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AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
AFRICANSUN: Analyst briefing for year ended 30 Sept 09
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AFRICANSUN: Analyst briefing for year ended 30 Sept 09

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Highlights …

Highlights

Revenue: $35.2 m
Cost of sales: ($12.1 m)
Gross profit: $23.1 m
EBITDA: ($3.1 m)
Occupancy: 31%
ADR: $90
RevPar: $28
Dep. amortisation & impairment: $1.8 m
Net financing costs: $380,000

Published in: Business, Travel
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  • 1. Analyst Briefing: January 2010 “ OPEN FOR BUSINESS IN AFRICA”
  • 2. <ul><li>Overview: Where we are coming from? </li></ul><ul><li>Zimbabwe </li></ul><ul><ul><li>The year 2009 saw businesses relegated to ‘start-up’ status without corresponding capitalisation to function in the new economy. </li></ul></ul><ul><ul><li>High operating costs, of note: </li></ul></ul><ul><ul><ul><li>Utility costs. </li></ul></ul></ul><ul><ul><ul><li>Payroll </li></ul></ul></ul><ul><ul><li>Cautious approach to Global Political Agreement. </li></ul></ul><ul><ul><li>Occupancies plummeted by 10 percentage points (24% in real terms) from 41% in September 2008 to 31% in September 2009 namely due to: </li></ul></ul><ul><ul><ul><li>Cholera </li></ul></ul></ul><ul><ul><ul><li>Reduced Arrivals </li></ul></ul></ul><ul><ul><ul><li>Liquidity Crunch </li></ul></ul></ul><ul><ul><ul><li>H1N1 </li></ul></ul></ul>
  • 3. Overview: Where we are coming from? <ul><li>Global Financial Crisis </li></ul><ul><ul><li>Depressed occupancies in Southern Africa due to slow down of long haul travel – decreased by approximately 30%. </li></ul></ul><ul><ul><li>Strategic goals were affected in several ways: </li></ul></ul><ul><ul><ul><li>Tighter global funding conditions expected to have noticeable effects on middle income countries like South Africa and the frontier markets of Ghana, Nigeria, Kenya and Tanzania (IMF Policy News). </li></ul></ul></ul><ul><ul><ul><li>Low liquidity in international markets increased cost of capital. </li></ul></ul></ul><ul><ul><ul><li>General slowdown in development from investor community, e.g. Private Equity Funds. </li></ul></ul></ul><ul><ul><ul><li>Pressure on room rates and occupancies. </li></ul></ul></ul>
  • 4. Overview: African Sun <ul><li>Footprint will continue to grow based on the rate of expansion of the past 3 years. </li></ul><ul><li>Group has created advocates for its brands across the continent. </li></ul><ul><li>Group to build upon this base as global economy recovers. </li></ul><ul><li>Capital raising initiatives implemented with phase one (Rights Offer) being completed </li></ul><ul><ul><li>Refurbishment of hotels (Zimbabwe) </li></ul></ul><ul><ul><li>Restructuring of short term borrowings </li></ul></ul><ul><li>Stronger balance sheet in USD terms. This will enable the Group to fulfil its growth thrust for both arrivals and addition of new rooms. </li></ul><ul><li>Performance in Zimbabwe improving. </li></ul>
  • 5. Progress on Strategic Goals: Capacity Growth - Destination 2012 (8500 rooms) <ul><li>The focus was on consolidation of : </li></ul><ul><ul><li>existing rooms. </li></ul></ul><ul><ul><li>Zimbabwe rooms </li></ul></ul><ul><ul><li>2008 Openings </li></ul></ul><ul><li>New rooms </li></ul><ul><ul><li>Zambia (Livingstone Area): Royal Chundu River Lodge, 5 Star upmarket lodge. </li></ul></ul><ul><li>New Openings 2010 </li></ul><ul><ul><li>More than 600 rooms coming on board in South Africa, Nigeria, Ghana, Botswana and Kenya. </li></ul></ul><ul><li>Projected rooms contributions by 2012 will be: </li></ul><ul><ul><li>West Africa 35% </li></ul></ul><ul><ul><li>East Africa 7% </li></ul></ul><ul><ul><li>Southern Africa (excluding Zimbabwe) 33% </li></ul></ul><ul><ul><li>Zimbabwe 25% </li></ul></ul>
  • 6. Progress on Strategic Goals: Recently opened Royal Chundu River Lodge, Zambia
