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COMAIR LIMITED - Provisional Audited Results for the year ended 30 June 2018, Changes to the Board and Cash Dividend Declaration

Release Date: 18/09/2018 12:00
Code(s): COM     PDF:  
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Provisional Audited Results for the year ended 30 June 2018, Changes to the Board and Cash Dividend Declaration

Comair Limited
(Incorporated in the Republic of South Africa)
Reg. No. 1967/006783/06
ISIN Code: ZAE000029823 Share Code: COM
(“Comair” or the “Group”)

CONDENSED CONSOLIDATED PROVISIONAL AUDITED RESULTS FOR THE YEAR ENDED
30 JUNE 2018, CHANGES TO THE BOARD AND CASH DIVIDEND DECLARATION

Earnings review

The 2018 financial year delivered a record earnings performance despite an 
environment of latteraly negative GDP growth, volatile exchange rates, elevated
fuel prices and a domestic airline market that continues to be characterised
by overcapacity.

The Airline Business

Airline Passenger Revenue increased by seven percent (7%) on the back of a combined
increase of four percent (4%) in passenger volumes and a three percent (3%) increase in
the average fare per passenger. Seat occupancy remained constant at 76%,
notwithstanding an increase of approximately three percent in Comair’s
available seat capacity. This remains below the average global industry seat
occupancy of approximately 80.6%.

Airline operating costs increased by seven percent (7%) with the most significant
cost driver being a 14.2% percent increase in the price of fuel as a result of
the recovery in the dollar price of oil.

The translation profit of the comparative period that arose from the effect of
the exchange rate on a dollar-based aircraft loan, was partly reversed as the
currency deteriorated to R13.71 against the dollar as at 30 June 2018, from
R13.04 against the dollar a year earlier. This resulted in a reported loss of
R12 million in the current period on the loan value of US$17.6 million,
compared to a profit of R41 million on the revaluation of the loan at
30 June 2017.

The Non-Airline Businesses

The non-airline businesses performed well, maintaining an overall contribution
to Net Profit before Taxation of 25% with sustained prospects for further
growth.

Combined Business

Earnings per share (“EPS”) and headline earnings per share (“HEPS”) increased
by 10% and 4% to 69.8 cents per share and 69.5 cents per share respectively
(prior year: EPS 63.7 cents per share and HEPS 67.0 cents per share).

Cash generated from operating activities remained relatively stable at
R946 million versus R973 million in the comparative year, resulting in a
closing cash balance of R685 million (prior year: R934 million). During the
year after significant investments in the fleet, in the form of a pre-owned
Boeing 737-800 acquisition, and pre-delivery payments towards the Boeing
737-8 MAX aircraft order, as well as investments in the expansion of the
training and lounge businesses. 

Highlights 

Aircraft Fleet

During the year we took delivery of one preowned 737-800 at a cost of
R286 million and a net cash investment (after raising financing of
R201 million) of R85 million Pre-delivery payments of R368 million (or a net
cash investment of R220 million, after raising financing of R148 million) were
made towards two Boeing 737-8 Max deliveries due in January and February 2019
respectively. Furthermore, R426 million was invested in routine aircraft
maintenance events. The ongoing upgrades to our fleet provide mitigation to the
rise in the fuel price, while enhancing the potential revenue per flight and
providing an improved customer proposition.

Training 

The construction of a third simulator training facility was substantially
completed by financial year end, amounting to an investment of R46 million and
doubling capacity with four additional simulator bays to accommodate the demand
for external pilot training.  To this end, the Group has invested in an Airbus
A320 fixed base trainer, costing R21 million, which was installed shortly after
financial year end, and is negotiating for the acquisition of a further two 
full motion simulators.

In December 2017 the Group acquired two training academies, EPT Aviation
Training Proprietary Limited and Global Training College South Africa
Proprietary Limited which provide cabin crew training services as well as
passenger handling and other travel related training, thereby expanding the
range of training services provided by the Comair Training Centre.

