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Condensed consolidated reviewed interim financial results for the six months ended 30 September 2016
Safari Investments RSA Ltd
(Approved as a REIT by the JSE Limited)
(Registration number: 2000/015002/06)
JSE Code: SAR
ISIN: ZAE000188280
Country of incorporation: Republic of South Africa(7 July 2000)
(“the company” or “the group” or “Safari”)
www.safari-investments.com
Condensed consolidated reviewed interim financial results
for the six months ended 30 September 2016
Income-generating retail portfolio
for the six months ended 30 September 2016
Denlyn Atlyn Maunde
Geographic Mamelodi, Atteridgeville, Atteridgeville,
Gauteng Gauteng Gauteng
Trading since 2003 2006 2015
Total built area 42 200m2 41 200m2 10 550m2
Occupation levels 100% 100% 82%
National tenants 93% 92% 64%
Number of shops 106 95 31
Annual trading density/m2 R44 000/m2 R30 500/m2 R14 300/m2
September 2016*
Year on year growth in 14% 13% N/A
trading density
Soweto
The Private
Thabong Victorian Day-hospital
Geographic Sebokeng, Heidelberg, Soweto,
Gauteng Gauteng Gauteng
Trading since 2007 1997 2016
Total built area 43 100m2 15 400m2 2 817m2
Occupation levels 99% 97% 100%
National tenants 88% 93% N/A
Number of shops 104 40 N/A
Annual trading density/m2 R24 100/m2 R40 700/m2 N/A
September 2016*
Year on year growth in 11% 13% N/A
trading density
*This excludes furniture and financial services.
National average trading density: R28 400/m2 (centres in category of
Atlyn, Denlyn and Thabong) and R37 200/m2 (centres in category of The
Victorian and Maunde). The total built area of the property portfolio
increased to 182 267m2.
(Source: IPD Q2 2016).
Condensed consolidated statement of financial position
as at 30 September 2016
Reviewed Reviewed Audited
30 September 30 September 31 March
2016 2015 2016
Notes R’000 R’000 R’000
Assets
Non-current assets
Investment property 1 2 212 487 1 914 493 2 054 690
Fair value of
investment property 2 243 481 1 946 816 2 088 584
Operating lease asset (30 994) (32 323) (33 894)
Intangible assets 9 20 14
Operating lease asset 2 27 409 28 645 27 809
2 239 905 1 943 158 2 082 513
Current assets
Inventories 3 142 077 50 154 96 905
Trade and other
receivables 5 50 496 18 724 28 829
Operating lease asset 2 3 585 3 678 6 085
Current tax receivable 1 638 1 638 1 638
Cash and cash
equivalents 3 031 2 933 3 398
200 827 77 127 136 855
Total assets 2 440 732 2 020 285 2 219 368
Equity and liabilities
Equity
Stated capital 4 1 154 020 1 047 895 1 116 566
Retained income 410 719 467 508 439 466
1 564 739 1 515 403 1 556 032
Liabilities
Non-current liabilities
Interest bearing
borrowings 6 842 250 390 738 627 233
Deferred tax 19 678 15 260 18 478
861 928 405 998 645 711
Current liabilities
Trade and other
payables 5 14 065 14 409 11 096
Interest bearing
borrowings 6 – 84 475 6 529
14 065 98 884 17 625
Total liabilities 875 993 504 882 663 336
Total equity and
liabilities 2 440 732 2 020 285 2 219 368
Condensed consolidated statement of comprehensive income
for the six months ended 30 September 2016
Reviewed Reviewed
Interim Interim Audited
30 September 30 September 31 March
2016 2015 2016
Notes R’000 R’000 R’000
Revenue 91 933 80 907 171 631
Property revenue 7 94 833 79 902 169 055
Operating lease 2 (2 900) 1 005 2 576
Other income 2 546 624 1 185
Operating expenses 8 (29 920) (21 708) (48 687)
Operating profit 64 559 59 823 124 129
Interest income 101 410 465
Finance costs (33 909) (13 416) (36 254)
Fair value adjustment – – (4 997)
Profit before taxation 30 751 46 817 83 343
Taxation (1 200) 1 418 (1 800)
Profit for the period 29 551 48 235 81 543
Other comprehensive
income – – –
Total comprehensive
income for the period 29 551 48 235 81 543
Earnings and diluted earnings
per share (cents) 16 28 46
Explanatory notes to the condensed consolidated statement of financial
position and condensed consolidated statement of comprehensive income
for the six months ended 30 September 2016
1. It is the group’s policy to have the investment property portfolio
valued on an annual basis by an independent valuator. The previous
valuation was done on 31 March 2016 and the next valuation will be done
on 31 March 2017. These valuations are considered to be Level 3 on the
fair value hierarchy as per IFRS 13 Fair Value Measurement. There have
been no movements of inputs between fair value hierarchy levels nor have
there been any changes in the methods of valuation as mentioned above. If
the valuator were to increase both the capitalisation and discount rates
by 0,50% the total valuation would decrease by R88 300 000. The expansion
of Thabong Shopping Centre in Sebokeng, Denlyn Shopping Centre in
Mamelodi and the Victorian shopping centre in Heidelberg, together with
the completion of earth works of the Nkomo street property in
Atteridgeville and continued construction of the Platz am Meer property
in Swakopmund resulted in an 8% increase in the value of investment
property since 31 March 2016. The construction costs are financed by a
R900 million Absa facility (interest bearing borrowings).
