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Group interim unaudited results and dividend distribution declaration for the six months ended 31 December 2024
HERIOT REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2017/167697/06)
(Approved as a REIT by the JSE)
JSE share code: HET ISIN: ZAE000246740
("Heriot" or "the Company" or "the Group")
SHORT-FORM ANNOUNCEMENT: GROUP INTERIM UNAUDITED RESULTS AND DIVIDEND
DISTRIBUTION DECLARATION FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
NATURE OF BUSINESS
Heriot is a property holding and investment company that is listed in the "Diversified REITs" sector on the
Alternative Exchange of the JSE Limited ("JSE"). The Group is primarily invested in retail and industrial
properties situated in areas with high growth potential. Heriot's primary objective is to grow and streamline its
asset base through the acquisition of high-quality properties, the redevelopment of existing properties and the
disposal of assets identified as non-core. Pursuant to its investment strategy, Heriot acquired 100% of Thibault
REIT Limited ("Thibault") on 28 June 2024 and increased its strategic interest in Safari Investments RSA
Limited ("Safari") to 59,2%.
KEY FINANCIAL HIGHLIGHTS
Unaudited for the Unaudited for the Change
6 months ended 6 months ended %
31 Dec 2024 31 Dec 2023
Distribution per share (cents) 56.84 49.87 14,0
Total assets (R'm) 12,980.77 9,662.51 34,3
Net asset value per share (cents) 1,896.21 1,577.55 20,2
Gross revenue (R'm) 836.58 596.62 40,2
Net profit after taxation (R'm) 720.44 310.00 132,4
Earnings per share (cents) 197.28 102.56 92,4
Headline earnings per share (cents) 51.86 51.06 1,6
FINANCIAL RESULTS
In a highly challenging economic environment, Heriot has delivered robust interim results, showcasing the
strength of its management team, investment strategies and a portfolio anchored by blue-chip national tenants
across its diversified fund. Staying true to its entrepreneurial ethos, Heriot continues pursuing investment
opportunities across its core focus property sectors, which include emerging market retail, industrial and
hospitality.
The Group achieved record distributable earnings of R181,453 million for the six months ended 31 December
2024 (the "reporting period"), representing a 42.5% increase compared to distributable earnings of R127,371
million for the comparable period in 2023. This remarkable growth was driven by:
• Acquisition of Thibault: On 28 June 2024, Heriot acquired Thibault through a share exchange
agreement. The inclusion of Thibault's statement of comprehensive income on a line-by-line basis
contributed R27,5 million to distributable earnings, and its 10% shareholding in Safari added a further
R8,9 million to distributable earnings for the reporting period;
• Proceeds from the disposal of non-current assets held for sale: The net proceeds of R8,1 million
from the sale of an investment property have been included in distributable earnings for the reporting
period;
• Non-IFRS® distributable earnings adjustment: Thibault's share of Safari's final dividend amounting
to R4,4 million for the period ended 30 June 2024, being pre-acquisition earnings of the Group, was
included in distributable earnings for the reporting period;
• Safari's financial performance: Safari reported a 13.3% increase in dividends per share ("DPS") for
the reporting period, enhancing the Group's distributable earnings;
• Repo rate reduction: The 75-basis-point reduction in the repo rate positively impacted the Group's
earnings, as the Group's debt is entirely linked to floating rates;
• Weighted average cost of debt ("WACD") reductions: Refinancing debt at favourable rates lowered
lending margins, further boosting distributable earnings. The WACD for the reporting period was
9.99% (2023: 10.23%);
• Aparthotel sector performance: Financial performance improved due to new developments coming
online, strategic upgrades to properties and outsourcing management to hotel operators;
• Industrial sector performance: Significantly improved from letting vacant space and increased rentals
on lease renewals; and
• Low vacancies: Group vacancies remained low at 1.5% at 31 December 2024 (2023: 1.7%).
The Group's continued effective cash management and strong cash flows support the payment of 100% of
distributable earnings as dividends. On this basis, the Company is declaring an interim dividend of 56.84 cents
per share for the six months ending 31 December 2024. This represents a 14.0% increase compared to distributable
earnings of 49.87 cents per share for the same period in 2023. DPS continues to be Heriot's key performance
metric.
Heriot's NAV per share increased by 20.2% from R15.78 as of 31 December 2023 to R18.96 as of 31 December
2024. The growth has been driven by:
• An increase in the value of the Group's property portfolio that is supported by positive rental escalations
on renewals and re-lets across the portfolio during the period; and
• A bargain purchase gain of R373,5 million was recognised through the statement of changes in equity
on the Thibault acquisition as of 30 June 2024.
