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Condensed unaudited consolidated interim financial statements for the 6 months ended 31 December 2012
Ascension Properties Limited
(formerly Grey Jade Trade and Invest 85 (Proprietary) Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 2006/026141/06)
(A-linked units: JSE Code: AIA ISIN: ZAE000161881)
(B-linked units: JSE Code: AIB ISIN: ZAE000161899)
(“Ascension” or “the company” or “the group”)
Condensed unaudited consolidated interim financial statements
for the 6 months ended 31 December 2012
Directors’ commentary
Introduction
Ascension is a black managed and substantially black owned
property loan stock company that listed on the JSE on 11 June
2012. The company is a property income fund focusing on centrally
located commercial office buildings in South Africa with a strong
focus towards government and other empowerment sensitive tenants.
A direct comparison to the previous reporting period, being the
results for the 6 months ended 31 December 2011 (prior to listing)
is not as meaningful as a comparison to the forecast results as
previously published by the company on 29 June 2012.
Distributions
The company achieved distributions of 19 cents per A-linked unit
and 8.45 cents per B-linked unit for the 6 months ended 31
December 2012. These results are in line with our expectations and
forecast and we remain on track to meet our forecast distributions
for the full year ending 30 June 2013.
The company paid a special distribution of 17.91 cents per A-
linked unit and 9.65 cents per B-linked unit on 3 December 2012.
This included 2.08 cents per A-linked unit for the period from
listing on 11 June 2012 to 30 June 2012 and 2.63 per B-linked unit
from pre-listing to 30 June 2012. As set out in note 6 below the
company will pay a further interim distribution of 3.17 cents per
A-linked unit and 1.43 cents per B-linked unit on 4 March 2013,
taking the distributions for the 6 month period under review to 19
cents per A-linked unit and 8.45 cents per B-linked unit.
Assuming current market prices as the exit prices for A and B-
linked units, and taking into account distributions to 4 March
2013, Ascension unitholders have achieved total annualised returns
since listing of 25% on the A-linked units and 41% on the B-linked
units.
Unit structure
The company has a dual linked unit structure consisting of A-
linked units and B-linked units. The A-linked unit has a
preferential right to distributions that escalate with 5% per
annum for the first five years and the lower of 5% and inflation
thereafter. The B-linked units are entitled to the residual
distributable income after the distribution on the A-linked units
has been paid.
The company has 176.9 million A-linked units and 347.5 million B-
linked units in issue - (31 December 2012: 176.9 million A-linked
units and 340.5 million B-linked units).
Property acquisitions
During the 6 months ended December 2012 the company completed the
transfer of 16 acquisition properties valued at R1,5 billion,
including 6 properties acquired from Capital Property Fund with
effect from 1 December 2012 valued at R989 million. The Capital
portfolio is classified as 59% A-grade and 41% B-grade. The Swiss
House acquisition has been completed at R66 million and transfer
is underway.
The impact of delays in the transfer of certain properties was
negated by the 50 basis points reduction in interest rates of bank
debt.
Property re-developments
Total gross-lettable-area (“GLA”) at 31 December 2012 was 197
173m² of which 3 properties totalling 25 048m² was under
development for government tenants. These redevelopments are
expected to be completed during March 2013.
Vacancies
At 31 December 2012 vacancies were 8.8% of total GLA, compared to
6,6% as at 30 June 2012.
Borrowings
The company has total interest bearing borrowings of R945 million
at a blended average rate of 7.69%. Of this 51% has been fixed
for 3 years at 7.42% to December 2015 with the remainder at
floating interest rates.
Prospects
The focus in the first quarter of 2013 will be on bedding down
recent acquisitions. The acquisition pipeline remains healthy and
Ascension remains on track to deliver on its portfolio growth
strategy.
The board is confident of delivering in line with its full-year
forecast of 38 cents per A-linked unit and 18.71 cents per B-
linked unit. All assumptions, notes, explanatory statements and
guidance to the forecasts are as stated in the announcement
released on SENS on 29 June 2012 and in the pre-listing statement
issued on 31 May 2012 remain unchanged. The aforegoing forecast
statements and forecasts underlying such statements are the
responsibility of the board of Ascension and have not been
reviewed or reported on by the company’s external auditors.
