| Wed 1 Aug 2007, 11:24 | | APA/APB/AXC - ApexHi - Audited results for the yea |
|
APA APB AXC
APA
APA/APB/AXC - ApexHi - Audited results for the year ended 30 June 2007 and
quarterly distribution declaration for the three months ended 30 June 2007
ApexHi Properties Limited
(Incorporated in the Republic of South Africa)
(Registration number 1999/000238/06)
Share code: APA ISIN: ZAE000083598
Share code: APB ISIN: ZAE000083606
Share code: AXC ISIN: ZAE000083580
("ApexHi" or "the company")
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2007 AND QUARTERLY DISTRIBUTION
DECLARATION FOR THE THREE MONTHS ENDED 30 JUNE 2007
HIGHLIGHTS
- 17% growth in distributions (A unit: 17%, B unit: 17%)
- Value of property portfolio has grown by 40% from R6,7 billion to R9,4
billion
- High trading volumes maintained (A unit: 54%, B unit: 53%, C unit: 85%)
- Total return of 62% for the year to 30 June 2007 (A unit: 46%, B unit: 66%,
C unit 223%), compared to the property loan stock average of 44%
RESULTS
The fourth quarter`s distribution on the A unit has been increased by 2,03 cents
to 33,75 cents whilst the distribution on the B unit has been increased by 2,47
cents to 41,25 cents. The total distribution per A unit for the year is 128,47
cents (17% increase from 30 June 2006) and the distribution per B unit is 157,03
cents (17% increase from 30 June 2006). The combined A and B unit distribution
for 2007 is 285,5 cents (17% increase from 30 June 2006).
Summarised operating results 2007 % 2006
(excluding the effects of R`000 change R`000
straight-lining of leases)
Investment properties - net
operating income
Core portfolio - properties held 613 545 12 548 989
for a full year
Rental 817 286 10 742 453
Turnover rental 13 061 12 889
Property expenses (216 802) 5 (206 353)
Additions during the prior year 191 996 102 563
Additions during the current year 36 916 -
Disposals during the prior year - 9 903
Disposals during the current year 18 000 25 989
Disposals post balance sheet 20 010 17 097
Operating income from investment 880 467 25 704 541
properties
Corporate costs and (70 674) 43 (49 463)
administrative expenses
Asset management fee (52 959) 40 (37 914)
Employment costs (7 181) 315 (1 731)
Administrative expenses (4 351) (18) (5 292)
Investor relations, marketing and (3 331) 39 (2 401)
publications
Corporate costs (2 852) 34 (2 125)
Profit from operations 809 793 24 655 078
Non-core income 34 711 -
Matemeku profit share 15 231 -
Development fees on Maxcity 11 500 -
Clearwater guarantee fee 7 980 -
Finance costs (162 759) 21 (134 734)
Interest income 42 518 55 27 476
Investment income - 9 241
Distributable profits 724 263 30 557 061
Weighted average number of units 253 682 462 228 303 737
in issue
Distribution per unit (cents) 285,50 17 244,00
A unit 128,47 17 109,80
B unit 157,03 17 134,20
C unit - -
Distribution per unit (cents) - 272,40 12 244,00
excluding non-core income
A unit 122,57 12 109,80
B unit 149,83 12 134,20
C unit - -
Ratio of property expenses to 24 26
conventional rental income (%)
CORE PORTFOLIO
The core portfolio, representing properties held for 12 comparative months,
reflects growth of 12%. Total revenue increased by 10% and property expenses
increased at a lower rate of 5%.
Despite good growth in renewal rentals (industrial 30%, offices 19%, and retail
9%), total revenue only increased by 10% due to:
- a lower rental reversion at Royal Beech Nut from 1 December 2006. A new
lease was concluded in 2005 with Beige Holdings Limited with rentals
reducing from R948 000 p.m. (R65 per m2) to R208 000 p.m. (R14 per m2). The
lease has been structured on a staggered basis with rentals commencing at
R14 per m2 escalating by 60% in year 2 and thereafter by 7,5% p.a.
