Tradehold’s defensive stance to continue as SA’s outlook darkens

Christo Wiese-backed Tradehold, a property play that has about half its assets in SA, said on Thursday it will continue to preserve cash and reduce debt due to a deterioration in the outlook for the local economy.

The inability of SA’s government to tackle the constraints to SA’s growth, underscored by the recent medium-term budget policy statement, means the company will seek to sell off noncore assets to bolster its balance sheet, the group said on Thursday.

Revenue in its six months to end-August fell 1.8% to £47.7m (R248m), though this was largely due to its UK operations, where Brexit uncertainty persists and the retail sector remains subdued. The loss attributable to shareholders was £400,000, from a profit of £5.7m previously.

Tradehold’s net assets at the reporting date were split across the UK in sterling at 42.7%, US dollar assets in Africa of 8%, and the balance in rands of 49.3%.

Tradehold has a 74.3% stake in Collins Group, an SA company comprising mainly of commercial and industrial buildings, which has a portfolio of £466.7m.

In the UK, it owns 100% of the Moorgarth Property Group, which owns shopping malls.

Moorgarth’s share of the group net loss amounted to £7.1m, against a net profit of £145,000 in 2018. The value of its portfolio reduced to £244.6m from £256.7m if its interest in joint ventures is included. This was mainly due to fair-value losses of £14.6m on investment properties.

Tradehold said on Thursday until there are clear indications of an improvement in the SA and UK economies, it will continue to reduce debt by selling off noncore assets and will consider opportunities that may arise.

gernetzkyk@businesslive.co.za