INDLUPLACE PROPERTIES LIMITED - Operational update, trading statement and pre-close discussion

Operational update, trading statement and pre-close discussion

INDLUPLACE PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/226082/06)
JSE share code: ILU ISIN: ZAE000201125
(Approved as a REIT by the JSE)
(“Indluplace” or the “company”)


OPERATIONAL UPDATE, TRADING STATEMENT AND PRE-CLOSE DISCUSSION


Shareholders are referred to the trading statement released by Indluplace on 23 April 2020 and the interim
results for the six months ended 31 March 2020 released on 20 May 2020. An update of the company’s
performance and financial position as well as general trading conditions are provided below.

Collections

Collections have improved every month since lockdown was introduced in March 2020, with collections for
August 2020 being 90% for the portfolio. Average residential collections for the period April to 31 August
2020 were 88% while collections from retail tenants, normally about 5% of billings, averaged 73% for the
same period. Normal credit control measures have resumed, and the debtors legal process has yielded positive
results.

Occupancy

In the first months of lockdown, regulations restricted tenants from moving. This created pent-up residential
tenant movement and the portfolio experienced increased churn as soon as lockdown levels were relaxed. The
strong demand for Indluplace’s variety of units in diverse locations, combined with increased letting
campaigns and intensive management, somewhat countered the increased tenant turnover. As expected, the
increased churn and stringent credit control measures introduced following lockdown, have resulted in an
increase in the average vacancy across the portfolio. August 2020 recorded a 10,5% average residential
vacancy, up from 5,7% in March 2020 and 8,5% in August 2019. We expect occupancy levels to improve
over the next few months.

Cash position, loans and valuations

Cash resources have increased as a result of a dividend not having been declared for the first half of the
financial year. Notwithstanding the impact of the COVID-19 pandemic and subsequent lockdown measures,
Indluplace has remained in a cash positive position during this time.

Negotiations with our bankers to refinance the R200 million facility maturing at the end of September 2020
as well as the R732 million maturing in April 2021 are at an advanced stage. We expect to be in a position to
provide final details in respect of all facilities that were renewed at the year-end presentation in November
2020.

The property portfolio valuation process is underway. We expect that property valuations will result in a
decrease in the value of the property portfolio and that the loan-to-value ratio (LTV) will increase and remain
below 38%, which is within bank loan covenants.

Pre-close update

Indluplace will host a pre-close update, to be hosted by Avior on Wednesday, 30 September 2020 at 14h00.
Further details are available from Lizelle du Toit at lizelle@acuminate.net.

Dividend update and trading statement

In previous SENS announcements Indluplace advised of the withdrawal of its dividend guidance for 2020 as
well as the deferral of the decision on the payment of an interim dividend for the six months ended 31 March
2020 until the end of the 2020 financial year.

Shareholders are advised that Indluplace’s total distributable income for the 2020 financial year is expected
to be approximately R160 million. This figure excludes interest on share scheme loans and is calculated before
any tax on undistributed income. This equates to a reduction of approximately 36% when compared to the
distributable income for the year ended 30 September 2019 of R251 million, which includes interest on share
scheme loans. A comparison between the distributable income for the same period in 2019, determined on the
same basis as that for the 2020 financial year, equates to a reduction of 31%. The impact of the reduction in
distributable income on dividend per share for the 2020 financial year will depend upon the extent of any
interim and/or final dividend that the Company elects to declare. As required by the JSE Listings
Requirements, once Indluplace obtains greater certainty in this regard prior to the finalisation of the results
for the year ended 30 September 2020, a further trading statement will be published.

Indluplace’s results for the year ended 30 September 2020 are expected to be released on or about
18 November 2020. The information on which this trading statement has been based has not been reviewed
or reported on by Indluplace’s auditors.

17 September 2020


Sponsor
Java Capital

Date: 17-09-2020 11:00:00
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