|
Acucap - Audited Final Results for the year ended 31 March 2004
Acucap Properties Limited
Incorporated in the Republic of South Africa
Registration number 2001/021725/06
JSE Code: ACP
ISIN : ZAE000037651
`Acucap` or `the company`
Audited Final Results for the year ended 31 March 2004
31 March 31 March
2004 2003
R`000 R`000
Abridged Balance Sheet
Assets
Non current assets
Investment properties 1 067 900 912 650
Current assets 132 073 32 568
Accounts receivable 14 114 5 427
Cash and cash equivalents 117 959 27 141
Total assets 1 199 973 945 218
Equity and liabilities
Shareholders` interest 82 137 22 497
Non current liabilities 1 044 606 889 956
Debentures 501 206 395 953
Loans 503 500 478 000
Deferred tax 39 900 16 003
Current liabilities 73 230 32 765
Accounts payable 5 940 4 132
Vendors 30 741 -
Debenture interest 36 549 28 633
payable
Total equity and liabilities 1 199 973 945 218
Abridged Income Statement
for the year ended 31 March 2004
Year ended 13 months
31 March ended
2004 31 March
2003
R`000 R`000
Operating income before interest 205 580 177 425
paid
Revenue 137 988 129 973
Interest received 3 553 558
Net operating expenses (11 124) (9 843)
Asset management fees paid to (5 047) -
Acucap Property Management
(Proprietary) Limited
Loss on disposal of investment (400) -
properties
Revaluation of investment 80 610 56 737
properties
Interest paid and payable 125 047 122 314
- Debenture holders - post 33 858 25 796
listing - interim
- Debenture holders - post 36 549 28 633
listing - final
- Debenture holders - pre listing - 1 035
- Total interest paid to 70 407 55 464
debenture holders
- Interest paid to banks and 54 640 66 850
vendors
Profit before exceptional items 80 533 55 111
and taxation
Exceptional items
Listing costs and costs of raising - 9 392
finance
Profit before tax 80 533 45 719
Deferred tax (23 897) (16 512)
Net profit for the year 56 636 29 207
Reconciliation of Headline profit /
(loss) to net profit
Net profit for the year 56 636 29 207
Listing costs - 7 393
Revaluation of investment (80 610) (56 737)
properties
Loss on disposal of investment 400 -
properties
Deferred tax on revaluation 23 897 16 512
Headline profit / (loss) 323 (3 625)
Interest paid to debenture holders 70 407 55 464
Headline linked unit earnings 70 730 51 839
Cents Cents
Earnings per share 119.17 76.20
Headline profit / (loss) per share 0.68 (9.46)
Headline earnings per linked unit 148.83 139.67
Interest Distribution per linked unit 140.45 137.32
- post listing
- Interim 67.60 65.08
- Final 72.85 72.24
Interest Distribution per linked - 5.67
unit - pre listing
Interest Distribution per linked 140.45 142.99
unit for the year (2003: 13
months)
Abridged Cash flow statement
for the year ended 31 March 2004
Year ended 13 months
31 March ended
2004 31 March
2003
R`000 R`000
Cash flows from operating
activities
Cash generated by operations 153 595 135 003
Interest received 3 553 558
Interest paid (125 047) (122 314)
Net cash inflow from operating 32 101 13 247
activities
Cash outflows from investing (75 040) (535 463)
activities
Cash inflows from financing 133 757 548 985
activities
Net cash inflow for the year 90 818 26 769
Cash and cash equivalents at 27 141 372
beginning of year
Cash and cash equivalents at end 117 959 27 141
of year
Abridged Statement of changes in equity
for the year ended 31 March 2004
Shares Share Share Non Accumula Total
issued capit premium distribu ted loss
al table
reserve
Number R`000 R`000 R`000 R`000 R`000
Balance at 9 707 132 10 87 - ( 7 106) (7 009)
1 March
2002
Issue on 14 19 221 732 19 173 - - 192
March 2002
Issue on 26 10 706 049 11 96 - - 107
March 2002
Net profit - - - 29 207 29 207
for the
period
Transfer to - - 37 339 (37 339) -
non-
distributab
le reserve
Balance at 39 634 913 40 356 37 339 (15 238) 22 497
31 March
2003
Issue on 30 10 449 369 10 2 768 - - 2 778
June 2003
Issue on 16 86 500 - 226 - - 226
February
2004
Net profit - - - 56 636 56 636
for the
year
Transfer to - - 56 314 (56 314) -
non-
distributab
le reserve
Balance at 50 170 782 50 3 350 93 653 (14 916) 82 137
31 March
2004
COMMENTS
1. REVIEW OF RESULTS AND OPERATIONS
The financial statements are prepared in accordance with South African
Statements of Generally Accepted Accounting Practice (GAAP), applied
consistently with the prior period, and the requirements of the Companies Act in
South Africa. KPMG Inc. has audited the financial information set out in this
report. Their unqualified audit report is available for inspection at the
company`s registered office.
