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Ascension Properties Ltd HY 2013 results

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Ascension Properties Ltd HY 2013 results

Ascension Properties Ltd HY 2013 results

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 Ascension Properties Ltd HY 2013 results Ascension Properties Ltd HY 2013 results Document Transcript

  • Condensed unaudited consolidated interim financial statements for the 6 months ended 31 December 2012 Ascension Properties Limited (formerly Grey Jade Trade and Invest 85 (Proprietary) Limited) (Incorporated in the Republic of South Africa) (Registration number: 2006/026141/06) (A-linked units: JSE Code: AIA ISIN: ZAE000161881) (B-linked units: JSE Code: AIB ISIN: ZAE000161899) (“Ascension” or ‘the company” or ‘the group”) Directors’ commentary Consolidated statement of cash flows for the 6 months ended 31 December 2012 Introduction Ascension is a black managed and substantially black owned property loan stock company that listed on the JSE on 11 June 2012. The company is a property income fund focusing on centrally located commercial office buildings in South Africa with a strong focus towards government and other empowerment sensitive tenants. Unaudited Audited Unaudited 31-Dec-12 30-Jun-12 31-Dec-11 6 months 6 months 6 months R’000 R’000 R’000 A direct comparison to the previous reporting period, being the results for the 6 months ended 31 December 2011 (prior to listing) is not as meaningful as a comparison to the forecast results as previously published by the company on 29 June 2012. Cash flow from operating activities Cash generated from operations Finance income Finance costs Distributions to linked unitholders 32 487 4 070 (7 847) (40 401) 15 932 983 (10 236) - Distributions Net cash flow from operating activities (11 691) 6 679 The company achieved distributions of 19 cents per A-linked unit and 8.45 cents per B-linked unit for the 6 months ended 31 December 2012. These results are in line with our expectations and forecast and we remain on track to meet our forecast distributions for the full year ending 30 June 2013. Cash flow from investing activities Purchase of investment properties and cost of improvements (1 543 651) (154 296) (109 286) The company paid a special distribution of 17.91 cents per A-linked unit and 9.65 cents per B-linked unit on 3 December 2012. This included 2.08 cents per A-linked unit for the period from listing on 11 June 2012 to 30 June 2012 and 2.63 per B-linked unit from pre-listing to 30 June 2012. As set out in note 6 below the company will pay a further interim distribution of 3.17 cents per A-linked unit and 1.43 cents per B-linked unit on 4 March 2013, taking the distributions for the 6 month period under review to 19 cents per A-linked unit and 8.45 cents per B-linked unit. Net cash outflow from investing activities (1 543 651) (154 296) (109 286) Cash generated form financing activities Proceeds from the issue of linked units 594 448 Net proceeds from/ (repayment of) interest bearing loans 763 452 Proceeds from shareholder loans - 359 226 (35 347) - 16 046 12 504 Assuming current market prices as the exit prices for A and B-linked units, and taking into account distributions to 4 March 2013, Ascension unitholders have achieved total annualised returns since listing of 25% on the A-linked units and 41% on the B-linked units. Net cash inflow from financing activities Net change in cash and cash equivalents for the period Cash and cash equivalents at the beginning of the period The company has a dual linked unit structure consisting of A-linked units and B-linked units. The A-linked unit has a preferential right to distributions that escalate with 5% per annum for the first five years and the lower of 5% and inflation thereafter. The B-linked units are entitled to the residual distributable income after the distribution on the A-linked units has been paid. Cash and cash equivalents at the end of the period Property acquisitions During the 6 months ended December 2012 the company completed the transfer of 16 acquisition properties valued at