Wrap Text
Summarised provisional consolidated financial results for the year ended 30 June 2018
Attacq Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/000543/06)
(JSE share code: ATT ISIN: ZAE000177218)
(Approved as a REIT by the JSE)
(Attacq or company or group)
SUMMARISED PROVISIONAL CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2018
Commentary
Highlights
- Converted to a Real Estate Investment Trust (REIT)
- Maiden distribution of 74.0 cents per share
- Primary gross lettable area (PGLA) increased by 14.1% to 802 256m(2)
- Interest cover ratio improved by 42.9% to 1.6 times
- Average trading density growth of 5.3% to R2 805/m(2)
- B-BBEE level 2 rating under the revised property sector codes
Introduction
Attacq's vision is to be a premier South African-based REIT, delivering sustainable income and capital growth through a focused
approach in investment in Waterfall City, Waterfall Logistics Hub and retail and mixed-use precincts, both in South Africa
and globally.
Attacq's business model is based on four key value drivers, namely the South African portfolio, the Waterfall development,
and investments in MAS Real Estate Inc. (MAS) and the Rest of Africa retail.
Attacq is listed on the Johannesburg Stock Exchange (JSE) and is included in the FTSE/JSE SAPY Index, FTSE/JSE All Property
Index as well as the FTSE/JSE Responsible Investment Index.
Attacq successfully converted to a REIT on 29 May 2018.
General overview
Attacq's board of directors (the board) has declared a distribution for the year ended 30 June 2018 of 74.0 cents per share.
This maiden distribution is in line with market guidance for the year under review, given in the June 2017 and December 2017
financial results announcements.
Distributable earnings increased by 280.7% to R527.4 million (2017: R138.5 million) mainly due to completed developments
generating additional rental income and lower finance charges as a result of a reduction in net debt. Net asset value per share
(NAVPS) increased by 22.2% from R19.84 to R24.24, largely due to the de-recognition of the majority of the deferred tax liability
on REIT conversion. NAVPS growth on a like-for-like basis, excluding the impact of the deferred taxation de-recognition, would have
been 8.6% had Attacq converted to a REIT by June 2017.
A breakdown of distributable earnings per value driver is tabled below:
2018 2017*
Cents Cents
Key value driver R000 per share R000 per share
South African portfolio 321 395 45.7 128 306 18.3
Waterfall development (10 149) (1.4) (17 464) (2.5)
Investment in MAS 151 060 21.5 105 303 15.0
Rest of Africa retail investments 42 425 6.0 6 591 0.9
Other assets 22 653 3.2 (84 190) (12.0)
Total 527 384 75.0 138 546 19.7
* Unaudited comparatives
The R42.4 million (2017: R6.6 million) distributable earnings generated through the Rest of Africa retail investments represents net
cash interest received in respect of the underlying investments.
Attacq's gross assets have increased during the year by 6.4% to R29.1 billion.
2018 2017
Key value driver R000 R000
South African portfolio 21 084 750 18 060 726
Waterfall development 2 258 698 3 840 759
Investment in MAS 3 145 828 2 729 308
Rest of Africa retail investments 1 092 477 1 246 835
Other assets 1 496 946 1 444 563
Total 29 078 699 27 322 191
South African portfolio
Overview
Attacq has a high-quality operational portfolio of retail, office and mixed-use, light industrial and hotel properties with a weighted
average lease expiry profile of 6.8 years (2017: 6.4 years). The value of the existing South African portfolio increased to R21.1 billion
(2017: R18.1 billion), comprising 72.5% (2017: 66.1%) of total gross assets. The average growth in trading densities for the year ended
30 June 2018 was 5.3%. Based on PGLA, 63.8% of our office and mixed-use portfolio is green certified and includes PwC Tower's
silver Leadership in Energy and Environmental Design certification which is currently being finalised.
During the year, five buildings and one extension were completed in Waterfall, bringing the total South African portfolio PGLA to
802 256m(2). Attacq's attributable share of the total newly completed 118 628m(2) PGLA is 103 541m(2):
External
Practical PGLA Occupancy valuation
Property completion date m(2) % R000
Waterfall City
PwC Tower~ October 2017 48 613 100 1 750 351
Gateway West October 2017 13 803 >79 370 809
Waterfall Corporate Campus - phase I+ December 2017 5 868 100 169 700
Waterfall Logistics Hub
BMW Group South Africa Regional Distribution Centre December 2017 31 987 100 289 401
Dis-Chem warehouse October 2017 8 518 100 83 329
Massbuild extension December 2017 9 839 100 78 806
Total 118 628 >97 2 742 396
~ Attacq has a 75.0% ownership
+ Attacq has a 50.0% ownership
Rental income
Rental income increased by 9.4% to R2.0 billion (2017: R1.9 billion), mainly due to newly completed buildings. The five new buildings
and the Massbuild extension contributed R69.8 million to rental income, adding R58.4 million to net operating income.
Property expenses
Property expenses decreased by 2.4% or R17.6 million to R724.7 million, mainly due to non-recurring expenses relating to the Mall
of Africa which were incurred in 2017. Municipal charges increased by 5.8% to R448.6 million (2017: R423.9 million) and are included
in property expenses. The municipal charge recovery ratio increased to 92.8% (2017: 90.0%) as the Mall of Africa photovoltaic plant
came into operation during the year.
The cost-to-income ratio calculated below is based on best practice recommendations issued by the SA REIT Association. In order
to allow for comparability with other listed funds, the ratio has been adjusted for the land lease rental obligation on the Waterfall
properties.
2018 2017
% %
Property gross cost-to-income ratio 32.8 38.3
Property net cost-to-income ratio 15.5 22.4
Vacancies
Overall portfolio vacancies, measured in terms of PGLA, increased by 41 669m2 when compared with 30 June 2017, mainly as a
result of PwC moving into their new head offices at Waterfall City, vacating 2 Eglin Road. Subsequent to 30 June 2018, 21 791m(2)
of total vacant space was let, reducing the overall vacancy rate to 5.1%. Vacancies that were filled post 30 June 2018 relate mainly
to a portion of 2 Eglin Road, Dis-Chem warehouse and Gateway West. Vacancies not yet filled refers to 2 Eglin Road, Brooklyn Bridge
Office Park and the Newtown Junction precinct.
2018 2017
Sector vacancy % PGLA m(2) % PGLA m(2)
Retail 2.8 9 170 2.4 7 869
Office and mixed-use 15.3 44 944 5.0 13 094
Light industrial 5.3 8 518 - -
Hotel - - - -
Portfolio vacancy 7.8 62 632 3.0 20 963
Less: Vacancies filled post year end (2.7) (21 791) (0.6) (4 431)
Portfolio vacancy 5.1 40 841 2.4 16 532
Waterfall 4 573 3 870
Balance of portfolio 36 268 12 662
Valuations
The capitalisation and discount rates for the 2018 valuations remained largely unchanged when compared with the previous year.
Fair value adjustments on buildings in the South African portfolio were negatively impacted by impairments on 2 Eglin, Newtown
precinct and Brooklyn Mall. The negative fair value adjustment on Newtown precinct is due to lower rental projections whilst
Brooklyn Mall's valuation decreased due to rental income being negatively impacted by increased competition in the area.
Property valuations as at 30 June 2018 are based on external valuations performed by Sterling Valuation Specialists CC,
Eris Property Group Proprietary Limited and Wolffs Valuations Services Proprietary Limited in association with Mills Fitchet.
