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Audited results for the year ended 29 February 2016
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 29 FEBRUARY 2016
THE ANNUAL REPORT OF ADRENNA PROPERTY GROUP LIMITED
Statement of Profit or Loss and Other Comprehensive Income
FOR THE YEAR ENDED 29 FEBRUARY 2016
Audited Audited Audited Audited
Group Group Company Company
2016 2015 2016 2015
R'000 R'000 R'000 R'000
REVENUE 23 232 26 228 3 762 8 589
Cost of sales – (4 322) – –
Gross profit 23 232 21 906 3 762 8 589
Operating income before interest and revaluations 14 642 10 310 418 3 264
Fair value adjustment on investment properties 4 736 5 650 – –
Investment income 551 253 522 224
Finance costs (6 500) (6 549) (715) (775)
Net income before taxation 13 429 9 664 225 2 713
Taxation (5 575) (2 443) (91) (725)
Income after taxation for the year 7 854 7 221 134 1 988
Non-controlling interest – – – –
Income attributable to ordinary shareholders 7 854 7 221 134 1 988
Other comprehensive income:
Total comprehensive income attributable to:
– Ordinary shareholders 7 854 7 221 134 1 988
– Non-controlling interests – – – –
7 854 7 221 134 1 988
Basic earnings per share (cents) 14,0 12,9 – –
There was no dilution in basic earnings per share during the current or prior year.
Statement of Financial Position
AS AT 29 FEBRUARY 2016
Audited Audited Audited Audited
Group Group Company Company
2016 2015 2016 2015
R'000 R'000 R'000 R'000
ASSETS
Non-current assets
Investment properties 216 877 212 141 – –
Investments in subsidiaries – – 11 895 11 895
Loans owing by third parties 7 276 – 7 276 –
Operating lease assets 5 235 5 586 – –
Deferred taxation 2 691 4 073 – –
232 079 221 800 19 171 11 895
Current assets
Amounts owing by group companies – – 10 278 18 665
Loans owing by third parties 1 752 – 1 752 –
Inventory 1 430 1 430 – –
Accounts receivable 2 126 1 364 24 14
Operating lease assets 2 375 1 658 – –
Current taxation receivable 394 732 – –
Cash and cash equivalents 1 145 169 – –
9 222 5 353 12 054 18 679
Total assets 241 301 227 153 31 225 30 574
EQUITY AND LIABILITIES
Equity
Stated capital 567 567 567 567
Retained earnings 124 857 117 003 21 492 21 358
125 424 117 570 22 059 21 925
Non-current liabilities
Borrowings 65 511 62 800 – –
Deferred taxation 33 844 29 866 – –
99 355 92 666 – –
Current liabilities
Current portion of borrowings 7 717 7 015 – –
Amounts owing to group companies – – 1 784 –
Loans owing to third parties – 406 – –
Accounts payable 1 713 2 100 290 1 253
Taxation 69 232 69 232
Bank overdraft 7 023 7 164 7 023 7 164
16 522 16 917 9 166 8 649
Total equity and liabilities 241 301 227 153 31 225 30 574
Statement of Cash Flows
FOR THE YEAR ENDED 29 FEBRUARY 2016
Audited Audited Audited Audited
Group Group Company Company
2016 2015 2016 2015
R'000 R'000 R'000 R'000
Cash generated by operations 13 128 14 153 (555) 6 956
Finance costs (6 500) (6 549) (715) (775)
Investment income 551 253 522 224
Taxation paid (42) (1 748) (254) (836)
7 137 6 109 (1 002) 5 569
Cash flows from investing activities
Proceeds from disposal of property, plant and equipment – 54 – 54
Repayment of financial assets – 7 164 – 7 164
Loans advanced to third parties (9 028) – (9 028) - (9 028) 7 218 (9 028) 7 218
Cash flows from financing activities
Repayment of loans (406) – – –
Proceeds from raising of additional bond finance 9 700 – – –
Repayment of borrowings (6 286) (10 424) – –
Net movement in amounts held with group companies – – 10 171 (9 993)
3 008 (10 424) 10 171 (9 993)
Movement in cash and cash equivalents 1 117 2 903 141 2 794
Cash and cash equivalents at beginning of the year (6 995) (9 898) (7 164) (9 958)
Cash and cash equivalents at end of the year (5 878) (6 995) (7 023) (7 164)
Statement of Changes in Equity
FOR THE YEAR ENDED 29 FEBRUARY 2016
Audited Audited Audited Audited
Group Group Company Company
2016 2015 2016 2015
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 117 003 109 782 21 358 19 370
Comprehensive income attributable to ordinary shareholders 7 854 7 221 134 1 988
Balance at end of the year 124 857 117 003 21 492 21 358
Total equity and reserves attributable to ordinary shareholders 125 424 117 570 22 059 21 925
Non-controlling interests
Balance at beginning of the year – – – –
Balance at end of the year – – – –
Total equity and reserves 125 424 117 570 22 059 21 925
EARNINGS PER SHARE/DIVIDENDS PER SHARE
2016 2015
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 7 854 7 221
Basic earnings per share (cents) 14,0 12,9
Headline earnings
Net profit per statement of comprehensive income 7 854 7 221
Loss on disposal of assets – 18
Revaluation of investment property (net of taxation) (1 184) (3 485)
Headline earnings 6 670 3 754
Headline earnings per share (cents) 11,9 6,7
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) 224,3 210,3
Net tangible asset value per share (cents) 224,3 210,3
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 of South Africa 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
The consolidated annual financial statements have been audited by our auditors, RSM South Africa.
