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HERIOT REIT LIMITED - Reviewed provisional condensed consolidated financial statements for the year ended 30 June 2020

Release Date: 30/09/2020 16:30
Code(s): HET     PDF:  
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Reviewed provisional condensed consolidated financial statements for the year ended 30 June 2020

HERIOT REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2017/167697/06)
(Approved as a REIT by the JSE)
JSE share code: HET ISIN: ZAE000246740
(“Heriot” or “the Company” or the “Group”)



SHORT-FORM ANNOUNCEMENT: REVIEWED PROVISIONAL CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020


NATURE OF BUSINESS

Heriot, a property holding and investment company listed in the “Diversified REITs” sector on the Alternative
Exchange of the JSE, is invested in industrial, retail, office, residential and specialised properties valued at
R4,47 billion, situated in areas with high growth potential. The Group’s primary objective is to develop or acquire
yield-enhancing assets within South Africa to create a stable and diverse portfolio of assets for the purposes of
generating secure and escalating net rental income streams.

KEY FINANCIAL HIGHLIGHTS

                                                         Reviewed for the         Audited for the          Change
                                                              year ended              year ended                %
                                                            30 June 2020            30 June 2019
 Dividend per share (cents)                                         84.20                   80.87             4.1
 Total assets (R’m)                                               4,787.0                 4,758.0             0.6
 Net asset value per share (cents)                               1,107.27                1,156.94           (4.3)
 Gross revenue (R’m)                                               508.00                  473.00             7.4
 Net profit after taxation (R’m)                                    88.00                  214.00          (58.9)
 Earnings per shares (cents)                                        32.29                   81.85          (60.5)
 Headline earnings per shares (cents)                               74.27                   73.41             1.1

PROSPECTS

Heriot’s focus for the forthcoming financial year will be to retain existing tenants and to limit vacancies while
continuing in its efforts grow its asset base, improve its liquidity and move from the Alternative Exchange of the
JSE onto the main board. While Heriot had no significant new vacancies directly attributable to the impacts of the
pandemic at 30 June 2020, some tenant failure may be inevitable in the 2021 financial year as the impact of the
restrictive lockdown on tenants unfolds.

Given the high levels of uncertainty in the market and low levels of investor and consumer confidence, the board
of directors of Heriot (the “board”) has resolved not to provide earnings and distribution guidance until it is
comfortable that such guidance is highly probable.

PAYMENT OF FINAL DIVIDEND

The board has declared final gross cash dividend of 43,45 cents per share, for the six months ended 30 June 2020,
out of the Company’s distributable income.

The dividend is payable to Heriot shareholders in accordance with the timetable set out below:
                                                                                                    2020
 Last date to trade cum dividend                                                     Tuesday, 20 October
 Shares trade ex dividend                                                            Wednesday, 21 October
 Record date                                                                         Friday, 23 October
 Payment date                                                                        Monday, 26 October

Share certificates may not be dematerialised or rematerialised between Wednesday, 21 October 2020 and Friday,
23 October 2020, both days inclusive. The dividend will be transferred to dematerialised shareholders’
CSDP/broker accounts on Monday, 26 October 2020. Certificated shareholders’ dividend payments will be posted
or paid to certificated shareholders’ bank accounts on or about, Monday 26 October 2020.

In accordance with Heriot’s status as a REIT, shareholders are advised that the dividend meets the requirements
of a “qualifying distribution” for the purposes of section 25BB of the Income Tax Act, No. 58 of 1962 (“Income
Tax Act”). The dividend on the shares will be deemed to be a dividend, for South African tax purposes, in terms
of section 25BB of the Income Tax Act.

The dividend received by or accrued to South African tax residents must be included in the gross income of such
shareholders and will not be exempt from income tax (in terms of the exclusion to the general dividend exemption,
contained in paragraph (aa) of section 10(1)(k)(i) of the Income Tax Act) because it is a dividend distributed by
a REIT. This dividend is, however, exempt from dividend withholding tax in the hands of South African tax
resident shareholders, provided that such shareholders provide the following forms to their Central Securities
Depository Participant (“CSDP”) or broker, as the case may be, in respect of uncertificated shares, or the
Company, in respect of certificated shares:

a)    a declaration that the dividend is exempt from dividends tax; and
b)    a written undertaking to inform the CSDP, broker or the Company, as the case may be, should the
      circumstances affecting the exemption change or the beneficial owner cease to be the beneficial owner,

both in the form prescribed by the Commissioner for the South African Revenue Service. Shareholders are advised
to contact their CSDP, broker or the Company, as the case may be, to arrange for the abovementioned documents
to be submitted prior to payment of the dividend, if such documents have not already been submitted.

