F11 – Results

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

2. 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

3. 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

4. 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

5. 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

6. ARRIVALS– AFRICAN SUN HOTELS • Tourism growth is forecasted at 37.5% for 2012

7. BUSINESS COMPOSITION– AFRICAN SUN HOTELS

8. ZIMBABWE HOTELS – PERFORMANCE OUTLOOK

9. ZIMBABWE HOTELS – PERFORMANCE OUTLOOK

10. ZIMBABWE HOTELS – PERFORMANCE OUTLOOK

11. MANAGEMENT CONTRACTS – PERFORMANCE OUTLOOK • Total revenues from management contracts in 2011 was US$ 778k • Growth in management contract revenues for 2012 will be 20%

12. 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

13. UPDATE ON REVPAR AND GROWTH OUTLOOK *Forecast • 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.

14. 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%

15. FINANCIALS

16. IMPROVED PERFORMANCE FROM CONTINUING OPERATIONS IMPROVED PERFORMANCE FROM CONTINUING OPERATIONS • 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 –

17. 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

18. OVERALL REVPAR PERFORMANCE TREND POSITIVE Overall RevPAR trend positive with Zimbabwe leading at 21% growth year on year.

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

20. OPERATIONAL BREAKEVEN IMPROVES WITH CLOSURE OF LOSS MAKING UNITS AND RESTRUCTURING • 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

21. 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.

22. 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%

23. $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

24. FINANCIAL POSITION & FUNDING: • 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.

25. QUESTION & ANSWER