| Thu 4 Aug 2005, 18:07 | | Capital - Interim Results And Income Distribution |
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Capital - Interim Results And Income Distribution Declaration
Capital Property Fund
(`Capital` or the `Fund`)
Share Code: CPL
ISIN: ZAE000001731
(A Portfolio in Capital Property Trust Scheme, a Collective Investment Scheme in
Property established in terms of the Collective Investment Schemes Control Act,
No 45 of 2002 managed by Property Fund Managers Limited (`PFM`))
(Incorporated in the Republic of South Africa)
(Registration No. 1980/009531/06)
Managed by Property Fund Managers Ltd
INTERIM RESULTS AND INCOME DISTRIBUTION DECLARATION
The directors of Property Fund Managers Limited, management company of Capital,
announce that the interim reviewed consolidated results of the Fund for the six
months ended 30 June 2005 are as follows
1 PREPARATION AND ACCOUNTING POLICIES
The interim financial statements are prepared in accordance with International
Financial Reporting Standards (IFRS), as well as the requirements of the
Companies Act in South Africa. The effects of accounting policy changes
resulting from IFRS compliance are not material. The interim financial
statements have not been audited or reviewed by the Fund`s auditors. Comparative
figures for the period ended 30 June 2004 have been restated to reflect
recoveries of operating costs from tenants as property income.
2 NET INCOME
Capital`s distributable earnings for the interim period ended 30 June 2005
amounted to 16,52 cents per unit. This represents growth of 11,6% over the 14,80
cents per unit distribution for the interim period ended 30 June 2004.
3 COMMENTARY ON RESULTS
General
Trading conditions at the retail centres in the Capital portfolio remain
positive. Industrial space is fully let and the office market has been improving
steadily resulting in a significant decrease in the vacancies in the office
portfolio. The overall portfolio vacancies have declined from 7% to 4% over the
last 6 months.
The large tranche of properties acquired in 2004 has performed better than
expected and has considerably improved the quality of Capital`s income stream.
These acquisitions have been fully integrated into Capital and further
enhancement of these property values will come from ensuring that renewals are
concluded at market-related rentals and that operating costs and recoveries are
brought in line with Capital`s targets.
Capital`s policy is to revalue properties on an annual basis at the financial
year-end, which was last done at 31 December 2004.
Acquisitions
Mutsindo Mall in Thohoyandou
Capital has agreed to acquire a shopping centre in Thohoyandou for a
consideration of R46,25 million payable in cash. The centre has a strong
national tenant profile and includes Spar, Ackermans, Truworths and ABSA.
The anchor tenant is the Spar supermarket with the highest turnover in the
country.
The centre is six months old and is well located between the major transport
nodes in the area. The projected forward yield on the building is 11,6%,
contributing positively to the overall yield of Capital.
Industrial development in Midrand
Capital has agreed to purchase four industrial warehouses, totalling 10 000
square metres, in Corporate Park North in Midrand to be erected by RMB
Properties. The purchase price is R30 million and the projected forward yield is
11,75%.
The park is well located for access to and egress from the N1 highway, and all
warehouses enjoy excellent highway frontage.
Construction of the project is scheduled to commence in August of 2005.
Industrial property in Gauteng
Agreement has been reached for the purchase of an industrial property in the
Robertville area with a national blue-chip tenant. The purchase price is R10,1
million and the projected forward yield is 10,5%.
Acquisitions will be funded from existing facilities.
Further sale agreements
A portfolio of R60 million has been sold as part of the divestment by Capital
out of non-core properties. While the terms have been agreed and the due
diligence completed, the agreement remains subject to regulatory approval by the
Competition Commission.
Further individual sales, with a total value of R20 million, are in the process
of being transferred to various private purchasers.
Extensions and refurbishments
Plans have been finalised for the development of additional parking at 2 Long
Street. Construction is due to commence in October 2005. Once the parking is
complete, the value of the property to Capital and the tenants will be greatly
enhanced. Work is now complete on the additional parking at 66 Park Lane, in the
commercial hub of Sandton. Various smaller projects are progressing to enhance
the overall quality of the portfolio.
4 STRATEGY
Capital`s strategy remains consistent in replacing older, lower-grade buildings
with properties having sound fundamentals and long-term growth potential.
Capital is investigating opportunities to acquire good properties in all sectors
with positive growth prospects.
Capital remains cautious when acquiring properties in the current environment
where yields are at historical lows and prices have increased considerably in
the past twelve months.
5 OUTLOOK
Growth in distribution for the year to 31 December 2005 is expected to be
approximately 10%. This forecast has not been reviewed by the Auditors.
The positive growth in the property sector is expected to continue for the
remainder of the year. Capital`s management team remains focused on extracting
further value from the existing portfolio and looking for new opportunities by
acquiring fundamentally good income growth and value properties.
