05 Oct - 10 min read

Condensed consolidated interim results for the six months ended 31 August 2021

Condensed consolidated interim results for the six months ended 31 August 2021

EQUITES PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/080877/06)
Share code: EQU ISIN: ZAE000188843
Alpha code: EQUI
(Approved as a REIT by the JSE)
(“Equites” or “the Company” or “the Group”)


SHORT-FORM ANNOUNCEMENT: CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2021


SIX MONTHS IN REVIEW

Equites continues to benefit from the outperformance of the logistics property market globally; with supply
chain optimisation, the growth in e-commerce and the consumers’ requirements for faster fulfilment driving
strong occupier demand for warehousing space.

These global trends continue to reflect in the Group’s results, with distribution per share (“DPS”) and net
asset value (“NAV”) per share exceeding pre-COVID-19 levels. Equites continues to enjoy access to equity
markets and raised R1.3 billion in equity over the last six months; this resulted in a loan-to-value (“LTV”) ratio
of 28.6% at 31 August 2021. The Group refinanced over R1.2 billion of debt facilities during the period, with
more than 60% of debt maturing after February 2024, resulting in a weighted average debt maturity of 3.0
years. Equites issued a R300 million 3-year floating rate note off the recently updated Domestic Medium
Term Note Programme at an exceptional margin of 3-month JIBAR plus 165bp.

The strong performance over the last six months is underpinned by resilient property portfolios in SA and the
UK, which is further enhanced with the attractive development pipeline of logistics properties in the top-
end of the UK logistics market.

THE PERIOD IN BRIEF

    -   DPS of 78.38 cents, an increase of 5.3% compared to the prior comparable period
    -   LTV ratio of 28.6%, demonstrating a conservative capital structure
    -   NAV per share increased by 2.2% from R17.25 to R17.63, supported by uplifts on UK developments
    -   Like-for-like (“LfL”) portfolio valuation uplift in the UK was 5.1% in sterling
    -   LfL property valuations in SA were flat for the period
    -   LfL net property income growth was 7.5% in SA
    -   Average rental collection rates were 99.6% and 100% in SA and the UK, respectively
    -   Overall logistics portfolio vacancy rate of 0.8%
    -   Raised R1.3 billion in equity during the period under review
    -   Issued a R300 million floating rate note at an exceptional margin of 3-month JIBAR plus 165bp
    -   Solar plant output capacity reached 980 MWh at Aug-21 compared to 89 MWh at Aug-20
    -   The distribution policy remains unchanged at a 100% pay-out ratio

KEY FINANCIAL HIGHLIGHTS

                                                         Unaudited              Unaudited
                                                   six months ended      six months ended                Change
                                                     31 August 2021        31 August 2020                     %
 Gross property revenue (R’000)                             784 944               510 382                 53.8%
 Distributable earnings (R’000)                             556 250               457 572                 21.6%
 Earnings per share (cents)                                   179.0                (20.1)               >100.0%
 Headline earnings per share (cents)                           97.3                 (7.6)               >100.0%
 Total comprehensive income (R’000)                       1 052 271               395 424               >100.0%
 Dividend declared per share (cents)                          78.38                 74.44                  5.3%
 Net asset value per share (cents)                            1 763                 1 744                  1.1%

DECLARATION OF AN INTERIM CASH DIVIDEND WITH THE ELECTION TO REINVEST THE CASH DIVIDEND IN
RETURN FOR EQUITES SHARES

Notice is hereby given of the declaration of the interim dividend number 16 of 78.37854 cents per share.

The Board has declared an interim gross dividend of 78.37854 cents per share on 4 October 2021 which is
a 5.3% growth over the prior year interim distribution of 74.44 cents per share. The DPS growth is in line with
previous guidance of 5% – 6%. Shareholders will be entitled, in respect of all or part of their shareholdings,
to elect to reinvest the cash dividend in return for Equites shares. Those shareholders who elect not to
reinvest will receive a gross cash dividend of 78.37854 cents per share. The entitlement for shareholders to
receive the dividend reinvestment alternative is subject to the Board agreeing on the pricing and terms of
the dividend reinvestment alternative. The Board in its discretion may withdraw the dividend reinvestment
alternative should market conditions warrant such actions and such withdrawal will be communicated to
shareholders prior to the finalisation announcement to be published by no later than 11:00 (SA time) on
Tuesday, 12 October 2021.

