| Thu 3 Nov 2005, 12:00 | | Results For The Year Ended 30 September 2005 |
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Allan Gray Property Trust - Audited Results For The Year Ended 30 September 2005
Allan Gray Property Trust
(Reg No 1983/003324/06)
Short name: GRAYPROP
Code: GRY & ISIN: ZAE000013165
AUDITED RESULTS for the year ended 30 September 2005
The directors of Allan Gray Property Trust Management Limited, the manager of
Allan Gray Property Trust ("Grayprop"), submit their report on the audited
results of Grayprop for the year ended 30 September 2005. These abridged
financial statements have been extracted from the audited financial statements
on which KPMG Inc. have issued an unqualified audit opinion and which are
available for inspection at the registered office.
INCOME STATEMENT
2005 2004
Restated
R"000 R"000
Income 542 213 485 183
Contractual rental income 507 453 453 570
Straight-line lease accrual 34 760 31 613
Expenses (158 073) (140 338)
Administrative expenses (24 880) (17 974)
Property operating expenses (133 193) (122 364)
Operating profit 384 140 344 845
Net finance costs (723) 7 494
Interest received 20 035 30 407
Interest paid (20 758) (22 913)
Profit on disposal of investment
properties 16 247 6 134
Fair value adjustments to investment
properties 1 144 116 393 722
Taxation - 885
Net profit for the year 1 543 780 753 080
Net profit per unit (cents) 155.0 75.6
Headline earnings per unit (cents) 38.5 35.4
Distribution per unit (cents) 35.0 32.2
Interim distribution per unit (cents) 17.4 15.6
Final distribution per unit (cents) 17.6 16.6
Units in issue 996 043 081 996 043 081
Headline earnings and distribution
income reconciliation
Net profit for the year 1 543 780 753 080
Less: profit on disposal of investment
properties (16 247) (6 134)
Less: fair value adjustments to investment
properties (1 144 116) (393 722)
Less: taxation - (885)
Headline earnings 383 417 352 339
Less: straight-line lease accrual (34 760) (31 613)
Less: retained earnings (42) -
Distribution income 348 615 320 726
STATEMENT OF CHANGES IN UNITHOLDERS" FUNDS
2005 2004
Restated
R"000 R"000
Capital of the fund
Balance at 1 October 1 933 354 1 757 354
Units issued during the year - 176 000
Balance at 30 September 1 933 354 1 933 354
Capital reserve
Balance at 1 October 400 265 393 019
Realised profit on disposal of
investment properties 21 489 7 246
Balance at 30 September 421 754 400 265
Revaluation reserve
Restated balance at 1 October 449 273 55 778
- as previously reported 633 163 208 055
- straight-line lease accrual (183 890) (152 277)
Revaluation reserve realised on sale of
investment properties (5 242) (227)
Fair value adjustments of investment
properties 1 144 116 393 722
Balance at 30 September 1 588 147 449 273
Retained earnings
Restated balance at 1 October 183 908 152 295
- as previously reported 18 18
- straight-line lease accrual 183 890 152 277
Net profit for the year 1 543 780 753 080
Profit on disposal of investment properties (16 247) (7 019)
Transfer to revaluation reserve (1 144 116) (393 722)
Income distributions (348 615) (320 726)
Balance at 30 September 218 710 183 908
Total unitholders" funds 4 161 965 2 966 800
BALANCE SHEET
2005 2004
Restated
R"000 R"000
ASSETS
Property assets 4 371 731 3 133 499
Investment properties 4 153 081 2 949 609
Straight-line lease accrual 218 650 183 890
Current assets 264 482 266 040
Trade and other receivables 26 972 32 172
Cash and cash equivalents 237 510 233 868
Total assets 4 636 213 3 399 539
UNITHOLDERS" FUNDS AND LIABILITIES
Unitholders" funds 4 161 965 2 966 800
Capital of the fund 1 933 354 1 933 354
Capital reserve 421 754 400 265
Revaluation reserve 1 588 147 449 273
Retained earnings 218 710 183 908
Non-current liabilities
Interest-bearing liability 229 000 214 557
Current liabilities 245 248 218 182
Trade and other payables 69 944 52 839
Unitholders for distribution 175 304 165 343
Total unitholders" funds and liabilities 4 636 213 3 399 539
CASH FLOW STATEMENT
2005 2004
Restated
R"000 R"000
Cash effects from operating activities
Profit for the year 1 543 780 753 080
Adjustments for:
Straight-line lease accrual (34 760) (31 613)
Interest received (20 035) (30 407)
