|
RES
RES
RES - Resilient - Reviewed Interim Financial Report For The Six Months
Ended 30 June 2008
Resilient Property Income Fund Limited
(Incorporated in the Republic of South Africa)
Registration number 2002/016851/06
Share code: RES & ISIN: ZAE000043642
("Resilient" or "the group")
REVIEWED INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2008
Directors` commentary
The distribution of 79,49 cents per linked unit for the six months ended 30
June 2008 represents a 16,95% increase over the distribution for the
comparable prior period.
The highlight of this reporting period was the acquisition of the linked
units not already owned in Diversified Property Fund Limited
("Diversified"). Diversified unitholders received 0,4375 linked units in
Resilient for each linked unit held in Diversified. Resilient intends to
dispose of Diversified`s smaller retail assets as well as the four
industrial properties acquired as part of the merger. The industrial
properties, in particular City Deep Industrial Park, are under-rented and
will only be sold once the full value can be realised.
Retail spending has come under pressure due to increased interest rates and
rising fuel costs. The negative macro-economic environment was countered by
the rapid development and growth in resource mining which is the economic
focus of most of the areas in which Resilient`s developments are situated.
Resilient was also protected from the deterioration in the retail trading
environment by the overwhelming dominance of national retailers in its
shopping centres.
1 PROPERTY ACQUISITIONS AND DEVELOPMENTS
Arbour Town
Resilient owns a 10% interest in this 96,9 ha site situated along the N2
highway in Amanzimtoti. The housing estate and land zoned for residential
development have been sold for a total of R40 million with transfer expected
in August 2008. The 36 000 m2 GLA value centre (Arbour Crossing), anchored
by Pick `n Pay Hypermarket, is scheduled to open in November 2008 and is
fully let. The Galleria, a regional mall with a GLA of 76 600 m2, is 90% pre-
let and is scheduled to open in November 2009.
An offer to purchase The Galleria, Arbour Crossing and the remaining land
which is zoned for commercial development, has been accepted. The offer
remains subject to numerous suspensive conditions and finality on the sale
is only anticipated in October 2008.
Burgersfort Mall
Resilient has entered into an agreement with the original vendors to cancel
their option to buy back 50% of the proposed regional mall planned for this
property. Tenant demand for the mall is strong and the Edcon group has
agreed to anchor the proposed regional mall with an Edgars store.
Construction of a 38 000 m2 GLA mall is scheduled to commence in 2009.
Chemserve Spartan
Construction of a sub-divisible 9 690 m2 warehouse and office development on
previously unutilised land is scheduled for completion in September 2008.
Tenant demand for industrial space is strong and the expected yield on the
development is in excess of 11%.
Game Centre Polokwane
Resilient acquired a 40% interest in this value centre for R40 million at a
forward yield of 10%. The remaining interest is held by the Moolman and
Flanagan & Gerard groups, Resilient`s partners in the Mall of the North
development.
The Grove
Resilient has a 50% interest in this 39 000 m2 GLA mall anchored by Edgars,
Pick `n Pay and Woolworths. The mall is scheduled to open in August 2009. A
further 2,28 ha of land has been acquired adjacent to the site at a total
cost of R13 million. Application has been made for retail rights with the
intention to extend the mall by between 8 000 m2 and 10 000 m2 of GLA.
I`langa Lifestyle Centre
Resilient has a 25% interest in this 8,9 ha site. The proposed 40 000 m2 GLA
development is 90% pre-let and will be anchored by Game, Pick `n Pay and
Woolworths. Commencement of construction of the development has been delayed
due to an environmental issue. The issue has been resolved and construction
is anticipated to commence in November 2008.
Mafikeng Mall
This 22 500 m2 GLA mall anchored by Spar, Game and Edgars is scheduled to
open in April 2009. Tenant demand is strong and application has been made
for rights to develop a further 15 000 m2 of GLA.
