26 Aug - 10 min read

Audited consolidated financial results for the year ended 30 June 2021 and change to the Board of Directors

Audited consolidated financial results for the year ended 30 June 2021 and change to the Board of Directors

Resilient REIT Limited
Incorporated in the Republic of South Africa
Registration number: 2002/016851/06
JSE share code: RES 
ISIN: ZAE000209557  
Bond company code: BIRPIF
LEI: 378900F37FF47D486C58 
(Approved as a REIT by the JSE)
("Resilient" or "the Company" or "the Group")

Short-form announcement: Audited consolidated financial results for the 
year ended 30 June 2021 and change to the Board of Directors

www.resilient.co.za

Nature of the business
Resilient is a retail-focused Real Estate Investment Trust ("REIT") listed 
on the JSE Limited. Its strategy is to invest in dominant retail centres with 
a minimum of three anchor tenants and let predominantly to national retailers. 
A core competency is the successful development of new shopping centres and 
the reconfiguration of existing shopping centres to adapt to changing market 
demands. Resilient also invests directly and indirectly in offshore property 
assets.

Distributable earnings and dividend declared
The Board has declared a final dividend of 226,11 cents per share for 2H2021. 
Together with the 202,70 cents per share declared for 1H2021, the dividend 
for FY2021 of 428,81 cents per share is 16,4% higher than that of FY2020.

During FY2021, 97% of rentals and recoveries billed (before discounts) were 
collected. COVID-related discounts and tenant arrears are set out below:

                            Jun 2021                          Dec 2020 
                          six months                        six months
                        SA     Nigeria     Group         SA     Nigeria     Group
                     R'000       R'000     R'000      R'000       R'000     R'000
Discounts provided
to tenants          15 718      1 795     17 513     42 100       1 611    43 711
Tenant arrears 
written off         16 563     (3 519)    13 044     18 923       1 600    20 523
Net arrears at 
period-end          33 050      4 603     37 653     58 229       6 939    65 168

                            Jun 2020                          Dec 2019 
                          six months                        six months
                        SA     Nigeria     Group         SA     Nigeria     Group
                     R'000       R'000     R'000      R'000       R'000     R'000
Discounts provided
to tenants         166 300       6 620   172 920          -           -         -
Tenant arrears 
written off         18 607       3 168    21 775      5 188       2 367     7 555
Net arrears at 
period-end          63 516       3 524    67 040     27 013       5 678    32 691


The contribution from the Group's listed investments towards distributable 
earnings increased by R146 million during FY2021. This is mainly as a result of 
NEPI Rockcastle not declaring a dividend for the six months ended June 2020 and 
Resilient not including the NEPI Rockcastle capitalisation issue in the amount 
available for distribution for FY2020.

FY2020 benefitted from R220 million of interest earned on EUR221 million of 
cross-currency swaps as well as R30 million of capitalised interest. The Group 
had no cross-currency swaps during FY2021 and capitalised R0,7 million of 
borrowing costs. This had a negative impact on distributable earnings, however, 
it was largely offset by lower interest rates in South Africa during FY2021.

Financial performance
 
                               Note        Audited         Audited 
                                           for the         for the
                                        year ended      year ended
                                         June 2021       June 2020     Movement
IFRS information
Total revenue (R'000)*            A      2 864 764       3 593 679     (728 915) 
Basic earnings/(loss) 
per share (cents)*                B          76,90         (995,08)    1 071,98
Diluted earnings/(loss) 
per share (cents)*                B          76,77         (995,08)    1 071,85
Headline earnings/(loss) 
per share (cents)*                B          70,16         (672,09)      742,25
Diluted headline earnings/
(loss) per share (cents)*         B          70,04         (672,09)      742,13
Dividend (cents per share)                  428,81          368,44        60,37
Net asset value (R)                          52,13           53,84        (1,71) 
Management account information
Net asset value (R)                          60,24           55,49         4,75
Loan-to-value ratio (%)           C           28,8            35,2         (6,4) 
Gross property expense ratio (%)              37,3            38,2         (0,9) 
Percentage of direct and indirect 
property assets offshore (%)                  25,4            27,8         (2,4)


* Represents continuing operations. The Board resolved to dispose of Resilient's 
operations in Nigeria and as such the Nigerian operations have been classified 
as discontinued operations at the reporting date.

