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TRADEHOLD LIMITED - Unaudited Interim Financial Statements of Tradehold Group for six months to 31 August 2020 Cash Dividend Declaration

Release Date: 12/11/2020 09:00
Code(s): TDH TDHBP     PDF:  
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Unaudited Interim Financial Statements of Tradehold Group for six months to 31 August 2020 Cash Dividend Declaration


(Registration number: 1970/009054/06)

Incorporated in the Republic of South Africa

JSE Ordinary Share code: TDH  ISIN: ZAE000152658

JSE B Preference Share code: TDHBP  ISIN: ZAE000253050

("Tradehold" or the "Group")





-  Total assets: £807 million (29 February 2020: £883.9 million)

-  Revenue: £34.5 million (31 August 2019: £47.7 million)

-  Ordinary shareholders' equity: £253.9 million (29 February 2020: 

   £282.7 million)

-  Net loss attributable to ordinary shareholders: £8.7 million 

   (31 August 2019: loss £0.4 million)

-  Headline earnings per share: 0.5 pence (31 August 2019: 6.9 pence)

-  Tangible net asset value per share: 105 pence / R23.39 

   (29 February 2020: 120 pence / R24.05)

-  Interim dividend of 30 cents per ordinary share declared.

Tradehold's net assets at the reporting date were split across the United 

Kingdom in pound sterling (42.3%), United States dollar assets in Africa 

(8.1%), and the balance in South African rand (49.6%). In South Africa it 

owns 74.3% of the Collins Property Group. In the UK it holds 100% of the 

Moorgarth Property Group, including a 90% stake in Boutique (previously 

known as 'The Boutique Workplace Company'), a provider of serviced office 

accommodation in Greater London. Moorgarth owns a number of Boutique's 



Total assets now amount to £807 million (29 February 2020: £883.9 million), 

the decrease being mainly due to the adverse effects of the deterioration

in the exchange rate of the ZAR against £ on Collins total assets, and 

proceeds from assets realised used to repay debt. Revenue was £34.5 million 

(31 August 2019: £47.7 million) while total loss attributable to 

shareholders stood at £8.7 million (31 August 2019: loss of £0.4 million). 

The increase in the loss is mainly due to an increase in Moorgarth losses of 

£5.3 million, a decrease in Collins net profit of £1.5 million mostly due to 

ZAR weakness, and an adverse movement on the revaluation of the financial 

assets of £1 million from the comparable period.

Headline earnings per share was 0.5 pence, down from 6.9 pence and tangible 

net asset value per share (as defined by management) was 105 pence / R23.39, 

compared to 120 pence / R24.05 at 29 February 2020.

The sum-of-the-parts valuation per share (as defined by management) was 

107.8 pence / R24.01, compared to 121.5 pence / R24.34 at 29 February 2020.


-  Collins, with a portfolio consisting of predominantly large industrial

   buildings, collected 90% of all rents due during the reporting period

   (95% if Covid-related remissions of R30 million are excluded) and in

   the process achieved its pre-Covid budget for the period 

-  The vacancy rate in the Collins portfolio was maintained at a low

   1,78% with all leases on average having another seven years to run

-  Moorgarth, with a portfolio consisting of shopping centres and

   commercial properties, achieved, under extremely demanding conditions,

   an overall rent collection rate of 75%

-  Moorgarth's management continued its programme of rebalancing the

   portfolio away from retail, which now constitutes 54% of its value

   against 60% 18 months ago

-  Boutique, which operates from 31 buildings in Greater London, is

   experiencing a growing interest in the market for its flexible,

   fully-equipped office space. September's sales of 180 workstations

   were the highest in three years. 

Collins Group 

Collins weathered the Covid-19 storm well in the six months to end August. 

This was thanks largely to the composition of its property portfolio, with 

upmarket industrial and distribution centres accounting for about 83% of the 

total. Collins is also in the fortunate position of deriving the bulk of 

its income from JSE-listed or national tenants with whom it enjoys long-term 


At the end of the reporting period the vacancy level of its 1.5 million 

square metres of gross lettable area (GLA) stood at 1.78%. The weighted 

average lease expiring profile remained at almost seven years.

