| Tue 1 Jun 2010, 14:32 | | MIP - Merchant & Industrial Properties Limited - Unaudited interim report for |
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MIP
MIP
MIP - Merchant & Industrial Properties Limited - Unaudited interim report for
the six months ended 31 March 2010 and dividend declaration
MERCHANT & INDUSTRIAL PROPERTIES LIMITED
(Registration number: 1987/002656/06)
(JSE code: MIP ISIN: ZAE000102265)
UNAUDITED INTERIM REPORT FOR THE SIX MONTHS ENDED 31 MARCH 2010 AND DIVIDEND
DECLARATION
INCOME STATEMENT
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2010 2009 2009
R`000 R`000 R`000
Confirming fees and interest 50 79 133
Investment income 231 281 626
Rental and parking income 10 900 10 019 20 672
Cash flows inherent in leases
and parking income 10 875 10 037 20 520
Lease smoothing effect 25 (18) 152
Revenue 11 181 10 379 21 431
Profit before interest 4 659 3 871 8 029
Interest received 107 75 139
Loss on revaluation of
derivative instruments (179) (429) (375)
Interest expense (1 277) (1 253) (2 544)
Profit after interest 3 310 2 264 5 249
Unrealised surplus on
revaluation of investment
properties - - 57
Realised net surplus/(loss) on
disposal of listed investments 105 202 (166)
Cost of corporate restructuring - (103) (301)
Profit before taxation 3 415 2 363 4 839
Taxation 1 141 766 1 881
Profit for the period 2 274 1 597 2 958
Earnings per share (cents) 13,1 9,2 17,0
Headline earnings per share (cents) 12,5 8,0 17,6
Dividend per share - ordinary (cents) 9,0 7,0 14,0
Shares in issue 17 372 300 17 372 300 17 372 300
Net asset value per share (cents) 700 671 691
Reconciliation of headline
earnings net of taxation
Profit for the period 2 274 1 597 2 958
Unrealised surplus on
revaluation of investment properties - - (69)
Realised net (surplus)/loss on
disposal of listed investments (105) (202) 166
Headline earnings for the period 2 169 1 395 3 055
ABRIDGED BALANCE SHEET
Investment properties 128 867 128 459 128 820
Listed investments 23 473 17 308 17 189
Property, plant and equipment 5 435 2 932 5 201
Non-current amortised lease
receivables 572 403 773
Current assets 3 510 1 479 1 408
Bank and cash balances 2 025 5 520 7 450
Total assets 163 882 156 101 160 841
Equity and reserves 121 681 116 637 120 062
Interest-bearing borrowings 15 547 16 854 16 103
Derivative instruments 334 - 156
Deferred taxation 19 026 18 269 18 972
Current liabilities 4 837 4 341 5 548
Bank overdraft and short-term
borrowings 2 457 - -
Total equity and liabilities 163 882 156 101 160 841
STATEMENT OF CHANGES IN EQUITY
Stated capital 26 809 26 809 26 809
Non-distributable reserves 70 308 67 691 70 308
Balance at beginning of period 70 308 67 691 67 691
Transfer from distributable reserves - - 899
Fair value adjustment of
property after tax - - 1 718
Distributable reserves 24 564 22 137 22 945
Balance at beginning of period 22 945 26 445 26 445
Profit for the period 2 274 1 597 2 958
Transfer of property revaluation
to non-distributable reserves - - (899)
Unrealised surplus/(loss) on
revaluation of listed investments 1 014 (4 487) (3 293)
Realised (surplus)/loss on
disposal of listed investments (105) (202) 166
Dividends paid (1 564) (1 216) (2 432)
Total equity and reserves at the
end of the period 121 681 116 637 120 062
SUMMARISED CASH FLOW STATEMENT
Cash inflow from operating
activities 4 525 4 452 9 216
Net interest and taxation paid (2 892) (2 278) (4 294)
Operating cash inflow 1 633 2 174 4 922
Dividends paid (1 564) (1 216) (2 432)
Net cash inflow from operating
activities 69 958 2 490
Net cash (outflow)/inflow from
investing activities (7 426) 3 808 5 018
Net cash outflow from financing
activities (525) (671) (1 483)
Net cash (outflow)/inflow for
the period (7 882) 4 095 6 025
SEGMENTAL ANALYSIS
Revenue
Property division 10 900 10 019 20 672
Confirming division 50 79 133
Investment division 231 281 626
11 181 10 379 21 431
Profit/(loss) before interest
Property division 4 550 3 704 8 557
Confirming division 158 76 126
Investment division (49) 91 (654)
4 659 3 871 8 029
REVIEW OF OPERATING RESULTS
The unaudited results for the six months ended 31 March 2010 reflect profit
before interest of R4 659 000 (2009: R3 871 000). The majority of this profit
remains derived from the group`s property division. Headline earnings per share
have increased to 12,5 cents from 8,0 cents. Interest expense amounted to R1
277 000 (2009: R1 253 000).
Property division
The group is confident that its letting profile should not change significantly
due to the increased risks facing the general economy. Although there are
indications of increased market risk due to tenants experiencing financial
difficulties which may indicate static or lower valuations, overall, the
group`s portfolio remains well positioned and vacancy levels are currently well
below the regional averages for Durban and Cape Town.
Investment division
The group`s permanent portfolio of shares in foreign listed investments and
currencies reflects a market value in South African currency of R24 540 000
(2009: R22 575 000).
Loan to fellow subsidiary
Included in the current assets at 31 March 2010 is a loan of R1 750 000 to
Monteagle Property Holdings (Pty) Limited, a fellow subsidiary of Marshall
Monteagle Holdings Societe Anonyme, which was secured against an investment
property with a net equity value of R13 000 000. This loan has been repaid in
full subsequent to the period end.
Basis of preparation
This report has been prepared in accordance with International Financial
Reporting Standards and complies with IAS 34 Interim Financial Reporting
Standards, AC 500 standards as issued by the Accounting Practices Board, the
Companies Act of South Africa and the JSE Listings Requirements. Except for the
revaluation of investment properties, the same accounting policies were used as
those applied in the annual financial statements for the period ended 30
September 2009 in which these policies are fully described.
Outlook
The operating outlook for the rest of the financial year is positive as the
group has a low vacancy rate and guaranteed lease rental income. Operating and
financing costs are within budget, and the group is easily able to meet its
cash flow requirements.
Dividend declaration
Notice is hereby given that an interim dividend of 11,0 cents per ordinary
share has been declared in respect of the six months ended 31 March 2010.
In accordance with the settlement procedures of Strate, Merchant has determined
that the last date to trade to participate in the interim dividend shall be
Friday, 18 June 2010. The shares will commence trading ex-dividend from Monday,
21 June 2010, and the record date will be Friday, 25 June 2010. Dividends will
be paid on Monday, 28 June 2010.
Share certificates may not be dematerialised, or rematerialised, between
Monday, 21 June 2010 and Friday, 25 June 2010, both days inclusive.
By order of the board
DC Marshall, PN Lonsdale (Directors)
1 June 2010
Registered office
11 Sunbury Park
La Lucia Ridge Office Estate
La Lucia
4319
Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)
PDNA Building, 25 Scott Street
Waverley, Johannesburg, 2090
Transfer secretaries
Computershare Investor Services (Pty) Limited
70 Marshall Street
Johannesburg
2001
Directors DC Marshall (Chairman), PN Lonsdale*, BA Hose*, ME Stewart*,
SM Mylrea (Financial) *Non-executive directors
Date: 01/06/2010 14:32:01 Produced by the JSE SENS Department.
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