To view the PDF file, sign up for a MySharenet subscription.

PHUMELELA GAMING & LEISURE LIMITED - Preliminary annual financial results for the year ended 31 July 2017 and dividend declaration

Release Date: 06/10/2017 07:05
Code(s): PHM     PDF:  
Wrap Text
Preliminary annual financial results for the year ended 
31 July 2017 and dividend declaration

Phumelela Gaming and Leisure Limited 
(Incorporated in the Republic of South Africa) 
(Registration number: 1997/016610/06) 
Share Code: PHM ISIN: ZAE000039269 


Phumelela Gaming and Leisure Limited preliminary annual financial results for the year ended 
31 July 2017 and dividend declaration

Operational features of the year
-  Supabets and Interbet investments provide excellent synergistic benefits
-  Supabets and Interbet are  making a healthy contribution
-  International division increased profits despite adverse currency movements          
-  Fixed odds returned a pleasing result 
-  Continuing to invest in South African horseracing  

Financial features of the year
-  Earnings per share up 3% to 168,46 cents 
-  Headline earnings per share up 2% to 167,96 cents   
-  Headline earnings per share in constant currency up 30% to 214,34 cents 


RESULTS ANALYSIS

RESULTS OVERVIEW
The Group result for 2017 is characterised by continued good growth from international revenue 
sources, a pleasing performance from our wholly owned fixed odds business as well as our 
investments in Supabets and Interbet, and a disappointing performance from our traditional Tote 
operations.        

Phumelela has continued to deliver on its strategy of diversifying revenue sources through the 
introduction of new betting products, the addition of international territories and by investing in 
businesses that are complementary and value-adding. 

Our diversification and internationalisation strategy is serving us well, underpinning the 
competitiveness of Phumelela and the commercial viability of our business model. 

Equity accounted profits from local and international sources contributed 81% of Group pre-tax 
profit. Although accounted for by the equity method, there is active executive management 
involvement in our strategic Premier Gateway International("PGI"), Interbet and Supabets joint 
ventures.  

The acquisition of a 50% shareholding in Supabets and the increase in our shareholding in Interbet 
from 26% to 50% both became effective on 1 March 2017. The Supabets investment was funded through 
the rights offer and issue of shares to the seller.  

International operations are the single largest source of pre-tax profit for Phumelela, which 
reflects our strategy over many years to internationalise our business. These profits are earned in 
various currencies with the British pound the most significant. 

Horseracing is an integral part of our total product offering and inseparable from the success we 
have achieved internationally. We continue to invest in supporting a high-quality South African 
racing product and experience.  

On average, the rand strengthened by 20% versus the British pound. International profits, 
comprising consolidated profit from our international division and equity accounted profits 
generated by PGI, increased in Rand by a pleasing 11%. In constant currency these profits increased 
by 37%.        

There was welcome shareholder support for the Supabets rights offer, which was an endorsement of our
earnings per share accretive and return on equity enhancing investment objective.     

In the past five years, Group attributable profit has increased by 113% and earnings per share by 
85%, a compound growth of 16% and 13% respectively. This has been achieved because of our 
diversification and internationalisation initiatives and by ensuring the betting offering is 
relevant, accessible through bricks and mortar or online, and affordable. 

The Group has contained expenses well and is striving to do better despite the macro economic 
challenges we face. 

The Group has needed to modernise and reposition its traditional business of administering 
horseracing and conducting Tote betting thereon. Accordingly, the senior management structure has 
been streamlined, with clearly delineated key performance objectives that align with the evolving 
nature of the Group. A national retail manager has been appointed with experience outside of our 
industry to apply fresh thinking to our technology, store design, and customer experience 
initiatives. Our Tote and fixed odds management teams have been merged so as to minimise duplication
and streamline costs and we have made early retirement and voluntary retrenchment offers as part of 
the process of modernisation and repositioning our business. We have embarked upon a strategy to use 
technology more effectively and as our first initiative, free Wi-Fi is now being offered in all our 
stores. We are continually developing new betting applications, especially for smartphones. 

