To view the PDF file, sign up for a MySharenet subscription.

ADRENNA PROPERTY GROUP LIMITED - Audited results for the year ended 28 February 2017

Release Date: 19/05/2017 15:00
Code(s): ANA     PDF:  
Wrap Text
Audited results for the year ended 28 February 2017

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 2017


Statement of Profit or Loss and Other Comprehensive Income FOR THE YEAR ENDED 28 FEBRUARY 2017


                                                                                      Audited   Audited    Audited    Audited
                                                                                       Group     Group    Company    Company
                                                                                        2017      2016       2017       2016
                                                                                       R’000     R’000      R’000      R’000

REVENUE                                                                                26 160    23 232      6 530      3 762
Operating income before interest and revaluations                                      16 226    14 642      1 410        418
Fair value adjustment on investment properties                                         19 018     4 736          -          -
Investment income                                                                         953        55        899        522
Finance costs                                                                         (6 732)   (6 500)      (492)      (715)
Net income before taxation                                                             29 465    13 429      1 817        225
Taxation                                                                              (8 368)   (5 575)      (520)       (91)
Income after taxation for the year                                                     21 097     7 854      1 297        134
Non-controlling interest                                                                    -         -          -          -
Income attributable to ordinary shareholders                                           21 097     7 854      1 297        134
Other comprehensive income:
Total comprehensive income attributable to:
– Ordinary shareholders                                                                21 097     7 854      1 297       134
– Non-controlling interests                                                                 -         -          -         -
                                                                                       21 097     7 854      1 297       134
Basic earnings per share (cents)                                                         37,7      14,0          -         -

There was no dilution in basic earnings per share during the current or prior year.




Statement of Financial Position AS AT 28 FEBRUARY 2017

                                   Audited   Audited    Audited    Audited
                                    Group     Group    Company    Company
                                     2017      2016       2017       2016
                                    R’000     R’000      R’000      R’000

ASSETS
Non-current assets
Investment properties              229 954   216 877          -          -
Investments in subsidiaries              -         -     11 895     11 895
Loans owing by third parties         5 447     7 276      5 447      7 276
Operating lease assets               6 889     5 235          -          -
Deferred taxation                      289     2 691          -          -
                                   242 579   232 079     17 342     19 171
Current assets
Amounts owing by group companies         -         -      3 910     10 278
Loans owing by third parties         1 873     1 752      1 873      1 752
Inventory                            1 430     1 430          -          -
Accounts receivable                  3 082     2 126      1 712         24
Operating lease assets               2 871     2 375          -          -
Current taxation receivable             40       394          -          -
Cash and cash equivalents              263     1 145          -          -
                                     9 559     9 222      7 495     12 054
Total assets                       252 138   241 301     24 837     31 225

EQUITY AND LIABILITIES
Equity
Stated capital                         567       567        567        567
Retained earnings                  145 954   124 857     22 789     21 492
                                   146 521   125 424     23 356     22 059
Non-current liabilities
Borrowing                           54 606    65 511          -          -
Deferred taxation                   38 435    33 844          -          -
                                    93 041    99 355          -          -

Current liabilities
Current portion of borrowings        9 626     7 717          -          -
Amounts owing to group companies         -         -          -      1 784
Accounts payable                     1 280     1 713         75        290
Current taxation payable               313        69         49         69
Bank overdraft                       1 357     7 023      1 357      7 023
                                    12 576    16 522      1 481      9 166
Total equity and liabilities       252 138   241 301     24 837     31 225
Statement of Cash Flows FOR THE YEAR ENDED 28 FEBRUARY 2017



                                                                      Audited    Audited     Audited    Audited
                                                                        Group     Group     Company    Company
                                                                         2017      2016        2017        2016
                                                                        R’000     R’000      R’000       R’000
Cash generated by operation                                            12 687    13 128       (493)       (555)
Finance costs                                                         (6 732)   (6 500)       (492)       (715)
Investment income - bank                                                  953        551        899         522
Taxation refunded                                                         281          -          -           -
Taxation paid                                                        ( 1 058)       (42)      (540)       (254)
                                                                        6 131     7 137        (626     (1 002)
Cash flows from investing activities
Proceeds from sale of investment property                              6 745          -           -           -
Acquisition of investment property                                     (804)          -           -           -
Net movement of loans owing by third parties                           1 708    (9 028)       1 708     (9 028)
                                                                       7 649    (9 028)       1 708     (9 028)
Cash flows from financing activities
Repayment of loans                                                         -      (406)           -           -
Proceeds from raising of additional bond finance                           -      9 700           -           -
Repayment of borrowings                                              (8 996)    (6 286)           -           -
Net movement in amounts held with group companies                          -          -       4 584      10 171
                                                                     (8 996)      3 008       4 584      10 171
Movement in cash and cash equivalents                                  4 784      1 117       5 666         141
Cash and cash equivalents at beginning of the year                   (5 878)    (6 995)     (7 023)     (7 164)
Cash and cash equivalents at end of the year                         (1 094)    (5 878)     (1 357)     (7 023)




