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TEXTON PROPERTY FUND LIMITED - Unaudited condensed consolidated interim financial results for the six months ended 31 December 2015

Release Date: 23/02/2016 10:00
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Unaudited condensed consolidated interim financial results for the six months ended 31 December 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)



Unaudited condensed consolidated interim financial results 

for the six months ended 31 December 2015



Financial highlights



- Dividend per share up by 15,3% from 44,68 cents to 51,52 cents

  per share

- Investment property income up by 55,5% from R169,9 million to

  R264,2 million

- Investment property income from UK up by 100,0% to R34,9 million

- Net property income up by 37,8% from R119,6 million

- Loan to value up from 34,7% to 38,4%

- Net asset value down by 6,9% from 1 077,32 (June 2015) to 1 003,32



Non-financial highlights

- Gross lettable area up by 21,8% from 322 007m2 to 392 275m2

- Government exposure on rental income down from 28,2% to 23,0% 



Condensed consolidated statement of financial position as 

at 31 December 2015

                                Unaudited      Unaudited        Audited

                                   31 Dec         31 Dec         30 Jun

                                     2015           2014           2015

                                    R’000          R'000          R'000

Assets

Non-current assets              4 779 483      3 157 488      4 338 969

Investment property             4 274 383      3 140 400      4 146 385

Property, plant and

equipment                          11 852          7 102          8 322

Goodwill                           88 630              –         77 018

Investment in joint

venture                           300 119              –              –

Other non-current assets            6 178          6 231          8 923

Restricted cash                    98 321              –         98 321

Deferred tax                            –          3 755              – 

Current assets                    747 687        117 021        361 287

Trade and other

receivables                        34 870         54 543         85 182

Investment property 

reclassified as 

held-for-sale                     340 680         24 000         24 000

Income tax receivable               1 209          4 563          3 631

Restricted cash                    27 157              -         28 089

Cash and cash equivalents         343 771         33 915        220 385

Total assets                    5 527 170      3 274 509      4 700 256

Equity and liabilities

Stated capital                  2 910 877      1 409 830      2 037 921

Retained earnings                 619 409        667 711        832 781

Share-based payment

reserve                             1 476              –          1 074

Foreign exchange

translation reserve                58 131              –          9 223

Shareholders’ interest          3 589 893      2 077 541      2 880 999

Non-current liabilities         1 806 743      1 120 686      1 719 760

Other financial

liabilities                     1 803 128      1 120 686      1 716 145

Deferred tax                        3 615              –          3 615

Current liabilities               130 534         76 282         99 497

Current portion of other

financial liabilities               4 317              –         30 613

Trade and other payables          126 217         76 282         68 884

Total liabilities               1 937 277      1 196 968      1 819 257

Total equity and

liabilities                     5 527 170      3 274 509      4 700 256

Shares in issue (’000)            357 802        208 498        267 424

Net asset value per 

share (cents)                    1 003,32         996,43       1 077,32

Net tangible asset value 

less deferred tax

per share (cents)                  979,56         994,63       1 049,87



Condensed consolidated statement of comprehensive income 

for the six months ended 31 December 2015

                                     Six months ended         Year ended

                                Unaudited      Unaudited         Audited

                                   31 Dec         31 Dec          30 Jun

                                     2015           2014            2015

                                    R’000          R'000           R'000



Investment property income        264 178        169 918         401 181

Straight-line rental

adjustment                        (10 372)         7 093           9 590

Revenue                           253 806        177 011         410 771

Property expenses                 (88 947)       (57 406)       (127 269)

Net property income               164 859        119 605         283 502

Share of profit from joint

venture                             3 333              –               – 

Other income                        1 220         14 695          22 804

Other operating expenses           (7 675)        (2 811)        (18 630) 

Asset management fees             (12 648)        (6 313)        (14 834) 

Operating profit                  149 089        125 176         272 842

Finance income                     23 888          1 441             585

Finance costs                     (51 065)       (30 541)        (77 588) 

Fair value adjustments           (146 854)        (2 163)        164 242

Capital items                         (58)          (114)           (114)

(Loss)/profit before income

tax                               (25 000)        93 799         359 967

Income tax                              –           (120)         (8 063) 

