African Sun FY2013 analyst presentation

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African Sun FY2013 analyst presentation

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African Sun FY2013 analyst presentation

  1. 1. AFRICAN SUN LIMITED F13 Results Presentation !
  2. 2. AGENDA! 1. Strategy and Operations Review Group CEO – Dr Shingi Munyeza! 2. Financial Review Group Finance Director – Nigel Mangwiro ! 3. Outlook Group CEO – Dr Shingi Munyeza! ! ! !
  3. 3. STRATEGIC REVIEW !
  4. 4. SUSTAINBILITY OF OUR STRATEGIC THRUST: THE UPDATE! Strategic goal Current status Comment/update Achieve a •  10.5% pretax return on excluding equity of 20% exceptional items from 4% last year Improvement to be supported by: •  Debt reduction to 30% gearing •  Cost containment •  Sweating our ICT investment •  Completion of our refurbishment and release rooms •  Growth in rooms- eg Ghana •  Recovery in resort hotels Top 3 measured by RGI in markets we operate •  The focus in 2014 is to grow both occupancy and ADR. This will be supported by the UNWTO Conference facility which is remaining in Victoria Falls. •  Leverage on ICT platforms to enhance distribution of our hotels Succeeded in all markets, save for Elephant Hills where we are number 4
  5. 5. SUSTAINBILITY OF OUR STRATEGIC THRUST! Strategic goal Current status Comment/update Bankable lease/ management contracts with sustainable longterm returns for both parties 5 in Nigeria and we seek more Performance has improved over last year and additional rooms will improve profitability. Portfolio optimization and partnerships to unlock value especially for Safari Lodges business Target growth in centres driven by natural resources, tourism attractiveness and economic growth We remain focused in investing in West Africa, in particular Nigeria and Ghana •  We have re entered the Accra, Ghana profitable market with our first lease in the region •  200 rooms added, with ADR potential of at least $150 to constitute 10% of Revenue •  Declining destinations will be rationalized accordingly. Employee wellness and creating a bench in our talent for sustainable succession and 70% of our supervisor level and above internally trained •  We continue our intensive internal talent development for service excellence •  Engagement of employees for their wellness
  6. 6. MARKET DEVELOPMENTS Holiday Inn Harare!
  7. 7. MARKET DEVELOPMENTS: STRONG GROWTH IN INTERNATIONAL ARRIVALS INTO OUR HOTELS F 2013! +8% ! growth in Foreign room nights! +2% ! growth in Foreign ADR! Notable growth trends from last year • USA ▲ 11% • German ▲ 18% • Japan ▲ 31% • UK ▲ 26% • Other European countries except France ▲ 23% 39% ! Contribution to room nights from 35%! However, decline in international arrivals were recorded from; +8% ! growth in Resorts ADR! • Domestic market dropped 9% due to liquidity constrains in the economy. • China ▼ 26% • France ▼ 9%
  8. 8. ARRIVAL TRENDS – KEY SOURCE MARKETS: EUROPE STILL TO COME BACK AFTER THE EURO ZONE CRISIS! Source Market South Africa 2009 2010 8,992 ABOUT TO TAKE OFF !20,030 2011 2012 2013 2013/12 Var 24,124 21,388 20,428 -4% United Kingdom 1,348 2,447 3,355 3,103 3,913 26% France 1,985 3,359 3,532 3,573 3,268 -9% Germany 1,521 2,686 2,848 3,422 4,029 18% Italy 2,567 3,396 3,206 2,804 2,391 -15% 886 1,157 1,748 2,294 2,196 -4% 4,478 6,771 8,092 11,569 12,866 11% 1,052 2,259 2,851 3,701 3,705 - 964 1,968 2,907 3,739 2,753 -26% 304 789 903 685 1,226 79% 2,491 2,569 4,301 4,672 6,128 31% Canada 476 884 2,022 1,588 1,626 2% South Korea 696 1,095 941 845 2,117 151% Russia 107 360 276 398 486 22% Spain USA Australia ! China India Japan Total GRIDLOCK ! 27,867 49,770 61,106 63,781 67,132 Decline in from France, Italy and Spain arising from the slow recovery after the Euro zone Crisis! 5%  
  9. 9. FINANCIAL REVIEW Holiday Inn Bulawayo
  10. 10. FY 2013 PERFORMANCE IN BRIEF ! ! ! ! ! !
  11. 11. EBITDA AND PROFITABILITY GROWTH SUSTAINED…! F 13 F 12 ▲ 56,26 54,43 +3.4% Cost of SalesABOUT TO -15,30 OFF ! TAKE -15,84 - 3.4% US$ millions Revenue •  Revenue up 3.4%: +8%: Foreign volumes –  +9.4% :F&B Revenues +6.2% –  -9% :Domestic volumes •  Operating expenses due to: –  Gross Profit 40.97 38,59 -36,23 -34,72 EBITDA 6,97 6,29 EBITDA margin % 12.4 11.55 Operating Expenses Other Key Indicators Other Income +4.6% +11% ! GRIDLOCK ! - 1,716 Finance Costs -3,07 -2,86 Exceptional items -7.63 - +100 (Loss) / profit BT -5,94 1,68 -454% Headline earnings 0.924 0.962 •  EBITDA driven by: •  + 4.07% saving in COS •  +3.4% -growth in Revenue -100% •  Finance Costs up, but to reduce with Debt reduction plan +7.6% -4% Profitability growth to be sustained from growth in foreign arrivals, interest savings and new hotel projects!
