Wrap Text
Condensed consolidated reviewed interim financial results for the six months ended 30 September 2015
Safari Investments RSA Limited
(Incorporated in the Republic of South Africa)
(Registration number 2000/015002/06
Approved as a REIT by the JSE Limited
Share code: SAR
ISIN: ZAE000188280
(“Safari” or “the Company”)
Condensed consolidated reviewed interim financial results
for the six months ended 30 September 2015
www.safari-investments.com
Income-generating retail portfolio
for the six months ended 30 September 2015
Geographic Denlyn Atlyn Maunde
Mamelodi Atteridgeville Atteridgeville
Gauteng Gauteng Gauteng
Trading since 2003 2006 August 2015
Gross lettable area 42 200m2 41 200m2 10 550m2
Rental income (for
the six months ended
30 September 2015) R27 079 214 R20 502 597 R1 725 098
Occupation levels 99% 99% 84%
National tenants 91% 92% 70%
Number of shops 102 88 27
Trading density/m2
per annum as at
September 2015* R38 719/m2 R27 055/m2 n/a – opened
in August 2015
Geographic Thabong The Victorian
Sebokeng Heidelberg
Gauteng Gauteng
Trading since 2007 1997
Gross lettable area 41 150m2 15 400m2
Rental income (for
the six months ended
30 September 2015) R19 634 868 R8 023 630
Occupation levels 97% 98%
National tenants 85% 93%
Number of shops 90 34
Trading density/m2
per annum as at
September 2015* R21 648/m2 R35 926/m2
*This excludes furniture and financial services.
National average trading density: R27 500/m2 (Atlyn, Denlyn and
Thabong) and R32 785/m2 (Victorian).
(Source: IPD – Q2 2015) – not applicable to Maunde.
Condensed consolidated statement of financial position
as at 30 September 2015
Reviewed Reviewed Audited
30 September 30 September 31 March
2015 2014 2015
Notes R R R
Assets
Non-current assets
Investment property 1 1 914 492 752 1 456 714 073 1 706 427 026
Fair value of
investment property 1 946 815 638 1 489 245 350 1 737 745 309
Operating lease
asset (32 322 886) (32 531 277) (31 318 283)
Intangible assets 19 892 64 538 25 575
Operating lease
asset 2 28 644 833 26 636 969 26 475 073
1 943 157 477 1 483 415 580 1 732 927 674
Current assets
Inventories 3 50 154 242 23 562 060 36 632 037
Trade and other
receivables 5 18 724 472 4 588 764 8 691 904
Operating lease
asset 2 3 678 053 5 894 308 4 843 210
Current tax
receivable 1 638 130 384 966 5 933 521
Cash and cash
equivalents 2 932 977 10 806 954 8 768 143
77 127 874 45 237 052 64 868 815
Total assets 2 020 285 351 1 528 652 632 1 797 796 489
Equity and
liabilities
Equity
Stated capital 4 1 047 894 552 1 013 447 548 1 031 570 468
Retained income 467 507 652 375 636 519 477 850 234
1 515 402 204 1 389 084 067 1 509 420 702
Liabilities
Non-current
liabilities
Interest-bearing
borrowings 6 390 738 415 54 159 632 197 319 609
Deferred tax 15 260 377 16 306 372 16 678 024
405 998 792 70 466 004 213 997 633
Current
liabilities
Trade and other
payables 5 14 408 735 7 266 513 8 305 007
Interest-bearing 6 84 475 620 61 836 048 66 073 147
borrowings
98 884 355 69 102 561 74 378 154
Total liabilities 504 883 147 139 568 565 288 375 787
Total equity and
liabilities 2 020 285 351 1 528 652 632 1 797 796 489
Condensed consolidated statement of comprehensive income for the six
months ended 30 September 2015
Reviewed Reviewed
Interim Interim Audited
30 September 30 September 31 March
2015 2014 2015
Notes R R R
Revenue 80 906 368 70 465 381 140 433 022
Property revenue 7 79 901 765 69 217 583 140 398 218
Operating lease 2 1 004 603 1 247 798 34 804
Other income 623 529 3 157 325 2 663 181
Operating expenses 8 (21 707 847) (18 559 077) (38 156 921)
Operating profit 59 822 050 55 063 629 104 939 282
Investment revenue 409 887 416 454 600 382
Fair value
adjustments 1 – – 114 589 608
Finance costs 6 (13 416 136) (2 227 183) (9 417 667)
Profit before
taxation 46 815 801 53 252 900 210 711 605
Taxation 9 1 417 648 (6 439 716) (3 884 706)
Profit for the
period 48 233 449 46 813 184 206 826 899
Other
comprehensive
income – – –
Total
comprehensive
income for the
period attributable
to equity holders 48 233 449 46 813 184 206 826 899
Earnings and
diluted earnings
per share (cents) 28 28 122
Explanatory notes to the condensed consolidated statement of financial
position and condensed consolidated statement of comprehensive income
for the six months ended 30 September 2015
1. It is the Group's policy to have the entire investment property
portfolio valued on an annual basis by an independent valuator. The
previous valuation was done on 31 March 2015 and the next valuation
will be done on 31 March 2016. The balance for the interim financial
periods is the fair value as at the previous financial year end (i.e.
