Wrap Text
Unaudited Condensed Consolidated Interim, Financial Results for the six months ended 31 August 2018
Wilderness Holdings Limited
"Wilderness" or "the Company" or "the Group"
Share code: WIL ISIN: BW0000000868
Registration number: 2004/2986
BSE: Primary Listing
JSE: Secondary Listing
Tax reference number: C075372-01-01-7
Unaudited condensed consolidated interim financial results
For the six months ended 31 August 2018
Founded in Botswana in 1983, Wilderness Holdings is an award-winning and
globally respected ecotourism company present in the prime wilderness and
wildlife areas of southern and east Africa. Pivoted off the continent's
most diverse portfolio of luxury safari camps, the Group operates a
vertically integrated business model that combines the ownership of product
(safari camps), support services (bush airline, and touring and transfer
services), and marketing, sales and reservations businesses. Collectively,
these are termed "the travel experience" and serve to ensure certainty of
supply, ownership of the supply chain and a seamless service to both the
client (the travel trade) and the consumer (our guest).
Our Blueprint - The 4Cs
The Wilderness Group is committed to ensuring the sustainability of our
operations. This commitment is part of our DNA, with our Vision and Values
based on our 4Cs sustainability ethos of:
Commerce
Community
Culture
Conservation
Highlights
- Revenue up 11% to P780 million
- EBITDA up 59% to P285 million
- Trading profit* up 26% to P235 million
- Total revenue per available room** up 12%
- Profit after tax up 36% to P159 million
- Cash generated by operating activities up 48% to P323 million
- HEPS up 36% to 59 thebe per share
- Occupancy rate up to 67% from 65%
* EBITDA before the effects of other gains and foreign exchange
(losses)/gains.
** Total revenue per available room (TRevPar) is calculated as total revenue
from Travel Experience divided by total available rooms.
Condensed consolidated statement of comprehensive income
Unaudited Unaudited Audited
six months six months year
ended ended ended
P'000 31 Aug 2018 Change 31 Aug 2017 28 Feb 2018
Revenue 779 954 11% 704 949 1 208 912
Cost of sales (214 290) (209 826) (372 839)
Gross profit 565 664 495 123 836 073
Other gains 4 455 581 970
Operating expenses (330 449) 7% (309 161) (599 871)
Foreign exchange
gains/(losses) 44 993 (7 754) (30 777)
Operating profit for year
before items listed below
(EBITDA) 284 663 59% 178 789 206 395
Impairment loss (5 192) (4 231) (9 566)
Depreciation and
amortisation (52 629) (41 273) (86 224)
Operating profit 226 842 70% 133 285 110 605
Net finance costs (11 707) (9 473) (19 169)
Unrealised foreign exchange
(losses)/gains on loans (6 137) 9 319 17 381
Share of associate company
profit 2 882 2 035 6 067
Profit before taxation 211 880 57% 135 166 114 884
Taxation (52 721) (18 395) (27 580)
Profit for the period 159 159 36% 116 771 87 304
Other comprehensive
(loss)/income
Items that may be
subsequently reclassified
to profit or loss
Exchange differences on
translating foreign
operations (23 247) (2 211) 7 723
Equity holders of the
Company (23 286) (3 626) 9 807
Non-controlling interest (826) 423 335
Net investment in foreign
operations 865 992 (2 419)
Total comprehensive income
for the period 135 912 114 560 95 027
Profit attributable to:
Owners of the Company 140 320 99 945 76 658
Non-controlling interest 18 839 16 826 10 646
159 159 116 771 87 304
Total comprehensive
income attributable to:
Owners of the Company 117 899 97 311 84 046
Non-controlling interest 18 013 17 249 10 981
135 912 114 560 95 027
Earnings per share (thebe)
Basic 59.09 40% 42.17 32.32
Diluted 58.64 40% 41.92 32.03
Additional disclosure
Unaudited Unaudited Audited
six months six months year
ended ended ended
P'000 31 Aug 2018 31 Aug 2017 28 Feb 2018
Reconciliation between profit
attributable to owners of
the Company and headline
earnings
Profit attributable to
owners of the Company 140 320 99 945 76 658
Adjustments
IAS 16 - Gains on disposal
and impairment of property,
plant and equipment (2 078) (543) (873)
IAS 36 - Impairment of assets 5 192 4 209 9 549
IFRS 10 - Gain on loss of
control of subsidiary (2 377) - -
Tax effects of adjustments (456) (745) (2 231)
Minority interest (379) (37) (93)
Headline earnings 140 222 102 829 83 010
Number of shares issued (thousands)
Issued 237 562 237 362 237 437
Weighted average 237 462 237 017 237 203
Diluted weighted average 239 300 238 444 239 356
Headline earnings per share (thebe)
Basic headline 59.05 43.38 35.00
Diluted headline 58.60 43.13 34.68
Commitments
Capital
Authorised by directors and
contracted for 13 974 63 478 39 442
Not yet contracted for but
authorised by directors 43 137 56 832 81 915
57 111 120 310 121 357
It is intended to finance capital
expenditure from working capital
generated and existing borrowing
facilities.
