|
PAP
PAP
PAP - Pangbourne Properties Limited - Audited financial results for the year
ended 30 June 2007
Pangbourne Properties Limited ("Pangbourne")
(Incorporated in the Republic of South Africa)
(Registration number 1987/002352/06)
Share code: PAP & ISIN: ZAE000005252
Pangbourne Properties Limited
Audited financial results
for the year ended 30 June 2007
10,7% increase in distribution to 114 cents
Occupancies up 98,7%
Total annual return of 32,8%
10-year annualised return 47,3%
Issued share capital 262 939 169 (2006: 243 719 765)
- ordinary shares of 1 cent each
Issued debentures 2 364 667 191 (2006: 2 175 036 282)
- unsecured variable rate debentures of 50 cents each
Issued combined units 262 939 169 (2006: 243 719 765)
Weighted average combined units 247 579 797 (2006: 205 235 904)
Condensed consolidated income statement
Year to Year to
R`000 30 June 2007 30 June 2006
Revenue 694 653 494 559
Straight-line operating lease 17 104 22 281
adjustment
711 757 516 840
Net building costs (84 686) (63 915)
Administration costs (103 399) (76 191)
Cost of trading and developed (62 570) (40 584)
properties sold
Cost of investments held-for-trade (41 052) (4 074)
Profit from rental income, investment 420 050 332 076
income and fees received
Net revaluation of investment 278 383 354 823
properties
Attributable to straight-line (17 104) (22 281)
operating lease adjustment
Gross revaluation of investment 295 487 377 104
properties
Unrealised revaluation of listed - 8 152
investments held-for-trade
Goodwill - written off - (156 199)
Net profit on disposal of investment 8 343 55 562
properties
Amortisation of intangible assets (8 228) (4 878)
Fair value adjustment on units issued (3 986) (150 861)
during the year
Profit on dilution of subsidiary 1 731 -
Loss on sale of portion of subsidiary - (133)
Profit before financing costs and 696 293 438 542
taxation
Interest received 32 859 14 395
Finance costs (201 764) (113 884)
Movement in fair value of interest 81 050 14 878
rate swaps
Profit before taxation and 608 438 353 931
distribution to unitholders
Debenture interest - debt portion (104 244) (100 140)
Total distribution to combined (265 591) (216 722)
unitholders
Debenture interest - equity portion, 156 139 112 332
disclosed in statements of changes in
equity
Dividends - disclosed in statements 5 208 4 250
of changes in equity
Amortised debenture interest (3 671) (3 147)
Profit before taxation 500 523 250 644
Taxation (111 084) (33 466)
Taxation reversed in statements of (45 280) (32 576)
changes in equity
Share of profit from associates 186 653 79 826
Profit for the year 530 812 264 428
Attributable to:
Equity holders of the company 521 327 263 128
Minority interest 9 485 1 300
530 812 264 428
Earnings per combined unit 214,40 128,84
Headline earnings per combined unit 50,18 (1,12)
Condensed consolidated balance sheet
As at As at
R`000 30 June 2007 30 June 2006
ASSETS
Non-current assets
Direct and indirect investment in 5 245 080 3 411 728
property
Investment properties 4 317 530 2 929 538
Land held for development 16 085 22 564
Investment properties held for sale (142 512) (225 434)
Investments in and loans to 1 053 977 685 060
associates
Equipment, furniture and fittings 12 917 10 249
Goodwill 45 693 -
Intangible asset 23 924 1 628
Long-term loans 19 137 7 031
Deposits held 7 414 5 698
Deferred taxation assets 4 892 1 355
Fair value of interest rate 59 619 -
derivatives
Loans for purchase scheme units to 165 540 133 237
participants
Current assets
Trading properties - 73 095
Investment properties held for sale 142 512 225 434
Receivables 197 505 173 286
Prepayments 43 245 18 101
Other receivables 46 383 52 765
Current portion of long-term loans - 4 260
Investments held-for-trade - 41 052
Bank and cash 25 615 25 302
Total assets 6 039 476 4 184 221
EQUITY AND LIABILITIES
Capital and reserves 1 969 133 1 471 055
Debentures debt portion 937 445 890 224
Minority interest - equity 13 972 1 639
Minority interest - debt 208 499 -
Other interest-bearing borrowings 2 260 942 1 462 405
Fair value of interest rate swaps - 22 016
Deferred taxation liabilities 155 005 83 814
Current liabilities
Payables 110 792 101 256
Current portion of interest-bearing 188 248 22 500
borrowings
