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Abridged audited annual financial statements for the year ended 30 June 2015 and notice of annual general meeting
ASCENSION PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2006/026141/06)
JSE share code: AIA ISIN: ZAE000204566
(Approved as a REIT by the JSE)
(“Ascension” or “the company” or “the group”)
ABRIDGED AUDITED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 AND NOTICE OF ANNUAL GENERAL MEETING
The following are abridged financial statements taken from the full audited financial statements of Ascension
Properties Limited for the year ended 30 June 2015 and, where applicable, include amendments to the reviewed
condensed consolidated results released on SENS on 18 August 2015.
Ascension is a REIT focusing on centrally located commercial office buildings in South Africa with a strong focus
towards government and other empowerment sensitive tenants.
The results for the year ended 30 June 2015 represent the first full year performance of Ascension since Rebosis
acquired the asset manager of Ascension in February 2014 and assumed responsibility for the day to day operations as
the asset manager of Ascension.
The company achieved distributable earnings of R222.8 million for the year ended 30 June 2015 (30 June 2014:
R202.7 million), in line with expectations. The company will pay a final dividend on 31 August 2015 for the six
months to 30 June 2015 of 20.94750 cents per A share (2014: 19.95 cents) and 13.53232 cents per B share (2014:
12.23 cents). This brings the total dividend for the year under review to 41.90 cents per A share and 24.81 cents per B
share.
Capital Conversion
As set out more fully in the circular issued to Ascension linked unitholders on 22 May 2015, Ascension has converted
its capital structure from a linked unit capital structure to an all-share capital structure, comprising Ascension A shares
and Ascension B shares.
Property portfolio
At 30 June 2015 the portfolio (including investment properties and properties under development) consisted of 29
properties valued at R3.83 billion, with a total gross lettable area (“GLA”) of 316 570m². This translates to an average
building value of R132.15 million.
The sectoral profile of the portfolio is 81.0% offices, 9.3% retail and 9.7% other. The group does not own any retail
focused properties and the retail components are typically ground floor areas of office buildings. The total portfolio is
62.1% tenanted by government in line with Ascension’s strategic focus on this market. Total vacancies have decreased
to 6.46%. The weighted average rental escalation remains healthy at 8.1%.
Borrowings
The company’s borrowings at 30 June 2015 amounted to R1.50 billion at a weighted average rate of 8.08% per
annum. R483 million of borrowings has been fixed at an all-in rate of 7.35% until December 2015. R500 million of
borrowings are subject to a three-month JIBAR interest rate cap at 6.72%. The interest rate cap expires on 13 January
2017.
Offer to acquire Ascension Properties Limited – B scheme
Pursuant to a scheme of arrangement in terms of section 114 of the Companies Act, 71 of 2008, between Ascension
and Ascension B shareholders (“B scheme”), with effect from 17 August 2015, all Ascension B shares held by
Ascension B shareholders were transferred into the name of Rebosis Property Fund Limited (“Rebosis”). Rebosis
accordingly holds 100% of the issued B shares in Ascension and, approximately 59% of the entire issued share capital
of Ascension. Ascension is accordingly a subsidiary of Rebosis.
Prospects
Despite the challenging business environment we believe that Ascension has a defensive portfolio and that the quality
of its assets, together with healthy lease and escalation profiles, should ensure that the group continues to deliver
acceptable returns to its shareholders.
Change of financial year-end
Ascension shareholders are advised that the company has changed its financial year-end from 30 June to 31 August
with effect from 31 August 2015.
Pursuant to the change of year end, Ascension will:
• publish reviewed results for the 2 months ending 31 August 2015 within three months of 31 August 2015; and
• issue audited financial statements for the 2 months ending 31 August 2015 within six months of 31 August 2015.
The change in financial year end will affect Ascension’s distribution periods and accordingly after the change of
financial year end the distributions will be payable in respect of the 2 months ending 31 August 2015 and thereafter in
respect of the six month periods ending 28 February and 31 August.
