African Sun H1 2011 analyst briefing

2,527 views

Published on

African Sun H1 2011 analyst briefing held on 22 June 2011

Published in: Investor Relations
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
2,527
On SlideShare
0
From Embeds
0
Number of Embeds
1,708
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

African Sun H1 2011 analyst briefing

  1. 1. F11 – H1Results22 June 2011
  2. 2. GLOBAL DEVELOPMENTS• Global travel industry on a rebound from a sluggish 2009• 5% growth recorded in 2010• Africa grew by 8%• Growth in 2011 estimated between 3% and 5%
  3. 3. DEVELOPMENTS IN OUR MARKETS• Zimbabwe recovery sustained, with foreign and domestic room nights up 32% and 7% respectively• South Africa occupancies dropped 30% due to over supply of rooms but showing signs of improvement in H2• Strengthening of the Rand poses threat as South Africa will be more expensive as a destination• Ghana demand spurred by oil and gas, with RevPAR up 10%• Nigeria occupancies affected by elections but market has picked up
  4. 4. HIGHLIGHTS H1 2011• Revenue ▲ 6% from than same period last year• RevPAR ▲15% from same period last year• ADR ▲ 5% from same period last year• Occupancy ▲ 12.5% to close at 45%• EBITDA profit ▲ 421% to $91,000 for the first six months• Operating expenses up 4.67% behind 6% growth in Revenue• Improvement in cash generation in Zimbabwe operations. South Africa saddled with losses.
  5. 5. BUSINESS PERFORMANCE H1 F11 ZIMBABWE SOUTH AFRICA (Hotels) 47% 30% OCCUPANCY ▲ from 40% ▼from 43% $37 $30 REVPAR ▲from $22 ▼from $43 +$15 -$13 6% -35% EBITDA ▲91% from ▼83% from 4% -15%• Strong performance from the city hotels in Zimbabwe• South Africa affected by a sharp decline in occupancies in the first half, however occupancies and RevPAR on the rise• Management fees down 33% due to the closure of Amber Tinapa, elections in Nigeria and renegotiation of HIAA fees
  6. 6. PIPELINE• Pipeline now active after a major setback in 2009Upcoming openings – Best Western Benin City: 80 Rooms, 1st July 2011 – Holiday Inn Gaborone: 151 rooms, 1st October 2011New signings – Amber Express Accra – 201 rooms• Working on Angola, Mauritius and Nigeria for opportunities
  7. 7. FUNDING & REFURBISHMENT• Unlocked a 5 year facility with an option to extend for an additional 2 years• Received proceeds of the first drawdown• Funds to be utilised on the refurbishment of the main Zimbabwe hotels• Priority to be given to Holiday Inns Relaunch by 1st October 2011• Refurbishment project capped at $10m• Working on reducing short term loans and the costs thereto
  8. 8. OPERATIONAL REPOSITIONING• We are working on increasing passenger seats into the Victoria Falls area• Elephant Hills has joined the African Bureau Convention and this has improved performance• Discussions with owners are ongoing to reposition The Grace in Rosebank and The Lakes Hotel & Conference Centre• Restructuring ongoing to reduce targeting both hotel and central costs
  9. 9. 2011 FOCUS• RevPAR Growth• Rooms growth• Cost reduction• Cash protection• Reduce and convert short-term borrowings to long-term
  10. 10. FINANCIALS
  11. 11. INCOME STATEMENT 31 March 2011 31 March 2010 ▲%Revenue $ 27 736 172 26 055 908 +6.45Cost of Sales $ (10 523 821) (9 718 520) +8.29COS % 38 37 +2.70Gross Profit $ 17 212 351 16 337 388 +5.36Operating expenses $ (17 120 734) (16 365 959) +4.61EBITDA $ 91 617 (28 571) +421EBITDA margin % 0.33 (0.11) +400ROCE % (2.6) (0.5) -EPS - cents (0.16) (0.03) -Occupancy % 45 40 +12.5ADR $ 81 77 +5.19RevPAR $ 37 32 +15.63 • EBITDA up 421% as Revenue grows by 6% spurred by a strong RevPAR growth in Zimbabwe. • EBITDA loss from operations being repositioned amounted to $695,271 • Cost of sales up 8.29% ahead of the growth in Revenue owing to depressed performance in South Africa and wage increases • Hotel operating expenses ▲7% up and central costs ▼3%
  12. 12. DIVISONAL PERFORMANCE Zimbabwe Regional Hotelserve % Change % Change % ChangeRevenue ▲29% ▼23% ▼20%Cost of Sales ▲29% ▼8.4% ▼20%COS % 32% 51% 78%Operating costs ▲25% ▼2% ▼33%EBITDA ▲91% ▼83% ▲57%EBITDA 2011 $ 1,353mln ($1.091mln) ($92,000)EBITDA 2010 $ 707,605 (594,398) (223,236)EBITDA margin % 6% -35% -4%Occupancy % 47% 30% _ADR $ $79 $101 _RevPAR $ $37 $30 _• Zimbabwe continues to improve, though costs increased due to a 35% increase in wages and variable rent element• Regional operations affected by low volumes and fixed costs• Rental negotiations and restructuring to reduce loses in the second half• Hotelserve affected by loss of contracts, operating costs went down 33%