Consolidated statement of comprehensive income for the 6 months
ended 31 December 2012
Unaudited Audited Unaudited
31-Dec-12 30-Jun-12 31-Dec-11
6 months 6 months 6 months
R’000 R’000 R’000
Revenue 77 891 40 054 30 988
Contractual rentals and
tenant recoveries 71 849 34 738 27 935
Straight-line of lease
income adjustment 6 042 5 316 3 053
Property operating expenses (22 261) (14 744) (12 908)
Net property and related
income 55 630 25 310 18 080
Sundry income - 83 3
Asset management fees (1 656) (1 619) -
Overhead expenses (1 556) (986) (2 507)
Operating profit 52 418 22 788 15 576
Fair value adjustments (6 042) 51 053 44 152
- due to straight-lining of
leases (6 042) (5 316) (5 270)
- due to amortisation of
upfront lease costs - (396) -
- due to change in fair
value of
investment properties - 56 765 49 422
Listing expenses - (11 395) -
Participation right - - (5 458)
Finance income 4 070 984 197
Interest received 2 200 984 197
Interest on linked units
issued cum distribution 1 870 - -
Amortisation of debenture
discount (353) (38) -
Finance cost (8 531) (10 199) (9 279)
Amortisation of bond raising
fees (684) (111) -
Interest on non-current
borrowings (7 847) (10 088) (9 279)
Net profit before debenture
interest 41 562 53 193 45 188
Debenture interest (42 599) (8 368) -
Interest on A-debentures (18 291) (1 383) -
Interest on B-debentures (24 308) (6 985) -
Net (loss)/ profit before
tax for
the period (1 037) 44 825 45 188
Tax expense 760 (14 424) (5 538)
Deferred taxation 760 (14 424) (5 538)
Net (loss)/ profit after tax
and total comprehensive
(loss) / income for the
period (277) 30 401 39 650
Reconciliation between earnings, headline earnings and
distributable earnings
Unaudited Audited Unaudited
31-Dec-12 30-Jun-12 31-Dec-11
6 months 6 months 6 months
R’000 R’000 R’000
(Loss)/ Profit for the period (277) 30 401 39 650
Adjusted for:
Debenture interest 42 599 8 368 -
Earnings 42 322 38 769 39 650
Adjusted for:
Amortisation of discount on
debentures 353 38
Net fair value gain on
revaluation of investment
properties 5 282 (36 629) (43 884)
Headline earnings/ (loss) 47 957 2 178 (4 234)
Adjusted for:
Listing expenses - 11 395 -
Straight-line of lease income (6 042) (5 316) (3 053)
adjustment
Amortisation of bond raising
fees 684 111 -
Distributable earnings (linked
units) 42 599 8 368 (7 287)
Less: distribution declared (42 599) (8 368) -
Interest on A-debentures (18 291) (1 383) -
Interest on B-debentures (24 308) (6 985) -
Earnings not distributed - - -
Basic and fully diluted (loss)/
earnings per share (cents) (0.08) 83.81 Note 1
Basic and fully diluted
headline earnings/ (loss) per
share (cents) 1.54 (17.07) Note 1
Basic and fully diluted
earnings per A-linked unit
(cents) 23.49 102.84 -
Basic and fully diluted
earnings per B-linked unit
(cents) 8.88 107.89 -
Headline- and fully diluted
headline earnings per A-linked
unit (cents) 25.10 1.96 -
Headline- and fully diluted
headline earnings per B-linked
unit (cents) 10.49 7.01 -
Distribution per A- and B-
linked units
Distribution per A-linked unit
(cents) 19.00 2.08 -
Distribution per B-linked unit
(cents) 8.45 2.63 -
Number of A-linked units in 176 931
issue 082 66 500 000 -
Number of B-linked units in 340 473 265 387
issue 165 231 -
Weighted average number of A- 77 607
linked units in issue 889 7 267 760 -
Weighted average number of B- 271 370
linked units in issue 489 29 004 069 -
Note 1: There were no linked units in issue in the period to 31
December 2011 but 100 B-ordinary shares. For the six months to 31
December 2011 the basic and fully diluted earnings per share was
R396 500 and the basic and fully diluted headline loss per share
was R42 340.
