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FPT - Fountainhead Property Trust Management Limited - Summary of audited final

Release Date: 03/11/2011 07:06
Code(s): FPT
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FPT - Fountainhead Property Trust Management Limited - Summary of audited final results for the year ended 30 September 2011 Fountainhead Property Trust Management Limited (Reg No. 1983/003324/06) Share code: FPT ISIN: ZAE000097416 SUMMARY OF AUDITED FINAL RESULTS for the year ended 30 September 2011 * Final distribution of 27.56 cents per unit * Gearing of 12 percent * Market capitalisation of R7.8 billion * NAV of R6.69 per unit The directors of Fountainhead Property Trust Management Limited, the manager of Fountainhead Property Trust, submit their report on the audited results of Fountainhead Property Trust for the year ended 30 September 2011. These financial statements have been summarised from the audited financial statements on which KPMG Inc. have issued an unmodified audit opinion and which are available for inspection at the registered office. STATEMENT OF FINANCIAL POSITION 2011 2010 R`000 R`000
ASSETS Property assets 8 815 317 7 940 044 Investment properties 8 529 779 7 677 024 Straight-line lease accrual 285 538 263 020 Current assets 454 562 397 501 Trade and other receivables 70 453 53 874 Cash and cash equivalents 384 109 343 627 Total assets 9 269 879 8 337 545 UNITHOLDERS` FUNDS AND LIABILITIES Unitholders` funds 7 776 713 6 719 106 Capital of the fund 2 874 030 1 933 354 Capital reserve 574 903 513 837 Fair value reserve 4 042 182 4 008 835 Retained earnings 285 598 263 080 Non-current liabilities Interest-bearing liability 355 940 1 225 000 Current liabilities 1 137 226 393 439 Trade and other payables 123 783 126 201 Interest-bearing liability 693 000 - Unitholders for distribution 320 443 267 238 Total unitholders` funds and liabilities 9 269 879 8 337 545 STATEMENT OF COMPREHENSIVE INCOME 2011 2010 R`000 R`000
Income 902 263 845 963 Contractual rental income 879 745 831 482 Straight-line lease adjustment 22 518 14 481 Expenses (228 904) (219 979) Administrative expenses (44 982) (42 265) Property operating expenses (183 922) (177 714) Operating profit 673 359 625 984 Net finance costs (54 395) (72 843) Interest received 27 703 25 259 Interest paid (82 098) (98 102) Profit on disposal of investment properties 13 869 1 932 Fair value adjustments to investment properties 80 544 (5 725) Profit for the year 713 377 549 348 Total comprehensive income for the year 713 377 549 348 Basic/diluted earnings per unit (cents) 66.36 55.15 Headline earnings and distribution income reconciliation Profit for the year 713 377 549 348 Adjust for: Profit on disposal of investment properties (13 869) (1 932) Fair value adjustments to investment properties (80 544) 5 725 Headline earnings 618 964 553 141 Less: straight-line lease adjustment (22 518) (14 481) Distribution income 596 446 538 660 Headline earnings per unit (cents) 57.58 55.53 Distribution per unit (cents) 55.27 54.08 Interim distribution per unit (cents) 27.71 27.25 Final distribution per unit (cents) 27.56 26.83 Weighted average units in issue 1 075 038 515 996 043 081 Units in issue at year-end 1 162 709 748 996 043 081 COMMENTARY 1. BASIS OF PREPARATION AND ACCOUNTING POLICIES The annual results have been prepared in accordance with International Financial Reporting Standards (IFRS), the AC 500 series issued by the Accounting Practices Board, the requirements of the Collective Investment Schemes Control Act and the JSE Limited ("JSE") Listings Requirements. The accounting policies are consistent in all material respects with those applied in prior years. The annual results have been prepared under the supervision of Mr Anton Raubenheimer CA (SA). 2. INCOME DISTRIBUTION PER UNIT Fountainhead Property Trust`s net distribution income for the six months ended September 2011 amounts to 27.56 cents per unit, 2.7 percent greater than the comparable period last year. The net distribution for the financial year ended September 2011 is 55.27 cent per unit, which is 2.2 percent greater than the comparable period last year. 3. BORROWINGS Interest-bearing liabilities comprise: Term Loan A - a R750 000 000 interest only facility at a rate of prime less 2.3% payable by 24 June 2012. A total of R243 000 000 of this facility has been utilised. Term Loan B - a R250 000 000 interest only facility fixed at a rate of 11.07% until 15 February 2013. This facility is payable by 24 June 2012, with the fixed interest rate transferable to any subsequent facility. Term Loan C - a R200 000 000 interest only facility fixed at a rate of 10.72% until 22 July 2012. This facility is payable by 22 July 2012. Term Loan D - the Blue Route Mall Development Loan Facility - a R935 000 000 interest only facility floating at a rate of 1 month JIBAR + 2.42% until 31 May 2015. This facility is payable by 31 May 2015. To date R355 940 494 has been drawn from the facility. R350 000 000 of the facility has been fixed at 8.42% until 31 May 2015. Interest payments will be capitalised on this facility until the development is completed. Term Loan E - a R600 000 000 interest only facility floating at a rate of 1 month JIBAR + 2.25% until 28 February 2016. This facility has not been accessed as yet. Based on preliminary discussions with the bank, the risk of new facilities not being granted is minimal due to the low gearing of the Trust. 