  12. 12. F 2013 PERFORMANCE BY HOTEL! Occ RevPar Crowne Plaza Monomotapa! 64% 72 7,606 5,256 1,682 1,337 ABOUT TO TAKE OFF !71 73% 26% 7,639 5,540 2,408 2,306 4% Holiday Inn HRE! Revenue Gross Profit EBITDA 2013 EBITDA 2012 ▲% Hotel Holiday Inn BYO! 59% 57 5,608 3,964 1,275 1,005 27% Amber Hotel Mutare! 55% 47 2,833 1,958 856 527 62% Beitbrige Express Hotel! 43% 28 1,657 1,200 273 378 -28% Elephant Hills Resort! 38% 25 7,800 5,308 1,230 872 41% The Kingdom Hotel! 40% 36 7,591 5,298 905 988 -8% The Victoria Falls Hotel [50%]! ! 53% 106 5,502 4,037 1,519 1,411 8% Hwange Safari Lodge ! 21% 16 1,485 1,035 229 216 Troutbeck Inn Resort! GRIDLOCK ! 48% 6% 39 2,589 1,679 520 582 -11% Carribea Bay Resort! 41% 34 2,260 1,519 222 260 -15% Great Zimbabwe Hotel ! 49% 37 1,367 949 261 249 5% Casino Division! n/a n/a 1,430 1,430 (154) 775 -13% Vacations ! n/a n/a 435 435 7 -51 -114% PCC! n/a 40 308 308 414 1,183 -75% 49% 45 56,110 39,916 11,647 12,038 6% n/a n/a n/a n/a (4,673) (5,749) 19% 49% 45 56,110 39,916 6,974 6,289 21% Sub-Total! Head Office Costs! TOTAL!
  13. 13. CAPITAL STRUCTURE HEALTH AND BALANCE SHEET Crowne Plaza Monomotapa
  14. 14. BALANCE SHEET - FINANCIAL MATTERS ! F13 Actual F12 Increase in current assets: Actual –  US$4.2m -12% investment in Dawn classified as held US$m US$m Long term assets 40,995 44,728 and impairment, Current assets 18,184 14,516 Total assets 59,179 59,244 for sale –  US$ 6.0m- 16.54% still Investment in associate Assets Equity reduced to $7.6m by fair value adjustment Non current liabilities include: –  Long-term loans US$9.74m. –  Deferred tax liability US$4.73m. Current liabilities include; Equity and liabilities •  Shareholders equity 17,390 Non-current liabilities 16,233 Current liabilities 25,556 Total equity and liabilities 59,179 22,917 US$12.58m short-term loans, reduced by $4.1m post y/ end! Financial matters to note:! 10,540 ! •  Change in useful lives : -208m in depreciation! 25,787 ! •  Impairment of Investment in Associate by $7.6m! 59,244
  15. 15. DEBT REDUCTION PLAN To REDUCE GEARING TO 30%! US$m F13 Actual ABOUT TO TAKE OFF ! Long-term   9.742   Short-term borrowings   12.58   Total debt   22.322   Cash   (4.232)   ! Net debt   Equity   18.090   •  Target debt reduction of $16.1m structured as •  $4.1m completed already post year end[disposal of 12% 6.443   investment in Dawn Properties] •  $12m from the disposal of the 13.65   remaining 16.54% and a capital call 20.093   •  Capital structure to: (4.607)   •  Improve ability to self fund future refurbishments. 15.486   F12 Actual GRIDLOCK ! 16.080   22.917   34.170   38.403   53%   40%   (8.012)   (11.271)   Capital employed   Gearing   Net current assets (liabilities)   •  Improve returns to shareholders •  New debt of $2.350m tied to new income streams.[Ghana] •  Retain Long term debt only. •  At least $2m savings in interest to be realised when plan is fully implemented!
  16. 16. OUTLOOK Troutbeck Resort
  17. 17. 2014 FOCUS: STRATEGIC PRIORITIES! Sustainability anchored on; • Financial stability through; •  Low gearing – further debt reduction to net debt to below $10m •  Cash flow – further cost reduction to improve cash generation from operations • Asset quality – capital expenditure targeting hotel refurbishment will continue • Organic growth; •  get more of from existing business •  reducing costs while improving efficiency • Inorganic growth; •  target profitable new openings •  grow gaming revenue streams- eg sports betting
  18. 18. 2014 OUTLOOK: STRENGTHENED FOR PREDICTABLE BUSINESS GROWTH! Growth will be driven by; • Service excellence • Growth in rooms under management •  A lease in Ghana and; •  Two management contracts in Nigeria • Repositioning of our lodges and safari business • Resilient foreign market – expected to drive recover in resort hotels • Interest burden to be reduced from further debt reduction • Further cost containment
  19. 19. 2014 OUTLOOK: PERFORMANCE AFTER YEAR! OCC
  20. 20. OUTLOOK Amber Accra Ghana Opening
  21. 21. QUESTIONS AND ANSWER ?!
  22. 22. END !

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