Wrap Text
AHL - AH-Vest Limited - Disposal of head office property and relocation of
factory and head office
AH-VEST LIMITED
("AH-Vest" or "the Company")
(Incorporated in the Republic of South Africa)
(Registration number 1989/000100/06)
Share code: AHL ISIN code: ZAE000129177
DISPOSAL OF HEAD OFFICE PROPERTY AND RELOCATION OF FACTORY AND HEAD OFFICE
INTRODUCTION
Shareholders are hereby advised that the Company has concluded an agreement
to dispose of the Company`s head office premises known as Portion 27 of the
Farm Vierfontein 321 IQ, located at 103 Booysens Reserve Road Johannesburg,
with effect from the date of transfer. Pursuant to the disposal of the
aforementioned premises as well as due to the fact that the lease at the
factory premises comes to an end in January 2013, the Company has entered
into a lease agreement with the purpose of relocating the factory and
headquarters into one location, the details of which are mentioned below.
RATIONALE FOR THE DISPOSAL OF THE HEAD OFFICE PROPERTY AND THE INTENDED
RELOCATION OF THE FACTORY PREMISES
After a two year investigation into new premises in anticipation of the
existing Tarlton factory lease coming to an end, and in line with
management`s strategy to relocate the business headquarters and factory into
one location closer to its customers, the board has resolved to dispose of
the head office property as it will be superfluous to requirements. The
combined head office and factory is also expected to further improve
controls and systems, reducing reliance on external service providers. The
new factory and offices is being built to our specifications and is within a
30 kilometre radius to our main trade customers` distribution centres and
our centralised warehouse. The Company has plans to install new plant on
certain lines to improve its competitiveness and be in line with the
Consumer Protection Act, reduce our carbon foot print, reduce down time and
improve the working environment for our staff as well as improve on cost
effectiveness.
The proceeds of the disposal, after associated costs, will be utilised to
reduce the Land Bank liability.
Due to the abovementioned disposal of property and intended relocation of
the company`s premises, the company has entered into a lease agreement with
JR209 Investments (Proprietary) Limited to rent the premises known as Twenty
One Industrial Estate, situated on the R21 adjacent to the Olifantsfontein
intersection in Midrand. The premises are deemed suitable by management to
meet the relocation criteria of the Company`s headquarters and factory and
will provide additional capacity to the Company.
The monthly rental for the new combined premises will equate to R337 757.00,
excluding VAT, and the lease period will be 10 years with an option to
renew, on terms to be agreed.
CONSIDERATION FOR THE DISPOSAL AND CONDITIONS PRECEDENT
The total cash consideration for the disposal of the property is R5 150 000
(Five million one hundred and fifty thousand Rand). The disposal is to an
unrelated party, namely Tuffson Investments 1101 (Proprietary) Limited, and
does not require shareholder approval. The disposal was conditional on
approval by Land Bank, which approval has subsequently been received.
PRO FORMA FINANCIAL EFFECTS OF THE DISPOSAL
The table below sets out the unaudited pro forma financial effects of the
impact of the disposal of the head office property ("disposal") on AH-Vest`s
basic earnings per share, headline earnings per share, net asset value per
share and net tangible asset value per share and have been prepared to
illustrate the impact of the disposal on the unaudited financial information
of AH-Vest for the six months ended 30 September 2011, had the disposal
occurred on 1 April 2011 for statement of comprehensive income purposes and
on 30 September 2011 for statement of financial position purposes.
The unaudited pro forma financial effects set out below are the
responsibility of Ah-Vest`s directors and have been prepared for
illustrative purposes only and because of their nature may not fairly
present the financial position, changes in equity, the results of operations
or cashflows of Ah-Vest after the disposal.
Before1 After % change
Basic earnings per 2.27 1.69 -25.36%
share (cents)
Headline earnings per 2.27 2.48 9.36%
share (cents)
Net asset value per 17.41 16.37 -5.97%
share
Net tangible asset per 16.32 15.28 -6.36%
share
Number of shares in 101 973 333 101 973 333 0.00%
issue
Notes:
1.) The "Before" basic earnings and headline earnings per share and net
asset value and net tangible asset value per share have been extracted
without adjustment from the unaudited results of AH-Vest for the six
months ended 30 September 2011.
2.) The "After" column shows the effect as at 30 September 2011 of the
disposal of the investment property and the reduction of the liability
to Land Bank (net of disposal costs), with an after tax loss on
disposal of R802 331 and disposal costs of R256 500 being adjusted
against retained earnings for net asset value and net tangible asset
value per share purposes.
3.) The "After" column for earnings and headline earnings per share
information, has assumed that the disposal occurred on 1 April 2011 and
that the company benefitted from reduced depreciation costs as well as
interest charges at the Land Bank lending rate of 9.00%, which savings
will have a continuing effect on the company. The loss on disposal of
R932 943 and transaction costs of R256 500 have been assumed, both of
which will have a once off effect on the Company. Notional taxation at
28% has been assumed for income tax purposes and 14% for capital gains
tax purposes.
Johannesburg
7 June 2012
Designated Advisor
Arcay Moela Sponsors (Pty) Limited
Date: 07/06/2012 16:00:04 Supplied by www.sharenet.co.za
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