Hosken Consolidated profits up 10%

2010-11-19 17:57

Johannesburg – Investment holding company Hosken Consolidated Investments [JSE:HCI] on Friday announced headline earnings per share of 226.38 cents for the six months ended September 30 2010, from 104.02c previously.

It posted headline earnings per share from continuing operations of 264.89c, from 199.88c earlier.

Basic earnings per share were up 133% to 233.53c, with basic earnings per share from continuing operations at 269.33c, from 212.42c in 2009.  
Revenue increased 17.5% to R4.432bn, with operating profit up to R1.25bn from R1.096bn previously.

Profit for the period from continuing operations was up 10.5% to R718.845m, Hosken said.

Hosken is involved in high growth industries via hotels, gaming, transport, food and beverages and industrial and technological services.

"The six-month period was dominated by the 2010 Fifa World Cup. In light of the fact that the event was in South Africa and the rights thereto were not held by, we anticipated this might be an especially lean period for our business," Hosken said.

"Our results show us to be relatively flat compared with the prior comparable period, which we regard as a very good result for this period.

"We do not anticipate the soccer having any similar effect on the second six months and as a result remain confident that Sabido (owner of will continue to perform well," the group said.

It added that despite an improved performance of the Tsogo Sun Gaming division, the gaming industry continued to remain under pressure with low levels of growth in most markets, although not as severe as experienced in the prior period.    

Total revenue of R2.188bn and earnings before interest, taxes, depreciation, amortisation and rent (Ebitdar) of R868m were achieved in the six months.

Tsogo Sun Holdings improved group revenue by 9.7% to R3.156bn and recorded Ebitdar of R1.2bn, 10.9% higher.

The hotels South Africa division has recorded revenue and Ebitdar growth of 9.1% to R859m and R309m respectively, it said.

"Despite tough trading conditions, the market is expected to grow during the second six-month period to March 31 2011.

"The Tsogo Sun group remains focused on a growth strategy and will continue to pursue opportunities to develop and enhance its core hotels and gaming businesses," Hosken said.

Vukani Gaming Corporation's installed machine base increased from 3 121 at March 31 2010 to 3 523, with 402 machines being rolled out during the period under review.

More Golden Arrows on the way

Hosken said it is committed to upgrading its fleet of Golden Arrow Buses with a further 42 new buses expected to be introduced in the next six months, which should result in further fuel and maintenance cost savings in future years.

"The integrated rapid transport system continues to move ahead and the company will continue to engage the city with its input and participation," it said.

The group said that its interest in Clover Industries was disposed of during the period under review, with Hosken receiving R493m from the disposal. The group retained the investment in the preference shares of R110m, following their restructuring.
For its HCI Khusela Coal operation, the group said that mining operations had passed the start-up phase at the Palesa mine.

Earnings before interest, taxes, depreciation, amortisation for the group of R15m is the first positive contribution in a reporting period. It was achieved despite lower than planned sales volumes, the ongoing costs to maintain the Mbali infrastructure and significant legal and consultant fees, Hosken said.

In October Tsogo Investment Holding Company's (TIH's) agreement to repurchase 25% of its issued share capital from Nafcoc Investment Holdings for a purchase consideration of R1.2bn became unconditional.

TIH settled the purchase consideration by the payment of R700m in cash and issuing R500m of redeemable preference shares.

As a result of this transaction, the group's interest in TIH has increased from 74.67% to 99.56%, increasing the group's effective interest in TIH's 51%-held subsidiary, Tsogo Sun, from 38.08% to 50.78%.