Business Fundamentals are now Strong

Transcription

1 Business Fundamentals are now Strong

2 UNAUDITED FINANCIAL RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2014 WEDNESDAY 24 SEPTEMBER 2014

3 GROUP PERFORMANCE DASHBOARD Profit after tax 32% Profit increase from $ in H1,2013 to a $ in H1,2014 2% 11% 8% 6% $13,5m in 2014 $13,2m in % in % in % in % in 2013 $32 in 2014 $36 in 2013 $40 in 2014 $40 in 2013 $1,5m in 2014 $1,6m in June 2013 REVENUE GROUP OCCUPANCY ZIMBABWE OPERATIONS OCCUPANCY GROUP REVPAR ZIMBABWE OPERATIONS REVPAR EBITDA

4 KEY INTERNATIONAL TOURISM HIGHLIGHTS 1. According to the WTTC (World Travel and Tourism Council) Economic Impact Report in 2014: Ø Travel and Tourism growth is expected to outpace growth in other economic quadrants by 4.3% Ø Travel and Tourism investment is forecasted to increase by 5.6%. Ø China is expected to grow the most among G20 countries in Ø Globally, the tourism sector is expected to generate around 6.5 million new jobs. 2. The highest growth in bookings was recorded in international flight reservations from Ø Asian source markets (+8.3%) Ø Americas (+8%).

5 TOURISM OVERVIEW -ZIMBABWE Ø Average hotel occupancy level in Zimbabwe for the period declined by 17% from 46% to 38%. (Zimbabwe Tourism Authority(ZTA), May Report ) Ø Average bed occupancy declined by 20% from 35% in the first half of 2013 to 28% in the first half of 2014 due to a decline in occupancy from Victoria Falls, Midlands and Beitbridge markets. Ø Main business for 2013 was from the elections across the country. referendum and

6 ECONOMIC OVERVIEW -ZIMBABWE 1. The economic environment in Zimbabwe is calling for organizations to be creative and innovative. 2. RTG has established revenue programs which are now making meaningful contribution to RTG revenues and these include-: v Stay Now Pay later payment platform v RTG Virtual v RTG Mobile

7 ECONOMIC OVERVIEW -ZIMBABWE 3. The RTG system is now geared to absorb most of the economic pressures and fiscal policy pronouncements as a result of -: Ø Cost reduction strategies that commenced in Ø ISO 9001 certification, RTG rewrote its business systems and processes and these were audited and certified by the Standards Association of Zimbabwe (SAZ) Ø Business process re-engineering that resulted in centralization of key functions including the accounts, sales and procurement departments Ø Re-looked at our systems for continuous improvement in our service delivery Kaizen Ø Innovations department where there is new idea generation and the assessment of existing business models for their relevancy.

8 TOURISM OVERVIEW -ZIMBABWE 1. There was a 1% decline in tourist arrivals from 404,282 in Q 1, 2013 to 388,732 in Q1, First quarter arrivals into Zimbabwe : 2009 to " " " " " " " " 50000" 0" 2009" 2010" 2011" 2012" 2013" 2014"

9 TOURIST ARRIVALS : RTG vs NATIONAL SOURCE RTG ARRIVALS H1,2014 % VARIANCE FROM H1,2013 NATIONAL ARRIVALS H1,2014 % VARIANCE FROM H1,2013 % VARIANCE RTG vs NATIONAL AFRICA % (1%) 1% EUROPE % % 30% AMERICAS % % 14% ASIA % (61%) 112% AUSTRALIA & OCEANIA 621 (17%) % 33% TOTAL ARRIVALS % (1%) 17% OCCUPANCY 43% 42% 2% Ø Overall, RTG experienced a growth of 16% from international tourist arrivals in the period January to June 2014, whereas the national average was a decline of 1%.

