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BNT
BNT
BNT - Bonatla Property Holdings Limited - Provisional reviewed condensed
consolidated results for the year ended 31 December 2010
BONATLA PROPERTY HOLDINGS LIMITED
(Incorporated in the Republic of South Africa
(Registration number 1996/014533/06)
Share code: BNT & ISIN code: ZAE000013694
("Bonatla" or "the company")
PROVISIONAL REVIEWED CONDENSED CONSOLIDATED RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2010
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at As at
31-Dec 31-Dec
2010 2009
Year Year
Reviewed Audited
Notes R`000 R`000
ASSETS
Non-Current assets 324 629 157 596
Goodwill 6 3 261 4 411
Prepayments 7 55 663 56 245
Investment property 8 189 810 20 750
Deposit 9 50 000 50 000
Intangible assets 1 193 1 286
Property, plant and
equipment 24 702 24 904
Current assets 62 283 3 296
Trade and other
receivables 10 60 546 2 170
Prepayments - current
portion 11 582 582
Cash and cash equivalents 1 155 544
Non-current assets held
for sale 40 000 14 900
Total assets 426 912 175 792
EQUITY AND LIABILITIES
Equity capital and
reserves 335 880 150 577
Share capital 12 254 570 250 510
Shares to be issued 12 190 491 1 900
Accumulated loss (109 181) (101 833)
Non-current liabilities 46 325 20 055
Borrowings - long term 13 36 676 19 208
Deferred taxation 14 9 649 847
Current Liabilities 44 707 5 160
Borrowings - short term 13 37 594 2 034
Trade and other payables 6 002 3 126
Taxation 1 111 -
Total equity and
liabilities 426 912 175 792
cents cents
Net asset value per share 50.78 31.45
Net tangible asset value
per share 50.11 30.26
Shares in issue (including 12
to be issued) 661 377 814 478 851 978
Diluted asset value per
share 40.24 31.45
Diluted tangible asset
value per share 39.71 30.26
Total shares (ordinary and 12
preference) and including
to be issued 834 648 934 478 851 978
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the For the
12 months 12 months
ended ended
31-Dec 31-Dec
2010 2009
Reviewed Audited
Notes R`000 R`000
Revenue 24 266 2 163
Other income 20 54
Operating costs (10 801) (4 403)
Fair value adjustments (900) -
Goodwill - impairment 6 (38 432) -
Bargain purchase 5 21 840 -
Operating loss 15 (4 007) (2 186)
Results from operating
activities (4 007) (2 186)
Interest received 591 19
Finance charges 16 (3 417) (909)
Loss before taxation (6 833) (3 076)
Taxation (514) 732
Loss after taxation 17 (7 347) (2 344)
Earnings per share
information (cents)
Loss per share (1.41) (0.70)
Diluted loss per share (1.33) (0.70)
Headline earnings / loss
per share 1.95 (0.70)
Diluted headline earnings /
loss per share
1.83 (0.70)
Weighted average shares in
issue for basic and
headline earnings / loss
per share 519 933 830 332 788 563
Weighted average shares in
issue for diluted earnings
/ loss per share
553 638 623 332 788 563
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Convertible
preference
Share share Share
Capital capital Premium
Notes R`000 R`000 R`000
GROUP
Balance at 1 January 2009
1 853 287 81 786
Shares issued 2 708 163 876
Shares to be issued, now
issued
Shares to be issued
Net loss for the year
Balance at 31 December 2009
4 561 287 245 662
Shares issued in 2010
441 3 619
Shares to be issued per
2009, now issued
Shares to be issued in 2011
Net loss for the year
Balance at 31 December 2010
5 002 287 249 281
Total share capital and
share premium 12 254 570
Total shares to be issued
12
Retained
Shares earnings/
to be issued (Accu-
R`000 mulated Total
Notes loss) R`000
GROUP
Balance at 1
January 2009 46 700 (99 489) 31 137
Shares issued 166 584
Shares to be
issued, now
issued (46 700) (46 700)
Shares to be
issued 1 900 1 900
Net loss for the
year (2 344) (2 344)
Balance at 31
December 2009
1 900 (101 833) 150 577
Shares issued in
2010 4 060
Shares to be
issued per 2009,
now issued (1 900) (1 900)
Shares to be
issued in 2011 190 491 190 491
Net loss for the
year (7 348) (7 348)
Balance at 31
December 2010 190 491 (109 181) 335 880
Total share capital and share
premium
12
Total shares to be issued
12 190 491
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
As at As at
31-Dec 31-Dec
2010 2009
12 months 12
Reviewed months
R`000 Audited
R`000
Cash outflows from operating
activities (8 641) (2 667)
Cash inflows / (outflows) from
investing activities 10 889 (19)
Cash (outflows) / inflows from
financing activities (1 637) 3 015
Net increase in cash and cash
equivalents 611 367
Cash and cash equivalents at the
beginning of the period 544 177
Cash and cash equivalents at the end
of the period 1 155 544
COMMENTARY
1 Basis of preparation
These condensed consolidated financial statements have been prepared in
accordance with the recognition and measurement criteria of International
Financial Reporting Standards ("IFRS"), South African Statements and
Interpretation of Statements of Generally Accepted Accounting Practice (AC 500)
and presentation and disclosure requirements of IAS 34 - Interim Financial
Reporting and the Companies Act of South Africa. The accounting policies
applied in the preparation of these condensed consolidated financial statements
are consistent with those used in the annual financial statements for the year
ended 31 December 2009.
