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REDEFINE INCOME FUND LIMITED - AUDITED RESULTS FOR THE YEAR ENDED 31 AUGUST 2004 REDEFINE INCOME FUND LIMITED Registration number: 1999/018591/06 Share code: RDF ISIN: ZA000023503 AUDITED RESULTS FOR THE YEAR ENDED 31 AUGUST 2004 * Distribution per linked unit increased by 7.56% * NAV per linked unit increased by 14.94% * Property portfolio 94.7% leased CONSOLIDATED INCOME STATEMENT Audited Audited 31 Aug 2004 31 Aug 2003 R000 R000
Revenue Property portfolio 238 953 197 919 Listed security portfolio 181 705 164 174 420 658 362 093
Operating costs - property portfolio 78 342 52 691 Administration costs 18 069 17 415 Operating profit 324 247 291 987 Net capital gain on non-current assets 192 936 51 340 Profit from operations 517 183 343 327 Interest received 3 572 6 657 Profit before finance charges 520 755 349 984 Finance charges 181 983 182 447 Profit before taxation 338 772 167 537 Taxation - - Profit attributable to linked unitholders 338 772 167 537 Headline earnings and distributions Profit attributable to linked unitholders 338 772 167 537 Net capital gain on non-current assets (192 936) (51 340) Headline earnings and total distributions 145 836 116 197 - First quarter 32 068 29 135 - Second quarter 36 622 34 966 - Third quarter 38 227 25 369 - Fourth quarter 38 919 26 727 Earnings per linked unit Actual number of linked units in issue (000) 474 705 413 016 Weighted number of linked units in issue (000) 455 262 392 839 Earnings per linked unit (cents) 74.41 42.65 Headline earnings per linked unit (cents) 32.03 29.58 Distribution per linked unit (cents) 32.00 29.75 Net asset value per linked unit (cents) 276.99 240.79 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Audited Audited
31 Aug 2004 31 Aug 2003 R000 R000 Balance at beginning of period 994 503 761 457 - As previously stated 994 503 753 666 - Gains on interest rate swaps - 7 791 Issue of linked units 155 700 226 143 Issue expenses written-off (542) (1 178) Net change in interest rate swaps (27 696) (43 259) Profit attributable to linked unitholders 338 772 167 537 Distributions to linked unitholders (145 836) (116 197) 1 314 901 994 503 CONSOLIDATED BALANCE SHEET Audited Audited 31 Aug 2004 31 Aug 2003 R000 R000 ASSETS Non-current assets 2 694 514 2 448 578 Property portfolio 1 345 043 1 139 256 Listed security portfolio 1 349 471 1 309 322 Current assets 196 936 76 729 Trading securities 492 5 392 Deposits, pre-payments and other receivables 24 393 19 667 Tenant debtors 9 896 6 384 Listed security disposals 74 041 - Listed security distributions 20 140 45 262 Cash and cash equivalents 67 974 24 Total assets 2 891 450 2 525 307 EQUITY AND LIABILITIES Capital and reserves 1 314 901 994 503 Linked unit capital 1 038 636 883 478 Non-distributable reserve 339 429 146 493 Deficit on interest rate swaps (63 164) (35 468) Non-current liabilities 1 508 084 1 468 072 Interest-bearing liabilities 1 410 477 1 432 604 Interest rate swaps 63 164 35 468 Deferred taxation 34 443 - Current liabilities 68 465 62 732 Interest-bearing liabilities 5 587 17 086 Trade and other payables 23 959 15 754 Bank overdraft - 3 165 Unitholders for distribution 38 919 26 727 Total equity and liabilities 2 891 450 2 525 307 CONDENSED CONSOLIDATED CASH FLOW STATEMENT Audited Audited
31 Aug 2004 31 Aug 2003 R000 R000 Cash effects from operating activities 43 315 (15 085) Cash generated from operations 355 370 279 900 Net financing costs (178 411) (175 790) Linked unit distributions paid (133 644) (119 195) Cash effects of investing activities (93 732) (503 242) Net property acquisitions (181 234) (403 936) Net listed security disposals (acquisitions) 87 502 (99 306) Cash effects from financing activities 121 532 548 214 Linked units issued 155 158 224 965 Net movement in borrowings (33 626) 323 249 Net movement in cash and cash equivalents 71 115 29 887 Opening cash and cash equivalents (3 141) (33 028) Closing cash and cash equivalents 67 974 (3 141) COMMENTARY REVIEW OF RESULTS Redefine Income Fund Limited ("Redefine") has maintained its interest distribution at 8.25 cents per linked unit for the final quarter of the financial year ended 31 August 2004. Distributions for the year ended 31 August 2004 of 32.00 cents (2003: 29.75 cents) per linked unit have exceeded the forecast of 31.00 cents per linked unit. Headline earnings are 32.03 cents (2003: 29.58 cents) per linked unit. Non-current assets at 31 August 2004 increased by 10,04% to R2.69 billion. Net Asset Value per linked unit is R2.77 (2003: R2.41). PROPERTY PORTFOLIO Twenty-one non-core properties with capital values below R20 million were sold during the year under review. The acquisition of four prime investment