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Pangbourne - Audited Financial Results Announcement
Pangbourne Properties Limited
(`Pangbourne`)
(Incorporated in the Republic of South Africa)
(Registration number 1987/002352/06)
Share code: PAP ISIN: ZAE000005252
AUDITED FINANCIAL RESULTS
FOR THE YEAR ENDED 30 JUNE 2004 SUSTAINABLE GROWTH
* Increase in distribution to 91,5 cents
* Occupancies up to 93,8%
* Gearing at 33,9% allowing for further expansion
* Ongoing benefits of in-house management still evident
* Issued share capital 178 256 514 (2003: 176 033 514) ordinary shares of 1
cent each
* Issued debentures 1 604 307 626 (2003: 1 584 301 626) unsecured variable
rate debentures of 50 cents each
* Issued combined units 178 256 514 (2003: 176 033 514)
* Weighted average combined units 176 130 961 (2003: 175 981 149)
ABRIDGED CONSOLIDATED INCOME STATEMENT
Year to
R`000 30.06.04 30.06.03
Revenue 291 907 275 846
Profit from rental income, investment
income and fees received 197 913 192 711
Net profit on disposal of investments 15 831 8 789
Net trading profit 213 744 201 500
Revaluation of investment properties 36 743 41 182
Revaluation of investments held-for-trade 1 683 13 974
Net profit on disposal of investment
properties 14 703 12 822
Goodwill amortised and realised (11 559) (8 930)
Negative goodwill amortised and realised 28 307 33 824
Profit before interest and taxation 283 621 294 372
Interest received 13 269 15 485
Finance costs (64 321) (60 055)
Movement in fair value of interest
rate swaps (949) (17 218)
Amortisation of intangible assets (3 253) -
Profit before taxation and distribution
to unitholders 228 367 232 584
Debenture interest - debt portion (81 860) (81 860)
Amortised debenture interest (2 316) (1 990)
Profit before taxation 144 191 148 734
Taxation 6 934 (6 822)
Notional taxation reversed in statements
of changes in equity* (23 136) (21 509)
Share of profit/(loss) from associates 3 710 (340)
Profit for the year 131 699 120 063
*GAAP requires that the company segregate its debentures and debenture interest
into debt and equity components in the balance sheet, income statement and
statement of changes in equity. This gives rise to a profit in the income
statement in respect of which a notional tax charge of R23,1 million has been
raised, which provision is reversed in the statement of changes in equity where
the equity portion of interest is reflected.
RECONCILIATION BETWEEN EARNINGS AND HEADLINE EARNINGS
for the year ended 30 June 2004
Profit
before taxation Taxation
Cents Cents Cents
R`000 per unit R`000 per unit
Profit after share
of profit from
associates 147 901 83,97 (16 202) (9,20)
Adjustments
Revaluation of
investment properties (36 743) (20,87) 5 512 3,14
Net goodwill amortised
and realised (16 748) (9,51) - -
Net profit on disposal
of investment properties (14 703) (8,35) 2 206 1,26
Adjustments for
associates (5 074) (2,88) 958 0,56
Headline earnings as
per South African
Statements of GAAP per
combined unit 74 633 42,36 (7 526) (4,24)
RECONCILIATION BETWEEN EARNINGS AND HEADLINE EARNINGS (continued)
for the year ended 30 June 2004
Net profit Year ended
after taxation 30.06.03
Cents Cents
R`000 per unit R`000 per unit
Profit after share
of profit from
associates 131 699 74,73 120 063 68,23
Adjustments
Revaluation of
investment property (31 231) (17,73) (35 005) (19,90)
Net goodwill amortised
and realised (16 748) (9,51) (24 894) (14,15)
Net profit on disposal
of investment
property (12 497) (7,09) (10 899) (6,19)
Adjustments for
associates (4 116) (2,32) 576 0,33
Headline earnings as
per South African
Statements of GAAP
per combined unit 67 107 38,12 49 841 28,32
SEGMENTAL INFORMATION
for the year ended 30 June 2004
Property Property Transfer
R`000 Property stock stock duty
Primary segment management trading investments finance
