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Summarised Consolidated Results For The Year End 30 June 2017
Hyprop Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/005284/06)
JSE share code: HYP
ISIN: ZAE000190724
(Approved as a REIT by the JSE)
(‘Hyprop’ or ‘the company’ or ‘the group’)
Summarised consolidated results for the year ended 30 June 2017 Audited Audited
12 months 12 months
30 June 2017 30 June 2016
R000 R000
Revenue 3 167 649 3 078 221
Investment property income 3 128 062 2 976 420
Straight-line rental income accrual 39 587 101 801
Property expenses (1 073 877) (993 861)
Net property income 2 093 772 2 084 360
Other operating expenses (78 232) (76 593)
Operating income 2 015 540 2 007 767
Net interest (336 502) (366 176)
Received 294 177 323 759
Paid (630 679) (689 935)
Net operating income 1 679 038 1 641 591
Other income 36 931
Change in fair value 983 372 1 217 049
Investment property 1 181 786 1 382 134
Straight-line rental income accrual (39 587) (101 801)
Financial guarantee (163 855)
Investment in joint venture 10 102 (10 102)
Derivative instruments (5 074) (53 182)
Loss on disposal (526)
Investment in subsidiary (2 557)
Investment property 2 031
Impairment of loan (AttAfrica) (25 377)
Impairment of goodwill (18 134)
Net income before equity-accounted investments 2 655 304 2 858 640
Share of loss from joint ventures (50 380) (41 007)
Share of income from associate 457
Dividends 146 350
Profit before taxation 2 751 274 2 818 090
Taxation (4 340) (50 930)
Profit for the year 2 746 934 2 767 160
Other comprehensive income
Exchange differences on translation of foreign operations (27 623) (1 491)
Total comprehensive income for the year 2 719 311 2 765 669
Total profit for the year attributable to:
Shareholders of the company 2 767 652 2 750 847
Non-controlling interests (20 718) 16 313
Profit for the year 2 746 934 2 767 160
Total comprehensive income attributable to:
Shareholders of the company 2 755 272 2 752 041
Non-controlling interests (35 961) 13 628
Total comprehensive income for the year 2 719 311 2 765 669
Hyprop Investments Limited
Summarised consolidated results for the year ended 30 June 2017
Audited Audited
12 months 12 months
30 June 2017 30 June 2016
R000 R000
Condensed reconciliation – headline earnings
Profit for the year 2 767 652 2 767 160
Earnings 2 767 652 2 767 160
Headline earnings adjustments (1 173 229) (1 372 032)
Change in fair value of: Investment property (1 181 786) (1 382 134)
Investment in joint venture (10 102) 10 102
Loss/(profit) on disposal: Investment in subsidiary 2 556
Investment property (2 031)
Impairment of goodwill 18 134
Headline earnings 1 594 423 1 395 128
Total shares in issue 248 441 278 243 256 092
Weighted average shares in issue 247 441 400 242 921 081
Diluted weighted average shares in issue 247 720 531 243 367 758
Total shares in issue for dividend per share (excludes treasury shares) 247 899 032 248 030 619
Basic earnings per share (cents) 1 118,5 1 139,1
Headline earnings per share (cents) 644,4 574,3
Diluted earnings per share (cents) 1 110,8 1 131,1
Diluted headline earnings per share (cents) 637,1 567,3
Summarised consolidated statement of financial position
Audited Audited
30 June 2017 30 June 2016
R000 R000
Assets
Non-current assets 32 854 166 32 227 218
Investment property 29 681 596 28 702 563
South African portfolio 27 711 853 26 380 137
Ikeja City Mall (Lagos, Nigeria) 1 969 743 2 322 426
Building appurtenances and tenant installations 148 530 126 100
Investments in sub-Saharan Africa (excluding SA) 3 005 821 3 315 614
Investment in associate 766
Loans receivable 17 434 14 732
Goodwill 18 134
Derivative instruments 785 49 309
Current assets 1 366 021 378 150
Receivables 230 741 179 193
Derivative instruments 9 530
Cash and cash equivalents 1 125 750 198 957
Non-current assets held-for-sale 426 681 1 243 591
Total assets 34 646 868 33 848 959
