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VUKILE PROPERTY FUND LIMITED - Summarised audited results for the year ended 31 March 2018

Release Date: 30/05/2018 07:50
Code(s): VKE     PDF:  
 
Wrap Text
Summarised audited results for the year ended 31 March 2018

Vukile Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/027194/06)
JSE share code: VKE ISIN: ZAE000056370
NSX share code: VKN
(granted REIT status with the JSE)
(Vukile or the group or the company)

Summarised audited results for the year ended 31 March 2018

Highlights
- Dividend per share growth of 7.7% to 168.82 cents per share in line with guidance
- Southern Africa operating metrics remain solid in poor trading environment 
  - Like-for-like net income growth of 6.5%, vacancies reduced to 3.7% and positive reversions of 5.1%
- Prudent balance sheet with gearing ratio of 29.6% with term debt fully hedged
- Significant progress in Spanish strategy 
  - Concluded €260 million worth of acquisitions 
  - Recruited high-calibre local management team and created an operating platform

Commentary

1. Nature of operations
   The group is a long-term investor in retail-focused property portfolios with strong contractual cash flows managed 
   for sustainability and capital appreciation.                                                    

2. Summary of group financial performance                                                    
   The group's direct property investments were valued at R19.1 billion at 31 March 2018, and are located in South Africa, 
   Namibia and Spain (March 2017: R13.6 billion). The Spanish properties were valued at R4.5 billion (€308 million) 
   at year-end.                                                    

   Additionally, Vukile held the following listed investments at year-end:
   - A 34.9% shareholding in an associate, Atlantic Leaf Properties Limited (Atlantic Leaf) with a carrying value of 
     R1.2 billion. The net asset value of Atlantic Leaf at its February 2018 year-end amounted to £204 million;
   - A 31.4% shareholding in Fairvest Property Holdings Limited (Fairvest) valued at R595 million; and
   - A 26.3% shareholding in Gemgrow Properties Limited (Gemgrow) (previously named Synergy Income Fund Limited) 
     valued at R790 million.

   Ongoing improvements in financial and operating metrics                                                    
   The dividend for the six months ended 31 March 2018 increased by 7.9% to 96.16625 cents per share. Dividends for the 
   full year rose by 7.7% to 168.8198 cents per share.                                                    

   The group's net profit available for distribution was R1.31 billion for the year ended 31 March 2018, representing an 
   increase of 17% (March 2017: R1.12 billion).                                                    

   The proposed total dividend comprises:                                                    
                                                       
                                                                                                                           Cents     
                                                                                              Rm             %         per share    
   First                                                                                   550.7          42.2          72.65350    
   Second(1)                                                                               754.7          57.8          96.16625    
   Total                                                                                 1 305.4         100.0         168.81975    
   (1) Based on shares in issue at 31 March 2018.                                               
                                                       
                                                                                            2018          2017                 %    
   Key financial measures                                                                  March         March            change    
   Dividends per share (cents)                                                            168.82        156.75               7.7    
   Earnings (Rm)                                                                           2 402         1 499              60.2    
   Net asset value per share (cents)                                                       2 010         1 868               7.6    
   Loan to value ratio (%)(i)                                                               32.9          29.2(iv)                   
   Loan to value ratio net of cash (%)(ii)                                                  28.2          22.6(iv)                   
   Gearing ratio (%)(iii)                                                                   29.6          23.0                   
   (i)   Based on directors' valuations of the group's portfolio and the market value of equity investments at 31 March 2018.
   (ii)  Based on (i) above less cash (excluding cash held on deposit from tenants).
   (iii) The gearing ratio is calculated by dividing total interest-bearing borrowings by total assets.
   (iv)  Prior year excludes the market value of equity investments as the Domestic Medium Term Note (DMTN) and bank covenants 
         had not been amended at that stage.                                                      

   Share price and liquidity                                                    
   Vukile's share price increased by 13.7%, from 31 March 2017 (R19.25 per share) to R21.88 per share at year-end. Vukile's 
   market capitalisation at year-end amounted to R17.2 billion.

   Total shareholders' return for the year ended 31 March 2018 equated to 21%.

   During the 12 months ended 31 March 2018, 354 million Vukile shares were traded, which equates to approximately 29.5 million 
   shares per month. The total value of shares traded during the year amounted to R7.1 billion or 41% of the company's market 
   capitalisation at 31 March 2018 (March 2017: 28%). This demonstrates a significant improvement in the liquidity of 
   Vukile's shares.

   Equity issuances
   Equity issuance and dividend reinvestments for the year amounted to R1.6 billion:
   - Vukile issued 34 574 468 shares under an accelerated bookbuild on 26 July 2017 at R18.80 per share - raising R650 million.

   Shares issued under an election to reinvest cash dividend in return for shares:
   - 28 June 2017 - 21 581 475 shares at R18.16 - R392 million.
   - 19 December 2017 - 12 126 352 shares at R20.55 - R249 million.
   - Vukile issued 14 598 540 shares under a specific issuance at R20.55 per share on 21 December 2017 - raising R300 million.

   Cash flow                                                    
   The major items reflected in the composition of cash generated and utilised during the year under review, are set out below:
                                                                                                                              Rm    
   Cash from operating activities                                                                                          1 334    
   Issue of shares                                                                                                         1 557    
   Borrowings and advances                                                                                                 3 095    
   Acquisitions/improvements to investment properties                                                                     (4 703)   
   Dividends paid                                                                                                         (1 180)   

   Net proceeds from the sales of properties of R175 million, additional debt raised of R3.1 billion and share issuances of 
   R1.6 billion were utilised to acquire investment properties of R4.7 billion in South Africa and Spain.

   Net asset value (cents per share)                                                   
   The net asset value (NAV) of the group increased over the reporting period by 7.6% from 1 868 cents per share to 2 010 cents 
   per share at 31 March 2018.                                                    

   Extract from the summarised audited consolidated statement of group profit or loss for the year ended 31 March 2018
                                                                 2018                      2017   
                                                                                                               %       
                                                          R000         R000         R000          R000      variance       Notes    
                                                                                                                        
   Net profit from property operations(i)                         1 309 075                  1 246 232           5.0          (i)   
   Investment and other income                                      323 255                    198 523          62.8         (ii)   
   - Dividends received                                137 889                    87 021                        58.5       
   - Interest and other income                         185 366                   111 502                        66.2       
   Profit on sale of asset management subsidiary                          -                     54 813       (>100.0)      
   Share of income from associate (Atlantic Leaf)                    95 485                     45 251         111.0       
   Corporate and administrative expenditure                        (127 474)                   (96 155)        (32.6)       (iii)   
   Finance costs                                                   (367 808)                  (362 074)          (1.6)        (iv)   
   (i) Excludes straight-line rental income accrual.

   Full details of distributable income are set out in the condensed segmental report below.
   
   (i)    Net group profit from property operations
          Net group profit from property operations, excluding the straight-line income adjustment, increased by R63 million (5%), 
          from R1.25 billion to R1.31 billion. Castellana Properties Socimi SA (Castellana) contributed R174 million towards 
          the net profit from property operations. The prior year reflected six months of Synergy Income Fund Limited (Synergy) 
          net property revenue and the sale of a R2.4 billion portfolio to Gemgrow effective at 30 September 2016 resulted in net 
          property revenue for the current year being reduced by c.R100 million. The growth in net property revenue of the stable 
          portfolio was 6.5%.                                                                                                     
          
          Gross rental receivables (tenant arrears)
          Group tenant arrears were R87.7 million at year-end or 4.9% of the gross rental income (March 2017: 4.3%). The retail sector 
          reported lower sales growth in general, and this difficult trading environment has affected certain non-national tenants 
          negatively. Our property managers report similar trends across the various portfolios they manage.
          
          Impairment allowance - tenant receivables
          The allowance for the impairment of tenant receivables increased by R11 million from R32.4 million at 31 March 2017 to 
          R43.7 million at 31 March 2018, which is considered adequate at this stage. The impairment allowance represents 2.2% 
          of gross property revenue (March 2017: 1.8%). In total, 50% of group tenant arrears have been accounted for as impaired.
          A summary of the movement in the impairment allowance of trade receivables is set out below:
                                                                                                                     Group    
                                                                                                                      R000    
          Movements on the group allowance for impairment of trade receivables are as follows:                   
          At 1 April 2017                                                                                           32 389    
          Allowance for receivables impairment                                                                      27 151    
          Receivables written off during the year as uncollectable                                                 (15 831)   
          At 31 March 2018                                                                                          43 709    
          Rental written off                                                                                        15 832    
         
   (ii)   Group investment and other income
          Investment and other income increased by R125 million to R323 million, made up as follows:
          - Dividends received of R137.9 million during the year comprised of:
          Fairvest                                        R45.4 million
          Gemgrow                                         R92.5 million
                                                         R137.9 million
         
          The main reason for the increase in dividends from R87 million to R138 million is that Gemgrow has been reflected as 
          a listed investment for a full year, compared to six months in the prior year.
         
          - Interest and other income increased by R73 million, from R112 million to R185 million.
         
          During the year interest income increased by R94 million from interest earned in respect of a €93.2 million cross 
          currency interest rate swap, and an increase of R5 million in the interest charged on loans to executive directors 
          and senior management to fund the acquisition of Vukile shares, offset by a reduction in non-recurring sundry income.

   (iii)  Group corporate and administrative expenditure
          Group corporate administrative expenditure of R127.5 million is R31 million higher than the previous year's expenditure.
         
          The creation of a solid platform in Spain, with a high-calibre management and staff complement, has led to an increase in 
          corporate costs, namely:
          - An additional R9.3 million for a full 12 months period (March 2017: three months) which also incorporates additional 
            legal and other fees incurred in the acquisition of investment properties in June and December 2017.
          - Additional audit fees and additional staff costs incurred in Castellana, mainly from September 2017, have added 
            R11 million to the year-on-year increase.
         
          The increase in Vukile's short and long-term bonus schemes of R7.5 million also contributed to the rise in group 
          corporate administration costs.
         
   (iv)   Group finance costs
          Group finance costs increased marginally by R6 million, from R362 million to R368 million.
         
          - During the year, the group repaid bank debt and corporate bonds amounting to R813 million and R240 million respectively, 
            which resulted in a total interest saving of R56 million.
         
          Included in the prior year's group finance cost was interest relating to Synergy (renamed Gemgrow) as a subsidiary, which 
          is now excluded as Gemgrow is recorded as a listed investment. This resulted in a R46 million reduction in finance costs.
         
          These reductions/savings were offset by:
          - New corporate bonds totalling R572 million issued during the year, incurring interest of R45 million.
          - The interest impact of new € debt drawn from local banks off Vukile's balance sheet of €97.7 million to fund the 
            additional shares issued to Vukile by Castellana, to part fund the acquisition of the 11 retail parks and the acquisition 
            of Alameda and Del Pinatar amounted to c.R23 million.
          - Following the restructure of new/replacement Spanish debt of €146 million, Castellana's funding costs increased by 
            R40 million. This restructure was implemented to conform with Vukile's debt policies. The increased debt facilities 
            were used to part fund the acquisition of the 11 retail parks, Alameda and Del Pinatar. This new debt is compared to the 
            €11 million debt in place in the prior year. This debt is non-recourse to Vukile and secured against Spanish assets only.
         
          The average cost of finance (including amortisation of capital raising fees) for the year equates to 5.74%, with 
          interest-bearing term debt fully hedged (March 2017: 95.1%).

