Wrap Text
Summarised provisional audited consolidated results for the Group for the year ended 30 June 2017
ORION REAL ESTATE LIMITED
Approved as a REIT by the JSE
(Incorporated in the Republic of South Africa)
(Registration number: 1997/021085/06)
Share Code: ORE ISIN: ZAE000201695
("Orion Real Estate" or “the Company” or “the Group”)
SUMMARISED PROVISIONAL AUDITED CONSOLIDATED RESULTS FOR THE GROUP
FOR THE YEAR ENDED 30 JUNE 2017
Consolidated Statement of Financial Position as at 30 June 2017
Group
Figures in Rand 2017 2016
Audited Audited
ASSETS
Investment property 733 984 000 802 883 351
Fair value of property portfolio 728 882 366 797 701 052
Straight-line lease income adjustment 5 101 634 5 182 299
Property, plant and equipment 5 466 434 5 394 586
Deferred tax asset 651 151 -
Total Non-current assets 740 101 585 808 277 937
Loans to related parties 1 147 195 12 271 910
Loans to shareholders 35 204 377 10 147 464
Stock on hand 101 949 102 035
Trade and other receivables 29 432 459 60 271 664
Cash and cash equivalents 2 729 166 10 684 674
Total Current Assets 68 615 146 93 477 747
Investment property held for sale 8 400 000 4 500 000
Total Assets 817 116 731 906 255 684
EQUITY AND LIABILITIES
Capital and reserves
Share capital and share premium 114 336 674 114 336,674
Retained earnings 479 224 908 506 466 861
Total equity attributable to owners of the parent 593 561 582 620 803 535
Non-controlling interest (291 068) (287 431)
Total equity 593 270 514 620 516 104
Borrowings 133 337 025 151 148 521
Deferred tax liabilities - 1 006 350
Total Non-current liabilities 133 337 025 152 154 871
Current income tax liabilities 12 486 566 8 269 251
Loans from directors 18 508 403 529
Loans from related parties 20 096 21 264
Tenant deposits 6 984 889 6 994 110
Trade and other payables 54 440 417 100 101 583
Borrowings 14 559 450 14 764 174
Bank overdraft 1 999 266 3 030 798
Current Liabilities 90 509 192 133 584 709
Total Liabilities 223 846 217 285 739 580
Total Equity and Liabilities 817 116 731 906 255 684
Consolidated Statement of Comprehensive Income
Group
Figures in Rand 2017 2016
Audited Re-presented
Revenue 90 311 864 81 995 484
Property revenue 90 379 208 86 234 799
Straight-line lease income accrual (67 344) (4 239 315)
Other income 6 952 559 2 472 052
Other direct property operating costs (43 380 174) (54 876 728)
Administrative and management expenses (26 951 020) (26 414 768)
Repairs and maintenance (8 135 014) (5 144 079)
Fair value adjustment 19 626 092 22 944 906
Gross change in fair value of investment property 19 558 748 18 705 591
Straight-line lease adjustment 67 344 4 239 315
Loss of control of subsidiary (30 424 170) -
Operating profit before interest 8 000 137 20 976 867
Finance income 7 082 805 5 973 367
Finance costs (19 014 512) (25 192 635)
(Loss)/profit before taxation (3 931 570) 1 757 599
Taxation (3 146 407) 316 450
(Loss)/profit for the year (7 077 977) 2 074 049
Other comprehensive income - -
Total comprehensive (loss)/income for the year (7 077 977) 2 074 049
Total comprehensive (loss)/income for the year attributable to:
Shareholders (7 074 340 2 074 547
Non-controlling interest (3 637) (498)
(7 077 977) 2 074 049
Per share information:
Basic and diluted (loss)/earnings per share (1.13) 0.33
Consolidated Statement of Cash Flows
Group
Figures in Rand 2017 2016
Audited Audited
Cash inflow from operating activities 12 208 624 17 356 379
Cash generated by operations 45 369 628 38 334 464
Interest received 7 082 805 5 973 367
Interest paid (19 014 512) (25 192 635)
Taxation paid (1 061 684) (1 758 817)
Dividends paid (20 167 613) -
Cash outflow from investing activities (730 191) (22 941 573)
Loans repaid by related parties 11 124 715 7 651 596
Loans advanced by shareholders (25 056 913) (10 147 464)
Additions to investment property - (22 870 911)
Proceeds on sale of investment property 14 000 000 3 500 000
Purchases of property, plant and equipment (797 993) (1 074 794)
Cash inflow (outflow)/from to financing activities (18 402 409) 13 186 271
Loans (repaid) / advanced by related parties (1 168) 252
Loans (repaid) / advanced by to directors (385 021) 385 281
(Repayment of) / Increase in interest bearing borrowings (18 016 220) 12 800 738
(Decrease)/increase in net cash, cash equivalents and bank
