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Group condensed unaudited interim financial results for the six months ended 31 Dec 2015
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 condensed unaudited interim financial results announcement
For the six months ended 31 December 2015
Abridged Consolidated Statement of Financial Position
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
Figures in Rand 31 December 2015 31 December 2014 30 June 2015
ASSETS
Non-current assets 779 996 721 783 342 702 773 353 335
Gross investment properties 778 656 632 760 267 668 772 015 611
Straight-line rental income adjustment - (11 161 806) -
Net investment properties 778 656 632 749 105 862 772 015 611
Straight-line lease asset - 10 163 755 -
Property, plant and equipment 1 340 089 1 136 484 1 337 724
Non current trade & other receivables - 22 936 601 -
Current Assets 82 815 262 41 135 850 66 673 264
Loans to related parties 18 920 949 17 773 858 19 923 506
Loans to directors 244 995 998 051 -
Trade and other receivables 62 644 071 15 890 873 43 143 467
Cash and cash equivalents 1 005 247 6 473 068 3 606 291
Investment properties held for sale 2 708 762 18 956 018 -
Total Assets 865 520 745 843 434 570 840 026 599
EQUITY AND LIABILITIES
Capital and reserves
Stated Capital/share capital
and share premium 114 336 674 74 235 526 114 336 674
Debenture reserve - 10 675 886 -
Retained earnings 509 379 722 373 181 030 504 392 314
Total equity attributable to shareholders 623 716 396 458 092 442 618 728 988
Non-controlling interest (286 933) (271 965) (286 933)
Total equity 623 429 463 457 820 477 618 442 055
Non-current liabilities 131 551 923 292 170 907 129 210 274
Linked debentures - 54 974 397 -
Borrowings 129 695 530 157 483 536 127 353 881
Deferred tax liabilities 1 856 393 79 712 974 1 856 393
Current Liabilities 110 539 359 93 443 186 92 374 270
Current income tax liabilities 8 715 952 11 800 133 8 610 355
Loans from directors 18 248 18 248 18 248
Loans from related parties 159 690 2 855 261 21 012
Tenant deposits 7 006 114 6 714 405 6 961 064
Trade and other payables 64 751 002 51 470 180 47 452 023
Borrowings (ST) 26 723 906 18 370 320 25 758 076
Bank overdraft 3 164 447 2 214 639 3 553 492
Total Liabilities 242 091 282 385 614 093 221 584 544
Total Equity and Liabilities 865 520 745 843 434 570 840 026 599
Abridged Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
Figures in Rand 31 December 2015 31 December 2014 30 June 2015
Revenue 45 398 511 52 272 465 117 120 108
Gross property revenue 42 882 469 51 110 380 99 547 277
Property revenue 42 882 469 51 110 380 101 171 545
Straight-line of lease accrual - - (1 624 268)
Other income 86 016 445 072 13 080 160
Other direct property operating costs (19 752 994) (17 898 273) (51 762 226)
Administrative and management expenses (10 745 228) (14 451 807) (23 123 829)
Repairs and maintenance (2 305 752) (4 098 452) (5 877 678)
Fair value adjustment - - 13 372 211
Gross change in fair value of
investment property - - 11 747 942
Straight-line lease adjustment - - 1 624 268
Fair value adjustment to trade receivables - (172 577) 446 238
Operating profit before interest 10 164 511 14 934 343 45 682 153
Finance income 2 430 027 717 013 4 492 671
Finance costs (7 231 733) (8 567 238) (17 284 790)
Profit before taxation 5 362 805 7 084 118 32 890 034
Taxation (375 396) (2 916 990) 76 924 274
Profit for the period 4 987 408 4 167 128 109 814 308
Profit/(Loss) and total comprehensive
income/(loss) for the period attributable to:
Shareholders 4 987 408 4 168 966 109 831 114
Non-controlling interest - (1 838) (16 806)
4 987 408 4 167 128 109 814 308
Per share information
Basic earnings per share (cents) 0.80 0.66 17.52
Diluted earnings per share (cents) 0.80 0.66 17.51
Headline earnings per share (cents) 0.80 0.75 17.52
Diluted headline earnings per share (cents) 0.80 0.58 17.51
Weighted average shares in issue 627 009 822 627 009 822 627 009 822
Reconciliation of basic
earnings and headline
earnings:
Profit attributable to shareholders 4 987 408 4 168 966 109 831 114
Loss on disposal of investment property - 537 068 -
Headline earnings 4 987 408 4 706 033 109 831 114
Statement of Changes in Equity
for the six months ended 31 December 2015
Total
Share Non-
Share Share Capital & Debenture Retained controlling Total
Figures in Rand capital premium premium reserve earnings Total Interest equity
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 2014 6 270 098 67 965 428 74 235 526 10 675 886 373 181 030 458 092 442 (271 965) 457 820 477
Total comprehensive income for the
period - profit 105 662 149 105 662 149 (14 968) 105 647 181
REIT conversion of debentures reserve - - - (10 675 886) 10 675 886 - - -
REIT conversion of debentures
valuation premium - - - - 14 873 249 14 873 249 - 14 873 249
REIT conversion of share premium 67 965 428 (67 965 428) - - - - - -
REIT conversion of debenture
capital & premium 40 101 148 - 40 101 148 - - 40 101 148 - 40 101 148
Balance at 30 June 2015 114 336 674 - 114 336 674 - 504 392 314 618 728 988 (286 933) 618 442 055
Total comprehensive income
for the period - profit 4 987 408 4 987 408 - 4 987 408
Balance at 31 Dec 2015 114 336 674 - 114 336 674 - 509 379 722 623 716 396 (286 933) 623 429 463
Consolidated Statements of Cash Flows
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
