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VKE
VKE
VKE - Vukile Property Fund Limited - The condensed financial statements and
interim results for the six months ended 30 September 2011
Vukile Property Fund Limited
(Incorporated in the Republic of South Africa)
Registration number 2002/027194/06
JSE Share code: VKE ISIN: ZAE000056370 NSX Share code: VKN
("Vukile" or "the company")
VUKILE PROPERTY FUND LIMITED
THE CONDENSED FINANCIAL STATEMENTS AND INTERIM RESULTS for the six months ended
30 September 2011
Distribution for the six months up 7.5% to 54.31 cents per linked unit
Increase in net property revenue over comparable period - 8%
Weighted average cost of debt reduces to 9.38%
Acquisition of R1.5 billion property portfolio announced on 14 November 2011
Ranked 29th in recent Sunday Times Top 100 Companies survey
COMMENTS
1 Nature of operations
The group is a long-term investor in commercial properties with strong
contractual cash flows for long-term sustainability and capital appreciation.
2 Basis of preparation
The unaudited condensed interim financial statements ("interim financial
statements") for the six months ended 30 September 2011, and comparative
information, have been prepared in accordance with and containing the
information required by IAS 34 (Interim Financial Reporting), International
Financial Reporting Standards ("IFRS"), AC 500 Standards as issued by the
Accounting Practices Board, the JSE Listings Requirements and relevant sections
of the South African Companies Act. The interim financial statements have been
prepared in accordance with the accounting policies adopted in the last annual
financial statements for the year ended 31 March 2011. The interim financial
statements have been approved for issue by the board of directors on 21 November
2011.
3 Significant events and transactions
During this reporting period, the refinancing of R450 million of bank debt was
successfully concluded in August 2011 - refer to further details in paragraph
4.4.
During the course of the reporting period, Gerhard van Zyl resigned as CEO from
the company and the board of Vukile Property Fund. The board would like to
thank Gerhard for his dedication, care and commitment to Vukile throughout his
term in office. Banus van der Walt resigned as a non-executive director during
this period. The board is highly appreciative of the contribution he has made
as director and co-founder of Vukile and wishes him well in his future
endeavours.
Laurence Rapp was appointed as the new CEO with effect from 1 August 2011.
4 Financial results
The directors of Vukile are pleased to report that the distribution for the six
months ended 30 September 2011 has increased by 7.5% to 54.314 cents per linked
unit, up from 50.525 cents per linked unit. The group`s net rental income,
exclusive of straight-line rental accruals, has increased by 8% over the
comparable period. Net profit before debenture interest has increased by 25%,
from R209 million (September 2010) to R260.9 million for the six months ended 30
September 2011.
Summary of financial performance:
Sept Sept Mar
2011 2010 2011
Net asset value per
linked unit (cents) 1 087 1 074 1 003
Distribution per
linked unit (cents) 54.314 50.525 117.65
Loan to value ratio (%) 28.7 29.5 31.5
A simplified distributable income statement is set out below:
R000 Sept Sept %
2011 Para 2010 var-
iance
Profit from
property operations
excluding
straight-line
adjustment 276 209 4.1 255 164 8
Asset management
business 9 101 4.2 23 840 (62)
Asset management
fees 16 634 4.2.1 17 134 (3)
Sales commission 6 339 4.2.1 16 720 (62)
Expenditure (13 872) 4.2.2 (10 014) (39)
Corporate
administrative
expenses (10 667) 4.3 (12 531) 15
Net finance costs (74 950) 4.4 (72 721) (3)
Tax (6 682) (7 774) 14
Distributable
income 193 011 185 978 4
4.1 PROPERTY PORTFOLIO
Market overview
Retail
Rural areas:
Retail in rural areas has held up well given the state of the economy. The
disposable income of rural communities primarily consists of government grants,
pension payouts and income remittances. The majority of customers fall into the
lower income brackets.
Typical successful shopping centres in rural areas are located in close
proximity to municipal offices, bus depots and taxi ranks. The majority of
customers in rural areas rely on public transport.
Vukile is represented in the following areas:
* Malamulele;
* Giyani;
* Monsterlus (Moratiwa);
* Piet Retief; and
* Kokstad.
Vacancies in Vukile shopping centres in rural areas are low at 0.8% of GLA.
National tenants represent 75% of the GLA of these rural centres and in most
instances there is good demand from retailers to open new brands or to expand.
Urban areas:
Our major shopping centres in lower income areas, namely Dobsonville Soweto,
Daveyton and Phoenix were developed in the early nineties and are well
established in these areas. Vacancy is low at 2.7% of GLA at these centres and
there is good demand from retailers to either expand or to open new brands. The
centres were recently upgraded and/or expanded.
