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Paramount Property Fund Limited - Unaudited interim report for the 6 months
ended 30 april 2005
Paramount Property Fund Limited
(Incorporated in the Republic of South Africa)
(REG. NO.1945/019928/06)
Share code PRA ISIN ZAE000028577
UNAUDITED INTERIM REPORT
for the 6 months ended 30 April 2005
DIRECTORS: A D Dalling (Chairman)*, R C Squire - Howe (Managing), J A Bester*,
F J Jenkings,
B H Kerswill, A A Maresky, F Meisenholl* (alt. R D Jeffery), N P Mageza*(alt. G
C Cannings), A D P Ovenstone*, G P Phillips*, R S Schur*.
* Non-executive
The consolidated unaudited results of the group for the 6 months ended 30 April
2005 are as follows:
Unaudited Unaudited Audited
year ended
April 2005 April 2004 October 200
Note R`000 R`000 R`000
CONSOLIDATED INCOME STATEMENT
Revenue 81,668 61,717 133,444
Trading income 64,115 50,182 100,270
Interest received 473 361 1,524
Revaluation of investment properties - - 33,683
Amortisation of negative goodwill 609 - 14
Less - depreciation (219) (213) (838)
Less - amortisation of debenture (659) (229) (603)
discount
Less - interest paid on borrowings (38,702) (34,131) (70,456)
Income before taxation 25,617 15,970 63,594
Taxation 1,291 530 (845)
Income before distribution 26,908 16,500 62,749
Linked units in issue (`000) 1 114,592 63,523 92,076
Weighted average linked units in 114,592 63,523 72,925
issue (`000)
Earnings per linked unit (cents) 23.5 26.0 86.0
Headline earnings per linked unit 22.9 26.0 43.1
(cents)
Core earnings per linked unit 27.5 30.1 53.9
(cents)
Distribution per linked unit (cents) 26.0 25.0 51.0
Abridged Consolidated Balance Sheet
Total combined unit holders funds 485,289 276,057 393,150
B debentures 1 60,340 96,924 96,924
Long term borrowings 700,979 541,130 614,652
Deferred taxation - - 497
Unitholders for distribution 14,897 7,940 12,430
Bank overdraft 136 3,415 -
Other current liabilities 11,102 8,729 15,599
Capital employed 1,272,743 934,195 1,133,252
Investment properties 1,220,784 922,618 1,099,379
Goodwill 451 - 451
Negative goodwill - - (609)
Deferred taxation 794 1,368 -
Cash at bank - - 5,563
Taxation 457
Other current assets 50,257 10,209 28,468
Total employment of capital 1,272,743 934,195 1,133,252
Net asset value per linked unit 441 435 427
(cents)
Abridged Consolidated Cash Flow
Statement
Net income before taxation for the 25,617 15,970 63,594
period
Adjustments for:
Interest received (473) (361) (1,524)
Interest paid 38,702 34,131 70,456
Revaluation of investment - - (33,683)
properties
Provisions raised 488 1,039 850
Amortisation of negative (609) - (14)
goodwill
(Surplus) / loss on disposal of (100) - 35
properties
Depreciation 219 213 838
Operating income before working 63,844 50,992 100,552
capital changes
Working capital changes (22,985) (22,719) 18,358
Cash generated from operations 40,859 28,273 118,910
Interest received 473 361 1,524
Interest paid - external (38,702) (34,131) (70,456)
Interest paid - debentures (27,478) (15,037) (32,612)
Taxation paid (4) (448) (1,244)
Net cash inflow from operating (24,852) (20,982) 16,122
activities
Net cash inflows from financing 86,327 32,508 106,030
activities
Net cash inflow from capital raising 57,933 14,768 107,911
activities
Proceeds on disposal of property 28,425 16,971 18,412
Cash outflows from investing (153,532) (69,293) (265,525)
activities
(5,699) (36,028) (17,050)
Cash and cash equivalents at the 5,563 22,613 22,613
beginning of the period
Cash and cash equivalents and the (136) (3,415) 5,563
end of the period
Statement of changes in equity
Non-
Share Share distri- Accumu- Revaluation A linked Total
Capital Premium butable lated Reserve Sub Units Linked
Reserves Profit/ total Unit-
(Loss) holders
Balance
at
31/10/2003 5,159 7,802 45 225 1,034 14,265 211,016 225,281
Increase
in share
capital 4,049 4,049 4,049
Net increase
in share
premium 1,213 1,213 1,213
Issue of
A debentures 0 138,630 138,630
Amortisation
of debenture
discount 0 603 603
Realisation
of listed
investments (1,034) (1,034) (1,034)
Transfer to negative
Goodwill (5) (5) (5)
Surplus to
31/10/2004 62,749 62,749 62,749
Debenture
interest
distributed (38,336) (38,336) (38,336)
Balance at
31/10/2004 9,208 9,015 40 24,638 0 42,901 350,249 393,150
Ordinary
shares
issued 2,252 2,252 2,252
Net increase
in share
premium 2,175 2,175 2,175
Issue of
A debentures 0 90,090 90,090
Amortisation
of debenture
discount 0 659 659
Surplus to
30/4/2005 26,908 26,908 26,908
Debenture
interest
distributed (29,945) (29,945) (29,945)
11,460 11,190 40 21,601 0 44,291 440,998 485,289
Note:
1) The B debentures are convertible into linked units in 5 equal tranches
commencing in the financial year after their issue. The converted linked units
participate in all income from 1 November each year. 7 440 801 B debentures
converted into linked units with effect from 1 November 2004.
