Wrap Text
Unreviewed Condensed Consolidated Results for the Six Months Ended 31 March 2017
CULLINAN HOLDINGS LIMITED
TOURISM AND LEISURE
(Registration number 1902/001808/06)
(CUL ISIN: ZAE000013710)
(CULP ISIN: ZAE000001947)
CULLINAN HOLDINGS LIMITED
TOURISM, LEISURE AND FINANCIAL SERVICES
UNREVIEWED CONDENSED CONSOLIDATED RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2017
GROUP FINANCIAL HIGHLIGHTS
Group condensed statement of financial position
Unreviewed Audited
six months Year end
31 March 30 September
2017 2016
R'000 R'000
ASSETS
Non-current assets 439 626 409 239
Property, plant and equipment 282 323 255 428
Investment properties 13 350 13 350
Goodwill 100 405 100 030
Intangible assets 21 181 20 595
Investment in associates and joint ventures 17 633 15 133
Deferred tax asset 4 734 4 703
Current assets 755 143 728 833
Inventories 49 009 43 175
Trade and other receivables 480 522 441 214
Other financial assets 11 242 3 829
Current tax receivable 96 10 921
Cash and cash equivalents 214 274 229 694
Total assets 1 194 769 1 138 072
EQUITY AND LIABILITIES
Share capital 162 973 157 634
Reserves 38 696 38 411
Retained income 334 139 290 812
Non-controlling interest 2 320 3 291
Total shareholders' equity 538 128 490 148
Non-current liabilities 65 148 66 796
Loans from shareholders 45 000 45 000
Other financial liabilities 500 500
Operating lease liability 7 447 9 073
Deferred tax liability 12 201 12 223
Current liabilities 591 493 581 128
Trade and other payables 577 752 575 507
Other financial liabilities 38 942
Operating lease liability 706 857
Current tax payable 5 054 1 496
Provisions 7 562 1 956
Dividend payable 17 17
Bank overdraft 364 353
Total equity and liabilities 1 194 769 1 138 072
Group condensed statement of comprehensive income
Unreviewed Unreviewed
six months six months
31 March 31 March
2017 2016
Restated
R'000 R'000
Revenue 525 761 470 543
Turnover 521 068 463 653
Cost of sales (168 299) (169 461)
Gross profit 352 769 294 192
Other income 17 365 21 232
Operating expenses (301 501) (254 427)
Trading profit 68 633 60 997
Investment revenue 4 693 6 890
Finance expenses (2 429) (3 055)
Income from equity accounted investments 2 499 117
Profit before taxation 73 396 64 949
Tax expense (22 612) (18 154)
Profit for the period 50 784 46 795
Other comprehensive income:
Exchange differences on translating
foreign operations 172 (421)
Effects of cash flow hedges - (1 416)
Total comprehensive income for the 50 956 44 958
period
Profit attributable to:
equity holders 51 329 46 447
non-controlling interest (545) 348
Total comprehensive income attributable to:
equity holders 51 501 44 610
non-controlling interest (545) 348
Basic earnings per share (cents) 6.41 5.80
Diluted earnings per share (cents) 6.30 5.70
Group condensed statements of changes in equity
Unreviewed Unreviewed
six months six months
31 March 31 March
2017 2016
R'000 R'000
Ordinary share capital
Balance at beginning of period 8 002 8 002
Issue of shares 28 -
Balance at end of period 8 030 8 002
Share premium
Balance at beginning of period 149 086 149 086
Issue of shares 5 311 -
Balance at end of period 154 397 149 086
Share capital reduction reserve fund
Balance at beginning and end of period 20 876 20 876
Capital redemption reserve fund
Balance at beginning and end of period 4 4
Foreign currency translation reserve
Balance at beginning of period 881 (1 574)
- Reserve on translation of foreign subsidiary 172 (421)
Balance at end of period 1 053 (1 995)
Revaluation reserve
Balance at beginning and end of period 626 870
Share-based payment reserve
Balance at beginning of period 16 024 10 685
- Share options exercised (5 058) -
- Expense for the period 5 171 3 038
Balance at end of period 16 137 13 723
Hedging reserve
Balance at beginning of period - (7 856)
- Expense for the period - (1 416)
Balance at end of period - (9 272)
Retained income
Balance at beginning of period 290 812 236 497
Attributable profit for period 51 329 46 447
Ordinary dividend paid (8 002) (8 002)
Balance at end of period 334 139 274 942
Non-controlling interest
Balance at beginning of period 3 291 3 218
- Profit attributable to non-controlling interest (545) 348
- Dividend paid to non-controlling interest (426) (732)
Balance at end of period 2 320 2 834
Group condensed statement of cash flows
Unreviewed Unreviewed
six months six months
31 March 31 March
2017 2016
R'000 R'000
Trading profit 68 633 60 997
Depreciation and amortisation 21 059 20 986
Other non-cash items 2 700 9 195
