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CASTLEVIEW PROPERTY FUND LIMITED - Provisional summarised reviewed consolidated financial statements for the twelve months ended 28 February 2019

Release Date: 24/05/2019 15:00
Code(s): CVW     PDF:  
 
Wrap Text
Provisional summarised reviewed consolidated financial statements for the twelve months ended 
28 February 2019

CASTLEVIEW PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2017/290413/06)
JSE share code: CVW  ISIN: ZAE000251633
(Approved as a REIT by JSE)

Provisional summarised reviewed consolidated financial statements for the twelve months ended 28 February 2019

DIRECTORS' COMMENTARY

NATURE OF BUSINESS
Castleview is a property holding and investment company that is invested in a well-located small regional shopping centre in the Eastern Cape 
("Castleview" or the "Company").

PROPERTY PORTFOLIO
Castleview's property portfolio consists of one property, namely Pier 14 Shopping Centre in Govan Mbeki Road, Port Elizabeth, which is defined as a small
regional shopping centre with 30 381m2 of rentable space and is anchored by large national tenants such as Shoprite, Jet, Pep, Ackermans and Mr Price.

STRATEGY
Castleview intends to invest further in retail properties which are anchored by high quality national tenants on long term, escalating leases, where
opportunities to increase value to shareholders through sound asset management strategies are available and providing investors with exposure to consumers from
a cross-section of income categories. Castleview may also invest in listed property shares in the future.

COMMENTARY ON RESULTS, DISTRIBUTABLE EARNINGS AND NET ASSET VALUE
A dividend of 19.43 cents per share has been declared for the six months ended 28 February 2019, bringing the total distribution for the twelve months to 37.23 
(2018:16.72) cents per share. This is in line with expectations announced at the publication of the interim results ended 31 August 2018 of between 37.0 cents 
and 37.5 cents per share.

Castleview shareholders will therefore have received a total distribution per share for the period from listing to 28 February 2019 of 53.95 cents, which is in
line with expectations at the time of listing of 54.0 cents. Castleview's net asset value per share equated to R5.08 (2018: R5.12) at financial year-end.

Given the pressures on consumer spending in South Africa, conditions in the retail environment in South Africa are demanding.

The portfolio vacancies have risen from 5.4% of gross lettable area (GLA) at 31 August 2018 to 8.7% of GLA at 28 February 2019. This is as a result of the
closure and consolidation of certain retail stores in Pier 14, primarily the reduction in the premises occupied by Jet, which decreased from 1,876m2 to 1,118m2 
following Edcon's decision to reduce the rentable area at certain stores.

Notwithstanding this, total tenant turnover at Pier 14 rose by 1.6% in the financial year as a result of new leases concluded during the period, as well as 
growth in turnover from the centre's diversified tenant base. Adjusting for the pro-rata drop in turnover from Jet as result of their downsizing, tenant
turnover at the centre increased by 4.0%.

In April 2019 the Castleview board of directors approved the cancellation of the head lease over the office tower at Pier 14 with Gritprop Investment Holdings
(Pty) Ltd with effect from 30 April 2019. In return for the cancellation of the head lease, the company has negotiated the extension of the duration and extent
of the lease with the same tenant over storage premises in the retail component of the property, which included a take up of the premises vacated by Jet.

The vacancy created in the office tower will enable Castleview to convert the premises to 111 residential apartments. This project was approved by the Board in 
April 2019 and is estimated for completion by early 2020. The new residential tower is expected to increase the cash flow from Pier 14, diversify the income
stream, as well as bring increased foot traffic to the retail tenants, with the associated benefit to tenant turnover at the centre.


SUMMARY OF FINANCIAL INDICATORS
                                  28 February  28 February
                                         2019         2018

Shares in issue                    33 000 000   33 000 000
Distributable earnings per share  35.92 cents  11.60 cents
Dividend per share                37.23 cents  16.72 cents
Net asset value per share               R5.08        R5.12
Loan-to-value ratio*                    44.4%        43.8%
Property cost-to-income ratio           35.9%        26.2%

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


SECTORAL SPLIT, LEASE EXPIRY PROFILE AND VACANCIES

                                             February          February
                                                 2019              2018
                                       GLA      Gross     GLA     Gross
                                              rentals           rentals

