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Short-Form Announcement: Unaudited Condensed Consolidated Interim Results For The Six Month Ended 31 August 2019
SPEAR REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2015/407237/06)
Share code: SEA
ISIN: ZAE000228995
Approved as a REIT by the JSE
("Spear" or "the Company")
SHORT-FORM ANNOUNCEMENT: UNAUDITED CONDENSED CONSOLIDATED
INTERIM RESULTS FOR THE SIX MONTH ENDED 31 AUGUST 2019
1. SALIENT FEATURES
Distributions per share increased by 7% to 44.64 cents per share, from 41.73 cents
per share in the prior corresponding period.
Management has successfully renewed/re-let 100 141m2 at a positive reversion of 2.72%.
Net asset value per share increased by 0.04% to 1 167 cents per share, from 1 166 cents
per share in the prior corresponding period.
FY2020 distribution per share growth on target for 6% to 8% growth from FY2019.
Portfolio occupancy rate of 98.10% and 100% Western Cape-based.
Investment property value increased 16.13% to R3.92 billion, from R3.37 billion in the
prior corresponding period.
Loan to Value improved by 2.91% to 38.43%, from 39.58% reported at 28 February 2019.
Revenue increased by 18.10% to R251.1 million, from R212.6 million in the prior
corresponding period.
Headline earnings per share increased by 2.75% to 45.47 cents per share, from
44.25 cents per share in the prior corresponding period.
Earnings per share decreased by 75.06% to 14.51 cents per share, from 58.20 cents per
share in the prior corresponding period.
2. DIVIDEND DECLARATION
The directors resolved to declare an interim gross dividend of 44.63992 cents per share
from income reserves in respect of the six months ended 31 August 2019. The dividend
amount, net of South African dividends withholding tax of 20%, is 35.71194 cents per share
for those shareholders who are not exempt from dividends withholding tax. The number of
ordinary shares in issue at the declaration date is 205 776 521 and the income tax number
of the Company is 9068437236.
The salient dates of the dividend declaration are:
Declaration date Thursday, 17 October 2019
Last day to trade cum dividend Tuesday, 5 November 2019
Trading ex-dividend commences Wednesday, 6 November 2019
Record date Friday, 8 November 2019
Date of payment Monday, 11 November 2019
Share certificates may not be dematerialised or rematerialised between Wednesday,
6 November 2019 and Friday, 8 November 2019, both days inclusive.
Tax implications
As Spear is a REIT, the distribution meets the definition 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 South African tax residents will form part of their gross income in
terms of section 10(1)(k)(i)(aa) of the Income Tax Act. Consequently, these distributions are
treated as income in the hands of the shareholders and are not subject to dividends withholding tax.
The exemption from dividends withholding tax is not applicable to non-resident shareholders,
but they may qualify for relief under a tax treaty.
South African tax residents
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 exception, contained in paragraph (aa) of section
10(1)(k)(i) of the Income Tax Act, because it is a dividend distributed by a REIT. The
dividend is exempt from dividends withholding tax in the hands of South African tax resident
shareholders, provided that the South African tax resident shareholders provide the following
forms to the Central Securities Depository Participant ("CSDP") or broker in respect of
uncertificated shares, or to the company, in respect of certificated shares:
a) a declaration that the dividend is exempt from dividends withholding tax; and
b) a written undertaking to inform the CSDP, broker or the company, 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 to arrange for
the above-mentioned documents to be submitted prior to payment of the dividend, if such
documents have not already been submitted.
Non-residents shareholders
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. It should
be noted that up to 31 December 2013, dividends received by non-residents from a REIT
were not subject to dividends withholding tax. Since 1 January 2014, any dividend received
by a non-resident from a REIT will be subject to dividends 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
concerned. Assuming dividends withholding tax will be withheld at a rate of 20%, the net
dividend amount due to non-resident shareholders is 35.71194 cents per share. A
reduced dividends withholding rate in terms of the applicable DTA may only be relied on if
the non-resident shareholder has provided the following form to their CSDP or broker 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 DTA; and
b) a written undertaking to inform their CSDP, broker or the company, 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 company to arrange for
the above-mentioned documents to be submitted prior to payment of the dividend, if such documents
have not already been submitted.
Holders of uncertificated shares have to ensure that they have verified their residence
status with their CSDP or broker. Holders of certificated shares will be asked to complete
a declaration to the company.
3. SHORT-FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the directors of the Company. It
contains only a summary of the information in the full announcement ("Full
Announcement") and does not contain full or complete details. The Full Announcement
can be found at:
https://senspdf.jse.co.za/documents/2019/JSE/ISSE/SEAE/Interim19.pdf
Copies of the Full Announcement is also available for viewing on the Company's website
at https://spearprop.co.za/pdf/investor-relations/spear-interim-results-august-2019.pdf
or may be requested in person, at the Company's registered office or the office of the sponsor,
at no charge, during office hours.
Any investment decisions by investors and/or shareholders should be based on
consideration of the Full Announcement, as a whole.
17 October 2019
Sponsor
PSG Capital
Date: 17/10/2019 07:05:00
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