Wrap Text
Reviewed condensed consolidated preliminary financial statements for the year ended 30 June 2015
Texton Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2005/019302/06)
A Real Estate Investment Trust, listed on the JSE Limited
JSE share code: TEX
ISIN: ZAE000190542 (formerly ISIN: ZAE000185872)
Reviewed condensed consolidated preliminary financial statements
for the year ended 30 June 2015
Highlights
Financial highlights
• 94.77 cents distribution per share (2014: 85.47). Up 10.9%
• Net asset value of 1 077.32 cents per share (2014: 993.89 cents per
share). Up 8.4%
• R401.2 million investment property income (2014: R271.8 million).
Up 47.6%
• R283.5 million net property income (2014: R184.0 million).
Up 54.1%
Non-financial highlights
• 349 051 square metres of gross lettable area (2014: 190 116).
Up 83.6%
• 49.9% National/listed/blue chip tenants (2014: 37.2%). Up 34.1%
• Government tenants 18.9% (2014: 34.6%). Down 45.4%
• 7.9% vacancy (2014: 5.3%)
• 4.75 years weighted average lease expiry (2014: 3.96 years). Up 20.0%
• R4.146 billion portfolio value (2014: R2.203 billion). Up 88.2%
Commentary
Angelique de Rauville, CEO said:
“Much progress was made in diversifying our property portfolio
away from mainly the secondary office sector and also into the
United Kingdom. This has been a major new direction for Texton,
seeing new opportunities and having the expertise with our presence
in the United Kingdom as well as in South Africa. Notably we acquired
23 properties in the year, five of them in the United Kingdom and
Wales and we have established a new collaboration with Tradehold.
The 23 investments totalled R1,766 billion and are delivering on
our mandate to grow, diversify and improve the quality of the Fund.
“The Fund is well on its way to improving its financial and operating
performance, with higher annuity income generated from organic and
acquisitive growth. Our focus on tenant retention and prudent
investment into our assets is starting to generate returns. Going
forward we shall continue with our diversification strategy with
quality investments, tenant satisfaction and shareholder contentment
remaining our key focus areas.
Key performance indicators
Management’s mandate has been to grow and diversify the portfolio.
The new management structure has enabled this and the effect of this
can be seen in the reduction of exposure beyond secondary offices,
the roll-out of the international strategy, the significant increase
in acquisitions and the broadened shareholder base. In addition, the
management team has greatly increased property skills and deal-making
abilities while the pipeline is stronger than it has been since
listing.
Texton has delivered on its strategy by investing into the United
Kingdom (6.5% by GLA and 18.9% by value) and into the retail (7.5%)
and industrial (25.1%) sectors and reducing its office exposure to
67.4% by gross lettable area (2014: 92.9%). Texton believes that such
diversification will significantly improve the risk profile of the
company and add value to its shareholders in the long term.
The vacancy rate (2015: 7.9% vs 2014: 5.3%) is below sector average.
The Fund started the year with two material lease expiries which were
expected and one significant vacancy at Investment Place. The SITA
lease expires on 31 January 2016 and Vodacom, Wierda Valley expired
on 31 May 2015. The take-up of space at Investment Place is notable
and there is interest in the Wierda Valley space previously occupied by
Vodacom (5 101 m2) which has been a significant contributor to the
overall increase in our vacancies year-on-year.
The weighted average lease expiry is 4.75 years (2014: 3.96 years).
In addition we have improved our risk profile by reducing the
concentration of our tenants. Our exposure to government has
reduced to 18.9% (2014: 34.6%) and national and listed/large
entities are currently 49.9% of GLA (2014: 37.2%).
Acquisitions
During the year the group acquired 23 properties comprising of 18
South African properties and 5 properties in the United Kingdom.
Post our balance sheet date we acquired a UK property comprising
35 860 m2 of retail (28 985 m2) and office (6 875 m2)
space in the heart of Reading on 1 July 2015.
The properties acquired during the year were the following:
On 24 July 2014 the Fund acquired an industrial and commercial
building known as Selby, situated on the corner of Main Reef Road and
Press Avenue, Selby. The gross lettable area measures 10 419 m2 all of
which is occupied by a single tenant on a long term, triple net
lease. The purchase price was settled in cash.
On 12 September 2014 the Fund acquired a commercial building known as
Babcock, situated at 1 Osborne Lane, Bedfordview, Johannesburg. The
gross lettable area measures 3 865 m2 all of which is occupied by a
single tenant on a long term, triple net lease. The purchase price
was settled in cash.
On 18 September 2014 the Fund acquired
• a commercial building known as Quintiles, situated at 159 Nelson
Mandela Drive, Bloemfontein. The gross lettable area measures
3 404 m2 all of which is occupied by a single tenant on a long term,
triple net lease. The purchase price was settled in cash.
• a commercial building known as Scott Street, situated in Waverley,
Johannesburg. The gross lettable area measures 4 329 m2 all of
which is occupied by a single tenant on a long term, triple net
lease. The purchase price was settled by the transfer of treasury
shares and the allotment of shares for the balance.
• a section of St George’s Mall, situated in Cape Town. The gross
lettable area measures 1 236 m2 all of which is occupied by a single
tenant on a medium term, triple net lease. The purchase price was
settled in cash.
On 30 October 2014 the Fund acquired a commercial building known as
Edcon Place, situated at 12 Laub Street, Johannesburg. The
gross lettable area measures 27 472 m2 all of which is occupied by
a single tenant on a long term, triple net lease. The purchase price
was settled in shares.
On 31 December 2014 the Fund acquired
• a retail property known as Woodmead Commercial Park, situated at
17 Waterval Crescent, Woodmead. The gross lettable area measures
13 086 m2 which is let to a multitude of tenants on medium term
leases. The purchase price was settled partly in cash and the balance
in shares
• a retail property known as Kempstar Mall, situated at 20 Old
Pretoria Road, Kempton Park, Johannesburg. The gross lettable area
measures 6 019 m2 which is let to a multitude of mostly national
tenants on long and medium term leases. The purchase price was
settled in shares.
• six industrial properties consisting of mini units situated in Kya
Sand, Johannesburg. The gross lettable area measures 12 909 m2 which
is let to a multitude of tenants on medium term leases. The purchase
price was settled in shares.
• an industrial property known as Hermanstad Industrial Park,
situated on the corner of Moot Street and E’skia Mphahlele Drive,
Hermanstad. The gross lettable area measures 44 029 m2 which is let
to a multitude of mostly national tenants on medium term leases. The
purchase price was settled in shares.
• a commercial building known as Blue Strata House, situated at 66
Wierda Road East, Wierda Valley, Johannesburg. The gross lettable
area measures 1 806 m2 all of which is occupied by a single tenant on
a long term, triple net lease. The purchase price was settled in
shares.
