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Provisional Financial Results , Dividend Finalisation announcement and update on Acucap Restructure and Offer
Acucap Properties Limited
(Reg No. 2001/021725/06)
(Incorporated on 12 September 2001)
(Approved as a REIT by the JSE)
"Acucap" or "the company"
Share code: ACP
ISIN: ZAE000037651
AUDITED PROVISIONAL FINANCIAL RESULTS, FINALISATION ANNOUNCEMENT IN RESPECT OF THE FINAL DISTRIBUTION
FOR THE YEAR ENDED 31 MARCH 2014 AND UPDATE ON TIMING OF ACUCAP RESTRUCTURE AND SYCOM OFFER
Summarised consolidated statement of financial position
at 31 March 2014
2014 2013
R'000 R'000
Assets
Property assets 9 447 433 7 948 485
Investment properties 8 670 762 7 452 230
Non-current receivable 94 157 83 395
Current receivable 27 319 30 033
Investment properties and related receivables 8 792 238 7 565 658
Investment properties held for sale and related receivables 37 350 -
Investment properties under development 568 000 319 555
Owner-occupied property 8 531 8 920
Property development inventory 41 314 54 352
Other non-current assets 2 882 963 2 177 878
Loans in respect of unit purchase scheme 384 016 390 771
Equipment 1 640 1 400
Intangible assets and goodwill 244 292 256 934
Interest in associate 1 863 174 -
Interest in joint ventures 226 763 153 078
Listed investments - 1 356 789
Loan receivable 86 303 5 472
Financial instruments 73 854 -
Deferred tax assets 2 921 13 434
Other current assets 242 360 222 300
Trade and other receivables 219 964 198 039
Tax receivable 602 1 265
Cash and cash equivalents 21 794 22 996
Total assets 12 572 756 10 348 663
Equity and liabilities
Shareholders’ interest 5 420 817 4 856 731
Share capital and share premium 2 212 903 2 212 903
Non-distributable reserve 3 393 245 3 020 133
Accumulated loss (185 331) (376 305)
Non-current liabilities 5 980 135 4 666 723
Debentures 1 749 150 1 749 150
Financial liabilities 4 230 985 2 633 303
Financial instruments - 47 981
BEE instrument - 220 519
Deferred tax liabilities - 15 770
Current liabilities 1 171 804 825 209
Trade and other payables 135 907 127 834
Financial liabilities 606 624 423 849
BEE instrument 142 300 -
Debenture interest payable 286 973 273 526
Total equity and liabilities 12 572 756 10 348 663
Summarised consolidated statement of profit or loss and other comprehensive income
for the year ended 31 March 2014
2014 2013
R'000 R'000
Revenue 679 829 650 790
- Contractual 671 781 644 410
- Straight lining 8 048 6 380
Net operating expenses (64 385) (39 604)
Loss on disposal of investment properties (202) (962)
Amortisation of intangible assets (12 642) (25 559)
Profit before fair value adjustments, interest and taxation 602 600 584 665
Fair value adjustment to investment properties 382 090 441 276
Fair value adjustment to BEE instrument 78 219 (82 745)
Loss on settlement of financial instruments (47 528) -
Profit before interest and taxation 1 015 381 943 196
Interest income 85 863 126 429
Interest expense
- debentures (566 924) (535 476)
- other (215 623) (195 893)
Share of profit of equity-accounted joint ventures (net of income tax) 2 803 18 701
Share of profit of equity-accounted associate (net of income tax) 188 098 -
Profit before taxation 509 598 356 957
Taxation income 14 152 375 742
Profit for the year 523 750 732 699
Other comprehensive income
Items that may be reclassified to profit or loss
Available-for-sale financial assets, net change in fair value (77 898) 182 433
Change in fair value of cash flow hedge 60 872 (49 085)
Cash flow hedge loss recognised in profit or loss 47 528 -
Items that will never be reclassified to profit or loss
Other comprehensive income from associate 9 834 -
Other comprehensive income for the year, net of taxation 40 336 133 348
Total comprehensive income for the year 564 086 866 047
Cents Cents
Basic and diluted earnings per share* 299.13 426.56
Interest distribution per linked unit
- interim 159.89 151.00
- final 163.90 156.22
Distribution per linked unit 323.79 307.22
* Acucap Properties Limited has no dilutionary instruments in issue.
