Wrap Text
Summarised audited consolidated financial statements for the 12 months ended 28 February 2019
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 the JSE)
("Newpark" or "the Company" or "the Group")
SUMMARISED AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE 12
MONTHS ENDED 28 FEBRUARY 2019
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
mixed use property known as 24 Central, which has 15,188 m2 of GLA.
A further property is situated in Linbro Business Park, which has
12,387 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 2019 was R1,41 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.
COMMENTARY ON RESULTS
The Company's board of directors ("Board") is pleased to present
the group's results for the year under review, which are in line
with the guidance provided. The Group's results for the 12 month
period under review, came under increased pressure impacted by
further vacancies in the Group's mixed use asset in Sandton
resulting in the Group's vacancies increasing during the period to
15,7% (FY2018: 11,2%). The vacancies, which started to increase
during the prior year continued further as a result of a large
tenant electing 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 R127,9
million (FY2018: R136,4 million), a decrease of 6,2%. Besides the
vacancies in the mixed use segment, the tenant profile has
remained largely the same and no acquisitions or disposals were
made during this period.
DISTRIBUTABLE EARNINGS
Distributable earnings for the 12 months declined by 18,0% to
43,30 cents per share ("cps") (FY2018: 52,80 cps). Accordingly,
the Board has declared a final dividend of 18,34951 cps (interim
dividend for H1 FY2019 24,94859 cps).
Year-on-year Newpark has increased its net asset value per share
to R9,25 from R9,04, an increase of 2%.
SECTORAL SPLIT
Based on: Gross
GLA Rentals
Mixed use (retail and office) 26,6,% 31,7%
Office 31,9% 46,2%
Industrial 41,5% 22,1%
100,0% 100,0%
LEASE EXPIRY PROFILE & VACANCIES
Based on: Gross
GLA Rentals
Vacant 15,7% 16,8%
Feb 2020 5,9% 6,8%
Feb 2021 0,2% 0,3%
Feb 2022 3,8% 5,9%
Feb 2023 0,2% 0,4%
Feb 2024 0,3% 0,5%
> Feb 2024 73,9% 69,3%
100,0% 100,0%
FUNDING
Amount Margin
Facilities R'000
Expiry May 2020 450 000 3-month
Jibar+1,95%
Expiry May 2020 50 000 Prime-1,28%
TOTAL 500 000
Hedges of
Amount 3-month Jibar
R'000 base-rate
Hedge instruments
Hedge 3: rate swap - expires 2020/4/10
(rolls into Hedge 5) 230 000 7,70%
Hedge 4: rate swap - expires 2022/5/31 135 000 8,085%
Hedge 5: rate swap - to start 2020/4/10 /
expires 2022/5/31 230 000 7,993%
Two separate RMB facilities were restructured on 24 May 2017 into
a 3-year Term Loan Facility of R450 000 000 maturing in May 2020
and a Revolving Credit Facility of R50 000 000 maturing in May
2020. The new consolidated facilities are secured mainly by
mortgage bonds together with a cession of the leases over the four
properties. The term loan remains appropriately hedged, as
outlined above.
INTEREST RATE AND PERCENTAGE OF DEBT HEDGED
The all-in weighted average cost of funding is 9,573% (28 February
2018: 9,478%) and the average hedge-term is 3,25 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
28 February 28 February
2019 2018
Shares in issue 100,000,001 100,000,001
Net asset value per share R9,25 R9,04
Loan-to-value ratio 31,9% 32,7%
Gross property operating expense ratio 19,4% 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
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 filling the 24 Central vacancy, introducing an
appropriately empowered partner into Newpark's shareholder base
and searching for acquisitions that offer value.
The Board is 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.
Notwithstanding, over the full year Newpark has budgeted to
deliver growth of 6,0% to 8,0% on its 2019 distributions of 43,30
cps and, more importantly, to be well positioned for above average
growth thereafter.
The forecast is based on the assumption that a stable macro-
economic environment will prevail, no material tenant default will
occur, operating cost increases will not exceed budget. This
forecast has not been audited or reviewed by the Company's
auditors.
SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Audited
28 February 28 February
2019 2018
(R'000) (R'000)
Assets
Non-current assets
Investment properties note 4 1 278 334 1 261 766
Straight-line lease asset 111 463 99 984
Lease incentive 14 556 17 203
1 404 353 1 378 953
Current Assets
Trade and other receivables 3 960 6 182
Lease incentive 2 647 2 647
Receiver of revenue - 2 273
Cash and cash equivalents 9 141 1 720
Total Current Assets 15 748 12 822
Total Assets 1 420 101 1 391 775
Equity and Liabilities
Equity
Share capital 619 918 619 918
Reserves 180 412 180 412
Retained income 124 526 103 594
924 856 903 928
Liabilities
Non-Current Liabilities
Bank borrowings 458 500 453 400
Derivative financial instruments 8 063 11 050
466 563 464 450
Current liabilities
Trade and other payables 28 682 23 397
Total Current Liabilities 28 682 23 397
Total Liabilities 495 245 487 847
Total Equity and Liabilities 1 420 101 1 391 775
SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
12 months 12 months
ended ended
28 February 28 February
2019 2018
(R'000) (R'000)
Revenue 127 901 136 450
Property operating expenses (26 612) (26 571)
Administrative expenses (5 800) (6 177)
Net gain from fair value adjustment
on investment property 16 903 25 383
Net change in fair value of financial
instruments at fair value through
profit or loss 2 987 (7 972)
Operating profit 115 379 121 113
Finance income 1 235 1 884
Finance costs (44 592) (45 639)
Profit before taxation 72 022 77 358
Taxation - 2 428
Profit for the period 72 022 79 786
Other comprehensive income - -
Total comprehensive income 72 022 79 786
Earnings per share information
(cents per share)
Basic earnings per share note 5 72,02 79,79
Diluted earnings per share note 5 72,02 79,79
SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Capital
re-
Share Total organi-
Share issue share sation Retained Total
capital costs capital reserve income equity
(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
Profit for
the period - - - - 79 786 79 786
Dividend
distributions
to owners of
the 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
Audited
Profit for
the period - - - - 72 022 72 022
Dividend
distributions
to owners of
the company
recognised
directly in
equity - - - - (51 094) (51 094)
Balance at
28 February
2019 625 000 (5 082) 619 918 180 412 124 526 924 856
SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited
12 months 12 months
ended ended
28 February 28 February
2019 2018
(R'000) (R'000)
Cash flows from operating activities
Cash generated from operations 94 535 96 000
Finance income 1 235 1 884
Finance costs (44 592) (45 639)
Tax received 2 273 -
Net cash generated from operating
activities 53 451 52 245
Cash flows from investing activities
Purchase of furniture and fittings (36) (2 578)
Net cash utilised by investing
activities (36) (2 578)
Cash flows from financing activities
Dividends paid (51 094) (51 212)
Bank borrowings advanced 5 100 -
Bank borrowings repaid - (47 481)
Net cash utilised by financing
activities (45 994) (98 693)
Total cash and cash equivalent
movement for the period 7 421 (49 026)
Cash and cash equivalents
at beginning of period 1 720 50 746
Total cash and cash equivalents
at end of period 9 141 1 720
Additional info on cash flow:
Cash generated from operations
before working capital changes 87 030 94 562
Working capital changes 7 505 1 438
Cash generated from operations 94 535 96 000
SIGNIFICANT FINANCIAL STATEMENT NOTES
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The summarised audited consolidated financial statements are
prepared in accordance with the requirements of the JSE Listings
Requirements and the requirements of the Companies Act 71 of 2008
of South Africa applicable to summarised financial statements. The
JSE Listings Requirements require 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, except for the adoption of the new
standards.
The summarised audited consolidated financial statements were
compiled by Dries Ferreira CA(SA), the financial director.
The directors are not aware of any matters or circumstances
arising subsequent to the year-end that require any additional
disclosure or adjustment to the financial statements.
The summarised audited consolidated financial statements for the
twelve months ended 28 February 2019 have been extracted from
audited information but are not themselves audited. The directors
of Newpark take full responsibility for the preparation of this
report and that the financial information has been correctly
extracted from the underlying audited consolidated financial
statements. The annual financial statements were audited by BDO
South Africa Inc. and an unmodified audit opinion has been issued
on the audited consolidated financial statements for the financial
year ended 28 February 2019. The auditor's report does not
necessarily report on all of the information contained in this
announcement. Shareholders are therefore advised that in order to
obtain a full understanding of the nature of the auditor's
engagement, they should obtain a copy of that report together with
the accompanying audited consolidated financial statements, both
of which are available for inspection at Newpark's registered
office.