As a result of increased property valuations, the Group's loan to value ratio decreased by 1.1% from 42.2% at 31
December 2023 to 41.1% at the reporting date. This remains comfortably below the Group covenant limit of 50%.
PROSPECTS
Heriot's results for the reporting period demonstrate the resilience of its portfolio, particularly the durability of its
emerging market retail and industrial properties. The current local and global macroeconomic conditions have
created difficult trading conditions for the Group. Still, developments over recent months have laid the foundation
for growth in the short to medium term. These include improving Eskom's energy availability, establishing the
Government of National Unity and the long-awaited interest rate-cutting cycle.
However, these developments remain subject to volatility and are influenced by various factors affecting their
stability and long-term success. The Group's core portfolio is well-positioned to navigate these uncertainties, and
on this basis, management is on track to deliver DPS growth of 10% to 15% for the year ending 30 June 2025.
The forecast in support of this guidance has been prepared using the following key assumptions:
• A 75bps interest rate cut within the 2025 financial year;
• Forecast property income will escalate at contractual rental escalations, and renewals will be concluded
at market-related rates;
• Adequate allowance has been made for vacancies and rent reversions; and
• No major corporate and tenant failures will occur.
This guidance has not been reviewed or reported on by the Company's auditor.
PAYMENT OF DIVIDEND
The board has declared an interim gross cash dividend of 56.83543 cents per share out of the Company's
distributable income for the 6 month period ended 31 December 2024.
The dividend is payable to Heriot shareholders in accordance with the timetable set out below:
2025
Declaration date Thursday, 27 March
Last date to trade cum dividend Monday, 14 April
Shares trade ex dividend Tuesday, 15 April
Record date Thursday, 17 April
Payment date Tuesday, 22 April
Share certificates may not be dematerialised or rematerialised between Tuesday, 15 April 2025 and Thursday,
17 April 2025, both days inclusive. The dividend will be transferred to dematerialised shareholders' Central
Securities Depository Participant ("CSDP") or broker accounts on Tuesday, 22 April 2025. Certificated
shareholders' dividend payments will be paid to certificated shareholders' bank accounts on or about Tuesday, 22
April 2025.
In accordance with Heriot'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 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 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 such shareholders provide 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, 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 distribution 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 shareholder. Assuming
dividend withholding tax will be withheld at a rate of 20%, the net dividend amount due to non-resident
shareholders is 45.46834 cents per 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,
as the case may be, in respect of uncertificated shares, or the Company, in respect of certificated shares:
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 the dividend: 319,261,982 (excluding 900,000 treasury shares)
Heriot's income tax reference number: 9541295185
Where the transfer secretaries do not have the banking details of any certificated shareholders, the cash dividend
will be held in trust by the transfer secretaries pending receipt of the relevant certificated shareholder's banking
details where after the cash dividend will be paid via electronic transfer into the personal bank accounts of
certificated shareholders.
ABOUT THIS ANNOUNCEMENT
This short-form announcement is the responsibility of the directors of Heriot and the contents were approved by
the board on 27 March 2025. This short-form announcement is only a summary of the full interim unaudited
consolidated financial statements for the six months ended 31 December 2024 ("Full Interims"), which are
available at https://senspdf.jse.co.za/documents/2025/JSE/ISSE/HETE/HY2025.pdf and on Heriot's website at
www.heriotreit.com. This announcement does not include full or complete details and any investment decisions
by investors and/or shareholders should be based on consideration of the Full Interims as a whole. The information
contained in this short-form announcement has not been audited or reviewed by the Company's external auditors.
By order of the board
Johannesburg
27 March 2025
COMPANY SECRETARY
CIS Company Secretaries Proprietary Limited
REGISTERED OFFICE
Suite 1, Ground Floor, 3 Melrose Boulevard, Melrose Arch, Johannesburg, 2196
PO Box 652737, Benmore, 2010
DIRECTORS
SB Herring (Chairperson)*, RL Herring (CEO), D Snoyman (CFO), A Mazwai*, SJ Blieden*†, R Lockhart-
Ross*†, GJ Heron*†.
*Non-executive †Independent
TRANSFER SECRETARIES
Computershare Investor Services Proprietary Limited
DESIGNATED ADVISOR
Valeo Capital, Unit G02 Skyfall Building, De Beers Ave, Paardevlei, 7130
Date: 27-03-2025 02:20:00
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