quality assets
RAH
GPI's effective stake: 30.57%
GPI directly owns 30.57% of RAH, through a 100% held subsidiary company.RAH is a JSE-listed investment holding company that holds its core investments in gaming assets in the Western Cape, KwaZulu-Natal, Gauteng and the Eastern Cape. The gaming industry continues to enjoy favourable trading conditions in South Africa, notwithstanding the general slow-down in consumer spending and it is expected that the resilience of earnings in the industry will continue.
RAH’s principal assets are its interests in four casinos, being Carnival City, Sibaya, Boardwalk and GrandWest. In addition, RAH has interests in the management companies of each of the aforementioned casinos, as well as Sun International’s National Casino Management Company. In addition to the above interests, RAH holds an interest in Golden Valley Casino (Worcester).
| PROFIT AND DIVIDEND ANNOUNCEMENT FOR THE SIX MONTHS ENDED 31 DECEMBER 2010 | |||
| GROUP STATEMENTS OF COMPREHENSIVE INCOME | |||
| Year ended 30 June | Year ended 30 June | ||
| 2010 | 2009 | ||
| R'000 | Audited | Audited | |
| Revenue | 62 718 | 77 041 | |
|---|---|---|---|
| Net investment profit/(loss) | 1 076 | (6 694) | |
| Share of profits of associates | 44 418 | 47 731 | |
| Interest income | 1 443 | 3 582 | |
| Operating income | 109 655 | 121 660 | |
| Operating costs | (3 869) | (4 690) | |
| Amortisation | (6 606) | (7 584) | |
| Impairment of intangible asset | (12 659) | (11 818) | |
| Impairment of available-for-sale investment | (7 368) | – | |
| Interest expense | (21) | (602) | |
| Profit before tax | 79 132 | 96 966 | |
| Tax | 1 403 | 1 740 | |
| Profit for the year | 80 535 | 98 706 | |
| Other comprehensive income | |||
| Available for sale investments: | |||
| Changes in fair value, net of tax | 77 693 | (21 184) | |
| Reclassification adjustment for impairment included in profit for the year | 96 | – | |
| Total comprehensive income for the year | 158 324 | 77 522 | |
| Profit for the year attributable to: | |||
| Minority shareholder | 3 267 | 6 758 | |
| Ordinary shareholders | 77 268 | 91 948 | |
| 80 535 | 98 706 | ||
| Total comprehensive income for the year attributable to: | |||
| Minority shareholder | 7 812 | 3 331 | |
| Ordinary shareholders | 150 512 | 74 191 | |
| 158 324 | 77 522 | ||
| Earnings per share (cents) | 21,4 | 25,4 | |
| Headline earnings per share (cents) | 24,5 | 30,1 | |
| GROUP STATEMENTS OF FINANCIAL POSITION | |||
| 30 June | 30 June | ||
| 2010 | 2009 | ||
| R'000 | Audited | Audited | |
| ASSETS | |||
| Non-current assets | |||
| Investment in associates | 93 555 | 107 334 | |
| Available-for-sale investments | 784 892 | 711 518 | |
| 878 447 | 818 852 | ||
| Current assets | |||
| Accounts receivable | 556 | 377 | |
| Tax | 196 | 2 575 | |
| Cash and cash equivalents | 26 317 | 28 867 | |
| 27 069 | 31 819 | ||
| Total assets | 905 516 | 850 671 | |
| EQUITY AND LIABILITIES | |||
| Capital and reserves | |||
| Ordinary shareholders' equity | 838 136 | 780 487 | |
| Minority interest | 56 432 | 56 465 | |
| 894 568 | 836 952 | ||
| Non-current liabilities | |||
| Tax | 10 510 | 12 315 | |
| 10 510 | 12 315 | ||
| Current liabilities | |||
| Accounts payable and accruals | 438 | 1 404 | |
| 438 | 1 404 | ||
| Total liabilities | 10 948 | 13 719 | |
| Total equity and liabilities | 905 516 | 850 671 | |
| SUMMARISED GROUP STATEMENTS OF CASH FLOW | |||
| Year ended 30 June | Year ended 30 June | ||
| 2010 | 2009 | ||
| R'000 | Audited | Audited | |
| Cash flows from operating activities | (3 037) | (6 436) | |
| Cash flows from investing activities | 101 216 | 108 997 | |
| Cash flows from financing activities | (100 729) | (115 928) | |
| Net cash flows | (2 550) | (13 367) | |
| HEADLINE EARNINGS PER SHARE | |||
| Year ended 30 June | Year ended 30 June | ||
| 2010 | 2009 | ||
| R'000 | Audited | Audited | |
| Headline earnings per share (cents) | 24,5 | 30,1 | |
| Weighted average number of shares (million) | 361,8 | 361,6 | |
| Reconciliation of headline earnings (R'000) | |||
| Earnings attributable to ordinary shareholders | 77 268 | 91 948 | |
| Adjusted for: | |||
| Realised investment profits | (2 172) | (2 844) | |
| Impairment of casino licence | 12 659 | 11 818 | |
| Impairment of available-for-sale investment | 7 368 | – | |
| Provision for pension fund investment | – | 9 000 | |
| Tax on above items | (1 788) | (41) | |
| Minority interest in the above items | (4 646) | (957) | |
| Headline earnings | 88 689 | 108 924 | |
| NET ASSET VALUE | |||
| 30 June | 30 June | ||
| 2010 | 2009 | ||
| R'000 | Audited | Audited | |
| Afrisun Leisure | 1 161 081 | 1 152 780 | |
| Other net liabilities | (5 732) | (4 555) | |
| Cash | 24 721 | 28 010 | |
| Borrowings | – | – | |
| Net asset value | 1 180 070 | 1 176 235 | |
| Issued shares net of treasury shares (million) | 361,9 | 361,6 | |
| Net asset value per share (cents) | 326 | 325 | |
| Note | |||
| All the investments held by Afrisun Leisure have been valued using the discounted cash flow (DCF) valuation method applying a discount rate of 12.11% (30 June 2009:12.45%) at 30 June 2010, to the directors' current estimated future cash flows. A minority discount of 15% has been applied to the valuation of the gaming company investments. | |||
