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EQUITES PROPERTY FUND LIMITED - Unaudited consolidated interim results for the 6 months ended 31 August 2015

Release Date: 15/10/2015 13:34
Code(s): EQU     PDF:  
Wrap Text
Unaudited consolidated interim results for the 6 months ended 31 August 2015

Equites Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2013/080877/06)
JSE share code: EQU    ISIN: ZAE000188843
(Approved as a REIT by the JSE)
("Equites" or "the company")

UNAUDITED CONSOLIDATED INTERIM RESULTS FOR THE 6 MONTHS ENDED 31 AUGUST 2015


Highlights



-     Distribution of 45.42 cents per share for the 6 months ended 

      31 August 2015, which is 11.5% higher than the  corresponding

      financial period on an adjusted 6 month basis and exceeds the forecast

      in the pre-listing statement by 4.7%.

-     Forecast forward yield of 8.6 - 8.8%.

-     Net asset value per share growth of 10.73% to R12.59 for the 6 months

      till end August 2015, which equates to a 28.3% growth since listing.

-     Fair value of property portfolio exceeds R3.4 billion as at 

      31 August 2015 and is expected to exceed  R4 billion by 

      29 February 2016.

-     Acquisition of R1.9 billion portfolio from Intaprop concluded and 

      successfully  implemented.

-     Further acquisitions and development leases concluded with a capital 

      value of more than R700 million.

-     Construction of new 22 227m2 TFG distribution centre at Lords View 

      (Midrand) well under way with  completion expected in early 2016 at 

      an initial yield of approximately 9%. 

-     Capital raise of up to 120 million new shares announced.



1.    Nature of the business

      Equites listed as the only specialist industrial property fund on 

      the JSE on 18 June 2014. The company is a Real Estate Investment 

      Trust ("REIT") and both the property and asset management functions

      are managed internally. Equites' value proposition includes a focus 

      on the top-end of the industrial property market and is based 

      on sound property fundamentals. This is complemented by its proven

      ability to develop A grade industrial buildings internally and unlock

      key logistics nodes. 



2.    Commentary on results

      Distributable earnings grew ahead of previous forecasts in the first

      4 months of the reporting period and accelerated in the last 2 months   

      with the inclusion of the Intaprop portfolio. Prudent cost 

      management, a reduction in vacancies and tenant renewals on favourable

      terms all supported this growth.



      The company remains largely insulated from the weak economic climate

      due to the strong property fundamentals. Almost all earnings are 

      derived from blue chip tenants on long leases in Cape Town and 

      Gauteng. The company also continues to see strong demand for 

      modern distribution centres in the major logistics nodes. This 

      demand is supported by the continued centralisation of distribution 

      by major retailers, increased levels of imports into South Africa 

      and a shift towards online retailing.



      The debt assumed with the acquisition of Intaprop Proprietary 

      Limited ("Intaprop") was refinanced with Nedbank at the beginning 

      of September 2015, which resulted in a 50 basis point reduction in 

      the average lending costs on this debt. This saving in finance costs

      will add to the yield accretive impact of the Intaprop acquisition.



      Income from the company's first completed development since listing

      (the Airport Industria extension described in point 6 below), will

      also be included in distributable earnings from September 2015 for 

      the first time.



      At the time of releasing this report, the company had concluded the

      acquisitions and development leases detailed in 3 and 4 below 

      totalling more than R700 million. The transactions that are expected

      to be implemented by 29 February 2015 will increase the portfolio 

      value to more than R4 billion.



3.    Acquisitions of developed properties



3.1.  Acquisition of Intaprop

      As announced on SENS on 29 May 2015, Equites entered into an 

      agreement in terms of which it acquired all of the shares and claims 

      in Intaprop in consideration for ordinary shares in the capital of 

      Equites. The Intaprop  property portfolio is located in Gauteng and

      Cape Town and consists primarily of industrial properties and 

      undeveloped industrial land. The effective date of the Intaprop 

      transaction was 1 July 2015.

 

      Following the Intaprop transaction, the value of Equites' 

      property portfolio increased from approximately R1.5 billion to 

      R3.4 billion. In terms of the aforementioned transaction, Equites 

      paid the vendors (by way of shares in Equites) an amount equal to 

      the net asset value of the target company and assumed debt of 

      approximately R1.4 billion. 



