| Mon 4 Oct 2004, 11:43 | | RESULTS FOR THE YEAR ENDED 31 AUGUST 2004 |
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REDEFINE INCOME FUND LIMITED - AUDITED RESULTS FOR THE YEAR ENDED 31 AUGUST 2004
REDEFINE INCOME FUND LIMITED
Registration number: 1999/018591/06
Share code: RDF ISIN: ZA000023503
AUDITED RESULTS FOR THE YEAR ENDED 31 AUGUST 2004
* Distribution per linked unit increased by 7.56%
* NAV per linked unit increased by 14.94%
* Property portfolio 94.7% leased
CONSOLIDATED INCOME STATEMENT
Audited Audited
31 Aug 2004 31 Aug 2003
R000 R000
Revenue
Property portfolio 238 953 197 919
Listed security portfolio 181 705 164 174
420 658 362 093
Operating costs - property portfolio 78 342 52 691
Administration costs 18 069 17 415
Operating profit 324 247 291 987
Net capital gain on non-current assets 192 936 51 340
Profit from operations 517 183 343 327
Interest received 3 572 6 657
Profit before finance charges 520 755 349 984
Finance charges 181 983 182 447
Profit before taxation 338 772 167 537
Taxation - -
Profit attributable to linked unitholders 338 772 167 537
Headline earnings and distributions
Profit attributable to linked unitholders 338 772 167 537
Net capital gain on non-current assets (192 936) (51 340)
Headline earnings and total distributions 145 836 116 197
- First quarter 32 068 29 135
- Second quarter 36 622 34 966
- Third quarter 38 227 25 369
- Fourth quarter 38 919 26 727
Earnings per linked unit
Actual number of linked units in issue (000) 474 705 413 016
Weighted number of linked units in issue (000) 455 262 392 839
Earnings per linked unit (cents) 74.41 42.65
Headline earnings per linked unit (cents) 32.03 29.58
Distribution per linked unit (cents) 32.00 29.75
Net asset value per linked unit (cents) 276.99 240.79
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Audited Audited
31 Aug 2004 31 Aug 2003
R000 R000
Balance at beginning of period 994 503 761 457
- As previously stated 994 503 753 666
- Gains on interest rate swaps - 7 791
Issue of linked units 155 700 226 143
Issue expenses written-off (542) (1 178)
Net change in interest rate swaps (27 696) (43 259)
Profit attributable to linked unitholders 338 772 167 537
Distributions to linked unitholders (145 836) (116 197)
1 314 901 994 503
CONSOLIDATED BALANCE SHEET
Audited Audited
31 Aug 2004 31 Aug 2003
R000 R000
ASSETS
Non-current assets 2 694 514 2 448 578
Property portfolio 1 345 043 1 139 256
Listed security portfolio 1 349 471 1 309 322
Current assets 196 936 76 729
Trading securities 492 5 392
Deposits, pre-payments and other receivables 24 393 19 667
Tenant debtors 9 896 6 384
Listed security disposals 74 041 -
Listed security distributions 20 140 45 262
Cash and cash equivalents 67 974 24
Total assets 2 891 450 2 525 307
EQUITY AND LIABILITIES
Capital and reserves 1 314 901 994 503
Linked unit capital 1 038 636 883 478
Non-distributable reserve 339 429 146 493
Deficit on interest rate swaps (63 164) (35 468)
Non-current liabilities 1 508 084 1 468 072
Interest-bearing liabilities 1 410 477 1 432 604
Interest rate swaps 63 164 35 468
Deferred taxation 34 443 -
Current liabilities 68 465 62 732
Interest-bearing liabilities 5 587 17 086
Trade and other payables 23 959 15 754
Bank overdraft - 3 165
Unitholders for distribution 38 919 26 727
Total equity and liabilities 2 891 450 2 525 307
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Audited Audited
31 Aug 2004 31 Aug 2003
R000 R000
Cash effects from operating activities 43 315 (15 085)
Cash generated from operations 355 370 279 900
Net financing costs (178 411) (175 790)
Linked unit distributions paid (133 644) (119 195)
Cash effects of investing activities (93 732) (503 242)
Net property acquisitions (181 234) (403 936)
Net listed security disposals (acquisitions) 87 502 (99 306)
Cash effects from financing activities 121 532 548 214
Linked units issued 155 158 224 965
Net movement in borrowings (33 626) 323 249
Net movement in cash and cash equivalents 71 115 29 887
Opening cash and cash equivalents (3 141) (33 028)
Closing cash and cash equivalents 67 974 (3 141)
COMMENTARY
REVIEW OF RESULTS
Redefine Income Fund Limited (`Redefine`) has maintained its interest
distribution at 8.25 cents per linked unit for the final quarter of the
financial year ended 31 August 2004. Distributions for the year ended 31 August
2004 of 32.00 cents (2003: 29.75 cents) per linked unit have exceeded the
forecast of 31.00 cents per linked unit.
Headline earnings are 32.03 cents (2003: 29.58 cents) per linked unit.