The centres are anchored either by Pick n Pay or Shoprite which reported
excellent trading densities. National tenants represent 68% of the GLA of these
urban centres. Vukile is constantly investigating opportunities to expand the
centres and to improve the tenant mix.
All three centres are characterised by strong customer loyalty driven by
Vukile`s involvement with the local communities. The majority of customers rely
on public transport and taxi ranks are established on site. Most customers fall
into the lower to middle income brackets.
Namibia:
Vukile is represented in Katatura, Oshakati, Ondangwa and Oshikango. The
shopping centres in Namibia are performing extremely well and seldom have any
vacancy. Vacancies are 0.3% of GLA. The centres are anchored by Shoprite,
Spar, Pick n Pay and Game. Both the Oshakati and Oshikango Centres were
recently upgraded and expanded and the opportunity exists to further expand
Oshakati and also Ondangwa Shopping Centre.
The Oshakati Centre is dominating the market and hosts a variety of SA national
retailers.
National tenants comprise 73% of the GLA of the Namibian shopping centres.
Offices
Due to the existing economic climate we have had an increase in vacancies as a
result of tenants reducing their space and consolidating. The office market
remains quiet with limited enquiries for new space. The renewal of leases in
our CBD buildings with government tenants is becoming more difficult. We are
achieving escalations of between 5% to 8% on renewals and new deals in the
decentralised areas. However, the renewals and new deals that are done at the
moment are mostly short-term leases which indicate that the existing market
conditions are still under pressure due to the economic climate.
Industrial
In the last three months we have seen interest for new space in the industrial
market and have been able to let some industrial units, particularly small to
medium sized units. This is promising as the market for these size units is
active and it is mostly short-term as tenants are inclined to renew year on
year. The demand for larger size units is quiet. However, as the economic
climate improves going forward, business will start expanding, and hence demand
for larger size units will increase.
Performance of property portfolio
Net profit from property operations for the six months ended 30 September 2011
amounted to R276.2 million, 8% up on the comparable period. Details of the
performance of the property portfolio during the six month period is set out
below:
* The combined property portfolio currently comprises 74 properties with a
gross lettable area of 930 405mSquared.
* The sectoral spread by gross rentals comprises 56% retail, 29% offices, and
15% industrial.
* During the six month period under review, new leases and renewals with a
total area of 94 847mSquared and a contract value of R252.7 million, were
concluded.
Impairment allowance
Bad debt write-offs have increased in line with expectations for the six month
period due to the difficult trading conditions being experienced. The
impairment allowance for trade receivables at 30 September 2011 is R14.3 million
(R9.9 million at 31 March 2011), which is considered adequate at this stage. A
summary of the movement in the impairment allowance of trade receivables is set
out below:
R000
* Impairment allowance 1 Apr 2011 9 911
* Allowance for receivable impairment for
six months 4 674
* Receivables written off as uncollectable (243)
* Impairment allowance 30 Sept 2011 14 342
Bad debt write-off per the statement of
comprehensive income 660
Vacancies
The vacancy profile graph (% gross rentals) indicates that the overall vacancy
percentage has increased from 5.1% at 31 March 2011 to 6.9% at 30 September
2011.
A significant part of the increased vacancy has arisen at Randburg Square.
Randburg Square is our fourth largest property by value and is well located in
the Randburg CBD.
Following an intensive investigation at this centre it has been decided to
upgrade the mall areas, create a banking mall and a food court and improve the
sight lines and tenant exposure.
The increased vacancy of 4 259mSquared at Randburg Square is therefore due to
the extensive upgrade at the centre which has required a tenant re-mix and
relocation of tenants. Given the strong tenant demand, once the revamp is
completed, it is anticipated that there will be little vacancy at Randburg
Square, thereby reducing the retail vacancy to 3.9% and the overall vacancy to
approximately 5.9% as compared to 6.9% based on a percentage of gross rentals.
Although vacancies have increased during the six months from April to September
2011 mainly in the office and industrial sectors, these increases were not
generally attributable to the portfolio as a whole, but were at selected
properties only, i.e. large tenants vacating at Germiston Meadowdale (3
155mSquared), Parow Industrial Park (4 423mSquared) and Sandton St Andrews (1
124mSquared). At Jhb Eva Park the vacancy has increased by a further 1
372mSquared. We are in discussions with property brokers and architects to
improve the marketability of this property as well as generating specific action
plans for the properties referred to above. Although we have done a number of
lettings at Midrand Allandale, there were also a number of tenants that vacated
during the period, resulting in the overall vacancy at the property increasing
by 520mSquared. We have, however, seen an increase in enquiries for industrial
space and remain confident that the vacancy at Allandale should improve as the
economy recovers.
