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ABT
ABT
Ambit - Unaudited Financial Results And Distribution For The Six Month Period
Ended 31 March 2006
Ambit Properties Limited
(Registration number: 2001/007003/06)
Share Code: ABT ISIN Code: ZAE000051645
UNAUDITED FINANCIAL RESULTS AND DISTRIBUTION FOR THE SIX MONTH PERIOD ENDED
31 MARCH 2006
Group income statements
Unaudited Unaudited Audited
1 Oct 2005 to 1 Oct 2004 to 1 Oct 2004 to
31 March 2006 31 March 2005 30 Sept 2005
(Restated)
Notes R"000 R"000 R"000
Revenue 49 575 49 435 99 448
- Rental - cash flows
inherent in leases 47 641 46 117 93 530
- Rental - straight
line adjustment 1 934 3 318 5 918
Property expenses (11 672) (11 741) (24 229)
Net rental
income from properties 37 903 37 694 75 219
Interest income 111 2 265 2 373
Debenture interest and
dividends from
associate company 4 792 3 918 8 338
Finance costs (11 824) (14 012) (25 992)
Administrative expenses (2 444) (2 485) (4 484)
Other expenses (2 271) (1 293) (1 708)
Profit before fair value
adjustments 26 267 26 087 53 746
Change in fair value of
investment properties 56 613 26 638 87 495
- As per property
valuations 58 547 29 956 93 413
- Straight line adjustment (1 934) (3 318) (5 918)
Profit on disposal of
investment properties 220 - 711
Net profit after fair
value adjustments 83 100 52 725 141 952
Share of associate
company"s after
tax profits 3 691 10 097 12 972
Debenture interest -
linked unitholders (24 334) (22 770) (47 799)
Profit before taxation 62 457 40 052 107 125
Taxation (16 866) (7 987) (26 509)
Net profit 45 591 32 065 80 616
Headline earnings per
linked unit
(cents) (weighted) 2.2 14,79 15,73 30,83
Earnings per
linked unit
(cents) (weighted) 2.2 40,23 34,50 77,19
Headline
earnings per share
(cents) (weighted) 2.2 0,79 1,41 2,09
Earnings per
share (cents) (weighted) 2.2 26,23 20,18 48,46
Distribution
per linked unit (cents) 2.2 14,00 13,10 27,50
Group balance sheets
Unaudited Unaudited Audited
31 March 2006 31 March 2005 30 Sept 2005
(Restated)
R"000 R"000 R"000
ASSETS
Non-current assets
Investment properties 713 153 572 188 659 288
- At valuation 726 500 581 300 671 000
- Straight line adjustment (13 347) (9 112) (11 712)
Investment in associate
company 86 635 75 933 82 944
Rental receivable -
straight line adjustment 11 562 8 179 11 437
Total non-current assets 811 350 656 300 753 669
Current assets
Trade and other receivables 5 582 6 341 9 679
- Trade and other
receivables 3 797 5 408 9 404
- Rental receivable -
straight line adjustment 1 785 933 275
Cash and cash equivalents 89 682 66 314 28 929
Total current assets 95 264 72 655 38 608
TOTAL ASSETS 906 614 728 955 792 277
EQUITY AND LIABILITIES
Capital and reserves
Share capital and reserves 186 139 92 215 140 548
Non-current liabilities
Debentures 312 866 312 866 312 866
Interest bearing borrowings 299 038 275 624 267 199
Deferred taxation liability 53 124 18 227 36 433
Total non-current
liabilities 665 028 606 717 616 498
Current liabilities
Trade and other payables 30 625 7 227 9 890
Taxation payable 484 - 308
Linked unitholders for
distribution 24 338 22 796 25 033
Total current liabilities 55 447 30 023 35 231
TOTAL EQUITY AND
LIABILITIES 906 614 728 955 792 277
Group cash flow statements
Unaudited Unaudited Audited
31 March 2006 31 March 2005 30 Sept 2005
(Restated)
R"000 R"000 R"000
OPERATING ACTIVITIES
Cash generated by
operating activities 57 598 32 274 63 450
Interest received 4 903 6 183 10 711
Finance costs (11 824) (14 012) (25 992)
Distributions paid to
linked unitholders (25 029) (26 494) (49 286)
Cash inflow/(outflow) from
operating activities 25 648 (2 049) (1 117)
INVESTING ACTIVITIES
Acquisition of investment
properties (22 263) (11 800) (44 800)
Improvements to investment
properties - (526) (8 592)
Proceeds on disposal of
investment properties 25 529 16 483 32 011
Increase in holding in
associate company - - (4 136)
Cash inflow/(outflow) from
investing activities 3 266 4 157 (25 517)
FINANCING ACTIVITIES
Linked units issued - 35 000 35 000
Share issue expenses - (50) (268)
Long-term loans
raised/(repaid) 31 839 (30) (8 455)
Cash inflow from financing
activities 31 839 34 920 26 277
Increase/(decrease) in
cash and cash equivalents 60 753 37 028 (357)
Cash and cash equivalents
at beginning of year 28 929 29 286 29 286
Cash and cash equivalents
at end of year 89 682 66 314 28 929
