| Tue 7 Dec 2004, 15:20 | | RESULTS TO 31 OCTOBER 2004 |
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Paraprop - Audited results to 31 October 2004 and distribution announcement
Paramount Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 1945/019928/06)
Share code: PRA ISIN: ZAE000028577
(`Paraprop`)
AUDITED RESULTS TO 31 OCTOBER 2004 AND DISTRIBUTION ANNOUNCEMENT
DIRECTORS:
A D Dalling (Chairman)**, R C Squire - Howe (Managing), J A Bester**, F J
Jenkings, B H Kerswill, N P Mageza* (Alt. G C Cannings), A A Maresky, F
Meisenholl* (Alt. R D Jeffery), A D P Ovenstone*, G P Phillips*, R S Schur**
* Non-executive ** Independent non-executive
The consolidated audited results of the group for the year ended 31 October 2004
are as follows:
Audited Audited
October 2004 October 2003
R`000 R`000
Consolidated Income Statement
Revenue 133,444 111,245
Trading Income 100,270 89,134
Revaluation of investment 33,683 2,600
properties
Depreciation (838) (426)
Interest received 1,524 1,840
Amortisation of debenture (603) (70)
discount
Amortisation of negative goodwill 14 -
Interest paid on borrowings (70,456) (73,448)
Income before taxation 63,594 19,630
Taxation (845) 695
Income before distribution 62,749 20,325
Distribution to unitholders (38,336) (18,963)
Net profit for the year 24,413 1,362
Linked units in issue (`000) 92,076 51,585
Weighted average linked units in issue 72,925 36,970
(`000)
Earnings per linked unit 86 55
(cents)
Headline earnings per linked unit 43 44
(cents)
Core earnings per linked unit (cents) 54 49
Fully diluted earnings per linked unit 68 32
(cents)
Fully diluted headline earnings per 34 25
linked unit (cents)
Distribution per linked unit (cents) 51 49
Earnings, Headline earnings and Core earnings per linked unit
The earnings, headline earnings and core earnings calculations are based on the
weighted number of linked units ranking for distribution of 72 925 325 (2003: 36
969 539). The earnings per linked unit figure is given in preference to earnings
per share, as the linked units are traded as a single entity on the JSE
Securities exchange and all distributions made by the company are in the form of
interest paid on the debenture portion of the linked unit. Earnings per share is
therefore not relevant in assessing the company`s performance. Earnings per
linked unit of R62 749 000 (2002: R20 325 000) is calculated on the net income
before debenture interest but after taxation. Headline earnings per linked
unit is calculated on the net income before debenture interest but after
taxation and headline reconciling items. Core earnings per linked unit is
calculated by adding to headline earnings, realised surpluses on disposal of
investment properties (net of capital gains tax), distribution prepayments
received, amortisation of debenture discount and profit on realisation of
investments previously recognised as equity (net of taxation). This
calculation is provided for the benefit of stakeholders as the directors are of
the opinion that it provides a more accurate reflection of the group`s cash
profits for the year. The fully diluted earnings and headline earnings per
linked unit is calculated on 92 790 593 (2003: 64 275 606) linked units, being
all the linked units in issue as well as all the B debentures to be converted
between November 2004 and October 2008, and the net income of R62 749 000 (2003:
R20 325 000) before debenture interest but after taxation.
Earnings reconciliation
Net profit for the year 24 413 1 362
Revaluation surplus (33,683) (2,600)
Taxation of revaluation surplus 3,350 390
Accounting deficit / (surplus) on disposal 35 (2,190)
of investment properties
Taxation on disposal of investment (5) 328
properties
Realised revaluation of investments (1,477) -
previously recognised in equity
Taxation on realised revaluation 443 -
Amortisation of negative goodwill (14) -
Headline earnings (6 938) (270)
Distribution to linked 38 336 18 963
unitholders
Linked unit headline earnings 31 398 16 253
Headline earnings per linked unit 43 44
(cents)
Linked unit headline 31,398 16,253
earnings
Realised surplus on disposal of 3,157 2,190
investment properties
Taxation on disposal of investment (473) (328)
properties
Amortisation of debenture discount 603 70
Realised revaluation of investments 1,477 -
previously recognised in equity
Taxation on realised revaluation (443) -
Distribution prepayment received 3,569 -
Core earnings 39,288 18,185
Core earnings per linked unit 54 49
(cents)
One ordinary share and one A debenture are defined as one linked unit.
Audited Audited
October October
2004 2003
Notes R`000 R`000
Abridged Consolidated Balance
Sheet
Fixed assets 1,095,796 865,516
Property for development 3,583 5,022
Deferred taxation - 395
Goodwill 451 -
Negative goodwill (609) -
Listed investments - 24,236
Cash at bank 5,563 22,613
Other current assets 28,468 17,358
Total assets 1,133,252 935,140
Total ordinary shareholders funds 42,901 14,265
A debenture holders 350,249 211,016
B debenture holders 1 96,924 133,508
Interest bearing borrowings 614,652 508,622
Deferred taxation 497 -
Unitholders for distribution 12,430 6,706
Current liabilities 15,599 61,023
Total equity and liabilities 1,133,252 935,140
Net asset value per linked unit 427 437
(cents)
Fully diluted net asset value per 438 453
linked unit (cents)
Abridged Consolidated Cash Flow
Statement
Income before taxation 63,594 19,630
Adjustments for:
Interest received (1,524) (1,840)
Interest paid on borrowings 70,456 73,448
Depreciation 838 426
Provisions raised 850 400
Deficit / (surplus) on 35 (2,190)
disposal of investment
property
Amortisation of negative (14) -
goodwill
Revaluation of investment (33,683) (2,600)
properties
Operating profit before working 100,552 87,274
capital changes
Working capital changes 18,358 (27,781)
Cash generated from 118,910 59,493
operations
Interest received 1,524 1,840
Interest paid on borrowings (70,456) (73,448)
Taxation paid (1,244) -
Net cash inflow / (outflow) from 48,734 (12,115)
operating activities
Net cash outflow from investing (247,113) (165,835)
activities
Net cash inflow from borrowing 106,030 100,079
activities
Net cash inflow from capital raising 75,299 100,366
activities
(17,050) 22,495
Cash and cash equivalents at 22,613 118
beginning of the year
Cash and cash equivalents at end of 5,563 22,613
the year
Capital Expenditure
At the financial year-end, the company and the group had capital commitments
totalling R142,2 million (2003: R52,5 million) in respect of properties
acquired. This commitment is being met from bank loans, the issuing of 15 075
000 new linked units and existing cash resources. In addition there are capital
commitments totalling R32,1 million in respect of the 34 St George`s Mall
development and the building of new retail space at Sportsman`s Warehouse, Tyger
Valley. These commitments will be funded from bank loans and existing cash
resources.