The group's results for the six months are in line with its pre-Covid budget 

despite granting Covid-remissions of R30 million during this period. Even 

so, by consistently focusing on satisfying client needs, the group managed 

to collect 90% of all income due despite most businesses being closed down 

during the countrywide lockdown in May. 

Management continued focusing on achieving consistent, quality income 

streams. It had already previously embarked on an ongoing programme of 

upgrading the composition, average size and quality of the properties in the 

portfolio, that at the end of the reporting period was valued at 

R8.8 billion. To achieve this, non-core assets - 37 mainly smaller, mainly 

commercial buildings - were identified for disposal. Of these, 26 were sold 

by the end of the 2020 financial year. During the reporting period, a 

further seven were disposed of, with four remaining. As a result of these 

actions, the average size of properties in the portfolio increased from 

17 367 to 20 420 square metres. The quality of income has improved by virtue 

of the fact that 89% of the rental income generated from properties sold was 

from non-national tenants, compared to the 79% rental income generated from 

national tenants on properties that have been developed.

Throughout the reporting period, the group managed to retain its strong cash 

position. It also focused strongly on the liability side of the balance 

sheet to reduce its associated costs by unwinding long-dated fixed interest 

rate agreements. The benefits derived from these actions will be felt going 


Management continues to look at ways of making the business more cash-

generative by renegotiating facilities that would free up operating cash. 

The total value of the Collins portfolio was £393.9 million (R8 773 million) 

at the reporting date, compared with £438 million (R8 634 million) as at 

29 February 2020. The £ value has been adversely affected by the currency 

deterioration of the South African rand to pound sterling (R22.27 at the 

reporting date compared to R20.0388 at 29 February 2020).  

Collins Group contributed net profit of £3.3 million (31 August 2019: 

£4.8 million) to the group's net loss after minorities in the six-month 

period. The decrease is mainly due to a lower valuation gain on its CPI 

hedges, and the deterioration in ZAR to £ from the comparable reporting 


The Collins Group's total contribution to tangible net asset value per share 

is 51.8 pence (R11.54) compared to 59.3 pence (R11.88) at 29 February 2020.


The first six months of the financial year turned into the most challenging 

ever for Moorgarth, as was likely the case for the entire modern-day British 

property industry. Covid-19 precipitated a rapid dimension change in terms 

of working practices, shopping behaviour and leisure activities. The change 

in consumer behaviour has been dramatic and is likely to endure. While 

online retail sales increased from the historic 19% of total sales to 33% 

and up to 40% during the three months of the full lockdown period, digital 

shopping growth is projected to continue. At the same time, working from 

home has become commonplace with many large tenants in commercial buildings 

forcing staff to remain home until 2021.

Industry figures show average rent collections in retail malls ranged from 

20% to 50%, with many falling even below those levels. Moorgarth performed 

considerably better, with retail rent collections for the first three months 

of the reporting period averaging 71.4%. This was despite the government 

enforced closures of two of its malls during the initial lockdown. During 

the second three months, retail rent collections averaged 65.3%. However, 

commercial space rent collection levels were considerably higher, averaging 

95%, bringing the average of the total portfolio to 75%. During this time 

Moorgarth achieved 15 new lettings and finalised 28 lease renewals or 

extensions, all at or close to ERV (estimated rental value). 

To counter the effects of the drop in rent collections and consequently 

lower income, management's focus continued to be on key defensive measures 

to protect income, preserve cash and manage bank relationships. Major items 

of capital expenditure were deferred to a future date. Collectively, these 

steps enabled the company to meet all its operating costs and to service all 

debt requirements. 

The impact of the pandemic has created massive uncertainty in the market, 

particularly in the retail sector, and as a result, the lack of comparable 

transactions against which to demonstrate any credible and accurate 

assessment of value have simply not existed. Coupled with the impending and 

as yet unknown outcome of Brexit, it has become almost impossible to put 

accurate valuations on assets. Management therefore decided on a general 

impairment of value across the portfolio. Using as a guideline the 

findings of the IPD All Property Index, it has reduced values overall by 

£11.8 million for the half-year, having also reduced values by a similar 

amount in the previous financial year. Since February 2019 Moorgarth's 

retail portfolio has been marked down by 18% in value, despite securing 

planning consent on our Reading project for 422 apartments. Retail now 

comprises 54% of the total portfolio, compared to 60% then. 


