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FPT
FPT
FPT - Fountainhead Property Trust Management Limited - Summary of audited final
results for the year ended 30 September 2011
Fountainhead Property Trust Management Limited
(Reg No. 1983/003324/06)
Share code: FPT
ISIN: ZAE000097416
SUMMARY OF AUDITED FINAL RESULTS for the year ended 30 September 2011
* Final distribution of 27.56 cents per unit
* Gearing of 12 percent
* Market capitalisation of R7.8 billion
* NAV of R6.69 per unit
The directors of Fountainhead Property Trust Management Limited, the manager of
Fountainhead Property Trust, submit their report on the audited results of
Fountainhead Property Trust for the year ended 30 September 2011. These
financial statements have been summarised from the audited financial statements
on which KPMG Inc. have issued an unmodified audit opinion and which are
available for inspection at the registered office.
STATEMENT OF FINANCIAL POSITION
2011 2010
R`000 R`000
ASSETS
Property assets 8 815 317 7 940 044
Investment properties 8 529 779 7 677 024
Straight-line lease accrual 285 538 263 020
Current assets 454 562 397 501
Trade and other receivables 70 453 53 874
Cash and cash equivalents 384 109 343 627
Total assets 9 269 879 8 337 545
UNITHOLDERS` FUNDS AND LIABILITIES
Unitholders` funds 7 776 713 6 719 106
Capital of the fund 2 874 030 1 933 354
Capital reserve 574 903 513 837
Fair value reserve 4 042 182 4 008 835
Retained earnings 285 598 263 080
Non-current liabilities
Interest-bearing liability 355 940 1 225 000
Current liabilities 1 137 226 393 439
Trade and other payables 123 783 126 201
Interest-bearing liability 693 000 -
Unitholders for distribution 320 443 267 238
Total unitholders` funds and liabilities 9 269 879 8 337 545
STATEMENT OF COMPREHENSIVE INCOME
2011 2010
R`000 R`000
Income 902 263 845 963
Contractual rental income 879 745 831 482
Straight-line lease adjustment 22 518 14 481
Expenses (228 904) (219 979)
Administrative expenses (44 982) (42 265)
Property operating expenses (183 922) (177 714)
Operating profit 673 359 625 984
Net finance costs (54 395) (72 843)
Interest received 27 703 25 259
Interest paid (82 098) (98 102)
Profit on disposal of investment properties 13 869 1 932
Fair value adjustments to investment properties 80 544 (5 725)
Profit for the year 713 377 549 348
Total comprehensive income for the year 713 377 549 348
Basic/diluted earnings per unit (cents) 66.36 55.15
Headline earnings and distribution income
reconciliation
Profit for the year 713 377 549 348
Adjust for:
Profit on disposal of investment properties (13 869) (1 932)
Fair value adjustments to investment properties (80 544) 5 725
Headline earnings 618 964 553 141
Less: straight-line lease adjustment (22 518) (14 481)
Distribution income 596 446 538 660
Headline earnings per unit (cents) 57.58 55.53
Distribution per unit (cents) 55.27 54.08
Interim distribution per unit (cents) 27.71 27.25
Final distribution per unit (cents) 27.56 26.83
Weighted average units in issue 1 075 038 515 996 043 081
Units in issue at year-end 1 162 709 748 996 043 081
COMMENTARY
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The annual results have been prepared in accordance with International Financial
Reporting Standards (IFRS), the AC 500 series issued by the Accounting Practices
Board, the requirements of the Collective Investment Schemes Control Act and the
JSE Limited ("JSE") Listings Requirements.
The accounting policies are consistent in all material respects with those
applied in prior years.
The annual results have been prepared under the supervision of Mr Anton
Raubenheimer CA (SA).
