| Mon 24 Aug 2009, 7:05 | | HYP - Hyprop - Reviewed results for the six months ended 30 June 2009 |
|
HYP
HYP
HYP - Hyprop - Reviewed results for the six months ended 30 June 2009
Hyprop Investments Limited
(Incorporated in the Republic of South Africa)
(Registration No. 1987/005284/06)
Share Code: HYP
ISIN Code: ZAE000003430
("Hyprop" or "the company")
REVIEWED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2009
- 7.3% increase in distribution per combined unit to 161 cents
- NAV excl. deferred tax R49,19 per combined unit
- Total assets R10 billion
STATEMENT OF COMPREHENSIVE INCOME
Reviewed Reviewed Audited
30 June 30 June 31 Dec
2009 2008 2008
R`000 R`000 R`000
Revenue 434 136 367 823 781 343
Investment property income 362 983 311 343 658 674
Straight-line rental income 11 425 6 714 15 769
accrual
Listed property securities income 59 728 49 766 106 900
Property expenses (114 346) (91 584) (205 209)
Net property income 319 790 276 239 576 134
Other operating expenses (22 826) (20 268) (41 353)
Operating income 296 964 255 971 534 781
Net interest (24 659) (3 791) (17 080)
Received 18 592 25 688 39 408
Paid (43 251) (29 479) (56 488)
Net operating income 272 305 252 180 517 701
Non-core income 449 1 136 1 871
Change in fair value (63 376) (479 063) 157 091
Investment property 149 032 225 630
Straight-line rental income (11 425) (6 714) (15 769)
accrual
Listed property securities (178 528) (472 349) (52 770)
Derivative instruments (22 454)
Profit on disposal of investment 9 131 8 392
property
Amortisation of debenture premium 48 249 42 053 85 492
Amortisation of financial guarantee 4 139
for associate 357 871
Income before debenture interest 257 985 (173 692) 774 686
Debenture interest (267 442) (249 170) (511 629)
Net income before share of income
from associate (9 457) (422 862) 263 057
Share of income from associate 5 385 3 370 (11 799)
Profit before taxation (4 072) (419 492) 251 258
Taxation (16 735) 129 620 100 615
Total comprehensive income for the (20 807) (289 872) 351 873
period
Reconciliation - headline earnings
and distributable earnings
Net income after taxation - 351 873
attributable to Hyprop combined (20 807) (289 872)
unitholders
Headline earnings adjustments 168 365 244 873 356 598
Change in fair value of investment (157 993)
property (net of deferred (107 303)
taxation)
Straight-line rental income
accrual 8 226 4 834 11 354
(net of deferred taxation)
Profit on disposal of investment (9 131) (8 392)
property
Debenture interest 267 442 249 170 511 629
Headline earnings 147 558 (44 999) 708 471
Distributable earnings adjustments 119 401 295 463 (196 220)
Change in fair value of listed
property 153 534 406 220 45 382
securities (net of deferred
taxation)
Change in fair value of derivative
instruments 22 454
Deferred taxation (63 491) (160 865)
Amortisation of debenture premium (48 249) (42 053) (85 492)
Amortisation of financial
guarantee for (357) (871) (4 139)
associate
Straight-line rental income (11 354)
accrual (8 226) (4 834)
(net of deferred taxation)
Share of income from associate 20 248
(Change in
fair value and straight-line 245 492
rental income
accrual)
Distributable earnings 266 959 250 464 512 251
Total combined units in issue 166 113 166 113 166 113
169 169 169
Weighted average combined units in 166 113 166 113 166 113
issue 169 169 169
