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PPR
PPR
PPR - Putprop Limited - Unaudited interim results for the six months ended 31
December 2009
Putprop Limited
(Incorporated in the Republic of South Africa)
(Registration number 1988/001085/06)
Share code: PPR ISIN: ZAE000072310
("Putprop" or "the company" or "the group")
Unaudited interim results for the six months ended 31 December 2009
Unaudited Consolidated Statement of Comprehensive Income for the six months
ended 31 December 2009
Unaudited Unaudited % Audited
31 December 31 December Change 30 June
2009 2008 2008
R`000 R`000 R`000
Property 16 180 13 786 17.4 29 734
revenue
Straight line 1 105 2 291 (51.8) 3 407
rental income
accrual
Gross property 17 285 16 077 7.5 33 141
revenue
Property (2 244) (1 865) 20.3 (3 251)
expenses
Net profit 15 041 14 212 5.8 29 890
from property
operations
Administration (1 601) (1 339) 19.6 (2 748)
expenses
Investment and 347 1 251 (72.3) 1 642
other income
Operating 13 787 14 124 (2.4) 28 784
profit before
capital items
Capital items:
Gross change 5 000 7 000 (28.6) 17 613
in fair value
of investment
properties
Net profit 18 787 21 124 (11.1) 46 397
before
taxation
Taxation (5 421) (5 506) (1.5) (11 071)
Net profit 13 366 15 618 (14.4) 35 326
attributable
to equity
holders
Shares in 28 793 28 793 - 28 793
issue
(weighted
average
number) (`000)
Earnings and 46.4 54.2 (14.4) 122.7
diluted
earnings per
share (cents)
Dividends paid 22 22 - 32
per share
(cents)
Headline 31.5 33.3 (5.4) 70.0
earnings per
share (cents)
Reconciliation of headline earnings
Net profit for 13 366 15 618 (14.4) 35 326
the period
Adjusted for:
Fair value and (5 000) (7 000) (28.6) (17 613)
impairment
adjustments
Taxation 700 980 (28.6) 2 466
effect of
these
adjustments
Headline 9 066 9 598 (5.4) 20 179
earnings
Unaudited Consolidated Statement of Financial Position as at 31 December 2009
Unaudited Unaudited Audited
31 December 31 December 30 June
2009 2008 2009
R`000 R`000 R`000
ASSETS
Non-current assets 225 127 191 118 205 135
Investment properties at 204 560 173 120 185 607
fair value
Other non-current assets
Furniture, fittings and 52 81 67
computer equipment
Straight line rental 10 706 9 285 9 758
income asset
Other investments 9 809 8 632 9 703
Current assets 3 638 6 770 10 808
Straight line rental 987 185 828
income asset
Trade and other 720 832 357
receivables
Taxation receivable 812 2 241 1 155
Cash and cash equivalents 1 119 3 512 8 468
Total assets 228 765 197 888 215 943
EQUITY AND LIABILITIES
Equity and reserves 211 532 187 672 204 500
Non-current liabilities 10 810 7 964 9 634
Deferred tax 10 810 7 964 9 634
Current liabilities 6 423 2 252 1 809
Trade and other payables 6 423 1 986 1 809
Amount due to fellow - 266 -
subsidiary
Total equity and 228 765 197 888 215 943
liabilities
Net asset value per share 734.7 651.8 710.0
(cents)
Unaudited Consolidated Statement of Cash Flows for the six months ended 31
December 2009
Unaudited Unaudited Audited
31 December 31 December 30 June
2009 2008 2009
R`000 R`000 R`000
CASH FLOWS FROM OPERATING 6 711 1 070 9 246
ACTIVITIES
Net cash generated from 16 600 11 211 24 682
operations
Investment from other 347 1 251 1 642
income
Taxation paid (3 902) (5 058) (7 865)
Dividends paid (6 334) (6 334) (9 213)
CASH FLOWS FROM INVESTING (14 060) (33 648) (36 602)
ACTIVITIES
Improvements to (1 254) (5 070) (6 944)
investment properties
Acquisition of other (106) (105) (1 176)
investments
Acquisition of investment (12 700) (28 473) (28 473)
property
Acquisition of furniture, - - (9)
fittings and computer
equipment
CASH FLOWS FROM FINANCING - (1 055) (1 321)
ACTIVITIES
Reduction of loan from - (1 055) (1 321)
fellow subsidiary
Net decrease in cash and (7 349) (33 633) (28 677)
cash equivalents
Cash and cash equivalents 8 468 37 145 37 145
at beginning of the
period
Cash and cash equivalents 1 119 3 512 8 468
at end of the period
Unaudited Consolidated Statement of Changes in Equity for the six months ended
31 December 2009
Stated Accumulated
capital profits Total
R`000 R`000 R`000
At 30 June 2008 4 146 174 242 178 388
Profit attributable to - 15 618 15 618
equity holders
Dividend paid - (6 334) (6 334)
At 31 December 2008 4 146 183 526 187 672
Profit attributable to - 19 708 19 708
equity holders
Dividend paid - (2 880) (2 880)
At 30 June 2009 4 146 200 354 204 500
Profit attributable to - 13 366 13 366
equity holders
Dividend paid - (6 334) (6 334)
Balance at 31 December 4 146 207 386 211 532
2009
Comments
Basis of preparation
The unaudited interim financial statements for the six months ended 31 December
2009 and comparative information have been prepared in terms of IAS34 (Interim
Financial Reporting); the Listings Requirements of JSE Limited and the relevant
sections of the South African Companies Act, 1973 (Act 61 of 1973) as amended.
