Reporting its final results, iFour said that the distribution, combined with the rise in the iFour share price from 5.30 rand to 6.15 rand at year-end, translated into an annual return of 31% to linked unit holders.
During the year, the company increased its portfolio from 700 million rand to more than 1.7 billion rand through a number of major acquisitions. It now owns 108 buildings throughout major centres of the country.
Revenue rose to 221.6 million rand from 139.3 million rand a year earlier, while profit from operations improved to 163.8 million rand from 99.4 million rand previously. After 88.3 million rand in debenture interest distributed to shareholders and 80.9 million rand in interest paid, the group made an after-tax net loss for the year of 4.5 million rand. This compares to a profit of 26.8 million rand in 2003.
Headline earnings per linked unit were 75.80 cents, down slightly from the 76.91 cents recorded a year earlier
According to Managing Director James Nunes, the distribution of 78 cents was in line with the update in the June circular to shareholders, which also included a forecast of 82 cents for 2005.
Nunes said iFour had increased its exposure to the retail sector and had continued to focus on obtaining "A" grade properties that meet its strict acquisition criteria.
"The retail holdings of the portfolio have increased from 17% to 25% in the past two years," he commented.
Exposure to warehouse and distribution remained the same, while the office component of the portfolio decreased from 50% to 39%. According to Nunes, the portfolio vacancy remained at a low 4%, due to management's focus on tenant retention and a balanced lease expiry profile.
"iFour's increased exposure in the retail and industrial sectors are in line with our strategy of investing in those sectors of the market which are likely to show stronger growth," he explained.
Nunes said the company's investment strategy remained focused on acquiring properties in secure parks and nodes along or near activity corridors. In the warehouse sector, the company had continued to acquire modern and accessible properties, based on the above criteria, which promised good capital growth in the medium-term.
Retail acquisitions had been focused on neighbourhood or convenience centres that dominate their catchment areas.
"After iFour"s rapid expansion, the emphasis now is on extracting value from the portfolio and maintaining sustainable distributions to shareholders," Nunes concluded.