ALTHOUGH large-scale vacancies caused Metboard Properties' total distributions for each linked unit to drop 2,9% in the year ended March 31, the group was able to reduce the vacancies to 5% from close to 10% in the second half of the year.
Metboard Properties fund manager Jeffrey Sher said this boded well for its income stream for the next financial year.
The listed property loan-stock company, a focused industrial fund, announced yesterday a 2,9% drop to 38c in its total distributions for each linked unit from 39,12c last year.
A distribution of 21,14c for the six months to March this year was announced. The group attributed this to increased costs in letting vacant space and bad debts written off in the year.
The company also reported a R5m capital loss from 11 properties it disposed of for R28,4m. It said the properties no longer met the group's investment criteria and had no prospect of being let in the foreseeable future.
Sher said vacancies peaked at 9,8% from April last year to October, which represented 104000m² of vacant space.
The company managed to reduce vacancies to 5,02% through a "concerted and clearly successful letting drive".
The headline earnings for each linked unit were also affected by the vacancies and the capital loss, and dropped from 39,20c in the previous period to 37,94c .
"The loss was not in the normal course of business and is nonrecurring," Sher said.
Revenue increased 28,5% to R168,3m, from R130,9m the previous year, and net operating income rose 18,8% to R73,4m from R61,8m the previous year.
The group mainly attributed this to the acquisition of 22 properties in May last year at a cost of R201,8m.
Sher said the acquisitions had boosted the group's property portfolio to R1,1bn.
"As a result of this acquisition, total gross lettable area of the company increased to 1,2-million square metres. The enlarged portfolio allows Metboard to offer a large variety of space to let, thereby reducing the dependency on any one building or geographic area," the group said.
Future prospects for the company look good with Sher predicting revenue would escalate 7%-8% in line with existing leases.
Jun 06 2003 07:38:59:000AM Nick Wilson Business Day 1st Edition
