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CBS
CBS
CBS - Audited results of the group for the year ended 31 October 2005
CBS PROPERTY PORTFOLIO LIMITED
Registration number: 2003/009523/06
Share code: CBS & ISIN: ZAE000073995
CONSOLIDATED AUDITED RESULTS OF THE GROUP FOR THE YEAR ENDED 31 OCTOBER 2005
2005 HIGHLIGHTS
* Distribution per linked unit from 56.5c to 64.5c up +16.2%
* Rental Revenue from R49.3m to R70.3m up +43.0%
* Investment Property from R464.0m to R781.0m up +68.0%
INCOME STATEMENT
2005 2004
R"000 R"000
Revenue excluding straight-
line lease accrual 70 270 49 255
Straight-line lease income accrual 7 444 3 910
Revenue 77 714 53 165
Fair value adjustment on
investment property 41 564 33 133
Gross fair value adjustment 49 008 37 043
Less straight-line lease adjustment (7 444) (3 910)
Other operating income 5 454 3 740
Administrative expenses (2 366) (1 978)
Other operating expenses (24 338) (18 656)
Operating profit 98 028 69 404
Investment income 927 849
Finance costs (50 139) (35 773)
Profit before taxation 48 816 34 480
Taxation (6 891) (7 225)
Profit after taxation 41 925 27 255
Attributable to outside shareholders - -
Earnings attributable to
ordinary shareholders 41 925 27 255
Net profit 41 925 27 255
Basic earnings per linked unit R1.42 R1.01
Diluted earnings per linked unit R1.42 R1.01
CASH FLOW STATEMENT
2005 2004
R"000 R"000
Cash flows from operating activities (13 815) 15 080
Cash generated by operating activities 35 396 50 004
Interest received 928 849
Interest paid (50 139) (35 773)
Cash flows from investing activities (71 779) (427 161)
Expenditure to maintain
operating capacity
Property, plant and
equipment acquired (310) -
Proceeds of disposals of
property, plant and equipment 16 931 -
Expenditure for expansion
Subsidiaries acquired (968) -
Investment properties acquired (87 432) (427 161)
Cash flows from financing activities 124 624 420 913
Capital raised 5 020 1 194
Loans raised 121 730 420 258
Loans repaid (2 126) (539)
Increase in cash and cash
equivalents 39 030 8 832
Cash and cash equivalents
at beginning of the year 8 832 -
Cash and cash equivalents
at end of the year 47 862 8 832
SEGMENTAL REPORT
Group results presented according to primary business segment
Industrial
2005 2004
R"000 R"000
REVENUE 2 095 2 049
RESULT 2 643 2 531
UNALLOCATED CORPORATE INCOME/EXPENSES
Interest receivable
Interest paid
Income from subsidiary
Dividend
PROFIT BEFORE TAX
SEGMENT ASSET 12 599 12 296
UNALLOCATED CORPORATE ASSETS
CONSOLIDATED TOTAL ASSETS
SEGMENT LIABILITIES 8 199 7 916
UNALLOCATED CORPORATE LIABILITIES
CONSOLIDATED TOTAL LIABILITIES
Capital expenditure 1 296 11 042
Non-cash expenses other than depreciation 616 857
Retail
2005 2004
R"000 R"000
REVENUE 45 637 27 844
RESULT 57 566 34 391
UNALLOCATED CORPORATE INCOME/EXPENSES
Interest receivable
Interest paid
Income from subsidiary
Dividend
PROFIT BEFORE TAX
SEGMENT ASSET 553 795 276 552
UNALLOCATED CORPORATE ASSETS
CONSOLIDATED TOTAL ASSETS
SEGMENT LIABILITIES 360 383 178 037
UNALLOCATED CORPORATE LIABILITIES
CONSOLIDATED TOTAL LIABILITIES
Capital expenditure 56 949 248 359
Non-cash expenses other than depreciation 27 072 19 264
Commercial
2005 2004
R"000 R"000
REVENUE 29 982 23 272
RESULT 37 819 28 744
UNALLOCATED CORPORATE INCOME/EXPENSES
Interest receivable
Interest paid
Income from subsidiary
Dividend
PROFIT BEFORE TAX
SEGMENT ASSET 283 830 186 803
UNALLOCATED CORPORATE ASSETS
CONSOLIDATED TOTAL ASSETS
SEGMENT LIABILITIES 184 703 120 259
UNALLOCATED CORPORATE LIABILITIES
