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Hyprop Interim results -
Hyprop Investments Limited
(Registration number 1987/005284/06) Share code HYP ISIN code ZAE 000003430
* headline earnings per combined unit up 5%
* distribution per combined unit up 2%
GROUP INCOME STATEMENT
30 Jun 30 Jun 31 Dec
2003 2002 2002
Note R000 R000 R000
Turnover 135 837 66 785 160 653
Operating income 84 096 42 234 105 598
Finance charges (14 043) (6 680) (16 418)
Interest received 309 18 498
Interest paid (14 352) (6 698) (16 916)
Net operating income 70 053 35 554 89 180
Change in fair value of
investment property - 15 876 43 911
Income before debenture
interest and taxation 70 053 51 430 133 091
Debenture interest paid 1 (57 829) (41 150) (83 967)
Income before taxation 12 224 10 280 49 124
Taxation (14) (2 391) (6 607)
Secondary tax on companies (14) (10) (21)
Deferred taxation - (2 381) (6 586)
Net income after taxation 12 210 7 889 42 517
Minority interest (10 563) - (17 054)
Loss on disposal of fixed
Asset (30) - -
(Loss)/income from associates (84) 5 729 (268)
Net profit for the period 1 533 13 618 25 195
EARNINGS AND HEADLINE EARNINGS PER COMBINED UNIT
Earnings per combined unit
(cents) 66,69 84,62 168,67
Headline earnings per combined
unit (cents) 66,73 63,77 129,76
Reconciliation - headline earnings
Net profit for the period 1 533 13 618 25 195
Headline earnings adjustment 30 (13 495) (25 184)
Change in fair value of investment property
(net of deferred taxation) - (13 495) (37 325)
Loss on disposal of fixed
Asset 30 - -
Attributable to minority
Interest - - 12 141
Headline earnings - share 1 563 123 11
Debenture interest paid 57 829 41 150 83 967
Headline earnings -
combined unit 59 392 41 273 83 978
Total combined units
in issue 89 009 179 64 719 478 64 719 478
Total Interest Dividends
Distribution on on
per combined deben- ordinary
unit tures shares
Note (cents (cents (cents
1 Distribution details per unit) per unit) per unit)
Distribution number 31
for the six months
ended 30 June 2003 65,100 64,970 0,130
Distribution number 31
for the six months
ended 30 June 2003 65,100 64,970 0,130
Total distribution for
the year ended
31 December 2002 130,000 129,740 0,260
Distribution number 30
for the six months
ended 31 December 2002 66,290 66,157 0,133
Distribution number 29
for the six months
ended 30 June 2002 63,710 63,583 0,127
ABRIDGED GROUP CASH FLOW STATEMENT
30 Jun 30 Jun 31 Dec
2003 2002 2002
R000 R000 R000
Cash generated from (absorbed by)
operating activities 22 039 (12 549) (13 801)
Cash generated from
Operations 89 671 48 941 103 199
Interest income 309 18 498
Finance charges (14 352) (6 698) (16 916)
Distribution to combined
Unitholders (42 903) (54 792) (96 024)
Cash distributed to
Minorities (10 676) - (4 529)
Taxation (10) (18) (29)
Cash flow from investing
Activities (102 190) (3 194) (58 899)
Cash flow from financing
Activities 78 086 10 682 69 958
Net decrease in cash and
cash equivalents (2 065) (5 061) (2 742)
Cash and cash equivalents at
beginning of the year 3 246 4 732 4 732
On acqusition of business - - 1 256
Cash and cash equivalents at
end of the period 1 181 (329) 3 246
GROUP BALANCE SHEET
30 Jun 30 Jun 31 Dec
2003 2002 2002
R000 R000 R000
Assets
Non-current assets 1 470 808 888 837 1 116 027
Tangible fixed assets 1 470 017 887 802 1 115 481
Financial assets 791 1 035 546
Current assets 11 609 3 078 7 352
Trade and other receivables 10 428 3 078 4 106
Cash and cash equivalents 1 181 - 3 246
Total assets 1 482 417 891 915 1 123 379
Equity and liabilities
Equity 421 711 249 254 420 165
Share capital and reserves 262 405 249 254 260 746
Minority interest 159 306 - 159 419
Non-current liabilities 974 646 584 352 647 832
Debentures 438 815 319 067 319 067
Debenture premium 273 887 144 690 144 981
Deferred taxation 6 587 2 381 6 586
Long-term liabilities 255 357 118 214 177 198
Current liabilities 86 060 58 309 55 382
Trade and other payables 28 100 16 736 12 468
Taxation 15 11 11
Combined unitholders for
Distribution 57 945 41 233 42 903
Bank overdraft - 329 -
Total equity and
liabilities 1 482 417 891 915 1 123 379
Net asset value per
combined unit (R) 10,96 11,02 11,20
GROUP STATEMENT OF CHANGES IN EQUITY
Non-
distribu- Reva-
Share table luation Retained
