Wrap Text
Unreviewed Condensed Consolidated Interim Results
for the six month period ending 31 August 2015
Freedom Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration No. 2012/129186/06)
Share code: FDP ISIN: D
(“Freedom” or “the Company” or “the Group”)
UNREVIEWED CONDENSED CONSOLIDATED INTERIM RESULTS
FOR THE SIX MONTH PERIOD ENDING 31 AUGUST 2015
KEY MATTERS:
• Maiden year as a listed company has passed
• Investment property revenue up by 67.24%
• Headline loss of 0.40 cents per share for the period
1
INTRODUCTION
Freedom is a holding and development property company, listed on the Main Board of the JSE Limited
(“JSE”) which operates across all primary sectors of the property industry namely industrial, commercial
and predominantly residential. The fundamental focus of Freedom is to strategically own and develop
prime properties thereby creating a portfolio that will generate sustainable income streams in the
future.
Freedom presents the unreviewed condensed consolidated interim results of the Company and its
subsidiaries (all wholly owned) for the six month period ending 31 August 2015 (“the Interim Period”).
1. FINANCIAL RESULTS
1.1. Comparative Results
Freedom was established specifically to acquire selected properties and list on the JSE, as set-
out in the pre-listing statement dated 5 June 2014 (“Pre-listing Statement”). The various
acquisitions, being conditional on the listing, became effective at various times between 1
March 2014 and the listing date of 12 June 2014. These are therefore the second set of interim
results released by Freedom.
1.2. Revenues
Total revenue, which includes discontinued operations, of R27 893 402 for the Interim period,
is lower than the revenue of R35 293 107 reported for the corresponding interim period
ending 31 August 2014. The key reason for the decline in revenue is that sales of development
properties (stock of serviced stands) have been lower in the Interim Period than during the
corresponding period in 2014. The projected revenues from sales of properties in 2015, as
detailed in the published forecasts for the years ending 28 February 2015 and 2016
(“Forecasts”) were lower than the revenue that was actually achieved as it was expected that
marketing initiatives would take some time to implement. The sales recorded in the previous
interim period have, however, not been matched in the Interim Period.
According to the South African Property Owners Association (Sapoa), the industrial sector’s
base rental growth has dipped below inflation for the six month period ending June 2015, for
the first time in ten years. This illustrates the prevailing operating environment against which
Freedom must evaluate itself.
Investment property revenue (including discontinued operations) is up on the comparative
period by 67.24% and the revenue of the Steelpoort Industrial Park held through Kadoma
Investments (Pty) Ltd (“Kadoma”) (see note 2.1 below), has increased by 50.76 % for the six
months under review. The vacancy in Steelpoort Industrial at 31 August 2014 was 13% and on
31 August 2015 it was at 14%, excluding the new units that have been constructed.
The take up of the recently completed units has not been as strong as expected and demand
has been affected by protests due to service delivery and other issues in the area and the
growth prospects at Steelpoort Industrial do, however, remain optimistic.
The following table provides a comparison of actual revenues generated by Freedom during
the Interim Period and the comparative in 2014.
1.3. Headline Earnings
For the Interim Period ended 31 August 2015, Freedom reported a headline and diluted
headline loss of R3 868 479 compared to headline earning and diluted earnings of R5 020 515
for the corresponding period in the previous financial year. The headline loss is down on the
Period ending Period ending
31 August 31 August 2014
2015
Revenue – Investment Property 13 915 332 8 320 812
Income (Including discontinued
operations)
Revenue – Development Property 13 978 070 26 972 295
Sales
Cost of Sales – Development (7 825 517) (20 197 490)
Property Sales
Gross Profit 20 067 885 15 095 617
headline earnings reported in the corresponding period and the contributing factors are set
out in more detail below.
