Wrap Text
Interim Results For The Six Months Ended 30 September 2018 And Dividend Declaration
HOSKEN PASSENGER LOGISTICS AND RAIL LIMITED
(Previously Niveus Invest 17 Proprietary Limited)
Incorporated in the Republic of South Africa
Registration number: 2015/250356/06
JSE share code: HPR
ISIN: ZAE000255907
("HPLR" or "the Company" or "the Group")
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2018
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 September 2018
Unaudited Reviewed
30 September 30 September Audited
2018 2017(1) 31 March 2018
R'000 R'000 R'000
ASSETS
Non-current assets 1 773 274 1 376 262 1 709 120
Property, plant and equipment 1 503 279 1 347 891 1 462 937
Goodwill 8 451 8 451 8 451
Intangible assets 62 57 78
Investments in associates 23 565 19 466 18 343
Deferred taxation 414 397 414
Other financial asset 237 503 - 218 897
Current assets 755 588 433 180 630 598
Inventories 15 654 17 220 15 714
Other financial asset 237 503 - 237 503
Trade and other receivables 243 122 217 431 67 816
Taxation 1 002 1 256 1 435
Cash and cash equivalents 258 307 197 273 308 130
Total assets 2 528 862 1 809 442 2 339 718
EQUITY AND LIABILITIES
Equity 1 489 918 922 725 1 406 308
Equity attributable to equity holders of the parent 1 450 778 885 780 1 373 693
Non-controlling interest 39 140 36 945 32 615
Non-current liabilities 613 610 529 361 557 397
Borrowings 353 190 274 676 300 887
Post-employment medical benefit liability 62 984 77 958 58 928
Deferred taxation 197 436 176 727 197 582
Current liabilities 425 334 357 356 376 013
Trade and other payables 141 985 76 252 124 720
Financial liabilities - 1 983 -
Current portion of borrowings 153 204 148 320 149 323
Taxation 9 309 15 516 4 340
Provisions 120 836 115 285 97 630
Total equity and liabilities 2 528 862 1 809 442 2 339 718
(1) The comparatives of the Company and its subsidiaries ("Group") have been prepared on the common control accounting method.
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the six months ended 30 September 2018
Unaudited Reviewed
6 months ended 6 months ended Audited
30 September 30 September year ended
2018 2017(1) 31 March 2018
R'000 R'000 R'000
Revenue 816 072 873 526 1 808 406
Other Income 2 714 2 256 4 501
Operating expenses (651 468) (672 066) (1 358 793)
Operating profit 167 318 203 716 454 114
Depreciation and amortisation (60 168) (56 676) (112 076)
Investment income 25 508 7 394 22 310
Share of profits of associates 5 679 3 020 7 283
Finance costs (20 086) (23 219) (39 618)
Profit before taxation 118 251 134 235 332 013
Taxation (34 641) (38 637) (86 619)
Profit for the period 83 610 95 598 245 394
Attributable to:
Equity holders of the parent 77 085 88 264 235 947
Non-controlling interest 6 525 7 334 9 447
83 610 95 598 245 394
(1) The Group's comparatives have been prepared on the common control accounting method.
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
For the six months ended 30 September 2018
Unaudited Reviewed
6 months 6 months
ended ended Audited
30 September 30 September year ended
2018 2017(1) 31 March 2018
R'000 R'000 R'000
Profit for the period 83 610 95 598 245 394
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Cash flow hedging - gains/(losses) - 4 306 (343)
Cash flow hedging - amount capitalised to property, plant and equipment - - 6 633
Taxation relating to cash flow hedging - (1 206) (1 761)
Items that may not be reclassified subsequently to profit or loss
Actuarial gains/(losses) on defined benefit plans - - 16 863
Taxation relating to actuarial gains/(losses) on defined benefit plans - - (4 722)
Total comprehensive income for the period 83 610 98 698 262 064
Attributable to:
Equity holders of the parent 77 085 91 364 252 617
Non-controlling interest 6 525 7 334 9 447
83 610 98 698 262 064
(1) The Group's comparatives have been prepared on the common control accounting method.
