| Thu 27 Feb 2003, 16:25 | | Martprop Property Fund - Interim results and distr |
|
Martprop Property Fund
Share code: MTP
ISIN code: ZAE000037271 1AAA06FAF37B7489E72184B723FB5B3A
www.martprop.co.za
Interim results and distribution
The directors of Marriott Property Fund Managers Limited, management company of
Martprop Property Fund (Martprop) submit their report on the unaudited results
of the Martprop group for the six months ended 31 January 2003.
CONSOLIDATED BALANCE SHEET 31.01.2003 31.01.2002 31.07.2002
(R000) (Unaudited) (Unaudited) (Audited)
Assets
Non-current assets
Fixed property 1 234 110 1 175 975 1 173 125
Current assets
Trade and other receivables 17 726 22 648 19 030
Cash resources and
short-term investments 79 364 112 233 80 639
TOTAL ASSETS 1 331 200 1 310 856 1 272 794
Unitholders` funds
and liabilities
Unitholders` funds 1 155 546 1 224 062 1 183 735
Non-current liabilities
Interest bearing borrowings 82 661 - -
Current liabilities
Trade and other payables 14 082 14 333 10 181
Deferred capital gains tax 1 987 - 691
Distributions payable 76 924 72 461 78 187
TOTAL UNITHOLDERS` FUNDS
AND LIABILITIES 1 331 200 1 310 856 1 272 794
CONSOLIDATED INCOME Six Six Year
STATEMENT months to months to to
(R000) 31.01.2003 31.01.2002 31.07.2002
Note % change (Unaudited) (Unaudited) (Audited)
Revenue
(rental income) 4,3% 91 925 88 131 178 626
Net property income 75 663 69 490 142 843
Interest received 5 450 4 089 8 471
Interest paid (1 663) - -
Fund expenses (2 611) (2 594) (4 938)
Headline earnings 8,3% 76 839 70 985 146 376
Capital surplus/
(deficit) on
disposal of fixed
properties 281 378 (1 850)
Write-down on
revaluation of
fixed properties (28 385) - (35 491)
Net profit 48 735 71 363 109 035
Units in issue (000) 641 016 641 016 641 016
Net distributable
income (cents
per unit) 1.1 6,2% 12,00 11,30 23,50
Headline earnings
(cents per
unit) 1.1 8,3% 11,99 11,07 22,83
Net profit
(cents per
unit) 1.1 7,60 11,13 17,01
NOTES TO THE FINANCIAL STATEMENTS
1. This interim report has been prepared using accounting policies which are in
accordance with Statements of Generally Accepted Accounting Practice and are
consistent with those applied in preparation of the audited financial statements
for the year ended 31 July 2002. As a consequence properties have been revalued
at the current interim date. AC133: The statement on Financial Instruments has
been applied for the first time in these results and its impact has been
insignificant.
1.1 Headline earnings and distribution attributable to unitholders
31.01.2003 31.01.2002 31.07.2002
(Unaudited) (Unaudited) (Audited)
R000 CPU R000 CPU R000 CPU
Net profit 48 735 7,60 71 363 11,13 109 035 17,01
Adjustment for:
Capital (profit)/loss
on disposal
of fixed properties (281) (0,04) (378) (0,06) 1 850 0,29
Write-down on
revaluation of
fixed properties 28 385 4,43 - - 35 491 5,54
Net utilisation
from maintenance
reserves 85 0,01 1 476 0,23 3 223 0,50
Unclaimed distribution - - - - 88 0,01
Losses in fixed
property companies
carried forward - - - - 961 0,15
Distribution a
ttributable to
unitholders 76 924 12,00 72 461 11,30 150 648 23,50
CONSOLIDATED STATEMENT Six Six Year
OF CHANGES months to months to to
IN UNITHOLDERS` FUNDS 31.01.2003 31.01.2002 31.07.2002
(R000) (Unaudited) (Unaudited) (Audited)
Unitholders` funds at
beginning of period 1 183 735 1 225 160 1 225 160
Capital movements (28 104) 378 (38 202)
Write-down on revaluation
of fixed properties (28 385) - (35 491)
Capital surplus/(deficit)
on disposal of fixed
properties 281 378 (1 850)
Loss in fixed property
companies carried forward - - (961)
(28 104) 378 (38 302)
Share issue costs refunded - - 100
Maintenance reserves
Net movement (85) (1 476) (3 223)
Revenue movements - - -
Net profit 48 735 71 363 109 035
Transfers from/(to) capital 28 104 (378) 38 302
Unclaimed distributions - - 88
Net transfers from
maintenance reserves 85 1 476 3 223
Available for distribution 76 924 72 461 150 648
Distributions paid (76 924) (72 461) (150 648)
Unitholders` funds at
end of period 1 155 546 1 224 062 1 183 735
ABRIDGED CONSOLIDATED Six Six Year
CASH FLOW STATEMENT months to months to to
31.01.2003 31.01.2002 31.07.2002
(R000) (Unaudited) (Unaudited) (Audited)
Cash inflows from
operating activities
Net profit for the period 48 735 71 363 109 035
Adjustment for:
Interest received (5 450) (4 089) (8 471)
Interest paid 1 663 - -
Write-down on revaluation
of fixed properties 28 385 - 35 491
Capital (surplus)/deficit
on disposal
of fixed properties (281) (378) 1 850
Operating profit before
working capital changes 73 052 66 896 137 905
Working capital changes 5 231 (7 440) (8 047)
Cash generated from operations 78 283 59 456 129 858
Interest received 5 450 4 089 8 471
Interest paid (1 663) - -
Distributions paid (78 215) (17 628) (89 928)
Net cash inflow from
operating activities 3 855 45 917 48 401
Cash inflow/(outflow)
from investing activities (87 791) 24 103 (9 975)
Cash inflow from
financing activities 82 661 - -
Net (decrease)/increase in cash (1 275) 70 020 38 426
Cash resources at
beginning of period 80 639 42 213 42 213
Cash resources at end of period 79 364 112 233 80 639
OTHER INFORMATION 31.01.2003 31.01.2002 31.07.2002
(R000) (Unaudited) (Unaudited) (Audited)
(Long term borrowings)/
capital cash at period end (78 476) 43 813 9 292
Commitments at period end (117 485) (63 699) (13 089)
Expected net proceeds
from sale of properties 15 422 21 855 20 909
(180 539) 1 969 17 112
Future capital commitments
will be funded through
existing borrowing facilities
or by raising new equity.
