Wrap Text
Unaudited condensed interim results for the six months ended 30 September 2013
Vukile Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/027194/06)
JSE Share code: VKE ISIN: ZAE000056370
NSX Share code: VKN
(Granted REIT Status with the JSE)
(“Vukile” or “the group”)
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS
for the six months ended 30 September 2013
Highlights
* First half increase of 5% in normalised distribution off a base of 52.2 cents per linked unit.
* Successful completion of one of the most significant empowerment transactions in the
listed property sector.
* Successful re-launch of the revamped Randburg Square Shopping Centre.
* Continued strong operational performance of the property portfolio.
* Improved portfolio composition:
- Acquisition of 50% of East Rand Mall for R1.1 billion
- Acquired R1.0 billion Sovereign Tenant Portfolio from Encha;
- Realised R287 million on sales of higher risk properties;
* Special distribution of 13.83 cents per linked unit.
COMMENTS
1. Nature of operations
The group is a long-term investor in commercial properties with strong contractual
cash flows for long-term sustainability and capital appreciation.
2. Basis of preparation
The unaudited condensed consolidated interim financial statements (“interim
financial statements”) for the six months ended 30 September 2013, and
comparative information, have been prepared in accordance with and containing the
information required by IAS 34 (Interim Financial Reporting), International Financial
Reporting Standards (“IFRS”), the SAICA Financial Reporting Guides as issued by
the Accounting Practices Committee and Financial Reporting Announcements as
issued by the Financial Reporting Standards Council, the JSE Listings
Requirements and relevant sections of the South African Companies Act. Except
for the new standards adopted as set out below, all accounting policies applied by
the group in the preparation of these condensed consolidated interim financial
statements are consistent with those applied by the group in its consolidated
financial statements as at and for the year ended 31 March 2013. The group has
adopted the following new standards:
- Amendment to IFRS 7 – Disclosures – Offsetting Financial Assets and Financial
Liabilities
- IFRS 10 – Consolidated Financial Statements
- IFRS 11 – Joint Arrangements
- IFRS 12 – Disclosure of Interests in Other Entities
- IFRS 13 – Fair Value Measurement
- Amendments to IAS 1 – Presentation of Items of Other Comprehensive Income
- Revised IAS 27 and 28 – Investments in Associates and Joint Ventures
There was no material impact on the interim financial statements identified based
on management’s assessment of these standards.
The interim financial statements have been approved for issue by the board of
directors on 25 November 2013. The preparation of the financial results for the six
months ended 30 September 2013 was supervised by Michael Potts, CA (SA),
financial director.
3. Significant event and transactions
During this reporting period, the following significant transactions were effected:
1. The acquisition of the R1.04 billion Encha Sovereign Tenant Portfolio
(“Sovereign portfolio”) – as further set out in paragraph 8 below;
2. The raising of debt facilities of R900 million to facilitate the acquisition of the
Sovereign portfolio and other properties – as further set out in paragraph 5
below; and
3. The refinancing of R75 million commercial paper – as further set out in
paragraph 5 below.
4. Summary of Financial Performance
The directors of Vukile are pleased to report that the normalised distribution for the
six months ended 30 September 2013 has increased by 5.0% to 54.81 cents per
linked unit (normalised prior period : 52.20 cents per linked unit).
The group’s net profit available for distribution amounted to R343.8 million for the
six months to 30 September 2013 (R268.5 million – September 2012), which
represents an increase of 28% over the comparable period.
Summary of financial performance:
September September March
2013 2012 2013
Net asset value per linked unit (cents) 1 535 1 263 1 369
Normalised distribution per linked unit (cents) 54.81 52.20 120.44
Special/non-recurring distribution (cents) 13.83 4.83 11.15
Total distribution (cents) 68.64 57.03 131.59
Loan to value ratio 32.8% 29.2% 33.5%
A simplified Income Statement (which is not IFRS compliant) is set out below:
GROUP
Sep-13 Sep-12 Para %
R000 R000 ref variance
Gross rental income and recoveries 657 365 574 139 14.5
Property expenses (250 453) (228 099) 9.8
Net profit from property operations 406 912 346 040 a) 17.6
Asset management business 58 870 45 295 b) 30.0
Asset management fees 11 479 15 889 (27.8)
Sales commission 66 993 43 793 53.0
Expenditure (19 602) (14 387) 36.2
Corporate administrative expenses (17 522) (14 510) c) 20.8
Finance costs net of investment income (98 382) (92 260) d) 6.6
Loss on sale of furniture, fittings and
computer equipment (5) - >-100
Tax (6 070) (16 031) e) (62.1)
Distributable income 343 803 268 534 28.0
a) Net profit from property operations
? The property portfolio has performed in line with expectations for the six months
ended 30 September 2013, in a difficult economic environment.
