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Short-Form Announcement: Unaudited Interim Results And Dividend Declaration For The Six Months Ended 31 August 2023
SPEAR REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2015/407237/06)
Share code: SEA
ISIN: ZAE000228995
LEI: 378900F76170CCB33C50
Approved as a REIT by the JSE
("Spear" or "the Company")
SHORT-FORM ANNOUNCEMENT: UNAUDITED INTERIM RESULTS AND DIVIDEND
DECLARATION FOR THE SIX MONTHS ENDED 31 AUGUST 2023
1. SALIENT FEATURES
Distributable income per share ("DIPS") decreased by 1.19% to 40.77 cents per share,
from 41.26 cents per share in the prior corresponding period.
Distribution per share ("DPS") increased by 3.21% to 38.33 cents per share (based on a
94% pay-out ratio), from 37.14 cents per share in the prior corresponding period (based
on a 90% pay-out ratio).
Interim collections of 98.36% vs billings as measured at 06 October 2023.
Management has successfully renewed/re-let 83 173 square metres at a positive
reversion of 3.57%.
Portfolio occupancy rate of 94.19% as at 31 August 2023 and 100% Western Cape based.
Investment property value increased by 5.85% to R4.46 billion, from R4.22 billion reported
as at 28 February 2023.
Loan-to-Value of 39.58%, increasing from 36.30% reported as at 28 February 2023.
Interest cover of 2.36 times, compared to 2.54 times in the prior corresponding period and
2.51 times as at 28 February 2023.
Revenue increased by 0.06% to R294.2 million, from R294.0 million in the prior
corresponding period, while revenue (excluding smoothing) decreased by 0.41% to
R288.6 million, from R289.7 million in the prior corresponding period.
Headline earnings per share increased by 3.91% to 40.08 cents per share, from
38.57 cents per share in the prior corresponding period.
Basic earnings per share increased by 26.08% to 50.72 cents per share, from 40.23 cents
per share in the prior corresponding period.
2. KEY FINANCIAL HIGHLIGHTS
Unaudited six Unaudited six Change %
months ended months ended
31 August 2023 31 August 2022
Revenue excluding smoothing 288,612 289,789 (0.41)
(R'000)
Distributable earnings (R'000) 90,991 96,001 (5.22)
Basic earnings per share 50.72 40.23 26.08
(cents)
Headline earnings per share 40.08 38.57 3.91
(cents)
Distributable income per share 40.77 41.26 (1.19)
(cents)
Distribution per share (cents) 38.33 37.14 3.21
Pay-out ratio 94% 90% N/A
Net asset value per share 1,163 1,136 2.38
(cents)
3. DIVIDEND DECLARATION
The directors of the Company resolved to declare a gross interim dividend of
38.32543 cents per share from income reserves in respect of the six months ended
31 August 2023. The dividend amount, net of South African dividend tax of 20%, is
30.66034 cents per share for those shareholders who are not exempt from dividend
withholding tax or are not entitled to a reduced rate in terms of the applicable double-tax
agreement. The number of ordinary shares in issue at the declaration date is 244 846 390
and the income tax number of the Company is 9068437236.
The salient dates of the dividend declaration are:
Declaration date Tuesday, 24 October 2023
Last day to trade cum dividend Tuesday, 14 November 2023
Trading ex-dividend commences Wednesday, 15 November 2023
Record date Friday, 17 November 2023
Date of payment Monday, 20 November 2023
Share certificates may not be dematerialised or rematerialised between Wednesday,
15 November 2023 and Friday, 17 November 2023, both days inclusive.
In respect of dematerialised shareholders, the distributions will be transferred to the
Central Securities Depository Participant ("CSDP") or broker accounts on Monday,
20 November 2023. Certified shareholders' distribution payments will be paid to certified
shareholders bank accounts on Monday, 20 November 2023.
Tax implications
As Spear is a REIT, the distribution meets the definition of a 'qualifying distribution' for the
purposes of section 25BB of the Income Tax Act, No. 58 of 1962 ("Income Tax Act").
Qualifying distributions received by South African tax residents will form part of their gross
income in terms of section 10(1)(k)(i)(aa) of the Income Tax Act. Consequently, these
distributions are treated as income in the hands of the shareholders and are not subject
to dividends withholding tax. The exemption from dividends withholding tax is not
applicable to non-resident shareholders, but they may qualify for relief under a tax treaty.
South African tax residents
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 exception, contained in paragraph (aa) of
section 10(1)(k)(i) of the Income Tax Act, because it is a dividend distributed by a REIT.
The dividend is exempt from dividend withholding tax in the hands of South African tax
resident shareholders, provided that the South African resident shareholders provide the
following forms to the CSDP or broker in respect of uncertificated shares, or to the
company, in respect of certificated shares:
a) a declaration that the dividend is exempt from dividend 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 above-mentioned documents to be submitted prior to payment of the dividend, if such
documents have not already been submitted.
Non-residents shareholders
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. It should
be noted that up to 31 December 2013, dividends received by non-residents from a REIT
were not subject to dividend withholding tax. Since 1 January 2014, any dividend 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
concerned. Assuming dividend withholding tax will be withheld at a rate of 20%, the net
dividend amount due to non-resident shareholders is 30.66034 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 form to their CSDP or broker 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 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 company to
arrange for the above-mentioned documents to be submitted prior to payment of the
dividend, if such documents have not already been submitted.
Holders of uncertificated shares must ensure that they have verified their residence status
with their CSDP or broker. Holders of certificated shares will be asked to complete a
declaration to the company.
4. SHORT-FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the directors of the Company. It
contains only a summary of the information in the full announcement ("Full
Announcement") and does not contain full or complete details. The Full Announcement
can be found at:
https://senspdf.jse.co.za/documents/2023/JSE/ISSE/SEAE/SEAHY24.pdf
A copy of the Full Announcement is also available for viewing on the Company's website
at https://spearprop.co.za/pdf/financial-results/2024/SEAHY24.pdf
Any investment decisions by investors and/or shareholders should be based on
consideration of the Full Announcement, as a whole.
The Company has based this short-form on information extracted from the consolidated
interim financial results of Spear for the six months ended 31 August 2023, which have
not been reviewed or audited by the Company's auditors.
5. RESULTS PRESENTATION
Shareholders are invited to view Spear's interim results presentation to be broadcasted
on YouTube at 11h00 SAST today, 24 October 2023.
Presentation details:
- View and listen mode;
- Link: https://youtube.com/live/ilL6nW2w9gs?feature=share;
- Presentation slides will be made available on Spear's website shortly before the
broadcast of the presentation under investor communication / presentations, at the
following link: https://spearprop.co.za/investor-communications/presentations/
- Questions may be e-mailed during the presentation to: info@spearprop.co.za
Cape Town
24 October 2023
Sponsor
PSG Capital
Date: 24-10-2023 07:05:00
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