Wrap Text
Reviewed provisional condensed consolidated results for the year ended 29 February 2016
Delta Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/005129/06)
Share code: DLT ISIN: ZAE000172052
("Delta" or "the Fund" or "the Group")
(REIT status approved)
Reviewed provisional condensed consolidated results for the year ended 29 February 2016
Highlights:
- Achieved forecast 8% increase in full year distribution to 90.79 cents per share
- Successfully concluded the R1.26 billion Redefine portfolio acquisition
- Improvement of loan to value to ca.42% from 47.2% at year end
- 83% of debt hedged
- Industry leading Level 2 B-BBEE rated listed property company
- Successful renewal of 80% of 2015 expiring leases
Consolidated Statement of Comprehensive Income
Group
2016 2015
R '000 R '000
Revenue
Contractual rental income 1,220,632 940,623
Straight line rental income accrual 26,950 68,584
1,247,582 1,009,207
Property operating expenses (322,051) (244,323)
Net property rental and related income 925,531 764,884
Other income 7,266 13,590
Profit on disposal of listed investments - 20,425
Loss on foreign exchange differences (57,834) (12,366)
Gain from bargain purchase - 127
Administration expenses (82,744) (51,008)
Net operating profit 792,219 735,652
Fair value adjustments 259,124 458,985
Profit from operations 1,051,343 1,194,637
Finance costs (412,713) (316,380)
Interest income 26,593 3,965
Amortisation of debenture premium - 264,883
Share of profit in associate 33,537 -
Cancellation fee (11,542) (41,200)
Impairment of development right - (15,582)
Share of loss in joint venture (2) -
Profit before debenture interest and taxation 687,216 1,090,323
Debenture interest - (177,044)
Profit before taxation 687,216 913,279
Taxation - (2,211)
Profit for the year from continuing operations 687,216 911,068
Loss from discontinued operations (38,089) (45,070)
Profit for the year 649,127 865,998
Other comprehensive income:
Items that may be reclassified subsequently to profit and loss
Exchange gain on translation of foreign subsidiary 83,649 63,813
Reclassification of foreign currency translation reserve on loss of control of
subsidiary (43,843) -
Share of foreign currency translation reserve of associate (43,796) -
Taxation related to components of other comprehensive income - -
Total comprehensive income for the year 645,137 929,811
Profit for the year attributable to:
Owners of the parent:
Profit for the year from continuing operations 687,216 911,068
Loss for the year from discontinued operations (36,011) (25,648)
651,205 885,420
Non-controlling interest:
Loss for the year from discontinued operations (2,078) (19,422)
649,127 865,998
Total comprehensive income
Owners of the parent 607,409 912,605
Non-controlling interest 37,728 17,206
645,137 929,811
Reconciliation of earnings from continuing operations:
Profit for the year from continuing operations 687,216 911,068
Debenture interest - 177,044
Earnings from continuing operations 687,216 1,088,112
Loss for the year from discontinued operations (36,011) (25,648)
Profit for the year attributable to owners of the parent 651,205 1,062,464
Reconciliation of headline earnings from continuing operations:
Profit for the year from continuing operations 687,216 1,088,112
Change in fair value of investment property (373,286) (485,224)
Change in fair value of investment property (304,200) (485,224)
Change in fair value of investment property of associate (69,086) -
Gain from bargain purchase - (127)
Impairment of development right net of tax - 15,582
Impairment of development right - 15,582
Tax effect - -
Headline earnings from continuing operations 313,930 618,343
Reconciliation of headline earnings from continuing and discontinued operations:
Profit for the year from continuing and discontinued operations 651,205 1,062,464
Change in fair value of investment property (373,286) (542,838)
Change in fair value of investment property (304,200) (570,208)
Change in fair value of investment property of associate (69,086) -
Deferred taxation - 27,370
Gain from bargain purchase - (127)
Impairment of development right net of tax - 15,582
Impairment of development right - 15,582
Tax effect - -
Non-controlling interest - 27,419
Headline earnings from continuing and discontinued operations 277,919 562,500
Reconciliation of distributable earnings attributable to owners of the parent:
Headline earnings from continuing operations 313,930 613,980
