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Financial effects of Pareto disposals and withdrawal of cautionary
FOUNTAINHEAD PROPERTY TRUST
(A collective investment scheme in property
registered in terms of the Collective Investment
Schemes Control Act, No.45 of 2002 and
managed by Fountainhead Property Trust Management Limited)
(Registration number 1983/003324/06)
JSE share code: FPT ISIN: ZAE000097416
(Approved as a REIT by the JSE)
(“Fountainhead”)
FINANCIAL EFFECTS OF PARETO DISPOSALS AND WITHDRAWAL OF CAUTIONARY
INTRODUCTION
Fountainhead unitholders are referred to the SENS announcement published on 18 November 2013 wherein
unitholders were advised that:
1. Fountainhead has, subject to certain conditions precedent, accepted an offer to dispose of its 41.3176%
undivided ownership interest in Westgate Shopping Centre (the “disposal”) to Pareto Limited (“Pareto”)
for a purchase consideration of R700 million with effect from the date of registration of transfer of the
property into Pareto’s name; and
2. On 7 August 2013, Fountainhead accepted an offer and is in the process of entering into an agreement
with Pareto to dispose of its 19.0143331% undivided ownership interest in Southgate Value Mart together
with its 15.973124% undivided ownership interest in Southgate Mall to Pareto for an aggregate purchase
consideration of R244 740 000 (the “Southgate disposals”).
As the Southgate disposals were transactions entered into by Fountainhead with the same party applicable to the
disposal, namely Pareto, the Southgate disposals are required to be aggregated with the disposal in terms of the
JSE Listings Requirements. Such aggregation however, has no effect on the categorisation of the disposal as a
whole, which remains a Category 2 transaction under the JSE Listings Requirements.
The disposal and the Southgate disposals are collectively referred to herein as the “Pareto disposals”.
FINANCIAL EFFECTS
The pro forma financial effects of the Pareto disposals on Fountainhead’s net asset value, earnings per unit,
headline earnings per unit and distribution per unit for the 11 months ended 31 August 2013 are set out below.
The pro forma financial effects are the responsibility of the directors of Fountainhead and have been prepared
for illustrative purposes only, to provide information on how the Pareto disposals may have impacted on the
historical financial results of Fountainhead for the 11 months ended 31 August 2013.
Due to its nature, the pro forma financial effects may not give a fair reflection of Fountainhead’s financial
position, changes in equity, results of operations and cash flows subsequent to the Pareto disposals.
The pro forma financial effects have not been reviewed or reported on by Fountainhead’s reporting
accountants.
2
The table below reflects the pro forma financial effects of the Pareto disposals on a Fountainhead unitholder:
Before the After the Pareto % change
Pareto disposals disposals
Net asset value per unit (excluding deferred tax) 709.47 708.52 (0.1)
(cents)
Earnings per unit (cents) 66.01 69.87 5.8
Headline earnings per unit (cents) 60.30 59.43 (1.4)
Distribution per unit (cents) 50.00 49.35 (1.3)
Notes and assumptions:
1. The numbers set out in the “Before the Pareto disposals” have been extracted, without adjustment, from
Fountainhead’s audited results for the 11 months ended 31 August 2013.
2. The numbers set out in the “After the Pareto disposals” reflect the pro forma impact of the Pareto
disposals on a Fountainhead unitholder assuming the Pareto disposals were implemented on 31 August
2013 for statement of financial position purposes and on 1 October 2012 for statement of comprehensive
income purposes.
3. The disposal proceeds of R944.74 million are assumed to be utilised as follows:
a. R750.0 million to discharge interest-bearing liabilities;
b. R193.7 million retained in a call account earning interest at 5.5% per annum; and
c. R1.0 million to discharge estimated transaction costs.
4. Investment properties of R954.8 million attributable to the Pareto disposals are assumed to be
derecognised from the statement of financial position.
5. A negative fair value adjustment of R54.9 million attributable to the Pareto disposals, which was included
in the audited results for the 11 months ended 31 August 2013, is assumed to be reversed in the statement
of comprehensive income.
6. The interest saving as a result of the discharge of interest-bearing liabilities has been calculated at 6.91%
per annum, being Fountainhead’s pre-tax weighted average cost of debt.
7. For the 11 months ended 31 August 2013, the Pareto disposals earned historical net rental income
(excluding the straight-line lease adjustment) of approximately R64.6 million.
8. The distributable income attributable to the Pareto disposals was assumed to be earned evenly over the 11
months ended 31 August 2013.
WITHDRAWAL OF CAUTIONARY
Following the publication of the financial effects of the Pareto disposals, unitholders are no longer required to
exercise caution when dealing in their Fountainhead units.
19 December 2013
Corporate advisor and sponsor
Java Capital
Date: 19/12/2013 05:06:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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