Consolidated statement of cash flows for the
6 months ended 31 December 2012
Unaudited Audited Unaudited
31-Dec-12 30-Jun-12 31-Dec-11
6 months 6 months 6 months
R’000 R’000 R’000
Cash flow from operating
activities
Cash generated from
operations 32 487 15 932 131 625
Finance income 4 070 983 256
Finance costs (7 847) (10 236) (25 083)
Distributions to linked
unitholders (40 401) - -
Net cash flow from operating
activities (11 691) 6 679 106 798
Cash flow from investing
activities
Purchase of investment
properties and cost of
improvements (1 543 651) (154 296) (109 286)
Net cash outflow from
investing
activities (1 543 651) (154 296) (109 286)
Cash generated form
financing activities
Proceeds from the issue of
linked units 594 448 359 226 -
Net proceeds from/
(repayment of) interest
bearing loans 763 452 (35 347) 16 046
Proceeds from shareholder
loans - - 12 504
Net cash inflow from
financing activities 1 357 900 323 879 28 550
Net change in cash and cash
equivalents for the period (197 442) 176 262 26 062
Cash and cash equivalents at
the beginning of the period 202 335 26 073 11
Cash and cash equivalents at
the end of the period 4 893 202 335 26 073
Consolidated statement of financial position at
31 December 2012
Unaudited Audited Audited
31-Dec-12 30-Jun-12 31-Dec-11
Notes R’000 R’000 R’000
Assets
Non-current assets 2 142 154 598 530 388 248
Investment properties 1 851 170 518 277 339 988
Straight-line of lease
income adjustment 25 175 18 827 13 512
Unamortised upfront
lease costs 956 396 -
Fair value of
investment properties 1 877 301 537 500 353 500
Properties under
development 264 767 60 917 34 608
Property, plant and
equipment 86 113 140
Current assets 33 070 213 451 36 511
Trade and other
receivables 3 24 651 10 227 10 438
Other current assets 3 526 889 -
Cash and cash
equivalents 4 893 202 335 26 073
Investment property
held for sale 8 000 8 000 8 000
Total assets 2 183 224 819 981 432 759
Equity and liabilities
Equity 325 332 208 363 71 512
Stated capital 223 697 106 451 -
Retained income 101 635 101 912 71 512
Non-current liabilities
- Debentures 858 380 380 823 -
Linked unitholders’
interest 1 183 712 589 186 71 512
Other non-current
liabilities 964 487 213 760 17 068
Interest bearing
liabilities 2 933 754 182 268 -
Deferred taxation 30 733 31 492 17 068
Current liabilities 35 025 17 035 344 179
Loans from shareholders - - 117 010
Interest bearing
liabilities 2 11 989 23 217 638
Trade and other 12 470 8 644 9 531
payables
Linked unitholders
accrued interest 10 566 8 368 -
Total equity and
liabilities 2 183 224 819 981 432 759
NAV per A-linked unit
(cents) 423.4 396.6 N/A
NAV per B-linked unit
(cents) 130.8 125.3 N/A
NAV per A-linked unit
(excluding
deferred taxation)
(cents) 423.4 396.6 N/A
NAV per B-linked unit
(excluding
deferred taxation)
(cents) 139.8 137.1 N/A
Consolidated statement of changes in equity for the 6 months ended
31 December 2012
Stated Retained Total
capital income equity
Balance at 31 December 2011
(audited) - 71 511 71 511
Issue of linked units 106 451 - 106 451
Total comprehensive income for
the period - 30 401 30 401
Balance at 30 June 2012 (audited) 106 451 101 912 208 363
Issue of linked units 117 246 - 117 246
Total comprehensive income for
the period - (277) (277)
Balance at 31 December 2012
(unaudited) 223 697 101 635 325 332
Notes
1. Basis of preparation and accounting policies
The unaudited condensed consolidated interim financial statements
of Ascension have been prepared in accordance with International
Financial Reporting Standards (“IFRS”) including IAS 34: Interim
Financial Reporting, the AC500 standards as issued by the
Accounting Practices Board or its successor, the South African
Companies Act, 2008 and in compliance with the Listings
Requirements of the JSE Limited.
