Wrap Text
Unaudited results for the six months ended 28 February 2018
REBOSIS PROPERTY FUND LIMITED
(Rebosis or the company)
(Registration number 2010/003468/06)
(Approved as a REIT by the JSE)
JSE share code Rebosis A share: REA
JSE share code Rebosis Ordinary share: REB
ISIN Rebosis A share: ZAE000240552
ISIN Rebosis Ordinary share: ZAE000201687
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 28 FEBRUARY 2018
REBOSIS A ORDINARY DIVIDEND GROWTH - 5% to 126.43 cents per share
REBOSIS ORDINARY DIVIDEND GROWTH - 4% to 63.23 cents per share
PROPERTY NET INCOME GROWTH - 6.8%
VACANCIES - 3.4%
NAV PER A ORDINARY SHARE - R24.80
NAV PER ORDINARY SHARE - R15.60
RETAIL
¥ 6 high quality dominant malls
¥ Baywest, Hemingways, Forest Hill, Mdantsane, Sunnypark and Bloed Street
¥ Strong national tenant profile
¥ Average contractual escalation of 6.9%
¥ Weighted average lease expiry of 4.6 years
¥ Vacancies 1.3%
Number of properties - 6
Portfolio valuation - RÕ000 - 8 772 200
Gross lettable area - m2 - 326 008
Value per m2 - R26 908
OFFICE
¥ 42 predominantly A and B grade well-located properties in nodes attractive to government tenants
¥ Let primarily to National Department of Public Works
¥ Average escalation of 7.9%
¥ Shielded from private sector related default (insolvency and cash flow)
¥ Vacancies 4.6%
INDUSTRIAL
¥ Single tenanted industrial warehouse
¥ Weighted average lease expiry of 7.8 years
¥ Lease underpinned by international listed blue chip parent company
¥ Average escalation of 7.0%
¥ No vacancy
Number of properties - 1
Portfolio valuation - RÕ000 - 170 000
Gross lettable area - m2 - 18 954
Value per m2 - R 8 969
STATEMENT OF COMPREHENSIVE INCOME
Group
Unaudited Unaudited
for the six for the six
months ended months ended
28 February 28 February
2018 2017
*Restated
RÕ000 RÕ000
Revenue 1 195 686 993 284
Investment property income 1 043 381 1 002 155
Straight-line rental income accrual 100 435 (23 873)
Net income from facilities management agreement 13 854 10 347
Management fees received 4 833 4 655
Listed property securities income 33 183 -
Property expenses (255 500) (273 226)
Net property income 940 186 720 058
Other operating expenses (65 142) (55 115)
Operating income 875 044 664 943
Net interest (295 210) (392 502)
Received 72 132 -
Paid (367 342) (392 502)
Net operating income 579 834 272 441
Gain on bargain purchase - 97 389
Changes in fair values (236 721) 737 240
Loss on sale of listed securities - (26 705)
Profit before taxation 343 113 1 080 365
Taxation - -
Total profit from continuing operations 343 113 1 080 365
Net results from discontinued operations - 125 991
Total profit for the year 343 113 1 206 356
Other comprehensive income
Items that may be recycled to profit and loss
Foreign currency translation reserve - (346 420)
Total comprehensive income 343 113 859 936
Total profit attributable to:
Owners of the parent 343 113 1 063 682
Non-controlling interests - 142 674
Profit for the year 343 113 1 206 356
Total comprehensive income attributable to:
Owners of the parent 343 113 820 550
Non-controlling interests - 39 386
Total comprehensive income for the year 343 113 859 936
*Restatement relates to discontinued operations
STATEMENT OF FINANCIAL POSITION
Group
Unaudited Audited
as at as at
28 February 31 August
2018 2017
RÕ000 RÕ000
ASSETS
Non-current assets 21 849 110 21 617 102
Investment property 18 942 200 18 608 490
Investment in listed REIT securities 1 093 742 1 044 979
Loans to related parties -
New Frontier Properties Limited - 70 699
Goodwill 676 412 676 412
Derivative instruments 1 220 60 540
Other financial assets 1 127 690 1 150 247
Property, plant and equipment 7 846 5 735
Current assets 916 071 1 028 951
Short term portion of other financial assets 175 801 286 013
Short term portion of derivatives 6 971 49 131
Short term portion of loan to related party -
New Frontier Properties Limited 151 810 -
Trade and other receivables 548 435 376 478
Cash and cash equivalents 33 054 104 640
Investment property held for sale - 212 689
22 765 181 22 646 053
EQUITY AND LIABILITIES
Equity 12 032 547 11 847 850
Stated capital 8 814 527 8 464 527
Reserves 3 218 020 3 383 323
Total equity attributable to
equity owners of the parent entity 12 032 547 11 847 850
