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ORE
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ORE - Orion Real Estate - Reviewed results for the year ended 30 June 2009 and
notice of annual general meeting
Orion Real Estate Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/021085/06)
Share code: ORE ISIN: ZAE000075651
("Orion" or "the company")
Reviewed results for the year ended 30 June 2009
and notice of annual general meeting
1. Commentary
The Board of Directors presents the Group`s reviewed results for the year ended
30 June 2009. The results have been prepared in accordance with International
Financial Reporting Standards ("IFRS"), the JSE Limited Listings Requirements
and the requirements of the South African Companies Act, 1973, as amended.
The accounting policies have been consistently applied to all the years
presented and to years prior to transition to IFRS, unless stated otherwise.
The results have been reviewed by the company`s auditors SAB&T Incorporated,
whose unmodified reviewed report is available for inspection at the registered
office of the company.
2. Financial and operational overview
During the reporting period the Group has managed to strengthen their overall
financial position substantially. The transfer of all the Gmeiner buildings has
provided the Group with the required critical mass and the benefits of
economies of scale realised. The turnover has improved from R23.81 million to
R47.43 million. The operating profit improved from R11.14 million to R14.24
million. The transfers of the buildings and fair value adjustments have
increased the portfolio value from R271.12 million to R568.48 million.
Although the portfolio has lost some tenants in the adverse market conditions
the portfolio has also experienced substantial gains, where tenants have scaled
down from expensive lease agreements elsewhere to more affordable levels within
the Orion portfolio. The Group has also experience a slower cash flow from the
existing tenant base but bad debts were kept under control through tight credit
control measures and comprehensive screening of tenants.
The restructuring of the developments division, with the active involvement of
the Managing Director, is also starting to show improved results and as a
result projects that remained static for some time are now moving forward to
enable the Group to start reaping benefits and to unlock the value of the
existing pieces of development land.
During the current financial period the upgrading and redevelopment of existing
buildings have also been a priority and this strategy has started to bear
fruit. Additional rental space, income and new tenants have for instance been
introduced at Orion House in Braamfontein and the ACA Building in Auckland
Park.
The redevelopment of Orion Centre has also become a priority and the
development of a conferencing hotel with 100 rooms and the inclusion of
available apartments in the tower block as part of a rental pool would assist
to meet the demand for conferencing facilities close to the OR Tambo airport.
The vacant land next to the tower block has been rezoned and permission was
received for the development of a 32-storey hotel. The planning of this major
future project will also be attended to in the new financial year.
The development of the R2 billion mixed use development in Bethlehem, Eastern
Free State, that was delayed for some time, has now reached a state were
administrative processes are at an advanced stage making it possible to proceed
with the development through a phased approach, taking cognisance of economic
trends and developments.
3. Dividends
No dividends were paid or declared during the financial period.
4. Linked units issued
The following numbers of linked units were issued for the transfer of the
various properties:
Wartburg Property 2 000 000 linked units
Gordon`s Bay Property 3 333 333 linked units
IXIA Treasury Shares 3 688 866 linked units
Marlboro Properties 26 470 588 linked units
Wendywood Shopping Centre 36 470 588 linked units
Orion House 120 000 000 linked units
ACA Kranz Building 72 352 941 linked units
Laser Park Properties 88 235 294 linked units
The linked units for the transfer of the Kent Avenue property has not yet been
approved but will be the issue of 51 208 521 linked units.
5. Change to Board of Directors
There were no changes to the Board of Directors.
6. Prospects
The finalisation of the transfer of the Gmeiner properties has strengthened the
portfolio and the benefits of economies of scale will improve future results
substantially. The current state of the economy might inhibit results in the
immediate future, but improved conditions would immediately benefit the
portfolio.
Available opportunities would also be considered with care and where value
could be added such opportunities would be pursued.
7. Notice of general meeting
Shareholders are advised that the annual general meeting will be held at 10:00
on Thursday, 21 January 2010 in the Boardroom, 16th Floor, Orion House, 49
Jorissen Street, Braamfontein, Johannesburg.