Group statements of changes in equity (unaudited)
Share Share Distributable
capital premium reserves
R"000 R"000 R"000
Balance at 30 September 2004 1 583 26 284 257
Shares issued during the period 155 6 969 -
Share issue expenses - (50) -
Net profit attributable to linked
unitholders - - 32 065
Transfer to non-distributable reserves - - (21 544)
Balance as at 31 March 2005 1 738 33 203 10 778
Share issue expenses - (218) -
Net profit attributable to linked
unitholders - - 48 551
Transfer to non-distributable reserves - - (58 999)
Balance at 30 September 2005 1 738 32 985 330
Net profit attributable to linked
unitholders - - 45 591
Transfer to non-distributable reserves - - (45 591)
Balance as at 31 March 2006 1 738 32 985 330
Non-
distributable
reserves Total
R"000 R"000
Balance at 30 September 2004 24 952 53 076
Shares issued during the period - 7 124
Share issue expenses - (50)
Net profit attributable to linked unitholders - 32 065
Transfer to non-distributable reserves 21 544 -
Balance as at 31 March 2005 46 496 92 215
Share issue expenses - (218)
Net profit attributable to linked unitholders - 48 551
Transfer to non-distributable reserves 58 999 -
Balance at 30 September 2005 105 495 140 548
Net profit attributable to linked unitholders - 45 591
Transfer to non-distributable reserves 45 591 -
Balance as at 31 March 2006 151 086 186 139
1. OTHER INFORMATION
Unaudited Unaudited Audited
31 Mar 2006 31 Mar 2005 30 Sept 2005
(Restated)
Linked units in issue 173 814 215 173 814 215 173 814 215
Weighted average linked units 173 814 215 158 929 752 166 351 253
Net asset value (cents per
linked unit)
(before payment of
distribution) 301 246 275
Listed market price (cents per
linked unit) 375 230 323
Premium/(discount) to net
asset value 24,6% (6,5%) 17,5%
2. NOTES TO THE FINANCIAL STATEMENTS
2.1 Accounting policies
These interim financial results have been prepared in accordance with
International Financial Reporting Standards (IFRS) for the first time in the
current year, and IFRS 1 (First time adoption of IFRS) has been applied.
The adoption of IFRS has not resulted in any adjustments to the amounts
reported previously in the annual financial statements for the year ended 30
September 2005 or to the opening IFRS balance sheet at 1 October 2004. The
results have been prepared in accordance with IAS 34 (Interim Financial
Reporting).The comparatives (31 March 2005) have been restated for the straight
lining of rentals on the same basis as done for the 2005 year end.
2.2 Earnings and headline earnings
Earnings and headline earnings for the six month period are based on the
weighted average number of linked units in issue for the year and are
calculated as follows:
(Restated)
31 March 2006 31 March 2005
Cents per Cents per
R"000 unit (cpu) R"000 unit (cpu)
Net profit (earnings) per share 45 591 26,23 32 065 20,18
Debenture interest 24 334 14,00 22 770 14,32
Net profit (earnings)
per linked unit 69 925 40,23 54 835 34,50
Capital surpluses
(net of deferred taxation) (44 219) (25,44) (29 828) (18,77)
Headline earnings
per linked unit 25 706 14,79 25 007 15,73
Debenture interest (24 334) (14,00) (22 770) (14,32)
Headline earnings per share 1 372 0,79 2 237 1,41
Reconciliation to
undistributed earnings:
Headline earnings per share 1 372 0,79
Debenture interest 24 334 14,00
Rental straight lining
net of deferred tax (1 372) (0,79)
Distributable earnings 24 334 14,00
Debenture interest (24 334) (14,00)
Undistributed income - -
2.3 Contingent liabilities
Guarantees
Guarantees amounting to R0,9 million (31 March 2005: R0,9 million) have been
issued in lieu of municipal service deposits.
2.4 Primary business segments for the half-year ended 31 March 2006:
Retail Office Industrial Group
R"000 R"000 R"000 R"000
Income statement
Rental - cash flow basis 26 053 13 219 8 369 47 641
Rental - straight line
adjustment 1 140 311 483 1 934
Net rental income from
properties
(excluding straight line
adjustment) 19 540 9 472 6 957 35 969
Change in fair value of
investment properties
- per valuations 31 493 16 754 10 300 58 547
Balance sheet
Investment properties
- at valuation 402 000 197 000 127 500 726 500
3. COMMENTS
3.1 Results
Ambit"s distribution for the half year is R24,3 million or 14,00 cpu which
shows growth of 6,9% over the interim distribution for 2005 (R22,8 million or
13,10 cpu).
