| Fri 15 Feb 2002, 0:00 | | Richway Retail Properties Limited - Interim Result |
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Announcement
RICHWAY RETAIL PROPERTIES LIMITED
ISIN CODE: ZAE000005906
SHARE CODE: RHW
Interim Results And Distribution Announcement For
The Six Months Ended 31 December 2001 And Further Announcement Regarding The
Winding-Up Of Richwayinterim Results And Distribution Announcement For
The Six Months Ended 31 December 2001 And Further Announcement Regarding The
Winding-Up Of
CONSOLIDATED BALANCE SHEET
Audited Unadited Audited
6 months 6 months Year end
31 Dec 2001 31 Dec 2000 30 June 2001
R'000 R'000 R'000
ASSETS
Non-current assets
Investment in fixed properties 1 142 508 628 475 847 382
Investments - unlisted - 3 373 -
1 142 508 631 848 847 382
Current assets
Trade and other receivables 17 985 6 051 16 174
Bank balances and cash 8 319 42 5 636
26 304 6 093 21 810
TOTAL ASSETS 1 168 812 637 941 869 192
EQUITY AND LIABILITIES
Current liabilities
Non- interest bearing 12 030 12 869 12 339
Interest bearing 3 123 34 672 -
Unitholders for distribution 15 673 16 326 15 019
30 826 63 867 27 358
Long term interest bearing
liabilities 741 102 231 450 489 864
Capital and reserves
Share capital and reserves 116 264 62 004 71 350
Debentures 280 620 280 620 280 620
Linked unitholders' interest 396 884 342 624 351 970
TOTAL EQUITY AND LIABILITIES 1 168 812 637 941 869 192
CONSOLIDATED INCOME STATEMENT
Audited Unadited Audited
6 months 6 months Year end
31 Dec 2001 31 Dec 2000 30 June 2001
R'000 R'000 R'000
Revenue 69 931 36 257 95 850
Net rental from properties 47 997 26 673 57 887
Investment income 1 156 701 1 534
Net profit before finance costs 49 153 27 374 59 421
Finance costs (35 105) (10 930) (27 931)
Net profit before debenture
interest 14 048 16 444 31 490
Debenture interest (15 595) (16 244) (31 189)
Net (loss)/profit
before exceptional items (1 547) 200 301
Exceptional items 46 550 - 9 394
Net profit before taxation 45 003 200 9 695
Taxation (10) (46) (120)
Net profit 44 993 154 9 575
Distribution per linked
unit (cents)
Interest 23.88 24.88 47.76
Dividends 0.12 0.12 0.24
Total 24.00 25.00 48.00
Headline earnings per
linked unit (cents) 21.50 25.41 48.04
Earnings per linked
units (cents) 92.78 25.11 62.42
CONSOLIDATED CASH FLOW STATEMENT
Audited Unadited Audited
6 months 6 months Year end
31 Dec 2001 31 Dec 2000 30 June 2001
R'000 R'000 R'000
Operating Activities
Cash received from customers 67 127 33 635 83 104
Cash paid to suppliers and
employees (25 319) (8 514) (41 321)
Cash generated by
operating activities 41 808 25 121 41 783
Investment income 1 156 701 1 534
Finance costs paid (50 050) (29 288) (62 533)
Dividends paid (75) (91) (173)
Taxation paid (7) (113) (134)
(7 168) (3 670) (19 523)
Investing Activities
Acquisition of property (299 739) (212 795) (495 407)
Proceeds from disposal
of property 55 230 - 80 360
(244 509) (212 795) (415 047)
Financing Activities
Increase in interest
bearing liabilities 254 360 214 901 441 695
Net increase/(decrease) in cash 2 683 (1 564) 7 125
Cash at beginning of the period 5 636 (1 489) (1 489)
Cash at end of the period 8 319 (3 053) 5 636
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Non
Share Distributable Distributable
Capital Reserves Reserves Total
R'000 R'000 R'000 R'000
Balance at 30 June 2000 653 354 60 924 61 931
Profit attributable to
ordinary shareholders - 9 575 - 9 575
Transfer to
non-distributable reserve - (9 394) 9 394 -
Dividend declared - (156) - (156)
Balance at 30 June 2001 653 379 70 318 71 350
Net income for the period - 154 - 154
Dividends declared - (78) - (78)
Net surplus on
revaluations - 44 838 - 44 838
Transfer to
non-distributable reserve - (44 838) 44 838 -
Balance at 31
December 2001 653 455 115 156 116 264
OTHER FINANCIAL INFORMATION
Linked units in issue 65 302 114
Net asset value per
linked unit - (cents) (30 June 2001 : 539) 608
Listed market price (cents) 585
Discount to net asset value 3.78%
Interest capitalised to the cost of
properties under construction (R'000) 1 361
Guarantees in lieu of Municipal
deposits (R'000) 1 000
NOTES TO THE FINANCIAL STATEMENTS
This interim report has been prepared using accounting policies which are in
accordance with statements of Generally Accepted Accounting Practice and are
consistent with those applied in preparation of the audited financial
statements for the year ended 30 June 2001.