Phumelela continues to fight for a fairer funding dispensation for the sport of thoroughbred 
horseracing. Civil and criminal lawsuits filed against bookmakers for unlawfully displaying 
Tellytrack are ongoing. 

GROUP FINANCIAL ANALYSIS
Total income was up by 1% overall to R1,5 billion, with local income down marginally at R1,2 billion
and international income up by 12% to R307,5 million. Income in fixed odds accelerated in the 
second half of the year, ending 35% higher. Disappointingly Tote betting recorded a decline in 
income.  

Combined local and international operating expenses, prize monies and levies increased by 3% to 
R1,4 billion. 

Depreciation and amortisation increased by 16% to R71,2 million, reflecting continued reinvestment 
in local Tote and fixed odds operations. Capital expenditure of R82,2 million was 8% higher, of 
which R42,1 million was spent on horseracing infrastructure and Tote betting and R40,1 million in 
fixed odds. Investments include a water saving catchment dam at the Vaal and an electricity-saving 
LED lighting installation at Turffontein, on which a three-year payback is anticipated.   

Expenses in the local Tote and horseracing operations were flat on the prior year and fixed odds 
expenses increased by 9%, a relatively contained increase given the rapid growth and development of 
this business.      

Operating profit increased by 14% to R49,0 million, which comprises a local operating loss of 
R44,5 million, an increase of 38%, and an international operating profit of R93,5 million, an 
increase of 24%. 

Local finance costs of R20,3 million, up from R9,4 million, is a consequence of higher borrowings. 

The Group's profits from equity accounted investees increased by a pleasing 29%, mainly as a result 
of the profits from Supabets and Interbet and the additional profits from PGI.    

Net attributable income increased by 18% to R142,6 million, assisted by a lower effective tax rate. 
Profit attributable to ordinary shareholders increased by 20% to R146,5 million.    

Headline earnings increased by 19% to R146,1 million. On a constant currency basis headline earnings 
increased by 52% to R186,4 million. 

The weighted average number of shares in issue increased by 17% to 87,0 million and on a fully 
diluted basis there was a 16% increase in weighted average shares to 91,1 million, with 2,1 million 
in treasury shares issued in respect of share option obligations. 500 000 shares, at a cost of 
R10,6 million, were bought back on the open market. 

Earnings per share increased by 3% to 168,46 cents and headline earnings per share by 2% to 
167,96 cents. Constant currency headline earnings per share increased by 30% to 214,34 cents.   

Cash generated from operations declined to R88,8 million from R113,0 million and cash generated by 
operating activities declined to R45,7 million from R143 million due to working capital absorption 
of R43,0 million.    

The statement of financial position reflects gross debt of R126,2 million and cash of R98,5 million,
resulting in a net debt position of R27,8 million or a debt to equity ratio of only 2,7%. However, 
there is a contingent consideration payable in respect of Supabets of R101 million that will be paid
in due course. The effective net debt as at 31 July 2017 is therefore R129 million or a debt to 
equity ratio of 12,5%. 

Dividends paid to shareholders amounted to R86,9 million. Net asset value per share is  
1 014,17 cents, an increase of 47%.  

Total assets increased by 63% to R1 539,8 million, which includes property, plant and equipment at 
a carrying value of R468,4 million, goodwill and intangibles at R67,1 million, and equity accounted 
investees carried at R638,1 million.  

The Group retains a strong financial position and has sufficient cash flow and borrowing capacity to 
meet its ongoing operational needs.   

Return on average equity has been affected by the substantially changed capital structure, decreasing 
to 18% from 25% but remaining above our cost of capital. 

SHARE CAPITAL     
There has been no change in the authorised share capital of the Company during the year.