Revenue
Rentals 197 537 - - -
Financing fees 377 - - 6 635
Facilitation fees 10 200 - - -
Promoters fees 8 693 - - -
Management fees 6 286 - - -
Interest distributions - - 49 402 -
Total revenue 223 093 - 49 402 6 635
R`000
Segment results
Profit before taxation
and distribution
to unitholders 212 121 17 514 49 402 1 875
212 121 17 514 49 402 1 875
SEGMENTAL INFORMATION (continued)
for the year ended 30 June 2004
R`000 Bridging Agents
finance commission Corporate Total
Revenue
Rentals - - - 197 537
Financing fees 5 784 6 015 978 19 789
Facilitation fees - - - 10 200
Promoters fees - - - 8 693
Management fees - - - 6 286
Interest distributions - - - 49 402
Total revenue 5 784 6 015 978 291 907
R`000
Segment results
Profit before taxation
and distribution
to unitholders 1 633 1 698 (55 876) 228 367
1 633 1 698 (55 876) 228 367
Segment revenue and expenses
Revenue and expenses that are directly attributable to a segment are allocated
to those segments. Expenses not directly attributable to a segment are allocated
to the corporate segment.
ADDITIONAL INFORMATION FOR INVESTORS (UNAUDITED)
Compliance with SA Statements of GAAP, which are in the process of being
harmonised with IAS, and their application on the property loan stock structure,
which is unique to South Africa, has made it difficult for users to interpret
these financial statements. This investor information insertion is aimed at
disclosing to the users the basis on which the distribution per weighted average
number of combined units in issue, was calculated. A reconciliation has been
included to illustrate the accounting adjustments which were not taken into
account in calculating the distribution.
DISTRIBUTABLE EARNINGS
for the year ended 30 June 2004
Group
2004 2003
R`000 R`000
Revenue 291 907 275 846
Net building costs (44 779) (46 554)
Administrative costs (49 215) (36 581)
Net profit on disposal of investments 15 831 8 789
Non-cash portion of profit on disposal
of loans (2 200) -
Interest received 13 269 15 485
Finance costs (64 321) (60 055)
Cash share of profits/(losses) from
associates 1 347 (340)
STC on dividend declared (400) (386)
Distributable earnings 161 439 156 204
Investors distributable earnings
per combined unit
Weighted average number of combined
units in issue 176 131 175 981
Distributable earnings per combined unit 91,66 88,76
RECONCILIATION TO PROFIT
for the year ended 30 June 2004
Group
2004 2003
R`000 R`000
Distributable earnings 161 439 156 204
Revaluation of investment properties 36 743 41 182
Revaluation of listed investments
held-for-trade 1 683 13 974
Negative goodwill - amortised 17 616 21 507
- realised 10 691 12 317
Goodwill - amortised (8 998) (5 791)
- realised (2 561) (3 139)
Net profit on disposal of investment properties 14 703 12 822
Non-cash portion of profit on disposal
of loans 2 200 -
Movement in fair value of interest rate swaps (949) (17 218)
Amortisation of intangible asset (3 253) -
Non-cash portion of profits from associate 2 363 -
Profit before taxation and distribution to
unitholders (excluding STC and
equity earnings) 231 677 231 858
Debenture interest - debt portion (81 860) (81 860)
Amortised debenture interest (2 316) (1 990)
Profit before taxation (excluding STC
and equity earnings) 147 501 148 008
Taxation (15 802) (27 945)
Profit for the year 131 699 120 063
Net asset value per unit with iFour
investment carried at market value (cents) 642 577
(excluding negative goodwill and
including debenture debt portion)
CHANGES IN COMPARATIVE FIGURES
A recent ruling laid down by the GAAP Monitoring Panel has provided clarity
regarding the consolidation of share incentive schemes. The Group has
accordingly consolidated the Pangbourne Executive Unit Purchase Trust in the
current financial year. Comparative figures have been restated as required.
