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TRADEHOLD LIMITED - Summary of Audited Consolidated Financial Results of Tradehold Group for Year to 28 February 2019 and Cash Dividend

Release Date: 24/05/2019 08:00
Code(s): TDHBP TDH     PDF:  
 
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Summary of Audited Consolidated Financial Results of Tradehold Group for Year to 28 February 2019 and Cash Dividend

TRADEHOLD LIMITED
(Registration number: 1970/009054/06)
Incorporated in the Republic of South Africa
JSE Ordinary Share code: TDH  ISIN: ZAE000152658
JSE B Preference Share code: TDHBP  ISIN: ZAE000253050
("Tradehold" or "the Group")

SUMMARY OF THE AUDITED CONSOLIDATED FINANCIAL RESULTS OF THE TRADEHOLD GROUP 
FOR THE YEAR TO 28 FEBRUARY 2019 AND CASH DIVIDEND DISTRIBUTION


KEY DEVELOPMENTS
In the year to 28 February 2019 the business experienced major changes. 
Its financial services interests were unbundled to shareholders and listed 
separately on the AltX of the JSE Limited as Mettle Investments Limited. 
Shareholders received shares in the new company equal to the number of 
shares held in Tradehold. 

It is important to note that because of the restructuring, Tradehold's 
financial results for the year to 28 February 2019 are not directly 
comparable to those of the corresponding year: 
- Total assets £859 million (2018: £1 075 million, or £985 million if 
  financial services are excluded)
- Revenue £96.4 million (2018: £101.5 million)
- Ordinary shareholders equity £287.2 million (2018: £324.7 million or £295 
  million if financial services are excluded)
- Headline earnings per share 8 pence (2018: 9.2 pence or 7.9 pence if 
  financial services are excluded)
- Tangible net asset value per share 123.7 pence / R22.97 (2018: 144 pence / 
  R23.43 or 132 pence / R21.48 if financial services are excluded).

The unbundling has turned Tradehold into a dedicated property business with 
net assets at year end split between the United Kingdom in pound sterling 
(46%), United States dollar assets in Africa (8%), and the balance in South 
African rand (46%). In South Africa at year end it owned 100% of the Collins 
Property Group, while in the UK it holds 100% of the Moorgarth Property 
Group which includes a 90% stake in The Boutique Workplace Company (TBWC), 
a provider of serviced office accommodation in London, with a number of its 
sites owned by Moorgarth.

Shortly before year-end, Tradehold was approached by I Group Investments 
(Pty) Ltd ("I Group") with an offer to invest R833 million in Tradehold's 
South African property portfolio of mostly industrial assets. The 
transaction has now been finalised. Among the benefits of the investment are 
the following:
- I Group has subscribed for a 25.7% shareholding at the tangible net asset 
  value of the South African business.
- Collins Group's gearing levels are immediately reduced by the investment.
- The reduction in gearing levels results in an immediate interest cost 
  saving to the group and also creates an opportunity to restructure 
  remaining debt more efficiently. This in turn will lead to further savings 
  in interest costs and improve cash flows significantly.

The investment will see Collins Group unbundled from Tradehold and listed 
separately on the JSE as an industrially focused REIT by February 2022. 
This step should further unlock value for Tradehold shareholders. 

FINANCIAL PERFORMANCE
Total assets now amount to £859 million (2018: £1 075 million, or £985 
million if financial services are excluded). Revenue was £96.4 million 
(2018: £101.5 million) while total profit attributable to shareholders stood 
at £13.2 million (2018: £30.8 million). The decrease is mainly due to the 
loss in the fair-value adjustment of its investment properties of £17.3 
million, reduced by a £8.6m fair value gain on financial assets relating to 
investment property (i.e. net loss of £8.7m) during the year, compared to a 
gain of £11.8 million in the corresponding financial year, and financial 
services net profit of £4 million in the prior financial year, compared to 
profit from discontinued operations of £0.3 million in the current financial 
year. 

Headline earnings per share was 8 pence, down from 9.2 pence (and up by 
0.1 pence from 7.9 pence if financial services are excluded), and tangible 
net asset value per share (as defined by management) was 123.7 pence / 
R22.97, compared to 144 pence / R23.43 (or 132 pence / R21.48 if financial 
services are excluded) in the corresponding year.

The sum-of-the-parts valuation per share (as defined by management) was 
126.5 pence / R23.50.

BUSINESS ENVIRONMENT
Business conditions for Tradehold's operations in South Africa and the UK 
during the second half of the financial year did not differ materially from 
those of the first six months. If anything, pressure mounted, given the 
rising political tensions in South Africa prior to the elections, while in 
the UK, protracted Brexit negotiations further undermined business 
confidence.

In South Africa the economy overall grew by a meagre 0.8% in 2018, with 
recessionary conditions during the first two quarters of the year. Marred 
by strikes, service delivery protests and ongoing revelations of widespread 
corruption, business confidence remained at a low ebb. In addition, 
investment was put largely on hold ahead of the elections.

In the UK, fundamental changes in the global retail market combined with 
shorter-term confidence issues as a result of Brexit have affected us like 
all others. Despite all the negative news, retail sales in the UK have in 
reality increased by 1.2% overall, but those sales have been directed more 
towards online which now represent 18% of total retail sales in the UK.

To counter the effects on Tradehold's business and ensure continued growth, 
management:
- Has unbundled its financial services businesses and listed these 
  separately on the JSE's AltX to turn Tradehold into an exclusive and 
  focused property company
- Is withdrawing from the rest of Africa excluding Namibia to enable it to 
  focus all its attention on its two main markets
- As a post year end event Tradehold has entered into a transaction with an 
  independent third party which has substantially strengthened Tradehold's 
  balance sheet and gearing levels in the Group (see above under Key 
  Developments)
- Is disposing of non-core assets, particularly in South Africa, and
- Is progressively reducing its exposure in the UK to mainstream retail 
  through increasing residential, office and leisure exposures.

Collins Group 
The company owns a portfolio mainly of industrial and commercial buildings 
in South Africa which together offer some 1.6 million square metres of gross 
lettable area (GLA). Its major focus remains on quality industrial and 
distribution centres. These constitute some 91% of total space available for 
rent. The political uncertainty and concomitant slowdown in the economy have 
seen many corporates defer investment in new developments. Consequently, 
there has been little opportunity to grow the size of the industrial 
portfolio. The focus has been on retaining tenants, which include, inter 
alia, Sasol, Unilever, MassMart and Pep, keeping vacancies at just 1.95% at 
the end of the reporting period. Moreover, the weighted average lease 
expiring profile was 7.2 years. 