Statement of Changes in Equity for the year ended 28 February 2017


                                                                     Audited    Audited     Audited    Audited
                                                                      Group      Group     Company    Company
                                                                       2017       2016        2017       2016
                                                                      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                                      124 857    117 003   21 492   21 358
Comprehensive income attributable to ordinary shareholders             21 097      7 854    1 297      134
Balance at end of the year                                            145 954    124 857   22 789   21 492
Total equity and reserves attributable to ordinary shareholders       146 521    125 424   23 356   22 059
Non-controlling interests
Balance at beginning of the year                                            -          -        -        -
Balance at end of the year                                                  -          -        -        -
Total equity and reserves                                             146 521    125 424   23 356   22 059




PER SHARE INFORMATION
                                                                         2017       2016
                                                                        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                       21 097      7 854
Basic earnings per share (cents)                                         37,7       14,0

Headline Earnings Reconciliation
Net profit per statement of comprehensive income                        21 097     7 854
Profit on disposal of assets                                             (355)         -
Revaluation of investment property (net of taxation)                  (13 417)   (1 184)
Headline earnings                                                        7 325     6 670
Headline earnings per share (cents)                                       13,1      11,9
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)                                       262,0      224,3
Net tangible asset value per share (cents)                              262,0      224,3


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 Johannesburg Stock Exchange 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.

The Financial Director, Hartmann Beukes CA(SA), was responsible for the preparation of the audited financial results.

AUDIT OPINION

The consolidated annual financial statements have been audited by our auditors, RSM South Africa Incorporated.
In their opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the group as at 28 February 2017, and its consolidated
financial performance and consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South
Africa.
A copy of their unmodified audit report is available for inspection at the company's registered office.

ACQUISITIONS AND DISPOSALS DURING THE PERIOD
During the year under review, additions totaling R0,8 million were effected to the existing investment property. These additions comprise warehouse conversions within the Consani Industrial
Park.

The properties disposed of during the year under review comprise the following:
-           Section 8 of Red Sails, Hout Bay being a retail outlet measuring 134 square meters in extent which was sold for a consideration of R2 680 000, exclusive of VAT
-           Section 6 of Red Sails, Hout Bay being a retail outlet measuring 149 square meters in extent which was sold for a consideration of R2 880 000, exclusive of VAT
-           Section 5 of Red Sails, Hout Bay being a retail outlet measuring 77 square meters in extent which was sold for a consideration of R1 540 000, exclusive of VAT

CHANGES TO THE BOARD
There were no changes effected to the Board during the year under review.


GENERAL REVIEW, FINANCIAL RESULTS AND PROSPECTS

The environment within which the group operates remained static during the year under review. While market conditions have stabilised,
the directors do not anticipate substantial growth within the real estate sector.

The group achieved operating income before interest and fair value adjustments of R16,2 million, an expected increase from the prior year’s
operating profit of R14,6 million. Rental income generated during the year reflected a 10% 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 (R2,1 million credited to revenue in the current year as opposed to R0,3 million debited in the prior year). Fair value adjustments
to investment property held amounted to R19 million in the current year, as opposed to R4,7 million reflected in the prior year. The group
decreased the percentage of borrowings directly related to fixed properties to 27,9% (2016: 33,8%), well within its target maximum of 60%.

Basic earnings per share increased from 14,0 cents per share in 2016 to 37,7 cents per share in 2017, an improvement of 169,3%. Headline
earnings per share increased from 11,9 cents per share in 2016 to 13,1 cents per share in 2017, an increase of 10,1%. Net asset value per
share and net tangible asset value per share both increased from 224,3 cents in 2016 to 262,0 cents per share in 2017, an increase of 16,8%.
The improvement in the above key performance and valuation indicators translates to a consistent growth in shareholder wealth.

