| Wed 25 Apr 2001, 0:00 | | Grayprop Interim Results For 6 Months Ended 31 Mar |
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Allan Gray Property Trust Limited
Interim results and distribution declaration for the six months ended 31 March
2001
The Directors of Allan Gray Property Trust Management Limited, the management
company for Allan Gray Property Trust ("Grayprop") submit their report on the
unaudited results of Grayprop for the six months ended 31 March 2000.
Income Statement Unaudited Unaudited
6 mnths to 31/3/01 6 mnths to 31/3/00
R'000 R'000
Rental Income 124 642 117 239
Interest received 7 025 9 145
Profit on disposal of investment
property 1 208
Property expenditure -40 014 -39 740
General administration expenditure -4 076 -3 356
Net profit 87 577 84 496
Net change in maintenance reserve 701 -906
Capital profit transferred to NDR -1 208
Income available for distribution 88 278 82 382
Number of units in issue 588 442 336 588 442 336
Earnings per unit (cents) 14.88 14.36
Headline earnings per unit (cents) 14.88 14.15
Interim distribution (cents) 15.00 14.00
Balance Sheet
Assets
Investment Property 1 227 281 1 116 834
Current Assets 140 598 173 853
1 367 879 1 290 687
Unitholders' funds and liabilities
Unitholders' funds 1 261 750 1 189 955
Current Liabilities 106 129 100 732
1 367 879 1 290 687
Statement Of Changes In Unitholders'
Funds
Unitholders' funds at beginning
of period 1 262 451 1 187 841
Net profit 87 577 84 496
Distribution declared -88 278 -82 382
Unitholders' funds at end of period 1 261 750 1 189 955
Cash Flow Statement
Cash generated by operations 80 552 74 143
Working capital changes 1 734 7 442
82 286 81 585
Interest received 7 025 9 145
Distributions paid to investors -87 678 -82 970
1 633 7 760
Additions to fixed property -26 005 -12 124
Proceeds on sale of fixed property 2 308
Cash at beginning of period 145 960 157 170
Cash at end of period 121 588 155 114
Accounting policies
The interim results are prepared in accordance South African Statements of
Generally Accepted Accounting Practice. In view of the recent amendments to
these statements the accounting policies of Grayprop have been amended. The
effect of these changes has been:
* To exclude any provision for maintenance from the calculation of net profit.
As management deem it prudent to provide for long term maintenance, a reserve
of unitholders' funds has been created to provide for such maintenance. The
net profit will be adjusted by the net movement in the reserve to determine
the distributable income for each period. In changing the accounting policy
the comparative figures have been restated. The provision for maintenance of
R12.7 million (2000 - R11.1 million), previously under current liabilities, is
now included in unitholders' funds at the beginning of the period. The net
decrease of R0.7 million (2000 - R0.9 million increase) in the reserve for
maintenance during the period has therefore been added to net profit in the
calculation of distributable income for the period.
* To value investment properties at market value, as opposed to historic cost.
In changing the accounting policy the comparative figures have been restated.
The effect has been to increase the opening balance of unitholders' funds and
the value of investment properties by R238 million (2000 - R167 million). In
future any change in valuation will need to be recognised in the income
statement, but will then be transferred to a NDR and hence have no effect on
distributable income. As properties are only valued at year end there is no
effect on the income statement for the interim periods.
Comments
1. Net distributable income and prospects
Allan Gray Property Trust's net distributable income for the first six months
of the financial year amounts to 15.0 cents per unit. This is in line with the
forecast made in the Annual Report, and 7 percent better than the comparable
period last year. The forecast for the full year of approximately 31.0 cents
per unit should be achieved.
2. Vacancy levels
Vacancy levels by area at 31 March were as follows:
Sector March 2001 Sept 2000
% %
Office Blocks 10.3 6.0
Retail and Offices 3.7 3.0
Industrial 0.7 1.0
Other 0.0 0.0
Total 4.8 4.0
By value the vacancies equate to 5 percent of the total potential rental
income, up from 4 percent at the end of September 2000.
The increased vacancies in the office sector are largely as the result of the
loss of a tenant from Grayston Ridge Office Park in Sandton. A number of
prospects have expressed interest in these premises.
In the retail sector the vacancies remain concentrated at Northmead Mall and
Bruma Boardwalk. Various opportunities are being investigated at both these
centres to overcome historical problems.
3. Changes to the portfolio
Outstanding capital commitments at 31 March 2001 are R19.2 million, leaving a
free capital balance of R17.4 million. The current capital projects are all
running on time and within budget.
Various upgrading opportunities are currently being evaluated for Centurion
Centre, Northmead Mall and the Rosebank Mews.