Statement of changes in equity
Share Share Non- Distri- Re- Sub- A L
distri- butable valua- total unit
butable tion
capital premium reserves reserves reserve Deben- t
tures
Balance at 2,251 5,878 45 (1,137) - 7,037 101 303 10
1/11/2002
Increase in 2,908 2,908 2,
share capital
Net increase 1,924 1,924 1,
in share
premium
Issue of A 109 643 10
debentures
Amortisation 70 70
of debenture
discount
Revaluation 1,034 1,034 1,
of listed
investments
Net profit to 1,362 1,362 1,
31/10/2003
Balance at 5,159 7,802 45 225 1,034 14,265 211 016 22
31/10/2003
Increase in 4,049 4,049 4,
share capital
Net increase 1,213 1,213 1,
in share
premium
Issue of A 138 630 13
debentures
Amortisation 603 60
of debenture
discount
Realisation (1,034) (1,034) (1
of listed
investment
Transfer to (5) (5) (5
negative
goodwill
Net profit to 24,413 24,413 24
31/10/2004
Balance at 9,208 9,015 40 24,638 0 42,901 350 249 39
31/10/2004
Notes:
1) The B debentures are convertible into linked units in 5 equal tranches,
commencing in the January of the year following issue. The new linked units
participate in all distributions from the date of conversion.
Accounting policies
The results for the year ended 31 October 2004 have been prepared on a basis
consistent with the accounting policies set out in the last annual financial
statements and in accordance with the South African Statement of Generally
Accepted Accounting Practice applicable to interim financial reporting.
Audit Report
These results have been audited by the company`s auditors, Deloitte & Touche,
and their unqualified audit reports on the results and the annual financial
statements from which these results have been extracted are available for
inspection at the company`s registered office.
Comments
As forecast in 2003, the year under review reflects modest growth in both core
earnings and distributions per linked unit. The directors have declared a final
distribution of 13,5 cents per linked unit, making a total for the year of 51
cents per linked unit, compared with 49 cents per linked unit for 2003. The
properties acquired before 30 April 2004, referred to in the interim report to
30 April 2004, were all transferred during the second half of the year. During
the second half of the year the group acquired the Pick `n Pay building in
Claremont, Cape Town, for R67,5 million, and the JD Group warehouse building in
Germiston for R18,25 million. Both properties were transferred to the group
prior to 31 October 2004. In addition acquisition agreements were signed for the
retail component of the Golden Acre, Cape Town (R130 million) and the GKN Chep
industrial building in Kwazulu Natal (R12,2 million). The effective date in
respect of both properties is after 31 October 2004, with the Golden Acre
already transferred and the GKN Chep property in the course of transfer. The
Edgars, Wynberg, Cape Town and the Frame Park, East London properties, which did
not form part of the long term investment strategy of the group, have been sold
subsequent to 31 October 2004. The transfer to the new owners is in progress. At
31 October 2004 the group owned 64 properties with a carrying value of R1 096
million. After the acquisitions and disposals referred to above, this will
change to 64 properties with a carrying value of R1 210 million.
During the year ended 31 October 2004, 129 474m2 of space was let, representing
35,3% of the portfolio`s total of 367 259m2 at year end. Of this, 56 157 m2
related to new leases and 73 317 m2 to renewals of existing leases. The vacancy
rate of the portfolio was maintained at between 3% and 4% throughout the year.
DECLARATION OF DISTRIBUTION
Notice is hereby given that the board of directors has declared a final
distribution of 13,5 cents per linked unit in respect of the year ended 31
October 2004. The distribution will be paid on Monday 3 January 2005. To comply
with the procedures of STRATE, the distribution timetable is as follows:
Last day to trade linked units cum distribution Thursday 23 December 2004
Linked units commence trading ex distribution Friday 24 December 2004
Record date Friday 31 December 2004
Pay date Monday 3 January 2005
Linked unit certificates may not be dematerialised or rematerialised between
Friday 24 December 2004 and Friday 31 December 2004, both days inclusive.
BY ORDER OF THE BOARD
SPIRE PROPERTY SERVICES (PTY) LTD
Secretaries
CAPE TOWN
7 December 2004
Registered office Transfer Secretaries
Tannery Park Computershare Investor Services 2004 (Pty) Ltd
23 Belmont Road 70 Marshall Street
Rondebosch 7700 Johannesburg 2001
P O Box 155 P O Box 61051
Rondebosch 7701 Marshalltown 2107
Sponsor
Nedbank Capital
Date: 07/12/2004 03:10:26 PM
Produced by the JSE SENS Department
