To view the PDF file, sign up for a MySharenet subscription.

GRAND PARADE INVESTMENTS LIMITED - Summarised Audited Financial Statements For The Year Ended 30 June 2018

Release Date: 28/09/2018 17:30
Code(s): GPL     PDF:  
Wrap Text
Summarised Audited Financial Statements For The Year Ended 30 June 2018

Grand Parade Investments Limited
(Incorporated in the Republic of South Africa) 
Registration number: 1997/003548/06
Share code: GPL
ISIN: ZAE000119814
("GPI" or "the Company" or "the Group")

SUMMARISED AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018

SALIENT FEATURES

19%
increase in revenue to R1 145 million

125%
increase in profit from operations (including equity accounted earnings) to R79 million

144%
decrease in headline earnings per share 

366%
decrease in basic earnings per share 

OPERATIONAL HIGHLIGHTS

- Opened 19 Burger King outlets increasing to a total of 80 corporate owned outlets as at 30 June 2018
- Met the target of 80 Burger King stores by 30 June 2018 
- Rolled out 5 stores for Dunkin’ Donuts and 1 store for Baskin-Robbins, bringing total stores to 11 and 5 respectively
- Reduced central costs’ headline loss before taxation contribution by 51% to R32.9 million for the period under review

LETTER TO SHAREHOLDERS

Dear Shareholder,

I am pleased to notify you that the annual financial statements of Grand Parade Investments Limited ("the Company") and the Group, for the financial year ended 
30 June 2018, have been published and are available, without charge, upon request to the  company secretary at info@grandparade.co.za during normal business hours.

You will find a copy of the summarised audited financial statements of the Company and the Group, for the financial year ended 30 June 2018 in this booklet and a copy
thereof is available as indicated in the paragraph above.

I am furthermore, pleased to notify you that he annual general meeting of the shareholders of the Company will be held on 12 December 2018 in the Market Hall at
GrandWest Casino, 1 Jakes Gerwel Drive, Goodwood, commencing at 18h30.

The full notice of the Annual General Meeting and the Form of Proxy will be posted to you in due course.

In closing, I would like to invite you to visit our newly refreshed website at the address given above. Please also ensure that Computershare has your current contact
and banking details on record to prevent the non-delivery of our communications or the non-payment to you of any dividend payments. If you have not yet elected to
receive communications by electronic means (email), please consider electing this as your preferred method of receiving communications from GPI and Computershare, 
as this will contribute to our efforts to embrace the use of technology to conserve our natural resources.

Sincerely,

Hassen Adams
Executive Chairman

28 September 2018

INTRODUCTION

Despite significant economic headwinds due to the pending recession, the decline in consumer spending, the VAT increase, Sugar Tax, water levies in the Western Cape
(where GPI is based), a substantial increase in the price of beef, and increases in the fuel price, the decision to enter the food service sector has proven 
to be positive for GPI. Burger King, GPI's first and biggest investment in the food service arena, was able to meet its MFDA obligation by delivering 80 stores 
within the prescribed time limit. Whilst Burger King's gross margin was dramatically affected by the headwinds cited above, it successfully maintained steady 
growth by reducing cost of sales as a result of economies of scale through store growth, and improvements in the gross margin by renegotiating bulk discounts.

In the case of Dunkin' Donuts and Baskin-Robbins the recessionary environment impacted consumer spending which negatively affected earnings. The Group has countered
this by introducing a Bakery that has proven to positively reduce the cost of doughnuts by approximately half.

The gaming and leisure investments are showing good traction, and GrandWest Casino and Sun Slots have shown improvement year-on-year in contrast to the flat gaming
performances elsewhere in the country.

GPI remains focussed on selling off non-profitable, non-core assets whilst paying close attention to the Group's strategic investments in Spur, Atlas Gaming,
Mac Brothers and the meat plant.

The Group continues to venture into operational opportunities which are then either leveraged as assets for sale or retained (either in whole or in part) to realise
substantial profit. These retained stakes are central to GPI as a business and will continue to define GPI as an active investment company.

INVESTMENT ACTIVITIES

The Group has continued to restructure its investment portfolio in line with its strategy of increasing its investments in food. The move towards strategic investments
in gaming & leisure and completely divesting from its non-core investments is on-going. Details of these transactions are set out below.

FOOD

Burger King, Dunkin' Donuts and Baskin-Robbins continued to experience a challenging year with the second half being the most significant on trading. The introduction
of the new Health Promotion Levy (Sugar Tax) and the increase in the VAT rate from 14% to 15% had a significant negative impact on the margins as these costs were
absorbed by the businesses to maintain market share growth. In addition, increased food and supply chain costs further eroded food margins.

GAMING AND LEISURE

The gaming and leisure investments have performed in line with GPI's expectations of low to medium growth within the casino and LPM segment of the gaming industry.
Furthermore, the Group concluded the swap agreement in respect of Atlas Gaming Australia for a 26% stake in a local company called Infinity Gaming Africa (Pty) Ltd
(IGA).

NON-CORE INVESTMENTS

During the current year, GPI concluded its divestment of non-core loss making investments. The sale of Grand Tellumat was finalised on 2 November 2017 for a total
consideration of R15 million. The settlement of the proceeds was deferred over 4 months with an initial upfront payment of R2.5 million paid at fulfilment of all the
conditions precedent, and the balance to be paid by the end of March 2018. To date, R5.5 million has been received of the total consideration. The settlement of the
unpaid balance was renegotiated, and a revised payment plan concluded on 24 July 2018 in which full settlement is to be made by 30 November 2018. As a result
management has raised a provision to impair the remaining settlement of R9.5 million.

The Group entered into a sale agreement to dispose of its property situated on Sandton Drive and 1 Heerengracht during the year. The properties were accounted for
respectively at a cost of R11.3 million and R40.2 million, the sales were concluded at a price of R11.5 million and R51.2 million respectively. Both properties 
were transferred within this financial year, realising a profit of R0.2 million and R8.5 million respectively, after CGT.

