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REBOSIS PROPERTY FUND LIMITED - Provisional reviewed condensed consolidated results for the year end 31 August 2016

Release Date: 07/11/2016 07:33
Code(s): REB     PDF:  
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Provisional reviewed condensed consolidated results for the year end 31 August 2016

REBOSIS PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2010/003468/06)
JSE share code: REB
ISIN: ZAE000201687
(Approved as a REIT by the JSE)
(“Rebosis” or “the company”or “the Group”)

PROVISIONAL REVIEWED CONDENSED CONSOLIDATED RESULTS for the year end 31 August 2016

OUR UNDERLYING PORTFOLIO INDICATORS AT 31 AUGUST 2016 (DIRECT ASSETS OWNED)

•   4 high growth dominant regional malls
•   Includes Hemingways Mall, East London’s largest retail centre
•   National tenant profile of 86% in the retail portfolio
•   Average escalation of 7,4%

•   15 large properties well located in nodes attractive to government tenants
•   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

•   Specialised single tenant industrial warehouse
•   Triple net lease expiring on 31 December 2019
•   Lease underpinned by the international parent company which is listed on the Paris Stock Exchange
•   Average escalation of 7,0%

                                                           Retail                 Office          Industrial
Number Of Properties                                           7                      42                   2
Portfolio Valuation                                          49%                    49%                   2%
Gross Lettable Area (M²)                                     45%                    51%                   4%
Revenue                                                      45%                    53%                   2%

INVESTMENT HIGHLIGHTS

Distribution Growth
Up 8,2% to 119,45
cents per share

Growth in assets under management
29,5% to R12,8 billion

Net property income growth
10,3%

Reduction of costs to income ratio
from 13.3% to 12,5%

Reduction in vacancies
3.1%

consolidated group Assets
R19,1 billion

Sectorial by value
Retail                45%
Office                51%
Industrial             4%

Sectorial by GLA
Retail                49%
Office                55%
Industrial             2%

Geographic by GLA
UK                      30%
Western Cape            12%
Mpumalanga               1%
Eastern Cape            10%
Gauteng                 44%
KwaZulu-Natal            2%
North West               1%

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                                                    GROUP
                                                     Reviewed                  Audited
                                                    31 August                31 August
                                                         2016                     2015
                                                         R000                     R000
                                            Note                              Restated
ASSETS
Non-current assets                                 17 383 410               14 905 355
Investment property                                16 996 072               14 555 401
Goodwill                                       3      315 906                  331 775
Derivative instruments                                 70 852                   17 671
Property, plant and equipment                             580                      508
Current assets                                        561 798                  337 196
Short-term portion of derivatives                      23 486                        -
Trade and other receivables                           309 233                  162 373
Cash and cash equivalents                             229 079                  174 823
Investment properties held for sale                 1 156 698                        -
Total assets                                       19 101 906               15 242 551
EQUITY AND LIABILITIES
Equity                                              9 462 284                7 777 196
Stated capital                                 3    5 590 410                5 219 879
Retained income                                3    2 179 569                  870 206
Foreign currency translation reserve                 (73 805)                  109 757
Total equity attributable to equity
holders of the parent                               7 696 174              6 199 842
                                                                          
                                                                                 
Non-controlling interests                           1 766 110              1 577 354
                                                                         
                                                                                
Non-current liabilities                             8  170 604             5 421 372
                                                                          
                                                                                 
Interest bearing borrowings                         8 052  484             5 370 741
                                                                          
                                                                                
Derivative instruments                               118 120                   1 156
                                                                              
                                                           -                     524                       
Deferred taxation                                                                 
Current liabilities                                 1 469 018                2 092 934
Short term portion of interest
bearing borrowings                                  1 223 203                1 893 700
Trade and other payables                              244 347                  191 371
Tax payable                                             1 468                    7 863
Total equity and liabilities                       19 101 906               15 242 551