4. RIGHTS OFFER During the year the Trust raised R1 billion by way of a rights issue. The rights issue was oversubscribed by 34 percent. 5. MAJOR CAPITAL PROJECT Blue Route Mall The redevelopment of the mall is progressing well with approximately 68 percent of the work complete. The letting of the mall is in progress, with signed leases representing 96 percent of the new mall`s 56 000 m2 having been concluded. The anticipated opening date of the new mall is April 2012. 6. ACQUISITIONS AND DISPOSALS The Trust has purchased the following properties during the year: Initial Transfer
Sector Building name Location Price yield date Office 300 Middel Nieuw Muckleneuk, Street PTA 219 621 000 8.65% 7 June 2011 Office CK3 Constantia Kloof, JHB 204 373 000 9.40% 30 June 2011 Office Yellowwood Bryanston, JHB 32 168 000 8.50% 27 June 2011 The Trust has successfully negotiated the purchase of the remaining 25 percent undivided share in Centurion Mall with an effective date of 1 September 2011. The purchase price is approximately R762 million at an expected initial yield of 7.1 percent. Transfer is expected to take place by December 2011. In addition the Trust has a signed purchase agreement to acquire Access Park for a price of approximately R400 million at a yield of 9 percent. The acquisition is subject to various conditions precedent. The Trust has sold the following properties during the year: Net selling Sector Building name Location Transfer date price Retail Northmead Mall Northmead, Benoni 23 June 2011 50 688 000 Office Human Rights House Parktown, JHB 11 October 2011 38 500 000 Office 22 Wellington Road Parktown, JHB 2 February 2011 19 500 000 Industrial Zero Park Strijdom Park, JHB 14 April 2011 3 700 000 Profit on
Sector Building name Location Valuation sale Retail Northmead Mall Northmead, Benoni 50 264 000 424 000 Office Human Rights House Parktown, JHB 28 661 000 9 839 000 Office 22 Wellington Road Parktown, JHB 16 512 000 2 988 000 Industrial Zero Park Strijdom Park, JHB 3 082 000 618 000 Subsequent to year-end, Medsave House has been sold for a net price of R2.4 million. Transfer was registered on 3 October 2011. 7. SEGMENTAL INFORMATION Sep 2011 Revenue Net income % of total Rm Rm
Retail 621 482 81 Office blocks 143 116 20 Industrial 85 68 11 Specialised 31 31 5 Corporate - (101) (17) Total 880 596 100 Sep 2010 Revenue Net income % of
Rm Rm total Retail 597 465 86 Office blocks 124 99 18 Industrial 81 63 12 Specialised 29 29 6 Corporate - (117) (22) Total 831 539 100 STATEMENT OF CASH FLOWS 2011 2010 R`000 R`000 Cash effects from operating activities Profit for the year 713 377 549 348 Adjustments for: Straight-line lease adjustment (22 518) (14 481) Interest received (27 703) (25 259) Interest paid 82 098 98 102 Profit on disposal of investment property (13 869) (1 932) Fair value adjustments to investment properties (80 544) 5 725 Operating profit before changes in working capital 650 841 611 503 Trade and other receivables increased (16 579) (7 332) Trade and other payables (decreased)/ increased (2 418) 10 074 Cash generated from operations 631 844 614 245 Interest received 27 703 25 259 Interest paid (82 098) (98 102) Income distributions (589 424) (533 381) Cash (outflows)/inflows from operating activities (11 975) 8 021 Cash effects from investing activities Additions to investment properties (870 730) (326 266) Proceeds from disposal of investment properties 112 388 18 000 Cash outflows from investing activities (758 342) (308 266) Cash effects from financing activities Long-term loan raised 355 940 310 000 Long-term loan repaid (532 000) - Issue of units 1 000 000 - Rights offer expenses (13 141) - Cash inflows from financing activities 810 799 310 000 Net increase in cash and cash equivalents 40 482 9 755 Cash and cash equivalents at beginning of the year 343 627 333 872 Cash and cash equivalents at end of the year 384 109 343 627 STATEMENT OF CHANGES IN UNITHOLDERS` FUNDS Capital of Capital Fair value (R`000) the fund reserve reserve Balance at 1 October 2009 1 933 354 501 906 4 024 559 Total comprehensive income for the year Profit and total comprehensive income for the year - - - Transactions with unitholders, recorded directly in equity Profit and fair value reserve realised on sale of property transferred to capital reserve 11 931 (9 999) Fair value adjustment on investment properties transferred to fair value reserve (5 725) Income distributions Total transactions with unitholders - - (15 724) Balance as at 30 September 2010 1 933 354 513 837 4 008 835 Total comprehensive income for the year Profit and total comprehensive income for the year - - - Transactions with unitholders, recorded directly in equity Profit and fair value reserve realised on sale of properties transferred to capital reserve - 61 