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Rebosis delays FY results in hope of an unqualified audit

As auditor calls for restatement related to part of last year’s financials.
Forest Hill City shopping centre in Centurion Gauteng is one of Rebosis's major regional malls in SA. Image: Supplied

Micro-cap Rebosis Property Fund has delayed the release of its reviewed 2020 annual results to the end of August, which were meant to be published on Monday (November 30).

The group, which is majority controlled by Eastern Cape- born property magnate Sisa Ngebulana, noted in a JSE Sens statement that the delay relates to the qualified audit opinion expressed by its auditors (BDO South Africa Incorporated) for the year ended August 31, 2019.

“The auditors’ technical team has now identified that Rebosis requires restatement to the 2019 financial year information, specifically relating to the statement of comprehensive income of the company,” the fund said.

Read: R114m puts Ngebulana back on top as largest Rebosis shareholder

“The company [Rebosis] believes that performing this required restatement will allow for an unqualified audit opinion to be issued by the auditors for the reviewed [2020] results,” it added.

Rebosis now expects to release its results later this week “to on or about Thursday, 03 December 2020”.

The latest debacle raises further red flags around the group and whether it will retain its Real Estate Investment Trust (Reit) status following not paying out a dividend to shareholders last year. It comes just a week after the group announced the resignation of its chief investment officer Rob Becker.

Read: Rebosis expects to retain Reit status, despite paying no dividend

“The delay is due to a notification provided by the audit partner from BDO South Africa Incorporated… an hour before the intended release time on a matter identified by the auditors’ technical team,” Rebosis pointed out in its Sens statement.

“It must be noted that all aspects of the audit to facilitate an opinion and the results being reviewed were completed by that stage,” the fund added.

Rebosis’s share price fell 12% on the news on Monday (closing at 22 cents a share), but this equated to just 3 cents a share lower on the day.

The group has lost more than 40% of its market cap over the last year and almost 98% over the past 3 years. It is now valued at just under R154 million.

Rebos

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This is going to zero.

I understand the sentiment, but I beg to differ.

Dividends will likely be zero (second year running -with implications for REIT status, or not), but all that property, cannot, be worth zero rands. Even with all that debt, and ‘tough as hell’ trading conditions, there is still value there, I’d say, sentiment notwithstanding.

There is a huge difference between saying the property is worth zero vs the company is worth zero.

A delay is a qualification.

End of comments.

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