Sectoral split
Based on:
Retail                                77.1%     81.0%   74.7%     81.0%
Office                                22.9%     19.0%   25.3%     19.0%
                                     100.0%    100.0%  100.0%    100.0%
Lease expiry profile (unreviewed)
Based on:
Vacant                                 8.7%      9.1%    4.9%      4.1%
Monthly
Feb 2019                               8.8%      9.2%   23.8%     28.3%
Feb 2020                              12.7%     15.1%   12.1%     15.7%
Feb 2021                              29.4%     24.8%   29.8%     25.8%
Feb 2022                              15.8%     15.0%    9.2%      6.0%
> Feb 2022                            24.6%     26.8%   20.2%     20.1%
                                     100.0%    100.0%  100.0%    100.0%


LOAN FUNDING

Facility                                                                Amount             
                                                    Approved     drawn down at
                                                        Loan     February 2019
                                                         R'm               R'm       Interest rate 

ABSA Bank                                              165.0              110.3     Floating prime
                                                                                    less 1% (9.25%)
                                            (Feb 2018: 165.0)  (Feb 2018: 164.1)     (Feb 2018: 9%)

Urban Retail Property Investments 1 (URP1)              28.4               33.2*    Floating prime
                                                                                 less 0.25% (10.0%)
                                             (Feb 2018: 28.4)   (Feb 2018: 30.1)  (Feb 2018: 9.75%)

* Interest on this facility is capitalised to the loan for the duration of the loan and is repayable annually in arrears on 31 December each year. 
The capitalised interest due and payable on 31 December 2018 was mutually agreed by both parties to be deferred and repaid at the end of the loan term.

The ABSA facility is secured by a first mortgage bond and security cessions over the fixed property comprising Pier 14 Shopping Centre.

OUTLOOK

Castleview will continue to focus on a disciplined approach to the management of its existing asset and the growth of the portfolio in order to return growth
in capital and income to shareholders.

The cancellation of the existing office tower head lease at Pier 14 and conversion of this space to residential apartments will result in the loss of income
from the office tower as construction of the apartments takes place. This is expected to result in net income from the portfolio and distributions per share
declining in the coming financial year.

This will be compensated for by longer term sustainability and diversity of rental income from Pier 14. On completion of this project and assuming a market 
related occupancy level on completion, net income from the portfolio and dividends per share are expected to recover and grow thereafter.

Any forecast made in this announcement has not been audited or reviewed by Castleview's auditors.


SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 28 February 2019


                                                            Notes     Reviewed       Audited
                                                                   28 February   28 February
                                                                          2019          2018
                                                                             R             R
 
ASSETS
Non-current assets
Property, plant and equipment                                         1 218 296       784 573
Investment property                                             3   309 400 474   308 690 842
Operating lease asset                                                 4 381 230     6 152 965
Deferred tax                                                                  -       429 433
                                                                    315 000 000   316 057 813
Current assets
Trade and other receivables                                           3 529 488     1 320 458
Cash and cash equivalents                                       4     3 675 738    56 281 732
Total current assets                                                  7 205 226    57 602 190
Total assets                                                        322 205 226   373 660 003
EQUITY AND LIABILITIES
Equity
Share capital                                                       165 000 000   165 000 000
Accumulated profit                                                    2 611 664     3 845 546
Non-controlling interest                                                182 658       186 660
                                                                    167 794 322   169 032 206
Liabilities
Non-current liabilities
Other financial liabilities                                     5   110 302 437   164 055 652
Loan from parent company                                             32 679 312    28 419 384
                                                                    142 981 749   192 475 036
Current liabilities
Trade and other payables                                              9 211 787     8 129 782
Loan from parent company                                                530 370     1 692 314
Current tax payable                                                   1 686 998     2 330 665
                                                                     11 429 155    12 152 761
Total liabilities                                                   154 410 904   204 627 797
Total equity and liabilities                                        322 205 226   373 660 003


SUMMARISED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
for the year ended 28 February 2019


                                                           Notes       Reviewed        Audited
                                                                  TWELVE months   EIGHT months
                                                                          ended          ended
                                                                    28 February    28 February
                                                                           2019           2018
                                                                              R              R

