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HYPROP INVESTMENTS LIMITED - Interim Results for six months ended 31 December 2024, Change of role of director, Increase in dividend payout ratio
2025/03/13 07:30:00Download PDF Stock report
Interim Results for six months ended 31 December 2024, Change of role of director, Increase in dividend payout ratio
HYPROP INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/005284/06)
JSE share code: HYP ISIN: ZAE000190724
JSE bond issuer code: HYPI
(Approved as a REIT by the JSE)
('Hyprop' or 'the Company' or 'the Group')
Condensed Consolidated Interim Results
six months ended 31 December 2024 ('HY2025')
Change of role of director and
Increase in dividend payout ratio
www.hyprop.co.za
Strong half year results lay foundation for continued growth
Headlines
Strong operational performance drives double digit increase
in distributable income
- Distributable income up 14.5%, from R668 million in HY2024 to
R765 million in HY2025
- 14.4% increase in distributable income per share, from 176.1 cents
in HY2024 to 201.4 cents in HY2025
- Payout ratio increased and interim dividend of 113.43 cents per
share declared
- On track to meet the upper end of the guidance range for FY2025
Solid balance sheet and liquidity position
- LTV ratio stable at 36.3%
- Interest cover ratio for HY2025 improved to 2.6 times
- Cash collections from tenants in the SA and EE portfolios of 99.8% and
100.8% of net billings for the period, respectively
- Strong liquidity position with R807 million of cash and R1.1 billion
of available bank facilities as at 31 December 2024
- 85% of interest rate exposure hedged
Repositioning strategy strengthens portfolios' dominance
South Africa ('SA') portfolio
- Tenants' turnover increased by 4.9%, while trading density grew by 4.4%
- Weighted average rent reversion rate remains positive at 4.4%
- Somerset Mall's expansion project is progressing on budget and
within our anticipated timelines
- Checkers secured as the new anchor tenant at Hyde Park Corner and will
launch its store in July 2025
Eastern Europe ('EE') portfolio
- Tenants' turnover increased by an impressive 8.8%, while trading density
grew by 7.1%
- The vacancy rate remained exceptionally low at 0.2%
- City Center one West successfully completed its food court expansion
and the Cineplexx at Skopje City Mall was upgraded
Sub-Saharan Africa ('SSA') portfolio disposal
- Successfully sold the SSA portfolio in exchange for shares in
Lango Real Estate Limited
- The Group was released from all guarantees and commitments
provided to the SSA portfolio's lenders
Unaudited Unaudited Audited
December 2024 December 2023 % change June 2024
Net operating income (R'000) 800 671 613 482 30.5% 1 304 590
Headline earnings per share (cents) 138.1 111.3 24.1% 299.5
Basic earnings per share (cents) 274.7 52.1 427.3% 274.3
Distributable income per share (cents) 201.4 176.1 14.4% 370.4
Dividend per share (cents) 113.43000 - 100.0% 280.00000
Net asset value per share (Rands) 59.67 58.77 1.7% 60.32
Change of role of director
Richard Inskip, an independent non-executive director, was appointed as the lead independent director
of the Board effective 13 March 2025.
Increase in dividend payout ratio
The Board has decided to increase the dividend payout ratio due to the significant progress made in
achieving our strategic priorities, notably strengthening our balance sheet, repositioning both our
SA and EE portfolios and the sale of the SSA portfolio, as follows:
- payment of an interim dividend equivalent to 95% (previously 90%) of the distributable income
from the SA portfolio; and
- payment of a final dividend on finalisation of the Group's annual audited results, so that the total
distribution for the financial year (including the interim dividend) is equivalent to 80% (previously
75%) of the Group's distributable income from the SA and EE portfolios.
The Board will continue to review the dividend payout ratio, with the intention of progressively
increasing it over time. Any anticipated further increase in the dividend payout ratio for FY2026 will
be communicated in due course.
The balance of the distributable income will be retained to manage borrowings and fund capital
expenditure in the normal course.
Dividend declaration and settlement
The Board has approved and notice is hereby given of an interim dividend of 113.43000 cents per
share for the six months ended 31 December 2024.
The dividend is payable to Hyprop shareholders in accordance with the timetable set out below:
Last date to trade cum dividend Tuesday, 1 April 2025
Shares trade ex dividend Wednesday, 2 April 2025
Record date Friday, 4 April 2025
Payment date Monday, 7 April 2025
The above dates and times are subject to change. Any changes will be released on SENS.
Share certificates may not be dematerialised or rematerialised between Wednesday, 2 April 2025
and Friday, 4 April 2025, both days inclusive.
In respect of dematerialised shareholders, the dividend will be transferred to the Central Securities
Depository Participant ('CSDP') accounts/broker accounts on Monday, 7 April 2025. Certificated
shareholders' dividend payments will be posted on or about Monday, 7 April 2025.
Ordinary shares of no par value in issue at 31 December 2024: 380 399 133
Income tax reference number of Hyprop Investments Limited: 9425177715
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). The dividends
on the shares will be taxable dividends for South African tax purposes in terms of section 25BB of the
Income Tax Act.
