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Ambit - Unaudited financial results and distribution for the six month period
ended 31 March 2005
Ambit Properties Limited
Registration number: 2001/007003/06
Share code: ABT ISIN code: ZAE000051645
UNAUDITED FINANCIAL RESULTS AND DISTRIBUTION FOR THE SIX MONTH PERIOD ENDED
31 MARCH 2005
GROUP INCOME STATEMENT
Unaudited Audited
1 Oct 04 4 Feb 04
to to
31 Mar 05 30 Sept 04
(6 months) (8 months)
Notes R`000 R`000
Revenue 52 300 64 951
Net rental income from properties 30 598 39 835
Interest and dividend income from associate 3 918 4 033
Interest earned 2 265 416
Finance costs (14 012) (19 452)
Net profit before fair value adjustments 22 769 24 832
Surplus on revaluation and disposal of
investment properties 29 956 35 644
Net profit before debenture interest and taxation 52 725 60 476
Debenture interest (22 770) (26 520)
Net profit before taxation 29 955 33 956
Taxation (7 987) (10 239)
Net profit after taxation 21 968 23 717
Share of associate company`s after tax profits 10 097 1 492
Net profit attributable to linked unitholders 32 065 25 209
Headline earnings per linked unit (cents)
(weighted) 2.2 14,25 15,93
Earnings per linked unit (cents) (weighted) 2.2 34,50 32,86
Headline loss per share (cents) (weighted) 2.2 (0,07) (0,92)
Earnings per share (cents) (weighted) 2.2 20,18 16,01
Distributable earnings per linked unit (cents) 13,10 16,75
Distribution per linked unit (cents) 13,10 16,75
GROUP BALANCE SHEET
Unaudited Audited
31 Mar 05 30 Sept 04
Notes R`000 R`000
ASSETS
Non-current assets
Investment properties 581 300 555 500
Investment in associate company 75 933 65 836
Total non-current assets 657 233 621 336
Current assets
Trade and other receivables 5 408 5 385
Cash resources and short-term investments 66 314 29 286
Total current assets 71 722 34 671
TOTAL ASSETS 728 955 656 007
EQUITY AND LIABILITIES
Capital and reserves
Share capital and reserves 2.3 92 215 53 076
Non-current liabilities
Debentures 312 866 284 989
Deferred taxation 18 227 10 239
Interest bearing borrowings 275 624 275 654
Total non-current liabilities 606 717 570 882
Current liabilities
Trade and other payables 7 227 5 529
Linked unitholders for distribution 22 796 26 520
Total current liabilities 30 023 32 049
TOTAL EQUITY AND LIABILITIES 728 955 656 007
GROUP CASH FLOW STATEMENT
Unaudited Audited
31 Mar 05 30 Sept 04
R`000 R`000
OPERATING ACTIVITIES
Cash generated by operating activities 32 274 39 979
Adjusted for:
Interest received 2 265 416
Investment income 3 918 4 033
Finance costs (14 012) (19 452)
Distributions paid to linked unitholders (26 494) -
Cash (outflow)/inflow from operating activities (2 049) 24 976
INVESTING ACTIVITIES
Acquisition of associate - (64 344)
Acquisition of investment properties (11 800) (519 754)
Disposal of investment properties 16 483 -
Improvements to investment properties (526) (102)
Cash inflow/(outflow) from investing activities 4 157 (584 200)
FINANCING ACTIVITIES
Linked units issued 35 000 316 652
Share issue expenses (50) (3 796)
Interest bearing borrowings (repaid)/raised (30) 275 654
Cash inflow from financing activities 34 920 588 510
Increase in cash and cash equivalents 37 028 29 286
Cash and cash equivalents at beginning of period 29 286 -
Cash and cash equivalents at end of period 66 314 29 286
GROUP STATEMENT OF CHANGES IN EQUITY
Distri- Revalu-
Share Share butable ation
capital premium reserves reserve Total
R`000 R`000 R`000 R`000 R`000
On listing on 4 February 2004 1 493 28 361 - - 29 854
Units issued during the year 90 1 719 - - 1 809
Net profit for the year - - 25 209 - 25 209
Surplus on revaluation of
investment properties - - (24 952) 24 952 -
Initial expenses charged
against share premium - (3 796) - - (3 796)
Balance at 30 September 2004 1 583 26 284 257 24 952 53 076
Units issued during the year 155 6 969 - - 7 124
Net profit for the year - - 32 065 - 32 065
Surplus on revaluation of
investment properties
(net of deferred tax) - - (21 544) 21 544 -
Share issue expenses charged
against share premium - (50) - - (50)
Balance at 31 March 2005 1 738 33 203 10 778 46 496 92 215
1. OTHER INFORMATION 31 Mar 2005 30 Sept 2004
* Linked units in issue 173 814 215 158 327 490
* Weighted average linked units in issue 158 929 752 157 419 569
* Net asset value, including distribution
(cents per linked unit) 246 234
* Listed market price (cents per linked unit) 230 218
* Discount to net asset value 7% 7%
2. NOTES TO THE FINANCIAL STATEMENTS
2.1 Accounting policies
These financial results are prepared in accordance with South African
Statements of Generally Accepted Accounting Practice. The accounting policies
used in the preparation of the interim financial statements are consistent with
those employed in the annual financial statements for the eight month period
ended 30 September 2004, except for the accounting treatment of goodwill. In
accordance with IFRS 3: `Business Combinations`, with effect 1 October 2004, the
group is no longer required to amortise goodwill. Any future goodwill will be
assessed annually for impairment.
