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ABT
ABT
ABT - Ambit Properties - Unaudited Financial Results And Distribution For The
Six-Month Period Ended 31 March 2007
Ambit Properties Limited
Registration number: 2001/007003/06
Share code: ABT & ISIN code: ZAE000051645
Unaudited financial results and distribution for the six-month period ended 31
March 2007
group income statement
Unaudited
Six months ended
31 March
2007
Notes R`000
Revenue 56 854
Rental- cash flows inherent in
leases 54 321
- straight-line adjustment 2 533
Property expenses (13 531)
Net rental income from properties 43 323
Interest income from associate 6 004
Interest income 4 485
Amortisation of debenture premium 1 272
Finance costs (13 592)
Administrative expenses (2 911)
Other expenses (1 356)
Profit before fair value
adjustments 37 225
Change in fair value of investment
properties 60 286
- As per valuations 62 819
- Straight line adjustment (2 533)
Profit on disposal of investment
properties -
Profit before debenture interest
and taxation 97 511
Share of associate company`s
after tax profits 7 204
Debenture interest to linked
unitholders (33 389)
Profit before taxation 71 326
Taxation (18 718)
Net profit 52 608
Earnings per linked unit (cents)
(weighted) 2.2 42,91
Earnings per share (cents)
(weighted) 2.2 27,61
Distribution per linked unit
(cents) 15,30
Unaudited Audited
Six months ended Year ended
31 March 30 September
2006 2006
R`000 R`000
Revenue 49 575 103 620
Rental- cash flows inherent in
leases 47 641 99 813
- straight-line adjustment 1 934 3 807
Property expenses (11 672) (25 239)
Net rental income from properties 37 903 78 381
Interest income from associate 4 792 9 868
Interest income 111 2 040
Amortisation of debenture premium 667 1 776
Finance costs (11 824) (23 902)
Administrative expenses (2 444) (5 266)
Other expenses (2 271) (2 026)
Profit before fair value
adjustments 26 934 60 871
Change in fair value of investment
properties 56 613 93 450
- As per valuations 58 547 97 257
- Straight line adjustment (1 934) (3 807)
Profit on disposal of investment
properties 220 72
Profit before debenture interest
and taxation 83 767 154 393
Share of associate company`s
after tax profits 3 691 12 465
Debenture interest to linked
unitholders (24 334) (55 199)
Profit before taxation 63 124 111 659
Taxation (16 866) (28 125)
Net profit 46 258 83 534
Earnings per linked unit (cents)
(weighted) 40,61 77,20
Earnings per share (cents)
(weighted) 26,61 46,48
Distribution per linked unit
(cents) 14,00 29,60
condensed group balance sheet
Unaudited
31 March
2007
Notes R`000
ASSETS
Non-current assets
Investment properties 972 596
- At valuation 990 350
- Straight-line adjustment (17 754)
Investment in associate 118 131
Rental receivable -straight-line adjustment 15 366
Total non-current assets 1 106 093
Current assets
Trade and other receivables 9 728
- Trade and other receivables 7 340
- Rental receivable - straight-line adjustment 2 388
Cash and cash equivalents 53 851
Total current assets 63 579
TOTAL ASSETS 1 169 672
EQUITY AND LIABILITIES
Capital and reserves
Share capital and reserves 246 040
Non-current liabilities
Debentures 392 812
Debenture premium 90 854
Interest-bearing borrowings 3.5 315 930
Deferred taxation 83 217
Total non-current liabilities 882 813
Current liabilities
Trade and other payables 7 063
Taxation payable 367
Linked unitholders for distribution 33 389
Total current liabilities 40 819
TOTAL EQUITY AND LIABILITIES 1 169 672
Unaudited Audited
31 March 30 September
2006 2006
R`000 R`000
ASSETS
Non-current assets
Investment properties 713 153 809 329
- At valuation 726 500 824 550
- Straight-line adjustment (13 347) (15 221)
Investment in associate 86 635 110 927
Rental receivable -straight-line adjustment 11 562 14 551
Total non-current assets 811 350 934 807
Current assets
Trade and other receivables 5 582 6 446
- Trade and other receivables 3 797 5 776
- Rental receivable - straight-line adjustment 1 785 670
Cash and cash equivalents 89 682 56 128
Total current assets 95 264 62 574
TOTAL ASSETS 906 614 997 381
EQUITY AND LIABILITIES
Capital and reserves
Share capital and reserves 155 712 193 115
Non-current liabilities
Debentures 312 866 335 669
Debenture premium 30 427 49 586
Interest-bearing borrowings 299 038 315 960
Deferred taxation 53 124 64 499
Total non-current liabilities 695 455 765 714
Current liabilities
Trade and other payables 30 625 9 087
Taxation payable 484 367
Linked unitholders for distribution 24 338 29 098
Total current liabilities 55 447 38 552
TOTAL EQUITY AND LIABILITIES 906 614 997 381
condensed group cash flow statement
Unaudited Unaudited Audited
31 March 31 March 30 September
2007 2006 2006
R`000 R`000 R`000
OPERATING ACTIVITIES
Cash generated by operating
activities 32 935 57 598 70 105
Interest received 10 489 4 903 11 908
Finance costs (13 592) (11 824) (23 902)
Distributions paid to linked
unitholders (29 098) (25 029) (51 134)
