Accelerate holds back on dividend


Accelerate holds back on dividend

Published Date: 2020-07-30 | Source: Stephen Gunnion | Author: Stephen Gunnion

Accelerate holds back on dividend

The property fund, which owns half of the Fourways super-regional mall, says it is also unlikely to pay a dividend for its 2021 year.

Accelerate Property Fund has already felt the impact of Covid-19 on its financial performance, despite the pandemic only affecting the property group towards the tail end of its financial year. It's decided not to pay a final distribution and says it's unlikely to pay one next year either.

The fund reported a decline in distributable earnings after making provisions for bad debts it's likely to incur due to the pandemic and lockdown conditions in the countries where it has investments. Releasing results for the year to end-March, it said it had already accounted for reduced rentals in its European portfolio. Also weighing on earnings were an increase in B-grade office vacancies caused by the weakening economy, the impact of structural vacancies in buildings held for redevelopment and additional costs incurred for the relaunch of its Fourways Mall super-regional mall last August.

Its portfolio was valued at R12.6 billion at the end of March, down from R12.7 billion a year earlier, as it reduced the number of properties to 51 from 62. It said the movement in the value of the portfolio was mainly due to an increase in the external valuation of its offshore assets and lifting its stake in the Fourways precinct to 50% through an equalisation transaction that cost it R907 million - counteracted by asset sales of R730 million and conservative fair value adjustments to the value of R1 billion.

Revenue declined by 11% to R1.05 billion and net property income fell 16% to R725 million. Distributable earnings dropped 40% to R285 million and it reported a basic loss per share of 90.21c, down from earnings of 56.77c last year. Vacancies rose to 10.8% from 9% a year earlier, excluding properties held for redevelopment.

Its shares rose 3.8% to 83c yesterday.

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