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PPR
PPR
PPR - Putprop - Interim Results For The Year Ended 31 December 2006
PutProp Limited
(Incorporated in the Republic of South Africa)
(Registration number 1988/001085/06)
Share code: PPR
ISIN: ZAE000072310
("the Company" or "Putprop")
INTERIM RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006
INCOME STATEMENTSfor six months ended 31 December 2006
Six months ended % Year ended
31 December Change 31 June
Rm
2006 2005 2006
(unaudited
(unaudited) & restated) (audited)
Rent received 14.8 13.3 11.3 28.1
Rent straightlining (11.2) (2.6) 330.8 (5.3)
adjustments
Interest received 1.0 1.1 (9.1) 1.9
Revenue 4.6 11.8 (61.0) 24.7
Operating income 12.5 0.0 6.9
Operating expenses 2.2 2.1 4.8 3.4
Operating profit 14.9 9.7 53.6 28.2
Finance costs 0 0 0
Profit before taxation 14.9 9.7 53.6 28.2
Taxation 5.0 2.7 85.2 7.7
Profit attributable to 9.9 7.0 41.4 20.5
equity holders
Shares in issue 28.8 28.8 28.8
(weighted average
number (millions)
Earnings per share 34.4 24.2 42.1 71.2
(cents)
Dividends per share 20.0 25.0 (20.0) 45.0
(cents)
Reconciliation of
headline earnings
Net profit for the 9.9 7.0 20.5
period
Adjusted for:
Fair value adjustments 0 0 (7.5)
on investment
properties
Deferred CGT on fair 1.0
value adjustments
Headline earnings 9.9 7.0 14.0
Basis of preparation and Accounting policies
These unaudited financial results for the six months ended 31 December 2006
have been prepared in accordance with accounting policies that comply with
International Financial Reporting Standards ("IFRS").
The account policies are consistent with those applied for the year ended
30 June 2006.
Rent straightlining adjustments
Comparative figures for the six months ended 31 December 2005 have been
restated due to the Group refining its calculations relating to the
straightlining of rentals receivable over the period of the respective
lease agreements.
The following adjustments were made: Gross Taxation Net
Effect on accumulated profits on 1 (1.7) 0.5 (1.2)
July 2004
Effect on profit to equity holders 3.0 (0.1) 0.2
for year to 30 June 2005
(1.4) 0.4 (1.0)
BALANCE SHEETSas at 31 December 2006
31 Dec 31 Dec 30 Jun
2006 2005 2006
Rm
(unaudited
(unaudited) & restated) (audited)
ASSETS
Non-current assets 106.3 88.1 105.9
Investment properties 93.1 85.7 92.7
Investment in property shares 13.2 2.4 13.2
Current assets 49.6 56.2 46.6
Property held for development 0 13.6 13.6
Accounts receivable 27.3 18.2 11.4
Taxation receivable 0 2.3 1.6
Cash and cash equivalents 22.3 22.1 20.0
Total assets 155.9 144.3 152.5
EQUITY AND LIABILITIES
Capital and reserve 149.1 137.1 144.9
Non-current liabilities 1.6 4.6 4.8
Current liabilities 5.2 2.6 2.8
Total equity and liabilities 155.9 144.3 152.5
CAPTIAL EXPENDITURE COMMITMENTS
- incurred 7.5 0 0
- authorised but not contracted 0 0 0
for
7.5 0 0
RATIOS
Net asset value per share (cents) 518 476 503
STATEMENT OF CHANGES IN EQUITYfor the six months ended 31 December 2006
Stated Accumulated
capital profit Total
Rm Rm Rm
Half year ended 31 December 2005
At 30 June 2005 as previously stated 4.1 134.2 138.3
Rent escalation adjustments (1.0) (1.0)
As 30 June 2005 restated 4.1 133.2 137.3
Profit attributable to equity 7.0 7.0
holders
Dividend paid (7.2) (7.2)
At 31 December 2005 4.1 133.0 137.1
Half year ended 31 December 2006
At 30 June 2006 4.1 140.8 144.9
Profit attributable to equity 9.9 9.9
holders
Dividend paid (5.8) (5.8)
At 31 December 2006 4.1 144.9 149
CASH FLOW STATEMENTSfor the year ended 30 June 2006
31 December 30 June
2006
2006 2005
(unaudited
Rm (unaudited) & restated) (audited)
Cash inflow/(outflow) from 2.7 (0.5) 8.5
operating activities
Cash receipts from 14.0 10.9 29.8
customers
Cash paid to suppliers (3.4) (1.0) (2.0)
Net cash generated from 10.6 9.9 27.8
operations
Net finance income 1 1 1.9
Taxation paid (3.1) (4.2) (8.2)
Dividends paid (5.8) (7.2) (13.0)
Cash outflow from investing (0.4) (6.0) (17.0)
activities
Additions to investment (0.4) (3.6) (3.8)
properties
Investment in property 0 (2.4) (13.2)
shares
Net increase/(decrease) in 2.3 (6.5) (8.5)
cash and cash equivalents
Cash and cash equivalents 20 28.5 28.5
at beginning of the period
Cash and cash equivalents 22.3 22 20
at end of period
Commentary
Overview
Gross rentals received increased by 11%, from R13.3 million to R14.8
million, as compared to the same period last year. Interest received was
at the same level as the previous year. Operating expenditure increased by
4.8%, from R2.1 to R2.2 million, if the once-off profit of R12.5 million on
the sale of the Lonehill Ext. 85 is excluded, for comparison purposes.