6 INCOME DISTRIBUTION
Notice is hereby given that a cash distribution of 16,52 cents per unit (the
distribution) has been declared payable to the unitholders recorded in the books
of Capital at the close of business on the record date, Friday, 26 August 2005.
Unitholders are advised that the last day to trade `cum` the distribution will
be Friday, 19 August 2005. The units will trade `ex` the distribution as from
Monday, 22 August 2005. Payment will be made on Monday, 29 August 2005. Unit
certificates may not be dematerialised or rematerialised during the period
Monday, 22 August 2005 to Friday, 26 August 2005, both days inclusive.
By order of the Board
Johannesburg
2 August 2005
CONSOLIDATED INCOME Unaudited Unaudited
STATEMENTS
Six months Six months Audited
ended ended Year ended
30 June 30 June 31 December
2005 2004 2004
R000 R000 R000
Property income 113 663 43 609 155 721
Interest 513 1 529 2 241
Total income 114 176 45 138 157 962
Expenditure 43 582 18 596 63 602
Net operating profit 70 594 26 542 94 360
Finance charges 7 247 - 11 093
Headline earnings 63 347 26 542 83 267
Net write-up on revaluation
of
investment property - - 87 803
Net profit/(loss) on
disposal of
investment property 4 883 - (1 080)
Net income before taxation 68 230 26 542 169 990
Taxation - - (2 500)
Deferred capital gains - - (1 312)
taxation
Current capital gains - - (1 188)
taxation
Net income 68 230 26 542 167 490
Reconciliation of net income
to amount available for
distribution
Net income 68 230 26 542 167 490
Transfer to non- - - (85 303)
distributable reserve
Transfer (to)/from trust (4 883) - 1 080
capital
Transfer from maintenance - 773 3 988
reserve
Amount available for 63 347 27 315 87 255
distribution
Units in issue 383 449 186 184 616 383 449
320 186
Weighted average number of
units
in issue 383 449 186 184 616 267 463
320 348
Headline earnings (cents per 16,52 14,38 31,13
unit)
Earnings (cents per unit) 17,79 14,38 62,62
Income distribution (cents 16,52 14,80 30,43
per unit)
Net asset value (cents per 250 235 249
unit)
Consolidated balance sheets
Assets
Non-current assets
Investment property 1 133 710 428 165 1 211 760
Current assets 26 918 43 116 30 360
Accounts receivable 12 430 7 799 17 605
Cash on deposit 14 488 35 317 12 755
Total assets 1 160 628 471 281 1 242 120
Unitholders` interest and
liabilities
Unitholders` interest 960 259 433 047 955 376
Non-current liabilities 107 598 5 285 185 173
- Interest bearing 101 001 - 178 576
borrowings
- Deferred taxation 6 597 5 285 6 597
Current liabilities 92 771 32 949 86 839
Bank overdraft - - 14 732
Total unitholders` interest 1 160 628 471 281 1 242 120
and liabilities
Consolidated statements of changes in unitholders` interest
Capital of Trust 830 648 385 524 825 765
Balance at beginning of the period 825 765 385 524 385 524
Issue of units - - 441 321
Net profit/(loss) on disposal of 4 883 - (1 080)
property
Non-distributable reserve 129 611 44 308 129 611
Balance at beginning of the period 129 611 44 308 44 308
Transfer from distributable reserve - - 85 303
Maintenance reserve - 3 215 -
Balance at beginning of the period - 3 988 3 988
Transfer to distributable reserve - (773) (3 988)
Undistributed income - - -
Balance at beginning of the period - - -
Net income for the period 68 230 26 542 167 490
Net transfers (to)/from trust
capital and
non-distributable reserves (4 883) 773 (80 235)
Income distributions (63 347) (27 315) (87 255)
Total unitholders` interest 960 259 433 047 955 376
Abridged consolidated cash flow statements
Net cash inflow from operating 11 107 1 117 40 798
activities
Net cash inflow/(outflow) from
investing activities 82 933 (2 740) (331 296)
Net cash (outflow)/inflow from
financing activities (77 575) - 251 581
Net increase/(decrease) in cash
and
cash equivalents 16 465 (1 623) (38 917)
Cash and cash equivalents at the
beginning
of the period (1 977) 36 940 36 940
Cash and cash equivalents at the
end
of the period 14 488 35 317 (1 977)
Capital commitments
- Authorised and 104 600
contracted
- Authorised and not 18 000
yet contracted
Income distributions
Amount available for 16,52 14,80 30,43
distribution (cents per unit)
Distribution (cents per unit) 16,52 14,80 30,43
Interim 16,52 14,80 14,80
Final - - 15,63
The interim distribution, being number 44 for Capital Property Fund, has been
declared in respect of the income distribution period 1 January 2005 to 30 June
2005.
Registered Office
1st Floor, Capital Place,
2 Lone Close,
Lonehill, 2062
PO Box 89, Lonehill, 2062
Transfer Secretaries
Computershare Investor Services 2004 (Pty) Ltd.
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
