Real estate investment trust (Reit) Resilient on Wednesday declared a final dividend of 100.48 cents per share for the second half of its 2020 financial year to the end of June.
The move comes as many of its JSE-listed property peers have opted to withhold dividends as they strive to weather the Covid-19 economic storm.
Resilient has also taken a knock from the pandemic fallout, with its South African retail property portfolio being devalued by R813 million for the financial year. However, the comparatively high dividend payout is likely be welcomed by insvestors.
The group’s second-half dividend declaration takes its total dividend payout for its full year to 368.44 cents per share. This follows the group declaring a dividend of 267.96 cents per share for its half-year to the end of December.
While Resilient’s total dividend payout for the year is 30.6% lower than its prior financial year, it is still higher than that of many of its peers.
“The final dividend was negatively impacted by the Covid-19 lockdown and the termination of the group’s cross-currency swaps,” the group noted in its JSE Sens results announcement. “This was partially offset by lower interest rates in South Africa that benefitted the group as R3.8 billion of interest rate hedges are in the form of interest rate caps.”
Resilient CEO Des De Beer is set to make a presentation on the group’s latest results in a webcast to investors and analysts on Thursday morning.
In its Sens statement, the group pointed out that in calculating its dividend for FY2020, only 59.1% of basic rental from the Edcon group was included. It also noted that its final dividend excludes a portion of distributions from its offshore investments in Nepi Rockcastle and Lighthouse capital.
Nepi Rockcastle did not declare a dividend for the six months ending June 2020, while three months’ worth of distributions (April to June) from Lightstone had been excluded due to a change in that company’s financial year end.
Resilient said the second half of its financial year (to end-June) was impacted by the group offering just over R166 million in discounts to tenants. The rental relief was offered in the wake of the impact of Covid-19 on tenants.
“Resilient’s approach to the Covid-19 pandemic has been, and will continue to be, supportive of tenants, particularly SMMEs and leisure-focused tenants,” it noted.
The group added that the period was also impacted by “the continued above inflation increases in administered prices, particularly utilities and rates”. This is not the first time Resilient has raised the issue, which also is a bugbear for most listed property counters.
Resilient owns 28 retail centres in South Africa with a gross lettable area (GLA) of 1.17 million square metres. It also has three retail centres in Nigeria with a GLA of 30 015m2.
Regarding property devaluations, the group noted: “Jones Lang LaSalle [JLL] valued the South African property portfolio at June 2020. Resilient’s share of the South African portfolio was devalued by 3.5% [R813 million]. Resilient’s share of the devaluation of the Nigerian properties amounted to US$8 million, as valued by CBRE Excellerate.”
Meanwhile, Resilient said it anticipates that economic recovery will “be gradual and uneven”.
However, the group added that it is well positioned to continue benefitting from the defensive quality of its assets and strong tenant profile.
“In light of the increased uncertainty due to Covid-19, particularly relating to distributions from Resilient’s listed securities, the board is not in a position to provide guidance for FY2021,” the group noted.
Resilient, however, said that it intends to “continue to declare and pay dividends” as it has done in the past. It will continue to pay out 100% of distributable earnings to shareholders.