RESULTS PRESENTATION for the year ended 29 February 2016
SARS Randburg INTRODUCTION SANDILE NOMVETE
INTRODUCTION TO DELTA • Dsds Sovereign underpinned JSE listed › asdasdas Market capitalisation # of REIT Diversifying $ investment 74% 26.3% R4.7bn of revenue from in Mara Delta * up from R3.5bn at 29 Feb 2016 sovereign tenants Assets under management of Dominant in Average property value of R10.5bn Durban & 3 R101.3m Pretoria CBDs by 100% black-owned asset manager * % holding as at 30 April 2016 # closing share price of R6.90 and 688,327,947 shares in issue as at 12 May 2016
HIGHLIGHTS SINCE LISTING September March November May July February June March February 2015 2010 2012 2013 2013 2014 2014 2015 2016 March 2010 The company is founded - inaugural acquisition is the Forum Building in Pretoria November 2012 Delta lists on the JSE main board with a portfolio value of R2.1 billion May 2013 Successful capital raise of R1 billion through rights issue for acquisitions July 2013 Launches R2 billion Domestic medium Term Note Programme (“DMTN Programme ”) February 2014 Achieves growth aspiration target of a of R7 billion asset portfolio by February 2014. REIT Status approved Launches and lists Delta International (rebranded to Mara Delta), the first specialist pan-African (excl. South Africa) property June 2014 fund to be listed on JSE 4 March 2015 Successful capital raise of R680 million, allowing Delta to pay down bridging facilities and to conclude acquisitions Restructures asset management company and is the first in the industry to ensure no “poison pill” carried forward in September 2015 contract, and asset manager 100% owned by black employees February 2016 Achieves third consecutive year of inflation-beating growth in distributions. Investment portfolio exceeds R10 billion .
SNAPSHOT Listing date: 02 November 2012 JSE classification: Real Estate Holdings & Development Asset manager: Delta Property Asset Management (Pty) Ltd JSE code: DLT Asset management fee: 0.35% of enterprise value 29 February 2016 28 February 2015 Shares in issue 533,097,436 458,409,836 Market capitalisation R3.47 billion R4.08 billion Share price (closing) R6.50 R8.90 NAV per share R10.61 R10.02 No. of properties 100 82 Valuation of property portfolio R10.1 billion R8.4 billion Average value per property R101.3 million R102.4 million Gross lettable area 813,505 m² 703,103 m² Tenant Sectorial profile (GLA) Office - Sovereign: 67.5% Office - Sovereign: 63.2% Office - Other: 21.4% Office - Other: 26.2% Industrial: 3.9% Industrial: 5.7% Retail: 7.2% Retail: 4.9% 5 Occupancy rate 91.02% 92.9% Weighted average net rent (per m 2 ) R 102.89 R 95.84 Weighted average escalation 7.84% 7.97% Loan to value # 47.2% 49.9% Fixed : Floating (excluding revolvers) 83% 78% * Weighted Average Cost of Debt 8.75% 8.10% # c.a 42.3% post the transfer of the Redefine portfolio *Restated with revolver facilities excluded
Auditor General Polokwane HIGHLIGHTS SANDILE NOMVETE
HIGHLIGHTS OF FY2016 Industry leading Distribution growth of Gearing reduced to Level 2 8% 42.3% B-BBEE at May 2016, from 47.2% Fourth consecutive period of growth in half-year distribution at Feb 2016 rating Successfully concluded Tenant retention = Reaffirmed R1.76bn 7 80% A2(za) Redefine and Free State portfolio short term GCR credit rating of expiring GLA * acquisitions * % of GLA due for expiry in FY2016 as at Feb 2015 that was successfully renewed or continuing on month to month basis
CMH Building PRIORITIES AND STRATEGY REVIEW SANDILE NOMVETE
PRIORITIES - FEEDBACK Priorities Status Detail Replacement of CFO Complete Shaneel Maharaj appointed Dec 2015 Dispose non-core assets Ongoing Concluded R659m Strengthening of balance sheet Ongoing Gearing reduced to 42.3% at May 2016, - Gearing Increase in unencumbered assets - Improve credit rating Focused asset management Ongoing CAPEX projects underway, stabilise acquired portfolios Inner city focus Ongoing Commitment to inner city nodes CAPEX and improvements underway Focus on Sovereign Underpin Ongoing Dominant sovereign specialist 9 International diversification Ongoing Holding in $ based Mara Delta
88 Field Street FINANCIAL REVIEW SHANEEL MAHARAJ
