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Reviewed Provisional Condensed Consolidated Results For The Year Ended 31 March 2018
HOSKEN PASSENGER LOGISTICS AND RAIL LIMITED
(Previously Niveus Invest 17 Proprietary Limited)
Incorporated in the Republic of South Africa
Registration number: 2015/250356/06
JSE share code: HPR
ISIN: ZAE000255907
("HPLR" or "the Company")
REVIEWED PROVISIONAL CONDENSED CONSOLIDATED RESULTS
For the year ended 31 March 2018
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2018
Reviewed Audited
2018 2017(1)
R'000 R'000
ASSETS
Non-current assets 1 709 120 1 344 793
Property, plant and equipment 1 462 937 1 319 131
Goodwill 8 451 8 451
Intangible assets 78 57
Investments in associates 18 343 16 757
Deferred taxation 414 397
Non-current receivables 218 897 -
Current assets 630 598 366 857
Inventories 15 714 17 381
Trade and other receivables 305 319 57 410
Taxation 1 435 3 669
Cash and cash equivalents 308 130 288 397
Total assets 2 339 718 1 711 650
EQUITY AND LIABILITIES
Equity 1 406 308 829 570
Equity attributable to equity holders of the parent 1 373 692 794 416
Non-controlling interest 32 616 35 154
Non-current liabilities 557 397 537 070
Borrowings 300 887 293 006
Post-employment medical benefit liability 58 928 68 880
Deferred taxation 197 582 175 184
Current liabilities 376 013 345 010
Trade and other payables 102 558 95 058
Financial liabilities - 6 290
Current portion of borrowings 149 323 130 670
Taxation 4 340 172
Provisions 119 792 112 820
Total equity and liabilities 2 339 718 1 711 650
(1) The 2017 figures of the Company and its subsidiaries ("Group") have been prepared on the common
control accounting method, refer to the notes to the condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 MARCH 2018
Reviewed Audited(2)
2018 2017(1)
R'000 R'000
Revenue 1 808 406 1 682 964
Other income 4 501 2 939
Operating expenses (1 358 793) (1 239 967)
EBITDA 454 114 445 936
Depreciation and amortisation (112 076) (99 569)
Investment income 22 310 15 000
Share of profits of associates 7 283 6 837
Finance costs (39 618) (38 059)
Profit before taxation 332 013 330 145
Taxation (86 619) (88 407)
Profit for the year 245 394 241 738
Attributable to:
Equity holders of the parent 235 947 228 336
Non-controlling interest 9 447 13 402
245 394 241 738
(1) The Group's 2017 figures have been prepared on the common control accounting method, refer to
the notes to the condensed consolidated financial statements.
(2) The Group's subsidiaries historically presented their respective Statement of Profit or Loss in
terms of the "function method". The Group has elected to present the Statement of Profit or Loss
on the "nature method" as this presents more relevant disclosure for the Group and more closely
represents how management evaluate the results of the Group.
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2018
Reviewed Audited
2018 2017(1)
R'000 R'000
Profit for the year 245 394 241 738
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Cash flow hedging - current year losses (343) (6 315)
Cash flow hedging - amount capitalised to property, plant and equipment 6 633 25
Taxation relating to cash flow hedging (1 761) 1 761
Items that may not be reclassified subsequently to profit or loss
Actuarial gains/(losses) on defined benefit plans 16 863 (3 304)
Taxation relating to actuarial gains/(losses) on defined benefit plans (4 722) 925
Total comprehensive income for the year 262 064 234 830
Attributable to:
Equity holders of the parent 252 617 221 428
Non-controlling interest 9 447 13 402
262 064 234 830
Reviewed 2018 Audited 2017(1)
Gross Net Gross Net
Reconciliation of headline earnings R'000 R'000 R'000 R'000
Earnings attributable to equity holders of the parent 235 947 228 336
IAS 16 (Profit)/loss on disposal of plant and
equipment (860) (619) 797 574
Headline profit 235 328 228 910
Earnings per share (cents)
Basic 81.36 78.74
Diluted 81.36 78.74
Headline earnings per share (cents)
Basic 81.15 78.93
Diluted 81.15 78.93
Weighted average number of shares in issue ('000)
Basic 290 000 290 000
Diluted 290 000 290 000
Actual number of shares in issue ('000) 290 000 -
(1) The Group's 2017 figures have been prepared on the common control accounting method, refer to
the notes to the condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2018
Reviewed Audited
2018 2017(1)
R'000 R'000
Balance at the beginning of the year 829 570 714 762
Shares issued 2 900 000 -
Share issue costs (3 538) -
Total comprehensive income 262 064 234 830
Effects of changes in shareholding(1) (1 800 000) -
Business combinations - (22)
Dividends (781 788) (120 000)
Balance at the end of the year 1 406 308 829 570
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2018
Reviewed Audited
2018 2017(1)
R'000 R'000
Cash flows from operating activities (400 039) 252 588
Cash generated by operations 471 744 463 207
Investment income 8 930 15 000
Finance cost (36 940) (38 417)
Changes in working capital 1 791 15 655
Taxation paid (63 776) (82 857)
Dividends paid (781 788) (120 000)
Cash flows from investing activities (253 026) (220 013)
Investment in subsidiary company - (9 636)
Dividends received 5 000 8 900
Property, plant and equipment
- Additions (259 988) (223 038)
- Disposals 1 962 3 761
Cash flows from financing activities 672 798 13 022
Ordinary shares issued(2) 649 802 -
Other liabilities raised (3 538) -
Funding raised 335 228 301 098
Funding repaid (308 694) (288 076)
Increase in cash and cash equivalents 19 733 45 597
Cash and cash equivalents
At the beginning of the year 288 397 242 800
At the end of the year 308 130 288 397
(1) The Group's 2017 figures have been prepared on the common control accounting method, refer to
the notes to the condensed consolidated financial statements.
