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METBOARD PROPERTIES LIMITED -
Metboard
(Registration number 1998/005425/06
JSE Share code: MPL
ISIN: ZAE000014874
("Metboard" or "the company")
AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2003 AND DISTRIBUTION DECLARATION
Audited Audited
31 March 31 March
2003 2002
INCOME STATEMENT R"000 R"000
Revenue 168 262 130 980
Net property income 139 886 116 475
Expenses (4 054) (3 265)
Trading income before interest 135 832 113 210
Interest received 1 139 1 176
Interest paid (63 544) (52 564)
Net operating income 73 427 61 820
Loss on disposal of investment properties (5 019) -
Revaluation of investment properties 8 283 8 701
Net income before debenture interest and taxation 76 691 70 521
Taxation 281 (1 625)
Current (57) (23)
Deferred 338 (1 602)
Net income before debenture interest 76 972 68 896
Debenture interest paid (73 265) (61 759)
One month distribution to April 2001 - (3 958)
Five month distribution to September 2001 - (21 950)
Six month distribution to March 2002 - (35 851)
Two month distribution to May 2002 (11 286) -
Four month distribution to September 2002 (19 984) -
Six month distribution to March 2003 (41 995) -
Net income attributable to linked unitholders 3 707 7 137
Linked units in issue 198 850 362 166 141 271
Weighted average number of linked units in issue 193 398 847 157 621 577
Earnings per linked unit (cents) 39.62 44.74
Headline earnings per linked unit (cents) 37.94 39.20
Earnings/Headline earnings are calculated as follows:
Income before debenture interest and taxation 76 691 70 521
Taxation (57) (23)
Earnings 76 634 70 498
Loss on sale of properties 5 019 -
Revaluation of investment properties (8 283) (8 701)
Headline Earnings 73 370 61 797
Distribution per linked unit (cents) 38.00 39.12
One month distribution to April 2001 - (3.40)
Five month distribution to September 2001 - (14.12)
Six month distribution to March 2002 - (21.60)
Two month distribution to May 2002 (6.80) -
Four month distribution to September 2002 (10.06) -
Six month distribution to March 2003 (21.14) -
Audited Audited
31 March 31 March
2003 2002
BALANCE SHEET R"000 R"000
ASSETS
Investment properties 1 118 596 914 606
Current assets 29 331 41 432
Accounts receivable 22 294 27 206
Cash and cash equivalents 7 037 14 226
1 147 927 956 038
EQUITY AND LIABILITIES
Capital and reserves 618 137 524 554
Non current liabilities 420 256 310 609
Long term interest bearing debt 418 992 309 007
Deferred tax 1 264 1 602
Current liabilities 109 534 120 875
Accounts payable 20 399 9 926
Distribution payable to linked unitholders 42 036 35 887
Short term interest bearing debt 47 099 75 062
1 147 927 956 038
Number of linked units in issue 198 850 362 166 141 271
Net asset value per linked unit (cents) 310.86 315.73
Audited Audited
31 March 31 March
2003 2002
ABRIDGED CASH FLOW STATEMENT R"000 R"000
Cash flow from operating activities
Cash generated by operations 151 170 97 684
Net finance costs (62 405) (51 390)
Taxation paid (10) (56)
Distribution to linked unitholders (67 189) (46 981)
Cash flow from operating activities 21 566 (743)
Cash flow from investing activities (200 726) (241 427)
Cash flow from financing activities 171 971 242 078
Net (decrease) in cash and cash equivalents (7 189) (92)
Cash and cash equivalents at beginning of the 14 226 14 318
year
Cash and cash equivalents at end of the year 7 037 14 226
STATEMENT OF CHANGES IN EQUITY
Total
share
Share Debenture Non- Retained capital
distributable and
capital capital reserve income reserves
R"000 R"000 R"000 R"000 R"000
Balance at 31 March 1 165 301 144 85 496 23 387 828
2001
Shares issued 496 496
Debentures issued 129 154 129 154
Net income for the 7 137 7 137
year
Transfer to non 7 099 (7 099) -
distributable reserve
Dividends (61) (61)
Balance at 31 March 1 661 430 298 92 595 - 524 554
2002
Shares issued 327 327
Debentures issued 89 622 89 622
Net income for the 3 707 3 707
year
Transfer to non 3 602 (3 602) -
distributable reserve
Dividends (73) (73)
Balance at 31 March 1 988 519 920 96 197 32 618 137
2003
FINANCIAL RESULTS OF THE COMPANY
The audited results for the year ended 31 March 2003 have been prepared in
accordance with South African Statements of Generally Accepted Accounting
Practice and incorporate accounting policies which are consistent with those
used in the annual financial statements for the year ended 31 March 2002. These
results have been audited by Fisher Hoffman PKF (Jhb) Inc. and their unqualified
audit opinion is available for inspection at the company"s registered office.
Revenue and net operating income for the year to 31 March 2003 increased by
28.5% and 18.8% respectively. This is mainly due to the company having acquired
22 additional properties in May 2002. Total debenture interest payable to linked
unitholders increased by 18.6%. Total distributions per linked unit for the year
to 31 March 2003 amount to 38.0 cents compared to 39.12 cents in the prior year,
representing a decrease of 2.9%. The major reasons for this are increased
vacancies in the first nine months of the year, increased costs incurred in
letting the vacant space and bad debts written off in the year. The distribution
of 38.0 cents per linked unit has been achieved despite difficult economic
conditions and continuing high interest rates.
