Wrap Text
Audited Summary Consolidated Financial Statements of Tradehold Group and Cash Dividend for year to 28 February 2021
Tradehold Limited
(Registration number: 1970/009054/06)
Incorporated in the Republic of South Africa
JSE Ordinary Share code: TDH ISIN: ZAE000152658
JSE B Preference Share code: TDHBP ISIN: ZAE000253050
("Tradehold" or the "Group")
AUDITED SUMMARY CONSOLIDATED FINANCIAL STATEMENTS OF THE TRADEHOLD GROUP AND
CASH DIVIDEND DECLARATION FOR THE YEAR TO 28 FEBRUARY 2021
KEY INFORMATION
- Total assets: £808 million (2020: £883 million)
- Headline loss per share: 1.9 pence (2020: earnings 9.5 pence)
- Revenue: £74.3 million (2020: £94.6 million)
- Ordinary shareholders' equity: £225.2 million (2020: £282.7 million)
- Net loss attributable to ordinary shareholders: £39.7 million
(2020: net profit £5.99 million)
- Tangible net asset value per share: 94 pence / R19.75
(2020: 120 pence / R24.05)
- Final dividend: 30 cents per ordinary share declared
Although the group reported a net loss of £39.7 million, £44.5 million of
this is due to non-cash investment property devaluations resulting from the
Covid-19 pandemic, of which £33 million relates to its United Kingdom
properties. A further non-cash loss of £10.7m was incurred, which is not
Covid related and comprises a once-off breakage costs on Collins fixed rate
hedge unwinds, part of a debt restructure which has contributed to a
reduction in interest cost from an average of 11.3% to 8.4% (approximately
R80 million saving per year). Tradehold ended the year with an improved cash
position of £25.4 million and declared a final dividend of 30 cents per
ordinary share (60 cents in total for the year).
At Tradehold we apply three essential principles in our business. These are
to adapt, simplify and focus. It is this premise that has allowed us to
weather the effects of the pandemic and the impact of a vastly accelerated
change in market trends.
ADAPT
The South African business (Collins Group) has been particularly successful
in managing change with agility and flexibility. The business collected 97%
of all rent due (including remissions of R30 million), vacancies have
remained low, at a mere 2.3% of all gross lettable space, with a 6.5 year
weighted average lease expiry profile. We could thus exceed our pre-Covid
budget for the year, achieving net operating profit before tax of
R297 million (before one-off items). We made our first offshore investment,
acquiring six retail warehouse properties in Austria for €33.2 million. Each
of these is underpinned by a 10-year lease signed by OBI, Europe's largest
DIY retailer. These properties were bought at a 7% net operating income
yield.
In the UK, management has long recognised a growing appetite for flexible,
fully equipped office space offered on a more accommodating basis and on
shorter lease terms. This led to the establishment of Boutique, with its
present 4 830 workstations spread across 32 buildings in Greater London.
Based on the negotiation of new deals since year-end and the ongoing high
level of interest, we believe the business is well-poised to capitalise on
the new, hybridised nature of workspace sought by employers and their
employees. In particular, this has been the case for businesses that require
a physical presence in the major cities while accommodating fewer employees.
Notable is that March 2021 was the best month in Boutique's history with
529 workstations sold.
Shifting the thrust of the UK property business away from traditional retail
has been an ongoing process. Traditional retail now accounts for 37% of the
total property value in the UK. Adapting this way has helped the business to
collect, under very challenging circumstances, on average 78% of total rent
due (before rent concessions) over the full financial year. We regard this
as most satisfactory in the prevailing climate. The medium- to long-term
strategy for the UK property business is to adapt from a capital growth
strategy to one that is less capital-intensive with the capacity to
contribute to Tradehold's future dividends to shareholders.
SIMPLIFY
We are simplifying the group's structure, inter alia by reducing the number
of countries in Africa where Tradehold operates. This allows us to focus all
our attention on our primary businesses: the Collins Group, Moorgarth and
Boutique. It is against this background that we have sold one of the last
three properties in Mozambique and are in negotiations to sell the remaining
two.
FOCUS
For the Collins Group the accent remains on building a premium industrial-
based property portfolio, primarily by selling non-core assets and
re-investing in better quality properties in South Africa, as well as
off-shore. Seven none-core assets sold for R227 million, were transferred in
the year at a loss to book value of only R1.3 million while another nine are
in the process of being transferred to their new owners.
Tradehold is also constantly looking at ways to reduce the cost of debt to
increase profitability. We were able to reduce average cost of debt from
11.3% to 8.4%, with 75% of that debt still fixed. This was achieved by
breaking long-dates fixes in March last year when the long bond ran, and
unwinding an inflation-linked hedge and using the proceeds from that gain
(R228 million) to break and refix R1.5 billion of debt. The overall debt
restructuring was achieved at a total cash cost of just R8 million, with an
interest saving of approximately R80 million per annum.
