| Tue 10 Aug 2004, 17:23 | | Reviewed Interim Results and Distribution Announc |
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Resilient - Reviewed Interim Results and Distribution Announcement
Resilient Property Income Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/016851/06)
Share code: RES ISIN: ZAE000043642
Reviewed Interim Results and Distribution Announcement
Abridged consolidated income statement
Reviewed Audited Reviewed
6 months to 13 months to 7 months to
30 June 2004 31 December 30 June 2003
2003
R`000 R`000 R`000
Rental income 97 944 147 373 73 267
Net operating expenses (37 685) (39 208) (17 420)
Operating profit 60 259 108 165 55 847
Investment income 595 3 734 3 076
Income from associated companies 2 827 - -
Net profit / (loss) on the sale
of investment properties (853) 11 211 (266)
Net profit / (loss) on the sale
of equity investments (2 228) 3 552 2 633
Revaluation adjustments - 38 249 -
Costs associated with listing - (3 370) (3 370)
Goodwill amortised (3 938) - -
Net profit before interest 56 662 161 541 57 920
Interest on units issued cum
distribution 5 310 3 704 -
Interest on loans (22 261) (41 991) (23 421)
Interest to linked debenture
holders (46 732) (73 595) (35 502)
Net profit / (loss) before taxation (7 021) 49 659 (1 003)
Taxation 241 (13 266) (355)
Net profit / (loss) for the period (6 780) 36 393 (1 358)
Reconciliation of headline earnings per linked unit
Earnings per linked unit (cents) (7.02) 46.90 (1.81)
Adjusted for: 55.40 47.90 49.11
Interest to linked debenture
holders 48.38 94.80 47.30
Net capital (profit) / loss on
investments sold 3.19 (68.30) (2.68)
Costs associated with listing - 4.30 4.49
Goodwill amortised 4.08 - -
Taxation effect (0.25) 17.10 -
Headline earnings per linked unit
(cents) 48.38 94.80 47.30
A distribution of 42,71 cents per linked unit (based on 109 416 448 units in
issue) will be paid to unitholders on 6 September 2004. The distribution paid
to unitholders in the prior year interim period was 45,10 cents per linked unit
(equivalent to 38,66 cents per linked unit when adjusted for the 7 month interim
period in the prior year).
Earnings per linked unit and headline earnings per linked unit are based on the
weighted average of 96 602 185 (31 December 2003: 77 619 292 30 June 2003:
75 065 122) linked units in issue.
Abridged consolidated balance sheet
Reviewed Audited Reviewed
30 June 2004 31 December 2003 30 June 2003
R`000 R`000 R`000
ASSETS
Non-current assets 1 026 900 294 674 937
830
Investment properties 865 627 883 285 674 937
Listed property securities - 17 009 -
Investments in associated companies 106 172 - -
Unit purchase trust 50 565 - -
Goodwill and fixed assets 4 466 - -
Current assets 88 275 83 520 75 602
Accounts receivable 1 500 35 660 2 803
Cash and cash equivalents 86 775 47 860 72 799
Total assets 1 115 983 814 750 539
105
EQUITY AND LIABILITIES
Linked unitholder capital 617 205 493 093 393 058
Share capital and reserves 92 007 63 872 15 209
Linked debenture liabilities 525 198 429 221 377 849
Non-current liabilities 405 473 435 905 315 599
Interest bearing borrowings 394 899 425 091 315 599
Deferred tax liability 10 574 10 814 -
Current liabilities 92 427 54 816 41 882
Accounts payable 45 262 14 271 6 025
Income tax liability 433 2 452 355
Linked debenture interest payable 46 732 38 093 35 502
Total equity and liabilities 1 115 983 814 750 539
105
Consolidated statement of changes in equity for the 7 months ended 30 June 2003
Share Share Non- Distri- Total
Capital Premium Distri- butable
butable Reserve
Reserve
R`000 R`000 R`000 R`000 R`000
Issue of units 787 15 780 16 567
Net loss for the period (1 358) (1 358)
Transfer to non- 2 012 (2 012) -
distributable reserve
Balance at 30 June 2003 787 15 780 2 012 (3 370) 15 209
Consolidated statement of changes in equity for the 6 months ended 30 June 2004
Share Share Non- Distri- Total
Capital Premium Distri- butable
butable Reserve
Reserve
R`000 R`000 R`000 R`000 R`000
Balance at 1 January 894 26 585 36 389 4 63 872
2004
Issue of units on 17 51 10 248 10 299
March 2004
Issue of units on 5 May 72 14 970 15 042
2004
Issue of units on 22 76 9 498 9 574
June 2004
Net loss for the period (6 780) (6 780)
Transfer from non- (6 779) 6 779 -
distributable reserve
Balance at 30 June 2004 1 093 61 301 29 610 3 92 007
Abridged consolidated cash flow statement
Reviewed Reviewed
6 months to 7 months to
30 June 2004 30 June 2003
R`000 R`000
Net cash from operating activities 46 090 38 724
Investment activities (57 312) (672 570)
Finance raising activities (30 192) 314 659
Issue of linked units 80 329 391 986
Net cash inflow 38 915 72 799
Opening balance 47 860 -
Closing balance 86 775 72 799
Notes
1. Preparation and review opinion
The interim report has been prepared on a basis consistent with the accounting
policies applied in the prior period and in accordance with South African
Statements of Generally Accepted Accounting Practice applicable to interim
financial reporting, and the requirements of the Companies Act (Act 61 of 1973).