Operating leases
Minimum lease payments due
- within one year 18 898 16 122 23 914
- in second to fifth year inclusive 60 015 51 515 70 592
- after fifth year 92 784 49 526 128 877
171 697 117 163 223 383
Borrowings
Non-current
Interest bearing 381 181 371 274 354 413
Non-interest bearing 15 067 15 206 10 969
Less: Current portion of
long-term liabilities (46 352) (7 078) (39 743)
349 896 379 402 325 639
Condensed consolidated statement of financial position
Unaudited Unaudited Audited
as at as at as at
P'000 31 Aug 2018 31 Aug 2017 28 Feb 2018
Assets
Non-current assets 1 018 810 887 950 986 295
Property, plant and equipment 775 750 643 635 734 927
Goodwill 58 109 69 085 68 976
Intangible assets 111 839 116 107 114 205
Investments and loans in associates 26 639 14 735 23 757
Loans receivable 19 331 13 622 18 710
Deferred tax assets 27 142 30 766 25 720
Current assets 845 611 732 720 538 077
Inventories 36 840 35 341 32 089
Receivables and prepayments 219 828 181 975 150 425
Current tax receivable 21 522 25 885 34 918
Bank balances and cash 567 421 489 519 320 645
Total assets 1 864 421 1 620 670 1 524 372
Equity and liabilities
Equity attributable to the
owners of the Company 633 111 566 763 553 665
Stated capital 168 771 167 291 168 634
Foreign currency translation reserve 9 047 21 443 31 468
Common control reserve (73 324) (73 324) (73 324)
Other non-distributable reserves 19 318 19 318 19 318
Share-based payment reserve (558) 34 (1 145)
Retained income 509 857 432 001 408 714
Non-controlling interest 56 043 44 536 38 268
Total equity 689 154 611 299 591 933
Non-current liabilities 423 132 444 548 394 138
Borrowings 349 896 379 402 325 639
Deferred tax liabilities 73 236 65 146 68 499
Current liabilities 752 135 564 823 538 301
Trade and other payables 621 705 497 119 454 653
Borrowings - current portion 46 352 7 078 39 743
Current tax liabilities 25 052 8 471 1 830
Bank overdrafts 59 026 52 155 42 075
Total liabilities 1 175 267 1 009 371 932 439
Total equity and liabilities 1 864 421 1 620 670 1 524 372
Condensed consolidated statement of cash flows
Unaudited Unaudited Audited
six months six months year
ended ended ended
P'000 31 Aug 2018 31 Aug 2017 28 Feb 2018
Cash flow from operating activities
Cash generated from operations 347 515 253 776 280 725
Net finance costs (11 707) (9 473) (19 169)
Taxation paid (12 560) (26 532) (42 633)
Net cash inflow from
operating activities 323 248 217 771 218 923
Cash flow from investing activities
Disposal of subsidiary company 15 856 - -
Additions to property, plant
and equipment and intangibles (97 608) (120 794) (266 049)
Proceeds on disposal of property,
plant and equipment and intangibles 3 594 3 318 4 189
Acquisition of associate company - - (4 990)
Long-term loan receivable advanced (622) (13 622) (18 710)
Net cash outflow from investing
activities (78 780) (131 098) (285 560)
Cash flow from financing activities
Non-controlling interests'
share of dividends (238) (1 299) (1 299)
Dividends paid (39 177) (39 082) (39 082)
Repayment of long-term liabilities (21 833) (2 709) (7 260)
Long-term liabilities advanced 9 244 227 134 233 828
Net cash (outflow)/inflow
from financing activities (52 004) 184 044 186 187
Net increase in cash and
cash equivalents 192 464 270 717 119 550
Unrealised exchange gain/
(loss) on foreign cash balances 37 361 (3 832) (11 459)
Cash and cash equivalents
at beginning of year 278 570 170 479 170 479
Cash and cash equivalents
