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Audited results for the year ended 31 August 2012
REBOSIS PROPERTY FUND LIMITED
("Rebosis" or the "company")
Registration number 2010/003468/06
JSE code: REB ISIN: ZAE000156147
AUDITED RESULTS FOR THE YEAR ENDED 31 AUGUST 2012
HIGHLIGHTS
- 85,5 cents total distribution per linked unit
- 31,5% total return to unitholders
- Market capitalisation up 39% to R3,014 billion
- High growth defensive property portfolio valued at R4,54 billion
- Net asset value, excluding deferred taxation, up 9% to R11,23 per linked unit
- Retail turnover growth of 15%
STATEMENT OF COMPREHENSIVE INCOME
Audited
Audited For period Audited
For year from For year
ended listing to ended
31 August 31 August 31 August
2012 2011 2011
R'000 R'000 R'000
REVENUE
Property portfolio 500 029 105 944 257 067
Rental income 414 163 103 468 252 330
Straight-line rental income accrual 85 866 2 476 4 737
Net income from facilities management 15 822 3 994 3 994
Sundry income 6 081 147 403
Total revenue 521 932 110 085 261 464
Operating costs (98 494) (22 735) (59 725)
Administration costs (15 961) (3 901) (3 957)
Restructuring costs (50 028)
Debt arrangement fees (120 726)
Net operating profit 407 477 83 449 27 028
Changes in fair values 157 461 62 833 262 761
Investment properties 253 489 110 000 285 000
Straight-line rental income accrual (85 866) (2 476) (4 737)
Derivative instruments (10 162) (44 691) (17 502)
Profit from operations 564 938 146 282 289 789
Net finance charges (117 811) (32 672) (144 701)
Interest paid (126 434) (32 916) (144 859)
Interest received 8 623 244 158
Profit before debenture interest
and taxation 477 127 113 610 145 088
Debenture interest (200 378) (48 898) (48 898)
Profit before taxation 246 749 64 712 96 190
Taxation (102 564) (3 233) (44 038)
Total comprehensive income
for the year 144 185 61 479 52 152
Reconciliation of earnings
and distributable earnings
Profit for the year attributable
to shareholders 144 185 61 479 52 152
Debenture interest 200 378 48 898 48 898
Earnings attributable to
linked unitholders 344 563 110 377 101 050
Change in fair value of investment
property (net of deferred taxation) (136 365) (92 471) (241 026)
Change in fair value of
investment property (167 623) (107 524) (280 263)
Deferred taxation 31 258 15 053 39 237
Deferred taxation adjustment
to CGT rate 50 108
Headline profit/(loss) attributable
to linked unitholders 258 306 17 906 (139 976)
Calculation of distributable
earnings
Net operating profit 407 477 83 449 27 028
Less: (201 633) (34 594) 21 870
Straight-line rental income accrual (85 866) (2 476) (4 737)
Finance charges (115 767) (32 118) (144 147)
Net finance charges (117 811) (32 672) (144 701)
Less: Structuring fee amortisation 2 044 554 554
Restructuring costs 50 028
Debt arrangement fees 120 726
Derecognition of current liability (5 466)
Retained profit at listing date 43
Distributable earnings attributable
to linked unitholders 200 378 48 898 48 898
Number of linked units in issue 249 147 699 219 744 713 219 744 713
Weighted average number
of linked units in issue 226 332 267 64 082 209 64 419 020
Basic and diluted earnings
per linked unit (cents) 152,24 172,22 156.86
Headline profit/(loss)
per linked unit (cents) 114,13 27,94 (217,29)
Distributable earnings
per linked unit/share (cents) 85,50 22,25 22,25
STATEMENT OF FINANCIAL POSITION
Audited Audited
As at As at
31 August 31 August
2012 2011
R'000 R'000
ASSETS
Non-current assets 4 636 346 3 501 676
Investment property 4 540 200 3 400 400
Goodwill 95 703 95 703
Property, plant and equipment 443 527
Structuring fee 5 046
Current assets 34 642 85 800
Trade and other receivables 17 320 13 680
Structuring fee 1 900
Cash and cash equivalents 17 322 70 220
Total assets 4 670 988 3 587 476
EQUITY AND LIABILITIES
Equity 746 424 529 320
Stated capital 550 087 477 168
Reserves 196 337 52 152
Non-current liabilities 3 785 068 2 933 310
Debentures 1 808 812 1 595 347
Secured financial liabilities 1 679 098 1 153 531
Derivative instruments 54 853 44 690
Deferred taxation 242 305 139 742
Current liabilities 139 496 124 846
Trade and other payables 33 608 60 760
Rental warranty 15 188