The 2008 and 2009 annual financial statements are subject to a review by the
Gaap Monitoring Panel and there may be a re-statement of the figures for 31
December 2010 and the prior year pending the outcome of the review.
2 Overview
Gross revenue 1,022% up
Headline profit 532% up
Headline earnings per share 379% up
Total assets 143% up
Net assets 123% up
Net asset value per share 61% up
3 Commentary on results
The board of directors of the company is pleased to announce that the group has
returned to a headline earnings profitability and that the assets under the
Group`s control have more than doubled, resulting in the net asset value per
share increasing substantially from 31.45 cents to 50.78 cents.
The 9 Bluezone property companies contributed R1,696 million profit after tax,
before an impairment of goodwill of R37,275 million and a bargain purchase of
R21,840 million.
The results for the year ended 31 December 2010 have been reviewed by Nolands
Inc., and their review report is available for inspection at the company`s
registered office.
4 Segmental analysis
31-Dec 31-Dec
2010 2009
Segmented assets R`000 R`000
Property Investment - Leisure 56 245 56 818
Property Investment - Industrial 94 331 66 032
Property Investment - Commercial
and Retail 245 379 50 000
Document storage 5 472 -
Holding company 25 485 2 942
Consolidated 426 912 175 792
31-Dec 31-Dec
2010 2009
Segmented liabilities R`000 R`000
Property Investment - Leisure - -
Property Investment - Industrial 769 8 017
Property Investment - Commercial
and Retail 43 553 -
Document storage 5 -
Holding company 46 705 17 198
Consolidated 91 032 25 215
Segment revenues and results by reportable segment: income statement
Year Year
ended ended
31-Dec 31-Dec
2010 2010
R`000 R`000
Revenue
Continuing operations
Property Investment - Leisure - -
Property Investment - Industrial 10 242 2 163
Property Investment - Commercial
and Retail 6 023 -
Document storage 48 -
Holding company 7 953 -
Total Revenue 24 266 2 163
Year Year
ended ended
31-Dec 31-Dec
2010 2010
R`000 R`000
Results
Property Investment - Leisure (883) (488)
Property Investment - Industrial 8 240 1 241
Property Investment - Commercial
and Retail 4 085 -
Document storage (251) -
Holding company 2 294 (2 939)
Results from operating activities 13 485 (2 186)
Investment revenue 591 19
Finance charges (3 417) (909)
Headline profit 10 659 (3 076)
Property revaluation (900) -
Goodwill - impairment (38 432) -
Bargain purchase 21 840 -
Loss before taxation (6 833) (3 076)
5 Business combinations - Bluezone acquisitions
The consolidated results were prepared in terms of IFRS 3 Business Combinations.
Consequently, the consolidated results for the year ended 31 December 2010
include the trading results of the 9 Bluezone Property companies since the
effective date, as well as the trading results of the Bonatla Group for the
entire period under review.
Bonatla took effective control of the 9 Bluezone Property companies as from the
22nd October 2010, being the effective date. 100% of the voting equity interests
was acquired in respect of the 9 acquisitions.