Equity 24 882 553 23 118 856
Stated capital and reserves 24 788 254 22 988 596
Non-controlling interest 94 299 130 260
Liabilities
Non-current liabilities 5 428 316 8 879 743
Interest-bearing liabilities 5 068 332 8 632 036
Financial guarantee 163 855
Derivative instruments 56 530 101 198
Deferred taxation 139 599 146 509
Current liabilities 4 322 925 1 822 492
Payables 489 681 528 440
Interest-bearing liabilities 3 832 306 1 294 052
Derivative instruments 938
Liabilities directly associated with non-current assets held-for-sale 13 074 27 868
Total liabilities 9 764 315 10 730 103
Total equity and liabilities 34 646 868 33 848 959
Net asset value per share (R) 99,78 94,50
Summarised consolidated statement of changes in equity
Audited Audited
30 June 2017 30 June 2016
R000 R000
Balance at beginning of year 23 118 856 21 658 721
Total profit for the year attributable to Hyprop shareholders 2 767 652 2 750 847
Non-controlling interest (35 961) 130 260
Issue of shares 695 656
Treasury shares 3 422 (27 789)
Dividends (1 660 316) (1 404 296)
Share-based payment reserve 5 624 9 919
Foreign currency translation reserve (12 380) 1 194
Balance at end of year 24 882 553 23 118 856
Distribution details
Total distribution for the year (cents) 695,1 619,9
Six months ended 30 June (cents) 347,8 322,1
Six months ended 31 December (cents) 347,3 297,8
Summarised consolidated statement of cash flows
Audited Audited
30 June 2017 30 June 2016
R000 R000
Cash flows from operating activities 319 908 (210 672)
Cash generated from operations 2 159 602 1 709 767
Interest received 266 423 191 515
Interest paid (441 049) (692 192)
Taxation paid (4 751) (15 466)
Dividends paid (1 660 317) (1 404 296)
Cash flows from investing activities 669 846 (1 716 759)
Cash flows from financing activities (44 833) 1 989 143
Net increase in cash and cash equivalents 944 921 61 712
Cash (disposed)/acquired with subsidiary (4 006) 48 964
Translation effects on cash and cash equivalents of foreign entities (12 336) 5 002
Cash reallocated to assets held-for-sale (1 786) (562)
Cash and cash equivalents at beginning of year 198 957 83 841
Cash and cash equivalents at end of year 1 125 750 198 957
Commentary
Introduction
Hyprop, Africa’s leading specialist shopping centre Real Estate Investment Trust (REIT), operates a portfolio of shopping
centres in major metropolitan areas across South Africa (SA), sub-Saharan Africa (excluding SA) and South-Eastern
Europe.
The shopping centre portfolio in South Africa includes super-regional centre Canal Walk, large regional centres
Clearwater, The Glen, Woodlands, CapeGate, Somerset Mall and Rosebank Mall, and regional centre Hyde Park Corner.
The sub-Saharan African portfolio (excluding SA) includes interests in Accra Mall, West Hills Mall and Achimota Retail
Centre (all in Accra, Ghana), Kumasi City Mall in Kumasi, Ghana, Manda Hill Centre in Lusaka, Zambia and Ikeja City Mall
in Lagos, Nigeria.
Hyprop’s investments in South-Eastern Europe, held via UK-based Hystead Limited, include 60% interests in Delta City
Belgrade, Serbia, Delta City Podgorica, Montenegro and Skopje City Mall in Skopje, Macedonia. In July 2017, Hyprop
agreed to acquire a 60% interest in The Mall in Sofia, Bulgaria.
Financial results
Hyprop has declared a dividend of 347,8 cents per share for the six months ended 30 June 2017, an increase of 8,0% on
the corresponding period in 2016. The total distribution for the year of 695,1 cents per share is an increase of 12,1% on
the prior year, in line with forecast.
Due to constraints on the conversion of Naira to US Dollar, distributable earnings from Ikeja City Mall in Lagos, Nigeria,
amounting to R26,0 million, were excluded from dividends for the year.
Distributable earnings for the year benefited from the inclusion of income amounting to R101,8 million from the
investments in South-Eastern Europe (30 June 2016: R24,6 million).
