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Condensed Consolidated Results and Cash Dividend Declaration for Period Ended 31 December 2019
FAIRVEST PROPERTY HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1998/005011/06)
Share Code: FVT
ISIN: ZAE000203808
(Approved as a REIT by the JSE)
("Fairvest" or "the Company")
UNAUDITED CONDENSED CONSOLIDATED RESULTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
AND CASH DIVIDEND DECLARATION
1. HIGHLIGHTS
- Distribution for the period increased in line with guidance by 5.1% to 11.155 cents per share
- Total property portfolio increased by 10.4% to R3.49 billion
- Net asset value per share increased by 2.0% to 233.97 cents
- Vacancies reduced to 3.2% of total lettable area
- Arrears remained low at 1.7% of revenue
- Conservative balance sheet maintained with loan-to-value of 34.0%
- 21.9 million shares repurchased at the weighted average price of R1.86 per share and held in treasury
2. PROFILE
Fairvest Property Holdings Limited is a property investment holding company and Real Estate Investment
Trust ("REIT"), with a unique focus on retail assets weighted toward non-metropolitan and rural shopping
centres, as well as convenience and community shopping centres servicing the lower LSM market, in high-
growth nodes close to commuter networks. The Fairvest property portfolio consists of 44 properties with
261 431m2 of lettable area, valued at R3.49 billion.
3. SALIENT FEATURES
Dividend per share for the period increased by 5.1% to 11.155 cents per share, from 10.616 cents per
share in the prior corresponding period.
The net asset value per share as at 31 December 2019 increased by 2.0% to 233.97 cents per share, from
229.38 cents per share as at 30 June 2019 and increased by 0.4% from 232.98 cents per share for the prior
corresponding period.
Revenue increased by 11.9% to R268 million, from R239 million in the prior corresponding period.
Headline earnings per share decreased by 6.2% to 10.88 cents per share, from 11.60 cents per share in
the prior corresponding period.
Earnings per share decreased by 5.5% to 14.87 cents per share, from 15.74 cents per share in the prior
corresponding period.
4. PROSPECTS
Given the scarcity of new capital and limited opportunity for further acquisitions, the focus for the current
reporting period has been inwards, towards further optimising the current portfolio. Various milestones have
been achieved, amongst other things, renegotiation of soft services contracts and improvement of the lease
expiry profile and weighted average lease terms. Economic conditions remain challenging; however, the
company remains confident that the nature of its portfolio, its low-risk tenant base and letting expertise will
continue to be defensive in the face of current economic challenges. The company continues to target
growth in distributions per share approximating or exceeding current inflation. Management remains
confident that growth in distribution per share of between 4% and 6% for the full 2020 financial year remains
achievable, in line with the previous guidance issued.
The board has resolved to not reduce the current dividend pay-out ratio policy for the 2020 and 2021
financial years. The policy is reviewed on a biannually basis and any changes will be communicated
to shareholders at least 12 months before any changes are implemented.
This forecast assumed no material deterioration in the macroeconomic environment relative to current levels,
that no major corporate and tenant failures will occur and that tenants will be able to absorb increases in
municipal and utility costs. Forecast rental income is based on contractual lease terms and anticipated
market-related renewals. This forecast is the sole responsibility of the board of directors of Fairvest and
has not been reviewed or reported on by the auditors.
Fairvest remains well positioned for long-term value creation, with a clearly focused strategy of servicing
the non-metropolitan and lower LSM markets and maintaining strong operational metrics including
conservative gearing levels, high tenant retention and low arrears.
5. DIVIDEND DISTRIBUTION DECLARATION
The board has approved and declared an interim gross dividend of 11.155 cents per share from income for
the six months ended 31 December 2019, payable to shareholders registered as such at the close of
business on Friday, 3 April 2020.
2020
Last day to trade cum dividend Tuesday, 31 March
Shares commence trading ex dividend Wednesday, 1 April
Record date Friday, 3 April
Payment date Monday, 6 April
Share certificates may not be dematerialised or rematerialised between Wednesday, 1 April 2020 and
Friday, 3 April 2020, both days inclusive.