To strengthen the balance sheet and reduce debt, a decision was taken early 
in the reporting period to dispose of non-core assets. Of the 37 mainly 
smaller commercial buildings identified for this purpose, 10 had been sold 
by year-end for a combined total of R136 million, realising a profit above 
book value of R24 million. The remaining assets for sale with a combined 
value of R831 million are currently on the market. 

The total Collins portfolio was £464.7 million (R8 634 million) at the 
reporting date, compared with 28 February 2018 of £535 million (R8 703 
million). The value has been adversely affected by the currency 
deterioration of the South African rand to pound sterling (R18.58 at the 
reporting date compared to R16.27 at 28 February 2018) and lower property 
valuations. 

Collins Group contributed £11.4 million (2018: £12.7 million) to net profit 
after minorities. The deterioration is mainly due to the loss in the fair-
value adjustment of its investment properties of £11.4 million during the 
year, reduced by £8.4m fair value gain on financial assets relating to 
investment properties (i.e. net loss of £3m).

The Collins Group's total contribution to tangible net asset value per share 
is 58.4 pence (R10.84).

Moorgarth
The properties in Moorgarth's portfolio cover a range of sectors including 
retail, which represents about 50% by value, commercial (mainly office 
accommodation), leisure and residential. The focus during the year was on 
broadening the retail offer away from mainstream retail, increasing the food 
and beverage presence in its centres and adding leisure. 

Management has been responding pro-actively in its four large shopping malls 
to the far-reaching changes in consumer purchasing patterns increasingly 
evident in the UK, in line with major markets elsewhere. Asset management 
initiatives were focused on a community-based model and on establishing a 
clear connection with the mall's demographic. The objective is to expand the 
tenant mix by including restaurants, bars, cinemas, gyms, dentists' and 
doctors' surgeries to establish these centres as one-stop meeting places for 
the community. 

A major breakthrough during the reporting period was the approval given by 
the Edinburgh City Council for the extensive redevelopment of the crucial 
rooftop area of Waverley Mall in the heart of the city's historical centre, 
acquired two years ago. It will allow the company to add 3 000m2 mainly 
leisure area to the existing 8 000m2 of the historical mall which adjoins 
its principal railway station. 

A planning application has also been submitted for the development of a 
hotel, pre-let to a leading UK hotel group, and the development of 493 
residential apartments at Broad Street Mall in Reading outside London. 

It has also obtained planning approval for the redevelopment of two 
buildings in Central London that will increase their bulk from 1 900m2 to 3 
000m2. Moorgarth has also partnered with its serviced office business, The 
Boutique Workplace Company (TBWC), in refurbishing an office building in 
Carter Lane near St Paul's in London, owned by Moorgarth and now let to 
TBWC. It has also acquired a building near Euston station which is currently 
being refurbished and which is also pre-let to TBWC. 
Moorgarth's contribution to group net profit was £4.2 million, against £8.7 
million in 2018. 

During the reporting period the value of Moorgarth's portfolio (excluding 
work in progress) increased to £256.7 million from £250 million if its 
interest in joint ventures (not reflected in the balance sheet) is included. 
The valuation of its Market Place shopping centre in Bolton was reduced by 
£7.3 million (i.e. 10,5%) due to concerns over the future of its anchor 
tenant, Debenhams.

Moorgarth's contribution to tangible net asset value per share is 49.6 pence 
(R9.21).

The Boutique Workplace Company (TBWC)
TBWC is a key component of the Group's strategy in the UK. In the 12 months 
to end February 2019, TBWC, which specialises in the provision of serviced 
office space, maintained its momentum in an extremely challenging market, 
increasing occupancy across its portfolio to 92% at year-end in its 30 sites 
across Greater London. TBWC now has 4 500 work stations under contract 
compared to 2 200 in 2015. 

The Group's early entry into the flexible-office environment has enabled it 
to establish a presence ahead of a number of highly aggressive competitors 
in the market. In terms of its 10-year strategy, it plans to open two to 
three new sites annually while it is also investigating additional avenues 
for growth. Initiatives are also under way to expand its flexible-office 
brand into regional markets, including the UK's major university cities. 

TBWC's EBITDA (earnings before interest, tax, amortisation and depreciation) 
for the financial year was £1.7 million (2018: £1.8 million). 

Nguni group (Namibia)
The properties in Namibia consist of just under 60 000m2 of gross lettable 
area, mainly retail space but also commercial accommodation, the latter 
mainly in the capital, Windhoek, where further development opportunities are 
under consideration. The second half of the year saw the completion of the 
first phase of a new mall in Gobabis, a major town strategically located on 
the Trans-Kalahari Highway. Anchored by the Shoprite Group and fully let, 
the mall offers about 10 000m2 of trading space. The second phase was 
completed in the first half of the new financial year.

The Namibia portfolio was £40.8 million (R757 million) at the reporting 
date, compared with 28 February 2018 of £41 million (R667 million). The 
value has been adversely affected by the currency deterioration of the South 
African rand to pound sterling (R18.58 at the reporting date compared to 
R16.27 at 28 February 2018). 

Namibia reported a net loss after minorities of £1,1 million (2018: net 
profit of £2.4 million). The deterioration is mainly due to the loss in the 
fair-value adjustment of its investment properties of £2.3 million during 
the year.

The Nguni Group's total contribution to tangible net asset value per share 
is 9.6 pence (R1.79).

Tradehold Africa Group (Mozambique, Botswana and Zambia)
The sale of the Cognis corporate residential development (also known as 
Acasia) in Maputo was in line with the strategy to dispose of all the 
properties it owns in Africa outside of South Africa and Namibia. In Zambia, 
the Group is busy finalising the sale of its three properties there for 
US$6.5 million while negotiations for the sale of its single asset in 
Botswana have reached an advanced stage. The reason for the Group's 
withdrawal from the rest of Africa is primarily the cost of managing a small 
number of widely spread properties. 