Issued share capital increased by 27 024 284 shares as follows:
-  2 125 611 issued from treasury stock to fulfil obligations in respect of shares exercisable per
    the executive option schemes;
-  16 602 230 rights offer shares were issued in part to fund the purchase of Supabets SA Holdings 
    Proprietary Limited ("Supabets");
-  8 796 443 shares were issued to the seller in terms of the Supabets purchase consideration;
-  500 000 shares repurchased by the Company to fulfil obligations in respect of shares exercisable 
    per the executive option schemes.      

At 31 July 2017 issued share capital amounted to 101 559 769 shares, net of 940 789 treasury shares.


SUMMARISED CONSOLIDATED SEGMENTAL ANALYSIS
The Group stages horseracing events in South Africa, offers betting opportunities on  South African 
and international sports and numbers, and exports televisual horseracing content internationally. 
Reporting disclosure corresponds to management reporting lines.

Summarised segmental analysis
                                                                              31 Jul         31 Jul
                                                                    %           2017           2016
                                                               change          R'000          R'000
Local sports betting and media gross income                       (1)      1 213 025      1 226 382
International ventures gross income                               12         307 490        274 415
Total local and international income                               1       1 520 515      1 500 797
Local tote and fixed odds net betting and  other income            2       1 245 457      1 222 910
International other income                                        12         307 490        274 415
Total local and international net income                           4       1 552 947      1 497 325
Local expenses, stakes and levies                                  3      (1 289 929)    (1 255 160)
International expenses                                             7        (213 989)      (199 067)
Total expenses                                                     3      (1 503 918)    (1 454 227)
Local operating loss                                              38         (44 472)       (32 250)
Local finance costs                                              117         (20 323)        (9 368)
Local loss from operations                                        56         (64 795)       (41 618)
International pre-tax profit                                      24          93 501         75 348
International and local equity accounted profits                  29         122 591         94 694
Total Group pre-tax profit                                        18         151 297        128 424
Fair value adjustment to investment                              946           5 578
Profit before income tax expense                                  14         152 243        134 002


Note: Segmental information extracted from audited financial statements.

CAPITAL COMMITMENTS
Commitments in respect of capital expenditure approved by directors.

                                                                                2017          2016
                                                                               R'000         R'000
Contracted for                                                                               4 261
Not contracted for                                                           125 683       164 953


Capital commitments will be financed out of cash and cash equivalents on hand or borrowing 
facilities as and when required.

INVESTMENTS
50% ownership of Supabets SA Holdings Proprietary Limited was transferred to Phumelela with effect 
from 1 March 2017. The purchase consideration of R437 million was settled by way of a rights offer 
in the amount of R284 million and shares issued to the sellers. 

With effect from 1 March 2017, a further 24% equity interest in Interbet was acquired, increasing 
Phumelela's shareholding to 50%.

MATTERS OF CORPORATE INTEREST AND LITIGATION
On 22 September 2017, the Johannesburg High Court granted Phumelela's appeal, with costs in the 
matter relating to the interim directive issued by the Gauteng Gambling Board in October 2014. 
The parties to the appeal have until 16 October 2017 to apply for leave to appeal the judgment. 

Other than the above ruling, there are no further developments on the matters disclosed in the 
annual financial statements for the year ended 31 July 2016. 

Shareholders are reminded that the outcome of the relevant actions noted under Corporate Interests 
and Litigation, as described in the annual financial statements, remains uncertain and may have an 
impact on future earnings.

REPORTING ENTITY
Phumelela Gaming and Leisure Limited is a company domiciled in South Africa. The summarised 
consolidated financial statements as at and for the year ended 31 July 2017 comprises the Company 
and its subsidiaries and the Group's interests in equity accounted investees and  joint operations.