Notes:
A  FY2021 included revenue from NEPI Rockcastle of R125,4 million compared to 
the R729,3 million of FY2020.
B  The movement can be attributed to the following:


                                                Audited         Audited 
                                                for the         for the
                                             year ended      year ended
                                              June 2021       June 2020   
                              Note            R'million       R'million
Revenue from investments         A              125 416         730 734
Fair value gain/(loss) 
on investment property           D              509 100        (841 360) 
Fair value gain/(loss) 
on investments                                  627 708      (3 142 457) 
Fair value gain/(loss) 
on currency derivative                          224 649        (802 092) 
Share of loss of associate       E           (2 201 143)       (239 150)


C  The loan-to-value ratio is calculated by dividing total interest-bearing 
borrowings adjusted for cash on hand and the fair value of derivative financial 
instruments by the total of investments in property, listed securities and 
loans advanced.
D  Fair value gain/(loss) on investment property affects basic and diluted 
earnings/(loss) per share. It does not affect headline and diluted headline 
earnings/(loss) per share.
E  Resilient owned 40,16% of Lighthouse Capital and the investment is equity 
accounted at the reporting date. Resilient's share of the loss of Lighthouse 
during FY2021 was R2,2 billion. Lighthouse recognised a negative fair value 
adjustment on its investment in Hammerson as the investment was fair valued to 
GBP0,163 per share immediately prior to Hammerson becoming its associate. 
Lighthouse further recognised its share of Hammerson's losses since it became 
its associate.

Property performance
South Africa
Resilient's focus on regions with strong economic fundamentals, either through 
mining and resources or export-quality agricultural products, has proved 
defensive. Resilient generally has the dominant offering in its target markets 
and always includes a strong grocery and convenience offering.

Comparable retail sales were affected by the trading restrictions imposed 
as a result of the COVID-19 pandemic. For the 12 months to June 2021, 
retail sales of the South African portfolio increased by 7,9% 
(when compared to the 12 months to June 2020). In April 2020, the level 
5 restrictions resulted in non-essential retailers being unable to trade. 
If the effect of April is excluded, retail sales for the remaining 
11 months of FY2021 increased by 2,1% (when compared to the 
same 11 months of FY2020).

In total, rentals for renewals and new leases (including the cession of 
Edgars leases to Retailability and new leases with TFG in respect of Jet) 
increased by 1,9% on average during FY2021. Administered costs, particularly 
rates and taxes and electricity, are still escalating well ahead of 
inflation and retail sales growth and are affecting tenants' cost of 
occupancy.In a difficult economic environment, Resilient's property 
portfolio recorded net property income growth of 1,1%, excluding the 
COVID-related discounts. Resilient's share of the South African portfolio 
was revalued upwards by 2,2% by Jones Lang LaSalle Proprietary Limited.

Resilient owns 28 retail centres with a GLA of 1,17 million square metres. 
Resilient's pro rata share of the vacancy decreased marginally from 2,4% at 
December 2020 to 2,3% at June 2021.

Acquisition of interest in four shopping centres in France
Resilient has reached agreement with Wereldhave Retail France SAS on the 
acquisition of a 25% interest in four French shopping centres. Lighthouse 
will own the other 75% interest. Resilient's purchase consideration 
amounts to c. EUR76,25 million and related working capital on the 
effective date of 30 September 2021. The shopping centres are situated 
in growing regions in northern France and in cities that will continue 
to benefit from urbanisation. Property management of the shopping centres 
will be contracted to Accessite which manages over 50 shopping centres 
in France.

Prospects
Resilient's property portfolio and listed investments are well positioned to 
prove defensive in the year ahead. Although the economic prospects should 
improve as the COVID-19 pandemic is brought under control, the Board will 
maintain the Group's conservative financial structure. Resilient will continue 
to take advantage of any deep value opportunities that may arise in 
international markets through or in partnership with Lighthouse.

As stated before, the level of uncertainty, particularly relating to the 
pandemic and the distribution that Resilient will receive from its listed 
securities, remains elevated. Under these circumstances, the Board is not in a 
position to provide guidance. The distribution policy remains unchanged and 
Resilient will maintain its payout ratio at 100%.

Change to the Board of Directors
Thando Sishuba has been appointed to the Board as an independent 
non-executive director with effect from 26 August 2021.
Thandos'appointment was made in accordance with Resilient's 
Nomination Policy and to increase the independence and skillset of 
the Board.