Fair
value of
Fair other Assets
value & liabili-ties
of acquired Purchase
property consideration
Quick Leap
Investments 461
(Pty) Ltd -
Africard building
18 000 516 18 270
Milestone Place
Properties (Pty)
Ltd - Milestone
Place building
12 500 (730) 9 830
Property 259
Properties (Pty)
Ltd - Property 259
12 500 (434) 15 230
Mystic Blue Trading
511 (Pty) Ltd -
Prospect Close
building
22 000 2 492 42 950
Nungu Trading 472
-(Pty) Ltd - TUT,
the Heights
building
70 560 (4 635) 46 986
Bishops Court
Properties (Pty)
Ltd - Bishops Court
Section 3-6
22 500 (7 813) 13 972
Copper Moon Trading
249 (Pty) Ltd -
Celtis Plaza
building
29 500 (12 991) 17 627
Chambers Ground
Floor Properties
(Pty) Ltd - Ground
Floor Block E
8 500 (2 995) 8 048
Tropical Paradise
Trading 320 (Pty)
Ltd - Chambers 2 &
3 Floors
13 000 (10 535) 14 458
209 060 (37 125) 187 371
Shares to be issued
183 971
Cash to be paid
3 400
Total acquisition
price
187 371
Profit/(loss)
after
tax prior
(Bargain bargain
purchase)/ purchase/
goodwill impairment
Quick Leap Investments 461 (Pty) Ltd
- Africard building
(246) 316
Milestone Place Properties (Pty) Ltd
- Milestone Place building
(1 940) 93
Property 259 Properties (Pty) Ltd -
Property 259 2 296 19
Mystic Blue Trading 511 (Pty) Ltd -
Prospect Close building
18 458 274
Nungu Trading 472 - TUT, the Heights
building (18 939) 627
Bishops Court Properties (Pty) Ltd -
Bishops Court Section 3-6
(715) 313
Copper Moon Trading 249 (Pty) Ltd -
Celtis Plaza building
(24 864) 64
Chambers Ground Floor Properties (Pty)
Ltd - Ground Floor Block E
(3 447) 40
Tropical Paradise Trading 320 (Pty) Ltd -
Chambers 2 & 3 Floors
11 992 (50)
15 435 1 696
Shares to be issued
Cash to be paid
Total acquisition price
Bargain purchase (21 840)
Goodwill 37 275
15 435
Trade & Trade &
Assets and Liabilities other other
Cash receivables payables
Quick Leap Investments 461 (Pty) Ltd
388 3 993 (3 165)
Milestone Place Properties (Pty) Ltd
173 2 945 (2 883)
Property 259 Properties (Pty) Ltd
63 4 065 (3 862)
Mystic Blue Trading 511 (Pty) Ltd
239 5 364 (4 874)
Nungu Trading 472 (Pty) Ltd
834 8 373 (7 604)
Bishops Court Properties (Pty) Ltd
471 2 030 (2 478)
Copper Moon Trading 249 (Pty) Ltd
290 3 128 (2 601)
Chambers Ground Floor Properties (Pty)
Ltd
64 2 773 (2 505)
Tropical Paradise Trading 320
(Pty) Ltd
215 2 477 (2 800)
2 737 35 148 (32 772)
Cash paid -
Cash received 2 737
Net cash received 2 737
Assets and Liabilities (Cont...) Deferred Bonds
tax
Quick Leap Investments 461 (Pty) Ltd
(700) -
Milestone Place Properties (Pty) Ltd
(964) -
Property 259 Properties (Pty) Ltd
(700) -
Mystic Blue Trading 511 (Pty) Ltd
1 762 -
Nungu Trading 472 (Pty) Ltd (6 238) -
Bishops Court Properties (Pty) Ltd
(938) (6 899)
Copper Moon Trading 249 (Pty) Ltd
(1 127) (12 682)
Chambers Ground Floor Properties (Pty)
Ltd 147 (3 474)
Tropical Paradise Trading 320 (Pty) Ltd
(818) (9 608)
(9 576) (32 663)
The purchase price was agreed upon in October 2009, based on a 10% yield.
Subsequently, Bluezone Investments (Pty) Ltd, a major tenant in two of the
buildings, was placed into liquidation and a number of tenants did not renew
their leases. This resulted in a decrease in the value of some of the buildings.
The value of the Heights building increased as a result of a better rental and a
longer renewed period.
These business combinations were accounted for by applying the acquisition
method in which the assets acquired and the liabilities assumed were done at
fair value.
The Africard and the Prospect Close buildings are in the process of being sold,
details of which will be included in a separate announcement.
31 December 31 December
2010 2009
R`000 R`000
6 Goodwill 3 261 4 411
The decrease in goodwill is due to a property that was disposed of during the
financial year.
7 Prepayments
Prepayments relate to the two ninety-nine year leases entered into in 2007.
These are being amortised over the life of the lease.
8 Investment property
The increase is due to the acquisition of the 9 Bluezone Property companies.
9 Deposit 50 000 50 000
The non-refundable deposit paid in respect of the VLC acquisition. There has
been no movement as this is a non-refundable deposit given to ensure that the
Durban Point transaction should proceed.
The directors are of the opinion that no impairment is required as the land will
be transferred on the finalisation of the court case relating to the
Environmental Impact Assessment.
