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CBS
CBS
CBS - CBS Property Group - Abridged interim results for the six months ended 30
April 2007
CBS Property Portfolio Limited
Registration number: 2003/009523/06
Share code: CBS ISIN: ZAE000073995
Abridged interim results for the six months ended 30 April 2007
Highlights
Distribution growth up 25% to 40 cents
Total assets up 102% to R2.4 billion
Market cap exceeds R2.0 billion
Abridged consolidated income statement
Reviewed Not reviewed Audited
6 months 6 months 12 months
ended ended ended
30 April 30 April 31 October
2007 2006 2006
R`000 R`000 R`000
Revenue excluding movement in
straight-line
lease income accrual 116 092 69 598 164 697
Movement in straight-line lease
income accrual 11 994 451 6 429
Gross revenue 128 086 70 049 171 126
Other income 25 510 561 10 762
Other income 2 054 561 1 620
Gains on disposal of assets 23 456 - 9 142
Operating expenses (44 025) (26 362) (61 024)
Interest revenue 24 321 250 38 886
Fair value adjustment investment
property (25 638) 1 834 177 326
Fair value adjustment (13 644) 2 285 183 755
Movement in straight-line lease
income accrual (11 994) (451) (6 429)
Finance costs (89 215) (44 285) (134 489)
Net loss from associate (128) - -
Profit before taxation 18 912 2 047 202 587
Taxation (4 998) (1 230) (53 340)
Profit for the period 13 914 817 149 247
Distribution per linked unit 40c 32c 72c
Basic earnings per share 7.5c 0.9c 101.4c
Diluted earnings per share 8.5c 1.3c 180c
Abridged consolidated balance sheet
Reviewed Not reviewed Audited
as at 30 April as at 30 April as at 31 October
2007 2006 2006
R`000 R`000 R`000
Assets
Non-current assets 2 191 659 1 126 478 1 960 365
Plant and equipment 1 793 411 1 531
Investment properties 2 144 599 1 099 470 1 926 041
Goodwill 14 968 14 968 14 968
Investment in associate 462 - -
Other financial assets 60 727 43
Operating lease asset 29 778 10 902 17 783
Current assets 191 391 52 170 52 761
Inventories 64 8 27
Loans to related parties 81 672 143 1 466
Other financial assets - 5 315 6 023
Trade and other
receivables 37 444 8 667 20 466
Non-current asset
held for sale 41 294 19 401 -
Cash and cash
equivalents 30 917 18 636 24 779
Total assets 2 383 049 1 178 648 2 013 127
Equity and
liabilities
Capital and reserves 662 992 163 905 465 022
Share capital 452 957 109 215 268 831
Retained income 210 035 54 690 196 190
Non-current
liabilities 1 621 277 969 710 1 455 563
Other financial
liabilities 600 686 479 325 627 125
Instalment sale
obligations 24 - 61
Deferred taxation 100 807 36 880 95 818
Debentures 919 760 453 505 732 559
Current liabilities 98 781 45 033 92 542
Current tax payable 35 94 135
Loans from related parties - - 555
Trade and other payables 98 691 44 562 91 819
Instalment sale obligations 54 - 34
Current portion of borrowings - 377 -
Total equity and
liabilities 2 383 049 1 178 648 2 013 127
Consolidated statement of changes in equity
for the period ended 30 April 2007
Share Treasury Share
capital shares premium
R`000 R`000 R`000
Balance at 1 November 2005 212 - 20 371
Net profit for the year - - -
Issue of share capital 541 252 812
Treasury shares held by subsidiary - (5 104) -
Dividend paid - - -
Balance at 1 November 2006 753 (5 104) 273 183
Net profit for the period - - -
Issue of share capital 190 - 185 173
Treasury shares held by subsidiary - (1 232) -
Dividend paid - - -
Balance at 30 April 2007 943 (6 336) 458 356
Total share
capital
Total share Distributable and
capital reserve reserves
R`000 R`000 R`000
Balance at 1 November 2005 20 583 47 032 67 615
Net profit for the year - 149 247 149 247
Issue of share capital 253 353 - 253 353
Treasury shares held by
subsidiary (5 104) - (5 104)