31 March) including the incurred cost of new properties acquired and
capitalised cost of development projects for that period.
The value of the investment property increased from 31 March 2015 by
11%, due to cost capitalised in the construction of the Maunde Shopping
Centre, Platz Am Meer Waterfront Centre, Thabong Shopping Centre,
Soweto Private Day-Hospital and the acquisition of the Lynnwood
properties. The construction costs are financed by the ABSA facility
(interest-bearing borrowings).
2. Most of Safari's current lease agreements are in the second half of
the signed lease period. Sufficient new lease agreements and renewals
are in place; escalations of 8% have been achieved for new leases
negotiated.
3. On 20 May 2015 the board passed a resolution to increase the size
of the retail area of the Platz Am Meer development from 16 885m2 to
22 405m2 which resulted in the ratio between the residential unit and
the retail area on the property to change from 30% to 24% of the total
development under construction on Erf 71, Swakopmund, Erongo Region,
Registration division G, measuring 8 712m2. The residential units will
be available for sale in the ordinary course of business.
4. Safari raised in total R16,1 million (1 979 547 ordinary Safari
shares) through the dividend reinvestment process during June 2015.
Shareholders had the option to reinvest their distribution in ordinary
shares at a price of R8,29 per share. The capital raised through the
dividend reinvestment process was utilised to settle part of the
facility used to finance the construction of current projects.
In the 2016 financial year Safari will distribute a minimum of 75% of
its profits to the shareholders as per the REIT requirements, and the
shareholders will be liable for the tax on the profit distributed.
5. Trade and other receivables fluctuated between the comparative
periods, due to the value added tax (VAT) receivable from the
South African/Namibia Revenue Services for the financial period under
review. The VAT receivable is due to the current construction projects
at the various properties.
Trade and other payables consists of deposits (tenants) held at current
retail centres, income received in advance and accrued expenses.
6. The bulk of current and non-current liabilities were directly
related to the facility being utilised to finance the project
development of Maunde Shopping Centre, Thabong Shopping Centre
(Phases 3 and 3.1) and Platz Am Meer Waterfront Centre.
7. The interim property revenue increased by 15% compared with the
previous interim results. The additional increase over and above the
annual escalation is due to the opening of the Atlyn South Block
(Atlyn Shopping Centre) and the Thabong Shopping Centre extensions.
Construction on Maunde Shopping Centre was finalised and it commenced
trading in August 2015.
8. The operating expenses increased by 16% compared with the previous
interim results, due to the additional areas coming into operation
(Atlyn South Block of 1 379m2, Thabong extensions of 13 500m2).
9. The movement in the tax balance is due to deferred tax on income
received in advance, lease straightlining and wear and tear
allowances claimed in terms of Section 11 E of the Income Tax Act
58 of 1962.