GROUP FINANCIAL REVIEW

The Group uses headline earnings to assess the underlying investment contributions to the Group's earnings. The reason for using headline earnings is that it
eliminates the once-off effects of the Group's investment activities and therefore provides a comparable view of the Group's continuing earnings.

The decline in headline earnings is largely due to Dunkin' Donuts, including the Bakery and Baskin-Robbins which collectively contributed a R62.9 million 
headline loss before taxation for the period and was offset by Burger King, which decreased its loss contribution by R11.5 million to R29.7 million. SunWest and 
Sun Slots contributed positively to headline earnings with a collective increase of 14% or R14.1 million offset by a decline in Worcester Casino of 23% or R0.7 million.

GPI showed an overall decrease in its headline earnings from core investments for the year, which declined by R27.9 million from a loss of R20.1 million last year to
R48.0 million this year.

The table below shows the contribution each investment made to Group headline earnings:

                                      30 June    30 June       Movement
                                         2018       2017
                                       R'000s     R'000s     R'000s      %

Food                                 (107 741)  (112 330)    4 589      4%
Burger King                           (29 744)   (41 285)   11 541     28%
Dunkin' Donuts                        (29 833)   (27 754)   (2 079)    (7%)
Baskin-Robbins                        (24 863)   (16 193)   (8 670)   (54%)
Mac Brothers                          (10 700)   (10 345)     (355)    (3%)
Bakery                                 (8 172)         -    (8 172)  (100%)
Spur                                      608     (4 939)    5 547    112%
Grand Foods Meat Plant                 (5 037)   (11 814)    6 777     57%

Gaming                                117 076    103 755    13 321     13%
SunWest                                77 739     70 354     7 385     10%
Sun Slots                              36 786     30 102     6 684     22%
Worcester Casino                        2 551      3 299      (748)   (23%)

Central costs                         (35 644)   (40 996)    5 352     13%
Corporate Costs (excl. net finance    
income)                               (32 992)   (67 919)   34 927     51%
Net corporate finance income           (7 786)    18 186   (25 972)  (143%)
GPI Properties                          5 134      8 737    (3 603)   (41%)

Non-core Investments                   (9 500)   (12 408)    2 908     23%
GTM                                    (9 500)    (9 350)     (150)    (2%)
Grand Sport                                 -     (3 058)    3 058    100%
Headline loss before taxation         (35 809)   (61 979)   26 170     42%
Taxation                              (12 210)    41 853   (54 063)  (129%)
Headline loss after tax               (48 019)   (20 126)  (27 893)  (139%)

DIVIDENDS

On 27 December 2017 GPI declared a dividend of 11.5 cents per share in respect of the 2017 financial year, which amounted to R54.5 million, of which R4.1 million
related to GPI shares held in treasury. GPI is committed to remaining dividend-active. Any distribution relating to 2018 financial year will be considered once future
cash flows can be determined with more certainty.

CAPITAL STRUCTURE

The Group has recognised that whilst Burger King is still in its growth phase and the Dunkin' Brands businesses in start-up which consequently contributes minimal
earnings to the Group, the Group will continue to adopt a conservative approach on its gearing for these operations to meet its Master Franchise obligations.

Over the past 36 months the Group decreased its gearing levels from 35.5% to 30.5% as a result of part disposals in its gaming and leisure investments over this
period. The proceeds received from its part disposal of SunWest were utilised to repay the full Standard Bank revolving credit facility of R225.0 million. This was
however offset by the raising of a new Standard Bank preference share facility in December 2017 of R251.7 million at an embedded dividend rate of 85% of prime over a 
5 year term. The Group's targeted debt equity range is set between 20.0% and 35.0%.

At 30 June 2018, the debt equity ratio increased by 13.7% from 16.8% last year to 30.5%, which is within the targeted range.

                                               30 June  30 June       Movement
                                                  2018     2017
                                                R'000s   R'000s   R'000s       %

Holding company facilities                     507 118  240 401   266 717   111%
SunWest                     Preference shares  251 673        -   251 673
Spur                        Preference shares  255 445  240 401    15 044     6%
Subsidiary facilities                           92 635  113 973   (21 338)  (19%)
GPI Properties              Term loans
                            (Mortgage)          67 229   74 641    (7 412)  (10%)
Mac Brothers                Finance leases       8 704   12 880    (4 176)  (32%)
GF Meat Plant               Finance leases      14 645   24 246    (9 601)  (40%)
Burger King                 Finance leases       1 710    1 594       116     7%
Baskin-Robbins              Finance leases         124      146       (22)  (15%)
Dunkin' Donuts              Finance leases         153      357      (204)  (57%)
GPIMS                       Finance leases          70      109       (39)  (36%)
Total Debt                                     599 753  354 374   245 379    69%
Debt/Equity                                      30.5%    16.8%      (14%)  (83%)

REVIEW OF INVESTMENT OPERATIONS 

FOOD

BURGER KING

The total number of Burger King restaurants at 30 June 2018 closed at 87 stores of which 80 is corporate owned. The net restaurant movement included the opening of 
19 new restaurants and no closures during the year. The average monthly restaurant revenues (ARS) increased by
5.3% from R0.865 million last year to R0.911 million this year, largely as a result of positive restaurant comparative sales of 3.45% (2017: 1.82%) and a proportional
increase in revenue from Drive Thru sites opened towards the end of the 2017 financial year. Burger King's total revenue for the year increased by 22.19% from 
R623.5 million in the prior year to R756.2 million in the current year.

