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13 March 2003
File ref: 67 SX-02
The Company's Announcement Office
Australian Stock Exchange Limited
Level 4
20 Bridge Street13
SYDNEY NSW 2000
Dear Sir/Madam
LODGMENT OF AUDITED FINANCIAL REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2002
Further to our lodgment on 11 February 2003 of Appendix 4B regarding our
Company's results for the six months ended 31 December 2002, we enclose our
audited statutory financial report for the same period. We confirm that the
results reported in Appendix 4B are consistent with the enclosed financial
report.
We understand that this lodgment also satisfies the requirements to lodge the
financial report with the Australian Securities & Investment Commission.
Should there be any queries regarding this matter, please do not hesitate to
contact the writer.
Yours faithfully
LAURENCE M CARSLEY
CHIEF FINANCIAL OFFICER
Enc
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JUPITERS LIMITED
A.C.N. 010 741 045
AND ITS CONTROLLED ENTITIES
DIRECTORS' REPORT
The Directors take pleasure in submitting their report and the financial report
of Jupiters Limited (the Company) and its controlled entities (the Economic
Entity) for the six months ended 31 December 2002.
DIRECTORS
The Directors in office from 1 July 2002 to the date of this report are as
follows:
LAWRENCE J. WILLETT AO - Chairman
ROBERT A. HINES - Managing Director
SIR FRANCIS MOORE AO
PENELOPE MORRIS AM, B.ARCH (HONS), M.ENV.SCI, DIP CD, FRAIA, FAICD
JOHN D. STORY B.A., LLB
PROFIT AND DIVIDENDS
The net profit for the six months ended 31 December 2002 was $34,657,578 (2001:
$36,186,453).
The Directors have declared an interim fully franked dividend of 11 cents per
share.
Since 30 June 2002, a fully franked dividend of 11 cents per share in respect of
the year ended on that date (as reported in the Directors' Report) has been
paid.
REVIEW OF OPERATIONS
The net profit after tax for the six months ended 31 December 2002 was $34.7
million a decrease of $1.5 million or 4.1%, compared to $36.2 million for the
previous corresponding period ("pcp").
Total revenue of $400.6 million decreased 1.6% or $6.5 million from $407.1
million for the pcp.
Earnings before interest, income tax, depreciation and amortisation (EBITDA) for
the period were $97.5 million, compared with $105.7 million for the pcp.
Gaming machine performance in the Casinos has continued to strengthen but not
sufficiently to improve on the pcp. Total gaming machine revenues for the three
casinos was $128.3 million compared to $133.2 million for the pcp, a decrease of
$4.9 million or 3.7%.
The International Commission Business has performed satisfactorily posting a 12%
increase in front money over a very strong pcp. This aspect of our business
remains in the range of 10% to 15% of total revenues.
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Centrebet achieved revenues of $16.6 million an increase of $4.8 million or 41%
on the pcp.
Revenues from the wide area gaming operations consisting of Keno games in NSW
and Queensland and gaming machine monitoring in Queensland rose by $1.7 million
to $61.0 million and contributed EBITDA of $21.6 million an increase of $2.2
million or 11% over the pcp.
The Company's net debt to shareholders' equity ratio and interest cover ratio
were 76.2% and 5.5 times respectively for the six months ended 31 December 2002.
Return on equity for the six months ended 31 December 2002 was 14.6% compared to
11.5% for the pcp.
ROUNDING OF AMOUNTS
Jupiters Limited is a company of the kind specified in Australian Securities and
Investments Commission class order 98/0100. In accordance with that Class Order,
amounts in the consolidated financial report and the Directors' Report have been
rounded to the nearest thousand dollars unless specifically stated to be
otherwise.
Signed in accordance with a resolution of Directors.