The court case is expected to be finalised during the latter part of 2011.
10 Trade and other
receivables 60 546 2 170
Due by Bluezone Property
Holding companies 40 633 -
A sufficient number of shares to be issued to the Holding companies, will be
held as security.
Amounts owing, secured in
terms of loan agreements 15 720 -
Others - not secured 4 193 2 170
The directors are of the opinion that no impairment is required.
11 Prepayments - current
portion 582 582
The two ninety-nine year leases are amortised over the life of the leases and
the R582,000 represents the current portion that will be amortised in the next
12 months.
12 Share Capital
Share
capital
and Number
share of
premium shares
Reconciliation 000`s 000`s
Shares issued - 31 December 2009
250 510 456 101 978
Shares issued in 2010
For cash 1 900 22 750 000
To settle liabilities 2 160 21 357 750
254 570 500 209 728
Shares to be issued
Ordinary - Bluezone acquisition
772 77 168 086
- settle liabilities 6 520 84 000 000
Total number of ordinary shares in
issue (and to be issued)
661 377 814
Preference - Bluezone acquisition
1 733 173 271 120
Share premium - ordinary and
preference 181 466 -
Total 190 491 834 648 934
Weighted average shares in issue for
basic and headline earnings / (loss)
per share
519 933 830
Weighted average shares in issue for
diluted basic and headline earnings /
(loss) per share
553 638 623
13 Borrowings
Bonds 32 114 6 786
Loan 11 982 13 021
Others 30 174 2 034
Four of the 9 Bluezone Properties companies were acquired with existing bonds
The majority of the other short term borrowings, which arose on the acquisition
of the 9 Bluezone Property companies, will be settled from the proceeds of the
non-current assets held for sale.
14 Deferred taxation
R9,576 million arose on the
acquisition of the 9
Bluezone Property companies 9 649 847
15 Operating loss (4 007) (2 186)
The operating loss, after adjusting for fair value adjustments, impairments and
the bargain purchase, results in a sustainable operating profit of R13,485
million. Rental and other income increased substantially due to rentals received
in respect of the Karbotek, Durban Point and the Bluezone acquisitions, which
did not occur in 2009.
Likewise, the operating costs and certain fees relating to the Bluezone
acquisitions were incurred in 2010 and not in 2009.
16 Finance charges
Year Year
ended ended
31-Dec 31-Dec
2010 2010
R`000 R`000
Charged by related parties 2 176 53
Bond finance charges 1 080 826
Others 161 30
Total 3 417 909
During 2009, a related party agreed not to charge interest on the loan. If
interest had been charged, the interest charged by related parties would have
been R2,234 million.
17 Reconciliation of headline earnings / (loss)
Year Year
ended ended
31-Dec 31-Dec
2010 2010
R`000 R`000
Loss after taxation (7 347) (2 344)
Investment property revaluation
900 -
Goodwill - impairment 38 432 -
Bargain purchase (21 840) -
Headline earnings / (loss) 10 145 (2 344)
Earnings per share information
(Loss) per share (1.41) (0.70)
Diluted (loss) per share (1.33) (0.70)
Headline earnings /(loss) 1.95 (0.70)
per share
Diluted headline earnings / (loss) per 1.83 (0.70)
share
Weighted average shares in issue for basic
and headline earnings / (loss) per share
519 933 830 332 788 563
Weighted average shares in issue for
diluted basic and headline earnings /
(loss) per share
553 638 623 332 788 563
18 Related parties
The immediate parent and ultimate controlling party of the group is Bonatla
Property Holdings Limited which is incorporated in the Republic of South Africa.
Transactions between the company and its subsidiaries, which are related parties
of the company, have been eliminated on consolidation.
For the For the
year ended year ended
31-Dec 31-Dec
2010 2010
R`000 R`000
Transactions between the group and other
related parties are as follows:
CDA Property Consultants (Pty) Limited
- asset management and
property management fee 84 72
- commission on sale of
Morgan Creek property 770 -
- interest on loan account 2 019 -
- loan account balance (11 983) (13 521)
- loan account balance - 500
Rara Avis Property Investments (Pty) Ltd
- loan account balance (701) (1 388)
- interest on loan account 155 37
Gemini Moon Trading 177 (Pty) Ltd
- loan account balance 2 285 (47)
- interest on loan account 1 16
Hail Investments
- loan account balance (3 400) -
C Douglas is a director and shareholder of CDA Property Consultants (Pty) Ltd
and Rara Avis Property Investments (Pty) Ltd and a shareholder of Gemini Moon
Trading 177 (Pty) Ltd and Hail Investments (Pty) Ltd.