R1,5 billion, including 6 properties acquired from Capital Property Fund with effect from 1 December 2012 valued at R989 million. The Capital portfolio is classified as 59% A-grade and 41% B-grade. The Swiss House acquisition has been completed at R66 million and transfer is underway. Property re-developments Total gross-lettable-area (“GLA”) at 31 December 2012 was 197 173m² of which 3 properties totalling 25 048m² was under development for government tenants. These redevelopments are expected to be completed during March 2013. Vacancies At 31 December 2012 vacancies were 8.8% of total GLA, compared to 6,6% as at 30 June 2012. Borrowings The company has total interest bearing borrowings of R945 million at a blended average rate of 7.69%. Of this 51% has been fixed for 3 years at 7.42% to December 2015 with the remainder at floating interest rates. Prospects The focus in the first quarter of 2013 will be on bedding down recent acquisitions.The acquisition pipeline remains healthy and Ascension remains on track to deliver on its portfolio growth strategy. The board is confident of delivering in line with its full-year forecast of 38 cents per A-linked unit and 18.71 cents per B-linked unit. All assumptions, notes, explanatory statements and guidance to the forecasts are as stated in the announcement released on SENS on 29 June 2012 and in the pre-listing statement issued on 31 May 2012 remain unchanged. The aforegoing forecast statements and forecasts underlying such statements are the responsibility of the board of Ascension and have not been reviewed or reported on by the company’s external auditors. Consolidated statement of comprehensive income for the 6 months ended 31 December 2012 Revenue Contractual rentals and tenant recoveries Straight-line of lease income adjustment Property operating expenses Unaudited Audited Unaudited 31-Dec-12 30-Jun-12 31-Dec-11 6 months 6 months 6 months R’000 R’000 R’000 77 891 40 054 30 988 71 849 34 738 6 042 (22 261) 5 316 (14 744) 3 053 (12 908) Net property and related income Sundry income Asset management fees Overhead expenses 55 630 - (1 656) (1 556) 25 310 83 (1 619) (986) 18 080 3 (2 507) Operating profit Fair value adjustments - due to straight-lining of leases - due to amortisation of upfront lease costs - due to change in fair value of investment properties Listing expenses Participation right Finance income Interest received Interest on linked units issued cum distribution Amortisation of debenture discount Finance cost Amortisation of bond raising fees Interest on non-current borrowings 52 418 (6 042) (6 042) 22 788 51 053 (5 316) 15 576 44 152 (5 270) - (396) - - - 4 070 2 200 56 765 (11 395) - 984 984 1 870 - 49 422 (5 458) 197 197 - (353) (38) (8 531) (10 199) (9 279) (684) (111) (7 847) (10 088) (9 279) Net profit before debenture interest Debenture interest Interest on A-debentures Interest on B-debentures 41 562 (42 599) (18 291) (24 308) 53 193 (8 368) (1 383) (6 985) 45 188 - Net (loss)/ profit before tax for the period Tax expense Deferred taxation (1 037) 760 760 44 825 (14 424) (14 424) 45 188 (5 538) (5 538) (Loss)/ Profit for the period Adjusted for: Debenture interest (277) 30 401 39 650 598 530 Unaudited Audited Unaudited 31-Dec-12 30-Jun-12 31-Dec-11 6 months 6 months 6 months R’000 R’000 R’000 (277) 30 401 39 650 8 368 - 42 322 38 769 39 650 5 282 (36 629) (43 884) Headline earnings/ (loss) Adjusted for: Listing expenses Straight-line of lease income adjustment Amortisation of bond raising fees 47 957 2 178 (4 234) - (6 042) 684 11 395 (5 316) 111 (3 053) - 42 599 (42 599) (18 291) (24 308) 8 368 (8 368) (1 383) (6 985) (7 287) - Earnings not distributed - Basic and fully diluted (loss)/ earnings per share (cents) Basic and fully diluted headline earnings/ (loss) per share (cents) Basic and fully diluted earnings per A-linked unit (cents) Basic and fully diluted earnings per B-linked unit (cents) Headline- and fully diluted headline earnings per A-linked unit (cents) Headline- and fully diluted headline earnings per B-linked unit (cents) 353 38 - - (0.08) 83.81 Note 1 1.54 23.49 8.88 (17.07) 102.84 107.89 