Subsequent to financial year end 30 June 2018, the Group acquired a leadership
development consultancy firm, Metaco Holdings Proprietary Limited which
focusses on strategic development, organisational design and change management
with a client base that encompasses boards, leadership teams and individuals
across a range of industries in the private and public sector. 

These acquisitions align with the Group’s view to establish an extensive
aviation training academy with a global customer base.

The Lounge Business

The SLOW Lounges have set a global standard for airport lounges, providing a
perfect sanctuary from the fast pace of travel and modern life, and have won
numerous awards for their design and service excellence. Demand for the Lounges
continues to increase and the Group has extended and refurbished its domestic
SLOW Lounge at OR Tambo International Airport. Comair’s SLOW Lounge at the OR Tambo
International terminal now hosts Air France, KLM and Delta passengers, with
further interest from other carriers for this premium lounge offering. 

In addition, the Group has opened a new concept SLOW XS Lounge at Lanseria
International Airport.  The SLOW XS Lounge offers a slightly different
proposition geared towards a smaller airport footprint but similar in quality
and service to the other SLOW Lounges. 

The Group recently expanded the SLOW in the City offering by adding a feature
restaurant, 'The Course', at the Lounge’s entrance that provides an informal
dining and meeting environment in the centre of Sandton.  The restaurant offers
an assortment of signature dishes and is open six days a week.

Investment in the lounge businesses during the reporting period amounted to
R41 million.

The Catering Business

The Group’s catering unit, Foodirections, currently leases the premises from
the Group’s property-owning company, Alooca Properties Proprietary Limited, 
which premises are situated in Anchor Industrial Park. 
This site allows for the ongoing expansion of Foodirections.

Foodirections has recently been granted a licence to provide third-party
catering services at Airports Company South Africa airports, which will allow
it to provide catering to third-party airlines.

Foodirections has additionally won the tender to cater for the lounge food
and beverage service requirements for British Airways International at both OR Tambo
International and Cape Town International airports.

Finally, the Group has also moved the catering and procurement needs of the
SLOW Lounge network to Foodirections. The combined procurement volumes have
allowed for improved buying discounts and numerous cost saving benefits to the
Group.

The Travel Business

The Group has invested in the development of a ‘next generation’ distribution
platform for luxury inbound tourism into Africa amounting to approximately
R26 million over 3 years. Studies show that luxury travel has emerged as
the fastest growing segment in global travel, with growth in tourism arrivals
in Sub-Saharan Africa exceeding that of the rest of the world. However, the
technology used in South Africa to compete for global tourism is outdated and
the Group has taken the opportunity to establish effective global distribution
channels. The new platform will commence selling in mid-2019.

The existing travel businesses, including kulula.work, kulula.holidays and
mtbeds continue to deliver good margins and steady growth despite the depressed
local travel market.

Technology Solutions

Consistent focus on implementing technology solutions has enhanced the Group’s
operating performance, customer service and revenue generation. The pace of 
development in technology is relentless, and to this end, the Group has
acquired a data integration platform from Tibco, at a total cost of R34 million
over two years. This technology seamlessly connects all applications and data
sources and will eliminate the duplication of development efforts across the
Group’s various distribution channels while facilitating the extraction of the
maximum benefit from its customer data in order to improve on its service
offering and on the marketing of relevant products to its various customer
segments.

The Group has further invested in the renewal of its Sabre suite of software
licences, amounting to R20 million over two years.

Furthermore, new software applications have been developed internally for use
on board the aircraft and on the ground to facilitate more efficient operating
procedures.

Post financial year end 30 June 2018, the Group entered into a joint venture
with an IT Technology company, Infinea SA Holdings Proprietary Limited, thereby
establishing a jointly held company called Nacelle Proprietary Limited.
Nacelle will be positioned as a service provider to the aviation and related
sectors to deliver services such as IT operations support, project deployment
and software development. The joint venture creates the opportunity to
commercialise decades of Comair’s operational discipline and expertise in
commercial aviation through utilising Infinea’s expertise in software
development, software marketing, operations support and payment solutions.