  13. 13. RevPAR performance RevPAR Performance • Zimbabwe ▲ 23% emanating from 2011 2010 increase in occupancy and increase in ADR $163 $148 • South Africa ▼ 40% due to oversupply of rooms, but prospects of H2 better as occupancies have recovered • Ghana ▲ 10% from increase in rate $43 • Nigeria affected by closure of $37 $37 $30 $30 $32 Amber Tinapa and elections $23 $11 Zim SA Gha Nig GroupThe weakening of the USD against emerging currencies to result in:• Cost push inflation, mainly in Zimbabwe• Regional destinations to be more expensive, mainly South Africa
  14. 14. BREAKEVEN RevPAR Actual & BE RevPAR • BE RevPAR up 11% from $37 last year Actual RevPAR BE RevPAR due to: • 35% increase in wages in $41.05 Zimbabwe $37.00 $36.51 • Depressed performance and 8% $32.00 wage increase in South Africa • Position to improve as: • Zimbabwe operations continue to improve • Rental negotiations begin to take effect in South Africa 2011 2010A dollar increase in RevPAR will improve our bottom line by $463k(2010: $425k)
  15. 15. KEY COST RATIOS March 2011 March 2010 P.P. ChangeCOS 38% 37% ▲1Expenses to RevenuePayroll 21% 23% ▼2Rent & rates 8% 10% ▼2R&M 4% 4% -Central costs 14.94% 16.47% ▼1.53Other 18.06% 13.53% ▲4.53Total Operating Expenses 66% 67% ▼1• Ratios improve with increase in Revenue• Ratios to improve in H2 with full realization of rental concessions in South Africa and impact of restructuring• Rent and rates down due to South Africa rental savings
  16. 16. ZIMBABWE RECOVERY CONTINUES… Revenue Vs EBITDA • Revenue ▲ 29%$25,000,000 • Occupancy ▲ from 40% to 47%$20,000,000$15,000,000 • Foreign room nights up 32%$10,000,000 • Domestic room nights up 7% $5,000,000 6% 4% • RevPAR ▲ 23% to $37 $- 2011 2010 Revenue $22,227,843 $17,207,085 • ADR ▲ 8% to $79 EBITDA $1,352,759 $707,605 • Both city and resort hotels achieve growth City Resorts 2011 2010 ▲% 2011 2010 ▲% • City hotels benefit from conferencing and increase in corporate businessRevenue $ 11,136,342 9,393,348 19% 9,920,471 7,440,804 33% • Resorts benefit from global growth as well asEBITDA $ 1,708,486 1,239,806 38% 21,171 (228,134) 109% local market, but still laggingEBITDA % 15% 13% 16% 0% -3% 107% • Resorts post a marginal EBITDA profit from aOcc 63 59 7% 35 28 25% loss of $228,000 last yearADR $ 77 68 13% 79 80 -1% • BE RevPAR up to $37 from $32 last yearRevPAR $ 49 40 23% 28 23 22%
  17. 17. FINANCIAL POSITIONING & FUNDING 31Mar 31Mar • $2.62m in cash and $1.5m inCashflow 2011 2010 undrawn facilities $ $ • Cash used in operations downCash used in 88% as operations improve,operations (526 277 ) (4 498 892) particularly in ZimCash used ininvesting (1 152 252) (869 438) • $3.4m drawdown from our long- term facility in June 2011, effectFinancing to show in H2.Loansraised 1 468 258 6 947 212 • Cost of borrowing to drop downIncrease in to 14%cash (210 271) 1 578 882Exchange Difference 23 376 23 374Cash at beginning of period 2 810 406 2 260 207 • Reduced rentals and payrollCash at end of period 2 623 511 2 539 838 burden to improve cashflow • Zimbabwe has started to attract long term funding. • This should ease cost of debt and need for short-term capital.
  18. 18. FINANCIAL POSITITON & FUNDING: • Increase in long-term assets arising from equityBalance sheet 31 Mar 11 30 Sep 10 accounting of associate US$ US$ • Net current liabilities increased due to depressedAssets performance in South AfricaLong term assets 34 257 434 31 449 128 • Net borrowings up to $6.87m from $4.83m owing toCurrent assets 15 478 680 18 505 166 working capital demands and capital expenditure • Net borrowings to increase by $9.7m in H2 arising from long-term loans for hotel capital expenditureTotal assets 49 736 114 49 954 294 • Debenture of $1.14m receivable from Ghana to beEquity and liabilities applied to short-term loansShareholders equity 25 639 826 25 003 223 • Disposal of Hotelserve to improve short-term loansNon-current liabilities 4 189 085 5 053 159 position by an additional $1mCurrent liabilities 19 907 203 19 897 912Total equity and liabilities 49 736 114 49 954 294
  19. 19. Update on RevPAR and growth OutlookSBU FY 09 FY 10 FY 11 H1 FY11 FY 11 % Change original Actual revised forecast forecastZim $22 $33 $37 $37 $41 +11%SA $40 $56 $59 $30 $41 -31%Group $23 $36 $41 $37 $41 -Full year forecasts revised as follows: Revenue to $59.6m from $64m, 10% growth from last year EBITDA reduced to 3.5% from 7%, up from 0.6% last yearThis revision is mainly attributable to: Depressed performance in South Africa The Lakes Hotel, Benoni, Johannesburg, South Africa Depressed revenues for Hotelserve Delay in opening Holiday Inn Gaborone Once off restructuring costs in H2
  20. 20. QUESTION & ANSWER The Lakes Hotel, Benoni, Johannesburg, South AfricaTROUTBECK RESORT, NYANGA, ZIMBABWE

×