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WIL: WILDERNESS HOLDINGS LIMITED - Unaudited Condensed Consolidated Interim, Financial Results for the six months ended 31 August 2018
29 Oct 2018

WIL: WILDERNESS HOLDINGS LIMITED - Unaudited Condensed Consolidated Interim, Financial Results for the six months ended 31 August 2018
Unaudited Condensed Consolidated Interim, Financial Results for the six months ended 31 August 2018

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 condensed consolidated interim financial results
For the six months ended 31 August 2018

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 11% to P780 million
- EBITDA up 59% to P285 million
- Trading profit* up 26% to P235 million
- Total revenue per available room** up 12%
- Profit after tax up 36% to P159 million
- Cash generated by operating activities up 48% to P323 million
- HEPS up 36% to 59 thebe per share
- Occupancy rate up to 67% from 65%

* EBITDA before the effects of other gains 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           Audited
                          six months              six months              year
                               ended                   ended             ended
P'000                    31 Aug 2018   Change    31 Aug 2017       28 Feb 2018
Revenue                      779 954      11%        704 949         1 208 912
Cost of sales               (214 290)               (209 826)         (372 839) 
Gross profit                 565 664                 495 123           836 073
Other gains                    4 455                     581               970
Operating expenses          (330 449)      7%       (309 161)         (599 871)
Foreign exchange
gains/(losses)                44 993                  (7 754)          (30 777) 
Operating profit for year
before items listed below
(EBITDA)                     284 663      59%        178 789           206 395
Impairment loss               (5 192)                 (4 231)           (9 566)
Depreciation and
amortisation                 (52 629)                (41 273)          (86 224) 
Operating profit             226 842      70%        133 285           110 605
Net finance costs            (11 707)                 (9 473)          (19 169)
Unrealised foreign exchange
(losses)/gains on loans       (6 137)                  9 319            17 381
Share of associate company
profit                         2 882                   2 035             6 067
Profit before taxation       211 880      57%        135 166           114 884
Taxation                     (52 721)                (18 395)          (27 580) 
Profit for the period        159 159      36%        116 771            87 304
Other comprehensive
(loss)/income
Items that may be 
subsequently reclassified 
to profit or loss
Exchange differences on 
translating foreign
operations                   (23 247)                 (2 211)            7 723
Equity holders of the
Company                      (23 286)                 (3 626)            9 807
Non-controlling interest        (826)                    423               335
Net investment in foreign
operations                       865                     992            (2 419)
Total comprehensive income
for the period               135 912                 114 560            95 027
Profit attributable to:
Owners of the Company        140 320                  99 945            76 658
Non-controlling interest      18 839                  16 826            10 646
                             159 159                 116 771            87 304
Total comprehensive 
income attributable to:
Owners of the Company        117 899                  97 311            84 046
Non-controlling interest      18 013                  17 249            10 981
                             135 912                 114 560            95 027
Earnings per share (thebe)
Basic                          59.09      40%          42.17             32.32
Diluted                        58.64      40%          41.92             32.03


Additional disclosure 
                                     Unaudited       Unaudited         Audited
                                    six months      six months            year
                                         ended           ended           ended
P'000                              31 Aug 2018     31 Aug 2017     28 Feb 2018
Reconciliation between profit 
attributable to owners of 
the Company and headline 
earnings
Profit attributable to
owners of the Company                  140 320          99 945          76 658
Adjustments
IAS 16 - Gains on disposal 
and impairment of property,
plant and equipment                     (2 078)           (543)           (873)
IAS 36 - Impairment of assets            5 192           4 209           9 549
IFRS 10 - Gain on loss of
control of subsidiary                   (2 377)              -               - 
Tax effects of adjustments                (456)           (745)         (2 231)
Minority interest                         (379)            (37)            (93)
Headline earnings                      140 222         102 829          83 010
Number of shares issued (thousands)
Issued                                 237 562         237 362         237 437
Weighted average                       237 462         237 017         237 203
Diluted weighted average               239 300         238 444         239 356
Headline earnings per share (thebe)
Basic headline                           59.05           43.38           35.00
Diluted headline                         58.60           43.13           34.68
Commitments
Capital
Authorised by directors and
contracted for                          13 974          63 478          39 442
Not yet contracted for but
authorised by directors                 43 137          56 832          81 915
                                        57 111         120 310         121 357
It is intended to finance capital 
expenditure from working capital 
generated and existing borrowing 
facilities.
Operating leases
Minimum lease payments due
- within one year                       18 898          16 122          23 914
- in second to fifth year inclusive     60 015          51 515          70 592
- after fifth year                      92 784          49 526         128 877
                                       171 697         117 163         223 383
Borrowings
Non-current
Interest bearing                       381 181         371 274         354 413
Non-interest bearing                    15 067          15 206          10 969
Less: Current portion of
long-term liabilities                  (46 352)         (7 078)        (39 743)
                                       349 896         379 402         325 639



