Wrap Text
Reviewed preliminary condensed consolidated results for the year ended 31 August 2018
INGENUITY PROPERTY INVESTMENTS LIMITED
("the Company" or "the group" or "Ingenuity")
(Incorporated in the Republic of South Africa)
Registration number 2000/018084/06
JSE share code: ING
ISIN: ZAE000127411
REVIEWED PRELIMINARY CONDENSED CONSOLIDATED RESULTS
FOR THE YEAR ENDED 31 AUGUST 2018
KEY FINANCIAL INDICATORS
FOR THE YEAR ENDED 31 AUGUST 2018
2018 2017
R'000 R'000
Total contractual rental income (R'000) 452 000 436 411
Investment property portfolio fair value (R'000) 3 261 645 4 132 062
Investment properties under development and inventory (R'000) 457 458 208 398
Development properties - land (R'000) 137 282 136 314
(Decrease)/Growth of asset base (%) (14) 6
Borrowings (R'000) 1 944 900 3 065 144
Loan-to-value ratio* (%) 50 60
Vacancy (%) 7.9 2.1
Market capitalisation at year-end (R'000) 1 255 995 1 318 796
Number of shares in issue (net of treasury shares) 1 148 933 920 1 176 835 524
Earnings per share (cents) 12.7 8.0
Headline earnings per share (cents) 3.6 0.6
Net asset value per share (cents) 139 124
Growth in net asset value per share (%) 12 4
*Loan-to-value ratio is defined as interest-bearing debt divided by total assets (asset value of all properties and investments).
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 AUGUST 2018
Reviewed Audited
2018 2017
R'000 R'000
ASSETS
Non-current assets 3 769 551 4 431 768
Investment properties 3 155 140 4 004 878
Straight-line lease accrual 96 353 115 841
Investment properties under development 327 325 129 683
Development properties - land 137 282 136 314
Other financial assets 10 262 -
Property and equipment 14 043 14 552
Investment in joint venture 29 146 30 500
Current assets 199 663 492 360
Trade and other receivables 21 565 22 061
Straight-line lease accrual 10 152 11 343
Loan receivable - 285 809
Inventory 130 133 78 715
Cash and cash equivalents 37 813 94 432
Total assets 3 969 214 4 924 128
EQUITY AND LIABILITIES
Shareholders' interest 1 602 906 1 455 197
Stated capital 747 610 747 610
Treasury shares (69 541) (42 161)
Non-distributable reserve 576 284 556 169
Retained earnings 348 553 178 761
Total equity attributable to equity holders of the parent 1 602 906 1 440 379
Non-controlling interest - 14 818
Non-current liabilities 1 231 602 3 093 153
Borrowings 942 946 2 778 673
Finance lease - 4 821
Deferred tax 273 100 245 909
Other financial liabilities 15 556 63 750
Current liabilities 1 134 706 375 778
Trade and other payables 73 735 54 951
Current portion of borrowings 1 001 954 286 471
Prepaid rent received 20 750 18 370
Taxation 23 128 69
Share-based payment 15 139 15 917
Total equity and liabilities 3 969 214 4 924 128
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 AUGUST 2018
Reviewed Audited
2018 2017
R'000 R'000
Revenue 468 379 435 548
- Contractual 452 000 436 411
- Straight-lining 16 379 (863)
Net operating expenses (176 052) (154 061)
Profit on disposal of subsidiary 15 796 -
Operating profit before fair value adjustments 308 123 281 487
Fair value gains on investment and development properties 192 984 181 676
Fair value losses on investment and development properties (61 324) (72 842)
Fair value gains/(losses) on share-based incentive 777 (8 112)
Fair value gains on interest rate swap agreements 33 863 -
Reclassification of interest rate hedge from other comprehensive income (33 266) -
Total fair value adjustments 133 034 100 722
Operating profit 441 157 382 209
Interest received 17 296 8 238
Interest paid (257 510) (260 024)
Equity-accounted investment loss (6 754) (1 450)
Profit before taxation 194 189 128 973
Taxation (44 796) (32 719)
Profit for the year 149 393 96 254
Attributable to:
Equity holders of the parent 148 247 93 576
Non-controlling interest 1 146 2 678
149 393 96 254
Basic and diluted earnings per share (cents) 12.7 8.0
STATEMENT OF COMPREHENSIVE INCOME
