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TEXTON PROPERTY FUND LIMITED - Abridged Financial Results for the year ended 30 June 2018 and Notice of Annual General Meeting

Release Date: 30/10/2018 09:52
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Abridged Financial Results for the year ended 30 June 2018 and Notice of Annual General Meeting

Texton Property Fund Limited
(Incorporated in the Republic of South Africa) 
(Registration number: 2005/019302/06)
A Real Estate Investment Trust, listed on the JSE Limited
JSE share code: TEX ISIN: ZAE000190542 
(formerly ISIN: ZAE000185872)

www.texton.co.za

Abridged financial results for the year ended 30 June 2018 
and notice of annual general meeting

Key metrics
- Rebased dividend per share 89,31 cents (2017: 102,80 cents).
Down 13,1%
- Restated net tangible asset value** 659,57 cents per share
(2017: 781,93 cents per share). Down 15,7%
- Gearing ratios 55,4% (2017: 50,9%).
Up 4,5%
- Net property income* R416,9 million (2017: R440,8 million).
Down 5,4%
- Number of properties* 49 (2017: 54).
Down 9,3%
- Portfolio value* R5 402,9 billion (2017: R5 508, billion).
Down 1,9%
- National/listed/blue chip tenants (by GLA)* 64,2% (2017: 61,9%).
Up 2,3%
- Investment property income R581,2 million (2017: R589,2 million).
Down 1,4%

* Including Texton's 50% interest in Broad Street Mall
** Net asset value less deferred tax

Commentary

Nature of the business
Texton Property Fund Limited ("Texton" or "the Company" or "the Fund") is an 
internally asset managed Real Estate Investment Trust ("REIT") listed on
the JSE Limited. It has a portfolio of R5,4 billion of assets with retail, 
office and industrial exposure located in South Africa and the United Kingdom. 
The Board of Directors has approved and adopted a revised investment strategy. 
The strategy's main objectives are to rebalance the Fund to achieve consistent 
property income streams, strong tenant covenants and portfolio optimisation.

Our intention is to pursue industrial opportunities with sound fundamentals, 
particularly warehousing and logistics properties in main metropolitan nodes.

Texton is committed to achieving the highest possible returns for its 
shareholders by executing its mandate through achieving growth through 
diversification.

Distributable earnings and commentary on results
The Board of Directors of Texton ("the Board") is pleased to declare a final 
dividend of 41,36 (30 June 2017: 54,85) cents per share. This was achieved 
from a solid performance of the core portfolio albeit through a difficult 
trading environment and macro-economic pressures. The total dividend for 
the year amounting to 89,31 (30 June 2017: 102,80) cents per share was 
slightly behind guidance given to the market.

The exercise of the PIC Put Option resulted in the Board having to delay our 
results. As per the cautionary announcements released on 23 August and
13 September, the PIC Put Option requires Texton to repurchase the 
51,9 million shares previously held by BEE SPV for the outstanding loan 
balance, which is currently R642,6 million at year end. The repurchase is 
subject to compliance with the JSE Listings Requirements and the Companies 
Act which includes a special resolution being passed by shareholders. 
Texton has commenced the process of obtaining shareholder approval and 
will keep shareholders updated via SENS announcements. See note 5 for 
further details.

As guided to investors, we are nearing the completion of our portfolio 
rationalisation. The reduction of net property income as a result of the 
sale of non-core properties, additional finance costs associated with the
R180 million payment to cancel the asset management contract and lower 
foreign exchange gains have resulted in lower distributable income for 
the 12 months to June 2018.

Our challenges in 2018 were among the toughest in our company's history. 
We operated in a tough political environment both in South Africa and 
the United Kingdom, a weak macro-economic climate in South Africa and 
challenging times in the property market. As we know, when the economy 
stops growing, capital growth in other sectors, including the commercial 
sector, also declines.

Economic conditions exacerbated by the technical recession in South 
Africa continue to present challenges, including weak local property 
fundamentals. Property owners are focusing on the income stability of 
their respective portfolios due to the slow economy.

The UK economy regained some pace in comparison to 2017 providing some 
green shoots for the tightening of monetary policy. The property outlook 
is pointing towards yield stability for the remainder of 2018, despite 
uncertainty about Brexit and the prospect of rising interest rates. One 
of the main challenges relates to the high-profile Company Voluntary 
Arrangements ("CVA") that have come to market. Combined with rising 
e-commerce, shifts in landlord rent income and increased costs have put 
pressure on the retail sector for both landlords and tenants.

Across the spectrum, there is added pressure on tenants with increased 
operational and utility costs. Our continued alignment with the right 
service providers has proven to unlock cost efficiencies where possible 
and savings of circa R9 million were achieved for the period under review.

Texton continues to act on its investment strategy of acquiring 
complementary and portfolio-enhancing properties which offer long-term 
distribution and capital growth underpinned by strong contractual cash 
flows. As announced on SENS on 21 May 2018, Texton has secured the 
acquisition of four A-grade industrial properties for R205,3 million at 
an acquisition yield of 9,4%.The properties are single tenanted with a 
weighted average lease term of 4,4 years. Competition Commission 
approval was granted on 24 July 2018. Texton continues to focus on 
reducing the LTV ratio to return to a target level of below 40%, 
however, this will take time given the quantum of the Manco cancellation 
payment, together with the resolution of the PIC Put Option.

Property portfolio

Key performance indicators
A key focus over the past twelve months has been cost rationalisation and 
portfolio-enhancing acquisitions, which will diversify the Fund in terms of 
both sector and geography. Texton continues to maintain a defensive office 
portfolio, which has performed admirably considering the oversupply and 
vacancies currently experienced in the major property nodes. Our industrial 
portfolio has performed in line with budget other than the vacancy at
Hermanstad Industrial Park.

Our South African retail portfolio has remained robust with full occupancy 
at Woodmead Commercial Park, Goldurb (Truworths) and a small vacancy at
Kempstar Mall.

Texton's current portfolio, split by value, is 59,3% (June 2017: 61,0%; 
December 2017: 59,9%) located in South Africa and 40,7% (June 2017:
39,0%; December 2017: 40,1%) located in the United Kingdom (including our 
portion of Broad Street Mall).

The disposal of Parthenon Park and Talk Talk (Stanford House) are progressed 
and both of these properties have been classified as held for sale at 
30 June 2018. The sale of the latter will open up an opportunity to 
repatriate funds back to South Africa to reduce our gearing and grow our 
UK portfolio with the remainder of the proceeds.

Vacancies
Texton has embarked on an active drive to fill its vacancies and continues 
to engage with its broker network, principals and prospective users. Vacancies 
have increased slightly to 7,9% at 30 June 2018 from 7,0% at 31 December 2017. 
On a like-for-like basis to 30 June 2018, our vacancies remain below the South
African Property Owners' Association (“SAPOA”) average of 11,1%. We've seen
positive results with a decline in vacancies in our larger pockets of space, 
particularly at Scott Street, where 2 400m2 has been successfully let. As we
continue to reduce vacancies, a key focus is on improving the tenant covenants, 
and increasing exposure to large/national/listed entities.

