ADRENNA PROPERTY GROUP LIMITED - Unaudited results for the six months ended 31 August 2017

Release Date: 30/11/2017 10:05
Code(s): ANA
 
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Unaudited results for the six months ended 31 August 2017

ADRENNA PROPERTY GROUP LIMITED
(Registration Number 1998/012245/06)
Share Code: ANA    ISIN: ZAE000163580
("Adrenna" or "the Group")

CONDENSED STATEMENT OF COMPREHENSIVE INCOME
          Six months ended     Six months ended      12 months ended
                                                       31 August 2017       31 August 2016     28 February 2017
                                                                R’000                R’000                R’000
                                                           (unaudited)          (unaudited)            (audited)

Revenue                                                        13 076               11 765               26 160

Gross profit                                                   13 076               11 765               26 160


Operating income before interest and revaluations               9 312                6 572               16 226
Fair value adjustments on investment properties                   448                4 662               19 018
Investment income                                                 432                  498                  953
Finance costs                                                  (3 032)              (3 537)              (6 732)
Net income from Non-current Assets Held For Sale                   -                    62                    -


Net income before taxation                                      7 160                8 257               29 465
Taxation                                                       (2 542)              (2 098)              (8 368)

Income after taxation for the period                            4 618                6 159               21 097

Non-controlling interest                                            -                    -                    -
Income attributable to ordinary shareholders                    4 618                6 159               21 097
Total net profit                                                4 618                6 159               21 097

Other comprehensive income                                          -                    -                    -

Total comprehensive income attributable to:
- Ordinary shareholders                                         4 618                6 159               21 097
- Non-controlling interests                                         -                    -                    -
 
                                                                4 618                6 159               21 097

 
CONDENSED STATEMENT OF FINANCIAL POSITION
                                                       31 August 2017       31 August 2016     28 February 2017
                                                                R’000                R’000                R’000
                                                           (unaudited)          (unaudited)            (audited)

ASSETS
Non-current assets                                            
Investment properties                                         231 562              214 795              229 954
Property, plant and equipment                                      18                    -                    -
Loans owing by third parties                                    4 912                6 334                5 447
Operating lease assets                                          6 913                5 235                6 889
Deferred taxation                                                 254                  779                  289
     
                                                              243 659              227 143              242 579

Current assets
Loans owing by third parties                                    2 190                1 842                1 873
Inventory                                                       1 430                1 430                1 430
Accounts receivable                                             2 854                1 363                3 082
Operating lease assets                                          2 871                2 375                2 871
Current taxation receivable                                       146                  421                   40 
Cash and cash equivalents                                       6 554                  149                  263

                                                               16 045                7 580                9 559


Non-current assets held for sale                                6 000                6 745                    -

Total assets                                                  265 704              241 468              252 138


EQUITY AND LIABILITIES
Equity
Stated capital and reserves                                   151 139              131 583              146 521


Non-current liabilities       
Borrowings                                                     59 913               60 040               54 606
Deferred tax                                                   39 060               33 821               38 435

                                                               
                                                               98 973               93 861               93 041


Current liabilities
Current portion of borrowings                                  11 030                8 179                9 626
Accounts payable                                                1 654                1 321                1 280
Taxation payable                                                1 262                   42                  313
Bank overdraft                                                  1 646                6 482                1 357

                                                               15 592               16 024               12 576


Total equity and liabilities                                  265 704              241 468              252 138






CONDENSED STATEMENT OF CASH FLOWS
                                                     Six months ended     Six months ended      12 months ended
                                                       31 August 2017       31 August 2016     28 February 2017
                                                                R’000                R’000                R’000
                                                           (unaudited)          (unaudited)            (audited)


Cash generated by operations                                    8 190                7 007               12 687

Finance costs                                                  (3 032)              (3 537)              (6 732)

Investment income – interest                                      432                  498                  953

Taxation refunded                                                 130                    -                  281

Taxation paid                                                  (1 170)                (264)              (1 058)

 
                                                                4 550                3 704                6 131


Cash flows from investing activities

Proceeds from sale of investment property                       5 500                    -                6 745

Acquisition of investment property                            (10 959)                   -                 (804)

Acquisition of equipment                                          (18)                   -                    -

Net movement in loans owing by third parties                      219                  851                1 708


                                                               (5 258)                 851                7 649


Cash flows from financing activities

Repayment of borrowings                                        (3 290)              (5 010)              (8 996)

Raising of bond finance                                        10 000                    -                    -
  
 
                                                                6 710               (5 010)              (8 996)


Movements in cash and cash equivalents                          6 002                 (455)               4 784
Cash and cash equivalents at the beginning of the period       (1 094)              (5 878)              (5 878)

Cash and cash equivalents at the end of the period              4 908               (6 333)              (1 094)








CONDENSED STATEMENT OF CHANGES IN EQUITY
               31 August 2017       31 August 2016     28 February 2017
                                                                R’000                R’000                R’000
                                                           (unaudited)          (unaudited)            (audited)
STATED CAPITAL
Ordinary stated capital                                          567                   567                  567