   (v)    Listed investments
          Fairvest - 31.4%
          Fairvest owned 43 properties valued at R2.8 billion at its financial year-end of 31 December 2017, or R65 million per 
          property. The portfolio comprised 95.8% retail and 4.2% office properties.
        
          Fairvest continues to focus on the lower LSM retail market, similar to Vukile's strategy, but targeting smaller properties. 
          Fairvest's management has forecast a distribution growth of 9% to 10% for the period ending 30 June 2018.
        
          Vukile acquired 30.4 million shares in Fairvest in September/October 2017, at a weighted average price of R2.01 per share.
        
          Vukile owned 270 394 812 shares in Fairvest at 31 March 2018. Dividends of R45.4 million were received during the year 
          ended 31 March 2018. Dividends calculated on a full 12-month period equate to a yield of 9% based on the valuation of 
          Fairvest's shares at year-end.
        
          Gemgrow - 26.3%
          Vukile owned 4 691 084 A shares and 114 438 564 B shares in Gemgrow at year-end.
        
          Gemgrow's management has forecast dividend growth for the B shares of 7% to 9% and 5% for the A shares, for the year 
          ending 30 September 2018.
        
          Dividends received in respect of the A and B shares held by Vukile for the year ended 31 March 2018 amounted to R92.6 million.
        
          As part of the Vukile and Arrowhead Properties Limited (Arrowhead) asset exchange agreement set out in a circular to 
          Synergy shareholders dated 26 September 2016, Synergy disposed of its portfolio of retail properties to Vukile in exchange 
          for most of Vukile's higher yielding office and industrial assets. As part of this asset exchange Vukile and Arrowhead 
          provided income guarantees in respect of the assets sold by both companies to Synergy (Gemgrow). As the actual net property 
          revenue for the guarantee period ended 30 September 2017 was lower than the net of the guarantee given by both parties, 
          this resulted in Vukile selling 3 748 549 Gemgrow B shares for R1 to place the parties in a comparable position. This 
          resulted in the loss on sale of listed investments of R26.2 million.
        
          Vukile does not consider this investment core to its strategy and will seek to dispose of this investment at an appropriate 
          time and price, in order to reinvest the proceeds into investment opportunities in Spain or South Africa.
        
   (vi)   Investment in associate
          Atlantic Leaf - 34.9%
          Atlantic Leaf's assets have increased by 14% to £363 million at 28 February 2018 while total revenue has increased by 13% 
          to £24.1 million for its financial year ended 28 February 2018.
        
          The company's focus on the UK industrial and warehouse distribution centres, an attractive market segment, has provided 
          strong real growth in distributions of 7%, from 8.5 pence to 9.1 pence for the year ended 28 February 2018.
        
          Following Vukile's participation in an accelerated equity book build undertaken by Atlantic Leaf, Vukile received 
          23 152 709 Atlantic Leaf shares at a subscription price of R17.60 per share (£1.015) on 30 September 2017. As a result 
          of this, Vukile's aggregate shareholding in Atlantic Leaf increased to 65 951 117 shares or 34.9% of the enlarged issued 
          share capital of Atlantic Leaf, resulting in an obligation on Vukile under the Securities (Takeover) Rules of Mauritius 
          to make a mandatory offer for all the voting shares in Atlantic Leaf not already owned by Vukile, at a consideration of 
          R17.60 per share.                                                                                                     
        
          The offer was accepted by shareholders holding 7 489 Atlantic Leaf shares, resulting in Vukile's shareholding in 
          Atlantic Leaf increasing to 65 958 606 shares.
        
          Dividends of R87 million were received during the year to 31 March 2018. Vukile's share of equity accounted profits 
          from Atlantic Leaf for the year ended 31 March 2018 amounted to R95.5 million. Dividend income has generated a c.9.5% 
          yield in pound sterling for Vukile based on the carrying value of the investment in Atlantic Leaf at year-end of R1.2 billion.
        
          Atlantic Leaf's management are forecasting a dividend of 9.55 pence per share for the year ending 28 February 2019, or a 
          5% growth in dividends. As 75% of the dividends received by Vukile are subject to forward exchange contracts, the total 
          Rand year-on-year growth in dividends from Atlantic Leaf is forecast at c.9.9%.
        
          Atlantic Leaf continues to perform in line with expectations, but given its high cost of equity and yield compression in 
          its preferred asset class in the UK. There are limited opportunities to invest further in this current financial year but 
          Vukile will work with management to unlock value.
        
   (vii)  Investment in subsidiary
          Castellana - 98.74%
          Further to Castellana's acquisition of 11 retail parks for €193 million in June 2017 and in line with Vukile's expansion 
          strategy in Spain, further acquisitions were made in December 2017 as follows:
          - Alameda Park (a shopping centre and retail park) adjacent to Castellana's Kinepolis Retail and Leisure Centre, 
            at a purchase price of €54.6 million.
          - Pinatar Park (newly built retail park) at a purchase price of €10.7 million.
         
          The total purchase price including transaction costs amounted to €67.8 million.
         
          The seller of Alameda Park has provided Castellana with a minimum income guarantee as follows:
          - Year one - €3.49 million.
          - Year two - €3.56 million.
          - Year three - €3.65 million.
         
          Key financial measures
                                                              March 2018
          Cash dividends (net of withholding                                 Declared and paid to Vukile in May 2018
          taxes of 2.66%)                                  €10.4 million     for year ended 31 December 2017    
          Investment properties                             €308 million
          Interest-bearing debt                             €146 million
          Loan to value ratio                                      47.4%
          Loan to value ratio net of cash                          42.2%
         
          It should be noted that under Spanish law, Castellana and its subsidiaries are required to utilise Spanish GAAP in 
          the preparation of their individual annual financial statements and also require Castellana's consolidated annual 
          financial statements to be prepared under International Financial Reporting Standards (IFRS) and these consolidated
          IFRS financial statements have been used in the Vukile group's consolidation, in terms of the basis of preparation 
          as set out in note 10.

   (viii) Group borrowings                                                                                       
          The group's finance strategy is to optimise funding costs and minimise refinance risk. Total group debt as at 
          31 March 2018 amounted to c.R7.1 billion. A detailed breakdown is provided below:
                                                                      Rm
          Foreign Spanish funders (€)                              2 128     Secured only against Castellana's balance sheet    
          Local funders (€)                                        1 613             
          Local funders (£)                                          476     Secured against Vukile's SA balance sheet                                                    
          Local funders (R)                                        1 105                                                        
          DMTN (R)                                                 1 749     Partly secured against Vukile SA balance sheet     
          Total                                                    7 071
         
          Vukile's funding of c.R7 billion (includes R77 million commercial paper issued by Vukile to its Namibian subsidiaries 
          and which is eliminated on consolidation reducing group debt to R6.9 billion), is well diversified across a number of 
          funders, in line with its strategy of reducing refinancing risk.
         
                                                                                                      Debt %                 
                                                                                         Debt       exposure            Swaps 
          Funder                                                                         R000       per bank             R000                
          Absa                                                                      1 286 156          18.19        2 567 829    
          Banco Popular                                                               164 253           2.32          164 253    
          Banco Santander                                                             855 857          12.10          855 857    
          Caixabank                                                                 1 107 548          15.66        1 107 548    
          DMTN term debt                                                            1 432 000          20.25                -    
          DMTN corporate paper                                                        317 000           4.48                -    
          Investec                                                                    544 019           7.69          926 911    
          Nedbank                                                                     100 000           1.41                -    
          RMB                                                                         364 057           5.15           36 433    
          SCM                                                                          81 666           1.15                -    
          Standard Bank                                                               818 324          11.57          928 511    
          Grand total                                                               7 070 880         100.00        6 587 342    
         
          The Vukile group's loan and swap expiry profile at 31 March 2018 is provided below:
         
                                             2019       2020       2021       2022       2023       2024      2025      Total    
          Loan expiry profile Rm            1 631(1)   1 011      1 381      1 274        833        941         -      7 071    
          Swap expiry profile Rm              273        463      1 374      1 796      1 495      1 164        22      6 587    
          Loan expiry profile (%)            23.1       14.3       19.5       18.0       11.8       13.3         -        100    
          Swap expiry profile (%)             4.1        7.0       20.9       27.3       22.7       17.7       0.3        100    
          (1) Includes R77 million commercial paper issued by Vukile to its Namibian subsidiaries.
          
          The strategy of ensuring that no more than 25% of debt expires in any one financial year has been achieved.
         
          A summary of group debt ratios at 31 March 2018 is provided below:
                                                                                       Group      South Africa          Spain    
                                                                                        R000              R000           €000    
          Total debt (excluding access facilities                                                                   
          and commercial paper)                                                    6 504 566         4 376 908        146 000    
          Interest-bearing debt hedged (%)                                            101.27             101.9         100.00    
          Debt maturity profile (years)                                                  2.7               1.9            4.6    
          Swaps - maturity profile (years)                                               3.6               3.1            4.6    
          Directors' valuation loan to value ratio                                                                  
          (excluding MTM of derivatives)(1) (%)                                         32.9              29.1           47.4    
          Gearing ratio(3) (%)                                                          29.6              28.0           42.7    
          Directors' valuation loan to value ratio                                                                  
          (excluding MTM of derivatives) and net of cash (%)                            28.2              24.6           42.2    
          External valuation loan to value ratio                                                                    
          (excluding MTM of derivatives)(2) (%)                                         33.9              30.2           47.4    
          Interest cover ratio (times)                                                   3.2               3.1            3.8    
          (1) Directors' valuation loan to value (LTV) ratio calculated as a ratio of interest-bearing debt divided by the sum of 
              (i) the amount of the most recent directors' valuation of all the properties in the Vukile group property portfolio, 
              on a consolidated basis and (ii) the market value of equity investments.
          (2) External valuation LTV loan to value ratio calculated as a ratio of interest-bearing debt divided by the sum of (i)
              the amount of the most recent external valuation of all the properties in the Vukile group property portfolio, on 
              a consolidated basis and (ii) the market value of equity investments.
          (3) Gearing is calculated as a ratio of total interest-bearing borrowings to total assets.
          
          Undrawn available facilities at 31 March 2018
          Undrawn available facilities amount to c.R489 million and are detailed as follows:
                                                                                    Facility          Facility       Facility     
                                                                                      amount             drawn      available    
                                                                                        R000              R000           R000    
          Absa RCF(1)                                                                350 000                 -        350 000    
          Investec access                                                            100 000            60 472         39 528    
          RMB access                                                                 150 000           148 843          1 157    
          RMB term (EUR/ZAR)                                                         163 344            65 214         98 130    
          Grand total                                                                763 344           274 529        488 815    
          (1) A two-year revolving credit facility has been concluded post-year-end increasing this access facility from 
              R350 million to R850 million.                                                 
         
          Our headroom facilities have therefore, significantly increased since year-end.
         
          Ratings
          Global Credit Rating Company (Pty) Ltd (GCR) recently affirmed an A corporate rating with a positive outlook and an 
          AA+ (RSA) rating on Vukile's senior secured bonds.
         