Condensed consolidated statement of cash flows
for the six months ended 30 September 2015
Reviewed Reviewed
Interim Interim Audited
30 September 30 September 31 March
2015 2014 2015
Notes R R R
Net cash (used in)
/generated from
operating
activities
Cash generated from
operations 41 372 086 44 714 333 79 707 319
Interest income 409 887 416 454 600 382
REIT distribution
paid 4 (42 165 806) (34 000 000) (73 540 758)
Finance costs 6 (13 416 136) (2 227 183) (9 417 667)
Tax received/(paid) 4 295 391 (327 722) (2 949 614)
Net cash (used
in)/generated from
operating
activities (9 504 578) 8 575 882 (5 600 338)
Net cash used in
investing
activities
Purchase and
development of
investment property 1, 6 (208 065 726) (108 844 938) (243 968 283)
Net cash used in
investing
activities (208 065 726) (108 844 938) (243 968 283)
Cash flows (used in)
/generated from
financing
activities
(Capital raising
fee)/proceeds on
share 4 (86 141) 264 929 418 264 793 096
issue
Repayment of
interest-bearing
borrowings 6 (91 228 721) (436 444 838) (989 756 151)
Proceeds from
interest-bearing
borrowings 6 303 050 000 171 370 000 872 078 389
Repayment of other
financial
liabilities – (10 041 621) (10 041 621)
Repayment of
shareholders' loan – (4 439 687) (4 439 687)
Net cash generated
from/(used in)
financing
activities 211 735 138 (14 626 728) 132 634 026
Total cash movement
for the period (5 835 166) (114 895 784) (116 934 595)
Cash at the
beginning of the
period 8 768 143 125 702 738 125 702 738
Total cash at the
end of the period 2 932 977 10 806 954 8 768 143
Condensed consolidated statement of changes in equity
for the six months ended 30 September 2015
Share capital/ Share Total share
stated capital premium capital
R R R
Balance at 1 April 2014 644 152 383 – 644 152 383
Profit for the period – – –
Other comprehensive
income – – –
Total comprehensive
income for the period – – –
Capital raising through
JSE listing 374 562 748 – 374 562 748
Capital raising fee on
shares paid for (1 478 927) – (1 478 927)
in the prior year and
issued in the current
year
Capital raising fee on
shares paid for (3 924 978) – (3 924 978)
and issued in the
current year
Shares issued through
capitalisation dividend 18 259 242 – 18 259 242
REIT distribution – – –
Total contributions by
and distributions to
owners of Company
recognised directly in
equity 387 418 085 – 387 418 085
Balance at 1 April 2015
(Audited) 1 031 570 468 – 1 031 570 468
Profit for the period – – –
Other comprehensive
income – – –
Total comprehensive
income for the period – – –
Capital raising fee on
shares paid for (86 141) – (86 141)
and issued in the
current period
Shares issued through
capitalisation dividend 16 410 225 – 16 410 225
REIT distribution – – –
Total contributions by
and distributions to
owners of Company
recognised directly in
equity 16 324 084 – 16 324 084
Balance at
30 September 2015
(Reviewed) 1 047 894 552 – 1 047 894 552
Note 4
Shares paid
Retained for and Total
income issuable equity
R R R
Balance at 1 April 2014 362 823 335 104 365 747 1 111 341 465
Profit for the period 206 826 899 – 206 826 899
Other comprehensive
income – – –
Total comprehensive
income for the period 206 826 899 – 206 826 899
Capital raising through
JSE listing – (104 365 747) 270 197 001
Capital raising fee on
shares paid for – – (1 478 927)
in the prior year and
issued in the current
year
Capital raising fee on
shares paid for – – (3 924 978)
and issued in the current
year
Shares issued through
capitalisation dividend – – 18 259 242
REIT distribution (91 800 000) – (91 800 000)
Total contributions by
and distributions to
owners of Company
recognised directly in
equity (91 800 000) (104 365 747) 191 252 338
Balance at 1 April 2015
(Audited) 477 850 234 – 1 509 420 702
Profit for the period 48 233 449 – 48 233 449
Other comprehensive
income – – –
Total comprehensive
income for the period 48 233 449 – 48 233 449
Capital raising fee on
shares paid for – – (86 141)
and issued in the current
period
Shares issued through
capitalisation dividend – – 16 410 225
REIT distribution (58 576 031) – (58 576 031)
Total contributions by
