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Short-Form Announcement: Unaudited Interim Results And Dividend Declaration For The Six Months Ended 31 August 2021
SPEAR REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2015/407237/06)
Share code: SEA
ISIN: ZAE000228995
LEI: 378900F76170CCB33C50
Approved as a REIT by the JSE
(“Spear” or “the Company”)
SHORT-FORM ANNOUNCEMENT: UNAUDITED INTERIM RESULTS AND DIVIDEND
DECLARATION FOR THE SIX MONTHS ENDED 31 AUGUST 2021
1. SALIENT FEATURES
- Distributable income per share (“DIPS”) increased by 6.03% to 38.89 cents per share,
from 36.68 cents per share in the prior corresponding period;
- Distribution per share increased by 12.68% to 33.06 cents per share (based on a 85%
pay-out ratio), from 29.34 cents per share in the prior corresponding period (based on
a 80% pay-out ratio);
- Interim collections of 97.33% vs billings as measured at 11 October 2021;
- Management has successfully renewed/re-let 82 018 square metres at a positive
reversion of 22.11%. The renewals include the new 15 on Orange hotel lease of
16 179 square metres and when excluded a total reversion of negative 5.78% was
achieved;
- Portfolio occupancy rate of 92.79% and 100% Western Cape based;
- Investment property value increased 1.34% to R4.55 billion, from R4.49 billion
reported as at 28 February 2021;
- Loan-to-Value increased to 45.91%, from 45.81% reported as at 28 February 2021;
- Renewed R513 million of debt and reduced weighted average cost of debt by 25bps
to 7.01% from 7.26% as reported at 28 February 2021; and
- New fixed income lease concluded for 15 on Orange hotel commenced 15 August
2021.
- Spear remains on track to achieve management's guidance set out to the market for
FY2022.Management’s guidance remains a DPS growth of 6% – 8% for FY2022
based on an 80% pay-out ratio.
2. KEY FINANCIAL HIGHLIGHTS
Unaudited six Unaudited six Change %
months ended 31 months ended 31
August 2021 August 2020
Group Revenue (R’000) 286 926 254 098 12.92%
Distributable Earnings 79 305 73 222 8.30%
(R’000)
Earnings per share (cents) 32.52 (0.58) >100%
Headline earnings per share 43.10 39.20 9.95%
(cents)
Distributable income per 38.89 36.68 6.03%
shares (cents)
Distribution per share (cents) 33.06 29.34 12.68%
Pay-out ratio 85% 80% -
Net asset value per share 1197 1179 1.53%
(cents)
3. DIVIDEND DECLARATION
The directors resolved to declare a final gross dividend of 33.05922 cents per share from
income reserves in respect of the six months ended 31 August 2021. The dividend
amount, net of South African dividend tax of 20%, is 26.44738 cents per share for those
shareholders who are not exempt from dividend withholding tax or are not entitled to a
reduced rate in terms of the applicable double-tax agreement. The number of ordinary
shares in issue at the declaration date is 214 615 571 and the income tax number of the
Company is 9068437236.
The salient dates of the dividend declaration are:
Declaration date Tuesday, 26 October 2021
Last day to trade cum dividend Tuesday, 16 November 2021
Trading ex-dividend commences Wednesday, 17 November 2021
Record date Friday, 19 November 2021
Date of payment Monday, 22 November 2021
Share certificates may not be dematerialised or rematerialised between Wednesday, 17
November 2021 and Friday, 19 November 2021, both days inclusive.
In respect of dematerialised shareholders, the distributions will be transferred to the
CSDP/broker accounts on Monday 22, November 2021. Certified shareholders’
distribution payments will be paid to certified shareholders bank accounts on Monday, 22
November 2021.
Tax implications
As Spear is a REIT, the distribution meets the definition of a ‘qualifying distribution’ for the
purposes of section 25BB of the Income Tax Act, No. 58 of 1962 (Income Tax Act).
Qualifying distributions received by South African tax residents will form part of their gross
income in terms of section 10(1)(k)(i)(aa) of the Income Tax Act. Consequently, these
distributions are treated as income in the hands of the shareholders and are not subject
to dividends withholding tax. The exemption from dividends withholding tax is not
applicable to non-resident shareholders, but they may qualify for relief under a tax treaty.
