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Condensed unaudited consolidated interim financial statements for the six months ended 31 December 2016
RESILIENT REIT LIMITED
Incorporated in the Republic of South Africa
Reg no 2002/016851/06
JSE share code RES ISIN ZAE000209557
(Approved as a REIT by the JSE)
("Resilient" or "the group")
CONDENSED UNAUDITED CONSOLIDATED INTERIM
FINANCIAL STATEMENTS for the six months ended 31 December 2016
DIRECTORS' COMMENTARY
1 NATURE OF THE BUSINESS
Resilient is an internally asset managed Real Estate Investment Trust ("REIT")
listed on the JSE Limited. Its strategy is to invest in dominant regional
retail centres with a minimum of three anchor tenants and let predominantly
to national retailers. A core competency is the successful development of
new malls and extensions to existing malls.
Resilient also invests in listed and offshore property related assets.
2 DISTRIBUTABLE EARNINGS AND COMMENTARY ON RESULTS
The dividend of 270,22 cents per share declared for the interim period ended
December 2016 represents a 16,2% increase over the 232,46 cents per share
of the comparable prior period. The growth was achieved due to a solid
performance by the South African property portfolio and continued
outperformance by the listed holdings. Resilient also benefited from
attractive currency rates previously locked-in on its offshore dividend
income from its holdings in Greenbay, Hammerson, Nepi and Rockcastle.
Results from the Nigerian property portfolio, although relatively small,
were disappointing.
Retail sales growth in the first four months of the interim period was
pedestrian, however, the November and December performances were better
with November benefiting from the Black Friday promotions. Retail sales growth
of 6,2% was achieved compared to the previous comparative period. Pleasing
growth of 9,9% was achieved at The Galleria which saw H&M, Pick n Pay and
a number of national fashion retailers as new entrants to the mall.
The comparable sales growth per province is set out below:
Percentage of
Comparable SA properties
sales growth by value
Northern Cape (0,3)% 2,6%
KwaZulu-Natal 4,9% 24,4%
North West 5,3% 6,2%
Mpumalanga 5,5% 6,0%
Limpopo 6,1% 29,7%
Eastern Cape 8,1% 4,1%
Gauteng 8,7% 27,0%
The figures for Diamond Pavilion and I'langa Mall were excluded as both malls
were undergoing substantial extensions and were therefore not comparable.
The Northern Cape performance is solely attributable to Village Mall Kathu that
showed good growth in December with improved prospects in its target market due
to a recovery in base metal prices. Boardwalk Inkwazi in KwaZulu-Natal was
negatively affected by the impact of the drought in the surrounding timber and
sugar cane farming areas and the closure of the Richards Bay Minerals operation.
The drought has abated and the new Fairbreeze mineral sands mining operation
near Mtunzini bodes well for the area. Circus Triangle returned to growth
following the opening of a competing mall and has retained its position as the
dominant retail destination in Mthatha.
3 PROPERTY ACQUISITIONS AND EXTENSIONS
Resilient increased its share of Mafikeng Mall by 6% to 72% at a yield of 8%.
The scope of the extension to Boardwalk Inkwazi was increased to accommodate
an expansion of the entertainment offering and the relocation of House & Home.
This relocation will allow for an increase in the fashion offering. The
enlarged Food Lover's Market is trading and the fit-out and refurbishment
of Woolworths is underway.
The extension to Diamond Pavilion to accommodate the enlargement of Edgars and
Woolworths and a net additional 187 parking bays was completed in November 2016.
The expanded Edgars store is trading and the refurbishment and fit-out of the
expanded Woolworths store will be completed by March 2017.
The first phase of the 17 396m2 GLA expansion of I'langa Mall was completed on
schedule and Game and Pick n Pay are trading in their new stores. The next
phase which includes the opening of H&M is onschedule for opening in
April 2017. The final phase of the extensions which will introduce a
substantial entertainment offering is scheduled for completion in September 2017.
