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HOSKEN CONSOLIDATED INVESTMENTS LIMITED - Unaudited condensed consolidated results for the six months ended 30 September 2018

Release Date: 21/11/2018 16:48
Code(s): HCI     PDF:  
 
Wrap Text
Unaudited condensed consolidated results
for the six months ended 30 September 2018

HOSKEN CONSOLIDATED INVESTMENTS LIMITED
Incorporated in the Republic of South Africa
Registration number: 1973/007111/06
Share code: HCI
ISIN: ZAE000003257
("HCI" 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
                                                              Unaudited     Unaudited       Audited
                                                           30 September  30 September      31 March
                                                                   2018          2017          2018
                                                                  R'000         R'000         R'000
                           
ASSETS                  
Non-current assets                                           63 718 883    62 849 188    61 902 246 
Property, plant and equipment                                25 469 438    25 321 070    24 913 188 
Investment properties                                        10 216 336     9 022 356     9 587 532 
Goodwill                                                      4 772 436     4 791 000     4 700 758 
Interest in associates and joint arrangements                 2 089 267     1 587 342     1 719 947 
Other financial assets                                        1 445 320     1 274 661     1 324 206 
Intangibles                                                  18 721 730    19 584 845    18 691 786 
Deferred taxation                                               493 083       575 459       487 352 
Operating lease equalisation asset                               97 855        69 765        96 628 
Long-term receivables                                           413 418       622 690       380 849 
Current assets                                                9 304 212     9 776 811     8 090 494 
Inventories                                                   1 194 690       956 496       939 711 
Programme rights                                                809 605       929 956       870 674 
Other financial assets                                           30 782        41 099        18 317 
Trade and other receivables                                   2 847 087     3 457 104     2 478 554 
Taxation                                                         55 645       105 753        59 433 
Bank balances and deposits                                    4 366 403     4 286 403     3 723 805 
Disposal group assets held for sale                              85 721        87 117       329 473 
Total assets                                                 73 108 816    72 713 116    70 322 213 
                  
EQUITY AND LIABILITIES                  
Equity                                                       36 290 729    37 781 006    35 661 005 
Equity attributable to equity holders of the parent          15 868 482    16 390 408    15 273 850 
Non-controlling interest                                     20 422 247    21 390 598    20 387 155 
Non-current liabilities                                      24 300 574    24 497 016    24 864 963 
Deferred taxation                                             7 663 797     7 921 077     7 595 270 
Long-term borrowings                                         15 732 113    15 780 980    16 275 305 
Operating lease equalisation liability                          245 886       221 728       242 094 
Provisions                                                      262 612       216 098       249 247 
Other                                                           396 166       357 133       503 047 
Current liabilities                                          12 512 531    10 435 094     9 691 070 
Trade and other payables                                      3 406 770     3 331 500     3 036 220 
Current portion of borrowings                                 4 974 206     3 294 215     3 857 154 
Taxation                                                        150 157       176 411       171 331 
Provisions                                                      356 534       382 453       394 672 
Bank overdrafts                                               3 465 120     3 070 755     2 033 702 
Other                                                           159 744       179 760       197 991 
Disposal group liabilities held for sale                          4 982             -       105 175 
Total equity and liabilities                                 73 108 816    72 713 116    70 322 213 
Net asset carrying value per share (cents)                       18 476        18 513        17 785


CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS
                                                                            Unaudited     Unaudited
                                                                         30 September  30 September
                                                                      %          2018          2017*
                                                                 change         R'000         R'000
                           
