REVIEWED FINAL RESULTS
AND DISTRIBUTION ANNOUNCEMENT
For the year ended 30 June 2012
• Total distribution 128 cents per un...
of 1

Orxy Properties Limited FY 2012 results

Orxy Properties Limited FY 2012 results
Published on: Mar 3, 2016
Published in: Investor Relations      
Source: www.slideshare.net


Transcripts - Orxy Properties Limited FY 2012 results

  • 1. REVIEWED FINAL RESULTS AND DISTRIBUTION ANNOUNCEMENT For the year ended 30 June 2012 • Total distribution 128 cents per unit • Distribution growth 8.9% • Vacancy 0.6% (Incorporated in the Republic of Namibia) (Registration number 2001/673) (“Oryx” or “the company”) (NSX Share code: ORY) (ISN code: NA 0001574913) www.oryxprop.com CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 30 June 2012 (N$'000) Notes 132 792 129 776 3 016 (23 576) 109 216 1 239 2 777 (10 593) 41 140 44 156 (3 016) (8 567) 135 212 (28 325) 106 887 (70 453) 36 434 1 300 37 734 37 734 2011 Audited Restated 115 257 114 145 1 112 (21 681) 93 576 398 2 777 201 90 900 92 012 (1 112) (6 626) 181 226 (21 514) 159 712 (64 673) 95 039 (150) 94 889 94 889 196.55 128.00 289.89 117.50 2011 Restated 2010 Restated 1 041 554 1 067 900 (26 356) 53 4 390 22 345 1 068 332 883 121 908 365 (25 244) 0 1 488 20 332 904 941 10 823 6 811 4 012 4 948 15 771 1 084 103 11 180 6 268 4 912 2 205 13 385 918 326 514 153 476 419 381 530 247 137 42 777 6 544 395 658 15 319 707 435 247 137 45 555 256 239 16 619 565 550 247 137 48 332 187 292 16 469 499 230 25 421 734 36 482 62 637 1 284 225 7 787 749 33 598 42 134 1 084 103 7 417 30 149 37 566 918 326 2012 2011 15 691 110 346 (27 086) (67 569) (157 045) 139 419 (1 935) 4 948 3 013 1 175 83 515 (21 116) (61 224) (67 379) 68 947 2 743 2 205 4 948 Revenue Rental - cash flows inherent in leases Rental - straight line basis adjustment Rental expense Net rental income Investment income Amortisation of debenture premium Profit on sale of investment property Changes in fair value of financial liability 3.4 Changes in fair value of investment property As per valuations Straight line basis adjustment Other expenses Operating profit before finance costs and debenture interest Less: Finance costs Operating profit before debenture interest Less: Debenture interest Profit before taxation Less: Taxation Profit for the year Other comprehensive income Total comprehensive income Earnings per linked unit (cents) Distribution per linked unit (cents) as declared 2.2 2.3 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 June 2012 (N$'000) Notes 2012 Reviewed ASSETS Non-current assets Investment properties 1 239 729 At valuation 3.3 1 269 101 Straight line basis adjustment (29 372) Equipment 38 Deferred expenditure 3 538 Rental receivable - straight line basis adjustment 26 215 1 269 520 Current assets Trade and other receivables 11 692 Trade and other receivables 8 535 Rental receivable - straight line basis adjustment 3 157 Cash and cash equivalents 3 013 14 705 TOTAL ASSETS 1 284 225 EQUITY AND LIABILITIES Capital and reserves Non-current liabilities Debentures Debenture premium Financial liability through profit and loss Long term borrowings Deferred taxation 3.4 3.5 Current liabilities Trade and other payables Deferred income Linked unitholders for distribution TOTAL EQUITY AND LIABILITIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 30 June 2012 (N$'000) OPERATING ACTIVITIES Cash generated by operating activities Cash generated by operations Net finance costs Distributions to linked unitholders Cash flows used in investing activities Cash flows from financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of the year CASH AND CASH EQUIVALENTS AT END OF THE YEAR 2012 Reviewed CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2012 (N$'000) NonShare Distributable distributable capital reserves reserves 550 1 034 303 706 Notes Total Balance at 30 June 2010 305 290 Change in accounting policy on treatment of deferred taxation 2.1 76 240 76 240 Restated