2. NEW STANDARDS AND INTERPRETATIONS ADOPTED IN THE CURRENT
FINANCIAL PERIOD
IFRS 15 - Revenue from contracts with customers
The FASB and IASB issued their long awaited converged standard on
revenue recognition on 29 May 2014. It is a single, comprehensive
revenue recognition model for all contracts with customers to
achieve greater consistency in the recognition and presentation of
revenue. Revenue is recognised based on the satisfaction of
performance obligations, which occurs when control of good or
service transfers to a customer.
The effective date of the standard was for years beginning on or
after 1 January 2018.
The group has adopted the interpretation for the first time in
the 2019 annual financial statements. The amendment did not have a
material impact on the group's consolidated financial statements.
Amendment to IFRS 15 - Revenue from contracts with customers
The IASB has amended IFRS 15 to clarify the guidance, but there
were no major changes to the standard itself. The amendments
comprise clarifications of the guidance on identifying performance
obligations, accounting for licences of intellectual property and
the principal versus agent assessment (gross versus net revenue
presentation).
The effective date of the standard is for years beginning on or
after 1 January 2018.
The Group has adopted the interpretation for the first time in the
2019 annual financial statements. The amendment did not have a
material impact on the Group's consolidated financial statements.
IFRS 9 Financial Instruments
This standard replaces the guidance in IAS 39. It includes
requirements on the classification and measurement of financial
assets and liabilities; it also includes an expected credit losses
model that replaces the current incurred loss impairment model.
The IASB has amended IFRS 9 to align hedge accounting more closely
with an entity's risk management. The revised standard also
establishes a more principles-based approach to hedge accounting
and addresses inconsistencies and weaknesses in the current model
in IAS 39.
The effective date of the standard is for years beginning on or
after 1 January 2018.
The Group has adopted the standard for the first time in the 2019
annual financial statements.
The standard impacted the impairment of financial assets of the
group as follows:
In relation to the impairment of financial assets, IFRS 9 requires
an expected credit loss model as opposed to an incurred credit
loss model under IAS 39. The expected credit loss model requires
the Group to account for expected credit losses and changes in
those expected credit losses at each reporting date to reflect
changes in credit risk since initial recognition of the financial
assets. In other words, it is no longer necessary for a credit
event to have occurred before credit losses are recognised.
Specifically, IFRS 9 requires the company to recognise a loss
allowance for expected credit losses on debt investments
subsequently measured at amortised cost to which the impairment
requirements of IFRS 9 apply. In particular, IFRS 9 requires the
Group to measure the loss allowance for a financial instrument at
an amount equal to the lifetime expected credit losses if the
credit risk on that financial instrument has increased
significantly since initial recognition, or if the financial
instrument is a purchased or originated credit-impaired financial
asset. On the other hand, if the credit risk on a financial
instrument has not increased significantly since initial
recognition (except for a purchased or originated credit-impaired
financial asset), the group is required to measure the loss
allowance for that financial instrument at an amount equal to 12
months expected credit losses. IFRS 9 also provides a simplified
approach for measuring the loss allowance at an amount equal to
lifetime expected credit losses for trade receivables and contract
assets in certain circumstances. The amendment did not have a
material impact on the Group's consolidated financial statements.
3. SEGMENTAL ANALYSIS
Segmental information
At 28 February 2019, 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.
Mixed Indus-
use Office trial General Total
(R'000) (R'000) (R'000) (R'000) (R'000)
28 February 2019
(audited)
Revenue 40 531 56 576 30 794 - 127 901
Property
operating
expenses (23 555) - (3 057) - (26 612)
Administrative
expenses - - - (5 800) (5 800)
Fair value
adjustment (44 466) 46 600 14 769 2 987 19 890
Operating
profit (27 490) 103 176 42 506 2 813 115 379
Mixed Indus-
use Office trial General Total
(R'000) (R'000) (R'000) (R'000) (R'000)
28 February 2018
(audited)
Revenue 49 108 56 568 30 773 - 136 450
Property
operating
expenses (23 286) - (3 258) - (26 571)
Administrative
expenses - - - (6 177) (6 177)
Fair value
adjustment (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.
Mixed Indus-
use Office trial General Total
(R'000) (R'000) (R'000) (R'000) (R'000)
28 February 2019
(audited)
Investment
property 419 946 620 752 237 636 - 1 278 334
Straight-line
lease asset 2 054 84 045 25 364 - 111 463
Lease incentive - 17 203 - - 17 203
Trade & other
receivables 3 960 - - - 3 960
Cash and cash
equivalents - - - 9 141 9 141
425 960 722 000 263 000 9 141 1 420 101
Mixed Indus-
use Office trial General Total
(R'000) (R'000) (R'000) (R'000) (R'000)
28 February 2018
(audited)
Investment
property 464 748 574 151 222 867 - 1 261 766
Straight-line
lease 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.
