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VKE
VKE
Vukile Results Soar On Strong Property Performance, Debt Cost Savings And MICC
Contribution
Vukile Property Fund Limited
(Incorporated in the Republic of South Africa)
Registration number 2002/027194/06
JSE code: VKE
ISIN: ZAE000056370
VUKILE RESULTS SOAR ON STRONG PROPERTY PERFORMANCE, DEBT COST SAVINGS AND MICC
CONTRIBUTION
Johannesburg, 29 May 2006 - Property loan stock company Vukile today reported
a 30% increase to R233 million in net profit for the year to 31 March and
announced a second-half distribution of 36.0 cents per linked unit, up 14.3% on
the comparable period in 2005 and making the distribution for the full year 68.5
cents (up 11.4%).
The group"s property portfolio value had increased to over R3.5 billion.
Overall vacancy of the Vukile portfolio had been reduced to 3.6% of gross income
(MICC 5.9%) and the board had approved R230 million in new investments expected
to yield close to 10%. The total return to unitholders for the 2006 financial
year was 99.1%, which consisted of an income return of 12.9% and capital
appreciation of 86.2%.
Other highlights of the year were the successful launch of a R2 billion
commercial mortgage backed securitisation programme, designed to refinance
existing bank debt and reduce the cost of funding future property investments,
and the introduction of a substantial BEE partner which now holds 25% of
Vukile"s linked units.
Chief executive, Gerhard van Zyl, said the company"s strong showing was
attributable to a good performance by its underlying properties, the positive
effects from the securitisation programme which had reduced debt cost from 11.2%
to 10.0%, and a R71 million contribution to net profit from MICC.
Vukile owned 98.9% of MICC"s issued linked units at the year-end and invoked
section 440K of the Companies Act to acquire the balance compulsorily. The move
is being opposed by a linked unitholder owning 0.01% of MICC"s issued capital.
"During the past year we made significant progress with our strategic
priorities, improving our debt funding structure, reducing vacancies, embarking
on a major upgrade programme for existing properties and making a number of
attractive new investments," van Zyl said.
"Our priorities for the coming year are to reduce debt costs further through the
full assimilation of MICC and to develop the growth opportunities which have
been created by our BEE credentials. We"ll be maintaining our focus on the
upgrade and expansion of existing properties and we remain on the look-out for
acquisitions which will add value to our portfolio."
Van Zyl said the company could not realistically be expected to sustain
distribution growth at the current 14% level, but was nevertheless likely to
produce another solid performance for the six months to September. While there
was limited scope for further vacancy reductions in its existing portfolio, the
new acquisitions would start contributing and the company would enjoy the full
benefits of the securitisation programme, which could be extended to MICC"s
debt.
He also noted that, while the introduction of the BEE unitholder had reduced
Sanlam"s stake in Vukile to 32%, the company continued to examine ways of
broadening its shareholder base and increasing the liquidity of its linked
units.
For further information call
Gerhard van Zyl, CEO Vukile Property Fund Limited on (011) 288 1002
Issued by du Plessis Associates on behalf of Vukile Property Fund Limited.
dPA contact Helen McKane Tel : +27 11 728 4701, Fax: +27 11 728 2547,
Mobile: 082 330 2034 or e-mail: vukile@dpapr.com
www.vukileprops.co.za
Date: 29/05/2006 12:23:35 PM Produced by the JSE SENS Department
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