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BONATLA PROPERTY HOLDINGS LIMITED - REVIEWED PROVISIONAL RESULTS FOR THE YEAR
ENDED 30 SEPTEMBER 2003
BONATLA PROPERTY HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1996/014533/06)
Share code: BNT ISIN: ZAE000013694
("Bonatla" or "the company")
REVIEWED PROVISIONAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2003
PROVISIONAL CONSOLIDATED INCOME STATEMENT
Reviewed Audited
2003 2002
R"000 R"000
Revenue 117,721 116,397
Operating costs -42,312 -37,540
Operating profit before 75,409 78,857
exceptional items:
Exceptional items:
- Fair value adjustment -12,711 -16,642
of investment properties
- Compensation for -8,000 -
cancellation of management
contract
Income from investments 1,400 1,180
Fair value adjustment of -14,574 -
interest rate swap
Finance charges -70,431 -67,511
Net loss before taxation -28,907 -4,116
Taxation (Note 2) -11,994 1,749
Net loss after taxation -40,901 -2,367
(Loss) / earnings per -21.89 -1.28
share (cents)
Headline (loss) / earnings -17.13 4.85
per share (cents)
Weighted average number of 186,811 194,686
shares ("000)
Fully diluted (loss) / -21.14 -1.19
earnings per share (cents)
Fully diluted headline -16.54 4.64
(loss) / earnings per
share (cents)
Diluted number of shares 193,478 194,686
("000)
Reconciliation of earnings
Net loss after taxation -40,901 -2,367
Net after tax adjustments:
Fair value adjustment to 8,898 11,649
properties
Headline (loss) / earnings -32,003 9,282
Adjusted for:
Debenture interest (after - 56
tax)
Fully diluted headline -32,003 9,338
(loss) / earnings
PROVISIONAL CONSOLIDATED BALANCE SHEET
Reviewed Audited
2003 2002
R"000 R"000
Investment properties 549,519 631,343
Deferred taxation - 7,123
Financial assets 7,896 8,277
Current Assets 6,073 3,076
Total assets 563,488 649,819
Shareholders" equity 126,173 169,752
Long-term borrowings - 456,885
Current liabilities 437,315 23,182
Total equity and 563,488 649,819
liabilities
PROVISIONAL CONSOLIDATED CASH FLOW STATEMENT
Reviewed Audited
2003 2002
R"000 R"000
R"000 R"000
Net cash flows from -18,870 8,608
operating activities
Cash generated from 62,262 77,882
operations
Interest received 1,400 1,180
Interest paid -70,431 -67,511
Dividends paid - -1,900
Taxation (paid) / -12,101 -1,043
refunded
Net cash (outflows) / 67,736 -7,190
flows from investing
activities
Net cash outflows from -50,074 -8,050
financing activities
(Decrease) / increase in -1,208 -6,632
cash and cash equivalents
PROVISIONAL CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Shares Convertib Distribu Total
Capital Premium to be le table R"000
R"000 R"000 issued Debenture reserve
R"000 s R"000
R000
Balance at 1 1,851 145,219 3,178 8,000 14,502 172,750
October 2001
Balance as 1,851 145,219 3,178 8,000 20,359 178,607
previously
stated
Fundamental - - - - -5,857 -5,857
error
Issue of shares - 1,300 - - - 1,300
net of expenses
Net loss for - - - - -2,367 -2,367
the year
Dividend paid - - - - -1,931 -1,931
Balance at 1 1,851 146,519 3,178 8,000 10,204 169,752
October 2002
Recovery of - - -2,678 - - -2,678
amounts
previously
expensed
Issue of share 3 497 -500 - - -
and share
premium
Net loss for - - - - -40,901 -40,901
the year
Balance at 30 1,854 147,016 - 8,000 -30,697 126,173
September 2003
Notes to the provisional financial statements for the year ended 30 September
2003:
1. Accounting Policies
Although the financial statements have been prepared on the basis that the
company will not continue as a going concern, the financial statements have been
prepared on the historical cost basis and in accordance with South African
Statements of Generally Accepted Accounting Practice. The accounting policies
are, in all material respects, consistent with the annual financial statements
for the year ended 30 September 2002. The company"s auditors, Grant Thornton,
have issued an unqualified review report on the results. Their report is
available for inspection at the company"s registered office.
It is anticipated that the final audited results of the group will be published
by April 25, 2004
Reviewed Audited
2003 2002
R"000 R"000
2. Taxation:
Current 2,360 -40
Deferred 9,634 2,020
Secondary - -231
taxation on
companies
11,994 1,749
The deferred taxation charge in the current year arises primarily from the
reversal of temporary differences on investment properties and tax losses no
longer available to be setoff against future taxable income.