(2) As part of the restructure of the Group, Ordinary Shares to the value of R1.1 billion where
issued to La Concorde Holdings Limited on 1 February 2018 in exchange for cash of R649.8 million
and a receivable of R450.2 million ("KWV instalments"). The Company subsequently declared and paid
out a dividend of R649.8 million to Shareholders on 1 February 2018, refer to the notes to the
condensed consolidated financial statements for further detail on the Group restructure.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The provisional condensed consolidated financial statements for the year ended 31 March 2018 have been prepared
in accordance with International Financial Reporting Standards ("IFRS"), IAS 34 – Interim Financial Reporting,
the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council, the requirements of the South African
Companies Act, No. 71 of 2008 (as amended) and the Listings Requirements of the JSE Limited.
The accounting policies of the Group are consistent with those applied by the Company and its subsidiaries in their
financial statements for the year ended 31 March 2017. The adoption of new standards that are applicable for this
financial year had no impact on the figures presented. Details of the standards adopted will be provided in the
annual financial statements. As required by the Listings Requirements of the JSE Limited, the Group reports
headline earnings in accordance with Circular 2/2015 - Headline Earnings, as issued by the South African Institute
of Chartered Accountants.
These provisional condensed consolidated financial statements were prepared under the supervision of the
Chief Financial Officer, Mr Mark Wilkin CA(SA).
GROUP RESTRUCTURE AND SHARE ISSUE
On 1 February 2018, the Company acquired 100% of the issued share capital of HPL and R Investments Proprietary
Limited, which holds 100% of Golden Arrow Bus Services Proprietary Limited ("GABS") (which in turn, has various
subsidiaries) and 76% of Eljosa Travel and Tours Proprietary Limited, from Hosken Consolidated Investments Limited
("HCI") for a consideration of R1.8 billion, which was settled by the allotment and issue of shares, constituting approximately
62% of the issued share capital of the Company. At year-end, the remaining approximately 38% of the issued share capital
of the Company was held by La Concorde Holdings Limited ("La Concorde"), a subsidiary of Niveus Investments Limited
("Niveus). As holding company of Niveus, HCI remained the controlling shareholder of the Group at year-end with an
effective holding of approximately 73.5%.
On 13 April 2018, La Concorde unbundled its holding of approximately 38% of the issued share capital of the
Company to its shareholders by way of a distribution in specie, pro rata to their respective holdings in La Concorde,
resulting in Niveus thereafter holding approximately 22% of the issued share capital in the Company. On 30 April 2018,
Niveus unbundled its approximate 22% shareholding in the Company to its shareholders by way of a distribution in
specie, pro rata to their respective holdings in Niveus.
Following the Niveus and La Concorde unbundlings, HCI still remains the controlling shareholder of the Group and its
effective shareholding remains approximately 73.5%.
The Company successfully listed on the Main Board of the JSE on 24 April 2018.
COMMON CONTROL ACCOUNTING
The restructure of the Group, prior to its listing on the JSE, is a common control transaction as HCI remains the ultimate
controlling shareholder of the Group. As such IFRS 3 does not apply due to common control.
The Group has therefore applied predecessor accounting to its consolidated financial statements with the effect that the
assets and liabilities of the subsidiaries acquired under the Group restructure are recognised under the predecessor
value method and carried at historical carrying values, with no goodwill being recognised and a common control reserve
arising on the Group restructure. This treatment requires that the comparative figures are presented as if the common
control transaction had taken place at the start of the first reporting period presented i.e. 1 April 2016.
