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Summary of Audited Results for the year ended 30 June 2015
GROWTHPOINT PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/004988/06)
A Real Estate Investment Trust, listed on the JSE
Share code: GRT ISIN: ZAE000179420
Summary of Audited Results
for the year ended 30 June 2015
Highlights
* 7.5%
distribution growth to 173,4 cents per share
* R4.2 billion
of annual income distributed
* 31.9%
total return on GOZ investment
* R4,2 billion
development and acquisition pipeline
* R100,4 billion
property assets
* 20.7%
growth in gross revenue
COMMENTARY
INTRODUCTION
Growthpoint is the largest South African listed REIT with a quality portfolio of 471 directly owned properties in South
Africa valued at R71,6 billion, as well as six equity-accounted investments, with our share of properties valued at R7,4
billion of which the V&A Waterfront is by far the largest. In addition, Growthpoint has a 65.0% interest in Growthpoint
Properties Australia (GOZ), which owns 53 properties in Australia valued at R22,0 billion. Through the acquisition of
the shares not already owned in the listed investments Acucap Properties Limited (Acucap) and Sycom Property Fund
(Sycom), these entities became subsidiaries of the group on 1 April 2015. The remaining listed investment with a value
of R380 million relates to a 22.9% investment in the Stenham European Shopping Centre Fund (SESCF), a company listed on
the Channel Island Stock Exchange as a closed fund and was acquired as part of the Acucap and Sycom business
combination. Refer to further detailed commentary on the transaction below.
The company's objective is to grow and nurture a diversified portfolio of quality investment properties, providing
accommodation to a wide spectrum of users and delivering sustainable income distributions and capital appreciation to
investors, while optimising effective financial structures. Effectively, net property income received by the property
portfolios of South Africa (RSA) and GOZ, including interest received, the distributable income received from the
equity-accounted and listed investments, less operating costs, interest on debt and normal taxation, is distributed to
shareholders bi-annually. Growthpoint's distributions are based on sustainable income generated from rentals. The
company does not distribute capital profits.
Growthpoint is included in the JSE ALSI Top 40 Companies Index, with a market capitalisation of R71,7 billion at 30 June
2015 (FY15). Over the last year, on average, more than 119,7 million shares traded per month (FY14: 72,1 million). The
monthly average value traded was R3,2 billion (FY14: R1,8 billion). This makes Growthpoint the most liquid and tradable
way to own commercial property in South Africa.
Excluding the equity-accounted investments, the South African portfolio represents 76.5% of the property portfolio by
value and 83.8% by gross lettable area (GLA), and is well diversified in the three major sectors of commercial property,
being retail, office and industrial. The bulk of the value of the South African properties is situated in strong
economic nodes within the major metropolitan areas.
For the period under review net asset value of the group increased by 6.7% to 2 364 (FY14: 2 215) cents per share.
GROWTH IN DISTRIBUTIONS
Growthpoint delivered growth in distributions per share for FY15 of 7,5% and has declared a final dividend of 44,5
cents per share for the 3 months ended 30 June 2015, taking the total dividends for the year to 173,4 cents per share.
This growth is at the upper end of the guidance given to the market in the FY14 results of between 7,0% and 7,5%.
Distribution growth was impacted by the payment of the special interim dividend of 44.5 cents per share (R1 058 million
in aggregate) which was paid to shareholders 5 months earlier than it would have in the normal course. Taking the
interest benefit of this early payment, of approximately 1,4 cents per share, into account, shareholders effectively
received growth in distributions per share equal to 8,4%.
Distribution growth has been impacted by a solid performance from the South African portfolio, especially the V&A
Waterfront, and also includes the results of Acucap and Sycom for 9 months as an investment and 3 months, being April to
June, as a subsidiary.
The increase in distributions was further enhanced by the investment in GOZ, where an effective hedging strategy led to
distributions from GOZ being received at an average rate of R9.92:AUD1 compared to R9.57:AUD1 for FY14. Distribution per
unit from GOZ grew by 5.3% in Rand terms on a like-for-like basis.
BASIS OF PREPARATION
The summarised consolidated financial statements are prepared in accordance with the JSE Limited Listings Requirements
for preliminary reports and the requirements of the Companies Act of South Africa. The Listings Requirements require
preliminary reports to be prepared in accordance with the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by
the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council
and to also, as a minimum, contain the information required by IAS 34, Interim Financial Reporting.
Except for the new standards adopted as set out below, all accounting policies applied in the preparation of these
summarised consolidated financial statements are in terms of IFRS and are consistent with those applied in the previous
consolidated financial statements.
Growthpoint adopted the following new standards:
- Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)
- Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)
- Recoverable Amount Disclosure for Non-Financial Assets (Amendments to IAS 36)
- Novation of Derivative and Continuation of Hedge Accounting (Amendments to IAS 39)
- Annual improvements to IFRS 2010 – 2012
- Annual improvements to IFRS 2011 – 2013
There was no material impact on the financial statements based on management's assessment of these standards. Whilst
this report is itself not audited, the consolidated financial statements, from which the summarised consolidated
financial statements were derived, were audited by KPMG Inc., who expressed an unmodified opinion thereon. That audit
report does not necessarily report on all the information contained in this report.
Shareholders are therefore advised that, in order to obtain a full understanding of the nature of the auditor's
engagement and, more specifically, the nature of the information that has been audited, they should obtain a copy of the
auditor's report together with the accompanying audited consolidated financial statements, both of which are available
for inspection at the company's registered office. The directors of Growthpoint Properties Limited take full
responsibility for the preparation of this report and that the selected financial information has been correctly
extracted from the underlying consolidated financial statements.
Mr G Völkel (CA(SA)), Growthpoint's Financial Director, was responsible for supervising the preparation of these
summarised consolidated financial statements.
