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Financial effects and withdrawal of cautionary announcement
EQUITES PROPERTY FUND LIMITED
(formerly VB Transport (Proprietary) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2013/080877/06)
JSE share code: EQU ISIN: ZAE000188843
(Approved as a REIT by the JSE)
(“Equites” or “the company”)
FINANCIAL EFFECTS AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the announcement released on SENS on Friday, 29 May 2015 relating to the merger agreement
in terms of which Equites will acquire all of the shares and claims in Intaprop Proprietary Limited in consideration for
Equites shares (“the acquisition”).
2. FINANCIAL EFFECTS
2.1. Forecast financial information
2.1.1. Set out below are the forecast revenue, net property income, net operating profit and distributable
earnings of the acquisition (“the forecasts”) for the eight months ending 29 February 2016 and the
year ending 28 February 2017 (“the forecast periods”). The forecasts have been prepared on the
assumption that the acquisition will be implemented on 1 July 2015 and on the basis that the
forecasts include forecast results for the duration of the forecast periods.
2.1.2. The forecasts, including the assumptions on which they are based and the financial information
from which they are prepared, are the responsibility of the directors of Equites. The forecasts have
not been reviewed or reported on by independent reporting accountants.
2.1.3. The forecasts presented in the table below have been prepared in accordance with Equites’
accounting policies and in compliance with IFRS.
Forecast for the Forecast for the
8 months ending year ending
29 February 28 February
2016 2017
R’000 R’000
Basic contractual rental income and tenant recoveries 105 335 150 922
Straight-line rental accrual 28 157 34 488
Revenue 133 492 185 410
Net property income* 118 488 161 517
Net operating profit* 117 085 160 247
Total comprehensive profit for the period*^ 55 203 83 519
Distributable earnings 27 546 49 031
*Includes adjustment for the straight-lining of leases
^Includes finance costs
2.1.4. Material assumptions underlying the forecasts:
2.1.4.1. The properties underlying the forecast comprise the acquired Intaprop portfolio
only.
2.1.4.2. Rental income and tenant recoveries comprise existing lease agreements and a rental
guarantee including stipulated increases, all of which are valid and enforceable.
2.1.4.3. The forecasts include no uncontracted revenue.
2.1.4.4. Property operating expenditure has been forecast on a line-by-line basis for each
property based on management's review of historical expenditure and discussion
with the property managers.
2.1.4.5. The commercial effective date for the acquired portfolio is 1 July 2015.
2.1.4.6. Equites will refinance some of the bank debt assumed with Intaprop. This
refinancing will only take place once the acquisition is unconditional, which has
been assumed to be 30 September 2015. Once refinanced, interest exposure is
assumed to be fixed at margins currently available to Equites.
2.1.4.7. For the purpose of the forecasts, ruling lending rates have been assumed to remain
unchanged over the forecast period.
2.1.4.8. The Midas property is currently subject to a sale agreement, transfer of which is
assumed to take place on 1 January 2016.
2.2. Pro forma financial effects
2.2.1. Set out below are the pro forma statement of financial effects of the acquisition on Equites’ net
asset value per share and net tangible asset value per share (“pro forma financial effects”). The
pro forma financial effects are the responsibility of the directors of Equites and have been provided
for illustrative purposes only to provide information about how the acquisition may have affected
the financial position of Equites. Because of their nature, these pro forma financial effects may not
fairly represent the financial position of Equites shareholders after the acquisition.
Before the After the
acquisition acquisition % change
NAV per share (cents) 1 137 1 153 1.4%
NTAV per share (cents) 1 137 1 153 1.4%
2.2.2. Material assumptions underlying the pro forma financial effects:
2.2.2.1. The financial information in the “Before the acquisition” column has been extracted
unchanged from the Equites audited annual financial statements for the year ended
28 February 2015.
2.2.2.2. The financial information in the “After the acquisition” column assumes Equites
acquires 100% of Intaprop shares and for the purposes of the forecast assumes the
acquisition had been implemented on 28 February 2015.
2.2.2.3. The acquisition of shares in Intaprop is accounted for in terms of ISA 40 Investment
Property and does not give rise to goodwill.
3. WITHDRAWAL OF CAUTIONARY
Equites shareholders are advised that following the release of the financial effects of the acquisition, caution is no longer
required to be exercised by Equites shareholders when dealing in the company’s shares.
10 June 2015
Corporate advisor and sponsor
Java Capital
Date: 10/06/2015 04:10:00 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. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