(Loss)/profit for the year        (25 000)        93 679         351 904

Other comprehensive income

Items that may be reclassified 

to profit or loss

Exchange differences on 

translation of foreign

operations                         48 908              –           9 223

Total comprehensive income

for the year                       23 908         93 679         361 127



Reconciliation of attributable 

income to earnings, headline 

earnings and distributable 

income

(Loss)/earnings attributable

to shareholders                   (25 000)        93 679         351 904

Gain on bargain purchase                –        (13 646)        (14 071) 

Gross revaluation of              102 454              –        (165 748)

investment property

Profit on sale of property              –              –          (5 791) 

Headline earnings

attributable to shareholders       77 454         80 033         166 294

Weighted average number of

shares (’000)                     313 487        177 454         200 337

Basic and diluted

(loss)/earnings per share

(cents)                             (7,97)         52,79          175,66

Headline earnings per share

(cents)                             24,71          45,10           83,01

Dividend per share (cents)          51,52          44,68           94,77

Interim dividend*                   51,52          44,68           44,68

Final dividend*                         –              –           50,09



*Declared subsequent to period-end.



Condensed consolidated statement of changes in equity 

for the six months ended 31 December 2015

                                            Foreign

                                   Share-  currency

                                    based   Revalu-

                         Stated   payment     ation  Retained

                        capital   reserve   reserve  earnings       Total

                          R'000     R'000     R'000     R'000       R'000

Balance at 

30 June 2014            945 436                       646 880   1 592 316

Transactions with 

owners of the 

Company recognised 

directly in equity                                                      -

Issue of shares         464 394                                   464 394

Dividend paid                                         (72 848)    (72 848)

Total comprehensive 

income for the 

period                        –         –         –    93 679      93 679

Balance at  

31 December 2014      1 409 830         –         –   667 711  2 0177 541

Transactions with 

owners of the 

Company recognised

directly in equity            –         –         –         -           -

Issue of shares         628 091                                   628 091

Dividend paid                 –         –         –   (93 149)     (3 149)

Share-based payment

transaction                   –     1 074         –         -       1 074

Total comprehensive 

income for the period         –         –     9 223   258 219     267 442

Profit for the period         –         –         –   258 219     258 219

Exchange differences 

on translation of 

foreign operations            –         –     9 223         -       9 223

Balance at 

30 June 2015

(Audited)             2 037 921     1 074     9 223   832 781   2 880 999

Transactions with 

owners of the 

Company recognised

directly in equity            –         –         –         -           -

Issue of shares (net of

share issue expense     960 775         –         –         -     960 775

Dividend paid                 –         –         –  (188 372)   (188 372)

Share buy-back          (87 819)        –         –         -     (87 819)

Share-based payment

transaction                   –       402         –         -         402

Total comprehensive income

for the year                  –         –    48 908   (25 000)     23 908

Profit for the period         –         –         –   (25 000)    (25 000)

Exchange differences on

translation of foreign

operations                    –         –    48 908         -      48 908

Balance at 

31 December 2015      2 910 877     1 476    58 131   619 409   3 589 893



Condensed consolidated statement of cash flows 

for the six months ended 31 December 2015

                                     Six months ended         Year ended

                                Unaudited      Unaudited         Audited

                                   31 Dec         31 Dec          30 Jun

                                     2015           2014            2015

                                    R’000          R'000           R'000

Net cash inflow from

operating activities               55 582         33 832          15 669

Net cash outflow from

investing activities             (728 941)      (678 040)       (518 689)

Net cash inflow from

financing activities              785 712        613 674         658 271

Net increase/(decrease) in

cash and cash equivalents         110 353        (30 534)        155 251

Effect of the conversion of 

foreign operations on cash

and cash equivalents               13 033              –             685

Cash and cash equivalents at

the beginning of the year         220 385         64 449          64 449

Cash and cash equivalents at      

the end of the year               343 771         33 915         220 385



Distributable earnings

for the six months ended 31 December 2015

                                     Six months ended         Year ended

                                Unaudited      Unaudited         Audited

                                   31 Dec         31 Dec          30 Jun

                                     2015           2014            2015

                                    R’000          R'000           R'000

Revenue                           264 178        169 918         401 181

Property expenses                 (88 947)       (57 406)       (127 269) 