The refurbishment and redevelopment of Limpopo Mall is in progress. This will
result in a reduction in the size of Pick n Pay, a substantial expansion of
the fashion offering as well as the right-sizing of a number of national
fashion retailers.
A small extension to introduce H&M to Mall of the North has commenced and a
further extension to expand the entertainment offering is being evaluated.
Transfer of the 50% interest in Mams Mall has been delayed by administrative
inertia at the local authority. Construction will commence once transfer has
been effected. The existing shopping centre with a GLA of 17 333m2 will be
extensively redeveloped. A total GLA of 70 000m2 is planned which will include
at least four anchor tenants and major national retailers. Resilient will
partially finance the co-developer. Management forecasts a yield of
approximately 8% on Resilient's cost of R650 million.
Resilient is awaiting transfer of the last portion of land which will
facilitate the extension of the existing 29 644m2 GLA Irene Village Mall to
an 80 000m2 GLA regional mall. Earthworks are 60% complete. The board
previously approved the development at a yield of 7% on the anticipated
cost of R1,5 billion.
The extensions to Mafikeng Mall, The Grove and Tzaneen Lifestyle Centre remain
dependent on various approvals, particularly plan approvals by local authorities.
4 RESILIENT AFRICA
Resilient owns 60,94% of this joint venture for the development of malls in
Nigeria in partnership with Shoprite Checkers.
Asaba Mall with a GLA of 7 728m2 opened on schedule in November 2016 with
Shoprite reporting strong trading. In total 2 922m2 remained uncommitted
at December 2016. Resilient had advanced R951 million to Resilient Africa with
additional commitments totalling R185 million at December 2016.
Despite an improvement in the oil price, trading conditions in Nigeria remain
challenging largely due to the weak Naira and currency controls. Rentals remain
under pressure. Further developments will be postponed until the economy
recovers sufficiently to provide an acceptable return.
Resilient Africa accepted a 7-year facility of USD45 million that is secured
against Asaba Mall, Delta Mall and Owerri Mall. The interest rate is 90-day USD
Libor plus 6,25%. This interest rate includes the premium for Nigerian country
risk and there is no recourse to Resilient's South African balance sheet. The
facility has not been drawn as yet.
5 LISTED PORTFOLIO
Dec 2016 Jun 2016
Number of Fair value Number of Fair value
Counter shares R'000 shares R'000
Fortress A (FFA) 8 320 000 137 862 27 670 000 436 909
Fortress B (FFB) 172 930 000 5 590 827 165 400 000 5 927 936
Greenbay (GRP)* * 671 300 000 926 394
Nepi (NEP) 28 640 000 4 553 760 28 290 000 4 752 720
10 282 449 12 043 959
Greenbay (GRP)* 1 344 650 000 2 137 994 *
Hammerson (HMN)# 15 500 000 1 489 085 16 000 000 1 688 356
Rockcastle (ROC)^ 195 400 000 6 741 300 191 450 000 6 606 940
20 650 828 20 339 255
* Resilient increased its interest in Greenbay to 27% and treated it as an
associate (equity accounted) at Dec 2016. At Jun 2016 the investment was
fair valued.
# The Hammerson position is held through equity derivatives.
^ Rockcastle was treated as an associate (equity accounted) and was thus
not fair valued in the financial statements.
The board's policy is to hedge its foreign currency exposure to equity
investments (Greenbay, Hammerson, Nepi and Rockcastle) to achieve a
neutral effect on the first year's distribution. At the date of this
report, the following hedges were in place:
Foreign
exchange Foreign
ZAR fair value fair value of exchange
of investment investment hedged
'000 '000 '000 Exchange rate
Greenbay R2 137 994 GBP126 180 GBP37 000 GBP - R17,53
Hammerson R1 489 085 GBP87 883 GBP62 689 GBP - R19,29
Nepi R4 553 760 EUR315 106 EUR34 120 EUR - R15,62
Rockcastle R6 741 300 USD490 630 USD152 236 USD - R14,36
R14 922 139
In total, 28,6% of Resilient's offshore equity exposure is hedged. The
main purpose is to align the funding risk profile to both the currency and
income streams of the group's offshore holdings. The result is that 28,6%
of these investments are funded at the interest rates applicable to the
currencies of the investments.
