Vukile Property Fund Limited · JSE:VKE
Vukile Property Fund — FY2005 Earnings Presentation
29 slides from Vukile Property Fund's earnings presentation, June 2005
Slide 1: Audited Group Results for the year ended 31 March 2005
AUDITED GROUP RESULTS for the year ended 31 March 2005
Slide 2: Highlights
Highlights • Maiden distribution and yield exceed prospectus forecast • Acquisition of MICC increases property portfolio to +R3 billion • Liquidity of linked units significantly improved
Slide 3: History
History • Listed on JSE on 24 June 2004 • Promoted by Sanlam, which still holds 59% • Market cap at 31.3.05: R1.4 billion • Gross property value: R3.1 billion • Acquired 74.35% of MICC (as at 31 March 2005)
Slide 4: Objective
Objective • To invest in properties with a strong contractual cash flow for long-term sustainability of property income, capital appreciation of linked units and growing income distributions for unitholders
Slide 5: Salient features of results
Salient features of results • Net profit of R247.5 million of which R233 million is attributable to unitholders • Final distribution of 31.5 cents per linked unit for total of 61.5 cents (forecast: 60.25 cents) • Yield of 12.3% on issue price (forecast: 12.05%)
Slide 6: Group income statement
R000 Group income statement Audited year ended 31 March 2005 Gross property revenue 400 954 Property expenses (137 992) Net profit from property operations 262 962 Administrative expenses (9 320) Other income 2 438 Net profit before finance costs 256 080 Finance costs (110 865) Net profit before deb
Slide 7: Group balance sheet
Group balance sheet Audited at R000 31 March 2005 ASSETS Non-current assets 3 152 674 Current assets 46 725 Total assets 3 199 399 EQUITY AND LIABILITIES Equity and reserves 272 356 Non-current liabilities 2 762 818 Current liabilities 164 225 Total equity and liabilities 3 199 399
Slide 8: Group borrowings
Group borrowings R000 JIBAR based debt 764 166 Prime less 1.5% debt (access facility) 75 000 Fixed interest rate funding (weighted average rate 11.44% NACM) 502 446 Total 1 341 612 [JIBAR - Johannesburg Interbank Agreed Rate] • [NACM - Nominal Annual Compounded Monthly] • The debt funding is provide
Slide 9: The market in 2004/05
The market in 2004/05 • Impact of lower interest rates on discount and capitalisation rates • Property prices driven to new high levels • Buoyant economy boosts occupation levels and rentals • Reduction in inflation restricts escalations
Slide 10: The acquisition of MICC
The acquisition of MICC • In line with growth strategy: extends asset base and enhances portfolio’s potential • Equates to acquisition of R740 million property portfolio at reasonable price • Now being managed by Vukile • End game is still to acquire all units
Slide 11: The property portfolio
The property portfolio • Vukile: 52 properties with gross lettable area of 676 961m² • MICC: 40 properties with gross lettable area of 395 812m² • Total: 92 properties with gross lettable area of 1 072 773m²
Slide 12: The property portfolio
VUKILE The property portfolio
Slide 13: Vukile property profile: geographical spread
Vukile property profile Geographical spread - % of GLA
Slide 14: Vukile property profile: sectoral spread
Vukile property profile Sectoral spread - % of gross rentals
Slide 15: MICC property profile: geographical spread
MICC property profile Geographical spread - % of GLA
Slide 16: MICC property profile: sectoral spread
MICC property profile Sectoral spread - % of gross rentals
Slide 17: Vukile tenant profile
Vukile tenant profile National tenant groups - % GLA and gross rentals
Slide 18: MICC tenant profile
MICC tenant profile National tenant groups - % GLA and gross rentals
Slide 19: Vukile lease expiries
Vukile lease expiries % of gross rentals
Slide 20: Vukile vacancies
Vukile vacancies % of gross rentals
Slide 21: MICC lease expiries
MICC lease expiries % of gross rentals
Slide 22: MICC vacancies
ee voce MICC vacancies 18.22% Percentage (%) Retail Industrial © Commercial Total
Slide 23: Current focus areas
Current focus areas • Enhancement of existing properties to extract maximum value • Debt funding structure (securitisation) • Improvement of Vukile linked units’ liquidity
Slide 24: Enhancement
Enhancement • Property prices currently at very high levels • Consequently, better to redevelop, upgrade and expand existing properties than to buy new ones • Existing portfolio has potential for significant organic growth
Slide 25: Debt funding
Debt funding • Currently investigating securitisation of major portion of long-term debt • Initial indications: significant interest savings possible
Slide 26: Liquidity
Liquidity • Stated strategic objective to extend unitholder base and improve liquidity • Exercise still under way, but progress already made
Slide 27: Liquidity: volumes
cents 600 550 500 450 400 350 Liquidity: volumes [== Trading volumes ———— Share price - close Jul04 Aug04 Sep04 Oct04 Nov04 Dec 04 Jan 05 Feb 05 Mar 05 000¥
Slide 28: Prospects
Prospects • Market conditions likely to remain favourable • Portfolio enhancement will provide strong foundation for organic rental growth • Barring the unforeseen, real growth in distributions forecast for coming year
Slide 29: Questions
ee voce Questions ? END