Waterfall development
Overview
Waterfall's location and ease of access creates an attractive value proposition for the continued development of a new city and
logistics hub in the centre of Gauteng. Waterfall has 957 008m(2) (2017: 1.0 million m(2)) of remaining developable bulk.
The total Waterfall development value, including the value of the Attacq Sanlam Properties joint venture, reduced to R2.3 billion
from R3.8 billion in the prior year. The reduction is due to the completion of five buildings, and the disposal of development rights
to joint venture partners.
2018 2017
Waterfall development R000 R000
Development rights 901 428 1 081 968
Infrastructure and services 685 875 737 187
Developments under construction 527 592 1 880 605
Attacq Sanlam Properties joint venture 143 803 140 999
Total 2 258 698 3 840 759
Whilst these assets are currently not contributing to distributable earnings, they create the platform for future economic benefits
through the utilisation of developable bulk in the development of new properties.
Development rights
Development rights relate to the notarially secured leasehold rights held by Attacq Waterfall Investment Company Proprietary
Limited (AWIC), a 100.0% subsidiary of Attacq.
As at 30 June 2018, AWIC had 957 008m(2) of remaining developable bulk. The heart of the development portfolio is 778 023m(2)
of remaining developable bulk in Waterfall City, zoned for retail, office, hotel and residential developments. The Logistics Hub,
well positioned for light industrial tenants, comprises 178 985m2 of remaining developable bulk. In addition, AWIC has access to
a further 686 054m(2) of developable bulk in the joint venture with Sanlam Properties, a division of Sanlam Life Insurance Limited
(Sanlam Properties).
The external valuation, performed by Sterling Valuation Specialists CC, in respect of the valuation of the Waterfall development
rights is carried out using a residual land valuation model on a freehold, fully serviced basis. The independent valuation is then
adjusted downward to take into account, inter alia, the costs required to complete the servicing of the development rights as well
as the obligations pursuant to the leasehold nature of the development rights. Development rights were fair valued downwards by
R48.9 million due to various adjustments made to the assumptions in the valuation.
Infrastructure and services
The reduction in the value of infrastructure and services, held at cost, compared to prior year is attributable to the allocation of
related costs to developments under construction.
Developments under construction
The following developments were under construction as at 30 June 2018. Attacq's attributable share of the total of 99 991m(2)
PGLA is 65 479m(2).
Land Anticipated PGLA
Property parcel completion date m(2)* Pre-let %
Waterfall City
Deloitte head office+ 10 Q3 FY20 42 500 100.0
Waterfall Corporate Campus - building 2+ 10B Q3 FY19 6 430 -
Waterfall Corporate Campus - Accenture+ 10B Q2 FY19 3 863 100.0
Waterfall Point^ 15 Q3 FY19 9 356 25.0 pre-sold
The Ingress - phase I 10 Q2 FY20 8 731 50.1
Waterfall Logistics Hub
Cummins South Africa's regional office+ 9 Q2 FY19 16 232 100.0
Pirtek^^ 8 Q3 FY19 2 926 Pre-sold
Superga/Kappa warehouse 8 Q4 FY19 4 657 100.0
Midi warehouse 8 Q3 FY19 5 296 -
Total 99 991 >75.0
* Estimated PGLA for 100.0% of development. Subject to change upon final re-measurement post completion
+ Attacq has a 50.0% ownership
^ Two of the four buildings are classified as inventory, one building has been sold and one building is held as investment property
^^ Classified as inventory
The valuations as at 30 June 2018 are based on external valuations performed by Sterling Valuation Specialists CC and Wolffs
Valuations Services Proprietary Limited in association with Mills Fitchet.
The Deloitte head office development is a 50/50 joint venture between Attacq and Atterbury Property Holdings Proprietary
Limited and its subsidiaries (Atterbury Group). Upon completion in Q3 FY20, Waterfall City and surrounds including the Mall of
Africa are expected to further benefit from the anticipated foot traffic of approximately 3 500 Deloitte staff members who will
occupy the completed Deloitte head office.
Attacq classified 50.0% of the development rights as well as infrastructure and service costs relating to Cummins South Africa's
regional office as held for sale due to the 50/50 joint venture arrangement between Attacq and Zenprop Property Holdings
Proprietary Limited (Zenprop). The 30 June 2018 value of R63.4 million will be converted to cash on transfer of the development
rights to Zenprop, as co-owner.
Attacq commenced with the development of a 2 926m(2) warehouse for Pirtek Southern Africa Proprietary Limited (Pirtek) at an
estimated cost of R28.0 million. In order to take advantage of economies of scale, two speculative midi warehouses of 4 657m(2)
and 5 296m(2) are being developed at the same time, at an estimated cost of R41.0 million and R46.0 million respectively. One of
the midi warehouses has successfully been let to Superga/Kappa. Attacq has had previous success with speculative warehouses
as evidenced by both the Dimension Data and Dis-Chem occupancy.
Development pipeline
The Atria - land parcel 10
Attacq and Barrow Properties Proprietary Limited (Barrow Properties) have established a 50/50 joint venture to develop the Atria,
a mixed-use precinct adjacent to the Mall of Africa which comprises four office buildings and a hotel. The initial precinct's design
has been revised, resulting in the removal of the residential component and increasing the hospitality and office components. The
total PGLA is estimated at 32 000m(2) at an estimated total development cost of R840.0 million. The construction of the super-
basement has commenced. Construction of the top structure will be in a phased approach subject to leasing. Transfer to Barrow
Properties is pending and R46.7 million is classified as held for sale.
Waterfall Corporate Campus - land parcel 10B
Waterfall Corporate Campus is a 50/50 joint venture with Zenprop, with an approximate total development cost of R870.0 million.
The development on completion, will comprise six multi-tenanted office buildings with an estimated total PGLA of 30 000m(2).
Phase I, building 1 (5 868m(2) of PGLA) was completed in December 2017 and is fully tenanted. The construction of phase II, which
consists of two buildings and the communal area, will be completed during the second and third quarter of the 2019 financial year.
One of the two buildings will be fully tenanted by Accenture SA Proprietary Limited (Accenture).
The Ingress - land parcel 10
Attacq commenced with phase I of a five building office development known as The Ingress. The development is located adjacent
to the Novartis building and across the road from Gateway West on land parcel 10. Phase I comprises of two buildings, with building
one being fully tenanted. The total PGLA of phase I will be approximately 8 700m(2) and the remainder will be approximately
11 700m(2) (20 400m(2) in total). Total development cost is estimated at R570.0 million.
Ellipse - land parcel 10
Attacq intends to roll out residential developments to create a "live, work, play" urban environment in Waterfall City. The proposed
inaugural residential development will comprise four towers of approximately 550 residential units on land parcel 10, west of the
Mall of Africa. The development will be undertaken on a 50/50 joint venture basis in a phased approach. Phase I will consist of two
towers of approximately 250 units. The estimated development cost of R450.0 million for phase I includes infrastructure that will
benefit phase II. The commencement of the development is subject to achieving a certain level of pre-sales.
BMW X Lifestyle Park - land parcel 10
Attacq is developing a BMW X Lifestyle Park in Waterfall City for BMW Group South Africa. The park is located on the southern
side of the Mall of Africa and comprises a multi-functional event space to be used for promotional events and an off-road track
designed to showcase the abilities of BMW's X models. The initiative will create an additional attraction in the city.