          Group debt movement during the year ended 31 March 2018
          During the 12-month period ending 31 March 2018:
          - c.R813 million of bank debt was repaid.
          - VKE03 R240 million corporate bond was repaid.
          - R500 million of new corporate bonds were issued (VKE09 R378 million and VKE10 R122 million) to repay VKE03 and 
            bank debt.
          - R72 million (VKE10 tranche 2) corporate bond was issued to fund senior management's share purchase plan.
          - R317 million of corporate paper was refinanced (VKC23 R140 million, VKC24 R100 million and VKC25 R77 million).
          - c.R144 million of access facilities were utilised for South African development/expansion projects.
          - c.€137 million of EUR bank debt was entered into to acquire shares in Castellana to part fund the acquisition of 
            11 retail parks, Alameda and Pinatar.                                                 
          - c.€146 million of bank debt was restructured in December 2017; expiring between four and six years. This debt is 
            non-recourse to Vukile.                                                 
          - c. €146 million interest rate swaps were entered/restructured within Castellana, which swaps are non-recourse to Vukile.
          - Vukile concluded new interest rate swaps totalling c.R1.562 billion (R72 million, £2.675 million and c.€127.2 million), 
            at an estimated annualised additional cost of R5.7 million.                                                 
          - Vukile extended ZAR swaps amounting to c.R1 162 billion, at an estimated net annualised additional cost of R2.7 million.
          - ZAR swaps amounting to c.R716 million matured, were terminated or were restructured into a new currency.

          The group has complied with all the banks' LTV covenants of 50%. The group has also complied with the DMTN's LTV covenants 
          of 45% in respect of those properties mortgaged as security under the DMTN programme, and 50% in respect of total group debt 
          as a percentage of the value of total group investment properties and the market value of equity investments.
        
          Noteholders' approval was obtained under the DMTN programme to amend covenant terms to include the value of equity 
          investments in calculating the "V" in the LTV ratio and to increase the LTV ratio by 5% to 45% for the transactional 
          LTV and to 50% for the corporate LTV. Banks have similarly agreed or are in the process of amending their covenant 
          terms to include the value of equity investments in calculating LTV ratios, thereby achieving a common measurement 
          regime across the portfolio.                                                 
        
          Group foreign exchange currency hedges at 31 March 2018
          Vukile has adopted a strategy of hedging its foreign dividend exposure at c.75% over a three-year period in line with 
          anticipated dates of dividend receipts.
        
          EUR net income exposure - as at 31 March 2018
                                                     June      December          June      December          June      December          June    
                                                     2018          2018          2019          2019          2020          2020          2021    
          Dividend payment dates                        €             €             €             €             €             €             €    
          Interest cost on Vukile EUR debt(I)    (712 588)   (1 425 175)   (1 425 175)   (1 425 175)   (1 425 175)   (1 425 175)   (1 425 175)   
          Existing CCIRS hedge interest                                                                                           
          costs(I)                               (418 106)     (900 157)     (895 238)     (900 157)     (909 994)     (895 238)     (895 238)   
          Existing FEC hedges on dividends       (928 000)   (2 165 000)   (2 300 000)   (2 300 000)   (2 400 000)   (2 457 000)   (2 508 000)   
          Average FEC EUR/ZAR rate                16.0102       16.7111       17.7177       18.3974       19.1304       18.2643       18.9581    
          Unhedged dividend income                366 563       843 544       866 292       919 079       921 706       938 869       952 802    
          FEC hedges/(net distribution plus                                                                                       
          CCIRS hedge) (%)                          71.68         71.96         72.64         71.45         72.25         72.35         72.47    
          Average hedge (%)                         72.16
          (I) Funded out of Euro dividends receivable from Castellana.

          GBP net income exposure - as at 31 March 2018
                                                                    May      November           May      November           May      November    
                                                                   2018          2018          2019          2019          2020          2020    
          Dividend payment dates                                      £             £             £             £             £             £    
          Interest cost on Vukile GBP debt(I)                  (472 325)     (472 325)     (472 325)     (472 325)     (472 325)     (472 325)   
          FEC hedges on dividends                            (1 953 000)   (1 885 000)   (1 930 000)   (1 880 000)   (1 935 000)   (1 930 000)   
          Average FEC GBP/ZAR rate                              18.0295       18.5992       19.2221       19.9144       20.6192       21.3807    
          Unhedged dividend income                              608 771       755 921       783 476       780 709       791 668       829 647    
          FEC hedges/net distribution (%)                         76.24         71.38         71.13         70.66         70.97         69.94    
          Average hedge (%)                                       71.72
          (I) Funded out of GBP dividends receivable from Atlantic Leaf.
         
          Group cost of finance at 31 March 2018          
          Although debt costs are forecast to increase in each respective currency in FY19 compared with FY18, the overall cost is   
          expected to reduce from 5.74% to 5.20% in FY19, due to a change in funding mix and as a larger percentage of debt will be in 
          foreign currency over the full period in FY19 compared to FY18.          
         
          The make-up for the year ended 31 March 2018 of the historic weighted average interest cost of 5.74% comprises the following:
          - ZAR - 9.24%.                                  
          - EUR - 2.28%.                                  
          - GBP - 3.34%.                                  

3. Southern African property portfolio overview
   The Southern African property portfolio at 31 March 2018 consisted of 61 properties with a total 
   value of R14.5 billion (excluding the 20% non-controlling interest in Moruleng Mall) and gross 
   lettable area (GLA) of 937 463m2, with an average value of R238 million per property.

   The geographical and sectoral distribution of the Southern African portfolio is indicated in the 
   tables below. The portfolio is well represented in most of the South African provinces and Namibia. 
   Some 76% of the gross income is derived from Gauteng, KwaZulu-Natal, Namibia and Western Cape.

                                                                                          Total 
                                                                                      portfolio 
   Geographic profile                                                                         % 
   % of gross income                                                                            
   Gauteng                                                                                   37 
   KwaZulu-Natal                                                                             23 
   Namibia                                                                                    8 
   Western Cape                                                                               8 
   Limpopo                                                                                    6 
   Free State                                                                                 6 
   Northwest                                                                                  5 
   Mpumalanga                                                                                 4 
   Eastern Cape                                                                               3 
   
   Based on value, 91% of the Southern African portfolio is in the retail sector, followed by 4% in the 
   industrial, 3% in the office, 1% in the motor related and 1% in the residential sector.
   
   The tenant profile is listed in the table below:
                                                                          Total             
                                                                      portfolio          Retail    
   Tenant profile                                                             %               %
   % of GLA                                                                  
   A - Large national and listed tenants and major franchises                66              74    
   B - National and listed tenants, franchised and medium to large                           
       professional firms                                                    11               8    
   C - Other                                                                 23              18  
   
   The retail portfolio's exposure to national, listed and franchised tenants is 82% in total.
   
   The portfolio has low tenant concentration risk with the top 10 tenants accounting for 46.0% of total rent 
   and 54.4% of total GLA. Based on rent the STAR group is the single largest tenant, 
   with 8.3% of total rent (7.9% of total GLA), with Shoprite the second largest at 5.8% of total rent 
   (9.7% of total GLA).

   The top 15 properties, all of which are retail assets, have 84% exposure to national, listed and franchised 
   tenants and represent 57.3% of the Southern African portfolio value and 44.6% of the Southern African portfolio 
   GLA.
   
   Top 15 properties by value
                                                                          Directors'
                                                                           valuation
                                                                                  at
                                                           Rentable         31 March
                                                               area             2018             %      Valuation
   Property                            Location                  m2               Rm      of total           R/m2
   Boksburg East Rand Mall*            Gauteng               34 047            1 389           9.6         40 797    
   Pinetown Pine Crest                 KwaZulu-Natal         40 087              914           6.3         22 800    
   Durban Phoenix Plaza                KwaZulu-Natal         24 351              914           6.3         37 534    
   Gugulethu Square                    Western Cape          25 322              544           3.8         21 483    
   Soweto Dobsonville Mall             Gauteng               26 628              513           3.5         19 265    
   Queenstown Nonesi Mall              Eastern Cape          27 927              472           3.3         16 901    
   Oshakati Shopping Centre            Namibia               24 632              465           3.2         18 878    
   Phuthaditjhaba Maluti Crescent      Free State            21 538              412           2.8         19 129    
   Daveyton Shopping Centre            Gauteng               17 774              409           2.8         23 011    
   Moruleng Mall#                      Northwest             25 137              401           2.8         15 953    
   Germiston Meadowdale Mall**         Gauteng               31 861              399           2.8         12 523    
   Randburg Square                     Gauteng               40 767              397           2.7          9 738    
   Thohoyandou Thavhani Mall***        Limpopo               17 658              396           2.7         22 426    
   Bloemfontein Plaza                  Free State            38 255              341           2.4          8 914    
   Atlantis City Shopping Centre       Western Cape          22 115              331           2.3         14 967    
   Total top 15 properties                                  418 099            8 297          57.3         19 845    
   % of total portfolio                                        44.6             57.3
   % of retail portfolio                                       51.6             62.7
   *   Represents an undivided 50% share in this property.
   **  Represents an undivided 67% share in this property.
   *** Represents an undivided 33% share in this property.
   #   Represents 80% share in the company.

3.1 Valuation of Southern African portfolio
    The accounting policies of the group require that the directors value the entire portfolio every six months 
    at fair value. Approximately one-half of the portfolio is valued every six months, on a rotational basis, 
    by registered independent third-party valuers. The directors have valued the Southern African property 
    portfolio at R14.5 billion(1) as at 31 March 2018. This is R1.4 billion or 10.6% higher than the valuation 
    as at 31 March 2017. Acquisitions of R389 million (Thohoyandou Thavhani Mall 33% and Bloemfontein Jet) 
    exceeded sales of R171.3 million (Hartbeespoort Sediba Shopping Centre, Sandton Rivonia Tuscany, Pretoria 
    Hatfield 1166 Francis Baard Street and Pretoria Lynnwood undeveloped land). The value of the stable portfolio 
    increased by 8.6%. The calculated recurring forward yield for the portfolio is 8.2%.

    During the year all Southern African properties were valued by external valuers and the valuations by 
    Quadrant Properties (Pty) Ltd and Knight Frank (Pty) Ltd are in line with the directors' valuations.

    (1) The Southern African property portfolio overview takes into account Moruleng Mall at 80%, whereas in 
        the financial statements the Southern African property value reflects 100% of Clidet No 1011, which owns 
        Moruleng Mall.

3.2 Southern African property portfolio performance
                                                                               March         March         
    Financial performance for the stable portfolio (excluding                   2018          2017           %     
    acquisitions and sales)                                                       Rm            Rm      change
    Property revenue                                                           945.5         894.4         5.7    
    Recurring net property expenses                                           (152.4)       (149.6)        1.9    
    Net property income                                                        793.1         744.8         6.5    
    Property net expense ratios (%)                                             16.1          16.7                
    
    New leases and renewals in excess of 180 000m² with a contract value of R1.32 billion were concluded 
    during the year.

    Details of large contracts concluded:
                                                                Contract         Lease     
                                                                   value      duration    
    Tenant                       Property                             Rm         years    
    Pick n Pay                   Dobsonville Mall                   94.9            25    
    Barloworld South Africa      Bellville Barons                   43.3            10    
    Spar                         Ruimsig Shopping Centre            35.3            10    
    Pick n Pay                   Bloemfontein Plaza                 27.7            25    
    Food Lovers Market           Dobsonville Mall                   24.5            10    
    Dis-Chem                     Pine Crest                         15.8            10    
    Cashbuild                    Meadowdale Mall (67%)              14.7            10    
    Mr Price                     Pine Crest                         13.0             5    
    Betsa                        Dobsonville Mall                   12.7            10    
    Shoprite Checkers            Katutura Shoprite Centre           11.5             5    

    Expiry profile
    The lease expiry profile table reflects that 29%, based on rent, of the leases are due for renewal in 
    the 2019 financial year. Approximately 38% of leases are due to expire in 2022 and beyond (up from 25% 
    beyond 2021 in the prior year).

