Wrap Text
Summarised audited consolidated financial statements, dividend declaration for the 12 months ended 28 February 2021
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:
SUMMARISED AUDITED CONSOLIDATED FINANCIAL STATEMENTS AND CASH
DIVIDEND DECLARATION
for the 12 months ended 28 February 2021
AT A GLANCE
REVENUE decreased to R111,8 million (down 12,1%)
FUNDS FROM OPERATIONS decreased to R39,9 million (down 10,7%)
FINAL DIVIDEND increased to 20,25 cents per share (up 28,7%)
NET ASSET VALUE PER SHARE decreased to R8,85 (down 1%)
LOAN-TO-VALUE deteriorated to 34,6% (down from 33,3%)
HEADLINE EARNINGS PER SHARE decreased to 23,6 cents (down 37,8%)
EARNINGS PER SHARE increased to 17,09 cents (up 40,5%)
NATURE OF BUSINESS
Newpark is a property holding and investment company that holds A-
grade commercial and industrial properties.
STRATEGY
Newpark’s investment strategy is to seek well-positioned prime
properties which provide high-quality cash flows and have the
potential for long-term capital growth.
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 m2 of gross lettable area (“GLA”) and an
adjoining mixed-use property known as 24 Central, which has 15 934
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 and 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 28 February 2021 was R1,37 billion.
COMMENTARY ON RESULTS AND OUTLOOK
The Company’s board of directors (“Board”) is pleased to present
the Group’s results for the year under review. The solid underpin
provided by a combination of assets that have sound property
fundamentals and a high-quality tenant mix, has proven its worth
amidst very difficult operating conditions. Growth over the past
year has taken a backseat to management of the existing assets,
with a particular focus on 24 Central.
Newpark’s balance sheet continues to remain financially healthy
with a satisfactory gearing level of 34,6% (2020: 33,3%). The
COVID-19 market disruption has impacted investment property
valuations resulting in a net R9 million decrease in fair value.
The group’s vacancies increased during the period to 13,5%
(FY2020: 12,1%), negatively impacted by the effects of COVID-19
restrictions on the retail component of 24 Central. Revenue for
the financial year ended 28 February 2021 (“the financial year”)
was R111,8 million (down 12,1%), and operating profit before fair
value adjustments was R82,9 million (down 7,0%). After allowing
for fair value adjustments and the net cost of finance, the total
comprehensive profit for the financial year was R17,09 million (up
40,5%), representing a profit of 17,089 cents per share (“cps”)
(F2020: 12,16 cps). The total dividends for the financial year of
39,88 cps (FY2020: 40,06 cps) represent a marginal year-on-year
decrease of 0,4%.
This performance has been achieved against the backdrop of R10,7
million in COVID-19 tenant relief granted during the year. This
impacted directly on both the profitability of the group, funds
from operations and ultimately, the dividend declared for the
financial year. The majority of this relief was given in the
mixed-use property.
Other than the loss of certain tenants in the mixed-use segment,
the tenant profile has remained largely the same.
The majority of the tenants have leases that are renewable in 2025
and 2026 such that more than 80% of the leases will mature after
the impact of COVID-19 has likely dissipated.
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. Assuming that Newpark’s
solid base is maintained, the group is well-positioned to
capitalise on opportunities that are likely to present themselves
in a suppressed real estate market.
The board is mindful of the current weak economic environment and
how this may impact our tenants, specifically in the mixed-use
(retail, office and storage) segment and the industrial segment.
Notwithstanding this, and on the assumption that no further
material relief is granted to tenants due to ongoing COVID-19
restrictions, the group is budgeting for growth in funds from
operations per share (“FFOPS”) for the year ending 28 February
2022 of in excess of 15%, being at least 45,86 cents per share
compared to the FFOPS for the year ended 28 February 2021 of 39,88
cents per share. Newpark expects a corresponding increase in the
dividend per share for the year ending 28 February 2022.
The forecast is based on the assumption that no further
deterioration in the macro-economic environment will prevail, no
material tenant default will occur, operating cost increases will
not exceed inflation and no changes will be made to the property
portfolio. This forecast has not been audited or reviewed by the
company’s auditors.
FUNDING
A refinance of Newpark’s facilities was carried out in February
2021, aligning the funding to the underlying investment profile.
Consistent with the board’s interest rate risk management policy,
more than 80% of the interest rate risk has been hedged with
interest rate swaps expiring between 2022 and 2024, with the
balance of the interest rate risk being hedged through a zero-cost
collar.
CASH DIVIDEND DECLARATION
The board has approved and notice is hereby given of the final
gross dividend of 20,25025 cents per share for the year ended
28 February 2021.
The dividend is payable to Newpark’s shareholders in accordance
with the timetable set out below:
2021
Last date to trade cum dividend Tuesday, 8 June
Shares trade ex dividend Wednesday, 9 June
Record date Friday, 11 June
Payment date Monday, 14 June
Share certificates may not be dematerialised or rematerialised
between Wednesday, 9 June 2021 and Friday, 11 June 2021, both days
inclusive.
The dividend will be transferred to dematerialised shareholders’
CSDP accounts/broker accounts on Monday, 14 June 2021.
Certificated shareholders’ dividend payments will be paid to
certificated shareholders’ bank accounts on or about Monday,
14 June 2021.
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 16,20020 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: 9114003149.
By order of the board
21 May 2021
The above announcement is a summary of information in the full
announcement and does not contain full or complete details and is
the responsibility of the directors. Any investment decisions by
investors and/or shareholders should be based on the full
announcement which is available on
https://senspdf.jse.co.za/documents/2021/jse/isse/NRLE/YEres21.pdf
and published on the company’s website on
http://www.newpark.co.za/pdf/annual_reports/FY2021FYRA.pdf
on 21 May 2021. The full announcement is also available at the
company’s registered office (51 West Street, Houghton, Gauteng,
2198) for inspection, at no charge, during office hours on any
business day and at the offices of the designated advisor, Java
Capital (6th Floor, 1 Park Lane, Wierda Valley, Sandton, 2196).
Copies of the full announcement may be requested by email to
info@newpark.co.za.
The annual financial statements including the audit opinion of the
external auditor, BDO South Africa Incorporated, which set out the
key audit matters and the basis for its unmodified opinion, is
available on the company’s website on
http://www.newpark.co.za/pdf/annual_reports/FY2021AFS.pdf
NEWPARK REIT LIMITED
DIRECTORS:
S Shaw-Taylor (Chairperson) **, SP Fifield (Chief Executive
Officer), JAI Ferreira (Financial Director), BD van Wyk *,
DT Hirschowitz *, KM Ellerine *, TS Sishuba **, HC Turner **
* Non-executive director
** Independent non-executive director
Date: 21-05-2021 04:15:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
