Source - DGAP Regulatory

Grit Real Estate Income Group (GR1T)
Abridged unaudited interim results 31/12/2023

28-Feb-2024 / 07:00 GMT/BST


GRIT REAL ESTATE INCOME GROUP LIMITED

(Registered in Guernsey)

(Registration number: 68739)

LSE share code: GR1T

SEM share codes (dual currency trading): DEL.N0000 (USD) / DEL.C0000 (MUR)

ISIN: GG00BMDHST63

LEI: 21380084LCGHJRS8CN05

("Grit" or the "Company" or the "Group")

 

 

 

 

ABRIDGED UNAUDITED CONSOLIDATED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2023

 

Grit Real Estate Income Group Limited, a leading Pan-African real estate company focused on investing in, developing and actively managing a diversified portfolio of assets underpinned by predominantly US Dollar and Euro denominated long-term leases with high quality multi-national tenants, today announces its results for the six months ended 31 December 2023.

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

“Grit’s strategy continues to focus on quality real estate assets with strong ESG credentials and long leases in hard currency to a resilient and diverse multinational customer base across the African continent. Evidence of the Grit 2.0 strategy and asset recycling, away from non-core sectors and into resilient and impact focused real estate, is increasingly becoming visible in our results and is expected to accelerate in the coming years. We are delivering on our cost control targets and are demonstrating disciplined capital allocation through our debt reduction targets and selected risk mitigated development opportunities and are today pleased to announce the resumption of dividends paid from cash operating earnings.”

Financial and Portfolio highlights

 

6 Months ended

31 Dec 2023

6 Months ended

31 Dec 2022

Increase/ Decrease

Adjusted EPRA earnings per share2

US$1.03 cps

US$1.02 cps

+1.0%

Distributable earnings per share1

US$2.07 cps

US$2.56 cps

-19.1%

Dividend per share

US$1.50 cps

US$2.00 cps

-25.0%

Property portfolio net operating income from continuing operations (proportionate9)

US$29.7m

US$25.7m

+15.6%

EPRA cost ratio (including associates) 3

14.5%

12.7%

+1.8 ppts

Net finance costs

US$18.2m

US$16.5m

+10.3%

Revenue earned from multinational tenants7

79.0%

85.9%

-6.9 ppts

Income produced in hard currency8

95.0%

92.4%

+2.6 ppts

 

As at 31 Dec 2023

As at 30 Jun 2023

Increase/ Decrease

EPRA NRV per share2

US$68.1 cps

US$72.8 cps

-6.4%

Group LTV

47.6%

44.8%

+2.8 ppts

Total Income Producing Assets4

US$847.9m

US$862.0m

-1.6%

Contractual rental collected

93.9%

108.4%

-14.5 ppts

WALE5

4.7 years

4.4 years

+0.3 years

EPRA portfolio occupancy rate6

95.5%

93.6%

+1.9 ppts

Grit proportionately owned lettable area (“GLA”)

301,306m2

298,962m2

+2,344m2

Weighted average annual contracted rent escalations

3.1%

3.0%

+0.1 ppts

 

 

Summarised results commentary:

The Board is pleased to announce the resumption of the payment of dividends and has today declared US$1.50 cents per share ordinary dividend from cash operating earnings (Distributable earnings).

We benefit from having built a business focused on quality real estate assets with strong ESG credentials and long leases to a resilient and diverse customer base that comprises more than 79% of strong multinational and investment grade tenants. Contractual lease escalations, which are predominantly inflation-linked, and new assets producing income, have contributed to growth in NOI in this reporting period and into the future. We now have 33 assets across 7 sectors with 95.0% of our leases in hard currency providing a strong foundation to our income generation and a resilient platform from which to pursue growth opportunities through active management, sector focused development substructures and external revenue generation from our professional services.

 

For the purposes of these interim financials, Gateway Real Estate Africa Limited (“GREA”) and Africa Property Development Managers Limited (“APDM”) have been accounted for as joint ventures. Post recent amendments to the shareholders’ agreements, which now result in Grit exercising control over both GREA and APDM, the Board considers 1 January 2024 the most appropriate date to commence consolidation.

 

 

EPRA net reinstatement value (“NRV”) per share of US$68.1 cents per share (30 June 2023: US$72.8 cents per share), is predominantly driven by a -2.7% fair value adjustment made on investment properties during the period, which was partially offset by increased capex and asset investment. This culminated in an overall decrease of 1.0% in the group’s proportionate share of property values (including GREA associates).

Property portfolio net operating income (Grit proportionate ownership) increased 0.6%. Excluding the impact of disposals (Beachcomber and LLR from the prior year), NOI from continuing operations increased 15.6% and the Grit 2.0 recycling strategy is becoming increasingly evident within the composition of Group NOI. Diplomatic housing, healthcare and data centre segments have replaced earnings disposed of in the hospitality segment.  

 

Group Administrative costs reduced 15.4% in the six months to 31 December 2023 and remains on track to achieve the US$4.0 million cost reduction target (-19%) for the full year to 30 June 2024.

 

 

Group WACD increased to 9.62%, resulting in a US$1.5 million increase (+8.2%) in finance costs for the six-month period. The Group has interest rate hedges amounting to US$200 million worth of notional debt.  In addition, the Company is targeting to reduce the most expensive debt balances, and post consolidation, amalgamate individual GREA facilities within the current syndication.

Final regulatory approvals for the unwinding of the Drive in Trading Black empowerment structure (“DiT”) have been received (see prior announcements). The Company will take direct ownership of its proportionate number of DiT Security Shares in exchange for making the US$17.5 million Guarantee Agreement payment to the GEPF by 30 March 2024, the implementation of which is currently under review.

Post period end

On 16 February 2024, shareholders approved the disposal of interests in Bora Africa and Acacia Estates to GREA, which will form part of Grit’s equity contribution to the GREA $100 million recapitalisation that is expected to conclude in March 2024. The disposal of properties at or close to book value achieves the Board’s strategy of additional asset recycling and further reinforces the Group’s audited net asset value. By concluding the GREA capital raise with these proceeds, the Group (including GREA) receives a cash injection of US$48.5 million from the PIC’s subscription at NAV. This equity will initially be utilised to reduce the Group’s higher cost debt. Over the medium term these funds are expected to be redrawn and invested by GREA, upon careful capital allocation assessment, into risk mitigated and accretive development projects that are expected to meaningfully contribute to ESG impact, accelerated NAV growth and fee income generation to the Group as is contemplated under the Grit 2.0 strategy.

Notes

1

Various alternative performance measures (APMs) are used by management and investors, including a number of European Public Real Estate Association ("EPRA") metrics, Distributable Earnings, Total Income Producing Assets and Property portfolio net operating income. APMs are not a substitute, and not necessarily better for measuring performance than statutory IFRS results and where used, full reconciliations are provided.

2

Explanations of how EPRA figures and Distributable earnings per share are derived from IFRS are shown in note 16.

3

Based on EPRA cost to income ratio calculation methodology which includes the proportionately consolidated effects of associates and joint ventures.

4

Includes controlled Investment properties with Subsidiaries, Investment Property owned by Associates and Joint Ventures, other assets owned by associates and joint ventures, deposits paid on Investment properties and other investments, property plant and equipment, intangibles, and related party loans.

5

Weighted average lease expiry (“WALE”).

6

Property occupancy rate based on EPRA calculation methodology - Includes associates and joint ventures.

7

Forbes 2000, Other Global and pan African tenants.

8

Hard (US$ and EUR) or pegged currency rental income.

9

Property net operating income (“NOI”) is an APM’s and is derived from IFRS revenue and NOI adjusted for the results of associates and joint ventures and further includes the results of the GREA associates. A full reconciliation is provided in the financial review section below. In deriving the property net operating income from ongoing operations, the net operating income related to Beachcomber hotels and the LLR (which were disposed of in FY2023) were excluded from the comparative number in order to provide a comparative for only the ongoing operations.

