Spear Properties Achieves Strong Financial Results and Boosts Dividend for FY2023

Spear Reit Limited Financial Results
  • Spear Properties achieves strong financial performance for FY2023
  • Distributable income per share (DIPS) increases by 5.31%
  • Dividends per share (DPS) rise by 11.31%

Spear Properties has released its audited financial results for the fiscal year ending on February 28, 2023, showcasing impressive performance and a substantial increase in dividends for its shareholders. The company reported noteworthy growth in distributable income per share (DIPS), distribution per share (DPS), and various key financial highlights.

During the year, Spear Properties recorded a 5.31% increase in DIPS, reaching 82.14 cents per share, compared to the previous corresponding period’s 78.00 cents per share. The DPS also witnessed significant growth, rising by 11.31% to 75.97 cents per share, up from 68.25 cents per share in the same period. Furthermore, the final DPS for the six months ending on February 28, 2023, experienced a substantial increase of 10.35% to 38.84 cents per share, compared to 35.19 cents per share in the previous corresponding period.

Spear Properties has maintained a strong average pay-out ratio of 92.45% of DIPS, highlighting its dedication to delivering value to shareholders. This represents an increase from the pay-out ratio of 88% in the previous corresponding period. Additionally, the company achieved an impressive collection rate of 98.61% of billings as of March 17, 2023.

The successful renewal and re-letting of 105,738 square meters of space played a significant role in Spear Properties’ positive performance, resulting in an average negative reversion of 3.69%. Moreover, the company’s net asset value per share increased by 1.59% to 1148 cents per share, demonstrating steady growth compared to 1130 cents per share in the previous corresponding period.

Spear Properties reported a portfolio occupancy rate of 92.18%, with all properties in the Western Cape region fully occupied. To strengthen the balance sheet and rebalance the portfolio, the company strategically disposed of 15 on Orange and 3 other non-core assets, resulting in a 5.85% decrease in the investment property value, which stood at R4.22 billion.

Furthermore, Spear Properties made significant progress in reducing its loan-to-value ratio, which decreased to 36.30% from 39.05% reported as of February 28, 2022. This improvement reflects the company’s commitment to maintaining a healthy financial position.

In terms of financial performance, Spear Properties achieved a revenue increase of 1.11% to R580 million compared to R574 million in the previous corresponding period. Excluding smoothing, revenue recorded a more substantial growth rate of 3.48% to R574 million, up from R555 million previously.

The company’s headline earnings per share (HEPS) rose by 3.42% to 79.85 cents per share, while earnings per share (EPS) increased by 3.24% to 78.61 cents per share, both compared to the previous corresponding period.

With regard to dividend declaration, Spear Properties’ directors have resolved to declare a gross final dividend of 38.83624 cents per share from income reserves for the six months ending on February 28, 2023. Shareholders who are not exempt from dividend withholding tax or are not entitled to a reduced rate will receive a net dividend amount of 31.06899 cents per share, after the deduction of South African dividend tax of 20%.

The following dates are important for shareholders regarding the dividend declaration:

  • Declaration date: Monday, May 22, 2023
  • Last day to trade cum dividend: Tuesday, June 6, 2023
  • Ex-dividend date: Wednesday, June 7, 2023
  • Record date: Friday, June 9, 2023
  • Payment date: Monday, June 12, 2023

Spear Properties’ strong financial results, characterized by increased DIPS, DPS, and dividends, reflect the company’s dedication to creating long-term value for its shareholders. The successful renewal and re-letting of space, combined with the strategic disposal of non-core assets, have contributed to the overall positive performance and steady growth of the company.

As Spear Properties continues to strengthen its portfolio and maintain a healthy balance sheet, investors can look forward to sustainable returns and ongoing growth in the real estate sector.

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