South Africa
Market conditions remain challenging with competitors continuing to offer 
significant lease incentives including attractive rent-free periods. Texton's 
Asset Management team, which has been bolstered with the employment of two 
additional asset managers, continues to foster relationships with our tenants 
in order to improve tenant retention. Texton does not offer significant
rent-free periods but continually assesses new manners of offering incentives
in order to attract and retain tenants.

Texton is progressed in discussions with the Department of Public Works
on longer-term renewals at both the Foretrust building and 14 Loop Street in 
Cape Town. Proposals for both three- and five-year tenures have been presented 
and Texton’s senior management are actively involved in this process.
Scott Street, having been vacant since November 2017, has been partially let 
from October 2018, with the tenant having a pre-emptive right to let the entire 
property. The continued vacancy of Scott Street and St George's Mall, together 
with longer re-let periods and increasing vacancies at Hermanstad Industrial 
Park, Bryanston Gate and Xstrata, have significantly impacted Texton's net 
property income for the 2018 financial year.

Vacancies are expected to increase in the first quarter of FY 2019 as significant 
occupiers at Vunani Chambers and Hermanstad Industrial Park have indicated their 
intention to vacate. We have been actively marketing the upcoming vacancies and 
continue to work closely with our broker network, property managers and tenants 
in order to retain occupancy.

United Kingdom
We have recently taken steps to streamline the asset and property management 
structure. This has resulted in a major cost saving of GBP174 000 to be
realised in the 2019 financial year. The UK portfolio continues to offer
a robust income stream and a lengthy weighted average lease expiry profile. 
The combination of strong covenants and long income profiles has provided
a steady and consistent income stream.

The United Kingdom property market has historically been characterised by
long-term lease tenures of between 10 and 20 years. Average lease tenures have 
been progressively shortening as occupiers require greater flexibility and
are prepared to carry fewer liabilities on their balance sheets. The looming
effect of Brexit has increased uncertainty and is contributing to shorter-term 
decision making. Lease terms are now often for 10 years with a five-year break. 
Clarity over the make-up of a Brexit deal continues to be elusive, having a 
disruptive impact over politics and business.

Additionally, there has been a substantial increase in the number of Company 
Voluntary Arrangements (CVAs), with several national and multi-national brands 
announcing branch closures.

Our vacancies in the UK are those at Broad Street Mall and Fountain House.
The United Kingdom overall vacancy is sitting at 3,6%. Broad Street Mall still 
poses a challenge, given the depressed retail trading environment across the
United Kingdom.

The mall has seen a decrease in footfall as we reconfigure the layout and tenant 
mix around the development plans underway. Nonetheless, our two main anchor
tenants, TK Maxx and Wilko, continue to trade particularly well. Food retailers 
continue to perform well in the centre and Poundland has managed to attract 
substantial trade due to the Poundworld closure.

Terms have been agreed and legal negotiations are progressing well with two 
high-profile national brands to take occupation of the former Argos and
Poundworld stores. Securing these two lettings demonstrates that the mall 
continues to appeal to a range of occupiers. One of these brands is Iceland 
which will drive footfall.

At Broad Street Mall, heads of terms were agreed during the quarter for 
a 101-bedroom hotel with Premier Inn for a new 25-year lease, subject to 
CPI uplifts (capped at 4% p.a.) and a tenant break after 20 years. The hotel 
development proposals have been positively received and the scheme is 
expected to generate significant residual value.

Excellent progress has also been made with the wider residential plans to 
develop over 400 units above the shopping centre. The arrival next year 
of Crossrail (the new high-speed rail link connecting Reading to central
London and the eastern suburbs) will have a positive effect on the Reading 
residential market. The development team have been value engineering the 
design and we aim to submit a planning application in the fourth quarter.

Texton continues to work closely with our joint venture partners to maximise 
returns and capital appreciation from this asset.

We are working with architects to explore the possibility of adding 
accommodation above our property located at Lower Parliament Street in 
Nottingham. These plans are still in their initial phase and financial 
feasibility still has to be determined. The potential optimisation of 
this asset is extremely positive given that Nottingham is a major university 
town and the budget hotel market continues to expand in the UK.

The UK portfolio benefits from an increasing income profile driven by fixed 
uplifts at rent review on 19% of the portfolio and inflation linked uplifts 
on 18% of the portfolio. Most of the remaining rent reviews are subject 
to an upward only basis where the rent is reviewed to the higher of passing 
or market rent. In FY18 we had two flat rent reviews. Six leases have rent 
reviews due over the course of 2019.

As can be seen from the above, the United Kingdom portfolio benefits from
long-term leases with the majority expiring after 2020. Texton will continue 
to focus on obtaining long-term income from strong tenant covenants. Being a 
REIT, these long-term income-generating opportunities fit well in the 
Texton portfolio and allow for continuous stable returns. Texton's 
properties in the United Kingdom have an average unexpired lease term 
of 8,4 years by income and 9,5 years by area.

SA lease expiry profile
Between January and June 2018, Texton successfully concluded 30 new leases 
amounting to 4 615m2. In the same period, 73 existing leases were renewed, 
amounting to 41 338m2. This is pleasing given our focused and proactive 
approach to tenant retention in a challenging market.

Texton's lease expiry profile has improved significantly through early 
and continual engagement with our tenants. Texton's lease expiry profile 
(by GLA) has seen a rewarding decline since June 2017, which indicated 
that 42% of existing leases would be expiring in 2018. We are pleased 
to report that as of June 2018 this figure is now below 5%, with terms 
agreed and the remaining tenants in possession of the agreements for 
signature.

Looking forward, the largest contributor to the June 2019 renewals is a 
sizeable occupier that is currently on a short-term lease and that we 
expect to renew for a longer lease in the coming financial year. This 
will improve the lease expiry profile from 37,3% to 31,6%. Most of these 
lease renewals are already progressed and we foresee muted to positive 
reversions.

Lease expiry profile
                                                    GLA        Revenue
                                                     (%)            (%) 
SA
Vacant                                              9,3
2019                                               37,0           43,9
2020                                               14,0           15,3
2021                                               18,7           20,1
2022                                                3,5            4,1
2023                                               11,9            7,2
>2023                                               5,6            9,4
                                                  100,0          100,0
UK
Vacant                                              3,6
2019                                                2,5            3,3
2020                                                2,9            3,1
2021                                                7,1           10,2
2022                                                1,5            2,3
2023                                                0,6            1,4
>2023                                              81,8           79,7
                                                  100,0          100,0
Combined
Vacant                                              7,9
2019                                               28,5           31,3
2020                                               11,3           11,5
2021                                               15,9           17,0
2022                                                3,0            3,6
2023                                                9,1            5,4
>2023                                              24,3           31,2
                                                  100,0          100,0


Greening initiatives
Sustainable business and greening initiatives remain a priority for Texton. 
As previously reported, various water saving initiatives were implemented 
at our properties located in the Western Cape. As part of the replacement 
ofair-conditioning plant at Foretrust, we will be installing an air 
chiller plant which is significantly more energy and water efficient.

