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HPA/HPB - Hospitality Property Fund Limited - Reviewed results for the year
ended 30 June 2011 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")
REVIEWED RESULTS FOR THE YEAR ENDED 30 JUNE 2011 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 an equal number of 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.
While the South African hotel industry benefitted from higher demand during
the first ten days of the financial year at the end of the FIFA Soccer
World Cup 2010 TM the remainder of the year was characterised by difficult
trading conditions. According to STR Global, the industry reported a drop
in occupancy of 6.6% to 53.9% and a decrease in average room rates ("ARR")
of 3.4% to R866 for the twelve months to June 2011. The Fund`s trading
figures for that portion of its portfolio which is subject to variable
rental income (i.e dependant on operational earnings) reflected a similar
trend with a decline in occupancy of 2.6% to 51.4% and a drop in ARR of
3.8%to R913.
The pressure currently experienced by hotel owners across the country is
mainly as a result of the significant excess in room stock that came onto
the market in the run up to the 2010 FIFA Soccer World Cup TM. The abnormal
increase in supply has led to aggressive price competition among hotel
owners to secure business.
Coupled with the subdued trading conditions, hotel owners are being forced
to absorb increases in overhead costs which are currently significantly
ahead of inflation. In particular, escalations in administered prices such
as electricity, water and municipal rates have had a marked effect on
earnings. In contrast to commercial property owning entities that are able
to pass this additional cost on to tenants, the heavily competitive trading
environment precludes hotels from increasing room rates to absorb cost
increases. As a result, the Fund has experienced a direct reduction in its
variable rentals.
Management is cognisant of the current financial pressures on tenants and
continuously monitors and interacts with them in order to evaluate the
serviceability of fixed and variable rentals.
2. Results
The distribution per combined linked unit declined by 11.4% compared to the
previous financial year. The A linked units distribution of 122.11 cents
grew by 5%, in line with the Fund`s distribution structure, resulting in
the distribution on the B linked unit decreasing by 33.1% to58.90cents.
Rental income grew by 4.2% mainly as a result of the acquisition of the
Arabella portfolio. Whilst transfer of the Arabella portfolio was only
effective from 13 May2011, an agreement had been reached with the seller to
pay R17.5 million as compensation for the delay in transferring the
property to off set the differential between the rights offer proceeds that
were invested at call rates and the anticipated return from the property.
The standing portfolio however reflected a year on year decline in rental
income primarily as a consequence of the higher FIFA 2010 World Cup
revenues in the prior year.
Fund expenses declined by some R8.5 million. This was due to savings
achieved through the internalisation of the Fund`s management company
(Manco) in December 2009 as well as the once off bad debt write off
incurred in 2010 following the Queensgate Group`s default on the leases at
Radisson Blu Waterfront and the Park Inn Greenmarket Square. Net finance
costs increased by R4.2 million due to the additional debt to fund the
Arabella acquisition, various capital expenditure on refurbishments and the
cost of the Manco acquisition. This was however, partially off set by
interest earned on the proceeds of the rights issue concluded during
November 2010.
The following table reflects the operating financial results for the year
ended 30 June 2011 compared to the corresponding previous period.
Twelve months to 30 June
2011 2010 Variance Variance
(R`000) (R`000) (R`000) (%)
Contractual Rental 277 043 265 902 11 141 4.2%
Fund Expenses (21 051) (29 577) (8 526) 28.8%
Net Finance Costs (112857) (108 593) 4 264 3.9%
Profit before debenture
interest 143 135 1 27 732 15 403 12.1%
Recoupment of debenture
interest ** 17 534 1 194 16 340 1 368.5%
Debenture Interest (160 669) (128 926) 31 743 24.6%
Distribution A linked unit (108 389) (73 399) 34 990 47.7%
Distribution B linked unit (52 280) (55 527) (3 247) (5.8%)
Distribution A linked
unit(cents) 122.11 116.30 5.81 5.0%
Distribution B linked
unit (cents) 58.90 87.98 (29.08) (33.1%)
Combined distribution unit
(cents) 181.01 204.28 (23.27) (11.4%)
** Refer to item 4 below of the commentary
Approximately 85% (2010: 79%) of the Fund`s revenue during the year was
derived from fixed rentals with CPI linked escalations and the remaining
15% (2010: 21%) comprised variable rentals which are linked to underlying
hotel operational performance. This year on year change was an unintended
consequence of current hotel trading conditions.
