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Growthpoint - Results/ Distribution Declaration And Further Cautionary
GROWTHPOINT PROPERTIES LIMITED
(Registration number 1987/004988/06)
JSE SHARE CODE: GRT ISIN: ZAE000012712
("Growthpoint" or "the company")
UNAUDITED INTERIM RESULTS FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER 2002,
DISTRIBUTION DECLARATION AND FURTHER CAUTIONARY ANNOUNCEMENT
INCOME STATEMENT
Unaudited Audited
6 months ended 15 months ended
1 December 2002 30 June 2002
R`000 R`000
Revenue 188 281 313 270
Operating income 117 404 197 760
Investment income 19 229 -
Interest paid (43 099) (67 718)
Interest earned 16 129 5 527
Net income before revaluation income 109 663 135 569
Revaluation of listed investment portfolio 60 546 -
Net income before taxation 170 209 135 569
Taxation (14) (17)
Net income after taxation 170 195 135 552
Linked units in issue 340 054 700 246 303 721
Weighted number of linked units in issue 254 116 303 166 462 240
Earnings per linked unit (cents) 66,98 81,43
Headline earnings per linked unit (cents) 43,15 81,43
Earnings/Headline earnings are calculated
as follows:
Net income before taxation 170 209 135 569
Taxation (14) (17)
Earnings 170 195 135 552
Revaluation of listed investment portfolio (60 546) -
Headline earnings 109 649 135 552
Distribution analysis:
Distributions paid for the period (108 817) (135 534)
Five-month distribution to August 2001 - 2 136
Four-month distribution to December 2001 - 58 497
Six-month distribution to June 2002 - 74 901
Six-month distribution to December 2002 108 817 -
Distribution per linked unit after 1-for-5
consolidation (cents) 32,00 85,66
Five-months to August 2001 (Restated) - 31,50
Four-months to December 2001 (Restated) - 23,75
Six-months to June 2002 - 30,41
Six-months to December 2002 32,00 -
BALANCE SHEET
Unaudited Audited
31 December 2002 30 June 2002
R`000 R`000
ASSETS
Investment properties 1 839 981 1 782 962
Listed investment portfolio 716 741 -
Current assets 103 829 103 120
2 660 551 1 886 082
EQUITY AND LIABILITIES
Capital and reserves 1 636 801 1 125 419
Non-current liabilities 841 834 642 399
Current liabilities 181 916 118 264
2 660 551 1 886 082
Number of linked units in issue 340 054 700 246 303 721
Net asset value per linked unit (cents) 481,33 456,92
STATEMENT OF CHANGES IN EQUITY
Non- Total share
Ordinary distri- capital
share Debenture butable Revaluation Retained and
capital capital reserve reserve income reserves
R`000 R`000 R`000 R`000 R`000 R`000
Audited balance
at 31 March 2001 339 54 260 - - (7 058) 47 541
Transfer from
retained income - - 6 006 - (6 006) -
Shares issued 11 976 - - - - 11 976
Debentures issued - 1 065 884 - - - 1 065 884
Net income for
the period - - - - 135 552 135 552
Debenture
interest paid - - - - (135 399) (135 399)
Dividends paid - - - - (135) (135)
Audited balance at
30 June 2002 12 315 1 120 144 6 006 - (13 046)1 125 419
Transfer from
retained income - - (1 234) - 1 234 -
Shares issued 4 688 - - - - 4 688
Debentures issued - 445 316 - - - 445 316
Net income for
the period - - - - 170 195 170 195
Transfer to
revaluation reserve - - - 60 546 (60 546) -
Debenture
interest paid - - - - (108 708) (108 708)
Dividends paid - - - - (109) (109)
Unaudited balance
at 31 December
2002 17 003 1 565 460 4 772 60 546 (10 980)1 636 801
Abridged Cash flow statement
Unaudited Audited
31 December 2002 30 June 2002
R`000 R`000
Cash generated by operations 125 723 217 884
Net finance costs (26 970) (62 191)
Taxation paid (9) (30)
Distribution to unitholders (74 752) (63 883)
Cash flow from operating activities 23 992 91 780
Cash flow from investing activities (263 210) (585 905)
Cash flow from financing activities 199 435 562 954
Net increase/(decrease) in cash
and cash equivalents (39 783) 68 829
Cash and cash equivalents at
beginning of the period 73 576 4 747
Cash and cash equivalents at
end of the period 33 793 73 576
Basis of Accounting
These interim financial statements have been prepared in accordance with the
South African Statements of Generally Accepted Accounting Practice and the
accounting policies used are consistent with those applied in the annual
financial statements for the 15-month period ended 30 June 2002.