2. Most of Safari’s current lease agreements are in the second half of
the lease term. Renewals are negotiated well in advance with an average
annual escalation in excess of 8%.
3. Luxury upmarket residential units are currently under construction on
30% of Erf 71, Swakopmund, Erongo Region, Registration division G,
measuring 8 712m2. The 36 luxury upmarket apartments will be available
for sale in the ordinary course of business.
4. Safari raised in total R5,9 million (equating to 740 964 ordinary
Safari shares) through the dividend reinvestment process during June 2016.
Shareholders had the option to reinvest their distribution in ordinary
shares at a price of R8 per share. The capital raised through the
dividend reinvestment process was utilised to settle part of the facility
used to finance the construction of current projects.
In the 2017 financial year Safari will distribute a minimum of 75% of its
profits to the shareholders as per the REIT requirements, and the
shareholders will be liable for the tax on the profit distributed.
5. Trade and other receivables fluctuated between the comparative periods,
due to the Value Added Tax (“VAT”) receivable from the South
African/Namibian Revenue Services for the financial period under review.
The VAT receivable is due to the current construction projects at the
various properties and a substantial amount was received from the
Namibian Revenue Service subsequent to 30 September 2016.
Trade and other payables consist of deposits (tenants) held at current
retail centres, income received in advance and accrued expenses.
6. The bulk of current and non-current liabilities were directly related
to the facility being utilised to finance the project development of the
Platz am Meer Waterfront Centre and expansions to existing properties as
mentioned in note 1 above. This resulted in a significant increase in
finance cost for the period. Also to be noted is the increase in the
prime lending rate coupled with an increase in facility lending rate.
7. The September 2016 interim property revenue increased by 19% compared
to the September 2015 interim figure. The increase is a result of annual
rental escalations and an improved tenant mix together with expansions at
Thabong Centre and the completion of Maunde Shopping Centre which
commenced trading during August 2015. Furthermore the Soweto Private Day-
hospital which now also forms part of Safari’s property portfolio has
been generating rental income since January 2016.
8. The September 2016 interim operating expenses increased by 38%
compared to the September 2015 interim figure due to a significant back-
dated increase in the Sebokeng property’s rates and taxes and bond
facility fees on the new Absa R900 million loan facility. It must to be
noted that if the above is not taken into account the operation expenses
would have remained at a healthy 29%.