2014 2013
Gross Net of tax Gross Net of tax
R'000 R'000 R'000 R'000
Headline earnings
The calculation of the headline earnings per share is based on a weighted average of
175 090 089 (2013: 171 768 394 ) shares in issue during the year and the headline
earnings are calculated as follows:
Profit for the year 523 750 732 699
Fair value adjustment of investment properties (382 090) (382 090) (441 276) (441 276)
Loss on disposal of investment properties 202 165 962 784
Headline earnings - shares 141 825 292 207
Interest paid to debenture holders 566 924 535 476
Headline earnings - linked units 708 749 827 683
Cents Cents
Headline earnings per share 81.00 170.12
Headline earnings per linked unit 404.79 481.86
Summarised consolidated statement of changes in equity
for the year ended 31 March 2014
Share capital Share premium Non- distributable Accumulated loss Total
reserve
R'000 R'000 R'000 R'000 R'000
BALANCE AT 31 MARCH 2012 169 1 999 422 2 069 809 (292 028) 3 777 372
Total comprehensive income for the year
Profit for the year - - - 732 699 732 699
Other comprehensive income for the year - - 133 348 - 133 348
Net change in fair value of listed investments - - 182 433 - 182 433
Net change in fair value of cash flow hedge recognised
directly in other comprehensive income - - (49 085) - (49 085)
Total comprehensive income for the year - - 133 348 732 699 866 047
Transactions with owners, recognised directly in equity
Issue of 4 425 040 shares in September 2012 4 157 512 - - 157 516
Proceeds 4 157 616 - - 157 620
Share issue costs - (104) - - (104)
Issue of 1 613 000 shares in January 2013 2 55 794 - - 55 796
Proceeds 2 55 868 - - 55 870
Share issue costs - (74) - - (74)
Transfer to non-distributable reserve - - 816 976 (816 976) -
Total transactions with owners 6 213 306 816 976 (816 976) 213 312
BALANCE AT 31 MARCH 2013 175 2 212 728 3 020 133 (376 305) 4 856 731
Total comprehensive income for the year
Profit for the year - - - 523 750 523 750
Other comprehensive income for the year - - 30 502 9 834 40 336
Net change in fair value of listed investments - - (77 898) - (77 898)
Other comprehensive income from associate - - - 9 834 9 834
Net change in fair value of cash flow hedge recognised
directly in other comprehensive income - - 108 400 - 108 400
Total comprehensive income for the year - - 30 502 533 584 564 086
Transactions with owners, recognised directly in equity
Transfer to non-distributable reserve - - 342 610 (342 610) -
Total transactions with owners - - 342 610 (342 610) -
BALANCE AT 31 MARCH 2014 175 2 212 728 3 393 245 (185 331) 5 420 817
Summarised consolidated statement of cash flows
for the year ended 31 March 2014
2014 2013
R'000 R'000
Cash flows from operating activities
Cash generated from operations 653 426 633 260
Income tax paid (3 876) (441)
Interest income 85 863 126 429
Interest expense (769 100) (706 890)
Net cash (outflow)/inflow from operating activities (33 687) 52 358
Cash flows from investing activities
Acquisition of investment properties (786 934) (208 786)
Interest capitalised to investment properties (32 688) (10 376)
Proceeds on disposal of investment properties - 202 446
Acquisition of investment properties under development (284 204) (95 310)
Interest capitalised to investment properties under development (18 411) (15 413)
Proceeds on disposal of investment properties under development - 8 064
Subsequent expenditure on properties held for sale (202) -
Acquisition of owner-occupied property (90) -
Acquisition of listed investments (473 018) (155 381)
Acquisition of interest in associate (6 372) -
Repayments/(advances) of loans iro unit purchase scheme 6 755 (68 868)
Acquisition of equipment (1 104) (894)
Proceeds on disposal of equipment 9 2
Loan to Augusta Trust (80 831) (5 472)
Loans to subsidiaries and joint ventures (70 882) (129 278)
Net cash outflow from investing activities (1 747 972) (479 266)
Cash flows from financing activities
Proceeds from the issue of shares - 213 490
Share issue costs - (178)
Proceeds from the issue of debentures - 60 320
Settlement of financial instruments - (74 426)
Financial liabilities raised 1 781 419 342 077
Financial liabilities repaid (962) (99 778)
Net cash inflow from financing activities 1 780 457 441 505
Net cash (outflow)/inflow for the year (1 202) 14 597
Cash and cash equivalents at beginning of year 22 996 8 399
Cash and cash equivalents at end of year 21 794 22 996
Segmental information
for the year ended 31 March 2014
Segmental information is based on the nature of business activities for which the properties are used.
