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NEWPARK REIT LIMITED - Condensed unaudited consolidated financial statements for the six months ended 31 August 2018

Release Date: 10/10/2018 08:01
Code(s): NRL     PDF:  
 
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Condensed unaudited consolidated financial statements for the six months ended 31 August 2018

NEWPARK REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2015/436550/06)
JSE share code: NRL ISIN: ZAE000212783
(Approved as a REIT by JSE)
("Newpark" or "the Company" or "the Group")

CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 AUGUST 2018

DIRECTORS' COMMENTARY

Nature of business

Newpark is a property holding and investment company that is currently invested in A-grade commercial and industrial properties.

Property portfolio

Newpark's property portfolio consists of four properties. Two are located in the heart of Sandton, Gauteng, namely the JSE Building
which has 18,163 m2 of gross lettable area ("GLA") and an adjoining property known as 24 Central, which has 15,656 m2 of GLA. 
A further property is situated in Linbro Business Park which has 12,317 m2 of GLA and the fourth property is situated in Crown Mines
which has 11,277 m2 of GLA. The combined valuations of these properties prepared by the registered property valuer are performed
annually at the group's year-end. The latest valuation as at 28 February 2018 was R1.38 billion.

Strategy
Newpark's investment strategy is to seek well positioned prime commercial and industrial properties which provide quality cash
flows with the potential of upward rating on lease renewals and/or redevelopment opportunities within the medium to long-term.
In addition to the core business of acquiring and developing physical assets in South Africa, Newpark continues to explore the
potential for investment into real estate that offers good value in certain offshore markets that align with our investment philosophy. 

Commentary on results
The Group's results for the six month period under review came under increased pressure impacted by further vacancies in the
Group's mixed use asset in Sandton, 24 Central, resulting in the Group's vacancies increasing during the period to 17.4% (FY2018:
11.2%; prior comparable period H1 FY2018: 4.8%). The vacancies, which started to increase during the six months to 28 February
2018 continued further with a large tenant decided to consolidate its office footprint into their main office space. Expense controls
were applied to mitigate the impact of this loss of revenue but could not compensate entirely for the impact on distributable
earnings.

The increased vacancies caused the revenue to decline to R67.0 million (H1 FY2018: R71.1 million), a decrease of 5.8%. Besides the
vacancies at 24 Central, the tenant profile has remained largely the same and no acquisitions or disposals were made during this
period.

Distributable earnings
Distributable earnings for the six months to 31 August 2018 declined by 6.4% to 24.95 cents per share (H1 FY2018: 26.65 cents per
share). Accordingly, the board of directors ("the Board") has declared an interim dividend of 24.94859 cents per share.

SECTORAL SPLIT                                           
Based on:                                                           GLA   Gross Rentals   
Mixed use (retail and office)                                      8.8%           11.9%   
Office                                                            50.1%           67.5%   
Industrial                                                        41.1%           20.6%   
                                                                 100.0%          100.0%   


LEASE EXPIRY PROFILE & VACANCIES                                                          
Based on:                                                           GLA   Gross Rentals   
Vacant                                                            17.4%           21.5%   
Feb 2019                                                           1.7%            2.8%   
Feb 2020                                                           4.7%            4.6%   
Feb 2021                                                           0.2%            0.3%   
Feb 2022                                                           3.1%            6.0%   
Feb 2023                                                           0.0%            0.0%   
> Feb 2023                                                        72.9%           64.8%   
                                                                 100.0%          100.0%   


Funding                                                                                                   
                                                                 Amount    Margin                         
Facilities                                                       R'000                                    
Expiry May 2020 (facility 1A)                                    450 000   3-month Jibar+1.95% [9.542%]   
Expiry May 2020 (facility 1B)                                    50 000    Prime-1.28% [8.970%]           
TOTAL                                                            500 000                                  
                                                                 Amount    Hedges of 3-month Jibar        
Hedge instruments                                                R'000     base-rate                      
Hedge 1: rate swap - amended on 2017/6/30, replaced by Hedge 4   135 000   8.52%                          
Hedge 2: rate cap    - expires 2019/1/18                         135 000   8.52%                          
Hedge 3: rate swap - expires 2020/4/10 (rolls into Hedge 5)      230 000   7.70%                          
Hedge 4: rate swap - started 2017/6/30 / expires 2022/5/31       135 000   8.085%                         
Hedge 5: rate swap - to start 2020/4/10 / expires 2022/5/31      135 000   7.993%                         

Interest rate & Percentage of debt hedged

The all-in weighted average cost of funding is 9.542% (28 February 2018: 9.478%) and the average hedge-term is 1.8 years. It is the
board's policy to hedge at least 70% of the exposure to interest rate risk and Newpark currently has 80% of its exposure hedged.

