Rebosis cans interim dividend as it focuses on cutting debt
Rebosis Property Fund says it will not pay an interim dividend after reporting a R2bn loss for the six months to end-February as it wrote down the value of its investment in UK landlord New Frontier Properties.
“Difficult trading conditions in the retail sector, the uncertainty around Brexit and the SA national and provincial elections influenced the environment in which the company operated,” Rebosis said.
Distributable income fell 61% to R195m, with about R96m of the fall being “a direct result of New Frontier Properties”. Finance costs increased by R97m, while Rebosis said it also lost rental warranty income of R42m and rate rebates of R24m.
“The board deemed it prudent to deleverage the fund and has therefore resolved to not declare an interim dividend, but rather intends to distribute a full-year dividend,” it said.
The value of the direct investment in New Frontier Properties and the loan to a BEE consortium was written down to underlying net asset value.
The impairment of New Frontier Properties of R2bn, together with valuation adjustments, pushed the loan-to-value ratio to 57.1% from 51.6% at the end of August 2018.
“Trading conditions will remain challenging for the remainder of this year,” the group said.
Rebosis, headed by Sisa Ngebulana, said it would increase its focus on renewing office leases. “The main focus will be on the successful completion of the announced disposals and the disposal of the second tranche of the retail portfolio.”
This would reduce the loan-to-value ratio to below 40%. Financing costs are expected to “reduce significantly”.