While investment properties are managed on an individual basis, the group comprises the following main reportable industry recognised operating segments:
R'000 R'000 R'000 R'000 R'000
Year ended 31 March 2014
Property
Retail Offices Industrial development Total
Segment revenue (external customers) 489 137 165 651 20 574 4 467 679 829
Net operating expenses (59 559) (16 306) (2 238) (17 500) (95 603)
Loss on disposal of investment properties - (202) - - (202)
Profit before fair value adjustments 429 578 149 143 18 336 (13 033) 584 024
Fair value adjustment of investment properties 303 520 46 896 12 793 18 881 382 090
Segmental results 733 098 196 039 31 129 5 848 966 114
Reconciliation of segmental results to profit for the year in the statement of profit or loss and other comprehensive income
Total Allocated Unallocated BEE
Transaction*
R'000 R'000 R'000 R'000
Revenue 679 829 679 829 - -
Net operating expenses (64 385) (95 603) 31 313 (95)
Loss on disposal of investment properties (202) (202) - -
Amortisation of intangible assets (12 642) - (12 642) -
Profit/(loss) before fair value adjustments 602 600 584 024 18 671 (95)
Fair value adjustment of investment properties 382 090 382 090 - -
Fair value adjustment to BEE instrument 78 219 - - 78 219
Loss on settlement of financial instruments (47 528) - (47 528) -
Operating profit 1 015 381 966 114 (28 857) 78 124
Interest income 85 863 - 86 731 (868)
Interest expense
- debentures (566 924) - (594 190) 27 266
- other (215 623) - (200 144) (15 479)
Share of profit of equity accounted joint venture 2 803 - 2 803 -
Share of profit of equity accounted associate 188 098 - 188 098 -
Profit/(loss) before taxation 509 598 966 114 (545 559) 89 043
Taxation 14 152 - 18 690 (4 538)
Profit/(loss) for the year 523 750 966 114 (526 869) 84 505
* During 2006 Acucap Properties Limited entered into a BEE transaction with Thesele Group Proprietary Limited
("Thesele Group") in terms of which the Thesele Group acquired a 10% holding in the company. Due to the restrictions
placed on the Thesele Group’s ability to dispose of the linked units and the surety provided by Acucap Properties
Limited to the financier of the transaction, the linked units have been accounted for as not having been issued for
accounting purposes, however, since these linked units rank pari passu to the issued linked units, the debenture portion
of the linked units are still entitled to the distribution (2014: R27,266 million). Accordingly, the loan advanced by the
financier to the Thesele Group is recognised as a liability in the Acucap Properties Limited annual financial statements.
During the 2014 financial year, interest on this loan amounting to R15.479 million was recognised by Acucap Properties Limited.
R'000 R'000 R'000
Year ended 31 March 2013
Retail Offices Industrial
Segment revenue (external customers) 454 408 172 113 15 333
Net operating expenses (51 666) (11 167) (701)
Loss on disposal of investment properties (944) (18) -
Profit before fair value adjustments 401 798 160 928 14 632
Fair value adjustment of investment properties 306 431 91 657 41 018
Segmental results 708 229 252 585 55 650
Property
development Storage Total
Segment revenue (external customers) 6 054 2 882 650 790
Net operating expenses (4 571) (1 617) (69 722)
Loss on disposal of investment properties - - (962)
Profit before fair value adjustments 1 483 1 265 580 106
Fair value adjustment of investment properties 2 170 - 441 276
Segmental results 3 653 1 265 1 021 382
Reconciliation of segmental results to profit for the year in the statement of profit or loss and other comprehensive income
R'000 R'000 R'000 R'000
Total Allocated Unallocated BEE transaction
Revenue 650 790 650 790 - -
Net operating expenses (39 604) (69 722) 30 213 (95)
Loss on disposal of investment properties (962) (962) - -
Amortisation of intangible assets (25 559) - (25 559) -
Profit/(loss) before fair value adjustments 584 665 580 106 4 654 (95)
Fair value adjustment of investment properties 441 276 441 276 - -
Fair value adjustment to BEE instrument (82 745) - - (82 745)
Operating profit/(loss) 943 196 1 021 382 4 654 (82 840)
