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Reviewed Condensed Consolidated Financial Results for the year ended 31 March 2017
Tsogo Sun Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1989/002108/06)
Share code: TSH
ISIN: ZAE000156238
(“Tsogo Sun” or “the company” or “the group”)
REVIEWED CONDENSED CONSOLIDATED FINANCIAL RESULTS
for the year ended 31 March 2017
Income R13.2 billion up 8%
Ebitdar R5.0 billion up 11%
Adjusted HEPS 207.6 cents up 6%
Total 2017 dividend per share 104 cents up 6%
Commentary
REVIEW OF OPERATIONS
The group is pleased to announce that we achieved income of over R13 billion and Ebitdar of over R5 billion
for the year ended 31 March 2017 for the first time and grew adjusted headline earnings per share by 6% in the
period despite continued pressure on the consumer due to the weak macro-economic environment and consumer
sentiment.
Year-on-year growth was achieved in both the casino and hotel segments with the hotel trading results in
particular being further positively impacted by various expansionary projects, including the acquisition of two
hotel businesses from the Liberty Group (“Liberty”) and through the acquisition of Hospitality Property Fund
Limited (“HPF”), offset to some extent by a weak trading performance in Africa, particularly in Nigeria.
In terms of our growth strategy the group has continued to invest significant resources during the year,
including:
- the acquisition from Sun International Limited and Grand Parade Investments Limited of a 20% equity
interest in each of SunWest International Proprietary Limited and Worcester Casino Proprietary Limited
(“SunWest and Worcester”) for an aggregate R1.3 billion effective 1 April 2016. This has given the group
an enhanced exposure to the Cape Town casino market through a passive investment with an attractive
dividend yield. We continue to push for the opportunity to relocate one of the smaller Cape based casinos
into an untapped area in the metropole, despite significant delays by the province on this matter;
- the acquisition of two previously managed hotels from Liberty by The Cullinan Hotel Proprietary Limited
(“Cullinan”), being the Garden Court Umhlanga and the StayEasy Pietermaritzburg for R310 million effective
1 October 2016, bringing the number of hotels and rooms in Cullinan to 10 and 2 263 respectively. This was
followed by the acquisition of the 40% shareholding Liberty had in Cullinan, including all shareholders’
loans owing to Liberty for R1.0 billion effective 1 December 2016;
- the acquisition of a 50.6% controlling stake in HPF through conversion of the 78 million HPF B-linked
units to a single class of share and the injection of 10 owned hotels on an asset for share basis;
- the acquisition of the 29.6% minority stake in the Mykonos casino through a share buy-back effective
12 December 2016 for R190 million and additional undeveloped land for future expansion for R30 million;
- construction commenced and was then interrupted on the expansion of the Suncoast Casino and Entertainment
World. The scheme has been redesigned and the cost of the expansion has been decreased to R1.6 billion
including past spend with construction anticipated to re-commence in mid-June 2017 with eighteen months to
completion. R1.3 billion is still to be spent on the project; and
- the group invested R925 million on maintenance capex group-wide, including gaming system replacements and
casino floor and major hotel refurbishments, ensuring our assets remain best in class.
Total income for the year of R13.2 billion ended 8% above the prior year with a 2% growth in gaming win,
assisted by an 11% growth in rooms revenue, a 6% growth in food and beverage revenue and strong growth in
property rental income and dividends received. Earnings before interest, income tax, depreciation, amortisation,
property rentals, long-term incentives and exceptional items (“Ebitdar”) at R5.0 billion for the year was
11% up on the prior year despite the R38 million forex loss in the offshore division. The overall group Ebitdar
margin of 38.2% is 1.2 percentage points (“pp”) up on the prior year. The underlying operations of the group
remain highly geared towards the South African consumer (in gaming) and the corporate market (in hotels). The
high level of operational gearing still presents significant growth potential to the group should these sectors
of the South African economy improve.
Gaming win for the year grew by a disappointing 2% on the prior year with slots win flat and 8% growth in
tables win. The high-end privé market continued to perform well, albeit with volatility in win percentages
from month to month and the main floor business remaining under pressure.
Gauteng recorded a reduction in provincial gaming win of 0.7% for the year. Gaming win growth of 1.5% was
achieved at Montecasino and 6.4% at Gold Reef City with a reduction at Silverstar of 0.1%. Gold Reef City
continues to be positively impacted by the refurbishment and expansion work which was completed in October 2015.
Silverstar growth was again disappointing but was impacted by the loss of particular high end play that did not
recur during the year.
KwaZulu-Natal provincial gaming win grew by 0.2% for the year, a notable slowdown on the prior year. Gaming
win growth of 1.8% was achieved at Suncoast Casino and Entertainment World and 6.0% at Golden Horse Casino in
Pietermaritzburg, primarily on the back of refurbishment work undertaken at that unit, with a reduction of
0.4% at Blackrock Casino in Newcastle. Provisional gaming win statistics are not available from the gaming
board post December 2016 and have been estimated for the last quarter of the year.
Mpumalanga recorded a reduction in provincial gaming win of 1.5% for the year. Gaming win reduced by 2.8% at
Emnotweni Casino in Nelspruit and 2.8% at The Ridge Casino in Emalahleni impacted by significant economic
disruptions to the local manufacturing industry in that area.
The Eastern Cape provincial gaming win reduced by 2.7% for the year. Hemingways gaming win reduced by
7.4% on the prior year, impacted by the poor economic conditions in the East London area.
The Western Cape provincial gaming win reduced by 0.1% for the year. The Caledon Casino, Hotel and Spa,
Garden Route Casino in Mossel Bay and Mykonos Casino in Langebaan reported growth of 8.7%, 2.5% and
5.4% respectively.
Goldfields Casino in Welkom in the Free State experienced difficult conditions with a reduction in gaming
win of 2.0% on the prior year.
Other Gaming division operations consisting of the Sandton Convention Centre and head office costs reflected
a net cost of R154 million, a decrease of R79 million on the prior year due mainly to the dividends received
from SunWest of R70 million, representing three quarterly dividends.
Overall revenue for the Gaming division increased 3% on the prior year to R9.1 billion. Ebitdar increased
3% on the prior year to R3.5 billion at a margin of 38.8%, 0.3pp above the prior year with particularly good
control on overheads mitigating the slow growth in gaming win.
