F11 – Results 30 November 2011 STRENGTHENING THE CORE FOR GROWTH.

F11 – Results

30 November 2011 STRENGTHENING THE CORE FOR GROWTH

STRENGTHENING THE CORE: OVERVIEW

The following value recovery initiatives were implemented :

• Closure of loss making South Africa hotels

• Disposal of Hotelserve

• Staff rationalization

• Mutual termination of the Holiday Inn Gaborone lease

• Refurbishment of selected Zimbabwe hotels has commenced

STRATEGY

Our strategy going forward :

• Dominating the Zimbabwean market which is proving to be profitable

• Continued growth in the region through management contracts

• There will be no underlying costs from regional growth

CONTINUING OPERATIONS – MARKET DEVELOPMENTS

• Zimbabwe recovery sustained, with foreign and domestic room nights up 14% and 12% respectively

• Ghana demand spurred by oil and gas, with RevPAR up 10% year on year

• Nigeria occupancies on the recovery, with RevPAR anticipated to improve in 2012

ACCESS– MARKET DEVELOPMENTS

• There are 43 flights weekly into Harare.• Emirates will commence flights into Harare in February 2012 which

increases capacity into Harare by 5 flights a week. Emirates will be operating an Airbus 330-200.

• SAA also introduced an Airbus 330-200 to increase seat capacity into Harare.

• There are 28 flights weekly into Victoria falls. Capacity increase of 300% is required in this area

• Tourism growth is forecasted at 37.5% for 2012

ARRIVALS– AFRICAN SUN HOTELS

2010 2011 Growth

Local 112 476 126 118 12%

Regional 27 449 31 651 15%

International 37 480 46 080 23%

Total 177 405 203 849 15%

BUSINESS COMPOSITION– AFRICAN SUN HOTELS

2010bodies

2011bodies

Local 68% 67%

Regional 14% 15%

International 18% 18%

Total 100% 100%

ZIMBABWE HOTELS – PERFORMANCE OUTLOOKPERFORMANCE

RANKINGHOTEL REVPAR

2012 US $COMMENTS

1 The Victoria Falls Hotel

5 star 95 • Leisure business- free independent traveler ,groups and series

• Refurbishment in progress2 Holiday Inn

Harare3 star 65 • Best performing city hotel

• 93% Occ in May, closed the year at 58%

3 Crowne Plaza 4 star 64 • Conferencing and corporate business

4 Holiday inn Bulawayo

3 star 62 • Conferencing and corporate business

5 Holiday inn Mutare

3 star 55 • Conference and corporate business• Air conditioners and lift issues are

being addressed6 The Kingdom at

Victoria Falls3 star 43 • Groups and series

• Soft refurbishment required

ZIMBABWE HOTELS – PERFORMANCE OUTLOOKPERFORMANCE

RANKINGHOTEL REVPAR

2012 US$

COMMENTS

7 Great Zimbabwe Hotel

3 star 45 • Best performing country hotel

• Conferencing and leisure business

• Central hub for NGO conferencing

• Major structural issues

8 Troutbeck Resort 3 star 42 • Conferencing and leisure business

9 Elephant Hills Resort

4 star 36 • Regional conferencing e.g. Old Mutual, SADC, African Insurance Organization and leisure business

