Wrap Text
Condensed unaudited consolidated interim financial statements for the six months ended 31 December 2018
Resilient Reit Limited
Incorporated in the Republic of South Africa
Reg no 2002/016851/06
JSE share code RES ISIN ZAE000209557
Company code BIRPIF
("Resilient" or "the Company" or "the Group")
(Approved as a REIT by the JSE)
www.resilient.co.za
Condensed unaudited consolidated interim financial statements
for the six months ended 31 December 2018
Directors' commentary
Nature of the business
Resilient is an internally asset managed Real Estate Investment Trust ("REIT")
listed on the JSE Limited. Its strategy is to invest in dominant regional retail
centres with a minimum of three anchor tenants and let predominantly to national
retailers. A core competency is the successful development of new malls and
extensions to existing malls.
Resilient also invests in listed and offshore property-related assets.
Distributable earnings
The Board has declared a dividend of 263,66 cents per share for the interim
period ended December 2018. The operational performance of the portfolio
was sound. However, this dividend is not comparable to that of the prior
interim period as a result of the distribution of Fortress B shares to
Resilient shareholders in May 2018 and as a consequence there is no
inclusion of any income relating to this investment in the period under
review. If the effect of the Fortress B distribution in the comparative
period is eliminated then the dividend for December 2018 only declined
by 2,2%. In addition, for the December 2017 interim period, Resilient
calculated its dividend to be declared by including the amount of interest
earned on the loans it advanced to the Siyakha Trusts. This was in the
context of the Siyakha Trusts having positive net asset values. For
December 2018, when the Siyakha Trusts' total liabilities exceeded its
total assets, Resilient calculated distributable earnings by recognising
interest accrued on the loans advanced to the Siyakha Trusts only to the
extent that the accrued interest was matched by dividends declared for
the same period in respect of the shares held by the Siyakha Trusts.
Commentary on results
South Africa
The sales growth for the portfolio was 4,7% and was in line with the inflation
rate for the comparable period. This is positive in light of the difficult
economic environment.
The comparable sales growth per province is set out below (Limpopo Mall,
excluding its taxi centre component, Mams Mall and The Crossing Mokopane
were excluded as these were under development):
Comparable Percentage of
sales growth SA properties
% by value
Mpumalanga 9,6 15,3
North West 9,2 5,8
KwaZulu-Natal 4,7 21,1
Limpopo 3,9 23,0
Northern Cape 3,8 6,4
Gauteng 2,2 25,0
Eastern Cape 0,3 3,4
Mpumalanga's outstanding performance was largely due to comparable sales growth
of 18,8% at I'langa Mall. The mall is fully let and has entrenched its
dominant position in the province. Secunda Mall's 8,2% comparable sales growth
was also pleasing.
The strong performance in the North West can be attributed to Mahikeng Mall's
19,7% sales growth. This is the result of an improved tenant profile which
attracts shoppers from the traditional CBD.
Circus Triangle in the Eastern Cape, albeit a small contributor, was negatively
affected by a taxi dispute. This will be remedied by improved direct access to
the mall from an adjacent taxi rank and the introduction of a second food
anchor.
The Northern Cape's performance was disappointing despite a good performance at
Village Mall Kathu where sales growth of 7,1% was recorded. This is due to the
subdued economic activity in Kimberley, where Diamond Pavilion only grew by
1,3%. Continued good sales growth is expected in Kathu on the back of
increased demand and high prices achieved for iron ore.
Resilient actively assesses the tenant profile and mix within each of its
centres. On average, expiring leases with tenants that remained in occupation
were renewed at a 1,3% increase on expiring rentals whilst leases concluded
with new tenants were 6,3% higher than the rentals of the outgoing tenants.
Property acquisitions and extensions
Resilient increased its interest in Mahikeng Mall from 85% to 90% at a yield
of 8,25% effective from July 2018.
The extension to The Crossing Mokopane was completed in November 2018 at a cost
of R80,9 million and at a yield of 8,5%. The Checkers, Woolworths and Truworths
stores were expanded; Sportscene, Cross Trainer, Skipper Bar and Side Step were
introduced and a multi-level parking facility was constructed. This has
favourably impacted on retail sales of the entire centre and reinforced its
dominant position in the greater Mokopane.
The 56 000m2 GLA extension to Mams Mall opened on schedule in November 2018.
A number of new tenants including Woolworths and Planet Fitness are in the
process of fit-out and are not yet open for trading. Despite this, the
footfall and trading figures are in line with projections. Construction of
a free-standing Builders Superstore adjacent to the mall has commenced.
New residential construction in the surrounding catchment area continues
at a rapid pace which bodes well for the future of the mall.
The final portion of land required for the extension of Irene Village Mall
has been transferred. The local authority has served notices on land owners
affected by the planned substantial improvement to the road network in the
area. These upgrades will significantly improve access to the mall. The
Board is awaiting clarity on Edcon's financial position prior to approving
the extension to the mall.
Substantial progress was achieved with Resilient's solar photovoltaic
installation roll-out. The installations at Brits Mall, Diamond Pavilion
and Mams Mall were completed and are online. The installations at Galleria
Mall, I'langa Mall and Village Mall Kathu commenced and will be online by
June 2019.
Vacancies
Resilient owns 28 retail centres with a GLA of 1,17 million square metres.
The portfolio was 1,8% (Resilient's pro rata share) vacant at December 2018.
Mams Mall (50% owned) had a vacancy of 10,9% at the interim reporting period
end that has since reduced to 6,7%.The current portfolio vacancy is therefore
1,6%.
Edcon
Resilient previously agreed to the closure of the six free-standing Boardmans
stores in the portfolio and also to the reduction of the three Jet Mart
stores to the smaller Jet format. This reduced the exposure to Edcon to 6,4%
(Edgars 3,5%, Jet 1,9%) of contractual rental income at December 2018. The Jet,
CNA and Red Square stores continue to trade well. The exposure to Edgars
remains a concern. With the low vacancies at Resilient's malls, space that
becomes available could be re-let. This will, however, result in periods of
lost income and additional redevelopment and fit-out costs.
Nigeria
Resilient owns 60,94% of Resilient Africa in partnership with Shoprite Checkers.
Resilient Africa, together with local partners, owns Asaba Mall, Delta Mall,
Owerri Mall and a well-located property with retail rights in Port Harcourt.
Vacancies in the malls have reduced from 6,3% at June 2018 to 5,0% at
December 2018.
The Nigerian economy grew by 1,9% in 2018 which supported increased footfall
and growth in retail sales.
National elections are due to be held in February 2019 and will probably result
in a period of uncertainty until there is clarity on the new government and
its policies. The International Monetary Fund ("IMF") forecasts GDP growth of
2,3% for the 2019 calendar year.
Listed portfolio
Resilient
Dec 2018 Jun 2018
Number of Fair value Number of Fair value
shares R'000 shares R'000
Fortress B (FFB)# - 5 309 515 79 908
NEPI Rockcastle (NRP) 74 964 444 8 470 982 75 140 000 9 201 644
8 470 982 9 281 552
Lighthouse (LTE)* 102 618 098 810 683 2 052 361 996 2 709 119
9 281 665 11 990 671
# The remaining Fortress B position was sold during the period.
* During this interim period Lighthouse Capital (previously Greenbay Properties)
returned capital to its shareholders and effected a share consolidation at a
ratio of 1 for 20. Lighthouse was treated as an associate (equity accounted).