Mall of the North
The 75 000 m2 of retail rights approved for the site remains subject to
review by the Provincial Appeal Tribunal. The review hearing dates have been
set for August and September 2008 and, subject to a favourable outcome,
Resilient will increase its stake in the development from 48% to 55%. A
service agreement for electricity has been entered into with the local
authority and sufficient supply has been set aside for the development.
Northam Plaza
Resilient has obtained additional retail rights and construction of a 7 500
m2 GLA extension is planned to commence in December 2008 and is anticipated
to be completed in November 2009.
Village Mall, Kathu
This 19 000 m2 GLA closed mall in Kathu is scheduled to open in November
2008. Kathu is based on the fourth largest iron ore deposit in the world and
the area is currently undergoing strong growth and development. The mall is
fully let and tenants include inter alia Edgars, Spar and the Truworths,
Foschini, Mr Price and Clicks groups.
2 PROPERTIES SOLD
Shoprite Rustenburg was sold for R27 million against a book value of R25,7
million and transfer has been effected. Shoprite Vryheid has been sold for
R23,5 million against a book value of R20,5 million and transfer is expected
in August 2008. All Diversified`s properties sold but not yet transferred at
December 2007 were subsequently transferred.
3 INVESTMENTS
Following the merger of Resilient and Diversified, Resilient`s holdings in
Pangbourne Properties Limited and Capital Property Fund increased to 36 868
803 and 85 346 310 units valued at R11,55 and R4,20 per unit respectively.
In addition, Resilient now owns 7 392 500 shares in associate New Europe
Property Investments Plc ("NEPI"), an AIM listed property company, focused
on Romania.
4 PROSPECTS
All Resilient`s properties are new or have been substantially refurbished
over the last few years. A reduction of major refurbishment costs will
provide an underpin for earnings growth over the next few years. The
projected yield on new developments is anticipated to exceed the yield of
the assets to be disposed of to fund these developments. Resilient`s record
of strong growth in distributions is anticipated to continue for the
foreseeable future.
CONSOLIDATED BALANCE SHEET
Reviewed Audited Reviewed
30 Jun 200 31 Dec 200 30 Jun 200
8 7 7
R`000 R`000 R`000
ASSETS
Non-current assets 5 790 055 4 303 235 3 348 868
Investment property 3 572 542 2 546 618 2 152 914
Straight-lining of rental income 64 727 39 399 52 359
adjustment
Investment property under 764 795 362 619 196 916
development
Investment in associate company 198 800 - -
Investments 784 289 1 164 128 797 251
Intangible asset 26 422 - -
Loans 376 540 188 574 147 540
Property, plant and equipment 1 940 1 897 1 888
Current assets 149 607 65 698 89 447
Investment property held for 23 144 - 50 565
sale
Straight-lining of rental income 356 - 1 435
adjustment
Trade and other receivables 121 970 62 558 35 980
Cash and cash equivalents 4 137 3 140 1 467
Total assets 5 939 662 4 368 933 3 438 315
EQUITY AND LIABILITIES
Total equity attributable to 2 885 647 2 201 332 1 651 748
equity holders
Share capital 2 232 1 607 1 503
Share premium 1 498 675 584 235 401 051
Treasury shares (251) (251) -
Non-distributable reserves 1 384 981 1 615 731 1 249 185
Retained earnings 10 10 9
Total liabilities 3 054 015 2 167 601 1 786 567
Non-current liabilities 2 775 472 1 955 820 1 619 821
Linked debentures 1 071 409 771 520 721 580
Treasury debentures (101) (101) -
Interest-bearing borrowings 1 255 038 680 784 456 923
BEE instrument 16 186 56 967 54 162
Deferred tax 432 940 446 650 387 156
Current liabilities 278 543 211 781 166 746
Trade and other payables 99 850 63 905 35 288
Linked debenture interest 177 429 121 740 102 179
payable
Income tax payable 1 264 26 136 12 927
Interest-bearing borrowings - - 16 352
