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Unaudited results for the six months ended 29 February 2016
REBOSIS PROPERTIES LIMITED
("Rebosis" or the "company")
(Registration number 2010/003468/06)
(Approved as a REIT by the JSE)
JSE share code: REB ISIN: ZAE000201687
UNAUDITED RESULTS for the six months ended 29 February 2016
INVESTMENT HIGHLIGHTS
Distribution growth
up 8,26%
to 56,79 cents per share
Growth in assets
under management
up 50,0%
to R11,815 billion
Net income growth
up 7,0%
year-on-year
Vacancies
down 2,4%
from 3,1% at year-end
Total return in UK
New Frontier Investment
up 22,7%
Assets under
management
up R11,8 billion
OUR PORTFOLIO KEY INDICATORS AT 29 FEBRUARY 2016
RETAIL
Number of properties 4
Portfolio valuation (R'000) 3 954 450
Gross lettable area (m(2)) 161 867
Value per m(2) (R) 22 206
- 4 high growth dominant malls
- Includes Hemingways Mall, East London's largest retail centre
- 86% national tenant profile
- Average escalation of 7,4%
- Vacancies 3,4%
OFFICE
Number of properties 14
Portfolio valuation (R'000) 4 229 000
Gross lettable area (m(2)) 232 133
Value per m(2) (R) 18 218
- 14 predominantly A and B grade well-located properties
- Let primarily to National Department of Public Works under long leases
- Average escalation of 8,5%
- Shielded from private sector e.g. tenant cash flow and insolvency-related default
- Vacancies 1,7%
- Sovereign underpin on rentals of 42% of overall portfolio
INDUSTRIAL
Number of properties 1
Portfolio valuation (R'000) 141 000
Gross lettable area (m(2)) 18 954
Value per m(2) (R) 7 439
- Specialised single tenant industrial warehouse
- Triple net lease expiring on 31 December 2019
- Lease underpinned by the international parent company which is listed on Euronext Paris
- Average escalation of 7,0%
- Vacancies 0%
COMMENTARY
INTRODUCTION
Rebosis is a JSE listed real estate investment trust (REIT) that owns 19 properties comprising of four dominant shopping centres,
14 large office buildings let on long-term leases and an industrial property.
It has a 67,5% interest in New Frontier Properties Limited ("New Frontier"), which owns 3 dominant shopping centres in the UK.
Rebosis also owns 59% of Ascension Properties Limited ("Ascension"), a JSE listed REIT.
Despite a tough domestic economic environment we are pleased to announce an exciting set of results.
FINANCIAL RESULTS
Rebosis has declared a dividend of 56,79 cents per share for the six months ended 29 February 2016. This amounts to an 8,26%
growth year-on-year. This is in line with the 8% to 10% guidance communicated at year-end.
A decision was made by management to change valuers on a five-year cycle. LDM Valuation Solutions was appointed for both
the commercial and industrial portfolios with Mills Fitchet for retail. The valuers are both independent JSE accredited valuers. The
portfolio growth is 13,9% year-on-year bringing the portfolio value to R7,9 billion for the company.
Property expenses have increased year on year with the net cost to income ratio increasing from 12,7 to 13,0%.
PROPERTY PORTFOLIO
At year-end, assets under management were valued at R11,8 billion (2015: R7,9 billion). The value of the Rebosis investment
property portfolio was R8,0 billion (2015: R6,9 billion) while our effective 59% holding in Ascension and 67,5% in New Frontier
amounted to R3,8 billion (2015: R889 million).
The investment property portfolio for Rebosis of 19 properties is illustrated in the following graphs in terms of
sectoral and geographical splits.
SECTORAL BY VALUE
Retail: 55%
Office: 44%
Industrial: 1%
GEOGRAPHIC BY GLA
Eastern Cape: 26%
Gauteng: 66%
KwaZulu-Natal: 5%
North West: 3%
Our retail portfolio consists of four high-quality, dominant shopping malls with strong anchor national tenants delivering income
streams escalating at 7,4%.
The office portfolio consists of 14 buildings which are of a size and so located as to be attractive to a diversity of government
tenants. These buildings are mainly single-tenanted buildings let to the National Department of Public Works under long leases
providing for average escalations of 8,5%. The office portfolio represents a sovereign underpin to a substantial portion of Rebosis'
earnings, shielding it from private sector risks such as tenant insolvency and default – material risks in the context of sluggish
economic growth and constrained consumer spend.
The company's only industrial property is a specialised single-tenanted industrial warehouse with a triple net lease escalating at
7,0% which expires in December 2019.
