Wrap Text
Unaudited condensed consolidated interim results for the six months ended 31 March 2017
Gemgrow Properties Ltd
(previously Synergy Income Fund Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2007/032604/06)
JSE share code: GPA ISIN: ZAE0000223269
JSE share code: GPB ISIN: ZAE0000223277
(Granted REIT status with the JSE)
(“Gemgrow” or “the company” or “the group”)
Unaudited condensed consolidated interim results
for six months ended 31 March 2017
Financial highlights
Acquisition of R477m concluded at an average yield of 11,85%
Loan to value ratio of 22,6%
In excess of six times cash cover on A share dividend
Interim dividend on A and B shares on track with the forecast as
per circular
Dividend growth of 12,0% to 35,99 cents per B share compared to the
dividends per share over the six months ended 31 March 2016
Nature of business
Gemgrow is a specialist high yield, high growth Real Estate Investment
Trust (“REIT”) holding a diverse portfolio of office, retail and
industrial properties. In addition to the 29 properties that it
holds directly, as at 31 March 2017, Gemgrow holds a further 100
properties through its wholly-owned subsidiary, Cumulative Properties
Limited (“Cumulative”). The combined portfolio comprises 129 properties,
located in all nine provinces of South Africa, valued at R4,3 billion.
The company’s main focus is on paying above market-related income returns
to its shareholders on a sustainable basis. This is achieved through
escalating rentals, satisfactory renewal of leases with existing tenants,
renting of vacant space within the property portfolio, managing and
reducing, where possible, costs associated with the property portfolio
and by acquiring revenue enhancing properties.
Background
Synergy Income Fund Limited (“Synergy”) was incorporated as a public
company on 13 November 2007, and listed as a property loan stock company
on the Main Board of the JSE under the “Real Estate – Real Estate Holdings
and Development” sector on 14 December 2011. With effect from 1 July 2013,
Synergy converted from a property loan stock company to a REIT and
accordingly changed its sector classification to the “Retail REITs”
sector on the JSE.
Synergy listed on the JSE with a portfolio valued at R280 million,
subsequently growing to comprise 14 shopping centres valued in excess
of R2,4 billion as at 30 September 2016.
With effect from 1 October 2016, Synergy repositioned itself as a specialist
high yielding, high growth diversified REIT with a portfolio comprising
retail, office and industrial assets, by way of the following
inter-conditional steps:
* Synergy acquired the entire issued share capital of Vukile Asset Management
Proprietary Limited (“VAM”) from Vukile Property Fund Limited (“Vukile”),
resulting in the effective internalisation of Synergy’s asset management
function;
* the exchange of Synergy’s entire portfolio of 14 retail properties for a
Vukile portfolio of properties comprising 29 high yielding retail, office
and industrial assets;
* the acquisition by Synergy of the entire issued share capital of Cumulative,
a subsidiary of Arrowhead Properties Limited (“Arrowhead”) that owns 100 high
yielding retail, office and industrial assets;
* an amendment of Synergy’s memorandum of incorporation to reflect a revised
year-end of 30 September and the payment of quarterly as opposed to six-monthly
dividends;
* the reconstitution of Synergy’s board of directors;
* Synergy was renamed Gemgrow Properties Limited (“Gemgrow”); (collectively
“the transaction”).
Following the implementation of the transaction, which saw Gemgrow issue
22 945 522 B shares to Vukile and 271 412 267 B shares to the Arrowhead,
Arrowhead holds 61,7% of the issued Gemgrow B shares (approximately
55,2% of Gemgrow’s issued share capital) and Vukile holding 29,5% of the
Gemgrow B shares (and 27,4% of Gemgrow’s total issued share capital).
In accordance with International Financial Reporting Standards (“IFRS”),
income in respect of the respective parts of the transaction have been
accounted for from the following effective dates:
* 1 October 2016 for the exchange of Synergy’s entire portfolio of
14 retail properties for the Vukile portfolio of properties comprising
29 high yielding retail, office and industrial assets;
* 25 October 2016 for the effective internalisation of Synergy’s asset
management function;
* 25 October 2016 for the acquisition by Synergy of the entire issued
share capital of Cumulative.