The hotel industry in South Africa continues to experience a recovery from the dual impact of depressed
demand and oversupply. Overall industry occupancies have improved to 65.2% (2016: 63.8%) for the year. Trading
for the group’s South African hotels for the year recorded a system-wide revenue per available room (“RevPar”)
growth of 6% on the prior year due mainly to an increase in average room rates by 5% to R1 067, with occupancies
above the prior period at 64.3% (2016: 63.5%).
Overall revenue for the South African hotels division increased 28% on the prior year to R3.5 billion
assisted by the inclusion of the Holiday Inn Sandton and Crowne Plaza Rosebank hotel businesses from March 2016,
the Garden Court Umhlanga and the StayEasy Pietermaritzburg from October 2016, the consolidation of HPF from
September 2016 and the closure of the Riverside Sun and Sabi River Sun hotels for refurbishment during the prior
year. Ebitdar increased by 48% on the prior year to R1.4 billion at a margin of 38.7% (2016: 33.5%).
The Offshore division of hotels achieved total revenue of R635 million which was 8% down on the prior year,
impacted by tough local economic environments due mainly to the reduction in commodity prices impacting the
local economies negatively. This was further adversely impacted by the strengthening of the Rand against both
the US Dollar and the Euro. Ebitdar (pre-foreign exchange losses) decreased by 24% to R146 million. Foreign
exchange losses of R38 million (2016: R23 million) were incurred on the translation of offshore monetary items,
principally between local country currencies and the US$.
Combined South African and offshore hotel trading statistics, reflecting the Tsogo Sun group-owned hotels
and excluding hotels managed on behalf of third parties and those in HPF managed by third parties, are as
follows:
For the year ended 31 March 2017 2016
Occupancy (%) 63.3 62.5
Average room rate (R) 1 063 1 035
RevPar (R) 672 646
Rooms available (’000) 4 578 4 307
Rooms sold (’000) 2 895 2 691
Rooms revenue (Rm) 3 078 2 784
Operating expenses including gaming levies and VAT and employee costs, but excluding exceptional items and
long-term incentives, increased by 6% on the prior year mainly due to non-organic growth in the business as a
result of acquisitions and expansions and foreign exchange losses, offset by savings initiatives. Excluding
the non-organic growth and foreign exchange losses, operating expenses increased by only 3%.
Property rentals at R242 million are 11% up on the prior year mainly due to the acquisition of the Holiday
Inn Sandton and Crowne Plaza Rosebank hotel businesses in March 2016, with this rental eliminating on
consolidation of HPF from 1 September 2016.
Amortisation and depreciation at R846 million is 4% up on the prior year due mainly to the capital spend
during the current and the prior year.
The long-term incentive charge on the cash-settled incentive scheme of R49 million is R3 million above the
prior year and values the liability (including dividend adjustments) by reference to the company’s share price
which is adjusted for management’s best estimate of the appreciation units expected to vest and future
performance of the group.
Exceptional gains for the year of R787 million relate to:
- fair value gains on the revaluation of investment properties of R757 million related to the non-Tsogo
leased hotels in HPF;
- the release of a fair value reserve for the available-for-sale HPF investment of R46 million;
- profit on sale of investment properties of R36 million related to the Inn on the Square disposed of
by HPF;
- gains on bargain purchases of R82 million;
offset by:
- property, plant and equipment disposals and impairments and loan impairments of R94 million, including an
impairment of the Southern Sun Ikoyi of R75 million due to tough local economic environments as mentioned
above; and
- interest rate swap fair value adjustments of R6 million and transaction and restructure costs of R34 million.
Exceptional losses for the prior year of R41 million comprises the pre-opening costs of R12 million during
the period hotels were closed for refurbishment, capital asset disposals and impairments and loan impairments
of R26 million and transaction and restructure costs of R28 million, offset by the fair value gain of
investment properties of R25 million.
Net finance costs of R1.0 billion are 19% above the prior year due to the increase in debt net of cash to
fund the growth strategy and includes the effective interest of R48 million on the SunWest and Worcester
acquisition in line with IAS 39 Financial Instruments: Recognition and Measurement, offset by a credit in
respect of the Cullinan put option of R35 million (2016: R7 million charge).
The share of profit of associates and joint ventures of R38 million improved by R9 million on the prior year
mainly due to earnings, including the group’s share of exceptional gains of R9 million, from International
Hotel Properties Limited and Redefine BDL, the group’s European hotel investments.
The effective tax rate for the year of 18.1% is impacted by the non-taxable fair value gains on investment
property and the gains on a bargain purchases referred to above, tax exempt dividend income, pre-tax profits
attributable to the HPF non-controlling interests due to its real estate investment trust (“REIT”) tax status,
deductible foreign exchange losses on local country currency movements in the African operations that reverse
on consolidation and offshore tax rate differentials, offset by non-deductible expenditure such as casino
building depreciation and the effective interest on the SunWest and Worcester acquisition. The effective tax rate
for the prior year at 30.3% (restated) was impacted by the increase in the Capital Gains Tax (“CGT”) inclusion
rate on deferred tax of R54 million and non-deductible expenditure such as casino building depreciation,
offset by foreign exchange losses on the US Dollar denominated loans in the local currencies.
Profit attributable to non-controlling interests of R542 million is R524 million above the prior year mainly
due to the HPF non-controlling interests’ share of profits, offset by reduced local currency profits at
Southern Sun Ikoyi and Southern Sun Maputo due to foreign exchange losses.
Group adjusted headline earnings for the year at R2.0 billion ended 6% up on the prior year. The adjustments
include the reversal of the post-tax impacts of the exceptional gains and losses noted above, in addition to
the reversal of the remeasurement of the Cullinan put option included in net finance costs and the exceptional
gains in the share of profit of associates and joint ventures, net of non-controlling interests. The
adjustments in the prior year include the reversal of the post-tax impacts of the exceptional losses noted above
in addition to the reversal of the remeasurement of the Cullinan put option in finance costs and the CGT inclusion
rate deferred tax adjustment referred to above, net of non-controlling interests.
The number of shares in issue is unchanged from the prior year and the resultant adjusted headline earnings
per share is 6% up on the prior year at 207.6 cents per share.