We will be assessing the efficiency of the solar plant at Kempstar Mall 
in Kempton Park over the course of the coming year. Texton will assess 
the results of the project and consider potentially rolling this out at 
additional properties.

Capital management
During the second half of the financial year, Texton successfully renewed 
facilities with Standard Bank of R50,5 million for three years. The Investec 
facility of GBP19 million was renewed for an additional three years, 
split between a GBP and a ZAR facility. The HSBC facility of GBP10 million 
was successfully concluded and drawn down post year-end.

Texton has made progress on its capital management strategy of matching SA
assets with SA debt by reducing the amount of GBP facilities secured by
SA assets to GBP10 million from GBP19 million in the prior year. We continue 
to work towards a target of financing and securing all SA facilities with
SA assets and UK facilities with UK assets.

We are proactively engaging with the banks on rolling existing facilities 
well in advance of expiry and have engaged with several banks to establish
relationships to further diversify the lending portfolio.

As a result of the recognition of the PIC Put Option liability, the Group
loan-to-value ratio increased to 55,4%. This led to the breach of the loan 
to value covenant of facilities with Standard Bank, Investec and Santander. 
All three banks have condoned the breach, however, the International 
Financial Reporting Standards require that these are classified as current 
liabilities as indicated on the statement of financial position. The 
condonements are between 6 and 12 months thus no repayments are anticipated 
and the original loan maturity dates remain as disclosed below.

Debt maturity profile
South Africa
                                                Drawn down
                       Facility            Fixed         Floating* 
                          R'000            R'000            R'000
FY19                    506 549                -          477 659
FY20                    460 326                -          457 210
FY21                    399 881                -          399 881
                      1 366 756                -        1 334 750

* Partly/fully hedged by interest rate swaps.

United Kingdom
                                                Drawn down
                       Facility            Fixed         Floating* 
                          R'000            R'000            R'000
FY20                    370 335          370 335                - 
FY22                    548 274                -          548 274*
                        918 609          370 335          548 274

* Partly/fully hedged by interest rate swaps.

Interest rate swap maturity profile
                        Nominal          Nominal            Fixed 
                         amount           amount             rate
                          R'000          GBP'000                %
Expiry
16 May 2020             225 000                -             7,27
2 Nov 2020              200 000                              7,19
16 May 2021             225 000                -             7,40
30 Jun 2021             270 000                -             7,82
12 Aug 2021                   -           20 310             0,49
15 Feb 2022             200 000                -             7,31
                      1 120 000           20 310

The Board has reaffirmed the interest rate hedging strategy that at 
least 80% of borrowings must be hedged against interest rate risk. 
Texton is 82,4% hedged at 30 June 2018.

The Fund has an average cost of debt of 9,11% on its SA debt and 
3,24% on its UK debt.

Currency
The closing exchange rate at 30 June 2018 was R18,09:GBP1 (June 2017: 
R17,04:GBP1); and the average exchange rate for the year ended 
30 June 2018 was R17,29:GBP1 (June 2017: R17,26:GBP1).

Texton has hedged its currency exposure through various derivative 
instruments. It is the Board's policy to hedge the net property income 
from the UK assets for one year ahead which is in line with Texton's 
budgeting period.

Cross-currency interest rate swaps
 
                    Nominal        Nominal       Texton       Texton
                     amount         amount     receives         pays
                      R'000        GBP'000            %            %
Expiry
2 Sep 2021          600 000         30 801           11   3,18+LIBOR
27 Jan 2022         128 547          7 710           12   3,98+LIBOR
                    728 547         38 511

Put options
                            Texton         Exchange          Premium 
                              buys          rate to             paid 
                           GBP'000              GBP            R'000
Expiry
18 Dec 2018                  2 900            19,25            3 523
29 Jun 2019                  2 900            19,25            3 300

Stated capital and shares repurchased
There are 376 066 766 ordinary shares of no par value in issue (June
2017: 376 066 766). The Group holds 10 428 348 (June 2017: 10 428 348) 
treasury shares via Texton Property Fund Limited Share Incentive Scheme 
Trust. Treasury shares held by Discus House Proprietary Limited, a 
subsidiary of Texton, amount to 16 243 865 (June 2017: 15 310 276) 
shares, bringing the total treasury shares held to 26 672 213 
(June 2017: 25 738 624).

No further share buy backs were completed in the second half of the 
financial year.

The Company's share structure is in line with international best practice 
for REITs.

Prospects
Texton's portfolio is defensively positioned in both of the markets in 
which it operates, however, vacancies in the SA portfolio are expected to 
increase over the short term which will result in lower net property income 
in the 2019 financial year. The cost of tenancy continues to pose a challenge, 
with low economic growth forecast for SA and continued uncertainty around 
Brexit perpetuating a challenging operating environment for Texton. We 
continue to place significant focus on tenant retention and the filling of 
our vacancies through active asset management.

Texton aims to reduce its LTV ratio to ultimately achieve a level of 40% or 
lower. A significant portion of the proceeds from our various disposals will 
be applied to paying down facilities in order to achieve this. It is 
anticipated that the reduction will take time particularly in light of the 
R180 million fee paid to cancel the asset management contract in the 2018 
financial year.

Payment of final dividend
Notice is hereby given of the declaration of dividend number 11 of 41,36 cents 
per share for the final six-month period to 30 June 2018, bringing the total 
dividends for the year ended 30 June 2018 to 89,31 cents per share. The 
dividend was declared out of income reserves.

Changes to the Board and Company Secretary
In compliance with paragraph 3.59 of the JSE Listings Requirements, the Board 
hereby notifies its shareholders of the following changes which occurred during 
the period:
- Jacob Wiese resigned as a Non-Executive Director effective 5 April 2018;
- Kenneth Collins resigned as an Alternate Director effective 5 April 2018;
- Marius Muller was appointed on 21 May 2018 as a Non-executive Director and as 
a member of the Audit and Risk Committee and Chairman of the Investment Committee. 
On 17 September 2018, Marius was appointed interim Chief Executive Officer with 
immediate effect;
- Marcel Golding was appointed on 21 May 2018 as a Non-executive Director;
- Nqaba Sokabo resigned as Company Secretary effective 30 June 2018;
- Motif Capital Partners represented by Joel Naidoo CA(SA) was appointed as the
Company Secretary from 1 July 2018;
- Shaheeda Mia resigned as an Independent Non-executive Director and Member of 
the Audit and Risk Committee on 4 September 2018; and
- Nosiphiwo Balfour was appointed as the Chief Executive Officer on 17 July 2017 
and resigned 14 September 2018.
- Inge Pick was appointed as the Chief Financial Officer on 18 September 2017.
- Termination of CIS Company Secretaries Proprietary Limited on 11 December 2017.