The Vukile asset exchange and Cumulative share acquisition were accounted
for as Asset acquisitions, whilst the acquisition of VAM was accounted for
as a business combination.
In respect of the acquisition of VAM:
* The purchase consideration for the acquisition of VAM was
R160 618 654 settled by the issue of 29 945 522 shares at the ruling
price of R7 per share on the date of the transaction.
* The net value of the assets and liabilities acquired on 30 September
2016 amounts to zero, a breakdown of which is reflected as follows:
Description Amounts
(R’000)
Trade and other receivables 3 099
Current tax asset 126
Cash and cash equivalents 146
Total assets 3 371
Trade and other payables 3 125
Loans from shareholders 102
Dividends payable 144
Total liabilities 3 371
Net assets NIL
* The resultant goodwill was R160 618 654, representing the cost of acquiring
the asset management contracts which have since been internalised.
The transaction has resulted in the company owning a reconstituted property
portfolio encompassing 129 office, industrial and retail assets with a value
of R4,3 billion, vastly different from the 14 retail assets valued at
R2,4 billion held prior to the transaction. Consequently, a comparison of
the financial results of the company for the first six months following the
transaction, with the financial results of the company for the same period
last year on a like for like basis will not be meaningful.
The circular issued on 26 September 2016, regarding the transaction contained
a forecast for the year-ended 30 September 2017 (the "forecast"). The forecast is the
relevant financial information for current shareholders of Gemgrow and has been
reported on by the independent reporting accountants, Grant Thornton Johannesburg
Partnership Chartered Accountants. Shareholders are advised that the distributable
income contained in the forecast is expected to be met.
Commentary
Overview of portfolio
* At 31 March 2017, Gemgrow owned 129 properties valued at R4,3 billion, of which
retail comprised 14%, office 37% and industrial 49% based on gross lettable area
(“GLA”) of the company.
* The average gross monthly rental per square metre per sector is R77,93 for retail,
R104,26 for office and R41,54 for industrial respectively.
* Vacancies reduced from 7,73% to 7,65% during the six months ended 31 March 2017.
* The total GLA of the portfolio is 692 510m2. During the period, contracted leases
in respect of 81 813m2 expired and 56 894m2 (70%) of this GLA was renewed. Of the
remaining 24 919m2, a further 14 161m2 was re-let to new tenants. In total 87% of
the GLA of leases that expired during the period were renewed to existing tenants
or re-let to new tenants.
* The current average lease rental escalations are 8,2%, 8,1% and 8,4% for retail,
office and industrial properties respectively.
* The overall step up escalation on new leases was 3%. The step up escalations on
renewed leases were 7% for retail and 4% for office and a negative 1% for industrial.
Step up escalations were in line with expectations.
Six month letting report
Total Let
(m2) (m2)
As at 1 October 2016 692 713 639 160
Acquisitions — —
Disposals — —
Net adjustments (203) 32
Adjusted totals 692 510 639 192
Net gain/(loss) — 354
As at 31 March 2017 692 510 639 546
Vacant Let Vacant
(m2) (%) (%)
As at 1 October 2016 53 553 92,27 7,73
Acquisitions —
Disposals —
Net adjustments (235)
Adjusted totals 53 318 92,30 7,70
Net gain/(loss) (354)
As at 31 March 2017 52 964 92,35 7,65
Income statement
The reason for the period-on-period variance is due to the reconstituted portfolio
being vastly different from the portfolio previously owned in the prior year.
Statement of financial position
Investment properties
The company owned a portfolio of 129 retail, industrial and office properties valued
at R4,3 billion at 31 March 2017, located in all nine provinces in South Africa. The
average value per property as at 31 March 2017 was R33,6 million.
Analysis of movement in investment property
Gemgrow portfolio
No. of
buildings R'000
Balance at the beginning of the period 14 2 451 435
Acquisitions, additions and fair value
adjustments 29 2 434 765
Disposals (14) (2 451 435)
Balance at the end of the period 29 2 434 765
Cumulative portfolio*
No. of
buildings R'000
Balance at the beginning of the year — —
Acquisitions, additions and fair value
adjustments 100 1 904 921
Disposals — —
Balance at the end of the period 100 1 904 921
Total
No. of
buildings R'000
Balance at the beginning of the year 14 2 451 435
Acquisitions, additions and fair value
adjustments 129 4 339 686
Disposals (14) (2 451 435)
Balance at the end of the period 129 4 339 686
* Gemgrow’s shareholding in Cumulative was 100,0% at 31 March 2017.