Revenue                                                              39 985 959     17 802 346
Other operating expenses                                            (15 796 994)   (10 089 950)
Operating profit                                                     24 188 965      7 712 396
Bargain purchase on acquisition of subsidiary                                 -      2 511 373
Investment income                                                       567 462      1 808 880
Finance costs                                                       (14 857 214)    (7 925 635)
Gain on fair value adjustment                                  3        709 632              -
Profit before taxation                                               10 608 845      4 107 014
Taxation                                                               (442 630)      (258 203)
Profit and total comprehensive income for the year/period            10 166 215      3 848 811
Profit and total comprehensive income attributable to:
Owners of the parent                                                 10 157 461      3 845 546
Non-controlling interest                                                  8 754          3 265
                                                                     10 166 215      3 848 811
Earnings per share information (cents per share)
Basic and diluted earnings per share                           6          30.78          12.97


SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 28 February 2019
                                                                                              Total                     
                                                                                    attributable to                 
                                                                                             equity         Non-
                                                              Share    Accumulated       holders of   controling         Total
                                                            capital         profit        the group     interest        equity
                                                                  R              R                R            R             R
Reviewed
Balance at 1 July 2017                                             -             -                -            -             -
Issue of shares                                          165 000 000             -      165 000 000            -   165 000 000
Business combinations                                              -             -                -      183 395       183 395
Profit and total comprehensive  income for the period                    3 845 546        3 845 546        3 265     3 848 811
Balance at 1 March 2018                                  165 000 000     3 845 546      168 845 546      186 660   169 032 206
Profit and total comprehensive  income for the year                -    10 157 461       10 157 461        8 754    10 166 215
Dividends                                                              (11 391 343)     (11 391 343)     (12 756)  (11 404 099)
Balance at 28 February 2019                              165 000 000     2 611 664      167 611 664      182 658   167 794 322


CONSOLIDATED STATEMENT  OF CASH FLOWS
for the year ended 28 February 2019

                                                                        Reviewed        Audited
                                                                       12 months       8 months
                                                                           ended          ended
                                                                     28 February    28 February
                                                                            2019           2018
                                                                               R              R
Cash flows from operating activities
Cash generated from operations                                         24 344 538     8 230 661
Interest income                                                           567 462     1 808 880
Finance costs                                                         (10 734 061)   (5 479 615)
Net cash from operating activities                                     14 177 939     4 559 926
Purchase of property, plant and equipment                                (626 963)            -
Business combinations                                                           -   (23 623 773)
Net cash from investing activities                                       (626 963)  (23 623 773)
Cash flows from financing activities
Proceeds on share issue                                                         -    40 000 000
Repayment of other financial liabilities                              (54 765 627)            -
Other financial liabilities advanced                                            -    35 345 579
Dividends paid                                                        (11 391 343)            -
Net cash from financing activities                                    (66 156 970)   75 345 579
Total cash movement for the year/period                               (52 605 994)   56 281 732
Total cash and cash equivalents at the beginning of the year/period    56 281 732             -
Total cash and cash equivalents at the end of the year/period           3 675 738    56 281 732


SIGNIFICANT FINANCIAL STATEMENT NOTES

1 BASIS OF PREPARATION AND ACCOUNTING POLICIES

The provisional summarised reviewed consolidated financial statements are prepared in accordance with the requirements of the JSE Listings Requirements for 
provisional reports and requirements of the Companies Act of South Africa. The Listings Requirements require provisional reports to be prepared in accordance
with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and 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 the
provisional summarised reviewed financial statements are in accordance with International Financial Reporting Standards ("IFRS") and are consistent with those 
applied in the preparation of the previous year's consolidated annual financial statements, except as described in note 1.2.

These results have been prepared under the historical cost convention, except for investment properties, which are measured at fair value. These provisional 
summarised reviewed consolidated financial statements for the year ended 28 February 2019 have not been audited by the company's independent external auditors.

1.1 Measurement of fair value - investment property
The property is valued using the discounted cash flow method by the directors and external valuers.

The investment property is valued every three years by an external independent registered valuer.

As at 28 February 2019, the property was valued internally by directors.

1.2 Changes in significant accounting policies
The changes in the accounting policies reflected below are also expected to be reflected in the group's consolidated financial statements as at and for the year
ending 28 February 2019.

The group adopted IFRS 15 Revenue from contracts with customers (see note 1.2.1) and IFRS 9 Financial Instruments (see note 1.2.2) from 1 March 2018.