opening balance 550 1 034 379 946 381 530 Total comprehensive income 94 889 94 889 Transfer to non-distributable reserves (94 869) 94 869 Balance at 30 June 2011 550 1 054 474 815 476 419 Total comprehensive income 37 734 37 734 Transfer to non-distributable reserves (37 709) 37 709 Balance at 30 June 2012 550 1 079 512 524 514 153 The above results have been reviewed by Deloitte & Touche Chartered Accountants (Namibia). The review was conducted in accordance with International Standards of Review Engagements 2410, “Review of interim Financial Information Performed by the Auditor of the Entity”. The unmodified review report is available for inspection at the company's registered office. Any reference to the future financial performance included in this announcement has not been reviewed or reported on by the company's auditors.” 1. OTHER INFORMATION Notes 2012 2011 Audited Restated 55 041 675 1 397 1 121 (19.8%) 2.6% N$40.5m • Linked units in issue 55 041 675 • Net asset value (cents per linked unit) 3.2 1 461 • Listed market price (cents per linked unit) 1 326 • Discount to NAV on IFRS basis (9.2%) • Vacancy factor (based on lettable area) 0.6% • Capital commitments (including approved but not contracted) N$314m 2. NOTES TO THE FINANCIAL RESULTS 2.1 Accounting policies The preliminary report has been prepared in accordance with the Framework concepts, the measurement and recognition requirements of IFRS and the information required by IAS 34. The company's accounting policies adopted in these financial results are consistent with those applied in the audited financial statements for the year ended 30 June 2011, except for the change in accounting policy as it pertains to IAS 12 on the treatment of deferred taxation on investment properties. In December 2010, the International Accounting Standards Board (“IASB”) released amendments to IAS 12 effective 1 January 2012. These amendments impact the rate at which deferred tax is recognised, specifically on the fair value movements of the building component of investment property as it establishes a presumption that the cost of the asset will be recovered through disposal rather than use. This change will mean that the tax rate applied should be the applicable capital gains tax rate. For Namibian properties this has the effect that no deferred tax is recognised on fair value movements, as there is currently no tax payable on capital gains. For South African properties this means that movements in fair value will attract deferred tax at the applicable capital gains tax rate. Oryx has elected the option presented by the amendments to early adopt these amendments and have applied them retrospectively as required by IAS 8. It is the view of the board that this policy results in more accurate and meaningful information. The effect of this change in accounting policy is a reduction of the 2010 deferred tax balance of N$76m with a corresponding increase in opening 2011 reserves. The effect on the 2011 deferred tax balance is a reduction of N$21m, with a corresponding increase in reserves. 2.2 Earnings and headline earnings The earnings and headline earnings per linked unit for the year are calculated as follows: 2012 N$'000 37 734 70 453 108 187 2012 Cents Per Unit 68.56 128.00 196.56 2011 N$'000 94 889 64 673 159 562 2011 Cents Per Unit 172.39 117.50 289.89 Total comprehensive income Debenture interest Earnings attributable to linked units Adjustments for: Amortisation of debenture premium (2 777) (5.05) (2 777) (5.05) Capital surpluses (net of deferred taxation) (32 897) (59.77) (91 566) (166.36) Headline earnings attributable to linked units 72 513 131.74 65 219 118.48 Debenture interest (70 453) (128.00) (64 673) (117.50) Headline earnings attributable to shares 2 060 3.74 546 0.98 2.3 Distribution attributable to linked unitholders The distribution per linked unit is based on the actual number of units in issue at the end of the respective distribution