The investment was impaired as its carrying value exceeded its recoverable
amount.
The Siyakha Trusts
Dec 2018 Jun 2018
Number of Fair value Number of Fair value
shares R'000 shares R'000
Fortress A (FFA) 947 525 17 273 947 525 14 592
Fortress B (FFB) 135 870 288 1 970 119 135 870 288 2 044 848
1 987 392 2 059 440
Resilient (RES)* 52 182 504 2 974 403 52 182 504 2 935 266
4 961 795 4 994 706
*Shares are held in treasury.
Broad-based black economic empowerment ("B-BBEE")
A circular dealing with the restructuring of the Siyakha Trusts to achieve
separate B-BBEE ownership vehicles for Resilient and Fortress is being
prepared. The restructuring is expected to be finalised by June 2019.
Changes to the board
Bryan Hopkins retires from the Board on 15 February 2019. The Board expresses
its gratitude for his many years of hard work, particularly
over the past 14 months. Following Bryan Hopkins' retirement, David Brown has
been appointed chairman of the audit committee.
Stuart Bird, the previous CEO of Mr Price Group, has joined the Board as
an independent non-executive director effective from 1 February 2019.
Financial commentary
Loan-to-value ratio, funding and facilities
Following the receipt of the proceeds from the disposal of the Portuguese
assets of R1,1 billion and R2,1 billion received as a return of capital from
Lighthouse, Resilient repaid R915 million of notes under its DMTN programme
and R778 million of bank facilities.
The remaining funds were deposited into the Group's access facilities.
Resilient reduced cross-currency swaps by EUR42 million, being the pro rata
share of Euro denominated debt, following the return of capital from Lighthouse.
The loan-to-value ratio of the Group was 25,7% at December 2018. This ratio is
based on the management accounts and excludes the debt of the Siyakha Trusts
owed to Fortress for which there is no recourse to Resilient.
To date, 3 920 125 Resilient shares were acquired through the open market
at an average price of R54,23 and are held in treasury.
Resilient has secured a new R570 million bank facility with direct property
as collateral. The Company's underlying business remains sound and the Board
is confident that it will be able to successfully renew expiring facilities.
Facility Amount Average
expiry 'million margin
South Africa
Jun 2019 R874 3-month Jibar+1,46%
Jun 2020 R4 554 3-month Jibar+1,66%
Jun 2021 R2 155 3-month Jibar+1,94%
Jun 2022 R3 148 3-month Jibar+1,89%
Jun 2023 R1 241 3-month Jibar+1,69%
Jun 2024 R270 3-month Jibar+1,80%
R12 242 3-month Jibar+1,76%
Nigeria
Mar 2024 USD45 90-day US Libor+6,25%
All facilities represent Resilient's proportionate share.
The funding in Nigeria is secured by the respective investment properties
and there is no recourse to Resilient's South African balance sheet.
Interest rate derivatives
The following interest rate derivatives are in place in mitigation of
South African interest rate risk:
Interest rate Amount Average
swap expiry R'million swap rate %
Jun 2020 300 6,15
Jun 2021 1 000 7,68
Jun 2022 300 8,08
Jun 2023 100 7,91
Jun 2024 500 7,78
Jun 2025 100 7,78
2 300 7,57
Interest rate Amount Average
cap expiry R'million cap rate %
Jun 2020 300 7,54
Jun 2021 300 7,92
Jun 2023 500 7,77
Jun 2024 1 100 7,98
Jun 2027 500 8,22
Jun 2028 500 7,92
3 200 7,93
The all-in weighted average cost of funding of Resilient was 9,00% at
December 2018 and the average hedge term was 4,1 years.
The following interest rate derivatives are in place in mitigation of foreign
interest rate risk:
Amount Average Amount Average
Interest rate cap expiry EUR'000 cap rate % USD'000 cap rate %
Jun 2022 67 500 0,39
Jun 2023 67 500 0,52 22 000 2,42
Jun 2024 42 500 0,39
Jun 2025 22 500 0,48
200 000 0,44 22 000 2,42
Offshoare
listed in
Exposure to South Africa South Africa Nigeria
variable interest rates '000 '000 '000
Interest-bearing borrowings R9 970 617
Currency derivatives (R3 595 263) R3 595 263
Foreign denominated debt (R394 327) R394 327
Loans to co-owners (R593 184)
Tenant loans advanced (R27 110)
Cash and cash equivalents (R639 160) (R10 047)
Capital commitments contracted for R244 553
Capital commitments approved R27 000
R4 993 126 R3 595 263 R384 280
Exchange rate 16,27 14,35
Exposure R4 993 126 EUR220 975 USD26 779
Interest rate derivatives
- swaps/caps R5 500 000 EUR200 000 USD22 000
Percentage hedged 110,2% (R) 90,5% (EUR) 82,2% (USD)
Currency derivatives
Balance sheet hedging
The Board's policy is to use cross-currency swaps to mitigate exposure to
foreign currency risk on its investments in Lighthouse and NEPI Rockcastle.
This has the effect of obtaining funding in currencies similar to that of the
underlying foreign investments. At December 2018, cross-currency swaps
totalled EUR221 million at an exchange rate of R16,27 against investments
of EUR564 million.
Income hedging
Foreign income is hedged in line with the following policy:
- Hedge 100% of the income projected to be received in the following 12 months;
- Hedge 67% of the income projected to be received in months 13 to 24; and
- Hedge 33% of the income projected to be received in months 25 to 36.
In line with this policy, the following hedges are currently in place:
NEPI
Lighthouse Rockcastle Nigeria
Forward rate against R EUR EUR USD
Jun 2019 R18,91 R18,28 R14,37
Dec 2019 R18,89 R17,85 R14,39
Jun 2020 R20,12 R18,85 R15,05
Dec 2020 R19,79 R19,05 R14,23
Jun 2021 R22,91 R20,27 R15,77
Due to the volatility in the exchange rates, 33% of the income projected to be
received for each of December 2020 and December 2021 has not yet been hedged.
Summary of financial performance
Dec Jun Dec Jun
2018 2018 2017 2017
Dividend (cents
per share) 263,66 258,98 306,46 297,07
Shares in issue
for IFRS 368 851 371 371 536 240 371 771 496 352 056 149
Shares held
in treasury:
Resilient Properties 3 920 125 1 235 256 - -
Shares held
in treasury:
the Siyakha Trusts 52 182 504 52 182 504 53 182 504 49 204 060
Shares in issue
and used for
dividend per share
calculation 424 954 000 424 954 000 424 954 000 401 260 209
Management account
information
Net asset value
per share R64,65* R66,18* R105,35 R89,44
Loan-to-value ratio (%)** 25,7 30,1 20,1 24,8
Net property expense
ratio (%) 17,4 16,8 18,5 15,4
Gross property
expense ratio (%) 36,1 35,0 36,1 35,6
Net total expense ratio (%) 16,1 15,9 15,5 13,7
Gross total expense
ratio (%) 30,9 29,3 28,5 28,1
IFRS accounting
Net asset value per share R59,42 R61,49 R106,75 R81,38
* The Group's claims against the Siyakha Trusts exceed the value of the shares
held as collateral. Under these circumstances, for calculating the net asset
value per Resilient share, the total equity attributable to equity holders
should be reduced by the loans the Group advanced to the Siyakha Trusts. The
shares held by the Siyakha Trusts should then be ignored in the calculation.