Note 1 - 25.10 1.96 - 10.49 7.01 - 19.00 8.45 2.08 2.63 - 176 931 082 66 500 000 340 473 165 265 387 231 - Distribution per A- and B- linked units Distribution per A-linked unit (cents) Distribution per B-linked unit (cents) Number of A-linked units in issue Number of B-linked units in issue Weighted average number of A-linked units in issue Weighted average number of B-linked units in issue Note1: 77 607 889 7 267 760 - 271 370 489 29 004 069 - There were no linked units in issue in the period to 31 December 2011 but 100 B-ordinary shares. For the six months to 31 December 2011 the basic and fully diluted earnings per share was R396 500 and the basic and fully diluted headline loss per share was R42 340. Notes 1. Basis of preparation and accounting policies The unaudited condensed consolidated interim financial statements of Ascension have been prepared in accordance with International Financial Reporting Standards (“IFRS”) including IAS 34: Interim Financial Reporting, the AC500 standards as issued by the Accounting Practices Board or its successor, the South African Companies Act, 2008 and in compliance with the Listings Requirements of the JSE Limited. This report has been compiled under the supervision of Henry Dednam CA(SA), the financial director of Ascension. The accounting policies are consistent with those applied in the prior periods. Grant Thornton, the company’s external auditor, has not reviewed or audited the financial information set out in this report. 2. Non current borrowings Borrowings expiry profile R’000 December 2013 December 2014 December 2015 11 966 933 777 Total borrowings 945 743 3. Trade and other receivables R’000 R’000 31-Dec-12 30-Jun-12 Trade receivables Amounts due on acquistion adjustment accounts Government tenants Non-government tenants Deposits Sundry debtors and prepayments VAT refund receivable 16 781 9 651 2 316 4 814 1 127 3 416 3 327 3 795 3 009 786 555 3 794 2 083 24 651 10 227 4. Property details 4.1 Lease expiry profile Based on GLA Based on GLA including development property on completion 1 851 170 518 277 339 988 25 175 956 18 827 396 13 512 - Fair value of investment properties Properties under development Property, plant and equipment 1 877 301 264 767 86 537 500 60 917 113 353 500 34 608 140 Current assets 33 070 213 451 36 511 Trade and other receivables 3 Other current assets Cash and cash equivalents Investment property held for sale 24 651 3 526 4 893 8 000 10 227 889 202 335 8 000 10 438 26 073 8 000 Total assets 2 183 224 819 981 432 759 Equity and liabilities Equity 325 332 208 363 71 512 Stated capital Retained income Non-current liabilities Debentures 223 697 101 635 106 451 101 912 71 512 858 380 380 823 - Linked unitholders’ interest Other non-current liabilities Interest bearing liabilities 2 Deferred taxation 1 183 712 964 487 933 754 30 733 589 186 213 760 182 268 31 492 Vacant December 2013 December 2014 December 2015 December 2016 December 2017 > December 2018 388 248 71 512 17 068 17 068 Current liabilities 35 025 17 035 - 11 989 12 470 10 566 - 23 8 644 8 368 117 010 217 638 9 531 - Total equity and liabilities 2 183 224 819 981 432 759 NAV per A-linked unit (cents) NAV per B-linked unit (cents) NAV per A-linked unit (excluding deferred taxation) (cents) NAV per B-linked unit (excluding deferred taxation) (cents) 423.4 130.8 396.6 125.3 N/A N/A 423.4 396.6 N/A 139.8 137.1 N/A Consolidated statement of changes in equity for the 6 months ended 31 December 2012 Stated capital Retained income Total equity - 106 451 71 511 - 71 511 106 451 - 30 401 30 401 Balance at 30 June 2012 (audited) Issue of linked units Total comprehensive income for the period 106 451 117 246 101 912 - 208 363 117 246 Balance at 31 December 2012 (unaudited) 223 697 - (277) 101 635 Reconciliation of distributions per unit (cents) (277) 325 332 8.8% 19.6% 24.6% 22.5% 1.6% 0.7% 22.2% Total 4.2. 100.0% 100.0% Tenants: Government vs. non-government Government* Non-government 59.7% 66.0% 40.3% 34.0% Total 100.0% 100.0% * Includes national, provincial and local government as well as parastatals including Telkom and the Post Office. 