6 BROAD-BASED BLACK ECONOMIC EMPOWERMENT ("BBBEE")
In line with shareholders' approval, Resilient provided R500 million of
financial assistance to The Siyakha 2 Education Trust to enable it to acquire
4 629 629 Resilient shares at a price of R108 per share. The Trust is a
charitable trust established for the promotion of black education. Resilient
has supported the establishment of the Katlego Business Trust which has as
its objective the provision of financial support to black owned businesses
associated with the group.
7 VACANCIES
Vacancies remained unchanged at 1,8% compared to June 2016. Vacancies in Arbour
Crossing increased to 17,7% to accommodate space set aside for a new gymnasium
which will absorb the bulk of the available space.
8 FACILITIES AND INTEREST RATE DERIVATIVES
A total of R1,345 billion (3-year notes: R974 million; 5-year notes:
R371 million) was raised under the Domestic Medium Term Note ("DMTN")
Programme and R724 million of notes were repaid during the interim period.
Resilient accepted 5-, 6- and 7-year facilities from Libfin of R270 million
each.
In anticipation of the R1,7 billion of funding expiring in the next 12 months,
Resilient has raised a further R650 million under its DMTN programme during
February 2017. New bank finance of R500 million has been approved and Resilient
intends rolling its existing expiring bank facilities for the remaining
financing requirements.
Average
Amount margin
Facility expiry R'million over Jibar
Jun 2017 965 1,46%
Jun 2018 2 279 1,45%
Jun 2019 2 650 1,50%
Jun 2020 3 134 1,68%
Jun 2021 900 1,72%
Jun 2022 641 1,79%
Jun 2023 270 1,70%
Jun 2024 270 1,80%
11 109 1,58%
Amount Average
Interest rate swap expiry R'million swap rate
Jun 2019 800 7,18%
Jun 2020 880 6,31%
Jun 2021 820 7,88%
Jun 2022 500 8,09%
Jun 2023 - -
Jun 2024 - -
Jun 2025 100 7,78%
3 100 7,28%
Amount Average
Interest rate cap expiry R'million cap rate
Jun 2020 300 7,54%
Jun 2021 300 7,92%
Jun 2022 - -
Jun 2023 500 7,77%
Jun 2024 1 100 7,98%
Jun 2025 - -
Jun 2026 - -
Jun 2027 200 8,07%
2 400 7,88%
Amount
Variable rate instruments R'000
Loans to BEE vehicles (3 460 291)
Loans to co-owners (344 565)
Cash and cash equivalents (28 107)
Hammerson equity derivative (405 527)
Interest-bearing borrowings
(including gross-up of Hammerson equity derivative) 11 200 263
Currency derivatives (4 576 944)
Capital commitments contracted for 984 703
3 369 532
Total interest rate derivatives 5 500 000
Percentage hedged 163,2%
Capital expenditure approved by the board 2 141 000
Percentage hedged inclusive of approved capital expenditure 99,8%
The all-in weighted average cost of funding of Resilient was 8,87% at Dec 2016
and the average hedge term was 4,54 years.
The information contained in notes 2, 4, 7, 8 and the "Fair value information"
section of note 9 has been compiled using proportionate consolidation. This
results in Resilient accounting for its share of the assets and liabilities
of Resilient Africa and property investments that are not held in undivided
shares (Arbour Crossing, The Galleria and Mafikeng Mall). It furthermore
recognises the Greenbay and Rockcastle investments at fair value and the
Hammerson equity derivative position on a gross basis.
