Wrap Text
Unaudited interim results for the six months ended 28 February 2025
OCTODEC INVESTMENTS LIMITED
("Octodec" or the "company")
Incorporated in the Republic of South Africa
Registration number: 1956/002868/06
JSE share code: OCT
JSE alpha code: OCTI
ISIN: ZAE000192258
LEI: 3789I36JI0BKTUSZ8813
(Approved as a REIT by the JSE)
Unaudited interim results for the six months ended 28 February 2025
Octodec Investments Limited (Octodec or the company), its subsidiaries and associated company (the group) is a real estate investment trust (REIT) listed on
the JSE Ltd (JSE) and A2X, with a diversified portfolio of 226 residential, retail, office and industrial properties situated in the major metropolitan
areas of Tshwane and Johannesburg. The portfolio, including an equity-accounted joint venture, has a lettable area of 1 504 601m2 and is valued at
R11.3 billion.
Salient features
Distributable income after tax (R'million)
R221.7
(HY2024: R219.5)
Distributable income per share (cents)
83.30
(HY2024: 82.47)
Dividend per share (cents)
62.00
(HY2024: 60.0)
Net asset value (NAV) per share
R24.26
(FY2024: R23.97)
Loan to value (LTV)
38.5%
(FY2024: 39.2%)
This short-form announcement is the responsibility of the directors. This announcement is only a summary of the information contained in the unaudited
condensed consolidated interim results for the six months ended 28 February 2025 (full announcement) and does not contain full or complete details.
Any investment decisions made by shareholders and/or investors should be based on the information contained in the full announcement, released on the Stock
Exchange News Service (SENS) on 13 May 2025, which may be downloaded from the JSE cloudlink at:
https://senspdf.jse.co.za/documents/2025/JSE/isse/OCT/HY2025.pdf
The full announcement is also available on the Octodec Investments Limited website at https://octodec.co.za/financial_results/interim-results-booklet-hy2025.
Results
% 28 February 29 February
change 2025 2024
Revenue (R'000) 4.7 1 053 001 1 005 862
Basic and diluted earnings per share (cents) 130.2 85.59 37.18
Headline and diluted headline earnings per share (cents) 4.7 76.42 73.05
Distributable earnings per share (cents) 1.0 83.30 82.47
Distribution per share (cents) 3.3 62.00 60.00
Net asset value per share (Rand) 0.6 24.26 24.11
Dividends
The board of Octodec has declared a cash dividend of 62.00000 cents per share for the six months ended 28 February 2025, payable out of the company's
distributable income.
The salient dates relating to the interim dividend are as follows:
2025
Last day to trade cum dividend Tuesday, 27 May
Shares trade ex dividend Wednesday, 28 May
Record date Friday, 30 May
Payment date Monday, 2 June
Share certificates may not be dematerialised or rematerialised between Wednesday, 28 May 2025 and Friday, 30 May 2025, both days inclusive.
In accordance with Octodec's status as a REIT, shareholders are advised that the above dividend meets the requirements of a "qualifying distribution" for
the purposes of section 25BB of the Income Tax Act, No. 58 of 1962 (the Income Tax Act).
Tax implications for South African resident shareholders
Dividends received by South African resident shareholders must be included in the gross income of such shareholders (as a non-exempt dividend in terms of
section 10(1)(k)(i)(aa) of the Income Tax Act), with the effect that the dividends are taxable as income in the hands of the Octodec shareholder. These
dividends are, however, exempt from dividends withholding tax, provided that the South African resident shareholders have provided the following forms to
their Central Securities Depository Participant (CSDP) or broker, as the case may be, in respect of uncertificated shares, or the transfer secretaries, in
respect of certificated shares:
- a declaration that the distribution is exempt from dividends tax; and
- a written undertaking to inform the CSDP, broker or the transfer secretaries, as the case may be, should the circumstances affecting the exemption
change or the beneficial owner ceases 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
transfer secretaries, as the case may be, to arrange for the above-mentioned documents to be submitted prior to payment of the dividend, if such documents
have not already been submitted.
Tax implications for non-resident shareholders
Dividends received by non-resident shareholders will not be taxable as income and instead will be treated as ordinary dividends, but which are exempt in
terms of the usual dividend exemptions contained in section 10(1)(k)(i)(aa) of the Income Tax Act. It should be noted that dividends received by non-
residents are subject to dividends withholding tax at a rate of 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. Assuming dividends withholding tax will be withheld at a rate of
20%, the net distribution amount due to non-resident shareholders is 49.60000 cents per share. A reduced dividend withholding rate in terms of the
applicable DTA may only be relied upon if the non-resident holder has provided the following forms to their CSDP or broker, as the case may be, in respect
of uncertificated shares, or the transfer secretaries, in respect of certificated shares:
- a declaration that the dividend is subject to a reduced rate as a result of the application of a DTA; and
- a written undertaking to inform their CSDP, broker or the transfer secretaries, as the case may be, should the circumstances affecting the reduced
rate change or the beneficial owner ceases to be the beneficial owner;
both in the form prescribed by the Commissioner for the South African Revenue Service. Non-resident holders are advised to contact their CSDP, broker or the
transfer secretaries, as the case may be, to arrange for the above-mentioned documents to be submitted prior to payment of the dividend if such documents
have not already been submitted.
