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PPR - Putprop Limited - Unaudited interim results for the six months ended 31 December 2009 Putprop Limited (Incorporated in the Republic of South Africa) (Registration number 1988/001085/06) Share code: PPR ISIN: ZAE000072310 ("Putprop" or "the company" or "the group") Unaudited interim results for the six months ended 31 December 2009 Unaudited Consolidated Statement of Comprehensive Income for the six months ended 31 December 2009 Unaudited Unaudited % Audited 31 December 31 December Change 30 June
2009 2008 2008 R`000 R`000 R`000 Property 16 180 13 786 17.4 29 734 revenue Straight line 1 105 2 291 (51.8) 3 407 rental income accrual Gross property 17 285 16 077 7.5 33 141 revenue Property (2 244) (1 865) 20.3 (3 251) expenses Net profit 15 041 14 212 5.8 29 890 from property operations Administration (1 601) (1 339) 19.6 (2 748) expenses Investment and 347 1 251 (72.3) 1 642 other income Operating 13 787 14 124 (2.4) 28 784 profit before capital items Capital items: Gross change 5 000 7 000 (28.6) 17 613 in fair value of investment properties Net profit 18 787 21 124 (11.1) 46 397 before taxation Taxation (5 421) (5 506) (1.5) (11 071) Net profit 13 366 15 618 (14.4) 35 326 attributable to equity holders Shares in 28 793 28 793 - 28 793 issue (weighted average number) (`000) Earnings and 46.4 54.2 (14.4) 122.7 diluted earnings per share (cents) Dividends paid 22 22 - 32 per share (cents) Headline 31.5 33.3 (5.4) 70.0 earnings per share (cents) Reconciliation of headline earnings Net profit for 13 366 15 618 (14.4) 35 326 the period Adjusted for: Fair value and (5 000) (7 000) (28.6) (17 613) impairment adjustments Taxation 700 980 (28.6) 2 466 effect of these adjustments Headline 9 066 9 598 (5.4) 20 179 earnings Unaudited Consolidated Statement of Financial Position as at 31 December 2009 Unaudited Unaudited Audited 31 December 31 December 30 June 2009 2008 2009 R`000 R`000 R`000
ASSETS Non-current assets 225 127 191 118 205 135 Investment properties at 204 560 173 120 185 607 fair value Other non-current assets Furniture, fittings and 52 81 67 computer equipment Straight line rental 10 706 9 285 9 758 income asset Other investments 9 809 8 632 9 703 Current assets 3 638 6 770 10 808 Straight line rental 987 185 828 income asset Trade and other 720 832 357 receivables Taxation receivable 812 2 241 1 155 Cash and cash equivalents 1 119 3 512 8 468 Total assets 228 765 197 888 215 943 EQUITY AND LIABILITIES Equity and reserves 211 532 187 672 204 500 Non-current liabilities 10 810 7 964 9 634 Deferred tax 10 810 7 964 9 634 Current liabilities 6 423 2 252 1 809 Trade and other payables 6 423 1 986 1 809 Amount due to fellow - 266 - subsidiary Total equity and 228 765 197 888 215 943 liabilities Net asset value per share 734.7 651.8 710.0 (cents) Unaudited Consolidated Statement of Cash Flows for the six months ended 31 December 2009 Unaudited Unaudited Audited 31 December 31 December 30 June 2009 2008 2009 R`000 R`000 R`000
CASH FLOWS FROM OPERATING 6 711 1 070 9 246 ACTIVITIES Net cash generated from 16 600 11 211 24 682 operations Investment from other 347 1 251 1 642 income Taxation paid (3 902) (5 058) (7 865) Dividends paid (6 334) (6 334) (9 213) CASH FLOWS FROM INVESTING (14 060) (33 648) (36 602) ACTIVITIES Improvements to (1 254) (5 070) (6 944) investment properties Acquisition of other (106) (105) (1 176) investments Acquisition of investment (12 700) (28 473) (28 473) property Acquisition of furniture, - - (9) fittings and computer equipment CASH FLOWS FROM FINANCING - (1 055) (1 321) ACTIVITIES Reduction of loan from - (1 055) (1 321) fellow subsidiary Net decrease in cash and (7 349) (33 633) (28 677) cash equivalents Cash and cash equivalents 8 468 37 145 37 145 at beginning of the period Cash and cash equivalents 1 119 3 512 8 468 at end of the period Unaudited Consolidated Statement of Changes in Equity for the six months ended 31 December 2009 Stated Accumulated capital profits Total R`000 R`000 R`000 At 30 June 2008 4 146 174 242 178 388 Profit attributable to - 15 618 15 618 equity holders Dividend paid - (6 334) (6 334) At 31 December 2008 4 146 183 526 187 672 Profit attributable to - 19 708 19 708 equity holders Dividend paid - (2 880) (2 880) At 30 June 2009 4 146 200 354 204 500 Profit attributable to - 13 366 13 366 equity holders Dividend paid - (6 334) (6 334) Balance at 31 December 4 146 207 386 211 532 2009 Comments Basis of preparation The unaudited interim financial statements for the six months ended 31 December 2009 and comparative information have been prepared in terms of IAS34 (Interim Financial Reporting); the Listings Requirements of JSE Limited and the relevant sections of the South African Companies Act, 1973 (Act 61 of 1973) as amended. IAS1, (Presentation of Financial Statements) has introduced certain changes to the format and titles of the financial statements. The accounting policies applied which are based on reasonable judgements and estimates are in accordance with International Financial Reporting Standards (IFRS) and are consistent with those applied in the most recent audited financial statements. These interim results have not been audited or reviewed by the group`s auditors Financial results The directors are pleased to report that the property revenue for the six months ended 31 December 2009 increased by 17.4% to R16.2 million compared to R13.8 million for the six months ended 31 December 2008 ("the comparable period"). The group`s rental, exclusive of straight