2.2 Earnings and headline earnings
Earnings and headline earnings for the period are based on the weighted
average number of linked units in issue for the period, and are calculated as
follows:
1 Oct 2004 to 4 Feb 2004 to
31 Mar 2005 30 Sept 2004
R`000 R`000
Debenture interest 22 770 26 520
Net profit 32 065 25 209
Earnings 54 835 51 729
Amortisation of goodwill - 45
Capital surpluses earned during the period
(net of deferred taxation) (32 185) (26 700)
Headline earnings 22 650 25 074
To calculate earnings and headline earnings per share, debenture interest is
taken off earnings and headline earnings respectively.
Ambit Properties Limited (`Ambit`) group`s headline earnings have been adjusted
to take into account the look-through approach on its share of the retained
earnings of its associate, Oryx Properties Limited. This has meant that headline
earnings per linked unit has changed from 17,04 to 15,93 cents, and headline
earnings per share has changed from 0,19 to a loss of 0,92 cents in the prior
year.
2.3 Issue of units
In order to fund future acquisitions, 15 486 725 units were issued on 24 March
2005 at a price of 226 cents, plus 13,10 cents per unit in respect of the
anticipated notional distribution.
2.4 Contingent liabilities
Guarantees
Guarantees amounting to R0,8 million (30 September 2004: R0,8 million) have
been issued in lieu of municipal service deposits.
2.5 Primary business segments for the six month period ended 31 March 2005:
Retail Commercial Industrial Corporate Group
R`000 R`000 R`000 R`000 R`000
Income statement
Revenue 24 537 14 473 7 195 6 095 52 300
Net rental income
from properties 17 560 10 523 5 893 - 33 976
Administration expenses - - - (3 378) (3 378)
Interest income
from associate company - - - 3 918 3 918
Interest earned 71 10 8 2 176 2 265
Finance costs - - - (14 012) (14 012)
Surplus on revaluation
and disposal of
investment properties 27 888 (2 439) 4 507 - 29 956
Debenture interest - - - (22 770) (22 770)
Taxation (7 518) 928 (1 282) (115) (7 987)
Share of associate
company`s after
tax profits - - - 10 097 10 097
Net profit attributable
to linked unitholders 38 001 9 022 9 126 (24 084) 32 065
Balance sheet
Investment properties 337 600 158 100 85 600 - 581 300
Investment in associate - - - 75 933 75 933
Current assets 2 891 1 795 632 66 404 71 722
Total assets 340 491 159 895 86 232 142 337 728 955
Deferred taxation 13 723 1 967 2 875 (338) 18 227
Current liabilities 2 690 1 348 648 25 337 30 023
Capital, debentures
and borrowings - - - 680 705 680 705
Total equity and
liabilities 16 413 3 315 3 523 705 704 728 955
3. COMMENTS
3.1 Results
Ambit`s distribution for the six months ended 31 March 2005 amounts to 13,10
cents per linked unit (30 September 2004: 16,75). The comparatives represent the
eight month period from 4 February 2004 to 30 September 2004. Accordingly, the
results are not directly comparable. However, the results are in line with the
prospectus forecast at listing and reflect growth of 4,3% on the previous
distribution on a pro rata basis.