The value of this portfolio decreased by £47.7 million to £26.5 million, 
from £74.2 million at the end of February 2018, mainly due to the disposal 
of Cognis. The net proceeds have been applied to settle debt. The company 
contributed £2.4 million to total group profits, enhanced by a once-off gain 
on the disposal of subsidiary companies relating to the Cognis property of 
£3.1 million, compared to net profit of £4.3 million for the corresponding 
prior period. 

Tradehold Africa's total contribution to tangible net asset value per share 
is 8.3 pence (R1.54).

SHARE ISSUE
On 19 June 2018 Tradehold issued 6 046 591 ordinary shares to shareholders 
electing the dividend re-investment alternative, in lieu of the cash 
dividend of 50 cents per ordinary share declared to ordinary shareholders on 
22 May 2018. 

ORDINARY SHARE CASH DIVIDEND WITH A NEW SHARE SUBSCRIPTION RE-INVESTMENT 
ALTERNATIVE
Notice is hereby given that the directors have declared a gross cash 
dividend of 55 cents per ordinary share (2018: 50 cents) on 21 May 2019. 
Shareholders who do not wish to receive the cash dividend may utilise all or 
part of the cash dividend to which they are entitled, to subscribe for new 
ordinary shares in the Company. The dividend will reduce Tradehold's stated 
capital.
Shareholders are referred to the declaration announcement that will be 
released on SENS on Friday, 24 May 2019 for full details of the cash 
dividend and new share subscription re-investment alternative.

COMMENTS ON THE RESULTS
On 25 May 2018 Tradehold distributed its 247 174 375 ordinary shares in 
Mettle Investments Limited to its shareholders as a dividend in specie, as 
the final step of the unbundling of its financial services and solar energy 
business interests, comprising 90% of the Reward group (retaining an 
interest of 10%), 100% of the Mettle group and 100% of Mettle Solar Africa 
(formerly Tradehold Solar), to its ordinary shareholders. The unbundling 
transaction resulted in Tradehold classifying its investments in Reward 
Group, Mettle group and Solar Africa as disposal groups held for 
distribution in line with the requirements of IFRS 5: Non-current Assets 
Held for Sale and Discontinued Operations. The Reward, Mettle and Solar 
Africa groups qualify as discontinued operations as they are components of 
Tradehold that have been classified as held for distribution, and represent 
a separate major line of business. The assets and liabilities attributable 
to the Reward, Mettle and Solar Africa groups, classified as held for 
distribution, were separately disclosed in the statement of financial 
position in the previous financial year. 

In line with the requirements of IFRS 5, the income and expenses relating to 
Reward, Mettle and Solar Africa are presented in the income statement and 
statement of other comprehensive income as a single amount as after tax 
profit and other comprehensive income relating to discontinued operations. 
The main disclosures are as follows:
                                                      Audited       Audited
                                                         year       year to
                                                   to 28/2/19       28/2/18
                                                         £000          £000
Statement of Comprehensive Income
Profit from operations held for distribution 
before non-controlling interest                           296         4 060
Statement of Financial Position 
Current assets - Assets held for distribution               -        76 091
Current liabilities - Liabilities held for distribution     -        58 688
Statement of Changes in Equity  
Distribution of discontinued operations 
to shareholders                                        28 947             -

OUTLOOK
Although 2019 is expected to be another tough year for British consumers, 
with the Bank of England reducing its growth projection from 1.7% to 1.2% 
for the year, the macro-economic outlook is turning positive, depending on 
the outcome of the Brexit negotiations. Whatever the outcome, it would at 
least provide certainty about the challenges that lie ahead for the British 
economy and provide a basis on which it can again move forward. As reported 
in this document, we are making exciting progress with a number of 
initiatives in this market while we continue with our new vision for our 
destination malls in adapting them to changing consumer needs. Shared work-
space is increasingly replacing traditional office accommodation and much of 
management's attention will devoted to ensuring TBWC remains at the 
forefront in the strongly growing market. 

In South Africa the economy is expected to continue to struggle in an 
environment of low business confidence deepened by slow structural reform 
and with the albatross of Eskom around its neck. In such an environment 
demand for industrial and commercial space is expected to remain restricted. 
To counter these conditions, we are following a defensive strategy - by 
reducing debt, strengthening the balance sheet, divesting ourselves of non-
core assets and working to protect income by maintaining vacancies at the 
present level of 1.95%. We believe we are in a better position than most to 
weather these conditions as the weighted average lease profile of the 
portfolio as a whole is 7.2 years, allowing us considerable breathing space. 
However, this provides management with no reason for complacency as the year 
ahead will not lack for challenges, with growth under constant threat.

Any reference to future financial performance included in this statement has 
not been reviewed and reported on by the group's external auditors and does 
not constitute an earnings forecast. 

POLICY ADOPTION FOR TRADING STATEMENTS
The Group has adopted net asset value per share as the measure for trading 
statements with effect from the 28 February 2017 financial year-end.

BASIS OF PRESENTATION AND ACCOUNTING POLICIES
The summary consolidated financial statements are prepared in accordance 
with the requirements of the JSE Limited Listings Requirements for 
preliminary reports, and the requirements of the Companies Act, No 71 of 
2008 (the "Companies Act") applicable to summary financial statements. 

The Listings Requirements require preliminary reports to be prepared in 
accordance with the framework concepts and the measurement and recognition 
requirements of International Financial Reporting Standards (IFRS) and the 
SAICA Financial Reporting Guides as issued by the Accounting Practices 
Committee and Financial Pronouncements as issued by the Financial Reporting 
Standards Council and to also, as a minimum, contain the information 
required by IAS 34 Interim Financial Reporting. The accounting policies 
applied in the preparation of the consolidated financial statements from 
which the summary consolidated financial statements were derived are in 
terms of IFRS and are consistent with those accounting policies applied in 
the preparation of the previous consolidated annual financial statements, 
except for the adoption of the following new standards, amendments to 
publicised standards and interpretations that became effective for the 
current reporting period beginning 1 March 2018:

Adoption of IFRS 9: Financial Instruments
IFRS 9 contains three principal classification categories for financial 
assets:
- measured at amortised cost;
- measured at fair value through OCI; and
- measured at fair value through profit or loss.

The classification of financial assets is based on how the asset is managed 
and its contractual cash flow characteristics. The accounting policy for 
financial liabilities remains the same under IFRS 9. 

