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PREMIUM - UNAUDITED INTERIM RESULTS OF THE GROUP FOR THE SIX MONTHS ENDED 31
AUGUST 2004
PREMIUM PROPERTIES LIMITED AND ITS SUBSIDIARIES
(Incorporated in the Republic of South Africa)
(Registration number 1994/003601/06)
Share code: PMM ISIN: ZAE000009254
(`Premium` or `the group` or `the company`)
UNAUDITED INTERIM RESULTS OF THE GROUP FOR THE SIX MONTHS ENDED 31 AUGUST 2004
Notice to linked unitholders
The directors report the unaudited interim results of the group for the six
months ended 31 August 2004 set out herein, together with comparisons with the
results for the corresponding period in 2003 and the year ended 29 February
2004.
* Distribution up by 39,8%
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
six months six months year to
% 31 August 31 August 29 February
R`000 change 2004 2003 2004
Revenue 19,5 63 734 53 312 109 844
Net property income 12,3 39 738 35 376 72 399
Interest received 2 387 427 860
Investment income -
associate 2 193 700 3 597
Fair value adjustments
- investment property - - 61 234
- associate, net of
Capital Gains Tax - - 6 162
Depreciation (303) (303) (602)
Capital loss on
disposal
of investment
properties - (6) (6)
44 015 36 194 143 644
Interest paid (10,3) 17 965 20 023 37 699
Profit before
debenture interest 61,1 26 050 16 171 105 945
Debenture interest 59,4 25 437 15 960 37 668
Profit before taxation 613 211 68 277
Taxation charge 14 10 10 432
Net income
attributable to
ordinary shareholders 599 201 57 845
Earnings per linked
unit (cents)
(weighted and diluted) 22,92 16,22 95,87
Headline earnings per
linked
unit (cents)
(weighted and diluted) 41,2 22,92 16,23 38,68
Linked units in issue
(`000) 113 607 99 625 99 625
Distribution per
linked unit (cents)
Dividends 0,11 0,08 16,10
Interest 22,39 16,02 21,90
Total 39,8 22,50 16,10 38,00
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
six months six months year to
31 August 31 August 29 February
R`000 2004 2003 2004
Cash flow from operating
activities
Net rental income from properties 41 628 35 073 72 751
Adjustment for:
- Depreciation 303 303 602
- Working capital changes 2 735 (3 943) (849)
Cash generated from operations 44 666 31 433 72 504
Investment income 2 387 1 127 3 170
Finance costs (17 965) (20 023) (37 699)
Taxation paid (27) (82) (4)
Distribution to linked
unitholders paid (21 816) (16 338) (32 378)
Net cash inflow/(outflow) from
operating activities 7 245 (3 883) 5 593
Cash flow from investing
activities
Investing activities (18 931) (23 517) (65 462)
Proceeds from disposal of
investment
properties 279 100 -
Net cash outflow used in investing
activities (18 652) (23 417) (65 462)
Cash flow from financing
activities 12 024 26 518 59 347
Net increase/(decrease) in cash
and cash equivalents 617 (782) (522)
Cash and cash equivalents
at beginning of year 1 520 2 042 2 042
Cash and cash equivalents at end
of year 2 137 1 260 1 520
ABRIDGED CONSOLIDATED BALANCE SHEET
Unaudited Audited
31 August 29 February
R`000 2004 2004
ASSETS
Non-current assets
Investment properties 674 213 650 515
Property, plant and equipment 17 551 17 854
Investments - associated company 15 438 20 485
Current assets 8 375 7 761
Total assets 715 577 696 615
EQUITY AND LIABILITIES
Share capital 1 136 996
Non-distributable reserve 137 129 137 129
Accumulated profit 2 349 1 875
Ordinary shareholders` interest 140 614 140 000
Debentures 211 989 167 510
Linked unitholders` interest 352 603 307 510
Interest bearing borrowings 294 630 325 915
Deferred taxation 14 798 14 798
Current liabilities - interest bearing 2 342 3 651
- non-interest bearing 51 204 44 741
Total equity and liabilities 715 577 696 615
Linked units in issue (`000) 113 607 99 625
Net asset value per linked unit (cents) 310 309
STATEMENT OF CHANGES IN EQUITY
Distribu-
Share Capital Revaluation table
R`000 capital reserve reserve reserves Total
Balance at
1 March 2003 996 8 376 71 771 1 200 82 343
Profit
attributable
to ordinary
shareholders - - - 57 845 57 845
Dividends paid - - - (188) (188)
Transfer to
non- distributable
reserve - (6) 56 988 (56 982) -
Balances at
1 March 2004 996 8 370 128 759 1 875 140 000
Profit
attributable
to ordinary
shareholders - - - 599 599
13 982 047 linked
units issued 140 - - - 140
Dividends - - - (125) (125)
Balances at
31 August
2004 1 136 8 370 128 759 2 349 140 614
RECONCILIATION - HEADLINE EARNINGS TO EARNINGS PER LINKED UNIT
Six months Six months Year to
31 August 31 August 29 February
Cents 2004 2003 2004
Headline earnings per linked unit 22,92 16,23 38,68
Fair value adjustments
- investment properties - - 67,65
- deferred Capital Gains Tax - - (10,45)
Capital loss on disposal of
investment
properties - (0,01) (0,01)
Earnings per linked unit 22,92 16,22 95,87
NOTES TO THE FINANCIAL STATEMENTS
1. The same accounting policies and methods of computation have been followed
as in the financial statements of 29 February 2004 and are in accordance
with South African Statements of Generally Accepted Accounting Practice
applicable to AC 127 `Interim financial reporting`.
