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VUKILE PROPERTY FUND LIMITED - REVIEWED INTERIM RESULTS AND DISTRIBUTION
ANNOUNCEMENT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2004
VUKILE PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2002/027194/06)
JSE CODE: VKE
ISIN: ZAE000056370
REVIEWED INTERIM RESULTS AND DISTRIBUTION ANNOUNCEMENT
for the six months ended 30 September 2004
- Maiden interim distribution of 30 cents
- Well positioned to achieve prospectus
forecast
- MICC support up to 61.7%
ABRIDGED GROUP INCOME STATEMENT
Reviewed
six months
ended
30 Sept 2004
R000
Gross property revenue 169 461
Property expenses (57 499)
Net property revenue 111 962
Administrative expenses (1 829)
Operating income before finance costs 110 133
Finance costs (48 489)
Net profit before debenture interest 61 644
Debenture interest (61 413)
Net profit before capital items 231
Capital items
Change in fair value of investment
properties 21 509
Net profit before taxation 21 740
Taxation (3 311)
Deferred taxation (85)
Deferred Capital
Gains Taxation (3 226)
Net profit after taxation 18 429
Per
Reconciliation of net unit
profit to headline linked
earnings R000 cents
Net profit after taxation 18 429 9.09
Adjusted for:
Change in fair value of
investment properties
(net of deferred
taxation) (18 283) (9.02)
Debenture interest 61 413 30.29
Headline earnings of
linked units 61 559 30.36
Total number of linked units
in issue at 30 September 2004 202 741 130
Total number of linked units
in issue at 30 November 2004** 205 129 430 30.00
** 2 388 300 linked units were issued on 30 November 2004 for the acquisition
of the remaining property, Hillcrest Shopping Centre, announced on 5 October
2004. Vukile has received rental income from this centre from 1 April 2004.
ABRIDGED GROUP CASH FLOW STATEMENT
Reviewed
six months
ended
30 Sept 2004
R000
OPERATING ACTIVITIES
Cash from operating activities 162 468
Net finance costs (48 489)
Net cash flow from operating
activities 113 979
INVESTING ACTIVITIES
Purchase of investment properties
including capitalised transaction
costs 1 899 511
Net purchase of fixed assets 846
Net cash utilised in
investing activities 1 900 357
FINANCING ACTIVITIES
Issue of linked units 1 004 125
Interest bearing borrowings raised 787 691
Net cash from financing activities 1 791 816
Increase in cash
at bank 5 438
Cash at bank at the beginning of
the period -
Cash at bank at the end of the
period 5 438
ABRIDGED GROUP BALANCE SHEET
Reviewed
at
30 Sept
2004
R000
ASSETS
Non current assets 1 921 849
Investment properties 1 921 021
Fixed Assets 828
Current assets 22 700
Trade and other receivables 14 498
Bank 5 438
Other current assets 2 764
Total assets 1 944 549
EQUITY AND LIABILITIES
Share capital and reserves 7 556
Non-current liabilities 1 805 876
Debentures 993 432
Interest bearing borrowings 787 691
Interest rate swap liability 21 442
Deferred taxation 3 311
Current liabilities 131 117
Trade & other payables 36 117
Tenant deposits 9 578
Vendor loan 23 883
Linked unitholders for distribution 61 539
Total equity and liabilities 1 944 549
Net asset value per linked unit (cents) 4.94
STATEMENT OF CHANGES IN EQUITY
Fair Retained
Share Share value earn-
capital premium reserves ings Total
R000 R000 R000 R000 R000
Changes in equity
for 2004
Balance at
1 April 2004 - - - - -
Issue of
linked
Units 2 027 18 247 - - 20 274
Issue costs
written off
against share
premium (9 580) - - (9 580)
2 027 8 667 - - 10 694
Cash flow
Hedges - - (21 442) (21 442)
Revaluation of
properties (net
of deferred tax) - - 18 283 (18 283) -
Profit for the
period - - - 18 429 18 429
Dividend
distribution - - - (125) (125)
Balance at
30 Sept 2004 2 027 8 667 (3 159) 21 7 556
COMMENTS
1. PREPARATION AND REVIEW OPINION BY THE INDEPENDENT AUDITORS
The financial statements are prepared in accordance with South African
Statements of Generally Accepted Accounting Practice (GAAP) and the requirements
of the South African Companies Act. The accounting policies are consistent
with those applied in the prospectus.
The auditors, Grant Thornton, have reviewed the abridged financial statements.
Their unqualified report is available for inspection at the company`s registered
office.
2. FINANCIAL RESULTS FOR VUKILE
Vukile`s net profit before tax and debenture interest amounted to R61.6 million
for the six month period ended 30 September 2004. Net property revenue of R112
million was 1.5% higher than the budget for the six month period.
Vukile, in accordance with policy, has resolved to distribute substantially all
of its distributable income for the year ending 31 March 2005.
The Board has approved an interim distribution of 30 cents per linked unit for
the period from 1 April 2004 to 30 September 2004.
3. PROPOSED ACQUISITION OF MICC PROPERTY INCOME FUND LIMITED (`MICC`)
Unitholders are referred to Vukile`s previous announcements detailing its
intention to acquire the entire issued capital of MICC. The implementation of
the transaction will result in Vukile substantially increasing the size of its
property portfolio, which will result in operational efficiencies and improved
risk diversification for Vukile. The nature, type and geographical fit of
Vukile`s and MICC`s properties are complementary and will create a sound
platform for future growth. It should be noted that the acquisition of linked
units in MICC will be earnings enhancing for Vukile.
