| Tue 2 Mar 2010, 7:45 | | HYP - Hyprop Investments Limited - Audited results for the year |
|
HYP
HYP
HYP - Hyprop Investments Limited - Audited results for the year
ended 31 December 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")
Audited results for the year ended 31 December 2009
- 6,5% increase in total distribution per combined unit to 328 cents
- Total return 17%
- NAV excluding deferred taxation R53,16 per combined unit up 7%
- Total assets R10,8 billion up 14%
- Market capitalisation R7,6 billion up 9%
- Gearing 13%
Statement of comprehensive income
Audited Audited
31 Dec 31 Dec
2009 2008
R`000 R`000
Revenue 923 655 781 343
Investment property income 790 568 658 674
Straight-line rental income accrual 13 318 15 769
Listed property securities income 119 769 106 900
Property expenses (259 380) (205 209)
Net property income 664 275 576 134
Other operating expenses (47 840) (41 353)
Operating income 616 435 534 781
Net interest (70 829) (17 080)
Received 26 931 39 408
Paid (97 760) (56 488)
Net operating income 545 606 517 701
Non-core income 905 1 871
Change in fair value 583 733 157 091
Investment property 580 121 225 630
Straight-line rental income accrual (13 318) (15 769)
Listed property securities 32 391 (52 770)
Derivative instruments (15 461)
Profit on disposal of 8 392
investment property
Amortisation of debenture premium 97 696 85 492
Amortisation of financial guarantee 715 4 139
for associate
Income before debenture interest 1 228 655 774 686
Debenture interest (544 851) (511 629)
Net income before share of income from 683 804 263 057
associate
Share of income from associate 20 305 (11 799)
Investment property income 11 566 8 449
Straight-line rental income accrual 386 1 039
Change in fair value of investment property 8 352 (26 072)
Profit on disposal of investment property 4 785
Profit before taxation 704 109 251 258
Taxation (152 084) 100 615
Total comprehensive income for the year 552 025 351 873
Abridged reconciliation - headline earnings
and distributable earnings
Net income after taxation 552 025 351 873
Debenture interest 544 851 511 629
Earnings 1 096 876 863 502
Headline earnings adjustments (434 053) (166 385)
Change in fair value of investment property (434 053) (157 993)
(net of deferred taxation)
Profit on disposal of (8 392)
investment property
Headline earnings 662 823 697 117
Distributable earnings adjustments (118 064) (184 866)
Change in fair value of listed
property securities
(net of deferred taxation) (27 856) 45 382
Change in the fair value of derivative 15 461
instruments
Deferred taxation 1 481 (160 865)
Amortisation of debenture premium (97 696) (85 492)
Amortisation of financial guarantee for (715) (4 139)
associate
Share of income from associate (8 739) 20 248
Distributable earnings 544 759 512 251
Total combined units in issue 166 113 169 166 113 169
Weighted average combined units in issue 166 113 169 166 113 169
Earnings per combined unit 660,3 519,8
Headline earnings per combined unit 399,0 419,7
Distributable earnings per combined unit 327,9 308,4
Distribution details
Total distribution for the year 328,00 308,00
Six months - ended 31 December 167,00 158,00
- ended 30 June 161,00 150,00
Statement of financial position
Audited Audited
31 Dec 31 Dec
2009 2008
R`000 R`000
Assets
Non-current assets 10 550 405 9 362 622
Investment property 8 858 711 7 695 869
Building appurtenances and tenant 20 993 21 091
installations
Investment in associate 169 499 178 983
Loan receivable 47 364 45 232
Listed property securities 1 453 838 1 421 447
Current assets 258 153 126 026
Receivables 80 591 59 936
Cash and cash equivalents 177 562 66 090
Total assets 10 808 558 9 488 648
Equity and liabilities
Share capital and reserves 4 799 207 4 247 182
Liabilities
Non-current liabilities 5 594 236 4 878 116
Debentures and debenture premium 2 558 705 2 656 401
Long-term loans 1 550 000 900 000
Derivative instruments 12 447
Financial guarantee for associate 953 1 668
Deferred taxation 1 472 131 1 320 047
Current liabilities 415 115 363 350
Payables 134 691 100 891
Derivative instruments 3 015
Combined unitholders for distribution 277 409 262 459
Total liabilities 6 009 351 5 241 466
Total equity and liabilities 10 808 558 9 488 648
Net asset value per combined unit (R) 44,29 41,56
Net asset value per combined unit
- excluding deferred taxation liability (R) 53,16 49,51
Abridged statement of changes in equity
Audited Audited
31 Dec 31 Dec
2009 2008
R`000 R`000
Balance at beginning of year 4 247 182 4 832 041
De-consolidation of minority interests (936 732)
Total comprehensive income for the year 552 025 351 873
Balance at end of year 4 799 207 4 247 182
Abridged statement of cash flows
Audited Audited
31 Dec 31 Dec
2009 2008
R`000 R`000
Cash flows from operating activities 53 089 35 396
Cash generated from operations 624 030 526 801
Interest received 26 931 39 408
Interest paid (97 760) (56 488)
Distribution to combined unitholders (529 901) (481 728)
Income from associate 29 789 7 403
Cash flows from investing activities (591 617) (52 668)
Cash flows from financing activities 650 000
Net increase/(decrease) in cash and 111 472 (17 272)
cash equivalents
Cash and cash equivalents at the 66 090 83 362
beginning of the year
Cash and cash equivalents at the end of 177 562 66 090
the year
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 year ended 31 December 2009 ("the
year").