This report has been compiled under the supervision of Henry
Dednam CA(SA), the financial director of Ascension.
The accounting policies are consistent with those applied in the
prior periods.
Grant Thornton, the company’s external auditor, has not reviewed
or audited the financial information set out in this report.
2. Non current borrowings
Borrowings expiry profile R’000
December 2013 11 966
December 2014 -
December 2015 933 777
Total borrowings 945 743
3. Trade and other receivables
R’000 R’000
31-Dec-12 30-Jun-12
Trade receivables 16 781 3 795
Amounts due on acquisition adjustment
accounts 9 651 -
Government tenants 2 316 3 009
Non-government tenants 4 814 786
Deposits 1 127 555
Sundry debtors and prepayments 3 416 3 794
VAT refund receivable 3 327 2 083
Total trade and other receivables 24 651 10 227
4. Property details
4.1 Lease expiry profile
Based on GLA
including development
property on
Based on GLA completion
Vacant 8.8% 9.0%
December 2013 19.6% 16.5%
December 2014 24.6% 20.7%
December 2015 22.5% 19.0%
December 2016 1.6% 1.4%
December 2017 0.7% 0.5%
> December 2018 22.2% 32.9%
Total 100.0% 100.0%
4.2. Tenants: Government
vs. non-government
Government* 59.7% 66.0%
Non-government 40.3% 34.0%
Total 100.0% 100.0%
* Includes national, provincial and local government as well as
parastatals including Telkom and the Post Office.
4.3. Building Profile
Based on GLA
including development
property on
Based on GLA completion
A-grade 29.1% 30.1%
B-grade 69.7% 68.9%
C-grade 1.2% 1.0%
Total 100.0% 100.0%
5. Operating segments
The group classifies segments based on the type of property i.e.
Commercial, Retail, Industrial and Other. Properties can be mixed
use properties. In this instance the property will be classified
according to its principle use. Accordingly, the group only has
one reporting segment, namely Commercial property as the principle
use of all properties in the portfolio is for commercial office
space. Most of the buildings do have a small retail component
(normally at street level), but seldom exceeds 10% of the total
GLA per building.
6. Payment of second interim distribution
The board has approved and hereby give notice of a cash second
interim distribution of 3.17 cents per A-linked unit and 1.43
cents per B-linked unit in respect of the period from 1 December
2012 to 31 December 2012. This distribution is not subject to
dividend withholding tax.
The last date to trade in linked units cum distribution will be
Friday, 22 February 2013 and trading will commence ex distribution
on Monday, 25 February 2013. The record date to participate in
the distribution will be Friday, 1 March 2013.
Linked unit certificates may not be dematerialised or
rematerialised between Monday, 25 February 2013 and Friday, 1
March 2013, both days inclusive.
Payment of the distributions will be made to linked unit holders
on Monday, 4 March 2013. In respect of dematerialised linked
unitholders, the distribution will be transferred to the Central
Securities Depository Participant accounts/ broker accounts on
Monday, 4 March 2013. Certificated linked unitholders’
distribution payments will be posted on or about Monday, 4 March
2013.
Special
distribu Interim
tion distri-
in bution in
respect respect Total Distri-
of the of the distri- bution
period period bution for
Reconciliati from 1 from 1 for the 6 period
on of July to December months prior to Total
distribution 30 to 31 ended 31 1 July distri-
s per unit November December December 2012 bution
(cents) 2012 2012 2012 accrued paid
A-linked
units 15.83 3.17 19.00 2.08 21.08
B-linked
units 7.02 1.43 8.45 2.63 11.08
Directors
AC Nissen (chairman) # / AM Mohamed (CEO) * / SL Rai * / FW
Arendse * / HB Dednam (FD) * / J de Villiers (alternate to SL Rai)
* / M Burton # / B Bayvel # / H Takolia #
* executive director # independent non-executive
Company secretary J de Villiers
Business address 5th Floor, 14 Long Street, Cape Town, 8001
Transfer secretaries Computershare Investor Services
Proprietary Limited, 70 Marshall Street,
Johannesburg, 2001
Sponsor Java Capital, 2 Arnold Road, Rosebank,
2196
8 February 2013
Date: 08/02/2013 05:14:00 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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