Wrap Text
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
Date: 23/02/2016 10:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.