Share of profit from joint

venture                             3 333              –

Other income                        1 220          1 049           8 733

Bargain purchase price                  –         13 646          14 071

Other operating expenses           (7 770)        (2 811)         (9 167) 

Asset management fees             (12 648)        (6 313)        (14 834) 

Net finance cost                  (26 675)       (28 866)        (76 616) 

Finance income                     23 888          1 441             585

Finance cost                      (51 065)       (30 541)        (77 588) 

Finance cost amortisation             502            234             387

Taxation                                –           (120)           (692)

Accrued distribution

included in share price           27 720               –          19 583

Deconsolidation of treasury

shares                                 –           4 052               –

Distribution of foreign

exchange gain                     23 915               –               – 

Dividends on treasury shares       5 160               –           8 381

Realisation of property

revaluation                            –               –           8 059

Total distribution               189 486          93 149         231 430



Segmental analysis as at 31 December



                                          South Africa

                           Office    Retail  Industrial        Total

                            R’000     R’000       R’000        R’000

2015

Extracts from the

statement of 

comprehensive income

Investment property

income                   183 119     22 194       23 588      228 901

Property expenses        (65 238)   (11 467)     (11 857)     (88 562) 

Segmental result         117 881     10 727       11 731      140 339

Extracts from the 

statement of 

financial position

Investment property    2 399 108    236 014      249 640    2 884 762

Investment property

held-for-sale            243 020     58 350       39 310      340 680



2014

Extracts from the 

statement of 

comprehensive income

Investment property

income                   160 629      5 317        3 972      169 918

Property expenses        (54 305)    (2 249)        (852)     (57 406) 

Segmental result         106 324      3 068        3 120      112 512

Extracts from the 

statement of 

financial position

Investment property    2 502 939    397 171       240 290   3 140 400

Investment property

held-for-sale             24 000          –             –           –





                                          UK

                           Office    Retail  Industrial        Total

                          GBP’000   GBP’000     GBP’000      GBP’000

2015

Extracts from the 

statement of 

comprehensive income

Investment property

income                     25 486     7 775       2 016       35 277

Property expenses           (245)      (102)        (38)        (385) 

Segmental result           25 241     7 673       1 978       34 892

Extracts from the 

statement of 

financial position

Investment property       717 460   232 440     439 721    1 389 621

Investment property

held-for-sale                   –         –           –            –



2014

Extracts from the 

statement of 

comprehensive income

Investment property

income                          –          –          –            – 

Property expenses               –          –          –            – 

Segmental result                –          –          –            –

Extracts from the 

statement of 

financial position

Investment property             –          –          –            – 

Investment property

held-for-sale                   –          –          –            –





                                            Total

                           Office    Retail  Industrial        Total

                            R’000     R’000       R’000        R’000

2015

Extracts from the 

statement of 

comprehensive income

Investment property

income                    208 605    29 969      25 604       264 178

Property expenses         (65 483)  (11 569)    (11 895)      (88 947) 

Segmental result          143 122    18 400      13 709       175 231

Extracts from the 

statement of 

financial position

Investment property     3 116 568   468 454      689 362    4 274 384

Investment property

held-for-sale             243 020    58 350       39 310      340 680



2014

Extracts from the 

statement of 

comprehensive income

Investment property

income                    160 629     5 317        3 972      169 918

Property expenses         (54 305)   (2 249)        (852)     (57 406) 

Segmental result          106 324     3 068        3 120      112 512

Extracts from the 

statement of 

financial position

Investment property     2 502 939   397 171      240 290    3 140 400

Investment property

held-for-sale              24 000         –            –       24 000



Reconciliation from segment result to profit for the year

                                               Total          Total

                                              31 Dec         31 Dec

                                                2015           2014

                                               R’000          R’000

Segment results                              175 231        112 512

Straight-line rental adjustment              (10 372)         7 093

Other income                                   1 220         14 695

Share of profit from joint venture             3 333              – 

Other operating expenses                      (7 173)        (2 811) 

