| Fri 16 May 2008, 7:00 | | MIP - Merchant - Unaudited Interim Report For The |
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MIP
MIP
MIP - Merchant - Unaudited Interim Report For The Six Months Ended 31 March 2008
And Dividend Declaration
Merchant & Industrial Properties Limited
(Formerly Marshalls Limited)
Code: "MIP" & ISIN: "ZAE000102265
("Merchant")
UNAUDITED INTERIM REPORT FOR THE SIX MONTHS ENDED 31 MARCH 2008 AND DIVIDEND
DECLARATION
INCOME STATEMENT
Six Restated Nine
months Six months months
ended ended ended
31.03.2008 30.06.2007 30.09.2007
R`000 R`000 R`000
Confirming fees and interest 70 163 207
Investment income 224 441 559
Rental and parking income 8,727 8,172 12,472
Cash flows inherent in leases 8,667 8,145 12,396
and parking income
Lease smoothing effect 60 27 76
Revenue 9,021 8,776 13,238
Profit before interest 3,300 3,284 5,100
Interest received 374 339 464
Surplus on revaluation of 331 415 369
derivative instruments
Interest expense (1,190) (1,435) (2,108)
Profit after interest 2,815 2,603 3,825
Unrealised surplus on - - 19,216
revaluation of investment
properties
Realised net loss on disposal (1,024) (230) (230)
of listed investments
Realised net loss on disposal - (40) (40)
of investment properties
Cost of corporate restructuring (25) (405) (589)
1,766 1,928 22,182
Profit before taxation
Taxation 349 1,180 7,065
Profit for the period 1,417 748 15,117
Earnings per share (cents) 8.2 4.3 87.0
Headline earnings per share 14.1 9.1 10.2
(cents)
Dividend per share - ordinary 9.0 7.0 7.0
(cents)
Dividend per share - special - 12.0 12.0
(cents)
Shares in issue 17,372,300 17,372,300 17,372,300
Net asset value per share 701 599 678
(cents)
Reconciliation of headline
earnings net of taxation
Profit for the period 1,417 748 15,117
Unrealised surplus on - - (14,184)
revaluation of investment
properties
Realised net loss on disposal 1,024 230 230
of listed investments
Realised net loss on disposal - 607 607
of investment properties
Headline earnings for the 2,441 1,585 1,770
period
ABRIDGED BALANCE SHEET
Investment properties 117,795 98,469 117,734
Listed investments 31,452 28,829 27,927
Property, plant and equipment 3,034 3,159 3,147
Derivative instruments 457 172 126
Non current amortised lease 503 387 444
receivables
Current assets 1,673 2,519 2,051
Bank and cash balances 4,859 7,819 6,721
Total assets 159,773 141,354 158,150
Equity and reserves 121,700 104,077 117,839
Interest bearing borrowings 15,631 16,428 16,164
Deferred taxation 18,561 13,044 18,389
Current liabilities 3,881 3,712 4,865
Bank overdraft and short term - 4,093 893
borrowings
Total equity & liabilities 159,773 141,354 158,150
STATEMENT OF CHANGES IN EQUITY
Stated capital 26,809 26,809 26,809
Non-distributable reserves 65,614 51,901 65,616
Balance at beginning of period 65,616 51,882 51,882
As previously reported 65,616 60,788 60,788
Prior year adjustment - (8,906) (8,906)
Transfer to distributable - - (97)
reserves
Transfer from distributable - - 13,626
reserves
Currency translation movement (2) 19 205
Distributable reserves 29,277 25,367 25,414
Balance at beginning of period 25,414 25,744 25,744
As previously reported 25,414 26,011 26,011
Prior year adjustment - (267) (267)
Profit for the period 1,417 748 15,117
Transfer of property - - (13,620)
revaluation to non-
distributable reserves
Transfer from non-distributable - - 97
reserves
Transfer to non-distributable - - (6)
reserves
Unrealised surplus on 2,952 1,946 1,153
revaluation of listed
investments
Realised deficit on disposal of 1,057 230 230
listed investments
Dividends paid (1,563) (3,301) (3,301)
Total equity and reserves at 121,700 104,077 117,839
the end of the period
SUMMARISED CASH FLOW STATEMENT
Cash inflow / (outflow) from 3,183 4,352 8,159
operating activities
Net interest and taxation paid (1,950) (2,179) (3,367)
Operating cash inflow / 1,233 2,173 4,792
(outflow)
Dividends paid (1,563) (3,301) (3,301)
Net cash inflow / (outflow) (330) (1,128) 1,491
from operating activities
Net cash inflow / (outflow) (639) 3,677 3,160
from investing and financing
activities
Net cash inflow / (outflow) for (969) 2,549 4,651