Impairment of financial assets is to be assessed using the expected credit 
loss model which required the recognition of a loss allowance for expected 
credit losses on certain financial assets. This model applies to financial 
assets measured at amortised cost and to contract assets.

The adoption of IFRS 9 Financial Instruments from 1 March 2018 resulted in 
changes in accounting policies and adjustments to the amounts recognised in 
the financial statements. In accordance with the transitional provisions in 
IFRS, comparative figures have not been restated.

Adoption of IFRS 15: Revenue from Contracts with Customers
IFRS 15 is applied to all contracts with tenants to provide a distinct good 
or service (excluding those that are in scope of another standard) whether 
over time or at a point in time. Revenue is recognised when control over the 
distinct good or service is transferred to the tenant. Revenue is recognised 
at the transaction price which is the consideration expected to be received 
for providing the distinct good or service. Where the transaction price is 
variable, an estimate of the variable consideration should be included in 
the transaction price. 

In the prior year, tenant recoveries were recognised as they were earned in 
line with the contractual rights in the leases.

IFRS 15 has been applied cumulatively and no retrospective adjustments have 
been made. 

There was no material impact on the annual financial statements as a result 
of the adoption of these standards.

The Group's reportable segments reflect those components of the Group that 
are regularly reviewed by the chief executive officers and other senior 
executives who make strategic decisions (i.e. the chief operating decision 
maker).

Trading profit on the face of the statement of comprehensive income is the 
Group's operating result excluding fair value gains or losses on financial 
assets at fair value through profit or loss and impairment losses on 
goodwill.

Tangible net asset value per share
Tangible net asset value per share excludes intangible assets, deferred tax 
assets and deferred tax liabilities from the calculation of the group's net 
asset value. Management believes that it is a useful measure for 
shareholders of the Group's intrinsic net worth. However, this is not a 
defined term under IFRS and may not be comparable with similarly titled 
measures reported by other companies.

The directors of the Group take full responsibility for the preparation of 
this preliminary report. 

AUDIT OPINION
These summary consolidated financial statements for the year ended 28 
February 2019 have been audited by PricewaterhouseCoopers Inc., who 
expressed an unmodified opinion thereon. The auditor also expressed an 
unmodified opinion on the annual financial statements from which these 
summary consolidated financial statements were derived.

A copy of the auditor's report on the summary consolidated financial 
statements and of the auditor's report on the annual consolidated financial 
statements are available for inspection at the Group's registered office, 
together with the financial statements identified in the respective 
auditor's reports.

The auditor's report does not necessarily report on all of the information 
contained in this announcement. Shareholders are therefore advised that in 
order to obtain a full understanding of the nature of the auditor's 
engagement they should obtain a copy of the auditor's report together with 
the accompanying financial information from the Group's registered office.

PREPARATION OF FINANCIAL RESULTS
The preparation of the financial results was supervised by the group 
financial director Karen Nordier BAcc, BCompt Hons, CA(SA). 

REPORTING CURRENCY
As the operations of most of Tradehold's subsidiaries are conducted in pound 
sterling and because of the distortion caused by the fluctuating value of 
the rand, the Group reports its results in the former currency.

CHANGES TO BOARD 
The following changes to the Tradehold board and company secretary occurred 
during the financial year:
- Mr J M Wragge resigned as a non-executive director with effect from 
  1 March 2018
- Dr L L Porter has been appointed as a non-executive director with effect 
  from 2 May 2018.

H R W Troskie               K L Nordier
Acting Chairman             Director

Malta 
21 May 2019

STATEMENT OF COMPREHENSIVE INCOME

                                                      Audited       Audited
                                                 12 months to  12 months to
(£'000)                                              28/02/19      28/02/18
Revenue                                                96 438       101 471
Other operating income                                  1 875         1 427
Profit on disposal of investment properties             1 369         1 157
Net (loss) / gain from fair value adjustment on 
investment property                                   (17 315)       11 760
Gain on disposal and scrapping of PPE 
(excluding buildings)                                      11
Impairment losses on financial assets                    (825)
Employee benefit expenses                              (6 586)       (5 915)
Lease expenses                                         (7 536)       (6 361)
Depreciation, impairment and amortisation              (3 006)       (2 656)
Other operating costs                                 (21 166)      (19 383)
Trading profit                                         43 259        81 500
Gain/(loss) on disposal of investments                    (48)          340
Gain on disposal of subsidiary                          3 107             -
Impairment of goodwill                                   (115)            -
Fair value gain / (loss) on financial assets at 
fair value through profit or loss                       8 773           (37)
Operating profit                                       54 976        81 803
Finance income                                          7 975         6 152
Finance cost                                          (51 241)      (51 877)
Earnings from joint venture                             2 473           662
Earnings from associated companies                         13           539
Profit before taxation                                 14 196        37 279
Taxation                                                 (664)       (7 000)
Profit for the year from continuing operations 
before non-controlling interest                        13 532        30 279
Profit from operations held for distribution 
before non-controlling interest                           296         4 060
Profit for the year before non-controlling interest    13 828        34 339

Other comprehensive income
Items that may be subsequently reclassified 
to profit or loss
Net fair value loss on hedging instruments entered 
into for cash flow hedges                                 320           308
Deferred tax on cash flow hedges                          (59)          (62)
Exchange differences on translation 
of foreign operations                                 (19 496)       (2 814)
Total comprehensive income for the year                (5 407)       31 771

Profit attributable to:
Owners of the parent                                   13 212        30 826
Non-controlling interest                                  616         3 513
                                                       13 828        34 339

Total comprehensive income attributable to:
Owners of the parent                                   (6 023)       28 258
Non-controlling interest                                  616         3 513
                                                       (5 407)       31 771

Earnings per share (pence): basic
- basic                                                   5.3          12.5
- headline earnings                                       8.0           9.2
Number of shares for calculation of 
earnings per share ('000)                             250 140       247 174
Earnings per share (pence): diluted
- diluted                                                 5.3          12.5
- headline earnings                                       8.0           9.1
Number of shares for calculation of diluted 
earnings per share ('000)                             250 519       247 519

STATEMENT OF FINANCIAL POSITION

                                                      Audited       Audited
(£'000)                                              28/02/19      28/02/18

