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Grit Real Estate Income Group

Grit Real Estate Inc - Results for six months ended 31 December 2020

RNS Number : 0256P
Grit Real Estate Income Group
15 February 2021
 

GRIT REAL ESTATE INCOME GROUP LIMITED

(Registered in Guernsey)

(Registration number: 68739) 

LSE share code: GR1T

SEM share code: DEL.N0000

ISIN: GG00BMDHST63

LEI: 21380084LCGHJRS8CN05

("Grit" or the "Company" and, together with its subsidiaries, the "Group")

 

 

HALF YEAR ABRIDGED UNAUDITED CONSOLIDATED RESULTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2020

 

Grit Real Estate Income Group Limited, a leading pan-African real estate company focused on investing in and actively managing a diversified portfolio of assets underpinned by predominantly US Dollar and Euro denominated long-term leases with high quality multi national tenants, today announces its results for the six months ended 31 December 2020.

Financial highlights

 

6 Months ended

31 Dec 2020

6 Months ended

31 Dec 2019

Increase/

Decrease

Dividend per share

USD1.50 cps

USD5.25 cps

-71.4%

Gross Rental income (including associates)

USD31.6m

USD31.7m

-0.1%

Profit from operations1

USD12.9m

USD10.7m

+19.7%

Adjusted EPRA earnings per share2

USD3.16 cps

USD5.67 cps

-44.2%

Distributable earnings

USD 3.88 cps

USD 5.48 cps

-29.2%

EPRA cost ratio (incl associates and joint ventures) 7

14.3%

18.6%

-4.3 pts

 

 

As at 31 Dec 2020

As at 30 Jun 2020

Increase/

Decrease

EPRA Net reinstatement value ("NAV") per share3

USD124.4 cps

USD117.1 cps

+6.3%

Total Income Producing Assets4

USD849.2m

USD823.5m

+3.1%

Weighted average lease expiry ("WALE")

5.2 yrs

5.0 yrs

+0.2 yrs

EPRA portfolio occupancy rate8

92.0%

94.1%

-2.1%

Group Loan to Value ("LTV")

49.3%

50.2%

-0.9%

Property LTV

46.5%

46.5%

+0.0%

 

     Dividends per share declared for the six months ended 31 December 2020 of USD1.50cps (December 2019: USD5.25cps), reflecting recent strong rent collection trends and the Group's early progress towards its near term LTV target of 45%. Extra-ordinarily, the Board will consider a further one off quarter end dividend in 2021 dependent on continued progress towards near term LTV targets, sustained strong cash collections, specifically in the hospitality sector, and the restructure of the Drive in Trading guarantee.

     LTV reduced to 49.3% as a result of part disposals of Acacia Estates and reductions in revolving credit facility balances. Movements in EUR foreign exchange rates, although supportive of NAV, had a negative impact on reported LTV as a result of the Group's higher proportion of EUR debt to EUR asset value (which hedges the balance sheet exposure to EUR fluctuations to the USD). The Board remains committed to reducing LTV levels over the medium-term to between 35%-40%, and additionally has a near term focus of reducing its LTV to below 45% by the end of the current financial year.

      In December 2020, Grit raised gross proceeds of approximately £7.2 million/USD9.8 million from high calibre investors, underpinned by the support of its shareholder M&G, through a successful placing of 15,000,000 ordinary shares at a price of £0.481/USD0.65 per share.

     EPRA NAV per share grew 6.3% in the six months to 31 December 2020 to USD1.244 (June 2020: USD1.171). EPRA NAV growth was positively impacted by FX moves and operational earnings offsetting negative valuation impacts on retail assets.

      c.80% of the portfolio was independently valued at 31 December 2020. Total income producing asset value  increased to USD849.2 million (June 2020: USD823.5 million) and like for like property valuations (including FX movements) increased 2.2%.

      Profit from operations increased 19.7% to USD12.9 million (December 19: USD10.7 million), as a result of strong operating cost control and robust portfolio revenue performance that offset revenue weakness in the retail sector.

•       Adjusted EPRA earnings per share fell 44% predominantly as a result of one off items in the base that did not repeat in the current year. In the prior year development profit of USD2.5 million relating to the VDE development and USD3.6 million of non recurring profits in associates were recognised.

      Weighted average cost of debt declined to 5.8% (June 2020: 5.9%) as a result of active treasury management  activities and downward movements in LIBOR over the reporting period.

Operational highlights

     Property portfolio now comprises a total of 54 investments across eight countries and five property sectors.

•       Strong rent collection which has averaged 91.4% of Grit attributable contracted rental over the six month period to 31 December 2020, increasing from 86.0% in the 4 months to 30 June 2020.

     88.7% of revenue is earned from multinational tenants5 (June 2020: 90.2%; December 2019: 92.8%).

     93.0% of revenue is produced in hard currency6 (June 2020: 89.1%; December 2019: 94.1 %).

     EPRA portfolio occupancy rate declined to 92.0% as at 31 December 2020 (June 2020: 94.1%) as a result of increasing vacancies in retail assets, predominantly AnfaPlace Mall and Buffalo Mall, which contributed 1.3% and 0.5% to the increase respectively. Leasing activity is improving and management are confident that vacancies will be materially filled once Covid restrictions are lifted in each of the countries of operation.

     Weighted average annual contracted rent escalations at 2.9% (June 2020: 2.8%).

     Weighted average property capitalisation rate 8.1% (June 2020: 8.1%).

Post balance sheet activity

      Proposed an interim dividend in respect of the six months to 31 December 2020 of USD1.50 cps.

        The Board extraordinarily will consider an additional one-off dividend declaration prior to the financial year-end dependent on the further progress of LTV reduction strategies, the finalisation of the Drive in Trading guarantee restructure and continued strong cash collections, specifically in the hospitality sector.

      On 5 February 2021, the Company announced that it had successfully migrated its corporate domicile to Guernsey from Mauritius on 4 February 2021. This Migration, coupled with its recent transfer to the Premium Segment of the Official List of the FCA on 22 January 2021, is expected to facilitate Grit's inclusion in the FTSE Indices. This, in turn, is anticipated to help raise Grit's profile with investors, improve liquidity in Grit's shares and place Grit in an enhanced position to fund its accretive pipeline of investments.

Notes

1        % move based on actuals versus rounded numbers on face of highlights table.

2       Adjustments to make earnings better representative of what the Directors believe is the underlying company performance and includes adjustments for non-cash item such as unrealised foreign exchange movements, straight-line leasing and amortisation of lease premiums, amortisation of right of use land, impairment of loan and deferred tax adjustments - refer to note 16 for further details on adjustments made.

3       Explanations of how European Public Real Estate Association ("EPRA") figures are derived from IFRS are shown in note 16. The Company has historically provided EPRA NAV which has been replaced by 3 new EPRA metrics of which Net Reinstatement Value is the most applicable to the Company.

4       Includes properties, investments and property loan receivables - Refer to Financial Review.

5       Forbes 2000, Other Global and Pan-African tenants.

6       Hard (USD and EUR) or pegged currency rental income.

7       Based on EPRA cost to income ratio calculation methodology which includes the proportionately consolidated effects of LLR and other associates.

8       Property occupancy rate based on EPRA calculation methodology - Includes associates.

Bronwyn Knight, Chief Executive Officer of GRIT Real Estate Income Group Limited, commented:

"Whilst we are maintaining an appropriately cautious stance in light of potential longer-term effects from COVID-19 on our tenants and the wider economy, we remain confident in our strategy of unlocking superior total returns for our shareholders in the medium to longer term.

With our expertise in African real estate, and our team's experience, knowledge, skill sets and relationships in various regions, we will continue to optimise assets and create value through proactive asset management and risk-mitigated pre-funding models to support NAV growth. In addition, we will continue to selectively pursue potential investments from our high-quality, diversified and yield accretive acquisition pipeline, supported by a strong tenant base and possible co-investment opportunities.

The Company aims to return to paying an attractive income distribution and generating total annual return growth and is well positioned to capitalise on significant recovery potential of the African continent from its unique high-quality portfolio of properties. We are assessing a wide number of options to fund our refocused investment pipeline of high-quality accretive assets leased to multinational corporates and attracting hard currency rental streams, including further asset recycling and hybrid instruments.

The recent transfer to the Premium Segment of the Official List of the FCA, and the migration of our corporate seat to Guernsey is expected to facilitate Grit's inclusion in the FTSE Indices. This, in turn, is anticipated to help raise Grit's profile with investors, improve liquidity in Grit's shares and place Grit in an enhanced position to fund its accretive pipeline of investments."

FOR FURTHER INFORMATION PLEASE CONTACT:

Grit Real Estate Income Group Limited

 

Bronwyn Knight, Chief Executive Officer

IR@Grit.group

Darren Veenhuis, Chief Strategy Officer

 

 

 

Maitland/AMO - Communications Adviser

 

James Benjamin

+44 7747 113 930

Jason Ochere

Grit-maitland@maitland.co.uk

 

 

finnCap Ltd - UK Financial Adviser & Broker

 

William Marle / Giles Rolls / Teddy Whiley (Corporate Finance)

+44 20 7220 5000

Mark Whitfeld / Pauline Tribe (Sales)

+44 20 3772 4697

Monica Tepes (Research)

+44 20 3772 4698

 

 

Perigeum Capital Ltd - SEM Authorised Representative and Sponsor

 

Shamin A. Sookia

+230 402 0894

Kesaven Moothoosamy

+230 402 0898

NOTES:

Grit Real Estate Income Group Limited is a leading pan-African real estate company focused on investing in and actively managing a diversified portfolio of assets in carefully selected African countries (excluding South Africa). These high-quality assets are underpinned by predominantly US Dollar and Euro denominated long-term leases with a wide range of blue-chip multi-national tenant covenants across a diverse range of robust property sectors.

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 a primary listing on the Premium segment of the Main Market of the London Stock Exchange (LSE: GR1T)), and a secondary listing on the Official Market of the Stock Exchange of Mauritius Ltd (SEM: DEL.N0000).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.

Directors:

Peter Todd+ (Chairman), Bronwyn Knight (Chief Executive Officer)*, Leon van de Moortele (Chief Financial Officer)*, Jonathan Crichton+, Nomzamo Radebe, Catherine McIlraith+, David Love+, Sir Samuel Esson Jonah+, and Bright Laaka (Permanent Alternate Director to Nomzamo Radebe).

(* Executive Director) (+ Independent Non-Executive Director)

Company secretary: Intercontinental Fund Services Limited

Registered office address: PO Box 186, Royal Chambers, St Julian's Avenue, St Peter Port, Guernsey GY1 4HP

c/o Intercontinental Fund Services Limited, Level 5, Alexander House, 35 Cybercity, Ebene, 72201, Mauritius

Registrar and transfer agent (Mauritius): Intercontinental Secretarial Services Limited

Sponsoring broker: Capital Markets Brokers Ltd

SEM authorised representative and sponsor: Perigeum Capital Ltd

UK Transfer secretary: Link Assets Services Limited

 

This notice is issued pursuant to the FCA Listing Rules, SEM Listing Rule 15.36A and the Mauritian Securities Act 2005.  The Board of the Company accepts full responsibility for the accuracy of the information contained in this communiqué. 

CHIEF EXECUTIVE OFFICER'S STATEMENT

In what remains a very challenging market, the Board and management team have taken decisive, proactive action to defend and grow our position and safeguard the business to deliver enhanced value over the short and long term. People and economies across the world are coming to grips with the impact of COVID-19, and while the pandemic continues to test the resilience of our portfolio, the high and strengthening rent collection performance will continue to underpin the Group's focus on further improving its financial strength.

To optimise the Company's access to capital markets, and by adhering to the highest levels of corporate governance, Grit successfully completed its step up to the Premium listing segment of the Main Market of the London Stock Exchange ("LSE") and has also redomiciled its corporate seat to Guernsey in February 2021. These are both significant milestones, and along with the Company's de-listing from the Johannesburg Stock Exchange ("JSE") in July 2020, positions the Group well for FTSE All Share index series inclusion in due course. Grit is now primary listed on the LSE and has a secondary listing on the Stock Exchange of Mauritius Ltd ("SEM").

In the first half of this financial year, despite enforced lockdowns, our team delivered a number of operational, financial and corporate actions that position the Group well for a recovery in the economies where we operate, including:

•  Strong operational performance whereby, on a like for like basis, Covid-19 induced revenue weakness was offset with strong cost control, which resulted in a net operating income (inclusive of associates) growth of 0.9% in the period. Full year impacts of acquisitions drove further gains and resulted in total net operating income growth (inclusive of associates) of 8.1% versus the prior period.

•  Strong rent collection, which has averaged 91.4% of Grit attributable contracted rental over the six month period to 31 December 2020, increasing from 86.0% in the 4 months to 30 June 2020.  

