| Mon 29 Jul 2002, 0:00 | | Shops For Africa - Audited Final Results |
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Audited Final Results
For the period ended 30 April 2002
15.9% annualized yield
58.4% national tenants
93.3% occupied
Income statement
14 months 7 months
ended ended
30 Apr 2002 28 Feb 2001
Note R'000 R'000
Revenue 61 835
Operating expenses (22 267) (6)
Revaluation of investment properties (2 503) -
Operating profit 37 065 (6)
Income from investments 631 -
Finance charges (22 043) -
Debenture interest (18 156) -
Loss before exceptional items and taxation (2 503) (6)
Exceptional items 2 (6 174) -
Loss before taxation (8 677) (6)
Taxation 172 -
Net loss for the period (8 505) (6)
Cents -
Distribution per linked unit 33.19 -
Loss per share 15.55 -
Headline loss per share 11.45 -
Linked units in issue ('000) 54 710 -
Balance sheet
ASSETS
Investment properties 321 435 -
Deferred taxation 263 -
Current assets 13 522 -
Total assets 335 220 -
EQUITY AND LIABILITIES
Share capital 547 -
Accumulated loss (9 271) (6)
Shareholders' deficit (8 724) (6)
Linked debentures 136 227 -
Linked unit-holders' interest 127 503 (6)
Long-term borrowings 183 406 -
Current liabilities 24 311 6
Total equity and liabilities 335 220 -
Cash flow statement
Net cash flows from operating activities 9 321 -
Cash generated from operations 34 515 -
Interest received 631 -
Finance charges paid (20 287) -
Debenture interest paid (5 538) -
Net cash outflows from investing activities (217 164) -
Net cash flows from financing activities 218 240 -
Increase in cash and cash equivalents 10 397 -
Statement of changes in equity
Share Accumulated
Capital loss Total
R'000 R'000 R'000
Balance at 4 august 2000
(date of incorporation) - - -
Shares issued - - -
Net loss for the period - (6) (6)
Balance at 28 February 2001 - (6) (6)
Balance at 1 March 2001 - (6) (6)
Shares issued 547 - 547
Share issue expenses - (760) (760)
Net loss for the period - (8 505) (8 505)
Balance at 30 April 2002 547 (9 271) (8 724)
SHOPS FOR AFRICA LTD
Notes to the financial statements for the period ended 30 April 2002
1. All accounting policies are consistent with those disclosed in the
prospectus and are in accordance with South African Statements of Generally
Accepted Accounting Practice.
2. The following expenses are of a non-recurring nature and are thus disclosed
as exceptional:
R'000
Debenture issue expenses and costs of raising finance 5 583
Listing expenses 591
6 174
3. Reconciliation of basic earnings to headline earnings
Basic loss (8 505)
2 240
Revaluation of investment properties 2 503
Taxation effect (263)
Headline loss (6 265)
Review of results
The Board of Directors is pleased to present the maiden audited financial
results of Shops for Africa Limited. The company achieved the forecast
distribution set out in its June 2001 prospectus, for the ten trading months to
30 April 2002. The company's 33.19c distribution per linked unit marginally
exceeded the prospectus forecast of 33.1c per linked unit. Considering the
generally poor economic conditions affecting the property industry during this
period, the results demonstrate the quality of the underlying portfolio.
The company's net loss exceeded the prospectus forecast due to a change in
accounting treatment with regard to certain of the share issue and finance
raising costs, as set out below:
R'000
Net loss before taxation per financial statements (8 677)
Finance raising costs - mortgage finance 1 560
Finance raising costs - linked units 3 750
Net loss re-stated using the same accounting treatment as (3 367)
the prospectus forecast
Forecast net loss per prospectus (4 602)
The directors deemed it more appropriate to write off all initial capital
raising costs upfront, including mortgage finance raising costs, instead of
amortising these over the related loan periods.
Certain costs were classified as share issue costs in the prospectus and
therefore charged directly to equity. The directors believe the majority of
these expenses are more correctly reflected as finance raising costs due to the
nature of the company's linked units, and have thus been charged to the income
statement.
The investment properties were valued by independent valuers at the period end
resulting in a deficit of R2,503 million. Costs attributable to the acquisition
of the investment properties, totalling R4,014 million, were capitalised to the
investment properties. If these capitalised costs are excluded investment
properties increased in value by R1,511 million.
These results have been audited by the company's auditors, KPMG, and an audit
opinion is available for inspection at the company's registered office (detailed
below) during office hours.
Vacancies improved from 10.3% at October to 7.02% as measured by gross lettable
area, which underlines the stronger performance of the portfolio over the last
six months. As measured by rental, vacancies stand at 6.72%, which compares
favourably to industry averages for retail property.
Acquisitions/Disposals
Subsequent to year-end the company has acquired the Cleary Park Shopping Centre
for R52,6 million. The acquisition will enhance the 2003 earnings as well as
reduce the average loan to value ratio.
In this regard unitholders are referred to the circular to unitholders dated 24
June 2002 and the announcement dated 10 July 2002. Unitholders are advised that
the Competition Commission approved the acquisition by Shops for Africa of the
Cleary Park Shopping Centre and that all the conditions precedent of the
transaction have now been met. Transfer of the property into the name of Shops
for Africa is expected to take place on or about 15 August 2002.
Agreement has been reached to dispose of certain of the smaller underperforming
properties. The impact will be earnings neutral but should enhance the
sustainability of the company's cash flow. All proceeds will be used to reduce
debt. An announcement will be made when the transactions become unconditional.
The company restructured part of its debt after year-end. The Cape of Good Hope
Bank loan of R35 million will be refinanced by BoE Bank Ltd on more favourable
terms. The company will continue to pay interest only on its borrowings.
Prospects
Despite the recent interest rate hikes the directors still expect positive
earnings growth in the next year. In line with the company's strategy, suitable
acquisitions will be targeted, to further diversify the portfolio and increase
the liquidity of the company's linked unit.
Distribution
Notice is hereby given of the final interest distribution of 21,07 cents per
Shops for Africa linked unit for the six months ended 30 April 2002. Shops for
Africa unitholders are advised that the last day to trade in Shops for Africa
units will be Friday, 16 August 2002, in order to be registered as a Shops for
Africa unitholder on Friday, 23 August 2002, being the record date. Shops for
Africa linked units will trade ex-rights to participate in the distribution from
Monday, 19 August 2002. Payment in respect of the distribution will be made on
Monday, 26 August 2002. No dematerialisation or rematerialisation of linked unit
certificates may take place between Monday, 19 August 2002 and Friday, 23 August
2002 (both days inclusive).
By order of the Board
B P Mitchell
Company Secretary
Company Secretary and
Registered office
B P Mitchell CA (SA)
Registration number: 2000/018084/06
Share code: SFA
ISIN Code: ZAE000031241
6th Floor, Protea Place
Protea Road, Claremont 7700
Transfer Secretaries
Computershare Services Limited
(Company Registration number 1958/003546/06)
Second Floor, Edura House
41 Fox Street, Johannesburg 2001
Directors: I L Sturrock (Chairman)
J D Broll, B P Mitchell*, W A Botha*
*Executive
Sponsor
Sasfin Bank Limited
Asset Manager
Catalyst Property Asset Managers
Date: 29/07/2002 05:10:00 PM Produced by the JSE SENS Department