• a commercial building known as Bompas Road, situated at 54
Bompas Road, Dunkeld, Johannesburg. The gross lettable area
measures 750 m2 all of which is occupied by a single tenant on a long
term, triple net lease. The purchase price was settled in shares.
On 27 February 2015 the Fund acquired
• an industrial property known as Booker Warehouse, situated in
Burton-upon-Trent, England. The gross lettable area measures 3 826 m2
which is occupied by a single tenant on a long term, triple net
lease. The purchase price was settled in cash
• a commercial building known as Stanford House, situated in
Warrington, England. The gross lettable area measures 5 090 m2 all of
which is occupied by a single tenant on a long term, triple net
lease. The purchase price was settled in cash.
On 27 May 2015 the Fund acquired
• a city centre retail complex known as Bonmarche and Poundland,
situated in Nottingham, England. The gross lettable area measures
2 601 m2 all of which is occupied by two strong tenants on long term,
triple net leases. The purchase price was settled in cash.
• a high quality commercial building known as the Tesco Building,
situated in Newcastle-upon-Tyne, England. The gross lettable area
measures 9 323 m2 all of which is occupied by a single tenant on a
long term, triple net lease. The purchase price was settled in cash.
• a decentralised retail centre known as Parc Pensarn Units,
situated in Carmarthen, Wales. The gross lettable area measures
1 783 m2 all of which is occupied by three strong tenants on long term,
triple net leases. The purchase price was settled in cash.
On 10 June 2015 the Fund acquired a property known as Alrode located
at 5 Liebenberg Street, Alrode. It comprises 16 557 m2 of industrial
space with five well established tenants in place and the purchase
price was settled in cash.
Broad based black economic empowerment (BEE)
The management and board of the fund continue to be committed to the
transformation and empowerment objectives of South Africa, and have
expended considerable effort in addressing our objective of having
meaningful, sustainable and commercially driven BEE shareholding
at the listed level.
The fund additionally recognises that integrating transformation into
business practice is crucial for the sustainability of the company
and industry. As such, it was proud to sponsor several BEE workshops
over the year, with the aim of achieving greater empowerment
knowledge and commitment in the industry.
The 2015 financial year saw two BEE transactions being finalised,
representing a major achievement for the fund:
• PDNA Property Investments Proprietary Limited accepted shares in lieu
of settlement for the sale of two of PD Naidoo's properties to the fund,
resulting in his shareholding in the company being 4.0% at year end.
• R443.5 million worth of shares were issued to a BEE consortium
represented by three entities: Zava African Capital (60%), Jade
Capital Partners (30%), and the broad-based investment holding
company Ditikeni (10%). This transaction was financed by the Public
Investment Corporation, and resulted in an increase in BEE
shareholder representation at year end from zero to 17.8% including
PDNA referred to above.
Greening
Greening remains at the forefront of our minds and we have targeted
our Foretrust building in Cape Town for this purpose. Texton has a
strategy for greening all of its buildings as modern “green” offices
and attracting quality tenants. Apart from lowering consumption
expenses, greening interventions assist in retaining existing
tenants as well as increasing the appeal for new tenants,
partially through the reduction of consumption expenditure.
It is expected that the greening of the Foretrust building will
reduce electricity and water consumption. We are aiming to have a
Green Lease Addendum signed by the Department of Public Works in
order to commence this programme which is expected to cost
R27 million.
Equity raised
In the year under review 106 944 747 new shares were issued taking
the issued share capital from 169 122 019 to 276 066 766 at year end.
This includes 8 643 043 shares issued to the share incentive trust
which are treated as treasury shares.
Two BEE transactions with PDNA (represented by PD Naidoo, the
Chairman of Texton Property Fund) and a consortium of BEE investors
were concluded in two separate transactions of 11 039 439 and
38 069 071 shares issued at R10.25 and R11.65 respectively.
Texton formed a staff incentive share trust during the year which
acquired 8 643 042 shares at R11.57. JA Legh and MJ Van Heerden were
allocated 21 043 366 shares at R9.43 in lieu of settlement for the
properties that Texton acquired from them, and finally vendor
shares were placed with private investors. These shares were placed
in two separate transactions of 16 205 050 at R9.50 and
20 856 696 shares at R9.10 respectively.
Condensed consolidated statement of financial position
as at 30 June 2015
Reviewed Audited
2015 2014
R’000 R’000
Assets
Non-current assets 4 338 969 2 219 986
Investment property 4 146 385 2 202 525
Property, plant and equipment 8 322 7 925
Goodwill 77 018 -
Other non-current assets 8 923 5 781
Restricted cash 98 321 -
Deferred tax - 3 755
Current assets 361 287 113 501
Trade and other receivables 85 182 23 824
Investment property reclassified as
held for sale 24 000 24 000
Income tax receivable 3 631 1 228
Restricted cash 28 089 -
Cash and cash equivalents 220 385 64 449
Total assets 4 700 256 2 333 487
Equity and liabilities
Equity 2 880 999 1 592 316
Stated capital 2 037 921 945 436
Retained earnings 832 781 646 880
Share base payment reserve 1 074 -
Foreign currency translation reserve 9 223 -
Shareholders’ interest 2 880 999 1 592 316
Other liabilities
Other non-current liabilities 1 719 760 360 066
Other financial liabilities 1 716 145 360 066
Deferred tax 3 615 -
Current liabilities 99 497 381 105
Current portion of other financial
liabilities 30 613 337 277
Trade and other payables 68 884 43 828
Total liabilities 1 819 257 741 171
Total equity and liabilities 4 700 256 2 333 487
Shares in issue (‘000) 267 424 160 210
Net asset value per share (cents) 1 077.32 993.89
Net tangible asset value less
deferred tax per share (cents) 1 049.87 991.55
Condensed consolidated statement of comprehensive income
