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Resilient - Reviewed interim results and distribution announcement
Resilient Property Income Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/016851/06)
Share code RES ISIN ZAE000043642
30 June 2005: Reviewed Interim Results and Distribution Announcement
CONSOLIDATED INCOME STATEMENT
Reviewed Audited Reviewed
6 months to 12 months to 6 months to
30 Jun 2005 31 Dec 2004 30 Jun 2004
R000 R000 R000
Gross rental income 89 445 178 616 97 944
Amortised lease escalations 4 437 3 960 5 082
Property operating expenses (29 371) (61 424) (33 521)
Net rental and related income 64 511 121 152 69 505
Distribution income from
listed associated company 17 904 19 088 2 827
Distribution income from other
equity investments 9 625 4 343 595
Total distribution income 27 529 23 431 3 422
Profit / (loss) on disposal of
investment properties - 29 932 (853)
Profit / (loss) on disposal of
listed property securities 11 928 (2 634) (2 228)
Profit / (loss) on disposal of
investments 11 928 27 298 (3 081)
Valuation gains on investment
property - 177 720 -
Value adjustment resulting from
amortised lease escalations (4 437) (3 960) (5 082)
Valuation gains on listed
property securities 38 584 29 021 -
Valuation gains on investments 34 147 202 781 (5 082)
Administrative expenses (4 616) (7 806) (4 164)
Other expenses (219) (7 876) (3 938)
Net operating income before
net financing costs 133 280 358 980 56 662
Financing income from the
purchase trust 3 455 3 569 25
Interest on units issued cum
distribution 333 8 800 5 310
Interest on borrowings (26 876) (44 233) (22 286)
Interest to linked debenture
holders (59 735) (100 958) (46 732)
Net financing costs (82 823) (132 822) (63 683)
Capital profit from listed
associated company 1 285 27 047 -
Profit / (loss) before tax 51 742 253 205 (7 021)
Income tax expense (11 337) (71 690) 241
Profit / (loss) for the period 40 405 181 515 (6 780)
RECONCILIATION OF HEADLINE EARNINGS PER LINKED UNIT
Reviewed Audited Reviewed
6 months to 12 months to 6 months to
30 Jun 2005 31 Dec 2004 30 Jun 2004
cents cents cents
Earnings per share 32,61 171,27 (7,02)
Interest to linked debenture
holders 48,21 95,26 48,38
Earnings per linked unit 80,82 266,53 41,36
Adjusted for: (32,61) (171,27) 7,02
- Net capital profit on
investments (41,81) (246,34) 3,19
- Impairment of goodwill - 7,43 4,08
- Amortised share premium
discount 0,05 - -
- Taxation effect 9,15 67,64 (0,25)
Headline earnings per linked
unit 48,21 95,26 48,38
A distribution of 47,94 cents per linked unit (based on 124 603 384 units in
issue) will be paid to unitholders on 5 September 2005.
Earnings per share, earnings per linked unit and headline earnings per linked
unit are based on the weighted average of 123 902 832 (31 December 2004: 105 981
699; 30 June 2004: 96 602 185) linked units in issue.