The retail sector has performed well in comparison to the industrial and office
sectors. This is reflected in the lower increase in rental vacancies compared
to the other sectors.
We have introduced attractive leasing incentives at selected properties in order
to reduce the overall vacancy on the portfolio.
The renewal escalations on expiry rentals were positive, as follows:
* Retail up 4.7%
* Offices up 6.5%
* Industrial up 7.7%
This compares very favourably with SAPOA`s Operating Cost Report 2011 H1 which
indicated that base rentals have only grown by 0.3% compared to 2010 H1.
The contracted rental escalation profile graph reflects a positive average
escalation across all sectors of 8.2%.
Property expenditure
Recurring property costs have increased by 21% over the comparable period,
largely driven by the 25% increase in electricity costs. This increase reduces
to approximately 13% if electricity costs are excluded from the current and
comparable costs. The increase in bad debts makes up 3.6% of the adjusted 13%
increase, resulting in an increase of 9.4% (excluding electricity costs and the
increase in bad debts) in respect of all other property expenses.
4.2 ASSET MANAGEMENT BUSINESS
4.2.1 Net asset management fees are R500 000 lower than the comparable period
following the sale by Sanlam of the R541 million portfolio to Vukile in
September 2010. Sales commission of R6.3 million is lower than the R16.7
million earned in the comparable period. However, given the current sales
pipeline, it is anticipated that a greater proportion of sales commission will
be generated over the next six months, whereas in the previous period the bulk
of sales commission was earned in the first six months. The asset management
fees earned in respect of the Vukile portfolio have been excluded from gross
revenue.
4.2.2 Asset management expenditure is R3.86 million higher than the comparable
period primarily due to a short-term bonus of R1.9 million arising in respect of
the results achieved for the year ended 31 March 2011 and payable in this
reporting period.
4.3 CORPORATE ADMINISTRATIVE EXPENSES
Corporate administrative expenses are R1.9 million lower than the comparable
period. A short-term provision of R1.9 million was reversed and reclassified to
the asset management business as set out in paragraph 4.2.2 above and hence has
had no impact on a group basis.
4.4 FINANCE COSTS
The company raised bank debt of R450 million in August 2011 to refinance an
expiring bank facility. A R400 million three year loan was concluded at a fixed
all-in rate of 8.66% per annum, inclusive of margin and costs. A variable rate
three year loan of approximately R50 million also forms part of the facility.
Taking the benefits of the lower debt costs into account, the overall cost of
funding of the Vukile group has reduced from 9.77% at 31 March 2011 to 9.38%.
The group`s variable interest rate risk on long-term debt is hedged using
interest rate swap agreements for periods expiring between one and three years.
Due to the fact that 100% of the group`s interest rate risk on long-term debt is
hedged or fixed, changes in interest rates will have no impact on the group`s
cost of debt for the current financial year.
The group has a facility of R114 million available which can be utilised without
credit approval due to the equity available in the non-securitised portfolio.
The group has initiated discussions with various banks to address the group`s
refinancing requirements in 2012.
5 Acquisition and disposals
As announced on SENS previously, Giyani Plaza was acquired in July 2011 at a
cost of R68.4 million (including transaction costs). The projected net property
revenue in respect of this acquisition of R5 million for the eight month period
is in line with the acquisition forecast.
The Kleinfontein offices and the Namibian subsidiary which owned Oshakati Beares
Shopping Centre were sold during the reporting period for a total of R7.5
million, which approximated fair value at 31 March 2011.
The movement in investment properties during the reporting period is summarised
below:
Capitalised Investment
leaseR000 properties commission Total
Balance
1 Apr 2011 5 351 693 13 722 5 365 415
Change in fair
value of investment
properties 417 601 - 417 601
Expansion and
development costs 12 413 - 12 413
Tenant installation
Costs 26 854 - 26 854
Portfolio acquisition
including transaction
costs 68 428 - 68 428
Sale of investment
Properties (7 356) - (7 356)
Reduction of
capitalised lease
commissions - (452) (452)
Balance
30 Sept 2011 5 869 633 13 270 5 882 903
R000
Allocated as follows:
Non-current assets 5 527 697
Non-current assets held for sale 355 206
Total 5 882 903
The following properties have been approved by the board for disposal as these
properties are no longer considered core to the portfolio:
Property (mSquared) GLA
Johannesburg CBD Truworths 6 919
Glencairn Building, Eloff Street 13 378
Goodwood (AAD) 3 024
Katima Mulilo Pep Stores 2 472
Rundu Ellerines 1 283
Pretoria VWL 16 933
Pretoria Midtown 8 086
Botbyl Subaru Hatfield 4 603*
Nelspruit Prorom 6 181
Johannesburg John Griffin 9 774
Lichtenburg Shopping Centre 8 407
Total 81 060
* This property was sold on 4 November 2011 for R13.75 million.
