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Preliminary audited summarised consolidated results for the year ended 31 august 2013
INGENUITY PROPERTY INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Company registration number 2000/018084/06)
Share code: ING ISIN: ZAE000127411
("INGENUITY" or "the Company")
PRELIMINARY AUDITED SUMMARISED CONSOLIDATED RESULTS
FOR THE YEAR ENDED 31 AUGUST 2013
KEY FINANCIAL INDICATORS
2013 2012
R'000 R'000
Total contractual rental income 82 200 64 976
Investment property portfolio fair value 1 301 297 771 032
Growth of asset base 69% 25%
Development property 87 790 286 562
Borrowings 727 753 522 334
Loan to value ratio 52% 46%
Market capitalisation at year-end 684 718 443 130
Number of shares in issue (net of treasury shares) 736 616 773 669 616 773
Basic and diluted earnings per share 10.1 cents 9.0 cents
Headline earnings per share 2.0 cents 1.6 cents
Net asset value per share 84.0 cents 75.0 cents
PRELIMINARY SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 August 2013
2013 2012
R'000 R'000
ASSETS
Non-current assets 1 396 380 1 065 960
Investment properties 1 259 876 743 086
Straight-line lease accrual 38 845 26 853
Investment properties under development 87 790 286 562
Equipment 61 75
Loans receivable 9 808 9 384
Current assets 29 783 37 038
Trade and other receivables 5 649 3 721
Straight-line lease accrual 2 576 1 093
Tax receivable 1 105 1 557
Cash and cash equivalents 20 453 30 667
Total assets 1 426 163 1 102 998
EQUITY AND LIABILITIES
Shareholders' interest 615 094 504 654
Share capital 8 055 7 385
Share premium 361 224 321 024
Treasury shares (34 928) (34 928)
Non-distributable reserve 171 464 108 813
Share-based payment - 863
Retained earnings 102 412 94 520
Total equity attributable to equity holders of the parent 608 227 497 677
Non-controlling interest 6 867 6 977
Non-current liabilities 782 361 553 805
Borrowings 727 753 509 130
Other financial liabilities - 10 152
Deferred tax 54 608 34 523
Current liabilities 28 708 44 539
Trade and other payables 14 199 27 236
Current portion of borrowings - 13 204
Prepaid rent received 6 632 4 099
Share-based payment 6 437 -
Other financial liabilities 1 440 -
Total equity and liabilities 1 426 163 1 102 998
PRELIMINARY SUMMARISED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
for the year ended 31 August 2013
2013 2012
R'000 R'000
Revenue 95 675 71 898
- Contractual 82 200 64 976
- Straight lining 13 475 6 922
Net operating expenses (38 755) (23 242)
Profit before fair value adjustments 56 920 48 656
Fair value adjustments to investment properties 74 438 62 760
Profit before interest and taxation 131 358 111 416
Interest received 1 872 1 228
Interest paid (45 181) (34 039)
Profit before taxation 88 049 78 605
Taxation (17 471) (20 295)
Profit for the year 70 578 58 310
Attributable to:
Equity holders of the parent 70 274 58 034
Non-controlling interest 304 276
70 578 58 310
Other comprehensive income:
To be reclassified subsequently to profit or loss:
Cash flow hedges 8 711 5 197
Income tax relating to components of other comprehensive income (2 439) (1 455)
Other comprehensive income for the year, net of tax 6 272 3 742
Total comprehensive income for the year 76 850 62 052
Total comprehensive income attributable to:
Equity holders of the parent 76 546 61 776
Non-controlling interest 304 276
76 850 62 052
Basic and diluted earnings per share (cents) 10.1 9.0
COMMENTS TO THE STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
1. Headline and Diluted headline earnings per share (cents) 2.0 1.6
2. The calculation of earnings per share is based on a weighted
average number of 693 296 225 (2012: 645 573 057) shares in
issue during the year. The actual number of shares in issue
at the year-end is 805 550 000 (2012: 738 550 000).