Condensed Consolidated Statement of Financial Position at 30 June 2015
Audited Reviewed Audited
30-Jun-15 30-Jun-15 30-Jun-14
12 months 12 months 12 months
R’000 R'000 R'000
Revenue 412 333 412 333 353 101
Contractual rental income 365 895 365 895 335 110
Straight-line lease income adjustment 46 438 46 438 17 991
Property operating expenses net of recoveries (35 481) (35 481) (42 570)
Net property and related income 376 852 376 852 310 531
Other income 1 039 1 039 567
Asset management fees (18 535) (18 535) (15 857)
Operating expenses (4 233) (4 233) (3 704)
Operating profit 355 123 355 123 291 537
Finance income 3 563 3 563 1 765
Fair value adjustments (42 368) (42 368) 194 535
Finance cost (91 812) (91 812) (75 035)
Net profit before distribution to shareholders and taxation 224 506 224 506 412 802
Distribution to shareholders (222 796) (222 796) (202 730)
Net profit before tax for the period 1 710 1 710 210 072
Income tax expense - - -
Net profit after tax for the period 1 710 1 710 210 072
Other comprehensive income - - -
Total comprehensive income for the period 1 710 1 710 210 072
Reconciliation between earnings, headline earnings and distributable earnings
Audited Reviewed Audited
30-Jun-15 30-Jun-15 30-Jun-14
12 months 12 months 12 months
R’000 R'000 R'000
Profit for the period attributable to shareholders 1 710 1 710 210 072
Adjusted for:
Amortisation of discount on debentures 728 728 728
Net fair value gain on revaluation of investment property net of
taxation 30 727 30 727 (197 902)
Headline earnings attributable to shareholders 33 165 33 165 12 898
Adjusted for:
Debenture interest 222 796 222 796 202 730
Headline earnings attributable to shareholders 255 961 255 961 215 628
Adjusted for:
Straight-line lease income adjustment (net of taxation) (46 438) (46 438) (17 991)
Fair value adjustment - interest rate derivative 11 641 11 641 3 367
Amortisation of bond raising fees (net of taxation) 1 632 1 632 1 726
222 796 222 796 202 730
Less: dividend declared (222 796) (222 796) (202 730)
Distribution to A shareholders (129 405) (129 405) (117 711)
Distribution to B shareholders (93 391) (93 391) (85 019)
Earnings not distributed - - -
Basic and diluted earnings per share (cents) 0.25 0.25 31.31
Basic and diluted headline earnings per share (cents) 4.84 4.84 1.92
Basic and diluted earnings per A share (cents) 42.15 42.15 71.25
Basic and diluted earnings per B share (cents) 25.06 25.06 53.90
Headline and diluted earnings per A share (cents) 46.74 46.74 41.87
Headline and diluted earnings per B share (cents) 29.65 29.65 24.51
Distribution per A and B share
Dividend per A share 41.89500 41.89500 39.90000
Dividend per B share 24.81437 24.81437 22.58952
Number of A shares in issue at 30 June 2015 308 860 859 308 860 859 308 860 859
Number of B shares in issue at 30 June 2015 376 359 014 376 359 014 376 359 014
Weighted average number of A shares in issue 308 860 859 308 860 859 294 675 376
Weighted average number of B shares in issue 376 359 014 376 359 014 376 359 014
- The calculation of basic and diluted earnings per share is based on earnings of R1.71 million (30 June 2014: R210.1
million) and a weighted average number of 685 219 873 shares (30 June 2014: 671 034 390) in issue throughout the
financial period.
- The calculation of headline earnings and diluted headline earnings per share is based on a headline earnings of
R33.17 million (30 June 2014: R12.9 million) and a weighted average number of 685 219 873 shares
(30 June 2014: 671 034 390) in issue throughout the financial period.
Condensed Consolidated Statement of Financial Position at 30 June 2015
Audited Reviewed Audited
30-Jun-15 30-Jun-15 30-Jun-14
R'000
R'000
(as previously R'000
published)
Assets
Non-current assets 3 836 944 3 836 944 3 722 898
Investment properties and properties under
development 3 832 400 3 832 400 3 706 700
Property, plant and equipment 12 12 24
Interest rate derivative 4 532 4 532 16 174
Current assets 108 596 112 716 100 954
Trade and other receivables 58 320A 53 519 61 792
Cash and cash equivalents 50 276B 59 197 39 162
Total assets 3 945 540 3 949 660 3 823 852
Equity and liabilities
Equity 874 444 874 445 872 734
Stated capital 322 603 322 603 322 603
Retained income 551 841 551 842 550 131
Non-current liabilities - Debentures 1 404 543 1 404 543 1 403 815
Total linked unitholders' interest 2 278 987 2 278 988 2 276 549
Liabilities
Other non-current liabilities 1 499 981 1 499 981 1 377 259
Interest bearing liabilities 1 499 981 1 499 981 1 377 259
Current liabilities 166 572 170 691 170 044
Trade and other payables 50 936C 55 055 62 330
Linked unitholders accrued interest 115 636 115 636 107 714
Total liabilities 3 071 096 3 075 216 2 951 118
Total equity and liabilities 3 945 540 3 949 660 3 823 852
TNAV and NAV per A share (cents) 569.3 569.3 479.8
TNAV and NAV per B share (cents) 169.1 169.1 239.8
Notes:
Ascension shareholders are referred to the announcement released on SENS on Tuesday, 18 August 2015 relating to
the reviewed condensed consolidated provisional results of the company for the year ended 30 June 2015. On
finalisation of the audited results, the reviewed results changed as follows:
