Dividend outlook dims for Resilient and Fortress
The property stocks are only expected to return to inflation-beating dividend growth in 2020, but both are starting to reappear on buy lists
Shareholders of embattled property stocks Resilient Reit and Fortress Reit (B shares), which have both recorded share price losses of 62% in the year to date, will have to be satisfied with far more subdued dividend payouts than the double-digit growth they have become accustomed to in recent years. That’s the message that emerged last week at Fortress and Resilient’s much-awaited annual results presentations and follows the restructuring of both companies’ balance sheets. The latter was prompted earlier this year by market criticism of the cross-holding between Resilient and Fortress and how they distributed the interest accrued on loans advanced to an empowerment education scheme known as the Siyakha trusts. The sell-off of Resilient and Fortress shares was accelerated by accusations of insider trading and share price manipulation, now the subject of a protracted probe by the Financial Sector Conduct Authority (FSCA).
Though the dividend growth numbers reported last week for...