period and is calculated as follows: Headline earnings attributable to shares 2 060 546 Reconciliation to undistributed earnings: Debenture interest 70 453 64 673 Rental straight lining net of deferred taxation (2 035) (526) Distributable earnings 70 478 128.04 64 693 117.53 1st half distribution (33 988) (61.75) (31 099) (56.50) 2nd half distribution (36 465) (66.25) (33 574) (61.00) Undistributed income for the year 25 0.04 20 0.03 2.4 Primary business segments for the year ended 30 June 2012 (N$'000) The basis of segmentation and measurement is consistent with the prior year. Retail Industrial Office Fund Group Rental - cash flow basis 73 840 40 900 15 036 129 776 Rental - straight line adjustment 1 133 2 183 (300) 3 016 Revenue 74 973 43 083 14 736 132 792 Profit for the year 80 323 43 244 14 734 (100 567) 37 734 Other information Properties 655 270 469 724 114 735 1 239 729 As per valuations 669 943 483 358 115 800 1 269 101 Straight line basis adjustment (14 673) (13 634) (1 065) (29 372) Primary business segments for the year ended 30 June 2011 (N$'000) Rental - cash flow basis 68 462 31 812 13 871 114 145 Rental - straight line adjustment (1 095) 1 634 573 1 112 Revenue 67 367 33 446 14 444 115 257 Profit for the year 113 879 42 912 21 597 (83 499) 94 889 Other information Properties 600 860 329 710 110 974 1 041 544 As per valuations 614 400 341 100 112 400 1 067 900 Straight line basis adjustment (13 540) (11 390) (1 426) (26 356) 3. COMMENTARY ON RESULTS 3.1 Financial results and distribution Distributions for the year 30 June 2012 amount to N$70,4m (2011: N$64,7m), or 128.00 (2011: 117.50) cents per unit, an increase of 8.9% (2011: 7.6%) over the 2011 year. Revenue increased by 15.2% (2011: 19.2%) during the current year, attributable mainly to strong renewals, filling of vacancies and the acquisition of two new industrial properties in South Africa towards the end of the financial year. 3.2 Net asset value (NAV) The net asset value of the Group is 1 461 cents per unit (2011: 1 397) representing a 10% (2011: 25%) premium to the trading price of 1 326 (2011: 1 126) cents per unit as at 30 June 2012. 3.3 Property portfolio The Oryx portfolio was valued at N$1 269m (2011: N$1 068m) at 30 June 2012 and the sectoral spread based on value, is as follows: • Retail 53% (2011: 57%) • Industrial 38% (2011: 32%) • Offices 9% (2011: 11%) An independent valuation of the properties as at 30 June 2012 by Broll Valuation and Advisory Services, resulted in a fair value gain on the direct property portfolio of N$44,1m (2011: N$92m). The portfolio continued to perform well and vacancies have decreased from 2.6% in June 2011 to 0.6% at 30 June 2012. Both the Lazarett street premises (2 552m2) and Mikes Kitchen premises (750m2) have been tenanted, hence the significant reduction in vacancies. The N$307m Maerua Mall Shopping Centre extension and upgrade project is well underway. The project consists of five zones which are expected to be completed by 31 October 2013. Retail space of 8 300m2, office space of 3 050m2 and 925 new parking bays will be added to the centre. Included in the upgrade project is about N$10m for improving roads, intersections, traffic lights and enhancing the traffic flow to and from the centre. The project will be funded by a development loan to be converted to a term loan after completion of the project. The Baines Centre upgrade of approximately N$13m has commenced. The upgrade includes the introduction of a new OK Foods franchise which will strengthen the existing anchor of the centre. Acquisitions, developments and disposals for the year ended 30 June 2012 Property Gross lettable Transaction price (Expected) Transfer Yield area N$'000 / completion date Acquisitions: Industrial property in Stellenbosch (SA) 9 878m2 67 800 12 April 2012 9.30% 51 100 20 June 2012 9.34% Industrial property in Roodepoort (SA) 4 295m2 Developments: 2 Scania Truck facility 2 800m 28 450 October 2012 10.0% 