Resilient Reit stays committed to dividends

Despite the weakness of the South African economy and global impact of Covid-19, mall owner Resilient says it is on track to pay a dividend for the year to June thanks to its diversified investments.

Resilient, which is led by CEO Des de Beer, owns a portfolio of 28 SA retail centres worth about R24bn. In November, it gave guidance of about 5% growth in dividends per share for its 2020 financial year to June.

For its 2019 financial year to June it paid total dividends worth 531.06c per share. This was 6.08% lower than the 565.44c per share declared for the year to June 2018.

Resilient also owns stakes in European retail landlord Lighthouse Capital and East European mall owner Nepi Rockcastle. Nepi Rockcastle is the largest retail landlord in central and eastern Europe.

“The board confirms its intention to continue to declare and pay dividends in line with the principles applied in the past. The group will receive a dividend of R43m from Lighthouse Capital on May 25 2020,” Resilient said in a statement on the JSE’s stock exchange news service on Friday.

The group’s distributable earnings for the six months to June 2020 will include any dividend declared by Nepi Rockcastle for its 2020 interim period.

As the company has withdrawn its 2020 earnings guidance, Resilient will delay the publication of its annual results to August 26, which is after Nepi Rockcastle is scheduled to announce its interim results.

Rental payments

Resilient also said it is managing its exposure to national retailer Edcon.

Edcon was up to date with rental payments before the lockdown.

As stated in its interim results, from April 2019 Resilient has only included 59.1% of the basic rental received from Edgars, Edgars Beauty, Mac and Jet in its distributable earnings.

At end-December 2019, Resilient impaired by 50% the value of its investment in Edcon and a forward contract to receive further shares.

“In light of the recent announcement by Edcon of its intention to file for voluntary business rescue the group will fully impair the remaining balances at the end of June 2020 worth approximately R46m,” it said.

Resilient said it has been interacting with tenants, directly and through the Property Industry Group, which is representing property landlords and shopping centres during the Covid-19 pandemic.

“Resilient’s position is that the burden resulting from the lockdown should be equitably borne by all parties,” it said.

In line with management’s expectations, Resilient’s non-metropolitan shopping centres were trading better than those in metropolitan areas, because there was a higher percentage of essential-goods retailers in non-metropolitan centres.

These centres would also benefit from increased social spending.