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ORE
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ORE - Orion Real Estate - Audited Results For The Year Ended 30 June 2008 And
Notice Of Annual General Meeting
ORION REAL ESTATE LIMITED
(formerly Alpina Investment Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 1997/021085/06)
Share Code: ORE & ISIN: ZAE000075651
("Orion Real Estate" or "the company")
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2008 AND NOTICE OF ANNUAL GENERAL
MEETING
Group Balance Sheets
Audited Audited
30 June 2008 30 June 2007
R`000 R`000
ASSETS
Non-current assets 276 120 939 194 017 636
Investment property 271 128 511 188 682 998
Furniture, plant and equipment 131 640 99 200
Other financial assets 4 860 788 5 235 438
Current assets 7 664 910 7 427 242
Trade and other receivables 7 656 696 7 426 942
Cash and cash equivalents 8 215 300
Assets of disposal group 39 303 857 52 291 279
Total assets 323 089 706 253 736 157
EQUITY AND LIABILITIES
Capital and reserves 111 566 914 82 796 906
Share capital 5 695 799 5 354 622
Distributable Reserves 55 992 065 32 965 671
Linked Debentures 49 939 573 44 480 749
Minority Shareholders Interest (60 522) (4136)
Non-current liabilities 158 512 997 111 800 797
Long-term liabilities 104 337 425 76 693 880
Deferred taxation 22 642 602 16 790 485
Loans from shareholders 31 458 012 -
Loans from associate companies 74 958 18 316 432
Current liabilities 10 272 827 7 865 407
Current tax payable 895 724 -
Trade and other payables 6 641 055 5 933 474
Provisions 130 853 55 834
Short term portion of long term 2 605 195 1 876 099
liabilities
Liabilities of disposal group 42 736 968 51 273 047
Total equity and liabilities 323 089 706 253 736 157
Ordinary shares in issue (000`s)
Net asset value per linked unit 49.16 42.94
(cents)
Tangible net asset value per 49.16 42.94
linked unit (cents)
Fully diluted ordinary shares 210 923 488 190 508 436
(000`s)
Fully diluted net asset value per 52.89 43.46
linked unit (cents)
Fully diluted net tangible asset 52.89 43.46
value per linked unit (cents)
Group Income Statements
Audited Audited
Year ended Year ended
30 June 30 June
2008 2007
R`000 R`000
Revenue
Gross revenue 23 810 399 21 456 171
Recoveries 3 976 666 3 370 525
Operating costs (25 124 061) (17 380 807)
Operating profit 2 663 003 7 445 889
Interest income 328 749 408 075
Provision for bad debt (1 174 746) (461 482)
Loans written back 278 190 1 998 380
Impairment of loan (57 128) -
Straight line operating lease (213 663) 482 299
adjustment
Fair value adjustment on 40 769 338 31 317 559
investment properties
Impairment of non- current asset (738 527) (1 177 358)
available for sale
Profit on sale of assets held 1 073 035 -
for sale
Profit on sale of furniture, 71 741
plant and equipment
Profit on sale of investment 3 389 617 -
property
Net profit before finance charges 46 317 869 40 085 103
Finance charges (17 319 519) (11 960 313)
Net profit before taxation 28 998 350 28 124 790
Taxation (6 028 341) (7 264 279)
Net profit for the year before 22 970 007 20 860 511
minority interest
Minority shareholders interest 56 386 4 151
Profit for the year 23 026 394 20 864 662
Calculation of headline earnings
Net profit for the year 22 970 007 20 860 511
Adjustments for:
Loan written back (278 190)
Impairment of loan 57 128 (1 998 380)
Fair value adjustment to (40 769 338) (31 317 559)
investment properties
Impairment of non-current asset 738 527 1 177 358
available for sale
Profit on sale of furniture, - (71 741)
plant and equipment
Profit on sale of furniture plant (1 073 035)
and equipment
Profit on sale of investment (3 389 617)
property
Tax effect of above 11 975 738 9 273 614
Headline loss (9 768 779) (2 076 197)
Linked units in issue 226 938 557 192 820 910
Weighted average 210 923 488 190 508 436
Fully diluted weighted average 210 923 488 190 508 436
Attributable earnings per linked 10.89 10.95
unit (cents)
Headline loss per linked unit (4.63) (1.09)
(cents)
Fully diluted weighted average (4.63) (1.09)
attributable earnings per linked
unit (cents)
Fully diluted weighted average (4.63) (1.09)
headline loss per linked unit (4.63) (1.09)
(cents)
Fully diluted headline loss per
linked unit (cents)
Abridged Group Cash Flow Statements
Audited Audited
31 March 31 March
2008 2007
R`000 R`000
Net cash outflow from operating (13 823 470) (8 007 069)
activities
Net cash (outflow)/inflow from (11 805 178) 19 312 541
investing activities
Net cash inflow/(outflow) from 25 636 563 (10 533 128)
financing activities
Cash and cash equivalents at 300 (772 044)
beginning of year
Cash and cash equivalents at end 8215 300
of year
Group Statement of Changes in Equity
Share Share Distributable Total
capital Premium Reserve
R`000 R`000 R`000 R`000
Balance at 31 Dec 2005 211 391 3 516 635 (9 845 579) (6 117 553)
shares issued 1 671 471 1 671 471
Adj for prior year (236 506) (236 506)
error
Attributable profit 22 183 094 22 183 094
for six months
Balance at 30 June 1 882 862 3 516 635 12 101 009 17 500 506
2006
Issue of shares 45 347 45 347
Buy back of shares (90 222) (90 222)