Summary of financial performance

                                         31 August 2018   31 August 2017   28 February 2018   
Shares in issue                          100,000,001      100,000,001      100,000,001        
Net asset value per share                R9.19            R8.75            R9.04              
Loan-to-value ratio *                    32.2%            33.3%            32.7%              
Gross property operating expense ratio   16.1%            17.0%            19.5%              

*The loan-to-value ratio is calculated by dividing interest bearing borrowing net of cash on hand by the total of investment property.

Outlook                                                                                                                                   
As a result of the increased vacancies in the Group's mixed use segment the Board has decided to revise the outlook for distributable     
earnings performance for the full year ending 28 February 2019 downwards from an increase in distributable earnings of between            
6.0% and 8.0% to a decrease in distributable earnings of between  6.0% and 8.0% compared with the 12 months ended 28 February 2018.            
The outlook for FY2019 previously communicated to the market is no longer expected to be achievable due to the changes in market          
conditions and the direct impact this had on the Group's vacancy profile. The board remains mindful of the current pressures              
experienced by tenants in the mixed-use (retail and office) segment, manifesting in higher than desired vacancies for the short-term. 
    
Newpark will continue to focus on a disciplined approach to the acquisition of high quality properties that offer meaningful growth       
in both capital and income. In the year ahead, the emphasis will be on closing a number of the transactions that are in the current       
pipeline in order to grow the portfolio in a manner that is value enhancing for shareholders.     
                                        
The revised forecast is based on no further material vacancies at 24 Central and the assumption that a stable macro-economic              
environment will prevail, no material tenant default will occur, operating cost increases will not exceed inflation and no changes will   

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                                                                      Unaudited   Unaudited       Audited   
                                                                                      31 August   31 August   28 February   
                                                                                           2018        2017          2018   
                                                                                        (R'000)     (R'000)       (R'000)   
Assets                                                                                                                      
Non-current assets                                                                                                          
Investment properties                                                        note 3   1 261 620   1 235 407     1 261 766   
Straight-line lease asset                                                               107 831      95 580        99 984   
Lease incentive                                                                          15 879      18 526        17 203   
                                                                                      1 385 330   1 349 513     1 378 953   
Current Assets                                                                                                              
Trade and other receivables                                                               8 704       7 754         6 182   
Straight-line lease asset                                                                   210       1 080             -   
Lease incentive                                                                           2 647       2 647         2 647   
Receiver of revenue                                                                           -           -         2 273   
Cash and cash equivalents                                                                 7 618      49 723         1 720   
Total Current Assets                                                                     19 179      61 204        12 822   
Total Assets                                                                          1 404 509   1 410 717     1 391 775   
Equity and Liabilities                                                                                                      
Equity                                                                                                                      
Share capital                                                                           619 918     619 918       619 918   
Reserves                                                                                180 412     180 412       180 412   
Retained income                                                                         118 550      74 980       103 598   
                                                                                        918 880     875 310       903 928   
Liabilities                                                                                                                 
Non-Current Liabilities                                                                                                     
Bank borrowings                                                                         454 000     500 000       453 400   
Derivative financial instruments                                                          1 634      12 723        11 050   
                                                                                        455 634     512 723       464 450   
Current liabilities                                                                                                         
Trade and other payables                                                                 29 995      22 684        23 397   
Total Current Liabilities                                                                29 995      22 684        23 397   
Total Liabilities                                                                       485 629     535 407       487 847   
Total Equity and Liabilities                                                          1 404 509   1 410 717     1 391 775   