** The loan-to-value ratio is calculated by dividing total interest-bearing
borrowings adjusted for cash on hand by the total of investments in property,
listed securities and loans advanced.
The loan-to-value ratio for the Group's Euro debt was 39,2% and for its
US Dollar debt 48,7% at December 2018.
Special committee feedback
The Board believes that it has done everything reasonable within its power to
investigate allegations of wrongdoing by the Company, its employees and
directors. To date, no allegations have been substantiated by third parties
and our own independent investigations have not revealed any wrongdoing on the
part of the Company, its employees and directors. For more detail on the special
committee's feedback refer to the SENS announcement of 13 December 2018 which
is available on our website. We will continue to assist and support the
Financial Sector Conduct Authority ("FSCA") and look forward to the swift
conclusion of their investigation.
Prospects
Resilient is in the fortunate position of having a conservatively geared
balance sheet with a predominantly strong corporate tenant profile. After
a long bull market, global property markets have entered a period of greater
uncertainty and decreased liquidity. Property markets are cyclical and Resilient
is well-positioned to take advantage of opportunities that may arise.
Economic conditions in South Africa remain challenging. As a result, Resilient's
distribution is forecast to be between 530 and 550 cents per share for the
2019 financial year.
The forecast is based on the assumptions that there is no material deterioration
of the macro-economic environment, that no major corporate failures will occur
and that tenants will be able to absorb the recovery of rising utility costs
and municipal rates. The forecast also assumes that Lighthouse and NEPI
Rockcastle will achieve distributions in line with market expectations.
This forecast and prospects have not been audited, reviewed or reported on
by Resilient's auditor.
By order of the Board
Alan Olivier Des de Beer Nick Hanekom
Chairman Chief executive officer Chief financial officer
Johannesburg
14 February 2019
Condensed consolidated statement of financial position
Unaudited Audited Restated
Dec 2018 Jun 2018 Dec 2017
R'000 R'000 R'000
Assets
Non-current assets 36 239 542 38 678 611 58 467 513
Investment property 23 722 813 22 838 483 21 719 718
Straight-lining of rental
revenue adjustment 440 463 395 407 379 515
Investment property under
development 415 561 796 582 761 508
Investment in and loans to
associate and joint venture 810 683 2 709 119 3 980 363
Investments 10 458 374 11 340 992 30 501 125
Staff incentive loans 39 188 184 657 557 373
Loans to co-owners 147 066 140 124 250 497
Other financial assets 159 172 222 302 269 377
Other assets 46 222 50 945 48 037
Current assets 1 475 288 950 960 1 366 047
Staff incentive loans 2 022 5 461 16 297
Loans to co-owners 447 419 182 537 -
Trade and other receivables 274 182 183 349 225 696
Hammerson equity derivative - - 68 860
Other financial assets 70 114 49 958 536 695
Other assets 20 967 19 616 7 880
Cash and cash equivalents 660 584 510 039 510 619
Non-current asset held for sale - 1 063 057 -
Total assets 37 714 830 40 692 628 59 833 560
Equity and liabilities
Total equity attributable
to equity holders 21 917 564 22 845 898 39 687 245
Stated capital 13 822 359 13 822 359 16 504 668
Treasury shares (4 508 341) (4 363 737) (4 398 919)
Currency translation reserve 204 996 115 481 44 624
Reserves 12 398 550 13 271 795 27 536 872
Non-controlling interests 69 211 52 761 54 873
Total equity 21 986 775 22 898 659 39 742 118
Total liabilities 15 728 055 17 793 969 20 091 442
Non-current liabilities 12 607 505 14 754 431 17 971 113
Interest-bearing borrowings 11 502 861 13 703 284 15 992 402
Other financial liabilities 28 462 40 742 77 776
Deferred tax 99 621 22 917 939 508
Amounts owing to non-controlling
shareholders 976 561 987 488 961 427
Current liabilities 3 120 550 3 039 538 2 120 329
Trade and other payables 362 735 390 680 390 283
Other financial liabilities 64 600 374 156 14 812
Other liabilities 46 210 36 780 11 427
Income tax payable 417 20 406 -
Interest-bearing borrowings 2 646 588 2 217 516 1 703 807
Total equity and liabilities 37 714 830 40 692 628 59 833 560
Condensed consolidated statement of comprehensive income
Unaudited Audited Restated
for the for the for the
six months year six months
ended ended ended
Dec 2018 Jun 2018 Dec 2017
R'000 R'000 R'000
Income statement
Recoveries and contractual
rental revenue 1 389 081 2 620 104 1 292 063
Straight-lining of rental
revenue adjustment 44 560 41 683 26 684
Revenue from direct property
operations 1 433 641 2 661 787 1 318 747
Revenue from investments 480 910 1 205 117 641 115
Total revenue 1 914 551 3 866 904 1 959 862
Fair value (loss)/gain on
investment property,
investments and derivative
financial instruments (749 133) (8 652 225) 5 574 091
Fair value gain on
investment property - 745 274 -
Adjustment resulting from
straight-lining
of rental revenue (44 560) (41 683) (26 684)
Fair value (loss)/gain
on investments (776 651) (9 266 220) 5 416 313
Fair value gain/(loss)
on currency
derivatives 123 039 (107 557) 185 359
Fair value (loss)/gain
on interest rate
derivatives (50 961) 17 961 (897)
Property operating expenses (508 064) (931 041) (472 543)
Administrative expenses (52 592) (153 279) (60 127)
Foreign exchange (loss)/gain (20 022) 76 386 (36 558)
Profit on sale of interest
in associate - 3 538 393 3 538 393
Profit on sale of Locaviseu 17 818 - -
Donations received by The Siyakha 1
Education Trust - 16 000 -
Impairment of investment
in associate (19 495) (126 419) -
Impairment of staff incentive
loans receivable (20 956) (72 685) -
Impairment of loans receivable - (33 876) -
Amortisation of interest
rate cap premiums (4 723) (6 972) -
Income/(loss) from associate
and joint venture 256 706 (179 466) (5 036)
- distributable 86 579 237 229 108 569
- non-distributable 170 127 (416 695) (113 605)
Profit/(loss) before net
finance costs 814 090 (2 658 280) 10 498 082
Net finance costs (639 017) (1 513 761) (802 748)
Finance income 40 667 86 652 39 695
Interest received:
loans and cash balances 40 667 86 652 39 695
Finance costs (679 684) (1 600 413) (842 443)
Interest on borrowings (709 710) (1 655 891) (871 124)
Capitalised interest 30 026 55 478 28 681
Profit/(loss) before income tax 175 073 (4 172 041) 9 695 334
Income tax (91 600) 866 648 (27 781)
Profit/(loss) for the period 83 473 (3 305 393) 9 667 553
Other comprehensive
income/(loss) net of tax
Items that may subsequently
be reclassified to profit or loss
Exchange differences realised on
disposal of Locaviseu (4 637) - -
Exchange differences on
translation of foreign operations 124 847 (21 215) (9 789)
Total comprehensive
income/(loss) for the period 203 683 (3 326 608) 9 657 764
Profit/(loss) for the period
attributable to:
Equity holders of the Company 61 354 (3 320 347) 9 667 805
Non-controlling interests 22 119 14 954 (252)
83 473 (3 305 393) 9 667 553
Total comprehensive income/(loss)
for the period attributable to:
Equity holders of the Company 176 824 (3 346 165) 9 665 250
Non-controlling interests 26 859 19 557 (7 486)
203 683 (3 326 608) 9 657 764
Basic earnings/(loss)
per share (cents) 16,57 (900,37) 2 645,73
Resilient has no dilutionary instruments in issue.