10 ARRIVALS INTO RTG HOTELS :2014 VS Arrivals from Africa experienced a growth of 2% from January to June Arrivals from Europe experienced a growth of 43%. u The major source markets were France, Germany, Holland and the United Kingdom. 3. North America contributed a growth of 3% in the period under review. 4. Asia contributed a positive growth of 51%, in the first half this year. u The main contributors of Asian business were China, Japan and India,

11 FOREIGN ARRIVALS INTO RTG HOTELS YEAR TO DATE RTG ARRIVALS JANUARY TO JUNE 2014 vs REGION H1,2014 H1,2013 H1,2012 VARIANCE 2014 vs 2013 VARIANCE 2014 vs 2012 AFRICA % 32% EUROPE % 100% AMERICAS % 187% ASIA % 71% AUSTRALIA & OCEANIA % 58% TOTAL % 68% RTG FAIR SHARE 25% 25% 25% RTG MARKET SHARE 28% 27% 23% 4% 22%

12 Business Fundamentals are now strong

13 OUTCOMES OF BUSINESS RE-ENGINEERING 1.COST REDUCTION WHAT WE SAID WHAT WE DID PROJECTION TO FY Undertake retrenchment. Ø Retrenched 8 head office staff at a cost of $ Ø Payback period is 13 months. Ø Retrenched 60 employees at Rainbow Towers Hotel in August 2014 at a cost of $ Ø Payback period is 9 months. Ø Beyond FY, we will achieve a monthly saving of $ Reduce procurement costs of 90% of total goods by $ or 10%. 3. Reduce interest burden from 11% to 7% by year end. Ø Reduced cost of procured goods and services during the first half by $ or 13%. Ø Interest rate at 11% YTD Ø In negotiations to restructure long term loans at low interest rate. Ø Reduction of $ or 15% by year end. Ø Targeting to close at effective interest rate of 9% for the year.

14 OUTCOMES OF BUSINESS RE-ENGINEERING 2. FUNDING GAP WHAT WE SAID WHAT WE DID PROJECTION TO FY Zero funding gap by year end Ø Reduced funding gap from $9,4m in December 2012 to $2,4m as at 30 June Ø Zero funding gap by year end.

15 OTHER COST REDUCTION AREAS 2014 COST AREA H1,2014 ACTUALS OPERATING COSTS PER ROOM 6% of turnover % DROP H1,2014 vs H1, 2013 ACTUALS - H1,2013 ACTUALS 6% of turnover WATER $ % $ % ELECTRICITY $ % $ % TELEPHONE $ % $ % PRINTING AND STATIONERY $ % $ % STAFF TRAINING $ % $ % SUBSCRIPTIONS $ % $ % TRAVELLING $ % $ % REPAIRS AND MAINTENANCE $ % $ % EQUIPMENT LEASE $ % $ % % DROP FY, 2013 vs FY,2012 ACTUALS

16 OUTCOMES OF BUSINESS RE-ENGINEERING 3. BUSINESS SYSTEMS AND PROCESSES WHAT WE SAID WHAT WE DID PROJECTION TO FY Align processes to business model. Ø ISO 9001 certification by Standards Association of Zimbabwe(SAZ). Ø Rewrote business processes in line with the adopted business model. Ø Training on BOPs. Ø YTD GSI index at 89%. Ø Full roll out of BOPs to all hotels. Ø Achieve average guest satisfaction index of 95% by FY Centralize strategic functions for efficiency and cost reduction. 3. Improve Business Information technology functions by establishing a Business Information Systems department. Ø Centralized Accounts, Sales, Procurement and Payroll. Ø Implemented Procurement Workflow. Ø Centralized I.T infrastructure. Ø Business Information loss risk reduced by 60% due to centralized back-up systems. Ø Upgraded network and fiber backbone. Ø Licensing costs reduced by $ Ø 80% Micros point of sale roll out for hotels. Ø Continue to explore further efficiencies. Ø To further reduce risk by 80% by FY Ø 100% Micros point of sale roll out to all hotels. Ø 100% upgrade of network and fiber backbone.