Burger King continued to focus on market share growth by actively managing the menu pricing architecture to increase traffic through the stores. A total of 
15.6 million customers were served compared to 13.3 million in the prior year. The resulting increase in revenue was however offset by higher than anticipated food cost
increases, increase in the VAT rate of 1% and the implementation of the Healthy Promotion Levy during the second half of the financial year. This translated to a
decrease in the restaurant EBITDA margin from 9% in the prior year to 6.6% in the current year.

Of significant importance is the improvement of Company EBITDA from a profit of R11.1 million to a profit of R22.9 million in the current financial year.

DUNKIN' DONUTS

Dunkin' Donuts opened its first outlet on 13 October 2016. During the current period Dunkin' Donuts opened 5 outlets bringing the total number of outlets to 11 stores
and 1 drive thru as at 30 June 2018. All the outlets are currently corporate-owned.

The outlets reported revenue of R29.8 million and a gross profit of R11.6 million for the year with over 1.4 million doughnuts sold in the period under review. 
The gross profit percentage of 39% is below the target due to the doughnuts still being imported for the major part of the financial year.

The Restaurant EBITDA loss for the period was R5.3 million, however after head office and marketing costs, a Company EBITDA loss of R24.9 million was reported for the
period compared to a R24.4 million loss for the prior period.

BASKIN-ROBBINS

Baskin-Robbins opened 1 new store during the period. Total revenue for the 6 stores amounted to R12.4 million with a gross profit of R4.9 million. The gross profit
percentage of 39% is below target due mainly to high inventory holding costs in respect of the minimum required flavours for each store.

Restaurant EBITDA for the period amounted to a loss of R0.3 million for the period. Baskin-Robbins reported a Company EBITDA loss for the period of R18.6 million
compared to R14.4 million in the prior period.

SPUR

GPI increased its shareholding in Spur with the acquisition of 330 000 shares for R9.1 million. The shares were acquired on the open market at an average price of
R27.70 per share and increased GPI's effective overall holding in Spur to 17.79% from 17.48% in the prior year. A total dividend of R23.7 million was received during
the period with a related finance charge of R23 million resulting in a R0.7 million reported net profit contribution for the period.

GRAND FOODS MEAT PLANT

Grand Foods Meat Plant is exposed to Burger King indirectly through their agreement with Burger King's main supplier, Vector. As a result of Burger King's 21% increase
in revenue, Grand Foods Meat Plant's revenue increased by 35% from R92 million last year to R124.4 million this year. Cost of sales in the current year increased by
32.8% from R83.9 million to R111.4 million. This is a direct result of higher input costs due to increased food cost. Grand Foods Meat Plant's earnings for the
year resulted in a R3.5 million loss after tax, which was 62% lower than the R9.3 million net loss after tax incurred last year.

MAC BROTHERS CATERING EQUIPMENT

Amidst tough trading conditions experienced in the manufacturing sector, Mac Brothers revenue increased by 7% to R224.2 million (2017: R209.4 million) mainly as a
result of an 87.2% increase in internal sales to Burger King and Dunkin' Brands which collectively contributed R52.3 million (2017: R27.9 million). The operating costs
for the year amounted to R69.7 million which is 17% higher than the operating costs of R59.6 million incurred in the prior year. The increase is mainly due to
increased rental paid during the year from the new lease agreement signed for the rental of office and warehouse space.

The EBITDA for the year of R0.3 million is 83.5% lower than the R1.4 million EBITDA in the prior year. Depreciation for the year of R4.1 million which decreased
slightly by R0.2 million and the interest costs of R4 million decreased by R0.8 million when compared to the prior year.

Mac Brothers recorded a company loss after tax for the year of R5 million, representing a 5.2% decrease from the net loss after tax of R5.3 million in the prior year.

GAMING

SUNWEST

SunWest's revenue for the year increased by 3.3% from R2 478 million last year to R2 560 million this year. Net profit after tax increased by 12.6% to R524.5 million
for the year (2017: R465.9 million).

SUN SLOTS

Sun Slots increased their revenue by 9.5% from R1 019.5 million last year to R1 117 million this year. Sun Slots Net Profit After Tax increased by 31% from 
R92.8 million in the prior year to R122 million in the current year.

OTHER

CENTRAL COSTS

The Group's net central costs for the year amounted to R49.6 million, which is 13% higher than the central costs of R43.8 million last year. This is a direct result of
the increase in debt funding raised in the current year thereby reducing the net finance income of R18.1 million the prior year to a net interest expense of R7.8 million
in the current year.

SHARE CAPITAL

The Company bought back 3.7 million shares during the year at an average price of R2.16.
These shares were subsequently cancelled. No new shares were issued during the year.

TREASURY SHARES

At 30 June 2018 a total of 43.8 million GPI shares were held as treasury shares by the Grand Parade Share Incentive Trust, GPI Management Services and the GPI Women's
BBBEE Empowerment Trust. These entities are controlled by the Group, with the Grand Parade Share Incentive Trust holding 4.98 million treasury shares, GPI Management
Services holding 24 million shares and the GPI Women's' BBBEE Empowerment Trust holding 14.82 million treasury shares.

PREFERENCE SHARES

During the current year, the Group issued 10 000 redeemable preference shares to Standard Bank at an issue price of R25 400 per share. The total preference share
funding raised from this issue amounted to R251.6 million after capital raising fees.

DIRECTORS AND COMPANY SECRETARY 

Dylan Pienaar resigned as an Executive Director on 7 November 2017. Tasneem Karriem resigned as Chief Executive Officer and Director of the Group on 2 April 2018 
and was replaced by Prabashinee Moodley on 8 August 2018. Shaun Barends resigned as Financial Director on the 30 June 2018 and was replaced by Colin Priem, 
previously a Non-Executive Director, on the 1 July 2018. Mrs Lazelle Parton resigned as company secretary with effect from 31 January 2018 and Statucor (Pty) Ltd 
has been appointed as company secretary with effect from the same date.