3.2 Property portfolio
The property portfolio has performed substantially in accordance with
management`s expectations.
The portfolio has maintained a favourable occupancy rate, which is well above
industry norms.
The vacancy is 2,4% of rental value, 2,0% of rentable area.
Ambit acquired 12 Nourse Avenue, Epping, Cape on 4 January 2005 for R11,8
million cash.
Five properties were sold during the period with transfers effected in
January and March. The net sales proceeds of R16,5 million provided a surplus on
acquisition costs of R3,9 million. Sale agreements have been concluded for the
disposal of a further four properties (these being the Kimberley, Carletonville
and Springs and the Mooi Street properties), with transfers anticipated in June.
The disposals will realise R18,1 million, providing a surplus on acquisition
costs of R1,2 million. The disposals are in line with Ambit`s investment policy
of focusing on larger properties in the major metropolitan areas.
3.3 Oryx associate investment
The earnings in Oryx were in line with management`s expectations. In
addition, Oryx has made significant capital gains on both its direct property
and listed portfolio. Ambit`s investment in Oryx has appreciated by R10,1
million, being Ambit`s share of the capital surpluses net of taxation. The 19
189m2 extension to Maerua Mall Shopping Centre in Windhoek is proceeding well,
and is on track for completion in March 2006.
3.4 Valuations
In conformity with Generally Accepted Accounting Practice on Investment
Properties (AC 135), the portfolio is valued at each reporting date. Ambit has
obtained independent valuations of the entire portfolio from
CB Richard Ellis and Motseng Marriott as at 31 December 2004. These have been
updated by the directors in consultation with the external valuers to R581,3
million. This reflects a growth of R30,0 million which has been included in the
balance sheet and income statements. The growth of the core portfolio (excluding
acquisitions and disposals) over the year end valuations is 5%. The surplus, net
of deferred taxation, has been transferred to
non-distributable reserves.
3.5 Borrowings
At 31 March 2005 Ambit`s debt was R275,7 million (30 September 2004: R275,7
million), which represents a long-term debt to long-term assets ratio of 41,9%
(30 September 2004: 44,4%). R142,9 million of this debt (52%) (30 September
2004: 60%) is subject to fixed interest agreements for periods from 2004 to
2008.
The average interest rate as at 31 March 2005 was 10,7% (30 September 2004:
10,7%).
3.6 Post balance sheet events
Other than the disposals referred to in note 3.2 above, there have been no
significant events since the balance sheet date.
3.7 Liquidity
During the six months, trade in Ambit linked units amounted to a meaningful
32,2% of the units in issue.
3.8 Prospects
Ambit is committed to the expansion of its property portfolio through the
acquisition of quality investments which will show sustainable rental growth.
Management is actively pursuing several opportunities, which will be funded by a
combination of cash, the issue of new units and debt.
The property portfolio is likely to maintain the current high occupancy
levels to year end and beyond. Notwithstanding the disposals of certain of the
higher yielding properties, which do not fit Ambit`s investment strategy, and
the competitive yields sought by vendors of quality property investments,
management is confident that the distribution for the second half of the
financial year will show further growth.
4. DECLARATION OF DISTRIBUTION
Notice is hereby given of distribution Number Two amounting to 13,10 cents per
unit, for the six month period to 31 March 2005. This distribution comprises
interest on debentures of 13,10 cents per unit.
Last date to trade cum distribution Friday, 3 June 2005
Units will trade ex distribution Monday, 6 June 2005
Record date to participate in the distribution Friday, 10 June 2005
Payment of distribution Monday, 13 June 2005
Linked unit certificates may not be dematerialised or re-materialised between
Monday, 6 June 2005 and Friday, 10 June 2005, both days inclusive.
On behalf of the board
DL Brown Chairman
NBS Harris Chief Executive Officer
19 May 2005
Directors: DL Brown (Chairman), NBS Harris (CEO)*, JH Beare, CJ Ewin, NP Mageza,
IN Mkhari, F Uys, F Meisenholl (alternate) *executive
Registered Office
Ambit Properties Limited
1st Floor, Palazzo Towers West
Monte Casino Boulevard
Fourways, 2055
PO Box 783676
Sandton, 2196
Auditors
Deloitte & Touche Chartered Accountants (SA)
Sponsor
Exchange Sponsors PTY Limited
Transfer secretaries
Computershare Investor Services 2004 (Pty) Ltd