KPMG Inc. has reviewed the financial information set out in this interim report.
The unqualified review opinion is available for inspection at the company`s
registered office.
2. Commentary on the results
30 June 31 December 30 June
2004 2003 2003
Net asset value per linked 563 cents 551 cents 499 cents
unit
Distribution per linked 42,71 42,60 cents 45,10 cents
unit cents
Distribution per linked 42,71 42,60 cents 38,66 cents
unit adjusted for the 7 cents
month interim period in
the prior year
Gearing ratio 40,6% 47,2% 46,8%
Interim results for the period under review reflect growth in distributions to
linked unitholders of 10,5% when compared to the prior year interim results
(adjusted to a 6 month period). Trading conditions at retail centres in the
portfolio remain buoyant and turnover rentals have exceeded initial
expectations. This enabled the company to further improve its long term fixed
interest rate profile at a cost of R1,45 million.
The company`s policy is to revalue properties annually at the financial year-
end. Investments in associated companies are shown at the sum of the purchase
price and income from the date of purchase.
2.1 Acquisitions
2.1.1 Capital Property Fund
With effect from 1 April 2004 Resilient acquired 45 084 912 units in Capital
Property Fund (`Capital`) at R2,25 per unit (24,4% of Capital units in issue).
The consideration of R101,4 million was paid 50% in cash and 50% by the issue of
7 245 789 units in Resilient at an issue price of R7,00 per linked unit.
Resilient also acquired a 30% interest (5% of which was acquired after the
balance sheet date) in Property Fund Managers Limited, the asset managers of
Capital, at a cost of R2,25 million.
Subject to the approval of Capital unitholders, Resilient will dispose of 14
properties to Capital for a total consideration of R149 million to be settled by
the issue of 64 782 609 Capital units at R2,30 per unit.
Resilient`s strategy is to focus on two segments of the property industry
namely; dominant non-metropolitan retail centres in small cities / large towns
and industrial parks located in transport nodes. The sale of these properties
to Capital will enable Resilient to increase this focus.
2.1.2 Thohoyandou Shopping Centre
Resilient has agreed to acquire a shopping centre in Thohoyandou at a cost of
R47 million payable in cash. The centre has a strong national tenant profile
which includes Jet Stores, Truworths and Mr Price. The centre has a lettable
area of 10 800mSquared, with potential for future value enhancement and
expansion.
2.1.3 Development in Kimberley
A 58 500mSquared site with retail rights in Kimberley was acquired at a cost of
R1,5 million. Plans are in progress to develop a regional shopping centre on
the site in partnership with the Keystone Investments group.
2.1.4 Extensions and refurbishments
The refurbishment of Limpopo Mall was completed within budget. Plans are
underway for a 1 400mSquared extension to increase the trading space of Jet
Stores, Ackermans and Pep Stores.
The extensions to accommodate Mr Price, Sheet Street and Legit (a division of
Edcon) as well as the refurbishment of The Crossing, Mokopane are scheduled for
completion at the end of November 2004.
The extensions in Klerksdorp (1 350mSquared) and Rustenburg (800mSquared) are
due for completion at the end of November 2004. New tenants include Ackermans,
Simply Shoes and Absa.
2.2 Borrowings
The company has total facilities of R429,8 million of which R394,9 million are
utilised.