South African tax residents
The dividend received by or accrued to South African tax residents must be included in
the gross income of such shareholders and will not be exempt from income tax (in terms
of the exclusion to the general dividend exception, contained in paragraph (aa) of section
10(1)(k)(i) of the Income Tax Act, because it is a dividend distributed by a REIT. The
dividend is exempt from dividend withholding tax in the hands of South African tax resident
shareholders, provided that the South African resident shareholders provide the following
forms to the Central Securities Depository Participant (“CSDP”) or broker in respect of
uncertificated shares, or to the company, in respect of certificated shares:
a) a declaration that the dividend is exempt from dividend tax; and
b) a written undertaking to inform the CSDP, broker or the company, should the
circumstances affecting the exemption change or the beneficial owner cease to be the
beneficial owner, both in the form prescribed by the Commissioner for the South
African Revenue Service.
Shareholders are advised to contact their CSDP, broker or the company to arrange for
the above-mentioned documents to be submitted prior to payment of the dividend, if such
documents have not already been submitted.
Non-residents shareholders
Dividends received by non-resident shareholders will not be taxable as income and
instead will be treated as an ordinary dividend which is exempt from income tax in terms
of the general dividend exemption in section 10(1)(k)(i) of the Income Tax Act. It should
be noted that up to 31 December 2013, dividends received by non-residents from a REIT
were not subject to dividend withholding tax. Since 1 January 2014, any dividend received
by a non-resident from a REIT will be subject to dividend withholding tax at 20%, unless
the rate is reduced in terms of any applicable agreement for the avoidance of double
taxation (“DTA“) between South Africa and the country of residence of the shareholder
concerned. Assuming dividend withholding tax will be withheld at a rate of 20%, the net
dividend amount due to non-resident shareholders is 26.44738 cents per share. A
reduced dividend withholding rate in terms of the applicable DTA may only be relied on if
the non-resident shareholder has provided the following form to their CSDP or broker in
respect of uncertificated shares, or the company, in respect of certificated shares:
a) a declaration that the dividend is subject to a reduced rate as a result of the application
of DTA; and
b) a written undertaking to inform their CSDP, broker or the company, should the
circumstances affecting the reduced rate change or the beneficial owner cease to be
the beneficial owner, both in the form prescribed by the Commissioner for the South
African Revenue Service.
Non-resident shareholders are advised to contact their CSDP, broker or company to
arrange for the above-mentioned documents to be submitted prior to payment of the
dividend, if such documents have not already been submitted.
Holders of uncertificated shares must ensure that they have verified their residence status
with their CSDP or broker. Holders of certificated shares will be asked to complete a
declaration to the company.
4. SHORT-FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the directors of the Company. It
contains only a summary of the information in the full announcement (“Full
Announcement”) and does not contain full or complete details. The Full Announcement
can be found at:
https://senspdf.jse.co.za/documents/2021/JSE/ISSE/SEAE/SEAHY22.pdf
Copies of the Full Announcement is also available for viewing on the Company’s
website at https://spearprop.co.za/pdf/investor-relations/SEAHY22.pdf
In addition, electronic copies of the Full Announcement may be requested and obtained,
at no charge, from the Company at info@spearprop.co.za and from its sponsor, PSG
Capital.
Any investment decisions by investors and/or shareholders should be based on
consideration of the Full Announcement, as a whole.
The Company has based this short-form on the financial results for the six months ended
31 August 2021 which have not been reviewed or audited by the Company’s auditors.
5. RESULTS PRESENTATION
Shareholders are invited to view Spear’s interim results presentation to be broadcasted
on YouTube at 12h00 SAST today, 26 October 2021.
Presentation details:
- View and listen mode;
- Link: https://youtu.be/W2Ap0hdMvDk;
- Presentation slides will be made available on Spear's website shortly before the
broadcast of the presentation under investor relations / financial results /
presentations, at the following link: https://spearprop.co.za/investor-relations/
- Questions may be e-mailed during the presentation to: info@spearprop.co.za
Cape Town
26 October 2021
Sponsor
PSG Capital
Date: 26-10-2021 07:05:00
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