Fair value loss on derivative financial instruments 45,077 20,990
Straight line rental income accrual (26,950) (68,584)
Antecedent interest 9,010 3,425
Cancellation fee 11,542 41,200
Deferred taxation - other adjustments - 4,592
Fair value loss on investments - 5,249
Dividend income 36,779 18,247
Share of profit in associate (33,537) -
Share of loss in joint venture 2 -
Unrealised loss on foreign exchange difference 57,794 12,366
Amortisation of debenture premium - (264,883)
Profit on disposal of listed investments - (20,425)
Accrued distribution from listed investments - 11,905
Amortisation of debt structuring fee 6,141 -
Change in fair value of investment property of associate 69,086
Distributable earnings attributable to owners of the parent 488,874 382,425
Less: distribution declared 487,962 382,425
- Interim 232,608 180,469
- Year end (declared after 29 February 2016) 255,354 201,956
Retained distribution 912 -
Weighted average number of shares in issue
- Year-end 535,182,853 458,409,836
Actual number of shares in issue
- Interim 542,316,733 451,042,442
- Year-end 533,097,436 458,409,836
Basic and diluted earnings per share (cents)
Basic and diluted earnings per share from continuing operations 128.41 242.74
Basic and diluted earnings per share from discontinued operations (6.73) (5.72)
121.68 237.02
Basic and diluted headline earnings per share (cents)
Basic and diluted headline earnings per share from continuing operations 58.66 137.94
Basic and diluted headline earnings per share from discontinued operations (6.73) (12.46)
51.93 125.48
Distribution per share (cents)
- Interim 42.89 40.01
- Year-end (declared after 29 February 2016) 47.90 44.06
90.79 84.07
Consolidated Statement of Financial Position at 29 February 2016
Group
2016 2015
R '000 R '000
Assets
Non-Current Assets
Investment property 8,684,700 8,393,900
Fair value of property portfolio 8,500,183 8,213,035
Straight line rental income accrual 184,517 180,865
Property, plant and equipment 4,331 2,923
Investment in associate 383,327 -
Derivative financial instruments 13,401 -
9,085,759 8,396,823
Current Assets
Loans due from related parties 77,115 -
Current tax receivable 1,153 1,153
Trade and other receivables 252,938 284,036
Derivative financial instruments 545 -
Cash and cash equivalents 187,362 60,730
519,113 345,919
Non-current assets held-for-sale 1,410,481 26,500
Assets associated with disposal group held-for-sale - 2,110,030
Total Assets 11,015,353 10,879,272
Equity and Liabilities
Share capital 3,450,593 2,778,064
Reserves 215,924 27,185
Retained income 1,990,112 1,815,732
Equity attributable to owners of the parent 5,656,629 4,620,981
Non-controlling interest - 453,190
Total Equity 5,656,629 5,074,171
Liabilities
Non-Current Liabilities
Derivative financial instruments 49,981 20,990
Interest-bearing borrowings 3,560,275 3,652,300
Cash-settled share-based payment arrangement 559 -
Deferred tax - 19
3,610,815 3,673,309
Current Liabilities
Interest-bearing borrowings 1,534,035 856,265
Trade and other payables 102,233 103,163
Derivative financial instruments 30,032 -
Bank overdraft 81,609 21
1,747,909 959,449
Liabilities associated with disposal group held-for-sale - 1,172,343
Total Liabilities 5,358,724 5,805,101
Total Equity and Liabilities 11,015,353 10,879,272
Consolidated Statement of Changes in Equity
Foreign
currency Deferred Total
Share translation considera- Total Retained shareholders' Non-controlling Total
capital reserve tion reserves income interest interest equity
R'000
Balance at 01 March 2014 317,544 - - - 924,311 1,241,855 - 1,241,855
Total comprehensive income for the year - 27,185 - 27,185 885,420 912,605 17,206 929,811
Profit for the year - - - - 885,420 885,420 (19,422) 865,998
Other comprehensive income - 27,185 - 27,185 - 27,185 36,628 63,813
Issue of linked units as consideration
for investment property 161,966 - - - - 161,966 - 161,966
Capital issue expenses (14,139) - - - - (14,139) - (14,139)
Cum distribution - number 03* (5,836) - - - - (5,836) - (5,836)
Cum distribution - number 04 and 05* (3,425) - - - - (3,425) - (3,425)
REIT conversion 2,321,954 - - - - 2,321,954 - 2,321,954
Non-controlling interest on acquisition
of disposal group - - - - - - 457,747 457,747
Transfer between equity holders - - - - 6,001 6,001 (6,001) -
Dividends paid - - - - - - (15,762) (15,762)
Balance at 01 March 2015 2,778,064 27,185 - 27,185 1,815,732 4,620,981 453,190 5,074,171
