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HPA/HPB - Hospitality - Reviewed results for the year ended 30 June 2010 and
interest payment declaration
Hospitality Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2005/014211/06)
Share code for A-linked units: HPA ISIN for A-linked units: ZAE000076790
Share code for B-linked units: HPB ISIN for B-linked units: ZAE000076808
("Hospitality" or "the Fund" or "the company" or "the group")
REVIEWED RESULTS FOR THE YEAR ENDED 30 JUNE 2010 AND INTEREST PAYMENT
DECLARATION
Comments
1. Introduction
Hospitality Property Fund Limited is a property loan stock company that
invests exclusively in hotel and leisure properties. The Fund`s units in issue
comprise A-and B-linked units with A-linked units having a preferential claim
to earnings with capped growth, whilst the B-linked units receive the balance
of earnings. Apart from improved trading conditions over the period of the
FIFA World Cup 2010, the hospitality industry in South Africa remains under
pressure. This is primarily due to a continuing sub-par level of occupancies
generally, as a consequence of the slow rate of recovery from recessionary
conditions, coupled with an increase in room stock. New hotel developments that
were initiated largely in anticipation of the World Cup event, opened their
doors into a depressed trading environment and while struggling to build
occupancies, have put further pressure on trading conditions. The STR Global
hotel benchmark reports reflect a decline in average occupancies in South
Africa of 8.5% and an increase in average room rates (ARR) of 9.0% (primarily
driven by the World Cup period) for the reporting period compared to the
previous financial year.
A similar decline in occupancies experienced by the Fund has resulted in lower
rental income and distributable earnings. While the A-linked units`
distribution for the year remained unaffected, the decrease in the Fund`s
distributable earnings has had a leveraged negative effect on the B-linked
units` distribution.
2. Results
Annual distributable earnings per linked unit declined by 22.4% compared to
2009. The A-linked units distribution of 116.30 cents grew by 5% over the
previous year, in line with the Fund`s distribution structure, while
distributions in respect of the B-linked unit declined by 42.4% to 87.98 cents
when compared to the previous year.
Distributions on the B-linked unit improved from 36.30 cents (interim) to 51.68
cents (final). This improved distribution was mainly due to higher variable
rentals generated over the World Cup event in June 2010. The positive effect of
the World Cup was however partly impaired by the Fund incurring bad debt
write-offs during the period of R6.4 million linked to the "Queensgate Group".
Conference Centre Proper ties (Pty) Limited`s lease over 46% of the units in
the Waterclub Court Body Corporate Scheme at the Radisson Blu Waterfront was
cancelled in January 2010 as a consequence of the tenant defaulting. Similarly,
the lease of Queensgate Greenmarket Square Investments (Pty) Limited at
Park Inn Greenmarket Square, Cape Town was cancelled in February 2010. The
surety on the above leases, Queensgate Holdings (Pty) Limited, was unable to
settle the debts and was liquidated together with the two tenants during the
reporting period. This impairment reduced the B-linked units distribution by
10.16 cents for the six months to 30 June 2010. Replacement leases were secured
on both properties following cancellation.
On the remaining properties exposed to variable rentals, hotel management
continued to aggressively market the hotels with increased sales and marketing
resources as well as focusing on maintaining efficiencies and reducing costs
while endeavouring to maintain service standards.
The following table reflects the financial results for the year ended 30 June
2010 compared to the previous year.
Year ended 30 June
2010 2009 Variance
(R`000) (R`000) (%)
Contractual rental 265 902 256 686 3.6
Fund expenses (29 577) (31 276) (5.4)
Net finance costs (108 593) (63 172) 71.9
Profit before debenture interest 127 732 162 238 (21.3)
Recoupment of debenture interest 1 194 - 100.0
Debenture interest (128 926) (162 238) (20.5)
Distribution - A-linked unit (73 399) (68 219) 7.6
Distribution - B-linked unit (55 527) (94 019) (40.9)
Distribution - A-linked unit (cents) 116.30 110.76 5.0
Distribution - B-linked unit (cents) 87.98 152.65 (42.4)
Approximately 79% (2009: 75%) of the Fund`s revenue was derived from fixed
rentals with CPI-linked escalations. The remaining 21% (2009: 25%) comprised
variable rentals which are linked to under lying hotel operational performance.
