| Thu 17 Dec 2009, 14:23 | | MIP - Merchant & Industrial Properties Limited - Abridged audited report for the |
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MIP
MIP
MIP - Merchant & Industrial Properties Limited - Abridged audited report for the
year ended 30 September 2009 and dividend declaration
Merchant & Industrial Properties Limited
(Registration number: 1987/002656/06)
(Share code: MIP ISIN-number: ZAE000102265)
("Merchant"
ABRIDGED AUDITED REPORT FOR THE YEAR ENDED 30 SEPTEMBER 2009 AND DIVIDEND
DECLARATION
Year ending Year ending
30.09.2009 30.09.2008
R `000 R `000
INCOME STATEMENT
Confirming fees and interest 133 282
Investment income 626 807
Rental and parking income 20,672 8,224
Cash flows inherent in leases and 20,520 18,071
parking income
Lease smoothing effect 152 153
Revenue 21,431 19,313
Operating profit 8,029 7,836
Unrealised surplus on fair value 58 4,075
adjustment of investment properties
Cost of corporate restructuring (301) (25)
Foreign currency translation reserve - 2,406
now realised
Realised net loss on disposal of listed (166) (976)
investments
(Loss)/surplus on fair value adjustment (375) 94
of derivative instruments
Profit before interest 7,244 13,410
Interest received 140 437
Interest expense (2,544) (2,407)
Profit before taxation 4,839 11,440
Taxation 1,881 2,454
Profit for the year 2,958 8,986
Year ending Year ending
30.09.2009 30.09.2008
R `000 R `000
Earnings per share (cents) 17.0 51.7
Headline earnings per share (cents) 17.6 40.2
Dividend per share - ordinary (cents) 14.0 16.0
Dividend cover - ordinary (times) 1.2 3.2
Shares in issue 17,372,300 17,372,300
Net asset value per share (cents) 691 696
Headline earnings calculation net of
taxation
Profit for the year 2,958 8,986
Unrealised surplus on revaluation of (69) (2,973)
investment properties
Realised net surplus/(loss) on disposal 166 976
of listed investments
Headline earnings for the year 3,054 6,989
ABRIDGED BALANCE SHEET
Investment properties 128,820 128,447
Listed investments 17,189 26,374
Property, plant and equipment 5,201 2,949
Derivative instruments - 220
Non-current amortised lease receivables 773 631
Current assets 1,408 1,699
Bank and cash balances 7,450 1,425
Total assets 160,841 161,745
Equity and reserves 120,062 120,945
Interest-bearing borrowings 16,103 17,165
Deferred taxation 18,972 18,862
Derivative instruments 156 -
Current liabilities 5,548 4,773
Total equity & liabilities 160,841 161,745
STATEMENT OF CHANGES IN EQUITY
Stated capital 26,809 26,809
Non-distributable reserves 70,308 67,691
Balance at beginning of year 67,691 65,616
Transfer from distributable reserves 799 4,336
Transfer of movement in duplicate asset 100 141
reserve from distributable reserves
Fair value adjustment of property after 1,718 -
tax
Foreign currency translation reserve - (2,402)
movement
Distributable reserves 22,945 26,445
Balance at beginning of year 26,445 25,414
Profit for the year 2,958 8,986
Dividends paid (2,432) (2,780)
Transfer of surplus on investment
property fair value adjustment
to non-distributable reserves (799) (4,336)
Unrealised surplus on fair value (3,292) (1,674)
adjustment of listed investments
Realised deficit on disposal of listed 166 976
investments
Transfer of movement in duplicate asset (100) (141)
reserve to non-distributable reserves
Equity and reserves at end of year 120,062 120,945
SUMMARISED CASH FLOW STATEMENT
Cash generated by operating activities 9,216 7,893
Net interest and taxation paid (4,294) (3,638)
Operating cash inflow 4,921 4,255
Dividends paid (2,432) (2,780)
Net cash inflow from operating 2,489 1,475
activities
Net cash inflow/(outflow) from 3,536 (5,878)
investing and financing activities
Net cash inflow/(outflow) for the year 6,025 (4,403)
SEGMENTAL ANALYSIS
Revenue
Property division 20,672 18,224
Confirming division 133 282
Investment division 626 807
21,431 19,313
Profit before interest
Property division 8,557 6,971
Confirming division 126 245
Investment division (654) 620
8,029 7,836
ACCOUNTING POLICIES
The financial results for the year ended 30 September 2009 are prepared in
accordance with International Financial Reporting Standards
("IFRS"),International Accounting Standard 34 (IAS 34), Schedule 4 of the South
African Companies Act and the JSE Limited Listings Requirements.