Cash generated from operations for the year improved by 9% on the prior year to R4.8 billion. Net finance
costs increased by 34% due to the increase in net debt, taxation paid reduced by 5% mainly due to refunds
received from SARS, dividends paid to shareholders and non-controlling interests increased by 24% and the
R133 million HPF pre-acquisition dividend paid in September was out of cash acquired with the subsidiary.
Dividends received increased by R83 million due mainly to the acquisition of the stake in the Grand West and
Worcester casinos. Cash flows utilised for investment activities of R2.6 billion (net of R189 million cash
acquired from HPF) consisted mainly of maintenance capital expenditure and the acquisitions and investments
described above.
Interest-bearing debt net of cash at 31 March 2017 totalled R12.1 billion, which is R2.9 billion above the
31 March 2016 balance of R9.2 billion, with R1.2 billion paid in dividends to group shareholders in addition
to the investment activities during the period. The increase is mainly due to the consolidation of the HPF debt
net of cash of R1.5 billion, together with additional funding for the group’s expansion programme.
PROSPECTS
Given the weak state of the South African economy and many of the commodity focused countries in which the
group operates, trading is expected to remain under pressure. Growth will depend on how these economies perform
going forward, including the impact of changes in commodity prices, and the level of policy certainty that
the government is able to achieve in areas ranging from visa regulations to gaming taxes and administered costs.
Nevertheless, the group remains highly cash generative and is confident in achieving attractive returns from
the growth strategy once the macro-economic environment improves.
The group continues to implement a variety of projects and acquisitions including:
- the acquisition of Hosken Consolidated Investment Limited’s (“HCI”) and all other shareholders’ interests
in Niveus Investment 19 Limited (“Gameco”) for a combination of Tsogo Sun Holdings shares and cash.
Details of the transaction were released on the Stock Exchange News Service of the JSE on 14 March 2017
and the transaction remains subject to a number of conditions precedent including a due diligence which
is expected to be concluded on 31 May 2017;
- the potential to bid for the relocation of one of the smaller casinos in the Western Cape to the Cape
Metropole remains an opportunity for the group should the provincial authorities allow such a process;
- development has commenced on a 125 room StayEasy in Maputo, Mozambique, which is expected to cost
US$16 million and be completed by late 2018; and
- the acquisition of additional hotel properties by International Hotel Properties Limited, which currently
owns nine hotels in the United Kingdom, is anticipated in the future and the group may apply additional
capital in this regard.
DIVIDEND
Subsequent to year end, the board of directors has declared a final gross cash dividend from income reserves
in respect of the year ended 31 March 2017 of 70.0 (seventy) cents per share. The dividend has been declared
in South African currency and is payable to shareholders recorded in the register of the company at close of
business Thursday, 15 June 2017. The number of ordinary shares in issue at the date of this declaration is
957 373 089 (excluding treasury shares). The dividend will be subject to a local dividend tax rate of 20%,
which will result in a net dividend of 56.0 cents per share to those shareholders who are not exempt from
paying dividend tax. The company’s tax reference number is 9250039717.
In compliance with the requirements of Strate, the electronic and custody system used by the JSE, the
following dates are applicable in 2017:
Last date to trade cum dividend Monday, 12 June
Shares trade ex dividend Tuesday, 13 June
Record date Thursday, 15 June
Payment date Monday, 19 June
Share certificates may not be dematerialised or rematerialised during the period Tuesday, 13 June 2017 and
Thursday, 15 June 2017, both days inclusive. On Monday, 19 June 2017, the cash dividend will be electronically
transferred to the bank accounts of all certificated shareholders where this facility is available. Where
electronic fund transfer is not available or desired, cheques dated 19 June 2017 will be posted on that date.
Shareholders who have dematerialised their share certificates will have their accounts at their CSDP or broker
credited on Monday, 19 June 2017.
SUBSEQUENT EVENTS
The directors are not aware of any matter or circumstance arising since the end of the financial year, not
otherwise dealt with within the financial statements, that would affect the operations or results of the
group significantly.
PRESENTATION
Shareholders are advised that a presentation to various analysts and investors which provides additional
analysis and information will be available on the group’s website at www.tsogosun.com.
FORWARD-LOOKING INFORMATION DISCLAIMER
Any forward-looking information contained in this report has not been reviewed or reported on by the
company’s external auditors.
MN von Aulock RB Huddy
Chief Executive Officer Chief Financial Officer
24 May 2017
INDEPENDENT AUDITOR’S REVIEW REPORT ON CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
TO THE SHAREHOLDERS OF TSOGO SUN HOLDINGS LIMITED
INTRODUCTION
We have reviewed the condensed consolidated financial statements of Tsogo Sun Holdings Limited and its
subsidiaries, set out in the provisional report, which comprise the condensed consolidated balance sheet
as at 31 March 2017 and the related condensed consolidated income statement, condensed consolidated
statement of comprehensive income, condensed consolidated statement of changes in equity and condensed
consolidated cash flow statement for the year then ended, and selected explanatory notes.
DIRECTORS’ RESPONSIBILITY FOR THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The directors are responsible for the preparation and presentation of these condensed consolidated financial
statements in accordance with the requirements of the JSE Limited Listings Requirements for provisional
reports, as set out in note 1 to the financial statements, and the requirements of the Companies Act of
South Africa, and for such internal control as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express a conclusion on these financial statements. We conducted our review in
accordance with International Standard on Review Engagements (“ISRE”) 2410, which applies to a review of
historical financial information performed by the independent auditor of the entity. ISRE 2410 requires
us to conclude whether anything has come to our attention that causes us to believe that the financial
statements are not prepared in all material respects in accordance with the applicable financial reporting
framework. This standard also requires us to comply with relevant ethical requirements.
A review of financial statements in accordance with ISRE 2410 is a limited assurance engagement. We perform
procedures, primarily consisting of making enquiries of management and others within the entity, as appropriate,
and applying analytical procedures, and evaluate the evidence obtained. The procedures performed in a review are
substantially less than those performed in an audit conducted in accordance with International Standards on
Auditing. Accordingly, we do not express an audit opinion on these financial statements.