Earnings per combined unit 148,5 (24,5) 519,8
Headline earnings per combined unit 88,8 (27,1) 426,5
Distributable earnings per combined 160,7 150,8 308,4
unit
Distribution details
Total distribution for the year 161,00 150,00 308,00
Six months ended 31 December 158,00
Six months ended 30 June 161,00 150,00 150,00
STATEMENT OF FINANCIAL POSITION
Reviewed Reviewed Audited
30 June 30 June 31 Dec
2009 2008 2008
R`000 R`000 R`000
Assets
Non-current assets 9 681 125 8 374 706 9 362 622
Investment property 8 213 396 7 153 112 7 695 869
Building appurtenances and tenant 21 091
installations 19 119 20 932
Investment in associate 159 671 198 794 178 983
Loan receivable 46 021 45 232
Listed property securities 1 242 918 1 001 868 1 421 447
Current assets 296 984 457 119 126 026
Receivables 58 750 53 152 59 936
Cash and cash equivalents 238 234 403 967 66 090
Total assets 9 978 109 8 831 825 9 488 648
Equity and liabilities
Equity
Share capital and reserves 4 226 374 3 605 437 4 247 182
Liabilities
Non-current liabilities 5 368 699 4 895 818 4 878 116
Debentures and debenture premium 2 608 153 2 699 840 2 656 401
Long-term loans 1 400 000 900 000 900 000
Derivative instruments 22 454
Financial guarantee for associate 1 310 4 936 1 668
Deferred taxation 1 336 782 1 291 042 1 320 047
Current liabilities 383 036 330 570 363 350
Payables 115 594 81 400 100 891
Combined unitholders for distribution 267 442 249 170 262 459
Total liabilities 5 751 735 5 226 388 5 241 466
Total equity and liabilities 9 978 109 8 831 825 9 488 648
Net asset value per combined unit (R) 41,14 37,96 41,56
Net asset value per combined unit
- excluding deferred taxation liability 49,19 45,73 49,51
(R)
ABRIDGED GROUP STATEMENT OF CHANGES IN EQUITY
Reviewed Reviewed Audited
30 June 2009 30 June 2008 31 Dec 2008
R`000 R`000 R`000
Balance at beginning of the period 4 247 182 4 832 041 4 832 041
De-consolidation of minority (936 732) (936 732)
interests
Total comprehensive income for the (20 807) (289 872) 351 873
period
Attributable to minorities
Balance at end of the period 4 226 375 3 605 437 4 247 182
ABRIDGED STATEMENT OF CASH FLOWS
Reviewed Reviewed Audited
30 June 30 June 31 Dec 2008
2009 2008
R`000 R`000 R`000
Cash flows from operating 42 440 3 290 35 396
activities
Cash generated from operations 304 860 239 639 526 801
Interest received 18 592 25 688 39 408
Interest paid (43 251) (29 479) (56 488)
Distribution to Hyprop combined
unitholders (262 459) (232 558) (481 728)
Income from associate 24 698 7 403
Cash flows from investing (370 296) 317 314 (7 436)
activities
Cash flows from financing 500 000 (45 232)
activities
Net increase in cash and cash 172 144 320 604 (17 272)
equivalents
Cash and cash equivalents at
beginning of the period 66 090 88 322 83 362
Deconsolidation of minority
interest in cash and cash (4 959)
equivalents
Cash and cash equivalents at end 66 090
of the period 238 234 403 967
FINANCIAL RESULTS
Hyprop, a property loan stock company which owns premium quality regional and
super regional shopping centres across South Africa, continued to achieve
growth in distributions to unitholders for the six months ended 30 June 2009
("the period").
Hyprop has declared an interim distribution of 161 cents per combined unit, an
increase of 7.3% on the distribution for the comparable period.
