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Audited Results for the Year Ended 28 February 2015
Adrenna Property Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/012245/06)
(JSE share code: ANA ISIN: ZAE000163580)
AUDITED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2015
Statement of Profit or Loss and Other Comprehensive Income
FOR THE YEAR ENDED 28 FEBRUARY 2015
Audited Audited Audited Audited
Group Group Company Company
2015 2014 2015 2014
R’000 R’000 R’000 R’000
REVENUE 26 228 25 193 8 589 9 217
Cost of sales (4 322) (2 912) – –
Gross profit 21 906 22 281 8 589 9 217
Operating income before interest and revaluations 10 310 12 285 3 264 3 547
Fair value adjustment on investment properties 5 650 9 330 – –
Investment income 253 821 224 818
Finance costs (6 549) (7 021) (775) (945)
Net income before taxation 9 664 15 415 2 713 3 420
Taxation (2 443) (3 190) (725) (1 069)
Income after taxation for the year 7 221 12 225 1 988 2 351
Non-controlling interest – – – –
Income attributable to ordinary shareholders 7 221 12 225 1 988 2 351
Other comprehensive income:
Total comprehensive income attributable to:
– Ordinary shareholders 7 221 12 225 1 988 2 351
– Non-controlling interests – – – –
7 221 12 225 1 988 2 351
Basic earnings per share (cents) 12,9 21,9 – –
There was no dilution in basic earnings per share during the current or prior year.
Statement of Financial Position
AS AT 28 FEBRUARY 2015
Audited Audited Audited Audited
Group Group Company Company
2015 2014 2015 2014
R’000 R’000 R’000 R’000
ASSETS
Non-current assets
Property, plant and equipment – 72 – 72
Investment properties 212 141 206 491 – –
Investments in subsidiaries – – 11 895 11 895
Loans owing by third parties – 5 075 – 5 075
Operating lease assets 5 586 5 678 – –
Deferred taxation 4 073 4 339 – –
221 800 221 655 11 895 17 042
Current assets
Amounts owing by group companies – – 18 665 13 261
Loans owing by third parties – 2 089 – 2 089
Inventory 1 430 5 752 – –
Accounts receivable 1 364 1 337 14 3 869
Operating lease assets 1 658 1 708 – –
Current taxation receivable 732 10 – –
Cash and cash equivalents 169 60 – –
5 353 10 956 18 679 19 219
Total assets 227 153 232 611 30 574 36 261
EQUITY AND LIABILITIES
Equity
Stated capital 567 567 567 567
Retained earnings 117 003 109 782 21 358 19 370
117 570 110 349 21 925 19 937
Non-current liabilities
Borrowings 62 800 69 679 – –
Deferred taxation 29 866 27 982 – 7
92 666 97 661 – 7
Current liabilities
Current portion of borrowings 7 015 10 560 – –
Amounts owing to group companies – – – 4 589
Loans owing to third parties 406 406 – –
Accounts payable 2 100 2 712 1 253 1 434
Taxation 232 965 232 336
Bank overdraft 7 164 9 958 7 164 9 958
16 917 24 601 8 649 16 317
Total equity and liabilities 227 153 232 611 30 574 36 261
Statement of Cash Flows
FOR THE YEAR ENDED 28 FEBRUARY 2015
Audited Audited Audited Audited
Group Group Company Company
2015 2014 2015 2014
R’000 R’000 R’000 R’000
Cash generated by operations 14 153 13 477 6 956 48
Finance costs (6 549) (7 021) (775) (945)
Investment income 253 821 224 818
Taxation paid (1 748) (1 161) (836) (765)
6 109 6 116 5 569 (844)
Cash flows from investing activities
Proceeds from disposal of property, plant and equipment 54 – 54 –
Repayment of financial assets 7 164 3 164 7 164 3 164
7 218 3 164 7 218 3 164
Cash flows from financing activities
Repayment of loans – (5) – –
Repayment of borrowings (10 424) (8 673) – –
Net movement in amounts held with group companies – – (9 993) (1 268)
(10 424) (8 678) (9 993) (1 268)
Movement in cash and cash equivalents 2 903 602 2 794 1 052
Cash and cash equivalents at beginning of the year (9 898) (10 500) (9 958) (11 010)
Cash and cash equivalents at end of the year (6 995) (9 898) (7 164) (9 958)
Statement of Changes in Equity
FOR THE YEAR ENDED 28 FEBRUARY 2015
Audited Audited Audited Audited
Group Group Company Company
2015 2014 2015 2014
R’000 R’000 R’000 R’000
STATED CAPITAL
Ordinary stated capital
Balance at beginning of the year 567 567 567 567
Movements during the year – – – –
Balance at end of the year 567 567 567 567
RESERVES
Retained earnings
Balance at beginning of the year 109 782 97 557 19 370 17 019
Comprehensive income attributable to ordinary shareholders 7 221 12 225 1 988 2 351
Balance at end of the year 117 003 109 782 21 358 19 370
Total equity and reserves attributable to ordinary shareholders 117 570 110 349 21 925 19 937
Non-controlling interests
Balance at beginning of the year – – – –
Balance at end of the year – – – –
Total equity and reserves 117 570 110 349 21 925 19 937
EARNINGS PER SHARE/DIVIDENDS PER SHARE
2015 2014
R’000 R’000
Number of ordinary shares in issue at beginning of the year (000’s) 55 915 55 915
Number of ordinary shares in issue at end of the year (000’s) 55 915 55 915
Weighted average number of shares in issue (000’s) 55 915 55 915
Basic earnings
Net profit per statement of comprehensive income 7 221 12 225
Basic earnings per share (cents) 12,9 21,9
Headline earnings
Net profit per statement of comprehensive income 7 221 12 225
Loss on disposal of assets 18 –
Impairments – 19
Revaluation of investment property (net of taxation) (3 485) (7 896)
Headline earnings 3 754 4 348
Headline earnings per share (cents) 6,7 7,8
There was no dilution in basic or headline earnings per share.