Hyprop has declared a total distribution of 328 cents per combined unit for the
year, an increase of 6,5% on the previous year. The final distribution of 167
cents represents growth of 5,7% compared with the corresponding period
in 2008.
31 Dec 2009 31 Dec 2008
Business segment Revenue Distributab Revenue Distributa
R`000 le earnings R`000 ble
R`000 earnings
R`000
Canal Walk 339 144 244 496 295 137 206 913
The Glen 113 530 75 429 92 631 65 487
Hyde Park 121 084 79 536 109 029 71 206
The Mall of Rosebank 94 093 66 047 86 885 61 206
Stoneridge 47 767 23 174 12 395 6 135
Southcoast Mall 20 520 13 624 18 792 12 567
Shopping centres 736 138 502 306 614 869 423 514
Offices 36 101 23 668 33 818 23 548
Hotels 18 329 5 214 9 987 6 402
Investment property 790 568 531 188 658 674 453 464
Listed property securities 119 769 119 769 106 900 106 900
Straight-line rental income 13 318 13 318 15 769 15 769
accrual
923 655 664 275 781 343 576 133
Fund management expenses (47 840) (41 353)
Net interest (paid)/received (70 829) (17 080)
Net operating income 545 606 517 700
Non-core income 905 1 871
Share of income from 11 566 8 449
associate
Straight-line rental income (13 318) (15 769)
accrual
Total 923 655 544 759 781 343 512 251
Hyprop`s shopping centres contributed 95% of distributable earnings from
investment property (2008: 93%).
On a comparative basis (excluding Stoneridge, which opened in September 2008 and
the additional retail at Canal Walk and The Glen, which opened in the second
half of 2009) revenue and distributable earnings from shopping centres increased
by 11% and 12%, respectively.
Total revenue from shopping centres increased by 20%, while total property
expenses increased by 26%, mainly due to an increase in gross lettable area and
increases in municipal rates and electricity costs.
Investment portfolio
Value attributable Value per
to Hyprop rentable area
Business segment Rentable Dec 2009 Dec 2008 Dec 2009
area(m2) R`000 R`000 (R/m2)
Canal Walk 150 394 4 040 000 3 368 000 33 578
The Glen 74 583 1 439 234 1 083 747 25 676
Hyde Park 36 894 1 250 000 1 217 000 33 881
The Mall of Rosebank 37 009 905 000 880 000 24 454
Stoneridge 50 241 425 700 463 500 9 415
Southcoast Mall 29 361 140 500 165 000 9 571
Shopping centres 378 482 8 200 434 7 177 247 26 088
Offices 22 221 300 500 186 000 13 523
400 703 8 500 934 7 363 247 25 392
Hotels 288 000 95 600
Investment property 8 788 934 7 458 847
Development property 87 743# 257 095*
Listed property securities 1 453 838 1 421 447
Investment in associate 169 499 178 983
400 703 10 500 9 316 372
014
#Rosebank Gardens
*Construction costs in respect of additional retail at Canal Walk, The Glen and
Southern Sun Hyde Park
Investment Property
Investment property was independently valued by Old Mutual Investment Group:
Property Investments (Pty) Limited using the discounted cash flow method.
Investment property increased in value by R580 million, a 7,5% increase, to R8,8
billion.
Vacancies at 31 December 2009 increased to 4,5% from 3,3% at 31 December 2008.
