| Wed 21 Apr 2004, 9:00 | | Results Of The Group For The Year Ended 29 Feb 04 |
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Premium Properties Limited - Reviewed Results Of The Group For The Year Ended 29
Release Date: 21/04/2004 07:21:01 Code(s): PMM
Premium Properties Limited - Reviewed Results Of The Group For The Year Ended 29
February 2004
Premium Properties Limited
and its subsidiaries
Incorporated in the Republic of South Africa
Registration number: 1994/003601/06
Share code: PMM
ISIN number: ZAE000009254
REVIEWED RESULTS OF THE GROUP FOR THE YEAR ENDED 29 FEBRUARY 2004
Notice to linked unitholders
The directors report the reviewed results of the group for the year ended 29
February 2004 set out below, together with comparisons with the results for the
corresponding year ended 28 February 2003.
("Premium" or "the group" or "the company")
- Distribution per linked unit up by 29,2%
CONSOLIDATED INCOME STATEMENT
Reviewed Audited
Year to Year to
29 Feb 28 Feb
% 2004 2003
change R"000 R"000
Turnover (rental income) 13,5 109 845 96 799
Net rental from properties 15,8 73 359 63 333
Interest received 860 760
Income received from
associate 2 637 1 517
Fair value adjustment
- investment properties 71 346 34 037
- associate, net of
capital gains tax 6 162 1 711
Impairment loss (10 112) (3 996)
Capital (loss)/profit on
disposal of investment
properties (6) 151
144 246 97 513
Interest paid 7,6 37 699 35 034
Depreciation 602 747
Profit before debenture
interest 105 945 61 732
Debenture interest 29,2 37 668 29 150
Profit before taxation 68 277 32 582
Taxation 10 434 4 406
Profit attributable to
ordinary shareholders 57 843 28 176
Earnings per share
(cents) (basic and diluted) 58,1 28,3
Headline earnings per
share (cents) (basic
and diluted) 0,9 0,7
Headline earnings per
linked unit (cents) (basic
and diluted) 29,2 38,7 29,9
Distribution per linked
unit (cents)
Dividends 0,19 0,14
Interest 37,81 29,26
Total 29,2 38,00 29,40
ABRIDGED CONSOLIDATED BALANCE SHEET
Reviewed Audited
29 Feb 28 Feb
2004 2003
R"000 R"000
ASSETS
Non-current assets
Investment properties 650 514 526 828
Property, plant and equipment 17 853 18 215
Investments - associate company 20 485 11 227
Current assets 7 759 6 081
Total assets 696 611 562 351
EQUITY AND LIABILITIES
Share capital 996 996
Non-distributable reserve 137 127 80 147
Retained profit 1 875 1 200
Ordinary shareholders" interest 139 998 82 343
Debentures 167 510 167 510
Linked unitholders" interest 307 508 249 853
Interest-bearing borrowings 327 225 256 912
Deferred taxation 14 798 4 389
Current liabilities
- interest-bearing 2 341 13 213
- non-interest-bearing 44 739 37 984
Total equity and liabilities 696 611 562 351
Linked units in issue 99 624 992 99 624 992
Net asset value per linked
unit (cents) 309 251
RECONCILIATION OF HEADLINE EARNINGS PER LINKED UNIT TO EARNINGS PER SHARE
Reviewed Audited
Year to Year to
28 Feb 28 Feb
cents 2004 2003
Headline earnings per linked unit 38,7 29,9
Debenture interest (37,8) (29,2)
Headline earnings per share 0,9 0,7
Fair value adjustment of
investment properties 67,7 32,2
Capital profit/loss on disposal
of investment properties - 0,2
Deferred capital gains tax
- fair value adjustment (10,5) (4,8)
Earnings per share 58,1 28,3
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
Reviewed Audited
Year to Year to
29 Feb 28 Feb
2004 2003
R"000 R"000
Cash flow from operating activities
Net rental income from properties 72 751 62 586
Adjustment for:
- Depreciation 602 747
- Working capital changes (849) 4 498
Cash generated from operations 72 504 67 831
Investment income 3 170 3 988
Finance costs (37 699) (35 034)
Taxation paid (4) (702)
Distribution to linked
unitholders paid (32 378) (27 397)
Net cash inflow from
operating activities 5 593 8 686
Cash flow from investing activities
Investing activities (65 462) (44 175)
Proceeds from disposal of
investment properties - 1 460
Net cash outflow used in
investing activities (65 462) (42 715)
Cash flow from financing
activities 59 347 33 346
Net decrease in cash and
cash equivalents (522) (683)
Cash and cash equivalents at
beginning of year 2 042 2 725
Cash and cash equivalents
at end of year 1 520 2 042
STATEMENT OF CHANGES IN EQUITY
Re- Dis-
valu- tribu-
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 - - - 57 843 57 843
Dividends - - - (188) (188)
Transfer to
non-distributable
reserve - (6) 56 986 (56 980) -
Balance at
29 February 2004 996 8 370 128 757 1 875 139 998
notes
1. The same accounting policies and methods of computation have been 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 R12,2 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 R62,1 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 associate company, IPS Investments (Proprietary)
Limited ("IPS"), which at year-end amounted to 38,06 million.
