JSE-listed Attacq’s diluted headline earnings per share increased by 92% to 22.8c for the year ended June 30, while vacancies across its retail and office portfolios rose.
Basic earnings per share increased to 23c from 12c, while profit for the year fell by 56.7% to R600-million.
“This is mainly owing to the strengthening of the rand, fair value adjustments and a one-off payment of R480-million in the previous year,” CEO Morné Wilken said during a presentation of the company’s results on Tuesday.
Adjusted net asset value per share rose 3.2% to R22.59 during the period and net rental income rose to R1.86-billion from R1.10-billion during the prior financial year.
He added that the growth in the company’s net asset value per share was negatively impacted by the strong rand, marked-to-market losses on Attacq’s interest rate swaps and impairments on certain investments in the rest of Africa and Central Europe.
Wilkin pointed out that this was countered by growth in the company’s South African portfolio and the completion of a further four properties in Waterfall, Gauteng.
Overall portfolio vacancies, measured in terms of primary gross lettable area (PGLA), increased by 4 690 m² to 3%.
After year-end 4 431 m² of PGLA was let, reducing vacancies as a percentage of total PGLA to 2.4%.
“The disposal of our Serbia and Cyprus investments, the shareholding in Nova Eventis post year-end, as well as some mature, noncore assets in South Africa, formed part of our repositioning. The proceeds from the disposals were used to reduce our debt in preparation for our real estate investment trust conversion,” stated Wilken.
Gearing improved from 39.9% to 37.1%.
The weighted average cost of funding remained flat over the last 12 months at 9.2%.
“At year-end, 90.8% of our debt was fixed by way of fixed interest rate loans and interest rate swaps across debt providers,” CFO Melt Hamman said.
He added that the company has also embarked on a process of amending its existing debt facilities to interest only facilities.
“We believe we are well positioned to navigate the current uncertain macroeconomic and political environment.”
The Waterfall development portfolio value increased by R202.9-million to R3.6-billion, comprising 13% of gross assets.
“The mall performed well during its first full year of trading and has created over 4 000 permanent jobs and has generated an average monthly trading density of R2 564/m² during the financial year,” Wilkin pointed out.
He added that, during the reporting period, Attacq focused on right-sizing the mall and planned to introduce many new tenants over the coming months.
The conservative value of Attacq’s rest of Africa retail investments was R1.2-billion, comprising 4.5% of total gross assets.
The net reduction over the year was owing to rand appreciation and further impairments. Attacq plans to maintain its investments in the rest of Africa at their current level.
Attacq is targeting a maiden dividend payment from its income-producing assets, of 73c a share for the year ended June 30, 2018.