Salient dates
Dividend declaration date                 Friday, 28 September 2018
Last date to trade                        Tuesday, 16 October 2018
Ex dividend date                          Wednesday, 17 October 2018
Record date                               Friday, 19 October 2018
Payment date                              Monday, 22 October 2018

Share certificates may not be dematerialised or rematerialised between
Wednesday, 17 October 2018 or Friday, 19 October 2018, both dates inclusive.

An announcement informing shareholders of the tax treatment of the dividends 
will be released on SENS on 28 September 2018.

Texton's income tax reference: 9353785158
Issued shares as at 28 September 2018: 376 066 766

Summarised consolidated statement of financial position 
as at 30 June 2018
                                     Audited        Restated*    Restated*
                                       as at           as at        as at
                                     30 June         30 June       1 July
                                        2018            2017         2016
                                       R'000           R'000        R'000
Assets
Non-current assets                 4 864 870       5 237 499    5 498 451
Investment property                4 534 810       4 836 757    4 991 066
Property, plant and equipment          1 851           2 376        2 595
Tenant installation*                  11 908          11 284        8 183
Investment in joint venture          231 302         247 906      262 938
Other non-current assets              19 370          10 319        8 027
Other financial assets                32 600          72 565      132 108
Restricted cash                       33 029          56 292       93 534
Current assets                       458 857         310 193      324 569
Restricted cash                       16 427           5 153       25 134
Trade and other receivables           56 169          35 732       38 659
Non-current assets classified
as held for sale                     272 156         100 750      133 000
Other financial assets*                6 692          10 299            - 
Income tax receivable                 13 745           3 835        3 781
Cash and cash equivalents             93 668         154 424      123 995
Total assets                       5 323 727       5 547 692    5 823 020
Equity and liabilities
Equity                             2 297 186       2 724 380    3 011 192
Stated capital                     2 257 206       2 263 137    2 321 656
Retained earnings                    254 934         731 327      791 041
Foreign currency translation
reserve                             (214 954)       (270 131)    (102 579) 
Share-based payment reserve                -              47        1 074
Liabilities                        3 026 541       2 823 312    2 811 828
Non-current liabilities              384 987       1 383 876    1 901 380
Other financial liabilities          374 289       1 365 469    1 894 259
Lease liability*                       3 395           3 454        3 506
Deferred tax                           7 303          14 953        3 615
Current liabilities                2 641 554       1 439 436      910 448
Other financial liabilities        1 898 441         720 742      215 429
PIC Put Option*                      642 570         628 967      614 338
Trade and other payables             100 543          89 727       80 681
Total equity and liabilities       5 323 727       5 547 692    5 823 020

*Refer to note 6.

Summarised consolidated statement of comprehensive income 
for the year ended 30 June 2018
                                                      Audited     Restated*
                                                      for the      for the 
                                                   year ended   year ended
                                                      30 June      30 June
                                                         2018         2017
                                                        R'000        R'000
Investment property income                            581 192      589 165
Straight-line rental adjustment                         7 721        9 664
Revenue                                               588 913      598 829
Property expenses                                    (171 925)    (158 068) 
Net property income                                   416 988      440 761
Other income                                              478        5 581
Administrative expenses                               (28 270)     (17 623) 
Loss on equity accounted joint venture                (47 452)      (1 613) 
Foreign exchange gains                                 17 304       35 711
Asset management fees                                  (6 139)     (25 610) 
Operating profit                                      352 909      437 207
Finance income                                        102 727       97 665
Finance costs                                        (167 016)    (159 520) 
Fair value adjustments                               (208 423)     (46 875) 
Capital expenses                                       (3 806)      (8 522) 
PIC Put Option recognition adjustment                 (13 603)     (14 629) 
Cancellation of asset management contract            (180 102)           -
(Loss)/profit before tax                             (117 314)     305 326
Taxation                                                  611      (14 326) 
(Loss)/profit for the year                           (116 703)     291 000
Other comprehensive income:
Items that may be reclassified to profit 
or loss: Exchange differences on translating 
foreign operations                                     55 177     (167 552) 
Total comprehensive (loss)/income for the year        (61 526)     123 448
Profit and total comprehensive (loss)/income for 
the year attributable to: Equity holders of 
the Company                                           (61 526)     123 448
Headline earnings
(Loss)/earnings attributable to shareholders         (116 703)     291 000
Revaluation of investment property                    167 578      108 450
Gross revaluation of investment property
recognised in equity accounted joint venture           42 862        3 842
Headline earnings attributable to
shareholders                                           93 737      403 292
Weighted average number of shares in issue
(’000)                                                349 812      351 633
Basic and diluted (loss)/earnings per share
(cents)                                                (33,36)       82,76
Headline and diluted earnings per share
(cents)                                                 26,80       114,70
Interim dividend per share (cents)                      47,95        47,95
Final dividend per share (cents)                        41,36        54,85

*Refer to note 6.


Summarised consolidated statement of cash flows 
for the year ended 30 June 2018
                                                      Audited     Restated*
                                                      for the      for the 
                                                   year ended   year ended
                                                      30 June      30 June
                                                         2018         2017
                                                        R'000        R'000
Cash flows from operating activities
Cash generated from operations (note 3)               199 960      554 858
Finance income received                                84 050       72 745
Finance costs paid                                   (152 530)    (144 468) 
Dividends paid                                       (359 690)    (350 714) 
Income tax paid                                       (17 026)      (3 047) 
Net cash (outflow)/inflow from operating activities  (245 236)     129 374
Cash flows from investing activities
Additions to property, plant and equipment               (515)      (8 232) 
Additions to investment property                      (19 488)      (6 841) 
Proceeds on disposal of investment property            87 250      163 400
Additions to other non-current assets                       -       (5 545)
Acquisition of business combination net of
cash acquired                                               -     (282 692) 
Loans advanced to joint venture                             -      (16 345) 
Repayments from joint venture                           2 923       13 191
Loans repaid                                              272            - 
Letting commission paid                                (2 910)           - 
Costs and deposit paid for Equites acquisition        (10 128)           - 
Tenant installation incurred                           (5 321)           - 
Net cash inflow/(outflow) from investing activities    52 083     (143 064) 
Cash flows from financing activities
Treasury shares acquired                               (5 931)     (58 519) 
Premiums paid on hedging instruments                   (6 823)     (11 681) 
Proceeds from other financial liabilities             721 822      851 745
Settlement of lease liability                            (472)           -
Repayments of other financial liabilities            (593 353)    (772 835) 
Net cash inflow from financing activities             115 243        8 710
Decrease in cash and cash equivalents                 (77 910)      (4 980) 
Cash and cash equivalents at the beginning
of the year                                           154 424      123 995
Effect of exchange rate movement on cash
and cash equivalents                                    5 165       (6 945) 
Release of restricted cash                             11 989       42 354
Cash and cash equivalents at the end of the year       93 668      154 424

*Refer to note 6.

