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PPR - Putprop Limited - Abridged audited condensed results for the year ended 30

Release Date: 23/09/2011 15:24
Code(s): PPR
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PPR - Putprop Limited - Abridged audited condensed results for the year ended 30 June 2011, notice of annual general meeting and final dividend declaration PUTPROP LIMITED Incorporated in the Republic of South Africa (Registration number 1988/001085/06) Share code: PPR ISIN: ZAE000072310 ("Putprop" or "the company") Abridged audited condensed results for the year ended 30 June 2011, notice of annual general meeting and final dividend declaration The Annual Financial Statements for Putprop Limited have been audited in accordance with the requirements of the Companies Act of South Africa, 2008 (Section 29(e)(1)) and are published on 23 September 2011. These statements have been prepared by JE Smith, BSc, BAcc, CIEA, the financial executive of the company. Condensed audited statement of comprehensive income for the financial year ended 30 June 2011 % Audited Audited Change Year ended Year ended 30 June 30 June 2011 2010
R`000 R`000 Property revenue 7.4 36 969 34 426 Straight-line rental income accrual (1 960) 1 036 Gross property revenue (1.3) 35 009 35 462 Property expenses (3 803) (2 605) Net profit from property operations (5.0) 31 206 32 857 Administration expenses (3 689) (2 992) Investment and other income 1 457 415 Operating profit before capital items (4.3) 28 974 30 280 Capital items Fair value adjustments 28 035 19 504 Net profit before taxation 14.5 57 009 49 784 Taxation (12 859) (11 814) Profit attributable to ordinary 44 150 37 970 shareholders 16.3 Other comprehensive income - - Total comprehensive income 44 150 37 970 attributable to ordinary shareholders Earnings and diluted earnings per 153.3 131.9 share (cents) 16.2 Condensed audited statement of financial position as at 30 June 2011 Audited Audited as at as at 30 June 2011 30 June 2010
R`000 R`000 ASSETS Non-current assets Investment properties 237 000 220 182 Other non-current assets Furniture, fittings and computer equipment 119 43 Investments in subsidiaries and associates 3 769 69 Straight-line rental income asset 3 685 8 902 Other investments 7 098 10 097 251 671 239 293 Current assets Straight-line rental income asset 5 977 2 720 Trade and other receivables 4 824 518 Taxation receivable - 598 Cash and cash equivalents 28 847 8 133 39 648 11 969
Total assets 291 319 251 262 EQUITY AND LIABILITIES Capital and reserves Share capital 4 146 4 146 Accumulated profit 266 063 231 990 270 209 236 136 Non-current liabilities Deferred taxation 15 385 12 819 15 385 12 819 Current liabilities Trade and other payables 5 170 2 238 Taxation payable 555 - Amount due to subsidiary and associates - 69 5 725 2 307 Total equity and liabilities 291 319 251 262
Condensed audited statement of changes in equity for the financial year ended 30 June 2011 Share Accumulated Capital Profit Total R`000 R`000 R`000 Balance at 1 July 2009 4 146 200 354 204 500 Profit attributable to equity - 37 970 37 970 holders Dividends paid - (6 334) (6 334) Balance at 30 June 2010 4 146 231 990 236 136 Profit attributable to equity - 44 150 44 150 holders Dividends paid - (10 077) (10 077) Balance at 30 June 2011 4 146 266 063 270 209 Condensed audited statement of cash flows for the financial year ended 30 June 2011 Audited Audited Year ended Year ended
30 June 2011 30 June 2010 R`000 R`000 Cash flow generated from operating 10 271 15 134 activities Net cash generated from operations 28 032 29 127 Investment and other income 1 457 415 Taxation paid (9 141) (8 074) Dividends paid (10 077) (6 334) Cash flow generated from (utilised in) 10 443 (15 469) investing activities Improvement to investment properties (483) (1 494) Acquisition of furniture fittings and (104) (6) computer equipment Acquisition and development of investment - (13 577) properties Proceeds on sale of investment properties 11 800 - Additions to other investments - (392) Acquisition of associates (770) - Cash flow utilised in financing activities - - Net increase/(decrease) in cash and cash 20 714 (335) equivalents Cash and cash equivalents at beginning of 8 133 8 468 year Cash and cash equivalents at end of year 28 847 8 133 Basis of preparation The financial statements have been prepared on a going concern and on a historical cost basis except for investments and investment properties which are measured at fair value. The abridged audited condensed results have been prepared in accordance with the Framework concepts and the measurement and recognition requirements of the International Financial Reporting Standards, containing information required by the IAS 34 Interim Financial Reporting and the AC500-standards as issued by the Accounting Practices Board, and in the manner required by the Companies Act , 2008 (Act 71 of 2008), as amended, and the Listings Requirements of JSE Limited. These condensed financial statements must be read in conjunction with the most recently issued annual financial statements for the year ended 30 June 2011. The