Headline earnings are calculated as follows:
Earnings attributable to equity holders 70 274 58 034
Fair value adjustments to investment properties (74 438) (62 760)
Deferred tax on fair value adjustments 18 059 11 105
Deferred tax on change in capital gains tax rate - 4 016
13 895 10 395
STATEMENTS OF CHANGES IN EQUITY
for the year ended 31 August 2013
Group Non-
distri-
Share Share Treasury butable
capital premium shares reserve
R'000 R'000 R'000 R'000
Balance at 1 September 2011 6 585 281 824 (34 928) 65 773
Decrease in minority interest - - - -
Total comprehensive income for the year - - - 3 742
Profit for the year - - - -
Other comprehensive income - - - 3 742
Net change in fair value of cash flow hedge
recognised directly in other
comprehensive income - - - 3 742
Issue of 80 000 000 shares 800 39 200 - -
Transfer to non-distributable reserve
- fair value adjustments to properties - - - 42 496
Realisation of non-distributable reserves
- fair value adjustments realised on
properties sold - - - (3 198)
Balance at 31 August 2012 7 385 321 024 (34 928) 108 813
Group Share Non-con-
based Retained trolling Total
payments earnings interest equity
R'000 R'000 R'000 R'000
Balance at 1 September 2011 863 75 784 7 021 402 922
Decrease in minority interest - - (320) (320)
Total comprehensive income for the year - 58 034 276 62 052
Profit for the year - 58 034 276 58 310
Other comprehensive income - - - 3 742
Net change in fair value of cash flow hedge
recognised directly in other
comprehensive income - - - 3 742
Issue of 80 000 000 shares - - - 40 000
Transfer to non-distributable reserve
- fair value adjustments to properties - (42 496) - -
Realisation of non-distributable reserves
- fair value adjustments realised on
properties sold - 3 198 - -
Balance at 31 August 2012 863 94 520 6 977 504 654
Non-
distri-
Share Share Treasury butable
capital premium shares reserve
R'000 R'000 R'000 R'000
Decrease in minority interest - - - -
Total comprehensive income for the year - - - 6 272
Profit for the year - - - -
Other comprehensive income - - - 6 272
Net change in fair value of cash flow hedge
recognised directly in other
comprehensive income - - - 6 272
Issue of 67 000 000 shares 670 40 200 - -
Realisation of share based payments - - - -
Transfer to non-distributable reserve
- fair value adjustments to properties - - - 56 379
Dividend paid - one cent per share - - - -
Balance at 31 August 2013 8 055 361 224 (34 928) 171 464
Comprising:
171 464
Fair value reserve 172 543
Hedging reserve (1 079)
Share Non-con-
based Retained trolling Total
payments earnings interest equity
R'000 R'000 R'000 R'000
Decrease in minority interest - - (414) (414)
Total comprehensive income for the year - 70 274 304 76 850
Profit for the year - 70 274 304 70 578
Other comprehensive income - - - 6 272
Net change in fair value of cash flow hedge
recognised directly in other
comprehensive income - - - 6 272
Issue of 67 000 000 shares - - - 40 870
Realisation of share based payments (863) 863 - -
Transfer to non-distributable reserve
- fair value adjustments to properties - (56 379) - -
Dividend paid - one cent per share - (6 866) - (6 866)
Balance at 31 August 2013 - 102 412 6 867 615 094
PRELIMINARY SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 August 2013
2013 2012
R'000 R'000
Cash flows from operating activities
Cash generated from operations 36 689 65 595
Interest received 1 034 427
Interest paid (39 271) (34 907)
Taxation paid (627) (3 186)
Dividends paid (6 867) -
Net cash inflow from operating activities (9 042) 27 929
Cash flows from investing activities
Additions to equipment (31) (95)
Acquisitions/additions to investment properties (118 460) (123 108)
Acquisitions/additions to investment properties
under development (111 570) (126 854)
Interest capitalised to investment properties
under development (15 567) (6 453)
Proceeds on disposal of investment properties - 44 743
Prepayments for investment property acquired after year-end (2 284) -
Net cash outflow from investing activities (247 912) (211 767)
Cash flows from financing activities
Proceeds from the issue of shares 40 870 40 000
Financial liabilities raised 205 870 171 129
Net cash inflow from financing activities 246 740 211 129