Condensed consolidated statement of financial position
                                     Unaudited       Unaudited         Audited
                                         as at           as at           as at
P'000                              31 Aug 2018     31 Aug 2017     28 Feb 2018
Assets
Non-current assets                   1 018 810         887 950         986 295
Property, plant and equipment          775 750         643 635         734 927
Goodwill                                58 109          69 085          68 976
Intangible assets                      111 839         116 107         114 205
Investments and loans in associates     26 639          14 735          23 757
Loans receivable                        19 331          13 622          18 710
Deferred tax assets                     27 142          30 766          25 720
Current assets                         845 611         732 720         538 077
Inventories                             36 840          35 341          32 089
Receivables and prepayments            219 828         181 975         150 425
Current tax receivable                  21 522          25 885          34 918
Bank balances and cash                 567 421         489 519         320 645
Total assets                         1 864 421       1 620 670       1 524 372
Equity and liabilities
Equity attributable to the
owners of the Company                  633 111         566 763         553 665
Stated capital                         168 771         167 291         168 634
Foreign currency translation reserve     9 047          21 443          31 468
Common control reserve                 (73 324)        (73 324)        (73 324)
Other non-distributable reserves        19 318          19 318          19 318
Share-based payment reserve               (558)             34          (1 145)
Retained income                        509 857         432 001         408 714
Non-controlling interest                56 043          44 536          38 268
Total equity                           689 154         611 299         591 933
Non-current liabilities                423 132         444 548         394 138
Borrowings                             349 896         379 402         325 639
Deferred tax liabilities                73 236          65 146          68 499
Current liabilities                    752 135         564 823         538 301
Trade and other payables               621 705         497 119         454 653
Borrowings - current portion            46 352           7 078          39 743
Current tax liabilities                 25 052           8 471           1 830
Bank overdrafts                         59 026          52 155          42 075
Total liabilities                    1 175 267       1 009 371         932 439
Total equity and liabilities         1 864 421       1 620 670       1 524 372


Condensed consolidated statement of cash flows
                                     Unaudited       Unaudited         Audited
                                    six months      six months            year
                                         ended           ended           ended
P'000                              31 Aug 2018     31 Aug 2017     28 Feb 2018
Cash flow from operating activities
Cash generated from operations         347 515         253 776         280 725
Net finance costs                      (11 707)         (9 473)        (19 169) 
Taxation paid                          (12 560)        (26 532)        (42 633) 
Net cash inflow from
operating activities                   323 248         217 771         218 923
Cash flow from investing activities
Disposal of subsidiary company          15 856               -               -
Additions to property, plant 
and equipment and intangibles          (97 608)       (120 794)       (266 049)
Proceeds on disposal of property, 
plant and equipment and intangibles      3 594           3 318           4 189
Acquisition of associate company             -               -          (4 990)
Long-term loan receivable advanced        (622)        (13 622)        (18 710) 
Net cash outflow from investing 
activities                             (78 780)       (131 098)       (285 560)
Cash flow from financing activities
Non-controlling interests'
share of dividends                        (238)         (1 299)         (1 299) 
Dividends paid                         (39 177)        (39 082)        (39 082)
Repayment of long-term liabilities     (21 833)         (2 709)         (7 260)
Long-term liabilities advanced           9 244         227 134         233 828
Net cash (outflow)/inflow
from financing activities              (52 004)        184 044         186 187
Net increase in cash and
cash equivalents                       192 464         270 717         119 550
Unrealised exchange gain/
(loss) on foreign cash balances         37 361          (3 832)        (11 459)
Cash and cash equivalents
at beginning of year                   278 570         170 479         170 479
Cash and cash equivalents
at end of year                         508 395         437 364         278 570