3. Acquisition of Arabella Portfolio
Transfer of the immovable properties and hotel businesses referred to as
the "Arabella Portfolio" from Arabella South Africa Holdings (Pty) Ltd and
its subsidiaries to HPF Properties (Pty) Ltd ("HPF Properties") was
effected on 13 May 2011. The acquisition comprises The Westin Cape Town
("Westin") adjacent to the Cape Town International Convention Centre and
the Arabella Hotel and Spa ("AHS") in Kleinmond close to Hermanus as well
as 460 Hectares of undeveloped land adjoining AHS ("Phase 2 land"). The
total purchase consideration amounted to R756 million which includes
working capital liabilities of approximately R26 million for the hotels
which will be assumed by HPF Properties. The acquisition was funded from
the proceeds of the R490 million rights offer and new debt facilities with
Nedbank.
The Fund has treated the Phase 2 land (subject to obtaining the development
rights which have been applied for) as "properties held for trading". Once
the development rights have been secured, the Fund will market and sell
this development land with a view to realising a profit which will be
classified as distributable income.
4. Rights issue
The Fund successfully concluded a rights offer on 15 November 2010. A total
consideration of R490 million was raised through the issue of 21 030043 A
linked units at R12.80 each and 21030 043B linked units at R10.50. These
funds we reallocated to the partial settlement of the Arabella Portfolio
purchase consideration.
An amount of R17.5 million of the rights offer proceeds was allocated as a
recoupment of debenture interest in respect of the period 1 July 2010 to 14
November 2010 as the rights issue units received the full distribution for
the six months to 31 December2010 despite being in issue for only
1.5months. This recoupment was necessary in order to ensure that the
distributions of pre rights issue unit holders were not unjustifiably
compromised.
5. Internalisation of Manco
The internalisation of the Manco was implemented with effect from 1
December 2009. This resulted in an effective saving of some R24.3 million
for the 2011 reporting period . The initial purchase price of R123 million
was settled in December 2009 and the remaining balance will be calculated
at 30 June 2012, dependant on certain performance criteria and subject to a
maximum value of R180 million escalating annually at CPI from the effective
date. Current forecasts indicate that atop up payment will not be payable
to the vendors of Manco in 2012.
6. Property Portfolio
The Fund`s portfolio comprises interests in 26 hotel and resort properties
in South Africa. As at 30 June 2011 the portfolio was valued at R3.9
billion resulting in a deficit on revaluation of investment properties of R
415.6 million being recorded in the statement of comprehensive income.
The portfolio is segmented into three lease types, namely; fixed lease
properties, fixed and variable leased properties (F&V) and variable lease
properties.
Rentals under fixed lease agreements are determined by normal commercial
lease terms, with inflation linked annual escalations. F&V lease agreements
comprise approximately 50% initial fixed lease rental, with the remainder
being avariable rental equivalent to 90% - 98% of the hotel`s EBITDA
(earnings before interest, tax, depreciation and amortisation) after
deducting the fixed lease portion. The F&V lease category now includes the
previous C-Corp leases. Variable lease agreements consist of rentals based
on EBITDA from the property`s underlying operations.
The net asset value per linked unit as at 30 June 2011 was R 12.71
(excluding deferred taxation), a decrease of 17.2% from 2010 primarily as a
consequence of a general write down in valuations of the standing
portfolio. The weighted average lease expiry period is 10.9 years.
7. Development and Capital Projects
The Fund invested a total of R 131 million in refurbishments and capital
expenditure during the year under review.
Details of the significant refurbishment projects are detailed below:
- The refurbishment of the Protea Hotel Marine (Port Elizabeth) was
successfully completed during the year at a total cost of R31 million. The
market has responded positively to the refurbishment which should
meaningfully contribute to an improvement in the property`s competitive
advantage.
- The recently acquired Protea Edward (Durban) has been refurbished at a
cost of R12million and was re launched during the year to coincide with the
hotel`s centenary celebration. There has been an overwhelmingly positive
response from the trade.
- The conversion of under utilised areas to additional conference
facilities at the Holiday Inn Sandton - Rivonia Road at a total cost of
R8.0 million was also introduced to the market in June 2011 and has been
positively received.
- Construction of the new conference centre and 40 additional rooms at
Champagne Sports Resort (Drakensberg) at a cost of R28 million was also
successfully completed. As this property is under fixed lease, the capital
cost has been rentalised.