| Actual number of shares | 361 949 178 | 361 605 469 | |
| GROUP STATEMENTS OF CHANGES IN EQUITY | |||
| Ordinary | |||
| shareholders' | Minority | ||
| R'000 | equity | interest | Total |
| Audited | |||
| For the year ended 30 June 2010 | |||
| Balance at 30 June 2008 | 778 617 | 58 747 | 837 364 |
| Profit for the year | 91 948 | 6 758 | 98 706 |
| Other comprehensive income for the year | (17 757) | (3 427) | (21 184) |
| Dividends paid | (72 321) | (5 613) | (77 934) |
| Balance at 30 June 2009 | 780 487 | 56 456 | 836 952 |
| Profit for the year | 77 268 | 3 267 | 80 535 |
| Other comprehensive income for the year | 73 244 | 4 545 | 77 789 |
| Sale of treasury shares | 1 196 | – | 1 196 |
| Dividends paid | (94 059) | (7 845) | (101 904) |
| Balance at 30 June 2010 | 838 136 | 56 432 | 894 568 |
|---|
ACCOUNTING POLICIES
The condensed consolidated financial information for the six months ended 31 December 2009 has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS) and the presentation and disclosure requirements of IAS 34 – Interim Financial Reporting. The accounting policies applied, other than those described below, are consistent with those adopted in the financial statements for the year ended 30 June 2009.
The group has adopted the following new standard and amendment which are mandatory for the first time for the financial year beginning 1 July 2009:
• IAS 1 (Revised) – Presentation of Financial Statements, which requires changes in equity not relating to equity owners to be disclosed in a separate statement. As permitted by the standard, the group has elected to present the required information in a single statement of comprehensive income.
• IFRS 8 – Operating Segments, which requires an entity to present segment information on the same basis as that used for internal reporting purposes, which had no impact on the interim statements.
REVIEW OF RESULTS
Revenue of R34,4 million, comprising of dividends received, was R8,4 million below the previous period due to lower dividends received from SunWest and no dividends declared by Emfuleni.
The net investment loss of R1 million (2008: R9,4 million) relates to contributions made to the Biotech Venture Fund. The comparative period included a R9 million increase of the pension fund provision relating to Life Esidimeni (Pty) Ltd.
The share of profits of associates includes the group’s share of income from Afrisun Gauteng, Zonwabise as well as the management companies. The share of profits of associates has reduced mainly due to the difficult trading conditions experienced at Carnival City (Afrisun Gauteng).
Interest income has reduced due to surplus cash having been utilised to settle the group’s obligation to Life Esidimeni in respect of the Lifecare Group Holdings Pension Fund. The group also has no interest expense due to the settlement of all the remaining preference shares during the previous year. Headline earnings per share of 11,9 cents declined by 26% from the prior period due to the lower dividends received in the current period.
The board has declared an interim dividend of 12 cents per share.
NON-CURRENT ASSETS
During the period, the group’s effective interest in Afrisun Leisure’s underlying investments remained unchanged. The value of Afrisun Leisure has decreased by 12.4% from R1 153 million at 30 June 2009 to R1 010 million principally due to difficult trading conditions experienced in the underlying casino investments.
DIRECTORATE
Younaid Waja was appointed an independent non-executive director on 1 February 2010.
OUTLOOK
Trading at the group’s major investments is expected to stabilise and some growth in revenue is expected for the remainder of the year.
DIVIDEND
Notice is hereby given that an interim dividend of 12 cents per share for the six months ended 31 December 2009 (2008: 4 cents) has been declared, payable to shareholders recorded in the register of the company at the close of business on the record date appearing below. The salient dates applicable to the interim dividend are as follows:
| 2010 | |
| Last day to trade cum interim dividend | Thursday, 16 September |
| First day to trade ex interim dividend | Friday, 17 September |
| Record date | Thursday, 23 September |
| Payment date | Monday, 27 September |
No share certificates may be dematerialised or rematerialised between Friday, 17 September and Friday, 23 September 2010, both days inclusive. Dividend cheques will be posted and electronic payments made, where applicable, to certificated shareholders on the payment date. Dematerialised shareholders will have their accounts with their Central Securities Depository Participant or broker credited on the payment date.
For and on behalf of the board:
| MV Moosa | RP Becker | |
| Chairman | Financial director |
30 August 2010
Registered office
27 Fredman Drive, Sandown, Sandton, 2031
Transfer secretaries
Computershare Investor Services (Pty) Ltd, 70 Marshall Street, Johannesburg, 2001
Sponsor
Investec Bank Limited
Directors
MV Moosa (Chairman), RP Becker (Financial director), DC Coutts-Trotter, MJ Leeming, MMT Ramano, Y Waja
Secretaries
Sun International Corporate Services (Pty) Limited