In this regard, a circular to Vukile unitholders was posted on Monday, 29
November detailing the transaction. A Vukile unitholder meeting will be held on
Tuesday, 14 December 2004 to approve the transaction. Vukile has obtained
irrevocable undertakings from non-related Vukile unitholders holding 58% of
Vukile`s issued capital to vote in favour of the transaction.
In addition, an offer document to MICC unitholders giving details of Vukile`s
offer to acquire MICC`s issued linked units was also posted on Monday, 29
November 2004. Vukile has obtained support for the offer from MICC unitholders
holding +/- 62% of MICC`s issued capital. The offer opened on Monday, 29
November 2004 and closes on Friday, 31December 2004.
Unitholders will be timeously notified of Vukile`s progress with respect to this
transaction.
4. BORROWINGS
The salient terms of the debt funding are as follows:
R000
JIBAR based debt 764 166
Prime less 1.5% 75 000
Total 839 166
JIBAR - Johannesburg Interbank Agreed Rate
The debt funding is provided by the debt funders over fixed periods of between
three to five years, with interest only to be serviced over the respective
funding periods. The terms, conditions and interest rates relating to the debt
funding will be reviewed and renegotiated in due course.
5. INTEREST RATE SWAPS
The company has hedged approximately 81% of its interest rate exposure over a
three year period as follows:
Swap 1 Swap 2 Swap 3 Swap 4
Nominal value
(R000) 200 000 200 000 100 000 200 000
Swap period 3 years 3 years 2 years 2 years
Maturity
date 2007/02/16 2007/02/19 2006/05/04 2006/06/18
Total
JIBAR
Swap 5 facility
Nominal value
(R000) 64 166 764 166
Swap period 1 year
Maturity date 2005/06/18
Subsequent to 30 September 2004, additional interest rate swaps have been
entered into at favourable rates, increasing the hedge cover to 91% as follows:
Swap 6 Swap 7
Nominal value (R000) 100 000 64 166
Swap period 1 year 2 years
Maturity date 2007/06/18 2007/06/18
Average all-in interest rate
(fixed & floating) 11.15% NACM
NACM - Nominal Annual Compounded Monthly
6. PROPERTY PORTFOLIO
The property portfolio currently comprises 52 properties with a gross lettable
area of 676 901m2.
7. SHARE CAPITAL AND DEBENTURES
Each linked unit comprises 1 share of one cent (and a share premium of nine
cents) linked to one debenture of R4.90. Interest payable on one debenture is
490 times greater than the dividend payable per share.
188 886 578 linked units were issued on date of listing. Additional linked
units were issued to finance the acquisition of properties which were
transferred subsequent to the listing date as follows:
- 5 002 329 units on 22 July 2004
- 8 852 223 units on 23 August 2004
- 2 388 300 units on 30 November 2004
8. UNITHOLDER PROFILE
30 Sept 2004
Total number of unitholders 886
Unitholders owning more than
5% of units in issue 4
Percentage of units controlled
by the largest unitholder 67.4%
9. PROSPECTS
Given the prevailing positive economic factors in South Africa, Vukile expects
the good demand for rental space in its properties to continue. Vukile is well
positioned to achieve its earnings forecast for the year ending 31 March 2005,
as set out in its prospectus.
10. RELATED PARTY TRANSACTIONS
During the period, the company, in the ordinary course of business, entered into
various transactions with related parties. These transactions occurred on terms
that are no less favourable than those arranged with third parties.
Company Nature of expense
Sanlam Properties (Pty) Ltd Asset management fees
Gensec Property Property management
Services Ltd fees/Lease costs
Kuper Legh Property Services
Group (Pty) Ltd Property management fees
MCH Properties (Pty) Ltd Total listing and property
acquisition costs
Sanlam Group Interest due on adjustment
account
At
Six months 30 Sept
ended 2004
30 Sept Amounts owing
2004 to related
Expenses parties
R000 R000
Sanlam Properties (Pty) Ltd 3 122 673
Gensec Property Services Ltd 3 042 1 646
Kuper Legh Property Services 594 190
MCH Properties (Pty) Ltd 44 254 4 979
Sanlam Group 9 375 9 375
11. PAYMENT OF DEBENTURE INTEREST AND DIVIDEND
Notice is hereby given of a distribution amounting to 30 cents per unit, for the
six month period to 30 September 2004. The distribution comprises interest on
debentures of 29.94 cents per unit and a dividend of 0.06 cents per unit.
Last date to trade cum distribution 17 December 2004
Linked units trade ex distribution 20 December 2004
Record date for unitholders to
participate in the distribution 24 December 2004
Payment of distribution to unitholders 28 December 2004
Linked unit certificates may not be dematerialised or re-materialised between
Monday 20 December 2004 and Friday 24 December 2004, both days inclusive.
On behalf of the Board
G van Zyl MJ Potts
Chief executive Financial director
Roodepoort
2 December 2004
Sponsor: Bridge Capital Services (Pty) Limited, Woodmead, Johannesburg
Executive directors: G van Zyl (CEO), MJ Potts (Financial Director).
Non-executive directors: AD Botha (Chairman), S Bernic, HSC Bester, KMK
Bothongo, PJ Cook, PS Moyanga and M Serebro
Registered office: Meersig Building, Constantia Boulevard, Constantia Kloof,
1709.
Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited,
Marshalltown, Johannesburg.
Investor and media relations: Contact Kathy du Plessis on vukile@dpapr.com, or
Tel: 011 728-4701.
Date: 02/12/2004 10:00:08 AM Produced by the JSE SENS Department
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