- Refurbishment of the Protea Hotel Victoria Junction (Cape Town) at an
anticipated cost of R42 million and the Inn on the Square (Greenmarket
Square Cape Town) at an expected cost of R34 million are both progressing
well and these hotels are expected to re-open during September 2011.
- The refurbishment of the Protea Hotel Hazyview is also close to
completion at a budgeted cost of R9.5 million.
On completion of these projects, all F&V lease properties will have been
refurbished. This will ensure that the quality of the Fund`s properties
will remain of the highest standard and will provide a solid platform to
benefit from improved trading once the market recovers.
8. Borrowings
The Fund`s interest bearing liabilities increased by R432million to R1.74
billion during the reporting period. The additional debt was utilised to
fund the refurbishments and a portion of the Arabella portfolio
acquisition. The average cost of borrowings for the group was 8.91%(2010:
10.16%) for the year ended 30 June 2011. The gearing ratio (total interest
bearing liabilities / investment property value) at year end was 44% (2010:
39%). For the 2011 financial year, 60% of the groups borrowings were
subject to fixed interest rates. The group`s facilities with financial
institutions as at 30June2011, was R1.9 billion with R1.7 billion being
utilised at year end.
Approximately R1.32 billion of the Fund`s current debt facility with ABSA
expires in February 2012. The majority of this facility was secured on
listing in 2006 at a rate of 3 month JIBAR + 130 bps. The Fund is currently
in discussions with ABSA and other financial institutions regarding the
renewal of this facility and is reviewing the proposals received. Given the
substantial increase in banks lending margins in the past few years this
facility is likely to be renewed at a higher margin. The R606,5 million
Nedbank debt facility expires in tranches of R176,3 million in July 2015
and R430,2 million in May 2016.
The Fund has entered into swaps amounting to R1.041 billion. Hospitality is
cognisant of the trends in interest rate markets and monitors these on an
ongoing basis with a view to increasing its swap exposure if necessary. In
compliance with International Financial Reporting Standards (IFRS) interest
swap agreements are valued on a mark to market basis. Accordingly, a fair
value adjustment of R10.5 million has been charged to profit & loss. 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 inFixed Rate Commencement Date Maturity Date
Rm 347 8,72% June 2010 June 2013
Rm 347 9,05% June 2010 June 2014
Rm 347 9,28% June 2010 June 2015
Rm 1041
9. Unitholders
During the year some 21.1% of the A linked units and 36.1% of the B linked
units were traded on the JSE Limited. The Fund has a BEE ownership
component of 15.8% of the units in issue.
10. Prospects
The hotel industry is in an extremely weak trading cycle exacerbated by
oversupply, which has resulted in a set-back in Hospitality`s earnings
growth. The continuation of these trading conditions together with the
anticipated higher refinancing costs through the renewal of its debt
facilities, as well as higher than inflationary increases in municipal
rates and electricity costs, will continue to impair earnings over the next
12 months.
Distributions in the short term will remain under pressure, but the Fund
is well positioned in the longer term, with its high quality portfolio of
assets and which have been further enhanced with the acquisition of the
Arabella Portfolio. The Westin in particular has a robust business model,
which should provide strong earnings support, while the AHS provides the
Fund with a future opportunity to realise profits from the sale of the land
that is categorised as "properties held for trading".
While distributable earnings are likely to remain under pressure for the
2012 financial year, management are focussed on driving operational
performance to enhance unitholder returns, restructuring the Fund`s debt
facilities to mitigate both concentration and expiry risk and reviewing the
Fund`s capital structure with a view to reducing the B linked unit
volatility.
11. Directorate
Mrs Linda de Beer was appointed as an independent non-executive director to
the board of Hospitality with effect from 17 August 2011. Mrs de Beer will
also fill the vacancy on the Fund`s audit committee from the effective
date.
12. Payments of Debenture Interest
Unitholders will receive debenture interest payment number 11 for the six
month period ended 30 June 2011, of 61.79cents per A linked unit and
20.45cents per B linked unit.
2011
Last day to trade cum interest Friday,2 September
Linked units will trade ex interest Monday,5 September
Record date Friday,9 September
Payment date Monday,12 September
Unitholders may not dematerialise or rematerialise their linked units
between Monday, 5 September and Friday, 9 September 2011, both days
inclusive.
