Wrap Text
Condensed consolidated interim results for the six months ended 31 December 2023
HYPROP INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/005284/06)
JSE share code: HYP ISIN: ZAE000190724
Bond issuer code: HYPI
(Approved as a REIT by the JSE)
("Hyprop" or "the Company" or "the Group")
CONDENSED CONSOLIDATED INTERIM RESULTS
for the six months ended 31 December 2023 ("HY2024")
Strong balance sheet
and liquidity position
- R500 million of new capital was raised through the
FY2023 DRIP
- Strong liquidity position with R1.6 billion of cash
(R500 million earmarked for the Table Bay Mall acquisition) and
R1.7 billion of available bank facilities (R250 million earmarked
for the Table Bay Mall acquisition)
- LTV ratio increased from 36.3% in June 2023 to 37.4% and the
ICR decreased from 2.8 times to 2.3 times
- Refinanced / restructured R4.2 billion of borrowings at lower
margins and secured R1.6 billion of new facilities
Corporate activity
The Competition Tribunal unconditionally approved the Table
Bay Mall acquisition which should be implemented before
1 April 2024.
Repositioning strategy
yields improved
operational performance
South Africa ("SA") portfolio
- The SA portfolio's tenant turnover increased by 5.6%,
while trading density grew by 4.9%, and average
monthly foot count increased to 7 million, reflecting a
5.8% increase year-on-year
- Retail vacancies for the SA portfolio were well controlled
at 1.3%
- SA's weighted average rent reversion rate improved
significantly to positive 3%
- The new Checkers FreshX and the upgraded Pick n Pay
Hypermarket opened at Somerset Mall
- Completed three drive-thrus and the Woolworths
extension (Woolworths Café and W Cellar) at
Woodlands Boulevard
Eastern Europe ("EE") portfolio
- The centres in EE continue to deliver double-digit growth
in the majority of their key performance metrics. Tenant
turnover was up 12.5% and trading density maintained a
positive trajectory delivering 12.2% growth
- EE portfolio's vacancy rate remained very low at 0.3%
- New H&M store opened at Skopje City Mall in
March 2024
Strong performance by the SA and EE portfolios dampened by the anticipated
increase in interest rates and foreign exchange losses incurred by Ikeja City Mall
- Distributable income for HY2024 was R668 million, a decrease of 8.3%
- Distributable income per share reduced by 13.4% from 203.4 cents in HY2023 to 176.1 cents in HY2024
- 8% growth in net operating income (in euros) of the EE portfolio augmented by the 15% devaluation of the Rand against the Euro
- Realised foreign exchange losses of R33 million in Nigeria on the conversion of nairas to US dollars and concessions granted to tenants
due to currency volatility
Unaudited Unaudited Audited
December 2023 December 2022 June 2023
Net operating income (R'000) 613 482 665 323 1 229 170
Headline earnings per share (cents) 111.3 226.1 393.9
Basic earnings per share (cents) 52.1 209.0 431.9
Distributable income per share (cents) 176.1 203.4 405.2
Net asset value per share (Rands) 58.77 59.47 63.39
Outlook and prospects
The improved trading metrics of our portfolios affirm
our centres' relevance in their respective markets
and our shoppers' loyalty and resilience during
challenging economic times. The Group continues
to implement its key strategic objectives to generate
long-term sustainable value for all stakeholders
whilst exploring growth opportunities in line with the
Group's strategy to focus on the Western Cape and
Eastern Europe. The imminent acquisition of Table
Bay Mall is an exciting next step in this strategic
journey. Hyprop continues to pursue the following
six strategic initiatives:
1. Driving implementation of sustainable solutions
to reduce the impact of loadshedding and its
consequent effects in SA
2. Repositioning the SA and the EE portfolios to
retain and grow market share, with a continuing
focus on reinvesting in and upgrading
our centres
3. Reviewing the portfolios annually to evaluate
the case for, and expedite, recycling of assets,
increase our exposure to favourable geographies
and consider new growth opportunities
4. Protecting value in the SSA portfolio pending
an exit
5. Ensuring our balance sheet is robust
6. Developing non-tangible assets aligned to our
tangible assets and/or the property sector.
The current major risks for the Group are:
1. The significant devaluation of the Nigerian naira
and the impact on Ikeja City Mall's tenants and
its net operating income and in-country debt
2. The challenges facing SA retailers and the recent
announcements by Pick n Pay (which is an
anchor tenant in all our SA centres)
3. The potential default of the South African
government on its financial commitments and
the heightened political and economic risk in
South Africa ahead of the elections in May 2024
4. The likelihood of interest rates remaining higher
for longer
In light of the above, the Board considers it prudent
not to declare an interim dividend until the risks
associated with the above factors subside, in which
event the interim dividend may be aggregated with
the final dividend for FY2024. Implementation of the
revised transaction with Actis will mitigate the risk
relating Ikeja City Mall's in-country debt.
Update to guidance for FY2024
The FY2024 guidance of a 10 - 15% reduction in
distributable income per share (FY2024 guidance)
was based on certain assumptions, notably that no
corporate transactions occurred and that exchange
rates remained in line with those at 30 June 2023.
Given the strong performance of the SA and EE
portfolios for HY2024, the inclusion of the results
of Table Bay Mall from 1 April to 30 June 2024,
would not have required Hyprop to revise the
FY2024 guidance.
However, having regard to the severity of the
impact that the devaluation of the naira has had
on the Group' distributable income in HY2024,
Hyprop expects a further reduction of up to 5%
in distributable income per share for the year
ending 30 June 2024 (i.e. an overall reduction of
15 - 20% compared to the 405.2 cents achieved in
FY2023). This guidance is based on the following
key assumptions:
- Appropriate allowances for vacancies and rent
reversions have been incorporated into the
forecast
- Maturing borrowings are refinanced at prevailing
interest rates and margins
- No further deterioration in the SA economy or
loadshedding
- No major economic, socio-political, or other
regional/global disruptions occur
- No major corporate and tenant failures occur
- No further corporate transactions occurring
before 30 June 2024
- No additional unplanned material rental
concessions and currency losses due to the
weakening of the naira, and
- Exchange rates (which have not been hedged)
are in line with those in March 2024.
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 2024
This short-form announcement is the responsibility of the directors and is only a summary of the information contained in the full announcement and does
not contain full or complete details. The full announcement has been released on SENS and is available on the JSE website at
https://senspdf.jse.co.za/documents/2024/jse/isse/HYPE/HY2023.pdf
and on the Company website at
https://www.hyprop.co.za/results/interims-2024/pdf/booklet.pdf
Copies of the full announcement may also be requested by emailing Boitumelo Nkambule at boitumelo@hyprop.co.za. Any investment decision by investors
and/or shareholders should be based on the full announcement 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*^, Z Jasper*^,
TV Mokgatlha*^, BS Mzobe*^ #Executive | *Non-executive | ^Independent
Registered office Second 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: 13-03-2024 05:00:00
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