FOR FURTHER INFORMATION, PLEASE CONTACT:

Grit Real Estate Income Group Limited

 

Bronwyn Knight, Chief Executive Officer

+230 269 7090

Darren Veenhuis, Investor Relations

+44 779 512 3402

 

 

CavendishCapital Markets Limited – UK Financial Adviser

 

James King/Teddy Whiley (Corporate Finance)

+44 20 7220 5000

Justin Zawoda-Martin / Daniel Balabanoff / Pauline Tribe (Sales)

 

+44 20 3772 4697

Perigeum Capital Ltd – SEM Authorised Representative and Sponsor

 

Shamin A. Sookia

+230 402 0894

 

 

Capital Markets Brokers Ltd – Mauritian Sponsoring Broker

 

Elodie Lan Hun Kuen

+230 402 0280

NOTES:

Grit Real Estate Income Group Limited is the leading Pan-African real estate company focused on investing in, developing and actively managing a diversified portfolio of assets in carefully selected African countries (excluding South Africa). These high-quality assets are underpinned by predominantly US$ and Euro denominated long-term leases with a wide range of blue-chip multi-national tenant covenants across a diverse range of robust property sectors. The Company is committed to delivering strong and sustainable income for shareholders, with the potential for income and capital growth. The Company holds its primary listing on the Main Market of the London Stock Exchange (LSE: GR1T and a secondary listing on the Stock Exchange of Mauritius (SEM: DEL.N0000).

Further information on the Company is available at www.grit.group.

Directors:

Peter Todd (Chairman), Bronwyn Knight (Chief Executive Officer) *, Gareth Schnehage (Chief Financial Officer) *, David Love+, Catherine McIlraith+, Jonathan Crichton+, Cross Kgosidiile, Lynette Finlay + and Nigel Nunoo+.

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

Company secretary: Intercontinental Fund Services Limited

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

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

SEM authorised representative and sponsor: Perigeum Capital Limited

UK Transfer secretary: Link Assets Services Limited

Mauritian Sponsoring Broker: Capital Markets Brokers Limited

 

This notice is issued pursuant to the FCA Listing Rules, SEM Listing Rule 15.24 and the Mauritian Securities Act 2005. The Board of the Company accepts full responsibility for the accuracy of the information contained in this communiqué.

A Company presentation for all investors and analysts via live webcast and conference call

The Company will host a live webcast and conference call on Wednesday, 28 February 2024 at 13:00 Mauritius time / 09:00 UK time / 11:00 SA time via the Investor Meet Company platform, with the presentation being open to all existing and potential shareholders.

Pre-registration is advised via:

https://www.investormeetcompany.com/grit-real-estate-income-group-limited/register-investor

Investors who already follow Grit Real Estate Income Group Limited on the Investor Meet Company platform will automatically be invited. A playback will be accessible on-demand within 48 hours via the Company website: https://grit.group/financial-results/

CHIEF EXECUTIVE OFFICER’S STATEMENT

Introduction

Grit is a prominent, woman-led real estate platform providing property investment and associated real estate services across the African continent. The Group recognises its role in transforming the design of buildings and developments for long-term sustainability and focuses on impact, energy efficiency and carbon reduction across the portfolio. Additionally, the Group prides itself on achieving more than 40% of women in leadership positions and the significant support it provides to local communities in Africa through extensive CSR and upliftment programs.

The Board continues to target a simplification of the Group’s structure, operations and financial reporting and has made significant progress over the last 18 months. For associate accounted properties, where we’ve had limited opportunity for obtaining controlling interests, we’ve disposed of these and redirected the capital to assets that we can control. The sale of our interests in LLR and the Beachcomber hotel portfolios, at or close to book value, allowed us to redeploy capital to the acquisition of controlling interests in GREA and APDM, whose results will be consolidated from 1 January 2024. The Grit 2.0 recycling strategy is becoming increasingly evident within the composition of Group net operating income with Diplomatic housing, Healthcare and Data center segments replacing earnings that were disposed of from LLR and Hospitality. The impact of both the consolidated acquisitions and the newly completed developments contributing for the full financial year are expected to result in meaningful growth in IFRS revenue over the coming reporting cycles.

Although the Group achieved the Board’s 20% asset recycling target, we expect to continue rotating the portfolio away from non-core asset segments and will target further asset disposals in the coming years.

The final stage of the Group simplification involves grouping property assets into logical industry subsidiaries and positioning these within the Group for optimal funding, growth, and value creation. The move of Bora Africa (the Group’s industrial asset portfolio) and Acacia estates (diplomatic housing) to GREA, furthers this strategy and has facilitated a US$48 million cash equity injection to GREA from our co-investor, PIC. These recapitalisation proceeds will be directed towards debt reduction and pipeline developments in the diplomatic housing, industrial and healthcare sectors which will, amongst others, generate additional income consistent with the Grit 2.0 strategy.     

Sustainability of the Group’s business model

We benefit from having built a business focused on quality real estate assets with strong ESG credentials and long leases to a resilient and diverse customer base that comprises more than 79% of strong multinational and investment grade tenants. NOI from ongoing operations grew by 15.6% in the six months to 31 December 2023, with contractual lease escalations, which are predominantly inflation-linked, and new assets producing NOI contributing to the growth. We now have 33 assets across 7 sectors with 95.0% of our leases in hard currency providing a strong foundation to our income generation and a resilient platform from which to pursue growth opportunities through active management, sector focused development substructures and external revenue generation from our professional services. We recognised US$6.8 million of other income in the period predominantly related to development revenues earned in APDM.

Significant adjustments in global interest rates have however caused sharp increases in our overall cost of capital in the near term, which continue to impact our financial results. We actively manage our interest rate risk, but with several hedges maturing over the period, our weighted average cost of debt further increased in the period to 9.62% (discussed in greater detail in the treasury section below). We note that central banks are expected to start lowering interest rates later this calendar year, which should go some way to alleviating the current funding cost pressures, however the Group will additionally target settling more expensive facilities to lower overall funding costs. 

The Board is keenly focused on improving total returns to shareholders and is currently targeting the following key actions:

  • Continued focus on NOI growth and strong cash collections from the high-quality property portfolio including refocusing the portfolio towards resilient and impact sectors.
  • A rationalisation of shared functions post the acquisition of GREA and APDM and assessment of the optimal structure of corporate head office functions going forward. We are pleased to report substantial progress on the US$4 million cost reduction target for the financial year 2024 and remain on track to deliver the c19% cost-saving target for the full year.
  • A US$4.1million annualised cost savings in net finance costs from reduction in debt, refinancing existing facilities and inclusion of GREA assets into the existing syndicated facility
  • The execution of development pipeline by GREA consistent with the Grit 2.0 strategy and generating additional income from property related services.   

GREA & APDM update

The Group concluded the acquisition of a majority interest in GREA and APDM in 2023, resulting in a combined direct and indirect interest of 54.22% in GREA and 78.95% in APDM. GREA and APDM were treated as joint ventures in the financial statements for the full year results to 30 June 2023 and again for the six months ended 31 December 2023. Following final amendments to the Shareholders Agreement, both will now be fully consolidated with effect from 1 January 2024.

In addition to GREA’s existing income producing portfolio, the PIC will inject $48 million of cash equity as part of the recently announced GREA $100 million recapitalisation which will facilitate GREA’s pipeline of development opportunities in its focus sectors: 

1.    Bora Africa, a specialist industrial real estate vehicle, was established on 24 October 2023 when 5 Grit owned industrial assets namely Imperial, Bollore, Orbit and three industrial land assets were transferred to the newly established entity. Post the recent shareholder approval Bora will shortly become a wholly owned subsidiary of GREA, who will oversee the realisation of the development pipeline. The International Finance Corporation, a division of the World Bank, has approved a US$30 million subordinated notes issue by Bora Africa to fund future pipeline and impact focused real estate acquisitions.

  1. Diplomatic Holdings Africa Ltd ("DH Africa"), a wholly owned subsidiary of GREA, has been established as a specialist property platform investing in diplomatic housing and other sovereign-backed property assets in Africa. DH Africa currently holds four diplomatic housing assets, which were internally developed or purchased, and has several future developments which are either under consideration or in the process of being negotiated.

 

Update on the 2023 Annual General Meeting vote

At the Annual General Meeting of the Company held on 18 December 2023, ordinary resolution 10 received the support of 71.4% of shareholder votes. The Company has subsequently undertaken an engagement exercise with shareholders to discuss this voting outcome, including a consultation with some of the Company’s major shareholders on 17 January 2024 to understand their position and perspectives. The perspectives of our major shareholders are highly valued and have been reported to the Board.

Changes to the Board of Directors

Sir Sam Jonah reached retirement age recently and accordingly withdrew himself from re-election at the annual general meeting, that was held on the 18 December 2023. The Board would like to express its gratitude to Sir Sam for his meaningful contribution to Grit over the years and wishes him well for the future, and for his retirement.

The Board welcomes Mr Nigel Nunoo, who was appointed as an independent Non-Executive Director, with effect from 19 December 2023. He has also been appointed as a member of the Remuneration Committee.

