| Fri 18 Nov 2005, 7:30 | | Ambit - Reviewed Financial Results And Distribut |
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Ambit - Reviewed Financial Results And Distribution For The Year Ended 30
September 2005
Ambit Properties Limited
Registration number: 2001/007003/06
Share code: ABT & ISIN code: ZAE000051645
* distribution growth of 9,5%
* vacancy of 2,2%
* total return of 60%
Reviewed financial results and distribution for the year ended 30 September 2005
Group income statement
1 Oct 2004 to 4 Feb 2004 to
30 Sept 2005 30 Sept 2004
(restated)
Notes R"000 R"000
Revenue 99 448 66 296
Rental - cash flows inherent in
leases 93 530 60 502
- straight line adjustment 3.1.2 5 918 5 794
Property expenses (24 229) (15 200)
Net rental income from properties 75 219 51 096
Interest income from associate 8 215 4 033
Interest earned 2 496 416
Finance costs (25 992) (19 452)
Administrative and other expenses (6 192) (5 467)
Profit before fair value
adjustments 53 746 30 626
Change in fair value of investment
properties 87 495 29 850
- As per valuations 93 413 35 644
- Straight line adjustment 3.1.2 (5 918) (5 794)
Profit on disposal of investment
properties 711 -
Profit before debenture interest
and
taxation 141 952 60 476
Debenture interest to unitholders (47 799) (26 520)
Share of associate company"s after
tax profits 12 972 1 492
Profit before taxation 107 125 35 448
Taxation (26 509) (10 239)
Net profit attributable to linked
unitholders 80 616 25 209
Headline earnings per linked unit
(cents) (weighted) 3.2 30,83 18,48
Earnings per linked unit (cents)
(weighted) 3.2 77,19 32,86
Headline earnings per share
(cents)
(weighted) 3.2 2,09 1,63
Earnings per share (cents)
(weighted) 3.2 48,46 16,01
Distributable earnings per linked
unit (cents) 27,52 16,75
Distribution per linked unit
(cents) 27,50 16,75
Group balance sheet
30 Sept 2005 30 Sept 2004
(restated)
Notes R"000 R"000
ASSETS
Non-current assets
Investment properties 659 288 549 706
- At valuation 671 000 555 500
- Straight line adjustment 3.1.2 (11 712) (5 794)
Investment in associate 82 944 65 836
Rental receivable straight line
adjustment 11 437 5 619
753 669 621 161
Current assets
Trade and other receivables 9 679 5 560
- Trade and other receivables 9 404 5 385
- Rental receivable straight line
adjustment 3.1.2 275 175
Cash and cash equivalents 28 929 29 286
38 608 34 846
TOTAL ASSETS 792 277 656 007
EQUITY AND LIABILITIES
Capital and reserves
Share capital and reserves 1 140 548 53 076
Non-current liabilities
Debentures 312 866 284 989
Deferred taxation 36 433 10 239
Interest bearing borrowings 4.5 267 199 275 654
616 498 570 882
Current liabilities
Trade and other payables 9 890 5 529
Taxation payable 308 -
Linked unitholders for distribution 25 033 26 520
35 231 32 049
TOTAL EQUITY AND LIABILITIES 792 277 656 007
Group cash flow statement
1 Oct 2004 to 4 Feb 2004 to
30 Sept 2005 30 Sept 2004
R"000 R"000
OPERATING ACTIVITIES
Cash generated by operating activities 63 450 39 979
Interest received 10 711 4 449
Finance costs (25 992) (19 452)
Distribution of debenture interest to
linked unitholders (49 286) -
Cash (outflow)/inflow from operating
activities (1 117) 24 976
INVESTING ACTIVITIES
Acquisition of investment properties (44 800) (519 754)
Improvements to investment properties (8 592) (102)
Proceeds on disposal of investment
properties 32 010 -
Acquisition of holding in associate company (4 135) (64 344)
Cash outflow from investing activities (25 517) (584 200)
FINANCING ACTIVITIES
Linked units issued 34 732 312 856
Interest bearing borrowings (repaid)/raised (8 455) 275 654
Cash inflow from financing activities 26 277 588 510
(Decrease)/increase in cash and cash
equivalents (357) 29 286
Cash and cash equivalents at beginning of
year 29 286 -
CASH AND CASH EQUIVALENTS AT END OF
YEAR/PERIOD 28 929 29 286
Group statement of changes in equity