Over the last year, there has been a sustained improvement in property
fundamentals, led by a good performance from retail property, where the outlook
remains positive. The performance of the office market, whilst more subdued, was
nevertheless encouraging as vacancy rates recorded their first annual decline in
almost ten years, and evidence of firming rentals in certain nodes started to
emerge. In the industrial sector, there was a marked decline in vacancy rates
and a corresponding growth in rental levels, providing the strongest indication
in several years of a real turnaround in the performance of this sector, with
improved prospects for the year ahead.
The Acucap portfolio has benefited not only from this general improvement in
property fundamentals, but also from the intensive management activities of the
group`s executive. Whilst these efforts have been consistently applied to the
entire portfolio, specific mention is made of four of the group`s properties. In
Key West, the regional shopping centre in the West Rand, building work is
presently under way to provide a new 3,500m2 Edgars store which will complete
the centre`s fashion offering. At the Sunward Centre in Boksburg, re-tenanting
activities have brought Clicks, Spar and Nedbank to the centre and increased its
gross lettable area (GLA) by 11%, strengthening its position as the community`s
dominant convenience centre. The refurbishment of the 6,000m2 Atterbury Office
Park was completed and a new long-term lease signed with a national government
tenant for the whole office park. Lastly, management completed negotiations for
the renewal of the Goldfields lease over their Parktown head office, extending
the lease by five years to the end of March 2010.
Acucap acquired three properties during the year and two others subsequent to
the year end. Details of two of these transactions were included in the results
announcement of 27 May 2003, and details of the remaining three transactions are
set out in paragraph 8 of this results announcement. All of the acquisitions
were enhancing to both distributions and net asset value (NAV) per linked unit.
One property was sold during the year, the Bruma BMW motor dealership, as the
property no longer fitted with the company`s investment strategy. Certain other
properties in the portfolio have also been identified for possible sale as part
of the Board`s on-going commitment to refreshing the portfolio and ensuring that
all properties contribute to the company`s central objective of producing
sustainable growth in distributions per unit.
Lower interest rates added to the impetus of intensive asset management and
improved property fundamentals, and contributed to the company`s positive
results for the year under review, with average borrowing costs declining from
13.63% in 2003 to 12.67% in the current year. Net income from the property
portfolio increased by 6% over the previous 12 months, and headline earnings per
linked unit increased by 6.8% over the same period, although asset management
fees became payable to the management company for the first time in the current
financial year in terms of the asset management contract. These fees accounted
for almost 4% of the net income from the property portfolio, but nevertheless
the distribution per linked unit increased by 2.3% over the previous 12 months.
The company therefore achieved a total distribution of 140.45 cents per linked
unit (2003 : 137.32 cents per linked unit), comprising an interim distribution
of 67.60 cents (2003 : 65.08 cents) declared on 30 November 2003, and a final
distribution of 72.85 cents (2003 : 72.24 cents) approved on 17 May 2004.
2. DISTRIBUTION
The Board has approved a final distribution of 72.85 cents per linked unit
for the period from 1 October 2003 to 31 March 2004.
3. BORROWINGS
The company has fixed the interest rate on 76% (2003 : 91%) of its borrowings
with unexpired terms varying between 1 and 8 years as follows:
Amount % of total Rate (nacm) Expiry of fixed
rates
(R borrowings
million)
60.0 11.9% 12.21% 3 January 2005
120.0 23.9% 12.84% 2 January 2007
100.0 19.9% 13.34% 15 May 2008
50.0 9.9% 14.43% 8 October 2009
50.0 9.9% 14.06% 31 March 2012
123.5 24.5% Prime less 1.5%
503.5 100.00%
The company`s weighted average total borrowing cost was 12.76% for the year,
down from the prior year`s 13.63%. The estimate for the year to 31 March 2005 is
12.27%.
The company`s policy is to maintain fixed interest rates on not less than 70% of
borrowings, and for the year ahead, it is estimated that between 75% and 80% of
borrowings will remain subject to fixed rates.
4. VACANCIES
Vacancies amount to 2.25% of the portfolio by gross rental income, and 1.89% by
GLA. The company has successfully maintained low vacancy levels since listing,
and management will continue to focus on maximising the potential income from
each property in the portfolio through the aggressive management of vacancies.
