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MDN
MDN
Madison-Unaudited Group interim results for the six months ended 30 June
2006
MADISON PROPERTY FUND MANAGERS HOLDINGS LIMITED
Registration number 2003/021772/06
MADISON PROPERTY FUND MANAGERS LIMITED
Registration number 2005/021874/06
("Madison" or "the group")
Share Code: MDN & ISIN Code: ZAE000080560
- Distributable earnings 15,47 cents per linked unit
- Distributable earnings 15,5% better than forecast
- On track to achieve distribution forecast to 31 December 2006
- R19,3 billion assets under management
UNAUDITED GROUP INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2006
GROUP INCOME STATEMENT
Post Post Pre 6 months
listing listing listing ended
Forecast 30 June
(pro rata) Actual Actual 2006
R"000 R"000 R"000 R"000
Revenue 25 722 24 705 18 300 43 005
Other income 6 186 8 316 1 318 9 634
Total income 31 908 33 021 19 618 52 639
Administration costs (6 641) (5 979) (4 690) (10 669)
Profit from operations 25 267 27 042 14 928 41 970
Interest income 428 2 907 144 3 051
Finance costs (7) (234) (348) (582)
Net operating income 25 688 29 715 14 724 44 439
Fair valuation
adjustments (3 022) (3 022)
Negative goodwill
written off 157 546 154 555 154 555
Amortisation of
intangible assets (15 050) (15 050) (3 095) (18 145)
168 184 169 220 8 607 177 827
Equity accounted income 10 10
Profit before taxation 168 184 169 220 8 617 177 837
Taxation (2) (5) (105 863) (105 868)
Net profit for the
period 168 182 169 215 (97 246) 71 969
Attributable to:
Madison linked
unitholders 168 348 169 300 (99 411) 69 889
Minorities (166) (85) 2 165 2 080
168 182 169 215 (97 246) 71 969
Reconciliation -
headline earnings and
distributable earnings
Net profit for the
period attributable
to Madison linked
unitholders 168 348 169 300 (99 411) 69 889
Amortisation of
intangible assets 15 050 15 050 3 095 18 145
Negative goodwill
written off (157 546) (154 555) (154 555)
Fair valuation
adjustments 3 022 3 022
Minorities share of
amortisation of
intangible assets (408) (408) (408)
Headline earnings 25 444 29 387 (93 294) (63 907)
Distributable earnings
adjustments - - - -
Distributable earnings 25 444 29 387 (93 294) (63 907)
Number of linked units
in issue 190 000 000 190 000 000 190 000 000
Weighted average linked
units in issue 25 054 945
Earnings per linked
unit 88.60 89.11 278.94
Headline earnings per
linked unit 13.39 15.47 (255.07)
Distributable earnings
per linked unit 13.39 15.47
STATEMENT OF CHANGES IN EQUITY
Share
capital and Retained Minority
premium income interest Total
R"000 R"000 R"000 R"000
Balance at
1 January 2006 31 863 1 745 33 608
Net profit for
the period (99 411) 2 165 (97 246)
Transactions with
minorities (908) (908)
Dividends (811 778) (811 778)
Balance at listing (879 326) 3 002 (876 324)
Issue of shares 115 975 115 975
Listing expenses (11 177) (11 177)
Net profit for the
period 169 300 (85) 169 215
Balance at
30 June 2006 104 798 (710 026) 2 917 (602 311)
GROUP BALANCE SHEET
30 June 31 Dec
2006 2005
R"000 R"000
Assets
Non-current assets 346 862 62 045
Property plant and equipment 1 004 425
Intangible assets 289 200 3 095
Goodwill 22 867 13 455
Financial assets 33 791 45 070
Current assets 148 057 16 260
Trade and other receivables 9 927 8 689
Cash and cash equivalents 138 130 7 571
Total assets 494 919 78 305
Equity and liabilities
Capital and reserves (602 311) 33 608
Share capital and reserves (605 228) 31 863
Minority interest 2 917 1 745
Non-current liabilities 977 088 21 190
Debentures 948 100
Interest bearing borrowings 28 381 20 166
Deferred taxation 607 1 024
Current liabilities 120 142 23 507
Payables 16 998 16 862
Taxation 103 144 6 645
Total equity and liabilities 494 919 78 305
GROUP CASH FLOW STATEMENT
30 June 31 Dec
2006 2005
R"000 R"000
Cash flows from operating activities (783 599) 17 219
Cash generated from operations 39 398 65 363
Interest income 3 051 2 752
Finance costs (582) (2 767)
Dividends paid (811 778) (26 000)
Cash paid to minorities (3 902) (5 750)
Taxation (9 786) (16 379)
Cash flows from investing activities (136 029) (9 861)
Cash flows from financing activities 1 050 187 (5 533)
Net increase in cash and cash equivalents 130 559 1 825
Cash and cash equivalents at beginning
of period 7 571 5 746
Cash and cash equivalents at end of period 138 130 7 571
COMMENTS
INTRODUCTION
Madison Property Fund Managers listed on the JSE in the Financial Real
Estate - "Real Estate Holdings and Development Sub - Sector" on 7 June
2006. As South Africa"s largest listed property asset manager Madison
derives its income predominantly from the asset management of three
leading and highly differentiated listed property funds - ApexHi
Properties Limited ("ApexHi"), Hyprop Investments Limited ("Hyprop")
and Redefine Income Fund Limited ("Redefine") - which have a combined
market capitalisation in excess of R14,2 billion and a combined
enterprise value of R19,3 billion. Madison provides investors with the
opportunity to participate in a unique high yielding instrument in the
listed property sector, while creating a foundation for further growth
of the business.