9 SUMMARY OF FINANCIAL PERFORMANCE
Dec 2016 Jun 2016 Dec 2015 Jun 2015
Dividend (cents per share) 270,22 256,27 232,46 205,05
Shares in issue and used
for dividend per share
calculation 401 260 209 393 970 580 385 443 448 376 747 796
Fair value information
Net asset value per share R84,16 R84,47 R83,75 R72,52
Loan-to-value ratio* 23,7% 21,0% 21,0% 17,1%
Net property expense ratio 17,1% 16,0% 17,4% 14,0%
Gross property expense ratio 36,4% 36,2% 37,2% 34,2%
Net total expense ratio 14,8% 15,0% 15,8% 14,5%
Gross total expense ratio 28,7% 30,0% 30,8% 29,9%
IFRS accounting
Net asset value per share R77,45 R77,31 R75,16 R68,85
* The loan-to-value ratio is calculated by dividing total interest-bearing
borrowings adjusted for cash on hand by the total of investments in property,
listed securities and loans advanced.
Fair value information
SUMMARISED STATEMENT OF FINANCIAL POSITION
Dec 2016 Jun 2016 Dec 2015
R'000 R'000 R'000
ASSETS
Investment property 19 472 850 18 555 006 17 453 067
Investment property
under development 707 651 834 371 1 023 975
Investments 20 650 828 20 339 255 20 064 284
Resilient Share Purchase Trust loans 787 435 479 610 563 012
Loans to BEE vehicles 3 460 291 2 750 986 2 835 793
Loans to co-owners 344 565 375 769 294 546
Current assets 567 771 466 522 525 534
Total assets 45 991 391 43 801 519 42 760 211
EQUITY AND LIABILITIES
Total equity attributable to
equity holders 33 768 684 33 276 865 32 282 158
Non-controlling interests 96 493 38 445 25 325
Interest-bearing borrowings
net of cash on hand 10 766 629 9 088 126 8 873 322
Deferred tax 968 512 918 245 758 008
Amounts owing to non-controlling
shareholders 32 367 98 867 143 575
Current liabilities 358 706 380 971 677 823
Total equity and liabilities 45 991 391 43 801 519 42 760 211
SUMMARISED STATEMENT OF
COMPREHENSIVE INCOME (6 months) (12 months) (6 months)
Recoveries and contractual
rental revenue 1 115 374 2 079 081 1 026 233
Property operating expenses (406 262) (751 751) (381 446)
Distributable income from investments 400 471 618 251 290 777
Fair value gain on investment property,
investments and currency derivatives 2 724 204 5 076 217 4 693 170
Administrative expenses (52 102) (96 131) (42 030)
Foreign exchange (losses)/gains (10 788) (17 060) 7 217
Profit before net finance costs/income 3 770 897 6 908 607 5 593 921
Net finance (costs)/income (103 016) (98 921) 177 518
Profit before income tax 3 667 881 6 809 686 5 771 439
Income tax (49 433) (54 451) 105 857
Profit for the period 3 618 448 6 755 235 5 877 296
Non-controlling interests 1 730 (14 056) 528
Profit for the period attributable to
equity holders 3 620 178 6 741 179 5 877 824
RECONCILIATION OF FAIR VALUE INFORMATION TO IFRS DISCLOSURE
Profit for the period attributable to equity
holders of the company
- fair value information 3 620 178 6 741 179 5 877 824
Carrying value of associates
- Greenbay 1 976 877 - -
- Rockcastle 4 212 707 3 788 851 3 231 812
Fair value of investments
- Greenbay (2 137 994) - -
- Rockcastle (6 741 300) (6 606 940) (6 545 495)
Profit for the period attributable to equity
holders of the company
- IFRS disclosure 930 468 3 923 090 2 564 141
10 PROSPECTS
Resilient's strong tenant profile, quality assets and conservative approach to
risk management(gearing, interest rate and currency hedging, sources and tenure
of funding) has protected the group from volatility in a world characterised by
increased uncertainty.
Dividend income from foreign listed holdings is hedged in line with the
following policy:
- hedge 100% of the dividends to be received in the following 12 months;
- hedge 67% of the dividends to be received in months 13 to 24; and
- hedge 33% of the dividends to be received in months 25 to 36.