By order of the Board
F M Berkeley G A Nelson
(Chairman) (Chief Executive
Officer)
17August 2011
Directors:
FM Berkeley(Chairman)*+, GA Nelson(CEO), Y Aminzadeh(Dutch)*,R Asmal,
KH Abdul Karrim*+, ZN Kubukeli*+, MB Madumise*+, WJ Midgley*,
AS Rogers (Deputy CEO), W CRoss*+ (*Non Executive, +Independent)
Registered Office: "3 on Glenhove", Cnr Tottenham Avenue and Glenhove Road,
Melrose Estate, 2196
Tel: +2711994 6320 Fax: +27119946321 Email: info@hpf.co.za
Web:www.hpf.co.za
BASIS OF PREPARATION AND ACCOUNTING POLICIES - CONDENSED IN PRESS VERSION
The financial statements are prepared in accordance with International
Financial Reporting Standards (IFRS), including the presentation and
disclosure requirements of IAS34 , the interpretations issued respectively
by the International Accounting Standards Board, the International
Financial Reporting Interpretations Committee (IFRIC) of the IASB and the
AC500 series issued by the South African Institute of Chartered Accountants
and the requirements of the Companies Act of South Africa, 2008. KPMG Inc,
the independent auditor, has reviewed the financial statements and
expressed an unqualified review opinion, which is available for inspection
at Hospitality`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
interms of IAS 17, Leases.
- Deferred taxation on the fair value adjustment of investment properties
has been calculated at 14% on both land and buildings.
The accounting policies are consistent with those applied in the most
recent audited financial statements, except for the early adoption of the
amendment to IAS12 Deferred Tax.
Change in Accounting Policy
The group has early adopted the amendment to IAS 12 (the 2010 amendment as
published by the IASB on 20 December 2010) It is only required for
companies to adopt this policy with years commencing on or after 1 January
2012. The effect of this early adoption is that deferred tax on investment
properties is no longer calculated at a blended rate, which comprise the
split between the land and the buildings. Deferred tax on buildings were
previously measured at 28%, whereas for land it was measured at 14%. The
effect of the amendment to IAS 12 on the measurement of deferred tax, is
that both land and buildings classified as investment property is now
recovered entirely through sale. Distributions per unit is not affected by
the amendment to IAS 12.
Disclosure required in terms of IFRS 3 (Business Combinations)
Acquisition of the Arabella portfolio
On 13 May 2011, the group obtained control of two 5-star hotels known as
"Westin Cape Town" and "Arabella Hotel & Spa", and the Paulaner Brauhaus
Restaurant in the V&A Waterfront. 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 a significant potential to enhance unitholder
returns. The properties were acquired as a going concern.
Since acquisition date, the group`s revenue increased by an estimated R
21.9 million and profits increased by an estimated R 19.3 million as a
direct result of the acquisition.
If the group acquired the Arabella hotels on 1 July 2011, the estimated
consolidated revenue would have increased by an estimated R68.8 million and
profits would have increased by an estimated R49.2 million.
The hotel was purchased for a total purchase consideration of R756.6
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 756 553
Identifiable assets acquired and liabilities assumed
Investment property at fair value 903 000
Property held for trading 16 940
Total net identifiable assets 919 940
Bargain on purchase consideration
Fair value of consideration transferred 756 553
Less: Value of identifiable assets 919 940
Add: Deferred taxation 21 950
Bargain on purchase consideration (141 437)
The transaction resulted in a significant gain on acquisition as a result
of limited purchasers being available in the market.
Transactions separate from the acquisition
The group incurred acquisition related costs of R17 million relating to
legal fees, restructuring costs and press announcements costs which was
expensed.