The decline in variable rentals was due to the lower trading levels affecting
the hotels` profitability and reflects the current stress in the hotel
industry. Net finance costs were significantly higher than the previous year
due to additional costs incurred to service debt raised to finance
developments and the acquisition of the external Manco.
3. FIFA World Cup 2010
The FIFA World Cup 2010 was a major success for South Africa with visitors
experiencing the country`s warm hospitality. The number of foreign visitors
was lower than initial expectations which resulted in MATCH Hospitality
(FIFA`s official hospitality programme rights holder) releasing substantial
volumes of reserved room nights during April 2010. This unexpected release
placed severe pressure on hotels contracted with MATCH. With a limited time
period to sell the available rooms during the World Cup, hotels in certain
nodes reduced their average room rates in order to attract business. For the
month of June 2010, occupancies for all hotels on a national basis per the STR
Global report averaged 65.6% compared to 57.7% for June 2009 and with certain
nodes, most notably greater Johannesburg, performing better than others. The
Fund`s occupancies for these periods averaged 72.3% and 51.1% respectively.
The Fund was only exposed to MATCH at four of its Protea managed hotels
and through its investment in the Courtyard portfolio. The majority of the
rooms where it had variable rental exposure were contracted to Tour vest
Inbound Operation (TIO) with fixed payment terms and no cancellation
provisions.
4. Internalisation of Management Company
The internalisation of the Management Company was effective from 1 December
2009. The minimum purchase price of R123 million was settled by way of R82
million in cash, funded from available debt facilities, and R41 million in
Hospitality linked units. The remaining balance of the purchase price will be
calculated at the end of June 2012, dependent on certain performance criteria
and subject to a maximum value of R180 million escalated by CPI annually. The
transaction has resulted in an alignment of interests of key management with
that of linked unitholders, the elimination of perceived conflicts of interest
and an enhancement in the Fund`s yield.
5. Property portfolio
The Fund`s portfolio comprises interests in 24 hotel and resort properties in
South Africa. As at 30 June 2010 the portfolio was valued at R3.3 billion
which resulted in a deficit on revaluation of investment properties of R253.6
million (7%) being recorded in the statement of comprehensive income. The
portfolio is segmented into four lease types, namely: fixed lease properties,
C-Corp lease properties, fixed and variable leased properties (F&V) and
variable lease properties.
Rentals under fixed lease agreements are determined by normal contractual lease
terms, with inflation linked annual escalations. C-Corp lease agreements
comprise approximately 50% initial fixed lease rental, with the remaining being
a variable rental equivalent to 90% of the hotel`s EBITDA (earnings before
interest, tax, depreciation and amortisation) after deducting the fixed lease
portion. F&V leases are similar to the C-Corp leases and consist of
approximately 50% initial fixed rentals with the remaining being variable.
Variable lease agreements consist of rentals based on EBITDA from the
property`s under lying operations.
The net asset value per linked unit as at 30 June 2010 was R15.35 (excluding
deferred taxation).
The average lease expiry period is 7.19 years.
Please see Press for Graphic illustrations.
6. Acquisitions and disposals
The Protea Edward hotel was acquired by the Fund at a cost of R110.4 million.
While transfer was effected on 2 August 2010, agreement was reached with the
seller on an effective date of 1 June 2010.
The Fund is further under taking a review of its portfolio with a view to
focusing on large, financially robust assets and the possible disposal of
smaller, less strategic assets.
7. Subsequent events
Cautionary announcements released on SENS on 9 June 2010 and 23 July 2010,
advised linked unitholders ("unitholders") that Hospitality was at an advanced
stage of negotiations to acquire two properties as an indivisible transaction
from the Arabella South Africa Holding (Proprietary) Limited group of
companies, comprising:
the 5-star Westin Grand Hotel located adjacent to the Cape Town International
Convention Centre; and
the 5-star Arabella Western Cape Hotel & Spa and the Arabella Golf Course
situated on the Arabella Country Estate near Hermanus, including 437 hectares
of undeveloped land located adjacent to the Arabella Country Estate.
As the transaction is classified as Category 1 in terms of the JSE Limited
(JSE) Listings Requirements it will require, amongst other things, unitholder
approval.
The acquisition of these hotels will be funded through a combination of debt
funding from Nedbank and the proceeds from a R490 million rights issue.
Circulars containing further details of the Arabella portfolio acquisition and
the rights issue will be distributed to shareholders once the transaction is
concluded.