30 June 30 June 2009 30 June 30 June 2008
2009 2008
Revenue Distributable Revenue Distributable
earnings earnings
Business segment (R`000) (R`000) (R`000) (R`000)
Canal Walk 155 032 110 126 141 047 100 108
The Glen 51 180 34 557 42 904 32 086
Hyde Park 58 706 37 591 50 685 34 570
The Mall of Rosebank 45 220 33 939 42 295 29 334
Southcoast Mall 10 063 6 658 8 948 6 359
Stoneridge 23 400 12 289
Shopping centres 343 600 235 160 285 879 202 457
Offices 19 382 13 477 25 464 17 302
Investment property 362 983 248 637 311 343 219 759
Listed property 59 728 59 728 49 766 49 766
securities
Straight-line rental 11 425 11 425 6 714 6 714
income accrual
434 136 319 790 367 823 276 239
Fund management (22 826) (20 268)
expenses
Net interest paid (24 659) (3 791)
Net operating income 272 305 252 180
Non-core income 449 1 136
Share of income from 5 630 3 862
associate
Straight-line rental (11 425) (6 714)
income accrual
Total 434 136 266 959 367 823 250 464
On a comparative basis (excluding Stoneridge and Offices), total revenue
increased by 12% while property expenses grew by 17%, mainly due to increases
in municipal rates and electricity costs, contributing to 10% growth in net
property income.
Vacancies at 30 June 2009 increased to 4.4% (31 December 2008:3.3%), mainly
due to vacancies at Stoneridge.
PROPERTY PORTFOLIO
Value Value
attributable attributable
to Hyprop to Hyprop
Rentable June 2009 December 2008 Value per
area rentable
area
Business segment (m2) (R`000) (R`000) (R/m2)
Canal Walk 135 271 3 526 894 3 368 000 32 591
The Glen 55 729 1 087 166 1 083 747 25 957
Hyde Park 36 894 1 218 524 1 217 000 33 028
The Mall of Rosebank 33 774 900 000 880 000 26 648
Southcoast Mall 29 361 160 000 165 000 10 899
Stoneridge 50 241 445 500 463 500 9 852
Shopping Centres 341 270 7 338 084 7 177 247 25 753
Offices 44 523 436 974 281 600 9 599
Investment property 386 793 7 775 058 7 458 847 24 861
Development property 456 518* 257 095*
Listed property 1 242 918 1 421 447
securities
Investment in 159 671 178 983
associate
Total 386 793 9 634 165 9 316 372
*Construction costs incurred on additional retail at The Glen, Canal Walk and
Southern Sun Hyde Park
Investment Property
Old Mutual Investment Group: Property Investments (Pty) Ltd updated the
valuations prepared by them at year-end to determine an independent valuation
of the Hyprop portfolio at 30 June 2009. Development property was valued at
cost.
Investment property increased in value by R149 million to R7.8 billion, a 2%
increase.
Expansion programme
Additional Additional Southern
Retail Retail Sun
Canal Walk The Glen Hyde Park Total
R`000 R`000 R`000 R`000
Capital commitment (Hyprop 200 673 278 965 180 054 659 692
share)
Spent to 30 June 2009 (177 106) (167 936) (111 476) (456 518)
To be spent 23 567 111 029 68 578 203 174
Size 15 541m2 19 400m2 132 rooms
Budgeted initial yield (%) 8,1 10,9 11,4
Anticipated completion date Complete Nov 09 Sep 09
The additional retail at Canal Walk and The Glen is 90% and 98% let,
respectively. The expected initial yield in respect of the additional retail
at Canal Walk has reduced to 8.1% due to two major leases being concluded at
rentals below budget.
Initial forecasts in respect of Southern Sun Hyde Park indicate a challenging
first six months of operation, followed by anticipated higher occupancy rates
in the run-up to and through the World Cup event in 2010.
Acquisitions
Hyprop acquired Cradock Heights and a 70% undivided share in Nedbank Gardens
for R67 million and R84 million, respectively. The acquisitions are in line
with Hyprop`s strategy to invest in nodes with strong growth potential.
LISTED PROPERTY SECURITIES
Distributable earnings from listed property securities grew by 20% arising
from an increase in distributions from Sycom and the additional 10.4 million
Sycom units purchased in the first half of 2008.
The investment in Sycom was valued at R1.2 billion at 30 June 2009 based on
the closing price on that date of R16.50 per unit, resulting in a write-down
of R179 million since year-end.
NET ASSET VALUE
The net asset value per combined unit ("NAV") at 30 June 2009 was R41.14
(R41.56 at 31 December 2008).
