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Hyprop Investments Limited
Group annual financial statements 2016
36.
Capital management
Hyprop’s capital consists of equity and long-term debt in the form of bank debt and debt capital market funding. The company’s capital
management objective is to maintain a strong capital base to provide sustainable returns to shareholders over the long term. The company’s
borrowings are limited by its Memorandum of Incorporation and the JSE Listings Requirements to 60% (2015: 60%) of the directors’ bona fide
valuation of the consolidated property portfolio.
Hyprop’s unutilised borrowing capacity can be summarised as follows:
GROUP
June 2016
R000
GROUP
June 2015
R000
Value of property portfolio*
33 368 587
28 565 526
60% thereof
20 021 152
17 139 316
Total gross borrowings (long term and short term)
9 926 088
6 691 909
Unutilised borrowing capacity
10 095 064
10 447 407
*
Refer to Segmental analysis
At year-end, long-term borrowings may become payable in accordance with the terms of the loan arrangements. The group’s policy is to
refinance borrowings (in line with its capital objective above), whilst servicing interest. Following year-end R1,2 billion of bank debt matured.
This was refinanced with debt capital market funding and accordingly no cash outflow was required to settle the maturing bank debt.
37.
Events after the reporting date
37.1
Disposal of investment property
Subsequent to year-end, Somerset Value Mart and Glenfield Office Park were sold for R185 million and R180 million respectively. Transfer of
Somerset Value Mart is imminent while transfer of Glenfield Office Park is subject to approval from competition authorities. The proceeds
from both disposals will be applied to reduce debt.
37.2 Refinancing of debt capital market (DCM) funding
Subsequent to year-end, a maturing South African bank debt facility amounting to R1,2 billion was refinanced with DCM funding (three,
four and five-year corporate bonds). This increased the ratio of DCM funding to total debt to approximately 25% (30 June 2016: 15%). All
of Hyprop’s DCM funding is unsecured.
37.3 Issue of shares and antecedent dividend
Subsequent to year-end, 5,2 million new shares were issued at R135 per share. The issue of new shares after year-end but prior to the record
date for the final distribution resulted in an antecedent dividend amounting to R16,7 million**. In accordance with industry best practice, the
antecedent dividend was added back in the calculation of distributable earnings for the year.
The proceeds of the equity issue will be applied to the reduction of Rand-denominated debt and to ongoing capital expenditure in the South
African portfolio.
**
In the summarised consolidated results published on 2 September 2016, the antecedent dividend was reflected as R32,1 million. The correct figure is
R16,7 million. The higher number was calculated by applying the antecedent dividend per share to the full year dividend, while the more correct
method for calculating the antecedent dividend calculates the amount based on the final dividend only.
The antecedent dividend is a theoretical amount, determined and disclosed only by industry best practice. The above change therefore has no impact
on the actual dividend paid (either in total or per share) or on earnings per share or headline earnings per share. The change also has no impact on the
IFRS compliant group or company annual financial statements.