Condensed consolidated statement of cash flows
Unaudited Audited Restated
for the for the for the
six months year six months
ended ended ended
Dec 2018 Jun 2018 Dec 2017
R'000 R'000 R'000
Operating activities
Cash generated from operations 1 273 072 2 689 320 1 011 009
Interest paid (616 084) (1 659 285) (871 124)
Dividends paid (960 518) (2 296 325) (1 127 822)
Income tax paid (34 885) (1 756) -
Cash outflow from
operating activities (338 415) (1 268 046) (987 937)
Investing activities
Development and improvement
of investment property (407 258) (714 840) (289 092)
Acquisition of investment property (77 694) - -
Increase of interest in associate - (942 859) (788 035)
Return of capital by associate 2 134 702 - -
Loans to joint venture repaid - - 1 701
Loans to joint venture advanced - (21 714) -
Acquisition of interest in
joint venture - (22 806) -
Share purchase trust loans advanced - (100 459) -
Share purchase trust loans repaid 124 553 450 286 54 179
Co-owner loans advanced (271 824) (110 165) (38 001)
Tenant loans repaid/(advanced) 5 585 (33 245) (2 479)
Acquisition of investments - (370 547) (285 840)
Proceeds on disposal
of investments 105 967 2 489 911 517 253
Proceeds on disposal
of Locaviseu 1 063 258 - -
Cash flow on Hammerson
equity derivative - 21 647 45 447
Interest received 44 066 101 871 39 695
Cash flow on currency derivatives (206 397) 187 345 (449 474)
Cash flow on interest
rate derivatives (5 972) (134 361) (65 126)
Cash inflow/(outflow)
from investing activities 2 508 986 800 064 (1 259 772)
Financing activities
Decrease in interest-bearing
borrowings (1 864 977) (2 305 590) (533 575)
Acquisition of additional
interest in subsidiaries (10 445) (34 356) (34 356)
Proceeds on disposal of
treasury shares - 69 671 9 979
Acquisition of treasury shares (144 604) (341 176) (273 192)
Raising of stated capital - 2 733 706 2 733 706
Cash (outflow)/inflow
from financing activities (2 020 026) 122 255 1 902 562
Increase/(decrease) in
cash and cash equivalents 150 545 (345 727) (345 147)
Cash and cash equivalents
at the beginning of the period 510 039 855 766 855 766
Cash and cash equivalents
at the end of the period 660 584 510 039 510 619
Cash and cash equivalents
consist of:
Current accounts 660 584 510 039 510 619
Cash flow from investing activities includes the following items available
for distribution: net interest received on interest rate derivatives and
cross-currency swaps of R139 million, interest received on loans and cash
balances of R44 million and realised profits on forward exchange contracts
of R57 million. Trade and other receivables include dividends of R87 million
from Lighthouse that were received on 7 January 2019.
Condensed consolidated statement of changes in equity
Currency
Stated Treasury translation
capital shares reserve
Unaudited R'000 R'000 R'000
Balance at Jun 2017 13 521 054 (3 881 621) 59 380
Issue of shares 2 983 614
Resilient shares held by
the Siyakha Trusts (517 298)
Acquisition of additional
interest in subsidiaries
Exchange differences realised on
disposal of associate 6 346
Exchange differences on
translation of
foreign operations (2 555)
Profit/(loss) for the period
Dividend paid
Transfer to currency
translation reserve (18 547)
Balance at Dec 2017 16 504 668 (4 398 919) 44 624
Resilient shares held by
the Siyakha Trusts 103 166
Shares acquired and held
in treasury (67 984)
Distribution of Fortress
B shares as a
return of capital (2 682 309)
Equity contributed by
non-controlling shareholders
Exchange differences
on translation of
foreign operations (23 263)
(Loss)/profit for the period
Dividend paid
Transfer to currency
translation reserve 94 120
Balance at Jun 2018 13 822 359 (4 363 737) 115 481
Shares acquired and held
in treasury (144 604)
Acquisition of additional
interest in subsidiaries
Exchange differences
realised on
disposal of Locaviseu (4 637)
Exchange differences
on translation of
foreign operations 120 107
Profit for the period
Dividend paid
Transfer to currency
translation reserve (25 955)
Balance at Dec 2018 13 822 359 (4 508 341) 204 996
Equity
attri-
butable Non-
to equity controlling Total
Reserves holders interests equity
Unaudited R'000 R'000 R'000 R'000
Balance at Jun 2017 18 950 569 28 649 382 120 311 28 769 693
Issue of shares 2 983 614 2 983 614
Resilient shares held
by the Siyakha Trusts 4 177 (513 121) (513 121)
Acquisition of additional
interest in subsidiaries (8) (8) (34 348) (34 356)
Exchange differences
realised on disposal
of associate 6 346 6 346
Exchange differences
on translation of
foreign operations (2 555) (7 234) (9 789)
Profit/(loss) for
the period 9 667 805 9 667 805 (252) 9 667 553
Dividend paid (1 104 218) (1 104 218) (23 604) (1 127 822)
Transfer to currency
translation reserve 18 547 - -
Balance at Dec 2017 27 536 872 39 687 245 54 873 39 742 118
Resilient shares held
by the Siyakha Trusts (43 474) 59 692 59 692
Shares acquired and
held in treasury (67 984) (67 984)
Distribution of
Fortress B shares
as a return of capital (2 682 309) (2 682 309)
Equity contributed by
non-controlling
shareholders 17 17
Exchange differences
on translation of
foreign operations (23 263) 11 837 (11 426)
(Loss)/profit for
the period (12 988 152) (12 988 152) 15 206 (12 972 946)
Dividend paid (1 139 331) (1 139 331) (29 172) (1 168 503)
Transfer to currency
translation reserve (94 120) - -
Balance at Jun 2018 13 271 795 22 845 898 52 761 22 898 659
Shares acquired and
held in treasury (144 604) (144 604)
Acquisition of additional
interest in subsidiaries (36) (36) (10 409) (10 445)
Exchange differences
realised on disposal
of Locaviseu (4 637) (4 637)
Exchange differences
on translation of
foreign operations 120 107 4 740 124 847
Profit for the period 61 354 61 354 22 119 83 473
Dividend paid (960 518) (960 518) (960 518)
Transfer to currency
translation reserve 25 955 - -
Balance at Dec 2018 12 398 550 21 917 564 69 211 21 986 775
Notes
1. Preparation and accounting policies
The condensed unaudited consolidated interim financial statements have been
prepared in accordance with and contain the information required by IAS 34:
Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by
the Accounting Practices Committee and Financial Reporting Pronouncements as
issued by the Financial Reporting Standards Council, the JSE Limited Listings
Requirements and the requirements of the Companies Act of South Africa. This
report complies with the SA REIT Association Best Practice Recommendations.
This report was compiled under the supervision of Nick Hanekom CA(SA), the
chief financial officer.
The accounting policies applied in the preparation of the condensed
consolidated interim financial statements are consistent with the accounting
policies applied in the preparation of the previous consolidated financial
statements, with the exception of the adoption of new and revised standards
which became effective during the period.
The Group's investment properties are valued internally by the directors
at interim reporting periods and externally by an independent valuer for
year-end reporting. In terms of IAS 40: Investment Property and IFRS 7:
Financial Instruments: Disclosure, investment properties are measured at
fair value and are categorised as level 3 investments.