L.J. WILLETT
Chairman
R.A. HINES
Managing Director
Brisbane
11 February 2003
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JUPITERS LIMITED
A.C.N. 010 741 045
AND ITS CONTROLLED ENTITIES
CONDENSED STATEMENT OF FINANCIAL PERFORMANCE
FOR THE SIX MONTHS ENDED 31 DECEMBER 2002
Consolidated
------------
Note 2002 2001
----
$000 $000
-------- --------
Operating revenues:
Casino 234,894 246,364
Hotel 68,544 63,665
Other gaming and wagering 75,733 69,740
Gaming equipment sales and
technology services 18,547 24,578
-------- --------
397,718 404,347
Other revenue 6 2,838 2,795
-------- --------
Total revenue from ordinary activities 400,556 407,142
Employee related expenses (116,300) (114,222)
Government gaming taxes and
fees/community benefit contribution (56,857) (59,561)
Marketing expenses (49,094) (47,599)
Cost of goods sold (11,489) (14,223)
Depreciation and amortisation expense 6 (27,438) (26,626)
Borrowing costs 6 (18,715) (11,634)
Management fees (9,761) (10,309)
Property operations and energy costs (10,923) (10,749)
Keno commissions (12,872) (11,792)
Other expenses from ordinary activities (34,570) (31,539)
-------- --------
Profit from ordinary activities before
income tax expense 52,537 68,888
Income tax expense (17,331) (31,939)
-------- --------
Net profit before outside equity interests 35,206 36,949
Net profit attributable to outside equity
interests (548) (763)
-------- --------
Net profit attributable to members of the
chief entity 34,658 36,186
Increase in opening balance of retained
profits on adoption of new accounting
standard AASB 1044 "Provisions, Contingent
Liabilities and Contingent Assets" 22,902 -
-------- --------
Total changes in equity other than those
resulting from transactions with owners
as owners 57,560 36,186
======== ========
Basic earnings per share (cents per share) 17.2 15.0
======== ========
Diluted earnings per share (cents per share) 17.2 15.0
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The accompanying notes form an integral part of this
condensed statement of financial performance
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JUPITERS LIMITED
A.C.N. 010 741 045
AND ITS CONTROLLED ENTITIES
CONDENSED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2002
Consolidated
------------
31.12.02 30.6.02
$000 $000
---------- ----------
CURRENT ASSETS:
Cash assets 65,404 85,301
Receivables 25,226 18,420
Inventories 17,178 14,098
Other 9,654 10,568
---------- ----------
Total current assets 117,462 128,387
---------- ----------
NON-CURRENT ASSETS:
Property, plant and equipment 797,908 792,061
Intangibles 116,840 122,831
Deferred tax assets 1,039 -
Other 24,677 24,052
---------- ----------
Total non-current assets 940,464 938,944
---------- ----------
Total assets 1,057,926 1,067,331
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CURRENT LIABILITIES:
Payables 96,361 93,699
Interest bearing liabilities 1,276 1,827
Current tax liabilities 2,505 21,348
Other provisions 17,917 36,375
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Total current liabilities 118,059 153,249
---------- ----------
NON-CURRENT LIABILITIES:
Interest bearing liabilities 451,672 431,695
Deferred tax liabilities - 2,358
Other provisions 12,271 10,622
---------- ----------
Total non-current liabilities 463,943 444,675
---------- ----------
Total liabilities 582,002 597,924
---------- ----------
Net assets 475,924 469,407
========== ==========
EQUITY:
Contributed equity 311,410 310,457
Retained profits 164,514 127,592
---------- ----------
Chief entity interest 475,924 438,049
Outside equity interest - 31,358
---------- ----------
Total equity 475,924 469,407
========== ==========
The accompanying notes form an integral part of this
condensed statement of financial position
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JUPITERS LIMITED
A.C.N. 010 741 045
AND ITS CONTROLLED ENTITIES
CONDENSED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2002
Consolidated
------------
2002 2001
$000 $000
-------- --------
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Cash receipts in the course of operations 392,598 393,185
Cash payments in the course of operations (292,960) (280,906)
Interest received 1,032 1,677
Borrowing costs (23,207) (11,003)
Income taxes paid (39,845) (32,492)
---------- ----------
Net cash provided by operating activities 37,618 70,461
---------- ----------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchase of property, plant and equipment (29,189) (17,404)
Proceeds from sale of property, plant
and equipment 120 39
Purchase of businesses - (2,000)
Increase in ownership interest in
controlled entity (24,285) -
---------- ----------
Net cash used in investing activities (53,354) (19,365)
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CASH FLOWS USED IN FINANCING ACTIVITIES:
Repayment of borrowings (20,300) (90,400)
Proceeds from borrowings 40,000 40,000
Ordinary dividends paid (22,902) (25,672)
Repayment of finance lease (959) (937)
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Net cash used in financing activities (4,161) (77,009)
---------- ----------
Net decrease in cash held (19,897) (25,913)
Cash at the beginning of the period 85,301 116,742
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Cash at the end of the period 65,404 90,829
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The accompanying notes form an integral part of this
condensed statement of cash flows
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JUPITERS LIMITED
AND ITS CONTROLLED ENTITIES
NOTES TO THE CONDENSED FINANCIAL REPORT
AT 31 DECEMBER 2002
1.BASIS OF PREPARATION OF THE FINANCIAL REPORT:
Basis of Preparation
This general purpose consolidated financial report has been prepared for the six
months ended 31 December 2002 in accordance with Australian Accounting Standard
AASB 1029: Interim Financial Reporting and other mandatory professional
reporting requirements. It is recommended that this report be read in
conjunction with the 30 June 2002 annual financial report and any public
announcements made by Jupiters Limited and its controlled entities during the
half year in accordance with the continuous disclosure obligations of the
Corporations Act 2001 and Australian Stock Exchange Listing Rules. This
financial report does not include all notes of the type normally included within
the annual financial report. This financial report has been prepared on the
basis of historical costs and the accounting policies adopted are consistent
with those applied in the 30 June 2002 annual financial report.