This year, the top 10 properties by value represented 79% of portfolio net income and 82% of value. The expiry profile by gross
lettable area is as follows:
28 FEB 2017 28 FEB 2018 28 FEB 2019 29 FEB 2020 28 FEB 2021
Retail 17% 9% 28% 13% 33%
Office 10% 39% 3% 46% 2%
Industrial 0% 0% 0% 100% 0%
Total portfolio 12% 26% 12% 36% 14%
VACANCIES
- Retail vacancies have increased from 3,1% to 3,4% due to the liquidation of the Platinum Group.
- Office vacancies have reduced from 3,2% to 1,7% as a result of new lettings in Revenue Building (PMB) and Arbour Square.
- Overall vacancies have decreased from 3,1% to 2,4%.
ACQUISITIONS
On 23 September 2015, the Group acquired the Houndshill Shopping Centre in Blackpool by acquiring the whole of the issued
share capital of BCC Eiffel SARL via a newly incorporated wholly-owned subsidiary company, New Frontier Luxembourg SARL. The
transaction is accounted for as a single business combination as this was carried out simultaneously from one ultimate vendor
and completed on the same day. In accordance with its accounting policy the group has determined that this acquisition was a
business combination. The costs of acquisition which have been recognised in the consolidated statement of profit and loss and
other comprehensive income amount to R52,9 million.
The following summarises the amounts of assets acquired and liabilities assumed at the acquisition date:
Fair value of Acquiree's
assets acquired carrying amount
R'000 R'000
Investment property 2 081 868 2 081 868
Trade and other receivables 13 824 13 824
Cash and cash equivalents 22 647 22 647
Trade and other payables (36 554) (36 554)
Borrowings (1 123 527) (1 123 527)
Total identifiable net assets 958 258 958 258
Total
Cash consideration paid (958 258)
Goodwill arising on acquisition –
Total consideration 958 258
Amount in escrow (15 498)
Consideration payable (227)
Less: Cash and cash equivalents acquired (22 647)
Cash consideration paid 919 886
The acquired businesses contributed revenues of R69,9 million and loss after tax of R62,3 million to the group for the six months
ended 29 February 2016.
Had the acquisition been effective on 1 September 2015 the contribution to revenue would have been R78,8 million and loss after
tax would have been R58,2 million.
FUNDING
At 29 February 2016, Rebosis' borrowings increased to R4,1 billion as a result of the increase in our investment in New Frontier.
The weighted average cost of borrowings increased from 8,2% to 9,1% for the period under review – largely due to the additional debt
taken out and the higher interest rates. There are currently swap/fixed arrangements in place for 75,8% of the debt.
The loan to value has decreased from 35,7% to 33,7% (Company) and 48,4% to 48,9% (Group) of which the increase in our
property valuations contributed to this favourable movement.
PAYMENT OF DIVIDEND
Dividend number 11 of 56,79236 cents per share for the six months ended 29 February 2016 will be paid to the shareholders in
accordance with the abbreviated timetable set out below:
2016
Last day to trade cum dividend Friday, 6 May
Securities trade ex dividend Monday, 9 May
Record date Friday, 13 May
Payment date Monday, 16 May
Share certificates may not be dematerialised or rematerialised between Monday, 9 May 2016 and Friday, 13 May 2016, both days
inclusive.
The dividend will be transferred to dematerialised shareholders' CSDP/broker accounts on Monday, 16 May 2016. Certificated
shareholders' dividend payments will be posted on or paid to certificated shareholders' bank accounts on or about, Monday,
16 May 2016.
An announcement informing shareholders of the tax treatment of the dividends will be released separately on SENS.
BASIS OF PREPARATION
The unaudited results for the six months ended 29 February 2016 have not been reviewed or reported on by the company's
independent auditors, Grant Thornton Johannesburg Partnership. These results have been prepared in accordance with International
Financial Reporting Standards (IFRS), IAS 34, Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council,
JSE Listings Requirements and the requirements of the Companies Act of South Africa.
The accounting policies are consistent with those applied in the previous consolidated annual financial statements. These financial
results have been prepared under the supervision of the Chief Financial Officer, K Keshav, CA(SA).
There were no new accounting standards adopted during the six-month period.
The directors are not aware of any matters or circumstances arising subsequent to 29 February 2016 that require any additional
disclosure or adjustment to the financial statements, other than as disclosed in this announcement.
There have been no changes to the board of directors during the period.