Agreement has been reached, subject to certain suspensive conditions including
that of approval by the Competitions Commission, for the purchase of the
undivided shares of Randburg Waterfront and Bruma Boardwalk not currently owned
by Grayprop. The purchase for R59.8 million, the price as valued in Grayprop,
will be funded by the issue of 24 609 054 new units at a price of R2.43 per
unit. The transaction is marginally earnings enhancing for Grayprop.
4. STRATE
Grayprop is scheduled to move to the STRATE system during August and September
2001. Dematerialisation will start on 13 August with electronic trading
commencing on 3 September and the first electronic settlement taking place on
10 September. An information pack detailing actions required by unitholders
will be sent to all registered unitholders together with their copy of these
interim results.
Distribution announcement
Notice is hereby given of distribution no. 36 of 15.0 cents per unit for the
six months ended 31 March 2001. The distribution will be payable to
unitholders registered at the close of business on Friday, 11 May 2001. On 25
May distributions will, where applicable, be electronically transferred to
unitholders' bank account. In the absence of suitable mandates in this regard
distribution cheques, dated 25 May 2001, will be posted to unitholders.
By order of the Board
Allan Gray Property Trust Management Limited
(Reg No 1983/003324/06)
25 April 2001
Transfer Secretaries
Mercantile Registrars Limited
11 Diagonal Street
Johannesburg
2001
Secretary and registered office
Domayne Property Managers (Proprietary) Limited
5th Floor, 15 Baker Street,
Rosebank
Johannesburg, 2196
(PO Box 1455 Saxonwold, 2132)
Directors: WJC Mitchell (Chairman), JD Rainier (Managing), KF Clinton, DM
Nurek, WT Fairhead, M Herdman, WM Kirchmann, GGL Leissner , S Shaw-Taylor
e-mail: info@allangay.co.za Website: www.allangray.co.za
GRAYPROP DELIVERS PREDICTABLE EARNINGS
25 April 2001
Today, Allan Gray Property Trust (Grayprop) released its interim results for
the six months ending 31 March 2001, and yet again proved that investment in a
property company can give consistent, predictable returns with solid earnings
growth.
Grayprop declared an interim distribution of 15.0 cents, an increase of 7
percent over last year's interim distribution of 14.0 cents. These earnings are
based on a rental income of R124.6 million (2000: R117.2 million) and a net
profit of R87.5 million (2000: R84.5 million).
Says John Rainier, Allan Gray Property Trust's managing director, "We believe
that our returns are based on a well-diversified portfolio that give unit
holders a greater level of protection against weaknesses in a particular
sector."
Grayprop has 59% of its portfolio in retail, which is balanced by 26% in office
blocks, 8% in industrial and 7% in other property and cash.
Rainier comments, "If an investor chooses a focused property portfolio they may
not be familiar enough with the various trends in property to know when to swap
out to another sector. However, by choosing a diversified property portfolio
this expertise can be left to the company in question.
"International trends have shown that the debate centres around sector specific
versus diversified portfolios. In South Africa, it is easier to receive
predictable long-term returns from a sizable, diversified portfolio as opposed
to one that focuses on a specific sector such as retail or industrial. So after
a long retail boom, the sector is now coming under pressure and having other
sectors in the portfolio lowers the risk of higher vacancies in retail.
"In addition, a diversified portfolio can take advantage of depressed sectors,
such as our industrial one, and go value-hunting".
Capital commitments for Grayprop at the period 31 March 2001 were R19.2 million
leaving a free capital balance of R17.4 million. The current projects are all
running on time and within budget. Various opportunities are being evaluated
for Centurion Centre, Northmead Mall and the Rosebank Mews.
Agreement has been reached, subject to certain suspensive conditions, including
that of approval by the Competition Commission, for the purchase of the
undivided shares of Randburg Waterfront and Bruma Boardwalk not currently owned
by Grayprop. The purchase, at the price as valued in Gayprop, will be funded by
the issue of new units at a price of R2.43 per unit.
During this financial year, Grayprop has concluded leases for over 30 000 m2 of
space with a rental value of nearly R90 million. Grayprop has seen a small
increase in vacancies for this period. However, this is largely due to the loss
of a tenant from Grayston Ridge Office Park and there are a number of prospects
for this particular property. The vacancy level of 4.8% remains well below the
industry average.
Rainier concludes, "We are in line to make our forecast in our 2000 Annual
Report of a 7 percent increase in earnings for our unit holders and the
forecast for the full year of approximately 31.0 cents per unit should be
achieved".
A distribution of 15.0 cents per unit for the six months ended 31 March 2001
will be payable to unit holders registered at the close of business on Friday,
11 May 2001.
Ends
Issued by: Sally Jacques, Citigate, Tel: (021) 683 5300
On behalf of: Allan Gray Property Trust Management Limited,
Tel: (021) 415 2337
Contact: John Rainier