5. LEASE EXPIRY PROFILE
The lease expiry profile is reflected below, which includes the effects of
the acquisitions referred to in paragraph 8 of this results announcement:
ACUCAP LEASE EXPIRY
Mar-05 Mar-06 Mar-07 Mar-08 Mar-09
thereafte
r
5.1% 14.7% 5.8% 8.0% 10.6% 55.7%
National
tenants
Other 35.0% 27.8% 12.9% 11.5% 4.0% 1.8%
TOTAL 14.80% 18.93% 8.09% 9.16% 8.45% 38.33%
The lease expiry profile has improved over the last 12 months. At the end of
March 2003, 54% of leases were due to expire within 3 years, and 31% of leases
had expiry dates beyond 5 years. At the current year end, only 42% of leases are
due to expire within 3 years, while just over 38% have expiry dates beyond 5
years.
LIQUIDITY
In the year to 31 March 2004, trade in Acucap linked units has amounted to 47%
of the weighted average number of units in issue. The performance of the Acucap
unit price relative to the PLS index is shown below:
Acucap PLS Index
Mar-03 100.00 100.00
Apr-03 108.02 96.66
May-03 99.06 97.04
Jun-03 104.72 102.40
Jul-03 106.60 101.02
Aug-03 108.02 98.07
Sep-03 105.66 97.63
Oct-03 118.49 109.36
Nov-03 124.53 108.45
Dec-03 132.08 113.92
Jan-04 125.00 107.98
Feb-04 122.64 110.31
Mar-04 121.23 109.63
Details of the company`s unit holder spread are shown below:
31 March 31 March
2004 2003
Total number of unit holders 996 790
Number of unit holders owning > 5% of 4 7
units in issue
Number of institutions controlling 10% 4 1
to 15% of units in issue
Number of institutions controlling > 15% 1 3
of units in issue
Percentage of units controlled by 21.7% 27.7%
largest institution
Percentage of units held by public 69.0% 66.9%
unitholders
During the year, the company successfully completed a private placement of
7,030,944 linked units at an average price of R10.48 per linked unit ex-
distribution.
7. PROPERTY PORTFOLIO REVALUATION
The property portfolio was revalued by the company`s independent valuers at
31 March 2004. The portfolio increased in value from R913 million at the end of
March 2003 to R1,068 million at the end of the current year. Excluding the
effects of acquisitions and disposals, this represents a robust growth of 9% in
the capital value of the portfolio during the year. The increase in the
portfolio value, together with the effects of acquisitions made during the year,
resulted in a pleasing growth in the NAV per linked unit from R10.56 at 31 March
2003 to R11.63 at 31 March 2004.
8. ACQUISITIONS
In January 2004, the group acquired the Colliers head office building in
Fricker Road, Illovo on the following terms:
8.1 Colliers Building, Fricker Road, Illovo Boulevard
8.1.1 Vendors Colliers RMS Share Block Company No.1 (Pty) Ltd
Colliers RMS Share Block Company No.2 (Pty) Ltd
8.1.2 Description Colliers Building, erven 68 and 69, Illovo,
measuring 7,436m2 in extent and situated at 34 Fricker Road, Illovo,
Johannesburg
8.1.3 Sector Office
8.1.4 Consideration R29,995,000 (twenty nine million nine hundred and
ninety five thousand rand) payable in cash
8.1.5 Effective date 1 January 2004
8.1.6 Effect on NAV Historic NAV per linked unit pre-acquisition
R11.62
Pro-forma historic NAV per linked unit post-acquisition
R11.63
8.1.7 Effect on Historic distribution per linked unit pre-acquisition
140.45c
earnings Pro-forma historic distribution per linked unit post-
acquisition 141.04c
8.1.8 Lease expiry 31 December 2008
Subsequent to the year end, the company concluded agreements for the
acquisition of two additional properties. Board approval for the acquisitions
was given on 30 April 2004, and details of the transactions are set out below :
8.2 South African Weather Service Building, Pretoria
8.2.1 Vendor NIB 90 Share Block (Pty) Ltd
8.2.2 Description South African Weather Service building, remaining
extent of erf 291 Erasmusrand, Pretoria, measuring 12,184m2 in extent and
situated at 442 Rigel Avenue, Erasmusrand, Pretoria
8.2.3 Sector Office
8.2.4 Consideration R35,500,000 (thirty five million five hundred
thousand rand) payable in cash
8.2.5 Effective date 1 June 2004
8.2.6 Effect on NAV Historic NAV per linked unit pre-acquisition
R11.63
Pro-forma historic NAV per linked unit post-acquisition
R11.63
8.2.7 Effect on Historic distribution per linked unit pre-acquisition
140.45c
earnings Pro-forma historic distribution per linked unit post-
acquisition 140.67c
8.2.8 Lease expiry 30 April 2013
8.3 Tellumat Building, Retreat, Cape Town
8.3.1 Vendor JLP Properties (Pty) Ltd
8.3.2 Description Tellumat Building, erf 127260, Cape Town at
Retreat, situated in the South Peninsula Municipality, Cape Division, Western
Cape Province
8.3.3 Sector Industrial