The value of investment property has increased from R2,4 billion at 30 September
2016 to R4,3 billion at 31 March 2017. The increase was attributable to an asset
exchange of 14 retail assets at R2,4 billion in exchange for 29 retail, office and
industrial assets valued at R2,4 billion. The Company also acquired a 100% holding
in Cumulative, holding 100 properties valued at R1,9 billion, in exchange for the
issue of B shares in the company.
Acquisitions and disposals
Post the implementation of the transaction on 1 October 2016, the Company made no
further acquisitions or disposals during the six month period to 31 March 2017.
Loans to executives pursuant to the transaction
During the period under review pursuant to the transaction and for purposes of
incentivising certain executives, loans of R162,9 million were issued to these
executives. The recipients include the executive directors of Gemgrow. The loans
bear interest at a rate equal to the dividend of the company for the period ending
30 September 2017.
Trade and other receivables
Trade receivables, deposits, other receivables and payments in advance increased
from R40,5 million to R51,8 million. The balance outstanding has increased from the
prior year as a result of the enlarged property portfolio. During the period under
review, no bad debts have been written off, while a provision for bad debts of
R5,2 million was raised.
Secured financial liabilities
The loans of R974 million measured against investment properties of R4,3 billion
represents a loan to value of 22,6%. The interest rate swaps of R410 million and
the fixed rate loans of R237 million resulted in interest on R647 million of the
total R974 million being fixed. This equates to 66,4% of the total borrowings.
The effective interest rate for the six month period ended 31 March 2017 was 9,39%.
Fixed One-month Three-month
Maturity rate % Jibar margin % Jibar margin %
May 2017 9,14 — —
May 2017 8,36 — —
May 2017 — 2,30 —
May 2017 — 1,65 —
June 2017 — — —
September 2017 — — —
October 2018 — — —
September 2019 — — 2,35
September 2019 — — —
Total exposure
Capital
Prime rate 2017
Maturity margin % R’000
May 2017 90 000
May 2017 — 146 705
May 2017 — 28 295
May 2017 — 25 043
June 2017 minus 1,5 234 990
September 2017 minus 1,6 50 000
October 2018 minus 1,5 200 674
September 2019 — 139 000
September 2019 minus 1,1 59 000
Total exposure 973 707
(Excluding loan initiation fees and fair value adjustments on swaps.)
Gemgrow has further entered into interest rate swaps to hedge its exposure to
fluctuations in interest rates of its debt as follows:
* an interest rate swap over R60 million until 1 June 2017;
* an interest rate swap over R50 million until 1 June 2017;
* an interest rate swap over R50 million until 19 February 2019;
* an interest rate swap over R40 million until 1 July 2019;
* an interest rate swap over R40 million until 1 July 2019;
* an interest rate swap over R50 million until 1 September 2019;
* an interest rate swap over R40 million until 19 September 2019; and
* an interest rate swap over R80 million until 30 September 2019.
Loans to the value of R290 million are expiring on 31 May 2017. The company has agreed
with the loan provider to extend the tenure to 31 July 2017, whilst discussions are
ongoing to re-finance this facility on a long-term basis. In addition, loans to the
value of R285 million are expiring by the end of the financial year. Management is
in the process of re-negotiating these loans.
Prospects
The company has secured acquisitions on two transactions to the value of
R477 million. The first transaction is a retail portfolio of R330 million
situated in Louis Trichardt which was acquired at a 12% forward yield as
reported on SENS on 16 May 2017. The second transaction is a diversified
portfolio valued at R147 million acquired at an 11,5% forward yield. Both
acquisitions are conditional upon the fulfilment of various conditions precedent.
Projected 2017 dividend per share
The company is on track to meet its dividend forecast that was included in the
circular issued to shareholders on 26 September 2016. This projection that the
forecast will be met by the company has not been reported on by the independent
reporting accountants, Grant Thornton Johannesburg Partnership Charted Accountants.
