Delta Property Fund intends to apply to the JSE for the reinstatement of trade in its shares on the main board of the exchange, following the publication of the company’s half-year results for the six months ended 31st August 2020.
As the company’s 2020 financial statements have a bearing on and are used as a comparative basis for the interim results, Delta Property Fund was not able to release its interim results within the three-month period end. The suspension of the REIT’s shares on the 15th of December 2020 was a consequence to the withdrawal of the company’s 2020 financial statements.
“The results for the six months ended 31st August 2020 mark a period of significant changes for Delta Property Fund” comments interim CEO, Bongi Masinga.
“These include the appointment of new members to the board of director to drive a step-change in the group’s performance, the appointment of a new interim executive leadership team as well as two separate independent forensic investigations into irregularities which resulted in the withdrawal and reissue of the financial statements for the year ended 29th February 2020”.
On Friday, the 28th of May 2021, Delta Property Fund issued a SENS announcement informing shareholders that due to the significant time and resources expended by the company and its auditor, BDO on the re-issue of the company’s audited financial statements for the year ended 28th February 2020, and the preparation of the interim results, it now expects to publish its 2021 financial statements by the 30th of June 2021.
“Our immediate objective of stabilising the company and its senior team has been met, and the recruitment process for a permanent CEO is progressing well” says Masinga.
Despite corporate governance challenges and considerable macro-economic headwinds during the reporting period, which included the hard economic national lockdowns to curb the spread of Covid-19, Delta Property Fund’s portfolio proved defensive, supported by its sovereign underpin.
Collections for the review period averaged 80.8% with relatively minimal rental relief of R11 million granted to support smaller retail tenants. Administrative expenses for the period increased by 15.0% mainly because of increased legal expenses and the consolidation of the group’s asset manager, DPAM which resulted in the elimination of the asset management fee and concomitant replacement with the salary expenses as well as related accounting expenses.
Finance costs decreased significantly by 20.2% due to the reduction in the repo rate during the period. The weighted average all-in cost of funding reduced to 8.2% (2019: 10.0%) with the interest cover ratio of 1.89 times (2019: 1.73 times).
Loan to value (LTV), although high, decreased to 54.1% (Feb 2020: 55.7%), benefiting from cash generated by operations and repayment of debt facilities. The conclusion of disposals together with capital expenditure on the portfolio is envisaged to further improve the LTV in the short to medium term, with the company’s long-term strategy still targeting an LTV of below 40%.
Delta Property Fund’s distributable income per share amounted to 16.3 cents for the six months ended 31 August 2020 (31 August 2019: 30.33 cents per share).
Following the solvency and liquidity test which takes into consideration the working capital cash flow forecast, incorporating the expected working capital requirements, capital expenditure requirements and contracted tenant installations relating to historic lease renewals, the board resolved not to declare an interim distribution.