Non-current assets                                    805 592       919 588
Property, plant and equipment                           9 336        11 150
Investment properties - fair value for 
accounting purposes                                   702 124       822 459
Investment properties - straight-line lease 
income adjustment                                      25 085        19 188
Intangible assets                                       8 080         9 374
Deferred taxation                                      11 811        11 678
Investments accounted for using the equity method
  Investments in joint venture                         11 328           865
  Investments in associates                               543           674
Derivative financial instruments                        8 286         5 847
Financial assets at amortised cost
  Loans to operations held for distribution                 -         8 419
  Loans to joint venture                               18 371        26 218
  Loans receivable                                      9 770         2 379
Other non-current assets                                  858         1 337

Current assets                                         53 434       155 405
Financial assets at fair value through 
profit and loss                                         7 548         5 886
Financial assets at amortised cost
  Loans to operations held for distribution                 -        13 421
  Loans receivable                                        872           754
  Loans to associates                                   6 488         8 484
  Trade and other receivables                           7 964        16 864
Assets classified as held for sale                        893         1 271
Assets held for distribution                                -        76 091
Other current assets                                   16 465        15 884
Taxation                                                  308           353
Cash and cash equivalents                              12 896        16 397
Total assets                                          859 026     1 074 993

Equity                                                297 032       338 602
Ordinary shareholders' equity                         287 161       324 744
Non-controlling interest                                9 871        13 858
Non-current liabilities                               506 793       594 242
Preference share liability                             59 780        69 321
Long-term borrowings                                  401 101       472 384
Derivative financial instruments                        2 296           224
Deferred taxation                                      43 616        52 313
Current liabilities                                    55 201       142 149
Preference share liability                              1 099         1 229
Short-term borrowings                                  27 120        46 349
Deferred revenue                                        6 335        10 669
Liabilities held for distribution                           -        58 688
Taxation                                                  559           325
Bank overdrafts                                           638           514
Trade and other payables                               19 450        24 375
Total equity and liabilities                          859 026     1 074 993

STATEMENT OF CHANGES IN EQUITY

                                                 12 months to  12 months to
(£'000)                                              28/02/19      28/02/18

Balance at beginning of the year                      338 602       311 106
Profit for the year                                    13 827        34 339
Issue of ordinary shares by the company                     -            93
Dividends distributed to shareholders                  (6 888)       (1 501)
Dividends reinvested by shareholders                    4 879             -
Acquisition of treasury shares                         (1 278)         (124)
Capital distribution*                                 (28 947)            -
Disposal of subsidiary                                 (3 706)
Transactions with minorities                                         (1 881)
Capital reserve (Employee Share Option Scheme)            (76)           40
Distribution to minorities                               (145)       (1 092)
Other comprehensive income for the year               (19 236)       (2 378)
Balance at the end of the year                        297 032       338 602

* A capital distribution was made on 28 May 2018 as part of the unbundling 
  transaction. The distribution is a return of capital, and has therefore 
  been recognised as a reduction of share capital and premium.

STATEMENT OF CASH FLOWS

                                                 12 months to  12 months to
(£'000)                                              28/02/19      28/02/18

Cash flows from operating activities                   (1 755)       13 173
Operating profit                                       54 976        81 803
Non-cash items                                         (1 001)      (10 525)
Changes in working capital                             (7 047)      (11 936)
Interest received                                       4 333         4 888
Interest paid                                         (46 517)      (51 442)
Dividends paid to ordinary shareholders                (6 888)       (1 501)
Dividends paid to non-controlling interests              (145)       (1 092)
Taxation refunded / (paid)                                534        (1 220)
Operating activities of operations 
held for distribution                                       -         4 198

Cash flows utilised in investing activities            39 166       (40 247)
Acquisition of investment properties                  (15 221)      (25 422)
Acquisition of property, plant and equipment           (1 805)       (4 097)
Acquisition of financial assets                           (84)            -
Proceeds on disposal of investment properties          54 258        10 853
Proceeds on disposal of property, plant and equipment     344            13
Proceeds on disposal of financial assets                1 729             -
Loans repaid by operations held for distribution            -        17 646
Loans advanced to joint venture                          (227)       (4 532)
Loans repaid by/(advanced to) associate undertaking       (94)           44
Loans and advances - issued                              (580)       (2 468)
Loans and advances - repaid                               846           100
Investing activities of operations 
held for distribution                                       -       (32 384)

Cash flows from financing activities                  (41 002)       12 642
Proceeds from borrowings                               99 793       154 144
Repayment of borrowings                              (143 381)     (195 719)
Proceeds from ordinary share issue                      4 879             -
Proceeds from preference share issue                        2        62 983
Redemption of preference shares                        (1 017)      (35 601)
Acquisition of treasury shares                         (1 278)         (124)
Acquisition of non-controlling interest                     -        (2 600)
Financing activities of operations 
held for distribution                                       -        29 559

Net (decrease) / increase in cash and cash equivalents (3 591)      (14 432)

Effect of changes in exchange rate                        (34)          (58)
Cash and cash equivalents at beginning of the year     15 883        30 373
Cash and cash equivalents at end of the year           12 258        15 883

NON CASH TRANSACTION
During the period under review the following non cash transaction took 
place:

Tradehold Limited dividend in specie
On 25 May 2018 Tradehold distributed its 247 174 375 ordinary shares in 
Mettle Investments Limited to its shareholders as a dividend in specie, as 
the final step of the unbundling of its financial services and solar energy 
business interests, comprising 90% of the Reward group (while retaining an 
interest of 10%), 100% of the Mettle group and 100% of Solar Africa, to its 
ordinary shareholders. The unbundling transaction resulted in Tradehold 
classifying its investments in Reward group, Mettle group and Solar Africa 
as disposal groups held for distribution in line with the requirements of 
IFRS 5: Non-current Assets Held for Sale and Discontinued Operations. The 
Reward, Mettle and Solar Africa groups qualify as discontinued operations as 
they are components of Tradehold that have been classified as held for 
distribution, and represent a separate major line of business. In line with 
the requirements of IFRS 5, the income and expenses relating to Reward, 
Mettle and Solar Africa were presented in the income statement and statement 
of other comprehensive income as a single amount as after tax profit and 
other comprehensive income relating to discontinued operations.

