Wrap Text
Reviewed provisional condensed consolidated results for the year ended 28 February 2018
Delta Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/005129/06)
Share code: DLT ISIN: ZAE000194049
("Delta" or "the Fund" or "the Group")
(REIT status approved)
Reviewed provisional condensed consolidated results for the year ended 28 February 2018
Highlights
- Full year distribution of 97.24 cents per share
- Successfully refinanced R941 million in debt
- Renewed and concluded 146 918m2 of leases
- Third consecutive year reduction in gearing to 41.3%
- Maintained level 2 B-BBEE rating with new sector code
- Concluded stage 1 for 227 550m2 bulk lease renewal
Commentary
Company profile
Delta is a JSE listed Real Estate Investment Trust ("REIT") with a property portfolio of R11.5 billion
and a market capitalisation of R4.3 billion as at 28 February 2018. The Fund is black managed and is
one of the highest empowered funds in the sector with a level 2 contributor B-BBEE recognition level,
maintaining its status as the dominant sovereign listed property fund in South Africa. The primary
focus of the Fund is long-term investment in quality, rental income-generating properties situated
in strategic nodes attractive to sovereign entities and other tenants requiring empowered landlords.
Financial results
Delta's Board has declared a 2.1% increase in full year distribution of R691.6 million. This represents
flat growth of 97.24 cents per share.
Rental income decreased by 3.1% mainly due to disposals, with like-for-like income growth of 5.2%.
The gross cost to income ratio and net cost to income ratio decreased to 26.5% and 12.1% respectively,
due primarily to municipal adjustments and credits received. Net operating profit, benefiting from
higher tenant reinstatement income and stricter cost management, increased by 2%.
Administrative expenses for the period decreased by 21.8%, largely affected by the reallocation of
expenses to property operating expenses. On a normalised basis, administrative expenses decreased by
2.3% due to stricter cost management initiatives.
Independent valuers revalued the underlying property portfolio, resulting in a 2.3% growth in fair
value to R11.5 billion. Fair value adjustments of R104.8 million represent the movement between the
net fair value gain on investment property of R146.6 million and loss on disposal of the investment
in joint venture Baystone Holdings of R41.6 million.
Finance costs increased by 2.5%, due to higher weighted average interest rate of 9.5% on facilities
renewed together with increased debt structuring fees amortised. Interest income decreased by 27.5%
due to loss of income on cash guarantee released upon disposal of the investment in Baystone Holdings.
The share of profit from associate Grit Real Estate Income Group ("GRIT") increased to R44.0 million,
resulting in a full year US dollar translated dividend of R35.7 million being received. Delta's 11.5%
shareholding in GRIT was impaired by R21.9 million, as the carrying value of the investment exceeded
the fair market value at 28 February 2018.
Property portfolio
Delta's R11.5 billion portfolio comprises 105 properties (total GLA of 952 428m2), which includes
assets held-for-sale of 11 properties (total GLA of 90 131m2) with a value of R972.6 million.
The segmental and geographic breakdown of the portfolio (per tenant) at the reporting date was
as follows:
Tenant profile
Detailed tenant breakdown - GLA (%) Detailed tenant breakdown - revenue (%)
National government 33.7% National government 37.5%
Provincial government 14.1% Provincial government 21.6%
State-owned enterprise 10.6% State-owned enterprise 11.8%
Local government 5.8% Local government 6.9%
Office - other 14.5% Office - other 12.8%
Vacant 11.8% Retail 7.5%
Retail 6.1% Industrial 1.9%
Industrial 3.4%
Geographic profile
Geographic profile - GLA (%) Geographic profile - rental (%)
Gauteng 42.5% Gauteng 44.2%
KwaZulu-Natal 29.2% KwaZulu-Natal 24.6%
Free State 9.0% Limpopo 9.3%
Limpopo 4.7% Free State 6.6%
Western Cape 4.4% Western Cape 5.3%
Northern Cape 3.9% Northern Cape 3.7%
Mpumalanga 3.2% Eastern Cape 3.0%
Eastern Cape 2.5% Mpumalanga 2.8%
North West 0.6% North West 0.5%
Acquisitions
Delta did not embark on any acquisitions during the current year, but rather focused inwardly on
reducing vacancies and renewing leases on previously acquired assets. A pipeline of assets has been
identified for acquisition pending the proposed recapitalisation B-BBEE consortium transaction.