STATEMENTS OF COMPREHENSIVE INCOME
for the year ended 30 June 2011
Reviewed Audited
2011 2010
R `000 R `000
Revenue 277 358 265 550
Rental income - contractual 277 043 265 902
- straight-line accrual 315 (352)
Expenditure (21 051) (29 577)
Operating expenses (21 051) (29 577)
Operating profit 256 307 235 973
Transaction costs on business combinations (16 958) (2 268)
Net finance cost (112 857) (108 593)
Finance income 13 366 2 023
Finance costs (126 223) (110 616)
Profit before debenture interest, goodwill, fair
value adjustments and taxation 126 492 125 112
Recoupment of debenture interest 17 534 1 194
Debenture interest (160 669) (128 926)
Loss before fair value adjustments, goodwill and
taxation (16 643) (2 620)
Gain on bargain purchase 141 437 587
Fair value adjustments (393 649) (309 855)
Investment properties, before straight-lining
adjustment (415 651) (253 618)
Straight-line rental income accrual (315) 352
Total fair value of investment properties (415 966) (253 266)
Contingent consideration 32 842 (2 287)
Interest-rate swaps (10 525) (54 302)
Loss before taxation (268 855) (311 888)
Equity accounted loss from associate after tax (60) -
Taxation (2010 restated) 58 195 35 424
Total loss and comprehensive loss for the year (210 720) (276 464)
Reconciliation between earnings, headline earnings
and distributable earnings
Loss for the period (210 720) (276 464)
Adjustments : Debenture interest 160 669 127 732
(Loss)/earnings (linked units) (50 051) (148 732)
Adjustments :
Gain on bargain purchase (141 437) (587)
Equity accounted loss from associate after tax 60 -
Fair value - investment properties revaluation, net
of tax 357 456 218 194
Fair value - straight line rental income 315 (352)
Headline earnings (linked units) 166 343 68 523
Fair value - interest rate swaps 10 525 54 302
Transaction costs on business combinations 16 958 2 268
Contingent consideration (32 842) 2 287
Straight line rental income (315) 352
Distributable earnings 160 669 127 732
Number of units/shares
A-linked unit 88 761 391 63 112 101
B-linked unit 88 761 391 63 112 101
Weighted average number of units/shares
A-linked unit 80 462 949 62 474 525
B-linked unit 80 462 949 62 474 525
Distribution per linked unit (cents)
A-linked unit 122.11 116.30
- Interim 60.32 57.46
- Final 61.79 58.84
B-linked unit 58.90 87.98
- Interim 38.45 36.30
- Final 20.45 51.68
181.01 204.28
(Loss)/earnings per linked units (cents)
A-linked unit (31.10) (119.03)
B-linked unit (31.10) (119.03)
(62.20) (238.07)
Headline earnings per linked unit (cents)
A-linked unit 103.37 54.84
B-linked unit 103.37 54.84
206.73 109.68
(Loss)/earnings and diluted earnings per ordinary
share (cents) (130.94) (221.26)
STATEMENTS OF FINANCIAL POSITION
as at 30 June 2011
Reviewed Audited
2011 2010 *
R `000 R `000
ASSETS
Non-current assets 4 109 300 3 471 279
Investment properties 3 940 558 3 303 013
Straight-line rent income accrual 15 172 14 857
Investment properties and related accrual 3 955 730 3 317 870
Furniture and equipment 748 587
Goodwill 152 822 152 822
Current assets 57 903 37 284
Trade and other receivables 37 413 26 574
Properties held for trading 16 940 -
Cash and cash equivalents 3 550 10 710
Total assets 4 167 203 3 508 563
EQUITY AND LIABILITIES
Equity 537 155 664 208
Share capital and share premium 342 862 259 195
Retained earnings 123 718 (701)
Fair value reserve 70 575 405 714
Non-current liabilities 2 152 503 2 625 847
Debentures 1 668 714 1 186 507
Interest-bearing liabilities 411 380 1 308 371
Derivative liability 21 542 11 014
Contingent consideration - 32 842
Deferred taxation 50 867 87 113
Current liabilities 1 477 545 218 508
Trade and other payables 63 257 38 356
Bank overdraft 12 333 -
Interest-bearing liabilities 1 328 962
Vendors on property acquisition - 110 400
Debenture interest payable 72 993 69 752
Total equity and liabilities 4 167 203 3 508 563
* Restated due to a change in accounting policy
A. Net asset value per linked unit (Rand)
A-linked unit 12.43 14.66
B-linked unit 12.43 14.66
B. Net asset value per linked unit (excluding
deferred taxation) (Rand)
A-linked unit 12.71 15.35
B-linked unit 12.71 15.35
STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2011
Share Share Retained
capital premium earnings
R `000 R `000 R `000
Balance at 30 June 2009 12 246 951 980
Impact of change in accounting policy - - -
Restated balance at 30 June 2009 12 246 951 980
Loss/Total comprehensive loss for the year (276 464)
Transactions with owners, recorded directly
in equity 1 12 231 274 783
Issue of shares 1 12 411
Share issue expenses, net of tax (180)
Transfer from fair value reserve -
investment properties (net of deferred tax) *218 194
Transfer to fair value reserve -contingent