•  Weighted average lease expiry increased to 5.2 years (June 2020: 5.0 years) through focused leasing activity despite travel restrictions and heightened uncertainty created by the Covid pandemic.

   The capital recycling programme performed well; the Group disposed of minority interests in AnfaPlace Mall and Acacia Estate raising net cash (after settling the construction costs of the AnfaPlace Mall refurbishment which was embodied in the sale contract of US$25.4 million) of c.USD11.9 million in liquidity and is currently in advanced discussions on the sale of other non-core assets.

   As a precautionary measure, Grit engaged with all of its lenders on extending LTV and interest covenants during the six months and lifted the lowest applied Group LTV covenant to 55%, providing further liquidity headroom.

   The Group extended maturities on several Group facilities and secured an additional USD7 million revolving credit  facility from Nedbank.

From the onset of the pandemic, management implemented a strong cost control programme and prioritised liquidity and cash collection. Rent collections continued to improve and have averaged 91.4% in the six months to 31 December 2020 (from 86% in March to June 2020), with hospitality sector collections accelerating over the last three months.

 

Office

Retail

Corp  Accom

Hospitality

Light Industrial

Total July to Dec 2020

Total Mar to June 2020

Contracted Rent

100%

100%

100%

100%

100%

100%

100%

Rent deferrals

0%

(0.5%)

0%

(13.8%)

0%

(2.9%)

(14.4%)

Rent Concessions

0%

(14.4%)

0%

0%

0%

(4.4%)

(8.7%)

Expected collection rate

100%

85.1%

100%

86.2%

100%

92.7%

76.9%

 

 

 

 

 

 

 

 

Collections (% of contracted rent)

101.2%

84.1%

98.7%

80.2%

101.5%

91.4%

86.0%

Movement in debtors balances (excl. agreed deferrals)

(1.2%)

1%

1.3%

6%

(1.5%)

1.3%

(9.1%)

The Group had in excess of 80% of its properties, by value, independently valued at 31 December 2020 which showed  modest growth in asset values for the six-month period. Like for like property valuations (inclusive of FX moves) grew 2.2%, with upward moves largely resulting from foreign exchange translation moves, predominantly in the EUR exchange rate, which offset further weakness in retail asset valuations. The office, light industrial, corporate accommodation sector assets and other investments, which collectively represent 52.4%, by value, of the Group's economic interest in its property portfolio, remain relatively unaffected by the pandemic and continue to trade well.

Grit does not assume direct hospitality operating risk by virtue of its triple net lease contracts with large hotel operators. Hospitality assets constitute 24.7% by value, of the Group's economic interest in property assets. The credit quality of our hospitality tenant operators are underpinned by the financial strength of their conglomerate owners and support being received from various governments' COVID-19 programmes. Both Lux Hotel group and Beachcomber have received local wage subsidy, land rent support and more recently have qualified for liquidity support from the Mauritian government programme under the auspices of the Mauritian Investment Corporation ("MIC"). Hospitality operators have resumed rental payments to Grit, and although collection rates have not yet fully stabilised, we expect these to normalise in the coming months, and to collect 100% of the rents outstanding over the lease term. The deeper than expected Covid second wave, currently being experienced globally, is likely to impact the sustainability of the rental collections in the Mauritius hospitality sector until such time as the proceeds of the MIC support program are deployed to both Lux and Beachcomber and/or the borders are once again re-opened. The Board will continue to closely monitor collection trends in the coming months as part of its assessment of further dividend distribution recommendations.

Although the pandemic has accelerated structural challenges in the retail sector, convenience centres, which typically have a higher proportion of rental income from grocery anchor tenants and essential service offerings, are expected to recover over the medium term. Grit has actively reduced its economic interest to the retail sector, which now makes up 22.9% (2019: 27.2%) of the Group's economic interest in its property portfolio, and will continue to recycle and/or re-purpose or redevelop assets where there are opportunities to do so. Over the six months to 31 December 2020 retail sector property valuations (inclusive of forex translation movements) dropped a further USD7.3 million impacted by lease rates, re-tenanting disruptions and further requests for concessions which continue to pressurise their near term performance.

The Group's Portfolio's EPRA vacancy rate rose to 8.0% at 31 December 2020 (5.9% at 30 June 2020) as a result of material near term vacancy increases in retail sector assets, predominantly AnfaPlace Mall and Buffalo Mall, which contributed 1.3% and 0.5% to the increase respectively. Leasing activity is improving and management are confident that vacancies will be materially filled once Covid restrictions are lifted in each of the countries of operation.

The weighted average lease expiry of 5.2 years at December 2020 (5.0 years at 30 June 2020) was impacted by the re-releasing activity in Mukuba Mall, where the asset passed its initial five years anniversary in March 2020. The Vodacom Building also passed its first renewal period, after 10 years, with commercial terms having now been agreed on the lease extension. Other notable leases in the period included:

Building

Sector

New Tenant

GLA (m2)

Duration (years)

Mukuba Mall

Retail

Game

5060

5

Mukuba Mall

Retail

Shoprite

4262

5

VDE Housing Estate

Corporate Accommodation

Tsebo

3600

3

AnfaPlace Mall

Retail

Label Vie

3573

12

Cosmopolitan Mall

Retail

Cress Motors

2539

5

Bollore

Light Industrial

Bollore

2511

5

Mukuba Mall

Retail

Pick and Pay

2240

5

Mukuba Mall

Retail

Home Essentials

1510

2

PIPELINE AND INVESTMENT UPDATE

Grit's investment strategy is clearly defined, and even more so in today's terms, and the Company will continue to be selective in its approach to further growing the portfolio. The Company will focus on the asset classes that have proven to be resilient, and in particular, is excited about the prospects and opportunities in the light industrial and healthcare sectors in Africa. In light of this renewed focus, and as a result of the Board's commitment to strengthening the balance sheet, today the Group announces an updated and refined set of pipeline opportunities. The focused list of pipeline transactions to be progressed either have funding earmarked through proceeds from asset recycling initiatives or have high visibility of funding through alternative sources.

Concluded transactions

The Company recently announced the disposal of a 39.50% stake in AnfaPlace Mall (on 18 September 2020) and 26.65% of the stake which it holds in Acacia Estate (on 16 October 2020). Final conclusion of both transactions has been achieved and the proceeds realised by Grit.

Transactions in progress

Grit's re-development of its Bollore light industrial facility in Mozambique is progressing towards the targeted completion dates under the programme, as announced on 18 September 2020. Phase 1 sectional completion has been successfully achieved while the remaining phase is progressing within budget and ahead of programme in relation to its final completion date in December 2021.

The phase 1 Cap Skirring, Senegal re-development programme, which formed part of the initial acquisition of the resort in January 2020, is by mutual agreement being subjected to a reduced capex programme of EUR6 million in 2021, aligning with Club Med's intended re-opening of the resort in October 2021.

Transactions no longer being progressed

As a result of constrained funding options, impacts of Covid-19 and pursuant to the Board's strategy to improve the strength of the Group's balance sheet, the following transactions contained in the "Pipeline Acquisitions Update" announced on 25 October 2019 (and a further update to the market circulated on 28 January 2020) and the "Acquisitions of new REIT and assets in Morocco" announced on 12 February 2020 will no longer be pursued:

Property Name

 

Country

 

Sector

 

Type

 

PwC Head Office

Ghana

Corporate offices

Asset Acquisition

Huawei Head Office

Ghana

Corporate offices

Asset Acquisition

Massira Corner **

Morocco

Mixed use

Asset Acquisition

 

**       The Massira Corner acquisition included a Moroccan authorised OPCI vehicle, and although Grit will no longer pursue this specific asset acquisition, it still continues to target the launch of an OPCI vehicle in Morocco. The Company will initially prioritise the contribution of its Casablanca based retail asset (AnfaPlace Mall) into this vehicle, and will additionally introduce other Moroccan pipeline opportunities. Further announcements in this regard will be made in due course.

Transactions being progressed

Further to the "Pipeline Acquisitions Update" announced on 25 October 2019, the following projects continue to be progressed, albeit under revised funding models with development funding institutions ("DFI"). Further detail on these to be announced in due course:

Property / Investment

Country

Sector

Revised Type

 

St Helene Hospital

Mauritius

Healthcare

Development

Coromandel Hospital

Mauritius

Healthcare

Development

Orbit Africa (Ph 1 & 2)

Kenya

Light industrial

Sale and leaseback

Committed investment in Gateway Real Estate Africa ("GREA")

GREA is a private company funded by equity commitments totalling USD175 million from four large shareholders and is staffed by an experienced team of professionals with an established track record in African property development and project delivery. The company was founded and co-sponsored by Grit in 2017, and through its 19.98% equity interest in GREA, Grit has minority exposure to its development projects, assets and returns and has access to a source of attractive completed assets.

Grit's capital commitments in relation to its 19.98% equity interest are staggered and correlate to development projects and associated timelines. GREA has recently been successful in securing significant projects in the diplomatic housing sector, most notably the DH1 project in Ethiopia and the DH3 project in Kenya, both secured by 10-year leases with the United States Government OBO Department, the former of which is nearing completion. Attractive further diplomatic housing and data centre development opportunities are currently being considered.

Grit is additionally finalising a funding framework with GREA on development projects whereby Grit will be provided "buy-in" options on approved GREA transactions. The contemplated framework will not create any liability on Grit, but will provide it with the ability to partake in development prefunding transactions, subject to formal Investment committee approval and future funding. Further announcements will be made in due course.

**      GREA is considered a related party by virtue of their large common shareholders, being the Public Investment Corporation of South Africa, who manage pensions on behalf of the Government Employee Pension Fund.

Drive in Trading Guarantee

On 22 January 2018, shareholders approved a related party transaction between the Public Investment Corporation SOC Limited ("PIC") and the Company whereby the Company guarantees PIC for 50.00% of any losses suffered by the PIC (up to a maximum of USD17.5 million) resulting from PIC's potential liability under its Contingent Repurchase Obligation ("CRO"). In 2017, the Company facilitated a transformation initiative jointly with the PIC on behalf of South Africa's Government Employment Pension Fund (GEPF). The transformation initiative was to jointly provide guarantees in order to allow Drive in Trading Proprietary Limited ("DiT") to raise cost effective debt facilities in order to subscribe for shares in the Company. The primary security for DiT's financier was a CRO for an amount of USD35.0 million between the PIC and DiT's financier whereby, in the event of default, the PIC would be obliged to purchase the loan from the financier at cost, up to a maximum amount of USD35.0 million. In terms of the guarantee agreement between the PIC and the Company, in the event the CRO is triggered, the PIC has the right to call for cash collateral up to a maximum of 50% of the loan balance or USD17.5 million (with 4 days notice to the Company) in order to cover 50% of any potential losses which the PIC may suffer after realising the underlying security (subject to a maximum of USD17.5 million).

On 14 August 2020, DiT failed to refinance the facility with Bank of America N.A (UK Branch) ("BoAML") after its initial three year term, which has resulted in BoAML enforcing its rights under the terms of the CRO on 17 August 2020. On 24 August 2020, PIC acquired the Loan from BoAML for USD33.8 million, and effectively stepped into BoAML's role as lender to DiT.

On 19 August 2020, PIC's Investment Committee ("IC") approved a 5-year loan to DiT. A number of aspects of the proposed long term structure are still being negotiated with the PIC, specifically the interest rate applicable to the loan, Grit's interest top-up mechanism and PIC's notice period to call for cash collateral on the guarantee which currently remains at four days' notice. Due to the related party nature of the transaction, shareholder approval is likely to be required.

ESG and sustainability

With Africa rapidly urbanising, we are cognisant of our role in transforming the design of buildings and developments for long-term sustainability. Our sustainability efforts, under the guidance of the Eco Grit team, focus on energy efficiency and carbon reduction and the Group has committed to a five year target of a 25% reduction in carbon emissions and a 25% improvement in our building efficiency. We have made significant progress over the last 12 months and are ahead of plan in the achievement of our targets. We continue to focus on further developing our carbon offset strategy and plan in order to reach our target of net zero carbon by 2040. We are deploying and embedding our Environmental Sustainability Management and Reporting Policy across all our assets in Africa, whilst we continue to develop and implement our strategy to support life on land. 

In addition to environmental responsibility, we pride ourselves on achieving in excess of 40% of women in leadership positions at Grit, and more than 65% localised employees, adding to the Group's diversity. The Company is proud to report that it is already achieving these targets and will therefore aim to maintain and even improve on its current achievements.

Dividend resumption

The Group LTV reduced upon the part disposal of Acacia Estates and reductions in the revolving credit facility outstanding balances. Underlying progress towards the near term target was encouraging, however the retail portfolio valuations and the effect of movements in EUR foreign exchange rates (which although supportive of NAV has a negative impact on reported LTV due to the Group's EUR net open position), limited the  reduction in LTV to 49.3% from 50.2%. LTV is expected to reduce towards the targeted 45% by the end of the year.