6 Valuations
The directors have valued the group`s property portfolio at R5.87 billion as at
30 September 2011. Inclusive of the acquisition of Giyani Plaza for R68.4
million, this represents an increase in the directors` valuation of R417.6
million as compared to the valuation at 31 March 2011. The directors have
valued the property portfolio utilising the discounted cash flow methodology.
In terms of the company`s accounting policies, approximately 50% of all
properties are valued every six months on a rotational basis by qualified
independent external valuers. The external valuation by Old Mutual Investment
Group South Africa (Pty) Ltd and Broll Valuation and Advisory Services of
approximately 51% of the total portfolio is R85 million (2.9%) lower than the
directors` valuation of the same properties at 30 September 2011.
This difference is attributable to a marginal difference in views with regards
to future capitalisation rates and discount rates.
7 Developments and expansion projects
Details of current and completed developments and expansion projects are set out
in the table below.
Grosvenor Malamulele: Bellville:
Corner Mala Plaza Louis Leipoldt
Upgrade extension Hospital
upgrade
Approved
capital R7.50m R16.75m R33.50m
Extensions - R16.75m -
Upgrade R7.50m - -
Maintenance - - R33.50m
Additional
GLA (m2) 0 1 222 0
Increase
in GLA (%) 0.0 24.8 0.0
Year 1 yield (%) 0.0 9.3 0.0
Start
date 1 Jun 2011 1 Sept 2010 1 Nov 2010
Completion
Date 30 Nov 2011 31 Mar 2011 30 Apr 2013
Progress The steel The building Work is on
and aluminium work has been schedule.
cladding to the completed. This capex
building are The last comprises
the only elements vacant shop replacement/
still outstanding. has been let refurbishment
to King Pie. of lifts, air
conditioners,
etc.
Hillfox Randburg Oshakati:
Centre: Square: Standard
Cashbuild, Maintenance Bank
Fruit & Veg and upgrade: redevelopment
extensions Phase 1
Approved
capital R13.00m R80.83m R22.86m
Extensions R13.00m - R22.86m
Upgrade - R64.02m -
Maintenance - R16.81m -
Additional
GLA (m2) 1 300 0 2 312
Increase
in GLA (%) 3.6 0.0 10.0
Year 1 yield (%) 10.0 1.9 10.7
Start date 1 Mar 2011 1 Jul 2011 1 Oct 2011
Completion date 5 Sept 30 Apr 31 Jul
2011 2012 2012
Progress Building work The building The demolition
has been work is of the
completed. Progressing existing
well and building has
the upgrade to been
both levels of completed.
the escalator Changes
area at requested by
entrance 1 will the local
be completed by authority to
end November the re-
2011. alignment
of the
road
may cause
the
completion
date
to be
delayed.
8 Operating segment report
The revenues and profit generated by the group`s operating segments and segment
assets are summarised in the table below.
During the six month period to 30 September 2011, there have been no changes
from prior periods in the measurement methods used to determine operating
segments and reportable segment profits.
9 Events after the reporting date
The SENS announcement on 14 November 2011 set out details of the agreement to
purchase 20 properties from Sanlam Life Insurance Limited at a purchase price of
R1.5 billion. A circular setting out the full details of this acquisition will
be distributed to unitholders in due course.
10 Strategy
We have reviewed our longer-term strategy and are committed to growing the fund
more aggressively than has previously been the case. We remain committed to
being a diversified fund but staying overweight in the retail sector. To that
end we are exploring acquisitions of retail centres as well as joint venture
development opportunities in the retail environment that would complement our
existing portfolio make-up. We continue to believe in the strength and growth
of retail in the emerging market and based on the performance of our current
retail assets will primarily focus our expansion in this market segment. We
will however remain open to acquiring assets serving higher income groups should
the right opportunities present themselves.
The acquisition of the portfolio from Sanlam is the first step in our growth
strategy and will add some R1.5 billion to the value of our portfolio. Whilst
we will acquire some retail assets in the portfolio, most notably Durban
Workshop, the office assets being acquired will enhance the overall quality of
our office portfolio.
