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ANP
CONDENSED AUDITED FINANCIAL RESULTS FOR THE 13 MONTHS ENDED 31 MARCH 2012
Annuity Properties Limited
(Incorporated in the Republic of South Africa)
(Registration number 2011/145994/06)
Share code: ANP
ISIN no: ZAE000165643
("Annuity" or "the Company")
CONDENSED AUDITED FINANCIAL RESULTS FOR THE 13 MONTHS ENDED 31 MARCH 2012
Comments
These results relate to the period prior to Annuitys listing and prior
to the acquisition of the majority of its property portfolio on listing.
This announcement is being made solely for the purpose of complying with
the JSE Listings Requirements and the Companies Act and is considered to
be of limited value to unitholders at this stage in assessing the
financial position and results of the Company
1. Introduction
Annuity commenced trading on 15 February 2012 when it raised R51m in
the form of investor loans and R89m in third party mortgage finance,
which enabled the Company to, inter alia, pay the purchase
consideration for its first letting enterprise acquisition amounting
to R136m. The letting enterprise, known as the Woolworths Financial
Services Call Centre (the Woolworths Call Centre), was registered
in Annuitys name on 23 March 2012, resulting in Annuity earning
rental income and incurring property expenses for the nine days from
23 March 2012 to 31 March 2012. Annuity listed on the Real Estate
Real Estate Holdings and Development sector of the Johannesburg Stock
Exchange (JSE) on 4 May 2012 and took transfer of two further
properties, the Sasfin Head Office Building and the Oakfields
Shopping Centre on this date. The results set out below for the
thirteen month period ended 31 March 2012 are therefore not
considered by the Annuity Board of Directors to be an appropriate
reflection of Annuitys current profitability and financial position
given that these results include only one of its properties, being
the Woolworths Call Centre as set out above, for a very limited
period of only nine days. Unitholders are referred to Annuitys Pre
Listing Statement (PLS) dated 25 April 2012, which can be obtained
from the Companys registered office or on its website at
www.annuityproperties.co.za, which provides more appropriate and
relevant financial and other information on the company and its
property portfolio. The PLS also includes, inter alia, pro forma
financial information showing the results and financial position of
Annuity based on the Woolworths Call Centre transferring into
Annuitys name pre-listing and the Sasfin Head Office Building and
Oakfields Shopping Centre transferring into Annuitys name on the
date of listing, which is considered far more relevant for Annuity
linked unitholders.
2. Results
The following table reflects the financial results for the year ended
31 March 2012 compared to the corresponding previous period.
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
For the thirteen months ended 31 March 2012
Audited Audited
Financial
year ended Year ended
31 March 28 February
2012 2011
R R
Revenue
Property portfolio 415 418 -
Contractual rental income 301 631 -
Straight line rental income accrual 113 787 -
Recoveries 76 375 -
Total revenue 491 793 -
Property expenses (90 216) -
Administration and corporate costs (105 642) -
Property acquisition costs (1 571 455) -
Net operating loss (1 275 520) -
Gain on bargain purchase 8 000 000 -
Changes in fair value of property (113 787) -
Net profit before finance charges and 6 610 693 -
taxation
Net finance charges (194 957) -
Finance charges (421 603) -
Interest received 226 646 -
Profit before taxation 6 415 736 -
Taxation (1 021 688) -
Total comprehensive income for the
financial year 5 394 048 -
RECONCILIATION OF EARNINGS, HEADLINE EARNINGS AND ATTRIBUTABLE LOSS