In the UK, the focus has been on growing the Boutique business by taking
advantage of the unique opportunities arising as a result of the pandemic.
For Moorgarth, which incurred significant fair-value impairments to the UK
portfolio, the accent now is on protecting capital invested through active
asset management and by actively following through on our medium- to long-
term strategy of reducing exposure to traditional retail. A further
important focus on cost and cashflow management, as well as on the
maintenance of excellent banking relationships have ensured that the UK
business has sufficient liquidity for the foreseeable future.
ORDINARY SHARE CASH DIVIDEND
The board of directors of Tradehold (the "Board") resolved to declare a
gross cash dividend of 30 cents per ordinary share on 24 May 2021. The
income used for this purpose is Tradehold's share of the dividend Collins
Group declares every six months in terms of the agreement with its minority
shareholders. The dividend will reduce Tradehold's stated capital.
The distribution constitutes a foreign dividend as defined in section 1 of
the Income Tax Act ("ITA") and is a dividend for purposes of dividends tax
("DT"), since the shares are listed on the JSE Limited.
An exemption from DT is provided for in the ITA in respect of foreign
dividends paid to a South African company and to a non-resident to the
extent that it is paid in respect of listed shares, provided certain
administrative procedures are complied with.
The ITA further provides for an exemption from income tax in respect of
foreign dividends received or accrued in respect of listed shares.
In terms of the ITA, DT of 20% has been withheld for those shareholders who
are not exempt from DT. Shareholders who are not exempt from DT will
therefore receive a net dividend of 24 cents per Ordinary Share.
Tradehold has 261 346 570 ordinary shares in issue. Its income tax reference
number is 9725/126/71/9.
The salient dates for the dividend will be as follows:
Declaration date Monday, 24 May 2021
Last date to trade cum dividend Tuesday, 8 June 2021
Date trading commences ex dividend Wednesday, 9 June 2021
Record date Friday, 11 June 2021
Date of payment to shareholders Monday, 14 June 2021
Share certificates may not be dematerialised or rematerialised between
Wednesday, 9 June 2021, and Friday, 11 June 2021, both days inclusive.
CH Wiese KL Nordier
Chairman Director
24 May 2021
FULL ANNOUNCEMENT
The contents of this announcement are the responsibility of the directors of
Tradehold. The announcement is only a summary of the information contained
in the complete audited summary consolidated financial statements for the
year to 28 February 2021 ("Full Announcement") released on SENS. Any
investment decisions by investors and shareholders should be based on
consideration of the Full Announcement which is available at the following
link: https://senspdf.jse.co.za/documents/2021/jse/isse/tdh/YE2021.pdf and
on Tradehold's website at http://www.tradehold.co.za. Copies of the Full
Announcement are available for inspection and may be requested at no charge
from Tradehold's registered office at 36 Stellenberg Road, Parow Industria
or Tradehold's company secretary at tdhcosec@leacorporateservices.co.za, or
from the offices of its sponsor, Questco Corporate Advisory Proprietary
Limited, Ground Floor, Block C, Investment Place, 10th Road, Hyde Park, 2196
at no charge, from Monday to Friday during office hours.
These annual results have been audited by the Company's auditors,
PricewaterhouseCoopers Inc. who expressed an unmodified audit opinion
thereon. That report also includes communication of key audit matters. This
opinion is available, along with the annual financial statements on the
Company's website at www.tradehold.co.za.
DIRECTORS AND ADMINISTRATION
Executive directors: TA Vaughan, FH Esterhuyse, DA Harrop, KL Nordier
Non-executive directors: CH Wiese (alternate JD Wiese), HRW Troskie,
MJ Roberts, LL Porter, KR Collins, PJ Roelofse
Independent non-executive directors: HRW Troskie, MJ Roberts, LL Porter
Company secretary: PJ Janse van Rensburg
Transfer secretary: Computershare Investor Services (Pty) Ltd
Sponsor: Questco Corporate Advisory (Pty) Ltd
Resignation of director and changes to Board
In compliance with paragraph 3.59 of the Listings Requirements of the JSE
Limited, Tradehold shareholders are advised that Mr David Anthony Harrop has
resigned from the Board with effect from 20 May 2021.
The following changes to the Tradehold board occurred during the financial
year:
Mr Paul Johannes Roelofse was appointed as an independent non-executive
director to the Board with effect from 10 November 2020.
Date: 24-05-2021 02:50:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.