14 May - 6 min read

Short-Form Announcement: Reviewed Financial Results And Dividend Declaration For The Year Ended 28 February 2021

Short-Form Announcement: Reviewed Financial Results And Dividend Declaration For The Year Ended 28 February 2021

SPEAR REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2015/407237/06)
Share code: SEA
ISIN: ZAE000228995
Approved as a REIT by the JSE
(“Spear” or “the Company”)


SHORT-FORM ANNOUNCEMENT: REVIEWED FINANCIAL RESULTS AND DIVIDEND
DECLARATION FOR THE YEAR ENDED 28 FEBRUARY 2021

1.   SALIENT FEATURES

     Distributable income per share (“DIPS”) decreased by 19.94% to 73.38 cents per share,
     from 91.66 cents per share in the prior corresponding period.

     Distribution per share (“DPS”) decreased by 35.95% to 58.70 cents per share, from 91.66
     cents per share in the prior corresponding period.

     Final DPS for the 6 months ending 28 February 2021 decreased by 37.56% to 29.36 cents
     per share from 47.02 cents per shares in the prior corresponding period.

     Pay-out ratio for the financial year was 80% of DIPS. 100% in prior corresponding period.

     Collections for the financial year is 97.79% vs billings as measured at 30 April 2021.

     Management has successfully renewed/re-let 205 714 sqm at a negative reversion of
     3.70%.

     Net asset value per share decreased by 5.57% to 1153 cents per share, from 1221 cents
     per share in the prior corresponding period.

     Portfolio occupancy rate of 93.84% and 100% Western Cape based.

     Investment property value increased 7.46% to R4.50 billion, from R4.18 billion in the prior
     corresponding period.

     Loan to Value increased to 45.81%, from 39.63% reported at 28 February 2020.

     Revenue increased by 0.76% to R531 million, from R527 million in the prior corresponding
     period.

     Headline earnings per share decreased by 22.60% to 76.70 cents per share, from 99.09
     cents per share in the prior corresponding period.

     Earnings per share decreased by 75.35% to 25.48 cents per share, from 103.37 cents
     per share in the prior corresponding period.


2.   DIVIDEND DECLARATION

     The directors resolved to declare a final gross dividend of 29.35995 cents per share from
     income reserves in respect of the financial year ending 28 February 2021. The dividend
     amount, net of South African dividend tax of 20%, is 23.48796 cents per share for those
     shareholders who are not exempt from dividend withholding tax or are not entitled to a
     reduced rate in terms of the applicable double-tax agreement. The number of ordinary
     shares in issue at the declaration date is 214 615 571 and the income tax number of the
     Company is 9068437236.

     The salient dates of the dividend declaration are:

     Declaration date                                           Wednesday, 14 May 2021
     Last day to trade cum dividend                             Tuesday, 01 June 2021
     Trading ex-dividend commences                              Wednesday, 02 June 2021
     Record date                                                Friday, 04 June 2021
     Date of payment                                            Monday, 07 June 2021

     Share certificates may not be dematerialised or rematerialised between Wednesday, 02
     June 2021 and Friday, 04 June 2021, both days inclusive.

     Tax implications
     As Spear is a REIT, the distribution meets the definition of a ‘qualifying distribution’ for the
     purposes of section 25BB of the Income Tax Act, No. 58 of 1962 (Income Tax Act).
     Qualifying distributions received by South African tax residents will form part of their gross
     income in terms of section 10(1)(k)(i)(aa) of the Income Tax Act. Consequently, these
     distributions are treated as income in the hands of the shareholders and are not subject
     to dividends withholding tax. The exemption from dividends withholding tax is not
     applicable to non-resident shareholders, but they may qualify for relief under a tax treaty.

     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 Central Securities Depository Participant (“CSDP”) or broker in respect of
     uncertificated shares, or to the company, in respect of certificated shares:
     a) a declaration that the dividend is exempt from dividend tax; and
     b) 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 above-mentioned documents to be submitted prior to payment of the dividend, if such
     documents have not already been submitted.

     Non-residents shareholders
     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. 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 23.48796 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 company to
     arrange for the above-mentioned documents to be submitted prior to payment of the
     dividend, if such documents have not already been submitted.

     Holders of uncertificated shares have to ensure that they have verified their residence
     status with their CSDP or broker. Holders of certificated shares will be asked to complete
     a declaration to the company.


3.   SHORT-FORM ANNOUNCEMENT

     This short-form announcement is the responsibility of the directors of the Company. It
     contains only a summary of the information in the full announcement (“Full
     Announcement”) and does not contain full or complete details. The Full Announcement
     can be found at:
     https://senspdf.jse.co.za/documents/2021/JSE/ISSE/SEAE/SEAFY21.pdf

     Copies of the Full Announcement is also available for viewing on the Company’s website
     at    https://spearprop.co.za/pdf/investor-relations/spear-final-results-feb-2021.pdf. In
     addition, electronic copies of the Full Announcement may be requested and obtained, at
     no charge, from the Company at info@spearprop.co.za and from PSG Capital.

     Any investment decisions by investors and/or shareholders should be based on
     consideration of the Full Announcement, as a whole.

     The Company has based this short-form on the financial results for the year ended 28
     February 2021 which have been reviewed by the Company’s auditors, BDO South Africa,
     who expressed an unmodified review conclusion.

4.   RESULTS PRESENTATION

     Shareholders are invited to view Spear’s year-end results presentation to be broadcasted
     on YouTube at 10:00 am SAST on Friday, 14 May 2021.

     Presentation details:
        - View and listen mode
        - Link: https://youtu.be/UaS9vZX8ovI
        - Presentation slides will be made available on Spear's website shortly before the
          broadcast of the presentation under investor relations / financial results /
          presentations, at the following link: https://spearprop.co.za/investor-relations/
        - Questions may be e-mailed during the presentation to: info@spearprop.co.za


14 May 2021

Sponsor
PSG Capital

Date: 14-05-2021 07:05:00
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