Capital reserve reserve income Total
R000 R000 R000 R000 R000
Balance at 1
January 2002 648 9 050 220 417 5 604 235 719
Net profit for
the year 25 195 25 195
Transfer to
revaluation reserve
(net of deferred
taxation) 25 184 (25 184) -
Dividends (168) (168)
Balance at 31
December 2002 648 9 050 245 601 5 447 260 746
Balance at 1
January 2003 648 9 050 245 601 5 447 260 746
Issue of ordinary
share capital
for the period 242 242
Transfer from
revaluation reserve
(net of deferred
taxation) 807 (807) -
Net profit for
the period 1 533 1 533
Dividends (116) (116)
Balance at 30
June 2003 890 9 050 246 408 6 057 262 405
COMMENTS
Basis of preparation
The unaudited interim financial statements have been prepared in accordance with
South African Statements of Generally Accepted Accounting Practice. The
accounting policies used in the preparation of these unaudited interim financial
statements are consistent with those used in the audited financial statements
for the year ended 31 December 2002. The comparative turnover in respect of the
period ended 30 June 2002 has been restated to include expense recoveries and to
exclude interest received to comply with the change in accounting policies as at
31 December 2002.
Review opinion
Grant Thornton Kessel Feinstein has reviewed the financial information set out
in this report and their unqualified review report is available for inspection
at the company"s registered office.
Introduction
The directors of Hyprop are pleased to report that the company has continued to
produce sustained earnings growth to its combined unitholders. Headline earnings
to combined unitholders of 66,73 cents per combined unit for the six-month
period ended 30 June 2003 (" the period") increased by 5% over the previous
comparative period.
Turnover and operating income for the period increased by 103% and 99%
respectively, compared with the previous period ended 30 June 2002, due mainly
to the significant expansion of Hyprop"s property portfolio.
Distribution
The board has approved an interim distribution of 65,10 (2002: 63,71) cents per
combined unit, 2% higher than the distribution for the previous comparative
period.
Acquisitions
Canal Walk Shopping Centre ("Canal Walk")
As announced on 4 July 2003, Hyprop has concluded an agreement with Canal Walk
Limited to acquire Canal Walk for a purchase consideration of R1,16 billion,
payable in cash on transfer of the property. Western Cape-based Canal Walk is
regarded as a premium rated super regional shopping centre with strong growth
prospects. The acquisition will enhance the quality, size and diversification of
Hyprop"s portfolio of prime retail and office investments.
In accordance with Hyprop"s right under the acquisition agreement to nominate
third parties to acquire a portion of the property, Ellerine Bros (Proprietary)
Limited will acquire a 20% undivided share in Canal Walk with Hyprop retaining
the remaining 80% undivided share.
The transaction is subject to suspensive conditions and further announcements
containing details of the acquisition including financial effects and salient
dates and times will be published in due course. Combined unitholders are
referred to the further cautionary announcement dated 15 August 2003 and are
advised to continue to exercise caution in their trading in Hyprop combined
units until further announcements are made.
The Rosebank Mall and JHI House ("The Mall")
The acquisition of The Mall from The Rosebank Mall (Proprietary) Limited with
effect from 1 January 2003 is expected to yield 13% in the first year. Transfer
of The Mall into the name of Hyprop was registered on 25 April 2003. The net
consideration was settled as follows:
* the issue of 24 289 701 Hyprop combined units at a price of R10,25 per
combined unit; and
* a cash payment of R50,1 million.
The Grace Hotel and Offices ("The Grace")
Hyprop acquired The Grace from Gallagher Estate Holdings Limited for a purchase
consideration of R32,0 million. The purchase consideration was paid in cash on
30 May 2003, the transfer date, and was funded out of existing loan facilities.
The Grace, consisting of 75 hotel rooms and 3 278 m2 of offices, is well
positioned in Rosebank adjacent to The Mall and is expected to generate an
initial yield of 15%.
