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MYT
MYT
MYT - Monyetla - Reviewed Interim Results For The Six Months
Ended 31 December 2007 and dividend declaration
Monyetla Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/006274/06)
Share code: MYT & ISIN: ZAE000093761
("Monyetla" or "the Company")
Reviewed Interim Results for the six months ended 31 December 2007
Distribution declared per linked unit
Notice is hereby given of the declaration of an interim distribution of 11,80
comprising 11,5 cents for the period under review and 0,3 cents for the
period 23 to 30 June 2007.
Timetable of events
Event Date
a. Last date to trade cum distribution Thursday, 13 March 2008
b. Linked units trade ex distribution Friday, 14 March 2008
c. Record date for unitholders to Thursday, 20 March 2008
participate
in the distribution
d. Payment of distribution to Tuesday, 25 March 2008
unitholders
e. Linked unit certificates may not be Friday, 14 March 2008 to
rematerialised or dematerialised Thursday, 20 March 2008
(both days inclusive)
Income Statement (Condensed Consolidated)
Reviewed Unaudited Audited
Six months Six months Year
ended ended to
R`000 31.12.07 31.12.06 30.06.07
Revenue 72 807 37 796 81 191
Operating lease income 70 527 35 747 76 746
Straight line operating lease 2 280 2 049 4 445
adjustment
Direct property expenses (18 320) (8 998) (19 529)
Other operating expenses (7 067) (3 625) (5 756)
Net fair value adjustment of 36 906 (85 733) (54 361)
investment properties
Straight line operating lease (2 280) (2 049) (4 445)
adjustment
Fair value adjustment of 39 186 (83 684) (49 916)
investment properties
Operating profit/(loss) 84 326 (60 560) 1 545
Finance income 665 268 419
Finance costs (22 164) (16 172) (36 486)
Movement in fair value of (4 202) 4 200 21 975
derivative financial
instruments
Net amortisation of debenture 2 571 87 339
premium
Distribution to linked (23 744) (7 220) (15 785)
unitholders
Profit/(loss) before taxation 37 452 (79 397) (27 993)
Taxation (10 579) 29 136 15 063
Profit/(loss) for the period 26 873 (50 261) (12 930)
Attributable to:
Equity holders of the Company 26 873 (50 261) (12 930)
Basic and diluted 13,00 (55,72) (13,91)
earnings/(loss) per share
(cents)
Notes to the Financial Statements
1. Basis of preparation
The interim financial report has been prepared in accordance with IAS 34 -
Interim Financial Reporting, the requirements of the Companies Act of South
Africa and JSE Listings Requirements. The basis of preparation is consistent
with the group`s most recent annual financial statements.
The Directors have changed the group`s investment property revaluation policy
from director`s internal valuations being performed at 31 December and 30
June each year (with a third of the portfolio being revalued externally over
a three year period) to an annual external revaluation at 30 June for the
entire portfolio and a fair value assessment at 31 December.
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. Contingent liabilities
There are no material contingencies at balance sheet date.
4. Capital commitments
There is approximately R1 million of capital expenditure contracted for at
balance sheet date, and approximately R1 million of capital expenditure
approved but not yet contracted for, which will be funded from available
funds.
The operating lease commitment for rented premises from 1 January 2008
amounts to R467 000.
The operating lease commitment for rented equipment from 1 January 2008
amounts to R189 000.
5. Subsequent events
Ms Cheryl Wendelken resigned as Managing Director and director of the Company
and Mr Rob Wesselo was appointed as her successor with effect from 1 February
2008. An exit package of
R1 017 000 has been agreed for Ms Cheryl Wendelken who is leaving the
employment of the Company at the end of February 2008.
Mr Jacques van Wyk was appointed as a non-executive director with effect
from 1 February 2008 following the resignation of Mr Ian Smith from the board
on the 4th February 2008 and Ms Tebogo Maenetja on the 11th February 2008.
Subsequent to 31 December 2007 a decision was taken to sell 2 of Monyetla`s
buildings, Sinoville (fair value R69,4 million) & Brits (fair value R5,995
million).
JHI have taken over the property management from Pangbourne Properties
Limited effective
1 February 2008.
6. Review conclusion
PricewaterhouseCoopers Inc. have reviewed the condensed consolidated interim
financial results for the period ended 31 December 2007 and their review
conclusion is available for inspection at the Company`s registered office.