Moorgarth's share of the group net loss amounted to £12.4 million, against a 

net loss of £7.1 million at 31 August 2019. 

The total value of Moorgarth's portfolio at half year (excluding IFRS 16 

right-of-use assets) dropped to £230.3 million from £239.6 million if its 

interest in joint ventures (not reflected in the balance sheet) is included. 

The decrease was mainly due to fair-value losses (excluding IFRS 16 fair-

value losses on right-of-use assets) of £11.8 million (29 February 2020: 

loss of £13.6 million) on investment properties, of which £6.4 million 

relates to the joint venture held properties.

Moorgarth's contribution to tangible net asset value per share was 

41.5 pence (R9.25) (29 February 2020: 44.9 pence (R9)).


Boutique (previously The Boutique Workplace Company or TBWC) offers flexible 

office accommodation from 31 buildings in greater London. Together, these 

buildings (some of which are owned by Moorgarth that buys and equips them 

for Boutique's needs) offer some 4 400 individual workstations in a modern 

shared office environment, including substantial amounts of amenity/breakout 


The pandemic clearly had a short-term impact on the company during the 

reporting period in that footfall in greater London offices fell to 

virtually nil overnight when the UK was put into a three-month lockdown. 

Most employers adopted a conservative position on staff returning to the 

office, and in Greater London, many staff members, especially those 

dependent on public transport, remained at home. This situation has 

continued even after full lockdown ended.


Despite this, Boutique remained fully operational since the end of the 

lockdown in June and managed to end the reporting period in an improved cash 

position. In addition, with indications that market conditions might be 

improving, September proved the best month for new business in three years.

Cost-saving measures saw general operating expenses drop by a third, with 

salary costs substantially reduced by using the government's furlough scheme 

and negotiating rent concessions from landlords. All capital expenditure was 

placed on hold and stringent cashflow measures introduced.

Boutique is also increasingly focusing on management contracts as a growing 

number of landlords become open to such arrangements in the light of how 

difficult traditional lease occupation has become. For Boutique, such 

contracts are attractive as they do not require significant capital 

commitment while operational liabilities remain with the landlord. 

Boutique's EBITDA (earnings before interest, tax, amortisation and 

depreciation) for the six months to end August was £595 000 (31 August 2019: 

£1.4 million), before adjusting for the new IFRS 16 reporting requirements. 

Nguni Group (Namibia)

Negotiations are underway to sell Tradehold's total Namibian portfolio which 

comprises a number of top-quality retail and commercial properties as well 

as vacant land for development. Given the quality of the assets and 

corresponding income stream, the portfolio was able to perform 

satisfactorily despite the impact of Covid-19. 

The value of the Namibian portfolio was £33.4 million (R745 million) at the 

reporting date, compared with £37 million (R743 million) on 29 February 

2020. The value has been adversely affected by the currency deterioration of 

the South African rand to pound sterling (R22.27 at the reporting date 

compared to R20.04 at 29 February 2020). Namibia reported a net profit after 

minorities of £1 million (31 August 2019: net profit of £409 000). The Nguni 

Group's total contribution to tangible net asset value per share was 8 pence 

(R1.79) (29 February 2020: 8.5 pence (R1.71)).

Tradehold Africa Group (Mozambique, Botswana and Zambia)

The value of the portfolio decreased to £23.4 million from £23.7 million at 

the end of February 2020 due the weakening of the US$ against £. The company 

contributed £1.9 million in profit to the total group loss, compared to a 

net profit of £1.7 million for the corresponding period. Tradehold Africa's 

total contribution to tangible net asset value per share was 7.1 pence 

(R1.57) (29 February 2020: 7.3 pence (R1.47).