SEGMENTAL ANALYSIS

(£'000)                      Operating
                               profit/  Investment      Total         Total
                     Revenue    (loss)  properties     assets   liabilities
Twelve months to 
28 February 2019 
(unaudited)
Property - 
United Kingdom        10 048     4 895     195 274    243 651       118 693
Property - 
South Africa          57 272    51 437      64 692    494 333       369 624
Property - 
Namibia                4 015       481      40 768     51 739        28 736
Property - 
Africa excluding 
Namibia and 
South Africa           3 700     1 639      26 475     34 762        12 722
Serviced office - 
United Kingdom        21 403      (437)          -     23 251        16 607
Operations 
held for 
distribution 
- United Kingdom 
and South Africa           -         -           -          -             -
Other                      -    (3 039)          -     11 290        15 612
                      96 438    54 976     727 209    859 026       561 994

Twelve months to 28 February 2018 (audited)
Property - 
United Kingdom        10 778     9 961     191 556    239 808       125 644
Property - 
South Africa          61 980    59 525     534 862    560 370       428 707
Property - Namibia     4 236     3 346      41 024     55 423        26 901
Property - 
Africa excluding 
Namibia and 
South Africa           6 204    11 049      74 205     93 956        68 089
Serviced office - 
United Kingdom        18 273       (59)          -     21 795        13 568
Operations 
held for 
distribution 
- United Kingdom 
and South Africa           -         -        -        74 098        56 649
Other                      -    (2 019)       -        29 543        16 833
                     101 471    81 803  841 647     1 074 993       736 391

There was no intersegment revenue, resulting in all revenue being received 
from external customers.

SUPPLEMENTARY INFORMATION

                                                 12 months to  12 months to
(£'000)                                              28/02/19      28/02/18

1       Number of shares in issue ('000)              251 424       247 174

2       Net asset value per share (pence)               114.2         131.4
        Tangible net asset value per share (pence)      123.7         144.0
        (as defined by management - excludes 
        deferred tax assets and liabilities and 
        intangible assets)

3       Depreciation for the period                     2 742         2 224

4       Capital expenditure for the period             12 773        29 519

        Capital commitments contracted but not 
        provided for at period-end are:

        South Africa
        Phase 1 of the Mzuri development 
        by Imbali Props 21 (Pty) Ltd to be 
        funded by Investec Ltd                          2 594
        Purchase of land and infrastructure by 
        Ifana Investments (Pty) Ltd to be 
        funded by Investec Ltd                            222
        Washington Street development by Langa 
        Property Investments (Pty) Ltd to be 
        funded by Investec Ltd                            161
        Nquthu, Nongoma and Madadeni by Colkru 
        Investments (Pty) Ltd to be 
        funded by Nedbank Ltd                           8 398

5       Calculation of headline earnings
                                 Gross      Net         Gross           Net
        Net profit                       13 212                      30 826
        Loss/(gain) from fair 
        value adjustment on 
        investment property     17 315    3 493       (11 760)       (6 804)
        Fair value gain from 
        equity-accounted 
        investments                      (2 519)
        Gain on disposal of 
        investment properties   (1 369)   1 274)                     (1 043)
        Gain on disposal 
        of subsidiaries                  (3 107)
        Loss/(gain) on disposal 
        of investments                       48                        (340)
        Impairment of goodwill              115
        Gain on disposal of 
        property, plant 
        and equipment                       (11)
                                         19 956                      22 639

6       Financial assets
        Unlisted investments at 
        management valuation              2 586                           -
        Unlisted investments at 
        fund managers valuation           4 962                       5 886

7       Contingent liabilities            3 759                       1 280

8       Related parties
        During the year under review, in the ordinary course of business, 
        certain companies within the Group entered into transactions with 
        each other. All these intergroup transactions are similar to 
        those in the prior year and have been eliminated in the annual 
        financial statements on consolidation.

9       Events after the reporting period
        On 27 February 2019, the group entered into an agreement with I 
        Group Retail Holdings (Pty) Ltd to invest R833 million directly into 
        its portfolio of South African property assets, with an option to 
        subscribe for or acquire 12.5 million shares in Tradehold Ltd for 
        R200 million. The transaction completed in May 2019 and I Group now 
        hold 25.7% of the Collins South Africa group.

        A conditional sale agreement was signed to dispose of Tradehold 
        Africa Limited's investment in Danbury Properties Limited and 
        Falcata Limited, together with their respective investment holdings 
        in First Properties Investment Limited and Hospitality Properties 
        Investment Limited.

        A conditional sale agreement was signed to dispose of Tradehold 
        Africa Limited's investment in Collwana Properties (Pty) Ltd.

        Disposal of certain investment properties in South Africa have been 
        agreed to with independent third parties after reporting date. As 
        such the properties are shown as part of investment property until 
        such time as the conditions pass. The decisions to sell the assets 
        were taken after reporting date and therefore the requirements of 
        IFRS 5 were not met.

        Phase 2 of the development of Gobabis shopping centre was completed 
        on the 31st of March 2019. This shopping centre redevelopment is now 
        fully complete.

10      Goodwill
                                                      Audited       Audited
                                                 12 months to  12 months to
        (£'000)                                      28/02/19      28/02/18

10.1    Cost                                            8 145         9 051
        Accumulated impairment losses                    (124)            -
                                                        8 021         9 051
10.2    Cost
        Balance at beginning of year                    9 051        13 243
        Acquisition                                        43            10
        Disposals/Transfer to assets held for sale       (720)       (4 013)
        Warranty settlement                                 -          (212)
        Foreign currency translation movements           (229)           23
        Balance at end of year                          8 145         9 051

10.3    Accumulated impairment losses
        Balance at beginning of year                        -        (1 441)
        Impairment losses recognised in the year         (115)            -
        Transfer to assets held for sale                    -         1 434
        Foreign currency translation movements             (9)            7
                                                         (124)            -

10.4    Allocation of goodwill to cash-generating units
        Management reviews the business performance based on geography 
        and type of business.  It has identified the United Kingdom as the 
        main geography, and the type of business is property. Goodwill is 
        monitored by management at the operating segment level. The 
        following is a summary of the goodwill allocation for each 
        applicable operating segment:

        Twelve months to 28 February 2019 (unaudited)
                                        Opening     Additions     Disposals
        UK property - serviced offices    8 010            11             - 
        Other                             1 041            33          (720)
        Total                             9 051            44          (720)
         
