Wrap Text
2001
REDEFINE INCOME FUND LIMITED
SHARE CODE: RDF
ISIN CODE: ZAE000023503
AUDITED RESULTS FOR THE YEAR ENDED 31 AUGUST 2001
CONSOLIDATED INCOME STATEMENT
Audited Audited
12 months to 6 months to
31 Aug 2001 31 Aug 2000
R000s R000s
Revenue
Property portfolio 107,214 56,838
Listed security portfolio 106,945 46,262
214,159 103,100
Operating costs - property
portfolio 27,689 13,458
Administration costs 11,890 4,163
Operating profit 174,580 85,479
Capital gains on
non-current assets 173,298 1,529
Profit from operations 347,878 87,008
Interest received 1,894 1,558
Profit before finance
charges 349,772 88,566
Finance charges 93,650 48,236
Profit before taxation 256,122 40,330
Taxation - -
Profit attributable
to linked unitholders 256,122 40,330
Actual number of linked
units in issue (000s) 237,114 232,582
Weighted number of linked
units in issue (000s) 236,445 222,537
Earnings per linked
unit (cents) 108,32 18,12
Headline earnings per
linked unit (cents) 35,03 17,44
Distribution per linked
unit (cents) 35,00 17,00
CONSOLIDATED BALANCE SHEET
Audited Audited
31 Aug 2001 31 Aug 2000
R000s R000s
Assets
Non-current assets 1,349,994 1,197,067
Property portfolio 447,907 587,025
Listed security portfolio 902,087 610,042
Current assets 48,642 31,959
Trade and other receivables 12,600 14,964
Debtors for property sales 3,682 1,250
Cash and cash equivalents 32,360 15,745
Total assets 1,398,636 1,229,026
Equity and liabilities
Capital and reserves 644,824 462,505
Linked unit capital 469,997 460,976
Non-distributable reserve 174,827 1,529
Non-current liabilities 699,202 724,318
Interest-bearing liabilities 681,577 641,964
Non-interest bearing
liabilities 17,625 82,354
Current liabilities 54,610 42,203
Interest-bearing liabilities 12,583 16,917
Trade and other payables 20,687 5,517
Linked unitholders for
distribution 21,340 19,769
Total equity and liabilities 1,398,636 1,229,026
HEADLINE EARNING AND DISTRIBUTIONS
Audited Audited
12 months to 6 months to
31 Aug 2001 31 Aug 2000
R000s R000s
Headline earnings and
distributions
First quarter 19,989 -
Second quarter 20,155 -
Third quarter 21,340 19,032
Fourth quarter 21,340 19,769
Headline earnings and
total distributions 82,824 38,801
Capital gains on non-current
assets 173,298 1,529
Profit attributable to
linked unitholders 256,122 40,330
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Audited Audited
12 months to 6 months to
31 Aug 2001 31 Aug 2000
R000s R000s
Cash effects from operating
activities 19,105 8,626
Cash generated from
operations 192,114 74,336
Net financing costs -91,756 -46,678
Linked unit distributions
paid -81,253 -19,032
Cash effects of investing
activities 17,939 -1,195,092
Net property disposals
(-acquisitions) 136,013 -586,579
Net listed security
acquisitions -118,074 -608,513
Cash effects from financing
activities -20,429 1,202,211
Linked units issued 9,021 460,976
Net borrowings (-repayments) -29,450 741,235
Net movement in cash and
cash equivalents 16,615 15,745
Opening cash and cash
equivalents 15,745 -
Closing cash and cash
equivalents 32,360 15,745
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Audited Audited
12 months to 6 months to
31 Aug 2001 31 Aug 2000
R000s R000s
Balance at beginning of
period 462,505 -
Issue of linked units 9,085 464,769
Preliminary and issue
expenses written-off -64 -3,793
Capital gains transferred
to non-distributable reserve 173,298 1,529
644,824 462,505
Interest Distribution No 6
Unit holders are advised that interest distribution No. 6 in
respect of the period 1 June 2001 to 31 August 2001 of 9 cents per
linked unit has been declared.
The last date to trade cum interest will be Friday, 19 October
2001, and the linked unit will commence trading ex interest from
commencement of business on Monday, 22 October 2001, with the
record date being Friday, 26 October 2001. Payment will be made to
linked unitholders on or about Monday, 29 October 2001.