The board of directors of Tradehold (the "Board") resolved to declare a 

gross cash dividend of 30 cents per ordinary share on 12 November 2020 - 

Tradehold's first interim dividend ever. The income used for this purpose is 

Tradehold's share of the dividend Collins Group declares every six months in 

terms of the agreement with its minority shareholders. The dividend will 

reduce Tradehold's stated capital. 

The distribution constitutes a foreign dividend as defined in section 1 of 

the Income Tax Act ("ITA") and is a dividend for purposes of dividends tax 

("DT"), since the shares are listed on the JSE Limited ("JSE").

An exemption from DT is provided for in the ITA in respect of foreign 

dividends paid to a South African company and to a non-resident to the 

extent that it is paid in respect of listed shares, provided certain 

administrative procedures are complied with.

The ITA further provides for an exemption from income tax in respect of 

foreign dividends received or accrued in respect of listed shares.

In terms of the ITA, DT of 20% has been withheld in the case of those 

shareholders who are not exempt from it. They will therefore receive a net 

dividend of 24 cents per ordinary share.

Tradehold has 261 346 570 ordinary shares in issue. Its income tax reference 

number is 9725/126/71/9.

The salient dates for the dividend are as follows:

Declaration date                                  Thursday, 12 November 2020

Last date to trade cum dividend                     Tuesday, 1 December 2020

Date trading commences ex dividend                Wednesday, 2 December 2020

Record date                                          Friday, 4 December 2020

Date of payment to shareholders                      Monday, 7 December 2020

Share certificates may not be dematerialised or rematerialised between 

Wednesday, 2 December 2020, and Friday, 4 December 2020, both days included.


At the end of the 2020 financial year, we made the point that the turmoil 

and devastation caused by Covid-19 would result in too many imponderables to 

make predictions about the future. That statement is still as true now as it 

was then. Globally, more than a million people have already died of the 

disease and the economic disruption continues. The UK is one of the 

countries to have been particularly hard hit, with a second wave leading to 

tighter lockdown restrictions across the country. In South Africa, 

joblessness is increasing daily while the government's new recovery plan, 

even if implemented immediately, will take time before it has any impact on 

the local economy. The Board therefore believes trading conditions will 

remain largely unchanged. Nevertheless, it expects the results for the full 

year to February 2021 to show some improvement on those of the first half. 


In compliance with paragraph 3.59 of the Listings Requirements of the JSE, 

Tradehold shareholders are advised that Mr Paul Johannes Roelofse has been 

appointed as an independent non-executive director to the Board with effect 

from 10 November 2020. 

Mr Roelofse holds a B.Acc. (Cum Laude) degree and a B.Acc. (Hons) degree 

from the University of Stellenbosch. He is a qualified Chartered Accountant 

and CFA charterholder. He was employed at Rand Merchant Bank from 2002 until 

2019, where he headed the global Corporate Finance business and served on 

the Investment Banking Board.

C H Wiese                          K L Nordier

Chairman                           Director

12 November 2020


The contents of this announcement are the responsibility of the directors of 

Tradehold. The announcement is only a summary of the information contained 

in the complete unaudited condensed consolidated interim results for the six 

months ended 31 August 2020 ("Full Announcement") released on SENS today. 

Any investment decisions by investors and shareholders should be based on 

consideration of the Full Announcement which is available at the following 


and on Tradehold's website at Copies of the Full 

Announcement are available for inspection and may be requested at no charge 

from Tradehold's registered office at 36 Stellenberg Road, Parow Industria 

or Tradehold's company secretary at, or 

from the offices of its sponsor, Questco Corporate Advisory Proprietary 

Limited, 33 Ballyclare Drive, Bryanston at no charge, from Monday to Friday 

during office hours. 


Executive directors: TA Vaughan, FH Esterhuyse, DA Harrop, KL Nordier

Non-executive directors: CH Wiese (alternate JD Wiese), HRW Troskie, 

MJ Roberts, LL Porter, KR Collins

Independent non-executive directors: HRW Troskie, MJ Roberts, LL Porter

Company secretary: P J Janse van Rensburg  

Transfer secretary: Computershare Investor Services (Pty) Ltd

Sponsor: Questco Corporate Advisory Proprietary Limited

Date: 12-11-2020 09:00:00
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