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Unaudited Condensed Consolidated Interim Results and Cash Dividend Declaration for the Six months to 31 August 2021
Tradehold Limited
(Registration number: 1970/009054/06)
Incorporated in the Republic of South Africa
JSE Ordinary Share code: TDH ISIN: ZAE000152658
JSE B Preference Share code: TDHBP ISIN: ZAE000253050
("Tradehold" or the "Group")
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS AND CASH DIVIDEND
DECLARATION FOR THE SIX MONTHS TO 31 AUGUST 2021
KEY INFORMATION
- Total assets: £825 million(28 February 2021: £808 million)
- Revenue: £39.6 million (31 August 2020: £34.5 million)
- Ordinary shareholders' equity: £232.2 million (28 February 2021:
£225.2 million)
- Net profit: £4.9 million (31 August 2020: loss £8.7 million)
- Headline earnings per share: 2.6 pence (31 August 2020: 0.5 pence)
- Tangible net asset value per share: 98 pence/R19.67 (28 February 2021:
94 pence/R19.75)
- Interim dividend: 30 cents per ordinary share (24 May 2021: 30 cents).
- Collins Group reported a net operating profit before tax of
R187.1 million, R27.5 million above budget. It succeeded in collecting
99% of all rentals and arrears despite the KwaZulu-Natal unrest.
- Moorgarth achieved a net profit of £1.9 million against a net loss
of £12.4 million at 31 August 2020.
- Boutique increased the occupancy level of its flexible office
accommodation from 67% at year-end to 85%, while boosting the number
of its workstations in Greater London to more than 5 100.
Tradehold Group
Tradehold's net assets are split across the United Kingdom in pound sterling
(39.5%), United States dollar assets in Africa (8.2%), and the balance in
South African rand (52.3%). In South Africa it owns 74.3% of the Collins
Property Group. In the UK it holds 100% of the Moorgarth Property Group,
including a 90% stake in Boutique (previously known as The Boutique
Workplace Company), a provider of flexible office accommodation in Greater
London.
Collins Group
The unrest in KwaZulu-Natal has again underlined the necessity of
diversifying the company's property portfolio, not only in terms of asset
class but also in terms of geographical spread. A start was made in this
direction with Collins' Austrian acquisition at the end of the 2021
financial year. Further diversification is being pursued by management.
As part of this rebalancing process, Collins Group has continued to dispose
of mainly smaller, non-core properties.
A total of 21 smaller properties in the portfolio were impacted by the riots
in July. Fortunately, none of the company's large industrial parks and
distribution centres which constitute the bulk of the portfolio, saw any
damage or looting, thanks to hands-on management and the deployment of
specialised security.
Despite this major upheaval, the group delivered an operating profit before
tax of R187.1 million, by collecting 99% of all rentals and arrears. This
was R27.5 million above budget.
The company's ability to weather the vicissitudes brought on by the pandemic
is largely due to the long-term contracts - still with a weighted average
expiry date of more than six years - with some of South Africa's major
companies and conglomerates.
Moorgarth
The UK market opened fully in June when all restrictions on leisure
activities were lifted. This resulted in a significant increase in footfall
in shopping centres and consequently in much improved trading performances
by certain of the company's retail and leisure tenants.
Moorgarth managed to increase rent recoveries to over 90%, substantially
above the market average. Consequently, Moorgarth could meet all its
operating costs and all external debt requirements from operating income.
With shopping centres having shown themselves vulnerable to changes in
global retail trends as well as anti-Covid restrictions imposed by
government, Moorgarth has continued reducing its exposure to retail, now
constituting 37% by value of the total portfolio. The balance comprises
mostly commercial properties some which have been bought and equipped for
Boutique.
Negotiations to sell the group's major co-owned shopping centre in Reading
near London is ongoing, with strong interest being shown from several
quarters. A deal is expected to be concluded in the second half of the year.
Moorgarth achieved a net profit of £1.9 million against a net loss of
£12.4 million at 31 August 2020.
Boutique
Boutique provides flexible office accommodation in 29 buildings in Greater
London. Together they offer some 5 100 individual workstations in a modern
environment adapted to the needs of individual clients.
Boutique started the new financial year with an occupancy rate of 67%
compared to 92% at the start of the pandemic. Thanks to intensive sales
activity, occupancy has recovered to 85%. Management now expects the
business to be trading profitably on a monthly basis by the end of the
financial year.