1.2.1  Revenue from contracts with customers
IFRS 15 deals with revenue recognition and establishes principles for the reporting of useful information to users of financial statements about the nature,
amount timing and uncertainty of revenue cash flows arising from an entity's contracts with customers.

Revenue is recognised when a customer obtains control of the good or service and thus has the ability  to direct the use and obtain the benefits from the good
or service. This standard replaces IAS 18: Revenue and IAS 11: Construction Contracts and Related interpretations.

The group has implemented IFRS 15 and it did not have a material impact on the provision of services that fall under the scope of IFRS 15. Rental revenue from
investment property will continue to be recognised in profit or loss on a straight-line basis over the term of the lease in accordance with IAS17.

Revenue is derived from one income stream in one geographical location and therefore no disaggregation is disclosed.

1.2.2 Financial instruments
IFRS 9 replaces the provisions of IAS 39 that relate to the recognition, classification and measurement of financial assets and financial liabilities,
derecognition of financial instruments and impairment of financial assets.

The adoption of IFRS 9 had no impact on the opening balance of reserves and retained earnings at 1 March 2018.

The table and the accompanying notes that follow explain the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 for
each class of the group's financial assets, as at 1 March 2018.


                                                                              Original carrying                    New carrying  
                                                                            amount under IAS 39             amount under IFRS 9

                                                                         28 February 28 February       28 February  28 February
                                                                                2019        2018              2019         2018
                                                                                   R           R                 R            R
Financial assets   Original classification     New  classification     
                   under IAS 39                under IFRS 9 

Trade and other    Loans and receivables       Financial assets                                                       
receivables        at amortised cost           at amortised cost           3 529 488    1 320 458         3 529 488    1 320 458

Cash and           Loans and receivables       Financial assets                                                                                                      
cash equivalents   at amortised cost           at amortised cost           3 675 738   56 281 732         3 675 738   56 281 732

New significant accounting policies and changes in significant accounting policies

Financial instruments
The adoption of IFRS 9 resulted in the change of classification of certain financial assets. The only significant change to the group's policies is the
measurement of impairment of financial assets, specifically trade receivables, which is now measured using an expected credit loss model instead of an
incurred loss model.

The group uses a provision matrix to calculate expected credit losses, with amounts more than 60 days past due viewed as default events. This change did not
result in an increase in the loss allowance compared to the previous impairment model.

Financial assets
Impairment of financial assets
The group recognises a loss allowance for expected credit losses on financial assets. The amount of expected credit losses is updated at each reporting date
to reflect changes in credit risk since initial recognition of the respective financial asset.

The group recognises lifetime expected credit losses for accounts receivable and these are estimated using a provision matrix based on the group's historical
credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current and forecast 
direction of conditions, including the time value of money where appropriate.

For all other financial assets, the group recognises lifetime expected credit losses when there has been a significant increase in credit risk since initial
recognition. If there has been no significant increase in credit risk, the loss allowance is measured at an amount equal to the 12-month expected credit losses.

The group determines increases in credit risk by considering any change in the risk of default occurring since the date of initial recognition. The group 
considers that default has occurred when a financial asset is more than 60 days past due.

Critical accounting judgements and key sources of estimation uncertainty
Financial instruments
Determining expected credit losses requires assessments of general economic conditions, both current and future, and their impacts on the credit risk of
financial assets, as well as using periods that amounts are past due, to indicate levels of credit loss expected.

Credit losses may occur differently to these expectations, both in terms of timing and amount.

1.3 Comparative figures
As the company was incorporated on 6 July 2017, the comparative figures represent a period of eight months.

1.4 General
The summarised reviewed consolidated financial statements were compiled by Colin Dockrall CA(SA), the financial director.

A dividend of 19.43000 cents has been declared on 3 May 2019. Please see note 8 for further details.

The directors are not aware of any other matters or circumstances of a material nature arising subsequent to the year-end that require any additional
disclosure or adjustment to the summarised reviewed consolidated financial statements.

These summarised reviewed consolidated financial statements for the year ended 28 February 2019 have been reviewed by Nolands Inc, 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 auditor's report does not necessarily report on all the information contained in these financial results. Shareholders 
are therefore advised that in order to obtain a full understanding of the auditor's engagement they should obtain a copy of the auditor's report together with 
the accompanying financial information from the company's registered office.

The directors take full responsibility for the preparation of these results and confirm that the financial information has been correctly extracted from the 
underlying financial statements.

