Wrap Text
Unaudited condensed consolidated interim financial for the 6 months ended 31 March 2024 and dividend declaration
Fairvest Limited
(Incorporated in the Republic of South Africa)
Registration number 2007/032604/06
JSE share code: FTA ISIN: ZAE000304788
JSE share code: FTB ISIN: ZAE000304796
LEI: 378900E93AFC4D1CAD45
(Granted REIT status with the JSE)
("Fairvest" or the "Company" or the "Group")
RESULTS ANNOUNCEMENT: UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS
AND CASH DIVIDEND DECLARATION FOR THE SIX MONTHS ENDED 31 MARCH 2024
Highlights
- Distribution of 67.83 cents per A share for the 6 months ended 31 March 2024
- Distribution of 21.24 cents per B share for the 6 months ended 31 March 2024
- Distribution per B share for the full year expected at upper end of guidance of between 41.50 and
42.50 cents per share
- Pay-out ratio of 100% maintained
- Like-for-like net property income increased by 7.0%
- Vacancies at 5.3%
- LTV improved to 32.6%
- Tenant retention at 87.1%
Financial Indicators
%
Six months to Six months to Increase/
Unaudited 31 March 2024 31 March 2023 (decrease)
Revenue (excl.straight-line rental income) (R'000) 998 432 951 585 4.9%
Basic earnings per A share in issue (cents) 67.71 23.33 190.2%
Basic earnings/(loss) per B share in issue (cents) 20.07 (19.37) 203.6%
Headline earnings per A share in issue (cents) 68.13 64.71 5.3%
Headline earnings per B share in issue (cents) 20.49 22.01 (6.9%)
Net asset value per A share (cents) 1 555 1 371 13.4%
Net asset value per B share (cents) 470 477 (1.5%)
Dividend per A share (cents) for the period ended 67.83 64.60 5.0%
Dividend per B share (cents) for the period ended 21.24 20.97 1.3%
Nature of business
Fairvest is a diversified South African Real Estate Investment Trust ("REIT") focused on creating long-
term shareholder value.
Fairvest holds a portfolio of 131 retail, office and industrial properties valued at R11.8 billion (held
directly and through subsidiaries). The average value per direct property held as at 31 March 2024 was
R90.5 million.
As at 31 March 2024, Fairvest held a 5.0% interest (September 2023: 5.0%) in Dipula Income Fund
Limited ("Dipula").
Declaration of dividend for the six months ended 31 March 2024
The Board has resolved to declare an interim dividend (dividend number 18) of 67.82580 cents per A
share and 21.23845 cents per B share, being 100% of the distributable income for the period (2023:
100%). The dividend will be paid to shareholders in accordance with the timetable set out below:
2024
Last date to trade cum distribution Tuesday, 18 June
Shares trade ex-distribution Wednesday, 19 June
Record date Friday, 21 June
Payment date Monday, 24 June
Share certificates may not be dematerialised or rematerialised between Wednesday, 19 June 2024 and
Friday, 21 June 2024, both days inclusive. Payment of the dividend will be made to shareholders on
Monday, 24 June 2024. In respect of dematerialised shareholders, the dividend will be transferred to
the Central Securities Depositary Participant ("CSDP") accounts/broker accounts on Monday, 24 June
2024. Certificated shareholders' dividend payments will be deposited on or about Monday, 24 June
2024 to certificated shareholders' bank accounts.
In accordance with Fairvest's status as a REIT, shareholders are advised that the dividends meet 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 distributions on the shares 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 they are dividends distributed by a REIT. These dividends are, however, exempt from dividend
withholding tax in the hands of South African tax resident shareholders, provided that the South African
resident shareholders provided 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 exempt from dividends tax; and
b) a written undertaking to inform the CSDP, broker or the Company 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 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 ordinary dividends which are exempt from income tax in terms of the general dividend
exemption in section 10(1)(k)(i) of the Income Tax Act. Dividends withholding tax is 20% and
accordingly, 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 in respect of the interim dividend per A share is 54.26064
cents per A share. The net dividend amount due to non-resident shareholders in respect of the interim
dividend per B share is 16.99076 cents per B share. A reduced dividend withholding rate in terms of
the applicable DTA, may only be relied on if the non-resident shareholder has provided the following
forms to their CSDP or broker in respect of uncertificated shares, or the Company, in respect of
certificated shares:
a) a declaration that the dividends are 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 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 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.
