| Mon 30 Sep 2002, 17:47 | | Rand Leases Properties Limited - Reviewed Financia |
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RAND LEASES PROPERTIES LIMITED - REVIEWED FINANCIAL RESULTS FOR THE YEAR ENDED
30 JUNE 2002
RAND LEASES PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1978/000870/06)
Share Code: RPR ISIN Code: ZAE 000028254
("the Company")
Reviewed Financial Results for the year ended 30 June 2002
Consolidated income statement
Reviewed Audited
Year to
R000`s 30-Jun-02 30 Jun
2001
Revenue 133,533 83,563
Net rental revenue 39,943 11,303
Income from development and other operations 10,919 13,986
Unrealised (loss)/surplus on revaluation of (5,541) 3,724
investment properties
Gross Profit 45,321 29,013
Operating Expenses 8,506 7,452
Income from operations 36,815 21,561
Interest paid (33,480) (11,941)
Interest received 131 1,314
Income before distribution to unitholders 3,466 10,934
Debenture interest 6,603 10,556
(Loss)/Profit before tax (3,137) 378
Taxation 2,067 (756)
(Loss)/Profit after tax (5,204) 1,134
Weighted average linked units in issue - 63,494 38,034
000`s
Net earnings per linked unit (cents) 2.20 30.74
Net headline earnings per linked unit 10.93 21.12
(cents)
Fully diluted earnings per linked unit 1.88 30.74
(cents) (see note)
Fully diluted headline earnings per linked 9.32 21.12
unit (cents) (see note)
Net distribution per linked unit (cents) 11.00 22.50
Fully Diluted Earnings
The reason for the difference in the diluted and non-diluted
earnings is the fact that an
additional 10 945 440 units were issued on 15 September 2002as
final payment for the
property portfolio that was purchased during the year
Consolidated Balance Sheet
Reviewed Audited
As at
R000`s 30-Jun-02 30 Jun
2001
ASSETS
Non-current assets
Fixed assets 2,534 1,094
Investment Property 361,633 163,588
Marketable securities 48 75
Development Property 71,733 64,946
Deferred taxation 3,810 670
RLP Employee Trust 10,024 -
Current assets
Trade and other receivables 22,799 24,702
Cash and bank balances 2,133 1,548
Total assets 474,714 256,623
EQUITY AND LIABILITIES
Capital and reserves 106,554 77,830
Non-current liabilities
Long term liabilities - debentures 50,577 26,858
Long term liabilities - bonds 256,434 109,689
Deferred taxation 623 623
Current liabilities
Bank overdraft 12,328 4,290
Trade and other payables 28,248 17,942
Current portion of long term liabilities 17,513 8,680
Taxation payable 2,375 804
Shareholders for dividends and debenture 62 9,907
interest
Total equity and liabilities 474,714 256,623
Reviewed Audited
Consolidated Cash Flow Statement Year to
R000`s 30-Jun-02 30-Jun-01
Cash generated from operations 53,388 15,389
Net finance cost (33,349) (10,627)
Taxation paid (10) (17)
Dividends and debenture interest paid (16,495) (7,577)
Net cash inflow/(outflow) from operating 3,534 (2,832)
activities
Cash flow from investing activities (214,231) (138,628)
Cash flow from financing activities 203,244 108,713
Net decrease in cash and equivalents (7,453) (32,747)
Cash and equivalents at beginning of the (2,742) 30,005
year
Cash and equivalents at end of year (10,195) (2,742)
Statement of changes in equity Year to
30-Jun-02 30-Jun-01
Equity at beginning of year 77,830 76,388
Issue of new shares 33,976 382
Net (loss)/income for the period (5,205) 1,135
Dividends to linked units (47) (75)
Equity at end of year 106,554 77,830
Reconciliation between earnings and headline Year to
earnings
30-Jun-02 30-Jun-01
(Loss)/Profit after tax (5,204) 1,134
Profit on sale of investments 66
Unrealised loss/(surplus )on revaluation of 5,541 (3,724)
investment properties
Debenture interest 6,603 10,556
Headline earnings 6,940 8,032
Headline earnings per linked unit 10.93 21.12
Property Market
The performance of the listed property sector has been negatively impacted by an
over supply of office space, rising interest rates and falling rentals. A
reduction in excess supply is not anticipated in the near future.