Total equity and liabilities 5 939 662 4 368 933 3 438 315
Consolidated income statement
Reviewed Audited for the Reviewed for the
for the 6 12 months ended 6 months ended
months 31 Dec 2007 30 Jun 2007
ended
30 Jun 2008
R`000 R`000 R`000
Net rental and related 111 553 186 535 105 930
income
Recoveries and contractual 143 169 265 779 121 866
rental income
Straight-lining of rental 8 233 12 804 27 199
income adjustment
Rental income 151 402 278 583 149 065
Property operating expenses (39 849) (92 048) (43 135)
Distributable income from 29 342 67 919 29 206
investments
(Loss)/profit on disposal (6 293) 57 726 53 032
of investments and
investment property
Profit on disposal of 1 299 197 -
investment property
(Loss)/profit on disposal (7 592) 57 529 53 032
of investments
Fair value (loss)/gain on (328 023) 674 883 218 885
investments and investment
property
Fair value gain on - 491 411 101 607
investment property
Adjustment resulting from (8 233) (12 804) (27 199)
straight-lining of rental
income
Fair value (loss)/gain on (319 790) 196 276 144 477
investments
Fair value gain/(loss) on 40 781 (56 967) (54 162)
BEE instrument
Other income 5 831 16 026 10 130
Administrative expenses (14 316) (25 412) (13 672)
Impairment of goodwill (60 530) (2 795) -
Other expenses - (59) -
(Loss)/profit before net (221 655) 917 856 349 349
finance costs
Net finance costs (112 816) (227 343) (98 188)
Finance income 89 403 34 061 19 121
Interest from loans 10 629 15 528 6 275
Fair value adjustment on 14 797 11 703 9 417
interest rate swaps
Interest on linked units 63 977 6 830 3 429
issued cum distribution
Finance costs (202 219) (261 404) (117 309)
Interest on borrowings (24 790) (37 485) (15 130)
Interest to linked
debenture holders
- interim (177 429) (102 179) (102 179)
- final - (121 740) -
(Loss)/profit before income (334 471) 690 513 251 161
tax
Income tax 103 721 (145 859) (73 053)
(Loss)/profit for the (230 750) 544 654 178 108
period attributable to
equity holders
Basic earnings per share (103,38) 350,19 118,48
(cents)
Basic earnings per linked (23,89) 494,16 186,45
unit (cents)
Diluted earnings per share (98,60) 327,43 110,53
(cents)
Diluted earnings per linked (22,78) 462,04 173,94
unit (cents)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Treasury Non-distri- Retained Total
capital premium shares butable earnings
reserves
Reviewed R`000 R`000 R`000 R`000 R`000 R`000
Balance at 1 419 259 972 - 1 070 939 10 1 332 340
31 December
2006
Issue of
units
- Issue of 68 114 398 114 466
6 818 181
units on
16 April 200
7
- Issue of 16 26 681 26 697
1 632 000
units on
20 April 200
7
Profit on
units issued
by The
Resilient
Unit
Purchase
Trust to
employees 137 137
Profit for 178 108 178 108
the period
Transfer to 178 109 (178 -
reserves 109)
Balance at 1 503 401 051 - 1 249 185 9 1 651 748
30 June 2007
Issue of
units
- Issue of 46 76 620 76 666
4 555 808
units on
13 September
2007
- Issue of 58 106 564 106 622
5 848 421
units on
21 September
2007
Profit on
units issued
by The
Resilient
Unit
Purchase
Trust to
employees 1 1
Units (251) (251)
acquired by
The
Resilient
Unit
Purchase
Trust
Profit for 366 546 366 546
the period
Transfer to 366 545 (366 -
reserves 545)
Balance at 1 607 584 235 (251) 1 615 731 10 2 201 332
31 December
2007
Issue of
units
- Issue of 625 914 440 915 065
62 476 800
units on
30 June 2008
Loss for the (230 (230 750)
period 750)
Transfer to (230 750) 230 750 -
reserves
Balance at 2 232 1 498 (251) 1 384 981 10 2 885 647
30 June 2008 675
Non-distributable reserves comprise those profits and losses that are not
distributable to unitholders and are made up of mainly revaluation
adjustments on investment property, investment property held for sale and
investments, profits or losses on the disposal of investment property and
investments, the share of post-acquisition reserves of associates, straight-
lining adjustments and other non-distributable balances.