Total comprehensive income for the year - (43,796) - (43,796) 651,205 607,409 37,728 645,137
Profit for the year - - - - 651,205 651,205 (2,078) 649,127
Other comprehensive income - (43,796) - (43,796) - (43,796) 39,806 (3,990)
Loss of control of subsidiary - (27,185) - (27,185) - (27,185) (490,918) (518,103)
Issue of shares - issued as consideration
for investment property 76,950 - - - - 76,950 - 76,950
Issue of shares - issued as consideration
for cash 658,169 - - - - 658,169 - 658,169
Issue of shares - dividend reinvestment
programme 45,207 - - - - 45,207 - 45,207
Capital issue expenses (15,514) - - - - (15,514) - (15,514)
Share capital not eliminated in prior period 5,971 - - - (5,971) - - -
Share buy-back (98,254) - - - - (98,254) - (98,254)
Deferred consideration# - - 259,720 259,720 - 259,720 - 259,720
Dividends paid* - - - - (470,854) (470,854) - (470,854)
Balance at 29 February 2016 3,450,593 (43,796) 259,720 215,924 1,990,112 5,656,629 - 5,656,629
*Details of distributions 01 - 07 as announced on SENS
# Acquisition of properties to be settled by the issue of 28,857,764 shares at a fixed price of R9 per share
Consolidated Statement of Cash Flows
Group
2016 2015
R '000 R '000
Cash generated from operations 827,846 483,116
Interest received 10,227 3,965
Dividends received 36,837 -
Finance costs (374,449) (315,593)
Taxation paid - (4,914)
Dividends paid (470,854) -
Net cash from operating activities 29,607 166,574
Purchase of property, plant and equipment (4,449) (1,027)
Acquisition of investment properties (801,449) (572,108)
Capital expenditure on investment properties (304,073) (148,134)
Proceeds on disposal of investment properties 104,859 -
Loans advanced to related parties (77,115) -
Proceeds on disposal of listed securities - 348,809
Acquisition of shares in associate (9,123) -
Acquisition of shares in joint venture (2)
Net cash outflow on acquisition of subsidiary - (8,720)
Net cash from investing activities (1,091,352) (381,180)
Proceeds from issue of shares 703,376 -
Share buy-back (98,254) -
Capital issue expenses (15,514) (8,168)
Proceeds from interest-bearing borrowings 1,376,946 1,310,036
Repayment of interest-bearing borrowings (859,765) -
Repayment of other financial liabilities - (266,656)
Changes in shareholding of subsidiary - (492,335)
Debenture interest paid - (349,622)
Net cash from financing activities 1,106,789 193,255
Net movement in cash and cash equivalents 45,044 (21,351)
Cash at the beginning of the year 60,709 82,060
Total cash at the end of the year 105,753 60,709
Condensed consolidated segmental analysis
Office Admin and
Retail government Office - other Industrial corporate Total
costs
For the year ended 29 February 2016
R'000
Contractual rental income 87,875 912,667 201,134 18,956 - 1,220,632
Straight-line rental income accrual 10,051 22,363 671 (6,135) - 26,950
Property operating expenses (31,060) (213,658) (71,453) (5,880) - (322,051)
Net property rental and related income 66,865 721,373 130,351 6,942 - 925,531
Fair value adjustments (85,269) 329,648 22,095 37,726 (45,076) 259,124
- Investment property (85,269) 329,648 22,095 37,726 - 304,200
- Derivative instruments - - - - (45,076) (45,076)
Assets
Investment property 632,590 7,733,442 1,551,849 177,300 - 10,095,181
- Fair value of property portfolio 422,241 6,795,035 1,282,907 - - 8,500,183
- Straight-line rental income accrual 4,349 168,726 11,442 - - 184,517
- Investment property held for sale 206,000 769,681 257,500 177,300 - 1,410,481
Office Admin and
Retail government Office - other Industrial corporate Total
costs
For the year ended 28 February 2015
R'000
Contractual rental income 25,102 588,251 296,169 31,101 - 940,623
Straight-line rental income accrual 260 48,914 13,830 5,580 - 68,584
Property operating expenses (7,021) (136,188) (95,383) (5,731) - (244,323)
Net property rental and related income 18,341 500,977 214,616 30,950 - 764,884
Fair value adjustments (8,286) 317,817 190,365 (14,672) (52,478) 432,746
- Investment property (8,286) 317,817 190,365 (14,672) (26,239) 458,985
- Investments - - - - (5,249) (5,249)
- Derivative instruments - - - - (20,990) (20,990)
Assets
Investment property 207,800 5,206,800 2,751,400 227,900 - 8,393,900
- Fair value of property portfolio 206,622 5,061,753 2,727,088 217,572 - 8,213,035
- Investment property held for sale 1,178 145,047 24,312 10,328 - 180,865
This segmental report has been populated based on a per building classification which is in accordance with the majority tenant.