2. INCOME DISTRIBUTION PER UNIT
Fountainhead Property Trust`s net distribution income for the six months ended
September 2011 amounts to 27.56 cents per unit, 2.7 percent greater than the
comparable period last year. The net distribution for the financial year ended
September 2011 is 55.27 cent per unit, which is 2.2 percent greater than the
comparable period last year.
3. BORROWINGS
Interest-bearing liabilities comprise:
Term Loan A - a R750 000 000 interest only facility at a rate of prime less 2.3%
payable by 24 June 2012. A total of R243 000 000 of this facility has been
utilised.
Term Loan B - a R250 000 000 interest only facility fixed at a rate of 11.07%
until 15 February 2013. This facility is payable by 24 June 2012, with the fixed
interest rate transferable to any subsequent facility.
Term Loan C - a R200 000 000 interest only facility fixed at a rate of 10.72%
until 22 July 2012.
This facility is payable by 22 July 2012.
Term Loan D - the Blue Route Mall Development Loan Facility - a R935 000 000
interest only facility floating at a rate of 1 month JIBAR + 2.42% until 31 May
2015. This facility is payable by 31 May 2015. To date R355 940 494 has been
drawn from the facility. R350 000 000 of the facility has been fixed at 8.42%
until 31 May 2015. Interest payments will be capitalised on this facility until
the development is completed.
Term Loan E - a R600 000 000 interest only facility floating at a rate of 1
month JIBAR + 2.25% until 28 February 2016. This facility has not been accessed
as yet.
Based on preliminary discussions with the bank, the risk of new facilities not
being granted is minimal due to the low gearing of the Trust.
4. RIGHTS OFFER
During the year the Trust raised R1 billion by way of a rights issue. The rights
issue was oversubscribed by 34 percent.
5. MAJOR CAPITAL PROJECT
Blue Route Mall
The redevelopment of the mall is progressing well with approximately 68 percent
of the work complete. The letting of the mall is in progress, with signed leases
representing 96 percent of the new mall`s 56 000 m2 having been concluded. The
anticipated opening date of the new mall is April 2012.
6. ACQUISITIONS AND DISPOSALS
The Trust has purchased the following properties during the year:
Initial Transfer
Sector Building name Location Price yield date
Office 300 Middel Nieuw Muckleneuk,
Street PTA 219 621 000 8.65% 7 June 2011
Office CK3 Constantia Kloof,
JHB 204 373 000 9.40% 30 June 2011
Office Yellowwood Bryanston, JHB 32 168 000 8.50% 27 June 2011
The Trust has successfully negotiated the purchase of the remaining 25 percent
undivided share in Centurion Mall with an effective date of 1 September 2011.
The purchase price is approximately R762 million at an expected initial yield of
7.1 percent. Transfer is expected to take place by December 2011.
In addition the Trust has a signed purchase agreement to acquire Access Park for
a price of approximately R400 million at a yield of 9 percent. The acquisition
is subject to various conditions precedent.
The Trust has sold the following properties during the year:
Net selling
Sector Building name Location Transfer date price
Retail Northmead
Mall Northmead, Benoni 23 June 2011 50 688 000
Office Human Rights
House Parktown, JHB 11 October 2011 38 500 000
Office 22 Wellington
Road Parktown, JHB 2 February 2011 19 500 000
Industrial Zero Park Strijdom Park, JHB 14 April 2011 3 700 000
Profit on
Sector Building name Location Valuation sale
Retail Northmead Mall Northmead,
Benoni 50 264 000 424 000
Office Human Rights House Parktown, JHB 28 661 000 9 839 000
Office 22 Wellington Road Parktown, JHB 16 512 000 2 988 000
Industrial Zero Park Strijdom Park, JHB 3 082 000 618 000
Subsequent to year-end, Medsave House has been sold for a net price of R2.4
million. Transfer was registered on 3 October 2011.
