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CENPROP/ CAPITAL - INTERIM RESULTS AND DIVIDEND DECLARATION
CENTRE CITY PROPERTY FUND
JSE Share code CEN
ISIN ZAE000001335
(Cenprop)
CAPITAL PROPERTY FUND
JSE Share code CPL
ISIN ZAE000001731
(Capital)
INTERIM RESULTS AND INCOME DISTRIBUTION DECLARATIONS
The directors of Property Fund Managers Limited, management company of Capital
and Cenprop announce that the interim unaudited consolidated results of the
Trusts for the six months ended 30 June 2002 are as follows:
CONSOLIDATED INCOME STATEMENTS
CENPROP CAPITAL
2002 2001 2002 2001
R`000 R`000 R`000 R`000
Net property income 45 442 47 175 31 473 32 717
Interest 857 1 966 1 323 1 781
46 299 49 141 32 796 34 498
Operating expenditure 22 571 19 574 12 225 10 529
Headline earnings 23 728 29 567 20 571 23 969
Net write down on revaluation
of investment property (136 286) - - -
Capital deficit transferred
from non-distributable reserve 136 286 - - -
Income for period available
for distribution 23 728 29 567 20 571 23 969
Units in issue 163 490 707 163 490 707 146 838 565 146 838 565
Net income
(cents per unit) 14,51 18,08 14,01 16,32
Headline earnings
(cents per unit) 14,51 18,08 14,01 16,32
Income distribution
(cents per unit) 14,51 18,08 14,01 16,32
Net asset value
(cents per unit) 326 316 253 255
CONSOLIDATED BALANCE SHEETS
Assets
Non-current assets
Investment property 412 672 531 047 370 995 365 897
Current assets 19 994 37 793 32 339 44 608
Total assets 432 666 568 840 403 334 410 505
Unitholders` interest
and liabilities
Unitholders` interest 396 664 516 956 372 178 374 547
Long-term liabilities 5 009 - - -
Current liabilities 30 993 51 884 31 156 35 958
Total unitholders` interest
and liabilities 432 666 568 840 403 334 410 505
CONSOLIDATED STATEMENTS
OF CHANGES IN UNITHOLDERS` INTEREST
Capital of Trust 252 668 252 551 312 838 311 751
Balance at beginning of period 252 781 252 551 312 869 311 751
Share issue expenses (113) - (31) -
Non-distributable reserve 143 986 264 395 59 340 62 796
Balance at beginning of period
as restated 280 272 264 395 59 340 62 796
Adjustment to current
independent valuation
of investment property (136 286) - - -
Undistributed income 10 10 - -
Balance at beginning of period 10 10 - -
Income for period available
for distribution 23 728 29 567 20 571 23 969
Income distributions (23 728) (29 567) (20 571) (23 969)
Total unitholders` interest
at end of period 396 664 516 956 372 178 374 547
ABRIDGED CONSOLIDATED CASH FLOW STATEMENTS
Net cash inflow/(outflow)
from operating activities 8 218 9 241 (808) (43)
Net cash outflow
from investing activities (11 078) - - -
Net cash inflow/(outflow)
from financing activities 5 009 (25 394) (873) (1 010)
Net decrease in cash resources (2 149) (16 153) (1 681) (1 053)
Cash resources at
beginning of period 16 259 42 572 29 021 36 302
Cash resources at end of period 14 110 26 419 27 340 35 249
COMMENTARY
CENPROP
Net Income
Net income available for distribution for the six month period ended 30 June
2002 amounted to R23,72 million or 14,51 cents/unit
(2001: R29,56 million or 18,08 cents/unit).
In accordance with the new accounting policies relating to the carrying value
of assets, investment property is stated at valuations on 30 June 2002.
Portfolio Review
Construction activity on The Mall of Rosebank reduced rental income by over
R1 million during the period under review. The completion of Phase I exceeded
expectations made at the time the project was commenced and major new tenants
such as Pick `n Pay and the Foschini Group report strong trading conditions.
Phase II, which primarily involves improvements to the unrefurbished part of the
centre will be completed in the fourth quarter of 2002.
Despite an intensive letting campaign, Andersen Park remains vacant, owing to
the over supply of office space in the Johannesburg northern suburbs. The
Society of Advocates lease over 10 595 m2 at Innes Chambers expired in March
2002 and 5 159 m2 was vacated. The remaining space was renewed at lower rentals,
half for three years and the balance subject to three month`s notice periods.
Southway Shopping Centre results have been disappointing and an extensive
reconfiguration of the centre is required in order to reverse the trend.
While well located in an improving precinct in the Cape Town CBD near to the
Convention Centre currently being constructed, 2 Long Street`s poor parking to
offices ratio continues to inhibit rental returns.