STATEMENT OF COMPLIANCE
The preliminary summarised audited consolidated financial statements are prepared in accordance with 
the requirements of the JSE Limited Listings Requirements for preliminary reports, and the 
requirements of the Companies Act applicable to summary financial statements. The Listings 
Requirements require preliminary reports to be prepared in accordance with the framework concepts 
and the measurement and recognition requirements of International Financial Reporting Standards 
(IFRS) and 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. 

BASIS OF PREPARATION
The preliminary summarised audited consolidated financial statements do not include all the 
information and disclosures required for the audited consolidated financial statements. The 
preliminary summarised audited consolidated financial statements should be read in conjunction with 
the audited consolidated financial statements. 

The audited consolidated financial statements for the Group as at and for the year ended 
31 July 2017 were prepared on the going-concern basis and are available for inspection at the 
Company's registered office. 

The accounting policies applied in the presentation of the preliminary summarised audited 
consolidated financial statements are in terms of IFRS and are consistent with those applied for 
the year ended 31 July 2016, except for new standards and interpretations that became effective on 
1 August 2016 and deemed applicable to the Group. They are prepared on the historical cost basis, 
except for certain financial instruments that are recognised at fair value. 

Mr B. McLoughlin CA (SA) Chief Financial Officer was responsible for supervising the preparation of 
the annual financial statements and preparing the summarised financial statements.

REPORT OF THE INDEPENDENT AUDITORS
The auditors, KPMG Inc., have issued their opinion on the Group's consolidated financial statements 
for the year ended 31 July 2017.  The auditors were not engaged to report on the summary financial 
statements. The audit was conducted in accordance with International Standards on Auditing. They 
have issued an unmodified opinion. A copy of the auditors' report together with a copy of the 
audited consolidated financial statements is available at the Company's registered office.

The preliminary summarised audited consolidated financial statements have been derived from the 
Group's consolidated financial statements and are consistent in all material respects with the 
Group's consolidated financial statements. The auditors' report does not necessarily report on all 
of the information contained in this announcement. Any reference to future financial information 
included in this announcement has not been reviewed or reported on by the auditors. Shareholders 
are advised that in order to obtain a full understanding of the nature of the auditors' engagement 
they should obtain a copy of that report together with the accompanying financial information from 
the Company's registered office. The summarised report is extracted from the audited information 
but is itself not audited. The directors take full responsibility for the preparation of the 
preliminary results and the financial information is correctly extracted from the underlying 
annual financial statements.

SUBSEQUENT EVENTS
There are no significant subsequent events that have an impact on the financial information at 
31 July 2017.

RELATED PARTIES
Other than the investments in Supabets and Interbet, there have been no significant transactions 
during the year with equity accounted investees, joint operations, and other related parties.

Other than in the normal course of business, there have been no significant transactions during the 
period with equity accounted investees, joint operations, and other related parties.

SOCIAL RESPONSIBILITY AND TRANSFORMATION
The amended B-BBEE Codes of Good Practice have set a challenging bar with the new weightings. 
Empowerdex has audited the Group as a level 4 with Empowering Supplier status, and the process has 
allowed the Group to identify areas for improvement.

In the furtherance of the Group's commitment to transformation, the Group has advanced a loan of 
R20 million to Omphe Tshiamo Investments Proprietary Limited (Omphe Tshiamo) to fund the roll-out 
of 10 Betting World and Tab franchises in the North West province. Omphe Tshiamo is 95% owned by 
previously disadvantaged individuals resident in the North West province and the Group owns the 
remaining 5%. Omphe Tshiamo is planning the roll-out of another 10 franchises and the Group has 
entered into negotiations with the company and its shareholders to agree the funding thereof. The 
roll-out of the additional 10 franchises and the funding thereof is subject to the approval of the 
North West Gambling Board.   

The Group recognises that it has a responsibility to the broader community to act in a socially 
responsible manner, for the benefit of all South Africans. Contributions to selected training, 
sports and community service-related projects continue. The Group has adopted appropriate BEE and 
employment equity, training, and procurement policies. 

