| Thu 13 Dec 2001, 0:00 | | Paramount Property: The Consolidated Audited Resul |
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PARAMOUNT PROPERTY FUND LIMITED
(formerly Ovbel Holdings Limited)
(Incorporated in the Republic of South Africa)
(Reg. No.1945/019928/06)
Share code: PRA ISIN: ZAE000028577
The consolidated audited results of the group for the year ended 31 October
2001 are as follows:
Audited
Audited 7 Months to
October 2001 October 2000
Notes R'000 R'000
CONSOLIDATED INCOME STATEMENT
Revenue 42 694 669
Trading income 32 380 179
Less - depreciation (265) -
Interest received 127 90
Less - interest paid on borrowings (24 261) (180)
Less - abnormal items - (5 501)
Income before taxation 7 981 (5 412)
Taxation (300) -
Income before distribution 7 681 (5 412)
Distribution to unitholders (7 263) -
Retained income 418 (5 412)
Linked units in issue ('000) 1 12 105 2 958
Earnings per unit (cents) 1 63.5 (183.0)
Headline earnings per unit (cents) 1 63.5 3.0
Distribution per unit (cents) 60.0 -
Annualised distribution
per unit (cents) 2 80.0 -
ABRIDGED CONSOLIDATED BALANCE SHEET
Total ordinary shareholders' funds 1 195 11 320
A debenture holders 54 469 -
B debenture holders 3 97 610 -
Other long-term liabilities 218 289 -
Unitholders for distribution 7 263 -
Current liabilities 6 612 2 329
Capital employed 385 438 13 649
Fixed assets 381 148 10 661
Current assets 4 290 2 988
Total employment of capital 385 438 13 649
One ordinary share and one A debenture are defined as one linked unit
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
Net profit/(loss) for the period 7 981 (5 412)
Adjustments for:
Interest received (127) (90)
Interest paid 24 261 180
Depreciation 265 -
Write down on revaluation 150 5 298
Operating profit/(loss) before
working capital changes 32 530 (24)
Working capital changes 4 884 1 319
Cash generated from operations 37 414 1 295
Interest received 127 90
Interest paid (24 261) (180)
Net cash inflow
from operating activities 13 280 1 205
Net cash inflows/(outflows)
from financing activities 216 759 (500)
Net cash inflow
from capital raising activities 141 536 -
Cash outflows from investing activities (370 752) (73)
823 632
Cash and cash equivalents
at the beginning of the period (223) (855)
Cash and cash equivalents
at the end of the period 600 (223)
CAPITAL EXPENDITURE
There are capital commitments for the purchase of properties totalling R104
million. The acquisition of these properties will be financed by way of bank
loans which have already been approved and the issue to the vendors of new
linked units and B debentures.
STATEMENT OF CHANGES IN EQUITY
Non-
distrib- Distrib- Linked
Share Share utable utable A unit
capital premium reserves reserves Subtotal Debentures total
Balance at
1/4/2000 296 13 599 45 2 792 16 732 16 732
Operating loss (5 412) (5 412) (5 412)
Balance at
31/10/2000 296 13 599 45 (2 620) 11 320 11 320
Share premium
converted to
debentures (13 309) (13 309) 13 309 -
Increase in
share capital 914 914 914
Net increase in
share premium 1 852 1 852 1 852
Issue of
A debentures - 41 160 41 160
Surplus to
31/10/2001 418 418 418
Balance at
31/10/2001 1 210 2 142 45 (2 202) 1 195 54 469 55 664
Notes:
1) The comparative figures have been restated to reflect the 1 for 10
capitalisation of ordinary shares which occurred on 2 March 2001.
2) The property portfolio was acquired with effect from 1 February 2001. The
results for this period accordingly represent only nine months of trading
and the distribution is accordingly based on a nine- month trading period.
The annualised distribution represents the anticipated distribution had the
properties been owned for a full year.
3) The B debentures are convertible into linked units in 5 equal tranches,
commencing January 2002. The new linked units will participate in all income
from 1 November 2001 and each year thereafter.
4) The comparative figures are for the seven-month period ended October 2000
as the company changed its year end from March to October during that
financial year.
COMMENTS
In the nine months since listing Paramount Property Fund ("Paraprop") has
performed well, and we are pleased to be able to announce a maiden
distribution of 60 cents in line with our forecast.
This result was achieved due to the high quality of the property
portfolio, and proactive management. In the nine months to date, leases have
been concluded or renewed on over 50 000m2 of space, and the vacancy on the
portfolio has been reduced from 5.2% to 3%.
In addition, the portfolio has been grown significantly, with R104-m of
new properties currently being transferred into the fund, and a further
tranche to be concluded shortly, as advised in the Cautionary Announcement
of 13 November 2001.
Proactive management of interest rates during the period enabled Paraprop
to re-negotiate rates on its fixed-rate borrowings, which will result in a
saving of R2.3-million per annum in interest charges. Rates have been fixed
on 85% of borrowings for periods between 1 and 5 years in order to reduce
financial risk.
Paraprop has been actively marketed in order to attract investor interest
and increase tradability of the shares. Tradability has been good, with an
annualised figure of 23.7% of market capitalisation trading in the nine
months since listing. This compares favourably with larger funds in the
sector.
A growing investor market segment for Paraprop is retirement funds and
individual pensioners, for whom the high yield is attractive. To better
serve this market the Board has decided to recommend a change in
distribution policy to quarterly, rather than the present half-yearly,
distributions. It is hoped that this will further increase the appeal and
tradability of the units.
Finally, although conditions for 2002 in the property sector look tough,
the Board is confident that Paraprop will be able to deliver an increase on
our current distribution of 8%, as originally anticipated.
Accounting policies
The group results have been prepared on the basis of the accounting policies
which were set out in the Circular to Shareholders dated 8 February 2001
with the exception of the treatment of Investment Properties where the group
has adopted the treatment set out in Statement of Generally Accepted
Accounting Practice number AC135.
Declaration distribution
Notice is hereby given that the board of directors has declared a final
distribution of 60 cents per linked unit in respect of the year ended 31
October 2001. The distribution will be paid on Tuesday, 8 January 2002.
To comply with the procedures of STRATE, the last day to trade in the
linked units for purposes of entitlement to the distribution is Thursday, 27
December 2001. The linked units will commence trading ex-distribution on
Monday, 31 December 2001 and the record date will be Friday, 4 January 2002.
The last day to register for purposes of certificated linked unit holders
will be Friday, 4 January 2002. Certificated linked unit holders may not
dematerialise their linked units between Friday, 21 December 2001 and
Friday, 4 January 2002.
BY ORDER OF THE BOARD
SPIRE PROPERTY SERVICES (PTY) LTD Cape Town
Secretaries 10 December 2001
Registered office Transfer Secretaries
Tannery Park Computershare Services Limited
23 Belmont Road 2nd Floor, Edura House
Rondebosch 7700 41 Fox Street
Johannesburg 2001
PO Box 155 PO Box 61051
Rondebosch 7701 Marshalltown 2107
Directors:
A D Dalling (Chairman)*, R C Squire-Howe (Managing), H N Coertze*,
F J Jenkings, B H Kerswill, A Keller*, A A Maresky*, J R Millar*,
A D P Ovenstone*, G P Phillips*, E G Raubenheimer*, R J Whiteford*
* Non-executive