3.2.  Acquisition of Tunney Ridge Business Park

      As announced on SENS on 19 August 2015, Equites concluded an agreement

      for the acquisition of the Tunney Ridge property, from Tunney Ridge

      Proprietary Limited for a purchase consideration of R137 million. 

      This acquisition is consistent with Equites' growth and investment

      strategy of building a quality industrial portfolio that promotes 

      capital growth and increasing income returns in the medium to 

      long-term for shareholders. The effective date of the transaction is 

      1 November 2015.



      The total gross lettable area ("GLA") of the Tunney Ridge property

      amounts to 13 808m2 and consists of four buildings. Three of the four

      industrial buildings on the property have long dated leases in places

      with quality tenants. Equites has obtained a three year rental 

      guarantee in respect of the fourth building. The Tunney Ridge 

      property will therefore add to the quality, defensiveness and 

      income predictability of Equites.



3.3.  Acquisition of Atlantic Hills and JF Hillebrand

      As announced on SENS on 14 September 2015, Equites concluded the 

      acquisition of Intaprop Hills Proprietary Limited ("Intaprop Hills")

      from Intaprop Investments Proprietary Limited ("the Intaprop Hills

      transactions"). Intaprop Hills is the owner of Atlantic Hills 

      Industrial Park, which is a 7 hectare industrial park situated 

      adjacent to the Potsdam off-ramp on the N7 highway in Cape Town. 



      This Intaprop Hills transaction also includes the acquisition of a 

      completed 3 499m2 new distribution centre which is currently being 

      developed by Intaprop Hills for JF Hillebrand South African 

      Proprietary Limited ("JF Hillebrand"), at a capital value of 

      R35 million. JF Hillebrand, which has entered into an 8 year lease 

      commencing on 1 December 2015, is the largest logistics solution 

      provider to the wine and spirit industry in the world.  The 

      purchase consideration is R52 million which will be settled during 

      October 2015.



4.    Industrial developments



4.1.  New TFG distribution centre

      As announced on SENS on 3 February 2015, Equites concluded a joint 

      venture agreement with Lord Trust Developers Proprietary Limited 

      ("Lord Trust") for the purposes of developing a 22 227m2 distribution

      centre for The Foschini Group ("TFG") in the Lords View Industrial

      Park in Gauteng. The capital value of the project is approximately 

      R150 million with Equites originally owning 75% of the joint 

      venture and Lord Trust owning the remaining 25%. 3 hectare of 

      vacant land immediately adjacent to this development has been 

      reserved for future expansion, which will add approximately 

      16 000m2 to the distribution centre.



      Following further negotiations, Equites and Lord Trust reached an

      agreement, as announced on SENS on 27 August 2015, to cancel the joint

      venture between Equites and Lord Trust, resulting in Equites owning 

      the entire TFG distribution warehouse currently being developed at

      Lords View Industrial Park in Gauteng.



      In addition, Equites acquired approximately 17 hectares of vacant 

      industrial land at the Lords View Industrial Park from Lord Trust. 

      The purchase consideration is R180 million (including the minority

      stake in the TFG development) and transfer is expected to occur 

      during November 2015.



4.2.  New Puma distribution centre and head office

      Equites has concluded a development lease with Puma Sports 

      Distributors Proprietary Limited ("Puma"), the local subsidiary 

      of the global apparel and sportswear brand, for the construction of a

      new 16 262m2 distribution centre and head office on the Atlantic Hills

      property. The capital value of the project is approximately 

      R155 million and the lease agreement has a duration of 9 years and 

      11 months. It is anticipated that this Puma development will be 

      completed in August 2016.





5.    Pipeline and development of industrial nodes



      Following the above transactions Equites controls 43.5 hectares of

      prime vacant land in 4 logistics nodes as follows:

      -  15.8 hectares in Meadowview Business Estate, Linbro Park, Gauteng.

      -  17.0 hectares in Lords View Industrial Park, Midrand, Gauteng, of

         which 3 hectares has been reserved for an extension to the TFG 

         distribution centre.

      -  5.4 hectares in Atlantic Hills, Contermanskloof, Cape Town, of

         which 2.3 hectares will be taken up by the new Puma distribution

         centre and head office.

      -  5.3 hectares in Saxdown Business Park, Hagley, Cape Town.



      After the already concluded transactions, 38.2 hectares of vacant,

      zoned land is still available for development. It is envisaged that

      this land will be developed through the low risk strategy of a series

      of development leases to A-grade tenants. The unlocking of all these

      nodes is expected to increase the value of properties in the fund by

      approximately R1.8 billion. 