Leon van de Moortele, the Group CFO and member of the Board, who has been on medical leave since 19 December 2023, resigned from the Board today. The Board would like to express their gratitude to Leon for the integral role he has played in the company since its inception and his immense dedication to navigating the complex landscape in the Pan Africa business environment.

The Board today appoints Gareth Schnehage as replacement Chief Financial Officer and welcomes him to the Board of directors. Gareth is a Chartered Accountant with over 15 years of leading roles at multinational corporations, including extensive experience operating in African jurisdictions and executing asset backed debt financing solutions.

Outlook

The Group continues to focus on growing income from its portfolio of high-quality, income producing properties and from the implementation of its Grit 2.0 revenue strategy. The Board will continue to target the reduction of administrative costs and implementing strategies to reduce LTV and weighted average cost of debt to defend and grow its distributable earnings and NAV growth.   

Presentation of financial results

The consolidated financial statements have been prepared in accordance with IFRS as issued by the IASB. Alternative performance measures (APMs) have also been provided to supplement the IFRS financial statements as the Directors believe that this adds meaningful insight into the operations of the Group and how the Group is managed. European Public Real Estate Association (“EPRA”) Best Practice Recommendations have been adopted widely throughout this report and are used within the business when considering the operational performance of our properties. Full reconciliations between IFRS and EPRA figures are provided in notes 16a to 16b. Other APMs used are also reconciled below.

“Grit Proportionate Interest" income statement, presented below, is a management measure to assess business performance and is considered meaningful in the interpretation of the financial results. Grit Proportionate Interest Income Statement (including “Distributable Earnings”) are alternative performance measures.

Distributable Earnings is utilised to determine the maximum amount of operational earnings that would be available for distribution as dividend to equity holders in any financial period. This factors the various company specific impacts of operating across several diverse jurisdictions across Africa and the investments’ legal structures of externalising cash from these regions. The IFRS statement of comprehensive income is adjusted for the component income statement line items of properties held in joint ventures and associates. This measure, in conjunction with adjustments for non-controlling interests (for properties consolidated by Grit, but part owned by minority partners), form the basis of the Group’s distributable earnings build up, which is alternatively shown in Note 16b “Distributable earnings”.

Distributable earnings for the six months are underpinned by NOI,  fee income performance and improved administrative cost control. The higher weighted average cost of debt has however impacted the results and resulted in a decline of distributable earnings of 19.1% (Distributable EPS HY24 $2.07cps vs HY23 $2.56cps).

 

 IFRS YTD

Extracted from Associates

GRIT Proportionate Income statement

 Split NCI

 GRIT Economic Interest

YTD Distributable earnings

 

 US$'000

 US$'000

US$’000

 US$'000

 US$'000

US$'000

Gross rental income

28,429

4,931

33,360

(4,622)

28,738

28,272

Property operating expenses

(4,953)

(644)

(5,597)

1,211

(4,386)

(3,255)

Net operating profit

23,476

4,287

27,763

(3,411)

24,352

25,017

Other income

108

6,745

6,853

(12)

6,841

6,637

Administration expenses

(7,929)

(3,945)

(11,874)

165

(11,709)

(10,541)

Net impairment charge on financial assets

979

445

1,424

(382)

1,042

-

Profit / (loss) from operations

16,634

7,532

24,166

(3,640)

20,526

21,113

Fair value adjustment on investment properties

(19,954)

(403)

(20,357)

3,534

(16,823)

-

Fair value adjustment on other financial asset

(235)

-

(235)

-

(235)

-

Fair value adjustment on derivative financial instruments

(4,041)

-

(4,041)

-

(4,041)

-

Share-based payment

(100)

-

(100)

-

(100)

-

Share of profits from associates

5,378

(5,378)

-

-

-

-

Gain on derecognition of loans and other receivables

1

-

1

-

1

-

Foreign currency (losses) / gains

(2,499)

(53)

(2,552)

297

(2,255)

-

Other transaction costs

(567)

-

(567)

-

(567)

-

Profit / (loss) before interest and taxation

(5,383)

1,698

(3,685)

191

(3,494)

21,113

Interest income

1,514

1,618

3,132

(1)

3,131

3,131

Finance costs - Intercompany

-

-

-

1,786

1,786

1,089

Finance charges

(19,691)

(2,470)

(22,161)

1,337

(20,824)

(18,361)

Profit / (loss) before taxation

(23,560)

846

(22,714)

3,313

(19,401)

6,972

Current tax

(218)

(56)

(274)

80

(194)

(194)

Deferred tax

2,751

(949)

1,802

(129)

1,673

-

Profit / (loss) after taxation

(21,027)

(159)

(21,186)

3,264

(17,922)

6,778

NCI of associates through OCI

-

159

159

(159)

-

-

Total comprehensive income / (loss)

(21,027)

-

(21,027)

3,105

(17,922)

6,778

VAT credits

 

 

 

 

 

3,176

Distributable earnings

 

 

 

 

 

9,954

Financial and Portfolio summary

The property portfolio has continued to trade well with both leasing activity and new assets contributing to the revenue from ongoing operations growth in the period. The Grit Proportionate Gross rental income movements are made up by the following:

Sector

Revenue HY2023

Change in ownership1

Other movements2

Revenue HY2024

% Change

 

US$'000

US$'000

US$'000

US$'000

 

Retail

8,981

260

1,009

10,250

14.1%

Hospitality

5,192

(2,879)

664

2,977

-42.7%

Office

8,903

19

128

9,050

1.7%

Industrial

3,141

15

(67)

3,089

-1.7%

Data Centres

383

214

30

627

63.7%

Healthcare

-

-

634

634

100.0%

Corporate Accommodation

6,719

465

925

8,109

20.7%

LLR portfolio

1,090

(1,090)

-

-

-100.0%

Corporate

626

-

215

841

34.3%

TOTAL

35,035

(2,996)

3,538

35,577

1.5%

Subsidiaries

26,914

-

1,515

28,429

5.6%

Associates

7,340

(3,461)

1,052

4,931

-32.8%

SUBTOTAL

34,254

(3,461)

2,567

33,360

-2.6%

GREA Associates 3

781

465

971

2,217

183.9%

TOTAL

35,035

(2,996)

3,538

35,577

1.5%

 

1

Change in ownership relate to the increase in effective shareholding in GREA from 35.01% during H1 FY2023 to 54.22% during H1 FY2024 as well as the impact of the disposal of Beachcomber Hotels International and Letlole La Rona Limited during the previous financial year.

2

Other movements relate to the impact of development assets brought into operation, leasing activities and the impact of foreign exchange.

3

GREA associates include the Diplomatic housing units located in Ethiopia and Kenya.

Retail sector: Recovery in revenue performance of AnfaPlace Mall contributed to the 14% year-on-year increase in retail segment revenue with the leasing activity to the Hudson Group in the prior period annualising in these results. Anfa remains positioned for disposal and vacancy increases in January 2024 are expected to reduce by the end of 2Q 2024. The Zambian portfolio (Kafubu, Makuba and Cosmopolitan Mall) continue to trade well despite the volatility experienced in the Zambian Kwacha over the past six months, re-enforcing the Boards belief in the “services and convenience focused” retail offering as a sustainable format for the African continent. 

Hospitality sector: Excluding the impacts of BHI from the base (which was disposed of in 2023), the hospitality sector enjoyed reported revenue growth of 28.7%. Tamassa enjoyed its first EBITDA participation contributing to lease income since the Covid pandemic, while NOI growth on the Club Med resort was directly attributable to returns earned on the increased capital spend on the asset.

Office sector: The office sector is benefiting from contributions from newly completed assets (Precinct, Adumhah Place and Eneo) now in the portfolio. This was supported by positive leasing activity in the Ghanaian and Mozambique portfolios which has contributed to the revenue growth from this segment.

Corporate accommodation sector: The sector exposures comprise the newly amalgamated DH Africa (consular accommodation) and the VDE compound let to Vulcan, with the segment reflecting the implementation of the Grit 2.0 asset recycling strategy. The DH Africa assets reported a 13.8% growth in revenue driven by Rosslyn Grove (Kenya) and Elevation (Ethiopia), both newly developed compounds let predominantly to the US government, contributing for the full reporting period. Lease renewal discussions are currently underway for VDE corporate accommodation compound expiring May 2024. 