  • 7. Progress on Strategic Goals : Human Resources and Hospitality Training <ul><li>Focus remains on key skills retention and training. </li></ul><ul><li>Group has been able to attract international skills, namely Hotel General Managers and Chefs. </li></ul><ul><li>Target of investing at least 3% of turnover into Training and Development programmes. </li></ul><ul><li>10% of staff are undergoing structured training and development programmes. </li></ul><ul><li>Work is underway to establish HTA in West Africa. </li></ul>
  • 8. Progress on Strategic Goals: Brand Leadership <ul><li>It has been 12 months since ASL opened first Amber in Nigeria. </li></ul><ul><li>Brand has been received positively by developers leading to the development of a select service hotel brand under the name Amber Express. </li></ul><ul><li>Amber Express becomes the value brand that ASL will drive into the continent as the group extends its footprint. </li></ul><ul><li>ASL will be launching its five star city brand, Mulberry, into Nigeria by mid 2010. </li></ul><ul><li>ASL’s relationship with Intercontinental Hotels Group (IHG) is growing with the imminent signing of Holiday Inn Gaborone consolidating our position as the largest operator of IHG brands in Africa. </li></ul><ul><li>Developments are underway to establish our long-stay brand, My Place, in West Africa </li></ul>
  • 9. FINANCIAL REVIEW YEAR ENDED 30 SEPTEMBER 2009 Nike Lake Resort, Nigeria
  • 10. Financial Highlights: Group Income Statement   Revenue $35.2million COS ($12.1million) GP $23.1million EBITDA ($3.1million) Occupancy 31% ADR $90 RevPar $28 Depreciation amortisation and impairment $1.8million Net financing costs $380,000
  • 11. Financial Highlights: RevPar Performance <ul><li>The year 2009 was a difficult year with the Global Financial Crisis affecting occupancies, RevPar and ADR resulting in double digit declines in some areas. </li></ul><ul><ul><li>Ghana remained resilient </li></ul></ul><ul><ul><li>Zimbabwe starting to show signs of improvement </li></ul></ul><ul><ul><li>South Africa affected but recovering </li></ul></ul>
  • 12. Financial Highlights: RevPar Performance **First year of operation         2009/ Feb 2009 Q1 Q1 2010/2009 Country Matrix 2009 Feb 2009 % change 2010 % change   Occupancy % 32 23 +39 43 +34 Zimbabwe ADR $ 69 70 -1 71 +3   RevPar $ 22 16 +38 30 +37         2009/2008 Q1 Q1 2010/2009 Country Matrix 2009 2008 % change 2010 % change   Occupancy % 38 52 -27 42 +11 South Africa ADR $ 106 104 +2 98 -8   RevPar $ 40 54 -25 41 +3   Occupancy % 70 70    - 80    +14 Ghana ADR $ 187 169    +11 180    -4   RevPar $ 131 118    +11 144    +10   Occupancy % 15 ** ** 32    +113 Nigeria** ADR $ 116 ** **   138   +19   RevPar $ 18 ** **   44   +132
  • 13. Financial highlights : Revenue contribution and business model Rooms distribution
  • 14. Cost Ratios <ul><li>Operating costs amounted to 82% of revenues as a result of: </li></ul><ul><ul><li>Depressed revenues </li></ul></ul><ul><ul><li>High payroll costs </li></ul></ul><ul><ul><li>High food and beverage costs </li></ul></ul>As a % of Revenue....         2009   Target COS   34   30 Payroll   32   19 Rent and R&M 12   7 Other   38   28 Total   82   54
  • 15. Zimbabwe on the recovery trend <ul><li>The Occupancy story… </li></ul>The Lakes Hotel, Benoni, Johannesburg, South Africa The operations achieved 43% occupancy for the first quarter ended 31 December as leisure business starts to gain momentum with all the resorts achieving 100% occupancy over the just ended festive.
  • 16. Zimbabwe on the recovery trend <ul><li>ADR on the rise… </li></ul>The Lakes Hotel, Benoni, Johannesburg, South Africa
  • 17. Zimbabwe on the recovery trend <ul><li>RevPar increasing… </li></ul>The Lakes Hotel, Benoni, Johannesburg, South Africa
