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Allan Gray Property Trust - Audited results for the twelve months ended
30 September 2003 and distribution announcement
ALLAN GRAY PROPERTY TRUST
JSE Share code: GRY
ISIN Code: ZAE000013165
("GRAYPROP")
Audited results for the twelve months ended 30 September 2003 and
distribution announcement
BALANCE SHEET 2003 2002
(R000) (R000)
Assets
Non-current assets
Fixed properties 2 359 852 2 180 797
Current assets 410 087 392 418
Accounts receivable 42 076 23 183
Capital debtors 89 019 -
Cash and cash equivalents 278 992 369 235
Total assets 2 769 939 2 573 215
Unitholders" funds and liabilities
Unitholders" funds 2 358 446 2 168 559
Capital of the fund 1 757 354 1 757 354
Capital reserve 393 019 208 257
Revaluation reserve 208 055 193 335
Maintenance reserve - 9 597
Distributable reserve 18 16
Non-current liabilities 214 557 218 542
Interest-bearing liability 214 557 214 557
Deferred capital gains tax - 3 985
Current liabilities 196 936 186 114
Accounts payable 44 255 39 969
Taxation 4 674 -
Unitholders for distribution 148 007 146 145
Total unitholders" funds
and liabilities 2 769 939 2 573 215
INCOME STATEMENT 2003 2002
(R000) (R000)
Income 487 754 493 620
Rent income 441 931 468 033
Interest received 45 823 25 587
Expenditure 200 117 207 847
Property expenses 153 157 163 841
Audit fees 411 851
Interest paid 31 444 30 176
Administrative charges 802 -
Service charge 14 303 12 979
Distributable earnings 287 637 285 773
Accelerated maintenance expense (9 597) -
Capital items 199 482 (33 734)
Net realised surplus on disposal
of fixed properties 5 281 9 602
Net unrealised surplus/(deficit) on
revaluation of fixed properties 194 890 (39 351)
Taxation (689) (3 985)
Net profit 477 522 252 039
-
Net profit per unit (cents) 51.3 27.1
Headline earnings per unit (cents) 29.9 30.7
Distribution per unit (cents) 30.9 30.7
Interim distribution
per unit (cents) 15.0 15.0
Final distribution
per unit (cents) 15.9 15.7
Units in issue 930 857 895 930 857 895
Headline earnings reconciliation
Net profit 447 522 252 039
Less capital items (199 482) 33 734
Headline earnings 278 040 285 773
STATEMENT OF CHANGES IN UNITHOLDERS" FUNDS
2003 2002
(R000) (R000)
Capital of the fund
Balance at beginning of the year 1 757 354 1 607 548
Units issued during the year - 149 806
Balance at end of the year 1 757 354 1 757 354
Capital reserve
Balance at beginning of the year 208 257 110 884
Net surplus on disposal
of fixed properties 184 762 97 373
Balance at end of the year 393 019 208 257
Revaluation reserve
Balance at beginning of the year 193 335 324 442
Revaluation reserve realised
on sale of fixed properties (180 170) (87 771)
Revaluation of fixed properties 194 890 (43 336)
Balance at end of the year 208 055 193 335
Maintenance reserve
Balance at beginning of the year 9 597 9 597
Transfer to distributable reserves (9 597) -
Balance at end of the year - 9 597
Distributable reserves
Balance at beginning of the year 16 16
Net income for the year 477 522 252 039
Realised surplus on disposal
of fixed properties (4 592) (9 602)
Transfer (to)/from
revaluation reserve (194 890) 43 336
Transfer from maintenance reserve 9 597 -
Income distributions (287 635) (285 773)
Balance at end of the year 18 16
Total unitholders" funds 2 358 446 2 168 559
CASH FLOW STATEMENT
2003 2002
(R000) (R000)
Cash effects from operating activities
Cash generated from operations 263 661 290 571
Change in working capital (14 607) 1 283
Cash available from
operating activities 249 054 291 854
Interest received 45 823 25 587
Interest paid (31 444) (30 176)
Income distributions (285 773) (256 226)
(22 340) 31 039
Cash effects of investing activities
Additions to fixed properties (123 110) (229 260)
Net proceeds from disposal
of fixed properties 144 226 223 748
Increase in capital debtors (89 019) -
(67 903) (5 512)
Cash effects of financing activities
Units issued during the year - 149 806
- 149 806
Net (decrease)/increase in cash and
cash equivalents (90 243) 175 333
Cash and cash equivalents
at beginning of the year 369 235 193 902
Cash and cash equivalents
at end of the year 278 992 369 235
COMMENTS
Net distributable income
Allan Gray Property Trust"s net distributable income for the financial
year amounted to 30,9 cents per unit, marginally up on last year.
In the last six months of the year distributable income of 15,9 cents per
unit was 1,3 percent up on the corresponding period of 2002.
Restructure
With the introduction of the Collective Investments Schemes Control Act
of 2002, Grayprop, as required by the Act, has adopted, with effect from
1 April 2003, a new Trust Deed.
As envisaged in the 2002 Annual Report, the Trust is in the process of
taking transfer of all the properties from the Fixed Property Companies.
This is substantially complete, with the last three properties
anticipated to be transferred within the next month. While it will
trigger minimal capital gains tax in the Trust, Grayprop will be able in
future to sell properties without the burden of this tax. The net asset
value of the Trust will be protected in future accordingly and in
addition, savings in expenses will be able to be passed onto unitholders.