ACQUISITION OF ACUCAP AND SYCOM
In April 2014, Growthpoint acquired a strategic stake in Acucap of 34.9% and a stake in Sycom of 31.5%. Growthpoint
acquired these units in exchange for new Growthpoint shares from a selected pool of institutional investors. Subsequent
to Growthpoint's investment, Acucap made an offer for Sycom in which Growthpoint tendered a portion of its Sycom
investment in exchange for new Acucap shares. At the announcement of Growthpoint‘s 2014 results, on 27 August 2014,
Growthpoint held 34.7% of Acucap and retained 15.0% of Sycom. Acucap had acquired 82.7% of Sycom. This left
approximately 2.3% of Sycom in free float, which Acucap advised it was attempting to acquire. Acucap successfully
acquired a further 1.3% in Sycom. On 1 April 2015, Growthpoint acquired the remaining shares and voting interests in
Acucap by issuing 317 370 060 Growthpoint shares. The fair value of the ordinary shares issued was based on the ex-div
listed price of the company at 1 April 2015 of R28.22 per share.
The acquisition represented a unique opportunity for Growthpoint to increase the size of its South African property
portfolio to R71,6 billion, a major milestone for the Company in achieving its stated objective of defensively growing
its property portfolio through the acquisition of complementary and quality enhancing assets. Growthpoint will benefit
from greater sector diversification by increasing the relative weighting of Growthpoint's retail portfolio to levels
preceding the acquisitions of the primarily office portfolios of the Tiber Group and Abseq Properties Proprietary
Limited during the 2014 financial year. The acquisition is consistent with Growthpoint's growth and investment strategy
to build a diversified property portfolio and offer long-term distribution and capital growth underpinned by strong
underlying contractual cash flows.
In the three months to 30 June 2015, Acucap contributed revenue of R458 million and a profit of R258 million to the
group's results. If the acquisition had occurred on 1 July 2014, management estimates that consolidated revenue for the
year would have been R1 035 million higher, and consolidated profit for the year would have been R641 million higher.
In determining these amounts, management has assumed that the fair value adjustments that arose on the date of
acquisition would have been the same if the acquisition had occurred on 1 July 2014. The acquisition date fair value of
the equity interest in Acucap held by Growthpoint was R5 631 million after taking into account the amount of R369
million gain recognised in the fair value of listed investments line item on the statement of profit or loss and other
comprehensive income as a result of remeasuring to fair value the interest in Acucap before the business combination.
The fair value of the assets and liabilities of Acucap acquired were as follows:
Rm
Fair value of properties 18 586
Net working capital * (390)
Other assets 1 212
Fair value of borrowings (7 736)
Net asset value 11 672
Funded by issue of share capital (8 955)
Fair value of previously held investment in Acucap (5 631)
NCI, based on their proportionate interest in the recognised amounts of the assets and liabilities (64)
Goodwill (2 978)
* The trade receivables comprise gross contractual amounts due of R282 million of which R8 million was expected to be uncollectable at the date of acquisition.
The consideration for the business acquisition was based on a fixed share exchange between Acucap shareholders and
Growthpoint at an exchange ratio of 1.97 Growthpoint shares per Acucap share. The goodwill is attributable mainly to the
difference between the fair value of the Growthpoint shares issued as consideration and the fair value of the
identifiable assets and liabilities received, as the share price increased since the negotiations of the takeover. A
material amount of goodwill also originated as Growthpoint paid a premium over the net asset value (NAV) for the Acucap
shares. None of the goodwill recognised is expected to be deductible for tax purposes.
The Group incurred acquisition-related costs of R26 million. These costs have been included in Capital items.
For the purposes of impairment testing, goodwill has been allocated to the Group's cash-generating units (CGUs) by
sector. The recoverable amounts of all these CGUs were based on fair value less costs of disposal, estimated using the
average difference between the NAV and the market capitalisation of Acucap over a period of five years. This indicates
that a third party will be prepared to pay a premium over the NAV for Acucap shares. The future expectations of the CGUs
were considered by estimating the premium a third party is prepared to pay for Growthpoint's own shares as the
properties will now form part of the Growthpoint portfolio. Growthpoint's NAV and share price, together with Acucap's
historical NAV and share price difference, has been considered to provide an indication of how the portfolios are
expected to perform in the future. The fair value measurement was categorised as level 3 fair value based on the inputs
in the valuation techniques used.
The key assumptions used in the estimation of the recoverable amount are set out below. The values assigned to the key
assumptions represent the quoted share price of Acucap at 31 March (representing the group's year-end before the
business combination) from 2011 until 2015, as well as the NAV per unit per the published results of the Acucap group.
2011 2012 2013 2014 2015
Acucap (Unit price in cents) 3 440 4 070 4 995 4 000 5 551
Acucap (Net asset value per unit in cents) 3 272 3 675 4 048 4 095 4 480
Acucap (Market capitalisation versus net asset value) 5.13% 10.75% 23.39% (2.32%) 23.90%
As a material percentage of the goodwill arose as a result of the increase in the Growthpoint share price from the date
on which the Acucap agreement was concluded (12 November 2014) and the date of acquisition (1 April 2015), management is
of the opinion that an impairment loss exists for the year ended 30 June 2015. To be conservative, the average NAV
versus market capitalisation for the Acucap group for the previous five years (i.e. 12.17%) was used in the calculation
of the fair value, less costs of disposal, of the Acucap CGUs.
An impairment loss of R1 558 million has therefore been recognised during the current year.
Goodwill Impairment Carrying value
1 April 2015 loss recognised 30 June 2015
Retail sector 1 815 (949) 866
Office sector 1 087 (569) 518
Industrial sector 76 (40) 36
Total (Rm) 2 978 (1 558) 1 420
Following the impairment losses recognised in the retail, office and industrial CGUs, the recoverable amount was equal
to the carrying amount. Therefore, any adverse movement in a key assumption would lead to further impairments.