People

The management of talent is considered to be a key differentiator of the Group
and remains a core focus. The Group values its talent and continues to make a
significant investment to support the management of its skills base. Talent
Management practices support decisions on building capacity now and into the
future, with the dual benefit to employees of building career paths.


Variable Voting Structure

In November 2017, Comair successfully implemented a variable voting structure
applicable to Foreign Shareholders in order to ensure that it does not exceed
the foreign control restrictions applicable to licensed air service operators
in South Africa.

Damages Claim

Comair’s claim against SAA for damages arising from anti-competitive conduct
was heard in the Gauteng South High Court between 18 April and 24 August 2016.
Judgement in this matter was handed down on 15 February 2017. In terms of the
judgement, Comair was awarded damages in the sum of approximately
R1.16 billion, inclusive of costs and interest to that date.  SAA lodged an
appeal against this judgement.  Comair lodged a cross appeal to recover the
full amount of the damages sustained plus interest on the total amount, which
if successful, will increase the damages awarded to approximately R2 billion.
The Supreme Court of Appelas required the High Court papers to be summarised,
which process has been completed and it is anticipated that the appeal will be
heard in early 2019. Interest continues to accrue until the date of payment.

Prospects

While profits for the year were good, we are still not achieving the margins
that will allow for the optimum pace of upgrading the fleet. The current weak
economy is expected to maintain pressure on consumer spending while the
oversupply of seats in the domestic market continues to place downward pressure
on pricing across most routes. The ongoing investment in new aircraft remains a
key competitive differentiator for Comair, particularly in an environment of
higher oil prices and a poor exchange rate.

Comair is therefore well placed to operate in these conditions, with strong
brands, committed staff, effective equipment, an efficient cost base, strong
cash reserves and investment into the diversified, non-airline segment of the
business, which is progressing well and will receive ongoing focus.

Dividends

Notice is hereby given that a final gross cash dividend of 17.00000 cents per
ordinary share has been approved and declared by the Board which is payable to
shareholders for the financial year ended 30 June 2018.  The dividend has been
declared out of income reserves.

The dividend will be subject to a local dividend tax rate of 20% or 3.40000
cents per ordinary share, resulting in a net dividend of 13.60000 cents per
ordinary share, unless the shareholder is exempt from paying dividend tax or is
entitled to a reduced rate in terms of the applicable double taxation
agreement. The Company’s tax reference number is 9281/874/7/1/0 and the number
of ordinary shares in issue at the date of this declaration is 469,330,865.

In accordance with the provisions of Strate, the electronic settlement and
custody system used by the JSE Limited, the relevant dates for the dividend are
as follows:

Event                                               Date
Last day to trade (cum divdend)                     Tuesday, 23 October 2018
Shares commence trading (ex dividend)               Wednesday, 24 October 2018
Record date (date shareholders recorded in books)   Friday, 26 October 2018
Payment date                                        Monday, 29 October 2018

Share certificates may not be dematerialised or rematerialised between
Wednesday, 24 October 2018 and Friday, 26 October 2018, both days inclusive.


Directors’ Appointments and Resignations

Resignations

The following directors resigned:

-  Mr N Li resigned as a Non-executive Director on 31 August 2018
-  Mr C Luo resigned as a Non-executive Director on 31 August 2018
-  Mr JM Kahn retired as an Independent Non-executive Director (and his
   associated positions on the Remunerations Committee and Nominations
   Committee) on 17 September 2018 with immediate effect
-  Dr PJ Welgemoed, an Independent Non-executive Director, retired as a member
   of the Audit Committee on 17 September 2018 with immediate effect

Appointments 

-  Ms NB Sithole, was appointed as an Independent Non-executive Director of the
   Company, on 1 October 2017 and as a member of the Audit Committee on
   17 September 2018
-  Ms P Mahanyele, an Independent Non-executive Director, was appointed as a
   member of the Audit Committee on 1 October 2017
-  Mr SL Doyle, was appointed as an Independent Non-executive Director of the
   Company, on 1 December 2017 and as a member of the Audit Committee on
   17 September 2018

Appreciation

Our sincere appreciation goes to every person within the Comair Group who
contributed to our success during the year under review, including our
directors, management and employees, and a special thanks to our customers and
stakeholders who have chosen to use our services or provide services to us. We
also thank all the public-sector departments and agencies that we have worked
with, for their shared commitment to our objectives.