Major capital projects
Capital investment remains a high priority to ensure the supply of quality assets that meet tenants'
requirements. The following major capital projects were either recently completed, are in progress
or are close to completion:
- 88 Field Street (Durban) - completed at an estimated cost of R89 million.
- Sleepy Hollow (PMB) - completed at an estimated cost of R4.5 million.
- Embassy Building (Durban) - nearing completion October 2018 at an estimated cost of R28 million
and is strategic to securing future leases.
- Beacon Hill (King Williams Town) - investment of R40 million due to a five-year lease.
- Commission House (Pretoria) - nearing completion June 2018 at an estimated cost of R12 million with
negotiations for a 10-year lease extension in progress.
- 17 Harrison Street Building and Kay Street Parkade (Johannesburg) - nearing completion May 2018 at
an estimated cost of R4.5 million due to a four-year lease renewal.
Disposals
During the 2018 financial year, Delta disposed of seven buildings for a total consideration of
R316 million with a total GLA of 35 403m2. These buildings were Samora House, Damelin House,
Presidia, 1 and 3 Ferreira, 14 New Street and Edcon Building. An additional four buildings,
namely Block G, Broadcast House, 12 New Street and Top trailers 1 have binding sale agreements
as at year-end, totalling a GLA of 31 035m2 and a fair value of R328.5 million. Transfer of
these four buildings is imminent.
Letting and vacancies
The lease expiry profile of the portfolio at 28 February 2018 was as follows:
Beyond
February February February February February 28 February
Segment Vacant Monthly 2019 2020 2021 2022 2023 2023
Office sovereign 7.2% 20.2% 31.4% 11.8% 19.8% 6.3% 0.7% 2.5%
Office other 23.0% 10.2% 25.1% 14.8% 17.5% 3.5% 3.9% 2.0%
Retail 3.1% 0.8% 13.4% 14.4% 3.2% 8.3% 0.0% 56.7%
Industrial 19.0% 14.2% 27.8% 0.0% 39.1% 0.0% 0.0% 0.0%
Vacancies increased to 11.8% (total GLA of 112 225m2), mainly due to challenges in the Free State
Provincial portfolio and the ex-Eskom Sunninghill portfolio. The weighted average in-force escalation
at year end is 6.0%, with a weighted average rental of R110.58/m2. Lease renewals of 93 144m2 and new
leases of 53 774m2 were concluded during the year.
Delta concluded successful meetings with the National Department of Public Works ("DPW") negotiating
team on proposed terms and rental, resulting in the approval of 59 leases with a total GLA of 227 550m2
progressing to stage 2 and stage 3 of the finalisation process for renewal. The DPW is currently
engaging user departments to confirm budgets and tenant requirements for their approval (stage 2)
before the National Bid Adjudication Committee ("NBAC") finalises (stage 3) and recommends the signing
of the leases, expected to be finalised by 31 December 2018.
The recent cabinet reshuffle has brought back to Public Works Minister Thulas Nxesi who was instrumental
in the DPW and Property Management Trading Entity ("PMTE") formation, conceptualising the turnaround
strategy and leasing policy. We firmly believe that the Minister together with DPW's current management
team will be in a position to finalise the lease renewals and move PMTE forward.
Funding
LTV improved to 41.3% (2017: 41.5%), benefiting from the upward fair value adjustment to investment
property but negatively impacted by the reduction in the market value of our investment in GRIT to
R381.9 million (2017: R429.6 million).