Balance Sheet (Condensed Consolidated)
Restated
Reviewed unaudited Audited
As at As at As at
R`000 31.12.07 31.12.06 30.06.07
ASSETS
Non-current assets 1 085 261 522 220 1 036 914
Investment properties 1 043 948 496 134 1 004 480
Straight line operating 15 542 10 866 13 262
lease receivable
Investment properties at 1 059 490 507 000 1 017 742
fair value
Equipment, furniture and 290 - 304
fittings
Long-term other receivables 2 326 3 969 1 567
Derivative financial 15 559 1 986 2 505
instruments
Deferred tax asset - 9 265 -
Loans to participants of the 7 596 - 14 796
Unit Purchase Trust
Current assets
Trade and other receivables 10 127 5 249 12 656
Derivative financial - - 17 256
instruments
Cash and cash equivalents 6 244 7 419 15 161
Total assets 1 101 632 534 888 1 081 987
EQUITY
Capital and reserves
attributable to shareholders
Share capital and share 5 943 943 3 372
premium
Accumulated profits 60 580 (427) 36 278
Total equity 66 523 516 39 650
LIABILITIES
Non-current liabilities 981 422 513 164 829 770
Borrowings 429 800 325 816 285 990
Debentures and debenture 536 234 187 348 538 972
premium
Derivative financial - - -
instruments
Deferred tax liability 15 388 - 4 808
Current liabilities 53 687 21 208 212 567
Trade and other payables 27 792 12 418 13 052
Distribution payable 24 377 7 431 633
Borrowings 1 518 1 359 198 882
Total equity and liabilities 1 101 632 534 888 1 081 987
Cash Flow Statement (Condensed Consolidated)
Reviewed Unaudited
Six months Six months Audited
ended ended Year to
R`000 31.12.07 31.12.06 30.06.07
Cash generated from 69 038 15 061 40 466
operations
Finance costs (21 977) (16 172) (36 113)
Finance income 665 268 419
Taxation paid (20) (40) (153)
Distributions to linked - (7 909) (23 272)
unitholders
Cash flows from operating 47 706 (8 792) (18 653)
activities
Cash flows from investing (2 579) (1 707) (495 107)
activities
Cash flows from financing (54 044) 15 821 528 183
activities
Net (decrease)/ increase (8 917) 5 322 14 423
in cash and cash
equivalents
Cash and cash equivalents 15 161 738 738
at beginning of year
Cash and cash equivalents 6 244 6 060 15 161
at end of year
Distributable Earnings
Six months Six months Year
ended ended to
R`000 31.12.07 31.12.06 30.06.07
Profit/(loss) for the period 26 873 (50 261) (12 930)
Revaluation of investment (39 186) 83 684 49 916
properties
Amortised borrowing costs 187 - 270
Movements in fair value of 4 202 (4 200) (21 975)
derivative financial
instruments
Distribution to linked 23 744 7 220 15 785
unitholders
Net amortisation of debenture (2 571) (87) (339)
premium
Taxation 10 579 (29 136) (15 063)
Distributable earnings for 23
June to 30 June 2007 which
will be incorporated into the
interest payment period ending
31 December 2007 633 - (633)
Distributable earnings 24 461 7 220 15 031
Investors distributable
earnings per linked unit
Weighted average number of 206 472 90 174 90 390
linked units in issue
Distributable earnings per 11,85 8,01 16,63
linked unit (cents)
Opening share price (cents) 270 240 240
Closing share price (cents) 380 330 270
Capital return (cents) 110 90 30
Distribution (cents) 11,80 8,0 16,6
Total return (cents) 121,80 98,00 46,60
Total return for the period 45% 41% 19%
(%)
Segmental Information
REVIEWED
December 2007
R`000 Retail Office Industrial Other Total
Business segment
Revenue 19 416 43 816 9 575 - 72 807
Operating lease 19 158 41 919 9 450 - 70 527
income
Straight-line
operating
lease adjustment 258 1 897 125 - 2 280
Operating 22 332 53 326 13 734 (5 84 326
profit/(loss) 066)
UNAUDITED
December 2006
Business segment
Revenue 20 897 9 274 7 625 - 37 796
Operating lease 19 776 8 884 7 087 - 35 747
income
Straight-line
operating
lease adjustment 1 121 390 538 - 2 049
Operating loss (33 051) (17 816) (9 693) - (60 560)
AUDITED
June 2007
Business segment
Revenue 40 597 23 254 17 340 - 81 191
Operating lease 38 420 22 341 15 985 - 76 746
income
Straight-line
operating
lease adjustment 2 177 913 1 355 - 4 445
Operating 2 952 (12 712) 17 081 (5 1 545
profit/(loss) 776)
Reconciliation between earnings/(loss) and headline earnings
Reviewed Unaudited Audited
Six months to Six months to Year to
31.12.07 31.12.06 30.06.07
Cents Cents Cents
R`000 per unit R`000 per R`000 per
unit unit
Net 26 873 13,00 (50 261) (12930)
profit/(loss) (55,72) (13,91)
for the
period
Adjustments
Net fair (26204) (12,69) 60 871 67,50 38 597 41,56
value
adjustment of
investment
properties
after tax
Distribution 23 744 11,50 7 220 8,01 15 785 16,99
to linked
unitholders
Headline 24 413 11,81 17 830 19,79 41 452 44,64
earnings per
linked unit
Aggregate tax (10 703) 24 862 15 764
effect of
adjustments
Reviewed Unaudited Audited
Six months Six months to Year to
to
31.12.07 31.12.06 30.06.07
