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PRA
PRA
Paramount Property Fund Limited - Unaudited Interim Report
PARAMOUNT PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(REG. NO.1945/019928/06)
Share code PRA & ISIN ZAE000028577
UNAUDITED INTERIM REPORT
for the 6 months ended 30 April 2006
DIRECTORS: A D Dalling (Chairman)*, R C Squire - Howe (Managing), J A Bester*,
R R Emslie*, R D Jeffery*, F J Jenkings, B H Kerswill, A A Maresky, A D P
Ovenstone*, G P Phillips*, R S Schur*.
* Non-executive
The consolidated unaudited results of the group for the 6 months ended 30 April
2006 are as follows:
Consolidated Income Statement
Unaudited Unaudited Audited
year ended
April April 2005 October
2006 2005
Notes R"000 R"000 R"000
Revenue 117,664 81,668 205,447
Trading Income 85,574 64,115 131,379
Interest 2,568 473 4,090
received
Revaluation of investment - - 122,863
properties
Amortised lease escalations 7,000 5,796
Amortisation of negative - 609 609
goodwill
Less - depreciation -489 -219 -983
Less - amortisation of -663 -659 -1,318
debenture discount
Less - interest paid on -50,852 -38,702 -76,487
borrowings
Income before 43,138 25,617 185,949
taxation
Taxation 5,095 1,291 -13,645
Income before 48,233 26,908 172,304
distribution
Linked Units in 1 198,862 114,592 116,270
issue ("000)
Weighted Average Linked Units in 173,274 114,592 113,069
issue ("000)
Earnings per linked unit 27.9 23.5 152.4
(cents)
Headline earnings per linked 25.4 22.9 45.3
unit (cents)
Core earnings per linked unit 34.7 27.5 62.9
Distribution per linked unit 30.0 26.0 54.5
Earnings reconciliation
Earnings attributable to -12,142 -3,037 109,440
shareholders
Earnings per share (cents) (7.0) (2.7) 96.8
Earnings and headline earnings per linked unit calculations are
based on the weighted number of linked units ranking for
distribution as reflected above. The reconciliation of earnings per
linked unit to headline earnings per linked unit is:
Earnings attributable to -12,142 -3,037 109,44
shareholders 0
Debenture interest paid 60,375 29,945 62,864
Earnings attributable to 48,233 26,908 172,30
linked unitholders 4
Earnings per linked unit 27.9 23.5 152.4
(cents)
Earnings attributable to 48,233 26,908 172,30
linked unitholders 4
Revaluation surplus - - -
122,86
3
Taxation of revaluation - - 14,601
surplus
Amortised lease escalations -7,000 - -4,796
Taxation of amortised lease 2,030 - 1,681
escalations
Accounting deficit/(surplus) 687 -100 -9,470
on disposal of investment
properties
Taxation on disposal of - 14 1,373
investment properties
Amortisation of negative - -609 -609
goodwill
Headline earnings 43,950 26,213 52,221
Headline earnings per linked 25.4 22.9 45.3
unit (cents)
Abridged Consolidated Balance Sheet
Total combined unit holders funds 1,045,249 485,289 603,434
B debentures 1 23,755 60,340 60,340
Long term 1,092,597 700,979 667,385
borrowings
Deferred 12,746 - 17,225
taxation
Unitholders for distribution 30,500 14,897 18,022
Bank overdraft - 136 -
Current 40,378 11,102 25,582
liabilities
Capital employed 2,245,225 1,272,743 1,391,988
Fixed assets 2,145,787 1,220,784 1,272,681
Goodwill 451 451 451
Deferred - 794 -
taxation
Cash at bank 67,456 - 75,566
Other current 31,531 50,257 43,290
assets
Total employment of capital 2,245,225 1,272,286 1,391,988
Net asset value per linked unit 526 441 519
(cents)
Abridged Consolidated Cash Flow Statement
Net profit for 43,138 25,617 185,949
the period
Adjustments for:
Interest -2,568 -473 -4,090
received
Interest paid 50,852 38,702 76,487
Revaluation of investment - - -122,863
properties
Provisions raised / (reversed) -201 488 -650
Amortisation of negative - -609 -609
goodwill
Amortisation of debenture 663 1,318
discount
(Surplus) / loss on disposal of 804 -100 -9,470
properties
Amortised lease -7,000 -5,796
escalations
Depreciation 489 219 983
Operating profit before working 86,177 63,844 121,259
capital changes
Working capital changes 27,654 -22,985 -4,201
Cash generated from operations 113,831 40,859 117,058
Interest received 2,568 473 4,090
Interest paid - external -50,852 -38,702 -76,487
Interest paid - debentures -47,897 -27,478 -57,272
Taxation paid -283 -4 -5
Net cash inflow from operating 17,367 -24,852 -12,616
activities
Net cash inflows from financing 425,212 86,327 52,733
activities
Net cash inflow from capital 416,710 57,933 66,043
raising activities
Proceeds on disposal of property 40,446 28,425 160,203
Cash outflows from investing - - -196,360
activities 907,845 153,532
-8,110 -5,699 70,003
Cash and cash equivalents at the 75,566 5,563 5,563
beginning of the period
Cash and cash equivalents at the 67,456 -136 75,566
end of the period
Statement of changes in equity
Share Share Non- Accumu Sub A linked Total
capital Prem-ium distri- lated Total units linked
butable Profit unithol-
reserves / ders
(Loss)
Balance 9,208 9,015 40 21,536 39,799 350,249 390,048