RECONCILATION OF HEADLINE EARNINGS
Unaudited Reviewed Audited
6 months ended 6 months ended year ended
30 September 2018 30 September 2017(1) 31 March 2018
R'000 R'000 R'000
Reconciliation of headline earnings Gross Net Gross Net Gross Net
Earnings attributable to equity holders of the parent 77 085 88 264 235 947
IAS 16 (Profit)/loss on disposal of plant and equipment (1 120) (806) (636) (458) (860) (619)
Headline profit 76 279 87 806 235 328
Earnings per share (cents)
Basic 26.58 30.44 81.36
Diluted 26.58 30.44 81.36
Headline earnings per share (cents)
Basic 26.30 30.28 81.15
Diluted 26.30 30.28 81.15
Weighted average number of shares in issue ('000)
Basic 290 000 290 000 290 000
Diluted 290 000 290 000 290 000
Actual number of shares in issue ('000) 290 000 - 290 000
(1) The Group's comparatives have been prepared on the common control accounting method.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 September 2018
Unaudited Reviewed
6 months 6 months
ended ended Audited
30 September 30 September year ended
2018 2017(1) 31 March 2018
R'000 R'000 R'000
Balance at the beginning of the period 1 406 308 829 570 829 570
Shares issued - - 2 900 000
Share issue costs - - (3 538)
Total comprehensive income 83 610 98 698 262 064
Effects of changes in shareholding (1) - - (1 800 000)
Dividends/distribution to shareholders - (5 543) (781 788)
Balance at the end of the period 1 489 918 922 725 1 406 308
(1)The Group's comparatives have been prepared on the common control accounting method.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 September 2018
Unaudited Reviewed
6 months 6 months
ended ended Audited
30 September 30 September year ended
2018 2017(1) 31 March 2018
R'000 R'000 R'000
Cash flows from operating activities 2 859 (5 216) 249 763
Cash generated by operations 45 429 35 489 467 333
Investment income 6 902 7 394 15 132
Finance cost (20 086) (23 218) (36 940)
Taxation paid (29 386) (19 338) (63 776)
Dividends paid - (5 543) (131 986)
Cash flows from investing activities (35 603) (22 351) (97 117)
Dividends received - - 5 000
Acquisition of property, plant and equipment (2) (39 511) (24 346) (104 079)
Proceeds from sale of property, plant and equipment 3 908 1 995 1 962
Cash flows from financing activities (17 079) (63 557) (132 913)
Ordinary shares issued - - 649 802
Other liabilities raised - - (3 538)
Funding raised (2) 60 000 30 000 30 000
Funding repaid (77 079) (93 557) (159 375)
Distribution to shareholders - - (649 802)
(Decrease)/increase in cash and cash equivalents (49 823) (91 124) 19 733
Cash and cash equivalents
At the beginning of the period 308 130 288 397 288 397
At the end of the period 258 307 197 273 308 130
(1) The Group's comparatives have been prepared on the common control accounting method.
(2) R73.2 million (September 2017: R61.3 million; March 2018: R155.9 million) of debt raised in the period related to
instalment sale agreements used to finance bus acquisitions, and have therefore not been included in the cash flow
statement as a cash flow amount.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The results for the six months ended 30 September 2018 have been prepared in accordance with International Financial
Reporting Standards ("IFRS"), the disclosure requirements of IAS 34 - Interim Financial Reporting, the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee, the Financial Reporting Pronouncements as issued by the
Financial Reporting Standards Council, the requirements of the South African Companies Act, No. 71 of 2008 (as amended)
and the Listings Requirements of the JSE Limited.
