Wrap Text
Unaudited results for the 6 months ended 31 March 2015
ARROWHEAD PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2011/000308/06)
JSE share code: AWA ISIN: ZAE000158101
JSE share code: AWB ISIN: ZAE000158119
(Approved as a REIT by the JSE)
(“Arrowhead” or “the company”)
UNAUDITED RESULTS FOR THE 6 MONTHS ENDED 31 MARCH 2015
- Distribution of 74,49 cents per combined A and B unit. Growth of 19,03%, 6 months on 6 months;
- Core property portfolio growth of 9,0%; and
- Forecast distribution of R1,49 for the year, 11,83% higher than the previous year and against previous guidance of
11.0% (R1,479).
Nature of business
Arrowhead is a Real Estate Investment Trust (“REIT”) holding a diverse portfolio of commercial (office, retail and industrial)
and residential properties throughout South Africa. Its main focus is on paying growing income returns to its investors. This is
achieved through escalating rentals in terms of leases with tenants, satisfactory renewal of leases with existing tenants,
renting of vacant space within the property portfolio, managing and reducing, where possible, costs associated with the property
portfolio and by acquiring revenue enhancing properties.
Consolidated financial performance for the 6 months ended 31 March 2015
31 March 2015 31 March 2014
R’000 R’000
Revenue (excluding straight line rental income) 555 644 270 456
Listed security income 18 926 12 687
Property expenses (177 732) (92 481)
Administration and corporate expenses (12 782) (11 881)
Finance expenses (104 598) (34 516)
Finance income 13 423 15 513
Distributable income 292 881 159 778
Antecedent income 21 171 27 770
Total distribution 314 052 187 548
Property expenses as a percentage of revenue 32,0% 34,2%
Distribution for the quarter ended 31 December 2014 156 370 87 566
Distribution for the quarter ended 31 March 2015 157 682 99 982
Distribution per combined unit for the quarter ended 31 December 2014 37,09 30,20
Distribution per combined unit for the quarter ended 31 March 2015 37,40 32,38
Total distribution for the 6 months ended 31 March 2015 74,49 62,58
Commentary
Consolidated condensed statement of comprehensive income
RENTAL INCOME
Revenue includes rental income and expenditure that is recoverable from tenants.
Revenue has increased from R270,5 million to R555,6 million as the full effect of the acquisitions concluded during the previous
financial year, together with the partial impact of acquisitions concluded during this period and annual escalations to the
existing leases, are taken into account.
The results for the 6 months ended 31 March 2015 include the results from the acquisitions of Vividend Income Fund Limited
(“Vividend”) and JIKA Properties Proprietary Limited (“JIKA”), both of which were implemented after 31 March 2014.
Set out below is the letting report for the 6 months ended 31 March 2015.
Total m² Let m² Vacant m² Let % Vacant %
At beginning of the
year 1 October 2014 868 301 813 953 54 346 93,7 6,3
Acquisitions 20 338 20 338 - - -
Disposals (7 734) 5 850 (1 884) - -
Adjustments 439 439 - - -
Adjusted totals 881 344 840 580 52 462 3,7 6,3
Net (loss)/gains - (25 718) 25 718 (2,6) 2,6
At the end of the 6
months 31 March 2015
(excludes residential) 881 344 814 862 78 180 91,1 8,9
Tenant retention between 1 October 2014 to 31 March 2015.
Tenants
Leases expired retained % Renewed
during the 6 months within the 6 during 6
m² months m² months
Totals 76 761 42 394 55,2
Percentage of m² re-let from tenants not retained, between 1 October 2014 to 31 March 2015.