During the period ended 30 June 2002, the company changed its year-end from
31 March to 30 June and the results therefore covered a 15-month period.
The interim reporting period ended 31 December 2001 has not been disclosed as it
was for nine months and is therefore not comparable.
For the period under review, the company accounted for the listed investments
that it acquired in October 2002 for the first time. The listed investments are
held for the purposes of earning investment income or for capital appreciation
and are initially recorded at cost and subsequently stated at market value as
determined by reference to the JSE Securities Exchange South Africa trade
prices.
Investment income includes dividends and debenture interest from listed
investment distributions and will be recognised for the period in which it
arises by reference to Last Day to Trade ("LDT") dates and are distributable to
linked unitholders.
Financial results of Growthpoint
The financial results of Growthpoint for the six-month period to 31 December
2002 incorporate the results of the existing property portfolio (61 properties),
two months income from the Nestle building disposed of at the end of August
2002, three months income from the listed investment portfolio acquired with
effect from 8 October 2002 and one months income from the Laser portfolio of
nine properties acquired with effect from November 2002.
Transfer of the listed investment portfolio from the Mine Employees Pension
Fund ("MEPF") and Sentinel Mining Industry Retirement Fund ("SMIRF"),
collectively known as the Mine Pension Funds ("MPF"), into Growthpoint`s name
took place on 9 December 2002. Although the "effective date" of the acquisition
was 8 October 2002, and Growthpoint qualified for all distributions from the
listed investment portfolio from that date, the agreement contained an interest
adjustment mechanism which has the effect of neutralising the impact on
Growthpoint`s distribution for the six-month period to 31 December 2002 as it
relates to the acquisition.
Net income before taxation for the period amounted to R170,2 million after
accounting for the unrealised profit of R60,5 million on the revaluation of the
listed investment portfolio. The total distribution of R108,8 million equates to
a distribution per linked unit for the period of 32,00 cents which is 5,2%
higher than the distribution for the previous six-month period January to June
2002 which was 30,41 cents. Earnings per linked unit and headline earnings per
linked unit of 66,98 cents and 43,15 cents respectively have been calculated
based on the weighted average number of linked units in issue i.e. 254 116 303
and therefore cannot be compared to the distribution per linked unit of 32,00
cents which has been calculated based on 340 054 700 linked unit in issue.
Acquisitions and disposals
During the six-month period under review Growthpoint acquired an investment
portfolio of eight listed linked units in property loan stock ("PLS") companies
and four property unit trusts ("PUT") from the MPF for R650,0 million. The
purchase consideration of R650,0 million was settled through the issue of new
Growthpoint linked units to the value of R450,0 million and a cash consideration
of R200,0 million which was raised via debt finance from a consortium of banks.
The acquisition of the listed investment portfolio changes the nature of
Growthpoint from a company investing purely in physical property, to include
investments in physical property as well as investments in listed property in
the form of PLS`s and PUT`s. Details of the transaction were provided in a
circular to linked unitholders dated 13 November 2002.
Other acquisitions included a portfolio of nine industrial warehouse and
office buildings from The Laser Group Limited for a total purchase consideration
of R54,8 million. The properties are spread across the major industrial areas in
the country (Epping, Midrand and Pinetown) and all have remaining lease periods
exceeding six years. The tenant in all the buildings is Laser Transport Group
(Pty) Limited, the owner of South Africa`s leading household removals brand
names Stuttaford Van Lines, Pickford Removals, Frasers International and Sandton
Office Removals which have been operating in the country for the past 100 years.
The properties were transferred to Growthpoint in November 2002.
An agreement was entered into on 16 May 2002 in terms of which Growthpoint
disposed of the property known as the Nestl building, situated in Pinetown,
KwaZulu-Natal for a cash consideration of R53,0 million. The transfer of this
property was registered on 30 August 2002.
Property portfolio
Total revenue produced by the physical property portfolio for the period
amounted to R188,3 million whilst total operating income amounted to R117,4
million. The property portfolio of Growthpoint, pursuant to the acquisitions and
disposal mentioned above, comprises 67 commercial, retail and industrial
properties and three hotels. The total gross lettable area of 764 988 m2
consists of commercial (45,6%), retail (23,65%), industrial (25,52%) and hotel
(5,24%) properties.
The major assets by value and net income include La Lucia Mall in KwaZulu-
Natal, Constantia Office Park, River Square Shopping Centre, Alberton City
Shopping Centre (31,25%) and Gillooly`s View Office Park in Gauteng and Belmont
Office Towers in the Western Cape.
In the period under review La Lucia Mall`s refurbishment was undertaken at an
estimated cost of R73 million of which R40 million was spent during the period.