The accounting policies applied are consistent with those of the previous
financial year.
AUDIT REPORT
The financial results for the year ended 30 September 2009 have been audited by
PKF (Durban) and their unqualified audit report is available for inspection at
the Company`s registered office.
Review of operating results
Operating profit before interest amounted to R8 028 665 (2008: R7 836 045).
Interest expense was R2 544 243 (2008: R2 406 567). Headline earnings per share
have decreased to 17,6 cents per share (2008: 40,2 cents per share).
The efficiency ratio has increased to 64% (2008: 62%). Total assets under
management at the year-end amounted to R160 841 058 (2008: R161 744 718), with
in excess of 95% of this value being represented by tangible and marketable
assets and cash.
PROPERTY DIVISION
No properties were acquired or disposed of during the financial year. At the
year-end, the group`s property portfolio was valued by CB Richard Ellis at R130
200 000 (2008: R129 775 000).
Certain properties in central Durban have been considered as possible
development opportunities. The group`s valuation referred to above reflected a
value of R40 100 000 for these properties based on a current rental use basis.
These properties may have a greater development value in the event of
realisation.
The gross rental income (excluding parking income) has grown by 14,4%. At
present the vacancy level based on fully let value is 2,5%, well below the
regional averages for Durban and Cape Town. Further investments have been
hampered by the shortage of suitable properties with reasonable yields.
Confirming division
This segment`s results remain a small part of the group`s results with no
significant developments during the year.
INVESTMENT DIVISION
The group`s permanent portfolio of shares in foreign listed investments and
currencies reflects a market value of R23 387 300, being GBP1 976 215 translated
at GBP1 : R11,834 (2008: R 27 488 496, being GBP1 852 493 translated at GBP1 :
R14,839). The decrease is due to the devaluation of international markets and
the strengthening rand.
The group`s share portfolio is well diversified between the United Kingdom - 42%
(2008: 40%), United States of America - 16% (2008: 13%) and Western Europe - 42%
(2008: 47%).
Marshall Monteagle Holdings Societe Anonyme ("Marshall")
Attention is drawn to the fact that the current offer being made of 33 shares in
Marshall for every 100 shares held in Merchant & Industrial Properties Limited
("Merchant"), has been extended to 29 January 2010.
As at the date of this announcement, Marshall has received acceptances for 3 774
564 shares of Merchant, representing 21,7% of the issued share capital of
Merchant. This, in addition to the 69.7% already owned by Marshall, represents
91,4% of the issued share capital of Merchant. The directors are still strongly
recommending that remaining shareholders now holding 8,6% of the company accept
the offer.
Shareholders` attention is drawn to the fact that, in terms of the JSE Listings
Requirements, should the shareholder spread not be maintained by Merchant once
the offer has been closed and the 90% of the offer not achieved, those
shareholders who do not accept the offer will remain shareholders in a company
that might face possible suspension and termination of its listing.
CASH DIVIDEND DECLARATION
Notice is hereby given that a final dividend of 9,0 cents per ordinary share has
been declared in respect of the year ended 30 September 2009. In accordance with
the settlement procedures of Strate, Merchant has determined the last date to
trade to participate in the final dividend shall be Friday, 15 January 2010. The
shares will commence trading ex-dividend from Monday, 18 January 2010, and the
record date will be Friday, 22 January 2010. Dividends will be paid on Monday,
25 January 2010. Share certificates may not be dematerialised, or
rematerialised, between Monday, 18 January 2010 and Friday, 22 January 2010,
both days inclusive.
POSTING OF ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING
The annual report will be posted to shareholders on 23 December 2009.
Notice is hereby given that the annual general meeting of Merchant will be held
in the Boardroom, 11 Sunbury Park,La Lucia Ridge Office Estate Durban,4319 on 3
March 2010 to transact the business as stated in the annual general meeting
notice forming part of the annual financial statements.
By order of the Board
DC Marshall, PN Lonsdale (Directors)
17 December 09
Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)
Date: 17/12/2009 14:23:01 Produced by the JSE SENS Department.
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