| Thu 5 Aug 2004, 17:04 | | INTERIM RESULTS AND INCOME DISTRIBUTION DECLARATI |
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CAPITAL PROPERTY FUND - INTERIM RESULTS AND INCOME DISTRIBUTION DECLARATION
CAPITAL PROPERTY FUND
Share code CPL ISIN ZAE000001731
(`Capital` or `the Fund`)
INTERIM RESULTS AND INCOME DISTRIBUTION DECLARATION
The directors of Property Fund Managers Limited, management company of Capital
Property Fund, announce that the interim unaudited consolidated results of the
Fund for the six months ended 30 June 2004 are as follows:
CONSOLIDATED INCOME STATEMENTS
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2004 2003 2003
R`000 R`000 R`000
Net property income 33 304 33 658 66 149
Interest 1 529 2 197 4 219
34 833 35 855 70 368
Operating expenditure 8 291 8 575 19 697
Net income before taxation 26 542 27 280 50 671
Taxation - - (18)
Headline earnings 26 542 27 280 50 653
Net write-up on revaluation of
investment property - - 36 326
Net deficit on disposal of
investment property - - (1 956)
Deferred Capital Gains Tax - - (3 557)
Net income for period 26 542 27 280 81 466
Reconciliation of net income for period
ended to amount available
for distribution
Net income for period 26 542 27 280 81 466
Transfer to revaluation reserve - - (32 769)
Transfer from trust capital - - 1 956
Transfer from/(to) maintenance reserve 773 (54) 3 523
Amount available for distribution 27 315 27 226 54 176
Units in issue 184 616 320 184 616 320 184 616 320
Headline earnings (cents per unit) 14,38 14,78 27,44
Net earnings (cents per unit) 14,38 14,78 44,13
Distribution (cents per unit) 14,80 14,75 29,34
Net asset value (cents per unit) 235 220 235
CONSOLIDATED BALANCE SHEETS
Assets
Non-current assets
Investment property 428 165 389 093 425 425
Current assets 43 116 51 945 46 997
Total assets 471 281 441 038 472 422
Unitholders` interest and liabilities
Unitholders` interest 433 047 406 426 433 820
Non-current liabilities - Deferred Capital
Gains Taxation 5 285 1 728 5 285
Current liabilities 32 949 32 884 33 317
Total unitholders` interest
and liabilities 471 281 441 038 472 422
CONSOLIDATED STATEMENTS OF CHANGES
IN UNITHOLDERS` INTEREST
Trust capital 385 524 387 322 385 524
Balance at beginning of period 385 524 311 924 311 924
Issue of shares - 75 556 75 556
Share issue expenses - (158) -
Net deficit on disposal of property - - (1 956)
Revaluation reserve 44 308 11 539 44 308
Balance at beginning of period 44 308 11 539 11 539
Transfers from distributable reserves - - 32 769
Maintenance reserve 3 215 7 565 3 988
Balance at beginning of period 3 988 7 511 7 511
Transfer (to)/from distributable reserves (773) 54 (3 523)
Undistributed income - - -
Balance at beginning of period - - -
Net income for period 26 542 27 280 81 466
Net transfer from/(to) trust capital
and non-distributable reserves 773 (54) (27 290)
Income distribution (27 315) (27 226) (54 176)
Total unitholders` interest 433 047 406 426 433 820
ABRIDGED CONSOLIDATED CASH FLOW STATEMENTS
Net cash inflow from operating activities 1 117 3 280 3 934
Net cash outflow from investing activities (2 740) (75 565) (1 971)
Net cash inflow from financing activities - 75 398 -
Net (decrease)/increase in cash resources (1 623) 3 113 1 963
Cash resources at beginning of period 36 940 34 977 34 977
Cash resources at end of period 35 317 38 090 36 940
INCOME DISTRIBUTION
Amount available for
distribution (cents per unit) 14,80 14,75 29,34
Distributions (cents per unit) 14,80 14,75 29,34
Interim 14,80 14,75 14,75
Final - - 14,59
The interim distribution, being No. 42 for Capital Property Fund, has been
declared in respect of the income distribution period 1 January 2004 to 30 June
2004.
ACCOUNTING POLICIES
The results have been prepared in accordance with South African Statements of
Generally Accepted Accounting Practice and are consistent with those applied for
the year ended 31 December 2003.
NET INCOME
Net income available for distribution for the period ended 30 June 2004 amounted
to R27 314 865 or 14,80 cents per unit (2003: R27 225 879 or 14,75 cents per
unit).
