| Thu 6 Feb 2003, 18:13 | | Apexhi Properties Limited - Interim Results For Th |
|
Apexhi Properties Limited - Interim Results For The Six Months Ended 31 December
Release Date: 06/02/2003 17:55:19 Code(s): APA APB
APEXHI PROPERTIES LIMITED - INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER
2002 AND QUARTERLY DISTRIBUTION DECLARATION FOR THE THREE MONTHS ENDED 31
DECEMBER 2002
ApexHi Properties Limited
(Incorporated in the Republic of South Africa)
(Registration number 1999/000238/06)
Share code APA ISIN ZAE000033064
Share code APB ISIN ZAE000033072
("ApexHi" or "the company")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2002 AND QUARTERLY
DISTRIBUTION DECLARATION FOR THE THREE MONTHS ENDED 31 DECEMBER 2002
These interim results have been reviewed by the independent auditors, Grant
Thornton Kessel Feinstein. Their unqualified report is available for inspection
at the company`s registered office.
The directors submit their report on the results of the company for the six
months ended 31 December 2002 as follows:
INCOME STATEMENT
Reviewed Audited
Six months ended Year ended
31 December 31 December 30 June
2002 2001 2002
R`000 R`000 R`000
Revenue 274 981 208 825 424 472
Property expenses (84 667) (60 466) (136 680)
Administrative expenses (39 731) (42 743) (70 307)
Depreciation/letting cost amortisation (729) (709) (1 212)
Profit from operations 149 854 104 907 216 273
Finance costs (35 234) (21 644) (48 357)
Interest income 5 178 5 356 7 671
Profit before debenture interest 119 798 88 619 175 587
Debenture interest (116 001) (82 537) (175 587)
Profit before capital items 3 797 6 082 -
Capital items (173) (11 173) 38 938
Change in fair value of investment properties - (800) 51 355
Goodwill amortisation/impairment (305) (11 508) (12 118)
Net surplus/(deficit) on disposal
of investment properties 132 1 135 (299)
Profit/(loss) before taxation 3 624 (5 091) 38 938
Deferred capital gains tax - - (5 891)
Net profit/(loss) for the period 3 624 (5 091) 33 047
ACCOUNTING POLICIES
The interim financial statements have been prepared in accordance with South
African Statements of Generally Accepted Accounting Practice. The accounting
policies used in their preparation are consistent with those used in the annual
financial statements for the year ended 30 June 2002.
DISCONTINUING OPERATIONS
Included in net profit for the period is R4,1 million (December 2001: loss of
R13,1 million) in respect of discontinuing operations. Discontinuing operations
include Domayne Property Managers, Domayne Leasing Consultants and Domayne
Engineering Services. The results of the discontinuing operations are not
sufficiently material to warrant separate disclosure in the income statement but
full details are shown in the segmental information analysis.
EARNINGS, HEADLINE EARNINGS AND DISTRIBUTIONS PER UNIT
Reviewed Audited
Six months ended Year ended
31 December 31 December 30 June
2002 2001 2002
R`000 R`000 R`000
Reconciliation between earnings
and headline earnings
Net profit/(loss) after taxation 3 624 (5 091) 33 047
Adjusted for:
Deferred capital gains taxation - - 5 891
Goodwill amortisation/impairment 305 11 508 12 118
Change in fair value of investment properties - 800 (51 355)
(Surplus)/deficit on disposal
of investment properties (132) (1 135) 299
Debenture interest 116 001 82 537 175 587
Headline earnings 119 798 88 619 175 587
Weighted average Earnings/(loss) Headline earnings Distribution
number of units per unit per unit per unit
A unit 112 338 095 (0,08) 51,00 51,00
B unit 112 338 095 3,31 55,64 52,25
Total - six months to December 2002 3,23 106,64 103,25
A unit 80 367 878 (6,95) 51,00 51,00
B unit 80 367 878 0,62 59,27 51,70