Non-current assets at 31 August 2004 increased by 10,04% to R2.69 billion. Net
Asset Value per linked unit is R2.77 (2003: R2.41).
PROPERTY PORTFOLIO
Twenty-one non-core properties with capital values below R20 million were sold
during the year under review. The acquisition of four prime investment
properties, 2 Arnold Road in Rosebank, Hatfield Square in Pretoria, Standard
Bank Centre in Cape Town and Motown in Durban, for R333 million increased the
property portfolio, which comprises seventy- three properties, to R1.345 billion
and the GLA to 453 872m2.
Sectoral spread by revenue is 65% commercial, 22% retail and 13% industrial. The
property portfolio comprises predominantly A-grade tenants with the balance
being B-grade.
The lease expiry profile is significantly better than the sector average with
54% of leases expiring in 2008 and beyond. At 31 August 2004 the property
portfolio was 94.7% leased.
During the year under review 34 093m2 of vacant space was leased and leases in
respect of 25 827m2 were renewed.
LISTED SECURITIES PORTFOLIO
Redefine`s listed securities portfolio increased by R40 million as a result of
an increase in market value of R176 million less net disposals of R136 million.
The listed securities portfolio at 31 August 2004 was valued at R1.35 billion.
CAPITAL GAIN ON NON-CURRENT ASSETS
The net capital gain on non-current assets comprises realised profits less
losses on sale and profits on revaluation of the property and listed security
portfolios as follows:
2004 2003
R000 R000
Listed security portfolio - unrealised profit 175 799 93 729
Listed security portfolio - realised profit on sale 25 893 29 674
Property portfolio - unrealised profit (loss)
on independent revaluation 29 078 (68 773)
Property portfolio - realised loss on sale (3 391) (3 290)
Deferred Capital Gains Tax (34 443) -
192 936 51 340
INTEREST RATE MANAGEMENT
Redefine`s borrowings of R1.41 billion equates to 52% (2003: 58%) of non-current
assets. It is Redefine`s intention to reduce gearing in the medium term to 45%.
ODD-LOT OFFER
Redefine has issued a circular to linked unitholders requesting approval to make
an odd-lot offer. The offer is compulsory to linked unitholders holding 99
linked units or less and voluntary to those holding between 100 and 999 linked
units and has been proposed in order to decrease the substantial recurring costs
of administration, estimated at R621 000 per annum, resulting from the large
number of odd-lot linked unitholders on its register.
POST-BALANCE SHEET EVENTS
Redefine has purchased 90 Rivonia Road in Sandton (subject to linked unit-
holder approval), 90 Grayston Drive in Sandton and an undivided 50% share in a
property at Shelly Beach in KwaZulu-Natal on which a shopping centre will be
developed, for an aggregate consideration of R155.5 million. Redefine has
disposed of seven properties for a total consideration of R50.3 million.
Redefine has disposed of 3.9 million ApexHi Properties Limited A-linked units
for an aggregate consideration of R33.3 million.
DIRECTORATE
Jeffrey Kron has resigned as a non-executive director due to professional
commitments.
PROSPECTS
Growth in distribution per linked unit is anticipated for the year ending 31
August 2005.
INTEREST DISTRIBUTION
Unitholders are advised that interest distribution No. 18 in respect of the
period of 1 June 2004 to 31 August 2004 of 8.25 cents per linked unit has been
declared.
The last date to trade cum interest Friday, 22 October 2004
Linked units will trade ex interest Monday, 25 October 2004
Record date Friday, 29 October 2004
Payment of interest distribution No. 18 Monday, 1 November 2004
Unitholders may not dematerialise or rematerialise their linked units between
Monday, 25 October 2004 and Friday, 29 October 2004, both days inclusive.
Linked unitholders electing to sell their linked units in terms of the odd-lot
offer will be entitled to the proceeds from interest distribution No 18.
Linked unitholders electing to subscribe for additional linked units in terms of
the odd-lot offer will not be entitled to the proceeds from interest
distribution No. 18 on their subscription units.
Wolf Cesman Brian Azizollahoff
Chairman Chief Executive Officer
4 October 2004
BASIS OF PREPARATION
The financial results are determined in accordance with South African Statements
of Generally Accepted Accounting Practice and the accounting policies applied
are consistent with those applied in the previous financial year.
AUDIT OPINION
The financial results have been audited by Fisher Hoffman PKF (Jhb) Inc. and
their unqualified opinion is available for inspection at the registered
office of Redefine Income Fund Limited.
REDEFINE INCOME FUND LIMITED
2 Arnold Road, Rosebank, Johannesburg.
PO Box 1731, Parklands, 2121, South Africa.
Telephone +27 11 283 0110 Email: mail@redefine.co.za
Directors: W Cesman* (Chairman), Brian Azizollahoff** (CEO),
E Ellerine*, S Shaw-Taylor*, M Wainer*
*non-executive **British
Registration number: 1999/018591/06
Share code: RDF ISIN: ZA000023503
Company secretary: Probity Business Services (Pty) Ltd.
PO Box 85392, Emmarentia, 2129.
Telephone +27 11 327 7146
www.redefine.co.za