The additional income recognised from the straight lining of rentals has been
transferred to non-distributable earnings, in order that it may be distributed
in later years to correlate with the cash flows inherent in the leases. The
straight lining has been separately disclosed so that users may disregard the
effects thereof.
3.2 Property portfolio
The property portfolio comprises 25 properties with 55% (by value) in retail,
27% offices and 18% industrial, and with 72% of the portfolio located in
Gauteng. The portfolio was valued by the directors as at 31 March 2006 at
R726,5 million which represents a 9% increase on the core portfolio since 30
September 2005. The forward yield on the portfolio valuation is 10,3%.
During the period under review transfers were effected on the five property
disposals contracted last year. The net sale proceeds of R25,5 million realised
a post capital gains taxation profit of R1,0 million.
A property let to Absa in Horison Park, Roodepoort, was acquired at an initial
yield of 11,1% at a cost of R22,5 million. The Lowveld Lifestyle Centre in
Nelspruit which is 79% let to national tenants, was acquired for R43,2 million
representing a yield of 9%. Transfer was effected on 11 April 2006.
Management is currently engaged in the feasibility of upgrading and improving
the tenant mix of Scottsville Mall in Pietermaritzburg which will be undertaken
during the second half of the year.
Since 31 March 2006, Ambit has contracted to acquire a 50% stake in a retail
site in Pinetown at a cost of R14,2 million.
The occupancy level as at 31 March 2006 based on rentable area was 96,12%
(98,2% as at September 2005) which has improved to 97,19% at the time of this
announcement. The lease renewals concluded to date have been at or above the
rentals in the expiring leases and management anticipates this trend will
continue for the balance of the year.
3.3 Oryx investment
Ambit"s 30,49% investment in Oryx Properties Limited increased in value by
R3,7 million to R86,6 million. The investment in Oryx has performed well in the
current year, providing a 14,3% yield on cost and an 11,1% yield on the closing
carrying value of the investment.
3.4 Net asset value
The revaluations of investment properties have given rise to a fair market
adjustment of R58,5 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 301 cents per unit (31 March 2006: 246 cpu). This net asset value would
increase to 317 cpu if the provision for deferred taxation were to be decreased
to the capital gains tax rate of 14,5%.
The market price of units traded on the JSE Limited at 31 March 2006 was 375
cents which represents a premium to net asset value of 24,6%.
3.5 Borrowings
During March 2006, Ambit renegotiated the rates on its interest bearing
borrowings and secured a 50 basis point reduction in variable debt and an 80
basis point reduction in fixed debt rates. The effects of this will be felt in
the second half of the year.
At 31 March 2006 Ambit"s debt level was R299,0 million (31 March 2005:
R275,6 million), which represents a long-term debt to long-term assets ratio of
36,9% (31 March 2005: 41,9%). Of this debt 51% (31 March 2005: 52%) is subject
to fixed interest agreements for periods from 2007 to 2009. The average
interest rate as at 31 March 2006 was 9,1% (31 March 2005: 10,7%). Surplus cash
is invested at Ambit"s variable debt rate.
3.6 Liquidity
Ambit units continued to demonstrate their liquidity with 29,4% of the units in
issue being traded during the six months to 31 March 2006.
3.7 Prospects
As all sectors of the property market continue to show growth and declining
vacancies, Ambit"s portfolio is well placed to benefit from this. Management
continues to seek quality investment opportunities to grow the portfolio.
4. DECLARATION OF DISTRIBUTION
Notice is hereby given of distribution Number Four amounting to 14,00 cents per
unit, for the 6 month period to 31 March 2006. This distribution comprises
interest on debentures of 14,00 cents per unit.
Last date to trade cum distribution Friday, 2 June 2006
Units will trade ex distribution Monday, 5 June 2006
Record date to participate in the distribution Friday, 9 June 2006
Payment of distribution Monday, 12 June 2006
Linked unit certificates may not be dematerialised or re-materialised between
Monday, 5 June 2006 and Friday, 9 June 2006, both days inclusive.
On behalf of the board
DL Brown NBS Harris
Chairman Chief Executive Officer
18 May 2006
Directors
DL Brown (Chairman), NBS Harris (CEO)*, JH Beare, CJ Ewin, RR Emslie,
IN Mkhari, F Uys, J Zidel, RD Jeffery (alternate) *executive
news@ambitprops.co.za
http://www.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 & Touche Chartered Accountants (SA)
Registered Accountants and Auditors
Sponsor
Exchange Sponsors
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited
Date: 18/05/2006 05:15:26 PM Produced by the JSE SENS Department
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