Bora Africa (Light Industrial) & Data Centre sectors: Post the move of Bora to GREA, the Group expects to combine the data sector segment within Light Industrial.  On a combined basis the sector is demonstrating strong demand fundamentals and positive outlook. Despite isolated tenant delays in rental payments, which are being addressed, we remain confident in the performance of the combined industrial and data centre sectors.

Healthcare sector: The Artemis Curepipe Clinic was completed in May 2023, and is now contributing for the full period. The hospital is tenanted to Falcon Healthcare Group Ltd on a 15-year lease and supported with further credit enhancement guarantees. The hospital has traded ahead of plan with the first ever open-heart surgery on the island of Mauritius performed there recently.

The Grit Proportionate Income Statement is further split to produce a Grit NOI analysis by sector as follows:

Sector

Opex HY2024

Opex HY2023

Movement

NOI HY2024

NOI HY2023

Movement

 

US$'000

USD'000

%

US$'000

US$'000

%

Retail

(3,573)

(3,205)

11.5%

6,677

5,776

15.6%

Hospitality

-

-

-

2,977

5,192

-42.7%

Office

(1,402)

(1,046)

34.0%

7,648

7,857

-2.7%

Industrial

(131)

(119)

10.1%

2,958

3,022

-2.1%

Data Centres

-

-

-

627

383

63.7%

Healthcare

(3)

 

100.0%

631

 

100.0%

Corporate Accommodation

(1,284)

(1,249)

2.8%

6,825

5,470

24.8%

LLR portfolio

-

(93)

-100.0%

-

997

-100.0%

Corporate3

565

237

138.0%

1,405

863

62.8%

TOTAL

(5,829)

(5,475)

6.5%

29,748

29,560

0.6%

Subsidiaries

(4,953)

(4,797)

3.3%

23,476

22,117

6.1%

Associates

(644)

(578)

11.4%

4,287

6,762

-36.6%

SUBTOTAL

(5,597)

(5,375)

4.1%

27,763

28,879

-3.9%

GREA Associates2

(232)

(100)

132.0%

1,985

681

191.5%

TOTAL

(5,829)

(5,475)

6.5%

29,748

29,560

0.6%

 

Income producing assets

 

Composition of income producing assets

31 Dec 2023

30 Jun 2023

 

US$'m

US$'m

Investment properties

615.8

628.8

Investment properties included within ‘Investment in associates and joint ventures’

130,7

126.1

 

746.5

754.9

Deposits paid on investment properties

4.8

5.9

Other assets included within Investments in associates (excluding investment property)

66,1

71.0

Other investments, property, plant & equipment, Intangibles & related party loans

30.5

30.2

Total income producing assets

847.9

862.0

Property valuations

Reported property values based on Grit’s proportionate share of the total property portfolio (including joint ventures and GREA associates) decreased by 1.02% in the period primarily due to negative fair value movements of US$21.2 million on the property portfolio (-2.7%) as well as the impact of foreign exchange movements amounting to US$2.7 million. This was offset by capital expenditure on the Club Med Skirring Resort development and developments in progress under the GREA portfolio with a combined capital spend of US$11.4 million.

Sector

Property Value

30 Jun 2023

Foreign exchange movement

Developments and refurbishment

Other movements

Fair value movement

Property Value

31 Dec 2023

Total Valuation Movement

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

%

Retail

212,711

(4,250)

-

466

(6,507)

202,420

(4.84%)

Hospitality

79,992

1,210

5,703

-

(2,365)

84,540

5.69%

Office

215,444

-

-

1,577

(3,186)

213,835

(0.75%)

Light industrial

79,450

-

-

186

(1,248)

78,388

(1.34%)

Data Centres

14,390

 

-

62

20

14,472

0.57%

Healthcare

12,227

125

-

1,485

(834)

13,003

6.35%

Corporate Accommodation

157,772

390

-

(627)

(7,824)

149,711

(5.11%)

GREA under construction

16,241

(3)

5,726

1,071

771

23,806

46.58%

Other

-

(122)

-

127

-

5

100.00%

TOTAL

788,227

(2,650)

11,429

4,347

(21,173)

780,180

(1.02%)

Subsidiaries

628,777

1,117

5,703

136

(19,954)

615,779

(2.07%)

Associates

126,104

(4,156)

5,726

3,420

(403)

130,691

3.64%

SUBTOTAL

754,881

(3,039)

11,429

3,556

(20,357)

746,470

(1.11%)

GREA Associates

33,346

389

-

791

(816)

33,710

1.09%

TOTAL

788,227

(2,650)

11,429

4,347

(21,173)

780,180

(1.02%)

Additional income

US$6.8 million was recognised as other income within the associate line in the period, predominantly related to property development revenues earned in APDM.

Cost control

In October 2023, the Board committed to a net US$4.0 million reduction in reported administrative costs. By December 2023, the Group has achieved US1.4 million reduction in administrative costs and remains on track to achieve the US$4.0 million target reduction by June 2024.

By 31 December 2023 annualised ongoing administrative costs as a percentage of total income producing assets equated to 1.9%, decreasing from 2.2% in the prior year. The overall reduction in administrative costs was driven by the cost optimisation initiatives implemented by the group and from integration benefits expected from the GREA and APDM acquisitions.

Administrative costs

 

31 December 2023

31 December 2022

Movement

Movement

 

US$'000

US$'000

US$'000

%

Ongoing administrative costs

7,929

9,377

(1,448)

-15.4

Transaction costs

-

31

(31)

-100.0

Total administrative expenses

7,929

9,408

(1,479)

-15.7

Material finance cost increases

The Group’s weighted average cost of debt increased to 9.6% at the end of December 2023 from 7.5% at the end of December 2022, which contributed to the 10.4% increase in net finance costs during the period. The increase in funding costs is partially shielded by annual contractual lease escalations over the property portfolio which are predominantly linked to US consumer price inflation. The Group has hedging instruments in place amounting to US$200 million to mitigate the impact of interest fluctuations.

Net finance costs

31 December 2023

31 December 2022

Movement

Movement

 

US$'000

US$'000

US$'000

%

Finance costs as per statement of profit or loss

19,691

18,210

1,481

8.1%

Less: Interest income as per statement of profit or loss

(1,514)

(1,738)

224

-12.9%

Net finance costs - IFRS

18,177

16,472

1,705

10.4%

 

Interest rate risk exposure and management

The exposure to interest rate risk at 31 December 2023 is summarised below, and the table highlights the value of the Group’s interest-bearing borrowings that are exposed to the base rates indicated:

Lender

 

TOTAL

SOFR

EURIBOR

PLR1

FIXED

 

 

US$'000

US$'000

US$'000

US$'000

US$'000

Standard Bank Group

 

269,972

220,837

49,135

-

-

State Bank of Mauritius

 

38,802

-

37,939

863

-

Investec Group

 

33,938

-

33,938

-

-

Nedbank Group

 

15,635

15,635

-

-

-

Housing Finance Corporation

 

4,204

-

-

-

4,204

NCBA Kenya

 

29,484

29,484

-

-

-

Private Equity

 

4,725

-

-

-

4,725

International Finance Corporation

 

16,100

16,100

-

-

-

TOTAL EXPOSURE – IFRS

 

412,860

282,056

121,012

863

8,929

Less: Hedging instruments in place

 

(200,000)

(200,000)

-

-

-

Less: Partner loans offsetting group exposure

 

(21,034)

(21,034)

-

-

-

NET EXPOSURE (AFTER HEDGING AND OTHER MITIGATING INSTRUMENTS) - IFRS

 

191,826

61,022

121,012

863

8,929

 

Notes

1 PLR – Mauritius Prime Lending Rate

Including the impact of hedges and back-to-back partner loans, the Group is 78.4% hedged on its US$ SOFR exposure but remains largely unhedged to movements in EURIBOR and the Mauritian prime lending rate.

On 16 October 2023, interest rate hedges over US$100.0 million notional, which gave protection against LIBOR rates above 1.58% to 1.85%, matured. The Group re-instated a new US$100.0 million notional interest rate hedge from this date, with a new protection level above 4.75% against SOFR 3-month rates. This higher level was a material contributor to the increased WACD

A sensitivity of the Group’s expected WACD to further movements in base rates are summarised below:

All debt

 

 

WACD

Movement vs current WACD

At 31 December 2023 (including hedges)

 

 

9.62%

 

At 28 February 2024 (including hedges)

 

 

9.56%

0.00bps

+50bps

 

 

9.78%

0.22bps

+25bps

 

 

9.67%

0.11bps

-50bps

 

 

9.34%

(0.22bps)

-100bps

 

 

9.03%

(0.53bps)

-200bps

 

 

8.32%

(1.24bps)

Interest-bearing borrowings movements

As at 31 December 2023, the Group had a total of US$411.7 million in interest bearing borrowings outstanding as compared to a total of US$396.7 million that was outstanding at the end of the comparative period. The increase in these balances was largely driven by the impact of net proceeds of interest-bearing borrowings during the period that amounted to US$12.8 million during the period as more fully described below.