Interest paid 20 758 22 913
Profit on disposal of investment properties (16 247) (6 134)
Fair value adjustments to investment
properties (1 144 116) (393 722)
Taxation - (885)
Operating profit before changes in
working capital 349 380 313 232
Decrease in trade and other receivables 5 200 9 904
Increase in trade and other payables 17 105 8 584
Cash generated from the operations 371 685 331 720
Interest received 20 035 30 407
Interest paid (20 758) (22 913)
Taxation paid - (3 789)
Income distributions (338 654) (303 390)
Cash flows from operating activities 32 308 32 035
Cash effects from investing activities
Additions to investment properties (104 140) (192 844)
Proceeds from disposal of investment
properties 61 031 26 666
Decrease in capital debtors - 89 019
(43 109) (77 159)
Cash effects from financing activities
Increase in long-term loan 14 443 -
14 443 -
Net increase/(decrease) in cash and cash
equivalents 3 642 (45 124)
Cash and cash equivalents at 1 October 233 868 278 992
Cash and cash equivalents at
30 September 237 510 233 868
COMMENTARY
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The annual results are prepared in accordance with South African Statements of
Generally Accepted Accounting Practice and are consistent with those used in
the prior year, except as stated below:
Rental income and lease incentives directly attributable to leases have been
recognised on the straight-line basis in accordance with the requirements of
AC105 (Leases), where they were previously recognised in terms of the
contractual rental income inherent in the leases. To avoid an overstatement of
assets, the fair value adjustment of investment properties in the income
statement has been reduced by the straight-line lease adjustment. Investment
properties in the balance sheet have been reduced by the cumulative effect of
the straight-line lease adjustment. There is no taxation impact as a result of
the change. Income distributions will continue to be based on the contractual
income from the leases in accordance with the Trust Deed.
2. DISTRIBUTION PER UNIT
Allan Gray Property Trust"s net distributable income for the financial year
amounted to 35.0 cents per unit, 8.7 percent greater than last year.
3. CHANGES TO PORTFOLIO
During the year, the following sales were concluded:
2004
Property Net price valuation Profit
(Rm) (Rm) %
25 Owl Street 36.5 28.1 30
4 Stan Road 6.5 5.1 27
51 Juta Street 5.3 3.6 47
Rudo House 4.5 2.1 114
Saphire Place 2.9 1.6 81
Eaststar Place 2.2 1.8 22
Shukran House 1.4 1.0 40
Delta Place 1.0 0.9 11
Hazra Industrial Park 0.8 0.6 33
61.1 44.8 36
4. MAJOR CAPITAL PROJECTS
Significant capital projects and planned projects are:
N1 City Mall (58% share)
Work continues on a R110 million refurbishment and extension to the N1 City
Mall. The project includes the refurbishment of the existing mall, the
construction of an additional 8 500 m2, 250 additional parking bays and is
planned for completion in March 2006. The project is expected to generate an
initial return of 10.2 percent.
The Boulders Shopping Centre
Plans to reconfigure the largely vacant lower level and introduce fashion and
homeware are well advanced. The project is expected to cost R35 million, but
timing is dependent on Council approval.
The Brightwater Commons
The redevelopment to transform the centre into a family-friendly venue with
increased traditional retail shopping and significantly reduced reliance on
restaurants and bars continues. However, the progress has been slower than
anticipated with the final phase not yet attracting the targeted tenants. This
has necessitated a re-evaluation of that part of the project. The property is
budgeted to earn R10 million for the new year and is independently valued at
R121 million.
Benmore Gardens Shopping Centre
Approval has finally been granted by the local authority for the submission of
a site development plan as a prelude to commencing work for extensive
alterations to the centre to improve the retail mix, parking and circulation as
well as a new store for Pick `n Pay. The delays have had the effect of adding
significantly to the costs and the optimum design is being reassessed.
