|
Paramount Property Fund Limited - Audited Results To 31 October 2005 And
Distribution Announcement
PARAMOUNT PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1945/019928/06)
Share code: PRA ISIN: ZAE000028577
AUDITED RESULTS TO 31 OCTOBER 2005 AND DISTRIBUTION ANNOUNCEMENT
DIRECTORS: A D Dalling (Chairman)!, R C Squire - Howe (Managing), J A Bester!, R
R Emslie*, (Alt. G C Cannings), R D Jeffery*, F J Jenkings, B H Kerswill, A A
Maresky, A D P Ovenstone*, G P Phillips*, R S Schur!.
* Non-executive ! Independent non-executive
The consolidated audited results of the group for the year ended 31 October 2005
are as follows:
Audited Audited
October October
2005 2004
Notes R"000 R"000
Consolidated Income
Statement
Revenue 1 205,447 133,444
Trading Income 121,909 100,270
Revaluation of investment 122,863 29,770
properties
Amortisation of lease 5,796 3,913
escalations
Interest received 4,090 1,524
Surplus on disposal of 9,470
investment properties -
Depreciation (983) (838)
Amortisation of debenture (1,318) (603)
discount
Amortisation of negative 609 14
goodwill
Interest paid on borrowings (76,487) (70,456)
Income before taxation 185,949 63,594
Taxation (13,645) (1,634)
Income before distribution 172,304 61,960
Distribution to unitholders (62,864) (38,336)
Net profit for the year 109,440 23,624
Linked units in issue 116,270 92,076
("000)
Weighted average linked units 113,069 68,671
in issue ("000)
Earnings per linked unit 152 90
(cents)
Headline earnings per linked 45 46
unit (cents)
Core earnings per linked 63 57
unit (cents)
Fully diluted earnings per 137 70
linked unit (cents)
Fully diluted headline 41 35
earnings per linked unit
(cents)
Distribution per linked 54.5 51.0
unit (cents)
Earnings, Headline earnings and Core earnings per linked unit
The earnings, headline earnings and core earnings calculations are based on the
weighted number of linked units ranking for distribution of 113 069 208 (2004:
68 671 188). The earnings per linked unit figure is given in preference to
earnings per share, as the linked units are traded as a single entity on the JSE
Securities exchange and all distributions made by the company are in the form of
interest paid on the debenture portion of the linked unit. Earnings per share is
therefore not relevant in assessing the company"s performance. Earnings per
linked unit of R172 304 000 (2004: R61 960 000) is calculated on the net income
before debenture interest but after taxation.
Headline earnings per linked unit is calculated on the net income before
debenture interest but after taxation and headline reconciling items.
Core earnings per linked unit is calculated by adding to headline earnings,
realised surpluses on disposal of investment properties (net of capital gains
tax), distribution prepayments received, amortization of debenture discount and
profit on realisation of investments previously recognised as equity (net of
taxation). This calculation is provided for the benefit of stakeholders as the
directors are of the opinion that it provides a more accurate reflection of the
group"s cash profits for the year. The fully diluted earnings and headline
earnings per linked unit is calculated on 125 493 675 (2004: 88 536 456) linked
units, being all the linked units in issue as well as all the B debentures to be
converted between November 2005 and October 2008, and the net income of R172 304
000 (2004: R61 960 000) before debenture interest but after taxation.
The weighted average number of units in issue for 2004 has been recalculated in
terms of AC104. The earnings per linked unit, headline earnings per linked unit,
core earnings per linked unit, as well as the fully diluted earnings figures,
have been restated in line with this change.
Earnings reconciliation
Income before distribution 172,304 61,960
Revaluation surplus (122,863) (29,770)
Taxation of revaluation 14,601 2,965
surplus
Amortised lease escalations (5,796) (3,913)
Taxation of amortised lease 1,681 1,174
escalations
Accounting (surplus) / deficit on (9,470) 35
disposal of investment properties
Taxation on disposal of 1,373 (5)
investment properties
Realised revaluation of investments - (1,477)
previously recognised in equity
Taxation on realised - 443
revaluation
Amortisation of negative (609) (14)
goodwill
Headline earnings 51,221 31,398
Headline earnings per linked 45 46
unit (cents)
Headline earnings 51,221 31,398
Realised surplus on disposal of 19,223 3,157
investment properties
Taxation on disposal of (2,787) (473)
investment properties
Amortization of debenture 1,318 603
discount
Realised revaluation of investments - 1,477
previously recognised in equity
Taxation on realised - (443)
revaluation
Distribution prepayment 2,102 3,569
received
Core earnings 71,077 39,288
Core earnings per linked 63 57
unit (cents)
One ordinary share and one A debenture are defined
as one linked unit.