3.4 Financial liability Two interest rate swap transactions of N$100m and N$60m were entered into to fix the interest rate on loans with a variable interest rate of 3 month JIBAR +2% for 4 and 3 years respectively. This was done to cover Oryx against what at the time seemed like imminent interest rate increases at the end of 2011. The outlook for interest rate increases changed significantly when the European crisis came to the fore and hence the fair value of these transactions created a liability for Oryx, which will be amortised to the income statement during the period of the swap transaction. The fair value of this liability at the end of June 2012 was N$10,6m, of which N$4m is classified as a current liability under trade and other payables. The full current year loss was expensed through the statement of comprehensive income, but will have no effect on unitholder distributions. 3.5 Borrowings As at 30 June 2012, Oryx had long term borrowings totaling N$395,7m. Promissory notes to the value of N$40m carrying interest at a fixed rate of 10.44% expire on 9 November 2012. Oryx has successfully refinanced this facility with new promissory notes to the value of N$70m with a floating interest rate of 7.03% (3 month JIBAR + 1.95%). The increase in borrowings from the previous year can mainly be attributed to the purchase of 2 industrial properties in South Africa totalling N$118,9m, bringing the total value of South African industrial properties to 20% of the total property portfolio. The details of all loans and renewals are in the table below: Long term Total borrowings utilised Variable Fixed facility N$’000 Term Expiry date interest rate interest rate N$’000 100 000 (Nam) 3 yrs 09/11/2014 *10.29% 100 000 60 000 (Nam) 3 yrs 15/12/2014 *10.04% 60 000 40 000 (Nam) 3 yrs 09/11/2012 10.44% 40 000 51 671 (RSA) 3 yrs 21/06/2014 10.01% 60 000 70 166 (RSA) 5 yrs 12/04/2017 8.25% (RSA prime -0.75%) 70 166 73 821 (Nam) Rolling 13 month notice 8.75% (Nam prime -1%) 140 000 395 658 470 166 *Interest rate swap as per note 3.4 above 3.6 The market & prospects Oryx has produced a robust set of full year results. The focus remains on strategic acquisitions, development of existing properties and tenant retention. The Board's investment strategy provides for further investment in existing assets and to meet major tenants' requirements for additional space. Given our long term focus we may acquire or develop properties which could initially be dilutive, provided they will offer long term growth and sustainability to Oryx. Looking ahead, Oryx expects trading conditions to continue to be challenging in the next 12 months. Despite these, the Board of Directors is confident that Oryx will continue to deliver real growth in distributions. 3.7 Contingent liabilities The Board is not aware of any contingent liabilities at 29 August 2012. 4. DECLARATION OF DISTRIBUTION NUMBER 19 Notice is hereby given of the declaration of distribution number 19, amounting to interest of 66.25 cents per linked unit, for the six month period to 30 June 2012. Last date to trade cum distribution Friday, 7 September 2012 Units will trade ex distribution Monday, 10 September 2012 Record date to participate in the distribution Friday, 14 September 2012 Payment of debenture interest Friday, 28 September 2012 By order of the board E Pagel SPONSOR Company Secretary 29 August 2012 REGISTERED OFFICE TRANSFER SECRETARIES 61 Independence Avenue, Windhoek, Transfer Secretaries (Pty) Ltd P O Box 3644, Windhoek, Namibia 4 Robert Mugabe Avenue, [entrance in Burg Street opposite 2A Chateau St] Windhoek P O Box 2401, Windhoek, Namibia Member of the Namibian Stock Exchange DIRECTORS 4 Koch Street, Klein Windhoek F Uys (Chairman)#, SI de Bruin^, KF Clinton*, JJ Comalie#, C Fourie^, NBS Harris*#, A Konig*, PO Box 3970, Windhoek JC Kuehhirt#, MK Shikongo#, A Swanepoel# *South African, #Independent, ^Executive

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