The refurbishment, currently being completed, will improve the centre`s long-
term earnings potential as well as the sustainability of such earnings.
Vacancies were reduced to 72 121 m2 or 9,43% of total gross lettable area
("GLA") compared to the 80 806 m2 or 11% of GLA reported in June 2002. This
represents a 10,7% improvement in the vacancy percentage over the reported six-
month period. The major vacancies are 12 877 m2 in the premises that Ernst &
Young previously leased in the Johannesburg CBD, and 9 430 m2 in the OK Brakpan
building in Brakpan.
It is management`s objective to continuously reduce Growthpoint`s vacancies.
Listed Investment Portfolio
Investment income received from the listed investment portfolio, in the form of
dividends and debenture interest, amounted to R19,2 million for the period 9
October 2002 to 31 December 2002.
Interest earned includes an amount of R10,6 million attributable to the
listed investment portfolio. This amount, however, represents an interest
adjustment necessary to take into account and neutralise the fact that the 93
750 979 linked units issued to the MPF as part consideration for the acquisition
of the listed investment portfolio, qualify for the full distribution of 32
cents per linked unit for the six-month period to December 2002 notwithstanding
the fact that they were only issued on 9 December 2002.
In the three-month period after the signing of the sale agreement the listed
investment portfolio delivered a capital profit of 9,23%, which equates to
R60,54 million after capitalisation of transaction costs. The full amount of
this unrealised profit has been transferred to a revaluation reserve.
The financial impact of the acquisition of the listed investment portfolio on
the distribution for the six-month period ended 31 December 2002 is therefore
zero.
Borrowings and cash balances
Total borrowings at 31 December 2002 amounted to R841,8 million. Interest
rates in respect of 89,36% of total borrowings have been fixed for varying
periods with the earliest expiry being April 2004 and the latest expiry being
December 2009. The weighted average interest rate paid by Growthpoint on these
borrowings in terms of which interest rates have been fixed amounts to 13,64%.
Growthpoint`s debt as a percentage of total assets is 31,6% and 51.4% as a
percentage of capital and reserves.
Cash balances at 31 December 2002 amounted to R33,7 million.
Share and Debenture Capital
Pursuant to the acquisition of the listed investment portfolio from MPF,
Growthpoint`s issued share and debenture capital comprised 340 054 700 linked
units after 93 750 979 linked units were issued at an issue price of R4,80 each.
The issue was made to settle R450,0 million of the total purchase consideration
of R650,0 million.
Each linked unit comprises one share of 5 cents linked to 10 debentures of
250 cents each and the interest payable on the 10 debentures is always 1 000
times greater than the dividend payable per share.
Prospects
The Growthpoint board is reasonably confident that, subject to market
conditions remaining stable, Growthpoint`s distribution for the second six-month
period, ending 30 June 2003, will be comparable to that of the first six-month
period.
Declaration of interim dividend and interest payment
Notice is hereby given of interim dividend declaration number 31 of 0,03197
cent and debenture interest payment number 31 of 31,96803 cents per linked unit
for the income distribution period 1 July 2002 to 31 December 2002. The total
amount payable to linked unitholders amounts to 32 cents ("the interim
distribution") per Growthpoint linked unit and will be paid to linked
unitholders in accordance with the timetable set out in the table below:
2003
Last day to trade "cum" the interim distribution Friday, 7 March
Linked units commence trading "ex" the interim distribution Monday, 10 March
Record date to participate in the interim distribution Friday, 14 March
Payment date of the interim distribution Monday, 17 March
No dematerialisation or rematerialisation of Growthpoint linked unit
certificates may take place between Monday, 10 March 2003 and Friday, 14 March
2003, both days inclusive.
FURTHER Cautionary Announcement
Growthpoint linked unit holders are referred to the cautionary announcement
published on 3 February 2003 and are advised that the company is still involved
in negotiations, which if successfully concluded, may have an effect on the
market price at which the company`s linked units trade on the JSE Securities
Exchange South Africa. Growthpoint linked unitholders are accordingly advised to
continue to exercise caution in dealing in their linked units until a further
announcement is made.
By order of the Board
Growthpoint Properties Limited 20 February 2003
Registered office: Transfer secretary:
100 Grayston Drive, Computershare Investor Services Limited
Sandown, Sandton, 2196. PO Box 78949, Sandton, 2146
(Registration number 1958/003546/06)
9th Floor, 70 Marshall Street,
Johannesburg, 2001
PO Box 1053, Johannesburg, 2000
Sponsor:
Investec Securities Limited
100 Grayston Drive, Sandown, Sandton, 2196.
PO Box 78949, Sandton, 2146
Managed by: Investec Property Group
Date: 20/02/2003 04:05:00 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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