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PPR - PUTPROP Limited - Unaudited interim results for the six months ended
31 December 2011
PUTPROP LIMITED
Incorporated in the Republic of South Africa
(Registration number 1988/001085/06)
Share code: PPR ISIN: ZAE000072310
("Putprop" or "the company" or "the group")
Unaudited interim results for the six months ended 31 December 2011
Financial highlights
Property revenue up 8.6% to R19.3 million
Net profit before tax increases to R24.5 million
Headline earnings per share 37.0 cents
Net asset value per share up 16.2% to 986.1 cents
Interim dividend of 15.00 cents per share declared
Unaudited consolidated statement of comprehensive income for the six months
ended 31 December 2011
Unaudited Unaudited Audited
31 December 31 % 30 June
2011 December 2011
2010
R`000 R`000 Chang R`000
e
Property revenue 19 330 17 792 8,6 36 969
Straight-line rental income (1 097) (171) (1 960)
accrual 542,0
Associate income 272 - -
Gross property revenue 18 505 17 621 5,0 35 009
Property expenses (1 490) (752) 98,1 (3 803)
Net profit from property 17 015 16 869 0,9 31 206
operations
Administration expenses (2 031) (1 610) 26,1 (3 689)
Investment and other income 933 594 57,1 1 457
Operating profit before 15 917 15 853 0,4 28 974
capital items
Capital items
Fair value adjustments 8 600 3 273 162,8 28 035
Net profit before taxation 24 517 19 126 28,2 57 009
Taxation (6 481) (5 182) 25,1 (12 859)
Net profit attributable to 18 036 13 944 29,3 44 150
equity holders
Other comprehensive income - - - -
Total comprehensive income 18 036 13 944 29,3 44 150
Total comprehensive income
and net profit attributable
to:
Owners of the parent 18 036 13 944 29,3 44 150
Non controlling interest - - - -
18 036 13 944 29,3 44 150
Earnings and diluted earnings 62,6 48,4 29,3 153,3
per share (cents)
Unaudited consolidated statement of financial position as at 31 December 2011
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
R`000 R`000 R`000
ASSETS
Non-current assets 259 436 240 972 251 671
Investment properties 245 600 221 239 237 000
Other non-current assets
Furniture, fittings and computer 129 98 119
equipment
Investments in subsidiaries and 4 041 - 3 769
associates
Straight-line rental income asset 2 568 8 768 3 685
Other investments 7 098 10 867 7 098
Current assets 47 063 21 155 39 648
Straight-line rental income asset 5 977 2 698 5 977
Amount owing by fellow subsidiary - 15 149 -
Trade and other receivables 5 014 543 4 824
Taxation receivable - 669 -
Cash and cash equivalents 36 072 2 096 28 847
Total assets 306 499 262 127 291 319
EQUITY AND LIABILITIES
Capital and reserves 283 926 244 322 270 209
Non-current liabilities 16 276 13 112 15 385
Deferred tax 16 276 13 112 15 385
Current liabilities 6 297 4 693 5 725
Trade and other payables 4 541 4 693 5 170
Taxation payable 1 756 - 555
Total equity and liabilities 306 499 262 127 291 319
Unaudited consolidated statement of cash flows for the six months ended 31
December 2011
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
R`000 R`000 R`000
CASH FLOW GENERATED FROM OPERATING 7 258 7 731 10 271
ACTIVITIES
Net cash generated from operations 15 275 17 855 28 032
Investment and other income 933 594 1 457
Taxation paid (2 469) (4 960) (9 141)
Dividends paid (6 481) (5 758) (10 077)
CASH FLOW UTILISED IN INVESTING (33) 1 381 10 443
ACTIVITIES
Improvements to investment - (234) (483)
properties
Disposal of investment property - 2 450 11 800
Acquisition of furniture fittings (33) (65) (104)
and computer equipment
Acquisition of associates - (770) (770)
CASH FLOW UTILISED IN FINANCING - (15 149) -
ACTIVITIES
Amount owing by fellow subsidiary - (15 149) -
NET INCREASE/(DECREASE) IN CASH 7 225 (6 037) 20 714
AND CASH EQUIVALENTS
Cash and cash equivalents at 28 847 8 133 8 133
beginning of period
Cash and cash equivalents at end 36 072 2 096 28 847
of period
Unaudited consolidated statement of changes in equity for the six months ended
31 December 2011
Stated Accumulated
Capital Profit Total
R`000 R`000 R`000
At 30 June 2010 4 146 231 990 236 136
Total comprehensive income - 13 944 13 944
Dividend paid - (5 758) (5 758)
At 31 December 2010 4 146 240 176 244 322
Total comprehensive income - 30 206 30 206
Dividend paid - (4 319) (4 319)
At 30 June 2011 4 146 266 063 270 209
Total comprehensive income - 18 036 18 036
Dividend paid - (4 319) (4 319)
