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Summarised consolidated audited results for the year ended 30 June 2020
HYPROP INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/005284/06)
JSE share code: HYP ISIN: ZAE000190724
Bond issuer code: HYPI (Approved as a REIT by the JSE)
("Hyprop" or "the Company" or "the Group")
SUMMARISED CONSOLIDATED AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2020
Distributable income, excluding the direct
impact of Covid-19, of 664 cents per share,
in line with guidance provided in
September 2019.
Covid-19 direct impact reduced distributable
income by R434 million, to 493 cents per share.
Balance sheet remains healthy despite a
reduction of R4.0 billion (13,9%) in the value of
the property portfolio.
All banking covenants met at 30 June 2020.
Final terms agreed for the sale of
Ikeja City Mall.
Steps taken to strengthen the balance sheet:
- US dollar denominated debt reduced by
$271 million; and
- Cash of R1.2 billion retained to repay debt.
Audited Audited
R'000 Year ended 30 June 2020 Year ended 30 June 2019
Net operating income (R'000) 1 268 285 1 536 039
Headline earnings per share (cents) 410.7 223.5
Basic (loss)/earnings per share (cents) (1 332.4) 64.5
Dividend per share See dividend section 744.89034
Net asset value per share 76.09 95.78
Hyprop is a retail-focused REIT listed on the JSE. The Company currently has interests in a R48.5 billion portfolio of shopping centres
in South Africa, Eastern Europe and sub-Saharan Africa.
Outlook and Prospects
The Company will continue to
focus on implementing its revised
strategy, preserving cash and
strengthening the balance sheet
through the following:
1. Finalising and implementing
the 2020 distributions. Any cash
retained will be used to reduce debt;
2. Subject to Hystead shareholder
approval, no dividends will be
declared by Hystead and the
retained funds will be utilised
to repay a portion of the Euro
denominated debt;
3. Completing the sale of Ikeja City
Mall and applying the net proceeds
to settle the remaining $18 million
of Dollar debt, with the balance
being applied to local debt;
4. Disposing of selected SA assets
and utilising the proceeds to
settle Rand debt; and
5. Pursuing selective acquisitions
/ transactions in line with the
revised strategy.
We will continue to pursue the key
priorities of repositioning our SA
portfolio, increasing the dominance
of the properties in the European
portfolio, and implementing the
non-tangible asset strategy through
projects like Soko District. Until
trading conditions stabilise, capital
expenditure will be limited to those
projects that are already committed
or are absolutely necessary.
The Group's long-term strategies
for creating sustainable returns
for shareholders will continue,
having regard to prevailing market
conditions and industry risks. Focus
will be on generating a total return
for shareholders through balanced
and sustainable long term growth in
distributable income and net asset
value, coupled with conservative
balance sheet management.
Remuneration policies will align
with these objectives.
While the rate of new Covid-19
infections is declining, we remain
wary of the possibility of a second
wave and the long term effects of the
pandemic on what was already a weak
local economy. We anticipate further
negative rent reversions, although
at a lower level than in the last two
financial years, the possibility of further
decreases in investment property
values and increases in administered
costs at rates exceeding CPI. Consumer
spending is also expected to remain
under pressure and consumer
behaviour will continue to evolve.
We have structured our strategy and
business to take account of this and
are confident that Hyprop is well
positioned to compete going forward.
Having regard to the current
economic conditions and the further
uncertainty brought about by the
continuing impact of Covid-19, the
Board has resolved not to provide
guidance on distributable income
or dividends for the financial year
ending 30 June 2021.
Dividend
At 30 June 2020, the Group's net
asset value was R19.3 billion and
the Group had available cash of
R835 million and undrawn revolving
credit facilities of R500 million. The
Group's liquidity position remains
strong, however, having regard to
the challenging and unpredictable
economic environment, the
pressure on the market value of the
SA portfolio, the desire to reduce
gearing levels and feedback from
major institutional shareholders,
the board is of the view that the
Company should retain as much
cash as possible while continuing to
meet applicable REIT requirements.
The board is considering different
options in regard to settlement
of the interim distribution and
declaration of the final distribution
for the year ended 30 June 2020,
having regard to the minimum REIT
distribution requirements. It has
therefore resolved that it would
be prudent to defer its decision
on the payment of the interim
dividend and the declaration of the
final dividend for the year ended
30 June 2020 until December 2020,
or an earlier date should more
clarity emerge on the likely future
economic environment.
Audited financial statements
KPMG Inc has audited the
consolidated and seperate financial
statements. Key audit matters
considered by KPMG for both
Group and Company are:
- Impact of Covid-19
- Going concern
- Valuation of assets (Hystead
and Investment property)
- Rental income relief
- Valuation of investment property
- Valuation of investment in Hystead
- Recoverability of AttAfrica
shareholder loan - Group
The consolidated audited financial
statements for the year ended
30 June 2020 and the KPMG
unqualified audit report are available
from the registered office of the
Company or the Company's website.
www.hyprop.co.za/annual-results.php
21 September 2020
Corporate information
Directors G.R. Tipper*† (Chairman), M.C. Wilken (CEO), B.C. Till (CFO), A.W. Nauta (CIO), A.A. Dallamore*†, K.M. Ellerine*, Z. Jasper*†, N. Mandindi*†, T.V. Mokgatlha*†,
L. Norval*, S. Noussis*†, S. Shaw-Taylor*† *Non-executive | †Independent
Registered office Second Floor, Cradock Heights, 21 Cradock Avenue, Rosebank, 2196 (PO Box 52509, Saxonwold, 2132) Transfer secretaries Computershare
Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann Avenue, Rosebank | PO Box 61051, Marshalltown, 2107 Company secretary Statucor
Proprietary Limited Sponsor Java Capital Investor relations Lizelle du Toit t. +27 82 465 1244 e. lizelle@acuminate.net
This short-form announcement is the responsibility of the directors and is only a summary of the information contained in the full announcement. The full announcement is available on the
JSE website https://senspdf.jse.co.za/documents/2020/jse/isse/HYPE/FY2020.pdf and on the Company website at https://www.hyprop.co.za/annual-results.php Copies of the full announcement
may also be requested by emailing Lizelle du Toit at lizelle@acuminate.net or at the Company's registered office or at the office of the sponsor, at no charge, during office hours from Monday
21 September 2020 to Friday, 2 October 2020. Any investment decision should be based on the full announcement published on the JSE and the Company's website.
www.hyprop.co.za
Date: 21-09-2020 05:05:00
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