2 SEGMENT ANALYSIS

Segment information
At 28 February 2019, the group is organised into one main operating segment:
Mixed use (includes retail and office)

28 February 2019                                                                      Admin          
                                                                              and corporate  
                                                                   Mixed use          costs         Total
                                                                           R              R             R

Revenue                                                           39 985 959              -    39 985 959
Property operating expenses                                      (14 358 134)             -   (14 358 134)
Administrative expenses                                                          (1 438 660)   (1 438 660)
Operating profit/(loss)                                           25 627 825     (1 438 660)   24 188 965
Investment income                                                    567 462              -        567462
Gain on fair value adjustment                                        709 632              -       709 632
Finance costs                                                    (11 748 706)    (3 108 508)  (14 857 214)
Profit/(loss) before taxation                                     15 156 213     (4 547 168)   10 608 845
Taxation                                                            (442 630)             -      (442 630)
Profit/(loss) for the year                                        17 081 145     (4 547 168)   10 166 215
Non-controlling interest                                              (8 754)             -        (8 754)
Profit/(loss) attributable to owners of the parent                17 072 391     (6 914 930)   10 157 461

Reconciliation of profit for the year to distributable income:
Gain on fair value adjustment                                                                    (709 632)
Total non-controlling interest effects of adjustments                                                 710
Headline earnings                                                                               9 448 539
Lease straight-lining adjustment                                                                1 771 734
Depreciation                                                                                      193 241
Deferred tax movement                                                                             442 629
Total non-controlling interest effects of adjustments                                              (2 408)
Distributable income                                                                           11 853 735

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

28 February 2019                                    Admin          
                                            and corporate  
                                 Mixed use          costs        Total
                                         R              R            R

Property, plant and equipment    1 218 296              -    1 218 296
Investment property            309 400 474              -  309 400 474
Operating lease asset            4 381 230              -    4 381 230
Trade and other receivables      3 244 488        285 000    3 529 488
Cash and cash equivalents        3 417 168        258 570    3 675 738
                               321 661 656        543 570  322 205 226

The amounts provided to management 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.

28 February 2019                                   Admin         
                                           and corporate  
                                Mixed use          costs         Total
                                        R              R             R
Other financial liabilities   110 302 437              -   110 302 437
Loan from parent company                -     33 209 682    33 209 682
Trade and other payables        9 176 531         35 256     9 211 787
Current tax payable             1 686 998              -     1 686 998
                              121 165 966      33 24 938   154 410 904


At 28 February 2018, the group was organised into one main operating segment:
Mixed use (includes retail and office)

28 February 2018                                                                       Admin          
                                                                               and corporate  
                                                                    Mixed use          costs        Total
                                                                            R              R            R
Revenue                                                            17 802 346              -   17 802 346
Property operating expenses                                        (6 332 135)             -   (6 332 135)
Administrative expenses                                                     -     (3 757 815)  (3 757 815)
Operating profit/(loss)                                            11 470 211     (3 757 815)   7 712 396
Gain on bargain purchase in a business combination                          -      2 511 373    2 511 373
Investment income                                                     857 562        951 318    1 808 880
Finance costs                                                      (6 231 893)    (1 693 742)  (7 925 635)
Profit/(loss) before taxation                                       6 095 880     (1 988 866)   4 107 014
Taxation                                                             (258 203)             -     (258 203)
Profit/(loss) for the period                                        5 837 677     (1 988 866)   3 848 811
Non-controlling interest                                               (3 265)             -       (3 265)
Profit/(loss) attributable to owners of the parent                  5 834 412     (1 988 866)   3 845 546
Reconciliation of profit for the period to distributable income:
Gain on bargain purchase in  a business combination                                            (2 511 373)
Headline earnings                                                                               1 334 173
Lease straight-lining adjustment                                                                 (717 425)
Listing expenses                                                                                3 354 726
Depreciation                                                                                       63 765
Deferred tax movement                                                                            (207 915)
Distributable income                                                                            3 827 324


The amounts provided to management 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.

28 February 2018              
                                                    Admin          
                                            and corporate  
                                 Mixed use          costs        Total
                                         R              R            R

Property, plant and equipment      784 573              -      784 573
Investment property            308 690 842              -  308 690 842
Operating lease asset            6 152 965              -    6 152 965
Deferred tax                       429 433              -      429 433
Trade and other receivables      1 035 458        285 000    1 320 458
Cash and cash equivalents       45 689 379     10 592 353   56 281 732
                               362 782 650     10 877 353  373 660 003


The amounts provided to management 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.