RECONCILIATION OF (LOSS)/PROFIT FOR THE PERIOD TO HEADLINE EARNINGS AND
DISTRIBUTABLE INCOME
Reviewed Audited Reviewed
for the for the for the
6 months 12 months 6 months
ended ended ended
30 Jun 31 Dec 30 Jun
2008 2007 2007
R`000 R`000 R`000
Basic earnings (shares) - (loss)/profit (230 750) 544 654 178 108
for the period attributable to equity
holders
- interest to linked debenture holders 177 429 223 919 102 179
Basic earnings (linked units) (53 321) 768 573 280 287
Adjusted for: 291 125 (583 955) (226 063)
- fair value loss/(gain) on investment 8 233 (478 607) (101 607)
property
- fair value loss/(gain) on 319 790 (196 276) (144 477)
investments
- profit on disposal of investment (1 299) (197) -
property
- loss/(profit) on disposal of 7 592 (57 529) (53 032)
investments
- impairment of goodwill 60 530 2 795 -
- income tax effect (103 721) 145 859 73 053
Headline earnings 237 804 184 618 54 224
Adjustment resulting from straight- (8 233) (12 804) -
lining of
rental income
Fair value (gain)/loss on BEE (40 781) 56 967 54 162
instrument
Fair value adjustment on interest rate (14 797) (11 703) (9 417)
swaps
Interest paid by BEE SPV (refer to note 12 104 22 534 10 820
2.2)
Income received by BEE SPV (refer to (8 594) (15 536) (7 348)
note 2.2)
Other (74) (157) (262)
Distributable income 177 429 223 919 102 179
Less: Distribution declared (177 429) (223 919) (102 179)
Income not distributed - - -
Headline earnings per linked unit 106,54 118,70 36,07
(cents)
Diluted headline earnings per linked 101,62 110,99 33,65
unit (cents)
Basic earnings per share, basic earnings per linked unit and headline
earnings per linked unit are based on the weighted average of 223 210 200
(31 Dec 07: 155 531 286; 30 Jun 07: 150 329 171) shares/linked units in
issue during the period.
Diluted earnings per share, diluted earnings per linked unit and diluted
headline earnings per linked unit are based on the weighted average of
234 021 011 (31 Dec 07: 166 342 097; 30 Jun 07: 161 139 982)
shares/linked units in issue during the period.
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
Reviewed Audited for Reviewed
for the 6 the 12 for the 6
months months months
ended ended ended
30 Jun 200 31 Dec 2007 30 Jun 200
8 7
R`000 R`000 R`000
Cash (outflow)/inflow from (19 397) (2 160) 10 122
operating activities
Cash outflow from investing (1 375 (565 751) (139 183)
activities 698)
Cash inflow from financing 1 396 092 561 991 121 468
activities
Increase/(decrease) in cash and 997 (5 920) (7 593)
cash equivalents
Cash and cash equivalents at 3 140 9 060 9 060
beginning of period
Cash and cash equivalents at end 4 137 3 140 1 467
of period
Cash and cash equivalents consist
of:
Current accounts 4 137 3 140 1 467
Notes
1 PREPARATION AND REVIEW OPINION
The consolidated reviewed interim results have been prepared in accordance
with the recognition and measurement criteria of International Financial
Reporting Standards (IFRS), the presentation and disclosure requirements of
IAS34 and the requirements of the Companies Act (Act 61 of 1973). The
accounting policies adopted are consistent with those of the prior period.