- 125 Simmonds Street was vacant for the entire year after the Department of
Education vacated 4 660m2 in May 2006. This resulted in a loss of income of
R2,2 million. A new lease on the entire building has been concluded with
Johannesburg City Council for R278 300 p.m. (R59,72 per m2) plus parking,
with effect from 1 November 2007.
- The anchor tenant at Horizon View Shopping Centre, a franchised Friendly
Grocer, was liquidated in November 2006 and the premises are currently
vacant resulting in a loss of rental of R1,0 million for the period. During
2006 a lease cancellation fee of R2,3 million was received from Nu-Metro
and the premises remain vacant.
There was no significant increase in turnover rentals.
The portfolio also benefited from a full year`s income on the R1,7 billion
properties acquired in 2006. These properties were acquired at average yield
before gearing of 11,8%.
PROPERTY EXPENSES
During the year, two major contracts were renegotiated: the escalator and lift
contract with Otis and the air conditioning service agreement with Domayne
Engineering Services ("DES"). These negotiations resulted in an annual saving of
R6 million. The contract with Otis was extended for a further six years and
allows for a further decrease of 11% w.e.f 1 January 2008 and thereafter an
annual increase of 6%. The DES contract is for a period of five years and
escalates at 6% p.a.
The ratio of property expenses to conventional rental income continues to reduce
as a result of cost containment and also as a result of growth in rental income.
ASSET MANAGEMENT FEE
The asset management fee is calculated on the market capitalisation plus long-
term borrowings of the company. The increase is due to the acquisition of
properties totalling R691 million during the year, the acquisitions during the
latter part of the 2006 financial year included for the full financial year in
2007, and growth in the combined unit price.
EMPLOYMENT COSTS
Included in employment costs is R4,9 million accrued in respect of a phantom
share incentive bonus scheme, introduced by the company for the CEO in October
2006 when the C unit was listed. A cash bonus will be paid based on the market
price of the C unit less a strike price of R2,00. Details of the scheme are as
follows:
Date granted: 9 October 2006
Number of C units 3 500 000
allocated:
Date bonus will be 15 March 2008 15 March 2009 15 March 2010
calculated:
Number of C units bonus 1 166 667 1 166 667 1 166 667
will be calculated on:
Estimated market price R7,00 R7,50 R8,00
on 15 March each year:
If the market price of the C unit is less than R2,00 or if the CEO is no longer
in the employ of ApexHi on the payment date, no payment will be made.
NON-CORE INCOME
ApexHi`s strategy is to enhance distributions by seeking once off gains which
will benefit unit holders. During the year, the company generated R34,7 million
of non-core income which equates to 13,1 cents per combined unit:
- Matemeku profit share (R15,2 million)
In May 2006 ApexHi advanced R84,5 million to Matemeku Property Acquisitions 104
(Pty) Limited to acquire a 40,6% stake in Calulo Property Fund Limited. Matemeku
sold its shares in Calulo at a profit and repaid the loan in October 2006.
ApexHi`s share of the gain amounted to R15,2 million.
- Development fee - Maxcity (R11,5 million)
In 2006 ApexHi acquired a 50,1% undivided share in Maxcity, the development of a
25 644 m2 retail centre in Mamelodi East. On 25 May 2007 ApexHi sold its
undivided share in Maxcity for R87,5 million - R76 million representing costs
incurred to date of sale and R11,5 million in respect of a development fee.
- Guarantee fee - Clearwater (R8 million accrued)
Tranche 1
In terms of a BEE transaction, Clearwater acquired 37 500 000 C units at R2 per
unit. The R75 million was funded by means of a R65 million loan from Nedbank to
Clearwater and R10 million equity from Clearwater. To facilitate the R65 million
loan, ApexHi agreed to guarantee repayment by Clearwater and in return for
providing the guarantee, Clearwater agreed to pay ApexHi a fee based on 25% of
the market price of the C unit in June 2010, less R2,00 per unit, less funding
costs of the C unit. The guarantee fee is effective from 9 October 2006 and the
C unit price is determined based on a 30 day volume weighted average price up to
and including 30 June 2010. Half of the guarantee fee is payable on 31 July 2010
and half on 31 July 2011.