? The group’s net profit from property operations, exclusive of straight-line rental
accruals, has increased by 17.6% over the comparable period, from
R346.0 million to R406.9 million. This percentage increase is made up as
follows:
- On a like-for-like (stable portfolio) basis - 8.1%
- New property acquisitions contributed - 16.7%
- Less: Sales of non-core properties - (7.2%)(1)
17.6%
(1)
The sale of non-core properties has had the effect of reducing gross income
by R25 million over the comparable period, partially offset by income generated
from re-investment of the proceeds thereof.
Further details of the property portfolio performance are set out in paragraph 9.
Impairment allowance for tenant receivables
The allowance for the impairment of receivables decreased from R13.7 million at
31 March 2013 to R12.0 million at 30 September 2013 which is considered
adequate at this stage. The impairment allowance is expected to approximate 1%
of gross rental income for the year ending 31 March 2014, which is in line with
previous impairment allowances. A summary of the movement in the impairment
allowance of trade receivables is set out below.
R000
Impairment allowance 1 April 2013 13 653
Allowance for receivable impairment for the year 93
Receivables written off as uncollectable (1 795)
Impairment allowance 30 September 2013 11 951
Bad debt write-off per the statement of comprehensive income 4 183
b) Asset management business
Asset management fee income is 28% lower than the comparable period following
the disposal of the R2.2 billion East Rand Mall in April 2013, which has led to a
lower base of c.R6.9 billion on which to calculate on-going recurring asset
management fees. Sales commission has increased by 53% over the comparable
period following the sale of East Rand Mall. Asset management expenditure has
increased by 36% over the comparable period primarily as a result of an increase in
a short-term incentive accrual of R3.2 million. This bonus will only become payable
if certain performance targets are achieved at the year-end. The amortisation of the
long-term share incentive scheme has increased by R0.9 million over the prior year
due to additional allocations in July 2013 in respect of the Conditional Unit Plan
Scheme.
Asset management fees now only comprise c.2% of total revenue.
c) Corporate administrative expenditure
Corporate administration expenses have increased by 21% over the comparable
period mainly as a result of an increase of R3.1 million in a short-term incentive
bonus provision. As set out above the short-term incentive bonus will only become
payable if certain performance targets are achieved at year-end.
d) Finance costs net of investment income
Net finance costs have increased by R6.1 million over the comparable period.
Additional interest on R550 million debt raised to partly finance the acquisition of
East Rand Mall for R1.1 billion together with interest on the Encha acquisition
contributed an additional interest charge of R26 million, offset by lower finance
costs following the repayment of R76 million of revolving loans and also offset by
additional interest income earned:
- on the R400 million issue of equity in May 2013;
- on the R66 million equity raised from the distribution re-investment plan in
June 2013;
- from property sales which realised R287 million; and
- antecedent divestiture income accrued of R13.7 million.
e) Taxation
The first half tax accrual is 62% lower than the comparable period due to
distributions comprising varying percentages of profit available for distribution for
the two periods. At year end it is anticipated that 100% of profits available for
distribution will be distributed, thereby minimising the actual normal tax payable by
the company. The bulk of the normal tax payable arises in the Namibian
subsidiaries.
5. Borrowings
During September 2013, R75 million of six month commercial paper was
successfully refinanced with the issue of new twelve month commercial paper at a
margin of 60 bps above 3-month JIBAR.
A R400 million facility was entered into with Standard Bank to partly finance the
R1.04 billion acquisition of Encha portfolio:
The facility comprises the following:
Rm
- 3 year term debt - 160
- 3 year revolving loan - 40
- 5 year term debt - 160
- 5 year revolving loan - 40
The 3 year and 5 year term loans of R160 million each have been hedged at swap
rates of 6.48% and 7.10% respectively.
The all-in weighted average cost of the Standard Bank facility, including swap costs,
margins and amortised debt raising fees, equates to 8.0%.
