Grit Real Estate Inc - Business, Portfolio and Dividend Update & COVID-19
(Registered by continuation in the
(Registration number: C128881 C1/GBL)
SEM share code: DEL.N0000
JSE share code: GTR
LSE share code: GR1T
("Grit" or the "Company" or the "Group")
BUSINESS AND PORTFOLIO UPDATE, 4 WEEK POSTPONEMENT OF DIVIDEND PAYMENT AND COVID-19
The board of Directors (the "Board") of
The safety and wellbeing of Grit's people and their families, our tenants, communities and wider stakeholders remains our top priority while the Group works hard to contain and mitigate the potential effects of the pandemic. The Group is closely monitoring the recommendations issued by the
The Group's high-quality assets have a weighted average lease expiry of 4.7 years, a weighted average contracted lease escalation of 2.7% per annum and are underpinned by a wide range of blue-chip multi-national tenants across a variety of sectors. Grit's property portfolio comprises a total of 47 assets (including 20 properties held in LLR) with rentals predominantly collected monthly, of which 94.1% are collected in US$, Euro or pegged currencies.
The Company's leadership team and all of our colleagues have been working tirelessly through this challenging and uncertain time to maintain, secure and operate our buildings and business effectively, often under very difficult circumstances. The Board is hugely grateful to them all.
· The Company continues to be in constant communication with all its tenants and key service providers to keep abreast of and review their circumstances as they respond to the pandemic. Operational staff are providing ongoing feedback to the Board and it will adjust the Company's approach when and where necessary.
· The Company remains strongly cash generative at an asset level and the majority of monthly and quarterly rental collections continue uninterrupted to date.
· As a result of disruptions across African domestic financial markets, the Company is experiencing longer central bank processing times and delays in movements of cash balances to
· The Company is also considering its target execution dates on a number of the announced pipeline opportunities and is assessing these in the context of funding options.
· The Company today announces a four-week postponement in the payment of its interim dividend of
· The financial results for the upcoming full financial year ending
"We have built a defensive and resilient portfolio on the back of strong relationships with our large multinational tenants and we remain committed to providing them long term real estate solutions whilst uplifting the people of
Our balance sheet remains robust, we have access to sufficient liquidity and our assets continue to generate strong cashflows. The ability of our commercial tenants to seamlessly resume trading when current restrictions begin to be relaxed remains one of our top priorities. We will continue to monitor closely the developing situation and update the market as appropriate."
Four-week postponement of dividend payment
The Board today announces a four-week postponement in settlement of the interim dividend of
Dividend number 12, which was declared on
The Company remains strongly cash generative at asset level as a result of its high-quality lease contracts, predominantly collected in US dollars, Euros or pegged currencies from high-quality multinational tenants across a diverse sector base. The payment postponement does not impact on the Company's current stated dividend policy. However, the Company is continuing to monitor closely the development of COVID-19 carefully and will keep shareholders updated on any material developments that affects the Company as the situation evolves.
In postponing the dividend payment date, the Board has taken into account the potential for disruptions caused by COVID-19 in the domestic African financial markets in which Grit operates, a lack of dollar liquidity in
The decision to postpone the dividend payment date has been taken by the Board following consultation with the various Exchanges on which the Company's shares are listed.
The Board does not expect any further postponement to the payment of the dividend and is confident that this prudent measure is in the best interest of all stakeholders against the backdrop of the current global COVID-19 pandemic.
1. Shareholders on the Mauritian sub-register who have opted to receive their dividends through bank transfer will be paid in US$. Shareholders on the Mauritian sub-register who have opted to receive their dividends by cheque will be provided with a MUR bank cheque based on the US$:MUR exchange rate prevailing on the payment date being Thursday,
2. Shareholders on the South African sub-register will receive dividends in South African Rand, based on the exchange rate announced by the Company on Tuesday,
3. Shareholders on the
In terms of the JSE Listings Requirements regarding Dividends Tax, the following information is only of direct application to shareholders on the South African share register, as the dividend is regarded as a foreign dividend for shareholders on the South African share register:
· the interim dividend is subject to South African Dividends Tax;
· the local dividend tax rate is 20%;
· there is no withholding tax payable in
· the number of ordinary shares in issue is 316 235 546; and
· the Mauritian income tax reference number of the Company is 27331528.
