| Thu 3 Feb 2005, 19:14 | | RESILIENT PROPERTY INCOME FUND LIMITED - AUDITED A |
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RES
RESILIENT PROPERTY INCOME FUND LIMITED - AUDITED ABRIDGED FINANCIAL REPORT OF
THE GROUP - DECEMBER 2004
Resilient Property Income Fund Limited(Incorporated in the Republic of South Africa)
(Registration number 2002/016851/06)
Share code: RES ISIN: ZAE000043642
AUDITED ABRIDGED FINANCIAL REPORT OF THE GROUP - DECEMBER 2004Consolidated income statement
Audited Reviewed Audited
12 months to 6 months to 13 months to
31 December 2004 30 June 2004 31 December 2003 R`000 R`000 R`000
Rental income 178 616 97 944 147 373
Net operating expenses (69 230) (37 685) (39 208)
Operating profit 109 386 60 259 108 165Income from associated
companies
Distributable income 19 088 2 827 -
Income of a capitalnature 27 047 - -
Investment income 4 343 595 3 734
Other income 3 569 - -
Net profit / (loss) onthe sale of investment
properties 29 932 (853) 11 211
Net profit / (loss) on
the sale of equityinvestments (2 634) (2 228) 3 552
Net revaluation
adjustments 206 741 - 38 249
Goodwill amortised (7 876) (3 938) -Costs associated with
listing - - (3 370)
Net profit before
interest 389 596 56 662 161 541Interest on units issued
cum distribution 8 800 5 310 3 704
Interest on loans (44 233) (22 261) (41 991)
Interest to linkeddebenture holders (100 958) (46 732) (73 595)
Net profit / (loss)
before taxation 253 205 (7 021) 49 659
Taxation (71 690) 241 (13 266)Net profit / (loss)
for the period 181 515 (6 780) 36 393
Reconciliation of
headline earnings perlinked unit
Earnings per share
(cents) 171.27 (7.02) 46.90
Interest to linkeddebenture holders 95.26 48.38 94.80
Earnings per linked
unit (cents) 266.53 41.36 141.70
Adjusted for: (171.27) 7.02 (46.90)Net capital (profit) /
loss on investments (246.34) 3.19 (68.30)
Goodwill amortised 7.43 4.08 -
Costs associated withlisting - - 4.30
Taxation effect 67.64 (0.25) 17.10
Headline earnings per
linked unit (cents) 95.26 48.38 94.80Earning per share, earnings per linked unit and headline earnings per linked
unit are based on the weighted average of 105 981 699 (30 June 2004: 96 602
185; 31 December 2003: 77 619 292) linked units in issue.
Consolidated balance sheet Audited Reviewed Audited
1 December 30 June 31 December
2004 2004 2003
R`000 R`000 R`000ASSETS
Non-current assets 1 486 628 1 026 830 900 294
Investment properties 964 884 865 627 883 285
Investments in associated companies 313 882 106 172 -Listed property securities 153 328 - 17 009
Unit purchase trust loans 54 054 50 565 -
Goodwill and fixed assets 480 4 466 -
Current assets 82 611 88 275 83 520Accounts receivable 6 892 1 500 35 660
Cash and cash equivalents 75 719 86 775 47 860
Total assets 1 569 239 1 115 105 983 814
EQUITY AND LIABILITIESLinked unitholder capital 905 704 617 205 493 093
Share capital and reserves 315 264 92 007 63 872
Linked debenture liabilities 590 440 525 198 429 221
Non-current liabilities 580 924 405 473 435 905Interest bearing borrowings 505 584 394 899 425 091
Deferred tax liability 75 340 10 574 10 814
Current liabilities 82 611 92 427 54 816
Accounts payable 20 786 45 262 14 271Income tax liability 7 598 433 2 452
Linked debenture interest payable 54 227 46 732 38 093
Total equity and liabilities 1 569 1 115 983 814
239 105Consolidated statement of changes in equity
Share Share Non- Distri-
Capital Premium distri- butable Total
butable reserve reserve
R`000 R`000 R`000 R`000 R`000
Issue of units 894 26 585 27 479
Net profit for the 36 393 36 393period
Transfer to non- 36 389 (36 389) -
distributable reserve
Balance at 31 December 894 26 585 36 389 4 63 8722003
Issue of units 336 69 524 69 859
Less: Units held by The - (18) (18)
Resilient Unit PurchaseTrust
Profit on units held by 36 36
The Resilient Unit
Purchase TrustNet profit for the 181 515 181 515
period
Transfer to non- 181 519 (181 519) -
distributable reserveBalance at 31 December 1 230 96 091 217 944 - 315 264
2004
Consolidated cash flow statement
Audited Reviewed Audited 12 months to 6 months to 13 months to
31 December 2004 30 June 2004 31 December 2003
R`000 R`000 R`000
Net cash from operatingactivities 25 959 46090 42 360
Investment activities (309 692) (57 312) (876 291)
Finance raising activities 80 494 (30 192) 425 091
Issue of linked units 231 098 80 329 456 700Net cash inflow 27 859 38 915 47 860
Opening balance 47 860 47 860 -
Closing balance 75 719 86 775 47 860
Notes1. Preparation and audit opinion
The abridged financial report has been prepared in accordance with accounting
policies consistent with those applied in the prior year, South African
Statements of Generally Accepted Accounting Practice and the requirements of theCompanies Act (Act 61 of 1973).