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

                                                                   GROUP
                                                      Reviewed               Audited
                                                     31 August             31 August
                                                          2016                  2015
                                                          R000                  R000
                                              Note                          Restated
REVENUE
Property portfolio                                   1 809 981             1 009 880
Contractual rental income                            1 835 767               896 124
Listed property securities
and related income                                           -                60 262
Straight line rental income accrual                   (25 786)                53 494
Net income from facilities management                   23 109                21 051
Asset management fee income                                  -                18 891
Sundry income                                            2 206                 1 707
Total revenue                                        1 835 296             1 051 529
Operating costs                                      (430 688)             (226 735)
Administration costs                                 (153 115)             (111 831)
Net operating profit                                 1 251 493               712 963
Gain on bargain purchase                                     -                53 756
Changes in fair values                               1 183 454               136 935
Profit from operations                               2 434 947               903 654
Net finance charges                                  (561 864)             (282 078)
Finance charges - secured loans                      (606 614)             (289 587)
Interest received - other                               44 750                 7 509
Profit before debenture interest
and taxation                                         1 873 083               621 576
Debenture interest                               3           -             (346 811)
Profit before taxation                               1 873 083               274 765
Taxation                                                 1 104              (13 499)
Profit form continuing operations                    1 874 187               261 266
Profit from discontinued operations                          -                 1 009
Profit for the year                                  1 874 187               262 275
Other comprehensive income
Foreign currency translation reserve                 (217 000)               177 226
Total comprehensive income                           1 657 187               439 501
Profit attributable to:
Owners of the parent                                 1 706 946               262 539
Non-controlling interests                              167 241                 (264)
Profit for the year                                  1 874 187               262 275
Total comprehensive income attributable to:
Owners of the parent                                 1 523 384               372 296
Non-controlling interests                              133 803                67 205
Total comprehensive income for the year              1 657 187               439 501
Basic and diluted earnings
per share (cents)                                2      329,68                 61,92

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                                                   GROUP
                                                     Reviewed                Audited
                                                    31 August              31 August
                                                         2016                   2015
                                                         R000                   R000
                                            Note                            Restated
Balance at beginning of period
(as previously reported)                            7 541 124              1 832 554
Restatements                                   3      236 072                      -
Balance at beginning of period (restated)           7 777 196              1 832 554
Issue of shares                                       406 205                914 938
Conversion of capital structure                3            -              3 251 209
Shares bought back                                    (11 029)                     -
Acquisition of New Frontier
Properties Limited                                          -                566 367
Shares issued to non-controlling  
interests                                              186 512                     -
Acquisition of Ascension
Properties Limited                                          -                943 782
Treasury shares                                      (24 644)                      -
Dividend paid                                  3    (529 144)              (171 155)
Total comprehensive income for the year             1 657 188                439 501
Profit for the year                                 1 874 188                262 275
Other comprehensive income
Foreign currency translation reserve                (217 000)                177 226
Balance at 31 August                                9 462 284              7 777 196

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

                                                                 GROUP
                                                      Reviewed             Audited
                                                     31 August           31 August
                                                          2016                2015
                                                          R000                R000
                                                                          Restated
Cash flows from operating activities                    47 077           (163 643)
Cash generated from operations                       1 187 234             715 917
Debenture interest paid                                      -           (432 567)
Dividend paid                                        (547 610)           (171 155)
Taxation paid                                         (23 767)                    -
Net finance charges paid                             (568 780)           (275 838)
Cash outflows from investing activities              (965 201)           (850 332)
Acquisition of investment property                   (502 604)                  -
Capital expenditure, tenant installations
and lease commissions                                (203 800)            (74 726)
Acquisition of businesses, net of cash acquired      (238 728)           (775 117)
Acquisition of listed securities and investments      (24 644)                   -
Proceeds from disposal of investment property            5 000                   -
Acquisition of property, plant and equipment             (425)               (489)
Cash inflows from financing activities                 917 164           1 127 453
Proceeds from issue of shares                          518 949             752 791
Share buy back program                                (11 029)                   -
Increase in secured financial liabilities              409 244              79 313
Proceeds from non-controlling shareholders                   -             295 349
Net movement in cash and cash equivalents                (960)             113 478
Effect of translation                                   55 216              12 495
Cash and cash equivalents at beginning of the year     174 823              48 850
Cash and cash equivalents at end of the year           229 079             174 823

COMMENTARY

INTRODUCTION
Rebosis is a JSE listed real estate investment trust (REIT) that directly owns 20 properties comprising of 4 dominant shopping centres, 15 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”or“NFP”),
which owns 3 dominant shopping centres in the UK. Rebosis also owns 59% of Ascension Properties Limited (“Ascension”), a JSE Listed REIT with 27 office
buildings and 1 industrial building.