Zimmer Biomet - land parcel 8
Attacq, in a 50/50 joint venture with Sanlam Properties, commenced post year-end with the development of a warehouse with
adjoining offices, measuring 4 000m(2) of PGLA, for Zimmer Biomet. The total capital cost for the project is R55.3 million with an
estimated date of completion of June 2019. Attacq classified 50.0% of the value of the development rights as well as infrastructure
and service costs relating to Zimmer Biomet as held for sale as transfer is pending to Sanlam Properties.
Investment in MAS
Overview
Attacq's shareholding in MAS reduced to 22.8% (2017: 30.6%). This was as a result of two large capital raisings undertaken by
MAS in which Attacq did not participate due to the company preferring to deploy surplus cash into its Waterfall development and
reducing interest-bearing debt at a group level. The market value of Attacq's investment, using the 30 June 2018 MAS share price
of R21.00 (2017: R23.50) equates to R3.1 billion (2017: R3.5 billion). During the year, Attacq received cash dividends of R151.0 million
(2017: R105.3 million), which represents a 4.9% income return based on the 30 June 2018 market value.
Attacq's equity accounted investment at 30 June 2018 is R3.1 billion (2017: R2.7 billion). The net increase is due to MAS' NAVPS
increasing by 7.6% from 124.5 euro cents per share to 134.0 euro cents per share plus a 7.1% weakening of the rand against the euro,
offset by a total of 6.77 euro cents per share in dividends being paid by MAS during the financial year.
MAS' income producing portfolio achieved a 34.8% increase in net rental income to EUR32.3 million and generated net operating
income of EUR38.3 million to June 2018, representing year-on-year growth of 89.6%. Investment property, including assets held
for sale, increased by 10.9% to EUR632.8 million from EUR570.6 million with a further EUR120.0 million of assets acquired post
year-end.
MAS has revised its prior distribution growth guidance for 2019 of 30.0% to 15.0%. The prior distribution target was premised on the
active deployment of capital raising proceeds into income-accretive acquisitions and developments. The markets MAS operates in
have become progressively more competitive resulting in a slower than anticipated drawdown of available funds.
MAS' secured Prime Kapital development pipeline in Central and Eastern Europe (CEE) totals EUR755.0 million and includes
the planned redevelopment of Era Shopping Mall in Iasi, Romania into the 100 000m(2) Mall of Moldova, the development of two
regionally dominant malls totalling 81 000m(2), a number of value centre developments, two residential developments in permitting
phase and Tera Iasi, a large scale mixed-use development planned to include up to 100 000m(2) of A grade offices, approximately
2 500 residential units and a hotel.
MAS has a well-funded balance sheet, a strong development and acquisition pipeline and access to an experienced development
partner with an exemplary track record in CEE.
Rest of Africa retail investments
Overview
As at 30 June 2018, Attacq's Rest of Africa investments are held via its:
- 25.0% shareholding in Gruppo Investment Nigeria Limited (Gruppo), the owner of Ikeja City Mall, located in Lagos, Nigeria; and
- 31.8% shareholding in AttAfrica, which is invested in four retail properties in Ghana and one retail property in Zambia.
As at 30 June 2018, the value of Attacq's Rest of Africa retail investments was R1.1 billion comprising 3.8% (2017: 4.6%) of its total
gross assets. In June 2017, the value totalled R1.2 billion and included Attacq's investment in The Grove Mall of Namibia, which was
disposed of in May 2018. The proceeds of R191.9 million were utilised to reduce interest-bearing debt.
As at 30 June 2018, the group's equity accounted investment into Gruppo totalled R305.1 million (2017: R286.5 million). The net
increase in the investment value is due to the 5.1% weakening of the rand against the US dollar, offset by an impairment of
R25.2 million.
Attacq's investment in AttAfrica, through its shareholder loan, amounted to R787.3 million (2017: R776.2 million), being its gross
loan of R953.9 million (2017: R908.5 million), net of an aggregate impairment of R166.6 million (2017: R132.3 million). AttAfrica
repaid an amount of R99.3 million comprising capital and interest during the year to Attacq, using funds generated by the external
refinancing of Accra Mall. An impairment of R25.9 million was recognised against the loan in the current year (2017: R82.8 million)
due to the increase in the negative net asset value position of AttAfrica.
AttAfrica capital structure
Currently Attacq is not receiving regular cash distributions from AttAfrica, due to the unfavourable trading conditions and as a
consequence of the capital structure of Attacq's investment in AttAfrica. The capital structure, inter alia, gives Attacq a 31.8%
shareholding in AttAfrica which is in excess of its obligation to contribute 25.0% of the funding requirements and therefore Attacq
has a share of any capital growth in the underlying portfolio in excess of its capital contributions. However, Hyprop Investments
Limited has first right to operational income flows generated by the portfolio, resulting in irregular cash distributions to Attacq.
AttAfrica shareholders are investigating options to create liquidity in the portfolio in advance of the June 2020 shareholder liquidity
event. Failing to do so, the existing capital structure will be restructured.
Malls and performance
At 30 June 2018, the retail properties in which Attacq has an interest, together with the vacancy rates were as follows:
Attacq's
Vacancy % Vacancy % effective
Property Location Owner PGLA m(2) 2018 2017 interest %
Manda Hill Lusaka, Zambia AttAfrica 42 002 4.1 5.4 15.9
Accra Mall Accra, Ghana AttAfrica 21 311 6.8 - 15.0
West Hills Mall Accra, Ghana AttAfrica 28 272 10.4 5.3 14.3
Achimota Retail Centre Accra, Ghana AttAfrica 15 534 1.9 6.1 23.9
Kumasi City Mall Kumasi, Ghana AttAfrica 18 604 13.0 26.5 23.9
Ikeja City Mall Lagos, Nigeria Gruppo 22 223 3.1 - 25.0
Ghana's economy has favourable growth prospects and a general improvement in trading performance was evident. The
replacement of the second anchor at West Hills Mall and Achimota Retail Centre with Game is expected to impact both malls
positively once opened in November 2018. Manda Hill in Zambia was impacted by filling vacancies at lower rental levels during
the year. Whilst still challenging, trading conditions in Nigeria are improving off the back of moderating inflation, improved oil
production and an increase in the availability of foreign exchange.
Management's focus continues to be the filling of vacancies and tenant retention in order to optimise net income and asset value.
Financial position
Investments
Investments in and loans to associates and joint ventures reduced from June 2017 (R5.1 billion) to June 2018 (R4.9 billion) and relate
mainly to movements in the MAS and AttAfrica investments as detailed above.
Other financial assets comprise mainly of the R331.7 million (2017: 243.1 million) loan provided to the co-owners of the PwC Tower.
The loan carries similar terms and conditions to the debt raised by AWIC in respect of the development and is serviced monthly
from the property's rental income. The Atterbury Group loan, with a 30 June 2017 outstanding balance of R177.2 million, was settled
in January 2018.