6.    First completed project in enterprise development programme

      The period under review also saw a significant milestone for the 

      company's enterprise development programme. The company had previously

      assisted Mr Munier Damon to set up his own construction company, 

      Damon@Sons Construction (Pty) Ltd ("Damon@Sons"). The company 

      contracted with Damon@Sons in March 2015 to undertake a 2 045m2 

      extension of one of the company's properties in Airport Industria, 

      Cape Town. This project was completed by 31 August 2015, under budget

      and well within in the allotted time frame, and the company started 

      receiving rental from this extension from 1 September 2015.



7.    Speculative development approved

      In late 2014, the company acquired a property at 160 Gunners Circle,

      Epping Industria, Cape Town, with the intention of redeveloping the

      site into an A-grade distribution centre. During the current period,

      the board approved the  construction of a new 8 500m2 distribution 

      centre on this site on a speculative basis with a capital value of 

      R72 million. This is well within the company's risk parameters for 

      untenanted, speculative developments. Construction commenced in 

      early October 2015 with completion expected in August 2016. There 

      is high demand for A-grade industrial space in Epping Industria and 

      the market is currently experiencing very low vacancy levels.



8.    Interpretation of comparative information

      As fully described in the comparative interim financial results, the 

      distribution for the comparative period to 31 August 2014 was based 

      on the distributable profits for the 3 months from 1 June 2014 to 

      31 August 2014. Consequently, comparisons to the current distribution

      have been done on an adjusted 6 month basis where applicable. 





9.    Distributable earnings



                                      Unaudited     Unaudited       Audited

                                       6 months      6 months     12 months

                                          ended         ended         ended

                                      31 August     31 August   28 February

                                           2015          2014          2015

      Reconciliation between earnings, 

      headline earnings and distributable 

      earnings (dividend declared)        R'000         R'000         R'000



      Earnings (profit attributable to 

      owners of the parent)             170 283        14 270       184 031 

      Adjusted for:

      Fair value adjustments to 

      investment properties             (93 342)          767      (115 609)

      Headline earnings                  76 941        15 037        68 422 

      Adjusted for:

      Straight-lining of leases 

      adjustment                        (16 660)       (6 999)      (14 928)

      Capital raising expenses                -        14 288        14 901 

      Fair value adjustments to 

      financial instruments              (2 521)            -           512 

      Equity-settled share-based 

      payment reserve                       382             -           201 

      Financial instrument capital loss       -         1 490         1 490 

    

      Distributable earnings             58 142        23 816        70 598 



      Distribution per share (cents)      45.42         20.37         61.26 



      Headline earnings per share (cents) 60.54         20.86         76.08

      Diluted headline earnings per 

      share (cents)                       60.26         20.86         76.01



      The board declared an interim dividend of 16.39 cents per share on 

      15 October 2015 for the 6 months ended 31 August 2015. This 

      distribution relates to the distributable earnings for July and 

      August 2015, as the distributable earnings for the 4 months from 

      1 March 2015 to 30 June 2015 were declared on 3 September 2015 as 

      a special "clean-out" distribution. The special dividend was paid on 

      28 September 2015, immediately prior to the share allocation for the 

      Intaprop acquisition. 



      Together with the special clean-out dividend of 29.03 cents per share,

      the total distributions for the 6 month period amounts to 45.42 cents

      per shares. This represents a growth of 11.5% over the comparative 

      period on an adjusted 6 month basis. The board is also pleased that 

      the distribution for the 6 months to 31 August 2015 exceeds the 

      43.4 cents per share forecast in the pre-listing statement by 4.7% 

      for the same period.



      Dividends declared (cents per share)             Aug 15        Aug 14



      Interim dividend declared on 10 October 2014                    20.37

      Special dividend declared on 3 September 2015     29.03

      Interim dividend declared on 15 October 2015      16.39



      Total distributions for the period                45.42         20.37



10.   Net asset value per share



      The net asset value per share of the company grew to 1 259 cents per

      share by 31 August 2015. This equates to a total growth of 28.3 % 

      since listing just under 15 months ago.