COMMENTARY:
1. Introduction
Delta is a black managed JSE listed Real Estate Investment Trust ("REIT") focussed on long-
term sovereign underpinned properties. The Fund is a level 2 B-BBEE contributor and will
continue to be the dominant sovereign listed property fund in South Africa. Delta has the
management knowledge and experience to manage the sovereign underpin and has become the
leading management team in relation to government tenanted assets.
2. Financial performance
Global economies have experienced a steady deterioration in trading conditions during the period,
with the local economy being significantly impacted by rising inflation, political uncertainty and
rising interest rates coupled with the strengthening of the US dollar against the Rand. Delta,
however, managed to remain resilient and steadfast amongst the economic challenges encountered
due to its sovereign underpin and has delivered an excellent set of results.
Delta has declared a full year distribution of 90.79 cents per share for the financial period ending 29
February 2016, representing an increase of 8% over the prior year.
Contractual rental income increased 29.8%, benefiting 7.8% from weighted average rate escalations
and 13.5% from new acquisitions. Net cost-to-income ratio was impacted by new acquisitions,
increasing from 10.2% to 12.2%, and is expected to normalise during the new financial year once
Delta takes over the management of these assets and undertakes the redevelopment work on the
Free State portfolio.
Fair value adjustment to investment properties decreased during the current year, reflecting the
change in market conditions together with the increased vacancy of the portfolio. The depreciation
of the Rand against the US dollar negatively impacted the fair value of cross currency swaps and
Dollar denominated loan resulting in an unrealised foreign exchange loss of R57.8 million.
Administration expenses increased primarily due to a R10.1 million reversal of a prior year accrual
and increase in asset management fees due to acquisitions.
Finance costs increased 30.5% during the period, driven by a combination of acquisitions and
increased cost of borrowings. The interest cover ratio, excluding occupational interest on the Free
State portfolio, improved to 2.38 from 2.17 in the prior year.
3. Property portfolio
Delta's property portfolio of R10.1 billion, consists of 100 properties with a total GLA of 813 505 m².
Assets held for sale comprise 17 properties with a total GLA of 134 754 m² and a combined value of
R1.4 billion.
The segmental and geographic breakdown of the portfolio (per tenant) at the reporting date was as
follows:
Detailed tenant breakdown – revenue
Provincial Government (30.7%)
National Government (29.0%)
General Office (16.5%)
State-Owned Enterprise (13.7%)
Retail (7.9%)
Industrial (1.8%)
Local Government (0.4%)
Detailed tenant breakdown – GLA
National Government (24.7%)
Provincial Government (23.6%)
General Office (19.5%)
State-Owned Enterprise 12.7%
Vacant (9.0%)
Retail (6.6%)
Industrial (3.5%)
Local Government (0.4%)
Geographical profile – GLA
Gauteng (36.5%)
Kwazulu-Natal (31.2%)
Free State (10.5%)
Limpopo (5.5%)
Northern Cape (4.9%)
Western Cape (4.7%)
Mpumalanga (3.1%)
Eastern Cape (2.9%)
North West (0.7%)
Geographical profile – Gross Rental
Gauteng (38.0%)
Kwazulu-Natal (24.9%)
Limpopo (10.8%)
Free State (8.4%)
Northern Cape (5.3%)
Western Cape (5.1%)
Eastern Cape (3.5%)
Mpumalanga (3.4%)
North West (0.6%)
3.1 Acquisitions and major capital projects
During the year Delta acquired 20 properties with a total GLA of 119 864m2 for R1.1 billion, at an
aggregate yield of 10.72%. Of these 14 properties related to the Free State portfolio with a
combined GLA of 77 829m2. The acquisitions were funded by a combination of debt and equity.