The accounting policies applied by the Group in preparation of these unaudited condensed consolidated interim financial
statements are consistent with those applied by the Group in its consolidated financial statements for the year ended
31 March 2018. The adoption of new standards that are applicable for this financial year had no impact on the figures
presented. Details of the standards adopted will be provided in the annual financial statements. As required by the
Listings Requirements of the JSE Limited, the Group reports headline earnings in accordance with Circular 4/2018 -
Headline Earnings, as issued by the South African Institute of Chartered Accountants.
These interim financial statements were prepared under the supervision of the Chief Financial Officer, Mr Mark Wilkin CA
(SA) and have neither been audited nor independently reviewed by the Group's auditors.
OPERATING SEGMENTS
The directors have considered the implications of IFRS 8: Operating segments and are of the opinion that the operations of
the Group constitute one operating segment, being the provision of passenger transport services within South Africa.
Resource allocation and operational management is performed on an aggregate basis. Performance is measured based on profit
or loss before tax as shown in internal management reports that are reviewed by the Chief Operating Decision Maker, who is
the Group's Chief Executive Officer.
OTHER FINANCIAL ASSET
On 1 October 2018, R237 503 000 was received as part settlement of the promissory notes ceded to HPLR on the restructure
of the Group and is included in the Statement of Financial Position as a current financial asset at 30 September 2018. The
final instalment of the promissory notes is included as a non-current financial asset at 30 September 2018 and is
receivable on 1 October 2019. The instalments are secured by way of Investec Bank payment obligations and carry interest
at 8.5% compounded annually.
COMMENTARY AND RESULTS
The first six months of operations were significantly impacted by a debilitating five week labour strike and a record
increase in fuel costs. The combination of lost revenue (reflecting a 6.6% decrease in revenue in comparison to the same
period last year), exorbitant hikes in the fuel price due to rising costs in the US$ oil price and a weakening of the
Rand, and the high settlement of an 8.5% average annual wage increase over the next two years, resulted in operating
profits being 17.8% lower than the same period last year.
In addition, there was a surge in political protest action during the period under review which impacted Golden Arrow and
the relevant MyCiTi operations negatively. During this period, six Golden Arrow buses were lost due to arson. Although
September was noticeably less volatile, expectations are that protests will continue and even escalate in the wake of the
impending 2019 elections. To mitigate further losses, early warning systems through improved operational supervision and
close liaison with law enforcement agencies have been implemented.
Management continues to drive efficiencies throughout the Group. The roll-out of Golden Arrow's Automated Fare Collection
(AFC) system was completed in October 2018. The ridership data derived from the automated system will assist management in
instituting further efficiencies across its operations and highlight opportunities across the value chain.
Despite the challenging operational conditions, daily passenger numbers have consistently reflected an upward trajectory
that can inter alia be attributed to declining private car usage as a result of the high fuel price together with the
ailing Metrorail train system and improved ticket controls as a result of the newly implemented AFC system.
During this period, Golden Arrow implemented a 5% interim fares increase and introduced 31 new buses into service as part
of their continuing fleet replacement program.
As part of the overall efficiency drive and in line with the Group's sustainability initiatives, a second solar PV system
was approved and is currently under construction at Golden Arrow's Multimech facility. Similarly, a new bus washing
machine which recycles up to 80% of water used, was constructed at Golden Arrow's Southgate depot and commissioned 1
October 2018.
Construction of the Training and Recruitment Centre has been completed and occupation was taken at the beginning of
September 2018.
Eljosa Travel & Tours were successful in becoming the preferred operator for the Amazing Africa Tour Group in Gauteng and
for this purpose 3 luxury coaches were deployed to the Gauteng region. In total Eljosa added a further 10 vehicles to
their fleet during the period under review.
The Group continues to pursue efficiencies throughout its operations, as well as exploring opportunities to realise its
future growth potential.
STATEMENT OF PROFIT AND LOSS
The remaining notable movement in the statement of profit and loss is the recognition of R 18.6 million in investment
revenue relating to interest earned on the promissory notes for the six months ended 30 September 2018.