accounting policies applied in the preparation of these abridged audited condensed financial statements, which are based on reasonable judgements and estimates, are consistent with those applied in the annual financial statements for the year ended 30 June 2010. The company has implemented the amendments to IAS 17, Leases and IFRS 8, Operating Segments in the current year. No material change in disclosure was effected by either standard. The same accounting policies and methods of computation are followed in these abridged audited condensed financial statements as compared with the annual financial statements issued for the year ended 30 June 2011. Overview Putprop is a property company which has investments in industrial, retail and commercial properties and derives its revenue primarily from rental income. Financial results The Company did not issue any additional shares during the year, the number of shares in issue remained constant at 28 792 961. The company`s rental, exclusive of straight-line rental accruals, has increased by 7.4% from R34.4 million for the year ended 30 June 2010 ("the comparable period") to R37 million in the current financial year. Gross property revenue for the year ended 30 June 2011 decreased by 1.3% to R 35.0 million compared to R35.4 million in the comparable period, due to the reversal of straight-line accruals. Property costs to income ratio increased to 10.3% from 7.6% in the comparable period, due to higher expenditure on property maintenance. Our current level of maintenance and refurbishment is expected to continue for the foreseeable future. Administration expenses increased by 23.3% in the current financial year from 7.4% in the comparable period due to increases in staffing and once off costs. Going forward administration costs are expected to increase at levels of between 8% and 11%. Net asset value per share (cents) 938.4 820.1 Reconciliation of headline earnings % Audited Audited Change Year ended Year ended 30 June 30 June
2011 2010 R`000 R`000 Profit attributable to equity holders 44 150 37 970 Adjusted for: - Fair value and impairment (28 035) (19 504) adjustments - Tax effects taxation of fair value 3 925 adjustments Loss on disposal of investment (1 100) 2 730 properties Gain on disposal of investment 114 - property - - Tax effect of gain (14) - Headline earnings (10.2) 19 040 21 196 Earnings per share (cents) 16.2 153.3 131.9 The calculation is based on earnings of R44 150 000 (2010: R37 970 000) and on the weighted average number of shares in issue for the year of 28 792 961 (2010: 28 792 961). Headline earnings per share (cents) (10.3) 66.1 73.7 The calculation is based on headline earnings of R19 040 000 (2010: R 21 196 000) and on the weighted average number of shares in issue for the year of 28 792 961 (2010: 28 792 961). Property portfolio At 30 June 2011 the groups property portfolio comprised 15 properties with a gross lettable area of 76 948. The sectoral spread by gross rentals comprised 87% industrial, 9% retail and 4% commercial. Vacancies decreased during the year to 3.4% of gross lettable area (2010:5.2%). The company continues to transact primarily with `A` grade tenants. The lease expiry profile reflects that in terms of gross lettable area, 87% of the portfolio expires during the next 12 months and 13% from July 2012 onwards. The primary source of the potential large vacancies in the next 12 months is the lease agreement with our major tenant Putco Limited which contributes 82% of the company`s revenue stream. Management has already started negotiations to protect this major income of the company. We anticipate the lease will be renewed. Segmental reporting An operating segment is a component of an entity that engages in business activities whose operating results are regularly reviewed by the group`s decision makers. These results are utilised to assess the segments performance and facilitate decisions regarding resource allocation. The core business of the group is property rental which is reported into segments based on the nature and business functions of the tenants for JSE Limited reporting purposes. The following segments are identified: industrial, retail, commercial and corporate. The group operates in the greater Gauteng area. The table below summarises by segment the position for the year ended 30 June 2011. Retail Commercial Industrial Corporate Total
