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Consolidated unaudited interim results for the six months ended 31 August 2016
Adrenna Property Group Limited
(Incorporated in the Republic of South Africa) (Registration number 1998/012245/06)
(JSE share code: ANA ISIN: ZAE000163580)
CONSOLIDATED UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 AUGUST 2016
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Six months Six months 12 months
ended ended ended
31 August 2016 31 August 2015 29 February 2016
R 000 R 000 R 000
(unaudited) (unaudited) (audited)
Revenue 11 765 11 224 23 232
Cost of sales - - -
Gross profit 11 765 11 224 23 232
Operating income before interest and revaluations 6 572 5 893 14 642
Fair value adjustment on investment properties 4 662 - 4 736
Investment income 498 98 551
Finance costs (3 537) (3 064) (6 500)
Net income from Non-current Assets Held For Sale 62 - -
Net income before taxation 8 257 2 927 13 429
Taxation (2 098) (381) (5 575)
Income after taxation for the period 6 159 2 546 7 854
Non-controlling interest - - -
Income attributable to ordinary shareholders 6 159 2 546 7 854
Total net profit 6 159 2 546 7 854
Other comprehensive income - - -
Total comprehensive income attributable to:
- Ordinary shareholders 6 159 2 546 7 854
- Non-controlling interests - - -
6 159 2 546 7 854
CONDENSED STATEMENT OF FINANCIAL POSITION
31 August 2016 31 August 2015 29 February 2016
R 000 R 000 R 000
(unaudited) (unaudited) (audited)
ASSETS
Non-current assets 214 795 212 141 216 877
Investment properties 6 334 6 580 7 276
Loans owing by third parties 5 235 5 586 5 235
Operating lease assets 779 3 713 2 691
Deferred taxation 227 143 228 020 232 079
Current assets
Loans owing by third parties 1 842 1 305 1 752
Inventory 1 430 1 430 1 430
Accounts receivable 1 363 1 205 2 126
Operating lease assets 2 375 1 658 2 375
Current taxation receivable 421 433 394
Cash and cash equivalents 149 122 1 145
7 580 6 153 9 222
Non-current assets held for sale 6 745 - -
Total assets 241 468 234 173 241 301
EQUITY AND LIABILITIES
Equity
Stated capital and reserves 131 583 120 116 125 424
Non-current liabilities
Borrowings 60 040 68 104 65 511
Deferred tax 33 821 29 737 33 844
93 861 97 841 99 355
Current liabilities
Current portion of borrowings 8 179 7 889 7 717
Loans owing to third parties - 409 -
Accounts payable 1 321 1 063 1 713
Taxation payable 42 138 69
Bank overdraft 6 482 6 717 7 023
16 024 16 216 16 522
Total equity and liabilities 241 468 234 173 241 301
CONDENSED STATEMENT OF CASH FLOWS
Six months Six months 12 months
ended ended ended
31 August 2016 31 August 2015 29 February 2016
R 000 R 000 R 000
(unaudited) (unaudited) (audited)
Cash generated by operations 3 704 4 848 7 137
Cash flows from investing activities 851 (7 800) (9 028)
Cash flows from financing activities (5 010) 3 352 3 008
Movement in cash and cash equivalents (455) 400 1 117
Cash and cash equivalents at the beginning of the period (5 878) (6 995) (6 995)
Cash and cash equivalents at the end of the period (6 333) (6 595) (5 878)
CONDENSED STATEMENT OF CHANGES IN EQUITY
31 August 2016 31 August 2015 29 February 2016
R 000 R 000 R 000
(unaudited) (unaudited) (audited)
STATED CAPITAL
Ordinary stated capital 567 567 567
RESERVES
Retained earnings
Balance at beginning of period 124 857 117 003 117 003
Comprehensive income attributable to ordinary shareholders 6 159 2 546 7 854
Balance at the end of the period 131 016 119 549 124 857
Total reserves attributable to:
Ordinary shareholders 131 016 119 549 124 857
Non-controlling interests - - -
Total reserves 131 016 119 549 124 857
Total equity and reserves 131 583 120 116 125 424
SUPPLEMENTARY INFORMATION
31 August 2016 31 August 2015 29 February 2016
(unaudited) (unaudited) (audited)
Number of ordinary shares in issue at the beginning of the period (000) 55 915 55 915 55 915
Number of ordinary shares in issue at the end of the period (000) 55 915 55 915 55 915
Weighted average number of shares in issue during the period (000) 55 915 55 915 55 915
Basic earnings
Net profit per condensed statement of comprehensive income (R 000) 6 159 2 546 7 854
Basic earnings per share (cents) 11,0 4,6 14,0
Headline earnings
Net profit per condensed statement of comprehensive income (R 000) 6 159 2 546 7 854
Profit on sale of investment property (R 000) - - -
Revaluation of investment property (net of taxation) (R 000) (3 357) - (1 184)
Headline earnings 2 802 2 546 6 670
Headline earnings per share (cents) 5,0 4,6 11,9
Dividends per share (cents) - - -
Net asset value per share (cents) 235,3 214,8 224,3
Net tangible asset value per share (cents) 235,3 214,8 224,3
NOTES
BASIS OF PREPARATION
These 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 Johannesburg Stock
Exchange. The unaudited 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 and the SAICA Financial
Reporting Guides (formerly the AC 500 Standards) as issued by the Accounting Practices Committee and its successor and
are consistent with those applied in the most recent annual financial statements. These results were prepared by the Financial
Director, Mr H Beukes. These results have not been reviewed or audited.