Condensed Consolidated Audited Results
Comair Limited

                                                                Group
                                                       Audited         Audited
                                                          Year            Year
                                                       30 June         30 June
                                                          2018            2017
                                                         R'000           R'000
                                              ---------------------------------
Condensed Consolidated Statement
of Profit or Loss

Revenue                                              6,536,540      6,063 ,737 
Operating Expenses                                  (5,412,752)     (4,999,789)
                                              ---------------------------------
Operating profit before depreciation,
amortisation, unrealised (loss)/gain
on translation on dollar denominated
loan and (profit)/loss on sale of assets             1,123,788       1,063,948
Depreciation and amortisation                         (443,237)       (456,281)
Unrealised translation (loss)/gain on
dollar denominated loan                                (12,056)         40,697
Profit/(loss) on sale of assets                          2,085         (10,574)
                                              ---------------------------------
Profit from operations                                 670,580         637,790
Interest income                                         36,611          49,670
Interest expense                                      (248,938)       (250,377)
Impairment reversal/(loss) on remeasurement
of non-current assets held for sale                         12         (11,270)
Income from equity accounted investments                12,979           8,874
                                              ---------------------------------
Profit before taxation                                 471,244         434,687
Taxation                                              (145,633)       (137,717)
                                              ---------------------------------
Profit for the year                                    325,611         296,970

Total profit for the year
attributable to:-

Owners of the parent                                   324,537         296,023
Non-controlling interest                                 1,074             947
                                              ---------------------------------
                                                       325,611         296,970

Condensed Consolidated Statement
of Comprehensive Income

Profit for the year                                    325,611         296,970

Other comprehensive income, net of tax                       -               -

Total comprehensive income for the year                325,611         296,970
                                              ---------------------------------

Total comprehensive income for the year
attributable to:-

Owners of the parent                                   324,537         296,023
Non-controlling interest                                 1,074             947
                                              ---------------------------------
                                                       325,611         296,970

Earnings per share (cents)                                69.8            63.7
Headline earnings per share (cents)                       69.5            67.0
Diluted Earnings per share (cents)                        69.8            63.7
Diluted Headline earnings per share (cents)               69.5            67.0

Actual number of shares in issue ('000)                469,331         469,331
Weighted ordinary shares in issue ('000)               465,089         465,089
Diluted weighted ordinary shares in
issue ('000)                                           465,089         465,089

Reconciliation between earnings and
headline earnings

Profit after tax attributable to the equity
holders of the parent                                  324,537         296,023
Less: IFRS 5 impairment reversal/(loss) on
remeasurement of non-current assets held
for sale                                                   (12)         11,270
Add: taxation effect of IFRS 5 impairment
reversal/(loss) on remeasurement of non-current
assets held for sale                                         3          (3,156)
Less: IAS 16 (profit)/loss on disposal of
property, plant and equipment                           (2,085)         10,574
Add: taxation effect of IAS 16 profit/(loss)
on disposal of property, plant and equipment               584          (2,961)

Headline earnings attributable to ordinary
shareholders                                           323,027         311,751
                                              ---------------------------------


                                                                Group
                                                       Audited         Audited
                                                          Year            Year
                                                       30 June         30 June
                                                          2018            2017
                                                         R'000           R'000
                                              ---------------------------------