Delta entered into an agreement with Redefine for the acquisition of their government property
portfolio consisting of 15 properties and a total GLA of 191 668 m2 for R1.25 billion at a property
yield of 13.27%. Conditions precedent for the majority of the properties within the transaction was
approved during March 2016 and accordingly 155 230 511 shares amounting to R1.20 billion were
issued to Redefine during April 2016. The outstanding shares of 6 812 568 totalling R0.05 billion will
be issued when the conditions precedent to the final property is met.
Delta together with other landlords embarked on a significant inner-city redevelopment initiative
within the Durban central business districts (CBD). Delta is one of the largest landlords in the CBD
and its significant investment is based on the support of government for the node and the large
working harbour which secures many other tenants. The major projects undertaken comprise:
CMH House, Durban
CMH House is Delta's first major inner-city redevelopment project undertaken in Durban CBD.
This project was completed during November 2015 at an estimated cost of R156 million with a 15-
year lease signed, creating a new A grade motor dealership show room and 450 parking bays. The
additional parking bays will be predominantly let to the Liberty building tenants which has created
significant value to the Liberty building due to the shortage of parking in the CBD.
88 Field Street, Durban
This project is currently in progress with an estimated R85m spend to date and is expected to re-
establish itself as a landmark building in the Durban CBD upon completion.
3.2 Disposals
Management has earmarked 17 non-core properties, with a total GLA of 134 754 m2 and valued at
R1.4 billion, for disposal. The proceeds from disposals will either be deployed to higher yielding
assets or to reduce gearing. Sale agreements for five properties have been concluded totalling R551.3
million has been concluded at year end and management are confident the remaining assets will be
sold during the 2017 financial period.
3.3 Letting and vacancies
The lease expiry profile of the portfolio per segment based on GLA at 29 February 2016 was as
follows:
Lease expiry profile at year end February
2016 Beyond
Segment vacancies 2017 2018 2019 2020 2021 2021
Office – sovereign 5.9% 40.5% 18.9% 9.4% 6.2% 12.7% 6.4%
Office - other 13.7% 27.9% 23.3% 18.7% 9.1% 2.4% 4.9%
Retail 5.4% 13.7% 5.9% 5.9% 25.8% 1.4% 41.9%
Industrial 28.5% 3.1% 29.0% 0.0% 0.0% 39.4% 0.0%
Leases in respect of 62,515 m2 were renewed during the period, representing 79.8% of leases
expiring by February 2016 or are continuing on a month-to-month basis. The weighted average
escalation rate during the year was 7.84% and the weighted average rental per m2 was R102.89.
Vacancies increased to 8.98% of gross lettable area compared with 7.1% in 2015. Properties
earmarked for disposal is expected to reduce vacancies.
Management continues to engage with government on longer term lease renewals and is confident
that it's strategy as a specialist sovereign fund will result in the renewal of expiring leases.
4. Borrowings
Delta's loan to value ratio at financial year end has improved to 47.2% from 49.8% in the prior year,
positively influenced by disposals of non-core property and increased fair value of investment properties.
Post the Redefine transaction, the loan to value ratio has improved to ca.42%.
Management remains committed to manage Delta's gearing levels at around a 40% range.
Interest bearing borrowings increased R585.7 million due to funding requirements for new
acquisitions and capital projects. Delta's weighted average cost of debt increased from 8.10% to
8.75% due to increased market lending rates. The weighted average expiry of Delta's debt
facilities is 2.3 years, and management intends to extend the debt expiry period by either utilising proceeds
from disposals to pay down debt or refinance expiring debt facilities.