Interest income 126 429 - 127 735 (1 306)
Interest expense
- debentures (535 476) - (561 347) 25 871
- other (195 893) - (179 180) (16 713)
Share of profit of equity accounted investee 18 701 - 18 701 -
Profit/(loss) before taxation 356 957 1 021 382 (589 437) (74 988)
Taxation 375 742 - 375 742 -
Profit/(loss) for the year 732 699 1 021 382 (213 695) (74 988)
Segment assets, reserves and liabilities
R'000 R'000 R'000 R'000 R'000
Year ended 31 March 2014
Property
Retail Offices Industrial development Total
Property assets 6 677 430 2 046 351 468 550 255 102 9 447 433
Trade and other receivables 41 822 10 602 2 751 3 460 58 635
Segmental assets 6 719 252 2 056 953 471 301 258 562 9 506 068
Non-distributable reserve 2 473 000 467 654 56 321 7 227 3 004 202
Segmental reserves 2 473 000 467 654 56 321 7 227 3 004 202
Trade and other payables 50 590 28 807 7 804 1 776 88 977
Segmental liabilities 50 590 28 807 7 804 1 776 88 977
R'000 R'000 R'000 R'000
Total Allocated Unallocated BEE transaction
Property assets 9 447 433 9 447 433 - -
Loans in respect of unit purchase scheme 384 016 - 384 016 -
Equipment 1 640 - 1 640 -
Intangible assets and goodwill 244 292 - 244 292 -
Interest in associate 1 863 174 - 1 863 174 -
Interest in joint ventures 226 763 - 226 763 -
Loan to CShell 299 Proprietary Limited - - 11 685 (11 685)
Loan receivable 86 303 - 86 303 -
Financial instruments 73 854 - 73 854 -
Deferred tax assets 2 921 - 2 921 -
Trade and other receivables 219 964 58 635 157 098 4 231
Tax receivable 602 - 602 -
Cash and cash equivalents 21 794 - 21 794 -
Total assets 12 572 756 9 506 068 3 074 142 (7 454)
Share capital and share premium 2 212 903 - 2 322 433 (109 530)
Non-distributable reserve 3 393 245 3 004 202 389 043 -
Accumulated loss (185 331) - (58 247) (127 084)
Total equity 5 420 817 3 004 202 2 653 229 (236 614)
Debentures 1 749 150 - 1 833 276 (84 126)
Financial liabilities 4 837 609 - 4 653 872 183 737
BEE instrument 142 300 - - 142 300
Trade and other payables 135 907 88 977 45 879 1 051
Debenture interest payable 286 973 - 300 775 (13 802)
Total liabilities 7 151 939 88 977 6 833 802 229 160
Segment assets, reserves and liabilities
Year ended 31 March 2013
R'000 R'000 R'000 R'000 R'000
Property
Retail Offices Industrial development Total
Property assets 5 518 390 1 924 320 382 245 123 530 7 948 485
Trade and other receivables 28 364 9 664 1 215 16 934 56 177
Segmental assets 5 546 754 1 933 984 383 460 140 464 8 004 662
Non-distributable reserve 2 157 107 425 325 43 286 (11 654) 2 614 064
Segmental reserves 2 157 107 425 325 43 286 (11 654) 2 614 064
Trade and other payables 46 565 22 577 10 610 4 838 84 590
Segmental liabilities 46 565 22 577 10 610 4 838 84 590
R'000 R'000 R'000 R'000
Total Allocated Unallocated BEE transaction
Property assets 7 948 485 7 948 485 - -
Loans in respect of unit purchase scheme 390 771 - 390 771 -
Equipment 1 400 - 1 400 -
Intangible assets and goodwill 256 934 - 256 934 -
Interest in joint venture 153 078 - 153 078 -
Listed investments 1 356 789 - 1 356 789 -
Loan to CShell 299 Proprietary Limited - - 17 186 (17 186)
Loan receivable 5 472 - 5 472 -
Deferred tax assets 13 434 - 12 545 889
Trade and other receivables 198 039 56 177 137 536 4 326
Tax receivable 1 265 - 1 265 -
Cash and cash equivalents 22 996 - 22 996 -
Total assets 10 348 663 8 004 662 2 355 972 (11 971)
Share capital and share premium 2 212 903 - 2 322 433 (109 530)
Non-distributable reserve 3 020 133 2 614 064 408 356 (2 287)
Accumulated loss (376 305) - (164 716) (211 589)
Total equity 4 856 731 2 614 064 2 566 073 (323 406)
Debentures 1 749 150 - 1 833 276 (84 126)
Financial liabilities 3 057 152 - 2 873 415 183 737
Financial instruments 47 981 - 44 804 3 177
BEE instrument 220 519 - - 220 519
Deferred tax liabilities 15 770 - 15 770 -
Trade and other payables 127 834 84 590 41 961 1 283
Debenture interest payable 273 526 - 286 681 (13 155)
Total liabilities 5 491 932 84 590 5 095 907 311 435
BASIS OF PREPARATION AND AUDIT OPINION
The audited summary consolidated financial statements are prepared in accordance with the requirements of