Two consequences of the restructure have been a program of value
enhancing accelerated planned maintenance spending due to the fact that
the maintenance reserve no longer enjoys preferential tax treatment, and
the cessation of the policy of capitalising interest on development
projects as the Trust now undertakes these on its own behalf and no
longer lends the funds to the fixed property companies to do so. This
latter has reduced distributions by approximately 0,4 cents per unit for
the current year and by approximately 1,0 cent per unit for the coming
year, but protects capital and enables it to be profitably invested to
improve long-term earnings.
3. Changes to portfolio
During the year the following properties were sold:
Property Net price Value
(R"000) (R"000)
Bruma Broadwalk 7 840 5 273
Robertson Spices 2 800 1 508
Stone Stamcor 2 400 2 005
La Lucia Ridge vacant land 2 374 3 655
Express House 898 517
Pittsburg Industrial Park 780 558
Game Bruma 22 000 19 652
Riverside Centre 13 800 10 071
Wynberg Mews 14 590 16 231
Melhof 1 457 1 049
Centurion Shopping Centre (25%) 63 287 67 676
The Northgate Dome 12 000 10 750
144 226 138 945
The major capital projects previously announced have all progressed
better than anticipated.
The sectoral spread of the portfolio, as independently valued at 30
September 2003, comprises the following:
Sector Value (Rm) cents/unit 2003 Forward EY 2002
Retail 1 595 171 67% 12,1% 65%
Office blocks 382 41 16% 13,5% 18%
Industrial 227 24 10% 16,0% 10%
Other 156 17 7% 11,3% 7%
Total property 2 360 253 100% 12,7% 100%
Long-term
Borrowings (215) (23)
Net current
Assets 213 23
2 358 253
The valuation is 8,7 percent higher than that of last year, largely as a
result of the improved retail valuations. The market rating of the
property portfolio in terms of the forward earnings yield has increased
marginally from 12,9 percent last year to 12,7 percent.
Subsequent to year-end, agreement has been reached to purchase MIFA
Industrial Park and The Boulders Shopping Centre in Midrand, for R36
million and R140 million respectively, to be settled with the issue of 65
185 186 Grayprop units at R2.70 each. Competition Board"s approval has
been obtained for the Park which is in the process of being transferred,
and is pending for The Boulders. Both properties are anticipated to give
a forward earnings yield of 14 percent.
Capital commitments at year-end were R167 million which will leave
uncommitted capital of R45 million.
Vacancy levels
Vacancy levels in terms of rentable area at 30 September were as follows
(percent):
Sector 2003 2002
Retail 5 5
Office blocks 10 13
Industrial 9 8
Other 0 0
Total 7 8
By value, the vacancies remained at 6 percent of potential rental income
over the past financial year.
In the retail sector 75 percent of the vacancies are contained in the
following properties:
- Northmead, where the redevelopment has been successfully completed
and the final elements are now being leased; and
- The Brightwater Commons (ex Randburg Waterfront), where the
redevelopment is underway to transform the centre into a family friendly
venue with increased traditional retail shopping and significantly
reduced reliance on restaurants and pubs. The first phase is complete and
substantially fully let. The remaining vacancies are concentrated in the
second phase, construction of which is commencing in 2004.
In the office sector significant vacancies by area and value remain at
Grayston Ridge and Rosebank Corner. Dunkeld Park has more recently
experienced significant vacancies. In addition, certain major leases in
the office portfolio expire in the first half of the new year and are not
going to be renewed. This could increase vacancy levels in the short-
term. However, during the current year leases for 22 percent of the area
were renewed and new leases concluded for 12 percent, reflecting
increased activity in this sector.
In the industrial sector demand has improved and some positive lettings
have occurred.
5. Prospects
Budgeted distributable income for 2004 is similar to that of 2003.
6. Audit Report
The results are prepared in accordance with South African Statements of
Generally Accepted Accounting Practice and on a basis consistent with
last year. The results for the year have been audited by KPMG Inc., and
their unqualified audit report is available for inspection at the Trust"s
registered office.
7. Distribution Announcement
Notice is hereby given of distribution no. 41 of 15,9 cents per unit for
the six months ended 30 September 2003.
The last date to trade cum the distribution will be Friday, 14 November
2003. The units of Grayprop will commence trading ex-distribution on
Monday, 17 November 2003 and the record date will be Friday, 21 November
2003. The distribution will be paid on Monday, 24 November 2003.
Unit certificates may not be dematerialised or rematerialised between
Monday, 17 November 2003 and Friday, 21 November 2003, both dates
inclusive.
BY ORDER OF THE BOARD
Allan Gray Property Trust Management Limited
(Reg No 1983/003324/06)
30 October 2003
Transfer Secretaries
Computershare Limited,
Investor Services Division
70 Marshall Street
Johannesburg
2001
Secretary and registered office
Broll Property Group (Proprietary) Limited
Broll House
27 Fricker Road, Illovo
Johannesburg, 2196
(PO Box 1455 Saxonwold, 2132)
Directors: WJC Mitchell (Chairman), JD Rainier (Managing), WT Fairhead, M
Herdman, WM Kirchmann, SP McCoy, DM Nurek,
E Osrin, S Shaw-Taylor
Sponsor: Standard Corporate and Merchant Bank (A division of The Standard
Bank of South Africa Limited) (Reg No 1962/000738/06)
e-mail: info@allangray.co.za website: www.allangray.co.za
Date: 30/10/2003 04:00:16 PM Produced by the JSE SENS Department
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