Vukile has consistently delivered solid growth in distributions and this has
laid the foundation for the next phase of our growth which will be more
acquisitive and proactive in nature whilst not detracting focus or attention
from delivering growth in distributions for our unitholders.
11 Prospects
While trading conditions are expected to remain soft in the office and
industrial sectors and given a stable retail environment we remain positive
about the prospects for the group for the remainder of the financial year and
expect positive growth in the full year distributions. This information has not
been audited or reviewed by Vukile`s auditors.
12 Payment of debenture interest and dividend
Notice is hereby given of a distribution amounting to 54.314 cents per linked
unit, for the six month period to 30 September 2011. The distribution comprises
interest on debentures of 54.203 cents per linked unit and a dividend of 0.111
cents per linked unit.
Last day to trade
cum distribution Thursday, 8 December 2011
Linked units trade
ex distribution Friday, 9 December 2011
Record date for unitholders
to participate in the
distribution Thursday, 15 December 2011
Payment of distribution Monday, 19 December 2011
Linked unit certificates may not be dematerialised or re-materialised between
Friday, 9 December 2011 and Thursday, 15 December 2011, both days inclusive.
On behalf of the board
AD Botha LG Rapp
Chairman Chief Executive
Officer
Roodepoort
21 November 2011
Unaudited consolidated statement of comprehensive income
Unaudited Unaudited Audited 30
Sept 30 Sept 31 Mar 2011 2010
2011
R000 R000 R000
Property revenue 442 667 394 870 836 124
Straight-line rental
income accrual 61 174 15 262 14 368
Gross property
revenue 503 841 410 132 850 492
Property expenses (166 458) (139 706) (293 603)
Profit from property
Operations 337 383 270 426 556 889
Profit from the asset
management business 9 101 23 840 44 913
Corporate administrative
expenses (10 667) (12 531) (25 509)
Investment and other
Income 7 771 5 701 14 380
Operating profit before
finance costs 343 588 287 436 590 673
Finance costs (82 721) (78 422) (161 803)
Profit before debenture
Interest 260 867 209 014 428 870
Debenture interest (190 263) (168 825) (403 948)
Profit before capital
Items 70 604 40 189 24 922
Capital items
Impairment of intangible
Asset - - (49 935)
Loss on sale of investment
Properties - (14 753) (14 798)
Goodwill written off
on sale of properties
by subsidiary (762) - (5 192)
Amortisation of
debenture premium 1 839 1 832 2 519
Profit/(loss) before
fair value adjustments 71 681 27 268 (42 484)
Fair value
adjustments 356 427 349 374 78 494
Gross change in fair
value of investment
properties 417 601 364 636 92 862
Straight-line rental
income adjustment (61 174) (15 262) (14 368)
Profit for the period
before taxation 428 108 376 642 36 010
Taxation (110 105) (105 303) (25 488)
Profit for the period
after taxation 318 003 271 339 10 522
Other comprehensive
(losses)/income
Cash flow hedging (15 029) (7 848) 6 062
Available-for-sale
financial assets (6 122) (820) (3 556)
Other comprehensive
(losses)/income for
the period, net of
tax (21 151) (8 668) 2 506
Total comprehensive
income for the
period 296 852 262 671 13 028
Earnings per linked
unit
Basic earnings per
linked unit (cents) 144.80 131.99 120.85
Diluted earnings per
linked unit (cents) 144.80 131.99 120.85
Total number of linked
units in issue (000) 351 015 351 015 351 015
Weighted average
number of linked
units in issue (000) 351 015 333 478 342 949
Reconciliation: headline earnings and distributable earnings
Unaudited Unaudited Audited 30
Sept 30 Sept 31 Mar 2011 2010
2011 R000 R000 R000
Attributable profit
for the period after
taxation 318 003 271 339 10 522
Adjusted for:
Debenture interest 190 263 168 825 403 948
Earnings per linked
Unit 508 266 440 164 414 470
Net change in fair
value of investment
properties (356 427) (349 374) (78 494)
Total tax effects of
Adjustments 86 073 93 216 23 126
Goodwill written off
on sale of properties
by subsidiary 762 - 5 192
Loss on sale of
investment properties - 14 753 14 798
Impairment of intangible
Asset - - 49 935
Amortisation of debenture
Premium (1 839) (1 832) (2 519)
Headline earnings of
linked units 236 835 196 927 426 508