SUBSEQUENT EVENTS

Disposal of Atlas Gaming Africa

On 29 August 2017, the Group entered into a share swap agreement with DRGT International SARL, for its 4.95% holding in Atlas Gaming Holdings and its 100% holding in
Atlas Gaming Africa in exchange for a 26% stake in DRGT's local wholly-owned subsidiary Infinity Gaming Africa. This swap is subject to certain conditions precedent,
including SARB approval, which was fulfilled in August 2018. Infinity Gaming Africa is an industry-leading gaming systems supplier servicing licensed customers in
Africa and the Indian Ocean islands.

RELATED PARTIES

The Group, in the ordinary course of business, entered into various transactions with related parties consistent with those as reported at 30 June 2017.

PROSPECTS

Over the last 21 years GPI has successfully navigated economic downturns and challenging business environments by holding to its course of being a dividend active,
growth company. It is during these challenging times that GPI turns to the adoption of austerity measures to drive savings that weather these storms. For example,
during this fiscal year, the Group has nurtured young aspirant management staff to grow into leadership positions as part of a carefully crafted succession plan. 
This has given GPI substantial payroll savings and has reduced head office costs significantly.

GPI's gaming assets and shareholding in Spur have both improved substantially and are projecting positive future forecasts. Today, Burger King is positioned to
become one of the biggest QSR brand in Southern Africa, with rapid roll-out of new stores in anticipation of the economy coming out of this recessionary period soon. 
The growth of Burger King enables extensive vertical integration opportunities especially for the meat plant and Mac Brothers.

GPI remains focussed on taking advantage of opportunities to leverage its mature food assets to unlock value, which further enhances its credentials as an 
active investment holding company.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018

                                                                     2018       2017
                                                                   R'000s     R'000s

Revenue                                                         1 144 638    962 998
Cost of sales                                                    (596 362)  (508 724)
Gross profit                                                      548 276    454 274
Operating costs                                                  (578 830)  (515 342)
Loss from operations                                              (30 554)   (61 068)
Profit from equity-accounted investments                          109 360     96 094
Profit on disposal of investments                                       -     91 929
Impairment of property, plant, equipment and intangible assets          -    (18 549)
Impairment of investment                                                -     (8 271)
Impairment of other receivables                                    (9 500)         -
Impairment of loans                                                     -     (4 701)
Depreciation                                                      (59 750)   (66 083)
Amortisation                                                       (5 705)    (4 906)
Profit before finance costs and taxation                            3 851     24 445
Finance income                                                      8 387     31 583
Finance costs                                                     (48 714)   (50 093)
(Loss)/profit before taxation                                     (36 476)     5 935
Taxation                                                          (13 391)     5 018
(Loss)/profit for the year                                        (49 867)    10 953

Other comprehensive (loss)/income
Items that may be reclassified subsequently to profit or loss
Unrealised fair value adjustments on available-for-sale
investments, net of tax                                           (35 303)   (51 099)
Total comprehensive loss for the year                             (85 170)   (40 146)

(Loss)/profit for the year attributable to:
- Ordinary shareholders                                           (50 064)    19 281
- Non-controlling interest                                            197     (8 328)
                                                                  (49 867)    10 953
Total comprehensive loss attributable to:
- Ordinary shareholders                                           (85 367)   (31 818)
- Non-controlling interest                                            197     (8 328)
                                                                  (85 170)   (40 146)

                                                                    Cents      Cents
Basic and diluted basic (loss)/earnings per share                  (11,66)      4,39
Headline and diluted headline loss per share                       (11,18)     (4,59)
Ordinary dividend per share                                         11,50      25,00

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018

                                                                     2018       2017
                                                                   R'000s     R'000s
ASSETS
Non-current assets                                              2 428 528  2 361 016
Investments in jointly controlled entities                        625 882    616 099
Investments in associates                                         376 762    358 157
Available-for-sale investment                                     494 273    520 435
Investment properties                                               7 014      6 821
Property, plant and equipment                                     633 617    575 789
Intangible assets                                                  48 584     44 079
Goodwill                                                           92 508     92 508
Deferred tax assets                                               149 888    147 128
Assets classified as held-for-sale                                      -     40 175
Current assets                                                    355 223    230 023
Inventory                                                          85 804     88 763
Deferred proceeds                                                       -          -
Related party loans                                                21 467     44 774
Trade and other receivables                                       101 706     64 135
Cash and cash equivalents                                         136 287     22 911
Income tax receivable                                               9 959      9 440
Total assets                                                    2 783 751  2 631 214
                                                                
EQUITY AND LIABILITIES
Capital and reserves
Total equity                                                    1 995 855  2 141 147
Ordinary share capital                                            798 586    806 707
Treasury shares                                                  (166 286)  (166 286)
Accumulated profit                                              1 431 892  1 532 361
Available-for-sale reserve at fair value                          (78 347)   (43 044)
Share based payment reserve                                        10 010     11 409
Non controlling-interest                                          (29 557)   (29 754)
Total shareholder's equity                                      1 966 298  2 111 393
Non-current liabilities                                           560 430    337 912
Preference shares                                                 501 939    238 390
Interest-bearing borrowings                                        29 931     67 238
Finance lease liabilities                                          10 578     25 023
Provisions                                                            631      2 792
Deferred tax liabilities                                           17 351      4 469
Liabilities associated with assets held-for-sale                        -          -
Current liabilities                                               257 023    181 909
Preference shares                                                   5 179      2 011
Interest-bearing borrowings                                        37 298      7 403
Finance lease liabilities                                          14 442     14 309
Provisions                                                         13 193     17 833
Trade and other payables                                          148 936    103 877
Bank overdraft                                                     25 603     25 474
Dividends payable                                                  10 416      9 744
Income tax payable                                                  1 956      1 258
Total equity and liabilities                                    2 783 751  2 631 214
                                                               