overdrafts (6 923 976) 7 601 077
Cash, cash equivalents and bank overdrafts
at the beginning of the year 7 653 876 52 799
Cash, cash equivalents and bank overdrafts
at the end of the year (729 900) 7 653 876
Consolidated Statements of Changes in Equity
Share Retained Controlling Total
Figures in Rand Capital Earnings Total Interest Equity
Balance at 30 June 2015 114 336 67 504 392 314 618 728 988 (286 933) 618 442 055
Total comprehensive income for
the year - 2 074 547 2 074 547 (498) 2 074 049
Balance at 30 June 2016 114 336 674 506 466 861 620 803 535 (287 431) 620 516 104
Total comprehensive income for
the year - (7 084 340) (7 074 340) (7 637) (7 077 977)
Dividends paid - (20 167 613) (20 167 613) - (20 167 613)
Balance at 30 June 2017 114 336 674 479 224 908 593 561 582 (291 068) 593 270 514
Headline earnings reconciliation and distribution information
Group
Figures in Rand 2017 2016
(Loss) profit attributable to ordinary equity holders (7 074 340) 2 074 547
Adjusted for:
Change in fair value of investment properties net of non- (19 558 748) (18 705 591)
controlling interests
Loss of control of subsidiary 30 424 170 -
Profit/(loss) on sale of investment property (500 000) (791 238)
Headline earnings/(loss) 3 291 082 (17 422 282)
Taxable dividend declared on 13 October 2016 in relation to the 14 734 731 -
year ended 30 June 2015
Taxable dividend declared on 16 November 2016 in relation to
5 643 088 -
the year ended 30 June 2016
Net asset value 593 561 582 620 803 535
Per share information
Basic (loss) / earnings per share (cents) (1.13) 0.33
Headline and diluted headline earnings /(loss) per share (cents) 0.52 (2.78)
Distribution per share:
Year ended 30 June 2015 (paid on 7 November 2016) 2.35 -
Year ended 30 June 2016 (paid on 19 December 2016) 0.90 -
Year ended 30 June 2017 - -
Net asset value per share (cents) 94.67 99.01
Notes:
Weighted average number of shares in issue 630 698 688 630 698 688
Number of shares in issue at period end (including treasury 630 698 688 630 698 688
shares)
Number of shares in issue at period end (excluding treasury 627 009 822 627 009 822
shares)
Segment Report
2017 2016
R % R %
Revenue (excluding recoveries)
Commercial 26 981 791 41 27 572 704 43
Industrial 8 495 645 13 8 642 694 14
Retail 27 699 850 41 24 323 583 38
Hospitality 2 521 948 4 2 651 430 4
Residential 299 288 1 657 225 1
65 998 522 100 63 847 636 100
Profit before taxation
Commercial 15 733 124 41 722 676 41
Industrial 8 107 833 22 209 679 12
Retail 6 019 035 16 524 608 30
Hospitality 7 848 036 21 280 229 16
Residential - 0 20 407 1
37 708 028 100 1 757 599 100
Property values (including properties held for
sale, before adjustment for straight-lining of
leases)
Commercial 348 369 404 44 411 854 098 51
Industrial 82 044 512 11 82 229 907 10
Retail 205 680 677 26 162 247 997 20
Hospitality 96 289 407 12 90 876 169 11
Residential - 0 10 275 180 1
Land 10 000 000 2 53 400 000 7
742 384 000 95 810 883 351 100
Borrowings (excluding instalment sales and
loans)
Commercial 71 501 949 48 122 760 804 81
Industrial 21 915 772 15 21 499 139 14
Retail 34 128 593 24 3 660 387 2
Hospitality 19 176 388 13 2 878 314 2
Residential 146 722 702 100 150 798 644 100
71 501 949 48 122 760 804 81
Rating of tenants (rental income)
Commercial A 7 408 340 11 6 287 511 12
B 858 496 1 460 289 1
C 18 714 956 28 14 784 890 28
Industrial A 265 669 0 - -
B 3 866 145 6 4 075 103 8
C 4 363 831 7 3 882 776 7
Retail A 11 507 203 17 7 124 772 14
B 1 999 296 3 985 550 2
C 14 193 351 22 11 788 702 23
Hospitality B 2 521 948 4 2 321 709 4
Residential C 299 288 0 655 836 1
65 998 521 100 52 367 137 100
A: Represents major listed companies
B: Represents smaller listed companies and big unlisted companies
C: Represents smaller unlisted companies and private businesses
COMMENTARY
1. Operating performance
Other than the once off loss arising from a required write off due to the loss of control of a subsidiary
(being Elma Park and the associated land holding), the results of the group have shown a solid
turnaround. The Group revenue increased from R82 million as at June 2016 to R90.3 million at June
2017. This represents an increase of 10.1% and arose as a result of the normal lease escalations as well
as a marginally better occupancy rate within the properties.