Despite a tough domestic economic environment we are pleased to announce an exciting set of results.

FINANCIAL RESULTS

Rebosis has declared a dividend of 62,66 cents per share for the six months ended 31 August 2016. With a dividend of 56,79 cents per share for the six
months ended 29 February 2016, this amounts to total dividend of 119,45 cents for the year, an increase of 8,2%. This is in line with the 8% to 10%
guidance communicated and is based on continuing strong performance on portfolio fundamentals as well as increased income from acquisitions.

Rebosis company specific information which includes the full statement of financial position and statement of profit or loss and comprehensive income along
with operational information is included in the results presentation that can be found on the Rebosis website www.rebosis.co.za.

Property expenses for the company were again well contained with the net cost to income ratio declining to 12,5% from 13,3% in 2015.

PROPERTY PORTFOLIO
At year-end, assets under management were valued at R12,8 billion (2015: R9,8 billion). The value of the Group’s investment property portfolio was R18.1
billion (2015: R14.5 billion). The effective investment in Ascension and New Frontier was valued at R3,9 billion (2015: R2,7 billion).

The investment property portfolio for the Group of 51 properties is illustrated in the included graphs in terms of sectoral and geographical splits.

FUNDING
At 31 August 2016, the Group’s borrowings increased to R9.3 billion .The weighted average cost of borrowings for the group is 7.2% (8.9% for Rebosis
company). This includes the lower interest rates earned in the UK for New Frontier. There are currently swap/fixed rate arrangements for 80,7% of the
debt. The groups LTV is 48.8% with Rebosis company LTV which is ring-fenced from it’s subsidiaries at 34.7%. (Total Debt/Total Assets)

BASIS OF PREPARATION

The provisional reviewed condensed consolidated financial statements are prepared in accordance with the JSE Listings Requirements for provisional
reports and the requirements of the Companies Act of South Africa. The JSE Listings Requirements require provisional reports to be prepared in
accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (“IFRS”) and
the SAIcA Financial Reporting Guides as issued by the Accounting Practices committee and Financial Pronouncements as issued by Financial Reporting
Standards Council and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting. The accounting policies applied
in the preparation of the provisional reviewed condensed consolidated financial statements are in terms of IFRS and 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).

The directors are not aware of any matters or circumstances arising subsequent to 31 August 2016 that require any additional disclosure or adjustment
to the financial statements, other than as disclosed in this announcement.
These provisional reviewed condensed consolidated financial statements for the year ended 31 August 2016 have been reviewed by Grant Thornton
Johannesburg Partnership, who expressed an unmodified review conclusion thereon.

The auditor’s review report does not necessarily report on all the information contained in this announcement / financial results. Shareholders are
therefore advised that in order to obtain a full understanding of the nature of the auditor’s engagement they should obtain a copy of the auditor’s
review report together with the accompanying financial information from the issuer’s registered office. The directors take full responsibility for the
preparation of these results and confirm that the financial information has been correctly extracted from the underlying financial statements.

NOTES TO CONSOLIDATED RESULTS

1. BUSINESS COMBINATIONS
On 23 September 2015 the group acquired Houndshill Shopping Centre in Blackpool by acquiring the whole of the issued share capital in BCC Eiffel
S.a.r.l. Based on management’s judgements and estimates, 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 R54,4 million
(included in administration costs).