Taxation 43 964 2 424
Unitholders for distribution 151 476 126 888
Total equity and liabilities 6 039 476 4 184 221
Net debt excluding debenture debt
portion:
income-earning assets (%) 32,72 33,00
Net asset value per unit and
including debenture debt
portion (cents) 1 105 969
Reconciliation between earnings and headline earnings
Profit before Taxation
taxation
Cents Cents
R`000 per unit R`000 per unit
Profit after share of 676 656 273,31 (155 329) (62,74)
profit from associates
Adjustments
Revaluation of (278 256) 47 310 19,11
investment properties (112,39)
Net goodwill realised - - - -
Net profit on disposal (8 343) (3,37) 1 209 0,49
of investment
properties
Adjustments for (223 955) (90,46) 64 931 26,23
associates
Headline 166 102 67,09 (41 879) (16,91)
earnings/(loss)
Reconciliation between earnings and headline earnings (continued)
Profit after Year to 30 June 2006
taxation
Cents Cents
R`000 per unit R`000 per unit
Profit after share of 521 327 210,57 264 428 128,84
profit from associates
Adjustments
Revaluation of (230 946) (93,28) (303 374)
investment properties (147,82)
Net goodwill realised - - 156 199 76,11
Net profit on disposal (7 134) (2,88) (47 505) (23,15)
of investment
properties
Adjustments for (159 024) (64,23) (72 055) (35,10)
associates
Headline 124 223 50,18 (2 307) (1,12)
earnings/(loss)
Year to Year to
30 June 2007 30 June 2006
Earnings and distribution per
combined unit
Headline earnings/(loss) per 50,18 (1,12)
combined unit (cents)
Distribution per combined unit 114,00 103,00
(cents)
Earnings and distribtuion per
share
Earnings per share before equity 214,40 128,83
portion of debenture interest
(cents)
Distribution per share (cents) 2,10 2,07
R`000
Distributions to combined
unitholders
Debenture interest debt portion 104 244 100 140
Debenture interest equity 156 139 112 332
portion
Dividends 5 208 4 250
Total distribution 265 591 216 722
Segmental information
Property Listed Trading Property
stock
Manage- Invest- Proper- Invest-
ment ments ties ments
stock
trading
2007
R`000
Primary segment
Revenue
Rentals 428 843 - - -
Financing fees - - - -
Management fees 24 810 - - -
Interest distributions - - - 88 953
Sale of investment - 48 301 - -
held-for-trade
Sale of trading - - 56 829 -
properties
Total revenue 453 653 48 301 56 829 88 953
R`000
Segment results
Profit before taxation 597 873 7 249 (5 741) 88 953
and distribution to
unitholders
597 873 7 249 (5 741) 88 953
Segmental information (continued)
Transfer Bridging Agent`s Corporate Total
duty
finance finance commission
2007
R`000
Primary segment
Revenue
Rentals - - - - 428 843
Financing fees 7 971 28 513 10 433 - 46 917
Management fees - - - - 24 810
Interest - - - - 88 953
distributions
Sale of - - - - 48 301
investment held-
for-trade
Sale of trading - - - - 56 829
properties
Total revenue 7 971 28 513 10 433 - 694 653
R`000
Segment results
Profit before 2 883 10 311 3 942 89 621 795 091
taxation and
distribution to
unitholders
2 883 10 311 3 942 89 621 795 091
Segmental information (continued)
Property Listed Trading Property
stock
Manage- Invest- Proper- Invest-
ment ments ties ments
stock
trading
2006
R`000
Primary segment
Revenue
Rentals 277 581 - - -
Financing fees - - - -
Management fees 43 715 - - -
Interest distributions - - - 77 015
Sale of investment - 5 108 17 000 -
held-for-trade
Sale of trading 32 900 - - -
properties
Total revenue 354 196 5 108 17 000 77 015
R`000
Segment results
Profit before taxation 655 703 2 068 3 881 (79 184)
and distribution to
unitholders
655 703 2 068 3 881 (79 184)
Segmental information (continued)
Transfer Bridging Agent`s Corporate Total
duty
finance finance commission
2006
R`000
Primary segment
Revenue
Rentals - - - - 277 581
Financing fees 9 520 23 484 8 236 - 41 240
Management fees - - - - 43 715
Interest - - - - 77 015
distributions
Sale of - - - - 22 108
investment held-
for-trade
Sale of trading - - - - 32 900
properties
Total revenue 9 520 23 484 8 236 - 494 559
R`000
Segment results
Profit before 3 770 9 302 3 263 (244 872) 353 931
taxation and
distribution to
unitholders
3 770 9 302 3 263 (244 872) 353 931
Segment revenue and expenses
Revenue and expenses that are directly attributable to a segment are allocated
to those segments.
