| Thu 2 Nov 2006, 15:39 | | Grayprop - Audited results for the year ended 30 S |
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Grayprop - Audited results for the year ended 30 September 2006 and
Distribution announcement
Allan Gray Property Trust
Short name: GRAYPROP
Share code: GRY & ISIN: ZAE000013165
Audited results for the year ended 30 September 2006
The directors of Allan Gray Property Trust Management Limited, the manager of
Allan Gray Property Trust ("Grayprop"), submit their report on the audited
results of Grayprop for the year ended 30 September 2006. These abridged
financial statements have been extracted from the audited financial
statements on which KPMG Inc. have issued an unmodified audit opinion and
which are available for inspection at the registered office.
INCOME STATEMENT 2006 2005
R"000 R"000
Income 539 512 542 213
Contractual rental income 545 248 507 453
Straight-line lease adjustment (5 736) 34 760
Expenses (154 665) (158 073)
Administrative expenses (31 394) (24 880)
Property operating expenses (123 271) (133 193)
Operating profit 384 847 384 140
Net finance costs (2 126) (723)
Interest received 21 476 20 035
Interest paid (23 602) (20 758)
Profit on disposal of investment
properties 15 714 16 247
Fair value adjustments to investment
properties 1 026 133 1 144 116
Profit for the year 1 424 568 1 543 780
Basic earnings per unit (cents) 143.0 155.0
Headline earnings and distribution
income reconciliation
Profit for the year 1 424 568 1 543 780
Less: profit on disposal of investment
properties (15 714) (16 247)
Less: fair value adjustments to investment
properties (1 026 133) (1 144 116)
Headline earnings 382 721 383 417
Less: straight-line lease adjustment 5 736 (34 760)
Less: retained earnings - (42)
Distribution income 388 457 348 615
Headline earnings per unit (cents) 38.4 38.5
Distribution per unit (cents) 39.0 35.0
Interim distribution per unit (cents) 19.3 17.4
Final distribution per unit (cents) 19.7 17.6
Units in issue 996 043 081 996 043 081
CASH FLOW STATEMENT 2006 2005
R"000 R"000
Cash effects from operating activities
Profit for the year 1 424 568 1 543 780
Adjustments for:
Straight-line lease adjustment 5 736 (34 760)
Interest received (21 476) (20 035)
Interest paid 23 602 20 758
Profit on disposal of investment properties (15 714) (16 247)
Fair value adjustments to investment
properties (1 026 133) (1 144 116)
390 583 349 380
Trade and other receivables reduced 2 411 5 200
Trade and other payables raised 7 596 17 105
Cash generated from the operations 400 590 371 685
Interest received 21 476 20 035
Interest paid (23 602) (20 758)
Income distributions (367 541) (338 654)
Cash flows from operating activities 30 923 32 308
Cash effects from investing activities
Additions to investment properties (160 502) (104 140)
Proceeds from disposal of investment
properties 76 523 61 031
(83 979) (43 109)
Cash effects from financing activities
Long-term loan raised 123 000 37 443
Long-term loan repaid (53 000) (23 000)
70 000 14 443
Net increase in cash and cash equivalents 16 944 3 642
Cash and cash equivalents at 1 October 237 510 233 868
Cash and cash equivalents at
30 September 254 454 237 510
BALANCE SHEET 2006 2005
R"000 R"000
ASSETS
Property assets 5 491 821 4 371 731
Investment properties 5 281 738 4 153 081
Straight-line lease accrual 210 083 218 650
Current assets 279 015 264 482
Trade and other receivables 24 561 26 972
Cash and cash equivalents 254 454 237 510
Total assets 5 770 836 4 636 213
UNITHOLDERS" FUNDS
AND LIABILITIES
Unitholders" funds 5 198 076 4 161 965
Capital of the fund 1 933 354 1 933 354
Capital reserve 470 243 421 754
Revaluation reserve 2 584 336 1 588 147
Retained earnings 210 143 218 710
Non-current liabilities
Interest-bearing liability 299 000 229 000
Current liabilities 273 760 245 248
Trade and other payables 77 540 69 944
Unitholders for distribution 196 220 175 304
Total unitholders" funds
and liabilities 5 770 836 4 636 213
STATEMENT OF CHANGES IN UNITHOLDERS" FUNDS
Re- Total
Capital Capital valuation Retained unitholders"
