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WIL: WILDERNESS HOLDINGS LIMITED - Unaudited announcement of condensed consolidated financial results for the six months ended 31 August 2017
26 Oct 2017

WIL: WILDERNESS HOLDINGS LIMITED - Unaudited announcement of condensed consolidated financial results for the six months ended 31 August 2017
Unaudited announcement of condensed consolidated financial results for the six months ended 31 August 2017

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 interim announcement  of condensed consolidated financial results

For the six months ended 31 August 2017 



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 10% to P705 million

- EBITDA up 2% to P179 million

- Adjusted EBITDA* up 8%

- Total revenue per available room** down 5%

- Profit after tax up 25% to P117 million

- Cash generated by operations up 13% to P218 million

- HEPS up 26% to 43 thebe per share

- Occupancy rate down to 65% from 66%



* Adjusted EBITDA excludes the effects of the Governors' acquisition 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

                                  Six                  Six       Audited

                               months               months          year

                                ended                ended         ended

                               31 Aug               31 Aug        28 Feb

P'000                            2017    Change       2016          2017  

Revenue                       704 949       10%    641 912     1 107 467

Cost of sales                (209 826)            (184 406)     (353 447) 

Gross profit                  495 123              457 506       754 020

Other gains                       581                2 000        16 182

Operating expenses           (309 161)      11%   (277 278)     (550 018) 

Foreign exchange losses        (7 754)              (7 400)      (11 317)

Operating profit for year

before items listed below

(EBITDA)                      178 789        2%    174 828       208 867

Impairment loss                (4 231)              (3 133)       (3 165) 

Depreciation and 

amortisation                  (41 273)             (36 121)      (76 927) 

Operating profit              133 285       (2%)   135 574       128 775

Net finance costs              (9 473)              (3 297)       (9 195)

Unrealised foreign exchange

gains/(losses) on loans         9 319               (5 416)      (20 806)

Share of associate company

profit                          2 035                1 926         2 600

Profit before taxation        135 166        5%    128 787       101 374

Taxation                      (18 395)             (35 205)      (38 623) 

Profit for the period         116 771       25%     93 582        62 751

Other comprehensive

(loss)/income                  (2 211)               4 764        17 059

Items that may be 

subsequently reclassified 

to profit or loss:

Exchange differences on 

translating foreign

operations                     (2 211)               4 764        17 059

Total comprehensive income

for the period                114 560               98 346        79 810

Profit attributable to:

Owners of the Company          99 945               79 370        55 497

Non-controlling interest       16 826               14 212         7 254

                              116 771               93 582        62 751

Total comprehensive 

income attributable to:

Owners of the Company          97 311               85 422        73 844

Non-controlling interest       17 249               12 924         5 966

                              114 560               98 346        79 810

Earnings per share (thebe)

Basic                           42.17       23%      34.23         23.74

Diluted                         41.92       28%      32.71         23.59



Condensed consolidated statement of financial position



                               Unaudited        Unaudited        Audited

                                   as at            as at          as at

                                  31 Aug           31 Aug         28 Feb

P'000                               2017             2016           2017

Assets

Non-current assets               887 950          714 620        795 849

Property, plant and

equipment                        643 635          540 855        571 121

Goodwill                          69 085           62 937         69 152

Intangible assets                116 107           71 019        119 694

Investments and loans in

associates                        14 735           12 026         12 700

Loans receivable                  13 622                -              - 

Deferred tax assets               30 766           27 783         23 182

Current assets                   732 720          454 500        428 919

Inventories                       35 341           32 799         31 952

Receivables and prepayments      181 975          161 602        140 968

Current tax receivable            25 885           11 902         23 818

Bank balances and cash           489 519          248 197        232 181

Total assets                   1 620 670        1 169 120      1 224 768

Equity and liabilities

Equity attributable to the

owners of the Company            566 763          532 329        507 985

Stated capital                   167 291          156 086        167 291

Foreign currency 

translation reserve               21 443           11 780         24 080

Common control reserve           (73 324)         (73 324)       (73 324) 