The directors continue to make every effort to reduce borrowing costs and succeeded in this endeavour by lowering secured borrowings
and the bank overdraft from a cumulative balance of R80 million in 2016 to R65,5 million in 2017. 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.




                                                                                         2017 (R’000)                                                 2016 (R’000)
                                                                 Investment     Property-    Property           Head                    Investment    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                                                              26 160              -             -            -         26 160         23 232          -          -        -    23 232
Cost of sales                                                             -              -             -            -              -              -          -          -        -         -
Gross profit                                                         26 160              -             -            -         26 160         23 232          -          -        -   23 232
Operating income/(loss) before interest and revaluations              21 35              -             -      (5 126)         16 226          4 055          -          -   10 587    14 642
Fair value adjustments                                               19 018              -             -            -         19 018          4 736          -          -        -     4 736
Investment income                                                        54              -             -          899            953             29          -          -      522       551
Finance costs                                                       (6 240)              -             -        (492)        (6 732)        (5 785)          -          -    (715)   (6 500)
Net income/(loss) before taxation                                    34 184              -             -      (4 719)         29 465          3 035          -          -   10 394    13 429
Taxation                                                            (7 848)              -             -        (520)         (8 368        (5 484)          -          -     (91)   (5 575)
Profit/(loss) for the year                                           26 336              -             -      (5 239)         21 097        (2 449)          -          -   10 303     7 854
Other comprehensive income
Total comprehensive income attributable to:
Ordinary shareholders                                                26 336              -             -      (5 239)        21 097         (2 449)          -          -   10 303    7 854
Non-controlling interests                                                 -              -             -            -             -               -          -          -        -        -
                                                                     26 336              -             -      (5 239)        21 097         (2 449)          -          -   10 303    7 854
Other information
Segment assets                                                      241 677              -         1 430        9 031   252 138        230 819             -      1 430       9 052   241 301
Segment liabilities                                                 104 137              -             -        1 480   105 617        108 510             -          -       7 367   115 877




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:

                                                                                  2017               2016
                                                                                 R’000              R’000
Investment Property Holding
Customer A                                                                        7 659             7 158
Customer B                                                                        5 809             5 480
Customer C                                                                        2 804                 -




                                                                                 Group              Group
                                                                                  2017               2016
                                                                                 R’000              R’000
RELATED PARTIES
Group
The following related parties have been identified in terms of their
association with the group:
Islandsite Investments Twenty Three Proprietary Limited and Kwabahathi
Eiendomme cc (entities controlled by a director, Mr RP Fertig)
Propconsult Proprietary Limited (entity controlled by the Company
Secretary, Mr BW Kaiser)
JNF Investment Trust (entity in which a director, Mr WP Alcock, is
both a beneficiary and a trustee)
Phoenix Accounting Solutions – Chartered Accountants (SA) (entity in
which the financial director, Mr H Beukes, holds an interest)
RMS Corporate Solutions Proprietary Limited (entity with common
directorship)
RMS Property and Facilities Management Proprietary Limited (an
operating subsidiary within the RMS Corporate Solutions Group)
During the year the group had the following related party
transactions:
– Consultancy fees paid to Islandsite Investments Twenty Three
Proprietary Limited and Kwabahathi Eiendomme cc                                875             553
– Consultancy fees paid to Propconsult Proprietary Limited                     465             420
– Consultancy fees paid to JNF Investment Trust                                210             180
– Accounting fees paid to Phoenix Accounting Solutions –
Chartered Accountants (SA)                                                     482             134
– Asset management fees paid to RMS Corporate Solutions
Proprietary Limited                                                          3 289            1 602
– Administration fees paid to RMS Corporate Solutions Proprietary
Limited                                                                          -               -
– Rental paid to RMS Corporate Solutions Proprietary Limited                   221             164
– Operating costs paid to RMS Corporate Solutions Proprietary
Limited                                                                         71              67
– Property management fees, facilities management fees and
collection commission paid to RMS Property and Facilities
Management Proprietary Limited                                               1 507            1 745
– Interest received from RMS Corporate Solutions Proprietary                 (897)            (522)
– Professional fees paid to RMS Property and Facilities Management
Proprietary Limited                                                            200                -
At year-end the group had the following related party balances:
– Loan owing (to)/by RMS Corporate Solutions Proprietary Limited             7 320            9 028
– Included in trade payables and relating to RMS Corporate
Solutions Proprietary Limited                                                    -            (180)




By Order of the Board

Johannesburg
19 May 2017

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: 19/05/2017 03:00:00 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.

Share This Story