Revenue                                                                     7 587 961     7 246 545 
Net gaming win                                                              4 828 538     4 513 033 
Income                                                             5.6%    12 416 499    11 759 578 
Expenses                                                                   (9 393 740)   (8 900 449)
EBITDA                                                             5.7%     3 022 759     2 859 129 
Depreciation and amortisation                                                (768 307)     (714 688)
Operating profit                                                            2 254 452     2 144 441 
Investment income                                                             125 378       186 789 
Finance costs                                                                (926 303)     (920 400)
Share of profits of associates and joint arrangements                          28 680        78 088 
Investment surplus                                                             11 232         1 772 
Fair value adjustments of investment properties                              (119 108)            -
Asset impairments                                                              (5 225)       (8 026)
Fair value adjustments of financial instruments                                27 740             -
Impairment of goodwill and investments                                              -          (412)
Profit before taxation                                            (5.8%)    1 396 846     1 482 252 
Taxation                                                                     (437 755)      (96 029)
Profit for the period from continuing operations                              959 091     1 386 223 
Discontinued operations                                                       (26 453)      (75 493)
Profit for the period                                                         932 638     1 310 730 
                  
Attributable to:                   
Equity holders of the parent                                                  460 423       584 694 
Non-controlling interest                                                      472 215       726 036 
                                                                              932 638     1 310 730 
                  
* Restated                  


CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
                                                                            Unaudited     Unaudited
                                                                         30 September  30 September
                                                                                 2018          2017
                                                                                R'000         R'000
                  
Profit for the period                                                         932 638     1 310 730 
Other comprehensive income:            
Items that may subsequently be reclassified to profit or loss             
Foreign currency translation differences                                      348 970        37 117 
Reclassification of foreign currency differences on disposal                        -           723 
Cash flow hedge reserve                                                        72 931       (53 733)
Items that may not subsequently be reclassified to profit or loss             
Revaluation of land and buildings                                             118 151             -
Total comprehensive income                                                  1 472 690     1 294 837 
            
Attributable to:             
Equity holders of the parent                                                  813 308       581 123 
Non-controlling interest                                                      659 382       713 714 
                                                                            1 472 690     1 294 837


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                                            Unaudited     Unaudited
                                                                         30 September  30 September
                                                                                 2018          2017
                                                                                R'000         R'000
                  
Balance at the beginning of the period*                                    35 643 390    36 119 875 
Share capital and premium            
Treasury shares released                                                            -        27 343 
Current operations            
Total comprehensive income                                                  1 472 690     1 294 837 
Equity-settled share-based payments                                             8 024         5 783 
Acquisition of subsidiaries                                                         -        (1 092)
Disposal of subsidiaries                                                        3 523         7 750 
Effects of changes in holding                                                 (66 075)    1 005 991 
Dividends                                                                    (770 823)     (679 481)
Balance at the end of the period                                           36 290 729    37 781 006 
            
* Accumulated profits and non-controlling interest as at 1 April 2018 restated by R14.716 million 
  and R2.899 million respectively for the adoption of IFRS 9


RECONCILIATION OF HEADLINE EARNINGS
                                                                          Unaudited               Unaudited
                                                                      30 September 2018       30 September 2017
                                                              %       Gross         Net       Gross         Net 
                                                         change       R'000       R'000       R'000       R'000

Earnings attributable to equity holders of the parent    (21.3%)                460 423                 584 694 
                              
Impairment of goodwill                                               16 604       7 043           -           - 
Losses on disposal of property                                          201         145           -           - 
Losses on disposal of plant and equipment                             2 676       1 456       2 475         558 
Impairment of property, plant and equipment                           5 225       2 180      24 415      18 508 
Foreign currency translation reserve recycled                             -           -         723         307 
(Gains)/losses from disposal of subsidiaries                         (3 278)     (2 012)         14       1 542 
Gain on disposal of associates and joint arrangements               (11 232)     (4 765)          -           - 
Impairment of associates and joint arrangements                           -           -         412         151 
Fair value adjustment to investment property                        119 108      35 178           -           - 
Remeasurements included in equity-accounted earnings 
  of associates and joint arrangements                               (1 060)       (529)    (58 489)    (55 594)
Headline profit                                           (9.3%)                499 119                 550 166 
                              
Basic earnings per share (cents)                               
Earnings                                                 (19.0%)                 536.11                  661.94 
Continuing operations                                                            551.84                  723.22 
Discontinued operations                                                          (15.73)                 (61.28)
                              
