| Fri 17 Aug 2001, 0:00 | | Apexhi - Audited Results And Distribution Declarat |
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APEXHI PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1999/000238/06
("the company" or "ApexHi")
(APEXHI) (AXI) (ISIN: ZAE 000027496)
AUDITED RESULTS AND DISTRIBUTION DECLARATION
FOR THE FOUR MONTHS ENDED 30 JUNE 2001
The directors submit their report on the results of the company for
the four months ended 30 June 2001 as follows:
INCOME STATEMENT for the period ended 30 June 2001
R'000
Revenue 70 952
Property expenses (16 369)
Administrative expenses (34 297)
Profit from operations 20 286
Finance costs (1 529)
Interest income 864
Goodwill amortisation (490)
Profit before debenture interest 19 131
Debenture interest (19 621)
Loss before exceptional items (490)
Increase in fair value of investment property 12 978
Profit before taxation 12 488
Income tax expense -
Net profit for the period 12 488
Number of linked units in issue 26 171 492
Distribution per linked unit (in cents)
four months trading period 74,97
annualised 233,88
BALANCE SHEET AS AT 30 JUNE 2001
R'000
ASSETS
Non-current assets 301 807
Plant and equipment 2 984
Goodwill 28 923
Investment properties 269 900
Current assets 95 881
Inventories 6 786
Receivables and prepayments 18 690
Cash and cash equivalents 30 097
Amounts owing by managed companies 40 308
TOTAL ASSETS 397 688
EQUITY AND LIABILITIES
Capital and reserves 34 186
Share capital 5
Share premium 21 693
Revaluation reserve 12 978
Accumulated loss (490)
Non-current liabilities 271 543
Debenture capital 235 543
Interest bearing borrowings 36 000
Current liabilities 91 959
Trade and other payables 62 862
Debenture interest payable 19 621
Short-term borrowings 1 347
Provisions 3 294
Amounts owing to managed companies 4 835
TOTAL EQUITY AND LIABILITIES 397 688
statement of changes in unitholders' funds for the period ended
30 June 2001
Share Share Revaluation Accumulated
capital premium reserve loss Total
R'000 R'000 R'000 R'000 R'000
Balance at
5 March 2001 - - - - -
Issue of linked
ordinary shares 5 26 166 26 171
Share issue and
listing costs
charged against
share premium (4 473) (4 473)
Net profit for
the period 12 488 12 488
Transfer to
revaluation
reserve 12 978 (12 978) -
Balance at
30 June 2001 5 21 693 12 978 (490) 34 186
Condensed cash flow statement for the period ended 30 June 2001
R'000
OPERATING ACTIVITIES
Cash generated by operations 27 442
Finance costs (1 529)
Interest income 864
Net cash from operating activities 26 777
INVESTING ACTIVITIES
Purchase of investment properties (256 922)
Purchase of property services businesses (29 413)
Purchase of plant and equipment (3 586)
Net cash utilised in investing activities (289 921)
FINANCING ACTIVITIES
Proceeds on issue of linked shares and debentures 261 714
Long-term borrowings raised 36 000
Listing expenses paid (4 473)
Net cash from financing activities 293 241
Net increase in cash and cash equivalents 30 097
Cash and cash equivalents at the beginning of the period -
Cash and cash equivalents at the end of the period 30 097
COMMENTS
1. Acquisition
Property Portfolio
In March 2001 ApexHi acquired 15 commercial and retail properties, a
parking garage and a hotel. These properties are situated in
Braamfontein and the central business districts ("CBD") of Durban,
Johannesburg and Pretoria. Three properties are leased in terms of
long leases (leasehold properties).
Based on a percentage of gross lettable area, 46% is situated in the
Johannesburg CBD, 19% in the Durban CBD, 20% in Braamfontein and 15%
in the Pretoria CBD. The total lettable area is 244 319 m2.
Details of the property portfolio are contained in the pre-listing
statement issued on 14 December 2000.
There has been no change in the portfolio since its initial
acquisition.
The acquisition consideration of R256922460 was discharged by the
issue of 25171485 ApexHi linked units at R10,00 each and R5207610 in
cash.
Property Services Businesses
In addition to the acquisition of the property portfolio, ApexHi
acquired the property management business, the building engineering
service business and the property broking and leasing business from
Ampros (Pty) Ltd for R31500000. It also acquired land held for
development purposes for R4000000. The consideration of R35500000 was
settled in cash, funded partly by the issue of 1 000 000 linked units
at R10,00 each and borrowings raised specifically for this purpose.
2. Net distributable income
The net distributable income for the trading period 5 March 2001 to 30
June 2001 amounted to 74,97 cents per unit. This equates to an
annualised return of 23,39% per linked unit. The distribution is in
line with management expectations.
3. Changes to the portfolio
3.1 Conversion of linked units and acquisitions
Conversion of linked units
The articles of association, the pre-listing statement and debenture
trust deed made provision for the conversion of existing ApexHi linked
units into "A" and "B" linked units by way of a resolution of the
board of directors. The directors have resolved to convert the
existing ApexHi linked units into "A" and "B" linked units.
