| Thu 28 Feb 2002, 0:00 | | Marriott Property Fund - Interim Results And Distr |
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Marriott Property Fund
(Registration number 1994/009895/06)
Share code: MRT ISIN number: ZAE000037271
Interim results and distribution
The directors of Marriott Property Fund Managers Limited, management company
of Marriott Property Fund (Martprop) submit their report on the unaudited
results of the Martprop group for the six months ended 31 January 2002.
CONSOLIDATED BALANCE SHEET (R000) 31.01.2002 31.01.2001 31.07.2001
(Unaudited) (Unaudited) (Audited)
Assets
Non-current assets
Fixed property 1 175 975 1 138 272 1 199 700
Current assets
Cash resources and
short-term investments 112 233 123 493 42 213
Trade and other receivables 22 648 21 683 14 700
TOTAL ASSETS 1 310 856 1 283 448 1 256 613
Unitholders' funds and liabilities
Unitholders' funds 1 224 062 1 190 068 1 225 160
Current liabilities
Trade and other payables 14 333 19 443 13 825
Distributions payable 72 461 73 937 17 628
TOTAL UNITHOLDERS' FUNDS 1 310 856 1 283 448 1 256 613
AND LIABILITIES
CONSOLIDATED INCOME Six months to Six months to Year to
STATEMENT (R000) 31.01.2002 31.01.2001 31.07.2001
Note (Unaudited) (Unaudited) (Audited)
Revenue (rental income) 88 131 85 973 173 387
Net property income 69 490 69 672 141 466
Interest received 4 089 6 439 11 596
Fund expenses (2 594) (2 539) (5 064)
70 985 73 572 147 998
Capital profit - property disposals 378 - 1 053
Write-up on revaluation of properties - - 14 457
Net profit 71 363 73 572 163 508
Units in issue (000) 641 016 629 251 641 016
Earnings (cents per unit) 1.1 11,13 11,69 25,93*
Headline earnings
(cents per unit) 1.1 11,07 11,69 23,47*
Distributions
(cents per unit) 1.1 11,30 11,75 23,50
*Based on weighted average units in issue.
OTHER INFORMATION 31.01.2002 31.01.2001 31.07.2001
(Unaudited) (Unaudited) (Audited)
Uncommitted cash (R000) 1 969 49 011 18 717
Expected net proceeds from
sale of properties (R000) 5 785 19 612 39 557
Vacancy factor (based on
lettable area) 8% 5% 7%
Valuation analysis (cents per unit)
Net asset value (prior to distribution
for period under review) 202 201 194
Listed market price 163 184 184
Discount to net asset value 19% 8% 5%
Capitalised interest (R000) 13 215 290
NOTES TO THE FINANCIAL STATEMENTS
1. 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 31 July 2001. Consistent with preparing the
previous interim results the properties have not been revalued at the
interim date and are only revalued at year-end.
1.1 Headline earnings and distribution attributable to unitholders
R000 CPU
Net profit 71 363 11,13
Adjustment for:
Capital profit on disposal of properties (378) (0,06)
Headline earnings 70 985 11,07
Net utilisation from maintenance reserves 1 476 0,23
Distribution attributable to unitholders 72 461 11,30
CONSOLIDATED STATEMENT Six months to Six months to Year to
OF CHANGES IN UNITHOLDERS' 31.01.2002 31.01.2001 31.07.2001
FUNDS (R000) (Unaudited) (Unaudited) (Audited)
Unitholders' funds at
beginning of period 1 225 160 1 190 433 1 190 433
Capital movements 378 (272) 34 657
Write-up on revaluation
of properties - - 14 457
Profit on disposal of properties 378 - 1 053
Other - (272) (96)
378 (272) 15 414
Issue of new units - - 19 243
Maintenance reserves
Net movement (1 476) (93) 70
Revenue movements - - -
Net profit 71 363 73 572 163 508
Transfers (to)/from capital (378) 272 (15 414)
Unclaimed distributions
written back - - 174
Net transfers from/(to)
maintenance reserves 1 476 93 (70)
Available for distribution 72 461 73 937 148 198
Distributions paid (72 461) (73 937) (148 198)
Unitholders' funds at
end of period 1 224 062 1 190 068 1 225 160
ABRIDGED CONSOLIDATED Six months to Six months to Year to
CASH FLOW STATEMENT (R000) 31.01.2002 31.01.2001 31.07.2001
(Unaudited) (Unaudited) (Audited)
Cash inflows from operating
activities
Net profit for the period 71 363 73 572 163 508
Adjustment for:
Interest received (4 089) (6 439) (11 596)
Surplus on revaluation
of properties - - (14 457)
Profit on disposal of properties (378) - (1 053)
Operating profit before working
capital changes 66 896 67 133 136 402
Working capital changes (7 440) 5 496 6 942
Cash generated from operations 59 456 72 629 143 344
Interest received 4 089 6 439 11 596
Distributions paid (17 628) (77 083) (207 560)
Net cash inflow/(outflow) from
operating activities 45 917 1 985 (52 620)
Cash inflow/(outflow) from
investing activities 24 103 (4 640) (50 558)
Cash inflow from financing
activities - - 19 243
Net increase/(decrease) in cash 70 020 (2 655) (83 935)
Cash resources at beginning
of period 42 213 126 148 126 148
Cash resources at end of period 112 233 123 493 42 213
COMMENTS
1. Results
The turbulence in world markets in the past six months has influenced
international investor confidence and impaired global economic growth. South
Africa has not been immune to these events and the domestic economy has
suffered. The anticipated GDP growth has continued to fall and both short
and long-term interest rates have remained volatile. As a result, the demand
for property and rental levels have remained static, while property related
expenses have continued to escalate. Notwithstanding these limiting factors,
the Fund remains resilient and will distribute 11,30 cents per unit to
unitholders for the six months (2001: 11,75 cents per unit).
