Hyprop reaps reward of portfolio growth.

Posted On Wednesday, 20 August 2003 02:00 Published by eProp Commercial Property News
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Property loan stock company Hyprop Investments was upbeat about its interim results for the six months ended June 30 2003 and declared a 2% rise in interim distribution to 65,10c.

Pieter PrinslooThe group also reported a 103% surge in turnover to R135,8m and a 99%
increase in operating income to R84m with MD Pieter Prinsloo attributing the
leaps to substantial growth of the group's portfolio.

Hyprop's net profit for the period decreased to R1,5m for the six months to
June 30 from R13,6m for the same period last year, but Prinsloo said that a
R13,5m revaluation increase of the property portfolio had to be taken
through the income statement for the period last year in terms of generally
accepted accounting practice.

This year Hyprop did not have to pass another fair value adjustment through
the income statement, which explained the drop in net profit for the period,
said Prinsloo.

Prinsloo said this also affected the group's earnings for each combined
unit. The group reported earnings of 84,62c for each combined unit last
year, while this year they reported earnings of 66,69c for each unit.
The group reported headline earnings of 66,73c for each combined unit, a 5%
increase over the previous comparative period.
Among the company's property acquisitions was Canal Walk Shopping Centre in
the Western Cape.

In terms of the agreement with Canal Walk Limited Hyprop would acquire Canal
Walk for a purchase consideration of R1,16bn payable in cash on transfer of
the property.
Ellerine Brothers acquired a 20% undivided share in Canal Walk with Hyprop
retaining the remaining 80% undivided share in the company.
The company also reported a reduction in vacancies to 5% of potential
rentable income from 6% at year-end.
Andisa Securities property analyst Len van Niekerk said Hyprop's results
were in line with expectations and it was a "good quality property company".

He said Hyprop's vacancies were "miniscule" especially the retail component,
which accounted for about 60% of their operating income, where vacancies
were sitting at only 0,9%.
Van Niekerk said the company's office component, which accounted for 40% of
its operating income, also had a relatively low vacancy rate.
"It's come down from 8,6% at December 2002 to 5,9% at June 2003. A vacancy
of 5% is considered a frictional rate. There's is only 5,9% and that's very
good."
However, he said he believed Hyprop's combined unit price was overpriced and
that it had risen too much from just over 11 c in May to 12,50c.
Angelique De Rauville, MD of Provest, which is part of Investec Bank and
does monthly research reports on the listed property sector, said Hyprop's
results were "quite pleasing".


Last modified on Saturday, 10 May 2014 12:09

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