at end of year 508 395 437 364 278 570
Condensed consolidated statement of changes in equity
Unaudited Unaudited Audited
six months six months year
ended ended ended
P'000 31 Aug 2018 31 Aug 2017 28 Feb 2018
Opening balance 591 933 536 571 536 571
Share issue on settlement
of share scheme 137 - 1 343
Non-controlling portion of
dividend paid (238) (1 299) (1 299)
Dividends paid (39 177) (39 082) (39 082)
Total comprehensive income
for the period 135 912 114 560 95 027
Share-based payment reserve 587 552 (627)
Other - (3) -
Closing balance 689 154 611 299 591 933
Segmental information
Unaudited Unaudited Audited
six months six months year
ended ended ended
P'000 31 Aug 2018 31 Aug 2017 28 Feb 2018
Segment profit
Botswana 117 055 91 608 118 760
Kenya 11 711 5 083 5 056
Namibia 24 213 22 909 33 024
Rwanda 12 131 7 669 15 263
South Africa 33 339 35 399 34 129
Zambezi 38 364 24 546 30 422
Intergroup (1 598) (1 252) (452)
Group 235 215 185 962 236 202
Depreciation and amortisation
Botswana (25 600) (18 543) (39 722)
Kenya (2 869) (1 792) (4 018)
Namibia (6 666) (6 981) (12 213)
Rwanda (3 113) (141) (4 211)
South Africa (3 438) (4 360) (7 896)
Zambezi (10 943) (9 456) (18 164)
Group (52 629) (41 273) (86 224)
Transactions unallocated to
a segment
Other gains 4 455 581 970
Foreign exchange (losses)/gains 44 993 (7 754) (30 777)
Impairment losses (5 192) (4 231) (9 566)
Interest paid (14 400) (11 052) (23 202)
Interest received 2 693 1 579 4 033
Unrealised foreign exchange
(losses)/gains on loans (6 137) 9 319 17 381
Associate earnings 2 882 2 035 6 067
Profit before taxation 211 880 135 166 114 884
Taxation (52 721) (18 395) (27 580)
Profit after tax 159 159 116 771 87 304
Segment assets
Botswana 918 595 850 492 871 711
Kenya 93 207 59 537 59 429
Namibia 180 995 173 726 164 249
Rwanda 99 023 76 262 72 748
South Africa 485 134 415 478 249 911
Zambezi 188 304 150 307 115 856
Central financing
activities and eliminations (100 837) (105 132) (9 532)
Group 1 864 421 1 620 670 1 524 372
Segment liabilities
Botswana 583 782 555 368 528 799
Kenya 83 834 50 204 54 656
Namibia 53 022 50 657 38 942
Rwanda 23 132 4 295 14 301
South Africa 526 182 442 905 327 571
Zambezi 64 835 52 633 35 350
Central financing
activities and eliminations (159 520) (146 691) (67 180)
Group 1 175 267 1 009 371 932 439
Unaudited Unaudited Audited
six months six months year
ended ended ended
P'000 31 Aug 2018 31 Aug 2017 28 Feb 2018
Revenue
Revenues by type of service
Travel experience 705 279 621 484 1 071 835
Service fees 68 353 67 192 109 366
Other revenue 6 322 16 273 27 711
779 954 704 949 1 208 912
Revenues by geographical regions
Botswana 335 935 293 969 481 249
Kenya 62 536 49 355 92 394
Namibia 106 529 107 477 196 877
Rwanda 25 897 20 733 44 221
South Africa 505 217 459 286 758 086
Zambezi 131 576 114 177 193 111
Intergroup (387 736) (340 048) (557 026)
779 954 704 949 1 208 912
% % %
Revenues by source market
Africa and Middle East 32 32 35
Americas 46 43 40
Australasia 2 2 2
Europe and Asia 20 23 23
100 100 100
Commentary
The Group produced an excellent half year performance, matching its best ever
occupancy rate of 71%, normalised for Governors', or 67% overall, which is the
highest recorded since the acquisition of Governors'. The successful launch of
the newly built Mombo, political stability in Kenya, appreciation of the US
Dollar since the beginning of the financial year and a strong US market
provided tailwinds to significant growth.