A R500 million development facility has been concluded with Nedbank as follows:
- Term loan : R250 million at JIBAR plus 163 bps;
- Revolving loan : R250 million at prime overdraft rates less 180 bps.
The facility expires on 31 December 2014.
This facility was raised in order to finance the development of Lethlabile Mall and
Linbro Park and to part finance the acquisition of Edendale Mall.
92.8% of debt at 30 September 2013 has been hedged by way of fixed loans or
interest rate swaps. The current all-in cost of finance, including margins and
amortised debt raising fees, is 8.1%. The LTV ratio at 30 September 2013 equates
to 32.8%. Swaps, constituting R401 million or 39% of swaps maturing by mid-
year 2015, have been extended to mature in October 2018, at an additional swap
cost of 35 bps.
6. Financing of the acquisition of the Sovereign portfolio
The acquisition of the Sovereign portfolio has been financed as follows:
R’000
Purchase price 1 044 764
Equity issued to Encha shareholders on
4 October 2013 (22.839 million Vukile units @ R15.5873 per linked 356 000
unit
Standard Bank facilities utilised 3 year term loan 160 000
3 year revolving loan 40 000
5 year term loan 24 550
5 year revolving loan 40 000
RMB facilities utilised 3 year term loan 150 000
3 year revolving loan 118 214
532 764
Surplus cash resources arising on property sales 125 000
Total 1 013 764
Shortfall – Note 1 31 000
Note 1 : This amount will be settled by way of an equity issue and/or cash once
Encha has finalised the adjustment accounts.
The weighted average all-in cost of finance for the above debt raised of
R532.8 million is 7.71%.
The weighted average cost of capital (“WACC”) for this transaction equates to
7.54% against a yield of 9.5% and is, therefore, significantly earnings accretive.
7. Debt repayment profile
The Group’s debt repayment profile is set out below:
The Group’s debt repayment profile percentages are as follows: 2014 - 17.1%,
2015 – 23.9%, 2016 – 22.2%, 2017 – 16.8%, 2018 – 11.8%, 2019 – 8.2%. The
repayment profile complies with the company’s strategy of ensuring that no more
than 25% of debt should expire in any one year.
8. Developments, Acquisitions and Sales
Encha Sovereign Tenant portfolio acquisition
As part of Vukile’s transformation strategy, the company concluded a unique and
commercially driven transaction with Encha Properties to acquire four
predominantly national government-tenanted properties for R1.04 billion, at a yield
of 9.5%. The Pretoria Momentum building is under option and will increase the total
acquisition price to c.R1.4 billion if exercised.
Hammarsdale Junction
The Hammarsdale Junction shopping centre measuring 19 400m² and anchored by
Pick n Pay, Super Spar and Mr Price, opened in June 2013. The Centre is located
within the Mpumalanga Township in KwaZulu-Natal. The national tenant
component is approximately 81%. The average monthly foot count since opening
has been 450 000. Permanent job opportunities for approximately 450 people were
created. Tenants have indicated that trading to date has been in line with
expectations.
The final anticipated capital expenditure is R198 million at an initial yield of 9.5%,
under pinned by a one year gross income guarantee.
Mini factory/warehousing complex Linbro Park
Stratford Property Ventures has commenced with the development of a 15 000m²
mini factory/warehousing complex at Linbro Park, one of Johannesburg’s prime
industrial areas. The development will be incorporated into Linbro Business Park,
firmly established as a desirable business address, which enjoys excellent
accessibility to the N3 and Sandton CBD via Marlboro Road while offering the
added benefit of being located approximately three kilometres from the Gautrain
Marlboro Station. The development will comprise 22 units with a wide variety of unit
sizes ranging from 350m² to 1 870m². The anticipated capital expenditure is
R123.5 million, at an initial yield of 10.0% which is underpinned by a one year rental
guarantee. The completion date for this development is July 2014.
Lethlabile Mall, North West Province
The Lethlabile Mall is being developed at a capital outlay of R194.2 million and a
yield of 9.2%. The centre with a GLA of 17 600m², is situated in Lethlabile about 30
kilometres north of Brits in the North West Province. Shoprite is the food anchor
and other national tenants include Pep Stores, Ackermans, Mr Price, Jet Stores,
Dunns, Capitec and Nedbank. The national component will comprise approximately
85% of the GLA of 17 600m². The project is currently progressing well and on
course for the anticipated completion date of April 2014.