PROSPECTS
The domestic economy remains weak with inflationary pressure. Together with a rising interest rate cycle the outlook is moderate.
The board is of the view that distribution per share for FY16 will grow between 8% to 10% above that of FY15. This forecast has
not been reviewed or reported on by the company's auditors.
By order of the Board
14 April 2016
REBOSIS PROPERTY FUND LIMITED
("Rebosis" or the "company") (Registration number 2010/003468/06)
(Approved as a REIT by the JSE) JSE share code: REB ISIN: ZAE000201687
Company secretary: M Ndema
Transfer secretaries: Computershare Investor Services Proprietary Limited
Sponsor: Java Capital
Registered office: 3rd Floor, Palazzo Towers West, Montecasino Boulevard, Fourways, 2191
(PO Box 2972, Northriding, 2162)
Directors: ATM Mokgokong*^ (Chairperson), SM Ngebulana (CEO), K Keshav (CFO), AM Mazwai*^,
WJ Odendaal*^, NV Qangule*^, KL Reynolds*, TSM Seopa*^
*Non-executive ^ Independent
STATEMENT OF COMPREHENSIVE INCOME
Group Company
Unaudited Unaudited Unaudited Unaudited
for the for the for the for the
six months six months six months six months
ended ended ended ended
29 February 28 February 29 February 28 February
2016 2015 2016 2015
R'000 R'000 R'000 R'000
REVENUE
Property portfolio 832 738 458 444 481 690 458 444
Rental income 845 840 396 800 424 507 396 800
Listed property securities income 46 30 477 85 852 30 477
Straight-line rental income accrual (13 148) 37 167 (28 669) 31 167
Net income from facilities management agreement 10 577 10 525 10 577 10 525
Management fees received 9 191 7 570 8 276 6 354
Sundry income 709 454 581 454
Total revenue 853 215 476 993 501 124 475 777
Property expenses (162 579) (106 046) (112 846) (106 046)
Administration and corporate costs (108 217) (16 295) (22 010) (15 048)
Net operating profit 582 419 354 652 366 268 354 683
Changes in fair values 1 084 998 152 707 1 217 534 152 707
Profit from operations 1 667 417 507 359 1 583 802 507 390
Finance charges (279 210) (117 068) (161 947) (117 099)
Finance charges – secured loans (281 990) (121 064) (163 417) (121 064)
Interest received – other 2 780 3 996 1 470 3 965
Profit before taxation 1 388 207 390 291 1 421 855 390 291
Debenture interest – (208 813) – (208 813)
Profit before taxation 1 388 207 181 478 1 421 855 181 478
Taxation (6 511) – – –
Total profit for the year 1 381 696 181 478 1 421 855 181 478
Other comprehensive income
Items that may be recycled to profit and loss
Foreign currency translation reserve 168 816 – – –
Total comprehensive income 1 550 512 181 478 1 421 855 181 478
Total profit attributable to:
Owners of the parent 1 248 968 181 478 1 421 855 181 478
Non-controlling interests 132 728 – – –
Profit for the year 1 381 696 181 478 1 421 855 181 478
Total comprehensive income attributable to:
Owners of the parent 1 339 404 181 478 1 421 855 181 478
Non-controlling interests 211 108 – – –
Total comprehensive income for the year 1 550 512 181 478 1 421 855 181 478
Reconciliation of earnings and distributable earnings
Profit attributable to ordinary equity holders
of the parent entity 1 248 968 181 478 1 421 855 181 478
Adjusted for:
Change in fair value of investment properties (1 154 944) (66 568) (920 768) (66 568)
Headline profit attributable to shareholders 94 024 114 910 501 087 114 910
Debenture interest – 208 813 – 208 813
Headline earnings attributable to shareholders
(2015: linked unitholders) 94 024 323 723 501 087 323 750
Adjustments to reconcile to distributable earnings:
Change in fair value of financial assets and liabilities 68 978 14 421 (25 778) 14 421
Straight-line rental accrual 13 148 (31 167) 28 669 (31 167)
Change in fair value of investment in listed property
securities – (100 561) – (100 561)
Change in fair value of investment in subsidiaries – – (270 988) –
Antecedent interest – 27 102 – 27 102
Income distributed in prior period (67 651) – (67 651) –
Amortisation of structuring fees 5 562 2 159 3 333 2 159
Corporate transaction costs 58 645 323 116 323
Anticipated distribution from listed REIT subsidiaries* 124 480 – 124 480 –
Consolidation adjustments between group entities (3 918) – – –
Distributable earnings attributable to shareholders
(2015: linked unitholders) 293 268 236 000 293 268 236 000
Number of shares in issue at period end 516 391 250# 418 087 003 516 391 260# 418 083 003
Weighted average number of shares/linked units in
issue used for the calculation of earnings and headline
earnings per share 424 011 545 394 300 155 424 011 545 394 300 155
Basic and diluted earnings per share (cents) 294,56 46,03
Basic and diluted headline earnings per share (cents) 22,17 82,10
Dividend/Distribution per share (2015: linked unit)
(cents) 56,79 52,46
Year-on-year distribution growth (%) 8,26 8,16
* In terms of the South African REIT Association Best Practice, Rebosis has become entitled at year-end to the anticipated distributions of its listed
REIT subsidiaries. Accordingly an adjustment is made at year-end to match the anticipated income of the distribution with the period to which the
distribution relates.