CONCLUSION
Based on our review, nothing has come to our attention that causes us to believe that the condensed
consolidated financial statements of Tsogo Sun Holdings Limited and its subsidiaries for the year ended
31 March 2017 are not prepared, in all material respects, in accordance with the requirements of the
JSE Limited Listings Requirements for provisional reports, as set out in note 1 to the financial statements,
and the requirements of the Companies Act of South Africa.
PricewaterhouseCoopers Inc.
Director: B Humphreys
Registered Auditor
Johannesburg
24 May 2017
NOTES TO THE REVIEWED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 March 2017
1 BASIS OF PREPARATION
The condensed consolidated financial statements for the year ended 31 March 2017 have been prepared in
accordance with the requirements of the JSE Limited Listings Requirements for provisional reports and
the requirements of the Companies Act of South Africa. The Listings Requirements require provisional
reports to be prepared in accordance with the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards (“IFRS”) as issued by the International
Accounting Standards Board (“IASB”), the preparation and disclosure requirements of IAS 34 Interim
Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee and Financial Reporting Pronouncements as issued by Financial Reporting Standards Council
(“FRSC”). Chief Financial Officer, RB Huddy CA(SA), supervised the preparation of the condensed
consolidated financial statements. The accounting policies applied in the preparation of the
condensed consolidated financial statements are in terms of IFRS and are consistent with those
applied in the previous consolidated annual financial statements as at 31 March 2016 other than
as described in note 2. The condensed consolidated financial statements should be read in conjunction
with the annual financial statements for the year ended 31 March 2016, which have been prepared in
accordance with IFRS. These condensed consolidated financial statements for the year ended
31 March 2017 have been reviewed by PricewaterhouseCoopers Inc., and their unmodified review
conclusion is included above.
2 CHANGE IN ACCOUNTING POLICIES AND INTERPRETATIONS
Prior to the acquisition of HPF (refer note 4), the group accounted for its investment properties at
cost. HPF’s investment properties are accounted for at fair value, and therefore, on acquisition the
group changed its policy to comply with that of HPF for uniformity. The 31 March 2016 numbers in the
income statement, statement of other comprehensive income, cash flow statement, balance sheet and
statement of changes in equity have accordingly been restated. This change in accounting policy has
been applied retrospectively and has increased earnings per share by 1.5 cents from 186.8 cents to
188.3 cents for the year ended 31 March 2016. This change in accounting policy had no effect on
headline or adjusted headline earnings.
The group has adopted all the new, revised or amended accounting standards as issued by the IASB which
were effective for the group from 1 April 2016, none of which had a material impact on the group.
The group is in the process of assessing the possible impact of the applications of IFRS 9, 15 and
16 which have been issued but were not effective at year end.
3 FAIR VALUE ESTIMATION
As shown below, the group fair values its investment properties, interest rate swaps together with
its available-for-sale investments. There were no transfers into or out of level 3 financial
instruments.
Investment properties
The movement of investment properties for the year is as follows:
2017 2016
Reviewed Restated(1)
Rm Rm
Opening net carrying amount 108 121
Acquisition, maintenance and development
of investment properties 92 27
Disposals (106) (15)
Acquisition of subsidiary (note 4) 4 185 -
Transfers (67) (50)
Fair value adjustments recognised in profit or loss 757 25
Closing net carrying amount 4 969 108
(1) Restatement in respect of IAS 40 Investment Properties - refer note 2
The group’s investment properties have been categorised as level 3 values based on the inputs to the
valuation technique used. The group has elected to measure investment properties at fair value. The fair
value is determined by using the discounted cash flow method by discounting the rental income (based on
expected net cash flows of the underlying hotels) after considering the capital expenditure requirements.
The expected cash flows are discounted using an appropriate discount rate. The core discount rate is
calculated using the R186 (long bond) at the time of valuation, to which is added premiums for market
risk and equity and debt costs. The discount rate takes into account a risk premium associated with the
local economy as well as that specific to the local property market and the hotel industry. Fair values
are estimated annually by an external appointed valuer.
As at 31 March 2017 the significant unobservable inputs were as follows:
- A weighted average rental growth rate of 5.5%;
- A terminal capitalisation rate of 7.26%; and
- A risk-adjusted discount rate of 12.76%.
The table below indicates the sensitivities of the aggregate investment property portfolio by
increasing or decreasing value inputs as follows:
Increase Decrease
Rm Rm
5% change in the net cash flows 241 (241)
25bps change in the terminal capitalisation rate (116) 118
50bps change in the discount rate (85) 134
Interest rate swaps
The group has interest rate swaps used for hedge accounting and also interest rate swaps from HPF
that are not hedge accounted (with a net liability of R1 million) being level 2 fair value measurements.
The fair value of the derivatives used for hedge accounting is a net liability of R50 million
(31 March 2016: R72 million asset net) and is calculated as the present value of the estimated future
cash flows based on observable yield curves, which is consistent with the prior year.
Available-for-sale investment
During April 2016, aligned with the group’s desire to increase its exposure in the Western Cape province,
the group entered into a transaction with Sun International Limited (“SI”) and Grand Parade Investments
Limited (“GPI”) for the acquisition of a 20% equity interest in each of SunWest and Worcester for an
aggregate R1.35 billion, payable in 18 monthly instalments of R75 million each, funded from available
cash balances. Subsequently, the full amount of the liability was settled during the year under review,
and, therefore, the acquisition cost of R1.27 billion represents the discounted amount (the effective
interest of R48 million included in finance costs). Tsogo Sun has pre-emptive rights but no representation
on the board of directors of either company and has no operational responsibilities. Tsogo Sun also has no
access to any information regarding the companies except for that to which it has statutory rights as a
shareholder. This investment is classified as a level 3 fair value measurement and has been accounted for
as an available-for-sale financial asset.
At the end of each reporting period the non-current asset is remeasured and the increase or decrease
recognised in other comprehensive income. A discounted cash flow valuation was used to estimate the
fair value which equated to its cost of R1.27 billion. No adjustment to the carrying amount was
required. The valuation model considers the present value of net cash flows to be generated from
SunWest and Worcester, together with its operating capital expenditure taking into account expected
growth in gaming win and other revenue generated from non-gaming related activities. The expected net
cash flows are discounted using a risk-adjusted discount rate. Among other factors, the discount rate
estimation considers risks associated with the gaming and hospitality industry in which SunWest and
Worcester operates.