and distributions to
owners of Company
recognised directly in
equity (58 576 031) – (42 251 947)
Balance at
30 September 2015
(Reviewed) 467 507 652 – 1 515 402 204
Segmental report
for the six months ended 30 September 2015
Atteridgeville Mamelodi Sebokeng
R R R
30 September 2015
(Reviewed)
Turnover (external) 20 938 246 26 973 355 23 328 491
Reportable segment
profit before
investment revenue,
fair value
adjustments and
finance costs 17 017 035 22 217 176 16 746 138
Unallocated reportable
segment profit before
investment revenue,
fair value adjustments
and finance costs – – –
Profit before
investment revenue,
fair value adjustments
and finance costs
Segment assets and
liabilities
Segment assets 439 639 108 530 422 872 415 052 449
Unallocated assets – – –
Total assets 439 639 108 530 422 872 415 052 449
Segment liabilities 2 444 542 4 310 667 3 457 014
Unallocated
liabilities – – –
Total liabilities 2 444 542 4 310 667 3 457 014
Other segment items
Interest revenue
(external) 1 299 1 846 4 422
Unallocated interest
revenue – – –
Investment revenue 1 299 1 846 4 421
Fair value
adjustments – – –
Interest expense – – 5 631
Unallocated interest
expense – – –
Finance costs – – 5 631
Heidelberg Maunde Namibia
R R R
30 September 2015
(Reviewed)
Turnover (external) 7 349 022 2 301 790 15 464
Reportable segment
profit before
investment revenue,
fair value
adjustments and
finance costs 5 012 087 1 933 894 (424 060)
Unallocated reportable
segment profit before
investment revenue,
fair value adjustments
and finance costs – – –
Profit before investment
revenue, fair value
adjustments and finance
costs
Segment assets and
liabilities
Segment assets 148 701 558 151 930 668 288 775 783
Unallocated assets – – –
Total assets 148 701 558 151 930 668 288 775 783
Segment liabilities 811 510 928 331 –
Unallocated liabilities – – –
Total liabilities 811 510 928 331 –
Other segment items
Interest revenue
(external) 496 – 1 460
Unallocated interest
revenue – – –
Investment revenue 496 – 1 460
Fair value
adjustments – – –
Interest expense – – –
Unallocated interest
expense – – –
Finance costs – – –
Reconciliation Total
30 September 2015 (Reviewed)
Turnover (external) – 80 906 368
Reportable segment profit before
investment revenue, fair value
adjustments and finance costs – 62 502 270
Unallocated reportable segment profit
before investment revenue, fair value
adjustments and finance costs (2 680 220) (2 680 220)
Profit before investment revenue, fair
value adjustments and finance costs 59 822 050
Segment assets and liabilities
Segment assets – 1 974 522 438
Unallocated assets 45 762 913 45 762 913
Total assets 45 762 913 2 020 285 351
Segment liabilities – 11 952 064
Unallocated liabilities 492 931 083 492 931 083
Total liabilities 492 931 083 504 883 147
Other segment items
Interest revenue (external) – 9 523
Unallocated interest revenue 400 364 400 364
Investment revenue 400 364 409 887
Fair value adjustments – –
Interest expense – 5 631
Unallocated interest expense 13 410 505 13 410 505
Finance costs 13 410 505 13 416 136
Atteridge-
ville Mamelodi Sebokeng Heidelberg
R R R R
30 September
2014 (Reviewed)
Turnover
(external) 18 850 234 27 424 922 16 442 797 7 747 427
Reportable
segment profit
before
investment
revenue, fair
value
adjustments and
finance costs 15 400 764 22 934 003 14 541 816 5 383 955
Unallocated
reportable
segment profit
before
investment
revenue, fair
value
adjustments
and finance
costs – – – –
Profit before
investment
revenue,
fair value
adjustments
and finance
costs Segment
assets and
liabilities
Segment assets 446 904 316 512 696 204 329 131 441 137 075 378
Unallocated
assets – – – –
Total assets 446 904 316 512 696 204 329 131 441 137 075 378
Segment
liabilities 1 831 834 2 404 462 1 391 424 631 812
Unallocated
liabilities – – – –
Total
liabilities 1 831 834 2 404 462 1 391 424 631 812
Other segment
items
Interest
revenue
(external) 804 6 914 2 142 32
Unallocated
interest
revenue – – – –
Investment
revenue 804 6 914 2 142 32
Interest
expense – – – 87
Unallocated
interest
expense – – – –
Finance costs – – – 87
Reconci-
Maunde Namibia liation Total
