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Summarised Audited Consolidated Annual Financial Results for the year ended 30 June 2021 and Cash Dividend
Texton Property Fund Limited
Registration number: 2005/019302/06
Approved as a REIT by the JSE
Share code: TEX ISIN: ZAE000190542
(“Texton” or “the group” or “the Company”)
SUMMARISED AUDITED CONSOLIDATED ANNUAL FINANCIAL RESULTS FOR THE YEAR
ENDED 30 JUNE 2021 AND THE DECLARATION OF A CASH DIVIDEND
ABOUT TEXTON
Texton is a JSE-listed Real Estate Investment Trust (“REIT”) that offers shareholders access to a
property portfolio that aims to deliver long-term income and capital growth. The portfolio is valued at
R3,6 billion as at 30 June 2021 (June 2020: R4,5 billion) comprising of 42 properties (June 2020: 53)
in both South Africa (“SA”) and the United Kingdom (“UK”). The portfolio includes commercial office,
industrial, retail properties and a 50% interest in Broad Street Mall (“BSM”).
The geographic split of the portfolio by value is 61,1% (June 2020: 55,9%) in SA and 38,9% (June
2020: 44,1%) in the UK (including the interest in BSM). The portfolio in SA is made up of 74,9% office,
8,4%, industrial and 16,7% retail. The wholly owned portion of the UK portfolio is made up of 22,3%
office, 28,1% retail and 49,5%, industrial by value.
KEY FINANCIAL RESULTS
Year ended Year ended Change
30 June 2021 30 June 2020 %
Property revenue (R’000) 444 448 521 905 (14.8)
Distributable earnings (R’000) 167 706 116 813 43.6
Headline earnings/(loss) per share (cents) 57.97 (23.35) 348.3
Earnings/(Loss) per share (cents) 73.26 (37.35) 296.1
Net asset value per share (cents) 625.88 584.26 7.1
HIGHLIGHTS
Operational excellence
- Strengthening of the property team by the appointment of a Chief Operating Officer, Jonathan
Rens, who was one of the founding executives of Acucap Properties Limited
- Texton has internalised its property management function which enables management to
have a direct line of contact with tenants and allows for faster responses to tenants needs
- Continued to invest capital into the properties in South Africa to defend their value and
reposition assets as a result of the COVID-19 pandemic
- Significant investment undertaken to defend our weighted average lease expiry in SA which
has resulted in 43% of our leases by rental value expiring after five years as opposed to just
18.3% as at 30 June 2019
- Record number of new leases signed in SA
- Investments made to increase the supply of solar power in the portfolio through the
installation of PV systems taking our generating power to 563Kwp and looking to double this
output in the medium term
Balance sheet strength
- Loan To Value (“LTV”) has decreased from 46,2% (June 2020) to 31,8% (June 2021)
- Texton has R360 million of cash on hand and a further R149 million available in debt facilities
- Reduced bank debt by R567,1 million of which R451,9 million is a permanent reduction
- UK properties have significantly increased in value, which has offset the decrease in SA
property value, therefore on a net basis, the valuation of property has remained stable
- De-risked the balance sheet by the removal of GBP debt secured against SA assets and the
reduction in the cross currency interest rate swap (“CCIRS”)
Earnings
- Distributable income increased by 43.6% compared to the prior financial year
- Net property income on a like-for-like basis decreased by 3,3% even though property revenue
has fallen by 14.8% in year due to tight cost management and the sale of non-core assets
- Cost savings across the portfolio have achieved pleasing results as a result of the response
to the COVID-19 pandemic, many of which will be permanent savings in the portfolio
- Significant decrease in the cost of debt achieved through the renegotiation of bank loan terms
and the unwinding of interest rate swaps
- Collection rate of 98,8% in SA and 100.0% in the UK over the past financial year
Declaration of a dividend
• Texton has made R128 million available for distribution as a dividend to shareholders. This
represents a pay-out ratio of 76.3%, based on the number of shares (net of treasury shares
including shares repurchased post 30 June 2021), amounts to 37.47 cents per share.
Share Buyback
- Texton has repurchased 5 294 052 in the market at an average price of R2.59 per share
before 30 June 2021 and then further repurchased 2 457 839 in the market at an average
price of R3.19 per share post year end to date.