Other non-distributable

reserves                          19 318           (9 983)        19 318

Share-based payment reserve           34           23 461           (518) 

Retained income                  432 001          424 309        371 138

Non-controlling interest          44 536          (13 402)        28 586

Total equity                     611 299          518 927        536 571

Non-current liabilities          444 548          100 461        226 759

Borrowings                       379 402           49 741        160 617

Deferred tax liabilities          65 146           50 720         66 142

Current liabilities              564 823          549 732        461 438

Trade and other payables         497 119          461 674        385 923

Borrowings - current portion       7 078           12 254          7 210

Current tax liabilities            8 471           13 692          6 603

Bank overdrafts                   52 155           62 112         61 702

Total liabilities              1 009 371          650 193        688 197

Total equity and 

liabilities                    1 620 670        1 169 120      1 224 768

Net asset value per share

(thebe)                              239              230            217

Net tangible asset value per         161              172            137

share (thebe)



Condensed consolidated statement of cash flows



                               Unaudited        Unaudited        Audited

                              six months       six months           year

                                   ended            ended          ended

                                  31 Aug           31 Aug         28 Feb

P'000                               2017             2016           2017

Cash flow from operating 

activities

Cash generated from

operations                       253 776          218 540        210 902

Net finance costs                 (9 473)          (3 297)        (9 195) 

Taxation paid                    (26 532)         (23 280)       (45 839)

Net cash inflow from

operating activities             217 771          191 963        155 868

Cash flow from investing 

activities

Acquisition of 

subsidiary companies                   -          (71 705)       (71 705)

Additions to property,

plant and equipment and

intangibles                     (120 794)         (71 308)      (142 392)

Proceeds on disposal 

of property, plant and

equipment                          3 318            1 469          4 510

Increases in long-term

loans receivable                 (13 622)               -              - 

Net cash outflow from

investing activities            (131 098)        (141 544)      (209 587)

Cash flow from 

financing activities

Non-controlling interests'

share of dividends                (1 299)          (3 269)        (3 269)

Share-based payment -

employee tax settlement                -                -        (14 908) 

Dividends paid                   (39 082)         (34 782)       (34 782)

Repayment of long-term

liabilities                       (2 709)         (28 447)       (58 037)

Increases in long-term

liabilities                      227 134            2 592        138 857

Net cash inflow/(outflow)

from financing activities        184 044          (63 906)        27 861

Net increase/(decrease) in

cash and cash equivalents        270 717          (13 487)       (25 858)

Unrealised exchange

(losses) on foreign cash

balances                          (3 832)          (2 393)        (5 628)

Cash and cash equivalents

at the beginning of year         170 479          201 965        201 965

Cash and cash equivalents

at end of year                   437 364          186 085        170 479





Condensed consolidated statement of changes in equity



                               Unaudited        Unaudited        Audited

                              six months       six months           year

                                   ended            ended          ended

                                  31 Aug           31 Aug         28 Feb

P'000                               2017             2016           2017

Opening balance                  536 571          469 528        469 528

Minority portion of 

dividend paid                     (1 299)          (3 269)        (3 269) 

Dividends paid                   (39 082)         (34 782)       (34 782)

Total comprehensive income

for the period                   114 560           98 346         79 810

Share-based payment reserve          552              410        (12 364) 

Other                                 (3)         (11 306)        37 648

Closing balance                  611 299          518 927        536 571





Additional disclosure



                               Unaudited        Unaudited        Audited

                              six months       six months           year

                                   ended            ended          ended

                                  31 Aug           31 Aug         28 Feb

P'000                               2017             2016           2017

Reconciliation between 

profit attributable to 

owners of the Company 

and headline earnings

Profit attributable to

owners of the Company             99 945           79 370         55 497

Adjustments

IAS 16 - Gains on disposal 

and impairment of property,

plant and equipment                 (543)          (1 977)        (6 128)