Cash generated before working capital changes 92 392 91 178
(Increase)/decrease in inventories (5 834) 5 048
(Increase)/decrease in receivables (39 308) 63 683
Increase/(decrease) in payables 2 229 (58 112)
Cash generated by operations 49 479 101 797
Dividends paid (8 002) (8 002)
Net finance charges 2 264 3 835
Taxation paid (8 229) (8 763)
Net cash inflow from operating activities 35 512 88 867
Additions to property, plant and equipment (48 528) (28 306)
Net cash outflow from investing activities (48 528) (28 306)
Net cash (outflow) from financing activities (145) (732)
Net (decrease)/increase in cash
and cash equivalents (13 161) 59 829
Effect of exchange rate changes on cash
and cash equivalents (2 270) (1 077)
Cash and cash equivalents
at beginning of the period 229 341 108 369
Cash and cash equivalents
at end of the period 213 910 167 121
Notes
1. Basis of preparation
The unreviewed condensed consolidated results for the six months ended 31 March 2017 have been prepared in
accordance with and contain information required by International Accounting Standard (IAS) 34: Interim Financial
Reporting, as well as the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the
Listings Requirements of the Johannesburg Stock Exchange ("JSE") and the South African Companies Act, 71 of
2008, as amended. The accounting policies as well as the methods of computation used in the preparation of the
reviewed results for the six months ended 31 March 2017, are in terms of the International Financial Reporting
Standards (IFRS) and are consistent with those applied in the audited annual financial statements for the year
ended 30 September 2016. The unreviewed results are presented in Rands, which is Cullinan Holdings Limited's
presentation currency.
The unreviewed condensed consolidated interim results for the six months ended 31 March 2017 have been
prepared under the supervision of D Standage CA(SA), the financial director of the group.
2. Notes to the statement of comprehensive income
Unreviewed Unreviewed
six months six months
31 March 31 March
2017 2016
Ordinary shares ('000)
- In issue 803 033 800 173
- Weighted average 800 650 800 173
- Diluted weighted average 814 245 815 221
R'000 R'000
Determination of headline earnings
Earnings attributable to ordinary shareholders 51 329 46 447
Headline earnings 51 329 46 447
Headline earnings per share (cents) 6.39 5.80
Diluted headline earnings per share (cents) 6.30 5.70
Dividends per share (cents) 1.00 1.00
Net asset value per share (cents) 67.21 57.44
3. Shares issued
During the period, 2 810 000 shares were issued for options exercised.
4. Segmental reporting
Travel and Marine and Financial Corporate
Tourism Boating Services Services Total
R'000 R'000 R'000 R'000 R'000
31 March 2017
Revenue 459 858 34 480 21 154 10 269 525 761
Trading profit 91 629 2 861 2 023 (27 880) 68 633
31 March 2016
Revenue (Restated) 361 788 35 101 66 459 7 195 470 543
Trading profit 74 092 2 720 2 834 (18 649) 60 997
Segmental reporting is aligned with the information that the chief operating decision maker
reviews in order to make decisions about the allocation of resources across the business.
5. Fair value information
Level 1 Level 2 Level 3
R'000 R'000 R'000
31 March 2017
Investment property 13 350
Foreign exchange contracts 11 204
31 March 2016
Investment property 10 900
Foreign exchange contracts (11 756)
Fair value hierarchy
Level 1 - Quoted unadjusted prices in active markets for identical assets or liabilities that the group can access
at measurement date
Level 2 - Inputs other than quoted prices included in level 1 that are observable for the asset or liability
either directly or indirectly
Level 3 - Unobservable inputs for the asset or liability
There have been no transfers between the levels.
Details of valuation
Investment property
The effective date of the revaluations was 30 September 2016. Revaluations were performed by independent valuers,
Penny Brothers Brokers & Valuers (Pty) Limited, Holthuizen and Chengiah Property Valuers, H Tryhou Property Consultants
and 3600 Properties. None of these independent valuers are connected to the group and have recent experience in location
and category of the investment properties being valued. In determining the valuation, the valuator referred to current market
comparable sales of similar properties in similar locations. No further valuations are deemed necessary during the year as the
property values in the areas have remained relatively stable.
