| Thu 6 Feb 2003, 18:09 | | CAPITAL PROPERTY FUND - AUDITED ANNUAL FINANCIAL S |
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CAPITAL PROPERTY FUND
Share code CPL
ISIN ZAE000001731
("Capital")
Audited annual Financial Statements and final Income Distribution Declaration
The directors of Property Fund Managers Limited, management company of
Capital, announce that the audited consolidated results of the Trust for the
financial year ended 31 December 2002 are as follows:
2002 2001
R`000 R`000
CONSOLIDATED INCOME STATEMENTS
Net property income 51 983 55 690
Interest 3 200 3 149
55 183 58 839
Trust expenditure 13 712 13 564
Headline earnings 41 471 45 275
Net write-down on revaluation
of investment property (46 073) (3 456)
Net (deficit)/surplus on disposal
of investment property (945) 1 118
Deferred capital gains tax (1 728) -
Net (loss)/income for the year (7 275) 42 937
Transfer from revaluation reserve/ trust capital 48 746 2 338
Transfer from maintenance reserve 360 1 337
Income available for distribution 41 831 46 612
Reconciliation of headline earnings to
income available for distribution
Headline earnings 41 471 45 275
Transfer from maintenance reserve 360 1 337
Income available for distribution 41 831 46 612
Units in issue 146 838 565 146 838 565
Headline earnings (cents per unit) 28,24 30.83
(Loss)/earnings (cents per unit) (4,95) 29,24
Income distribution (cents per unit) 28,49 31,74
Net asset value (cents per unit) 225 259
CONSOLIDATED BALANCE SHEETS
Assets
Non-current assets
Investment property 313 528 370 122
Current assets 44 285 36 891
Total assets 357 813 407 013
Unitholders` interest and liabilities
Unitholders` interest 330 974 380 080
Non-current liabilities - Deferred tax 1 728 -
Current liabilities 25 111 26 933
Total unitholders` interest and liabilities 357 813 407 013
CONSOLIDATED STATEMENT OF CHANGES
IN UNITHOLDERS` INTEREST
Capital of Trust 311 924 312 869
Balance at beginning of the year 312 869 311 751
Net (deficit)/surplus on disposal of property (945) 1 118
Revaluation reserve 11 539 59 340
Balance at beginning of the year 59 340 62 796
Adjustment to current independent
valuation of investment property (47 801) (3 456)
Maintenance reserve 7 511 7 871
Balance at beginning of the year as restated 7 871 9 208
As previously reported - -
Change in accounting policy (refer below) 7 871 9 208
Transfer to distributable reserve (360) (1 337)
Undistributed income - -
Balance at beginning of the year - -
Income for the year available for distribution 41 831 46 612
Income distributions (41 831) (46 612)
Total unitholders` interest 330 974 380 080
ABRIDGED CONSOLIDATED CASH FLOW STATEMENTS
Net cash (outflow)/inflow from operating activities (3 620) 292
Net cash inflow/(outflow) from investing activities 9 576 (7 573)
Net increase/(decrease) in cash resources 5 956 (7 281)
Cash resources at the beginning of the year 29 021 36 302
Cash resources at the end of the year 34 977 29 021
INCOME DISTRIBUTIONS
Income available for distribution (cents per unit) 28,49 31,74
Distribution (cents per unit) 28,49 31,74
Interim 14,01 16,32
Final 14,48 15,42
The final distributions being number 39 for Capital Property Fund, have been
declared in respect of the income distribution period 1 July 2002 to 31 December
2002.
COMMENTARY
FINANCIAL RESULTS
Income available for distribution is 28,49 cents per unit (2001: 31,74 cents)
a decline of 10,2% over the previous year. Headline earnings declined by 8,4%.
Allowing for the interim distribution of 14,01 cents per unit (2001: 16,32
cents) a final distribution of 14,48 cents per unit (2001: 15,42 cents) will be
distributed at the beginning of March 2003.
PORTFOLIO COMMENTARY
As at the year end, the portfolio comprised 63 properties in the major urban
areas of South Africa. By value, 51% are offices, 46% industrial with the
balance being retail. Geographically, 80% are located in Gauteng, followed by
Cape Province at 12% and the rest in Kwazulu-Natal and Mpumalanga. The portfolio
is of mixed quality.