1.4. Expenses
A number of once off costs that have an annual footprint have been accounted for in full
during the Interim Period. It was the decision of management to account for these costs in
this six month Interim Period and these costs have been accounted for in terms of International
Financial Reporting Standards (IFRS). Furthermore, executive bonuses relating to the
performance of the Company in the 2015 financial year have been accounted for in the Interim
Period, as these only accrued after year end. Financing costs have increased significantly due
to the increase in gearing, which was in line with the strategy of the Group. A further
contribution to the finance cost was the provision for interest payable on settlements of the
various guarantee share agreements as outlined in the Pre-Listing Statement and SENS
announcements issued on 11 August 2015, 15 October 2015 and 20 November 2015.
Furthermore staffing and executive costs have increased in line with the Group strategy of
retaining high calibre staff to roll out the growth strategy of the Group. With the expenses
being above anticipated levels, management has initiated processes to contain costs going
forward and various strategic initiatives have commenced to develop the property assets
owned by Freedom and grow the value of the Company for all stakeholders.
1.5. Net Asset Value (“NAV”)
The NAV at 31 August 2015 was 118.06 cents per share, a decrease of 4.01% on the value as at
31 August 2014 of 123.00 cents per share. In terms of Freedom’s valuation policy all properties
will be revalued on 28 February 2016. At this time Freedom will strategically evaluate the
method of valuation utilised for specific properties to ensure that the values of specific assets
are in line with market practice.
Gearing has grown on the Statement of Financial Position of the Company and the majority
of this funding is being applied to develop Freedom’s assets and unlock value for stakeholders
in terms of Freedom’s strategy as a capital growth fund. This is further set out in point 4
below.
2. OPERATIONS
Freedom has made progress in its operations, thus enabling management to continue implementing
the strategies and growth plans in line with the Company’s broad short to medium term goals of
unlocking value for Freedom’s stakeholders.
The following paragraphs detail progress on key projects identified by Freedom to ensure its
strategic objectives of income generation and capital growth are sustainable and achieved.
2.1. Steelpoort Industrial
Steelpoort is a mining town in Limpopo Province’s platinum belt experiencing rapid
development with a number of new mines being established, making it prime industrial land
to own. The scepticism that surrounds investing in the mining areas, due to the events that
unfolded in Rustenburg, is justifiably allayed when considering that the mining dynamics of
Steelpoort are of a different nature. Mining in this area is highly mechanised and has a primary
focus on platinum and chrome production. The number of mines which have opened in the
area over the past two to five year period are testament to the fact that it is a growing area
and is to be recognised as an area in which to invest.
Freedom has taken note of the service delivery protests in the area. These have impacted on
the operations of certain tenants in Steelpoort Industrial Park as well as on the take up of the
new units that have been constructed by Freedom. Management is monitoring the situation
closely and is implementing procedures to accommodate tenants where possible.
With corporate tenants such as Sasol, Weir Minerals and North Safety, Freedom is confident
that it can grow the tenant base and successfully fill the remaining units. Pieterse, Du Toit
and Associates have prepared reports for submission to council on re-zoning the remaining 6
hectares for light industrial warehousing purposes. This will allow for the construction of a
further 36 000m2 of industrial warehousing.
2.2. Tweefontein Residential
Tweefontein Residential Estate is the residential component of the land owned by the
Company in Steelpoort through Kadoma. Tweefontein Residential will provide Freedom in
excess of 4 000 residential development opportunities in the low to mid income market.
Pieterse, Du Toit and Associates have initiated the higher density re-zoning application. This
development is now planned in 12 phases and is still expected to be completed by 2020.
The demand for residential units is currently between 15 000 and 20 000 units and continually
expanding due to new mines opening in the area. A major mining group operating in the area
has expressed an interest in taking up 2 000 opportunities immediately on completion. The
demand by the existing mines in the area has far exceeded the supply as is currently evidenced
by ongoing enquiries received by the Company.
