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REDEFINE INCOME FUND LIMITED - AUDITED RESULTS FOR THE YEAR ENDED 31 AUGUST 2003

Release Date: 30/09/2003 16:00
Code(s): RDF
Wrap Text

REDEFINE INCOME FUND LIMITED - AUDITED RESULTS FOR THE YEAR ENDED 31 AUGUST 2003 REDEFINE INCOME FUND LIMITED Registration No. 1999/018591/06 Share code: RDF ISN Code: ZA000023503 AUDITED RESULTS FOR THE YEAR ENDED 31 AUGUST 2003 CONSOLIDATED INCOME STATEMENT Audited Audited
31 Aug 2003 31 Aug 2002 R000 R000 Revenue Property portfolio 197 919 106 695 Listed security portfolio 164 174 142 116 362 093 248 811 Operating costs - property portfolio 52 691 25 678 Administration costs 17 415 11 451 Operating profit 291 987 211 682 Net capital gain (loss) on non-current assets 51 340 (79 674) Profit from operations 343 327 132 008 Interest received 6 657 1 211 Profit before finance charges 349 984 133 219 Finance charges 182 447 109 437 Profit before taxation 167 537 23 782 Taxation - - Profit attributable to linked unitholders 167 537 23 782 Headline earnings and distributions Profit attributable to linked unitholders 167 537 23 782 Net capital (gain) loss on non-current assets (51 340) 79 674 Headline earnings and total distributions 116 197 103 456 First quarter 29 135 22 530 Second quarter 34 966 22 771 Third quarter 25 369 28 430 Fourth quarter 26 727 29 725 Earnings per linked unit Actual number of linked units in issue (000) 413 016 321 068 Weighted number of linked units in issue (000) 392 839 279 096 Earnings per linked unit (cents) 42.65 8.52 Headline earnings per linked unit (cents) 29.58 37.07 Distribution per linked unit (cents) 29.75 37.00 Net asset value per linked unit (cents) 240.79 234.74 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Audited Audited 31 Aug 2003 31 Aug 2002 R000 R000
Balance at beginning of period 761 457 644 824 As previously stated 753 666 644 824 Deferred interest rate hedging gain 7 791 - Net issue of linked units 226 143 190 888 Issue expenses written-off (1 178) (2 372) Revaluation of interest rate swaps (43 259) - Profit attributable to linked unitholders 167 537 23 782 Distributions to linked unitholders (116 197) (103 456) 994 503 753 666 CONSOLIDATED BALANCE SHEET Audited Audited 31 Aug 2003 31 Aug 2002
R000 R000 ASSETS Non-current asset 2 448 578 1 894 390 Property portfolio 1 139 256 807 777 Listed security portfolio 1 309 322 1 086 613 Current assets 76 729 58 698 Trading securities 5 392 - Deposits, prepayments and other receivables 19 667 12 034 Tenant debtors 6 384 3 120 Listed security distributions 45 262 43 539 Cash and cash equivalents 24 5 Total assets 2 525 307 1 953 088 EQUITY AND LIABILITIES Capital and reserves 994 503 753 666 Linked unit capital 883 478 658 513 Non-distributable reserve 146 493 95 153 Deferred interest rate hedging loss (35 468) - Non-current liabilities 1 468 072 1 115 552 Interest-bearing liabilities 1 432 604 1 115 552 Interest rate swaps 35 468 - Current liabilities 62 732 83 870 Interest-bearing liabilities 17 086 10 889 Trade and other payables 15 754 10 223 Bank overdraft 3 165 33 033 Unitholders for distribution 26 727 29 725 Total equity and liabilities 2 525 307 1 953 088 CONDENSED CONSOLIDATED CASH FLOW STATEMENTS Audited Audited
31 Aug 2003 31 Aug 2002 R000 R000 Cash effects from operating activities (15 085) (47 252) Cash generated from operations 279 900 156 045 Net financing costs (175 790) (108 226) Linked unit distributions paid (119 195) (95 071) Cash effects of investing activities (503 242) (621 308) Net property acquisitions (403 936) (352 570) Net listed security acquisitions (99 306) (268 738) Cash effects from financing activities 548 214 603 172 Linked units issued 224 965 188 516 Net borrowings 323 249 414 656 Net movement in cash and cash equivalents 29 887 (65 388) Opening cash and cash equivalents (33 028) 32 360 Closing cash and cash equivalents (3 141) (33 028) COMMENTARY Review Of Results Redefine Income Fund Limited ("Redefine") increased its interest distribution to 6.5 cents per linked unit for the final quarter of the financial year ended 31 August 2003 exceeding the forecast of 6.25 cents per linked unit. Distributions for the year ended 31 August 2003 total 29.75 cents (2002: 37 cents) per linked unit. Headline earnings are 29.6 cents (2002: 37.1 cents) per linked unit. Non-current assets increased by 29.3% to R2.45 billion at 31 August 2003. The Net Asset Value ("NAV") per linked unit is R2.41 post the AC 133 