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
                                                                   Available-
                                   Ordinary                 Accu-    for-sale  Share based         Non-
                                      share   Treasury    mulated  reserve at      payment  controlling      Total
                                    capital     shares    profits  fair value      reserve     interest     equity
                                     R'000s     R'000s     R'000s      R'000s       R'000s       R'000s     R'000s

Balance at 30 June 2016             859 517   (105 971) 1 626 255       8 055        9 636      (28 038) 2 369 454
Total comprehensive income/
(loss) for the year                       -          -     19 281     (51 099)           -       (8 328)   (40 146)
- Profit/(loss) for the year from
continuing operations                     -          -     19 281           -            -       (8 328)    10 953
- Other comprehensive loss                -          -          -     (51 099)           -            -    (51 099)
Dividends declared                        -          -   (113 070)          -            -            -   (113 070)              
Shares cancelled(1)                 (52 810)         -          -           -            -            -    (52 810)
Treasury shares acquired                  -    (69 317)         -           -            -            -    (69 317)
Share based payment reserve
expense                                   -          -          -           -        3 453            -      3 453
Sale of subsidiary                        -          -          -           -            -        6 612      6 612
Treasury shares allocated
to employees                              -      9 002       (105)          -       (1 680)           -      7 217
Balance at 30 June 2017             806 707   (166 286) 1 532 361     (43 044)      11 409      (29 754) 2 111 393
                                    
Total comprehensive income/
(loss) for the year                       -          -    (50 064)    (35 303)           -          197    (85 170)
- Loss for the year from                  -          -    (50 064)          -            -          197    (49 867)
                                          
continuing operations
- Other comprehensive loss                -          -                (35 303)           -            -    (35 303)
Dividends declared                        -          -    (50 405)          -            -            -    (50 405)           
Shares cancelled(1)                  (8 121)         -          -           -            -            -     (8 121)
Share based payment reserve
expense                                   -          -          -           -       (1 399)           -     (1 399)
Balance at 30 June 2018             798 586   (166 286) 1 431 892     (78 347)      10 010      (29 557) 1 966 298 
                                    
Notes
(1) Shares bought back are deducted from share capital at cost.

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
                                                                2018       2017
                                                              R'000s     R'000s
Cash flows from operating activities
Net cash utilised from operations                            (64 231)   (95 787)
Income tax refunded/(paid)                                    (3 090)   (60 501)
Finance income                                                 8 387     31 583
Net cash outflow from operating activities                   (58 934)  (124 705)
Cash flows from investing activities
Acquisition of plant and equipment                          (109 029)   (80 941)
Acquisition of land and buildings                            (27 523)    (7 799)
Acquisition of investment properties                            (193)       (15)
Acquisition of intangibles                                   (10 210)    (8 694)
Proceeds from disposal of property, plant and equipment       71 080     61 862
Proceeds from disposal of investment property                      -     56 000
Loans advanced                                                     -     (6 849)
Loan repayment received                                       13 816      1 128
Investments made                                              (9 141)  (266 555)
Consideration received from the disposal of subsidiaries           -     10 215
Consideration received from the disposal of equity                 
accounted investment                                               -    790 937
Dividends received                                           104 962     87 829
Net cash inflow from investing activities                     33 762    637 118
Cash flows from financing activities
Dividends paid                                               (49 733)  (112 152)
Treasury shares acquired                                           -    (69 317)
Shares bought back for cancellation                           (8 121)   (52 810)
Loans received                                               251 673          -
Repayment of loans                                           (21 730)  (301 754)
Finance costs                                                (33 670)   (36 618)
Net cash inflow/(outflow) from financing activities          138 419   (572 651)
Net increase/(decrease) in cash and cash equivalents         113 247    (60 238)
Cash and cash equivalents at the beginning of the year        (2 563)    57 675
Total cash and cash equivalents at the end of the year       110 684     (2 563)
Total cash and cash equivalents at year end comprises of:    110 684     (2 563)
Cash and cash equivalents                                    136 287     22 911
Overdraft                                                    (25 603)   (25 474)


NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018

1.  ACCOUNTING POLICIES

1.1 Basis of preparation of financial results

The abridged audited Group financial statements for the period ended 30 June 2018 are prepared in accordance with the requirements of the JSE Listings Requirements for
abridged reports, and the requirements of the Companies Act applicable to summarised financial statements. The Listing Requirements require abridged reports to be
prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and to
also, as a minimum, contain the information required by IAS 34 - Interim Financial Reporting.

The abridged Group financial statements do not include all the information required by IFRS for full financial statements and should be read in conjunction with the
2018 audited Group annual financial statements. The accounting policies applied in the preparation of the audited Group annual financial statements, from which the
abridged Group financial statements were derived, are in terms of IFRS and are consistent with the accounting policies applied in the preparation of previous audited
Group financial statements. During the period, various new and revised accounting standards became effective, however, their implementation had no impact on the
results of either the current or prior year.

These abridged Group financial statements are not audited but are extracted from audited information. The audited Group annual financial statements were audited by
Ernst & Young Inc., who expressed an unmodified opinion thereon. The audited Group annual financial statements and the auditor's report thereon are available for
inspection at the Company's registered office. The Directors take full responsibility for the preparation of these abridged Group financial statements and the
financial information has been correctly extracted from the underlying audited Group annual financial statements.

These abridged Group financial statements have been prepared under the supervision of the Group Financial Director, Mr Colin Priem.