31 March 2017 31 March 2016
Dividend per Gemgrow A share (cents) 49,70 47,32
Dividend per Gemgrow B share (cents) 35,99 32,16
Gemgrow A shares in issue 47 352 203 47 352 203
Gemgrow B shares in issue 400 710 459 106 352 670
Net asset value per A share at reporting
date (cents)* 994 1 169
Net asset value per B share at reporting
date (cents) 814 855
* The net asset value per Gemgrow A share has been calculated on the 60-day volume
weighted average trading price as at 31 March 2017 limited to the combined net asset
value in accordance with the provisions of Gemgrow’s MOI.
Payment of dividend for the quarter ended 31 March 2017
The board of directors (“the Board”) has approved a gross dividend (dividend
number 2) of 24,84563 cents per A share and 18,14880 cents per B share for the
quarter ended 31 March 2017 in accordance with the timetable set out below:
2017
Last date to trade cum distribution Tuesday, 6 June
Shares trade ex distribution Wednesday, 7 June
Record date Friday, 9 June
Payment date Monday, 12 June
Share certificates may not be dematerialised or rematerialised between Wednesday,
7 June 2017 and Friday, 9 June 2017, both days inclusive.
The dividend will be transferred to dematerialised shareholders CSDP/broker
accounts on Monday, 12 June 2017. Certificated shareholder’s dividend payments
will be paid to certificated shareholder’s bank accounts on Monday, 12 June 2017.
In accordance with Gemgrow’s status as a REIT, shareholders are advised that
the dividends meet the requirements of a “qualifying distribution” for the
purposes of section 25BB of the Income Tax Act, No. 58 of 1962 (“Income Tax Act”).
The dividends on the shares will be deemed to be dividends, for South African
tax purposes, in terms of section 25BB of the Income Tax Act.
The dividends received by or accrued to South African tax residents must be
included in the gross income of such shareholders and will not be exempt from
income tax (in terms of the exclusion to the general dividend exemption,
contained in paragraph (aa) of section 10(1)(k)(i) of the Income Tax Act)
because they are dividends distributed by a REIT. These dividends are, however,
exempt from dividend withholding tax in the hands of South African tax resident
shareholders, provided that the South African resident shareholders provided the
following forms to their Central Securities Depository Participant (“CSDP”) or
broker, as the case may be, in respect of uncertificated shares, or the company,
in respect of certificated shares:
a) a declaration that the dividends are exempt from dividends tax; and
b) a written undertaking to inform the CSDP, broker or the company, as the case
may be, should the circumstances affecting the exemption change or the
beneficial owner cease to be the beneficial owner,
both in the form prescribed by the Commissioner for the South African Revenue
Service. Shareholders are advised to contact their CSDP, broker or the company,
as the case may be, to arrange for the abovementioned documents to be submitted
prior to payment of the dividends, if such documents have not already been
submitted.
Dividends received by non-resident shareholders will not be taxable as income and
instead will be treated as ordinary dividends which is exempt from income tax in
terms of the general dividend exemption in section 10(1)(k)(i) of the Income Tax
Act. On 22 February 2017 the dividends withholding tax was increased from 15% to
20% and accordingly, any dividends received by a non-resident from a REIT will be
subject to dividend withholding tax at 20%, unless the rate is reduced in terms of
any applicable agreement for the avoidance of double taxation (“DTA”) between
South Africa and the country of residence of the shareholders. Assuming dividend
withholding tax will be withheld at a rate of 20%, the net dividend amount due
to non-resident shareholders is 19,87650 cents per A share and 14,51904 cents
per B share. A reduced dividend withholding rate in terms of the applicable DTA,
may only be relied on if the non-resident shareholder has provided the following
forms to their CSDP or broker, as the case may be, in respect of uncertificated
shares, or the company, in respect of certificated shares:
a) a declaration that the dividends are subject to a reduced rate as a result of
the application of a DTA; and
b) a written undertaking to inform their CSDP, broker or the company, as the case
may be, should the circumstances affecting the reduced rate change or the
beneficial owner cease to be the beneficial owner,
both in the form prescribed by the Commissioner for the South African Revenue
Service. Non-resident shareholders are advised to contact their CSDP, broker or
the company, as the case may be, to arrange for the abovementioned documents to
be submitted prior to payment of the distribution if such documents have not
already been submitted, if applicable.