The increase in the number of lettings was also boosted by a steadily
recovering market which is marked by a substantial change in how tenants are
using space in the light of the new work-from-home culture. This coincides
with a recent Property Week survey in which 80% of those questioned said
face-to-face interaction with colleagues was the most important reason for
returning to the office.
In the period under review the company remained cash positive as it has
throughout the pandemic, and it was able to meet all debt obligations
without any additional borrowing.
OUTLOOK
The major markets in which Tradehold operates still face considerable
uncertainty. In recent weeks the UK has been plagued by shortages of crucial
commodities and interruptions in the supply chain, while in South Africa the
economy is still staggering under the loss suffered during the July riots.
The UK's economy is showing the strongest recovery of all the G7 nations
while the IMF recently increased its growth projection for South Africa's
economy to 5% for the year. In addition, all three of the group's major
businesses are solid, well-established entities with experienced and highly
adaptable management who have learnt over time how to operate successfully
under the remaining Covid-restrictions.
We believe Boutique in particular finds itself in an excellent position to
benefit from changing work cultures.
ORDINARY SHARE CASH DIVIDEND
The board of directors of Tradehold (the "Board") resolved to declare a
gross cash dividend of 30 cents per ordinary share on 15 November 2021 -
Tradehold's second interim dividend to date. The income used for this
purpose is Tradehold's share of the dividend Collins Group declares every
six months in terms of the agreement with its minority shareholders, as well
as operating cash generated by its United Kingdom and Mozambique operations.
The dividend will reduce Tradehold's stated capital.
The distribution constitutes a foreign dividend as defined in section 1 of
the South African Income Tax Act ("ITA") and is a dividend for purposes of
dividends tax ("DT"), since the shares are listed on the JSE Limited
("JSE").
An exemption from DT is provided for in the ITA in respect of foreign
dividends paid to a South African company and to a non-resident to the
extent that it is paid in respect of listed shares, provided certain
administrative procedures are complied with.
The ITA further provides for an exemption from income tax in respect of
foreign dividends received or accrued in respect of listed shares.
In terms of the ITA, DT of 20% has been withheld in the case of those
shareholders who are not exempt from it. They will therefore receive a net
dividend of 24 cents per ordinary share.
Tradehold has 261 346 570 ordinary shares in issue. Its income tax reference
number is 9725/126/71/9.
The salient dates for the dividend are as follows:
Declaration date Monday, 15 November 2021
Last date to trade cum dividend Tuesday, 30 November 2021
Date trading commences ex dividend Wednesday, 1 December 2021
Record date Friday, 3 December 2021
Date of payment to shareholders Monday, 6 December 2021
Share certificates may not be dematerialised or rematerialised between
Wednesday, 1 December 2021, and Friday, 3 December 2021, both days included.
HRW Troskie KL Nordier
Acting Chairman Director
Malta
15 November 2021
FULL ANNOUNCEMENT
The contents of this announcement is the responsibility of the directors of
Tradehold. The announcement is only a summary of the information contained
in the complete unaudited condensed consolidated interim results for the six
months ended 31 August 2021 ("Full Announcement"). Any investment decisions
by investors and shareholders should be based on consideration of the
Full Announcement published on SENS on Monday, 15 November 2021, and which
is available at the following link:
https://senspdf.jse.co.za/documents/2021/jse/isse/tdh/Int2021.pdf
and on Tradehold's website at www.tradehold.co.za. Copies of the full
announcement are available for inspection and may be requested at no charge
from Tradehold's registered office at Leinster Hall, 7 Weltevreden Street,
Gardens 8005, or from that of its sponsor, Questco Corporate Advisory (Pty)
Ltd, Ground Floor, Block C, Investment Place, 10th Road, Hyde Park, 2196 at
no charge, from Monday to Friday during office hours.
DIRECTORS AND ADMINISTRATION
Executive directors: TA Vaughan, FH Esterhuyse, KL Nordier
Non-executive directors: CH Wiese (alternate JD Wiese), HRW Troskie,
MJ Roberts, KR Collins, LL Porter, PJ Roelofse
Independent non-executive directors: HRW Troskie, MJ Roberts, LL Porter
Company secretary: PJ Janse van Rensburg
Transfer secretary: Computershare Investor Services (Pty) Ltd
Sponsor: Questco Corporate Advisory (Pty) Ltd
Date: 15-11-2021 01:30:00
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