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                                            Unaudited        Unaudited           Audited   
                                                                       6 months ended   6 months ended   12 months ended   
                                                                            31 August        31 August       28 February   
                                                                                 2018             2017              2018   
                                                                              (R'000)          (R'000)           (R'000)   
Revenue                                                                        66 974           71 086           136 450   
Property operating expenses                                                  (10 806)         (12 051)          (26 571)   
Administrative expenses                                                       (2 932)          (2 944)           (6 177)   
Net gain from fair value adjustment on investment                                   -                -            25 383   
property                                                                                                                   
Net change in fair value of financial instruments at                            9 416          (9 645)           (7 972)   
fair value through profit or loss                                                                                          
Operating profit                                                               62 652           46 446           121 113   
Finance income                                                                    790            1 438             1 884   
Finance costs                                                                (22 344)         (23 521)          (45 639)   
Profit before taxation                                                         41 098           24 363            77 358   
Taxation                                                                            -              155             2 428   
Profit for the period                                                          41 098           24 518            79 786   
Other comprehensive income                                                          -                -                 -   
Total comprehensive income                                                     41 098           24 518            79 786   
Earnings per share information (cents per share)                                                                           
Basic earnings per share                                      note 4            41.10            24.52             79.79   
Diluted earnings per share                                    note 4            41.10            24.52             79.79   


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                        Share capital   Share issue   Total share          Capital   Retained      Total   
                                                              costs       capital   reorganisation     income     equity   
                                                                                           reserve                         
                                              (R'000)       (R'000)       (R'000)          (R'000)    (R'000)    (R'000)   
Audited                                                                                                                    
Balance at 1 March 2017                       625 000       (5 082)       619 918          180 412     75 024    875 354   
Costs associated with issue of                                                                                             
shares                                              -             -             -                -     79 786     79 786   
Dividend distributions to                                                                                                  
owners of company                                                                                                          
recognised directly in equity                       -             -             -                -   (51 212)   (51 212)   
Balance at 1 March 2018                       625 000       (5 082)       619 918          180 412    103 598    903 928   
Unaudited                                                                                                                  
Profit for the period                               -             -             -                -     41 098     41 098   
Dividend distributions to                                                                                                  
owners of company                                                                                                          
recognised directly in equity                       -             -             -                -   (26 146)   (26 146)   
Balance at 31 August 2018                     625 000       (5 082)       619 918          180 412    118 550    918 880   

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS                                                         
                                                                            Unaudited        Unaudited           Audited   
                                                                       6 months ended   6 months ended   12 months ended   
                                                                            31 August        31 August       28 February   
                                                                                 2018             2017              2018   
                                                                              (R'000)          (R'000)           (R'000)   
Cash flows from operating activities                                                                                       
Cash generated from operations                                                 50 760           47 885            96 000   
Finance income                                                                    790            1 438             1 884   
Finance costs                                                                (22 344)         (23 521)          (45 639)   
Tax received                                                                    2 274                -                 -   
Net cash from operating activities                                             31 480           25 802            52 245   
Cash flows from investing activities                                                                                       
Purchase of furniture and fittings                                               (36)          (1 381)           (2 578)   
Net cash from investing activities                                               (36)          (1 381)           (2 578)   
Cash flows from financing activities                                                                                       
Dividends paid                                                               (26 146)         (24 562)          (51 212)   
Bank borrowings advanced                                                          600                -                 -   
Bank borrowings repaid                                                              -            (882)          (47 481)   
Net cash from financing activities                                           (25 546)         (25 444)          (98 693)   
Total cash and cash equivalent movement for the                                 5 898          (1 023)          (49 026)   
period                                                                                                                     
Cash and cash equivalents at beginning of period                                1 720           50 746            50 746   
Total cash and cash equivalents at end of period                                7 618           49 723             1 720   
Additional info on cash flow:                                                                                              
Cash generated from operations before working                                  46 685           48 733            94 562   
capital changes                                                                                                            
Working capital changes                                                         4 075            (848)             1 438   
Cash generated from operations                                                 50 760           47 885            96 000   

SIGNIFICANT FINANCIAL STATEMENT NOTES

1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed unaudited consolidated financial statements for the six months ended 31 August 2018 have been prepared in
accordance with the requirements of the JSE Listings Requirements and the requirements of the Companies Act 71 of 2008 of South
Africa. The JSE Listings Requirements require interim reports to be prepared in accordance with the framework concepts and the
measurement and recognition requirements of International Financial Reporting Standards ("IFRS"), the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting
Standards Council, and to also, as a minimum, contain the information required by IAS 34, Interim Financial Reporting. The
accounting policies applied in the preparation of these financial statements are in terms of IFRS and are consistent with those applied
in the previous consolidated annual financial statements.

The condensed unaudited consolidated financial statements were compiled by Dries Ferreira CA(SA), the Company's financial
director.