  • 18. Zimbabwe: 2009 City Hotels carry the day…. <ul><li>City Hotels business driven by NGOs and Conferencing (low yields). </li></ul><ul><li>Resorts were slow to recover from the downturn due to the long lead times and country risk issues. </li></ul><ul><li>With the return of other segments such as Corporate and Leisure (domestic and foreign) yields are expected to improve. </li></ul>City Resorts Total Revenue $ (‘000) 13 564 11 134 24 698 EBITDA $ (‘000) 2 459 (992) 1 467 Hotel Net Profit $ (‘000) 1 826 (1 538) 288 Occupancy 48% 21% 32% ADR $ 58 86 69 RevPar $ 28 17 22
  • 19. Zimbabwe: Q1 Resorts on a come back… <ul><li>Occupancies into Resort hotels expected to increase as international arrivals improve in 2010 with imminent FIFA 2010 World Cup and improved image and visibility of the region as a whole. </li></ul><ul><li>In-system bookings looking stronger for 2010 </li></ul><ul><ul><li>The Victoria Falls area achieved an average of 22% for the quarter as compared to 21% for F09. </li></ul></ul><ul><ul><li>The Victoria Falls hotel on top with 46% in-system bookings as compared to 28% for the same period last year. </li></ul></ul>City Resorts Total Revenue $ (‘000) 4 998 3 907 8 905 EBITDA $ (‘000) 922 (17) 904 Net Profit $ (‘000) 817 (263) 554 Occupancy 62% 29% 43% ADR $ 61 93 74 RevPar $ 37 27 32
  • 20. Financial Position <ul><li>$0.94million in cash and $4.6million in undrawn facilities </li></ul><ul><li>Asset light balance sheet </li></ul>Strong cash position compared to year ended 30 September with the just ended Rights Offer and improving operations. Cashflow     30 Sept 09       $ Cash used in operations   (4,988,015) Cash used in investing   (3,186,811) Financing       Disposal of investments   483,774 Increase in borrowings - long term 741,543     - short term 5,617,051 Decrease in cash   (1,332,458) Cash at beginning of period 2,270,040 Cash at end of period   937,582
  • 21. Financial Position : Funding <ul><li>Stronger balance sheet moving forward. </li></ul><ul><li>Pleased to announce a successful Rights Offer. </li></ul><ul><li>US$3million short term loans retired by 31 Dec 2009. </li></ul><ul><li>Improving working capital in line with improving Zimbabwe operations. </li></ul><ul><li>Cost of borrowing down to 29% from 38%. </li></ul><ul><li>Cost of borrowing to be reduced further as long term loans negotiated. </li></ul><ul><li>$15million equity secured credit and $10million from private placement being pursued as we target cheaper finance subject to changing market conditions. </li></ul><ul><li>Dilution from additional equity will be mitigated because the funds will be used for expansion. </li></ul><ul><li>Additional capital raised to be applied to regional expansion </li></ul>Balance sheet 30 Sept 09 Pro forma 31 Dec 09   US$ US$ Assets     Long term assets 37,221,062 37,221,062 Current assets 9,467,009 16,484,009       Total assets 46,688,071 53,705,071       Equity and liabilities     Shareholders equity 21,065,668 31,082,668 Non-current liabilities 6,416,924 6,416,924 Current liabilities 19,205,479 16,205,479       Total equity and liabilities 46,688,071 53,705,071
  • 22. African Sun Focus <ul><li>Cash flow </li></ul><ul><li>Reduction in operating costs targeting: </li></ul><ul><ul><li>Employment costs </li></ul></ul><ul><ul><li>Procurement (food and beverage) - to reduce by 10% </li></ul></ul><ul><li>Growth targeting our business model </li></ul>
  • 23. RevPar Outlook The Lakes Hotel, Benoni, Johannesburg, South Africa         Growth Country Matrix 2009 2010 % change Zimbabwe RevPar $ 22 39 +38   South Africa RevPar $ 40 54 +27   Ghana RevPar $ 116   137   +18   Nigeria RevPar $ 18   53   +194   Group RevPar $ 28 45 +61
  • 24. Dividend <ul><li>Dividend declaration </li></ul><ul><li>In light of the Group’s capital requirements and depressed performance, the Board has resolved not to declare a dividend for the year ended 30 September 2009. </li></ul>The Lakes Hotel, Benoni, Johannesburg, South Africa

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