Asset management fees                        (12 648)        (6 313) 

Finance income                                23 888          1 441

Finance cost                                 (51 065)       (30 541) 

Finance cost amortisation                       (502)          (234) 

Fair value adjustment                       (146 854)        (2 163) 

Capital items                                    (58)          (114) 

Income tax                                         –           (120) 

(Loss)/profit for the year                   (25 000)        93 679



Commentary

The board has declared an interim dividend of 51,52 cents per share 

which represents 15,3% growth compared to the same period the 

previous year. Texton’s decision to invest beyond the South

African borders into the United Kingdom has been a successful one. We 

have executed on this strategy efficiently and believe our timing 

into this market has been opportune, resulting in immediate benefits 

for our shareholders against the backdrop of a relatively muted 

performance from the South African portfolio.

Given the headwinds facing the global economy and South Africa, 

management has adopted a conservative approach to the valuation of 

its properties. An independent valuation was obtained on the majority 

of the portfolio in June 2015. The directors and management, however, 

have reviewed these values at 31 December 2015 and have decided to 

write down some of the assets to what they believe are market-related 

Management remains committed to its strategy of disposing of non-core 

assets and to achieve geographic and sector diversification across the 

portfolio. Basis of accounting

The condensed consolidated interim financial results 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 the Financial Reporting Standards Council 

and the requirements of the Companies Act of South Africa.

The accounting policies applied in the preparation of these

interim financial results are in terms of IFRS and consistent with

those adopted in the financial statements for the year ended 

30 June 2015. These interim condensed financial results have been 

prepared by Brigitte de Bruyn CA (SA).



Summary of financial performance

                                     Six months ended         Year ended

                                Unaudited      Unaudited         Audited

                                   31 Dec         31 Dec          30 Jun

                                     2015           2014            2015

                                    R’000          R'000           R'000



Number of shares in issue

(’000)                            357 802        208 498         267 424

Weighted average number of

shares in issue (’000)            313 487        177 454         200 337

Net asset value per share

(cents)                          1 003,33         996,43        1 077,32

Net tangible asset value 

less deferred tax per share

(cents)                            979,56         994,63        1 049,87

Basic and diluted

(loss)/earnings per share

(cents)                             (7,97)         52,79          175,66

Headline earnings per share

(cents)                             24,71          45,10           83,01

Dividend per share                  51,52          44,68           94,77

Interim dividend                    51,52          44,68           44,68

Final dividend                          –              –           50,09

Share price (cents)                979,00         963,00          980,00

Loan to value (%)                    38,4           34,7            38,8



Fair values



                          31 December 2015            31 December 2014

                         Carrying        Fair       Carrying       Fair

                           amount       value         amount      value

                            R’000       R’000          R’000      R’000

GROUP

Financial assets

Other non-current

assets                      1 377       1 377          2 469      2 469

Trade and other

receivables                32 986      32 986         49 651     49 651

Restricted cash           125 478     125 478              –          – 

Cash and cash

equivalents               343 771     343 771         33 915     33 915

Fair value

through profit or

loss                        6 380       6 380              –          –

                          509 992     509 992         86 035      86 035

Financial liabilities

Amortised cost         (1 864 829) (1 864 829)    (1 122 690) (1 122 690) 

Fair value

through profit or

loss                      (64 420)    (64 420)        (3 628)     (3 628)

                       (1 929 249) (1 929 249)    (1 126 318) (1 126 318)



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 and currency 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.

Investments at fair value in Level 3 represents investment

properties and investment properties held-for-sale. All fair value 

adjustments were accounted for in profit or loss.