Bank facilities totalling R941 million were refinanced at a blended margin of 2.6% above the three-month
Jibar reference rate, and a R125 million commercial paper was settled during the year.
The weighted average all-in cost of funding is 9.2% (2017: 9.2%), with 85.4% (2017: 84.1%) of borrowings
being fixed through a combination of swap contracts and fixed rate loans for an average period of
1.5 years (2017: 2.2 years). The average debt facility expiry period is 1.5 years (2017: 1.9 years)
with the interest cover ratio at 2.4 (2017: 2.5).
The debt expiry period is directly linked to the lease term; hence, the intention is to term out the
debt expiry profile once the bulk lease renewals are concluded. We expect the disposal of assets
held-for-sale and conclusion of the bulk lease renewal during the 2019 financial year to have a
significant positive impact on the gearing of the fund.
Provision of financial assistance
Delta shareholders are referred to special resolution number 4 relating to the provision of
direct or indirect financial assistance in terms of section 45 of the Companies Act, No 71
of 2008 ("the Companies Act") to related or inter-related companies, which was approved at the
Annual General Meeting of Delta on 21 September 2017.
Further to the above, Delta shareholders are notified in terms of section 45(5)(a) of the Companies
Act, that the Board of directors of the Company ("the Board") passed a resolution on 29 May 2018
("the Board resolution") granting financial assistance to the following related companies:
- Somnipoint Proprietary Limited - R32.7 million in respect of a loan to a company with common directors.
- Delta Property Asset Management Proprietary Limited - R16.7 million in respect of a loan to a
company with common directors.
- GRIT Real Estate Income Group Limited - R5.6 million in respect of a guarantee fee charged.
- Hestitrix Proprietary Limited - R249.2 million in the ordinary course of business.
- K2014000273 Proprietary Limited - R153.8 million in the ordinary course of business.
- 277 Vermeulen Street Properties Proprietary Limited - R20.2 million in the ordinary course of business.
- Hendisa Investments Proprietary Limited - R33 614 in the ordinary course of business.
The financial assistance provided, as detailed above, is greater than one-tenth of 1% of Delta's net
worth as at the date of the Board resolution. The Board further confirms that immediately after
providing the financial assistance, the Company continues to satisfy the solvency and liquidity
test as contemplated in section 4 of the Companies Act and that the terms and conditions of the
financial assistance are fair and reasonable to the Company.
Changes to directorate during the period
During the reporting period, the Board was further bolstered with the appointment of Mr JJ Njeke
and Mr Caswell Rampheri as independent non-executive directors. Both gentlemen bring significant
property experience to the Board.
Mr Andrew Konig stepped down as non-executive director following the disposal of Redefine's
shareholding in Delta to a black women-led empowerment group, which included Ms Nooraya Khan.
The Board thanks Andrew for his contributions during his tenure. Following the transaction,
Nooraya stepped down as lead independent director but remains on the Board as non-executive
director.
Mr JJ Njeke was subsequently appointed as lead independent director and Chairman of the Audit,
Risk and Compliance Committee. Post the reporting date, Ms Bronwyn Corbett resigned as
independent non-executive director to focus full time on her role as Chief Executive Officer
of Grit. We thank Bronwyn for her valuable contributions over the years and wish her the very best.
Prospects
The South African Reserve Bank's recently released Financial Stability Review, concluded that
South Africa's financial sector is strong and stable and continues to feed off positive business
and consumer sentiment, in spite of global uncertainties, monetary policy normalisation and
protectionist measures. The general euphoria that spurred consumer and business confidence has
been aided by the positive confidence levels, ongoing household balance sheet recovery and the
aversion of a Moody's sovereign ratings downgrade. This increased confidence has seen a warming
of real estate investors' sentiment to dominant domestic focused listed REITs.
Delta continues to focus on property fundamentals by renewing leases, reducing vacancies,
refinancing debt at market related rates and investing in both defensive and accretive capital
in its property portfolio. This consolidated effort will translate into a healthier balance
sheet with opportunities for growth. Efforts to recapitalise the business are underway and
the proposed transaction with the empowerment consortium, once successfully concluded, will
inject much needed capital into the business and achieve significant direct black ownership
of Delta.