Condensed Consolidated Statement
of Financial Position

ASSETS

Property, plant and equipment                        5,509,614       4,631,326
Intangible assets                                       14,970          15,892
Investments in associates                               52,645          45,296
Goodwill                                                13,169           6,615
Deferred tax                                             3,853           3,902
Current assets                                       1,029,399       1,208,365
Non-current assets held for sale                             -           7,044
                                              ---------------------------------
                                                     6,623,650       5,918,440
                                              ---------------------------------

EQUITY AND LIABILITIES

Share capital and reserves                           1,779,800       1,542,717
Non-current portion of interest
bearing liabilities                                  2,176,595       2,344,926
Deferred taxation                                      571,726         435,043
Share-based payments                                         -           5,032
Current liabilities                                  2,095,529       1,590,722
                                              ---------------------------------
                                                     6,623,650       5,918,440
                                              ---------------------------------

Net asset value per share (cents)                        382.7           331.7

Condensed Consolidated Statement
of Cash Flows

Cash generated from operating activities
Cash generated from operations                       1,172,829       1,149,088
Interest paid                                         (255,847)       (250,377)
Interest received                                       36,611          49,670
Taxation (paid)/refunded                                (7,308)         25,034
                                              ---------------------------------
Net cash from operating activities                     946,285         973,415
                                              ---------------------------------

Cash utilised in investing activities
Additions to property, plant and equipment            (706,364)       (323,248)
Proceeds on disposal of property, plant
and equipment                                            8,836           3,594
Additions to intangible assets                          (8,795)         (9,652)
Pre-delivery payments                                 (219,714)       (132,217)
Business combinations, net of cash acquired             (1,300)              -
Movement in investment in associate                      5,630               -
Repayment of loan by associate                               -           7,852
                                              ---------------------------------
Net cash from investing activities                    (921,707)       (453,671)
                                              ---------------------------------

Cash utilised in financing activities

Raising of interest-bearing liabilities                240,989               -
Repayment of interest-bearing liabilities             (426,515)       (717,921)
Refund on aircraft purchase price for
pre-delivery payment finance                                 -          96,738
Dividends paid                                         (88,528)        (83,776)
                                              ---------------------------------
Net cash from financing activities                    (274,054)       (704,959)
                                              ---------------------------------

Total cash movement for the year                      (249,476)       (185,215)
Cash and cash equivalents at the
beginning of the year                                  934,913       1,120,128

Cash and cash equivalents at the end
of the year                                            685,437         934,913
                                              ---------------------------------

                                                                Group
                                                       Audited         Audited
                                                          Year            Year
                                                       30 June         30 June
                                                          2018            2017
                                                         R'000           R'000
                                              ---------------------------------

Condensed Consolidated Segmental Report

Segmental revenue
Airline                                              6,207,526       5,796,443
Non-airline                                            329,014         267,294
                                              ---------------------------------
                                                     6,536,540       6,063,737
                                              ---------------------------------

Segmental results
Airline                                              1,011,557         964,559
Non-airline                                            112,231          99,389
                                              ---------------------------------
Operating profit before depreciation,
amortisation, unrealised (loss)/gain on
translation on dollar denominated loan
and profit/(loss) on sale of assets                  1,123,788       1,063,948

Depreciation and amortisation - Airline               (416,439)       (438,115)
Depreciation and amortisation - Non-airline            (26,798)        (18,166)
Unrealised translation (loss)/gain on
dollar denominated loan - Airline                      (12,056)         40,697
Profit/(loss) on sale of assets - Airline                1,656         (10,574)
Profit/(loss) on sale of assets – Non-airline              429               -
                                              ---------------------------------
Profit from operations                                 670,580         637,790
                                              ---------------------------------

Interest income - Airline                               18,329          32,225
Interest income - Non-airline                           18,282          17,445
Interest expense - Airline                            (248,741)       (250,368)
Interest expense - Non-airline                            (197)             (9)