Space re-let
from the
Tenants not tenant not Re-let
retained during retained 6 during the
the 6 months m² months m² 6 months %
Totals 34 367 13 321 38,8
The tenant retention ratio for the 6 months ended 31 March 2015 at 55,2% is lower than experienced by Arrowhead in previous
periods mainly due to the impact of: Ellerines Furnishers (12 010 m²), ABSA Bank Beyers Naude (3 081 m²) and ABSA Bank Rosebank
(1 497 m²) not renewing their leases. Furthermore an industrial tenant at Tarry’s Head Office (10 824 m²), and a government
tenant in Port Elizabeth, did not renew their leases. Of the 34 367 m² not renewed, 13 321 m² has been re-let bringing the re-
occupancy ratio of lease expiries up to 73,0%. None of these, with the exception of Tarry’s Head Office, were expected to renew
their leases and income on vacant space was not taken into account in determining the forecast distribution.
These non-renewals has led to an increased vacancy of 8,9% but presents the opportunity to increase the forecasted distribution
once these premises are let.
LISTED SECURITIES INCOME
The listed securities income is in respect of the income received on the Dipula Income Fund (“Dipula”) B linked units.
PROPERTY EXPENSES
Property expenses have increased from R92,5 million to R177,7 million which is in line with the recently acquired portfolio. The
ratio of property expenses to revenue has improved marginally to 32,0% from 34,2%. The recovery of municipal expenses has
increased from 91,0% to 92,0% as the processing of recoveries has become more efficient.
All other property related expenditure has increased in line with the enlarged property portfolio.
ADMINISTRATIVE AND CORPORATE EXPENSES
Administrative and corporate expenses have increased from R11,9 million to R12,8 million. The largest contributor to
administrative expenses is salaries, which has increased as a result of the yearly increases and a new staff complement required
due to the newly acquired portfolio.
Admin expenses 2015 % of 2014 % of
R’000 total R’000 total
Salaries 7 200 56,3 6 663 56,0
Professional service fees 1 996 15,7 2 358 19,9
Other 3 586 28,0 2 860 24,1
TOTAL 12 782 100,0 11 881 100,0
INTEREST RECIEVED
Interest received income which comprises, interest on loan units, interest on cash balances and other, decreased from R15,5 million to
R13,4 million. The repayment of the loan to the Arrowhead Charitable Trust has resulted in the interest received being lower than the
previous period.
Antecedent income was recognised on the proceeds of the book build of R600,0 million implemented in February 2015.
Interest received 2015 % of 2014 % of
R’000 total R’000 total
Interest on loan units 10 014 74,6 5 230 33,7
Interest on cash balances 2 843 21,2 643 4,1
Arrowhead Charitable Trust - - 5 614 36,2
Other 566 4,2 4 026 26,0
TOTAL 13 423 100,0 15 513 100,0
FINANCE CHARGES
Finance charges have increased from R34,5 million to R104,6 million. The increase is due to the acquisition of investment
properties totalling R3,5 billion. In order to partially fund these acquisitions the gearing has increased from R872,1 million
(31 March 2014) to R2,3 billion.
Arrowhead has entered into interest rate swaps to hedge its exposure to fluctuations in interest rates as follows:
- R189 m until 31 May 2017;
- R140 m until 15 August 2017;
- R35 m until 31 August 2017;
- R629 m until 31 March 2018;
- R72 m until 31 May 2018;
- R113 m until 17 June 2019; and
- R595 m until 2 September 2019.
The secured financial liabilities of R2,3 billion (31 March 2014: R872,1 million) measured against investment properties of R7,3 billion
(2014: R3,2 billion) represents a loan to value of 31,5% and 22,9% respectively. Of the secured financial liabilities of R2,3 billion,
R2,2 billion has been hedged, equating to 96% of total loans outstanding. Arrowhead’s target loan to value is around 35,0%.
In terms of Arrowhead’s treasury function, excess funds are placed in an access facilities within the secured financial
liabilities to reduce the overall interest charge. The effective interest rate for the 6 months ended 31 March 2014 was 9,0% (2014: 8,6%).