2. Property portfolio
In pursuit of its stated objective of improving the overall quality of the
Fund's assets and the consequent income flow, management has disposed of
seven properties. These properties, sold for a combined value of R27,2
million, were sold at a net surplus of R378 000 to their book values.
Furthermore, whilst the properties sold had been yielding high returns,
management believes that their future earnings capacity was limited. This
portfolio renewal policy will continue in the interests of long-term growth.
Agreement has been reached for the acquisition of a further six industrial
properties located in Umgeni Business Park and Mahogany Ridge, KwaZulu-
Natal, for a combined value of R63,22 million at an average initial yield of
12,78%. These properties have been constructed within the last two years and
are all underpinned by secure income from leases of between three and ten
years. Two of the properties, to the value of R40,77 million, are let on
ten year fully repairing leases to major industrialists. In making these
acquisitions the Fund will utilise existing capital cash resources, thereby
optimising the utilisation of the Fund's assets.
3. Prospects
The current market conditions are not expected to improve significantly
during the next six months. However, the escalation of rentals in the second
half of the year is expected to give rise to stronger earnings and it is
anticipated that the earnings for the current financial year will be
comparable with those of last year. The disposal of certain unproductive
properties, comprising a vacant site and two vacant buildings, will
contribute positively to earnings as the proceeds are applied to new
property acquisitions. These transactions will have the added benefit of
reducing the vacancies in the portfolio by 11 438m2 to a level of 7%.
4. Borrowings
Management has previously reported on the positive outcome of the ballot,
which was conducted in December 2001, and the Matprop Trust Deed has now
been amended to permit borrowings of up to 30% of the Fund's market
capitalisation. While existing cash resources will be utilised first in
making acquisitions, management is alert to the opportunities to enhance
both the growth of the portfolio and its earnings which can be exploited
through gearing.
5. Change of name
As indicated in the 2001 annual report, the directors of Marriott Property
Fund Managers Limited, the management company of the Fund, have approved
that the Fund's name be changed to Martprop Property Fund in order to
improve the Fund's identity in the market place.
The effective date of the name change is Friday, 22 March 2002. The share
code for the units on the JSE will change to "MTP" and the proposed JET
abbreviation is "Martprop".
The timetable for the change is as follows:
Last day to trade in old units Wednesday, 20 March 2002
Listing and trading of new units
reflecting new name of Fund Friday, 22 March 2002
Record date to receive new
unit certificates Thursday, 28 March 2002
Issue date of new unit certificates Tuesday, 2 April 2002
Unitholders are reminded that the Fund has converted to STRATE and, as such,
trading will occur in electronic format only. Unitholders who have not
dematerialised yet are reminded that they will not be able to dematerialise
or rematerialise their units in the old name after Wednesday, 13 March 2002
and are accordingly requested to submit their unit certificates through a
broker or CSDP in order to receive new unit statements.
A surrender form will be sent for completion to unitholders who have not
dematerialised their units in terms of STRATE and who elect to receive
certificate units. Unitholders should complete, sign and return the
surrender A surrender form will be sent for completion to unitholders who
have not dematerialised their units in terms of STRATE and who elect to
receive certificate units. Unitholders should complete, sign and return the
surrender form together with their documents of title, to the transfer
secretaries, Mercantile Registrars Limited, 7th Floor, 11 Diagonal Street,
Johannesburg 2001 (PO Box 1053, Johannesburg 2000) as soon as possible in
order to receive new certificated units reflecting the new name of the Fund.
Unitholders who wish to dematerialise their units should submit the
surrender form with their documents of title to their appointed broker or
CSDP.
Unitholders who have already dematerialised their units do not need to
complete the surrender form.
DISTRIBUTION DECLARATION AND IMPORTANT DATES
Notice is hereby given of the declaration of distribution no. 14 in respect
of the income distribution period 1 August 2001 to 31 January 2002. The
distribution amounts to 11,30 cents per unit.
Last date to trade cum distribution Wednesday, 20 March 2002
Units will trade ex-distribution Friday, 22 March 2002
Record date to participate
in the distribution Thursday, 28 March 2002
Payment of distribution no. 14 Tuesday, 2 April 2002
BY ORDER OF THE BOARD
MARRIOTT PROPERTY SERVICES (PTY) LIMITED
SECRETARIES
1 March 2002
Registered office Transfer secretaries
Marriott at Kingsmead Mercantile Registrars Limited
Kingsmead Office Park 7th Floor
Durban 4001 11 Diagonal Street
PO Box 207 Johannesburg 2001
Durban 4000 PO Box 1053
Johannesburg 2000
Sponsor
Exchange Sponsors (Pty) Limited
(Registration number 1999/024433/07)
