| Wed 5 May 2010, 16:35 | | OAS - Oasis Crescent Property Fund - Trading update |
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OAS
OAS
OAS - Oasis Crescent Property Fund - Trading update
OASIS CRESCENT PROPERTY FUND
A property fund created under the Oasis Crescent Property Trust Scheme
registered in terms of the Collective Schemes Control Act (Act 45 of 2002)
JSE code: OAS
ISIN: ZAE000074332
("OCPF" or "the Fund")
TRADING UPDATE
Shareholders are referred to the SENS announcement of 14 December 2009, advising
of the decision of the board of OCPF to adopt the "gross distribution per unit"
and "net asset value per unit" measures for future trading statements. These are
considered to be more appropriate yardsticks to measure the performance of OCPF
than "headline earnings per unit" and "earnings per unit".
Shareholders are advised that the investment manager of the Fund, Oasis Crescent
Property Fund Managers Limited, expects the underlying operating profit (before
the effects of fair value adjustments to investment properties) for the year
ended 31 March 2010 to be between 10% and 13% higher than the year ended 31
March 2009. This is expected to be achieved on the back of good growth in rental
income (between 11% to 14%), despite the tough economic conditions, as well as
stringent cost control.
Distribution per unit for the year is expected to decrease between 2% and 4%
compared to the corresponding figure for the previous year. This includes the
impact of the short term dilutive effect of the new units issued during the
year. The weighted average number of units in issue has increased by 13.8% year
on year. We also see the impact of lower investment income, due to offshore
funds in particular, continuing to retain cash to strengthen their balance
sheets, thus reducing their income distributions. The investment manager of the
Fund fully supports these interim measures. The stronger Rand, which has
appreciated on average by 12%, has also lead to a further reduction in the
offshore investment income converted to the local currency. The combined
effect of the income retention by funds and the Rand strength is expected to
have an impact of 1 to 3 cents on distribution per unit for the year.
In view of the prevailing economic conditions, the Fund continues to adopt a
conservative approach to the valuation of its portfolio and expects an upward
adjustment to the fair value of investment properties of 4% to 6% for the year
ended 31 March 2010.
The cash balances at the end of the year are expected to be R10m to R11m higher
than the previous year. The cash available after payment of the final
distribution allows the Fund to take advantage of suitable offshore and local
investment opportunities. The investment manager of the Fund remains confident
that coupled with the strong Rand, offshore investments offering attractive
valuations will present itself in the near to medium term. The objective of the
portfolio is to provide investors with superior returns at lower than market
risk. The portfolio is therefore comprised of assets which should provide
scalability, geographical, currency and income diversification. Despite the Rand
strength, the Fund is expected to benefit from a recovery of between R13m to
R15m in the value of offshore investments, from the temporary decline
experienced in the previous year. The Fund`s global property exposure has
increased from 14% to 22% as a result of compelling valuations supported by the
stronger Rand. The Fund therefore expects to grow the Net Asset Value per unit
by between 6% to 8% for the year to 31 March 2010 compared to the Net Asset
Value per unit as at 31 March 2009.
The financial information contained in this trading update has not been reviewed
and/or reported on by the Fund`s auditors. It is expected that the results for
the year ended 31 March 2010 will be released on or about 11 May 2010.
Cape Town
5 May 2010
Designated Advisor
PSG Capital (Pty) Limited
Date: 05/05/2010 16:35:06 Produced by the JSE SENS Department.
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