Condensed consolidated statement of cash flows
for the six months ended 30 September 2016
Reviewed Reviewed
Interim Interim Audited
30 September 30 September 31 March
2016 2015 2016
R’000 R’000 R’000
Cash flows from operating
activities
Cash generated from
operations 3 595 41 372 43 946
Interest income 101 410 465
REIT distribution (52 371) (42 166) (88 303)
Finance costs (33 909) (13 416) (36 254)
Tax received – 4 295 4 295
Net cash used in operating
activities (82 584) (9 505) (75 851)
Net cash used in investing
activities
Purchase of investment
property and cost capitalised (157 797) (208 066) (353 260)
Net cash used in investing
activities (157 797) (208 066) (353 260)
Net cash received from
financing activities
Proceeds on share issue 31 526 (86) 53 371
Proceeds from interest
bearing borrowings 340 307 303 051 587 061
Repayment of interest
bearing borrowings (131 819) (91 229) (216 691)
Net cash from financing
activities 240 014 211 736 423 741
Total cash movement for the
period (367) (5 835) (5 370)
Cash at the beginning of the
period 3 398 8 768 8 768
Total cash at the end of the
period 3 031 2 933 3 398
Condensed consolidated statement of changes in equity
for the six months ended 30 September 2016
Share capital/ Retained Total
stated capital income equity
R’000 R’000 R’000
Balance at 1 April 2015
(Audited) 1 031 571 477 850 1 509 421
Profit for the year – 81 543 81 543
Other comprehensive income – – –
Total comprehensive income
for the year – 81 543 81 543
Capital raising fee on
shares paid for and issued
in the current year (718) – (718)
Shares issued through
capitalisation dividend 16 410 – 16 410
Shares issued through
capitalisation dividend 15 214 – 15 214
Shares issued through rights
offer 54 089 – 54 089
REIT distribution – (119 927) (119 927)
Total contributions by and
distributions to owners of
company recognised directly
in equity 84 995 (119 927) (34 932)
Balance at 1 April 2016
(Audited) 1 116 566 439 466 1 556 032
Profit for the year – 29 551 29 551
Other comprehensive income – – –
Total comprehensive income
for the year – 29 551 29 551
Shares issued through
capitalisation dividend 5 928 – 5 928
Shares issued through
private placement 31 579 – 31 579
Capital raising fee on
shares paid for and issued
in the current year (53) – (53)
REIT distribution – (58 298) (58 298)
Total contributions by and
distributions to owners of
company recognised directly 37 454 (58 298) (20 844)
in equity
Balance at 30 September 2016
(Reviewed) 1 154 020 410 719 1 564 739
Earnings per share
for the six months ended 30 September 2016
Reviewed Reviewed
Interim Interim Audited
30 September 30 September 31 March
2016 2015 2016
Earnings used in the
calculation of basic
earnings per share (’000) 29 551 48 235 81 543
Ordinary shares in issue
(’000) 186 871 174 262 182 182
Weighted average number of
ordinary shares (R’000) 183 102 172 792 177 386
Headline earnings (R’000) 29 551 48 235 83 964
Headline earnings per share
(cents) 16 28 47
Diluted headline earnings
per shares (cents) 16 28 46
Basic and diluted earnings
per shares (cents) 16 28 46
Headline earnings
reconciliation
Basic earnings (profit after
tax) (R’000) 29 551 48 235 81 543
Gains and losses from the
adjustment to the fair value
of non-current assets
(R’000) – – 2 421
Headline earnings (R’000) 29 551 48 235 83 964
Net asset value per share
for the six months ended 30 September 2016
Reviewed Reviewed
Interim Interim Audited
30 September 30 September 31 March
2016 2015 2016
R’000 R’000 R’000
Total assets 2 440 732 2 020 285 2 219 368
Total liabilities (875 993) (504 882) (663 336)
1 564 739 1 515 403 1 556 032
Ordinary shares in issue 186 871 174 262 182 182
Net asset value per share
(cents) 837 870 854
Tangible net asset value
(cents) 837 870 854
Condensed consolidated segmental report
for the six months ended 30 September 2016
Atteridgeville Mamelodi Sebokeng
R’000 R’000 R’000
30 September 2016 (Reviewed)
Turnover (external) 27 586 30 887 21 949
Reportable segment profit
before investment revenue,
fair value adjustments and
finance costs 21 046 26 144 14 653
Unallocated reportable
segment profit before
investment revenue, fair
value adjustments and
finance costs – – –
Profit before investment
revenue, fair value
adjustments and finance
costs – – –
Segment assets and
liabilities
Segment assets 602 010 594 201 401 344
Unallocated assets – – –
Total assets 602 010 594 201 401 344
Segment liabilities 4 435 3 493 3 287
Unallocated liabilities – – –
Interest bearing borrowings – – –
Total liabilities 4 435 3 493 3 287
Other segment items
Interest revenue (external) 15 19 16
Unallocated interest revenue – – –
Investment revenue 15 19 16
Fair value adjustments – – –