Total - six months to December 2001 (6,33) 110,27 102,70
A unit 85 548 251 19,31 102,00 102,00
B unit 85 548 251 19,31 103,25 103,25
Total - year to June 2002 38,62 205,25 205,25
CONDENSED BALANCE SHEET
Reviewed Reviewed Audited
31 December 31 December 30 June
2002 2001 2002
R`000 R`000 R`000
ASSETS
Tangible assets 1 857 261 1 123 800 1 601 151
Investment properties 1 856 321 1 122 966 1 600 249
Plant and equipment 940 834 902
Intangible assets 11 085 12 000 11 390
Current assets 97 502 124 539 75 177
TOTAL ASSETS 1 965 848 1 260 339 1 687 718
EQUITY AND LIABILITIES
Share capital and reserves 236 717 69 823 186 018
Non-current liabilities 1 625 228 1 094 691 1 407 557
Debenture capital 1 076 092 724 550 913 058
Deferred taxation 5 891 - 5 891
Non-interest bearing borrowings 735 735 735
Interest bearing borrowings 542 510 369 406 487 873
Current liabilities 103 903 95 825 94 143
TOTAL EQUITY AND LIABILITIES 1 965 848 1 260 339 1 687 718
Net asset value per unit (cents)
Number of units* Share Debenture Total
A unit 119 565 445 98,99 540,00 638,99
B unit 119 565 445 98,99 360,00 458,99
Total - 31 December 2002 197,98 900,00 1 097,98
A unit 80 505 523 43,36 540,00 583,36
B unit 80 505 523 43,36 360,00 403,36
Total - 31 December 2001 86,72 900,00 986,72
A unit 101 450 900 91,67 540,00 631,67
B unit 101 450 900 91,67 360,00 451,67
Total - 30 June 2002 183,34 900,00 1 083,34
*Included are 10 617 600 A and 10 617 600 B units which were issued after the
balance sheet date. These consideration units will rank for the quarterly
distribution.
STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 December 2002
Revalu- Accumu-
Share Share Capital ation lated
capital premium reserve reserve loss Total
R`000 R`000 R`000 R`000 R`000 R`000
Balance at 1 July 2001 5 21 693 - 12 978 (490) 34 186
Issue of ordinary shares 11 54 502 - - - 54 513
Share issue
and listing expenses - (13 785) - - - (13 785)
Net loss for the period - - - - (5 091) (5 091)
Transfer from revalution reserve- - - (800) 800 -
Transfer to capital reserve - - 1 135 - (1 135) -
Balance at 31 December 2001 16 62 410 1 135 12 178 (5 916) 69 823
Balance at 1 July 2002 20 140 463 801 57 342(12 608)186 018
Issue of ordinary shares 4 47 071 - - - 47 075
Net profit for the period - - - - 3 624 3 624
Realised deficit on disposal
of investment properties - - (515) 515 - -
Net surplus on disposal of
investment properties - - 132 - (132) -
Balance at 31 December 2002 24 187 534 418 57 857 (9 116)236 717
CONDENSED CASH FLOW STATEMENT
Reviewed Reviewed Audited
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2002 2001 2002
R`000 R`000 R`000
OPERATING ACTIVITIES
Cash from operating activities
before debenture interest
- continuing operations 112 622 89 539 174 797
- discontinuing operations 1 785 (2 668) (2 226)
Debenture interest paid (102 154) (60 819) (147 116)
Net cash from operating activities 12 253 26 052 25 455
INVESTING ACTIVITIES
Continuing operations
- purchase of investment properties
including capitalised transaction
and letting costs (259 957) (862 866) (1 347 616)
- proceeds on disposal of
investment properties 3 450 10 135 68 461
- proceeds on sale of discontinuing operations - 7 457 7 785
- net purchase of plant and equipment (200) (601) (903)
Net cash utilised in investing activities (256 707) (845 875) (1 272 273)
FINANCING ACTIVITIES
Issue of A and B units 210 109 543 520 796 300
Interest bearing borrowings raised 54 637 333 406 452 548
Listing expenses paid - (13 785) -
Net cash from financing activities 264 746 863 141 1 248 848
Net increase in cash and cash equivalents 20 292 43 318 2 030
Cash and cash equivalents at the
