| Wed 25 Jun 2008, 17:43 | | FVT - Fairvest - Reviewed Abridged Consolidated Group Financial Results |
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FVT
FVT
FVT - Fairvest - Reviewed Abridged Consolidated Group Financial Results
For The Year Ended 31 March 2008
FAIRVEST PROPERTY HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/005011/06)
("Fairvest" or "the company")
Linked unit code: FVT
ISIN: ZAE000034658
REVIEWED ABRIDGED CONSOLIDATED GROUP FINANCIAL RESULTS
FOR THE YEAR ENDED 31 MARCH 2008
CONSOLIDATED BALANCE SHEETS
Reviewed Audited
31 March 31 March
2008 2007
R`000 R`000
ASSETS
Non-current assets 128 357 151 950
Investment property 107 683 149 216
Equipment 5 -
Investment in associate property companies 16 888 -
Deferred tax asset 864 -
Accounts receivable 2 917 2 734
Current assets 11 254 3 537
Trade and other receivables 709 1 868
Cash and cash equivalents 10 545 1 669
Total assets 139 611 155 487
EQUITY AND LIABILITIES
Equity and reserves
Ordinary share capital 857 857
Retained income - -
Non-current liabilities 132 452 147 805
Linked unit debenture capital 857 857
Linked unit debenture premium 116 952 76 185
Long-term liabilities 12 526 51 270
Deferred taxation 2 117 19 493
Current liabilities 6 302 6 825
Trade and other payables 2 367 5 649
Taxation 574 1 176
Current portion of long-term liabilities 3 361
Total equity and liabilities 139 611 155 487
CONSOLIDATED INCOME STATEMENTS
Gross revenue 24 095 39 748
Rental income-contractual 23 940 39 645
- straight-line accrual 155 103
Trading profit 10 031 9 310
Net realised (loss)/profit on sale of
investments (1 952) 1 686
Net realised (loss)/profit on sale of
investment properties (2 026) 3 575
Fair value adjustment to investment properties 19 502 23 728
Fair value adjustment to debentures (40 767) (17 983)
Operating (loss)/profit (15 212) 20 316
Interest received 1 202 540
Debenture interest - (181)
Finance charges (3 902) (8 814)
(Loss)/profit before taxation (17 912) 11 861
Taxation 17 912 ( 11 861)
Profit attributable to shareholders - -
CONSOLIDATED CASH FLOW STATEMENTS
Cash flow from operating activities 2 139 4 533
Cash flow from investing activities 40 600 9 092
Cash flow from financing activities (33 863) (14 615)
Net increase/(decrease) in cash and cash equivalents 8 876 (990)
Cash and cash equivalents at beginning of year 1 669 2 659
Cash and cash equivalents at end of year 10 545 1 669
RECONCILIATION BETWEEN PROFIT
ATTRIBUTABLE TO SHAREHOLDERS
AND HEADLINE EARNINGS
Shares are traded as part of linked units
Profit attributable to shareholders - -
Net realised loss/(profit) on sale of investments 1 952 (1 686)
Net realised loss/(profit) on sale of investment
properties 2 026 (3 575)
Fair value adjustment to investment properties (19 502) (23 728)
Fair value adjustment to debentures 40 767 17 983
Headline earnings* 25 243 (11 006)
Interest distribution per linked unit (cents) - -
Basic earnings per linked unit (cents) - -
Headline earnings/(loss) per linked unit (cents)* 29,4 (12,8)
Net asset value per linked unit and net tangible
asset value per linked unit (cents)** 138,4 90,8
* Headline earnings have been presented in accordance with IAS 33. Management
does not believe that the disclosure presents a meaningful indicator of
sustainable financial performance to the users of these financial statements
due to the capital structure of Fairvest. In terms of the debenture trust deed
99,9% of profits are attributable to linked unitholders, resulting effectively
in no profit attributable to ordinary shareholders.
** Linked unit debentures are included in the net asset value and net tangible
asset value calculation.
STATEMENT OF CHANGES IN EQUITY
Share capital Total
Group R`000 R`000
Balance at 30 September 2005 845 845
Profit for the 18-month period - -
Shares not repurchased 12 12
Balance at 31 March 2007 857 857
Profit for the year - -
Balance at 31 March 2008 857 857
STATEMENT OF CHANGES IN LINKED UNIT DEBENTURES
Linked unit Linked unit
debenture capital debenture premium Total
Group R`000 R`000 R`000
Balance at 30 September 2005 845 58 226 59 071
Shares not repurchased 12 (24) (12)
Net fair value adjustment - 17 983 17 983
Balance at 31 March 2007 857 76 185 77 042
Net fair value adjustment - 40 767 40 767
Balance at 31 March 2008 857 116 952 117 809
NOTES TO THE FINANCIAL STATEMENTS
Basis of preparation and accounting policies
The condensed consolidated financial statements for the year ended 31 March
2008 have been prepared in compliance with the Listings Requirements of the JSE
Limited, International Financial Reporting Standards (IFRS) and the South
African Companies Act, 1973, as amended. The accounting policies applied in the
presentation of the condensed consolidated financial statements are consistent
with those applied in the preparation of the financial statements for the
18-month period ended 31 March 2007.