Net (decrease)/increase in cash and cash equivalents (10 214) 27 291
Cash and cash equivalents at the beginning of the year 30 667 3 376
Cash and cash equivalents at the end of the year 20 453 30 667
PRELIMINARY SUMMARISED CONSOLIDATED SEGMENTAL INFORMATION
at 31 August 2013
Special
Offices Retail (Gym) Parking
2013
Additions to non-current assets 368 036 123 277 2 750 36 532
Total assets 905 794 237 614 43 750 114 139
Revenue 54 414 16 162 3 410 8 214
Profit/(Loss) before fair value adjustment 37 311 11 627 3 096 6 499
Fair value adjustment 51 879 11 279 2 781 8 499
Profit/(Loss) before interest and taxation 89 190 22 906 5 877 14 998
Interest received - - - -
Interest paid - - - -
Profit/(Loss) before taxation 89 190 22 906 5 877 14 998
Unseg- Straight
Other mental lining Total
Additions to non-current assets (330) - - 530 265
Total assets - 124 866 - 1 426 163
Revenue - - 13 475 95 675
Profit/(Loss) before fair value adjustment (250) (14 838) 13 475 56 920
Fair value adjustment - - - 74 438
Profit/(Loss) before interest and taxation (250) (14 838) 13 475 131 358
Interest received - 1 872 - 1 872
Interest paid - (45 181) - (45 181)
Profit/(Loss) before taxation (250) (58 147) 13 475 88 049
Offices Retail Industrial Gym Parking
2012
Additions to non-current assets 157 901 13 054 - 4 000 12 083
Total assets 537 758 114 337 - 50 384 77 607
Revenue 40 804 11 937 1 755 3 177 6 671
Profit/(Loss) before fair value
adjustment 30 706 9 155 1 155 2 864 5 551
Fair value adjustment 41 678 16 017 703 3 667 8 306
Profit/(Loss) before interest
and taxation 72 384 25 172 1 858 6 531 13 857
Interest received - - - - -
Interest paid - - - - -
Profit/(Loss) before taxation 72 384 25 172 1 858 6 531 13 857
Unseg- Straight
Other mental lining Total
Additions to non-current assets 94 - - 187 132
Total assets 330 322 582 - 1 102 998
Revenue 632 - 6 922 71 898
Profit/(Loss) before fair value
adjustment 286 (7 983) 6 922 48 656
Fair value adjustment (7 611) - - 62 760
Profit/(Loss) before interest
and taxation (7 325) (7 983) 6 922 111 416
Interest received - 1 228 - 1 228
Interest paid - (34 039) - (34 039)
Profit/(Loss) before taxation (7 325) (40 794) 6 922 78 605
COMMENTARY
1. PRESENTATION OF PRELIMINARY SUMMARISED CONSOLIDATED FINANCIAL RESULTS
The preliminary summarised consolidated financial results for the year ended
31 August 2013 have been prepared in accordance with the framework concepts and
the measurement and recognition requirements of International Financial Reporting
Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting
Practices Committee and the Financial Reporting Pronouncements as issued by the
Financial Reporting Standards Council. The preliminary summarised results also
contain the information required by IAS 34:Interim Financial Reporting and comply
with the Listings Requirements of the JSE Limited and the South African Companies
Act of 2008.
The accounting policies and methods of computation applied in the presentation of
the preliminary summarised results are consistent with those applied in the annual
report for the year ended 31 August 2013.The preliminary financial results should be
read in conjunction with those accounting policies. These accounting policies and
methods of computation are in terms of IFRS.
The consolidated financial statements are considered preliminary based on the JSE
Listings Requirements and are summarised from a complete set of the Group financial
statements on which the independent auditors, Mazars, has expressed an unmodified
audit opinion, which is available for inspection at the company's registered office.
This report is extracted from audited information, but is not itself audited. The
auditor's report does not necessarily report on all of the information contained in
this announcement. Shareholders are therefore advised that in order to obtain a full
understanding of the nature of the auditor's engagement they should obtain a copy of
the auditor's report together with the accompanying financial information from the
company's registered office.
The directors of Ingenuity take full responsibility for the preparation of this report
and that the financial information has been correctly extracted from the underlying
annual financial statements.