STATEMENT OF FINANCIAL POSITION AND CASH FLOWS
The increase in property, plant and equipment is largely due to the acquisition of R 73.2 million of buses across the
Group, which were financed through instalment sale agreements, and as such additions are shown net of these borrowings
raised in the statement of cash flows.
CHANGES IN DIRECTORATE
There were no changes in directorate during the period under review.
ORDINARY AND SPECIAL DIVIDENDS TO SHAREHOLDERS
The directors have approved and declared an interim ordinary dividend of 14 cents (gross) per HPLR share for the six
months ended 30 September 2018 from income reserves.
In addition to the interim dividend, the directors of HPLR have approved and declared a special dividend of 75 cents
(gross) per HPLR share from distributable reserves. From an exchange control and JSE perspective this dividend constitutes
a "special dividend". SARB approval has been obtained for the declaration of the special dividend.
The salient dates for the payment of these dividends are as follows:
Announcement date Wednesday, 21 November 2018
Last day to trade cum dividend Tuesday, 11 December 2018
Trading ex-dividend commences Wednesday, 12 December 2018
Record date Friday, 14 December 2018
Payment date Tuesday, 18 December 2018
Share certificates may not be dematerialised or rematerialised between Wednesday, 12 December 2018 and Friday, 14 December
2018, both days inclusive.
In terms of legislation applicable to Dividends Tax ("DT") the following additional information is disclosed:
- The special dividend and the interim ordinary dividend shall each constitute a "dividend" as defined in the Income Tax
Act, 58 of 1962.
- The local DT rate is 20%.
- The number of ordinary shares in issue at the date of the declaration is 290 000 000.
- The DT amounts to 2.8 cents per share for the interim ordinary dividend and 15 cents per share for the special dividend.
- The net local dividend amount is 11.2 cents per share for the ordinary interim dividend and 60 cents per share for the
special dividend for all shareholders who are not exempt from the DT.
- HPLR's income tax reference number is 9754/276/16/1.
In terms of DT legislation, any DT amount due will be withheld and paid over to the South African Revenue Service by a
nominee company, stockbroker or Central Securities Depository Participant (collectively "regulated intermediary") on
behalf of shareholders. All shareholders should declare their status to their regulated intermediary as they may qualify
for a reduced DT rate or exemption.
For and on behalf of the board of directors
FE Meyer ML Wilkin
Chief Executive Officer Chief Financial Officer
21 November 2018
Directors:Y Shaik* (Chairman),TG Govender* (Deputy Chairman),FE Meyer (Chief Executive Officer),ML Wilkin (Chief Financial Officer)
L Govender (Lead Independent Director) #*,NB Jappie #*,KF Mahloma #*.* Non-executive # Independent.
Company Secretary: HCI Managerial Services Proprietary Limited (Registration number 1996/017874/07),Suite 801,76 Regent Road,Sea Point,
Cape Town, 8005 (PO Box 5251, Cape Town, 8000).
Auditors:BDO Cape Incorporated,6th Floor, 123 Hertzog Boulevard,Foreshore, Cape Town, 8001 (PO Box 3883, Cape Town, 8000).
Transfer Secretaries:Computershare Investor Services Proprietary Limited (Registration number 2004/003647/07),Rosebank Towers
15 Biermann Avenue,Rosebank, 2196 (PO Box 61051, Marshalltown, 2107).
Sponsor:PSG Capital Proprietary Limited (Registration number 2006/015817/07),1st Floor, Ou Kollege,35 Kerk Street,Stellenbosch, 7600
(PO Box 7403, Stellenbosch, 7599) and at 2nd Floor, Building 3, 11 Alice Lane, Sandhurst,Sandton, 2196 (PO Box 650957, Benmore, 2010).
Date: 21/11/2018 11:30:00 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
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