Interest expense – – –
Unallocated interest expense – – –
Finance costs – – –
Recon-
Heidelberg Namibia ciliation Total
R’000 R’000 R’000 R’000
30 September 2016
(Reviewed)
Turnover (external) 7 623 579 3 309 91 933
Reportable segment
profit before investment
revenue, fair value
adjustments and finance
costs 4 942 251 – 67 036
Unallocated reportable
segment profit before
investment revenue, fair
value adjustments and
finance costs – – (2 477) (2 477)
Profit before investment
revenue, fair value
adjustments and finance
costs – – – 64 559
Segment assets and
liabilities
Segment assets 148 577 612 093 – 2 358 225
Unallocated assets – – 82 507 82 507
Total assets 148 577 612 093 82 507 2 440 732
Segment liabilities 912 1 335 – 13 462
Unallocated liabilities – – 20 281 20 281
Interest bearing
borrowings – – 842 250 842 250
Total liabilities 912 1 335 862 531 875 993
Other segment items
Interest revenue
(external) 2 – – 52
Unallocated interest
revenue – – 49 49
Investment revenue 2 – 49 101
Fair value adjustments – – – –
Interest expense – – – –
Unallocated interest
expense – – (33 909) (33 909)
Finance costs – – (33 909) (33 909)
Atteridgeville Mamelodi Sebokeng
R’000 R’000 R’000
30 September 2015 (Reviewed)
Turnover (external) 20 938 26 973 23 329
Reportable segment profit
before investment revenue,
fair value adjustments and
finance costs 17 017 22 218 16 746
Unallocated reportable segment
profit before investment
revenue, fair value
adjustments and finance costs – – –
Profit before investment
revenue, fair value
adjustments and finance costs
Segment assets and liabilities
Segment assets 439 639 530 422 415 052
Unallocated assets – – –
Total assets 439 639 530 422 415 052
Segment liabilities 2 445 4 309 3 457
Unallocated liabilities – – –
Total liabilities 2 445 4 309 3 457
Other segment items
Interest revenue (external) 1 2 4
Unallocated interest revenue – – –
Investment revenue 1 2 4
Fair value adjustments – – –
Interest expense – – 6
Unallocated interest expense – – –
Finance costs – – 6
Heidelberg Maunde Namibia
R’000 R’000 R’000
30 September 2015 (Reviewed)
Turnover (external) 7 349 2 302 15
Reportable segment profit
before investment revenue,
fair value adjustments and
finance costs 5 012 1 934 (424)
Unallocated reportable segment
profit before investment
revenue, fair value
adjustments and finance costs – – –
Profit before investment
revenue, fair value
adjustments and finance costs
Segment assets and liabilities
Segment assets 148 702 151 931 288 776
Unallocated assets – – –
Total assets 148 702 151 931 288 776
Segment liabilities 812 928 –
Unallocated liabilities – – –
Total liabilities 812 928 –
Other segment items
Interest revenue (external) 1 – 2
Unallocated interest revenue – – –
Investment revenue 1 – 2
Fair value adjustments – – –
Interest expense – – –
Unallocated interest expense – – –
Finance costs – – –
Reconciliation Total
R’000 R’000
30 September 2015 (Reviewed)
Turnover (external) – 80 906
Reportable segment profit before
investment revenue, fair value
adjustments and finance costs – 62 503
Unallocated reportable segment profit
before investment revenue, fair value
adjustments and finance costs (2 680) (2 680)
Profit before investment revenue, fair
value adjustments and finance costs 59 823
Segment assets and liabilities
Segment assets – 1 974 522
Unallocated assets 45 763 45 763
Total assets 45 763 2 020 285
Segment liabilities – 11 951
Unallocated liabilities 492 931 492 931
Total liabilities 492 931 504 882
Other segment items
Interest revenue (external) – 10
Unallocated interest revenue 400 400
Investment revenue 400 410
Fair value adjustments – –
Interest expense – 6
Unallocated interest expense 13 410 13 410
Finance costs 13 410 13 416
Notes to the condensed consolidated reviewed financial statements
Basis of preparation
The preparation of the group’s interim financial results for the six
months ended 30 September 2016 was the responsibility of the financial
director, Mr JZ Engelbrecht, executed by the financial manager,
Mr MC Basson. The consolidated reviewed interim financial statements are
prepared in accordance with and containing the information required by
International Financial Reporting Standards, (IFRS) 34 Interim Financial
Reporting, the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Pronouncements as issued by
Financial Reporting Standards Council, and the requirements of the
Companies Act of South Africa. The accounting policies applied in the
preparation of these interim financial statements are in terms of
International Financial Reporting Standards and are consistent with those
applied in the previous consolidated annual financial statements.