                        On listing

                         18 Jun 14     31 Aug 14    28 Feb 15     31 Aug 15



      Net asset value 

      (cents per share)        981         1 009        1 137         1 259

      Growth since listing                  2.9%        15.9%         28.3%



11.   Updated property fundamentals



11.1. Lease expiry profile

                                                                   Based on

                                                     Based on   contractual

      Lease expiry                              rentable area       revenue



      Vacant                                            0.17%

      Monthly                                           0.00%         0.00%

      Expiry in the year to 29 February 2016            0.64%         1.06%

      Expiry in the year to 28 February 2017            4.51%         3.81%

      Expiry in the year to 28 February 2018           10.99%         3.90%

      Expiry in the year to 28 February 2019           23.14%        22.54%

      Expiry in the year to 29 February 2020 and later 60.55%        68.69%

                                                      100.00%       100.00%



11.2. Weighted average lease expiry



                                                                   Based on

                                                     Based on   contractual

      Weighted average lease expiry             rentable area       revenue



      Weighted average lease expiry (in years)           5.28          5.79



11.3. Tenant grade profile



                                                                   Based on

                                                                contractual 

      Tenant profile                                                 revenue



      A - Large nationals, large listeds and government               90.6%

      B - Smaller international and national tenants                   6.4%

      C - Other local tenants and sole proprietors                     3.0%

                                                                     100.0%





11.4. Property geographic distribution



                                                                   Based on

                                                     Based on   contractual

      Geographic profile                         rentable area       revenue



      Gauteng                                           43.0%         55.0%

      Cape Town                                         57.0%         44.9%

                                                       100.0%        100.0%



12.   Funding



      The company had R1.8 billion of term loan facilities with Nedbank as

      at 31 August with tenures expiry from August 2016 to August 2020 at an

      average all-in rate of Prime less 1.52%; currently equating to an 

      effective rate of 7.98%.



      Term loans with Nedbank                  Facility R'000          Rate

     

      Expiry     

      August 2020                                     450 000    Prime less 

                                                                       1.4%

      August 2019                                     600 000    Prime less

                                                                       1.6%

      August 2017                                     548 000    Prime less

                                                                       1.5%

      August 2016                                     202 000    Prime less

                                                                       1.6%

                                                    1 800 000



      The company has also secured specific development loan funding from 

      Nedbank at rates of between Prime and Prime less 0.8%.



      The company continues to have a policy of hedging 80% of its 

      permanent floating-rate borrowings by entering into interest rate 

      swaps and other derivative instruments. As at 31 August 2015, 46% 

      of bank funding is hedged against interest fluctuations, as the 

      level of bank funding is expected to reduce significantly after 

      raising additional capital during November 2015.



13.   Vacancies



      The industrial portfolio remains fully let and vacancies in the 

      office portfolio have reduced from 2.2% to 0.96% based on rentable

      area, representing 0.17% of the total rentable area. The first 

      renewal in the industrial portfolio falls due in June 2016 - a 

      7 470m2 warehouse at Airport Industria, Cape Town. Negotiations are

      currently under way to renew the lease at a higher rate, as the 

      current rental of R30/m2 is significantly lower than similar

      properties in the area.



      Included in the Intaprop acquisition was one industrial property 

      (6 250m2) and 200m2 in one of the office buildings that are 

      currently vacant. The company is, however, receiving income on 

      these sites under a rental guarantee that was included in the 

      acquisition agreement and they are not included in the vacant areas

      above.



14.   Prospects

      Management is proactively marketing the available land with a view to

      conclude further development leases for the construction of new 

      distribution centres. The focus remains on blue chip tenants that 

      require modern logistics facilities. The board is confident that a 

      number of such development leases will be concluded in the near 

      future.



      The board also believes that market conditions are favourable to 

      pursue further portfolio acquisitions. Such acquisitions will be 

      aimed at growing the portfolio of A-grade industrial properties 

      and accelerating distribution growth in a sustainable  fashion.



      As set out in the trading statement released on SENS on 16 September

      2015, the company expects full year distribution growth for the 

      year ended 28 February 2016 to be 10 - 12% higher than for the 

      previous corresponding financial period (on an adjusted full year 

      basis). Based on the share price of R12.30 as at 31 August 2015, 

      this equates to a one year forward yield of 8.6 - 8.8%. This 

      guidance is based on the assumptions that a stable macro-economic 

      environment will prevail, no major corporate failures will occur 

      and tenants will be able to absorb the recovery of rising utility

      costs and municipal rates. This forecast has not been audited or 

      reviewed by Equites' auditors.