Shareholders are encouraged to consult their professional advisors should they be
in any doubt as to the appropriate action to take.
* A ordinary shares in issue at the date of declaration of this dividend: 47 352 203.
* B ordinary shares in issue at the date of declaration of this dividend: 400 710 459.
Gemgrow’s income tax reference number: 9068/723/17/1
Events after reporting period
The 6 000 000 Gemgrow B shares issued to the late Mr Gerald Leissner
were sold on 4 April 2017 for a purchase consideration of R41,83 million to settle
his loan due to Cumulative amounting to R41,81 million.
Dividend declaration after reporting date
In line with IAS 10 Events after the Reporting Period, the declaration of the dividends
occurred after the end of the reporting period, resulting in a non-adjusting event
which is not recognised in the financial statements.
Litigation statement
There are no legal or arbitration proceedings, including any proceedings that are
pending or threatened, of which Gemgrow is aware, that may have or have had in the
recent past, being the previous six months, a material effect on the group’s financial
position.
Basis of preparation
The unaudited condensed consolidated interim results for the six months ended
31 March 2017 have not been reviewed or reported on by the group’s auditors,
Grant Thornton.
The financial statements have been prepared in accordance with the requirements of
International Financial Reporting Standards, the SAICA Financial Reporting Guides
as issued by the Accounting Practices Committee, IAS 34: Interim Financial Reporting,
the JSE Listings Requirements and the requirements of the Companies Act 71 of 2008.
These results have been prepared under the supervision of J Limalia, CA(SA), Gemgrow’s
Chief Financial Officer.
The accounting policies adopted are consistent with those applied in the preparation of
the financial statements for the year ended 30 September 2016.
By order of the Board
17 May 2017
Directors: Gregory Kinross* (Chairperson), Mark Kaplan (CEO), Alon
Kirkel (COO), Junaid Limalia (CFO), Clifford Abrams*, Arnold Basserabie*
and Ayesha Rehman*.
* Independent non-executive.
All directors are South African. All the directors, with the exception
of Arnold Basserabie and Mark Kaplan, have been appointed on 22 December
2016. Mr Kaplan was appointed on 13 January 2017 and Mr Basserabie was
appointed on 14 February 2017.
Registered office: 2nd Floor, 18 Melrose Boulevard, Melrose Arch, Melrose,
Johannesburg, 2196; PO Box 685, Melrose Arch, 2076
Transfer secretaries: Computershare Investor Services Proprietary
Limited
Sponsor: Java Capital
Company secretary: CIS Company Secretaries Proprietary Limited
Website: www.gemgrow.co.za
Condensed consolidated statement of comprehensive income
Unaudited Audited Audited
for the six for the for the six
months ended year ended months ended
31 March 31 March 30 September
R’000/Audited 2017 2016 2016
Rental income 314 907 347 654 181 404
Straight-line rental income
accrual — 51 845 (16 404)
Total revenue 314 907 399 499 165 000
Property expenses (125 209) (148 380) (80 010)
Administration and corporate
costs (5 939) (3 210) (1 708)
Net operating profit 183 759 247 909 83 282
Changes in fair values 89 (57 474) 64 483
Loss on sale of investment
properties — — (2 397)
Cost of strategic repositioning — — (971)
Profit from operations 183 848 190 435 144 397
Finance charges (46 407) (84 908) (46 221)
Finance income 10 964 1 628 1 229
Profit before taxation 148 405 107 155 99 405
Taxation — 61 110
Profit for the period 148 405 107 216 99 515
Other comprehensive income — 609 (3 833)
148 405 107 825 95 682
Condensed consolidated statement of financial position
Unaudited at Audited at Audited at
31 March 31 March 30 September
R’000/Audited 2017 2016 2016
Assets
Non-current assets 4 665 294 2 442 539 2 613
Investment property 4 339 685 2 441 574 —
Fair value of property
portfolio for accounting
purposes 4 333 104 2 371 602 —