Dividends per share
No dividends were declared during the current or prior years.
Net asset value per share
Number of ordinary shares in issue at end of the year (000’s) 55 915 55 915
Net asset value per share (cents) 210,3 197,4
Net tangible asset value per share (cents) 210,3 197,4
NOTES:
BASIS OF PREPARATION
These audited condensed consolidated financial statements have been
prepared in accordance with IAS 34: Interim Financial Reporting, the
requirements of the Companies Act, No.71 of 2008, and the Listings
Requirements of the JSE Limited. The audited condensed consolidated
results have been prepared on the going concern basis as the directors are
of the view that the group has adequate resources in place to continue in
operation for the foreseeable future. The accounting policies applied are
in compliance with International Financial Reporting Standards, the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee
and Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council and are consistent with those applied in the
most recent annual financial statements.
This abridged report is extracted from audited information, but is not itself audited.
The directors take full responsibility for the preparation of the abridged report and that
the financial information has been correctly extracted from the underlying annual financial
statements.
AUDITED RESULTS
These condensed consolidated annual financial statements have been audited
by our auditors, RSM Betty & Dickson (Johannesburg). A copy of their
unmodified audit report is available for inspection at the company's
registered office.
PREPARER
These condensed results were prepared under the supervision of Hartmann
Beukes in his capacity as the Financial Director.
GENERAL REVIEW AND FINANCIAL RESULTS
The environment within which the group operates remained static during the year under review.
While market conditions have stabilised, your directors do not anticipate a serious recovery to
occur in the short to medium term.
The group achieved operating income before interest and fair value adjustments of R10,3 million,
an anticipated decline since the prior year’s operating profit of R12,3 million. This decline is
attributable to a number of factors. The group experienced a diminished beneficial effect in the
current year arising from straight-lining of rental income (R0,1 million debited to revenue in
the current year as opposed to R1,2 million credited in the prior year). Fair value adjustments to
investment property held amounted to R5,7 million in the current year, as opposed to R9,3 million
reflected in the prior year. The above factors notwithstanding, and taking into account the loss of a
significant tenant early in the financial year, the group’s rental income (excluding straight-lining of
leases) still experienced a 2% increase from R20,6 million to R21,0 million in the current year. The
group reduced the percentage of borrowings directly related to fixed properties to 32,9% (2014:
38,9%), well within its target maximum of 60%.
Basic earnings per share decreased from 21,9 cents per share in 2014 to 12,9 cents per share in
2015, a decrease of 41,1%. Headline earnings per share decreased from 7,8 cents per share in
2014 to 6,7 cents per share in 2015, a decrease of 14,1%. Net asset value per share and net tangible
asset value per share both increased from 197,4 cents in 2014 to 210,3 cents per share in 2015,
an increase of 6,5%. In light of the decreased Earnings Per Share, the directors believe that the
significant increase in Net Asset Value overshadows any other perceived financial deterioration.
The continuous improvement in Net Asset Value translates to a consistent growth in shareholder
wealth.
Your directors continue to make every effort to reduce borrowing costs, and succeeded in
lowering such costs from R7 million in 2014 to R6,5 million in 2015, a reduction of 7,1%. This was
achieved through expunging the debt owed to Investec Bank Limited in its entirety, the gradual
diminishment of the overdraft facility with First National Bank Limited and consistent monthly
capital repayments made to ABSA Bank Limited.