Joint Venture with the McCormick Group
50% interest in Edendale Mall
The acquisition of a 50% interest in Edendale Mall, Pietermaritzburg, a 31 700m²
retail centre, has been further delayed pending the resolution of the structure in
which Vukile will hold its title. Once resolved, the mall will be a good fit for the
portfolio. The mall is enclosed, has good visibility, accessibility, adequate parking
and taxi facilities. Further, the mall has a strong tenant mix comprising national,
franchise and regional brands. The node is further strengthened by the close
proximity of the Edendale Provincial Hospital, SA police station, medical clinics and
local schools. It is estimated that there are approximately 90 000 households or
about 450 000 people in the catchment area. The anticipated capital expenditure is
R186 million at an initial yield of 9%. The purchase price is underpinned by a one
year income guarantee. The remaining 50% will be held by the McCormick Group.
30% interest in Maake Plaza (15 200m²) and Modjadji Plaza (9 800m²)
Offers for the acquisition of a 30% interest in both these centres at a purchase price
of R61.5 million at a blended anticipated initial yield of 12% have been accepted.
The centres are located in the rural areas surrounding Tzaneen in the Limpopo
Province. The remaining 70% is held by the McCormick Group.
Both centres are anchored by Shoprite and the national tenant composition is 88%.
Disposals
In line with the strategy of improving the quality of the portfolio, the following higher
risk properties were disposed of in the six months ended 30 September 2013:
Sales Yield Date of
price % sale
Property R000 2013
Durban Embassy 238 000 9.9 23 May
Midrand Allandale Land (Halfway 21 850 - 16 August
House Ext 65)
Bloemfontein Bree Street 13 900 6.7 13 August
Warehouse
Randburg Triangle 13 500 10.5 10 May
287 250
These disposals create an earnings drag during the short term but contribute to an
improved risk profile and the quality of the portfolio for the longer term.
9. Property Portfolio
The combined property portfolio currently comprises 81 properties with a gross
lettable area of 1 150 729m².
The sectoral spread by market value comprises 52% retail, 23% offices, 10%
industrial, 10% sovereign, 3% hospital and 2% motor related.
During the six month period under review, new leases and renewals with a total
area of 150 579m² and a contract value of R538.3 million were concluded.
78% of leases to be renewed during the period ended 30 September 2013 were
renewed or are in the process of being renewed.
The overall vacancy percentage (measured as a percentage of gross rentals) has
decreased from 7.1% at 31 March 2013 to 6.7% at 30 September 2013.
The increased vacancies at offices are mainly due to higher vacancies at Pretoria
Midtown Building, Midrand Ulwazi Building, Jhb Parktown Oakhurst. The motor
related vacancy is at Cape Town Bellville Barons which accounts for 1 358m².
The renewal escalations on expiry rentals are still positive compared to expiry
rentals:
- Retail up 6.3%
- Offices up 0.8%
- Industrial up 0.8%
New leases concluded on retail space have exceeded budgeted rentals by 9.7%,
whilst new leases concluded on offices and industrial are down 6.3% and 8.9%
respectively on budgeted rentals.
The contracted rental escalation profile below reflects a positive average escalation
across all sectors of 8.1%.
10. Valuations
The directors have valued the group’s property portfolio at R10.3 billion utilising the
discounted cash flow methodology for the group, and the purchase price for the
sovereign portfolio. In terms of the company’s accounting policies, approximately
50% of all properties are valued every six months on a rotational basis by qualified
independent external valuers. The external valuation by Jones Lang LaSalle (Pty)
Ltd, Broll Valuation and Advisory Services and Old Mutual Investment Group South
Africa (Pty) Ltd of 56.0% of the total portfolio is in line with the directors’ valuation.
Valuation assumptions
The range of the reversionary capitalisation rates applied to the portfolio are
between 7.2% and 13.9% with the weighted average being approximately 9.6%.
The discount rates applied range between 13.1% and 17.6% with the weighted
average being approximately 14.1%.
In determining future cash flows for valuation purposes, vacancies are forecast for
each property based on estimated demand.
11. Operating segment reporting
The revenues and profits generated by the group’s operating segments and
segment assets are summarised in the table below.