The directors are not aware of any matters or circumstances arising subsequent to the period-end that require any additional
disclosure or adjustment to the financial statements.

The directors take full responsibility for the preparation of this interim condensed report. These condensed unaudited consolidated
interim financial statements have not been reviewed by the Company's auditors.

2. SEGMENTAL ANALYSIS
Segmental information
At 31 August 2018, the Group is organised into three main operating segments:
     - Mixed use (mainly office and retail)
     - Office
     - Industrial
The executive committee ("EXCO") is the chief operating decision maker of the group. The information contained in the segment
analysis is measured in a manner consistent with the information disclosed in the statement of comprehensive income and the
statement of financial position.

31 August 2018 (unaudited)                                               Mixed use    Office   Industrial    General      Total   
                                                                           (R'000)   (R'000)      (R'000)    (R'000)    (R'000)   
Revenue                                                                     23 348    28 246       15 380          -     66 974   
Property operating expenses                                                (9 293)         -      (1 513)          -   (10 806)   
Administrative expenses                                                          -         -            -    (2 932)    (2 932)   
Net change in fair value of financial                                            -         -            -      9 416      9 416   
instruments at fair value through profit or                                                                                       
loss                                                                                                                              
Operating profit                                                            14 055    28 246       13 867      6 484     62 652   
31 August 2017 (unaudited)                                               Mixed use    Office   Industrial    General      Total   
                                                                           (R'000)   (R'000)      (R'000)    (R'000)    (R'000)   
Revenue                                                                     27 443    28 235       15 408          -     71 086   
Property operating expenses                                               (10 461)         -      (1 590)          -   (12 051)   
Administrative expenses                                                          -         -            -    (2 944)    (2 944)   
Net change in fair value of financial                                            -         -            -    (9 645)    (9 645)   
instruments at fair value through profit or                                                                                       
loss                                                                                                                              
Operating profit                                                            16 981    28 235       13 818   (12 589)     46 446   
28 February 2018 (audited)                                               Mixed use    Office   Industrial    General      Total   
                                                                           (R'000)   (R'000)      (R'000)    (R'000)    (R'000)   
Revenue                                                                     49 108    56 568       30 773          -    136 450   
Property operating expenses                                               (23 286)         -      (3 285)          -   (26 571)   
Administrative expenses                                                          -         -            -    (6 177)    (6 177)   
Fair value adjustments                                                    (24 464)    42 548        7 299    (7 972)     17 411   
Operating profit                                                             1 358    99 116       34 788   (14 149)    121 113   

The amounts provided to the EXCO with respect to total assets are measured in a manner consistent with that in the statement of
financial position. These assets are allocated based on the operations of the segment.

31 August 2018 (unaudited)                                               Mixed use    Office   Industrial   General       Total   
                                                                           (R'000)   (R'000)      (R'000)   (R'000)     (R'000)   
Investment property                                                        464 601   574 152      222 867         -   1 261 620   
Straight-line lease asset                                                    2 039    82 072       23 930         -     108 041   
Lease incentive                                                                  -    18 526            -         -      18 526   
Trade & other receivables                                                    8 699         -            5         -       8 704   
Cash & cash equivalents                                                          -         -            -     7 618       7 618   
                                                                           475 339   674 750      246 802     7 618   1 404 509   
31 August 2017 (unaudited)                                               Mixed use    Office   Industrial   General       Total   
                                                                           (R'000)   (R'000)      (R'000)   (R'000)     (R'000)   
Investment property                                                        488 637   531 603      215 167         -   1 235 407   
Straight-line lease asset                                                    3 465    73 920       19 275         -      96 660   
Lease incentive                                                                  -    21 173            -         -      21 172   
Trade & other receivables                                                    7 705         -           50         -       7 755   
Cash & cash equivalents                                                          -         -            -    49 723      49 723   
                                                                           499 807   626 696      234 491    49 723   1 410 717   


28 February 2018 (audited)                                                Mixed use    Office   Industrial   General       Total   
                                                                            (R'000)   (R'000)      (R'000)   (R'000)     (R'000)   
Investment property                                                         464 748   574 151      222 867         -   1 261 766   
Straight-line asset                                                             252    77 999       21 733         -      99 984   
Lease incentive                                                                   -    19 850            -         -      19 850   
Trade and other receivables                                                   6 182         -            -         -       6 182   
Receiver of revenue                                                               -         -        2 273         -       2 273   
Cash and cash equivalents                                                         -         -            -     1 720       1 720   
                                                                            471 182   672 000      246 873     1 720   1 391 775   


The amounts provided to EXCO with respect to total liabilities are measured in a manner consistent with that in the statement of
financial position. These liabilities are allocated based on the operations of the segment.