8.3.4 Consideration R46,000,000 (forty six million rand) payable in
cash
8.3.5 Effective date 1 June 2004
8.3.6 Effect on NAV Historic NAV per linked unit pre-acquisition
R11.63
Pro-forma historic NAV per linked unit post-acquisition
R11.64
8.3.7 Effect on Historic distribution per linked unit pre-acquisition
140.45c
earnings Pro-forma historic distribution per linked unit post-
acquisition 142.15c
8.3.8 Lease expiry 30 September 2009
9. SEGMENTAL RESULTS
Year ended 13 months
31 March ended 31
2004 March 2003
Retail
Revenue 89 129 87 378
Net operating expenses (9 017) (6 911)
Operating profit 80 112 80 467
Offices
Revenue 29 949 29 738
Net operating expenses (1 349) (1 918)
Operating profit 28 600 27 820
Commercial
Revenue 12 203 12 857
Net operating expenses (478) (483)
Operating profit 11 725 12 374
Industrial
Revenue 6 707 -
Net operating income 1 206 -
Operating profit 7 913 -
Reconciliation to
operating profit in the
income statement
Revenue 137 988 129 973
Allocated operating (9 638) (9 312)
expenses
Unallocated operating (6 533) (531)
expenses
Operating profit for the 121 817 120 130
year
Capital expenditure on
investment properties
Retail
Purchase price - 435 912
Other capital expenses 7 638 7 567
7 638 443 479
Offices
Purchase price 29 995 21 000
Other capital expenses 5 751 483
35 746 21 483
Commercial
Purchase price - 69 700
Other capital expenses - 801
- 70 501
Industrial
Purchase price 43 000 -
Other capital expenses 1 656 -
44 656 -
Total
Purchase price 72 995 526 612
Other capital expenses 15 045 8 851
88 040 535 463
10. PROSPECTS
Management will maintain its focus on activities that will optimise the
income earning and growth potential of the property portfolio, and on the
acquisition of good quality properties that will contribute to sustained growth
in distributions per unit.
Acucap will maintain a relatively overweight position in the retail sector,
which has shown the most consistent growth of all sectors over the last 10
years. The completion of the new 40,000m2 Festival Mall at Kempton Park will
augment the company`s retail asset base. The development is due for completion
towards the end of October 2004 and should be transferred to Acucap in early
2005. While the company`s objective is to remain relatively underweight in the
office sector, Acucap has selectively acquired certain office properties that
will augment the fund`s long-term growth. The company will also maintain an
exposure to a small number of larger industrial parks.
Acucap is looking forward to a year of continued stability in currency and
interest rate markets, underpinned by sustained low inflation. The board would
expect to see the listed property sector accessing the capital markets for the
first time, and Acucap certainly intends to be at the forefront of such
developments, where obvious advantages will accrue from reduced borrowing costs.
The directors would also expect to see a narrowing of the yield premium of the
listed property sector over long bonds as evidence of sustainable growth in
distributions starts to become apparent.
The board expects the net income from the property portfolio to maintain
the growth achieved in the current year, and given that asset management fees
now form part of the fund`s cost base, the board expects this growth in income
to be reflected in distributions for the year ending 31 March 2005.
11. DISTRIBUTION PAYMENT
Notice is hereby given that a final distribution of 72.85 (seventy two comma
eight five) cents per linked unit has been approved in respect of the six month
period ended 31 March 2004. The last date to trade the linked units cum
distribution is Friday, 4 June 2004 and the record date will be Friday, 11 June
2004. The linked units will start trading ex-distribution from Monday, 7 June
2004. Distributions will be made to unit holders on Monday 14 June 2004.
Linked unit certificates may not be dematerialised or rematerialised between
Monday, 7 June 2004 and Friday, 11 June 2004 both days inclusive.
On behalf of the Board
BS KANTOR PA THEODOSIOU
(Chairman) 20 May 2004
Registered Office
Suite A11 Westlake Square
Westlake Drive
Westlake
CAPE TOWN
Transfer secretaries:
Computershare Investor Services 2004 (Proprietary) Limited
70 Marshall Street
JOHANNESBURG
Sponsor:
Nedbank Capital
http://www.acucap.co.za
info@acucap.co.za
Directors: Prof BS Kantor (Chairman), PA Theodosiou* (Managing Director), FM
Berkeley, D de Beer, RC Frolich, MJ Lindeque, HJ Mocke, JH Rens*, B Stevens, NDC
Whale
* Executive
Date: 20/05/2004 07:00:28 AM Produced by the JSE SENS Department
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