As at 31 March 2017 the significant unobservable inputs were as follows:
- Expected gaming win growth between 4.3% and 7.0%;
- Operating expenditure cost growth between 5.5% and 6.5%;
- Risk-adjusted discount rate of 12.3%; and
- Long-term growth rate of 5.6%.
The table below indicates the sensitivities of the valuation by increasing or decreasing value
inputs by 1%:
Increase Decrease
Rm Rm
Expected gaming win growth 265 (245)
Operating expenditure cost growth (203) 188
Risk-adjusted discount rate (185) 251
Long-term growth rate 143 (106)
Total 20 88
SI put option
In terms of the acquisition agreement of the SunWest and Worcester interests mentioned above, in
the event that any party acquires 35% or more of the issued ordinary shares of SI triggering a change
in control of the SI group, the group may elect to put its equity interests in SunWest and Worcester
to SI. SI can elect to either settle the put by the issue of new ordinary shares in SI and/or for a
cash consideration, based on the aggregate value of Tsogo Sun’s interest in SunWest and Worcester.
At the end of each reporting period the derivative is remeasured and the increase or decrease
recognised in the income statement. The derivative is calculated in accordance with the terms of
the put option agreement, effectively a 7.5 times Ebitda multiple valuation of the SunWest and
Worcester assets, less net debt, times the 20% shareholding the group holds. No derivative has
been recognised as the fair value of the option is Rnil at 31 March 2017.
4 BUSINESS COMBINATIONS
The following business acquisitions were concluded during the year under review:
Acquisition of HPF
The group acquired 55% of the HPF B-linked units (27% of the voting interest) in August 2015.
During the year under review, Tsogo Sun acquired a controlling stake through the injection of hotel
assets such that the issue of shares to the group resulted in the group owning 50.6% of the shares
following the reconstitution of HPF’s capital into a single class of shares. The remaining
administrative conditions precedent to the transaction were fulfilled in August 2016 and the effective
date of the transaction was 1 September 2016.
The group acquired HPF in keeping with its strategy of creating an entertainment and hospitality
focused REIT.
The fair valuation of the net assets acquired are greater than the fair value of the consideration
paid at the date of acquisition, and therefore the group has recognised a bargain purchase of
R13 million in the income statement with no intangible assets having been identified in respect
of this acquisition. The acquired business contributed incremental revenues of R299 million and
adjusted earnings of R37 million to the group for the period from date of control to 31 March 2017.
Had the acquisition occurred on 1 April 2016, group income would have increased by an additional
R128 million and adjusted earnings would have decreased by R5 million due to the impact of
seasonality on HPF’s earnings. These amounts have been calculated using the group’s accounting
policies. The fair value of net assets acquired is as follows:
Rm
Investment properties 4 185
Property, plant and equipment 742
Other non-current assets 6
Other current assets 48
Cash and cash equivalents 189
Interest-bearing borrowings (1 725)
Other current liabilities (221)
Total identifiable net assets acquired 3 224
Less: Non-controlling interests acquired from HPF (1 592)
Net assets acquired from HPF 1 632
Less: Purchase consideration in the form of
hotel assets to non-controlling interests which comprises: (1 321)
Consideration in the form of assets to non-controlling interests (353)
Gain from transacting with non-controlling interests (968)
Less: Previously held shares (27% voting interest)
acquired at fair value (298)
Bargain purchase on acquisition 13
Net inflow of cash on acquisition of HPF:
Cash consideration to acquire HPF -
Add: Cash balances acquired with HPF 189
Net inflow of cash - investing activities 189
On acquiring HPF the group transacted with non-controlling interests. The fair value of the
non-controlling interests acquired was R1.592 billion in exchange for the injection of hotel
assets to HPF with a fair value of R1.321 billion of which the non-controlling interests’
portion was R353 million.
No deferred tax was accounted for on this business combination due to HPF’s REIT tax status.
Acquisition of Garden Court Umhlanga and StayEasy Pietermaritzburg hotel businesses
Cullinan concluded agreements with Liberty to acquire two hotel businesses, the Garden Court Umhlanga
and the StayEasy Pietermaritzburg. The effective date was 1 October 2016.
The acquired businesses were previously managed by the group and the acquisition thereof is in line
with management’s strategy to own its operations. The fair values of the net assets acquired are
greater than the fair values of the consideration paid at the date of acquisition, and therefore
the group has recognised a bargain purchase of R69 million in the income statement with no intangible
assets having been identified on these acquisitions. In line with the group’s accounting policies, the
fair value of the assets acquired was obtained by applying a valuation technique performed on a discounted
cash flow basis. The acquired businesses contributed incremental revenues of R52 million and adjusted
earnings of R5 million to the group for the period from acquisition to 31 March 2017. Had the acquisition
occurred on 1 April 2016, group income would have increased by an additional R51 million and adjusted
earnings would have increased by an additional R7 million. These amounts have been calculated excluding
the funding impact of the acquisition and using the group’s accounting policies. The fair value of net
assets acquired is as follows:
Rm
Property, plant and equipment 379
Other current assets
- Trade and other receivables 4
Other current liabilities
- Trade and other payables (1)
- Accruals and other liabilities (3)
Total identifiable net assets acquired 379
Purchase consideration paid in cash - investing activities (310)
Gain on bargain purchase recognised in profit and loss 69
5 TRANSACTIONS WITH NON-CONTROLLING INTERESTS
The following transactions with non-controlling interests were concluded during the year under review:
Acquisition of remaining 40% Liberty interest in Cullinan
During the 2015 year end the group entered into a call option over Liberty’s 40% shareholding in Cullinan
and Liberty had a corresponding put option, both exercisable at the fair value of the shares. A financial
liability for the put option and a corresponding debit of R493 million to transactions with non-controlling
interests (in “Other reserves”) was recognised on initial recognition. At the end of each reporting period
the liability was remeasured and the increase or decrease recognised in the income statement. An agreement
was concluded in December 2016 with Liberty for the acquisition by the group of the remaining 40% of the
issued share capital of Cullinan held by Liberty, and all of Liberty’s claims on loan accounts against
Cullinan howsoever arising, with effect from 1 December 2016, for a consideration of R1.03 billion. A fair
value gain was recognised on the settlement of the derivative of R35 million and has been included in
finance costs. On acquisition of the 40% Liberty interest in Cullinan the group acquired the non-controlling
interests resulting in a decrease in the non-controlling interests of R306 million and a reversal of
R493 million being the original put option mentioned above, resulting in a net debit to retained earnings
of R187 million.
