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Group's interim results for the six months ended 31 December 2014
Orion Real Estate Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/021085/06)
Share code: ORE ISIN: ZAE000075651
("Orion Real Estate" or "the company" or "the Group")
Group's Interim Results
for the six months ended 31 December 2014
Abridged Consolidated Statement of Financial Position
as at 31 December 2014
Unaudited Unaudited Restated
six months six months audited year
ended ended ended
31 December 31 December 30 June
Figures in Rand 2014 2013 2014
ASSETS
Non-current assets 783 342 702 748 361 519 803 667 130
Gross investment properties 760 267 668 730 936 034 783 223 686
Straight-line rental income adjustment (11 161 806) (9 175 070) (11 045 878)
Net investment properties 749 105 862 721 760 964 772 177 808
Straight-line lease asset 10 163 755 9 175 070 10 193 238
Property, plant and equipment 1 136 484 1 178 646 1 289 050
Trade and other receivables 22 936 601 16 246 839 20 007 034
Current assets 41 135 850 36 576 795 31 094 237
Loans to related parties 17 773 858 13 292 066 14 508 175
Straight-line lease asset 998 051 – 852 640
Trade and other receivables 15 890 873 22 835 839 14 959 234
Cash and cash equivalents 6 473 068 448 890 774 188
Investment properties held for sale 18 956 018 27 537 484 –
Total assets 843 434 570 812 475 798 834 761 367
EQUITY AND LIABILITIES
Capital and reserves
Share capital and share premium 74 235 526 74 235 526 74 235 526
Debenture reserve 10 675 886 10 675 886 10 675 886
Retained earnings 373 181 030 337 750 149 369 012 064
Total equity attributable to owners of the parent 458 092 442 422 661 561 453 923 476
Non-controlling interest (271 965) (274 617) (270 127)
Total equity 457 820 477 422 386 944 453 653 349
Non-current liabilities 292 170 907 307 834 233 302 024 802
Linked debentures 54 974 397 54 438 419 54 974 397
Borrowings 157 483 536 179 366 530 167 250 231
Deferred tax liabilities 79 712 974 74 029 284 79 800 174
Current liabilities 93 443 186 82 254 621 79 083 216
Current income tax liabilities 11 800 133 13 137 130 11 005 713
Loans from directors 18 248 18 508 18 508
Loans from related parties 2 855 261 3 111 385 275 289
Tenant deposits 6 714 405 6 591 574 6 563 381
Trade and other payables 51 470 180 38 940 230 38 718 408
Borrowings 18 370 320 18 037 688 17 923 438
Bank overdraft 2 214 639 2 418 106 4 578 479
Total liabilities 385 614 093 390 088 854 381 108 018
Total equity and liabilities 843 434 570 812 475 798 834 761 367
Abridged Consolidated Statement of Comprehensive Income
for the six months ended 31 December 2014
Unaudited Unaudited Restated
six months six months audited year
ended ended ended
31 December 31 December 30 June
Figures in Rand 2014 2013 2014
Revenue 52 272 465 48 067 905 101 059 214
Gross property revenue 51 110 380 46 865 318 96 708 821
Property revenue 51 110 380 46 865 318 94 838 010
Straight-line of lease accrual – – 1 870 811
Other income 445 072 568 498 3 049 775
Other direct property operating costs (32 350 080) (30 951 970) (68 146 174)
Adminstrative and management expenses – (52 066) (200 760)
Repairs and maintenance (4 098 452) (3 606 126) (7 982 122)
Fair value adjustment – – 38 816 939
Gross change in fair value of
investment property – – 40 687 750
Straight-line lease adjustment – – (1 870 811)
Fair value adjustment to trade receivables (172 577) – 4 656 177
Operating profit before interest 14 934 343 12 823 654 66 902 656
Finance income 717 013 634 089 3 171 429
Linked debenture interest – – (535 978)
Finance costs (8 567 238) (8 523 998) (19 534 947)
Profit before taxation 7 084 118 4 933 745 50 003 160
Taxation (2 916 990) (1 379 894) (10 080 489)
Profit for the period 4 167 128 3 553 851 39 922 671
Other comprehensive income – – –
Total comprehensive income for
the period 4 167 128 3 553 851 39 922 671
Profit/(Loss) and total comprehensive
income/(loss) for the period attributable to:
Owners of the parent 4 168 966 3 557 256 39 921 586
Non-controlling interest (1 838) (3 405) 1 085
4 167 128 3 553 851 39 922 671
