| Tue 17 Aug 2004, 17:21 | | Hyprop - Financial Report |
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Release Date: 17/08/2004 16:59:41
Hyprop - Financial Report
2004/08/17 16:59:41
HYP Hyprop - Financial Report Hyprop Investments Limited (Incorporated in the Republic of South Africa) (Registration No. 1987/005284/06) Share code: HYP ISIN number: ZAE00003430 (`Hyprop`) HYPROP INVESTMENTS LIMITED REVIEWED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2004 HIGHLIGHTS >> DISTRIBUTION PER COMBINED UNIT UP 18% >> HEADLINE EARNINGS PER COMBINED UNIT UP 18% >> OPERATING INCOME UP 82% GROUP INCOME STATEMENT Reviewed Reviewed Audited 30 Jun 30 Jun 31 Dec 2004 2003 2003 R000 R000 R000 Turnover 252 585 135 837 316 691 Operating income 152 665 84 096 195 251 Net finance charges (53 720) (14 043) (43 522) Interest received 1 844 309 1 767 Interest paid (55 564) (14 352) (45 289) Net operating income 98 945 70 053 151 729 (Loss)/profit on disposal of investment properties - (30) 6 814 Loss on disposal of financial assets (451) - - Profit on disposal of investment in associate 650 - - Change in fair value of financial assets (1 634) - 2 069 Change in fair value of investment properties - - 116 684 Income before debenture interest and taxation 97 510 70 023 277 296 Debenture interest paid (71 400) (57 829) (124 364) Income before taxation 26 110 12 194 152 932 Taxation (792) (14) (21 160) Current taxation (264) - - Secondary tax on companies (22) (14) (31) Deferred taxation (506) - (21 129) Net income after taxation 25 318 12 180 131 772 Minority interest (25 020) (10 563) (64 149) Loss from associates - (84) (223) Net profit for the period 298 1 533 67 400 EARNINGS AND HEADLINE EARNINGS Earnings per combined unit (cents) 79,2 66,7 215,4 Headline earnings per combined unit (cents) 78,6 66,7 142,4 Earnings per share (cents) 0,3 1,7 75,7 Headline (loss)/earnings per share (cents) (0,3) 1,8 2,7 Reconciliation - Headline earnings Net profit for the year 298 1 533 67 400 Headline earnings adjustments (549) 30 (64 980) Change in fair value of investment properties (net of deferred taxation and minority interests) - - (58 530) Loss/(profit) on disposal of investment properties (net of CGT) - 30 (6 450) Profit on disposal of investment in associate (net of CGT) (549) - - Headline (loss)/earnings - shares (251) 1 563 2 420 Debenture interest paid 71 400 57 829 124 364 Headline earnings - combined units 71 149 59 392 126 784 Total combined units in issue 98 009 179 89 009 179 89 009 179 Weighted average combined units 90 509 179 89 009 179 89 009 179 Total Interest Dividends Distribution on on per combined deben- ordinary unit tures shares (cents (cents (cents Distribution details per unit) per unit) per unit) Distribution number 33 for seven months ended 31 July 2004 89,000 88,820 0,180 For July 2004 12,000 11,976 0,024 For six months ended 30 June 2004 77,000 76,844 0,156 Total distribution for year ended 31 December 2003 140,000 139,720 0,280 Distribution number 32 for six months ended 31 December 2003 74,900 74,750 0,150 Distribution number 31 for six months ended 30 June 2003 65,100 64,970 0,130 GROUP STATEMENT OF CHANGES IN EQUITY Non-dis- Reva- Share tributable luation Retained capital reserve reserve income Total Group R000 R000 R000 R000 R000 Balance at 1 January 2003 648 9 050 245 601 5 447 260 746 Issue of ordinary share capital 243 243 Net profit for the period 1 533 1 533 Transfer to revaluation reserve (net of deferred taxation) 807 (807) - Dividends 117) (117) Balance at 30 June 2003 891 9 050 246 408 6 056 262 405 Balance at 1 January 2004 891 8 768 311 374 7 107 328 140 Issue of ordinary share capital 90 90 Net profit for the period 298 298 Net transfer from non- distributable reserve (1 203) 1 203 - Dividends (145) (145) Balance at 30 June 2004 981 7 565 311 