The Board remains committed to reducing LTV levels over the medium-term to between 35%-40%, and additionally has a near term focus of reducing its LTV to below 45%. Today, we announce progress toward that goal, reporting a Group LTV of 49.3%. As a result of encouraging early results of these further LTV strategies and recent strong rent collections, the Board has declared a modest resumption of dividends.

The Board will consider recommending an additional declaration prior to financial year-end but this decision will be dependent on the further progress of LTV reduction strategies, the finalisation of the Drive in Trading guarantee restructure and continued strong cash collections, specifically in the hospitality sector.

Outlook

Whilst we are maintaining an appropriately cautious stance in light of potential longer-term effects from COVID-19 on our tenants and the wider economy, we remain confident in our strategy of unlocking superior total returns for our shareholders in the medium to longer term.

With our expertise in African real estate, and our team's experience, knowledge, skill sets and relationships in various regions, we will continue to optimise assets and create value through proactive asset management and risk-mitigated pre-funding models to support NAV growth. In addition, we will continue to selectively pursue potential investments from our high-quality, diversified and yield accretive acquisition pipeline, supported by a strong tenant base and possible co-investment opportunities.

The Company aims to return to paying an attractive income distribution and generating total annual return growth and is well positioned to capitalise on significant recovery potential of the African continent from its unique high-quality portfolio of properties. We are assessing a number of financing options to fund our refocused investment pipeline of high-quality accretive assets leased to multinational corporates and attracting hard currency rental streams.

Bronwyn Knight

Chief Executive Officer

FINANCIAL REVIEW

Gross rental income (including associates and joint ventures) remained relatively flat at USD31.62 million (six months ending December 2019: USD31.65 million), with the retail sector's decline of 19.1% in revenue amounting to USD1.91 million being offset by acquisitions and additions of USD1.93 million. Revenue in retail, office and corporate accommodation sectors were impacted by lower operating costs which are recovered from tenants. The Light industrial sector revenue reduced marginally as a result of the redevelopment of units within the Bollore complex. Property operating expenses (including associates and joint ventures) decreased by USD2.17 million on a like for like basis. These savings have been achieved through tight cost control measures and savings achieved of variable operating costs during the various lockdowns and reduced operating hours on some properties. Consequently, net operating income on a like for like basis increased marginally by USD0.21 million. New acquisitions in the current period and the full period impact of acquisitions in the comparative period increase the total net operating income by USD2.01 million.

 

Six months ended 31 December 2020

Six months ended 31 December 2019

Year on Year movement

 

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

 

 

Subsidiaries

Associates

Total

Subsidiaries

Associates

Total

 

REVENUE (incl lease incentives)  

 

 

 

 

 

Like for Like comparison

 

 

 

 

 

 

 

Retail

6,551

1,571

8,121

7,668

2,366

10,034

-19.1%

Office

7,368

1,228

8,595

7,339

1,329

8,668

-0.8%

Corporate Accommodation

6,450

-

6,450

6,513

 

6,513

-1.0%

Light Industrial

976

-

976

1,036

 

1,036

-5.8%

Hospitality

1,733

3,475

5,208

1,720

3,363

5,083

2.4%

Other

 

126

126

 

106

106

19.3%

 

23,078

6,400

29,478

24,276

7,164

31,440

-6.2%

Acquisitions in periods

 

 

 

 

 

 

 

LLR

-

1,344

1,344

-

210

210

540.0%

Hospitality - Clubmed

799

-

799

-

-

-

100.0%

TOTAL PORTFOLIO

23,877

7,744

31,621

24,276

7,374

31,650

-0.1%

 

PROPERTY OPERATING COSTS 

 

 

 

 

 

Like for Like comparison

 

 

 

 

 

 

 

Retail

(2,693)

(434)

(3,127)

(4,650)

(478)

(5,128)

-39.0%

Office

(454)

(136)

(590)

(599)

(104)

(703)

-16.1%

Corporate Accommodation

(944)

 

(944)

(1,001)

 

(1,001)

-5.7%

Light Industrial

(40)

 

(40)

(32)

 

(32)

23.9%

Hospitality

 

 

-

 

(12)

(12)

-100.0%

Other

(1)

 

(1)

(2)

 

(2)

-56.9%

 

(4,132)

(570)

(4,702)

(6,284)

(594)

(6,878)

-31.6%

Acquisitions in periods

 

 

 

 

 

 

 

LLR

 

(176)

(176)

 

(41)

(41)

329.3%

Hospitality - Clubmed

 

 

-

 

 

-

0.0%

TOTAL PORTFOLIO

(4,132)

(746)

(4,878)

(6,284)

(635)

(6,919)

-29.5%

Operating cost ratio

17.3%

9.6%

15.4%

25.9%

8.6%

21.9%

-6.4%

 

 

Six months ended 31 December 2020

Six months ended 31 December 2019

Year on Year movement

 

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

 

 

Subsidiaries

Associates

Total

Subsidiaries

Associates

Total

 

NET OPERATING INCOME  

 

 

 

 

 

Like for Like comparison

 

 

 

 

 

 

 

Retail

3,857

1,137

4,994

3,018

1,888

4,906

+1.8%

Office

6,914

1,092

8,005

6,739

1,225

7,964

0.5%

Corporate Accommodation

5,507

-

5,507

5,512

-

5,512

-0.1%

Light Industrial

936

-

936

1,004

-

1,004

-6.7%

Hospitality

1,733

3,475

5,208

1,720

3,351

5,071

2.7%

Other

(1)

126

125

(2)

106

104

21.0%

 

18,946

5,830

24,775

17,992

6,570

24,562

0.9%

Acquisitions in periods

 

 

 

 

 

 

 

LLR

-

1,168

1,168

-

169

169

591.2%

Hospitality - Clubmed

799

-

799

-

-

-

100.0%

TOTAL PORTFOLIO

19,745

6,998

26,742

17,992

6,739

24,731

8.1%

 

The Group's cost control measures in the administrative cost resulted in a 33.2% comparable decrease in administration expenses during the period from USD10.0million in 2019 to USD6.7 million. Savings achieved as a result of employee cost savings during the period from voluntary salary reductions and limited travel costs are temporary savings over the COVID-19 period, while the remaining strong cost control measures representing c35% of the cost savings will have enduring benefits. Transactional cost savings of USD1.0 million (or c33% of the cost savings) are a function of the volume of completed transactions and corporate structuring costs which remain variable to the volume of transactions.

Fair value movements in property values of subsidiaries and associates and joint ventures

SECTOR

BALANCE AS AT 30 JUN 2020

Fair value movements *

Foreign Exchange and other movements

TOTAL LIKE FOR LIKE MOVEMENT

Additions

BALANCE AS AT 31 DEC 2020

Like for Like movement

USD'000

USD'000

USD'000

USD'000

USD'000

USD'000

 

Retail

217,760

(14,847)

6,038

(8,810)

330

210,091

-3.7%

Office

199,378

3,769

275

4,044

30

203,449

2.0%

Hospitality

162,290

2,999

14,995

17,994

1,225

181,509

11.1%

Corp Accom

138,194

118

655

773

13

138,980

0.6%

Light Industrial

30,235

1,266

107

1,373

1,431

33,039

4.5%

LLR

23,223

232

588

820

3,302

27,345

3.5%

GREA

5,009

135

-

135

2,335

7,479

2.7%

TOTAL*

776,090

(6,329)

22,658

16,329

8,666

801,893

2.2%

 

*       Total of fair value gains of properties including associates and joint ventures, excluding fair value adjustment from contractual receipts from vendors

 

Retail

The retail sector in general continued to experienced pressure, with the Zambian portfolio and AnfaPlace Mall experiencing downward valuation on increased vacancies, new lease rates and increased discount rates (for Zambia) but offset by movements by the foreign exchange movements.

Office

The Mozambique assets have benefited from secured long term global tenancies. The offices in the other regions, Ghana and Mauritius, had marginal movements impacted by recent lease renewals and contractual lease escalations.

Hospitality

The Mauritian hospitality assets remained broadly flat in local currency terms, however benefitted from the Euro's performance against the USD. The Club Med asset benefitted from capex spend and the removal of an uncertainty clause in the lease agreement.

Distributable earnings and dividends

The financial results for the six months ended 31 December 2020 produced distributable earnings per share of USD3.88 cps (December 2019: USD5.48 cps), and the Board has declared a dividend of USD1.5cps, implying a 38.7% payout ratio.

Net asset value

EPRA NRV per share increased by 6.3%, or USD7.4 cps in the six months to 30 June 2020, from USD117.1 cps to USD124.4 cps).

The movement in net asset value per share for the period is shown below:

NET ASSET VALUE MOVEMENT

IFRS

EPRA NRV

 

USD cps

USD cps

Opening Balance 1 July 2020

97.3

117.1

Like of Like movement in Property Values (including impact of forex revaluations)

 

 

Retail

(4.8)

(4.8)

Office

1.2

1.2

Corporate accommodation

0.0

0.0

Hospitality

1.0

1.0

Light Industrial

0.5

0.5

Distributable Earnings

3.2

3.2

Non-cash items

(0.6)

2.1

Foreign exchange revaluations

2.5

2.5

Sale of Minority Interest in assets

4.5

4.5

Issue of Share

(1.9)

(2.9)

Closing Balance 31 December 2020

102.9

124.4

 

Total investment in income generating assets has increased 3.1% from USD823.5 million in June 2020 to USD849.2 million in December 2020.

COMPOSITION OF INCOME PRODUCING ASSETS

31 Dec 2020

30 Jun 2020

USD'm

USD'm

Investment properties

591.3

577.2

Deposits paid on investment properties

5.1

4.5

Investment property included within 'Investment of associates and joint ventures'

210.5

198.9

 

806.9

780.6

Other investments, PPE, Intangibles and related party loans

42.3

42.9

TOTAL INCOME PRODUCING ASSETS

849.2

823.5

 

*

Includes receivable balances from partners in Zambia relating to the back-to-back loan from Bank of China of USD77 million used to fund the acquisition and loans advanced to Gateway Real Estate Africa.

 

Net debt, cash flow and financing

As financing is integral to our business model, the Group has continued to develop strong relationships with financiers. The multi-bank approach adopted by Grit has continued, with the main banking partners being Bank of China, Standard Bank, ABSA Bank and SBM (Mauritius) Ltd. During the period a new Nedbank facility was secured at a corporate level of USD7 million and also concluded the refinancing of Capital Place in Ghana subsequent to the reporting period. A detailed breakdown of the interest-bearing borrowings is listed in note 9 of the results announcement.

Debt expiry profile

USD '000

%

Yr1 - Up to Dec 2021

4,335

1.1%

Yr2 - Up to Dec 2022

243,327

59.4%

Yr3 - Up to Dec 2023

158,296

38.6%

Yr4 - Up to Dec 2024

1,960

0.5%

Yr5 - Up to Dec 2025

1,960

0.5%

Total

409,877

100.0%

As at 31 December 2020 the group had undrawn liquidity facilities available of USD8.2 million.

The group extended maturity dates for the corporate term loan of USD20 million from SBM and EUR26.5 million RCF facility from SBSA to October 2022 and June 2022 respectively as well as a USD15 million capital repayment to Investec SA to February 2022.

This has contributed to the marginal increase in the debt expiry profile and the decrease of the current portion of the interest-bearing borrowings.

The average 3-month USD LIBOR rates decreased from 1.20% for the 6 months to June 2020 to 0.25% for the 6 months to 31 December 2020. The 0.95% decrease in USD LIBOR rates in the period resulted in the Group's weighted average cost of debt ("WACD") decreasing to an average of 5.77% (December 2019: 5.91%) for the six month period. The Group do not expect any material changes to the WACD up to 30 June 2021.

The Group's LTV ("LTV") has decreased to 49.3% in six months ended 31 December 2020 (30 June 2020: 50.2%). The Group is still targeting the near-term LTV to be below 45% following active liquidity preservation initiatives and asset valuations expected to recover gradually.

The Group has entered into a number of interest rate fixing mechanism to minimise the risk of USD LIBOR rate volatility.

The Group has not entered into any further interest rate fixing mechanism since 30 June 2020. Details of the existing fixed rate contracts are as follows:

Financial institution

Notional Amount

Type

Rate

Effective date

Termination date

Standard Bank of South Africa

USD 20.0 million

Interest rate swap

1.58% fixed rate versus 3m USD LIBOR floating rate

11-Oct-19

16-Oct-23

Standard Bank of South Africa

USD 40.0 million

Interest rate collar

Cap of 1.75%, floor of 1.50% versus 3m USD LIBOR floating rate

24-Oct-19

16-Oct-23

Standard Bank of South Africa

USD 40.0 million

Interest rate collar

Cap of 1.85%, floor of 1.30% versus 3m USD LIBOR floating rate

25-Nov-19

16-Oct-23

Currently 69.9% of debt is fixed in nature.

