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REB - Rebosis Property Fund Limited - Unaudited interim results for the six

Release Date: 25/04/2012 14:42
Code(s): REB
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REB - Rebosis Property Fund Limited - Unaudited interim results for the six months ended 29 February 2012 REBOSIS PROPERTY FUND LIMITED (formerly Business Venture Investments No. 1389 (Proprietary) Limited) ("Rebosis" or the "company") Registration number 2010/003468/06 JSE code: REB ISIN: ZAE 000156147 UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 29 FEBRUARY 2012 - 12,7% increase in distribution to 43,0 cents per linked unit - R3,78 billion of investment property - R10,53 net asset value per linked unit, excluding deferred taxation - 16% retail turnover growth - Acquisitions with a market value of R543 million secured Statement of comprehensive income Unaudited Unaudited Audited
6 months ended 6 months ended year ended 29 Feb 2012 28 Feb 2011 31 Aug 2011 R000 R000 R000
REVENUE Property portfolio 262 056 92 511 257 067 Rental income 196 072 79 976 252 330 Straight line rental income accrual 65 984 12 535 4 737 Net income from facilities 7 468 - 3 994 management Sundry income 475 243 403 Total revenue 269 999 92 754 261 464 Property expenses (42 700) (18 676) (59 725) Administration and corporate (8 260) (1 431) (3 957) costs Restructuring costs - - (50 028) Debt arrangement fees - - (120 726) Net operating profit 219 039 72 647 27 028 Changes in fair values of (15 664) 23 580 262 761 investment properties and financial instruments Profit from operations 203 375 96 227 289 789 Net finance charges (59 515) (60 112) (144 701) Profit before debenture interest 143 860 36 115 145 088 and taxation Debenture interest (94 490) - (48 898) Profit before taxation 49 370 36 115 145 088 Taxation (67 005) (11 867) (44 038) (Loss)/profit for the period (17 635) 24 248 52 152 Reconciliation of earnings and distributable earnings (Loss)/profit for the period (17 635) 24 248 52 152 attributable to equity holders Debenture interest 94 490 - 48 898 Earnings attributable to linked 76 855 24 248 101 050 unitholders Change in fair value of 24 419 10 780 (241 026) properties (net of deferred taxation) Change in fair value of investment properties 30 017 12 535 (280 263) Deferred taxation (5 598) (1 755) 39 237
Headline profit/(loss) 101 274 35 028 (139 976) attributable to linked unitholders Change in fair value of financial (10 334) (26 003) 12 601 instruments (net of deferred taxation) Change in fair value of financial instruments (14 353) (36 115) 17 502 Deferred taxation 4 019 10 112 (4 901) Straight line rental income (47 508) (9 025) (3 411) accrual (net of deferred taxation) Straight line rental income accrual (65 984) (12 535) (4 737) Deferred taxation 18 476 3 510 1 326 Deferred taxation - rate and 50 108 - 8 376 other adjustments Structuring fee amortisation 950 - 554 Restructuring costs - - 50 028 Debt arrangement fees - - 120 726 Distributable earnings 94 490 - 48 898 attributable to linked unitholders
Number of linked units/shares in 219 744 713 1 000 219 744 713 issue Weighted average number of linked 219 744 713 1 000 64 419 020 units/shares in issue Basic and diluted earnings per 34,97 2 424 800,00* 156,86 linked unit (cents) Headline profit/(loss) per linked 46,09 3 502 800,00* (217,29) unit (cents) Distributable earnings per linked 43,00 - 22,25 unit (cents) * Calculation has been based on the number of shares in issue at 28 February 2011. Abridged statement of changes in equity Unaudited Unaudited Audited 6 months ended 6 months ended year ended
29 Feb 2012 28 Feb 2011 31 Aug 2011 R000 R000 R000 Stated capital 477 168 1 477 168 Balance at the beginning of the period 477 168 1 1 Issue of shares - - 477 167 Reserves 34 517 24 248 52 152 Balance at the beginning of the period 52 152 - - (Loss)/profit for the period (17 635) 24 248 52 152 511 685 24 249 529 320
Statement of financial position Unaudited Unaudited Audited 29 Feb 2012 28 Feb 2011 31 Aug 2011 R000 R000 R000
ASSETS Non-current assets 3 884 737 2 972 919 3 501 676 Investment property 3 784 500 2 857 500 3 400 400 Goodwill 95 703 95 703 95 703 Property, plant and equipment 438 18 981 527 Structuring fee 4 096 735 5 046 Current assets 29 067 9 718 85 800 Trade and other receivables 18 419 8 241 13 680 Structuring fee 1 900 - 1 900 Cash and cash equivalents 8 748 1 477 70 220 3 913 804 2 982 637 3 587 476
EQUITY AND LIABILITIES Equity 511 685 24 249 529 320 Stated capital 477 168 1 477 168 Reserves 34 517 24 248 52 152 Non-current liabilities 3 265 731 2 739 844 2 933 310 Debentures 1 595 347 2 162 522 1 595 347 Secured financial liabilities 1 433 300 435 728 1 153 531 Interest rate swaps 30 337 34 024 44 690 Deferred taxation 206 747 107 570 139 742 Current liabilities 136 388 218 544 124 846 Secured financial liabilities - 9 245 - Trade and other payables 39 072 172 476 60 761 Rental warranty 2 826 - 15 187 Bank overdraft - 36 826 Unitholders for distribution 94 490 - 48 898