KPMG Inc. has reviewed the financial information set out in this abridged
report. Their unqualified review report is available for inspection at the
group`s registered address.
2 SUMMARY OF FINANCIAL PERFORMANCE
2.1 To comply with financial reporting requirements, the group will account
for entities that do not form part of its operations, do not operate under
its operating policies and whose businesses, risk profiles and debt levels
are not comparable to that of its own. Disclosure under "Property
operations" excludes Eagle`s Eye Investments (Proprietary) Limited ("BEE
SPV").
2.2 On 27 June 2006 10 810 811 linked units were issued to BEE SPV and
Resilient has guaranteed the funding obligations of BEE SPV in acquiring
these units. In terms of IFRS the issue did not take place and the essence
of the transaction was that the BEE shareholders received a right/option to
acquire linked units in Resilient at a future date at a predetermined price.
As a consequence, the issue of linked units has been eliminated in the
preparation of these financial statements. The right/option the BEE
shareholders have acquired has a value of R16 186 000 (31 Dec 2007:R56 967
000; 30 Jun 2007: R54 162 000) and was accounted for through profit and loss
during the period. The value of this right/option will be considered on an
ongoing basis and changes in its fair value will be accounted for through
profit and loss.
The following table indicates the effect of the BEE transaction on the group
financial statements (the column "Property operations" indicates Resilient`s
results had the BEE transaction been accounted for as an issue for value):
Consolidated BEE SPV Property
operations
30 June 2008 R`000 R`000 R`000
Income statement
Fair value gain on BEE instrument 40 781 (40 781) -
Financing costs
- Interest on borrowings (24 790) 12 104 (12 686)
- Interest to linked debenture (177 429) (8 594) (186 023)
holders
Balance sheet
Current assets
- Trade and other receivables 121 970 (1 327) 120 643
Share capital 2 232 108 2 340
Share premium 1 498 675 142 270 1 640 945
Non-distributable reserves 1 384 981 31 429 1 416 410
Non-current liabilities
- Linked debentures 1 071 409 51 892 1 123 301
- Interest-bearing borrowings
(non-current and current) 1 255 038 (219 434) 1 035 604
BEE instrument 16 186 (16 186) -
Current liabilities
- Linked debenture interest 177 429 8 594 186 023
payable
Historical performance 30 Jun 31 Dec 30 Jun 31 Dec
2008 2007 2007 2006
Distribution per linked unit 79,49 75,74 67,97 63,20
(cents)
Units in issue 234 021 171 544 161 139 152 689
011 211 982 801
Property operations
Net asset value per linked R17,87 R18,46 R15,93 R14,49
unit*
Gearing ratio** 21,7% 14,9% 10,2% 14,4%
Units in issue 234 021 171 544 161 139 152 689
011 211 982 801
Consolidated
Net asset value per linked R17,73 R18,50 R15,79 R14,19
unit*
Units in issue 223 210 160 712 150 329 141 878
200 400 171 990
*Net asset value includes total equity attributable to equity holders and
linked debentures.
**The gearing ratio is calculated by dividing the total gearing by the
investment in non-current assets excluding loans and property, plant and
equipment.
3 GEARING
Expiry Amount Interest % of
R`million Rate rate borrowings
Interest rate swaps
October 08 50,0 7,78% 4,26%
July 09 50,0 7,87% 4,26%
August 09 50,0 9,70% 4,26%
August 09 50,0 8,59% 4,26%
October 10 50,0 8,06% 4,26%
November 10 65,0 10,70% 5,53%
July 11 50,0 10,65% 4,26%
August 11 50,0 9,16% 4,26%
September 12 50,0 8,86% 4,26%
November 12 50,0 8,53% 4,26%
June 13 100,0 9,51% 8,51%
Interest rate cap
July 13 50,0 11,55% 4,26%
Bond shorts
- R153 47,9 11,73% 4,08%
- R186 235,0 8,28% 20,01%
- R201 98,0 8,73% 8,33%
- R204 58,9 9,60% 5,01%
Hedged borrowings 1 104,8 94,07%
Variable rate borrowings 69,6 5,93%
Total gearing* 1 174,4 10,48% 100,00%
*Total gearing comprises the level of external interest-bearing
borrowings, excluding those of BEE SPV, should current liabilities
be liquidated and current assets be realised.