Changes in Accounting Policies
The consolidated entity has complied with the new Accounting Standard AASB 1044
"Provisions, Contingent Liabilities and Contingent Assets" which has resulted in
a change in the accounting for dividend provisions. Previously, the consolidated
entity recognised a provision for dividend based on the amount that was proposed
or declared after the reporting date. In accordance with the requirements of the
new standard, a provision for dividend will only be recognised at the reporting
date where the dividends are declared, determined or publicly recommended prior
to the reporting date. The effect of the revised policy has been to increase
consolidated retained profits and decrease provisions at the beginning of the
half year by $22,902,000. In accordance with the new Standard, no provision for
dividend has been recognised for the half year ended 31 December 2002. The
change in accounting policy has had no effect on basic or diluted EPS.
2. CHANGE IN COMPOSITION OF ENTITY:
Throughout the six months ended 31 December 2002, Jupiters Limited held an
ownership interest of 47.5% in Breakwater Island Trust, a controlled entity. On
31 December 2002, Jupiters Limited effectively increased its ownership interest
to 100% by declaring its takeover bid unconditional by that date. Jupiters
Limited has exercised its right to compulsorily acquire the 5.8% ownership
interest held by dissenting unitholders of Breakwater Island Trust as at 31
December 2002. The total consideration offered for the increase in ownership
interest was $27.9 million excluding transaction costs, this was funded by the
issue of $0.9 million Jupiters Limited ordinary shares at 31 December 2002 and
the balance in cash.
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JUPITERS LIMITED
AND ITS CONTROLLED ENTITIES
NOTES TO THE CONDENSED FINANCIAL REPORT
AT 31 DECEMBER 2002
3. CONTINGENT LIABILITIES:
Since the last annual reporting date, there has been no change in contingent
liabilities.
4. DIVIDENDS:
The Directors have declared an interim fully franked dividend of 11 cents per
share for the year ending 30 June 2003 (2001: 10 cents per share fully franked).
This declaration will result in the payment of approximately $22.2 million in
March 2003, subject to any allotment of Jupiters Limited's shares under the
Breakwater Island Trust compulsory acquisition process.
2002 2001
$000 $000
-------- --------
5. RETAINED PROFITS:
Retained profits at the beginning of the
half year 127,592 123,881
Net profit attributable to members of the
chief entity 34,658 36,186
Adjustment arising from adoption of new
accounting standard AASB 1044
"Provisions, Contingent Liabilities
and Contingent Assets" 22,902 -
Interim dividend of 10 cents per share,
fully franked at 30% related to
year ended 30 June 2002 - (24,135)
Final dividend of 11 cents per share,
fully franked at 30% related to year
ended 30 June 2002 (22,148)
Final distribution of 1 cent per unit,
fully franked at 30% payable by
Breakwater Island Trust to outside
equity interests related to year
ended 30 June 2002 (754)
--------
(22,902) -
Reclassification of retained earnings on
acquisition of controlled entity 2,264 -
Over provision of prior year final
distribution payable by Breakwater Island
Trust to outside equity interest - 151
---------- ----------
Retained profits at the end of the half year 164,514 136,083
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JUPITERS LIMITED
AND ITS CONTROLLED ENTITIES
NOTES TO THE CONDENSED FINANCIAL REPORT
AT 31 DECEMBER 2002
Consolidated
------------
2002 2001
$000 $000
-------- --------
6. PROFIT FROM ORDINARY ACTIVITIES:
Profit from ordinary activities has been
arrived at after:
Crediting the following -
Operating revenues:
Casino 234,894 246,364
Hotel 68,544 63,665
Other gaming and wagering 75,733 69,740
Gaming equipment sales and technology services 18,547 24,578
-------- --------
397,718 404,347
-------- --------
Other revenues:
Interest from other persons 1,125 1,435
Proceeds from sale of property,
plant and equipment 120 39
Other 1,593 1,321
-------- --------
2,838 2,795
-------- --------
Charging the following expenses -
Depreciation and amortisation expense:
Depreciation of property, plant and equipment 20,664 20,179
Amortisation of:
Leased assets 1,612 1,657
Goodwill 3,918 3,973
Management contract 264 264
Deferred borrowing costs 980 553
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27,438 26,626
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Borrowing costs:
Unsecured notes issued in USA 9,749 9,751
Reset preference shares classified
as liabilities 7,813 -
Bank loans and overdraft 1,097 1,771
Finance charges relating to leases 56 112
-------- --------
18,715 11,634
-------- --------
Other expenses:
Property lease rentals 2,711 2,739
Government gaming taxes/community
benefit contribution 55,364 54,804
Bad debts written off and provision
for doubtful debts 2,261 863
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JUPITERS LIMITED
AND ITS CONTROLLED ENTITIES
NOTES TO THE CONDENSED FINANCIAL REPORT
AT 31 DECEMBER 2002
7. SEGMENT INFORMATION:
31 December 2002 31 December 2001
---------------------- --------------------
Segment Segment Segment Segment
Revenue Result Revenue Result
Business Segments: $000 $000 $000 $000
- ----------------- ------- ------- -------- --------
Land based operations 305,164 60,162 311,690 71,530
Wide-area operations 60,997 13,570 60,986 11,441
Technology operations 26,581 787 28,811 650
Sportsbetting operations 16,573 4,686 11,824 4,928
Net interest 1,125 (17,590) 1,435 (10,199)
Unallocated 1,537 (10,761) 3,100 (10,410)
Eliminations (11,421) 1,683 (10,704) 948
------- -------- -------- --------
Consolidated 400,556 52,537 407,142 68,888
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LAND BASED OPERATIONS
Comprises hotel and casino operations at Hotel Conrad and Jupiters Casino (Gold
Coast), Hotel Conrad and Treasury Casino (Brisbane) and Jupiters Townsville
Hotel and Casino (Townsville) as well as other Breakwater Island Trust
activities in Townsville.
