Property loan stock company Vukile yesterday posted a 9,5% increase to R289,9m in net profit for the year to March following firm control of costs and a strong performance from its underlying properties.

CE Gerhard van Zyl said that despite the deterioration in trading conditions, especially in the latter part of the year, the company managed to contain the vacancy levels in its portfolio at very low levels.

“We can expect, however, that

The company reported a 12% rise to 53,8c per linked unit in the final distribution for the past six months, making the total for the year 97,90c per linked unit, an increase of 10,9%.

As a result of a firm control on costs the company’s cost to property revenue ratio improved to 32,3% from 34,1% the previous year while it contained vacancy levels at 3,2% of gross rentals from 2,8% the previous year.

Finance costs, which include the net of investment income, had increased by R7,8m to R122,6m from R114,8m largely as a result of an increase in long-term borrowings of R53m used to finance capital expenditure. The company valued its property portfolio at R4,53bn, which was R213m or 4,9% higher than the valuation at the previous year end.

Van Zyl said the discussions between Vukile and Sanlam Properties regarding the proposed acquisition of its asset management business property portfolio as a going concern were continuing.

“In order to facilitate these discussions, the existing asset management contract between them was extended by a maximum of six months to September,” he said.

It was expected that the discussions would be finalised shortly.

Despite a downward trend of the interest rate cycle, Van Zyl expected the trading conditions to remain tough in the year ahead.