4.3. Building Profile Based on GLA Based on GLA including development property on completion A-grade B-grade C-grade 29.1% 30.1% 69.7% 68.9% 1.2% 1.0% Total 100.0% 100.0% 5. Operating segments The group classifies segments based on the type of property i.e. Commercial, Retail, Industrial and Other. Properties can be mixed use properties. In this instance the property will be classified according to its principle use.Accordingly, the group only has one reporting segment, namely Commercial property as the principle use of all properties in the portfolio is for commercial office space. Most of the buildings do have a small retail component (normally at street level), but seldom exceeds 10% of the total GLA per building. 6. Payment of second interim distribution The board has approved and hereby give notice of a cash second interim distribution of 3.17 cents per A-linked unit and 1.43 cents per B-linked unit in respect of the period from 1 December 2012 to 31 December 2012. This distribution is not subject to dividend withholding tax. The last date to trade in linked units cum distribution will be Friday, 22 February 2013 and trading will commence ex distribution on Monday, 25 February 2013. The record date to participate in the distribution will be Friday, 1 March 2013. Linked unit certificates may not be dematerialised or rematerialised between Monday, 25 February 2013 and Friday, 1 March 2013, both days inclusive. Payment of the distributions will be made to linked unit holders on Monday, 4 March 2013. In respect of dematerialised linked unitholders, the distribution will be transferred to the Central Securities Depository Participant accounts/ broker accounts on Monday, 4 March 2013. Certificated linked unitholders’ distribution payments will be posted on or about Monday, 4 March 2013. Special distribution in respect of the period from 1 July to 30 November 2012 Interim distribution in respect of the period from 1 December to 31 December 2012 15.83 7.02 A-linked units B-linked units 9.0% 16.5% 20.7% 19.0% 1.4% 0.5% 32.9% Based on GLA Based on GLA including development property on completion 344 179 Loans from shareholders Interest bearing liabilities 2 Trade and other payables Linked unitholders accrued interest Balance at 31 December 2011 (audited) Issue of linked units Total comprehensive income for the period 26 073 Total trade and other receivables 2 142 154 202 335 4 893 42 599 Unaudited Audited Audited 31-Dec-12 30-Jun-12 31-Dec-11 Notes R’000 R’000 R’000 Investment properties Straight-line of lease income adjustment Unamortised upfront lease costs 26 062 11 Earnings Adjusted for: Amortisation of discount on debentures Net fair value gain on revaluation of investment properties Consolidated statement of financial position at 31 December 2012 Assets Non-current assets 28 550 176 262 26 073 Reconciliation between earnings, headline earnings and distributable earnings 27 935 Net (loss)/ profit after tax and total comprehensive (loss) / income for the period 323 879 (197 442) 202 335 Distributable earnings (linked units) Less: distribution declared Interest on A-debentures Interest on B-debentures The impact of delays in the transfer of certain properties was negated by the 50 basis points reduction in interest rates of bank debt. 106 798 1 357 900 Unit structure The company has 176.9 million A-linked units and 347.5 million B-linked units in issue - (31 December 2012: 176.9 million A-linked units and 340.5 million B-linked units). 131 625 256 (25 083) - 3.17 1.43 Total distribution Distribution for for the 6 months period prior to ended 1 July 2012 31 December 2012 accrued 19.00 8.45 2.08 2.63 Total distribution paid 21.08 11.08 Directors AC Nissen (chairman) # / AM Mohamed (CEO) * / SL Rai * / FW Arendse * / HB Dednam (FD) * / J de Villiers (alternate to SL Rai) * / M Burton # / B Bayvel # / H Takolia # * executive director # independent non-executive Company secretary J de Villiers Business address 5th Floor, 14 Long Street, Cape Town, 8001 Transfer secretaries Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg, 2001 Sponsor Java Capital, 2 Arnold Road, Rosebank, 2196