WIDE-AREA OPERATIONS
Comprises keno operations throughout Queensland and in clubs in New South Wales
and gaming machine monitoring and related activities in Queensland clubs and
hotels.
TECHNOLOGY OPERATIONS
Comprises national gaming and information technology service providers.
SPORTSBETTING OPERATIONS
Comprises Centrebet sportsbetting business.
Consolidated segment result equates to profit from ordinary activities before
income tax expense.
Goodwill attributable to the acquisition of the AWA group is included in
Unallocated.
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JUPITERS LIMITED
A.C.N. 010 741 045
AND ITS CONTROLLED ENTITIES
DIRECTORS' DECLARATION
The Directors declare that:
(a) the financial statements and associated notes comply with the Accounting
Standards;
(b) the financial statements and associated notes give a true and fair view of
the financial position as at 31 December 2002 and performance of the Economic
Entity for the half year then ended; and
(c) in the Directors' opinion, there are reasonable grounds to believe that the
Company will be able to pay its debts as and when they become due and payable,
and the companies who are party to a Deed of Cross Guarantee, will together be
able to meet any obligations or liabilities to which they are, or may become
subject by virtue of the Deed of Cross Guarantee dated 12 June 1992.
Made in accordance with a resolution of the Directors.
L.J. WILLETT
Chairman
R.A. HINES
Managing Director
Brisbane
11 February 2003
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ERNST & YOUNG
1 Eagle St
Brisbane QLD 4000
Australia
PO Box 7878
Waterfront Place
Brisbane QLD 4001
Tel 61 7 3011 3333
Fax 61 7 3011 3100
DX 165 Brisbane
INDEPENDENT AUDIT REPORT
To the members of Jupiters Limited
SCOPE
We have audited the financial report of Jupiters Limited, comprising the
Statement of Financial Position as at 31 December 2002, the related Statement of
Financial Performance and Statement of Cash Flows for the half-year then ended,
attached notes and the Directors' Declaration. The financial report includes the
consolidated financial statements of the consolidated entity comprising the
company and the entities it controlled at the end of the half year or from time
to time during the half year. The company's directors are responsible for the
financial report. We have conducted an independent audit of the financial report
in order to express an opinion on it to the members of the company.
Our audit has been conducted in accordance with Australian Auditing Standards to
provide reasonable assurance whether the financial report is free of material
misstatement. Our procedures included examination, on a test basis, of evidence
supporting the amounts and other disclosures in the financial report, and the
evaluation of accounting policies and significant accounting estimates. These
procedures have been undertaken to form an opinion whether, in all material
respects, the financial report is presented fairly in accordance with Accounting
Standard AASB 1029 "Interim Financial Reporting", other mandatory professional
reporting requirements in Australia, and statutory requirements so as to present
a view which is consistent with our understanding of the consolidated entity's
financial position and performance as represented by the results of its
operations and its cash flows.
The audit opinion expressed in this report has been formed on the above basis.
AUDIT OPINION
In our opinion, the half year financial report of Jupiters Limited
is in accordance with:
(a) the Corporations Act 2001 including:
(i) giving a true and fair view of the consolidated entity's financial
position as at 31 December 2002 and of its performance for the
half-year ended on that date; and
(ii) complying with Australian Accounting Standard AASB 1029 "Interim
Financial Reporting" and the Corporations Regulations 2001; and
(b) other mandatory professional reporting requirements in Australia.
Ernst & Young
Mark Hayward
Partner
Brisbane
11 February 2003
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