The following table summarises the consideration paid for BCC Eifel S.a.r.l. and fair values of the assets acquired and liabilities assumed
recognised at acquisition date.
                                                          R000
Investment property                                  2 081 868
Trade and other receivables                              3 843
Cash and cash equivalents                               37 877
Trade and other payables                              (54 883)
Borrowings                                         (1 792 101)
Fair value of net assets                               276 604
cash consideration paid                               (276 604)
Goodwill arising on acquisition                              -
Amounts recognised in the profit and
loss since acquisition:
Revenue                                                154 196
Profit after tax                                        18 075

Had BCC Eiffel S.a.r.l. been consolidated
from 1 September 2015, revenue for the year
would have been higher by R9,86 million and
profit would have been higher by R7,26 million
respectively.

Net cash outflow on acquisition of subsidiaries
consideration paid in cash                             276 604
Less cash and cash equivalents balances acquired      (37 877)
Total consideration                                    238 728
2. BASIC, DILUTED AND HEADLINE EARNINGS PER SHARE                       31 August 2016         31 August 2015
Number of shares in issue at year end                                      530 178 149            493 363 078
weighted average number of shares in issue used for the
calculation of earnings and headline earnings per share                    517 765 320            424 011 545
Reconciliation of earnings and headline earnings:                                 R000                   R000
Profit attributable to equity holders of the parent entity                   1 706 947                262 539
Adjusted for:
Change in fair value of investment properties                              (1 258 611)              (133 508)
Gain on bargain purchase                                                             -               (53 756)
Headline profit attributable to shareholders                                   448 336                 75 275
Debenture interest                                                                   -                346 811
Headline earnings attributable to shareholders                                 448 336                422 086
Basic and diluted earnings per share (cents)                                    329.68                  61.92
Headline and diluted earnings per share (cents)                                  86.59                  85.55

3. RESTATEMENT OF COMPARATIVE STATEMENT OF FINANCIAL POSITION, STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME, STATEMENT OF CHANGES IN
EQUITY AND STATEMENT OF CASH FLOWS

Following a review of the Group’s annual financial statements for the year ended 31 August 2015 by the JSE in terms of its pro-active monitoring of
financial statements process, the Group has restated the following items in the 2015 statement of financial position, statement of profit or loss and
other comprehensive income, statement of cash flows and statement of changes in equity:

(a) The Group converted its linked unit structure to an all share capital structure on 8 June 2015. A distribution was declared on 30 June 2015
amounting to R171.2 million, which was accounted for as debenture interest in the statement of profit or loss and other comprehensive income.

However, as the debentures were carried at amortised cost using the effective interest profit or loss and other rate method, debenture interest of
R140.3 million should have accrued in until the date of capital conversion on 8 June 2015. This gives rise to an error of R30.9 million on the
debenture interest line in the statement of profit or loss and other comprehensive income. Due to this, the carrying value of the debentures at the
date of conversion to share capital would have been R3.25 billion, and not the R3.11 billion as previously reported. In addition, the actual payment
to shareholders of R171.2 million should have been accounted for as a dividend in the statement of changes in equity.

(b) The Group acquired a controlling interest of 61.9% in New Frontier Properties Limited (“NFP”) during March 2015. As the Group’s share in the
net assets (mainly cash) was lower than the purchase price paid for the controlling stake, a control premium of R236 million was recognised on
consolidation of NFP. Management incorrectly concluded that as NFP did not have a business on the date of acquisition (as NFP had mainly cash and
no other assets), that the control premium should be accounted for as a day one transaction with the non-controlling shareholders, and this was
therefore debited directly to reserves in the statement of changes in equity. However, whilst NFP’s only substantial asset at the time of acquisition
was cash, NFP was a fully functioning company with a business plan, and with certain acquisitions in the pipeline, which were executed in the month
after the Group acquired its controlling stake. At the date of acquisition of the controlling stake, NFP had a primary listing on the Mauritian Stock
Exchange, with a secondary listing on AltX of the JSE. Therefore, this control premium should have been allocated to goodwill on the date of the
acquisition.