Earnings per linked unit
Basic earnings per linked unit (cents) 0.66 0.57 6.37
Diluted earnings per linked unit (cents) 0.66 0.57 6.37
Headline earnings per linked unit (cents) 0.75 0.57 1.44
Diluted headline earnings per linked unit
(cents) 0.75 0.57 1.44
Reconciliation of basic earnings and
headline earnings:
Profit attributable to equity holders of the
parent 4 168 966 3 557 256 39 921 586
Fair value adjustment to investment
properties – – (33 093 463)
Linked debenture interest – – 385 904
Loss on disposal of investment property 537 068 – 1 805 538
Headline earnings 4 706 033 3 557 256 9 019 565
Weighted average linked units in issue 67 009 822 67 009 822 67 009 822
Consolidated Statements of Cash Flows
for the six months ended 31 December 2014
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 December 31 December 30 June
Figures in Rand 2014 2013 2014
Cash flows from operating activities 22 509 291 16 790 736 25 433 108
Cash generated by operations 24 734 283 18 641 191 30 351 993
Interest received 717 013 634 089 3 171 429
Interest paid (626 451) (1 802 809) (1 454 054)
Taxation paid (2 315 555) (681 735) (6 636 260)
Cash flows from/(to) investing activities 394 388 (8 319 053) 7 469 777
Cash flows to financing activities (14 840 959) (12 170 853) (38 437 130)
Net increase in cash, cash equivalents and bank
overdrafts 8 062 720 (3 699 170) (5 534 245)
Cash, cash equivalents and bank overdrafts at the
beginning of the period (3 804 291) 1 729 954 1 729 954
Cash, cash equivalents and bank overdrafts at the
end of the period 4 258 429 (1 969 216) (3 804 291)
Statement of Changes in Equity
for the six months ended 31 December 2014
Total share Non-
Share Share capital and Debenture Retained controlling Total
Figures in Rand capital premium premium reserve earnings Total interest equity
Balance at 30 June 2013 6 270 098 67 965 428 74 235 526 10 675 886 329 090 478 414 001 890 (271 212) 413 730 678
Total comprehensive income for
the period – profit – – – – 3 557 256 3 557 256 (3 405) 3 553 851
Balance at 31 December 2013 6 270 098 67 965 428 74 235 526 10 675 886 332 647 734 417 559 146 (274 617) 417 284 529
Total comprehensive income for
the period – profit 36 364 330 36 364 330 4 490 36 368 820
Balance at 30 June 2014 6 270 098 67 965 428 74 235 526 10 675 886 369 012 064 453 923 476 (270 127) 453 653 349
Total comprehensive income for
the period – profit – – – – 4 168 966 4 168 966 (1 838) 4 167 128
Balance at 31 December 2013 6 270 098 67 965 428 74 235 526 10 675 886 373 181 030 458 092 442 (271 965) 457 820 477
Segment Reporting for the period ending 31 December 2014
R % R %
Revenue (excluding recoveries)
Commercial 19 590 801 49 Gauteng 27 375 967 70
Industrial 3 859 831 10 Western Cape 3 298 221 8
Retail 10 536 225 27 Mpumalanga 7 913 830 20
Hospitality 5 027 613 13 KwaZulu-Natal 797 289 2
Residential 370 837 1
39 385 307 100 39 385 307 100
Property values (including properties held for sale, before
adjustment for straight-lining of leases)
Commercial 329 978 783 42 Gauteng 583 455 065 75
Industrial 86 843 163 11 Western Cape 34 160 718 4
Retail 178 559 352 23 Mpumalanga 151 907 903 20
Hospitality 81 999 571 11 KwaZulu-Natal 9 700 000 1
Residential 48 442 817 6
Land 53 400 000 7
779 223 686 100 779 223 686 100
Borrowings (excluding instalment sales and loans)
Commercial 68 370 367 43 Gauteng 117 982 776 75
Industrial 25 002 812 16 Western Cape 21 654 782 14
Retail 46 174 013 29 Mpumalanga 14 738 084 9
Hospitality 10 427 549 7 KwaZulu-Natal 3 639 322 2
Residential 8 040 223 5
158 014 964 100 158 014 964 100
Tenant categories
Commercial A 1 856 645 5 Gauteng A 2 126 754 7
B 6 439 399 20 B 9 371 613 29
C 9 652 037 30 C 10 560 058 32
Industrial A – – Western Cape A 88 436 –
B 2 162 410 6 B 1 998 892 6
C 1 386 460 4 C 1 123 061 3
Retail A 1 883 616 6 Mpumalanga A 1 525 072 5
B 2 214 111 7 B 858 492 3
C 4 395 683 14 C 4 121 898 13
Hospitality A – – KwaZulu-Natal A – –
B 2 210 366 7 B 797 289 2
C – – C – –
Residential A – –
B – –
C 370 838 1
32 571 565 100 32 571 565 100
A: Represents major listed companies.