Financial Results
The increase in income from operations before unrealized gains or losses on
revaluation of investment properties from R17,8 million to R42,8 million
reflects the inclusion of the investment portfolio acquired on 15 September
2001. However net headline earnings decreased to R6,9 million (2001: are 8,0
million) as a result of the higher costs and lower production on the low cost
housing projects. Inflationary cost increases and unexpected poor soil
conditions reduced profit margins. Delays in approvals on environmental issues
resulted in lower production levels.
Having regard to the present state of the property market the company has
undertaken an extensive evaluation of its investment property portfolio and
considers it prudent to write down the value by R5,5 million at this time.
The combination of lower housing income and the write down of the investment
portfolio has brought about a decline in headline earnings to 10,9 cents per
linked unit.
Investment Portfolio
Rental Income
Net rental income generated by the investment portfolio increased to R39,9
million as a result of the further expansion to the property investment
portfolio which took place from September 2001.
Vacancies and Rentals
Vacancy levels for the portfolio showed a small deterioration from 3,9% in
September 2001 to 4,9% in June 2002. Rentals achieved on leases which were
renewed during the financial year were generally down.
Borrowings
Borrowings at 30 June 2002 amounted to R256,4 million (2002:R109,7 million).
The average interest rate is currently 14,6%. 45% of the total indebtedness has
been fixed for 18 months or more. The debt ratio equates to 67,6% of income
generating property.
Valuation of Properties
The directors have conducted an extensive internal valuation of the property
investment portfolio which they consider to be R361,6 million at year end.
Development Portfolio
Turnover attributable to development and property enterprises on the East and
West Rand amounted to R82,2 million. Development activity during the financial
period under review was largely confined to low and medium cost housing
development as the office sector was considered to be over supplied.
Gross profit on these activities declined from the previous financial year to
R10,9 million. Both turnover and profit margins were reduced due to
unreasonable delays in approvals on environmental issues, unsatisfactory ground
conditions and inflationary pressures on labour and materials.
The Bram Fischerville low cost housing project yielded a further 3 861 houses in
the current reporting year bringing the total houses completed and handed over
to beneficiaries for this project to 11 761.
The sale of a further 22 houses in Boksburg means that this housing portfolio is
now practically sold out.
Accounting Policies
The accounting polices applied comply with the statements of GAAP. The
accounting policies applied are consistent with the 2001 annual report except
for dividends that are expensed in the year they are declared and headline
earnings per linked unit which now exclude any unrealised gain or loss on
revaluation of investment properties. Prior year figures have been restated to
reflect these changes where material.
Auditors Review
The preliminary financial results and accompanying comments have been reviewed
by the Company`s auditors, KPMG Inc. A copy of the auditors` review opinion is
available for inspection at the registered office of the Company.
Renewal of Cautionary Announcement
Linked unitholders are referred to the joint cautionary announcement issued on 2
September 2002 with Redefine Income Fund Limited and are advised to continue
trading with caution in their linked units as negotiations are ongoing. An
announcement will be published as soon as these negotiations are finalised or
terminated.
Prospects
The company is in the process of re-evaluating its exposure to those property
sectors which are under performing with a view to reducing debt levels and
increasing exposure to sectors which will show future growth. The negotiations
which are currently underway form part of this process.
Distribution Declaration
The directors have decided not to declare a final distribution in respect of the
year ended 30 June 2002.
For and on behalf of the Board
R A R Kebble G Fischer
(Chairman) (Managing Director)
Johannesburg
30 September 2002
Registered Office Transfer Secretary
Computershare Investor
Hackelbrook Office Park Services Limited
Cnr Jan Smuts & Conrad Drive 4th Floor, Edura House
Craighall, 2024 41 Fox Street
(PO Box 1, Florida, Roodepoort, Marshalltown, 2107
1710) (PO Box 62053, Marshalltown,
2107)
Directors: RAR Kebble (Chairman); G Fischer (MD); B Ansell (ne); HC Buitendag
(ne); PRA Ferguson (ne); CK Hickling (ne); RB Kebble (ne); PHL Rama (FD)
Date: 30/09/2002 05:15:00 PM Produced by the JSE SENS Department