Change
# Line item Amount Description of change
R’000
A Trade and other receivables 4 801 Reclassification of debtors with a credit balance and
other accruals
B Cash and cash equivalents (8 921) Reclassification of balances not classified as cash by
property managers
C Trade and other payables 4 119 Reclassification of debtors with a credit balance and
other accruals
Condensed Consolidated Statement of Cash Flows for the year ended 30 June 2015
Audited Reviewed Audited
30-June-15 30-Jun-15 30-Jun-14
12 months 12 months 12 months
R’000 R'000 R'000
(as previously
published)
Cash flow from operating activities
Cash generated from operations 300 656D 309 697 289 028
Finance income 3 563 3 563 1 765
Finance costs (89 452) (89 452) (72 581)
Net cash inflow from operating activities 214 767 223 808 218 213
Cash flow from investing activities
Purchase of investment properties and cost of
improvements (109 989)E (137 104) (946 307)
Purchase of other financial assets - - (13 173)
Net cash outflow from investing activities (109 989) (137 104) (959 480)
Cash generated from financing activities
Proceeds from the issue of linked units - - 360 747
Net proceeds from interest bearing loans 121 210F 148 205 581 245
Distributions paid (214 874) (214 874) (188 277)
Net cash (outflow)/ inflow from financing activities (93 664) (66 669) 753 715
Net increase in cash and cash equivalents for the period 11 114 20 035 12 448
Cash and cash equivalents at the beginning of the period 39 162 39 162 26 715
Cash and cash equivalents at the end of the period 50 276 59 197 39 162
Notes:
Ascension shareholders are referred to the announcements released on SENS on Tuesday, 18 August 2015 relating to
the reviewed condensed consolidated provisional results of the company for the year ended 30 June 2015. On
finalisation of the audited results, the reviewed results changed as follows:
Change
# Line item Amount Description of change
R’000
D Cash generated from operations (9 041) Reclassification of receivables, payables and non-
cash items
E Purchase of investment properties and 27 115 Non-cash movements
cost of improvements
F Trade and other payables (26 995) Non-cash movements
Condensed Consolidated Statement of Changes in Equity for the year ended 30 June 2015
Stated Retained Total
Capital income Equity
R’000 R’000 R’000
Balance at 1 July 2013 – Audited 304 381 340 060 644 441
Issue of shares net of transaction costs 18 222 – 18 222
Total comprehensive income for the period – 210 071 210 071
Balance at 1 July 2014 – Audited 322 603 550 131 872 734
Total comprehensive income for the period – 1 710 1 710
Balance at 30 June 2015 – Audited 322 603 551 842 874 444
Notes
1. Basis of preparation and accounting policies
The abridged annual financial statements for the year ended 30 June 2015 are prepared in accordance with the
requirements of the JSE Limited Listings Requirements for provisional reports and the requirements of the Companies
Act of South Africa. 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 Financial Reporting Standards Council and to also, as a minimum, contain the
information required by IAS 34 Interim Financial Reporting.
Except for the new standards adopted as set out below, all accounting policies applied in the preparation of these
abridged annual financial statements are in terms of IFRS and are consistent with those applied in the prior year.
Ascension adopted the following amendments to standards during the year:
– IAS 16 Property, Plant and Equipment
– IAS 24 Related-party disclosures
– IFRS 8 Operating Segments
– IAS 40 Investment Property
The directors are not aware of any matters or circumstances arising subsequent to 30 June 2015 that require any
additional disclosure or adjustment to the financial statements, other than as disclosed in this announcement.
These abridged annual financial statements for the year ended 30 June 2015 have been reviewed by Grant Thornton,
who expressed an unmodified review conclusion thereon. A copy of the auditor’s review report is available for
inspection at the company’s registered office together with the financial statements identified in the auditor’s reviewed
report. The auditor’s reviewed report does not necessarily report on all the information contained in these 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 directors take full responsibility for the preparation of these results and
confirm that the financial information has been correctly extracted from the underlying financial statements.
2. Debt facilities
Funder Facility at Utilised at
Cost of 30 June 2015 30 June 2015
funding (R million) (R million) Expiry date
Investec Private Bank 8.50% 529 461 13-Mar-18
Standard Bank 1 7.95% 393 396 * 31-Aug-17
Standard Bank 2 7.75% 160 160 31-Aug-17
Nedbank - loan 1 7.75% 158 153 7-Mar-19
Nedbank - loan 2 7.75% 150 151 * 12-Sep-16
Nedbank - loan 3 7.75% 26 26 18-Jul-16
Nedbank - loan 4 8.40% 45 45 23-Apr-18
Nedbank - loan 5 7.75% 50 50 28-Jun-16
Nedbank - loan 6 7.75% 34 34 30-Aug-16
Nedbank - loan 7 7.75% 26 26 30-Aug-16
Unamortised bond raising fees (2)
Total borrowings 1 571 1 500
The weighted average cost of debt at 30 June 2015 is 8.08% (30 June 2014: 7.86%).