South African portfolio
Revenue and distributable earnings
12 months ended 12 months ended
30 June 2017 30 June 2016
Distributable Distributable
Revenue earnings Revenue earnings
Business segment R000 R000 R000 R000
Shopping centres 2 580 200 1 723 648 2 413 365 1 633 312
Value centres(1) 174 314 128 615 161 017 114 046
Total retail 2 754 514 1 852 263 2 574 382 1 747 358
Standalone offices(2) 46 908 28 332 41 701 25 828
Investment property (excluding properties
sold) 2 801 422 1 880 595 2 616 083 1 773 186
Properties sold(3) 74 179 36 332 128 611 74 965
Total investment property 2 875 601 1 916 927 2 744 694 1 848 151
1
Includes Willowbridge North (held-for-sale)
2
Includes Lakefield Office Park (held-for-sale)
3
Properties sold during the 2017 year include Somerset Value Mart, Willowbridge South, Glenfield and Glenwood office parks.
Revenue and distributable earnings from investment property (excluding properties sold) increased by 7,1% and 6,1%,
respectively.
Clearwater, Hyde Park Corner, CapeGate and Somerset Mall performed well during the year, with weighted average
growth in distributable earnings of 8,6%. The Glen’s income was negatively affected by construction work and limited
rent reductions.
Trading density growth continued to slow in the second half of the year. Excluding The Glen, trading density
growth for the year was 2,0% (30 June 2016: 6,7%). Trading density growth for the year including The Glen was 1,4%
(30 June 2016: 5,0%).
Notwithstanding the slowing in trading density growth, Hyprop’s shopping centres continue to receive strong demand
for space from both national and international tenants.
Cost-to-income ratios
30 June 30 June
2017 2016
Net basis (%) 15,7 15,0
Gross basis (%) 33,3 33,2
The cost-to-income ratios increased marginally, due in part to higher municipal costs at Canal Walk and loss of income
due to extensions and refurbishments at The Glen, Rosebank Mall and Canal Walk.
Tenant arrears
Total arrears as a percentage of rental income were 0,4% (30 June 2016: 0,5%). Bad debts written off during the year were
R8,9 million (30 June 2016: R13,3 million).
Vacancies
% of total rentable area
30 June 30 June
Vacancy profile by sector 2017 2016
Retail 1,9 0,8
Office 7,9 4,5
Total 2,4 1,1
The retail vacancy of 1,9% includes the former Stuttafords stores at Clearwater and Rosebank Mall which were vacated
at the end of May 2017 (6 299m2), Cinemas at Woodlands Boulevard (2 397m2) and the former HiFi Corporation store at
CapeGate (1 358m2).
The Stuttafords store at Canal Walk has been re-let to H&M (scheduled to begin trading in November 2017).
After year-end, the retail vacancy reduced to 1,7%.
The increase in office vacancies relates primarily to The Mall Offices in Rosebank, where Sasol vacated 8 942m2 during
the year. Good progress has been made letting this space (albeit at lower rentals), and only 1 821m2 of space remains
vacant. Other office vacancies include small areas at Hyde Park Corner and Canal Walk.
Value per
Valuations Value attributable to Hyprop rentable area
Rentable 30 June 30 June 30 June
area 2017 2016 2017
Business segment (m2) R000 R000 (R/m2)
Shopping centres 644 196 26 490 589 25 282 472 45 181
Value centres (1)
66 394 1 473 000 1 321 000 22 186
Total retail 710 590 27 963 589 26 603 472 43 033
Total standalone offices(2) 20 328 310 798 289 075 15 289
Total (excluding properties sold) 730 918 28 274 387 26 892 547
Properties sold(3) 838 000
Investment property 730 918 28 274 387 27 730 547 42 261
1
Includes Willowbridge North (held-for-sale)
2
Includes Lakefield office park (held-for-sale)
3
Properties sold during the 2017 year include Somerset Value Mart, Willowbridge South, Glenfield and Glenwood office parks
Excluding properties sold, investment property was valued at R28,3 billion at 30 June 2017 (30 June 2016: R26,9 billion), an
increase of 5,1%. The weighted average capitalisation rate of the portfolio is 6,6%. All discount and capitalisation rates
remained largely the same as the previous year.
Capital expenditure
Extensions and refurbishments at Rosebank Mall, The Glen and Canal Walk are on schedule and within budget:
Shopping centre Project Amount (Hyprop share) Completion date
Rosebank Mall Additional 4 300m² rentable area R127,0 million April 2018
The Glen Food court enclosure and additional 1 200m² R90,9 million April 2018
rentable area
Canal Walk Additional retail in La Piazza area R41,6 million November 2017
The extension of Rosebank Mall will accommodate H&M and other key tenants, while the refurbishments at Canal Walk
and The Glen will strengthen the retail offering in specific areas of the respective centres. The estimated average
forward yield for the three projects is approximately 7%.
