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Trading statement - Impact of Covid-19, deferral of interim dividend and withdrawal of guidance
INDLUPLACE PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/226082/06)
JSE share code: ILU ISIN: ZAE000201125
(Approved as a REIT by the JSE)
(“Indluplace” or “the Company” or “the Group”)
TRADING STATEMENT - IMPACT OF COVID-19, DEFERRAL OF INTERIM DIVIDEND AND WITHDRAWAL OF GUIDANCE
Indluplace is supportive of the South African government’s response to the COVID-19 outbreak to safeguard the health
of all South Africans. As a provider of homes to over 9 100 families and 2 400 students as well as a supporter of many
SMME’s we are committed to playing our part in ensuring the health and safety of our tenants, staff and service providers
while ensuring the long-term sustainability of the business. The extended lockdown coupled with a fast-changing and
uncertain environment requires hands-on management. We have implemented various measures to monitor the situation
in order to react quickly in support our operational teams and our tenants.
This announcement provides an update of the current impact of the pandemic and specifically the extended national
lockdown on Indluplace. We will further update stakeholders at our interim results presentation scheduled for 20 May
2020 or as circumstances change.
Operational update
The immediate effect of the national lockdown is that our properties are fully utilised as families are forced to stay in
their units for extended periods of time. Our tenants have reacted positively to this new reality and have largely displayed
patience and courtesy to fellow citizens. Similarly, our building-based staff have had to adjust to this new reality and a
new way of dealing with challenges. Essential services to tenants have been maintained across the portfolio whilst non-
essential functions continue to be carried out, albeit, remotely. Operationally we have tried to maintain a business as
usual approach as much as possible. This is also important for the many SMMEs that rely on Indluplace to keep their
businesses operational and their staff employed.
As expected, letting activity has reduced substantially as prospective tenants are unable to view units or to vacate or
occupy premises. Our occupancy figures have therefore remained constant.
Collections remain a high priority and currently we have collected in excess of 85% of our residential billings for April
2020. Rental from retail tenants comprises approximately 5% of total revenue and collections for the same period are in
the region of 50% of the total amount due. The majority of the retail premises comprise small businesses that have not
operated since the lockdown started. We are engaging with these tenants on an individual basis to find solutions that are
acceptable to both parties.
Balance sheet / Capital management
The Indluplace board of directors (“Board”) is acutely aware that these uncertain times require prudent balance sheet
management and a greater focus on liquidity planning. The Group loan to value ratio is expected to be better than the
pre-close guidance of 36% with cash on hand, including undrawn facilities, of approximately R120 million.
Interim dividend, withdrawal of guidance and dividend policy
The rapidly changing environment, lack of predictability and difficulty in estimating the overall impact of the pandemic
and subsequent lockdown on the future performance requires Indluplace to retain as much capital as possible to protect
its balance sheet and assist with liquidity. The Board, therefore, resolved to defer the decision on the payment of an
interim dividend for the period ended 31 March 2020, to the end of the financial year, meaning that no distribution will
be declared on the date of release of the interim results for the six months ended 31 March 2020 (compared to the
distribution of 37.49 cents per share declared for the six months ended 31 March 2019).
Further to this, the guidance previously communicated for the full financial year ending 30 September 2020 is
withdrawn.
The Board has furthermore resolved to revise its current dividend policy, which is to pay out 100% of distributable
income, to a more sustainable pay-out ratio which will be communicated once there is more certainty.
The financial information contained in this announcement has not been reviewed or reported on by the Company’s
auditors.
The Company’s interim results for the six months ended 31 March 2020 will be published on or about 20 May 2020.
23 April 2020
Sponsor
Java Capital
Date: 23-04-2020 08:00:00
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