066 (47 197) Fair value adjustment on investment properties transferred to fair value reserve 80 544 Issue of units 953 817 - - Rights offer expenses (13 141) - - Income distributions Total transactions with unitholders 940 676 61 066 33 347 Balance as at 30 September 2011 2 874 030 574 903 4 042 182 Total Retained unitholders` (R`000) earnings funds Balance at 1 October 2009 248 599 6 708 418 Total comprehensive income for the year Profit and total comprehensive income for the year 549 348 549 348 Transactions with unitholders, recorded directly in equity Profit and fair value reserve realised on sale of property transferred to capital reserve (1 932) - Fair value adjustment on investment properties transferred to fair value reserve 5 725 - Income distributions (538 660) (538 660) Total transactions with unitholders (534 867) (538 660) Balance as at 30 September 2010 263 080 6 719 106 Total comprehensive income for the year Profit and total comprehensive income for the year 713 377 713 377 Transactions with unitholders, recorded directly in equity Profit and fair value reserve realised on sale of properties transferred to capital reserve (13 869) - Fair value adjustment on investment properties transferred to fair value reserve (80 544) - Issue of units 46 183 1 000 000 Rights offer expenses - (13 141) Income distributions (642 629) (642 629) Total transactions with unitholders (690 859) 344 230 Balance as at 30 September 2011 285 598 7 776 713 8. VACANCY LEVELS Vacancy levels in terms of rentable area at 30 September were as follows: Sector % Sep 2011 Sep 2010 Retail 7 5 Office blocks 10 12 Industrial 7 10 Specialised - - Total 7 7 By value, the vacancies equated to 5 percent of potential rental income, slightly higher than the 4.5 percent at half-year. Approximately 12 percent of the current vacant space has been let for future occupation. In the retail sector 85 percent of the vacancies were contained in The Brightwater Commons, The Boulders Shopping Centre and at the offices located at Centurion Mall. The vacancy in this sector has increased since half-year mainly due to PBMR vacating office space at Centurion Mall. The office sector vacancy is primarily situated in Grayston Ridge, AMR Office Park and Wierda Mews. Letting conditions in this sector remain challenging. The Industrial sector vacancy is primarily located at Supreme Industrial Park and the Jet Park mini-units. 9. LEASE EXPIRY PROFILE The lease expiry profile by rentable area as at 30 September 2011 is as follows (%): Building Vacant 2012 2013 2014 Retail 7 19 14 17 Offices 10 13 7 8 Industrial 7 44 29 15 Specialised 0 0 0 0 Total 7 24 16 14 Building 2015 2016 >2016 Retail 18 11 14 Offices 9 5 48 Industrial 3 2 0 Specialised 0 0 100 Total 12 7 20 10. PORTFOLIO VALUATIONS The composition of Fountainhead Property Trust`s portfolio, as valued by the independent valuer, Rode and Associates CC, as at 30 September 2011, is as follows: Value Forward EY % of portfolio Sector (Rm) Cents/unit (%) 2011 2010 Retail 6 348 546 8.3 72 74 Office blocks 1 589 137 9.3 18 15 Industrial 571 49 11.3 7 7 Specialised 307 26 10.8 3 4 Total property 8 815 758 8.8 100 100 Interest-bearing liabilities (1 049) (90) Net current assets 10 1 7 776 669
11. DIRECTORS During the year Sean Segar resigned effective 1 August 2011. David Savage joined the board effective 2 August 2011. 12. PROSPECTS Notwithstanding the difficult trading conditions and the impact of the Blue Route Mall redevelopment it is anticipated that there will be a small increase in distribution during the next financial year. This forecast has not been reviewed or reported on by Fountainhead Property Trust`s auditor. 13. INCOME DISTRIBUTION ANNOUNCEMENT Notice is hereby given of distribution No. 57 of 27.56 cents per unit for the six months ended 30 September 2011. The last date to trade cum distribution will be Friday, 18 November 2011. The units of Fountainhead Property Trust will commence trading ex-distribution on Monday, 21 November 2011 and the record date will be Friday, 25 November 2011. The distribution will be paid on Monday, 28 November 2011. Unit certificates may not be dematerialised or rematerialised between Monday, 21 November 2011 and Friday, 25 November 2011, both dates inclusive. BY ORDER OF THE BOARD Fountainhead Property Trust Management Limited Johannesburg 2 November 2011 Directors: WM Kirchmann (Chairman), AE Raubenheimer (Managing and financial), VA Christian, HY Laher, DS Ogbu, JD Rainier, DS Savage, S Shaw-Taylor Transfer secretaries: Computershare Investor Services Proprietary Limited 70 Marshall Street Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) Secretary and registered office: Broll Property Group Proprietary Limited Broll House, 27 Fricker Road, Illovo Johannesburg, 2196 (PO Box 1455, Saxonwold, 2132) Short name: FPT Share code: FPT ISIN: ZAE000097416 Sponsor: The Standard Bank of South Africa Limited E-mail: fountainhead@standardbank.co.za Website: www.fountainheadproperty.co.za Date: 03/11/2011 07:06:48 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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