DIRECTORS
Mr P Anastassopoulos was appointed to the Board effective from 8 March 2017. Messrs ML Ramafalo 
and BP Finch resigned from the Board effective 30 June 2017 and 25 August 2017 respectively. The 
Board extends its appreciation for their contribution and wishes them well in their future 
endeavours. There was no other change to the composition of the Board. 

Mr MP Malungani has notified the Board of his intention to step down at the December 2017 Annual 
General Meeting. Peter has served the Company and its Board with distinction over the past 20 years. 
His invaluable contribution as Board member and Chairman will be sorely missed. 

PROSPECTS
As a result of the losses incurred in its local Tote and horseracing operations, the Group has 
embarked upon an initiative to modernise and reposition its business, which includes a significant 
cost saving initiative. The management structure has been rationalised and changed. Significant new
betting products and technologies are being introduced. The Group has made offers of early 
retirement and voluntary retrenchment to all staff. These offers may be followed by a formal 
retrenchment process if need be. The Board has approved a lump-sum spend of up to R30 million on 
the cost reduction initiative. The aforementioned lump sum will be charged to and form part of the 
costs in determining the Group's earnings per share for the year ending 31 July 2018. A separate and 
detailed account will be given of the amounts spent and the payback period thereof. 

South African trading conditions remain challenging but we continue to be proactive in managing 
those challenges and identifying new opportunities. We have earmarked eight under-performing fixed 
odds outlets for joint ventures with Supabets and are in the process of submitting the relevant 
applications for regulatory approval. The first three of these are expected to commence trading 
during the course of October. Further joint ventures with Supabets will be considered. We are in 
the process of implementing the best of Supabets' software into our betting outlets and Supabets 
will be re-introducing betting on racing, supported and managed by our fixed odds business. The 
Tabonline website will be replaced with a new website using the best of Interbet's technology. 
Exciting new bets will be offered in the Group's fixed odds as well as Tote betting businesses.
The Group's international operations, namely the export of live televisual South African horseracing 
and pari-mutuel betting through PGI, are anticipated to have another good year. 

Group earnings will be impacted by the aforementioned cost reduction initiatives. Excluding these 
costs, the Group continues to target growth in normalised earnings per share/headline earnings per 
share.

Any forward-looking statements of forecasts contained in these results have not been reviewed or 
reported on by the Group auditors.  

CASH DIVIDEND TO SHAREHOLDERS
Notice is hereby given that the Board has declared a final gross cash dividend from income reserves 
of 70 cents per share (56,00 cents per share net of dividend withholding tax at a rate of 20%) 
payable to shareholders recorded in the register on Friday, 3 November 2017. The issued share
capital at the declaration date is 102 500 558 ordinary shares. Shareholders are advised that the 
last date to trade "cum distribution" will be Tuesday, 31 October 2017. As from commencement of 
business on Wednesday, 1 November 2017 all trading in Phumelela shares will be "ex dividend". 
Payment will be made on Monday, 6 November 2017. Share certificates may not be dematerialised or 
rematerialised between Wednesday, 1 November 2017 and Friday, 3 November 2017, both days inclusive. 
The Company's tax reference number is 9171/393/84/7.

For and on behalf of the Board
MP Malungani                       WA du Plessis 
Chairman                           Chief Executive Officer 
Turffontein, Johannesburg 
6 October 2017



SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                                             Audited         Audited 
                                                                           12 months       12 months
                                                                              31 Jul          31 Jul
                                                                   %            2017            2016
                                                              change           R'000           R'000
Income                                     
- Local operations                                                (1)      1 213 025       1 226 382
- International operations                                        12         307 490         274 415
                                                                   1       1 520 515       1 500 797
Gross betting income                                    
- Local operations                                                (2)      1 176 913       1 198 796
Net betting income                                    
- Local operations                                                (2)        948 603         965 551
Other operating income                                    
- Local operations                                                12         281 654         252 603
- International operations                                        12         306 844         273 840
Investment income                                    
- Local operations                                               220          15 200           4 756
- International operations                                                       646             575
Net income                                                         4       1 552 947       1 497 325
Operating expenses and overheads                                    
- Stakes                                                           3        (208 756)       (202 871)
- Local operations                                                 2      (1 010 038)       (991 104)
- International operations                                         8        (213 917)       (198 781)
Profit before finance costs, income tax, 
  depreciation and amortisation                                   15         120 236         104 569
Depreciation and amortisation                                     16         (71 207)        (61 471)
Profit from operations                                            14          49 029          43 098
Finance costs                                    
- Local operations                                               117         (20 323)         (9 368)
Profit before share of profit of equity accounted 
investees and fair value adjustment to investment                (15)         28 706          33 730
Share of profit of equity accounted investees                     29         122 591          94 694
Profit before fair value adjustment                               18         151 297         128 424
Fair value adjustment to investment                              946           5 578
Profit before income tax expense                                  14         152 243         134 002
Income tax expense                                               (25)         (9 641)        (12 912)
Profit for the year                                               18         142 602         121 090
Other comprehensive income for the year                                    
Items that may subsequently be reclassified to 
  profit or loss                                    
- Exchange differences on translating foreign operations         (74)           (151)           (579)
Total comprehensive income for the year                           18         142 451         120 511
Profit attributable to:                                    
Ordinary equity holders of the parent                             20         146 520         121 944
Non-controlling interest                                                      (3 918)           (854)
Profit for the year                                               18         142 602         121 090
Total comprehensive income attributable to:                                    
Ordinary equity holders of the parent                             21         146 369         121 365
Non-controlling interest                                                      (3 918)           (854)
Total comprehensive income for the year                           18         142 451         120 511
Earnings per ordinary share (cents)                                    
- Basic                                                            3          168,46          163,62
- Diluted                                                          4          160,84          155,01


SUPPLEMENTARY STATEMENT OF COMPREHENSIVE INCOME INFORMATION
                                                                             Audited         Audited 
                                                                           12 months       12 months
                                                                              31 Jul          31 Jul
                                                                   %            2017            2016
                                                              change           R'000           R'000
Reconciliation of headline earnings                                    
Earnings attributable to equity holders of parent                 20         146 520         121 944
Adjusted for:                                    
Net loss/(profit) on disposal of property, 
   plant and equipment                                          (605)            916
Tax effect                                                                       169            (256)
Headline earnings                                                 19         146 084         122 604
Headline earnings per share (cents)                                2          167,96          164,51
Diluted headline earnings per share (cents)                        3          160,36          155,85
Net asset value per share (cents)                                 47        1 014,17          688,33
Dividend to shareholders                                    
Interim dividend                                    
Dividend per ordinary share (cents)                                            34,00           34,00
Final dividend                                    
Dividend per ordinary share (cents)                                            70,00           70,00
Number of shares in issue                                         36     101 559 769      74 535 485
Weighted average number of shares in issue for basic, 
   headline and adjusted headline earnings per share 
   calculation                                                    17      86 974 276      74 528 006
Weighted average number of shares in issue for diluted 
   earnings per share calculation                                 16      91 097 698      78 669 669




SUPPLEMENTARY PRO FORMA INFORMATION
The pro forma constant currency financial information has been compiled by the directors to 
illustrate the impact of foreign currency movements on the Group's reported financial performance 
for the year ended 31 July 2017 for illustrative purposes only. This information is the responsiility 
of the direcors. Due to the nature of this information, it may not fairly present the Group's 
financial position, changes in equity and results of operations or cash flows. An unmodified 
reasonble assurance report has been issued by the Group's auditor, KPMG Inc. in terms of ISAE 3420 
Assurance Engagements to Report on the Compilation of the Pro Forma Information in a Prospectus,
and is available for inspection at the Company's registered office. The pro forma information has 
been compiled in terms of the JSE Listings Requirements and the Revised Guide on Pro Forma 
Information by SAICA.