the JSE Limited Listings Requirements for provisional reports, and the requirements of the Companies Act
applicable to audited summary consolidated financial statements. The Listings Requirements require
provisional reports to be prepared in accordance with the framework concepts and the measurement and
recognition requirements of International Financial Reporting Standards (IFRS) and the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by
the Financial Reporting Standards Council and to also, as a minimum, contain the information required by IAS
34 Interim Financial Reporting. The accounting policies applied in the preparation of the audited consolidated
financial statements, from which the audited summary consolidated financial statements were derived, are in
terms of International Financial Reporting Standards.
The audited consolidated financial statements are prepared on the historical cost basis, except for investment
properties, investment properties held for sale, investment property under development, derivative financial
instruments, financial assets and available-for-sale financial assets which are measured at fair value.
The audited consolidated financial statements are prepared on the going concern basis. Acucap Properties
Limited has adopted the following new standards and amendments to standards, with an initial application date
of 1 April 2013: IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of
Interests in Other Entities, IFRS 13 Fair Value Measurement.
These audited summary consolidated financial statements for the year ended 31 March 2014 have been
audited by KPMG Inc., who expressed an unmodified opinion thereon. The auditor also expressed an
unmodified opinion on the audited consolidated financial statements from which these audited summary
consolidated financial statements were derived.
A copy of the auditor’s report on the audited summary consolidated financial statements and of the auditor’s
report on the audited consolidated financial statements are available for inspection at the company’s
registered office, together with the audited consolidated financial statements identified in the respective
auditor’s reports.
The information contained in the commentary below does not form part of the audit opinion.
The auditor’s report does not necessarily report on all of the information contained in this
announcement/financial results. 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 issuer’s registered office.
The preparation of the audited consolidated year-end results for the year ended 31 March 2014 and this
summarised report were supervised by the Financial Director, Mr CB Marlow, CA(SA).
COMMENTARY
1. REVIEW OF RESULTS AND OPERATIONS
Acucap’s board is pleased to report a distribution of 163.90 cents per unit (cpu) for the six months ended
31 March 2014. Together with the interim distribution of 159.89 cpu, this gives unitholders an annual
distribution of 323.79 cpu, a growth rate of 5.4% over the previous financial year.
2. CORPORATE ACTION
Conversion of capital structure
At a special general meeting held on 5 May 2014, Acucap unitholders voted to adopt a new
Memorandum of Incorporation and to change the capital structure of Acucap from linked units
(comprising a share of nominal value linked to a debenture) to no par value shares ("the Acucap
restructure"). As at the date of approval of these provisional financial results, the conditions precedent
to the Acucap restructure had not yet been fulfilled and accordingly the Acucap restructure had not yet
been implemented.
Merger with Sycom Property Fund (‘Sycom’)
On 31 March 2014, Acucap launched a general offer to holders of Sycom units to swap these for shares
in Acucap on a ratio of 0.58 Acucap shares for every Sycom unit held. The offer closed on 16 May 2014,
and the acceptance rate was approximately 95%, excluding the effects of the Growthpoint position
referred to below. The board considers this a successful and highly satisfactory outcome, and is now
pursuing various strategies to acquire the remaining units in Sycom not owned by Growthpoint.