                                                                                                  Beyond 
                                                  March       March       March       March        March 
                                                   2019        2020        2021        2022         2022 
    Lease expiry % of rent                            %           %           %           %            % 
    Rent                                             29          18          15          11           27 
    Cumulative as at March 2018                      29          47          62          73          100 
    Cumulative as at March 2017                      48          65          75          85          100 

                                                                                                  Beyond  
                                                  March       March       March       March        March  
                                     Vacant        2019        2020        2021        2022         2022 
    Lease expiry % of GLA                 %           %           %           %           %            % 
    GLA                                 4.2          27          15          13           9           32 
    Cumulative as at March 2018         4.2          31          46          59          68          100 
    Cumulative as at March 2017         4.3          47          61          69          78          100 

    Vacancies
    At 31 March 2018, the portfolio's vacancy (measured as a percentage of gross rental) was 3.7% compared 
    to 4.2% at 31 March 2017. The retail portfolio vacancies based on rental decreased from 3.6% to 3.4%.

                                                                31 March      31 March    
                                                                    2018          2017    
    Vacancies (% of gross rental)                                      %             %    
    Retail                                                           3.4           3.6    
    Industrial                                                       6.0           7.2    
    Offices                                                         10.3          12.6    
    Motor related                                                    0.0           0.0    
    Total                                                            3.7           4.2    
    
    The vacancy per sector (measured as a percentage of gross lettable area) is indicated in the table 
    below.

                                                                31 March      31 March    
                                                                    2018          2017    
    Vacancies (% of GLA)                                               %             %    
    Retail                                                           3.9           3.8    
    Industrial                                                       3.5           7.2    
    Offices                                                         13.5           8.4    
    Motor related                                                    0.0           0.0    
    Total                                                            4.2           4.3    
                                                                                          
    GLA summary                                                                 GLA m²    
    Balance at 1 April 2017                                                    936 458    
    GLA adjustments                                                              2 036    
    Disposals                                                                  (24 847)    
    Acquisitions and extensions                                                 23 816    
    Balance at 31 March 2018                                                   937 463    
                                                                                          
    Vacancy summary                                              Area m²             %    
    Balance at 31 March 2017                                      40 167           4.3    
    Less: Properties sold since 31 March 2017                     (2 745)         11.0    
    Remaining portfolio balance at 31 March 2017                  37 422           4.1    
    Leases expired or terminated early                           187 308                  
    Renewal of expired leases                                   (117 141)                  
    Contracts to be renewed                                      (37 858)                  
    New letting of vacant space                                  (30 050)                  
    Balance at 31 March 2018                                      39 681           4.2    
    
    Base rentals (excluding recoveries)
    The weighted average monthly base rental rates per sector, between 31 March 2017 and 31 March 2018, are 
    set out in the table below.

                                                                      March           March      Escalations    
    Weighted average base rentals (R/m²) excluding recoveries          2018            2017                %    
    Retail                                                           130.44          122.88              6.2    
    Industrial                                                        54.42           51.96              4.7    
    Offices                                                           95.74           90.25              6.1    
    Motor related                                                    128.64          135.46             (5.0)   
    Total                                                            122.77          115.42              6.4    
    
    The increased average rental rates on the total portfolio is due to the focused retail exposure.

    The average contractual rental escalation of 7.2% is slightly lower than the previous year (7.4%). Positive 
    reversions of 5.1% were achieved across all sectors with retail at 5.2% and industrial at 7.3%. No transactions 
    were concluded in the office sector during the year.

    Expense categories and ratios
    The top four expense categories contribute 81% of the total expenses. These are: government services (45%), 
    rates and taxes (17%), cleaning and security (12%) and property management fees (7%).

    The group continuously evaluates methods of containing costs in the portfolio. The stable portfolio's recurring 
    net cost to income ratio has improved from 16.7% in March 2017 to 16.1% in March 2018.

3.3 Southern African portfolio - developments, acquisitions and sales
    Acquisitions
    Thavhani Mall, Thohoyandou, Limpopo
    Acquired a 33.3% stake for R367 million at a guaranteed initial yield of 8%
    Size: 53 509m2
    Occupancy: fully occupied
    
    Thavhani Mall is a new regional shopping centre that opened in August 2017 with a strong national tenant 
    component of 89%, including Edgars, Spar, Woolworths and Pick n Pay. It caters to a high-growth node 
    with over 87 000 households. The centre is trading exceptionally well. It is located in the heart of a 
    growing mixed-use urban precinct designed to be the future economic hub of Northern and Eastern Limpopo, 
    which is under development.
 
    Acquiring Thavhani Mall allowed Vukile to enter and establish a dominant position in this Limpopo market 
    with an asset ideally matched to its investment strategy.

    Completed upgrade projects
    Phoenix Plaza, Durban, KwaZulu-Natal
    Phoenix Plaza underwent a R35 million upgrade that refreshed and brightened the mall significantly with new 
    lighting, vibrant colours, fresh entrances and new façades. Internal sections of the mall were also 
    refurbished and new public ablution facilities added.
    
    The upgrade is defensive and modernises Phoenix Plaza to ensure it remains the primary shopping destination 
    of choice for its loyal customer base.

    Dobsonville Mall, Soweto, Gauteng
    Dobsonville Shopping Centre was given a R117 million major expansion and upgrade with a 9.5% projected yield 
    on capital expenditure. Its total GLA is now 26,628m2. The project was completed in September 2017 and added 
    a new mall, food court and improved tenant mix to the centre, while also converting office space beside the 
    centre into better performing retail space linked to the original centre. It has been modernised in line with 
    the latest shopper and retailer expectations and changed its name from Dobsonville Shopping Centre to Dobsonville 
    Mall.

    The upgrade strengthens the overall variety and experience at the centre, thus elevating its appeal to 
    retailers and customers alike. It has been optimised for the next generation of shoppers.

    Bellville: Barons VW building
    The Bellville Barons VW building is situated at the Durban Road intersection with the N1 highway in Bellville
    Western Cape.

    The last phase of the reconfiguration of the vacant premises into a Barloworld Ford dealership complete with 
    showrooms and a workshop, was completed in August 2017. The first phase consisted of the workshop and services 
    areas while the new and second-hand car show rooms and offices were completed in the second phase.

    The total capex was R35 million. A 10-year lease has been concluded with Barloworld Auto. A yield of 15.1%, net 
    of costs, was achieved.

    Barloworld is now considering the possibility of relocating the Western Cape Ford spare parts facility to this 
    property as well.

    Larger redevelopment projects in progress
    Maluti Crescent, Phuthaditjhaba, Free State
    Maluti Crescent, formerly Setsing Crescent, is undergoing a major R368 million redevelopment with a projected 
    yield of c.8.3% on capital expenditure. On the back of strong tenant demand, this innovative redevelopment is 
    transforming the existing strip centre into a fully enclosed mall with three levels of parking. The centre is 
    currently anchored by SuperSpar, Game, Cashbuild and Woolworths with all five major banks and a very strong 
    national fashion contingent. Building on this, the redevelopment will increase the GLA from 21 538m² to 33 895m2, 
    double the centre's current parking, add a new taxi rank of 100 bays and a second food anchor, Pick n Pay. New 
    fashion stores joining the centre include The Fix, Jet, Jam Clothing, Daniel J and various food outlets, including 
    the first Nando's restaurant to open in the area. Woolworths will expand and new specification stores will be 
    introduced by Truworths and Identity, Foschini, Sportscene, Markham, Totalsports and Exact. All this will make 
    Maluti Crescent the dominant mall in the area by consolidating trade into a single node. Building work started 
    in October 2017 and is currently progressing well for completion by March 2019.
    
    The major upgrade responds to shopper and retailer demand. It builds on the centre's excellent trading metrics 
    and unlocks further income enhancement.

    Pine Crest Shopping Centre: extension and upgrade
    Vukile acquired the remaining 50% share of Pine Crest Shopping Centre in Pinetown, KwaZulu-Natal in March 2017. 
    Pine Crest is a 40 087m² small regional shopping centre over three levels with a multi-level parkade and an 
    average footfall of 940 000 per month. The centre has served the community for over 30 years and offers a quality 
    retail shopping experience with over 90 stores, including many of the biggest clothing brands in the country. 
    Anchor tenants include Game, Pick n Pay, Woolworths and a new Dis-Chem which was introduced in July 2017.

    The extension and upgrade project was approved in December 2017 at a cost of R167 million and a projected net 
    yield of 7.9%. In addition an amount of R12 million was budgeted for required maintenance to the roofs, 
    air-conditioning and escalators. The existing ground floor mall will be extended into the ground floor under 
    cover parking area and a new off-street entrance will be provided to cater for the increasing number of shoppers 
    who arrive on foot from the nearby taxi rank. An additional set of escalators will be installed to allow for 
    easier access to the first and second level malls. Tenants targeted for the mall extension are financial services 
    retailers to complement the existing banks on this level as well as bigger box retailers. Leasing negotiations 
    are progressing well.

    The estimated completion date is 31 July 2019.

    Current South African portfolio projects
    Our major development capital expenditure projects approved and incurred to 31 March 2018 are:

                                                                                                     Budget    
                                                                                                      April    
                                                                                                       2018    
                                                                                       Paid to           to    
                                                                                      31 March        March     
                                                                        Approved          2018         2019    
    Approved projects                                  Completion           R000          R000         R000
    Bellville: Barons Ford                             30 July 17         35 400        34 179        1 221    
    Dobsonville Centre Extension                   31 August 2017        117 000       113 211        3 789    
    Durban: Phoenix Plaza                             31 May 2018         35 000        29 749        5 251    
    Durban: Pine Crest(I)(II)                        31 July 2019        178 640         5 373      115 568    
    Meadowdale Mall                               30 October 2016         16 264        12 227        4 037    
    Phuthaditjhaba: Maluti Crescent(I)              31 March 2019        367 570        45 738      251 826    
    Van Riebeeckshof, Welgedacht(I)                 30 April 2019         35 500           909       32 591    
                                                                         785 374       241 386      414 283    
    (I)  Further payments will be made after 31 March 2019.
    (II) Includes R11.8 million maintenance capex.
      
    The projects will be financed out of the proceeds from property sales and existing bank facilities.

    Southern African property sales
    Vukile concluded property sales during the year of R182 million, which supported our strategy to focus on 
     a low risk, high-quality portfolio of retail properties.

                                                       Sales
                                                       price          %
                                                        R000      yield         Dates of sale
    Pretoria Lynnwood Erf 493 (vacant land)            2 900                    2 August 2017    
    Sandton Rivonia Tuscany Place Section 6            4 970       11.2       24 October 2017    
    Sandton Rivonia Tuscany Place Section 7            7 810       14.1       24 October 2017    
    Sandton Rivonia Tuscany Place Section 10          12 070        9.6       24 October 2017    
    Sandton Rivonia Tuscany Place Section 5           12 780       12.8       24 October 2017    
    Sandton Rivonia Tuscany Place Section 9           14 200       11.6       24 October 2017    
    Pretoria Hatfield 1166 Francis Baard Street       16 500        8.7      8 September 2017    
    Sandton Rivonia Tuscany Place Section 8           19 170        6.1       24 October 2017    
    Hartbeespoort Sediba Shopping Centre              91 500       10.3      27 November 2017    
                                                     181 900       10.1

4. Spanish property portfolio overview
   The Spanish property portfolio at 31 March 2018 consisted of 13 properties with a total value of 
   €308 million (based on external valuations) and GLA of 172 973m², with an average value of 
   €23.7 million per property.
   