RECLASSIFICATION OF PRIOR PERIOD FIGURES
In the prior year, operating costs recovered have been reclassified from revenue and set off
against the relevant expenses. This reclassification has no effect on the disclosed profit after tax or
retained earnings, and has been implemented to ensure enhanced disclosure.
The effect of the reclassification on the 2014 results is as follows:
The effect of the reclassification on the 2014 results is as follows:
As previously Reclassifi- Currently
Disclosed cation Disclosed
Statement of Profit or Loss and Other
Comprehensive Income:
Revenue 30 719 (5 526) 25 193
Note 16. Revenue:
Rental income 26 156 (5 526) 20 630
2015 (R’000) 2014 (R’000)
Invest- Invest-
ment Property- Property Head ment Property- Property Head
Property related Held for Office Property related Held for Office
Holding Services Resale admin Total Holding Services Resale admin Total
SEGMENTAL RESULTS
Revenue 20 833 – 5 395 – 26 228 21 860 – 3 333 – 25 193
Cost of sales – – (4 322) – (4 322) – – (2 912) – (2 912)
Operating income/(loss) before interest and revaluations 15 874 (28) – (5 536) 10 310 17 820 (168) – (5 367) 12 285
Fair value adjustments 5 650 – – – 5 650 9 330 – – – 9 330
Investment income 29 – – 224 253 3 – – 818 821
Finance costs (5 774) – – (775) (6 549) (6 076) – – (945) (7 021)
Net income/(loss) before taxation 15 779 (28) – (6 087) 9 664 21 077 (168) – (5 494) 15 415
Taxation (1 718) – – (725) (2 443) (2 121) – – (1 069) (3 190)
Profit/(loss) for the year 14 061 (28) – (6 812) 7 221 18 956 (168) – (6 563) 12 225
Other comprehensive income – – – – – – – – – –
Total comprehensive income attributable to:
Ordinary shareholders 14 061 (28) – (6 812) 7 221 18 956 (168) – (6 563) 12 225
Non-controlling interests – – – – – – – – – –
14 061 (28) – (6 812) 7 221 18 956 (168) – (6 563) 12 225
Other information
Segment assets 225 710 – 1 430 13 227 153 219 608 1 5 752 7 250 232 611
Segment liabilities 100 949 – – 8 634 109 583 110 778 803 – 10 681 122 262
A geographical segmental report is not presented as the majority of the group’s continuing operations are carried out in the Western Cape.
Segmental aggregation is based on the main sources of activity, namely Investment Property Holding, Property-related Services, Property Sales and Head Office administration.
Inter-segment transactions are measured based on arm’s length prices.
Major customers
Customers yielding revenues in excess of 10% of the group revenue are considered to be major.
The table below illustrates the major customers exceeding the 10% threshold:
2015 2014
R’000 R’000
Investment Property Holding
Customer A 6 690 6 252
Customer B 5 140 4 669
ANNUAL FINANCIAL STATEMENTS
The audited annual financial statements for the year ended 28 February
2015 together with a notice of the annual general meeting to be held on
27 June 2015, will be mailed to shareholders on 20 May 2015. Copies of the
annual financial statements are available from bernard@rmsprop.co.za.
ACCOUNTING POLICIES
The accounting policies applied by the group are consistent with those
applied in the comparative financial periods, except for the adoption of
improved, revised or new standards and interpretations. The aggregate
effect of these changes in respect of the year ended 28 February 2014 is
Rnil.
SUBSEQUENT EVENTS
No material matters have occurred subsequent to 28 February 2014 that
require disclosure.
DIVIDENDS
Taking into account the impacts of the depressed economy and related
problems in the property industry the directors have resolved to retain
cash in the group to ensure future growth. As such no dividend has been
recommended.
21 May 2015
DIRECTORS:
R P Fertig (Chief Executive Officer)
W P Alcock† (Chairman)
R S Watson* (Appointed 1 September 2013)
H Beukes CA(SA) (Appointed 25 March 2013)
B W Kaiser (Resigned 25 March 2013)
SP Mothelesi*
M Moela*
(†Non-executive)
(*Independent non-executive)
COMPANY SECRETARY:
B W Kaiser
REGISTERED OFFICE:
2969 William Nicol Drive, Bryanston, Sandton, 2196
TRANSFER SECRETARIES:
Computershare Investor Services Proprietary Limited
70 Marshall Street, Johannesburg, 2001
SPONSOR:
Arbor Capital Sponsors Proprietary Limited
Date: 21/05/2015 03:35:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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