Movement in reported interest-bearing borrowings for the period (subsidiaries)

As at

31 Dec 2023

As at

30 Jun 2023

 

US$'000

US$'000

Balance at the beginning of the period

396,735

425,066

Proceeds of interest bearing-borrowings

40,691

324,459

Loan reduced through disposal of subsidiary

-

(19,404)

Loan acquired through asset acquisition

-

4,369

Loan issue costs incurred

(936)

(7,355)

Amortisation of loan issue costs

1,625

3,368

Foreign currency translation differences

1,759

3,561

Interest accrued

(301)

2,798

Debt settled during the year

(27,862)

(340,127)

As at period end

411,711

396,735

The following debt transactions were concluded during the period under review:

Movement in the Grit Services Limited corporate facility with NCBA Bank Kenya amounting to c. US$12.0 million increase.

Refinance of Tamassa by Mara Delta Properties Mauritius Limited, through State Bank of Mauritius amounting to c.US$13.2 million.

 

Settlement of State Bank of Mauritius corporate facility held by Grit Real Estate Income Group Limited amounting to c.US$10.0 million.

Maubank corporate facility held by Freedom Asset Management Limited of US$0.7 million was settled during the period.

US$3.1 million was settled on the RCF facility held by Girt Services Limited with the SBSA led syndication during the period.

Amortisation of the Investec facility linked to AnfaPlace Mall amounting to EUR1.5 million.

For more meaningful analysis, a further breakdown is provided below to better reflect debt related to non-consolidated associates and joint ventures. As at 31 December 2023, the Group had a total of US$476.9 million in interest-bearing borrowings outstanding, comprised of US$412.9 million in subsidiaries (as reported in IFRS balance sheet) and US$64.0 million proportionately consolidated and held within its associates and joint ventures.

 

31 December 2023

30 June 2023

 

Debt in Subsidiaries

Debt in associates

Total

 

Debt in Subsidiaries

Debt in associates

Total

 

 

USD’000

USD’000

USD’000

%

USD’000

USD’000

USD’000

%

Standard Bank Group

269,972

30,626

300,598

63.04%

269,147

28,881

298,028

65.18%

State Bank of Mauritius

38,802

14,320

53,122

11.14%

35,361

2,769

38,130

8.34%

Investec Group

33,938

-

33,938

7.12%

34,722

-

34,722

7.59%

Absa Group

-

14,157

14,157

2.97%

-

14,157

14,157

3.10%

Afrasia Bank Limited

-

17

17

0.00%

-

21

21

0.00%

Nedbank Group

15,635

-

15,635

3.28%

15,635

7,772

23,407

5.12%

Maubank

-

-

-

0.00%

712

-

712

0.16%

Housing Finance Corporation

4,204

-

4,204

0.88%

4,369

-

4,369

0.96%

SBI (Mauritius) Ltd

-

1,987

1,987

0.42%

-

2,078

2,078

0.45%

Cooperative Bank of Oromia

-

2,894

2,894

0.61%

-

3,303

3,303

0.72%

NCBA Bank Kenya

29,484

-

29,484

6.18%

17,500

-

17,500

3.83%

Private Equity

4,725

-

4,725

0.99%

4,725

-

4,725

1.03%

International Finance Corporation

16,100

-

16,100

3.38%

16,100

-

16,100

3.52%

TOTAL BANK DEBT

412,860

64,001

476,861

100.00%

398,271

58,981

457,252

100.00%

Interest accrued

7,424

 

 

 

7,725

 

 

 

Unamortised loan issue costs

(8,573)

 

 

 

(9,261)

 

 

 

As at 30 June

411,711

 

 

 

396,735

 

 

 

Group LTV

The Group LTV as at 31 December 2023 is 47.6% as compared to 44.8% at 30 June 2023. The increase in Group LTV is due to an increase in the overall net debt position and a reduction in investment property values driven by fair value movements processed during the period.

Net Asset Value and EPRA Net Realisable Value

Further reconciliations and details of EPRA earnings per share and other metrics are provided in notes 16a to 16b.

NET REINSTATEMENT VALUE (“NRV”) EVOLUTION

US$'000

US$ cps

June 2023 as reported – IFRS NRV

300,650

62.60

Derivative financial instruments

789

0.20

Deferred Tax on Properties

48,217

10.00

EPRA NRV at 30 Jun 2023

349,656

72.80

Cash Profits

7,325

1.53

Portfolio valuations

(20,357)

(4.24)

Other fair value adjustments

(4,276)

(0.89)

Other non-cash items (including non-controlling interest)

1,298

0.27

Movement in Foreign Currency Translation reserve

(3,685)

(0.77)

Movement other equity instruments

(2,798)

(0.58)

EPRA NRV at 31 Dec 2023

327,163

68.12

Deferred Tax on Properties

(46,921)

(9.78)

Derivative financial instruments

(4,394)

(0.91)

IFRS NRV at 31 Dec 2023

275,848

57.43

Dividend

An interim dividend per share of US$1.50 cents has been declared for the six-month period ending 31 December 2023, paid from distributable cash earnings.

Bronwyn Knight

Chief Executive Officer

 

28 February 2024

PRINCIPAL RISKS AND UNCERTAINTIES

Grit has a detailed risk management framework in place that is reviewed annually and duly approved by the Risk Committee and the Board. Through this risk management framework, the Company has developed and implemented appropriate frameworks and effective processes for the sound management of risk.

The principal risks and uncertainties facing the Group as at 30 June 2023 are set out on pages 54 to 57 of the 2023 Integrated Annual Report together with the respective mitigating actions and potential consequences to the Group’s performance in terms of achieving its objectives. These principal risks are not an exhaustive list of all risks facing the Group but are a snapshot of the Company’s main risk profile as at year end.

The Board has reviewed the principal risks and existing mitigating actions in the context of the second half of the current financial year. The Board believes there has been no material change to the risk categories and are satisfied that the existing mitigation actions remain appropriate to manage them.

STATEMENT OF DIRECTORS RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS

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

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

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

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

Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from the legislation in other jurisdictions. The directors of the Group are listed in its Annual Report for the year ended 30 June 2023. A list of current directors is maintained on the Grit website: www.grit.group.

On behalf of the Board

Bronwyn Knight

Chief Executive Officer

ABRIDGED CONSOLIDATED STATEMENT OF INCOME STATEMENT

 

 

Unaudited

six months ended

31 Dec 2023

Unaudited

six months ended

31 Dec 2022

 

Notes

US$'000

US$'000

Gross property income

9

28,429

26,914

Property operating expenses

 

(4,953)

(4,797)

Net property income

 

23,476

22,117

Other income

 

108

120

Administrative expenses

 

(7,929)

(9,408)

Net reversal on financial assets

 

979

903

Profit from operations

 

16,634

13,732

Fair value adjustment on investment properties

 

(19,954)

3,139

Fair value adjustment on other financial liability

 

(235)

-

Fair value adjustment on other financial asset

 

-

47

Fair value adjustment on derivative financial instruments

 

(4,041)

(1,007)

Share-based payment expense

 

(100)

(413)

Loss on extinguishment of loans

 

-

(1,166)

Share of profits from associates and joint ventures

3

5,378

12,008

Loss on disposal of interest in associate

 

-

(295)

Loss on derecognition of loans and other receivables

 

1

-

Foreign currency losses

 

(2,499)

(3,381)

Other transaction costs

 

(567)

-

(Loss)/ Profit before interest and taxation

 

(5,383)

22,664

Interest income

10

1,514

1,738

Finance costs

11

(19,691)

(18,210)

(Loss)/ Profit for the period before taxation

 

(23,560)

6,192

Taxation

 

2,533

(2,587)

(Loss)/ Profit for the period after taxation

 

(21,027)

3,605

 

 

 

 

(Loss)/ Profit attributable to:

 

 

 

Equity shareholders

 

(18,542)

4,741

Non-controlling interests

 

(2,485)

(1,136)

 

 

(21,027)

3,605

 

 

 

 

Basic and diluted earnings per share (cents)

13

(3.85)

0.98

 

 

