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Rand Leases Properties Limited - Unaudited Interim Results For The Six Months
Release Date: 28/03/2003 17:15:11 Code(s): RPR
Rand Leases Properties Limited - Unaudited interim results for the six months
ended 31 December 2002
RAND LEASES PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1978/000870/06
Share code: RPR ISIN: ZAE000028254
("The Company")
Unaudited interim results for the six months ended 31 December 2002
Consolidated income statement
Six months ended Year ended
31 Dec 2002 31 Dec 2001 30 June 2002
R000"s R000"s R000"s
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Revenue 40 798 72 080 133 533
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Continuing operations 20 899 51 229 82 172
Discontinued operations 19 899 20 851 51 361
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Operating profit 17 337 21 914 50 715
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Continuing operations 2 901 4 518 9 728
Discontinued operations 14 436 17 396 40 987
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Unrealised deficit on
revaluation of investment
properties - - (9 737)
Other operating expenses (3 990) (2 237) (8 359)
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Profit from operations 13 347 19 677 32 619
Investment income 2 116 - -
Net interest expense (13 780) (12 839) (33 349)
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Profit before abnormal
items 1 683 6 838 (730)
Abnormal items (2 336) - -
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(Loss)/profit before
distribution to unit
holders (653) 6 838 (730)
Debenture interest - (6 650) (6 603)
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(Loss)/profit before
taxation (653) 188 (7 333)
Taxation - - (2 069)
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(Loss)/profit after
taxation (653) 188 (9 402)
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Reconciliation of headline
earnings/loss
(Loss)/profit after tax (653) 188 (9 402)
Debenture interest - 6 650 6 650
Unrealised deficit on
revaluation of investment
properties - - 9 737
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Headline (loss)/earnings (653) 6 838 6 985
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Headline (loss)/earnings
per linked unit (cents) (0,71) 13,22 10,93
Fully diluted (loss)/
earnings per linked unit
(cents) (0,70) 11,31 (3,76)
Distribution per linked
unit (cents) - 11,00 22,50
Weighted average linked
units in issue - 000"s 91 580 51 733 63 494
Linked units in
issue - 000"s 93 859 60 453 82 913
Consolidated Balance Sheet
31 Dec 2002 31 Dec 2001 30 June 2002
R000"s R000"s R000"s
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Assets
Non-current assets 84 528 443 017 445 452
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Fixed assets 1 388 1 578 2 534
Investment property - 374 003 356 892
Marketable securities 48 - 48
Development property 69 389 64 766 72 275
Rand Leases Properties
Employee Trust 10 023 - 10 023
Deferred taxation 3 680 2 670 3 680
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Current assets 120 980 22 042 24 932
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Trade and other
receivables 118 892 20 686 22 799
Cash and bank balances 2 088 1 356 2 133
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Total assets 205 508 465 059 470 384
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EQUITY AND LIABILITIES
Capital and reserves 112 539 98 862 102 352
Non-current liabilities 61 484 295 833 307 505
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Long term liabilities -
debentures 57 254 36 877 50 577
Long term liabilities -
bonds 3 736 258 333 256 434
Deferred taxation
liability 494 623 494
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Current liabilities 31 485 70 364 60 527
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Bank overdraft 3 410 10 906 12 328
Trade and other payable 25 651 7 768 26 357
Current portion of long
term liability - - 19 405
Deferred liability - 44 197 -
Taxation payable 2 375 804 2 375
Shareholders for dividends
and debenture interest 49 6 689 62
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Total equity and
liabilities 205 508 465 059 470 384
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Consolidated Cash Flow Statement
Six months ended Year ended
31 Dec 2002 31 Dec 2001 30 June 2002
R000"s R000"s R000"s
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Cash flow from operating
activities (113 161) (13 119) (1 294)
Cash flow from investing
activities 359 778 (210 235) (211 296)
Cash flow from financing
activities (237 744) 216 546 205 137
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Net increase/(decrease)
in cash and cash
equivalents 8 873 (6 808) (7 453)
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Cash and cash equivalents
at beginning of period (10 195) (2 742) (2 742)
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Cash and cash equivalents
at end of period
(overdraft) (1 322) (9 550) (10 195)
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Statement of changes in equity
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Equity at beginning of
period 102 352 77 830 77 830
Issue of new shares 10 840 16 258 33 971
Net (loss)/income for the
period (653) 188 (9 402)
Non-distributable reserve - 4 586 -
Dividends to linked units - - (47)
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Equity at end of period 112 539 98 862 102 352
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Net asset
value per
Net asset value - linked unit
March 2003 No of units R"000s (cents)
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Redefine income fund
linked units* 28 249 194 80 793 114
Market price at 26 March
2003 R2,86
Development property -
book value 69 389 98
Net liabilities (11 031) (16)
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Net assets 139 151 196
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Shares in issue - 000"s* 70 816
Net asset value - cents
per linked unit 196
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* After finalisation of the sale of the Investment Portfolio, the repurchase of
14 million Rand Leases linked units and winding up of the Rand Leases Share
Participation Scheme.
