| Thu 20 Apr 2006, 13:05 | | Octodec - Unaudited interim results for the six mo |
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OCT
OCT
Octodec - Unaudited interim results for the six months ended 28 February 2006
Octodec Investments Limited And Its Subsidiaries
Incorporated in the Republic of South Africa.
Registration number: 1956/002868/06
Share Code: OCT.
ISIN: ZAE000005104.
("Octodec" or "the group" or "the company")
The directors report the unaudited results of the group for the six months ended
28 February 2006 set out herein, together with comparisons with the results for
the corresponding period in 2005 and the year ended 31 August 2005
NOTICE TO LINKED UNITHOLDERS
UNAUDITED INTERIM RESULTS OF THE GROUP FOR THE SIX MONTHS ENDED 28 FEBRUARY 2006
Distribution up by 34.5% to 42.5 cents per linked unit
Increase in net asset value by 27.1% to 1049 cents
Assets exceed R1,4 billion
ABRIDGED CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
six months six months year to
Changes 28 Feb 2006 28 Feb 2005 31 Aug 2005
% R"000 R"000 R"000
Revenue
- earned on contractual basis 24,7% 84,450 67,718 139,694
- straight line lease adjustment 89 1,667 1,022
Net property income
- earned on contractual basis 34.3% 53,599 39,903 84,515
- straight line lease adjustment 89 1,667 1,022
Administrative expenses (3,142) (2,141) (4,724)
Interest received 366 312 683
Investment income - listed
investments 38.1% 2,025 1,467 3,374
Investment income - associate 28,301 17,327 19,630
- equity earnings 654 0 1,654
- fair value adjustment /
capital reserves 25,564 14,282 14,282
- other 2,083 3,045 3,694
Capital profit /(loss) on
disposals of investment properties 8 (119) (15)
Depreciation (275) (250) (550)
Fair value adjustment of
investment properties
- net revaluation 195,081 (1,667) 283,492
- gross revaluation 195,170 0 284,514
- less: straight line lease
adjustment (89) (1,667) (1,022)
Profit before interest 276,052 56,499 387,427
Interest paid 27% (21,136) (16,688) (34,303)
Profit before debenture interest 540.3% 254,916 39,811 353,124
Debenture interest 34.4% (33,132) (24,647) (52,789)
Profit before taxation 221,784 15,164 300,335
Taxation charge (57,240) (803) (78,266)
Net income after taxation 164,544 14,361 222,069
Linked units in issue - ("000) 78,345 78,345 78,345
Earnings per share - (cents) 1045.8% 210.0 18.3 283.5
Earnings per linked unit -
(cents) 406.8% 252.3 49.8 350.8
Headline earnings per linked
unit - (cents) 26.7% 42.9 33.8 69.1
Distribution per linked
unit (cents)
Dividends 0.21 0.14 0.32
Interest 42.29 31.46 67.38
Total 34.5% 42.50 31.60 67.70
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
six months six months year to
28 Feb 2006 28 Feb 2005 31 Aug 2005
R"000 R"000 R"000
Cash flow from operating activities
Net rental income from properties 50,922 40,558 81,701
Adjustment for :
- Depreciation 275 250 550
- Working capital changes 5,631 11,244 2,235
Cash generated from operations 56,828 52,052 84,486
Investment income and interest
received 4,474 1,779 5,291
Finance costs (21,136) (16,688) (34,303)
Taxation paid (242) (782) (2,835)
Distribution to linked unit
holders paid (28,282) (24,169) (49,042)
Net cash inflow from operating
activities 11,642 12,192 3,597
Cash flow from investing activities
Investing activities (20,097) (68,523) (135,034)
Proceeds from disposal of investment
properties 0 1,500 3,500
Net cash outflow used in investing
activities (20,097) (67,023) (131,534)
Cash flow from financing activities 15,658 54,992 123,460
Net decrease in cash and cash
equivalents 7,203 161 (4,477)
Cash and cash equivalents at
beginning of period (4,653) (176) (176)
Cash and cash equivalents at
end of period 2,550 (15) (4,653)
DISTRIBUTABLE EARNINGS
The following additional information is provided and is aimed at disclosing to
the users the basis on which the distributions are calculated.