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 R14,6 million,
an anticipated increase since the prior year’s operating profit of R10,3 million. Rental income
generated during the year reflected a 9% increase in comparison with the prior year, a result attained
through the signing of additional long term leases where vacancies existed in the prior period.
Due to the extension of a number of significant long-term leases, the group experienced a beneficial
effect in the current year arising from straight-lining of rental income (R0,3 million credited to
revenue in the current year as opposed to R0,1 million debited in the prior year). Fair value adjustments
to investment property held amounted to R4,7 million in the current year, as opposed to R5,7 million
reflected in the prior year, a factor of the constrained market. The group marginally increased the
percentage of borrowings directly related to fixed properties to 33,8% (2015: 32,9%), well within its
target maximum of 60%.
Basic earnings per share increased from 12,9 cents per share in 2015 to 14,0 cents per share in 2016,
an improvement of 8,5%. Headline earnings per share increased from 6,7 cents per share in 2015 to
11,9 cents per share in 2016, an increase of 77,6%. Net asset value per share and net tangible asset value
per share both increased from 210,3 cents in 2015 to 224,3 cents per share in 2016, an increase of 6,7%.
The improvement in the above key performance and valuation indicators translates to a consistent growth in
shareholder wealth.
Your directors continue to make every effort to reduce borrowing costs, and notwithstanding the raising of
a second covering bond over the Consani Industrial Park, succeeded in this endeavour by lowering borrowing
costs to R 6,5 million as compared with R6,55 in the previous period . This was achieved through the gradual
diminishment of the overdraft facility with First National Bank Limited and consistent monthly capital repayments
made to ABSA Bank Limited. In anticipation of rising interest rates, and while the directors assess potential
expansion projects, the capital raised from the second covering bond was advanced to RMS Corporate Solutions
Proprietary Limited at a beneficial interest rate, thus creating an effective hedge against interest rate fluctuations.
THE ANNUAL REPORT OF ADRENNA PROPERTY GROUP LIMITED
2016 (R'000) 2015 (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 23 232 – – – 23 232 20 833 – 5 395 – 26 228
Cost of sales – – – – – – – (4 322) – (4 322)
Gross Profit 23 232 – – – 23 232 20 833 – 1 073 – 21 906
Operating income/(loss) before interest and revaluations 4 055 – – 10 587 14 642 15 874 (28) – (5 536) 10 310
Fair value adjustments 4 736 – – – 4 736 5 650 – – – 5 650
Investment income 29 – – 522 551 29 – – 224 253
Finance costs (5 785) – – (715) (6 500) (5 774) – – (775) (6 549)
Net income/(loss) before taxation 3 035 – – 10 394 13 429 15 779 (28) – (6 087) 9 664
Taxation (5 484) – – (91) (5 575) (1 718) – – (725) (2 443)
Profit/(loss) for the year (2 449) – – 10 303 7 854 14 061 (28) – (6 812) 7 221
Other comprehensive income – – – – – – – – – –
Total comprehensive income attributable to:
Ordinary shareholders (2 449) – – 10 303 7 854 14 061 (28) – (6 812) 7 221
Non-controlling interests – – – – – – – – – –
(2 449) – – 10 303 7 854 14 061 (28) – (6 812) 7 221
Other information
Segment assets 230 819 – 1 430 9 052 241 301 225 710 – 1 430 13 227 153
Segment liabilities 108 510 – – 7 367 115 877 100 949 – – 8 634 109 583
A geographical segmental report is not presented as the entirety 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:
2016 2015
R'000 R'000
Investment Property Holding
Customer A 7 158 6 690
Customer B 5 480 5 140
ANNUAL FINANCIAL STATEMENTS
The audited annual financial statements for the year ended 29 February
2016 together with a notice of the annual general meeting to be held on
15 July 2016, will be mailed to shareholders on 31 May 2016. Copies of the
annual financial statements are available from bernard@rmsprop.co.za.
RECORD DATE
The record date for shareholders to be registered in order to attend and vote
at the Annual General Meeting of the company is Friday, 8 July 2016.
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 29 February 2016 is
Rnil.
SUBSEQUENT EVENTS
No material matters have occurred subsequent to 29 February 2016 that
require disclosure.
DIVIDENDS
Taking into account the impact of the static trading conditions in the property
industry, your directors have resolved to retain cash in the group, so as to bolster
and grow the annuity income operations for the benefit of shareholders.
31 May 2016
DIRECTORS:
R P Fertig (Chief Executive Officer)
W P Alcock† (Chairman)
R S Watson*
H Beukes CA(SA)
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: 31/05/2016 03:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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