| Thu 21 Aug 2008, 17:10 | | MYT - Monyetla Property Fund - Audited Abridged Consolidated Financial Report |
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MYT
MYT
MYT - Monyetla Property Fund - Audited Abridged Consolidated Financial Report
For The Year Ended & 30 June 2008 and distribution 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 group" or "the company")
Audited Abridged Consolidated Financial Report for the year ended 30 June 2008
BALANCE SHEET
Group
Audited Restated
30 June 2008 30 June 2007
R`000 R`000
ASSETS
Non-current assets 1 218 352 1 034 409
Investment property 1 191 135 1 006 047
Straight-lining of rental income 19 850 13 262
adjustment
Loan to the unit purchase trust 7 367 14 796
Property, plant and equipment - 304
Current assets 77 720 47 578
Investment property held for sale 43 574 -
Straight-lining of rental income 114 -
adjustment
Trade and other receivables 29 996 32 417
Cash and cash equivalents 4 036 15 161
Total assets 1 296 072 1 081 987
EQUITY AND LIABILITIES
Total equity attributable to equity 271 026 167 743
holders
Share capital 2 065 2 065
Share premium 129 400 129 400
Non-distributable reserves 139 561 -
Retained earnings - 36 278
Total liabilities 1 025 046 914 244
Non-current liabilities 865 108 701 677
Linked debentures 410 879 410 879
Interest-bearing borrowings 437 241 285 990
Deferred tax 16 988 4 808
Current liabilities 159 938 212 567
Trade and other payables 62 971 13 052
Linked debenture interest payable 28 390 633
Interest-bearing borrowings 68 577 198 882
Total equity and liabilities 1 296 072 1 081 987
INCOME STATEMENT
Group
Audited Restated
For the For the
12 months 12 months
ended ended
30 June 2008 30 June 2007
R`000 R`000
Net rental and related income 111 853 61 662
Recoveries and contractual rental income 144 489 76 746
Straight-lining of rental income adjustment 6 702 4 445
Rental income 151 191 81 191
Property operating expenses (39 338) (19 529)
Fair value gain/(loss) on investment 115 229 (54 361)
property
Fair value gain/(loss) on investment 121 931 (49 916)
property
Adjustment resulting from straight-lining of (6 702) (4 445)
rental income
Administrative expenses (7 808) (5 756)
Asset management fee (3 562) -
Profit before net finance costs 215 712 1 545
Net finance costs (100 249) (29 877)
Finance income 11 196 22 394
Interest from loans 408 419
Fair value adjustment on derivative - 17 256
financial instruments
Fair value adjustment on interest rate swaps 10 788 4 719
Finance costs (111 445) (52 271)
Interest on borrowings (42 055) (36 486)
Fair value adjustment on derivative (17 256) -
financial instruments
Interest to linked debenture holders
- interim (23 744) (7 213)
- final (28 390) (8 572)
Profit/(loss) before income tax 115 463 (28 332)
Income tax (12 180) 15 063
Profit/(loss) for the year attributable to 103 283 (13 269)
equity holders
Basic earnings/(loss) per share (cents)* 50,02 (14,28)
Basic earnings per linked unit (cents)* 75,27 2,71
Basic earnings per share, basic earnings per linked unit and headline earnings
per linked unit are based on the weighted average of 206 471 849 (30 June 2007:
92 892 127) shares/linked units in issue during the year.
*The fund has no dilutionary instruments in issue.