• November 2012 – 55% occupancy, $46 Revpar- best performance in last 3 years

ZIMBABWE HOTELS – PERFORMANCE OUTLOOK

PERFORMANCE RANKING

HOTEL REVPAR 2012 US$

COMMENTS

10 Express by Holiday Inn

Bietbridge

3 star 35 • Conferencing and Transit business

• Air conditioning being attended to

11 Carribea Bay resort

3 star 33 • Conferencing and Leisure• Access issues

12 Hwange Safari Lodge

3 star 15 • Access issues

MANAGEMENT CONTRACTS – PERFORMANCE OUTLOOK

• Total revenues from management contracts in 2011 was US$ 778k

• Growth in management contract revenues for 2012 will be 20%

LOCATION HOTEL

Ghana, Accra Holiday Inn Airport Accra

Nigeria, Lagos Best Western Ikeja

Nigeria, Benin City Best Western Homeville

Nigeria, Enugu Nike Lake

Nigeria Obudu Mountain Resort

FINANCIAL HIGHLIGHTS F11

CONTINUING OPERATIONS

• Revenue ↑ 22% from same period last year

• RevPAR ↑ 21% from same period last year

• ADR ↑ 8% from same period last year

• Occupancy ↑ 11% to close at 51%

• EBITDA profit excluding restructuring costs ↑ 432% to $2.71m

• Loss from discontinued operations is $6.6 m

UPDATE ON REVPAR AND GROWTH OUTLOOK

2010 2011 Growth *2012 Forecast Growth

RevPAR $33 $40 21% $52 30%

• Growth of 21% was achieved in 2011 in comparison with SPLY

• RevPAR of $52, representing 30% growth from F11 is expected in F12

• Performance Update to Nov 2012:• Occupancy - 57%, up from 52% SPLY• RevPAR - $50, 21% up on SPLY of $41

• SPLY- same period last year.

*Forecast

2012 FOCUS

• RevPAR growth leveraging on volumes growth at the Resorts and ADR growth in the City hotels

• Product refurbishment – relaunch of the Holiday Inns and repositioning of Holiday Inn Mutare and Holiday Inn Express

• Reduction of borrowing costs and gearing

• Further cost optimisation, especially in light of the NEC wage increases

• We expect a minimum 8% EBITDA from continuing operations going forward -up from 5.5%

FINANCIALS

IMPROVED PERFORMANCE FROM CONTINUING OPERATIONSUS$ millions 30 Sept 2011

30 Sept 2010

▲%

Revenue $ 48,8 39,9 +22

Cost of Sales $ (14,6) (11,4) +27COS % 30 29 +4

Gross Profit $ 34,2 28,5 +20

Operating expenses $(exc Restructuring costs) (31,5) (28.0) +12.5

EBITDA $ (exc Restructuring costs) 2,7 0.5 +432EBITDA margin % 5.5 1.3 +420 bps

Profit / (Loss) before non-recurring items $ 1,2 (2,5) 148%

Non-recurring items $ (5,9) - -

Loss before tax for the period from continuing ops $ (4,7) (2,5) -88%

Revenue up 22% as RevPAR and occupancy increased by 21% and 11%

Operating expenses increase constrained at 12.5%

Non recurring items include $3.28m - retrenchments and $2.68m - Impairment of Property , Plant and Equipment

EBITDA up 432% to $2.7m( 5.5%margin) excluding restructuring costs of $3.28m

Discontinued Operations(SA hotels and Hotelserve) however suffered a loss of $6.6m –

IMPROVED PERFORMANCE FROM CONTINUING OPERATIONS

GROUP OUTLOOK POSITIVE FOLLOWING CLOSURE OF LOSS MAKING UNITS

• EBITDA loss $4.05m, with SA hotels contributing $3.77m

• Loss from discontinued operations of to $6.62m, includes $1.9m in impairment charges

• Working Capital pressure eases with the closures

OVERALL REVPAR PERFORMANCE TREND POSITIVE

Zim Gha Nig

$40

$203

$20 $33

$191

$19

RevPAR by country2011 2010

Overall RevPAR trend positive with Zimbabwe leading at 21% growth year on year.

REVPAR GROWTH LARGELY DRIVEN BY AN OCCUPANCY RECOVERY IN THE PAST!

