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Audited results for the year ended 28 February 2014
Adrenna Property Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/012245/06)
(JSE share code: ANA ISIN: ZAE000163580)
AUDITED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2014
Statement of Profit or Loss and Other Comprehensive Income
FOR THE YEAR ENDED 28 FEBRUARY 2014
Audited Audited
Group Group
2014 2013
R'000 R'000
REVENUE 30 719 29 780
Cost of sales (2 912) (1 452)
Gross profit 27 807 28 328
Operating income before interest and revaluations 12 285 12 590
Fair value adjustment on investment properties 9 330 10 848
Investment income 821 1 069
Finance costs (7 021) (8 052)
Net income before taxation 15 415 16 455
Taxation (3 190) (5 925)
Income after taxation for the year 12 225 10 530
Non-controlling interest – –
Income attributable to ordinary shareholders 12 225 10 530
Other comprehensive income: – –
Total comprehensive income attributable to:
– Ordinary shareholders 12 225 10 530
– Non-controlling interests – –
12 225 10 530
Group Group
2014 2013
R'000 R'000
OPERATING INCOME BEFORE
INTEREST AND REVALUATIONS
Operating income before interest and
revaluations is arrived at after taking
the following into account:
Audit fees 363 404
Depreciation – owned assets 2 5
Legal fees 141 194
Operating lease payments – premises 153 69
Consulting and professional fees 1 452 1 683
Directors emoluments 354 424
Impairment of goodwill on acquisition 19 –
Impairment of inter-company loans – –
Recovery of property management
staff costs 299 295
Write-down of inventory – 272
Penalties and interest on late payment
of income tax 105 –
Profit on sale of investment property – (610)
Statement of Financial Position
AS AT 28 FEBRUARY 2014
Audited Audited
Group Group
2014 2013
R'000 R'000
Non-current assets
Property, plant and equipment 72 74
Investment properties 206 491 197 161
Investments in subsidiaries – –
Loans owing by third parties 5 075 8 053
Operating lease assets 5 678 4 665
Deferred taxation 4 339 3 646
Goodwill – 19
221 655 213 618
Current assets
Loans to group companies – –
Loans owing by third parties 2 089 2 275
Inventory 5 752 8 664
Accounts receivable 1 337 1 312
Operating lease assets 1 708 1 491
Current taxation receivable 10 –
Cash and cash equivalents 60 510
10 956 14 252
Total assets 232 611 227 870
EQUITY AND LIABILITIES
Equity
Stated capital 567 567
Retained income 109 782 97 557
110 349 98 124
Non-current liabilities
Borrowings 69 679 82 188
Deferred taxation 27 982 25 620
97 661 107 808
Current liabilities
Current portion of borrowings 10 560 6 724
Loans from group companies – –
Loans owing to third parties 406 411
Accounts payable 2 712 3 198
Taxation 965 595
Bank overdraft 9 958 11 010
24 601 21 938
Total equity and liabilities 232 611 227 870
Statement of Cash Flows
FOR THE YEAR ENDED 28 FEBRUARY 2014
Audited Audited
Group Group
2014 2013
R'000 R'000
Cash generated by operations 13 477 12 481
Finance costs (7 021) (8 052)
Investment income 821 1 069
Taxation paid (1 161) (587)
6 116 4 911
Cash flows from investing activities
Acquisition of property, plant and equipment – (77)
Proceeds from disposal of investment property – 4 350
Repayment of financial assets 3 164 2 031
Acquisition of investment in subsidiary – (4)
Acquisition in terms of IFRS 3: Business Combinations – 15
3 164 6 315
Cash flows from financing activities
Repayment of loans (5) (1 316)
Repayment of borrowings (8 673) (8 991)
Net movement in loans with group companies - –
8 678) (10 307)
Movement in cash and cash equivalents 602 919
Cash and cash equivalents at beginning of the year (10 500) (11 419)
Cash and cash equivalents at end of the year (9 898) (10 500)
Statement of Changes in Equity
FOR THE YEAR ENDED 28 FEBRUARY 2014
Audited Audited
Group Group
2014 2013
R'000 R'000
STATED CAPITAL
Ordinary stated capital
Balance at beginning of the year 567 567
Movements during the year – –
Balance at end of the year 567 567
RESERVES
Retained earnings
Balance at beginning of the year 97 557 87 012
Acquisition in terms of IFRS 3: Business Combinations during the year – 15
