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SYA
SYA
Siyathenga - Unaudited interim results for the period ended 31 December 2005
SIYATHENGA PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2004/005198/06)
Share code: SYA ISIN: ZAE000069530
("Siyathenga" or "the Company")
Unaudited interim results for the period ended 31 December 2005
Highlights
- Total return since listing 36%
- Distribution of 20.00 cents per unit
- Occupancy of 96.96%
- Successful opening of Willowbridge
Building wealth through retail properties
Commentary
Financial Results
Following the successful listing, the Board of Directors of the Company is
pleased to announce an interim distribution of 20.00 cents per linked unit for
the period 5 August 2005 to 31 December 2005. Siyathenga"s forecast for the full
twelve-month period ending 30 June 2006 was disclosed in the prospectus, issued
on 25 July 2005, as 51.25 cents per linked unit. As Siyathenga has only traded
since 5 August 2005, the equivalent pro-rata distribution for the trading period
ending 30 June 2006 is 46.33 cents per linked unit. Based on the continuation of
current economic conditions as well as the performance of the property portfolio
to date, the Company is well placed to achieve the target distribution of 46.33
cents.
Siyathenga"s linked unit price recorded an increase of 32% on the initial rights
offer price of 500 cents to 660 cents as at 31 December 2005. Together with the
interim distribution, linked unitholders will receive a total return of 36% on
their investment since listing.
Portfolio Review
Siyathenga"s property portfolio was externally valued on 1 December 2005 at R883
million, giving rise to an accounting revaluation surplus of R49.5 million.
As a result of effective management and a buoyant economy, the Company achieved
high occupancy levels. The occupancy level of the portfolio was 96.96% at 31
December 2005. These occupancy levels are expected to continue into the
foreseeable future.
The Willowbridge Shopping Centre in Cape Town was successfully opened in
October. A fifty percent undivided share in Willowbridge was transferred to
Siyathenga on 21 December 2005 for a purchase consideration of R177 million.
Borrowings
Siyathenga"s gearing level has decreased from 58% at listing to 53% as at 31
December 2005. The Company will maintain its strategy of entering into fixed
interest rate agreements for the majority of its long term borrowings thereby
ensuring the sustainability of future growth.
Future Prospects
In line with its strategy of establishing a high quality portfolio of retail
assets, Siyathenga entered into an agreement with Pangbourne Properties Limited
to acquire six properties for a total purchase consideration of R520.29 million.
A circular and pre-listing statement was posted to shareholders on 13 February
2006 setting out the relevant details of this acquisition. Siyathenga"s Board of
Directors is of the unanimous opinion that all the terms and conditions of the
acquisition are beneficial to Siyathenga unitholders. Accordingly, they
recommend that Siyathenga unitholders vote in favour of the transaction at the
general meeting.
The anticipated date of transfer of the abovementioned properties is 31 March
2006, after the fulfillment of certain conditions precedent, which include
shareholder and Competition Commission approval.
The new portfolio is being acquired at a forward yield which will impact
positively on future distributions. In addition, the transaction will
substantially increase the market capitalisation of Siyathenga and improve the
tradability of the Siyathenga linked units.
Pangbourne has acquired, as part of the TRFPT portfolio, the TRFPT rights and
obligations to the agreements that it has with a developer in respect of the
construction of a shopping centre development as an extension to the existing
Boardwalk shopping centre in Richard"s Bay, with a maximum cost to completion of
R360 million. Pangbourne has granted Siyathenga a right of first refusal to
acquire the completed development.
Investors distributable earnings
This investor information insertion is aimed at disclosing to the readers the
basis on which the distribution was calculated, and illustrates the accounting
adjustments which were taken into account in calculating the distribution.