Straight-line rental
accrual net of
deferred taxation (43 824) (10 949) (18 407)
Available for
Distribution 193 011 185 978 408 101
Distribution to
unitholders
Interest 190 263 168 825 319 231
Dividend 388 344 651
Total distribution 190 651* 169 169 319 882
Headline earnings per
linked unit (cents) 67.47 59.05 124.36
Available for
distribution per
linked unit (cents) 54.99 55.77 119.00
* Made up as follows:
Shares Partici-
in issue Dividends Debenture pation
interest period
351 015 218 388 293 190 263 429 183 days
Unaudited condensed consolidated statement of financial position
Unaudited Unaudited Audited 30 Sept 30 Sept
31 Mar
2011 2010 2011
R000 R000 R000
ASSETS
Non-current
assets 5 937 406 6 225 147 5 487 419
Investment
properties 5 412 925 5 662 078 4 984 840
Investment
properties 5 527 697 5 763 405 5 083 993
Straight-line rental
income adjustment (114 772) (101 327) (99 153)
Other non-current
assets 524 481 563 069 502 579
Intangible asset 312 832 362 767 312 832
Straight-line rental
income asset 114 772 101 327 99 153
Development expenditure - 166 2 723
Furniture, fittings
And computer equipment 1 658 1 603 1 774
Financial asset at
amortised cost 4 782 5 450 4 782
Available-for-sale
financial asset 20 092 15 457 10 208
Goodwill 70 345 76 299 71 107
Current assets 252 628 202 264 409 218
Trade and other
receivables 64 377 52 930 71 409
Cash and cash
Equivalents 188 251 149 334 337 809
Investment properties
held for sale 355 206 30 441 281 422
Total assets 6 545 240 6 457 852 6 178 059
EQUITY AND LIABILITIES
Equity attributable to
owners of the
parent 1 701 326 1 653 186 1 404 550
Non-current
liabilities 4 480 083 4 025 123 3 909 613
Linked debentures
and premium 2 115 076 2 117 603 2 116 916
Other interest
bearing borrowings 1 676 990 1 238 494 1 226 282
Derivative financial
Instruments 36 929 36 051 21 867
Deferred tax
Liabilities 651 088 632 975 544 548
Current liabilities 363 831 779 543 863 896
Trade and other
payables 172 709 143 504 173 277
Short-term borrowings - 461 360 449 600
Current taxation
Liabilities 471 5 510 5 416
Linked unitholders
for distribution 190 651 169 169 235 603
Total equity and
Liabilities 6 545 240 6 457 852 6 178 059
Unaudited condensed consolidated statement of cash flows
Unaudited Unaudited Audited 30 Sept 30 Sept
31 Mar 2011 2010 2011
R000 R000 R000
Cash flow from operating
activities 278 998 270 664 570 910
Cash flow from investing
activities (111 340) (536 532) (371 782)
Cash flow from financing
activities (317 216) 200 877 (75 644)
Net (decrease)/
increase in cash
and cash equivalents (149 558) (64 991) 123 484
Cash and cash
equivalents at
the beginning of the period 337 809 214 325 214 325
Cash and cash
equivalents at
the end of the
period 188 251 149 334 337 809
Unaudited condensed consolidated statement of changes in equity
Revaluation
Share Non- of
capital distri- available-
and share butable for-sale
premium reserves financial
R000 R000 assets
R000
Balance as at
31 March 2010 27 596 1 380 023 (16 274)
Issue of share
Capital 4 667 - -
Dividend
Distribution - - -
32 263 1 380 023 (16 274)
Net profit for
the period - - -
Change in fair
value of investment
properties - 364 636 -
Deferred taxation
on change in fair
value of investment
properties and straight-line
rental accrual - (97 529) -
Share-based
Remuneration - 4 690 -
Transfer from
non-distributable
reserve - (14 753) -
Other comprehensive
losses
Revaluation of
available-for-sale
financial asset - - (820)
Revaluation of
interest rate swaps - - -
Balance as at
30 September 2010 32 263 1 637 067 (17 094)
Dividend
Distribution - - -
32 263 1 637 067 (17 094)
Net loss for
the period - - -
Change in fair
value of investment
properties - (271 774) -
Deferred taxation
on change in fair
value of investment
properties and straight-line
rental accrual - 85 571 -
Share-based
Remuneration - 1 487 -
Transfer from
non-distributable
reserve - (62 301) -
Other comprehensive
income
Revaluation of
available-for-sale
financial asset - - (2 736)
Revaluation of
interest rate
swaps - - -
Balance as at
31 March 2011 32 263 1 390 050 (19 830)
Dividend
Distribution - - -
32 263 1 390 050 (19 830)
Net profit for
the period - - -
Change in fair
value of investment
properties - 417 601 -
Deferred taxation