Cash and cash equivalents are not fair valued and the carrying

amounts are 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     Level 4

                         R’000       R’000       R’000       R’000

GROUP

31 December 2015

Financial instrument

Interest rate swap           –       6 380           –       6 380

Currency swap                –      64 420           –      64 420

Investment properties                        4 240 096   4 240 096

Investment property 

held-for-sale                                  340 680     340 680

 31 December 2014

Financial instrument

Interest rate swap           –       3 628           –       3 628

Investment properties        –           –   3 140 400   3 140 400

Investment property 

held-for-sale                –           –      24 000      24 000



Property profile



Debt maturities profile

                            Drawn down                        Total

                                                              drawn

            Facility     Fixed          Floating               down

               R’000     R’000      %      R’000       %      R'000

South Africa

FY 2017      502 490         –      –    199 309    41,1    199 309

FY 2018      385 426         –      –    285 326    58,9    285 326

             887 916         –      –    484 635   100,0    484 635

UK

FY 2018      624 251                     624 251    56,1    624 251

FY 2020      488 739   488 739   43,9                       488 739

           1 112 990   488 739   43,9    624 251    56,1  1 112 990

Total      2 000 906   488 739         1 108 886          1 597 625



Interest rate swap maturity profile

                                                       Nominal rate

Expiry                                        R’000               %

14 December 2016                            150 000            7,26

22 March 2017                               103 000            7,12

22 March 2017                               102 000            7,12

17 July 2017                                200 000            7,12

                                            555 000

Currency swap

                                                Bank pays    We pay

Expiry                      R’000    GPB’000            %         %

08/12/2020                350 560     16 000         11,0     3,810

21/12/2020                102 269      4 525         11,0     3,690



Net property income

The increase in revenue of 37,8% from the prior comparable period was 

largely due to the effects of contractual rental escalations and the 

property acquisitions.

The ratio of gross property expenses to investment property income

(rental income including recoveries from tenants) has decreased 

slightly from 33,8% to 33,7% in the current year.



Asset management fees

The asset management function is performed by Texton Property

Investments Proprietary Limited and the day-to-day property 

management function was performed by JHI Properties Proprietary 

Limited and Kuper Legh Property Management Proprietary Limited. As 

part of a business consolidation programme as at 1 January 2016, the 

entire South African portfolio was moved to Kuper Legh Property 

Management Proprietary Limited. With recent acquisitions in the 

United Kingdom, Texton appointed Moorgarth Property Management 

Limited and Argo Real Estate Limited, who also have a history of 

managing the properties that were acquired, as property managers. The 

board is considering consolidation of its property management 

functions in the UK as part of its overall strategy to improve 

operational efficiencies in the business.

The increase in fees is attributable to the increased enterprise 

value on which the fee is calculated as a result of the property 

acquisitions.



Fair value adjustments

The majority of the property portfolio was independently valued at

30 June 2015, however, the directors and management believed that the 

South African property portfolio should be revalued at 31 December 2016. 

Currency and interest rate swap agreements were fair valued using the 

yield curve at 31 December 2015, resulting in an increase in the currency 

liability of R64,4 million (2014: Rnil) and a decrease of the interest 

rate liability of R6,5 million.



Currency

The closing exchange rate at 31 December 2015 was R22,79:1GBP and

the average exchange rate for the six months ended 31 December

2015 was R20,85:1GBP.



Finance income and finance costs

Finance income of R23,9 million was earned mainly as a result of 

investing the proceeds of the R986 million rights offer in October

2015. Any cash drag as a result of the equity raise was for a limited 

period as a result of investments that occurred in and post the 

review period and has been further mitigated through the entering 

into of currency swaps where interest earned exceeds the cost of 

equity. Proactive equity raises are required in order to

succeed in the UK market, which is dependent on ability to execute 

transactions on fast turnaround times.

Finance costs increased by 67,2% to R51,1 million (2014: R30,3

million), as a result of the increased portfolio.



Properties held-for-sale

During the period, the Company earmarked 19 non-core properties 

totalling R340,7 million for sale. Negotiations for the sale of the 

total 51 295m2 of GLA are at an advanced stage.



Acquisitions/Business combinations

Much work has been done on implementing our UK strategy. In July

2015, Texton made its biggest acquisition to date when, through a new 

vehicle domiciled in Luxembourg, Inception Reading Sarl, it acquired 

50% of the Broad Street Mall in Reading. This asset was acquired in a 

joint venture with JSE-listed Tradehold. The total value of the Mall 

was £62,250 million (excluding acquisition costs of approximately 

£3,124 million) The investment has been accounted for as a joint 

venture under IFRS 11 and accounted for under the equity method.

