| Mon 30 Jun 2003, 16:00 | | Shops for Africa - Audited Final Results for the y |
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Shops for Africa Limited
(Registration number: 2000/018084/06)
Share code: SFA
ISIN: ZAE000031241
INCOME STATEMENT
14 months
ended
2003 30 Apr 2002
Notes R"000 R"000
Revenue 85 466 61 835
Operating expenses (35 906) (22 267)
Operating profit 49 560 39 568
Profit on sale of investment properties 587 -
Revaluation of investment properties 18 107 (2 503)
Operating profit 68 254 37 065
Interest income 1 150 631
Finance charges (31 728) (22 043)
Debenture interest (18 943) (18 156)
Net profit/(loss) before exceptional items
and taxation 18 733 (2 503)
Exceptional items 2 (326) (6 174)
Net profit/(loss) before taxation 18 407 (8 677)
Taxation (4 953) 172
Net profit/(loss) after taxation 13 454 (8 505)
Income from associate 1 084 -
Net profit/(loss) for the year 14 538 (8 505)
Earnings/(loss) per share (cents) 23.35 (15.55)
Headline earnings/(loss) per share (cents) 0.62 (11.45)
Headline earnings per linked unit (cents) 31.05 21.73
Distributions per linked unit (cents) 30.41 33.19
- interim 15.19 12.12
- final 15.22 21.07
Weighted average number of units 62 249 083 54 709 840
Units in issue 65 896 115 54 709 840
BALANCE SHEET
2003 2002
R"000 R"000
ASSETS
Investment properties 390 543 321 435
Investment in associate company 1 459 -
Deferred taxation - 263
Current assets 9 221 13 522
TOTAL ASSETS 401 223 335 220
EQUITY AND LIABILITIES
Share capital 659 547
Share premium 559 -
Distributable reserve/(accumulated loss) 5 267 (9 271)
Shareholders" interest/(deficit) 6 485 (8 724)
Linked debentures 164 081 136 227
Linked unit-holders" interest 170 566 127 503
Long-term borrowings 209 114 183 406
Deferred taxation 4 651 -
Current liabilities 16 892 24 311
TOTAL EQUITY AND LIABILITIES 401 223 335 220
CASH FLOW STATEMENT
14 months
ended
2003 30 Apr 2002
R"000 R"000
Net cash (outflows)/inflows from operating
activities (3 859) 9 321
Cash generated by operations 48 967 34 515
Interest received 1 150 631
Finance charges paid (33 110) (20 287)
Debenture interest paid (20 643) (5 538)
Taxation paid (223) -
Net cash flows from investing activities (50 414) (323 938)
Net cash flows from financing activities 48 639 325 014
(Decrease)/increase in cash and cash equivalents (5 634) 10 397
STATEMENT OF CHANGES IN EQUITY
Distributable
reserve/
Share Share (accumulated
capital premium loss) Total
R"000 R"000 R"000 R"000
Balance at 1 March 2001 - - (6) (6)
Shares issued 547 - - 547
Share issue expense - - (760) (760)
Net loss for the period - - (8 505) (8 505)
Balance at 30 April 2002 547 - (9 271) (8 724)
Balance at 1 May 2002 547 - (9 271) (8 724)
Shares issued 112 559 - 671
Net profit for the year - - 14 538 14 538
Balance at 30 April 2003 659 559 5 267 6 485
Notes to the financial statements for the year ended 30 April 2003
1. All accounting policies are consistent in all material respects with those
adopted in the previous financial period and are in accordance with South
African Statements of Generally Accepted Accounting Practice.
2. The following expenses are considered to be exceptional:
2003 2002
R"000 R"000
Debenture issue expenses and costs of raising
finance (701) (5 583)
Negative goodwill on acquisition of associate 375 -
Listing expenses - (591)
(326) (6 174)
3. Reconciliation of basic earnings/(loss) to headline
earnings/(loss)
Basic earnings/(loss) 14 538 (8 505)
(14 155) 2 240
Profit on sale of investment properties (587) -
Negative goodwill on acquisition of associate (375) -
(Increase)/decrease in valuation of investment
properties (18 107) 2 503
Tax effects of adjustments 4 914 (263)
Headline earnings/(loss) 383 (6 265)
REVIEW OF RESULTS
The results for the 2003 financial year reflect a challenging year for the
company due to the high interest rate environment as well as weak property
fundamentals.