DECLARATION OF A CASH DIVIDEND
Notice is hereby given of a declaration of the gross final cash dividend of 37.47 cents per share for the
year ended 30 June 2021 (“Cash Dividend”)
Salient dates and time 2021
Last day to trade (“LDT”) cum dividend Tuesday, 5 October
Shares to trade ex-dividend Wednesday, 6 October
Record date Friday,8 October
Cheques posted to Certificated Shareholders and accounts credited by Monday, 11 October
CSDP or broker
Notes:
1. Shares may not be dematerialised or rematerialised between commencement of trade on
Wednesday, 6 October 2021 and the close of trade on Friday, 8 October 2021.
TAX IMPLICATIONS
As the Company has REIT status, 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),
as amended, (“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.
South African tax residents
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 exception, contained in paragraph (aa) of section 10(1)(k)(i) of the Income Tax Act) because
it is a dividend distributed by a REIT. The dividend is exempt from dividend withholding tax in the hands
of South African tax resident shareholders, provided that the South African resident Shareholders
provide the following forms to the CSDP or broker in respect of uncertificated shares, or to the company,
in respect of certificated shares:
- a declaration that the dividend is exempt from dividend tax; and
- a written undertaking to inform the CSDP, broker or the Company, 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 to arrange for the abovementioned
documents to be submitted prior to payment of the dividend if such documents have not already been
submitted.
Non-resident shareholders
Dividends received by non-resident shareholders will not be taxable as income. Instead, they 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. It should be noted that up to 31 December 2013
dividends received by non-residents from a REIT were not subject to dividend withholding tax. Since 1
January 2014, any dividend 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 concerned. Assuming dividend withholding tax will be withheld at a rate of 20%, the net
dividend amount due to non-resident shareholders is 29.976 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 form to their CSDP or broker in respect of uncertificated shares, or the
company, in respect of certificated shares:
(a) a declaration that the dividend is subject to a reduced rate as a result of the application of DTA;
and
(b) a written undertaking to inform their CSDP, broker or the Company, 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 to arrange for the
abovementioned documents to be submitted prior to payment of the dividend if such documents have
not already been submitted.
The company’s tax reference number is: 9353785158
This short-form announcement is the responsibility of the Board and does not include full or complete
details. Any investment decision should be based as a whole on the summarised audited consolidated
annual financial results (“full announcement”), which may be downloaded from:
https://senspdf.jse.co.za/documents/2021/jse/isse/TEX/abridged.pdf
The full announcement is also available for inspection at the registered offices of the Company or its
Sponsor, at no charge, during office hours for a period of 30 calendar days following the date of this
announcement. The full announcement is also available on the Company’s website at:
https://www.texton.co.za/index.php/SENS-Announcements/SENS
The short-form announcement has not been audited or reviewed by the Company’s external auditors.
The summarised audited consolidated annual financial results are extracted from the financial
statements but is not audited. The consolidated financial statements for the year ended 30 June 2021
were audited by BDO South Africa Inc., who expressed an unmodified opinion thereon. The audited
consolidated financial statements for the year ended 30 June 2021 and the auditor’s report includes
communication of key audit matters. Key audit matters are those matters that, in their professional
judgement, were of most significance in their audit of the consolidated financial statements of the current
period. The full report is available for inspection at the Company’s registered office and on the
Company’s website.
The directors take full responsibility for the preparation of these summarised audited consolidated
annual financial results and confirm that the financial information has been correctly extracted from the
consolidated financial statements.
The auditor’s report does not necessarily report on all of the information contained in these summarised
audited consolidated annual financial results. Shareholders are therefore advised that in order to obtain
a full understanding of the nature of the auditor’s engagement they should obtain a copy of the auditor’s
report together with the accompanying financial information from the Company’s registered office or on
the Company’s website.
By order of the Board
14 September 2021
Directors
M Golding (Non-executive chairman) P Welleman* (chief executive officer) P Hack* (chief financial
officer) JR Macey (Lead independent non-executive) A Hannington (Independent non-executive) S
Thomas (Independent non-executive) R Franco (Non-executive) W van der Vent (Independent non-
executive)
* Executive director
Company secretary
Motif Capital Partners,
173 Oxford Road,
Rosebank, 2196
Registered office and business address
Block D, Vunani Office Park,
151 Katherine Street, Sandton, 2031
Transfer secretaries
Computershare Investor Services Proprietary Limited
2nd Floor, Rosebank Towers
15 Biermann Avenue, Rosebank
Sponsor
Investec Bank Limited
100 Grayston Drive
Sandown, Sandton 2196
Auditor
BDO South Africa Inc.
6th floor, 123 Hertzog Boulevard,
Foreshore, Cape Town, 8001
Date: 14-09-2021 09:01:00
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