IAS1, (Presentation of Financial Statements) has introduced certain changes to
the format and titles of the financial statements.
The accounting policies applied which are based on reasonable judgements and
estimates are in accordance with International Financial Reporting Standards
(IFRS) and are consistent with those applied in the most recent audited
financial statements. These interim results have not been audited or reviewed by
the group`s auditors
Financial results
The directors are pleased to report that the property revenue for the six months
ended 31 December 2009 increased by 17.4% to R16.2 million compared to R13.8
million for the six months ended 31 December 2008 ("the comparable period"). The
group`s rental, exclusive of straight line rental accruals, has increased by
7.5% over the comparable period.
Property expenses as well as administration expenses increased by 20.3% and
19.6% respectively. The increase in property expenses resulted largely from the
introduction of the International Financial Reporting Standard, IFRS3, where
transaction expenses incurred on property acquisitions and previously
capitalised as part of the acquisition, now have to be expensed through the
statement of comprehensive income. This increased property expenses by R877 000.
Maintenance and refurbishment costs continue to be closely monitored and were
well controlled.
The board of directors has as a result of the difficult economic conditions
experienced during the period under review decided not to declare an interim
dividend for the six months ended 31 December 2009 (December 2008 R0.10 cents
per ordinary share). It is their belief that these funds can be utilised to add
to the group`s property portfolio thus giving long term sustainability and
increased profit in the future.
Property portfolio
At 31 December 2009 the portfolio comprised 17 properties with a gross lettable
area of 91 676m2.
The sectoral spread by gross rentals comprised 85% industrial, 8% retail and 7%
commercial. Vacancies continued to be extremely favourable with 1.1% of gross
lettable area vacant which is in line with the comparable period. The company
continues to transact primarily with `A` grade tenants.
The lease expiry profile reflects that in terms of gross lettable area, 1.5% of
the portfolio expires during the next 12 months and 82% from 2012 onwards. This
provides a stable future income stream for the group.
Segmental analysis
The table below summarises by segment the position for the six months ended 31
December 2009.
Segment assets include all operating assets used by a segment and consist of
investment properties, receivables and cash. Assets not directly attributable to
a particular segment are allocated to the corporate segment. Segment liabilities
include all operating liabilities of a segment and consist principally of
outstanding accounts.
Industrial Retail Commercial Corporate Total
R`000 R`000 R`000 R`000 R`000
Group
income for
the six
months
ended 31
December
2009
Property 13 830 1 542 808 - 16 180
revenue
Straight 824 254 27 - 1 105
line rental
income
accrual
Property (1 940) (83) (221) - (2 244)
expenses
Net profit 12 714 1 713 614 - 15 041
from
property
operations
Group
balance
sheet at 31
December
2009
Non-current
assets
Investment 155 076 31 849 17 635 - 204 560
properties
Other non- 7 555 4 206 8 754 52 20 567
current
assets
Current
assets
Straight 746 133 108 - 987
line rental
income
asset
Trade and 302 - 169 249 720
other
receivables
Cash and - - - 1 119 1 119
cash
equivalents
Non-current - - - 10 810 10 810
liabilities
Current
liabilities
Trade and 189 222 - 6 012 6 423
other
payables
Acquisitions, expansions and refurbishments
During the period under review Putprop acquired an industrial property with a
national tenant in the Pretoria metropolitan area with a gross lettable area of
3 640m2. The Eagle Canyon expansion capital project has been completed within
budget and timeously.
Valuation of property portfolio
It is the groups` policy to value the entire investment property portfolio on an
annual basis by an independent external valuer. The next valuation will be as at
30 June 2010. In addition the property portfolio is valued by the directors on a
six monthly basis. The directors have valued the group`s investment portfolio at
31 December 2009 at R204 million, an increase of R5 million or 2.7% on the
external valuation at 30 June 2009. The effects of any acquisitions during the
reporting period have been ignored in this revaluation.
Borrowings and capital commitments
The company has no significant borrowings as at 31 December 2009 nor has it any
capital commitments at that date.
Directorate
There have been no changes in the composition of the board of directors during
the current period.
Subsequent events
There have been no significant subsequent events between the period 31 December
2009 and the release of this report, 15 March 2010.
Prospects
Trading conditions during the next reporting period are expected to continue to
be challenging with costs being an area expected to come under pressure.
Maintenance will increase substantially for the six months to June 2010.
There are some indications that the economic activity is again starting to
increase as is evidenced in the increase in output of the manufacturing sector
which will flow into the consumer market and ultimately the property market both
residential and commercial. However growth options at best remain limited in the
near term.
The board is of the opinion that a reasonable growth in earnings will be
achieved and expects to resume dividend payments in its June 2010 results.
On behalf of the board
15 March 2010
A B Adrian A Carleo A L Carleo-Novello
Chairman Chief Executive Officer Managing Director
Directorate
A B Adrian* (Chairman),
A Carleo (Chief Executive Officer),
A L Carleo-Novello (Managing Director),
B C Carleo, J E Smith (Financial) (British),
P Senatore, P Nucci*
* Independent Non-executive
REGISTERED OFFICE
91 Protea Road
Chislehurston
Sandton
2196
TRANSFER SECRETARIES
Computershare Investor Services (Proprietary) Limited
70 Marshall StreetMarshalltown
PO Box 61051
Johannesburg
2107
SPONSOR
Merchantec Capital
Date: 15/03/2010 07:05:04 Produced by the JSE SENS Department.
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