| Thu 19 Sep 2002, 13:00 | | Pangbourne - Audited Financial Results For The Yea |
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Pangbourne - Audited financial results for the year ended 30 June 2002
Pangbourne Properties Limited
("Pangbourne")
(Incorporated in the Republic of South Africa)
(Registration number 1987/002352/06)
Share code: PAP ISIN: ZAE 000005252
Audited financial results for the year ended 30 June 2002
Issued share capital
176 114 271 (2001: 81 582 361) ordinary shares of 1 cent each
Issued debentures 1 585 028 439 (2001: 734 241 249) unsecured variable rate
subordinated debentures of 50 cents each
Issued combined units 176 114 271 (2001: 81 582 361)
Weighted average combined units 105 029 358 (2001: 80 395 064)
Abridged consolidated income statement
Year to
R`000 30.06.02 30.06.01
Revenue 166 135 136 530
Operating profit 103 425 81 113
Revaluation of investment properties 22 131 8 528
Revaluation of listed investments (6 909) -
Net goodwill amortised and realised 8 965 11 655
Net loss on disposal of investment
properties and investments (7 621) (1 707)
Investment income 10 625 219
Terminated operations (6 201) -
Profit before interest and taxation 124 415 99 808
Interest received 8 875 5 501
Finance costs (40 132) (28 335)
Profit before taxation and
distributions to unitholders 93 158 76 974
Taxation 959 4 505
Profit for the year 94 117 81 479
Opening accumulated profit 22 321 11 621
Accumulated profit before
distributions 116 438 93 100
Distributions to unitholders (94 007) (70 779)
Closing accumulated profit 22 431 22 321
Diluted and non-diluted
Earnings per unit (cents) 89,61 101,35
Headline earnings per unit (cents) 86,09 80,29
Distributions per unit (cents) 88,00 88,00
Diluted and non-diluted
Earnings per share (cents) 0,10 13,31
Dividends per share (cents) 1,73 1,73
Distributions to unitholders (R`000)
Debenture interest 92 164 69 391
Dividends 1 843 1 388
Total distributions 94 007 70 779
Accounting policies
The accounting policies stated in the 2001 annual report have been consistently
applied and comply with the statements of GAAP.
Abridged consolidated balance sheet
As at
R`000 30.06.02 30.06.01
Assets
non-current assets
Property, plant and equipment 1 261 483 737 502
Net goodwill (67 876) (28 903)
Investments 63 770 3 111
Long-term loans 30 831 30 184
Deferred tax asset 8 685 5 203
current assets
Receivables 60 743 49 857
Current portion of long-term loans 2 410 1 859
1 360 046 798 813
Equity and liabilities
Unitholders` interest 938 514 466 034
Interest-bearing borrowings 272 354 247 206
Current portion of interest-bearing
borrowings 76 005 27 613
current liabilities
Payables 27 370 19 067
Bank overdraft 925 114
Deferred tax liability 2 265 -
Unitholders for distribution 42 613 38 779
1 360 046 798 813
Net debt : income-earning assets 25,3% 34,8%
Net asset value per unit (cents)
excluding negative goodwill 585 607
Abridged consolidated cash flow statement
Year to
R`000 30.06.02 30.06.01
Cash generated from operations 56 209 78 043
Net finance costs (31 257) (22 834)
Investment income 10 625 219
Taxation paid (1 592) (493)
Distributions to unitholders (90 173) (63 462)
Cash flows from operating activities (56 188) (8 527)
Cash flows from investing activities 11 102 (89 247)
Cash flows from financing activities 44 275 95 454
Net decrease in cash and cash equivalents (811) (2 320)
Cash and cash equivalents at beginning
of year (114) 2 206
Cash and cash equivalents at end of year (925) (114)
Movement in unitholders` interest
Year to
R`000 30.06.02 30.06.01
Unitholders` interest at beginning of year 466 034 368 613
Profit for the year 94 117 81 479
Capital transactions and
distributions to unitholders 378 363 15 942
Share capital issued 1 003 147
Treasury share capital issued (58) -
Debentures issued 451 475 65 892
Treasury debentures issued (26 082) -
Share premium on issue 121 397 20 721
Share premium on treasury shares issued (2 840) -
Share issue costs (289) (39)
Acquisition of CBD and Pioneer (72 236) -
Distributions to unitholders (94 007) (70 779)
Unitholders` interest at end of year 938 514 466 034
Reconciliation between earnings and headline earnings
Profit before Net
R`000 taxation Taxation profit
Earnings 93 158 959 94 117
Adjustments:
Revaluation of
investment properties (22 131) 3 320 (18 811)
Net goodwill amortised and realised (8 965) - (8 965)
Net loss on disposal of
investment properties 12 010 - 12 010
Revaluation of listed investments 6 909 (1 037) 5 872
Terminated operations 6 201 - 6 201
Headline earnings 87 182 3 242 90 424
Headline earnings per unit 86,09
Earnings per unit is considered a better ratio than earnings per share, as all
issued shares are linked to debentures.