A breakdown of investments is shown below:
2018 2017
Equity and loan accounts R000 R000
Associates and joint ventures
MAS 3 145 828 2 729 308
AttAfrica 787 304 776 246
Gruppo 305 173 286 504
Attacq Sanlam properties joint venture 143 803 140 999
Attacq Equites joint venture 91 063 91 384
Other financial assets
PwC Waterfall property partners 331 726 243 069
Wingspan 40 121 54 617
Nova Eventis 2 947 197 677
The Grove Mall of Namibia - 184 085
Atterbury Group - 177 239
Artisan - 145 457
Other 46 144 69 558
Total 4 894 109 5 096 143
Assets held for sale
2018 2017
R000 R000
Brooklyn Bridge Office Park - 553 000
The Atria/Barrow Properties 46 668 50 025
Cummins South Africa's regional office/Zenprop 63 372 -
Stenham European Shopping Centre Fund Limited (Stenham) 2 947 197 677
Rainprop Proprietary Limited 775 781
Zimmer Biomet/Sanlam Properties 5 109 -
Total 118 871 801 483
The disposal of the Nova Eventis regional shopping centre in Leipzig, Germany, held by Stenham, was implemented and the
majority of the proceeds were received in July 2017 and November 2017. Brooklyn Bridge Office Park remains a non-core asset and
the group is still actively seeking a potential buyer. The asset has been reclassified to investment property as a highly probable sale
may not materialise in the next 12 months.
Funding
Total interest-bearing borrowings net of cash decreased by 2.6% to R9.9 billion compared with 30 June 2017 (R10.1 billion). Gearing,
calculated as total interest-bearing debt less cash on hand as a percentage of total assets, improved from 37.1% in June 2017 to
35.8% in June 2018. The improved gearing is as a result of an increase in cash on hand accumulated during the financial year and
an increase in the gross asset value of assets. During the financial year, Attacq converted the majority of its debt facilities to an
interest-only profile.
In order to mitigate interest rate risk, as at 30 June 2018, approximately 95.0% (2017: 90.8%) of total committed facilities of
R11.7 billion (2017: R12.0 billion) were hedged by way of fixed interest rate loans or interest rate swaps which is higher than the
group's minimum hedging policy. The weighted average cost of funding improved over the last year to 8.7% (2017: 9.2%). This is
due to a combination of a decrease in the JIBAR rates over the past 12 months and the restructure of the debt. The interest cover
ratio improved to 1.6 times (2017: 1.1 times) as a result of both an increase in income and a reduction in finance charges.
A total of R541.8 million (2017: R2.6 billion) of the group's interest-bearing debt is due for repayment over the next 12 months.
During the past year, Attacq successfully refinanced R5.7 billion of debt, including its Attacq Retail Fund Proprietary Limited and
Lynnwood Bridge Office Park Proprietary Limited portfolios and euro denominated debt. Notwithstanding that only half of the
debt secured by the portfolios was due to expire in May 2018, the group refinanced the entire amount early in order to extend the
tenure of its loan book and take advantage of favourable pricing. Attacq used the refinance opportunity to introduce three new
institutional lenders to the group.
A decrease in other financial liabilities of R41.3 million (2017: negative R136.9 million) was recorded on the mark-to-market valuation
of interest rate swaps.
Prospects
South Africa is in a phase of low economic growth resulting in both constrained consumer spend and corporate expansion.
The current weak property fundamentals provide headwinds to the sector.
Attacq's retail portfolio has proven defensive qualities evidenced by average annual trading density growth of 5.3% under
challenging conditions. This portfolio should continue to provide sustainable growth in distributable earnings.
Notwithstanding the difficult market conditions, the development of Waterfall is expected to continue, albeit at a slower pace.
The location, as evidenced by existing and secured future tenants, remains an attractive proposition for corporates considering
office consolidations and new, modern, green-rated premises.
On the international front, Attacq expects to benefit from increasing distributions from its MAS investment underpinned by MAS'
income-generating investments and its acquisition and development pipeline. Attacq is not pursuing any further acquisitions or
expansions in the rest of Africa.
Attacq will continue to explore opportunities to recycle capital with a view to the redeployment of funds into earnings accretive
developments and the reduction of debt.
Attacq has elected to adopt distribution per share as its relevant financial performance measurement due to its conversion to a
REIT.
Attacq is targeting distribution growth of between 7.5% and 9.5% for the 2019 financial year and between 13.0% and 15.0% for the
2020 financial year. This is based on the following assumptions:
- Achieving forecasted rental income based on contractual terms and anticipated market-related renewals
- The expected roll-out of the current and budgeted development portfolio
- MAS achieving its revised distribution target as communicated on 7 September 2018
- No unforeseen circumstances such as major corporate tenant failures or macro-economic instability
The prospects have not been reviewed or reported on by Attacq's auditors.
These revised targets are lower than the 20.0% distribution growth per annum for 2019 and 2020 as previously communicated.
The original distribution targets have been revised as a consequence of the prevailing economic conditions which have negatively
impacted the timing of planned disposals of non-core assets and the roll out of development activity. In addition, the guidance has
been revised due to lower than expected MAS distributions for 2019 as well as lower than expected cash receipts of interest on
shareholder loans from the Rest of Africa retail investments. In this respect, the revised targets exclude shareholder loan interest
accrued but not received. Management has made the decision not to provide a guidance for the 2021 financial year due to the
increased uncertainty in the macro-economic environment.
Declaration of a cash dividend
The board declared a final cash dividend of 74.00000 cents per share, for the year ended 30 June 2018, out of the company's
distributable income.
The dividend is payable to Attacq shareholders in accordance with the timetable set out below: 2018
Last day of trade in order to be eligible to receive the cash dividend Tuesday, 2 October
Shares trade ex-dividend Wednesday, 3 October
Record date to receive the cash dividend Friday, 5 October
Accounts credited by CSDP or broker to dematerialised shareholders with cash dividend payment Monday, 8 October
Cash dividend payment to certificated shareholders deposited on or about Monday, 8 October
Notes:
1. Shares may not be dematerialised or rematerialised between Wednesday, 3 October 2018 and Friday, 5 October 2018 both days
inclusive.
2. Where the transfer secretaries do not have the banking details of any certificated shareholders, the cash dividend of 74.00000
cents will be held in trust by the transfer secretaries pending receipt of the relevant certificated shareholder's banking details
whereafter the cash dividend will be paid via electronic transfer into the personal bank accounts of certificated shareholders.
In accordance with Attacq's status as a REIT with effect from 29 May 2018, shareholders are advised that the dividend meets the
requirements of a "qualifying distribution" for the purposes of section 25BB of the Income Tax Act, No 58 of 1962 (Income Tax
Act). The dividend on the shares will be deemed to be a taxable dividends for South African tax purposes in terms of section 25BB
of the Income Tax Act.
Tax implications for South African resident shareholders
The dividend received by or accrued to South African tax residents must be included in the gross income of such shareholders
and will not be exempt from income tax (in terms of the exclusion to the general dividend exemption, contained in paragraph
(aa) of section 10(1)(k)(i) of the Income Tax Act) because it is a dividend distributed by a REIT. This dividend is, however, exempt
from dividend withholding tax in the hands of South African tax resident shareholders, provided that the South African resident
shareholders provide the following forms to their Central Securities Depository Participant (CSDP) or broker, as the case may be,
in respect of uncertificated shares, or the company, in respect of certificated shares:
a) A declaration that the dividend is exempt from dividends tax.
b) A written undertaking to inform the CSDP, broker or the company, as the case may be, should the circumstances affecting the
exemption change or the beneficial owner cease to be the beneficial owner,
both in the form prescribed by the Commissioner for the South African Revenue Service. Shareholders are advised to contact their CSDP,
broker or the company, as the case may be, to arrange for the above-mentioned documents to be submitted prior to payment of the dividend,
if such documents have not already been submitted.