Unitholders for distribution 105 888 48 898
Total equity and liabilities 4 670 988 3 587 476
Net asset value per linked unit (R) 10,26 9,67
Net asset value per linked unit
(excluding deferred taxation) (R) 11,23 10,30
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Audited Audited
For year For year
ended ended
31 August 31 August
2012 2011
R'000 R'000
Stated capital 550 087 477 168
Balance at beginning of the year 477 168 1
Issue of shares 72 919 477 167
Reserves 196 337 52 152
Balance at beginning of the year 52 152
Profit for the year attributable to shareholders 144 185 52 152
746 424 529 320
ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOW
Audited Audited
For year For year
ended ended
31 August 31 August
2012 2011
R'000 R'000
Cash flows from operating activities 17 211 (233 172)
Cash generated from/(absorbed by) operations 278 410 (88 471)
Net finance costs (117 811) (144 701)
Debenture interest paid (143 388)
Cash outflows from investing activities (886 963) (634 233)
Cash inflows from financing activities 816 854 937 625
Net movement in cash and cash equivalents (52 898) 70 220
Cash and cash equivalents at the beginning of the year 70 220
Cash and cash equivalents at the end of the year 17 322 70 220
CONDENSED SEGMENTAL ANALYSIS
Retail Office Total
R'000 R'000 R'000
Year ended 31 August 2012 (audited)
Rental income (excluding straight-line
rental income accrual) 263 762 150 401 414 163
Operating costs (75 679) (22 815) (98 494)
Net property income 188 083 127 586 315 669
Changes in fair values of investment property 59 714 107 909 167 623
Investment property 2 382 000 2 158 200 4 540 200
For period 17 May to 31 August 2011 (audited)
Rental income (excluding straight-line
rental income accrual) 64 791 38 677 103 468
Operating costs (16 401) (6 334) (22 735)
Net property income 48 390 32 343 80 733
Changes in fair values of investment property 73 507 34 017 107 524
Investment property 1 915 000 1 485 400 3 400 400
COMMENTARY
Introduction
Rebosis owns a high growth defensive portfolio of 12 properties. The company's primary
objective is to grow its portfolio and distributions by investing in high-quality retail and
commercial properties yielding secure capital and income returns for unitholders.
Financial results
Rebosis has declared a distribution of 42,50 cents per linked unit for the six months ended
31 August 2012 which, together with the interim distribution of 43,0 cents for the six months
ended 29 February 2012, results in a total distribution of 85,50 cents per linked unit for the
year. This represents an effective increase of 12,1% compared to the annualised distribution
of 22,25 cents per linked unit for the period from listing on 17 May 2011 to 31 August 2011.
The total distribution is in line with the forecast included in the announcements published on
25 April 2012.
The total return for the year of 31,5% comprises an income return of 8,7% and a capital
return of 22,8%.
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 31 August 2011, include the
results of the company for the period prior to its listing on the JSE Limited ("JSE"). Pursuant
to its listing, the portfolio of assets, the gearing against the portfolio, the asset management
arrangements and the capital structure were substantially restructured. The results from
listing to 31 August 2011, which are more relevant to Rebosis unitholders, have been reflected
separately.
Property portfolio
At 31 August 2012, the portfolio, valued at R4,54 billion, consists of 12 properties with a total
GLA of 295 716 m². The portfolio, which is located in Gauteng, the Eastern Cape, KwaZulu-
Natal and North West Provinces, comprises 52% shopping centres and 48% office buildings
(by value). 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 nine buildings which are well-located in nodes attractive to
Government tenants. These are mainly let to the National Department of Public Works,
under long leases providing for average escalations of 8,3%. 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.
Changes in fair values
The properties, which were valued by independent valuer Quadrant Properties (Proprietary)
Limited, increased in value by R167,6 million at 31 August 2012.
