Texton cuts dividend 20% after ‘toughest year’ in its history
Texton Property, whose share price has fallen almost 70% since the beginning of 2016, said on Thursday its year to end-June was the toughest in its history as it slashed distribution 20.1% to 71.37c a share.
The group’s net asset value per share fell 7.2% to 607.89c and its portfolio value 18.6% to R4.4bn, as it grappled with rental reversions in SA and Brexit uncertainty in the UK.
It also expects distribution in its 2020 year to fall by about 20%, but said it believes it has taken the necessary steps to strengthen leadership and stabilise the company as it pursues growth.
“In this market … securing tenants and protecting our revenue streams is only possible at the cost of rental growth,” the company said. “In addition, tenants across the spectrum are under added pressure from increased operational and utility costs, which are eroding rentals.”
The company said there had been little improvement in conditions in the second half of its financial year, which “has been the toughest in our company’s history”.
Texton, which was formed in 2006 and listed on the JSE in 2011, was known as Vunani Property Investment Fund until 2014.
Texton said on Thursday vacancies had risen 1.3 percentage points to 9.2%, while net property income fell 12.8% to R363.7m.
Its SA portfolio was devalued 18.5% on a like-for-like basis as a result of negative rental reversions, while its UK property portfolio’s value fell 2.8% on a like-for-like basis.
Its SA assets constitute 58.5% of its portfolio, and the UK 41.5%.
“The industrial and office assets in the UK remained relatively stable, with the downward revisions being concentrated in the retail sector,” Texton said.
The company has been under pressure in recent years due to the underperformance of its assets.
It has also experienced many management shake-ups, with CEO Nosiphiwo Balfour resigning in September 2018, making her the fourth CEO to leave the company in three years. Balfour was replaced by Marius Muller in December 2018.
Texton’s share price has fallen 38.2% so far in 2019, having closed at R2.96 on Wednesday.
Since reaching its all-time-high of R13.40 in March 2015, Texton’s share price has lost 78.3%.