Total equity and liabilities 3 913 804 2 982 637 3 587 476 Net asset value per linked unit 9,59 2 186 771,00* 9,67 (R) Net asset value per linked unit 10,53 2 294 341,00* 10,30 (excluding deferred taxation) (R) * Calculation has been based on the number of shares in issue at 28 February 2011. Abridged statement of cash flows Unaudited Unaudited Audited 6 months ended 6 months ended year ended 29 Feb 2012 28 Feb 2011 31 Aug 2011
R000 R000 R000 Cash flows from operating 6 903 15 407 (233 172) activities Cash generated from/(absorbed by) 66 418 75 519 (88 471) operations Net finance costs (59 515) (60 112) (144 701) Cash outflows from investing (348 144) (481 804) (634 233) activities Cash inflows from financing 279 769 431 048 937 625 activities Net movement in cash and cash (61 472) (35 349) 70 220 equivalents Cash and cash equivalents at the 70 220 - - beginning of the period Cash and cash equivalents at the 8 748 (35 349) 70 220 end of the period Segmental information Retail Office Total R000 R000 R000 For six months ended 29 February 2012 Extracts from statement of comprehensive income Total revenue from property 126 628 77 387 204 015 portfolio (excluding straight line rental income accrual) Rental income 126 305 69 767 196 072 Net income from facilities management contract - 7 468 7 468 Sundry income 323 152 475 Property expenses (32 795) (9 905) (42 700) Net property income 93 833 67 482 161 315 Extracts from statement of financial position Investment property 2 276 800 1 507 700 3 784 500 For period from listing to 31 August 2011 Extracts from statement of comprehensive income Total revenue from property 64 896 42 713 107 609 portfolio (excluding straight line rental income accrual) Rental income 64 791 38 677 103 468 Net income from facilities management - 3 994 3 994 Sundry income 105 42 147 Property expenses (16 401) (6 334) (22 735) Net property income 48 495 36 379 84 874 Extracts from statement of financial position Investment property 1 915 000 1 485 400 3 400 400 Financial results Rebosis, the largest black-managed and substantially black-held property fund, which listed on the JSE Limited ("JSE") on 17 May 2011, has declared a distribution of 43,0 cents per linked unit for the six-months ended 29 February 2012. This represents an effective increase of 12,7% compared to the previous distribution of 22,25 cents per linked unit for the period from listing on 17 May 2011 to 31 August 2011. At 29 February 2012, the net asset value per linked unit of R10,53, excluding deferred taxation, represents a premium of 8,6% to Rebosis` closing unit price of R9,70. The comparative results of the company for the period 1 December 2010, the date on which Rebosis acquired the initial portfolio of six properties, to 28 February 2011 reflect the results of the company prior to listing. Pursuant to its listing on the JSE, the portfolio of assets, the gearing against the portfolio, the asset management arrangements and the capital structure were substantially restructured. Subsequent to the listing, Rebosis took transfer of two additional properties being Victoria Mxenge on 24 May 2011 and Bloed Street Mall on 25 November 2011. Property portfolio Rebosis` portfolio currently consists of 60% shopping centres and 40% office buildings (by value), located in Gauteng and the Eastern Cape. The retail portfolio comprises three exceptional quality shopping malls delivering secure, escalating income streams underpinned by strong anchor and national tenants. The office portfolio consists of five buildings which are well located in nodes attractive to government tenants; four in Pretoria and one in Braamfontein. These are mainly let to the National Department of Public Works, under long leases providing for escalations of 8% or more per annum. The office portfolio represents a sovereign underpin to a substantial portion of the earnings and shields it from private sector risks such as tenant insolvency and default. The properties, which were valued by independent valuer Quadrant Properties (Proprietary) Limited, increased in value by R36,0 million to R3,785 billion at 29 February 2012. Property Value Value per m2 GLA m2 R000 R/m2
Retail portfolio 134 660 2 276 800 16 908 Hemingways Mall 72 788 1 493 800 20 523 Mdantsane City 36 112 415 000 11 492 Bloed Street Mall 25 760 368 000 10 291 Office portfolio 113 103 1 507 700 13 330
