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Martprop Property Fund - Financial Results And Distribution
MARTPROP PROPERTY FUND
Share code: MTP
ISIN no. ZAE000037271
FINANCIAL RESULTS AND DISTRIBUTION
The directors of Marriott Property Fund Managers Limited, management company of
Martprop Property Fund (Martprop) submit their report on the reviewed financial
results of the group for the year ended 31 July 2002.
CONSOLIDATED BALANCE SHEET (R000) Reviewed Audited
2002 2001
Assets
Non-current assets
Fixed property 1 173 125 1 199 700
Current assets
Trade and other receivables 19 030 14 700
Cash resources and short term 80 639 42 213
investments
1 272 794 1 256 613
Unitholders` funds and liabilities
Unitholders` funds 1 183 735 1 225 160
Current liabilities
Trade and other payables 10 181 13 825
Deferred Capital Gains Tax 691 -
Distributions declared and payable 78 187 17 628
1 272 794 1 256 613
CONSOLIDATED INCOME STATEMENT (R000) Reviewed Audited
2002 2001
Revenue (rental income) 178 626 173 387
Net property income 142 843 141 466
Interest received 8 471 11 596
Fund expenses
(4 938) (5 064)
Headline earnings 146 376 147 998
Capital (deficit)/surplus on
disposal of properties (1 850) 1 053
Write-(down)/up on revaluation of (35 491) 14 457
fixed properties
Net profit 109 035 163 508
Units in issue 641 016 641 016
Weighted average units in issue 641 016 630 575
Net distributable income (cents per 23,50 23,50
unit)
Net headline earnings (cents per 22,83 23,47
unit)
Net profit (cents per unit) 17,01 25,93
CONSOLIDATED STATEMENT OF CHANGES IN Reviewed Audited
UNITHOLDERS` FUNDS (R000) 2002 2001
Unitholders` funds at beginning of 1 225 160 1 190 433
year
Capital movements 34 657
(38 202)
Write-(down)/up on revaluation of
fixed properties (35 491) 14 457
Capital (deficit)/surplus on
disposal of fixed properties (1 850) 1 053
Losses in fixed property companies
carried forward (961) (96)
Total before issue of new units
(38 302) 15 414
Share issue costs refunded 100 -
Issue of new units on 22 June 2001 - 19 243
Maintenance reserves
Net movement 70
(3 223)
Revenue movements - -
Net profit 109 035 163 508
Transfer from/(to) capital 38 302
(15 414)
Unclaimed distributions 88 174
Net transfer from/(to) maintenance 3 223
reserves (70)
Available for distribution 150 648 148 198
Distributions paid
(150 648) (148 198)
Unitholders` funds at end of year 1 183 735 1 225 160
ABRIDGED CONSOLIDATED CASH FLOW Reviewed Audited
STATEMENT (R000) 2002 2001
Cash inflows from operating
activities
Net profit for the year 109 035 163 508
Adjustments for:
Interest received
(8 471) (11 596)
Write-down/(up) on revaluation of
fixed properties 35 491 (14 457)
Capital deficit/(surplus) on
disposal of fixed properties 1 850 (1 053)
Operating profit before working 137 905 136 402
capital changes
Working capital changes
(8 047) 6 942
Cash generated from operations 129 858 143 344
Interest received 8 471 11 596
Distributions paid
(89 928) (207 560)
Net cash inflow/(outflow) from
operating activities 48 401 (52 620)
Cash outflows from investing
activities (9 975) (50 558)
Net cash inflow from financing
activities
Proceeds from issue of new units - 19 243
Net increase/(decrease) in cash 38 426
(83 935)
Cash at beginning of year 42 213 126 148
Cash at end of year 80 639 42 213
OTHER INFORMATION Reviewed Audited
2002 2001
Capital cash at year end (R 000)
9 292 20 799
Commitments at year end (R 000)
(13 089) (2 082)
Expected net proceeds from sale of
properties at year end (R 000) 20 909 39 557
Uncommitted cash
17 112 58 274
Vacancy factor (based on lettable 7% 7%
area)
Valuation analysis (cents per unit)
Net asset value 185 191
Listed market price 171 184
Discount to net asset value 8% 4%
Capitalised interest (R000) 252 290
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies
The group results have been prepared in accordance with South African Statements
of Generally Accepted Accounting Practice and are consistent with those applied
in the preparation of the audited financial statements for the prior year.
