Vukile Property Fund has reported an increase in funds from operations (FFO) per share as well as a larger dividend for the year to end-March.
FFO per share, which is used by real estate and other investment trusts to define the cash flow from trust operations, rose 6.7% to 154.2c for the year to end-March. It declared a final dividend of 72.1c, taking the total dividend to 124.2c, up 10.5% from the previous year.
The total dividend of R1.3bn was fully covered by cash from operations of R2.2bn, it said in a statement on Wednesday.
The group, which has operations in SA and Spain, increased gross property revenue by 11.8% to R4bn, but profit for the year attributable to the owners was down 17.9% to R1.59bn.
Headline earnings per share (HEPS) declined 2.5% to 131.34c.
Vukile’s SA portfolio reported like-for-like retail net operating income (NOI) growth of 5.4%, with vacancies reduced to 1.9%.
Rental reversions increased to 2.9% from 2.3% previously, while its like-for-like retail portfolio value increased by 5.8%.
Its Castellana portfolio in Spain reported normalised NOI growth of 11%, with negligible vacancies at 1.1%. It reported positive reversions of 9.7%, while 95% of retail space is let to international and national tenants.
Vukile ended the year with significant available cash balances of R2.4bn and undrawn debt facilities of R2.9bn. Its loan to value reduced to 40.7%.
In the period, the group raised R1.7bn from new share issuances and secured a R1.1bn green loan and sustainability linked funding post year-end.
“Coming off the back of an exceptionally strong year, Vukile remains on track to deliver further growth for our shareholders,” it said.
The SA market had been characterised by uncertainty in the lead up to the election, while the global environment was starting to see green shoots, as markets expected the start of an interest rate cutting cycle in the short to medium term, it said.
“While we see a significant increase in deal flow in the sector, the biggest challenge facing the industry, and Vukile, at this stage is access to capital at an appropriate cost to make deals accretive,” it said.
Given Vukile’s strong liquidity position, it said it is well-positioned to execute on its growth strategy, while remaining a consumer-focused retail real estate business.
“Though we will offer shareholders the option of a dividend reinvestment plan for the FY24 final dividend, we do not plan that the DRIP will become a permanent feature of our funding strategy,” it said.
Instead, a reinvestment plan would be used to assist with optimal capital allocation, when Vukile saw potential for accretive deals.
For the year to end-March 2025, it expected to deliver growth in FFO per share of 2%-4% and growth in dividend per share of 4%-6%, it said.
This would equate to FFO per share of 157.3c-160.4c and a full-year dividend per share of 129.2c-131.9c to be paid with an interim and a final dividend.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.