Distribu-
Share Share table
capital premium reserves
R"000 R"000 R"000
On listing on 4 February 2004 1 493 28 361 -
Shares issued during the year 90 1 719 --
Share issue expenses - (3 796) -
Net profit attributable to linked
unitholders (restated) - - 25 209
Transfer to non distributable
reserves (restated) - - (24 952)
Balance at 30 September 2004 (restated) 1 583 26 284 257
Shares issued during the year 155 6 969 -
Share issue expenses - (268) -
Net profit attributable to linked unitholders - - 80 616
Transfer to non distributable reserves - - (80 543)
Balance at 30 September 2005 1 738 32 985 330
Non-
distribu-
table
reserves Total
R"000 R"000
On listing on 4 February 2004 - 29 854
Shares issued during the year - 1 809
Share issue expenses - (3 796)
Net profit attributable to linked
unitholders (restated) - 25 209
Transfer to non distributable
reserves (restated) 24 952 -
Balance at 30 September 2004 (restated) 24 952 53 076
Shares issued during the year - 7 124
Share issue expenses - (268)
Net profit attributable to linked unitholders - 80 616
Transfer to non distributable reserves 80 543 -
Balance at 30 September 2005 105 495 140 548
1. OTHER INFORMATION 30 Sept 2005 30 Sept 2004
Linked units in issue 173 814 215 158 327 490
Weighted average linked units 166 351 253 157 419 569
Net asset value (cents per linked unit)
(prior to distribution) 275 230
Listed market price (cents per linked unit) 323 218
Premium/(discount) to net asset value 17,5% (5,2%)
To fund acquisitions, 15 486 725 units were issued on 24 March 2005 at a price
of 226 cents. 13,10 cents per unit was received in respect of the interim
distribution yet to be paid.
2. REVIEW BY THE INDEPENDENT AUDITORS
These preliminary financial results have been reviewed by Deloitte & Touche,
Ambit"s auditors. Their unqualified review report is available at Ambit"s
registered office.
3. NOTES TO THE FINANCIAL STATEMENTS
3.1 Accounting policies
These financial results are prepared using accounting policies which are in
accordance with South African Statements of Generally Accepted Accounting
Practice (GAAP). The accounting policies are consistent with those applied in
the previous year, except as stated below.
3.1.1 IFRS 3 (Business Combinations) is applicable for the first time in the
current year, and has been adopted by the group. However, this has had no
effect on the results.
3.1.2 Rental income is recognised on the straight line basis in accordance with
the requirements of AC 105 (Leases), where it was previously recognised
in accordance with the cash flows inherent in the leases. The resulting
increase in income before fair value adjustments has been transferred to
a non-distributable reserve, in order that it may be utilised for
distributions in future years to correlate with the actual cash flows
from the leases. The directors believe that the straight line basis is
inappropriate and this method of accounting does not add value to the users of
the financial statements. The impact of this change in policy has been disclosed
separately on the face of the income statement and balance sheet in order that
users may calculate the real growth trends by adjusting it out.
3.2 Earnings and headline earnings
Earnings and headline earnings for the year are based on the weighted average
number of linked units in issue for the year and are calculated as follows:
2005 2004
(restated)
R"000 R"000
Earnings (shares) 80 616 25 209
Debenture interest 47 799 26 520
Earnings (linked units) 128 415 51 729
Amortisation of goodwill - 45
Capital surpluses earned during
the period (net of deferred taxation) (77 133) (22 685)
Headline earnings (linked units) 51 282 29 089
Debenture interest (47 799) (26 520)
Headline Earnings 3 483 2 569
3.3 Contingent liabilities
Guarantees
Guarantees amounting to R0,9 million have been issued in lieu of municipal
service deposits.