Mixed Indus-
use Office trial General Total
(R'000) (R'000) (R'000) (R'000) (R'000)
28 February 2019
(audited)
Bank borrowings - - - 458 500 458 500
Derivative
financial
instruments - - - 8 063 8 063
Trade and other
payables 2 416 14 727 485 11 053 28 682
2 416 14 727 485 477 616 495 245
Mixed Indus-
use Office trial General Total
(R'000) (R'000) (R'000) (R'000) (R'000)
28 February 2018
(audited)
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
Audited Audited
12 months 12 months
ended ended
28 February 28 February
2019 2018
(R'000) (R'000)
Headline earnings (refer note 5) 55 119 54 403
Adjusted for:
Change in fair value of investment
property as a result of amortisation
of straight-line lease asset and tax
thereof (11 479) (12 226)
Change in fair value of investment
property as a result of amortisation of
lease incentive and tax thereof 2 647 2 647
Fair value adjustment of financial
derivative instruments and the tax
thereof (2 987) 7 972
43 300 52 796
Actual number of ordinary shares in 100 000 100 000
issue ('000)
Reconciliation to dividend per share:
Distributable income per share (cents
per share) 43,30 52,80
- Interim dividend per share 24,95 26,65
- Final dividend per share 18,35 26,15
4. INVESTMENT PROPERTIES
For the year under review the property value includes movement
consisting of the increase in straight lining of the lease assets
and the decrease in lease incentives, fair value adjustments, as
well as additions and depreciation relating to furniture and
fittings.
Cost/ Accumulated Carrying
Valuation depreciation value
(R'000) (R'000) (R'000)
Audited 28 February 2019
Investment property 1 276 421 - 1 276 421
Furniture and fittings 3 947 (2 034) 1 913
Total 1 280 368 (2 034) 1 278 334
Audited 28 February 2018
Investment property 1 259 518 - 1 259 518
Furniture and fittings 3 911 (1 663) 2 248
Total 1 263 429 (1 663) 1 261 766
Reconciliation of investment properties - 28 February 2019
Fair
value
Opening Addi- adjust- Depre- Closing
balance tions ments ciation balance
(R'000) (R'000) (R'000) (R'000) (R'000)
Investment
property 1 259 518 - 16 903 - 1 276 421
Furniture
and fittings 2 249 36 - (372) 1 913
Total 1 261 766 36 16 903 (372) 1 278 334
Reconciliation of investment properties - 28 February 2018
Fair
value
Opening Addi- adjust- Depre- Closing
balance tions ments ciation balance
(R'000) (R'000) (R'000) (R'000) (R'000)
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.
28 February 28 February
2019 2018
(R'000) (R'000)
JSE Building
Portion 25 of Erf 7 Sandown Johannesburg,
South Africa
- Purchase price 18 070 18 070
- Fair value adjustment 602 682 556 081
- Straight-line of lease asset 84 045 77 999
- Lease-incentive 17 203 19 850
722 000 672 000
24 Central
Portion 20 of Erf 7 Sandton Township,
registration division IR, Province of
Gauteng
- Purchase price 238 000 238 000
- Fair value adjustment 176 808 221 274
- Straight-line of lease asset 2 054 252
- Net capitalised expenditure 5 138 5 474
422 000 465 000
Linbro Park
Portion 3 of Erf 9 Frankenwald Ext3
Johannesburg, South Africa
- Purchase price 127 858 127 858
- Fair value adjustment 12 350 4 562
- Straight-line of lease asset 20 094 18 482
- Net capitalised expenditure 698 698
161 000 151 600
Crown Mines
Erven 1 and 2 Crown City Extension 1
- Purchase price 85 044 85 044
- Fair value adjustment 11 686 4 705
- Straight-line of lease asset 5 270 3 251
102 000 93 000
28 February 28 February
2019 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 16 903 25 383
Additions to furniture and fittings 36 2 578
Depreciation (372) (440)
Straight-line lease asset and lease
incentive movement 8 833 9 579
Property valuation 1 407 000 1 381 600
Less: straight-line lease income
adjustment (111 463) (99 984)
Less: lease incentive receivable (17 203) (19 850)
Closing carrying value of property
assets 1 278 334 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 278 333 718 (February 2018: R1 261 766 278) as
security for interest bearing liabilities.
