Wrap Text
2002
REDEFINE INCOME FUND LIMITED
Registration No. 1999/018591/06
SHARE CODE RDF
ISIN CODE ZAE000023503
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 28 FEBRUARY 2002
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
6 months to 6 months to 12 months
to
28 Feb 2002 28 Feb 2001 31 Aug 2001
R000 R000 R000
Revenue
Property portfolio 45 128 55 250 107 214
Listed security portfolio 66 106 47 779 106 945
111 234 103 029 214 159
Operating costs - property
portfolio 11 034 13 994 27 689
Administration costs 5 506 5 384 11 890
Operating profit 94 694 83 651 174 580
Net capital gain (loss)
on non-current assets (116 222) 1 897 173 298
Profit (loss) from operations (21 528) 85 548 347 878
Interest received 752 972 1 894
Profit (loss) before finance charges (20 776) 86 520
349 772
Finance charges 50 145 44 479 93 650
Profit (loss) before taxation (70 921) 42 041 256 122
Taxation - - -
Profit (loss) attributable to linked
unitholders (70 921) 42 041 256 122
Headline earnings and distributions
Profit (loss) attributable to linked
unitholders (70 921) 42 041 256 122
Net capital loss (gain) on
non-current assets 116 222 (1 897) (173 298)
Headline earnings and total
distributions 45 301 40 144 82 824
- First quarter distribution 22 530 19 989 19 989
- Second quarter distribution 22 771 20 155 20 155
- Third quarter distribution - - 21 340
- Fourth quarter distribution - - 21 340
Earnings per linked unit
Actual number of linked
units in issue (000) 253 014 237 114 237 114
Weighted number of linked units in
issue (000) 248 578 235 764 236 445
Earnings per linked unit (cents) (28,53) 17,83 108,32
Headline earnings per linked unit
(cents) 18,22 17,03 35,03
Distribution per linked unit
(cents) 18,00 17,00 35,00
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 months to 6 months to 12 months
to
28 Feb 2002 28 Feb 2001 31 Aug 2001
R000 R000 R000
Balance at beginning of period 644 824 462 505 462 505
Issue of linked units 50 091 9 085 9 085
Preliminary and issue
expenses written-off (85) (64) (64)
Net capital gain (loss)
transferred to
non-distributable reserve (116 222) 1 897 173 298
578 608 473 423 644 824
CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
28 Feb 2002 28 Feb 2001 31 Aug 2001
R000 R000 R000
Assets
Non-current assets 1 366 073 1 214 232 1 349 994
Property portfolio 550 251 611 260 447 907
Listed security portfolio 815 822 602 972 902 087
Current assets 56 025 35 742 48 642
Trade and other receivables 54 019 17 455 12 600
Debtors for property sales 450 491 3 682
Cash and cash equivalents 1 556 17 796 32 360
Total assets 1 422 098 1 249 974 1 398 636
Equity and liabilities
Capital and reserves 578 608 473 423 644 824
Linked unit capital 520 002 469 996 469 997
Non-distributable reserve 58 606 3 427 174 827
Non-current liabilities 795 665 724 182 699 202
Interest-bearing liabilities 778 145 689 456 681 577
Non-interest bearing liabilities 17 520 34 726 17 625
Current liabilities 47 825 52 369 54 610
Interest-bearing liabilities 7 702 16 639 12 583
Trade and other payables 17 352 15 575 20 687
Unitholders for distribution 22 771 20 155 21 340
Total equity and liabilities 1 422 098 1 249 974 1 398 636
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
Unaudited Unaudited Audited
6 months to 6 months to 12 months
to
28 Feb 2002 28 Feb 2001 31 Aug 2001
R000 R000 R000
Cash effects from operating
activities (43 323) 7 941 19 105
Cash generated from operations 49 940 91 205 192 114
Net financing costs (49 393) (43 507) (91 756)
Linked unit distributions paid (43 870) (39 757) (81 253)
Cash effects of investing activities (129 069)(14 497)
17 939
Net property disposals
(acquisitions) (98 379) (23 390) 136 013
Net listed security disposals
(acquisitions) (30 690) 8 893 (118 074)
Cash effects from financing
activities 141 588 8 607 (20 429)
Linked units issued 50 006 9 021 9 021
Net borrowings (repayments) 91 582 (414) (29 450)
Net movement in cash and
cash equivalents (30 804) 2 051 16 615
Opening cash and cash equivalents 32 360 15 745 15 745
Closing cash and cash equivalents 1 556 17 796 32 360
Interest Distribution No. 8
Unitholders are advised that interest distribution No. 8 in respect of the
period 1 December 2001 to 28 February 2002 of 9 cents per linked unit has
been declared.