Summarised consolidated statement of changes in equity 
for the year ended 30 June 2018
                                     Foreign
                                    currency   Share- 
                                      trans-    based
                             Stated   lation  payment  Retained
                            capital  reserve  reserve  earnings       Total
Audited                       R'000    R'000    R'000     R'000       R'000
Balance previously
reported                  2 906 923 (102 579)   1 074   788 906   3 594 324
PIC Put Option liability 
raised and
lease liability            (585 267)                      2 135    (583 132) 
Restated* balance at
30 June 2016              2 321 656 (102 579)   1 074   791 041   3 011 192
Treasury shares acquired    (58 519)                                (58 519) 
Share-based payments 
transaction                                    (1 027)               (1 027) 
Total comprehensive income
for the year                                            291 000     291 000
- Profit for the year
- Exchange differences 
on translation of foreign
operations                          (167 552)                      (167 552)
Transactions with 
shareholders recognised
directly in equity                                                        -
- Dividend paid                                        (350 714)   (350 714) 
Balance at
30 June 2017              2 263 137 (270 131)      47   731 327   2 724 380
Treasury shares
acquired                     (5 931)                                 (5 931)
Elimination of share-based 
payments reserve on transfer 
of liability to new share
incentive scheme                                  (47)                  (47) 
Total comprehensive income
for the year                                           (116 703)   (116 703)
- Loss for the year
- Exchange differences on 
translation of foreign
operations                            55 177                         55 177
Transactions with 
shareholders recognised
directly in equity                                                        -
- Dividend paid                                         (359 690)  (359 690) 
Balance at
30 June 2018              2 257 206 (214 954)       -    254 934   2 297 186

*Refer to note 6.

Preparation, accounting policies and audit opinion
1. Basis of preparation
The summary consolidated financial statements have been derived from 
the audited consolidated financial statements. The Directors of the 
Company take responsibility for the preparation of the summary
consolidated financial statements and that the financial information
has been correctly derived and are consistent in all material respects
with the underlying audited consolidated financial statements.

The summary consolidated financial statements are prepared in 
accordance with the requirements of the JSE Limited Listings Requirements,
the requirements of the Companies Act of South Africa, the measurement and
recognitionrequirements of International Financial Reporting Standards 
(“IFRS”) and the SAICA Financial Reporting Guides as issued by the Accounting 
Practices Committee and the Financial Reporting 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.

The accounting policies applied in the preparation of the consolidated 
audited financial statements from which the summary audited consolidated 
financial statements were derived are in terms of IFRS and are consistent 
with those applied in the previous consolidated annual financial 
statements. None of the new standards, interpretations and amendments 
effective as of 1 July 2017 have had material impact on the condensed 
consolidated audited annual financial statements.

These summary consolidated audited financial statements have been prepared 
on a going concern basis, however, we draw your attention to note 10.

All monetary information is presented in the functional currency of the Company, 
being South African Rand and is rounded to the nearest thousand (R'000).

2. Preparation of the summary consolidated audited financial statements 
These summary consolidated financial statements for the year ended 30 June 2018 
have been prepared under the supervision of the Chief Financial Officer, 
Ms Inge Pick CA(SA). The summary consolidated financial statements for the year 
ended 30 June 2018 have been audited by SizweNtsalubaGobodo Grant Thornton Inc.,
who expressed an unmodified opinion thereon. The Auditor also expressed an 
unmodified opinion on the audited consolidated financial statements from which 
these summary audited consolidated financial statements were derived, which 
includes an emphasis of matter paragraph for the going concern matters and 
reportable irregularity paragraph:

Material uncertainty relating to going concern
We draw your attention to Note 10 on Going Concern which describes the 
entity's liquidity position indicating the entity had current liabilities 
of R2 641,6 million (2017: R1 439,4 million) and current assets of
R459,0 million (2017: 310,2 million). Note 10 indicates that these conditions, 
along with other matters, indicate the existence of a material uncertainty 
which may cast significant doubt on the company's ability to continue as a 
going concern. Our opinion is not qualified in respect of this matter.

Compliance with laws and regulations
Texton Property Fund Limited did not submit its annual tax return for the 
2016 and 2017 years as required in terms of section 25 of the Tax 
Administration Act, read with section 66(1) of the Income Tax Act. A second 
report was submitted to the Independent Regulatory Board of
Auditors indicating that the reportable irregularity was no longer
taking place and that adequate steps had been taken for the prevention or 
recovery of any loss as a result thereof.

The opinion does not necessarily report on all of the information in 
this announcement. Shareholders are therefore 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 from Texton's registered address.
A copy of the Auditor's report on the consolidated financial statements
is available for inspection at the Company's registered office, together
with the financial statements identified in the Auditor's report.

Financial instruments and investment property fair value disclosure The 
Group's investment properties are valued internally using the capitalisation 
of net income method at interim reporting periods and externally by an 
independent valuer for year-end reporting.

The Group's investment properties were externally valued by an independent 
valuer. In terms of IAS 40: Investment Property and IFRS 7: Financial 
Instruments: Disclosure, investment properties are measured
at fair value and are categorised as level 3 investments.

The revaluation of investment property requires judgement in the determination 
of future cash flows from leases and an appropriate capitalisation rate which 
varies between 6,59% and 9,21%.

Changes in the capitalisation rate attributable to changes in market conditions 
can have a significant impact on property valuations. An increase in the 
capitalisation rate of 0,5% (2017: 0,5%) will decrease the value of the 
portfolio by R31,8 million (2017: R170,0 million) and a 0,5% (2017: 0,5%) 
decrease will result in an increase of R32,2 million (2017: R189,1 million).

In terms of IAS 39: Financial Instruments: Recognition and Measurement
and IFRS 7, the Group's currency and interest rate derivatives are measured 
at fair value through profit or loss and are categorised as level 2 investments. 
The fair value of the currency derivatives was an asset of R32,6 million 
(June 2017: R82,9 million) and the fair value of the interest rate derivative 
net asset was R7,0 million (June 2017: net liability R1,8 million). These fair 
values were determined using valuation techniques that present value the net 
cash flows. These cash flows are based on observable market data.

The fair values of all financial instruments, interest rate swaps and fixed 
rate financial liabilities are substantially the same as the
carrying amounts reflected on the statement of financial position.

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.

The Board is not aware of any matters or circumstances arising subsequent to 
June 2018 that require any additional disclosure or adjustment to
the financial statements, other than the discussed in note 5.

