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ABT
ABT
ABT - Ambit Properties Limited - Unaudited financial results and distribution
for the six month period ended 31 March 2009
Ambit Properties Limited
Registration number: 2001/007003/06
Share code: ABT
ISIN code: ZAE000051645
Unaudited financial results and distribution for the six month period ended 31
March 2009
CONDENSED BALANCE SHEET
As at As at As at
31 March 31 March 30 September
2009 2008 2008
Unaudited Unaudited Audited
Notes R`000 R`000 R`000
ASSETS
Non-current assets
Investment 3.2 2 332 283 2 098 884 2 339 923
properties
- At valuation 2 395 400 2 129 850 2 388 753
- Straight-line (63 117) (30 966) (48 830)
adjustment
Investment in 3.4 139 558 136 225 133 075
associate
Rental receivable - 56 004 26 770 42 566
straight-line
adjustment
Total non-current 2 527 845 2 261 879 2 515 564
assets
Current assets
Investment in listed 3.5 8 666 - 8 486
property fund
Trade and other 26 045 37 002 22 921
receivables
Cash and cash 148 276 90 814 152 207
equivalents
Total current assets 182 987 127 816 183 614
Non-current assets 3.2 60 900 55 050 58 450
held for sale
TOTAL ASSETS 2 771 732 2 444 745 2 757 628
EQUITY AND
LIABILITIES
Share capital and 575 282 426 542 549 429
reserves
Non-current 2 044 826 1 919 031 2 054 804
liabilities
Debentures 908 230 853 247 908 230
Debenture premium 620 694 587 764 636 342
Interest-bearing 3.7 367 990 344 370 362 475
borrowings
Deferred taxation 147 912 133 650 147 757
liability
Current liabilities 151 624 99 172 153 395
Debenture interest 93 450 82 007 96 975
Trade and other 37 985 17 165 35 985
payables
Guarantee deposit 20 189 - 20 435
TOTAL EQUITY AND 2 771 732 2 444 745 2 757 628
LIABILITIES
CONDENSED INCOME STATEMENT
Six Six
months months
ended ended Year ended
31 March 31 March 30 September
2009 2008 2008
Unaudited Unaudited Audited
R`000 R`000 R`000
Revenue 153 389 115 582 257 745
- Rental - cash flows 139 102 104 727 229 027
inherent in leases
- Rental - straight-line 14 287 10 855 28 718
adjustment
Property expenses (31 838) (20 395) (48 109)
Net rental income from 121 551 95 187 209 636
properties
Interest income from 7 628 6 565 13 459
investments
Interest income 930 241 2 556
Amortisation of debenture 15 648 9 771 24 665
premium
Finance costs (12 479) (12 966) (22 894)
Administrative expenses (9 998) (8 855) (18 605)
Profit before fair value 123 280 89 943 208 817
adjustments
Change in fair value of (7 848) 31 390 138 849
investment and investment
properties
- As per valuations 6 259 42 245 169 077
- Straight-line adjustment (14 287) (10 855) (28 718)
- Fair value adjustment on 180 - (1 510)
listed property investment
Profit on disposal of 97 1 200 1 197
investment property
Fair value adjustment on (2 658) - (377)
interest rate swaps
Share of associate company`s 6 483 7 506 4 356
after tax profits
Profit before debenture 119 354 130 039 352 842
interest and taxation
Debenture interest - linked (93 346) (69 318) (155 434)
unitholders
Debenture interest paid (93 346) (82 011) (181 225)
Less: Prepaid distributions - 12 693 25 791
received and refunded
Profit before taxation 26 008 60 721 197 408
Taxation (155) (9 832) (23 938)
Net profit 25 853 50 889 173 470
Earnings per linked unit 23,62 30,97 74,08
(cents) (weighted)
Headline earnings per linked 20,19 13,11 39,36
unit (cents) (weighted)
Distribution per linked unit 18,50 17,30 36,50
(cents)
RECONCILIATION OF PROFIT FOR THE YEAR TO HEADLINE EARNINGS AND TO
DISTRIBUTABLE INCOME
Six Six
months months
ended ended Year ended
31 March 31 March 30 September
2009 2008 2008
Unaudited Unaudited Audited
R`000 R`000 R`000