Non-current liabilities 5 460 746 5 293 966
Interest-bearing borrowings 5 440 176 4 973 982
Deferred payment liability - 228 542
Derivative instruments 20 570 91 442
Current liabilities 5 271 888 5 504 237
Short term portion of interest-bearing borrowings 4 891 091 4 858 196
Short term portion of derivatives - 2 057
Short term portion of deferred payment liability 228 581 350 000
Trade and other payables 152 216 293 984
Total equity and liabilities 22 765 181 22 646 053
Number of A ordinary shares in issue 63 266 012 63 266 012
Number of ordinary shares in issue 673 289 779 642 316 328
Treasury share (2 408 326) (2 408 326)
Number of ordinary shares in issue
(net of treasury shares) 670 881 453 639 698 002
Net asset value per A ordinary share - REA (R) 24.80 24.50
Net asset value per ordinary share - REB (R) 15.60 16.09
Loan to value (%)* 48.3% 45.7%
Calculated in terms of the REIT
Best Practice Recommendations
The loan-to-value ratio equates
to net debt divided by the total property assets
Net debt 10 298 213 9 727 538
Interest bearing borrowings less
cash and cash equivalents 10 298 213 9 727 538
Property assets 21 315 442 21 302 417
Investment property 18 942 200 18 608 490
Investment in listed REIT securities 1 093 742 1 044 979
Investment property held for sale - 212 689
Loans receivable 1 279 500 1 436 259
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Group
Unaudited Unaudited
for the six for the six
months ended months ended
28 February 28 February
2018 2017
RÕ000 RÕ000
Balance at 31 August 11 847 850 9 462 284
Issue of shares 350 000 1 198 391
Treasury shares (held by subsidiary) - (500)
Profit for the year 343 113 1 063 682
Dividend paid (508 416) (340 061)
Foreign currency translation reserve - (243 131)
Non-controlling interest - 143 638
Balance at 28 February 12 032 547 11 284 303
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
Group
Unaudited Unaudited
for the six for the six
months ended months ended
28 February 28 February
2018 2017
RÕ000 RÕ000
Cash flow from operating activities (386 192) (158 546)
Cash generated from operations 374 990 593 613
Dividend paid (508 416) (454 786)
Dividend received 33 179 -
Net finance charges paid (285 945) (297 373)
Cash outflows from investing activities (333 266) (1 022 356)
Capex and tenant installations (113 828) (58 265)
Acquisition of listed securities and investments (292 995) (964 091)
Acquisition of property, plant and equipment (276) -
Proceeds on sale of assets 73 833 -
Cash inflows from financing activities 647 870 1 969 818
Proceeds from issue of shares 1 451 879 544
Loan to related party -
New Frontier Properties Limited (81 110) -
Payment of other liabilities (35 263) -
Decrease in other financial assets 229 592 -
Payment of DMTN liability (10 000) -
Increase in DMTN liabilities 360 000 -
Increase in financial liabilities 183 200 1 090 274
Net movement in cash and cash equivalents (71 588) 788 916
Effect of translation - (12 774)
Cash and cash equivalents at the
beginning of the year 104 642 229 079
Cash and cash equivalents at the end of the year 33 054 1 005 221
COMMENTARY
INTRODUCTION
Rebosis is a JSE listed real estate investment trust (REIT) with a high quality diversified portfolio across commercial and retail assets. The
majority of the commercial income enjoys a sovereign underpin from leases to national government departments across 42 buildings. Its retail
portfolio has a mix of dominant and newly built shopping centres set to dominate in their nodes in Port Elizabeth (Baywest Mall) and Centurion
(Forest Hill City).
FINANCIAL RESULTS
Rebosis has declared a dividend of 126,43 cents per A ordinary share and 63,23 per ordinary share for the six months ended 28 February 2018. This
amounts to an 5,0% period-on-period growth for the A ordinary share and a 4,0% period-on period growth for the ordinary share which is in line with
the 4,0% to 6,0% guidance provided.
The portfolio was revalued by independent valuers, LDM Valuation Solutions for both the commercial and industrial portfolios and Mills Fitchet for
retail. The value in the underlying portfolio grew by 17.9% to R18.9bn. The like-for-like growth in the underlying retail portfolio amounted to 7.1%
year-on-year, 5.5% for the commercial portfolio and 7,0% for the industrial assets.
