| Tue 21 Sep 2010, 17:00 | | FVT - Fairvest Property Holdings Limited - Audited abridged results for the |
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FVT
FVT
FVT - Fairvest Property Holdings Limited - Audited abridged results for the
15 months ended 30 June 2010
FAIRVEST PROPERTY HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1998/005011/06)
Linked unit code: FVT
ISIN: ZAE000034658
("Fairvest" or "the Company" or "the Group")
Audited abridged results for the 15 months ended 30 June 2010
ABRIDGED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Audited Audited Audited
30 June 31 March 31 March
2010 2009 2008
R`000 R`000 R`000
ASSETS
Non-current assets 91 622 89 685 80 364
Investment property 88 766 86 426 77 442
Equipment 20 4 5
Operating lease asset 2 836 3 255 2 917
Non-current assets held for sale
Investment property held for sale - - 48 650
Current assets 53 147 47 156 11 254
Listed investments 2 684 - -
Trade and other receivables 2 127 965 709
Cash and cash equivalents 48 336 46 191 10 545
Total assets 144 769 136 841 140 268
EQUITY AND LIABILITIES
Equity and reserves
Ordinary share capital 857 857 857
Non-current liabilities 126 555 125 594 133 109
Linked unit debenture capital 857 857 857
Linked unit debentures premium 124 020 123 801 116 952
Long-term liabilities - - 14 047
Deferred taxation 1 678 936 1 253
Current liabilities 17 357 10 390 6 302
Taxation 2 017 868 574
Trade and other payables 15 340 9 522 2 367
Current portion of long-term liabilities - - 3 361
Total equity and liabilities 144 769 136 841 140 268
ABRIDGED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Audited Audited Audited
15 months 12 months 12 months
to 30 June to 31 March to 31 March
2010 2009 2008
R`000 R`000 R`000
Gross revenue 19 801 16 180 24 095
Rental income contractual 19 541 15 707 23 940
Straight line 260 473 155
Accrual
Operating profit 8 962 4 612 10 031
Net realised loss on sale of investments - - (1 952)
Net realised loss on sale of investment - - (2 026)
properties
Fair value adjustment to listed 12 - -
investments
Fair value adjustment to investment 2 340 7 860 19 502
properties
Fair value adjustment to debentures (219) (6 849) (40 767)
Finance cost (810) (360) (3 902)
Investment revenue 4 389 3 739 1 202
Profit/(loss) before debenture interest 14 674 9 002 (17 912)
Debenture interest (11 832) (7 715) -
Profit/(loss) before taxation 2 842 1 287 (17 912)
Taxation (2 842) (1 287) 17 912
Comprehensive income attributable to - - -
linked unitholders
Profit and total comprehensive income
attributable to:
- Owners of the parent - - -
- Non-controlling interest - - -
Reconciliation between profit attributable
to linked unitholders and headline
earnings
Shares are traded as part of linked units
Profit attributable to linked unitholders# - - -
Net realised loss on sale of investment - - 3 978
properties
Fair value adjustment to investment (2 340) (7 860) (19 502)
properties
Fair value adjustment to 219 6 849 40 767
Debentures
Headline and diluted headline (2 121) (1 011) 25 243
(loss)/earnings
Debenture interest 11 832 7 715 -
Headline and diluted headline earnings 9 711 6 704 25 243
including debenture interest
Distribution (debenture interest)
Interim interest distribution per linked 10.0 - -
unit (cents)
Final interest distribution per linked 3.8 9.0 -
unit (cents)
Total interest distribution per linked 13.8 9.0 -
unit (cents)
Earnings per share
Basic and diluted earnings per linked unit - - -
(cents)#
Headline and diluted headline loss per (2.5) (1.2) 29.4
share (cents)#
Headline and diluted headline earnings per 11.3 7.8 29.4
linked unit (cents)#
Net asset value per linked unit and net 146.6 146.4 138.4
tangible asset value per linked unit
(cents)##
Linked unit statistics (excluding treasury
shares)
Linked units in issue 85 795 988 85 795 988 85 795 988
Effective linked units in issue 85 721 986 85 721 986 85 721 986
Weighted average number of linked units 85 721 986 85 721 986 85 721 986
# Headline earnings have been presented in accordance with IAS 33. The
linked unit structure of the Group whereby every shareholder is a debenture
holder, coupled with the terms of the Debenture Trust Deed which states that
99.9% of profits are attributable to debenture holders, results in the
benefits of improved trading which would be ordinarily attributable to
shareholders being expensed in the income statement as a fair value
adjustment to debentures and debenture interest. This results in no profit
being attributable to ordinary shareholders.