31 August 2018 (unaudited)                                                  Mixed use    Office   Industrial   General     Total   
                                                                              (R'000)   (R'000)      (R'000)   (R'000)   (R'000)   
Bank borrowings                                                                     -         -            -   454 000   454 000   
Derivative financial instruments                                                    -         -            -     1 634     1 634   
Trade and other payables                                                        3 819     8 629            -    17 547    29 995   
                                                                                3 819     8 629            -   473 181   485 629   
31 August 2017 (unaudited)                                                  Mixed use    Office   Industrial   General     Total   
                                                                              (R'000)   (R'000)      (R'000)   (R'000)   (R'000)   
Bank borrowings                                                                     -         -            -   500 000   500 000   
Derivative financial instruments                                                    -         -            -    12 723    12 723   
Trade and other payables                                                        4 299    16 265          331     1 788    22 684   
                                                                                4 299    16 265          331   514 511   535 407   
28 February 2018 (audited)                                                  Mixed use    Office   Industrial   General     Total   
                                                                              (R'000)   (R'000)      (R'000)   (R'000)   (R'000)   
Bank borrowings                                                                     -         -            -   453 400   453 400   
Derivative financial instruments                                                    -         -            -    11 050    11 050   
Trade and other payables                                                        3 398    19 206           19       774    23 397   
                                                                                3 398    19 206           19   465 224   487 847   

Distributable income                                                                Unaudited        Unaudited           Audited   
                                                                               6 months ended   6 months ended   12 months ended   
                                                                                    31 August        31 August       28 February   
                                                                                         2018             2017              2018   
                                                                                      (R'000)          (R'000)           (R'000)   
Headline earnings                                       (refer note 4)                 41 098           24 518            54 403   
Adjusted for:                                                                                                                      
Change in fair value of investment property as a                                      (8 057)          (8 902)          (12 226)   
result of amortisation of straight-line lease asset and                                                                            
tax thereof                                                                                                                        
Change in fair value of investment property as a                                        1 323            1 323             2 647   
result of amortisation of lease incentive and tax                                                                                  
thereof                                                                                                                            
Fair value adjustment of financial derivative                                         (9 416)            9 645             7 972   
instruments and the tax thereof                                                                                                    
Deferred tax and other non-cash movements                                                   -               66                 -   
                                                                                       24 949           26 650            52 796   
Actual number of ordinary shares in issue ('000)                                      100 000          100 000           100 000   
Reconciliation to dividend per share:                                                                                              
Distributable income per share (cents per share)                                        24,95            26,65             52,80   
-  Interim dividend per share                                                           24,95            26,65             26,65   
-  Final dividend per share                                                               n/a              n/a             26,15   


3. Investment properties
For the six months under review the property value includes movement consisting of the increase in straight lining of the lease
assets and the decrease in lease incentives, as well as additions and depreciation relating to furniture and fittings.

                                          Unaudited                                    Audited               
                                     31 August 2018                           28 February 2018               
                                            (R'000)                                    (R'000)               
                             Cost/      Accumulated    Carrying       Cost/        Accumulated    Carrying   
                         Valuation     depreciation       value   Valuation       depreciation       value   
Investment property      1 259 518                -   1 259 518   1 259 518                  -   1 259 518   
Furniture and fittings       3 947          (1 845)       2 102       3 911            (1 663)       2 248   
Total                    1 263 465          (1 845)   1 261 620   1 263 429            (1 663)   1 261 766   


Reconciliation of investment properties - 31 August 2018

                         Opening balance   Additions    Fair value   Depreciation     Closing   
                                                       adjustments                    balance   
Investment property            1 259 518           -             -              -   1 259 518   
Furniture and fittings             2 249          36             -          (182)       2 102   
Total                          1 261 766          36             -          (182)   1 261 620   


Reconciliation of investment properties - 28 February 2018

                         Opening balance   Additions    Fair value   Depreciation     Closing   
                                                       adjustments                    balance   
Investment property            1 231 629       2 505        25 383              -   1 259 518   
Furniture and fittings             2 617          72             -          (440)       2 248   
Total                          1 234 246       2 578        25 383          (440)   1 261 766   


A register containing the information required by Regulation 25(3) of the Companies Regulations, 2011 is available for inspection at
the registered office of the Company.