Going concern

The directors are required to consider an assessment of the Group's ability to continue as a going concern when producing the financial statements. As such they have modelled a 'base case' and a 'severe but plausible downside' of the Group's expected liquidity and covenant position for a going concern period of at least twelve months forward.

The base case reflects management's best expectations of the position going forward. It was modelled on board approved forecasts over the relevant period. For details regarding the assumptions utilised, please refer the 2020 Integrated Annual Report published on 15 December 2020.

The Group's external valuers inserted a COVID-19 material uncertainty clause for the 30 June 2020 independent valuations, which introduced inherent uncertainty to future property valuations. As part of the external valuation process for 31 December 2020, the independent valuers have maintained this clause, in accordance with the RICS Global Standard guidance.

While the base case and severe but plausible models show that the Group have adequate financing facilities and maintains its covenants throughout the going concern period, the inherent uncertainty in future property valuations as a result of the COVID-19 pandemic are such that, in the event that property valuations across the portfolio decrease more severely or quickly than expected in the severe scenario, then it may indicate a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern as referenced in the external auditors' Independent Audit Opinion in the 2020 Integrated Annual Report published on 15 December 2020. The Group financial statements do not include the adjustments that would result if they were unable to continue as a going concern.

Presentation of financial results

The financial statements have been prepared in accordance with IFRS, in accordance with best practice in the sector, alternative performance measures have also been provided to supplement IFRS, based on the recommendations of European Public Real Estate Association ("EPRA"). EPRA's Best Practice Recommendations have been adopted widely throughout this report and are used within the business when considering our operational performance of the properties. Full reconciliations between IFRS and EPRA figures are provided in note 16.

Leon van de Moortele

Chief Financial Officer

PRINCIPAL RISKS AND UNCERTAINTIES

Grit maintain a Key Risk Register which is shared with the Risk Committee on a quarterly basis. The key risks are well managed and monitored regularly as the risks could change with changes in the industry, economy and stakeholders, amongst others.

The principal risks of the business are set out on pages 42 - 44 of the 2020 Integrated Annual Report alongside their potential impact and related mitigations. These risks fall into four categories: compliance; strategic; financial and operational.

The Board has reviewed the principal risks in the context of the second half of the current financial year. The Board believes there has been no material change to the risk categories outlined in the 2020 Integrated Annual Report of the Group and that the existing mitigation actions remain appropriate to manage them.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors confirm that the abridged consolidated half year financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as issued by the International Accounting Standards Board ("IASB") and that the half year management report includes a fair review of the information required by the Disclosure Guidance and Transparency Rules ("DTR") 4.2.7R and DTR 4.2.8R, namely:

   Important events that have occurred during the first six months and their impact on the abridged set of half year financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year;

   Material related party transactions in the first six months and a fair review of any material changes in the related party transactions described in the last Annual Report.

The maintenance and integrity of the Grit website is the responsibility of the directors.

Legislation in Mauritius governing the preparation and dissemination of financial statements may differ from legislations in other jurisdictions. The directors of the Group are listed in its Annual Report for the year ended 30 June 2020. A list of current directors is maintained on the Grit website: www.grit.group.

On behalf of the Board

Bronwyn Knight

Leon van de Moortele

Chief Executive Officer

Chief Financial Officer

 

ABRIDGED INTERIM FINANCIAL STATEMENTS

 

 

Unaudited

Unaudited

 

 

six months

six months

 

 

ended

ended

 

 

31 Dec

2020

31 Dec 2019

Abridged consolidated statement of comprehensive income

Notes

US$'000

US$'000

Gross rental income

10

23,877

24,276

Straight-line rental income accrual

 

(268)

(171)

Revenue

 

23,609

24,105

Property operating expenses

 

(4,132)

(6,284)

Net property income

 

19,477

17,821

Other income

 

91

2,958

Administrative expenses (including corporate structuring costs)

 

(6,698)

(10,030)

Profit from operations

 

12,870

10,749

Fair value adjustment on investment properties

 

(4,327)

486

Contractual receipts from vendors of investment properties

3

98

2,525

Total fair value adjustment on investment properties

 

(4,229)

3,011

Fair value adjustment on other investments

 

-

591

Fair value adjustment on other financial liability

 

353

(552)

Impairment of loans and other receivables

 

825

(904)

Net impairment credit / (charge) on financial assets

 

738

(218)

Fair value adjustment on derivative financial instruments

 

428

136

Share-based payment expense

 

(64)

(90)

Share of profits from associates and joint ventures

4

1,557

12,590

Foreign currency gains

 

1,331

8

Profit before interest and taxation

 

13,809

25,321

Interest income

11

1,293

2,366

Finance costs

12

(12,470)

(12,605)

Profit for the period before taxation

 

2,632

15,082

Taxation

 

(4,909)

(3,381)

(Loss)/Profit for the period after taxation

 

(2,277)

11,701

Gain / (Loss) on translation of functional currency

 

8,649

(1,406)

Retirement benefit obligation

-

-

Total comprehensive income

6,372

10,295

 

(Loss)/Profit attributable to:

Owners of the parent

1,732

13,130

Non-controlling interests

(4,009)

(1,429)

 

(2,277)

11,701

Total comprehensive income / (loss) attributable to:

Owners of the parent

8,751

11,724

Non-controlling interests

(2,379)

(1,429)

 

6,372

10,295

Basic and diluted earnings per share (cents)

0.55

4.26

         

 

 

 

Unaudited as at

Audited as at

Unaudited as at

 

 

31 Dec 2020

30 Jun 2020

31 Dec

2019

Abridged consolidated statement of financial position

Notes

US$'000

US$'000

US$'000

Assets

Non-current assets

Investment properties

3

584,811

572,086

595,965

Deposits paid on investment properties

3

5,050

4,500

8,500

Property, plant and equipment

 

3,044

3,363

2,122

Intangible assets

 

543

568

1,625

Investments in associates and joint ventures

4

168,293

161,301

171,407

Other investments

5

1

1

1

Related party loans receivable

 

2,636

3

12,477

Other loans receivable

6

29,540

39,575

29,290

Trade and other receivables

7

1,966

2,858

-

Deferred tax

 

27,993

24,471

22,901

Total non-current assets

 

823,877

808,726

844,288

Current assets

Trade and other receivables

7

39,242

29,673

39,258

Related party loans receivable

 

171

138

2,693

Other loans receivable

6

11,794

2,846

-

Current tax refundable

 

641

697

769

Derivative financial instruments

 

79

39

127

Cash and cash equivalents

 

10,183

3,578

25,545

Total current assets

 

62,110

36,971

68,392

Total assets

 

885,987

845,697

912,680

 

Equity and liabilities

Total equity attributable to equity holders

Ordinary share capital

 

463,842

454,145

454,147

Treasury shares reserve

 

(18,406)

(18,406)

(18,406)

Preference share capital

8

25,481

-

-

Foreign currency translation reserve

 

3,140

(4,072)

(1,442)

Antecedent dividend reserve

 

-

-

418

Retained loss

 

(118,206)

(133,784)

(42,301)

Equity attributable to owners of the Company

 

355,851

297,883

392,416

Non-Controlling interests

(12,028)

(614)

2,571

Total equity

343,823

297,269

394,987

Liabilities

Non-current liabilities

Redeemable preference shares

 

12,840

12,840

12,840

Proportional shareholder loans

 

16,116

9,615

9,615

Interest-bearing borrowings

9

400,538

337,620

369,069

Obligations under leases

 

905

905

969

Related party loans payable

 

-

3,918

-

Deferred tax

 

65,594

57,419

48,951

Total non-current liabilities

495,993

422,317

441,444

Current liabilities

Interest-bearing borrowings

9

4,335

50,030

15,043

Interest-bearing borrowings - Accrued interest

9

3,613

5,349

-

Obligations under leases

 

179

254

226

Trade and other payables

 

26,129

23,220

33,106

Current tax payable

 

1,926

2,002

556

Derivative financial instruments

 

3,653

4,043

34

Related party loans payable

 

78

27,138

26,088

Other financial liability

 

4,515

4,868

1,196

Bank overdrafts

 

1,743

9,207

-

Total current liabilities

 

46,171

126,111

76,249

Total liabilities

 

542,164

548,428

517,693

Total equity and liabilities

 

885,987

845,697

912,680

             

 

 

Unaudited

Unaudited

 

six months

six months

 

 ended

 ended

 

31 Dec 2020

31 Dec 2019

Abridged consolidated statement of cashflows

Notes

USD'000

USD'000

Cash generated from operations

Profit before taxation for the period

2,632

15,082

Adjusted for:

Depreciation and amortisation

309

261

Interest income

11

(1,293)

 

(2,366)

Share of profits from associates and joint ventures

4

(1,557)

 

(12,590)

Finance costs

12

12,470

 

12,605

IFRS 9 (reversals) / charges

(2,260)

2,462

Foreign currency gains

(1,331)

(8)

Straight-line rental income accrual

268

171

Amortisation of lease premium

1,254

1,696

Share based payment expense

64

90

Fair value adjustment on investment properties

3

4,229

(3,011)

Fair value adjustment on other investments

-

(591)

Fair value adjustment on other financial liability

(353)

552

Fair value adjustment on derivative financial instruments

(428)

(136)

 

14,004

14,217

Changes to working capital

Movement in trade and other receivables

(10,206)

(7,313)

Movement in trade and other payables

2,285

1,422

Cash generated from operations

6,083

8,326

Taxation paid

(365)

(1,701)

Net cash generated from operating activities

5,718

6,625

 

Cash utilised on investing activities

3

(3,423)

(20,978)

Deposits paid on investment properties

(550)

-

Acquisition of property, plant and equipment

(14)

(91)

Acquisition of intangible assets

(62)

(84)

Acquisition of other investments

5

-

(1)

Acquisition of associates and joint ventures

4

(1,998)

-

Dividends and interest received from associates and joint ventures

2,879

4,091

Interest received

 

916

1,911

Proceeds from partial disposal of investment in subsidiaries

 

5,357

-

Proceeds from disposal of property, plant and equipment

 

93

-

Related party loans (paid) / received

 

(32,883)

11,582

Other loans repayment (paid) / received

 

(31)

9,387

Proportional shareholder loans received from associates

 

1,143

1,110

Proceeds from proportional shareholders loans

 

6,501

-

Other loans repaid

1,089

-

Net cash (utilised in) / generated from investing activities

(20,983)

6,927

Cash generated from financing activities

 

 

Proceeds from the issue of ordinary shares

9,811

-

Share issue expenses

(114)

(404)

Dividends paid to non-controlling shareholders

(417)

(581)

Ordinary dividends paid

1

(20,547)

Proceeds from issue of preference shares

25,481

-

Proceeds from interest bearing borrowings

32,517

154,500

Settlement of interest-bearing borrowings

(24,669)

(112,039)

Finance costs and debt initiation fees paid

(13,441)

(15,003)

Payment of leases

(75)

(123)

Net cash generated from financing activities

29,094

5,803

Net movement in cash and cash equivalents

13,829

19,355

Cash at the beginning of the period

(5,629)

6,674

Effect of foreign exchange rates

240

(484)

Total cash and cash equivalents at the end of the period

8,440

25,545

               

 

 

 

 

 

Foreign

 

 

 

 

 

 

 

Preference

currency

Antecedent

 

Non-

 

 

Share

Treasury

 share

translation

dividend

Retained

controlling

Total

 

Capital

Shares

Capital

reserve

reserv

earnings

interest

Equity

Consolidated statement of changes in equity

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

Balance as at 1 July 2019

443,259

(18,406)

-

(36)

-

(34,868)

4,581

394,530

Adoption of IFRS 16

-

-

-

-

-

(154)

-

(154)

Restated balance as at 1 July 2019

443,259

(18,406)

-

(36)

-

(35,022)

4,581

394,376

Loss for the year

-

-

-

-

-

(63,115)

(4,133)

(67,248)

Other comprehensive income /(expense) for the year

-

-

-

(4,036)

-

209

-

(3,827)

Total comprehensive expense

-

-

-

(4,036)

-

(62,906)

(4,133)

(71,075)

Share based payments

-

-

-

-

-

109

-

109

Ordinary dividends paid

-

-

-

-

-

(35,965)

-

(35,965)

Dividends paid to non-controlling shareholders

-

-

-

-

-

-

(1,062)

(1,062)

Ordinary shares issued

11,292

-

-

-

-

-

-

11,292

Share issue expenses

(406)

-

-

-

-

-

-

(406)

Balance as at 30 June 2020 (audited)

454,145

(18,406)

-

(4,072)

-

(133,784)

(614)

297,269

 

 

 

 

 

 

 

 

 

Balance as at 1 July 2019

443,259

(18,406)

-

(36)

-

(34,868)

4,581

394,530

Adoption of IFRS 16

-

-

-

-

-

(53)

-

(53)

Restated balance as at 1 July 2019

443,259

(18,406)