2.3. Montana (La Bonne Vie)
This proposed 90 sectional title residential opportunities of one, two and three bedroom units
in Montana, Pretoria is highly accessible and adjacent to the well-known Kolonnade Shopping
Centre and the Zambesi Country Estate. The 3 phase construction plan has been initiated
with:
- Phase 1 comprising of 22 units has been initiated and services have been established
This phase is estimated to generate annual rental income of R1 329 600;
- Phase 2 comprising of 31 units is expected to be completed by July 2016 and is
estimated to generate annual rental income of R1 586 400; and
- Phase 3 comprising of 37 units is expected to be completed by April 2016 and is
estimated to generate annual rental income of R1 932 000.
At all times Freedom has the option to strategically dispose of any of these units and utilise
the proceeds for alternate developments within the Group. The project development cost is
R35 million.
2.4. Langebaan
The Langebaan Beach Resort, located in Langebaan in the Western Cape, is a mixed use
development consisting of 312 022m2 of zoned residential land, 426 982m2 of un-zoned
residential land, 8,063m2 of land zoned for commercial use and 21 688m2 for institutional use.
Freedom’s proposed development in Langebaan which borders on Saldanha, is extremely
exciting for Freedom as Transnet has plans to spend R10 billion on the expansion of the
harbour at Saldanha. This has led to several development opportunities in the commercial and
residential sector. In phase 1 of its development, Freedom plans to develop 7 000m² of
commercial space and negotiations have commenced with high profile tenants who have a
national footprint.
The development will commence on the successful conclusion of lease agreements.
2.5. Gevonden
Gevonden comprises of 43 residential units in the medium level segment. It borders the urban
edge in Stellenbosch, making it the last section of land in this very popular Western Cape
Town that can be developed.
Stellenbosch has not been heavily affected by the economic crisis, as property development
has continued at a very steady pace over the past few years. The demand can mainly be
attributed to the steady population growth experienced in Stellenbosch and the rest of the
Western Cape since 2010.
Bordering the very successful Welgevonden Estate Development on the eastern boundary, our
survey shows that the demand significantly exceeds supply. Freedom is in final stages of
concluding a development agreement with a successful local developer, who undertakes to
fully develop the land at his cost. This includes external as well as internal services, after which
top structures will be constructed. Once these units have been completed, Freedom and the
developer will split the units according to input cost, leaving Freedom with an amount of
ungeared, rentable units which are in high demand. An option will also be made available for
Freedom to acquire more of these units from the developer at a reasonable market price, as
determined by an independent valuer.
With the demand being high on most of Freedom’s development land, we are continuously
investigating innovative financing methods in order to proceed at a much faster pace than
traditional institutional finance normally allows. Good progress has been made in this regard
and we anticipate initiating more of the developments on this basis.
2.6. Stellenbosch Industrial
Freedom entered into a sale agreement with K2014120563 Proprietary Limited (“the
Purchaser”) for the sale of the Stellenbosch Industrial Property for the sale consideration of R
49 000 000 (Forty Nine million only). The full proceeds are payable in cash. Commission of
R 1 470 000.00 (One Million Four Hundred and Seventy Thousand Rand only) is payable by
Freedom on the transaction.
The Sale is in line with Freedom’s strategy of specialising in development activity. The proceeds
of the Sale will be used to settle the existing bond on the property. The remaining proceeds
will be applied to specific approved future developments within the Group and to settlement
agreements reached with shareholders relating to the issue of guarantee shares referred to in
the Pre-Listing Statement dated 5 June 2014 and SENS announcements issued on 11 August
2015, 15 October 2015 and 20 November 2015.
3. PROSPECTS & STRATEGY
The period, since 28 February 2015, has proven to be a challenging one. When one considers
Freedom’s strategic objectives, liquidity in the trading of Freedom shares has continued, albeit that
the share has traded at a large discount to Freedom’s NAV. This was largely the result of certain
vendors who sold their properties to Freedom on listing for Freedom shares realising the
opportunity for creating liquidity through trading of their shares.
