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REB - Rebosis Property Fund Limited - Audited results for the year ended 31
August 2011
REBOSIS PROPERTY FUND LIMITED
(formerly Business Venture Investments No. 1389 (Proprietary) Limited)
("Rebosis" or "the company")
Registration number 2010/003468/06
JSE code: REB
ISIN: ZAE000156147
AUDITED RESULTS FOR THE YEAR ENDED 31 AUGUST 2011
- Successful listing raised R1,66 billion
- Maiden distribution of 22,25 cents per linked unit
- Net asset value R10,30 per linked unit, excluding deferred taxation
- Retail portfolio turnover growth 19%
Statement of comprehensive income
Audited Audited
for period financial
from listing to year ended
31 August 2011 31 August 2011*
R000 R000
REVENUE
Property portfolio 105 944 257 067
Rental income 103 468 252 330
Straight line rental income accrual 2 476 4 737
Facilities management income 10 804 10 804
Sundry income 147 403
Total revenue 116 895 268 274
Property expenses (29 545) (66 535)
Administration and corporate costs (3 901) (3 957)
Listing costs - (50 028)
Debt arrangement fees - (120 726)
Net operating profit 83 449 27 028
Changes in fair values of investment 62 833 262 761
properties and financial instruments
Profit from operations 146 282 289 789
Net finance charges (32 672) (144 701)
Finance charges - secured loans (32 916) (144 859)
Net interest received 244 158
Profit before taxation 113 610 145 088
Debenture interest (48 898) (48 898)
Profit before taxation 64 712 96 190
Taxation (3 233) (44 038)
Total comprehensive income for the year 61 479 52 152
Reconciliation of earnings, headline
earnings and distributable earnings
Total comprehensive income for the year 61 479 52 152
Debenture interest 48 898 48 898
Earnings 110 377 101 050
Change in fair value of investment (92 471) (241 026)
properties (net of deferred taxation)
Change in fair value of properties (107 524) (280 263)
Deferred taxation 15 053 39 237
Headline profit/(loss) attributable to 17 906 (139 976)
linked unitholders
Change in fair value of derivative 32 178 12 601
instruments (net of deferred taxation)
Change in fair value of derivative 44 691 17 502
instruments
Deferred taxation (12 513) (4 901)
Straight line rental income accrual (net 1 783) (3 411)
of deferred taxation)
Straight line rental income accrual (2 476) (4 737)
Deferred taxation 693 1 326
Reversal of deferred taxation on - 8 376
derivative instruments no longer required
Listing costs - 50 028
Debt arrangement fees - 120 726
Structuring fee amortisation 554 554
Retained profit at listing date 43 -
Distributable earnings attributable to 48 898 48 898
linked unitholders
Number of linked units in issue 219 744 713 219 744 713
Weighted average number of linked units 64 092 209 64 419 020
in issue
Basic and diluted earnings per linked 172,22 156,86
unit (cents)
Headline profit/(loss) per linked unit 27,94 (217,29)
(cents)
Distributable earnings per linked unit 22,25 22,25
(cents)
*Results for the financial year ended 31 August 2011 include trading for the
nine month period from 1 December 2010 to 31 August 2011
Statement of financial position
Audited
31 August 2011
R000
Assets
Non-current assets 3 501 676
Investment property 3 400 400
Goodwill 95 703
Property, plant and equipment 527
Structuring fee prepaid 5 046
Current assets 85 800
Trade and other receivables 13 680
Structuring fee prepaid 1 900
Cash and cash equivalents 70 220
3 587 476
Equity and liabilities
Equity 529 320
Stated capital 477 168
Reserves 52 152
Liabilities 2 933 310
Debentures 1 595 347
Secured financial liabilities 1 153 531
Derivative instruments 44 690
Deferred taxation 139 742
Current liabilities 124 846
Trade and other payables 60 761
Rental warranty 15 187
Unitholders for distribution 48 898
Total equity and liabilities 3 587 476
Net asset value per linked unit (R) 9,67
Net asset value per linked unit (excluding deferred 10,30
taxation) (R)
Abridged consolidated statement of changes in equity
Audited
year ended
31 August 2011
R000
Balance at the beginning of the year 1
Issue of shares 477 167
Total comprehensive income for the year 52 152
529 320
Segmental information
Extracts from statement of comprehensive income
Retail/ Office/
Eastern Gauteng Total
Cape
R000 R000 R000
For period from listing to 31 August
2011
Total revenue from property portfolio 64 791 49 481 114 272
Rental income 64 791 38 677 103 468
Facilities management income - 10 804 10 804
Property expenses (16 401) (13 144) (29 545)
Net property income 48 390 36 337 84 727
Change in fair values of investment 73 507 34 017 107 524
properties
Extracts from statement of financial
position (as at 31 August 2011)
Investment property 1 915 000 1 485 400 3 400 400
Abridged consolidated statement of cash flow
Audited
year ended
31 August 2011
R000
Net cash flows utilised in operating activities (233 172)
Cash absorbed by operations (88 471)
Net finance costs (144 701)
Net cash outflows from investing activities (634 233)
Net cash generated from financing activities 937 625
Net movement in cash and cash equivalents 70 220
Cash and cash equivalents at the beginning of the year -
Cash and cash equivalents at the end of the year 70 220
COMMENTARY
Profile
Rebosis, the first black-managed and substantially black-held property
fund, successfully listed on the JSE Limited ("JSE") on 17 May 2011.