Excluding deferred taxation, NAV was R49.19, a premium of 28% to Hyprop`s
closing combined unit price of R38.55 on 30 June 2009.
BORROWINGS
Current net borrowings of R1.16 billion equate to a gearing ratio of 12.1%.
Long-term loans of R1.35 billion, representing 96% of total debt, have been
fixed for periods of between three and five years at an average rate of 9.38%
(2008:9.54%). In addition Hyprop has R50 million in floating debt.
MANAGEMENT CONTRACT
Hyprop`s asset and property management agreements with Madison Property Fund
Managers ("Madison") expire on 31 December 2009. The management agreement in
respect of The Glen expired on 31 May 2009.
Property asset management will be internalised from 1 January 2010.
Subject to unitholder approval, agreement has been reached in principle with
Redefine Income Fund Limited (which recently acquired Madison), in terms of
which Redefine will provide consultancy services to Hyprop for an initial
period of one year at a fee of R18 million.
DIRECTORATE
Mike Rodel was appointed to the board as CEO effective 1 August 2009.
PROSPECTS
Hyprop`s properties have sustainability for long term investment. The
company`s prime retail investments have proven resilient in tough trading
conditions and have enabled the portfolio to withstand some of the pressures
of the economic recession and declining national retail sales.
The board anticipates that, barring a further deterioration in retail market
conditions, Hyprop`s distribution for the six months ending 31 December 2009
will be between 167 cents and 171 cents per combined unit. This forecast has
not been reviewed or reported on by Hyprop`s auditors.
PAYMENT OF DEBENTURE INTEREST
Distribution 43 of 161 cents per combined unit for the six months ended 30
June 2009 will be paid to combined unitholders as follows:
September 2009
Last day to trade cum distribution Thursday 17
Combined units trade ex distribution Friday 18
Record date Friday 25
Payment date Monday 28
Unitholders may not dematerialise or rematerialise their combined units
between Friday, 18 September 2009 and Friday, 25 September 2009, both days
inclusive.
BASIS OF PREPARATION AND REVIEW OPINION
This interim report has been prepared in accordance with International
Financial Reporting Standards and International Accounting Standard IAS 34
`Interim Financial Reporting`.
The accounting policies applied are consistent with those applied in the most
recent audited financial statements.
The company`s auditors, Grant Thornton, have reviewed the financial
information set out in this interim report. Their unqualified review report is
available for inspection at the company`s registered office. The accounting
policies applied are consistent with those applied in the most recent audited
financial statements, except for the adoption of IAS1 "Presentation of
Financial Statements" and IFRS 8 "Operating Segments".
The adoption of IAS 1 makes certain changes to the format and titles of the
financial statements and to the presentation of some items within these
statements. The measurement and recognition of Hyprop`s assets, liabilities,
income and expenses remain unchanged.
The adoption of IFRS 8 has not affected the identified operating segments of
the company.
On behalf of the board.
MS Aitken
Chairman
LR Cohen
FD
24 August 2009
DIRECTORS
MS Aitken*^ (Chairman); MF Rodel (CEO); LR Cohen (FD); WE Cesman* (alt JA
Finn); EG Dube*; JR McAlpine*^; LI Weil*^; S Shaw-Taylor*; MY Sibisi*^; M
Wainer*
(* Non-executive ^ Independent)
REGISTERED OFFICE; 3rd Floor, Hyde Park Shopping Centre, Jan Smuts Avenue,
Sandton, 2196 (PO Box 41257 Craighall 2024)
TRANSFER SECRETARIES: Computershare Investor Services (Proprietary) Limited,
Ground Floor 70 Marshall Street, Johannesburg (PO Box 61051, Marshalltown
2107)
ASSET MANAGER: Madison Property Fund Managers Limited
COMPANY SECRETARY: Probity Business Services (Proprietary) Limited
SPONSOR: Java Capital (Proprietary) Limited
INVESTOR RELATIONS: Envisage Investor & Corporate Relations
Date: 24/08/2009 07:05:12 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
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,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