Tranche 2
On 30 March 2007, Clearwater bought a further 29 984 736 C units from the ApexHi
BEE Trust. The units were acquired at R4,62 per unit. The R138,5 million was
funded by means of a loan from Nedbank. To facilitate the funding, ApexHi
agreed to guarantee repayment by Clearwater and in return, Clearwater agreed to
pay ApexHi a fee based on 15% of the market price of the C unit in June 2010,
less R4,62 per unit, less funding costs of the C unit. The guarantee fee is
effective from 1 April 2007 and the C unit price is determined based on a 30 day
volume weighted average price up to and including 30 June 2010. The full
guarantee fee is payable on 31 July 2010. In July 2007 Clearwater subsequently
sold 5 000 000 of the C units to Madison in order to implement an incentive
scheme for the employees responsible for the management of ApexHi.
INTEREST INCOME
Included in interest income is R5,8 million earned on a R512 million vendor unit
placement on 1 April 2007 to fund the Investec and Zenprop acquisitions.
The majority of surplus funds are placed in an access facility which attracts
interest at 1% below prime, currently 12%. Cash that cannot be utilised as part
of the access facility is placed in a money market fund currently earning 9,5%.
FINANCE COSTS
In April 2007, ApexHi re-fixed its existing fixed term loans, extended its debt
capital market finance arrangement (conduit funding) with Standard Bank by a
further R500 million and renegotiated its costs and margins on the conventional
funding. This will result in annual savings of R7,5 million and will benefit
unit holders in 2008.
PROPERTY PORTFOLIO
At 30 June 2007, the property portfolio comprised a total of 423 properties
worth R9,4 billion and lettable area of 2,7 million m2.
ACQUISITIONS
ApexHi has acquired 18 properties for R690,6 million since 1 July 2006. The
total purchase consideration was settled by a cash payment of R154,7 million and
the issue of 15 471 216 combined units at an average issue price of R34,64 per
combined unit. The properties were acquired at an average yield before gearing
of 11,6%.
DISPOSALS
38 properties were disposed of for R414,6 million, realising a surplus on
original cost of R75,7 million. This surplus has been transferred to a capital
reserve. The properties were sold at an average yield of 8,81%.
VALUATIONS
All properties with a carrying value in excess of R5 million at 31 December 2006
were valued externally by independent valuers. The balance of the portfolio was
valued by the directors.
The revaluations have resulted in a fair value adjustment in the income
statement of R2 billion. The valuation of the R9,4 billion property portfolio
represents an average forward yield of approximately 11,3%.
Lettable area Vacancy
Sectoral composition and vacancies m2 % m2 %
Retail 1 138 573 43 65 634 6
Office 979 328 36 95 410 10
Industrial 564 994 21 10 198 2
2 682 895 100 171 242 6
LETTING ACTIVITY
ApexHi concluded 1 400 leasing deals worth more than R1 billion in the financial
year.
Leases covering 644 002m2 expired during the year, while leases covering 683
754m2 were concluded, resulting in a decrease in vacancies of 39 752m2.
Average Average Average
Area expiry renewal portfolio
renewed rental rental Increase rental
Rental growth on m2 R per m2 R per m2 % R per m2
renewal of leases
Retail 210 767 47,69 52,01 9 44,88
Office 218 621 37,95 45,02 19 36,58
Industrial 82 535 14,27 18,48 30 22,84
Total 511 923 38,14 43,62 14 39,63
BORROWINGS
R1,365 billion (92%) of the R1,476 billion debt is fixed at a weighted average
all inclusive rate of 9,69% p.a, for an average period of 9,5 years. The
floating debt of R110,9 million is linked to prime and any increase in interest
rates does not generally result in higher borrowing costs as surplus funds, up
to a maximum of the floating debt, are invested at the same rate using an access
facility.
LIQUIDITY
ApexHi`s units continue to maintain high trading volumes. 54% of the A units and
53% of the B units were traded. The C units, which listed in October 2006 were
heavily traded as investors adjusted their portfolios. From October 2006 to end
June 2007, 64% of C units traded, equating to 85% on an annualised basis.