15.   Changes to the board of directors

      Johnny Cullum did not stand for re-election at the annual general

      meeting held on 10 July 2015 and resigned from the board on that 

      date to focus on his other business interests. Johnny was a 

      non-executive director and a founding shareholder of Equites and 

      the board expresses its gratitude for the significant role he played 

      in the forming and listing of the company.



      Andre Jacques Gouws (43) was appointed as a non-executive director 

      on 1 September 2015. Andre is the CEO of Intaprop Investments 

      Proprietary Limited and following the acquisition of the Intaprop

      portfolio he is also a significant shareholder in Equites. Andre 

      comes with deep property experience and the board looks forward to 

      the valuable contribution he is expected to make to the company.



16.   Subsequent events

      The acquisition of Atlantic Hills described above was concluded post

      the period end on 15 September 2015. The transaction is commercially

      effective on 1 October 2015 and the purchase consideration will be

      settled through the issue of new Equites shares during October 2015.

      Where these shares are issued before the ex date of the interim 

      dividend number 4, the distribution will be adjusted for the 

      antecedent dividend.



      The directors are not aware of any matters or circumstances arising

      subsequent to 31 August 2015 that require any  additional disclosure

      or adjustments to the financial results.



17.   Basis of preparation

      The unaudited consolidated interim results for the 6 months ended

      31 August 2015 are prepared in accordance with the JSE Listings 

      Requirements and the requirements of the Companies Act of South 

      Africa. The report is prepared in accordance with the framework 

      concepts and the measurement and recognition requirements of 

      International Financial Reporting Standards ("IFRS"), 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. Except

      for the adoption of revised and new standards that became effective

      during the year, all accounting policies applied in the preparation 

      of these unaudited interim financial results are in terms of IFRS and

      are consistent with those applied in the previous consolidated 

      financial statements. There was no material impact on the annual 

      financial statements as a result of the adoption of these standards.



      Bram Goossens (CA) SA, in his capacity as Financial Director, was 

      responsible for the preparation of these unaudited consolidated 

      interim results for the 6 months ended 31 August 2015. These 

      consolidated interim financial results have not been reviewed or 

      reported on by the company's auditors.



18.   Interim dividend

      Notice is hereby given of the declaration of interim dividend number 4

      of 16.38993 cents per share. Together with the special dividend 

      number 3 of 29.03409 cents per share declared on 3 September 2015,

      this brings the total distributions for the 6 months ended 

      31 August 2015 to 45.42402 cents per share.  



      As Equites is a REIT, the dividend meets the definition of a 

      'qualifying distribution' for the purposes of section 25BB of the 

      Income Tax Act, No. 58 of 1962 (Income Tax Act). Qualifying 

      distributions received by South African tax residents will form 

      part of their gross income in terms of section 10(1)(k)(i)(aa) of 

      the Income Tax Act). Consequently, these dividends are treated as 

      income in the hands of the shareholders and are not subject to 

      dividends withholding tax. The exemption from dividends withholding

      tax is not applicable to non-resident shareholders, but they may 

      qualify for relief under a tax treaty.



      Holders of uncertificated shares have to ensure that they have

      Verified their residence status with their Central Securities

      Depository Participant ("CSDP") or broker. Holders of certificated

      shares will be asked to complete a declaration to the company.



      An announcement with further details regarding the tax treatment 

      of the dividend will be released separately on SENS.



      The interim dividend is payable to shareholders in accordance with the

      timetable set out below:



                                                                       2015

      Declaration date                                 Thursday, 15 October

      Last day to trade cum dividend distribution        Friday, 30 October

      Shares trade ex dividend distribution              Monday, 2 November

      Record date                                        Friday, 6 November

      Payment date                                       Monday, 9 November



      Share certificates may not be dematerialised or rematerialised 

      between Monday, 2 November 2015 and Friday, 6 November 2015, both days

      inclusive.



      In respect of dematerialised shareholders, the interim dividend will

      be transferred to the CSDP account / broker accounts on Monday, 

      9 November 2015. Certificated shareholders' dividend payments will 

      be posted on or about Monday, 9 November 2015.  



