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Premium - Unaudited results of the group for the six months ended 31 August 2003
PREMIUM PROPERTIES LIMITED
and its subsidiaries
("Premium" or "the company")
Incorporated in the Republic of South Africa
Registration number: 1994/003601/06
Share code: PMM
ISIN: ZAE000009254
- HEADLINE EARNINGS PER LINKED UNIT UP BY 24,1%
- DISTRIBUTION PER LINKED UNIT UP BY 23,8%
NOTICE TO LINKED UNITHOLDERS
The directors report the unaudited results of the group for the six months ended
31 August 2003 set out below, together with comparisons with the results for the
corresponding period in 2002 and the year ended 28 February 2003.
CONSOLIDATED INCOME STATEMENT
6 months 6 months Year to
31 Aug 31 Aug 28 Feb
% 2003 2002 2003
change R"000 R"000 R"000
Turnover (rental income) 14,6 53 312 46 520 96 799
Net rental from
properties 19,7 35 376 29 548 63 333
Interest received 427 284 760
Income from associate 700 509 3 228
Fair value adjustment
- investment
properties - - 34 037
Impairment loss - - (3 996)
Capital (loss)/profit
on disposal of
investment properties (6) 141 151
36 497 30 482 97 513
Interest paid 19,0 20 023 16 832 35 034
Depreciation 303 252 747
Profit before debenture
interest 20,7 16 171 13 398 61 732
Debenture interest 23,8 15 960 12 891 29 150
Profit before taxation 211 507 32 582
Taxation 10 226 4 406
Profit attributable to
ordinary shareholders 201 281 28 176
ABRIDGED CONSOLIDATED BALANCE SHEET
31 Aug 28 Feb
2003 2003
R"000 R"000
ASSETS
Non-current assets
Investment properties 550 234 526 828
Property, plant and equipment 17 918 18 215
Investments - associated company 11 926 11 227
Current assets 8 134 6 081
Total assets 588 212 562 351
EQUITY AND LIABILITIES
Share capital 996 996
Non-distributable reserve 80 141 80 147
Retained profit 1 327 1 200
Ordinary shareholders" interest 82 464 82 343
Debentures 167 510 167 510
Linked unitholders" interest 249 974 249 853
Interest-bearing borrowings 285 406 256 912
Deferred taxation 4 389 4 389
Current liabilities
- interest-bearing 11 936 13 213
- non-interest-bearing 36 507 37 984
Total equity and liabilities 588 212 562 351
STATEMENT OF CHANGES IN EQUITY
Revalu- Distribu-
Share Capital ation table
capital reserve reserve reserve Total
R"000 R"000 R"000 R"000 R"000
Balance at
1 March 2002 996 8 313 44 584 413 54 306
Profit attributable
to ordinary
shareholders - - - 28 176 28 176
Dividends paid - - - (139) (139)
Transfer to
non-distributable
reserve - 63 27 187 (27 250) -
Balance at
1 March 2003 996 8 376 71 771 1 200 82 343
Profit attributable
to ordinary
shareholders - - - 201 201
Dividends - - - (80) (80)
Transfer to
non-distributable
reserve - (6) - 6 -
Balance at
31 August 2003 996 8 370 71 771 1 327 82 464
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
6 months 6 months Year to
31 Aug 31 Aug 28 Feb
2003 2002 2003
R"000 R"000 R"000
Cash flow from
operating activities
Net rental income from
properties 35 073 29 296 62 586
Adjustment for:
- Depreciation 303 252 747
- Working capital changes (3 943) 3 359 4 498
Cash generated from operations 31 433 32 907 67 831
Investment income 1 127 793 3 988
Finance costs (20 023) (16 832) (35 034)
Taxation paid (82) (353) (702)
Distribution to linked
unitholders paid (16 338) (14 446) (27 397)
Net cash (outflow)/inflow
from operating activities (3 883) 2 069 8 686
Cash flow from investing
activities
Investing activities (23 517) (22 183) (44 175)
Proceeds from disposal of
investment properties 100 1 610 1 460
Net cash outflow used
in investing activities (23 417) (20 573) (42 715)
Cash flow from
financing activities 26 518 19 589 33 346
Net increase in cash
and cash equivalents (782) 1 085 (683)
Cash and cash equivalents
at beginning of year 2 042 2 725 2 725
Cash and cash equivalents
at end of year 1 260 3 810 2 042
RECONCILIATION of HEADLINE EARNINGS TO EARNINGS PER LINKED UNIT
6 months 6 months Year to
31 Aug 31 Aug 28 Feb
2003 2002 2003
R"000 R"000 R"000
Headline earnings per
linked unit 16,23 13,08 29,92
Fair value adjustment
of investment properties - - 32,28
Capital (loss)/profit
on disposal of investment
properties (0,01) 0,14 0,16
Deferred capital gains
tax - fair value adjustment - - (4,82)
Earnings per linked unit 16,22 13,22 57,54
SUPPLEMENTARY INFORMATION
6 months 6 months Year to
31 Aug 31 Aug 28 Feb
% 2003 2002 2003
change R"000 R"000 R"000
Earnings per linked
unit (cents)
(basic and diluted) 16,22 13,22 57,54
Headline earnings
per linked unit
(cents) (basic and
diluted) 16,23 13,08 29,92
Distribution per
linked unit (cents)
Dividends 0,08 0,06 0,14
Interest 16,02 12,94 29,26
Total 23,8 16,10 13,00 29,40
Linked units in issue 99 624 992 99 624 992
Net asset value per
linked unit (cents) 251 251
NOTES
1. The same accounting policies and methods of computation were followed as in
the financial statements of 28 February 2003 and are in accordance with South
African Statements of Generally Accepted Accounting Practice.