In line with this policy the following hedges are currently in place:
Greenbay Hammerson Nepi Rockcastle
GBP GBP EUR USD
Forward rate against ZAR:
Jun 2017 R21,01 R22,23 R18,65 R16,69
Forward rate against ZAR:
Dec 2017 R19,71 R19,35 R17,49 R15,50
Forward rate against ZAR:
Jun 2018 R20,45 R19,99 R18,28 R16,11
Forward rate against ZAR:
Dec 2018 R21,22 R20,85 R19,03 R16,55
Forward rate against ZAR:
Jun 2019 R22,01 R21,53 R19,89 R17,18
Resilient's distributions are forecast to increase by between 15% and 17% for
the 2017 financial year. The growth is based on the assumptions that a stable
macro-economic environment will prevail, no major corporate failures will occur
and that tenants will be able to absorb the recovery of rising utility costs
and municipal rates. Budgeted rental income was based on contractual
escalations and market-related renewals. This forecast has not been audited
or reviewed by Resilient's auditors.
As stated in the June 2016 integrated report, the board's intention is to have
up to 50% of total direct and indirect property assets as offshore assets. As
at December 2016, 39,4% of the group's total direct and indirect property
assets were offshore assets (based on fair value). With the challenges
currently experienced in Nigeria, the board is considering other direct
investment opportunities which meet the criteria of owning dominant regional
malls to achieve this goal.
By order of the board
Des de Beer Nick Hanekom
Managing director Financial director
Johannesburg - 2 February 2017
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Audited Unaudited
Dec 2016 Jun 2016 Dec 2015
R'000 R'000 R'000
ASSETS
Non-current assets 42 501 790 40 051 411 37 600 749
Investment property 20 560 078 19 499 061 18 173 608
Straight-lining of rental
revenue adjustment 371 750 378 036 334 488
Investment property
under development 716 834 955 803 1 339 429
Investment in associates 6 189 584 3 788 851 3 231 812
Investments 10 282 449 12 043 959 11 042 228
Resilient Share Purchase
Trust loans 765 567 466 510 547 096
Loans to BEE vehicles 3 460 291 2 750 986 2 788 713
Loans to co-owners 155 237 168 205 143 375
Current assets 1 185 851 1 054 725 1 348 593
Resilient Share Purchase
Trust loans 21 868 13 100 15 916
Loans to BEE vehicles - - 47 080
Loans to co-owners 139 771 178 647 139 074
Trade and other receivables 579 783 493 724 549 826
Hammerson equity derivative 405 527 324 128 492 425
Cash and cash equivalents 38 902 45 126 104 272
Total assets 43 687 641 41 106 136 38 949 342
EQUITY AND LIABILITIES
Total equity attributable
to equity holders 31 078 974 30 458 776 28 968 475
Stated capital 13 521 054 12 712 894 11 616 582
Currency translation reserve 76 907 193 838 287 073
Reserves 17 481 013 17 552 044 17 064 820
Non-controlling interests 408 447 386 354 399 777
Total equity 31 487 421 30 845 130 29 368 252
Total liabilities 12 200 220 10 261 006 9 581 090
Non-current liabilities 10 119 474 8 308 255 7 977 937
Interest-bearing borrowings 8 037 951 6 235 994 6 097 007
Deferred tax 968 487 918 215 752 647
Amounts owing to non-controlling
shareholders 1 113 036 1 154 046 1 128 283
Current liabilities 2 080 746 1 952 751 1 603 153
Trade and other payables 375 854 396 681 694 019
Income tax payable - 839 839
Interest-bearing borrowings 1 704 892 1 555 231 908 295
Total equity and liabilities 43 687 641 41 106 136 38 949 342
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Audited Unaudited
for the six for the for the six
months year months
ended ended ended
Dec 2016 Jun 2016 Dec 2015
Income statement R'000 R'000 R'000