Tax implications for non-resident shareholders
Dividends received by non-resident shareholders will not be taxable as income and instead will be treated as an ordinary dividend
which is exempt from income tax in terms of the general dividend exemption in section 10(1)(k)(i) of the Income Tax Act. Any
distribution received by a non-resident from a REIT will be subject to dividend withholding tax at 20%, unless the rate is reduced
in terms of any applicable agreement for the avoidance of double taxation (DTA) between South Africa and the country of
residence of the shareholder. Assuming dividend withholding tax will be withheld at a rate of 20%, the net dividend amount due to
non-resident shareholders is 59.20000 cents per share. A reduced dividend withholding rate in terms of the applicable DTA may
only be relied on if the non-resident shareholder has provided the following forms to their CSDP or broker, as the case may be, in
respect of uncertificated shares, or the company, in respect of certificated shares:
a) A declaration that the dividend is subject to a reduced rate as a result of the application of a DTA.
b) A written undertaking to inform their CSDP, broker or the company, as the case may be, should the circumstances affecting the
reduced rate change or the beneficial owner cease to be the beneficial owner,
both in the form prescribed by the Commissioner for the South African Revenue Service. Non-resident shareholders are advised to contact
their CSDP, broker or the company, as the case may be, to arrange for the above-mentioned documents to be submitted prior to payment of
the dividend if such documents have not already been submitted, if applicable.
The number of shares in issue as at the date of declaration is 749 582 777 ordinary shares of no par value which includes 46 427 553
treasury shares. Attacq's tax reference number is 9241/038/64/6.
Subsequent events
In line with IAS 10 Events after the reporting period, the declaration of the dividend occurred after the year-end, resulting in a
non-adjusting event which is not recognised in the financial statements. There are no further subsequent events noted.
Commitments
Please refer to developments under construction and developments in the pipeline for future capital commitments. Future
commitments will be funded by undrawn banking facilities, cash on hand and proceeds from capital recycling activities.
Issue of shares
During the year, 340 000 shares were issued in terms of long-term incentive awards.
Change in directors
Effective 1 July 2017, Louis van der Watt resigned from the board as a non-executive director. Morne Wilken resigned from the
board as chief executive officer (CEO) with effect from 31 December 2017, in order to take up the CEO position of MAS. The board
appointed Melt Hamman, the then chief financial officer (CFO), as CEO on 19 June 2018. Raj Nana has been appointed as CFO
and Jackie van Niekerk as chief operating officer (COO), joining the board on 19 June 2018. Ipeleng Mkhari was appointed as
independent non-executive director from 15 March 2018.
Basis of preparation and accounting policies
The summarised provisional consolidated financial statements for the year ended 30 June 2018 have been prepared in accordance
with the JSE Listings Requirements applicable to summarised provisional reports and the requirements of the Companies Act,
No. 71 of 2008 applicable to summarised financial statements. The JSE Listings Requirements require provisional reports to
be prepared in accordance with the framework concepts and the measurement and recognition requirements of International
Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee
and Financial Pronouncements as issued by the Financial Reporting Standards Council, and to also, as a minimum, contain the
information required by IAS 34: Interim Financial Reporting.
This report together with the preparation of the consolidated financial statements were compiled under the supervision of Raj Nana
CA(SA), CFO of Attacq.
The accounting policies applied in the preparation of the summarised consolidated financial statements are in terms of IFRS and
are consistent with the accounting policies applied in the preparation of the previous consolidated financial statements, with the
exception of the adoption of new and revised standards which became effective during the year. These standards did not have any
material impact on the financial statements.
Fair value disclosure
The group's investment properties were externally valued by independent valuers. In terms of IAS 40: Investment Property and
IFRS 7: Financial Instruments: Disclosure, the group's investment properties are measured at fair value and are categorised as level
3 investments. The valuation of investment properties requires judgement in the determination of future cash flows from leases and
an appropriate capitalisation rate which varies between 6.25% and 9.75% (2017: 6.25% and 9.75%). Changes in the capitalisation rate
attributable to changes in market conditions can have a significant impact on property valuations. A 50.0 basis points weakening in
the capitalisation rate will decrease the value of investment properties by R665.1 million (2017: R640.5 million). A 50.0 basis points
improvement in the capitalisation rate will increase the value of investment properties by R740.7 million (2017: R746.2 million).
Changes in the discount rate attributable to changes in the underlying risk profile associated with the property portfolio can
have a significant impact on property valuations. A 50.0 basis points weakening in the discount rate will decrease the value of
investment properties by R589.4 million (2017: R557.7 million). A 50.0 basis points improvement in the discount rate will increase
the value of investment properties by R594.4 million (2017: R592.1 million). In terms of IAS 39: Financial Instruments: Recognition
and measurement and IFRS 7, the group's currency and interest rate derivatives as well as the equity derivative are measured
at fair value through profit or loss and are categorised as level 2 investments. Unlisted investments are categorised as level 3.
There were no transfers between levels 1, 2 and 3 during the year. The valuation methods applied are consistent with those applied
in preparing the previous consolidated financial statements. This announcement does not include all the information required
pursuant to paragraph 16A(j) of IAS 34. The group's audited consolidated financial statements is available on the issuer's website,
at the issuer's registered offices and upon request.
Audit report
The auditor, Deloitte & Touche, has issued its opinion on Attacq's audited consolidated financial statements for the year ended
30 June 2018. The audit was conducted in accordance with International Standards on Auditing. Deloitte & Touche has issued
an unmodified opinion. A copy of the auditor's report together with a copy of the audited consolidated financial statements is
available for inspection at the company's registered office and on the company's website (www.attacq.co.za/investors-home/).
These summarised provisional consolidated financial statements have been derived from the group's audited consolidated financial
statements and are consistent in all material respects with the group's audited consolidated financial statements for the year
ended 30 June 2018, but are not themselves audited. The directors take full responsibility for the preparation of these summarised
provisional consolidated financial results and confirm that the financial information has been correctly extracted from the underlying
audited consolidated financial statements. Any reference to future financial information included in this announcement has not
been reviewed or reported on by the auditor. The auditor does not necessarily report on all the information contained in this
announcement. Shareholders are advised that, in order to obtain a full understanding of the nature of the auditor's engagement,
they should obtain a copy of that report together with the audited consolidated financial statements as at 30 June 2018 from the
company's registered office or from the company's website.