The revaluation of investment property requires judgement in the
determination of future cash flows from leases and an appropriate
capitalisation rate which varies between 7,3% and 9,3%.
Changes in the capitalisation rate attributable to changes in market
conditions can have a significant impact on property valuations. A 25
basis points increase in the capitalisation rate will decrease the value
of investment property by R714,2 million. A 25 basis points decrease
in the capitalisation rate will increase the value of investment
property by R760,1 million. A 1% increase in vacancy for a full year
will decrease the value of investment property by R295,5 million.
A change in the assumption on maintenance cost will not have a
significant impact on the fair value of investment property.
In terms of IFRS 9: Financial Instruments and IFRS 7, the Group's
currency and interest rate derivatives are measured at fair value
through profit or loss and are categorised as level 2 investments.
In terms of IFRS 9, investments are measured at fair value being
the quoted closing price at the reporting date and are categorised
as level 1 investments.
There were no transfers between levels 1, 2 and 3 during the period.
The valuation methods applied are consistent with those applied in
preparing the previous consolidated financial statements.
The directors are not aware of any matters or circumstances arising
subsequent to December 2018 that require any additional disclosure or
adjustment to the financial statements.
The condensed consolidated interim financial statements have not
been audited or reviewed by Resilient's auditor.
2. Lease expiry profile Based on
Based on contractual
rentable area rental revenue
Lease expiry: South Africa % %
Vacant 1,8
Jun 2019 9,7 11,1
Jun 2020 14,1 17,3
Jun 2021 17,7 20,0
Jun 2022 12,7 14,6
Jun 2023 14,4 15,5
> Jun 2023 29,6 21,5
100,0 100,0
3. Segmental analysis
Unaudited Audited Restated
for the for the for the
six months year six months
ended ended ended
Dec 2018 Jun 2018 Dec 2017
R'000 R'000 R'000
Total assets
Retail: South Africa 23 380 380 22 889 442 21 672 845
Retail: Nigeria 1 392 499 1 320 299 1 287 291
Retail: Portugal - 1 063 057 882 283
Corporate: South Africa 12 930 925 15 397 480 35 978 916
Corporate: Nigeria 11 026 22 350 12 225
37 714 830 40 692 628 59 833 560
Total liabilities
Retail: South Africa 310 295 279 275 254 969
Retail: Nigeria 31 689 25 320 23 222
Corporate: South Africa 14 236 514 16 384 819 18 781 830
Corporate: Nigeria 1 149 557 1 104 555 1 031 421
15 728 055 17 793 969 20 091 442
Total revenue
Revenue from direct
property operations
Retail: South Africa 1 353 845 2 529 296 1 251 170
Retail: Nigeria 79 796 132 491 67 577
Revenue from investments
Corporate: South Africa 473 729 1 205 117 641 115
Revenue from non-current
asset held for sale
Retail: Portugal 7 181 - -
1 914 551 3 866 904 1 959 862
Profit/(loss) for the period
Retail: South Africa 837 744 2 476 050 794 679
Retail: Nigeria 43 273 (41 788) 33 253
Retail: Portugal 24 999 116 727 27 549
Corporate: South Africa (770 773) (5 745 435) 8 903 875
Corporate: Nigeria (51 770) (110 947) (91 803)
83 473 (3 305 393) 9 667 553
Unaudited Audited Restated
for the for the for the
six months year six months
ended ended ended
Reconciliation of profit/(loss) Dec 2018 Jun 2018 Dec 2017
for the period to dividend declared R'000 R'000 R'000
Profit/(loss) for the period 83 473 (3 305 393) 9 667 553
Fair value gain on investment
property - (745 274) -
Fair value loss/(gain) on
investments 776 651 9 266 220 (5 416 313)
Fair value (gain)/loss on currency
derivatives (123 039) 107 557 (185 359)
Realised gain: forward exchange
contracts 57 286 129 129 59 957
Interest received: cross-currency
swaps 145 286 314 008 142 717
Fair value loss/(gain) on interest
rate derivatives 50 961 (17 961) (6 400)
Interest received: interest rate
derivatives 1 259 5 816 -
Interest paid: interest rate
derivatives (7 231) (23 681) (1 913)
Foreign exchange loss/(gain) 20 022 (76 386) 36 558
Profit on sale of interest in
associate - (3 538 393) (3 538 393)
Profit on sale of Locaviseu (17 818) - -
Impairment of investment in
associate 19 495 126 419 -
Impairment of loans receivable - 33 876 -
Non-distributable (gain)/loss
from associates (170 127) 416 695 113 605
Income tax 91 600 (866 648) 27 781
Non-controlling interests (15 169) (31 366) (11 865)
Antecedent dividend (3 585) 22 381 25 449
Income hedging adjustment of
Nigeria and Portugal performance (1 089) 5 391 (989)
Termination of interest rate
derivatives - (14 354) -
Dividends accrued (48 037) (95 285) (20 531)
Amount available for distribution
under best practice 859 938 1 712 751 891 857
Effect of consolidating the
Siyakha Trusts* 235 518 493 323 247 474
- relating to Resilient 131 008 256 029 134 546
- relating to Fortress 104 510 237 294 112 928
Adjustment for revised
distributable earnings relating
to the Siyakha Trusts (122 942) (104 538) -
Reverse interest received on
the loans to the Siyakha Trusts
(Jun 2018: during the second
half of the year) (267 067) (211 680)
Dividends to be received by the
Siyakha Trusts on shares pledged
to Resilient 144 125 141 795
Interest on borrowings to effect
Siyakha restructuring (34 653)
Dividend declared (972 514) (2 101 536) (1 139 331)
Dividend declared - interim (972 514) (1 139 331) (1 139 331)
- total share register (1 120 434) (1 302 314) (1 302 314)
- shares held in treasury:
Resilient Properties 10 336 - -
- shares held in treasury: the
Siyakha Trusts 137 584 162 983 162 983
Dividend declared - final (962 205)
- total share register (1 100 546)
- shares held in treasury:
Resilient Properties 3 199
- shares held in treasury: the
Siyakha Trusts 135 142
- - -
* This is the amount by which the expenses of the Siyakha Trusts exceeded the
dividends it received during the period.
Unaudited Audited Restated
for the for the for the
six months year six months
ended ended ended
Dec 2018 Jun 2018 Dec 2017
R'000 R'000 R'000
Reconciliation of profit/(loss)
for the period to headline earnings
Basic earnings/(loss) -
profit/(loss) for the period
attributable to equity holders 61 354 (3 320 347) 9 667 805
Adjusted for: 40 158 (4 115 565) (3 513 775)
- fair value loss/(gain) on
investment property 43 118 (703 591) 26 684
- profit on sale of interest in
associate - (3 538 393) (3 538 393)
- profit on sale of Locaviseu (17 818) - -
- impairment of investment in
associate 19 495 126 419 -
- exchange differences realised
on disposal of joint venture and
associate (4 637) - 6 346
- income tax effect - - (8 412)
Headline earnings/(loss) 101 512 (7 435 912) 6 154 030
Headline earnings/(loss)
per share (cents) 27,42 (2 016,38) 1 684,14
Basic earnings per share and headline earnings per share are based on the
weighted average of 370 211 202(Jun 2018: 368 775 538; Dec 2017: 365 411 122)
shares in issue during the period.