MAINTENANCE RESERVE
During the period under review the Fund reversed the maintenance reserve of
those properties sold in the first six months of the year, and incurred
maintenance expenditure, which resulted in a transfer from the maintenance
reserve totalling R773 000.
PORTFOLIO COMMENTARY
Unitholders are referred to the sens announcement, dated 21 July 2004, which
described the reconfiguration of the Capital Property Portfolio via
acquisitions, disposals and issue of units for cash.
The salient points of the announcement are set out below:
1. Acquisitions
* Agreements have been concluded, subject to unitholder and Competition
Commission approvals, for:
- the acquisition by Capital of portfolios of property letting
businesses as going concerns from Resilient Properties (Proprietary)
Limited, Old Mutual Life Assurance Company (South Africa) Limited,
Acucap Investments (Proprietary) Limited and subsidiaries of The
Standard Bank of South Africa Limited, for an aggregate purchase
consideration of R760 531 182, with effect from 1 August 2004;
- the subscription by MCI Properties (Proprietary) Ltd (`MCI
Properties`) for units in Capital to the value of R50 million;
- the subscription by Property Fund Managers Limited (`PFM`) for units
in Capital to the value of R39 million;
- the disposal by Capital of property letting businesses to various
purchasers for an aggregate cash consideration of R71 635 000.
* The acquisitions, the issues for cash and the Capital disposals are
collectively referred to in this announcement as the `transactions`.
2. Rationale for the Capital transactions
* Capital currently has a property portfolio valued at approximately R425
million. The transactions will facilitate the growth of the Fund to a
portfolio with underlying assets valued at in excess of R1 billion.
* The rationale for the transactions is the following:
- by achieving critical mass, the attractiveness of the fund to
investors is improved;
- due to the increased number of units in issue following the
transactions, the liquidity of Capital units will be enhanced over the
medium term;
- the acquisitions will result in Capital owning 65 additional rental
generating businesses, thereby diversifying the income stream of the
Fund and spreading risk across the portfolio;
- the quality of the rental income streams will be improved;
- the disposals will result in an improvement in the quality of the
property portfolio;
- the issue of units for cash to MCI Properties will ensure an alignment
of the interests of MCI Properties in PFM with the interests of the
Fund and its investors; and
- the issue of units for cash to PFM will enable PFM to implement a PFM
executive incentive scheme, thereby ensuring that the interests of the
PFM executives are aligned with the interests of the Fund and its
investors.
* The enlarged portfolio (after implementation of the transactions) will
comprise 96 properties with a wider geographic spread, forecast to have a
yield of 13,13% for the financial year ending on 31 December 2004 and 13,70%
for the 12 months ending 31 July 2005.
STRATEGY
The investment strategy of PFM will initially be to replace the older non-
performing properties with high value, good quality properties that are well-
tenanted and are located in growth areas of the major metropolitan areas of
South Africa. PFM will also give consideration to acquiring properties in high-
growth towns.
OUTLOOK
Forecast distributable earnings for the year ending 31 December 2004 are 30,19
cents per unit. The assumptions relating to the forecast were detailed in the
SENS announcement to unitholders, dated 21 July 2004. The forecast was reviewed
by KPMG Inc. and their report is available for inspection at the registered
office of PFM.
INCOME DISTRIBUTION
Notice is hereby given that a cash distribution of 14,80 cents per unit (2003:
14,75 cents per unit) (`the distribution`) has been declared payable to
unitholders recorded in the books of the Fund at the close of business on the
record date, Friday, 27 August 2004. Unitholders are advised that the last day
to trade `cum` the distribution will be Friday, 20 August 2004. The units will
trade `ex` distribution as from Monday, 23 August 2004. Payment will be made on
Monday, 30 August 2004. Unit certificates may not be dematerialised or
rematerialised during the period Monday, 23 August 2004 to Friday, 27 August
2004, both days inclusive.
On behalf of the Board
Andries de Lange Johannesburg
Secretary 6 August 2004
REGISTERED OFFICE:
1st Floor, Capital Place,
2 Lone Close, Lonehill, 2062
PO Box 89, Lonehill, 2062
TRANSFER SECRETARIES:
COMPUTERSHARE INVESTOR SERVICES 2004 (PTY) LTD,
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
PFM PROPERTY FUND MANAGERS LTD
Co. Reg. No. 1980/009531/06
Date: 05/08/2004 05:00:14 PM Produced by the JSE SENS Department