A circular providing further information in respect of the cash dividend and dividend reinvestment
alternative (the “circular”) will be posted to shareholders on Tuesday, 5 October 2021. The circular will be
available on the website of the Company (www.equites.co.za/investor-community/investors-
documentation/) from Tuesday, 5 October 2021. Copies of the circular may be obtained from the
registered offices of Equites during normal business hours from Tuesday, 5 October 2021 to Friday,
22 October 2021. Shareholders who have dematerialised their shares through a Central Securities
Depository Participant (“CSDP”) or broker should instruct their CSDP or broker with regard to their election
in terms of the custody agreement entered into between them and their CSDP or broker.

The distribution of the circular and/or accompanying documents and the right to elect shares in
jurisdictions other than the Republic of South Africa (SA) may be restricted by law and any failure to comply
with any of these restrictions may constitute a violation of the securities laws of any such jurisdictions.
Shareholders’ rights to elect shares are not being offered, directly or indirectly, in the United Kingdom (UK),
European Economic Area (EEA), Canada, United States of America (USA), Japan, Hong Kong or Australia
unless certain exemptions from the requirements of those jurisdictions are applicable.

Fractions
Trading in the Strate environment does not permit fractions and fractional entitlements. Where a
shareholder’s entitlement to the shares in relation to the dividend reinvestment alternative gives rise to an
entitlement to a fraction of a new share, such fraction will be rounded down to the nearest whole number
with the cash balance of the dividend being retained by the shareholders.

 Salient dates and times                                                                                2021
 Equites results including declaration of an interim distribution published on            Tuesday, 5 October
 SENS
 Circular and form of election posted to shareholders                                     Tuesday, 5 October
 Finalisation information including the share ratio and reinvestment price per           Tuesday, 12 October
 share published on SENS by 11:00 (SA time)
 Last day to trade in order to participate in the election to receive shares in          Tuesday, 19 October
 terms of the dividend reinvestment alternative or to receive a cash dividend
 (“LDT”)
 Shares trade ex-dividend                                                              Wednesday, 20 October
 Listing of maximum possible number of shares under the dividend                          Friday, 22 October
 reinvestment alternative
 Last day to elect to receive shares in terms of the dividend reinvestment                Friday, 22 October
 alternative or to receive a cash dividend (no late forms of election will be
 accepted) at 12:00 (SA time)
 Record date for the election to receive shares in terms of the dividend                  Friday, 22 October
 reinvestment alternative or to receive a cash dividend (“record date”)
 Announcement of results of cash dividend and dividend reinvestment                       Monday, 25 October
 alternative released on SENS
 Payment of cash dividends to certificated shareholders by electronic funds               Monday, 25 October
 transfer
 Dematerialised shareholders’ CSDP or broker accounts credited with the                   Monday, 25 October
 cash dividend payment (if applicable)
 Share certificates posted to certificated shareholders on or about                    Wednesday, 27 October
 Dematerialised shareholders’ CSDP or broker accounts credited with the                Wednesday, 27 October
 new shares (if applicable)
 Adjustment to shares listed on or about                                                  Friday, 29 October

Notes:
1. Shareholders electing the dividend reinvestment alternative are alerted to the fact that the new shares
   will be listed on LDT + 3 and that these new shares can only be traded on LDT + 3, due to the fact that
   settlement of the shares will be three days after the record date, which differs from the conventional
   one day after record date settlement process.
2. Shares may not be dematerialised or rematerialised between Wednesday, 20 October 2021 and Friday,
   22 October 2021, both days inclusive.
3. The above dates and times are subject to change. Any changes will be released on SENS.

Tax implications

Equites listed on the JSE as a REIT in line with the REIT structure as provided for in the Income Tax Act, No. 58
of 1962, as amended (the “Income Tax Act”) and section 13 of the JSE Listings Requirements.

The REIT structure is a tax regime that allows a REIT to deduct qualifying distributions paid to investors, in
determining its taxable income.