Straight line rental income
accrual 6 581 69 972 —
Property, plant and equipment 80 — —
Loans to executives 162 898 — —
Goodwill 160 619 — —
Deferred capital expenditure — — 601
Derivative instruments — 622 —
Deferred tax asset 2 012 343 2 012
Current assets 159 602 53 055 64 357
Trade and other receivables 51 781 27 298 40 512
Derivative financial instrument — 141 107
Cash and cash equivalents 107 821 25 616 23 738
Non-current assets held for
sale — — 2 451 436
Total assets 4 824 896 2 495 594 2 518 406
Equity and liabilities
Shareholders interest 3 743 124 1 463 357 1 491 493
Stated capital 3 184 042 953 410 942 472
Reserves 559 082 42 021 55 085
Other components of equity — 467 926 493 936
Other non-current liabilities 403 732 976 954 367 406
Secured financial liabilities 398 254 976 016 361 853
Derivative instruments 5 478 938 5 553
Current liabilities 678 040 55 283 659 507
Trade and other payables 103 007 55 283 84 340
Secured financial liabilities 575 033 — 575 047
Derivative instruments — — 120
Total equity and liabilities 4 824 896 2 495 594 2 518 406
Condensed consolidated statement of changes in equity
Stated Retained
R’000 capital income
Balance at 31 March 2016 953 410 42 021
Dividends paid — (56 608)
Change in fair value of investment properties — (48 078)
Transfer from other components of equity — 18 237
Costs of strategic repositioning (10 937) —
Other comprehensive income — —
Revaluation of cash flow hedges — —
Total comprehensive income for the period — 99 515
Balance at 30 September 2016 942 473 55 087
Issue of shares 2 241 569 —
Dividends paid — (138 344)
Total comprehensive income for the year — 148 405
Balance at 31 March 2017 3 184 042 65 148
Other
components
R’000 of equity Total
Balance at 31 March 2016 467 926 1 463 357
Dividends paid — (56 608)
Change in fair value of investment properties 48 078 —
Transfer from other components of equity (18 237) —
Costs of strategic repositioning — (10 937)
Other comprehensive income — —
Revaluation of cash flow hedges (3 833) (3 833)
Total comprehensive income for the period — 99 515
Balance at 30 September 2016 493 934 1 491 494
Issue of shares — 2 241 569
Dividends paid — (138 344)
Total comprehensive income for the year — 148 405
Balance at 31 March 2017 493 934 3 743 124
Condensed consolidated statement of cash flows
Unaudited Audited Audited
for the six for the for the six
months ended year ended months ended
31 March 31 March 30 September
R’000/Audited 2017 2016 2016
Net cash utilised from
operating activities 37 195 39 701 2 270
Cash generated from operations 210 982 204 466 103 479
Finance charges paid (46 407) (109 461) (45 830)
Interest received 10 964 1 628 1 229
Dividends paid (138 344) (56 932) (56 608)
Net cash utilised in investing
activities (3 048) (25 528) 35 219
Acquisition of investment
property (2 966) (25 528) (17 627)
Proceeds from disposal of
investment property — — 53 447
Deferred capital expenditure — — (601)
Acquisition of property, plant
and equipment (82) — —
Net cash generated from
financing activities 49 936 5 423 (39 367)
Proceeds from issue of share
capital 13 936 — —
Cost of conversion of
debentures — (1 098) —
Proceeds from financial
liabilities 36 000 6 521 (39 367)
Net movement in cash and cash
equivalents 84 083 19 596 (1 878)
Cash and cash equivalents at
the beginning of the period 23 738 6 020 25 616
Cash and cash equivalents at
the end of the period 107 821 25 616 23 738
Condensed segmental analysis for the six months ended 31 March 2017
Geographical
The entity has three reportable segments based on the geographic split
of the country which are the entity’s strategic business segments. The
entity’s executive directors review internal management reports on a
monthly basis and all segments greater than 10% are considered strategic.
All segments are in South Africa. There are no single major tenants. The
following summary describes the operations in each of the company’s
reportable segments.