Profit for the year 149 393 96 254
Other comprehensive income:
To be reclassified subsequently to profit or loss:
Fair value gains/(losses) on interest swap agreements 24 593 (51 782)
Income tax relating to fair value gains/(losses) on interest rate swap agreements (6 886) 14 499
Reclassification of interest rate hedge to profit or loss 33 266 -
Income tax relating to reclassification of interest rate hedge to profit or loss (9 314) -
Other comprehensive income for the year, net of tax 41 659 (37 283)
Total comprehensive income for the year 191 052 58 971
Total comprehensive income attributable to:
Equity holders of the parent 189 906 56 293
Non-controlling interest 1 146 2 678
191 052 58 971
NOTES TO THE CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
1. Headline and diluted headline earnings per share (cents) 3.6 0.6
2. The calculation of earnings per share is based on earnings attributable to
equity holders of the parent of R148.247 million (2017: R93.576 million) and
a weighted average number of 1 171 864 081 (2017: 1 169 904 017) shares
(net of treasury shares) in issue during the year.
Headline earnings are calculated as follows:
Earnings attributable to equity holders 148 247 93 576
Adjustments to earnings:
Fair value adjustments to investment and development properties
(net of selling costs) (121 225) (108 834)
Profit on disposal of subsidiary (15 796) -
Total tax effects of adjustments 30 907 21 902
Headline earnings 42 133 6 644
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2018
Reviewed Audited
2018 2017
R'000 R'000
Cash flows from operating activities
Cash generated from operations 311 614 295 490
Interest received 17 296 8 238
Interest paid (252 377) (257 652)
Taxation paid (132) (508)
Dividends paid - (5 082)
Net cash inflow from operating activities 76 401 40 486
Cash flows from investing activities
Additions to property, plant and equipment (71) (413)
Interest capitalised to investment properties (20 728) (13 165)
Proceeds from property, plant and equipment - 100
Additions to investment property (42 528) -
Additions to investment property under development (116 115) -
Additions to development property land (967) -
Proceeds from disposal of investment properties 251 764 -
Proceeds from disposal of subsidiary 35 700 -
Additions to equity accounted interest (5 400) (31 950)
Net cash inflow/(outflow) from investing activities 101 655 (45 428)
Cash flows from financing activities
Proceeds from disposal of treasury shares - 9 965
Purchase of treasury shares (27 380) -
Financial liabilities raised 133 937 112 162
Financial liabilities repaid (341 000) (80 204)
Repayments of finance lease (232) (305)
Net cash (outflow)/inflow from financing activities (234 675) 41 618
Net (decrease)/increase in cash and cash equivalents (56 619) 36 676
Cash and cash equivalents at the beginning of the year 94 432 57 756
Cash and cash equivalents at the end of the year 37 813 94 432
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2018
Non- Non-
Stated Treasury distributable Retained controlling Total
capital shares reserve earnings interest equity
AUDITED R'000 R'000 R'000 R'000 R'000 R'000
Balance at 1 September 2016 747 610 (52 296) 522 414 156 224 17 222 1 391 174
Total comprehensive income for the year - - (37 283) 93 576 2 678 58 971
Profit for the year - - - 93 576 2 678 96 254
Other comprehensive income
- Cash flow hedges - - (37 283) - - (37 283)
Transfer to/from non-distributable reserve
Fair value gain realised on properties sold - - (15 894) 15 894 - -
Fair value adjustments to properties - - 86 932 (86 932) - -
Disposal of treasury shares - 10 135 - - - 10 135
Dividend paid - - - - (5 082) (5 082)
Balance at 31 August 2017 747 610 (42 161) 556 169 178 762 14 818 1 455 198
Non- Non-
Stated Treasury distributable Retained controlling Total
capital shares reserve earnings interest equity
REVIEWED R'000 R'000 R'000 R'000 R'000 R'000