28 February 2018       
                                                   Admin          
                                           and corporate  
                                Mixed use          costs         Total
                                        R              R             R
 
Other financial liabilities   164 055 652              -   164 055 652
Loan from parent company                -     30 111 698    30 111 698
Trade and other payables        8 012 782        117 000     8 129 782
Current tax payable             2 330 665              -     2 330 665
                              174 399 099     30 228 698   204 627 797


3 INVESTMENT PROPERTY
                                                Reviewed      Audited
                                             28 February  28 February
                                                    2019         2018
                                                Carrying     Carrying
                                                   value        value
                                                       R            R
Group
Investment property at fair value            309 400 474  308 690 842


                                                Reviewed      Audited
                                             28 February  28 February
                                                    2019         2018
                                                       R            R
Group
Reconciliation of investment property
Opening carrying value                       308 690 842            -
Additions through business combination                 -  308 690 842
Fair value adjustment                            709 632            -
Investment property valuation at year end    309 400 474  308 690 842
Recognised in property, plant and equipment    1 218 296      156 193
Operating lease asset                          4 381 230    6 152 965
Directors' valuation                         315 000 000  315 000 000


Pledged as security
Mortgage bonds have been registered over the entire investment property as security for the ABSA bond (see note 5).

Details of property
Pier 14 shopping centre
A retail shopping centre located in Port Elizabeth

Details of valuation
The property was revalued by the directors using the discounted cash flow of future income streams method. The key assumptions used by the directors in
determining fair value were as follows:

                               2019      2018
Discount rate                15.00%    15.00%
Market cap rate               9.52%    10.00%
Expense growth rate           7.00%     7.00%
Income growth rate            6.00%     6.00%
Initial yield                 9.66%     9.70%
Exit capitalisation rate     10.37%    10.85%
Discounted cash flow term  10 years  10 years

Inter-relationship between key unobservable inputs and fair value measurements
The estimated fair value would increase/(decrease) if:

Discount rate was lower/(higher);
Capitalisation rate was lower/(higher);
Expected expense growth rate was lower/(higher);
Expected market rental growth rate was higher/(lower);
Initial yield was (lower)/higher;
Exit capitalisation rate was lower/(higher).

                                                               Reviewed      Audited
                                                            28 February  28 February
                                                                   2019         2018
                                                                      R            R

Amounts recognised in profit and loss for the period
Rental income from investment property                       39 985 959   17 802 346
Direct operating expenses from rental generating property   (14 358 134)  (6 332 135)
                                                             25 627 825   11 470 211


Fair value hierarchy
The table below analyses assets and liabilities carried at fair value.
The levels are defined as follows:

Level 3: Unobservable inputs for the assets and liabilities.

                                     Reviewed      Audited
                                  28 February  28 February
                                         2019         2018
                                            R            R
Level 3
Recurring fair value adjustments
Assets
Investment property
Pier 14 Shopping Centre*          313 781 704  314 843 807

*includes investment property and operating lease asset

4 CASH AND CASH EQUIVALENTS
Material movements in cash and cash equivalents include repayment of the ABSA mortgage bond of R53.7 million.

5 OTHER FINANCIAL LIABILITIES

                           Reviewed      Audited
                        28 February  28 February
                               2019         2018
                                  R            R

Held at amortised cost
Mortgage bond           110 302 437  164 055 652

This loan is on an interest only repayment profile for 36 months (commenced: 1 October 2017), following which the loan will be repayable in full.

The loan bears interest at the South African Prime lending rate less 1%.

The fair value of the other financial liability held at amortised cost is estimated to approximate its carrying value due to the interest rates being 
market-related for similar entities.

During the year under review, excess cash was utilized to repay a portion of the loan in order to save on interest expenses.