Audited Audited
October October
2005 2004
R"000 R"000
Abridged Consolidated
Balance Sheet
Fixed assets 1,247,554 1,076,465
Amortised lease escalations 25,127 19,331
Property for development - 3,583
Goodwill 451 451
Negative goodwill - (609)
Cash at bank 75,566 5,563
Other current assets 43,290 28,468
Total assets 1,391,988 1,133,252
Total ordinary shareholders 154,226 39,799
funds
A debenture holders 449,208 350,249
B debenture holders 60,339 96,924
Interest bearing borrowings 667,385 614,652
Deferred taxation 17,226 3,599
Unitholders for 18,022 12,430
distribution
Current liabilities 25,582 15,599
Total equity and 1,391,988 1,133,252
liabilities
Net asset value per linked 519 423
unit (cents)
Fully diluted net asset value per 516 435
linked unit (cents)
Abridged Consolidated Cash Flow
Statement
Income before taxation 185,949 63,594
Adjustments for:
Interest received (4,090) (1,524)
Interest paid on 76,487 70,456
borrowings
Depreciation 983 838
Provisions (reversed) / (650) 850
raised
(Surplus) /deficit on disposal of (9,470) 35
investment property
Amortisation of negative (609) (14)
goodwill
Amortisation of debenture 1,318 603
discount
Revaluation of investment (122,863) (29,770)
properties
Amortised lease (5,796) (3,913)
escalations
Operating profit before working capital 121,259 101,155
changes
Working capital changes (4,201) 18,358
Cash generated from 117,058 119,513
operations
Interest received 4,090 1,524
Interest paid on borrowings (76,487) (70,456)
Taxation paid (5) (1,244)
Net cash inflow / (outflow) from 44,656 49,337
operating activities
Net cash outflow from investing (36,157) (247,113)
activities
Net cash inflow from borrowing 52,733 106,030
activities
Net cash inflow from capital 8,771 74,696
raising activities
70,003 (17,050)
Cash and cash equivalents at beginning 5,563 22,613
of the year
Cash and cash equivalents at 75,566 5,563
end of the year
Capital Expenditure
At the financial year-end the company and the group had capital commitments
totalling R839.5 million (2004:R142.2 million), in respect of properties
acquired. These commitments are being met from bank loans, the issuing of
approximately 71 873 676 (2005: 15 075 000) new linked units and existing cash
resources. In addition there are capital commitments for R5.5 million (2004:
R32,1 million) in respect of the completion of extensions to existing buildings.
These commitments will be funded from existing cash resources.
Statement of changes
in equity
Share Share Non- Distrib Revaluat A Linked
distr utable ion unit
ibuta
ble
capit premium reser reserve Reserve Equity Debentur total
al ves s es
R"000 R"000 R"000 R"000 R"000 R"000 R"000 R"000
Balance 5,159 7,802 45 (2,088) 1,034 11,952 211,016 222,96
at 8
1/11/20
03
Increas 4,049 4,049 4,049
e in
share
capital
Net 1,213 1,213 1,213
increas
e in
share
premium
Issue 0 138,630 138,63
of A 0
debentu
res
Amortis 0 603 603
ation
of
debentu
re
discoun
t
Revalua (1,034) (1,034) (1,034
tion of )
listed
investm
ents
Transfe (5) (5) (5)
r to
negativ
e
goodwil
l
Net 23,624 23,624 23,624
profit
to
31/10/2
004
Balance 9,208 9,015 40 21,536 0 39,799 350,249 390,04
at 8
31/10/2
004
Increas 2,419 2,419 2,419
e in
share
capital
Net 2,568 2,568 2,568
increas
e in
share
premium
Issue 0 97,641 97,641
of A
debentu
res
Amortis 0 1,318 1,318
ation
of
debentu
re
discoun
t
Net 109,440 109,440 109,44
profit 0
to
31/10/2
005
Balance 11,627 11,583 40 130,976 0 154,226 449,208 603,43
at 4
31/10/2
005
Abridged segmental
information
Industr Office Retail Corporat Total
ial e
R"000 R"000 R"000 R"000 R"000
2005
Revenue 38,844 84,779 36,141 45,683 205,44
7
Net (7,712) (17,596) (6,405) (51,825) (83,53
expense 8)
s
Segment 31,132 67,183 29,736 (6,142) 121,90
al 9
trading
income
2004
Revenue 37,460 80,557 13,988 1,439 133,44
4
Net (8,563) (15,564) (2,487) (6,560) (33,17
expense 4)
s
Segment 28,897 64,993 11,501 (5,121) 100,27
al 0
trading
income
The group"s primary segments for segmental reporting purposes are industrial,
office, retail and corporate. Revenue and expenses that are directly
attributable to a segment are allocated to those segments. Revenue and expenses
not directly attributable to a segment are allocated to the corporate segment.
