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Hyprop Investments Limited
Integrated annual report 2016
The Rand equivalent of USD-denominated bank debt increased due to the acquisition of Ikeja City Mall, ongoing development activity in AttAfrica
and Rand depreciation against the USD.
The loan-to-value (LTV) ratio at 30 June 2016 increased to 30,8% (2015: 22,9%), largely due to the inclusion of the funding of Hyprop’s effective 60%
share of the Delta City malls (Serbia and Montenegro) as well as the funding of Hyprop’s 75% share of Ikeja City Mall (Lagos, Nigeria).
The debt to acquire the Delta City malls comprises short-term bridge funding and the interest rate has therefore not been fixed.
Subsequent to year-end, a maturing South African bank facility amounting to R1,2 billion was refinanced with DCM funding (three, four and five-
year corporate bonds). This has increased the ratio of DCM funding to total debt to approximately 25%. All of Hyprop’s DCM funding is unsecured.
Distributable earnings statement and reconciliation to dividend declared
Distributable earnings
12 months
30 June
2016
R000
30 June
2015
R000
South African property portfolio
1 848 151
1 752 187
Investments in sub-Saharan Africa (excluding SA)
83 654
42 368
Investments in South-Eastern Europe
31 944
Word4Word Marketing
1 000
4 243
Fund management expenses
(64 922)
(62 001)
Net interest
(394 310)
(417 178)
Antecedent dividend
16 704
Total distributable earnings
1 522 221
1 319 619
Total shares in issue at year-end
243 256 092
243 256 092
Treasury shares in issue
(410 659)
(265 659)
Shares issued, August 2016
5 185 186
Shares in issue for distributable earnings
248 030 619
242 990 433
Dividend per share (cents)
619,9
543,0
Dividend per share growth %
14,2
15,0
Net interest costs for the period of R394,3 million (2015: R417,2 million)
reduced due to non-core asset sales in the second half of the 2015
financial year, amounting to R833 million (Stoneridge and CapeGate
Value and Lifestyle centres), the proceeds of which were applied to
the repayment of debt.
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 has been added back in the
calculation of distributable earnings for the year.
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. For further detail, refer to note 37.3
on page 151 of the group annual financial statements.
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.
Cash management
All rental income earned by the company, less property expenses and
interest on debt, is distributed to shareholders semi-annually.
Cash collected between distribution payments is paid into oating-
rate debt facilities to bene t from the interest saving.
New developments and capital expenditure are funded with debt
while acquisitions, depending on their size, may be funded in part
by equity. Proceeds from the sale of non-core assets are applied to
capital expenditure, developments and the reduction of debt.
Appreciation
I thank my finance team for their dedication, commitment and hard
work during the year. I also extend my appreciation to my fellow
board members for their sound advice and valued guidance.
Laurence Cohen
Financial director