H2FY09 H1FY10 H2FY10 H1FY11 H2FY11 FY12

32%20% 23%

0%

16%

-4%

6% 1%

7%

0%

44%

14%24%

-8%

15%

Half year on half year growth in KPIsRevPAR ADR Occ

• Occupancy growth mainly driven by the city hotels

• RevPAR growth continues, though slowing down as city hotels near optimum occupancies

• Future RevPAR growth expected from:• ADR growth from the city

hotels with the Refurbishment

• Occupancy recovery from the Resorts

• RevPAR growth to be driven by the recovery of the Resorts and the after effect of refurbishment on ADR in City Hotels

OPERATIONAL BREAKEVEN IMPROVES WITH CLOSURE OF LOSS MAKING UNITS AND RESTRUCTURING

3.46

8.61

3.60

Improvement on Operational BE EBITDA

Operational BE EBITDA (US$mln)

• Operational BE EBITDA worsened by 139% following poor performance by the SA hotels

• With closure of the SA hotels, disposal of Hotelserve and savings from the restructuring, BE EBITDA for F11 improves by 60%

• Break even RevPAR has consequently improved to $38 from $ 45

OPERATING EXPENSES UP 12.5% WELL WITHIN INCREASE IN REVENUE AND RevPAR

• Costs mainly driven by turnover based costs: Rentals, franchise fees.

• Oversight costs to drop from 15% of revenue to less than 10% following the restructuring.

• Restructuring -head count reduced by 58%, minimum savings of $2.4m per year expected.

ZIMBABWE OPERATIONS CONTINUE ON AN UPWARD TREND

• Revenue ↑ 24%

• Occupancy ↑ from 46% to 51%

• Foreign room nights ↑ 14%

• Domestic room nights ↑ 13 %

• RevPAR ↑ 21% to $40

• ADR ↑ 8% to $80

• 83% contribution to EBITDA by city hotels

• 50% contribution to Revenue by city hotels

• Elephant Hills EBIDTA loss improved to $0.367m from $1.04m prior period.

8% 6%

2011 2010

Revenue 48008885 38350470

EBITDA 3875533 2383963

$5,000,000

$15,000,000

$25,000,000

$35,000,000

$45,000,000

$55,000,000

Revenue Vs EBITDA

$2.1m CASH GENERATED FROM CONTINUING OPERATIONS

• $4.66m in cash and $1.5m in undrawn facilities

• Cash generated from operations improved to $2.1m from negative $5.1m driven by strong RevPAR growth

• Cash generation to improve following;– Restructuring with possible savings of at

least $2.4million a year– Closure of loss making units– Disposal of non-core operations

• Financing Raised includes;– $3.47m drawn for Refurbishment– $1.2m drawn for furnishing the Botswana

project – $1.2m Short term loans to fund loss

making units

Cashflow 30 Sept

201130 Sept

2010

US$m US$m

Cash generated/(used )in operations 2,088 (5,111)

Cash used in investing (3,812) (1,947)

Financing

Financing Raised 5,225 9,983

Increase in cash 1,721 1,663

Exchange Difference 0,126 0,210

Cash at beginning of period 2,811 0,938

Cash at end of period 4,658 2,811

FINANCIAL POSITION & FUNDING:

Balance sheet 31 Sept 11 30 Sep 10

US$m US$m

Assets

Long term assets 30,029 31,449

Current assets 16,440 18,505

Total assets 46,469 49,954

Equity and liabilities

Shareholders equity 15,163 25,003

Non-current liabilities 7,378 5,053

Current liabilities 23,928 19,898

Total equity and liabilities 46,469 49,954

• Decrease in long-term assets due to discontinued operations and impairment of assets

• Current assets declined due reductions in inventory and trade and other receivables

• Shareholders equity impacted by losses arising from $6.45m non-recurring expenses

• Non current liabilities• Refurb Loan Drawn( $3.47m)• Botswana Project Loan( $1.2m)• Deferred Tax Liability($2.46m)

• Current liabilities include $8.2m short-term loans, which will reduce with Hotelserve disposal.

• Long-term loans to reduce as the Botswana loan structure moves to the landlord following exit.

• Gearing, at 35.7% will not increase to improve with the positive cash generation and as working capital pressure eases with the initiatives implemented.

QUESTION & ANSWER