Cash inflow from operating
activities 734 25 648 6 977
INVESTING ACTIVITIES
Acquisition of investment
properties (100 000) (22 263) (79 850)
Improvements to investment
properties (2 981) - (1 753)
Proceeds on disposal of investment
properties - 25 529 25 382
Acquisition of holding in
associate company - - (15 518)
Cash (outflow)/inflow from
investing activities (102 981) 3 266 (71 739)
FINANCING ACTIVITIES
Linked units issued 100 000 - 43 200
Interest bearing borrowings
(repaid)/raised (30) 31 839 48 761
Cash inflow from financing
activities 99 970 31 839 91 961
(Decrease)/Increase in cash and
cash equivalents (2 277) 60 753 27 199
Cash and cash equivalents at
beginning of year 56 128 28 929 28 929
CASH AND CASH EQUIVALENTS AT END
OF YEAR 53 851 89 682 56 128
condensed group statement of changes in equity
Non-
Share Distributable distributable
capital reserves reserves Total
Unaudited R`000 R`000 R`000 R`000
Balance at 30
September 2005 1 738 330 107 386 109 454
Net profit
attributable to
linked unitholders - 46 258 - 46 258
Transfer to
non-distributable
reserves - (46 258) 46 258 -
Balance at 31 March
2006 1 738 330 153 644 155 712
Shares issued
during the period 127 - - 127
Net profit
attributable to
linked unitholders - 37 276 - 37 276
Transfer to
non-distributable
reserves - (37 242) 37 242 -
Balance at 30
September 2006 1 865 364 190 886 193 115
Shares issued
during the period 317 - - 317
Net profit
attributable to
linked unitholders - 52 608 - 52 608
Transfer to
non-distributable
reserves - (52 577) 52 577 -
Balance at 31 March
2007 2 182 395 243 463 246 040
1. OTHER INFORMATION
Unaudited Unaudited Audited
31 March 31 March 30 September
2007 2006 2006
Linked units in issue 218 228 868 173 814 215 186 482837
Weighted average linked units 190 568 656 173 814 215 179 707418
Net asset value (cents per
linked unit)* 350 301 326
Listed market price (cents per
linked unit) 420 375 325
Premium/(discount) to net
asset value (%) 20,0 24,6 (0,3)
* prior to distribution
To fund the acquisition of four properties, 31 746 031 units were issued during
March 2007 at a price of 315 cents per unit. In addition, 15,5 cents per unit
was received in respect of the interim distribution yet to be paid.
2. NOTES TO THE FINANCIAL STATEMENTS
2.1 Accounting policies
The interim condensed financial statements are prepared in accordance with IAS
34: Interim Financial Reporting. The accounting policies used in the preparation
of these results are consistent with those used in the annual financial
statements for the year ended 30 September 2006. The accounting policies comply
with International Financial Reporting Standards (IFRS) and the Companies Act,
1973 (as amended).
2.2 Earnings and headline earnings
Earnings and headline earnings for the period are based on the weighted average
number of linked units in issue for the period and are calculated as follows:
Unaudited Unaudited
31 March 2007 31 March 2006
Cents Cents
R`000 per unit R`000 per unit
Profit (earnings) per share 52 608 27,61 46 258 26,61
Debenture interest * 29 156 15,30 24 334 14,00
Profit (earnings) per
linked unit 81 764 42,91 70 592 40,61
Amortisation of debenture
premium (1 272) (0,67) (667) (0,38)
Capital surpluses (net of
deferred taxation) (49 507) (25,98) (44 219) (25,44)
Headline earnings per
linked unit 30 985 16,26 25 706 14,79
Debenture interest * (29 156) (15,30) (24 334) (14,00)
Headline earnings per share 1 829 0,96 1 372 0,79
Reconciliation to
undistributed earnings:
Debenture interest * 29 156 15,30 24 334 14,00
Rental straight-lining (net
of deferred tax) (1 798) (0,94) (1 372) (0,79)
Distributable earnings 29 187 15,32 24 334 14,00
Debenture interest * (29 156) (15,30) (24 334) (14,00)
Undistributed income 31 0,02 - -
Distribution per linked
unit in issue 15,30 14,00
* adjusted with the prepaid debenture interest received on the units issued
2.3 Primary business segments - all amounts exclude straight-line adjustments
Retail Office Industrial Group
31 March 2007 R`000 R`000 R`000 R`000
Rental - cash flows inherent
in leases 30 778 13 653 9 890 54 321
Net rental income from
properties 23 000 9 689 8 101 40 790
Fair value adjustment 33 258 18 349 11 212 62 819
Investment properties - at
valuation 609 850 208 700 171 800 990 350
31 March 2006
Rental - cash flows inherent
in leases 26 053 13 219 8 369 47 641
Net rental income from
properties 19 540 9 472 6 957 35 969
Fair value adjustment 31 493 16 754 10 300 58 547
Investment properties - at
valuation 402 000 197 000 127 500 726 500
3. COMMENTS
3.1 Results
Ambit has performed well for the period under review providing investors with
strong income growth. Ambit`s distributable earnings for the six months ending
31 March 2007 amount to R33,4 million or 15,3 cents per weighted units (2006:
R24,3 million or 14,0 cents). Inclusive of capital gains, earnings amount to
R86,0 million or 42.9 cents per weighted units in issue (2006: R70,6 million or
40,6 cents).