1. Distribution and headline earnings attributable to linked unitholders
R'000 Cents per unit
Net profit attributable to linked unitholders
per income statement 44 993
Add : debenture interest 15 595
Net profit attributable to linked unitholders
after exceptional items 60 588 92.78
Adjustment for exceptional items : (46 550) (71.28)
Revaluation in respect of investment
properties (46 589)
Net capital deficit on disposal of assets 39
Headline earnings attributable
to linked unitholders 14 038 21.50
Net capital surplus realised 1 712 2.62
Undistributed income (77) (0.12)
Earnings distributed to linked unitholders 15 673 24.00
2. Subsequent events
Linked unitholders are referred to the various announcements published in
the press during the course of last year and the circular dated 21 November
2001, which dealt with the disposal of the majority of the Richway business
to Primegro Properties Limited ("the Primegro transaction" or "the
disposal") and the subsequent voluntary winding-up of Richway as a members'
voluntary winding-up in terms of Section 349 and 350 of the Companies Act
("the winding-up") ("the disposal circular").
The Primegro transaction and winding-up were approved by linked unitholders
in a general meeting on 13 December 2001 and the disposal became effective
on 1 January 2002. The directors are now concentrating their efforts on the
winding-up of Richway.
3. Share incentive scheme
As stated in the disposal circular, in terms of the Richway Share Incentive
Scheme, options in respect of 1 500 000 linked units which were previously
allocated to the executive directors of Richway were exercised and are to be
issued. It was noted that the Richway board of directors had resolved that
these options would mature early on approval of the disposal and the winding-
up.
In terms of the approval granted by linked unitholders at a general meeting
held on 18 May 2001, 9 795 317 linked units were allocated to the share
incentive scheme. Only the above 1 500 000 linked units have been issued to
the share scheme leaving a balance of 8 295 317 unallocated units. Pursuant
to the issue of the 1 500 000 linked units, Richway will have a total of 66
802 114 linked units in issue.
The audit opinion will be available for inspection at the registered office
of Richway.
RESULTS COMMENTARY
The directors are pleased to report that the property portfolio in the group
continued to trade well over the past six months and note their most
significant achievement in the almost 40% growth in the net asset value of
Richway over the past year, the benefit of their aggressive acquisition of
prime retail centres, an achievement which has been realised in the sale of
the portfolio to Primegro. The board firmly believes that Primegro has
acquired an excellent portfolio and is confident that the Richway portfolio
will add significant value to the existing Primegro portfolio.
Declaration of dividend and interest payment number 15
As advised, the winding-up of Richway has no effect on the distribution of
the earnings of the group for the six months to 31 December 2001. Notice is
hereby given that dividend No. 15 of 0,12 cents (0,12 cents: 2000) per
ordinary share and interest of 23,88 cents (24,88 cents: 2000) per
debenture, totalling 24,00 cents per linked unit (25,00 cents: 2000) have
been declared payable to linked unitholders, registered in the books of the
company at the close of business on Friday, 1 March 2002. The detailed
timetable for this distribution is set out below.
MEMBERS' VOLUNTARY WINDING-UP OF RICHWAY
Linked unitholders are referred to the disposal circular and the
announcement dated 20 November 2001 relating to the proposed voluntary
winding-up of Richway ("the winding-up announcement"). While the winding-up
of Richway is proceeding in a satisfactory fashion, unexpected delays were
experienced in the finalisation of certain aspects of the Primegro
transaction and in the realisation of the remaining assets on the Richway
balance sheet.
Distributions in anticipation of liquidation
Rather than delay the proposed distribution in anticipation of the winding-
up of Richway, the directors will continue with the proposed timetable
included in the disposal circular and winding-up announcement. The only
adjustment to the original published distribution will be as follows:
- The distribution in anticipation of liquidation will be made in two
tranches;
- A first distribution in anticipation of liquidation which will consist of
a cash distribution of 275 cents per linked unit and the distribution in
specie of Richway's entire holding of 23 731 343 Primegro deferred linked
units in the ratio of 35.524838 Primegro deferred linked units for every 100
Richway linked units held on the record date ("the first distribution").
