Spearhead has come up with another significant improvement for its year-end results (30 June).
Mike Flax, the Chief Executive Officer of the company, said that Spearhead had increased its distribution per unit by 10% - to 120 cents for the full year, while earnings had increased by 267% as a result of the new accounting treatment of gains on its portfolio revaluation.
'This is well ahead of most analysts' expectations,' said Flax 'and we are particularly pleased with these results because for most of the year under review we were operating in a tough, competitive market.'
Flax also reported a 22% rise in the net asset value per unit - to R12.02. This, he said, was due to the revaluation of all the properties in the portfolio, the first undertaken since the assessment late in 1998 prior to Spearhead's JSE listing. The new valuation was done by registered valuers and appraisers, Douglas & Associates.
Asset value, said Flax, has also been increased as result of Spearhead Management's now-proven ability to add value to projects that it redevelops. Several of the Group's properties had benefited from this, notably Buchanan Square and Riverside Mall, both in Cape Town's southern suburbs.
Looking ahead, Flax is confident that Spearhead will achieve further growth in the current financial year as it reaps the rewards generated by the softer interest rates and its aggressive ongoing letting campaign, often described as one of the most pro-active in the Cape.
In Spearhead's report to SENS, Flax was able to announce that work is going ahead on a new R50-million, 20 000m² office and industrial complex being developed in the high growth Century City / Montague Gardens business node. Spearhead is the developer and has a 100% stake in the equity. Spearhead expects a 16% return on the development cost in the first year.
Spearhead has also announced the appointment of two new non-executive directors, both high profile entrepeneurs with considerable commercial experience.
The first, Monty Kaplan, also takes over as non-executive Chairman of the company. He was previously the MD of Cape of Good Hope Bank where he is one of those credited with its outstanding growth. He has, too, been a director of the SA Post Office company and is a regional director of Investec Bank. Kaplan takes over from Frans van Hoogstraten, who will remain a non-executive director following his relocation to Gauteng.
Dennis Fabian, MD of Dennis Fabian Berman Hackner Architects, one of Cape Town's largest practices and responsible for such major projects as the new Investec building on the foreshore, the Cullinan Hotel and the Victoria and Alfred Aquarium, also joins the Board in a non-executive capacity.
Flax said that the two new directors had already shown that they can assist Spearhead to achieve its ambitious growth plans.
'We see ourselves becoming one of the leading property loan stock funds in the country.' he said. 'Our track record over the last two years shows that we are capable of significant further growth.'