Proposed Strategy
With the effluxion of time and developments in its portfolio, Cenprop has
become unbalanced in that 75% of its portfolio is represented by The Rosebank
Mall and adjacent JHI House. Further, in relation to other listed vehicles, its
market capitalization is low with an adverse effect on liquidity.
After considering the alternatives, the board of PFM has resolved that
unitholders interests would best be served by a winding up of the Fund, in terms
of which The Mall and JHI House will be sold to Hyprop Investments Ltd., Innes
Chambers and NBS Building in the Johannesburg CBD to ApexHi Properties Ltd and
the remaining properties, with the exception of Andersen Park, to Capital
Property Fund. Cenprop is in the process of negotiating with various parties in
relation to the disposal of Andersen Park.
Since the purchase price payable by Hyprop and Capital will be in the form of
new units in those undertakings, unitholders will have the opportunity to remain
invested in a focused prime office and retail property loan stock company and in
a property unit trust encompassing a spread of good quality office, industrial
and retail properties in high demand areas.
Attention is drawn to the joint detailed cautionary announcement by PFM,
Hyprop and Capital. Unitholders are advised to continue to exercise caution in
their dealings in Cenprop units until such time that further announcements are
made.
INCOME DISTRIBUTION DECLARATION
Notice is hereby given of the declaration of Income Distribution No. 46 in
respect of the income distribution period 1 January 2002 to 30 June 2002. The
distribution amounts to 14,51 cents per unit. Unitholders are advised that the
last day of trade cum distribution will be Friday 23 August 2002. The units will
trade ex-distribution as from Monday 26 August 2002. The record date will be
Friday 30 August 2002 and the payment date will be Monday 2 September 2002.
Unitholders may not dematerialise or rematerialise their units between Monday
26 August 2002 and Friday 30 August 2002, both days inclusive.
On behalf of the Board
JHI Real Estate Limited
Secretaries
6 August 2002
CAPITAL
Net Income
Net income available for distribution for the period ended 30 June 2002
totalled R20,57 million or 14,01 cents/unit (2001: R23,97 million 16,32
cents/unit).
Portfolio Review
Deterioration of property fundamentals with increasing vacancy levels in an
oversupplied market has negatively affected earnings. In accordance with
Capital`s strategy of disposing of properties that no longer meet its investment
criteria, four properties have been sold for a total price of R12,0 million. Two
of these have been transferred, with transfer of the others expected shortly.
Revised Strategy
In order to rectify the deteriorating earnings of the Fund, an aggressive
strategy has been formulated in terms of which Capital`s portfolio of properties
will be expanded with the objective of creating a Fund focused on reasonable
quality office, retail and industrial properties, located in high demand areas.
Sales of poor quality properties and those located in decaying areas will be
accelerated.
Reference is made to the joint detailed cautionary announcement by Capital,
Cenprop and Hyprop which appears in the press today.
Insofar as Capital is concerned, the effect of this transaction will be the
purchase of two buildings from Cenprop at a total cost of
R61 million, namely 2 Long Street, a well located office building in the Cape
Town CBD and Southway Mall, a convenience shopping centre in Durban. The
purchase consideration will be settled through the issue of new units in Capital
at a price to be determined on the issue date in accordance with the relevant
provisions of the Unit Trust Control Act, No 54 1981, and the Capital Trust
Deed.
It is planned that Southway Mall will be reconfigured at a cost of
R14 million, subject to certain major new lettings to be achieved.
Several other potential transactions are being investigated, the conclusion of
which, together with the above purchases, will further improve quality of
earnings.
With regard to the above transactions, unitholders are advised to continue to
exercise caution in their dealings in Capital units until such time as a further
announcement is made.
INCOME DISTRIBUTION DECLARATION
Notice is hereby given of the declaration of Income Distribution No. 38 in
respect of the income distribution period 1 January 2002 to 30 June 2002. The
distribution amounts to 14,01 cents per unit. Unitholders are advised that the
last day of trade cum distribution will be Friday 23 August 2002. The units will
trade ex-distribution as from Monday 26 August 2002. The record date will be
Friday 30 August 2002 and the payment date will be Monday 2 September 2002.
Unitholders may not dematerialise or rematerialise their units between Monday
26 August 2002 and Friday 30 August 2002, both days inclusive.
On behalf of the Board
JHI Real Estate Limited
Secretaries
6 August 2002
REGISTERED OFFICE:
1st Floor, JHI House, 11 Cradock Avenue,
Corner Baker Street, Rosebank, 2196
PO Box 2100, Parklands, 2121
TRANSFER SECRETARIES:
Computershare Investor Services Limited,
8th Floor, 11 Diagonal Street, Johannesburg, 2001
PO Box 1053, Johannesburg, 2000
PROPERTY FUND MANAGERS LTD
Co. Reg. No. 1980/009531/06
Date: 12/08/2002 07:21:00 AM Supplied by www.sharenet.co.za
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