Headline earnings per share (cents)                       (6.7%)                 581.17                  622.85 
Continuing operations                                                            591.04                  662.09 
Discontinued operations                                                           (9.87)                 (39.24)
                              
Weighted average number of shares in issue ('000)                                85 882                  88 330 
Actual number of shares in issue at the end of the 
  period (net of treasury shares) ('000)                                         85 886                  88 533 
                              
Diluted earnings per share (cents)                               
Earnings                                                 (18.8%)                 533.24                  657.03 
Continuing operations                                                            548.89                  717.86 
Discontinued operations                                                          (15.65)                 (60.83)
                              
Headline earnings per share (cents)                       (6.5%)                 578.06                  618.23 
Continuing operations                                                            587.88                  657.18 
Discontinued operations                                                           (9.82)                 (38.95)
                              
Weighted average number of shares in issue ('000)                                86 344                  88 991


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                            Unaudited     Unaudited
                                                                         30 September  30 September
                                                                                 2018          2017
                                                                                R'000         R'000
                  
Cash flows from operating activities                                          661 708        27 463 
Cash generated by operations                                                3 185 951     3 020 949 
Net finance costs                                                            (861 296)     (803 872)
Changes in working capital                                                   (459 643)   (1 110 634)
Taxation paid                                                                (431 944)     (401 547)
Dividends paid                                                               (771 360)     (677 433)
            
Cash flows from investing activities                                       (1 718 873)   (1 369 942)
Business combinations and disposals                                           (11 908)       15 934 
Investments acquired                                                         (261 886)      (64 566)
Dividends received                                                             52 090        54 024 
Decrease in loans and receivables                                              13 353        12 752 
Intangible assets acquired                                                    (27 720)      (26 214)
Investment properties             
- Additions                                                                  (309 297)     (520 667)
- Disposals                                                                         -        26 900 
Property, plant and equipment             
- Additions                                                                (1 206 324)     (878 906)
- Disposals                                                                    32 819        10 801 
            
Cash flows from financing activities                                          208 269       881 406 
Ordinary shares issued and treasury shares released                                 -        26 591 
Other liabilities raised                                                          632             -
Transactions with non-controlling shareholders                                (62 700)      980 979 
Net funding raised/(repaid)                                                   270 337      (126 164)
            
Decrease in cash and cash equivalents                                        (848 896)     (461 073)
Cash and cash equivalents             
At the beginning of the period                                              1 721 499     1 673 363 
Foreign exchange differences                                                   33 727         3 358 
At the end of the period                                                      906 330     1 215 648 
            
Bank balances and deposits                                                  4 366 403     4 286 403 
Bank overdrafts                                                            (3 465 120)   (3 070 755)
Cash in disposal groups held for sale                                           5 047             -
Cash and cash equivalents                                                     906 330     1 215 648


SEGMENTAL ANALYSIS                                        
                                                         Unaudited                   Unaudited
                                                      six months ended           six months ended
                                                     30 September 2018          30 September 2017*
                                                             Net gaming                  Net gaming
                                                  Revenue           win       Revenue           win
                                                    R'000         R'000         R'000         R'000
                                    
Media and broadcasting                          1 247 598             -     1 184 936             - 
Gaming and hotels**                             2 895 865     4 828 538     2 837 656     4 513 033 
Transport                                         816 072             -       849 640             - 
Properties                                        288 212             -       241 688             - 
Mining                                            733 290             -       610 552             - 
Branded products and manufacturing              1 595 751             -     1 513 314             - 
Other                                              11 173             -         8 759             - 
Total                                           7 587 961     4 828 538     7 246 545     4 513 033

                                                           EBITDA                Profit before tax
                                                         Unaudited                  Unaudited 
                                                      six months ended           six months ended
                                                        30 September               30 September       
                                                     2018          2017*         2018          2017*
                                                    R'000         R'000         R'000         R'000
                                    