FINANCIAL RESULTS OF MADISON
The Group income statement for the six months ended 30 June 2006 has been
segmented into the periods post and pre listing. The results post
listing take account of net fees from the date of acquisition of the
asset management agreements with ApexHi, Hyprop and Redefine. The
profit forecast as included in the prospectus dated 23 May 2006 has
been pro rated and presented as a basis for comparison to the results
post listing.
Revenue post listing of R24,7 million comprising asset management fees is
R1,0 million below forecast as a result of the significant reduction
in the market capitalisation of the listed property funds under
management during June 2006. Subsequent to 30 June 2006 the listed
property sector has substantially recovered. Other income and interest
income exceeded forecast and administration costs were lower than
forecast. Net operating income post listing of R29,7 million is 15,7%
better than forecast.
Distributable earnings of 15,47 cents per linked unit exceeds the
forecast by 15,5%.
SHARE AND DEBENTURE CAPITAL
Prior to listing, Madison raised R950 million by the issue of 190 million
linked units. Each linked unit comprises one ordinary share of
0,000125 cents in Madison Property Fund Managers Holdings Limited
which is indivisibly linked to one debenture of 499 cents in Madison
Property Fund Managers Limited. The main purpose of the issue was to
fund the acquisition of the management agreements with ApexHi, Hyprop
and Redefine.
CASH RESOURCES
As Madison"s revenue is predominantly fee based cash resources after
expenses will be utilised to pay interest on debentures to linked
unitholders.
At 30 June 2006, cash resources includes R100 million for STC payable on
the dividend declared prior to listing.
DISTRIBUTIONS
Madison will make distributions for the six month periods to 31 December
and 30 June of each financial year. The distributions payable as
interest on debentures will in aggregate be 100% of the net operating
income attributable to Madison.
As stated in the prospectus, no distribution will be made for the period
ended 30 June 2006. The first distribution will be for the post
listing period ending 31 December 2006.
PROSPECTS
ApexHi, Hyprop and Redefine are continuing to source acquisitions which
will enhance their enterprise values and consequently increase the
asset management fees to be earned by Madison.
The Board is confident that the distribution of 33,47 cents per linked
unit forecast for the period ending 31 December 2006, as set out in
the prospectus, will be achieved.
Basis of preparation and accounting policies
The interim financial statements have been prepared in accordance with
International Financial Reporting Standards. The accounting policies
used are consistent with those applied in the most recent audited
annual financial statements. These interim results have not been
audited or reviewed by the group"s auditors.
On behalf of the board
HK Mehta WE Cesman
Chairman Director
19 September 2006
REGISTERED OFFICE
3rd Floor, 2 Arnold Road, Rosebank, 2196
PO Box 55266, Northlands, 2116
TRANSFER SECRETARIES
Computershare Investor Services 2004 (Pty) Limited,
70 Marshall Street, Johannesburg 2001
P O Box 61763, Johannesburg 2000
SPONSOR
Java Capital (Proprietary) Limited
Company secretary
Probity Business Services (Proprietary) Limited
DIRECTORS
HK Mehta, (Chairman) WE Cesman*, MK Khumalo, B Nackan, M Wainer*, G Heron
(alternate)
(*Executive director)
www.madisonproperty.co.za
Date: 19/09/2006 03:29:26 PM Produced by the JSE SENS Department
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