on change in fair
value of investment
properties and straight-line
rental accrual - (103 423) -
Share-based
Remuneration - 4 528 -
Disposal of
Namibian subsidiary - (4 216) -
Transfer from
non-distributable
reserves - (762) -
Other comprehensive
losses
Revaluation of
available-for-sale
financial asset - - (6 122)
Revaluation of
interest rate
swaps - - -
Balance as at
30 September 2011 32 263 1 703 778 (25 952)
Unaudited condensed consolidated statement of changes in equity (Continued)
Cash flow Retained hedges earnings Total
R000 R000 R000
Balance as at
31 March 2010 (28 290) 18 447 1 381 502
Issue of share
Capital - - 4 667
Dividend
Distribution - (344) (344)
(28 290) 18 103 1 385 825
Net profit for
the period - 271 339 271 339
Change in fair
value of investment
properties - (364 636) -
Deferred taxation
on change in fair
value of investment
properties and straight-line
rental accrual - 97 529 -
Share-based
Remuneration - - 4 690
Transfer from
non-distributable
reserve - 14 753 -
Other comprehensive
losses
Revaluation of
available-for-
sale financial
asset - - (820)
Revaluation of
interest rate
swaps (7 848) - (7 848)
Balance as at
30 September 2010 (36 138) 37 088 1 653 186
Dividend
Distribution - (480) (480)
(36 138) 36 608 1 652 706
Net loss for
the period - (260 817) (260 817)
Change in fair
value of investment
properties - 271 774 -
Deferred taxation
on change in fair
value of investment
properties and straight-line
rental accrual - (85 571) -
Share-based
Remuneration - - 1 487
Transfer from
non-distributable
reserve - 62 301 -
Other comprehensive
income
Revaluation of
available-for-
sale financial asset - - (2 736)
Revaluation of
interest rate swaps 13 910 - 13 910
Balance as at
31 March 2011 (22 228) 24 295 1 404 550
Dividend
Distribution - (388) (388)
(22 228) 23 907 1 404 162
Net profit for
the period - 318 003 318 003
Change in fair
value of investment
properties - (417 601) -
Deferred taxation
on change in fair
value of investment
properties and straight-line
rental accrual - 103 423 -
Share-based
Remuneration - - 4 528
Disposal of
Namibian subsidiary - - (4 216)
Transfer from
non-distributable
reserves - 762 -
Other comprehensive
losses
Revaluation of
available-for-sale
financial asset - - (6 122)
Revaluation of
interest rate
swaps (15 029) - (15 029)
Balance as at
30 September 2011 (37 257) 28 494 1 701 326
Operating segment report
Industrial Offices Retail
SEPTEMBER 2011
Group income for
the six months
ended 30 September
2011
Property revenue 65 161 127 001 250 505
Property expenses (19 818) (47 171) (99 469)
45 343 79 830 151 036
Add: Excluded item
Straight-line
rental income accrual 10 042 17 681 33 451
Profit from
property and
other operations 55 385 97 511 184 487
Group statement of
financial position
at 30 September 2011
Assets
Investment
properties 937 559 1 522 695 3 054 173
Add: Lease commissions - - -
937 559 1 522 695 3 054 173
Add: Goodwill 3 889 5 091 61 365
Intangible asset
Investment properties
held for sale 29 282 210 301 115 623
970 730 1 738 087 3 231 161
Add: Excluded items
Furniture, fittings
and computer equipment
Available-for-sale
financial asset
Financial asset at
amortised cost
Trade and other
receivables
Cash and cash
equivalents
Total assets
Liabilities
Linked debentures
and premium 359 604 584 035 1 171 437
Interest bearing
Borrowings 285 121 463 066 928 803
644 725 1 047 101 2 100 240
Add: Excluded items
Equity attributable to
owners of the parent
Derivative financial
instruments
Deferred taxation
liabilities
Trade and other
payables
Current taxation
liabilities
Linked unitholders
for distribution
Total equity and
liabilities
SEPTEMBER 2010
Group income for the
six months ended
30 September 2010
Property revenue 62 219 116 125 216 526
Property expenses (22 686) (36 247) (80 773)
39 533 79 878 135 753
Add: Excluded item
Straight-line rental
income accrual 2 405 4 488 8 369
Profit from property
and other operations 41 938 84 366 144 122
Group statement of financial position
at 30 September 2010
Assets
Investment
properties 1 046 827 1 728 236 2 975 015
Add: Lease
commissions - - -
1 046 827 1 728 236 2 975 015
Add: Goodwill 5 114 4 978 66 207
Intangible asset
Investment
properties
held for sale 30 441 - -
1 082 382 1 733 214 3 041 222