On behalf of the board
P Tredoux M Hamman
Chairman CEO
10 September 2018
Summarised consolidated statement of financial position
Audited Audited
30 June 30 June
2018 2017
R000 R000
ASSETS
Non-current assets
Property and equipment 42 667 52 272
Investment properties 21 234 085 19 735 365
Per valuation 22 166 318 20 536 861
Straight-line lease debtor (932 233) (801 496)
Straight-line lease debtor 932 233 801 496
Deferred initial lease expenditure 9 275 7 666
Intangible assets 266 502 290 539
Goodwill 67 774 67 774
Investment in associates and joint ventures 3 328 852 3 153 392
Other financial assets 373 651 304 368
Other investments 488 11 941
Deferred tax assets 11 3 329
Total non-current assets 26 255 538 24 428 142
Current assets
Taxation receivable 2 714 951
Trade and other receivables 212 563 174 623
Inventory 42 484 25 278
Loans to associates and joint ventures 1 190 590 1 250 278
Other financial assets 16 308 193 590
Cash and cash equivalents 1 239 631 447 846
Total current assets 2 704 290 2 092 566
Non-current assets held for sale 118 871 801 483
Total assets 29 078 699 27 322 191
EQUITY AND LIABILITIES
Equity
Stated capital 6 460 108 6 456 633
Distributable reserves 9 544 296 6 945 483
Available-for-sale reserve 279 845 282 329
Share-based payment reserve 117 390 128 216
Foreign currency translation reserve 744 701 238 254
Acquisition of non-controlling interests reserve (104 215) (104 215)
Equity attributable to owners of the holding company 17 042 125 13 946 700
Non-controlling interests 16 705 (43 087)
Total equity 17 058 830 13 903 613
Non-current liabilities
Long-term borrowings 10 527 029 7 976 110
Deferred tax liabilities 178 924 1 932 140
Other financial liabilities 127 869 164 696
Cash settled share-based payments 559 1 496
Finance lease obligation 88 914 83 150
Total non-current liabilities 10 923 295 10 157 592
Current liabilities
Other financial liabilities 74 060 137 145
Taxation payable 1 496 7 665
Cash settled share-based payments 747 1 684
Trade and other payables 403 550 501 380
Provisions 32 196 2 777
Short-term portion of long-term borrowings 584 525 2 279 802
Total current liabilities 1 096 574 2 930 453
Liabilities directly associated with non-current assets held for sale - 330 533
Total liabilities 12 019 869 13 418 578
Total equity and liabilities 29 078 699 27 322 191
The following information does not form part of the statement of financial position
Net asset value per share
Net asset value per share (cents) 2 424 1 984
Net asset value per share adjusted for deferred tax (cents) 2 449 2 259
Summarised consolidated statement of profit and loss and other comprehensive income
Audited Audited
30 June 30 June
2018 2017
R000 R000
Gross revenue 2 138 961 2 060 895
Rental income 2 035 494 1 861 093
Straight-line lease income adjustment 103 467 199 802
Property expenses (724 726) (742 277)
Net rental income 1 414 235 1 318 618
Sale of inventory 29 865 -
Cost of sales (24 918) -
Other income 157 675 60 463
Operating and other expenses (322 918) (585 730)
Operating profit 1 253 939 793 351
Amortisation of intangible asset (24 037) (22 060)
Fair value adjustments 370 265 527 581
Investment properties 328 970 664 525
Other financial assets and liabilities 41 295 (136 944)
Gain on available-for-sale financial assets 35 750 -
Net income from associates and joint ventures 81 706 249 880
Investment income 194 447 189 536
Finance costs (950 501) (987 411)
Profit before taxation 961 569 750 877
Income tax credit (expense) 1 749 765 (150 599)
Current taxation (21 911) (100 576)
Deferred taxation 1 771 676 (50 023)
Profit for the year 2 711 334 600 278
Attributable to:
Owners of the holding company 2 651 542 630 164
Non-controlling interests 59 792 (29 886)
Other comprehensive income
Items that will be reclassified subsequently to profit and loss
Gain (loss) on available-for-sale financial assets 27 686 (117 827)
Taxation relating to components of other comprehensive income 2 (11 269)
Realisation of available-for-sale financial assets (32 336) -
Other comprehensive loss for the year net of taxation (4 648) (129 096)
Total comprehensive income for the year 2 706 686 471 182
Attributable to:
Owners of the holding company 2 646 894 501 068
Non-controlling interests 59 792 (29 886)
Earnings per share
Basic (cents) 377.2 89.7
Diluted (cents) 374.2 89.0
Reconciliation between earnings and headline earnings
Audited Audited
30 June 30 June
2018 2017
R000 R000
Profit for the year 2 651 542 630 164
Headline earnings adjustments (426 476) (468 558)
Profit on disposal of subsidiary (5 633) (35 695)
Loss on disposal of other investments 2 612 -
Profit on disposal of investment property (14 947) (15 217)
Impairment of associates and other investments 51 197 244 540
Realisation of available-for-sale financial assets (35 750) -
Fair value adjustments (370 265) (527 581)
Net income from associates and joint ventures (33 270) (249 880)
Tax effect of adjustments 4 975 123 110
Non-controlling interests' share (25 395) (7 835)
Headline earnings 2 225 066 161 606
Number of shares in issue* 703 155 224 702 815 224
Weighted average number of shares in issue* 702 989 909 702 389 882
Diluted weighted average number of shares in issue* 708 584 902 708 079 085
Headline earnings per share
Basic (cents) 316.5 23.0
Diluted (cents) 314.0 22.8
*Adjusted for 46 427 553 treasury shares (2017: 46 427 553)
Summarised consolidated statement of cash flows
Audited Audited
30 June 30 June
2018 2017
R000 R000
Cash flow generated from operating activities 380 762 124 022
Cash generated from operations 1 019 788 1 033 295
Investment income 290 129 119 368
Finance costs (899 312) (934 930)
Taxation paid (29 843) (93 711)
Cash flow (utilised in) generated from investing activities (119 105) 310 427
Property and equipment acquired (2 874) (27 319)
Property and equipment disposed 284 -
Investment properties acquired (738 927) (1 098 009)
Investment properties disposed 62 584 50 017
Associates and joint ventures acquired (2 667) (36 227)
Associates and joint ventures disposed 253 977 744 845
Other investments disposed 11 969 -
Other financial assets repaid (raised) 98 074 (175 041)
Additions to deferred initial lease adjustments (3 804) (4 845)
Cash flow relating to non-current assets held for sale 202 279 857 006
Cash flow generated from (utilised in) financing activities 530 128 (423 884)
Capital raised 3 475 13 828
Settlement of share-based payment (13 678) (2 097)
Long-term borrowings raised 3 358 695 2 355 304
Long-term borrowings repaid (2 895 275) (3 254 770)
Loans to associates and joint ventures repaid 130 649 468 643
Other financial liabilities repaid (53 738) (4 792)
Total cash movement for the year 791 785 10 565
Cash at the beginning of the year 447 846 437 281
Total cash at the end of the year 1 239 631 447 846
Summarised consolidated statement of changes in equity
Acquisition Equity
Foreign of non- attributable
Available- Share-based currency controlling to owners of Non-
Stated Distributable for-sale payment translation interests the holding controlling Total
capital reserves reserve reserve reserve reserve company interests equity
R000 R000 R000 R000 R000 R000 R000 R000 R000
Audited balance at
