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FVT
FVT
FVT - Fairvest - Abridged unaudited consolidated group financial results for the
six months ended 30 September 2008
FAIRVEST PROPERTY HOLDINGS
LIMITED
Incorporated in the
Republic of South Africa
(Registration number
1998/005011/06)
Share code: FVT
ISIN: ZAE000034658
("Fairvest" or "the
company" or "the group")
ABRIDGED UNAUDITED CONSOLIDATED GROUP FINANCIAL RESULTS FOR THE SIX
MONTHS ENDED 30 SEPTEMBER 2008
Unaudited Unaudited Audited
30 September 30 September 31 March
2008 2007 2008
R `000 R `000 R `000
CONSOLIDATED BALANCE SHEETS
ASSETS
NON-CURRENT ASSETS
80 330 108 095 78 843
Investment property 59 033
59 033 88 181
Equipment 5
5 -
Investment in associate 16 888
property companies 18 408 16 575
Operating lease asset 2 917
2 884 3 339
NON-CURRENT ASSETS HELD FOR
SALE
Investment property 48 650
- -
CURRENT ASSETS
44 404 10 608 11 254
Trade and other receivables 709
2 141 1 290
Cash and cash equivalents 10 545
42 263 9 318
TOTAL ASSETS
124 734 118 703 138 747
EQUITY AND LIABILITIES
EQUITY AND RESERVES
Ordinary share capital
857 857 857
Retained income
- - -
NON-CURRENT LIABILITIES
122 116 114 151 131 588
Linked unit debenture
capital 857 857 857
Linked unit debentures
premium 119 971 90 636 116 952
Long-term liabilities
- 16 560 12 526
Deferred taxation
1 288 6 098 1 253
CURRENT LIABILITIES
1 761 3 695 6 302
Trade and other payables
1 503 2 519 2 367
Taxation
258 1 176 574
Current portion of long-
term liabilities - 3 361
TOTAL EQUITY AND
LIABILITIES 124 734 118 703 138 747
Unaudited Unaudited Audited
six months six months 12
months
30 September 30 September 31 March
2008 2007 2008
R `000 R `000 R `000
CONSOLIDATED INCOME
STATEMENTS
GROSS REVENUE
8 526 12 869 24 095
Rental income - contractual
8 402 12 469 23 940
-
straight-line accrual 124 400 155
TRADING PROFIT
2 141 5 075 10 031
Net realised loss on sale
of investments - - (1 952)
Net realised loss on sale
of investment properties - (2 026) (2 026)
Fair value adjustment to
investment properties - - 19502
Fair value adjustment to
debentures (426) (14 451) (40 767)
OPERATING PROFIT/(LOSS)
1 715 (11 402) (15 212)
Interest received
1 371 716 1 202
Debenture interest
(2 593) - -
Finance charges
(409) (2 709) (3 902)
PROFIT/(LOSS) BEFORE
TAXATION 84 (13 395) (17 912)
Taxation 17 912
(84) 13 395
PROFIT ATTRIBUTABLE TO
SHAREHOLDERS - - -
CASH FLOW STATEMENTS
Cash flow from operating
activities 476 (75) 2 139
Cash flow from investing
activities 47 129 40 600 40 600
Cash flow from financing
activities (15 887) (32 876) (33 863)
Net increase in cash and
cash equivalents 31 718 7 649 8 876
Cash and cash equivalents
at beginning of period 10 545 1 669 1 669
Cash and cash equivalents
at end of period 42 263 9 318 10 545
RECONCILIATION BETWEEN PROFIT ATTRIBUTABLE TO SHAREHOLDERS AND
HEADLINE EARNINGS
Shares are traded as part
of linked units
Profit attributable to
shareholders * - - -
Net realised loss on sale
of investments - - 1 952
Net realised loss on sale
of investment properties - 2 026 2 026
Fair value adjustment to
investment properties - - (19 502)
Fair value adjustment to
debentures 426 14 451 40 767
Headline earnings *
426 16 477 25 243
Interest distribution per
linked unit (cents) - - -
Basic earnings per linked
unit (cents) * - - -
Headline earnings per
linked unit (cents) * 0.5 19.2 29.4
Net asset value per linked
unit and net tangible asset 142.0 107.7 138.4
value per linked unit
(cents)**
* Headline earnings have been presented in accordance with IAS 33.
The linked unit structure of the group whereby every shareholder is a
debenture holder, coupled with the terms of the Debenture Trust Deed,
results in all profits which would be ordinarily attributable to
shareholders being reflected as a fair value adjustment to debentures
and debenture interest.