In the lead-up to the 2019 national elections, the Board expects that the domestic-focused
listed property market will continue to face headwinds, with perceptions around sovereign
underpinned funds being driven by increased political rhetoric and positioning. The Board
and management remain committed to Delta's sovereign strategy despite the current
challenging and tough trading climate.
The Board anticipates earnings to decrease by between 2% and 4% for the 2019 financial year
primarily due to once-off lease adjustments being traded off for longer-term leases (DPW bulk
lease renewal), disposal of assets held-for-sale and issue of shares for acquisition of the
Free State portfolio. The Group's independent auditors have not reviewed nor reported on this
forecast.
Declaration of final dividend ("the cash dividend") with the election to reinvest the dividend
Shareholders are advised that dividend number 11 of 50.84210 cents per share for the year ended
28 February 2018 has been declared. The source of the cash dividend is from distributable income.
Shareholders will be entitled, in respect of all or part of their shareholding, to elect to
reinvest the cash dividend in return for Delta shares ("the dividend reinvestment alternative"),
failing which they will receive the cash dividend in respect of all or part of their shareholding.
The number of Delta shares to which shareholders are entitled will be determined with reference
to the ratio that 50.84210 cents per Delta share bears to the ratio price, being the five-day
volume weighted average traded price (cum dividend) of Delta shares on the JSE prior to the
finalisation date, which will be no later than Tuesday, 19 June 2018.
The Board of directors of Delta, at its discretion, may withdraw the dividend reinvestment
alternative should market conditions warrant such action and such withdrawal will be
communicated to shareholders prior to the finalisation announcement to be published no
later than 11:00 on Tuesday, 19 2018.
Salient dates of the cash dividend and the dividend reinvestment alternative:
2018
Declaration date of cash dividend and dividend
reinvestment alternative Monday, 4 June
Circular and form of election posted to
Delta shareholders Wednesday, 6 June
Announcement of dividend reinvestment alternative
ratio (including ratio price) and finalisation
information ( finalisation date”) released on
SENS by 11:00 Tuesday, 19 June
Last day to trade in order to be eligible for the
cash dividend and dividend reinvestment alternative Tuesday, 26 June
Delta Shares commence trading ex cash dividend and dividend
reinvestment alternative Wednesday, 27 June
Last day to elect to receive the dividend reinvestment
alternative (no late forms of election will be accepted)
by 12:00 Friday, 29 June
Listing of maximum possible number of Delta shares in
respect of the dividend reinvestment alternative
commences on the JSE Friday, 29 June
Record date of cash dividend and dividend
reinvestment alternative Friday, 29 June
Announcement of results of cash dividend and
dividend reinvestment alternative on SENS Monday, 2 July
Cheques posted to certificated shareholders and accounts
credited by CSDP or broker to dematerialised shareholders
electing the cash dividend on Monday, 2 July
Announcement of results of cash dividend and dividend
reinvestment alternative in the press Tuesday, 3 July
Share certificates posted to certificated shareholders
and accounts credited by CSDP or broker to
dematerialised shareholders electing the dividend
reinvestment alternative on Wednesday, 4 July
Adjustment to Delta shares listed on or about Thursday, 5 July
Notes:
1. All dates and times indicated are South African dates and times.
2. All dates and times are subject to change. Any change will be announced on SENS.
3. Delta shares may not be dematerialised or rematerialised between commencement of trade on
Wednesday, 27 June 2018 and the close of trade on Friday, 29 June 2018, both dates included.
4. Shareholders electing the dividend reinvestment alternative should note that settlement of
the Delta Shares will occur three business days after the record date, which differs from the
conventional one business day after the record date settlement process.