C Douglas is the life partner of the CEO, N Vontas and is the cheque signatory
on the bank accounts.
For the For the
year year
ended ended
31-Dec 31-Dec
2010 2010
R`000 R`000
Compensation of key personnel
Executive directors:
- salaries 865 695
- fees - -
Non executive directors:
- fees 40 -
905 695
19 Post balance sheet events
Bonatla has purchased 100% of the shares and claims in an additional three
property owning companies totalling R85 million. Special resolutions have been
registered by the Sellers and the required number of Bonatla`s shareholders have
given unconditional and irrevocable undertakings to vote in favour of these
acquisitions.
20 Dividends
No dividends were declared during the period.
21 Management of the group
There are no appointed asset managers and this function has been managed by the
company during the period under review.
22 Board of Directors
Mr DA Scott* - Re-elected as director on 29 June 2010 in terms of Article 88 of
the Articles
Mr DBW King* - Re-elected as director on 29 June 2010 in terms of Article 88 of
the Articles
Mr DA Johnston - Resigned on the 28 April 2010
Mr RL Rainier*
Mr NG Vontas*
Mr MH Brodie
Mr SST Ngcobo
* - Executive Directors - Non-executive directors
Mr DWB King resigned on the 30 September 2010 as the Chief Operating Officer,
but will continue as an executive director
23 Contingent claims and liabilities
Litigation against Catalyst (Pty) Limited (`Catalyst")
Bonatla has instituted litigations against Catalyst, who were the portfolio
managers of Bonatla at the time that the interest rate swap agreement with
Nedcor was entered into. The interest swap agreement was not disclosed to the
directors of Bonatla by Catalyst. This interest swap resulted in substantial
diminution of shareholder value and Bonatla is claiming R30 million from
Catalyst.
Summons has been issued and a court date is expected to be allocated in 2011.
Litigation re Saxum Group (Pty) Limited ("Saxum")
As a result of the conditions precedent as set out in the Saxum acquisition
agreement not being fulfilled, Bonatla became liable for a penalty owing to
Saxum amounting to R5 million. Bonatla paid R2 million of this in 2007 and
security has been given for the balance.
On 2 October 2007, Saxum obtained an unopposed judgement against Bonatla for an
amount of R4 million.
Bonatla has applied for the rescission of the judgement granted to Saxum.
The legal proceedings are in place and are expected to be resolved in 2011.
Bonatla`s attorneys are confident of the positive resolution of the matter.
Litigation re The Bebinchand Seevnarayan Trust ("The Trust")
The Trust undertook to advance an amount of R35 million to Bonatla as a bridging
loan during 2007. Bonatla was liable for both interest and a fee of R3 million,
of which R1,5 million was paid. To date, no amount has been paid to Bonatla in
terms of the loan agreement. Bonatla is consequently suing The Trust for the
return of the R1,5 million due to non-performance by The Trust. The court case
should happen in 2011.
The attorneys of Bonatla are confident of a favourable conclusion to this
matter.
Litigation re the Durban Point Waterfront acquisition
Litigation relating to the zoning and to the EIA has been instituted by various
parties which impacts on the ultimate transfer of the 200,000 sq. metres to
Bonatla. A legal opinion has been obtained which indicates that the Bonatla
transaction will be completed.
24 Future prospects
The continued weakness in the property industry offers opportunities for Bonatla
to expand its business and enhance its total return to shareholders.
The above objective will be pursued while maintaining the total debt ratio below
45% of total assets and interest cover above 2.25 times.
The company is now stabilised, generating profits and positive cash flow on a
monthly basis. This will provide a sound platform for the future intended
acquisition strategy.
25 Renewal of cautionary announcement
Shareholders are referred to the previous cautionary announcements dated 04
January 2011, 20 January 2011 and
15 February 2011 respectively and are advised that certain negotiations referred
to therein are still in progress.
Shareholders are accordingly advised to continue to exercise caution in dealing
in their securities.
JOHANNESBURG
25 March 2010
Directors:
MH Brodie, SST Ngcobo, DA Scott*, DWB King*, (CF de Lange - alternate), RL
Rainier*, NG Vontas* - (* - Executive Directors, - Non-executive Directors)
Registered address:
623 Prince George Ave, Brenthurst, Brakpan, 1541
Company Secretary:
Gold Equity Registrars C.C.
Transfer Secretaries:
Computershare Investor Services (Pty) Ltd
Auditors:
Nolands Inc.
Sponsors:
Arcay Moela Sponsors (Pty) Ltd
Date: 25/03/2011 16:28:01 Produced by the JSE SENS Department.
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