Period ended
R"000 31 December 2005
Revenue 36 877
Net property portfolio costs (7 005)
Administrative costs (2 694)
Interest received 531
Interest paid (13 707)
Linked unitholders distributable earnings 14 002
Weighted average linked units and shares in 69 984 623
issue
Linked unitholders distributable earnings per 20.01
linked unit (cents)
Distribution per linked unit - declared (cents) 20.00
Number of linked units in issue 69 984 623
RECONCILIATION BETWEEN LINKED UNITHOLDERS
DISTRIBUTABLE EARNINGS TO PROFIT FOR THE PERIOD
Linked unitholders distributable earnings 14 002
Gross revaluation of investment properties 49 597
Movement of fair value in interest rate swaps (2 247)
Debenture interest distributed to linked (14 002)
unitholders
Taxation - Deferred (13 731)
Profit for the period 33 619
Return to linked unitholders
Period ended
31 December 2005
Share price at 5 August (cents) 500
Share price at 30 December (cents) 660
Capital return (cents) 160
Distributions for the period (cents) 20
Total return (cents) 180
Total return for the period (%) 36
5 month high (cents) 660
5 month low (cents) 500
Abridged consolidated income statement
Period ended
R"000 31 December 2005
Revenue 36 877
Straight-line operating lease adjustment 4 822
Net property portfolio costs (7 005)
Administrative costs (2 694)
Profit from operations 32 000
Net revaluation of investment properties 44 775
Attributable to straight-line operating lease (4 822)
adjustment
Gross revaluation of investment properties 49 597
Earnings before financing costs and taxation 76 775
Interest received 531
Interest paid (13 707)
Movement of the fair value of interest rate (2 247)
swaps
Debenture interest distributed to unitholders (14 002)
Profit before taxation 47 350
Taxation - Deferred (13 731)
Profit for the period 33 619
Reconciliation between earnings and headline
earnings
R"000
Profit for the period 33 619
Adjusted for:
Net revaluation of investment properties net of (31 791)
taxation
Headline earnings for shareholders 1 828
Earnings per linked unit (cents) 68.04
Headline earnings per linked unit (cents) 22.62
Diluted earnings per linked unit (cents) 68.04
Diluted headline earnings per linked unit based 2.61
on 69 984 623 units
Net asset value per share (cents) 87
Earnings per share (cents) 48.04
Diluted earnings per share 48.04
Headline earnings per share (cents) 2.61
Diluted headline earnings per share based on 2.61
69 984 623 units
Net asset value per linked unit (cents) 547
Segmental information
Primary segment Corporate
R"000 Industrial Office Retail unallocated Total
Revenue 1 379 7 365 28 133 - 36 877
Segment results 1 354 5 848 27 492 (2 694) 32 000
Profit from
operations
Segmental Assets 25 220 122 065 743 491 6 579 897 355
Segmental - - - 836 122 836 122
Liabilities
Abridged consolidated balance sheet
As at
R"000 31 December 2005
ASSETS
Non-current assets Investment properties** 882 998
Equipment, furniture and fittings 151
Loans to share trust participants 6 428
Current assets Accounts receivable and 7 778
prepayments
Total assets 897 355
EQUITY AND LIABILITIES
Share capital and reserves Share capital and 27 614
premium
Retained earnings 33 619
Non-current liabilities Debenture capital 321 929
Interest-bearing borrowings 430 783
Fair value of interest rate swaps 2 247
Current liabilities Accounts payable and accruals 46 925
Bank balances 6 505
Taxation - Deferred 13 731
Distribution for Unitholders 14 002
Total equity and liabilities 897 355
**The effect of the straight-line operating lease adjustment of R4 822 is
included in the book value of investment properties.
Abridged consolidated cash flow statement
Period ended
R"000 31 December 2005
Cash flow from operating activities
Cash generated from operations before 46 726
distributions to unitholders
Net cash inflow from operating activities 46 726
Cash flow from investing activities Additions to (833 401)
Investment properties
Additions to equipment, furniture and fittings (156)
Net cash outflow in investing activities (833 557)
Cash flow from financing activities Issue of 349 543
ordinary share capital and debentures net of
transaction costs
Increase in interest-bearing borrowings 430 783
Net cash inflow from financing activities 780 326
Net decrease in cash and cash equivalents (6 505)
Cash and cash equivalents at the beginning of the -
period
Cash and cash equivalents at the end of the (6 505)
period
Consolidated statement of changes in equity
Share Share Retained
R"000 Capital Premium earnings Total
Balance at 4 August 2005 3 11 997 - 12 000
Linked units issued 4 15 990 - 15 994
Share issue costs - (380) - (380)
Profit for the period after - - 33 619 33 619
distributions and taxation
Balance at 31 December 2005 7 27 607 33 619 61 233
NOTES TO THE FINANCIAL STATEMENTS
1. Basis of preparation
1.1 The unaudited interim financial report has been prepared in accordance
with International Financial Reporting Standards ("IFRS").
a) IAS34 - Interim Financial Reporting, the requirements of the
South African Companies Act 1973 as amended.
b) IFRS 1 - First-time adoption of International Financial
Reporting Standards has been applied in the preparation of the
interim financial report.
1.2 No comparative information has been presented as the Company was
dormant through to 5 August 2005.
1.3 Whilst the directors are of the opinion that the unrealised gains on
the revaluation of investment properties should be taxed at the
capital gains tax rate of 14.5%, as this would better reflect the
commercial position, IFRS requires that deferred tax be raised at the
Company Income tax rate of 29%.
2. Related party transactions
Related party transactions were concluded during the reporting period at
arm"s length as would be negotiated between unrelated willing parties.
Distribution declaration per linked unit
Notice is hereby given that a distribution of 20.00 cents per linked unit has
been declared and approved by the board of directors for the period ended 31
December 2005.
Distribution timetable:
Event Date
a Last day to trade cum distribution. Friday, 31 March 2006
b Linked units trade ex distribution from the Monday, 3 April 2006
commencement of business.
c Record date for unitholders to participate in the Friday, 7 April 2006
interim distribution.
d Payment of distribution to unitholders. Monday, 10 April 2006
e Linked unit certificates may not be Monday, 3 April 2006
dematerialised to or rematerialised Friday, 7 April 2006
(both days inclusive)
On behalf of the board
M D Bosman 2nd Floor
Secretary 382 Jan Smuts Avenue Craighall
21 February 2006
Directors:
A J W L Richards (Chairman), A P F von B low (Managing)*,
B Frigenti (Italian), C M Hutchison, J B Gibbon, E P M Moses,
L X Mtumtum
*Executive
Date: 23/02/2006 03:53:33 PM Produced by the JSE SENS Department
