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FPT
FPT
FPT - Fountainhead Property Trust - Unaudited Interim Results for the six months
ended 31 March 2011
FOUNTAINHEAD PROPERTY TRUST
Share code: FPT ISIN:ZAE000097416
UNAUDITED INTERIM RESULTS for the six months ended 31 March 2011
* Interim distribution of 27.71 cents per unit
* R1 billion rights offer successfully concluded
* Vacancies down to 6 percent
* Strong earnings enhancing pipeline
The directors of Fountainhead Property Trust Management Limited, the manager of
Fountainhead Property Trust, submit their report on the unaudited results of
Fountainhead Property Trust for the six months ended 31 March 2011.
STATEMENT OF FINANCIAL POSITION
Unaudited Audited Unaudited
as at as at as at
31 Mar 2011 30 Sep 2010 31 Mar 2010
R`000 R`000 R`000
ASSETS
Property assets 8 034 369 7 940 044 7 760 981
Investment properties 7 764 419 7 677 024 7 511 003
Straight-line lease accrual 269 950 263 020 249 978
Current assets 407 309 397 501 394 784
Trade and other receivables 45 638 53 874 43 019
Cash and cash equivalents 361 671 343 627 351 765
Total assets 8 441 678 8 337 545 8 155 765
UNITHOLDERS` FUNDS AND LIABILITIES
Unitholders` funds 6 731 933 6 719 106 6 708 418
Capital of the fund 1 933 354 1 933 354 1 933 354
Capital reserve 558 812 513 837 501 906
Revaluation reserve 3 969 758 4 008 835 4 023 120
Retained earnings 270 009 263 080 250 038
Non-current liabilities
Interest-bearing liability 1 310 758 1 225 000 1 060 000
Current liabilities 398 987 393 439 387 347
Trade and other payables 122 984 126 201 115 925
Unitholders for distribution 276 003 267 238 271 422
Total unitholders` funds and
liabilities 8 441 678 8 337 545 8 155 765
STATEMENT OF COMPREHENSIVE INCOME
Unaudited Audited Unaudited
6 months to 12 months to 6 months to
31 Mar 2011 30 Sep 2010 31 Mar 2010
R`000 R`000 R`000
Income 435 765 845 963 411 467
Contractual rental income 428 836 831 482 410 028
Straight-line lease adjustment 6 929 14 481 1 439
Expenses (116 169) (219 979) (106 077)
Administrative expenses (21 391) (42 265) (20 250)
Property operating expenses (94 778) (177 714) (85 827)
Operating profit 319 596 625 984 305 390
Net finance costs (36 664) (72 843) (32 529)
Interest received 11 384 25 259 13 257
Interest paid (48 048) (98 102) (45 786)
Profit on disposal of investment
properties 12 827 1 932 -
Fair value adjustments to
investment properties (6 929) (5 725) (1 439)
Profit and total comprehensive
income for the period 288 830 549 348 271 422
Basic earnings per unit (cents) 29.00 55.15 27.25
Headline earnings and
distribution income reconciliation
Profit for the period 288 830 549 348 271 422
Adjust for:
Profit on disposal of investment
properties (12 827) (1 932) -
Fair value adjustments to
investment properties 6 929 5 725 1 439
Headline earnings 282 932 553 141 272 861
Less: straight-line lease
adjustment (6 929) (14 481) (1 439)
Distribution income 276 003 538 660 271 422
Headline earnings per unit (cents) 28.41 55.53 27.39
Distribution per unit (cents) 27.71 54.08 27.25
Interim distribution per unit
(cents) 27.71 27.25 27.25
Final distribution per unit
(cents) - 26.83 -
Units in issue 996 043 081 996 043 081 996 043 081
STATEMENT OF CASH FLOWS
Unaudited Audited Unaudited
6 months to 12 months to 6 months to
31 Mar 2011 30 Sep 2010 31 Mar 2010
R`000 R`000 R`000
Cash effects from operating
activities
Profit for the period 288 830 549 348 271 422
Adjustments for:
Straight-line lease adjustment (6 929) (14 481) (1 439)
Interest received (11 384) (25 259) (13 257)
Interest paid 48 048 98 102 45 786
Profit on disposal of investment
properties (12 827) (1 932) -
Fair value adjustments to
investment properties 6 929 5 725 1 439
Operating profit before changes
in working capital 312 667 611 503 303 951
Trade and other receivables
decreased/(increased) 8 236 (7 332) 3 523
Trade and other payables
(decreased)/increased (3 217) 10 074 (202)