1 July 2016 6 442 805 5 891 513 847 499 100 453 318 734 (116 483) 13 484 521 (13 201) 13 471 320
Total comprehensive
income - 630 164 (129 096) - - - 501 068 (29 886) 471 182
Profit for the year - 630 164 - - - - 630 164 (29 886) 600 278
Other comprehensive
loss - - (129 096) - - - (129 096) - (129 096)
Foreign currency
translation reserve - - - - (80 480) - (80 480) - (80 480)
Issue of shares 13 828 - - - - - 13 828 - 13 828
Derecognition of
reserves and non-
controlling interests due
to sale of subsidiaries - 423 806 (436 074) - - 12 268 - - -
Recognition of share-
based payment reserve - - - 27 763 - - 27 763 - 27 763
Audited balance at
30 June 2017 6 456 633 6 945 483 282 329 128 216 238 254 (104 215) 13 946 700 (43 087) 13 903 613
Total comprehensive
income - 2 651 542 (4 648) - - - 2 646 894 59 792 2 706 686
Profit for the year - 2 651 542 - - - - 2 651 542 59 792 2 711 334
Other comprehensive
loss - - (4 648) - - - (4 648) - (4 648)
Foreign currency
translation reserve - - - - 506 447 - 506 447 - 506 447
Issue of shares 3 475 - - - - - 3 475 - 3 475
Settlement of share-
based payment
transaction - - - (14 961) - - (14 961) - (14 961)
Derecognition of
reserves and non-
controlling interests due
to sale of subsidiaries - (59 698) 2 164 - - - (57 534) - (57 534)
Transfer between
reserves - 6 969 - (15 077) - - (8 108) - (8 108)
Recognition of share-
based payment reserve - - - 19 212 - - 19 212 - 19 212
Audited balance at
30 June 2018 6 460 108 9 544 296 279 845 117 390 744 701 (104 215) 17 042 125 16 705 17 058 830
Audited summarised segmental analysis
30 June 2018
Office and Waterfall Head office Total
Figures in R000 mixed-use Retail Industrial Hotel developments South Africa South Africa
STATEMENT OF FINANCIAL POSITION
Investment property 7 501 801 10 140 174 1 286 827 427 663 - 5 000 19 361 465
Waterfall developments - - - - 1 872 620 - 1 872 620
Developments under construction - - - - 346 441 - 346 441
Waterfall development rights - - - - 879 324 - 879 324
Infrastructure and services - - - - 646 855 - 646 855
Straight-line lease debtor 557 474 252 892 99 577 22 290 - - 932 233
Intangible assets and goodwill - - - - - 334 276 334 276
Investments in associates and joint ventures 954 40 121 91 619 - - 2 382 135 076
Other financial assets 22 920 13 288 - - - 353 751 389 959
Loans to associates and joint ventures - - 143 247 - - 2 814 146 061
Trade and other receivables 109 565 69 396 23 286 2 674 - 7 587 212 508
Cash and cash equivalents 67 684 93 817 5 862 192 - 1 003 838 1 171 393
Inventory 42 484 - - - - - 42 484
Non-current assets held for sale 46 668 - 68 481 - - 775 115 924
Other assets 3 000 - - - - 52 155 55 155
Total assets 8 352 550 10 609 688 1 718 899 452 819 1 872 620 1 762 578 24 769 154
Long-term borrowings - - - - - 9 680 546 9 680 546
Other financial liabilities 25 474 27 537 12 807 - - 134 397 200 215
Deferred tax liabilities - - - - - 48 841 48 841
Trade and other payables 188 611 152 641 33 113 2 870 - 26 304 403 539
Other liabilities - - - - 25 476 96 940 122 416
Total liabilities 214 085 180 178 45 920 2 870 25 476 9 987 028 10 455 557
Rest of Africa
Investment in retail Head office
Figures in R000 MAS investments global Total
STATEMENT OF FINANCIAL POSITION
Investment property - - - 19 361 465
Waterfall developments - - - 1 872 620
Developments under construction - - - 346 441
Waterfall development rights - - - 879 324
Infrastructure and services - - - 646 855
Straight-line lease debtor - - - 932 233
Intangible assets and goodwill - - - 334 276
Investments in associates and joint ventures 3 145 828 47 948 - 3 328 852
Other financial assets - - - 389 959
Loans to associates and joint ventures - 1 044 529 - 1 190 590
Trade and other receivables - - 55 212 563
Cash and cash equivalents - - 68 238 1 239 631
Inventory - - - 42 484
Non-current assets held for sale - - 2 947 118 871
Other assets - - - 55 155
Total assets 3 145 828 1 092 477 71 240 29 078 699
Long-term borrowings - - 1 431 008 11 111 554
Other financial liabilities - - 1 714 201 929
Deferred tax liabilities 130 083 - - 178 924
Trade and other payables - - 11 403 550
Other liabilities - - 1 496 123 912
Total liabilities 130 083 - 1 434 229 12 019 869
Office and Waterfall Head office Total
Figures in R000 mixed-use Retail Industrial Hotel developments South Africa South Africa
STATEMENT OF COMPREHENSIVE INCOME
Rental income 739 306 1 135 254 107 598 46 663 - 6 673 2 035 494
Straight-line lease income adjustment 28 673 29 878 43 278 1 638 - - 103 467
Property expenses (226 974) (470 003) (32 000) (12 673) - 16 924 (724 726)
Net rental income 541 005 695 129 118 876 35 628 - 23 597 1 414 235
Sale of inventory 19 344 - 10 521 - - - 29 865
Cost of sales (16 522) - (8 396) - - - (24 918)
Other income 70 699 58 745 - - - 23 017 152 461
Operating expenses (32 060) (32 790) (5 972) (731) - (93 525) (165 078)
Other expenses (7 918) (13 395) (2 231) - (39 500) (1 773) (64 817)
Operating profit (loss) 574 548 707 689 112 798 34 897 (39 500) (48 684) 1 341 748
Amortisation of intangible assets - - - - - (24 037) (24 037)
Fair value adjustments 148 153 159 567 (10 842) 20 425 11 667 41 494 370 464
Gain on available for sale financial assets - - - - - 35 750 35 750
Net income from associates 36 (4 164) 5 362 - - (284) 950
Investment income 3 340 8 996 13 9 - 57 688 70 046
Finance costs - - - - - (916 593) (916 593)
Profit (loss) before tax 726 077 872 088 107 331 55 331 (27 833) (854 666) 878 328
Taxation - - - - - 1 844 486 1 844 486
Profit (loss) for the year 726 077 872 088 107 331 55 331 (27 833) 989 820 2 722 814
Non-controlling interests - - - - - 59 792 59 792
Profit (loss) for the year attributable to owners 726 077 872 088 107 331 55 331 (27 833) 930 028 2 663 022
Rest of Africa
Investment in retail Head office
Figures in R000 MAS investments global Total
STATEMENT OF COMPREHENSIVE INCOME
Rental income - - - 2 035 494
Straight-line lease income adjustment - - - 103 467
Property expenses - - - (724 726)
Net rental income - - - 1 414 235
Sale of inventory - - - 29 865
Cost of sales - - - (24 918)
Other income - 5 214 - 157 675
Operating expenses - - (5 178) (170 256)
Other expenses - (83 490) (4 355) (152 662)
Operating profit (loss) - (78 276) (9 533) 1 253 939
Amortisation of intangible assets - - - (24 037)
Fair value adjustments - - (199) 370 265
Gain on available for sale financial assets - - - 35 750
Net income from associates 68 774 908 11 074 81 706
Investment income - 120 619 3 782 194 447
Finance costs - - (33 908) (950 501)
Profit (loss) before tax 68 774 43 251 (28 784) 961 569
Taxation (93 297) - (1 424) 1 749 765
Profit (loss) for the year (24 523) 43 251 (30 208) 2 711 334
Non-controlling interests - - - 59 792
Profit (loss) for the year attributable to owners (24 523) 43 251 (30 208) 2 651 542
Office and Waterfall Head office Total
Figures in R000 mixed-use Retail Industrial Hotel developments South Africa South Africa
STATEMENT OF FINANCIAL POSITION
Investment property 5 188 527 9 896 380 870 137 407 240 - 5 000 16 367 284
Waterfall developments - - - - 3 368 081 - 3 368 081
Developments under construction - - - - 1 598 966 - 1 598 966
Waterfall development rights - - - - 1 058 236 - 1 058 236