                                                                                      31 August   28 February   
                                                                                           2018          2018   
                                                                                        (R'000)       (R'000)   
JSE Building                                                                                                    
-Purchase price                                                                          18 070        18 070   
-Fair value adjustment                                                                  556 081       556 081   
-Straight-line of lease asset                                                            82 072        77 999   
-Lease-incentive                                                                         18 526        19 850   
                                                                                        674 750       672 000   
24 Central                                                                                                      
Portion 20 of Erf 7 Sandton Township, registration division IR, Province of Gauteng                             
-Purchase price                                                                         238 000       238 000   
-Fair value adjustment                                                                  221 274       221 274   
-Straight-line of lease asset                                                             2 039           252   
-Net capitalised expenditure                                                              5 327         5 474   
                                                                                        466 640       465 000   
Linbro Park                                                                                                     
Portion 3 of Erf 9 Frankenwald Ext3 Johannesburg, South Africa                                                  
-Purchase price                                                                         127 858       127 858   
-Fair value adjustment                                                                    4 562         4 562   
-Straight-line of lease asset                                                            19 525        18 482   
-Net capitalised expenditure                                                                698           698   
                                                                                        152 643       151 600   
Crown Mines                                                                                                     
Erven 1 and 2 Crown City Extension 1                                                                            
-Purchase price                                                                          85 044        85 044   
-Fair value adjustment                                                                    4 705         4 705   
-Straight-line of lease asset                                                             4 405         3 251   
                                                                                         94 155        93 000   


                                                                                      31 August   28 February   
                                                                                           2018          2018   
                                                                                        (R'000)       (R'000)   
Fair value of investment property for accounting purposes                                                       
Opening fair value of property assets                                                 1 381 600     1 344 500   
Gross fair value adjustment on investment property                                            -        25 383   
Additions to furniture and fittings                                                          36         2 578   
Depreciation                                                                              (182)         (440)   
Straight-line lease asset and lease incentive movement                                    6 733         9 579   
Property valuation                                                                    1 388 187     1 381 600   
Less: straight-line lease income adjustment                                           (108 041)      (99 984)   
Less: lease incentive receivable                                                       (18 526)      (19 850)   
Closing carrying value of property assets                                             1 261 620     1 261 766   


Securities
Mortgage bonds at a nominal value of R500 000 000 (February 2018: R500 000 000) have been registered over investment
properties with a fair value of R1 261 620 048 (February 2018: R1 261 766 278) as security for interest bearing liabilities.

Details of valuation
The properties were last valued on 28 February 2018 using the discounted cash flow of future income streams method. The
valuations of the properties were performed by a registered valuer, Peter Parfitt of Quadrant Properties Proprietary Limited, who is
a registered valuer in terms of section 19 of the Property Valuers Professional Act, No 47 of 2000.

Refer to the annual financial statements as at 28 February 2018 for the details relating to the year-end valuation.

4.   Earnings per share                                                                                   
                                                           Unaudited        Unaudited           Audited   
                                                      6 months ended   6 months ended   12 months ended   
                                                           31 August        31 August       28 February   
Basic earnings per share                                        2018             2017              2018   
Profit attributable to shareholders (R'000)                   41 098           24 518            79 786   
Weighted average number of ordinary shares in issue          100 000          100 000           100 000   
('000)                                                                                                    
Basic earnings per share (cents per share)                     41,10            24,52             79,79   
Diluted earnings per share                                                                                
There are no dilutive instruments in issue                                                       79 786   
Profit attributable to shareholders (R'000)                   41 098           24 518                     
Weighted average number of ordinary shares in issue          100 000          100 000           100 000   
('000)                                                                                                    
Basic diluted earnings per share (cents per share)             41,10            24,52             79,79   
Headline earnings per share                                                                               
Profit attributable to shareholders (R'000)                   41 098           24 518            79 786   
Adjusted for:                                                                                             
Change in fair value of investment property and tax                -                -          (25 383)   
thereof (R'000)                                                                                           
                                                              41 098           24 518            54 403   
Weighted average number of ordinary shares in issue          100 000          100 000           100 000   
('000)                                                                                                    
Headline earnings per share (cents per share)                  41,10            24,52             54,40   


5. Payment of interim dividend
The board has approved and notice is hereby given of the interim gross dividend of 24.94859 cents per share for the six months
ended 31 August 2018.

