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FPT
FPT
FPT - Fountainhead Property Trust - Audited final results for the year ended 30
September 2008
FOUNTAINHEAD PROPERTY TRUST
Short name: FPT
Share code: FPT
ISIN: ZAE000097416
AUDITED FINAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2008
The directors of Fountainhead Property Trust Management Limited, the manager of
Fountainhead Property Trust, submit their report on the audited results of
Fountainhead Property Trust for the year ended 30 September 2008. These
abridged financial statements have been extracted from the audited financial
statements on which KPMG Inc. have issued an unmodified opinion and which are
available for inspection at the registered office.
INCOME STATEMENT
2008 2007
R`000 R`000
Income 704 091 606 544
Contractual rental income 689 439 599 295
Straight-line lease adjustment 14 652 7 249
Expenses (173 598) (158 625)
Administrative expenses (35 871) (37 202)
Property operating expenses (137 727) (121 423)
Operating profit 530 493 447 919
Net finance costs (36 744) (13 168)
Interest received 37 969 27 774
Interest paid (74 713) (40 942)
(Deficit)/surplus on disposal of investment
properties (1 194) 13 371
Fair value adjustments to investment properties 280 791 1 096 390
Profit for the year 773 346 1 544 512
Basic earnings per unit (cents) 77.6 155.1
Headline earnings and distribution income
reconciliation
Profit for the year 773 346 1 544 512
Deficit/(surplus) on disposal of investment
properties 1 194 (13 371)
Less: fair value adjustments to investment
properties (280 791) (1 096 390)
Headline earnings 493 749 434 751
Less: straight-line lease adjustment (14 652) (7 249)
Distribution income 479 097 427 502
Headline earnings per unit (cents) 49.57 43.65
Distribution per unit (cents) 48.10 42.92
Interim distribution per unit (cents) 23.60 21.40
Final distribution per unit (cents) 24.50 21.52
Units in issue 996 043 081 996 043 081
BALANCE SHEET
2008 2007
R`000 R`000
ASSETS
Property assets 7 335 119 6 793 126
Investment properties 7 103 135 6 575 794
Straight-line lease accrual 231 984 217 332
Other current assets 355 697 304 772
Trade and other receivables 38 513 23 287
Cash and cash equivalents 317 184 281 485
Total assets 7 690 816 7 097 898
UNITHOLDERS` FUNDS AND LIABILITIES
Unitholders` funds 6 609 335 6 315 086
Capital of the fund 1 933 354 1 933 354
Capital reserve 501 906 498 517
Revaluation reserve 3 942 031 3 665 823
Retained earnings 232 044 217 392
Non-current liabilities
Interest-bearing liability 731 000 487 000
Current liabilities 350 481 295 812
Trade and other payables 106 450 81 464
Unitholders for distribution 244 031 214 348
Total unitholders` funds and liabilities 7 690 816 7 097 898
CASH FLOW STATEMENT
2008 2007
R`000 R`000
Cash effects from operating activities
Profit for the year 773 346 1 544 512
Adjustments for:
Straight-line lease adjustment (14 652) (7 249)
Interest received (37 969) (27 774)
Interest paid 74 713 40 942
Deficit/(surplus) on disposal of investment
properties 1 194 (13 371)
Fair value adjustments to investment properties (280 791) (1 096 390)
515 841 440 670
Trade and other receivables
(increased)/decreased (15 226) 1 274
Trade and other payables increased 24 986 3 924
Cash generated from the operations 525 601 445 868
Interest received 37 969 27 774
Interest paid (74 713) (40 942)
Income distributions (449 414) (409 374)
Cash flows from operating activities 39 443 23 326
Cash effects from investing activities
Additions to investment properties (252 828) (234 147)
Proceeds from disposal of investment properties 5 084 49 852
(247 744) (184 295)
Cash effects from financing activities
Long-term loan raised 244 000 202 000
Long-term loan repaid - (14 000)
244 000 188 000
Net increase in cash and cash equivalents 35 699 27 031
Cash and cash equivalents at 1 October 281 485 254 454
Cash and cash equivalents at 30 September 317 184 281 485
STATEMENT OF CHANGES IN UNITHOLDERS` FUNDS
Capital of Capital Revaluation
(R`000) the fund reserve reserve
Balance as at 1 October 2006 1 933 354 470 243 2 584 336
Profit/total income and
expenses for the year
Profit and revaluation reserve
realised on sale of properties
transferred to capital reserve 28 274 (14 903)
Fair value adjustment on
investment properties
transferred to revaluation
reserve 1 096 390
Income distributions
Balance at 30 September 2007 1 933 354 498 517 3 665 823
Profit/total income and
expenses for the year
Loss and revaluation reserve
realised on sale of properties
transferred to capital reserve 3 389 (4 583)
Fair value adjustment on
investment properties
transferred to revaluation
reserve 280 791
Income distributions
Balance at
30 September 2008 1 933 354 501 906 3 942 031
Total
Retained unitholders`
(R`000) earnings funds
Balance as at 1 October 2006 210 143 5 198 076
Profit/total income and
expenses for the year 1 544 512 1 544 512
Profit and revaluation reserve
realised on sale of properties
transferred to capital reserve (13 371) -
Fair value adjustment on
investment properties
transferred to revaluation
reserve (1 096 390) -
Income distributions (427 502) (427 502)
Balance at 30 September 2007 217 392 6 315 086
Profit/total income and
expenses for the year 773 346 773 346
Loss and revaluation reserve
realised on sale of properties
transferred to capital reserve 1 194 -
Fair value adjustment on
investment properties
transferred to revaluation
reserve (280 791) -
Income distributions (479 097) (479 097)
Balance at
30 September 2008 232 044 6 609 335
COMMENTARY
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The annual results have been prepared in accordance with International
Financial Reporting Standards (IFRS) and the requirements of the Collective
Investment Schemes Control Act. The accounting policies are consistent in all
material respects with those applied in prior years.
