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Audited Results for the Period Ended 30 June 2019 and Cash Dividend Declaration
FAIRVEST PROPERTY HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1998/005011/06)
Share Code: FVT
ISIN: ZAE000203808
(Approved as a REIT by the JSE)
(“Fairvest” or “the Company”)
AUDITED RESULTS FOR THE PERIOD ENDED 30 JUNE 2019 AND CASH DIVIDEND DECLARATION
FOR THE SIX MONTHS ENDED 30 JUNE 2019
1. HIGHLIGHTS
- Distribution for the period increased by 8.1% to 21.773 cents per share
- Total property portfolio increased by 5.8% to R3.16 billion
- Like-for-like net property income growth of 8.7%
- Vacancies at 4.0% of total lettable area
- Tenant retention remained high at 79.8%
- Arrears reduced to 1.3% of revenue
- Interest cover high at 3.6 times
2. PROFILE
Fairvest Property Holdings Limited is a property investment holding company and Real Estate Investment
rust (“REIT”), with a unique focus on retail assets weighted toward non-metropolitan and rural shopping
centres, as well as convenience and community shopping centres servicing the lower LSM market, in high-
growth nodes close to commuter networks. The Fairvest property portfolio consists of 42 properties with
243 030 m2 of lettable area, valued at R3.16 billion.
3. SALIENT FEATURES
Dividend per share for the period increased by 8.1% to 21.773 cents per share, from 20.150 cents per share
in the prior corresponding period. For the six months to 30 June 2019 a final gross dividend of 11.157
cents per share was approved and declared, up from 10.344 cents per share in the prior corresponding
period.
The net asset value per share as at 30 June 2019 increased by 0.7% to 229.38 cents per share, from
227.78 cents per share for the prior corresponding period.
Revenue increased by 21.1% to R490 million, from R404 million in the prior corresponding period.
Headline earnings per share increased by 2.6% to 21.39 cents per share, from 20.85 cents per share in the
prior corresponding period.
Earnings per share decreased by 27.6% to 22.94 cents per share, from 31.69 cents per share in the prior
corresponding period, due to fair value adjustments on investment properties in the current period being
lower than the prior period.
4. PROSPECTS
Despite difficult economic conditions, the company remains confident that the nature of its portfolio, its
low-risk tenant base and the company’s letting expertise will prove to be defensive in the face of economic
headwinds, with growth in distributions per share approximating or exceeding current inflation. Fairvest
remains well positioned for long-term value creation, with a clearly focused strategy of servicing non-
metropolitan and lower LSM markets and maintaining strong operational metrics including conservative
gearing levels, high tenant retention and low arrears.
Fairvest has four large long-term leases, with above market rentals, that expire during the 2020 financial
year. The expectation is that the rentals on these four leases will be reduced on renewal or re-letting to
ensure sustainable rentals over the new lease periods. As a result we expect lower than historic distribution
per share growth of between 4% and 6% for the 2020 financial year.
This forecast assumed no material deterioration in the macroeconomic environment relative to current levels,
that no major corporate and tenant failures will occur and that tenants will be able to absorb increases in
municipal and utility costs. Forecast rental income is based on contractual lease terms and anticipated
market related renewals. This forecast is the responsibility of the board of directors of Fairvest and has not
been reviewed or reported on by the auditors.
5. DIVIDEND DISTRIBUTION DECLARATION
Fairvest’s board of directors has approved and declared a final gross dividend of 11.157 cents per share,
from income, for the six months ended 30 June 2019, payable to shareholders registered as such at the
close of business on Friday, 4 October 2019.
2019
Last day to trade cum dividend Tuesday, 1 October
Shares commence trading ex dividend Wednesday, 2 October
Record date Friday, 4 October
Payment date Monday, 7 October
Share certificates may not be dematerialised or rematerialised between Wednesday, 2 October 2019 and
Friday, 4 October 2019, both days inclusive.
6. TAX IMPLICATIONS
In accordance with Fairvest’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”).
Qualifying distributions received by shareholders who are South African tax residents must be included in
the gross income of such shareholders (as a non-exempt dividend in terms of section 10(1)(k)(aa) of the
Income Tax Act), with the effect that the qualifying distribution is taxable as income in the hands of the
shareholder. These qualifying distributions are, however, exempt from dividend withholding tax in the
hands of South African tax resident shareholders, provided that the South African resident shareholders
have provided the following forms to their Central Securities Depository Participant (“CSDP”) or broker,
as the case may be, in respect of uncertificated shares, or Fairvest’s transfer secretaries, Computershare
Investor Services Proprietary Limited, (“transfer secretaries”), in respect of certificated shares:
(a) a declaration that the distribution is exempt from dividends tax; and
(b) a written undertaking to inform the CSDP, broker or the transfer secretaries, as the case may be, should
the distribution cease to be exempt from dividend withholding tax,
both in the form prescribed by the Commissioner for the South African Revenue Service (“SARS”) and
shareholders are advised to contact their CSDP, broker or the transfer secretaries, as the case may be, to
arrange for the abovementioned documents to be submitted prior to payment of the distribution, if such
documents have not already been submitted.
Qualifying distributions received by non-resident shareholders will not be taxable as income and instead
will be treated as ordinary dividends but which are exempt in terms of the usual dividend exemptions per
section 10(1)(k) of the Income Tax Act. Any qualifying distribution 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 shareholder. Assuming dividend withholding tax will be withheld at a rate of 20%, the net amount
due to non-resident shareholders will be 8.9256 cents per share. A reduced dividend withholding tax rate in
terms of the applicable DTA, may only be relied on if the non-resident shareholder has provided the following
forms to their CSDP or broker, as the case may be, in respect of the uncertificated shares, or the transfer
secretaries, 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 transfer secretaries, 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 SARS. Non-resident shareholders are advised to contact their CSDP,
broker or the transfer secretaries, as the case may be, to arrange for the abovementioned documents
to be submitted prior to payment of the distribution if such documents have not already been submitted,
if applicable.
Local tax resident shareholders as well as non-resident shareholders are encouraged to consult their
professional advisors should they be in any doubt as to the appropriate action to take.
Shares in issue at the date of declaration of the final distribution: 1 018 125 441
Fairvest income tax reference number: 9205/066/06/1
7. SHORT-FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the Fairvest board of directors. Shareholders are
advised that this short-form announcement represents only a summary of the information of the full
announcement, (“Full Announcement”) and does not contain the full or complete details. The Full
announcement can be found at:
https://senspdf.jse.co.za/documents/2019/JSE/ISSE/FVT/JUN-19.pdf
A copy of the Full Announcement is also available on the Company’s website
https://fairvest.co.za/news/results/32 and may also be requested in person, at the Company’s registered
office or the offices of the Sponsor, at no charge, during office hours.
Any investment decisions by investors and/or shareholders should be based on a consideration of the
Full Announcement, as a whole.
5 September 2019
Sponsor
PSG Capital
Date: 05/09/2019 07:15:00
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