This distribution will be made to linked unitholders registered as such at
the close of business on Friday, 1 March 2002
("the record date"); and
- A second distribution in anticipation of liquidation which will consist of
a minimum of 87 cents per linked unit and which will be distributed as soon
as possible after the cash has been collected. This distribution is also
payable to Richway linked unitholders registered as such on the record date.
The total Rand value equivalent of the distribution to be made in
anticipation of the liquidation of Richway is still estimated to be not less
than 600 cents per linked unit.
The estimated face value of the first and second distributions to be made to
Richway linked unitholders is as follows:
Note Cents per linked unit
First cash distribution 275
Distribution in specie 35.524838
Primegro deferred
linked units
per 100 Richway
linked units held
on the record date 1 238
Face value of first
Distribution 513
Second estimated
minimum cash
distribution 2 87
Total estimated
minimum distribution 600
Notes:
1. Assuming a market value of R6,70 per Primegro linked unit being the price
at which these units were issued to Richway.
2. The amount of the second cash distribution, and thus total estimated
distribution in anticipation of liquidation, is estimated and based upon
assumptions made as regards, inter alia, the finalisation of certain aspects
of the Primegro transaction, interest rates, the disposal of the remaining
assets and liabilities on the Richway balance sheet after the disposal, and
the costs associated with the winding-up process.
The distribution in specie will be effected by sending linked unitholders a
certificate setting out the number of deferred Primegro linked units to
which they are entitled.
The Primegro deferred linked units
The directors wish to clarify the status of the 23 731 343 Primegro deferred
linked units which have been issued to Richway in part settlement of the
purchase price payable by Primegro and which are to be distributed to linked
unitholders as part of the first distribution.
- They are not listed on the JSE Securities Exchange South Africa ("JSE")
and can thus not be traded on the JSE.
- The Primegro deferred linked unit certificates are to be held in trust by
the attorneys of Primegro until they are converted.
- They will be converted into Primegro linked units on a 1 for 1 basis and
will be listed on the JSE by no later than 31 July 2002 and linked
unitholders will receive notification from Primegro in this regard.
Odd-lot linked unitholders
Linked unitholders who hold fewer than 100 linked units or whose holdings
are not a whole multiple of 100 linked units will receive Primegro deferred
linked units in terms of the Primegro distribution in accordance with the
table of entitlement set out in Appendix 12 to the disposal circular.
Fractions will be aggregated and sold on the JSE by the liquidator, the
proceeds of which will form part of the final liquidation dividend.
Taxation Effects
The company has obtained professional advice and is confident that the
disposal will not result in any material Capital Gains Tax liability in the
company.
The first distribution to qualifying shareholders is exempt from secondary
tax on companies ("STC") on the basis that it is a distribution of profits
of a capital nature in anticipation of the liquidation of the company.
However, in the hands of Richway linked unitholders this is a dividend and
thus exempt from income tax. Linked unitholders are advised to consult their
tax advisers as regards the tax implications to them.
IMPORTANT DATES
The timetable (as disclosed in the disposal circular and the winding-up
announcement) for both the dividend and interest payment number 15 and the
first distribution in anticipation of liquidation (Othe distributionsO) is
as follows:
2002
Last date to trade cum the distributions Friday, 22 February
Listing of Richway's linked units
suspended on the
JSE from the commencement of business on Monday, 25 February
Record date to participate in the
distributions Friday,1 March
Payment in respect of dividend and
interest payment
number 15 and the first cash
distribution in anticipation of
the liquidation of Richway Monday, 4 March
Entitlement certificates to the
distribution in specie
posted to linked unitholders Monday, 4 March
FURTHER ANNOUNCEMENTS
The directors wish to assure linked unitholders that they are concentrating
their time and efforts in extracting maximum value for all Richway's linked
unitholders and will continue to communicate with linked unitholders as
regards the winding-up process.
A further announcement will be published in the press in due course to
provide linked unitholders with further details relating to the second
distribution and the progress of the finalisation of the winding-up of
Richway.
15 FEBRUARY 2002
Registered Office:
Marriott at Kingsmead, Kingsmead Office Park, Durban, 4001
P O Box 207, Durban, 4000. Tel: (031) 366 1111
Transfer Secretaries:
Ultra Registrars (Pty) Ltd, 11 Diagonal Street Johannesburg, 2001
P O Box 4844, Johannesburg, 2000. Tel: (011) 370 5775