beginning of the period 32 127 30 097 30 097
Cash and cash equivalents at the
end of the period 52 419 73 415 32 127
SEGMENTAL INFORMATION
BUSINESS SEGMENTS
Discon- Cor- Adjustments
Investment tinuing porate Land inter-
properties operations costs trading divisions Total
R`000 R`000 R`000 R`000 R`000 R`000
Revenue 237 538 34 214 989 9 378 (7 138) 274 981
Segment result 150 730 4 134 (7 669) 2 659 - 149 854
Goodwill
amortisation/
impairment - (305) - - - (305)
Surplus on
disposal of
investment
properties 132 - - - - 132
Debenture
Interest - - (116 001) - - (116 001)
Interest income - 319 4 858 1 - 5 178
Finance costs (90) - (34 988) (156) - (35 234)
Profit for
the period 150 772 4 148 (153 800) 2 504 - 3 624
Other information
Total assets 1 878 446 16 860 60 952 9 590 - 1 965 848
Total liabilities 1 413 799 22 814 287 205 5 313 - 1 729 131
RELATED PARTY TRANSACTIONS
During the period, the company, in the ordinary course of business, entered
into various transactions with related parties.
These transactions occurred under terms that are no less favourable than those
arranged with third parties.
Six months ended Year ended
31 December 30 June
2001 2002
R`000 R`000
Board representation: Corpcapital Bank
Promoters` fees 1 972 15 090
Corporate finance fees 115 1 540
Non-executive directors` fees 20 60
Board representation and unitholder:
Standard Bank Properties
Interest paid 35 234 37 222
Interest received 5 178 7 671
Borrowings 542 510 489 895
Non-executive directors` fees 10 20
ApexHi Manco Trust
The Trust is the asset manager of the company.
Certain of the directors of the company
and Corpcapital Investments (Pty) Ltd are
beneficiaries and/or trustees of the Trust
Asset management fee (0,5% p.a. of the market
capitalisation plus borrowings of
the company) 4 612 -
COMMENTS
1. REVIEW OF OPERATIONS
Results
ApexHi has reported a distributable income of R119,8 million for the period
under review, which slightly exceeded management`s expectations. As a result, a
higher distribution will be paid on the B units.
A distribution for the second quarter of 25,50 cents per A unit and 26,50
cents per B unit has been declared against a distribution of 25,50 cents per A
unit and 25,75 cents per B unit for the quarter ended 30 September 2002.
The directors are confident that the forecast distribution for the full year
of 102 cents per A unit and 103 cents per B unit, will be achieved.
Acquisitions and disposals
During the period under review the following properties were acquired at an
average yield before gearing of 18,25%:
Unit
Purchase Issue
Price Borrowings Price
Property Location R`000 R`000 R
Vineyard Stellenbosch 16 043 4 740 12,50
Nedbank Centre Vereeniging 1 929 570 12,50
Jewel City Johannesburg 65 000 22 750 12,00
Sage Towers Johannesburg 37 800 13 230 11,00
Education Centre Johannesburg 6 825 - 11,50
127 597 41 290
In addition, a portfolio of 18 properties was purchased at a yield of 18%
from Pangbourne Properties Limited for a consideration of R122,1 million. The
total purchase consideration was settled by the issue of 10 617 600 units at a
price of R11,50 per combined unit. Although transfer had not been effected as
at 31 December 2002, the risks and rewards of ownership passed on 1 October 2002
and the consideration units rank for distribution from that date.
Perm Building Paarl and Strydom Street A & B were sold for R3,4 million and
the proceeds used to reduce debt.
The total portfolio now comprises 193 properties with 1 474 319 m2 of
lettable area.
The directors consider the investment properties at 31 December 2002 to be
fairly valued. An independent valuation of the entire portfolio will be
undertaken for the year end 30 June 2003.