GROWTHPOINT PROPERTIES AUSTRALIA (GOZ)
The investment in GOZ has been accounted for in terms of IAS 21, The Effects of Changes in Foreign Exchange Rates. The
Statement of Financial Position includes 100% of the assets and liabilities of GOZ, converted at the closing exchange
rate at FY15 of R9.40:AUD1 (FY14: R9.96:AUD1). The Statement of Profit or Loss and Other Comprehensive Income also
includes 100% of the revenue and expenses of GOZ, which were translated at an average exchange rate of R9.55:AUD1 (FY14:
R9.53:AUD1) for FY15. The resulting foreign currency translation difference is recognised in Other Comprehensive Income.
A non-controlling interest was raised for the 35.0% (FY14: 36.0%) not owned by Growthpoint.
Growthpoint increased its investment in GOZ from R5,3 billion at FY14 to R5,9 billion at FY15. This further investment
of R607 million related to Distribution Re-investment Plans (DRIPs), where Growthpoint elected not to receive the
distributions in August 2014 and February 2015, but to reinvest the distributions in GOZ.
A deferred tax liability of R1,3 billion (FY14: R1,0 billion) is included in the Statement of Financial Position. This
relates to the capital gains tax that will be payable in Australia if Growthpoint sells its investment in GOZ. Included
in normal tax in the Statement of Profit or Loss and Other Comprehensive Income, is R73 million (FY14: R24 million) that
relates to withholding tax paid on the distributions received from GOZ.
V&A WATERFRONT AND OTHER EQUITY-ACCOUNTED INVESTMENTS
The investments in the V&A Waterfront and the other joint venture, have been accounted for in terms of IFRS 11, Joint
Arrangements. The equity-accounting method was used, whereby the Group's share of the Profit or Loss and Other
Comprehensive Income of these investments were accounted for.
Despite the slowdown in tourism, retail operations at the V&A Waterfront performed well where 11% growth in sales was
recorded which exceeds the national retail and Investment Property Databank (IPD) benchmarks. Included in the FY15
finance income, is R368 million of distributable income from the V&A Waterfront, compared to distributable income for
FY14 of R332 million.
NET PROPERTY INCOME
Gross revenue increased by 20.7% for FY15 compared to FY14. The South African operations increased revenues by 23.0%
compared to FY14, as a result of the acquisition of Acucap and Sycom which have been included in the group results from
1 April 2015. Revenue was further increased by the inclusion of the Abseq and Tiber property portfolios for the full
year compared to six and four months respectively in FY14. The GOZ operations increased its revenues by 14.0% mostly as
a result of the first rentals earned on a newly acquired property (acquired on 30 June 2014) as well as three further
industrial properties acquired during the year. Disposals amounting to R651 million were made in the RSA portfolio in
FY14 and impacted negatively on revenue growth in the current period. Whilst immaterial to total revenues, the vacating
of distribution centres by Ellerines had an adverse impact on revenue.
The ratio of property expenses to revenue for the Group improved to 21.1% at FY15 from 21.6% at FY14. For RSA the ratio
also improved to 24.0% from 24.8% at FY14.
FAIR VALUE ADJUSTMENTS
The revaluation of properties in South Africa and GOZ resulted in an upward revision of R3,4 billion (3.8%) to R93,6
billion for investment property (including investment properties reclassified as held for sale). This was mainly due to
an increase in future contractual rental. Interest-bearing borrowings and derivatives were fair valued using the swap
curve at FY15, resulting in a decrease of R272 million in the overall liability. In addition a loss of R116 million was
realised on the settlement of an interest rate swap by GOZ.
These fair value adjustments, together with the other non-distributable items such as capital items, non-cash charges,
deferred taxation and the net effect of the non-controlling interest's portion of the non-distributable items were
transferred to the non-distributable reserve.
FINANCE COSTS
Finance costs increased by 19.3% to R2 086 million (FY14: R1 748 million) as a result of the further investments made in
GOZ, loans advanced to the V&A Waterfront as well as the special dividend paid in April relating to the Acucap and Sycom
business combination. These outflows were somewhat negated by the proceeds from the DRIPs offered by Growthpoint. The
weighted average interest rate for RSA borrowings was 8.9% (FY14: 9.4%). The weighted average maturity of debt reduced
to 2.9 years (FY14: 3.5 years). Finance costs for GOZ decreased by 9.4% from R467 million in FY14 to R423 million in
FY15. The additional equity raised by GOZ was used for the acquisition of properties and to settle debt, resulting in
the decrease. The interest cover ratio, whereby the income from the equity-accounted investments and listed investments
are included in the operating profit, increased from 3.3 at FY14 to 3.4 at FY15.
FINANCE INCOME
Finance income increased by 68.1% to R916 million (FY14: R545 million). The increase resulted mainly from distributions
received from the listed investment in Acucap and Sycom amounting to R345 million (FY14: nil) for the period up to 31
March 2015.
These listed investments have been accounted for in terms of IAS 39, Financial Instruments: Recognition and Measurement,
as available for sale investments and are reflected at fair value in the Statement of Financial Position.
ACQUISITIONS AND COMMITMENTS
In addition to the acquisition of the Acucap and Sycom portfolios, on 1 September 2014 Growthpoint acquired the
remaining 50% interest in the properties owned by Truzen 75 Trust from the remaining beneficiaries, as well as the
remaining shares in Erven 99 and 100 Parktown Township Share Block Company (Pty) Ltd from Zenprop (this business
combination was reported on in full in the condensed unaudited results for the six months ended 31 December 2014).
Growthpoint also acquired one industrial property for R21 million and two other office properties for R95 million during
the year. Development and capital expenditure for RSA amounting to R1,9 billion (FY14: R1,0 billion) relates to various
projects undertaken during the year, of which the Discovery Head Office (owned 55%) and Bridgeway Park Office Block
accounted for R420 million and R83 million, respectively.
GOZ acquired land for an office property development situated at 211 Wellington Road, Mulgrave, Victoria for R67,0
million (AUD 7,0 million) and incurred development expenditure in respect of this land amounting to R252 million (AUD
27,2 million) during the year. Three industrial properties were acquired by GOZ for R571 million (AUD 60,4 million).