IAS 27 - Gains on disposal

of subsidiaries                        -                -        (10 134)

IAS 36 - Impairment of

assets                             4 209            3 086          3 204

Tax effects of adjustments          (745)            (130)         2 841

Minority interest                    (37)            (286)          (299) 

Headline earnings                102 829           80 063         44 981

Number of shares issued

(thousands)

Issued                           237 362          231 882        236 859

Weighted average                 237 017          231 882        233 781

Diluted weighted average         238 444          242 642        235 246

Basic                              43.38            34.53          19.24

Diluted                            43.13            33.00          19.12

Commitments

Capital

Authorised by directors and

contracted for                    63 478           33 483        110 006

Not yet contracted for but

authorised by directors           56 832           79 234        129 381

                                 120 310          112 717        239 387

It is intended to finance 

capital expenditure from 

working capital generated and 

existing borrowing facilities.

Operating leases

Minimum lease payments due

- within one year                 16 122           23 415         16 929

- in second to fifth year

inclusive                         51 515           53 667         39 557

- after fifth year                49 526           84 387         66 229

                                 117 163          161 469        122 715

Borrowings

Non-current

Interest bearing                 371 274           38 440        157 661

Non-interest bearing              15 206           23 555         10 166

Less: Current portion of          (7 078)         (12 254)        (7 210)

long-term liabilities

                                 379 402           49 741        160 617



Segmental information

                               Unaudited        Unaudited        Audited

                              six months       six months           year

                                   ended            ended          ended

                                  31 Aug           31 Aug         28 Feb

P'000                               2017             2016           2017

Segmental profit

Botswana                          91 608           93 669        122 677

Kenya                              5 083           13 360          9 523

Namibia                           22 909           14 492         16 833

Rwanda                             7 669            3 802          6 914

South Africa                      35 399           45 831         39 173

Zambezi                           24 546            8 509          8 959

Intergroup                        (1 252)             565            (77) 

Group                            185 962          180 228        204 002

Depreciation and amortisation

Botswana                         (18 543)         (17 674)       (37 942) 

Kenya                             (1 792)            (593)        (2 737) 

Namibia                           (6 981)          (5 371)       (11 495) 

Rwanda                              (141)            (165)          (397) 

South Africa                      (4 360)          (3 537)        (6 408) 

Zambezi                           (9 456)          (8 781)       (17 948) 

Group                            (41 273)         (36 121)       (76 927)

Transactions unallocated to

a segment

Other gains                          581            2 000         16 182

Foreign exchange

(losses)/gains                    (7 754)          (7 400)       (11 317) 

Impairment losses                 (4 231)          (3 133)        (3 165) 

Interest paid                    (11 052)          (3 739)       (11 096) 

Interest received                  1 579              442          1 901

Unrealised forex loss -

loans                              9 319           (5 416)       (20 806) 

Associate earnings                 2 035            1 926          2 600

Profit before taxation           135 166          128 787        101 374

Taxation                         (18 395)         (35 205)       (38 623) 

Profit after tax                 116 771           93 582         62 751

Segmental assets

Botswana                         850 492          627 294        705 077

Kenya                             59 537           59 862         48 314

Namibia                          173 726          149 775        143 138

Rwanda                            76 262           31 059         70 626

South Africa                     415 478          241 447        199 714

Zambezi                          150 307          152 124        122 019

Central financing activities

and eliminations                (105 132)         (92 441)       (64 120)

Group                          1 620 670        1 169 120      1 224 768



                               Unaudited        Unaudited        Audited

                              six months       six months           year

                                   ended            ended          ended

                                  31 Aug           31 Aug         28 Feb

P'000                               2017             2016           2017

Revenue

Revenues by type of 

service

Travel experience                621 484          573 948        990 273

Service fees                      67 192           53 006         87 645

Other revenue                     16 273           14 958         29 549

                                 704 949          641 912      1 107 467

Revenues by geographical 

regions

Botswana                         293 969          284 803        477 373

Kenya                             49 355           31 430         73 021

Namibia                          107 477           91 342        176 559

Rwanda                            20 733            8 352         24 192

South Africa                     459 286          446 503        731 983

Zambezi                          114 177           96 752        162 432

Intergroup                      (340 048)        (317 270)      (538 093)