                                                                           2018       2017
                                                                         R'000s     R'000s
2.  ASSETS HELD FOR SALE

The assets and liabilities included in assets classified as held-for-
sale are as follows:
Assets
Non-current assets
Investment property (1 Heerengracht)                                          -     40 175
Assets classified as held-for-sale                                            -     40 175
Non-current liabilities
Liabilities associated with assets held-for-sale                              -          -
Net assets                                                                    -     40 175

During the previous financial year the Group dispose of its property situated at 1 Heerengracht for R52.5 million. The transfer of the property was effected on 
18 August 2017. The property was previously disclosed as investment property. Non-current assets held-for-sale are measured at the lower of carrying amount and 
fair value less cost of sale.
                                                                           2018       2017
                                                                         R'000s     R'000s
3.  PROFIT/(LOSS) ON DISPOSAL OF INVESTMENTS

Profit on disposal of Sun Slots                                               -     90 588
Loss on disposal of Grand Linkstate                                           -     (7 900)
Profit on disposal of Grand Sport                                             -      9 241
                                                                              -     91 929
4.  BASIC AND DILUTED EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing the net profit for the year attributable to ordinary equity holders of the Company by the Weighted Average
Number of Ordinary Shares (WANOS) in issue during the year.

Diluted earnings per share amounts are calculated by dividing the net profit for the year attributable to ordinary shareholders by the diluted WANOS in issue.

Headline earnings per share amounts are calculated by dividing the headline earnings for the year attributable to ordinary shareholders by the WANOS in 
issue for the year.

Diluted headline earnings per share amounts are calculated by dividing the headline earnings for the year attributable to ordinary shareholders by the 
diluted WANOS in issue for the year.
                                                                           2018       2017
                                                                         R'000s     R'000s
4.1.  Reconciliation of the (loss)/profit for the year
Basic and diluted (loss)/earnings per share reconciliation
(Loss)/profit for the year                                              (49 867)    10 953
Non-controlling interest                                                   (197)     8 328
(Loss)/profit for the year attributable to ordinary
shareholders                                                            (50 064)    19 281

                                                                         R'000s     R'000s
4.2.  Reconciliation of headline (loss)/earnings for the year
(Loss)/profit for the year attributable to ordinary
shareholders                                                            (50 064)    19 281
(Loss)/profit on sale of investments                                          -    (59 819)
Impairment of investments                                                     -      4 490
Impairment of property, plant and equipment                              (5 671)         -
(Profit)/loss on disposal of property, plant, equipment
and intangibles                                                             200     12 910
Adjustments by jointly-controlled entities                                7 716      3 012
- Impairment of investment                                                7 551      2 889
- Loss on disposal of plant and equipment                                   165        123

Headline (loss)                                                         (48 019)   (20 126)

                                                                           000s       000s
4.3.  Reconciliation of WANOS - net of treasury shares
Shares in issue at beginning of the year                                429 989    461 732
Shares repurchased during year weighted for period held
by Group                                                                      -    (17 020)
Shares repurchased and cancelled during the year
weighted for period held by Group                                          (569)    (7 148)
Shares issued during the year weighted for period in issue                    -      1 271
                                                                        429 420    438 835

                                                                           000s       000s
4.4.  Reconciliation of diluted WANOS - net of treasury shares
WANOS in issue - net of treasury shares                                 429 420    438 835
Effects of dilution from:
- Share options                                                               -          -
Diluted WANOS in issue - net of treasury shares                         429 420    438 835

                                                                          Cents      Cents
4.5.  Statistics
Basic and diluted (loss)/earnings per share                              (11.66)      4.39
Headline and diluted headline loss per share                             (11.18)     (4.59)

5.  SEGMENT ANALYSIS

The chief decision makers are considered to be the members of the GPI Executive Committee, who review the Group's internal reporting firstly by industry and secondly
by significant business unit. The chief decision makers do not review the Group's performance by geographical sector and therefore no such disclosure has been made.
The chief decision makers also reassessed the segments and as a results identified the following segments: Food, Gaming, Group costs and Non-core. Listed below is a
detailed segment analysis:

                                 External       Inter-segment          Operating        Equity accounted                           Net profit/(loss)            Total                   Total
                                  revenue          revenue(1)            costs(2)            earnings               EBITDA               after tax             assets             liabilities
                            2018      2017       2018     2017       2018       2017       2018     2017       2018      2017         2018      2017       2018       2017       2018       2017
                          R'000s    R'000s     R'000s   R'000s     R'000s     R'000s     R'000s   R'000s     R'000s    R'000s       R'000s    R'000s     R'000s     R'000s     R'000s     R'000s