Victoria Mxenge 24 720 426 500 17 253 Salu 30 157 433 500 14 375 Liberty 33 885 416 000 12 277 Bank of Lisbon 14 593 126 300 8 655 Arbour Square 9 748 105 400 10 812 247 763 3 784 500 14 493 During the period, the company let 3 757 m2 of new space and leases in respect of 3 805 m2 were renewed. At the reporting date, vacancies for the total portfolio were 4,1%. Taking into account signed leases commencing after the reporting date, vacancies are 2,6%. Borrowings To ensure effective cash management, surplus cash is invested against the revolving debt facilities. At 29 February 2012, Rebosis` net borrowings of R1,433 billion equate to a gearing ratio of 37,9%. The average interest rate for the period was 8,9% and interest rates are fixed in respect of 80% of borrowings for an average period of 3,5 years. Acquisitions Further to the cautionary announcements released on SENS on 7 December 2011, 5 March 2012 and 20 April 2012 relating to the acquisition of letting enterprises and properties from various vendors by Rebosis, unitholders are advised that a SENS announcement was released today which sets out the financial effects of the remaining acquisitions being 28 Harrison Street, SASSA Campus, the Revenue Building and 270 Jabu Ndlovu Street ("the remaining acquisitions") which includes a revised forecast for Rebosis. Directorate SP Fifield retired and did not stand for re-election at the company`s first annual general meeting held on 28 March 2012. N Qangule and T Seopa have been appointed as independent non-executive directors and members of the audit and risk committee and investment committee with effect 26 April 2012. Prospects With less than a year since listing, Rebosis has established itself operationally and is well positioned for future growth. The retail properties have continued to perform ahead of the industry with turnover growth for the period of 16%. Vacancies in the portfolio have reduced and interest for our retail space remains strong. The board anticipates that the distribution for the year ending 31 August 2012 remains unchanged between 85,0 cents and 88,3 cents per linked unit. The forecast is based on the assumption that there will be no changes in current trading conditions and that the remaining acquisitions will be acquired with effect 1 July 2012. This forecast has not been reviewed or reported on by the company`s auditors. Debenture interest distribution Distribution no. 2 of 43,0 cents per linked unit for the period ended 29 February 2012 will be paid to linked unitholders in accordance with the abbreviated timetable set out below: 2012 Last day to trade cum distribution Friday, 11 May 2012 Linked units trade ex distribution Monday, 14 May 2012 Record date Friday, 18 May 2012 Payment date Monday, 21 May 2012 Linked unitholders may not dematerialise or rematerialise their linked units between Monday, 14 May 2012 and Friday, 18 May 2012, both days included. Basis of preparation The results for the six months ended 29 February 2012 have not been audited or reviewed by the company`s independent auditors. These results have been prepared in accordance with International Financial Reporting Standards (IFRS), the AC 500 series issued by the South African Institute of Chartered Accountants, JSE Listings Requirements and the requirements of the South African Companies Act 71 of 2008 (as amended). This report has been prepared in terms of IAS 34 - "Interim Financial Reporting". The accounting policies adopted in the preparation of these unaudited results are consistent with those applied in the preparation of the financial statements for the year ending 31 August 2011. The comparative figures for the year ended 31 August 2011 have been restated in the statement of comprehensive income to reflect the income from facilities management on a net basis. These financial results have been compiled by the financial director, JA Finn CA(SA). While the company has complied with IFRS and JSE Listings Requirements by disclosing earnings and headline earnings per share, the directors are of the view that earnings per share are not meaningful to investors as the shares are traded as part of a linked unit and all earnings are distributed by way of debenture interest. Further, headline earnings include fair value adjustments for financial instruments and the straight-line rental income accrual that do not affect distributable earnings. Distributable earnings and the distribution per linked unit, as disclosed above, are more meaningful to investors. By order of the board Rebosis Property Fund Limited 25 April 2012 Directors ATM Mokgokong*# (Chairperson), SM Ngebulana (CEO), JA Finn, AM Mazwai*#, WJ Odendaal*#, KL Reynolds*, MF Rodel, SV Zilwa*# *Non-executive #Independent Registered office 3rd Floor, Palazzo Towers West, Montecasino Boulevard, Fourways 2191 (PO Box 2972, Northriding 2162) Transfer secretaries Computershare Investor Services (Proprietary) Limited Sponsor Java Capital Company secretary Probity Business Services (Proprietary) Limited Date: 25/04/2012 14:42:01 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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