Total return
Unit price Unit price Share of Cash from
30 June 30 June C unit** C unit
2006 2007
R R R R
A unit 12,10 14,09 2,035 0,27
B unit 12,90 17,00 2,487 0,33
C unit* 2,00 6,46
Interest Total
distribution Total return
R R (%)
A unit 1,26 17,66 46
B unit 1,55 21,36 66
C unit* 6,46 223
* listed on 9 October 2006.
** A unit: 45 per 100 and retained 70%; B unit: 55 per 100 and retained 70%.
Post balance sheet events Acquisitions
Cash Initial
yield
price before
gearing
Property Location Sector R`000 %
Game Gardens George Retail 87 500 10,27
Softstone portfolio * 131 100 12,00
Dudley Heights Johannesburg Residential 36 480
Argyle Centre & Baker Johannesburg Residential 22 800
House
Esselen Towers Hillbrow Residential 15 390
Skyways Johannesburg Residential 11 970
Stellenberg Hillbrow Residential 11 970
Argyle House Parktown Residential 11 400
Lowliebenhof Braamfontein Residential 8 550
Park Mews Parktown Residential 7 980
Malvin Court Berea Residential 4 560
7 erven (Jewel City) Johannesburg Office 13 200 -
Transwire Midrand Industrial 9 500 11,36
Erf 34462 Kimberley Retail 550 -
241 850 10,67
* ApexHi will acquire the residential portfolio and enter into a 50:50 joint
venture with Aengus Property Holdings.
CAPITAL COMMITMENTS
Authorised capital improvements still to be spent on investment properties total
R210,5 million.
Disposals
Surplus/
Net (deficit)
selling on original Selling
price cost yield
Property Location Sector R`000 R`000 %
Rivonia Rivonia Retail 196 000 37 419 8,20
Square *
Vineyard Stellenbosch Office 32 000 15 684 5,20
West Johannesburg Retail 20 000 17 130 5,56
Street
Parkade
Mokopane Mokopane Retail 4 800 (691) 10,18
Centre
Amethyst Carletonville Retail 3 800 43 10,79
Perm Krugersdorp Office 3 050 476 18,11
Building
Corpgro Bloemfontein Industrial 3 000 (1 322) 12,31
Ellerines East London Retail 2 696 (194) 11,23
Terminus
St
Ellerines Hluhluwe Retail 2 300 422 8,17
Hluhluwe
508 West Durban Retail 2 225 58 9,49
Street
506 West Durban Retail 2 075 52 10,29
Street
Ellerines Bloemfontein Retail 2 008 (14) 10,87
1st Ave Springs Retail 1 560 (30 10,76
Town Talk
Acme Store Port Retail 1 300 (1 301) 8,30
Elizabeth
Bradlows Krugersdorp Retail 1 200 (2 123) 13,86
Erf 755 Johannesburg Industrial 1 000 750 12,57
Denver
Price and White River Retail 1 000 (2 179) 5,61
Pride
280 014 64 180 8,01
* Competition Commission approval required.
FINANCIAL STATEMENTS
Basis of preparation and accounting policies
The annual financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") and the Companies Act of
South Africa, 1973.
All accounting policies are consistent with those used in the annual financial
statements for the year ended 30 June 2006.
These results have been audited by the independent auditors, Grant Thornton.
Their unqualified report is available for inspection at the company`s registered
office.
