Focusing on Germany and the UK pays dividends for Redefine International

Posted On Thursday, 29 October 2015 23:37 Published by
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Redefine International CEO Mike Watters believes the refocusing of the group's strategy to invest only in Germany and the UK has made its 2015 financial year a success.

Mike Watters Redefine International

Redefine International CEO Mike Watters believes the refocusing of the group’s strategy to invest only in Europe’s largest economies, Germany and the UK, has made its 2015 financial year a success and laid a strong foundation for next year.

Mr Watters said his plan was for Redefine International to become a FTSE 250 company competing with companies such as JSE-listed Capital & Counties, which owns prime retail and residential assets, and Intu Properties, which has exposure to the best malls in the UK.

South African-based Redefine Properties owns 30.07% of Redefine International.

Redefine International’s earnings available for distribution increased 13.6% to £44.4m (R930m) in the year ended August, Mr Watters said. Its market capitalisation was recorded at £800m and its assets were worth £1bn, he said.

“Following a busy year which has been defined by a major refocusing of the business, we have announced a solid set of results, which show an increase in earnings and net asset value, as well as reduced leverage.”

Redefine International sold out of the rest of its investment in Australian company Cromwell Property Group and also its investments in Swiss property.

“Our continued disciplined investment approach, following a successful equity raise in March, meant that a large cash balance was held throughout the second half of the financial year causing a temporary cash drag on earnings available for distribution,” Mr Watters said.

“However, this cash, together with the proceeds of the Cromwell share sale, has now been deployed in the Aegon property transaction, and our confidence, given the quality of the enlarged portfolio and the outlook, is reflected in an increased dividend of 3.25p per share for the year.”

The Aegon transaction entailed the acquisition of a portfolio of mostly retail and office assets from Scottish insurance group Aegon for R9bn.

The company concluded a separate deal to acquire Banbury Cross Retail Park for R1.09bn.

Peter Clark, a portfolio manager at Investec Asset Management, said that even though the results fell slightly short of expectations, the prospects were positive in the long term.

“Overall the results were slightly below what the market was expecting mainly due to cash drag as the proceeds from the equity raise in the beginning of the year took longer to deploy than expected.

“We expect Redefine International will be able to continue to meet its strategy of delivering an attractive income yield to investors with inflation-hedging properties,” said Mr Clark.

source Business Day

Last modified on Friday, 30 October 2015 00:12

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