Expenses not directly attributable to a segment are allocated to the corporate
segment.
Condensed consolidated statement of changes in equity
Year to Year to
R`000 30 June 2007 30 June 2006
Balance at beginning of year 1 472 694 687 701
- as previously stated 1 472 694 694 267
- IFRS 3 transitional adjustment - (6 566)
Arising on issue and repurchase of 14 436 (2 455)
treasury shares during the year
Arising on issue of units during the 193 016 270 533
year
Arising on purchase of shares by (120 165) -
subsidiary company
Fair value adjustment on units issued 3 986 150 861
during the year
Minority share of current year - (660)
profits
Dividends paid to minority (2 795) -
Acquisition of subsidiary 7 188 -
Profit for the year 530 812 264 428
Reversal of notional taxation on
debenture interest
- equity portion 45 280 32 576
Distribution to unitholders: (156 139) (112 332)
debenture interest - equity portion
Distribution to unitholders: dividend (5 208) (4 250)
portion
Net profit on disposal of investments - 90 278
available-for-sale
Capital gains tax on sale of units - (2 218)
Fair value adjustment of investment - 98 232
available-for-sale
Balance at end of year 1 983 105 1 472 694
Condensed consolidated cash flow statement
Year to Year to
R`000 30 June 2007 30 June 2006
Cash generated from operations 283 345 201 158
Net finance costs (168 905) (99 489)
Dividend paid to minority interest (2 795) -
Investment income 88 953 77 015
Taxation paid (6 449) (3 498)
Cash flows from operating activities 194 149 175 186
before distribution to unitholders
Distributions to unitholders (241 003) (186 688)
Cash flows from operating activities (46 854) (11 502)
Cash flows from investing activities (718 480) (769 223)
Cash flows from financing activities 765 647 786 432
Net increase in cash and cash 313 5 707
equivalents
Cash and cash equivalents at 25 302 30 017
beginning of year
Deconsolidation of Siyathenga - (10 422)
Cash and cash equivalents at end of 25 615 25 302
year
Additional informaton for investors (unaudited)
The loan stock equity structure enables investors to participate in commercial
property investment and benefit from the cash flow arising from the net rentals
generated by the property portfolios. The structure is unique to South Africa.
International Financial Reporting Standards have been established in an attempt
to find a common base to compare the financial performances of companies and do
not take into account the unique characteristics of the South African loan stock
structure. This report is to enable investors to assess the cash generated from
rentals and other cash-generating activities, excluding the non-cash adjustments
required by International Financial Reporting Standards, and thereby to
determine the cash generated for investors` distributable earnings per unit.
Distributable earnings (unaudited)
Year to Year to
R`000 30 June 2007 30 June 2006
Revenue 601 355 448 867
Net building costs (84 686) (63 915)
Administrative costs (103 399) (76 191)
Net profit on disposal of investments 15 401 1 034
held-for-trade
Interest received 32 859 14 395
Finance costs (201 764) (113 884)
Cash share of loss from associates (12) -
STC on dividend declared/S.A. Normal (7 487) (3 936)
Taxation
Consolidation adjustment for BEE 22 906 7 337
finance costs
Removal of consolidation of Monyetla 7 487 -
Property Fund
Outside shareholders (259) (1 489)
Distributable earnings 282 401 212 218
Investor distributable earnings per
combined unit:
Weighted average number of combined 247 580 205 236
units in issue (`000)
Distributable earnings per combined 114,05 103,40
unit (cents)
Net asset value per combined unit
with iFour Properties Limited
and Siyathenga Property Fund Limited 1 363 1 187
investments carried at market value
Opening share price (cents) 1 200 1 030
Closing share price (cents) 1 480 1 200
Distribution (cents) 114 103
Total return (%) 33 27
Notes to the financial statements
1. Basis of preparation
The audited interim financial report has been prepared in accordance with
International Financial Reporting Standards ("IFRS"), IAS 34 Interim Financial
Reporting and in accordance with the requirements of the Companies Act, 1973.
The basis of preparation is consistent with the group`s annual financial
statements for the year ended 30 June 2006.