Condensed consolidated statement of changes in equity
                                     Unaudited       Unaudited         Audited
                                    six months      six months            year
                                         ended           ended           ended
P'000                              31 Aug 2018     31 Aug 2017     28 Feb 2018
Opening balance                        591 933         536 571         536 571
Share issue on settlement
of share scheme                            137               -           1 343
Non-controlling portion of
dividend paid                             (238)         (1 299)         (1 299) 
Dividends paid                         (39 177)        (39 082)        (39 082)
Total comprehensive income
for the period                         135 912          114 560         95 027
Share-based payment reserve                587              552           (627)
Other                                        -               (3)             -
Closing balance                        689 154          611 299        591 933


Segmental information
                                     Unaudited       Unaudited         Audited
                                    six months      six months            year
                                         ended           ended           ended
P'000                              31 Aug 2018     31 Aug 2017     28 Feb 2018
Segment profit
Botswana                               117 055          91 608         118 760
Kenya                                   11 711           5 083           5 056
Namibia                                 24 213          22 909          33 024
Rwanda                                  12 131           7 669          15 263
South Africa                            33 339          35 399          34 129
Zambezi                                 38 364          24 546          30 422
Intergroup                              (1 598)         (1 252)           (452)
Group                                  235 215         185 962         236 202
Depreciation and amortisation
Botswana                               (25 600)        (18 543)        (39 722)
Kenya                                   (2 869)         (1 792)         (4 018)
Namibia                                 (6 666)         (6 981)        (12 213)
Rwanda                                  (3 113)           (141)         (4 211)
South Africa                            (3 438)         (4 360)         (7 896)
Zambezi                                (10 943)         (9 456)        (18 164)
Group                                  (52 629)        (41 273)        (86 224)
Transactions unallocated to
a segment
Other gains                              4 455             581             970
Foreign exchange (losses)/gains         44 993          (7 754)        (30 777) 
Impairment losses                       (5 192)         (4 231)         (9 566)
Interest paid                          (14 400)        (11 052)        (23 202)
Interest received                        2 693           1 579           4 033
Unrealised foreign exchange
(losses)/gains on loans                 (6 137)          9 319          17 381
Associate earnings                       2 882           2 035           6 067
Profit before taxation                 211 880         135 166         114 884
Taxation                               (52 721)        (18 395)        (27 580)
Profit after tax                       159 159         116 771          87 304
Segment assets
Botswana                               918 595         850 492         871 711
Kenya                                   93 207          59 537          59 429
Namibia                                180 995         173 726         164 249
Rwanda                                  99 023          76 262          72 748
South Africa                           485 134         415 478         249 911
Zambezi                                188 304         150 307         115 856
Central financing
activities and eliminations           (100 837)       (105 132)         (9 532)
Group                                1 864 421       1 620 670       1 524 372
Segment liabilities
Botswana                               583 782         555 368         528 799
Kenya                                   83 834          50 204          54 656
Namibia                                 53 022          50 657          38 942
Rwanda                                  23 132           4 295          14 301
South Africa                           526 182         442 905         327 571
Zambezi                                 64 835          52 633          35 350
Central financing
activities and eliminations           (159 520)       (146 691)        (67 180)
Group                                1 175 267       1 009 371         932 439