374 8 463 328 383 GROUP BALANCE SHEET Reviewed Reviewed Audited 30 Jun 30 Jun 31 Dec 2004 2003 2003 R000 R000 R000 Assets Non-current assets Investment properties 2 736 604 1 470 016 2 715 680 Current assets 42 343 12 400 105 298 Trade and other receivables 15 900 10 428 70 336 Financial assets 19 007 791 25 939 Cash and cash equivalents 7 436 1 181 9 023 Total assets 2 778 947 1 482 416 2 820 978 Equity and liabilities Equity 754 989 421 711 760 518 Share capital and reserves 328 383 262 405 328 140 Minority interest 426 606 159 306 432 378 Non-current liabilities 1 907 973 974 645 1 948 412 Debentures 483 185 438 815 438 815 Debenture premium 353 650 273 887 273 891 Deferred taxation 28 222 6 586 27 716 Long-term liabilities 1 042 916 255 357 1 207 990 Current liabilities 115 985 86 060 112 048 Trade and other payables 40 479 28 100 45 348 Taxation 39 15 32 Unitholders for distribution 75 467 57 945 66 668 Total equity and liabilities 2 778 948 1 482 416 2 820 978 Net asset value per combined unit (R) 11,89 10,96 11,69 ABRIDGED GROUP CASH FLOW STATEMENT Reviewed Reviewed Audited 30 Jun 30 Jun 31 Dec 2004 2003 2003 R000 R000 R000 Cash flows from operating activities 57 307 22 039 (2 586) Cash generated from operations 204 843 89 671 167 041 Interest income 1 844 309 1 767 Finance charges (55 564) (14 352) (45 288) Distribution to unitholders (62 745) (42 903) (100 848) Cash distributed to minorities (30 793) (10 676) (25 247) Taxation (278) (10) (11) Cash flows from investing activities (18 039) (102 190) (1 271 328) Cash flows from financing activities (40 855) 78 086 1 279 691 Net (decrease)/increase in cash and cash equivalents (1 587) (2 065) 5 777 Cash and cash equivalents at beginning of the period 9 023 3 246 3 246 Cash and cash equivalents at end of the period 7 436 1 181 9 023 BASIS OF PREPARATION The unaudited interim financial statements have been prepared in accordance withSouth African Statements of Generally Accepted Accounting Practice. The accounting policies applied in the preparation of the unaudited interim financial statements are consistent with those applied in the audited financial statements for the year ended 31 December 2003. REVIEW OPINION Grant Thornton has reviewed the financial information set out in this report andtheir unqualified review report is available for inspection at the Company`s registered office. COMMENTS INTRODUCTION Hyprop continued its strong performance of recent years. Headline earnings per combined unit of 78,61 cents increased by 18% over the comparative period ended 30 June 2003. Turnover and operating income for the period increased by 86% and 82% respectively over the comparative period, due to the expansion of Hyprop`s real estate portfolio and excellent trading results from its shopping centres, in particular, Canal Walk. The performance was further supported by lower interest rates. DISTRIBUTIONS Hyprop combined unitholders are referred to the interim distribution announcement for the seven months ended 31 July 2004, published on 9 July 2004. The Company paid the interim distribution of 89,00 cents per combined unit for the seven months to 31 July 2004, 77,00 cents for six months to 30 June 2004 and12,00 cents for July 2004. The 77,00 cents distribution for the six months to 30June 2004 is 18% higher than the distribution for the comparative period. Hyprop, in accordance with policy, has resolved to distribute substantially all of its distributable income for the year ending 31 December 2004. RIGHTS OFFER On 16 August 2004, implementation of the rights offer to combined unitholders was completed. The issue of 18 621 744 new combined units at a price of R13,50 per combined unit raised R251,4 million, which will be utilised towards reducingborrowings and facilitating future investments. The new combined units