| Fri 15 Apr 2005, 16:06 | | Octodec - Unaudited Interim Results Of The Group F |
|
Octodec - Unaudited Interim Results Of The Group For The Six Months Ended 28
February 2005
OCTODEC INVESTMENTS LIMITED AND ITS SUBSIDIARIES
(Incorporated in the Republic of South Africa)
(Registration number 1956/002868/06)
Share code: OCT ISIN: ZAE000005104
(`Octodec` or `the company`)
UNAUDITED INTERIM RESULTS OF THE GROUP FOR THE SIX MONTHS ENDED 28 FEBRUARY
2005
Distribution up by 9% to 31,6 cents per linked unit
Gearing at 44% allowing for further expansion
ABRIDGED CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
Six months Six months Year to
Change 28 February 29 February 31 August
R`000 % 2005 2004 2004
Revenue 6,5 59 396 55 792 112 399
Net property income 1,5 37 762 37 214 75 480
Interest received 1 773 1 658 5 726
Investment income -
associate 3 045 2 896 4 848
Investment income -
other 6 5 11
Capital loss on
disposals
of properties (119) - (1)
Fair value
adjustments
- associate, net of
Capital
Gains Tax 14 282 6 162 6 162
- investment property - - 73 451
56 749 47 935 165 677
Interest paid (20,6) (16 688) (21 008) (40 114)
Depreciation (250) (252) (510)
Profit before
debenture interest 49,2 39 811 26 675 125 053
Debenture interest 25,8 (24 647) (19 595) (43 764)
Profit before
taxation 15 164 7 080 81 289
Taxation charge (803) (414) (14 402)
Net income after
taxation 14 361 6 666 66 887
Linked units in issue (`000) 78 345 67 896 73 163
Earnings per share
(cents) 18,3 9,8 91,4
Earnings per linked
unit
(cents) 28,7 49,8 38,7 151,2
Headline earnings
per linked
unit (cents) 7,1 31,7 29,6 60,8
Distribution per
linked unit
(cents)
Dividends 0,14 0,14 0,23
Interest 31,46 28,86 47,27
9,0 31,60 29,00 47,50
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
Six months Six months Year to
28 February 29 February 31 August
R`000 2005 2004 2004
Cash flow from operating activities
Net rental income from properties 40 559 37 923 74 970
Adjustment for:
- Depreciation 249 252 510
- Working capital changes 11 244 (1 234) (1 059)
Cash generated from operations 52 052 36 941 74 421
Investment income and
interest received 1 779 3 272 5 735
Finance costs (16 688) (21 008) (40 114)
Taxation paid (782) (23) (24)
Distribution to linked unitholder paid (24 169) (16 499) (36 189)
Net cash inflow from operating
activities 12 192 2 683 3 829
Cash flow from investment activities
Investing activities (68 523) (5 616) (13 006)
Proceeds from disposal of investment
properties 1 500 - 800
Net cash outflow used in investing
activities (67 023) (5 616) (12 206)
Cash flow from financing activities 54 992 3 792 8 131
Net increase/(decrease) in cash and
cash equivalents 161 859 (246)
Cash and cash equivalents
at beginning of period (176) (10) 70
Cash and cash equivalents
at end of period (15) 849 (176)
ABRIDGED CONSOLIDATED BALANCE SHEET
Unaudited Audited
28 February 31 August
R`000 2005 2004
ASSETS
Non-current assets
Investment properties 811 803 749 156
Plant and equipment 2 043 2 041
Investments - listed 26 602 21 304
- associated company 33 726 15 438
Current assets 12 604 9 929
Total assets 886 778 797 868
EQUITY AND LIABILITIES
Share capital 11 200 11 200
Non-distributable reserve 191 196 172 530
Retained profit 1 647 1 556
Ordinary shareholders` interest 204 043 185 286
Debentures 242 923 242 923
Linked unitholders` interest 446 966 428 209
Interest bearing borrowings 352 557 297 812
Deferred taxation 23 008 22 213
Current liabilities - interest bearing 5 510 5 642
- non-interest bearing 58 737 43 992
Total equity and liabilities 886 778 797 868
Linked units in issue (`000) 78 345 78 345
Net asset value per linked unit (cents) 571 547
STATEMENT OF CHANGES IN EQUITY
Non-
distribu- Distribu-
Share table table
R`000 capital reserve reserves Total
Balance at 1 September 2003 11 200 100 050 1 035 112 285
Net income attributable to
ordinary shareholders - - 66 887 66 887
Dividends paid - - (177) (177)
Transfer to non -distributable
reserve - 72 480 (66 189) 6 291
Balances at 1 September 2004 11 200 172 530 1 556 185 286
Net income attributable to
ordinary shareholders - - 14 361 14 361
Dividends - - (110) (110)
Transfer to non -distributable
reserve - - - -
- Capital loss on disposal of
investment property - (119) 119 -
Fair value adjustments
- associate, net of Capital
Gains Tax - 14 282 (14 282) -
Adjustment to value of listed
investment, net of Capital
Gains Tax - 4 503 - 4 503
Balance at 28 February 2005 11 200 191 196 1 644 204 040
RECONCILIATION - EARNINGS PER SHARE TO HEADLINE EARNINGS PER LINKED UNIT
Unaudited Unaudited Audited
Six months Six months Year to
28 February 29 February 31 August
Cents 2005 2004 2004
Earnings per share 18,3 9,8 91,4
Add:debenture interest per linked unit 31,5 28,9 59,8
Earnings per linked unit 49,8 38,7 151,2
Capital loss on disposals of properties 0,2 - -
Fair value adjustments
- associate, net of Capital Gains Tax (18,3) (9,1) (8,4)
- investment property, net of
Capital Gains Tax - - (82,0)
Headline earnings per linked unit 31,7 29,6 60,8
Notes to the financial statements
1. The principal accounting policies used by Octodec 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 31 August 2004.
