Attacq beats dividend guidance


Attacq beats dividend guidance


Published Date: 2019-09-11 | Source: Stephen Gunnion | Author: Stephen Gunnion

Attacq beats dividend guidance

The real estate investment trust has raised its full-year dividend by more than expected but says Edcon will weigh on its next payout.

Attacq's shares rose as much as 9% yesterday after it increased its 2019 dividend by more than expected. But the real estate investment trust has revised guidance for next year's distribution lower due to the impact major tenant Edcon will have on rental income.

Last year, Attacq paid a maiden dividend of 74c per share following its conversion to a REIT structure. At the time it lowered its distribution growth guidance for its 2019 financial year to between 7.5% and 9.5% due to the weaker fundamentals for the property sector. It said prevailing economic conditions had impacted the timing of planned disposals of non-core assets and the rollout of development activity. It expected its 2020 dividend to be 13% to 15% higher. Instead, It's paying a final dividend of 41c per share, taking its total dividend to 81.5c for the year. But next year's payout will probably be just 8% to 10% higher.

As part of a rescue deal for Edcon, owner of Edgars, Jet, Boardmans and CNA, Attacq participated in the retail group's recapitalisation programme and reduced its rent. It said its board's decision not to distribute rental income relating to the 40.9% of Edcon leases would negatively impact next year's distribution.

The REIT has an SA property portfolio, developments at Waterfall between Johannesburg and Pretoria, an investment in Central and Eastern European property investor MAS Real Estate, and a portfolio of assets in Africa outside SA, which it is busy exiting.

For the year to end June, it reported trading density growth in its retail portfolio of 6.8%, with Mall of Africa at Waterfall City increasing by 13.1%. Despite the challenging environment, its SA portfolio performed well, supported Mall of Africa's growth and revenue earned from the seven newly completed buildings in Waterfall. Combined with strong growth in dividends received from MAS, this resulted in distributable earnings increasing by 17% to R664 million. Following the disposal of the Achimota Retail Centre in Ghana, it said the value of its Rest of Africa retail investments reduced to 2.4% of gross assets.

Total assets decreased by 2.9% to R27.1 billion and its net asset value per share declined by 8.6% to R22.16 due to impairments to its Rest of Africa investment, negative fair value adjustments on some investment properties, and the impact of last year's dividend. Gross revenue rose 15.2% to R2.28 billion and distributable earnings per share jumped 17% to 94.4c.

Its shares retraced most of their gains to close 0.6% higher at R11.50.


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