Acquisition by Growthpoint Properties Limited (‘Growthpoint’)
Between 10 and 11 April 2014, Growthpoint acquired 34.9% of the issued units in Acucap from
institutional holders, settling the purchase consideration by issuing 1.9 Growthpoint shares for every
Acucap unit acquired. At the same time, Growthpoint acquired approximately 31% of the issued units in
Sycom, settling the purchase consideration by issuing 1.102 Growthpoint shares for every Sycom unit
acquired. Although publicly supportive of the merger between Acucap and Sycom, for regulatory
reasons, Growthpoint could not swap all of its Sycom units for Acucap units under the terms of the offer
referred to above, and is accordingly left holding approximately 23% of Sycom’s issued units.
To date, Growthpoint has made no formal approach to the board of Acucap to clarify its fuller intentions,
but the board will keep unitholders’ appraised of further developments in this regard.
3. PORTFOLIO INVESTMENT ACTIVITY
Greenacres
Phase 1 of the redevelopment of Greenacres has been approved and is expected to commence in August
2014.This phase comprises the construction of 3,340m(2) of retail area in a new link mall on the southern
side of Greenacres, which will join the current Woolworths with the Shoprite Hyper entrance. The total
capital commitment for this phase is in the order of R86m (Acucap share R43m) with an anticipated first
year return of 13.9%. Once completed, this phase will reflect the modern and contemporary standard to
which the rest of the mall will be upgraded when the second and third phases are completed. The total
capital commitment for the Greenacres project, including all non-income producing refurbishment work
and mall revitalisation, is in the order of R280m (Acucap share R140m) with an anticipated yield of 7.5%,
and is expected to be complete by March 2017.
Helderberg Hyper
Helderberg Hyper, a new 24,000m(2) shopping centre anchored by Checkers Hyper and situated adjacent to
Somerset Mall, opened successfully on 24 April 2014. The centre was 97% let on opening with very strong
trade reported from all retail tenants.
WaterCrest Mall
The development of WaterCrest Mall is within budget and on schedule to open in April 2015. An
additional 7,000m(2) of retail rights has been provisionally approved and the intention is to increase the
gross lettable area of the shopping centre to approximately 50,000m(2) in the initial development.
National retailers have been secured for all the shops allocated to them and good progress is currently
being made in the letting of the smaller line shops.
Key West Shopping Centre
The final phase of the Key West redevelopment is due for completion in November, when the Virgin Gym
will be relocated to its new position overlooking the waterfront. Growth in the overall trading densities at
Key West over the past year has been similar to that experienced by the other shopping centres in the
portfolio, and the impact from the opening of the nearby Cradlestone Mall has been marginal. A number
of national retailers have shown confidence in Key West by recapitalizing their stores in the last six
months, and there is strong demand for the new retail shops currently under construction as part of the
Virgin Gym relocation phase. Planning is underway to re-develop the existing gym space.
Golf Park
The development of the new RCS head office at Golf Park is on budget and handover to RCS is expected in
October 2014. The Board has, subject to normal conditions, approved the development of the last bulk
available at Golf Park in a manner that will provide an additional 2,250m(2) of office space, increase the
overall parking ratio of the park to 5 bays per 100m(2) and rectify certain design impediments to the
entrances of Golf Park 1 and Golf Park 2. The total capital commitment is in the order of R113.5m with an
anticipated first year return of 8%. On completion, Golf Park will comprise 26,907m(2) of offices.
4. PORTFOLIO PERFORMANCE
Contribution to net income
On the basis of individual assets and asset segments, Acucap’s net income is attributable as follows:
Contractual Net property Net property
rental income income income
attributable to attributable to attributable to
external external external
customers customers customers
(excluding (excluding (excluding
property % of property % of property % of
development) total development) total development) total
31 March 2014 31 March 2014 31 March 2013
R'000 R'000 R'000
Festival Mall 113 974 17.1% 100 436 17.0% 93 678 16.4%
Bayside Centre 83 893 12.6% 72 579 12.3% 67 109 11.7%
Key West 73 985 11.1% 64 590 11.0% 58 045 10.1%
Gardens Centre 42 190 6.3% 33 919 5.8% 31 835 5.6%
Other retail 162 708 24.4% 145 667 24.7% 144 733 25.2%
Total retail 476 750 71.5% 417 191 70.8% 395 400 69.0%
Offices 170 218 25.5% 153 912 26.1% 163 312 28.5%
Industrial 20 346 3.0% 18 108 3.1% 14 493 2.5%
Total (excluding
property
development) 667 314 100.0% 589 211 100.0% 573 205 100.0%
Property
development 4 467 (13 033) 1 483
Straight lining
adjustment 8 048 8 048 6 380
Loss on disposal of
investment
properties (202) (962)
Total allocated to
operating
segments per
segmental
information 679 829 584 024 580 106
Bad debts written off of R1.55 million were lower than the R2.26 million written off in the prior year, while the provision for
impairment of tenant receivables decreased similarly from R3.6 million to R2.2 million at 31 March 2014. The normalisation of
bad debts and provisions in the current year was expected as the spike in 2013 was attributable to an individual
tenant failure, and was not an indication of a general deterioration in the credit environment.