R R R R
30 September 2014
(Reviewed)
Turnover
(external) – – – 70 465 380
Reportable segment
profit before
investment
revenue, fair
value adjustments
and finance costs – (355 968) – 57 904 570
Unallocated
reportable segment
profit before
investment
revenue, fair
value adjustments
and finance costs – – (2 840 941) (2 840 941)
Profit before 55 063 629
investment revenue,
fair value
adjustments and
finance costs
Segment assets and
liabilities
Segment assets – 91 619 779 - 1 517 427 118
Unallocated assets – 11 225 514 11 225 514
Total assets 91 619 779 11 225 514 1 528 652 632
Segment
liabilities – – – 6 259 532
Unallocated
liabilities – – 133 309 033 133 309 033
Total liabilities – – 133 309 033 139 568 565
Other segment items
Interest revenue
(external) – 1 071 – 10 963
Unallocated
interest revenue – – 405 491 405 491
Investment revenue – 1 071 405 491 416 454
Interest expense – – 87
Unallocated
interest expense – 2 227 096 2 227 096
Finance costs – – 2 227 096 2 227 183
Earnings per share
for the six months ended 30 September 2015
Reviewed Reviewed
Interim Interim Audited
30 September 30 September 31 March
2015 2014 2015
R R R
Earnings used in the
calculation of basic
earnings per share 48 233 449 46 813 184 206 826 899
Ordinary shares in issue 174 261 990 170 000 000 172 282 443
Weighted average number
of ordinary shares 172 792 244 168 115 363 169 733 035
Headline earnings 48 233 449 46 813 184 92 237 291
Headline earnings per
share (cents) 28 28 54
Diluted headline
earnings per share
(cents) 28 28 54
Basic and diluted
earnings per share
(cents) 28 28 122
Headline earnings
reconciliation
Basic earnings 48 233 449 46 813 184 206 826 899
Fair value adjustment
of investment property – – (114 589 608)
Headline earnings from
continuing operations 48 233 449 46 813 184 92 237 291
Net asset value per share
for the six months ended 30 September 2015
Reviewed Reviewed
Interim Interim Audited
30 September 30 September 31 March
2015 2014 2015
R R R
Total assets 2 020 285 351 1 528 652 632 1 797 796 489
Total liabilities (504 883 147) (139 568 565) (288 375 787)
1 515 402 204 1 389 084 067 1 509 420 702
Ordinary shares in
issue 174 261 990 170 000 000 172 282 443
Net asset value per
share (cents) 870 817 876
Tangible net asset
value (cents) 870 817 876
Notes to the condensed consolidated financial statements
Basis of preparation
The preparation of the condensed consolidated interim financial
results for the six months ended 30 September 2015 was the
responsibility of the financial director, JZ Engelbrecht (MCom, MBA).
The condensed consolidated reviewed interim financial statements are
prepared in accordance with International Financial Reporting
Standard, IAS 34 Interim Financial Reporting, the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and
Financial Pronouncements as issued by Financial Reporting Standards
Council and the requirements of the Companies Act of South Africa, as
amended. The accounting policies applied in the preparation of these
condensed consolidated interim financial statements are in terms of
International Financial Reporting Standards and are consistent with
those applied in the previous consolidated annual financial
statements.
Financial statements
Pages 2 to 13 of the interim financial results have been reviewed by
Deloitte & Touche in accordance with ISRE 2410 – “Review of interim
financial information performed by the independent auditor of the
entity”. The review report issued by Deloitte & Touche is unmodified.
The auditor's report does not necessarily report on all of the
information contained in this announcement/financial results.
Shareholders are therefore advised that in order to obtain a full
understanding of the nature of the auditor's engagement they should
obtain a copy of the auditor's report, together with the accompanying
financial information from the issuer's registered office. The review
report can be obtained at Safari's registered office or on the website:
www.safari-investments.com. The directors take full responsibility for
the preparation of the interim consolidated financial results.
