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Condensed unaudited consolidated financial statements for the six months ended 31 August 2020, change to the board
NEWPARK REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2015/436550/06)
JSE share code: NRL ISIN: ZAE000212783
(Approved as a REIT by JSE)
(“Newpark” or “the Company” or “the Group”)
SHORT-FORM ANNOUNCEMENT: CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED
31 AUGUST 2020 AND CHANGE TO THE BOARD
NATURE OF BUSINESS
Newpark is a property holding and investment Company that is currently invested in A-grade commercial
and industrial properties.
Property portfolio
Newpark’s property portfolio consists of four properties. Two are located in the heart of Sandton, Gauteng,
namely the JSE Building which has 18,163 m 2 of gross lettable area (“GLA”) and an adjoining property
known as 24 Central, which has 15,654 m2 of GLA. A further property is situated in Linbro Business Park which
has 12,387 m2 of GLA and the fourth property is situated in Crown Mines which has 11,277 m2 of GLA. The
combined valuations of these properties prepared by the registered property valuer are performed
annually at the group’s year-end. The latest valuation as at 29 February 2020 was R1,38 billion.
KEY FINANCIAL HIGHLIGHTS
Unaudited Unaudited Change
31 August 31 August %
2020 2019
Dividend per share (cents) 19,63 24,32 (19,3%)
Total assets (R000) 1 398 469 1 421 368 (1,6%)
Net asset value per share (cents) 8,69 9,25 (6,1%)
Loan to value ratio (%) 35,42% 32,65%
Gross revenue (R000) 56 027 61 024 (8,2%)
Operating profit before fair value adjustments 41 139 46 997 (12,5%)
(Loss)/ earnings per share (cents) (9,63) 18,48 (152,1%)
Headline (loss)/earnings per share (cents) (9,63) 18,48 (152,1%)
Commentary on results
The company’s board of directors (“board”) is pleased to present the group’s results for the six months
ended 31 August 2020, which incorporate the impact of the national lockdown. The group was adversely
impacted mainly in its mixed use building, 24 Central which suffered increased vacancies and reduced
rentals as a result of financial support provided to tenants. In addition, the group’s expected credit loss
provision was increased by R3,2 million.
Newpark’s statement of financial position remains robust with satisfactory a loan-to-value ratio (“LTV”) of
35,4%* (FY2020: 32,7%). The group’s vacancies increased during the period to 13,7% (FY2020: 12,1%; prior
comparable period H1 FY2020: 11,9%). Revenue for the six months was R56,0 million (down 8,2% on the prior
comparative period), which realised an operating profit before fair value adjustments of R41,2 million
(down 12,5%). After allowing for net cost of finance the group’s profit amounted to R18,1 million (down
28,6%) and after allowing for the impact of the fair value adjustments relating to interest rate hedges the
group incurred a total comprehensive loss of R9,6 million (down 152,1%).
Besides the vacancies in the mixed use segment, the tenant profile has remained largely the same and no
acquisitions or disposals were made during this period.
Distributable earnings per share and dividend per share
Distributable earnings per share and dividend per share for the six months to 31 August 2020 declined by
19,3% to 19,63 cents per share (H1 FY2020: 24,32 cents per share).
Payment of interim dividend
The board has approved, and notice is hereby given of the interim gross dividend of 19,630838 cents per
share for the six months ended 31 August 2020.
The dividend is payable to Newpark’s shareholders in accordance with the timetable set out below:
2020
Last date to trade cum dividend: Tuesday, 27 October
Shares trade ex dividend: Wednesday, 28 October
Record date: Friday, 30 October
Payment date: Monday, 2 November
Share certificates may not be dematerialised or rematerialised between Wednesday, 28 October 2020
and Friday, 30 October 2020, both days inclusive.
The dividend will be transferred to dematerialised shareholders’ CSDP accounts/broker accounts on
Monday, 2 November 2020. Certificated shareholders’ dividend payments will be paid to certificated
shareholders’ bank accounts on or about Monday, 2 November 2020.
In accordance with Newpark’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 respect of 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 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, as the case may be, to arrange for the
abovementioned 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. Any dividends 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
shareholders. Assuming dividend withholding tax will be withheld at a rate of 20%, the net dividend amount
due to non-resident shareholders is 15,704670 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 South African Revenue Service. Non-resident
shareholders are advised to contact their CSDP, broker or the Company, as the case may be, to arrange
for the abovementioned documents to be submitted prior to payment of the dividend if such documents
have not already been submitted, if applicable.
Shares in issue at the date of declaration of dividend: 100,000,001
Newpark’s income tax reference number: 9506934174.
Outlook
Newpark will continue to focus on the management of its existing assets and will remain alert to any
potential acquisitions that are in keeping with the stated strategy.
Rental collections for the first 7 months of the new financial year were 79% of that originally budgeted.
Assuming no further material COVID-19 related impacts on tenants, the board expects this percentage to
increase as we progress toward a normalised trading environment in due course.
The board is mindful of the current uncertainty in the economic environment resulting from the COVID-19
pandemic and how this could potentially further impact our tenants in the mixed-use (retail, office and
storage) segment and the industrial segments. At this point in time, the uncertainty generated by the
pandemic makes reliable forecasting extremely difficult and the board has thus determined not to give
guidance on distributable earnings and dividends for the full year ending on 28 February 2021.
CHANGE TO THE BOARD
The board is pleased to announce that Mr Thanduxolo Selby Sishuba has been appointed as an
independent non-executive director and member of the audit and risk committee of the company with
effect from 8 October 2020.
Thando, who has a Bachelor of Science Honours Degree and a Masters degree, has extensive experience
in property asset management and is currently the Head of Sanlam SA Direct Properties. He has previously
served as a director on a number of boards and committees, including Texton Property Fund and the
Pivotal Property Fund.
The board welcomes Thando and looks forward to his valued contribution to the Company.
ABOUT THIS ANNOUNCEMENT
This short-form announcement is the responsibility of the directors of and the contents were approved by
the board on 6 October 2020. This short-form announcement is a summary of the full announcement
released on SENS on 7 October 2020 and does not include full or complete details. The short-form
announcement has not been audited or reviewed by the Company’s external auditors.
The full announcement is available on the Company’s website at:
http://www.newpark.co.za/pdf/annual_reports/H1FY2021IRA.pdf and can also be accessed using the
following JSE link: https://senspdf.jse.co.za/documents/2020/jse/isse/NRLE/2020HY.pdf.
The full announcement is available for inspection at the registered offices of the Company or its sponsor,
at no charge, during office hours from Wednesday, 7 October 2020 to Wednesday, 14 October 2020. Any
investment decision should be based on the full announcement available on the Company’s website.
By order of the Board
7 October 2020
DIRECTORS
S P Fifield (Chief Executive Officer), J A I Ferreira (Financial Director), B D van Wyk *, D T Hirschowitz*, K M
Ellerine*, H C Turner **, S Shaw-Taylor**
* Non-executive director ** Independent non-executive director
REGISTERED OFFICE WEBSITE
51 West Street, Houghton, Gauteng, 2198 www.newpark.co.za
P O Box 3178, Houghton, Gauteng, 2041
COMPANY SECRETARY TRANSFER SECRETARY
CIS Company Secretaries Proprietary Limited Computershare Investor Services Proprietary Limited
DESIGNATED ADVISOR
Java Capital
6th Floor, 1 Park Lane, Wierda Valley,
Sandton, 2196
Date: 07-10-2020 09:33:00
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