3. Related party transactions
Further to the circular to shareholders which was tabled at the general meeting
held on Wednesday 6 August 2003, and where the shareholders approved all the
resolutions tabled, the following related party transactions were entered into:
3.1 Payment of commission for the sale of the property portfolio
A commission of R6,2 m was paid to Hightower Properties (Pty) Ltd which is a
wholly owned subsidiary of Globus Investments (Pty) Ltd (Globus) and a related
party by virtue of the fact that Primo Property Services (Pty) Ltd (Primo) is a
fellow subsidiary of Globus and Primo is the property administration manager of
the Bonatla portfolio.
3.2 Redemption of 8 000 000 unsecured convertible debentures
The 8 000 000 unsecured convertible debentures of R1 each were redeemed at par
(R8 m). The R8 m was paid to Globus which is a related party by virtue of the
fact that Primo is a subsidiary of Globus and Primo is the property
administration manager of the Bonatla portfolio.
3.3 Sale of Welkom Square to VKV Properties (Pty) Ltd (VKV) As approved at the
general meeting, the Welkom Square property was sold to VKV for R29,9 m. VKV is
a wholly owned subsidiary of Globus and a related party by virtue of the fact
that Primo is a fellow subsidiary of Globus and Primo is the property
administration manager of the Bonatla portfolio.
3.4 Primo Property Services (Pty) Ltd (Primo)
Primo is a subsidiary of Globus and is the property administration manager. It
receives a fee of 3% of gross revenue on Bonatla"s property portfolio.
3.5 Ixia Trading 532 (Pty) Ltd (Ixia)
Ixia is a private company incorporated in accordance with the laws applicable in
South Africa and has a number of directors who are also directors of Globus,
Primo and Hightower. Ixia acquired certain properties from the Bonatla
portfolio.
3.6 R8 m fee paid to Broll / Catalyst Property Asset Managers (Pty) Ltd (Broll)
The directors of Broll were also directors of Bonatla for part of the year.
Bonatla paid Broll an amount of R8 m for the termination of the asset management
agreement, which Bonatla was required to do in order to facilitate the sale of
the property portfolio.
4. Review of results
As a result of the strategic decision to dispose of the entire property
portfolio of the group, Bonatla entered into a disposal agreement with Momentum
Property Investments (Pty) Ltd (MPI) and Ixia Trading 532 (Pty) Ltd (Ixia).
(Shareholders are referred to the circular approved on August 6, 2003)
The financial results reflect the decision of the shareholders to cease trading,
which has resulted in certain exceptional costs being incurred:
4.1 Impairment of properties
The impairment of R12,7m arose from the revaluation of the properties downwards
from book value to the values achieved through the sales to MPI and Ixia.
4.2 Management contract cancellation fee
A cancellation fee amounting to R8 m was paid to Broll / Catalyst Property Asset
Managers (Pty) Ltd for the cancellation of the management contracts
entered into with Bonatla. The reason behind the payment of such fee was to
facilitate the disposal of the entire property portfolio.
4.3 Mark to market of interest rate swap agreement
In addition to the above costs, an exceptional item of R14,5 m has been recorded
which relates to the mark to market valuation of an interest rate swap
agreement entered into by the company in November 2002. This valuation is a
requirement in terms of AC 133.
In light of the above, notwithstanding a slight decrease in operating profit,
the impact of the abovementioned exceptional items resulted in an after tax loss
of
R40,9 m as against a loss of R2,36 m incurred in 2002.
A basic loss per share of 22 cents per share (2002: Loss of 1 cent per share)
was recorded and headline loss of 3 cents per share was incurred
(2002: Profit 8 cents per share).
5. Post balance sheet events
The following post balance sheet events are hereby brought to the shareholders
attention:
5.1 Transfer of property portfolio
All but 4 properties have been transferred to the purchasers.
A single property situated in Mafikeng relates to the MPI transaction and three
properties relate to the Ixia transaction.
5.2 Distribution to shareholders
A return of capital of R95,2 m (50 cents per share) was made to shareholders on
February 16, 2004.
It is the intention of the board, once the audited financial statements have
been published to advise shareholders of the proposed date of the annual general
meeting as well as provide further information relating to the affairs of the
company.
By order of the board
Johannesburg: 31 March 2003
Directors:
BJ van der Ross (Chairman) NG Vontas (Executive)
MH Brodie (Non-executive) SA Meltzer (Executive)
Registered office
6 Dale Lace Glades, Eastwood Street, Randpark Ridge
Sponsor
Imara Corporate Finance South Africa (Pty) Limited
Date: 01/04/2004 07:38:18 AM Produced by the JSE SENS Department
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