On listing Rebosis raised R1,66 billion, in terms of a private
placement that was oversubscribed. This was the largest property
sector capital raising IPO on the JSE.
Financial results
The period reported on in these results is from 1 December 2010, the
date on which Rebosis acquired the initial portfolio of six
properties, to 31 August 2011. As reflected in the prelisting
statement issued 3 May 2011 ("prelisting statement"), two additional
properties were acquired being Victoria Mxenge building and Bloed
Street Mall, Victoria Mxenge building transferred on 24 May 2011 but
transfer of Bloed Street Mall has been delayed due to administrative
circumstances outside of the control of company and the vendor.
Transfer of this property is expected by no later than the end of
November 2011.
In line with the prelisting statement, the portfolio of assets, the
gearing against the portfolio, the asset management arrangements and
the capital structure were substantially restructured. The results
from 17 May 2011, the date of listing, to 31 August 2011, which are
those relevant to Rebosis linked unitholders, have been reflected
separately.
Rebosis has declared a distribution of 22,25 cents per linked unit for
the period since listing. While the distribution is below the forecast
distribution of 22,91 cents per linked unit per the prelisting
statement, this is accounted for by the delay in the transfer of Bloed
Street Mall. The effect of the delay in the transfer of Bloed Street
Mall is a net reduction to distributable earnings of R1,6 million (0,7
cents per linked unit), made up of net property income of R9,1 million
offset by a saving in interest on borrowings of R7,5 million.
At 31 August 2011, the net asset value per linked unit of R10,30,
excluding deferred taxation, represents a premium of 4,6% to Rebosis`
closing unit price of R9,85.
Property portfolio
At year end, the Rebosis property portfolio consists of 56% shopping
centres and 44% office buildings (by value), located in Gauteng and
the Eastern Cape. The retail portfolio comprises two exceptional-
quality shopping malls delivering secure, escalating income streams
underpinned by strong anchor and national tenants. The office
portfolio consists of five buildings which are well-located in nodes
attractive to government tenants; four in Pretoria and one in
Braamfontein. These are mainly let to the National Department of
Public Works, under long leases providing for escalations of 8% per
annum. The office portfolio represents a sovereign underpin to a
substantial portion of the earnings and shields it from private sector
risks such as tenant insolvency and default.
The valuations prepared by independent valuer, Quadrant Properties
(Proprietary) Limited, at 1 May 2011 for purposes of the listing, were
updated at year-end. For the financial year ended 31 August 2011,
investment property increased in value by R285 million to R3,4
billion, excluding Bloed Street Mall. Since the date of listing, the
value of the portfolio increased by R110 million.
Property GLA Value Value per m2
m2 R000 R/m2
Retail portfolio 109 679 1 915 000 17 460
Hemingways Mall 73 132 1 495 000 20 442
Mdantsane City 36 547 420 000 11 492
Commercial portfolio 114 034 1 485 400 13 026
Victoria Mxenge 24 720 426 500 17 253
Salu 30 354 425 000 14 001
Liberty 35 885 406 400 11 325
Bank of Lisbon 14 599 122 800 8 412
Arbour Square 8 476 104 700 12 353
223 713 3 400 400 15 200
Including Bloed Steet Mall, valued at R356,3 million on 1 May 2011,
the value of the property portfolio at 31 August 2011 would be R3,757
billion, comprising 60% shopping centres and 40% office buildings.
Vacancies at 31 August 2011 were 4,7%. Subsequent to year end,
additional leases have been concluded reducing vacancies to 3,0%.
