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Group’s Interim Results for the six months ended 31 December 2013
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 2013
Abridged consolidated statement of financial position
as at 31 December 2013
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 December 31 December 30 June
Figures in Rand 2013 2012 2013
ASSETS
Non-current assets 748 361 519 729 816 085 748 712 118
Gross investment properties 730 936 034 714 195 798 733 823 518
Straight-line rental income adjustment (9 175 070) (9 337 896) (9 175 070)
Net investment properties 721 760 964 704 857 902 724 648 448
Straight-line lease asset 9 175 070 9 337 896 9 175 070
Property, plant and equipment 1 178 646 466 618 564 705
Trade and other receivables 16 246 839 15 153 669 14 323 895
Current assets 36 576 795 22 280 452 31 332 290
Loans to related parties 13 292 066 6 898 832 5 740 324
Trade and other receivables 22 835 839 14 701 747 21 404 542
Cash and cash equivalents 448 890 679 873 4 187 424
Investment properties held for sale 27 537 484 – 24 650 000
Total assets 812 475 798 752 096 537 804 694 408
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 337 750 149 303 917 870 334 192 893
Total equity attributable to owners of the parent 422 661 561 388 829 282 419 104 305
Non-controlling interest (274 617) (270 321) (271 212)
Total equity 422 386 944 388 558 961 418 833 093
Non-current liabilities 307 834 233 259 189 983 297 834 463
Linked debentures 54 438 419 49 386 923 54 438 419
Borrowings 179 366 530 141 659 844 169 992 645
Deferred tax liabilities 74 029 284 68 143 216 73 403 399
Current liabilities 82 254 621 104 347 593 88 026 852
Current income tax liabilities 13 137 130 13 936 404 13 064 856
Loans from shareholders – 1 896 305 –
Loans from directors 18 508 2 598 511 18 508
Loans from related parties 3 111 385 201 650 2 126 356
Tenant deposits 6 591 574 6 085 201 6 371 863
Trade and other payables 38 940 230 27 718 375 30 141 534
Borrowings 18 037 688 50 798 493 33 846 265
Bank overdraft 2 418 106 1 112 654 2 457 470
Total liabilities 390 088 854 363 537 576 385 861 315
Total equity and liabilities 812 475 798 752 096 537 804 694 408
Abridged consolidated statement of comprehensive income
for the six months ended 31 December 2013
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 December 31 December 30 June
Figures in Rand 2013 2012 2013
Revenue 48 067 905 48 037 892 91 224 924
Gross property revenue 46 865 318 47 267 210 87 198 739
Property revenue 46 865 318 47 267 210 87 361 565
Straight-line of lease accrual – – (162 826)
Other income 568 498 383 685 2 177 891
Other direct property operating costs (30 951 970) (30 157 047) (56 650 405)
Administrative and management expenses (52 066) (5 273 319) (10 578 716)
Repairs and maintenance (3 606 126) (2 707 907) (5 635 341)
Fair value adjustment – – 40 763 417
Gross change in fair value of investment property – – 40 600 591
Straight-line lease adjustment – – 162 826
Operating profit before interest 12 823 654 9 512 622 57 275 585
Finance income 634 089 386 997 1 685 468
Linked debenture interest – – (5 051 496)
Finance costs (8 523 998) (8 482 844) (16 865 413)
Profit before taxation 4 933 745 1 416 775 37 044 144
Taxation (1 379 894) (1 226 858) (6 580 095)
Profit for the period 3 553 851 189 917 30 464 049
Other comprehensive income – – –
Total comprehensive income for the year 3 553 851 189 917 30 464 049
Profit/(Loss) and total comprehensive income/
(loss) for the period attributable to:
Owners of the parent 3 557 256 192 812 30 467 835
Non-controlling interest (3 405) (2 895) (3 786)
3 553 851 189 917 30 464 049
Earnings per linked unit
Basic earnings per linked unit (cents) 0.57 0.03 4.86
Diluted earnings per linked unit (cents) 0.57 0.03 4.86
Headline earnings per linked unit (cents) 0.57 0.16 0.30
Diluted headline earnings per linked unit (cents) 0.57 0.16 0.30
Reconciliation of basic earnings and headline
earnings:
Profit attributable to equity holders of the parent 3 557 256 192 812 30 467 835
Fair value adjustment to investment properties – – (33 022 572)
Linked debenture interest – – 3 637 077
Loss on disposal of investment property – 796 863 792 564
Headline earnings 3 557 256 989 675 1 874 904
Weighted average linked units in issue 67 009 822 67 009 822 67 009 822
Abridged consolidated statement of cash flows
for the six months ended 31 December 2013
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 December 31 December 30 June
Figures in Rand 2013 2012 2013
Cash flows from/(to) operating activities 11 238 265 2 969 192 (1 563 847)
Cash generated by operations 18 641 191 11 938 187 15 094 811
Interest paid (6 721 190) (8 482 844) (15 207 905)
Taxation paid (681 735) (486 151) (1 450 753)