GOZ has a further outstanding commitment to fund through the development of 12 718 m2 office space for an amount of
R268,7 million (AUD 28,6 million). The building will yield 7.6% on completion. In addition GOZ has commitments amounting
to R197 million (AUD21,0 million).
Growthpoint RSA has commitments outstanding in respect of developments amounting to R2,7 billion (FY14: R2,1 billion) of
which the Discovery Head Office (55% share) of R1,2 billion is the largest. Further commitments in respect of property
acquisitions amount to R531 million (FY14: R272 million) and includes development land in Samrand, Midrand for R360
million.
Development and capital expenditure at the V&A Waterfront amounted to R309 million (FY14: R276 million) for the year.
Growthpoint's share of the V&A Waterfront's commitments outstanding at FY15 amounted to R475 million (FY14: R496
million), which relates to the PwC and Werksmans Office development, the Grain Silo development, phase 2 of the car
park, Virgin Active club and number 3 Silo consisting of residential units for sale.
DISPOSALS AND HELD FOR SALE ASSETS
Growthpoint RSA disposed of 18 properties in the current year (FY14: 14) for R621 million (FY14: R651 million) with a
collective R205 million (FY14: R132 million) profit on cost achieved.
At FY15, five RSA properties (FY14: eight) valued at R539 million (FY14: R265 million) were classified as held for sale
assets.
ARREARS
Total RSA arrears at FY15 amounted to R63,7 million (FY14: R34,7 million) with a provision for bad debts of R25,9
million (FY14: R14,1 million). Total RSA bad debt expenses amounted to R15,1 million (FY14: R6,6 million). Growthpoint
has provided in full for its total exposure to Ellerines.
VACANCY LEVELS
At FY15, the total m2 of Growthpoint's portfolio and vacancy levels expressed as a percentage of GLA were:
GLA Vacancy
m2 m2 % %
FY15 FY14 FY15 FY14
Retail 1 410 461 907 746 3.3 4.5
Office 1 790 428 1 460 741 8.0 8.0
Industrial 2 225 075 2 194 459 5.3 3.0
RSA total 5 425 964 4 562 946 5.7 4.9
V&A Waterfront (50%) 202 658 195 700 2.6 1.5
GOZ 1 050 611 1 036 740 1.0 1.5
Total 6 679 233 5 795 386 4.8 4.2
Vacancies in the industrial sector have increased during FY15, mainly due to the loss of Ellerines as a tenant in three
distribution centres. The vacancies were further impacted by developments that were not fully let. This is being
addressed through various initiatives including the UNdeposit campaign, which to date has received significant traction.
EQUITY RAISED
During the year, Growthpoint issued 426.1 million shares and raised R11,7 billion. Details thereof are as follows. In
September 2014 R1 006 million, in March 2015 R1 199 million and in April 2015 R442 million was raised through DRIP
programs, where 42.2 million, 46.4 million and 16.3 million shares were issued at R24.20, R26.25 and R27.25 per share
respectively. The equity raised from the DRIPs was utilised to finance Growthpoint's investment activities.
Growthpoint issued 3.8 million shares for the acquisition of the remaining 50% interest in Truzen 75 Trust, as well as
the remaining 50% share in Erven 99 and 100 Parktown Township Share Block Company (Pty) Ltd.
Growthpoint issued 317.4 million shares in April 2015 for the purchase of the Acucap shares it did not already own.
The company has 2.7 billion shares in issue at FY15 and the authorised capital is 4.0 billion shares. Growthpoint held
30 631 827 treasury shares at FY15 (FY14: 32 406 635).
BORROWINGS AND NET WORKING CAPITAL
At FY15, the consolidated loan to value ratio (LTV) measured by dividing the nominal value of interest-bearing
borrowings (net of cash) by the fair value of property assets, including investment property held for sale, plus the
equity-accounted investments and the listed investments, was 33.2% (FY14: 30.8%). The higher LTV relates directly to the
higher LTV of the Acucap and Sycom portfolios. Growthpoint has consistently applied its policy on fair value measurement
in respect of long-term interest-bearing loans and derivatives and there has been no change in valuation techniques, nor
have there been any transfers between level 1, level 2 and level 3 during the period under review.
Growthpoint has unutilised committed bank facilities in RSA amounting to R4,1 billion and in Australia R2,1 billion (AUD
228 million) at FY15 which provides assurance that it will be able to meet its short-term commitments which exceeded
current assets by R4,7 billion at FY15 (FY14: R4,5 billion).
CHANGE IN DIRECTORATE
Mr Colin Steyn retired on 18 November 2014 as a non-executive director of Growthpoint. Mr Estienne de Klerk was
appointed as Managing Director of Growthpoint with effect from 3 March 2015.
EVENTS AFTER THE REPORTING PERIOD
There have been no facts or circumstances of a material nature that have occurred between the reporting date and the
date of this report.
PROSPECTS
Considering the weak domestic economy and rising interest rate environment in South Africa, the integration of the
Acucap and Sycom acquisition, the budgeted impact of the relatively stable rand against the Australian Dollar, as well
as increased withholding tax on distributions received from GOZ, the Growthpoint Board are of the view that dividends
per share for FY16 will grow between 5% and 6% over that achieved in FY15.
This forecast has not been subject to audit or review by the company's independent external auditors.
FINAL DIVIDEND WITH THE ELECTION TO REINVEST THE CASH DIVIDEND IN RETURN FOR GROWTHPOINT SHARES
Notice is hereby given of the declaration of the final dividend number 59 of 44,50000 cents per share for the year ended
30 June 2015.
Shareholders will be entitled to elect to reinvest the net Cash Dividend, in return for Growthpoint shares (Share Alternative),
failing which they will receive the net Cash Dividend in respect of all or part of their shareholdings. The entitlement of
shareholders to elect to participate in the share re-investment alternative is subject to the Board, either itself or through
a Board sub-committee appointed to set the pricing and terms of the share re-investment alternative, having the discretion to
withdraw the entitlement to elect the share re-investment alternative should market conditions warrant such action.