      By order of the Board



      Equites Property Fund Limited



      15 October 2015



Condensed consolidated statement of financial position



                                      Unaudited     Unaudited       Audited

                                      31 August     31 August   28 February

                                           2015          2014          2015

                                          R'000         R'000         R'000



ASSETS

Non-current assets

Fair value of investment property 

(excluding straight-lining)           3 488 732     1 178 629     1 416 949 

Straight-lining lease accrual            31 588         6 999        14 928 

Property, plant and equipment             1 738             -         1 847 

Investment in subsidiaries                    -             -             - 

                                      3 522 058     1 185 628     1 433 724 

Current assets

Current tax receivable                      122           395            91 

Trade and other receivables               4 458         4 158         4 479 

Financial asset held at fair value        4 677        70 314         4 489 

Cash and cash equivalents                24 456        16 065         3 582 

Derivative financial asset                2 009             -             - 

                                         35 722        90 932        12 641 



TOTAL ASSETS                          3 557 780     1 276 560     1 446 365 



EQUITY AND LIABILITIES

Equity and reserves

Stated capital                        1 592 471     1 131 884     1 140 599 

Accumulated profit                      321 959        13 585       160 215 

Share-based payment reserve                 583             -           201 

                                      1 915 013     1 145 469     1 301 015 

Liabilities

Non-current liabilities

Financial liabilities                 1 383 410       121 729       127 372 

                                      1 383 410       121 729       127 372 

Current liabilities

Financial liabilities                   145 642             -           512 

Deferred tax                              1 424             -             - 

Trade and other payables                112 291         9 362        17 466 

                                        259 357         9 362        17 978 



TOTAL LIABILITIES                     1 642 767       131 091       145 350 

TOTAL EQUITY AND LIABILITIES          3 557 780     1 276 560     1 446 365



Condensed consolidated statement of comprehensive income



                                      Unaudited     Unaudited       Audited

                                       6 months      6 months     12 months

                                          ended         ended         ended

                                      31 August     31 August   28 February

                                           2015          2014          2015

                                          R'000         R'000         R'000



Revenue

Contractual revenue and tenant 

recoveries                               94 988        44 039       115 664 

Straight-lining of leases adjustment     16 660         6 999        14 928 

Dividends received from subsidiaries          -

                                        111 648        51 038       130 592 

Other gains                                 177             -           158 

Property operating and management 

expenses                                (13 999)       (9 369)      (24 480)

Net property income                      97 825        41 669       106 270 

Administrative expenses                  (5 242)       (2 142)       (7 742)

Operating profit                         92 583        39 527        98 528 

Fair value adjustments - 

investment property                     131 585          (767)      115 097 

Fair value adjustments - 

financial instruments                     2 521             -             - 

Finance costs                           (18 721)      (10 736)      (15 628)

Finance income                              558         2 024         2 425 

Financial instrument capital loss/gain        -        (1 490)       (1 490)

Capital raising expenses                      -       (14 288)      (14 901)

Net profit before tax                   208 526        14 270       184 031 

Income tax expense                            -             -             - 

Profit for the period                   208 526        14 270       184 031 



OTHER COMPREHENSIVE INCOME                    -             -             - 



TOTAL COMPREHENSIVE INCOME 

FOR THE PERIOD                          208 526        14 270       184 031 



PROFIT ATTRIBUTABLE TO:

Owners of the parent                    208 526        14 270       184 031 

Non-controlling interest                      -             -             - 

                                        208 526        14 270       184 031 



TOTAL COMPREHENSIVE INCOME 

ATTRIBUTABLE TO:

Owners of the parent                    208 526        14 270       184 031 

Non-controlling interest                      -             -             - 

                                        208 526        14 270       184 031 



Basic earnings per share (cents)          164.1          19.8         204.6 

Diluted earnings per share (cents)        163.3          19.8         204.4





Condensed consolidated statement of cash flows



                                      Unaudited     Unaudited       Audited

                                       6 months      6 months     12 months

                                          ended         ended         ended

                                      31 August     31 August   28 February

                                           2015          2014          2015

                                          R'000         R'000         R'000



Cash flows from operating activities

Profit before tax                       208 526        14 270       184 031 

Adjusted for:

Finance costs                            18 721        10 736        15 628 

Finance income                             (558)       (2 024)       (2 425)

Straight-lining of leases adjustment    (16 660)       (6 999)      (14 928)

Fair value adjustments                 (132 211)          767      (115 097)

Amortisation                                105             -            58 

Share based payment charge                  382             -           201 

Decrease in trade and other receivables  14 502        (4 158)       (4 479)

Increase in trade and other payables     61 036         9 362        17 466 

Cash generated from operations          153 843        21 954        80 455 

Finance costs paid                      (18 721)      (10 736)      (15 628)

