SA Corp interim results June 2018











Revenue for the interim period increased to R1.2 billion (2017: R1 billion). Operating income rose to R549.9 million (2017: R544.2 million), profit after taxation decreased to R772 million (2017: R845.1million), while headline earnings per share increased to 21.93 cents per share (2017: 21.76 cents per share).

Dividend
The company has declared a distribution of 21.70 cps on 4 September 2018. The directors are not aware of other significant events between the end of the financial period under review and the date of this report.

Strategy and prospects
With pedestrian South African economic growth prospects, SA Corporate will be focusing on the following activities to ensure sustainable distribution growth into the future:
-Consolidating a quality industrial property portfolio. The Company will continue to dispose of those properties that do not meet investment criteria whilst investing in existing properties providing superior logistics space to tenants with covenant strength.
-Divesting from its remaining commercial properties given the continued weak prospects for this sector.
-Concentrating the Company's retail property portfolio on food services and convenience to be defensive against the rising competition to ˘bricks and mortar÷ retail emanating from e-commerce.
-Establishing a quality residential rental portfolio to offer investors diversification to other South African property sectors.

The company has experienced more challenging trading conditions than those forecast at the beginning of 2018. In particular these have included an almost doubling of the ground rentals payable to Transnet in respect of leasehold properties in Maydon Wharf, renewal of historic long leases to blue chip logistics tenants with greater negative reversions than expected, downscaling by a large national retail tenant, reduced retail turnover rental and greater than forecast municipal charges in the Johannesburg residential portfolio. Based on the aforementioned the Board's view is that the distribution growth forecast for the second half of 2018 will not be realised and a similar negative decline in distribution growth can be anticipated in the second half of 2018 as has been the case in the first half of the financial year.







2018-09-04 17:40:51