The withdrawal of the entitlement to elect the share re-investment alternative will be communicated to shareholders before
the publication of the finalisation announcement on Friday, 4 September 2015.
Other information:
- issued shares at 30 June 2015: 2 711 056 264 ordinary shares of no par value.
- Income Tax Reference Number of Growthpoint: 9375/077/71/7.
- there are no Secondary Tax on Company (STC) credits available for utilisation against the dividend tax.
In accordance with Growthpoint's status as a Real Estate Investment Trust (REIT) with effect from 1 July 2013,
shareholders are advised that the dividend meets the requirements of a ‘qualifying distribution' for the purposes of
section 25BB of the Income Tax Act, No. 58 of 1962 (Income Tax Act). The dividends on the shares will be deemed to be
taxable dividends for South African tax purposes in terms of section 25BB of the Income Tax Act.
Tax implications for South African resident shareholders
Dividends 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 the income tax in terms of the exclusion to the general dividend exemption
contained in section 10(1)(k)(i)(aa) of the Income Tax Act, because they are dividends distributed by a REIT. These
dividends are however exempt from dividend withholding tax (Dividend Tax) in the hands of South African resident
shareholders provided that the South African resident shareholders have provided to the Central Securities Depository
Participant (CSDP) or broker, as the case may be, in respect of uncertificated shares, or the company, in respect of
certificated shares, a DTD(EX) (Dividend Tax: Declaration and undertaking to be made by the beneficial owner of a share)
form to prove their status as South African residents.
If resident shareholders have not submitted the abovementioned documentation to confirm their status as South African
residents, they are advised to contact their CSDP or broker, as the case may be, to arrange for the documents to be
submitted prior to the payment of the dividend.
Tax implications for non-resident shareholders
Dividends received by non-resident shareholders from a REIT will not be taxable as income and instead will be treated as
ordinary dividends which are exempt from income tax in terms of the general dividend exemption section 10(1)(k) of the
Income Tax Act. With effect from 1 January 2014, any dividend received by a non-resident from a REIT is subject to
Dividend Tax at 15%, 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 non-resident shareholder. Assuming Dividend Tax
will be withheld at a rate of 15%, the net amount due to non-resident shareholders is 37,82500 cents per share. A
reduced dividend withholding tax rate in terms of the applicable DTA may only be relied on if the non-resident
shareholder has provided the following forms to their CSDP or broker, as the case may be, in respect of uncertificated
shares, or the company, in respect of certificated shares:
- a declaration that the dividend is subject to a reduced rate as a result of the application of the DTA; and
- a written undertaking to inform the CSDP broker or the company, as the case may be, 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 of the South African Revenue Services.
If applicable, non-resident shareholders are advised to contact the CSDP, broker or the company, as the case may be, to
arrange for the abovementioned documents to be submitted prior to payment of the dividend if such documents have not
already been submitted.
Summary of the salient dates relating to the Cash Dividend and Share Alternative are as follows:
2015
Circular and form of election posted to shareholders Friday, 28 August
Last date for Growthpoint to withdraw the entitlement for shareholders to elect to participate in the share re-investment alternative
before the publication of the announcement of the share alternative issue price and finalisation information on SENS Friday, 4 September
Announcement of Share Alternative issue price and finalisation information Friday, 4 September
Last day to trade ("LDT") cum dividend Friday, 11 September
Shares to trade ex dividend Monday, 14 September
Listing of maximum possible number of Share Alternative shares commences on the JSE Wednesday, 16 September
Last day to elect to receive the Share Alternative (forms of election will not be accepted after 12:00 South African time) Friday, 18 September
Record date Friday, 18 September
Announcement of results of Cash Dividend and Share Alternative released on SENS Monday, 21 September
Cheques posted to certificated shareholders and accounts credited by CSDP or broker to dematerialised shareholders electing the Cash Monday, 21 September
Alternative, on or about
Share certificates posted to certificated shareholders and accounts credited by CSDP or broker to dematerialised shareholders electing the
Share Alternative, on or about Wednesday, 23 September
Adjustment to shares listed, on or about Friday, 25 September
Notes:
1. Shareholders electing the Share Alternative are alerted to the fact that the new shares will be listed on LDT + 3
and that these new shares can only be traded on LDT + 3, due to the fact that settlement of the shares will be
three days after record date, which differs from the conventional one day after record date settlement process.
2. Shares may not be dematerialised or rematerialised between Monday, 14 September 2015 and close of trade on
Friday, 18 September 2015.
3. The above dates and times are subject to change. Any changes will be released on SENS and published in the press.
4. The Cash Dividend or Share Alternative may have tax implications for resident and non-resident shareholders.
Shareholders are therefore encouraged to consult their professional advisors should they be in any doubt as to
the appropriate action to take.