Comprehensive income/(loss) attributable to ordinary shareholders 12 225 10 530
Balance at end of the year 109 782 97 557
Total equity and reserves attributable to ordinary shareholders 110 349 98 124
Non-controlling interests
Balance at beginning of the year – –
Balance at end of the year – –
Total equity and reserves 110 349 98 124
EARNINGS PER SHARE/DIVIDENDS PER SHARE
2014 2013
R'000 R'000
Number of ordinary shares in issue at beginning of the year (000's) 55 915 55 915
Number of ordinary shares in issue at end of the year (000's) 55 915 55 915
Weighted average number of shares in issue (000's) 55 915 55 915
Basic earnings
Net profit per statement of comprehensive income 12 225 10 530
Basic earnings per share (cents) 21,9 18,8
Headline earnings
Net profit per statement of comprehensive income 12 225 10 530
Profit on sale of investment property – (610)
Impairments 19 23
Revaluation of investment property (net of taxation) (7 896) (6 609)
Headline earnings 4 348 3 334
Headline earnings per share (cents) 7,8 5,9
There was no dilution in basic or headline earnings per share.
Dividends per share
No dividends were declared during the year.
Net asset value per share
Number of ordinary shares in issue at end of the year (000's) 55 915 55 915
Net asset value per share (cents) 197,4 174,5
Net tangible asset value per share (cents) 197,4 174,5
NOTES:
BASIS OF PREPARATION
These audited condensed consolidated financial statements have been
prepared in accordance with IAS 34: Interim Financial Reporting, the
requirements of the Companies Act, No.71 of 2008, and the Listings
Requirements of the JSE Limited. The audited condensed consolidated
results have been prepared on the going concern basis as the directors are
of the view that the group has adequate resources in place to continue in
operation for the foreseeable future. The accounting policies applied are
in compliance with International Financial Reporting Standards, the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee
and Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council and are consistent with those applied in the
most recent annual financial statements.
AUDITED RESULTS
These condensed consolidated annual financial statements have been audited
by our auditors, RSM Betty & Dickson (Johannesburg). A copy of their
unmodified audit report is available for inspection at the company's
registered office.
PREPARER
These condensed results were prepared under the supervision of Hartmann
Beukes in his capacity as the Financial Director.
GENERAL REVIEW AND FINANCIAL RESULTS
The environment within which the group operates remained static during the year under review.
While market conditions have stabilised, your directors do not anticipate a serious recovery to
occur in the short to medium term.
It is pleasing to note that the group maintained stability and achieved operating income before
interest and fair value adjustments of R12,3 million, a marginal decline when compared with a
profit in 2013 of R12,6 million. This marginal decline is attributable to a diminished beneficial
effect in the current year arising from straight-lining of rental income (only R1,2 million credited
to revenue in the current year as opposed to R2,4 million credited in the prior year). An analysis
of operating income before interest and revaluations, after extraction of the respective years'
accounting adjustment for straight lining of rental income (which provides a more comparable
contrast), results in an increase of 8,8% during the current year. The group reduced the percentage
of borrowings directly related to fixed properties to 38,9% (2013: 45,1%), well within its target
maximum of 60%.
Basic earnings per share increased from 18,8 cents per share in 2013 to 21,9 cents per share in
2014, an increase of 16,5%. Headline earnings per share increased from 5,9 cents per share in 2013
to 7,8 cents per share in 2014, an increase of 32,2%. Net asset value per share and net tangible
asset value per share both increased from 174,5 cents in 2013 to 197,4 cents per share in 2014,
an increase of 13,1%.
