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Condensed unaudited consolidated results for the six months ended 31 December 2020 and dividend declaration
FAIRVEST PROPERTY HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1998/005011/06)
Share code: FVT
ISIN: ZAE000203808
(Approved as a REIT by the JSE)
("Fairvest" or "the Company")
CONDENSED UNAUDITED CONSOLIDATED RESULTS FOR THE SIX MONTHS ENDED
31 DECEMBER 2020 AND DIVIDEND DECLARATION
1. HIGHLIGHTS
- Distribution for the period is 10.59000 cents per share
- Loan-to-value ratio decreased to 32.2%
- Arrears reduced to 3.1% of revenue
- Vacancies reduced to 3.8% of total lettable area
- Interest cover high at 3.3 times
- Like-for-like property portfolio increased by 3.4% valued at R3.43 billion
2. PROFILE
Fairvest Property Holdings Limited is a property investment holding company and Real Estate Investment
Trust ("REIT"), with a unique focus on retail assets weighted toward non-metropolitan and rural shopping
centres, as well as convenience and community shopping centres servicing the lower-LSM market, in
high-growth nodes close to commuter networks. The Fairvest property portfolio consists of 43 properties
with 250 911 m2 of lettable area, valued at R3.425 billion.
3. SALIENT FEATURES
Dividend per share for the year increased by 7.2% compared to the six months to 30 June 2020,
however decreased by 5.1% to 10.59000 cents per share, from 11.15500 cents per share in the prior
corresponding period.
The net asset value per share increased by 3.7% to 229.32 cents per share, from 221.18 cents per share
as at 30 June 2020.
Revenue increased by 2.3% to R274.2 million, from R267.9 million in the prior corresponding period.
Headline earnings per share decreased by 0.4% to 10.84 cents per share, from 10.88 cents per share in
the prior corresponding period.
Earnings per share increased by 20.0% to 17.84 cents per share, from 14.87 cents per share in the prior
corresponding period.
4. PROSPECTS
The lasting impact of the COVID-19 pandemic on the local economy remains uncertain. While the vaccine
rollout in South Africa is slow to gain traction, we expect the infection waves to continue, with trading
restrictions for certain tenants a possibility. Fairvest remains well positioned, with a clearly focused strategy
of mainly investing in grocery anchored assets, servicing non-metropolitan and lower-LSM markets. These
assets proved more resilient during the COVID-19 pandemic with the recovery being quicker than anticipated,
without significant increases in vacancies.
The balance sheet remains conservative, with gearing levels at 32.2% with R222.2 million of undrawn debt
facilities. The focus areas remain to maintain viable tenancies and letting of vacancies, with a strong focus
to reduce arrears even further.
In September 2020 Fairvest's board communicated the expected distribution for the 2021 financial year to
be at least 21.038 cents per share. This was based on very conservative assumptions at the time and very
prudent forecasting. Even though we expect consumer spending to be under pressure with a level of
uncertainty regarding the vaccine rollout, given the performance for the past six months the board expects
the distribution per share for the full 2021 financial year to be between 0% and 2% higher than the previous
year.
This forecast assumes no material deterioration in the macroeconomic environment relative to current levels,
that no major corporate and tenant failures will occur, that tenants will be able to absorb increases in
municipal and utility costs, that no further significant trading restrictions are implemented by government
and no further pandemic outbreaks similar to COVID-19. Forecast rental income is based on contractual
lease terms and anticipated market-related renewals. This forecast is the responsibility of the board of
directors of Fairvest and has not been reviewed or reported on by the auditors.
The board has again resolved to maintain the current dividend pay-out ratio of 100% of distributable
earnings as a dividend. The policy is reviewed on a bi-annual basis and any changes will be communicated
to shareholders at least 12 months before any changes are implemented.
5. DIVIDEND WITH ELECTION TO REINVEST
The board has approved and declared an interim gross dividend of 10.59000 cents per share for the
six-month period ended 31 December 2020, payable to shareholders registered as such at the close of
business on Friday, 9 April 2021. Shareholders will be entitled, in respect of all or part of their shareholdings,
to elect to reinvest the cash dividend of 10.59000 cents per share, in return for new Fairvest ordinary shares
("Reinvestment Alternative"), failing which they will receive the cash dividend.
Further details regarding the dividend and Reinvestment Alternative, including the tax treatment and a
detailed timetable, will be included in a separate SENS announcement, to be released today, 4 March 2021.
In accordance with Fairvest'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, as amended ("Income Tax Act"). The dividends on the shares will be deemed to be taxable
dividends for South African tax purposes in terms of section 25BB of the Income Tax Act.
6. SHORT-FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the Fairvest board of directors. Shareholders are
advised that this short-form announcement represents only a summary of the information in the full
announcement ("Full Announcement") and does not contain the full or complete details. The Full
Announcement can be found at:
https://senspdf.jse.co.za/documents/2021/JSE/ISSE/FVT/DEC-20.pdf
A copy of the Full Announcement is also available on the Company's website
https://fairvest.co.za/news/results/37 and may also be requested in person, at the Company's registered
office or the offices of the Sponsor, at no charge, during office hours.
Any investment decisions by investors and/or shareholders should be based on a consideration of the
Full Announcement, as a whole.
Cape Town
4 March 2021
Sponsor
PSG Capital
Date: 04-03-2021 07:15:00
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