(R"000) of the fund reserve reserve earnings funds
Balance as at
1 October 2004 1 933 354 400 265 449 273 183 908 2 966 800
Profit for the year 1 543 780 1 543 780
Transfer to
capital reserve 21 489 (5 242) (16 247) -
Transfer to
revaluation reserve 1 144 116 1 144 116) -
Income distributions (348 615) (348 615)
Balance at
30 September 200 1 933 354 421 754 1 588 147 218 710 4 161 965
Profit for the year 1 424 568 1 424 568
Transfer to
capital reserve 48 489 (29 944) (18 545) -
Transfer to
revaluation reserve 1 026 133 (1 026 133) -
Income distributions (388 457) (388 457)
Balance at
30 September 2006 1 933 354 470 243 2 584 336 210 143 5 198 076
COMMENTARY
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The annual results have been prepared in accordance with International
Financial Reporting Standards (IFRS), its interpretations adopted by the
International Accounting Standards Board and the requirements of the
Collective Investment Schemes Control Act. This is the first set of financial
statements prepared in accordance with IFRS. No adjustments have arisen from
the conversion to IFRS. The accounting policies are consistent in all
material respects with those applied in prior years.
2. DISTRIBUTION PER UNIT
Allan Gray Property Trust"s net distributable income for the financial year
amounted to 39 cents per unit, 11.4 percent greater than last year.
3. CHANGES TO PORTFOLIO
During the year, the following sales were concluded:
Net 2005
Property selling price valuation Profit
(Rm) (Rm) %
Saffer 24 000 17 798 35
Euro Park 11 500 8 456 36
Verona Industrial Park 7 424 6 415 16
Chamdor Factory 6 000 4 849 24
Eastsands Industrial Park 5 563 4 511 23
Prairie Industrial Park 4 534 3 727 22
Saxon Industrial Park 4 500 4 309 4
Westar Place 3 000 2 454 22
Westsands Industrial Park 2 658 2 179 22
Crescent Place 2 500 1 866 34
Thermo House 2 305 1 800 28
Custom Place 1 300 1 237 5
Rally Place 1 239 1 208 3
76 523 60 809 26
4. MAJOR CAPITAL PROJECTS
Significant capital projects and planned projects are:
N1 City Mall (58% share)
This project is practically complete at a final cost of R117 million with an
initial yield of 10 percent. Sales in September were 30 percent higher than
the previous year and 47 percent more people visited the centre.
Centurion Mall (75% share)
Work has commenced on the R268 million extensions and refurbishment of the
Mall and the construction of additional parking. The expected completion date
is September 2007 and the project is expected to generate an initial return
of 9 percent.
The Boulders Shopping Centre
This project has been shelved for the time being while a revised tenant mix
is being considered.
The Brightwater Commons
This project is now complete. Letting is progressing on the line shops but
disappointingly not with national tenants. Negotiations with various
prospective national tenants are however ongoing. The complex was
independently valued at R116.4 million and is expected to earn R11.7 million
in the new year.
Benmore Gardens Shopping Centre
Alterations have commenced to the centre to improve the retail mix, parking
and circulation as well as to provide a new store for Pick "n Pay, a
relocated Dischem and the introduction of a Woolworths Food store, Toyzone
and Baby City.
The net total cost to Grayprop is R60 million and it is anticipated to have
an initial yield of 8.5 percent. Due to the nature of the project, it will
take two years to complete, which will have a negative impact on the earnings
generated by the centre during that period. Given the central location of
this property and the pace of residential developments in the vicinity, we
believe the alterations position the Centre for superior earnings growth.
Douglas Roberts Centre
The construction of a parking garage and the refurbishment of the office
tower at a total cost of R155 million continues, with completion due in
October 2007.
Murray and Roberts has entered into a new 10-year lease from completion. The
initial rental is based on an 8.5 percent yield on R215 million with 7
percent per annum escalations.