The Group concluded R1 billion worth of 3 year interest rate swaps during February 2016 at an
average rate of 8.1%, maintaining an 83:17 fixed exposure, excluding the revolving debt facilities.
The weighted average expiry of interest rate swaps and fixed debt has improved to 2.13 years
from 1.91 years at Delta's interim reporting period.
5. Share capital movements
During March 2015, the Company successfully concluded an oversubscribed capital raise of R503.2 million,
through the issue of 56,535,800 shares at an issue price of R8.90. Delta issued a further 17,415,730 shares
at R8.90 for R155.0 million in May 2015. The proceeds of these issuances were utilised to settle debt
facilities and to acquire additional assets.
Delta shareholders holding 102,877,519 shares, elected to participate in the share reinvestment alternative.
As a result, 5,222,759 additional Delta shares were issued to shareholders at R8.66 per share equating to a
total value of R45.2 million.
A total of 12,911,297 shares, amounting to R98.2 million at an average price of R7.61 per share, were bought back by Delta between August 2015
and December 2015
6. Events subsequent to the reporting period
Pursuant to the conclusion of the Redefine property acquisition, Mr A. Konig has been appointed as
a non-executive director to the board from 1 April 2016 and will remain in office for as long as
Redefine holds more than 5% of the shares in Delta.
The last property acquired as part of the Free State portfolio transferred on 14 April 2016, with the
balance having transferred before year end. This transfer will add R 34.78 million to the carrying
value of investment property and will be settled through the issue of shares and the raising of debt.
Shareholders are advised that Mr Paul Simpson has resigned as an independent non-executive director
from the board of Delta with effect from 13 May 2016. The board wishes to express their thanks to
Paul for his contribution to the Company.
7. Changes to directorate during the period
Mrs Marelise de Lange has been appointed as an independent non-executive director of Delta Property
Fund from 2 November 2015. She is the Chairperson of the Remuneration Committee, as well as a member
of the Investment Committee and the Audit, Risk and Compliance Committee. Marelise is a CA(SA) who has
more than 20 years' experience in both the financial services industry and the listed property industry,
on both the operational and financial sides.
Mr Greg Booyens resigned as Chief Financial Officer of Delta with effect from 31 December 2015.
Delta wishes to thank Greg for his contribution to the Company since 2012 and wishes him well
in his future endeavours.
Mr Shaneel Maharaj has been appointed as Chief Financial Officer of Delta Property Fund with effect
from 1 December 2015. He is a seasoned CA (SA) with an H.Dip Tax and has fifteen years' work
experience, with over 9 years spent in the listed environment.
Ms Nombuso Afolayan has been appointed as an independent non-executive director with effect
from 29 February 2016. She is currently a non-executive director of Umngeni Water and
Ithala Development Corporation and General Manager: KZN Port Operations of Transnet and has a
MBA – Finance (Masters in Business Administration) from The Regent College (University of Luton).
8. Provision of financial assistance
Delta shareholders are referred to Special Resolution Number 3 relating to the provision of direct or
indirect financial assistance in terms of Section 45 of the Companies Act, No 71 of 2008 ("the
Companies Act") to related or inter-related companies, which was approved at the annual general
meeting of Delta on 19 August 2015.
Further to the above, Delta shareholders are notified in terms of Section 45(5)(a) of the Companies
Act, that the board of directors of the Company ("the board") passed a resolution on 13 May 2016
("the board resolution") granting financial assistance to the following related companies:
- Delta Property Asset Management Proprietary Limited - R12,095,127 in the ordinary course
of business.
- MPI Property Asset Management Proprietary Limited – R6,538,444 in the ordinary course of
business.
- Somnipoint Proprietary Limited – R43,321,778 in respect of a recoverable property deposit
paid.
- Delta International Mauritius Limited – R5,072,345 in respect of a guarantee fee charged.
- Hestitrix Proprietary Limited – R235,863,904 in the ordinary course of business.
- K2014000273 Proprietary Limited – R127,373,894 in the ordinary course of business.
- 277 Vermeulen Street Properties Proprietary Limited - R13,132,127 in the ordinary course of
business.