Hyprop is focused on improving the quality and sustainability of its shopping centres and during the year R177,9 million
(30 June 2016: R178,0 million) was spent on refurbishments, tenant installations, new equipment and technology. The
third phase of the solar photovoltaic plant at Clearwater Mall will be completed in September 2017, following which
approximately 15% of the centre’s electricity requirements will be provided by solar power.
Disposals
During the year, the following disposals were completed, at an average yield of approximately 9%:
Sale price Rentable area (m²) Transfer date
Somerset Value Mart R185 million 12 546 September 2016
Glenfield Office Park R180 million 10 320 December 2016
Willowbridge South R460 million 25 268 March 2017
Glenwood Office Park R42 million 3 471 May 2017
Total R867 million 51 605
The sale of Willowbridge North for R225 million is unconditional and transfer is anticipated in September 2017.
As a consequence of the above disposals (Willowbridge North included), the rentable area in the South African portfolio
will reduce by 69 152m2, a reduction of 8,8%.
Lakefield Office Park is the last remaining non-core property to be sold. Willowbridge North and Lakefield Office Park
are included under assets held-for-sale in the statement of financial position at 30 June 2017.
The disposal of non-core assets has improved the overall quality of the portfolio, with a reduced exposure to the higher
risk office sector.
Investments outside South Africa
The functional and reporting currencies for the investments in sub-Saharan Africa (excluding SA) and South-Eastern
Europe are the US Dollar and Euro, respectively.
The relevant exchange rates used to convert to Rand at the respective dates were as follows:
30 June 2017 30 June 2016
Year-end Year-end
Average rate spot rate Average rate spot rate
(R) (R) (R) (R)
US Dollar 13,63 13,04 14,87 14,77
Euro 14,53 14,90 16,40 16,40
The average rates are a weighted average of the actual exchange rates on the dates that the foreign currency dividends
were received in South Africa. The year-end spot rate is the rate used to translate balance sheet items at year-end.
Hyprop fixes the exchange rates on US Dollar and Euro income for six months in advance of receipt of the dividends.
Investments in sub-Saharan Africa (excluding South Africa)
The macro-economic environment in the countries in which Hyprop and AttAfrica are invested in has improved in the
last six months. The local currencies are more stable in Ghana and Zambia and US Dollar liquidity in Nigeria has improved,
although at a weaker Naira exchange rate.
Operationally, there has been an improvement in rental collections, however there has not been any significant growth
in rental levels.
Hyprop share of distributable earnings
30 June 2017 30 June 2016
R000 R000
Distribution received 168 241 213 388
Interest and expenses (111 269) (129 734)
Net 56 972(1) 83 654
1
Excludes Ikeja distribution of R26,0 million
Distributable earnings from the investments in sub-Saharan Africa (excluding SA) reduced to R57,0 million (30 June 2016:
R83,7 million), largely due to the exclusion of distributable earnings from Ikeja City Mall in Lagos, Nigeria, replacement of
tenants at lower rentals at Manda Hill Centre in Lusaka, Zambia and Rand appreciation against the US Dollar.
In light of the improved US Dollar liquidity in Nigeria, we expect to resume distributing income from Ikeja City Mall
during the 2018 financial year. During the current year, R65,0 million (Hyprop share: R48,7 million) was applied to the
reduction of senior in-country US Dollar debt in Nigeria.
Vacancies
Hyprop’s
effective Rentable 30 June 2017 30 June 2016
shareholding area vacancy vacancy
City/country (%) (m2) (%) (%)
Ikeja City Mall Lagos, Nigeria 75,0 22 223 – 2,3
Manda Hill Centre Lusaka, Zambia 68,8 40 561 5,4 4,7
Accra Mall Accra, Ghana 17,6 21 349 – –
West Hills Mall Accra, Ghana 16,8 27 560 5,3 5,0
Achimota Mall Accra, Ghana 28,1 15 006 6,1 21,7
Kumasi City Mall Kumasi, Ghana 28,1 17 948 26,5 n/a
Total portfolio 144 647 6,5 4,0
Demand for space at Accra Mall (Accra, Ghana) and Ikeja City Mall (Lagos, Nigeria) remains strong. Trading at Achimota
Mall (Accra, Ghana), which opened in November 2015, has stabilised over the last 12 months and vacancies have reduced.
Kumasi City Mall, in Kumasi, Ghana began trading in April 2017.