Cash generated from the operations 317 686 614 245 307 272
Interest received 11 384 25 259 13 257
Interest paid (48 048) (98 102) (45 786)
Income distributions (267 238) (533 381) (261 959)
Cash flows from operating
activities 13 784 8 021 12 784
Cash effects from investing
activities
Additions to investment properties (139 498) (326 266) (139 891)
Proceeds from disposal of
investment properties 58 000 18 000 -
(81 498) (308 266) (139 891)
Cash effects from financing
activities
Long-term loan raised 85 758 310 000 145 000
85 758 310 000 145 000
Net increase in cash and cash
equivalents 18 044 9 755 17 893
Cash and cash equivalents at the
beginning of the period 343 627 333 872 333 872
Cash and cash equivalents at the
end of the period 361 671 343 627 351 765
STATEMENT OF CHANGES IN UNITHOLDERS` FUNDS
Capital of Capital Revaluation
(R`000) the fund reserve reserve
Balance at 1 October 2009 1 933 354 501 906 4 024 559
Total comprehensive income for
the period
Profit and total comprehensive
income for the period - - -
Transactions with unitholders,
recorded directly in equity
Fair value adjustment on investment
properties transferred to revaluation
reserve (1 439)
Income distributions
Total transactions with
unitholders - - (1 439)
Balance as at 31 March 2010 1 933 354 501 906 4 023 120
Balance at 1 October 2010 1 933 354 513 837 4 008 835
Total comprehensive income for
the period
Profit and total comprehensive
income for the period - - -
Transactions with unitholders,
recorded directly in equity
Profit and revaluation reserve realised
on sale of properties transferred to
revaluation reserve 44 975 (32 148)
Fair value adjustment on investment
properties transferred to revaluation
reserve (6 929)
Income distributions
Total transactions with
unitholders - 44 975 (39 077)
Balance as at 31 March 2011 1 933 354 558 812 3 969 758
Total
Retained unitholders`
(R`000) earnings funds
Balance at 1 October 2009 248 599 6 708 418
Total comprehensive income for
the period
Profit and total comprehensive
income for the period 271 422 271 422
Transactions with unitholders,
recorded directly in equity
Fair value adjustment on investment
properties transferred to revaluation
reserve 1 439 -
Income distributions (271 422) (271 422)
Total transactions with
unitholders (269 983) (271 422)
Balance as at 31 March 2010 250 038 6 708 418
Balance at 1 October 2010 263 080 6 719 106
Total comprehensive income for
the period
Profit and total comprehensive
income for the period 288 830 288 830
Transactions with unitholders,
recorded directly in equity
Profit and revaluation reserve realised
on sale of properties transferred to
revaluation reserve (12 827) -
Fair value adjustment on investment
properties transferred to revaluation
reserve 6 929 -
Income distributions (276 003) (276 003)
Total transactions with
unitholders (281 901) (276 003)
Balance as at 31 March 2011 270 009 6 731 933
COMMENTARY
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The unaudited interim results have been prepared in accordance with
International Financial Reporting Standards (IFRS), IAS 34 - Interim Financial
Reporting and the requirements of the Collective Investment Schemes Control Act.
The accounting policies are consistent in all respects with those applied in the
prior year.
2. DISTRIBUTION PER UNIT
Fountainhead Property Trust`s net distributable income for the first six months
of the financial year amounts to 27.71 cents per unit, 1.7 percent greater than
the comparable period last year. The muted growth is a direct result of the
short-term dilutionary effects of the Blue Route Mall redevelopment project.
3. MAJOR CAPITAL PROJECT
Blue Route Mall
The redevelopment of the mall is progressing well with approximately 44 percent
of the work complete. The letting of the mall is in progress, with signed leases
representing 81 percent of the new mall`s 56 000 m2 having been concluded. The
anticipated opening date of the new mall remains 1 April 2012.