An ongoing sales focus has resulted in agreements of sale been concluded on
eight properties for a total consideration of R14,4 million. Five of these
properties were transferred during the period under review with net proceeds
from the sales amounting to R10,5 million after deduction of commission. The
valuation of the properties transferred was R11,5 million as at 31 December
2001.
As has been stated in previous announcements an offer has been made to
Centrecity Property Fund (Cenprop) for the purchase of 2 Long Street, an office
block in Cape Town and Southway Mall, a retail centre in Durban. Further details
of this transaction will be contained in a circular to be posted the week
commencing 10 February 2003.
Vacancies have decreased from 15% of the total area available to let at the
beginning of 2002 to 11% as at 31 December 2002. A continued focus on reducing
vacancies in 2003 and tenant retention should result in this vacancy level
reducing further. Most of these vacancies are in Gauteng and particularly in the
secondary industrial areas. In rental terms the current vacancy translates into
an approximate revenue loss equal to 8% of total income.
A gearing facility for R90 million is being negotiated. This will allow the
acquisition of properties for cash, or a combination of cash and the issue of
new units.
ACCOUNTING POLICIES
The results have been prepared in accordance with South African Statements of
Generally Accepted Accounting Practice. The accounting policies are consistent
with those applied in the previous year, with the exception of the accounting
policy for maintenance expenditure noted below.
CHANGE IN ACCOUNTING POLICY
In terms of the Generally Accepted Accounting Practice, a provision for long-
term maintenance can no longer be raised. As management deem it prudent to
provide for long-term maintenance a reserve has been created to provide for such
maintenance.
PORTFOLIO VALUATION
A panel of valuers was appointed in September 2002 to examine the valuations.
These valuations reflected a decrease in value of the property portfolio from
R370 122 000 at 31 December 2001 to R313 528 000 at the financial year end.
The market valuation, together with cash reserves of R10 517 000, equates to
221 cents per unit (2001: 253 cents per unit).
Trading in Capital units in 2002 increased to 20% of units in issue compared to
10% in 2001.
AUDIT OPINION
The auditors, KPMG Inc., have issued their opinion on the Group`s financial
statements for the year ended 31 December 2002. A copy of their unqualified
report is available for inspection at the fund`s registered office.
ANNUAL REPORT
Capital`s annual report will be posted to unitholders on or about 1 March
2003.
STRATEGY
Rejuvenation of the portfolio through sales of older under performing
properties, together with the acquisition of better quality properties will
continue. This will result in a better balanced sectorial spread in offices,
retail and industrial properties. Other options to increase the market
capitalization of the fund with a view to improving the risk profile, earnings
and liquidity are being explored.
The drive to reduce vacancy levels will be sustained together with an ongoing
focus on tenant retention.
OUTLOOK
Stringent asset management incorporating reduced vacancy levels and
improvements in the quality of Capital`s portfolio should result in a modest
increase in earnings in 2003.
INCOME DISTRIBUTION DECLARATION
Notice is hereby given that a cash distribution of 14,48 cents per unit
(2001: 15,42) ("the distribution ") has been declared, payable to unitholders
recorded in the books of the Fund at the close of business on the record date,
Friday, 28 February 2003. Unitholders are advised that the last day to trade
"cum" the distribution will be Friday, 21 February 2003. The units will trade
"ex" distribution as from Monday, 24 February 2003. Payment will be made on
Monday, 3 March 2003. Unit certificates may not be dematerialised or
rematerialised during the period Monday, 24 February 2003 to Friday, 28 February
2003, both days inclusive.
On behalf of the board
J H I Real Estate Limited Johannesburg
Secretaries 7 February 2003
REGISTERED OFFICE:
1st Floor, JHI House,
11 Cradock Avenue,
Corner Baker Street,
Rosebank, 2196
PO Box 2100, Parklands, 2121
TRANSFER SECRETARIES:
Computershare Investor Services,
Ground Floor, 70 Marshall Street
Johannesburg, 2001
PO Box 1053, Johannesburg, 2000
PFM PROPERTY FUND MANAGERS LTD
Co. Reg. No. 1980/009531/06
Date: 06/02/2003 05:56:06 PM Produced by the JSE SENS Department