-

(36)

-

(34,921)

4,581

394,477

Profit/(loss) for the period

-

-

-

-

-

13,130

(1,429)

11,701

Other comprehensive expense for the period

-

-

 

(1,406)

-

-

-

(1,406)

Total comprehensive income/(expense)

-

-

 

(1,406)

-

13,130

(1,429)

10,295

Share based payments

-

-

 

-

-

90

-

90

Ordinary dividends paid

-

-

 

-

-

(20,600)

-

(20,600)

Dividends paid to non-controlling shareholders

-

-

 

-

-

-

(581)

(581)

Ordinary shares issued

11,710

-

 

-

-

-

-

11,710

Antecedent dividend reserve

(418)

-

 

-

418

-

-

-

Share issue expenses

(404)

-

 

-

-

-

-

(404)

Balance as at 31 December 2019 (unaudited)

454,147

(18,406)

 

(1,442)

418

(42,301)

2,571

394,987

 

 

 

 

Balance as at 1 July 2020

454,145

(18,406)

-

(4,072)

-

(133,784)

(614)

297,269

Profit/(loss) for the period

-

-

-

-

-

1,732

(4,009)

(2,277)

Other comprehensive income for the period

-

-

-

7,019

-

-

1,630

8,649

Total comprehensive income/(expense)

-

-

-

7,019

-

1,732

(2,379)

6,372

Share based payments

-

-

-

-

-

64

-

64

Dividends paid to non-controlling shareholders

-

-

-

-

-

-

(417)

(417)

Ordinary shares issued

9,811

-

-

-

-

-

-

9,811

Preference shares issued

-

-

25,481

-

-

-

-

25,481

Share issue expenses

(114)

-

-

-

-

-

-

(114)

Transaction with non-controlling interests without change in control

-

-

-

193

-

13,782

(8,618)

5,357

Balance as at 31 December 2020 (unaudited)

463,842

(18,406)

25,481

3,140

-

(118,206)

(12,028)

343,823

NOTES TO THE FINANCIAL STATEMENTS

1. Basis of preparation

This abridged consolidated interim financial information (financial statements) for the six months ended 31 December 2020 has been prepared on a going concern basis and in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and IAS 34 'Interim Financial Reporting' as issued by the IASB, LSE and SEM Listings Requirements; the Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and the Securities Act of Mauritius 2005.

Going concern

The directors are required to consider an assessment of the Group's ability to continue as a going concern when producing the interim financial statements. As such they have modelled a 'base case' and a 'severe but plausible downside' of the Group's expected liquidity and covenant position for a going concern period of at least twelve months forward. The process involved a thorough review of the Group's risk register, an analysis of the trading information both pre and post period end, extensive discussions with the independent property valuers, a review of the operational indicators within the Group and economic data available in the countries of operations. All of this has been done in the context of what has occurred through the COVID-19 pandemic, recent collection statistics, previous experience of African real estate valuations and best estimates of expectations in the future.

The base case reflects management's best expectations of the position going forward. It was modelled on board approved forecasts over the relevant period. For details regarding the detailed assumptions utilized, please refer the 2020 Integrated Annual Report published on 15 December 2020, pages 188 to 189.

The Group's external valuers inserted a COVID-19 material uncertainty clause for the 30 June 2020 independent valuations, which introduced inherent uncertainty to future property valuations. As part of the external valuation process for 31 December 2020, the independent valuers have maintained this clause, in accordance with the RICS Global Standard guidance.

While the base case and severe but plausible models show that the Group have adequate financing facilities and maintains its covenants throughout the going concern period, the inherent uncertainty in future property valuations as a result of the COVID-19 pandemic are such that, in the event that property valuations across the portfolio decrease more severely or quickly than expected, then it may indicate a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern as referenced in the external auditors' Independent Audit Opinion in the 2020 Integrated Annual Report published on 15 December 2020, page 170. The Group financial statements do not include the adjustments that would result if they were unable to continue as a going concern.

The abridged consolidated interim financial information does not comprise statutory accounts. Statutory accounts for the year ended 30 June 2020, presented in accordance with International Financial Reporting Standards ("IFRS"), were approved by the Board of Directors on 14 December 2020 and delivered to the Registrar of Companies in Mauritius. The report of the auditor on those accounts was unqualified. The abridged consolidated interim financial information should be read in conjunction with the Group's annual financial statements for the year ended 30 June 2020. This abridged consolidated interim financial information was approved Board of Directors on 13 February 2021. The abridged consolidated interim financial information has not been reviewed or reported on by the Group's auditors.

Significant Judgements

The preparation of these financial statements requires the Board to make judgements, assumptions and estimates that affect amounts reported in the Statement of Comprehensive Income and Balance Sheet. The directors consider the valuation of investment property to be a critical estimate because of the level of complexity, judgement or estimation involved and its impact on the financial statements. This is consistent with the financial statements for the previous year end. Full disclosure of the critical judgements, assumptions and estimates is included in the 2020 financial statements and there has been no change in the judgements, assumptions and estimates as per the 2020 financial statements with the exception of the accounting treatment for the part disposal of Acacia and AnfaPlace Mall.

The principal areas where such judgements have been made are:

Partial Disposals during the period

On 01 July 2020, the group disposed of an indirect interest of 39.60% in AnfaPlace Mall by disposing of 40% interest in Delta International Bahrain (DIB), the beneficial owner of AnfaPlace Mall ("Anfa"). The total consideration for the transaction amounted to $ 7,571. On 1 November 2020, the group disposed of an indirect interest of 26.66% in Acacia through the disposal of 49% interest in Moz Delta and 25.60% interest in TC Maputo (which together owns 95% of Cognis 1 Limitada, the company in Mozambique that owns the Acacia Estate). The consideration for the share disposal transactions amounted to $ 5,350,128. Prior to the disposal of interests, the carrying amount of existing non-controlling interests which have been disposed was ($8,617,896). The group recognised a decrease in non-controlling interests of $8,617,896 and an increase in equity attributable to owners of the parent of $13,782,273. The effect on the equity attributable to the owners of Grit during the financial period 31 December 2020 is summarised as follows:

 

Total

 

31 Dec 2020

 

US$'000

Carrying amount of non-controlling interests disposed

(8,618)

Consideration received from non-controlling interests

5,358

Increase in equity attributable to owners

13,976

The increase in equity attributable to owners comprised of:

- an increase of USD13.8 million in retained earnings

- an increase in foreign currency translation reserve of USD0.2 million

Judgements in respect of new accounting standards have been considered further below:

2. Changes in accounting policies

The abridged consolidated interim financial information has been prepared on the basis of the accounting policies, significant judgements, key assumptions and estimates as set out in the notes to the Group's annual financial statements for the year ended 30 June 2020, as amended where relevant to reflect the new standards, amendments and interpretations which became effective in the period which are detailed below.

New accounting standards and interpretations

The following amendment to an existing Standard was relevant to the Group and mandatory for the first time for the financial year beginning 1 July 2020:

Standard or Interpretation

Effective from

Amendment to References to the Conceptual Framework in IFRS Standards

01-Jan-2020

Amendment to IFRS 3 'Business Combinations'

01-Jan-2020

Amendments to IAS 1 and IAS 8: Definition of Material

01-Jan-2020

Amendments to IFRS 9, IAS 39, and IFRS 7: Interest Rate Benchmark Reform

01-Jan-2020

Amendment to IFRS 16: COVID-19 Related Rent Concessions

01-Jan-2020

Segmental information

IFRS 8 requires operating segments to be reported in a manner consistent with the internal financial reporting reviewed by the chief operating decision maker. The chief operating decision maker of the Group is the Board. The Board is responsible for reviewing the Group's internal reporting in order to assess performance. The information reviewed by the Board is prepared on a basis consistent with these financial statements. That is, the information is provided at a Group level and includes both the IFRS reported results and EPRA measures. Refer to note 13 for segmental reporting.

 

As at

As at

 

31 Dec 2020

30 Jun 2020

3. Investment properties

US$'000

US$'000

Net carrying value of properties excluding straight-line rental income accrual

584,811

572,086

 

 

 

Movement for the period excluding straight-line rental income accrual

 

 

Investment property at the beginning of the period

565,773

567,731

Acquisitions of investment properties

-

18,848

Transfer to right of use asset

-

(88)

Other capital expenditure and construction

3,348

27,030

Foreign currency translation differences

13,799

(3,225)

Revaluation of properties at end of period

(4,229)

(41,218)

Contractual receipts from vendors of investment properties (reduction in purchase price)

(98)

(3,305)

As at period end

578,593

565,773

Reconciliation to consolidated statement of financial position and valuations

 

 

Investment properties carrying amount per above

578,593

565,773

Straight-line rental income accrual

6,218

6,313

Total valuation of properties

584,811

572,086

Reconciliation to property valuation

 

 

Investment property (disclosed on Balance sheet)

584,811

572,086

Lease incentives (disclosed under Current assets)

6,070

4,680

Right of use of land (disclosed under Property, plant and equipment)

453

456

Furniture and fittings (disclosed under Property, plant and equipment)

-

-

Total valuation of investment properties directly held by the Group

591,334

577,222

Investment property pledged as security

Mozambican investment properties with a market value of USD313.9 million are mortgaged to Standard Bank of South Africa to secure debt facilities amounting to USD140.0 million (June 2020: Mozambican investment properties with a market value of USD308.0 million were mortgaged to Standard Bank of South Africa to secure debt facilities amounting to USD140.0 million).

Moroccan investment properties with a market value of USD93.7 million (June 2020: USD89.4 million) are mortgaged to Investec South Africa to secure debt facilities amounting to USD48.7 million (June 2020: USD45.7 million).

Mauritian investment properties with a market value of USD68.1 million (June 2020: USD63.6 million) are mortgaged to ABSA Bank Mauritius to secure debt facilities amounting to USD7.7 million (June 2020: USD7.1million) and State Bank of Mauritius to secure debt facilities amounting to USD27.3 million (June 2020: USD25.0 million).

Kenyan investment properties with a market value of USD25.0 million (June 2020: USD24.4 million) are mortgaged to Bank of China to secure debt facilities amounting to USD8.6 million (June 2020: USD8.6 million).

Zambian investment properties with a gross market value of USD122.1 million (June 2020: USD163.9 million) are mortgaged to Bank of China to secure debt facilities amounting to USD76.4 million (June 2020: USD76.4 million). This includes the properties of Cosmopolitan Shopping Centre and Kafubu Mall that is disclosed within Investments in associates and joint ventures. The Group's share of these properties is disclosed within note 4 as well as in the table below.

 

 

 

 

 

As at

As at

 

 

Valuer (for the most

 

 

31 Dec 2020

30 Jun 2020

Summary of valuations by reporting date

valuation date

recent valuation)

Sector

Country

US$'000

US$'000

Commodity House Phase I building

31-Dec-20

REC

Office

Mozambique

49,686

48,095

Commodity House Phase II building

31-Dec-20

Directors' valuation

Office

Mozambique

20,451

19,348

Hollard Building

31-Dec-20

Directors' valuation

Office

Mozambique

21,878

21,332

Vodacom Building

31-Dec-20

Directors' valuation

Office

Mozambique

49,437

49,438

Zimpeto Square

31-Dec-20

Directors' valuation

Retail

Mozambique

6,175

5,848

Bollore Warehouse

31-Dec-20

Directors' valuation

Light industrial

Mozambique

8,044

5,795

ABSA House

31-Dec-20

Knight Frank

Office

Mauritius

14,229

13,825

AnfaPlace Mall

31-Dec-20

Knight Frank

Retail

Morocco

93,679

89,363

Tamassa Resort

31-Dec-20

Knight Frank

Hospitality

Mauritius

53,896

49,734

Vale Housing Compound

31-Dec-20

REC

Accom

Mozambique

70,662

70,654

Imperial Distribution Centre

31-Dec-20

Knight Frank

Light industrial

Kenya

21,995

21,370

Mara Viwandani

31-Dec-20

Knight Frank

Light industrial

Kenya

3,000

3,070

Mall de Tete

31-Dec-20

Directors' valuation

Retail

Mozambique

19,251

19,991

Acacia Estate

31-Dec-20

REC

Accom

Mozambique

68,318

67,540

5th Avenue Building

31-Dec-20

Knight Frank

Office

Ghana

18,623

19,210

Mukuba Mall

31-Dec-20

Knight Frank

Retail

Zambia

48,148

55,130

Club Med Cap Skirring Resort

31-Dec-20

Knight Frank

Hospitality

Senegal

23,862

17,479

Total valuation of investment properties directly held by the Group

 

591,334

577,222

Deposits paid on Imperial Distribution Centre Phase 2

 

1,500

1,500

Deposits paid on Capital Place Limited

 

3,550

3,000

Total deposits paid on investment properties

 

5,050

4,500

Total carrying value of investment properties including deposits paid

 

596,384

581,722

 

 

 

 