# Net of treasury shares of 1 778 146.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
Group Company
For the For the For the For the
six months six months six months six months
ended ended ended ended
29 February 28 February 29 February 28 February
2016 2015 2016 2015
R'000 R'000 R'000 R'000
Cash flows from operating activities 40 629 18 135 88 080 17 884
Cash outflows from investing activities (1 060 681) (37 712) (794 613) (37 712)
Cash inflows from financing activities 1 015 221 595 585 725 239 595 585
Net movement in cash and cash equivalents (4 831) 576 009 18 706 575 757
Effect of translation 49 575 – – –
Cash and cash equivalents at the beginning of the year 174 823 48 854 56 271 48 854
Cash and cash equivalents at the end of the year 219 567 624 863 74 977 624 611
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Group Company
Unaudited Unaudited Unaudited Unaudited
for the for the for the for the
six months six months six months six months
ended ended ended ended
29 February 28 February 29 February 28 February
2016 2015 2016 2015
R'000 R'000 R'000 R'000
Balance at 31 August 7 541 124 1 832 554 6 400 083 1 832 554
Issue of shares 243 891 430 302 243 891 430 302
Treasury shares (held by subsidiary) (40 371) – – –
Profit for the year 1 248 968 181 478 1 421 855 181 478
Dividend paid (103 424) – (103 424) –
FCTR 90 436 – – –
Non-controlling interest 354 748 – – –
Balance at 29 February 9 335 372 2 444 334 7 962 405 2 444 334
STATEMENT OF FINANCIAL POSITION
Group Company
Unaudited Audited Unaudited Audited
as at as at as at as at
29 February 31 August 29 February 31 August
2016 2015 2016 2015
R'000 R'000 R'000 R'000
ASSETS
Non-current assets 18 467 476 14 669 283 11 945 968 9 968 630
Investment property 18 333 161 14 555 401 7 970 450 7 038 700
Investment in subsidiaries – – 1 914 836 1 643 730
Loans to group companies – – 1 929 999 1 179 999
Goodwill 95 703 95 703 95 703 95 703
Derivative instruments 37 789 17 671 34 577 10 071
Property, plant and equipment 823 508 403 427
Current assets 482 378 337 196 156 669 113 890
Trade and other receivables 262 811 162 373 81 692 57 619
Cash and cash equivalents 219 567 174 823 74 977 56 271
18 949 854 15 006 479 12 102 637 10 082 520
EQUITY AND LIABILITIES
Equity 9 335 372 7 541 124 7 962 405 6 400 083
Stated capital 5 283 107 5 079 588 5 326 056 5 079 588
Reserves 1 919 969 774 425 2 636 349 1 320 495
Foreign currency translation reserve 200 193 109 757 – –
Total equity attributable to equity shareholders of the 7 403 269 5 963 770 7 962 405 6 400 083
Company owners of parent
Non-controlling interests 1 932 103 1 577 354 – –
Non-current liabilities 7 905 533 5 372 421 2 844 928 1 840 171
Interest-bearing borrowings 7 904 963 5 370 741 2 894 928 1 839 015
Derivative instruments – 1 156 – 1 156
Deferred taxation 570 524 – –
Current liabilities 1 708 949 2 092 934 1 295 304 1 842 266
Short-term portion of interest-bearing borrowings 1 369 891 1 893 700 1 233 343 1 757 152
Trade and other payables 333 881 191 371 61 961 85 114
Deferred taxation – 7 863 – –
Current tax payable 5 177 – – –
Total equity and liabilities 18 949 854 15 006 479 12 102 637 10 082 520
Loan to value (%) 48,9 48,4 33,7 35,7
Date: 14/04/2016 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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