8. Development and capital projects
The refurbishment of the Protea Hotel Imperial, Pietermaritzburg was completed
at the end of May 2010 at a cost of R14 million. Phase 1 of the refurbishment
of Protea Marine, Port Elizabeth was also completed at the end of May 2010 and
Phase 2 is expected to be concluded by November 2010, total budgeted at a cost
of R27 million. All other refurbishment programmes were placed on hold
during June and July 2010 in order to maximise rental income during the World
Cup. Construction is in progress to increase the conference capacity and
construct an additional 40 rooms at Champagne Sports Resort at a cost of R28
million.
9. Borrowings
The Fund`s interest-bearing liabilities increased by R295 million to R1.308
million during the financial year. Of this, R82 million was utilised to fund
the acquisition of the Management Company.
The Fund`s interest rate swaps which had been contracted over the past few
years in a higher interest rate environment were becoming increasingly
burdensome relative to the derivative swaps currently available in the market.
In order to take advantage of the current favourable swap opportunities, the
Fund elected to cancel its existing swaps through a refinancing arrangement to
the value of R114 million and to enter into new swaps at substantially lower
rates. This transaction was effected on 15 June 2010 and the benefits of a
lower interest rate liability will flow through in the years ahead with a net
interest saving of approximately R30 million over the next three years. The
amount owing on the previous swaps has been capitalised to an interest-bearing
loan account. The remaining increase in the debt facility was utilised to fund
refurbishment and capital expenditure programmes.
The Fund`s weighted average cost of debt for the year was 10.16% and the
gearing ratio at 30 June 2010 was 39.4% of total asset value.
In compliance with International Financial Reporting Standards (IFRS) interest
swap agreements are valued on a mar k-to-market basis. A fair value adjustment
of R54 million has been charged to the income statement. This fair value
adjustment has no effect on the distribution to linked unitholders but
adversely affects both the earnings and headline earnings. The current swap
profile is detailed below:
All-in fixed rate Commencement date Maturity date
R347 million 8.72% June 2010 June 2013
R347 million 9.05% June 2010 June 2014
R347 million 9.28% June 2010 June 2015
R1 041 million
10. Unitholders
During the year some 30.4% of the A-linked units and 19.4% of the B-linked units
were traded. The Fund has a BEE ownership component of 22.03%.
11. Prospects
The first 10 days of the new financial year continued to derive benefit from
the FIFA World Cup 2010 event as the majority of the Fund`s room inventory was
sold for this period. For the remainder of the financial year Management expects
trading conditions to remain challenging due to the increased room supply and
cautious corporate, conference and leisure travel spend. In addition to the
Arabella Portfolio the Fund is also considering other acquisitions that have
come onto the market, some of which are unique and highly sought-after
properties. As a result of the distressed trading conditions and partly due to
the recent overzealous development initiatives, prices are expected to remain
favourable.
The existing portfolio, the bulk of which is newly refurbished, together with
the prospective new acquisitions and supported by more streamlined management
and lease structures, should see the Fund well-positioned to take maximum
advantage of a recovery in the economy.
12. Changes in the composition of the Board
Mr F M Berkeley was appointed as an independent non-executive director to the
board with effect from 11 March 2010. Mr T E Sewell resigned from the board
on 19 May 2010, on which day Mr Berkeley was appointed in the role of
Chairman.
The board is most grateful to Mr Sewell for his valuable leadership and
contribution as Chairman since his appointment in January 2006.
13. Payments of debenture interest
Unitholders will receive debenture interest payment number 9 for the six-month
period ended 30 June 2010, of 58.84 cents per A-linked unit and 51.68 cents per
B-linked unit.
2010
Last day to trade cum interest Friday, 3 September
Linked units will trade ex-interest Monday, 6 September
Record date Friday, 10 September
Payment date Monday, 13 September
Unitholders may not dematerialise or rematerialise their linked units between
Monday, 6 September 2010 and Friday, 10 September 2010, both days inclusive.