Other direct, operating and management costs were a focus area and were well controlled, reducing
from R86.4 million in 2016 to R78.5 million in 2017. This represents a reduction of 9.2%.
The operating profit decreased by 61.9% from R20.9 million to R8.0 million but this included a once off
cost of R30.4m, which if excluded would have reflected an improvement in operating profit to R22.4m.
The total comprehensive loss for the period moved from R2.0 million profit to a loss of R7.0 million, similarly
due to the loss of control in subsidiary of R30.4 million.
Headline earnings improved to a positive 0.52 cents per share, from a loss per share of 2.78 in 2016. The
net asset value has reduced from 99.01 cents per share to 94.67 cents per share in 2017. This was also
due to the loss of control in a subsidiary.
2. Basis of preparation
The summarised provisional audited consolidated results have been prepared in accordance with the
Listings Requirements of the JSE Limited (“Listings Requirements”) and the requirements of the
Companies Act. The Listings Requirements require provisional reports to be prepared in accordance
with the framework concepts and the measurement and recognition requirements of the International
Financial Reporting Standards (“IFRS”) and 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. The accounting policies applied in the preparation of the financial statements,
from which the summary financial statements were derived, are in terms of IFRS and are consistent with
those applied in the annual financial statements for the year ended 30 June 2016.
These summarised results have been extracted from audited information, but is not itself audited. The
annual financial statements for the period ended 30 June 2017 have been audited by BDO South Africa
who expressed an unmodified opinion thereon. The audited financial statements and the auditors’
report thereon are available for inspection at the Company’s registered office. The summarised
financial statements were prepared by the Chief Financial Officer, Deran Dabideen BCom (Hons)
Accounting. The directors take full responsibility for the preparation of the summarised provisional report
and that the financial information has been correctly extracted from the underlying audited annual
financial statements.
Any reference to future financial performance included in these results has not been reviewed by or
reported on by the Company's auditors.
3. Investment property disposed
During the year under review the Company has disposed of the property situated at 67 7th Street,
Linden, Johannesburg and also of Score - Macassar, Cnr Phala and Tutu Street, Khayalitsha, Western
Cape. A capital gain of R500 000 was made on these transactions.
4. Re-presentation of the Statement of Comprehensive Income
The Statement of Comprehensive Income for the year ended 30 June 2016 contains a reclassification
as follows:
Figures in Rand Prior Year 2016 Prior Year 2016 Difference
(as restated) (as reported)
Other direct property operating costs 54 876 728 82 984 066 (28 107 338)
Administrative and management expenses 26 414 768 454 923 25 959 845
Repairs and maintenance 5 144 079 2 996 586 2 147 493
86 435 575 86 435 575 -
This had no impact on earnings or headline earnings per share information.
5. Related party transactions
Related party transactions similar to those disclosed in the Group's annual financial statements for the
year ended 30 June 2016 took place during the financial year and separate disclosure thereof is not
considered material to the interpretation of these results.
6. Subsequent events
There are no subsequent events.
7. Distributions
The board has considered the requirements for a distribution and advise that no distribution will be
declared for the year ended 30 June 2017 (30 June 2016: 0.9 cents).
8. Future prospects
While trading conditions remained tight during the reporting period, the future prospects have
improved from the prior period, with an increase in revenue over the prior period due to increase
in occupancy and improved controls being implemented. This is set to continue in the new
financial year.
A number of initiatives are underway, which are intended to both increase the properties held by
the group, the results of operations as well as increasing shareholder spread.
By order of the board
Johannesburg
7 December 2017
Directors:
RS Wilkinson* DK Mthembu* AC Gmeiner** F Gmeiner (CEO)# D Dabideen*** TFJ Oosthuizen**
Independent non-executive ** Non-executive # Executive ***Executive, D Dabideen.
Company secretary and registered office Transfer office
Corporate Governance Facilitators CC Computershare Investor Services Proprietary Limited
Registered office Sponsor
Registered office and business address Arbor Capital Sponsors Proprietary Limited
16th Floor, Orion House
49 Jorissen Street
Braamfontein
Johannesburg, 2017
Date: 07/12/2017 02:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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