2. Related-party transactions
Related-party transactions concluded during the reporting period were concluded
at arm`s length terms as would be negotiated between unrelated willing parties.
3. Management is of the opinion that the group is financially sound and operates
as a going concern.
4. Prior year revenue has been restated to reflect the gross sales price of
investments held-for-trade sold, with the cost of investments held-for-trade
sold disclosed in the income statement.
Distribution declared per combined unit
Timetable of events
Event Date
a. Last date to trade cum Friday, 5 October 2007
distribution
b. Combined units trade ex Monday, 8 October 2007
distribution
c. Record date for unitholders to Friday, 12 October 2007
participate in the distribution
d. Payment of distribution to Monday, 15 October 2007
unitholders
e. Combined unit certificate may not Monday, 8 October 2007 to
be
rematerialised or dematerialised Friday, 12 October 2007
Annual general meeting - Wednesday, 17 October at 10:00 am.
3rd Floor, Pangbourne House
Ordinary dividend - cents per unit 1.216
Debenture interest - cents per unit 60.784
Total distribution - cents per combined unit 62.000
Related-party transactions
Transactions between the Company and its subsidiaries, which are related parties
of the Company, have been eliminated on consolidation and are not disclosed in
this note. Details of transactions between the Group and other related parties
are disclosed below.
All transactions were conducted at arm`s length.
Trading transactions
Day-to-day management of the iFour Properties Limited, Siyathenga Property Fund
Limited and Monyetla Property Funds Limited portfolios has been carried out by
Pangbourne Properties Limited. Pangbourne Properties Limited owns 41% of iFour
Properties Limited, 45% of Siyathenga Property Fund Limited and 61% in Monyetla
Property Fund Limited.
2007 2006
R`000 R`000
The following fees have been earned from
iFour Properties Limited:
- Management fees 14 116 13 153
- Directors` fees 218 375
- Sales of developed property in return for - 32 900
shares in Paramount Property Limited (refer
note 18)
14 334 46 428
The following distribution has been earned
from iFour Properties Limited:
- Interest distributions received 58 747 58 660
The following amount is owed by iFour 1 658 509
Properties Limited:
A fee for the use of the PROPS 4 500 -
Securitisation platform has been paid to
iFour
The following fees have been earned from
Siyathenga Property Fund Limited:
- Introduction and facilitation fees - 15 070
- Promoter`s fees - 8 000
- Management fees 10 237 7 042
- Directors` fees 335 265
10 572 30 377
The following distribution has been earned
from Siyathenga Property Fund Limited:
- Interest distributions received 30 206 17 114
The following amount is owed by Siyathenga 877 15 482
Property Fund Limited:
The following fees specific to the TRFPT
transaction which were capitalised to
investment
properties were paid to a former director:
Success fee - 3 510
Consulting fee - 760
- 4 270
Contingent liabilities
The Group has signed suretyships in favour of banks in respect of loans of R462
654 000 (2006: R58 000 000).
Commitments
There are contracted commitments for capital expenditure of R741 300 000 (2006:
R145 305 000). These will be funded from the Group`s resources.
The operating lease commitment for subsidiaries` premises amounts to R531 492
for the next 12 months.
Post-balance sheet events
PROPS Series 2
On 4 July 2007, a new PROPS Series 2 preference share of 1 cent was issued to
Pangbourne Properties Limited by iFour Properties Limited. This was done in
order to facilitate a new series of segregated notes to be issued on the Bond
Exchange of South Africa. PROPS Series 2 is a multi-borrower commercial mortgage
securitisation series. The overall PROPS programme limit was increased from R2
billion to R5 billion.
Series 2 is completely separate from iFour`s PROPS Series 1, having its own pool
of assets held as security for the notes to be issued. Rand Merchant Bank is the
series programme manager. The subsidiaries of Pangbourne Properties Limited,
iFour Properties Limited, Siyathenga Property Fund Limited and Monyetla Property
Fund Limited are all borrowers from PROPS in Series 2. All the transaction
documents for Series 2 have been signed and bonds of R1,56 billion in total for
all borrowers were issued on 4 July 2007.
Panhold (Proprietary) Limited repaid borrowings from Absa Bank of R429 million
and borrowings from Investec Bank of R60 million and has replaced them with a
loan from PROPS through the issuance of bonds on the Bond Exchange of South
Africa.