Net rental and related revenue 736 793 1 448 858 688 090
Recoveries and contractual
rental revenue 1 176 266 2 185 226 1 074 525
Straight-lining of rental
revenue adjustment (5 473) 58 263 14 459
Rental revenue 1 170 793 2 243 489 1 088 984
Property operating expenses (434 000) (794 631) (400 894)
Income from investments 240 952 364 619 178 711
Fair value (loss)/gain on investment
property, investments and currency
derivatives (275 160) 2 321 652 1 897 620
Fair value gain on
investment property 13 018 566 290 124
Adjustment resulting from
straight-lining ofrental revenue 5 473 (58 263) (14 459)
Fair value (loss)/gain
on investments (661 070) 2 484 186 2 825 309
Fair value gain/(loss) on
currency derivatives 367 419 (670 561) (913 354)
Administrative expenses (57 220) (104 575) (45 101)
Foreign exchange (losses)/gains (17 703) (27 995) 11 843
Profit on sale of interest
in associates 3 180 105 365 25 493
Income/(loss) from associates 475 897 60 448 (446 019)
- distributable 159 519 253 632 112 066
- non-distributable 316 378 (193 184) (558 085)
Profit before net finance
costs/income 1 106 739 4 168 372 2 310 637
Net finance (costs)/income (121 837) (121 237) 169 246
Finance income 313 289 528 490 465 581
Interest received 313 289 525 493 219 123
Fair value adjustment on
interest rate derivatives - 2 997 246 458
Finance costs (435 126) (649 727) (296 335)
Interest on borrowings (453 679) (730 505) (339 362)
Capitalised interest 51 343 80 778 43 027
Fair value adjustment on
interest rate derivatives (32 790) - -
Profit before income tax 984 902 4 047 135 2 479 883
Income tax (49 433) (59 827) 105 857
Profit for the period 935 469 3 987 308 2 585 740
Other comprehensive (loss)/income
net of tax
Items that may subsequently be
reclassified to profit or loss
Exchange differences on translation
of foreign operations (163 107) 256 463 359 749
Total comprehensive income
for the period 772 362 4 243 771 2 945 489
Profit for the period
attributable to:
Equity holders of the company 930 468 3 923 090 2 564 141
Non-controlling interests 5 001 64 218 21 599
935 469 3 987 308 2 585 740
Total comprehensive income for
the period attributable to:
Equity holders of the company 824 325 4 093 875 2 803 884
Non-controlling interests (51 963) 149 896 141 605
772 362 4 243 771 2 945 489
Basic earnings per share (cents) 234,87 1 023,61 676,44
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Audited Unaudited
for the six for the for the six
months year months
ended ended ended
Dec 2016 Jun 2016 Dec 2015
R'000 R'000 R'000
Cash (outflow)/inflow from
operating activities (218 555) (294 616) 70 048
Cash outflow from investing
activities (2 547 447) (3 685 301) (2 108 584)
Cash inflow from financing
activities 2 759 778 3 979 877 2 097 642
(Decrease)/increase in cash and
cash equivalents (6 224) (40) 59 106
Cash and cash equivalents
at beginning of period 45 126 45 166 45 166
Cash and cash equivalents at
end of period 38 902 45 126 104 272
Cash and cash equivalents
consist of:
Current accounts 38 902 45 126 104 272
The net cash outflow from operating activities results mainly from the group
distributing scrip dividends received, the antecedent dividend adjustment
and dividends accrued for but not yet received.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Currency Equity
trans attributable Non-
Stated lation to equity controlling Total
capital reserve Reserves holders interests equity
Unaudited R'000 R'000 R'000 R'000 R'000 R'000
Balance at
Jun 2015 10 616 875 40 113 15 280 417 25 937 405 279 340 26 216 745
Issue of