CONSOLIDATED BALANCE SHEET
Reviewed Audited Reviewed
6 months to 12 months to 6 months to
30 Jun 2005 31 Dec 2004 30 Jun 2004
R000 R000 R000
Assets
Investment property 1 017 609 956 884 865 627
Investment property under
development 10 807 8 000 -
Investment in listed
associated company 270 941 313 882 106 172
Investments in other listed
equities 261 724 153 328 -
Other investments 69 407 54 534 51 093
Goodwill - - 3 938
Total non-current assets 1 630 488 1 486 628 1 026 830
Trade and other receivables 7 040 6 892 1 500
Cash and cash equivalents 85 657 75 719 86 775
Total current assets 92 697 82 611 88 275
Total assets 1 723 185 1 569 239 1 115 105
Equity
Issued capital 1 246 1 230 1 093
Share premium 104 702 96 091 61 301
Reserves 256 041 217 943 29 610
Retained earnings 3 - 3
Total equity 361 992 315 264 92 007
Liabilities
Linked debenture liabilities 597 856 590 440 525 198
Interest bearing borrowings 586 264 505 584 394 899
Deferred tax liabilities 84 376 75 340 10 574
Total non-current liabilities 1 268 496 1 171 364 930 671
Trade and other payables 92 697 82 611 92 427
Total current liabilities 92 697 82 611 92 427
Total liabilities 1 361 193 1 253 975 1 023 098
Total equity and liabilities 1 723 185 1 569 239 1 115 105
ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS
Reviewed Audited Reviewed
6 months to 12 months to 6 months to
30 Jun 2005 31 Dec 2004 30 Jun 2004
R000 R000 R000
Cash flows from operating
activities 6 900 25 959 46 090
Cash flows from investment
activities (92 319) (309 692) (57 312)
Cash flows from financing
activities 95 357 311 592 50 137
Net increase in cash and cash
equivalents for the period 9 938 27 859 38 915
Cash and cash equivalents at
the beginning of the period 75 719 47 860 47 860
Cash and cash equivalents at
the end of the period 85 657 75 719 86 775
STATEMENT OF CHANGES IN EQUITY
for the 6 months ended 30 June 2005
Issued Share Retained
capital premium Reserves earnings Total
R000 R000 R000 R000 R000
Balance at 1 Jan 05 1 230 96 091 217 943 - 315 264
Issue of units 16 8 845 8 861
Less: Units held by
The Resilient Unit
Purchase Trust (234) (234)
Profit on units held
by The Resilient Unit
Purchase Trust 10 10
Fair value adjustment
to cash flow hedges (2 314) (2 314)
Profit for the period 40 405 40 405
Transfer to reserves 40 402 (40 402) -
Balance at 30 Jun 05 1 246 104 702 256 041 3 361 992
STATEMENT OF CHANGES IN EQUITY
for the 6 months ended 30 June 2004
Issued Share Retained
capital premium Reserves earnings Total
R000 R000 R000 R000 R000
Balance at 1 Jan 04 894 26 585 36 389 4 63 872
Issue of units 199 34 716 34 915
Loss for the period (6 780) (6 780)
Transfer from reserves (6 779) 6 779 -
Balance at 30 Jun 04 1 093 61 301 29 610 3 92 007
Notes
1 Preparation and review opinion
This interim report has been prepared in accordance with International Financial
Reporting Standards (IFRS) and the requirements of the Companies Act (Act 61 of
1973). Prior period adjustments were made to the opening balance of reserves,
the income statement and the balance sheet, to account for the amortisation of
rental escalations applicable to lease income. The adjustments to both the
opening balance of reserves and the balance sheet were offset by changes in the
fair value of investment properties and therefore had no net impact on the prior
year reserves.
KPMG Inc. has reviewed the financial information set out in this interim report.
The unqualified review opinion is available for inspection at the company`s
registered office.
2 Summary of financial performance
30 Jun 2005 31 Dec 2004 30 Jun 2004
Net asset value per linked
unit 770 cents 736 cents 563 cents
Distribution per linked
unit 47,94 cents 44,08 cents 42,71 cents
Gearing ratio 37,6% 35,3% 40,6%
Units in issue 124 603 384 123 018 384 109 416 448
The net asset value per linked unit would increase from 770 cents per unit to
825 cents per unit if the investment in Capital Property Fund was revalued to
362 cents per unit (the volume weighted price for June 2005) for financial
reporting purposes. Investments in associated companies are carried at the sum
of cost and income accrued subsequent to acquisition, and not revalued to the
ruling market price.
3 Acquisitions
3.1 Acucap Properties Limited
Resilient has increased its holding in Acucap through the acquisition of an
additional 3 610 589 units in the market at an average price of R16,85.
Resilient currently holds 13 163 760 Acucap units, which constitutes 19,5% of
Acucap units in issue.
3.2 Murchison Mall
Resilient acquired this retail centre in Ladysmith, KwaZulu-Natal, with effect
from 1 March 2005. The property was purchased for R42,6 million payable in cash
and at a forward yield of 11,5%. The centre has a strong national tenant profile
which includes Shoprite, Edgars, Jet Stores and Ackermans.
4 Disposals
Capital Property Fund
A total of 17 187 008 units in Capital Property Fund were sold at an average
price of R3,17. In the medium term, Resilient intends reducing its investment to
just below 20% of Capital units in issue.
5 Developments
The construction of the 28 200 m2 GLA Diamond Pavilion in Kimberley is
progressing on schedule for completion in April 2006. Resilient owns 50% of the
mall with the developers having guaranteed a 14% initial yield. Resilient has
the option to acquire the remaining interest six months after completion, based
on a capitalisation rate of 12%. The centre will be anchored by Checkers, Edgars
and Woolworths and will include all major national clothing retailers.