The dividend is payable to Newpark's shareholders in accordance with the timetable set out below:           2018
Last date to trade cum dividend:                                                                            Tuesday, 30 October
Shares trade ex dividend:                                                                                   Wednesday, 31 October
Record date:                                                                                                Friday, 2 November
Payment date:                                                                                               Monday, 5 November

Share certificates may not be dematerialised or rematerialised between Wednesday, 31 October 2018 and Friday, 2 November
2018, both days inclusive.

The dividend will be transferred to dematerialised shareholders' CSDP accounts/broker accounts on Monday, 5 November 2018.
Certificated shareholders' dividend payments will be paid to certificated shareholders' bank accounts on or about Monday,
5 November 2018.

In accordance with Newpark's status as a REIT, shareholders are advised that the 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"). The dividend will be deemed
to be a dividend for South African tax purposes, in terms of section 25BB of the Income Tax Act.

The dividend received by or accrued to South African tax residents must be included in the gross income of such shareholders and
will not be exempt from income tax (in terms of the exclusion to the general dividend exemption, contained in paragraph (aa) of
section 10(1)(k)(i) of the Income Tax Act) because it is a dividend distributed by a REIT. This dividend is, however, exempt from
dividend withholding tax in the hands of South African tax resident shareholders, provided that the South African resident
shareholders submitted the following forms to their Central Securities Depository Participant ("CSDP") or broker, as the case may
be, in respect of uncertificated shares, or the company, in respect of certificated shares:
a)     a declaration that the dividend is exempt from dividends tax; and
b)     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 dividend, if such documents have not already been submitted.

Dividends received by non-resident shareholders will not be taxable as income and instead will be treated as an ordinary dividend
which is exempt from income tax in terms of the general dividend exemption in section 10(1)(k)(i) of the Income Tax Act. Any
dividends received by a non-resident from a REIT will be subject to dividend withholding tax at 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 shareholders. Assuming dividend withholding tax will be withheld at a rate of 20%, the net dividend amount due to non-
resident shareholders is 19.95887 cents per share. A reduced dividend withholding rate in terms of the applicable DTA, may only be
relied upon if the non-resident shareholder, has submitted 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)     a declaration that the dividend is subject to a reduced rate as a result of the application of a DTA; and
b)     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 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 dividend if such documents have not already been submitted, if applicable.

Shares in issue at the date of declaration of dividend: 100,000,001
Newpark's income tax reference number: 9114003149.

6.   Events after the reporting period                                                                                                     
The directors are not aware of any material event which occurred after the reporting date and up to the date of this report.               
7.   Related parties                                                                                                                       
                                                                                         31 August    28 February                                                                                                                    
                                                                                              2018           2018                                                                                                                                
                                                                                           (R'000)        (R'000)                                                                                                                          
Professional services - Capensis Real Estate (Pty) Ltd (SP Fifield is a director)              598          1 129                                            
Professional services - WellCapital (Pty) Ltd (JAI Ferreira is a director)                     237            448                                                     

By order of the board.                                                                                                                     

Simon Fifield   Dries Ferreira                                                                                                             
Chief Executive Officer   Financial Director                                                                                               

Johannesburg                                                                                                                               
10 October 2018                                                                                                                             

DIRECTORS                                                                                                                                  
G D Harlow (Chairman) **, S P Fifield (Chief Executive Officer), J A I Ferreira (Financial Director), B D van Wyk *, D T Hirschowitz*, 
K M Ellerine*, H C Turner **, D I Sevel ** S Shaw-Taylor**                                                                                   
* Non-executive director                     ** Independent non-executive director  
                                                       
There were no changes to the board of directors during the period under review.    
                                                        
REGISTERED OFFICE                                      WEBSITE                                                                                                                
51 West Street, Houghton, Gauteng, 2198                www.newpark.co.za                                                                                
P O Box 3178, Houghton, Gauteng, 2041                                                                                                      

COMPANY SECRETARY                                      TRANSFER SECRETARY                                                                                                     
CIS Company Secretaries Proprietary Limited            Computershare Investor Services Proprietary Limited                                                                                    

DESIGNATED ADVISOR                                                                                                                         
Java Capital                                                                                                                               





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