3.4 Primary business segments for the year ended 30 September 2005
Income statement (R"000) Retail Office Industrial
Rental
- from leases 49 091 30 267 13 880
- straight line adjustment 4 096 833 989
Property expenses (13 300) (8 674) (2 255)
Investment income 128 24 16
Finance costs - - -
Other expenses (197) (186) (5)
Fair value adjustment
- per valuations 65 700 11 709 16 004
- straight line adjustment (4 096) (833) (989)
Profit on disposal of
investment properties - 703 8
Debenture interest - - -
Share of associate company"s
after tax profits - - -
Taxation (18 232) (3 335) (4 593)
Net profit 83 190 30 508 23 055
Income statement (R"000) Corporate Group
Rental
- from leases 292 93 530
- straight line adjustment - 5 918
Property expenses - (24 229)
Investment income 10 543 10 711
Finance costs (25 992) (25 992)
Other expenses (5 804) (6 192)
Fair value adjustment
- per valuations - 93 413
- straight line adjustment - (5 918)
Profit on disposal of
investment properties - 711
Debenture interest (47 799) (47 799)
Share of associate company"s
after tax profits 12 972 12 972
Taxation (349) (26 509)
Net profit (56 137) 80 616
Balance sheet (R"000) Retail Office Industrial
Investment properties
- per valuation 381 900 164 800 124 300
- straight line
adjustment (7 714) (2 087) (1 911)
Investment in associate - - -
Current and other assets 10 921 3 276 2 333
Total assets 385 107 165 989 124 722
Deferred tax 23 987 5 869 6 231
Current liabilities 6 985 2 458 1 044
Capital, debentures
and borrowings - - -
Total liabilities 30 972 8 327 7 275
Balance sheet (R"000) Corporate Group
Investment properties
- per valuation - 671 000
- straight line
adjustment - (11 712)
Investment in associate 82 944 82 944
Current and other assets 33 515 50 045
Total assets 116 459 792 277
Deferred tax 346 36 433
Current liabilities 24 744 35 231
Capital, debentures
and borrowings 720 613 720 613
Total liabilities 745 703 792 277
4. COMMENTS
4.1 Results
Ambit has performed well for the year under review providing investors with
good income growth and excellent capital appreciation.
Ambit"s earnings attributable to linked unitholders for the financial year
ending 30 September 2005 amounts to R128,4 million or 77,19 cents per weighted
number of units (cpu) (2004: R51,7 million or 32,86 cpu).The distribution for
the year is R47,8 million or 27,5 cpu which shows growth of 9,5% over the
annualised distribution for Ambit"s initial eight month period to 30 September
2004 (16,75 cpu annualised to 25,13 cpu). The second half distribution of 14,4
cpu shows growth of 9,9% over the first half year distribution of 13,1 cpu.
Ambit"s unit price increased from 218 cpu at 2004 year end to 323 cpu at 30
September 2005 representing a 48% increase and the distributions of 27,5 cpu
for the year provide a yield of 12,6% on the 2004 year end price. The total
return for the year is therefore 60%.
Deferred taxation has been provided at the company tax rate of 29% on the
revaluation surplus of R93,4 million. To the extent that properties are
disposed of, the amount provided at this rate will be reversed and tax will be
paid on the capital gain at the rate of 14,5%. This had a total cumulative
effect of reducing net asset value by 8 cents per linked unit.