Resilient has no dilutionary instruments in issue.
4. Restatement of december 2017 financial statements
In line with the June 2018 annual financial statements, the following
restatements are noted in respect of the December 2017 comparative information:
Trade and other receivables and trade and other payables
Balances included in trade and other receivables and trade and other payables
were reclassified. The intention was to separately disclose derivative balances
and loans advanced in a category called other financial assets/liabilities and
also to separate items that do not meet the definition of a financial instrument
into a category called other assets/liabilities in order to enhance disclosure.
The line items impacted by this reclassification are as follows:
Unaudited
Dec 2017
R'000
Other financial assets (non-current) 22 971
Other assets (non-current) 48 037
Trade and other receivables (615 583)
Other financial assets (current) 536 695
Other assets (current) 7 880
Total assets -
Trade and other payables (26 239)
Other financial liabilities (current) 14 812
Other liabilities (current) 11 427
Total liabilities -
Reclassification of derivatives in the statement of comprehensive income
The Group does not apply hedge accounting and as such the following
reclassifications as a result of a prior period error were made:
- Interest paid on interest rate derivatives, together with the fair value
adjustment on interest rate derivatives, was removed from net finance costs
and is now disclosed in the income statement as a fair value loss on interest
rate derivatives;
- The interest received on currency derivatives was removed from net finance
costs and is now included in the fair value gain on currency derivatives in
the income statement; and
- The cash flow on the expiry of forward exchange contracts, previously
included in revenue from investments, has been reclassified to fair value
gain on currency derivatives.
Unaudited
for the
six months
ended
Impact on statement of profit or loss (increase/(decrease) Dec 2017
in profit) R'000
Revenue from investments (59 957)
Fair value gain on currency derivatives 202 674
Fair value loss on interest rate derivatives (897)
Finance income (151 030)
Finance costs 9 210
Net impact on profit for the period -
Restatement of items disclosed in the statement of cash flows (prior
period error)
Interest received on loans of R39,695 million is not revenue in nature and
is ancillary to Resilient's business. As such, since cash flows from
operating activities are primarily derived from the principal revenue-producing
activities of the entity, the cash related to interest received has been
reclassified from operating activities to investing activities.
Tenant loans advanced was previously included in trade and other receivables
and has been reclassified to other financial assets. This resulted in an
increase of R2,479 million in cash generated from operating activities and a
decrease in investing activities.
As derivative contracts are not held for dealing or trading purposes, the
cash flows were reclassified as investing activities. The following
reclassifications were made:
- Interest received on cross-currency swaps, previously classified as cash
flows from operating activities, has been reclassified to cash flow on
currency derivatives in cash flow from investing activities; and
- Interest paid on interest rate derivatives, previously classified as
cash flows from operating activities, has been reclassified to cash flow on
interest rate derivatives in cash flows from investing activities.
Unaudited
for the
six months
ended
Impact on statement of cash flows (increase/(decrease) Dec 2017
in cash flows) R'000
Cash generated from operations (1 562)
Interest received* (142 717)
Interest paid 9 210
Cash flows from operating activities (135 069)
Tenant loans advanced (2 479)
Cash flow on currency derivatives 202 674
Cash flow on interest rate derivatives (65 126)
Cash flows from investing activities 135 069
* Interest received has subsequently been reclassified to investing activities.
Management accounts
Basis of preparation
In order to provide information of relevance to investors these management
accounts, which comprise financial information extracted from the condensed
unaudited consolidated interim financial statements for the six months ended
December 2018, have been prepared and are presented below to provide users
with the position:
- Had the Siyakha Trusts not been consolidated as required by IFRS;
- Had the Group's listed investment in Lighthouse that was accounted for using
the equity method for IFRS been fair valued;
- Had the Group's interest in Locaviseu that was held for sale at June 2018
and disposed of during the period been proportionately consolidated; and
- Had the Group accounted for its share of the assets, liabilities and results
of partially-owned subsidiaries (Resilient Africa and the indirect investments
in Arbour Crossing, Galleria Mall and Mahikeng Mall) on a proportionately
consolidated basis instead of consolidating it.
The pro forma financial information (management accounts) has been prepared in
terms of the JSE Listings Requirements and the SAICA Guide on pro forma
financial information.
This pro forma financial information has not been reviewed or reported on
by Resilient's auditor.
Directors' responsibility statement
The preparation of the management accounts is the sole responsibility of the
directors and have been prepared on the basis stated, for illustrative purposes
only, to show the impact on the condensed consolidated statement of financial
position and the condensed consolidated statement of comprehensive income. Due
to their nature, the management accounts may not fairly present the financial
position and results of the Group in terms of IFRS.
Management account adjustments
Adjustment 1
In order to enhance disclosure, the fair value gain on currency derivatives,
the fair value loss on interest rate derivatives as well as other financial
assets/liabilities have been expanded to present the components thereof.
Adjustment 2
Resilient has no entitlement to or share in the assets of the Siyakha Trusts.
Furthermore, the external debt of the Siyakha Trusts is ring-fenced to the
Siyakha Trusts and as such the Board does not believe that this debt should
impact the loan-to-value ratio of Resilient. It is for these reasons that the
Siyakha Trusts are deconsolidated in the preparation of the management accounts.
The management accounts provide a true reflection of the assets under
management of Resilient.
Adjustment 3
The investment in Lighthouse is reflected at its fair value by multiplying
the 102 618 098 shares held by the quoted closing price at 31 December 2018.
All entries recorded to account for this investment using the equity method
are reversed. This more accurately reflects the Group's assets and liabilities.
Adjustment 4
This adjustment proportionately consolidates the indirect investments in
Forum Coimbra and Forum Viseu that were held through Locaviseu and accounted
for as a non-current asset held for sale in terms of IFRS 5 at June 2018.
These indirect investments were disposed of during the interim period. It
effectively discloses the Group's results of operations from these investments
by disclosing the consolidated management accounts for the month of July 2018
on a line-by-line basis. Resilient is satisfied with the quality of the
financial information contained in the management accounts of Locaviseu.
Adjustment 5
This adjustment proportionately consolidates the indirect investments in
partially-owned subsidiaries (Resilient Africa and the indirect investments
in Arbour Crossing, Galleria Mall and Mahikeng Mall) previously consolidated.
It uses the management accounts for the six months ended December 2018 of
Resilient Africa, Resilient Africa Managers, Arbour Town and Southern Palace
Investments 19 to reverse the non-controlling interests to reflect the Group's
interest in the assets, liabilities and results of operations from these
investments.