6. In terms of AC135 the company values its investment properties annually,
resulting in a fair value upward adjustment of R61,2 million.
7. The company"s auditors, Grant Thornton, have reviewed these financial
results. The unqualified opinion review report is available for inspection at
the company"s registered office.
COMMENTS
Review of results
Rental income and net rental income increased by 13,5% and 15,8% respectively,
compared to the prior corresponding period, due to a combination of stronger
trading activities, a number of yield enhancing acquisitions and new residential
conversions included in the results.
The final distribution of 21,90 cents per linked unit equates to a total
distribution of 38,0 cents (2003: 29,40 cents) per linked unit for the year
under review.
The demand for good quality space and consequent rental growth, an improved
performance from an associate company, IPS, and significant reductions in
financing costs, resulted in the fund"s exceptional growth in earnings and
distribution for the year.
Property portfolio
During the financial year, Premium acquired nine properties, located in the
Pretoria CBD, for a total purchase price of R37,0 million. These properties are
strategically situated in the Pretoria CBD and the purchases are is in line with
management"s objective of acquiring properties to further enhance the quality of
the existing portfolio. An amount of R25,6 million was spent on the renovation
of properties and the conversion of office blocks to residential accommodation.
Two new residential conversions were recently completed and the letting thereof
is progressing well.
The property portfolio was revalued at 29 February 2004 at R668,4 million. This
is an increase of 10,1% on the property values prior to revaluation. The
strengthening values can be attributed to the firming of capitalisation rates
and growth in rentals. The current vacancy factor is 7% of total potential
rental income (28 February 2003: 7%).
Income from an associate company, IPS, in which Premium holds a 40% interest,
increased significantly, on the back of increased demand for residential and
office space, and a number of acquisitions made at attractive yields. IPS was
involved in a very successful residential sectional-title development, which was
completed and sold as at 29 February 2004. The profits from this venture are
expected to have an impact on the results for the next financial year. IPS is
currently considering other similar developments.
Borrowings and interest rate management
Borrowings equate to 49,3% of the value of the property portfolio and interest
rates have been fixed in respect of 49% of these borrowings at various maturity
dates not extending beyond March 2007. Recently, the company renegotiated rates
resulting in a weighted average cost of borrowings of 11,1%.
Prospects
The property market and, in particular, the Pretoria CBD office and residential
sectors have performed well and management is of the view that the Premium
portfolio is well positioned to yield growing distributions to unitholders.
Subject to the prevailing market conditions and the interest rate environment
remaining constant, the directors expect that the distributable income for the
period 1 March 2004 to 28 February 2005 will increase by at least 8%. The
company"s auditors, Grant Thornton, 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 20 AND INTEREST PAYMENT ("the Distribution")
Notice is hereby given that dividend number 20 of 0,11 cents (2003: 0,08 cents)
per ordinary share has been declared together with interest for the period 1
September 2003 to 29 February 2004 of 21,79 cents (2003: 16,32 cents) per
debenture payable to linked unitholders recorded in the register on Friday, 14
May 2004. The last date to trade "cum" distribution is Friday, 7 May 2004. The
units will commence trading "ex" distribution on Monday, 10 May 2004. Payment
date will be Monday, 17 May 2004. No dematerialisation or rematerialisation of
linked unit certificates may take place between Monday, 10 May 2004 and Friday,
14 May 2004, both days inclusive.
By order of the Board
City Property Administration (Proprietary) Limited
20 April 2004
A Wapnick JP Wapnick
Chairman Managing director
Directors
A Wapnick* (Chairman), JP Wapnick* (Managing director), MJ Holmes#, RJ Inggs*,
MZ Pollack#, S Wapnick+
*Executive directors; +Non-executive directors; #Independent non-executive
directors
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: 2000/006082/06)
70 Marshall Street, Johannesburg 2001 PO Box 61051, Marshalltown 2107 Tel: (011)
370-7700 Fax: (011) 688-7712