Food                   1 137 969   948 853     52 275   27 919   (552 326)  (463 284)         -        -    (10 718)  (32 119)    (106 203)  (86 123) 1 339 427  1 297 578   (556 629)  (479 264)           
Burger King              774 999   628 897          -        -   (407 421)  (342 633)         -        -     22 876       249      (26 577)  (29 149)   608 019    544 657   (210 585)  (101 918)
Mac Brothers             171 895   181 434     52 275   27 919    (63 229)   (59 627)         -        -     (5 063)   (3 780)      (7 849)   (8 051)    90 612     90 609    (42 807)   (32 577)
Bakery                         -                                   (7 624)         -                         (7 622)                         (8 172)              10 420                (3 514)
Spur                      23 726    16 859          -        -       (140)       (74)         -        -     23 586    16 786          608    (4 939)   499 510    527 672   (255 559)  (288 586)
Grand Food Meat Plant    124 411    92 087          -        -    (14 049)   (12 834)         -        -     (1 063)   (4 598)      (3 490)   (7 979)    57 953     54 747    (32 318)   (51 354)
GFMS                           7         -          -        -          -          -          -        -          7                               4                                          -
Dunkin' Donuts            30 523    24 035          -        -    (36 427)   (31 631)         -        -    (24 857)  (25 460)     (36 244)  (22 389)    53 109     54 978     (7 957)    (3 587)
Baskin-Robbins            12 408     5 541          -        -    (23 436)   (16 485)         -        -    (18 582)  (15 316)     (24 483)  (13 616)    19 804     24 915     (3 889)    (1 242)
Gaming and leisure             -         -          -        -          -        836    109 360  100 743    109 360   101 580      109 360   101 580  1 002 644    974 256          -          -
SunWest                        -         -          -        -          -        836     70 188   70 354     70 188    71 190       70 188    71 190    625 882    616 099          -          -
Sun Slots                      -         -          -        -          -          -     36 621   27 861     36 621    27 861       36 621    27 861    348 205    329 583          -          -
Worcester Casino               -         -          -        -          -          -      2 551    2 528      2 551     2 529        2 551     2 529     28 557     28 574          -          -
Group costs                6 669    13 506     94 130  247 042    (26 504)   (51 463)         -        -    (19 836)   46 037       43 524    15 805    441 680    304 205    260 824    (40 557)
GPI Properties             6 297    10 887     21 359   17 106     13 224     12 684          -        -     19 521    16 826       10 774    (1 978)   187 628    234 208    (73 208)   (83 464)
Central costs                372     2 619     72 771  229 936    (39 728)   (64 147)         -        -    (39 357)   29 211      (54 298)   17 783    254 052     69 997   (187 616)    42 907
Non-core                       -       639          -        -          -     (1 431)         -   (4 649)    (9 500)  (20 064)      (9 500)  (20 309)         -     15 000          -          -
GTM                            -         -          -        -          -          -          -   (4 649)    (9 500)  (17 621)      (9 500)  (17 621)         -     15 000          -          -
Grand Technology               -         -          -        -          -          -          -        -          -    (8 875)           -    (8 875)         -          -          -          -
Grand Sport                    -       639          -        -          -     (1 431)         -        -          -     6 432            -     6 187          -          -          -          -
                       1 144 638   962 998    146 405  274 961   (578 830)  (515 342)   109 360   96 094     69 306    95 434      (49 867)   10 953  2 783 751  2 591 039   (817 453)  (519 821)

1 Heerengracht                 -         -          -        -          -          -          -        -          -         -            -         -          -     40 175          -          -
Held-for-sale                  -         -          -        -          -          -          -        -          -         -            -         -          -     40 175          -          -

(1) Transactions between segments are concluded at arms length.
(2) Certain costs are presented pre elimination of intergroup charges and therefore net profit are after these eliminations.
(3) The income tax expense is based on the net profit before tax and pre elimination of intergroup charges.

6.  FAIR VALUE OF FINANCIAL INSTRUMENTS

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.

Level 2: Techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.

Level 3: Other techniques for which all inputs which have a significant effect on the recorded fair value and are observable, either directly or indirectly.

As at 30 June, the Group held the following instruments measured at fair value:

                                               Level 1  Level 2  Level 3    Total
                                                R'000s   R'000s   R'000s   R'000s
2018
Available-for-sale investment -
Spur(1)                                        217 529        -  270 957  488 486
Available-for-sale investment -
Atlas Gaming                                         -        -    5 787    5 787
Total                                          217 529        -  276 744  494 273

2017
Available-for-sale investment -
Spur(1)                                        228 108        -  286 540  514 648
Available-for-sale investment -
Atlas Gaming                                         -        -    5 787    5 787
Total                                          228 108        -  292 327  520 435

(1) Available-for-sale investment - Spur

The carrying value of the investment in Spur at 30 June 2018 of R488.5 million is made up of the prior years' acquisition price of R559.9 million, the acquisition
during current year of R9.1 million and fair value adjustments of R35.3 million (2017: R56.9 million) (Note 12). The Group's initial investment in Spur is subject to a
trading restriction linked to the Group's empowerment credentials. The restriction expires on 29 October 2019, after which the instrument may be traded without
restriction. The fair value of the investment has been measured by applying a tradability discount of 3% per year remaining on the restriction against the market price
of Spur, as quoted on the JSE. The tradability discount was determined with reference to the agreements which govern the trading restrictions and industry standards
applied to empowerment transactions. As the terms of the trading restrictions are unobservable the instrument has been classified under level 3, had the trading
restrictions not been in place, the instrument would have been classified under level 1. A change of 1.0% in the discount rate used to determine the fair value at the
reporting date would have increased/decreased other comprehensive income after tax by R2.8 million (2017: R2.4 million). There were no additions to level 3 instruments
in the current year.

7.  DIRECTORS EMOLUMENTS
                                                                                       Remu-
                                                                                    neration
                                                                                         and            Social                       Share-
                                                                             Audit     nomi-  Invest-      and                        based
                                  Short-        Long-                     and risk    nation     ment   ethics     Total     Loans     pay-
                                    term         term         Directors       com-      com-     com-     com-     remu-       ad-     ment
                     Salary   benefits(1)    benefits  Bonuses     fees     mittee    mittee   mittee   mittee  neration    vanced  expense
                     R'000s       R'000s       R'000s   R'000s   R'000s     R'000s    R'000s   R'000s   R'000s    R'000s    R'000s   R'000s
2018
Executive directors
H Adams               3 825        1 473          124    4 862        -          -         -       -         -    10 284         -      486
T Karriem(2)          1 620           84          243        -        -          -         -       -         -     1 947         -        -
D Pienaar(3)          1 489           69           72    2 109        -          -         -       -         -     3 739         -        -
S Barends(4)          1 333           70          143      274                                                     1 820                -
Sub-total             8 267        1 696          582    7 245        -          -         -       -         -    17 790         -      486
                      
Non-executive
directors
A Abercrombie             -            -            -        -      195          -        67      10        37       309         -        -
W Geach                   -            -            -        -      212         93         -       -         -       305         -        -
R Hargey                  -            -            -        -      219          -         -       -         -       219         -        -
C Priem                   -            -            -        -      248        143        53      10         -       454         -        -
N Maharaj                 -            -            -        -      246         80        98       -        20       444         -        -
N Mlambo                  -            -            -        -      212          -        67       -         -       279         -        -
Sub-total                 -            -            -        -    1 332        316       285      20        57     2 010         -        -
Total                 8 267        1 696          582    7 245    1 332        316       285      20        57    19 800         -      486

(1) Short-term benefits include medical aid contributions, allowances and fringe benefit tax on interest-free loans.
(2) T Karriem resigned as executive director on 02 April 2018. Amounts disclosed above include remuneration for 11 months.
(3) D Pienaar resigned as executive director on 07 November 2017. Amounts disclosed above include remuneration for 5 months.
(4) S Barends resigned as executive director on 30 June 2018. Amounts disclosed above include remuneration for 12 months.

