| Fri 12 Jun 2009, 11:28 | | HPA / HPB - Hospitality - Trading Statement |
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HPA HPB
HPA
HPA / HPB - Hospitality - Trading Statement
HOSPITALITY PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/014211/06)
Share code for A-linked units: HPA
ISIN for A-linked units: ZAE000076790
Share code of B-linked units: HPB
ISIN for B-linked units: ZAE000076808
("Hospitality" or "the Company" or "the Fund")
TRADING STATEMENT
In terms of the Listings Requirements of the JSE Limited, property entities
are required to publish a trading statement as soon as they are reasonably
certain that the distribution for the next distribution period will differ
by at least 15% from that of the previous corresponding period.
Although Hospitality`s year-end is 30 June, linked unitholders are advised
that the directors at this stage expect distributable earnings per B-linked
unit for the six months ending 30 June 2009 to be between 20% and 30% lower
than the corresponding period in the previous year. For the full year to 30
June 2009 the distribution of the B-linked unit is expected to decline by
between 4% and 9%.
The Fund`s total distributable earnings for the full financial year are
expected to be relatively flat and for the six months to 30 June 2009 to be
between 10% and 16% lower than the corresponding period in the previous
year. Unitholders are however reminded that the Fund`s units in issue
comprise A- and B- linked units, with A-linked units having a preferential
claim to earnings with capped growth and the B-linked units receiving the
balance of earnings. While the A-linked unit distributions for this period
will remain unaffected, any increase or decrease in the Fund`s
distributable earnings has a leveraging effect on the B-linked unit
distributions.
The distribution forecast has not been reviewed or reported on by the
Company`s auditors and the Company`s results for the year ending 30 June
2009 are expected to be released on SENS on or about 19 August 2009.
The expected decline in the B-linked unit distribution is a result of lower
than anticipated variable rental income received from the Fund`s properties
where there is exposure to operational earnings. This is due to the
unprecedented downturn in the hotel trading climate in South Africa where
demand across all major market segments has declined significantly over the
past few months. According to the Smith Travel Research Global Hotel
Benchmark Survey, average hotel occupancies in South Africa for the first
four months of 2009 declined by 15,1% when compared to the same period in
2008, with a resultant average revenue per available room (Revpar) decline
of 11,3%.
The effect of the global financial crisis which is being felt across all
sectors of the South African economy has become particularly evident in the
hospitality sector since the latter part of last year. Demand from the
corporate and conferencing market segments has been negatively impacted by
a general decline in both corporate and government expenditure, exacerbated
in the month of April by the number of public holidays and the National
Elections. Both domestic and foreign leisure demand have similarly weakened
over this period.
Management has implemented appropriate corrective measures such as
rationalising operations, cutting costs, repositioning certain properties
and targeting alternative source markets.
While trading conditions for the remainder of the 2009 calendar year are
likely to remain challenging, demand levels appear to be stabilising and
the outlook for calendar year 2010 remains positive with the prospect of
economic recovery and enhanced returns as a result of the lead up to and
the event of the FIFA World Cup 2010.
Johannesburg
12 June 2009
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 12/06/2009 11:28:47 Produced by the JSE SENS Department.
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