Profit (earnings) after 25 853 50 889 173 470
taxation - attributable to
linked unitholders
Debenture interest 93 346 69 318 155 434
Total earnings - linked 119 199 120 207 328 904
units
Capital surpluses net of 4 781 (25 797) (125 130)
deferred tax
Change in fair value of 4 878 (24 597) (123 933)
investment properties
Profit on disposal of (97) (1 200) (1 197)
investment property
Amortisation of debenture (15 648) (9 771) (24 665)
premium
Share of associate company`s (6 483) (7 506) (4 356)
after tax profits
Headline earnings - linked 101 849 77 133 174 753
units
Rental straight-line (10 287) (7 815) (20 677)
adjustment - net of deferred
tax
Change in fair value of (130) - 1 087
listed property investment -
net of deferred tax
Change in fair value of 1 914 - 271
interest rate swaps - net of
deferred tax
Distributable income 93 346 69 318 155 434
Less: Debenture interest (93 346) (69 318) (155 434)
Income not distributed - - -
CONDENSED CASH FLOW STATEMENT
Six Six
months months
ended ended Year ended
31 March 31 March 30 September
2009 2008 2008
Unaudited Unaudited Audited
R`000 R`000 R`000
OPERATING ACTIVITIES
Cash generated by operating 94 755 74 134 214 507
activities
Interest income 8 558 6 806 16 015
Finance costs (12 479) (12 966) (22 894)
Distributions paid to (96 871) (27 401) (98 558)
linked unitholders
Cash (outflow)/inflow from (6 037) 40 573 109 070
operating activities
INVESTING ACTIVITIES
Improvements and (8 106) (27 106) (46 766)
capitalised costs to
investment properties
Acquisition of investment - - (9 996)
in listed property fund
Proceeds on disposal of 4 697 5 600 10 047
investment property
Cash outflow from investing (3 409) (21 506) (46 715)
activities
FINANCING ACTIVITIES
Interest-bearing 5 515 21 670 39 775
borrowings raised
Cash inflow from financing 5 515 21 670 39 775
activities
(Decrease)/increase in cash (3 931) 40 737 102 130
and cash equivalents
Cash and cash equivalents at 152 207 50 077 50 077
beginning of year
CASH AND CASH EQUIVALENTS AT 148 276 90 814 152 207
END OF YEAR
CONDENSED STATEMENT OF CHANGES IN EQUITY
Non-
Share Distributable distributable
capital reserves reserves Total
Reviewed R`000 R`000 R`000 R`000
Balance at 30 2 297 364 370 549 373 210
September 2007
Shares issued 2 443 - - 2 443
during the period
Net profit - 50 889 - 50 889
attributable to
linked unitholders
Transfer to non- - (50 889) 50 889 -
distributable
reserves
Balance at 31 4 740 364 421 438 426 542
March 2008
Shares issued 306 - - 306
during the period
Net profit - 122 581 - 122 581
attributable to
linked unitholders
Transfer to non- - (122 581) 122 581 -
distributable
reserves
Balance at 30 5 046 364 544 019 549 429
September 2008
Net profit - 25 853 - 25 853
attributable to
linked unitholders
Transfer to non- - (25 853) 25 853 -
distributable
reserves
Balance at 31 5 046 364 569 872 575 282
March 2009
COMMENTARY
1. OTHER INFORMATION
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2009 2008 2008
Unaudited Unaudited Audited
R`000 R`000 R`000
Linked units in issue 504 572 357 474 026 280 504 572 357
Weighted average linked 504 572 357 388 156 836 443 965 149
units
Net asset value (cents 436 411 434
per linked unit)(prior
to distribution)
Listed market price 395 350 375
(cents per linked unit)
Discount to net asset (9,4) (14,8) (13,6)
value (%)
2. NOTES TO FINANCIAL STATEMENTS
2.1 Basis of preparation and accounting policies
The interim report of Ambit Properties Limited ("Ambit") complies with
International Accounting Standard 34 - Interim Financial Reporting as well as
with Schedule 4 of the South African Companies Act (Act 61 of 1973, as
amended).