- Hendisa Investments Proprietary Limited – R33,614 in the ordinary course of business.
- Baystone Holdings Limited – R58,432,372 in order to acquire a property.
The financial assistance provided, as detailed above, is greater than one-tenth of 1% of Delta's net
worth as at the date of the board resolution.
The board further confirms that immediately after providing the financial assistance, the Company
continues to satisfy the solvency and liquidity test as contemplated in Section 4 of the Companies
Act and that the terms and conditions of the financial assistance are fair and reasonable to the
Company.
9. Prospects
Whilst the domestic economy continues to face increasing headwinds and low economic growth, the
Board and management remain positive that Delta's defensive sovereign portfolio is well positioned
for any downturn. Delta's portfolio will not be impacted by the market conditions which impact B
grade office portfolios, due to the need for government to occupy buildings in the major CBD nodes
and Delta's majority sovereign underpin. We believe that Delta's Level 2 B-BBEE status will support
our efforts and ability to negotiate favourable longer lease terms both with government and other
empowerment sensitive tenants.
Management anticipates combined distribution growth of 7% to 8% for the year ahead, on the assumption
that trading conditions and the macroeconomic environment remains stable with no major tenant and
corporate defaults. The forecast has not been reviewed nor reported on by the Group's auditors.
10. Declaration of final dividend ("the cash dividend")
Shareholders are advised that dividend no. 7 of 47.90846 cents per share for the six months ended
29 February 2016 has been declared. The abbreviated timetable is as follows:
Declaration date Monday, 16 May 2016
Last day to trade cum-dividend Friday, 03 June 2016
Shares to trade ex-dividend Monday, 06 June 2016
Record date Friday, 10 June 2016
Payment date Monday, 13 June 2016
Shareholders may not dematerialise or rematerialise their shares between Monday, 06 June 2016
and Friday, 10 June 2016, both days included.
In accordance with Delta's status as a REIT shareholders are advised that the dividend meets the
requirements of a "qualifying distribution" for the purposes of section 25BB of the Income Tax Act,
No. 58 of 1962 ("Income Tax Act"). An announcement informing shareholders of the tax treatment
of the distributions will be released separately on SENS.
11. Basis of preparation and accounting policies
The condensed consolidated financial statements, are prepared in accordance with the JSE Limited Listings
Requirements, the framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS), the information required by 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 condensed consolidated financial
statements are in accordance with IFRS and are consistent with the accounting policies applied in
the preparation of the previous consolidated financial statements.
The condensed consolidated financial statements have been compiled under the supervision of the
Chief Financial Officer, Mr Shaneel Maharaj CA (SA)/HDiptax.
These provisional consolidated financial statements for the year ended 29 February 2016 have been
reviewed by BDO South Africa Incorporated, who expressed an unmodified review opinion.
A copy of the auditor's review report is available for inspection at the company's registered office
together with the financial statements identified in the auditor's report.
The auditors' report does not necessarily cover all of the information contained in this
announcement.
Shareholders are therefore advised that in order to obtain a full understanding of the nature of the
auditors' work they should obtain a copy of that report together with the accompanying financial
information from the registered office of the Company.
The directors take full responsibility for the preparation of the provisional report and the financial
information has been correctly extracted from the underlying financial statements.
Delta has complied with IFRS and JSE Listings Requirements by disclosing earnings and headline
earnings per share. Distribution per share has been disclosed additionally.
By order of the Board:
JB Magwaza (Chairman) SH Nomvete (Chief Executive Officer)
16 May 2016
Directors: JB Magwaza^ (Chairman), SH Nomvete* (CEO), BA Corbett* (COO), S Maharaj* (CFO), JJG
Da Costa^, N Khan^#, DN Motau^, ID Macleod^, M de Lange^, N Afolayan^, A Konig+
*Executive; ^Independent Non-Executive; #Lead Independent Director; +Non-Executive
Registered office: Silver Stream Office Park, 10 Muswell Road South, Bryanston (Postnet Suite 210,
Private Bag X21, Bryanston, 2021)
Transfer secretaries: Computershare Investor Services Proprietary Limited
Sponsor: Nedbank Corporate and Investment Banking
Date: 16/05/2016 07:10:00 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.