for the year ended 30 June 2015
Reviewed Audited
2015 2014
R’000 R’000
Investment property income 401 181 271 759
Straight-line rental adjustment 590 1 839
Revenue 410 771 273 598
Property expenses (127 269) (89 571)
Net property income 283 502 184 027
Other income 22 804 5 444
Other operating expenses (18 630) (4 689)
Asset management fees (14 834) (9 588)
Operating profit 272 842 175 194
Finance income 585 8 299
Finance costs (77 588) (41 421)
Fair value adjustments 164 242 114 827
Capital items (114) (9)
Profit before debenture interest 359 967 256 890
Debenture interest (64 022)
Profit before amortisation of
debenture premium 359 967 192 868
Amortisation of debenture premium - 2 159
Profit before income tax 359 967 195 027
Income tax (8 063) (370)
Profit for the year 351 904 194 657
Other comprehensive income
Items that may subsequently be
reclassified to profit or loss
Exchange differences on translation
of foreign operations 9 223 -
Total comprehensive income for the
year 361 127 194 657
Basic and diluted earnings per share
(cents) 175.66 123.60
Comparable basic and diluted
earnings per share (cents) 175.66 162.88
Condensed consolidated statement of changes in equity
for the year ended 30 June 2015
Non- Share-
Ordinary distri- based
share Stated butable payment
capital capital reserve reserve
R’000 R’000 R’000 R’000
Balance at
30 June 2013
(audited) 301 - 498 284
Transactions with
owners of the company
recognised directly
in equity
Issue of shares 121
Treasury shares
acquired - (86 060) -
Transfer from
non-distributable
reserve (498 284)
Conversion of
debentures to shares
with no
par value (422) 1 031 496
Total comprehensive
income for the year
Profit for the year
Balance at
30 June 2014
(audited) - 945 436 -
Transactions with
owners of the company
recognised directly
in equity
Issue of shares 1 092 485
Dividend paid
Share based 1 074
payment transactions
Total comprehensive
income for the year
Profit for the year
Exchange differences
on translation of
foreign operations
Balance at
30 June 2015
(reviewed) - 2 037 921 - 1 074
Foreign (Accumulated
currency loss)/
translation retained
reserve earnings Total
R’000 R’000 R’000
Balance at 30 June 2013
(audited) (46 061) 452 524
Transactions with owners
of the company recognised
directly in equity
Issue of shares 121
Treasury shares acquired - (86 060)
Transfer from non-
distributable reserve 498 284 -
Conversion of debentures
to shares with no par
value 1 031 074
Total comprehensive
income for the year
Profit for the year 194 657 194 657
Balance at 30 June 2014
(audited) 646 880 1 592 316
Transactions with owners
of the company recognised
directly in equity -
Issue of shares 1 092 485
Dividend paid (166 003) (166 003)
Share based payment
transactions 1 074
Total comprehensive
income for the year 9 223 351 904 361 127
Profit for the year 351 904 351 904
Exchange differences
on translation of foreign
operations 9 223 9 223
Balance at 30 June 2015
(reviewed) 9 223 832 781 2 880 999
Condensed consolidated statement of cash flows
For the year ended 30 June 2015
Reviewed Audited
2015 2014
R’000 R’000
Cash flows from operating activities
Cash generated by operations 217 300 170 771
Finance income received 585 8 299
Finance costs paid (70 748) (41 200)
Dividend paid (166 003)
Debenture interest paid - (111 361)
Income tax paid (3 558) (335)
Net cash (outflow)/inflow from
operating activities (22 424) 26 174
Cash flow from investing activities
Additions to property, plant and
equipment (4 493) (5 382)
Additions to investment property (7 184) (1 851)
Additions to other non-current
assets (4 056) (532)
Proceeds on disposal of
investment property 47 091 -
Acquisition of businesses
net of cash acquired (550 047) (357 149)
Net cash outflow from investing
activities (518 689) (364 914)
Cash flow from financing activities
Proceeds from issue of shares 628 035 446 325
Repurchase of treasury shares - (86 060)
Advance of other financial
liabilities 446 387 205 752
Repayment of other financial
liabilities (378 058) (186 383)
Net cash inflow from financing
activities 696 364 379 634
Net increase in cash and cash
equivalents 155 251 40 894
Effect of the conversion of foreign
operations on cash and
cash equivalents 685 -
Cash and cash equivalents at the
beginning of the year 64 449 23 555
Cash and cash equivalents at the
end of the year 220 385 64 449
Basis of preparation
These condensed consolidated preliminary financial statements are
prepared in accordance with the requirements of 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) and 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. The accounting policies applied in the preparation of the
condensed consolidated preliminary financial statements are in terms
of IFRS and are consistent with those applied in the previous
consolidated annual financial statements except for the adoption
of new standards which became effective on 1 July 2014.
The adoption of new standards and interpretations has
had no material effect on the results for the year nor has it
required the restatement of any prior year figures. The condensed
consolidated preliminary financial statements information has been
presented on the historical cost basis, except for financial
instruments and investment properties carried at fair value, and
is presented in Rand thousands which is Texton’s functional and
presentation currency. Ms Annie Stapelberg, Texton’s acting Chief
Financial Officer, was responsible for the preparation of these
condensed consolidated preliminary financial statements. The
auditor's report does not necessarily report on all of the
information contained in these 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.
Review of financial statements
The group’s auditors KPMG Inc. have reviewed these condensed
consolidated preliminary financial statements for the year ended
30 June 2015. The review was conducted in accordance with ISRE
2410: Review of interim financial information performed by the
independent auditor of the entity. A copy of their unmodified review
report dated 26 August 2015 is available for inspection at the
company’s registered office.
Business combinations
During the year the Group acquired 23 properties comprising 18
South African properties and 5 properties in the United Kingdom.
