Safari Investments RSA Limited - interim results for the six months ended 30 September 2018

Posted On Friday, 23 November 2018 08:17 Published by
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JSE-listed REIT Safari Investments RSA Limited today posted strong results for the interim period ending 30 September 2018. 

 DIRK-ENGELBRECHT

The Company differentiates itself from other listed REITS by investing in quality income generating properties located in regional underdeveloped peri-urban locations close to transport hubs that attract consumers and retailers to their centres. 

Distributable income increased 36% to R88 million for the period and property revenue was up 7% to R126 million.

Newly appointed CEO, Dirk Engelbrecht, commented:

“Our focus on regional, underdeveloped locations has proven defensive, underpinned by strong demand for our centres as reflected in the low vacancy rate of 2%, and comparatively high trading densities across the portfolio.

“During the six months under review, we significantly improved the tenant mix with the introduction of Kit Kat Cash & Carry at our Mnandi centre, and Boxer superstore filling space previously occupied by Edgars at our Thabong centre in Sebokeng.

“This is the first Boxer Superstore in Johannesburg South and was exceptionally well received by the community.”

At the Denlyn centre in Mamelodi, McDonalds was secured and opened for trade November 2018. In addition, Woolworths will open its first Mamelodi store at Denlyn in the first quarter of 2019.

Engelbrecht elaborated that the weaker than expected performance of the Platz Am Meer shopping centre in Namibia, as well as the delay in the sale of the residential units at the same development in Swakopmund impacted distributions negatively.  “We have implemented remedial action for Platz Am Meer and expect to see a turnaround in the future,” he said.

Distribution per share was mainly diluted by the issue of 119 552 633 shares during the period at R7.60 per share. Antecedent dividends from the share issue were included in the calculation of distributable income per share for the 2018 interim and final distributions.

Taking the current economic climate in South Africa and Namibia into account, Engelbrecht said that “the board decided to no longer distribute from capital reserve, in order to ensure the long term sustainability of Safari and faster growth of distributable income per share”.

Management has forecast an increase on dividend per share of between 8-10% for the period ending 30 September 2019.  This forecast is based on current long-term lease agreement escalations and the current number of shares in issue. 

A gross cash interim dividend of 26cps has been approved and declared for the period ended 30 September 2018. 

''We have significant headroom for growth, with a loan to value of 17%. The management team and Board is committed to maximising the rental income streams with a proactive letting strategy focussed on national tenants.  We intend to minimise operating expenditure through the deployment of quality management within the portfolio,” Engelbrecht concluded.

The Group earlier announced the acquisition of Thornhill Shopping Centre in Polokwane, with effective control gained from 1 October 2018. Construction of Nkomo Village Shopping Centre is on schedule and commenced trading on 22 November 2018. The centre is anchored by Pick n Pay and Boxer Superstore with national tenants such as Mc Donalds, Builders Warehouse, Food Lovers Market, The Gym Company and Roots Butchery being introduced to the Atteridgeville community for the first time

Last modified on Friday, 23 November 2018 08:28

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