Vacancy factor (based
on lettable area) 7% 8% 7%
Valuation analysis
(cents per unit)
Net asset value (prior to
distribution for period
under review) 192 202 197
Listed market price 181 163 171
Discount to net asset value 6% 19% 13%
Capitalised interest (R000) - 13 252
COMMENTS
1. Results
An interim distribution of 12,0 cents per unit for the six months to 31 January
2003 has been achieved for unitholders by Martprop. This represents growth of
6,2% over the comparable distribution last year of 11,30 cents per unit. These
results incorporate the acquisition of nine properties and the disposal of ten
properties for R109,0 million and R27,8 million respectively.
In compliance with Generally Accepted Accounting Practice the property portfolio
was revalued at the interim date. No revaluation was done at the corresponding
period last year. As a consequence of high interest rates and weaker market
conditions the property portfolio was revalued downwards by R28,4 million or
2,19% of the value of the comparable portfolio. Accordingly, net profit after
the revaluation amounts to R48,7 million and distributable income amounts to
R76,9 million (2002: R72,4 million).
2. Property portfolio
Improved conditions in the industrial sector of the economy have given rise to
the anticipated upturn in rentals from this portion of the Martprop portfolio.
Vacancies in the industrial portfolio remain low and recent lease renewals have
given evidence that the long expected recovery of the industrial property market
has begun. The strong performance of the FundOs well located warehousing and
distribution properties has underpinned current earnings and will continue to
generate growth as the economy moves into an environment of declining interest
rates.
Acquisitions concluded in the first six months have been focused on prime
warehousing facilities and the joint purchase of a portfolio of six retail
properties with S A Retail Properties Limited. These acquisitions, with a total
value of R109,0 million, were at favourable initial property yields and the
escalation of the underlying leases, coupled with the likelihood of the costs of
borrowing easing over the next six months, will result in sustained earnings
growth from these properties.
Martprop has continued its strategy of selling non-core assets which no longer
meet the Fund`s investment profile and, to this end, ten properties were sold
for a total consideration of R27,8 million representing an excess of R0,28
million over the last valuations. Most of these disposals were made specifically
to end users at favourable selling prices to Martprop.
3. Borrowings and Interest Risk Management
Martprop acquired property through the raising of debt for the first time in
December 2002. At 31 January 2003 the group had gearing of 6,7% of the property
portfolio value or borrowings of R82,7 million. This level of gearing is well
below MartpropOs maximum permissible debt level of 30% of the value of the
property portfolio.
During the period under review Martprop did not fix interest rates on the debt,
but instead managed interest rate risk through the investment of surplus cash
into the loan through an access type facility. Martprop is in the process of
managing its risk through fixing interest rates at appropriate levels.
4. Prospects
Management is of the view that the total distribution for the year will reflect
modest growth over that of last year. Recent acquisitions, together with
opportunities currently under consideration, will contribute to this growth in
the medium to long term. With the anticipated decline in interest rates,
unitholders should expect to benefit from both capital appreciation as well as
the growth in earnings.
DISTRIBUTION DECLARATION AND IMPORTANT DATES
Notice is hereby given of the declaration of distribution no. 16 in respect of
the income distribution period 1 August 2002 to 31 January 2003. The
distribution amounts to 12,00 cents per unit.
Last date to trade cum distribution Thursday, 20 March 2003
Units will trade ex-distribution Monday, 24 March 2003
Record date to participate in
the distribution Friday, 28 March 2003
Payment of distribution Monday, 31 March 2003
Unit certificates may not be dematerialised or re-materialised between Monday,
24 March 2003 and Friday, 28 March 2003, both days inclusive.
BY ORDER OF THE BOARD
MARRIOTT PROPERTY SERVICES (PTY) LIMITED
SECRETARIES
28 February 2003
Registered office Sponsor Transfer secretaries
Marriott at Kingsmead Exchange Computershare Investor
Kingsmead Office Park Sponsors Services Limited
Durban 4001 (Pty) Limited 9th Floor
70 Marshall Street
PO Box 207 Johannesburg 2001
Durban 4000 PO Box 1053
Tel: (031) 366-111 Johannesburg 2000
Tel: (011) 370-7700
Date: 27/02/2003 04:05:00 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