Distributable income increased by 29.6% from R389.1million in the prior period to R504.2million for this reporting period. The increase was mainly
due to the full consolidation of Ascension Properties Limited (2017: 53.5%).
The net cost to income ratio increased from 15.0% to 16.0% as a result of increased rates and taxes. The property net income increased by 6.8% in
line with market related escalations. Anticipated dividend from New Frontier decreased from R63.2million in the prior period to R33.2million in the
current reporting period resulting from the disposal of 29.9% of the shares held by Rebosis to a broad based black economic empowerment consortium.
Fund management expenses increased considerably from R55.1million in the 2017 interim period to R65.1million, mainly due to increased staff costs as
bonuses to staff in the prior period were paid by the asset manager and not the fund.
PROPERTY PORTFOLIO
The consolidated property portfolio of Rebosis is illustrated in the following graphs in terms of sectoral and geographical splits.
FUNDING
At 28 February 2018, RebosisÕ borrowings increased to R10.3 billion from R9.8 billion in the prior reporting period resulting from additional shares
acquired in New Frontier Properties Limited (Ò NFPÓ) and the funding of the Dublin acquisition by NFP. The weighted average cost of debt decreased
marginally from 9.4% to 9.3%, largely due to the decrease in the JIBAR reference rate. There are currently hedge arrangements in place for 67.1% of
the debt.
The loan to value increased from 45.7% to 48.3% as a result of the increased borrowings.
Group
Unaudited Unaudited
for the six for the six
months ended months ended
28 February 28 February
2018 2017
RÕ000 RÕ000
BASIC AND HEADLINE EARNINGS PER SHARE
Rebosis A ordinary shares
Number of shares in issue at period end 63 266 012 -
Weighted average number of shares in issue 63 266 012 -
Rebosis Ordinary shares
Number of shares in issue at period end 673 289 779 642 526 328
Less treasury shares (2 408 326) (2 618 326)
Number of shares in issue net of treasury shares 670 881 453 639 908 002
Weighted average number of shares in issue used
for the calculation of earnings and headline earnings per share 648 121 956 563 345 824
CONTINUING OPERATIONS RÕ000 RÕ000
Profit attributable to ordinary equity holders of the parent entity 343 113 978 650
Adjusted for: - -
Change in fair value of investment properties (36 051) (737 239)
Gain on bargain purchase - (97 389)
Headline profit attributable to shareholders 307 062 140 022
Basic and diluted earnings per REA share (cents) 126.43 -
Basic and diluted earnings per REB share (cents) 40.60 173.72
Basic and diluted headline earnings per REA share (cents) 126.43 -
Basic and diluted headline earnings per REB share (cents) 35.04 25.56
DISCONTINUING OPERATIONS RÕ000 RÕ000
Profit attributable to ordinary equity holders of the parent entity - 85 031
Adjusted for:
Change in fair value of investment properties - (29 337)
Headline profit attributable to shareholders - -
Basic and diluted earnings per REB share (cents) - 15.09
Basic and diluted headline earnings per REB share (cents) - 9.88
TOTAL OPERATIONS RÕ000 RÕ000
Profit attributable to ordinary equity
holders of the parent entity 343 113 1 063 682
Adjusted for:
Change in fair value of investment properties (36 051) (766 616)
Gain on bargain purchase - (97 389)
Headline profit attributable to shareholders 307 062 199 677
Basic and diluted earnings per REA share (cents) 126.43 -
Basic and diluted earnings per REB share (cents) 40.60 188.82
Basic and diluted headline earnings per REA share (cents) 126.43 -
Basic and diluted headline earnings per REB share (cents) 35.04 35.44
SEGMENT REPORT
The group classifies segments based on the type of property i.e. Commercial, Retail, Industrial, and Other. Properties can be mixed use properties.
In this instance the property will be classified according to its principle use. Accordingly, the group only has three reporting segments as set out
below. Some of the buildings do have a small retail component (normally at street level), but seldom exceeds 10% of the total GLA per building.
These operating segments are managed separately based on the nature of the operations. For each of the segments, the groupÕs CEO (the groupÕs chief
operating decision-maker) reviews internal management reports monthly. The CEO considers earnings before taxation to be an appropriate measure of
each segmentÕs performance.