2007 2006
CONDENSED BALANCE SHEET R`000 R`000
ASSETS
Non-current assets 9 045 743 6 484 875
Investment properties 8 850 806 6 330 173
Straight-line rental income accrual 153 878 116 660
Tenant installations 41 059 38 042
Current assets 422 372 446 597
Non-current assets held for sale 280 014 146 958
Total assets 9 748 129 7 078 430
EQUITY AND LIABILITIES
Share capital and reserves 2 695 218 1 152 032
Non-current liabilities 6 665 989 5 610 796
Debenture capital and premium 4 190 798 3 630 584
Deferred taxation 999 072 424 306
Interest bearing borrowings 1 476 119 1 555 906
Current liabilities 386 922 315 602
TOTAL EQUITY AND LIABILITIES 9 748 129 7 078 430
NAV per unit
Number NAV excluding
of units per unit deferred tax
Net asset value per unit in issue R R
(NAV)
A unit 264 592 114 10,62 11,89
B unit 264 592 114 8,73 9,98
C unit 264 592 114 6,68 7,93
Total - 30 June 2007 26,03 29,80
A unit 249 120 898 10,50 11,35
B unit 249 120 898 8,70 9,55
Total - 30 June 2006 19,20 20,90
2007 2006
INCOME STATEMENT R`000 R`000
Conventional rental income 1 173 623 963 363
Straight-line rental income accrual 36 449 53 339
Revenue 1 210 072 1 016 702
Property expenses (276 578) (247 579)
Administrative expenses and corporate costs (70 674) (49 463)
Tenant installation - depreciation (16 578) (11 243)
Profit from operations 846 242 708 417
Finance costs (162 759) (134 734)
Interest income 42 518 27 476
Other income 34 711 -
Investment income - 9 241
Profit before debenture interest 760 712 610 400
Debenture interest (724 263) (557 061)
Profit after debenture interest 36 449 53 339
Capital and other items not distributed 2 081 500 710 716
Change in fair value of investment 2 054 783 690 625
properties
Straight-line rental income accrual (36 449) (53 339)
Amortisation of debenture premium 57 588 41 898
Net surplus on disposal of investment 5 578 6 378
properties
Net surplus on disposal of listed - 25 154
investment
Profit before taxation 2 117 949 764 055
Taxation (574 766) (242 076)
Net profit after taxation 1 543 183 521 979
Reconciliation between earnings, headline
earnings and distributable earnings:
Net profit after taxation 1 543 183 521 979
Adjusted for
Debenture interest 724 263 557 061
Earnings - units 2 267 446 1 079 040
Adjusted for:
Change in fair value of investment (1 454 138) (410 678)
properties - net of taxation
Net surplus on disposal of investment (5 578) (6 378)
properties
Net surplus on disposal of listed - (25 154)
investment
Headline earnings - units 807 730 636 830
Straight-line rental income accrual - net (25 879) (37 871)
of taxation
Amortisation of debenture premium (57 588) (41 898)
Distributable earnings 724 263 557 061
Weighted Headline
average Distribution Earnings earnings
number per unit per unit per unit
of units (cents) (cents) (cents)
A unit 253 682 462 128,47 305,82 114,02
B unit 253 682 462 157,03 329,48 137,67
C unit 253 682 462 - 258,51 66,71
Total - year to 285,50 893,81 318,40
30 June 2007
A unit 228 303 737 109,80 223,29 126,44
B unit 228 303 737 134,20 249,34 152,50
Total - year to 244,00 472,63 278,94
30 June 2006
Non-
distribut-
Share Share able Capital
STATEMENT OF capital premium reserve reserve
CHANGES IN EQUITY R`000 R`000 R`000 R`000
Balance at 30 June 2005 38 28 067 35 422 15 216
Issue of ordinary shares 12 35 461
Net profit for the year
Realised accumulated net 27 749
write-up of investment
properties sold
Net surplus on disposal 17 712
of investment properties
Revaluation of listed
investment
Realised accumulated net
write-up of listed
investment sold
Net surplus on disposal 25 154
of listed investment
Amortisation of 41 898
debenture premium
transferred to non-
distributable reserve
Transfer to fair-value
reserve (net of deferred
tax)
Balance at 30 June 2006 50 63 528 77 320 85 831
Issue of ordinary shares 3
Net profit for the year
Realised accumulated net 70 540