Set out below is the impact of these changes based on (a) and (b) above on the comparative statement of financial position, the comparative statement of
profit or loss and other comprehensive income and the comparative statement of changes in equity for the year ended 31 August 2015:
Statement of financial position

                                              Restated
                                           comparative       Published      Difference
                                                  2015            2015
                                               R 000’s         R 000’s         R 000’s
Group impact
Assets
Non current assets
Investment property                         14 555 401       14 555 401              -
Goodwill                                       331 775           95 703        236 072
Derivative instruments                          17 671           17 671              -
Property, plant and equipment                      508              508              -
Current assets                                 337 196          337 196              -
Total assets                                15 242 551       15 006 479        236 072
Equity and liabilities
Equity
Stated capital                               5 219   879      5 079   588      140 291
Retained income                                870   206        774   425       95 781
Foreign currency translation reserve           109   757        109   757            -
Non controlling interests                    1 577   354      1 577   354            -
Total equity                                 7 777   196      7 541   124      236 072
Long term liabilities                        5 372   421      5 372   421            -
Current liabilities                          2 092   934      2 092   934            -
Total equity and liabilities                15 242   551     15 006   479      236 072

The goodwill recognised is attributable to the retail segment and is allocated to retail assets under the segment report.

Statement of profit or loss and other comprehensive income

                                              Restated
                                           comparative       Published      Difference
                                                  2015            2015
                                               R 000’s         R 000’s         R 000’s
Group impact
Profit before debenture
interest and taxation                          621 576         621 576               -
Debenture interest                           (346 811)       (377 675)          30 864
Profit before taxation                         274 765         243 901          30 864
Taxation                                      (13 499)        (13 499)               -
Total profit for the year before
discontinued operations                        261 266         230 402          30 864
Discontinued operations                          1 009           1 009               -
Total profit for the year                      262 275         231 411          30 864
Earnings per share (cents)                       61.92           54.64
Statement of changes in equity

                                               Restated
                                            comparative      Published      Difference
                                                   2015           2015
                                                R 000’s        R 000’s         R 000’s
Group impact
Balance at 31 August 2014                     1 832 554      1 832 554               -
Issue of shares                                 914 938        914 938               -
Conversion of capital structure               3 251 209      3 110 918        140 291*
Dividend paid                                 (171 155)              -      (171 155)*
Profit for the year                             262 275        231 411         30 864*
Arising on investment in
New Frontier Properties Limited                 566 367        330 295         236 072
Arising on acquisition of
Ascension Properties Limited                    943 782        943 782               -
Foreign currency translation reserve            177 226        177 226               -
Balance at 31 August 2015                     7 777 196      7 541 124         236 072
* Net difference amounts to R Nil.

Statement of cash flows
                                               Restated
                                            comparative      Published      Difference
                                                   2015           2015
                                                R 000’s        R 000’s         R 000’s
GROUP IMPACT
Cash generated from operations                  715 917        715 917               -
Debenture interest paid                       (432 567)      (603 722)         171 155
Dividend paid                                 (171 155)              -       (171 155)
Net finance charges paid                      (275 838)      (275 838)               -
Net cash utilised in operating activities     (163 643)      (163 643)               -

4. SEGMENT REPORT
The Group classifies segments based on the type of property i.e. Commercial, Retail, Industrial, and Other. Properties can be mixed use properties.
In this instance the property will be classified according to its principle use. Accordingly, the group only has three reporting segments as set out
below. Some of the buildings do have a small retail component (normally at street level), but seldom exceeds 10% of the total GLA per building.
These operating segments are managed separately based on the nature of the operations. For each of the segments, the Group’s CEO (the group’s chief
operating decision-maker) reviews internal management reports monthly. The CEO considers earnings before taxation to be an appropriate measure of
each segment’s performance.

