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Consolidated audited results for the year ended 30 June 2024, cash dividend and outlook
HYPROP INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/005284/06)
JSE share code: HYP ISIN: ZAE000190724
JSE bond issuer code: HYPI
(Approved as a REIT by the JSE)
("Hyprop" or "the Company" or "the Group")
CONSOLIDATED AUDITED RESULTS
for the year ended 30 June 2024 ("FY2024")
cash dividend and outlook
www.hyprop.co.za
Hyprop exceeds guidance, delivers on strategic priorities and set for future growth
Headlines
Distributable income outperforms guidance
- Strong operational performance by the South Africa ("SA") and Eastern Europe ("EE") portfolios
positively impacted the distributable income per share, ahead of the previous guidance
- Distributable income of R1.41 billion in FY2024 and 370.4 cents per share
- Final dividend of 280 cents per share declared for FY2024 in line with the dividend policy
Step closer to Sub-Saharan Africa ("SSA") exit
Binding sale agreements signed in August 2024 for the entire SSA portfolio, with limited number
of CPs outstanding
Balance sheet strength supported by strong liquidity position
- LTV ratio stable at 36.4% in June 2024 despite the debt funded acquisition of Table Bay Mall
- Strong liquidity position with R803 million of cash and R2 billion of available bank facilities
- Euro30 million (R600 million) reduction in euro borrowings in line with debt amortisation/
reduction strategy
- R500 million new capital raised through the FY2023 DRIP
- Contraction of borrowing margins on new and refinanced facilities
- 80% of the Group interest rate exposure is hedged
Repositioning strategy paying off
SA portfolio
- Overall reversion rate significantly improved to 5.8%
- Tenants' turnover grew by 5.1%
- Trading density and foot count continued to improve
- Low retail vacancy at 1.8%
EE portfolio
- Tenants' turnover increased by 10%
- Trading density grew by 8.9%
- Retail vacancies improved to an impressive 0.1%
ESG initiatives on track
- 33% reduction in electricity purchased from councils/
Eskom and 12% reduction in water consumption since
June 2019
- The Hyprop Foundation and other CSI initiatives
contributed a total of R4.7 million towards various
projects and initiatives
Audited Audited
June 2024 June 2023 % change
Net operating income (R'000) 1 304 590 1 229 170 6.1%
Headline earnings per share (cents) 299.5 393.9 (24.0%)
Basic earnings per share (cents) 274.3 431.9 (36.5%)
Distributable income per share (cents) 370.4 405.2 (8.6%)
Dividend per share (cents) 280.00000 299.29970 (6.4%)
Net asset value per share (Rands) 60.32 63.39 (4.8%)
Dividend policy
Our dividend policy as previously communicated
remains unchanged:
- payment of an interim dividend equivalent to 90%
of the distributable income from the SA portfolio;
and
- payment of a final dividend on finalisation of the
Group's annual audited results, so that the total
distribution for the financial year (including the
interim dividend) is equivalent to 75% of the
Group's distributable income from the SA and
EE portfolios.
The balance of the distributable income will be
retained to manage borrowings and fund capital
expenditure in the normal course.
The interim dividend for FY2024 was held over
due to risks identified at the time of publishing our
interim results. Several of these risks have been
mitigated/reduced, or will be reduced through the
sale of the SSA portfolio to Lango. The Board has
therefore resolved to declare the full dividend of
280 cents per share (R1.065 billion in aggregate)
for the year ended 30 June 2024, in line with the
dividend policy.
Dividend declaration and settlement
The Board has approved and notice is hereby given of a final dividend of 280.00000 cents per share for
the year ended 30 June 2024.
The dividend is payable to Hyprop shareholders in accordance with the timetable set out below:
Last date to trade cum dividend Tuesday, 8 October 2024
Shares trade ex dividend Wednesday, 9 October 2024
Record date Friday, 11 October 2024
Payment date Monday, 14 October 2024
The above dates and times are subject to change. Any changes will be released on SENS.
Share certificates may not be dematerialised or rematerialised between Wednesday, 9 October 2024 and
Friday, 11 October 2024, both days inclusive.
In respect of dematerialised shareholders, the dividend will be transferred to the Central Securities
Depository Participant ("CSDP") accounts/broker accounts on Monday, 14 October 2024. Certificated
shareholders' dividend payments will be posted on or about Monday, 14 October 2024.
Ordinary shares of no par value in issue at 30 June 2024: 380 399 133
Income tax reference number of Hyprop Investments Limited: 94205177715
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 dividends on the shares
will be taxable dividends for South African tax purposes in terms of section 25BB of the Income Tax Act.
Tax implications for SA resident
shareholders
Dividends received by or accrued to SA 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 section 10(1)(k)(i)(aa) of
the Income Tax Act because they are dividends
distributed by a REIT. These dividends are, however,
exempt from dividend withholding tax (dividend tax)
in the hands of SA resident shareholders, provided
that the SA resident shareholders have provided to
the CSDP or broker, as the case may be, in respect
of uncertificated shares, or the company, in respect
of certificated shares, a DTD(EX) form (dividend
tax: declaration and undertaking to be made by the
beneficial owner of a share) to prove their status
as SA residents. If resident shareholders have not
submitted the above-mentioned documentation
to confirm their status as SA residents, they are
advised to contact their CSDP or broker, as the
case may be, to arrange for the documents to be
submitted before the dividend payment.