Term facilities
Maturity Fixed 3 month Jibar Prime Capital
Rate % Margin % rate margin R’000
%
August 2017 - - Minus 1,45 200 000
March 2018 - - Minus 1,30 55 700
March 2018 - 2,10 - 280 000
December 2018 - 1,77 - 300 000
April 2019 - 2,10 - 60 000
April 2019 - 1,77 - 270 000
August 2019 - 1,75 - 610 000
March 2020 9,37 - - 387 284
March 2020 - 2,54 - 92 716
2 255 700
Consolidated Condensed statement of financial position
STATEMENT OF FINANCIAL POSITION
Unaudited for Unaudited for Audited
6 months ended 6 months ended 30 September
31 March 31 March
2015 2014 2014
ASSETS R’000 R’000 R’000
Non–current assets 8 226 474 4 862 728 7 601 370
Investment property 7 258 399 3 802 919 6 967 844
Property, plant and equipment 253 325 310
Loans to participants of Arrowhead Unit Purchase Trust 255 047 143 292 142 950
Loans to Arrowhead Charitable Trust - 134 010 -
Investment in Vividend - 433 444 -
Investment in Vividend Manco - 88 600 -
Goodwill 176 830 - 176 830
Finance assets 513 236 252 459 290 727
Derivative instruments 22 709 7 679 22 709
Current assets 529 815 39 093 114 377
Trade and other receivables 36 603 9 920 31 302
Cash and cash equivalents 493 212 29 173 83 075
Non-current assets held for sale - - 47 500
Total assets 8 756 289 4 901 821 7 763 247
Equity and liabilities
Shareholders’ interest and stated capital 1 027 347 554 160 828 693
Non–current liabilities – debentures 5 103 285 3 332 155 4 256 279
Linked unitholders interest 6 130 632 3 886 315 5 084 972
Other non–current liabilities 2 268 725 872 140 2 373 910
Secured financial liabilities 2 250 498 872 140 2 355 684
Derivative instruments 18 227 - 18 226
Current liabilities 356 932 143 366 304 365
Trade and other payables 199 250 43 384 166 269
Unitholders for distribution 157 682 99 982 138 096
Total equity and liabilities 8 756 289 4 901 821 7 763 247
INVESTMENT PROPERTY
Investment property has increased from R7,0 billion to R7,3 billion. The number of commercial properties within the portfolio
has increased from 89 at listing in 2011 to 155 at present, with the average value per property increasing from R17,0 million to
R41,6 million. The average lease profile is 3,7 years. The number of residential properties within the portfolio has increased
from 30 to 36. An additional 60 residential properties were acquired in April 2015.
Arrowhead made the following acquisitions during the 6 month period ended 31 March 2015:
Property Sector Transfer date R’000
Amberfield Residential 1 November 2014 45 583
Park Village Residential 1 January 2015 84 808
Golden Views Residential 1 March 2015 61 172
Molrow House Residential 1 March 2015 10 127
Bree Street Block Residential 1 March 2015 55 700
TOTAL 257 390
Arrowhead acquired the following properties after the 6 month period ended 31 March 2015:
Property Sector Transfer date R’000
JIKA 2 Residential 1 April 2015 545 000
Highveld View Residential 1 April 2015 286 500
831 500
Arrowhead sold the following properties during the 6 month period ended 31 March 2015:
Property Sector Transfer date R’000
Premier Milling Commercial 25 November 2014 35 000
Emerson Commercial 15 December 2014 12 500
TOTAL 47 500
Arrowhead has agreed to sell the following properties after the 6 month period ended 31 March 2015:
Property Sector R’000
Fabriek and Sterling Industrial 13 775
Benoni Rynfield Retail 30 000
ABSA Beyers Naude Office 26 800
70 575
PROPERTY PORTFOLIO
By sector
Sector R’000 Value % m² % Let
Office 2 960 380 40,8 334 027 90,0
Retail 2 693 160 37,1 298 090 91,0
Industrial 817 001 11,3 249 227 94,0
Residential 787 858 10,8 99 678 98,0
Total 7 258 399 100,0 981 022
By region
Region R’000 alue % m² Let
Gauteng 3 687 492 50,8 551 568 92,0
Eastern Cape 368 717 5,1 48 666 90,0
Western Cape 1 188 678 16,4 105 858 94,0
Limpopo 217 098 3,0 30 615 91,0
Mpumalanga 221 683 3,1 42 698 83,0
Free State 35 593 0,5 15 295 100,0
Kwa-Zulu Natal 786 328 10,8 103 458 86,0
Northern Cape 222 341 3,1 30 740 90,0
North West Province 530 469 7,2 52 124 91,0
Total 7 258 399 100,0 981 022
Average Rental m² per Sector
Sector Rental p/m²
Commercial R102
Industrial R33
Retail R98
Sector Rental per unit per month
Residential R5 311
CORE PORTFOLIO
NET INCOME GROWTH ON PROPERTIES OWNED AT 1 OCTOBER 2013 AND STILL OWNED ON 31 MARCH 2015
Description October 2014 to October 2013 to % Growth
March 2015 March 2014
R’000 R’000
Rental 199 424 186 198 7,1
Recoveries 56 445 55 929 0,9
Property expenses (87 060) (83 555) 4,2
Net operating income 168 808 158 572 6,5
Assuming a gearing ratio on the portfolio of 31% and an annual effective interest rate of 9,0% the total growth in distributable
income is 9%.
