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Fairvest -
FAIRVEST PROPERTY HOLDINGS LIMITED
(Formerly Glocash Investments Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1998/005011/06)
Share code: FVT ISIN: ZAE000034658
("Fairvest" or "the group" or "the company")
REVIEWED RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2003
CONSOLIDATED INCOME STATEMENT
Reviewed Unaudited Audited
6 months 6 months Year
ended ended ended
31 March 31 March 30 September
2003 2002 2002
R"000 R"000 R"000
Revenue 28 622 21 026 46 110
Operating expenses (14 810) (6 767) (17 282)
Operating profit 13 812 14 259 28 828
Fair value adjustment
to investment properties - - 533
Loss on disposal of
interest in subsidiary (1 236) - -
Abnormal item -
AC 133 adjustment 17 214 - -
Impairment of loan (3 848) - -
Income from investments 10 - 355
Finance charges (15 639) (8 103) (18 991)
Profit before taxation 10 313 6 156 10 725
Taxation - - (949)
Profit attributable to linked unit holders 10 313 6 156 9 776
Distribution to linked unit holders - (6 150) (8 901)
Profit for the period 10 313 6 875
Earnings per linked unit before
distribution (cents) 8,90 6,26 9,95
Headline earnings per linked unit (cents) 13,29 6,43 9,06
Number of linked units in issue ("000) 115 879 98 263 98 263
Net asset value* 16,0 7,6 8,7
* Linked unit debentures not included
in NAV calculation as they will be redeemed.
Reconciliation between
net earnings and
headline earnings
Net profit per the
income statement 10 313 6 156 9 776
Headline earnings in
accordance with
Circular 7/2002
- Fair value adjustment
to investment properties - - (533)
- Loss on disposal of
interest in subsidiary 1 236 -
- Impairment of loan 3 848 - (3 600)
- Goodwill written off - 163 3 258
Headline earnings 15 397 6 319 8 901
As above 15 397 6 319 8 901
AC 133 Adjustment to linked
unit debentures (17 214) - -
Adjusted headline
(loss)/earnings (1 817) 6 319 8 901
CONSOLIDATED BALANCE SHEET
Reviewed Unaudited Audited
31 March 31 March 30 September
2003 2002 2002
R"000 R"000 R"000
Investment properties 284 730 235 976 307 856
Intangible assets - 2 678 -
Investments 9 916 10 225 9 916
Current assets 5 846 4 001 8 141
Total assets 300 492 252 880 325 913
Shareholders" equity 18 498 7 421 8 528
Linked unit debentures 114 761 103 536 105 728
Long-term borrowings 146 420 120 301 164 672
Current liabilities 20 813 21 622 46 985
Total equity and
liabilities 300 492 252 880 325 913
CONSOLIDATED CASH FLOW STATEMENT
Reviewed Unaudited Audited
6 months 6 months Year
ended ended ended
31 March 31 March 30 September
2003 2002 2002
R"000 R"000 R"000
Net cash flows from
operating activities (340) 6 744 481
- Cash generated from operations 15 808 14 847 25 467
- Interest received 10 - 355
- Finance charges (15 639) - (18 991)
- Mortgage bond interest paid - (6 968) -
- Debenture interest paid - (1 135) (6 191)
- Distribution to linked unit holders (519)
- Taxation paid - - (159)
Net cash outflows from investing activities 18 105 (243 360) (337 182)
Net cash outflows from financing activities (18 252) 238 267 329 298
Decrease in cash and cash equivalents (487) 1 651 (7 403)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Distributable
reserves/ Non-
Share Share (accumulated distributable
capital premium loss) reserve Total
R"000 R"000 R"000 R"000 R"000
Balance at
1 October 2001 881 - (168) 6 838 7 551
Write-off of
pre-acquisition losses - - 168 (168) -
Share consolidation
and par value
reduction (781) 682 - - (99)
Linked units issued 868 - - - 868
Linked units to be
cancelled 15 - - - 15
Listing and issue
costs written off - (682) - - (682)
Profit attributable to
linked unit holders - - 9 776 - 9 776
Distribution to linked
unit holders - - (8 901) - (8 901)
Balance 1 October 2002 983 - 875 6 670 8 528
Distribution to linked
unit holders (519) (519)
Net profit for the period - - 10 313 - 10 313
Linked units issued 176 - - - 176
Balance at
31 March 2003 1 159 - 10 669 6 670 18 498
COMMENTS IN RESPECT OF THE reviewed RESULTS OF FAIRVEST
Operating Activity
Despite an increase in turnover of 36,1% mainly due to additional properties
acquired, the operating profit decreased by 3,1% to R13,8 million.
After adjustment for AC133 for the fair value of the linked debentures based on
the certainty that the entire property portfolio will be disposed of in the very
near future and the debentures will therefore be redeemed, the profit for the
period amounted to R10,3 million which corresponds to headline earnings of 13,29
cents per linked unit versus an adjusted headline loss of 1,57 cents per linked
unit after excluding abnormal Items.
Finance Charges
Although the total debt ratio of the company remained unchanged at 56%,
finance charges have increased to R15,6 million due to the debt on additional
properties transferred and comparatively higher interest rates.
Property Portfolio
During the period under review the net annual rental income yield was 13,1%
with a total expense ratio of 34,8%. Vacancy levels of 19% prevailed although a
major increase in letting occurred at Kempton City, The Goodman Gallery building
in Rosebank and the Jozen Office building in Epson Downs. The latter properties
being transferred during the period.
Strategy
The linked unit holder value in Fairvest has not been reflected in the share
price due to a combination of high interest rates, an inadequate return from
certain properties and its capital structure.
The above criteria substantially determined the decision of the board to dispose
of the entire property portfolio to various parties in order to unlock maximum
linked unit holder value within the next four months.
Accounting Policies
Accounting policies adopted by the group are in accordance with the South
African Statements of Generally Accepted Accounting Practice and are consistent
with those of the previous year. The interim results were reviewed by the
company"s auditors, Grant Thornton Kessel Feinstein. Their review report is
available for inspection at the company"s registered office.
Dividend
No dividend distribution will be made in respect of the period under view.
Further Cautionary Announcement
Further to the cautionary announcement dated 2 May 2003, linked unit holders
are hereby advised that a detailed circular to linked unit holders regarding the
disposal of the company"s entire property portfolio is expected to be issued
during August 2003. Linked unit holders are advised to exercise caution when
dealing with Fairvest linked units shares until the circular to linked unit
holders has been published.
By order of the Board
N G Vontas
Director
Johannesburg
14 July 2003
Transfer Secretaries
Computershare Limited
70 Marshall Street
Johannesburg
2001
Company Secretary and Registered office
Corporate Covernance CC
Dale Lace Glades
Eastwood Street
Randpark Ridge
PO 279
Randpark Ridge 2156
Directors
RS Wilkinson (Chairman), NG Vontas (CEO) (Greek), NB Read (non-executive),
D Johnston (non-executive), AB Platt (non-executive),
T Botsis (non-executive), Z Sithole (non-executive)
Auditors: Sponsors:
GRANT THORNTON LPC MANHATTAN
KESSEL FEINSTEIN
Date: 14/07/2003 01:55:07 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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