During the six month period to 30 September 2013, there has been a change from
prior periods in the measurement methods used to determine operating segments
and reported segment profits in that hospitals and auto dealerships are reported as
separate segments in line with the JSE Listing Requirements.
Operating segment analysis for the six months ended 30 September 2013
Asset
manage-
Sovereign ment
Industrial Offices Offices Retail Motor Hospital Total business Total
R000 R000 R000 R000 R000 R000 R000 R000 R000 R000
GROUP
September 2013
Group income for the
six months ended 30
September 2013
Property revenue 60 284 139 493 23 833 413 583 6 983 13 189 657 365 78 472 735 837
Property expenses (21 891) (59 193) (7 779) (158 987) (1 030) (1 573) (250 453) (19 602) (270 055)
38 393 80 300 16 054 254 596 5 953 11 616 406 912 58 870 465 782
Straight-line rental
income accrual 1 708 3 573 714 11 326 265 517 18 103 - 18 103
Profit from property
and other operations
40 101 83 873 16 768 265 922 6 218 12 133 425 015 58 870 483 885
Group statement of
financial position at 30
September 2013
Assets
Investment properties 1 045 919 2 065 193 1 044 761 4 979 683 127 920 325 852 9 589 328 9 589 328
Add: Lease commissions 22 181 22 181
9 611 509 9 611 509
Goodwill 3 889 59 713 63 602 63 602
Intangible asset 95 731 95 731
Investment properties
held for sale - 334 267 - 383 813 34 750 - 752 830 752 830
1 049 808 2 399 460 1 044 761 5 423 209 162 670 325 852 10 427 941 95 731 10 523 672
Add: Excluded items
Development capital
expenditure 261 687
Furniture, fittings and
other equipment 5 487
Available-for-sale
financial asset 35 403
Financial asset at
amortised cost 197
Loans to directors 15 350
Trade and other
receivables 91 357
Cash and cash
equivalents 421 963
Total assets 11 355 116
Liabilities
Linked debenture and 374 791 859 815 1 921 939 3 705 978 3 705 978
premium 374 377 58 291 116 765
Interest bearing
borrowings 341 543 783 540 341 165 1 751 442 53 120 106 406 3 377 216 3 377 216
716 334 1 643 355 715 542 3 673 381 111 411 223 171 7 083 194 7 083 194
Add: Excluded items
Equity 3 288 321
Derivative financial
instruments 14 635
Deferred taxation
liabilities 5 999
Trade and other payables 247 597
Current taxation liabilities 4 982
Loans to vendors 382 052
Linked unitholders for
distribution 328 336
Total equity and
liabilities 11 355 116
GROUP
September 2012
Group income for the
six months ended 30
September 2012
Property revenue 69 047 207 671 297 421 574 139 59 682 633 821
Property expenses (24 365) (78 894) (124 840) (228 099) (14 387) (242 486)
44 682 128 777 172 581 346 040 45 295 391 335
Straight-line rental
income accrual (913) (2 747) (3 934) (7 594) (7 594)
Profit from property
and other operations 43 769 126 030 168 647 338 446 45 295 383 741
Group statement of
financial position at 30
September 2012
Assets
Investment properties 1 047 599 2 623 649 3 600 297 7 271 545 7 271 545
Add: Lease commissions 16 715 16 715
1 047 599 2 623 649 3 600 297 7 288 260 7 288 260
Goodwill 3 917 931 60 696 65 544 65 544
Intangible asset 237 053 237 053
Investment properties
held for sale 74 700 289 205 62 948 426 853 426 853
1 126 216 2 913 785 3 723 941 7 780 657 237 053 8 017 710
Add: Excluded items
Deferred capital
expenditure 545
Furniture, fittings and
other equipment 1 862
Available-for-sale
financial asset 44 645
Financial asset at
amortised cost 2 060
Trade and other
receivables 59 958
Cash and cash
equivalents 315 910
Total assets 8 442 690
Liabilities
Linked debenture and
premium 430 476 1 117 271 1 405 097 2 952 844 2 952 844
Interest bearing
borrowings 326 264 846 796 1 064 944 2 238 004 2 238 004
756 740 1 964 067 2 470 041 5 190 848 5 190 848
Add: Excluded items
Equity 2 231 477
Derivative financial
instrument 81 978
Deferred taxation
liabilities 473 376
Trade and other payables 217 170
Current taxation liabilities 13 706
Linked unitholders for
distribution 234 135
Total equity and
liabilities 8 442 690
12. Events after period end
The JSE approved the listing of 22.84 million Vukile linked units to part fund the
acquisition of the Encha portfolio. The proceeds received from the issue of these
linked units of R356 million have been utilised to reduce vendor loans existing at
