MAS final results June 2018
Revenue for the year ended June 2018 increased to EUR43.4 million (2017: EUR31.6 million), net operating income jumped to EUR38.3 million (2017: EUR20.2 million), profit for the year attributable to owners of the parent plunged to EUR16.9 million (2017: R33.6 million), while headline earnings per share grew to EUR2.03 cents per share (2017: EUR0.15 cents per share).
As a result of the increase in distributable earnings and strong pipeline of investments and developments, the board has proposed a final distribution of EUR4.03 cents per share for the second half of the 2018 financial year, which includes EUR0.38 cents per share from reserves. This brings the cumulative annual distribution to EUR7.61 cents per share for 2018, an increase of 30% over last year's distribution of EUR5.85 cents per share. This dividend will be paid in cash, with no scrip alternative offered to shareholders. An announcement containing further details will be released in due course.
MAS continues to benefit from a strong balance sheet with sufficient capital to meet its obligations, as well as a healthy development and acquisition pipeline. The group has access to a development partner with demonstrated competitive advantages in identifying and executing exceptional opportunities.
The board is cognisant of heated property markets fuelled by liquidity and owners and developers eager to dispose of over-rented properties at prices that are high by historical standards. As a result, the board is determined to retain strong investment discipline and pursue only quality developments and acquisitions with value-adding potential and strong long-term growth prospects. It has previously been stated, and remains the view of the board, that longer-term prospects will not be sacrificed to meet shorter term distribution growth targets and the implementation of transactions is not being rushed.
The board is committed to distributing quality earnings to shareholders on a sustainable basis and do not intend to subsidise the 2019 distribution from reserves, but to fund it from distributable earnings. Accordingly, the directors consider that a distribution growth target of 15% for the 2019 financial year is appropriate. This target is based on the acquisition and development pipeline in place and further opportunities being pursued. It also assumes that a stable macro- economic environment will prevail, no major corporate failures will occur, the investments and developments reported on above will progress as expected and budgeted rental income based on contractual escalations as well as market-related renewals will be collected. This target has not been reviewed or audited by the group's auditors.
Capital management is an important area of value creation for shareholders. The board will consider buying back shares as and when it can create value for shareholders, if the trading price is below the intrinsic NAV per share of the business. Such buybacks will be done with care, since capital is a scarce and valuable resource and there remains opportunities to grow shareholder value by investing and developing at rates in excess of the cost of capital.
MAS will continue to pursue profitable growth through exploiting further acquisition and development opportunities in its markets, as well as by optimising its balance sheet. Further announcements will be made as appropriate.