
Interim Financial Reporting.
The directors are responsible for the preparation of the summary interim financial statements, prepared
under supervision of the financial director, Mr P R Louw CA(SA), an employee of the Company's
appointed manager, Remgro Management Services Limited. The summary interim financial statements
have not been audited or reviewed by the Company's auditors.
The accounting policies applied in the preparation of these summary interim financial statements are in
terms of IFRS and are consistent with those applied in the previous consolidated annual financial
statements.
The Group has adopted all new as well as amended accounting pronouncements issued by the
International Accounting Standards Board (IASB) that are effective for financial years commencing
1 July 2016. None of the new or amended accounting pronouncements that are effective for the
financial year commencing 1 July 2016 has a material impact on the consolidated results of the Group.
2. GROUP STRUCTURE
The sole investment of Capevin Holdings is an effective interest of 26.75% (31 December 2015:
26.78% and 30 June 2016: 26.77%) in the issued share capital of Distell Group Limited (Distell), held
via its 50% interest in Remgro-Capevin Investments Proprietary Limited (Remgro-Capevin
Investments).
3. RELATED PARTY INFORMATION
During the period under review Capevin Holdings received dividends from Remgro-Capevin
Investments of R125.6 million (31 December 2015: R110.3 million; 30 June 2016: R207.1 million).
Capevin Holdings also paid administrative fees of R0.5 million (31 December 2015: R0.5 million;
30 June 2016: R1.0 million) to Remgro Management Services Limited (a subsidiary of an investor with
significant influence over the Group). During the 2016 financial year, the Group also disposed of its
investment in Historical Homes of South Africa Limited to Eikenlust Proprietary Limited (a subsidiary
of an investor with joint control over the Group) for a total amount of R1.65 million.
No directors' emoluments were paid during the six months ended 31 December 2016
(31 December 2015: Rnil; 30 June 2016: R0.1 million).
4. SEGMENT REPORT
Capevin Holdings is an investment holding company, with its sole investment being an effective
interest in Distell. The directors have not identified any other segment to report on.
5. FAIR VALUE MEASUREMENT
Subsequent to the disposal of the investment in Historical Homes of South Africa Limited during the
2016 financial year, Capevin Holdings had no financial instruments measured at fair value.
COMMENTARY
FINANCIAL RESULTS
For the six months ended 31 December 2016 Distell's revenue increased by 2.4% to R12.5 billion on a sales
volume decline of 3.1%. Reported headline earnings for the six months ended 31 December 2016 increased by
1.1% to R1 176.9 million, while headline earnings per share increased by 1.0% to 536.8 cents. The financial
results for the period, supported by further efficiency improvements and cost containment initiatives across the
business, was negatively impacted by a stronger rand, particularly against the British Pound, compared to the
comparative period. Excluding currency conversions, Distell's headline earnings increased by 20.9%.
Capevin Holdings' headline earnings per share for the six months ended 31 December 2016 consequently
increased by 0.8% to 35.8 cents (2015: 35.5 cents).
Capevin Holdings' intrinsic value per share decreased by 10.4% from R10.79 on 30 June 2016 to R9.67 on
31 December 2016, based on Distell's last traded share price of R145.00 at that date (excluding capital gains
tax), while the discount to intrinsic value has narrowed from 16.8% to 3.8%. On 24 February 2017, Distell's
share price decreased to R144.00, while Capevin Holdings' decreased to R9.15 (31 December 2016: R9.65)
and the discount to its intrinsic value per share increased to 4.7%.
PROSPECTS
Distell's board believes that the outlook for global economic growth remains lacklustre amid rising global
economic and political uncertainty, while African GDP growth will still be impacted by the commodity price
slump. On the domestic front competition is intensifying and growth is nearing recession levels as consumer
confidence remains low and exchange rates continue to be volatile. It is expected that challenging trading
conditions in many of Distell's markets will persist for the remainder of the year and that a modest recovery in
economic growth is only expected next year. Distell is phasing the level of investment in priority markets in
light of the prevailing economic conditions. However, the strength, appeal and diversity of the company's
brands, its enhanced capacity to trade across a spectrum of markets and the security of its financial position will
allow Distell to continue pursuing its strategic ambitions.
Distell believes it will respond effectively to the changing macro environment by focusing on growth,
improving productivity and simplifying the way it works. As such, the company is evaluating its operating
model in order to reduce its cost base and further enhancing efficiencies as it continues to pursue growth
domestically and in selected international markets.
Refer to www.distell.co.za for Distell's comprehensive interim results.
DIRECTORATE
There was no change in the Company's directorate during the period under review.
DECLARATION OF CASH DIVIDEND
In terms of the dividend policy of Capevin Holdings, dividends received from its indirect interest in Distell,
after providing for administrative expenses, will be distributed to shareholders. The directors have consequently
resolved to approve and declare an interim gross cash dividend (dividend number 25) of 10.60 cents
(2015: 11.40 cents) per share for the six months ended 31 December 2016.
A dividend withholding tax rate of 20% or 2.12 cents per share will be applicable, resulting in a net dividend
of 8.48 cents per share, unless the shareholder concerned is exempt from paying dividend withholding tax or is
entitled to a reduced rate in terms of the applicable double-tax agreement.
The number of issued ordinary shares as at 8 March 2017 is 880 103 265. The Company's income tax number
is 9599/656/71/8.
Dates of importance:
Last day to trade in order to participate in the dividend Tuesday, 18 April 2017
Shares trade ex dividend Wednesday, 19 April 2017
Record date Friday, 21 April 2017
Payment date Monday, 24 April 2017
Share certificates may not be dematerialised or rematerialised between Wednesday, 19 April 2017 and Friday,
21 April 2017, both days inclusive.
In terms of the Company's Memorandum of Incorporation (MOI), dividends will only be transferred
electronically to the bank accounts of shareholders, while dividend cheques are no longer issued. In the instance
where shareholders do not provide the Transfer Secretaries with their banking details, the dividend will not be
forfeited but will be marked as "unclaimed" in the share register until the shareholder provides the Transfer
Secretaries with the relevant banking details for payout.
In terms of the Company's MOI, the Board declared all dividends that are not claimed by shareholders after a
three-year period forfeited, in terms of the applicable prescription laws.
Signed on behalf of the Board of Directors
Chris Otto Pieter Louw
Chairman Financial Director
Stellenbosch
8 March 2017
DIRECTORATE
Non-executive directors
C A Otto* (Chairman),
A E v Z Botha*, J J Durand, R M Jansen*, E G Matenge-Sebesho*
(*Independent)
Executive director
P R Louw (Financial Director)
CORPORATE INFORMATION
Secretary
Remgro Management Services Limited
Listing
JSE Limited
Sector: Consumer - Food and Beverage - Beverages - Distillers & Vintners
Business address and registered office
Millennia Park, 16 Stellentia Avenue, Stellenbosch, 7600
(PO Box 456, Stellenbosch, 7599)
Transfer Secretaries
Computershare Investor Services Proprietary Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
(PO Box 61051, Marshalltown, 2107)
Auditors
PricewaterhouseCoopers Inc.
Stellenbosch
Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
Website
www.capevin.com
Date: 08/03/2017 05:01:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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