Audited Audited
Financial
year ended Year ended
31 March 28 February
2012 2011
R R
Profit for the financial year
attributable to equity holders 5 394 048 -
Earnings 5 394 048 -
Add back fair value adjustments (6 895 100) -
Gain on bargain purchase (net of
deferred taxation) (6 987 668) -
Fair value adjustment (net of deferred
taxation) 92 568 -
Headline loss attributable to linked
unitholders (1 501 052) -
Straight line rental income accrual
(net of deferred taxation) (81 927) -
Amortisation of debt transaction costs 8 218 -
Once off property acquisition costs 1 571 455 -
Loss attributable to linked (3 306) -
unitholders
Weighted average number of linked
units in issue used for the
calculation of earnings and headline
earnings per linked unit 301 -
Number of linked units in issue used
for the calculation of attributable
loss per linked unit 1 000 -
Basic and diluted earnings per linked
unit (R) 17 920 -
Headline loss and diluted headline
loss per linked unit (R) (4 987) -
Attributable loss per linked unit (R) (3) -
CONDENSED STATEMENT OF FINANCIAL POSITION
At 31 March 2012
Audited Audited
2012 February
2011
R R
Assets
Non-current assets 144 000 000 -
Investment property 143 886 213 -
Straight-line rental adjustment 113 787 -
Current assets 4 309 318 100
Trade and other receivables 4 308 960 -
Cash and cash equivalents 358 100
Total assets 148 309 318 100
Equity and Liabilities 5 394 058 100
Stated capital 10 -
Members interest - 100
Accumulated profit 5 394 048 -
Non-current liabilities 128 263 666 -
Debentures 4 990 -
Secured financial liabilities 76 341 612 -
Other non-current liabilities 50 895 376 -
Deferred taxation 1 021 688 -
Current liabilities 14 651 594 -
Trade and other payables 2 200 041 -
Current portion of secured financial 11 854 681 -
liabilities
Other liabilities 596 872 -
Total equity and liabilities 148 309 318 100
Number of linked units in issue 1 000 n/a
Net asset value per linked unit (R) 5 394 n/a
CONDENSED STATEMENT OF CHANGES IN EQUITY
For the thirteen months ended 31 March 2012
Stated Members Accumulated Total
capital interest profit
R R R R
Balance at 1 March 2011 - 100 - 100
Issue of shares 1 000 (100) - 900
Conversion to linked units (990) - - (990)
Total comprehensive income
for the financial year - - 5 394 048 5 394 048
Balance at 31 March 2012 10 - 5 394 048 5 394 058
CONDENSED STATEMENT OF CASH FLOWS
For the thirteen months ended 31 March 2012
Audited Audited
Financial Financial
year ended year ended
31 March 2012 28 February
2011
R R
Net cash utilised in operating (3 518 396) -
activities
Cash absorbed by operations (3 519 641) -
Interest received 226 646 -
Finance charges (225 401) -
Net cash utilised in investing
activities
Acquisition of businesses (net of cash
acquired) (135 978 584) -
Net cash generated from financing
activities 139 497 238 -
Proceeds from issue of linked units 4 900 -
Proceeds from secured borrowings 88 000 090 -
Proceeds from unsecured borrowings 51 492 248 -
Net movement in cash and cash 258 -
equivalents
Cash and cash equivalents at the
beginning of the financial year 100 100
Cash and cash equivalents at the end
of the financial year 358 100
Segmental report
Commercial Total Admin Total
/ Western property
Cape portfolio
R R R R
Property portfolio 415 418 415 418 - 415 418
Rental income 301 631 301 631 - 301 631
Straight line rental income accrual 113 787 113 787 - 113 787
Recoveries
76 375 76 375 - 76 375
Total revenue
491 793 491 793 - 491 793
Property expenses
(90 216) (90 216) - (90 216)
Administration and corporate costs - - (105 642) (105 642)
Changes in fair value of investment
property
7 886 213 7 886 213 - 7 886 213
Property acquisition costs
(1 571 455) (1 571 455) - (1 571 455)
Net finance charges
(196 203) (196 203) 1 246 (194 957)
