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SYA
SYA
Siyathenga - Audited results for the year ended 30 June 2006
Siyathenga Property Fund Limited
Reg: 2004/00598/06
Share code: SYA
ISIN: ZAE000069530
Audited results for the year ended 30 June 2006
RETAIL THERAPY FOR INVESTORS
Listing undertakings exceeded
Total return since listing 25.4%
Distribution of 47.00 cents per linked unit
Occupancy of 97.47%
Acquired additional properties for R520 million
Investors" distributable earnings (unaudited)
This unaudited 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.
Year ended
R"000 30 June 2006
Revenue
Gross rentals received
113,359
Profit on disposal of investment property
759
Net building costs (24 479)
Administrative costs (6 830)
Interest received 1 501
Interest paid (45 872)
Linked unitholders distributable earnings 38 438
Weighted average linked units since listing 81 071 252
Distributable earnings per linked unit (cents) 47.41
Distribution per linked unit (cents) 47.00
Number of linked units in issue 110 725 104
RECONCILIATION BETWEEN LINKED UNITHOLDERS
DISTRIBUTABLE EARNINGS TO PROFIT FOR THE YEAR
Linked unitholders distributable earnings 38 438
Revaluation of investment properties and lease 112 783
smoothing
Goodwill written-off (49 982)
Amortisation of debenture premium 1 563
Movement in fair value in interest rate swaps (1 806)
Debenture interest distributed to unitholders (38 601)
Taxation (31 934)
Profit for the year 30 461
Return to linked unitholders (unaudited)
Year ended
30 June 2006
Share price at 5 August 2005 (cents) 500
Share price at 30 June 2006 (cents) 580
Capital return (cents) 80
Distributions for the year (cents) 47
Total return (cents) 127
Total return since listing (%) 25.4
Highest price since listing (cents) 800
Lowest price since listing (cents) 500
Condensed consolidated income statement
Year ended Period ended
30 June 2006 30 June 2005
R"000 R"000
Revenue 118 860 5 516
Straight-line operating lease 5 150 314
adjustment
Net building costs (24 479) (581)
Cost of trading property disposed (4 742) -
of during the year
Administrative costs (6 830) (1 724)
Profit from operations 87 959 3 525
Net revaluation of investment 107 633 -
properties
Attributable to straight-line
operating
lease adjustment (5 150) -
Revaluation of investment 112 783 -
properties
Profit before financing costs and 195 592 3 525
taxation
Interest received 1 501 -
Interest paid (45 872) (3 052)
Movement in the fair value of (1 806) (2 080)
interest rate swaps
Goodwill written-off (49 982) -
Amortisation of debenture premium 1 563 32
Debenture interest distributed to (38 601) -
unitholders
Profit/(loss) before taxation 62 395 (1 575)
Taxation (31 934) 466
Profit/(loss) for the year/period 30 461 (1 109)
Profit/ Profit/
(loss) (loss)
Reconciliation between before tax Tax after tax
earnings
and headline earnings R"000 R"000 R"000
Year ended 2006
Profit before taxation 62 395 (31 934) 30 461
Adjustments
- Net revaluation of
investment
properties (107 633) 31 213 (76 420)
Goodwill written-off 49 982 - 49 982
Headline earnings 4 744 (721) 4 023
Period ended 2005
Loss before taxation (1 575) 466 (1 109)
Headline loss (1 575) 466 (1 109)
Earnings/(loss) per linked 90.80 (58.68)
unit (cents)
Headline earnings/(loss) 56.04 (58.68)
per linked unit (cents)
Diluted earnings/(loss) 90.80 (58.68)
per linked unit (cents)
Net asset value per linked 602 496
unit (cents)
Earnings/(loss) per share 40.05 (58.68)
(cents)
Diluted earnings/(loss) 40.05 (58.68)
per share (cents)
Headline earnings/(loss) 5.29 (58.68)
per share (cents)
Net asset value per share 1 -
(cents)
Consolidated statement of changes in equity
Share Share Retained
Number capital premium earnings Total
of shares R"000 R"000 R"000 R"000
Balance at 27 1 000 1 - - 1
February 2004
Restated for 10 000 - - - -
subdivision
Arising on
issue of Units
during the 29 990 3 - - 3
period 000
Loss for the - - - (1 109) (1 109)
period
Transfer of
amortised
debenture - - 32 (32) -
premium
Balance at 30 30 000 3 32 (1 141) (1 106)
June 2005 000
Arising on
issue of Units
during the 80 725 8 - - 8
year 104
Profit for the - - - 30 461 30 461
year
Transfer of
amortised
debenture - - 1 563 (1 563) -
premium
Balance at 30 110 725 11 1 595 27 757 29 363
June 2006 104
Segmental information
Primary Corporate
segment
R"000 Retail Office Other unallocated Total
2006
Revenue 99 797 18 712 5 501 - 124 010
Profit from 81 418 12 612 (6 071) - 87 959
operations
Segment
results
Profit 157 558 44 105 759 (140 027) 62 395
before tax
Segmental 1 272 121 194 372 4 279 31 364 1 502 136
Assets
Segmental - - - 1 472 773 1 472 773
Liabilities
2005
Revenue 4 548 1 282 - - 5 830
Profit from 4 280 969 - (1 724) 3 525
operations
Segment
results
Loss before 4 280 969 - (6 824) (1 575)
tax
Segmental 530 095 116 000 - 8 702 654 797
Assets
Segmental - - - 655 903 655 903
Liabilities
Revenue and expenses that are directly attributable to a segment are
allocated to those segments. Items not directly attributable to a segment are
allocated to the corporate unallocated segment.