Shareholders are encouraged to consult their professional advisors should they be in any doubt as to
the appropriate action to take.
A-shares in issue at the date of declaration of the dividend: 62 718 658
B-shares in issue at the date of declaration of the dividend: 1 498 961 764
Fairvest's income tax reference number: 9068/723/17/1
Prospects
We anticipate net property income growth, on a like-for-like basis exceeding inflation and positive
renewal reversion from all sectors for the full financial year. This is notwithstanding high inflation, load
shedding, dysfunctional local municipalities, failing infrastructure and uncertainty surrounding the
national elections continue to negatively impact economic growth. The challenging operating
environment is expected to persist.
The Group remains committed to its strategic objective of transitioning towards a retail focused fund,
by disposing of non-core assets. Since the merger in January 2022, we have successfully concluded
disposals exceeding R1.3 billion, and this focus will continue throughout the remainder of the 2024
financial year. Further, since the merger, the Group has increased its shareholding in certain profitable
co-owned retail assets, with a further four co-owned retail assets identified in which the minority
shareholding will be acquired at accretive terms, aligning with the Group's strategic objectives.
Given the substantial progress made in implementing our stated strategy and optimising our portfolio,
distributable earnings per B share is expected to be at the upper end of the guidance range issued in
November 2023 of between 41.50 cents and 42.50 cents per share (September 2023: 41.29 cents per
share). Additionally, distribution per A share will increase by the lesser of 5% or the most recent
Consumer Price Index, as specified in the Company's memorandum of incorporation.
The Board has resolved to maintain the current dividend pay-out ratio of 100% of distributable earnings
as a dividend. The policy is reviewed on a bi-annual basis and any changes will be communicated to
shareholders before being implemented.
This forecast assumes that interest rates remain unchanged for the remainder of the financial year,
that there is no material deterioration in the current macroeconomic environment, that total grid
failure does not occur, that no major corporate and tenant failures will occur, that no civil unrest events
occur and that tenants will be able to absorb increases in municipal and utility costs. Forecast rental
income is based on contractual lease terms and anticipated market-related renewals. This forecast
further assumes that Dipula will continue to pay distributions in line with distributions for the previous
years, with no significant changes to their payout ratio.
This forecast is the responsibility of the Board and has not been reviewed or reported on by the
auditors.
Results announcement
This results announcement is the responsibility of the board of directors of the Company. This results
announcement is only a summary of the unaudited condensed consolidated interim financial results
for the 6 six months ended 31 March 2024 ("interim results") released on SENS, published on Fairvest's
website: https://fairvest.co.za/cmsAdmin/uploads/interim-results/interims-2024.pdf and on the JSE
website: https://senspdf.jse.co.za/documents/2024/jse/isse/FTAE/Mar2024.pdf and does not contain
the complete or full announcement details. Any investment decision by investors and shareholders
should be based on consideration of the interim results.
Executive Directors Registered office
DM Wilder (CEO) 3rd Floor, Upper building, 1 Sturdee Avenue,
BJ Kriel (CFO) Rosebank, Johannesburg, 2196
Non-Executive Directors Transfer secretaries
N Mkhize (Chairman)*, LW Andrag*, JSE Investor Services Proprietary Limited
ML Buya*#, JF du Toit*, FC Futwa*#,
NN Shange*, KR Nkuna*, JD Wiese*
* Independent non-executive. # Appointed 1 October 2023
All directors are South African.
Sponsor Company secretary
Java Capital Trustees and Sponsors FluidRock CoSec Proprietary Limited
Proprietary Limited
3 June 2024
Date: 03-06-2024 08:00:00
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 