properties, 2 Arnold Road in Rosebank, Hatfield Square in Pretoria, Standard Bank Centre in Cape Town and Motown in Durban, for R333 million increased the property portfolio, which comprises seventy- three properties, to R1.345 billion and the GLA to 453 872m2. Sectoral spread by revenue is 65% commercial, 22% retail and 13% industrial. The property portfolio comprises predominantly A-grade tenants with the balance being B-grade. The lease expiry profile is significantly better than the sector average with 54% of leases expiring in 2008 and beyond. At 31 August 2004 the property portfolio was 94.7% leased. During the year under review 34 093m2 of vacant space was leased and leases in respect of 25 827m2 were renewed. LISTED SECURITIES PORTFOLIO Redefine"s listed securities portfolio increased by R40 million as a result of an increase in market value of R176 million less net disposals of R136 million. The listed securities portfolio at 31 August 2004 was valued at R1.35 billion. CAPITAL GAIN ON NON-CURRENT ASSETS The net capital gain on non-current assets comprises realised profits less losses on sale and profits on revaluation of the property and listed security portfolios as follows: 2004 2003 R000 R000 Listed security portfolio - unrealised profit 175 799 93 729 Listed security portfolio - realised profit on sale 25 893 29 674 Property portfolio - unrealised profit (loss) on independent revaluation 29 078 (68 773) Property portfolio - realised loss on sale (3 391) (3 290) Deferred Capital Gains Tax (34 443) - 192 936 51 340 INTEREST RATE MANAGEMENT Redefine"s borrowings of R1.41 billion equates to 52% (2003: 58%) of non-current assets. It is Redefine"s intention to reduce gearing in the medium term to 45%. ODD-LOT OFFER Redefine has issued a circular to linked unitholders requesting approval to make an odd-lot offer. The offer is compulsory to linked unitholders holding 99 linked units or less and voluntary to those holding between 100 and 999 linked units and has been proposed in order to decrease the substantial recurring costs of administration, estimated at R621 000 per annum, resulting from the large number of odd-lot linked unitholders on its register. POST-BALANCE SHEET EVENTS Redefine has purchased 90 Rivonia Road in Sandton (subject to linked unit- holder approval), 90 Grayston Drive in Sandton and an undivided 50% share in a property at Shelly Beach in KwaZulu-Natal on which a shopping centre will be developed, for an aggregate consideration of R155.5 million. Redefine has disposed of seven properties for a total consideration of R50.3 million. Redefine has disposed of 3.9 million ApexHi Properties Limited A-linked units for an aggregate consideration of R33.3 million. DIRECTORATE Jeffrey Kron has resigned as a non-executive director due to professional commitments. PROSPECTS Growth in distribution per linked unit is anticipated for the year ending 31 August 2005. INTEREST DISTRIBUTION Unitholders are advised that interest distribution No. 18 in respect of the period of 1 June 2004 to 31 August 2004 of 8.25 cents per linked unit has been declared. The last date to trade cum interest Friday, 22 October 2004 Linked units will trade ex interest Monday, 25 October 2004 Record date Friday, 29 October 2004 Payment of interest distribution No. 18 Monday, 1 November 2004 Unitholders may not dematerialise or rematerialise their linked units between Monday, 25 October 2004 and Friday, 29 October 2004, both days inclusive. Linked unitholders electing to sell their linked units in terms of the odd-lot offer will be entitled to the proceeds from interest distribution No 18. Linked unitholders electing to subscribe for additional linked units in terms of the odd-lot offer will not be entitled to the proceeds from interest distribution No. 18 on their subscription units. Wolf Cesman Brian Azizollahoff Chairman Chief Executive Officer 4 October 2004 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. AUDIT OPINION The financial results have been audited by Fisher Hoffman PKF (Jhb) Inc. and their unqualified opinion is available for inspection at the registered office of Redefine Income Fund Limited. REDEFINE INCOME FUND LIMITED 2 Arnold Road, Rosebank, Johannesburg. PO Box 1731, Parklands, 2121, South Africa. Telephone +27 11 283 0110 Email: mail@redefine.co.za Directors: W Cesman* (Chairman), Brian Azizollahoff** (CEO), E Ellerine*, S Shaw-Taylor*, M Wainer* *non-executive **British Registration number: 1999/018591/06 Share code: RDF ISIN: ZA000023503 Company secretary: Probity Business Services (Pty) Ltd. PO Box 85392, Emmarentia, 2129. Telephone +27 11 327 7146 www.redefine.co.za Date: 04/10/2004 11:00:18 AM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
