“The directors report that property revenue for the six months ended 31 December 2013 prior to any straight-line income adjustments decreased by 8.2 per cent to 18.7 million rand compared to R20.3 million rand for the six months ended 31 December 2012,” the group said in a statement.
“This decline in contractual rentals arose from a reduction of 11.1 per cent of the head lease re-negotiated with our major tenant, Larimar Proprietary Limited, effective from 1 January 2013.”
Gross property revenue however increased to 19.9 million rand for the period from 17.5 million rand in the previous comparative period. Net profit from operations also increased to 18.7 million rand from 16.8 million rand in 2013.
[DATA PPR:Putprop] is a Johannesburg Stock Exchange-listed company that invests in industrial, commercial and retail properties.
Operating profit before capital items was recorded at 18.6 million rand from 16.4 million rand in the previous comparative year. Net cash generated from operations however decreased significantly to 14.5 million rand from 20 million rand in the previous comparative period.
The group’s gross property rental, inclusive of straight-line rental accruals, also increased by 13.5 per cent from over the comparable period, and this was due to the smoothing effect of the straight line rental asset, of the group’s major tenant Larimar, as a result of the new lease agreement signed.
During this reporting period, the retail shopping centre held by Breaking Waves Proprietary Limited, in which the group held a 22.8 per cent holding was disposed of. A small profit was realised.
Earnings and diluted earnings per share declined to 56.4 cents from 58.5 cents in the previous year.
Property revenue for Putptop’s retail segment 16.3 million rand, a decrease from 18.1 million rand in the previous comparative period. Revenue for the group’s commercial property segment increased to 2.1 million rand from two million in the comparative period in 2012.
Revenue for Putprop’s industrial segment increased from 228 million rand from 219 million rand in 2012.
An interim gross cash dividend of 18 cents per ordinary share has been declared.
“Trading conditions during the next reporting period are expected to continue to be challenging. The property market both locally and internationally is expected to remain subdued in the second half of the year,” said Putprop.
“We will continue to focus on growing the portfolio, with the possibility of joint ventures with partners with similar strategies considered.”