Cash flows to investing activities (7 684 964) (3 064 284) (8 486 194)
Cash flows (to)/from financing activities (7 252 471) (912 952) 11 204 732
Net (decrease)/increase in cash,
cash equivalents and bank overdrafts (3 699 170) (1 008 044) 1 154 691
Cash, cash equivalents and bank overdrafts at the
beginning of the period 1 729 954 575 263 575 263
Cash, cash equivalents and bank overdrafts at the
end of the period (1 969 216) (432 781) 1 729 954
Statements of changes in equity
for the six months ended 31 December 2013
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 2012 6 270 098 67 965 428 74 235 526 10 675 886 303 725 058 388 636 470 (267 426) 388 369 044
Total comprehensive income for
the period – profit – – – – 192 812 192 812 (2 895) 189 917
Balance at 31 December 2012 6 270 098 67 965 428 74 235 526 10 675 886 303 917 870 388 829 282 (270 321) 388 558 961
Total comprehensive income for
the period – profit – – – – 30 275 023 30 275 023 (891) 30 274 132
Balance at 30 June 2013 6 270 098 67 965 428 74 235 526 10 675 886 334 192 893 419 104 305 (271 212) 418 833 093
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 10 675 886 337 750 149 422 661 561 (274 617) 422 386 944
Segment reporting for the period ending 31 December 2013
R % R %
Revenue (excluding recoveries)
Commercial 15 703 552 44 Gauteng 25 467 366 71
Industrial 5 027 673 14 Western Cape 2 834 204 8
Retail 10 075 014 28 Mpumalanga 7 005 725 20
Hospitality 4 466 192 12 KwaZulu-Natal 530 240 1
Residential 565 103 2
35 837 535 100 35 837 535 100
Property values (including properties held for sale)
Commercial 299 379 165 39 Gauteng 562 217 518 74
Industrial 96 732 074 13 Western Cape 41 235 454 5
Retail 184 985 965 24 Mpumalanga 146 047 295 20
Hospitality 79 881 715 11 KwaZulu-Natal 8 973 251 1
Residential 44 094 599 6
Land 53 400 000 7
758 473 518 100 758 473 518 100
Gross lettable area
Commercial 53 331 43 Gauteng 93 495 75
Industrial 21 988 18 Western Cape 8 784 7
Retail 27 576 22 Mpumalanga 15 850 13
Hospitality 16 029 13 KwaZulu-Natal 6 000 5
Residential 5 205 4
124 129 100 124 129 100
Borrowings (excluding instalment sales and loans)
Commercial 75 042 502 42 Gauteng 133 943 410 76
Industrial 27 579 824 16 Western Cape 25 500 289 15
Retail 52 631 051 30 Mpumalanga 12 683 030 7
Hospitality 12 348 726 7 KwaZulu-Natal 4 328 360 2
Residential 8 852 986 5
Land – –
176 455 089 100 176 455 089 100
Rating of tenants (rental income)
Commercial A 968 937 3 Gauteng A 2 037 274 7
B 4 172 502 14 B 8 264 660 28
C 3 242 495 11 C 10 307 857 36
Industrial A – – Western Cape A 55 242 –
B 4 068 875 14 B 2 307 279 8
C 123 335 – C 490 276 2
Retail A 1 672 299 6 Mpumalanga A 997 322 3
B 2 218 554 8 B 1 015 829 4
C 6 323 335 22 C 2 775 403 10
Hospitality A 448 602 2 KwaZulu-Natal A – –
B 1 658 077 6 B 530 240 2
C 3 317 366 12 C – –
Residential A – –
B – –
C 567 005 2
28 781 382 100 28 781 382 100
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 2013 Interim Financial Statements
1. Operating performance
The Group revenue decreased from R47.3 million in December 2012 to R46.9 million in December 2013. The decrease of 0.85% is an indication of tight
trading conditions. Other direct property operating costs increased from R30.2 million to R31.0 million for the same period. This represents an increase of
2.64%. Administrative and management expenses decreased significantly by 99.01% due to a group restructuring whereby certain major property services
are no longer outsourced. Repairs and maintenance increased by 33.17% and this increase reflects the drive to improve the general condition of all buildings.
The operating profit increased with 34.08% from R9.5 million to R12.8 million. The total comprehensive income for the year improved from a profit of
R189 917 to a profit of R3 553 851.
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 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.
4. Investment property acquired and disposed
4.1 Acquired
No properties were acquired during the reporting period.
4.2 Disposed
No properties were disposed during the reporting period.
5. Subsequent events
The directors are not aware of any matter or circumstance arising since 31 December 2013, which would affect the results or operations of the Group 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 has started to bear fruit and this should
have a positive influence on the results in the remaining period.
Johannesburg
31 March 2014
Directors
R S Wilkinson*, F M Viruly*, 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 Arcay Moela
Facilitators CC Sponsors (Pty) Limited
Transfer office
Computershare Investor Services (Pty) Limited
Date: 28/03/2014 05:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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