ABRIDGED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

Unaudited

six months ended

31 Dec 2023

Unaudited

six months ended

31 Dec 2022

 

US$'000

US$'000

(Loss)/ Profit for the year

(21,027)

3,605

Exchange differences on translation of foreign operations

508

(257)

Share of other comprehensive expense of associates and joint ventures

(4,164)

(1,207)

Other comprehensive expense that may be reclassified to profit or loss

(3,656)

(1,464)

Total comprehensive (expense)/ income relating to the period

(24,683)

2,141

 

 

 

Total comprehensive (expense)/ income attributable to:

 

 

Owners of the parent

(22,227)

3,495

Non-controlling interests

(2,456)

(1,354)

 

(24,683)

2,141

 

ABRIDGED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

 

Unaudited as at

31 Dec 2023

Audited as at

30 Jun 2023

Unaudited as at

31 Dec 2022

 

Notes

US$'000

US$'000

US$'000

Assets

 

 

 

 

Non-current assets

 

 

 

 

Investment properties

2

615,779

628,777

609,016

Deposits paid on investment properties

2

4,799

5,926

10,867

Property, plant, and equipment

 

4,094

4,490

2,095

Intangible assets

 

308

433

561

Other investments

 

3

-

1

Investments in associates and joint ventures

3

196,870

197,094

212,317

Related party loans receivable

 

129

92

1,313

Other loans receivable

4

21,332

21,005

-

Derivative financial instruments

 

-

91

-

Trade and other receivables

5

3,500

3,448

1,829

Deferred tax

 

13,176

12,578

12,698

Total non-current assets

 

859,990

873,934

850,697

 

 

 

 

 

Current assets

 

 

 

 

Trade and other receivables

5

22,333

18,578

31,760

Current tax receivable

 

3,585

3,389

2,070

Related party loans receivable

 

882

751

988

Other loans receivable

4

-

-

34,477

Derivative financial instruments

 

18

1,828

3,003

Cash and cash equivalents

 

6,776

9,207

12,580

Total current assets

 

33,594

33,753

84,878

Total assets

 

893,584

907,687

935,575

 

 

 

 

 

Equity and liabilities

 

 

 

 

Total equity attributable to ordinary shareholders

 

 

 

 

Ordinary share capital

 

535,694

535,694

535,694

Treasury shares reserve

 

(16,306)

(16,306)

(16,212)

Foreign currency translation reserve

 

(4,074)

(389)

(5,666)

Accumulated losses

 

(239,466)

(218,349)

(180,515)

Equity attributable to owners of the Company

 

275,848

300,650

333,301

Preference share capital

6

32,615

31,596

30,577

Perpetual preference notes

7

28,606

26,827

26,289

Non-controlling interests

 

(27,948)

(25,456)

(25,675)

Total equity

 

309,121

333,617

364,492

 

 

 

 

 

Liabilities

 

 

 

 

Non-current liabilities

 

 

 

 

Redeemable preference shares

 

13,308

12,849

12,840

Proportional shareholder loans

 

33,259

35,733

40,989

Interest-bearing borrowings

8

355,149

318,453

371,549

Lease liabilities

 

700

3,335

750

Derivative financial instruments

 

1,412

1,425

2,976

Related party loans payable

 

8,507

7,195

1,454

Deferred tax liability

 

49,805

51,933

51,480

Total non-current liabilities

 

462,140

430,923

482,038

 

 

 

 

 

Current liabilities

 

 

 

 

Interest-bearing borrowings

8

56,562

78,282

38,268

Lease liabilities

 

3,140

1,265

589

Trade and other payables

 

43,658

46,366

31,269

Current tax payable

 

365

717

1

Derivative financial instruments

 

3,001

1,284

-

Related party loans payable

 

-

-

1

Other financial liabilities

 

13,593

13,358

16,983

Bank overdrafts

 

2,004

1,875

1,934

Total current liabilities

 

122,323

143,147

89,045

Total liabilities

 

584,463

574,070

571,083

Total equity and liabilities

 

893,584

907,687

935,575

 

ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

Unaudited

six months ended

31 Dec 2023

Unaudited

six months ended

31 Dec 2022

 

Notes

US$'000

US$'000

Cash generated from operations

 

 

 

(Loss) / profit for the year before taxation

 

(23,560)

6,192

Adjusted for:

 

 

 

Depreciation and amortisation

 

766

282

Interest income

10

(1,514)

(1,738)

Share of profits from associates and joint ventures

3

(5,378)

(12,008)

Finance costs

11

19,691

18,210

IFRS 9 charges/ (credits)

 

(1)

(481)

Foreign currency losses

 

2,499

3,381

Straight-line rental income accrual

 

 (166)

(186)

Amortisation of lease premium

 

114

708

Share based payment expense

 

100

413

Loss on disposal of interest in associate

 

-

295

Loss on extinguishment on loan

 

-

1,166

Fair value adjustment on investment properties

2

19,954

(3,139)

Fair value adjustment on other financial liability

 

235

(47)

Fair value adjustment on derivative financial instruments

 

4,041

1,007

Other transaction costs

 

567

-

 

 

17,348

14,055

Changes to working capital

 

 

 

Movement in trade and other receivables

 

1,527

(1,815)

Movement in trade and other payables

 

 (10,920)

248

Cash generated from operations

 

7,955

12,488

Taxation paid

 

 (385)

(1,814)

Net cash generated from operating activities

 

7,570

10,674

 

 

 

 

Cash (utilised in)/ generated from investing activities

 

 

 

Acquisition of, and additions to investment properties

2

 (7,000)

(2,875)

Deposits received/ (paid) on investment properties

2

1,188

(2,558)

Additions to property, plant, and equipment

 

 (102)

(184)

Additions to intangible assets

 

 (52)

-

Acquisition of associates and joint ventures

 

-

(19,440)

Proceeds from partial disposal of associates and joint ventures

 

-

5,102

Dividends and interest received from associates and joint ventures

 

-

21,337

Interest received

 

-

1,739

Proceeds from partial disposal of investment in subsidiaries

 

-

1

Related party loans received

 

-

1,488

Other loans advanced

 

-

(2,189)

Proportional shareholder loans repayments from associates and joint ventures

3

1,382

1,507

Proceeds from proportional shareholder loans

 

-

14,273

Other loans repayment received

 

-

4,378

Net cash (utilised in)/ generated from investing activities

 

(4,584)

22,579

Proportional shareholder loans repaid

 

(2,135)

-

Receipt from derivative instrument

 

2,126

-

Ordinary dividends paid

 

-

(7,377)

Perpetual preferences note dividend paid

 

-

(1,228)

Proceeds from interest bearing borrowings

8

40,691

280,707

Settlement of interest-bearing borrowings

8

 (27,862)

(293,325)

Finance costs

 

(17,765)

(17,137)

Loan issue costs incurred

 

-

(7,939)

Payments of leases

 

(300)

(70)

Net cash utilised in financing activities

 

 (5,245)

(46,369)

Net movement in cash and cash equivalents

 

(2,259)

(13,116)

Cash at the beginning of the year

 

7,332

24,146

Effect of foreign exchange rates

 

 (301)

(384)

Total cash and cash equivalents at the end of the period

 

4,772

10,646

 

 

 

 

Total cash and cash equivalents comprise of:

 

 

 

Cash and cash equivalents

 

6,776

12,580

Less: Bank overdrafts

 

(2,004)

(1,934)

Total cash and cash equivalents at the end of the period

 

4,772

10,646

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

Ordinary share capital

Treasury shares reserve

Foreign currency translation reserve

Antecedent Dividend reserve

Accumulated losses

Preference share capital

Perpetual preference notes

Non-controlling interests

Total

Equity

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

Balance as at 1 July 2022

535,694

(16,212)

(5,191)

-

(177,990)

29,558

25,741

(22,224)

369,376

Profit / (loss) for the year

-

-

-

-

(23,631)

-

-

(1,942)

(25,573)

Other comprehensive income for the year

-

-

1,436

-

86

-

-

311

1,833

Total comprehensive income / (expense)

-

-

1,436

-

(23,545)

-

-

(1,631)

(23,740)

Share based payments

-

-

-

-

354

-

-

-

354

Share of other changes in equity of joint venture

-

-

-

-

7,474

-

-

-

7,474

Ordinary dividends declared

-

-

-

-

(19,188)

-

-

-

(19,188)

Treasury shares

-

(94)

-

-

-

-

-

-

(94)

Preferred dividend accrued on perpetual notes

-

-

-

-

(3,529)

-

1,086

-

(2,443)