Tax implications
In accordance with Delta's REIT status, shareholders are advised that the cash dividend meets the
requirements of a "qualifying distribution" for the purposes of section 25BB of the Income Tax
Act, No. 58 of 1962 ("Income Tax Act"). An announcement informing shareholders of the tax treatment
of the distributions will be released separately on SENS.
Basis of preparation and accounting policies
The condensed consolidated financial statements have been prepared in accordance with the
International Financial Reporting Standards ("IFRS"), IAS 34 Interim Financial Reporting,
the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and
Financial Pronouncements as issued by the Financial Reporting Standards Council, the JSE
Listings Requirements and the requirements of the Companies Act of South Africa. The
accounting policies applied in the preparation of these interim results are in terms of
IFRS and are consistent with those applied in the previous annual financial statements.
The condensed consolidated financial statements have been prepared under the supervision
of the Chief Financial Officer, Mr Shaneel Maharaj, CA(SA)/HDipTax, and have been reviewed
by BDO South Africa Incorporated, who expressed an unmodified review conclusion.
A copy of the auditor's review report is available for inspection at the Company's registered
office together with the financial statements identified in the auditor's report. The auditors'
report does not necessarily cover all the information contained in this announcement.
Shareholders are therefore advised that in order to obtain a full understanding of the
nature of the auditors' work they should obtain a copy of that report together with the
accompanying financial information from the registered office of the Company.
The directors take full responsibility for the preparation of the provisional report and
the financial information has been correctly extracted from the underlying financial
statements. Delta has complied with IFRS and JSE Listings Requirements by disclosing
earnings and headline earnings per share. Distribution per share has been disclosed
additionally.
By order of the Board
JB Magwaza SH Nomvete
(Chairman) (Chief Executive Officer)
31 May 2018
Condensed consolidated statement of financial position
as at 28 February 2018
Group Company
2018 2017 2018 2017
R'000 R'000 R'000 R'000
Assets
Non-current assets
Investment property 10 535 000 10 053 921 10 268 200 9 793 123
Fair value of investment property 10 342 418 9 861 449 10 076 207 9 600 791
Straight-line rental income accrual 192 582 192 472 191 993 192 332
Property, plant and equipment 2 557 3 302 2 557 3 302
Investment in subsidiaries - - 62 273 62 273
Investment in joint venture - - - 2
Investment in associate 381 868 391 013 381 868 429 587
Loans due from subsidiaries - - 423 268 405 152
Derivative financial instruments - 35 - 35
10 919 425 10 448 271 11 138 166 10 693 474
Current assets
Loans due from related parties 55 243 108 483 55 243 108 483
Loan receivable 48 465 - 48 465 -
Current tax receivable 526 1 153 - -
Trade and other receivables 338 845 276 091 302 985 256 400
Derivative financial instruments - 1 721 - 1 721
Cash and cash equivalents 100 177 196 115 96 864 194 372
543 256 583 563 503 557 560 976
Non-current assets held-for-sale 972 600 1 327 500 744 600 1 101 700
Total assets 12 435 281 12 359 334 12 386 323 12 356 150
Equity
Share capital 4 854 032 4 845 248 4 854 032 4 845 248
Reserves 144 230 139 779 139 425 139 425
Retained income 2 160 330 2 056 589 2 117 907 2 056 438
Total equity 7 158 592 7 041 616 7 111 364 7 041 111
Liabilities
Non-current liabilities
Derivative financial instruments 31 475 29 623 31 475 29 623
Interest-bearing borrowings 2 688 755 4 112 646 2 688 755 4 112 646
Loans due to subsidiaries - - 4 190 4 190
2 720 230 4 142 269 2 724 420 4 146 459
Current liabilities
Interest-bearing borrowings 2 263 935 986 581 2 263 935 986 581
Trade and other payables 183 983 121 823 177 453 114 954
Derivative financial instruments 11 426 23 768 11 426 23 768