STATEMENT OF CHANGES IN EQUITY
Group Non-
distri-
Share Share butable Retained
capital premium reserves earnings Total
Restated R`000 R`000 R`000 R`000 R`000
Balance at 30 June
2006
As previously 902 41 - 49 834 50 777
stated
Transfer of 287 (287) -
amortised
debenture premium
Transfer of 128 432 128 432
debenture premium
Restated balance 902 128 760 49 547 179 209
Issue of units 1 163 640 - 1 803
Loss for the year (13 269) (13 269)
Balance at 30 June 2 065 129 400 - 36 278 167 743
2007
Audited
Profit for the 103 283 103 283
year
Transfer to non- 139 561 (139 561) -
distributable
reserves
Balance at 30 June 2 065 129 400 139 561 - 271 026
2008
RECONCILIATION OF PROFIT/(LOSS) FOR THE YEAR TO HEADLINE EARNINGS AND
DISTRIBUTABLE INCOME
Group
Audited Restated
For the For the
12 months 12 months
ended ended
30 June 2008 30 June 2007
R`000 R`000
Basic earnings/(loss) (shares) - 103 283 (13 269)
profit/(loss) for the year attributable
to equity holders
Interest to linked debenture holders 52 134 15 785
Basic earnings (linked units) 155 417 2 516
Adjusted for: (103 049) 39 298
- fair value (gain)/loss on investment (115 229) 54 361
property
- income tax effect 12 180 (15 063)
Headline earnings 52 368 41 814
Reconciliation of profit/(loss) for the
year to amount available for distribution
Profit/(loss) for the year 103 283 (13 269)
Interest to linked debenture holders 52 134 15 785
Fair value (gain)/loss on investment (121 931) 49 916
property
Fair value adjustment on derivative 17 256 (17 256)
financial instruments
Fair value adjustment on interest rate (10 788) (4 719)
swaps
Income tax 12 180 (15 063)
Distributable income 52 134 15 394
Less: Distribution declared (52 134) (15 785)
Total - (391)
Headline earnings per linked unit (cents) 25,36 45,01
CASH FLOW STATEMENT
Group
Audited Restated
For the For the
12 months 12 months
ended ended
30 June 2008 30 June 2007
R`000 R`000
Net cash inflow/(outflow) from operating 71 882 (18 653)
activities
Net cash outflow from investing activities (103 953) (495 107)
Net cash inflow from financing activities 20 946 528 183
(Decrease)/increase in cash and cash (11 125) 14 423
equivalents
Cash and cash equivalents at beginning of 15 161 738
year
Cash and cash equivalents at end of year 4 036 15 161
COMMENTARY
Following the bulking up of the portfolio at the start of the financial year,
the board is pleased to announce that the forecast distribution of 25,2 cents
per unit has been exceeded.
Pangbourne Properties Limited ("Pangbourne"), the majority unitholder in
Monyetla and Monyetla`s asset manager, changed a number of its strategies in the
past financial year which impacted on Monyetla. The most significant change in
strategy was the move from an "octopus fund" approach to a unified fund
approach. Monyetla was previously Pangbourne`s specialist office fund. The other
two listed funds in the Pangbourne group, Siyathenga Property Fund Limited and
iFour Properties Limited have been merged into Pangbourne Properties.
Pangbourne advised the board of Monyetla that it had received an offer to
acquire its stake in Monyetla and the company issued a cautionary announcement
on 14 December 2007. Due to deteriorating conditions in the listed property
market, the offer did not proceed and the cautionary announcement was withdrawn
on 18 January 2008.
The previous Monyetla strategy of investing in A, B and C grade buildings has
resulted in relatively high levels of bad debts. The focus of the board is to
improve the quality of the portfolio by selling off non-core assets,
particularly the retail and industrial assets and to apply the proceeds to
reduce the levels of gearing from the current 42,9% to a target band of between
30% and 40%. The board is also considering either a rights issue or private
placement of units to reduce gearing.
Mr Price Nelspruit, Mass Stores Klerksdorp, Edgars Ermelo, Edgars Sasolburg and
Morkels Witbank were sold for R43 769 500 as against a book value of R45 740
000. Two of the properties have been lodged in the deeds office for transfer and
all the properties should be transferred by the end of September 2008.
An additional 7 995 square metre GLA of offices has been developed at Monyetla
Office Park to take advantage of available bulk. The new offices have been let
to Eskom in terms of a three year lease commencing 1 July 2008 and the
development is expected to achieve a 9,5% forward yield based on a cost of
R117,5 million.
Monyetla`s focus on decentralised offices places the company in a good position
for the 2009 financial year. The decentralised office market in the northern
suburbs of Johannesburg has lagged the performance of the retail and industrial
segments. Continued steady take up of vacant space accompanied by limited new
supply have resulted in improved occupancy levels and firming rentals in this
market.
In the absence of major tenant defaults, Monyetla is well positioned for growth
in distributions in the 2009 financial year.
By order of the board
Ulana van Biljon Johannesburg
Managing director 19 August 2008
NOTES
1. Preparation and audit opinion
This abridged consolidated financial report has been prepared in accordance
with the recognition and measurement criteria of International Financial
Reporting Standards (IFRS), the presentation and disclosure requirements of
IAS 34, the JSE Listings Requirements and the requirements of the Companies
Act (Act 61 of 1973). The accounting policies adopted are consistent with
those of the prior year with the exception of the changes discussed in note
2.
Deloitte & Touche has audited the financial information set out in this
abridged report in accordance with International Standards on Auditing.
Their unmodified audit opinion is available for inspection at the group`s
registered address.
2. Change in accounting policy and valuation of investment properties
During the current year, the company changed its accounting policy with
regards to the treatment of debenture premium. Previously this was
disclosed as a liability and amortised over the minimum contractual life of
the debentures, being 25 years. The debenture premium has been reclassified
as share premium which is not subject to amortisation. Comparatives have
been restated to reflect the change. This has not resulted in changes to
earnings per share, earnings per linked unit or headline earnings per
linked unit.