CONSOLIDATED TOTAL LIABILITIES
Capital expenditure 29 187 167 759
Non-cash expenses other than depreciation 13 875 13 012
Consolidated
2005 2004
R"000 R"000
REVENUE 77 714 53 165
RESULT 98 028 65 666
UNALLOCATED CORPORATE INCOME/EXPENSES
Interest receivable 481 849
Interest paid (50 139) (35 773)
Income from subsidiary 446
Dividend 3 738
PROFIT BEFORE TAX 48 816 34 480
SEGMENT ASSET 850 224 475 651
UNALLOCATED CORPORATE ASSETS 17 753 1 101
CONSOLIDATED TOTAL ASSETS 867 976 476 751
SEGMENT LIABILITIES 553 285 306 211
UNALLOCATED CORPORATE LIABILITIES 224 927 142 091
CONSOLIDATED TOTAL LIABILITIES 778 212 448 302
Capital expenditure 87 432 427 161
Non-cash expenses other than depreciation 41 563 33 133
Group results presented according to secondary geographic segment
SALES REVENUE BY
GEOGRAPHICAL AREA
2005 2004
R"000 R"000
KZN - -
WESTERN CAPE 73 467 53 165
GAUTENG 4 247 -
77 714 53 165
SEGMENT ASSETS BY
GEOGRAPHICAL AREA
2005 2004
R"000 R"000
KZN -
WESTERN CAPE 576 517 475 651
GAUTENG 273 706 -
850 224 475 651
ADDITIONS TO SEGMENT ASSETS
BY GEOGRAPHICAL AREA
2005 2004
R"000 R"000
KZN -
WESTERN CAPE 59 286 427 161
GAUTENG 28 146 -
87 432 427 161
BALANCE SHEET
as at 31 October 2005
2005 2004
R"000 R"000
Assets
Non-current assets 775 514 463 960
Property, plant and equipment 289 -
Goodwill 14 968 -
760 257 463 421
Investment properties 751 174 460 293
Straight-line debtor 9 083 3 128
Loans to subsidiaries/related party - 539
Investment in subsidiaries - -
Current assets 92 462 12 791
Trade and other receivables 20 169 2 616
Current portion of straight-line debtor 2 271 782
Amount owing by related party 2 496 561
Non-current asset held for sale 19 401 -
Cash and cash equivalents 48 125 8 832
Total assets 867 976 476 751
Equity and liabilities
Capital and reserves 89 763 28 449
Share capital and premium 20 583 1 194
Distributable reserve 69 180 27 255
Non-current liabilities 695 583 435 241
Debentures 203 838 134 865
Amount owing to related party 317 -
Borrowings 471 052 293 151
Deferred tax 20 376 7 225
Current liabilities 82 630 13 061
Taxation 90 -
Trade and other payables 29 797 13 000
Current portion of borrowings 52 436 61
Bank overdraft 263 -
Provisions 44 -
Total equity and liabilities 867 976 476 751
STATEMENT OF CHANGES IN EQUITY
Share Share Distributable
capital premium reserve Total
R"000 R"000 R"000 R"000
Balance at
01 November 2003 - - - -
Net profit for the year 27 255 27 255
Issue of share capital 135 1 059 1 194
Balance at
01 November 2004 135 1 059 27 255 28 449
Net profit for the year 41 925 41 925
Issue of share capital 77 22 069 22 146
Listing expenses written
off (2 757) (2 757)
Balance at 31 October 2005 212 20 371 69 180 89 763
DIRECTORS
Ivan Klerck* CA(SA) (Chairman); Gary Fisher B.Soc SC CEA; Martin Ettin BA LLB;
Derek Greenberg B.Sc(Eng), B.Com, MBA, Valuer; Eugene Loubser*;
Sean Mackay CA(SA); Jeff Molobela* B.Sc(Eng), MBA; Paul Sulcas* BA(Hons),
M.Com, D.Com, CA(SA), ACIS; Colin Traub* BA LLB.
(*Non-Executive)
COMPANY SECRETARY: Charmaine Loydall
CBS Property Portfolio Limited
Registration number: 2003/009523/06
Registered office: 7th Floor
Buitengracht Centre
125 Buitengracht Street
Cape Town, 8001
Share code: CBS ISIN: ZAE000073995
Sponsor:
Investec Bank Limited
(Registration number 1969/004763/06)
Auditor
BDO Spencer Steward
Chartered Accountants and Auditors
Registered Accountants and Auditors
(Registration number 1995/002310/21)
REVIEW
The year to 31 October 2005 was a remarkable success, as reflected in the
financial highlights.