Acquisitions
In line with its stated policy of growing the property portfolio, Metboard
acquired 22 additional properties in May 2002 for a total cost of R201.803
million. As a result of this acquisition, total gross lettable area of the
company increased to 1.2 million square metres. The enlarged portfolio allows
Metboard to offer a large variety of space to let thereby reducing the
dependency on any one building or geographic area. The acquisition was financed
by the placement of an additional 32 709 091 linked units at R2.75 per linked
unit and additional borrowings of R110 million.
Disposals
During the year to 31 March 2003 the company disposed of 11 properties for
R28.35 million. These properties no longer met the investment criteria of
Metboard or were vacant and had no reasonable prospect of being let in the
foreseeable future. These disposals resulted in a capital loss of R5 million.
Capital improvement
During the year an amount of R20 million was spent on renovations and
improvements to the portfolio.
Property portfolio
At 31 March 2003 the property portfolio consisted of 158 properties with a total
gross lettable area of 1 187 803 square metres. The current valuation of the
property portfolio is R1.118 billion. Major national or international tenants
occupy 61 % of total gross lettable area.
At 31 March 2003 the unlet space in the portfolio amounted to 59 667 square
metres representing 5.02% of total gross lettable area. The comparable figure
for March 2002 was 88 248 square metres representing 8.82% of total gross
lettable area. The vacancies were reduced through a concerted letting campaign
and the benefits of these lettings will only be seen in the 2004 financial year.
VACANT SPACE RECONCILIATION IN SQUARE METRES
Vacant space 1 April 2002 88 248
Vacancies acquired 24 313
Vacancies that arose during the year 56 341
Vacancies sold during the year (9 282)
Lettings during the year (99 953)
Vacant space 31 March 2003 59 667
In terms of AC135 the company has to revalue its property portfolio on an annual
basis. Metboard has adopted a policy of having 30% of the portfolio valued
externally on an annual basis. The properties have been revalued at 31 March
2003 as follows:
40 properties valued by an independent valuer R281.075 million
118 properties valued by the directors R837.521 million
R1 118.596 million
The directors" valuations have been performed on the same basis and are
consistent with the assumptions made by the external valuer.
The revalautions at 31 March 2003 resulted in an increase in the value of the
property portfolio by R8 million.
Share capital
In June 2002 the company issued an additional 32 709 091 linked units at R2.75
per linked unit to partially fund the acquisition referred to above.
Borrowings and cash resources
At 31 March 2003 total borrowings amounted to R466 million of which 97.4% has
been fixed for periods ranging from 2 to 10 years. The weighted average rate of
interest over these periods amounts to 13.85%. During the year Metboard repaid
R28 million of its borrowings from cash realised from the sale of properties. As
at 31 March 2003, net interest bearing debt, including the liability for the
distribution payable to linked unitholders, represents a loan to investment
property value of 44.8%.
Cash resources at 31 March 2003 amounted to R7.037 million (2002: R14.226
million).
Post balance sheet events
Subsequent to the year-end Metboard acquired 3 properties for R32.3 million.
These acquisitions were financed through a combination of the issue of
additional linked units and further borrowings. Metboard took transfer of these
properties in May 2003. The company has also sold 3 additional properties that
no longer suited the company"s investment criteria. Transfer of these properties
is expected to take place in June 2003.
Borrowings of R50 million that expire in August 2003 have been renewed for a
further period of 7 years at a fixed rate of 12.515% NACQ.
With effect from 1 April 2003 Metboard has entered into a new management
agreement for the Asset and Property Administration with Investec Property Group
Limited. In terms of this agreement the Asset Management fee will be calculated
based on 0.5% of the aggregate of market capitalisation and borrowings.
Prospects
The board of directors believes that, subject to market conditions remaining
stable, Metboard will show moderate growth in its distribution for the year to
March 2004. This growth will be as a result of the ongoing, concerted letting
strategy that began in mid 2002.
Declaration of dividend and interest payments
Notice is hereby given of final dividend declaration number 13 of 0.0211 cents
per share and debenture interest payment number 13 of 21.1189 cents per
debenture for the period 1 October 2002 to 31 March 2003 ("the distribution").
The final distribution of 21.1400 cents per linked unit will be payable to
Metboard linked unit holders in accordance with the abbreviated timetable set
out below:
2003
Last date to trade "cum" the distribution Friday, 20 June
Linked units commence trading "ex" the distribution Monday, 23 June
Record date to participate in the distribution Friday, 27 June
Payment of the dividend and debenture interest Monday, 30 June
No dematerialisation or rematerialisation of linked unit certificates may take
place between Monday, 23 June 2003 and Friday, 27 June 2003, both days
inclusive.
By order of the board
C M Liebenberg
Secretary
6 June 2003
Metboard Properties Limited
Registered office: 100 Grayston Drive Sandown Sandton 2196
P O Box 78949 Sandton 2146
Transfer secretary: Computershare Investor Services Limited Reg no.
1958/003546/06
70 Marshall Street Marshalltown Johannesburg 2001
PO Box 1053 Johannesburg 2000
Sponsor: Investec Bank Limited registration no. 1969/004763/06
100 Grayston Drive Sandown Sandton 2196 P.O. Box 78979 Sandton 2146
Managed by Investec Property Group
Date: 05/06/2003 01:13:53 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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