** Linked unit debentures are included in the net asset value and net
tangible asset value calculation
STATEMENT OF CHANGES IN
EQUITY
Share Total
capital
R`000 R`000
Balance at 1 April 2007
857 857
Profit for the six month
period - -
Balance at 30 September
2007 857 857
Profit for the six month
period - -
Balance at 31 March 2008
857 857
Profit for the six month
period - -
Balance at 30 September
2008 857 857
STATEMENT OF CHANGES IN LINKED UNIT
DEBENTURES
Linked unit Linked unit Total
debenture debenture
capital premium
R`000 R`000 R`000
Balance at 1 April 2007
857 76 185 77 042
Net fair value adjustment
- 14 451 14 451
Balance at 30 September
2007 857 90 636 91 493
Net fair value adjustment
- 26 316 26 316
Balance at 31 March 2008
857 116 952 117 809
Net fair value adjustment
- 426 426
Debenture interest
- 2 593 2 593
Balance at 30 September
2008 857 119 971 120 828
NOTES TO THE FINANCIAL STATEMENTS
Basis of preparation and accounting policies
The accounting policies applied in the preparation of these condensed
financial statements, which are based on reasonable judgements and
estimates, are in accordance with International Financial Reporting
Standards ("IFRS") and are consistent with those applied in the annual
financial statements for the year ended 31 March 2008. These condensed
financial statements as set out in this report have been prepared in
terms of IAS 34 - Interim Financial Reporting, the Companies Act, 1973
(Act 61 of 1973), as amended, and the Listings Requirements of JSE
Limited.
These condensed consolidated interim financial statements for the six
month period ended 30 September 2008 have not been audited or reviewed
by the group`s auditors and have been prepared on the fair value and
going concern bases.
Salient Features
Unaudited Unaudited Audited
30 September 30 September 31 March
2008 2007 2008
1. Linked unit statistics
(excluding treasury shares)
Number of linked units in 85 721 85 721 85 721
issue 788 788 788
Weighted average number of 85 721 85 721 85 721
linked units 788 788 788
2. Related party
transactions
The group, in the ordinary course of business, entered into various
purchase transactions with related parties on an arm`s length basis at
market rates.
3. Capital commitments
No capital commitments have been authorised.
SEGMENTAL INFORMATION
Unaudited Unaudited Audited
30 September 30 September 31 March
2008 2007 2008
Sectoral profile based on
income receivable
Commercial 92% 83% 81%
Residential 8% 17% 19%
Sectoral profile based on
gross lease area
Commercial 100% 85% 85%
Residential 0% 15% 15%
Regional profile based on
income receivable
Eastern Cape 40% 32% 31%
Free State 4% 3% 3%
Gauteng 25% 44% 45%
KwaZulu-Natal 31% 21% 21%
Regional profile based on
gross lease area
Eastern Cape 29% 11% 11%
Free State 9% 3% 3%
Gauteng 21% 71% 71%
KwaZulu-Natal 41% 15% 15%
Tenant profile based on
income receivable
A-grade tenant 36% 30% 27%
B-grade tenant 17% 15% 16%
C-grade tenant 47% 55% 57%
Tenant profile based on
gross lease area
A-grade tenant 32% 18% 17%
B-grade tenant 18% 9% 16%
C-grade tenant 50% 73% 67%
Vacancy profile based on
gross lease area
Gross lease area in metres
squared as at end of period 26 265 73 127 73 127
Vacancy area in metres
squared 8 940 23 624 25 548
Vacancy area as % gross 34% 32% 35%
lease area
Regional vacancy profile
Eastern Cape 6% 0% 2%
Free State 14% 5% 5%
Gauteng 45% 82% 81%
KwaZulu-Natal 35% 13% 12%
Sectoral vacancy profile
Commercial area 100% 100% 100%
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 acquisition of quality, high-yielding
properties. Accordingly, investment opportunities are being evaluated
for acquisition on an on-going basis.
Review of results
The group continued to produce pleasing results. Revenue and trading
profits declined primarily as a result of the disposal of Nedbank
Circle and Mangrove Beach Centre properties in the 2008 financial year
and the disposal of Kempton City and Broadway Nordic properties in the
period under review.
No profit is attributable to ordinary shareholders as the Debenture
Trust Deed states that 99.9% of profits are attributable to debenture
holders. As a result the benefit of improved trading performance is
expensed in the income statement as a fair value adjustment to
debentures and debenture interest. In the period under review, the
fair value adjustment to debentures and interest on debentures equates
to 3.5 cents per share.
The property portfolio under management decreased from R107.7 million
to R59.0 million as Kempton City and Broadway Nordic properties were
sold during the period under review. The receipt of proceeds from the
sale of these properties enabled Fairvest to settle all outstanding
property debt financing and resulted in a significant improvement in
cash and cash equivalents from R10.5 million to R42.3 million.
The net asset value per linked unit increased marginally from 138.4
cents to 142.0 cents in the six month period.
The strong balance sheet of the group has well positioned it to take
advantage of opportunities that may arise in the present uncertain
economic conditions.
Interest distributions
Interest on debentures has been calculated in terms of the Debenture
Trust Deed, however, in line with the company`s policy, no interest
distributions or dividends have been declared for the period under
review in respect of the linked units.
Directorate
The board is pleased to confirm the appointment of Ms Karen Peter as
its Financial Director effective 27 October 2008, as announced on SENS
on 28 October 2008.
Appreciation
We extend our appreciation to our directors, management and staff for
their valued efforts as well as our advisers, financiers and
shareholders for their continuing belief in and support of Fairvest.
For and on behalf of the
board
Directors
T A Bell (Chairman)
T P Botsis #
D A Johnston # *
K J Peter (Financial
Director)
A B Platt
J F du Toit #
# non-executive
* independent
Company Secretary
J A Lupton, ACIS
Registered office
9th Floor, Protea Hotel
Cnr 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
Merchantec (Proprietary)
Limited
Date: 21/11/2008 17:38:18 Produced by the JSE SENS Department.
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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,
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howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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