Results
Headline earnings per unit increased by 7,2% to 86,09 cents. Total distributions
for the year were maintained at 88 cents per unit.
The general environment for property investment was again difficult, with
factors such as the over-development of office, and to a lesser extent retail,
properties, the disappointing growth rate in the economy and rising interest
rates, all impacting negatively. As advised to unitholders in the 2001 annual
report, three 10-year leases expired in the period June to August 2001. The
contribution from the relevant properties was R10,0 million or 9,5 cents per
unit lower in 2002 than in 2001.
The increase in revenue from R137 million to R166 million reflects the
incorporation of the results of the CBD and Pioneer acquisitions with effect
from 1 April 2002. These acquisitions made a small positive contribution to the
results in the final quarter of the financial year.
Occupancies
Occupancies decreased from 93,1% at 30 June 2001 to 82,7%, largely owing to the
inclusion of the CBD and Pioneer properties. The value of the market rentals of
the vacant space at 30 June 2002 was R3,2 million per month or R38,4 million per
annum. The current level of occupancies therefore presents a major opportunity
for the future.
CBD and Pioneer
The CBD and Pioneer acquisitions were successfully completed effective
1 April 2002 and Pangbourne took over the management of the properties from that
date. This represented a near doubling of the number of properties and tenants
under management. Early indications are that these acquisitions will prove to be
very beneficial to Pangbourne.
Asset Management
Apart from the CBD and Pioneer acquisitions, Pangbourne acquired four other high
quality properties during the year, for R42,0 million.
Effective 1 January 2002, a portfolio of nine older properties, including
Horizon View, was sold to ApexHi for R66,7 million, in exchange for units in
ApexHi. Five other properties were disposed of for R11,0 million, resulting in a
loss against book value of R2,8 million. These transactions have all served to
improve the quality of Pangbourne`s portfolio.
As reported at the interim, Pangbourne has acquired a 40% interest in a R112
million destination retail centre, The Crescent at Umhlanga Ridge. The centre,
which adjoins Gateway, is currently 85% let, with Pick `n Pay as the anchor
tenant. This major investment, on which there is a guarantee on the first year`s
rentals, is expected to contribute positively to earnings in future years.
Valuation of Properties
A comprehensive internal valuation of the properties has been concluded. These
were valued at R1 254 million, giving rise to a net surplus of
R22,0 million.
Debt Management
Borrowings at 30 June 2002 amounted to R349 million at an average interest cost
of 12,7%. This interest cost, despite the significant rises in both long and
short-term interest rates in 2002, reflects Pangbourne`s active management of
its debt. At 30 June 2002, 64% of borrowings were on fixed rate contracts. Net
borrowings currently represent 24,2% of income-producing assets, well below the
limit set by the board of 40%.
Paforma
The emphasis in Paforma over the past year has been on bedding down the stricter
credit management disciplines put in place in the previous year, resulting in a
very marked improvement in credit control. There was a loss on terminated
operations of R6,2 million, relating largely to the financing of emerging
building contractors undertaken by Paforma in previous financial years.
Management is confident that Paforma now has a successful business model and
that the business will show growth and an acceptable return on assets invested
during the current year.
Prospects
The CBD and Pioneer acquisitions have positioned Pangbourne well for the future.
The level of vacancies across the portfolio represents significant upside
potential for income and it is expected that active asset management will yield
worthwhile benefits. There will also be considerable economies of scale in the
management of the combined portfolios, which benefits are expected to accrue
from this year onwards.
Distributions
Unitholders are referred to the announcement dated 25 June 2002 which gave
details of the final distribution of 23,5 cents per unit, comprising dividend
number 32 of 0.4608 cents per share and interest on debentures calculated at
23,0392 cents per unit, for the period 1 April 2002 to 30 June 2002. The last
day to trade in order to receive the distribution is Friday, 27 September 2002
and the combined units will commence trading ex distribution on Monday, 30
September 2002, with the record date being Friday, 4 October 2002. Payment of
the distribution will be effected on Monday, 7 October 2002.
Combined unit certificates may not be dematerialised or rematerialised between
Monday, 30 September 2002 and Friday, 4 October 2002, both days inclusive.
P L Campbell Chairman A M A Campbell CEO
Pangbourne Properties Limited
2nd Floor, Pangbourne House, 382 Jan Smuts Avenue, Craighall, Johannesburg
19 September 2002
These results have been audited by Deloitte & Touche and their unqualified audit
report is available for inspection at the company`s registered office
Date: 19/09/2002 12:14:18 PM Produced by the JSE SENS Department