By order of the Board
F M Berkeley G A Nelson
(Chairman) (Chief Executive Officer)
18 August 2010
Directors: F M Berkeley (Chairman)*+, G A Nelson (CEO),Y Aminzadeh (Dutch)*,
R Asmal, K H Abdul-Karrim*+, Z N Kubukeli*+, B M Madumise*+,
W J Midgley*, A S Rogers (Deputy CEO), W C Ross*+
(*Non-executive, +Independent)
Registered office: "3 on Glenhove", corner Tottenham Avenue and Glenhove Road,
Melrose Estate, 2196
Tel: +27 11 994 6320 Fax: +27 11 994 6321
Email: info@hpf.co.za Web: www.hpf.co.za
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed financial statements are prepared in accordance with
International Financial Reporting Standards (IFRS), including the presentation
and disclosure requirements of IAS 34, the AC 500 series issued by SAICA and
the requirements of the Companies Act of South Africa (Act 61 of 1973) as
amended. KPMG Inc, the independent auditor, has reviewed the financial
statements contained in this preliminary report and has expressed an unmodified
review opinion. Their review opinion is available for inspection at the
company`s registered office.
The financial statements are prepared on the historic cost basis, except for
investment properties and derivatives which are measured at fair value. The
significant accounting policies are as follows:
* Investment property is initially recognised at cost including transaction
costs. Subsequent to initial measurement, investment property is measured at
fair value. Gains or losses arising from changes in fair value are included in
net profit or loss for the period in which they arise. These gains or losses
are transferred to a fair value reserve as they are not available for
distribution.
* Interest-bearing liabilities and debenture capital are measured at amortised
cost.
* Revenue comprises rental income from the letting of investment property and
is accounted for on a straight-line basis over the period of the lease in terms
of IAS 17, Leases.
* Deferred taxation on the fair value adjustment of investment properties has
been calculated at 14% on land value and 28% on buildings.
The accounting policies are consistent with those applied in the most recent
audited financial statements and the following new policies and standards have
been adopted:
* Goodwill is initially measured as the excess of the sum of the fair values of
the consideration transferred over the recognised amount of the identifiable
assets acquired and liabilities assumed. When the excess is negative it is
recognised immediately in profit or loss. Subsequent to initial recognition,
goodwill is measured at cost less accumulated impairment losses.
* IFRS 3 (2008). The group has adopted this standard on 1 July 2009. This
standard applies prospectively and has no effect on comparative periods.
* Contingent consideration classified as an asset or a liability that is a
financial instrument shall be measured initially at fair value. Any subsequent
change in estimate will be recognised in profit or loss. Transaction costs will
be expensed.
* Operating Segments (IFRS 8) - the group has adopted this standard effective 1
July 2009. This standard requires the operating segment disclosure to be based
on the information that management uses internally to evaluate segmental
performance and when deciding how to allocate resources to operating segments.
Comparative figures have been restated accordingly.
DISCLOSURE REQUIRED IN TERMS OF IFRS 3 (BUSINESS COMBINATIONS)
INTERNALISATION OF THE MANAGEMENT COMPANY
On 1 December 2009 the group obtained control of Hospitality Property Fund
Manager s (Pty) Limited ("Manco"), the external property asset management
company that managed Hospitality by acquiring 100% of the shares and voting
interests in the company. The effect of the transaction resulted in the
internalisation of the Management from an external manager.
Over the past few years there has been a significant shift from external to
internally managed property companies both internationally and in South Africa.
The advantages of internalising include the yield enhancement from the lower
cost of internal management, the elimination of perceived conflicts of
interests and the further alignment of interests of key management with the
interests of Hospitality linked unitholders.
The effect of the internalisation resulted in no additional revenue to the Fund
since December 2009 due to inter-company charges being eliminated on
consolidation but an increase in net profit of R2.7 million as a result of
reduced expenses net of associated finance charges. If the acquisition had
occurred on 1 July 2009, there would be no increase in consolidated revenue but
net profits would have increased by R4.4 million.
The following summarises the major classes of consideration transferred, and
the recognised amounts of assets acquired and liabilities assumed at the
acquisition date:
R`000
Consideration transferred
Fair value - cash 82 000
Fair value - A-linked units issued 19 165 (1 521 014 units @ R12.60)*
Fair value - B-linked units issued 21 842 (1 521 014 units @ R14.36)*
123 007
* The fair value of the linked units was based on the 30-day VWAP of the listed
unit price on the JSE for the period preceding 1 December 2009.
Contingent consideration
The purchase price shall be an amount equivalent to the average of the 30 June
2009, 2010, 2011 and 2012 values of Manco. The values of Manco for each of the
years shall be calculated by taking the net profit after tax cash flows from
Manco`s operation for each of the years escalated by the CPI for a six- year
forecast period and discounting the forecast cash flows by the average yield of
Hospitality over the previous 12 months. This value is subject to a minimum
price of R123 million and a maximum price of R180 million escalated by CPI
between the effective date and 30 June 2012.