LOANS TO PARTICIPANTS OF ARROWHEAD UNIT PURCHASE TRUST
Loans to participants of the Arrowhead Unit Purchase Trust have increased from R143,0 million to R255,1 million due to loans
being advanced to participants of the unit purchase trust in November 2014. The recipients include the executive directors and
staff of Arrowhead and the loans are used to subscribe for units in Arrowhead at market value and are secured by the cession of
the units to company. The loans bear interest at the company’s effective rate of borrowings.
FINANCIAL ASSETS
Financial assets, which comprise of an investment in Dipula B linked units, increased from R290,7 million to R513,2 million
which includes a mark to market adjustment of R149,0 million.
TRADE AND OTHER RECEIVABLES
Trade receivables, deposits and payments in advance have increased from R31,3 million to R36,6 million. The trade receivables
balance outstanding has increased from the prior year as a result of the enlarged property portfolio. Trade receivables
outstanding at 31 March 2015 amounted to R15,2 million (of which R7,5 million has been provided for) or 2,8% of revenue. All
trade receivables outstanding for more than 90 days (in addition to specific trade receivables that are deemed to be impaired)
have been provided for.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents have increased from R83,1 million to R493,2 million as a result of cash generated by the property
portfolio and the book build of R600,0 million which was used to fund property acquisitions.
NON-CURRENT LIABILITIES - DEBENTURES
Debentures has increased from R4,3 billion to R5,1 billion. The increase is a result of the issue of linked units pursuant to
the book build, the issue of linked units to fund the acquisition of additional Dipula B linked units and the issue of units to
participants of the Arrowhead Unit Purchase Trust.
SECURED FINANCIAL LIABILITIES
Secured financial liabilities have decreased from R2,4 billion to R2,3 billion. The decrease is due to excess funds being
deposited into secured access facilities.
TRADE AND OTHER PAYABLES
Trade and other payables increased from R166,3 million to R199,3 million. The increase was as a result of the enlarged
portfolio.
PROSPECTS
The distribution for the six months ended 31 March 2015 is 19,03% higher than the comparable six months ended 31 March 2014.
Based on the acquisitions concluded to date and the performance of the existing portfolio, management expects to achieve a
distribution per combined A and B linked unit for the year ended 30 September 2015 of R1,49 i.e. 11,82% growth on the
distribution to 30 September 2014.
Arrowhead has cancelled a lease it has with Monash University due to non-payment of rent. The lease is in respect of 333
apartments used for student accommodation. Rental on these units have not been taken into account in the forecast.
These projections have not been audited or reviewed by Grant Thornton.
Summary of financial performance for the 6 months ended 31 March 2015
Unaudited six Unaudited six Audited as at
months ended months ended 30 September
31 March 2015 31 March 2014 2014
Distribution per A linked unit for 6 months ended 31 March (cents) 37,25 31,29 66,62
Distribution per B linked unit for 6 months ended 31 March (cents) 37,25 31,29 66,62
A Linked units in issue 421 607 408 308 779 320 370 064 585
B Linked units in issue 421 607 408 308 779 320 370 064 585
Net asset value per A and B linked unit (cents)^ 1454 1258 1374
Net tangible asset value per A and B lined unit (cents)# 1412 1258 1326
Gearing ratio %* 31,5% 22,9% 33,5%
^ Net asset value is the total equity attributable to equity holders and linked debentures.