Media and broadcasting                            173 033       136 973       104 984        58 373 
Gaming and hotels**                             2 286 834     2 265 083     1 094 408     1 216 927 
Transport                                         168 246       194 043       119 179       129 076 
Properties                                        130 600       102 154        46 322        36 611 
Mining                                            237 759       150 797       194 630       110 373 
Branded products and manufacturing                 92 359        60 200         8 558        (8 645)
Other                                             (66 072)      (50 121)     (171 235)      (60 463)
Total                                           3 022 759     2 859 129     1 396 846     1 482 252

                                                                                Headline earnings
                                                                                    Unaudited 
                                                                                 six months ended
                                                                                   30 September
                                                                                 2018          2017
                                                                                R'000         R'000
                  
Media and broadcasting                                                         23 156        12 486 
Gaming and hotels**                                                           391 552       496 068 
Transport                                                                      57 605        84 623 
Properties                                                                     31 922        26 944 
Mining                                                                        141 470        79 884 
Branded products and manufacturing                                              9 297        (5 586)
Other                                                                        (155 883)     (144 253)
Total                                                                         499 119       550 166 
            
*  Restated
** Non-casino gaming operations' results reclassified to the gaming and hotels segment in the 
   current and prior period            


NOTES AND COMMENTARY
 
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, the 
SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the requirements 
of the Companies Act of South Africa, No. 71 of 2008, and the Listings Requirements of the JSE 
Limited (JSE). 

The accounting policies applied by the group in the preparation of these 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, except for the adoption of IFRS 9 and 
IFRS 15 in the current period, which did not have a material impact on the results of the company. 
Opening retained earnings and opening non-controlling interest in the current period were 
decreased by R14.7 million and R2.9 million, respectively, in respect of the adoption of IFRS 9: 
Financial Instruments. This adjustment was made in accordance with the transitional provisions of 
IFRS 9 in terms of which comparative results do not need to be restated. As required by the JSE 
Listings Requirements, the Company reports headline earnings in accordance with Circular 4/2018: 
Headline Earnings as issued by the South African Institute of Chartered Accountants.

These financial statements were prepared under the supervision of the financial director, 
Mr TG Govender, B.Compt (Hons) and have neither been audited nor independently reviewed by the 
group's auditors.

RESTATEMENT OF PRIOR PERIOD RESULTS

Gaming and hotels
The group has established during the period under review that it had treated the share of net 
gaming win paid to site owners in its limited payout operations incorrectly in prior periods. 
Net gaming win was previously recognised net of payments made to site owners in respect of their 
share of net gaming win and certain costs recovered reflected in revenue. In accordance with advice 
received from its auditors, the group wishes to restate its prior period results to correctly 
reflect the nature of the net gaming win share paid to site owners and certain costs recovered 
from these parties. The following restatement to the prior comparative period results has been 
recognised:

Decrease in revenue                                                                    R4.5 million
Increase in net gaming win                                                           R234.2 million
Increase in expenses                                                                 R229.7 million

The restatement does not affect earnings per share or headline earnings per share and no 
restatement to equity opening balances is required.
 
DISCONTINUED OPERATIONS AND DISPOSAL GROUPS HELD FOR SALE 

Media and broadcasting
The results of Silverline Three Sixty and certain non-core offshore operations are included in the 
media and broadcasting segment and are included in discontinued operations in the current and prior 
periods respectively. Disposal group assets of R20 million and liabilities of R5 million relate to 
these operations. 

Branded products and manufacturing
The board of Deneb Investments resolved during the prior comparative period to significantly 
rationalise its Wineland Textiles division, as well as its Seartec digital and electronic equipment 
division. The results of the discontinued operations of these divisions are included in 
discontinued operations in the income statement in the current and prior periods.

Gaming and hotels
The assets acquired by Tsogo Sun Holdings upon the acquisition of Hospitality Property Fund 
included properties held for sale and are consequently included in disposal group assets held for 
sale. The carrying value of these properties totalled R65 million at 30 September 2018.