shares 999 707 999 707 999 707
Exchange
differences on
translation of
foreign
operations 239 743 239 743 120 006 359 749
Profit for the
period 2 564 141 2 564 141 21 599 2 585 740
Dividends paid (772 521) (772 521) (21 168) (793 689)
Transfer to
currency translation
reserve 7 217 (7 217) - -
Balance at
Dec 2015 11 616 582 287 073 17 064 820 28 968 475 399 777 29 368 252
Issue of
shares 1 096 312 1 096 312 1 096 312
Equity contributed
by non-controlling
shareholders 209 209
Exchange
differences on
translation of
foreign
operations (68 958) (68 958) (34 328) (103 286)
Profit for the
period 1 358 949 1 358 949 42 619 1 401 568
Dividends paid (896 002) (896 002) (21 923) (917 925)
Transfer to currency
translation
reserve (24 277) 24 277 - -
Balance at
Jun 2016 12 712 894 193 838 17 552 044 30 458 776 386 354 30 845 130
Issue of
shares 808 160 808 160 808 160
- issue of 2 660 000
shares on
1 Sep 2016 308 367 308 367 308 367
- issue of 4 629 629
shares on
15 Dec 2016 499 793 499 793 499 793
Equity contributed
by non-controlling
shareholders 108 577 108 577
Acquisition of
additional interest
in subsidiaries (2 659) (2 659) (13 213) (15 872)
Exchange
differences on
translation of
foreign
operations (106 143) (106 143) (56 964) (163 107)
Profit for the
period 930 468 930 468 5 001 935 469
Dividends paid (1 009 628) (1 009 628) (21 308)(1 030 936)
Transfer to
currency
translation
reserve (10 788) 10 788 - -
Balance at Dec
2016 13 521 054 76 907 17 481 013 13 078 974 408 447 31 487 421
NOTES
1 PREPARATION AND ACCOUNTING POLICIES
The condensed unaudited consolidated interim financial statements 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, the
JSE Limited Listings Requirements and the requirements of the Companies Act
of South Africa. This report complies with the SA REIT Association Best
Practice Recommendations. This report was compiled under the supervision
of Nick Hanekom CA(SA), the financial director.
The accounting policies applied in the preparation of the condensed
unaudited consolidated interim financial statements are in terms of IFRS
and are consistent with the accounting policies applied in the preparation
of the previous consolidated financial statements, with the exception of the
adoption of new and revised standards which became effective during the period.
The group's investment properties are valued internally by the directors at
interim reporting periods and externally by an independent valuer for
year-end reporting. In terms of IAS 40: Investment Property and IFRS 7:
Financial Instruments: Disclosure, the group's investment properties are
measured at fair value and are categorised as level 3 investments. In terms of
IAS 39: Financial Instruments: Recognition and measurement and IFRS 7, the
group's currency and interest rate derivatives as well as the Hammerson
equity derivative are measured at fair value through profit or loss and
are categorised as level 2 investments. In terms of IAS 39, investments are
measured at fair value being the quoted closing price at the reporting date
and are categorised as level 1 investments. There were no transfers between
levels 1, 2 and 3 during the period. The valuation methods applied are
consistent with those applied in preparing the previous consolidated
financial statements.
The directors are not aware of any matters or circumstances arising subsequent
to December 2016 that require any additional disclosure or adjustment to the
financial statements.
The condensed interim financial statements have not been audited or reviewed by
Resilient's auditors.