RESERVES
Retained earnings                                            145 954               124 857              124 857
Balance at beginning of period
Comprehensive income attributable to ordinary shareholders     4 618                 6 159               21 097

Balance at the end of the period                             150 572               131 016              145 954


Total reserves attributable to:
Ordinary shareholders                                        150 572               131 016              145 954
Non-controlling interests                                          -                     -                    -


Total reserves                                               150 572               131 016              145 954

Total equity and reserves                                    151 139               131 583              146 521







SUPPLEMENTARY INFORMATION
                                                 31 August 2017     31 August 2016     28 February 2017
                                                                              (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)                 4 618              6 159               21 097
Basic earnings per share (cents)                                                     8,3               11,0                 37,7


Headline earnings
Net profit per condensed statement of comprehensive income (R’000)                 4 618              6 159               21 097
Profit on sale of investment property (R’000)                                     (1 700)                 -                 (355)
Revaluation of investment property (net of taxation) (R’000)                        (331)            (3 357)             (13 417)


Headline earnings (R’000)                                                          2 587              2 802                7 325
Headline earnings per share (cents)                                                  4,6                5,0                 13,1


Dividends per share (cents)                                                            -                  -                    -
Net asset value per share (cents)                                                  270,3              235,3                262,0
Net tangible asset value per share (cents)                                         270,3              235,3                262,0




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 ended     Six months ended      12 months ended
                                                       31 August 2017       31 August 2016     28 February 2017
                                                                R’000                R’000                R’000
                                                           (unaudited)          (unaudited)            (audited)

Revenue
Investment Property Holding                                    12 852               11 765               26 160
Property-related Services                                           -                    -                    -
Property Held for Resale                                            -                    -                    -
Head Office Administration                                        224                    -                    -
Non-current Assets Held For Sale                                    -                    -                    -

 
                                                               13 076               11 765               26 160


Income/(Loss) before taxation
Investment Property Holding                                     9 797               10 718               34 184
Property-related Services                                           -                    -                    -
Property Held for Resale                                            -                    -                    -
Head Office Administration                                     (2 637)              (2 523)              (4 719)
Non-current Assets Held For Sale                                    -                   62                    -

  
                                                                7 160                8 257               29 465


Total assets
Investment Property Holding                                   240 669              225 078              241 677
Property-related Services                                           -                    -                    -
Property Held for Resale                                        1 430                1 430                1 430
Head Office Administration                                     17 605                8 215                9 031
Non-current Assets Held For Sale                                6 000                6 745                    -


                                                              265 704              241 468              252 138


Total liabilities
Investment Property Holding                                   112 894              103 174              104 137
Property-related Services                                           -                    -                    -
Property Held for Resale                                            -                    -                    -
Head Office Administration                                      1 671                6 711                1 480
Non-current Assets Held For Sale                                    —                    -                    -

                                                              114 565              109 885              105 617





GENERAL REVIEW AND FINANCIAL RESULTS
In accordance with the directors’ intention to maximise asset value, the group decided to embark on a focused restructuring within the portfolio. 
During the interim period being reported on, the group successfully converted and exchanged non-contributing assets into a single value-generating asset.


To assist with facilitation of the restructuring, an additional flexi-facility of R 10 million was raised with ABSA Bank Ltd during the period.


Revenue for the period ended 31 August 2017 reflects an increase of 11.1% on the comparable results for 2016. The positive revenue-generating effects of 
the restructuring exercise, together with escalations effected on certain large tenants within the portfolio, have combined to result in this increase. 


After exclusion of accounting profits yielded on disposals, operating profits before interest and revaluations for the period ended 31 August 2017 reflect
an increase of 15.8% on the comparable period for 2016. Maximisation of revenue-generating activities and continued focus on cost limitation have produced 
these results.


The group continued to decrease its existing bank overdraft with First National Bank, and through effective treasury management the group now 
finds itself in a positive cash position. Elimination of interest incurred on the overdraft balance has reduced the group’s overall finance cost when 
compared with the comparable period for 2016.


Activities within the period ended 31 August 2017 have produced an improvement in Net Asset Value per share of 8.3 cents since the financial year ending 
28 February 2017. The group has experienced a marginal decrease in Headline Earnings per Share of 0.4 cents in comparison with the previous period ended 
31 August 2016.

RELATED PARTY INFORMATION                                                                            R

Rental charged – RMS Property and Facilities Management Pty Ltd                                180 000

Rental charged – RMS Corporate Solutions Pty Ltd                                                75 000

Asset management fees paid – RMS Corporate Solutions Pty Ltd                                (1 735 386)

Director emoluments                                                                           (335 226)

Professional and consulting fees paid to companies associated with directors                (1 109 700)




DIVIDENDS

The directors have resolved to retain cash in the group to ensure future growth, thus no dividend has been recommended.

JOHANNESBURG
30 November 2017


DIRECTORS: W P Alcock† (Chairman), R P Fertig (Chief Executive Officer), 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, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196

REGISTERED OFFICE: 2969 William Nicol Drive, Wedgewood Link, Bryanston, 2021

SPONSOR: Arbor Capital Sponsors (Pty) Limited

REGISTERED AUDITORS: RSM South Africa Incorporated
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