Segment profit before taxation
6 520 132 6 520 132 (104 396) 6 415 736
Investment property 143 886 213 143 886 213 - 143 886 213
Straight-line rental adjustment 113 787 113 787 - 113 787
Other assets 353 557 353 557 3 955 761 4 309 318
Total assets 144 353 557 144 353 557 3 955 761 148 309 318
Total liabilities 137 571 455 137 571 455 5 338 815 142 910 270
3. Capital Commitments
As at 31 March 2012 the Company had entered into agreements to
purchase three letting enterprises amounting to R441 972 692, in
aggregate. These agreements were all conditional inter alia upon the
Company achieving a successful listing on the JSE, which occurred on
4 May 2012.
4. Related party transactions
The Company paid a transaction fee of R1 360 000 to Annuity Asset
Managers (Pty) Ltd, which is considered to be a related party to
Annuity, as part of the property acquisition costs of the Woolworths
Call Centre. The Company raised capital amounting to R51m in the form
of irrevocable loans (irrevocable loans) and a further R1m in the
form of short term bridging loans (bridging loans) from related
parties during the financial year to enable the Company to partly
finance the acquisition of the Woolworths Call Centre. The
irrevocable loans were converted into Annuity linked units on 4 April
2012. The bridging loans were repaid subsequent to year-end.
5. Property Portfolio
"A" Tenant "C" Tenant Total
The Woolworths Call Centre - Cape Town
- Offices and Call Centre
Rentable area (m2) 11 000 320 11 320
Weighted average monthly rental per m2 91
Vacancy percentage 0% 0% 0%
Lease expiry profile Lease expiring
on 30 September
Lease
expiring on
2021 28 February
2013
Weighted average rental escalation 7,03%
Annualised property yield 8,80%
Fair value at 31 March 2012 R144 000 000
6. Development and Capital Projects
The Company was not engaged in any developments or capital projects
during the financial year under review.
7. Borrowings
The Companys borrowings at year-end consisted of an R89m secured
loan from Rand Merchant Bank (a division of FirstRand Bank Ltd) and
irrevocable loans from unitholders of R51m. The Rand Merchant Bank
Loan consists of a three year facility of R77m of which R60m bears
interest at a fixed rate of 8,83% and R17m bears interest at a
floating rate of 1 month JIBAR plus 255 bps. The balance of R12m
bears interest at a floating rate of 1 month JIBAR plus 255 bps and
was repaid subsequent to year-end. The irrevocable loans earned
interest up to the date of registration of the Woolworths Call Centre
in Annuitys name. These loans were all converted into linked units
on 4 April 2012 at R4,63 per linked unit.
8. Unitholders
The Company issued 1 000 shares as a result of its conversion from a
close corporation to a public company on 12 December 2011. These
shares were converted to linked units on 7 March 2012.
9. Directorate
Lionel S Levinsohn, Schalk Strydom and Daniel E Rubenstein were
appointed directors at the Companys incorporation on 12 December
2011. Thereafter Derek Greenberg, Phillip J Moleketi, Martin Ettin,
Eugene C Loubser, Anthony M Chait, Devrajh T Soondarjee and Roland
DEB Sassoon (as D Soondarjees alternate director) were appointed as
directors on 12 March 2012. Subsequent to the financial year-end
Panayiotis Theocharides was appointed as an executive director and
Sarah J Williams as a non-executive director on 2 April 2012 and 17
April 2012 respectively. Lionel S Levinsohn resigned as a director on
15 March 2012.
10. Payments of Dividend and Distribution
No dividend has been declared or paid during the financial year under
review. No dividend or interest distribution has been declared for
the period ended 31 March 2012 since there were no available
distributable earnings. The first distribution by the Company will be
for the period ended 30 September 2012, as stated in the Companys
PLS dated 25 April 2012.
11. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The financial statements are prepared in accordance with
International Financial Reporting Standards (IFRS), including the
presentation and disclosure requirements of IAS34, the
interpretations issued respectively by the International Accounting
Standards Board, the International Financial Reporting
Interpretations Committee (IFRIC) of the IASB and the AC500 series
issued by the South African Institute of Chartered Accountants and
the requirements of the Companies Act of South Africa, 2008.
The financial results have been prepared by Mr S Strydom CA(SA), the
Chief Financial Officer of the Company.
PKF (Jhb) Inc, the independent auditor, has audited the financial
statements and expressed an unqualified audit opinion, which is
available for inspection at the companys registered office.
The accounting policies are consistent with those applied in the most
recent audited financial statements, which were published in the
Companys PLS.
By order of the Board
PJ Moleketi P Theocharides
(Chairman) (Joint Chief Executive Officer)
13 July 2012
Directors:
P.J. Moleketi
P. Theocharides
D. Greenberg
S. Strydom
D.E. Rubenstein
M. Ettin
E.C. Loubser
A.M. Chait
D.T. Soondarjee
S.J. Williams
R.D.E.B. Sassoon (alternate director)
Registered Office: Boundary Office Park, 18 Rivonia Road, Illovo,
Sandton.
Tel: 011 215 6442 Fax: 086 718 3622 Email: info@annuityproperties.co.za
Web: www.annuityproperties.co.za
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
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