These were as follows:
Investment
Property
Transfer acquired GLA
date R’000 (m2)
1 Selby, Johannesburg 24-Jul-14 52 737 10 419
2 Babcock, Bedfordview 12-Sep-14 48 326 3 865
3 Quintiles, 18-Sep-14 47 500 3 404
Bloemfontein
4 Scott Street, Waverley 18-Sep-14 107 805 4 329
5 St George’s Mall, 18-Sep-14 21 130 1 236
Cape Town
6 Edcon, Johannesburg 30-Oct-14 153 948 27 472
7 Discus House 31-Dec-14 107 454 6 019
Proprietary Limited
(100%), Kempstar Mall,
Kempton Park
8 Imperial Com Props 31-Dec-14 146 280 13 086
Proprietary Limited
(100%), Woodmead
Commercial
Park
9 - 11 Investage 183 31-Dec-14 198 831 46 585
Proprietary Limited
(100%), Bompas Road,
Dunkeld West;
Blue Strata,
Wierda Valley;
Kuper Legh Industrial
Park, Hermanstad
12 - 17 Sable Place 31-Dec-14 40 968 12 909
Properties 121
Proprietary
Limited (100%),
(6 mini
industrial units)
18 Gladstone 27-Feb-15 223 872 5 090
Investments Holdings
Limited (100%),
Stanford House
19 Heddon Investment 27-Feb-15 29 160 3 826
Holdings Limited
(100%), Booker
Warehouse,
Burton-upon-Trent
20 Zeya Investment 27-May-15 57 355 1 783
Holdings Limited
(100%),Parc Pensarn,
Units in Carmarthen
Wales
21 Chobe Investment 27-May-15 349 933 9 323
Holdings Limited
(100%), Tesco
Building, Newcastle
upon Tyne
22 Chevelon Investment 27-May-15 129 511 2 601
Holdings Limited
(100%), Bonmarche
and Poundland Units
23 5 Liebenberg 10-Jun-15 51 137 16 557
Street, Alrode
1 765 947 168 504
Acquisition
yield Escalation
(%) (%)
1 Selby, Johannesburg 9,0% 8,0%
2 Babcock, Bedfordview 9,4% 9,0%
3 Quintiles, Bloemfontein 9,6% 8,0%
4 Scott Street, Waverley 9,5% 8,0%
5 St George’s Mall, 10,5% 8,0%
Cape Town
6 Edcon, Johannesburg 9,9% 7,5%
7 Discus House Proprietary
Limited (100%), Kempstar Mall, 9,4% 8,2%
Kempton Park
8 Imperial Com Props Proprietary 9,9% 7,9%
Limited (100%), Woodmead
Commercial Park
9 - 11 Investage 183 Proprietary 9,3% 6,5%
Limited (100%), Bompas Road,
Dunkeld West; Blue Strata,
Wierda Valley; Kuper Legh
Industrial Park, Hermanstad
12 - 17 Sable Place Properties 121 11,8% 9,0%
Proprietary Limited (100%),
(6 mini industrial units)
18 Gladstone, Investment 6,8% RPI linked
Holdings Limited (100%), (5 years),
Stanford House upward only
19 Heddon Investment Holdings 7,5% Upward only,
Limited (100%), Brooker Warehouse, higher of
Burton-upon-Trent market rent
or current
rent
20 Zeya Investment Holdings Limited 6,3% Upward only
(100%), Parc Pensarn, Units in varied per
Carmarthen Wales tenant
21 Chobe Investment Holdings 7,7% Upward only,
Limited (100%), Tesco Building, lower of
Newcastle upon Tyne market
rent and
principal
rent
22 Chevelon Investment Holdings 7,8% Upward only,
Limited (100%), Bonmarche and open market
Poundland Units value (5
years)
23 5 Liebenberg Street, Alrode 10,2% 8,30%
Reviewed Audited
2015 2014
South United South
Africa Kingdom Total Africa
R’000 R’000 R’000 R’000
Net assets acquired
Investment property 976 117 789 830 1 765 947 544 425
Cash and cash
equivalents 6 156 7 527 13 683 323
Restricted cash - 122 330 122 330 -
Trade and other
receivables 8 390 36 403 44 793 105
Income tax receivable 4 456 460 365
VAT receivable - 167 167 -
Other financial
liabilities (214 303) (452 192) (666 495) (117 383)
Shareholder’s loans (19 312) (133 174) (152 486) (69 000)
Income tax payable (919) (919) -
Lease liability (46 400) - (46 400) -
Income received
in advance - (122 330) (122 330) -
Trade and other
payables (8 939) (6 169) (15 108) (1 610)
Net assets acquired 701 713 241 929 943 642 357 225
Goodwill 77 018 77 018 247
Gain on bargain price (14 071) - (14 071) -
Cash received on
adjustment accounts 2 278 - 2 278 -
Loans accounts
acquired 19 312 - 19 312 -
Shares issues (464 450) - (464 450) -
Net cash paid 244 782 318 947 563 729 357 472
Unrestricted
cash acquired (6 156) (7 526) (13 682) (323)
Net cash outflow 238 626 311 421 550 047 357 149
Total Total
South United
Africa Kingdom Total
R’000 R’000 R’000
Revenue since acquisition 107 967 8 431 116 398
Revenue for the full year 185 386 57 807 243 193
Profit since acquisition 113 890 52 113 942
Revenue for full year 185 386 57 807 243 193
Full year profits* 286 773 17 830 304 603
*Full year profits include property revaluations.
Qualifying acquisition costs are capitalised. Other acquisition
costs have been accounted for in profit and loss.
Goodwill was paid on the United Kingdom assets as a result of
the opportunity to acquire a portfolio of properties in an
off-market share transaction.
The gain on bargain purchase price arose as the effective date
of these transactions for accounting purposes were different to
the legal effective dates. It has been recognised in "other income"
in profit and loss.
All contractual trade and other receivables acquired are
considered recoverable.
Operating segments
The group has eight reportable segments based on the geographic
split which are the group’s strategic business segments. For each
strategic business segment, the group’s CEO (who is considered
the Chief Operating Decision Maker) reviews internal
management reports on at least a monthly basis. Segments are
located in South Africa and the United Kingdom. There are no
single major customers.
The following summary describes the operations in each of the
group’s reportable segments:
2015
GAUTENG
Commercial Retail Industrial Total
R’000 R’000 R’000 R’000
Extracts from the
statement of
comprehensive income
Investment
property income 243 556 26 855 21 835 292 246
Property expenses (77 755) (10 260) (10 167) (98 182)
Segment result 165 801 16 595 11 668 194 064
Extracts from the
statement of
financial position
Investment property
Opening balance 1 579 102 20 255 1 599 357
Additions through
business
combinations 373 172 207 250 280 665 861 087
Lease liability
in business
combination 46 400 46 400
Disposals
Other additions 7 079 21 7 100
Straight-line
rental adjustment 11 275 (1 602) 1 243 10 916
Cumulative fair
value adjustments 52 988 12 807 5 193 70 988
Foreign currency
translation
difference
Closing balance 2 023 616 285 131 287 101 2 595 848
WESTERN CAPE
Commercial Retail Industrial Total
R’000 R’000 R’000 R’000
Extracts from the
statement of
comprehensive income
Investment
property income 66 725 1 073 2 915 70 713
Property expenses (19 489) (638) (575) (20 702)
Segment result 47 236 435 2 340 50 011
Extracts from the
statement of
financial position
Investment property
Opening balance 399 743 5 126 404 869
Additions through
business
combinations 21 130 21 130
Lease liability
in business
combination
Disposals
Other additions 35 35
Straight-line
rental adjustment 78 (21) 57
Cumulative fair
value adjustments 76 383 290 76 673