# Net tangible asset value is the total equity attributable to equity holders and linked debentures excluding goodwill
.
* The gearing ratio is calculated by dividing interest-bearing liabilities, excluding linked debenture liabilities, by
investment properties.
At 31 March 2015, Arrowhead`s borrowings of R2,3 billion (2014: R2,4 billion) translates into a gearing ratio of 31,0% (2014:
33,8%).
Payment of distributions for the quarter ended 31 March 2015
The board of directors has approved and notice is hereby given of distributions (distribution number: 14) of 18,700 cents per A
linked unit and 18,700 cents per B linked unit for the quarter ended 31 March 2015 in accordance with the abbreviated timetable
set out below:
2015
Last date to trade cum distribution Friday, 29 May
Linked units trade ex-distribution Monday, 1 June
Record date Friday, 5 June
Payment date Monday, 8 June
Linked unit certificates may not be dematerialised or rematerialized between Monday, 1 June 2015 and Friday 5 June 2015, both
days inclusive.
Payment of the dividend will be made to shareholders on Monday, 8 June 2015. In respect of dematerialised shares, the dividend
will be transferred to the CSDP/brokers accounts on Monday, 8 June 2015. Certificated linked unitholders’ dividend payments will
be posted on or about Monday, 8 June 2015.
In accordance with Arrowhead’s status as a REIT, linked unitholders are advised that the distributions meets the requirements of
a “qualifying distribution” for the purposes of section 25BB of the Income Tax Act, No. 58 of 1962 (“Income Tax Act”). The
distributions on the linked units will be deemed to be dividends, for South African tax purposes, in terms of section 25BB of
the Income Tax Act.
The distributions received by or accrued to South African tax residents must be included in the gross income of such linked
unitholders and will not be exempt from income tax (in terms of the exclusion to the general dividend exemption, contained in
paragraph (aa) of section 10(1) (k) (i) of the Income Tax Act) because they are dividends distributed by a REIT. These
distributions are, however, exempt from dividend withholding tax in the hands of South African tax resident linked unitholders,
provided that the South African resident linked unitholders provided the following forms to their Central Securities Depository
Participant (“CSDP”) or broker, as the case may be, in respect of uncertificated linked units, or the company, in respect of
certificated linked units:
a) a declaration that the distributions are exempt from dividends tax; and
b) a written undertaking to inform the CSDP, broker or the company, as the case may be, should the circumstances affecting the
exemption 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 advised to contact their CSDP, broker or the company, as the case may be, to arrange for the abovementioned documents to be
submitted prior to payment of the distributions, if such documents have not already been submitted.
Distributions received by non-resident linked unitholders will not be taxable as income and instead will be treated as ordinary
dividends which is exempt from income tax in terms of the general dividend exemption in section 10(1)(k)(i) of the Income Tax
Act. It should be noted that up to 31 December 2013 distributions received by non-residents from a REIT were not subject to
dividend withholding tax. From 1 January 2014, any distributions 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 unitholders. Assuming dividend withholding tax
will be withheld at a rate of 15%, the net dividend amount due to non-resident linked unitholders is 15,89500 cents per A linked
unit and 15,89500 cents per B linked unit. A reduced dividend withholding 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 uncertificated linked units, or the company, in respect of certificated linked units:
a) a declaration that the distributions are 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 company, 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. Non-resident linked unitholders are
advised to contact their CSDP, broker or the company, as the case may be, to arrange for the abovementioned documents to be
submitted prior to payment of the distribution if such documents have not already been submitted, if applicable.
Linked unitholders are encouraged to consult their professional advisors should they be in any doubt as to the appropriate
action to take.