Impairment reversal/(loss) on remeasurement
of non-current assets held for sale - Airline               12         (11,270)
Income from equity accounted
investments - Non-airline                               12,979           8,874
                                              ---------------------------------
Profit before tax                                      471,244         434,687
                                              ---------------------------------

Segmental assets - Airline                           5,953,352       5,398,905
Segmental assets - Non-airline                         670,298         519,535
Segmental liabilities - Airline                     (4,716,041)     (4,261,165)
Segmental liabilities - Non-airline                   (127,809)       (114,558)
Segmental capital additions - Airline
(excluding borrowing costs capitalised)                789,737         886,615
Segmental capital additions - Non-airline               118,135          79,206

Condensed Consolidated Statement
of Changes in Equity

Opening balance                                      1,542,717       1,329,515
Total comprehensive income for the year                325,611         296,970
Repurchase of Comair Shares                                  -               8
Dividend paid                                          (88,528)        (83,776)
                                              ---------------------------------
                                                     1,779,800       1,542,717
                                              ---------------------------------

Business Combinations

On 11 December 2017, the Group acquired 100% of the share capital in EPT
Aviation Training Proprietary Limited and 100% of the share capital in Global
Training College South Africa Proprietary Limited (previously EPT Global
Training Proprietary Limited). These acquisitions were acquired for an
aggregate consideration of R8.5 million, which was settled with cash and an 
amount payable.

The acquired businesses contributed revenues of R12.8 million and net profit
after tax of R4.6 million to the Group since acquisition.

These provisional amounts have been calculated using the Group’s accounting
policies.

If the businesses had been acquired on 1 July 2017, revenues and net profits
after tax from the businesses would have been R17.6 million and R5.1 million 
respectively.

The below table summarises the provisional amount of assets acquired and
liabilities assumed at the acquisition date:


                                                                       Audited
                                                                          Year
                                                                       30 June
                                                                          2018
                                                                         R'000
                                              ---------------------------------

Purchase consideration                                                   8,480

The provisional assets and liabilities
arising from the acquisition are as follows:

Property, plant and equipment                                            2,012
Trade and other receivables                                              1,038
Cash and cash equivalents                                                5,076
Current tax                                                                132
Financial liabilities                                                      (74)
Trade and other payables                                                (3,680)
Shareholder loans                                                       (2,578)
                                              ---------------------------------
Fair value of net assets                                                 1,926
Goodwill                                                                 6,554
                                              ---------------------------------
Total purchase consideration                                             8,480
                                              ---------------------------------

Purchase consideration                                                  (8,480)
                                              ---------------------------------
- Settled in cash                                                       (6,376)
- Settled in amount payable                                             (2,104)
                                              ---------------------------------

Cash and cash equivalents in subsidiaries acquired                       5,076

                                              ---------------------------------
Cash outflow on acquisition                                             (1,300)
                                              ---------------------------------

Significant Commitments

Comair made pre-delivery payments of R368 million in the current year (prior
year: R132 million), in addition to R102 million in preceding years, towards
the delivery of eight Boeing 737-8 MAX aircraft due for delivery between 2019
and 2022. The Group has a remaining commitment to Boeing for R5.5 billion at
year-end (prior year R5.7 billion) in respect of the Boeing 737-8 MAX order,
the funding options of which will be finalised closer to the time of delivery.
Pre-delivery payment finance has been mandated to Investec Bank.

Basis of Preparation

The accounting policies and method of measurement and recognition applied in
the preparation of these condensed consolidated financial results are in terms
of International Financial Reporting Standards (“IFRS”). The Group adopted the
amendments to IAS 7 Statement of Cash Flows during the year. The adoption of
this amendment did not result in any change in the accounting policies and had 
no effect on the results of the Group. Other than the adopted amendment above,
the accounting policies and method of measurement and recognition are
consistent with those applied in the audited annual financial statements for
the previous year ended 30 June 2017. The condensed consolidated financial 
statements are prepared in accordance with the requirements of the JSE Listings
Requirements and the requirements of the Companies Act of South Africa. The
condensed consolidated financial results are presented in terms of the minimum
disclosure requirements set out in International Accounting Standards (“IAS”)
34 – Interim Financial Reporting, as well as the SAICA Financial Reporting Guides
as issued by the Accounting Practices Committee and the Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council. These
condensed consolidated financial results have been prepared by Ryan de Miranda
CA(SA), under the supervision of Kirsten King CA(SA), the Financial Director.
Any reference to future financial performance included in this announcement has
not been reviewed or reported on by the Group’s external auditors. 