The interest paid to unitholders for the year ended 31 October 2005 was 64.5
cents per unit, an increase of 16.2% on last year"s distribution of 56.5 cents.
2005 2004
Headline earnings per linked unit 22c (3c)
Reconciliation between basic earnings and headline
ear nings
Net income after tax 41 925 27 255
Add back fair value adjustment (41 564) (33 133)
Less taxation applicable thereto 6 027 4 970
Headline profit/(loss) 6 388 (908)
PROPERTY ACTIVITIES
In line with the group"s active asset management policy, the industrial park in
Okovango, Brackenfell, was sectionalised in the period under review and
realised a R5.4 million trading profit as a result.
The Brait Building in prestigious Fricker Road, Illovo, valued at R80 million,
was purchased in March 2005 and transferred in October 2005.
On 1 September 2005 CBS acquired:
1. 100% of CBS Property Management (Pty) Ltd, for R14.85 million.
2. 100% of Riverbend Trade & Invest 4 (Pty) Ltd, for R21.9 million
(representing the net asset value), which owns 46% of The Wedge. Our 46%
share of this property is valued at R79 million. It is situated on the
south side of Rivonia Road, a short distance north of Sandton"s CBD.
Major tenants include Mica, Woolworths, Clicks, Mr Price and Fruit & Veg
City.
3. 100% of Yieldgro Properties Ltd, for R37.2 million (representing the net
asset value), with properties valued at R109.9 million.
Rm
Avis Car Mall, Edenvale 9.8
Avis Car Mall, Goodwood 6.4
Constantia Kloof Office Park 11.3
Duplex Liquid Meters, Edenvale (warehousing and offices) 11.3
Medpark, Goodwood (medical suites and retail) 11.0
Motor City Centre, Edenvale (retail premises) 10.1
Wedgefield Office Park, Bryanston 50.0
109.9
4. The effective date of the Growthpoint Portfolio (value R161.2
million) was 31 October 2005 with transfer of the properties currently in
progress.
Rm
Centex Close, Gauteng (offices) 8.4
Cleveland Industrial, Gauteng (warehouse) 11.1
Dover Street, Gauteng (offices) 2.9
Harley Street, Gauteng (offices) 7.2
Motown Randburg, Gauteng (retail motor) 27.8
Rustenberg Centre (warehouse and offices) 4.0
Truchurch, Pretoria CBD (retail) 24.1
Victoria Maine, KZN (offices) 34.1
Village Market, KZN (retail/residential) 41.6
161.2
5. Malvern Centre, comprising retail, office and residential valued at R63.5
million, was transferred on 1 December 2005, with the effective date
being 31 October 2005.
POST BALANCE SHEET EVENTS
CBS was listed on the Main Board of the JSE Ltd on 2 November 2005.
The listing was preceded by a Scheme of Arrangement, unanimously supported by
shareholders, which included the adoption of a debenture trust deed and the
split of the linked unit into two equal amounts.
The listing was pursued under ideal property market conditions, including:
- Lowest interest rates in 30 years
- Stable economy
- Liquid institutional investors
- A property sector that has become a JSE star performer.
The listing was a resounding success, with the institutional portion of the
private placement oversubscribed by 7.5 times. We are happy to report that we
now have in excess of 1 000 shareholders with good liquidity, as evidenced by
the daily JSE trading.
Since listing CBS has acquired seven properties, as detailed below, at a cost
of R122.54 million.
Vendor Property Effective Date
Toich Group Gateway Park, Midrand 31 December 2005
Gateway Creek, Midrand 31 December 2005
Green Oaks, Midrand 31 December 2005
Moslein Portfolio 144 Hendrik Verwoerd Drive, Randburg 01 January 2006
150 Hendrik Verwoerd Drive, Randburg 01 January 2006
152 Hendrik Verwoerd Drive, Randburg 01 January 2006
Simonstown Boardwalk Simonstown Boardwalk Centre On date of transfer
Centre (Pty) Ltd
The above underlines the objective of CBS to deliver a sustainable and growing
income stream to investors through the acquisition of quality property, which
will produce consistent income and capital growth.
ACCOUNTING POLICIES
The results for the year ended 31 October 2005 have been prepared in accordance
with International Financial Reporting Standards. The comparatives have been
restated for any changes due to the first time adoption of IFRS. In order to
comply with AC105 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 BDO Spencer Steward (CT) Inc., and their
audit report is available for inspection at the company"s registered office.
Date: 30/01/2006 02:00:12 PM Produced by the JSE SENS Department
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