Each existing R10,00 linked unit will be converted to:
- a R6 unsecured variable rate "A" subordinated debenture with a
nominal value of 540 cents which will be linked to an "A" ordinary
share with a par value of 0,01 of a cent and an attributable premium
of 59,99 cents per linked unit; and
- a R4 unsecured variable rate subordinated "B" debenture with a
nominal value of 360 cents which will be linked to a "B" ordinary
share with a par value of 0,01 of a cent and an attributable premium
of 39,99 cents per linked unit.
The rights attaching to the "A" and "B" linked units with regard to
income distributions will be as follows:
- the "A" linked unit holder will receive 18,89% on the nominal value
of the "A" debenture (102 cents, equivalent to 17% on a R6 linked
unit) or 45% of the distributable income, whichever is the greater;
and
- the "B" linked unit holder will receive the balance of the
distributable income.
Income distributions on the "A" and "B" linked units will be paid
quarterly.
Acquisitions
On 24 July 2001 the company announced that, subject to approval by
unit holders, it proposes acquiring 91 properties from various vendors
for a total consideration of R837741162. The purchase consideration
will be settled by the issue of 52239954 "A" linked units of R6,00
each and 52239954 "B" linked units of R4,00 each and R315341623 in
cash. The effective date of the acquisition is 1 July 2001.
Details of the acquisition can be found in the circular dated 3 August
2001 which has been posted to unit holders.
As stated in the circular, the pro forma financial effects of the
acquisition on the historical earnings and headline earnings per
ApexHi linked units are provided in the table below:
After the
Before the principal
acquisition acquisitions % change(3)
Earnings per linked unit
(cents per linked unit):(1)
"A" linked unit 57,86 37,27 (35,59)
"B" linked unit 64,83 34,40 (46,94)
Headline earnings
(cents per linked
unit):(1), (2)
"A" linked unit 34,00 34,00 -
"B" linked unit 40,97 31,13 (24,02)
Notes:
(1) The historical earnings and headline earnings per ApexHi linked
unit as set out in the "Before the acquisition" column of the table is
based on the ApexHi income statement for the four months ended 30 June
2001.
The historical earnings and headline earnings per ApexHi linked unit
as set out in the "After the principal acquisitions" column of the
table includes the historical income of the Streicher, Compass,
Redefine and ABSAportfolios ("The principal acquisitions") for the
respective prorated 4 month period and is based on the assumption
that the principal acquisitions were concluded with effect from 5
March 2001 and the aggregate purchase prices were settled by the issue
of the requisite "A" and "B" linked units and the requisite cash
amounts on that date.
(2) Headline earnings exclude revaluations of the portfolio and the
amortisation of goodwill.
(3) As the "After the principal acquisitions" column does not take
into account the majority of the properties being acquired, unit
holders are advised to refer to point 4 "Prospects" below for a more
meaningful understanding of the effects of the acquisition.
3.2 Disposal
During July, agreement was reached for the disposal of the Parktonian
Hotel for R8000000 which equates to the carrying value at balance
sheet date. Of the proceeds, R3500000 will be used to reduce debt and
the balance will be retained by the company as working capital.
4. Prospects
The properties being acquired will supplement the quality of the
existing ApexHi portfolio. This, together with effective cash
management and gearing, are expected to enhance the income yield.
The directors are confident that the slow but steady increase in
demand for accommodation in the major central business districts
around the country, the opportunities to acquire additional properties
of similar quality at attractive yields and the establishment of the
innovative "A" and "B" linked units will increase the attractiveness,
and hence investor awareness of ApexHi.
Forecast distributions for the year ending 30 June 2002 are as
follows:
Distribution per "A" linked unit (in cents) 102,00
Distribution per "B" linked unit (in cents) 103,40
Projected yield on "A" linked unit (percentage) 17
Projected yield on "B" linked unit (percentage) 26
The aggregate of the expected distributions on the "A" and "B" linked
units reflects an overall return of approximately 21% on the original
issue price of R10 per unit.
DISTRIBUTION ANNOUNCEMENT
As published in the press on 10 August 2001, unit holders were advised
that interest distribution No. 1 in respect of the period 5 March 2001
to 30 June 2001 of 74,97 cents per linked unit has been declared.
The last date to trade cum interest will be Friday, 17 August 2001,
and the linked unit will commence trading ex interest from the
commencement of business on Monday, 20 August 2001, with the record
date being Friday, 24 August 2001. Payment will be made to linked unit
holders on or about Friday, 31 August 2001.
By order of the Board
G G L Leissner
Chief Executive
Johannesburg
17 August 2001
SECRETARIES
Domayne
Property Solutions
REGISTERED OFFICE
5th Floor
15 Baker Street
Rosebank 2196
PO Box 1455, Saxonwold 2132
TRANSFER SECRETARIES
Computershare Services Limited
1st Floor, Edura
41 Fox Street
Johannesburg 2001
PO Box 61051, Marshalltown 2107
DIRECTORS: M Wainer (Chairman), G G L Leissner* (Chief Executive
Officer), B H Azizollahoff (British)* (Joint Managing Director),
K F Clinton* (Joint Managing Director), M Berman, W F E Bragg
(British), W Cesman, G R Pardoe, H M Thompson * Executive
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