   The geographical and sectoral distribution of the Spanish portfolio is indicated in the tables below.
   
                                                                                        Total
                                                                                    portfolio
   Geographic profile % of GLA                                                              %
   Granada                                                                                 34 
   Badajoz                                                                                 15 
   Madrid                                                                                  14 
   Huelva                                                                                  12 
   Asturias                                                                                10 
   Murcia                                                                                   6  
   Caceres                                                                                  4  
   Seville                                                                                  3  
   Castellon                                                                                2  
   
   Based on value, 92% of the Spanish portfolio is in the retail sector and 8% is in the office sector.
   
   The tenant profile is listed in the table below:
                                                                                       Retail    
   Tenant profile % of GLA                                                                  %    
   Large national and international tenants                                                93
   Local tenants                                                                            7

   Castellana's top 10 tenants account for 62.0% of total rent and 63% of total GLA. Based on rent Media Markt 
   is the single largest tenant, with 11% of total rent. Konecta is the largest tenant by GLA (10.1%).

                                                                               External
                                                                               value at
                                                                Rentable       31 March
                                                                    area           2018             %      Valuation
   Property                                      Location             m2             €m      of total           €/m2
   Alameda Retail Park                           Granada          27 256             55          18.0          2 029    
   Parque Oeste*                                 Madrid           13 604             49          16.0          3 632    
   Kinepolis Retail Park and Leisure Centre      Granada          25 988             46          14.9          1 768    
   Parque Principado                             Asturias         16 396             33          10.6          1 988    
   Marismas Del Polvorín                         Huelva           20 000             29           9.4          1 438    
   Konecta Madrid                                Madrid           11 046             20           6.5          1 822    
   La Heredad                                    Badajoz          13 653             19           6.2          1 406    
   La Serena**                                   Badajoz          12 605             15           5.0          1 219    
   Pinatar Park                                  Murcia           10 637             12           3.8          1 094    
   Mejostilla                                    Caceres           7 281              9           2.8          1 180    
   Motril                                        Granada           5 559              8           2.7          1 513    
   Ciudad del Transporte                         Castellon         3 250              7           2.3          2 175    
   Konecta Seville                               Seville           5 698              6           1.8            986    
   Total portfolio                                               172 973            308           100          1 781    
   *  This park comprises two adjacent properties that were acquired in two separate companies, but has been treated 
      as a single combined property for reporting purposes.
   ** This park comprises two adjacent properties that were acquired in two separate companies, but has been treated 
      as a single combined property for reporting purposes.

   Valuation of the Spain portfolio
   During the year all the properties were valued by external valuers, Colliers International.

   Expiry profile
   The Spanish properties' lease expiry profile table reflects that 2%, based on rent, of the leases are due for 
   renewal in the 2019 financial year. Approximately 86% of leases are due to expire in 2028 and beyond.
   
                                                 March       March       March       March        March     
                                                  2019        2020        2021        2022         2023    
   Lease expiry % of rent                            %           %           %           %            %    
   Rent                                              2           0           1           1            1    
   Cumulative as at March 2018                       2           2           3           4            4    

                                                                                                 Beyond     
                                     March       March       March       March       March        March     
                                      2024        2025        2026        2027        2028         2028    
   Lease expiry                          %           %           %           %           %            %    
   Rent                                  1           0           0           2           8           85    
   Cumulative as at March 2018           5           5           5           7          15          100    


   Break profile
   Castellana's lease break profile table reflects that 12%, based on rent, of the leases have break options 
   in the 2019 financial year.
   
                                                 March       March       March       March        March     
                                                  2019        2020        2021        2022         2023    
   Lease break % of rent                             %           %           %           %            %    
   Rent                                             12          11          22          12           18    
   Cumulative as at March 2018                      12          23          46          58           76    

                                                                                                 Beyond     
                                     March       March       March       March       March        March     
                                      2024        2025        2026        2027        2028         2028    
   Lease break % of rent                 %           %           %           %           %            %    
   Rent                                  3           3           2           0           0           16    
   Cumulative as at March 2018          79          82          84          84          84          100    

   Vacancies
   At 31 March 2018, the Spanish portfolio's vacancy (measured as a percentage of gross lettable area) was 
   1.5% excluding the development vacancy at Kinepolis Leisure Centre.
   
                                                                                  31 March     
                                                                                      2018    
   Vacancies (% of GLA)                                                                  %    
   Retail                                                                              1.5    
   Offices                                                                             0.0    
   Total                                                                               1.5    

   Base rentals (excluding recoveries)
   The weighted average monthly base rental rates per sector, are set out in the table below.
   
                                                                                  31 March     
   Weighted average base rentals (€/m2)                                               2018    
   Retail                                                                             9.24    
   Offices                                                                            9.05    
   Total                                                                              9.22    

   Spain developments, acquisitions and sales
   Acquisitions
   Retail park portfolio
   Acquired 11 retail parks for €193 million at an initial yield of 6.2%
   Size: 118 337m2
   Occupancy: 98%
   
   The acquisition gives the company immediate scale in the region through a well-diversified portfolio of 11 
   retail parks across Spain. The total GLA of the portfolio is 118 337m² and 95% of gross revenue is derived 
   from leading Spanish national and international retail tenants including Media Markt, Sprinter, Worten, Aki 
   and Mercadona. The retail parks in the portfolio are high quality and newly built. Retail rentals for prime 
   subregional retail parks are in the region of €10 to €12 per m2 per month. The portfolio has an average 
   monthly rental of €9.18 per m2 providing room for income growth.
   
   Alameda Park
   Acquired 100% of Alameda Park for €54.6 million at an initial yield of 6.4%
   Size: 25 456m2
   Occupancy: 95.4%
   
   Alameda Park is a well-located retail park and shopping centre located adjacent to the Kinepolis complex. 
   Anchor tenants include Decathlon, Mercadona and Maisons du Monde. The centre boasts a catchment area of 
   586 000 people. This acquisition has cemented Castellana's position as the sole owner of the primary 
   retail node in Northern Granada.

   Pinatar Park
   Acquired 100% of Pinatar Park for €10.7 million at an initial yield of 7.0%
   Size: 10 637m2
   Occupancy: 100%
   
   Pinatar Park is a strong fully let convenience retail park located in San Pedro Del Pinatar, in Murcia. Anchor 
   tenants include AKI, Economy Cash and Jysk. The centre is newly built with a WALE of five years. Castellana 
   has the option to acquire the adjacent land in order to expand.
   
   Larger redevelopment projects in progress
   Kinepolis Leisure Centre
   Kinepolis Leisure Centre is undergoing a major upgrade and expansion with a projected yield of c.10.70% on 
   capital expenditure of €5.4 million. On the back of strong tenant demand, this innovative upgrade will improve 
   the centre by increasing natural light, increasing shopfronts, opening up the façade and inserting floor to 
   ceiling windows. In addition, the internal finishes will be upgraded and a state of the art kids play area will 
   be installed to better service the Kinepolis customer. There is currently strong demand from retailers with the 
   upgrade currently 70% pre-let.
   
   The major upgrade responds to shopper and retailers demand and unlocks further value and will be accretive.
   
   Property sales
   No property sales were concluded during the period.

5. International expansion
   In line with its focused strategy, Vukile has decided that for the short to medium term, its only 
   international expansion will be focused on Spain and no new areas of investment will be targeted.  
   
6. Prospects
   Consistent with our strategy, in the year ahead we will continue to look for further expansion 
   opportunities in South Africa and Spain, and, where possible, to recycle non-core assets into our 
   two core markets. We expect balance sheet metrics to remain largely in line with those of FY18.  
   
   While we are buoyed by the improving political and economic climate in South Africa, and the resultant 
   uptick in consumer confidence, we are yet to see a tangible improvement in the trading environment. 
   As such, we anticipate another challenging year ahead, largely in line with the operating conditions 
   we endured over the past year. We do, however, expect to see an improvement in trading activity 
   beyond next year.  
   
   We are confident that our portfolio is very well structured to continue delivering a solid operating 
   performance as a result of the defensive nature of its tenant mix and shopper markets. We are also 
   well positioned to benefit from an increase in consumer activity, should it materialise. 
   
   In Spain, Castellana is set to continue growing apace as we are experiencing strong deal flow and 
   seeing the benefits of the operating infrastructure we have created on the ground. Moreover, its 
   profitability should increase comfortably in the year ahead as certain once-off costs will not recur. 
   We look forward to its first full year of contributing to Vukile's income streams in FY19. Castellana 
   is expected to list on the Madrid Junior Board (MAB) at the end of July 2018 by way of an introductory 
   listing. We do not plan to raise external capital on this listing.
   
   Assuming no material adverse change in trading conditions and large corporate failures, Vukile expects 
   to deliver growth in dividends of between 7.5% to 8.5% in the year ahead. Forecast rental income is 
   based on contracted escalations and market related renewals. 
   
   This forecast has not been reviewed or reported on by the company's auditors. 
   
7. Post-period events
   In line with IAS 10 Events after the Reporting Period, the declaration of the dividend occurred after 
   the end of the reporting period, resulting in a non-adjusting event that is not recognised in the 
   financial statements.
   
   The board approved a final dividend on 28 May 2018 of 96.16625 cents per share for the six months ended 
   31 March 2018 amounting to R754.7 million.  
   
   In line with Vukile's previously communicated strategy of increasing its exposure in Spain, Vukile's 
   subsidiary Castellana, in which Vukile currently has a 98.7% shareholding, has entered into an agreement 
   with Heref Habaneras Socimi S.A.U to acquire the immovable property known as the Habaneras Shopping 
   Centre (Habaneras) for an aggregate consideration of €80.6 million before costs. This acquisition was 
   funded through a €42.3 million loan from Aareal Bank (non-recourse to Vukile) and an increase in Vukile's 
   equity investment into Castellana of €42.7 million.   
   
8. Declaration of a cash dividend with the election to reinvest the cash distribution in return for 
   Vukile shares
   Notice is hereby given of a gross dividend amounting to 96.16625 cents per share out of distributable income 
   for the six-month period to 31 March 2018. 
   
   Shareholders will be entitled to elect (in respect of all or part of their holding) to reinvest the cash 
   distribution of 96.16625 cents per share, in return for shares (the share reinvestment alternative), failing 
   which they will receive the cash dividend in respect of all or part of their holdings.
   
   A circular providing further information in respect of the cash dividend and the share reinvestment 
   alternative will be posted to shareholders on or about 31 May 2018. 
   
   Shareholders who have dematerialised their shares are required to notify their duly appointed Central 
   Securities Depository Participant (CSDP) or broker of their election in the manner and time stipulated in 
   the custody agreement governing the relationship between the shareholder and their CSDP or broker. 
   
   Tax implications
   Vukile was granted REIT status by the JSE Limited with effect from 1 April 2013 in line with the 
   REIT structure as provided for in the Income Tax Act, No. 58 of 1962, as amended (the Income Tax Act) 
   and section 13 of the JSE Listings Requirements. 
   