The consolidated financial statements for the year have been audited by Deloitte
& Touche and their accompanying unmodified report, as well as their unmodified
audit report on this set of financial information, is available for inspection
at the Company`s registered office.
Commentary
Results
Pangbourne has shown a double-digit growth in distributions of 10,7%. This
sustainable distribution growth has been driven by the favourable market
conditions and the growth in the unique octopus strategy. The year`s
distribution of 114 cents is made up of income from the directly held portfolio,
distributions from the specialised associates, sale of properties and
investments held for trade and transactional fee income. As the octopus strategy
develops, the transactional income becomes more achievable on an annuity basis
because of the number of transactions undertaken by the specialised funds
serviced by Pangbourne.
Property management
The occupancy level of Pangbourne`s directly held portfolio was at 98,4% at 30
June 2007 and reflects the buoyant property market. With current rentals still
not supporting adequate returns on new property investments, market conditions
are expected to remain favourable for growth.
Strategy
Pangbourne`s octopus strategy is unique in the South African property market
although in line with international property companies and funds. The associated
house of specialised funds with central administrative support allows investors
to select the sector of the property market in which they wish to invest while
enjoying the synergistic benefits of the combined support structures.
Pangbourne will continue to look for opportunities to develop and grow the
octopus to achieve its objective of sustainable growth in distributions in the
long term.
Transactions for the year
Acquisitions and developments
8 properties totalling R440 million were acquired during the year and
developments and improvements to the value of R995 million are currently in
progress on these properties. A further 6 properties were acquired at a cost of
R192 million. A total of 9 properties with a value of R947 million are in the
process of being transferred and agreements to the value of R1 109 million have
been concluded to develop these and additional properties.
Securitisation
The first commercially backed securitisation based on a single note supported by
a multi-borrower was undertaken by Pangbourne and its associated companies
during the financial year. R1,5 billion was raised with 73% of the notes being
AAA rated.
Unlisted fund (Enigma)
The shortage of property stock in the market has resulted in management
exploring other avenues to grow the property portfolio. Pangbourne has forged
strong relationships with a number of prominent developers and has put together
the unlisted property fund, Enigma, with Edge Properties. Enigma will have first
right of refusal over the developments undertaken by Edge Properties. The long-
term strategy is to list Enigma as another tentacle of the octopus.
Black economic empowerment
Yard Capital increased its stake to 9% by utilising the equity growth in the
initial transaction. Pangbourne remains committed to transformation and is
actively looking at innovative structures to achieve meaningful black ownership
levels without diluting distributions to unitholders.
Monyetla (previously Calulo Property Fund)
Pangbourne initially took a 63,3% stake in Monyetla and injected a R450 million
property portfolio of quality office properties into the fund. Following a
rights issue, Pangbourne`s stake has reduced to 61%. Monyetla will be the office
fund in Pangbourne`s octopus strategy. Plans are under way to further bulk up
the portfolio as well as reducing Pangbourne`s stake to below 5%.
Valuations
One sixth of the properties are valued on a rotational basis every six months by
an independent external valuer registered as a professional valuer in terms of
the Property Valuers Profession Act, 2000 (Act 47 of 2000). Valuations have been
consistently applied on a discounted cash flow basis, using a risk-free rate,
adjusted for a property risk factor. Further allowances are made for, amongst
others, vacancies, rental reversions to market, tenant installations and capital
expenditure. The valuations have been assessed at executive committee, audit
committee and board level for rationale, consistency and accuracy.
The future
Pangbourne is celebrating its 20th year as a JSE-listed company. We have not
only survived the traumatic 90s but have emerged as one of the major list
property loan stocks. Commercial property is in an upward cycle and Pangbourne
is well placed to capitalise on the opportunities that are being presented by
the overall growth in the economy. We expect to continue our growth in
distributions to unitholders for the foreseeable future.
P L Campbell, Chairman
C M Hutchinson, CEO
30 August 2007
Directors:
P L Campbell (Chairman), J B Gibbon, C K Hickling, B D Hopkins,
C M Hutchison (CEO)*, W J Midgley*, D J Kennedy, Y K N Molefi,
A J W L Richards, B M H Tsita, R N Wesselo* *Executive
Secretary: J J Groenewald
382 Jan Smuts Avenue, Craighall, 2196
Transfer secretaries:
Computershare Investor Services 2004 (Pty) Limited,
70 Marshall Street, Johannesburg, 2000
PO Box 61051, Marshalltown, 2107
www.pangbourne.co.za
Date: 30/08/2007 15:43:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
