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MICC - Consolidated Unaudited Results For The Six Months Ended 31 March 2005
MICC PROPERTY INCOME FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2003/013404/06)
South African Share Code: MCP
Namibian Share Code: MCO
ISIN: ZAE000050175
CONSOLIDATED UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2005
* Interim distribution up 12.16%
* Property portfolio exceeds R1bn
* Strong operational performance continues
INCOME STATEMENT
For the For the For
Six six the
Months months year
ended ended ended
31 Mar 31 Mar 30 Sept
R000 2005 2004 2004
Gross property revenue 91 835 90 392 182 497
Property expenses (29 583) (31 100) (62 334)
Net property revenue 62 252 59 292 120 163
Administrative
Expenses (3 829) (4 028) (8 696)
Other income 954 942 1 851
Operating income
before
finance costs 59 377 56 206 113 318
Finance costs (28 876) (29 428) (57 066)
Net profit before
debenture
interest 30 501 26 778 56 252
Debenture interest (30 406) (24 782) (48 962)
Net profit before
change in fair
value of investment
properties 95 1 996 7 290
Increase in fair
value of
investment
properties 60 257 - 80 974
Net profit
before taxation 60 352 1 996 88 264
Taxation (4 114) (578) (18 254)
Net profit for
the period 56 238 1 418 70 010
BALANCE SHEET
As at As at As at
31 Mar 31 Mar 30 Sept
R000 2005 2004 2004
ASSETS
Non-current assets 1 001 924 862 617 941 480
Investment properties 1 001 669 862 301 941 231
Furniture,
fittings and
office equipment 255 316 249
Current assets 30 017 24 829 31 128
Trade and other
Receivables 8 418 7 736 6 619
Cash and cash
Equivalents 21 599 17 093 24 509
Total assets 1 031 941 887 446 972 608
EQUITY AND LIABILITIES
Shareholders` funds 158 670 33 852 102 444
Share capital 67 67 67
Share premium 32 373 32 373 32 373
Revaluation reserve 124 636 - 68 835
Retained earnings 1 594 1 412 1 169
Non-current liabilities 821 050 812 315 816 654
Long-term borrowings 502 445 502 445 502 445
Debentures 301 467 301 467 301 467
Deferred taxation 17 138 8 403 12 652
Current liabilities 52 221 41 279 53 601
Trade and other payables 23 821 16 170 24 230
Taxation payable 598 322 5 190
Unitholders for
distribution 27 802 24 787 24 180
Total equity and
liabilities 1 031 941 887 446 972 608
CASH FLOW STATEMENT
For the For the For
six six the
months months year
ended ended ended
31 Mar 31 Mar 30 Sept
R000 2005 2004 2004
CASH FLOWS FROM
OPERATING ACTIVITIES (1 556) 36 048 51 260
Cash generated from
Operations 57 384 64 676 131 818
Investment income 954 800 1 709
Finance charges (28 876) (29 428) (57 066)
Distribution to
linked unitholders (26 797) - (24 788)
Taxation paid (4 221) - (413)
CASH FLOWS FROM
INVESTING ACTIVITIES (1 354) (586 403) (594 199)
Letting commissions
paid (1 167) (979) (2 378)
Acquisition of
furniture, fittings
and office equipment (6) (316) (296)
Improvements to and
acquisition of
investment properties (181) (465 353) (472 086)
Acquisition of subsidiary - (102 686) (102 370)
Transaction costs on
initial recognition - (17 688) (17 688)
Net proceeds from the
sale of investment
property - 619 619
CASH FLOWS FROM
FINANCING ACTIVITIES - 567 448 567 448
Net proceeds from the
issue of linked units - 65 003 65 003
Long-term borrowings raised - 502 445 502 445
Net increase in cash
and cash equivalents (2 910) 17 093 24 509
Cash and cash
equivalents at the
beginning of the year 24 509 - -
Cash and cash
equivalents at
the end of the year 21 599 17 093 24 509
STATEMENT OF CHANGES IN EQUITY
Share Share
R000 capital premium
Balance at 30 September 2003 * -
As reported previously 67 33 324
Issue of units in acquiring
properties 54 26 837
Issue of units in terms of
private placing 13 6 593
Offset of share issue expenses
against share premium - (106)
Linked unit issue cost - (951)
Net profit for the period - -
Net profit for the period
as reported - -
Change in accounting policy -
Letting commission - -
Taxation on change in
accounting policy - Letting
commission - -
Dividends declared - -
Balance at 31 March 2004 67 32 373
Balance at 30 September 2003 * -
As reported previously 67 33 324
Issue of units in acquiring
properties 54 26 837
Issue of units in terms of
private placing 13 6 593
Offset of share issue expenses
against share premium - (106)
Linked unit issue costs - (951)
Net profit for the period - -
Net profit for the period
as reported - -
Change in accounting policy -
Letting commission - -
Taxation on change in accounting
policy - Letting commission - -