Details of valuation
The properties were last valued on 28 February 2019 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.
At 28 February 2019, the key assumptions and unobservable inputs
used by the Company in determining fair value were as follows:
These assumptions are based on current market conditions.
Mixed
use Office Industrial
Discount rate 14,75% 14,25% 15,00%
Exit capitalisation rate 9,24% 8,75% 10,00%
Capitalised rate 8,75% 8,25% 9,00%
Measurement of fair value
Valuation techniques:
Discounted cash flows: The valuation model considers the present
value of net cash flows to be generated from the property, taking
into account expected rental and expense growth rates, vacant
periods, lease incentive costs such as rent-free periods and other
costs not recovered from tenants. The expected net cash flows are
discounted using a discount rate. The discount rate applied is
derived using an appropriate capitalisation rate and adding a
growth rate based on market-related rentals, testing this for
reasonableness by comparing the resultant Rand rate per m2 against
comparative sales of similar properties in similar locations.
Amongst other factors, the capitalisation rate estimation
considers the quality of the property, its location, the tenants'
credit quality and their lease terms.
Inter-relationship between key unobservable inputs and fair value
measurements:
The estimated fair value would increase/ (decrease) if:
- expected market rental growth was higher/ (lower);
- expected expense growth was lower/ (higher);
- vacant periods were shorter/ (longer);
- the occupancy rate was higher/ (lower);
- rent-free periods were shorter/ (longer);
- discount rate was lower/ (higher); and
- reversionary capitalisation rate was lower/ (higher).
5. EARNINGS PER SHARE
Audited Audited
12 months 12 months
ended ended
28 February 28 February
2019 2018
Basic earnings per share
Profit attributable to shareholders
(R'000) 72 022 79 786
Weighted average number of ordinary
shares in issue ('000) 100 000 100 000
Basic earnings per share
(cents per share) 72,02 79,79
Diluted earnings per share
There are no dilutive instruments
in issue
Profit attributable to shareholders
(R'000) 72 022 79 786
Weighted average number of ordinary
shares in issue ('000) 100 000 100 000
Basic diluted earnings per share
(cents per share) 72,02 79,79
Headline earnings per share
Profit attributable to shareholders
(R'000) 72 022 79 786
Adjusted for:
Change in fair value of investment
property and tax thereof (R'000) (16 903) (25 383)
55 119 54 403
Weighted average number of ordinary
shares in issue ('000) 100 000 100 000
Headline earnings per share
(cents per share) 55,12 54,40
6. PAYMENT OF FINAL DIVIDEND
The Board has approved and notice is hereby given of the final
gross dividend of 18,34951 cents per share for the year ended 28
February 2019.
The dividend is payable to Newpark's shareholders in accordance
with the timetable set out below: 2019
Last date to trade cum dividend: Tuesday, 11 June
Shares trade ex dividend: Wednesday, 12 June
Record date: Friday, 14 June
Payment date: Tuesday, 18 June
Share certificates may not be dematerialised or rematerialised
between Wednesday, 12 June 2019 and Friday, 14 June 2019, both
days inclusive.
The dividend will be transferred to dematerialised shareholders'
CSDP accounts/broker accounts on Tuesday, 18 June 2019.
Certificated shareholders' dividend payments will be paid to
certificated shareholders' bank accounts on or about Tuesday,
18 June 2019.
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 14,67961 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.
7. 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.
8. RELATED PARTIES
28 February 28 February
2019 2018
(R'000) (R'000)
Professional services - Capensis
Real Estate (Pty) Ltd
(SP Fifield is a director) 1 197 1 129
Professional services - WellCapital
(Pty) Ltd 475 448
(JAI Ferreira is a director)
By order of the board.
Simon Fifield Dries Ferreira
Chief Executive Officer Financial Director
Johannesburg
22 May 2019
DIRECTORS
G D Harlow (Chairperson) **, S P Fifield (Chief Executive
Officer), J A I Ferreira (Financial Director), B D van Wyk *, D T
Hirschowitz*, KM Ellerine*, H C Turner **, D I Sevel ** S Shaw-
Taylor**
* Non-executive director ** Independent non-executive director
There were no changes to the Board 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 Computershare Investor Services
Proprietary Limited Proprietary Limited
DESIGNATED ADVISOR
Java Capital
Date: 22/05/2019 11:59:00 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.