Sectors Shares

ACUCAP PROPERTIES LIMITED - Provisional Financial Results , Dividend Finalisation announcement and update on Acucap Restructure and Offer

Release Date: 12/06/2014 17:12
Code(s): ACP
 
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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'). 
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