Preferred dividend accrued on preference shares

-

-

-

-

(2,038)

2,038

-

-

-

Transaction with non-controlling interests without change in control

-

-

-

-

(796)

-

-

796

-

Reclassification of foreign currency translation reserve on sale of interest in subsidiary

-

-

75

-

-

-

-

-

75

Acquisition of subsidiary with own equity shares

-

-

-

-

(604)

-

-

-

(604)

Acquisition of additional interest in joint venture with own equity shares

-

-

-

-

(884)

-

-

-

(884)

Reclassification of foreign currency translation reserve on sale of associates

-

-

3,291

-

-

-

-

-

3,291

Dividends distributable to non-controlling shareholders

-

-

-

-

2,397

-

-

(2,397)

-

Balance as at 30 June 2023 (audited)

535,694

(16,306)

(389)

-

(218,349)

31,596

26,827

(25,456)

333,617

 

 

 

 

 

 

 

 

 

 

Balance as at 1 July 2022

535,694

(16,212)

(5,191)

-

(177,990)

29,558

25,741

(22,224)

369,376

Profit / (Loss) for the period

-

-

-

-

4,741

-

-

(1,136)

3,605

Other comprehensive expense for the period

-

-

(1,246)

-

-

-

-

(218)

(1,464)

Total comprehensive (expense) / income

-

-

(1,246)

-

4,741

-

-

(1,354)

2,141

Share based payments

-

-

-

-

413

-

-

-

413

Share of other changes in equity of associate

-

-

-

-

2,620

-

-

-

2,620

Reclassification of foreign currency translation reserve on part sale of interests in associate

-

-

771

-

-

-

-

-

771

Preferred dividend accrued on preference shares

-

-

-

-

(1,019)

1,019

-

-

-

Preferred dividend accrued on perpetual notes

-

-

-

-

(1,779)

-

548

-

(1,231)

Ordinary dividends paid

-

-

-

-

(9,599)

-

-

-

(9,599)

Transaction with non-controlling interests without change in control

-

-

-

-

(299)

-

-

300

1

Dividends distributable to non-controlling shareholders

-

-

-

-

2,397

-

-

(2,397)

-

Balance as at 31 December 2022 (unaudited)

535,694

(16,212)

(5,666)

-

(180,515)

30,577

26,289

(25,675)

364,492

 

 

 

 

 

 

 

 

 

 

Balance as at 1 July 2023

535,694

 (16,306)

 (389)

-

(218,349)

31,596

26,827

 (25,456)

333,617

Loss for the period

-

-

-

-

(18,542)

-

-

(2,485)

(21,027)

Other comprehensive (expense) / income for the period

-

-

(3,685)

-

-

-

-

29

(3,656)

Total comprehensive expense

-

-

(3,685)

-

(18,542)

-

-

(2,456)

(24,683)

Share based payments

-

-

-

-

100

-

-

-

100

Preferred dividend accrued on perpetual notes

-

-

-

-

(1,779)

-

1,779

-

-

Preferred dividend accrued on preference shares

-

-

-

-

(1,019)

1,019

-

-

-

Other movement in equity

-

-

-

-

123

-

-

(36)

87

Balance as at 31 December 2023 (unaudited)

535,694

(16,306)

(4,074)

-

(239,466)

32,615

28,606

(27,948)

309,121

NOTES TO THE FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of this abridged consolidated financial statements are set out below.

1.1 Basis of preparation

The unaudited abridged consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the IASB, interpretations issued by the IFRS Interpretations Committee (IFRIC); the Financial Pronouncements as issued by Financial Reporting Standards Council and the LSE and SEM Listings Rules. The unaudited abridged consolidated financial statements have been prepared on the going-concern basis and were approved for issue by the Board on 27 February 2024.

Going Concern

The directors are required to consider an assessment of the Group's ability to continue as a going concern when producing the interim abridged unaudited consolidated financial statements.

The Directors are of the opinion that after reconsideration of the items highlighted in the Integrated Annual Report published on 31st October 2023 (see page 91), the risks assessed are being managed and the Group continues to perform within the parameters of the going concern models prepared. The directors therefore concluded that it remains appropriate to prepare the financial statements on a going concern basis.

Functional and presentation currency

The abridged unaudited consolidated half year financial statements are prepared and are presented in United States Dollars (US$). Amounts are rounded to the nearest thousand, unless otherwise stated. Some of the underlying subsidiaries and associates have functional currencies other than the US$. The functional currency of those entities reflects the primary economic environment in which they operate.

Presentation of alternative performance measures

The Group presents certain alternative performance measures on the face of the income statement. Revenue is shown on a disaggregated basis, split between gross rental income and the straight-line rental income accrual. Additionally, if applicable, the total fair value adjustment on investment properties is presented on a disaggregated basis to show the impact of contractual receipts from vendors separately from other fair value movements. These are non-IFRS measures and supplement the IFRS information presented. The directors believe that the presentation of this information provides useful insight to users of the financial statements and assists in reconciling the IFRS information to industry wide EPRA metrics.

1.2 Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is a person or group that is responsible for allocating resources and assessing the performance of the operating segments. The Group has chosen the board as its chief operating decision-maker as it is the board that makes the Group's strategic decisions. Each operating entity has its own segmental and geographical allocation, and it is not allocated to more than one sector. Depreciation and amortization are not shown separately due to the immaterial nature thereof.

1.3 Significant accounting judgements, estimates and assumptions

The preparation of these abridged consolidated half year financial statements in conformity with IFRS requires the use of accounting estimates which by definition will seldom equal the actual results. Management also needs to exercise judgement in applying the group's accounting policies. Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectation of future events that may have a monetary impact on the entity and that are believed to be reasonable under the circumstances.

Significant Judgements

In the process of applying the Group’s accounting policies, management has made the following judgements.

Historical significant judgements which continue to affect the financial statements

Unconsolidated structured entity

Drive in Trading (DiT), a B-BBEE consortium, secured a facility of US$33.4 million from the Bank of America N.A (UK Branch) (“BoAML”) to finance its investment in Grit. The BoAML facility was granted to DiT after South Africa’s Government Employees Pension Fund (GEPF), represented by Public Investment Corporation SOC Limited (“PIC”), provided a guarantee to BoAML in the form of a Contingent Repurchase Obligation (“CRO”) for up to US$35 million. The terms of the CRO oblige PIC to acquire the loan granted to DiT should DiT default under the BoAML facility.

In order to facilitate the above, the Group agreed to de-risk 50% of PIC’s US$35 million exposure to the CRO, by granting PIC a guarantee whereby should BoAML enforce the CRO, the Group would indemnify PIC for up to 50% of the losses, capped at US$17.5 million, following the sale of the underlying securities, being the shares held by DiT in Grit.

Given the unusual structure of the transaction, the Group has determined that DiT has limited and predetermined activities and can be considered a structured entity under IFRS 12 as the design and purpose of DiT was to fund Grit rights issue and at the same time enable Grit to obtain B-BBEE credentials.

As the Group does not have both, power to direct the activities of DiT and an exposure to variable returns, the Group has exercised judgement on not to consolidate DiT but instead treat it as an unconsolidated structured entity due to DiT being a related party.

Freedom Asset Management (FAM) as a subsidiary

The Group has considered Freedom Asset Management (FAM) to be its subsidiary for consolidation purposes due to the Group’s implied control of FAM, as the Group has ability to control the variability of returns of FAM and has the ability to affect returns through its power to direct the relevant activities of FAM. The Group does not own any interest in FAM however it has exposure to returns from its involvement in directing the activities of FAM.

Grit Executive Share Trust (GEST) as a subsidiary

The Group has considered Grit Executive Share Trust (GEST) to be its subsidiary for consolidation purposes due to the Group’s implied control of GEST, as the Group’s ability to appoint the majority of the trustees and to control the variability of returns of GEST. The Group does not own any interest in GEST but is exposed to the credit risk and losses of (GEST) as the Group shall bear any losses sustained by GEST and shall be entitled to receive and be paid any profits made in respect of the purchase, acquisition, sale or disposal of unawarded shares in the instance where shares revert back to GEST.

Grit Executive Share Trust II (GEST II) as a subsidiary

During the financial year 2023, Grit Executive Share Trust II has been incorporated to act as trust for the new long term incentive plan of the Group. The trust will hold Grit shares to service the new scheme when the shares will vest to the employees in the future. The corporate set-up of GEST II is like GEST and the Group  has considered the latter to be a subsidiary due to the implied control that the Group has over it.