30 September 2013.
13. Changes in directorate
During the period under review Mr Peter Cook and Mr Mlungisi Hlongwane retired
from the Board. Mr Cook served as a member of the Audit and Risk Committee
and as the chairman of Social, Ethics and Human Resources Committee and Mr
Hlongwane as a member of the Property and Investment Committee and the Social,
Ethics and Human Resources Committee. Both Mr Cook and Mr Hlongwane were
valued board members and the Board wishes them well in their future endeavours.
Mr Hatla Ntene, a quantity surveyor with extensive experience was appointed as an
independent non-executive director with effect from 25 October 2013 and has been
appointed to the Property and Investment Committee. Dr. Sedise Moseneke has
been appointed as an executive director following the Sovereign portfolio
acquisition with effect from 1 August 2013.
14. Distribution Announcement
Linked unit holders are referred to the SENS announcements published on
8 November 2013 and 15 November 2013 respectively in which the company
announced the declaration of a special distribution in respect of the East Rand Mall
commission income of 13.83 cents per unit and the normal distribution for the
interim period ended 30 September 2013 amounting to 54.81 cents per unit.
15. Prospects
We have made significant progress in changing our portfolio to a better quality,
lower risk portfolio. This has been achieved through value enhancing acquisitions
and the disposal of riskier, yet higher yielding, assets. The improved quality of the
portfolio is evidenced by the asset composition where some 65% of the portfolio is
represented by our retail (52%), sovereign portfolio (10%) and hospital (3%) assets
which collectively provide a real stability to the portfolio. The retail portfolio
continues to perform well and we are seeing tenant demand across the portfolio.
The sovereign portfolio has a lease expiry profile exceeding five years and
contractual escalations of 8.9%.
The remainder of the portfolio comprises office (23%), motor related (2%) and
industrial (10%) assets. We expect the office sector to remain the most challenging
but have been encouraged by the positive momentum in the industrial sector in the
first half of the financial year.
With trading conditions expected to remain difficult in the second half, we are
however still on track to meet our distribution guidelines for F2014 of growth in
normalised distribution (off a base of 120.44 cpu) of between 4% and 6%. We
expect a healthy growth in distributions for F2015 given the positive effects of the
repositioning of the portfolio and the full year impact of the acquisitions undertaken
during the F2014 year.
This forecast has not been reviewed or reported on by the Company’s auditors.
On behalf of the board
AD Botha LG Rapp
Chairman Chief Executive Officer
Melrose Estate
25 November 2013
JSE Sponsor: Java Capital Trustees and Sponsors (Pty) Ltd, Rosebank,
Johannesburg
NSX Sponsor: IJG Group, Windhoek, Namibia
Executive directors: LG Rapp (Chief Executive), MJ Potts (Financial Director), HC
Lopion, GS Moseneke
Non-executive directors: AD Botha (Chairman), PS Moyanga, SF Booysen,
H Ntene, NG Payne, SEN Sebotsa, HM Serebro
Registered office: Ground floor One-on-Ninth, Cnr Glenhove Road and Ninth Street,
Melrose Estate, 2196.
Company secretary: J Neethling
Transfer secretaries: Link Market Services South Africa (Pty) Ltd, Braamfontein,
Johannesburg
Investor and media relations: Contact Helen McKane at vukile@dpapr.com,
Tel: 011 728-4701.