Due to the nature of the project, it could take two years to complete which
will have a negative impact on the earnings generated by the centre during that
period.
Douglas Roberts Centre
As negotiations are under way for the tenant to purchase the building, the
refurbishment of the office tower and construction of the parking garage are
currently on hold.
5. CONTRIBUTION TO 2005 % of 2004 % of
DISTRIBUTION Rm Total Rm Total
Retail 263 75 219 68
Office blocks 48 14 54 17
Industrial 46 13 42 13
Specialised 19 5 18 6
Corporate (27) (7) (12) (4)
Total 349 100 321 100
6. VACANCY LEVELS
Vacancy levels in terms of rentable area at 30 September were as follows:
Sector 2005 2004
% %
Retail 5 5
Office blocks 9 11
Industrial 9 5
Specialised - -
Total 6 6
By area, vacancies were the same as at half-year. By value, the vacancies
equated to 5 percent of potential rental income, an improvement on the
6 percent as at half-year.
In the retail sector 79 percent of the vacancies were contained in the
following two properties:
- The Brightwater Commons - see above.
- The Boulders Shopping Centre, where the vacancies are concentrated in the
lower level and plans are advanced to reconfigure this space.
In the office sector, significant vacancies by area and value remain at
Grayston Ridge and Summit Park. At Grayston Ridge no improvement is envisaged
in the short term.
In the industrial sector, 21 percent of the vacancy is at Degussa in Midrand,
vacated in July, and a further 8 percent due to a recent vacation in Strijdom
Park, which has since been relet.
7. PORTFOLIO VALUATIONS
The composition of Allan Gray Property Trust"s portfolio, as valued by the
independent valuer, Rode and Associates CC, as at 30 September 2005, is as
follows:
Value Cents/ Forward % of
Sector (Rm) unit EY (%) portfolio
2005 2004
Retail 3 310 332 8.9 76 72
Office blocks 450 45 12.3 10 13
Industrial 414 42 11.4 9 10
Specialised 198 20 10.2 5 5
Total property 4 372 439 9.5 100 100
Long-term borrowings (229) (23)
Net current assets 19 2
4 162 418
The net asset value is 40.3 percent higher than that of last year. The market
rating of the property portfolio in terms of the anticipated forward earnings
yield has improved from 12.2 percent to 9.5 percent over the past year.
8. PROSPECTS
The Board anticipates that distributions per unit for the year ending
30 September 2006 will increase between 10 percent and 12 percent compared
with the year ended 30 September 2005. This forecast has not been reviewed or
reported on by Allan Gray Property Trust"s auditors.
9. DISTRIBUTION ANNOUNCEMENT
Notice is hereby given of distribution no. 45 of 17.6 cents per unit for the
six months ended 30 September 2005.
The last date to trade cum the distribution will be Friday, 18 November 2005.
The units of Grayprop will commence trading ex-distribution on Monday,
21 November 2005 and the record date will be Friday, 25 November 2005. The
distribution will be paid on Monday, 28 November 2005.
Unit certificates may not be dematerialised or rematerialised between Monday,
21 November 2005 and Friday, 25 November 2005, both dates inclusive.
BY ORDER OF THE BOARD
Allan Gray Property Trust Management Limited
(Reg No 1983/003324/06)
2 November 2005
Transfer secretaries Secretary and registered office
Computershare Investor Broll Property Group (Pty) Ltd
Services 2004 (Pty) Ltd Broll House
70 Marshall Street 27 Fricker Road, Illovo
Johannesburg, 2001 Johannesburg, 2196
(PO Box 61051 (PO Box 1455
Marshalltown, 2107) Saxonwold, 2132)
Short name: GRAYPROP Code: GRY ISIN: ZAE000013165
Directors: WJC Mitchell (Chairman), JD Rainier (Managing), WT Fairhead,
GW Fury (alternate), WM Kirchmann, SP McCoy, DM Nurek, E Osrin,
S Shaw-Taylor
Sponsor: Standard Bank
E-mail: info@allangray.co.za
Website: www.allangray.co.za
Date: 03/11/2005 12:00:27 PM Produced by the JSE SENS Department
