Attacq final results June 2018
Gross revenue was recorded at R2.139 billion (R2017: R2.061 billion) and operating profit rose to R1.254 billion (2017: R793.4 million). Profit for the year attributable owners of the holding company shot up to R2.652 billion (2017: R630.2 million). Furthermore, headline earnings per share jumped to 316.5 cents per share (2017: 23.0 cents per share).
Declaration of a cash dividend
The board declared a final cash dividend of 74.0 cents per share, for the year ended 30 June 2018, out of the company's distributable income.
South Africa is in a phase of low economic growth resulting in both constrained consumer spend and corporate expansion. The current weak property fundamentals provide headwinds to the sector.
Attacq's retail portfolio has proven defensive qualities evidenced by average annual trading density growth of 5.3% under challenging conditions. This portfolio should continue to provide sustainable growth in distributable earnings.
Notwithstanding the difficult market conditions, the development of Waterfall is expected to continue, albeit at a slower pace. The location, as evidenced by existing and secured future tenants, remains an attractive proposition for corporates considering office consolidations and new, modern, green-rated premises.
On the international front, Attacq expects to benefit from increasing distributions from its MAS investment underpinned by MAS' income-generating investments and its acquisition and development pipeline. Attacq is not pursuing any further acquisitions or expansions in the rest of Africa.
Attacq will continue to explore opportunities to recycle capital with a view to the redeployment of funds into earnings accretive developments and the reduction of debt.
Attacq has elected to adopt distribution per share as its relevant financial performance measurement due to its conversion to a REIT.
Attacq is targeting distribution growth of between 7.5% and 9.5% for the 2019 financial year and between 13.0% and 15.0% for the 2020 financial year. This is based on the following assumptions:
*Achieving forecasted rental income based on contractual terms and anticipated market-related renewals
*The expected roll-out of the current and budgeted development portfolio
*MAS achieving its revised distribution target as communicated on 7 September 2018
*No unforeseen circumstances such as major corporate tenant failures or macro-economic instability