Bank overdraft 97 115 43 277 97 725 43 277
2 556 459 1 175 449 2 550 539 1 168 580
Total liabilities 5 276 689 5 317 718 5 274 959 5 315 039
Total equity and liabilities 12 435 281 12 359 334 12 386 323 12 356 150
Statement of profit or loss and other comprehensive income
for the year ended 28 February 2018
Group Company
2018 2017 2018 2017
R'000 R'000 R'000 R'000
Revenue
Rental income 1 562 033 1 612 481 1 505 471 1 557 344
Straight-line rental income accrual 2 020 4 863 1 134 4 432
1 564 053 1 617 344 1 506 605 1 561 776
Property operating expenses (414 168) (464 003) (406 068) (455 703)
Net property rental and related income 1 149 885 1 153 341 1 100 537 1 106 073
Other income 20 287 6 215 20 278 6 027
Dividend income - - 50 812 80 798
Gain on foreign exchange differences 16 881 20 336 16 881 20 336
Administration expenses (53 329) (68 169) (52 838) (66 649)
Net operating profit 1 133 724 1 111 723 1 135 670 1 146 585
Fair value adjustments 104 759 (34 887) 99 975 (49 904)
Profit from operations 1 238 483 1 076 836 1 235 645 1 096 681
Finance costs (482 179) (470 580) (482 624) (470 578)
Interest income 19 696 27 168 50 497 54 930
Share of profit in associate 43 970 1 526 - -
Impairment of investment in associate (21 900) - (47 719) (80 586)
Profit before taxation 798 070 634 950 755 799 600 447
Taxation - - - -
Profit for the year 798 070 634 950 755 799 600 447
Other comprehensive income:
Items that may be reclassified
subsequently to profit and loss
Share of foreign currency translation
reserve of associate 4 451 44 150 - -
Total comprehensive income for the year 802 521 679 100 755 799 600 447
Profit for the year attributable to:
Owners of the parent 798 070 634 950 755 799 600 447
Total comprehensive income attributable to:
Owners of the parent 802 521 679 100 755 799 600 447
Basic and diluted earnings per share (cents) 112.26 89.49 - -
Condensed consolidated statement of changes in equity
for the year ended 28 February 2018
Foreign
currency Deferred
Share translation con- Total Retained Total
capital reserve sideration reserves income equity
R'000 R'000 R'000 R'000 R'000 R'000
Group
Balance at 1 March 2016 3 450 593 (43 796) 259 720 215 924 1 990 112 5 656 629
Total comprehensive income
for the year - 44 150 - 44 150 634 950 679 100
Profit for the year - - - - 634 950 634 950
Other comprehensive income - 44 150 - 44 150 - 44 150
Issue of shares - issued as
consideration
for investment property 1 255 834 - - - - 1 255 834
Capital issue expenses (604) - - - - (604)
Deferred consideration settled
- issue of shares 139 425 - (139 425) (139 425) - -
Deferred consideration raised - - 19 130 19 130 - 19 130
Distributions paid - - - - (568 473) (568 473)
Balance at 1 March 2017 4 845 248 354 139 425 139 779 2 056 589 7 041 616
Total comprehensive income
for the year - 4 451 - 4 451 798 070 802 521
Profit for the year - - - - 798 070 798 070
Other comprehensive income - 4 451 - 4 451 - 4 451
Distribution reinvestment 8 784 - - - - 8 784
Distributions paid - - - - (694 329) (694 329)
Balance at 28 February 2018 4 854 032 4 805 139 425 144 230 2 160 330 7 158 592
Company
Balance at 1 March 2016 3 450 593 - 259 720 259 720 2 024 464 5 734 777
Total comprehensive income
for the year - - - - 600 447 600 447
Profit for the year - - - - 600 447 600 447
Other comprehensive income - - - - - -
Issue of shares - issued as
consideration
for investment property 1 255 834 - - - - 1 255 834
Capital issue expenses (604) - - - - (604)
Deferred consideration settled
- issue of shares 139 425 - (139 425) (139 425) - -
Deferred consideration raised - - 19 130 19 130 - 19 130
Distributions paid - - - - (568 473) (568 473)
Balance at 1 March 2017 4 845 248 - 139 425 139 425 2 056 438 7 041 111
Total comprehensive income
for the year - - - - 755 799 755 799
Profit for the year - - - - 755 799 755 799
Other comprehensive income - - - - - -
Distribution reinvestment 8 784 - - - - 8 784
Distributions paid - - - - (694 329) (694 329)