A linked units in issue at the date of declaration of distributions: 421 607 408
B linked units in issue at the date of declaration of distributions: 421 607 408
Arrowhead’s income tax reference number: 9779/439/15/8.
Basis of preparation
The unaudited results for the six months ended 31 March 2015 have not been audited or reviewed by the company`s independent
auditors. The financial statements have been prepared in accordance with the requirements of International Financial Reporting
Standards, the SAICA Financial Reporting Guides as issued by the Financial Practices Committee as issued by the Financial
Reporting Standard Council, IAS 34: Interim Financial Reporting, the JSE Listings Requirements and the requirements of the South
African Companies Act, 2008. These results have been prepared under the supervision of Imraan Suleman, Arrowhead’s Chief
Financial Officer.
The first-time adoption of new standards, are consistent with those applied in the previous annual financial statements for the
year ended 30 September 2014.
The following new standards were adopted during the period:
- Amendments to IFRS 10, IFRS 12 and IAS 27 - Investment entities;
- Amendment to IAS 32 - Offsetting Financial Assets and Financial Liabilities;
- Amendment to IAS 36 - Recoverable amount disclosures for non-financial assets;
- Amendment to IAS 39 - Novation of derivatives and continuation of hedge accounting; and
- IFRIC 21 Levies.
None of these standards had a material impact on these interim results.
The accounting policies adopted are consistent with those applied in the prior period.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited for 6 Unaudited for Audited year
months ended 6 months ended ended
31 March 31 March 30 September
2015 2014 2014
R’000 R’000 R’000
Rental income 555 644 270 456 712 239
Straight line rental income 18 040 12 535 25 795
Listed securities income 18 926 12 687 65 789
Total revenue 592 610 295 678 803 823
Property expenses (177 732) (92 481) (245 510)
Administrative and corporate expenses (12 782) (11 881) (26 709)
Net operating profit 402 096 191 316 531 604
Changes in fair value 149 046 - 272 392
Profit from operations 551 142 191 316 803 996
Finance charges (104 598) (34 516) (115 007)
Interest received 13 423 15 513 13 999
Profit before debenture interest and taxation 459 967 172 313 702 988
Debenture interest (261 313) (148 341) (375 201)
Profit before taxation 198 654 23 972 327 787
Taxation - - -
Total comprehensive income for the period 198 654 23 972 327 787
Reconciliation of earnings, headline earnings and distributable earnings
Profit for the period attributable to the equity holders 198 654 23 972 327 787
Adjustments:
Debenture interest 261 313 148 341 375 201
Earnings 459 967 172 313 702 988
Changes in fair value of investment properties - - (219 627)
Profit on sale of property - - (7 955)
Headline profit attributable to linked unitholders 459 967 172 313 475 406
Straight line rental income accrual (18 040) (12 535) (25 795)
Antecedent interest 21 171 27 770 31 599
Transaction costs on business combination - - 6 409
Changes in fair values of listed securities and financial instruments (149 046) - (44 811)
Distributable earnings attributable to unitholders 314 052 187 548 442 808
Number of A linked units in issue 421 607 408 308 779 320 379 064 585
Number of B linked units in issue 421 607 408 308 779 320 379 064 585
Total number of linked units 843 214 816 617 558 640 740 129 170
Weighted average number of A linked units in issue 391 133 761 245 949 460 278 806 529
Weighted average number of B linked units in issue 391 133 761 245 949 460 278 806 529
Basic and diluted earnings per A linked unit (cents) 58,88 35,03 126,07
Basic and diluted earnings per B linked unit (cents) 58,88 35,03 126,07
Headline and diluted headline earnings per A linked unit (cents) 58,88 35,03 85,26
Headline and diluted headline earnings per B linked unit (cents) 58,88 35,03 85,26