17 OUTCOMES OF BUSINESS RE-ENGINEERING 4. REVENUE GENERATION CAPABILITY WHAT WE SAID WHAT WE DID PROJECTION TO FY Establish stronger revenue generation capabilities Ø Acquired business worth $2,5million to replace once-off major conferences that took place in H1,2013. (CISSA,REFERENDUM and ELECTIONS). Ø 58% increase in e-commerce contribution from $ in H to $ in H Ø Achieve new business worth $6,25m for the full year Ø Achieve full year revenue of $32,6 million. Ø Achieve full year E-commerce revenue contribution of $ Ø Between January and August 2014; E-commerce contribution was $ Increase contribution of foreign revenues Ø Average occupancy for A Zambezi River Lodge increased by 17% from 41% in H1,2013 to 48% in H1, Ø To achieve a full year occupancy increase of 40% over FY,2013 for A Zambezi River Lodge.

18 OUTCOMES OF BUSINESS RE-ENGINEERING 4. REVENUE GENERATION CAPABILITY Cont d WHAT WE SAID WHAT WE DID PROJECTION TO FY Rejuvenation of the South Africa office Ø Revenue contribution grew by 52% generating $1,284, 000 against $ in same period last year. Ø Contribution to total revenues grew by 50% from 6% in H1,2013 to 9% in H1,2014. Ø To achieve an overall contribution to total revenue of 11% by FY, 2014 from 6% in FY, 2013.

19 OUTCOMES OF BUSINESS RE-ENGINEERING 4. REVENUE GENERATION CAPABLITY Cont d : PROPRIETARY PROGRAMS PROGRAM H1,2014 H1,2013 VARIANCE STAY-NOW-PAY-LATER $52,107 $11, % RTG VIRTUAL $ gross $ gross 283% RTG MOBILE $ n/a GROUP PROMOTIONS $3,3m $3m 10%

20 UPDATE ON 1. RTG has increased its geographical spread in Zimbabwe. 2. Rainbow Beitbridge Hotel (RBBH) will take advantage of activities around Beitbridge including the expansion of the border post. 3. Going into 2015, the momentum will spurn the hotel towards break even for the year.

21 RTG PERFORMANCE INCLUDING RAINBOW BEITBRIDGE HOTEL EXCLUDING RAINBOW BEITBRIDGE HOTEL RTG % room nights 16% growth Occupancy 43% RevPAR $32 ADR $74 RTG % room nights 6% growth Occupancy 45% RevPAR $35 ADR $77 u The market penetration strategy for Rainbow Beitbridge Hotel resulted in the above dilution.

22 FINANCIAL RESULTS

23 INCOME STATEMENT for the half year ended 30 June 2014 US$ JUNE JUNE 2013 % MOVEMENT Revenue 13,467 13,230 Cost of sales (4,769) (4,437) Gross profit 8,698 8,793 Operating expenses (7,171) (7,149) EBITDA 1,527 1,644 Depreciation (858) (764) Profit from operations Finance expense (978) (851) (Loss)/profit before tax (309) 29 Income tax Profit after tax from cont. ops Loss from discontinued operations - (107) Profit for the period % -7% -1% 0% -7% -12% -24% -15% -1164% 146% -34% 100% 33%

24 INCOME STATEMENT for the half year ended 30 June 2014 before Rainbow Beitbridge Hotel US$ JUNE JUNE 2013 % MOVEMENT Revenue 12,905 13,230 Cost of sales (4,517) (4,437) Gross profit 8,388 8,793 Operating expenses (6,694) (7,149) EBITDA 1,694 1,644 Depreciation (784) (764) Profit from operations Finance expense (802) (851) Profit before tax % -2% -5% 6% 3% -3% 3% 6% 272% Ø Operating expenses excluding RBBH is 6% reduction compared to prior year.