Change in accounting policy -
Deferred taxation on revaluation - -
Transfer to revaluation reserve - -
Balance as reported previously - -
Change in accounting policy -
Deferred taxation on revaluation - -
Dividends declared - -
Balance at 30 September 2004 67 32 373
Balance at 30 September 2004 67 32 373
Balance as reported previously 67 33 324
Change in accounting policy -
Letting commission - -
Taxation on change in accounting
policy - Letting commission - -
Change in accounting policy -
Deferred taxation on revaluation - -
Linked unit issue costs - (951)
Net profit for the period - -
Change in rate of taxation applied - -
Transfer to revaluation reserve - -
Dividends declared - -
Balance at 31 March 2005 67 32 373
STATEMENT OF CHANGES IN EQUITY (continued)
Revaluation Retained
R000 reserve earnings Total
Balance at
30 September 2003 - - -
As reported previously - - 33 391
Issue of units in
acquiring properties - - 26 891
Issue of units in terms
of private placing - - 6 606
Offset of share issue
expenses against
share premium - - (106)
Linked unit issue cost - - (951)
Net profit for the period - 1 418 1 418
Net profit for the period
as reported - 820 820
Change in accounting
policy - Letting
commission - 854 854
Taxation on change in
accounting policy -
Letting commission - (256) (256)
Dividends declared - (6) (6)
Balance at 31 March 2004 - 1 412 33 852
Balance at 30 September 2003 - - -
As reported previously - - 33 391
Issue of units in
acquiring properties - - 26 891
Issue of units in terms
of private placing - - 6 606
Offset of share issue
expenses against
share premium - - (106)
Linked unit issue costs - - (951)
Net profit for the period - 70 010 70 010
Net profit for the period
as reported - 58 636 58 636
Change in accounting
policy - Letting
commission - 1 708 1 708
Taxation on change in
accounting policy -
Letting commission - (512) (512)
Change in accounting
policy - Deferred taxation
on revaluation - 10 178 10 178
Transfer to revaluation
reserve 68 835 (68 835) -
Balance as reported
Previously 58 657 (58 657) -
Change in accounting
policy - Deferred
taxation on
revaluation 10 178 (10 178) -
Dividends declared - (6) (6)
Balance at
30 September 2004 68 835 1 169 102 444
Balance at
30 September 2004 68 835 1 169 102 444
Balance as reported
previously 58 657 (27) 92 021
Change in accounting
policy - Letting
commission - 1 708 1 708
Taxation on change in
accounting policy -
Letting commission - (512) (512)
Change in accounting
policy - Deferred
taxation on
revaluation 10 178 - 10 178
Linked unit issue
costs - - (951)
Net profit for
the period - 56 238 56 238
Change in rate of
taxation applied 405 (405) -
Transfer to revaluation
reserve 55 396 (55 396) -
Dividends declared - (12) (12)
Balance at
31 March 2005 124 636 1 594 158 670
* Amount less than R1 000
RECONCILIATION BETWEEN EARNINGS AND HEADLINE EARNINGS
For the For the For
six six the
months months year
ended ended ended
31 Mar 31 Mar 30 Sep
R000 2005 2004 2004
Net profit for
the period 56 238 1 418 70 010
Debenture interest 30 406 24 782 48 962
Earnings
attributable
to unitholders 86 644 26 200 118 972
Adjusted for the
following:
Increase in fair
value of
investment
properties (60 257) - (80 974)
Deferred taxation on
fair value adjustment 4 439 12 139
Capital profits on
disposal
of investment
properties - (142) (142)
Headline earnings
attributable
to unitholders 30 826 26 058 49 995
Debenture interest (30 406) (24 782) (48 962)
Headline earnings
attributable
to shareholders 420 1 276 1 033
Earnings per share
(cents) 83.95 2.12 104.50
Earnings per linked
Unit (cents) 129.33 39.11 177.59
Headline earnings per
linked unit (cents) 46.01 38.90 74.63
Headline earnings per
share (cents) 0.63 1.90 1.54
Weighted average
linked units
in issue 66 992 698 66 992 698 66 992 698
COMMENTS
RESULTS
MICC Property Income Fund (`MICC`) is pleased to report its second interim
results and to declare a distribution for the six months ending 31 March 2005 of
41.5 cents per linked unit. (Distribution for the six months ended 31 March
2004 of 37 cents per linked unit.)
MICC has continued its strong operational performance and the growth in the
distribution to linked unitholders since its listing.
The information presented for the six months ended 31 March 2005 has been
prepared in accordance with the company`s accounting policies and International
Financial Reporting Standards (`IFRS`). The information presented has not been
audited or reviewed by the company`s auditors.