3. Cash generated from operations
                                                    Audited      Restated*
                                                    for the       for the 
                                                 year ended    year ended
                                                    30 June       30 June
                                                       2018          2017
                                                      R'000         R'000
Cash generated by operations 
(Loss)/profit before tax                           (117 314)      305 326
Adjusted for:
Amortisation and depreciation                         9 277         7 613
Impairment allowance                                  1 772         1 239
Loss from joint venture                              47 452         1 613
Finance income                                     (102 727)      (97 665) 
Straight-line adjustment                             (7 721)       (9 664) 
Finance costs                                       167 016       159 520
Fair value adjustments                              207 761       167 968
Share-based payment expense                             662        (1 027) 
PIC Put Option recognition adjustment                13 603        14 629
Unrealised foreign exchange (gains)/loss             (6 700)      (21 350) 
Assets scrapped                                         111             - 
Cash generated before working capital changes       213 192       528 202
Changes in working capital:
- Increase/(decrease) in trade and other receivable (21 625)        7 334
- Increase in trade and other payables                8 393        19 322
Cash generated by operations                        199 960       554 858

* Refer to note 6.

4. Related party transactions
Hermanstad Electricity Agreement
A service agreement was entered into in December 2015 between Texton, the 
trustees of the Nooitgedacht Family Trust, Chick Legh and Kuper Legh Property 
Management Proprietary Limited. This agreement entitled Chick Legh and the 
Nooitgedacht Family Trust, of which Thys van Heerden is a trustee and 
beneficiary, to retain a percentage of the monthly electricity recovery 
invoiced to tenants of the Hermanstad property. This amount was earned for 
services provided by Nooitgedacht Family Trust and Chick Legh whereby they 
would obtain the municipal statements relating to electricity consumption, 
pay the amount over to the municipality on Texton's behalf, allocate the
consumption to tenants using the reports from the requisite service provider 
and provide such amounts to Kuper Legh Property Management Proprietary Limited 
for electricity recovery from tenants. This is a related party transaction as 
Thys van Heerden and Chick Legh are directors of Texton Property Fund Limited 
and Kuper Legh Property Management Proprietary Limited as well as beneficiaries 
of the contract in their personal capacities.

                                   Audited      Restated*      Restated*
                                     as at         as at          as at
                                   30 June       30 June         1 July
                                      2018          2017           2016
                                         R             R              R 
JA Legh                            138 093       120 966        377 143
Nooitgedacht Family Trust          138 093       120 966        377 143
                                   276 186       241 932        754 286
5. Post balance sheet events
PIC Put Option
To meet the Company's transformation and empowerment objectives, Texton 
entered into the BEE transaction in 2015. The transaction aimed to provide 
a competitive advantage to Texton in the execution of its stated strategy, 
which included leveraging Texton's BEE status to retain and attract government 
and national tenants. At the time of the transaction, the South African 
government was Texton's single largest tenant, occupying approximately 20% 
of Texton's total gross lettable area. This has been significantly reduced 
over time.

The BEE transaction was structured such that BEE SPV acquired 51 858 876
Texton shares using funding from GEPF. Texton entered into a Subscription 
and Relationship Agreement and the PIC Put Option Agreement, as revised. In 
the event of a default, which includes a breach of the loan covenants, PIC 
is obliged to first place BEE SPV in breach and to give BEE SPV 15 business 
days to remedy such breach. Should the breach remain unremedied, then the 
PIC (acting on behalf of GEPF) may exercise the cession and pledge of 
Texton shares granted to it BEE SPV and, with Texton's approval, which may 
not unreasonably be delayed or withheld, PIC shall sell the Texton shares 
held by BEE SPV. If both of these courses of action do not result
in the full repayment of the outstanding balance of the loan, then the
PIC may exercise the PIC Put Option.

The exercise of the PIC Put Option is subject to compliance with the Companies 
Act and JSE Listings Requirements. The PIC Put Option is considered a specific 
repurchase of shares in terms of the JSE Listings Requirements and, as such,
would be subject to a fairness opinion (if, at the time, PIC constitutes a 
related party for purposes of the JSE Listings Requirements) and authorisation 
by shareholders by way of a special resolution.

The exercise of the PIC Put Option is also subject to the Board of Directors 
being satisfied that Texton would pass the solvency and liquidity test after 
payment of the amount to PIC pursuant to the exercise of the PIC Put Option.
On 22 August 2018, Texton received a letter from the Public Investment Corporation 
("PIC") on behalf of the Government Employees Pension Fund ("GEPF") notifying 
Texton Broad-Based Empowerment Proprietary Limited ("BEE SPV") that a default 
event had occurred and that BEE SPV had 15 working days to remedy the breach.

A cautionary announcement was released on 23 August 2018 setting out the steps 
per the Amended and Restated Put Option Agreement between GEPF and Texton, in 
the event that the breach was not remedied within the time period.

As per the updated cautionary announcement on 13 September 2018, the PIC has 
exercised the Put Option. This matter is subject to shareholder approval via 
special resolution and further communication will follow in this regard. Per 
the Put Option Agreement settlement is due within 90 days of receipt of the 
exercise notice, subject to compliance with the Companies Act and JSE Listings 
Requirements and any other regulatory approvals required.

A liability of R642,6 million was recognised at 30 June 2018 in accordance 
with IFRS.

The PIC Put Option recognition adjustment relates to an adjustment to the amount 
Texton is required to pay for the shares due to a further default by BEE SPV. 
In accordance with IAS 32, this liability is for the repurchase of shares, 
however, the change in value is not as a result of a change in the net present 
value thus is not recognised as a finance cost.

Dividend declaration
Dividend of 41,36 cents per share has been declared post year end.

6. Restatements
6.1 Prior period error
Shareholders are advised that the Company's financial results for the year 
ended 30 June 2017, have been restated as follows:

                                  Previously
                                    reported                  Restated
                                     30 June                   30 June
                                        2017  Adjustment          2017
                                       R'000       R'000         R'000
Statement of financial position
Finance lease liability(1)           (35 427)     31 973        (3 454) 
Stated capital(2)                 (2 848 404)    585 267    (2 263 137) 
PIC Put option liability(2)                -    (628 967)     (628 967) 
                                  (2 883 831)    (11 457)   (2 895 558)
Retained earnings (1)(2)            (743 054)     11 727      (731 327) 
Impact on equity                    (743 054)     11 727      (731 327)

Statement of comprehensive income
Fair value adjustment (1)            (47 642)        767       (46 875)
PIC Put option recognition
adjustment (2)                             -     (14 629)      (14 629) 
Profit before taxation               319 188     (13 862)      305 326
Profit for the year                  304 862     (13 862)      291 000
Total comprehensive
(loss)/profit for the year           137 310     (13 862)      123 448
Impact on earnings per share
Basic and diluted earnings per share   86,70       (3,94)        82,76
Headline and diluted earnings
per share                             117,54       (2,84)       114,70(3)


                                  Previously
                                    reported                  Restated
                                     30 June                   30 June
                                        2016  Adjustment          2016
                                       R'000       R'000         R'000
Finance lease liability(1)           (34 712)     31 206        (3 506) 
Stated capital(2)                 (2 906 923)    585 267    (2 321 656) 
PIC Put option liability(2)                -    (614 338)     (614 338) 
                                  (2 941 635)      2 135    (2 939 500)
Retained earnings (1)(2)            (788 906)     (2 135)     (791 041) 
Impact on equity                    (788 906)     (2 135)     (791 041)