                                 704 949          641 912      1 107 467

                                       %                %             %

Revenue by source market (%)

Africa and Middle East                32               31            33

Americas                              43               44            40

Australasia                            2                3             2

Europe and Asia                       23               22            25

                                     100              100           100



Commentary

The Group produced a sound performance demonstrating its resilience to 

the continued appreciation of the home currencies with 10% and 2% growth 

in revenue and EBITDA, respectively. Organic growth was pleasing, 

recording an 8% increase in EBITDA, this despite having the Group's 

flagship camp earning less revenue while the rebuilding of the new camp 

is in progress. Total available bednights (capacity) increased by 14% as 

the Governors' businesses were included for the full period in

comparison to just two months in the prior period. This inclusion of

Governors' resulted in a marginal decline of one percentage point, to

65%, in occupancy rate. The air business in Namibia has made a promising 

recovery from a loss of P2 million to a profit of P1.5 million. In late 

June, Bisate Lodge opened in Rwanda and is proving to be highly successful 

with occupancy rates reaching 90% in the high season.

The Group recorded a 26% increase in headline earnings per share

("HEPS").



Governors' acquisition

The comparative results for Governors' include only high season, 

following its consolidation from 1 July 2016, while the current reporting 

also includes low season.  This equates to a contribution of P64 million 

(2016: P39 million) to revenue and P12 million (2016:P18 million) to 

EBITDA. In the volatile election environment in Kenya the downturn in 

performance was expected and with the continued electoral uncertainty 

there could be further impact. The Group is satisfied with its 

acquisition of Governors' and the mutual co-operation between the two 

businesses, and is confident that additional synergies between the groups

can be unlocked.



Financial review

Revenue increased by 10% to P705 million following the strong growth in 

bednights sold to 101 166 (2016: 89 297).  Available bednights have 

increased by 14% to 155 226 (2016: 136 038).  The sales mix has changed 

materially as the Tour Series and Governors' categories combined now 

account for 35% (2016: 25%) of total bednights sold.



EBITDA margin declined from 27% to 25%, largely due to the inclusion of 

the low season of the Governors' businesses. Excluding Governors', EBITDA 

margin would have been unchanged at 26%. The impact of the exchange rate 

on the revenue line was negligible but on bottom line was far more

significant as the stronger Pula and Rand pushed real selling rates down, 

impacting negatively on performance in South Africa and Botswana in 

particular. The Rand gained 11% against the USD, while the Pula

appreciated by 5%. Operating costs remained well contained with an 

increase of 5% after adjusting for Governors'.



Other gains of P0.5 million include proceeds from insurance claims 

amounting to P1.1 million offset by losses on disposal of assets 

amounting to P0.6 million. Impairment losses amounted to P4.2 million 

and relate to the decommissioning of the old camp assets.



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 187% higher at P9.5 million (2016: P3.3 million), 

being a consequence of the inclusion of Governors' and the increased

debt to finance capital investment and acquisitions.



The Group's effective tax rate decreased from 27% in the prior year to

14%, largely due to the recognition of a P10 million deferred tax asset 

in the Governors' Group following its strong turnaround in performance.



Capital expenditure amounted to P121 million for the period, continuing 

with the Group's philosophy to ensure our properties and assets remain

in pristine condition. However, capital expenditure is expected to taper 

off at the end of the financial year following the completion of Bisate 

Lodge and Mombo Camp. Approximately P23 million has been spent on new 

camps and P71 million on rebuilding existing camps. The balance is 

largely defensive in nature.



Cash balances, less overdrafts, have increased by 135% to P437 million 

as a result of strong cash generated from operations amounting to 

P218 million and a net increase in borrowings amounting to P224 million, 

as these were drawn down to finance capital expenditure previously 

funded out of own cash resources.