Financial statements
The interim financial results have been reviewed by Deloitte & Touche in
accordance with ISRE 2410 – “Review of interim financial information
performed by the independent auditor of the entity”. The review report
issued by Deloitte & Touche is unmodified and is available for inspection
at the issuer’s registered office. The auditor’s report does not
necessarily report on all of the information contained in this
announcement/financial results. Shareholders are therefore advised that
in order to obtain a full understanding of the nature of the auditor’s
engagement they should obtain a copy of the auditor’s report, together
with the accompanying financial information, from the issuer’s registered
office. The review report can be obtained at Safari’s registered office
or on the website: www.safari-investments.com. The directors take full
responsibility for the preparation of the interim consolidated financial
results.
Any reference to future financial information included in this
announcement has not been reviewed or reported by the auditor.
The interim consolidated financial statements were approved by the Board
of Directors on 15 November 2016.
New standards and interpretations
The accounting policies of the group have been applied consistently with
the policies as presented in the consolidated financial statements for
the year ended 31 March 2016.
Events during and subsequent to the reporting period
Events during the financial period
On 27 June 2016 a distribution of 32 cents per share was declared, with
the option to reinvest the distribution in exchange for ordinary Safari
shares. A total of 740 964 new shares were issued to shareholders who
elected the reinvestment option. On 27 July 2016, 3 947 368 new shares
were issued to various existing shareholders through a private placement
at R8,00 per share with a total investment value of R31,6 million.
At the Annual General Meeting held on 27 July 2016 all resolutions were
passed and Dr M Minnaar and Mr AE Wentzel were re-elected as non-
executive directors who retired by rotation in terms of the memorandum of
incorporation and being eligible offered themselves for re-election. Mr
JC Verwayen resigned as a non-executive alternate director with effect
from 31 July 2016.
No further investments were approved by the Board of Safari at the
31 August 2016 board meeting.
Events subsequent to the financial period
The Board of Directors of Safari approved a gross cash distribution of 32
cents per ordinary share to be paid during December 2016, subject to
adherence to the solvency and liquidity requirements as stated in the
Companies Act (71 of 2008). Shareholders will be able to elect to
reinvest the cash distribution in return for ordinary Safari shares.
A circular providing detailed information in respect of the cash
distribution and the reinvestment alternative was distributed to all
Safari shareholders on 16 November 2016 and a SENS announcement was
published on 15 November 2016.
Safari’s Board approved the issue of shares as part of a capital raising
process on 2 November 2016. This will be subject to shareholder approval
at a Special General Meeting to be held early 2017. A circular with more
detail regarding the new share issue and Special General Meeting, will be
circulated to shareholders in due course.
At the board meeting held on 2 November 2016 the Board of Safari approved
an additional capital expenditure amounting to R4,9 million being the
construction of a left-in from Maunde Street at Safari’s Maunde Shopping
Centre. This will enhance the accessibility to the centre from the main
access route to Atteridgeville. Furthermore the Board of Safari approved
a N$100 million loan facility with Bank Windhoek for Safari Investments
Namibia.
The directors are not aware of any other material reportable events which
occurred during and subsequent to the reporting period.
Related-party transactions
All related-party transactions are as per approved agreements.
Cosmos Management CC (“Cosmos”) provided bookkeeping and property
management services to Safari and is a related party due to the common
directorship. The services rendered by Cosmos amounted to R2,8 million
(30 September 2015: R2,1 million).
Safari Retail Proprietary Limited (“Retail”) provided leasing and
administration services to Safari and is a related party due to the
common directorship. The services rendered by Retail amounted to R0,9
million (30 September 2015: R0,5 million).
During previous financial periods, various development agreements were
entered into between Safari Investments RSA Limited (“investor”) and
Safari Developments (Pretoria) Proprietary Limited (“developer”) and in
Namibia between Safari Investments Namibia Proprietary Limited and Safari
Developments Swakopmund Proprietary Limited. Safari Investments RSA
Limited provides the necessary funds to cover the development cost. The
agreed upon development cost will be paid over to the developer by way of
progress payments as agreed by the investor and developer. Once the
project is complete, the developer will hand the project over to the
investor.