Add: Excluded
items
Development
expenditure
Furniture,
fittings
and computer
equipment
Available-for-
sale financial
asset
Financial asset
at amortised cost
Trade and other
receivables
Cash and cash
equivalents
Total assets
Liabilities
Linked debentures
and premium 277 113 458 755 798 552
Interest bearing
Borrowings 306 990 508 214 884 650
584 103 966 969 1 683 202
Add: Excluded items
Equity attributable to
owners of the parent
Derivative financial
instruments
Deferred taxation
liabilities
Trade and other
payables
Current taxation
liabilities
Linked unitholders
for distribution
Total equity and
liabilities
Operating segment report (Continued)
Asset
management Total
Total business group
R000 R000 R000
SEPTEMBER 2011
Group income for
the six months
ended 30 September 2011
Property revenue 442 667 22 973 465 640
Property expenses (166 458) (13 872) (180 330)
276 209 9 101 285 310
Add: Excluded item
Straight-line
rental income
accrual 61 174 61 174
Profit from property and
other operations 337 383 9 101 346 484
Group statement of
financial position
at 30 September 2011
Assets
Investment
properties 5 514 427 5 514 427
Add: Lease
commissions 13 270 13 270
5 527 697 5 527 697
Add: Goodwill 70 345 70 345
Intangible asset 312 832 312 832
Investment properties
held for sale 355 206 355 206
5 953 248 312 832 6 266 080
Add: Excluded items
Furniture, fittings
and computer
equipment 1 658
Available-for-sale
financial asset 20 092
Financial asset
at amortised cost 4 782
Trade and other
receivables 64 377
Cash and cash
equivalents 188 251
Total assets 6 545 240
Liabilities
Linked debentures
and premium 2 115 076 2 115 076
Interest bearing
Borrowings 1 676 990 1 676 990
3 792 066 - 3 792 066
Add: Excluded
items
Equity attributable to
owners of the parent 1 701 326
Derivative financial
instruments 36 929
Deferred taxation
liabilities 651 088
Trade and other
payables 172 709
Current taxation
liabilities 471
Linked unitholders
for distribution 190 651
Total equity and
liabilities 6 545 240
SEPTEMBER 2010
Group income for
the six months
ended 30 September
2010
Property revenue 394 870 44 466 439 336
Property expenses (139 706) (20 626) (160 332)
255 164 23 840 279 004
Add: Excluded item
Straight-line rental
income accrual 15 262 15 262
Profit from property
and other operations 270 426 23 840 294 266
Group statement of
financial position at
30 September 2010
Assets
Investment
properties 5 750 078 5 750 078
Add: Lease
commissions 13 327 13 327
5 763 405 5 763 405
Add: Goodwill 76 299 76 299
Intangible asset 362 767 362 767
Investment properties
held for sale 30 441 30 441
5 870 145 362 767 6 232 912
Add: Excluded items
Development
expenditure 166
Furniture, fittings
and computer equipment 1 603
Available-for-sale
financial asset 15 457
Financial asset at
amortised cost 5 450
Trade and other
receivables 52 930
Cash and cash
equivalents 149 334
Total assets 6 457 852
Liabilities
Linked debentures
and premium 1 534 420 583 183 2 117 603
Interest bearing
Borrowings 1 699 854 1 699 854
3 234 274 583 183 3 817 457
Add: Excluded
items
Equity attributable
to owners of the parent 1 653 186
Derivative financial
Instruments 36 051
Deferred taxation
Liabilities 632 975
Trade and other
Payables 143 504
Current taxation
Liabilities 5 510
Linked unitholders
for distribution 169 169
Total equity and
Liabilities 6 457 852
VUKILE PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2002/027194/06)
JSE Share code: VKE
ISIN: ZAE000056370
NSX Share code: VKN
JSE Sponsor: One Capital, Illovo, Sandton
NSX Sponsor: IJG Securities (Pty) Ltd, Windhoek, Namibia
Executive directors: LG Rapp (chief executive), MJ Potts (financial director),
HC Lopion (executive director: asset management)
Non-executive directors: AD Botha (chairman), HSC Bester, PJ Cook, JM Hlongwane,
PS Moyanga, MH Serebro
Registered office: Ground floor Meersig Building, Constantia Boulevard,
Constantia Kloof, 1709.
Company secretary: J Neethling
Transfer secretaries: Link Market Services South Africa (Pty) Ltd, Braamfontein,
Johannesburg
Investor and media relations: Contact Helen McKane at vukile@dpapr.com, tel: 011
728-4701.
www.vukileprops.co.za
Date: 21/11/2011 08:30:02 Produced by the JSE SENS Department.
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