        Twelve months to 28 February 2019 (unaudited) (continued)
                                                      Foreign 
                                                     currency 
                           Warranty               translation 
                         settlement  Impairment     movements       Closing
        UK property - 
        serviced offices          -           -             -         8 021 
        Other                     -        (115)         (239)            -
        Total                     -        (115)         (239)        8 021 
            
        Twelve months to 28 February 2018 (audited)
                                                                Transfer to
                                                                     assets
                                                                   held for
                                        Opening     Additions  distribution
        SA short-term lending             2 592                      (2 580)
        UK property - serviced offices    8 000            10
        Other                             1 210
        Total                            11 802            10        (2 580)

        Twelve months to 28 February 2018 (audited) (continued)
                                                      Foreign 
                                                     currency 
                           Warranty               translation 
                         settlement  Impairment     movements       Closing
        SA short-term 
        lending                                           (12)            -
        UK property - 
        serviced offices                                              8 010
        Other                  (212)                       43         1 041
        Total                  (212)          -            31         9 051

10.4.1  The goodwill allocated to the UK property segment has been 
        determined to be the serviced office business owned by subsidiaries 
        held by the Group.
        No impairment charge arose as a result of the impairment test (2018: 
        nil). The recoverable amount has been determined based on value-in-
        use calculations. These calculations use pre-tax cash flow 
        projections based on financial budgets approved by management 
        covering a five-year period. Cash flows beyond the five-year period 
        are extrapolated using the estimated sustainable growth rates stated 
        below.

                                                      Audited       Audited
        (£'000)                                      28/02/19      28/02/18
        The key assumptions, long term growth rate 
        and discount rate used in the value-in-use 
        calculations are as follows:
        WACC                                            5.90%         8.00%
        Growth rate                                    20.90%         2.50%
        Sustainable growth rate                         0.00%         0.50%

        The principal assumptions where impairment 
        occurs are as follows:
        WACC                                           15.60%        29.13%
        Growth rate                                    15.60%       -20.00%
        Sustainable growth rate                         0.00%        -1.50%

11      Fair value of financial instruments
        The carrying amounts, net gains and losses recognised through profit 
        and loss, total interest income, total interest expense and 
        impairment of each class of financial instrument are as follows:

        28 February 2019
                                   Net    Total         Total
                    Carrying (losses)/ interest      interest
                      value      gains   income       expense    Impairment
        Assets 
        (£'million)

        Financial asset 
        at fair value 
        through profit 
        or loss          7.5       0.2        -             -             -
        Derivatives      8.3       8.6        -             -             -
        Loans to joint 
        venture         18.4         -      1.3             -             -
        Loans to 
        associates       6.5         -      1.0             -             -
        Loans 
        receivable      10.6         -        -             -          (0.9)
        Trade and other 
        receivables      8.3         -        -             -             -
        Cash and cash 
        equivalents     12.9         -      0.3             -             -

        Liabilities 
        (£'million)
        Long-term 
        borrowings     401.1         -        -         (40.2)            -
        Derivatives      2.3         -        -          (4.3)            -
        Preference 
        shares          60.8         -        -          (5.1)            -
        Deferred 
        revenue          6.3       5.6        -             -             -
        Short-term 
        borrowings      27.1         -        -          (4.7)            -
        Bank overdrafts  0.6         -        -             -             -
        Trade and 
        other payables  19.4         -        -          (0.8)            -
        Financial 
        guarantee 
        contract           -         -        -             -             -

        28 February 2018
                                   Net    Total         Total
                    Carrying (losses)/ interest      interest
                      value      gains   income       expense    Impairment
        Financial asset 
        at fair value 
        through profit 
        or loss          5.9         -        -             -             -
        Derivatives      5.8         -        -             -             -
        Loans to 
        joint venture   26.2         -        2             -             -
        Loans to 
        associates       8.5         -        1             -             -
        Loans and trade 
        receivables      8.3         -        1             -             -
        Other 
        receivables     28.9         -        -             -             -
        Cash and cash 
        equivalents     16.4         -        -             -             -

        Liabilities 
        (£'million)
        Long-term 
        borrowings     482.0         -        -          44.8             -
        Derivatives      0.2         -        -             -             -
        Preference 
        shares          70.5         -        -           3.3             -
        Deferred 
        revenue         10.7         -        -             -             -
        Short-term 
        borrowings      36.8         -        -           5.4             -
        Bank overdrafts  0.5         -        -             -             -
        Trade and other 
        payables        24.4         -        -             -             -

        The fair value of all amounts, except long-term borrowings with 
        fixed interest rates, approximate their carrying amounts.

        All financial instruments are classified as loans receivable/payable 
        at amortised cost, except listed investments, which are classified 
        as financial assets at fair value through profit or loss and the 
        derivatives, which are partly carried at fair value through profit 
        and loss held for trading and partly as fair value through profit 
        and loss designated as a hedge.

12      Fair value hierarchy
        IFRS7 requires disclosure of fair value measurements by level of the 
        following fair value measurement hierarchy:
        - Quoted prices (unadjusted) in active markets for identical assets 
          or liabilities (level 1).
        - Inputs other than quoted prices included within level 1 that are 
          observable for the asset or liability, either directly (that is, 
          as prices) or indirectly (that is, derived from prices) (level 2).
        - Inputs for the asset or liability that are not based on observable 
          market data (that is, unobservable inputs) (level 3).

        The following table presents the group's financial assets and 
        liabilities that are measured at fair value at 28 February 2019:

        Audited 28/02/19
        Assets                          Level 1       Level 2       Level 3
        Financial assets at fair 
        value through profit and loss
        Securities                                                    7 548
        Trading derivatives
        South Africa CPI hedge                          8 286
        Non-financial assets at 
        fair value through profit 
        or loss
        Investment properties                                       727 209
        Total assets                                    8 286       734 757
        Liabilities
        Financial liabilities at 
        fair value through profit 
        and loss
        Trading derivatives
        Cross currency swap                             2 236
        Derivatives used for hedging
        Interest rate contracts                            60
        Financial liabilities at 
        amortised cost
        Preference shares                              60 823            56
        Borrowings                                                  428 221
        Total liabilities                              63 119       428 277