Infrastructure and services - - - - 710 879 - 710 879
Straight-line lease debtor 501 534 223 013 56 298 20 651 - - 801 496
Intangible assets and goodwill - - - - - 358 313 358 313
Investments in associates and joint ventures 918 54 617 91 591 - - - 147 126
Other financial assets 35 183 142 118 - - - 319 087 496 388
Loans to associates and joint ventures - - 140 792 - - 5 605 146 397
Trade and other receivables 77 926 82 286 5 583 1 446 - 7 295 174 536
Cash and cash equivalents 19 468 96 476 6 708 148 - 237 284 360 084
Inventory - - 25 278 - - - 25 278
Non-current assets held for sale 603 025 - - - - 781 603 806
Other assets - - - - - 64 706 64 706
Total assets 6 426 581 10 494 890 1 196 387 429 485 3 368 081 998 071 22 913 495
Long-term borrowings - - - - - 9 158 969 9 158 969
Other financial liabilities 17 268 183 899 70 174 1 510 - 27 741 300 592
Deferred tax liabilities - - - - - 1 861 469 1 861 469
Trade and other payables 83 532 149 376 137 150 2 125 - 129 186 501 369
Liabilities held for sale - - - - - 330 533 330 533
Other liabilities - - - - - 94 807 94 807
Total liabilities 100 800 333 275 207 324 3 635 - 11 602 705 12 247 739
Rest of Africa
Investment in retail Head office
Figures in R000 MAS investments global Total
STATEMENT OF FINANCIAL POSITION
Investment property - - - 16 367 284
Waterfall developments - - - 3 368 081
Developments under construction - - - 1 598 966
Waterfall development rights - - - 1 058 236
Infrastructure and services - - - 710 879
Straight-line lease debtor - - - 801 496
Intangible assets and goodwill - - - 358 313
Investments in associates and joint ventures 2 729 308 223 534 53 424 3 153 392
Other financial assets - - 1 570 497 958
Loans to associates and joint ventures - 1 023 301 80 580 1 250 278
Trade and other receivables - - 87 174 623
Cash and cash equivalents - - 87 762 447 846
Inventory - - - 25 278
Non-current assets held for sale - - 197 677 801 483
Other assets - - 11 453 76 159
Total assets 2 729 308 1 246 835 432 553 27 322 191
Long-term borrowings - - 1 096 943 10 255 912
Other financial liabilities - - 1 249 301 841
Deferred tax liabilities 36 786 33 885 - 1 932 140
Trade and other payables - - 11 501 380
Liabilities held for sale - - - 330 533
Other liabilities - - 1 965 96 772
Total liabilities 36 786 33 885 1 100 168 13 418 578
Office and Waterfall Head office Total
Figures in R000 mixed-use Retail Industrial Hotel developments South Africa South Africa
STATEMENT OF COMPREHENSIVE INCOME
Rental income 663 638 1 072 011 67 569 45 085 - 12 790 1 861 093
Straight-line lease income adjustment 97 826 74 390 19 981 7 605 - - 199 802
Property expenses (168 455) (462 513) (19 075) (13 023) - (79 211) (742 277)
Net rental income 593 009 683 888 68 475 39 667 - (66 421) 1 318 618
Sale of inventory - - - - - - -
Cost of sales - - - - - - -
Other income 17 787 6 120 - - - 1 051 24 958
Operating expenses (26 515) (32 594) (3 117) (1 470) - (94 100) (157 796)
Other expenses (9 640) (10) (7 824) - - (25 805) (43 279)
Operating profit (loss) 574 641 657 404 57 534 38 197 - (185 275) 1 142 501
Amortisation of intangible assets - - - - - (22 060) (22 060)
Fair value adjustments 44 060 403 286 68 092 21 498 127 589 (137 628) 526 897
Net income from associates 37 1 283 22 385 - - (496) 23 209
Investment income 36 183 5 189 14 852 35 - (2 662) 53 597
Finance costs - - - - - (891 536) (891 536)
Profit (loss) before tax 654 921 1 067 162 162 863 59 730 127 589 (1 239 657) 832 608
Taxation - - - - - (112 194) (112 194)
Profit (loss) for the year 654 921 1 067 162 162 863 59 730 127 589 (1 351 851) 720 414
Non-controlling interests - - - - - (29 886) (29 886)
Profit (loss) for the year attributable to owners 654 921 1 067 162 162 863 59 730 127 589 (1 381 737) 690 528
Rest of Africa
Investment in retail Head office
Figures in R000 MAS investments global Total
STATEMENT OF COMPREHENSIVE INCOME
Rental income - - - 1 861 093
Straight-line lease income adjustment - - - 199 802
Property expenses - - - (742 277)
Net rental income - - - 1 318 618
Sale of inventory - - - -
Cost of sales - - - -
Other income - - 35 505 60 463
Operating expenses - - (1 834) (159 630)
Other expenses - (266 180) (116 641) (426 100)
Operating profit (loss) - (266 180) (82 970) 793 351
Amortisation of intangible assets - - - (22 060)
Fair value adjustments - - 684 527 581
Net income from associates 190 008 3 159 33 504 249 880
Investment income - 109 089 26 850 189 536
Finance costs - - (95 875) (987 411)
Profit (loss) before tax 190 008 (153 932) (117 807) 750 877
Taxation (36 096) - (2 307) (150 597)
Profit (loss) for the year 153 912 (153 932) (120 114) 600 280
Non-controlling interests - - - (29 886)
Profit (loss) for the year attributable to owner 153 912 (153 932) (120 114) 570 394
Segmental analysis
Reconciliation of profit for the year to distributable earnings
Audited
30June
2018
R000
Profit for the year attributable to Attacq's shareholders 2 651 542
Profit on disposal of subsidiary (5 633)
Loss on disposal of other investments 2 612
Profit on disposal of investment property (14 947)
Impairment of associates, other investments and loans 51 197
Realisation of available-for-sale financial assets (35 750)
Fair value adjustments (370 265)
Net income from associates and joint ventures (81 706)
Non-controlling interests' share of fair value adjustments (25 395)
Straight-line lease income adjustments (95 967)
Adjustment for net non-cash interest from associates (87 613)
Net cash interest received from associates 42 425
Depreciation and amortisation 40 335
Foreign currency translation effect 50 698
Finance lease interest 3 784
Dividends received from associates 166 723
Write-off of other trade and receivable 52 492
Write-off of loan account net of non-controlling interest (56 178)
Non cash interest accrued 7 536
Movement in provision 3 943
Deferred taxation (1 771 676)
Actual finance lease payments (773)
Distributable earnings for the year 527 384
Number of shares in issue* 703 155 224
Weighted average number of shares in issue* 702 989 909
Diluted weighted average number of shares in issue* 708 584 902
Distributable earnings per share
Basic (cents) 75.0
Diluted (cents) 75.0
Distribution for the year
Interim -
Final 520 335
Distribution per share 74.0
Interim (cents) -
Final (cents) 74.0
* Adjusted for 46 427 553 treasury shares (2017: 46 427 553)
Independent non-executive directors
P Tredoux (chairperson)
HR El Haimer (lead independent)
MM du Toit
IN Mkhari
KR Moloko
BT Nagle
S Shaw-Taylor
JHP van der Merwe
Executive directors
M Hamman (CEO)
R Nana (CFO)
JR van Niekerk (COO)
Company secretary
T Kodde
Registered office
ATT House, 2nd Floor
Maxwell Office Park
37 Magwa Crescent
Waterfall City
2090
Postal address
PostNet Suite 016
Private Bag X81
Halfway House
1685
Transfer secretaries
Computershare Investor Services Proprietary Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
(PO Box 61051, Marshalltown, 2107)
Sponsor
Java Capital
Company contact details
Head of investor relations
Brenda Botha
Landline number: 087 845 1112
brenda@attacq.co.za
11 September 2018
Date: 11/09/2018 07:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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