Dividends received by non-resident shareholders will not be taxable as income and instead will be treated as an
ordinary dividend which is exempt from income tax in terms of the general dividend exemption in section
10(1)(k)(i) of the Income Tax Act. Any distribution received by a non-resident from a REIT will be subject to
dividend withholding tax at 20%, unless the rate is reduced in terms of any applicable agreement for the avoidance
of double taxation (“DTA”) between South Africa and the country of residence of the shareholder. Assuming
dividend withholding tax will be withheld at a rate of 20%, the net dividend amount due to non-resident
shareholders is 34,76000 cents per share. A reduced dividend withholding rate in terms of the applicable DTA
may only be relied on if the non-resident shareholder has provided the following forms to their CSDP or broker,
as the case may be, in respect of uncertificated shares, or the Company, in respect of certificated shares:

a)    declaration that the dividend is subject to a reduced rate as a result of the application of a DTA; and
b)    a written undertaking to inform their CSDP, broker or the Company, as the case may be, should the
      circumstances affecting the reduced rate change or the beneficial owner cease to be the beneficial owner,

both in the form prescribed by the Commissioner for the South African Revenue Service. Non-resident
shareholders are advised to contact their CSDP, broker or the Company, as the case may be, to arrange for the
abovementioned documents to be submitted prior to payment of the dividend if such documents have not already
been submitted, if applicable.

Shares in issue at the date of the dividend: 255,395,858 (excluding 900,000 treasury shares)

Heriot’s income tax reference number: 9541295185
Where the transfer secretaries do not have the banking details of any certificated shareholders, the cash dividend
will be held in trust by the transfer secretaries pending receipt of the relevant certificated shareholder’s banking
details where after the cash dividend will be paid via electronic transfer into the personal bank accounts of
certificated shareholders.

REVIEW CONCLUSION

The condensed consolidated financial statements for the year ended 30 June 2020 have been reviewed by the
Company’s auditors, BDO South Africa Inc., who expressed an unmodified review conclusion. A copy of the
auditor’s review report together with the condensed financial statements identified in the auditor’s report is
available for inspection at the Company’s registered office.

ABOUT THIS ANNOUNCEMENT

This short-form announcement is the responsibility of the directors of and the contents were approved by the
board on 30 September 2020. This short-form announcement is a summary of the full announcement released on
SENS on 30 September 2020 and does not include full or complete details. The short-form announcement has not
been audited or reviewed by the Company’s external auditors.

The full announcement is available on the Company’s website at www.heriotreit.com and can be accessed using
the following JSE link: https://senspdf.jse.co.za/documents/2020/jse/isse/HETE/FY2020.pdf.

The full announcement is available for inspection at the registered offices of the Company or its sponsor, at no
charge, during office hours from Wednesday, 30 September 2020 to Wednesday, 7 October 2020. Any investment
decision by investors and/or shareholders should be based on the full announcement.


By order of the Board

30 September 2020

COMPANY SECRETARY
CIS Company Secretaries Proprietary Limited (G Prestwich)

REGISTERED OFFICE
Suite 1, Ground Floor, 3 Melrose Boulevard, Melrose Arch, Johannesburg, 2196
PO Box 652737, Benmore, 2010

DIRECTORS
SB Herring (Chairperson)*, RL Herring (CEO), JA Finn (CFO), SJ Blieden*†, T Cohen*†, R Lockhart-Ross*†,
N Ngale*†
*Non-executive †Independent

TRANSFER SECRETARIES
Computershare Investor Services Proprietary Limited

DESIGNATED ADVISOR
Java Capital, 6th Floor, 1 Park Lane, Wierda Valley, Sandton, 2196

Date: 30-09-2020 04:30:00
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