   The REIT structure is a tax regime that allows a REIT to deduct qualifying dividends paid to investors, 
   in determining its taxable income. 
   
   The cash dividend of 96.16625 cents per share meets the requirements of a "qualifying distribution" for 
   the purposes of section 25BB of the Income Tax Act (a qualifying distribution) with the result that:
   - Dividends received by resident Vukile shareholders must be included in the gross income of such 
     shareholders (as a non-exempt dividend in terms of section 10(1)(k)(i)(aa) of the Income Tax Act), 
     with the effect that the dividends are taxable as income in the hands of the Vukile shareholder. 
     These dividends are however exempt from dividends withholding tax, provided that the South African 
     resident shareholders 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 declaration that the distribution is exempt from dividends tax.
    - 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 distribution, if such documents 
      have not already been submitted.
   - Dividends received by non-resident Vukile shareholders will not be taxable as income and instead 
     will be treated as ordinary dividends but which are exempt in terms of the usual dividend exemptions 
     per section 10(1)(k) of the Income Tax Act. It should be noted that dividends received by non-residents 
     are subject to dividends withholding tax at a rate of 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 shareholder. Assuming dividends withholding tax will be withheld at a rate of 20%, the 
     net distribution amount due to non-resident shareholders is 76.9330 cents per share. A reduced dividend 
     withholding rate in terms of the applicable DTA, may only be relied upon if the non-resident holder 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 declaration that the dividend is subject to a reduced rate as a result of the application of a DTA.
    - 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 
   holders 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 who are South African residents are advised that in electing to participate in the share 
   reinvestment alternative, pre-taxation funds are utilised for the reinvestment purposes and that taxation 
   will be due on the total cash dividend amount of 96.16625 cents per share. 
   
   Shareholders are further advised that:
   - The issued capital of Vukile is 784 766 367 shares of one cent each at 30 May 2018.
   - Vukile's tax reference number is 9331/617/14/3.
   
   This cash dividend or share reinvestment alternative may have tax implications for resident as well as 
   non-resident shareholders. Shareholders are therefore encouraged to consult their tax and/or professional 
   advisers should they be in any doubt as to the appropriate action to take.

   Summary of the salient dates relating to the cash dividend and share reinvestment alternative 
   are as follows:                                                                            
   Salient dates and times                                                                2018    
   Annual results including declaration announcement released on SENS        Wednesday, 30 May    
   Circular and form of election posted to shareholders                       Thursday, 31 May    
   Finalisation information including the share ratio and price per 
   share published on SENS                                                    Tuesday, 12 June    
   Last day to trade in order to participate in the election to receive 
   the share reinvestment alternative or to receive a cash dividend (LDT)     Tuesday, 19 June    
   Shares trade ex dividend                                                 Wednesday, 20 June    
   Listing of maximum possible number of shares under the share 
   reinvestment alternative and trading in new shares commences                Friday, 22 June    
   Last day to elect to receive the share reinvestment alternative or to 
   receive a cash dividend (no late forms of election will be accepted) 
   at 12:00 (SA time)                                                          Friday, 22 June    
   Record date for the election to receive the share reinvestment 
   alternative or to receive a cash dividend (record date)                     Friday, 22 June    
   Results of cash dividend and share reinvestment alternative published 
   on SENS                                                                     Monday, 25 June    
   Cash dividend cheques posted to certificated shareholders on or about       Monday, 25 June    
   Accounts credited by CSDP or broker to dematerialised shareholders 
   with the cash dividend payment                                              Monday, 25 June    
   Share certificates posted to certificated shareholders on or about       Wednesday, 27 June    
   Accounts updated with the new shares (if applicable) by CSDP or broker 
   to dematerialised shareholders                                           Wednesday, 27 June    
   Adjustment to shares listed on or about                                   Thursday, 28 June    
   Notes:
   1. Shareholders electing the share reinvestment alternative are alerted to the fact that the new 
      shares will be listed on LDT + 3 and that these new shares can only be traded on LDT +3, due to 
      the fact that settlement of the shares will be three days after record date, which differs from 
      the conventional one day after record date settlement process.                            
   2. Shares may not be dematerialised or rematerialised between Tuesday, 19 June 2018 and 
      Friday, 22 June 2018, both days inclusive.                                                      
   3. The above dates and times are subject to change. Any changes will be released on SENS.

9. Proposed board changes
   The company announced on SENS on 29 May 2018 that Mr Anton Botha will retire from the board of directors 
   at the upcoming annual general meeting (AGM) which is anticipated to be held on or about 14 August 2018. 
   Mr Botha will be succeeded by Mr Nigel Payne who is currently the chairman of the audit and risk committee, 
   while Dr Renosi Mokate will assume the role of lead independent non-executive director with effect from 
   1 June 2018, in line with King IV.

   In light of Mr Payne's intended role as chairman of the board, the company has reconstituted the audit 
   and risk committee. Ms Babalwa Ngonyama will assume the role of chairman of the audit and risk committee 
   following the AGM. Mr Peter Moyanga, who has served on the audit and risk committee since its inception 
   in 2004, will retire from the audit and risk committee at the AGM but will remain a member of the board.
   
10.Basis of preparation
   The summarised audited consolidated financial statements for the year ended 31 March 2018, and 
   comparative information, have been prepared in accordance with, and containing the information required 
   by, International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued 
   by the Accounting Practices Committee and Financial Reporting Announcements as issued by the Financial 
   Reporting Standards Council, the JSE Listings Requirements, IAS 34 and relevant sections of the 
   South African Companies Act. 
   
   Except for the amendments adopted as set out below, all accounting policies applied by the group in the 
   preparation of these consolidated financial statements are consistent with those applied by the group 
   in its consolidated financial statements as at and for the year ended 31 March 2017. The group has 
   adopted the following amendments to standards which were effective for the first time for the 
   financial period commencing 1 April 2017:
   - Amendments to IFRS 12 - Disclosure of Interest in Other Entities;
   - Amendments to IAS 7 - Disclosure of cash flows;
   - Amendments to IAS 12 - Income tax.   
   
   Based on management's assessment of these amendments, the only material impact identified on the 
   financial statements relates to the amendment to IAS 7.   
   
   These statements, which comprise the statement of financial position at 31 March 2018, the statement 
   of profit or loss and other comprehensive income, statement of changes in equity and statement of 
   cash flows for the 12 months then ended is extracted from audited information, but is itself not 
   audited. The annual financial statements were audited by Grant Thornton, who expressed an unqualified 
   opinion thereon. The auditor's report does not necessarily cover 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 work, they should obtain a copy of the audit report together with the 
   accompanying financial information from the registered office of the company situated at Ground Floor, 
   One-On-Ninth, Corner Glenhove Road and 9th Street, Melrose Estate. The directors take full responsibility 
   for the preparation of this report and that the financial information has been correctly extracted from 
   the underlying financial statements.
   
   This report was compiled under the supervision of Michael John Potts CA(SA), the financial director of 
   the company.  
   
   The directors are not aware of any matters or circumstances arising subsequent to 31 March 2018 that 
   require any additional disclosure or adjustment to the financial statements and which are not disclosed 
   in this announcement.

On behalf of the board

AD Botha                    LG Rapp
Chairman                    Chief executive officer

Melrose Estate
30 May 2018 


Summarised audited consolidated statement of financial position 
at 31 March 2018
                                                                                         2018              2017     
GROUP                                                                                    R000              R000    
ASSETS                                                                                                             
Non-current assets                                                                 22 028 749        15 850 308    
Investment properties                                                              18 821 251        13 219 530    
  Investment properties                                                            19 102 209        13 497 445    
  Investment properties under development                                              54 476            51 191    
  Straight-line rental income adjustment                                             (335 434)         (329 106)    
Other non-current assets                                                            3 207 498         2 630 778    
  Straight-line rental income asset                                                   335 434           329 106    
  Equity investments                                                                1 384 645         1 366 239    
  Investment in associate                                                           1 199 292           780 347    
  Goodwill                                                                             63 288            63 009    
  Furniture, fittings, computer equipment and intangible assets                        12 054            14 049    
  Available-for-sale financial asset                                                   34 099            23 855    
  Derivative financial instruments                                                     26 039             1 722    
  Long-term loans granted                                                             103 672            38 110    
  Deferred taxation assets                                                             48 975            14 341    
Current assets                                                                      1 287 893         1 589 768    
Trade and other receivables                                                           186 743           256 405    
Derivative financial instruments                                                            -             1 752    
Current taxation assets                                                                 7 290             1 666    
Cash and cash equivalents                                                           1 093 860         1 329 945    
Investment properties held for sale                                                    10 500            76 632    
Total assets                                                                       23 327 142        17 516 708    
EQUITY AND LIABILITIES                                                                                                
Equity attributable to owners of the parent                                        15 770 080        13 111 425    
Non-controlling interest                                                               81 311            73 367    
Non-current liabilities                                                             5 484 980         2 964 638    
Other interest-bearing borrowings                                                   5 346 371         2 937 590    
Derivative financial instruments                                                      131 304            26 115    
Deferred taxation liabilities                                                           7 305               933    
Current liabilities                                                                 1 990 771         1 367 278    
Trade and other payables                                                              428 733           354 370    
Borrowings                                                                          1 554 359         1 002 581    
Derivative financial instruments                                                          175                 -    
Current taxation liabilities                                                            7 504             8 892    
Shareholder for dividend                                                                    -             1 435    
Total equity and liabilities                                                       23 327 142        17 516 708    
Net asset value (cents per share)(1)                                                     2010              1868    
(1)Excluding non-controlling interest.                                                                             
                                                                              

Summarised audited consolidated statement of profit or loss and other comprehensive income
for the year ended 31 March 2018
                                                                                         2018              2017     
GROUP                                                                                    R000              R000    
Property revenue                                                                    2 014 966         1 964 202    
Straight-line rental income accrual                                                     5 401          (161 077)    
Gross property revenue                                                              2 020 367         1 803 125    
Property expenses                                                                    (705 891)         (717 970)    
Net profit from property operations                                                 1 314 476         1 085 155    
Corporate and administrative expenses                                                (127 474)          (96 155)    
Investment and other income                                                           323 255           198 523    
Operating profit before finance costs                                               1 510 257         1 187 523    
Finance costs                                                                        (367 808)         (362 074)    
Profit before capital items                                                         1 142 449           825 449    
Profit on sale of investment properties                                                13 405            25 250    
Profit on sale of furniture and equipment                                                 144                92    
Fair value (loss)/gain on listed property securities                                  (16 411)          105 739    
Fair value movement of derivative financial instruments                                 7 408            (6 251)    
Cost of terminating derivative financial instruments                                   (3 250)                -    
Foreign exchange profit                                                                59 936            83 679    
Profit on sale of subsidiary                                                                -            54 813    
Loss of control of subsidiary                                                               -          (276 781)    
Loss on sale of listed property securities                                            (26 240)                -    
Other capital items                                                                         -              (971)    
Goodwill written off on sale of properties by a subsidiary                                  -            (3 889)    
Cost of acquisition of business combination                                                 -               (66)    
Profit before property fair value adjustments                                       1 177 441           807 064    
Fair value adjustments                                                              1 149 988           693 521    
  Gross change in fair value of investment properties                               1 155 389           532 444    
  Straight-line rental income adjustment                                               (5 401)          161 077    
Profit before equity-accounted investment                                           2 327 429         1 500 585    
Profit share of associate                                                              95 485            45 251    
Profit before taxation                                                              2 422 914         1 545 836    
Taxation                                                                              (10 668)           (9 286)    
Profit for the year                                                                 2 412 246         1 536 550    
Profit attributable to:                                                                                            
Owners of the parent                                                                2 401 943         1 499 420    
Non-controlling interests                                                              10 303            37 130    
Other comprehensive loss                                                                                           
Items that will be reclassified subsequently to profit or loss                                                     
Currency loss on translation of investments in foreign entities                       (69 326)         (157 403)    
Currency profit/(loss) on translation of goodwill                                        279              (378)    
Cash flow hedges (net of tax)                                                         (60 202)          (39 323)    
Available for sale financial assets - current year loss                               (17 610)          (15 206)    
Other comprehensive loss for the year                                                (146 859)         (212 310)    
Total comprehensive income for the year                                             2 265 387         1 324 240    
Total comprehensive income attributable to:                                                                        
Owners of the parent                                                                2 254 319         1 287 981    
Non-controlling interest                                                               11 068            36 259    
Basic and diluted earnings per share (cents)(1)                                        320.65            217.93    
Weighted average number of shares in issue                                        749 084 702       688 024 118    
Number of shares in issue                                                         784 766 367       701 885 532    
(1)Vukile has no dilutionary shares in issue.