2 LEASE EXPIRY PROFILE
Based on
Based on contractual
Lease expiry rentable area rental revenue
Vacant 1,8%
Jun 2017 9,2% 8,9%
Jun 2018 16,9% 17,0%
Jun 2019 15,7% 18,0%
Jun 2020 15,3% 17,4%
Jun 2021 17,8% 19,7%
> Jun 2021 23,3% 19,0%
100,0% 100,0%
3 SEGMENTAL ANALYSIS
Unaudited Audited Unaudited
for the six for the for the six
months year months
ended ended ended
Dec 2016 Jun 2016 Dec 2015
R'000 R'000 R'000
Total assets
Retail: South Africa 19 797 457 18 986 266 18 272 260
Retail: Nigeria 1 923 320 1 880 638 1 775 228
Corporate: South Africa 21 935 518 20 131 192 18 851 890
Corporate: Nigeria 31 346 108 040 49 964
43 687 641 41 106 136 38 949 342
Rental revenue
Retail: South Africa 1 123 657 2 162 237 1 065 810
Retail: Nigeria 47 136 81 252 23 174
Profit for the period
Retail: South Africa 728 818 1 765 566 661 186
Retail: Nigeria 23 029 171 886 12 569
Corporate: South Africa 255 591 2 141 904 1 922 099
Corporate: Nigeria (71 969) (92 048) (10 114)
935 469 3 987 308 2 585 740
Reconciliation of profit for the
period to dividend declared
Profit for the period 935 469 3 987 308 2 585 740
Fair value gain on
investment property (13 018) (566 290) (124)
Fair value loss/(gain)
on investments 661 070 (2 484 186) (2 825 309)
Fair value (gain)/loss on
currency derivatives (367 419) 670 561 913 354
Foreign exchange losses/(gains) 17 703 27 995 (11 843)
Profit on sale of interest
in associates (3 180) (105 365) (25 493)
Non-distributable (income)/loss
from associates (316 378) 193 184 558 085
Fair value adjustment on
interest rate derivatives 32 790 (2 997) (246 458)
Income tax 49 433 59 827 (105 857)
Non-controlling interests (7 697) (32 048) (17 383)
Antecedent dividend 13 836 31 497 14 870
Dividends accrued 81 676 126 144 56 420
Amount available for distribution
under best practice 1 084 285 1 905 630 896 002
Dividend declared - interim (1 084 285) (896 002) (896 002)
Dividend declared - final (1 009 628)
- - -
The methodology applied in calculating the dividend is consistent with that of
the prior periods.
Reconciliation of profit for the period to headline earnings
Basic earnings - profit for
the period attributable to
equity holders 930 468 3 923 090 2 564 141
Adjusted for: (18 234) (590 034) 13 646
- fair value (gain)/loss on
investment property (18 491) (508 027) 14 335
- profit on sale of interest in
associates (3 180) (105 365) -
- income tax effect 3 437 23 358 (689)
Headline earnings 912 234 3 333 056 2 577 787
Headline earnings per share (cents) 230,27 869,66 680,04
Basic earnings per share and headline earnings per share are based on the
weighted average of 396 162 013 (Jun 2016: 383 261 155; Dec 2015: 379 063 486)
shares in issue during the period.
Resilient has no dilutionary instruments in issue.
4 PAYMENT OF INTERIM DIVIDEND
The board has approved and notice is hereby given of an interim dividend of
270,22 cents per share for the six months ended 31 December 2016.
The dividend is payable to Resilient shareholders in accordance with the
timetable set out below:
Last date to trade cum dividend Tuesday, 28 February 2017
Shares trade ex dividend Wednesday, 1 March 2017
Record date Friday, 3 March 2017
Payment date Monday, 6 March 2017
Share certificates may not be dematerialised or rematerialised between
Wednesday, 1 March 2017 and Friday, 3 March 2017, both days inclusive.
In respect of dematerialised shareholders, the dividend will be transferred
to the CSDP accounts/broker accounts on Monday, 6 March 2017. Certificated
shareholders' dividend payments will be posted on or about Monday, 6 March 2017.
An announcement informing shareholders of the tax treatment of the dividend
will be released separately on SENS.
Directors Thembi Chagonda (chairperson); Des de Beer*; Andries de Lange*;
Nick Hanekom*;Bryan Hopkins; Johann Kriek*; Dawn Marole; Protas Phili;
Umsha Reddy; Barry Stuhler^; Barry van Wyk
(*executive director; ^non-independent)
Changes to the board of directors JJ Njeke and Marthin Greyling retired
from the board on 31 October 2016.
Company secretary Monica Muller
Registered address 4th Floor, Rivonia Village, Rivonia Boulevard,
Rivonia, 2191
Transfer secretaries Link Market Services South Africa
Proprietary Limited
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein, 2001
Sponsor Java Capital
www.resilient.co.za
Date: 02/02/2017 03:34:00 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
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