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FPT - Fountainhead Property Trust - Unaudited interim results for the six months
ended 31 March 2012 and the renewal of cautionary announcement
FOUNTAINHEAD PROPERTY TRUST
Short name: FPT
Share code: FPT
ISIN: ZAE000097416
UNAUDITED INTERIM RESULTS for the six months ended 31 March 2012 and the renewal
of cautionary announcement
* Interim distribution of 28 cents per unit
* Gearing of 25 percent
* Vacancies down to 6 percent
* Market capitalisation of R8.5 billion
The directors of Fountainhead Property Trust Management Limited, the manager of
Fountainhead Property Trust, submit their report on the unaudited results of
Fountainhead Property Trust for the six months ended 31 March 2012.
STATEMENT OF FINANCIAL POSITION
Unaudited Audited Unaudited
as at as at as at
31 Mar 2012 30 Sept 2011 31 Mar 2011
R`000 R`000 R`000
ASSETS
Property assets 10 336 554 8 815 317 8 034 369
Investment properties 10 037 817 8 529 779 7 764 419
Straight-line lease accrual 298 737 285 538 269 950
Current assets 441 343 454 562 407 309
Trade and other receivables 59 858 70 453 45 638
Cash and cash equivalents 381 485 384 109 361 671
Total assets 10 777 897 9 269 879 8 441 678
UNITHOLDERS` FUNDS AND LIABILITIES
Unitholders` funds 7 776 713 7 776 713 6 731 933
Capital of the fund 2 874 030 2 874 030 1 933 354
Capital reserve 575 778 574 903 558 812
Fair value reserve 4 028 108 4 042 182 3 969 758
Retained earnings 298 797 285 598 270 009
Non-current liabilities
Interest-bearing liability 1 142 887 355 940 1 310 758
Current liabilities 1 858 297 1 137 226 398 987
Trade and other payables 112 739 123 783 122 984
Interest-bearing liability 1 420 000 693 000 -
Unitholders for distribution 325 558 320 443 276 003
Total unitholders` funds and
liabilities 10 777 897 9 269 879 8 441 678
STATEMENT OF COMPREHENSIVE INCOME
Unaudited Audited Unaudited
6 months to 12 months to 6 months to
31 Mar 2012 30 Sept 2011 31 Mar 2011
R`000 R`000 R`000
Income 498 550 902 263 435 765
Contractual rental income 485 351 879 745 428 836
Straight-line lease adjustment 13 199 22 518 6 929
Expenses (120 007) (228 904) (116 169)
Administrative expenses (26 634) (44 982) (21 391)
Property operating expenses (93 373) (183 922) (94 778)
Operating profit 378 543 673 359 319 596
Net finance costs (39 786) (54 395) (36 664)
Interest received 11 486 27 703 11 384
Interest paid (51 272) (82 098) (48 048)
Profit on disposal of investment
properties - 13 869 12 827
Fair value adjustments to investment
properties (13 199) 80 544 (6 929)
Profit for the period 325 558 713 377 288 830
Total comprehensive income
for the period 325 558 713 377 288 830
Basic earnings per unit (cents) 28.00 66.36 29.00
Headline earnings and distribution
income reconciliation
Profit for the period 325 558 713 377 288 830
Adjust for:
Profit on disposal of
investment properties - (13 869) (12 827)
Fair value adjustments to
investment properties 13 199 (80 544) 6 929
Headline earnings 338 757 618 964 282 932
Less: straight-line lease adjustment(13 199) (22 518) (6 929)
Distribution income 325 558 596 446 276 003
Headline earnings per unit (cents) 29.14 57.58 28.41
Distribution per unit (cents) 28.00 55.27 27.71
Interim distribution per unit (cents) 28.00 27.71 27.71
Final distribution per unit (cents) - 27.56 -
Weighted average units
in issue 1 162 709 748 1 075 038 515 996 043 081
Units in issue 1 162 709 748 1 162 709 748 996 043 081
COMMENTARY
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The unaudited interim results have been prepared in accordance with
International Financial Reporting Standards (IFRS), IAS 34 - Interim Financial
Reporting and the requirements of the Collective Investment Schemes Control Act.
The accounting policies are consistent in all respects with those applied in the
prior year.
2. INCOME DISTRIBUTION PER UNIT
Fountainhead Property Trust`s net distribution income for the six months ended
March 2012 amounts to 28.00 cents per unit, 1 percent greater than the
comparable period last year.
If the short-term dilution of the R1 billion rights offer concluded in April
2011 and the 25 percent undivided share acquisition of Centurion Mall were
excluded, distribution growth would have been approximately 5.5 percent greater
than the comparable period last year.
3. BORROWINGS
The interest-bearing liability comprises:
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 R750 000 000 of this facility has been
accessed.
