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Hyprop’s response to the Covid-19 virus, update on the dividend payment and the dividend reinvestment alternative
HYPROP INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/005284/06)
JSE share code: HYP ISIN: ZAE000190724
JSE bond issuer code: HYPI
(Approved as a REIT by the JSE)
(“Hyprop” or “the Company”)
HYPROP’S RESPONSE TO THE COVID-19 VIRUS, AND UPDATE ON THE DIVIDEND PAYMENT AND THE DIVIDEND REINVESTMENT
ALTERNATIVE (“DRIP”)
The last two weeks have been characterised by the global spread of the Covid-19 virus (“Covid-19”), with
financial markets collapsing as governments and businesses struggle to find ways to deal with the pandemic.
Hyprop supports the actions taken to curb the spread of Covid-19 by the governments of the countries in which
it operates.
In a steady-state operating environment the Company is in a strong financial position, with a see-through LTV
of 34.2% (as measured by the majority of the Company’s lender banks) and an interest cover ratio of 3.8 times
(as reported in Hyprop’s Condensed Consolidated results for the six months ended 31 December 2019). The
developing pandemic will test our financial and operational capabilities and we are working hard to safeguard
the Company.
RESPONSE TO THE COVID-19 VIRUS
Under the supervision of Hyprop’s Risk Committee we have established Covid-19 task teams covering our
South African, Eastern European and sub-Saharan Africa (excluding South Africa) operations. The teams
are implementing the relevant guidelines, protocols and preventative measures recommended by the World
Health Organization, local health authorities and governments.
The health and safety of our staff, tenants and customers is our top priority. We are working with all service
providers to maintain the highest standards of safety and hygiene across our malls in order to safeguard
against the potential transmission of Covid-19. Precautionary measures implemented include enhanced
cleaning procedures as well as hygiene protocols. We are installing hand sanitisers at mall entrances,
customer care kiosks, restrooms, food courts and other high traffic areas. Cleaning and disinfecting
protocols have been enhanced, with particular attention being paid to high touch zones, public contact
points, back of house and delivery areas. All tenants are being encouraged to implement precautionary
measures relevant to their stores and personnel, as we are doing for our own staff through the provision of
masks and hand sanitisers across the Company, by encouraging staff to work from home where possible,
and accommodating staff who need to look after children and other vulnerable family members.
Hyprop’s South African malls remain open for business, however, there has been a decline in footfall at our
malls following the address by President Ramaphosa on Sunday, 15 March 2020, outlining the various
measures to limit the spread of the virus.
On Friday, 13 March 2020 the Bulgarian government closed all shopping centres until 13 April 2020,
impacting The Mall of Sofia. The governments of Montenegro, Macedonia and Croatia have since declared
states of emergency and have ordered the closure of shopping malls, impacting Delta City, Podgorica,
Skopje City Mall, City Center One East and City Center One West. The closures in Montenegro and
Macedonia are both for 14 days and in Croatia for 30 days. Supermarkets and pharmacies are the only stores
allowed to trade in the malls. As a result, footfall has reduced significantly across the Hystead portfolio.
The governments of Ghana and Nigeria implemented Covid -19 response measures earlier than was the case
in South Africa, and the prevalence of confirmed Covid -19 cases is currently low in these countries.
Shopping centres remain open in Ghana and Nigeria, other than cinema complexes in Ghana which have
been closed under government instruction. Our response focuses on awareness and educational campaigns
in terms of best practices outlined by the World Health Organization. These campaigns have been flighted
across all the malls’ social media handles, and are accompanied by strong in-centre media campaigns (via
LCD screens, PA systems and physical advertising mediums). This is in addition to offering hand sanitisers
at entrances, food courts and restrooms, coupled with increased cleaning regimes for high touch-point zones
in the malls.
To overcome the challenges we face as a result of Covid-19 we will need to work in partnership with all of
the stakeholders in our business, and find solutions that will give our stakeholders a chance to emerge from
these challenges with their businesses intact. To this end , we are formulating plans to assist our tenants by,
for example, reducing compulsory trading hours, creating facilities for on-line shopping collections, and
encouraging shoppers to continue using our malls safely. We are cognisant that there are many smaller
independent retailers whose need for assistance may be greater. We challenge and encourage all major retail
groups and business partners to play their part in sharing the collective burden of overcoming the challenges
we all face.
Hyprop is addressing the financial risks posed by the Covid -19 threat and is actively engaging with its
principal bankers and lenders, who have indicated their support.
DIVIDEND PAYMENT AND THE DIVIDEND REINVESTMENT ALTERNATIVE (“DRIP”)
Shareholders are referred to Hyprop’s condensed consolidated interim results for the six months ended 31
December 2019, released on 27 February 2020, in which it was noted that a dividend of 308.73709 cents per
share for the six months ended 31 December 2019 (“the interim dividend”) will be paid to shareholders, who
will be entitled to elect to reinvest the net cash dividend in return for additional Hyprop shares through a DRIP.
It was also noted that the board of directors of Hyprop may, in its discretion, withdraw the DRIP should market
conditions warrant such action.
Payment of the dividend
It is not yet possible to predict or quantify the business impact of the Covid-19 virus and the state and societal
responses to it. This uncertainty calls for extreme caution and, accordingly, the board has resolved to pay the
interim dividend on or about 5 October 2020, subject to compliance with the Companies Act and other
regulations, which date should coincide with the anticipated date of payment of the final dividend for the year
ending 30 June 2020.
Payment of the interim dividend in October 2020 will strengthen the Company’s ability to weather the difficult
conditions that are anticipated in the next few months and was made after carefully considering the effect
thereof on all stakeholders.
Dividend reinvestment alternative
After taking cognisance of the feedback received from institutional shareholders during the post interim results
roadshow, the Board will review the DRIP in September 2020 in the context of market conditions at the time.
The Board will continue to monitor and evaluate the impact of Covid-19 on Hyprop and will provide further
updates as and when relevant.
23 March 2020
Sponsor
Java Capital
Date: 23-03-2020 08:24:00
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