5. CONTRIBUTION TO 2006 % of 2005 % of
DISTRIBUTION Rm total Rm total
Retail 297 76 263 75
Office blocks 61 16 48 14
Industrial 45 12 46 13
Specialised 20 5 19 5
Corporate (35) (9) (27) (7)
Total 388 100 349 100
On a like-for-like basis, earnings in the various sectors grew over the past
year as follows (%):
Retail Office Industrial Specialised Corporate
13 22 5 7 (33)
The increase in corporate expenses stems largely from the higher service fee
which is itself dependent upon the higher unit price. Interest paid on the
higher level of borrowings in the past year also adds to the increase in this
expense.
6. VACANCY LEVELS
Vacancy levels in terms of rentable area at 30 September were as follows:
2006 2005
Sector % %
Retail 8 5
Office blocks 5 9
Industrial 11 9
Specialised - -
Total 8 6
By value, the vacancies equated to 7 percent of potential rental income
compared with 5 percent at half year.
In the retail sector 97 percent of the vacancies were contained in the
following properties:
- The Brightwater Commons, where 14 000 square metres is vacant following the
completion of the final phase.
- The Boulders Shopping Centre, where the vacancies are concentrated in the
lower level.
- Centurion Mall, where the refurbishment and extensions to the entertainment
offering is taking place. The bulk of these are however let with occupation
to be taken before the end of 2006.
- Benmore Gardens, where the redevelopment is taking place.
In the office sector, significant vacancies by area and value remain at
Grayston Ridge where no improvement is envisaged in the short-term.
In the industrial sector significant vacancies exist in the following
buildings:
- Degussa, in Midrand. The office component of 1 519 square metres is vacant.
The warehouse has been let on a temporary basis.
- Nashua, in Midrand. This 7 541 square metre property has been vacant since
June 2006.
- Metcash, in Epping, Cape Town. This 5 854 square metre building was vacated
in August 2006. It has been let on a short-term basis from November 2006.
7. PORTFOLIO VALUATIONS
The composition of Allan Gray Property Trust"s portfolio, as valued by the
independent valuer, Rode and Associates CC, as at 30 September 2006, is as
follows:
Value Cents/ Forward % of
Sector (Rm) unit EY (%) portfolio
2006 2005
Retail 4 169 418 8.3 76 76
Office blocks 631 63 10.0 12 10
Industrial 455 46 10.0 8 9
Specialised 237 24 9.2 4 5
Total property 5 492 551 8.7 100 100
Long-term borrowings (299) (30)
Net current assets 5 1
5 198 522
The net asset value is 24.9 percent higher than that of last year. The market
rating of the property portfolio in terms of the anticipated forward earnings
yield has improved from 9.5 percent to 8.7 percent over the past year.
8. PROSPECTS
The Board anticipates that distributions per unit for the year ending 30
September 2007 will increase between 8 percent and 12 percent compared with
the year ended 30 September 2006. This forecast has not been reviewed or
reported on by Allan Gray Property Trust"s auditors.
9. DISTRIBUTION ANNOUNCEMENT
Notice is hereby given of distribution no. 47 of 19.7 cents per unit for the
six months ended 30 September 2006.
The last date to trade cum the distribution will be Friday, 17 November 2006.
The units of Grayprop will commence trading ex-distribution on Monday, 20
November 2006 and the record date will be Friday, 24 November 2006.
The distribution will be paid on Monday, 27 November 2006.
Unit certificates may not be dematerialised or rematerialised between Monday,
20 November 2006 and Friday, 24 November 2006, both dates inclusive.
BY ORDER OF THE BOARD
Allan Gray Property Trust Management Limited
(Reg No 1983/003324/06)
2 November 2006
Directors: WJC Mitchell (Chairman),
JD Rainier (Managing), GW Fury (alternate), DD Govender, WM Kirchmann,
SP McCoy, DM Nurek, VA Christian, S Shaw-Taylor
Secretary and registered office
Broll Property Group (Pty) Ltd
Broll House, 27 Fricker Road, Illovo
Johannesburg, 2196
(PO Box 1455, Saxonwold, 2132)
Transfer secretaries
Computershare Investor Services 2004 (Pty) Ltd
70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Short name: GRAYPROP
Share code: GRY ISIN: ZAE000013165
Sponsor: Standard Bank
E-mail: info@allangray.co.za
Website: www.allangray.co.za
Date: 02/11/2006 03:39:26 PM Produced by the JSE SENS Department