This has been further compounded by the market’s apparent assessment of the valuation of
Freedom with the current market capitalisation of the Company inferring that the valuation is
derived from the income producing assets and completely discounting the significant portfolio of
remaining assets which were acquired by Freedom for development. It is management’s view that
this will change as projects are successfully delivered and the Group returns to profitability.
On the positive side new investors have continued to realise the opportunity to invest at the
discounted levels, resulting in an ever expanding investor base.
Freedom is well positioned to operate in the low to mid-tier income sector due to its strategic land
holdings. In developing the Company’s land and providing rental units to the sectors identified,
Freedom’s vision is to address challenges currently being faced in the South African residential
market. These challenges include the lack of supply and delivery of homes to the low to mid-tier
income sector while growing the Company’s income producing assets.
4. BORROWINGS
Freedom had previously secured facilities with Nedbank Limited (“Nedbank”) to provide term
funding to Kadoma, subject to agreed drawdowns and completion of units. These term facilities
have been applied to the Steelpoort Industrial expansion and further development within the
Group. The Group is currently re-negotiating these facilities with Nedbank to ensure the best
possible terms and the optimal utilisation of the facilities within the Group. The Nedbank facilities
are secured by first mortgage bonds over the developed Steelpoort Industrial properties and a
surety provided by Freedom.
5. CORPORATE GOVERNANCE
The Board is fully committed to the principles of the Code of Corporate Practices and Conduct as
set out in King III. The Board acknowledges its responsibility in ensuring that the Company acts
with integrity and fairness. As such they are continually monitoring and investigating methods of
improving systems and controls in order to ensure that stakeholder opportunities are maximised.
6. HEALTH & SAFETY
Across all aspects of operations Freedom strives to adhere to the standards of best practice and
upholds health and safety as one of our highest values. This includes the health and safety policies
and procedures set forth to ensure and maintain the welfare of all employees and development
contractors. We are delighted to report another consecutive period without injuries.
7. SUBSEQUENT EVENTS
There have been no material events subsequent to 31 August 2015 to report outside of those
contained in the SENS announcements that have been issued and changes to the Board as set out
in paragraph 8 below and the subsequent sale of the Stellenbosch Industrial Park as indicated in
note 4 to the financial statements below.
8. CHANGES TO THE BOARD
Mr. Patrick Burton stepped down as Chairman of the Board at the conclusion of the Annual General
Meeting, held on 28 August 2015. The directors, executive committee and staff once again would
like to thank Mr. Burton for his dedicated leadership and invaluable contribution to the formation
and listing of the Company.
Mr. Richard Eaton was not re-elected at the Annual General Meeting held on 28 August 2015. The
directors, executive committee and staff would like to express their sincere gratitude and
appreciation for the contribution that Mr. Eaton has made to the Company since his appointment
at the inception of Freedom prior to listing. Mr Eaton’s vast experience was an invaluable
contribution to the Company.
Mr. Tyrone Govender has tendered his resignation on 23 November 2015, due to personal
circumstances. Mr. Govender will remain in the position of CEO of Freedom for the sixty day
notice period, as specified in his employment contract, until 23 January 2015.
Mr. Govender has indicated his willingness to assist on a temporary basis after the expiration of
his notice period on an ad-hoc basis until a new CEO is appointed, if the Board so decides. The
Board is currently evaluating its position with regard to the appointment of a new CEO and have
indicated their continued support for the appointment of a CEO with industry relevant experience
who complies with the requirements of the Company’s Memorandum of Incorporation, the
Companies Act, act 71 of 2008, and the JSE Listing Requirements. A formal announcement in this
regard will be made in due course.
As announced on 26 November 2015, Dr. Phillip Dexter, in the capacity of Independent Non-
Executive Director, and Mr Willem Stephanus Grobbelaar, in the capacity of Independent Non-
Executive Director, will be appointed to the Board following the completion of the nominations
process and approval by the Board.
The Freedom Board of directors welcomes the appointment of both Dr. Dexter and Mr. Grobbelaar
and looks forward to their invaluable contributions.
