Property loan stock Vukile (VKE) almost doubled its net profit for the six months to September to 115 million rand, the company reports.

Excluding a 33.9 million rand contribution from the 75%-owned MICC - acquired since the 2004 interim results - the directly comparable increase amounted to 8.2%.

Chief executive Gerhard van Zyl said the improvement was attributable to a strong performance by Vukile's underlying property portfolio and a decrease in its overall vacancy rate, which was reduced as a percentage of gross rentals from 4.1% on 30 September 2004 to 3.8% at the end of September this year.

An increased interim distribution of 32.5 cents per linked unit (up 8.3% on 2004: 30 cents) was approved by the board. The company noted that the net asset value per linked unit had increased from 4.94 rand to 6.55 rand over the same period.

Van Zyl said the company's recently announced 2 billion rand securitisation programme would reduce its overall debt cost from 11.16% to 10% after all upfront, ongoing and hedging expenses had been taken into account.

"Although the securitisation benefits on the first issue of 770 million rand will only be felt for five months of the current financial year, they will nevertheless have a positive impact on our second-half and full-year results," Van Zyl said.

"The contribution from this programme, combined with a continued robust performance by the property portfolio and the prospect of a further reduction in vacancies, should enable us to increase the distribution for the full year by a similar margin to the interim increase, barring unforeseen developments."

The Vukile board has also given the go-ahead to an 80 million rand expansion and upgrading project for its Phoenix Plaza and Dobsonville properties. Van Zyl said work on this project - which is expected to deliver an initial yield of some 11% - will start in January 2006 and is scheduled for completion by August 2006.

I-Net Bridge
Publisher: I-Net Bridge
Source: I-Net Bridge