Resilient portfolio performing well
· The Board has mandated an internal steering committee (the "Steering Committee"), constituting executive and senior managers, to monitor the situation across all countries of operation.
· The corporate accommodation, industrial and office sector assets remain largely unaffected at present.
· Hospitality assets constitute 18.8% of Grit's total net asset value as at
· As a result of border closures in both
· The hospitality groups have all implemented cashflow mitigation actions, and whilst Grit might experience delays in the timing of payments, the Board expects that these groups will continue to have sufficient support and liquidity to continue settling their obligations in due course.
· The Mauritian government has announced support programmes and local banks are providing large scale liquidity facilities to the broader economy. The hospitality sector is expected to be a large beneficiary of the announced programmes.
· Authorities have separately requested that several three and four star rated hotels on the island of
· Edcon, a South African fashion retailer, is facing financial stress. The Edcon group represents only 1.2% of Grit's total Group rental income. Discussions are currently underway with a well-known international retail brand to take up any space that might become available within Grit's Zambian malls.
· The Zambian and
· Notwithstanding this short-term uncertainty, the Group is supporting its commercial occupiers with solutions to help ensure they are in a position to resume trading once the current restrictions are lifted.
Strong balance sheet and liquidity position
· Grit is continuing to engage with all of its lenders, who have confirmed their continued support.
· The Group has a well-financed balance sheet with a 43.9% Group LTV as at
· The Company has no debt maturities before
· The Group's lowest imposed LTV covenant stands at 53%, implying headroom of
· The Group's lowest imposed EBITDA covenant stands a 2x against 2.29x as at
· The Company remains strongly cash generative and has sufficient access to liquidity facilities.
· Notwithstanding the resilience of Grit's portfolio, given the global uncertainties and evolving pandemic, the Board has mandated a number of strategies to preserve liquidity, including:
o a moratorium on all non-essential expenditure, travel and new investments other than by specific exception;
o the Company is considering its target execution dates on a number of the announced pipeline opportunities and is assessing these in the context of funding options; and
o a continued focus on non-core asset disposals and other asset recycling opportunities identified prior to the onset of the pandemic.
The Board appreciates the fluidity and seriousness of the situation and cannot at this stage quantify all the potential impacts that COVID-19 may have on the Company. It draws comfort from the structure of its contracts, the quality of its multi-national tenants and the diversification of its portfolio across multiple geographies and asset classes. The Company is continuing to monitor carefully the development of COVID-19 and will keep shareholders updated as the situation evolves.
By Order of the Board
FOR FURTHER INFORMATION PLEASE CONTACT:
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+230 269 7090
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+44 779 512 3402
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+27 82 480 4541
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Maitland/AMO - Communications Adviser
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+44 20 7379 5151
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finnCap Ltd -
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+44 20 7220 5000
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+44 20 3772 4697
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+44 20 3772 4698
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Shamin A. Sookia
+230 402 0894
+230 402 0898
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+27 21 887 9602
The Company's LEI is: 21380084LCGHJRS8CN05
The Company is committed to delivering strong and sustainable income for shareholders, with the potential for income and capital growth. The Company is targeting a net total shareholder return inclusive of net asset value growth of 12.0%+ per annum.*
The Company currently holds primary listings on both the Main Market of the
Further information on the Company is available at http://grit.group/
* This is a target only and not a profit forecast and there can be no assurance that it will be met. Any forward-looking statements and the assumptions underlying such statements are the responsibility of the Board of Directors and have not been reviewed or reported on by the Company's external auditors.
(* Executive Director) (+ independent Non-Executive Director)
Registered address: c/o
Transfer secretary (
Registrar and transfer agent (
Corporate advisor and JSE sponsor: PSG Capital Proprietary Limited
SEM authorised representative and sponsor:
This notice is issued pursuant to the LSE Listing Rules, JSE Listings Requirements, SEM Listing Rule 11.3 and the Mauritian Securities Act 2005.
This information is provided by RNS, the news service of the
Quick facts: Grit Real Estate Income Group
Market Cap: $206.25 m
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