2. DISTRIBUTION PER UNIT
Fountainhead Property Trust`s net distribution for the six months ended
September 2008 amounts to 24.5 cents per unit, 13.8 percent greater than the
comparable period last year. The net distrubution for the financial year
ended September 2008 is 12.1 percent greater than the comparable period last
year.
3. CHANGES TO PORTFOLIO
During the year, the following sale was concluded:
Net selling 2007
price valuation Deficit
Property R`000 R`000 %
Cenmag House 5 084 6 278 (19)
Note that this sale was negotiated in the previous financial year, prior to
the revaluation of the property. The actual profit on original cost was
R3.4 million.
4. MAJOR CAPITAL PROJECTS
Significant capital projects and planned projects are:
Kenilworth Centre
The R56 million development of a food court and the new Game store is
currently under way and due for completion and trading by the first week in
November 2008. The R50.6 million reconfiguration of a portion of the
Shoprite space which will accommodate the new Virgin Active, and the
extension to Shoprite, which will be converted to a Checkers, has also
commenced. The target date for completion of Checkers is the beginning of
February 2009 and Virgin Active will be June 2009. The refurbishment of the
mall will be attended to simultaneously, and should be complete by the end
of 2008.
The Brightwater Commons
The construction work for the Woolworths and Virgin Active is complete.
Further leasing is in progress.
Benmore Gardens Shopping Centre
The redevelopment is progressing well. All new tenants including Pick n Pay
are trading. The area on the lower level will be converted to parking and
limited retail during the first half of 2009. The proposed sale of the Pick
n Pay premises to the tenant is not being proceeded with and Fountainhead
will retain ownership of the entire property.
Douglas Roberts Centre
The construction of the parking garage is complete. The remaining upgrade of
the office block will be completed by the end of 2008. Fountainhead`s capped
contribution to the project is R147.2 million.
5. SEGMENTAL INFORMATION
September 2008
Net
Revenue income % of
Rm Rm total
Retail 497 400 83
Office blocks 101 77 16
Industrial 66 51 11
Specialised 25 25 5
Corporate - (74) (15)
Total 689 479 100
September 2007
Net
Revenue income % of
Rm Rm total
Retail 437 354 83
Office blocks 85 63 15
Industrial 55 40 9
Specialised 22 22 5
Corporate - (51) (12)
Total 599 428 100
6. VACANCY LEVELS
Vacancy levels in terms of rentable area at 30 September were as follows:
Sector 2008 2007
% %
Retail 6 6
Office blocks 8 2
Industrial 6 9
Specialised - -
Total 6 6
By value, the vacancies equated to 4.5 percent of potential rental income,
compared with 4 percent at half-year.
In the retail sector 82 percent of the vacancies were contained in The
Boulders, The Brightwater Commons and the offices at Centurion Mall,
approximately 40 percent of which have been let for future occupation.
The office sector had a vacancy of 7.6 percent which is primarily situated
in Grayston Ridge.
In the industrial sector, 60 percent of the vacancy is in the mini units.
Mini units have historically always been a challenge to let during adverse
economic conditions. Approximately 20 percent of the mini unit vacant
industrial area has been let for future occupation.
7. PORTFOLIO VALUATIONS
The composition of Fountainhead Property Trust`s portfolio, as valued by the
independent valuer, Rode and Associates CC, as at 30 September 2008, is as
follows:
Value Cents/ Forward % of portfolio
Sector (Rm) unit EY (%) 2008 2007
Retail 5 434 546 8.4 74 75
Office blocks 973 98 8.6 13 12
Industrial 654 66 9.3 9 9
Specialised 274 28 9.6 4 4
Total property 7 335 738 8.5 100 100
Long-term borrowings (731) (73)
Net current assets 5 1
6 609 666
8. PROSPECTS
The board anticipates that distributions per unit for the year ending
30 September 2009 will increase by approximately 8 percent compared with the
year ended 30 September 2008. This forecast has not been reviewed or reported
on by Fountainhead Property Trust`s auditors.
9. DISTRIBUTION ANNOUNCEMENT
Notice is hereby given of distribution No. 51 of 24.5 cents per unit for the
six months ended 30 September 2008.
The last date to trade cum distribution will be Friday, 14 November 2008.
The units of Fountainhead Property Trust will commence trading
ex-distribution on Monday, 17 November 2008 and the record date will be
Friday, 21 November 2008. The distribution will be paid on Monday,
24 November 2008.
Unit certificates may not be dematerialised or rematerialised between
Monday, 17 November 2008 and Friday, 21 November 2008, both dates inclusive.
BY ORDER OF THE BOARD
Fountainhead Property Trust Management Limited
(Reg. No. 1983/003324/06)
29 October 2008
Directors: JD Rainier (Managing), VA Christian, WM Kirchmann, S Shaw-Taylor,
SJ Segar
Transfer secretaries
Computershare Investor Services (Pty) Ltd
70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Secretary and registered office
Broll Property Group (Pty) Ltd
Broll House, 27 Fricker Road, Illovo
Johannesburg, 2196
(PO Box 1455, Saxonwold, 2132)
Short name: FPT
Share code: FPT ISIN: ZAE000097416
Sponsor: Standard Bank
E-mail: fountainhead@standardbank.co.za
Website: www.fountainheadproperty.co.za
Date: 30/10/2008 08:40:10 Produced by the JSE SENS Department.
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