Statement of comprehensive income
Fair value adjustments (1)           (37 430)     26 336       (11 094) 
PIC Put option recognition
adjustment (2)                             -     (17 977)      (17 977) 
Profit before taxation               323 892     (29 071)      294 821
Profit for the year                  323 892     (29 071)      294 821
Total comprehensive
(loss)/profit for the year           212 090     (29 071)      183 019
Impact on earnings per share
Basic and diluted earnings per share
Headline and diluted earnings per share

(1) The lease liability for Woodmead Commercial Park has been restated due 
to a prior year error. Contingent rentals were erroneously included in the 
calculation of the lease liability resulting in an overstatement of the 
liability by R32,0 million. The lease liability was inherited when the 
property was purchased in 2014 and is a land lease.
(2) A liability of R629,0 million was raised for the PIC Put Option. Texton 
entered into the Put Option Agreement in 2015. The exercise of the Put 
Option by the PIC gave rise to a contractual liability under IAS 32
as Texton does not have an unconditional right to avoid paying cash. This 
led to the raising of the liability and the restatement of the prior year 
financial statements. Refer to note 5 for more details. In the prior year 
this amount was not recognised based on judgements made by management which 
took into account external accounting and legal opinions. During
the current year, after a further review of the judgements used in 
accounting for the liability it was recognised as a prior period error. 
(3) Headline earnings has been restated due to a prior year error. 
Revaluation of investment property relating to the equity-accounted joint
venture was erroneously excluded from the calculation of headline earnings, 
resulting in an understatement of R3,842 million. Due to the above error
the headline earnings per share was also incorrectly calculated.

6.2 Reclassification of assets and liabilities
Following a review of assets and liabilities disclosed in the Group statement 
of financial position during the current financial year, the assets and 
liabilities detailed below have been disclosed separately in the comparable 
financial year to present the assets and liabilities in accordance with 
the classification applied in the current year.

Tenant installation
Tenant installation of R11,2 million that was previously disclosed under 
Property, plant and equipment, has now been separately disclosed on the 
statement of financial position as a separate asset.

Currency put option
The currency put option asset of R10,2 million that was previously included 
in Trade and other receivables has now been separately disclosed in the 
statement of financial position under Other financial assets.

Lease liability
The lease liability R3,5 million* that was previously included in other 
financial liabilities, has now been separately disclosed on the statement of 
financial position as a separate liability.

* Restated amount as per note 6.1.



7. Segmental analysis
                                                  South Africa 
                                              Audited       Restated 
                                              for the        for the
                                           year ended     year ended
                                              30 June        30 June
                                                 2018           2017
                                                R'000          R'000
Segmental revenue - rental revenue
Office                                        351 336        365 844
Retail                                         74 397         70 326
Industrial                                     46 993         51 341
                                              472 726        487 511
Profit before tax
Office                                        170 493        177 427
Retail                                         42 982         25 076
Industrial                                     14 739         25 218
Corporate                                    (310 465)        71 912
                                              (82 251)       299 633
Total assets
Office                                      2 541 199      2 632 492
Retail                                        474 328        478 738
Industrial                                    293 825        343 671
Corporate                                      85 957        411 987
                                            3 395 309      3 866 888

                                                       UK
                                              Audited       Restated 
                                              for the        for the 
                                           year ended     year ended
                                              30 June        30 June
                                                 2018           2017
                                                R'000          R'000
Segmental revenue - rental revenue
Office                                         55 104         51 507
Retail                                         25 297         25 237
Industrial                                     35 786         34 574
                                              116 187        111 318
Profit before tax
Office                                         (5 007)       (33 303) 
Retail                                        (95 211)         9 159
Industrial                                     49 162         29 837
Corporate                                      15 993              - 
                                              (35 063)         5 693
Total assets
Office                                        736 784        736 125
Retail                                        576 524        385 725
Industrial                                    614 383        558 954
Corporate                                         727              -
                                            1 928 418      1 680 804

                                                      Total
                                              Audited       Restated 
                                              for the        for the 
                                           year ended     year ended
                                              30 June        30 June
                                                 2018           2017
                                                R'000          R'000
Segmental revenue - rental revenue
Office                                        406 440        417 351
Retail                                         99 694         95 563
Industrial                                     82 779         85 915
                                              588 913        598 829
Profit before tax
Office                                        165 486        144 124
Retail                                        (52 229)        34 235
Industrial                                     63 901         55 055
Corporate                                    (294 472)        71 912 
                                             (117 314)       305 326
Total assets
Office                                      3 277 983      3 368 617
Retail                                      1 050 852        864 463
Industrial                                    908 202        902 625
Corporate                                      86 684        411 987
                                            5 323 721      5 547 692

8. Summary of financial performance
                                              Audited       Restated 
                                              for the        for the 
                                           year ended     year ended
                                              30 June        30 June
                                                 2018           2017
Shares in issue and used for dividend
calculation ('000)                            349 395        350 328
Weighted average number of shares in
issue ('000)                                  349 812        351 633
Net asset value per share (cents)              657,48         777,67
Net tangible asset value less deferred tax
per share (cents)                              659,57         781,93
Basic and diluted (loss)/earnings per
share (cents)                                  (33,36)         82,76
Headline and diluted earnings per
share (cents)                                   26,80         114,70
Dividend per share (cents)                      89,31         102,80
Share price (cents)                            605,00         790,00
Loan-to-value ratio*                            55,4%          53,1% 
Loan-to-value ratio excluding PIC Put
Option liability                                42,7%          40,8% 
IFRS
Gross property cost to income ratio             29,6%          25,7% 
Net property cost to income ratio               14,6%           9,1% 
Gross total cost to income ratio                36,3%          28,4% 
Net total cost to income ratio                  22,7%          15,7%

* The loan-to-value ratio is calculated by dividing total liabilities 
by the total property assets and investment in joint venture.

9. Distributable earnings
                                              Audited       Restated
                                              for the        for the 
                                           year ended     year ended
                                              30 June        30 June
                                                 2018           2017
                                                R'000          R'000
Revenue                                       581 192        589 165
Property expenses                            (171 925)      (158 068) 
Loss from joint venture                       (47 452)        (1 613) 
Non-cash items included in loss from
joint venture                                  44 740          5 217
Other income                                      478          5 581
Administrative expenses                       (28 270)       (17 623) 
Asset management fees                          (6 139)       (25 610) 
Net finance cost                              (64 289)       (58 801)
- Finance income                              102 727         97 665
- Finance cost                               (167 016)      (159 520)
- Amortisation of structuring fees*                 -          3 054
Taxation                                       (7 039)             -
Distribution of realised forex                 10 604         22 586
Dividends on treasury shares                   23 982         25 767
Total distribution                            335 882        386 601
Less: Distribution to
shareholders (interim)                       (180 324)      (180 324)
Available for distribution (final)            155 558        206 277

* Following adoption of the SA REIT Best Practice Recommendations this 
item will no longer be added back for distribution purposes.