Tax implications for SA resident shareholders
Dividends received by or accrued to SA tax residents must be included in the gross income of such
shareholders and will not be exempt from income tax in terms of the exclusion to the general
dividend exemption contained in section 10(1)(k)(i)(aa) of the Income Tax Act because they are
dividends distributed by a REIT. These dividends are, however, exempt from dividend withholding tax
(dividend tax) in the hands of SA resident shareholders, provided that the SA resident shareholders
have provided to the CSDP or broker, as the case
may be, in respect of uncertificated shares, or
the Company, in respect of certificated shares,
a DTD(EX) form (dividend tax: declaration and
undertaking to be made by the beneficial owner
of a share) to prove their status as SA residents.
If resident shareholders have not submitted the
above-mentioned documentation to confirm
their status as SA residents, they are advised
to contact their CSDP or broker, as the case
may be, to arrange for the documents to be
submitted before the dividend payment.
Tax implications for non-resident
shareholders
Dividends received by non-resident
shareholders from a REIT will not be taxable as
income and instead will be treated as ordinary
dividends, which are exempt from income tax
in terms of the general dividend exemption
section 10(1)(k) of the Income Tax Act. Any
dividend received by a non-resident from a REIT
is subject to dividend tax at 20%, unless the rate
is reduced in terms of any applicable agreement
for the avoidance of double taxation (DTA)
between SA and the country of residence of the
non-resident shareholder. Assuming dividend
tax will be withheld at a rate of 20%, the net
amount due to non-resident shareholders is
90.74400 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 uncertificated shares, or the
Company, in respect of certificated shares:
- A declaration that the dividend is subject to a
reduced rate as a result of the application of
the DTA;
- A written undertaking to inform the CSDP,
broker or the Company, 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 the Commissioner of the
South African Revenue Service.
If applicable, non-resident shareholders are
advised to contact the CSDP, broker or the
Company to arrange for the above-mentioned
documents to be submitted before the dividend
payment, if such documents have not already
been submitted.
Outlook and prospects
The Group's performance continues to
demonstrate its resilience, despite the
pressures experienced within the South African
retail property market and ongoing global
disruptions. Financial markets are now
expecting fewer rate cuts in South Africa, with
a revised forecast of just one 25bps cut in 2025.
This, along with changing consumer spending
patterns and the potential resumption of
loadshedding, may present further challenges.
However, as a result of the robustness of our
centres in South Africa which are located in
key economic nodes and supported by more
resilient, higher LSM shoppers, as well as our
strong retail property expertise, we are
well-positioned to maintain our
growth trajectory.
On a global perspective, uncertainty remains
notwithstanding that the geopolitical tensions
in the Middle East have eased. The Russia
and Ukraine conflict continues and the US
Administration's potential changes to import
tariffs may escalate global trade tensions,
bringing economic uncertainty. The likelihood
of further interest rate cuts in Europe remains
and will support our diversification strategy to
invest further in the region.
Our strategy remains consistent, and the exit
of our direct investments in Nigeria and Ghana
marks another step toward completing the key
priorities outlined in 2018. While we continue to
develop our non-tangible assets, this initiative
is relatively small and is no longer a key priority
for the Group. We will continue pursuing the
following five strategic initiatives:
1. Drive new and organic growth opportunities
in our focus areas
2. Ongoing repositioning of the SA and EE
portfolios to maintain their dominance and
retain and grow market share
3. Annual reviews of the portfolios to ensure we
retain the right properties and/or recycle
capital where appropriate
4. Implement sustainable solutions to reduce
the impact of the infrastructure challenges
we face in South Africa
5. Ensure our balance sheet is robust
In light of the Group's pleasing operational
performance which it anticipates continuing
for the remainder of the financial year,
Hyprop expects to meet the upper end of
the guidance range of a 4% to 7% increase
in distributable income per share for the year
ending 30 June 2025.
Shareholders should note that the guidance
above is subject to change, certain assumptions
may not materialise, plans may change, and
unanticipated events and circumstances may
affect the Group strategy or the actions it takes.
The guidance has not been reviewed or reported
on by the Company's auditors.
13 March 2025
This announcement is the responsibility of the directors and is only a summary of the information contained in the condensed consolidated interim
results for the six months ended 31 December 2024 ('HY2025') and does not contain full or complete details. The HY2025 results have been
released on SENS and are available on the JSE website at https://senspdf.jse.co.za/documents/2025/jse/isse/HYPE/HY2025.pdf
and on the Company website at https://www.hyprop.co.za/results/interims-2025/pdf/booklet.pdf.
Copies of the full announcement may also be requested by emailing Boitumelo Nkambule at boitumelo@hyprop.co.za. Any investment decisions by
investors and/or shareholders should be based on the HY2025 results published on SENS and the Company's website as a whole.
Corporate information
Directors S Noussis (Chairman)*†, MC Wilken (CEO)^, BC Till (CFO)^, AW Nauta (CIO)^, AA Dallamore*†, L Dotwana*†, KM Ellerine*,
RJD Inskip*†, MRI Isaacs*†, Z Jasper*†, BS Mzobe*†
^ Executive | *Non-executive | †Independent
Registered office 2nd Floor, Cradock Heights, 21 Cradock Avenue, Rosebank, 2196 Transfer secretaries Computershare Investor Services Proprietary Limited,
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 Company secretary Fundiswa Nkosi
Sponsor Java Capital, 6th Floor, 1 Park Lane, Wierda Valley, Sandton, 2196 Investor relations Boitumelo Nkambule e. boitumelo@hyprop.co.za
Date: 13-03-2025 07:30:00
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