Hyprop share of shareholder loans/investment property
At 30 June 2017 the Hyprop share of the US Dollar value of the AttAfrica portfolio, Manda Hill and Ikeja City Mall was
USD281,8 million (30 June 2016: USD285,1 million) at a weighted average capitalisation rate of 8,4% (30 June 2016: 8,2%).
Hyprop share
30 June 2017 30 June 2016
R000 R000
AttAfrica and Manda Hill 3 005 821 3 315 614
Ikeja City Mall, Lagos, Nigeria (75%) 1 476 553 1 740 658
Investments in sub-Saharan Africa 4 482 374 5 056 272
The Rand equivalent value of the investments in sub-Saharan Africa (excluding SA) at 30 June 2017 was R4,5 billion
(30 June 2016: R5,1 billion). The net reduction over the year was largely due to Rand appreciation against the US Dollar, a
reduction in the valuation of Ikeja City Mall and impairment of the AttAfrica shareholder loan in Hyprop Mauritius.
Hyprop is currently not looking to increase its investments in sub-Saharan Africa (excluding South Africa).
10 Hyprop Investments Limited
Summarised consolidated results for the year ended 30 June 2017
Investments in South-Eastern Europe
Hyprop’s investments in South-Eastern Europe are held through a UK company, Hystead Limited (Hystead), in which
Hyprop has a 60% interest. The purchase of Skopje City Mall in Skopje, Macedonia, for a total consideration of
EUR92 million, was effective in October 2016.
Hyprop share of distributable earnings
30 June 2017 30 June 2016
R000 R000
Distribution received 147 059 37 000
Interest and expenses (45 236) (12 428)
Net 101 823 24 572
Trading conditions at the South-Eastern European shopping centres, including foot count and turnover growth, remain
positive. Demand for space remains strong and plans to extend the centres are progressing.
Vacancies
At 30 June 2017 (and at 30 June 2016), there were no vacancies in the South-Eastern European shopping centres.
Hyprop share of investment property
At 30 June 2017 the Hyprop share of the Euro value of the Hystead portfolio was EUR179,9 million (30 June 2016:
EUR123,7 million) at a weighted average capitalisation rate of 8,7% (30 June 2016: 8,4%).
Hyprop share
30 June 2017 30 June 2016
R000 R000
Delta City Belgrade, Belgrade, Serbia (60%) 1 162 200 1 283 136
Delta City Podgorica, Podgorica, Montenegro (60%) 685 698 744 888
Skopje City Mall, Skopje, Macedonia (60%) 833 208 n/a
Investments in South-Eastern Europe 2 681 106 2 028 024
The total Rand equivalent value of Hyprop’s share of investment property in South-Eastern Europe increased due to the
acquisition of Skopje City Mall in Skopje, Macedonia. The Rand equivalent value of the Delta City centres reduced due
to the appreciation of the Rand against the Euro.
The investments in South-Eastern Europe are accounted for as an investment in a financial asset with the gain on initial
recognition of the financial asset being deferred. Accordingly, the investments do not appear on the consolidated
statement of financial position.
Funding
In March 2017, EUR206,0 million was refinanced for three years at a rate of 2,5% (previously 1,7%). The remaining Euro
funding amounting to EUR93,0 million is currently at a rate of 1,7%. Euro debt of approximately EUR134,1 million will be
refinanced during the course of the 2018 financial year with in-country asset backed finance.
The Euro debt is supported by a guarantee from Hyprop, as well as back-to-back security provided by the other
shareholder of Hystead. The Hyprop funding support results in the recognition of a financial guarantee on the Hyprop
statement of financial position. Hyprop receives credit enhancement fees for its funding support. In addition, the
underlying properties in the South-Eastern European portfolio are currently unencumbered.
Acquisition
In July 2017, it was announced that Hystead had reached agreement to acquire The Mall shopping centre in Sofia,
Bulgaria, for EUR155 million. Approval for the transaction from the Bulgarian competition authority is still pending. It is
anticipated that the transaction will be effective from October 2017.
This will be Hystead’s fourth South-Eastern European acquisition, taking the portfolio to a gross asset value of
approximately EUR460 million. The Mall is the dominant shopping centre in Sofia and has a rentable area of 52 000m²,
with a weighted average rent of EUR18,30/m² per month. This acquisition is Hystead’s first entry into the European Union
and will enhance the quality, profile and critical mass of the portfolio.