Dividend paid - (89) (89)
Balance at 1 November 2006 268 832 196 190 465 022
Net profit for the period - 13 914 13 914
Issue of share capital 185 363 - 185 363
Treasury shares held by
subsidiary (1 232) - (1 232)
Dividend paid - (75) (75)
Balance at 30 April 2007 452 963 210 029 662 992
Abridged consolidated cash flow statement
Reviewed Not reviewed Audited
6 months 6 months 12 months
ended ended ended
30 April 30 April 31 October
2007 2006 2006
R`000 R`000 R`000
Cash flows from operating
activities
Cash generated from operations 56 174 52 531 339 858
Interest income 24 321 250 38 886
Finance costs (89 209) (44 285) (134 489)
Taxation paid (109) (4) -
Net cash from operating activities (8 823) 8 492 244 255
Cash flows from investing
activities
Purchase of plant and equipment (441) (199) (1 553)
Investment properties acquired (341 732) (346 210) (997 543)
Investment properties sold 79 800 - 28 170
Business acquired (590) - -
Increase in loans to related
parties (80 205) - (742)
Loans advanced to group companies - - 248 450
Other financial assets acquired - - (6 168)
Sale of other financial assets 6 865 - -
Net cash from investing
activities (336 303) (346 409) (729 386)
Cash flows from financing
activities
Proceeds on shares issued 184 132 88 632 532
Proceeds on debentures issued 187 357 220 329 528 721
Other financial liabilities
settled (19 573) - (52 338)
Related party loans repaid (555) (241) (14 747)
Finance lease payment (22) - (30)
Dividends paid (75) (30) (89)
Net cash from financing activities 351 265 308 690 462 049
Total cash movement for the year 6 138 (29 227) (23 082)
Cash at the beginning of the year 24 779 47 863 47 863
Total cash at the end of the
period 30 917 18 636 24 779
Abridged segmental information as at 30 April 2007
Industrial
Reviewed Not reviewed Audited
6 months 6 months 12 months
ended ended ended
30 April 2007 30 April 2006 31 October 2006
R`000 R`000 R`000
REVENUE 1 755 1 289 3 914
RESULT 1 087 1 074 5 771
Retail
Reviewed Not reviewed Audited
6 months 6 months 12 months
ended ended ended
30 April 2007 30 April 2006 31 October 2006
R`000 R`000 R`000
REVENUE 27 357 23 130 78 272
RESULT 16 237 15 127 138 804
Commercial
Reviewed Not reviewed Audited
6 months 6 months 12 months
ended ended ended
30 April 2007 30 April 2006 31 October 2006
R`000 R`000 R`000
REVENUE 89 270 39 413 87 438
RESULT 58 272 26 528 151 864
Residential
Reviewed Not reviewed Audited
6 months 6 months 12 months
ended ended ended
30 April 2007 30 April 2006 31 October 2006
R`000 R`000 R`000
REVENUE 1 815 1 430 2 841
RESULT 998 876 1 752
Non-allocated/
Eliminating
Reviewed Not reviewed Audited
6 months 6 months 12 months
ended ended ended
30 April 2007 30 April 2006 31 October 2006
R`000 R`000 R`000
REVENUE 7 889 4 787 (1 339)
RESULT (62 680) (42 788) (147 192)
Consolidated
Reviewed Not reviewed Audited
6 months 6 months 12 months
ended ended ended
30 April 20 07 30 April 2006 31 October 2006
R`000 R`000 R`000
REVENUE 128 086 70 049 171 126
RESULT 13 914 817 149 247
COMMENT
The six-month period to 30 April 2007 was a notable success and we are pleased
to announce a distribution of 40c per linked unit, which represents a 25%
increase on the same period last year.
Offer by the Public Investment Corporation ("PIC")
We refer investors to the SENS announcement on 22 March 2007 whereby the PIC
offered a "clean" cash consideration of R12 for every one CBS linked unit. The
offer is fully detailed in the circular posted to all investors on 25 May 2007.
In addition to the R12, CBS will pay the April 2007 distribution and special
distribution as defined on page 3 of the circular for the period 1 May 2007 to
date of acceptance of offer.