The minimum price was discharged in December 2009 and the balance of the
purchase price will be paid to the seller s in cash or in linked units, at
Hospitality`s election, within 30 days of the issue of the audited financial
statements of Hospitality for the 12 months ending 30 June 2012.
The group has included an amount of R30.5 million as contingent consideration
related to the additional consideration, which represents its fair value at the
acquisition date of 1 December 2009. The fair value of the contingent
consideration was calculated by applying a DCF valuation based on of the
criteria specified above. This amount was revalued at 30 June 2010 and resulted
in the fair value of the contingent consideration increasing to R32.8 million.
Identifiable assets acquired and liabilities assumed
R`000
Furniture and equipment 732
Bank 438
Sundry creditors (438)
Total net identifiable assets 732
Goodwill
Fair value of acquiree 153 554
Less: Value of identifiable assets (732)
Goodwill 152 822
Highlights:
* Distribution per A-linked unit 116.30 cents
* Distribution per B-linked unit 87.98 cents
* Manco internalised December 2009
* Protea Edward acquired effective 1 June 2010
The goodwill is attributable mainly to the improved profitability of the group
following the internalisation of the Management Company and the acquired skills
and technical talent acquired through the workforce. The goodwill is not
expected to be deducted for income tax purposes.
Fair value: Property, plant and equipment
The fair value of property, plant and equipment recognised as a result of a
business combination is based on market values. The market value of property is
the estimated amount for which a property could be exchanged on the date of
valuation between a willing buyer and a willing seller in an arm`s length
transaction after proper marketing wherein the par ties had each acted
knowledgeably and willingly. The fair value of items of plant and equipment is
based on the market approach and cost approaches using quoted market prices for
similar items when available and replacement cost when appropriate.
Transactions separate from the acquisition
The group incurred acquisition related costs of R2.3 million relating to
external legal fees, external transaction sponsor and independent advisory
fees, independent reporting accountants` fees, directors` fees, printing and
press announcement costs, JSE listing and inspection costs. An amount of R2.1
million was expensed and the balance of R0.18 million relating to share issue
expenses was allocated against share premium.
ACQUISITION OF PROTEA HOTEL EDWARD, DURBAN
On 1 June 2010 the group obtained control of the 4-star hotel known as "Protea
Hotel Edward" from Protea Hospitality Group (Pty) Limited and its wholly-owned
subsidiary, Swanvest 258 (Pty) Limited. This acquisition is in line with the
group`s objective of growing its investment portfolio in a controlled manner
through the addition of quality assets which will further diversify the
portfolio and which have the potential to enhance Unitholder returns. The hotel
has been acquired as a going concern.
Since the acquisition date, the consolidated revenue included R1.4 million and
the consolidated profit included R0.5 million relating to the acquiree. If the
acquisition had occurred on 1 July 2009, the increase in consolidated revenue
would have been R12.1 million and the consolidated profit would have increased
by R1.1 million.
The hotel was purchased for a total purchase consideration of R110.4 million.
The following summarises the major classes of consideration transferred, and
the recognised amounts of assets acquired and liabilities assumed at the
acquisition date:
R`000
Consideration transferable
Cash to be paid on registration of property transfer 110 400
Identifiable assets acquired and liabilities assumed
Investment property at fair value 110 987
Total net identifiable assets 110 987
Goodwill
Fair value of acquiree 110 400
Less: Value of identifiable assets (110 987)
Negative goodwill (587)
The transaction resulted in a marginal gain on acquisition as a result of
limited purchaser s being available in the market.
Transactions separate from the acquisition
The group incurred acquisition related costs of R0.145 million relating to
legal fees and press announcement costs which were expensed.
