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Provisional Condensed Financial Results for the Year Ended 30 June 2019
Texton Property Fund Limited
Incorporated in the Republic of South Africa
Registration number: 2005/019302/06
A Real Estate Investment Trust, listed on the JSE Limited
JSE code: TEX
ISIN: ZAE000190542
("Texton" or "the Company")
Short form - Provisional condensed financial results
for the year ended 30 June 2019
Texton Property Fund is an internally asset managed Real Estate Investment Trust
("REIT") listed on the JSE Limited formed to invest directly in income-producing
properties that offer attractive income and capital appreciation. Texton aims to
be a geographical and sectorally diverse property fund focused on niche markets
in South Africa, and in the United Kingdom, in which it has a depth of
experience, knowledge and track record. Texton is governed by the Listings
Requirements of the JSE, the Companies Act, King IV and International
Financial Reporting Standards.
As reported in the half-year results, this financial year continues to be the
toughest in our Company's history and there was little improvement in the
six months to June 2019. The property markets across both of our diverse
geographies were heavily impacted by various macro-economic environmental
factors. In South Africa, the difficult economic climate has placed businesses
under increased pressure with more companies consolidating space and even closing
which has worsened the already unfavourable property fundamentals. It is a highly
competitive market distinguished by low demand and a general oversupply of
space.
In the United Kingdom, the GDP outlook for 2020 has been revised downwards
to 1,3% due to continued Brexit uncertainty and political upheaval. Inflation
forecasts have been revised upwards. The uncertainty regarding Brexit is
likely to further devalue the GBP and drive inflation upwards through higher
import costs.
Like-on-like portfolio held R4,154 billion down 13,2%
(June 2018: R4,785 billion)
Total portfolio value R4,400 billion down 18,6%
(June 2018: R5,403 billion)
Net asset value 607,89 cents per share down 7,2%
(June 2018: 655,15 cents
per share)
The South African portfolio was devalued by 18,5% on a like-for-like held
basis as a result of the economic erosion and the impact of negative rental
reversions. The year-on-year devaluation on the total portfolio amounts to
18,6%. The UK property portfolio value decreased by 2,8% on a like-for-like
basis. The industrial and office assets in the UK remained relatively stable,
with the downward revisions being concentrated in the retail sector.
Loan-to-value ratio 47,7% (June 2018: 42,7%) up 5,0%
Arrears 2,0% of billings down 2,5%
(June 2018: 4,5% of billings)
Debt expiry profile Weighted average unexpired term
1,4 years (June 2018: Weighted
average unexpired term 2,0 years) down 30,0%
The devaluation of the South African portfolio resulted in the, since rectified,
breach of loan-to-value covenants with Standard Bank and Investec. The covenant
breaches were condoned by the banks and the Standard Bank breach has been
rectified post year end.
Vacancies 9,2% (June 2018: 7,9%) up
Tenant retention 83,6% retained
Lease expiry profile 4,36 years WAULT (June 2018:
4,27 years) up 2,1%
However, rather than dwelling on factors over which we have no control, we
remain firmly focused on what we can manage. Texton improved collections,
reduced rental arrears and made significant progress in leasing, proactive
early renewals and tenant retention.
Gross property income R558,0 million down 4,0%
June 2018: R581,2 million)
Net property income R363,7 million down 12,8%
(June 2018: R416,9 million)
Gross property expense ratio 34,4% (June 2018: 29,6%) up 4,8%
The Board of Texton declares a final dividend of 35,19 (30 June 2018: 41,36)
cents per share. The total dividend for the year amounting to 71,37 cents
per share is 20,1% lower than the dividend for the year ended 30 June 2018
of 89,31 cents per share.
Dividend per share 71,37 cents per share down 20,1%
(June 2018: 89,31 cents
per share)
Earnings and diluted (153,96) cents per share down 361,5%
earning per share (June 2018: (33,40) cents
per share)
Headline and diluted headline 55,61 cents per share up 107,5%
earnings per share (June 2018: 26,80 cents
per share)
This short-form announcement is the responsibility of the directors and is only
a summary of the information in the full announcement is available at
https://senspdf.jse.co.za/documents/2019/JSE/ISSE/TEX/YE19.pdf and can be found
on the Company's website at www.texton.co.za. Copies of the full announcement
may also be requested at the Company's registered office at no charge during
office hours, Monday to Friday (08:00 to 17:00). Any investment decision should
be based on the full announcement.
MH Muller IF Pick
Chief Executive Officer Chief Financial Officer
19 September 2019
Johannesburg
Physical and registered address:
Block C, Investment Place, 10th Road, Hyde Park, 2196.
PO Box 653129, Benmore, 2010
Board of Directors:
M Golding (Non-executive Chairperson),
MH Muller* (Chief Executive Officer),
IF Pick* (Chief Financial Officer),
AJ Hannington (Independent Non-executive),
JR Macey (Lead Independent Non-executive),
S Thomas (Independent Non-executive)
* Executive director
Company Secretary:
Motif Capital Partners, 173 Oxford Road, Rosebank, 2196
Melrose Boulevard, Melrose Arch, 2193
Auditor:
SizweNtsalubaGobodo Grant Thornton Inc., 20 Morris Street East, Woodmead, 2191
Sponsor: Merchantec Capital, 13th Floor, Illovo Point,
68 Melville Road, Illovo. PO Box 41480, Craighall, 2024
Transfer secretary: Computershare Investor Services Proprietary Limited,
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
PO Box 61051, Marshalltown, 2107
Investor relations: Catchwords, Block B, 2 Davidson Street
Rynfield, Benoni, 1501
Date: 19/09/2019 07:12:00
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