Developments
Hyde Park Corner Shopping Centre ("Hyde Park")
During the period, a Clicks store was completed at a cost of R2,2 million and
construction of a Stuttafords store commenced at an estimated cost of R12,3
million in the area previously occupied by the IMAX theatre.
The board has approved a 1 700 m2 extension to Woolworths and the construction
of an adjacent two level parking garage at an estimated cost of R30 million for
completion in January 2004.
Borrowings
At 30 June 2003 Hyprop"s borrowings amounted to R255,4 million equating to a 19%
debt-to-open market value ratio after accounting for the minority interest in
The Glen Shopping Centre. Hyprop"s borrowings have been hedged to the extent of
61% against short-term interest rate fluctuations for periods ranging from two
to four years.
Property portfolio
The segmental spread of the property portfolio at 30 June 2003 was as follows:
Operating income
Business Rentable before finance
Segment Value area charges
(Rm) (m2) (Rm)
Retail:
Hyde Park 388 880 34 357 20 025
The Glen * 161 823 22 445 10 771
The Mall 239 790 33 086 16 017
Subtotal 790 493 89 888 46 813
Commercial 504 660 105 767 32 573
Total 1 295 153 195 655 79 386
after deducting the minority interest
The directors consider the investment properties at 30 June 2003 to be fairly
valued. An independent valuation of the total portfolio will be undertaken for
the year ending 31 December 2003.
Letting activities
Letting activities for the period by rentable area were as follows:
Business Tenants
Segment Renewals New lettings vacated
(m2) (%) (m2) (%) (m2) (%)
Retail:
Hyde Park 598 0,3 1 198 0,6 449 0,2
The Glen 1 959 1,0 - - 144 0,1
The Mall 460 0,2 518 0,3 926 0,5
Subtotal 3 017 1,5 1 716 0,9 1 519 0,8
Commercial 7 877 4,0 3 984 2,0 2 329 1,2
Total 10 894 5,5 5 700 2,9 3 848 2,0
Vacancies by rentable area at 30 June 2003 were as follows:
Business
Segment 30 June 2003 31 December 2002
(m2) (%) (m2) (%)
Retail:
Hyde Park 65 0,0 61 0,1
The Glen 372 0,2 169 0,1
The Mall 1 319 0,7 n/a n/a
Subtotal 1 756 0,9 230 0,2
Commercial 11 551 5,9 12 246 8,6
Total 13 307 6,8 12 476 8,8
The vacancies equate to 5% of potential rental income, compared with 6% at 31
December 2002. No significant vacancies were experienced in the retail sector,
however the demand for office space remains under pressure with a resultant
slower take-up. The portfolio has a reasonable lease expiry profile of 17% by
area for the next twelve months, which is evenly spread between retail and
commercial.
Board appointment
LI Weil was appointed to the board as a non-executive director on 2 June 2003.
Prospects
The board anticipates that the growth in distributions for the 2003 financial
year will approximate that achieved for the period.
Payment of debenture interest and dividend
Combined unitholders will receive debenture interest payment number 31 of 64,97
cents per debenture and dividend payment number 31 of 0,13 cents per share for
the period. The distribution amounts to 65,10 cents per combined unit. The last
day to trade cum distribution will be Friday, 5 September 2003. The combined
units will trade ex distribution from Monday, 8 September 2003. The record date
will be Friday, 12 September 2003 and the payment date will be Monday, 15
September 2003. Combined unitholders may not dematerialise or rematerialise
their combined units between Monday, 8 September 2003 and Friday, 12 September
2003, both days inclusive.
On behalf of the board
PF Kirchmann PG Prinsloo
Chairman Managing Director
18 August 2003
Registered office
Hyde Park Corner Shopping Centre Jan Smuts Avenue Sandton 2196 PO Box 41257
Craighall 2024
Transfer secretaries
Computershare Limited 9th Floor 70 Marshall Street PO Box 1053
Johannesburg 2000
Directors
PF Kirchmann* (Chairman) PG Prinsloo (Managing Director) MS Aitken* J Bentel*
WE Cesman* S Shaw-Taylor*
PJ Thurling* M Wainer* SV Webb* LI Weil* PL Whewell*
*Non-executive directors
Date: 19/08/2003 11:29:42 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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