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ACCOUNTING POLICIES
The group"s financial information has been extracted from the unaudited
condensed group interim financial statements, which have been prepared in
accordance with the South African Statement of Generally Accepted Accounting
Practice applicable to interim financial reporting. The accounting policies used
in the preparation of the interim financial information is consistent with those
used in the annual financial statements for the year ended 30 June 2002.
OPERATIONS
Rental Portfolio
As reported in the annual financial statements the company has disposed of its
entire investment property portfolio to Redefine Income Fund for a consideration
of R356,4 million. The purchase consideration is payable as to R6 million in
cash and the balance net of mortgage bonds in Redefine Income Fund Limited
linked units issued at a unit price of 2,47 per unit. All suspensive conditions
have been fulfilled and the transfer of the properties are in the process of
being registered.
Low Cost Housing
During the period under review turnover on the housing project decreased by
almost 60%.A further 758 houses (2001: 2 414 houses) were completed and handed
over to beneficiaries bringing the total houses completed and handed over to
beneficiaries for this project to 12 518. Delays are being experienced in
obtaining Environmental Impact Assessment approvals and in concluding an
agreement on commercial terms for phase 3 of the project with the Gauteng
Department of Housing. The company expects to be on site for phase 3 during the
second quarter of calender 2003. We do not expect to receive any significant
contribution to earnings in the current financial year from phase 3 of the
project due to the delays experienced.
RESULTS OF OPERATIONS
The results for the six months under review are not comparable to the previous
six months as the company disposed its entire investment portfolio with effect
from 1 November 2002. Profit from operations, including income earned on its
property shares from 1 November 2002 less restructuring costs, was R13,1
million. This is R6,5 million lower than the previous year as a result of a
reduced contribution from the housing project. Additionally, bad debts and the
restructuring of a material lease impacted negatively on the performance of the
investment portfolio.
PROSPECTS
The disposal of the investment portfolio will result in a reduction in overheads
and elimination of the high interest charge. As previously advised in the
trading update released on sens on 20 March 2003 the company will apply its
development expertise to expand development activities countrywide, in property
sectors which are likely to produce superior returns. The intention is to expand
development projects to a critical mass which will diversify exposure to
sectors, localities and projects. This repositioning is expected to impact
negatively on profitability in the short term particularly in financial 2003.
Thereafter development projects are expected to make a significant contribution
to profitability.
DECLARATION OF DIVIDENDS AND DEBENTURE INTEREST
The Board has re-evaluated its distribution policy and it is intended that the
major portion of future profits from dividends and developments will be
distributed.
For and on behalf of the board
RAR Kebble
Chairman
G Fischer
Managing Director
Johannesburg
28 March 2003
REGISTERED OFFICE
Windermere Building
Hackle Brooke Office Park
Corner Jan Smuts Avenue and Conrad Drive
Craighall
2196
TRANSFER SECRETARIES
Computershare Investor Services Limited
11th Floor
70 Marshall Street
Johannesburg
2000
PO Box 62053
Marshalltown
2107
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