Audited reconciliation of earnings to headline earnings
for the year ended 31 March 2018
                                                                2018                             2017
                                                         Group       Cents per            Group       Cents per     
                                                          R000           share             R000           share    
Attributable profit to owners of the parent          2 401 943          320.65        1 499 420          217.93    
Earnings                                             2 401 943          320.65        1 499 420          217.93    
Change in fair value of investment properties    
(net of allocation to non-controlling interest)     (1 148 906)        (153.37)        (676 899)         (98.38)    
Write-off of goodwill on sale of                 
properties sold by a subsidiary                              -               -            3 889            0.56    
Profit on sale of investment properties                (13 405)          (1.79)         (25 250)          (3.67)    
Profit on sale of furniture, fittings and        
computer equipment                                        (144)          (0.02)             (92)          (0.01)    
Profit on sale of subsidiary                                 -               -          (54 813)          (7.97)    
Loss of control of subsidiary                                -               -          276 781           40.23    
Fair value earnings of associate -               
adjusted headline earnings                             (10 267)          (1.37)          16 804            2.44    
Headline earnings of shares                          1 229 221                        1 039 840                    
Weighted average number of shares in issue         749 084 702                      688 024 118                    
Headline and diluted headline earnings per share                        164.10                           151.13    


Summarised audited consolidated statement of cash flows
for the year ended 31 March 2018
                                                                                         2018              2017     
GROUP                                                                                    R000              R000    
Cash flow from operating activities                                                 1 333 609         1 104 588    
Cash flow from investing activities*                                               (4 599 117)          448 450    
Cash flow from financing activities*                                                3 031 308        (1 155 176)    
Net (decrease)/increase in cash and cash equivalents                                 (234 200)          397 862    
Foreign currency movement in cash                                                      (1 885)             (376)    
Cash and cash equivalents at the beginning of the year                              1 329 945           932 459    
Cash and cash equivalents at the end of the year                                    1 093 860         1 329 945    
Major items included in the above                                                                                  
Cash flow from operating activities                                                                                
Profit before tax                                                                   2 422 914         1 545 836    
Adjustments                                                                        (1 216 409)         (378 051)    
Cash flow from investing activities                                                                                
Acquisition of and improvements to investment properties                           (4 703 030)       (3 466 306)    
Investment in associate                                                              (418 281)         (180 677)    
Net proceeds on sale of investment properties                                         175 316         4 113 776    
Cash flow from financing activities                                                                                
Issue of shares                                                                     1 556 631           902 251    
Dividends paid                                                                     (1 180 330)       (1 049 031)    
Finance costs                                                                        (352 989)         (355 763)    
Interest-bearing borrowings advanced/(repaid)                                       3 094 928          (622 474)    
* In the prior year available-for-sale financial assets were included as part of investing activities. This has been 
  reclassified to financing activities. The reclassification amounted to a movement of R19.2 million

Summarised audited consolidated statement of changes in equity
for the year ended 31 March 2018
                                                                                                                  
                                                                                                             
                                                                Non-                       Share-           Non-                 
                                             Stated    distributable      Retained       holders'    controlling                 
                                            capital         reserves      earnings       interest       interest          Total     
GROUP                                          R000             R000          R000           R000           R000           R000    
Balance at 31 March 2016                  7 068 563        4 387 231       476 780     11 932 574        556 681     12 489 255    
Issue of share capital                      902 251                -             -        902 251              -        902 251    
Dividend distribution                             -                -    (1 025 270)    (1 025 270)       (25 196)    (1 050 466)    
                                          7 970 814        4 387 231      (548 490)    11 809 555        531 485     12 341 040    
Profit for the year                               -                -     1 499 420      1 499 420         37 130      1 536 550    
Change in fair value of                                                                                           
investment properties                             -          532 444      (532 444)             -              -              -    
Change in fair value of investment                                                                                
properties attributable to                                                                                        
non-controlling interests                         -          (16 622)       16 622              -              -              -    
Share-based remuneration                          -           17 413             -         17 413              -         17 413    
Deferred taxation on change                                                                                       
in fair value of derivatives                      -            1 750             -          1 750              -          1 750    
Transfer to non-distributable reserves            -          104 024      (103 315)           709              -            709    
Non-controlling interest arising                                                                                  
in respect of a subsidiary acquired               -                -             -              -         26 855         26 855    
Share issue expenses of a subsidiary              -           (7 111)            -         (7 111)        (3 829)       (10 940)    
Loss of control of subsidiary                     -         (231 623)      232 751          1 128       (517 403)      (516 275)    
Revaluation of equity investments                 -          105 739      (105 739)             -              -              -    
Other comprehensive loss                          -         (211 439)            -       (211 439)          (871)      (212 310)    
Balance at 31 March 2017                  7 970 814        4 681 806       458 805     13 111 425         73 367     13 184 792    
Issue of capital                          1 556 631                -             -      1 556 631              -      1 556 631    
Dividend distribution                             -                -    (1 176 155)    (1 176 155)        (2 741)    (1 178 896)    
                                          9 527 445        4 681 806      (717 350)    13 491 901         70 626     13 562 527    
Profit for the year                               -                -     2 401 943      2 401 943         10 303      2 412 246    
Change in fair value of                                                                                           
investment properties                             -        1 155 389    (1 155 389)             -              -              -    
Change in fair value of                                                                                           
investment properties attributable                                                                                
to non-controlling interests                      -           (6 486)        6 486              -              -              -    
Share-based remuneration                          -           21 077             -         21 077              -         21 077    
Deferred taxation on change                                                                                       
in fair value of derivatives                      -           (2 241)            -         (2 241)             -         (2 241)    
Transfer to non-distributable                                                                                     
reserves - currency revaluation                   -           59 936       (59 936)             -              -              -    
Transfer from non-distributable reserve           -           (4 498)       12 835          8 337              -          8 337    
Share issue expenses of a subsidiary              -           (3 637)            -         (3 637)           (59)        (3 696)    
Change in shareholding of a subsidiary            -              324             -            324           (324)             -    
Legal reserve transfer                            -              217          (217)             -              -              -    
Revaluation of equity investments                 -          (16 411)       16 411              -              -              -    
Other comprehensive loss                          -         (147 624)            -       (147 624)           765       (146 859)    
Balance at 31 March 2018                  9 527 445        5 737 852       504 783     15 770 080         81 311     15 851 391    


Summarised operating segment analysis
for the year ended 31 March 2018      

The revenues and profits generated by the group's operating segments and segment assets are summarised in the table below.
As reported in the six-month period to 30 September 2017, there has been a change from prior periods in the measurement methods
used to determine key operating segments and reported segment profits. The executive committee (Exco), the group's operating
decision-making forum, driven by its international strategy and the fact that in excess of 90% of the southern Africa portfolio 
is retail, has taken a decision to measure operating segments and reported segment profits on a geographical basis, initially,
Southern Africa, Spain and United Kingdom.
 
The results of the operating segments are reviewed regularly by Exco to assess performance and decisions to allocate capital
to each of the segments.
                                                   
                                                              Southern Africa                United                    Spain                      Total            
                                                     Retail        Other         Total      Kingdom       Retail       Other        Total         group          
GROUP                                                  R000         R000          R000         R000         R000        R000         R000          R000      
Group income for the year ended 31 March 2018                                                                                                              
Property revenue(i)                               1 232 435      124 674     1 357 109                   177 965      26 724      204 689     1 561 798    
Straight-line rental income accrual                   4 780          484         5 264                       137           -          137         5 401    
                                                  1 237 215      125 158     1 362 373                   178 102      26 724      204 826     1 567 199    
Property expenses (net of recoveries)(i)           (213 875)      (7 952)     (221 827)                  (27 521)     (3 375)     (30 896)     (252 723)    
Profit from property operations                   1 023 340      117 206     1 140 546                   150 581      23 349      173 930     1 314 476    
Profit from associate                                                                        95 485                                              95 485    
(i) The property revenue and property                                                                                                      
    expense have been reflected net                                                                                                        
    of recoveries.                                                                                                                         
    The summarised audited consolidated                                                                                                    
    statement of profit or loss and other                                                                                                  
    comprehensive income reflects the gross                                                                                                
    property revenue and gross                                                                                                             
    property expenses.                                                                                                                     
                                                                                                                                           
Group statement of financial position at 
31 March 2018                                                                                     
Assets                                                                                                                                     
Investment properties                            13 328 678    1 249 288    14 577 966                 4 113 957     375 256    4 489 213    19 067 179    
Add: Lease commissions                                                          35 030                                                  -        35 030    
                                                 13 328 678    1 249 288    14 612 996                 4 113 957     375 256    4 489 213    19 102 209    
Goodwill                                             48 218                     48 218                                15 070       15 070        63 288    
Investment properties held for sale                               10 500        10 500                                                           10 500    
                                                 13 376 896    1 259 788    14 671 714                 4 113 957     390 326    4 504 283    19 175 997    
Add:                                                                                                                                                       
Investment property under development                                           54 476                                                           54 476    
Equity investments                                                           1 384 645                                                        1 384 645    
Investment in associate                                                              -    1 199 292                                           1 199 292    
Furniture, fittings,computer                                                                                                               
equipment and intangible asset                                                  11 202                                                852        12 054    
Available-for-sale financial asset                                              34 099                                                           34 099    
Derivative financial instruments                     23 808        2 231        26 039                                                           26 039    
Loans receivable                                                               103 672                                                          103 672    
  Deferred taxation assets                                                      48 975                                                           48 975    
  Trade and other receivables                                                  166 133                                             20 610       186 743    
Taxation refundable                                                                  6                                              7 284         7 290    
Cash and cash equivalents                                                      826 371                                            267 489     1 093 860    
Total assets                                                                                                                                 23 327 142    
Equity and liabilities                                                                                                                                     
Stated capital                                    8 710 972      816 473     9 527 445                                                        9 527 445    
Interest-bearing borrowings                       4 437 744      415 947     4 853 691                 2 047 039           -    2 047 039     6 900 730    
                                                 13 148 716    1 232 420    14 381 136                 2 047 039           -    2 047 039    16 428 175    
Add:                                                                                                                                       
Other components of equity                                                                                                                 
and retained earnings                                                        4 146 104                                          2 096 531     6 242 635    
Non-controlling interest                                                        47 990                                             33 321        81 311    
Derivative financial instruments                     82 528       45 885       128 413                     3 066                    3 066       131 479    
Deferred taxation liabilities                                                      934                                              6 371         7 305    
Trade and other payables                                                       339 325                                             89 408       428 733    
Current taxation liabilities                                                     7 347                                                157         7 504    
Total equity and liabilities                                                                                                                 23 327 142    
                                                                                                                                           