rank paripassu with existing combined units with effect from 1 August 2004. ACQUISITIONS Hyprop`s combined unitholders approved the acquisition of an additional 25,05% interest in The Glen Shopping Centre (`The Glen`) for a purchase consideration of R112,80 million. The acquisition will increase Hyprop`s interest in the Glen to 75,15%. The consideration is payable in cash on the transfer date, anticipated to be during September 2004. The acquisition is expected to achieve an initial forward yield of 10,4%. DISPOSALS To date, in accordance with its strategy, Hyprop has disposed of 6 435 000 PrimaProperty Trust (`Prima`) units at a price of 90 cents per unit, the same price at which the units were acquired. Hyprop is currently in discussions with various parties for the disposal of certain commercial properties that do not align with its overall investment strategy. DEVELOPMENTS Hyde Park Shopping Centre (`Hyde Park`) During the period, the R30 million multi-storey parking extension and expanded Woolworths store were successfully completed within budget and are expected to realise an initial yield of 12,5%. The Glen The 6 000 m2 extension to The Glen at an estimated cost of R86 million is currently in progress, with completion scheduled for November 2004. Hyprop`s share, amounting to R64,60 million, is expected to yield an initial 12,5% return. BORROWINGS At 30 June 2004 Hyprop`s borrowings amounted to R1,04 billion, equating to a 45%debt-to-open market value ratio. Interest rates have been fixed to the extent of88% of borrowings for periods ranging from one to three years. VALUATION OF INVESTMENT PROPERTIES In accordance with Hyprop`s policy, investment properties are valued annually atthe financial year-end. LETTING ACTIVITIES The retail portfolio continues to benefit from strong consumer spend. Hyprop`s high-quality centres in prime locations have ensured low vacancies, with furtherimprovement expected in the second half of the year. Focus of the commercial portfolio remains on tenant retention and reduction of vacancies. Demand for office space is less than satisfactory, inhibiting growth in market rentals. Letting activities for the period by rentable area were as follows: Activities for the period ended 30 June 2004 Tenants Additional Renewals New lettings vacated area Business segment (m2) (%) (m2) (%) (m2) (%) (m2) (%) Retail Hyde Park 867 0,3 2 765 0,8 1 141 0,3 1 265 0,4 The Glen 532 0,2 143 0,0 - - (749) (0,2) The Mall 2 069 0,6 2 686 0,8 1 556 0,5 688 0,2 Canal Walk 811 0,2 4 085 1,2 1 272 0,4 - - Sub-total 4 279 1,3 9 679 2,8 3 969 1,2 1 204 0,4 Commercial 7 870 2,3 4 080 1,2 3 409 1,0 - - Total 12 149 3,6 13 759 4,0 7 378 2,2 1 204 0,4 Available for letting by rentable area at 30 June 2004: 30 June 2004 31 December 2003 Business segment (m2) (%) (m2) (%) Retail Hyde Park - - 359 0,1 The Glen 67 0,0 959 0,3 The Mall 178 0,1 620 0,2 Canal Walk 6 526 1,9 9 339 2,8 Sub-total 6 771 2,0 11 277 3,4 Commercial 10 812 3,2 11 483 3,4 Total 17 583 5,2 22 760 6,8 PROSPECTS The outlook to year-end remains positive. Hyprop is on track to achieve its headline earnings forecast of 150,50 cents per combined unit for the year ending31 December 2004. On behalf of the board PF Kirchmann PG Prinsloo Chairman Managing Director 17 August 2004 REGISTERED OFFICE Hyde Park Shopping Centre Jan Smuts Avenue Sandton 2196 PO Box 41257 Craighall 2024 TRANSFER SECRETARIES Computershare Investor Services 2004 (Proprietary) Limited Ground Floor 70 Marshall Street Johannesburg PO Box 61051 Marshalltown 2107 SPONSOR Java Capital (Proprietary) Limited DIRECTORS PF Kirchmann* (Chairman) PG Prinsloo (Managing Director) MS Aitken* J Bentel*WE Cesman* S Shaw-Taylor* PJ Thurling* M Wainer* SV Webb* LI Weil* PL Whewell* *Non-executive directors COMPANY SECRETARY LR Cohen CA(SA) << www.hyprop.co.za