Profit before taxation (operating profit) increased by 53%, from R9.7
million to R14.9 million. Profit after tax increased from R7.0 million to
R9.9 million. Earnings per share (EPS) increased by 42.1%, from 24.2 cents
to 34.4 cents per share.
New lease agreement
As previously announced at the beginning of December 2006, on SENS and in
the media, Putprop Limited recently negotiated a new lease agreement with
Putco Limited, its major tenant. The new agreement commenced on 1 January
2007 and is for a period of six years. One of the effects of the eleven-
months early termination of the previous lease agreement, resulted in the
`rent escalation staightline adjustment` (shown in the income statement)
increasing by an additional R7.6 million, from R2.4 million to R11.3
million, as compared to the previous year.
Valuation of properties
The directors have again performed an assessment of all the properties. It
is their considered opinion that the previous valuations done at year-end,
June 2006, are still valid as the conditions and assumptions used in the
external valuations have not changed materially. There are therefore no
adjustments under `revaluations of properties` in the income statement for
the period under review.
Loans
The Company has no loans.
Capital commitments
The Company has a capital commitment of R7.5 million for the purchase of
the Eastgate Ext. 3 property.
Lonehill property
We concluded the sale of our property, Portion 6 of the farm Lonehill, with
Summercon Holdings at the end of 2006 and realized a profit of R12.6
million. Payment was received on 3 January 2007.
Future prospects
We are in the process of finalising the purchase of a warehousing/office
property in Eastgate Ext. 3, Sandton, and measuring 5 607 square metres.
The existing well-known tenant has in principle agreed to sign a new five-
year lease at the expiry of the existing lease at the end of 2007. The
purchase price is R7.5 million and we estimate an 11% yield.
Putprop is negotiating the purchase of factory/office premises measuring 14
328 square metres. The purchase price is approximately R16 million.
Putprop Limited has concluded a new lease agreement with Putco Limited.
Given the certainty and longer term sustainability accorded by the new
lease, Putprop`s Board of directors agreed to renegotiate the agreement
eleven-months ahead of time. After detailed investigation and analysis of
the relevant rental market, Putprop agreed to reduce the planned escalated
rentals as from 1 January 2007, by an average of approximately 31%. The
directors published at the beginning of March 2007, on SENS and in the
media an `Update on the Pro Forma financial effects of the new lease
conditions agreed with Putco`.
Putprop`s directors are of the opinion that the new contractual rentals
will nevertheless produce a satisfactory and market-related return to
Putprop, although not at historic levels.
Putprop Limited has moved its offices to 91 Protea Road, Chislehurston,
Sandton as from 1 March 2007.
Our stated strategy is to invest in suitable
office/retail/warehousing/factory premises to improve our income streams.
Dividend declaration
The directors have decided to declare a dividend of 15 cents (31 December
2005 - 20 cents) per share, in respect of the six-month period ended 31
December 2006.
Declaration Date Friday, 30 March 2007
Last Day to Trade Thursday, 19 April 2007
Ex Date Friday, 20 April 2007
Record Date Thursday, 26 April 2007
Pay Date Monday, 30 April 2007
Shareholders may not dematerialise or rematerialise their shares between
Friday, 20 April 2007 and Thursday, 26 April 2007, both dates inclusive.
A B Adrian (Chairman)
A Carleo (Chief Executive Officer)
E M R L Oldham (Managing Director)
Company Secretary
D Campbell CA (Scotland)
29 March 2007
Registered Office
91 Protea Road, Chislehurston, Sandton Johannesburg
P O Box 39002, Bramley, Johannesburg 2018
Share Transfer Secretaries
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street
Marshalltown
P O Box 61051, Johannesburg 2107
Auditors
Ernst & Young
Wanderers Office Park
52 Corlett Drive, Illovo
P O Box 2322, Johannesburg 2000
Date: 29/03/2007 17:15:03 Produced by the JSE SENS Department.
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