Payment of final dividend
The Board has approved and notice is hereby given of a final dividend of 
226,11000 cents per share for the six months ended 30 June 2021.

The dividend is payable to Resilient shareholders in accordance with the 
timetable set out below:

Last date to trade cum dividend                 Tuesday, 14 September 2021
Shares trade ex dividend                      Wednesday, 15 September 2021
Record date                                      Friday, 17 September 2021
Payment date                                     Monday, 20 September 2021


Share certificates may not be dematerialised or rematerialised between 
Wednesday, 15 September 2021 and Friday, 17 September 2021, both days inclusive.
In respect of dematerialised shareholders, the dividend will be transferred to 
the Central Securities Depository Participant accounts/broker accounts on 
Monday, 20 September 2021. Certificated shareholders' dividend payments will be 
posted on or about Monday, 20 September 2021.

The auditor, PKF Octagon Inc., has issued an unmodified audit opinion on the 
consolidated financial statements for the year ended June 2021. The audit was 
conducted in accordance with International Standards on Auditing. The key 
audit matters included in the auditor's report are the valuation of 
investment properties and the compliance with debt covenants. The preliminary 
summarised report ("full announcement") has been audited by PKF Octagon Inc. 
and an unmodified audit opinion has been issued.

This short-form announcement is the responsibility of the directors and is 
only a summary of the information in the full announcement released on SENS 
and does not include full or complete details. The full announcement can be 
found on the Company's website at 
https://www.resilient.co.za/downloads.htm?Subcategory=2021 
and can be accessed using the following 
JSE link:https://senspdf.jse.co.za/documents/2021/jse/isse/rese/FY2021.pdf 
The full announcement, the consolidated financial statements and the audit 
reports are available for inspection at the registered offices of the Company 
or its sponsor, at no charge, during office hours. Any investment decision 
should be based on the full announcement available on the Company's website.

In accordance with Resilient's status as a REIT, shareholders are advised that 
the dividend of 226,11000 cents per share for the six months ended 30 June 2021 
("the dividend") meets the requirements of a "qualifying distribution" for the 
purposes of section 25BB of the Income Tax Act, 58 of 1962 ("Income Tax Act"). 
The dividend will be deemed to be a dividend, for South African tax purposes, 
in terms of section 25BB of the Income Tax Act.

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 exemption, 
contained in paragraph (aa) of section 10(1)(k)(i) of the Income Tax Act) 
because it is a dividend distributed by a REIT. This dividend is, however, 
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 their CSDP or broker, as the case may be, in respect of 
uncertificated shares, or the Company, in respect of certificated shares:
a)   a declaration that the dividend is exempt from dividends tax; and
b)   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 ceases 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.

Dividends received by non-resident shareholders will not be taxable as income 
and instead 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. Any distribution 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. Assuming 
dividend withholding tax will be withheld at a rate of 20%, the net dividend 
amount due to non-resident shareholders is 180,88800 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 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)   a declaration that the dividend is subject to a reduced rate as a result 
of the application of a DTA; and 
b)   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 ceases 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.

Shares in issue at the date of declaration of this dividend: 400 126 254

Resilient's income tax reference number: 9579269144

By order of the Board

Des de Beer                               Monica Muller
Chief executive officer                   Chief financial officer

Johannesburg
26 August 2021



Directors
Alan Olivier (chairman); Stuart Bird; David Brown; Thembi Chagonda; 
Des de Beer*; Des Gordon; Nick Hanekom*; Johann Kriek*; Dawn Marole; Monica Muller*; 
Protas Phili; Umsha Reddy; Barry van Wyk
(* executive director)

Company secretary
Ashleigh Egan

Registered address
4th Floor, Rivonia Village, Rivonia Boulevard, Rivonia, 2191

Transfer secretaries
Link Market Services South Africa Proprietary Limited, 13th Floor, 
19 Ameshoff Street, Braamfontein, 2001

Sponsor
Java Capital Trustees and Sponsors Proprietary Limited, 6th Floor, 1 Park Lane, 
Wierda Valley, Sandton, 2196

Debt sponsor
Rand Merchant Bank (a division of FirstRand Bank Limited)
1 Merchant Place, corner of Fredman Drive and Rivonia Road, Sandton, 2196

Date: 26-08-2021 05:10:00
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