write-up of investment
properties sold
Net surplus on disposal 5 578
of investment properties
Amortisation of 57 588
debenture premium
transferred to non-
distributable reserve
Transfer to fair-value
reserve (net of deferred
tax)
Balance at 30 June 2007 53 63 528 134 908 161 949
Fair Accumu-
value lated
STATEMENT OF reserve loss Total
CHANGES IN EQUITY R`000 R`000 R`000
Balance at 30 June 2005 540 946 (12 221) 607 468
Issue of ordinary shares 35 473
Net profit for the year 521 979 521 979
Realised accumulated net write-up (27 749) -
of investment properties sold
Net surplus on disposal of (17 712) -
investment properties
Revaluation of listed investment 8 619 8 619
Realised accumulated net write-up (21 507) (21 507)
of listed investment sold
Net surplus on disposal of listed (25 154) -
investment
Amortisation of debenture premium (41 898) -
transferred to non-distributable
reserve
Transfer to fair-value reserve 437 215 (437 215) -
(net of deferred tax)
Balance at 30 June 2006 937 524 (12 221) 1 152 032
Issue of ordinary shares 3
Net profit for the year 1 543 183 1 543 183
Realised accumulated net write-up (70 540) -
of investment properties sold
Net surplus on disposal of (5 578) -
investment properties
Amortisation of debenture premium (57 588) -
transferred to non-distributable
reserve
Transfer to fair-value reserve 1 480 017 (1 480 017) -
(net of deferred tax)
Balance at 30 June 2007 2 347 001 (12 221) 2 695 218
2007 2006
CASH FLOW STATEMENT R`000 R`000
OPERATING ACTIVITIES
Cash generated from operations 948 461 588 308
Finance costs (162 759) (134 734)
Interest income 42 518 27 476
Other income 34 711 -
Investment income - 9 241
Debenture interest paid (690 239) (500 814)
Net cash generated from/(utilised in) 172 692 (10 523)
operating activities
INVESTING ACTIVITIES
Purchase of investment properties (775 339) (1 937 084)
Capitalised improvements to investment (259 186) (170 791)
properties
Capitalised letting costs (14 275) (16 738)
Capitalised transaction costs (9 837) (25 048)
Proceeds on disposal of investment 414 998 219 458
properties
Proceeds on disposal of listed - 136 521
investment
Purchase of listed investment including - (25 008)
transaction costs
Net cash utilised in investing (643 639) (1 818 690)
activities
FINANCING ACTIVITIES
Issue of A, B and C units 617 805 1 502 114
Interest bearing borrowings (79 787) 393 569
(repaid)/raised
Net cash generated from financing 538 018 1 895 683
activities
Net increase in cash and cash 67 071 66 470
equivalents
Cash and cash equivalents at beginning 238 784 172 314
of year
Cash and cash equivalents at end of year 305 855 238 784
Indust-
SEGMENTAL Office Retail rial
INFORMATION R`000 % R`000 % R`000 %
Conventional rental 463 970 40 600 018 51 109 635 9
income
Straight-line rental 10 251 28 19 492 54 6 706 18
income accrual
Revenue 474 221 39 619 510 51 116 341 10
Property expenses (114 967) 42 (143 975) 52 (17 636) 6
Administrative expenses
Tenant installation - (11 773) 71 (3 882) 23 (923) 6
depreciation
Segment profit from 347 481 38 471 653 51 97 782 11
operations
Finance costs
Interest income
Other income
Segment profit before 347 481 38 471 653 51 97 782 11
debenture interest
Debenture interest
Segment profit after 347 481 471 653 97 782
debenture interest
Change in fair value of 702 893 1 162 466 189 424
investment properties
Straight-line rental (10 251) (19 492) (6 706)
income accrual
Amortisation of
debenture premium
Net surplus on disposal 1 224 (238) 4 592
of investment
properties
1 041 347 35 1 614 389 55 285 092 10
Other information
Investment properties 3 097 223 4 645 413 1 108 170
Other assets 189 041 370 759 43 008
Total assets 3 286 264 35 5 016 172 53 1 151 178 12
Total liabilities 65 438 72 490 13 935
* Where a property has
office, retail and
industrial components,
it is classified to the
component which
generates more than 50%
of the income.