The cash dividend of 78.37854 cents per share meets the requirements of a qualifying distribution for the
purposes of section 25BB of the Income Tax Act (a “qualifying distribution”) with the result that:

   -     qualifying distributions received by resident Equites shareholders must be included in the gross
         income of such shareholders (as a non-exempt dividend in terms of section 10(1)(k)(aa) of the
         Income Tax Act), with the effect that the qualifying distribution is taxable as income in the hands of
         the Equites shareholder. These qualifying distributions are however exempt from dividends
         withholding tax, provided that the South African resident shareholders 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 exempt from dividends tax; and

         -   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.

   -     qualifying distributions received by non-resident Equites shareholders will not be taxable as income
         and instead will be treated as ordinary dividends, but which are exempt in terms of the usual
         dividend exemptions per section 10(1)(k) of the Income Tax Act. Any qualifying distributions are
         subject to dividends 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 dividends withholding tax will be withheld at a rate of
         20%, the net dividend amount due to non-resident shareholders is 62.70283 cents per share. A
         reduced dividend withholding rate in terms of the applicable DTA, may only be relied upon 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

         -   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.

Shareholders are advised that in electing to participate in the dividend reinvestment alternative, pre-
taxation funds are utilised for the purposes and that taxation will be due on the total cash dividend amount
of 78.37854 cents per share.

Other information

The issued ordinary share capital of Equites at the date of declaration is 709 696 393 ordinary shares of no
par value each before any election to reinvest the cash dividend.

Income Tax Reference Number of Equites: 9275393180.

The cash dividend or the dividend reinvestment alternative may have tax implications for resident as well
as non-resident shareholders. Shareholders are therefore encouraged to consult their professional advisors
should they be in any doubt as to the appropriate action to take.

SHORT-FORM ANNOUNCEMENT

This short-form announcement is the responsibility of the directors of Equites and the contents were
approved by the Board on 4 October 2021. This short-form announcement is a summary of the full
announcement released on SENS on 5 October 2021 and does not include full or complete details. None
of the information in this announcement has been reviewed or reported on by the company’s external
auditors.

The full announcement is available on the Company’s website at https://www.equites.co.za/investor-
community/investors-documentation/ and can also be accessed using the following JSE link:
https://senspdf.jse.co.za/documents/2021/jse/isse/EQU/H12021.pdf

A copy of the full announcement may be requested from info@equites.co.za or the sponsor, Java Capital
at sponsor@javacapital.co.za. Any investment decision should be based on the full announcement
available on the Company’s website.

The condensed consolidated interim results have not been reviewed or audited by the Company’s
external auditors, PricewaterhouseCoopers Inc.

Non – Executive Directors
P.L. Campher* (Chairman), R.E. Benjamin-Swales*, M.E. Brey*, E. Cross*, A.J. Gouws, N Khan*, K. Ntuli*, C.
Hess*+, N. Mkhize*+
*Independent
+Appointed 1 October 2021

Executive Directors
A Taverna-Turisan (CEO)^, G.R. Gous (COO), L. Razack (CFO)
^Italian

Registered office and business address
14th Floor, Portside Towers, 4 Bree Street, Cape Town, 8000

Contact details
info@equites.co.za

Company secretary
TC Petersen#
#Appointed 1 October 2021

Transfer secretary
Computershare Investor Services Proprietary Limited

Auditors
PricewaterhouseCoopers Inc.

Debt sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited

Corporate advisor and equity sponsor
Java Capital
6th Floor, 1 Park Lane, Wierda Valley, Sandton, 2196

5 October 2021

Date: 05-10-2021 07:30:00
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.
Information on this Website is provided for general information purposes only and is not a substitute for professional advice. ASX Information (including company announcements and prices) is delayed by at least 20 minutes. JSE Information (including company announcements and prices) is delayed by at least 15 minutes. Reliance on the information you access on or from this Website is solely at your own risk. We make no representation or warranty in relation to the future performance of the companies that appear on this Website. Investment in securities involves risk and you should obtain independent professional legal, financial, investment or company advice before acting on any of the information you access on this Website. Using, browsing or otherwise accessing this Website is subject to our Terms and Conditions and our Privacy Policy.

© 2021 Listcorp. ABN 60 166 140 307

Never miss news from Equites Property Fund Limited (JSE:EQU) when you join Listcorp.