FINANCIAL HIGHLIGHTS OF FY2016 • Dsds Growth in assets of Disposals of › asdasdas Weighted average cost of debt R1.6bn R659m 8.75% assets under management R108m transferred, R551m under sale agreement > R10.5bn, R11.8bn at May 2016 Gearing reduced to Extended ave. fix period to Fixed debt % of 42.3% 11 2.13 83% at May 2016 from 47.2% at Feb compared to 78% at Feb 2015 years, up from 1.91 at Aug 2015 2016 (Feb 2015: 49.8%)
FOUR YEAR REVIEW 29 Feb 2016 28 Feb 2015 28 Feb 2014 28 Feb 2013 Revenue (R’000) 1,247,582 1,009,207 654,023 139,949 Net property income (R’000) 925,531 764,884 502,503 112,396 Finance costs (R’000) (412,713) (316,380) (151,149) (55,446) Cost to income ratio (net / gross) 12.2% /26.4% 10.2% / 26.0% 10.8% / 25.5% 14.1% / 23.6% Investment property (R’000) 10,095,181 8,420,400 6,965,730 2,119,112 Listed securities (R’000) 472,546 502,986 333,637 - Borrowings (R’000) 5,094,310 4,508,565 3,197,742 866,442 Gearing level 47.2% 49.9% 47.5% 38.7% Weighted average interest rate 8.75% 8.10% 7.50% 8.90% 12 Average debt expiry period (years) 2.3 2.4 2.8 2.9 Average debt fix expiry period (years) 2.13 2.4 3.0 2.8 Fixed % * 83% 78% 36% 96% Net asset value per share (excl deferred tax) R10.61 R10.02 R9.28 R7.89 * Figures restated to exclude revolver facilities
GROWTH IN DISTRIBUTIONS Historic distribution per share Cents / share 100.00 8.0% 90.00 15.6% 90.79 84.06 80.00 70.00 72.69 60.00 8.74% 50.00 9.63% 7.2% 47.90 23.07% 13 44.05 40.00 42.89 40.18 40.01 30.00 32.51 23.69 20.00 20.00 Nov-12 FY2013 HY Aug-13 HY Feb-14 FY2014 HY Aug-14 HY Feb-15 FY2015 HY Aug-15 HY Feb-16 FY2016 (Listing)
DISTRIBUTABLE INCOME STATEMENT R’000 FY2016 FY2015 Change % Net property income (excl. straight line accrual) 898,581 696,300 29.05% Administration expenses (82,744) (51,008) 62.00% Realised foreign exchange loss (39) - - Net finance costs (386,120) (312,415) 23.59% Dividend received from Mara Delta 36,779 18,247 101.56% Accrued distribution from other listed investments - 11,905 - Sundry income 7,266 13,590 (46.53%) Add back of debt structuring fees 6,141 - - Antecedent interest 9,010 3,425 163.07% 14 Taxation - 2,381 - Retained distributable earnings (912) - - Distributable income for the period 487,962 382,425 27.60% Number of shares in issue 533,097,436 458,409,836 16.29% Distribution per share / linked unit (cents) 90.79 84.07 7.99%
STATEMENT OF FINANCIAL POSITION R’000 29 Feb 2016 28 Feb 2015 Change % Assets Non-Current assets 9,085,759 8,396,823 8.20% Investment property 8,684,700 8,393,900 3.46% Fair value of property portfolio 8,500,183 8,213,035 3.50% Straight line rental income accrual 184,517 180,865 2.02% Investment in associate 383,327 - - Other non-current assets 17,732 2,923 506.64% Current assets 519,113 345,919 50.07% Assets classified as held for sale - 2,110,030 - Non-current assets held for sale and assets of disposal group 1,410,481 26,500 5,222% Total assets 11,015,353 10,879,272 1.25% Equity and liabilities Total Equity 5,656,629 5,074,171 11.48% 15 Equity 5,656,629 4,620,981 22.41% Non-controlling interests - 453,190 - Liabilities 5,358,724 4,632,758 15.67% Non-current liabilities 3,610,815 3,673,309 (1.70%) Current liabilities 1,747,909 959,449 82.18% Liabilities associated with disposal group held for sale - 1,172,343 - Total equity and liabilities 11,015,353 10,879,272 1.25%
DEBT SUMMARY As at 29 February 2016 Facility Type R’ m Weighted Ave. Rate Floating bank facilities 2,493 8.38% Fixed bank facilities 976 8.68% Revolving bank facilities 805 9.12% Total bank facilities 4,274 8.59% DMTN programme - floating 651 8.58% DMTN programme - fixed 100 8.01% Vendor loans 15 9.25% Total borrowings, net of accrued interest 5,040 8.58% Accrued interest 53 N/A TOTAL 5,093 16 Total fixed bank and DMTN facilities 1,076 8.62% Interest rate swap contracts 2,222 7.88% Cross currency swap 225 Libor + 2.89% Total fixed 3,523 Fixed % and total WACC 70% 8.75% Fixed % excluding revolving bank facilities 83%
DEBT EXPIRY PROFILE R’m 1,000 800 600 400 200 - 17 28-Feb-17 28-Feb-18 28-Feb-19 29-Feb-20 28-Feb-21 28-Feb-22 DMTN Programme Fixed Bank Facilities Floating Bank Facilities Revolving Bank Facilities Vendor Loans Swap Contracts
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