Balance at 1 September 2017 747 610 (42 161) 556 169 178 762 14 818 1 455 198
Total comprehensive income for the year - - 41 659 148 247 1 146 191 052
Profit for the year - - - 148 247 1 146 149 393
Other comprehensive income
- Cash flow hedges - - 41 659 - - 41 659
Transfer to/from non-distributable reserve
Fair value gain realised on properties sold - - (123 498) 123 498 - -
Fair value adjustments to properties - - 101 954 (101 954) - -
Purchase of 27 901 604 treasury shares
at an average cost of 98 cents per share - (27 380) - - - (27 380)
Dividend paid - - - - (660) (660)
Non-controlling interests on disposal of
subsidiary - - - - (15 304) (15 304)
Balance at 31 August 2018 747 610 (69 541) 576 284 348 553 - 1 602 906
Comprising:
Fair value reserve - - 580 526 - - -
Cash flow hedge - - (4 242) - - -
CONDENSED CONSOLIDATED SEGMENTAL INFORMATION
AS AT 31 AUGUST
Development Light Straight-
Offices Retail Properties Parking industrial Other lining Total
2017 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Additions to non-current
assets, including transfers
between segments 1 072 44 225 47 589 14 603 1 656 51 715 - 160 860
Disposals of
non-current assets (118 608) (44 846) - (18 880) - (665) - (183 000)
Total assets 2 618 118 846 894 296 497 531 660 85 323 545 636 - 4 924 128
Borrowings - - 62 196 - - 3 002 948 - 3 065 144
Revenue 285 325 86 304 559 53 033 3 652 7 538 (863) 435 548
Operating profit/
(loss) before fair value
adjustment 190 978 60 706 (1 090) 38 399 2 780 (9 423) (863) 281 487
Fair value adjustment 52 970 27 610 17 265 9 504 395 (7 022) - 100 722
Profit/(loss) before
interest and taxation 243 948 88 316 16 175 47 903 3 175 (16 445) (863) 382 209
Interest received - - - - - 8 238 - 8 238
Interest paid - - - - - (260 024) - (260 024)
Equity-accounted
investment loss - - - - - (1 450) - (1 450)
Profit/(loss) before
taxation 243 948 88 316 16 175 47 903 3 175 (269 681) (863) 128 973
To present more meaningful information, the single line item which was previously reported as "Additions to non-current assets
(includes transfers between segments)", has now been split into more detail and discloses "Disposals of non-current assets" as an
additional line item.
Development Light Straight-
Offices Retail Properties Parking industrial Other lining Total
2018 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Additions to non-current
assets, including transfers
between segments 48 015 (54 751) 298 307 (6 876) (933) (143 245) - 140 517
Disposals of
non-current assets (581 813) (299 776) - (112 483) - (131) - (994 203)
Total assets 2 189 211 494 869 594 821 430 931 87 005 172 377 - 3 969 214
Borrowings - - 207 939 - - 1 736 961 - 1 944 900
Revenue 292 196 83 701 2 321 55 218 9 111 9 453 16 379 468 379
Operating profit/
(loss) before fair value
adjustment 194 381 56 415 (688) 39 914 7 354 (5 632) 16 379 308 123
Fair value adjustment 104 892 2 502 17 18 630 2 616 4 377 - 133 034
Profit/(loss) before
interest and taxation 299 273 58 917 (671) 58 544 9 970 (1 255) 16 379 441 157
Interest received - - - - - 17 296 - 17 296
Interest paid - - - - - (257 510) - (257 510)
Equity-accounted
investment loss - - - - - (6 754) - (6 754)
Profit/(loss) before
taxation 299 273 58 917 (671) 58 544 9 970 (248 223) 16 379 194 189
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
PRESENTATION OF PRELIMINARY CONDENSED CONSOLIDATED FINANCIAL
RESULTS
The reviewed condensed consolidated financial results ("the financial statements") for the year ended 31 August 2018 have been prepared
in accordance with the framework concepts, the measurement and recognition requirements of International Financial Reporting
Standards ("IFRS") and the information required by IAS 34: Interim Financial Reporting, the SAICA Financial Reporting Guides as issued
by the Accounting Practices Committee, the JSE Listings Requirements and in the manner required by the Companies Act of South Africa.