COMMENTARY
Review of results
Since listing on 23 February 2000, Redefine has accomplished the
goals it set for the first full financial year ended 31 August
2001. Revenue increased to R214,2m, divided evenly between the
property portfolio and the listed securities portfolio. Headline
earnings of 35,03 cents per linked unit is in line with
expectations. Other notable achievements are a 14 percent decline
in gearing to 52 percent of non-current assets of R1,4bn and cash
resources rising to R32,3m. Redefine declared a fourth quarterly
distribution of 9 cents per linked unit, increasing total
distributions for the financial year to 35 cents per linked unit.
This represents an income yield of 13 percent and capital growth
of 34 percent on the closing price of R2,70 per linked unit. Net
asset value increased 36 percent from the initial listing price of
R2,00 to R2,72 per linked unit at year end.
Property portfolio
During the year Redefine disposed of 18 non-core properties for a
total consideration of R177m. The majority of the properties were
acquired by ApexHi Properties Limited in exchange for ApexHi A and
B class linked units at a combined price of R10 per unit. The
subsequent re-rating of the ApexHi units has increased Redefine's
net asset value at year end by R50 million. As a consequence
Redefine's ratio of listed securities to properties has increased
from 50:50 to 67:33 and its exposure to convenience retail
property has reduced in favour of the office sector. This creates
an opportunity to restructure and increase the property portfolio
to restore the preferred 50:50 investment relationship. Vacancies
in the property portfolio at year end were 6,8 percent. The lease
expiry profile of the property portfolio remains extremely sound,
with 30 percent of current leases expiring after financial year
2006 and the net present value of contractual rental income
equating to R1,05 per linked unit.
Listed security portfolio
The market value of the listed securities portfolio at year end is
R902m, an increase of R160m over the cost of R742m. Redefine's
investments in listed securities include R800m in six prominent
counters: ApexHi, Capital, GrayProp, HyProp, Marriott, and Sycom,
which represent 90 percent of Redefine's investment in listed
securities. Gains from realignment in listed security linked units
during the year were utilised to reduce interest-bearing debt.
Liquidity
Progressive marketing by way of advertising, presentations to
investment advisers, and increased demand for quality linked units
in the listed property sector by both major and smaller
institutional investors as well as private individuals resulted in
Redefine being one of the most highly traded property loan stock
counters. This is reflected in a total of 78,9m units having
traded during the financial year at a value of R180m representing
liquidity of
33 percent of total units in issue.
Interest rate management and debt restructuring
The programme of interest rate swaps reported in Redefine's
interim financial announcement is unchanged with 70 percent of
total long-term debt covered over a two- to three-year period by
rolling interest rate swaps with staggered maturity dates.
Settlement of the majority of deferred vendor payments was funded
from internal resources, with the balance of R18m to be repaid in
March 2002.
Post balance sheet developments
Investments totalling R118m in ApexHi, Growthpoint, Rand Leases
Properties and Sycom funded through a combination of proceeds from
disposal of listed securities, ApexHi linked unit asset swaps, and
new debt increased the listed securities portfolio to 14 counters.
Five properties (two offices, two industrial and one retail) with
single tenants and long leases have been acquired for R100m. This
post balance sheet activity increases Redefine's investment in
total non-current assets to R1,6bn.
Prospects
Redefine intends taking advantage of the re-rating in certain
listed property counters in which it is invested, where forward
yields are trading below cost of capital by reducing its holdings
and utilising proceeds for asset expansion at income-enhancing
yields. The Board is confident that Redefine will maintain
annualised linked unit distribution growth in excess of current
inflation levels in the 2002 financial year, although any forward
view must be tempered by the aftermath of the tragic events in the
United States on September 11, 2001.
Accounting policies
The accounting policies applied in the preparation of the
financial statements are consistent with those applied in the
prior year.
Wolf Cesman, Chairman Peter Penhall, Chief Executive Officer
Johannesburg 3 October, 2001
REDEFINE INCOME FUND LIMITED. 2 ARNOLD ROAD, ROSEBANK,
JOHANNESBURG. PO BOX 91656, AUCKLAND PARK, 2006, SOUTH AFRICA.
TELEPHONE +27 11 283 0110
EMAIL: redefine@corpbank.co.za INTERNET ADDRESS
http://www.redefine.co.za
DIRECTORS: W Cesman*. E Ellerine*. J Kron*. M Wainer*. non
executive* Registration No. 1999/018591/06
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