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Mall of Africa owner Attacq declares no dividend, but will retain Reit status

Decision not to pay full-year dividend is largely due to it not getting dividends from its investment in Europe-based MAS Real Estate during the financial year and wanting to retain earnings to bolster its balance sheet.
Image: Supplied

Attacq Limited – the JSE-listed real estate investment trust (Reit) that owns the majority stake in Mall of Africa and is driving Gauteng’s Waterfall City development – decided not to declare a dividend for its latest financial year ending June 30, 2021.

It informed the market of the decision in a trading statement on the JSE on Monday, ahead of the publication of its full-year results on Tuesday morning.

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For its prior (2020) financial year, Attacq paid out a dividend per share (DPS) of 45 cents, which effectively was an interim dividend for the first half of the year (ending December 2019).

It did not pay out a final dividend for its 2020 financial year nor an interim dividend for FY2021, choosing to retain earnings to whether the Covid-19 storm and SA’s weak economy in-line with many of its JSE-listed peers.

While its latest move not to pay out any dividend for its 2021 financial year may come as somewhat of a surprise to shareholders, the group’s executives were at pains to point out during a results media briefing on Tuesday that Attacq will retain its Reit status and is likely to pay out some of the distributable income from the year during its next (2022) financial year.

“We still comply with Reit regulations … The decision is related to our group structure, with multiple subsidiaries that need to pay out distributions. Also it is a board decision to optimise Attacq’s capital structure, which means lowering its gearing [or loan-to-value/ LTV] level and having sufficient development capital to optimally rollout developments at Waterfall,” Attacq CFO Raj Nana told Moneyweb.

The group reported a 35.9% plunge in overall distributable income per share (Dips), to 46.8 cents from 73 cents per share, when compared to its prior (2020) financial year.

“The decrease is primarily attributable to the non-receipt of dividends from its investment in MAS Real Estate Inc as compared with R233.6 million received in the prior financial year [45.4% of distributable income],” Attacq noted in its trading statement.

“The South African operations have performed well in the current year, growing its Dips by 22.5%, led by the Waterfall City portfolio which grew by 30.6%. No contribution to Dips was received from its ‘rest of Africa’ retail investments,” it added.

Listen to Fifi Peters interview with Nana on Attacq’s latest results:

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REIT in name only.

“We still comply with Reit regulations … ”

How do they still comply? The article doesn’t explain that.

The JSE is a total joke when it comes to REITs.

End of comments.

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