adjustment in respect of the value of the rate swaps at 31 August 2003. The NAV per linked unit pre the AC 133 adjustment is R2.49 (2002: R2.35). Property Portfolio Two small properties, Erf 1379 Sunninghill and Mellis Park 2, were sold during the year under review. The acquisition of a portfolio of 27 properties from Rand Leases, a Virgin Active gym in Benoni and Scott Street Mall in Newcastle have increased the property portfolio to R1.14 billion and the gross lettable area to 410 220m2. The property portfolio at 31 August 2003 comprises 89 properties. Sectoral spread by revenue is 59% commercial, 27% retail and 14% industrial. The portfolio comprises 74% A-grade tenants with the balance being B-grade. The lease expiry profile is better than the sector average with more than 37% of leases expiring in 2008 and beyond. At 31 August 2003 the portfolio was 93.3% leased. During the year under review 39 217m2 of vacant space was leased and leases in respect of 24 791m2 were renewed. Listed Securities Portfolio Redefine"s listed securities portfolio increased by R223 million as a result of net acquisitions of R129 million and an increase in market value of R94 million. The listed securities portfolio at 31 August 2003 was valued at R1.31 billion. Capital Gain On Non-Current Assets The net capital gain on non-current assets comprises realised profits and losses on sale and profits and losses on revaluation of the property and listed security portfolios as follows: 2003 2002 R000 R000 Listed security portfolio - unrealised profit (loss) 93 729 (112 452) Listed security portfolio - realised profit on sale 29 674 28 543 Property portfolio - unrealised (loss) profit on revaluation (68 773) 9 000 Property portfolio - realised loss on sale (3 290) (4 765) 51 340 (79 674) The unrealised loss on the property portfolio is limited to a number of properties and the loss in value is anticipated to be recouped over time through active management and leasing. Interest Rate Management Redefine"s borrowings of R1.43 billion equates to 58% of non-current assets. It is Redefine"s intention to reduce gearing in the medium term to 45%. 91% of the borrowings are fixed for periods of five and seven years at an average interest rate of 12.8%. Post Balance Sheet Events Redefine"s purchase of Standard Bank Centre on the Cape Town foreshore was approved by the Competitions Commission on 1 September 2003. This R218 million prime investment property has been acquired at an initial yield of 13.3% before gearing. Directorate Brian Azizollahoff was appointed CEO of Redefine on 27 April 2003. Prospects It is anticipated that distributions previously projected at no less than 31 cents per linked unit for the year ending 31 August 2004 will be achieved. Interest Distribution Unitholders are advised that interest distribution No. 14 in respect of the period 1 June 2003 to 31 August 2003 of 6.5 cents per linked unit has been declared. The last date to trade cum interest Friday, 17 October 2003 Linked units will trade ex interest Monday, 20 October 2003 Record date Friday, 24 October 2003 Payment of interest distribution No. 14 Monday, 27 October 2003 Unitholders may not dematerialise or re-materialise their linked units between Monday, 20 October 2003 and Friday, 24 October 2003, both days inclusive. Wolf Cesman, Chairman Brian Azizollahoff, Chief Executive Officer 30 September 2003 BASIS OF PREPARATION The financial results are determined in accordance with South African Statements of Generally Accepted Accounting Practice and the accounting policies applied are consistent with those applied in the previous financial year, except for the adoption of AC133 Financial Instruments: Recognition and Measurement. AUDIT OPINION The financial results have been audited by Fisher Hoffman PKF (Jhb) Inc. and their unqualified audit opinion is available for inspection at the registered office of Redefine Income Fund Limited. REDEFINE INCOME FUND LIMITED 2 Arnold Road, Rosebank, Johannesburg P O Box 471917, Parklands, 2121, South Africa Telephone +27 11 283 0110 E-mail: redefine@corpcapital.com Directors: W Cesman* (Chairman), E Ellerine*, J Kron*, Brian Azizollahoff# (CEO), D Solomon*, J Solomon*, M Wainer* *non-executive British Company secretary: Probity Business Services (Pty) Ltd. P O Box 85392, Emmarentia, 2129 Telephone: +27 11 726 2446 Date: 30/09/2003 04:00:16 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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