GRAND PARADE INVESTMENTS LIMITED CONDENSED
UNAUDITED FINANCIAL
2021 STATEMENTS FOR THE PERIOD ENDED
31 DECEMBER 2021
Revenue from continuing operations
has decreased by 16% to
R49.4 million
Net Profit After Tax (NPAT)
increased by R8.8 million from
R7.7 million to R16.5 million
Group EPS - increased by 4.33c
Group HEPS - increased by 5.76c
Declared 88 cents dividend amounting to R413.6 million
Debt reduced by R102 million
during the period
SALIENT FEATURES
CONTENTS
Introduction | 4 |
Consolidated Statement of Comprehensive Income | 12 |
Consolidated Statement of Financial Position | 14 |
Consolidated Statement of Changes in Equity | 15 |
Consolidated Statement of Cash Flows | 16 |
Notes to the Consolidated Annual Financial Statements | 17 |
GRAND PARADE INVESTMENTS LIMITED CONDENSED UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2021 | 3 |
INTRODUCTION
GPI continued its positive momentum in unlocking value for its stakeholders in the six months ended 31 December 2021.
The most significant development during the period was the completion of the sale of Burger King South Africa and Grand Foods Meat Plant on 3 November 2021. The proceeds from this sale enabled GPI to reduce debt by R102 million during the period and declared a dividend of 88c per share, the largest in GPI's history. This has left GPI in a strong financial position with gross debt of R140 million and net debt of R32 million as of 31 December 2021.
With Burger King South Africa and Grand Foods Meat Plant accounted as discontinued operations in the current reporting period, the primary drivers of financial performance are Mac Brothers and GPI's investments in Spur, SunWest, Sun Slots and Worcester Casino. The Group reported a decrease in revenue from continuing operations of 16% and an increase in Net Profit After Tax of R8.8 million compared to the prior period. Basic earnings and headline earnings per share for the Group increased by 4.33 cents and 5.76 cents to 4.03 cents and 4.77 cents respectively compared to the prior interim period.
The primary driver of the decline in revenue during the period was Mac Brothers, which has been negatively affected by the slow recovery of the construction and manufacturing sectors. Over the last six months the business has struggled to grow its top line with revenue for the period down 25% on the prior interim period. Management is taking urgent steps to stop the losses in Mac Brothers.
The primary drivers of the improved profitability during the period were the recoveries in Spur, SunWest, Sun Slots and Worcester Casino, including the resumption of dividends by these entities. The earnings contribution of GPI's Gaming assets improved by 51%, with particularly strong performance in Sun Slots.
GROUP FINANCIAL REVIEW
The Group uses headline earnings to assess the underlying investment contributions to the Group's earnings as 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 table below shows the contribution each investment made to Group headline earnings:
Unaudited | Unaudited | |||
31 December | 31 December | |||
2021 | 2020 | Var | Var | |
R'000s | R'000s | R'000s | % | |
Food | (7 169) | (5 542) | (1 628) | (29) |
Spur | 6 559 | (39) | 6 598 | 16 918 |
Mac Brothers | (13 728) | (5 503) | (8 225) | (149) |
Gaming & Leisure | 50 752 | 33 568 | 17 184 | 51 |
SunWest | 14 265 | 9 305 | 4 960 | 53 |
Sun Slots | 34 341 | 23 098 | 11 243 | 49 |
Worcester Casino | 2 146 | 1 196 | 950 | 79 |
Infinity Gaming Africa | (31) | 31 | 100 | |
Group central costs | (27 238) | (24 888) | (2 350) | 9 |
Corporate costs net of finance charges | (14 738) | (17 335) | 2 597 | 15 |
Transaction costs and legal fees | (8 071) | (3 162) | (4 909) | (155) |
Net finance cost | (3 944) | (5 712) | 1 768 | 31 |
GPI Properties | (485) | 1 321 | (1 806) | (137) |
Headline earnings for the period: | ||||
Continuing operations | 16 345 | 3 138 | 13 206 | 421 |
Discontinued operations | 4 150 | (7 351) | 11 501 | 156 |
Burger King South Africa | 3 896 | (4 128) | 8 024 | 194 |
Grand Food Meat Plant | 254 | (3 223) | 3 477 | 108 |
Headline earnings for the period: Group | 20 495 | (4 213) | 24 708 | 586 |
4 | GRAND PARADE INVESTMENTS LIMITED CONDENSED UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2021 | GRAND PARADE INVESTMENTS LIMITED CONDENSED UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2021 | 5 |
GROUP FINANCIAL REVIEW CONTINUED
Dividends
A dividend of 88 cents was declared and paid on the 4th of December 2021 and amounted to R413,6 million.
Capital structure
During the period the Group changed its preference share funding from Standard Bank to FIRSTRAND Bank Limited. A bridging facility was put in place to replace the Standard Bank preference funding and this debt was reduced to R100 million following the sale of Burger King and Grand Foods Meat Plant.
Over the past six months the Group decreased its gearing levels from 13.8% to 2.4%.