25 PROFITABILITY TREND 2009 TO ,000,000 PROFIT AFTER TAX TREND 1,000,000 - (1,000,000) (2,000,000) (3,000,000) (4,000,000) (5,000,000) (6,000,000) (7,000,000) Half Year Full Year

26 REVENUE MIX 2013 & 2014 Other Operated Departments 2014 Other Operated Departments 2013 Conference & BanqueQng 2,847,438 21% 377,609 3% Food & Beverages Rooms 6,525,316 48% Conference & BanqueQng 3,073,292 23% 512,984 4% Rooms 6,402,068 48% Food & Beverages 3,716,567 28% 3,241,377 25%

27 OPERATING PERFORMANCE INDICES 30 JUNE JUNE 2013 Staff costs as a % of revenue 42.6% 35.8% EBITDA Margin 9% 12% Interest Rate on Short term borrowings 15.8% 16.6% Interest on Long-tem borrowings 9.2% 9.2% Interest Cover 1.2 times 2.4 times Ø Staff costs as a percentage of turnover excluding RBBH and retrenchment at 31.5%. Ø Interest cover to grow 3 times FY, 2014.

28 Impact of Retrenchment & RBBH Description Excluding RBBH 30-Jun-14 Including RBBH 30-Jun-14 Variance Movement (US$ 000) (US$ 000) (US$ 000) % Revenue 12,905 13,467 (562) (4%) EBITDA 1,694 1, % Profit/(loss) before tax 108 (309) % Retrenchment Adjusted PBT 238 (179) 417

29 STATEMENT OF FINANCIAL POSITION as at 30 June 2014 Assets 30 June 2014 US$ June 2013 US$ 000 Non-current assets 38,943 36,317 Current assets 12,483 10,837 Assets in disposal group classified as held for sale - 1,690 Total assets 51,426 48,844 Equity and Liabilities Shareholders equity 16,843 15,851 Non-current liabilities 21,579 20,570 Current liabilities 13,004 10,937 Liabilities directly associated with assets in disposal group held for sale 0 1,486 Total equity and liabilities 51,426 48,844 Ø Non current assets grew by $2,6 million. Ø Total liabilities dropped by $2 million. Ø Total liabilities at 67% of total assets. Ø Funding gap closed at $2.9m down from $7.4m last year. Ø Gearing 58% down from 59%

30 EQUITY & DEBT TREND TO ,000 25,000 23,197 24,530 20,000 18,595 18,472 17,014 15,000 17,404 23,873 23,487 16,788 16,843 10,000 11,269 5,000-2, (G:13%) 2010 (G:51%) 2011 (G:58%) 2012 (G:69%) 2013 (G:59%) H1,2014 (G: 58%) Total Debt Shareholders Equity Ø Gearing is projected to close the year on 52% compared to 59% at 31 December 2013.

31 CASHFLOW STATEMENT for the half year ended 30 June 2014 CASHFLOW 30 JUNE 2014 US$ JUNE 2013 US$ 000 Cash generated from operations after working capital movements 1, Net finance costs (978) (851) Income Tax paid - - Cash (outflow)/inflow from operations 461 (305) Cash used in investing activities (1,400) (1,178) Financing (used)/raised (406) 3,297 (Decrease)/increase in cash & cash equivalents (1,414) 1,814 Cash & cash equivalents at beginning of period 3,022 (1,199) Cash & cash equivalents at end of period 1,

32 TRADING UPDATE : JULY-SEPTEMBER 2014 vs SPLY PERFOMANCE INDICES % Growth OCCUPANCY 56% 51% 10% ADR $75 $83 10% REVPAR $42 $42 REVENUES $8,8m $8,2 7%

33 OUTLOOK REVENUE GROWTH FULL YEAR 2014 PERFOMANCE INDICES % Growth OCCUPANCY 51% 47% 9% ADR $81 $83 2% REVPAR $41 $39 5% REVENUES $31,5m $29.3 8%

34 THANK YOU.

35 CONTACT DETAILS NAME OFFICE CONTACT Tendai Madziwanyika Chief ExecuOve Officer Napoleon Mtukwa Finance Director & Company Secretary