Extensions exceeding 6 000 m2 each are planned for Tzaneng Mall in Tzaneen and
Mvudzuludso Centre in Thohoyandou. These extensions will be pre-let to major
national retail tenants prior to commencement of construction.
The Super Spar supermarket and five adjacent shops at Nelspruit Plaza were
destroyed by fire. The insurer, Mutual and Federal, has accepted full liability
for capital reinstatement and loss of rentals. There will as a result be no
financial impact on Resilient.
6 Borrowings
The interest rate profile of the group is shown below.
Amount Interest % of
Expiry R`million rate borrowings
February 2007 50,0 11,21% 8,5%
June 2007 75,0 9,39% 12,9%
March 2008 50,0 10,06% 8,5%
April 2008 50,0 9,49% 8,5%
September 2008 50,0 11,09% 8,5%
July 2009 150,0 11,61% 25,6%
December 2009 60,0 13,40% 10,2%
Fixed interest rates 485,0 11,01% 82,7%
Prime less 1,50% 101,3 9,00%* 17,3%
Gearing 586,3 10,67% 100,0%
* Based on the current prime rate of 10,50%.
The group had R85,4 million available on demand in access facilities as at 30
June 2005. This deposit of surplus funds had the effect of reducing loan
utilisation from R586,3 million to R500,9 million.
7 Lease expiry profile and sector composition
Graphs removed from SENS version.
8 The Resilient Unit Purchase Trust
Unitholders adopted `The Resilient Unit Purchase Trust` at a general meeting on
2 June 2004. During the period under review a total of 1 585 000 Resilient units
were issued to the trust at a 5% discount to the ruling price at the time of
issue.
9 Prospects
The retail sector remains buoyant and turnover rentals have again exceeded
expectations. In addition, Resilient is benefiting from its active refurbishment
and redevelopment programme of the past two years. Resilients` strategy is to
increase the retail focus of the portfolio.
Demand for industrial space in Gauteng currently exceeds supply, with resulting
upward pressure on rentals. Higher rental levels have in turn encouraged new
development, particularly of large warehousing and distribution facilities. It
is nonetheless anticipated that the industrial property market will remain firm
for at least the next two years.
During the period under review, R2.5 million of distributable income was
expended on further improving the company`s fixed interest rate profile.
Distributions for the period under review reflect growth of 8,76% as against the
previous 6 months and 12,25% as against the comparable first half of the
previous financial year. Growth for the full 2005 financial year is forecast to
exceed 12%, compared with the 2004 financial year. This forecast has not been
reviewed by KPMG Inc.
10 Payment of interim distribution
The board has approved and notice is hereby given of an interim distribution
(distribution No. 5) of 47,94 cents per linked unit for the 6 months to 30 June
2005.
The last date to trade linked units cum-distribution will be Friday, 26 August
2005 and trading will commence ex-distribution on Monday, 29 August 2005. The
record date to participate in the distribution will be Friday, 2 September 2005.
Linked unit certificates may not be dematerialised or rematerialised between
Monday, 29 August 2005 and Friday, 2 September 2005, both days inclusive.
Payment of the distribution will be made to linked unitholders on Monday, 5
September 2005. In respect of dematerialised linked unitholders, the
distribution will be transferred to the Central Securities Depository
Participant accounts/broker accounts on Monday, 5 September 2005. Certificated
linked unitholders` distribution payments will be posted on or about Monday, 5
September 2005.
By order of the Board
Des de Beer Jacques van Wyk
Managing Director Financial Director
Johannesburg
5 August 2005
Directors: AS Nkonyeni (Chairman), JJG da Costa, D de Beer*, MP Greyling, JJ
Kriek*, DJ Lewis*, PP Msweli, MJN Njeke, BL Stuhler#, PA Theodosiou, R Turner,
BD van Wyk, JJ van Wyk*, JN Zidel*
Alternate director: MH Muller
Company secretary: JJ van Wyk
# Non-independent non-executive
* Executive director
Registered office:
57 6th Road, Hyde Park 2196 (PO Box 411711, Craighall 2024)
Transfer secretaries:
Ultra Registrars (Pty) Ltd, 11 Diagonal Street, Johannesburg 2001
www.resilient.co.za
Date: 05/08/2005 01:36:28 PM
Produced by the JSE SENS Department