Letting activity
During the period under review, the following letting activity took place:
Total Unlettable Lettable Vacant
Area area area area Let area
(m2) (m2) (m2) (m2) % m2 %
Adjusted portfolio as
at 1 July 2002 1 211 576 - 1 211 576 170 125 14 1 041 451 86
Properties acquired* 64 764 8 189 56 575 5 333 9 51 242 91
Disposals (6 981) - (6 981) (1 114) 16 (5 867) 84
1 269 359 8 189 1 261 170 174 344 14 1 086 826 86
Leases expired
during period - - - 104 524 - (104 524) -
Leases renewed
during period - - - (59 098) - 59 098 -
New lettings
during period - - - (39 089) - 39 089 -
Portfolio as at
31 December 2002 1 269 359 8 189 1 261 170 180 681 14 1 080 489 86
*Excludes 213 149 m2 in respect of properties acquired from Pangbourne
Properties Limited.
Borrowings
Total borrowings amount to R542,5 million of which R475 million or 88% has
fixed rates of interest at a weighted average all-inclusive rate of 12,82%. The
ratio of borrowings to property assets is 29%.
2. POST BALANCE SHEET EVENTS
Domayne Engineering Services ("DES")
The majority of the DES lift maintenance contracts were sold to Otis (Pty)
Ltd with effect from 1 January 2003 for an amount of R8,3 million. Adjustments
to the purchase price will be made as further contracts are ceded to Otis.
DES now comprises an air conditioning maintenance business. ApexHi intends to
dispose of this business in due course.
Acquisitions and disposals
ApexHi has entered into agreements for the purchase of the following
properties at an average yield before gearing of 17,67%:
Purchase price
Property Location R`000
Capital Centre Pietermaritzburg 17 850
NBS Building Johannesburg CBD 12 780
Innes Chambers Johannesburg CBD 5 220
I-Talk House Durban 9 700
Standard Bank Centre Pretoria CBD 43 000
37 Sauer Street Johannesburg CBD 55 550
Matlotlo House Johannesburg CBD 17 950
Kahn Portfolio Port Elizabeth 45 000
Parliament Towers Cape Town CBD 19 850
226 900
The purchase considerations in respect of the above will be settled by the
issue of 10 241 839 combined units at an average issue price of R11,64 and cash
of R107,7 million. The cash portion has been funded out of borrowings of which
R70,2 million is at a fixed all inclusive rate of 13,2% for three years.
Agreements have been reached for the disposal of Flex-O-Pak, 52 Andries
Street and Elandsfontein for a total consideration of R9,1 million. Proceeds
will be used to repay debt. The book value of these properties as at 30 June
2002 was R8,9 million.
DISTRIBUTION ANNOUNCEMENT
Unitholders are advised that Distribution No. 7 in respect of the period 1
October 2002 to 31 December 2002 of 25,50 cents per A unit and 26,50 cents per B
unit has been declared. The last date to trade cum interest will be Friday, 21
February 2003 and the units will commence trading ex-interest from the
commencement of business on Monday, 24 February 2003. The record date is Friday,
28 February 2003 and payment will be made to unitholders on Monday, 3 March
2003.
There may be no re-materialisation or dematerialisation of the A and B units
between Monday, 24 February 2003 and Friday, 28 February 2003, both days
inclusive.
CAUTIONARY ANNOUNCEMENT
ApexHi unitholders are referred to the cautionary announcement published
earlier today on SENS regarding the offer to acquire the entire property
portfolio of Fairvest Property Holdings Limited ("Fairvest") and the units in
Bonatla Property Holdings Limited held by Fairvest. Unitholders are advised that
if the offer is accepted, the resultant acquisition may have a material effect
on the price of ApexHi`s linked units and are accordingly advised to continue to
exercise caution in dealing in their linked units until a further announcement
is made.
By order of the Board
G G L Leissner
Chief Executive
Johannesburg
6 February 2003
DIRECTORS: M Wainer (Chairman), G G L Leissner* (Chief Executive Officer),
B H Azizollahoff (British)* (Managing Director), W E Cesman,
S Shaw-Taylor *Executive
Date: 06/02/2003 05:55:10 PM Produced by the JSE SENS Department