Foreign currency
translation
difference
Closing balance 497 334 5 430 502 764
NORTH WEST
Commercial Retail Industrial Total
R’000 R’000 R’000 R’000
Extracts from the
statement of
comprehensive income
Investment
property income 8 910 8 910
Property expenses (1 971) (1 971)
Segment result 6 939 6 939
Extracts from the
statement of
financial position
Investment
property
Opening balance 62 409 62 409
Additions through
business combinations
Lease liability in
business combination
Disposals
Other additions
Straight-line
rental adjustment (495) (495)
Cumulative fair
value adjustments 1 984 1 984
Foreign currency
translation difference
Closing balance 63 898 63 898
EASTERN CAPE
Commercial Retail Industrial Total
R’000 R’000 R’000 R’000
Extracts from the
statement of
comprehensive income
Investment
property income 6 152 4 800 10 952
Property expenses (2 127) (1 157) (3 284)
Segment result 4 025 3 643 7 668
Extracts from the
statement of
financial position
Investment
property
Opening balance 54 955 41 311 96 266
Additions through
business combinations
Lease liability in
business combination
Disposals (41 300) (41 300)
Other additions 6 6
Straight-line
rental adjustment 374 (1 848) (1 474)
Cumulative fair
value adjustments (2 874) 7 644 4 770
Foreign currency
translation difference
Closing balance 52 455 5 813 58 268
KWAZULU-NATAL
Commercial Retail Industrial Total
R’000 R’000 R’000 R’000
Extracts from the
statement of
comprehensive income
Investment
property income 4 016 330 4 346
Property expenses (1 100) (90) (1 190)
Segment result 2 916 240 3 156
Extracts from the
statement of
financial position
Investment
property
Opening balance 27 295 2 331 29 626
Additions through
business combinations
Lease liability in
business combination
Disposals
Other additions 35 8 43
Straight-line
rental adjustment 61 4 65
Cumulative fair
value adjustments 4 403 340 4 743
Foreign currency
translation difference
Closing balance 31 794 2 683 34 477
NORTHERN CAPE
Commercial Retail Industrial Total
R’000 R’000 R’000 R’000
Extracts from the
statement of
comprehensive income
Investment
property income 1 267 1 267
Property expenses (226) (226)
Segment result 1 041 1 041
Extracts from the
statement of
financial position
Investment
property
Opening balance 9 998 9 998
Additions through
business combinations
Lease liability in
business combination
Disposals
Other additions
Straight-line
rental adjustment (71) (71)
Cumulative fair
value adjustments 1 822 1 822
Foreign currency
translation difference
Closing balance 11 749 11 749
FREE STATE
Commercial Retail Industrial Total
R’000 R’000 R’000 R’000
Extracts from the
statement of
comprehensive income
Investment
property income 4 316 4 316
Property expenses (882) (882)
Segment result 3 434 3 434
Extracts from the
statement of
financial position
Investment property
Opening balance
Additions through
business
combinations 47 500 47 500
Lease liability in
business combination
Disposals
Other additions
Straight-line
rental adjustment 592 592
Cumulative fair
value adjustments 4 768 4 768
Foreign currency
translation difference
Closing balance 52 860 52 860
UNITED KINGDOM AND WALES
Commercial Retail Industrial Total
R’000 R’000 R’000 R’000
Extracts from the
statement of
comprehensive income
Investment
property income 6 928 808 695 8 431
Property expenses (640) (125) (67) (832)
Segment result 6 288 683 628 7 599
Extracts from the
statement of
financial position
Investment property
Opening balance
Additions through
business
combinations 573 805 186 865 29 160 789 830
Lease liability in
business combination
Disposals
Other additions
Straight-line
rental adjustment
Cumulative fair
value adjustments
Foreign currency
translation 28 317 6 232 2 142 36 691
difference
Closing balance 573 805 186 865 29 160 789 830
TOTAL
Commercial Retail Industrial Total
R’000 R’000 R’000 R’000
Extracts from the
statement of
comprehensive income
Investment
property income 341 870 33 866 25 445 401 181
Property expenses (104 190) (12 270) (10 809) (127 269)
Segment result 237 680 21 596 14 636 273 912
Extracts from the
statement of
financial position
Investment property
Opening balance 2 133 502 69 023 2 202 525
Additions through
business
combinations 1 015 607 394 115 309 825 1 719 547
Lease liability
in business
combination 46 400 46 400
Disposals (41 300) (41 300)
Other additions 7 114 70 7 184
Straight-line
rental adjustment 11 814 (3 467) 1 243 9 590
Cumulative fair
value adjustments 139 474 21 081 5 193 165 748
Foreign currency
translation
difference 28 317 6 232 2 142 36 691
Closing balance 3 335 828 492 154 318 403 4 146 385
2014
GAUTENG
Commercial Retail Industrial Total
R’000 R’000 R’000 R’000
Extracts from the
statement of
comprehensive income
Investment
property income 178 389 4 285 - 182 674
Property expenses (62 118) (2 374) - (64 492)
Segment result 116 271 1 911 - 118 182
Extracts from
the statement of
financial position
Investment property
Opening balance 954 374 19 517 - 973 891
Additions through
business
combinations 544 425 - - 544 425
Other additions 1 736 30 - 1 736
Straight-line
rental adjustment (2 090) 152 - (1 938)
Cumulative fair
value adjustments 80 657 556 - 81 213
Investment property
reclassified as
held-for sale - - - -
Closing balance 1 579 102 20 255 - 1 599 357
WESTERN CAPE
Commercial Retail Industrial Total
R’000 R’000 R’000 R’000
Extracts from the
statement of
comprehensive income
Investment
property income 59 751 1 022 3 118 63 891
Property expenses (18 159) (630) (915) (19 704)
Segment result 41 592 392 2 203 44 187
Extracts from the
statement of
financial position
Investment property
Opening balance 373 746 5 429 23 400 402 575
Additions through
business
combinations - - - -
Other additions 24 - 6 30
Straight-line
rental adjustment 3 378 (4) 62 3 436
Cumulative fair
value adjustments 22 595 (299) 532 22 828
Investment property
reclassified as
held-for sale - - (24 000) (24 000)
Closing balance 399 743 5 126 - 404 869
NORTH WEST
Commercial Retail Industrial Total
R’000 R’000 R’000 R’000
Extracts from
the statement of
comprehensive income
Investment
property income 8 034 - - 8 034
Property expenses (1 534) - - (1 534)
Segment result 6 500 - - 6 500
Extracts from the
statement of
financial position
Investment property
Opening balance 59 719 - - 59 719
Other additions - - - -
Straight-line
rental adjustment 88 - - 88
Cumulative fair
value adjustments 2 602 - - 2 602
Closing balance 62 409 - - 62 409
EASTERN CAPE
Commercial Retail Industrial Total
R’000 R’000 R’000 R’000
Extracts from
the statement of
comprehensive income
Investment