The averange Rand exchange rate strenghtened against the major currencies in which the Group is
exposed to, namely British pound (20,43 in 2016 to 17,10 in 2017), The Australian dollar (10,69 in
2016 to 10,22 in 2017), the United States dollar (14,65 in 2016 to 13,57 in 2017) and the Euro 
(16,20 in 2016 to 14,92 in 2017). The constant currency adjustment, detailed below, has been 
prepared on the basis of applying the 2016 average Rand exchange rates to the 2017 foreign 
denominated net profits and foreign equity earnings recorded in the 2017 statement of comprehensive
income.


                                                                           12 months       12 months
                                                                              31 Jul          31 Jul
                                                                   %            2017            2016
                                                              change           R'000           R'000
Reconciliation of headline earnings to adjusted 
   headline earnings                                    
Headline earnings                                                            146 084         122 604
Constant currency adjustment                                                  40 336            
Adjusted headline earnings                                        52         186 420         122 604
Adjusted headline earnings per share in constant
   currency (cents)                                               30          214,34          164,51





SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                                             Audited         Audited
                                                                               as at           as at
                                                                              31 Jul          31 Jul
                                                                                2017            2016
                                                                               R'000           R'000
ASSETS                        
Non-current assets                                                         1 280 609         635 466
Property, plant and equipment                                                468 388         458 914
Goodwill                                                                      15 206          15 206
Intangible assets                                                             51 939          51 455
Investments                                                                   11 562             692
Interest in equity accounted investees                                       638 074          75 460
Investment property                                                           18 700            
Long-term loan                                                                64 309          24 790
Deferred taxation asset                                                       12 431           8 949
Current assets                                                               259 200         308 484
Inventories                                                                    2 466           1 920
Trade and other receivables                                                  129 855         137 849
Income tax receivable                                                         19 395          19 233
Defined benefit funds                                                          9 029           8 183
Assets held for sale                                                                          28 624
Cash and cash equivalents                                                     98 455         112 675
                        
Total assets                                                               1 539 809         943 950
EQUITY AND LIABILITIES                        
Total equity                                                               1 029 993         513 051
Share capital and premium                                                    473 826           1 863
Retained earnings                                                            560 678         511 630
Translation reserve                                                             (593)           (442)
Equity attributable to ordinary shareholders                               1 033 911         513 051
Non-controlling interest                                                      (3 918)            
Non-current liabilities                                                      123 370          64 489
Deferred taxation liability                                                    1 393           1 531
Borrowings                                                                   121 977          62 895
Finance lease liability                                                                           63
Current liabilities                                                          386 446         366 410
Trade and other payables                                                     267 146         310 095
Short-term borrowings                                                          2 400           2 926
Contingent consideration liability                                           101 434             707
Income tax payable                                                                24           1 683
Betting dividends payable                                                     13 621          15 994
Bank overdraft                                                                 1 821          35 005
                        
Total equity and liabilities                                               1 539 809         943 950