By order of the Board
GROWTHPOINT PROPERTIES LIMITED
25 August 2015
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
30 June 30 June
2015 2014
Note Rm Rm
Revenue, excluding straight-line lease income adjustment 7 740 6 412
Straight-line lease income adjustment 130 193
Revenue 7 870 6 605
Property expenses (1 630) (1 384)
Net property income 6 240 5 221
Other operating expenses and income (303) (267)
Operating profit 5 937 4 954
Fair value adjustments 3 562 2 396
Equity-accounted investment profit 484 91
Finance costs (2 086) (1 748)
Non-cash charges (1 723) (78)
Capital items 1 078 (23)
Finance and other investment income 1 916 545
Profit before taxation 8 168 6 137
Taxation (264) (160)
Normal taxation (including withholding tax on GOZ distribution) (72) (28)
Deferred taxation (192) (132)
Profit after taxation 7 904 5 977
Profit attributable to:
Equity holders 6 955 5 579
Non-controlling interest (NCI) 949 398
Other Comprehensive Income:
Items that are or may be reclassified to Profit or Loss:
Translation of foreign operations (703) 888
Fair value of listed investments 1 143 (46)
Fair value of listed investments - reclassified to profit or loss (1 097) –
Total Comprehensive Income 7 247 6 819
Attributable to:
Equity holders 6 548 6 110
Non-controlling interest 699 709
Calculation of distributable earnings
Operating profit 5 937 4 954
Less: Straight-line lease income adjustment (130) (193)
Finance costs (2 086) (1 748)
Finance and other investment income 916 545
Cash adjustment on business acquisitions (accounted for in Statement of Changes in Equity) 4 110
Dividends received on treasury shares (accounted for in Statement of Changes in Equity) 66 25
Distribution received on listed investments – 165
Distributable income from GOZ retained (including NCI) (74) (40)
Non-controlling interest's share of distribution (excluding fair value adjustments) (374) (295)
Realised foreign exchange gain 45 2
Taxation (excluding deferred tax) (72) (28)
Distributable earnings 4 232 3 497
Total dividend 2 4 232 3 497
Taxable dividend (interim) 1 967 1 605
Taxable dividend (special interim) 1 058 –
Taxable dividend (final) 1 207 1 892
Shares Shares
Total shares in issue at the end of the year 2 711 056 264 2 284 908 257
Treasury shares (30 631 827) (32 406 635)
Total shares in issue at the end of the year (excluding treasury shares) 2 680 424 437 2 252 501 622
Weighted number of shares in issue 2 359 724 314 1 996 917 123
Cents Cents
Dividend per share 173,4 161,3
Six months ended 31 December 84,4 78,5
Three months ended 31 March 44,5 –
Three months (FY14: six months) ended 30 June 44,5 82,8
Basic earnings per share 3 294,74 279,38
Diluted earnings per share 292,68 277,53
Headline earnings per share 4 149,42 154,24
Diluted headline earnings per share 148,38 153,22
STATEMENT OF FINANCIAL POSITION
30 June 30 June
2015 2014
Rm Rm
ASSETS
Non-current assets 103 187 81 573
Fair value of investment property for accounting purposes 90 917 67 627
Straight-line lease income adjustment 2 118 2 021
Fair value of long-term property assets 93 035 69 648
Equity-accounted investments 6 464 5 722
Listed investments 380 4 457
Intangible assets 2 580 1 258
Equipment 9 10
Long-term loans granted 614 466
Derivative assets 105 12
Current assets 3 216 1 671
Investment property reclassified as held for sale 539 265
Current portion of long-term loans granted 467 –
Trade and other receivables 1 705 1 031
Cash and cash equivalents 505 375
Total assets 106 403 83 244
EQUITY AND LIABILITIES
Shareholders' interest 63 369 49 895
Share capital 41 132 29 436
Treasury shares (646) (682)
Foreign currency translation reserve 1 072 1 506
Non-distributable reserve 20 604 17 743
Retained earnings 1 207 1 892
Non-controlling interest 4 713 4 180
Total equity 68 082 54 075
Non-current liabilities 30 372 23 016
Non-current financial liabilities 28 755 21 591
Deferred tax liability 1 617 1 425
Current liabilities 7 949 6 153
Trade and other payables 1 802 1 426
Current portion of non-current financial liabilities 5 930 4 543
Taxation payable 31 13
Linked unitholders for distribution 186 171
Total equity and liabilities 106 403 83 244
Cents Cents
Net asset value per share 2 364 2 215
Tangible net asset value per share which excludes intangible assets and deferred tax 2 328 2 223
STATEMENT OF CASH FLOWS
Restated
30 June 30 June
2015 2014
Note Rm Rm
Cash generated from operations 5 911 4 760
Finance and other investment income 497 274
Finance costs (2 055) (1 732)
Taxation paid (54) (20)
Capital items (38) (51)
Distribution to shareholders (5 618) (3 265)
Net cash outflow from operating activities (1 357) (34)
Net cash outflow from investing activities 5 (2 283) (7 253)
Net cash inflow from financing activities 5 3 781 5 742
Net increase/(decrease) in cash and cash equivalents 141 (1 545)
Translation effects on cash and cash equivalents of foreign operation (11) 8
Cash and cash equivalents at beginning of the year 375 1 912
Cash and cash equivalents at end of the year 505 375
STATEMENT OF CHANGES IN EQUITY
Foreign
currency Non- Non-
translation distributable Retained controlling
Share Treasury reserve reserve earnings Shareholders' interest Total
capital shares (FCTR) (NDR) (RE) interest (NCI) equity
Note Rm Rm Rm Rm Rm Rm Rm Rm
Balance at 30 June 2013 95 – 962 (849) – 208 2 485 2 693
Total comprehensive income – profit after taxation – – – – 5 579 5 579 398 5 977
Total comprehensive income – other comprehensive income – – 577 (46) – 531 311 842
Transactions with owners recognised directly in equity
Conversion of debentures to ordinary share capital and NDR 20 257 – – 16 280 – 36 537 – 36 537
Shares issued 9 084 – – – – 9 084 – 9 084
Cash adjustment on business acquisitions – – – – 110 110 – 110