property income 7 670 4 460 - 12 130
Property expenses (1 918) (985) - (2 903)
Segment result 5 752 3 475 - 9 227
Extracts from the
statement of
financial position
Investment property
Opening balance 55 000 37 499 - 92 499
Other additions - 6 - 6
Straight-line
rental adjustment (133) 485 - 352
Cumulative fair
value adjustments 88 3 321 - 3 409
Closing balance 54 955 41 311 - 96 266
KWAZULU-NATAL
Commercial Retail Industrial Total
R’000 R’000 R’000 R’000
Extracts from the
statement of
comprehensive income
Investment 3 553 305 - 3 858
property income
Property expenses (661) (76) - (737)
Segment result 2 892 229 - 3 121
Extracts from
the statement of
financial position
Investment property
Opening balance 26 973 2 264 - 29 237
Other additions 49 - - 49
Straight-line
rental adjustment (93) (14) - (107)
Cumulative fair
value adjustments 366 81 - 447
Closing balance 27 295 2 331 - 29 626
NORTHERN CAPE
Commercial Retail Industrial Total
R’000 R’000 R’000 R’000
Extracts from
the statement of
comprehensive income
Investment
property income 1 172 - - 1 172
Property expenses (201) - - (201)
Segment result 971 - - 971
Extracts from
the statement
of financial position
Investment property
Opening balance 9 746 - - 9 746
Other additions - - - -
Straight-line
rental adjustment 8 - - 8
Cumulative fair
value adjustments 244 - - 244
Closing balance 9 998 - - 9 998
TOTAL
Commercial Retail Industrial Total
R’000 R’000 R’000 R’000
Extracts from
the statement of
comprehensive income
Investment
property income 258 569 10 072 3 118 271 759
Property expenses (84 591) (4 065) (915) (89 571)
Segment result 173 978 6 007 2 203 182 188
Extracts from
the statement of
financial position
Investment property
Opening balance 1 479 558 64 709 23 400 1 567 667
Additions through
business
combinations 544 425 - - 544 425
Other additions 1 809 36 6 1 851
Straight-line
rental adjustment 1 158 619 62 1 839
Cumulative fair
value adjustments 106 552 3 659 532 110 743
Investment
Property
classified as held
for sale - - (24 000) (24 000)
Closing balance 2 133 502 69 023 - 2 202 525
Reconciliation from segment result to profit for the year
Total Total
2015 2014
R’000 R’000
Segment results 273 912 182 188
Straight-line rental adjustment 9 590 1 839
Other income 22 804 5 444
Other operating expenses (18 630) (4 689)
Asset management fees (14 834) (9 588)
Finance income 585 8 299
Finance cost (77 588) (41 421)
Fair value adjustment 164 242 114 827
Capital items (114) (9)
Debenture interest - (64 022)
Amortisation of debenture interest - 2 159
Income tax (8 063) (370)
Profit for the year 351 904 194 657
Segmental analysis
Geographical profile
GLA GLA GLA GLA
m2 % m2 %
2015 2015 2014 2014
Eastern Cape
Province 4 027 1.2% 8 102 4.3%
Gauteng Province 270 800 77.6% 129 803 68.3%
KwaZulu Natal
Province 4 333 1.2% 4 333 2.3%
North West Province 5 362 1.5% 5 362 2.8%
Northern Cape
Province 1 181 0.3% 1 181 0.6%
Western Cape
Province 37 321 10.7% 41 335 21.7%
Free
State 3 404 1.0% - -
England 20 840 6.0% - -
Wales 1 783 0.5% - -
349 051 100.0% 190 116 100.0%
Sectoral profile
GLA GLA GLA GLA
m2 % m2 %
2015 2015 2014 2014
30 June 2015
Office 235 160 67.4% 176 548 92.9%
Retail 26 149 7.5% 8 317 4.3%
Industrial 87 742 25.1% 5 251 2.8%
349 051 100.0% 190 116 100.0%
Portfolio information
Tenant spread
Rentable Rentable Rentable Rentable
area area area area
m2 % m2 %
30 June 30 June 30 June 30 June
2015 2015 2014 2014
(A) National 23 951 6.9% 23 572 12.4%
(B) Government 66 009 18.9% 65 790 34.6%
(C) Listed/Large
entities 150 220 43.0% 47 152 24.8%
(D) Other 81 255 23.3% 43 592 22.9%
(E) Vacant 27 616 7.9% 10 010 5.3%
349 051 1 00.0% 190 116 100.0%
Vacancy profile
Rentable Rentable Rentable Rentable
area area area area
m2 % m2 %
30 June 30 June 30 June 30 June
2015 2015 2014 2014
Retail 903 3.3% 230 2.3%
Industrial 5 456 19.7% - -
Office 21 257 77.0% 97.80 97.7%
27 616 100.0% 10 010 100.0%
Lease expiry profile per annum
Vacant 2016 2017 2018 >2019
30 June 2015
Rentable
area % 7.9% 23.8% 14.7% 21.0% 29.3%
30 June 2014
Rentable
area % 5.3% 22.6% 15.3% 28.8% 32.1%
Stated capital
There are 276 066 766 ordinary shares of no par value in issue (2014:
169 122 019). The group accounts for 8 643 042 shares which were
issued to the staff incentive scheme trust as treasury shares
(8 911 917 treasury shares were held in 2014 which were allotted
as part of the purchase price of Scott Street, Waverley). The
company’s share structure is in line with international best practice
for REITs.
Currency
The closing exchange rate at 30 June 2015 was R19.12:1GBP and the
average exchange rate for the year ended 30 June 2015 was
R17.99:1GBP.
Borrowings
At 30 June 2015 the Fund had a loan to value ratio of 38.78%
(2014: 31.3%). The calculation of loan to value was based on
borrowings included in other financial liabilities (excluding
the fair value of the interest rate swaps) of R1 617 million
(2014: R695.9 million) and the value of investment property of
R4 170.4 million (2014: R2 226.6 million). The Fund remains
capitalised to take advantage of yield-enhancing acquisitions.
The fund has an average cost of debt of 7.847% on its South
African debt and 3.497% on its United Kingdom debt.
Summary of gross borrowings
30 June 30 June
2015 2014
R’000 R’000
Carried at amortised cost
Standard Bank 540 548 695 878
Investec Private Bank 523 225 -
Nedbank Limited 102 943 -
Santander 404 240 –
Finance lease 46 400 -
Carried at fair value through
profit or loss 1 617 356 695 878
Standard Bank 2 970 1 465
1 620 326 697 343
Fair values
30 June 30 June 30 June 30 June
2015 2015 2014 2014
Carrying Fair Carrying Fair
amount value amount value
R’000 R’000 R’000 R’000
Group
Financial assets
Other non-current
assets 1 984 1 984 3 059 3 059
Trade and other
receivables 96 352 96 352 23 026 23 026
Cash and cash
equivalents 346 795 346 795 64 449 64 449
Financial
liabilities 445 131 445 131 90 534 90 534
Amortised cost (1 839 390) (1 839 390) (736 835) (736 835)
Fair value through
profit or loss (2 970) (2 970) (1 465) (1 465)
(1 842 360) (1 842 360) (738 200) (738 200)
The fair value of trade receivables approximates its carrying amount
as it is short term in nature. The fair values of all financial
instruments with the exception of fixed rate financial liabilities
are substantially the same as the carrying amounts reflected on the
statement of financial position.
Fair value hierarchy
The group measures fair values using the following hierarchy that
reflects the significance of the inputs used in making the
measurements:
• Level 1: Quoted prices (unadjusted) in an active market for an
identical instrument.