The accounting policies and methods of computation applied in the preparation of the financial statements are in accordance with IFRS
and are consistent with those applied in the audited annual financial statements for the year ended 31 August 2017.
The independent auditor, Mazars, have reviewed the preliminary condensed consolidated annual financial statements of Ingenuity Property
Investments Limited for the year ended 31 August 2018 and have expressed an unqualified reviewer's conclusion. Their review was
conducted in accordance with ISRE 2410 "Review of interim financial information performed by the independent auditor of the entity".
The reviewer's report does not necessarily report on all the information contained in this report. Shareholders are therefore advised that
to obtain a full understanding of the nature of the reviewer's engagement they should obtain a copy of the reviewer's report together with
the accompanying financial information from the registered office.
These preliminary financial statements have been prepared by Ms. M Hassan, BCom (Acc) (Hons), CA(SA) under the supervision
of Mr. M Wagenheim, BCom (Hons), CTA, CA(SA) in his capacity as Financial Director. The directors are not aware of any matters
or circumstances arising after 31 August 2018 that require additional disclosure or adjustment to the financial statements, other than
as disclosed in this announcement.
COMMENTARY
JOINT CHAIRMAN'S AND CHIEF EXECUTIVE OFFICER'S REPORT
Ingenuity is pleased to announce its results for the year ended 31 August 2018. Despite a prevailing environment of poor business
confidence and political uncertainty, the Company has maintained a steady course while achieving significant changes and successes
during the year under review. The portfolio continues to be buoyant and is well managed by a strategically focused management team
and board. No new acquisitions were made during the year as the Company placed its efforts in strengthening the balance sheet,
unlocking developments and realising value through opportune deals. The quality of our tenant base remains strong and solid cash flow
generation supports this fact.
Ingenuity's business remains geographically focused in the Western Cape region with the emphasis to grow the Company through quality
property deals and value-add development or refurbishment propositions.
This is our unique offering, differentiating Ingenuity from other counters in the sector.
The major items to highlight for this financial year are discussed below:
The core investment portfolio at year-end was R3.262 billion (2017: R4.132 billion), while investment property under development,
inventory and land holdings increased to R594.7 million (2017: R344.7 million). This represents a total decrease in our asset base
of R620.4 million or 14%. The decrease was attributable to the sales of our Century City Portfolio and our equity interest in Insight
Property Developers (Palmyra Road) (Pty) Ltd (the entity that holds the Palmyra Shopping Centre). The sales afforded us the ability to
realise growth in assets that had matured at attractive prices and played a significant role to reduce debt levels in the Company to 50%
(2017: 60%). Our efforts to unlock certain developments and the completion of major refurbishment programmes also added to the
growth of the underlying assets. These items are further reported on below.
We did not issue any equity during the period. Our share trades at a significant discount to net asset value ("NAV") of around 30%. To
issue shares would be both costly and dilutionary to existing shareholders. During the past financial year, we bought back 27.9 million
shares at an average cost of 98 cents per share. The effect of such dealings enhances existing shareholder value. We will continue to
buy back shares at discounted levels.
The resultant effect of the above items has been an overall growth in our NAV per share by 12% from 124 cents to 139 cents.
INCOME
Despite some fairly large sales the Company still managed to grow net property income from R297.2 million to R309. 2 million with the
sale of the Century City Portfolio being finalised at year-end. The effect of materially reduced borrowing levels should also bode well for
future earnings growth. Costs are well managed, and we expect modest growth in the core investment portfolio for 2019.
Our portfolio remains very well managed with virtually all rentals collected timeously. We have strong cash flows with only R342 000
being written off in bad debts during the past year. Our vacancy ratio at year-end is 7.9% and our WALE (weighted average lease expiry)
based on income is a strong 4.05 years. The vacancy ratio, albeit unusually high, is largely attributable to a few large vacancies at
year-end, i.e. 8 410 m2 at Reeds House, 1 416 m2 at Founders House and 615 m2 at Claremont Central, of which 7 428 m2 has been let
subsequently. Management's focus is to let all vacancies.