During the current year, the property portfolio valuation increased by R74.4 million
(2012: R62.8 million) as a result of the developments undertaken by the Company, as
well as the acquisition of the Dreyer Street property. The developments undertaken
by the Company have enhanced the values of the development properties and those in
the surrounding precincts owned by the Company.
2. CHAIRMAN'S REPORT
The past year has been one of significant achievement for Ingenuity. The Company has as
its strategic objective the development and acquisition of quality properties with
attractive growing income streams, focusing on the Western Cape as its core geographic
region.
The highlighted achievements during the past year have been:
DEVELOPMENTS COMPLETED
Completion of the redevelopment of Newspaper House situated in St Georges Mall,
Cape Town. Completion of the development of Atlantic Centre, situated in Culemborg,
Cape Town, this being the second phase, after the redevelopment of 33 Martin
Hammerschlag last year, of the redevelopment of this major city block assembled by the
Company.Completion of the development of Glacier Place, being the third building on the
Santam site in the Tyger Valley precinct. This property is also to become the first
4-star green rated building in the area.
Despite challenging economic circumstances these developments were all but fully let
within the first three months of the new financial period.
ACQUISITIONS INCLUDING POST-YEAR-END TRANSACTIONS
The acquisition of the Dreyer Street property in Claremont, Cape Town for R82 million.
The acquisition of a portfolio of eight prime investment properties and a 67% interest
in Insight Property Developments (Palmyra Road) Proprietary Limited for a total purchase
consideration of R863 million. Transfer of these properties took place on 10 September
2013.The acquisition of 17 Lower Long Street (R47 million), known as the SARS Building.
Transfer took place on 14 October 2013.Closure on two further properties namely Chamber
House, Cape Town (R18.5 million) and 64 White Road, Retreat (R124.5 million). Transfer
of Chamber House is expected during November 2013 and the White Road property during
April 2014.
The cumulative effect of these acquisitions will result in a core asset base exceeding
R2.3 billion.
OTHER MAJOR EVENTS
Conclusion of a successful capital-raising exercise post-year-end with major
institutional investors. A total of 156.5 million shares were issued at 80 cents per
share totalling R125.2 million in cash. The proceeds will be used to reduce debt and to
fund opportunities.
The portfolio comprises quality income-producing assets with further development upside.
The Company will continue to grow the portfolio by prudent acquisition and developments
by utilising the Executives proven skills for enhancing existing buildings and /or
undertaking new developments.
Over the past five years the Company focused on development and redevelopment of older
opportunities. The result of these activities together with the strategic acquisitions
concluded during the past years provide a solid base and defensive underpin for the
Company. This has enabled us to increase our dividend to shareholders. We are proud to
have acquired and organically grown a significant asset base that will stand us in good
stead in the future.
The board has also further recommended to convert the Company to a real estate
investment trust and aims to have this implemented during the 2014 financial year.
Our appreciation and thanks goes to the Executive Team for their dedication and
commitment to the success of the Company.
RODNEY SQUIRE-HOWE
3. GENERAL REVIEW OF OPERATIONS
Ingenuity has delivered a solid financial result for the year and, more importantly,
achieved significant growth in its core asset base. A defensive approach coupled with
prudent cost monitoring, as well as a focused letting drive, has borne fruit. The
development skills of the team have contributed materially to build a uniquely
focused Western Cape property portfolio. Our focus has been on quality deals,
leases with blue chip tenants and strong enduring cash flows.
The year ended 31 August 2013 delivered solid performance and significant inroads
have been made particularly on the development delivery with two significant projects
completed during the year. As a core activity, development will continue to add
value to the Company. During the year under review the total asset base including
development assets completed, increased in value by R331.5 million or 31%, whilst
borrowings increased as a result of borrowings taken for the Dreyer Street property
acquired and developments during the year.
Property held for development comprising two prime land opportunities remains a
major focus of management, to unlock and realise these non-income-producing assets.
Our core strategy is to remain focused in the Western Cape. This places us in a
unique position and with a competitive advantage relative to our peers. It enables
us to extract maximum value in a region where we have strong networks and an
intimate knowledge of our market.
4. BORROWINGS
The Company achieved a weighted average borrowing cost of 8.82% (2012: 9.04%).