 

Investment properties held within associates and joint ventures - Group share

 

 

 

Buffalo Mall - Buffalo Mall Naivasha Limited (50%)

31-Dec-20

Knight Frank

Retail

Kenya

5,869

6,395

Kafubu Mall - Kafubu Mall Limited (50%)

31-Dec-20

Knight Frank

Retail

Zambia

10,122

9,658

CADS II Building - CADS Developers Limited (50%)

31-Dec-20

Directors' valuation

Office

Ghana

17,771

16,920

Cosmopolitan Shopping Centre - Cosmopolitan Shopping Centre Limited (50%)

31-Dec-20

Knight Frank

Retail

Zambia

26,848

31,375

Canonniers, Mauricia and Victoria Resorts and Spas - Beachcomber Hospitality (44.42%)

31-Dec-20

Knight Frank

Hospitality

Mauritius

103,739

95,066

Capital Place - Capital Place Limited (50,0%)

31-Dec-20

Directors' valuation

Office

Ghana

11,372

11,210

Letlole La Rona Limited (30%) - 21 Investment properties

31-Dec-20

Directors' valuation

Light industrial

Botswana

19,030

15,536

Letlole La Rona Limited (30%) - 1 Investment property

31-Dec-20

Directors' valuation

Hospitality

Botswana

211

193

Letlole La Rona Limited (30%) - 2 Investment properties

31-Dec-20

Directors' valuation

Retail

Botswana

5,344

4,957

Letlole La Rona Limited (30%) - 1 Investment property

31-Dec-20

Directors' valuation

Office

Botswana

1,429

1,316

Letlole La Rona Limited (30%) - 1 Investment property

31-Dec-20

Directors' valuation

Accommodation

Botswana

1,331

1,221

Gateway Real Estate Africa Ltd (19,98%)

31-Dec-20

Directors' valuation

Other investments

Mauritius

7,479

5,009

Total of investment properties acquired through associates and joint ventures

210,545

198,856

Total portfolio

 

 

806,929

780,578

Functional currency of total investment property portfolio

 

 

United States Dollars

 

 

 

 

477,057

479,160

Euros

 

 

 

 

181,497

162,279

Mauritian Rupees

 

 

 

 

14,229

13,825

Moroccan Dirham

 

 

 

 

93,679

89,363

Botswana Pula

 

 

 

 

27,345

23,223

Kenyan Shilling

 

 

 

 

3,000

3,070

Zambian Kwacha

 

 

 

 

10,122

9,658

Total portfolio

806,929

780,578

 

Valuation policy and methodology for investment properties held by the Group and by associates and joint ventures

For this interim reporting period, investment properties have been valued by reputable RICS accredited valuation experts who have sufficient expertise in the jurisdictions where the properties are located. For the following properties, a directors' valuation was used:

Mall de Tete

Commodity House Phase II building

Hollard Building

Vodacom Building

Zimpeto Square

Bollore Warehouse

Gateway Real Estate Africa Ltd

Letlole La Rona Limited

CADS II Building

Capital Place

 

All valuations that are performed in the functional currency of the relevant property company are converted to United States Dollars at the effective closing rate of exchange. All independent valuations have been undertaken in accordance with the RICS Valuation Standards that were in effect at the relevant valuation date and are further compliant with International Valuation Standards. Market values presented by valuers have also been confirmed by the respective valuers to be fair value in terms of IFRS.

Independent valuations were performed at 31 December 2020 by REC, Chartered Surveyors and Knight Frank, Chartered Surveyors, using the discounted cash flow method for all building valuations and using the comparable method for all land parcel valuations.

 

As at

As at

 

31 Dec

2020

30 Jun 2020

4. Investments in associates and joint ventures

US$'000

US$'000

The following entities have been accounted for as associates and joint ventures in the current and comparative consolidated financial statements using the equity method:

Name of joint venture

Country

% held

 

 

Kafubu Mall Limited

Zambia

50.00%

10,072

9,552

Cosmopolitan Shopping Centre Limited

Zambia

50.00%

26,871

31,495

CADS Developers Limited

Ghana

50.00%

9,948

9,504

Carrying value of joint ventures

46,891

50,551

 

 

 

 

 

Name of associate

Country

% held

 

 

Letlole La Rona Limited

Botswana

30.00%

21,728

19,676

Buffalo Mall Naivasha Limited

Kenya

50.00%

3,935

4,612

Gateway Real Estate Africa Ltd

Mauritius

19.98%

12,968

11,404

Capital Place Limited

Ghana

50.00%

8,544

8,038

Beachcomber Hospitality Investments Limited

Mauritius

44.42%

74,227

67,020

Carrying value of associates

121,402

110,750

 

Joint ventures

 

 

46,891

50,551

Associates

 

 

121,402

110,750

Total carrying value of associates and joint ventures

168,293

161,301

 

 

Letlole La Rona Limited

Kafubu Mall
Limited

Beachcomber Hospitality Investments Limited

Capital Place Limited

Gateway Real Estate Africa Limited

CADS Developers Limited

Cosmopolitan Shopping Centre Limited

Buffalo Mall Naivasha Limited

Total

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

Reconciliation to carrying value in associates and joint ventures

 

 

 

 

 

 

 

 

 

Opening Balance 1 July 2020

19,676

9,552

67,020

8,038

11,404

9,504

31,495

4,612

161,301

Acquired during the period

-

-

-

-

1,998

-

-

-

1,998

Profit / (losses) from associates and joint ventures

 

 

 

 

 

 

 

 

 

Gross rental income

1,344

439

3,491

512

126

715

913

204

7,744

Straight-line rental income accrual

-

-

119

-

-

-

-

-

119

 - Property operating expenses

(176)

(91)

-

(96)

-

(40)

(117)

(226)

(746)

 - Admin expenses and recoveries

(328)

(5)

(14)

(10)

(713)

(3)

30

(4)

(1,047)

 - Fair value adjustment on other investments

-

-

-

-

(15)

-

-

-

(15)

 - Unrealised foreign exchange gains/(losses)

-

(818)

(30)

-

-

4

(81)

(8)

(933)

 - Investment at fair value

-

-

-

-

(1)

-

-

-

(1)

- Interest income

31

2

-

-

-

-

3

-

36

 - Finance charges

(207)

(1)

(587)

(63)

(16)

(226)

-

(117)

(1,217)

 - Fair value movement on investment property

232

1,817

(150)

163

135

851

(4,527)

(526)

(2,005)

 - Current tax

24

(9)

(327)

-

(1)

-

-

-

(313)

 - Deferred tax

-

-

(65)

-

-

-

-

-

(65)

Total profits from associates and joint ventures

920

1,334

2,437

506

(485)

1,301

(3,779)

(677)

1,557

Dividends received and interest received

(614)

-

(1,420)

-

-

-

(845)

-

(2,879)

Profit in Gateway Real Estate Africa

-

-

-

-

38

-

-

-

38

Repayment of proportionate shareholders loan

-

(286)

-

-

-

(857)

-

-

(1,143)

Foreign currency translation differences

1,746

(528)

6,190

-

13

-

-

-

7,421

Carrying value of associates and joint ventures

21,728

10,072

74,227

8,544

12,968

9,948

26,871

3,935

168,293

 

 

As at

As at

 

31 Dec 2020

30 Jun 2020

5. Other investments

US$'000

US$'000

Balance at the beginning of the period

1

3,024

Additions

-

1

Reclassification to Investments in associates and joint ventures

-

(3,615)

Fair value adjustments recognised in profit or loss

-

591

Total

1

1

Level 1 investment comprise listed equity investment valued at market prices. If all significant inputs required to fair value an investment are observable, the investment is included in level 2. If one or more of the significant inputs are not based on observable market data, the investment is included in level 3.

 

As at

As at

 

31 Dec 2020

30 Jun 2020

6. Other loans receivable

US$'000

US$'000

Ndola Investments Limited1

5,073

5,073

Kitwe Copperbelt Limited1

5,577

5,577

Syngenta Limited1

18,690

18,690

Healthcare assets

266

303

Drift (Mauritius) Limited2

10,000

10,000

Drift (Mauritius) Limited3

1,794

2,846

IFRS 9 - Impairment on financial assets (ECL)

(66)

(68)

As at period endAs at 31 December

41,334

42,421

Classification of other loans receivable

 

 

Non-current assets

29,540

39,575

Current assets

11,794

2,846

As at period end

41,334

42,421

 

 

 

 

1

In April 2017 Bank of China provided the Group with a term loan credit facility of $77.0 million for 5 years. This facility has been fully drawn by the Group as at 30 June 2020 (note 9). The Group has advanced loans amounting in total to 50.00% of the $77.0 million facility to the other investors in the Zambian investments referred to in note 4. Each of these loans has a 5 year term, is secured by a suretyship under the terms of the respective loan agreement and has interest charged at a rate of 6 month LIBOR plus 4.00%. The party has provided their share of the property as security to Bank of China.

2

Project pre-funding 1 - Maputo Housing Project

Loan bears interest at 3 month Libor plus 6.50%, repayable within 24 months or such other time as agreed in writing between the parties.

3

Project pre-funding 2 - Tete Housing Project

Loan bears interest at 3 month Libor plus 6.50%, repayable within 24 months or such other time as agreed in writing between the parties.

 

 

 

 

 

As at

As at

 

31 Dec 2020

30 Jun 2020

7. Trade and other receivables

US$'000

US$'000

Trade receivables

17,173

13,785

Total allowance for credit losses and provisions

(6,389)

(6,947)

IFRS 9 - Impairment on financial assets (ECL)

(1,854)

(1,715)

IFRS 9 - Provision for bad debts (Management overlay on specific receivables)

(4,535)

(5,232)

Trade receivables - net

10,784

6,838

Accrued Income

1,006

1,118

Lease incentives

6,070

4,680

Loan interest receivable

3,122

2,721

Deposits paid

63

62

VAT recoverable

7,528

8,658

Purchase price adjustment account

1,178

1,227

Deferred expenses and prepayments

7,659

3,500

IFRS 9 - Impairment on other financial assets (ECL)

(1,117)

(1,117)

Deferred rental

1,186

1,009

Rental guarantees receivable

955

858

Dividends receivable

614

641

Sundry debtors

2,160

2,336

Other receivables

30,424

25,693

As at period end

41,208

32,531

Classification of trade and other receivables

 

 

Non-current assets

1,966

2,858

Current assets

39,242

29,673

As at period end

41,208

32,531

Trade and other receivables - past due:

Trade and other receivables are generally collected within 30 days of invoice, once an investment property has been fully integrated within the Group's portfolio. This represents the Group's normal payment terms. A provision is made for all debtors where legal action has commenced. All other debtors older than 30 days are considered past due but, not impaired. These debts are considered collectable based on a review of historic payment behavior and extensive analysis of the circumstances in respect of each amount. Security deposits are held for a number of the Group's tenants.

Other classes of financial assets included within trade and other receivables do not contain impaired assets.

The carrying value of trade and other receivables are considered by the directors to approximate their fair values.

 

As at

As at

 

31 Dec 2020

30 Jun 2020

8. Preference share capital

US$'000

US$'000

Opening balance

-

-

Proceeds from issue of preference shares

25,481

-

Closing balance

25,481

-

During the period the group issued 25,481,240 class B preference shares through Dif 1 Co. Limited to Gateway Real Estate Africa Limited, an associate to the group. The class B preference shares will earn a coupon at a rate of 8% per annum. The preference share has an off balance sheet accrued dividend of $1,027,627.