The report has been prepared using accounting policies that comply with the
recognition and measurement requirements of International Financial Reporting
Standards. The accounting policies are consistent with those used in the
annual financial statements for the year ended 30 September 2008.
2.2 Primary business segments - all amounts exclude straight-line adjustments
Retail Office Industrial Company
31 March 2009 R`000 R`000 R`000 R`000
Rental - cash flows 46 573 79 460 13 069 139 102
inherent in leases
Net rental income 32 761 63 953 10 550 107 264
from properties
Fair value 1 609 4 110 540 6 259
adjustment
Profit on disposal - - 97 97
of investment
property
Investment 845 100 1 384 300 226 900 2 456 300
properties - at
valuation*
31 March 2008
Rental - cash flows 37 620 56 301 10 806 104 727
inherent in leases
Net rental income 28 715 46 894 8 723 84 332
from properties
Fair value 22 595 13 100 6 550 42 245
adjustment of
investment
properties
Profit on disposal - - 1 200 1 200
of investment
properties
Investment 709 700 1 286 550 188 650 2 184 900
properties - at
valuation*
* including non-current assets held for sale
3. COMMENTS
3.1 Results
Ambit`s distribution for the half year to 31 March 2009 has increased by 7% to
18,50 cents per unit (cpu) (2008: 17,30 cpu).
The market price of the units traded on the JSE at 31 March 2009 was 395 cpu
(2008: 350 cpu) which represents a discount to net asset value of 9,4%.
Unbudgeted expenditure of R1,4 million has been incurred as a result of the
corporate action by ApexHi Properties Limited ("ApexHi"). This amount was
predominantly spent on legal costs to protect the interests of Ambit`s
unitholders.
3.2 Property portfolio
The property portfolio of 39 properties was valued by the directors as at 31
March 2009 at R2,456 million. The portfolio has an office sector bias with (by
value) 56% office, 35% retail and 9% industrial and is predominantly located
in Gauteng (71%). The valuation increase of R6,3 million since year end is a
function of increased rentals largely offset by generally higher
capitalisation rates resulting from the declining economic climate which is
also affecting the property market.
A purchase agreement in respect of a 4 249m2 stand in the Gauteng Business
Park in Clayville was signed for a purchase price of R2,5 million.
One property was disposed of during the period for a consideration of R4,7
million.
Several smaller properties have been earmarked for sale and have been
classified as such on the balance sheet at a value of R60,9 million. These
properties will be disposed of when the required sale price can be achieved.
Agreements have been signed to dispose of two of these properties for a
combined consideration of R11,1 million representing an exit yield of 9,2%.
Phase 2 of the Link development in Pinetown has been completed. Negotiations
are underway with various prospective tenants for the remaining vacant space.
Phase 3 will commence once a lease has been concluded with a prospective
tenant. Ambit has a 50% share in this development which will have a total
rentable area of 15 926m2.
3.3 Letting activity
A high level of tenant retention on lease expiry of 97% has been achieved. The
portfolio has a 96,0% (2008: 98,1%) occupancy and the increase in vacancies is
due to tougher trading conditions largely in the retail sector. The total
gross lettable area is 312 846m2.
3.4 Investment in associate - Oryx Properties Limited
Ambit`s 26,4% interest in Oryx Properties Limited ("Oryx") increased in value
by R6,5 million to R139,6 million due to the increase in net asset value of
Oryx to 949 cpu (2008: 931 cpu). The current market price of this illiquid
counter is in excess of the net asset value.
3.5 Listed property investment
This investment in listed property unit trust SA Corporate Real Estate Fund
increased in value by R0,2 million since year end.
3.6 Net asset value
The revaluation of investment properties has given rise to a fair value
adjustment of R6,3 million (2007: R42,2 million).
The net asset value, before making provision for the debenture interest
payable but after providing for deferred taxation is 436 cpu, an increase of
6,1% on 2008 (411 cpu).