Subsequent Events

Comair acquired 100% of the issued share capital of the leadership development
consultancy company, Metaco Holdings Proprietary Limited. Metaco's focus is on
strategic development, organisational design and change management. Its client
base includes boards, leadership teams and individuals across a range of
industries, in the public and private sector. Metaco offers a range of coaching
and training modules for individuals and groups, developed in line with 
international best practice. The transaction is effective 1 July 2018, with an
initial purchase price consideration of R12.8 million being settled in cash
with the remainder being earned based on cumulative Net Profit after Taxation
for the period from the effective date until the sixth anniversary of the
effective date, less 25%, being the deemed portion of the Net Profit After
Taxation that the sellers agree will be attributable to the Purchaser becoming
a shareholder of Metaco Holdings Proprietary Limited. 

The table below summarises the provisional amount of assets acquired and
liabilities assumed at the effective date:


                                                                         R'000
                                              ---------------------------------

Purchase consideration                                                  12,860

The summarised assets and liabilities
arising from the acquisition are as follows:

Total assets                                                             3,287
Total liabilities                                                       (1,940)
                                              ---------------------------------
Fair value of net assets                                                 1,347
Goodwill                                                                11,513
                                              ---------------------------------
Total purchase consideration                                            12,860
                                              ---------------------------------

Purchase consideration                                                 (12,860)
                                              ---------------------------------
- Settled in cash                                                      (12,860)
                                              ---------------------------------

Cash and cash equivalents in
subsidiaries acquired                                                    2,010

                                              ---------------------------------
Cash outflow on acquisition                                            (10,850)
                                              ---------------------------------

The above information is based on preliminary provisional information and is
subject to change pending the finalisation of the purchase price accounting,
which will be completed within 12 months of the acquisition as defined in the
applicable accounting standard.

Comair also entered into a joint arrangement with an IT company named Infinea
SA Holdings Proprietary Limited to launch a new company, resulting in a joint
venture, named Nacelle Proprietary Limited. The joint venture is a continuation
of the Group's diversification strategy and has resulted in Comair moving its
IT Department into a separate entity, namely Nacelle Proprietary Limited, that
will provide a variety of IT related services. The vision of the joint venture
is to develop and build the next generation of operationally tested solutions
for the Group, as well as for other industries that benefit from similar
technology driven solutions. The transaction is effective 1 August 2018.

No other matters have occurred between the reporting date and the date of
approval of the Financial Statements which would have a material effect on
these Financial Statements.

Audit Opinion

The auditors, Grant Thornton, (Ben Frey (Audit Partner, Registered Auditor,
Chartered Accountant (SA)), have issued their unmodified opinion on the Group’s
Financial Statements for the year ended 30 June 2018. The audit was conducted
in accordance with International Standards on Auditing. A copy of the auditor’s
report together with a copy of the audited Financial Statements are available
for inspection at the Company’s registered office. These condensed consolidated
provisional audited Financial Statements have been derived from the Group’s
Annual Financial Statements. The contents of this announcement are extracted
from audited information, although the announcement itself is not audited. The
Directors of Comair take full responsibility for the preparation of this
announcement and confirm that the financial information has been correctly
extracted from the underlying audited Annual Financial Statements.

The auditor’s report does not necessarily report on all of the information
contained in this announcement. 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.

By order of the Board
P van Hoven (Chairman)           ER Venter (CEO)
17 September 2018

Sponsor:
PSG Capital
Bonaero Park
18 September 2018
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