The number of shares in issue at the date of this declaration is 266 197 535 and Octodec's tax reference number is 9925/033/71/5.
Outlook and prospects
The formation of the GNU supported an increase in business confidence and optimism, with expectations of increased economic activity to follow.
The start of an interest rate reduction cycle in September 2024 undoubtedly stimulated the property market, with more potential buyers showing
interest in those of our properties earmarked for sale. Additionally, the interest rate cut also supports our tenants, particularly the smaller
businesses that require third-party funding for their working capital purposes, which will ultimately support the sustainability of rental to Octodec
and the growth thereof. The 75 basis points cut in interest rates since September 2024 also contributes positively to Octodec, with the weighted average
cost of funding expected to reduce, which creates the possibility of unlocking value through acquisitions or redevelopment opportunities.
Unemployment, however, continues to be a significant problem for South Africa and, in particular, affects the residential sector in which we operate.
Geopolitical tensions with the US, and the US government's decision to levy tariffs on multiple countries, including South Africa, have led to
global uncertainty and concerns around inflation rising, dampening prospects for further rate cuts. The sustainability of renewed business confidence
and the financial health of our tenants operating within this challenging trading environment therefore continue to be tested.
As previously reported, the Board has mandated management to embark on a more aggressive approach to the disposal of non-core assets. The proceeds from
those properties that no longer yield the necessary returns for shareholders will be recycled into yield-enhancing investments or reduce borrowings,
with the objective of strengthening the balance sheet.
The insurance claim associated with Lilian Ngoyi Street, has progressed with an interim agreement of loss payment of 20% of the R20.0 million policy limit
signed in April 2025. The process to agree and settle on the balance of the claim continues as, whilst Lilian Ngoyi remains under repair, the claim will
remain open for a period of up to 36 months from the date of the event.
The change in the geopolitical landscape is expected to affect trading conditions which, together with a recent notice from the City of Tshwane to vacate
12 086m2 of office space in the Pretoria CBD, and the ongoing risk of the GNU not being maintained, negatively impacts our outlook for the year ending
31 August 2025.
As a consequence of the aforementioned, and the assumptions noted below, management has revised its previously provided guidance of between a 3% to 5%
growth in distributable income per share, to between 2% and 4% per share (FY2024: 125 cents per share, being 78.9% of group distributable income per share),
while maintaining a minimum dividend pay out ratio of 75% of distributable income.
This forecast is based on the following key assumptions:
- Forecast property income is based on contractual rental escalations and market related renewals;
- Adequate allowance has been made for known vacancies and rent reversions;
- No major corporate and tenant failures will occur;
- No further changes in interest rates will be made; and
- No unforeseen events will occur.
This revised outlook for the year ending 31 August 2025 has not been reviewed or reported on by the group's auditors.
Sharon Wapnick Jeffrey Wapnick
Chairman Chief executive officer
9 May 2025
Registered address
CPA House, 101 Du Toit Street, Tshwane 0002
Tel: 012 319 8781
e-mail: info@octodec.co.za
Directors: S Wapnick (Chairman)1, JP Wapnick (chief executive officer)2, R Erasmus (deputy CEO & chief financial officer)2, RWR Buchholz4, NC Mabunda4,
EMS Mojapelo4, MZ Pollack1, PJ Strydom3, LP van Breda4
1 Non-executive director
2 Executive director
3 Lead independent director
4 Independent non-executive director
Group company secretary
Elize Greeff
CPA House, 101 Du Toit Street, Tshwane 0002
Tel: 012 357 1564, e-mail: elizeg@octodec.co.za
Equity sponsor
Java Capital
Contact person: Shivani Bhikha
6th Floor, 1 Park Lane, Wierda Valley, Sandton 2196
PO Box 522606, Saxonwold 2132
Tel: 011 722 3050, e-mail: sponsor@javacapital.co.za
Debt sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Contact person: Michelle Benade
3rd Floor, Block F, 135 Rivonia Campus,135 Rivonia Road Sandown, Sandton 2196
Tel: 010 234 8646, e-mail: debtsponsor@nedbank.co.za
Transfer secretaries
Computershare Investor Services (Pty) Ltd
Contact person: Aubrey Modise
Rosebank Towers, 15 Biermann Avenue, Rosebank 2196
Private Bag X9000, Saxonwold 2132
Tel: 011 370 5000, e-mail: aubrey.modise@computershare.co.za
Investor relations
Instinctif Partners
Contact person: Louise Fortuin
2nd Floor, Oxford Park, 8 Parks Boulevard, Dunkeld, Johannesburg
Tel: 011 447 3030, e-mail: investorrelations@octodec.co.za
Auditors
Ernst & Young Inc.
Contact person: Cornelius Els CA(SA)
102 Rivonia Road, Sandton
Private Bag X14, Sandton 2146
Tel: 011 502 0601, e-mail: Cornelius.Els@za.ey.com
Date of publication
13 May 2025
http://www.octodec.co.za
Date: 13-05-2025 07:05:00
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