The interest rate profile of the group is shown below.
Borrowings Interest % of
Fixed rate rate Borrowings
expiry
February 2007 R50,0 11,61% 12,7%
million
December 2007 R140,0 14,30% 35,4%
million
September R50,0 11,44% 12,7%
2008 million
December 2009 R60,0 13,90% 15,2%
million
Floating rate R94,9 prime less 24,0%
million 1,50%
R394,9 12,50%* 100,0%
million
*Based on the current prime rate of 11,5%.
2.3 Unit Purchase Trust
Unitholders adopted `The Resilient Unit Purchase Trust` at a general meeting on
2 June 2004. A total of 7 600 000 Resilient units were issued to employees in
terms of the scheme at a price of R6,65 per unit.
2.4 Disposals
2.4.1 Disposals transferred during the period
Property Valuation at 31 Sold for
December 2003
National Brands, R5 400 000* R5 400 000
Roodepoort
Auto Zone Wadeville R3 425 000* R3 425 000
Smith Manufacturing, R3 200 000* R3 200 000
New Germany
Derrick Road, Spartan R3 150 000* R3 150 000
Tredcor Parow R1 700 000* R1 700 000
Auto Aircon Exchange, R1 650 000* R1 650 000
Edenvale
Shell Richards Bay R1 000 000* R1 000 000
Gross R19 525 000 R19 525 000
Transaction costs - (R853 452)
Net R19 525 000 R18 671 548
* Where the company has a binding agreement of sale at the financial year end
(31 December) and transfer of the property has not taken place, the policy is to
use the sale price as market value.
2.4.2 Disposals awaiting transfer and not derecognised from the balance sheet
Property Valuation at 31 Sold for
December 2003
Vanderbijlpark Mall R37 670 000 R40 500 000
Voltex Gezina R4 930 000 R5 500 000
5th Street Wynberg R2 000 000 R2 270 000
Ellerines Nigel R920 000 R1 061 000
Shell Orchards R820 000 R1 100 000
Boardroom Coffee, R780 000 R1 000 000
Eastgate
Supa Quick Klerksdorp R630 000 R750 000
Telkom Welkom R600 000 R675 000
R48 350 000 R52 856 000
This list excludes properties sold to Capital Property Fund, as the sale is
conditional upon approval by Capital unitholders.
3. Prospects
The market for quality industrial properties is firm with vacancies at the
lowest levels in years. Rentals are still below levels needed to justify new
developments which augurs well for this market. The retail portfolio should
continue to benefit from strong trading conditions supported by the programme of
refurbishments and extensions.
A number of the property disposals are however yield dilutionary and this will
limit growth in the remaining 6 months of the financial year.
4. Payment of interim distribution
The board has approved and notice is hereby given of an interim distribution of
42,71 cents per linked unit for the 6 months to 30 June 2004 (2003: 45,10 cents
per linked unit for the 7 months to 30 June 2003).
The last date to trade linked units cum-distribution will be Friday 27 August
2004 and trading will commence ex-distribution on Monday 30 August 2004. The
record date to participate in the distribution will be Friday 3 September 2004.
Linked unit certificates may not be dematerialised or rematerialised between
Monday 30 August 2004 and Friday 3 September 2004, both days inclusive.
Payment of the distribution will be made to linked unitholders on Monday 6
September 2004. In respect of dematerialised linked unitholders, the
distribution will be transferred to the Central Securities Depository
Participant accounts/broker accounts on 6 September 2004. Certificated linked
unitholders` distribution payments will be posted on or about 6 September 2004.
By order of the Board
Dr AS Nkonyeni D de Beer
Chairman Managing Director
Johannesburg
10 August 2004
Registered office Transfer secretaries
57 6TH Road Ultra Registrars (Pty) Ltd
Hyde Park 11 Diagonal Street
2196 Johannesburg
2001
DIRECTORS:
AS Nkonyeni (Chairman)#, JJG da Costa#, D de Beer*, MP Greyling#, JG Kirchner#,
DJ Lewis*, MJN Njeke#, BL Stuhler#, PA Theodosiou#, R Turner#, BD van Wyk#, JJ
van Wyk*, JN Zidel*
Alternate directors: JJ Kriek, MH Muller
Company secretary: JJ van Wyk
# Independent non-executive
* Executive director
Date: 10/08/2004 05:15:09 PM Produced by the JSE SENS Department