CHANGES IN ACCOUNTING POLICIES
In aligning the company`s accounting policies with that of its holding company,
Vukile Property Fund Limited (`Vukile`), the company has changed its accounting
policies for the treatment of the following items:
Letting commissions paid:
Letting commission paid is amortised over the period of the underlying lease
agreement. Previously, letting commission paid was expensed in the period
during which it was incurred.
Deferred taxation on the revaluation of investment properties:
Deferred taxation on the revaluation of investment properties is provided at the
capital gaines tax rate which would apply if the revaluation was to be realised
through the disposal of the properties. Previously, the tax rate applicable to
the company`s taxable income was used.
The changes in accounting policies have been applied retrospectively and, where
applicable, the comparative figures have been reclassified and restated
accordingly.
OPERATIONAL REVIEW
As announced by Vukile previously, it has obtained 74.35% of the issued capital
of MICC through its offer to MICC linked unitholders. To realise synergies and
to reduce costs, MICC has entered into a fixed term management agreement with
Vukile with effect from 1 April 2005.
In terms of the management agreement, Vukile are bound by a strict approval
framework with the strategic executive responsibility still vested in the board
of directors of MICC. The management fee is determined on a cost recovery
basis.
MICC did not acquire or dispose of any properties during the period under
review.
MICC has consolidated the property management of its investment properties and
the number of property managers has been reduced from nine to three, with the
most significant appointment being that of Gensec Property Services
(Proprietary) Limited to manage the Namibian properties.
The vacancy levels in the portfolio, expressed as a percentage of Gross Lettable
Area, have deteriorated marginally from 6.10% as at 30 September 2004 to 6.90%
as at 31 March 2005.
OUTLOOK
The Board is confident that the portfolio will continue to perform favourably
for the foreseeable future.
Directorate
Gerhard van Zyl and Mike Potts were appointed as directors of MICC on 31 January
2005. Mr van Zyl is the Chief Executive Officer and Mr Potts the Financial
Director of Vukile. Mr Potts has been appointed to the audit committee of MICC.
There were no resignations from the board of directors during the period under
review.
DISTRIBUTION ANNOUNCEMENT
MICC`s interim distribution of 41.5 cents per linked unit (comparative
distribution 37 cents) is hereby declared. The distribution has been declared
in the currency of the Republic of South Africa and constitutes a dividend of
0.009 cents per share and an interest payment of 41.491 cents per linked unit.
Trading in the STRATE environment requires settlement within 5 business days.
In accordance with STRATE, the following dates will apply to the distribution.
Last day for trading to qualify for and participate in the distribution
(`Cum` dividend)
Thursday, 9 June 2005
Trading ex-distribution
commences
Friday, 10 June 2005
Record date Friday, 17 June 2005
Distribution payment date
(electronic and
certificated register) Monday, 20 June 2005
Distribution cheques in payment of this distribution to certificated unitholders
will be posted to unitholders on or about Monday, 20 June 2005. Electronic
payment to certificated unitholders will be undertaken simultaneously.
Dematerialised unitholders will have their accounts at their Central Securities
Depository Participant (CSDP) or broker credited on Monday, 20 June 2005.
Any change in address or distribution instruction to apply to this distribution,
must be received by MICC`s transfer secretaries, Computershare Investor Services
2004 (Proprietary) Limited, on or before Thursday, 9 June 2005. Linked unit
certificates may not be dematerialised or rematerialised from Friday, 10 June
2005 to Friday, 17 June 2005, both days inclusive.
On behalf of the Board
Hardie Joubert Willie Kruger
Chairman Director
24 May 2005
TRANSFER SECRETARIES
Computershare Investor Services 2004 (Proprietary) Limited, Investor Services
Division, 17 Marshall Street, Johannesburg, 2001
SECRETARY AND REGISTERED OFFICE
Emma Louise Yates, 2nd Floor, Meersig, Constantia Boulevard, Constantia Kloof,
1709 * P O Box 5029, Weltevreden Park, 1715
DIRECTORS
Hardie Joubert* (Chairman), Johann de Beer*, Mustaq Brey*, Dries du Toit*,
Willie Kruger*, Gerhard van Zyl*, Mike Potts* (* Non executive)
SOUTH AFRICAN SPONSOR
Java Capital (Proprietary) Limited
NAMIBIAN SPONSOR BROKER:
Irwin, Jacobs, Green (Pty) Limited (Member of the NSX)
INVESTOR AND MEDIA RELATIONS
Contact Kathy du Plessis on vukile@dpapr.com, or Tel: 011 728 4701
Date: 24/05/2005 10:00:15 AM
Produced by the JSE SENS Department
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