Headline earnings per 11,81 19,79 44,64
linked unit (cents)
Earnings/ (loss) per 24,51 (47,73) 3,07
linked unit (cents)
Net asset value per 292 210 280
linked unit (cents)
Headline earnings per 0,32 11,76 27,63
share (cents)
Earnings/(loss) per 13,00 (55,72) (13,91)
share (cents)
Net asset value per 33 1 20
share (cents)
Statement of changes in equity
(Condensed consolidated)
Share Share Accumulated
R`000 capital premium Total
profit/(loss)
Balance at 1 902 41 49 834 50 777
July 2006
restated
As previously 902 41 51 717 52 660
reported
Prior year - - (1 883) (1 883)
adjustment
Loss for the - - (50 261) (50 261)
period
Balance at 31 902 41 (427) 516
December 2006 -
unaudited
Issue of linked 1 163 640 - 1 803
units
Profit for the - - 37 331 37 331
period
Transfer of
amortised
debenture
premium - 626 (626) -
(cumulative)
Balance at 30 2 065 1 307 36 278 39 650
June 2007 -
audited
Profit for the - - 26 873 26 873
period
Transfer of - 2 571 (2 571) -
amortised
debenture
premium
Balance at 31 2 065 3 878 60 580 66 523
December 2007 -
reviewed
Commentary
Financial results
For the period ended 31 December 2007, an interim distribution of 11,80 cents
has been declared comprising 11,5 cents for the period under review and 0,3
cents for the period 23 to 30 June 2007.
The reviewed figures for the six months ended 31 December 2007 are not
comparable with that of the period ended 31 December 2006 as the property
portfolio was substantially increased by the introduction into the portfolio
of 24 properties through a bulking up programme undertaken with Pangbourne
Properties Limited.
In addition to the bulk up of the portfolio a R362 million securitisation
programme was entered into, which programme funding is fully hedged for the
five year term. The programme was introduced prior to the recent increases in
interest rates and Monyetla will benefit going forward from these favourable
fixed rates on a substantial portion of its debt. The gearing level of the
fund is currently 43,9% and of the loans outstanding as at 31 December 2007,
106,7% has been hedged.
Property report
Management successfully renewed expiring leases thereby maintaining the
fund`s high occupancy rate. As at 31 December 2007, the occupancy rate was
98,1%. In the upcoming twelve months, 27% of leases in value will expire.
Management has already commenced negotiations with material expiries and is
confident of successful renewals.
Arrears remain a strong management focus and the board is continuously
reviewing policies and procedures regarding the placing of tenants and the
collection of rent.
Following the strategic decision by Pangbourne Properties Limited to
terminate its property management service to associated listed entities, this
function has been, with effect from 1 February 2008, outsourced to JHI.
Directorate
Ms Cheryl Wendelken resigned as Managing Director and director of the Company
and Mr Rob Wesselo was appointed as her successor with effect from 1 February
2008. The board extends thanks to Ms Wendelken for her contribution to the
company and wishes her all the best in her new endeavours.
Mr Jacques van Wyk was appointed as a non-executive director with effect from
1 February 2008 and also serves on the Audit Committee following the
resignation of Mr Ian Smith from the board on the 4th February 2008. Ms
Tebogo Maenetja also tendered her resignation on the 11th February 2008 and
the board is grateful to both independent directors for their contribution
to the Company`s growth over the period they served on the board.
Prospects
The portfolio is weighted towards high quality office properties in
established office nodes in Northern Johannesburg. These properties
demonstrate strong office fundamentals in terms of design, maintenance
requirements and tenant flexibility. A lack of available zoned and serviced
commercial land in this area bodes well for continued demand.
Strategy changes in Monyetla`s holding company, Pangbourne Properties
Limited, may bring about a reassessment of Monyetla`s gearing levels and the
reviewing the suitability of certain properties within the property
portfolio.
On behalf of the Board
M Faku R N Wesselo
Chairman Managing Director
19 February 2008
Registered office: Monyetla Property Fund Limited, 2nd Floor, Pangbourne
House, 382 Jan Smuts Avenue, Craighall, 2196
Directors: M Faku (Chairman), M K Diale, J B Gibbon, C M Hutchison, R N
Wesselo*, J J van Wyk, G P Sequeira(alternate) *Executive
Company Secretary: J M Parratt Transfer
Secretaries: Computershare Investor Services 2004 (Proprietary) Limited, 70
Marshall Street, Johannesburg, 2001. PO Box 61051, Marshalltown, 2107
Date: 19/02/2008 17:13:13 Produced by the JSE SENS Department.
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