                                                                                       Remu-
                                                                                    neration
                                                                                         and                               Share-
                                                                             Audit     nomi-  Invest-                       based
                                  Short-        Long-                     and risk    nation     ment    Total     Loans     pay-
                                    term         term         Directors       com-      com-     com-    remu-       ad-     ment
                     Salary   benefits(1)    benefits  Bonuses     fees     mittee    mittee   mittee neration    vanced  expense
                     R'000s       R'000s       R'000s   R'000s   R'000s     R'000s    R'000s   R'000s   R'000s    R'000s   R'000s
2017
Executive directors
H Adams               4 327        1 195          649   10 701        -          -         -        -   16 872     5 251      765
A Keet(2)             1 947        2 818          292    3 000        -          -         -        -    8 057     1 847     (729)
T Karriem(3)          1 143          156          171        -        -          -         -        -    1 470         -      201
D Pienaar             1 808           56          271    1 250        -          -         -        -    3 385       411      289
Sub-total             9 225        4 225        1 383   14 951        -          -         -        -   29 784     7 509      526
                      
Non-executive
directors
N Maharaj                 -            -            -        -      232         75        36        -      343         -        -
N Mlambo                  -            -            -        -      202          -         6        -      208         -        -
C Priem                   -            -            -        -      225        136        24        9      394         -        -
A Abercrombie             -            -            -        -      202          -        24        -      226         -        -
R Hargey                  -            -            -        -      202          -         -        -      202         -        -
W Geach                   -            -            -        -      202         75         -        -      277         -        -
Sub-total                 -            -            -        -    1 265        286        90        9    1 650         -        -
Total                 9 225        4 225        1 383   14 951    1 265        286        90        9   31 434     7 509      526

(1) Short-term benefits include medical aid contributions, allowances and fringe benefit tax on interest-free loans.
(2) A Keet resigned as CEO and executive director of GPI on 03 April 2017.
(3) T Karriem was appointed on 9 September 2016 as a executive director. Amounts disclosed above include remuneration for 10 months.

Equity-based remuneration (GPI share options granted in terms of the Grand Parade Share Incentive Trust)

                     Number of                                   Average                                  Number of
                      unvested                                    market                                   unvested
                         share                                 price per                                      share
                       options    Granted    Vested  Forfeited  share on      Vesting                       options
                       30 June     during    during     during   vesting    price per                       30 June
                          2016   the year  the year   the year      date        share                          2017
2018                      000s       000s      000s       000s         R            R       Date granted       000s
Executive directors
H Adams                  2 251      2 378         -     (1 125)     2.70         3.61  26 September 2017      3 504
T Karriem(1)             1 188        921         -     (2 109)        -         2.61  26 September 2017          -
D Pienaar(2)             1 286      1 027         -     (2 313)        -         2.61  26 September 2017          -
S Barends(3)               174          -         -       (174)        -            -                             -
Sub-total                4 899      4 326         -     (5 721)        -                               -      3 504
                        
                     Number of                                   Average                                  Number of
                      unvested                                    market                                   unvested
                         share                                 price per                                      share
                       options    Granted    Vested  Forfeited  share on      Vesting                       options
                       30 June     during    during     during   vesting    price per                       30 June
                          2015   the year  the year   the year      date        share                          2016
2017                      000s       000s      000s       000s         R            R       Date granted       000s
Executive directors
H Adams                  3 376          -    (1 125)         -      5.50         3.61  01 September 2013      2 251
A Keet(4)                2 005      1 161      (669)    (2 497)     5.54         3.61  01 September 2013          -
T Karriem(5)               620        568         -          -      5.54         3.61  01 September 2013      1 188
D Pienaar                  617        875      (206)         -      5.42         3.61  01 September 2013      1 286
Sub-total                6 618      2 604    (2 000)    (2 497)                                               4 725
                         
(1) T Karriem resigned as executive director on 02 April 2018. All unvested share options are forfeited on an employee's resignation date.
(2) D Pienaar resigned as executive director on 07 November 2017. All unvested share options are forfeited on an employee's resignation date.
(3) S Barends resigned as executive director on 30 June 2018. All unvested share options are forfeited on an employee's resignation date.
(4) A Keet resigned as an executive director on 03 April 2017. All unvested share options are forfeited on an employee's resignation date.
(5) T Karriem was appointed on 09 September 2016 as an executive director.

COMPANY SECRETARY
Statucor (Pty) Ltd
6th Floor, 119 – 123 Hertzog Boulevard,
Foreshore, Cape Town, 8001
(PO Box 3883, Cape Town, 8000)

BUSINESS ADDRESS AND REGISTERED OFFICE
10th Floor, 33 on Heerengracht, Foreshore, Cape Town, 8001
(PO Box 6563, Roggebaai, 8012)

LISTING
JSE Limited
Sector: Financial Services
ISIN: ZAE000119814

TRANSFER SECRETARIES
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue Rosebank, 2196
(PO Box 61051, Marshalltown, 2107)

SPONSORS
PSG Capital (Pty) Ltd
(PO Box 7403, Stellenbosch, 7599)

AUDITORS
Ernst & Young Inc.

ATTORNEYS
Bernadt Vukic Potash & Getz

www.grandparade.co.za

Date: 28/09/2018 05:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Share This Story