Property portfolio
Admin and
corporate
Retail Office Industrial Total costs Total
For the six months ended 28 February 2018 RÕ000 RÕ000 RÕ000 RÕ000 RÕ000 RÕ000
Revenue 527 753 602 869 27 048 1 157 670 38 016 1 195 686
Investment property income 450 154 584 782 8 445 1 043 381 - 1 043 381
Management fee received - - - - 4 833 4 833
Listed security income - - - - 33 183 33 183
Net income from facilities management - 13 854 - 13 854 - 13 854
Straight line rental income accrual 77 599 4 233 18 603 100 435 - 100 435
Property expenses (121 132) (134 127) (241) (255 500) - (255 500)
Net property income 406 621 468 742 26 807 902 170 38 016 940 186
Other operating expenses - - - - (65 142) (65 142)
Operating income 406 621 468 742 26 807 902 170 (27 126) 875 044
Net interest - - - - (295 210) (295 210)
Net operating income 406 621 468 742 26 807 902 170 (322 336) 579 834
Other income
Changes in fair values (205 631) 263 285 (21 603) 36 051 (272 772) (236 721)
Segment profit before taxation 200 990 732 027 5 204 938 221 (595 108) 343 113
Investment property 8 772 200 10 000 000 170 000 18 942 200 - 18 942 200
Other assets 153 808 277 836 - 431 645 3 391 336 3 822 981
Total assets 8 926 008 10 277 836 170 000 19 373 845 3 391 336 22 765 181
Total liabilities 60 276 64 861 200 125 337 10 602 297 10 727 634
SEGMENT REPORT
Property portfolio
Admin and
Discontinued corporate
Retail Office Operations Industrial Total costs Total
For the six months ended 28 February 2017 (restated) RÕ000 RÕ000 RÕ000 RÕ000 RÕ000 RÕ000 RÕ000
Revenue 435 335 538 953 178 126 14 341 1 166 755 4 655 1 171 410
Investment property income 435 901 551 625 178 126 14 629 1 180 281 - 1 180 281
Management fee received - - - - - 4 655 4 655
Net income from facilities management - 10 347 - - 10 347 - 10 347
Straight line rental income accrual (566) (23 019) - (288) (23 873) - (23 873)
Property expenses (138 380) (133 104) (24 607) (1 742) (297 833) (297 833)
Net operating income 296 955 405 849 153 519 12 599 868 922 4 655 873 577
Other operating expenses - - (10 143) - (55 115) (65 258)
Operating Income 296 955 405 849 143 376 12 599 858 779 (50 461) 808 318
Net interest - - (49 456) - (49 456) (392 502) (441 958)
Net operating income 296 955 405 849 93 920 12 599 809 323 (442 963) 366 360
Other Income 1 244 1 244 1 244
Changes in fair values 281 695 385 183 29 376 - 696 254 70 362 766 616
Gain on bargain purchase - - - - - 97 389 97 389
Loss on sale of listed securities - - - - - (26 705) (26 705)
Segment profit before taxation 578 650 791 032 124 540 12 599 1 506 821 (301 917) 1 204 904
Investment property 8 582 119 8 288 135 4 411 864 - 21 282 118 - 21 282 118
Investment property held for sale - 1 046 233 - 265 000 1 311 233 - 1 311 233
Other assets 698 371 180 479 129 659 - 1 008 509 1 651 954 2 660 463
Total assets 9 280 490 9 514 847 4 541 523 265 000 23 601 860 1 651 954 25 253 814
Group
Non-IFRS information RÕ000 RÕ000
Reconciliation of profit before
tax to distributable earnings:
Total profit before taxation 343 113 1 204 904
Taxation - 1 452
Profit for the year 343 113 1 206 356
Less: Portion attributable to
non-controlling interests - (142 674)
Adjusted for:
Changes in fair value 236 721 (699 140)
Gain on bargain purchase - (97 389)
Straight line rental accrual (100 435) 23 873
Amortisation of structuring fees 9 271 1 683
Corporate transaction costs 2 699 22 644
Antecedent interest 14 499 53 051
Loss on sale of listed securities - 26 705
Dividend income distributed in previous periods (33 183) (117 838)
Anticipated distribution from
listed REIT subsidiaries 31 500 115 444
Consolidation adjustments between group entities: - (3 630)
Distributable earnings attributable
to shareholders/owners of the parent 504 185 389 085
Dividend per share (cents)
A Ordinary Shares - REA 126.43 120.41
Ordinary Shares - REB 63.23 60.80
Growth in dividend per share
A Ordinary Shares - REA 5.0%
Ordinary Shares - REB 4.0%
* In terms of the South African REIT Association Best Practice Recommendations, Rebosis has become entitled at period-end to the anticipated
distributions of its listed REIT subsidiaries. Accordingly an adjustment is made at period-end to match the anticipated income of the distribution
with the period to which the distribution relates.
