Johannesburg - Listed property fund Rebosis reported yesterday a huge jump in operating profit to R2.4 billion for the year to end August - bolstered by earnings from its retail assets and commercial office portfolio, as well as acquisitions.
Rebosis’s operating profit surged 169.36 percent higher than the R904 million reported in 2015.
The Rebosis share price shot up more than 10 percent in the morning to trade at R12.15 a share, as the market digested the results. It closed up 4.55 percent at R11.50 on the JSE yesterday.
The company reported that its total revenue for the period also increased 79.21 percent to R1.81bn, up from R1.01bn, while headline earnings per share rose to 86.59 cents from the 85.55c reported in 2015.
Rebosis chief executive Sisa Ngebulana said: “We have achieved these results despite increased cost of debt from 8.2 percent to 8.9 percent, due to extended debt and interest hedges taken over a four-year profile.”
Rebosis has a 67.5 percent interest in New Frontier Properties, which owns three dominant shopping centres in the UK.
It also owns 59 percent of Ascension Properties, a JSE-listed Real Estate Investment Trust with 27 office buildings and one industrial building.
The investment in Ascension and New Frontier Properties was valued at R3.9bn at the end of August as compared with R2.7bn in 2015.
The company declared a dividend of 62.66c per share for the six months to the end of August to take the total dividend to 119.45c for the year. This represents an increase of 8.2 percent as compared with 2015.
Organic growth
“The solid distribution growth is mainly as a result of continued organic growth in our existing portfolio, as well as the management team’s containment efforts, which saw our cost-to-income ratio reduce from 13.3 percent to 12.5 percent,” Ngebulana said about the dividends.
Ngebulana added that going forward, the group would continue to execute its strategy of building a retail focused, resilient portfolio that yields strong income and capital growth for its shareholders.
With the UK having voted to leave the EU, the board decided to support a decision by New Frontier to now target niche high quality acquisitions in countries such as the Netherlands, Germany and Switzerland where it has identified opportunities.
As at the beginning of October, Rebosis acquired 100 percent of Forest Hill City and Baywest Mall, two retail centres located in Centurion and Port Elizabeth respectively.
Asset manager
Rebosis also acquired Billion Group’s asset and property management companies, effectively internalising the company’s asset manager.
The acquisition price totalled R4.9bn to be settled by new debt facilities of R3.7bn and an equity raise of R1.2bn - R700m of which would be deferred over two years.
The company said it planned to settle R1.5bn of the new debt through the disposal of non-core commercial assets.
BUSINESS REPORT