Board commentary
Profile
Safari Investments RSA Limited (“Safari”), with a total asset base of
R2,4 billion, is a retail-focused Real Estate Investment Trust (“REIT”)
listed on the Johannesburg Stock Exchange Limited (“JSE”) main board
under the property section. On 27 June 2016 a distribution of 32 cents
per share was declared, with the option to reinvest the distribution in
exchange for ordinary Safari shares. A total of 740 964 shares were
issued to shareholders electing to reinvest their distribution.
Safari invests in quality income-generating property and revenue is
generated through sustainable rental income. There were no significant
changes to the nature of the business during the financial period under
review.
Property portfolio
– The property portfolio consists of nineteen properties. Six of the
properties are established/income-generating retail centres, of which
three are serving as regionals in their areas. These include Denlyn in
Mamelodi (42 200m2); Atlyn (41 200m2) and Maunde (10 550m2) in
Atteridgeville; Thabong in Sebokeng (43 100m2); The Victorian in
Heidelberg (15 400m2) and Platz am Meer (27 000m2) that opened for
trading on 22 September 2016 and Safari’s first private day-hospital
(2 817m2) in Soweto with Advanced Health Limited which became operational
during February 2016. An investment in solar panels was also completed at
the Denlyn, Atlyn and Maunde shopping centres in the current reporting
period generating further investment revenue. In the prior financial
period, Safari also acquired six properties situated in Lynnwood,
Pretoria, with an aggregate land size of 1,3 hectares which is held for
potential future development. There are residential units on some of
these properties for which occupational rent is charged.
Letting activity
Safari’s vacancy factor in its portfolio as at 30 September 2016 was 2%
(2015: 3%) of the total income-generating space. The average annual
rental escalation percentage for the period was 8,3% (2015: 8,0%).
Current projects
Atteridgeville
– The earth works on Nkomo Village development in Atteridgeville were
completed in the current reporting period. The development, close to the
existing Saulsville Station, will have a total gross lettable area of
16 705m2 and the total investment value is R314 million. This retail
centre will be co-anchored by Pick n Pay and Boxer. The first Builder’s
Warehouse Superstore, Virgin Active and McDonalds are brought to the
Atteridgeville community. Nkomo Village is set to open in April 2018.
Sebokeng
– At Thabong Centre the Builders Warehouse Superstore of approximately
1 500m2 is nearing completion and is set to open its doors for trading
during October 2016.
Swakopmund
– Construction of the retail portion of the development, known as Platz
am Meer, has been finalised and commenced trading on 22 September 2016.
The centre has been received with a great deal of excitement from the
Swakopmund community. In all, 36 luxury upmarket apartments are developed
as part of this mixed-use development. The development thereof is set to
be completed early 2017.
– The location of the development is strategically incomparable. New
developments to the north of town are changing the patterns and flow of
traffic and business completely. Considering the spatial development plan
of Swakopmund, it is expected that within a few years this waterfront
site will be at the centre of the town’s northerly developments.
– It comprises a mixed-use development of retail, office and upmarket
residential apartments. The apartments will be sold after completion. The
waterfront development is truly unique and a special addition to the
coastal town of Swakopmund, strengthening the town’s tourist
attractiveness.
Denlyn
– The 1 250m2 expansion of the Denlyn Shopping Centre is nearing
completion. This will further enhance the tenant mix of Denlyn with the
addition of national retailers such as Shoe City, Footgear, Pep Cell and
Cross Trainer set to commence trading on 1 November 2016.
Financial performance
– Headline earnings decreased from R48 million to R29 million compared
with the same period for the previous year. As stated in the notes to the
financial statements, the decrease is directly related to the increase of
R20 million in finance cost. Headline earnings per share (cents)
decreased by 43% to 16 cents per share, compared with 28 cents per share
for the comparative period.
Funding
Safari’s secured loan facility was increased to R900 million in April
2016. Currently the debt represents 34% of the total value of assets and
the cost of finance is at the prime lending rate less 1,05%. The prime
lending rate increased by 1% compared to the comparative period.