Rm
Purchase consideration for 40% equity interest in
Cullinan made up as follows:
Settlement of loan (including capitalised interest) with Liberty (572)
Settlement of the put liability (458)
(1 030)
Outflow of cash to acquire 40% interest in Cullinan:
Borrowings repaid - financing activities (508)
Accrued finance costs settled - operating activities (64)
Purchase consideration for non-controlling interests
- financing activities (458)
Total cash outflow to Liberty (1 030)
Acquisition of remaining Mykonos and Blackrock casinos’ non-controlling interests
West Coast Leisure Proprietary Limited (Mykonos Casino) acquired 29.64% of its shares from Club Mykonos
Langebaan with effect from 12 December 2016 in the form of a share buy-back, for a purchase consideration
of R193 million, including interest. The group now effectively owns a 100% interest in West Coast Leisure
Proprietary Limited. This share buy-back resulted in a decrease to the non-controlling interests of
R37 million.
The group also acquired the remaining 1.92% shareholding in Tsogo Sun Proprietary Limited (Blackrock Casino)
for a purchase consideration of R5 million.
The aggregate of these acquisitions from non-controlling interests is R198 million with a resulting decrease
in the related non-controlling interests of R37 million.
HPF non-controlling interests
On acquiring HPF the group transacted with non-controlling interests. The fair value of the non-controlling
interests acquired was R1.592 billion in exchange for the injection of hotel assets to HPF with a fair value
of R1.321 billion of which the non-controlling interests’ portion was R353 million (refer note 4).
6 SEGMENT INFORMATION
In terms of IFRS 8 Operating Segments the chief operating decision maker has been identified as the group’s
Chief Executive Officer (“CEO”) and the Group Executive Committee (“GEC”). Management has determined the
operating segments based on the reports reviewed by the chief operating decision maker. There has been no
change in the basis of segmentation or in the basis of measurement of segment profit or loss from the last
annual financial statements, other than the HPF operations being included in the South African hotels
division with effect 1 September 2016 (the acquisition date - refer note 4).
The group’s CEO and GEC assess the performance of the operating segments based on Ebitdar. The measure
excludes the effects of long-term incentives and the effects of non-recurring expenditure. The measure
also excludes all headline earnings adjustments, impairments and fair value adjustments on non-current
and current assets and liabilities. Interest income and finance costs are not included in the results for
each operating segment as this is driven by the group treasury function which manages the cash and debt
position of the group.
7 CAPITAL COMMITMENTS
The board has committed a total of R5.9 billion for maintenance and expansion capital items at its gaming
and hotel properties of which R4.3 billion is anticipated to be spent during the next financial year.
In total, R730 million of the committed capital expenditure has been contracted for.
8 CONTINGENT LIABILITIES
The group had no significant contingent liabilities as at 31 March 2017.
9 RELATED PARTY TRANSACTIONS
The group had no significant related party transactions during the year under review.
10 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE
Sandton Eye and Real Right of Extension
Shareholders are referred to the announcement released on the Stock Exchange News Service of the JSE
(“SENS”) by HPF on Tuesday, 11 April 2017, wherein shareholders were advised that HPF Properties
Proprietary Limited, an indirect wholly-owned subsidiary of Tsogo Sun group has, subject to certain
conditions precedent, concluded:
- an agreement with Savana Property Proprietary Limited to acquire various sections and exclusive use
areas of the Sandton Eye sectional title scheme; and
- an agreement with Sandton Isle Investments Proprietary Limited to acquire an existing Real Right
of Extension in the scheme for an aggregate purchase consideration of R302 million.
Acquisition of 29 hotel properties by HPF from Tsogo Sun
Shareholders are referred to the announcement released on SENS by HPF on Thursday, 18 May 2017 of
the transaction agreements entered into between HPF and Southern Sun Hotels Proprietary Limited, both
subsidiaries of the group, whereby HPF will acquire two Tsogo Sun subsidiaries which in aggregate
hold a portfolio of 29 hotel properties for an aggregate purchase consideration of R3.6 billion to
be settled R1.0 billion in cash and R2.6 billion in shares.
Subject to receiving the requisite JSE approvals, HPF intends to undertake a fully underwritten rights
offer to raise R1.8 billion (the “Rights Offer”). Further details of the Rights Offer will be announced
in due course. The Rights Offer proceeds will be used to partially settle the cash portion of the purchase
consideration referred to above, with the balance being utilised to reduce HPF’s interest-bearing debt.
This transaction is subject to shareholder approval at the HPF general meeting scheduled for 5 July 2017.
The impact of this transaction has not been determined until shareholder approval is obtained. The impact
of this transaction will be a transaction with the non-controlling interests of HPF whereby non-controlling
interests in HPF will be acquired in exchange for an injection of hotel properties to HPF, for which the
non-controlling interests will share in a portion thereof.
Dividend declaration
Subsequent to the company’s year end, on 23 May 2017, the board of directors declared a final gross cash
dividend of R70.0 cents per share in respect of the year ended 31 March 2017. The aggregate amount of the
dividend, which will be paid on 19 June 2017 out of retained earnings at 31 March 2017, not recognised as
a liability at year end is R676 million.