KPMG Inc. has audited the financial information set out in the abridged
financial report. The unqualified audit opinion is available for inspection at
the group`s registered office.2. Commentary on the results
Summary of key financial indicators:
6 months to 6 months to 6 months to 7 months to
31 December 30 June 31 December 30 June 2004 2004 2003 2003
Net asset value 736 cents 563 cents 551 cents 499 cents
per linked unit
Distribution per 44,08 cents 42,71 cents 42,60 cents 45,10 centslinked unit
Units in issue 123 018 384 109 416 448 89 420 953 78 718 453
Gearing ratio 35,3% 40,6% 47,2% 46,8%
The net asset value per linked unit would increase from 736 cents per unit to755 cents per unit if the investment in Capital Property Fund were revalued to
292,5 cents per unit (based on the December 2004 volume weighted price) for
financial reporting purposes. In terms of accounting statements, investments in
associates are carried at the sum of cost and income accrued subsequent toacquisition, and not revalued to the ruling market price.
2.1 Acquisitions
2.1.1 Masingita Plaza (Thohoyandou Shopping Centre)
Resilient acquired this 10 800mSquared retail centre at a cost of R47m payablein cash. The centre will be refurbished and extended during 2005 once new lease
agreements have been finalised. Negotiations are currently underway with the
Pick `n Pay group, Nedcor, Foschini, Total Sports, Truworths, Identity, Mr Price
and Sheet Street.2.1.2 Diamond Pavilion
A 58 500mSquared site in Kimberley was acquired at a cost of R1,5m. Keystone
Investments purchased half of the property at cost in exchange for developing a
27 500mSquared retail centre and providing a guaranteed 14% return on investmenton Resilient`s portion. Resilient has the option to acquire Keystone
Investment`s 50% interest at a 12% yield 6 months after the centre has been
completed. The centre is anchored by Checkers, Woolworths and Edgars and
includes all major national clothing chains. The centre is scheduled forcompletion in April 2006.
2.1.3 Woolworths Kimberley
This 4 515mSquared GLA centre is situated in the Kimberley CBD and let to
Woolworths with a lease expiring in December 2011. The centre is owned inpartnership with Keystone Investments.
2.1.4 Shoprite Vryheid
Shoprite Checkers has a headlease over this property expiring in August 2010.
The current rental is below market and the property is under-developed with goodpotential for future expansion. The property was purchased for R13m payable in
cash.
2.1.5 Village Walk and Woolworths Newcastle
Village Walk is a 9 179mSquared GLA retail development situated in the center ofNewcastle and was purchased for R39,5m payable in cash. The centre is anchored
by a 4 821mSquared GLA Shoprite Hyper with a lease expiring in November 2013.
Other tenants include CNA, Ackermans, Wimpy, Reggies and Sheet Street.
Woolworths Newcastle is a 2 720mSquared GLA retail centre adjacent to VillageWalk and let to Woolworths with a lease expiring in December 2011. This centre
was purchased for R6,1m payable in cash.
2.1.6 Arbour Town
A 10% interest in a 93,9 hectare site near Amanzimtoti was acquired inpartnership with Keystone Investments. The site enjoys 7 km of exposure to the
N2 motorway. A feasibility is currently being undertaken to determine the
viability of developing a regional shopping centre and a value centre on the
site. Resilient has the option to increase its holding to 20%. The interestwas acquired at a cost of R9m with an additional R2m payable should town-
planning approval be achieved to develop the regional shopping centre.
2.1.7 Pick `n Pay Nelspruit
This 8 070mSquared GLA retail centre is strategically situated at theintersection of the Johannesburg and White River Roads. Pick `n Pay occupies
73% of the centre with a lease expiring in March 2012. The centre requires
refurbishment and improvement to its access and this will be undertaken during
the 2005 financial year. The purchase price of R33,5m was paid in cash.2.2 Borowings
The company has secured loan facilities totalling R513,3 million, of which
R505,6 million are utilised.