www.vukile.co.za
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 30 September 2013
Unaudited Unaudited Audited
30 September 30 September 31 March
2013 2012 2013
GROUP R000 R000 R000
ASSETS
Non-current assets 10 088 966 7 639 969 7 770 306
Investment properties 9 454 898 7 153 484 7 241 245
Investment properties 9 611 509 7 288 260 7 389 656
Straight-line rental income adjustment (156 611) (134 776) (148 411)
Other non-current assets 634 068 486 485 529 061
Intangible asset 95 731 237 053 152 965
Straight-line rental income asset 156 611 134 776 148 411
Development capital expenditure 261 687 545 138 385
Furniture fittings, computer equipment and other 5 487 1 862 5 129
Available-for-sale financial asset 35 403 44 645 19 417
Financial asset at amortised cost 197 2 060 1 152
Loans to directors 15 350 - -
Goodwill 63 602 65 544 63 602
Current assets 513 320 375 868 1 351 664
Trade and other receivables 91 357 59 958 84 360
Cash and cash equivalents 421 963 315 910 1 267 304
Investment properties held for sale 752 830 426 853 323 202
Total assets 11 355 116 8 442 690 9 445 172
Unaudited Unaudited Audited
30 September 30 September 31 March
2013 2012 2013
GROUP R000 R000 R000
EQUITY AND RESERVES 3 288 321 2 231 477 2 626 187
Non-current liabilities 6 305 604 5 596 202 5 755 367
Linked debentures and premium 3 705 978 2 952 844 3 275 222
Other interest bearing borrowings 2 578 992 2 088 004 2 414 522
Derivative financial instruments 14 635 81 978 59 330
Deferred taxation liabilities 5 999 473 376 6 293
Current liabilities 1 761 191 615 011 1 063 618
Trade and other payables 247 597 217 170 228 117
Short-term borrowings 798 224 150 000 512 936
Current taxation liabilities 4 982 13 706 1 343
Loans to vendors 382 052 - -
Linked unitholders for distribution 328 336 234 135 321 222
Total equity and liabilities 11 355 116 8 442 690 9 445 172
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 September 2013
Unaudited Unaudited Audited
30 September 30 September 31 March
2013 2012 2013
GROUP R000 R000 R000
Property revenue 657 365 574 139 1 166 940
Straight-line rental income accrual 18 103 (7 594) 4 829
Gross property revenue 675 468 566 545 1 171 769
Property expenses (250 453) (228 099) (452 811)
Net profit from property operations 425 015 338 446 718 958
Net income from asset management business 58 870 45 295 45 952
Corporate administrative expenses (17 522) (14 510) (29 192)
Investment and other income 26 587 8 096 25 615
Operating profit before finance costs 492 950 377 327 761 333
Finance costs (124 969) (100 356) (194 285)
Profit before debenture interest 367 981 276 971 567 048
Debenture interest (327 601) (233 639) (554 368)
Profit before capital items 40 380 43 332 12 680
Profit on sale of investment properties 26 560 5 405 903
Loss on sale of furniture and fittings (5) - -
Profit on sale of subsidiary - 555 1 160
Amortisation of debenture premium 4 308 4 677 6 804
Goodwill written-off on sale of subsidiary/
properties by a subsidiary - - (821)
Impairment of intangible asset (57 234) (30 043) (114 131)
Impairment of goodwill - - (1 121)
Profit/(loss) before fair value adjustments 14 009 23 926 (94 526)
Fair value adjustments 592 299 219 377 255 329
Gross change in fair value of investment properties 610 402 211 783 260 158
Straight-line rental income adjustment (18 103) 7 594 (4 829)
Profit before taxation 606 308 243 303 160 803
Taxation (6 070) (57 323) 412 834
Profit for the period 600 238 185 980 573 637
Other comprehensive income
Items that will be reclassified subsequently to
profit or loss
Cash flow hedges 44 695 (56 334) (33 686)
Available-for-sale financial assets-current
period income/(loss) 4 465 6 862 (18 367)
Other comprehensive income/(loss) for the period 49 160 (49 472) (52 053)
Total comprehensive income for the period 649 398 136 508 521 584
Earnings per linked unit (cents) 205.25 103.20 273.53
Diluted earnings per linked unit (cents) 205.25 103.20 273.53
Number of linked units in issue 455 513 047 410 515 218 431 040 218
RECONCILIATION OF GROUP NET PROFIT TO HEADLINE EARNINGS AND TO PROFIT
AVAILABLE FOR DISTRIBUTION
for the six months ended 30 September 2013
30 September 2013 30 September 2012 31 March 2013
Group Cents per Group Cents per Group Cents per
linked inked linked