Any reference to future financial information included in this
announcement has not been reviewed or reported on by the auditor.
The interim consolidated financial statements were approved by the
board of directors on 18 November 2015.
New standards and interpretations
The accounting policies of the Group have been applied consistently
with the policies as presented in the consolidated financial
statements for the year ended 31 March 2015.
Events during and subsequent to the reporting period
Events during the financial period
On 29 June 2015, a distribution of 34 cents per share was declared,
with the option to reinvest the distribution in exchange for ordinary
Safari shares. A total of 1 979 547 new shares were issued to
shareholders who exercised this option.
At the Annual General Meeting held on 5 August 2015 all resolutions
were passed. Ms FN Khanyile (independent non-executive) and Mr JZ
Engelbrecht (financial director) were appointed as directors.
Messrs JC Verwayen and SJ Kruger were reclassified as alternative
directors and Dr PA Pienaar was not re-elected as a director.
The following new investments were approved by the board of Safari
during the May 2015 board meeting:
– Construction of another 16 000m2 retail centre in Atteridgeville to
the value of R301 million;
– Expansion of Denlyn Shopping Centre with a total investment value
of R31 million;
– The development of a private 20-bed day-hospital in Soweto of
R28 million;
– The acquisition of various Lynnwood properties at a total purchase
price of R40 million with the intention of developing an office block;
and
– A solar panel system with a total investment value of R20 million
to be installed at the Denlyn, Atlyn and Maunde shopping centres.
Events subsequent to the financial period
A rights issue was offered to shareholders subsequent to the interim
financial period, which resulted in 6 181 597 shares being issued at
R8,75 on 2 October 2015 and a total of R54,1 million being raised in
capital.
The board of directors of Safari approved a gross cash distribution
of 34 cents per ordinary share to be paid during December 2015,
subject to adherence to the solvency and liquidity requirements as
stated in the Companies Act 71 of 2008. Shareholders will be able to
elect to reinvest the cash distribution in return for ordinary Safari
shares.
A circular providing detailed information in respect of the cash
distribution and the reinvestment alternative was distributed to
all Safari shareholders on 20 November 2015 and a SENS announcement
was published on 19 November 2015.
Related-party transactions
All related-party transactions are as per approved agreements.
Cosmos Management CC (Cosmos) provided bookkeeping and property
management services to Safari and is a related party due to the
common directorship. The services rendered by Cosmos amounted to
R2,1 million (30 September 2014: R2 million).Safari Retail
Proprietary Limited (Retail) provides secretarial, financial and
administration services to Safari and is a related party due to the
common directorship. The services rendered by Retail amounted to
R0,5 million (30 September 2014: R0,5 million).
Board commentary
Profile
Safari Investments RSA Limited (Safari), with a total asset base of
R2 billion, is a retail-focused Real Estate Investment Trust (REIT)
listed on the Johannesburg Stock Exchange Limited (JSE) main board
under the property section. Safari invests in quality
income-generating property; revenue is generated through sustainable
rental income. There were no changes to the nature of the business
during the financial period under review.
Property portfolio
The property portfolio consists of 18 properties. Five of the
properties are established retail centres, of which three are serving
as regionals in their areas. The above-mentioned properties includes
the income-generating assets in the Safari portfolio. These are
Denlyn in Mamelodi (42 200m2); Atlyn (41 200m2) and Maunde (10 550m2)
in Atteridgeville; Thabong in Sebokeng (41 150m2); and
The Victorian in Heidelberg (15 400m2). These centres are anchored by
national retailers such as Shoprite, Spar and Pick 'n Pay. Safari's
current rental portfolio is 100% retail based.
Letting activity:
Safari's vacancy factor in its portfolio as at 30 September 2015 was
3% (2014: 1%) of the total income-generating retail space. The average
annual rental escalation percentage for the period was 8% (2014: 9%).
Current projects:
Atteridgeville
– The new Maunde Shopping Centre, with a gross lettable area (GLA) of
10 500m2 with Pick 'n Pay as the anchor tenant was constructed on
Maunde Street, the main access road into Atteridgeville. Construction
commenced in April 2014 and the centre opened its doors for trading
on 23 June 2015.