Furthermore the Board of Freedom is pleased to announce that Mr. Willem Stephanus
Grobbelaar has been appointed as Chairman of the Board.
9. BASIS OF PREPARATION
The unreviewed condensed consolidated interim results have been prepared in accordance with
the framework concepts and the measurement and recognition requirements of International
Financial Reporting Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Pronouncements as issued by the Financial
Reporting Standards Council and contain the information required by IAS 34 Interim Financial
Reporting, the JSE Listings Requirements and the requirements of the Companies Act, 71 of 2008
of South Africa.
These unreviewed condensed results have been prepared under the historical cost convention
except for investment properties and certain financial instruments which are measured at fair
value. The fair value of investment properties are determined with reference to the external
valuations dated 28 February 2015, prepared by the independent property valuer appointed to
value the properties owned by the group.
These results have not been reviewed or audited by Freedom’s auditors, RSM South Africa.
These unreviewed condensed results were prepared under the supervision of JF Pretorius, in his
capacity as the Chief Financial Officer of the Group.
10. ACCOUNTING POLICIES
The accounting policies applied in the preparation of these results are consistent with those applied
in the preparation of the financial statements for the year ended 28 February 2015 except for the
adoption of improved, revised or new standards and interpretations. The aggregate effect of these
changes in respect of the period ended 31 August 2015 is Rnil.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
6 months ended Year ended
31 August 28 February
Notes 2015 2014 2015
Unreviewed Reviewed Audited
(R’000) (R’000) (R’000)
Assets
Non-current assets
Investment properties 1 1 523 125 1 412 940 1 556 382
Property, plant and equipment 247 4 461 1 138
Deferred tax 680 - 851
Operating lease asset 1 968 - 1 086
Other assets 2 689 - 91
Other investments 2 9 342 - 2 342
1 538 051 1 417 401 1 561 890
Current assets
Inventories 3 80 824 87 177 87 694
Current tax receivable 172 - -
Operating lease asset 225 - -
Trade and other receivables 45 470 38 669 54 325
Cash and cash equivalent 5 665 1 367 1 337
131 816 127 213 143 356
Non-current assets classified as held for 4 47 266 - -
sale
Total assets 1 717 133 1 544 614 1 705 246
Equity and liabilities
Equity
Stated capital 830 031 870 077 823 331
Reserves - 12 895 -
Retained earnings 422 055 370 975 516 405
1 252 086 1 253 947 1 339 736
Liabilities
Non-current liabilities
Guarantee share obligation 5 67 356 - -
Other financial liabilities 82 426 24 568 82 291
Deferred tax 243 235 227 323 245 620
393 017 251 891 327 911
Current liabilities
Shareholder loan - 10 700 -
Guarantee share obligation 5 13 000 - -
Other financial liabilities 6 158 11 001 3 143
Current tax payable 4 744 - 5 385
Trade and other payables 18 956 16 297 19 883
Bank overdraft 8 813 778 9 188
51 671 38 776 37 599
Liabilities directly associated with non- 4 20 359 - -
current assets classified as held for sale
Total equity & liabilities 1 717 133 1 544 614 1 705 246
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months ended Year ended
31 August 28 February
Notes 2015 2014 2015
Unreviewed Reviewed Audited
(R’000) (R’000) (R’000)
Continuing operations
Revenue 25 275 34 291 38 749
Cost of sales (7 826) (20 197) (6 414)
Gross profit 17 449 14 094 29 335
Other income 3 694 4 596 17 616
Operating expenses (21 695) (11 419) (26 441)
Operating profit / (loss) (552) 7 271 20 510
Finance income 17 3 31
Fair value adjustments 6 (79 637) 121 105 226 587
Gain on bargain purchase - 283 112 314 195
Finance costs (4 226) (704) (3 002)
Profit / (loss) before tax (84 398) 410 787 558 321