7. SEGMENTAL INFORMATION
Sep 2011
Revenue Net income % of total
Rm Rm
Retail 621 482 81
Office blocks 143 116 20
Industrial 85 68 11
Specialised 31 31 5
Corporate - (101) (17)
Total 880 596 100
Sep 2010
Revenue Net 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
STATEMENT OF CASH FLOWS
2011 2010
R`000 R`000
Cash effects from operating activities
Profit for the year 713 377 549 348
Adjustments for:
Straight-line lease adjustment (22 518) (14 481)
Interest received (27 703) (25 259)
Interest paid 82 098 98 102
Profit on disposal of investment property (13 869) (1 932)
Fair value adjustments to investment properties (80 544) 5 725
Operating profit before changes in working capital 650 841 611 503
Trade and other receivables increased (16 579) (7 332)
Trade and other payables (decreased)/ increased (2 418) 10 074
Cash generated from operations 631 844 614 245
Interest received 27 703 25 259
Interest paid (82 098) (98 102)
Income distributions (589 424) (533 381)
Cash (outflows)/inflows from operating activities (11 975) 8 021
Cash effects from investing activities
Additions to investment properties (870 730) (326 266)
Proceeds from disposal of investment properties 112 388 18 000
Cash outflows from investing activities (758 342) (308 266)
Cash effects from financing activities
Long-term loan raised 355 940 310 000
Long-term loan repaid (532 000) -
Issue of units 1 000 000 -
Rights offer expenses (13 141) -
Cash inflows from financing activities 810 799 310 000
Net increase in cash and cash equivalents 40 482 9 755
Cash and cash equivalents at beginning of the year 343 627 333 872
Cash and cash equivalents at end of the year 384 109 343 627
STATEMENT OF CHANGES IN UNITHOLDERS` FUNDS
Capital of Capital Fair value
(R`000) the fund reserve reserve
Balance at 1 October 2009 1 933 354 501 906 4 024 559
Total comprehensive income for the year
Profit and total comprehensive
income for the year - - -
Transactions with unitholders,
recorded directly in equity
Profit and fair value reserve
realised on sale of property
transferred to capital reserve 11 931 (9 999)
Fair value adjustment on
investment properties
transferred to fair value reserve (5 725)
Income distributions
Total transactions with unitholders - - (15 724)
Balance as at 30 September 2010 1 933 354 513 837 4 008 835
Total comprehensive income for the year
Profit and total comprehensive
income for the year - - -
Transactions with unitholders,
recorded directly in equity
Profit and fair value reserve
realised on sale of properties
transferred to capital reserve - 61 066 (47 197)
Fair value adjustment on investment
properties transferred to fair value reserve 80 544
Issue of units 953 817 - -
Rights offer expenses (13 141) - -
Income distributions
Total transactions with unitholders 940 676 61 066 33 347
Balance as at 30 September 2011 2 874 030 574 903 4 042 182
Total
Retained unitholders`
(R`000) earnings funds
Balance at 1 October 2009 248 599 6 708 418
Total comprehensive income for the year
Profit and total comprehensive
income for the year 549 348 549 348
Transactions with unitholders,
recorded directly in equity
Profit and fair value reserve
realised on sale of property
transferred to capital reserve (1 932) -
Fair value adjustment on investment
properties transferred to fair value reserve 5 725 -
Income distributions (538 660) (538 660)
Total transactions with unitholders (534 867) (538 660)
Balance as at 30 September 2010 263 080 6 719 106
Total comprehensive income for the year
Profit and total comprehensive income for the year 713 377 713 377
Transactions with unitholders, recorded directly
in equity
Profit and fair value reserve
realised on sale of properties
transferred to capital reserve (13 869) -
Fair value adjustment on investment properties
transferred to fair value reserve (80 544) -
Issue of units 46 183 1 000 000
Rights offer expenses - (13 141)
Income distributions (642 629) (642 629)
Total transactions with unitholders (690 859) 344 230
Balance as at 30 September 2011 285 598 7 776 713
8. VACANCY LEVELS
Vacancy levels in terms of rentable area at 30 September were as follows:
Sector % Sep 2011 Sep 2010
Retail 7 5
Office blocks 10 12
Industrial 7 10
Specialised - -
Total 7 7
By value, the vacancies equated to 5 percent of potential rental income,
slightly higher than the 4.5 percent at half-year. Approximately 12
percent of the current vacant space has been let for future occupation.
