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Short Form – Interim Condensed Financial Results for the Six Months Ended 31 December 2019
Texton Property Fund Limited
Incorporated in the Republic of South Africa
Registration number: 2005/019302/06
A Real Estate Investment Trust, listed on the JSE Limited
JSE code: TEX
ISIN: ZAE000190542
("Texton" or "the Company")
Short form – Interim condensed financial results
for the six months ended 31 December 2019
Texton Property Fund is an internally asset managed Real Estate Investment
Trust ("REIT") listed on the JSE Limited formed to invest directly in
income-producing properties that offer attractive income and capital
appreciation. Texton aims to be a geographically and sectorally diverse
property fund focused on niche markets in South Africa, and in the United
Kingdom, in which it has a depth of experience, knowledge and track record.
The challenging economic environment in both South African and the
United Kingdom continued in the six months ending 31 December
2019. South Africa has been heavily impacted by high unemployment,
energy constraints and political uncertainty. Business has been negatively
impacted through high operating costs, compressed profit margins and
constrained cashflows. In the United Kingdom the challenging environment was
characterised by a prolonged Brexit as well as low economic growth of 1,4% for
2019 with property market returns being low.
Total portfolio value R4,238 billion (June 2019: R4,400 billion). Down 3,7%
Net asset value 604,53 cents per share (June 2019: 607,89 cents per
share). Down 0,6%
The sale of Tesco Chobe in the United Kingdom for R201million in July 2019 has
led to a decrease in the value of the property portfolio as at 31 December
2019. The decrease was partially offset by foreign exchange rate movements.
Loan-to-value ratio 44,9% (June 2019: 47,2%). Down 2,3%
Debt expiry profile Weighted average unexpired term 1,0 years (June 2019:
Weighted average unexpired term 1,4 years). Down 28,6%
Proceeds from the sale of Tesco Chobe was fully utilised to paydown debt in the
United Kingdom and resulted in the reduction of the loan to value ratio. In
addition, R139 million of South African debt was paid down. No covenant
breaches existed as at 31 December 2019.
Vacancies 9,0% (June 2019: 9,2%). Down 0,2%
Tenant retention 90,3% retained which includes leases that are month
to month
Lease expiry profile 4,04 years WAULT (June 2019: 4,36 years).
Down 7,3%
Vacancies have improved driven by new deals and focus on tenant retention.
Tenant retention is high but it is impacted by a lease with the Department of
Public Works being a monthly lease whilst a longer term lease is being
finalised.
Gross property income R266,8 million (December 2018: R286,8 million). Down 7,0%
Net property income R171,6 million (December 2018: R188,1 million). Down 8,8%
Gross property 38,1% (December 2018: 35,0%). Up 8,8%
expense ratio
The sale of assets has led to a decrease in both gross and net property income.
Distributable 32,17 cents (December 2018: 36,18 cents). Down 11,1%
earnings per share
Dividend per share 16,09 cents per share (December 2018: 36,18 cents
per share). Down 55,5%
Earnings and diluted 26,51 cents per share (December 2018: 23,94 cents
earnings per share per share). Up 10,7%
Headline and diluted 26,51 cents per share (December 2018: 25,83 cents
headline earnings per share). Up 2,6%
per share
The Board of Directors of Texton ("the Board") declares an interim dividend of
16,09 cents per share for the six-month period to 31 December 2019. In
declaring the dividend per share, the board has considered both the decrease
in distributable earnings and the ongoing strategy to strengthen the capital
structure of the company. As a REIT, Texton is required to distribute at
least 75% of its annual distributable earnings to shareholders, and the
Board is committed to achieving this at year end.
An announcement informing shareholders of the tax treatment and salient dates
of the dividends will be released on SENS on 10 March 2020.
This short-form announcement is the responsibility of the directors and is
only a summary of the information in the full announcement. The full
announcement is available at
https://senspdf.jse.co.za/documents/2020/jse/isse/tex/interim20.pdf and
can be found on the Companys website at www.texton.co.za. Copies of the
full announcement may also be requested at the Companys registered office and
Sponsors registered office at no charge during office hours, Monday to Friday
(08:00 to 17:00). Any investment decision should be based on the full
announcement.
10 March 2020
Johannesburg
Physical and registered address:
Block C, Investment Place,
10th Road, Hyde Park, 2196.
PO Box 653129, Benmore, 2010
Board of Directors:
M Golding (Non-executive Chairperson),
MH Muller* (Chief Executive Officer),
AJ Hannington (Independent Non-executive),
JR Macey (Lead Independent Non-executive),
R Franco (Non-executive),
S Thomas (Independent Non-executive),
W van der Vent (Independent Non-executive)
* Executive director
Company Secretary:
Motif Capital Partners,
173 Oxford Road, Rosebank, 2196
Auditor:
SizweNtsalubaGobodo Grant Thornton Inc.,
20 Morris Street East, Woodmead, 2191
Sponsor:
Merchantec Capital,
13th Floor, Illovo Point,
68 Melville Road, Illovo.
PO Box 41480, Craighall, 2024
Transfer secretary:
Computershare Investor Services Proprietary Limited,
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
PO Box 61051, Marshalltown, 2107
Investor relations:
Catchwords, Block B,
2 Davidson Street,
Rynfield, Benoni, 1501
Date: 10-03-2020 07:30:00
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