SIGNIFICANT RELATED PARTY TRANSACTIONS
Parties are considered related if one party has the ability to exercise control or significant influence over the party making financial or
operational decisions. Related parties with whom the Group transacted with during the period were:
Related party transactions
Group
2018 2017
Related Party Balances R000 R000
Loans accounts- owing (to) by related parties
New Frontier Properties Limited 151 810 -
Billion Group Proprietary Limited -
Deferred purchase consideration (228 581) -
Net adjustment account 175 801 -
Amounts included in trade and other receivables
Mthatha Mall Proprietary Limited 7 982 -
Amounts included in trade and other receivables
Billion Group Proprietary Limited - 87 588
Interest received from related parties -
New Frontier Properties Limited 8 125 -
Rental warranty income
Billion Group Proprietary Limited 40 373 16 844
Asset management fee income -
Mthatha Mall Proprietary Limited 2 908 -
DECLARATION AND PAYMENT OF CASH DIVIDEND
Dividend number 2 of 126.43 cents per A ordinary share and dividend number 15 of 63,23 cents per ordinary share for the six months ended 28 February
2018 will be paid to the shareholders in accordance with the abbreviated timetable set out below:
2018
Last day to trade (cum dividend) Tuesday, 22 May
Securities trade (ex dividend) Wednesday, 23 May
Record date Friday, 25 May
Payment date Monday, 28 May
Share certificates may not be dematerialised or rematerialised between Wednesday, 23 May 2018 and Friday, 25 May 2018, both days inclusive.
The dividend will be transferred to dematerialised shareholdersÕ CSDP/broker accounts on Monday, 28 May 2018. Certificated shareholdersÕ dividend
payments will be posted on or paid to certificated shareholdersÕ bank accounts on or about, Monday, 28 May 2018.
An announcement informing shareholders of the tax treatment of the dividends will be released separately on SENS.
BASIS OF PREPARATION
The unaudited results for the six months ended 28 February 2018 have not been reviewed or reported on by the companyÕs independent auditors, Grant
Thornton Johannesburg Partnership. These results 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, JSE Listings Requirements and the requirements of the Companies Act of South
Africa.
All amendments to standards that are applicable to Rebosis for its financial year beginning 1 September 2017 have been considered. Based on
managementÕs assessment, the amendments do not have a material impact on the groupÕs condensed consolidated interim financial statements.
The accounting policies are consistent with those applied in the previous consolidated annual financial statements. These financial results have been
prepared under the supervision of the Chief Financial Officer, M de Lange, CA(SA).
The directors are not aware of any matters or circumstances arising subsequent to 28 February 2018 that require any additional disclosure or
adjustment to the financial statements, other than as disclosed in this announcement.
With effect from 03 November 2017, Zandile Kogo was appointed to the board of directors of the company as an executive director given her wealth of
experience in property industry, in both developments and existing portfolios. On 18 April 2018, Andile Mazwai resigned as Chief Executive Officer
(CEO) and Sisa Ngebulana stepped into an executive capacity and assumes the functions of a Chief Executive Officer in his role as Deputy Chairman.
PROSPECTS
Rebosis is well positioned for future growth given its stable and defensive retail portfolio that comprises an 88% national tenant profile. Both the
retail and office portfolio have delivered a 6.8% net property income growth in the reporting period with positive rent uplift on renewals that
indicate good property fundamentals.
Rebosis will have a strong focus on operations with an accelerated focus on filling up the remaining vacancies at Forest Hill and Baywest, the newly
acquired malls.
Of importance, there will be a strong focus on Balance Sheet management to reduce gearing to below 35%, which will be achieved through an accelerated
disposal of non-core office assets. This in turn will also serve to achieve more retail bias on the remaining portfolio in line with its stated
strategy of being a retail focused fund.
This prospects statement is issued by the board and has not been reviewed or reported on by the companyÕs external auditors.
By order of the Board
7 May 2018
COMPANY SECRETARY: M Ndema
REGISTERED OFFICE: 2nd Floor, Roland Garros Building, The Campus, Cnr Sloane and Main streets, Bryanston, 2191, Private Bag X21, Bryanston, 2021,
Tel: 011 575 4835
DIRECTORS: ATM Mokgokong* (Chairperson), SM Ngebulana (Executive Deputy Chairman)@, M de Lange (Chief Financial Officer)@ ,
Z Kogo (Director: Retail)@ , WJ Odendaal*, NV Qangule*, TSM Seopa*, M Mdlolo*, F Froneman*, MM Mdlolo*
* Independent Non-executive @ Executive
TRANSFER SECRETARIES: Computershare Investor Services Proprietary Limited
SPONSOR: RMB Sponsors
Date: 08/05/2018 08:02:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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