Distribution growth for Madison

Johannesburg - South African property fund Madison Property, which is responsible for the asset management of listed funds ApexHi Properties, Redefine Income Fund and Hyprop Investments, on Monday announced that it had declared a distribution of 42 cents per linked unit for the six months ended December 2008.

The group said that this, together with the interim distribution of 39 cents, amounted to a total distribution of 81 cents for the year, up 6.6% on the total distribution of 76 cents for 2007.

"Madison's distribution growth was achieved despite a 14% decline, compared to 2007, in the weighted average unit price of its managed funds, which form the basis for its asset management fees," it said.

Headline earnings per linked unit for the full year ended December 31 2008 were 42.61 cents, against 48.22 cents per unit in the previous period.

Group revenue was at R195.9m from the R193.1m reported the previous year.

Operating profit was at R56.4m, down from R84.2m in 2007.

Madison noted that its development activity was somewhat lower than in 2007, prevailing from market conditions.

"Increased hurdle rates in the funds under management meant that a number of planned developments were not viable in the current environment," says Madison director Mike Flax.

Looking ahead, Madison director Wolf Cesman said: "We expect the unit prices of the managed funds to increase during 2009 as the market responds to anticipated reductions in interest rates."

"However, in line with current international trends, conditions in the property sector are tightening, which could impact performance," he noted.

"We anticipate that, barring unforeseen changes in market conditions, the total distribution for the year ending 31 December 2009 should be between 85 cents and 87 cents per linked unit, an increase of between 5% and 7% on 2008," said Cesman.

- I-Net Bridge