For the year ended 31 August 2016

                                                    Property portfolio
                                           Retail         Office     Industrial         Total     Admin and        Total
                                                                                                  corporate
                                                                                                      costs
                                             R000         R000            R000           R000          R000         R000
Property portfolio                        816 779      964 960          28 242      1 809 981             -    1 809 981
Contractual rental income                 820 280      987 972          27 515      1 835 767             -    1 835 767
Straight line rental income accrual       (3 501)     (23 012)             727       (25 786)             -     (25 786)
Net income from facilities management           -       23 109               -         23 109             -       23 109
Sundry income                               1 103           46               -          1 149         1 057        2 206
Total revenue                             817 882      988 115          28 242      1 834 239         1 057    1 835 296
Operating costs                         (195 389)    (231 889)         (3 410)      (430 688)             -    (430 688)
Administration and corporate costs              -            -               -              -     (153 115)    (153 115)
Changes in fair values                    471 084      487 384          38 764        997 232       186 222    1 183 454
Finance charges                                 -            -               -              -     (561 864)    (561 864)
Segment profit
before taxation                         1 093 577    1 243 610          63 596      2 400 783     (527 700)    1 873 083
Investment property                     8 952 372    7 934 700         109 000     16 996 072             -   16 996 072
Investment property
held for sale                                   -    1 006   698       150   000    1 156   698           -    1 156   698
Other assets                              304 001      236   390        29   940      570   331     378 805      949   136
Total assets                            8 987 237    9 131   017       288   940   18 407   195     694 711   19 101   906
Total liabilities                          70 776       95   268         5   278      171   322   9 468 300    9 639   622
For the year ended
31 August 2015

                                                    Property portfolio
                                           Retail          Office      Industrial       Total   Admin and        Total
                                                                                                corporate
                                                                                                    costs
                                             R000           R000            R000         R000        R000         R000
Property portfolio                        378 506        455 816          15 672      849 994     159 886    1 009 880
Contractual rental income                 364 587        417 808          14 105      796 500      99 624      896 124
Listed property securities income               -              -               -            -      60 262       60 262
Straight line rental income accrual        13 919         38 008           1 567       53 494           -       53 494
Net income from facilities management           -         21 051               -       21 051           -       21 051
Management fees received                        -              -               -            -      18 891       18 891
Sundry income                                 957           (15)                          941         766        1 707
Total revenue                             379 463        476 852          15 672      871 986     179 543    1 051 529
Operating costs                         (126 061)       (85 217)           (402)    (214 680)    (12 055)    (226 735)
Administration and corporate costs              -              -               -            -   (111 831)    (111 831)
Changes in fair values                   (70 353)        119 789           5 021       54 458      82 477      136 935
Gain on bargain purchase                        -              -               -            -      53 756       53 756
Finance charges                                 -              -               -            -   (282 078)    (282 078)
Segment profit before taxation            183 049        511 423          20 291      711 764    (90 188)      621 576
Investment property                     3 051 000      3 842 200         145 500    7 038 700   7 516 701   14 555 401
Other assets                              296 616         29 887          36 688      363 192     323 958      687 150
Total assets                            3 347 616      3 872 087         182 188    7 401 892   7 840 659   15 242 551
Total liabilities                          10 174         10 297               -       20 471   7 444 884   7 465 355
 
                                                              2016         2015
Non-IFRS information                                           R000         R000
Reconciliation of profit before
tax to distributable earnings:
Total segment profit before taxation (as per above)       1 873 083      621 576
Debenture interest                                                -    (346 811)
Taxation                                                      1 104     (13 499)
Profit from discontinued operations                               -        1 009
Profit for the year                                       1 874 187      262 275
Less: Portion attributable to
non-controlling interests                                 (167 241)          264
Adjusted for:
Debenture interest                                                 -     346 811
Changes in fair value                                    (1 183 454)   (136 935)
Gain on bargain purchase                                           -    (53 756)
Straight line rental accrual                                  25 786    (53 494)
Amortisation of structuring fees                               7 843       6 241
Corporate transaction costs                                   74 789         323
Antecedent interest                                           43 694      29 112
Dividend income distributed in previous periods             (78 970)           -
Anticipated distribution from listed REIT subsidiaries       136 479      79 714
Antecedent dividend on anticipated distribution                    -      33 696
Consolidation adjustments between group entities:          (100 293)      57 879
Reversal of underwriting fee income                                -      35 400
Transaction cost arising on Ascension acquisition                  -      10 568
Non-controlling interests                                          -       6 813
Effects of translation                                     (100 293)       5 098
Distributable earnings attributable
to shareholders/owners of the parent                        632 821      572 130
Dividend per share (cents)                                   119,45       110,41
H2 2016 (cents)                                               62,66        57,95
H1 2016 (cents)                                               56,79        52,46