*## Linked unit debentures are included in the net asset value and net
tangible asset value calculation.
ABRIDGED CONSOLIDATED STATEMENTS OF CASH FLOWS
Audited Audited Audited
15 months 12 months 12 months
to 30 June to 31 March to 31 March
2010 2009 2008
R`000 R`000 R`000
Cash inflow from operating activities 4 838 5 527 2 139
Cash (outflow)/inflow from investing (2 693) 47 526 40 600
activities
Cash outflow from financing activities - (17 407) (33 863)
Net increase in cash and cash equivalents 2 145 35 646 8 876
Cash and cash equivalents at beginning of 46 191 10 545 1 669
period
Cash and cash equivalents at end of period 48 336 46 191 10 545
ABRIDGED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Retained Total
capital income R`000
R`000 R`000
Balance at 1 April 2007 857 - 857
Total comprehensive income for the period - -
Balance at 31 March 2008 857 - 857
Total comprehensive income for the period - -
Balance at 31 March 2009 857 - 857
Total comprehensive income for the period - -
Balance at 30 June 2010 857 - 857
ABRIDGED STATEMENTS OF CHANGES IN LINKED UNIT DEBENTURES
Linked unit Linked unit Total
debenture debenture R`000
capital premium
R`000 R`000
Balance at 1 April 2007 857 76 185 77 042
Net fair value adjustment 40 767 40 767
Balance at 31 March 2008 857 116 952 117 809
Net fair value adjustment 6 849 6 849
Balance at 31 March 2009 857 123 801 124 658
Net fair value adjustment 219 219
Balance at 30 June 2010 857 124 020 124 877
ABRIDGED CONSOLIDATED SEGMENT REPORT
Recon-
Eastern Free KwaZulu ciling
Cape State Gauteng Natal item Total
R`000 R`000 R`000 R`000 R`000 R`000
For the 15 months
ended 30 June 2010
Revenue - external 9 145 982 1 090 8 324 - 19 541
customers
Operating profit 6 919 501 (158) 4 133 (2 433) 8 962
Total assets 35 361 4 686 16 439 37 243 51 040 144 769
For the 12 months
ended 31 March 2009
Revenue - external 6 753 746 2 666 5 542 - 15 707
customers
Operating profit 5 435 391 162 2 486 (3 862) 4 612
Total assets 30 829 6 651 19 898 33 248 46 215 136 841
OTHER SEGMENTAL INFORMATION
Audited Audited Audited
30 June 31 March 31 March
2010 2009 2008
Regional profile based on lettable area
Eastern Cape 29% 30% 11%
Free State 12% 9% 3%
Gauteng 20% 21% 71%
KwaZulu-Natal 39% 40% 15%
Vacancy profile based on gross lease area
Gross lease area in square metres as 27 021 25 850 73 127
at end of period
Vacancy area in square metres 7 507 8 275 25 548
Regional vacancy profile
Eastern Cape 11% 6% 2%
Free State 25% 15% 5%
Gauteng 52% 52% 81%
KwaZulu-Natal 12% 27% 12%
Basis of preparation and accounting policies
The accounting policies applied in the preparation of these audited abridged
consolidated results for the 15 months ended 30 June 2010, 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 annual financial statements for the year ended 31 March 2009 except
for IAS 1 and IFRS 8. The adoption of these standards had no material effect
on the results, nor has it required any restatement. These audited abridged
results as set out in this report have been prepared in accordance and
containing the information required by IAS 34 - Interim Financial Reporting,
the Companies Act of South Africa, as amended, and the Listings Requirements
of JSE Limited.
These audited abridged results have been prepared in accordance with the
historic cost basis, except for the measurement of investment properties,
linked units and certain financial assets and financial liabilities which are
stated at fair value.
The financial results are presented in rand, which is Fairvest`s functional
and presentation currency.
Estimates
The financial statements do not include any material estimates.
Auditors` report
The audited financial results for the 15 months ended 30 June 2010 set out
above have been extracted from the Group`s annual financial statements which
have been audited by BDO South Africa Inc. A copy of their unmodified audit
opinion on the consolidated annual financial statements and on the audited
abridged consolidated results is available for inspection at the Company`s
registered offices.
Annual general meeting
The annual general meeting of linked unitholders of Fairvest will be held at
its registered office on Wednesday, 27 October 2010 at 11:00.