Figures in Rand 31 December 2015 31 December 2014 30 June 2015
Cash flows from/(to) operating activities 1 969 334 22 509 289 7 700 193
Cash generated by operations 7 040 840 24 734 283 22 839 234
Interest received 2 430 027 717 013 4 492 671
Interest paid (7 231 733) (626 451) (17 284 790)
Taxation paid (269 800) (2 315 556) (2 346 922)
Cash flows to/from investing activities (6 049 624) 394 388 28 632 958
Cash flows to/from financing activities 3 446 155 (14 840 959) (32 476 060)
Net increase/decrease in cash, cash equivalents
and increase in bank overdrafts (634 135) 8 062 718 3 857 091
Cash, cash equivalents and bank
overdrafts at the beginning of the period 52 799 (3 804 291) (3 804 291)
Cash, cash equivalents and bank
overdrafts at the end of the period (2 159 200) 4 258 427 52 800
Segment Reporting for the period ending 31 Dec 2015
Revenue (excluding recoveries) % %
Commercial 11 895 449.57 44.3% Gauteng 18 644 897 69.39%
Industrial 2 313 828.82 8.6% Western Cape 519 709 1.93%
Retail 9 096 606.63 33.9% Mpumalanga 7 447 316 27.72%
Hospitality 3 137 004.58 11.7% Kwazulu Natal 256 800 0.96%
Residential 425 832.39 1.6%
26 868 722 100% 26 868 722 100%
Property Values (including properties held for sale) % %
Commercial 340 395 500 43.87% Gauteng 604 883 013 77.96%
Industrial 89 515 637 11.54% Western Cape 17 553 655 2.26%
Retail 162 766 888 20.98% Mpumalanga 143 061 490 18.44%
Hospitality 80 874 438 10.42% Kwazulu Natal 10 400 000 1.34%
Residential 48 945 694 6.31%
Land 53 400 000 6.88%
775 898 158 100% 775 898 158 100%
Gross Lettable area % %
Commercial 53 331 43.0% Gauteng 93 495 75.3%
Industrial 21 988 17.7% Western Cape 8 784 7.1%
Retail 27 576 22.2% Mpumalanga 15 850 12.8%
Hospitality 16 029 12.9% Kwazulu Natal 6 000 4.8%
Residential 5 205 4.2%
124 129 100% 124 129 100%
Borrowings (excluding instalment sales & loans) % %
Commercial 66 688 509 51.04% Gauteng 107 463 647 82.2%
Industrial 20 204 080 15.46% Western Cape - -
Retail 24 860 968 19.03% Mpumalanga 19 957 830 15.3%
Hospitality 11 740 651 8.99% Kwazulu Natal 3 239 883 2.5%
Residential 7 167 153 5.49%
130 661 360 100% 130 661 360 100%
Rating of tenants (rental income) % %
Commercial A 1 384 067 5.2% Gauteng 1 878 903 7.0%
B 4 468 584 16.6% 8 045 584 29.9%
C 6 042 798 22.5% 8 720 409 32.5%
Industrial B 1 836 023 6.8% Western Cape 8 123 0.0%
C 477 806 1.8% 450 325 1.7%
Retail A 1 335 417 5.0% 61 262 0.2%
B 4 005 199 14.9% Mpumalanga 1 546 308 5.8%
C 3 755 990 14.0% 1 563 170 5.8%
Hospitality B 3 137 005 11.7% 4 337 838 16.1%
Residential C 425 832 2% Kwazulu Natal 256 800 1.0%
26 868 721 100% 26 868 722 100%
A: Represents major listed companies.
B: Represents smaller listed companies and big unlisted companies.
C: Represents smaller unlisted companies and private businesses.
Commentary on the December 2015 Interim Financial Statements
1. Operating performance
The Group revenue decreased from R52.2 million in December 2014 to R45.4 million in December 2015. The decrease of 13.5% is mainly attributable
to a decrease in the number of buildings in the Group’s portfolio, in the current period. Other direct operating, administrative and management
costs decreased from R32.4 million to R30.5 million. This represents a decrease of 5.9%. The operating profit decreased with 31.9% from
R15 million to R10.2 million. The total comprehensive income for the period improved from a profit of R4 167 128 to a profit of R4 987 408
constituting an increase of 19.7%.
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 Listing Requirements.
The accounting policies applied, are consistent with those applied in the annual financial statements for the year ended 30 June 2015.
These results were prepared by Anthony Old 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 debts of a wholly
owned subsidiary company until the company’s assets, fairly valued, exceeds its liabilities, and whilst it remains a wholly owned subsidiary.
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 has instituted a counter claim for damages
incurred as a result of the Body Corporate’s actions. The legal process is currently being undertaken in the High Court.
4. Investment property acquired and disposed
No properties were acquired or disposed in the current period.
5. Subsequent events
The directors are not aware of any reportable matter or circumstances arising since the end of the financial period, not reported on SENS,
which would significantly affect the operations of the Group or the financial results of those operations.
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, the drop in revenue were partially offset by cost savings
which have continued to be a major emphasis for the Group in the current period.
Johannesburg
30 March 2016
Directors:
R S Wilkinson *
M D K Mthembu *
A C Gmeiner **
F Gmeiner (MD) #
A B Old #
T F J Oosthuizen *
* Independent non-executive
** Non-executive
# Executive
Company Secretary:
Corporate Governance Facilitators cc
Registered Office:
16th Floor, Orion House, 49 Jorrison Street
Braamfontein, Johannesburg, 2017
Sponsor:
Arbor Capital Sponsors Proprietary Limited
Transfer office:
Computershare Investor Services Proprietary Limited
Income Tax nr: 9769196719
Date: 30/03/2016 05:35:00 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
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