10. Going concern
There are a number of factors that may result in uncertainties regarding 
the going concern assumption for the Group as it may not be able to realise 
its assets and discharge its liabilities in the normal course of business.

The Group's cash resources at 30 June 2018 total R93,8 million and are 
presently not considered adequate to meet the Group's current obligations 
for the foreseeable future in the event that shareholders vote in favour 
of the repurchase of shares in terms of the PIC Put Option.

Availability of funding for the group's activities
A current facility of R466 million expires in March 2019. Management has 
engaged with the banks regarding the renewal of this facility. The refinancing 
is subject to the following:
- The Covenant is restored to the level as set out in the facility agreement
- The satisfactory completion of due diligence procedures which are customary 
when reviewing a refinancing transaction
- Obtaining all internal credit approvals
- Being satisfied with the underlying collateral that is presented in support 
of the refinancing
- Legal documentation being entered into in a form and substance acceptable 
to the lender

Outcome of PIC Put Option vote
As noted above Texton will seek approval from shareholders regarding the 
repurchase of shares in terms of the PIC Put option.

In the event that shareholders pass the resolution approving the
repurchase of shares this will result in a cash outflow and the breach of the 
conditions of condonements provided by the banks.

As discussed in note 5, Texton entered into the PIC Put Option in 2015 as security 
for the loan given by GEPF to BEE SPV to acquire shares in Texton. The PIC Put 
Option agreement sets out the steps should BEE SPV default and these steps have 
been followed ending in the PIC exercising the PIC Put Option on 13 September 
2018. The PIC Put Option agreement requires that Texton repurchases the PIC Put 
Option shares for the outstanding loan balance, which is R642,6 million. The 
repurchase is subject to compliance with the JSE Listings Requirements relating 
to specific share repurchases and the Companies Act. In the context, the PIC 
Put Option is a specific repurchase of Texton shares by Texton from a related 
party which requires:

(i) a statement of solvency and liquidity after the share repurchase. Factually, 
the solvency and liquidity test will not be met;
(ii) a fairness statement by the directors of Texton, supported by an independent 
fairness opinion; and
(iii) approval by the shareholders of Texton by way of a special resolution.

In addition to the above, and if the requirements set out above have been met, 
there has to be further compliance with section 48 of the Companies Act to the fact 
that immediately after the share repurchase Texton will meet the solvency and 
liquidity test required by section 46 of the Companies Act. As indicated above, 
Texton will not meet this requirement.

As a result of IAS 32 Texton has raised the liability in its financial statements 
for the full amount as a current liability. It is anticipated that Texton will 
not meet the requirements of the JSE Listings Requirements and the Companies Act 
and will thus not be in a position to repurchase the shares put to Texton by 
the PIC.

Notwithstanding, Texton is pursuing the steps to seek shareholder approval. If 
approval is not obtained by Texton, Texton has been advised by senior counsel that 
the PIC Put Option falls away and is of no further force and effect.

Texton's facilities with Santander, Standard Bank and Investec contain a number 
of covenants including the requirement for the group LTV to be a maximum of 50%. 
Due to the inclusion of the PIC Put Option liability at 30 June 2018, Texton's 
group LTV is at 55,4% and a breach of the loan covenant has occurred. This has 
resulted in the facilities being classified as current liabilities at 30 June 2018. 
Texton has engaged with the three banks and obtained condonements of the breaches 
for periods of between 6 and 12 months, subject to the outcome of the vote on the 
special resolution authorising the specific repurchase of shares in terms of the 
PIC Put Option. Texton's engagements with the banks regarding their position post 
the shareholder vote has been positive as the uncertainty regarding this liability 
would be removed. It should be noted that, should shareholders vote in favour of 
the special resolution, the PIC Put Option Agreement states that Texton would be 
liable but would only be required to settle the liability when it met the solvency 
and liquidity requirements to do so.

Distribution of integrated annual report and notice of annual general meeting 
Shareholders are advised that the integrated annual report for the year ended 
30 June 2018, has been distributed to shareholders today and is available on the 
Company’s website, http://www.texton.co.za/company-information/REPORTS-PUBLICATIONS

Notice is hereby given that the annual general meeting of shareholders of Texton 
will be held at 14:00 on Tuesday, 27 November 2018 at the registered office of 
Texton, Block C, Investment Place, 10th Road, Hyde Park, to consider and, if deemed 
fit, to pass with or without modification, the business stated in the notice of the 
annual general meeting, which is contained in the integrated annual report.

The board of directors of the Company determined that, in terms of section 62(3)(a), 
as read with section 59 of the Companies Act, 2008 (Act 71 of 2008), as amended, the 
record date for the purposes of determining which shareholders of the Company are 
entitled to participate in and vote at the annual general meeting is Friday, 
16 November 2018. Accordingly, the last day to trade Texton shares in order to be 
recorded in the securities register of the Company in order to be entitled to vote 
will be Tuesday, 13 November 2018.

30 October 2018
Johannesburg

Corporate information
Texton Property Fund Limited
Incorporated in the Republic of South Africa
Registration number: 2005/019302/06
A Real Estate Investment Trust listed on the JSE Limited
JSE share code: TEX ISIN: ZAE000190542
Formerly ISIN: ZAE000185872

Physical and registered address
Block C, Investment Place
10th Road, Hyde Park 2196
PO Box 653129, Benmore 2010

Board of directors
PD Naidoo (Chairperson)
NV Balfour*# (Chief Executive Officer)
IF Pick* (Chief Financial Officer) 
JR Macey (Lead Independent)
M Golding
JA Legh
MH Muller*& (Interim Chief Executive Officer)
P Ntshalintshali
MJ van Heerden
TMZ Zuma

* Executive director
# Resigned as Chief Executive Officer on 14 September 2018
& Appointed as Interim Chief Executive Officer on 17 September 2018

Company secretary
Motif Capital Partners Suite 11,
2nd Floor Melrose Boulevard Melrose Arch 2193

Auditor
SizweNtsalobaGobodo Grant Thornton Inc.
20 Morris Street East, Woodmead 2191

Sponsor
Merchantec Capital
2nd Floor North Block
Hyde Park Office Tower
Cnr 6th Road and Jan Smuts Avenue
Hyde Park 2196
PO Box 41480, Craighall 2024

Transfer secretary
Computershare Investor Services
Proprietary Limited
Rosebank Towers, 15 Biermann Avenue
Rosebank 2196
PO Box 61051, Marshalltown 2107

Investor relations
FabNature
102 Taronga Road Rondebosch 
East Cape Town 7780

Date: 30/10/2018 09:52:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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