Acquisition of treasury shares – (728) – – – (728) – (728)
Dividends received on treasury shares – – – – 25 25 – 25
Transfer non-distributable items to NDR – – – 2 217 (2 217) – – –
Share-based payment transactions – 46 – 88 – 134 – 134
Rights issue and acquisitions – GOZ – – (33) – 53 20 1 281 1 301
Transfer to NDR reserves with NCI – – – 53 (53) – – –
Dividends declared – NCI – – – – – – (295) (295)
Dividends declared – – – – (1 605) (1 605) – (1 605)
Balance at 30 June 2014 29 436 (682) 1 506 17 743 1 892 49 895 4 180 54 075
Total comprehensive income – profit after taxation – – – – 6 955 6 955 949 7 904
Total comprehensive income – other comprehensive income – – (453) 46 – (407) (250) (657)
Transactions with owners recognised directly in equity
Shares issued 11 696 – – – – 11 696 – 11 696
Acquisition of subsidiary with NCI – – – – – – 64 64
Cash adjustment on business acquisitions – – – – 4 4 – 4
Dividends received on treasury shares 2 – – – – 66 66 – 66
Transfer non-distributable items to NDR – – – 2 790 (2 790) – – –
Share-based payment transactions – 36 – 72 – 108 – 108
Acquisitions – GOZ – – 19 – (47) (28) 144 116
Transfer to NDR reserves with NCI – – – (47) 47 – – –
Dividends declared – NCI – – – – – – (374) (374)
Dividends declared 2 – – – – (4 920) (4 920) – (4 920)
Balance at 30 June 2015 41 132 (646) 1 072 20 604 1 207 63 369 4 713 68 082
SEGMENTAL ANALYSIS
South Africa
Total as V&A Other joint
Retail Office Industrial Australia reported Waterfront ventures Total
Rm Rm Rm Rm Rm Rm Rm Rm
Statement of Profit or Loss and Other Comprehensive Income extracts – 30 June 2015
Revenue, excluding straight-line lease income adjustment 1 995 2 752 1 149 1 844 7 740 553 19 8 312
Property expenses (525) (635) (257) (213) (1 630) (154) (5) (1 789)
Segment results 1 470 2 117 892 1 631 6 110 399 14 6 523
Material non-cash items:
Fair value adjustment on investment property 896 772 202 1 077 2 947 480 19 3 446
Fair value adjustment on investment property – NCI – – – 587 587 – – 587
Impairment of goodwill (949) (569) (40) – (1 558) – – (1 558)
South Total as V&A Other joint
Africa Australia reported Waterfront ventures Total
Rm Rm Rm Rm Rm Rm
Further extracts of Statement of Profit or Loss and Other Comprehensive Income
Other operating expenses and income (222) (81) (303) (16) (3) (322)
Finance costs (1 663) (423) (2 086) (28) (11) (2 125)
Finance and other investment income 909 7 916 8 – 924
South Africa
Total as V&A Other joint
Retail Office Industrial Australia reported Waterfront ventures Total
Rm Rm Rm Rm Rm Rm Rm Rm
Statement of Financial Position extracts at 30 June 2015
Investment property
Opening balance 1 July 2014 15 756 24 012 9 286 20 859 69 913 5 947 315 76 175
Acquisition – Acucap & Sycom 11 324 6 789 473 – 18 586 – 569 19 155
Acquisition – Other – 755 21 637 1 413 25 – 1 438
Developments and capital expenditure 352 1 003 530 306 2 191 309 – 2 500
Disposals (115) (430) (76) (237) (858) – (272) (1 130)
Foreign exchange loss – – – (1 205) (1 205) – – (1 205)
Fair value adjustments 896 772 202 1 664 3 534 480 19 4 033
Fair value of total property assets – 30 June 2015 28 213 32 901 10 436 22 024 93 574 6 761 631 100 966
Fair value of long-term property assets 28 213 32 432 10 366 22 024 93 035 6 761 631 100 427
Investment property reclassified as held for sale – 469 70 – 539 – – 539
South Total as V&A Other joint
Africa Australia reported Waterfront ventures Total
Rm Rm Rm Rm Rm Rm
Further extracts of Statement of Financial Position
Intangible assets 2 580 – 2 580 – – 2 580
Opening balance 1 July 2014 1 258 – 1 258 – – 1 258
Acquisition through business combination 2 978 – 2 978 – – 2 978
Impairment of goodwill (1 558) – (1 558) – – (1 558)
Additions during the year 4 – 4 – – 4
Amortisation for the year ( 102) – ( 102) – – ( 102)
Listed investments 380 – 380 – – 380
Trade and other receivables 1 353 352 1 705 23 – 1 728
Cash and cash equivalents 253 252 505 129 3 637
Trade and other payables (1 514) (288) (1 802) (102) (10) (1 914)
Financial liabilities (26 130) (8 555) (34 685) (197) (502) (35 384)
Nominal value – interest-bearing liabilities (25 444) (8 367) (33 811) (197) (502) (34 510)
Fair value adjustments (686) (131) (817) – – (817)
Foreign translation differences – (57) (57) – – (57)
South Africa
Total as V&A Other joint
Retail Office Industrial Australia reported Waterfront ventures Total
Rm Rm Rm Rm Rm Rm Rm Rm
Statement of Profit or Loss and Other Comprehensive Income extracts – 30 June 2014
Revenue, excluding straight-line lease income adjustment 1 645 2 076 1 074 1 617 6 412 485 10 6 907
Property expenses (459) (494) (235) (196) (1 384) (129) (2) (1 515)
Segment results 1 186 1 582 839 1 421 5 028 356 8 5 392
Material non-cash items:
Fair value adjustment on investment property 866 847 565 187 2 465 122 – 2 587
Fair value adjustment on investment property – NCI – – – 101 101 – – 101
South Total as V&A Other joint
Africa Australia reported Waterfront ventures Total
Rm Rm Rm Rm Rm Rm
Further extracts of Statement of Profit or Loss and Other Comprehensive Income
Other operating expenses and income (182) (85) (267) (16) – (283)
Finance costs (1 281) (467) (1 748) (18) (4) (1 770)
Finance and other investment income 540 5 545 4 – 549
South Africa
Total as V&A Other joint
Retail Office Industrial Australia reported Waterfront ventures Total
Rm Rm Rm Rm Rm Rm Rm Rm
Statement of Financial Position extracts at 30 June 2014
Investment property
Opening balance 1 July 2013 14 915 16 211 8 042 15 063 54 231 5 549 – 59 780
Acquisition – Tiber 90 4 942 347 – 5 379 – 315 5 694
Acquisition – Abseq – 1 343 – – 1 343 – – 1 343
Acquisition – Other 1 284 205 3 452 3 942 – – 3 942