Balance at 31 December 2011 4 146 279 780 283 926
These six month Interim Financial Statements have been issued in accordance with
the requirements of the Companies Act of South Africa, 2008 and are published on
23 March 2012.
Comments
Basis of preparation
The unaudited interim financial statements for the six months ended 31 December
2011 and comparative information have been prepared in accordance with and
containing the information required by IAS34 Interim Financial Reporting as well
as the AC 500 Standards as issued by the Accounting Practices Board; the
Listings Requirements of JSE Limited and the relevant sections of the South
African Companies Act, 2008 (Act 71 of 2008) as amended.
The accounting policies applied in the preparation of these abridged financial
statements, which are based on reasonable judgements and estimates are in
accordance with International Financial Reporting Standards ("IFRS") and are
consistent with those applied in the annual financial statements for the year
ended 30 June 2011, except for the application of IAS 28 Investments in
Associates in the current year whereby the investment in associate was equity
accounted. This only affects the current year as the investment only became an
associate at the end of the previous year (June 2011) and the effect of equity
accounting was not material as at that date.
These interim results have not been audited by the company`s auditors
These statements have been prepared by James E Smith B.Sc., BAcc, CIEA, the
financial director of the company.
Financial results
The directors are pleased to report that property revenue for the six months
ended 31 December 2011 prior to any straight-line income adjustments increased
by 8.6% to R19.3 million compared to R17.8 million for the six months ended 31
December 2010 ("the comparable period"). The group`s rental, inclusive of
straight-line rental accruals, has increased nominally by 5.0% over the
comparable period, due to the reversing effect of the straight-line asset.
Property expenses increased by 98%, from R752 000 to R1.5 million as a result of
the implementation of preventative maintenance projects on several of our older
properties. Maintenance and refurbishment costs are expected to remain high in
the second half of the year. Administration expenses increased by 26.1% over the
comparable period. Investment and Other income rose by 57.1% as a result of
large cash reserves. The group has, for the first time equity accounted for its
investment in an associated company, Breaking Waves (Proprietary) Limited. This
increased profits by R272 000.
The board of directors has declared an interim dividend for the six months ended
31 December 2011 of 15.0 cents per ordinary share (December 2010: 15.0 cents per
ordinary share).This reflects a dividend cover of 2.4 times which continues to
be more favourable than the group`s stated dividend policy. In future, a
Dividend Withholding Tax ("DWT") of 15% will be applied to all dividends
declared by the Company. DWT is a withholding tax whereby the shareholders are
taxed on their dividends received instead of the company paying tax on dividends
paid. The company is required to withhold this tax and pay it to the South
African Revenue Service on payment of the dividend.
Unaudited Unaudited Audited
31 31 % 30 June
December December 2011
2011 2010
R`000 R`000 Change R`000
Reconciliation of headline
earnings
Net profit for the period 18 036 13 944 29.3 44 150
Adjusted for:
Loss on disposal of investment - - - (1 100)
property
Profit on disposal of - - - 114
investment properties
Tax effect on gain - - - (14)
Fair value adjustment of (8 600) (3 273) 162.8 (28 035)
investment properties
Taxation effect of fair value 1 204 458 162.8 3 925
adjustments
Headline earnings 10 640 11 129 (4.4) 19 040
Shares in issue (weighted 28 793 28 793 28 793
average number) (millions)
Dividends paid per share 17.3 20.0 (13.8) 30.0
(cents)
Headline earnings per share 37.0 38.7 (4.4) 66.1
(cents)
RATIOS
Net asset value per share 986.1 848.5 938.5
(cents)
Property portfolio
At 31 December 2011 the portfolio comprised 15 properties with a gross lettable
area of 76 948m2.
The sectoral spread by gross rentals comprised 87% industrial, 9% retail and 4%
commercial. Vacancies decreased during the period to 3.4% (2010: 6.9%) of gross
lettable area.
The company, as reported in our June results, has acquired an industrial
property in Kya Sands. Due to delays in Johannesburg Municipal Metro
administration procedures this property has as at the date of this report not
been transferred into the company`s name.
The company continues to transact primarily with `A` grade tenants. The company
continues to evaluate individual properties within the portfolio to ensure the
stated objectives; investment policy and returns are achieved.
The lease expiry profile reflects that in terms of gross lettable area, 84% of
the portfolio expires during the next 12 months, 5% in month 13 to 24, and 8%
from 2014 onwards. The head lease with our major tenant Putco expires during
2012. Refer to prospects below.
Segmental analysis
The table below summarises by segment the position for the six months ended 31
December 2011.
