Wrap Text
Unaudited condensed consolidated interim results for the period ended 31 August 2022
Delta Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/005129/06)
JSE Share code: DLT ISIN: ZAE000194049
(Approved as a REIT by the JSE)
("Delta" or "the Company" or "the Group")
SHORT-FORM ANNOUNCEMENT
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE PERIOD ENDED 31 AUGUST 2022
- Weighted average rental R125.33m2 (February 2022: R107.0m2)
- B-BBEE Level 1
- Rental collections 105.4% (February 2022: 112.7%)
- All-in-cost of debt 8.1% (February 2022: 7.4%)
- SA REIT Loan to value 58.2% (February 2022: 57.8%)
- NAV per share R4.27 (February 2022: R4.77)
Introduction
Global and local economic headwinds have arrested the much-anticipated post-pandemic economic recovery. Internationally, the
Russian invasion of Ukraine has resulted in rising food and energy costs globally, in addition to an increase in interest rates.
Locally, the resumption of almost daily loadshedding further exacerbated the economic environment.
The Delta Group has over the reporting period focused on capitalising on the gains made in achieving our strategic objectives.
Portfolio optimisation through disposals remains a key strategic objective. Having successfully transferred one property for
R74 million during the period under review, we are excited that sales agreements have been concluded for a further
nine properties to the value of R232 million.
The economic headwinds continue to create a challenging environment for letting. Vacancies increased by 2.6% to 33.9% over the
period under review.
We are delighted with the collection rate achieved of 105.4%, continuing from the end of the previous financial year-end with
exceeding a collection rate of over 100%.
We thank the Board for their support and our teams for their dedication and commitment.
Financial results
Rental income decreased by 12.7% from R724 million to R632 million, largely driven by a decline in contractual rental income due
to rental reversions and increasing vacancies. Property operating expenses continue to be well contained and have reduced by 7.9%
from R273 million for the period ended 31 August 2021 to R251 million. Increased vacancies contributed to the decrease in utility
costs, while repairs and maintenance have contracted due to preventative maintenance in the prior period. Provision for bad debts
have also decreased significantly compared to 31 August 2021.
Administrative expenses contracted by 7.3%, primarily due to the costs associated with the review of the prior period interim
results and additional professional fees.
Delta reported a R7.4 million gain on foreign exchange due to its investment in Grit Real Estate Income Group ("Grit"). In the
comparative period, the Group reported a foreign exchange loss of R3.0 million.
Unaudited Reviewed
period period
ended ended
31 August 31 August %
Financial results 2022 2021 change
Rental income (R'000) 631 747 723 984 (12.7)
Basic and diluted earnings per share
Basic and diluted earnings/(loss)
per share (cents) (42.98) 20.71 (307.5)
Basic and diluted headline earnings/(loss)
per share (cents) 9.45 20.81 (54.6)
SA REIT funds from operations
per share (cents)* 9.20 24.86 (63.0)
SA REIT NAV per share (cents)
(excluding non-controlling interest) 427 525 (18.6)
* Previously distribution per share.
Letting and vacancies
Over the period of review, vacancies have increased to 33.9%. Despite this, Delta renewed 41 leases totalling 156 032m2 of which the
majority relate to National Department of Public Works & Infrastructure followed by state owned entities and private commercial and
retail tenants. Of the leases signed, two-thirds have a tenure of 12 months and the balance a tenure of 36 to 60 months. Of the
remaining 12 leases to be renewed with National Department of Public Works & Infrastructure, one has been subsequently concluded resulting in
11 being outstanding with a total GLA of 45 950m2.
Dividend
Delta's SA REIT Funds from operations per share amounts to 9.20 cents for the period ended 31 August 2022
(31 August 2021: 24.86 cents per share).
In performing the Solvency and Liquidity Test conducted in terms of section 46 of the Companies Act, which takes into consideration
the working capital cash flow forecast, expected working capital requirements, capital expenditure requirements and contracted tenant
installations relating to historic lease renewals. The Board, resolved not to declare an interim dividend for the period ending
31 August 2022 (31 August 2021: Nil).
Events after the reporting period
Delta continues to advance its disposal programme with sales agreements for a further nine properties being concluded for an aggregate
price of R232 million. These funds will be utilised to reduce the Groups debt facilities.
In addition to the concluded agreements, Delta is currently negotiating several deals approximating a sales price of R190 million. The
proceeds will be applied to the settling of debt facilities.
The contents of this short-form announcement are the responsibility of the Board of directors of Delta. This short-form announcement is
a condensed version of the full announcement in respect of the unaudited condensed consolidated interim results for the period ended
31 August 2022 and does not contain full or complete details of the financial results.
Any investment decisions made by investors and/or shareholders should be based on consideration of the full announcement as a whole and
shareholders are encouraged to review the full announcement, which is available on the JSE website at
https://senspdf.jse.co.za/documents/2022/jse/isse/DLT/ie2022.pdf and can be found on the Group's website
https://www.deltafund.co.za/financials. The full announcement is available for inspection at the registered office, during business hours,
at no charge and any requests to the Company Secretary for copies will be dealt with by referring the requester to the appropriate link on
the Company's public website under the Investor Relations tab.
Prospects
The property sector continues to be negatively affected by the lacklustre state of the economy. Given these market conditions, we expect
growth to remain muted.
By order of the Board
P Langeni
(Chairman)
S Mbanjwa
(CEO)
7 November 2022
Directors: P Langeni~ (Chairman), S Mbanjwa* (CEO), M de Lange* (CFO), B Masinga~, N Khan~, DN Motau^, MJN Njeke#, MCR Rampheri^, P Stock^
*Executive, ^Independent non-executive, ~Non-executive, #Lead independent director
Registered office: Silver Stream Office Park, 10 Muswell Road South, Bryanston,
(PostNet Suite 210, Private Bag X21, Bryanston, 2021)
Transfer secretaries: Computershare Investor Services Proprietary Limited
Sponsor: Nedbank Corporate and Investment Banking, a division of Nedbank Limited
http://www.deltafund.co.za
Date: 07-11-2022 02:00:00
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