This saw trading profit jump by 26% to P235 million in spite of just one
percentage point increase in total available bednights (capacity) to 156 788.
The Group posted 36% increase in headline earnings per share (HEPS).
Financial review
Revenue increased by 11% to P780 million, following significant improvement in
yields and the 3% rise in bednights sold to 104 855 (2017: 101 404).
Trading profit margin increased from 26% to 30%. This reflects the impact on
the bottom line of the strong demand for bednights and the improved utilisation
of the Group's assets. The impact on revenue of the depreciation of the local
currencies was negligible, largely because of the adoption of IFRIC 22 which
requires that foreign currencies be converted at the earlier of receipt or
service. As the Group's collection period is primarily from February to July,
a substantial portion of revenue was recorded at exchange rates lower than
those prevailing last year, as the Pula exchange rate to the US Dollar lagged
behind until June 2018. Costs have remained well contained at 7% higher than
prior year. Some level of upward pressure is evident in transport costs due
to higher fuel prices and greater activity, as well as lease costs (impact of
new leases and their accounting smoothing). Staff costs increased marginally
higher than inflation, largely because of a slight increase in headcount and
higher share-based payments charges,increasing by 34% to P3.3 million from
P2.4 million.
Other gains of P4.5 million include proceeds from insurance claims amounting
to P2.1 million and profit on sale of a subsidiary of P2.4 million. Impairment
losses amounted to P5.2 million and relate to the impairment of Mombo Trails
Camp (P3.5 million) and a damaged aircraft (P1.5 million).
In line with the Group's hedging strategy, forward cover remains at zero
percent of calculated forward exposure until, in the opinion of the Board,
the Rand fundamentals make cover necessary.
Net finance costs were 24% higher at P11.7 million (2017: P9.5 million),
being a consequence of the increased debt to finance capital investment and
acquisitions.
The Group's effective tax rate increased to 25% from 14% in the prior year,
largely due to the recognition in the prior year of a P10 million deferred
tax asset in the Governors' Group.
Capital expenditure amounted to P100 million for the period, continuing
with the philosophy to ensure the Group's properties and assets remain in
pristine condition. Approximately P9 million was spent on a temporary camp
and one new camp, and P45 million on rebuilding existing camps and one
additional aircraft. The balance is defensive in nature.
Cash balances, less overdrafts, have increased by 83% to P508 million as
a result of strong cash generated from operations amounting to
P323 million, offset by an outflow in investing activities of P79 million
and loan repayments and a dividend payment of P52 million. The carrying
values of the financial assets and financial liabilities approximate
their fair value.
Geographical operations (segmental performance)
All geographical segments, other than South Africa, reported increases
in segment profit. The two main drags on South Africa were additional
corporate recoveries as well as a slow-down in the road transfer business
due to the impact on tourism following the water crisis in Cape Town.
Dividend
In line with the Group's stated policy to only consider paying dividends
based on full year results, no interim dividend is proposed.
Subsequent events
No material events have occurred between the reporting date and the date
of this report.
Seasonality
The Group's peak demand occurs in the first half of the year. This is
largely due to the floods in the Okavango Delta and corresponds with the
holiday season in our sales markets. The revenue for the six months ended
31 August 2018represented 65% (2017: 64%) of the total sales for the year
ended 28 February 2018.