OPERATING SEGMENTS
The directors have considered the implications of IFRS 8: Operating segments and are of the opinion that the operations
of the Group constitute one operating segment, being the provision of bus services within South Africa. Resource
allocation and operational management is performed on an aggregate basis. Performance is measured based on profit
or loss before tax as shown in internal management reports that are reviewed by the Chief Operating Decision-Maker,
who is the Group's Chief Executive Officer.
REVIEW OF THE INDEPENDENT AUDITOR
The provisional condensed consolidated financial statements for the year ended 31 March 2018 have been reviewed
by BDO Cape Incorporated, who expressed an unmodified review conclusion. The auditor's report does not necessarily
report on all of the information contained in the financial results. Shareholders are therefore advised that in order
to obtain a full understanding of the nature of the auditor's engagement they should obtain a copy of the auditor's report
together with the accompanying financial information from the issuer's registered office.
COMMENTARY AND RESULTS
The year ending 31 March 2018 will be remembered for its challenging operational conditions. The drought in the
Western Cape, as well as political turmoil, have all affected the region's economy.
Although the Group's revenue showed growth of 7.5% from the prior year, EBITDA only increased by 1.8% and net profit
after tax by 1.5%, and is mainly attributable to the rising fuel and employee costs in the industry. The increase in revenue
was largely due to passenger growth due to the intermittent failure of the Metrorail system in the Cape Metropole. The rise
in operational costs were partially mitigated by management interventions which included personnel savings, unproductive
kilometre cancellations and efficiencies introduced in service and maintenance disciplines.
The rise in the depreciation cost is in line with the increase in the capitalisation of the bus fleet in the current financial
year, which also resulted in the increase in borrowings of R26 million from the prior year. Further capital intensive
projects included the introduction of a company-wide modern electronic ticket system and the construction of a state-of-
the-art training centre by the Group's major subsidiary GABS.
The increase in non-current receivables (short-term portion included in trade and other receivables) is due to the KWV
Instalments (R237.5 million maturing 1 October 2018 and R257.7 million maturing on 1 October 2019) ceded to the
Company as part of the Group's restructuring. For further information on the restructuring shareholders are referred
to the circular published by Niveus on 18 December 2017.
DIVIDEND TO SHAREHOLDERS
The directors have not declared a final dividend for the full year, as dividends of R131.9 million were declared and paid to
shareholders from income reserves in November 2017. In addition, a dividend of R649.8 million was paid out to Shareholders
on 1 February 2018, as part of the restructure and capitalisation of the Group. In future, the Company aims, in line with the
dividend policy disclosed in its pre-listing statement dated 15 March 2018, to declare and pay 50% of its annual profit after
tax as a dividend to shareholders, subject to working capital requirements and capital expenditure required for expansion and
maintenance.
For and on behalf of the board of directors
FE Meyer ML Wilkin
Chief Executive Officer Chief Financial Officer
23 May 2018
CORPORATE INFORMATION
Directors
Y Shaik* (Chairman)
TG Govender* (Deputy Chairman)
FE Meyer (Chief Executive Officer)
ML Wilkin (Chief Financial Officer)
L Govender (Lead Independent Director)(#)*
NB Jappie(#)*
KF Mahloma(#)*
* Non-executive
(#) Independent
All Directors were appointed during the year under review.
Registered Address
103 Bofors Circle
Epping Industria
Cape Town, 7460
Company Secretary
HCI Managerial Services Proprietary Limited
(Registration number: 1996/017874/07)
Suite 801
76 Regent Road
Sea Point
Cape Town, 8005
(PO Box 5251, Cape Town, 8000)
Auditors
BDO Cape Inc.
6th Floor, 123 Hertzog Boulevard
Foreshore
Cape Town, 8001
(PO Box 3883, Cape Town, 8000)
Transfer Secretaries
Computershare Investor Services Proprietary Limited
(Registration number: 2004/003647/07)
Rosebank Towers
15 Biermann Avenue
Rosebank, 2196
(PO Box 61051, Marshalltown, 2107)
Sponsor
PSG Capital Proprietary Limited
(Registration number: 2006/015817/07)
1st Floor, Ou Kollege
35 Kerk Street
Stellenbosch, 7600
(PO Box 7403, Stellenbosch, 7599)
and at
2nd Floor, Building 3
11 Alice Lane
Sandhurst
Sandton, 2196
(PO Box 650957, Benmore, 2010)
Website address
www.hplr.co.za
Date: 23/05/2018 01:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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