CONDENSED CONSOLIDATED INCOME STATEMENT
for the year ended 31 March 2017 2016
Change Reviewed Restated(1)
% Rm Rm
Net gaming win 2 7 483 7 361
Rooms revenue 11 3 078 2 784
Food and beverage revenue 6 1 434 1 353
Property rental income 445 133
Other revenue 782 652
Income 8 13 222 12 283
Gaming levies and Value Added Tax (1 557) (1 531)
Property and equipment rentals (303) (287)
Amortisation and depreciation (846) (812)
Employee costs (3 044) (2 871)
Other operating expenses (3 530) (3 382)
Gain on fair value adjustment of investment properties 757 25
Operating profit 37 4 699 3 425
Interest income 43 35
Finance costs (1 066) (892)
Share of profit of associates and joint ventures 38 29
Profit before income tax 3 714 2 597
Income tax expense (665) (777)
Profit for the year 3 049 1 820
Profit attributable to:
Equity holders of the company 2 507 1 802
Non-controlling interests 542 18
3 049 1 820
Number of shares in issue (million) 957 957
Weighted average number of shares in issue (million) 957 957
Basic and diluted earnings per share (cents) 39 262.0 188.3
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2017 2016
Reviewed Restated(1)
Rm Rm
Profit for the year 3 049 1 820
Other comprehensive income for the year, net of tax
Items that may be reclassified subsequently to
profit or loss: (194) 332
Cash flow hedges (121) 162
Currency translation adjustments (96) 215
Income tax relating to items that may subsequently
be reclassified to profit or loss 23 (45)
Items that may not be reclassified subsequently
to profit or loss: 2 3
Remeasurements of post-employment defined benefit liability 3 4
Income tax relating to items that may not subsequently
be reclassified to profit or loss (1) (1)
Total comprehensive income for the year 2 857 2 155
Total comprehensive income attributable to:
Equity holders of the company 2 315 2 136
Non-controlling interests 542 19
2 857 2 155
(1) Restatement in respect of IAS 40 Investment Properties - refer note 2
SUPPLEMENTARY INFORMATION
for the year ended 31 March 2017 2016
Change Reviewed Restated(1)
% Rm Rm
Reconciliation of earnings attributable to
equity holders of the company to headline
earnings and adjusted headline earnings
Profit attributable to equity holders
of the company 2 507 1 802
Loss on disposal of property, plant and equipment 12 5
Impairment of property, plant and equipment 77 7
Gain on disposal of investment property (36) -
Gain on fair value adjustment of investment properties (757) (25)
Impairment of intangibles 1 10
Gain on deemed disposal of financial asset
classified as available-for-sale (46) -
Gain on bargain purchases (82) -
Share of associates’ headline earnings adjustments 2 -
Total tax effects of adjustments (27) 1
Total non-controlling interest effects of adjustments 382 -
Headline earnings 13 2 033 1 800
Other exceptional items (net) included in operating profit 44 44
(Gain)/loss on remeasurement of put liability (35) 7
Deferred tax liability derecognised on plant, property
and equipment on sale to the group’s REIT subsidiary (56) -
Deferred tax asset derecognised on foreign subsidiary
assessed losses 19 -
Change in capital gains tax inclusion rate on at
acquisition assets of subsidiaries - 54
Share of associates’ exceptional items (11) -
Total tax effects of adjustments - (6)
Total non-controlling interest effects of adjustments (7) (18)
Adjusted headline earnings 6 1 987 1 881
Number of shares in issue (million) 957 957
Weighted average number of shares in issue (million) 957 957
Basic and diluted HEPS (cents) 212.4 188.1
Basic and diluted adjusted HEPS (cents) 6 207.6 196.5
Reconciliation of operating profit to Ebitdar(2)
Ebitdar pre-exceptional items is made up as follows:
Operating profit 4 699 3 425
Add:
Property rentals 242 219
Amortisation and depreciation 846 812
Long-term incentive expense 49 46
5 836 4 502
(Less)/add: Exceptional (gains)/losses (787) 41
Loss on disposal of property, plant and equipment 12 5
Impairment of property, plant and equipment 77 7
Gain on disposal of investment property (36) -
Gain on fair value adjustment of investment properties (757) (25)
Impairment of intangibles 1 10
Gain on deemed disposal of financial asset classified
as available-for-sale (46) -
Gain on bargain purchases (82) -
Transaction costs 27 26
Pre-opening expenses - 12
Impairment of financial instruments, net of recoveries 4 4
Fair value loss on interest rate swaps 6 -
Restructuring costs 7 2
Ebitdar 11 5 049 4 543
(1) Restatement in respect of IAS 40 Investment Properties - refer note 2
(2) The measure excludes the effects of long-term incentives, non-recurring expenditure, headline
earnings adjustments including impairments and fair value adjustments on non-current and current assets
and liabilities and other exceptional items
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March 2017 2016
Reviewed Restated(1)
Rm Rm
Cash flows from operating activities
Operating profit 4 699 3 425
Non-cash movements 425 1 248
Increase in working capital (348) (297)
Cash generated from operations 4 776 4 376
Interest received 43 31
Finance costs paid (1 119) (832)
3 700 3 575
Income tax paid (627) (657)
Dividends paid to shareholders (975) (878)
Dividends paid to non-controlling interests (113) -
Pre-acquisition dividend paid (133) -
Dividends received 134 51
Net cash generated from operating activities 1 986 2 091
Cash flows from investment activities
Purchase of property, plant and equipment (1 238) (1 377)
Proceeds from disposals of property, plant and equipment 1 9
Acquisition, maintenance and development of
investment properties (92) (27)
Proceeds from disposal of investment property 144 19
Purchase of intangible assets (14) (10)
Purchase of available-for-sale financial assets (1 272) (252)
Acquisition of subsidiary, net of cash acquired 189 (12)
Acquisition of businesses (310) -
Acquisition of interest in associate - (315)
Other loans and investments repaid 3 18
Other loans and investments made (2) -
Net cash utilised for investment activities (2 591) (1 947)
Cash flows from financing activities
Borrowings raised 4 156 485
