JSE-listed MAS Real Estate increased its distributable earnings by 98% year-on-year to €17.1-million for the six months ended December 31.
“The improvement in distributable earnings was driven by the full period effect of accretive acquisitions, the completion of developments and the deployment of capital into property development company PKM Developments,” CEO Morné Wilken said in a statement on Monday.
Further, MAS’s acquisition pipeline under due diligence, across Western Europe and Central Eastern Europe (CEE), totals more than €400-million, with substantial acquisitions to be completed within the next six to twelve months.
Meanwhile, mitigating the group’s future funding obligations in relation to PKM Developments has been a strategic priority, Wilken said.
Accordingly, the group took advantage of the opportunity to raise adequate equity to fully meet its commitments to PKM Developments and to finance suitable acquisition opportunities.
“MAS has a strong balance sheet and, with gearing at 25.8%, excluding the cash on hand, we have good headroom for growth. Our aim is to gear the overall portfolio to approximately 40% and deploy our balance sheet to develop and acquire dominant assets in strong locations within CEE, as well as undertake opportunistic developments and investments in Western Europe,” CFO Malcolm Levy noted.
Given the substantial acquisition and development pipeline in place and further opportunities being pursued, the board is confident that the group is well placed to achieve its targeted growth in distributions per share of 30% a year until June 2019.
“Our solid income producing portfolio and development pipeline underpins our objective of delivering high-quality and growing distributions on a sustainable basis over time.
“The retention of investment discipline is core to our business and investment decisions will be made taking a long-term, sustainable view rather than just meeting short-term distributions. Our future pipeline remains strong and our expansion strategy is on track,” Wilken said.
The company has proposed a distribution of 3.58c a share in respect of the first half of the current financial year, representing an increase of 34.6% over the comparative period in the previous financial year.