Total borrowings at year-end amounted to R727.7 million (2012: R522.3 million) of
which R200 million is fixed at an all-inclusive rate of 10.65% until November 2013.
The balance remains floating at rates linked to prime at a weighted average rate of
7.76%. The increase in borrowings for the current year came about as a result of
the acquisition of the Dreyer Street building and borrowings on developments
completed during the year.
Total cash on hand at year-end amounted to R20.4 million (2012: R30.7 million).
Excess cash is applied to reduce borrowings or to grow the asset base where
appropriate.
The Company's gearing ratio is 52% (2012: 46%) at year-end. This is considered
acceptable considering the development nature of the Company and the fact that we
seek to maximise growth of the business through leverage of the Company's own core
asset base.
5. PROPERTY PORTFOLIO ACTIVITIES
ATLANTIC CENTRE, REEDS, 31 AND 33 MARTIN HAMMERSCHLAG WAY
The development of Atlantic Centre, which commenced in the previous financial year,
was completed during the last quarter of this year. This prime development added
11 235 square metres of attractive A-grade space to the portfolio. The total
capital expenditure incurred was R145.5 million and the resultant initial
development yield 8.3%. Lettings have gone extremely well with 76% of the building
let at year-end to blue-chip tenants on long leases.
Development of a further four floors of parking to the existing Reeds building will
begin in the first quarter of the next financial period. A total of 590 additional
bays will be added to the site with the scheme utilising 18 400 square metres of
the available bulk. The parking will serve Atlantic Centre and the adjacent
buildings that the Company already owns. A further development of prime A-grade
office space on the site is also being investigated. This will add a further
15 000 square metres of GLA to the portfolio.
As reported in events after the reporting period the last building comprising this
entire city block, namely Chamber House, was acquired for the sum of R18.5 million.
This allows us the opportunity to consolidate our focus on this prime city block
and provides the ability to extract maximum value in the years to come.
This grouping of properties remains strategically situated and represents a
significant holding of the portfolio.
SANTAM BUILDINGS 1, 2 AND GLACIER PLACE - TYGER VALLEY
The construction of the Glacier Place building was completed during the last
quarter of the financial year.
This development represents a significant milestone in Ingenuity's history, as it
is our first 4-star green-rated building. The building was completed for a total
capital cost (including tenant installations) of R178.3 million at an initial
development yield of 8.83%. The building comprises 11 223 square metres of premium-
grade office space with 573 parking bays. Prior to release of this report 100% of
the building had been let to Santam Limited, Glacier Financial Holdings Proprietary
Limited and Pioneer Foods Limited, with lease periods of 10 years for Santam and
Glacier and seven years for Pioneer.
This investment together with Santam Buildings 1 and 2 situated on the remainder
of the site represent a significant core holding of Ingenuity's portfolio.
Further upgrades of buildings 1 and 2 as well as additional parking facilities
are planned. We are also planning a state-of-the-art canteen facility to serve the
tenants in this campus-style environment.
ACQUISITIONS
During the year under review the Dreyer Street property was acquired for a total
consideration, including capitalised costs, of R82.4 million. This prime property,
situated in the heart of the Claremont CBD in the Southern Suburbs of Cape Town
and adjacent to Cavendish Square, is strategically located and is currently let to
a major national motor group. The property has further significant future
development potential.
PORTFOLIO INFORMATION
VACANCIES
Vacancies amount to 22% (2012: 14%) of the total GLA of the portfolio. The retail
space has committed leases in place commencing in the new year. The office vacancy
is largely made up of space at the new developments, Atlantic Centre and Glacier
Place, which were completed during the last quarter of the financial year. 62% of
this vacancy has leases in place commencing post-year-end thereby reducing the
overall vacancy percentage to 8%.
COST-TO-INCOME RATIOS
Gross expenses are reflected as a percentage of gross income including recoveries.
The net cost-to-revenue ratio of 16% (2012: 14%) is what the Company carries as a
landlord. These ratios are slightly up on last year due to the recent completed
developments, however remain within acceptable industry norms.
LEASE EXPIRY PROFILE
The lease expiries for the financial year 2014 equates to 3% of the total GLA, and
to 4% of revenue of the portfolio. Proactive steps are taken to renew all leases
well before expiration dates.
