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iFOUR PROPERTIES LIMITED
(Formerly iFour Properties (Proprietary Limited)
Incorporated in the Republic of South Africa)
(Registration number 2001/016118/06)
Share code: IFR ISIN: ZAE000039236
UNAUDITED INTERIM RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2002
ABRIDGED CONSOLIDATED GROUP BALANCE SHEET
R000s 31 December 2002
ASSETS
Non-current assets
Investment Properties 732,747
Current assets
Receivables and prepayments 7,356
Cash and cash equivalents 10,805
Total assets 750,908
EQUITY AND LIABILITIES
Share capital and reserves 23,964
Non-current liabilities
Debenture capital net of transaction costs 255,792
Interest bearing debt 407,495
Deferred taxation 763
Current Liabilities
Payables 41,741
Unitholders for distribution 21,153
Total equity and liabilities 750,908
ABRIDGED GROUP CASHFLOW STATEMENT 31 December 2002
R000s
Cash flow from operating activities
Cash generated from operations before debenture 76,460
interest
Debenture interest paid (21,153)
Net cash generated from operating activities 55,307
Investing activities
Investment properties acquired
729,696
Net cash utilised in investing activities
729,696
Financing activities
Issue of ordinary share capital net of 21,907
transaction costs
Issue of debentures net of transaction costs 255,792
Proceeds of long term liability 430,388
Less repaid during the period 22,893 407,495
Net cash from financing activities 685,194
Cash and cash equivalents at the end of the 10,805
period
ABRIDGED CONSOLIDATED GROUP INCOME STATEMENT
R000`s 31 December 2002
Revenue 71,243
Operating costs - property portfolio 17,611
Operating costs - administration 3,102
Operating Profit 50,530
Profit on acquisition of investment property 3,051
Interest received 3,711
Profit before finance charges 57,292
Debenture interest 21,153
Finance charges 33,319
Profit after finance charges before tax 2,820
Deferred capital gains tax 763
Profit for the period 2,057
Reconciliation between earnings and headline
earnings
Net profit for the period 2,057
Adjusted for:
Profit on acquisition of investment property net of (2,288)
tax
Debenture interest 21,153
Debenture transaction costs amortised 385
Headline earnings 21,307
Number of linked units in issue 58,275,179
Weighted average linked units in issue 58,275,179
Profit per linked unit (cents) 3.53
Headline earnings per linked unit (cents) 36.56
Diluted headline earnings per linked unit (cents) 32.47
based on 65,625,179 units
Distribution per linked unit (cents) 36.29
Net asset value per linked unit(cents) 480
ACCOUNTING POLICIES
The interim financial statements are prepared in accordance with South
African Statements of Generally Accepted Accounting Practice.
The accounting policies used in their preparation are consistent with those
set out in the Prospectus except for the adoption of AC 133 in the
preparation of its interim results.
Comparative figures
No comparative figures are presented, as the company was dormant prior to
listing.
GROUP STATEMENT OF CHANGES IN UNITHOLDERS` EQUITY
Share Share Other Loss for Total
Reserve* the
Capital premium period
R000s
Balance at 1 January 2002 0
Linked units issued to 58 23,252 23,310
vendors 11 June 2002
Transaction costs 1,403 1,403
Profit for the period 2,057 2,057
Transfer to reserve 2,288 2,288
Balance at 31 December 58 21,849 2,288 (231) 23,964
2002
*Other reserve represents gains or losses on investment properties
1. Results
The impact of the 3% rise in interest rates since listing of the
company,
Particularly on businesses in the Information Technology, Financial
Services and Training and Development sectors have placed these and
other
small businesses under financial strain with consequent reductions in
space requirements. The occupancy rate of the portfolio at 31 December
2002 was 96.2%.In order to minimise vacancies the majority of renewals
have been effected at lower rental rates than those in the projections.
This coupled with the reduction in space requirements referred to above
has resulted in the portfolio income being lower than anticipated at
the
time of listing.
In June, immediately after listing the company entered into an interest
rate hedge to provide protection against the interest rate increases.
This
hedge position resulted in interest costs for the period being lower
than
forecast at listing. In addition savings were also achieved in
adminstrative and overhead costs through strict financial management.
2. Declaration of Distribution per Linked Unit
The board has approved an interim distribution of 36,29 cents per
linked
unit for the period to 31 December 2002.
3. Borrowings and Interest Rates Hedges
Set out below is the company`s borrowings at listing and at 31 December
2002.
Institution Notes Original Balance at Maturity
Capital
Amount 31 December
2002
R000`s R000`s
The Standard Bank of South (1) 107 000 107 000 30 April 2005
Africa Limited
The Standard Bank of South (1) 248 000 225,548 30 April 2007
Africa Limited
355,000 332,548
Nedcor Investment Bank Limited (2) 75 388 74,947
430,388 407,495
(1)(a) Only interest is payable on the bonds until maturity.
(b) R35 million has been utilised on an access bond facility. At 31
December 2002 R22 452 had been deposited into this facility and is
available for
future use.
(c) Interest on the loan is at prime overdraft rate less 1,5% on
unhedged
amounts.
(d) Interest Rate Hedges are as follows:
Fixed Interest rate
R320 million fixed at 13,86 NACQ to 10 June 2004
R112 million fixed at 13,69% from 10 June 2004 to 10 June 2005
Interest rate CAP option
R208 million at 14,93% NACQ from 10 June 2004 to 10 June 2005
(2) The Nedcor Investment Bank Limited finance lease facility bears
interest
at an effective rate of 13,5% and is amortised annually to 30 September
2009.
The weighted average cost of borrowings is 13.84 %
4. Acquisition
No acquisitions were made since listing. The company is, however,
actively
pursuing a number of acquisitions and growth opportunities remain a
priority.
5. Prospects
The oversupply of office space in the commercial property sector has
negatively impacted on lease renewals and the prospect of rental
growth.
This trend, which is expected to slowly reach equilibrium, has been
counter balanced by the demand for modern warehousing in good
locations. Given the current economic climate the company expects the
distribution in the second half of the year to be in line with the
amount
distributed in the period under review.
6. Distribution
Notice is hereby given that an interim distribution of 36,29 cents per
linked unit for the period to 31 December 2002 has been declared.
The last date for unit holders to trade cum the distribution on the JSE
Securities Exchange is Thursday 13 March 2003.
Linked units will trade ex the distribution from Friday 14 March 2003.
The record date for iFour linked unitholders to participate in the
distribution has accordingly been set for Thursday 20 March 2003.
Payment date for the distribution to linked unitholders is Monday 24
March
2003.
Linked unit certificates may not be dematerialised or rematerialised
between Friday 14 March 2003 and Thursday 20 March 2003, both days
inclusive.
By order of the Board
Rosebank
26 February 2003
DIRECTORS: Dr CP de Leeuw (Chairman), JAA Diepenbroek (Managing)*, RC
Johnson (British)
SH Mia, EPM Moses, RS Ntuli, JL Nunes*, UJ van der Walt, LI Weil
* Executive
Date: 26/02/2003 11:03:36 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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