In the retail sector 85 percent of the vacancies were contained in The
Brightwater Commons, The Boulders Shopping Centre and at the offices located at
Centurion Mall. The vacancy in this sector has increased since half-year mainly
due to PBMR vacating office space at Centurion Mall.
The office sector vacancy is primarily situated in Grayston Ridge, AMR Office
Park and Wierda Mews. Letting conditions in this sector remain challenging.
The Industrial sector vacancy is primarily located at Supreme Industrial Park
and the Jet Park mini-units.
9. LEASE EXPIRY PROFILE
The lease expiry profile by rentable area as at 30 September 2011 is as follows
(%):
Building Vacant 2012 2013 2014
Retail 7 19 14 17
Offices 10 13 7 8
Industrial 7 44 29 15
Specialised 0 0 0 0
Total 7 24 16 14
Building 2015 2016 >2016
Retail 18 11 14
Offices 9 5 48
Industrial 3 2 0
Specialised 0 0 100
Total 12 7 20
10. PORTFOLIO VALUATIONS
The composition of Fountainhead Property Trust`s portfolio, as valued by the
independent valuer, Rode and Associates CC, as at 30 September 2011, is as
follows:
Value Forward EY % of portfolio
Sector (Rm) Cents/unit (%) 2011 2010
Retail 6 348 546 8.3 72 74
Office blocks 1 589 137 9.3 18 15
Industrial 571 49 11.3 7 7
Specialised 307 26 10.8 3 4
Total property 8 815 758 8.8 100 100
Interest-bearing
liabilities (1 049) (90)
Net current assets 10 1
7 776 669
11. DIRECTORS
During the year Sean Segar resigned effective 1 August 2011. David Savage joined
the board effective 2 August 2011.
12. PROSPECTS
Notwithstanding the difficult trading conditions and the impact of the Blue
Route Mall redevelopment it is anticipated that there will be a small increase
in distribution during the next financial year. This forecast has not been
reviewed or reported on by Fountainhead Property Trust`s auditor.
13. INCOME DISTRIBUTION ANNOUNCEMENT
Notice is hereby given of distribution No. 57 of 27.56 cents per unit for the
six months ended 30 September 2011.
The last date to trade cum distribution will be Friday, 18 November 2011. The
units of Fountainhead Property Trust will commence trading ex-distribution on
Monday, 21 November 2011 and the record date will be Friday, 25 November 2011.
The distribution will be paid on Monday, 28 November 2011.
Unit certificates may not be dematerialised or rematerialised between Monday, 21
November 2011 and Friday, 25 November 2011, both dates inclusive.
BY ORDER OF THE BOARD
Fountainhead Property Trust Management Limited
Johannesburg
2 November 2011
Directors:
WM Kirchmann (Chairman), AE Raubenheimer (Managing and financial),
VA Christian, HY Laher, DS Ogbu, JD Rainier, DS Savage, S Shaw-Taylor
Transfer secretaries:
Computershare Investor Services Proprietary Limited
70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Secretary and registered office:
Broll Property Group Proprietary Limited
Broll House, 27 Fricker Road, Illovo
Johannesburg, 2196
(PO Box 1455, Saxonwold, 2132)
Short name: FPT
Share code: FPT ISIN: ZAE000097416
Sponsor: The Standard Bank of South Africa Limited
E-mail: fountainhead@standardbank.co.za
Website: www.fountainheadproperty.co.za
Date: 03/11/2011 07:06:48 Produced by the JSE SENS Department.
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