Acquisitions
The company took transfer of the Bloed Street Mall, a 25 760 m² retail centre on 25 November
2011, at a cost of R341,5 million and an initial yield of 9,6%. Four office buildings, totalling
50 837 m², were acquired between 29 June 2012 and 31 July 2012 for R519,0 million at an
initial yield of 10,8%.
Letting activity
At the reporting date, vacancies for the total portfolio were 3,7%. Taking into account signed
leases commencing after the reporting date, vacancies are 2,0%.
During the year, the company let 9 940 m² of new space and leases in respect of 4 772 m²
were renewed.
The portfolio
GLA Value Value
m(2) R'000 R/m(2)
Retail portfolio 132 845 2 382 000 17 931
Hemingways Mall 70 538 1 536 000 21 775
Mdantsane City 36 547 442 000 12 094
Bloed Street Mall 25 760 404 000 15 683
Commercial portfolio 162 871 2 158 200 13 251
Salu 30 354 472 400 15 563
Liberty 33 885 448 000 13 221
Victoria Mxenge 24 720 435 000 17 597
28 Harrison Street 20 984 216 000 10 294
Bank of Lisbon 14 599 135 400 9 275
Sassa Campus 11 665 140 000 12 002
Jabu Ndlovu Street 10 874 122 000 11 219
Arbour Square 8 476 105 400 12 435
Revenue Building 7 314 84 000 11 485
295 716 4 540 200 15 353
Borrowings
At 31 August 2012, Rebosis' net borrowings of R1,684 billion equate to a gearing ratio
of 37,1%. The average interest rate for the year under review was 8,72% and interest rates are
fixed in respect of 79% of borrowings for an average period of 2,8 years.
To ensure effective cash management, surplus cash is invested against revolving debt facilities.
Company secretary
Mande Ndema, an employee of the property management company, has been appointed
company secretary of Rebosis in place of Probity Business Services (Proprietary) Limited
which resigns effective 1 November 2012.
Prospects
With its first full year of trading successfully completed, Rebosis is well-positioned for future
growth and acquisition opportunities aligned with its current investment profile. Vacancies
have reduced, arrears have been contained, and demand for premises remains strong.
The shopping centres have performed ahead of national retail sales growth, with turnover
growth for the period of 15,0%. The board anticipates that the distribution for the year ending
31 August 2013 will be between 92 cents and 95 cents per linked unit. This is based on the
assumption that there will be no change in current trading conditions of the existing portfolio.
This forecast has not been reviewed or reported on by the company's auditors.
Debenture interest distribution
Distribution No. 3 of 42,50 cents per linked unit for the six months ended 31 August 2012
will be paid to linked unitholders in accordance with the abbreviated timetable set out below:
Last day to trade cum distribution Friday, 9 November 2012
Linked units trade ex distribution Monday, 12 November 2012
Record date Friday, 16 November 2012
Payment date Monday, 19 November 2012
Linked unitholders may not dematerialise or rematerialise their linked units between Monday,
12 November 2012 and Friday, 16 November 2012, both days included.
Basis of preparation
These abridged financial statements have been derived from a complete set of the annual
financial statements on which the auditors have expressed an unqualified audit opinion
which is available for inspection at the company's registered office. These results have been
prepared in accordance with International Financial Reporting Standards (IFRS), IAS 34:
Interim Financial Reporting, the AC 500 series issued by the Accounting Practices Board or its
successor, JSE Listings Requirements and the requirements of the South African Companies
Act, 2008. The accounting policies adopted in the preparation of these results are consistent
with those applied in the preparation of the financial statements for the year ending 31 August
2011. 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 is 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.
On behalf of the Board
ATM Mokgokong SM Ngebulana
Chairman Chief Executive
24 October 2012
REBOSIS PROPERTY FUND LIMITED
("Rebosis" or the "company")
Registration number 2010/003468/06
JSE code: REB ISIN: ZAE000156147
Directors: ATM Mokgokong*(Chairperson), SM Ngebulana (CEO), JA Finn, AM Mazwai*
WJ Odendaal*, NV Qangule*, KL Reynolds*, MF Rodel, TSM Seopa*, 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
www.rebosis.co.za
Date: 25/10/2012 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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