– The recent upgrades and extensions such as the South Block of Atlyn
Shopping Centre, together with Safari's brand-new development on
Maunde Street, brought a vibrant Central Business District and
meaningful retail node to Atteridgeville.
– This new business node of over 50 000m2 puts Atteridgeville on the
retail map, with the community being served by the widest range of
quality national brands.
– On 26 August 2015 the board approved another retail development at
one of its undeveloped properties in Atteridgeville adjacent to WF
Nkomo Street (formerly Church Street). The development, known as
Nkomo Village, situated close to the existing Saulsville Station,
will have a GLA of 20 553m2 and the total investment value is
R310 million. This retail centre will be co-anchored by
Pick 'n Pay and Shoprite. We will also welcome our first Builder's
Superstore to our tenancy list. Nkomo Village is set to open in
October 2017.
Sebokeng
– The extension to the Thabong Shopping Centre in Sebokeng was
completed, with a brand-new fashion node anchored by Edgars, and
opened during November 2014. The Pick 'n Pay as the second food
anchor opened during April 2015, resulting in Thabong Shopping Centre
being a high-quality retail node to serve as a regional shopping
centre for Sebokeng and surrounding areas, with national brands
representing 85% of the total tenants in the centre.
Swakopmund
– During 2014 the Safari board approved R462 million for the Platz Am
Meer Waterfront development in Swakopmund, Namibia. The ground-breaking
ceremony took place on 12 August 2014 with great support for this
development on both national and council level. The community awaits it
with great expectation, as this will be the establishment of a new
landmark for Namibia.
– Construction is now well under way but due to the enlargement of
5 520m2 (34%) in order to accommodate interest from national tenants,
the opening date of the Platz Am Meer Shopping Centre has been postponed
to September 2016. The total additional investment in the project's
expansion amounts to R113 million(24%).
– The location of the development is strategically incomparable. New
developments to the north are changing the patterns and flow of
traffic and business completely. Considering the spatial development
plan of Swakopmund, it is expected that within five years this
waterfront site will be right in the centre of the residential area.
– It comprises a mixed-use development of retail, office and upmarket
residential apartments. The apartments will be sold after completion.
The waterfront development is truly unique and a special addition to
the coastal town of Swakopmund, strengthening the town's tourist
attractiveness.
Denlyn
– During August 2015 the board approved the Denlyn Centre expansion
of 1 250m2 at a cost of R31 million, which will strategically improve
the tenant mix in the centre. This will allow Safari to accommodate
another national tenant desired by the community.
Acquisitions:
Soweto private day-hospital
– During the current period, Safari purchased Erf 14475, Protea Glen,
Soweto, for R1,3 million and entered into a development agreement
with Advanced Health Proprietary Limited for the development of a
20-bed private day-hospital. The expected opening date is
1 February 2016 and the expected yield for the project is 8% in year
one. The total investment value for this project is R27,6 million.
Lynnwood offices
– During July 2015 the board approved the acquisition of six
properties situated in Lynnwood, Pretoria with an aggregate land size
of 1,3 hectares, with the intention of developing a 10 000m2 office
block. The authorised total purchase price for the acquisition of all
the properties is R40 million. The transfer of the above-mentioned
properties occurred subsequent to 30 September 2015.
Solar panels
– On 26 August 2015 the board approved a solar project to the value
of R20 million at a yield of 20%. These solar panels will generate
1.2 megawatts. The panels will be installed at the Denlyn, Atlyn and
Maunde centres and the completion of this project is expected in
January 2016.
Financial performance
Headline earnings increased from R47 million to R48 million compared
with the same period for the previous year. Headline earnings per
share (cents) remained unchanged at 28 cents per share, compared with
28 cents per share for the comparative period.
Funding
Safari's secured loan facility was increased to R700 million in
January 2015. As at 30 September 2015 the remaining total facility
was R668 million of which 71% was utilised. Currently the debt
represents 23% of the value of the assets and the cost of finance is at
the prime lending rate less 1,5%.
Credit rating
During July 2015 Safari received its second credit rating from Global
CreditRating Co. (GCR):
– National Long term: BBB(ZA)1
– National Short term: A2(ZA)2
It remained unchanged from the previous financial year.