KEY ESTIMATION UNCERTAINTIES

29% of the Group’s property portfolio is held via its subsidiary New Frontier Properties Limited (“NFP”), which is domiciled in the UK. Whilst the
outcome of the UK referendum vote on 23 June 2016 has created a period of uncertainty in relation to many factors that impact the property investment
and letting markets, its timing was such that it has not been possible for the valuers of the NFP properties to gauge its impact on values at 31
August 2016 by reference to transactions in the market. Consequently, Colliers International Valuation UK LLP (in relation to the NFP properties) has
advised that the probability that the valuation would exactly coincide with the price achieved, were there to be a sale, has reduced. This situation
is likely to remain until the number and consistency of comparable transactions in the market increases, particularly in the UK. Having consulted
with Colliers International Valuation UK LLP subsequent to the period end, Group management believes it is appropriate to adopt the valuations when
preparing these financial results.

RELATED PARTIES

Parties are considered related if one party has the ability to exercise control or significant influence over the party in making financial or
operational decisions. Related parties with whom the Group transacted during the period were:

                                                                  Group
                                                 31 August 2016           31 August 2015
                                                           R000                     R000
Amounts included in trade and other payables
Billion Asset Managers (Pty) Ltd                          3 440                    5 393
Amount included in trade and other receivables
Billion Group (Pty) Ltd                                       -                   17 763
Related party transactions
Billion Asset Managers (Pty) Ltd
Asset Management fees paid                               33 588                   25 810
Billion Property Services (Pty) Ltd
Property management fee                                  30 327                   21 120
Lease commission fee                                      2 887                      922

EVENTS AFTER REPORTING PERIOD
The directors are not aware of any material events, other than those noted below, which occurred after the reporting date and up to the date of this
report.

ACQUISITION OF SHOPPING CENTRES AND PROPERTY SERVICES BUSINESSES

With effect from 3 October 2016, Rebosis acquired 100% of Billion Property Developments (Pty) Ltd (“BPD” which owns Forest Hill City Mall
(Centurion)), Baywest City Mall (Pty) Ltd (“Baywest” which owns Baywest City Mall), Billion Asset Managers (Pty) Ltd (the asset management business)
and Billion Property Services (Pty) Ltd (the property services business) for a total consideration of R4,9 billion. The transaction as further
detailed in the circular posted to Rebosis shareholders on 2 September 2016, has been successfully consummated with Rebosis receiving 88% of the
vote in favour of all resolutions proposed for the transaction. The acquisition price of R4,9 billion will be settled by new debt facilities of R3,7
billion and an equity raise of R1,2 billion (of which R700 million is deferred over the next two years at R350 million each year). R1,5 billion of
this debt will be settled through the disposals of non-core commercial assets.

The transaction will be accounted for in terms of IFRS3 Business Combinations and a full purchase price allocation will be performed within
twelve months as allowed by the standard. Due to the fact that the release of these provisional results is so close to the effective date of the
transactions, it is not possible to make the required IFRS 3 disclosures as the initial accounting is still incomplete. This acquisition is part of
the Rebosis long-term strategy to become a more retail focused fund.

FIRM INTENTION BY REBOSIS TO MAKE AN OFFER TO ACQUIRE 100% SHARES OF ASCENSION THAT IT DOES NOT ALREADY OWN
As detailed on SENS on 27 October 2016, Ascension and Rebosis have concluded an agreement in terms of which Rebosis has given notice of its firm
intention to offer to acquire all of the Ascension A ordinary shares that Rebosis does not already own in exchange for Rebosis A ordinary shares, by
scheme of arrangement (the “scheme”), on a swap ratio of 19.34236 Rebosis A ordinary consideration shares for every 100 Ascension A shares held.