Developments and capital expenditure 270 543 234 416 1 463 276 – 1 739
Disposals (386) (158) (107) – (651) – – (651)
Foreign exchange gain – – – 1 640 1 640 – – 1 640
Fair value adjustments 866 847 565 288 2 566 122 – 2 688
Fair value of total property assets – 30 June 2014 15 756 24 012 9 286 20 859 69 913 5 947 315 76 175
Fair value of long-term property assets 15 597 23 942 9 250 20 859 69 648 5 947 315 75 910
Investment property reclassified as held for sale 159 70 36 – 265 – – 265
South Total as V&A Other joint
Africa Australia reported Waterfront ventures Total
Rm Rm Rm Rm Rm Rm
Further extracts of Statement of Financial Position
Intangible assets 1 258 – 1 258 – – 1 258
Opening balance 1 July 2013 1 354 – 1 354 – – 1 354
Additions during the year 6 – 6 – – 6
Amortisation for the year (102) – (102) – – (102)
Listed investments 4 457 – 4 457 – – 4 457
Trade and other receivables 874 157 1 031 32 5 1 068
Cash and cash equivalents 163 212 375 97 13 485
Trade and other payables (1 161) (265) (1 426) (81) (5) (1 512)
Financial liabilities (17 239) (8 895) (26 134) (196) (131) (26 461)
Nominal value – interest-bearing liabilities (16 368) (8 677) (25 045) (196) (131) (25 372)
Fair value adjustments (871) (149) (1 020) – – (1 020)
Foreign translation differences – (69) (69) – – (69)
NOTES
30 June 30 June
2015 2014
Rm Rm
Note 1: Finance and other investment income 916 545
Other finance income 203 213
Distribution from V&A Waterfront 368 332
Distribution from Acucap & Sycom 345 –
Note 2: Dividends on treasury shares
The interim dividend of R1 967 million (HY14: R1 605 million) included dividends on treasury shares of R26 million (HY14: R25 million). The net interim dividend
paid by Growthpoint for accounting purposes was R1 941 million (HY14: R1 580 million).
The special interim dividend of R1 058 million (FY14: Rnil) included dividends on treasury shares of R14 million (FY14: Rnil). The net special interim dividend paid
by Growthpoint for accounting purposes was R1 044 million.
The total dividend of R4 232 million (FY14: R3 497 million) includes dividends on treasury shares of R53 million (FY14: R52 million). The net total dividend paid
and payable is therefore R4 179 million (FY14: R3 445 million).
Note 3: Basic and diluted earnings per share
The directors are of the view that the disclosure of earnings per share, while obligatory in terms of IAS 33, Earnings per Share, and the JSE Limited Listings
Requirements, is not meaningful to investors as the basic profit includes fair value adjustments, as well as other non-distributable items.
The calculation of distributable earnings and the dividend per share is more meaningful.
Note 4: Headline earnings per share
In terms of Circular 2/2013, issued by SAICA, the fair value adjustment on investment property is added back in the calculation of headline earnings per share. The
Circular does not make provision for the fair value adjustment on non-current financial liabilities, accounting adjustments required to account for lease income on
a straight-line basis, as well as other non-cash fair value accounting adjustments that do not affect distributable earnings, to be added back.
30 June 30 June
2015 2014
Rm Rm
Basic profit is reconciled to headline earnings as follows:
Profit after taxation – attributable to equity holders 6 955 5 579
Impairment of goodwill/(bargain purchase) 1 558 (28)
Realised profit on sale of listed investments (1 097) –
Add back: Net fair value adjustment – investment property (3 890) (2 471)
Fair value adjustment, net of straight-line lease income adjustment (2 817) (2 272)
Fair value adjustment (equity-accounted investments) (486) (98)
NCI portion of fair value adjustment (587) (101)
Headline earnings attributable to shareholders 3 526 3 080
Note 5: Restatement of Statement of Cash Flows
In 2014, the Statement of Cash Flows reflected the acquisitions of Abseq and Tiber as a cash outflow as part of investing activities, with the related issue of
shares for these acquisitions as a cash inflow as part of financing activities. The acquisitions were financed in part by the issue of shares and therefore no cash
flows should have been reflected for this. The Statement of Cash Flows has been restated to reflect the relevant cash movements for these transactions.
The line items affected are: Previously reported Effect of change Restated
Rm Rm Rm
Net cash outflow from investing activities (14 348) 7 095 (7 253)
Net cash inflow from financing activities 12 837 (7 095) 5 742
This announcement does not include the information required pursuant to paragraph 16A(j) of IAS 34. The full preliminary report is available at the issuers
registered office and upon request.
DIRECTORS
JF Marais (Chairman), HSP Mashaba (Deputy Chairman), LN Sasse* (Chief Executive Officer), EK de Klerk* (Managing Director), G Völkel* (Financial Director),
MG Diliza, PH Fechter, LA Finlay, JC Hayward, HS Herman, SP Mngconkola, R Moonsamy, NBP Nkabinde, FJ Visser
* Executive
GROWTHPOINT PROPERTIES LIMITED COMPANY SECRETARY
(Incorporated in the Republic of South Africa) RA Krabbenhöft
(Registration number 1987/004988/06)
A Real Estate Investment Trust, listed on the JSE
Share code: GRT ISIN: ZAE000179420
REGISTERED OFFICE TRANSFER SECRETARY
The Place, 1 Sandton Drive, Sandton, 2196 Computershare Investor Services (Pty) Ltd
PO Box 78949, Sandton, 2146 (Registration number 2004/003647/07)
Ground Floor, 70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
SPONSOR
Investec Bank Limited
(Registration number 1969/004763/06)
100 Grayston Drive, Sandown, Sandton, 2196
PO Box 785700, Sandton, 2146
26 August 2015
Date: 26/08/2015 10:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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