The distribution for the period is R33,4 million or 15,3 cents per unit in
issue at 31 March 2007 which shows growth of 9,3% over the 2006 distribution
(14,0 cpu).
3.2 Property portfolio
The property portfolio was revalued by the directors at 31 March 2007. The
value of the portfolio is R990 million. This represents an increase of 8% on
the external valuation of the core portfolio undertaken in September 2006. The
total increase in value since year-end (R825 million) is R165 million and
comprises revaluation increases and new acquisitions.
During the period under review an
agreement to acquire a portfolio of seven properties was entered into for a
purchase consideration of R136 million, at an initial yield of 10,8%, payable
by the issue of Ambit units. Four of these properties were transferred for a
purchase consideration of R100 million prior to the end of the period, two
others were transferred in April and the remaining property is expected to
transfer later in the financial year.
The pre-leasing of the Link retail development at Old Main Road, Pinetown, in
which Ambit is a 50% owner, is progressing and the construction contract is
expected to be signed shortly. The development will comprise 18 800 m2 of
retail and ancillary space located between the taxi terminus and Pine Crest
shopping centre. The forecast yield is 10%.
The proposed upgrade of Scottsville Mall has been delayed pending a detailed
investigation into a more comprehensive refurbishment driven by tenant demand
for the centre.
Tenant retention on lease expiry has been maintained at a high level of 82% and
across the portfolio renewal rentals have increased.
The vacancy in the portfolio was reduced from the already low level and the
occupancy level stood at 97,5% at the end of the period.
3.3 Oryx investment - equity- accounted associate
Ambit`s 27,50% investment in Oryx Properties Limited increased in value by R7,2
million to R118,1 million due to the increase in the net asset value of Oryx.
3.4 Net asset value
The revaluations of investment properties have given rise to a fair market
adjustment of R62,8 million.
The net asset value, before making provision for the debenture interest payable
but after providing for deferred taxation at 29% on the fair market adjustment,
is 350 cents per unit (31 March 2006: 301 cpu).
The market price of units traded on the JSE Limited at 31 March 2007 was 420
cents which represents a premium to net asset value of 20,0%.
3.5 Borrowings
At 31 March 2007 Ambit`s debt level was R315,9 million (31 March 2006: R299,0
million), which represents a long-term debt to long-term assets ratio of 28,5%
(31 March 2006: 36,9%). Of this debt 63% (31 March 2006: 51%) is subject to
fixed-interest agreements for periods from 2007 to 2012. Subsequent to the
period under review a further fixed-interest agreement was entered into
increasing the fixed-debt portion to 75% of total debt. The average interest
rate as at 31 March 2007 was 10,0% (31 March 2006: 9,1%).
3.6 Related party transactions
The group is managed by Ambit Management Services. This company, which is
considered to be a related party, is owned by Absa Bank Limited.
All transactions with these parties are concluded on an arm`s length basis with
market related terms and conditions.
3.7 Directorate
NBS Harris has been re-appointed as Chief Executive Officer until 30 June 2008
and J de Beer will serve as Chief
Operations Officer.
3.8 Prospects
Ambit`s strategy to increase its property portfolio to in excess of R1,5
billion as reported at year-end is still the objective. The board issued a
cautionary announcement on 8 May 2007 and will make further announcements in
this regard in the near future.
The continued strength of the property market should result in sustainable
growth in distributions.
4. DECLARATION OF DISTRIBUTION
Notice is hereby given of distribution Number Six amounting to 15,3 cents per
unit interest on debentures, for the six month period to 31 March 2007.
Last date to trade cum distribution Friday, 25 May 2007
Units will trade ex distribution Monday, 28 May 2007
Record date to participate in the distribution Friday, 1 June 2007
Payment of distribution Monday, 4 June 2007
Linked unit certificates may not be dematerialised or re-materialised between
Monday, 28 May 2007 and Friday, 1 June 2007, both days inclusive.
On behalf of the board
DL Brown NBS Harris
Chairman Chief Executive Officer
10 May 2007
Directors
DL Brown (Chairman)+, NBS Harris (CEO)*, JH Beare+, RR Emslie, IN Mkhari+,
F Uys+, RD Jeffrey (alternate) *executive +independent
news@ambitprops.co.za
http://www.ambitprops.co.za
Registered Office
Ambit Properties Limited, First Floor, 4 Fricker Road
Illovo Boulevard, Illovo, 2076
PO Box 618, Melrose Arch, 2076
Auditors
Deloitte
Delloitte & Touche Chartered Accountants (SA)
Registered Accountants and Auditors
Sponsor
Exchange
Sponsors
Transfer secretaries
Computershare
Date: 10/05/2007 16:24:01 Produced by the JSE SENS Department.
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