31 December | 31 December | |||
2021 | 2020 | 30 June 2021 | ||
R'000s | R'000s | R'000s | ||
HOLDING COMPANY FACILITIES | ||||
Security | Type of Facility | |||
Sunwest and Sun Slots | Preference Shares | - | 186 743 | 186 971 |
Sunwest and Sun Slots | Bridge Finance | 100 000 | ||
SUBSIDIARY FACILITIES | ||||
Subsidiary | Type of Facility | |||
GPI Properties | Term Loans | 39 618 | 54 095 | 43 365 |
Mac Brothers | Finance Lease | 114 | 860 | 1 125 |
Burger King South Africa | Finance Lease | - | 213 | 356 |
39 732 | 55 168 | 44 846 | ||
Total debt | 139 732 | 241 911 | 231 817 | |
Debt/EBITDA | 2.4% | 11.2% | 13.8% | |
Debt/equity | 1 | 3.11 | 1.81 | |
REVIEW OF INVESTMENT OPERATIONS
FOOD
Burger King and Grand Foods Meat Plant
The sale of Burger King and Grand Foods Meat Plant was concluded on the 3rd of November 2021. For the period under review, the results of Burger King and Grand Foods Meat Plant for 4 months ended 31 October 2021 are accounted for as discontinued operations.
Mac Brothers Catering Equipment
Mac Brothers' revenue of R43.5 million for the 6-month period was 25% lower than the R58.3 million reported for the same period last year. All revenue channels were down on prior period in particular local catering equipment sales. Tougher local trading conditions, further exacerbated by COVID-19 trade restrictions, affected the businesses core market during the period.
Mac Brothers reported a negative EBITDA of R7.08 million for the period. The EBITDA for the comparable period to December 2020 was a positive R2 million. A net loss before tax of R13.8 million for the current period is 206.7% greater than the previous period's net loss before tax of R4.5 million. The reason for this is that UIF TERS relief was received in the prior period and not in the period under review.
Spur
A total dividend of R6.6 million was received during the period under review resulting in a R6.5 million reported net profit contribution.
No dividends were received in the comparative period.
6 | GRAND PARADE INVESTMENTS LIMITED CONDENSED UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2021 | GRAND PARADE INVESTMENTS LIMITED CONDENSED UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2021 | 7 |
GROUP FINANCIAL REVIEW CONTINUED
GAMING
Sunwest
SunWest struggled under lockdown regulations with COVID-19 related restrictions continuing to impact revenue generation. The subsequent easing of restrictions during December has since had a positive effect on the performance of the business.
Although SunWest has showed recovery over the period the business still trades below pre COVID-19 levels (six months ended 31 December 2019). Revenue for the period under review is 48% less than reported for period ended 31 December 2019. EBITDA and NPAT are 67% and 85%, respectively, lower than the 6 months ended December 2019.
Revenue increased by 10% from R606.8 million for the six months ended 31 December 2020 to R665.3 million. EBITDA decreased by 15% from R180.1 million in the prior period to R153.7 million for the period under review. NPAT increased by 54% to R94.5 million for the current period (2020: R61.3 million).
Dividends of R150 million was declared of which the Group received R22.65 million(2020: nil).
Sun Slots
Sun Slots has been resilient despite the challenging trading conditions. The gradual easing of the COVID-19 restrictions has allowed the business to recover to pre COVID-19 levels.
In comparison with pre COVID-19 levels, revenue for the current period under review is marginally, 3.1%, less than the period ended 31 Dec 2019 while EBITDA and NPAT improved by 31.2% and 18.6% respectively compared to the six months ended 31 December 2019.
For the six months ended 31 December 2021 Sun Slots revenue increased by 17% from R583.1 million in 2020 to R683.72 million for the period ended 31 December 2021. EBITDA increased by 43% from R146.7 million in the prior period to R209.4 million for the period under review.
Sun Slots NPAT increased by 55% from R73.9 million in the prior period to R114.4 million in the six months to December 2021.
Dividends of R90 million was declared of which the Group received R27.0 million (2020: R80 million of which the Group received R24.0 million).
Worcester
Worcester Casino's revenue decreased by 3% from R57.5 million in the prior period to R55.9 million for the period under review. EBITDA decreased by 49% from R15.6 million to R8.02 million in the current period.
Net profit after tax increased by 97% to R14.21 million (2020: R10.8 million) for the period under review.
Dividends of R13.2 million was declared of which the Group received R1.9 million (2020: nil).
OTHER
Central costs
The Group's net central costs excluding legal and transaction costs for the period amounted to R14.5 million, a decrease of 15% compared to the prior period. The decrease in central costs was achieved through the restructure of the Group and various cost saving initiatives implemented.
Share capital
No new shares were issued or bought back during the period.
Treasury shares
At 31 December 2021 a total of 40.1 million (2020: 40.5 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 1.34 million (2020: 1.72 million) treasury shares, GPI Management Services holding 24 million (2020: 24 million) shares and the GPI Women's BBBEE Empowerment Trust holding 14.82 million (2020: 14.82 million) treasury shares.
Preference shares
During the current year, the Group redeemed R184.9 million (2020: R16.0 million) worth of preference shares. The redemption of the preference shares issued to Standard Bank of South Africa was funded by a bridge facility from FIRSTRAND Bank Limited. The limit of the facility is R150m of which R100m was drawn as at the period ended 31 December 2021. This facility will be replaced by a preference facility with FIRSTRAND Bank Limited.
Directors and company secretary
There has been no changes to the directorate or company secretary during the period under review.
Particulars of the present directors and company secretary are provided on page 28.
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Grand Parade Investments Limited published this content on 23 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 March 2022 07:33:07 UTC.