Condensed consolidated statement of financial position
Adjustment 2
Deconsoli-
Adjustment 1 dation of
Component the Siyakha
IFRS disclosure Trusts
Dec 2018 Dec 2018 Dec 2018
R'000 R'000 R'000
Assets
Non-current assets 36 239 542 - 1 095 394
Investment property 23 722 813
Straight-lining of rental
revenue adjustment 440 463
Investment property under
development 415 561
Investment in and loans to
associate and joint venture 810 683
Investments 10 458 374 (1 987 392)
Staff incentive loans 39 188
Loans to BEE ownership vehicle - 3 082 786
Loans to co-owners 147 066
Other financial assets 159 172 (159 172)
Fair value of interest
rate derivatives 132 531
Fair value of currency derivatives 9 816
Loans advanced 16 825
Other assets 46 222
Current assets 1 475 288 - (333)
Staff incentive loans 2 022
Loans to co-owners 447 419
Trade and other receivables 274 182 (89)
Other financial assets 70 114 (70 114)
Fair value of interest rate
derivatives 13
Fair value of currency derivatives 59 816
Loans advanced 10 285
Other assets 20 967
Cash and cash equivalents 660 584 (244)
Total assets 37 714 830 - 1 095 061
Adjustment 5
Adjustment 3 Proportionate
Fair value consolidation
accounting for of partially-
investment owned Management
in Lighthouse subsidiaries accounts
Dec 2018 Dec 2018 Dec 2018
R'000 R'000 R'000
Assets
Non-current assets - (1 313 767) 36 021 169
Investment property (1 379 836) 22 342 977
Straight-lining of rental
revenue adjustment (19 671) 420 792
Investment property
under development (4 972) 410 589
Investment in and loans
to associate and
joint venture (810 683) -
Investments 810 683 9 281 665
Staff incentive loans 39 188
Loans to BEE ownership vehicle 3 082 786
Loans to co-owners 90 712 237 778
Other financial assets -
Fair value of interest
rate derivatives 132 531
Fair value of currency derivatives 9 816
Loans advanced 16 825
Other assets 46 222
Current assets - (18 779) 1 456 176
Staff incentive loans 2 022
Loans to co-owners 447 419
Trade and other receivables (7 646) 266 447
Other financial assets -
Fair value of interest rate
derivatives 13
Fair value of currency derivatives 59 816
Loans advanced 10 285
Other assets 20 967
Cash and cash equivalents (11 133) 649 207
Total assets - (1 332 546) 37 477 345
Adjustment 2
Deconsoli-
Adjustment 1 dation of
Component the Siyakha
IFRS disclosure Trusts
Dec 2018 Dec 2018 Dec 2018
R'000 R'000 R'000
Equity and liabilities
Total equity attributable to
equity holders 21 917 564 - 5 010 039
Stated capital 13 822 359
Treasury shares (4 508 341) 4 295 753
Currency translation reserve 204 996
Reserves 12 398 550 714 286
Non-controlling interests 69 211
Total equity 21 986 775 - 5 010 039
Total liabilities 15 728 055 - (3 914 978)
Non-current liabilities 12 607 505 - (3 914 800)
Interest-bearing borrowings 11 502 861 (3 914 800)
Other financial liabilities 28 462 (28 462)
Fair value of interest
rate derivatives 15 960
Fair value of currency
derivatives 12 502
Deferred tax 99 621
Amounts owing to
non-controlling shareholders 976 561
Current liabilities 3 120 550 - (178)
Trade and other payables 362 735 (178)
Other financial liabilities 64 600 (64 600)
Fair value of currency derivatives 64 600
Other liabilities 46 210
Income tax payable 417
Interest-bearing borrowings 2 646 588
Total equity and liabilities 37 714 830 - 1 095 061
Adjustment 5
Adjustment 3 Proportionate
Fair value consolidation
accounting for of partially-
investment owned Management
in Lighthouse subsidiaries accounts
Dec 2018 Dec 2018 Dec 2018
R'000 R'000 R'000
Equity and liabilities
Total equity attributable
to equity holders - - 26 927 603
Stated capital 13 822 359
Treasury shares (212 588)
Currency translation reserve 204 996
Reserves 13 112 836
Non-controlling interests (69 211) -
Total equity - (69 211) 26 927 603
Total liabilities - (1 263 335) 10 549 742
Non-current liabilities - (1 240 584) 7 452 121
Interest-bearing borrowings (264 032) 7 324 029
Other financial liabilities -
Fair value of interest
rate derivatives 15 960
Fair value of currency derivatives 12 502
Deferred tax 9 99 630
Amounts owing to non-controlling
shareholders (976 561) -
Current liabilities - (22 751) 3 097 621
Trade and other payables (15 412) 347 145
Other financial liabilities -
Fair value of currency
derivatives 64 600
Other liabilities (7 339) 38 871
Income tax payable 417
Interest-bearing borrowings 2 646 588
Total equity and liabilities - (1 332 546) 37 477 345
Calculation: net asset value per share
Management
IFRS accounts
R'000 R'000
Total equity attributable to equity holders 21 917 564 26 927 603
Loans to BEE ownership vehicle:
claims of Resilient
exceed value of shares held as collateral (3 082 786)*
Net asset value 21 917 564 23 844 817
Total number of shares in issue 424 954 000 424 954 000
Shares held in treasury: Resilient Properties (3 920 125) (3 920 125)
Shares held in treasury: the Siyakha Trusts (52 182 504) (52 182 504)*
Shares in issue 368 851 371 368 851 371
* Whilst the Siyakha Trusts have negative net asset
values, the shares and loans should be ignored.
Net asset value per share R59,42** R64,65
** This ratio takes into account the negative net asset value of the Siyakha
Trusts relating to the loans advanced by Fortress (investment of R1,99 billion
and debt owed to Fortress of R3,91 billion). Fortress has no recourse to
Resilient for its loans advanced to the Siyakha Trusts.
Calculation: loan-to-value ratio
Management
IFRS accounts
R'000 R'000
Assets
Investment property 23 722 813 22 342 977
Straight-lining of rental revenue adjustment 440 463 420 792
Investment property under development 415 561 410 589
Investment in and loans to associate
and joint venture 810 683 -
Investments 10 458 374 9 281 665
Staff incentive loans 41 210 41 210
Loans to BEE ownership vehicle - 3 082 786
Loans to co-owners 594 485 685 197
Loans advanced 27 110 27 110
36 510 699 36 292 326
Net debt
Cash and cash equivalents (660 584) (649 207)
Interest-bearing borrowings 14 149 449 9 970 617
13 488 865 9 321 410
Loan-to-value ratio 36,9%* 25,7%
* This ratio includes the debt and investments of the Siyakha Trusts relating
to Fortress.