Total Corp-
investment orate
SEGMENTAL properties costs Total
INFORMATION R`000 R`000 R`000
Conventional rental income 1 173 623 1 173 623
Straight-line rental income 36 449 36 449
accrual
Revenue 1 210 072 1 210 072
Property expenses (276 578) (276 578)
Administrative expenses (70 674) (70 674)
Tenant installation - (16 578) (16 578)
depreciation
Segment profit from operations 916 916 (70 674) 846 242
Finance costs (162 759) (162 759)
Interest income 42 518 42 518
Other income 34 711 34 711
Segment profit before 916 916 (156 204) 760 712
debenture interest
Debenture interest (724 263) (724 263)
Segment profit after debenture 916 916 (880 467) 36 449
interest
Change in fair value of 2 054 783 2 054 783
investment properties
Straight-line rental income (36 449) (36 449)
accrual
Amortisation of debenture 57 588 57 588
premium
Net surplus on disposal of 5 578 5 578
investment properties
2 940 828 (822 879) 2 117 949
Other information
Investment properties 8 850 806 8 850 806
Other assets 602 808 294 515 897 323
Total assets 9 453 614 294 515 9 748 129
Total liabilities 151 863 6 901 048 7 052 911
* Where a property has
office, retail and industrial
components, it is classified
to the component which
generates more than 50% of the
income.
2007 2006
Related party transactions R`000 R`000
ApexHi - Manco Trust
The trust is the asset manager of the company. M
Wainer and W E Cesman are trustees of the trust.
Asset management fee (0,5% p.a. of the market 52 959 37 914
capitalisation plus borrowings of the company)
The beneficiaries of the trust at 30 June 2007
are:
Madison Property Fund Managers* 100% 100%
* Shares held by ApexHi directors in Madison
Property Fund Managers at 30 June 2007:
M Wainer 12,73% 13,16%
W E Cesman 12,73% 13,16%
C van Wyk 0,34% 0,63%
J Dritz 0,15% -
The agreement between the company and the trust will remain in force until 30
June 2012, after which either party may give six months` notice of termination.
There are no performance-based incentive fees paid to the trust.
PROSPECTS
The growth in net revenue from the existing portfolio is dependent on rent
escalations on existing leases, growth in rentals from lease renewals, revenue
arising from the letting of vacant space and the containment of property
expenses. The current portfolio has on average, rental escalations of between 8%
and 10%. Rentals on renewals are forecast to increase by between 10% and 20%
with property costs expected to increase by 7%.
The core portfolio is expected to generate between 318 cents and 324 cents per
A, B and C unit ("combined unit`) for the 2008 financial year and the Clearwater
guarantee fee will contribute an additional 5 cents.
Based on the above, management is confident that combined distributions for the
2008 financial year will be between 323 cents and 329 cents.
Development fees arising from the joint venture with Aengus and new yield
enhancing property acquisitions could provide a further 8 cents per combined
unit.
The C unit is therefore expected to participate in distributions in the first
quarter of the 2008 financial year.
The above profit forecast has not been reviewed or reported on by the ApexHi
auditors.
DISTRIBUTION
Unit holders are advised that interest distribution number 25 in respect of the
quarter
1 April 2007 to 30 June 2007 has been declared as follows:
- In respect of the A unit - 33,75 cents (2006: 29,70 cents), a 13,6 %
increase
- In respect of the B unit - 41,25 cents (2006: 36,30 cents), a 13,6 %
increase
- Last date to trade cum interest Friday, 17 August 2007
- Units will trade ex interest Monday, 20 August 2007
- Record date Friday, 24 August 2007
- Payment of interest distribution number 25 Monday, 27 August 2007
There may be no dematerialisation or re-materialisation of the A and B units
between Monday, 20 August 2007 and Friday, 24 August 2007, both days inclusive.
By order of the Board
G G L Leissner
Chief Executive Officer
Johannesburg
1 August 2007
DIRECTORS: M Wainer (Chairman), G G L Leissner * (Chief Executive Officer), D H
Rice * (Managing), J F Bihl +, W E Cesman, J Dritz +,
A Rehman +, C van Wyk * * Executive + Independent
A presentation of the company`s results will be held in Johannesburg on
Thursday, 2 August 2007 at 17h30.
Should you wish to attend this presentation please e-mail Sandra Mason at:
apexhi@webmail.co.za.
www.Apexhi.co.za
Date: 01/08/2007 11:24:00 Produced by the JSE SENS Department.