Condensed consolidated balance sheet
As at As at
30 June 2006 30 June 2005
R"000 R"000
ASSETS
Non-current assets
Investment properties 1 466 419 646 095
Equipment, furniture and fittings 258 21
Loans to share trust participants 11 224 -
Deferred tax - 514
Current assets
Trading property 4 279 -
Trade and other receivables 11 678 2 270
Cash and cash equivalents 8 278 5 897
Total assets 1 502 136 654 797
EQUITY
Capital and reserves
Share capital and premium 1 606 35
Retained earnings 27 757 (1 141)
Total equity 29 363 (1 106)
LIABILITIES
Debenture debt and premium 637 038 149 879
Linked unitholders interest 666 401 148 773
Other non-current liabilities
Interest-bearing borrowings 732 572 384 960
Derivative financial instruments 3 886 2 080
Deferred tax liability 31 071 -
767 529 387 040
Current liabilities
Trade and other payables 20 964 3 297
Loan from related party 16 943 115 639
Current income tax liabilities 397 48
Linked unitholders for distribution 29 902 -
68 206 118 984
Total equity and liabilities 1 502 136 654 797
Condensed consolidated cash flow statement
Year ended Period ended
30 June 2006 30 Jun 2005
R"000 R"000
Cash flow from operating activities
Cash generated from operations 40 346 4 553
Interest received 1 501 -
Finance costs (45 872) (3 052)
Distribution paid to unitholders (8 700) -
Net cash (outflow)/inflow from
operating activities (12 725) 1 501
Cash flow from investing activities
Additions to Investment properties (716 561) (646 095)
Additions to equipment furniture and (254) (22)
fittings
Proceeds from disposal of investment 5 501 -
properties
Loans advanced to the Siyathenga Unit
Purchase
Trust participants (11 224) -
Net cash outflow from investing activities (722 538) (646 117)
Cash flow from financing activities
Issue of linked units net of transaction 488 729 149 914
costs
Long term borrowings raised 347 611 384 960
Related party loan (decrease)/increase (98 696) 115 639
Net cash inflow from financing activities 737 644 650 513
Net increase in cash and cash equivalents 2 381 5 897
Cash and cash equivalents at
the beginning of the period 5 897 -
Cash and cash equivalents at
the end of the year/ period 8 278 5 897
Notes to financial information
1. Basis of preparation
The audited financial report has been prepared on the historical cost basis
as modified by the revaluation of available-for-sale financial assets,
financial liabilities through profit or loss and investment properties which
are carried at fair value. These are in accordance with International
Financial Reporting Standards ("IFRS"), IAS 34 - Interim Financial Reporting,
and the requirements of the South African Companies Act 1973 as amended.
Accounting policies applied are similar to those applied in the previous
reporting period.
IFRS 1 - First-time adoption of IFRS has been applied in the preparation of
the financial report. There was no impact on the income statement, balance
sheet and cash flow statement for the prior period due to the adoption of
IFRS.
2. Related party transactions
Related party transactions concluded during the reporting period were
concluded at arm"s length terms as would be negotiated between unrelated
willing parties.
3. Contingent liabilities
Guarantees and sureties in respect of the subsidiaries amount to R733 million
in respect of the mortgage facility granted to the financial institutions.
4. Capital commitments
The Directors have approved two capital expenditure projects. The first being
a refurbishment to the Boardwalk amounting to R40 million. Loan financing has
been concluded for the refurbishment. The second project includes the upgrade
of The Crescent amounting to R7 million, this will be funded through existing
facilities.