                                     Unaudited       Unaudited         Audited
                                    six months      six months            year
                                         ended           ended           ended
P'000                              31 Aug 2018     31 Aug 2017     28 Feb 2018
Revenue
Revenues by type of service
Travel experience                      705 279         621 484       1 071 835
Service fees                            68 353          67 192         109 366
Other revenue                            6 322          16 273          27 711
                                       779 954         704 949       1 208 912
Revenues by geographical regions
Botswana                               335 935         293 969         481 249
Kenya                                   62 536          49 355          92 394
Namibia                                106 529         107 477         196 877
Rwanda                                  25 897          20 733          44 221
South Africa                           505 217         459 286         758 086
Zambezi                                131 576         114 177         193 111
Intergroup                            (387 736)       (340 048)       (557 026)
                                       779 954         704 949       1 208 912

                                             %               %               % 
Revenues by source market                            
Africa and Middle East                      32              32              35
Americas                                    46              43              40
Australasia                                  2               2               2
Europe and Asia                             20              23              23
                                           100             100             100

Commentary
The Group produced an excellent half year performance, matching its best ever 
occupancy rate of 71%, normalised for Governors', or 67% overall, which is the 
highest recorded since the acquisition of Governors'. The successful launch of 
the newly built Mombo, political stability in Kenya, appreciation of the US 
Dollar since the beginning of the financial year and a strong US market 
provided tailwinds to significant growth.

This saw trading profit jump by 26% to P235 million in spite of just one 
percentage point increase in total available bednights (capacity) to 156 788.

The Group posted 36% increase in headline earnings per share (HEPS). 

Financial review
Revenue increased by 11% to P780 million, following significant improvement in 
yields and the 3% rise in bednights sold to 104 855 (2017: 101 404).

Trading profit margin increased from 26% to 30%. This reflects the impact on 
the bottom line of the strong demand for bednights and the improved utilisation 
of the Group's assets. The impact on revenue of the depreciation of the local 
currencies was negligible, largely because of the adoption of IFRIC 22 which 
requires that foreign currencies be converted at the earlier of receipt or 
service. As the Group's collection period is primarily from February to July, 
a substantial portion of revenue was recorded at exchange rates lower than 
those prevailing last year, as the Pula exchange rate to the US Dollar lagged 
behind until June 2018. Costs have remained well contained at 7% higher than 
prior year. Some level of upward pressure is evident in transport costs due 
to higher fuel prices and greater activity, as well as lease costs (impact of 
new leases and their accounting smoothing). Staff costs increased marginally 
higher than inflation, largely because of a slight increase in headcount and 
higher share-based payments charges,increasing by 34% to P3.3 million from 
P2.4 million.

Other gains of P4.5 million include proceeds from insurance claims amounting 
to P2.1 million and profit on sale of a subsidiary of P2.4 million. Impairment 
losses amounted to P5.2 million and relate to the impairment of Mombo Trails 
Camp (P3.5 million) and a damaged aircraft (P1.5 million).

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 24% higher at P11.7 million (2017: P9.5 million), 
being a consequence of the increased debt to finance capital investment and 
acquisitions.

The Group's effective tax rate increased to 25% from 14% in the prior year, 
largely due to the recognition in the prior year of a P10 million deferred 
tax asset in the Governors' Group.

Capital expenditure amounted to P100 million for the period, continuing 
with the philosophy to ensure the Group's properties and assets remain in 
pristine condition. Approximately P9 million was spent on a temporary camp 
and one new camp, and P45 million on rebuilding existing camps and one 
additional aircraft. The balance is defensive in nature.

Cash balances, less overdrafts, have increased by 83% to P508 million as 
a result of strong cash generated from operations amounting to 
P323 million, offset by an outflow in investing activities of P79 million 
and loan repayments and a dividend payment of P52 million. The carrying 
values of the financial assets and financial liabilities approximate 
their fair value.

Geographical operations (segmental performance)
All geographical segments, other than South Africa, reported increases 
in segment profit. The two main drags on South Africa were additional 
corporate recoveries as well as a slow-down in the road transfer business 
due to the impact on tourism following the water crisis in Cape Town.