Headline earnings and distribution attributable to unitholders
Reviewed CPU Audited CPU
2002 2002 2001 2001
R`000 CPU R`000 CPU*
Net profit 109 035 17,01 163 508 25,93
Adjustments for:
Capital loss/(profit) on
disposal of properties 1 850 0,29 (1 053) (0,17)
Write-down/(up) on
revaluation of fixed
properties 35 491 5,54 (14 457) (2,29)
Net utilisation of
maintenance reserves 3 223 0,50 (70) (0,01)
Unclaimed distributions 88 0,01 174 0,03
Losses in fixed property
companies 961 0,15 96 0,01
carried forward
Distribution attributable 150 648 23,50 148 198 23,50
to unitholders
*Based on weighted average number of units in issue.
REVIEW BY INDEPENDENT AUDITORS
The Fund`s auditors, Deloitte & Touche and David Strachan & Tayler have reviewed
the preliminary financial results. The unqualified report is available for
inspection from the Fund`s secretaries.
COMMENTS
1. Results
Martprop has succeeded in maintaining distributions for unitholders in a year
that has been characterised by ongoing market weakness due to poor GDP growth,
high real interest rates and the extensive oversupply of space in certain
sectors of the property market. Net distributable income for the year amounts
to 23,50 cents per unit (2001 : 23,50 cents per unit).
A final distribution of 12,20 cents per unit is reported in this announcement.
An interim distribution of 11,30 cents per unit was paid in respect of the first
six months.
2. Property portfolio
The performance of the Fund`s property portfolio has been in line with
management`s expectations. Rental income has improved marginally despite the
reversion to market related levels as leases have been renegotiated. This
growth, in weak market conditions, is encouraging.
Consequent upon a number of property disposals and new leases which have been
concluded, the current favourable vacancy rate of 7% is due to improve further
to 4% by September 2002.
The disposal of underperforming properties and undeveloped land, together with
the acquisition of new, well let properties in prime locations, will secure long
term, predictable income for unitholders.
Sixteen properties were sold during the course of the year for a combined value
of R64,1 million, at a net loss of R1,9 million to their last valuations.
Contracts for the disposal of a further twelve properties have been concluded
for a combined value of R39,3 million. The transfer of these properties is
anticipated by the end of September 2002 and the proceeds will be invested to
advantage in new property acquisitions.
Martprop acquired six properties located in KwaZulu Natal for R63,2 million at
an average yield of 12,9% during the year. The two largest properties are
warehouses let to Astrapak and Universal Print Group on ten year, fully
repairing leases and were acquired for R17,0 million and R25,0 million
respectively.
3. Valuations
In conformity with accounting standards, the portfolio is revalued annually.
It has been revalued at R1,17 billion as at year end which represents a R35,5
million, or 2,9%, diminution in value. This reflects the softer property market
arising from a weak economic environment. The anticipated decline in interest
rates in 2003 will have a positive impact on values.
4. Prospects
The anticipated up-turn in the industrial sector, which has yet to impact on
market rental levels, bodes well for future growth and this should further
entrench Martprop as one of the premier listed property funds.
Management is confident that the Fund will yield modest growth in the year
ahead. Ongoing attention will be given to improving the overall quality of the
portfolio both through the sale of underperforming properties and the
acquisition of properties with growth potential.
DISTRIBUTION DECLARATION
Notice is hereby given of the declaration of distribution no.15, amounting to
12,20 cents per unit in respect of the income distribution period 01 February
2002 to 31 July 2002.
Last date to trade cum distribution Thursday, 19 September 2002
Units will trade ex- distribution Friday, 20 September 2002
Record date to participate in the distribution Friday, 27 September 2002
Payment of the distribution Monday, 30 September 2002
Unit certificates may not be dematerialised or rematerialised between Friday 20
September 2002 and Friday 27 September 2002, both days inclusive.
BY ORDER OF THE BOARD
MARRIOTT PROPERTY SERVICES (PTY)
LIMITED 30 August 2002
SECRETARIES
Registered office Transfer secretaries
Marriott at Kingsmead Computershare Investor
Kingsmead Office Park Services Limited
Durban 4001 7th Floor
PO Box 207 11 Diagonal Street
Durban 4000 Johannesburg 2001
P O Box 1053
Johannesburg 2000
Auditors Auditors Sponsor
Deloitte & Touche David Strachan & Exchange Sponsors (Pty)
2 Pencarrow Tayler Limited
Crescent 19th Floor 39 First Avenue
Pencarrow Park 320 West Street Hyde Park
La Lucia Ridge Durban 2196
Office Estate 4001
La Lucia
4051
Date: 29/08/2002 05:02:00 PM Produced by the JSE SENS Department
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