The interest rate profile of the group is shown below. Fixed rate Borrowings Interest % of
expiry rate Borrowings
November 2006 R50,0 12,47% 9,9%
million February 2007 R50,0 11,61% 9,9%
million
September 2008 R50,0 11,44% 9,9%
million July 2009 R100,0 12,48% 19,8%
million
July 2009 R50,0 9,87% 9,9%
million December 2009 R60,0 13,80% 11,9%
million
R360,0 12,07% 71,3%
million Floating rate R145,6 prime less 28,7%
million 1,50%
R505,6 11,33%* 100,0%
million*Based on the current prime rate of 11,0%.
Interest rates expiring in July 2009 were agreed with the group`s financiers
post the financial year end and increased the total fixed rate profile by R 50
million. These changes to the interest rate profile were the result of hedgingthe group`s interest rate risk after taking transfer of properties in December
2004. The table of interest rates is representative of the average interest rate
profile of the group on its permanent loan facilities.
2.3 Disposals Prop Property Valuation Sold for Profit /
31 December (Loss)
2003
1 Properties sold to 139,5 149,0 9,5 Capital Property
Fund
2 Properties sold to 56,6 73,4 16,8
Acucap Properties 3 Vanderbijlpark Mall 37,6 40,5 2,9
4 Afrox Glynwood 14,9 15,5 0,6
5 National Brands, 5,4 5,4 -
Roodepoort 7 Voltex Gezina 4,9 5,5 0,6
8 Auto Zone Wadeville 3,4 3,4 -
9 Derrick Road, 3,2 3,2 -
Spartan 1 Smiths 3,2 3,2 -
0 Manufacturing, New
Germany
1 5th Street Wynberg 2,0 2,3 0,3 1
1 Auto Aircon 1,7 1,7 -
2 Exchange Edenvale
1 Tredcor Parow 1,7 1,7 - 3
1 Shell Richards Bay 1,0 1,0 -
4
1 Ellerines Nigel 0,9 1,1 0,2 5
1 Boardroom Coffee, 0,8 1,0 0,2
6 Eastgate
1 Shell Orchards 0,8 1,0 0,2 7
1 SupaQuick 0,6 0,8 0,2
8 Klerksdorp
1 Telkom Welkom 0,6 0,7 0,1 9
Gross 278,8 310,4 31,6
Less: Transaction - (1,7) (1,7)
costs Net 278,8 308,7 29,9
3. Prospects
Demand for quality investment properties, particularly retail properties,
exceeds supply. Resilient is in the fortunate position of owning half of theDiamond Pavilion currently under construction with the option to acquire the
remaining share at an attractive price. Resilient is well positioned to provide
sustainable growth in distributions over the long term. The board is confident
that the growth in distributions for the 2005 financial year will be similar tothat achieved in the past financial year.
4. Distribution payment
The board has approved and notice is hereby given of a final distribution
(distribution no. 4) of 44,08 cents per linked unit for the 6 months to 31December 2004.
The last date to trade linked units cum-distribution will be Friday 25 February
2005 and trading will commence ex-distribution on Monday 28 February 2005. The
record date to participate in the distribution will be Friday 4 March 2005.Linked unit certificates may not be dematerialised or rematerialised between
Monday 28 February 2005 and Friday 4 March 2005, both days inclusive.
Payment of the distribution will be made to linked unitholders on Monday 7 March
2005. In respect of dematerialised linked unitholders, the distribution will betransferred to the Central Securities Depository Participant accounts/broker
accounts on Monday 7 March 2005. Certificated linked unitholders` distribution
payments will be posted on or about Monday 7 March 2005.
By order of the BoardD de Beer JJ van Wyk
Managing Director Financial Director
Johannesburg
4 February 2005Registered office Transfer secretaries
57 6th Road Ultra Registrars (Proprietary) Limited
Hyde Park 11 Diagonal Street
2196 Johannesburg 2001
DIRECTORS:
AS Nkonyeni (Chairman)#, JJG da Costa#, D de Beer*, MP Greyling#, JG Kirchner#,
DJ Lewis*, PP Msweli#, MJN Njeke#, BL Stuhler, PA Theodosiou#, R Turner#, BD vanWyk#, JJ van Wyk*, JN Zidel*
JJ Kriek (alternate director)
MH Muller (alternate director)
JJ van Wyk (company secretary)* Executive
# Independent non-executiveDate: 03/02/2005 05:30:15 PM Produced by the JSE SENS Department