The proposed transaction will result in an enlarged market capitalisation for Rebosis, with economies of scale and enhanced liquidity. The terms of
the Rebosis A ordinary shares effectively mirror the terms of the Ascension A ordinary shares. In addition, the cash-cover ratio applicable to the
Rebosis A ordinary shares will be significantly higher than the cash-cover ratio applicable to Ascension A shares. Full details of the scheme will be
set out in a joint circular which will be distributed by Rebosis and Ascension to each of the Ascension A shareholders in due course and which will
include an independent expert report on the scheme, a notice of the general meeting of Ascension A shareholders to approve the scheme and the salient
dates and times applicable to the scheme.

DISPOSAL OF ASSETS

Disposal of assets continue for the R1.5 billion indicated to shareholders of which R1.156 billion (this includes Ascension disposals) has been
formally committed to and announced on SENS. Further offers have been received and are being considered and negotiated with the potential buyers on
the remaining R0.5bn by management. The R1.156 billion of assets committed through sale agreements have been classified as assets held for sale on the
statement of financial position.

PAYMENT OF DIVIDEND

Dividend number 12 of 62,66428 cents per share for the six months ended 31 August 2016 will be paid to the shareholders in accordance with the
abbreviated timetable set out below:

                                                              2016
Last day to trade cum dividend            Tuesday,   22   November
Securities trade ex dividend            Wednesday,   23   November
Record date                                Friday,   25   November
Payment date                               Monday,   28   November

Share certificates may not be dematerialised or rematerialised between Wednesday, 23 November 2016 and Friday, 25 November 2016, both days inclusive.
The dividend will be transferred to dematerialised shareholders CSDP accounts/brokers accounts on Monday, 28 November 2016. Certificated shareholders
dividend payments will be paid to certificated shareholders bank accounts on or about Monday, 28 November 2016.

An announcement relating to the tax treatment of the dividend will be released separately on SENS.

PROSPECTS

The Board is cognisant of the economic headwinds in SA. Its focus will be on improving the quality of the Group’s portfolio and balance sheet through
targeted disposals of commercial assets. This will reduce gearing and furthermore, the Group will take the opportunity to extend the duration and
hedging on debt falling due for refinancing.

The UK has its own set of challenges. Following its vote to leave the European Union (EU), it faces a period of uncertainty before exit, if indeed it
actually occurs, whilst negotiations between it and the other EU member countries begin. The Board fully supports the decision by New Frontier to now
target niche high quality acquisitions in countries such as Netherlands, Germany and Switzerland where it has identified opportunities.

With regards to Ascension, the Board is optimistic in being able to consummate the recently announced firm intention to acquire the remaining
Ascension A shares. This will simplify the Group structure and deliver on the promise of scale benefits.

Operationally, Rebosis will focus on realising the full benefit of the recently acquired Billion assets of Forest Hill City, Baywest Mall and the
internalisation of the management and property companies. This will have a full year financial effect on the financial results.

The Board is of the view that these strategies, together with the defensive nature of the portfolio will deliver distribution growth per share for
FY17 of between 7% and 9% above that of FY16. This forecast has not been reviewed or reported on by the company’s auditors. Rebosis uses distribution
per share as the key measure of financial performance for trading statement purposes.

By order of the Board
7 November 2016

COMPANY INFORMATION

COMPANY SECRETARY:
M Ndema

DIRECTORS:
ATM Mokgokong*† (Chairperson), SM Ngebulana (CEO), K Keshav (CFO), AM Mazwai*†, WJ Odendaal*†, NV Qangule*†, TSM Seopa*†
*Non-executive      † Independent

SPONSOR:
Java capital

TRANSFER SECRETARIES:
Computershare Investor Services Proprietary Limited

REGISTERED OFFICE:
3rd Floor, Palazzo Towers West, Montecasino Boulevard, Fourways, 2191, (PO Box 2972, Northriding, 2162)

Date: 07/11/2016 07:33:00 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.

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