line rental accruals, has increased by 7.5% over the comparable period. Property expenses as well as administration expenses increased by 20.3% and 19.6% respectively. The increase in property expenses resulted largely from the introduction of the International Financial Reporting Standard, IFRS3, where transaction expenses incurred on property acquisitions and previously capitalised as part of the acquisition, now have to be expensed through the statement of comprehensive income. This increased property expenses by R877 000. Maintenance and refurbishment costs continue to be closely monitored and were well controlled. The board of directors has as a result of the difficult economic conditions experienced during the period under review decided not to declare an interim dividend for the six months ended 31 December 2009 (December 2008 R0.10 cents per ordinary share). It is their belief that these funds can be utilised to add to the group`s property portfolio thus giving long term sustainability and increased profit in the future. Property portfolio At 31 December 2009 the portfolio comprised 17 properties with a gross lettable area of 91 676m2. The sectoral spread by gross rentals comprised 85% industrial, 8% retail and 7% commercial. Vacancies continued to be extremely favourable with 1.1% of gross lettable area vacant which is in line with the comparable period. The company continues to transact primarily with `A` grade tenants. The lease expiry profile reflects that in terms of gross lettable area, 1.5% of the portfolio expires during the next 12 months and 82% from 2012 onwards. This provides a stable future income stream for the group. Segmental analysis The table below summarises by segment the position for the six months ended 31 December 2009. Segment assets include all operating assets used by a segment and consist of investment properties, receivables and cash. Assets not directly attributable to a particular segment are allocated to the corporate segment. Segment liabilities include all operating liabilities of a segment and consist principally of outstanding accounts. Industrial Retail Commercial Corporate Total R`000 R`000 R`000 R`000 R`000 Group income for the six months ended 31 December 2009 Property 13 830 1 542 808 - 16 180 revenue Straight 824 254 27 - 1 105 line rental income accrual Property (1 940) (83) (221) - (2 244) expenses Net profit 12 714 1 713 614 - 15 041 from property operations Group balance sheet at 31 December 2009 Non-current assets Investment 155 076 31 849 17 635 - 204 560 properties Other non- 7 555 4 206 8 754 52 20 567 current assets Current assets Straight 746 133 108 - 987 line rental income asset Trade and 302 - 169 249 720 other receivables Cash and - - - 1 119 1 119 cash equivalents Non-current - - - 10 810 10 810 liabilities Current liabilities Trade and 189 222 - 6 012 6 423 other payables Acquisitions, expansions and refurbishments During the period under review Putprop acquired an industrial property with a national tenant in the Pretoria metropolitan area with a gross lettable area of 3 640m2. The Eagle Canyon expansion capital project has been completed within budget and timeously. Valuation of property portfolio It is the groups` policy to value the entire investment property portfolio on an annual basis by an independent external valuer. The next valuation will be as at 30 June 2010. In addition the property portfolio is valued by the directors on a six monthly basis. The directors have valued the group`s investment portfolio at 31 December 2009 at R204 million, an increase of R5 million or 2.7% on the external valuation at 30 June 2009. The effects of any acquisitions during the reporting period have been ignored in this revaluation. Borrowings and capital commitments The company has no significant borrowings as at 31 December 2009 nor has it any capital commitments at that date. Directorate There have been no changes in the composition of the board of directors during the current period. Subsequent events There have been no significant subsequent events between the period 31 December 2009 and the release of this report, 15 March 2010. Prospects Trading conditions during the next reporting period are expected to continue to be challenging with costs being an area expected to come under pressure. Maintenance will increase substantially for the six months to June 2010. There are some indications that the economic activity is again starting to increase as is evidenced in the increase in output of the manufacturing sector which will flow into the consumer market and ultimately the property market both residential and commercial. However growth options at best remain limited in the near term. The board is of the opinion that a reasonable growth in earnings will be achieved and expects to resume dividend payments in its June 2010 results. On behalf of the board 15 March 2010 A B Adrian A Carleo A L Carleo-Novello Chairman Chief Executive Officer Managing Director Directorate A B Adrian* (Chairman), A Carleo (Chief Executive Officer), A L Carleo-Novello (Managing Director), B C Carleo, J E Smith (Financial) (British), P Senatore, P Nucci* * Independent Non-executive REGISTERED OFFICE 91 Protea Road Chislehurston Sandton 2196 TRANSFER SECRETARIES Computershare Investor Services (Proprietary) Limited 70 Marshall StreetMarshalltown PO Box 61051 Johannesburg 2107 SPONSOR Merchantec Capital Date: 15/03/2010 07:05:04 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. 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