Milestones achieved during the year under review are as follows:
PROPERTY TRANSACTIONS CONCLUDED
Acquisitions
- We concluded the deal to acquire the leasehold rights from the City of Cape Town of Erf 211, in terms of an agreement to purchase
signed in June 2011. This is situated adjacent to Erf 205 already owned by us at Lower Long Street, Cape Town. Transfer of this
leasehold to us, which was registered on 27 September 2018, effectively converted our rights to freehold and provides us with the
ability to develop the now consolidated erven in accordance with rights granted to us in terms of a site development plan application
we made as part of the transaction. The combined sites measure 3 156 m2 with an approved bulk of 23 635 m2.
Sales
- Our Century City Portfolio comprising Aurecon East, Aurecon West, Mazars House, Gateway and Virgin Active was sold on
31 August 2018. The portfolio's original cost was R769.1 million and was sold for a gross sales value of R949.2 million. Palmyra
Shopping Centre was sold on 31 May 2018 through the realisation of our equity interest in Insight Property Developers (Palmyra Road)
(Pty) Ltd. Our interest was originally acquired for R20.7 million and was sold for R36.5 million.
- Subsequent to year-end, the property known as State House was sold. Transfer of this property is expected to take place in November
2018. The original cost was R35.5 million and it was sold for R45 million.
We will continue to evaluate our properties and, when mature, realise assets in order to apply proceeds to higher-growth opportunities.
DEVELOPMENT AND REFURBISHMENT INITIATIVES
- Construction of the building to be known as 20 Vineyard Road commenced and is due for completion during March 2019. This
development comprises approximately 2 400 m2 of premium grade offices and retail and is situated directly opposite Cavendish
Square. The anticipated total capital expenditure is R86 million with a targeted 9% initial yield on completion.
- Santam Head Office - the refurbishment was completed during the year. The total capital value of the project was R120 million resulting
in a total value to the precinct, comprising three buildings, of R870 million. The project created substantial value to this investment
and is underpinned by a 12-year lease with Santam that commenced on 1 January 2018.
- 117 on Strand - construction of the building is proceeding well. Costs are well contained, and we are confident that this sizeable project
will deliver solid returns to shareholders. Completion is expected in mid-2019. Targeted initial returns on the commercial and residential
components are 8% and 23% respectively. The total estimated capital expenditure for the components are R350 million and R302
million respectively. Sales of the 117 residential units have gone extremely well with only two apartments still available for sale. The
commercial section's major leases have been concluded. Virgin Active, Pick n Pay and Avior Financial Services have all committed to
long leases ranging from seven to 15 years. This development will produce attractive trading profits as well as generating premium
quality investment stock with long-term income.
- The Modern - all planning approvals have been obtained to allow us to proceed with formal building plan submission to commence
construction. The project, however, will only be triggered once suitable pre-lettings have been secured. The project will require
substantial investment and we are evaluating proposals to best unlock the site.
- City Park - this development opportunity, owned jointly with the Rabie Property Group, was acquired in June 2017 for R300 million.
Since taking transfer, we have been busy with a formal planning application. This application was approved by the City of Cape Town
on 1 November 2018. The proposed scheme will comprise 948 parking bays, approximately 200 luxury apartments, 11 500 m2 of
premium grade offices and 2 700 m2 of prime retail space. Construction, subject to securing a major national office tenant, is expected
to commence during the first quarter of 2019 with an estimated completion date of December 2020. This development is set to become
one of Cape Town's most prominent buildings and is ideally situated in the heart of Bree Street.
DIVIDEND
The group announces that no dividend is to be paid to shareholders for this financial year. While we have generated solid returns for the
year, we feel it prudent, considering our development pipeline requirements, to retain funds in the business. The decision to retain funds
to reinvest in growth opportunities should generate greater benefit to shareholders. From 2019 onwards, the Company intends embarking
upon a growing dividend policy for shareholders.