COMMENTARY
Introduction
Fairvest is a property investment holding company with investments in commercial
properties in South Africa. Its investment strategy is to create a property
portfolio of significant critical mass through acquisition of quality, high-
yielding properties. Accordingly, investment opportunities are being evaluated
for acquisition on an ongoing basis.
Change of financial year-end
Fairvest Property Holdings Limited and its subsidiaries changed their year-end
from 31 March to 30 June. Consequently the current reporting period represents
15 months whilst the comparative period represents 12 months, thus the amounts
are not entirely comparable between 2010 and 2009.
Review of results
2010 was a year of significant change for the Fairvest Group. After two general
shareholder meetings and an offer to minorities by Rossouw and van der
Westhuizen (Proprietary) Limited a new board of directors was appointed in
January 2010. The management of the property portfolio has been outsourced to
Blend Property Management (Proprietary) Limited and the management of the
Company and its subsidiaries has been moved from Durban to Cape Town. All these
changes were needed to give new direction to the Group and to realise the full
potential of an aging property portfolio.
The Group declared a final distribution of 3.8 cents per linked unit to bring
the total distribution for the 15 months to 13.8 cents (2009: 9.0 cents) per
linked unit, an annualised increase of 22.7%.
Revenue increased by 22.4% to R19.8 million for 15 months compared with 12
months previously. However, if revenue previously derived from Kempton City and
Broadway Nordic properties which were sold at the start of the comparative
period is excluded, annualised revenue increased by 8%. Annualised trading
profits increased by 55.5% largely as a result of cost containment and
streamlining of operations.
The number of properties in the portfolio has remained unchanged during the year
at 11 as we focused on extracting value out of the current portfolio. The value
of the portfolio increased from R86.4 million to R92.2 million largely as a
result of improved occupancies in certain of the properties.
During the period under review the Group invested R2.7 million in the listed
property sector. R1.7 million was invested locally and R1.0 million (AU$0.15
million) in the Australian listed property sector. Subsequent to year-end a
further R4 million (AU$0.60 million) was invested in the Australian listed
property sector.
With R48.3 million of available cash resources and a debt-free balance sheet the
Group is well positioned to take advantage of opportunities the current market
will offer.
Interest distributions and dividends
Interest on debentures has been calculated in terms of the Debenture Trust Deed.
A final interest distribution of 3.8 cents per debenture unit has been declared
for the 15 months ended 30 June 2010 and is payable to linked unitholders
registered in the books of the Company at the close of business on Friday, 15
October 2010. No dividend has been declared for the period in respect of the
linked units.
Last date to trade linked units cum interest Friday, 8 October 2010
payment
Linked units commence trading ex interest payment Monday, 11 October 2010
Record date Friday, 15 October 2010
Payment date Monday, 18 October 2010
Linked units may not be dematerialised or rematerialised between Monday 11
October 2010 and Friday 15 October 2010, both days inclusive.
Directorate
TA Bell, KJ Peter, AB Platt, TP Botsis and DA Johnston resigned as directors on
15 January 2010. JF du Toit was appointed as chairman,
BJ Kriel as CEO and financial director, M Epstein as non-executive director and
PJ van der Merwe as independent non-executive director on 19 January 2010.
Subsequent events
The directors of Fairvest are not aware of any material matter or circumstance
arising since the end of the financial period, not otherwise dealt with in this
report or the financial statements, which materially affect the financial
position of the Group or the results of its operations.
Appreciation
We extend our appreciation to our directors, management and staff for their
valued efforts as well as our advisers and linked unitholders for their
continuing belief in and support of Fairvest.
For and on behalf of the board
JF du Toit BJ Kriel
Chairman Chief Executive Officer
16 September 2010
Cape Town
REGISTERED OFFICE: 1st Floor East Wing, The Palms, 145 Sir Lowry Road, Cape
Town, 8001, PO Box 4083, Durbanville, 7551
TRANSFER SECRETARIES: Computershare Investor Services 2004 (Proprietary)
Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001, PO Box 61051,
Marshalltown, 2107
AUDITOR: BDO South Africa Incorporated Registered auditors
SPONSOR: PSG Capital (Proprietary) Limited
COMPANY SECRETARY: SecCorp Secretarial Services (Proprietary) Limited
PROPERTY MANAGERS: Blend Property Management (Proprietary) Limited
DIRECTORS Executive: BJ Kriel (Financial Director) Non-executive: JF du Toit
(Chairman), M Epstein, PJ van der Merwe #
# independent
Date: 21/09/2010 17:00:07 Produced by the JSE SENS Department.
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