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 R626 990 332 has been drawn from the facility. R350 000 000 of the
facility has been fixed at 8.42% until 31 May 2015. Interest payments on the
R626 990 332 balance drawn will be expensed as from 1 April 2012. Interest
payments on any further capital expenditure from 1 April 2012 until project
completion will continue to be capitalised until the project is complete.
Term Loan E - a R600 000 000 interest only facility floating at a rate of 1
month JIBAR + 2.25% until 28 February 2016. A total of R515 897 008 of this
facility has been accessed.
Term Loan F - a R220 000 000 interest only facility floating at a rate of 1
month JIBAR + 1.37% until 1 July 2012. A total of R220 000 000 of this facility
has been accessed.
Standard Bank has agreed in principle to refinance the R1.42 billion loan
facilities expiring this year.
4. MAJOR CAPITAL PROJECT
Blue Route Mall
The new Blue Route Mall opened on 29 March 2012, eleven days ahead of schedule
and within budget.
The mall is 56 000 m2, the largest redevelopment Fountainhead has ever
undertaken and is 99 percent let.
The mall is trading well with both tenant and shopper feedback being extremely
positive.
5. ACQUISITIONS AND DISPOSALS
The Trust has purchased the following properties during the period:
Sector Building name Location
Retail Centurion Mall 25%
undivided share Centurion, PTA
Retail Centurion Boulevard Centurion, PTA
Office Cedarwood Bryanston, JHB
Sector Building name Price Initial yield Transfer date
Retail Centurion Mall 25%
undivided share R751 519 364 7.10% 15 December 2011
Retail Centurion Boulevard R366 000 000 8.20% 27 March 2012
Office Cedarwood R77 843 799 9.00% 4 January 2012
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 property during the period:
Sector Building name Location Transfer date Selling price
Industrial Medsave House Strijdom Park, JHB 3 October 2011 2 446 000
Sector Building name Location Valuation Profit on sale
Industrial Medsave House Strijdom Park, JHB 2 446 000 -
STATEMENT OF CASH FLOWS
Unaudited Audited Unaudited
6 months to 12 months to 6 months to
31 Mar 2012 30 Sept 2011 31 Mar 2011
R`000 R`000 R`000
Cash effects from
operating activities
Profit for the period 325 558 713 377 288 830
Adjustments for:
Straight-line lease adjustment (13 199) (22 518) (6 929)
Interest received (11 486) (27 703) (11 384)
Interest paid 51 272 82 098 48 048
Profit on disposal of
investment properties - (13 869) (12 827)
Fair value adjustments to
investment properties 13 199 (80 544) 6 929
Operating profit before changes
in working capital 365 344 650 841 312 667
Trade and other receivables
decreased/(increased) 10 595 (16 579) 8 236
Trade and other payables decreased (11 044) (2 418) (3 217)
Cash generated from the operations 364 895 631 844 317 686
Interest received 11 486 27 703 11 384
Interest paid (51 272) (82 098) (48 048)
Income distributions (320 443) (589 424) (267 238)
Cash inflows/(outflows) from
operating activities 4 666 (11 975) 13 784
Cash effects from
investing activities
Additions to investment
properties (1 523 683) (870 730) (139 498)
Proceeds from disposal of
investment properties 2 446 112 388 58 000
Cash outflows from investing
activities (1 521 237) (758 342) (81 498)
Cash effects from financing
activities
Interest-bearing liability
raised 1 513 947 355 940 85 758
Interest-bearing liability
repaid - (532 000) -
Issue of units - 1 000 000 -
Rights offer expenses - (13 141) -
Cash inflows from financing
activities 1 513 947 810 799 85 758
Net (decrease)/increase in cash
and cash equivalents (2 624) 40 482 18 044
Cash and cash equivalents at
beginning of the period 384 109 343 627 343 627
Cash and cash equivalents at end
of the period 381 485 384 109 361 671
STATEMENT OF CHANGES IN UNITHOLDERS` FUNDS
Capital of Capital Fair value
(R`000) the fund reserve reserve
Balance at 1 October 2010 1 933 354 513 837 4 008 835
Total comprehensive income for the period
Profit and total comprehensive
income for the period - - -
Transactions with unitholders,
recorded directly in equity
Profit and fair value reserve realised
on sale of property transferred to
capital reserve 44 975 (32 148)
Fair value adjustment on investment
properties transferred to fair value reserve (6 929)
Income distributions
Total transactions with unitholders - 44 975 (39 077)
Balance as at 31 March 2011 1 933 354 558 812 3 969 758
Balance at 1 October 2011 2 874 030 574 903 4 042 182
Total comprehensive income
for the period
Profit and total comprehensive
income for the period - - -
Transactions with unitholders,
recorded directly in equity
Profit and fair value reserve realised
on sale of property transferred to
capital reserve 875 (875)
