Vukile Reports 11.8% Revenue Growth

  • Strong Performance in South Africa: Vukile's South African portfolio showed robust growth with a 5.4% increase in retail NOI.
  • Castellana Portfolio Excellence: Castellana's metrics in Spain were outstanding with an 11% NOI growth and 1.1% vacancies.
  • Solid Financial Health: Vukile maintained strong liquidity with R5.3 billion and reduced the LTV ratio to 40.7%.

Vukile Property Fund has released its audited results for the year ended 31 March 2024. The company’s performance has been outstanding, driven by strategic direction and focused execution.

Strong South African Portfolio Performance

Solid Financial Metrics

Vukile’s South African portfolio delivered impressive results. The like-for-like retail Net Operating Income (NOI) grew by 5.4%. Vacancies were reduced to a low of 1.9%. Rental reversions improved to 2.9%, up from 2.3% last year. The retail portfolio’s value increased by 5.8%.

Robust Liquidity and Balance Sheet

Vukile’s balance sheet remains strong with a liquidity position of R5.3 billion. This includes R2.4 billion in cash and undrawn debt facilities worth R2.9 billion. The Loan-to-Value (LTV) ratio was reduced to 40.7%. Vukile raised R1.7 billion from new share issuances and secured R1.1 billion in green and sustainability-linked funding post year-end. The corporate long-term credit rating of AA(ZA) was reaffirmed with a stable outlook.

Castellana Portfolio: A Benchmark in Spain

Superior Performance Metrics

Vukile’s Castellana portfolio in Spain showcased best-of-breed metrics. Normalised NOI growth was 11%. Vacancies were negligible at 1.1%. Positive rental reversions were recorded at 9.7%. Notably, 95% of retail space is let to international or national tenants.

Dividend and FFO Growth

The total Funds From Operations (FFO) per share increased by 6.7% to 154.2 cents. The final dividend per share is 72.1 cents, resulting in a total annual dividend of 124.2 cents per share, up 10.5% from the previous year. The total dividend of R1.3 billion is fully covered by cash from operations of R2.2 billion.

Financial Performance Overview

Vukile’s financial performance for the year ended 31 March 2024 is summarised below:

Financial Metric31 March 202431 March 2023% Change
Gross Property Revenue (Rm)4,0173,59411.8%
Operating Profit Before Finance Costs (Rm)2,3282,389-2.6%
Profit for the Year Attributable to Owners (Rm)1,5871,932-17.9%
Basic Earnings per Share (cents)152.27197.10-22.7%
Headline Earnings per Share (cents)131.34134.72-2.5%
Net Asset Value (R per share)21.5520.485.2%
Direct Property Investments (Rm)36,61234,6275.7%
Indirect Listed Property Holdings (Rm)3,6802,32958.0%
Total Dividend (cents per share)124.2112.410.5%

Impact of Lar España Dividend Timing

The profit for the year, basic earnings per share, and headline earnings per share were affected by the timing of Lar España’s dividend declaration. No income from Lar España was included in Vukile’s and Castellana’s IFRS income in FY24, resulting in a temporary reduction in these metrics.

Future Prospects and Strategy

Vukile remains poised for further growth. The South African market faces uncertainty due to upcoming elections. However, global markets show potential for interest rate cuts in the short to medium term.

Capital and Growth Strategy

Vukile’s strong liquidity position, with R2.4 billion in cash resources, supports its growth strategy. The company plans to offer a dividend reinvestment plan (DRIP) for the FY24 final dividend but does not intend for it to become a permanent funding feature.

Forecast for FY2025

Vukile expects FFO per share growth between 2% and 4%, and dividend per share growth between 4% and 6%. This forecast assumes:

  • NOI growth across direct property portfolios in SA and Spain of 5% to 7%.
  • Higher cost of funding due to base rate increases in SA and Spain.
  • Lar España dividend accrual of 70 cents per share for February 2024 to January 2025.
  • A ZAR/EUR exchange rate of R20.05.

This will result in FFO per share between 157.3 and 160.4 cents, and a full-year dividend per share between 129.2 and 131.9 cents.

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