Leases
The concession upon which Vumbura Plains and Little Vumbura are situated
has been awarded. The lease agreement is in the process of finalisation.
Shares in issue
During the period the Company issued 124 663 ordinary shares at no par
value (representing approximately 0.05% of the enlarged number of shares
in issue) for no consideration to settle the share scheme obligations.
At 31 August 2018 the number of ordinary shares in issue was 237 562 016
(2017: 237 362 408) and the weighted average number of shares was
237 461 903 (2017: 237 016 867).
Related party information
There have been no related party matters that require disclosure, which
would have a material impact on the interpretation of the above results,
other than those already notified to shareholders on 31 July 2018.
Directorate
The following changes to directorate occurred during the reporting period:
Name Designate Nature Date
Mr Jochen Zeitz Non-executive Resigned 12 July 2018
Mr Christophe Vinsonneau Non-executive Resigned 12 July 2018
Mr Babajide HK (Jide) Olanrewaju Non-executive Appointed 12 July 2018
Mr Akinyemi (Yemi) Lalude Non-executive Appointed 12 July 2018
Mr Michael (Mike) Stone Non-executive Appointed 12 July 2018
Mr Nicholas (Nick) Stone Non-executive Appointed 12 July 2018
Mr Michael Tollman Independent Resigned 23 August 2018
non-executive
Mr Gavin Tollman Non-executive Resigned 23 August 2018
Mr Parks Tafa Non-executive Retired 30 August 2018
Mr Roux Marnitz Lead independent Retired 30 August 2018
non-executive
Basis of preparation
The condensed financial information has been prepared in accordance with and
containing the information required by IAS 34 Interim Financial Reporting, the
SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee and Financial Pronouncements as issued by Financial Reporting
Standards Council and complies with the disclosure requirements of the Botswana
Stock Exchange and the Johannesburg Stock Exchange Listings Requirements.
The report has been prepared using accounting policies that comply with
International Financial Reporting Standards, in a manner that is consistent
with those applied in the prior year financial statements.
Changes in accounting policies and comparability
The Group has adopted certain new standards, amendments and interpretations
to existing standards which are effective for the financial year beginning
1 March 2018. The adoption of amendments to these standards has not had any
material impact on previously reported figures.
Outlook
The Group's strategy continues to focus on investing in African tourism markets
that offer authentic wildlife and safari experiences and where our specific
ecotourism model can have positive conservation and community impacts. Our
ecotourism model and our vertical integration is a key differentiator from our
competitors and places us at a significant advantage. Our forward occupancy for
the rest of the year is expected to at least match that of the prior year. The
continued strength of the US economy, continued political stability in Kenya
and further progress in Zimbabwe are positive factors that should drive demand
for our product, for so long as they continue.
The rebuilt camps of Mombo, Chitabe and Serra Cafema (September 2018) have all
been successful with enormous positive feedback from the trade. Our new lodge
development at Magashi in Akagera National Park, Rwanda, is picking up steam
and is expected to be completed in the first quarter of next year.
By order of the Board
Keith Vincent Ami Azoulay
Chief Executive Officer Chief Financial Officer (Preparer)
29 October 2018
Registered office (Botswana):
Deloitte House, Plot 64518,
Fairgrounds, Gaborone, Botswana
External company registration number:
2009/022894/10
Registered office (South Africa):
373 Rivonia Boulevard, Rivonia, South Africa.
PO Box 5219, Rivonia 2128, South Africa
BSE Sponsor:
Motswedi Securities (Proprietary) Limited
JSE Sponsor:
Arbor Capital Sponsors Proprietary Limited
Transfer secretaries:
Corpserve Botswana - Computershare
Directors:
JM Hunt*, MW McCulloch#, MPK ter Haar*, A Lalude#, B Olanrewaju#,
M Stone#, N Stone#, KNW Vincent (CEO), A Azoulay (CFO), DA de la Harpe
#non-executive director *independent non-executive director
Group Company Secretary:
L Alexander
www.wilderness-holdings.com
Date: 29/10/2018 09:03:00 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.