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SYA
SYA
SYA - Siyathenga - Acquisition Of Boardwalk Two And Withdrawal Of
Cautionary Announcement
Siyathenga Property Fund Limited
(Registration number 2004/005198/06)
Share code: SYA
ISIN: ZAE00069530
("Siyathenga")
ACQUISITION OF BOARDWALK TWO AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
INTRODUCTION
Further to the announcement regarding the acquisition of the Boardwalk Two
property by Siyathenga through a wholly owned subsidiary, and the cautionary
announcement released on SENS on 18 October 2007 and in the press on 19
October 2007, Siyathenga linked unitholders ("unitholders") are advised of
the valuation of the property, the forecast financial information relating
to the property and the notice of general meeting.
VALUATION OF BOARDWALK TWO
The valuation has been performed by Gensec Property Services Limited trading
as JHI ("JHI"), an independent registered valuer as per the JSE Listings
Requirements. JHI is of the opinion that the market value of the property,
as at 24 October 2007, was R265,6 million (excluding value-added tax) and an
estimated value of R503,8 million (excluding value-added tax), after
completion of the development on 1 May 2008. Extracts from their valuation
report will be included in the circular to unitholders.
3. FORECAST FINANCIAL INFORMATION ON BOARDWALK TWO
The forecast revenue, operational net income, net profit after tax and
distributable earnings of Boardwalk Two for the year ending 30 June 2008 and
the year ending 30 June 2009 are set out in the table below, under Scenario
1 and 2.
The forecast financial information is the responsibility of the directors of
Siyathenga.
Scenario 1
Scenario 1 is presented on the assumption that the acquisition is funded
with debt of R140,387 million and the issue of 37 160 598 new Siyathenga
linked units at an issue price of 874 cents per linked unit in terms of the
general authority to issue Siyathenga linked units for cash and a vendor
placement in terms of JSE Listings Requirements.
30 June 30 June
2008 2009
R`000 R`000
Revenue 7 903 48 483
Straight line operating 1 883 10 139
lease adjustment
Net building costs (1 108) (6 836)
Profit before financing 8 678 51 786
costs and taxation
Finance costs (2 546) (15 232)
Debenture interest (4 249) (26 415)
distributed to unitholders
Profit before tax 1 883 10 139
Taxation - Deferred tax (546) (2 940)
Profit for the period / year 1 337 7 199
Linked unitholders 4 249 26 415
distributable earnings
Earnings per share (cents) 21.53 19.37
Diluted earnings per share 21.53 19.37
(cents)
Headline earnings per share 21.53 19.37
(cents)
Diluted headline earnings 21.53 19.37
per share (cents)
Earnings per linked unit 89.95 90.46
(cents)
Diluted earnings per linked 89.95 90.46
unit (cents)
Headline earnings per linked 89.95 90.46
unit (cents)
Distributable earnings per 63.48 66.04
linked unit (cents)
Weighted number of linked 6 210 408 37 160 598
units
Scenario 2
Scenario 2 is presented on the assumption that the acquisition is funded
with debt of R465 million only, and no linked units being issued.
30 June 30 June
2008 2009
R`000 R`000
Revenue 7 903 48 483
Straight line operating 1 883 10 139
lease adjustment
Net building costs (1 108) (6 836)
Profit before financing 8 678 51 786
costs and taxation
Finance costs (8 432) (50 453)
Debenture interest - -
distributed to unitholders
Profit before tax 246 1 333
Taxation - Deferred tax (71) (387)
Profit for the period / year 175 946
Linked unitholders loss (1 637) (8 806)
Earnings per share (cents)* - -
Diluted earnings per share - -
(cents)*
Headline earnings per share - -
(cents)*
Diluted headline earnings - -
per share (cents)*
Earnings per linked unit - -
(cents)*
Diluted earnings per linked - -
unit (cents)*
Headline earnings per linked - -
unit (cents)*
Distributable earnings per - -
linked unit (cents)*
* No linked units are issued under Scenario 2, debt finance only.
Assumptions:
- the economic conditions and political stability in South Africa will not
materially deteriorate;
- there are no material unforeseen economic factors that will affect the
tenants` abilities to meet their
commitments in terms of the existing lease agreements;
- revenue to grow by 8.29% per annum;
- contracted revenue is based upon existing lease agreements;
- the forecast income statement has been compiled in accordance with
Siyathenga`s current accounting
principles and International Financial Reporting Standards, on an
aggregated basis;
- where a lease expires in respect of existing tenants within the forecast
period, this lease will be renewed or a new
tenant will be secured within a reasonable time period ranging from one
to six months, on average, at fair market
rates. It has been assumed that new leases will be concluded at rentals
agreed by the rental committee;
- on a portfolio basis, an appropriate debt provision per tenant has been
raised against total gross income;
- operating expenditure has been determined after taking into account
historical costs of the existing Boardwalk Shopping Centre;
- interest payable on the debt funding will be at 10.85% per annum;
- the forecast is prepared on the assumption that the net income of the
property accrues to Siyathenga with
effect from 1 May 2008; and
- company tax does not exceed 29%.
2. Uncontracted rental income amounts to 78% of revenue for years ended 30
June 2008 and 30 June 2009.
3. The weighted average rental per square metre for the 40 212 square
metre rentable space is R97.13 and
R 99.60 for the year ending 30 June 2008 and 30 June 2009 respectively.
The above forecast financial information has been reviewed by the reporting
accountants` and their unqualified report is included in the circular to
unitholders and will lie open for inspection.
4. DOCUMENTATION
Unitholders are advised that a circular containing detail of the Boardwalk
Two acquisition and development, has been posted on Thursday, 29 November
2007.
5. GENERAL MEETING
The general meeting of shareholders will take place on Friday, 14 December
2007 at 10:00, on the 3rd Floor, Pangbourne House, 382 Jan Smuts Avenue,
Craighall, Johannesburg.
6. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
The cautionary announcement is hereby withdrawn and caution is no longer
required when dealing in the Company`s linked units.
Craighall
29 November 2007
Sponsor
Deloitte and Touche Sponsor Services (Pty) Limited
Valuer
JHI
Reporting accountants
Deloitte & Touche
Date: 29/11/2007 17:01:38 Produced by the JSE SENS Department.
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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.
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