the period
SEGMENTAL ANALYSIS
Revenue
Properties division 8,727 8,172 12,472
Confirming division 70 163 207
Investment division 224 441 559
9,021 8,776 13,238
Profit before interest
Properties division 3,018 2,827 4,398
Confirming division 42 107 290
Investment division 240 350 412
3,300 3,284 5,100
MERCHANT & INDUSTRIAL PROPERTIES LIMITED
Review of operating results
The unaudited results for the six months ended 31 March 2008 are for the changed
year end of September while the comparative interim period disclosed represents
the interim results based on the former year end. It was not considered
beneficial to amend the comparative period for this change. The results reflect
profit before interest of R3 300 000 (2007: R 3 284 000 restated). The bulk of
this profit remains derived from the group`s property division. Headline
earnings per share have increased to 14.1 cents from 9.1 cents restated for the
comparative period. Interest expense amounted to R 1 190 000 (2007: R 1 435 000
restated).
Property division
The group is confident that its letting profile should not change significantly
due to the increased risks facing the general economy. Although there are
indications of increased market risk due to tenants experiencing financial
difficulties, overall, the group`s portfolio remains well positioned and vacancy
levels are currently within acceptable norms. It is expected that the recent
increases in the prime interest rate should result in more property stock
entering the market. Consequently it is hoped that there will be a greater
probability to acquire new properties at more affordable yields as sellers are
expected to have to adjust their price expectations. As disclosed in the recent
press announcement, the group will shortly acquire Modern Tower Garage in Durban
for R6 400 000.
Investment division
The Group`s permanent portfolio of shares in foreign listed investments reflects
a market value in South African currency of R31 452 000 (2007: R 28 829 000
restated). Although international markets have recently been volatile the weaker
Rand has compensated for this market decline.
International Financial Reporting Standards
This report has been prepared in accordance with International Financial
Reporting Standards and complies with IAS 34 Interim Financial Reporting
Standards. Except for the revaluation of investment properties, the same
accounting policies were used as those applied in the annual financial
statements for the period ended 30 September 2007 in which these policies are
fully described.
The comparative interim period has been restated to disclose the effects of the
prior year adjustment of R9 173 000 made at 30 September 2007 relating to the
change in the deferred tax rate used on revaluations of investment properties
above cost. Profit for the period is restated to disclose the full historical
loss on the net disposal of listed investments while headline earnings has been
restated to comply with Circular 8/2007. The effect of the above on the relevant
per share statistics for the interim period ended 30 June 2007 can be summarised
as follows -
Restated Previously
disclosed
Earnings per share (cents) 4,3 6,2
Headline earnings per share (cents) 9,1 11,5
Net asset value per share (cents) 599 652
Dividend declaration
Notice is hereby given that an interim dividend of 7,0 cents per ordinary share
has been declared in respect of the six months ended 31 March 2008.
In accordance with the settlement procedures of Strate, Merchant has determined
that the last date to trade to participate in the interim dividend shall be
Friday, 30 May 2008. The shares will commence trading ex-dividend from Monday, 2
June 2008, and the record date will be Friday, 6 June 2008. Dividends will be
paid on Monday, 9 June 2008.
Share certificates may not be dematerialised, or rematerialised, between Monday,
2 June 2008 and Friday, 6 June 2008, both days inclusive.
16 May 2008
BY ORDER OF THE BOARD
DC Marshall, PN Lonsdale (Directors)
Sponsor
Sasfin Capital
Date: 16/05/2008 07:00:02 Produced by the JSE SENS Department.
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