The results of discontinued operations were as follows (R'million):
                                                   Branded products and
                                     Media and   manufacturing textiles
                                  broadcasting           and electronic             Gaming non-core
                           non-core operations      equipment divisions                  operations
(Loss)/profit after tax                    (29)                       1                           -
Profit on disposal                           -                        -                           2

BUSINESS COMBINATIONS

Gaming and hotels
Vukani Gaming Corporation concluded agreements with TAB-Austria (TAB) to acquire the intellectual 
property rights to the Golden Island Casino Limited payout machines for Africa, which include 
the processes, formulae, methods and information controlled and owned by TAB, currently being 
manufactured by TAB. The effective date was 21 September 2018. The acquired business contributed no 
revenue or earnings to the group for the period to 30 September 2018. The provisional fair value of 
net assets acquired is as follows: 

                                                                                          R'million
Intangible assets                                                                                49 
Net assets acquired                                                                              49 
Deferred cash purchase consideration                                                            (36)
Cash outflow on acquisition of business                                                          13

No provisional goodwill arose on the acquisition.

RESULTS

GROUP INCOME STATEMENT AND SEGMENTAL ANALYSIS

Media and broadcasting
eMedia recorded an increase in revenue of 5%. A 6% increase in advertising revenue was recorded in 
a difficult television advertising environment. Licence fee revenue increased by 5% due to the annual 
contractual increase. Property and facility and content revenue remained stable. EBITDA increased 
by 26%, assisted by a decrease of 13% and 4% in signal distribution and employee costs, 
respectively, and general cost control. EBITDA includes losses of R84 million in respect of the 
multi-channel and OVHD businesses, which increased revenue from R22 million to R58 million in the 
current period, but remain in a start-up phase. To be noted is that active set top boxes have 
increased from 1 008 114 in the prior comparative period to 1 432 521 at this period-end. 
Profit before tax increased by R47 million (80%) and headline earnings increased by a similar margin. 
Discontinued operations, consisting significantly of Silverline Three Sixty, incurred losses of 
R29 million, including the impairment of goodwill of R17 million. 

Gaming and hotels
The alternative gaming operations of Niveus Investments were acquired by Tsogo Sun effective end 
of November 2017. Due to this amalgamation of the group's gaming operations the results of Niveus 
Investments' previously held alternative gaming operations have been incorporated into those of 
Tsogo Sun in the gaming and hotels segment for the current and prior periods.

Revenue in respect of gaming and hotels increased by 2%. Overall net gaming win increased by 7%, 
with casino gaming win increasing by 3%. Alternative gaming net gaming win increased by 19%. 
SA hotel revenue was stagnant, significantly affected by the Western Cape drought. Offshore hotel 
revenue increased by 10% following the opening of the StayEasy Maputo. EBITDA increased by 1%, 
with casino gaming and hotels largely stagnant. Profit before tax decreased by 10%. A net downward 
revaluation of investment properties in the amount of R119 million was recognised by HPF in respect 
of two hotel properties in Cape Town and one in Gauteng following a reassessment of expected future 
trading and is included in profit before tax. Contribution to headline earnings decreased by 21% 
to R392 million. The prior period included an effective share of R133 million of a deferred tax 
liability reversal following the sale of certain hotel properties to HPF. Excluding the effect of 
this reversal results in an increase in contribution to headline earnings of approximately 8%.

The number of active machines in Vukani has increased by 2% to 6 033 during the current period. 
The number of electronic bingo terminals increased by 18% to 3 410 during the current period.

Transport
Transport revenue decreased by 4%, following a prolonged bus driver strike during April and 
May 2018. EBITDA decreased by 13%. Above inflation wage increases at 8.5% and significantly increased 
fuel costs outweighed savings in supplies and maintenance costs, resulting in a R26 million decrease 
in EBITDA. Profit before tax reduced by only 8% following an increase of R19 million in interest 
income as a result of the promissory notes held. Headline earnings was affected by the group's 
reduced effective interest in HPL&R of 74%, the dilution resulting in a loss of approximately 
R20 million in headline earnings. 

