| Thu 3 Oct 2002, 12:52 | | REDEFINE INCOME FUND - AUDITED RESULTS FOR THE YEA |
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REDEFINE INCOME FUND - AUDITED RESULTS FOR THE YEAR ENDED 31 AUGUST 2002
CONSOLIDATED INCOME STATEMENT
Audited Audited
31 Aug 2002 31 Aug 2001
R000 R000
Revenue
Property portfolio 106 695 107 214
Listed security portfolio 142 116 106 945
248 811 214 159
Operating costs - property portfolio 25 678 27 689
Administration costs 11 451 11 890
Operating profit 211 682 174 580
Net capital (loss) gain on non-current assets (79 674) 173 298
Profit from operations 132 008 347 878
Interest received 1 211 1 894
Profit before finance charges 133 219 349 772
Finance charges 109 437 93 650
Profit before taxation 23 782 256 122
Taxation - -
Profit attributable to linked unitholders 23 782 256 122
Headline earnings and distributions
Profit attributable to linked unitholders 23 782 256 122
Net capital loss (gain) on non-current assets 79 674 (173 298)
Headline earnings and total distributions 103 456 82 824
- First quarter distribution 22 530 19 989
- Second quarter distribution 22 771 20 155
- Third quarter distribution 28 430 21 340
- Fourth quarter distribution 29 725 21 340
Earnings and net asset value per linked unit
Actual number of linked units in issue (000) 321 068 237 114
Weighted average number of
linked units in issue (000) 279 096 236 445
Earnings per linked unit (cents) 8,52 108,32
Headline earnings per linked unit (cents) 37,07 35,03
Distribution per linked unit (cents) 37,00 35,00
Net asset value per linked unit (cents) 244,00 280,95
(including unpaid distributions)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Audited Audited
31 Aug 2002 31 Aug 2001
R000 R000
Opening balance 644 824 462 505
Issue of linked units 190 888 9 085
Preliminary and issue expenses written-off (2 372) (64)
Profit attributable to linked unitholders 23 782 256 122
Distributions to linked unitholders (103 456) (82 824)
Closing balance 753 666 644 824
CONSOLIDATED BALANCE SHEET
Audited Audited
31 Aug 2002 31 Aug 2001
R000 R000
Assets
Non-current assets 1 894 390 1 349 994
Property portfolio 807 777 447 907
Listed security portfolio 1 086 613 902 087
Current assets 58 698 48 642
Trade and other receivables 14 652 6 450
Listed security distributions receivable 43 539 6 150
Debtors for property and listed security sales 502 3 682
Cash and cash equivalents 5 32 360
Total assets 1 953 088 1 398 636
Equity and liabilities
Capital and reserves 753 666 644 824
Linked unit capital 658 513 469 997
Non-distributable reserve 95 153 174 827
Non-current liabilities 1 100 201 699 202
Interest-bearing liabilities 1 100 201 681 577
Non-interest bearing liabilities - 17 625
Current liabilities 99 221 54 610
Interest-bearing liabilities 26 240 12 583
Trade and other payables 10 223 20 687
Bank overdraft 33 033 -
Unitholders for distribution 29 725 21 340
Total equity and liabilities 1 953 088 1 398 636
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Audited Audited
31 Aug 2002 31 Aug 2001
R000 R000
Cash effects from operating activities (47 252) 19 105
Cash generated from operations 156 045 192 114
Net financing costs (108 226) (91 756)
Linked unit distributions paid (95 071) (81 253)
Cash effects of investing activities (621 308) 17 939
Net property (acquisitions) disposals (352 570) 136 013
Net listed security acquisitions (268 738) (118 074)
Cash effects from financing activities 603 172 (20 429)
Linked units issued 188 516 9 021
Net borrowings (repayments) 414 656 (29 450)
Net movement in cash and cash equivalents (65 388) 16 615
Opening cash and cash equivalents 32 360 15 745
Closing cash and cash equivalents (33 028) 32 360
BASIS OF PREPARATION
The financial results are determined in accordance with South African Statements
of Generally Accepted Accounting Practice and the accounting policies applied
are consistent with those applied in the previous financial year.
AUDIT OPINION
The Financial Statements have been audited by Fisher Hoffman PKF (Jhb) Inc. and
their unqualified audit opinion is available for inspection at the registered
office of Redefine Income Fund Limited.
Commentary
Review of results
The 2002 financial year was extremely productive during which Redefine`s
earnings and asset growth projections were achieved.
The implementation of our investment strategy facilitated total investment asset
growth of 40 percent, funded by a combination of debt and an increase in linked
unit capital. The asset base grew to R1,894-million, comprising the property
portfolio of R808-million and the listed securities portfolio of R1,086-million.
At 31 August 2002 NAV was R2,44 per linked unit.
Redefine declared a final quarterly distribution of 9,5 cents per linked unit.