30 September 2009
Directors
R S Wilkinson, F M Viruly, A Boessenkool, A C Gmeiner, F Gmeiner (MD),
C B Nolte (FD)
Company secretary and registered office
Corporate Governance Facilitators CC
Sponsor
Arcay Moela Sponsors (Pty) Limited
Transfer office
Computershare Investor Services (Pty) Limited
Balance Sheet
Group
Reviewed Audited
Figures in Rand 2009 2008
ASSETS
Non-current assets 573 627 305 273 954 575
Investment property 568 480 000 271 128 511
Furniture, plant and equipment 625 701 131 640
Investments in subsidiaries and
controlled trusts - -
Loans to related parties
Loans to group companies
Other financial assets 4 521 605 2 694 424
Current assets 15 088 107 7 664 911
Trade and other receivables 14 992 425 7 656 696
Cash and cash equivalents 95 682 8 215
Assets of disposal group 39 303 857
Total assets 588 715 413 320 923 343
EQUITY AND LIABILITIES
Capital and reserves
Share capital 62 288 101 5 695 799
Retained earnings 178 279 312 53 825 701
Share capital and reserves 240 567 413 59 521 500
Linked debentures 55 074 867 49 939 573
Linked unitholders` interest 295 642 280 109 461 073
Minority shareholders` interest (171 185) (60 522)
295 471 094 109 400 551
278 045 326 158 512 997
Liabilities
Long-term liabilities 197 977 736 104 337 425
Deferred taxation 40 474 909 22 642 602
Loans from shareholders 13 093 604 31 458 012
Loans from group companies - -
Loans from related parties 26 499 076 74 958
Current liabilities 15 198 994 10 272 827
Current tax payable 895 724
Trade and other payables 6 178 898 6 641 055
Provisions 160 724 130 853
Short-term portion of long-term
liabilities 8 859 372 2 605 195
Liabilities of disposal group - 42 736 968
Total liabilities 293 244 320 211 522 792
Total equity and liabilities 588 715 413 320 923 343
Company
Reviewed Audited
Figures in Rand 2009 2008
ASSETS
Non-current assets 319 084 717 83 649 972
Investment property 35 750 000 -
Furniture, plant and equipment 2 731 3 999
Investments in subsidiaries and
controlled trusts 21 028 964 21 028 965
Loans to related parties 40 475 901 44 404 640
Loans to group companies 221 827 122 18 212 368
Other financial assets - -
Current assets 75 062 849 630
Trade and other receivables 70 358 849 630
Cash and cash equivalents 4 703 -
Assets of disposal group - -
Total assets 319 159 779 84 499 602
EQUITY AND LIABILITIES
Capital and reserves
Share capital 62 284 501 5 786 021
Retained earnings 136 893 148 9 267 268
Share capital and reserves 199 177 648 15 053 289
Linked debentures 55 074 867 51 549 351
Linked unitholders` interest 254 252 516 66 602 640
Minority shareholders` interest - -
254 252 516 66 602 640
63 377 748 17 358 499
Liabilities
Long-term liabilities 16 520 114 -
Deferred taxation 28 469 334 9 847 202
Loans from shareholders 12 500 000 -
Loans from group companies 5 888 301 7 511 297
Loans from related parties - -
Current liabilities 1 529 518 538 464
Current tax payable - -
Trade and other payables 402 657 538 464
Provisions 146 974 -
Short-term portion of long-term
liabilities 979 886 -
Liabilities of disposal group - -
Total liabilities 64 907 266 17 896 963
Total equity and liabilities 319 159 779 84 499 602
Income Statement
Group
Reviewed Audited
Figures in Rand 2009 2008
Continued operations
Gross revenue 47 429 151 23 810 399
Recoveries 9 145 054 3 976 666
Operating costs (42 335 353) (16 651 056)
Operating profit/(loss) 14 238 852 11 136 009
Interest income 895 692 328 749
Provision for bad debts (1 998 408) (1 174 746)
Provision for leave (38 921) -
Accrued profit distribution from
controlled trust - -
Loans written back - 278 190
Impairment of loan - (57 128)
Straight-line operating lease
adjustment 2 376 020 (2 380 027)
Fair value adjustments on
investment properties 144 154 501 40 769 338
Impairment of non-current asset
available for sale - (738 527)
Profit on sale of assets held for sale - 1 073 035
Profit on sale of investment property 4 803 725 3 389 617
Profit on sale of shares 2 195 071 -
Finance charges (23 813 769) (17 319 519)
Profit before taxation 142 812 761 35 304 991
Taxation (18 530 337) (6 028 341)
Profit for year from continued
operations 124 282 425 29 276 650
Discontinued operations
Loss for the period from
discontinued operations - (8 473 005)
Profit for the year before minority
interest 124 282 425 20 803 645
Minority shareholders` interest 110 663 56 386
Profit for the year 124 393 088 20 860 031