Borrowings repaid (2 651) (1 061)
Acquisition of non-controlling interests (655) -
Decrease in amounts due by share scheme participants 6 9
Net cash generated from/(utilised for) financing activities 856 (567)
Net increase/(decrease) in cash and cash equivalents 251 (423)
Cash and cash equivalents at beginning of the year, net
of bank overdrafts 479 883
Foreign currency translation (5) 19
Cash and cash equivalents at end of the year,
net of bank overdrafts 725 479
(1) Restatement in respect of IAS 40 Investment Properties - refer note 2
CONDENSED CONSOLIDATED BALANCE SHEET
as at 31 March 2017 2016
Reviewed Restated(1)
Rm Rm
ASSETS
Non-current assets
Property, plant and equipment 15 556 14 370
Investment properties 4 969 108
Goodwill and other intangible assets 6 567 6 582
Investments in associates and joint ventures 609 620
Available-for-sale financial assets 1 272 252
Non-current receivables 60 68
Derivative financial instruments - 74
Deferred income tax assets 121 185
29 154 22 259
Current assets
Inventories 115 125
Non-current assets held for sale 66 -
Trade and other receivables 682 654
Derivative financial instruments 14 15
Current income tax assets 78 122
Cash and cash equivalents 2 424 2 492
3 379 3 408
Total assets 32 533 25 667
EQUITY
Capital and reserves attributable to equity holders of the company
Ordinary share capital and premium 4 576 4 576
Other reserves 874 (232)
Retained earnings 5 321 3 974
Total shareholders’ equity 10 771 8 318
Non-controlling interests 2 685 654
Total equity 13 456 8 972
LIABILITIES
Non-current liabilities
Interest-bearing borrowings 9 439 8 346
Derivative financial instruments 37 492
Deferred income tax liabilities 2 029 2 059
Provisions and other liabilities 511 509
12 016 11 406
Current liabilities
Interest-bearing borrowings 5 098 3 394
Derivative financial instruments 28 17
Trade and other payables 1 454 1 240
Provisions and other liabilities 385 510
Current income tax liabilities 96 128
7 061 5 289
Total liabilities 19 077 16 695
Total equity and liabilities 32 533 25 667
(1) Restatement in respect of IAS 40 Investment Properties - refer note 2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of the company
Ordinary
share Non- Total
capital and Other Retained controlling equity
premium reserves earnings Total interests Rm
Rm Rm Rm Rm Rm
Balance at 1 April 2015 as
previously reported 4 576 (442) 2 917 7 051 635 7 686
Recognition of fair value of investment
properties net of deferred tax - - 9 9 - 9
Balance at 1 April 2015 restated(1) 4 576 (442) 2 926 7 060 635 7 695
Total comprehensive income - 331 1 805 2 136 19 2 155
Profit for the year - - 1 802 1 802 18 1 820
Other comprehensive income - 331 3 334 1 335
Transfer from share-based payment
reserve to retained earnings - (121) 121 - - -
Ordinary dividends - - (878) (878) - (878)
Balance at 31 March 2016 restated(1) 4 576 (232) 3 974 8 318 654 8 972
Total comprehensive income - (194) 2 509 2 315 542 2 857
Profit for the year - - 2 507 2 507 542 3 049
Other comprehensive income - (194) 2 (192) - (192)
Settlement of Cullinan put liability
with non-controlling interests - 493 (187) 306 (306) -
Consideration to HPF non-controlling
interests in hotel assets - 968 - 968 353 1 321
Acquisition of non-controlling
interests from HPF - - - - 1 592 1 592
Acquisition of Mykonos and Blackrock casinos’
non-controlling interests - (161) - (161) (37) (198)
Ordinary dividends - - (975) (975) (113) (1 088)
Balance at 31 March 2017 (reviewed) 4 576 874 5 321 10 771 2 685 13 456
(1) Restatement in respect of IAS 40 Investment Properties - refer note 2
SEGMENTAL ANALYSIS
for the year ended 31 March Amortisation
Income(1) Ebitdar(2) Ebitdar margin and depreciation
2017 2016 2017 2016 2017 2016 2017 2016
Rm Rm Rm Rm % % Rm Rm
Montecasino 2 694 2 674 1 196 1 194 44.4 44.7 111 95
Suncoast 1 732 1 701 810 791 46.8 46.5 88 91
Gold Reef City 1 450 1 380 549 525 37.9 38.1 109 96
Silverstar 735 735 248 254 33.7 34.6 82 86
Golden Horse 392 369 176 163 44.8 44.2 34 33
Emnotweni 383 384 145 152 37.9 39.5 29 27
The Ridge 382 391 147 160 38.6 40.9 29 26
Hemingways 306 318 95 113 31.2 35.4 40 42
Garden Route 225 218 96 92 42.8 42.3 15 14
The Caledon 175 163 54 43 30.6 26.2 10 8
Blackrock 170 168 65 63 37.9 37.7 12 11
Mykonos 162 156 72 68 44.5 44.0 11 9
Goldfields 133 134 41 44 31.0 32.4 10 10
Other gaming operations 195 109 (154) (233) 14 15
Total gaming operations 9 134 8 900 3 540 3 429 38.8 38.5 594 563
South African hotels division(3) 3 509 2 744 1 359 920 38.7 33.5 213 193
Offshore hotels division 635 691 108 169 17.0 24.5 35 50
Pre-foreign exchange losses 146 192 23.0 27.8
Foreign exchange losses (38) (23)
Corporate(3)(4) (56) (52) 42 25 4 6
Group 13 222 12 283 5 049 4 543 38.2 37.0 846 812
(1) All revenue and income from gaming and hotel operations is derived from external customers. No one customer
contributes more than 10% to the group’s total revenue
(2) All casino units are reported pre-internal gaming management fees
(3) Includes R55 million (2016: R53 million) intergroup management fees. South African hotels division also includes
HPF with effect from 1 September 2016 - refer note 4
(4) Includes the treasury and management function of the group
DIRECTORS: JA Copelyn (Chairman)* MN von Aulock (Chief Executive Officer) RB Huddy (Chief Financial Officer)
MSI Gani** MJA Golding* BA Mabuza (Lead Independent)** VE Mphande* JG Ngcobo** Y Shaik*
(*Non-executive Director **Independent Director)
COMPANY SECRETARY: GD Tyrrell
REGISTERED OFFICE: Palazzo Towers East, Montecasino Boulevard, Fourways, 2055 (Private Bag X200, Bryanston, 2021)
TRANSFER SECRETARIES: Link Market Services South Africa Proprietary Limited, 13th Floor, Ren nie House, 19 Ameshoff
Street, Braamfontein, 2001 (PO Box 4844, Johannesburg, 2000)
SPONSOR: Deutsche Securities (SA) Proprietary Limited, 3 Exchange Square, 87 Maude Street, Sandton, 2196
(Private Bag X9933, Sandton, 2146)
www.tsogosun.com
Date: 24/05/2017 07:05:00 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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