Properties
Properties' revenue increased by 19% due to new development revenue of R15 million from Whale 
Coast Village Mall and R10 million from Shell House, with annual escalations and tenanting 
efficiencies in the rest of the portfolio responsible for the remaining increase. EBITDA increased 
by 28%, with EBITDA margin increasing slightly to 45% following further tenanting in the Westlake 
and Monte Circle precincts in the current year. EBITDA gains were somewhat off-set by an increase 
in finance charges, originating from the launch of Shell House and Whale Coast Village Mall only in 
the second half of the previous year.

Mining
Increased revenue was recorded at the Palesa and Mbali Collieries. However, sales volumes at 
Palesa decreased by 46 000 tons (4%), mainly attributable to mining contractor inefficiencies. 
Revenue increased by 49% and sales volumes by 9% to 502 000 tons at the Mbali Colliery. 
In addition, export sales prices achieved at the Mbali Colliery were 30% higher than the prior 
comparative period. EBITDA increased by 58%, mainly as a result of the increase in sale volumes 
and the increase in the price of export coal achieved at the Mbali Colliery. EBITDA margins at 
the Palesa Colliery increased from 18% to 19% and at the Mbali Colliery from 34% to 47% compared 
to the prior comparative period. Headline earnings increased in line with the profit before tax 
increase, adjusting for income tax.

Branded products and manufacturing
Branded products and manufacturing increased revenue by 5%, with growth attributable mostly to 
their industrial operations. Revenue in Formex increased by R111 million, off-set to some extent 
by a reduction in the textile division. EBITDA increased by 53%. Foreign exchange gains improved 
by R17 million compared to the prior comparative period, however most manufacturing businesses 
faced reduced gross margins. In addition to factors mentioned under EBITDA, an increase in finance 
costs and depreciation reduced profit before tax. R2 million in impairments included in profit 
before tax were reversed to arrive at headline earnings.

Other
Losses before tax increased by R111 million compared to the prior comparative period. The increase 
in losses is partly attributable to equity earnings in respect of Impact Oil and Gas in the prior 
comparative period being R43 million, as compared to a loss of R5 million in the current period, 
the prior period including an effective R53 million profit on part disposal of an exploration 
licence. In addition, interest earned by La Concorde reduced by R45 million following its 
distribution of cash and transfer of promissory notes during the group's restructure of its 
interest in HPL&R. Included in the current period's losses before tax and headline loss is 
R111 million head office finance costs, R13 million in costs relating to the group's newly 
established internal audit function and the remainder head office and other overheads of the 
company, Niveus and La Concorde.

Notable items on the consolidated income statement include:

Consolidated investment income decreased by R28 million as a result of the distribution of cash by 
La Concorde during the restructure of the group's interest in HPL&R and reduced interest earned on 
promissory notes recognised in respect of the sale of La Concorde's operational assets in 
October 2016. R34 million less interest was earned by Tsogo Sun during the period following reduced 
average cash balances. 

Finance costs increased only marginally, with increased finance costs in properties off-setting 
savings in gaming and hotels.

Profit from associates and joint ventures includes R3 million profit from BSG Africa, R25 million 
profit from International Hotel Properties and Redefine BDL, R6 million profit from Sibanye in HPL&R 
and R5 million in losses from IOG.

Investment surplus consists of a profit on disposal of associate Da Vinci Media by eMedia.

The downward fair value adjustments of investment properties of R119 million are all in respect of 
properties held by HPF.

Fair value adjustments of financial instruments consist of ineffective portions of foreign exchange 
and interest rate hedges at Tsogo Sun and head office.

The average taxation rate, including once-off items, equalled 6.5% in the prior comparative period 
due to the reversal of R307 million in deferred tax liabilities in Tsogo Sun upon the sale of 
certain hotel properties to HPF in the current period. The average taxation has normalised in the 
current period.

Headline earnings decreased by 9.3%; however, excluding the impact of the favourable deferred 
tax reversal in the prior comparative period, headline earnings would have shown an increase of 
approximately 19%. Headline earnings per share decreased by 6.7%. The weighted average number of 
shares in issue in the prior period of 88 330 000 was reduced to 85 882 000 in the current period 
due to the conclusion of a repurchase of 2.7 million shares during March 2018, which resulted in 
the discrepancy between the gross and per share profit increase.