Balance at 28 February 2018 4 854 032 - 139 425 139 425 2 117 907 7 111 364
Condensed consolidated statement of cash flows
for the year ended 28 February 2018
Group Company
2018 2017 2018 2017
R'000 R'000 R'000 R'000
Cash generated from operations 1 132 324 1 016 482 1 100 863 967 411
Interest received 12 158 7 823 42 504 35 584
Dividend received 18 587 18 851 33 733 60 159
Finance costs (475 899) (482 090) (475 899) (482 090)
Taxation refund 627 - - -
Dividends paid (694 329) (568 473) (694 329) (568 473)
Net cash from operating activities (6 532) (7 407) 6 872 12 591
Acquisition of property, plant and equipment (498) (260) (498) (260)
Acquisition of investment property - (60 300) - (60 300)
Capital expenditure on investment
property and assets held-for-sale (185 436) (202 965) (182 905) (196 217)
Proceeds on disposal of assets held-for-sale 205 200 268 500 205 200 268 500
Gross movement in loans with related parties 26 223 18 634 26 223 18 634
Increase in loan receivable (48 465) - (48 465) -
Loans advanced to subsidiaries - - (18 115) (27 543)
Net cash from investing activities (2 976) 23 609 (18 560) 2 814
Distribution reinvestment 8 784 - 8 784 -
Capital issue expenses - (604) - (604)
Increase in interest-bearing borrowings 220 358 418 800 220 358 418 800
Repayment of interest-bearing borrowings (360 385) (387 313) (360 385) (387 313)
Repayment of other financial liabilities (9 025) - (9 025) -
Net cash from financing activities (140 268) 30 883 (140 268) 30 883
Net movement in cash and cash equivalents (149 776) 47 085 (151 956) 46 288
Cash at the beginning of the year 152 838 105 753 151 095 104 807
Total cash at the end of the year 3 062 152 838 (861) 151 095
Reconciliation of earnings, headline earnings and distributable earnings
for the year ended 28 February 2018
Group
2018 2017
R'000 R'000
Earnings, headline earnings and distributable earnings
Profit for the year 798 070 634 950
Fair value adjustment to investment properties (148 562) 103 922
Change in fair value of Delta's investment properties (146 611) 43 817
Change in fair value of associate's investment properties (1 951) 60 105
Headline earnings 649 508 738 872
Fair value adjustment to financial instruments
(net of deferred taxation) 290 (8 930)
Change in fair value of financial instrument 290 (8 930)
Deferred taxation - -
Fair value adjustment to investment in joint venture
(net of deferred taxation) 41 562 -
Fair value adjustment on disposal of Baystone 41 562 -
Deferred taxation - -
Straight-line rental income accrual (net of deferred taxation) (2 020) (4 863)
Straight-line rental income accrual (2 020) (4 863)
Deferred taxation - -
Antecedent distribution 257 -
Unrealised foreign exchange gain (16 881) (20 336)
Dividend income from associate 35 666 37 990
Share of profit in associate (43 970) (1 526)
Change in fair value of associate's investment properties 1 951 (60 105)
Impairment of investment in associate 21 900 -
Prior year retained earnings distributed 3 378 -
Distributable earnings attributable to owners of the parent 691 641 681 102
Less: distribution declared 691 641 677 724
Interim 329 724 313 119
Final (declared after 28 February 2018) 361 917 364 605
Distributable earnings retained - 3 378
Weighted average number of shares in issue
In issue at the beginning of the year 710 632 182 533 097 436
Shares issued - 160 941 759
Distribution reinvestment 295 603 -
Deferred consideration shares allocated - 15 491 667
Weighted average number of shares in issue 710 927 785 709 530 862
Actual number of shares in issue
Number of shares in issue at interim 710 632 182 681 722 806
Number of shares in issue at year-end 711 844 486 710 632 182
Basic and diluted earnings and headline earnings
per share (cents)
Basic and diluted earnings per share 112.26 89.49
Basic and diluted headline earnings per share 91.36 104.14
Distribution per share (cents)
Interim 46.40 45.93
Final (declared after 28 February 2018) 50.84 51.31
Distribution per share declared for the full year 97.24 97.24
The Fund has no dilutionary instruments in issue.