CONDENSED STATEMENT OF FINANCIAL POSITION
Unaudited for Unaudited for Audited 30
6 months ended 6 months ended September
31 March 31 March
2015 2014 2014
ASSETS R’000 R’000 R’000
Non–current assets 8 226 474 4 862 728 7 601 370
Investment property 7 258 399 3 802 919 6 967 844
Property, plant and equipment 253 325 310
Loans to participants of Arrowhead Unit Purchase Trust 255 047 143 292 142 950
Loans to Arrowhead Charitable Trust - 134 010 -
Investment in Vividend - 433 444 -
Investment in Vividend Manco - 88 600 -
Goodwill 176 830 - 176 830
Finance assets 513 236 252 459 290 727
Derivative instruments 22 709 7 679 22 709
Current assets 529 815 39 093 114 377
Trade and other receivables 36 603 9 920 31 302
Cash and cash equivalents 493 212 29 173 83 075
Non-current assets held for sale - - 47 500
Total assets 8 756 289 4 901 821 7 763 247
Equity and Liabilities
Shareholders’ interest and stated capital 1 027 347 554 160 828 693
Non–current liabilities – debentures 5 103 285 3 332 155 4 256 279
Linked unitholders interest 6 130 632 3 886 315 5 084 972
Other non–current liabilities 2 268 725 872 140 2 373 910
Secured financial liabilities 2 250 498 872 140 2 355 684
Derivative instruments 18 227 - 18 226
Current liabilities 356 932 143 366 304 365
Trade and other payables 199 250 43 384 166 269
Unitholders for distribution 157 682 99 982 138 096
Total equity and liabilities 8 756 289 4 901 821 7 763 247
CONDENSED STATEMENT OF CHANGES IN EQUITY
Shareholders’
interest and
stated capital
R’000
Balance at 30 September 2013 500 906
Total comprehensive income for the year 327 787
Balance at 30 September 2014 828 693
Total comprehensive income for the period 198 654
Balance at 31 March 2015 1 027 347
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited for Unaudited for Audited 30
6 months 6 months September
ended 31 ended
March 31 March
2015 2014 2014
R’000 R’000 R’000
Net Cash flow from operating activities 47 264 43 597 93 493
Net Cash outflows from investing activities (235 208) (646 674) (1 364 550)
Net Cash inflows from financing activities 598 081 606 866 1 328 748
Net movement in cash and cash equivalents 410 137 3 789 57 691
Cash and cash equivalents at the beginning of the year 83 075 25 384 25 384
Cash and cash equivalents at the end of the period 493 212 29 173 83 075
Operating segment
The entity has three reportable segments based on the geographic split of the country which are the entity’s strategic business
segments. For each strategic business segment, the entity’s executive directors review internal management reports on a monthly
basis. All segments are located in South Africa. There are no single major tenants.
The following summary describes the operations in each of the entity’s reportable segments.
31 March 2015
Eastern
R’000 Gauteng KZN Other Total
Cape
Rental income 337 488 63 163 29 607 125 386 555 644
Straight line rental income - - - 18 040 18 040
Listed securities income - - - 18 926 18 926
Total revenue 337 488 63 163 29 607 162 352 592 610
Property and administrative and corporate
(109,617) (23,251) (8,742) (48,904) (190,514)
expenses
Net operating profit 227,871 39,912 20,865 113,448 402,096
Changes in fair value - - - 149,046 149,046
Profit from operations 227,871 39,912 20,865 262,494 551,142
Finance charges (22) - - (104,576) (104,598)
Interest received 409 37 18 12,959 13,423
Reportable segment profit before debenture
228,258 39,949 20,883 170,877 459,967
interest and taxation
Debenture interest - - - (261 313) (261 313)
Taxation - - - - -
Reportable segment profit after debenture
228 258 39 949 20 883 (90 436) 198 654
interest and tax
Reportable segment assets 4 695 276 1 004 736 475 489 2 580 788 8 756 289
Reportable segment liabilities (774 095) (309 257) (74 489) (6 571 101) (7 728 942)
(3 921 181) (695 479) (401 000) 3 990 313 (1 027 347)
31 March 2014
Eastern
R’000 Gauteng KZN Other Total
Cape
Rental income 180 876 32 881 20 202 36 497 270 456