GROUP STATEMENT OF FINANCIAL POSITION AND CASH FLOW

Group long-term borrowings at 30 September 2018 comprise central borrowings of R784 million, 
central investment property-related borrowings of R1 883 million, borrowings in Tsogo Sun of 
R11 979 million and the remainder in other operating subsidiaries. Included in the current portion 
of borrowings is R1 923 million central borrowings and R2 219 million in short-term borrowings in 
Tsogo Sun. Current central borrowings of R1 500 million is due to be refinanced in the first half 
of the 2020 financial year. Bank overdraft facilities include R2 268 million in Tsogo Sun, 
R779 million at head office and R367 million in Deneb.

Included in the prior comparative period changes in working capital was R376 million paid in 
anticipation of the implementation of a repurchase of shares by the group. Included in cash flows 
from investing activities is net expenditure on investment properties of R309 million and 
R1 174 million on property, plant and equipment, of which R1 003 million was incurred by 
Tsogo Sun. Included in cash flows from financing activities is net funding raised during the year 
of R271 million. 

Shareholders are referred to the individually published results of eMedia Holdings Limited, 
Tsogo Sun Holdings Limited, Niveus Investments Limited, Deneb Investments Limited and Hosken 
Passenger Logistics and Rail Limited for further commentary on the media and broadcasting; gaming 
and hotels; branded products and manufacturing; and transport operations.

CHANGES IN DIRECTORATE

There were no changes in directorate during the period under review.

DIVIDEND TO SHAREHOLDERS

The directors of HCI have resolved to declare an interim ordinary dividend number 58 of 55 cents 
(gross) per HCI share for the six months ended 30 September 2018 from income reserves. The salient 
dates for the payment of the dividend are as follows:

Last day to trade cum dividend                                            Tuesday, 11 December 2018
Commence trading ex dividend                                            Wednesday, 12 December 2018
Record date                                                                Friday, 14 December 2018
Payment date                                                              Tuesday, 18 December 2018

No share certificates may be dematerialised or rematerialised between Wednesday, 12 December 2018 
and Friday, 14 December 2018, both dates inclusive.

In terms of legislation applicable to Dividends Tax (DT) the following additional information is 
disclosed:

- The local DT rate is 20%.
- The number of ordinary shares in issue at the date of this declaration is 92 814 648.
- The DT amounts to 11 cents per share.
- The net local dividend amount is 44 cents per share for all shareholders who are not exempt 
  from the DT.
- Hosken Consolidated Investments Limited's income tax reference number is 9050/177/71/7.

In terms of the 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 the "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 


JA Copelyn                                 TG Govender
Chief Executive Officer                    Financial Director

Cape Town 
21 November 2018


Directors: 
JA Copelyn (Chief Executive Officer), TG Govender (Financial Director), Y Shaik, MSI Gani*, 
MF Magugu*, NM Mhlangu**, ML Molefi*, VE Mphande* (Chairman), JG Ngcobo*, R Watson* 
*  Independent Non-Executive 
** Non-Executive

Website address: 
www.hci.co.za

Company secretary: 
HCI Managerial Services Proprietary Limited

Registered office: 
Suite 801, 76 Regent Road, Sea Point, Cape Town, 8005
PO Box 5251, Cape Town, 8000
Telephone: 021 481 7560
Telefax: 021 434 1539

Auditors: 
Grant Thornton Johannesburg Partnership
@Grant Thornton, Wanderers Office Park, 52 Corlett Drive, Illovo, 2196
Private Bag X10046, Sandton, 2146

Transfer secretaries: 
Computershare Investor Services Proprietary Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
PO Box 61051, Marshalltown, 2107

Sponsor: 
Investec Bank Limited
100 Grayston Drive, Sandton, Sandown, 2196



Date: 21/11/2018 04:48:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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