Excluding Stoneridge, total vacancies at year-end were 1,9% (2008: 1,5%).
Lease expiry profile
Lease expiry Based on Based on
Income area
(%) (%)
Vacancies 4
December 2010 22 21
December 2011 17 13
December 2012 15 10
December 2013 17 18
December 2014+ 29 34
Total 100 100
Developments
The extensions at Canal Walk and The Glen were successfully completed at a total
cost of R479 million and fully let during the year. Initial yields based on
achieved rentals for these two projects are 8,2% and 10,2%, respectively.
Southern Sun Hyde Park Hotel opened during the last week of September 2009 and
experienced a challenging first few months. The hotel has been well received and
is expected to benefit from increased occupancies as 2010 progresses and from
full occupancy during the FIFA World Cup.
The Planet Fitness gym at The Mall of Rosebank and the food court extensions at
Canal Walk were completed during the year at a total cost of R41,3 million and
an average initial yield of 12,8%.
Planning for a refurbishment of Hyde Park and a refurbishment of and extension
to The Mall of Rosebank, incorporating Rosebank Gardens (formerly Nedbank
Gardens), is in process.
Listed Property Securities
Income from Hyprop`s investment in Sycom Property Fund Limited ("Sycom")
increased by 12%.
The investment in Sycom increased by R32 million to R1,5 billion at 31 December
2009, based on the closing price of R19,30 per unit on that date.
Net asset value
The net asset value per combined unit ("NAV") at year-end was R44,29,
representing a 6,6% increase on the NAV of R41,56 at 31 December 2008.
Excluding deferred taxation, the NAV at year-end was R53,16, which is a premium
of 15,9% to Hyprop`s combined unit price at 31 December 2009 of R45,85.
Borrowings
Net borrowings at 31 December 2009 of R1,4 billion equate to a gearing ratio of
13%.
During the year, Hyprop secured a R250 million facility to fund its acquisitions
in the Rosebank node and the balance of the development programme that was
completed during 2009. R200 million of this facility was utilised in September
2009, with an interest rate fixed for five years at 10,11%.
The average interest rate on long-term loans of R1,55 billion was 9,48% (2008:
9,54%).
R450 million of borrowings was re-financed at year-end, resulting in an increase
in the average interest rate on long-term loans to 9,65% from January 2010.
Management contract
As previously reported, Hyprop`s management agreements with Madison Property
Fund Managers ("Madison") expired on 31 December 2009.
Property asset management was internalised from 1 January 2010.
A consultancy agreement with Redefine Properties Limited, which acquired Madison
during 2009, was implemented on 1 January 2010 for a period of eighteen months
at a fixed fee of R1,5 million per month.
Directorate
Effective 1 September 2009, Kevin Ellerine was appointed to the board as a non-
executive director.
Prospects
Based on the board`s assessment of current economic conditions, Hyprop`s
distribution for the financial year ending 31 December 2010 will be between 355
cents and 359 cents per combined unit, an increase of between 8% and 9,5% on the
distribution for 2009. This forecast has not been reviewed or reported on by
Hyprop`s auditors.
Payment of debenture interest
Distribution 44 of 167 cents per combined unit for the six months ended 31
December 2009 will be paid to combined unitholders as follows:
March 2010
Last day to trade cum distribution Thursday, 18
Combined units trade ex distribution Friday, 19
Record date Friday, 26
Payment date Monday, 29
Unitholders may not dematerialise or rematerialise their combined units between
Friday, 19 March 2010 and Friday, 26 March 2010, both days inclusive.
Basis of preparation and audit opinion
These annual financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS"), International Accounting
Standard IAS34 `Interim Financial Reporting`, JSE Listings Requirements and the
Companies Act, 1973.
The accounting policies applied in preparation of the annual financial
statements are consistent with those applied in the audited financial statements
for the prior financial year.
Grant Thornton has audited the financial information set out in these results.
Their unqualified audit report is available for inspection at the company`s
registered office.
On behalf of the board.
MS Aitken MF Rodel
Chairman CEO
1 March 2010
Directors
MS Aitken*+ (Chairman); MF Rodel (CEO); LR Cohen (FD); WE Cesman* (alternate JA
Finn); EG Dube*; KM Ellerine*; 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)
Company secretary
Probity Business Services (Proprietary) Limited
Sponsor
Java Capital (Proprietary) Limited
Investor relations
Envisage Investor & Corporate Relations
2 March 2010
Date: 02/03/2010 07:45:02 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.
