| Fri 15 Apr 2005, 15:28 | | Premium - Reviewed Results Of The Group For The Ye |
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Premium - Reviewed Results Of The Group For The Year Ended 28 February 2005
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 company`)
REVIEWED RESULTS OF THE GROUP FOR THE YEAR ENDED 28 FEBRUARY 2005
- Distribution up by 31,6%
- Gearing at 37% allowing for further expansion
Notice to linked unitholders
The directors report the reviewed results of the group for the year ended 28
February 2005 set out herein, together with comparisons with the results for the
corresponding year ended 29 February 2004.
NOTES TO THE FINANCIAL STATEMENTS
1. The principal accounting policies used by Premium and its subsidiary
companies are in accordance with the International Financial Reporting Standards
of the International Accounting Standards Board and the Companies Act, 61 of
1973 (as amended) and are consistent in all material respects with those applied
in the financial statements for the year ended 29 February 2004.
2. The company has committed an amount of R44 million in respect of
redevelopment and improvements of existing properties. This expenditure will be
financed by way of existing facilities.
3. Capital expenditure during the year amounted to R53,5 million.
4. The company has bound itself as surety, in favour of its bankers, in respect
of loans granted to an associate company, IPS Investments (Proprietary) Limited
(`IPS`) which, at year-end, amounted to R39,9 million.
5. In terms of AC 135 the company values its investment properties annually,
resulting in a fair value upward adjustment of R134,6 million.
6. The financial statements, which have been prepared in accordance with the
International Financial Reporting Standard applicable to interim reporting, have
been reviewed by Grant Thornton, whose unqualified reviewed report is available
for inspection at the company`s registered office.
Review of results
COMMENTS
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 19,7% and 18,0%, respectively,
compared with the prior corresponding year, due to a combination of stronger
trading activities, a number of yield enhancing acquisitions and new residential
conversions being included in the results.
The total distribution for the year of 50 cents per linked unit (2004: 38 cents)
equates to an increase of 31,6% on that paid in the previous corresponding year.
Significant reductions in financing costs, and continued tight control over
expenses contributed to Premium`s exceptional growth in earnings and
distribution for the year.
The property portfolio has been revalued, resulting in an increase of R134,6
million in the value of Premium`s properties. Deferred taxation of R21,3 million
has been provided on the revaluation surplus at the Capital Gains Tax rate. The
net asset value per linked unit has increased by 37,4% to 424 cents.
Property portfolio
During the year, Premium acquired nine properties, located in the Pretoria and
Johannesburg CBD`s and Hatfield, for a total purchase price of R34,9 million.
These properties are strategically situated and the purchases will enhance the
overall quality of the existing portfolio and further add to the sustainability
of long-term income streams. Premium has actively pursued redevelopment and
refurbishment opportunities. An amount of R18,1 million was spent on the
renovation of properties and the conversion of office blocks to residential
accommodation. In the past financial year Premium successfully completed the
residential developments of Leo`s Place and Corner Place. Due to strong demand
for residential accommodation, work has already commenced on two new residential
developments at a cost of R46,4 million.
Planning is currently well-advanced on the redevelopment of a number of
properties in Hatfield which comprise a residential development and 4 000 m2 of
retail space. These properties are strategically situated close to the
University of Pretoria. Consideration is being given to the sale of the
residential units.
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 number of acquisitions made at attractive yields. A successful
residential sectional-title development has 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. 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 37% of the value of the property portfolio and interest
rates in respect of 69% of borrowings at 28 February 2005 have been fixed at
various maturity dates ranging from February 2006 to August 2007, at a weighted
average rate of 11,7%.
Prospects
The property market, and in particular, the Pretoria CBD retail, office and
residential sectors, have performed well and management is of the view that,
subject to prevailing market conditions and the interest rate environment
remaining constant, Premium`s distributable income for the period 1 March 2005
to 31 August 2005 should improve.
Declaration of dividend No. 22 and interest payment (`distribution`)
Notice is hereby given that dividend number 22 of 0,14 cent (2004: 0,11 cent)
per ordinary share together with interest of 27,36 cents per debenture (2004:
21,79 cents), has been declared for the period 1 September 2004 to 28 February
2005, payable to linked unitholders recorded in the register on Friday, 13 May
2005. The last date to trade `CUM` distribution is Friday, 6 May 2005. The units
will commence trading `EX` distribution on Monday, 9 May 2005. Payment date will
be Monday, 16 May 2005.
No dematerialisation or rematerialisation of linked unit certificates may take
place between Monday, 9 May 2005 and Friday, 13 May 2005, both days inclusive.