B: Represents smaller listed companies and big unlisted companies.
C: Represents smaller unlisted companies and private businesses.
Gross lettable area m(2) % m(2) %
Commercial 52 232 42 Gauteng 89 071 71
Industrial 21 013 17 Western Cape 4 909 4
Retail 36 486 29 Mpumalanga 22 592 18
Hospitality 15 687 12 KwaZulu-Natal 8 846 7
125 418 100 125 418 100
Commentary on the December 2014 Interim Financial Statements
1. Operating performance
The Group revenue increased from R48.1 million in December 2013 to R52.2 million in December 2014. The increase of 8.75% is mainly attributable
to annual rental increases. Other direct property operating costs increased from R31.0 million to R32.4 million for the same period. This represents
an increase of 4.52%. The operating profit increased with 13.35% from R12.8 million to R15.0 million. The total comprehensive income for the period
improved from a profit of R3 553 851 to a profit of R4 167 128 constituting an increase of 17.3%.
2. Basis of preparation
The condensed unaudited consolidated results have been prepared in accordance with the Framework concepts and the measurement and
recognition requirements of the International Financial Reporting Standards, containing information required by the IAS 34: Interim Financial
Reporting, the AC 500 standards as issued by the Accounting Practices Board and in the manner required by the Companies Act and the JSE
Listings Requirements. These results were prepared by Sandarie le Roux CA(SA).
3. Contingent liabilities
The company has signed surety for the obligations of its subsidiaries in respect of mortgage bond finance and has guaranteed the debts of a wholly
owned subsidiary company until that company's assets, fairly valued, exceeds its liabilities, and whilst it remains a wholly owned subsidiary.
The matter regarding the Selborne Hotel acquisition remains under review.
The Body Corporate of Erf 195 Elma Park has initiated liquidation proceedings for arrear levies which are being contested due to questions regarding
the levies raised as well as the expense allocation basis used. The Group is in the process of launching a counter application; however, are currently
in negotiations in an attempt to settle the matter with the Body Corporate.
4. Investment property acquired and disposed
4.1 Acquired
The Lydenburg property was acquired during May 2014.
4.2 Disposed
The Group disposed of the Score-Mfuleni building during the reporting period.
5. Subsequent events
The Group is in the process of disposing of Mountain View Shopping Centre and Marlboro Erf 142. The directors are not aware of any other
reportable matter or circumstance arising since the end of the financial year, not reported on SENS, which would affect the operations of the Group
or the results of these operations significantly.
6. Dividends
No dividends were paid or declared during the financial period under review.
7. Future prospects
The trading conditions remained tight during the reporting period, but the cost savings resulting from the restructuring from
the previous financial year will continue to have a positive influence on the results in the remaining period.
Johannesburg
24 March 2015
Directors
R S Wilkinson(*), M D K Mthembu(*), A C Gmeiner(**), F Gmeiner (MD)(#), C B Nolte (FD)(#)
(*)Independent non-executive (**)Non-executive (#)Executive
Company secretary Sponsor
Corporate Governance Arbor Capital
Facilitators CC Sponsors (Pty) Limited
Transfer office
Computershare Investor Services Proprietary Limited
Date: 24/03/2015 05:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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