Straight line rental income - - - 12 535 12 535
Listed securities income - - - 12 687 12 687
Total revenue 180 876 32 881 20 202 61 719 295 678
Property and administrative and corporate
(63 764) (12 393) (5 116) (23 089) (104 362)
expenses
Net operating profit 117 113 20 488 15 086 38 629 191 316
Changes in fair value - - - - -
Profit from operations 117 113 20 488 15 086 38 629 191 316
Finance charges (8) - (3) (34 505) (34 516)
Interest received 146 26 9 15 332 15 513
Reportable segment profit before debenture
117 251 20 514 15 092 19 456 172 313
interest and taxation
Debenture interest - - - (148 341) (148 341)
Taxation - - - - -
Reportable segment profit after debenture
117 251 20 514 15 092 (128 885) 23 972
interest and tax
Reportable segment assets 2 939 221 511 724 336 056 1 114 820 4 901 821
Reportable segment liabilities (31 741) (7 465) (1 836) (4 306 618) (4 347 660)
(2 907 480) (504 259) (334 219) 3 191 798 (554 160)
31 September 2014
Eastern
R’000 Gauteng KZN Other Total
Cape
Rental income 443 699 80 772 45 655 142 113 712 239
Straight line rental income - - - 25 795 25 795
Listed securities income - - - 65 789 65 789
Total revenue 443 699 80 772 45 655 233 697 803 823
Property and administrative and corporate
(152 526) (30 167) (12 326) (77 200) (272 219)
expenses
Net operating profit 291 173 50 605 33 329 156 497 531 604
Changes in fair value - - - 272 392 272 392
Profit from operations 291 173 50 605 33 329 428 889 803 996
Finance charges (23) - (3) (114 981) (115 007)
Interest received 158 55 4 13 782 13 999
Amortisation of debenture interest - - - - -
Reportable segment profit before debenture
291 308 50 660 33 330 327 690 702 988
interest and taxation
Debenture interest - - - (375 201) (375 201)
Taxation - - - - -
Reportable segment profit after debenture
291 308 50 660 33 330 (47 511) 327 787
interest and tax
Reportable segment assets 4 495 672 961 232 455 186 1 851 157 7 763 247
Reportable segment liabilities (795 503) (310 362) (73 957) (5 754 732) (6 934 554)
(3 700 169) (650 870) (381 229) 3 903 575 (828 693)
COMPARATIVES RESTATED
Due to a JSE Listing requirement and the Financial Reporting Investigation Panel, the treatment of antecedent income and
debenture premium has resulted in comparatives for the period end 31 March 2014 being restated. The results for September 2014
have already been reported and accounted for in the correct manner. Beneath is a table which illustrates the effect the
restatement has had on the Statement of comprehensive income and earnings and headline earnings. Selected reportable line items
have been noted.
31 March 31 March
2014 2014
Previously
reported Restated Difference
R'000 R'000 R'000
Profit before debenture interest and taxation 239 291 172,313 66 978
Debenture interest (187 549) (148 341) (39 208)
Total comprehensive income for the period 51 742 23 972 27 770
Earnings profit attributable to linked
unitholders 239 291 172 313 66 978
Headline profit attributable to linked
unitholders 239 291 172 313 66 978
Basic and diluted earnings per A linked unit
(cents) 48,64 35,03 13,61
Basic and diluted earnings per B linked unit
(cents) 48,64 35,03 13,61
Headline and diluted headline earnings per A
linked unit (cents) 48,64 35,03 13,61
By order of the Board
11 May 2015
Directors: T Adler* (Chairperson), G Leissner (CEO), I Suleman (CFO),
M Kaplan (COO), M Nell*, S Noik*, E Stroebel*
* Independent non-executive
All directors are South African
There were no changes to the board of directors during this period.
Registered office: 2nd Floor, 18 Melrose Boulevard, Melrose Arch, Melrose, Johannesburg 2196.
Transfer secretaries: Computershare Investor Services Proprietary Limited.
Sponsor: Java Capital
Company secretary: CIS Company Secretaries Proprietary Limited
Website: www.arrowheadproperties.co.za
Date: 11/05/2015 04:00:00 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,
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