Fair value adjustment on investment
properties transferred to fair value
reserve (13 199)
Income distributions
Total transactions with unitholders - 875 (14 074)
Balance as at 31 March 2012 2 874 030 575 778 4 028 108
Total
Retained unitholders`
(R`000) earnings funds
Balance at 1 October 2010 263 080 6 719 106
Total comprehensive income for the period
Profit and total comprehensive
income for the period 288 830 288 830
Transactions with unitholders,
recorded directly in equity
Profit and fair value reserve realised
on sale of property transferred to capital reserve (12 827) -
Fair value adjustment on investment
properties transferred to fair value reserve 6 929 -
Income distributions (276 003) (276 003)
Total transactions with unitholders (281 901) (276 003)
Balance as at 31 March 2011 270 009 6 731 933
Balance at 1 October 2011 285 598 7 776 713
Total comprehensive income for the period
Profit and total comprehensive
income for the period 325 558 325 558
Transactions with unitholders, recorded directly
in equity
Profit and fair value reserve realised
on sale of property transferred to capital reserve - -
Fair value adjustment on investment
properties transferred to fair value reserve 13 199 -
Income distributions (325 558) (325 558)
Total transactions with unitholders (312 359) (325 558)
Balance as at 31 March 2012 298 797 7 776 713
6. SEGMENTAL INFORMATION
Mar 2012
6 months
Net
Revenue income % of
Rm Rm Total
Retail 335 267 82
Office blocks 90 75 23
Industrial 44 34 11
Specialised 16 16 5
Corporate - (67) (21)
Total 485 325 100
Sept 2011
12 months
Net
Revenue income % of
Rm Rm Total
Retail 621 482 81
Office blocks 143 116 20
Industrial 85 68 11
Specialised 31 31 5
Corporate - (101) (17)
Total 880 596 100
Mar 2011
6 months
Net
Revenue income % of
Rm Rm Total
Retail 305 234 81
Office blocks 67 67 23
Industrial 42 32 11
Specialised 15 15 5
Corporate - (59) (20)
Total 429 289 100
7. VACANCY LEVELS
Vacancy levels in terms of rentable area were as follows:
Sector % Mar 2012 Sept 2011 Mar 2011
Retail 5 7 4
Office blocks 10 10 14
Industrial 7 7 8
Specialised - - -
Total 6 7 6
By value, the vacancies equated to 4.9 percent of potential rental income,
slightly lower than the 5 percent at year-end.
The retail sector had vacancies of 5 percent primarily located at The
Brightwater Commons and the offices at Centurion Mall. The reduction in
vacancies is due to the R27 million Builders refurbishment which assisted in the
letting of the lower level.
The office sector had vacancies of 10 percent which is primarily situated in
Grayston Ridge and AMR Office Park.
The industrial sector had vacancies of 7 percent, primarily located at Supreme
Industrial Park and the Jet Park mini-units.
8. PROSPECTS
Based on the board`s assessment it is anticipated that distribution per unit for
the year ending 30 September 2012 will increase marginally compared with the
year ended 30 September 2011. This forecast has not been reviewed or reported on
by Fountainhead Property Trust`s external auditor.
9. RENEWAL OF CAUTIONARY
Unitholders are referred to the announcement dated 30 March 2012 regarding the
acquisition by Redefine Properties Limited ("Redefine") of the management
company ("Manco") of Fountainhead.
As set out in the previous announcement, subject to the acquisition of the
Manco, Redefine intends making an offer to acquire all the assets of
Fountainhead in return for a combination of units in Redefine and Hyprop
Investments Limited.
Unitholders are advised that the process is still ongoing and to continue to
exercise caution in dealing with their units until any further announcements in
this regard are made.
10. INCOME DISTRIBUTION ANNOUNCEMENT
Notice is hereby given of distribution No. 58 of 28.00 cents per unit for the
six months ended 31 March 2012.
The last date to trade cum distribution will be Friday, 25 May 2012. The units
of Fountainhead Property Trust will commence trading ex-distribution on Monday,
28 May 2012 and the record date will be Friday, 1 June 2012. The distribution
will be paid on Monday, 4 June 2012.
Unit certificates may not be dematerialised or rematerialised between Monday, 28
May 2012 and Friday, 1 June 2012, both dates inclusive.
BY ORDER OF THE BOARD
Fountainhead Property Trust Management Limited
(Reg No. 1983/003324/06)
9 May 2012
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 (Pty) Ltd
70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Secretary and registered office:
Broll Property Group (Pty) Ltd
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
Email: fountainhead@standardbank.co.za
Website: www.fountainheadproperty.co.za
Date: 10/05/2012 09:00:01 Supplied by www.sharenet.co.za
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