        Audited 28/02/18
        Assets                          Level 1       Level 2       Level 3
        Financial assets at fair 
        value through profit and loss
        Securities                                                    5 886
        Trading derivatives
        Cross currency swap                             5 847
        Non-financial assets at fair 
        value through profit or loss
        Investment properties                                       841 647
        Total assets                                    5 847       847 533
        Liabilities
        Financial liabilities at fair 
        value through profit and loss
        Trading derivatives
        Cross currency swap
        Derivatives used for hedging
        Interest rate contracts                           224
        Financial liabilities at 
        amortised cost
        Preference shares                              70 488            62
        Borrowings                                                  518 733
        Total liabilities                              70 712       518 795

12      Fair value hierarchy (continued)
        The fair value of financial instruments traded in active markets 
        is based on quoted market prices at the year-end. A market is 
        regarded as active if quoted prices are readily and regularly 
        available from an exchange, dealer, broker, industry group, pricing 
        service, or regulatory agency, and those prices represent actual and 
        regularly occurring market transactions on an arm's length basis. 
        The quoted market price used for financial assets held by the group 
        is the current bid price.

        The carrying amounts reported in the statement of financial position 
        approximate fair values. Discounted cash flow models are used 
        for trade and loan receivables. The discount yields in these models 
        use calculated rates that reflect the return a market participant 
        would expect to receive on instruments with similar remaining 
        maturities, cash flow patterns, credit risk, collateral and interest 
        rates.

        The fair value of investment properties is based on rental yield 
        valuations and vacancy rates at the year-end. The key observable 
        inputs are rental yields and vacancy rates.
        Should UK property yields increase by 1%, the valuations would be 
        lower by approximately £34.41 million.
        Should UK property yields decrease by 1%, the valuations would be 
        higher by approximately £53.45 million.
        Should UK property vacancy rates increase by 1%, the valuations 
        would be lower by approximately £1.88 million.
        Should UK property vacancy rates decrease by 1%, the valuations 
        would be higher by approximately £2.02 million.
        Should Namibia property yields increase by 1%, the valuations would 
        be lower by approximately £4.28 million.
        Should Namibia property yields decrease by 1%, the valuations would 
        be higher by approximately £5.19 million.
        Should Namibia property vacancy rates increase by 1%, the valuations 
        would be lower by approximately £0.49 million.
        Should Namibia property vacancy rates decrease by 1%, the valuations 
        would be higher by approximately £0.36 million.
        Should Africa (excluding Namibia and South Africa) property yields 
        increase by 1%, the valuations would be lower by approximately 
        £32.60 million.
        Should Africa (excluding Namibia and South Africa) property yields 
        decrease by 1%, the valuations would be higher by approximately 
        £34.72 million.
        Should Africa (excluding Namibia and South Africa) property vacancy 
        rates increase by 1%, the valuations would be lower by approximately 
        £0.27 million.
        Should Africa (excluding Namibia and South Africa) property vacancy 
        rates decrease by 1%, the valuations would be higher by 
        approximately £0.27 million.
        Should South Africa property yields increase by 1%, the valuations 
        would be lower by approximately £60.25 million.
        Should South Africa property yields decrease by 1%, the valuations 
        would be higher by approximately £39.38 million.
        Should South Africa property vacancy rates increase by 1%, the 
        valuations would be lower by approximately £74.50 million.
        Should South Africa property vacancy rates decrease by 1%, the 
        valuations would be higher by approximately £45.41 million.

        The fair value of financial liabilities for disclosure purposes is 
        estimated by discounting the future contractual cash flows at the 
        current market interest rate that is available to the group for 
        similar financial instruments.

        There were no transfers between the levels 1 and 2 and 3 during the 
        year.

        Reconciliation of recurring level 3 fair value financial 
        instruments:
                                                      Audited       Audited
                                                     28/02/19      28/02/18
        Investment Properties
        At beginning of year                          841 647       806 660
        Additions                                      10 968        25 422
        Acquired through change in control of 
        associate to subsidiary                         4 252         4 840
        Capitalisation of borrowing costs                 979           641
        Foreign currency translation differences      (69 222)      (10 797)
        Disposals                                     (52 890)       (9 696)
        Transfer to assets held for resale               (893)       (1 271)
        Straight line lease adjustment                  9 683        14 088
        Net gain from fair value adjustments 
        on investment property                        (17 315)       11 760
        At end of year                                727 209       841 647

        Financial assets
        At beginning of year                            5 886         5 924
        Additions                                          84             -
        Loss of controlling interest in subsidiary      2 586
        Fair value gain / (loss)                          191           (38)
        Distribution received                          (1 199)            -
        At end of year                                  7 548         5 886

Directorate and administration
Directorate

C H Wiese (77)^
B A, LL B, D Com (HC)
Chairman 

K R Collins (47) +

L L Porter (67) *
B A, BSc, DPhil, FBCS, CITP
Appointed on 2 May 2018

M J Roberts (72) * + ~
B A

H R W Troskie (49) * + ~ 
B Juris, LL B, LL M

J D Wiese (38) ^ 
B A, LL B, M Com 
alternate to C H Wiese 

T A Vaughan (53) #
B Sc Hons, MRICS

F H Esterhuyse (49) #
B Acc Hons, M Com, CA(SA)

K L Nordier (52) # ~
B Acc, BCompt Hons, CA (SA)
Financial director

D A Harrop (49) #
B A Hons, ACA

# Executive
^ Non-executive
* Non-executive and member of the audit committee
+ Non-executive and member of the remuneration committee
~ Member of the social and ethics committee

Administration

Company secretary
Mettle Corporate Finance (Pty) Ltd
PO Box 3991
Tygervalley 7536

Sponsor
Mettle Corporate Finance (Pty) Ltd

Registrars
Computershare Investor Services (Pty) Ltd
PO Box 61051
Marshalltown 2107
Telephone. +27 11 370 5000
Facsimile. +27 11 370 5487

Registered office/number
Tradehold Limited
Registration number 1970/009054/06
Incorporated in the Republic of South Africa
36 Stellenberg Road
Parow Industria 7493
PO Box 6100
Parow East 7501
Telephone: +27 21 929 4800
Facsimile: +27 21 929 4785

Business address
Fourth Floor
Avantech Building
St Julian's Road
San Gwann SGN 2805
Malta
Telephone: +356 214 463 77

Auditors
PricewaterhouseCoopers Inc

Date: 24/05/2019 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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