By order of the Board
City Property Administration (Proprietary) Limited
15 April 2005
A Wapnick (Chairman) J P Wapnick (Managing director)
CONSOLIDATED INCOME STATEMENT
Reviewed Audited
% Year to Year to
Change 28 Feb 29 Feb
R`000 2005 2004
Revenue 19,7 131 432 109 844
Net property income 18,0 85 451 72 399
Interest received 2 778 860
Investment income - associate 5 238 3 597
Fair value adjustments
- investment property 134 571 61 234
- associate, net of Capital Gains Tax 14 282 6 162
Depreciation (541) (602)
Capital profit/(loss) on disposal of
investment properties 615 (6)
242 394 143 644
Interest paid (8,1) (34 658) (37 699)
Profit before debenture interest 96,1 207 736 105 945
Debenture interest 50,0 (56 520) (37 668)
Profit before taxation 151 216 68 277
Taxation charge (21 307) (10 432)
Net income attributable to ordinary
shareholders 129 909 57 845
Earnings per linked unit (cents) 164,1 95,9
Earnings per share (cents) 114,3 58,1
Headline earnings per linked unit (cents) 32,5 51,3 38,7
Linked units in issue (`000) 113 607 99 625
Distribution per linked unit (cents)
Dividends 0,25 0,19
Interest 49,75 37,81
31,6 50,00 38,00
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
Reviewed Audited
28 Feb 29 Feb
R`000 2005 2004
CASH FLOW FROM OPERATING ACTIVITIES
Net rental income from properties 84 910 71 798
Adjustment for:
- Depreciation 541 602
- Working capital changes 4 413 (849)
Cash generated from operations 89 864 71 551
Investment income 8 016 4 129
Finance costs (34 658) (37 699)
Taxation paid (239) (98)
Distribution to linked unitholder paid (47 378) (32 378)
Net cash inflow from operating activities 15 605 5 505
CASH FLOW FROM INVESTING ACTIVITIES
Investing activities (52 968) (65 468)
Proceeds from disposal of investment properties 3 944 -
Net cash outflow used in investing activities (49 024) (65 468)
CASH FLOW FROM FINANCING ACTIVITIES 33 495 59 441
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 76 (522)
Cash and cash equivalents at beginning of year 1 520 2 042
Cash and cash equivalents at end of year 1 596 1 520
ABRIDGED CONSOLIDATED BALANCE SHEET
Reviewed Audited
28 Feb 29 Feb
R`000 2005 2004
ASSETS
Non-current assets
Investment properties 835 686 650 515
Property, plant and equipment 17 393 17 854
Investments - associated company 33 725 20 485
Current assets 7 845 7 761
Total assets 894 649 696 615
EQUITY AND LIABILITIES
Share capital 1 136 996
Non-distributable reserve 265 319 137 129
Accumulated profit 3 315 1 875
Ordinary shareholders` interest 269 770 140 000
Debentures 211 989 167 510
Linked unitholders` interest 481 759 307 510
Interest bearing borrowings 317 191 325 915
Deferred taxation 36 075 14 798
Current liabilities - interest bearing 153 3 651
- non-interest bearing 59 471 44 741
Total equity and liabilities 894 649 696 615
Linked units in issue (`000) 113 607 99 625
Net asset value per linked unit (cents) 424 309
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
13 982 047
linked units
issued 140 - - - 140
Profit attributable
to ordinary
shareholders - - - 129 909 129 909
Dividends - - - (280) (280)
Transfer to
non-distributable
reserve
- Capital profit
on disposal
of investment property - 615 - (615) -
Fair value adjustments - - - - -
- associate, net
of Capital
Gains Tax - - 14 282 (14 282) -
- investment property - - 134 571 (134 571) -
- deferred
Capital Gains
Tax - - (21 277) 21 277 -
Balance at
28 February 2005 1 136 8 985 256 335 3 314 269 769
RECONCILIATION - EARNINGS PER SHARE TO HEADLINE EARNINGS PER LINKED UNIT
Year to Year to
28 Feb 29 Feb
Cents 2005 2004
Earnings per share 114,3 58,1
Add:Debenture interest per linked unit 49,8 37,8
Earnings per linked unit 164,1 95,9
Fair value adjustments
- investment properties (118,4) (61,4)
- deferred Capital Gains Tax 18,7 10,4
- associate, net of Capital Gains Tax (12,6) (6,2)
Capital profit on disposal of investment
properties 0,5 -
Headline earnings per linked unit 51,3 38,7
Directors:
A Wapnick* (Chairman)
J P Wapnick* (Managing director)
M J Holmes#, R J Inggs*, M Z Pollack#,
S Wapnick
*Executive
Non-executive
#Independent non-executive
Registered Office:
CPA House
101 du Toit Street
Pretoria, 0002
PO Box 15, Pretoria 0001
Tel: (012) 319-8811
Fax: (012) 319 8812
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
e-mail: propworld@cityprop.co.za
website: www.cityprop.co.za
Date: 15/04/2005 02:00:38 PM
Produced by the JSE SENS Department