Segment assets include all operating assets used by a segment and consist of
investment properties, receivables and cash. Assets not directly attributable to
a particular segment are allocated to the corporate segment. Segment liabilities
include all operating liabilities of a segment and consist principally of
outstanding accounts.
Industrial Retail Commercial Corporate Total
R`000 R`000 R`000 R`000 R`000
Group income for
the six months
ended 31 December
2011
Property revenue 16 971 1 670 689 - 19 330
Straight-line (1 560) 463 - - (1 097)
rental income
accrual
Associate/other - - - 272 272
income
Property expenses (1 157) (94) (239) - (1 490)
Net profit from 14 254 2 039 450 272 17 015
property
operations
Group financial
position at 31
December 2011
Non-current assets
Investment 202 300 33 800 9 500 - 245 600
properties
Other non-current 7 452 11 569 614 98 19 733
assets
Current assets
Straight-line 2 105 463 - - 2 568
rental income
asset
Trade and other 2 065 543 - 2 406 5 014
receivables
Cash and cash - - - 36 072 36 072
equivalents
Non-current - - - 16 276 16 276
liabilities
Current
liabilities
Taxation payable - - - 1 756 1 756
Trade and other 1 193 100 441 2 807 4 541
payables
Group income for
the six months
ended 31 December
2010
Property revenue 15 123 1 601 1 068 - 17 792
Straight-line (405) 231 3 - (171)
rental income
accrual
Property expenses (618) (68) (66) - (752)
Net profit from 14 100 1 764 1 005 - 16 869
property
operations
Group financial
position at 31
December 2010
Non-current assets
Investment 164 174 34 850 22 215 - 221 239
properties
Other non-current 7 452 11 569 614 98 19 733
assets
Current assets
Straight-line 2 293 216 189 - 2 698
rental income
asset
Trade and other - - 170 16 191 16 361
receivables
Cash and cash - - - 2 096 2 096
equivalents
Non-current - - - 13 112 13 112
liabilities
Current
liabilities
Trade and other - - 2 329 2 364 4 693
payables
Acquisitions, expansions and refurbishments
During the period under review no acquisitions were made. Although the group
actively investigated many possible opportunities, no properties met the group`s
investment guidelines and criteria. No major capital projects are currently
under way. Refurbishments of the older properties will, as mentioned above
continue under a planned maintenance programme during the second half of the
year.
Valuation of property portfolio
It is the group`s policy to value the entire investment property portfolio on an
annual basis by an independent external valuer. The next valuation will be as at
30 June 2012. In addition, the property portfolio is valued by the directors on
a six monthly basis. The directors have valued the group`s investment portfolio
at 31 December 2011 at R245.6 million, an increase of R8.6 million or 3.6% on
the external valuation at 30 June 2011. This valuation was based on a review of
current market sales and purchase transactions in the property`s location as
well as reasonable judgements and estimates of the directors. The effects of any
acquisitions made during the year of acquisition are not included in any
revaluation.
Borrowings and capital commitments
The company has no significant borrowings as at 31 December 2011 nor has it any
capital commitments at that date.
Directorate
There have been no changes in the composition of the board of directors during
the current period.
Subsequent events
There have been no significant subsequent events between the period 31 December
2011 and the release of this report, 23 March 2012.
Prospects
Trading conditions during the next reporting period are expected to continue to
be challenging. As disclosed in the June 2011 annual financial statements, the
company is busy renegotiating the lease with our major tenant, Putco. It is
hoped this will be concluded prior to the issue of the June 2012 financial
statements.
The board is of the opinion that a reasonable growth in earnings will still be
achieved in the second half of the year and our current dividend trend will
continue.
Ordinary Interim Dividend number 45
Notice is hereby given that the board of directors have declared an interim cash
dividend ("the dividend") for the six months ended 31 December 2011 of 15.00
cents per ordinary share (December 2010: 15 cents per ordinary share) reflecting
a dividend cover of 2.4 times. The dividend is payable to shareholders recorded
in the books of the company at close of business on Friday, 20 April 2012.
The salient dates relating to the dividend are as follows:
Last date to trade shares cum dividend Friday, 13 April 2012
Shares trade ex dividend Monday, 16 April 2012
Record date Friday, 20 April 2012
Payment date Monday, 23 April 2012
Share certificates may not be dematerialised or rematerialised during the period
Monday, 16 April 2012 to Friday, 20 April 2012 both days inclusive.
On behalf of the board
23 March 2012
A B Adrian A Carleo
Chairman Chief Executive Officer
Directorate
A B Adrian* (Chairman)
B C Carleo (Chief Executive Officer)
J E Smith (Financial) (British)
A L Carleo-Novello
P Senatore*
P Nucci*
*Independent
Non-executive
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
Date: 23/03/2012 11:08:01 Supplied by www.sharenet.co.za
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