• Level 2: Valuation techniques based on observable inputs, either
directly (i.e.: as prices) or indirectly (i.e.: derived from prices).
This category includes instruments valued using: quoted market prices
in active markets for similar instruments; quoted prices for
identical or similar instruments in markets that are considered less
than active; or other valuation techniques where all significant
inputs are directly or indirectly observable from market data.
• Level 3: Valuation techniques using significant unobservable
inputs. This category includes all instruments where the valuation
technique includes inputs not based on observable data and the
unobservable inputs have a significant effect on the instrument’s
valuation.
This category also includes instruments that are valued based on
quoted prices for similar instruments where significant unobservable
adjustments or assumptions are required to reflect differences
between the instruments.
Fair values of financial assets and financial liabilities that are
traded in active markets are based on quoted market prices or dealer
price quotations. For all other financial instruments the group
determines fair values using valuation techniques. Valuation
techniques include net present value and discounted cash flow models
and comparison to similar instruments for which market observable
prices exist. Assumptions and inputs used in valuation techniques
include risk-free and benchmark interest rates, credit spreads and
other premiums used in estimating discount rates, bond and equity
prices, foreign currency exchange rates, equity and equity index
prices and expected price volatilities and correlations. The
objective of valuation techniques is to arrive at a fair
value determination that reflects the price of the financial
instrument at the reporting date, which would have been determined
by market participants acting at arm’s length.
The group uses widely recognised valuation models for determining the
fair value of common and more simple financial instruments, like
interest rate swaps that use only observable market data and require
little management judgement and estimation.
Observable prices and model inputs are usually available in the
market for listed debt and equity securities, exchange traded
derivatives and simple over the counter derivatives like interest
rate swaps. Availability of observable market prices and model inputs
reduces the need for management judgement and estimation and also
reduces the uncertainty associated with determination of fair values.
Cash and cash equivalents are not fair valued and the carrying
amounts is presumed to equal fair value. Short term receivables and
short term payables are measured at amortised cost and approximate
fair value due to the short term nature of these instruments. These
instruments are not included in the fair value hierarchy.
The table below analyses financial instruments carried at fair value,
by valuation method.
Level 1 Level 2 Level 3 Total
Group R’000 R’000 R’000 R’000
30 June 2015
Financial instrument
Interest rate swap - 2 970 - 2 970
30 June 2014
Financial instrument
Interest rate swap - 1 465 - 1 465
Property and asset management
The group follows an outsourced asset management and property
management service model. It is believed that this is still the best
model as significant value is being extracted out of the management
company by the fund. Further, the structure allows the property
managers to focus more on the operational management of the
properties, while the fund managers are focused on strategic
initiatives, acquisitions and disposals involving the fund.
The fund is managed externally by Texton Property Investments
Proprietary Limited in terms of the asset management agreement
concluded between the parties. Day-to-day management and operational
functions are performed by employees of TPI. The fund has no
employees or personnel of its own. The relationship is
managed through management meetings, daily contact and service-level
agreements specifying responsibilities and committees that determine
key deliverables and performance criteria.
The property managers, JHI and Kuper Legh Property Management (KLPM),
are responsible for daily property operations such as leasing,
invoicing of tenants, debt collection, maintenance, tenant
interaction, financial administration and the management of
relationships with third-party service providers and local
government. Texton's property managers have a proven track record with
a long and successful history in managing property portfolios in the
listed property space within South Africa. With recent acquisitions
in the United Kingdom Texton appointed Argo Real Estate Limited
who also have a history of managing the properties that were acquired.
Weighted average number of shares
30 June 30 June
2015 2014
R’000 R’000
Issued at the beginning of the year 160 210 120 618
Issued during the year 115 857 48 504
Treasury shares* (8 643) (8 912)
Shares in issue at the end of the year
Weighted average number of
shares at the end of the year 267 424 160 210
200 337 157 494
* On 14 April 2015, Texton Property Share Incentive Scheme purchased
8 643 042 shares in the Fund at R11.57 per share as part of a share
incentive scheme.
Basic, diluted, headline earnings and distribution per share
30 June 30 June
2015 2014
Cents per Cents per
share share
Basic and diluted earnings per share 175.66 123.60
Comparable basic and diluted
earnings per share 175.66 162.88
Headline and diluted earnings per share 83.01 53.28
Comparable headline and diluted headline
earnings per share 83.01 92.56
Distribution per share 94.77 85.47
*Comparable basic earnings per share and comparable headline earnings
per share have been included to enable shareholders to compare the
current year figures to those previously reported where linked units
had been in issue.
Basic earnings per share
The calculation of basic earnings per share was based on the
comparable earnings attributable to shareholders of R351 904 million
(2014: R194 657 million), and a weighted average number of shares
outstanding of 200 337 241 (2014: 157 494 340).
Comparable basic earnings per share
The calculation of comparable basic earnings per share was based on
the comparable earnings attributable to shareholders of R351 904 million
(2014: R256 520 million) and weighted average number of shares
outstanding of 200 337 241 (2014: 157 494 340).
Headline earnings per share
The calculation of headline earnings per share was based on headline
earnings attributable to shareholders of R166 294 million (2014:
R83.914 million), and a weighted average number of shares outstanding
of 200 337 241 (2014: 157 494 340).
Comparable headline earnings per share
The calculation of comparable headline earnings for share was based
on the comparable headline earnings attributable to shareholders of
R166 294 million (2014: R145 777 million) and a weighted average
number of shares outstanding of 200 337 241 (2014: 157 494 340)
Diluted basic earnings and diluted headline earnings per share
There were no dilutive instruments in issue at year end.