Group income for the year ended 31 March 2017                                                                                                                     
Property revenue(i)                               1 102 166      352 048     1 454 214                                 7 131        7 131     1 461 345    
Straight-line rental income accrual                (118 385)     (42 692)     (161 077)                                    -            -      (161 077)    
                                                    983 781      309 356     1 293 137                                 7 131        7 131     1 300 268    
Property expenses (net of recoveries)(i)           (190 906)     (23 429)     (214 335)                                 (778)        (778)     (215 113)    
Profit from property operations                     792 875      285 927     1 078 802                                 6 353        6 353     1 085 155    
Profit from associate                                                                        45 251                                              45 251    
(i) The property revenue and property                                                                                                      
    expense have been reflected net of recoveries.                                                                                         
    The summarised audited consolidated statement                                                                                          
    of profit or loss and other                                                                                                            
    comprehensive income reflects the gross                                                                                                
    property revenue and gross property expenses.                                                                                          
                                                                                                                                                                 
Group statement of financial position at 
31 March 2017                                                                                                                                                 
Assets                                                                                                                                                     
Investment properties                            11 993 956    1 132 968    13 126 924                               350 254      350 254    13 477 178    
Add: Lease commissions                                                          20 267                                                  -        20 267    
                                                 11 993 956    1 132 968    13 147 191                               350 254      350 254    13 497 445    
Goodwill                                             48 218                     48 218                                14 791       14 791        63 009    
Investment properties held-for-sale                               76 632        76 632                                                           76 632    
                                                 12 042 174    1 209 600    13 272 041                               365 045      365 045    13 637 086    
Add:                                                                                                                                                       
Investment property under development                                           51 191                                                           51 191    
Equity investments                                                           1 366 239                                                        1 366 239    
Investment in associate                                                              -      780 347                                             780 347    
Furniture, fittings,computer equipment                                                                                                     
and intangible asset                                                            14 049                                                           14 049    
Available-for-sale financial asset                                              23 855                                                           23 855    
Derivative financial instruments                      3 174          300         3 474                                                            3 474    
Loans receivable                                                                38 110                                                           38 110    
  Deferred taxation assets                                                      14 341                                                           14 341    
  Trade and other receivables                                                  256 243                                                162       256 405    
Taxation refundable                                                              1 666                                                            1 666    
Cash and cash equivalents                                                    1 304 585                                             25 360     1 329 945    
Total assets                                                                                                                                 17 516 708    
Equity and liabilities                                                                                                                                     
Stated capital                                    7 282 863      687 951     7 970 814                                                        7 970 814    
Interest-bearing borrowings                       3 448 939      325 792     3 774 731                               165 440      165 440     3 940 171    
                                                 10 731 802    1 013 743    11 745 545                               165 440      165 440    11 910 985    
Add:                                                                                                                                        
Other components of equity and                                                                                                             
retained earnings                                                            5 127 731                                             12 880     5 140 611    
Non-controlling interest                                                        73 367                                                           73 367    
Derivative financial instruments                     23 861        2 254        26 115                                                           26 115    
Deferred taxation liabilities                                                      933                                                              933    
Trade and other payables                                                       349 072                                              5 298       354 370    
Current taxation liabilities                                                     8 531                                                361         8 892    
Shareholder for dividend                                                         1 435                                                            1 435    
Total equity and liabilities                                                                                                                 17 516 708    


Calculation of distributable earnings
                                                                     31 March           31 March                     
                                                                         2018               2017       Variance     
                                                                         R000               R000              %    
Property revenue                                                    1 561 798          1 461 345           6.87    
Property expenses (net of recoveries)                                (252 723)          (215 113)        (17.48)    
Net profit from property operations per segmental           
report excluding straight-line rental income accrual               1 309 075          1 246 232           5.04    
Corporate administration expenses                                    (127 474)           (96 155)        (32.57)    
Investment and sundry income                                          323 255            198 523          62.83    
Operating profit before finance costs                               1 504 856          1 348 600          11.59    
Finance costs                                                        (367 808)          (362 074)         (1.58)    
Profit before equity-accounted income                               1 137 048            986 526          15.26    
Profit share of associate                                              95 485             45 251         111.01    
Profit before taxation                                              1 232 533          1 031 777          19.46    
Taxation                                                              (10 668)            (9 286)        (14.88)    
Profit for the year                                                 1 221 865          1 022 491          19.50    
Costs of terminating interest rate swap                                (3 250)                 -        (100.00)    
Profit on sale of subsidiary                                                -             54 813        (100.00)    
Net profit attributable to non-controlling interests                  (10 303)           (37 130)         72.25    
Attributable to Vukile group                                        1 208 312          1 040 174          16.16    
Adjustments on consolidation                                                -              1 552        (100.00)    
Non-IFRS adjustments                                                                                               
Shares issued cum dividend                                             35 019             31 847           9.96    
Shares in Castellana subsidiaries acquired cum dividend                44 940              6 828         558.17    
Dividends accrued on listed investments                                     -              7 195        (100.00)    
Dividends accrued on listed associate net of share of income           19 105             22 085         (13.49)    
Asset management income                                                     -              8 000        (100.00)    
Available for distribution                                          1 307 376          1 117 681          16.97    
Proposed dividend (cents per share)                                    168.82             156.75                   
Number of shares in issue at 31 March                             784 766 367        701 885 532                   
                                                             

Notes to the summarised financial statements
for the year ended 31 March 2018

1. Measurements of group fair value
   1.1 Financial instruments
       The financial assets and liabilities measured at fair value in the statement of financial position are grouped into 
       the fair value hierarchy as follows:
                                                            March 2018                              March 2017                              
                                                Level 1      Level 2         Total        Level 1     Level 2         Total    
       GROUP                                       R000         R000          R000           R000        R000          R000    
       ASSETS                                                                                                                  
       Investments                            1 384 645            -     1 384 645      1 366 239           -     1 366 239    
       Available-for-sale financial assets       79 152            -        79 152         55 342           -        55 342    
       Derivative financial instruments               -       26 039        26 039              -       3 474         3 474    
       Total                                  1 463 797       26 039     1 489 836      1 421 581       3 474     1 425 055    
       LIABILITIES                                                                                                             
       Available-for-sale financial                                                               
       liabilities                                    -      (45 053)      (45 053)             -     (31 487)      (31 487)   
       Derivative financial instruments               -     (131 479)     (131 479)             -     (26 115)      (26 115)   
       Total                                          -     (176 532)     (176 532)             -     (57 602)      (57 602)   
       Net fair value                         1 463 797     (150 493)    1 313 304      1 421 581     (54 128)    1 367 453    

       Measurement of fair value
       The methods and valuation techniques used for the purpose of measuring fair value are unchanged compared to the 
       previous reporting period.

       Investments
       This comprises shares held in listed property companies at fair value which is determined by reference to quoted 
       closing prices at the reporting date.

       Available-for-sale financial assets
       The available for-sale financial asset comprises the long-term reimbursement right, which is legally offset by the 
       long-term employee benefit liability. This comprises equity-settled share-based long-term incentive reimbursement 
       rights stated at fair value. Fair value has been determined by reference to Vukile's quoted closing price at the 
       reporting date after deduction of executive and management rights.

       Derivative financial instruments
       The fair values of these derivative contracts are determined by Absa Capital, Rand Merchant Bank, Standard Bank, 
       Nedbank Limited and Investec Bank Limited for Southern Africa, and Banco Popular, Banco Santander and Caixa Bank 
       for Spain, using a valuation technique that maximises the use of observable market inputs. Derivatives entered 
       into by the group are included in level 2 and is consistent with interest rate swap and forward exchange contracts.

   1.2 Non-financial assets
       The following table reflects the levels within the hierarchy of non-financial assets measured at fair 
       value at 31 March 2018:                                                                      
                                                                                            2018           2017    
                                                                                         Level 3        Level 3    
       GROUP                                                                                R000           R000    
       ASSETS                                                                                                      
       Investment properties                                                          19 102 209     13 497 445    
       Investment properties under development                                            54 476         51 191    
       Investment properties held for sale                                                10 500         76 632    

       Fair value measurement of non-financial assets (investment properties)
       The fair values of commercial buildings are estimated using an income approach which capitalises the estimated 
       rental income stream, net of projected operating costs, using a discount rate derived from market yields. 
       The estimated rental stream takes into account current occupancy levels, estimates of future vacancy levels, 
       the terms of in-place leases and expectations of rentals from future leases over the remaining economic life 
       of the buildings.

       The most significant inputs are the discount rate and the reversionary capitalisation rate. The inputs used in the 
       valuations at 31 March 2018 were:
                                                2018                                               2017   
                                                         Reversionary                                      Reversionary
                                Discount rate         capitalisation rate         Discount rate         capitalisation rate         
                                       Weighted                 Weighted                  Weighted                 Weighted     
       GROUP                 Range      average       Range      average        Range      average       Range      average    
       South Africa       12.2% to        13.4%     7.5% to         8.6%     12.8% to        14.0%       8% to         9.1%    
                             17.3%                    12.8%                     19.6%                    15.7%                
       Spain               7.5% to         8.8%       5% to         6.1%     9.05% to        9.22%    6.17% to        6.46%    
                             10.3%                     9.1%                     9.79%                    7.48%                
       The estimated fair value would increase/(decrease) if the expected market rental growth was higher/(lower), 
       expected expense growth was lower/(higher), the vacant periods were shorter/(longer), the occupancy rate was 
       higher/(lower), the rent-free periods were shorter/(longer), the discount rate was lower/(higher) and/or the 
       reversionary capitalisation rate was lower/(higher).                                                                                                                           

JSE sponsor: Java Capital 

NSX sponsor: IJG Group, Windhoek, Namibia 

Executive directors: LG Rapp (chief executive), MJ Potts (financial director), 
                     HC Lopion (executive director: asset management), GS Moseneke
Non-executive directors: AD Botha (Chairman), PS Moyanga, SF Booysen, RD Mokate, H Ntene, 
                         NG Payne, HM Serebro, B Ngonyama
There has been a change to the board of directors since the release of the previous results announcement, 
namely the appointment of Ms B Ngonyama.

Registered office: Ground Floor, One-on-Ninth, Corner Glenhove Road and Ninth Street, Melrose Estate, 2196.
 
Company secretary: J Neethling 

Transfer secretaries: Link Market Services South Africa (Pty) Ltd, Braamfontein, Johannesburg 

Investor relations: Instinctif Partners, The Firs 302, 3rd Floor, Corner Craddock Avenue and Biermann Road, 
                    Rosebank, Johannesburg, South Africa, Tel: +27 11 447 3030 

Media relations: Marketing Concepts, 10th Floor, Fredman Towers, 13 Fredman Drive, Sandton, Johannesburg,
                 South Africa, Tel: +27 11 783 0700, Fax: +27 11 783 3702

www.vukile.co.za

  
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