At year-end, the company fair valued the entire property portfolio using an
external valuer. This will be done annually. This is a change from the
previous method in terms of which one-sixth of the property portfolio was
valued externally and the balance valued by directors every six months.
3. Summary of financial performance
30 Jun 2008 31 Dec 2007 30 Jun 2007 31 Dec 2006
Distribution per 13,75 11,80* 8,60 8,00
linked unit (cents)
Units in issue 206 471 849 206 471 849 206 471 849 90 173 979
Net asset value R3,30 R2,92 R2,80 R2,10
Gearing ratio** 42,9% 43,3% 44,2% 64,0%
*Included in this distribution is 0,3 cents for the period 23 June 2007 to 30
June 2007.
**The gearing ratio is calculated by dividing the total gearing by the
investment in non-current assets excluding loans to the purchase trust.
4. Gearing
Amount All in rate % of
Expiry R`million (NACQ) borrowings
May 2009 45,6 9,99% 8,8%
May 2010 45,6 10,15% 8,8%
July 2012## 362,0 8,95% 69,7%
Hedged borrowings 453,2 9,18% 87,3%
Variable rate borrowings 66,2 13,65% 12,7%
Total gearing# 519,4 9,75% 100,0%
#Total gearing comprises the level of external interest-bearing borrowings
should current liabilities be liquidated and current assets be realised.
##The interest rate of 8,95% on this fixed rate loan will increase to 10,36%
with effect from 6 July 2010.
Gearing is calculated as follows:
30 June 2008 30 June 2007
R`million R`million
- Interest-bearing borrowings 437,2 286,0
- Current liabilities 159,9 212,6
- Current assets (77,7) (47,6)
Total gearing 519,4 451,0
5. Lease expiry profile and segmental analysis
Lease expiry (based on contractual rental income)
June 2009 27,7%
June 2010 22,6%
June 2011 22,3%
June 2012 8,7%
June 2013 12,7%
June 2014 4,2%
>June 2014 1,8%
Total 100,0%
Audited Restated
For the For the
12 months ended 12 months ended
30 June 2008 30 June 2007
R`000 R`000
Segmental revenue - rental income
Commercial 86 715 23 254
Industrial 34 966 17 340
Retail 29 510 40 597
Total 151 191 81 191
Profit for the year
Commercial 152 285 (12 712)
Industrial 45 316 17 081
Retail 29 479 2 932
Corporate (123 797) (20 570)
Total 103 283 (13 269)
Sectoral split (based on book value)
Commercial 63,5%
Industrial 18,7%
Retail 17,8%
Total 100,0%
6. Capital commitments
Audited Restated
For the For the
12 months ended 12 months ended
30 June 2008 30 June 2007
R`000 R`000
Authorised and contracted 270 488
Authorised and not yet contracted - 4 500
Total 270 4 988
7. Payment of final distribution
The board has approved and notice is hereby given of a final distribution
(distribution number 6) of 13,75 cents per linked unit for the six months
ended 30 June 2008.
The last date to trade linked units cum distribution will be Friday, 5
September 2008 and trading will commence ex distribution on Monday, 8
September 2008. The record date to participate in the distribution will be
Friday, 12 September 2008.
Linked unit certificates may not be dematerialised or rematerialised
between Monday, 8 September 2008 and Friday, 12 September 2008, both days
inclusive.
Payment of the distribution will be made to linked unitholders on Monday,
15 September 2008. In respect of dematerialised linked unitholders, the
distribution will be transferred to the Central Securities Depository
Participant accounts/broker accounts on Monday, 15 September 2008.
Certificated linked unitholders` distribution payments will be posted on or
about Monday, 15 September 2008.
Directors: Mkhuseli Faku## (Chairman of the board), Ulana van Biljon (Managing
director), Mpho Diale##, George Piagalis#, Holden Marshall#, Barry Stuhler,
Gabriel Sequeira (Alternate)
#Independent non-executive ##Non-executive
Company secretary: Abraham Bornman
Registered address: 4th Floor, Rivonia Village, Rivonia Boulevard, Rivonia, 2191
Transfer secretaries: Computershare Investor Services (Pty) Ltd, 70 Marshall
Street, Johannesburg, 2001. PO Box 61051, Marshalltown, 2107
Sponsor: Deloitte & Touche Sponsor Services (Pty) Ltd.
Date: 21/08/2008 17:10:01 Produced by the JSE SENS Department.
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