The acquisition will be funded in a similar manner to Hystead’s first three acquisitions, with short-term bridge funding,
supported by a guarantee from Hyprop. The Hyprop support will be for approximately EUR105 million, as the property
will be acquired with existing senior in-country debt, having no recourse to Hyprop.
Hystead listing
Progress is being made with a possible listing of Hystead in the first half of calendar year 2018. The listing will enable
Hystead to become a standalone fund, will reduce its reliance on Hyprop and will position it for growth through further
acquisitions and developments.
Net asset value
The net asset value (NAV) per share at 30 June 2017 increased by 5,6% to R99,78 (30 June 2016: R94,50). The increase was
primarily due to an increase in the independent valuation of the South African investment property portfolio, as well as
the issue of new shares at a premium to NAV per share in August 2016, offset by the impact of the stronger Rand on the
sub-Saharan Africa portfolio.
At 30 June 2017, the closing share price of R116,76 represented a premium of 17,0% to the NAV per share.
Borrowings
30 June 30 June
2017 2016
Rm Rm
South African debt 4 114 4 632
Bank debt 1 814 2 992
Corporate bonds 2 300 1 200
Commercial paper 440
USD debt (Rand equivalent) 4 391 4 842
EUR debt (Rand equivalent) 2 674 1 510
Cash and cash equivalents (1 126) (239)
Net borrowings 10 052 10 745
Loan to value (%) 28,9 30,8
Debt at fixed rates (%)(1)
South African debt (%) 100,9 89,6
USD debt (%) 70,4 72,4
Maturity of fixes (years)(1) 3,4 4,4
South African debt (years) 3,9 4,9
USD debt (years) 2,7 3,7
Cost of funding (%) 5,7 6,0
South African debt (%) 8,9 8,9
USD debt (%) 4,7 4,6
EUR debt (%) 2,2 1,7
Debt capital market (DCM) % of total debt 21 15
1
Interest rate on Euro debt is not fixed
During the year, a maturing South African bank loan amounting to R1,2 billion was refinanced with DCM funding (three,
four and five-year corporate bonds). All DCM funding is unsecured.
The Rand equivalent of the US Dollar-denominated bank debt reduced during the year, largely due to Rand appreciation
against the US Dollar. The US Dollar debt includes debt in Hyprop Mauritius, as well as 75% of the in-country debt
relating to Ikeja City Mall (Lagos, Nigeria).
The Euro debt, which funded Hyprop’s 60% interest in the South-Eastern European shopping malls, is not consolidated
on the Hyprop statement of financial position. For the purpose of the above analysis, 60% of the debt and 60% of the
corresponding asset values have been included.
Euro-denominated debt increased, due to the final payment of EUR49,3 million in September 2016 in respect of Delta
City Belgrade, as well as a payment of EUR92 million in October 2016 for Skopje City Mall in Skopje, Macedonia.
Due to the pending changes in the Euro debt structure, the interest rate on the Euro debt has not yet been fixed.
The increase in cash is largely due to inflows from the issue of new shares in July 2016 (R700 million) and proceeds
received from the sale of non-core assets in the South African portfolio (R867 million).
Distributable earnings statement and reconciliation to dividend declared
Distributable earnings
12 months
30 June 30 June
2017 2016
R000 R000
South African property portfolio 1 916 927 1 848 151
Continuing operations 1 880 595 1 773 186
Properties sold 36 332 74 965
Investments in sub-Saharan Africa (excluding SA) 56 972 83 654
Investments in South-Eastern Europe 101 823 24 572
Fund management expenses (67 347) (63 922)
Net interest (321 336) (394 310)
Other income 36 533 7 372
Antecedent dividend 16 704
Distributable earnings 1 723 572 1 522 221
Total shares in issue at year-end 248 441 278 243 256 092
Treasury shares (542 246) (410 659)
Shares issued, August 2016 5 185 186
Shares in issue for distributable earnings 247 899 032 248 030 619
Dividend per share (cents) 695,1 619,9
Dividend per share growth (%) 12,1 14,2
Net interest costs of R321,3 million (30 June 2016: R394,3 million) reduced due to non-core asset sales of R867 million and
a cash inflow of R700 million in August 2016 from the issue of new shares. The proceeds from non-core asset sales and
the issue of new shares were applied in part to the reduction of debt (R518,0 million) and to capital expenditure in the
South African portfolio (R177,9 million). The remaining cash was placed on deposit.