Taxation (908) (24 609) (46 511)
Profit / (loss) for the period from (85 306) 386 178 511 810
continuing operations
Discontinued operations
Profit / (loss) for the period from 7 (9 044) 2 350 9 255
discontinued operations
Profit for the period (94 350) 388 528 521 065
Other comprehensive income - - -
Total comprehensive income / (loss) for (94 350) 388 528 521 065
the year
Earnings / (loss) per share Cents Cents Cents
Basic and diluted
Continuing operations -8.81 44.46 57.57
Discounted operations -0.93 0.27 1.04
Total earnings / (loss) per share -9.74 44.73 58.61
Number of shares
Weighted average number shares in issue 968 829 227 868 538 173 889 037 602
Total number of shares in issue 1 060 529 031 1 027 029 031 1 027 029 031
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Notes Stated Share-based Retained Total equity
capital payment income /
reserve (Accumulated
loss)
(R’000) (R’000) (R’000)
Audited as at 28 February 2014 15 12 895 (17 554) (4 644)
Issue of shares 870 062 - - 870 062
Total comprehensive income for - - 388 528 388 528
the period
Reviewed as at 31 August 2014 870 077 12 895 370 974 1 253 946
Issue of shares 12 013 - - 12 013
Purchase of own / treasury (58 759) - - (58 759)
shares
Transfer between reserves - (12 895) 12 895 -
Total comprehensive income for - - 132 536 132 536
the period
Audited as at 28 February 2015 823 331 - 516 405 1 339 736
Issue of shares 2 6 700 - - 6 700
Total comprehensive income for - - (94 350) (94 350)
the period
Unreviewed as at 31 August 830 031 - 422 055 1 252 086
2015
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
6 months ended Year ended
31 August 28 February
Notes 2015 2014 2015
Unreviewed Reviewed Audited
(R’000) (R’000) (R’000)
Cash flows from operating activities
Cash (utilised in) / generated from 17 108 2 557 (1 092)
operations
Interest income 17 4 32
Finance costs (4 308) (1 249) (4 436)
Tax (paid) / received (882) - (149)
Net cash from operating activities 11 935 1 312 (5 645)
Cash flows from investing activities
Purchase of property, plant & equipment (192) (867) (867)
Additions to investment property (27 949) (20 009) (59 312)
Business combinations - (2 858) (2 858)
Additions to other assets (2 597) - (2 433)
Proceeds on sale of investment property - 1 000 1 000
Net cash from investing activities (30 738) (22 734) (64 470)
Cash flows from financing activities
Proceeds from other financial liabilities 24 850 21 996 62 249
Repayment of other financial liabilities (1 344) - -
Net cash from financing activities 23 506 21 996 62 249
Total cash movement for the period 4 703 574 (7 866)
Cash and cash equivalents at beginning (7 851) 15 15
of period
Cash and cash equivalents at end of (3 148) 589 (7 851)
period
Note 8
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
1 – INVESTMENT PROPERTIES: Investment Properties are carried at fair value and are current
income-generating assets or are held for development as future income generating assets.
2 – OTHER INVESTMENTS: During the period ended, Freedom acquired a 10% interest in Sunset
Bonsmara Proprietary Limited, through partial cash and share payment.
3 – INVENTORIES: Inventories represent properties held in Langebaan (see paragraph 2.4) and
Miami Village which are held for sale in the ordinary course of business.
4 – NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE: During the period
ended, the Stellenbosch Industrial Park was identified for disposal and reclassified as held for sale.
Subsequent to 31 August 2015, the property has transferred and the related liabilities settled.
5 – GUARANTEED SHARES OBLIGATION: This refers to obligations arising from
guaranteed shares issued at listing as identified in the Pre-Listing Statement issued on 5 June 2014.
6 – FAIR VALUE ADJUSTMENT: The fair value adjustment arose from the revaluation of the
guaranteed shares obligation, as indicated in Note 5 above.