SUMMARISED CONSOLIDATED STATEMENTS OF CASH FLOW
                                                                             Audited         Audited 
                                                                           12 months       12 months
                                                                              31 Jul          31 Jul
                                                                                2017            2016
                                                                               R'000           R'000
Net cash (outflow)/inflow from operating activities                          (62 201)         38 594
Cash generated by operations                                                  88 771         113 046
Movements in working capital                                                 (43 022)         29 949
Cash generated by operating activities                                        45 749         142 995
Income tax paid                                                              (15 082)        (30 306)
Investment income received                                                    11 957           5 330
Finance costs paid                                                           (17 950)         (9 368)
Dividends to shareholders                                                    (86 875)        (70 057)
Net cash outflow from investing activities                                  (250 879)        (19 549)
Acquisition of property, plant and equipment and intangible assets           (82 223)        (76 443)
Proceeds on disposal of property, plant and equipment, intangible 
   assets and investments                                                      1 664           2 086
Acquisition of a subsidiary/investment in equity accounted investees        (255 010)         (1 710)
Contingent liability paid                                                       (330)            
Net loans advanced                                                           (24 432)        (14 448)
Dividend received from equity accounted investees                            109 452          70 966 
Net cash inflow from financing activities                                    332 195          12 743
Repayment of finance leases                                                     (425)           (557)
Net borrowings raised                                                         58 556          13 300
Share capital raised                                                         288 340            
Shares repurchased and options issued                                        (14 276)            
Net increase in cash and cash equivalents                                     19 115          31 788
Effect of conversion of foreign operations on cash and 
   cash equivalents                                                             (151)           (579)
Cash and cash equivalents at beginning of year                                77 670          46 461
Cash and cash equivalents at end of year                                      96 634          77 670
Make up of balance of cash and cash equivalents                        
Cash and cash equivalents                                                     98 455         112 675
Bank overdraft                                                                (1 821)        (35 005)
Cash and cash equivalents at end of year                                      96 634          77 670


SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                                          Equity   
                                                                          attri-
                                                                         butable
                                             Share                            to      Non-
                                           capital    Trans-           ordinary      con-
                                               and    lation  Retained    share- trolling     Total
                                           premium  reserves  earnings   holders  interest    equity
                                             R'000     R'000     R'000     R'000     R'000     R'000        
Balance at 31 July 2015                      1 863       137   445 743   447 743             447 743
Total comprehensive income for the year                 (579)  121 944   121 365      (854)  120 511
- Profit for the year                                121 944   121 944      (854)  121 090
- Foreign currency translation reserve                  (579)               (579)               (579)
Transactions with owners recorded 
  directly in equity                                                                        
- Purchase of controlling interest 
  in subsidiary                                                                        854       854
- Share-based payment                                           14 000    14 000              14 000
- Dividends paid to equity holders                             (70 057)  (70 057)            (70 057)
Balance at 31 July 2016                      1 863      (442)  511 630   513 051             513 051
Total comprehensive income for the year                 (151)  146 520   146 369    (3 918)  142 451
- Profit for the year                                          146 520   146 520    (3 918)  142 602
- Foreign currency translation reserve                  (151)               (151)               (151)
Transactions with owners recorded 
  directly in equity                                                                        
- Share issue - Rights offer               288 713                       288 713             288 713
- Share issue - Acquisition shares         153 582                       153 582             153 582
- Direct listing costs                        (373)                         (373)               (373)
- Share based payment                                            3 720     3 720               3 720
- Shares repurchased                           (12)            (10 588)  (10 600)            (10 600)
- Shares issued in terms of the share 
  option scheme                                 53              (3 729)   (3 676)             (3 676)
- Dividends paid to equity holders                             (86 875)  (86 875)            (86 875)
Balance at 31 July 2017                    473 826      (593)  560 678 1 033 911    (3 918)1 029 993


Directors:                  MP Malungani (Chairman), WA du Plessis* (Group Chief Executive), 
                            AW Heide* (Finance Director and COO), P Anastassopoulos, R Cooper, 
                            MJ Jooste, B Kantor, SKC Khampepe, NJ Mboweni (Mrs), VJ Moodley*, 
                            Dr E Nkosi, JA Stuart*, CJH van Niekerk, JB Walters   (*Executive)
Company Secretary:          F Moloi (Mrs)
Sponsor:                    Investec Bank Limited
Registered Office:          Turffontein Racecourse, 14 Turf Club Street, Turffontein
Transfer Secretaries:       Computershare Investor Services Proprietary Limited
Share code:                 PHM 
ISIN:                       ZAE000039269
Sponsor:                    Investec Bank Limited
Website:                    www.phumelela.com
Date: 06/10/2017 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.

Share This Story