(1) Adequate protection factors and considered sufficient for prudent
investment. However, there is considerable variability in risk during
economic cycles.
(2) Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge
total financing requirements, access to capital market is good. Risk
factors are small. Source: Global Credit Rating 2015 Annual General
Meeting Safari's Annual General Meeting was held on 5 August 2015.
The resolutions passed are available on www.safari-investments.com.
Directorate
At the 2015 Annual General Meeting the board of Safari was reviewed
and advised that a decision had been taken to reduce the size from
ten to eight members. Messrs JC Verwayen and SJ Kruger were
reclassified as alternate directors. MsFN Khanyile and Mr JZ Engelbrecht
were appointed as directors and Dr PA Pienaar was not re-elected as a
director. The remainder of retired directors were re-elected in their
current positions.
Declaration of a cash distribution with the option to reinvest the
cash distribution for ordinary Safari shares
Shareholders are advised that the board of directors of Safari has
approved a gross cash distribution of 34 cents per ordinary share to
be paid during December 2015, subject to adherence to the solvency
and liquidity requirements as stated in the Companies Act 71 of
2008). Shareholders will be able to elect to reinvest the cash
distribution in return for ordinary shares.
A circular providing detailed information in respect of the cash
distribution and the reinvestment alternative was distributed to
all Safari shareholders on 20 November 2015 and relevant details were
announced on SENS on 19 November 2015.
Prospects
The development and extension pipeline as detailed above ensures that
Safari will maintain its attractive portfolio growth. Above-inflation
increases in utility cost and continued financial market volatility
are expected to continue. The board is committed to maximising the
rental income streams with the proactive letting strategy focused on
national tenants, and minimising the operating expenditure. The board
will focus on opportunities in order to achieve sustainable long-term,
recurring distributable earnings. Any forecast in the results has not
been reviewed or reported on by the independent external auditors and
is the responsibility of the board.
By order of the board
24 November 2015
Corporate information
Auditors
Deloitte & Touche
Riverwalk Office Park, Block B
41 Matroosberg Road, Ashlea Gardens, X6, Pretoria, 0081
Commercial banker
ABSA Bank Limited
(Registration number: 1986/004794/06) ABSA Towers East
170 Main Street, Johannesburg, 2001
PO Box 7735, Johannesburg, 2000
Group secretary
Safari Retail Proprietary Limited
(Registration number 2008/011620/07)
420 Friesland Lane, Lynnwood, Pretoria, 0081
Represented by: Dirk Engelbrecht BComm LLB
Corporate advisor
Fanus Kruger Consulting CC
(Registration number 2006/173299/23) Propateez Office Park
98 Beyers Naude Drive, Rustenburg, 0300
Directors of Safari
MH Tsolo (independent non-executive chairman) FJJ Marais (chief
executive officer)
JZ Engelbrecht (executive financial director)
FN Khanyile (independent non-executive director) SJ Kruger (alternate
director)
M Minnaar (independent non-executive director) K Pashiou (executive
director)
JP Snyman (independent non-executive director) JC Verwayen(alternate
director)
AE Wentzel (lead independent non-executive director)
Independent valuer
Mills Fitchet (Tvl) CC
(Registration number CK 89/40464/23) No 17 Tudor Park, 61 Hillcrest
Avenue Oerder Park, Randburg, 2115
PO Box 35345, Northcliff, 2115
Legal advisor
VFV Incorporated
Corporate Place, Block A, 39 Selati Street, Pretoria, 0081
PO Box 8636, Pretoria, 0001
Registered address and place of business:
420 Friesland Lane
Lynnwood, Pretoria, 0081
Tel +27 (0) 12 365 1881
Fax +27 (0) 86 272 1313
E-mail: info@safari-investments.com
Website: www.safari-investments.com
Sponsor
PSG Capital Proprietary Limited
(Registration number 1951/002280/06)
1st Floor, Ou Kollege Building
35 Kerk Street, Stellenbosch, 7599
PO Box 7403, Stellenbosch, 7599
Transfer secretaries
Computershare Investor Services Proprietary Limited
(Registration number 2004/003647)
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
To view the 2015 Annual Report visit: www.safari-investments.com
Date: 24/11/2015 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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