Statement of comprehensive income
for the year ended 30 June 2010
Reviewed Audited
2010 2009
R`000 R`000
Revenue 265 550 261 919
Rental income - contractual 265 902 256 686
- straight-line accrual (352) 5 233
Expenditure (29 577) (31 276)
Operating expenses (29 577) (31 276)
Operating profit 235 973 230 643
Transaction costs on business combinations (2 268) -
Net finance cost (108 593) (63 172)
Finance income 2 023 24 139
Finance costs (110 616) (87 311)
Profit before debenture interest, goodwill, fair
value
adjustments and taxation 125 112 167 471
Recoupment of debenture interest 1 194 -
Debenture interest (128 926) (162 238)
(Loss)/Profit before fair value adjustments,
goodwill
and taxation (2 620) 5 233
Negative goodwill 587 -
Fair value adjustments (309 855) 88 116
Investment properties, before straight-lining
adjustment (253 618) 204 619
Straight-line rental income accrual 352 (5 233)
Total fair value of investment properties (253 266) 199 386
Contingent consideration (2 287) -
Interest rate swaps (54 302) (111 270)
(Loss)/Profit before taxation (311 888) 93 349
Taxation 70 667 (54 889)
Total (loss)/profit and comprehensive
(loss)/income
for year (241 221) 38 460
Reconciliation between earnings, headline
earnings and
distributable earnings:
(Loss)/Profit for the year (241 221) 38 460
Adjustments: Debenture interest 127 732 162 238
(Loss)/Earnings (linked units) (113 489) 200 698
Adjustments:
Fair value - investment properties
revaluation, net of tax 182 951 (149 730)
Fair value - straight-line rental income (352) 5 233
Headline earnings (linked units) 69 110 56 201
Fair value - interest rate swaps 54 302 111 270
Transaction costs on business combinations 2 268 -
Negative goodwill (587) -
Contingent consideration 2 287 -
Straight-line rental income 352 (5 233)
Distributable earnings 127 732 162 238
Number of units/shares
A-linked unit 63 112 101 61 591 087
B-linked unit 63 112 101 61 591 087
Weighted average number of units/shares
A-linked unit 62 474 525 61 591 087
B-linked unit 62 474 525 61 591 087
Distribution per linked unit (cents)
A-linked unit 116.30 110.76
- Interim 57.46 54.72
- Final 58.84 56.04
B-linked unit 87.98 152.65
- Interim 36.30 92.04
- Final 51.68 60.61
204.28 263.41
(Loss)/Earnings per linked units (cents)
A-linked unit (90.83) 162.93
B-linked unit (90.83) 162.93
(181.66) 325.86
Headline earnings per linked unit (cents)
A-linked unit 55.31 45.62
B-linked unit 55.31 45.62
110.62 91.24
(Loss)/Earnings and diluted earnings per ordinary
share (cents) (193.06) 31.22
Statement of cash flows
for the year ended 30 June 2010
Reviewed Audited
2010 2009
R`000 R`000
Cash flows from operating activities
Cash generated from operations 196 678 265 321
Finance income received 2 023 24 139
Finance costs paid (110 616) (87 311)
Distribution to unitholders (129 827) (175 627)
Net cash (outflow)/inflow from operating activities (41 742) 26 522
Cash flows from investing activities
Acquisition and development of investment properties (56 249) (939 953)
Acquisition of furniture and equipment (750) -
Acquisition of Manco (122 268) -
Restructure of interest rate swaps (113 743) -
Net cash outflow from investing activities (293 010) (939 953)
Cash flows from financing activities
Proceeds from the issue of linked units 41 007 -
Share issue expenses paid (180) (185)
Interest-bearing liabilities raised 294 807 733 838
Net cash inflow from financing activities 335 634 733 653
Net increase/(decrease) in cash and cash equivalents 882 (179 778)
Cash and cash equivalents at beginning of year 9 828 189 606
Cash and cash equivalents at end of year 10 710 9 828
Statement of financial position
as at 30 June 2010
Reviewed Audited
2010 2009
R`000 R`000
ASSETS
Non-current assets 3 471 279 3 404 252
Investment properties 3 303 013 3 389 043
Straight-line rent income accrual 14 857 15 209
Investment properties and related accrual 3 317 870 3 404 252
Furniture and equipment 587 -
Goodwill 152 822 -
Current assets 37 284 12 619
Trade and other receivables 26 574 2 791
Cash and cash equivalents 10 710 9 828
Total assets 3 508 563 3 416 871
EQUITY AND LIABILITIES
Equity 580 276 809 265
Share capital and share premium 259 195 246 963
Retained earnings (701) 980
Fair value reserve 321 782 561 322
Non-current liabilities 2 709 779 2 483 644
Debentures 1 186 507 1 157 912
Interest-bearing liabilities 1 308 371 1 013 564
Derivative liability 11 014 70 456
Contingent consideration 32 842 -
Deferred taxation 171 045 241 712
Current liabilities 218 508 123 962