ABRIDGED CONSOLIDATED BALANCE SHEET
As at
R`000 30.06.04 30.06.03
ASSETS
Non-current assets
Investment properties 1 100 223 1 200 538
Equipment, furniture and fittings 8 454 6 634
Intangible asset 11 384 -
Goodwill 7 801 19 360
Negative goodwill (28 829) (57 136)
Investments and loans in associates 394 811 117 306
Long-term loans 3 836 3 773
Deferred taxation assets 14 948 12 854
Loans for purchase scheme units 78 971 70 094
Current assets
Bank and cash 9 072 11 674
Receivables 89 122 60 758
Other receivables 78 875 18 000
Investments held-for-trade 23 290 162 592
Current portion of long-term loans 1 090 1 640
Total assets 1 793 048 1 628 087
EQUITY AND LIABILITIES
Capital and reserves 387 420 297 959
Debentures debt portion 661 926 659 610
Other interest-bearing borrowings 523 462 442 486
Fair value of interest rate swaps 12 006 11 057
Deferred taxation liabilities 56 632 61 883
Current liabilities
Payables 32 712 25 406
Current portion of interest-bearing
borrowings 28 833 43 462
Unitholders for distribution 90 057 86 224
1 793 048 1 628 087
Net debt: income earning assets 33,90% 30,48%
Net asset value per unit excluding negative
goodwill and including debenture debt
portion (cents) 612 577
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year to
R`000 30.06.04 30.06.03
Balance at beginning of year 297 959 232 187
- as previously stated 232 601
- consolidation of share trust (414)
Profit for the year 131 699 120 063
AC133 transition adjustment -
June 2003 opening reserve adjustment - 6 161
Deferred tax on AC133 transition
adjustment - (1 848)
Arising on purchase of treasury shares
during the year - (922)
Arising on issue of treasury shares during
the year 16 276 509
Reversal of notional taxation on debenture
interest - equity portion 23 136 21 509
Distribution to unitholders:
debenture interest - equity portion (77 120) (71 698)
Distribution to unitholders: dividend
portion (3 180) (3 071)
Profit on sale of treasury shares during
the year - 403
Net loss on disposal of investments
available-for-sale (1 350) -
Adjustment to fair value of long-term
investments - (6 275)
Deferred tax on adjustment in fair value
of long-term investments - 941
Balance at end of year 387 420 297 959
DISTRIBUTION DECLARED PER COMBINED UNIT
A distribution of 49,00 cents per combined unit, comprising dividend number 36
of 0,9608 cents per share and interest on debentures calculated at 48,0392 cents
per combined unit was declared on 29 June 2004.
Timetable of events
Event Date
Last date to trade cum distribution Friday, 1 October 2004
Combined units trade ex
distribution Monday, 4 October 2004
Record date for unitholders to
participate in the distribution Friday, 8 October 2004
Payment of distribution to
holders of dematerialised units Monday, 11 October 2004
Payment of distribution to holders
of certificated units on or about Monday, 11 October 2004
Combined unit certificates Between Monday, 4 October 2004
may not be rematerialised or and Friday, 8 October 2004
dematerialised (both days inclusive)
Annual General Meeting Thursday, 14 October 2004
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
Year to
R`000 30.06.04 30.06.03
Cash generated from operations 68 000 134 729
Net finance costs (51 052) (44 570)
Investment income 49 402 37 332
Taxation paid (228) (361)
Cash flow from operating activities before
distribution to unitholders 66 122 127 130
Distributions to unitholders (158 327) (113 140)
Cash flow from operating activities (92 205) 13 990
Cash flow from investing activities 23 256 (73 396)
Cash flow from financing activities 66 347 72 005
Net (decrease)/increase in cash and
cash equivalents (2 602) 12 599
Cash and cash equivalents at beginning
of year 11 674 (925)
Cash and cash equivalents at end of year 9 072 11 674
Year to
30.06.04 30.06.03
Diluted and non-diluted earnings and
distribution per combined unit
Headline earnings per combined unit (cents) 38,12 28,32
Distribution per combined unit (cents) 91,50 89,00
Diluted and non-diluted earnings and
distribution per share
Earnings per share before equity portion of
debenture interest (cents) 74,77 68,22
Distribution per share (cents) 1,81 1,75
Distributions to combined unitholders
Debenture interest debt portion 81 860 81 860
Debenture interest equity portion 77 120 71 698
Dividends 3 180 3 071
Total distribution 162 160 156 629
COMMENTARY
OPERATIONAL REVIEW
Investors` attention is drawn to the `Additional information for investors`
block. Detailed in this block is the calculation which management utilises in
order to calculate the distributable earnings, on which the distribution to
unitholders is based.