unit unit unit
R000 R000 R000
Attributable profit after taxation 600 238 132.78 185 980 45.74 573 637 139.10
Adjusted for:
Debenture interest 327 601 72.47 233 639 57.46 554 368 134.43
Earnings attributable to linked unitholders 927 839 205.25 419 619 103.20 1 128 005 273.53
Change in fair value of investment properties (592 299) (131.02) (219 377) (53.95) (255 329) (61.91)
Total tax effects of adjustments - - 42 897 10.55 (418 606) (101.51)
Write-off in goodwill on sale of subsidiary/properties
sold by a subsidiary - - - - 821 0.20
Impairment of goodwill - - - - 1 121 0.27
Profit on sale of subsidiary - - (555) (0.14) (1 160) (0.28)
Profit on sale of investment properties (26 560) (5.88) (5 405) (1.33) (903) (0.22)
Loss on sale of furniture & fittings 5 - - - 188 0.05
Impairment of intangible asset 57 234 12.66 30 043 7.39 114 131 27.68
Amortisation of debenture premium (4 308) (0.94) (4 677) (1.14) (6 804) (1.65)
Headline earnings attributable to linked unitholders 361 911 80.07 262 545 64.58 561 464 136.16
Loss on sale of furniture & fittings (5) - - - (188) (0.05)
Straight-line rental accrual net of deferred taxation (18 103) (4.01) 5 989 1.47 (4 829) (1.17)
Profit available for distribution 343 803 76.06 268 534 66.05 556 447 134.94
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
for the six months ended 30 September 2013
Unaudited Unaudited Audited
30 September 30 September 31 March
2013 2012 2013
cR000 R000 R000
Cash flow from operating activities 467 376 398 546 738 201
Cash flow from investing activities (2 123 975) (1 368 322) (1 446 725)
Cash flow from financing activities 811 258 1 069 739 1 759 881
Net (decrease)/increase in cash and cash equivalents (845 341) 99 963 1 051 357
Cash and cash equivalents at the beginning of the period 1 267 304 215 947 215 947
Cash and cash equivalents at the end of the period 421 963 315 910 1 267 304
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2013
Share Non-
capital and distributable Retained
R000 share premium reserves earnings Total
GROUP
Restated balance at 31 March 2012 32 263 2 013 225 28 982 2 074 470
Balance at 31 March 2012 as previously reported 32 263 1 719 943 28 982 1 781 188
Change of rate in deferred taxation including straight line
rental accrual - 293 282 - 293 282
Issue of share capital and premium 17 231 - - 17 231
Dividend distribution - - (477) (477)
49 494 2 013 225 28 505 2 091 224
Profit for the period - - 185 980 185 980
Change in fair value of investment properties - 211 783 (211 783) -
Deferred taxation on change in fair value of investment
properties and straight-line rental accrual - (35 254) 35 254 -
Share-based remuneration - 3 745 - 3 745
Transfer from non-distributable reserve - (30 121) 30 121 -
Other comprehensive income
Revaluation of available-for-sale financial asset - 6 862 - 6 862
Revaluation of cash flow hedges - (56 334) - (56 334)
Balance at 30 September 2012 49 494 2 113 906 68 077 2 231 477
Issue of shares 6 622 - - 6 622
Dividend distribution - - (654) (654)
56 116 2 113 906 67 423 2 237 445
Profit for the period - - 387 657 387 657
Change in fair value of investment properties - 48 375 (48 375) -
Deferred taxation on change in fair value of investment
properties and straight-line rental accrual - 35 254 (35 254) -
Deferred taxation rate change - 426 790 (426 790) -
Share-based remuneration - 3 666 - 3 666
Transfer from non-distributable reserve - (92 073) 92 073 -
Other comprehensive loss
Revaluation of available-for-sale financial asset - (25 229) - (25 229)
Revaluation of cash flow hedges - 22 648 - 22 648
Balance at 31 March 2013 56 116 2 533 337 36 734 2 626 187
Issue of shares 8 880 - - 8 880
Dividend distribution - - (669) (669)
64 996 2 533 337 36 065 2 634 398
Profit for the period - - 600 238 600 238
Change in fair value of investment properties - 610 402 (610 402) -
Share-based remuneration - 4 525 - 4 525
Transfer from non-distributable reserve - (30 674) 30 674 -
Other comprehensive loss
Revaluation of available-for-sale financial asset - 4 465 - 4 465
Revaluation of cash flow hedges - 44 695 - 44 695
Balance at 30 September 2013 64 996 3 166 750 56 575 3 288 321
Date: 25/11/2013 08:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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