Trade and other payables 38 356 52 115
Vendors on property acquisition 110 400 -
Debenture interest payable 69 752 71 847
Total equity and liabilities 3 508 563 3 416 871
A. Net asset value per linked unit (Rand)
A-linked unit 14.00 15.97
B-linked unit 14.00 15.97
B. Net asset value per linked unit
(excluding deferred taxation) (Rand)
A-linked unit 15.35 17.93
B-linked unit 15.35 17.93
Statement of changes in equity
for the year ended 30 June 2010
Share Share Retained
capital premium earnings
R`000 R`000 R`000
Balance at 30 June 2008 12 247 136 980
Profit/Total comprehensive income
for the year 38 460
Transactions with owners, recorded
directly in equity - (185) (38 460)
Share issue expenses, net of tax (185)
Transfer to fair value reserve -
revaluation of investment properties
(net of deferred tax) (149 730)
Transfer from fair value reserve -
interest rate swaps 111 270
Balance at 30 June 2009 12 246 951 980
Loss/Total comprehensive loss
for the year (241 221)
Transactions with owners, recorded
directly in equity 1 12 231 239 540
Issue of shares 1 12 411
Share issue expenses, net of tax (180)
Transfer from fair value reserve -
investment properties
(net of deferred tax) 182 951
Transfer to fair value reserve -
contingent consideration 2 287
Transfer to fair value reserve -
interest rate swaps 54 302
Balance at 30 June 2010 13 259 182 (701)
Fair value
reserve Total
R`000 R`000
Balance at 30 June 2008 522 862 770 990
Profit/Total comprehensive income
for the year 38 460
Transactions with owners, recorded
directly in equity 38 460 (185)
Share issue expenses, net of tax (185)
Transfer to fair value reserve -
revaluation of investment properties
(net of deferred tax) 149 730 -
Transfer from fair value reserve -
interest rate swaps (111 270) -
Balance at 30 June 2009 561 322 809 265
Loss/Total comprehensive loss
for the year (241 221)
Transactions with owners, recorded
directly in equity (239 540) 12 232
Issue of shares 12 412
Share issue expenses, net of tax (180)
Transfer from fair value reserve -
investment properties
(net of deferred tax) (182 951) -
Transfer to fair value reserve -
contingent consideration (2 287) -
Transfer to fair value reserve -
interest rate swaps (54 302) -
Balance at 30 June 2010 321 782 580 276
Condensed segmental information
for the year ended 30 June 2010
Information regarding the results of each reportable segment is included
below. Performance is measured based on operating profit before finance costs,
as included in the internal management reports that are reviewed by the group`s
CEO. Segment profit is used to measure performance as Management believes that
such information is the most relevant in evaluating the results of certain
segments relative to other entities that operate within these industries.
Inter-segment pricing is determined on an arm`s length basis (or disclose
whichever basis of accounting is used).
Fixed lease C-Corp lease F&V lease
R`000 agreements agreements agreements
Statement of
comprehensive income -
30 June 2010
Segment revenue 137 844 117 951 1 364
Expenditure (6 413)
Segment results 131 431 117 951 1 364
Statement of comprehensive
income - 30 June 2009
Segment revenue 129 528 112 684 -
Expenditure - - -
Segment results 129 528 112 684 -
Statement of financial
position - 30 June 2010
Non-current assets
Investment properties 1 320 826 1 580 757 110 987
Current assets
Trade receivables 1 618 16 888 1 100
Segment assets 1 322 444 1 597 645 112 087
Statement of financial
position - 30 June 2009
Non-current assets
Investment properties 1 411 000 1 868 780
Current assets
Trade and other receivables 538 179
Segment assets 1 411 538 1 868 959 -
Total of all
Variable lease operating
R`000 agreements segments
Statement of
comprehensive income -
30 June 2010
Segment revenue 8 743 265 902
Expenditure (6 413)
Segment results 8 743 259 489
Statement of comprehensive
income - 30 June 2009
Segment revenue 14 474 256 686
Expenditure - -
Segment results 14 474 256 686
Statement of financial
position - 30 June 2010
Non-current assets
Investment properties 305 300 3 317 870
Current assets
Trade receivables 213 19 819
Segment assets 305 513 3 337 689
Statement of financial
position - 30 June 2009
Non-current assets
Investment properties 124 472 3 404 252
Current assets
Trade and other receivables 1 764 2 481
Segment assets 126 236 3 406 733
www.hpf.co.za
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 18/08/2010 16:42:25 Supplied by www.sharenet.co.za
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