SECTORAL SPREAD OF THE PORTFOLIO
The portfolio is concentrated in the office and retail sectors.
GEOGRAPHICAL SPREAD OF THE PORTFOLIO
In line with our core strategy, 100% of our buildings are in the Western Cape.
6. PROSPECTS
We have noted an increased level of activity in business during the past year.
Whilst uncertainties prevail the Company remains steadfast in its course to build
a quality, enduring investment portfolio. The significant growth from completed
developments, new acquisitions made in the financial year and future expansion
opportunities planned, will bear fruits to shareholders.
7. RELATED PARTY TRANSACTIONS
During the year the group paid collection commission of R1.393 million (2012:
R1.099 million) to Rabie Property Administrators Proprietary Limited and professional
architects fees of R878 000 (2012: R4.394 million) to Fabian Architects.
During the year the group paid executive directors' remuneration of R4.310 million
(2012: R4.498 million) and non-executive directors' remuneration of R550 000 (2012:
R525 000).
Charges of R6.437 million were expensed in profit and loss as a result of cash-settled
share based payments.
8. DIVIDENDS TO SHAREHOLDERS
In respect of the current year reserves, the Board of directors have declared a
cash dividend of 1.5 cent (2012: 1 cent) per share, to be paid to shareholders
who are registered on the record date of 13 December 2013. The total estimated
dividend to be paid by the Company is R15.658 million (2012: R7.385 million).
The dividend has been declared from income reserves and no Secondary Tax on
Companies credits have been used. A dividend withholding tax of 15% will be
applicable to all shareholders who are not exempt.
Company tax reference number 9635/047/14/6
Gross cash dividends per share 1.5 cent
Net cash dividend amount per share 1.275 cents
Issued number of shares 1 043 858 432
Declaration date Friday, 22 November 2013
Last day to trade cum dividend Friday, 6 December 2013
First day to trade ex dividend Monday, 9 December 2013
Record date Friday, 13 December 2013
Payment date Tuesday, 17 December 2013
Shares may not be dematerialised or rematerialised between Monday, 9 December 2013
and Friday, 13 December 2013, both days inclusive.
The directors have performed the required liquidity and solvency tests required by
the Companies Act of South Africa 2008.
9. CAPITAL COMMITMENTS AUTHORISED
Authorised and contracted for commitments amount to R1 150 million
(2012: R217 million) at year-end. The commitments include commitments for the
acquisition of properties and commitments for the construction of parking garages
which will be financed from existing cash resources, finance facilities and the
issue of shares.
10.SHARE CAPITAL
During the year 67 million (2012: 80 million) shares were issued in terms of a
vendor placement, at R0.61 (2012: R0.50) per share, to fund part of the purchase
price of Dreyer Street and Main Road, Claremont (2012: Newspaper House).
11.BUSINESS COMBINATIONS
A business combination was entered into subsequent to year-end. The company acquired
67% of the shares in Insight Property Developers (Palmyra Road) Proprietary Limited
on 10 September 2013.
Purchase consideration and fair value of assets acquired: R'000
Investment property 64 645
Non-current borrowings (11 113)
Fair value of assets acquired 53 532
Non-controlling interest (10 220)
Goodwill on acquisition -
Total purchase consideration 43 312
Purchase considerations settled by borrowings (43 312)
Purchase consideration settled in cash -
The revenue and profit or loss of the acquisition for the current reporting period
as though the acquisition date for all business combinations that occurered during
the year had been as at the beginning of the annual reporting period:
Revenue 7 541
Profit for the year 14 184
Non-controlling interests were measured at the group's proportionate share of the fair
value of the assets acquired. Management is in the process of finalising the
at-acquisition financial statements and the figures presented are still therefore
subject to change.
12.EVENTS AFTER THE REPORTING PERIOD
The registration of transfer of eight properties and a 67% interest in Insight
Property Developers (Palmyra Road) Proprietary Limited from the sellers as detailed
in the Circular to Ingenuity Shareholders issued on 14 June 2013, took place on
10 September 2013. The final adjusted cost was R863 million and was financed by the
issuing of 233 602 550 shares at 85 cents each and the balance by way of borrowings
and internal cash resources.
