The group announced a second-half distribution of 36 cents per linked unit, up 14.3% on the comparable period in 2005, for a distribution for the full year of 68.5 cents - up 11.4%.
Vukile's property portfolio value increased to over 3.5 billion rand.
Overall vacancy of the Vukile portfolio had been reduced to 3.6% of gross income and the board has approved 230 million rand in new investments expected to yield close to 10%. The total return to unitholders for the 2006 financial year was 99.1%, which consisted of an income return of 12.9% and capital appreciation of 86.2%.
Other highlights of the year were the successful launch of a 2 billion rand commercial mortgage backed securitisation programme, designed to refinance existing bank debt and reduce the cost of funding future property investments, and the introduction of a substantial BEE partner which now holds 25% of Vukile's linked units, the group said.
CE Gerhard van Zyl said the company's strong showing was attributable to a good performance by its underlying properties, the positive effects from the securitisation programme which had reduced debt cost from 11.2% to 10.0%, and a 71 million rand contribution to net profit from MICC.
Vukile owned 98.9% of MICC's issued linked units at the year-end and invoked section 440K of the Companies Act to acquire the balance compulsorily. The move is being opposed by a linked unitholder owning 0.01% of MICC's issued capital.
"During the past year we made significant progress with our strategic priorities, improving our debt funding structure, reducing vacancies, embarking on a major upgrade programme for existing properties and making a number of attractive new investments," van Zyl said.
"Our priorities for the coming year are to reduce debt costs further through the full assimilation of MICC and to develop the growth opportunities which have been created by our BEE credentials. We'll be maintaining our focus on the upgrade and expansion of existing properties and we remain on the look-out for acquisitions which will add value to our portfolio."
Van Zyl said the company could not realistically be expected to sustain distribution growth at the current 14% level, but was nevertheless likely to produce another solid performance for the six months to September.
While there was limited scope for further vacancy reductions in its existing portfolio, the new acquisitions would start contributing and the company would enjoy the full benefits of the securitisation programme, which could be extended to MICC's debt.
He also noted that, while the introduction of the BEE unitholder had reduced Sanlam's stake in Vukile to 32%, the company continued to examine ways of broadening its shareholder base and increasing the liquidity of its linked units.
I-Net Bridge
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Source: I-Net Bridge
