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Short-Form Announcement: Reviewed Financial Results And Dividend Declaration For The Year Ended 28 February 2021
SPEAR REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2015/407237/06)
Share code: SEA
ISIN: ZAE000228995
Approved as a REIT by the JSE
(“Spear” or “the Company”)
SHORT-FORM ANNOUNCEMENT: REVIEWED FINANCIAL RESULTS AND DIVIDEND
DECLARATION FOR THE YEAR ENDED 28 FEBRUARY 2021
1. SALIENT FEATURES
Distributable income per share (“DIPS”) decreased by 19.94% to 73.38 cents per share,
from 91.66 cents per share in the prior corresponding period.
Distribution per share (“DPS”) decreased by 35.95% to 58.70 cents per share, from 91.66
cents per share in the prior corresponding period.
Final DPS for the 6 months ending 28 February 2021 decreased by 37.56% to 29.36 cents
per share from 47.02 cents per shares in the prior corresponding period.
Pay-out ratio for the financial year was 80% of DIPS. 100% in prior corresponding period.
Collections for the financial year is 97.79% vs billings as measured at 30 April 2021.
Management has successfully renewed/re-let 205 714 sqm at a negative reversion of
3.70%.
Net asset value per share decreased by 5.57% to 1153 cents per share, from 1221 cents
per share in the prior corresponding period.
Portfolio occupancy rate of 93.84% and 100% Western Cape based.
Investment property value increased 7.46% to R4.50 billion, from R4.18 billion in the prior
corresponding period.
Loan to Value increased to 45.81%, from 39.63% reported at 28 February 2020.
Revenue increased by 0.76% to R531 million, from R527 million in the prior corresponding
period.
Headline earnings per share decreased by 22.60% to 76.70 cents per share, from 99.09
cents per share in the prior corresponding period.
Earnings per share decreased by 75.35% to 25.48 cents per share, from 103.37 cents
per share in the prior corresponding period.
2. DIVIDEND DECLARATION
The directors resolved to declare a final gross dividend of 29.35995 cents per share from
income reserves in respect of the financial year ending 28 February 2021. The dividend
amount, net of South African dividend tax of 20%, is 23.48796 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 Wednesday, 14 May 2021
Last day to trade cum dividend Tuesday, 01 June 2021
Trading ex-dividend commences Wednesday, 02 June 2021
Record date Friday, 04 June 2021
Date of payment Monday, 07 June 2021
Share certificates may not be dematerialised or rematerialised between Wednesday, 02
June 2021 and Friday, 04 June 2021, both days inclusive.
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 23.48796 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 have to 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.
3. 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/SEAFY21.pdf
Copies of the Full Announcement is also available for viewing on the Company’s website
at https://spearprop.co.za/pdf/investor-relations/spear-final-results-feb-2021.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 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 year ended 28
February 2021 which have been reviewed by the Company’s auditors, BDO South Africa,
who expressed an unmodified review conclusion.
4. RESULTS PRESENTATION
Shareholders are invited to view Spear’s year-end results presentation to be broadcasted
on YouTube at 10:00 am SAST on Friday, 14 May 2021.
Presentation details:
- View and listen mode
- Link: https://youtu.be/UaS9vZX8ovI
- 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
14 May 2021
Sponsor
PSG Capital
Date: 14-05-2021 07:05:00
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