Finance income received                     558          (395)        2 238 

Tax paid                                      -             -           (91)

Dividends paid                          (46 782)         (685)      (23 816)

Net cash flows from operating 

activities                               88 898        10 138        43 158 



Cash flows utilised by investing activities

Acquisition of investment properties    (53 226)     (603 464)     (811 171)

Movement in financial instruments 

held at fair value                       14 993

Investment in financial instrument            -      (200 000)     (200 000)

Amount including interest received from 

sale of financial instrument                  -       131 710       195 698 

Acquisition of property, plant and 

equipment                                (3 526)            -        (1 905)

Net cash flows utilised by investing 

activities                              (41 758)     (671 754)     (817 378)



Cash flows from financing activities

Proceeds from share issue                     -       650 000       650 430 

Proceeds from loans                     (29 458)       27 681       127 372 

Net cash flows from financing 

activities                              (29 458)      677 681       777 802 



Net movement in cash and cash 

equivalents                              17 682        16 065         3 582 

Cash and cash equivalents at the 

beginning of the period                   3 582             -             - 

Cash acquired as part of acquisition      3 191             -             - 

Cash and cash equivalents at the 

end of the year                          24 456        16 065         3 582



Condensed consolidated statement of changes in equity



                             Stated    Retained        Equity

                            capital    earnings       reserve         Total

                              R'000       R'000         R'000         R'000



Balance at 1 March 2014           -           -             -             - 

Total comprehensive income               14 270                      14 270 

Shares issued for property

and subsidiary 

acquisitions                481 884                                 481 884 

Shares issued for 

cash on listing             650 000                                 650 000 

Dividends distributed to 

shareholders                               (685)                       (685)

Balance at 

31 August 2014            1 131 884      13 585             -     1 145 469 



Balance at 

31 August 2014            1 131 884      13 585             -     1 145 469 

Total comprehensive income              169 761                     169 761 

Shares issued for cash          430                                     430 

Shares issued for property 

and subsidiary acquisitions   8 285                                   8 285 

Equity-settled 

share-based payment                                       201           201 

Dividends distributed 

to shareholders                         (23 131)                    (23 131)

Balance at 

28 February 2015          1 140 599     160 215           201     1 301 015 



Balance at 

28 February 2015          1 140 599     160 215           201     1 301 015 

Total comprehensive income        -     208 526             -       208 526 

Shares issued for property 

and subsidiary acquisitions 451 872           -             -       451 872 

Equity-settled share-based 

payment                           -           -           382           382 

Dividends distributed 

to shareholders                   -     (46 782)            -       (46 782)

Balance at 

31 August 2015            1 592 471     321 959           583     1 915 013





Condensed operating segment information



                                      Unaudited     Unaudited       Audited

                                       6 months      6 months     12 months

                                          ended         ended         ended

                                      31 August     31 August   28 February

                                           2015          2014          2015

                                          R'000         R'000         R'000



Revenue

Industrial                               86 357         37399        93 851 

Office                                    8 631          6640        21 813 

Non-property                                  -             -             - 

Straight-lining of leases                16 660          6999        14 928 

                                        111 648        51 038       130 592 



Operating profit

Industrial                               74 586        29 827        75 393 

Office                                    6 895         4 843        15 949 

Non-property                             (5 557)       (2 142)       (7 742)

Straight-lining of leases                16 660         6 999        14 928 

                                         92 583        39 527        98 528 



Total assets

Industrial                            3 129 208       975 742     1 041 017 

Office                                  392 308       230 281       383 327 

Non-property                              4 677        70 537         7 093 

                                      3 526 193     1 276 560     1 431 437



Administration



Directors

A Taverna-Turisan (CEO)^, GR Gous (COO), B Goossens (CFO), PL Campher*+ 

(Chairman), G Lanfranchi* (Deputy Chairman), AJ Gouws*, K Dreyer*, N Khan*+, 

RE Benjamin-Swales*+

*Non-executive

+Independent

^Italian





Registered office

14th Floor

Portside Tower

4 Bree Street

Cape Town

8000



Contact details

info@equites.co.za



Company secretary

Riaan Gous



Transfer secretary

Link Market Services South Africa Proprietary Limited



Auditors

Moore Stephens Cape Town Inc.



Sponsor

Java Capital 



Bankers

Nedbank Limited



Attorneys

Cliffe Dekker Hofmeyr Inc.


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