Notes:
Audited Audited
October October
2005 2004
R"000 R"000
Revenue represents rental income and
development trading income:
Rental income 159,764 132,005
Development trading income 45,683 1,439
205,447 133,444
The B debentures are convertible into linked units in 5 equal tranches,
commencing in the January of the year following issue. The new linked units
participate in all distributions from the date of conversion. The company
discontinued issuing B debentures in 2002 and 12 424 485 debentures remain with
the final conversion due in January 2008.
Accounting policies
The results for the year ended 31 October 2005 have been prepared in accordance
with the South African Statements of Generally Accepted Accounting Practice, on
a basis consistent with the accounting policies set out in the last annual
financial statements, except that, in order to comply with AC 105 and circular
7/2005 issued by the South African Institute of Chartered Accountants,
contracted future rentals have been recognised on a straight line basis over the
lease term. The comparative figures have been restated to reflect the impact of
this change.
Audit Report
These results have been audited by the company"s auditors, Ernst & Young, and
their unqualified audit report on the annual financial statements from which
these results have been extracted are available for inspection at the company"s
registered office.
Comments
Returns
The year to 31 October 2005 saw Paramount deliver a combined return of 50% to
linked unitholders, of which capital growth accounted for 37% and distributions
13%.
Financial Results
As a consequence of South Africa adopting International Financial Reporting
Standards, the South African Institute of Chartered Accountants issued Circular
7/2005 requiring all property companies to amortise future contractual lease
escalations. From an accounting point of view this has no net effect on earnings
before taxation, as the amount amortised is set off against revaluation of
investment properties. It does however have an effect on after tax income and
balance sheet disclosure of the group"s investment properties. Comparative
figures have accordingly been restated where appropriate.
Property Activities
In line with the Group"s policy of active asset management 19 smaller properties
which were not regarded as being part of the long term core portfolio were
disposed of. These sales generated profits before taxation of R9,47 million, and
core earnings before taxation of R19,2 million. As part of the strategy of
growing the fund by the acquisition of good quality properties, the group
acquired 4 properties during the year at a cost of R180 million. In addition, it
was announced on 20 October 2005, that contracts had been signed for the
acquisition of a further 10 properties at a cost of R839,5 million. Transfer of
these properties is currently under way and is anticipated to be completed by
the end of 2005. When complete the fund will consist of 59 properties with a
book value of R2,08 billion.
A total of 86 731 m2 of space was let during the 2005 financial year,
representing 18.53% of the portfolio"s total lettable space of 468 057 m2 at
year end. Of this, 49 151 m2 related to new lettings and 37 580 m2 to renewals
of existing leases. The vacancy rate of the portfolio was 2,5% at year end.
Net Asset Value
Investment properties that generate income are carried at fair value based on
valuations by professional independent valuators, less the cumulative straight-
line rental adjustment. The valuators have appropriate qualifications and
extensive experience in property valuations. Fair value is determined by
discounting expected future cash flows at appropriate market interest rates.
Valuations are carried out on an annual basis. This year"s valuation resulted in
an increase in the portfolio value of R128,6 million, before taking into account
the straight-line rental adjustment. As a consequence net asset value per linked
unit rose to R5,19 at year end.
Debt Management
The group"s gearing level dropped during the course of the year from 55,2% to
52,2% Contracts have been entered into with Absa Bank and Rand Merchant Bank, in
terms of which the greater proportion of the group"s debt will be funded on a
50/50 basis on rates more favourable than currently paid. In addition it is
anticipated that, during the course of the forthcoming year, conduit or
securitised funding will be utilised, to further reduce our debt costs.
Prospects
The Board anticipates that distributions for the 2006 year will increase by 8%
over distributions paid during the 2005 year. This forecast has not been
reviewed or reported on by the company"s auditors, and is dependent on there
being no significant deterioration in the economic climate currently prevailing
in South Africa.
Trading statements
In terms of paragraph 3.4 (b)(v) of the JSE Listings Requirements, Paraprop will
be adopting distribution per linked unit (being a proxy for cash flow per linked
unit) as the financial results measure for trading statement purposes, which
will be effective from the six-month period ending 30 April 2006.
DECLARATION OF DISTRIBUTION
Notice is hereby given that the board of directors has declared a final
distribution of 15,5 cents per linked unit in respect of the year ended 31
October 2005. The distribution will be paid on Tuesday, 3 January 2006.
To comply with the procedures of STRATE, the distribution timetable is as
follows:
Last day to trade linked units cum distribution Thursday, 22 December 2005
Linked units commence trading ex distribution Friday, 23 December 2005
Record date Friday, 30 December 2005
Pay date Tuesday, 3 January 2006
Linked unit certificates may not be dematerialised or rematerialised between
Friday, 23 December 2005 and Friday, 30 December 2005.
BY ORDER OF THE BOARD
SPIRE PROPERTY SERVICES (PTY) LTD
SECRETARIES
Cape Town
6 December 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: 06/12/2005 01:13:51 PM Produced by the JSE SENS Department
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