KwaZulu-
R’000 Gauteng Natal
31 March 2017
Contractual rental income 207 107 34 463
Straight-line rental income — —
Operating and administration costs (78 479) (11 852)
Net operating profit 128 628 22 611
Finance income 237 33
Finance charges (163) —
Net operating income/(loss) 128 702 22 644
Changes in fair values — —
Reportable segment profit before tax 128 702 22 644
Taxation — —
Reportable segment profit after tax 128 702 22 644
Reportable segment assets 2 761 242 507 760
Reportable segment liabilities (39 962) (14 751)
2 721 280 493 009
Western
R’000 Cape Other Total
31 March 2017
Contractual rental income 46 339 26 998 314 907
Straight-line rental income — — —
Operating and administration costs (18 457) (22 360) (131 148)
Net operating profit 27 882 4 638 183 759
Finance income — 10 694 10 964
Finance charges (84) (46 160) (46 407)
Net operating income/(loss) 27 798 (30 828) 148 316
Changes in fair values — 89 89
Reportable segment profit before tax 27 798 (30 739) 148 405
Taxation — — —
Reportable segment profit after tax 27 798 (30 739) 148 405
Reportable segment assets 595 478 960 416 4 824 896
Reportable segment liabilities (10 597) (1 016 462) (1 081 772)
584 881 (56 046) 3 743 124
Sectoral
R’000 Commercial Industrial
Contractual rental income 172 677 89 468
Operating and administration costs (65 301) (35 632)
Net operating profit 107 376 53 836
Finance income 182 53
Finance charges (236) (6)
Net operating income/(loss) 107 322 53 883
Changes in fair values — —
Reportable segment profit/(loss) before tax 107 322 53 883
Taxation — —
Reportable segment profit after tax 107 322 53 883
Reportable segment assets 2 427 301 1 342 556
Reportable segment liabilities (24 693) (16 826)
2 402 608 1 325 730
R’000 Retail Overheads Total
Contractual rental income 52 762 — 314 907
Operating and administration costs (22 981) (7 234) (131 148)
Net operating profit 29 781 (7 234) 183 759
Finance income 69 10 660 10 964
Finance charges — (46 165) (46 407)
Net operating income/(loss) 29 850 (42 739) 148 316
Changes in fair values — 89 89
Reportable segment profit/(loss)
before tax 29 850 (42 650) 148 405
Taxation — — —
Reportable segment profit after tax 29 850 (42 650) 148 405
Reportable segment assets 643 211 411 828 4 824 896
Reportable segment liabilities (50 054) (990 199) (1 081 772)
593 157 (578 371) 3 743 124
Reconciliation of earnings to headline earnings
Unaudited Audited Audited
for the six for the for the six
months ended year ended months ended
31 March 31 March 30 September
R’000/Audited 2017 2016 2016
Profit for the period
attributable to Gemgrow
shareholders 148 405 107 216 99 515
Debenture interest — — —
Earnings 148 405 107 216 99 515
Changes in fair value of
investment property — 57 699 (64 483)
Loss on sale of investment
properties — — 2 397
Headline profit attributable to
shareholders 148 405 164 915 37 429
Reconciliation of headline earnings to distributable earnings
Unaudited Audited Audited
for the six for the for the six
months ended year ended months ended
31 March 31 March 30 September
R’000/Audited 2017 2016 2016
Headline profit attributable to
shareholders 148 405 164 915 37 429
Cost of strategic repositioning — — 971
Changes in fair values of
listed securities and financial
instruments (89) — —
Straight-line rental income
accrual — (51 845) 16 404
Amortisation of loan raising
costs — 754 391
Deferred tax — (61) (110)
Gain on the ineffective portion
of fair value of derivative
financial instruments — (225) —
Pre-effective date distribution 19 433 — —
Distributable earnings
attributable to shareholders 167 749 113 538 55 085
Number of A shares in issue 47 352 203 47 352 203 47 352 203
Number of B shares in issue 400 710 459 106 352 670 106 352 670
Weighted average number of A
shares in issue 47 352 203 47 352 203 47 352 203
Weighted average number of B
shares in issue 400 710 459 106 352 670 106 352 670
Basic and diluted earnings per
A share (cents) 33,12 69,75 64,74
Basic and diluted earnings per
B share (cents) 33,12 69,75 64,74
Headline and diluted headline
earnings per A share (cents) 33,12 107,29 24,35
Headline and diluted headline
earnings per B share (cents) 33,12 107,29 24,35
Note: A statutory headlines earnings per share (HPS) reconciliation has not
been performed due to the earnings being equal to headline earnings for
the period.
Date: 17/05/2017 07:25:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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