4.2 Property portfolio
During the year two industrial properties in Epping and Rosslyn with a combined
value of R44,8 million, were acquired and seven properties with a net
realisation value of R32 million were disposed of as they no longer fit Ambit"s
investment criteria. The net proceeds exceeded the original cost by R5,3
million and the last valuation by R0,7 million. A further property in
Roodepoort with a value of R22,5 million leased to Absa has been acquired and
transfer is expected shortly. Five small properties acquired in the initial
listing portfolio and identified as not meeting Ambit"s geographical and
investment criteria have also been sold and are awaiting transfer. These have a
collective realisable value of R25,3 million, and will realise a surplus of R1
million over the original capitalised cost.
The remainder of the property portfolio has been valued by independent valuers,
CB Richard Ellis. The value of the portfolio before adjustment for the straight
lining of rental income as at 30 September 2005 is R671 million.
The exceptionally high occupancy rate has been well maintained during the year,
and at year end is an impressive 97,8% by rental value (97,4% by rentable
area).
4.3 Oryx investment
Oryx comprises a portfolio of well-tenanted investment properties, principally
located in Windhoek, Namibia.
Ambit"s 28,9% investment in Oryx Properties Limited increased in value by R13
million to R78,8 million. In September 2005, Ambit increased its stake in
Oryx to 30,5% by the acquisition of a further 665 600 units at a cost of R4,1
million, bringing the value of Ambit"s holding in Oryx to R82,9 million. Unlike
SA listed property Oryx is trading at a discount to its underlying net asset
value and therefore continues to offer sound investment value.
4.4 Net asset value
The revaluations of investment properties have given rise to a fair market
adjustment of R93,4 million. The net asset value, before making provision
for the debenture interest payable but after providing for deferred taxation at
29% on the fair market adjustment is 275 cpu (2004: 230 cpu). The market price
of units traded on the JSE Securities Exchange at 30 September 2005 was 323
cents which represents a premium to net asset value of 17,5%.
4.5 Borrowings
At 30 September 2005 Ambit"s debt was R267,2 million (2004: R275,7 million),
which represents a long-term debt to long-term assets ratio of 36% (30
September 2004: 44,4%). R145 million of this debt (54%) (2004:60%) is subject
to fixed interest agreements for periods from 2005 to 2009. The average
interest rate as at 30 September 2005 was 10,2% (2004: 10,7%).
4.6 Liquidity
Ambit units have proven their liquidity with over 50% of the units in issue
being traded during the financial year.
4.7 Prospects
The underlying fundamentals of the property market continue to improve
reflecting declining vacancies in the industrial and office sectors. As a
result, industrial rentals have increased and in selected areas, office rentals
are rising. These are likely to favourably influence this year"s office lease
renewals.
Ambit continues to seek investment opportunities to enhance yield and growth.
5. DECLARATION OF DISTRIBUTION
Notice is hereby given of distribution Number Three amounting to 14,40 cents
per unit, for the six month period to 30 September 2005. This distribution
comprises interest on debentures of 14,40 cents per unit.
Last date to trade cum distribution Friday, 2 December 2005
Units will trade ex distribution Monday, 5 December 2005
Record date to participate in the distribution Friday, 9 December 2005
Payment of distribution Monday, 12 December 2005
Linked unit certificates may not be dematerialised or re-materialised between
Monday, 5 December 2005 and Friday, 9 December 2005, both days inclusive.
On behalf of the board
DL Brown NBS Harris
Chairman Chief Executive Officer
18 November 2005
Directors
DL Brown (Chairman), NBS Harris (CEO)*, JH Beare, CJ Ewin, RR Emslie,
IN Mkhari, F Uys, RD Jeffrey
(alternate) *executive
news@ambitprops.co.za
Registered Office
Ambit Properties Limited, 1st Floor, Palazzo Towers West
Monte Casino Boulevard, Fourways, 2055
PO Box 783676, Sandton, 2196
Auditors
Deloitte
Deloitte & Touche Chartered Accountants (SA)
Registered Accountants and Auditors
Sponsor
Exchange Sponsors
Transfer secretaries
Computershare
Date: 18/11/2005 07:30:14 AM Produced by the JSE SENS Department