Earnings per share (cents) 52.88 9.89
Diluted earnings per share (cents) 21.54 9.89
Headline profit per share (cents) (2.43) (4.63)
Diluted headline profit per share (cents) (2.43) (4.63)
Net asset value per share at
year-end (cents) 50.99 48.21
Number of shares at year-end 579 490 167 226 938 557
Weighted number of shares 235 214 362 210 923 488
Diluted number of shares 577 556 243 210 923 488
Company
Reviewed Audited
Figures in Rand 2009 2008
Continued operations
Gross revenue - 1 278 000
Recoveries - -
Operating costs (4 676 819) (3 957 718)
Operating profit/(loss) (4 676 819) (2 679 718)
Interest income - -
Provision for bad debts - -
Provision for leave (38 921) -
Accrued profit distribution from
controlled trust 145 213 753 18 180 851
Loans written back - -
Impairment of loan - -
Straight-line operating lease
adjustment - -
Fair value adjustments on
investment properties 5 750 000 -
Impairment of non-current asset
available for sale - -
Profit on sale of assets held for sale - -
Profit on sale of investment property - -
Profit on sale of shares
Finance charges - (21)
Profit before taxation 146 248 012 15 501 112
Taxation (18 622 132) (3 652 141)
Profit for year from continued
operations 127 625 880 11 848 971
Discontinued operations
Loss for the period from
discontinued operations - -
Profit for the year before minority
interest - -
Minority shareholders` interest - -
Profit for the year 127 625 880 11 848 971
Earnings per share (cents)
Diluted earnings per share (cents)
Headline profit per share (cents)
Diluted headline profit per share (cents)
Net asset value per share at
year-end (cents)
Number of shares at year-end
Weighted number of shares
Diluted number of shares
Cash Flow Statement
Group
Reviewed Audited
Figures in Rand 2009 2008
Net cash flow from operating
activities (13 364 798) (13 823 470)
- Cash generated from operations 9 553 280 3 167 300
- Interest received 895 692 328 749
- Interest paid (23 813 769) (17 319 519)
Net cash outflow from investing
activities (147 274 095) (11 805 178)
- Acquisition/Development of
investment property for sale - 13 321 930
- Acquisition of investment
properties 163 901 374 (79 476 175)
- Proceeds on disposal of
investment property (9 190 230) 41 189 617
- Profit distribution from
Orion Property Holdings Trust - -
- Loans advanced to group companies 54 277 -
- Repayment of loans from group
companies - -
- Loans advanced to related parties (26 424 118) -
- Proceeds from loans from
shareholders 18 364 408 31 458 012
- Loans from related parties repaid - (18 241 474)
- Acquisition of furniture, plant
and equipment 568 383 (57 088)
Net cash inflow from financing
activities 160 726 360 25 636 563
- Long-term liabilities raised 93 640 311 27 643 545
- Short-term portion of long-term
liabilities raised 5 358 453 729 096
- Liabilities of disposal group repaid (8 536 079)
- Proceeds from share issue 56 592 302 341 177
- Proceeds from issue
of linked units 5 135 294 5 458 824
Net increase in cash and
cash equivalents 87 467 7 915
Cash and cash equivalents
at the beginning of the year 8 215 300
Cash and cash equivalents
at the end of the year 95 682 8 215
Company
Reviewed Audited
Figures in Rand 2009 2008
Net cash flow from operating
activities (3 924 034) (2 958 431)
- Cash generated from operations (3 924 034) (2 958 410)
- Interest received - -
- Interest paid - (21)
Net cash outflow from investing
activities (73 595 258) (2 841 569)
- Acquisition/Development of
investment property for sale - -
- Acquisition of investment
properties 30 000 000 -
- Proceeds on disposal of
investment property - -
- Profit distribution from
Orion Property Holdings Trust (145 213 753) 18 180 851
- Loans advanced to group companies 203 614 754 (7 114 535)
- Repayment of loans from group
companies 1 622 996 (684 999)
- Loans advanced to related parties (3 928 739) (13 222 886)
- Proceeds from loans from
shareholders (12 500 000) -
- Loans from related parties repaid - -
- Acquisition of furniture, plant
and equipment - -
Net cash inflow from financing
activities 77 523 996 5 800 001
- Long-term liabilities raised 16 520 114 -
- Short-term portion of long-term
liabilities raised 979 886 -
- Liabilities of disposal group repaid -
- Proceeds from share issue 56 498 480 341 177
- Proceeds from issue
of linked units 3 525 516 5 458 824
Net increase in cash and
cash equivalents 4 703 -
Cash and cash equivalents
at the beginning of the year - -