2.The company has committed an amount of R14,1 million in respect of capital
expenditure relating to the improvement of certain properties. These
improvements will be financed by way of existing facilities as well as
additional funding from the company"s bankers.
3. Capital expenditure during the year amounted to R23,5 million. Adequate
arrangements have been made to finance this capital expenditure.
4. Guarantees amounting to approximately R2 million have been issued to the City
of Tshwane Metropolitan Municipality in respect of electricity deposits for
various subsidiaries.
5. The company has bound itself as surety in favour of Nedbank Limited, in
respect of loans granted to an associated company, IPS Investments (Pty)
Limited, which at year-end amounted to R23,8 million.
6. In terms of AC135 the company values its investment properties annually. A
valuation of the total portfolio will be undertaken for the year ending 29
February 2004.
COMMENTS
1. REVIEW OF RESULTS
The directors of Premium are pleased to report that the company has continued to
produce sustained growth in earnings to its linked unitholders. Headline
earnings per linked unit for the six-month period ended 31 August 2003, amounted
to 16,23 cents (2002: 13,08 cents), an increase of 24,1% over the previous
comparative period. Turnover and net rental income increased by 14,6% and 19,7%,
respectively, compared with the previous six-month period ended 31 August 2002.
The interim distribution of 16,10 cents per linked unit (2002: 13,00 cents)
represents an increase of 23,8% on that paid in the previous corresponding
period.
The above average performance was achieved as a result of an increase in demand
for quality Pretoria CBD office, residential and retail space, the continued
focus on tenant retention, the refurbishment of a number of properties and the
conversion of office blocks into residential accommodation.
2. PROPERTY PORTFOLIO
During the period under review five properties were acquired for a total
purchase consideration of R12,9 million. These properties are strategically
situated in the Pretoria CBD and the purchase is in line with management"s
objective of acquiring properties to further enchance the quality of the
existing portfolio. An amount of R10,5 million was spent on the renovation of
properties and the conversion of office blocks to residential accommodation. The
current vacancy factor is 7% of total potential rental income (28 February 2003:
7%).
3. BORROWINGS AND INTEREST RATE MANAGEMENT
The total cost of funding is currently 12,74%, and 45% of the borrowings at 31
August 2003 are fixed. Management continues to further manage the exposure
against interest rate fluctuations.
4. PROSPECTS
The company will continue to focus on its renovation programmes as well as its
conversion of office blocks into residential accommodation. This, coupled with
the increased demand for Pretoria CBD space as well as the recent reductions in
interest rates, will further enhance the company"s performance.
The directors expect that the distributable income for the period 1 September
2003 to 29 February 2004 will not be less than the current distribution of 16,1
cents. The company"s auditors, Grant Thornton Kessel Feinstein, have examined
and reviewed the basis and assumptions underlying the forecast above. A copy of
their report is available for inspection.
DECLARATION OF DIVIDEND NO 19 AND INTEREST PAYMENTS ("THE DISTRIBUTION")
Notice is hereby given that dividend No 19 of 0,08 cents (2002: 0,06 cents) per
ordinary share has been declared together with interest for the period 1 March
2003 to 31 August 2003 of 16,02 cents (2002: 12,94 cents) per debenture payable
to linked unitholders recorded in the register on Friday, 7 November 2003. The
last date to trade "cum" distribution is Friday, 31 October 2003. The units will
commence trading "ex" distribution on Monday, 3 November 2003. Payment date will
be Monday, 10 November 2003. No dematerialisation or rematerialisation of linked
unit certificates may take place between Monday, 3 November 2003 and Friday, 7
November 2003, both days inclusive.
By order of the Board
City Property Administration (Proprietary) Limited
16 October 2003
A Wapnick JP Wapnick
Chairman Managing director
Directors: A Wapnick (Chairman), JP Wapnick (Managing director), MJ Holmes, RJ
Inggs, MZ Pollack, S Wapnick
Registered Office: Downies Building, 373 Proes Street, Pretoria 0002 PO Box
15, Pretoria 0001
Tel: (012) 326 8811 Fax: (012) 325 2209
Transfer Secretaries: Computershare Limited (Reg No 1958/003546/06), 70 Marshall
Street, Johannesburg 2001 PO Box 61051, Marshalltown 2107. Tel: (011) 370
7700 Fax: (011) 688 7712
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