7 – DISCONTINUED OPERATIONS: Profit or (loss) for the period attributable to discontinued
operations has been calculated as follows:
6 months ended Year ended
31 August 28 February
2015 2014 2015
Unreviewed Reviewed Audited
(R’000) (R’000) (R’000)
Revenue 2 618 1 002 4 030
Other income 346 40 282
Operating expenses (323) (78) (426)
Operating profit / (loss) 2 641 964 3 886
Finance income - - 1
Fair value adjustments to investment - 2 718 9 218
properties
Fair value adjustments upon (13 941) - -
reclassification to be held for sale
Finance costs (798) (546) (1 434)
Profit / (loss) before tax (12 098) 3 136 11 671
Taxation 3 054 (787) (2 416)
Profit / (loss) for the period from (9 044) 2 349 9 255
discontinued operations
8 – RESTATEMENT OF PRIOR PERIOD CASH FLOW: The Statement of Cash Flows
relating to the 31 August 2014 period has been restated to eliminate non-cash flow effects relating to
the business combination and investment property purchases for shares. The restatement is in line
with the announcement on the Stock Exchange News Service (“SENS”) made on 29 July 2015.
15
9 – HEADLINE AND DILUTED LOSS PER SHARE:
6 months ended Year ended
31 August 28 February
2015 2014 2015
Unreviewed Reviewed Audited
(R’000) (R’000) (R’000)
Continuing operations
Total comprehensive income (85 306) 386 179 511 810
Fair value adjustment 79 637 (117 515) (226 587)
Gain on bargain purchase - (283 112) (314 195)
Gain on disposal of subsidiary - (3 590) (3 590)
Profit on sale of investment property - (340) (340)
Tax effect of fair value adjustments - 23 097 43 907
Headline earnings / (loss) from (5 669) 4 719 11 005
continuing operations
Discontinued operations
Total comprehensive income (9 044) 2 350 9 255
Fair value adjustment 13 941 (2 718) (9 218)
Tax effect of fair value adjustments (3 097) 669 2 230
Headline earnings / (loss) from 1 800 301 2 267
discontinued operations
Total headline earnings (3 869) 5 020 13 272
Headline earnings / (loss) per share Cents Cents Cents
Basic and diluted
Continuing operations (0.59) 0.54 1.24
Discontinued operations 0.19 0.04 0.25
Headline earnings / (loss) per share (0.40) 0.58 1.49
Number of shares
Weighted average number shares in issue 968 829 227 868 538 173 889 037 602
Total number of shares in issue 1 060 529 031 1 027 029 031 1 027 029 031
9 – SEGMENT REPORT: The Group has two reportable segments, as described below. The
segments offer different types of revenue income and are managed separately to enable the Group to
adequately monitor the various risk profiles. For each of these segments, the Group’s CEO reviews
internal management reports on a monthly basis. The following summary describes each of the Group’s
reportable segments:
- Property rental income
- Development property sales
Other operations include the Group’s administrative and finance costs. None of these segments meet
any of the quantitative thresholds for determining reportable segments in the current period.