2. The company is committed for a further amount of R39,3 million in respect of
capital
expenditure relating to the improvement of certain properties. These
developments will be financed by way of existing facilities as well as funds
raised from a recent capital raising exercise.
3. Capital expenditure during the period amounted to R24 million.
4. Guarantees amounting to approximately R2 million have been issued to the
City of Tshwane Metropolitan Municipality in respect of electricity deposits
for various subsidiaries.
5. The company has bound itself as surety, in favour of Nedbank Property
Finance, in respect of loans granted to an associate company, IPS
Investments (Proprietary) Limited (`IPS`), which at year-end amounted to
R38,06 million.
6. In terms of AC 135 the company values its investment properties annually.
A valuation of the total portfolio will be undertaken for the year ending
28 February 2005.
COMMENTS
Review of results
The directors of Premium are pleased to report that the company has continued
to produce sustained growth in earnings and distribution to its linked
unitholders. Rental income and net rental income increased by 19,5% and 12,3%,
respectively, compared to the prior corresponding period, due to a combination
of stronger trading activities, a number of yield-enhancing acquisitions and
new residential conversions included in the results.
The interim distribution of 22,5 cents (2003: 16,1 cents) per linked unit
equates to an increase of 39,8% per linked unit on that paid in the previous
corresponding period.
Significant reductions in financing costs contributed to the funds exceptional
growth in earnings and distribution for the period.
Property portfolio
During the period Premium acquired six properties located in the Pretoria
CBD for a total purchase price of R17,8 million. These properties are
strategically situated in the Pretoria CBD and the purchases will enhance the
overall quality of the existing portfolio and further add to the sustainability
of long-term income streams. An amount of R6,2 million was spent on the
renovation of properties and the conversion of office blocks to residential
accommodation. Due to strong demand for residential accommodation, work has
already commenced on two new residential developments at a total cost of
R48 million.
Income from an associate company, IPS, in which Premium holds a 40% interest,
increased significantly as a result of greater demand for residential and
office space and a num- ber of acquisitions made at attractive yields. A
successful residential sectional-title development was completed and largely
sold out at 31 August 2004. The profits from this ven- ture have had a further
positive impact on the results.
Capital raising
In June 2004, Premium approached the capital markets to raise new equity to
fund various projects including two residential developments. The total equity
raised, at a price of 335 cents per unit which included a distribution
pre-payment of 13 cents per unit, amounted to R46,8 million.
All new units issued rank pari passu with the existing units from date of issue.
Interest risk management and borrowings
Borrowings equate to 42,9% of the value of the property portfolio and interest
rates in respect of 74% of borrowings at 31 August 2004 have been fixed at
various maturity dates ranging from February 2006 to August 2007.
Prospects
The property market, and in particular, the Pretoria CBD office and residential
sectors, have performed well and management is of the view that, subject to
prevailing market con- ditions and the interest rate environment remaining
constant, Premium`s distributable income for the period 1 September 2004 to
28 February 2005 is expected te be in line with the current distribution.
DECLARATION OF DIVIDEND NO. 21 AND INTEREST PAYMENT (`the distribution`)
Notice is hereby given that dividend number 21 of 0,11 cents (2003: 0,08 cent)
per ordinary share together with interest of 22,39 cents per debenture (2003:
16,02 cents), has been declared for the period 1 March 2004 to 31 August 2004,
payable to linked unitholders recorded in the register on Friday, 19 November
2004. The last date to trade `cum` dis- tribution is Friday, 12 November 2004.
The units will commence trading `ex` distribution on Monday, 15 November 2004.
Payment date will be Monday, 22 November 2004.
No dematerialisation or rematerialisation of linked unit certificates may take
place between Monday, 15 November 2004 and Friday, 19 November 2004, both days
inclusive.
By order of the Board
City Property Administration (Proprietary) Limited
25 October 2004
A Wapnick (Chairman) J P Wapnick (Managing director)
Directors:
AWapnick* (Chairman)
J P Wapnick* (Managing director)
M J Holmes#, R J Inggs*, M Z Pollack#,
S Wapnick
*Executive directors
Non-executive directors
#Independent non-executive directors
Registered Office:
Downies Building
373 Proes Street, Pretoria 0002
PO Box 15, Pretoria 0001
Tel: (012) 326-8811
Fax: (012) 325-2209
Transfer Secretaries:
Computershare Investor Services 2004 (Pty) Limited
(Registration number 2004/003647/07)
70 Marshall Street, Johannesburg 2001
PO Box 61051, Marshalltown 2107
Tel: (011) 370-7700
Fax: (011) 688-7712
CITY PROPERTY
Property Asset Managers
Date: 25/10/2004 04:09:08 PM
Produced by the JSE SENS Department
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