*
- Includes accrued interest
3. Interest rate derivatives
Average
Facility all-in swap
Rate (R million) rate Expiry date
Interest rate swap 3-month JIBAR
483 7.35% 1-Dec-15
5,55%
Interest rate cap 3-month JIBAR
500 – 13-Jan-17
6,72%
4. Trade and other receivables
Audited Reviewed Audited
30-Jun-15 30-Jun-15 30-Jun-14
12 months 12 months 12 months
R’000 R’000 R’000
Trade receivables (net of impairment provisions) 34 909 31 064 11 950
Debtor accruals (including consumption charges not yet invoiced) 9 650 10 126 20 786
Amounts due on acquisition adjustment accounts 827 827 7 483
Deposits 1 548 1 470 1 366
Sundry debtors, prepayments and VAT 11 386 10 032 20 208
58 320G 53 519 61 793
G – The changes relate to reclassification of debtors with credit balances and accruals
5. Lease expiry profile (Based on GLA)
Retail Office Total
Vacant 0.28% 6.62% 6.46%
June 2016 30.56% 38.67% 36.21%
June 2017 2.99% 4.63% 6.96%
June 2018 11.99% 16.79% 14.8%
June 2019 3.07% 17.75% 15.44%
June 2020 27.26% 5.76% 9.98%
June 2021 0.87% 5.91% 4.90%
After June 2021 22.98% 3.87% 5.25%
Total 100.0% 100.0% 100.0%
6. Tenants: Government vs. non-government
Based on monthly
Based on GLA contracted revenue
Government 62.1% 63.4%
Non-Government 37.9% 36.6%
Total 100.0% 100.0%
7. Operating segments
The group classifies segments based on the type of property i.e. Commercial, Retail, Industrial and Other. Properties
can be mixed use properties. In this instance the property will be classified according to its principle use.
Accordingly, the group only has one reporting segment, namely Commercial property as the principle use of all
properties in the portfolio is for commercial office space. Most of the buildings do have a small retail component
(normally at street level), but this seldom exceeds 10% of the total GLA per building.
8. Changes to the board of directors and change of company secretary
Pursuant to the implementation of the B scheme the board has been reconstituted as follows:
- AC Nissen, SL Rai, BC Bayvel, FW Arendse, HB Dednam and J de Villiers have resigned as directors and
company secretary of the company respectively, with effect from 1 October 2015.
- Sisa Ngebulana and Dr. Mbulelo Renene have been appointed as non-executive director and chairman of the
board and independent non-executive director respectively, with effect from 1 October 2015.
- M Burton and H Takolia, current independent non-executive directors will remain on the board of Ascension.
- Mande Ndema has been appointed as company secretary of Ascension with effect from 1 October 2015.
Following engagement with the JSE regarding the appointment of a new CEO, Kameel Keshav, currently the chief
financial officer of Rebosis Property Fund Limited, will take on the role as CEO of Ascension. The board will also
seek to make two further appointments, including the appointment of a new financial director. A further
announcement in this regard will be released on SENS in due course.
9. Notice of the annual general meeting
The company's annual general meeting will be held at Ascension’s corporate office situated at 3rd Floor, Palazzo
Towers West, Montecasino Boulevard, Fourways, 2191 at 10:00 on Wednesday, 9 December 2015. The notice and
proxy form for the company's annual general meeting were posted to the shareholders on 30 September 2015 and
will be included in the integrated report that will be published on Ascension's website,
www.ascensionproperties.co.za.
10. Approval of financial statements
The financial statements have been approved by the board and abridged for purposes of this report. Grant Thornton
has signed an unqualified audit opinion on the financial statements. Both the financial statements and the auditors'
report are available for inspection at the company's registered office.
This abridged report is extracted from audited information, but is not itself audited.
The auditors' report does not necessarily cover all of the information contained in this announcement. Shareholders are
therefore advised that in order to obtain a full understanding of the nature of the auditors' work they should obtain a
copy of the report together with the accompanying financial information from the registered office of the company.
By order of the board
Cape Town
1 October 2015
Directors
AC Nissen (chairman) / SL Rai * / FW Arendse * / HB Dednam * / J de Villiers (alternate to SL Rai) * / M Burton /
B Bayvel / H Takolia
* (executive director)
Company secretary
J de Villiers
Business address
25th Floor, 9 Riebeeck Street, Cape Town, 8001
Transfer secretaries
Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg, 2001
Sponsor
Java Capital, 6A Sandown Valley Crescent, Sandton, 2196
Date: 01/10/2015 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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