3.7 Borrowings
At 31 March 2009 Ambit`s long-term debt was R368 million (2008: R344 million),
which represents a long-term debt to non-current assets ratio of 14,6% (2008:
14,0%). Of this debt 72% (2008: 61%) is subject to fixed interest rate
agreements for periods from 2010 to 2012. The average interest rate at 31
March 2009 was 10,4% (2008: 10,7%). Surplus cash is invested at Ambit`s
variable borrowing rate of 200 basis points below the prime rate.
3.8 Contingent liability
A potential obligation for termination payments in terms of the employment
contracts of the two executive directors exists in terms of the scheme
proposed by ApexHi (Refer note 3.14). This obligation will only be confirmed
on the fulfilment of all the suspensive conditions to the scheme and is
estimated to amount to R10 million.
3.9 Related party transactions
Ambit is managed by Ambit Management Services (Pty) Limited, which is owned by
Absa Bank Limited.
All transactions with both these parties are concluded on an arm`s length
basis with market related terms and conditions.
3.10 Directorate
Shaun Rai and Robert Emslie resigned as non-executive directors from Ambit`s
board and James Slabbert was appointed as a non-executive director with Rob
Wesselo as his alternate.
3.11 Post balance sheet events
Agreements have been signed to acquire the Hartmann & Keppler property in
Bryanston for a consideration of R19,0 million and a yield of 10,0% as well as
building number 2 in the Boskruin Office Park for R16,9 million and a yield of
10,5%.
3.12 Prospects
Ambit`s property fundamentals remain firm with relatively low vacancies and
arrears whilst satisfactory lease renewals have been achieved. Deteriorating
trading conditions, particularly in the retail sector, are evident though.
3.13 Fund performance
The Board is pleased to record that the results of the performance of Ambit,
for the calendar year ending 31 December 2008, as measured by two independent
sources, are as follows:
- Catalyst Fund Managers: In terms of distribution growth combined with
unit price movement Ambit was rated the number one performing fund of the
listed property sector.
Investment Property Databank (IPD): In terms of distribution growth
combined with capital asset (property) growth Ambit was rated the number
two performing fund of the measured listed property sector.
The Board would like to thank the staff and the stakeholders of Ambit, without
whom, these excellent results would not be possible.
3.14 Scheme of arrangement
A circular dated 16 April 2009 has been issued to Ambit linked unithoIders
relating to a scheme of arrangement in terms of section 311 of the Companies
Act, proposed by ApexHi between ApexHi and Ambit`s linked unit holders.
4. DECLARATION OF DISTRIBUTION
Notice is hereby given of distribution number ten amounting to 18,5 cpu
interest on debentures, for the six month period to 31 March 2009.
Last date to trade cum distribution Friday, 22 May 2009
Units will trade ex distribution Monday, 25 May 2009
Record date to participate in the Friday, 29 May 2009
distribution
Payment of distribution Monday, 1 June 2009
Linked unit certificates may not be dematerialised or rematerialised between
Monday, 25 May 2009 and Friday, 29 May 2009, both days inclusive.
On behalf of the Board
JH Beare KF Clinton
Chairman Chief Executive Officer
7 May 2009
Directors:
JH Beare (Chairman)+, KF Clinton (Chief Executive Officer)*
DJ Brits+, J de Beer (Chief Operations Officer)*
NBS Harris, IN Mkhari+, IB Skosana+, JN Slabbert, F Uys+
Alternate directors:
RN Wesselo *executive +independent
Registered office:
Ambit Properties Limited
First Floor, World Wide House
29 Impala Road, Chislehurston, Sandton, 2196
Postal address:
PO Box 618, Melrose Arch, 2076
Auditors:
Deloitte & Touche Chartered Accountants (SA)
Sponsors:
Grindrod Bank Limited
Transfer secretaries:
Computershare Investor Services (Pty) Limited
http://www.ambitprops.co.za
news@ambitprops.co.za
Date: 07/05/2009 11:06:01 Produced by the JSE SENS Department.
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