Roy Cokayne
LISTED Redefine International maintains it has critical mass in the retail, commercial and hotel sectors in the UK and has taken a big step forward in building its German portfolio.
Mike Watters, the chief executive, said yesterday that the overall business environment was also positive across all of the company’s sectors.
“Against this backdrop, with our strengthened financial position and the flexibility to allocate capital to… areas of our portfolio, which are expected to provide the best risk-adjusted returns, we look forward to the future with confidence.”
Watters added that the overall business environment in which the company operated had turned positive despite continuing concerns related to weak economic fundamentals in the euro zone, deflationary expectations and the interest rate cycle.
Redefine has a property investment portfolio comprising assets in the UK, Europe and Australia, valued at more than £1 billion (R18bn). It has a primary listing on the London Stock Exchange and completed its inward listing on the JSE’s main board a year ago.
The company yesterday reported almost 30 percent growth in distributable income to £39.1m in the year to August from £30.1m, and delivered total shareholder returns of 28.5 percent for the period.
Distributable earnings a share increased 0.6 percent to 3.28 pence from 3.26p, with dividends declared for the year rising almost 3 percent to 3.20p from 3.11p.
Adjusted net asset value a share rose by almost 5 percent to 40.54p from 38.66p.
The balance sheet was strengthened with the group loan to value ratio reduced to 48.1 percent from 56.8 percent a year ago.
Watters said earnings had increased to record levels and financial and operational results for the period were ahead of expectations.
With regard to the company’s UK commercial portfolio of offices, motor trade and roadside service stations, he said it would continue to capitalise on the strength in the current investment market by selling smaller non-core assets at attractive prices and recycling capital into assets with long-term sustainable income characteristics.
He said extracting value through planning gains and potential conversions to residential uses was ongoing. He said there were a number of retailers in the UK and many discounters experiencing success and there were fewer administrations, but overall trading conditions continued to be challenging outside of London.
Watters said the strength of the investment market had led to a rapid re-pricing of secondary shopping centres and retail parks, adding a strong UK economy and the fact that many retail locations had undergone a rebasing of rents to levels that were again sustainable was cause for optimism.
The company’s properties in continental Europe comprise shopping centres, discount supermarkets and government let offices.
He said investment activity suggested there was increased risk appetite and demand for assets outside Germany’s top 10 cities or for assets that were more management intensive. This would have a positive affect on the value of good quality secondary assets, he said.
Shares rose 1.44 percent to close at R9.84 yesterday.