On 23 December 2015, Texton took transfer of the Bawtry building from 

DHL for an acquisition price of £17 million (excluding VAT). The 

acquisition was accounted for as a business combination:



Purchase price (R’000)                                      392 938

Property GLA (m2)                                            25 294

Acquisition yield (%)                                         6,45% 

Property lease escalation (%)                         Upwards only,

                                                         compounded 

                                                         at 2% p.a.

Net assets acquired                                           R’000

Investment property                                         392 938

VAT receivable                                               73 659

Income received in advance                                  (6 646) 

Net assets acquired                                         459 951

Net cash paid                                             (459 951)



Borrowings

At 31 December 2015, the Fund had a loan to value of 38,4% (2014:

34,7%). The Company remains capitalised to take advantage of

yield-enhancing acquisitions. The Company currently has an average 

cost of debt of 8,29% (2014: 8,27%) on its South African debt and

3,51% (2014: 0%) on its UK debt.



Rights offer

On 7 October 2015, Texton issued 100 000 000 new Texton shares in the 

ratio of 36,22312 for every 100 Texton shares held. The shares were 

placed at an issue price of R9,86 per rights offer share.

The equity was raised with the intention of decreasing its loan- 

to-value ratio and providing the opportunity to pursue investment 

opportunities in the UK and SA, in line with its growth strategy. 

Repurchase of shares

In December 2015, Texton repurchased 8 276 143 shares at R9,00. These 

shares are held as treasury shares.



Prospects

Despite the difficult economic climate, the portfolio continues to 

perform well and we are committed to achieving double-digit 

distribution growth for the full year to 30 June 2016. The Company is 

expected to continue to benefit from its offshore strategy via 

accretionary transactions and the softer Rand. The Company has a 

solid pipeline of acquisitions and we will continue to focus on

our strategy of growing Texton with yield-enhancing assets, while

improving the overall quality of the portfolio. This reporting period 

has seen the positive effect of the new strategies reported 

previously, which we expect to continue benefiting the Company

into the future.

This prospects statement has not been reviewed or reported on by the 

Company’s independent external auditors.



Cash dividend

Notice is hereby given of the declaration of the final dividend 

number 9 of 51,52 cents per share for the interim six-month period to 

31 December 2015. The dividend has been declared from income reserves.

Texton’s income tax reference number: 9353785158. Issued shares as at 

23 February 2016: 357 802 118.



Summary of the salient dates relating to the cash distribution is as 

follows:

Declaration date                          Tuesday, 23 February 2016

Last date to trade in order to 

participate in the cash dividend          Wednesday, 16 March 2016

Shares to trade ex-dividend               Thursday, 17 March 2016

Record date                               Thursday, 24 March 2016

Payment date                              Tuesday, 29 March 2016



Shares may not be dematerialised or rematerialised between Wednesday, 

17 March 2016 and Thursday, 24 March 2016, 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 bythe 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

43,7920 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:

– declaration that the dividend is subject to a reduced rate as a

  result of the application of the DTA; and

- 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. 



On behalf of the board



PD Naidoo                        AN de Rauville

Chairman                         Chief Executive Officer



23 February 2016



Board of directors

PD Naidoo (Chairman), AN Du Hecquet de Rauville (Chief Executive

Officer), B de Bruyn (Financial Director – appointed 1 November

2015), NV Balfour, KR Collins (alternate – appointed 3 November

2015), JA Legh, JR Macey, N Morris (Chief Operating Officer –

appointed 1 January 2016), PM Tau-Sekati (Lead independent), 

TS Sishuba, KN Vundla, MJ van Heerden, JD Wiese (appointed 3 November

2015), RB Makhubela (appointment to the board not ratified at AGM

on 17 November 2015)



Company secretary: CIS Company Secretaries Proprietary Limited 

(N Toerien)



Sponsor: Investec Bank Limited Transfer secretary: Computershare 

Investor Services Proprietary Limited, 70 Marshall Street, 

Johannesburg, 2001



Physical/Registered and postal address: 54 Bompas Road, Dunkeld

West, 2196  PO Box 41394, Craighall Park, 2024



Telephone number: +27 11 731 1980



www.texton.co.za




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