 

As at

As at

 

31-Dec-20

30-Jun-20

9. Interest-bearing borrowings

US$'000

US$'000

Non-current liabilities

At amortised cost

400,538

337,620

Current liabilities

At amortised cost

4,335

50,030

Accrued interest

3,613

5,349

 

408,486

392,999

Currency of the interest-bearing borrowings (stated gross of unamortised loan issue costs)

United States Dollars

273,035

271,560

Euros

135,017

119,419

Mauritian Rupees

1,825

1,778

 

409,877

392,757

Interest accrued

3,613

5,349

Unamortised loan issue costs

(5,006)

(5,107)

As at period end

408,484

392,999

Movement for the period

Balance at the beginning of the period

392,999

346,097

Proceeds of interest bearing-borrowings

32,517

170,278

Loan issue costs incurred

(1,225)

(4,639)

Amortisation of loan issue costs

1,326

1,999

Foreign currency translation differences

9,231

(1,165)

Interest accrued

(1,736)

5,349

Debt settled during the period

(24,628)

(124,920)

As at period end

408,484

392,999

 

 

 

Amount undrawn on Revolving Credit Facilities

7,902

-

 

Analysis of facilities and loans in issue

 

 

 

As at

As at

 

 

Initial

31 Dec 2020

30 Jun 2020

Lender

Borrower

Facility

US$'000

US$'000

Financial institutions

 

 

 

 

Standard Bank South Africa

Commotor Limitada

$140.0m

140,000

140,000

Standard Bank South Africa

Grit Services Limited

RCF - EUR26.5m

29,969

29,730

Total Standard Bank Group

 

 

169,969

169,730

Bank of China

Warehously Limited

$8.5m

8,555

8,555

Bank of China

Zambian Property Holdings Limited

$77.0m

76,405

76,405

 

 

84,960

84,960

State Bank of Mauritius

Leisure Property Northern (Mauritius) Limited

9.0m

11,024

10,097

State Bank of Mauritius

Leisure Property Northern (Mauritius) Limited

3.2m

3,920

3,590

State Bank of Mauritius

Mara Delta Properties Mauritius Limited

22.3m

27,315

25,018

State Bank of Mauritius

Grit Real Estate Income Group Limited

Equity Bridge $20.0m

20,000

20,000

State Bank of Mauritius

Grit Real Estate Income Group Limited

RCF Mur 72m

1,825

1,778

Total State Bank of Mauritius

 

 

64,084

60,483

Investec South Africa

Freedom Property Fund SARL

36.0m

39,929

37,027

Investec South Africa

Freedom Property Fund SARL

$15.7m

8,722

8,722

Investec Mauritius

Grit Real Estate Income Group Limited

$ 0.5m

353

378

 

 

49,004

46,127

ABSA Bank Mauritius

BH Property Investment Limited

7.4m

7,731

7,081

ABSA Bank Ghana Limited

Grit Accra Limited

$ 9.0m

9,000

9,000

 

 

16,731

16,081

Maubank Mauritius

Grit Real Estate Income Group Limited

3.2m

3,976

3,642

Maubank Mauritius

Freedom Asset Management

4.0m

3,314

3,234

 

 

7,290

6,876

ABC Banking Corporation

Grit Services Limited

Equity bridge $8.5m

8,500

8,500

ABC Banking Corporation

Casamance Holdings Limited

6.4m

7,839

-

Total ABC Banking Corporation

 

 

16,339

8,500

Nedbank South Africa

Grit Real Estate Income Group Limited

$7m

1,500

-

Total loans in issue

 

 

409,877

392,757

Plus: interest accrued

 

 

3,613

5,349

less: unamortised loan issue costs

 

 

(5,006)

(5,107)

As at period end

408,484

392,999

As financing is integral to our business model, the Group has continued to develop strong relationships with financiers. The multi-bank approach adopted by Grit has continued, with the main banking partners being Standard Bank, Bank of China, State Bank Mauritius and ABSA Bank. During the period a new Nedbank facility was secured at a corporate level of USD7 million and also concluded the refinancing of Capital Place in Ghana subsequent to the reporting period.

The Group raised USD32.5 million of debt in the period to fund development projects and refinance debt facilities.

The average 3-month USD LIBOR rates decreased from 1.20% for the 6 months to June 2020 to 0.25% for the 6 months to 31 December 2020. The 0.95% decrease in USD LIBOR rates in the period resulted in the Group's WACD decreasing to an average of 5.77% (December 2019: 5.91%) for the six month period. The Group do not expect any material changes to the WACD up 30 June 2021.

The Group's loan-to-value ("LTV") has decreased to 49.3% in six months ended December 2020 (30 June 2020: 50.2%).

The group extended maturity dates for the corporate term loan of USD20 million from SBM and EUR26.5 million RCF facility from SBSA to October 2022 and June 2022 respectively as well as a USD15 million capital repayment to Investec SA to February 2022.

This has contributed to the increase in the debt expiry profile and the decrease of the current portion of the interest-bearing borrowings.

The Group has not entered into any further interest rate fixing mechanism since 30 June 2020.

 

Six months

Six months

 

ended

ended

 

31 Dec 2020

31 Dec 2019

10. Revenue

US$'000

US$'000

Contractual rental income

19,264

19,802

Retail parking income

836

809

Other rental income (Lease incentives)

1,074

-

Recoverable property expenses

2,703

3,665

Total revenue

23,877

24,276

None of the revenue recognised in the current reporting period relates to carried forward contract liabilities and to performance obligations that were satisfied in a prior period.

The recoverable property expenses were recognised in the group income statement in accordance with the delivery of services.

 

Six months

Six months

 

ended

ended

 

31 Dec 2020

31 Dec 2019

11. Interest income

US$'000

US$'000

Bank interest receivable

1

12

Interest on loans to partners

698

969

Interest on loans to related parties

469

1,001

Interest on property deposits paid

96

278

Interest on tenant rental arrears and penalty interest

29

106

 

1,293

2,366

 

 

Six months

Six months

 

ended

ended

 

31 Dec 2020

31 Dec 2019

12. Finance costs

US$'000

US$'000

Interest-bearing borrowings - financial institutions

10,527

11,268

Amortisation of loan issue costs

1,326

835

Preference share dividends

410

402

Interest on obligations under leases

41

37

Interest on loans to related parties

33

-

Finance costs expensed related to capital projects

-

53

Interest on bank overdraft

133

10

 

12,470

12,605

13. Segmental reporting

Consolidated segmental analysis

Botswana

 

Senegal

Morocco

Mozambique

Zambia

Kenya

Ghana

Mauritius

Total

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

Geographical location 31 December 2020 - US$'000

 

 

 

 

 

 

 

 

 

 

 

 

Gross rental income

-

799

3,324

13,458

2,185

842

996

2,273

23,877

Straight-line rental income accrual

-

-

(469)

13

-

107

14

67

(268)

Revenue

-

799

2,855

13,471

2,185

949

1,010

2,340

23,609

Property operating expenses

-

-

(2,001)

(1,509)

(370)

(20)

(168)

(64)

(4,132)

Net property income

-

799

854

11,962

1,815

929

842

2,276

19,477

Other income

-

-

-

17

19

-

5

50

91

Administrative expenses (including corporate structuring costs)

-

(40)

(333)

(483)

(22)

(63)

(193)

(5,564)

(6,698)

Profit/(loss) from operations

-

759

521

11,496

1,812

866

654

(3,238)

12,870

Fair value adjustment on investment properties

-

3,553

(4,185)

3,852

(6,982)

442

(573)

(336)

(4,229)

Fair value adjustment on other financial liability

-

-

-

-

-

-

-

353

353

Fair value adjustment on derivatives financial instruments

-

-

-

-

-

-

-

428

428

Share based payment expense

-

-

-

-

-

-

-

(64)

(64)

Share of profits from associates and joint ventures

920

-

-

-

(2,445)

(677)

1,807

1,952

1,557

Impairment of loans and other receivables

-

-

-

-

-

-

-

825

825

ECL Provision

-

6

31

(18)

-

-

3

716

738

Foreign currency (losses) / gains

-

(14)

813

(200)

(17)

(48)

(32)

829

1,331

Profit/(loss) before interest and taxation

920

4,304

(2,820)

15,130

(7,632)

583

1,859

1,465

13,809

Interest income

-

-

-

9

7

-

-

1,277

1,293

Finance costs

-

-

(1,593)

(4,136)

-

(249)

(300)

(6,192)

(12,470)

Profit/(loss) for the period before tax

920

4,304

(4,413)

11,003

(7,625)

334

1,559

(3,450)

2,632

Taxation

-

2

(145)

(4,194)

-

(268)

(59)

(245)

(4,909)

Profit/(loss) for the period

920

4,306

(4,558)

6,809

(7,625)

66

1,500

(3,695)

(2,277)

Reportable segment assets and liabilities

 

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

 

 

Investment properties

-

23,862

89,226

312,530

48,148

24,995

18,403

67,647

584,811

Deposits paid on investment properties

-

-

-

-

-

-

-

5,050

5,050

Property, plant and equipment

-

38

32

277

-

-

26

2,671

3,044

Intangible assets

-

-

16

-

-

-

-

527

543

Other investments

-

-

-

1

-

-

-

-

1

Investment in associates and joint ventures

21,728

-

-

-

36,943

3,935

18,492

87,195

168,293

Related party loans receivable

-

-

-

-

-

-

-

2,636

2,636

Other loans receivable

-

-

-

-

-

-

-

29,540

29,540

Trade and other receivables

-

-

1,966

-

-

-

-

-

1,966

Deferred tax

-

-

8,379

16,493

-

415

827

1,879

27,993

Total non-current assets

21,728

23,900

99,619

329,301

85,091

29,345

37,748

197,145

823,877

Current assets

 

 

 

 

 

 

 

 

 

Trade and other receivables

-

1,304

11,456

6,648

123

2,320

800

16,591

39,242

Current tax refundable

-

-

-

641

-

-

-

-

641

Related party loans receivable

-

-

-

-

-

-

-

171

171

Other loans receivable

-

-

-

-

-

-

-

11,794

11,794

Derivative financial instruments

-

-

-

-

-

-

-

79

79

Cash and cash equivalents

-

1,312

608

1,342

265

49

77

6,530

10,183

Total assets

21,728

26,516

111,683

337,932

85,479

31,714

38,625

232,310

885,987

Liabilities

 

 

 

 

 

 

 

 

 

Total liabilities

-

1,062

79,852

216,753

83,842

10,877

10,434

139,344

542,164

Net assets

21,728

25,454

31,831

121,179

1,637

20,837

28,191

92,966

343,823

 

 

 

 

 

 

 

 

 

 

                     

 

Consolidated segmental analysis

Other investments

Hospitality

Retail

Office

Light industrial

Accommodation

Corporate

Total

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

Type of property 31 December 2020 - US$'000

 

 

 

 

 

 

 

 

Gross rental income

-

2,532

6,565

7,352

976

6,452

-

23,877

Straight-line rental income accrual

-

-

(483)

(41)

107

149

-

(268)

Revenue

-

2,532

6,082

7,311

1,083

6,601

-

23,609

Property operating expenses

-

-

(2,693)

(809)

(41)

(944)

355

(4,132)

Net property income

-

2,532

3,389

6,502

1,042

5,657

355

19,477

Other income

-

-

19

17

-

-

55

91

Administrative expenses (including corporate structuring costs)

-

(185)

(403)

(544)

(94)

(382)

(5,090)

(6,698)

Profit/(loss) from operations

-

2,347

3,005

5,975

948

5,275

(4,680)

12,870

Fair value adjustment on investment properties

-

3,149

(11,612)

2,758

1,260

118

98

(4,229)

Fair value adjustment on other financial liability

-

(33)

-

-

-

-

386

353

Fair value adjustment on derivatives financial liability

-

-

-

-

-

-

428

428

Share based payment expense

-

-

-

-

-

-

(64)

(64)

Share of profits from associates and joint ventures

(485)

2,444

(2,942)

1,855

640

45

-

1,557

Impairment of loans and other receivables

-

-

-

-

-

-

825

825

ECL Provision

-

(11)

24

-

(5)

(3)

733

738

Foreign currency (losses) / gains

-

1,920

866

(331)

(131)

(168)

(825)

1,331

Profit/(loss) before interest and taxation

(485)

9,816

(10,659)

10,257

2,712

5,267

(3,099)

13,809

Interest income

-

(1,193)

(1,049)

1,723

(198)

(2,092)

4,102

1,293

Finance costs

-

(1,415)

(1,662)

(4,310)

(249)

(228)

(4,606)

(12,470)

Profit/(loss) for the period before tax

(485)

7,208

(13,370)

7,670

2,265

2,947

(3,603)

2,632

Taxation

-

(59)

(325)

(2,247)

(533)

(1,575)

(170)

(4,909)

Profit/(loss) for the period

(485)

7,149

(13,695)

5,423

1,732

1,372

(3,773)

(2,277)

Reportable segment assets and liabilities

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

 

Investment properties

-

77,758

162,750

173,111

33,039

138,153

-

584,811

Deposits paid on investment properties

-

-

-

-

-

-

5,050

5,050

Property, plant and equipment

-

38

30

489

-

181

2,306

3,044

Intangible assets

-

-

16

-

-

-

527

543

Other investments

-

-

-

-

-

-

1

1

Investment in associates and joint ventures

12,968

74,395

45,124

19,627

15,121

1,058

-

168,293

Related party loans receivable

-

-

-

-

-

-

2,636

2,636

Other loans receivable

-

-

-

-

-

-

29,540

29,540

Trade and other receivables

-

-

1,966

-

-

-

-

1,966

Deferred tax

-

1,462

11,271

8,230

673

6,357

-

27,993

Total non-current assets

12,968

153,653

221,157

201,457

48,833

145,749

40,060

823,877

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Trade and other receivables

-

3,609

12,137

2,391

2,626

4,276

14,203

39,242

Current tax refundable

-

-

27

461

109

36

8

641

Related party loans receivable

-

-

-

-

-

-

171

171

Derivative financial instruments

-

-

-

-

-

-

11,794

11,794

Other loans receivable

-

-

-

79

-

-

-

79

Cash and cash equivalents

-

1,454

1,096

1,007

90

39

6,497

10,183

Total assets

12,968

158,716

234,417

205,395

51,658

150,100

72,733

885,987

Liabilities

 

 

 

 

 

 

 

 

Total liabilities

-

70,606

170,793

142,621

10,473

80,089

67,582

542,164

Net assets

12,968

88,110

63,624

62,774

41,185

70,011

5,151

343,823

14. Subsequent events

On 22 January 2021, Grit Real Estate Income Group Limited obtained approval by the United Kingdom Financial Conduct Authority (the "FCA") of the transfer of the listing category of all of its ordinary shares of no par value from a standard listing (shares) to a premium listing (commercial company) on the Official List of the FCA in accordance with Rule 5.4A of the Listing Rules issued by the FCA (the "Transfer").