5. BORROWINGS
The group has total borrowings of R4.65 billion. Interest rates are hedged on 55.2% of total borrowings,
with a weighted average maturity of 3.6 years. The weighted average cost of all debt funding is 8.03%.
The gearing ratio at 31 March 2014 was 38.5%, up from 28.5% at the end of March 2013 as no units were
issued during the year. At year-end, Acucap had unutilised long-term facilities of R1 billion. Forward
starting swaps already contracted and detailed below will lift the hedging profile to approximately 75% of
current borrowings by March 2017.
Interest rate hedging
Start date Maturity Fixed Notional Effective Fair value at Fair value at
date rate amount rate 31.03.14 31.03.13
R'000 R'000 R'000
Swaps
30-Sep-13 30-Sep-16 5.880% 100 000 7.380% 2 834 (125)
30-Sep-13 28-Sep-18 6.450% 100 000 7.950% 4 825 (386)
31-Mar-14 31-Mar-17 6.190% 100 000 7.690% 2 987 (193)
31-Mar-14 29-Mar-19 6.740% 100 000 8.240% 4 480 (406)
30-Sep-14 29-Sep-17 6.505% 100 000 8.005% 3 235 (239)
30-Sep-14 30-Sep-19 7.015% 100 000 8.515% 4 575 (306)
30-Sep-14 30-Sep-16 7.180% 500 000 8.680% - -
31-Mar-15 29-Mar-18 6.340% 370 000 7.840% 16 207 -
31-Mar-15 29-Mar-19 6.600% 300 000 8.100% 16 035 -
30-Sep-15 28-Sep-18 7.650% 300 000 9.150% 5 067 -
31-Mar-16 29-Mar-19 7.940% 600 000 9.440% 8 579 -
31-Mar-16 31-Mar-20 8.150% 200 000 9.650% 3 200 -
31-Mar-16 31-Mar-21 8.340% 200 000 9.840% 3 195 -
Fra's
26-Sep-14 29-Dec-14 6.770% 1 140 000 8.270% (143) -
29-Dec-14 26-Mar-15 7.030% 1 140 000 8.530% (175) -
26-Mar-15 26-Jun-15 7.340% 470 000 8.840% (643) -
26-Jun-15 28-Sep-15 7.610% 470 000 9.110% (404) -
6. LEASE EXPIRIES
Over the longer-term, the fund continues to show a good, long-dated lease expiry profile. The table
below shows the pattern of expiries for all leases in the Acucap portfolio, measured by rental income.
Lease expiry profile by revenue by sector
Total Retail Offices Industrial
Mar-15 23.1% 17.4% 5.0% 0.7%
Mar-16 20.2% 14.9% 5.1% 0.2%
Mar-17 17.5% 14.7% 2.7% 0.1%
Mar-18 12.1% 6.1% 5.7% 0.3%
Mar-19 10.7% 7.5% 1.9% 1.3%
Thereafter 16.4% 11.8% 4.0% 0.6%
Total 100.0% 72.4% 24.4% 3.2%
7. VACANCIES
Total vacancies by gross lettable area (GLA) have increased from 1.8% at the end of March 2013 to 3.0% a
year later as a result of a planned vacancy at the Albion Springs office building, which is undergoing a
major refurbishment.
The table below shows the vacancy attributable to each segment of the Acucap portfolio by GLA:
Vacancy profile by sector by GLA
% of Total GLA
Retail vacancy 1.0%
Office vacancy 1.7%
Industrial vacancy 0.3%
GLA let 97.0%
8. EVENTS AFTER THE REPORTING DATE
Other than the corporate action detailed above there have been no significant events after the
reporting date.
