Spearhead, the Cape-based property group, has increased headline earnings per unit by 43% in the half-year to 31 December 2004, and has raised its interim distribution by 19% to 95c per unit.

Reporting "exceptionally favourable" results for the half-year, Spearhead says that rentals and other operating income led to a 23% rise in basic earnings per unit, with headline earnings per unit rising by 43%.

Several of the group's major initiatives came together in the half-year to deliver these results. Tenants' turnover contributions provided much of the lift in rental income. Savings were made in maintenance costs on the group's properties, and the interest-rate drop in August 2004 also helped.

Spearhead, which was the top-performing property company on the JSE in 2004 and also in the 2002-2004 period, focuses on the Cape Town area, providing hands-on management of its own properties and avoiding the costs and conflicts of interest of outsourcing. It also holds some investments in other property groups.

Spearhead was in the news last week when it BEE investors took up a sizeable interest. With existing black shareholders, the BEE investor base will now move to more than 25%, exceeding the expected criteria of the awaited property charter. New shareholders Lance Manala and Abu Verachhia will join the board.

Spearhead is pressing ahead with expansion of its portfolio of properties, and several acquisitions and co-developments of existing and new projects were made. Among them, and as exceptions to its mainstream holdings of retail, commercial, and industrial properties, Spearhead has taken part in two high-profile residential projects. One is South Seas, a landmark apartment block opposite the lighthouse in Mouille Point, which is now largely sold out. A future landmark because of its size and prominence is Wembley Square, in Gardens (also sold-out), and its related commercial project, Wembley Commercial, now being built.

Other new property investments include existing shopping and office complexes in high-profile areas, and industrial parks in the Airport Industria area and elsewhere.

Mike Flax, CEO of Spearhead, says that the company has had an "enviably strong" start to the current financial year, and is expecting enhanced growth in the rest of the year. It believes it is on a rising curve that will propel it forward for several years.