The financial statements have been prepared in accordance with the
International Financial Reporting Standard applicable to interim reporting.
2. An amount of R57,6 million has been committed by the company in respect of
capital expenditure relating to the improvement of certain properties. These
developments will be financed by way of facilities secured from the company`s
bankers as well as funds raised from a recent capital raising exercise.
3. Capital expenditure during the year amounted to R64,3 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 28 February 2005, amounted to R39,9 million.
5. 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 31
August 2005.
Comments
Review of results
The directors of Octodec are pleased to report that the company has continued to
produce sustained growth in earnings to its linked unitholders. Headline
earnings per linked unit for the six-month period ended 28 February 2005,
amounted to 31,7 cents (2004: 29,6 cents), an increase of 7,1% over the previous
comparative period. Rental income and net rental income increased by 6,5% and
1,5%, respectively, compared with the previous six-month period ended 29
February 2004.
The interim distribution per linked unit for the period of 31,6 cents (2004:
29,0 cents) represents an increase of 9% on that paid in the previous
corresponding period.
The favourable climate of reduced interest rates and management`s pro-active
approach to letting, as well as a containment of operating costs, resulted in
Octodec`s growth in earnings and distributions.
Income from an associate company, IPS, in which Octodec 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 had a further positive impact on the
results.
Property portfolio
Transfer was taken of three Johannesburg CBD properties at an aggregate purchase
price of R16 million during the period. These acquisitions are in line with the
strategic objective of acquiring quality property.
Management continues to focus on increasing the quality of properties through an
ongoing programme of upgrading.Building operations have recently commenced which
include industrial and commercial units in Silvertondale Ext. 1.
The refurbishment of Killarney Mall shopping centre is ongoing and is expected
to be completed in October 2005.This includes the construction of approximately
5 500m2 of additional retail space including a two-level Edgars store and an
additional 430 parking bays. The cost of this project is R88 million and is
expected to yield an initial 11% return.
The vacancy factor of the portfolio remained stable at approximately 7%( 2004:
7%) of total potential rental income. Woodmead Value Mart, Killarney Mall,
Elardus Park and Waverley Plaza continue to enjoy strong growth through
increased consumer spending.
Interest risk management and borrowings
At 28 February 2005 Octodec`s borrowings amounted to R357 million, equating to a
44% debt to property value ratio. At 28 February 2005, interest rates have been
fixed in respect of 44% of net borrowings for periods ranging from November 2006
to November 2007. The current weighted average cost of borrowings is 10,5%.
Prospects
The Octodec Board is confident that, subject to market conditions remaining
favourable,Octodec`s distribution for the second six-month period should show an
increase which is in line with the distribution growth for the first six-month
period.
Declaration of dividend No. 30 and interest payment (`distribution`) Notice is
hereby given that dividend No. 30 of 0,14 cent (2004: 0,14 cent)per ordinary
share together with interest of 31,46 cents per debenture (2004: 28,86 cents),
for the period 1 September 2004 to 28 February 2005, has been declared, 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 J P Wapnick
(Chairman) (Managing director)
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 Transfer Secretaries
CPA House Computershare Investor Services 2004
101 du Toit Street (Pty) Ltd
Pretoria, 0002 (Registration number 2004/003647/07)
PO Box 15, Pretoria 0001 70 Marshall Street
Tel: (012) 319-8811 Johannesburg 2001, PO Box 61051
Fax: (012) 319-8812 Marshalltown 2107
Tel: (011) 370-7700
Fax: (011) 688-7712
CITY PROPERTY
Property Asset Managers
e-mail address: propworld@cityprop.co.za
website address: www.cityprop.co.za
Date: 15/04/2005 02:01:07 PM
Produced by the JSE SENS Department
