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Unaudited Condensed Consolidated Interim Financial Results and Cash Dividend Declaration
SA Corporate Real Estate Limited
(Incorporated in the Republic of South Africa)
(Registration number 2015/015578/06) Approved as a REIT by the JSE
Share code: SAC
ISIN code: ZAE000203238
("SA Corporate" or "the Company")
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2024 AND CASH DIVIDEND DECLARATION
Introduction
SA Corporate is a JSE-listed Real Estate Investment Trust ("REIT") and together with all its subsidiaries ("the Group") owns a focused portfolio of quality industrial, retail and residential buildings located primarily in the major metropolitan areas of South Africa with a secondary node in Zambia. As at 30 June 2024, the property portfolio consisted of 270 properties, with 1 703 049m2 of gross lettable area ("GLA"), valued at R17.9 billion, a 50% joint venture ("JV") interest in three Zambian entities, including a minority shareholding in Zambia's only listed property company, with the Group's share of properties valued at R1.8 billion.
Overview
Interim distributable income R338.4 million or 13.46 cps
Up 6.3% vs six months to 30 June 2023 (2023 H1: R318.2 million or 12.65 cps)
Total net property income ("NPI") of R734.5 million (2023 H1: R592.6 million)
Total like-for-like NPI increased by 4.8% to R543.7 million (2023 H1: R518.7 million)
Disposal pipeline contracted and still to transfer, and divestments transferred since January 2024 to 30 June 2024 of R224.7 million
Contracted for sale subsequent to 30 June 2024 of R530.0 million
Loan to value ("LTV") ratio of 41.9%* (31 December 2023: 41.9%*)
* Net debt LTV excluding derivatives, which if included, would be 41.7% (31 December 2023: 41.6%)
Traditional portfolio vacancies of 1.6% of GLA (31 December 2023: 2.0%)
Residential portfolio vacancies (% of total units)
Afhco 3.4% (31 December 2023: 4.2%)
Indluplace 4.5% (31 December 2023: 4.5%)
Total 4.0% (31 December 2023: 4.4%)
Salient features
The salient features of the Group's unaudited condensed consolidated interim financial results for the six months ended 30 June 2024, as compared to the six months ended June 2023, are set out below:
Revenue of R1.5 billion (2023 H1: R1.1 billion)
Operating profit of R736.3 million (2023 H1: R567.6 million)
Headline earnings per share of 14.34 cents (2023 H1 restated: 14.42 cents)
Basic earnings per share of 16.33 cents (2023 H1 restated: 16.78 cents)
Net asset value per share of 443 cents (31 December 2023: 439 cents)
Distribution declared 12.11 cps at 90% payout ratio (2023 H1: 11.39 cps at 90% payout ratio)
Distribution declaration and important dates
Notice is hereby given of the declaration of distribution number 18 in respect of the income distribution period 1 January 2024 to 30 June 2024. The distribution amounts to 12.11103 cps (June 2023: 11.38911 cps). The source of the distribution comprises net income from property rentals. Please refer to the Unaudited Condensed Consolidated Interim Statement of Comprehensive Income for further details. 2 514 732 095 of the Company's shares are in issue at the date of this distribution declaration and the Company's income tax reference number is 9179743191.
Last date to trade cum distribution Tuesday, 15 October 2024
Shares will trade ex-distribution Wednesday, 16 October 2024
Record date to participate in the distribution Friday, 18 October 2024
Payment of distribution Monday, 21 October 2024
Share certificates may not be dematerialised or rematerialised between Wednesday, 16 October 2024 and Friday, 18 October 2024, both days inclusive.
Tax implications
In accordance with the Company's REIT status, shareholders are advised that the distribution 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 distributions on the Company's shares will be deemed to be dividends, for South African tax purposes, in terms of section 25BB of the Income Tax Act. The distributions received by or accrued to South African tax residents must be included in the gross income of such shareholders and are not 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, with the effect that the distribution is taxable in the hands of the shareholder.
These distributions are, however, exempt from dividend withholding tax in the hands of South African tax resident shareholders, provided that the South African resident shareholders have provided the following forms to their Central Securities Depository Participants ("CSDP") or broker, as the case may be, in respect of uncertificated shares, or the transfer secretaries, in respect of certificated shares:
(a) a declaration that the distribution is exempt from dividends tax; and
(b) a written undertaking to inform the CSDP, broker or the transfer secretaries, as the case may be, should the circumstances affecting the exemption change or the beneficial owner ceases to be the beneficial owner, both in the form prescribed by the Commissioner for the South African Revenue Service.
The Company's shareholders are advised to contact the CSDP, broker or transfer secretaries, as the case may be, to arrange for the above-mentioned documents to be submitted prior to payment of the distribution, if such documents have not already been submitted.
Notice to non-resident shareholders
Distributions 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. Distributions received by a non-resident from a REIT are 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 9.68882 cents per SA Corporate 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 the CSDP or broker, as the case may be, in respect of uncertificated shares, or the transfer secretaries, 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 the CSDP, broker or the transfer secretaries, as the case may be, should the circumstances affecting the reduced rate change or the beneficial owner ceases 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 the CSDP, broker or the transfer secretaries, as the case may be, to arrange for the above-mentioned documents to be submitted prior to payment of the distribution if such documents have not already been submitted, if applicable.
Short-form notice
The contents of this short-form announcement are the responsibility of the board of directors of the Company. Shareholders are advised that this short-form announcement represents a brief summary of the information contained in the unaudited condensed consolidated interim financial statements, available on the JSE cloud link below:
https://senspdf.jse.co.za/documents/2024/jse/isse/SACE/Interim24.pdf
and on SA Corporate's website https://www.sacorporatefund.co.za. Any investment decisions by investors and/or shareholders should be based on a consideration of the unaudited condensed consolidated interim financial statements as a whole and shareholders are encouraged to review the unaudited condensed consolidated interim financial statements as directed above.
For a more comprehensive analysis of SA Corporate's results and outlook, please refer to https://www.sacorporatefund.co.za/
Johannesburg
12 September 2024
Sponsor: Nedbank Corporate and Investment Banking, a division of Nedbank Limited
DIRECTORATE AND STATUTORY INFORMATION
Registered office
GreenPark Corner, 16th Floor
Corner Lower Road and West Road South
Morningside
2196
Tel 010 020 2530
Registered auditors
PricewaterhouseCoopers Inc.
5 Silo Square
V&A Waterfront
Cape Town
8002
Transfer secretaries
Computershare Investor Services Proprietary Ltd
Rosebank Towers
15 Biermann Avenue
Rosebank
2196
Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
135 Rivonia Road
Sandton
2196
Directors
MA Moloto (Chairman)
OR Mosetlhi (Lead Independent Director)
TR Mackey (Chief Executive Officer)*
SY Moodley (Chief Financial Officer)*
N Ford-Hoon(Fok)
EM Hendricks
GJ Heron
SS Mafoyane
NNN Radebe (Chief Operating Officer)*
GZN Khumalo (resigned 19 April 2024)
SJ Mojalefa* (appointed 25 April 2024)
* Executive
Date: 12-09-2024 05:10:00
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