CONDENSED SEGMENT RESULTS
Six months Six months 12 months
ended ended ended
31 August 2016 31 August 2015 29 February 2016
R 000 R 000 R 000
(unaudited) (unaudited) (audited)
Revenue
Investment property holding 11 765 11 224 23 232
Property-related services - - -
Property held for resale - - -
Head office administration - - -
11 765 11 224 23 232
Income/(Loss) before taxation
Investment property holding 10 718 5 321 3 035
Property-related services - - -
Property held for resale - - -
Head office administration (2 523) (2 394) 10 394
Non-current Assets Held For Sale 62 - -
8 257 2 927 13 429
Total assets
Investment property holding 225 078 225 710 230 819
Property-related services - - -
Property held for resale 1 430 1 430 1 430
Head office administration 8 215 7 033 9 052
Non-current Assets Held For Sale 6 745 - -
241 468 234 173 241 301
Total liabilities
Investment property holding 103 174 107 174 108 510
Property-related services - - -
Property held for resale - - -
Head office administration 6 711 6 883 7 367
Non-current Assets Held For Sale - - -
109 885 114 057 115 877
GENERAL REVIEW AND FINANCIAL RESULTS
Revenue for the period ended 31 August 2016 reflects an increase of 4,8% on the comparable results for 2015. With the majority of escalations occurring in the latter half of the year it is anticipated that this percentage will improve.
The effects of reductions in vacancy levels to less than 1% across the group, accompanied by stringent cost control processes, have yielded an increase in operating profits before interest and revaluations of 11,5%.
The directors continue with their efforts to maximise rental and minimise associated costs of the income-producing investment properties in the group.
During the latter part of the period, the group commenced negotiations for the disposal of 3 of the remaining 4 retail shops held as investment property in Hout Bay. Based on the negotiated selling prices (net of commissions), the retail properties in Hout Bay were revalued to the indicative fair values. The carrying values and associated results of the units being disposed of were reclassified as “Non-current assets held for sale�, and are being reflected separately on the Condensed Statement of Financial Position and Condensed Statement of Comprehensive Income respectively.
The loan made to a third party at an advantageous interest rate has produced beneficial investment income during the period, and consistent repayments continue to be received.
The group continued to actively decrease its existing bank overdraft with First National Bank, having reduced the overdraft by R 541 000 in the six months since the end of the preceding financial year.
Activities within the period ended 31 August 2016 have produced an improvement in the Net Asset Value per share of 11 cents since the financial year ended 29 February 2016. The group has also achieved an increase in Headline Earnings per Share of 0,4 cents in comparison with the previous period ended 31 August 2015.
SUBSEQUENT EVENTS
Subsequent to the period ended 31 August 2016, the disposal of one of the retail shops under negotiation was duly finalised and the sales proceeds received. The particular unit was disposed of for gross proceeds of R 2,68 million before deduction of commissions and other costs directly associated with the sale.
The following details pertain to the unit successfully disposed of:
Net income yielded for the period ended 31 August 2016 62 479
Average monthly net income lost due to disposal of unit 10 413
Accounting profit on disposal of unit 169 361
At the date of approval of these interim results, the disposals of the other two units were still in process, but had not been finalised as yet.
DIVIDENDS
Taking into account the negative 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.
28 October 2016.
DIRECTORS: R P Fertig (Chief Executive Officer), W P Alcock** (Chairman), H Beukes CA(SA) (Financial Director),
B Mothelesi*, M Moela*, R Watson* (**Non-executive) (*Independent non-executive)
COMPANY SECRETARY: B W Kaiser
TRANSFER SECRETARIES: Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg, 2001
REGISTERED OFFICE: 2969 William Nicol Drive, Wedgewood Link, Bryanston, 2021
SPONSOR: Arbor Capital Sponsors (Pty) Limited
Date: 28/10/2016 12:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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