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MAS P.L.C.
Registered in Malta
Registration number C 99355
JSE share code: MSP
ISIN: VGG5884M1041
LEI code: 213800T1TZPGQ7HS4Q13
('MAS', 'the Group' or 'the Company')
VOLUNTARY TRADING UPDATE
Introduction
This trading announcement is a pre-close update prior to the release of MAS' financial results for the six months ending 31 December 2024. It details
information regarding the Group's markets, strategy, and operations. Unless otherwise stated, figures are presented on a proportionate consolidated
basis. Amounts included or statements made herein do not consider any outcome deriving from implementing the potential acquisition by MAS of
Prime Kapital's 60% interest in PKM Development Limited (Development Joint Venture, 'DJV'*), referred to in the cautionary announcement issued on
26 November 2024, which would give MAS full ownership and control of the high-quality, low-geared, commercial retail assets currently owned by the
DJV.
MAS is a green property owner and operator focused on Central and Eastern Europe ('CEE'), with investments in retail assets in Romania, Bulgaria,
and Poland. The Group also currently benefits from exposure to high-quality commercial and residential developments via the DJV with developer and
general contractor Prime Kapital. MAS aims to maximise total long-term returns from property investments, on a per share basis, by focusing on capital
allocation, operational excellence, sensible leverage and cost efficiency, sustainably growing distributable earnings per share.
Operations
Consumption remained strong in all Central and Eastern European countries where the Group operates during the first four months of the 2025 financial
year, with all the Group's properties benefiting from robust trading. Overall, like-for-like ('LFL') footfall and tenants' sales per m2 for the four
months to 31 October 2024 exceeded prior year levels by 7%, evidencing continued robust operational performance in enclosed and open-air malls.
Table 1 presents detailed information regarding MAS' Central and Eastern European LFL footfall and tenants' sales (compared to the same period of the
previous financial year) and collection rates for the four months to 31 October 2024. The collection rates include collections up to 2 December 2024.
Table 1: CEE retail properties operational performance
Jul 24 Aug 24 Sep 24 Oct 24 Total
Footfall (2024 compared to 2023) % 105 108 108 106 107
Open-air malls % 105 111 110 107 108
Enclosed malls % 103 102 103 103 103
Tenants' sales per m2 (2024 compared to 2023) % 104 108 109 108 107
Open-air malls % 105 110 111 110 109
Enclosed malls % 102 104 105 104 104
Collection rate % 99.9 99.8 99.7 99.4 99.7
Collection rates for the four-month period were excellent at 99.7%. Occupancy of Central and Eastern European retail assets was stable at 97.4% on
31 October 2024 (same level on 30 June 2024). Occupancy cost ratios (excluding certain tenant categories: supermarkets, DIYs, entertainment and
services) to 31 October 2024 remain healthy and stable at 10.5% (10.6% on 30 June 2024).
Developments
Construction at Mall Moldova to extend and redevelop the existing Era Shopping Centre (26,000m2 GLA) into Romania's second super regional
enclosed mall and retail node continues as scheduled. Leasing is progressing very well, with continued strong interest from international and
national tenants, reflecting the project's excellent quality and prospects.
The construction of the third phase of the Silk District Residential project has begun. Handover of residential units to clients of the second
phase of the Silk District Residential project, as well as for the first two buildings at Pleiades Residence is substantially complete.
Liquidity and debt management update
The Group's approach remains to maximise risk-adjusted total long-term returns from investments on a per-share basis. Following a strategic review
in June 2023, a revised debt management plan was put in place to raise bank funding secured against all of MAS' unencumbered properties in CEE
aimed at reducing refinancing risks associated with its bond maturity in May 2026 and its funding commitments to the same date, as well as suspension
of dividend payments to cover the shortfall.
Since 30 June 2023, MAS has provided, regular updates regarding progress achieved and impact on its liquidity sources and remaining capital
commitments to 30 June 2026. Table 2 below includes information on 31 October 2024 regarding the Group's commitments (including its capital
commitments to the DJV, capital expenditure requirements and debt amortisation payments) assuming the suspension of dividend payments by MAS,
and assuming MAS receives no dividends from the DJV until the bond's maturity. Since 30 June 2024, management has further progressed in securing
new debt finance, by drawing down '41million in secured loans (relating to a facility agreement concluded before 30 June 2024) and concluding an
additional secured funding facility for another '50million, to be drawn down by end of the calendar year. Processes for sourcing additional capital
are ongoing.
Table 2: Capital Requirements ' 31 October 2024
Total commitments to 30 June 2026: '308m
DJV preferred equity and
Existing bond (notional) revolving credit facility Capex1 Debt amortisation2
'173m '55m '36m '44m
Sources of capital to 30 June 2026: '308m
Cash and near cash instruments3 Secured debt to be drawn down Secured debt under negotiation Required additional funds
'97m '50m '45m '116m
1 Estimated capital expenditure (including extensions).
2 Estimated debt amortisations, maturities and raising fees.
3 Cash and near cash instruments include cash and cash equivalents but exclude cash in debt service reserve accounts and tenants' guarantees.
Prospects and funding commitments to DJV
By 31 October 2024, PK Investments Limited, a wholly-owned subsidiary of PKM Development, owned 138,045,704 MAS shares. By the same date,
MAS had invested '444.7million in preferred equity and had ongoing undrawn commitments to invest '25.3million in DJV preferred equity, as well as
make available to it a '30million revolving credit facility, fully undrawn on 31 October 2024 (figures not proportionally consolidated).
Earnings guidance
The Company expects to achieve the diluted adjusted distributable earnings guidance for the financial year to 30 June 2025, ranging from 9.54 to
10.45 eurocents per share.
The Board and management are confident that MAS' strategy to continue investing in CEE by concentrating on capital allocation, operational
excellence, sensible leveraging and cost efficiency will sustainably grow distributable earnings per share and maximise total long-term returns from
investments on a per share basis.
* DJV is an abbreviation for a separate corporate entity named PKM Development Ltd ('PKM Development'), an associate of MAS since 2016, with independent
governance. MAS owns 40% of PKM Development's ordinary equity ('20million), an investment conditional on it irrevocably undertaking to provide preferred
equity to PKM Development on notice of drawdown. By 31 October 2024, MAS had invested '444.7million in preferred equity and had an obligation of '25.3million
outstanding. In addition, MAS has committed to provide PKM Development a revolving credit facility of '30million at a 7.5% fixed rate, which was undrawn on
31 October 2024 (figures not proportionally consolidated). The balance of the ordinary equity in PKM Development ('30million) was taken up by Prime Kapital
in 2016 in cash. In terms of applicable contractual undertakings and restrictions, Prime Kapital:
(i) is not permitted to undertake real estate development in CEE outside of PKM Development until the earlier of the DJV's capital commitments being
fully drawn and invested, or 2030;
(ii) contributes secured development pipeline to PKM Development at cost;
(iii) takes responsibility for sourcing further developments, and
(iv) provides PKM Development with all necessary construction and development services via an integrated in-house platform.
4 December 2024
For further information please contact:
Irina Grigore, MAS P.L.C. +356 27 66 36 91
Java Capital, JSE Sponsor +27 (0)78 456 9999
Date: 04-12-2024 05:30:00
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