4. ACQUISITIONS AND DISPOSALS
The Trust has signed agreements to purchase the following properties:
Sector Building name Location Price Initial
yield
Office CK3 Constantia Kloof, JHB R204 000 000 9.10%
Office 300 Middel
Street Brooklyn, Pretoria R214 000 000 8.65%
Office Yellowwood &
Cedarwood Bryanston, JHB R99 400 000 9.00%
Retail Access Park* Kenilworth, CT R419 000 000 8.69%
* Purchase subject to conditions precedent
The Trust has sold the following properties during the past six months:
Sector Building name Location Transfer date
Office Human Rights House Parktown, JHB 11 October 2010
Office 22 Wellington Road Parktown, JHB 2 February 2011
Selling price Valuation Profit on sale
R R R
38 500 000 28 661 000 9 839 000
19 500 000 16 512 000 2 988 000
5. SEGMENTAL INFORMATION
Mar 2011
6 months
Net
Revenue income % of
Rm Rm total
Retail 305 234 81
Office blocks 67 67 23
Industrial 42 32 11
Specialised 15 15 5
Corporate - (59) (20)
Total 429 289 100
Sep 2010
12 months
Net
Revenue income % of
Rm Rm total
Retail 597 465 86
Office blocks 124 99 18
Industrial 81 63 12
Specialised 29 29 6
Corporate - (117) (22)
Total 831 539 100
Mar 2010
6 months
Net
Revenue income % of
Rm Rm total
Retail 294 231 85
Office blocks 60 47 17
Industrial 41 32 12
Specialised 15 15 6
Corporate - (54) (20)
Total 410 271 100
6. VACANCY LEVELS
Vacancy levels in terms of rentable area were as follows:
Sector
% Mar 2011 Sep 2010 Mar 2010
Retail 4 5 5
Office blocks 14 12 12
Industrial 8 10 9
Specialised - - -
Total 6 7 7
By value, the vacancies equated to 4.5 percent of potential rental income, an
improvement on the 5 percent at year-end.
In the retail sector 67 percent of the vacancies were contained in The
Brightwater Commons, The Boulders Shopping Centre and at the offices located at
Centurion Mall.
The office sector vacancy is primarily situated in Grayston Ridge, AMR Office
Park and The Ambridge. This sector remains under pressure.
Letting conditions in the industrial sector have improved during the last
quarter.
7.SUBSEQUENT EVENTS - RIGHTS OFFER
Fountainhead`s R1 billion rights offer has been successfully concluded. In total
166.67 million units were offered and 97 percent of unitholders representing
161.2 million units followed their rights. Excess rights applications of 55.8
million units (34 percent) were received.
The allocation of the 5.45 million excess units available was completed on
Thursday, 14 April 2011.
8. PROSPECTS
Based on the board`s assessment of the current economic climate, the temporary
impact of the Blue Route Mall redevelopment and the low returns on the rights
issue cash pending investment into property, it is anticipated that distribution
per unit for the year ended 30 September 2011 will increase marginally compared
with the year ended 30 September 2010. This forecast has not been reviewed or
reported on by Fountainhead Property Trust`s auditor.
9. DISTRIBUTION ANNOUNCEMENT
Notice is hereby given of distribution No. 56 of 27.71 cents per unit for the
six months ended 31 March 2011.
The last date to trade cum distribution will be Friday, 20 May 2011. The units
of Fountainhead Property Trust will commence trading ex-distribution on Monday,
23 May 2011 and the record date will be Friday, 27 May 2011. The distribution
will be paid on Monday, 30 May 2011.
Unit certificates may not be dematerialised or rematerialised between Monday, 23
May 2011 and Friday, 27 May 2011, both dates inclusive.
BY ORDER OF THE BOARD
Fountainhead Property Trust Management Limited
(Reg No. 1983/003324/06)
5 May 2011
Directors:
WM Kirchmann (Chairman), AE Raubenheimer (Managing), VA Christian, HY Laher, DS
Ogbu, JD Rainier, SJ Segar, S Shaw-Taylor
Transfer secretaries:
Computershare Investor Services (Pty) Ltd
70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Secretary and registered office:
Broll Property Group (Pty) Ltd
Broll House, 27 Fricker Road, Illovo
Johannesburg, 2196
(PO Box 1455, Saxonwold, 2132)
Short name: FPT
Share code: FPT ISIN: ZAE000097416
Sponsor: Standard Bank
E-mail: fountainhead@standardbank.co.za
Website: www.fountainheadproperty.co.za
Date: 06/05/2011 09:00:01 Produced by the JSE SENS Department.
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