On 5 February 2021, in conjunction with the Premium Listing, the Company also migrated its domicile from Mauritius to Guernsey (the "Migration"). A key driver for the migration, in addition to the Premium Listing, is a key eligibility requirement for inclusion in the FTSE Indices relating to the nationality of a company. Ordinary shares in limited companies registered in Guernsey are eligible for inclusion in the FTSE Indices.

 

Six months

Six months

 

ended

ended

 

31 Dec 2020

31 Dec 2019

15. Company distribution calculation 1

US$'000

US$'000

Adjusted EPRA Earnings

9,706

16,874

Company specific distribution adjustments

 

 - VAT Credits utilised on rentals

1,132

304

 - Interest related to AnfaPlace Mall areas under construction

-

53

 - Listing and set-up costs under Administrative expenses

121

-

 - Depreciation and amortisation

306

259

- Share based payments

64

90

 - Antecedent dividend

-

418

 - Retirement fund & PRGF

55

-

 - LLR initial day one gain

-

(2,066)

 - Amortisation of capital funded debt structure fees

425

-

 - Operating costs related to AnfaPlace Mall refurbishment costs

-

271

Total company specific distribution adjustments

2,103

(671)

TOTAL DISTRIBUTABLE EARNINGS (BEFORE PROFITS RELEASED)

11,809

16,203

DISTRIBUTABLE INCOME PER SHARE (DILUTED) (cents per share)

3.88

5.48

 - Profits withheld

(7,241)

(678)

TOTAL DISTRIBUTABLE EARNINGS TO GRIT SHAREHOLDERS

4,568

15525

DIVIDEND PER SHARE (cents)

1.50

5.25

Reconciliation to amount payable

 

 

Total distributable earnings to Grit shareholders before profits withheld (cents)

3.88

5.48

Profits released / (withheld) - cents

(2.38)

(0.23)

INTERIM DIVIDEND PROPOSED (cents)

1.50

5.25

 

Shares '000

Shares '000

Weighted average shares in issue

317,051

308,268

Less: Weighted average treasury shares for the period

(12,546)

(12,546)

Add: Weighted average shares vested in Long term incentive scheme

2,432

1,859

EPRA SHARES

306,937

297,581

Less: Non-entitled shares

-

-

Less: Vested shares in consolidated entities

(2,432)

(1,859)

DISTRIBUTION SHARES

304,505

295,722

 

 

 

Distribution declared:

 

Interim

 

 

 

1      The distribution calculation is disclosed to provide clarity regarding the interim dividend distribution of USD1.50 cents per share and to reconcile 'Distributable earnings' to 'Basic Earnings attributable to the owner of the parent'

16. EPRA financial metrics

Non-IFRS Measures

Basis of preparation

The directors of GRIT Real Estate Income Group Limited ("GRIT") ("Directors") have chosen to disclose additional non-IFRS measures, these include EPRA earnings, adjusted net asset value, EPRA net asset value, adjusted profit before tax and funds from operations (collectively "Non-IFRS Financial Information").

The Directors have chosen to disclose:

     EPRA earnings in order to assist in comparisons with similar businesses in the real estate sector. EPRA earnings is a definition of earnings as set out by the European Public Real Estate Association. EPRA earnings represents earnings after adjusting for fair value adjustments on investment properties, gain from bargain purchase on associates, fair value adjustments included under income from associates and joint ventures, ECL provisions, fair value adjustments  on other investments, fair value adjustments on other financial assets, fair value adjustments on derivative financial instruments, and non-controlling interest included in basic earnings (collectively the "EPRA earnings adjustments") and deferred tax in respect of these EPRA earnings adjustments. The reconciliation between basic and diluted earnings and EPRA earnings is detailed in the table below;

     EPRA has released an update to the EPRA Net Asset Valuation (NAV) metrics. These changes will allow the metrics to remain aligned with both International Financial Reporting Standards (IFRS) developments and the evolution of property companies' businesses.

        There are now three new features of the NAV metrics, namely EPRA Net Reinstatement Value (NRV), EPRA Net Tangible Assets (NTA) and EPRA Net Disposal Value (NDV), replacing the EPRA NAV and EPRA NNNAV. These changes are effective for accounting periods starting on January 1st, 2020.

     adjusted EPRA earnings in order to provide an alternative indication of GRIT and its subsidiaries' (the "Group") underlying business performance. Accordingly, it excludes the effect of non-cash items such as unrealised foreign exchange gains or losses, straight-line leasing adjustments, amortisation of right of use land, impairment of loans and deferred tax relating to the aforementioned adjustments. The reconciliation for adjusted EPRA earnings is detailed in the table below; and

     total distributable earnings in order to assist in comparisons with similar businesses and to facilitate the Group's dividend policy which is derived from total distributable earnings. Accordingly, it excludes VAT credit utilised on rentals, interest related to AnfaPlace Mall's areas under construction, Listing and set-up costs, depreciation and amortisation, share based payments, antecedent dividends, operating costs relating to AnfaPlace Mall's  refurbishment costs, rental concessions for capital projects/ amortisation of lease premiums and profits withheld/released. The reconciliation for total distributable earnings is detailed in the table below.

In this note, Grit presents European Real Estate Association (EPRA) earnings and other metrics which is non-IFRS financial information and considered pro forma financial information. 

The pro forma financial information has been compiled for illustrative purposes only and is the responsibility of the Directors. Due to the nature of this information, it may not fairly present the Grit's financial position, changes in equity and results of operations or cash flows going forward.

16a. EPRA earnings

 

 

 

Six months

Six months

 

Ended

Ended

 

31 Dec 2020

31 Dec 2019

EPRA earnings

US$'000

US$'000

Basic (losses) / Earnings per above

(2,277)

11,701

Add Back:

 

 

 - Fair value adjustment on investment properties

4,327

(486)

 - Fair value adjustments included under income from associates

2,005

(2,535)

 - ECL Provision

(738)

218

 - Fair value adjustment on other investments

15

(591)

 - Fair value adjustment on other financial asset

(353)

552

 - Fair value adjustment on derivative financial instruments

(428)

(136)

 - Deferred tax in relation to the above

5,932

1,041

 - Acquisition costs not capitalised

130

1,131

 - Non-controlling interest included in basic earnings

885

1,427

EPRA EARNINGS

9,498

12,322

EPRA EARNINGS PER SHARE (DILUTED)(cent per share)

3.09

4.14

Company specific adjustments

 

 

 - Unrealised foreign exchange gains or losses (non-cash)

(399)

403

 - Straight-line leasing and amortisation of lease premiums (non-cash rental)

1,428

1,867

 - Provision for future Covid concessions

1,295

-

 - Amortisation of Right of use of land (non-cash)

12

-

 - Impairment of loan

(825)

904

 - Deferred tax in relation to the above

(1,303)

1,378

Total Company Specific adjustments

208

4,552

ADJUSTED EPRA EARNINGS

9,706

16,874

ADJUSTED EPRA EARNINGS PER SHARE (DILUTED) (cents per share)

3.16

5.67

 

 

 

 

Shares '000

Shares '000

Weighted average shares in issue

317,051

308,224

Less: Weighted average treasury shares for the period

(12,546)

(12,546)

Add: Weighted average share awards and vested shares in Long term incentive scheme

2,432

1,859

Weighted average shares in issue

306,937

297,537

 

 

EPRA NRV

EPRA NTA

EPRA NDV

 

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

 

As at

As at

As at

As at

As at

As at

 

31 Dec 2020

30 Jun 2020

31 Dec 2020

30 Jun 2020

31 Dec 2020

30 Jun 2020

16b. EPRA NAV

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

IFRS Equity attributable to shareholders

330,370

296,948

330,370

296,948

330,370

296,948

i) Hybrid instruments

 

 

 

 

 

 

Preference shares

-

-

-

-

-

-

Diluted NAV

330,370

296,948

330,370

296,948

330,370

296,948

Add

 

 

 

 

 

 

Revaluation of IP (if IAS 40 cost option is used)

-

-

-

-

-

-

Revaluation of IPUC (if IAS 40 cost option is used)

-

-

-

-

-

-

Revaluation of other non-current investments

-

-

-

-

-

-

Revaluation of tenant leases held as finance leases

-

-

-

-

-

-

Revaluation of trading properties

-

-

-

-

-

-

Diluted NAV at Fair Value

330,370

296,948

330,370

296,948

330,370

296,948

Exclude

 

 

 

 

 

 

Deferred tax in relation to fair value gains of IP

65,594

57,418

56,824

48,984

-

-

Fair value of financial instruments

3,575

4,004

3,575

4,004

-

-

Goodwill as a result of deferred tax

-

-

-

-

-

-

Goodwill as per the IFRS balance sheet

-

-

-

-

-

-

Intangibles as per the IFRS balance sheet

-

-

(1,804)

(1,929)

-

-

Include

 

 

 

 

 

 

Fair value of fixed interest rate debt

-

-

-

-

-

-

Revaluation of intangibles to fair value

-

-

-

-

-

-

Real estate transfer tax

-

-

-

-

-

-

NAV

 399,539

358,370

388,965

348,007

330,370

296,948

Fully diluted number of shares

321,122

306,112

321,122

306,112

321,122

306,112

NAV cents per share

124.4

117.1

121.1

113.7

102.9

97.0

 

 

 

 

 

 

 

 

Shares '000

Shares '000

Shares '000

Shares '000

Shares '000

Shares '000

Total shares in issue

331,236

316,236

331,236

316,236

331,236

316,236

 Less: Treasury shares for the period

(12,546)

(12,546)

(12,546)

(12,546)

(12,546)

(12,546)

 Add: Share awards and shares vested shares in Long term incentive scheme

2,432

2,432

2,432

2,432

2,432

2,432

EPRA Shares

321,122

306,112

321,122

306,112

321,122

306,112

 

 

Six months

Six months

 

ended

Ended

17. Earnings per share

 

31 Dec 2020

31 Dec 2019

Earnings attributable - basic - US$'000

 

1,732

13,130

Earnings attributable - diluted - US$'000

 

1,732

13,130

Weighted average number of shares - basic - '000

 

317,051

308,268

Weighted average number of shares - diluted - '000

 

317,051

308,268

Cents per share - basic

 

0.55

4.26

Cents per share - diluted

 

0.55

4.26

OTHER NOTES

The abridged unaudited consolidated financial statements for the six months period ended 31 December 2020 ("abridged unaudited consolidated financial statements") have been prepared in accordance with the measurement and recognition requirements of International Financial Reporting Standards ("IFRS"), the FCA Listing Rules, the SEM Listing Rules and the requirements of the Mauritian Companies Act 2001. The accounting policies are consistent with those of the previous annual financial statements with the exception of the change in accounting policy and the significant judgement disclosed in note 2 and 1 respectively.

The Group is required to publish financial results for the six months ended on 31 December 2020 in terms of SEM Listing Rule 15.36A and the FCA Listing Rules. The Directors are not aware of any matters or circumstances arising subsequent to the period ended 31 December 2020 that require any additional disclosure or adjustment to the financial statements. These abridged unaudited consolidated financial statements were approved by the Board on 13 February 2021.

Copies of the abridged unaudited consolidated financial statements, and the statement of direct and indirect interests of each officer of the Company pursuant to rule 8(2)(m) of the Mauritian Securities (Disclosure Obligations of Reporting Issuers) Rules 2007, are available free of charge, upon request at the Company's registered address. Contact Person: Mrs. Smitha Algoo-Bissonauth.

Top five shareholders for Grit as at 31 December 2020 are as follows:

Anchor shareholders (>5%)

%

Government Employees Pension Fund (PIC)

25.54%

M&G Investment Management Ltd UK

10.64%

Drive In Trading Proprietary Limited

7.02%

Management & Staff

4.74%

Delta Property Fund

4.58%

The Grit shareholders base is made up of LSE investors holding 34.8% and SEM investors holding 65.2%.

Forward-looking statements

This document may contain certain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements.

Any forward-looking statements made by, or on behalf of, Grit speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Grit does not undertake to update forward-looking statements to reflect any changes in its expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

Information contained in this document relating to Grit or its share price, or the yield on its shares, should not be relied upon as an indicator of future performance.

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.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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