Unaudited Unaudited Audited
six months six months year to
Changes 28 Feb 2006 28 Feb 2005 31 Aug 2005
% R"000 R"000 R"000
Revenue
- earned on contractual basis 24.7% 84,450 67,718 139,694
Net property income 34.3% 53,599 39,903 84,515
Administrative expenses (3,142) (2,141) (4,724)
Interest received 366 312 683
Investment income - associate -10.1% 2,737 3,045 5,348
Investment income - listed
investments 38.1% 2,025 1,467 3,374
Depreciation (275) (250) (550)
Distributable profit before
interest 55,310 42,336 88,646
Interest paid 26.7% (21,136) (16,688) (34,303)
Distributable profit before
taxation 34,174 25,648 54,343
Taxation charge (667) (803) (1,261)
Unit holders distributable
earnings 33,507 24,845 53,082
Linked units in issue - ("000)
- weighted 78,345 78,345 78,345
Distributable earnings per
linked unit - (cents) 34.9% 42.8 31.7 67.8
Distribution per linked
unit (cents) 34.5% 42.5 31.6 67.7
ABRIDGED CONSOLIDATED BALANCE SHEET
Unaudited Audited
six months year to
28 Feb 2005 31 Aug 2005
R"000 R"000
Assets
Non-current assets
Investment properties, plant and equipment 1,373,547 1,162,115
Investment properties 1,371,480 1,136,338
Plant and equipment 1,978 2,124
Investment properties - straight line
lease adjustment 89 23,653
Investments - listed securities 55,240 43,577
- associated company 63,031 33,990
Current assets 15,206 17,646
Total assets 1,507,024 1,257,328
Equity and liabilities
Share capital 11,200 11,200
Non-distributable reserve 541,837 367,698
Retained profit 25,509 25,275
Ordinary shareholders" interest 578,546 404,173
Debentures 242,923 242,923
Linked unitholders" interest 821,469 647,096
Interest bearing borrowings 434,843 420,726
Deferred tax liability 180,743 122,479
Current liabilities - interest bearing 8,533 10,777
- non-interest bearing 28,304 28,107
- linked unitholders 33,132 28,143
Total equity and liabilities 1,507,024 1,257,328
Linked units in issue ("000) 78,345 78,345
Net asset value per linked unit (cents) 1,049 826
ABRIDGED STATEMENT OF CHANGES IN EQUITY
Non-
Share Distributable Distributable
capital reserve reserve Total
R"000 R"000 R"000
Balance at 1 September 2004 11,200 129,511 24,187 164,898
Net income attributable
to ordinary shareholders 222,069 222,069
Dividends paid (227) (227)
Adjustment to valuation
of listed investment, net 17,433 17,433
of deferred Capital Gains Tax
Transfer to non-distributable
reserve
Capital loss on disposal
of investment property (15) 15 0
Fair value adjustment of
investment properties
- associate, net of
deferred tax 14,282 (14,282) 0
- investment properties,
net of deferred tax 206,487 (206,487) 0
Balances at 1 September
2005 11,200 367,698 25,275 404,173
Net income attributable to
ordinary shareholders 164,544 164,544
Dividends paid (142) (142)
Adjustment to valuation of
listed investment, net of
Capital Gains Tax 9,971 9,971
Capital loss on disposal of
investment property 8 (8) 0
Fair value adjustment of
investment properties
- investment properties,
net of deferred tax 138,596 (138,596) 0
- associate, net of
deferred tax 25,564 (25,564) 0
Balances at
28 February 2006 11,200 541,837 25,509 578,546
RECONCILIATION - EARNINGS PER SHARE TO HEADLINE EARNINGS PER LINKED UNIT
Unaudited Unaudited Audited
six months six months year to
28 Feb 2006 28 Feb 2005 31 Aug 2005
Cents Cents Cents
Earnings per share 210.0 18.3 283.5
Add: debenture interest per
linked unit 42.3 31.5 67.3
Earnings per linked unit 252.3 49.8 350.8
Loss on disposal of investment
properties 0 0.2 0
Straight line lease adjustment 1.3
Fair value adjustments
- associate, net of deferred
tax (32.5) (18.3) (18.1)
- investment properties, net
of defered tax (176.9) 2.1 (264.9)
Headline earnings per
linked unit 42.9 33.8 69.1
NOTES TO THE FINANCIAL STATEMENTS
The unaudited abridged interim financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS) and the
requirements of the Companies Act (Act 61 of 1973). The group has adopted IFRS
for the year ended 31 August 2006, with a date of transition of 1 August 2004.
The results have been prepared and presented in accordance with IAS 34, Interim
Financial Reporting. There has been no impact on the income statement and
balance sheet for prior years due to the adoption of IFRS.
In order to comply with International Accounting Standard IAS 17 rental income
from leases is recognized on a straight-line basis over the period of the lease.