Other income, amounting to R36,5 million, comprises a credit enhancement fee received for the funding guarantee
provided by Hyprop in respect of the South-Eastern European investments. The implementation of asset backed
finance in the Hystead subsidiaries and the possible listing of Hystead will result in the termination of these fees.
Treasury shares are held in respect of an equity settled staff incentive scheme.
Prospects
Hyprop expects dividend growth of between 7% and 9% for the year to 30 June 2018. This guidance is based on the
following key assumptions:
•• Forecast investment property income is based on contractual rental escalations and market-related renewals
•• Appropriate allowances for vacancies have been incorporated into the forecast
•• No major corporate and tenant failures will occur
•• Earnings from offshore investments will not be materially impacted by exchange rate volatility. Exchange rates have
been assumed at R13,00 and R15,00 to the US Dollar and Euro respectively
•• Loss of income due to developments in the South African portfolio amounting to R9,3 million
•• The Hystead listing taking place in the first half of calendar year 2018.
The forecast has not been reviewed or reported on by the company’s auditors.
Payment of dividend
A dividend of 347,8 cents per share for the six months ended 30 June 2017 will be paid to shareholders as follows:
2017
Last day to trade cum dividend Tuesday, 26 September
Shares trade ex dividend Wednesday, 27 September
Record date Friday, 29 September
Payment date Monday, 2 October
Shareholders may not dematerialise or rematerialise their shares between Wednesday, 27 September 2017 and Friday,
29 September 2017, both days inclusive. Payment of the dividend will be made to shareholders on Monday, 2 October
2017. In respect of dematerialised shareholders, the dividend will be transferred to the CSDP accounts/broker accounts
on Monday, 2 October 2017. Certificated shareholders’ dividend payments will be deposited on or about Monday,
2 October 2017.
An announcement relating to the tax treatment of the dividend will be released separately.
The summarised consolidated financial statements for the year ended 30 June 2017 were prepared in accordance with
the requirements of the JSE Limited Listings Requirements for preliminary reports and the requirements of the
Companies Act of South Africa. The JSE Listings Requirements require preliminary reports to be prepared in accordance
with the framework concepts and the measurement and recognition requirements of International Financial Reporting
Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Pronouncements as issued by Financial Reporting Standards Council and as a minimum, contain the information required
in terms of IAS 34 Interim Financial Reporting.
All amendments to standards that are applicable to Hyprop for its financial year beginning 1 July 2016 have been
considered. Based on management’s assessment, the amendments do not have a material impact on the group’s annual
financial statements.
All accounting policies applied in the preparation of the group annual financial statements for the year ended 30 June
2017 are consistent with those applied by Hyprop in its consolidated group annual financial statements for the prior
financial year.
These summarised consolidated financial statements for the year ended 30 June 2017 have been extracted from the
audited group annual financial statements, but have not themselves been audited. The directors take full responsibility
for the preparation of the summarised consolidated results and for ensuring that the financial information has been
correctly extracted from the underlying audited group annual financial statements. The auditor’s report does not
necessarily report on all of the information included in this announcement. 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 report, together with the underlying financial information from the registered office of the company.
KPMG Inc. has audited the group annual financial statements. Their unqualified audit report is available from the
registered office of the company.
Preparation of the financial information was supervised by Laurence Cohen CA(SA) in his capacity as Financial Director.
On behalf of the board
GR Tipper PG Prinsloo
Chairman CEO
1 September 2017
Corporate information
Directors
GR Tipper*† (Chairman)
PG Prinsloo (CEO)
LR Cohen (FD)
KM Ellerine*
L Engelbrecht*†
MJ Lewin*†
N Mandindi*†
TV Mokgatlha*†
L Norval*
S Shaw-Taylor* †
*Non-executive †Independent
Independent non-executive director, Nyami Mandindi, was appointed to the board on 8 May 2017.
Registered office
Second Floor
Cradock Heights
21 Cradock Avenue
Rosebank
(PO Box 52509, Saxonwold, 2132)
Transfer secretaries
Computershare Investor Services Proprietary Limited
Rosebank Towers
15 Biermann Avenue
Rosebank
PO Box 61051, Marshalltown, 2107
Company secretary
CIS Company Secretaries Proprietary Limited
Sponsor
Java Capital
Investor relations
Viki-Jane Watson
(Telephone: +27 11 447 0090)
Email: investorrelations@hyprop.co.za
www.hyprop.co.za
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