The registration of transfer of 17 Lower Long Street, being erf 162 Roggebaai and
known as the SARS building, took place on 14 October 2013 at a cost of R47 million
and was financed by the issuing of 4 705 882 shares at 85 cents each and the balance
by way of borrowings and internal cash resources.
The Company acquired Chamber House, being erf 31 Roggebaai and situated at
19 Louis Gradner Street, Foreshore for R18.5 million with registration of transfer
expected during November 2013. This is to be funded by borrowings of R12 million
and the balance by way of internal cash resources.
The Company has also entered into an agreement to acquire the rental enterprise,
including the property, of erf 127260 Cape Town and situated at 64 White Road,
Retreat for R124.5 million. Registration of transfer is expected to be on or about
1 April 2014. The acquisition is to be funded by borrowings of R65 million and the
balance by way of a vendor placement of shares and internal cash resources.
On 1 November 2013 the Company issued a total of 156 500 000 shares for cash, in
terms of a general authority to issue shares for cash as approved by shareholders
at the annual general meeting held on 25 January 2013. The shares were issued at a
price of R0.80 per share and were placed with public shareholders as defined in the
JSE Listings Requirements. The proceeds of the cash issue have been used to reduce
existing borrowings and to fund future growth opportunities.
Loan agreements were entered into with Nedbank Limited subsequent to year-end at
rates linked to prime for the acquisition of the above-mentioned properties. The
loan covenants applicable to all loans have been amended as a result of the loan
agreements entered into with Nedbank Limited. The loan covenants include that the
interest cover ratio shall not drop below 1.3 times for the financial year ending
2014, 1.4 times for the financial years ending 2015 and 2016; and 1.5 times for the
financial years ending 2017 and 2018. The loan covenants include that interest-
bearing debt as a percentage of the value of the total assets shall not exceed 65%
for the financial year ending 2014 and 60% for the financial years ending 2015, 2016,
2017 and 2018.
Other than as mentioned above, there are no other material reportable events after
the reporting period which have occurred since the end of the financial year being
reported on and the date of this report.
For and on behalf of the board
ARNOLD AARON MARESKY MARK WAGENHEIM
Chief Executive Officer Chief Financial Officer
Cape Town
12 November 2013
PREPARER OF THE PRELIMINARY SUMMARISED CONSOLIDATED RESULTS
In compliance with the disclosure requirements of the Companies Act 71 of 2008,
these preliminary summarised consolidated results have been prepared by the
Chief Financial Officer, Mr M Wagenheim B.Com (Hons), CTA, CA (SA).
Directors: RC Squire-Howe (Chairman)*, AJ Branch* (British), J Bielich,
LH Cohen*, DB Fabian*, AA Maresky (CEO), RS Schur*, M Wagenheim
* non-executive
Company secretary: M Wagenheim
Registered office:
Suite 102, 1st Floor INTABA, 25 Protea Road, Claremont, Cape Town, 7708.
Postal address:
Suite 102, 1st Floor INTABA, 25 Protea Road, Claremont, Cape Town, 7708.
Contact details: tel: 021 674 5170 fax: 021 674 5135.
e-mail: info@ingenuityproperty.com
www.ingenuityproperty.com
Transfer secretaries:
Computershare Investor Services Proprietary Limited
70 Marshall Street, Johannesburg, 2001.
(PO Box 61051, Marshalltown, 2107)
Bank:
ABSA Bank Limited, 1st Floor Tijgerpark IV Building,
Willie van Schoor Drive, Tyger Valley, Bellville, 7530.
(PO Box 4453, Tyger Valley, 7536)
Investment bank and Sponsor:
Nedbank Capital, a division of Nedbank Limited
3rd Floor, Corporate Place, Nedbank Sandton,
135 Rivonia Road, Sandton, 2196.
(PO Box 1144, Johannesburg, 2000)
Auditors:
Mazars, Mazars House, Rialto Road, Grand Moorings Precinct, Century City,
Cape Town, 7441.
(PO Box 2785, Cape Town, 8000)
Attorneys:
Edward Nathan Sonnenbergs Inc., 1 North Wharf Square, Loop Street,
Cape Town, 8001.
(PO Box 2293, Cape Town, 8000)
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