Property Acquisitions and Sales
As detailed in a SENS announcement dated 29 November 2006, CBS acquired two
prime A-grade office and warehouse buildings for R303 million flowing from the
company`s strategic development alliance with Zenprop Property Holdings. The two
properties comprise the 15 500 m2 Siemens Building with superb highway frontage
and the ultra modern 9 500 m2 T-Systems Head Office building, both located in
Midrand, Johannesburg.
As detailed in a SENS announcement dated 29 November 2006, CBS concluded a
broad-
based black economic empowerment (BEE) transaction with a consortium led by Mr
Zwelakhe Sisulu, which led to the formation of African Capital Property
Portfolio Limited.
In April 2007, the following properties were sold to African Capital,
Selling price
37 Harley Street, Randburg R10.6 million
38 Dover Street, Randburg R5.4 million
Motown Randburg, Ferndale R44.5 million
Palm Grove, Randburg R19.3 million
The transaction was funded by way of a loan from Standard Bank for R49.5 million
and a loan from CBS for the balance of the purchase price. Both loans are
secured by mortgage bonds.
Dividend and Interest Payment
Notice is hereby given of the interim distribution Number 3 of 0.04 cent and
debenture interest payment Number 3 of 39.960 cents per linked unit, totaling
40.0 cents per linked unit for the income distribution period 1 November 2006 to
30 April 2007.
Timetable for Distribution
Last day to trade "cum" the interim distribution Friday, 22 June 2007
Linked units commence trading "ex" the interim
distribution Monday, 25 June 2007
Record date to participate in the interim
distribution Friday, 29 June 2007
Payment date of the interim distribution Monday, 2 July 2007
No dematerialisation or rematerialisation of CBS linked unit certificates may
take place between Monday, 25 June and Friday, 29 June 2007, both days
inclusive.
Basis of Accounting
These results have been prepared in accordance with International Financial
Reporting Standards (IFRS). The company`s accounting policies as set out in the
audited financial statements for the year ended 31 October 2006 have been
consistently applied. In terms of current accounting standards, rental income
from leases with escalation clauses should be brought to account on a smoothed,
straight-line basis over the period of the relevant leases.
Compliance with the accounting standard results in future rental escalations
being included in the current year`s revenue. However, as Investment property is
valued by discounting future expected cash flows, the fair value adjustment for
Investment property is reduced by the amount of the straight-line lease income
adjustment included in revenue, in order to avoid double counting.
Financial Results
The results for the period under review have exceeded budget, enabling CBS to
distribute 40 cents per linked unit.
Reconciliation between basic earnings and headline earnings
Oct 2006 Apr 2006 Apr 2007
R`000 R`000 R`000
Net income after tax 149 249 817 13 914
Less fair value adjustment (177 326) (1 834) 25 638
Add taxation attributable thereto 46 689 532 (5 740)
Headline profit/(loss) 18 612 (485) 33 812
Headline profit/(loss) per share - cents 12.6c (0.5c) 18.1c
Diluted profit/(loss) per share - cents 22.3c (0.7c) 21.1c
The disclosure of headline earnings and earnings per share as set out, whilst
obligatory in terms of accounting standards, is not meaningful to investors as
the shares are traded as part of a linked unit and 499.5/500 of the revenue is
distributed in the form of debenture interest. In addition, earnings include
fair value adjustments and straight-line income adjustments, which do not affect
distributable earnings. The distributable earnings per linked unit as shown is
meaningful to investors. The figure shown equates to 40 cents per linked unit.
By order of the Board
Cape Town
8 June 2007
DIRECTORS
Ivan Klerck* (Chairman), Martin Ettin, Gary Fisher, Derek Greenberg,
Richard Harman, Eugene Loubser*, Sean Mackay, Jeff Molobela*, Paul Sulcas*,
Colin Traub*
(*Non-Executive)
Company Secretary: Charmaine Loydall
CBS Property Portfolio Limited
Registration number: 2003/009523/06
Registered office: 7th Floor, Buitengracht Centre, 125 Buitengracht Street,
Cape Town, 8001
Share code: CBS ISIN: ZAE000073995
Sponsor:
Investec Bank Limited
(Registration number 1969/004763/06)
Auditor:
BDO Spencer Steward
Chartered Accountants
Registered Auditors
Date: 08/06/2007 08:00:02 Produced by the JSE SENS Department.
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