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Johannesburg - Hospitality Property Fund
(HPA/HPB), a property loan stock company that invests exclusively in hotel
and leisure properties, said on Wednesday that total distributable earnings
for the year ended June 30, down 3% from 2008.
The fund's units in issue comprise A- and B-linked units with A-linked
units having a preferential claim to earnings with capped growth, while the
B-linked units receive the balance of earnings.
The group said A-linked units' annual distribution of 110.76c grew
by 5% over the previous year, in line with the fund's distribution
structure, while distributions in respect of the B-linked unit declined by
8.1% to 152.65c over the 12-month period.
"The effect of the global financial crisis that is being felt across all
sectors of the South African economy has become particularly evident in the
hospitality sector since the latter part of last year. According to the
Smith Travel Research Global Hotel Benchmark report, average occupancies in
South Africa for the first six months of 2009 declined by 13.5% compared to
the same period in 2008," it said.
"A similar decline in occupancies experienced by the Fund has resulted
in lower distributable earnings being achieved. While the A-linked units'
distribution for the year remained unaffected, the decrease in the fund's
distributable earnings has had a leveraged effect on the B-linked units'
distribution," the group added.
Hospitality Property Fund said that as a result of deteriorating trading
conditions in the second half of the year the total distributable earnings
declined by 15.7% compared to the same period in 2008.
The group said that a number of initiatives had been implemented to
restructure business units to address declining operating profits.
It advised that Hospitality has reached an agreement with the
shareholders of Hospitality Manco, being Grapnel Property Asset Manager and
Hotel Tourism and Leisure Asset Management, to acquire all of the issued
shares of and shareholders' claims against Hospitality Manco.
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