Condensed consolidated statement of comprehensive income
Adjustment 1
Component
IFRS disclosure
for the six for the six
months ended months ended
Dec 2018 Dec 2018
Income statement R'000 R'000
Recoveries and contractual rental revenue 1 389 081
Straight-lining of rental revenue adjustment 44 560
Revenue from direct property operations 1 433 641 -
Revenue from investments 480 910
Realised gain: forward exchange contracts 57 286
Total revenue 1 914 551 57 286
Fair value loss on investment property,
investments and derivative financial
instruments (749 133) (196 600)
Fair value gain on investment property -
Adjustment resulting from straight-lining
of rental revenue (44 560)
Fair value loss on investments (776 651)
Fair value gain on currency derivatives 123 039 (123 039)
Unrealised fair value gain 329 437
Realised loss: cross-currency swaps (408 970)
Fair value loss on interest rate derivatives (50 961) 50 961
Unrealised fair value loss (44 989)
Property operating expenses (508 064)
Administrative expenses (52 592)
Foreign exchange loss (20 022)
Profit on sale of Locaviseu 17 818
Impairment of investment in associate (19 495)
Impairment of staff incentive loans receivable (20 956)
Impairment of loans receivable -
Amortisation of interest rate cap premiums (4 723)
Impairment of goodwill -
Income from associate and joint venture 256 706 -
- distributable 86 579
- non-distributable 170 127
Profit before net finance costs 814 090 (139 314)
Net finance costs (639 017) 139 314
Finance income 40 667 146 545
Interest received: loans and cash balances 40 667
Interest received: interest rate derivatives 1 259
Interest received: cross-currency swaps 145 286
Finance costs (679 684) (7 231)
Interest on borrowings (709 710)
Interest paid: interest rate derivatives (7 231)
Capitalised interest 30 026
Profit before income tax expense 175 073 -
Income tax (91 600)
Profit for the period 83 473 -
Profit for the period attributable to:
Equity holders of the Company 61 354
Non-controlling interests 22 119
83 473 -
Adjustment 3
Adjustment 2 Fair value
Deconsoli- accounting
dation of the for investment
Siyakha Trust in Lighthouse
for the six for the six
months ended months ended
Dec 2018 Dec 2018
Income statement R'000 R'000
Recoveries and contractual rental revenue
Straight-lining of rental revenue adjustment
Revenue from direct property operations - -
Revenue from investments (121 498) 86 579
Realised gain: forward exchange contracts
Total revenue (121 498) 86 579
Fair value loss on investment property,
investments and derivative financial instruments 72 047 150 632
Fair value gain on investment property
Adjustment resulting from straight-lining of
rental revenue
Fair value loss on investments 72 047 150 632
Fair value gain on currency derivatives
Unrealised fair value gain
Realised loss: cross-currency swaps
Fair value loss on interest rate derivatives
Unrealised fair value loss
Property operating expenses
Administrative expenses 3 053
Foreign exchange loss
Profit on sale of Locaviseu
Impairment of investment in associate 19 495
Impairment of staff incentive loans receivable
Impairment of loans receivable (1 733 030)
Amortisation of interest rate cap premiums
Impairment of goodwill
Income from associate and joint venture - (256 706)
- distributable (86 579)
- non-distributable (170 127)
Profit before net finance costs (1 779 428) -
Net finance costs 491 548 -
Finance income 267 065 -
Interest received: loans and cash balances 267 065
Interest received: interest rate derivatives
Interest received: cross-currency swaps
Finance costs 224 483 -
Interest on borrowings 224 483
Interest paid: interest rate derivatives
Capitalised interest
Profit before income tax expense (1 287 880) -
Income tax
Profit for the period (1 287 880) -
Profit for the period attributable to:
Equity holders of the Company (1 287 880)
Non-controlling interests
(1 287 880) -
Adjustment 5
Adjustment 4 Proportionate
Proportionate consolidation
consolidation of partially-
of investment owned Management
in Locaviseu subsidiaries accounts
for the six for the six for the six
months ended months ended months ended
Dec 2018 Dec 2018 Dec 2018
Income statement R'000 R'000 R'000
Recoveries and contractual
rental revenue 12 911 (81 773) 1 320 219
Straight-lining of rental
revenue adjustment (1 442) 43 118
Revenue from direct property
operations 12 911 (83 215) 1 363 337
Revenue from investments (7 181) 438 810
Realised gain: forward exchange
contracts 57 286
Total revenue 5 730 (83 215) 1 859 433
Fair value loss on investment
property, investments and
derivative financial instruments (65 215) 1 442 (786 827)
Fair value gain on investment
property (65 215) (65 215)
Adjustment resulting from
straight-lining of rental revenue 1 442 (43 118)
Fair value loss on investments (553 972)
Fair value gain on currency
derivatives -
Unrealised fair value gain 329 437
Realised loss: cross-currency
swaps (408 970)
Fair value loss on interest rate
derivatives -
Unrealised fair value loss (44 989)
Property operating expenses (2 521) 34 030 (476 555)
Administrative expenses 227 3 374 (45 938)
Foreign exchange loss (6 949) (26 971)
Profit on sale of Locaviseu 17 818
Impairment of investment in
associate -
Impairment of staff incentive
loans receivable (20 956)
Impairment of loans receivable (1 733 030)
Amortisation of interest rate cap
premiums (4 723)
Impairment of goodwill (183 271)* (183 271)
Income from associate and joint
venture - - -
- distributable -
- non-distributable -
Profit before net finance costs (245 050) (51 318) (1 401 020)
Net finance costs (2 092) 29 199 18 952
Finance income - 28 730 483 007
Interest received: loans and cash
balances 28 730 336 462
Interest received: interest rate
derivatives 1 259
Interest received: cross-currency
swaps 145 286
Finance costs (2 092) 469 (464 055)
Interest on borrowings (2 092) 469 (486 850)
Interest paid: interest rate
derivatives (7 231)
Capitalised interest 30 026
Profit before income tax expense (247 142) (22 119) (1 382 068)
Income tax 247 142* 155 542
Profit for the period - (22 119) (1 226 526)
Profit for the period
attributable to:
Equity holders of the Company (1 226 526)
Non-controlling interests (22 119) -
- (22 119) (1 226 526)
* On acquisition of the interest in Locaviseu, goodwill arose as a result of a
deferred tax liability that was partially assumed. On disposal of the
investment, the deferred tax and goodwill balances were derecognised.
Dividend calculation
Management
accounts
for the six
months ended
Dec 2018
R'000
Recoveries and contractual rental revenue 1 320 219
Revenue from investments 438 810
Realised gain: forward exchange contracts 36 330
Property operating expenses (476 555)
Administrative expenses (45 938)
Impairment of staff incentive loans receivable* (20 956)
Realised gain: forward exchange contracts relating
to Lighthouse return of capital* 20 956
Amortisation of interest rate cap premiums (4 723)
Interest received on loans and cash balances
(inclusive of interest on loans to the Siyakha Trusts
at contractual rates) 336 462
Reverse interest received on the loans to the Siyakha Trusts (267 067)
Interest received: interest rate derivatives 1 259
Interest received: cross-currency swaps 145 286
Interest on borrowings (486 850)
Interest paid: interest rate derivatives (7 231)
Capitalised interest 30 026
Income tax (1 344)
Dividends accrued (48 037)
Antecedent dividend (3 585)
Income hedging adjustment of Nigeria performance (1 089)
Dividends to be received by the Siyakha Trusts on shares
pledged to Resilient 144 125
Dividend on shares held by Resilient Properties in treasury 10 336
Distributable earnings 1 120 434
Interim dividend (1 120 434)
-
* Non-recurring item.
Payment of interim dividend
The Board has approved and notice is hereby given of an interim dividend of
263,66000 cents per share for the six months ended 31 December 2018.
The dividend is payable to Resilient shareholders in accordance with the
timetable set out below:
Last date to trade cum dividend Tuesday, 5 March 2019
Shares trade ex dividend Wednesday, 6 March 2019
Record date Friday, 8 March 2019
Payment date Monday, 11 March 2019
Share certificates may not be dematerialised or rematerialised between
Wednesday, 6 March 2019 and Friday, 8 March 2019, both days inclusive.
In respect of dematerialised shareholders, the dividend will be transferred
to the CSDP accounts/broker accounts on Monday, 11 March 2019. Certificated
shareholders' dividend payments will be posted on or about Monday,
11 March 2019.
An announcement informing shareholders of the tax treatment of the dividend
will be released separately on SENS.
Directors
Alan Olivier (chairman); Stuart Bird; David Brown; Thembi Chagonda;
Des de Beer*; Andries de Lange*; Des Gordon; Nick Hanekom*; Bryan Hopkins;
Johann Kriek*; Dawn Marole; Protas Phili; Umsha Reddy; Barry van Wyk
(*executive director)
Company secretary Monica Muller CA(SA) 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
6A Sandown Valley Crescent, Sandton, 2169
Release date: 15 February 2019
Date: 15/02/2019 05:25:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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