Adjustments were made to the comparative six month period to comply with IAS 17.
In order to avoid an overstatement of assets the fair value of investment
properties has been reduced by the cumulative straight-line rental accrual.
Deferred taxation on the fair value adjustment of investment property has been
provided at the company income taxation rate which is currently 29%.
Comments
Review of results
The directors of Octodec are pleased to report that the company has continued to
produce excellent growth in distributions to linked unitholders. Distributable
earnings per linked unit for the six month period ended 28 February 2006,
amounted to 42.8 cents (2005: 31.7 cents), an increase of 35.0% over the
previous comparative period. Rental income and net rental income increased by
24.7% and 34.3% respectively, compared with the previous six month period.
The interim distribution per linked unit for the period of 42.5 cents (2005:
31.6 cents) represents an increase of 34.5% on that paid in the previous
corresponding period.
The redevelopment of Killarney Mall Shopping Centre, favourable renewals of
leases, strict expense control as well as extremely favourable trading
conditions have all contributed to the growth in distributable earnings.
Property portfolio
Killarney Mall
The redevelopment of Killarney Mall was successfully completed in October 2005
at a cost of R97 million. The mall is anchored by Edgars, Woolworths and Pick n
Pay, with Edgars occupying 4300m_ on a 10 year lease.
Waverley Plaza
The refurbishment of Waverley Plaza Shopping Centre is scheduled to commence in
the third quarter of 2006.
Gezina Stad
The recent refurbishment of Gezina Stad has resulted in much improved rentals
and the shopping centre is now fully tenanted with long leases in place.
The retail portfolio which comprises of five shopping centres, continued to
enjoy strong growth in earnings due to favourable renewals and contractual
rental escalations.
Anke Properties
Due to the strong demand for these light industrial premises, a further
development of an additional 8690m_ will commence shortly at a cost of R20
million.
Subsequent to the financial year end Octodec acquired 5 properties for R99
million. These purchases include Kyalami Crescent, Centre Forum situated in the
Pretoria CBD and three light industrial properties situated in Selby and City
Deep.
Gearing
Octodec"s gearing at the end of the six months period was 29.0% as against 34.8%
in the comparable period.
Interest rates in respect of 68.0% of borrowings at 28 February 2006 have been
fixed at an average weighted interest rate of 10.9% maturing at various dates
ranging from November 2006 to September 2008.
Revaluation of property portfolio
Previously it was the Group"s policy to perform directors" valuations of the
property portfolio only at the year end. The property portfolio will also be
valued for purposes of the interim report. At each financial year end one-third
of the properties will be valued on a rotational basis by an external valuer.
Prospects
The group is optimistic about its ability to grow earnings on par with, if not
better than, the market average, due to its continued focus on its strategic
priorities and expected continuation of favourable economic conditions.
DECLARATION OF DIVIDEND NO. 32 AND INTEREST PAYMENT ("the distribution")
Notice is hereby given that dividend number 32 of 0.21 cents (2005: 0.14 cents)
per ordinary share together with interest of 42.29 cents per debenture (2005:
31.46 cents), for the period 1 September 2005 to 28 February 2006 has been
declared, payable to linked unitholders recorded in the register on Friday, 19
May 2006. The last date to trade "CUM" distribution is Friday, 12 May 2006. The
units will commence trading "EX" distribution on Monday, 15 May 2006. Payment
date will be Monday, 22 May 2006.
No dematerialisation or rematerialisation of linked unit certificates may take
place between Monday, 15 May 2006 and Friday, 19 May 2006, both days inclusive.
By order of the Board.
City Property Administration (Proprietary) Limited
21 April 2006
A Wapnick J P Wapnick
(Chairman) (Managing director)
Directors
A Wapnick* (Chairman), J P Wapnick* (Managing director), M J Holmes#, R J
Inggs*, M Z Pollack#, S Wapnick+
*Executive +Non-Executive #Independent non-executive
Registered Office Transfer Secretaries
CPA House Computershare Investor Services 2004
101 du Toit Street (Proprietary) Limited
Pretoria, 0002 (Registration number 2004/003647/07)
P O Box 15, Pretoria, 0001 70 Marshall Street, Johannesburg 2001
Tel: (012) 319 8811 P O Box 61051, Marshalltown, 2107
Fax: (012) 319 8812 Tel: (011) 370 7700 Fax: (011) 668 7712
Date: 20/04/2006 01:05:16 PM Produced by the JSE SENS Department