The distribution of 30,41 cents per linked unit for the full year represents a
decline from the previous year. A large proportion of the decline was caused by
an increase in interest costs on long-term borrowings due to the higher interest
rates. This reduced distributions by 5,3 cents per unit. Other factors affecting
distributions were an increased spending on repairs and maintenance, provisions
for doubtful debts, and tenant installation costs and leasing commissions
associated with new lettings.
The distribution of 15,22 cents per unit for the last six months ended April
2003 is in line with that projected by the company at the interim stage.
The investment properties were revalued internally at the year-end resulting in
an increase of R18,1 million. A deferred taxation charge of R5,4 million was
raised at 30% of the revaluation in line with Generally Accepted Accounting
Practice. The revaluation contributed to increasing the net asset value per
linked unit from 233 cents to 259 cents. This increase in value, combined with
the sale of non-core assets and the Cleary Park acquisition, reduced the total
debt to total assets ratio from 61,9% to 57,5%.
Vacancies (as measured on a rental value basis) improved to 6,0% from 7,5% at
the interim stage which underlines the stronger performance of the portfolio in
the last six months.
These results have been audited by the company"s auditors, KPMG, and an audit
opinion is available for inspection at the company"s registered office (detailed
below) during office hours.
Portfolio Composition
The acquisition of Cleary Park Shopping Centre in Port Elizabeth was concluded
during the year for R52,6 million, payable 45% in cash and 55% in linked units
at an issue price of 255 cents per unit. The company also acquired a 50%
indirect interest in Portion 2 of Sammy Marks" Square. Subsequent to year-end,
the company announced the acquisition of Portion 3 of the same centre for R37
million. The company continues to seek similar acquisition opportunities in
order to further increase its asset base and market capitalisation, which should
increase tradability in its units.
The disposal of non-core assets has continued with the sale of Kruskal Avenue
for R2 million generating a profit of R527 493, and Dairy Mall for R2,2 million
resulting in a profit of R60 000. Station Bazaar has been sold subsequent to
year-end for R14 million, which is equivalent to its book value. The company is
actively seeking to sell the remaining non-core assets.
Subsequent to the above transactions, the portfolio will have been substantially
transformed into a portfolio of larger, well-located properties with a high
proportion of national tenants. The largest of these assets are:
Golden Walk, Germiston, Gauteng R127 million
Maynard Mall, Wynberg, Western Cape R89 million
Cleary Park, Port Elizabeth, Eastern Cape R58 million
Sammy Marks" Square Ptn 3, Pretoria, Gauteng R37 million
R311 million
Total portfolio value R414 million
Percentage of total portfolio 75%
Prospects
The directors expect strong distribution growth off the current base, mainly due
to the expected interest rate reductions over the next year.
The directors are considering fixing a large proportion of the interest rates on
long-term borrowings in order to lock in the current favourable rates, which
will have the effect of enhancing distributions and reducing volatility.
Distribution
Notice is hereby given of the final interest distribution of 15,22 cents per
Shops for Africa linked unit for the six months ended 30 April 2003.
Shops for Africa unit holders are advised that the last day to trade in Shops
for Africa units cum distribution will be Friday 18 July 2003 in order to be
recorded in the register as a Shops for Africa linked unit holder on Friday 25
July 2003, being the record date.
Shops for Africa linked units will trade ex distribution from Monday 21 July
2003.
Payment in respect of the distribution will be made on Monday, 28 July 2003
Linked units certificates may not be dematerialised or re-materialised between
Monday, 21 July 2003 and Friday, 25 July 2003, both days inclusive.
By order of the Board
B P MITCHELL
Company Secretary
Monday, 30 June 2003
Directors: I L Sturrock (Chairman), J D Broll, B T Kubheka, B P Mitchell*, W A
Botha* *Executive
Company secretary and registered office:
B P Mitchell CA (SA)
6th Floor, Protea Place
Protea Road, Claremont 7700
Transfer secretaries:
Computershare Investor Services Limited
(Company Registration number 1958/003546/06)
70 Marshall Street, Johannesburg 2001
Asset managers
Catalyst Asset Managers
Sponsor
Sasfin Corporate Finance