Geographical operations (segmental performance)

Namibia, Rwanda and Zambezi regions all recorded strong growth as, 

combined, they contributed 30% (2016: 15%) of segmental profit and 

reflect combined growth of 104% from P27 million to P55 million. 

Botswana's performance was down 2%. South Africa declined 23% as a 

direct result of the strength of the Rand. Kenya recorded a decline of

62% following the inclusion of low season for the period.



Loan advanced

The Group continues to look for growth opportunities and to promote 

sustainable tourism land use.  Accordingly, the Group is participating 

in the development of a camp in a new concession area and has advanced 

funds on loan account to a local investor.  The funds will be utilised, 

under supervision by the Group, to develop a world-class camp which it 

will support thereafter by providing marketing and sales services. This 

transaction allows the Group to take a more direct interest in the camp 

at an opportune time in the future, should this be considered prudent 

for the Group and the local investor.



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.



Leases

The Lease Renewal Process ("LRP") for the concessions upon which Mombo, 

Little Mombo and Xigera camps are located has been completed. The Group 

expects the signed leases to be received imminently and for all intents 

and purposes deems the process complete. The Group has also commenced 

the LRP for the concession upon which Vumbura Plains and Little Vumbura 

are situated.  All the relevant requirements in terms of the LRP have 

been complied with and submitted to the Botswana Tourism Organisation; 

the Group is confident of a positive conclusion early next year.



Shares in issue

During the period the Company issued 503 555 ordinary shares at no par 

value (representing approximately 0.21% of the enlarged number of shares 

in issue) for no consideration to settle the share scheme obligations.

At 31 August 2017 the number of ordinary shares in issue was 237 362 408 

(2016: 231 882 451) and the weighted average number of shares was 

237 016 867 (2016: 231 882 451).



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.



Basis of preparation

The condensed financial information has been prepared in accordance with 

and containing the information required by IAS 34 Interim Financial 

Reportin,the SAICA Finacial reporting Guides as issued by the

Accounting Practices Commitee and Financial Prononcements as issued

by Financial Reporting Standards council and complies with the

disclousure requirements of the Botswana Stock Exchange and

the JSE.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 2017. The adoption of amendments to 

these standards has not had any material impact on previously reported 

figures.



The IFRIC issued IFRIC 22 Foreign Currency Transactions and Advance 

Consideration in December 2016 clarifying the application of IAS 21 to 

advance consideration transactions. The IFRIC is applicable for all 

financial periods commencing on or after 1 January 2018, however, the 

Group has elected to early adopt the interpretation with effect from this 

current period. In addition, the Group has elected to apply this IFRIC 

on a prospective basis and as such no comparative information is 

restated as a result of the new requirements.



Outlook

Tourism activity in southern Africa is at high levels. Our forward 

occupancy for the rest of the year is encouraging. The Group's strategic 

intent is to invest in African tourism and we have tailored our business 

model to have the most impact in this environment. However, this model

is vulnerable to events that impact on travellers. The political and 

economic uncertainty in Kenya and Zimbabwe and the volatile currencies 

are a concern.



By order of the Board



26 October 2017



Keith Vincent

Chief Executive Officer



Ami Azoulay

Chief Financial Officer (Preparer)



Wilderness Holdings Limited: 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

JSE Sponsor: Arbor Capital Sponsors Proprietary Limited

Transfer secretaries: Corpserve Botswana - Computershare

Directors:

BBP Tafa# (Chairman), M Tollman* (Deputy Chairman), KNW Vincent (CEO), 

A Azoulay (CFO), DA de la Harpe, JM Hunt*, RJ Marnitz*, MW McCulloch#, 

GB Tollman#, MPK ter Haar*, C Vinsonneau#, J Zeitz*

#non-executive director *independent non-executive director

Group Company Secretary: L Alexander



www.wilderness-holdings.com
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