GENERAL
Ingenuity remains focused on its strategy. We are committed to creating lasting wealth for shareholders focusing on underlying quality
assets.
Our sincere thanks go to the directors and staff of Ingenuity for their dedication and commitment to the success of the Company, and
to the shareholders for their continued support and encouragement.
GENERAL REVIEW
During the year under review the total property asset base, including development assets, decreased in value by R620.4 million or 14%
due to the sales of the Century City Portfolio and Palmyra Junction Shopping Centre.
The vacancy percentage of gross lettable area ("GLA") as at year-end was 7.9%, largely attributable to a few large vacancies of which
some has subsequently been let. Management is focused on letting all vacancies as soon as possible.
The group achieved a weighted average borrowing cost of 9.9% (2017: 9.6%). Total borrowings at year-end amounted to R1.945 billion
(2017: R3.065 billion) of which 100% is fixed with interest rate swap contracts. The decrease in borrowings for the current year is due to
applying the proceeds on the sales of the property assets against borrowings. This has resulted in a reduction in the loan-to-value ratio
to 50% at year-end from 60% as at the comparative year-end.
The current portion of borrowings of R1 001.9 million (2017: R286.5 million) comprises mainly the Medium-Term Loan 1 facility which
expires on 31 May 2019 and which management intends to renew.
Total cash on hand at year-end amounted to R37.8 million (2017: R94.4 million). Excess cash is applied to reduce borrowings or held
in access facilities.
FAIR VALUE ADJUSTMENTS ON INVESTMENT AND DEVELOPMENT PROPERTIES
The directors have considered the current prevailing climate of poor business confidence and political uncertainty in the market place in
their approach to the valuations of the property portfolio.
Valuations of all properties were performed by either the directors or an independent external valuer, and have resulted in a net upward
revaluation adjustment of R131.7 million (2017: R108.8 million) which includes the fair value adjustments to the Century City Portfolio
which was sold on 31 August 2018. Independent external valuations are carried out on a rotational basis to ensure each property
is valued independently at least every three years. Prudent valuation assumptions have been applied to take account of weakening
market conditions. The valuations are based on either the discounted cash flow method or the capitalisation of net income method or a
combination of these methods, which is consistent with the basis used in prior years.
The fair value measurement for investment property has been categorised as a level 3 fair value based on the inputs to the valuation
technique used.
Significant unobservable inputs used were as follows:
- a capitalisation rate, ranging between 7% and 9% (2017: 7% and 9%) has been used; and
- the discount rates applied range between 12.75% and 14% (2017: 12.25% and 14.5%).
PROFIT ON DISPOSAL OF SUBSIDIARY
The Company disposed of its 67% shareholding in Insight Property Developers (Palmyra Road) Pty Ltd ("Insight") on 31 May 2018. Insight
holds the investment in the Palmyra Junction Shopping Centre situated in Claremont, Cape Town.
Insight's property was previously included in the Group Retail and Office segment.
Details of the disposal are as follows:
Carrying amount of net assets over which control was lost R'000
Investment property 96 107
Plant and equipment 49
Trade and other receivables 5 020
Taxation receivable 222
Cash and cash equivalents 815
Other financial liabilities (40 010)
Finance lease liability (5 148)
Non-controlling interest (15 392)
Deferred tax (16 431)
Trade and other payables (4 513)
Net assets 20 719
Consideration received
Cash 36 515
Total consideration 36 515
Net cash inflow from disposal of subsidiary:
Cash consideration received 36 515
Cash and cash equivalents disposed of (815)
35 700
BORROWINGS
The group's borrowings were substantially reduced (by R938 million) on 31 August 2018 when the proceeds on the sale of the Century
City Portfolio were applied against borrowings.
INVENTORY
This amount comprises the proportion of residential units of the 117 on Strand mixed-use development for which agreements of sale have
been signed and is valued at cost. Construction of the development is expected to be completed during the year ending 31 August 2019.
