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Paramount Property Fund Limited -
PARAMOUNT PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(REG. NO.1945/019928/06)
Share code PRA ISIN ZAE000028577
INTERIM REPORT FOR THE 6 MONTHS ENDED 30 APRIL 2003
DIRECTORS:
A D Dalling (Chairman)*, R C Squire - Howe (Managing), J A Bester*, H N
Coertze*, F J Jenkings, B H Kerswill, A A Maresky, J R Millar*, A D P
Ovenstone*, G P Phillips*, E G Raubenheimer*, R S Schur*, R J Whiteford*.
* Non-executive
The consolidated unaudited results of the group for the 6 months ended 30 April
2003 are as follows:
Unaudited Unaudited Audited
April 2003 April 2002 October 2002
Notes R"000 R"000 R"000
Consolidated Income Statement
Revenue 54,343 39,964 87,340
Trading Income 44,022 32,565 68,513
Interest received 237 65 335
Revaluation of investment
properties - - 1,321
Less - depreciation (195) (216) (390)
Less - interest paid on
borrowings (36,122) (22,161) (50,884)
Income before taxation 7,942 10,253 18,895
Taxation 258 (769) 171
Income before distribution 8,200 9,484 19,066
Distribution to unitholders (8,170) (7,689) (18,001)
Retained income 30 1,795 1,065
Linked Units in issue
("000) 1 34,043 19,164 22,512
Weighted Average Linked
Units in issue ("000) 34,043 19,164 20,418
Earnings per unit (cents) 24.1 49.5 93.3
Headline earnings per
unit (cents) 24.1 49.5 87.8
Distribution per unit 24.0 41.0 86.4
Abridged Consolidated Balance Sheet
Total combined unit
holders funds 163,684 92,693 108,340
B debentures 1 133,235 96,464 129,937
Long term borrowings 521,831 287,247 408,543
Deferred taxation - 29 -
Vendor payments due 1,117 91,583 -
Unitholders for
distribution 4,085 4,024 5,493
Current liabilities 9,981 5,856 4,992
Capital employed 833,933 577,896 657,305
Fixed assets 825,492 567,351 649,390
Deferred taxation 478 - 219
Current assets 7,963 10,545 7,696
Total employment of capital 833,933 577,896 657,305
Abridged Consolidated Cash Flow Statement
Net profit for the period 7,942 10,253 18,895
Adjustments for:
Interest received (237) (65) (335)
Interest paid 36,122 22,161 50,884
Revaluation of investment
properties - - (1,321)
Surplus on disposal
of properties - - (515)
Depreciation 195 216 390
Operating profit
before working
capital changes 44,022 32,565 67,998
Working capital changes 6,373 (3,294) (5,315)
Cash generated from
operations 50,395 29,271 62,683
Interest received 237 65 335
Interest paid - external (36,122) (22,161) (50,884)
Interest paid - debentures (9,578) (10,928) (19,771)
Taxation paid - - (271)
Net cash inflow from
operating activities 4,932 (3,753) (7,908)
Net cash inflow from
financing activities 113,288 158,521 190,284
Net cash inflow from
capital raising activities 58,612 34,088 83,938
Cash outflow from investing
activities (176,297) (191,503) (266,796)
535 (2,647) (482)
Cash and cash equivalents
at the beginning of the period 118 600 600
Cash and cash equivalents
at the end of the period 653 (2,047) 118
Statement of changes in equity
Non-
Share Share distributable Accumulated A linked Total
capital Premium reserves Profit/(Loss) Sub total Units Unitholders
Balance
at
31/10/2001 1,210 2,142 45 (2,202 ) 1,195 54,469 55,664
Increase
in share
capital 1,041 1,041 1,041
Net
increase
in share
premium 3,736 3,736 3,736
Issue
of A
debentures 0 46,834 46,834
Surplus to
31/10/2002 1,065 1,065 1,065
Balance at
31/10 /2002 2,251 5,878 45 (1,137) 7,037 101,303 108,340
Increase
in share
capital 1,154 1,154 1,154
Net
increase
in share
premium 2,226 2,226 2,226
Issue of
A debentures 0 51,934 51,934
Surplus to
30/4/2003 30 30 30
Balance at
30/04/2003 3,405 8,104 45 (1,107) 10,447 153,237 163,684
Capital Expenditure
The company has no capital commitments at 30 April 2003.
Notes:
1.The B debentures are convertible into linked units in 5 equal tranches
commencing in the financial year after their issue. The converted linked units
participate in all income from 1 November each year.
5 993 465 B debentures converted into linked units with effect from 1
November 2002.
COMMENTS
RESULTS
The results for the 6 months to 30 April 2003 reflect the tough conditions being
experienced in the property letting market. As advised previously, net rental
income from the properties is lower than last year, due to lower rentals and two
significant vacancies. We have maintained the 2nd quarter distribution at 12c,
which is in line with the 1st quarter.
Paramount"s fundamentals are very sound, and in last year"s Investment Property
Databank"s ("IPD") analysis of South Africa"s major institutional and listed
property portfolios the performance of Paramount"s underlying property portfolio
was ranked 3rd out of 17 portfolios. IPD is an independent property-rating
agency, which undertakes in-depth analysis of property performance in 19
countries internationally. This ranking reflects Paramount"s high quality
properties and sound management.
Of the two significant vacancies, which total 11 000m, we have already relet 7
000m with rentals commencing from June / July, and we are concentrating our
efforts on letting the remaining space. Despite these vacancies, Paramount"s
vacancy ratio is currently 4,3%, which is an excellent ratio by any comparison.
We have also recently restructured our borrowings, unwinding some of our
previous fixed-rate loans and entering into new five-year fixed-rate contracts
at more favorable rates. This will result in savings on interest expense in the
future.
Our strategy going forward is to grow the fund significantly, and in line with
this we are currently involved in discussions on the acquisition of several
properties.
The benefits of the above changes, and the implementation of our strategy,
should result in a growth in distributions in our next financial year.
ACCOUNTING POLICIES
The results to 30 April 2003 have been prepared on a basis consistent with the
accounting policies set out in the last Annual Financial Statements and in
accordance with South African Statements of Generally Accepted Accounting
Practice.
DECLARATION OF DISTRIBUTION
Notice is hereby given that the board of directors has declared a quarterly
interest distribution of 12 cents per linked unit in respect of the quarter
ended 30 April 2003.
The last day to trade cum distribution will be Friday, 4 July 2003. The linked
units will commence trading ex distribution as from Monday, 7 July 2003 and the
record date will be Friday, 11 July 2003. The distribution will be paid on
Monday, 14 July 2003.
Linked unit certificates may not be dematerialised or rematerialised between
Monday, 7 July 2003 and Friday, 11 July 2003, both days inclusive.
BY ORDER OF THE BOARD
SPIRE PROPERTY SERVICES (PTY) LTD CAPE TOWN
SECRETARIES 17 June 2003
Registered office Transfer Secretaries
Tannery Park Computershare Investor Services Limited
23 Belmont Road Ground Floor
Rondebosch 7700 70 Marshall Street
Johannesburg 2001
P O Box 155 P O Box 61051
Rondebosch 7701 Marshalltown 2107
Date: 17/06/2003 10:43:35 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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