R`000 R`000 R`000 R`000 R`000 30 June 2011 Segment Revenue Contractual rental 3 456 1 377 32 136 - 36 969 income Straight-line 34 (211) (1 783) - (1 960) rental adjustment Total revenue 3 490 1 166 30 353 - 35 009 Segmental result Operating 2 898 1 298 27 010 (3 689) 27 517 profit/(loss) Interest Received - - - 1 457 1 457 Fair value (1 200) (3 000) 32 235 - 28 035 adjustments to investment properties Net profit/(loss) 1 698 (1 702) 59 245 (2 232) 57 009 before tax Other Information Property assets 32 600 9 500 194 900 - 237 000 Trade and other 198 - 2 414 2 212 4 824 receivables Cash and cash - - - 28 847 28 847 equivalents Segment assets 32 798 9 500 197 314 31 059 270 671 Trade and other 124 1 652 1 503 1 891 5 170 payables Segment 124 1652 1 503 1 891 5 170 liabilities 30 June 2010 Segment Revenue Contractual rental 3 501 1 523 29 402 - 34 426 income Straight-line 566 17 453 - 1 036 rental adjustment Total revenue 4 067 1 540 29 855 - 35 462 Segmental result Operating 3 882 1 167 27 808 (2 992) 29 865 profit/(loss) Interest received - - - 415 415 Fair value 3 065 483 15 956 - 19 504 adjustments to investment properties Net profit/(loss) 6 947 1 650 43 764 (2 577) 49 784 before tax Other Information Property assets 33 800 24 200 162 182 - 220 182 Trade and other - 59 362 97 518 receivables Cash and cash - - - 8 133 8133 equivalents Segment assets 33 800 24 259 162 544 8 230 228 833 Trade and other 18 261 209 1 750 2 238 payables Segment 18 261 209 1 750 2 238 liabilities Borrowings The company has no loans at present. In terms of the company`s Articles of Association borrowings are limited to 100% of the company`s equity. Valuation of property portfolio An independent external valuation of all the portfolio properties at 30 June 2011 was carried out. The fair value adjustment amounted to R28.0 million (2010: R19.5 million) and is reflected as an increase in the Statement of Comprehensive Income. Capital commitments The company has approved the purchase of the Detpak property situated in Kya Sands for an amount of R13.8 million. (2010: nil). Prospects Property fundamentals continue to remain fairly strong in spite of the constraints of a general slowdown of the economy and the volatility of local and international markets. Our strategy is to enhance our property portfolio by investing in suitable industrial, retail and commercial properties thus enhancing our income streams. To this end the company will continue to pursue suitable tenanted properties in the year ahead. The group expects to maintain its current growth in the year ahead. Notice of general meeting Notice is hereby given that the annual general meeting of shareholders of Putprop shares, as at the record date of Friday, 21 October 2011, will be held at 11:00 on Wednesday, 9 November 2011 at the registered office of the company, 91 Protea Road, Chislehurston, Sandton. The board of directors of the company determined that, in terms of section 62(3)(a), as read with section 59 of the Companies Act, 2008 (Act 71 of 2008), the record date for the purposes of determining which shareholders of the company are entitled to participate in and vote at the annual general meeting is Wednesday, 9 November 2011. Accordingly, the last day to trade to be entitled to vote will be 21 October 2011. DIRECTORATE During the year under review Mr Albino Carleo resigned as an executive director and as Chief Executive Officer, with effect from 31 March 2011, following his decision to retire. Mr Bruno Carleo was appointed as the new Chief Executive Officer, with effect from 1 April 2011. Dividend declaration The directors have resolved to declare a final dividend of 15 cents per share for the year ended 30 June 2011 to be paid to all ordinary shareholders recorded in the share register on the record date. The dividend is declared out of current year profits before tax of R57.0 million (2010:R49.8 million). The total dividend paid for the year is 30 cents per share (2010: 20 cents per share). In compliance with the requirements of Strate and Schedule 24 of the JSE Listings Requirements, the following dates are applicable: Last day to trade cum the dividend Friday, 14 October 2011 Date trading commences ex the dividend Monday, 17 October 2011 Record date Friday, 21 October 2011 Date of payment Monday, 24 October 2011 Share certificates may not be dematerialised or rematerialised between Monday, 17 October 2011 and Friday, 21 October 2011, both dates inclusive. Subsequent Events The company has purchased the Detpak property for R13.8 million. There are no other significant subsequent events that have a material impact on the financial statements at 30 June 2011. Audit report These audited abridged condensed results for the year ended 30 June 2011 have been audited by the company`s auditors, Mazars whose unmodified audited report is available for inspection at the company`s registered office as detailed below. Directorate A B Adrian Independent non-executive Chairman A L Carleo-Novello Executive Director A Carleo* B C Carleo Chief Executive Officer J E Smith Financial Director P Senatore Independent non-executive Director P Nucci Independent non-executive Director *Retired 31 March 2011 Company Secretary J E Smith Registered Office and Postal Address 91 Protea Road Chislehurston Sandton, 2196 Share Transfer Secretaries Computershare Investor Services (Proprietary) Limited 70 Marshall Street Marshalltown (PO Box 61051, Marshalltown, 2107) Sponsor Merchantec Capital 2nd Floor, North Block, Hyde Park Office Tower Corner 6th Road & Jan Smuts Avenue Hyde Park, 2196 (PO Box 41480, Craighall, 2124) Auditors Mazars 5 St. David`s Place Parktown 2193 23 September 2011 Date: 23/09/2011 15:24:13 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, 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, information disseminated through SENS.

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