Borrowings
At 31 August 2011, borrowings of R1,153 billion equate to a gearing
ratio of 33,9%. Rebosis` average interest rate for the period since
listing was 9,26% and interest rates are fixed in respect of 100% of
borrowings for an average period of 4,2 years.
Subsequent to the transfer of the Bloed Street Mall, the gearing ratio
will increase to 39,8%, the average cost of borrowings will decrease
to 8,9% and interest rates will be fixed in respect of 80% of
borrowings.
Business combination
Pursuant to its listing on the JSE, Rebosis acquired the assets and
liabilities of Hemingways Shopping Centre (Proprietary) Limited,
Mdantsane Shopping Centre (Proprietary) Limited and Phomella Property
Investments (Proprietary) Limited with effect from 1 December 2010.
Details of the net assets acquired are as follows:
R000
Investment property 2 857 500
Property, plant and equipment 735
Trade and other receivables 3 395
Cash and cash equivalents 8 571
Secured financial liabilities (2 245 470)
Derivative instruments - interest rate swaps (70 138)
Deferred taxation (95 703)
Trade and other payables (152 219)
Total net assets acquired 306 671
Goodwill 95 703
Purchase consideration settled in cash 402 374
Events after the reporting date
Due to delays in the transfer of Bloed Street Mall, it has been agreed
to increase the purchase price of R335,7 million by R1,0 million per
month, or part thereof, with effect from 31 May 2011 until the
transfer date.
Directorate
Sisa Ngebulana was appointed as chief executive officer on 13 August
2010. Anna Mokgokong was appointed as chairperson and Mike Rodel and
Janys Finn were appointed as chief operating officer and financial
director respectively with effect 11 April 2011. Simon Fifield, Andile
Mazwai, Ken Reynolds, Jaco Odendaal and Sindiswa Zilwa were appointed
as non-executive directors with effect 11 April 2011.
Prospects
Rebosis is well positioned for future growth notwithstanding a
difficult macro economic environment. The retail properties are still
maturing with an average annual turnover growth to 31 August 2011 of
19% at Hemingways and Mdantsane Malls. It is anticipated that the
majority of the remaining vacancies in the portfolio will be let in
the first half of 2012 due to the increased interest for premises. The
board remains confident of the sustainability of government leases and
the company`s empowerment credentials which position Rebosis well for
future acquisitions of government tenanted buildings. The board
anticipates that the distribution for the year ending 31 August 2012
will be between 85,0 cents and 88,3 cents per linked unit. This
forecast has not been reported on by the company`s auditors.
Debenture interest distribution
As announced on SENS on Friday, 4 November 2011, linked unitholders
are advised that distribution no. 1 of 22,25 cents per linked unit for
the period ended 31 August 2011 will be paid to linked unitholders in
accordance with the abbreviated timetable set out below:
2011
Last day to trade cum distribution Friday, 18 November
Linked units trade ex distribution Monday, 21 November
Record date Friday, 25 November
Payment date Monday, 28 November
Linked unitholders may not dematerialise or rematerialise their linked
units between Monday, 21 November 2011, and Friday, 25 November 2011,
both days included.
Basis of preparation
The annual financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS), the AC 500 series
issued by the South African Institute of Chartered Accountants, JSE
Listings Requirements and the requirements of the South African
Companies Act. This report has been prepared in terms of IAS 34 -
"Interim Financial Reporting" and has incorporated the amendment to
IAS 12. These abridged financial statements have been derived from the
financial statements which have been audited by the company`s
auditors, PKF (Jhb) Inc. Their unqualified audit opinion is available
for inspection at the company`s registered office. No comparative
financial information has been presented as the company only commenced
trading on 1 December 2010.
The financial results for the year ended 31 August 2011 were compiled
by Ms JA Finn, financial director.
By order of the board
Rebosis Property Fund Limited
7 November 2011
Directors: ATM Mokgokong* (Chairperson), SM Ngebulana (CEO) SP
Fifield*, JA Finn, AM Mazwai*, WJ Odendaal*, KL Reynolds* MF Rodel, SV
Zilwa* *Non-executive Independent
Registered office: 3rd Floor, Palazzo Towers West, Montecasino
Boulevard, Fourways, 2191 (PO Box 2972, Northriding, 2162)
Transfer secretaries: Computershare Investor Services (Proprietary)
Limited
Sponsor: Java Capital
Company secretary: Probity Business Services (Proprietary) Limited
www.rebosis.co.za
Date: 07/11/2011 07:15:01 Supplied by www.sharenet.co.za
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