Salient features 2008 2007
1. Linked unit statistics
Number of linked units in issue 85 721 788 85 721 788
Weighted average number of linked units 85 721 788 85 721 788
2. Related party transactions
The group, in the ordinary course of business,
entered into various purchase transactions on an
arm`s length basis at market rates with
related parties.
3. Capital commitments
No capital commitments have been authorised.
SEGMENTAL INFORMATION
Sectoral profile based on income receivable
Commercial 83% 86%
Residential 17% 14%
Sectoral profile based on gross lease area
Commercial 85% 87%
Residential 15% 13%
Regional profile based on income receivable
Eastern Cape 27% 25%
Free State 3% 3%
Gauteng 45% 27%
KwaZulu-Natal 25% 45%
Regional profile based on gross lease area
Eastern Cape 11% 8%
Free State 3% 3%
Gauteng 71% 59%
KwaZulu-Natal 15% 30%
Tenant profile based on income receivable
A-grade tenant 27% 25%
B-grade tenant 16% 22%
C-grade tenant 57% 53%
Tenant profile based on gross lease area
A-grade tenant 17% 11%
B-grade tenant 16% 12%
C-grade tenant 67% 77%
Vacancy profile based on gross lease area
Vacancy area in square metres 25 548 31 503
Vacancy area as % of gross lease area 35% 35%
Regional vacancy profile
Eastern Cape 2% 0%
Free State 5% 4%
Gauteng 81% 61%
KwaZulu-Natal 12% 35%
All vacancy relates to commercial
COMMENTARY
Fairvest is a property investment holding company with investments in
commercial and retail properties in South Africa. Its short-term investment
strategy is to create a property portfolio of significant critical mass through
the acquisition of quality, high-yielding properties. Accordingly, investment
opportunities are being evaluated for acquisition on an on-going basis.
Review of results
The turnaround of the group continued during the period under review with the
net asset value per linked unit increasing 52,4% to 138,4 cents. This increase
resulted primarily from the revaluation of the Kempton City property to its
disposal value and the reduction in the deferred taxation provision required
for potential capital gain on redemption of debentures as the fair value of the
debentures now exceeds their face value of R112,5 million.
The property portfolio under management decreased from R149,2 million to
R107,7 million as the Nedbank Circle and Mangrove Beach Centre properties
were sold and the Blue Heights building, which is owned by the Polpoint
shareblock, is no longer consolidated as Fairvest does not have management
control. The investment in the Polpoint shareblock has been reflected as an
investment.
Cash and cash equivalents improved significantly from R1,7 million to R10,5
million largely as a result of the receipt of proceeds from the sale of
properties. Debt financing reduced from R51,3 million to R15,9 million which
translated into debt financing as a percentage of the property portfolio
reducing from 34% to 15%.
Post balance sheet events
The disposal of the Kempton City property was approved by shareholders on 19
May 2008. The effective date of the sale was 28 May 2008 and payment has been
received. The financial effects of this transaction have been disclosed to
shareholders in the circular dated 30 April 2008.
On 16 May 2008, the agreement of sale of the Broadway Nordic property was
concluded for the disposal of the property for R850 000. The effective date of
the transaction is the date of transfer.
Interest distributions
No interest distributions or dividends have been made for the period under
review in respect of the linked units and none are proposed at this stage,
given the gradual turnaround of the group.
Appreciation
The directors extend their appreciation to management and staff for their
valued efforts as well as our advisors, financiers and shareholders for their
continuing belief in and support of Fairvest.
For and on behalf of the board
25 June 2008
Durban
Directors
TA Bell (Chairman), TP Botsis*, DA Johnston*, AB Platt, JF du Toit*
*Non-executive
Company secretary
JA Lupton, ACIS
Registered office
9th Floor, Protea Hotel, Corner Lighthouse Road and Chartwell Drive, Umhlanga
Rocks, 4319 PO Box 18, Umhlanga Rocks, 4320
Transfer secretaries
Computershare Investor Services (Proprietary) Limited
Ground Floor, 70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Auditor
BDO Spencer Steward (KZN) Inc
Sponsor
Merchant Sponsors (Proprietary) Limited
Date: 25/06/2008 17:43:01 Produced by the JSE SENS Department.
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