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.

Seasonality
The Group's peak demand occurs in the first half of the year. This is 
largely due to the floods in the Okavango Delta and corresponds with the 
holiday season in our sales markets. The revenue for the six months ended 
31 August 2018represented 65% (2017: 64%) of the total sales for the year 
ended 28 February 2018.

Leases
The concession upon which Vumbura Plains and Little Vumbura are situated 
has been awarded. The lease agreement is in the process of finalisation.

Shares in issue
During the period the Company issued 124 663 ordinary shares at no par 
value (representing approximately 0.05% of the enlarged number of shares 
in issue) for no consideration to settle the share scheme obligations. 
At 31 August 2018 the number of ordinary shares in issue was 237 562 016 
(2017: 237 362 408) and the weighted average number of shares was 
237 461 903 (2017: 237 016 867).

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, 
other than those already notified to shareholders on 31 July 2018.

Directorate
The following changes to directorate occurred during the reporting period:
Name                              Designate          Nature                 Date
Mr Jochen Zeitz                   Non-executive      Resigned       12 July 2018
Mr Christophe Vinsonneau          Non-executive      Resigned       12 July 2018
Mr Babajide HK (Jide) Olanrewaju  Non-executive      Appointed      12 July 2018
Mr Akinyemi (Yemi) Lalude         Non-executive      Appointed      12 July 2018
Mr Michael (Mike) Stone           Non-executive      Appointed      12 July 2018
Mr Nicholas (Nick) Stone          Non-executive      Appointed      12 July 2018
Mr Michael Tollman                Independent        Resigned     23 August 2018
                                  non-executive      
Mr Gavin Tollman                  Non-executive      Resigned     23 August 2018
Mr Parks Tafa                     Non-executive      Retired      30 August 2018
Mr Roux Marnitz                   Lead independent   Retired      30 August 2018
                                  non-executive      

Basis of preparation
The condensed financial information has been prepared in accordance with and 
containing the information required by IAS 34 Interim Financial Reporting, the 
SAICA Financial Reporting Guides as issued by the Accounting Practices 
Committee and Financial Pronouncements as issued by Financial Reporting 
Standards Council and complies with the disclosure requirements of the Botswana 
Stock Exchange and the Johannesburg Stock Exchange Listings Requirements. 
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 2018. The adoption of amendments to these standards has not had any 
material impact on previously reported figures.

Outlook
The Group's strategy continues to focus on investing in African tourism markets 
that offer authentic wildlife and safari experiences and where our specific 
ecotourism model can have positive conservation and community impacts. Our 
ecotourism model and our vertical integration is a key differentiator from our 
competitors and places us at a significant advantage. Our forward occupancy for 
the rest of the year is expected to at least match that of the prior year. The 
continued strength of the US economy, continued political stability in Kenya 
and further progress in Zimbabwe are positive factors that should drive demand 
for our product, for so long as they continue. 

The rebuilt camps of Mombo, Chitabe and Serra Cafema (September 2018) have all 
been successful with enormous positive feedback from the trade. Our new lodge 
development at Magashi in Akagera National Park, Rwanda, is picking up steam 
and is expected to be completed in the first quarter of next year.

By order of the Board
Keith Vincent                         Ami Azoulay
Chief Executive Officer               Chief Financial Officer (Preparer)

29 October 2018

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

BSE Sponsor:
Motswedi Securities (Proprietary) Limited

JSE Sponsor:
Arbor Capital Sponsors Proprietary Limited

Transfer secretaries:
Corpserve Botswana - Computershare

Directors:
JM Hunt*, MW McCulloch#, MPK ter Haar*, A Lalude#, B Olanrewaju#,
M Stone#, N Stone#, KNW Vincent (CEO), A Azoulay (CFO), DA de la Harpe
#non-executive director *independent non-executive director

Group Company Secretary: 
L Alexander

www.wilderness-holdings.com

Date: 29/10/2018 09:03:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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