Credit rating
During October 2016 Safari received its second credit rating from Global
Credit Rating Co. (GCR):
– National Long term: BBB(ZA)1
– National Short term: A2(ZA)2
It remained unchanged from the previous financial year.
(1) Adequate protection factors and considered sufficient for prudent
investment. However, there is considerable variability in risk during
economic cycles.
(2) Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge total
financing requirements, access to capital market is good. Risk factors
are small.
Source: Global Credit Rating
2016 Annual General Meeting
Safari’s Annual General Meeting was held on 27 July 2016. All resolutions
proposed were passed and the minutes of the meeting are available on
www.safari-investments.com.
Directorate
At the 2016 Annual General Meeting Dr M Minnaar and Mr AE Wentzel were
re-elected as non-executives who retired by rotation in terms of the
memorandum of incorporation and, being eligible, offered themselves for
re-election. Mr JC Verwayen resigned as a non-executive alternate
director with effect from 31 July 2016.
Declaration of a cash distribution with the option to reinvest the cash
distribution in ordinary Safari shares
Shareholders are advised that the Board of Directors of Safari has
approved a gross cash distribution of 32 cents per ordinary share to be
paid during December 2016, after the Board applied its mind and adhered
to the solvency and liquidity requirements as stated in the Companies Act
(71 of 2008). Shareholders will be able to elect to reinvest the cash
distribution in return for ordinary shares.
A circular providing detailed information in respect of the cash
distribution and the reinvestment alternative was distributed to all
Safari shareholders and relevant details were announced on SENS.
Prospects
The Board is committed to maximising the rental income streams with the
proactive letting strategy focused on national tenants, and minimising
the operating expenditure. The Board will focus on opportunities in order
to achieve sustainable long-term, recurring distributable earnings. The
capital to be raised will be utilised to complete pipeline projects and
reduce existing debt resulting in a significant saving on interest to
ensure that the company minimises financial risk and limits the exposure
associated with high debt levels.
Any forecast in the results has not been reviewed or reported on by the
independent external auditors and is the responsibility of the Board.
By order of the Board
17 November 2016
Corporate information
Auditors
Deloitte & Touche
Riverwalk Office Park, Block B
41 Matroosberg Road, Ashlea Gardens, X6
Pretoria, 0081
Commercial banker
Absa Bank Limited
(Registration number: 1986/004794/06)
Absa Towers East
170 Main Street, Johannesburg, 2001
PO Box 7735, Johannesburg, 2000
Group Company Secretary
Dirk Engelbrecht
BComm LLB
420 Friesland Lane
Lynnwood, Pretoria, 0081
Postal: 420 Friesland Lane
Lynnwood, Pretoria, 0081
Corporate adviser
Fanus Kruger Consulting CC
(Registration number 2006/173299/23)
Propateez Office Park
98 Beyers Naude Drive, Rustenburg, 0300
Directors of Safari
FJJ Marais (chief executive officer)
JZ Engelbrecht (executive financial director)
FN Khanyile (independent non-executive director)
SJ Kruger (alternate director)
M Minnaar (independent non-executive director)
K Pashiou (executive director)
JP Snyman (independent non-executive chairman)
AE Wentzel (lead independent non-executive director)
Independent valuer
Mills Fitchet (Tvl) CC
(Registration number CK 89/40464/23)
No 17 Tudor Park, 61 Hillcrest Avenue
Oerder Park, Randburg, 2115
PO Box 35345, Northcliff, 2115
Legal adviser
VFV Incorporated
Corporate Place, Block A, 39 Selati Street
Pretoria, 0081
PO Box 8636, Pretoria, 0001
Registered address and place of business:
420 Friesland Lane
Lynnwood, Pretoria, 0081
Tel +27 (0) 12 365 1881
Fax +27 (0) 86 272 1313
E-mail: info@safari-investments.com
Website: www.safari-investments.com
Sponsor
PSG Capital Proprietary Limited
(Registration number 1951/002280/06)
1st Floor, Ou Kollege Building
35 Kerk Street, Stellenbosch, 7599
PO Box 7403, Stellenbosch, 7599
Transfer secretaries
Computershare Investor Services Proprietary Limited
(Registration number 2004/003647)
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
To view the 2016 interim financial results visit: www.safari-
investments.com
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