6. TAX IMPLICATIONS
In accordance with Fairvest's status as a REIT, shareholders are advised that the dividend meets the
requirements of a "qualifying distribution" for the purposes of section 25BB of the Income
Tax Act, No. 58 of 1962 ("Income Tax Act").
Qualifying distributions received by shareholders who are South African tax residents must be included in
the gross income of such shareholders (as a non-exempt dividend in terms of section 10(1)(k)(aa) of the
Income Tax Act), with the effect that the qualifying distribution is taxable as income in the hands of the
shareholder. These qualifying distributions are, however, exempt from dividend withholding tax in the hands
of South African tax resident shareholders, provided that the South African resident shareholders have
provided the following forms to their Central Securities Depository Participant ("CSDP") or broker, as the
case may be, in respect of uncertificated shares, or Fairvest's transfer secretaries, Computershare Investor
Services Proprietary Limited ("transfer secretaries"), in respect of certificated shares:
(a) a declaration that the distribution is exempt from dividends tax; and
(b) a written undertaking to inform the CSDP, broker or the transfer secretaries, as the case may be, should
the distribution cease to be exempt from dividend withholding tax,
both in the form prescribed by the Commissioner for the South African Revenue Service ("SARS") and
shareholders are advised to contact their CSDP or broker or the transfer secretaries, as the case may be,
to arrange for the abovementioned documents to be submitted prior to payment of the distribution, if such
documents have not already been submitted.
Qualifying distributions received by non-resident shareholders will not be taxable as income and instead
will be treated as ordinary dividends but which are exempt in terms of the usual dividend exemptions per
section 10(1) (k) of the Income Tax Act. Any qualifying distribution received by a non-resident from a REIT
will be subject to dividend withholding tax at 20%, unless the rate is reduced in terms of any applicable
agreement for the avoidance of double taxation ("DTA") between South Africa and the country of residence
of the shareholder. Assuming dividend withholding tax will be withheld at a rate of 20%, the net amount
due to non-resident shareholders will be 8.924 cents per share. A reduced dividend withholding tax rate in
terms of the applicable DTA, may only be relied on if the non-resident shareholder has provided the
following forms to their CSDP or broker, as the case may be, in respect of the uncertificated shares, or the
transfer secretaries, in respect of certificated shares:
(a) a declaration that the dividend is subject to a reduced rate as a result of the application of a DTA; and
(b) a written undertaking to inform their CSDP, broker or the transfer secretaries, as the case may be, should
the circumstances affecting the reduced rate change or the beneficial owner cease to be the beneficial owner,
both in the form prescribed by SARS. Non-resident shareholders are advised to contact their CSDP, broker
or the transfer secretaries, as the case may be, to arrange for the abovementioned documents to be
submitted prior to payment of the distribution if such documents have not already been submitted, if
applicable.
Local tax resident shareholders as well as non-resident shareholders are encouraged to consult their
professional advisors should they be in any doubt as to the appropriate action to take.
Shares in issue at the date of declaration of the final distribution: 1 018 125 441
Fairvest income tax reference number: 9205/066/06/1
7. SHORT-FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the Fairvest board of directors. Shareholders are
advised that this short-form announcement represents only a summary of the information of the full
announcement ("full announcement") and does not contain the full or complete details. The full
announcement can be found at:
https://senspdf.jse.co.za/documents/2020/JSE/ISSE/FVT/DEC-19.pdf
A copy of the full announcement is also available on the Company's website https://fairvest.co.za/news/results/33
and may also be requested in person, at the Company's registered office or the offices of the Sponsor, at
no charge, during office hours.
Any investment decisions by investors and/or shareholders should be based on a consideration of the
full announcement, as a whole.
2 March 2020
Sponsor
PSG Capital
Date: 02-03-2020 07:05:00
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