RESULTS
Total distribution for the year has increased to 91,5 cents per unit (2003: 89,0
cents per unit).
The increase in revenue is primarily due to hardening of rentals, investment
income received from Pangbourne`s interest in iFour together with management
fees received, distributions received from ApexHi and revenue received by
PaForma.
OCCUPANCIES
Occupancies increased from 90,7% at 30 June 2003 to 93,8% at 30 June 2004. This
increase is primarily due to the buoyancy in the market as well as the increase
in demand on the East Rand.
The addition of the Strupot portfolio will marginally reduce the occupancies.
This is seen as an opportunity to obtain full value from the purchase, and to
once again increase occupancies.
ASSET MANAGEMENT
A total of 24 buildings were sold to iFour for R267 million in exchange for
iFour units which were issued at R5,00 per unit. An additional 26 properties
were disposed of for a total of R48 million to various purchasers. Pangbourne
has acquired 14 properties in the current financial year for R122 million, the
bulk of these properties being the Congella portfolio.
VALUATION OF PROPERTIES
Each year one-third of the properties are valued on a rotational basis by a
member of the Institute of Valuers. The entire portfolio is, however, valued
each year by the directors using a proven model based on current levels of
occupancy, the results of which are compared with those of the prior year and
the independent valuations of the current year. 81 properties were valued
externally resulting in a R13 million increase in value, with 156 properties
being valued internally resulting in a R24 million increase in value. The total
value of the property portfolio is currently valued at R1100 million, which will
increase to R1528 million with the bulk up of Strupot. The market value of the
investment in iFour is currently R428 million.
DEBT MANAGEMENT
Borrowings, excluding debenture debt portion amounted to R552 million at 30 June
2004 at an average interest cost of 12,11%. Net borrowings currently represent
33,90% of income-earning assets, below the 40% limit set by the board. The
acquisition of the Strupot portfolio is expected to utilise the majority of the
company`s unused facilities.
PROSPECTS
Interest rates are expected to be relatively stable over the next
12 months and this, coupled with a rand at consistent levels, is expected to
boost consumer confidence. The acquisition of the
R430 million Strupot portfolio will benefit the distributions in the coming
year. In addition, we currently have very little space available in the
portfolio and rentals are beginning to increase which should lead to an increase
in distributions this year.
DISTRIBUTIONS
Unitholders` attention is drawn to the timetable of events which gives details
of the final distribution to be paid in October and the date of the annual
general meeting.
P L Campbell Chairman A M A Campbell CEO
26 August 2004
Pangbourne Properties Limited
2nd Floor, Pangbourne House
382 Jan Smuts Avenue,
Craighall, Johannesburg
Directors: P L Campbell (Chairman), A M A Campbell* (CEO),
L S Barnard, J B Gibbon, C K Hickling, C M Hutchison*, D J Kennedy*,
A J W L Richards*, B M H Tsita.
Secretary: J J Groenewald
*Executive
These results have been audited by Deloitte & Touche and their unqualified audit
report is available for inspection at the registered office of Pangbourne.
Date: 26/08/2004 05:48:32 PM Supplied by www.sharenet.co.za
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