The valuations were based on open market value for existing use.
Foreign exchange contracts
Forward foreign exchange contracts included in financial liabilities at fair value through profit and loss are measured to fair
value using quoted market prices (mark to market) provided by the Standard Bank of South Africa Limited.
6. Comparatives
In prior years, foreign exchange gains were included in miscellaneous other revenue as travel costings are very closely integrated
with foreign exchange rates used. However the nature of these exchange gains/losses have changed and are no longer closely
associated with costings. We therefore believe that these gains will be more correctly reflected within other income and have been
classified retrospectively.
OVERVIEW
We are satisfied with our group performance for the six months to 31 March 2017, which saw group revenue increase by 12% to R526m
(2016: R471m) and group profit before tax increase by 13% to R73.3m (2016:R64.9m). The group generated R49m (2016: R102m) in cash from
operations and ended the six period with R214m in cash resources (2016: R167m). Cash generated was down when compared to March 2016 -
primarily due to the increase in debtors as a result of increased sales in the Inbound business.
As mentioned above, the six month period to March 2017 has seen a good performance from our inbound tourism businesses after a poor
2016 year. The performance of the coach transport and touring business units is closely aligned with inbound tourism and also performed
well.
The marine division performed acceptably,whilst our local travel businesses generally held their own, with areas showing some weakness
during the period. The weakness was as a result of a weaker rand and a more challenging local South African economy.
We are pleased to report that the trade finance business is holding up despite a challenging local economy, and we remain confident that
we can continue to grow the financial services division.
The group gearing position remains relatively low. The R100m loan facility concluded with The Travel Corporation in 2014 remains in place.
The group currently utilises R45m of the facility which was established to provide backup funding for the financial services division.
As mentioned in our year end report, the company continues to re-invest in improvements to the business. We continue to improve and expand
our coach fleet and depots, with R48m in capital expenditure invested in the 6 month period to March 2017, and a further R45m planned to
September 2017. This will assist in ensuring that the brand leadership position of our coach fleet is maintained.
Looking at our non-financial measures of performance, we are pleased to report that 28 staff have begun our internal mentorship programme
for the 2017 year (169 staff have graduated since the program was started). The mentorship programme is aimed at upskilling and developing
employees in our group and has significantly contributed towards personal growth and career advancement thus far.
The group is a member of The Treadright Foundation, established by The Travel Corporation Ltd to assist in achieving sustainable tourism.
The Treadright Foundation is a non-profit foundation which aims to encourage sustainabletourism through conservation, leadership and
support for communities. It has undertaken over 40 projects globally, including projects focused on preventing the destruction of
endangered species, such as rhino, sharks and lions. The Foundation also supports a number of community projects amongst its various other
projects.
Future prospects
We remain optimistic for the 2017 year, despite a challenging environment with increased uncertainty in the world. Forward bookings are
positive at present and the inbound tourism market is expected to remain upbeat for the balance of 2017.
Aside from investing in our business to continue the organic growth, we will continue to look for opportunities and acquisitions in the
tourism and financial services sectors, whilst maintaining our focus on delivering exceptional service and value to our customers.
The group has declared an interim dividend of 1c per share. We would like to take this opportunity to thank our board, executives, our
staff and our partners for their support and for a great effort and contribution during the first half of the 2017 year.
On Behalf of the Board
G Tollman M Tollman D Standage
Chairman Chief Executive Officer Financial Director
6 June 2017
Auditors
Mazars were re-elected as auditors in 2017.
Sponsor
Arbor Capital Sponsors (Pty) Limited
(Registration number 2006/033725/07)
Directors
Executive: M TOLLMAN, LA PAMPALLIS, DK STANDAGE, L TOLLMAN
Non-Executive: G TOLLMAN (Chairman) #, DD HOSKING #, R ARENDSE, M BURTON, A MENDIRATTA #
# Non-resident
Transfer secretaries
Computershare Investor Services (Pty) Limited, Company secretary
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 B Allison
(PO Box 61051, Marshalltown, 2107)
For further information on group activities, please write to: Registered office
The Company Secretary, Cullinan Holdings Limited, 6 Hood Avenue, Rosebank, 2196
PO Box 41032, Craighall, 2024
(Registration number 1902/001808/06)
(CUL ISIN: ZAE000013710)
(CULP ISIN: ZAE000001947)
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