Attributable profit 20 864 662 20 864 662
for year
Balance 30 June 2007 1 837 987 3 516 635 32 965 671 38 320 293
Issue of shares 341 177 341 177
Attributable profit 23 026 394 23 026 394
for year
Balance 30 June 2008 2 179 164 3 516 635 55 992 065 61 687 863
SEGMENTAL REPORTING
2008 Commercial Industrial Retail Hospitality
R`000 R`000 R`000 R`000
Gross Revenue 8 994 155 1 534 679 9 962 037 3 293 082
Property 75 552 406 35 616 640 31 388 578
values 89 732 069
Gross 33 022 12 951 10 029
lettable area 24 311
Gauteng Western Cape
Mpumulanga
Gross Revenue 11 301 658 2 895 931 9 612 812
Property 176 028 511 25 100 000
values 70 000 000
Gross 64 149 5 419
lettable area 15 950
Table continues
2008 Residential Land Group
Gross Revenue 26 448 23 810 401
Property
values 14 442 817 24 396 000 271 128 510
Gross
lettable area 5 205 85 518
Group
Gross Revenue 23 810 401
Property
values 271 128 511
Gross
lettable area 85 518
1. Commentary
The Board of Directors presents the Group`s audited results for the year
ended 30 June 2008 which are presented in accordance with IAS 34: Interim
Financial Reporting. The results have been prepared in accordance with
International Financial Reporting Standards (IFRS), the JSE Listings
Requirements and the requirements of the South African Companies Act, 1973,
as amended.
The accounting policies have been consistently applied to all the years
presented and to years prior to transition to IFRS, unless stated
otherwise. The results have been audited by the company`s auditors SAB&T,
whose unmodified audit report is available for inspection at the registered
office of the company.
2. Financial and operational overview
The transfer of the original Gmeiner Group properties into Orion Real
Estate has taken longer than anticipated and most of the properties were
only transferred in the second half of the financial year. Some of these
transfers were concluded after the end of the financial year. Orion Real
Estate should therefore in the new financial year start to reap the
benefits of the bigger portfolio.
The trading results of the group were negatively impacted by the increases
in interest rates, a number of once off costs such as transfer fees, legal
fees and commission that were the result of the transfer of the properties
and the selling of the Elma Park Flats. The profit for the year went up
from R 20.86 million in 2007 to R 23.03 million in 2008. The value of the
portfolio has increased from R 188.6million to R 271.1 million.
Management has already started a process to focus in the new financial year
on the improvement of efficiencies, the containment of cost, better
recoveries and competitive leases to improve the trading results in the
current financial year.
Current trends in the global markets are not seen as a threat to the
portfolio but rather as an opportunity to utilise the current negative
market sentiments to acquire quality properties at competitive prices
locally and abroad. The timing of such transactions would however be
critical. It was also pleasing to see that the Orion share price remained
relatively stable in very volatile and negative market conditions.
3. Dividends
No dividends were paid or declared during the financial period
4. Linked Units Issued
On the transfer of the Primrose Mall and Meyers Building, Primrose,
Germiston from the Gmeiner portfolio a total of 34 117 647 linked units
were due to be issued but only 2 592 000 linked units were issued. The
balance of 31 525 647 still awaits JSE approval to be issued.
5. Change to Board of Directors
Professor A Boessenkool joined the Board as an independent, non-executive
director, on 11 September 2007 and Mr. C Nolte has been appointed as
financial director with effect from 29 September 2008.
6. Prospects
The transfer of the Gmeiner properties during the second half of the
financial year has inhibited the impact of the bigger portfolio on the
overall results of the company. The income generating capacity of these
properties, as well as the properties that were transferred just after the
year-end, should boost income substantially in the coming financial year.
The company should also start to benefit from the better economies of scale
to improve results.
Properties that were transferred just after year-end are Northcliff Atrium,
The Laser Park properties and the Wartburg Hotel. Properties that should be
registered in the near future are the Gordon`s Bay property and the ACA
Krans building.
7. Notice of general meeting
Shareholders are advised that the annual general meeting will be held at
10h00 on Thursday 27th November 2008 in the Boardroom, 16th Floor, Orion
House, 49 Jorissen Street, Braamfontein, Johannesburg.
Johannesburg
30 September 2008
Directors
R S Wilkinson, F M Viruly, A Boessenkool, A C Gmeiner, F Gmeiner, C Nolte
Company Secretary and Registered Office
Corporate Governance Facilitators CC
Sponsor Transfer Office
Arcay Moela Sponsors (Pty) Ltd Computershare Investor Services (Pty) Ltd
Date: 30/09/2008 16:15:17 Produced by the JSE SENS Department.
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