9 PROSPECTS
Acucap linked unitholders are referred to the circular, dated 31 March 2014 and available on the Company’s
website, www.acucap.co.za, and the joint announcement released by Acucap and Sycom on SENS on
27 March 2014, for the forecast financial information on Acucap and Sycom, post the Acucap Sycom merger
("Forecast Financial Information"). The Forecast Financial Information was, at the time, reviewed by KPMG
Inc.
In line with the Forecast Financial Information, the board expects distribution growth to be between 6% and
7% for the year ended 31 March 2015. This guidance has not been reviewed or reported on by the
Company’s auditors.
10. DISTRIBUTION
Notice is hereby given that a final distribution of 163.90 cents per linked unit has been
approved in respect of the six-month period ended 31 March 2014. The last date to trade the
linked units cum distribution is Friday, 20 June 2014 and the record date will be Friday,
27 June 2014. The linked units will start trading ex-distribution from Monday, 23 June 2014.
Distributions will be made to unitholders on Monday, 30 June 2014.
Linked unit certificates may not be dematerialised or rematerialised between Monday,
23 June 2014 and Friday, 27 June 2014 both days inclusive.
Unitholders are referred to the distribution declaration announcement released on SENS on
5 June 2014 for further information regarding the distribution, including the tax effects.
From 1 January 2014, any qualifying distribution received by a non-resident from a REIT will be
subject to dividend withholding tax at 15%, unless the rate is reduced in terms of any applicable
agreement for the avoidance of double taxation ("DTA") between South Africa and the country of
residence of the linked unitholder.
Assuming dividend withholding tax will be withheld at a rate of 15%, the net amount due to non-resident
Linked unitholders will be 139.315 cents per unit. A reduced dividend withholding tax rate in
terms of the applicable DTA, may only be relied on if the non-resident linked unitholder has provided
the following forms to their CSDP or broker, as the case may be, in respect of the uncertificated linked units,
or the Transfer Secretaries, in respect of
certificated linked units:
a) a declaration that the dividend is subject to a reduced rate as a result of the application of a DTA; and
b) a written undertaking to inform their CSDP, broker or the Transfer Secretaries, as the case may be, should
the circumstances affecting the reduced rate change or the beneficial owner cease to be the beneficial owner,
both in the form prescribed by the Commissioner for the South African Revenue Service.
Linked unitholders are referred to the announcement of 5 June 2014 for further information regarding the
abovementioned documents.
Local tax resident linked unitholders as well as non-resident linked unitholders are encouraged to consult their
professional advisors should they be in any doubt as to the appropriate action to take.
UPDATE ON TIMING OF ACUCAP RESTRUCTURE AND SYCOM OFFER
Acucap linked unitholders are referred to the announcements released by Acucap and Sycom Property Fund
("Sycom") on 19 May 2014 and 5 June 2014 in terms of which linked unitholders were advised that the Acucap
restructure remained subject to the following conditions precedent:
a) the new memorandum of incorporation of Acucap being acknowledged by the Companies and Intellectual
Property Commission ("CIPC") as having been placed on file; and
b) the Takeover Regulation Panel issuing the requisite compliance certificate in respect of the Acucap
restructure under section 121 of the Companies Act No 71 of 2008.
Unitholders are hereby advised that the new memorandum of incorporation of Acucap was lodged with the CIPC
immediately following the Acucap general meeting, however Acucap has, to date, not received the
acknowledgement of filing from the CIPC.
Accordingly, the abovementioned conditions precedent to the Acucap restructure have not yet been fulfilled.
A further announcement will be made in due course confirming the revised salient dates and times applicable to
the Acucap restructure and the Acucap offer to Sycom unitholders, including the record date and pay date.
On behalf of the Board
BS KANTOR PA THEODOSIOU
Chairman Managing Director
12 June 2014
Registered Office:
Suite A11 Westlake Square
Westlake Drive
Westlake
CAPE TOWN
7966
Transfer secretaries:
Computershare Investor Services Proprietary Limited
70 Marshall Street
JOHANNESBURG
Sponsor:
Questco Proprietary Limited
http://www.acucap.co.za
info@acucap.co.za
Directors: Prof BS Kantor (Chairman), PA Theodosiou*# (Managing Director), FM Berkeley, RC Frolich, N Mandindi,
CB Marlow *, MS Moloko, JH Rens*, B Stevens, NDC Whale
Company secretary: H H-O Steyn
* Executive # British
Date: 12/06/2014 05:12:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.