Tax implications for non-resident
shareholders
Dividends received by non-resident shareholders
from a REIT 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 section 10(1)(k) of the Income
Tax Act. Any dividend received by a non-resident
from a REIT is subject to dividend tax at 20%,
unless the rate is reduced in terms of any applicable
agreement for the avoidance of double taxation
(DTA) between SA and the country of residence of
the non-resident shareholder. Assuming dividend
tax will be withheld at a rate of 20%, the net amount
due to non-resident shareholders is 224 cents per
share. A reduced dividend withholding tax 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 the DTA;
- A written undertaking to inform the 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 of the South African
Revenue Service.
If applicable, non-resident shareholders are advised
to contact the CSDP, broker or the company to
arrange for the abovementioned documents to be
submitted before the dividend payment, if such
documents have not already been submitted.
Outlook and prospects
The Group's performance demonstrates its
resilience, despite the macroeconomic challenges
it has faced, including high unemployment and
constrained disposable income in South Africa, as
well as persistently high interest rates, globally.
In South Africa, the sentiment has improved with
the newly constituted Government of National Unity
("GNU"). The more stable electricity supply has
also had a positive impact on business confidence,
retailers and consumers.
On a global level, markets are expecting interest rate
cuts in the US to commence by the fourth quarter of
the 2024 calendar year. This should encourage the
South African Reserve Bank to cut rates and provide
some relief to consumers.
Hyprop's strategy is unchanged, and we will
continue pursuing the following six strategic
initiatives:
1. Driving the implementation of sustainable
solutions to reduce the impact of the
infrastructure challenges we face in South Africa
2. Repositioning the SA and EE portfolios to
maintain their dominance and retain and grow
market share
3. Reviewing the portfolios annually to evaluate the
case for recycling of assets and to consider new
growth opportunities
4. Remain focused on exiting SSA and executing the
binding sale agreement
5. Ensuring our balance sheet is robust
6. Developing non-tangible assets aligned to our
tangible assets and/or the property sector.
Capital will continue to be allocated in accordance
with the Group's capital expenditure framework
which prioritises projects to ensure the sustainability
of our centres, projects in favoured jurisdictions (the
Western Cape in SA and Eastern Europe) and yield
enhancing projects (solar plants, tenant installation
allowances and redevelopment projects).
Discernible green shoots in the global and domestic
economies, combined with Hyprop's sustainable
business model, strong balance sheet and prudent
capital management, continuous investment in
human capital, and environmental initiatives, should
position the Group to deliver further growth and
value for all our stakeholders over the long term.
The Group's outlook is positive, despite the
difficult global economic environment and unique
challenges in each of the regions in which we
operate. We are optimistic that the peak of inflation
and interest rates is near, however the Group's
financial performance will still be negatively
impacted in the short term by high interest costs.
In the light of the above, Hyprop expects an increase
in distributable income per share for the year
ending 30 June 2025 of approximately 4% to 7%
based on the following key assumptions:
- Forecast investment property income is based
on contractual rental escalations, and market-
related renewals;
- Appropriate allowances for vacancies and rent
reversions have been incorporated;
- Interest costs are expected to remain elevated
until the last quarter of 2024 and as the historic
interest rate hedges mature;
- Maturing borrowings are refinanced at prevailing
interest rates and margins;
- No further deterioration in the SA economy or
loadshedding;
- No major economic, socio-political or other
regional/global disruptions occur;
- No major corporate and tenant failures will occur;
- No corporate transactions occur, other than
the disposal of the SSA portfolio before
31 December 2024;
- Exchange rates (which have not been hedged)
remain in line with those for FY2024 and no
material foreign exchange losses are incurred.
Shareholders should note that the guidance above
is subject to change, certain assumptions may not
materialise, plans may change, and unanticipated
events and circumstances may affect the Group
strategy or the actions it takes.
The guidance has not been reviewed or reported on
by the Company's auditors.
17 September 2024
This announcement is the responsibility of the directors and is only a summary of the information contained in the audited consolidated annual financial
statements for the year ended 30 June 2024 ("2024 AFS") and does not include full or complete details. Any investment decisions by investors and/or
shareholders should be based on the 2024 AFS. The 2024 AFS including the audit opinion of the external auditor, KPMG Inc, which sets out the key audit
matters and the basis for its unmodified opinion, are available on the JSE website at https://senspdf.jse.co.za/documents/2024/jse/isse/HYPE/FY2024.pdf
and on the Company website at https://www.hyprop.co.za/results/annuals-2024/pdf/financial-statements.pdf.
Copies of the 2024 AFS may also be requested by emailing Boitumelo Nkambule at boitumelo@hyprop.co.za or the Company's registered office.
Hyprop's summarised consolidated audited results for the year ended 30 June 2024 which includes directors' commentary have been published on the
Company's website at https://www.hyprop.co.za/results/annuals-2024/pdf/booklet.pdf
Corporate information
Directors S Noussis (Chairman)*^, MC Wilken (CEO)~, BC Till (CFO)~, AW Nauta (CIO)~, AA Dallamore* , L Dotwana*^, KM Ellerine*,
RJD Inskip*^, MRI Isaacs*^, Z Jasper*^, TV Mokgatlha*^, BS Mzobe*^
~Executive | *Non-executive | ^Independent
Registered office Second Floor, Cradock Heights, 21 Cradock Avenue, Rosebank, 2196 Transfer secretaries Computershare Investor Services Proprietary Limited,
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 Company secretary Fundiswa Nkosi Sponsor Java Capital, 6th Floor, 1 Park Lane, Wierda Valley, Sandton,
2196 Investor relations Boitumelo Nkambule e. boitumelo@hyprop.co.za
Date: 17-09-2024 07:30:00
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