5. Subsequent events
5.1 Interest rate derivatives
Management has entered into two further hedging instruments to further reduce
the uncertainty of interest rate fluctuations thereby ensuring the
sustainability of distribution growth
Details of the further two hedging instruments are as follows:
(i) Interest rate swap agreement
A three year interest rate swap agreement was entered into with ABSA Bank
Limited on 20 July 2006. The notional amount is R100 million with a fixed
rate of 8.72%.
(ii) Interest rate cap
The transaction was entered into with FirstRand Bank Limited, acting through
its Rand Merchant Bank division, on 20 July 2006 and extends for two years.
The notional amount is R170 million with the cap rate set at 9.25%.
5.2 Disposal of Edgars Klerksdorp
Edgars Klerksdorp was successfully auctioned for a consideration of R6.4
million on 27 July 2006.
This announcement has been prepared in compliance with the Listings
Requirements of the JSE Limited.
The consolidated financial statements for the year have been audited by
Deloitte & Touche and their accompanying unqualified report as well as their
unqualified audit report on this set of financial information is available
for inspection at the Company"s registered office.
Highlights
Following its successful listing on the JSE Limited, in the real estate
sector on 5 August 2005, Siyathenga announced a total distribution for the
eleven months ended 30 June 2006 of 47 cents. This equates to an annualised
distribution of 52 cents which exceeded the distribution forecast of 51.25
cents. All of the properties in the portfolio contributed to this pleasing
performance and it is anticipated that this trend will continue into the
future.
It was particularly pleasing to acquire a portfolio of six high quality
properties from the Transnet Retirement Funds Property Trust. From a
financial perspective, these properties are performing above expectation and
increased the value of Siyathenga"s property portfolio by R520 million.
Financial performance
Fundamentally sound contributions from all of the property assets meant that
Siyathenga was able to exceed its listing forecasted distribution by 1.5
percent. Investors" distributable earnings since listing to 30 June 2006
amounted to R38.4 million (47.41 cents per linked unit).
The distribution declared by the Company for the corresponding period
amounted to R38.1 million (47.00 cents per linked unit).
Prospects
The existing portfolio has performed well during the period under review and
should continue to show strong earnings growth.
The refurbishment and extension of the Boardwalk Shopping Centre is an
exciting project that, when complete, will further strengthen the quality of
Siyathenga"s physical assets, as well as increasing the size of Siyathenga"s
asset base in excess of R400 million.
Siyathenga is dedicated to providing linked unitholders with sustainable,
increasing distributions and to this end it has established a very solid
earnings platform and is well positioned to achieve superior growth in future
distributions.
Distribution declaration
Notice was given of the declaration of the final distribution of 27 cents per
linked unit for the year ended 30 June 2006 in an announcement dated 28 June
2006.
Holders of Siyathenga linked units are referred to the announcement dated 22
February 2006 in which the interim distribution of 20 cents per linked unit,
for the period 5 August 2005 to 31 December 2005, was declared. The aggregate
distribution for the financial period ending 30 June 2006 is therefore 47
cents per linked unit. This aggregate distribution exceeds the aggregate
distribution of 46.34 cents per linked unit, anticipated in the prospectus
for the listing of Siyathenga on 5 August 2005.
Event timetable
Event Date
a.Last date to trade cum Friday, 29 September 2006
distribution
b.Linked units trade ex Monday, 2 October 2006
distribution
c.Record date for unitholders to Friday, 6 October 2006
participate in the distribution
d.Payment of distribution to Monday, 9 October 2006
unitholders
e.Linked unit certificate may not Monday, 2 October 2006
be
dematerialised or rematerialised Friday, 6 October 2006
between (both days inclusive)
f. Annual general meeting Friday, 13 October 2006 at 10:00
On behalf of the Board
AJWL Richards APF von Bulow
Chairman Managing Director
23 August 2006
Siyathenga Property Fund Limited
Directorate: AJWL Richards (Chairman), APF von Bulow (MD), B Frigenti
(Italian), JB Gibbon, CM Hutchison, EPM Moses, LX Mtumtum. Secretary: MD
Bosman
Reg: 2004/00598/06
Share code: SYA
ISIN: 000069530
Incorporated in the Republic of South Africa
2nd Floor, Pangbourne House, 382 Jan Smuts Avenue, Craighall, 2196
T: +27 11 889 8740,
F: +27 11 787 9933
PO Box 781706, Sandton, 2146
Transfer secretaries, Computershare Investor Services 2004 (Proprietary)
Limited, Ground Floor, 70 Marshall Street, Johannesburg (P O Box 61051,
Marshalltown, 2107),
nblane@siyathenga.co.za
www.siyathenga.co.za
Date: 24/08/2006 02:42:15 PM Produced by the JSE SENS Department
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