at
31/10/200
4
Increase 2,419 2,419 2,419
in share
capital
Net 2,568 2,568 2,568
increase
in share
premium
Issue of 0 97,641 97,641
A debent-
ures
Amort- 0 1,318 1,318
isation
of
debenture
discount
Distribut -62,864 -62,864 -62,864
ion to
unithol-
ders
Surplus 172,304 172,304 172,304
to 31/10/
2005
Balance 11,627 11,583 40 130,976 154,226 449,208 603,434
at 31/10/
2005
Ordinary 8,259 8,259 8,259
shares
issued
Net 73,371 73,371 73,371
increase
in share
premium
Issue 0 371,664 371,664
of A
deben-
tures
Amort- 0 663 663
isation
of
debenture
discount
Distribut -60,375 -60,375 -60,375
ion to
unithol-
ders
Surplus 48,233 48,233 48,233
to
30/4/2006
19,886 84,954 40 118,834 223,714 821,535 1,045,249
Capital Expenditure
At 30 April 2006 the company had entered into contracts for the acquisition of
rental properties totalling R179 700 000. These acquisitions are being funded as
follows:
Issue of new linked units: R89 850 000
Borrowings and existing resources: R89 850 000
Accounting policies
The results to 30 April 2006 have been prepared on a basis consistent with the
accounting policies set out in the last Annual Financial Statements and in
accordance with International Financial Reporting Standards.
Segmental Review
Industr Office Retail Corporat Total
ial e
2006
Revenue 25,448 57,537 32,718 1,961 117,664
Net expenses -4,656 -10,410 -7,165 -10,348 -32,579
Segmental trading 20,792 47,127 25,553 -8,387 85,085
income
2005
Revenue 17,009 39,074 15,292 10,293 81,668
Net expenses -2,556 -6,984 -1,197 -7,035 -17,772
Segmental trading 14,453 32,090 14,095 3,258 63,896
income
12 months to October
2005
Revenue 38,844 84,779 36,141 45,683 205,447
Net expenses -7,712 -17,596 -6,405 -51,825 -83,538
Segmental trading 31,132 67,183 29,736 -6,142 121,909
income
Notes:
1. The B debentures are convertible into linked units in 5 equal tranches
commencing in the financial year after their issue. The converted linked units
participate in all income from 1 November each year. 7 440 769 B debentures
converted into linked units with effect from 1 November 2005.
COMMENTARY
Review of results
The results for the first 6 months have been better than expected. As a
consequence growth in distributions have exceeded the forecast of 8%, contained
in the 2005 Annual Report, with the interest distribution for the second
quarter ended 30 April 2006 amounting to 16 cents per linked unit, making 30
cents per linked unit for the 6 months ended 30 April 2006, compared with 26
cents per linked unit in 2004.
During the period under review the company has securitised a significant portion
of its borrowings. In addition interest rate hedges have been put in place on
approximately 70% of the debt, for periods of up to 6 years. The full benefit of
these transactions will only be realised in future financial periods.
Property Portfolio
During the period under review the properties, acquired at a cost of R849
million, and reported on in the 2005 annual report, were transferred into the
name of the company. In addition, acquisition agreements were signed in respect
of the following properties, for transfer after 30 April 2006:
The Bridge Shopping Centre, Johannesburg R73,8 million
Metro Cash and Carry, Vanderbijlpark R 6,1 million
Metro Cash and Carry, Krugersdorp R14.0 million
Trador, Witbank R24.8 million
Hewlett Packard building, Rivonia R61.0 million
At 30 April 2006 the group owned 62 rental properties with a book value of R2
138 million, which will increase to 67 properties with a book value of R2 318
million once the latest transactions have been concluded.
During the 6 months ended 30 April 2006, 26 263 m2 of vacant space was leased,
and leases in respect of 25 283 m2 were renewed. At 30 April 2006, 3.29% of the
portfolio lettable area was vacant. This is well within the industry norm.
DECLARATION OF DISTRIBUTION
Notice is hereby given that the board of directors has declared a quarterly
interest distribution of 16 cents per linked unit in respect of the quarter
ended 30 April 2006.
The last day to trade cum distribution will be Friday, 30 June 2006. The linked
units will commence trading ex distribution as from Monday, 3 July 2006 and the
record date will be Friday, 7 July 2006. The distribution will be paid on
Monday, 10 July 2006.
Linked units certificates may not be dematerialised or rematerialized between
Monday, 3 July 2006 and Friday, 7 July 2006, both days inclusive.
BY ORDER OF THE BOARD
SPIRE PROPERTY SERVICES (PTY) LTD
SECRETARIES
CAPE TOWN
15 June 2006
Registered office Transfer Secretaries
Tannery Park Computershare Investor
Services 2004 (Pty) Limited
23 Belmont Road 70 Marshall Street
Rondebosch 7700 Johannesburg 2001
P O Box 155 P O Box 61051
Rondebosch 7701 Marshalltown 2107
Date: 15/06/2006 05:24:16 PM Produced by the JSE SENS Department
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