FAIR VALUE OF FINANCIAL INSTRUMENTS RECOGNISED IN THE STATEMENT OF
FINANCIAL POSITION
INTEREST RATE SWAP AGREEMENTS
The fair value of interest rate swap agreements is determined by using a valuation technique that discounts future cash flows using
risk-free rates and yield curves derived from quoted rates. Interest rate swaps are classified as level 2 financial instruments.
During the year the group discontinued hedge accounting for certain of its interest rate swap agreements subsequent to the sale of the
Century City Portfolio and the settlement of related borrowings. As a result, cumulative fair value adjustments on the interest rate swaps
amounting to R33.3 million were reclassified from other comprehensive income to profit or loss.
At year-end, the group's interest rate swap contracts with notional amounts totalled R2 billion (2017: R2 billion), with a fair value liability
amounting to R15.5 million (2017: R63.75 million) and a fair value asset amounting to R10.3 million (2017: Nil). These values are calculated
using anticipated long-term interest rate expectations and which are impacted by political and economic outlooks.
TAXATION
The taxation liability of R23.1 million comprises mainly the capital gains tax payable on the sales of the investment properties.
RELATED PARTY TRANSACTIONS
During the year the group paid executive directors' remuneration of R8.9 million (2017: R9 million) and non-executive directors'
remuneration of R1 million (2017: R842 000).
CAPITAL COMMITMENTS
AUTHORISED AND COMMITTED
Authorised and contracted for commitments amount to R383.5 million (2017: R572.5 million) at year-end. The commitments comprise
costs for the construction and development of the 117 on Strand project (R284.3 million), the construction and development costs of
the 20 Vineyard Road commercial building (R49.4 million) and the acquisition of Erf 211 Roggebaai (R49.8 million), all of which will be
financed from existing cash resources and finance facilities.
STATED CAPITAL
During the year under review:
- no new shares were issued (2017: no new shares were issued); and
- the Company purchased 27.902 million treasury shares at an average cost of 98 cents per share (2017: no treasury shares were
purchased).
EVENTS AFTER THE REPORTING PERIOD
Other than as mentioned above, there are no other material reportable events after the reporting period which have occurred since the
end of the financial year being reported on and the date of this report.
For and on behalf of the Board
Arnold Aaron Maresky Mark Wagenheim
Chief Executive Officer Chief Financial Officer
Cape Town
22 November 2018
INGENUITY PROPERTY INVESTMENTS LIMITED
("the Company" or "the group" or "Ingenuity")
(Incorporated in the Republic of South Africa)
Registration number 2000/018084/06
JSE share code: ING
ISIN: ZAE000127411
DIRECTORS
RC Squire-Howe (Chairman)*#, AJ Branch *# (British), J Bielich, LH Cohen*, DB Fabian*#
SR Leon*#, AA Maresky (CEO), RS Schur*#, M Wagenheim
*Non-executive #Independent
Mrs. J Solms resigned on 1 November 2018.
REGISTERED OFFICE AND POSTAL ADDRESS
Suite 102, 1st Floor, Intaba, 25 Protea Road, Claremont, 7708, Cape Town, South Africa
COMPANY SECRETARY
M Wagenheim
CONTACT DETAILS
Tel: 021 674 5130
Fax: 021 674 5135
E-mail: info@ingenuityproperty.com
www.ingenuityproperty.com
TRANSFER SECRETARIES
Computershare Investor Services Proprietary Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
(PO Box 61051, Marshalltown, 2107)
Tel: 011 370 5000
COMMERCIAL BANK
Absa Bank Limited
3rd Floor, Bridge Park East, Bridge Way, Century City, 7446
SPONSOR
Nedbank Corporate and Investment Banking
3rd Floor, Corporate Place, Nedbank Sandton
135 Rivonia Road, Sandton, 2196
(PO Box 1144, Johannesburg, 2000)
AUDITORS
Mazars, Mazars House, Rialto Road, Grand Moorings Precinct
Century City, 7441, Cape Town
(PO Box 2785, Cape Town, 8000)
Date: 22/11/2018 08:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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