Cash and cash equivalents
at the end of the year 4 703 -
Statement of Changes in Equity
GROUP
Share Share
Figures in Rand capital premium
Balance at 31 December 2005 211 391 3 516 635
Issue of linked units 1 671 471 -
Adjustment for prior year error - -
Attributable profit for six months - -
Balance at 30 June 2006 1 882 862 3 516 635
Issue of linked units 45 347 -
Buyback of linked units (90 222) -
Attributable profit for the year - -
Balance at 30 June 2007 1 837 987 3 516 635
Issue of linked units 341 177 -
Attributable profit for the year - -
Balance at 30 June 2008 2 179 164 3 516 635
Issue of linked units 3 578 849 53 013 452
Minority interest - -
Attributable profit for the year - -
Balance at 30 June 2009 5 758 013 56 530 088
Retained
Figures in Rand earnings Total
Balance at 31 December 2005 (9 845 579) (6 117 553)
Issue of linked units - 1 671 471
Adjustment for prior year error (236 506) (236 506)
Attributable profit for six months 22 183 094 22 183 094
Balance at 30 June 2006 12 101 009 17 500 506
Issue of linked units - 45 347
Buyback of linked units - (90 222)
Attributable profit for the year 20 864 662 20 864 662
Balance at 30 June 2007 32 965 671 38 320 293
Issue of linked units - 341 177
Attributable profit for the year 20 860 031 20 860 031
Balance at 30 June 2008 53 825 702 59 521 501
Issue of linked units 56 592 301
Minority interest 60 522 60 522
Attributable profit for the year 124 393 088 124 393 088
Balance at 30 June 2009 178 279 312 240 567 412
COMPANY
Share Share
Figures in Rand capital premium
Balance at 30 June 2006 1 882 862 3 516 635
Issue of shares 45 347 -
Attributable profit for the year - -
Balance at 30 June 2007 1 928 209 3 516 635
Issue of shares 341 177 -
Attributable profit for the year - -
Balance at 30 June 2008 2 269 386 3 516 635
Issue of linked units 3 525 516 52 972 960
Attributable profit for the year
Balance at 30 June 2009 5 794 902 56 489 595
Retained
Figures in Rand earnings Total
Balance at 30 June 2006 (5 331 177) 68 320
Issue of shares - 45 347
Attributable profit for the year 2 749 474 2 749 474
Balance at 30 June 2007 (2 581 703) 2 863 141
Issue of shares - 341 177
Attributable profit for the year 11 848 971 11 848 971
Balance at 30 June 2008 9 267 268 15 053 289
Issue of linked units 56 498 476
Attributable profit for the year 127 625 880 127 625 880
Balance at 30 June 2009 136 893 148 199 177 645
Segmental reporting
By gross revenue R % R %
Commercial 14 118 324 30 Gauteng 30 859 084 65
Industrial 10 496 676 22 Western Cape 3 852 745 8
Retail 16 397 421 35 Mpumalanga 11 841 712 25
Hospitality 6 085 117 13 KZN 875 609 2
Residential 331 613 1
47 429 151 100 47 429 151 100
Property values R %
Commercial 222 386 228 39 Gauteng 440 500 000 78
Industrial 74 400 000 13
Retail 180 682 400 31
Hospitality 51 622 063 9 Western Cape 39 880 000 7
Residential 14 993 309 3 Mpumalanga 80 000 000 14
Land 24 396 000 4 KZN 8 100 000 1
568 480 000 100 568 480 000 100
Gross lettable area Sq metres % Sq metres %
Commercial 53 331 42 Gauteng 97 213 76
Industrial 25 706 20 Western Cape 8 784 7
Retail 27 576 22 Mpumalanga 15 850 12
Hospitality 16 029 13 KZN 6 000 5
Residential 5 205 4
127 847 100 127 847 100
Liabilities R %
Commercial 115 997 678 56 Gauteng 154 959 248 75
Industrial 22 904 150 11 Western Cape 19 812 289 10
Retail 61 085 371 30 Mpumalanga 25 215 662 12
Hospitality 6 849 909 3 KZN 6 849 909 3
206 837 108 100 206 837 108 100
Acquisitions R %
Commercial 133 700 000 69 Gauteng 175 200 000 91
Industrial 41 500 000 21 Western Cape 10 000 000 5
Retail 10 000 000 5 KZN 8 100 000 4
Hospitality 8 100 000 4
193 300 000 100 193 300 000 100
Rating of tenants
(rental income)
R % R %
Commercial A 1 816 551 5 Gauteng A 2 339 506 6
B 654 119 2 B 2 297 866 6
C 8 417 605 23 C 20 025 236 55
Industrial A - - Western Cape A 79 612 -
B 299 031 1 B 3 017 924 8
C 7 796 171 21 C 620 925 2
Retail A 1 803 980 5 Mpumalanga A 1 201 413 3
B 3 501 756 10 B 590 021 2
C 7 340 213 20 C 5 560 412 15
Hospitality A - - KZN A - -
B 2 296 098 6 B 845 194 2
C 2 396 840 7 C - -
Residential A - -
B - -
C 255 745 1
36 578 109 100 36 578 109 100
A: Represents major listed companies.
B: Represents smaller listed companies and big unlisted companies.
C: Represents smaller unlisted companies and private businesses.
Date: 30/09/2009 17:08:45 Produced by the JSE SENS Department.
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