30 Jun 31 Dec 30 Jun
2008 2007 2007
Gearing is calculated as follows: R`million R`million R`million
Interest-bearing borrowings 1 255,0 680,8 473,3
Interest-bearing borrowings of BEE SPV (219,4) (215,2) (210,5)
Current liabilities 278,5 211,8 150,4
Current liabilities of BEE SPV 8,6 8,2 7,3
Current assets (149,6) (65,7) (89,4)
Current assets of BEE SPV 1,3 (5,8) (5,4)
Total gearing 1 174,4 614,1 325,7
4 LEASE EXPIRY PROFILE
Lease expiry Based on rentable Based on contractual
area rental income
Vacant 1,9% -
December 08 8,8% 8,3%
December 09 17,8% 15,2%
December 10 12,6% 11,9%
December 11 20,5% 24,6%
December 12 13,4% 19,6%
> December 12 25,0% 20,4%
Total 100,0% 100,0%
5 SEGMENTAL ANALYSIS
30 Jun 2008 31 Dec 30 Jun 2007
2007
Rental income R`000 R`000 R`000
Gauteng 16 558 31 981 17 380
KwaZulu-Natal 11 184 33 022 17 457
Limpopo 59 816 98 384 54 535
Mpumalanga 29 449 47 845 21 812
Northern Cape 21 242 41 998 24 062
North West 13 153 25 353 13 819
Total 151 402 278 583 149 065
(Loss)/profit before net finance
costs
Gauteng 12 986 99 840 11 195
KwaZulu-Natal 8 025 28 855 6 028
Limpopo 43 205 176 364 26 043
Mpumalanga 22 428 186 239 113 621
Northern Cape 14 278 98 882 13 623
North West 10 631 75 159 9 827
Corporate (333 208) 252 517 169 012
Total (221 655) 917 856 349 349
6 PAYMENT OF INTERIM DISTRIBUTION
The board has approved and notice is hereby given of an interim distribution
(distribution no 11) of 79,49 cents per linked unit for the six months ended
30 June 2008.
The last date to trade linked units cum distribution will be Friday, 22
August 2008 and trading will commence ex distribution on Monday, 25 August
2008. The record date to participate in the distribution will be Friday, 29
August 2008.
Linked unit certificates may not be dematerialised or rematerialised between
Monday, 25 August 2008 and Friday, 29 August 2008, both days inclusive.
Payment of the distribution will be made to linked unitholders on Monday,
1 September 2008.
In respect of dematerialised linked unitholders, the distribution will be
transferred to the Central Securities Depository Participant accounts/broker
accounts on Monday, 1 September 2008. Certificated linked unitholders`
distribution payments will be posted on or about Monday, 1 September 2008.
By order of the board
Des de Beer
Managing director
Andries de Lange
Financial director
Johannesburg
7 August 2008
Directors
JJ Njeke (chairman); Jorge da Costa; Des de Beer*; Andries de Lange*;
Marthin Greyling; Johann Kriek*; David Lewis*; Sydney Malabie; Phumelele
Msweli; Rory Turner; Barry van Wyk; Jeff Zidel* (*Executive directors)
Company secretary
Nick Hanekom
Business address
4th Floor?Rivonia Village?Rivonia Boulevard?Rivonia 2191
Transfer office
Link Market Services South Africa (Proprietary) Limited 11 Diagonal Street
Johannesburg 2001
Sponsor
Java Capital (Proprietary) Limited
Date: 07/08/2008 17:05:01 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 ] | |||||||||||||
|
|||||||||||||