* The last date to trade cum interest Wednesday, 17 April 2002
* Units will trade ex interest Thursday, 18 April 2002
* Record date to participate Wednesday, 24 April, 2002
* Payment of interest distribution No. 8 Thursday, 25 April 2002
Unitholders may not dematerialise or re-materialise their linked units
between Thursday, 11 April 2002 and Wednesday, 24 April 2002, both days
inclusive.
Commentary
Review of results
During the six months ended 28 February 2002, Redefine Income Fund Limited
(`Redefine') increased revenue by 8 percent over the comparable period of
the previous year which, combined with a reduction in operating costs,
increased operating profit by 13 percent. After allowing for an increase in
the cost of finance as a result of the growth in the asset base, profit
available for distribution to linked unitholders is R45,3-million,
representing an increase of 6 percent. The company has continued to deliver
an increasing income return to unitholders. This growth has been achieved
against the general decline in earnings in the listed property sector.
Redefine has also achieved growth in its asset base and continues with
its restructuring strategy within its asset base, the result of which is a
significant reduction in its hybrid portfolio risk profile through the
implementation of positive asset management strategies.
Property portfolio
As reported in the 2001 annual report, Redefine has concluded agreements,
subsequent to 31 August 2001, for the acquisition of 12 properties at a
total cost of R194-million. Nine properties have been transferred, with the
transfer of the remaining 3 properties, costing R104-million, expected to be
completed by 31 May 2002. Another 3 properties, tenanted by a major
commercial bank, have been acquired and transferred for R22,5-million. One
vacant industrial property was sold at a marginal gain.
The composition of the property portfolio has been substantially upgraded,
with the lease expiry profile strengthening, to more than 50 percent of the
contractual rental income being secured beyond the next 5 years. Constant
attention to tenant retention, together with an active leasing strategy,
enabled Redefine to hold its vacancy levels at under 6 percent, well below
current market norms.
Listed security portfolio
The composition of Redefine's listed securities portfolio is continually
being re-evaluated. Following the implementation of a capital realignment
strategy, the excessive holding in ApexHi linked units has been reduced, the
proceeds being utilised to fund the acquisition of other listed securities
and directly-held property. This strategy has significantly improved the
composition and profile of the listed security portfolio.
The recent increases in interest rates have contributed to a downward
re-rating of the listed property sector of the JSE. This has resulted in a
significant negative adjustment against accumulated NDR being effected
through the income statement, in keeping with generally accepted accounting
practice.
Conversely, quality listed property counters are currently trading at yields
substantially in excess of the average yields applicable for quality
physical property, offering Redefine unique opportunities inherent through
its hybrid asset structure.
In keeping with its commitment to unitholders, Redefine has increased and
will continue to increase its asset base from whichever sector offers the
best opportunities at any given time.
Interest rate management and debt restructuring
Redefine's policy of implementing interest rate hedging mechanisms to a
minimum cover of 70 percent of debt has ensured that the effect from recent
interest rate increases on distributable income is minimised. Redefine has
entered into several interest rate swap instruments covering a total of R550-
million at an average cost of 13 percent for two years, effective February
2002. Redefine's long-term finance rate is linked to long bond yields,
further reducing the effects of short-term rate increases on the uncovered
portion of total debt.
Prospects
The Board is confident that Redefine will deliver growth in its annual
distributions for the 2002 financial year, notwithstanding that many of the
listed property funds in which Redefine is invested have indicated
that growth in their distributions may be muted.
Redefine continues to seek and take advantage of value-adding activities
within the sector.
Wolf Cesman, Chairman Peter Penhall, Chief Executive Officer
Johannesburg 3 April, 2002
REDEFINE INCOME FUND LIMITED. 2 ARNOLD ROAD, ROSEBANK, JOHANNESBURG. PO BOX
471917, PARKLANDS, 2121, SOUTH AFRICA. TELEPHONE +27 11 283 0110 EMAIL:
redefine@corpcapital.com
DIRECTORS: W Cesman*. E Ellerine*. J Kron*. P Penhall. M Wainer*. non
executive*
COMPANY SECRETARY: Probity Business Services (Pty) Ltd. PO Box 85392,
Emmarentia, 2129
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