Condensed consolidated segmental analysis
for the year ended 28 February 2018
Admin-
istration and
Office Office corporate
Retail government other Industrial costs Total
R'000 R'000 R'000 R'000 R'000 R'000
Group 2018
Rental income 38 544 1 138 261 358 925 26 303 - 1 562 033
Straight line rental
income accrual 4 091 (4 463) 3 620 (1 228) - 2 020
Property operating expenses (13 800) (254 560) (139 131) (6 677) - (414 168)
Net property rental and
related income 28 835 879 238 223 414 18 398 - 1 149 885
Fair value adjustment to
investment properties 35 781 346 503 (87 379) (30 379) (117 915) 146 611
Fair value adjustment to
investment in joint venture disposed - - - - (41 562) (41 562)
Fair value adjustment to
derivative financial instruments - - - - (290) (290)
Assets
Fair value of investment property 318 572 7 431 687 2 592 159 - - 10 342 418
Straight-line rental income accrual 11 428 158 613 22 541 - - 192 582
Non-current assets held-for-sale - 593 400 192 400 186 800 - 972 600
Other assets 30 252 174 895 119 752 3 856 598 926 927 681
360 252 8 358 595 2 926 852 190 656 598 926 12 435 281
Liabilities
Total liabilities 187 411 4 696 358 1 947 170 105 236 (1 659 486) 5 276 689
Group 2017
Contractual rental income 71 198 1 302 985 216 403 21 895 - 1 612 481
Straight line rental income accrual (2 001) 6 829 (278) 312 - 4 863
Property operating expenses (27 823) (352 429) (76 792) (6 959) - (464 003)
Net property rental and
related income 41 374 957 386 139 333 15 248 - 1 153 341
Fair value adjustment to
investment properties 40 239 33 874 (74 826) 9 548 (52 652) (43 817)
Fair value adjustment to derivative
financial instruments - - - - 8 930 8 930
Assets
Fair value of investment property 439 242 8 185 019 1 237 188 - - 9 861 449
Straight-line rental income 9 295 172 693 10 484 - - 192 472
Non-current assets held-for-sale - 900 400 269 100 158 000 - 1 327 500
Other assets 23 650 301 417 (64 757) 1 243 712 947 974 500
Total assets 472 187 9 559 529 1 452 015 159 243 712 947 12 355 921
Liabilities
Total liabilities 339 641 73 382 15 244 1 632 4 887 819 5 317 718
The segmental report has been populated based on a per building classification which is in accordance
with the majority tenant.
Corporate information
Directors
JB Magwaza^ (Chairman), SH Nomvete* (CEO), S Maharaj* (CFO), ON Tshabalala* (COO), N Khan~, DN Motau^,
ID Macleod^, MJN Njeke ^#, NN Afolayan^, MCR Rampheri^
^Independent non-executive; *Executive; ~Non-executive; #Lead independent director
Registered office
Silver Stream Office Park
10 Muswell Road South
Bryanston
(Postnet Suite 210, Private Bag X21, Bryanston, 2021)
Transfer secretaries
Computershare Investor Services Proprietary Limited
Sponsor
Nedbank Corporate and Investment Banking
www.deltafund.co.za
Date: 04/06/2018 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.