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INGENUITY PROPERTY INVESTMENTS LTD - Preliminary audited summarised consolidated results for the year ended 31 august 2013

Release Date: 14/11/2013 15:00
Code(s): ING     PDF:  
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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)


Date: 14/11/2013 03:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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