Your directors continue to make every effort to reduce borrowing costs, and succeeded in lowering
such costs from R8 million in 2013 to R7 million in 2014, a reduction of 12,5%. This was achieved
through the disposal of two residential units held as inventory (proceeds of which were allocated
to the bond with Investec Bank Limited), the gradual diminishment of the overdraft facility with
First National Bank and consistent monthly capital repayments made to both ABSA Bank Limited
and Investec Bank Limited.
SEGMENTAL RESULTS
2014 (R'000) 2013 (R'000)
Invest- Invest-
ment Property- Property Head ment Property- Property Head
Property related Held for Office Property related Held for Office
Holding Services Resale admin Total Holding Services Resale admin Total
Revenue 27 386 – 3 333 – 30 719 29 780 – – – 29 780
Cost of sales – – (2 912) – (2 912) (1 452) – – – (1 452)
Operating income/(loss) before interest and revaluations 17 820 (168) – (5 367) 12 285 18 096 (229) – (5 277) 12 590
Fair value adjustments 9 330 – – – 9 330 10 848 – – – 10 848
Investment income 3 – – 818 821 27 – – 1 042 1 069
Finance costs (6 076) – – (945) (7 021) (7 025) – – (1 027) (8 052)
Net income/(loss) before taxation 21 077 (168) – (5 494) 15 415 21 946 (229) – (5 262) 16 455
Taxation (2 121) – – (1 069) (3 190) (5 157) (524) – (244) (5 925)
Profit/(loss) for the year 18 956 (168) – (6 563) 12 225 16 789 (753) – (5 506) 10 530
Other comprehensive income – – – – – – – – – –
Total comprehensive income attributable to:
Ordinary shareholders 18 956 (168) – (6 563) 12 225 16 789 (753) – (5 506) 10 530
Non-controlling interests – – – – – – – – – –
18 956 (168) – (6 563) 12 225 16 789 (753) – (5 506) 10 530
Other information
Segment assets 219 608 1 5 752 7 250 232 611 217 434 2 – 10 434 227 870
Segment liabilities 110 778 803 – 10 681 122 262 117 436 1 032 – 11 278 129 746
A geographical segmental report is not presented as the majority of the group's continuing operations are carried out in the Western Cape.
Segmental aggregation is based on the main sources of activity, namely Investment Property Holding, Property-related Services, Property Sales and Head Office administration.
Inter-segment transactions are measured based on arm's length prices.
ANNUAL FINANCIAL STATEMENTS
The audited annual financial statements for the year ended 28 February
2014 together with a notice of the annual general meeting to be held on
27 June 2014, will be mailed to shareholders on 23 May 2014. Copies of the
annual financial statements are available from bernard@rmsprop.co.za.
ACCOUNTING POLICIES
The accounting policies applied by the group are consistent with those
applied in the comparative financial periods, except for the adoption of
improved, revised or new standards and interpretations. The aggregate
effect of these changes in respect of the year ended 28 February 2014 is
Rnil.
SUBSEQUENT EVENTS
No material matters have occurred subsequent to 28 February 2014 that
require disclosure.
DIVIDENDS
Taking into account the impacts of the depressed economy and related
problems in the property industry the directors have resolved to retain
cash in the group to ensure future growth. As such no dividend has been
recommended.
23 May 2014
DIRECTORS:
R P Fertig (Chief Executive Officer)
W P Alcock† (Chairman)
R S Watson* (Appointed 1 September 2013)
H Beukes CA(SA) (Appointed 25 March 2013)
B W Kaiser (Resigned 25 March 2013)
B Mothelesi*
M Moela*
(†Non-executive)
(*Independent non-executive)
COMPANY SECRETARY:
B W Kaiser
REGISTERED OFFICE:
2969 William Nicol Drive, Bryanston, Sandton, 2196
TRANSFER SECRETARIES:
Computershare Investor Services Proprietary Limited
70 Marshall Street, Johannesburg, 2001
SPONSOR:
Arcay Moela Sponsors Proprietary Limited
Date: 23/05/2014 01:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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