Capital Expenditure
At 30 April 2005 the company had entered into contracts for the acquisition of
rental properties totalling R37 796 250. These acquisitions are being funded as
follows:
Issue of new linked units: R8 148 125
Borrowings and existing resources: R29 648 125
ACCOUNTING POLICIES
The results to 30 April 2005 have been prepared on a basis consistent with the
accounting policies set out in the last Annual Financial Statements and in
accordance with South African Statements of Generally Accepted Accounting
Practice.
COMMENTARY
Review of results
The results for the first 6 months are in line with expectations. Distributions
continue to show modest growth, with the interest distribution for the second
quarter ended 30 April 2005 amounting to 13 cents per linked unit, making 26
cents per linked unit for the 6 months ended 30 April 2005, compared with 25
cents per linked unit for the corresponding period in 2004.
Property Portfolio
During the period under review the Golden Acre retail component in Cape Town,
which was purchased for R130 million, and the GKN Chep property in Kwazulu-
Natal, purchased for R12,2 million, were transferred to the company. In
addition, acquisition agreements were signed in respect of the following
properties, for transfer after 30 April 2005:
Cowey Centre, Berea, Durban R21,5 million
Edgars building, Stanger, R16,3 million
Kwazulu-Natal
The following properties were sold during the 6 months ended 30 April 2005. The
effective dates of the sales are date of transfer, which is currently underway:
Deka Park, Spartan Industria, R3,7
Gauteng million
National Socket Screws R5.3
million
Linked unit holders are referred to the press announcement on 1 June 2005, in
which it was announced that the company had disposed of a portfolio of 15
properties to Pangbourne Properties Limited, for a consideration of
R125 million, effective 1 September 2005. This transaction is subject to the
following conditions:
Completion of a due diligence exercise by Pangbourne
Approval of the transactions being granted by the boards of both Pangbourne and
Paramount
Approval of the transaction by the Competition Commission.
At 30 April 2005 the group owned 63 rental properties with a book value of
R1 221 million, which will reduce to 48 properties with a book value of
R1 118 million subject to the latest transactions being concluded.
During the 6 months ended 30 April 2005, 20 225 m? of vacant space was leased,
and leases in respect of 20 271m? were renewed. At 30 April 2005, 2.66% of the
portfolio lettable area was vacant. This is significantly lower than the sector
average.
DECLARATION OF DISTRIBUTION
Notice is hereby given that the board of directors has declared a quarterly
interest distribution of 13 cents per linked unit in respect of the quarter
ended 30 April 2005.
The last day to trade cum distribution will be Friday, 1 July 2005. The linked
units will commence trading ex distribution as from Monday, 4 July 2005 and the
record date will be Friday, 8 July 2005. The distribution will be paid on
Monday, 11 July 2005.
Linked units certificates may not be dematerialised or rematerialised between
Monday, 4 July 2005 and Friday, 8 July 2005, both days inclusive.
BY ORDER OF THE BOARD
SPIRE PROPERTY SERVICES (PTY) LTD CAPE TOWN
SECRETARIES 17 June 2005
Registered office Transfer Secretaries
Tannery Park Computershare Investor Services 2004 (Pty) Ltd
23 Belmont Road 70 Marshall Street
Rondebosch 7700 Johannesburg 2001
P O Box 155 P O Box 61051
Rondebosch 7701 Marshalltown 2107
Date: 17/06/2005 02:51:19 PM
Produced by the JSE SENS Department
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