6 PER SHARE INFORMATION

                                                          Reviewed      Audited
                                                       28 February  28 February
                                                              2019         2018
                                                                 R            R

Profit attributable to shareholders                     10 157 461    3 845 546
Gain on fair value adjustment                             (709 632)           -
Gain on bargain purchase in a business combination               -   (2 511 373)
Non-controlling interest effects of adjustments                710            -
Headline earnings                                        9 448 539    1 334 173
Lease straight-lining adjustment                         1 771 734     (717 425)
Listing expenses                                                 -    3 354 726
Depreciation                                               193 241       63 765
Deferred tax movement                                      442 629     (207 915)
Total non-controlling interest effects of adjustments       (2 408)           -
Distributable income                                    11 853 735    3 827 324
Number of shares in issue                               33 000 000   33 000 000
Weighted average number of ordinary shares in issue     33 000 000   29 658 228
Earnings per share (c)                                       30.78        12.97
Headline earnings per share (c)                              28.63         4.50
Distributable earnings per share (c) *                       35.92        11.60
Net asset value per share (c) **                            507.91       511.65
Distribution per share (c)                                   37.23        16.72

The company does not have any potential dilutionary instruments in issue.

* Distributable earnings per share is calculated by dividing the distributable earnings calculated by the total number of shares in issue at period / year end.
Distributable earnings is calculated in compliance with the recommendations of best practice from the SA REIT Association, and exclude all those items that are
traditionally not distributed, such as capital profits / losses from the disposal of investment property and fair value adjustments.
** Net asset value per share is calculated by dividing the net assets by the total number of shares in issue at period / year end. Net assets comprise total
assets less total liabilities, less equity attributable to non-controlling interest.

7 RELATED PARTIES
                                                                               Reviewed       Audited
                                                                            28 February   28 February
                                                                                   2019          2018
                                                                                      R             R

Relationship
Parent company: Urban Retail Property Investments 1 (Pty) Ltd
Companies under common directorships: Castleview Asset Managers (Pty) Ltd
Loan account owing to parent company
Urban Retail Property Investments 1 (Pty) Ltd                               (33 209 682)  (30 111 698)
Other receivables owing by companies under common directorships
Castleview Asset Managers (Pty) Ltd                                             419 563       285 000
Interest capitalised on loan owing to parent company
Urban Retail Property Investments 1 (Pty) Ltd                                 3 097 985     1 692 314
Asset management fees paid to companies under common directorships
Castleview Asset Managers (Pty) Ltd                                           1 718 321       449 131
Compensation to directors and other key management
Short-term employee benefits                                                    480 000       215 400


8 PAYMENT OF DIVIDEND
The board has approved and notice is hereby given of the final gross dividend of 19.43000 cents per share for the six months ended 28 February 2019.

The dividend is payable to Castleview's shareholders in accordance with the timetable set out below:

Last date to trade cum dividend: Tuesday, 11 June 2019
Shares trade ex dividend: Wednesday, 12 June 2019
Record date: Friday, 14 June 2019
Payment date: Tuesday 18 June 2019

Share certificates may not be dematerialised or rematerialised between Wednesday, 12 June 2019 and Friday, 14 June 2019, both days inclusive.

In accordance with Castleview'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 respectof 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
beneficialowner cease to be the beneficial owner, both in the form prescribed by the Commissioner for the South African Revenue Service (SARS). Shareholders
are advised to contact their CSDP, broker or the company, as the case may be, to arrange for the above-mentioned 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. On 22 February 2017, the dividends withholding tax was
increased from 15% to 20% and, accordingly, any dividends received by non-residents 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 15.54400 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 SARS. Non-resident shareholders are advised to 
contact their CSDP, broker or the company, as the case may be, to arrange for the above-mentioned documents to be submitted prior to payment of the dividend, 
if such documents have not already been submitted, if applicable.

The dividend will be transferred to dematerialised shareholders' CSDP/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.

Shares in issue at the date of declaration of dividend: 33 000 000.

Castleview's income tax reference number: 9366916188.

9 CHANGE TO THE BOARD OF DIRECTORS
Elana Kruger resigned as financial director on 28 February 2019.
Colin Dockrall was appointed as the new financial director on 1 March 2019.

By order of the board

James Templeton                    Colin Dockrall
Chief executive officer        Financial director

Cape Town
24 May 2019


Directors: JWA Templeton, C Dockrall, RG Volks, GC Bayly, DJ Green, A Padayachee

Registered office: 411 The Hills, Buchanan Square, 160 Sir Lowry Road,  Woodstock, 7925 PO Box 55240, Sunset Beach, 7435

Website: www.castleview.co.za

Company secretary: Statucor

Transfer secretary:Link Market Services

Designated adviser:Java Capital


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