Fairvest Limited Reports 4.9% Revenue Growth and 67.83 Cents Dividend in H1 2024

Fairvest Limited, a South African REIT, announced impressive interim financial results for the six months ended March 31, 2024. The company declared distributions of 67.83 cents per A share and 21.24 cents per B share. The distribution per B share for the full year is expected to hit the upper end of the guidance range, between 41.50 and 42.50 cents per share.

Share TypeInterim Distribution (cents)Expected Full Year Distribution (cents)
A Share67.83
B Share21.2441.50 – 42.50

Fairvest maintained a 100% pay-out ratio, reflecting robust financial health and a commitment to shareholders.

Financial Performance

Fairvest’s revenue for the period increased by 4.9% to R998.4 million, compared to R951.6 million for the same period in 2023. Basic earnings per A share were 67.71 cents, a slight decrease, while basic earnings per B share saw a significant rise to 23.33 cents.

MetricH1 2024H1 2023% Change
Revenue (R’000)998,432951,5854.9%
Basic Earnings per A Share (cents)67.7168.13(0.6%)
Basic Earnings per B Share (cents)23.3320.0716.2%
Headline Earnings per A Share (cents)(19.37)68.13(128.4%)
Headline Earnings per B Share (cents)64.7120.49216.0%

Headline earnings per A share turned negative at (19.37) cents, while headline earnings per B share surged to 64.71 cents.

Portfolio and Operational Metrics

Fairvest’s property portfolio consists of 131 retail, office, and industrial properties valued at R11.8 billion. The company reported a vacancy rate of 5.3% and a tenant retention rate of 87.1%. The loan-to-value (LTV) ratio improved to 32.6%.

Key MetricsValue/Rate
Portfolio ValueR11.8 billion
Vacancy Rate5.3%
Tenant Retention87.1%
LTV Ratio32.6%

Dividend Declaration

Fairvest’s Board declared an interim dividend of 67.82580 cents per A share and 21.23845 cents per B share. The dividends will be paid on June 24, 2024.

EventDate
Last Date to Trade Cum DividendJune 18, 2024
Shares Trade Ex-DividendJune 19, 2024
Record DateJune 21, 2024
Payment DateJune 24, 2024

Tax Considerations

The dividends are classified as a “qualifying distribution” under section 25BB of the Income Tax Act. South African tax residents must include the dividends in their gross income but are exempt from dividend withholding tax. Non-resident shareholders will be subject to a 20% withholding tax unless reduced by a double taxation agreement.

Strategic Focus and Prospects

Fairvest aims to enhance shareholder value by transitioning to a retail-focused fund. Since merging in January 2022, the company has disposed of non-core assets worth over R1.3 billion. Fairvest plans to acquire minority shareholdings in four co-owned retail assets on accretive terms.

The company expects like-for-like net property income growth to exceed inflation. Despite economic challenges such as high inflation and load shedding, Fairvest is optimistic about positive renewal reversion from all sectors.

Conclusion

Fairvest Limited demonstrated resilience and growth in H1 2024. With a strategic focus on retail properties and maintaining strong financial metrics, the company is well-positioned for continued success.