consideration *2 287
Transfer to fair value reserve - interest
rate swaps *54 302
Restated balance at 30 June 2010 13 259 182 (701)
Loss/Total comprehensive loss for the year - - (210 720)
Transactions with owners, recorded directly
in equity 5 83 662 335 139
Issue of shares 5 95 551
Share issue expenses, net of tax (11 889)
Transfer from fair value reserve -
investment properties (net of deferred tax) 357 456
Transfer to fair value reserve -contingent
consideration (32 842)
Transfer to fair value reserve - interest
rate swaps 10 525
Balance at 30 June 2011 18 342 844 123 718
Fair value Total
reserve
R `000 R `000
Balance at 30 June 2009 561 322 809 265
Impact of change in accounting policy 119 175 119 175
Restated balance at 30 June 2009 680 497 928 440
Loss/Total comprehensive loss for the year (276 464)
Transactions with owners, recorded directly in equity (274 783) 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) (218 194) -
Transfer to fair value reserve -contingent
consideration (2 287) -
Transfer to fair value reserve - interest rate swaps (54 302) -
-
Restated balance at 30 June 2010 405 714 664 208
Loss/Total comprehensive loss for the year - (210 720)
Transactions with owners, recorded directly in equity (335 139) 83 667
Issue of shares 95 556
Share issue expenses, net of tax (11 889)
Transfer from fair value reserve - investment
properties (net of deferred tax) (357 456) -
Transfer to fair value reserve -contingent
consideration 32 842 -
Transfer to fair value reserve - interest rate swaps (10 525) -
Balance at 30 June 2011 70 575 537 155
STATEMENT OF CASH FLOWS
for the year ended 30 June 2011
Reviewed Audited
2011 2010
R`000 R`000
Cash flows from operating activities
Cash generated from operations 253 334 196 678
Finance income received 13 366 2 023
Finance costs paid (126 223) (110 616)
Distribution to unitholders (162 533) (129 827)
Net cash outflow from operating activities (22 056) (41 742)
Cash flows from investing activities
Acquisition and development of investment properties (1 017 464) (56 249)
Acquisition of furniture and equipment (397) (750)
Acquisition of Manco - (122 268)
Investment in associate - Vexicure (60)
Restructure of interest rate swaps - (113 743)
Net cash outflow from investing activities (1 017 921) (293 010)
Cash flows from financing activities
Proceeds from the issue of linked units 600 402 41 007
Share issue expenses paid (11 889) (180)
Interest-bearing liabilities raised 431 971 294 807
Net cash inflow from financing activities 1 020 484 335 634
Net (decrease)/increase in cash and cash equivalents (19 493) 882
Cash and cash equivalents at beginning of year 10 710 9 828
Cash and cash equivalents at end of year (8 783) 10 710
CONDENSED SEGMENTAL INFORMATION
for the year ended 30 June 2011
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.
Fixed lease F & V lease Variable lease
agreements agreements agreements
R 000`s
Statement of
Comprehensive Income -
30 Jun 2011
Segment revenue 122 615 139 348 15 080
Expenditure - - -
Segment results 122 615 139 348 15 080
Statement of
Comprehensive Income -
30 Jun 2010
Segment revenue 137 844 119 315 8 743
Expenditure (6 413)
Segment results 131 431 119 315 8 743
Statement of Financial
Position - 30 Jun 2011
Non-current assets
Investment properties 1 109 000 2 593 930 252 800
Current assets
Trade receivables 6 695 8 801 (437)
Segment assets 1 115 695 2 602 731 252 363
Statement of Financial
Position - 30 Jun 2010
Non-current assets
Investment properties 1 320 826 1 691 744 305 300
Current assets
Trade and other receivables 1 618 17 988 213
Segment assets 1 322 444 1 709 732 305 513
Total of all
operating
Head Office segments
R 000`s
Statement of Comprehensive Income - 30 Jun 2011
Segment revenue 277 043
Expenditure (21 051) (21 051)
Segment results (21 051) 255 992
Statement of Comprehensive Income - 30 Jun 2010
Segment revenue - 265 902
Expenditure (23 164) (29 577)
Segment results (23 164) 236 325
Statement of Financial
Position - 30 Jun 2011
Non-current assets
Investment properties - 3 955 730
Current assets
Trade receivables 22 354 37 413
Segment assets 22 354 3 993 143
Statement of Financial
Position - 30 Jun 2010
Non-current assets
Investment properties - 3 317 870
Current assets
Trade and other receivables 6 755 26 574
Segment assets 6 755 3 344 444
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 17/08/2011 16:59:03 Supplied by www.sharenet.co.za
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implicitly, represent, warrant or in any way guarantee the truth, accuracy or
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employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
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