Distribution per share
The calculation of distribution per share was based on the
distributable earnings attributable to shareholders of
R231 430 million (2014: R144 542 million), and an issued number of
shares outstanding of 276 066 766 (2014: 169 122 019). At year end the
shares reflecting as treasury shares are not cancelled as the shares
are held by the Texton Employee Share Trust. The distribution per
share unit is calculated after adjustment for the Texton Employee
Share Trust, which was consolidated, and the adjusted shares in issue
at year end being 267 423 766 (2014: 160 210 102)
30 June 30 June
2015 2014
R’000 R’000
Earnings:
Earnings attributable to shareholders: 351 904 194 657
Adjust for:
Debenture interest - 64 022
Amortisation of debenture interest - (2 159)
Comparable earnings attributable to
shareholders 351 904 256 520
Headline earnings:
Profit attributable to shareholders: 351 904 194 657
Gain on bargain purchase (14 071)
Gross revaluation of
investment property (165 748) (110 743)
Profit on sale of property (5 791)
Headline earning attributable
to shareholders 166 294 83 914
Adjust for:
Debenture interest - 64 022
Amortisation of debenture interest - (2 159)
Comparable headline earnings
attributable to shareholders 166 294 145 777
Distributable earnings:
Revenue 401 181 271 759
Property expenses (127 269) (89 571)
Other income 22 804 5 444
Other operating expenses (18 630) (4 689)
Unrealised foreign exchange loss 9 463 -
Asset management fees (14 834) (9 588)
Net finance cost (76 616) (32 901)
Finance income 585 8 299
Finance cost (77 588) (41 421)
Finance cost amortisation 387 221
Taxation (692) 462
Accrued distribution included in
share price 19 583 -
Dividends on treasury shares 8 381 3 626
Realisation of property revaluation 8 059 -
Total Distribution 231 430 144 542
Reconciliation of comparable earnings
to distributable earnings:
Comparable earnings attributable to
shareholders/linked unitholders 351 904 256 520
Straight-line rental adjustment (9 590) (1 839)
Unrealised foreign exchange loss 9 463 -
Finance cost amortisation 387 221
Fair value adjustments (164 242) (114 827)
Dividends on treasury shares 8 381 3 626
Realisation of property valuation 8 059 -
Capital items 114 9
Accrued distribution included in
share price on issue 19 583 -
Deferred tax 7 371 832
Distributable earnings 231 430 144 542
30 June 30 June
2015 2014
Distributable earnings (R’000) 231 430 144 542
Shares in issue (‘000) 276 067 169 122
Distribution per share (cents) 94.77 85.47
Distributable earnings (R’000) 231 430 144 542
Less Distribution to shareholder (93 148) (67 648)
Available for distribution
(payment 2) (R’000) 138 282 76 894
Shares in issue (‘000) 276 067 169 122
Distribution per share (cents)
Dividend per share subsequent to
year end 50.09 45.47
Distributions per share/linked unit
Distribution per linked unit - interim 40.00
Dividends per share
Interim 44.68
Final (subsequent to year end) 50.09 45.47
Total comparable distribution 94.77 85.47
Events after the reporting date
The Fund completed the sale of the Brickfield Building in July
2015 and also entered into agreements, including a joint venture
agreement, with Moorgarth Holdings (Luxembourg) S.à.r.l
(“Moorgarth”), a subsidiary of JSE-listed Tradehold Limited, whereby
Texton acquired 50% of a special purpose vehicle, Inception (Reading)
S.à.r.l (“Inception”). Inception was then used as the vehicle to
acquire a well-located retail shopping centre (“Broad Street Mall”)
in Reading, England (the “Property”), with Texton’s 50% contribution
for the total purchase price. The acquisition of Broad Street Mall
Property was successfully concluded on 3 July 2015. The details of
the acquisition and disposal are as follows:
Details: Broad Street Mall Brickfield Building
Description of Broad Street Mall, Erf 13753, Salt River
property: Reading, registered 5-9 Brickfield Road,
at the Land Registry Salt River, gross
with freehold under lettable area 5 251m2
title numbers
BK383592 and BK383593
Retail shopping centre
including an office
space in 2 office
buildings and a car
park with over
740 spaces
Purchase/
(Disposal)
price: R570 935 520 (R28 000 000)
Rights offer
Texton embarked on a process to place 100 000 000 authorised but
unissued shares under the control of Directors with the intention of
decreasing its loan to value ratio and provide the opportunity to
pursue investment opportunities in line with its growth strategy.
The rationale for the placing of 100 000 000 authorised but unissued
Texton shares under the control of Directors is to give the Directors
the ability to, if appropriate, access the equity capital markets by
issuing new Texton shares either via a vendor placement or a rights
offer to raise new equity capital:
Shareholder diary
Financial year end 30 June 2015
Publication of financial results 27 August 2015
Integrated annual report posted to shareholder 7 September 2015
Annual general meeting 5 October 2015
Cash dividend
Notice is hereby given of the declaration of the final dividend
number 8 of 50.09 cents per share for the final six month period to
30 June 2015 bringing the total dividend for the year ended 30
June 2015 to 94.77 cents per share (2014: 85.47). The dividend has
been declared from income reserves.
Texton’s Income Tax Reference Number: 9353785158.
Issued shares as at 26 August 2015: 276 066 766.
Salient dates
Dividend declaration date 27 August 2015
Last date to trade in order to participate
in cash dividend 9 October 2015
Shares trade ex dividend 12 October 2015
Record date 16 October 2015
Payment date 19 October 2015
Share certificates may not be dematerialised or rematerialized
between 12 October 2015 and 16 October 2015, both dates inclusive.
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. It should
be noted that up to 31 December 2013, dividends received by
non-residents from a REIT were not subject to Dividend Tax. With
effect from 1 January 2014, any dividend received by a non- resident
from a REIT will be 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
withholding tax will be withheld at a rate of 15%, the net amount
due to non-resident shareholders will be 42.5765 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.
Prospects
2015 has been a year of change for the fund, most of which is
considered to be positive and favourable regarding the longer-term
prospects of the company. Management is confident that the year ahead
will be a year of consolidation, improved operational efficiencies,
diversification and overall improvement for the fund. Management is
committed to performing in line with the sector. The prospects have
not been reviewed by the auditors.
By order of the Board
Board of Directors
1. Pragalathan Dhanapalan (Dempsey) Naidoo (Chairman)
2. Portia Morwesi Tau-Sekati (Lead Independent)
3. Angelique Norma Du Hecquet de Rauville (Chief Executive
Officer)
4. John Alastair (Chick) Legh
5. John Russell Macey
6. Kyansambo Ntombi Vundla
7. Nosiphiwo Vuyolwethu Balfour
8. Thanduxolo Selby Sishuba
9. Mathys Johannes Van Heerden
10. Romeo Bob Makhubela
The following changes were made to the board and its sub committees:
RF Kane (CEO) and M De Lange (Financial Director) resigned on
31 July 2015. LB Kan was appointed on 5 June 2015 and resigned on
14 July 2015. PM Tau-Sekati was appointed as lead independent and
resigned as chairperson, but remains a member of the social and ethics
committee. TS Sishuba was appointed to the investment, and audit
and risk committees. NV Balfour was appointed to the remuneration
and nominations committee. AN Du Hecquet de Rauville, formerly a
non-executive Director of the Fund was appointed chief executive
officer with effect 5 June 2015. RB Makhubela was appointed to the
Board on 31 March 2015, is chairperson of the social and ethics
committee and a member of the investment committee.
Corporate information
Company registration number: 2005/019302/06
Company secretary - CIS Company Secretaries Proprietary Limited
(Neville Toerien)
Sponsor - Investec Bank Limited
Transfer secretary - Computershare Investor Services Proprietary
Limited, 70 Marshall Street, Johannesburg, 2001
Physical/Registered and postal address
Physical and registered address:
54 Bompas Road
Dunkeld West
2196
Postal address: PO Box 41394
Craighall Park
2024
www.texton.co.za
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