Total distributions for the year of 37 cents per linked unit represent a 5,7
percent increase on distributions for the previous year of 35 cents per linked
unit.
This performance testifies to the benefits inherent in the hybrid asset model
adopted by Redefine, facilitating appropriate investment opportunities in either
listed securities or property.
Property portfolio
Twenty-three properties were purchased and two non-core properties disposed of
for a net purchase consideration of R353-million. The portfolio additions were
mainly
A-grade commercial and retail properties strategically located and underpinned
by long leases with quality tenants. The acquisitions increased the percentage
of the property portfolio to total investment assets from 33 percent to 43
percent. The property portfolio was independently valued at R808-million, an
increase in value of
R9-million, underpinned by a sound lease expiry profile with 44 percent of
contractual income secured beyond August 2007.
Redefine`s focus on tenant retention and increased leasing activity during the
financial year ensured a full replacement of lease expiries, with 30 percent of
expiries in financial 2003 already secured or under firm negotiation. Vacancies
by lettable area amount to 6,8 percent of the portfolio.
Listed securities portfolio
In accordance with the capital realignment strategy and encouraged by rising
yields of listed property counters, Redefine increased its holding in six
counters considered to be core and reduced its overall exposure to five other
counters.
The investment in SA Retail Limited acquired from Sanlam Investment Managers
(Proprietary) Limited is strategic in that it provides Redefine with increased
exposure to the retail sector whilst simultaneously broadening Redefine`s
institutional shareholder base.
The negative re-rating of the JSE`s listed property sector, fuelled by
pessimistic foreign business sentiment and increased domestic interest rates
resulted in a reduction in value of Redefine`s listed securities portfolio of
R84-million. This has been accounted through the income statement as a capital
item against previously created non-distributable reserves.
At 31 August 2002 the portfolio comprised 12 counters at a market value of
R1,086-million.
Interest rate management
The impact on distributable income of recent interest rate increases was
minimised. Redefine has entered into a series of interest rate hedges and has
linked its cost of long-term finance to long bond yields thereby achieving an
average annual blended cost of long-term borrowings of 13,8 percent. Redefine is
currently negotiating to extend its interest rate hedging levels and term.
Linked unit capital
Redefine continues to attract a high level of interest in its linked unit
capital, with overall liquidity in trades on the JSE Securities Exchange
sustained at 54 percent of free float. The average monthly volume of linked
units traded is 8,5-million.
During the year 84-million linked units were issued increasing the total in
issue to
321-million linked units. Redefine`s target of total market capitalisation in
excess of R1-billion will further enhance the tradability of its linked unit
capital.
Directorate
David Solomon and Jeffrey Solomon were appointed as directors on 26 August 2002
and are welcomed to the board.
Renewal of cautionary announcement
Linked unitholders are referred to the joint cautionary announcement issued on 2
September 2002 with Rand Leases Properties Limited and are advised to continue
to exercise caution in their dealings in Redefine linked units as negotiations
are at an advanced stage.
Post balance sheet developments
Redefine increased its interest in Arnold Properties Limited by the acquisition
of 29,3-million linked units for a total consideration of R47,1-million.
Prospects
Redefine will continue to seek opportunities in the listed property securities
and property sectors.
The Board anticipates growth in distributions to linked unitholders during the
forthcoming financial year, the extent of which will be dependant on volitility
in interest rates.
Interest distribution
Unitholders are advised that interest distribution No. 10 in respect of the
period
1 June 2002 to 31 August 2002 of 9,5 cents per linked unit has been declared.
* The last date to trade cum interest Friday, 18 October 2002
* Units will trade ex interest Monday, 21 October 2002
* Record date to participate Friday, 25 October 2002
* Payment of interest distribution No. 10 Monday, 28 October 2002
Unitholders may not dematerialise or re-materialise their linked units from
Monday, 21 October 2002 to Friday, 25 October 2002.
Wolf Cesman, Chairman
Peter Penhall, Chief Executive Officer
Johannesburg 2 October, 2002
REDEFINE INCOME FUND LIMITED. 2 ARNOLD ROAD, ROSEBANK, JOHANNESBURG. PO BOX
471917, PARKLANDS, 2121, SOUTH AFRICA. TELEPHONE +27 11 283 0110 EMAIL:
redefine@corpcapital.com
DIRECTORS: W Cesman*. E Ellerine*. J Kron*. P Penhall. M Wainer* D. Solomon*. J.
Solomon*. non executive* Registration No. 1999/018591/06 SHARE CODE RDF
ISIN CODE ZAE000023503
COMPANY SECRETARY: Probity Business Services (Pty) Ltd. PO Box 85392,
Emmarentia, 2129. TELEPHONE +27 11 726 2446
www.redefine.co.za
Date: 03/10/2002 10:00:00 AM Produced by the JSE SENS Department