SEGMENT REPORT
Rental Income Development Total
Property Sales Operating
Segments
(R’000) (R’000) (R’000)
Statement of comprehensive income – 31
August 2015
Continuing operations
Segment revenue 11 297 13 978 25 275
Expenditure (8 401) (8 941) (17 342)
Segment result from continuing 2 896 5 037 7 933
operations
Discontinued operations
Segment revenue 2 618 - 2 618
Expenditure (775) - (775)
Segment results from discontinued
operations 1 843 - 1 843
Total segment results 4 739 5 037 9 776
Statement of comprehensive income – 31
August 2014
Continuing operations
Segment revenue 7 319 26 972 34 291
Expenditure (4 475) (20 197) (24 672)
Segment result from continuing 2 844 6 775 9 619
obligations
Discontinued operations
Segment revenue 5 298 - 5 298
Expenditure (623) - (623)
Segment results from discontinued
operations 4 675 - 4 675
Total segment results 7 519 6 775 14 294
SEGMENT REPORT
Rental Income Development Total
Property Sales Operating
Segments
(R’000) (R’000) (R’000)
Statement of financial position – 31
August 2015
Non-current assets
Investment properties 1 523 125 - 1 523 125
Operating lease asset 2 193 - 2 193
Current assets
Inventories - 80 284 80 284
Trade and other receivables 22 622 3 674 26 296
Non-current assets classified as held for 47 266 - 47 266
sale
Segment assets 1 595 206 83 958 1 679 164
Non-current liabilities
Deferred tax 243 235 - 243 235
Other financial liabilities 82 426 - 82 426
Current liabilities
Other financial liabilities 6 157 - 6 157
Trade and other payables 11 357 471 11 828
Liabilities directly associated with non-
current assets classified as held for sale 20 359 - 20 359
Segment liabilities 363 534 471 364 005
Statement of financial position – 31
August 2014
Non-current assets
Investment properties 1 412 940 - 1 412 940
Operating lease asset - - -
Current assets
Inventories - 87 177 87 177
Trade and other receivables 2 118 - 2 118
Segment assets 1 415 058 87 177 1 502 235
Non-current liabilities
Deferred tax 227 323 - 227 323
Other financial liabilities 24 568 - 24 568
Current liabilities
Other financial liabilities 11 001 - 11 001
Trade and other payables 1 821 - 1 821
Segment liabilities 264 713 - 264 713
19
RECONCILIATION OF REPORTABLE SEGMENT REVENUE, PROFIT OR LOSS,
ASSETS AND LIABILITIES AND OTHER MATERIAL ITEMS:
August 2015 August 2014
(R’000) (R’000)
Revenues
Total revenue for reportable segments 27 893 39 589
Profit or loss for reportable segments 9 776 14 294
Other profit or loss - -
Unallocated amounts - -
Operating expenses (12 195) (7 205)
Finance costs ( 528) (442)
Other income 12 340
Interest income 17 4
Gain on bargain purchase - 283 112
Fair value adjustment (93 578) 123 823
Profit/(loss) before taxation (96 496) 413 926
Assets and liabilities not allocated to
business segments:
Assets
Property, plant and equipment 247 4 461
Deferred tax 681 -
Other financial assets 2 689 -
Other investments 9 342 -
Current tax receivable 172 -
Trade and other receivables 19 175 36 551
Cash and cash equivalents 5 665 1 367
Total unallocated assets 37 971 42 379
Liabilities
Shareholder loan - 10 700
Guaranteed share obligation 80 356 -
Current tax payable 4 743 -
Trade and other payables 7 127 14 477
Bank overdraft 8 813 778
Total unallocated liabilities 101 039 25 955
By order of the Board
NT Govender JF Pretorius
Chief Executive Officer Chief Financial Officer
Monday, 30 November 2015
COMPANY INFORMATION Company Secretary: Statucor Proprietary Limited
Freedom Property Fund Limited Registered Office: 24 Peter Place, Lyme Park, Sandton, 2196
(Incorporated in the Republic of South Africa) Postal Address: PO Box 752, Cramerview, 2060
(Registration No. 2012/129186/06) Transfer Secretaries: Computershare Investor Services Proprietary Limited, Ground
Share code: FDP ISIN: ZAE000185260 Floor, 70 Marshall Street,
(“Freedom” or “the Company” or “the Group”) Johannesburg 2001 (PO Box 61051, Marshalltown, 2107)
Directors: WS Grobbelaar#* (Chairman); NT Govender (Chief Executive Officer); Sponsor: KPMG Servicess Proprietary Limited, KPMG Wanooka Place 1 Albany
PD Dexter #*; JF Pretorius (Chief Financial Officer); BM Molefi#*; SB Rule*; WH Road, Parktown, 2193
Rule*; WB Stocks#* (#Independent *Non-executive)
21
Date: 30/11/2015 05:32:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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