New significant judgements made during the current reporting period

African Development Managers Limited (“APDM”) accounted for as joint venture

The shareholders of APDM signed an amended shareholder agreement that changes the shareholder rights that existed in the legacy shareholder agreement. The most notable change to the agreement is that future decisions that are taken by the Investment Committee of APDM will require a simple majority to be implemented as compared to a seventy-five-percent threshold that was previously required. The Group has the right to appoint four out of seven members to the investment committee. Following the implementation of the amended shareholder agreement the Group can exercise control over the Investment Committee of APDM.

APDM was previously accounted for as a joint venture by the Group, despite having a majority shareholding in APDM. In preparing the abridged consolidated financial statements as at 31 December 2023, the directors exercised judgement in determining APDM accounting treatment and concluded that APDM continue to be treated as a joint venture for the reporting period ended 31 December 2023, with consolidation being adopted with effect from 1 January 2024, which is deemed to be the date on which the rights associated with the changes made to the amended shareholder agreement, and which transfers control to the Group, being implemented.

Gateway Real Estate Africa Limited (“GREA”) accounted for as joint venture

The shareholders of GREA signed an amended shareholder agreement that changes the shareholder rights that existed in the legacy shareholder agreement. The most notable change to the agreement is that future decisions that are taken by the Board of Directors of GREA will require a simple majority to be implemented as compared to a seventy-five-percent threshold that was previously required. The changes in the shareholder agreement provide for the Group to appoint four out of seven board members. Following the implementation of the amended shareholder agreement the Group can exercise control over the GREA board of directors.

GREA was previously accounted for as a joint venture by the Group, despite having a majority shareholding in GREA. In preparing the abridged consolidated financial statements as at 31 December 2023, the directors exercised judgement in determining GREA’s accounting treatment and concluded that GREA continue to be treated as a joint venture for the reporting period ended 31 December 2023, with consolidation being adopted with effect from 1 January 2024, which is deemed to be the date on which the rights associated with the changes made to the amended shareholder agreement, and which transfers control to the Group, being implemented.

 

Significant Estimates

The principal areas where such estimations have been made are:

Fair value of investment properties

The fair value of investment properties is determined using a combination of the discounted cash flows method and the income capitalisation valuation method, using assumptions that are based on market conditions existing at the end of the relevant reporting date. For further details on the valuation method, judgements and assumptions made, refer to note 2.

Taxation

Judgements and estimates are required in determining the provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax inspection issues in the jurisdictions in which it operates based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the year in which such determination is made.

The Group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred tax assets requires the Group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each relevant jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Group to realise the net deferred tax assets recorded at the end of the reporting period could be impacted.

2. INVESTMENT PROPERTIES

 

As at

31 Dec 2023

As at

30 Jun 2023

 

US$'000

US$'000

Net carrying value of properties

615,779

628,777

 

 

 

Movement for the year excluding straight-line rental income accrual, lease incentive and right of use of land

 

 

Investment property at the beginning of the year

611,854

588,229

Transfer from associate on step up to subsidiary

-

11,036

Reduction in property value on asset acquisition

-

(1,207)

Other capital expenditure and construction

7,000

13,683

Foreign currency translation differences

(38)

4,221

Revaluation of properties at end of year

(19,954)

(4,108)

As at period end

598,862

611,854

 

 

 

Reconciliation to consolidated statement of financial position and valuations

 

 

Carrying value of investment properties excluding right of use of land, lease incentive and straight-line income accrual             

598,862

611,854

Right of use of land

6,565

6,599

Lease incentive

3,169

3,311

Straight-line rental income accrual

7,183

7,013

Total valuation of properties

615,779

628,777

Lease incentive asset included in investment property

In accordance with IFRS 16, rental income is recognised in the Group income statement on a straight-line basis over the lease term. This includes the effect of lease incentives given to tenants. The Group has granted lease incentives to tenants (in the form of rent-free periods). The result is a receivable balance included within investment property in the balance sheet as those are balances that must be considered when reconciling to valuation figures to prevent double counting of assets. This balance is subject to impairment testing under IFRS 9 using the simplified approach to expected credit loss of IFRS 9.

 

As at

31 Dec 2023

As at

30 Jun 2023

 

US$'000

US$'000

Lease incentive receivables before impairment

3,714

3,856

Impairment of lease incentive receivables

(545)

(545)

Net lease incentive included within investment property

3,169

3,311

 

Summary of valuations by reporting date

Most recent independent valuation date

Valuer (for the most recent valuation)

Sector

Country

As at

31 Dec 2023

US$'000

As at

30 Jun 2023

US$'000

Commodity House Phase I

31-Dec-23

Directors' valuation

Office

Mozambique

54,209

54,094

Commodity House Phase II

31-Dec-23

Directors' valuation

Office

Mozambique

19,494

19,727

Hollard Building

31-Dec-23

Directors' valuation

Office

Mozambique

20,676

20,847

Vodacom Building

31-Dec-23

Directors' valuation

Office

Mozambique

51,870

53,362

Zimpeto Square

31-Dec-23

Directors' valuation

Retail

Mozambique

3,344

3,303

Bollore Warehouse

31-Dec-23

Directors' valuation

Light industrial

Mozambique

10,104

10,770

Anfa Place Mall

31-Dec-23

Directors' valuation

Retail

Morocco

67,302

73,357

Tamassa Resort

31-Dec-23

Directors' valuation

Hospitality

Mauritius

55,955

54,674

VDE Housing Compound

31-Dec-23

Directors' valuation

Corporate accommodation

Mozambique

45,052

50,238

Imperial Distribution Centre

31-Dec-23

Directors' valuation

Light industrial

Kenya

20,019

20,210

Mara Viwandani

31-Dec-23

Directors' valuation

Light industrial

Kenya

2,330

2,330

Buffalo Mall

31-Dec-23

Directors' valuation

Retail

Kenya

10,275

11,036

Mall de Tete

31-Dec-23

Directors' valuation

Retail

Mozambique

13,478

13,675

Acacia Estate

31-Dec-23

Directors' valuation

Corporate accommodation

Mozambique

70,949

73,120

5th Avenue

31-Dec-23

Directors' valuation

Office

Ghana

15,785

16,066

Capital Place

31-Dec-23

Directors' valuation

Office

Ghana

20,480

20,470

Mukuba Mall

31-Dec-23

Directors' valuation

Retail

Zambia

59,937

60,040

Orbit Complex

31-Dec-23

Directors' valuation

Light industrial

Kenya

39,293

39,470

Tatu Warehouse- Tip 1

31-Dec-23

Directors' valuation

Light industrial

Kenya

6,642

6,670

Club Med Cap Skirring Resort

31-Dec-23

Directors' valuation

Hospitality

Senegal

28,585

25,318

Total valuation of investment properties directly held by the Group

 

615,779

628,777

Deposits paid on Imperial Distribution Centre Phase 2

 

 

 

 

1,249

2,376

Deposits paid on Capital Place Limited

 

 

 

 

3,550

3,550

Total deposits paid on investment properties

 

4,799

5,926

Total carrying value of property portfolio including deposits paid

 

620,578

634,703

 

 

 

 

 

 

 

Investment properties held within associates and joint ventures - Group share

 

 

Kafubu Mall - Kafubu Mall Limited (50%)

31-Dec-23

Directors' valuation

Retail

Zambia

9,782

12,865

CADS II Building - CADS Developers Limited (50%)

31-Dec-23

Directors' valuation

Office

Ghana

12,310

12,300

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

31-Dec-23

Directors' valuation

Retail

Zambia

27,439

27,570

Gateway Real Estate Africa1 Ltd (51.48%)

31-Dec-23

Director’s valuation/ Knight Frank

Other Investments

Mauritius

81,160

73,369

Total of investment properties acquired through associates and joint ventures

130,691

126,104

 

Total portfolio

751,269

760,807

 

 

 

Functional currency of total property portfolio

 

 

United States Dollars

 

 

 

 

587,315

592,263

Euros

 

 

 

 

84,540

79,992

Moroccan Dirham

 

 

 

 

67,302

73,357

Kenyan Shilling

 

 

 

 

2,330

2,330

Zambian Kwacha

 

 

 

 

9,782

12,865

Total portfolio

 

 

 

 

751,269

760,807

 

1 Independent valuation was performed at 31 December 2023 by Knight Frank for DH1 Elevation and DH3 Rosslyn Grove using the discounted cash flow method.

All valuations that are performed in the functional currency of the relevant property company are converted to United States Dollars at the eective closing rate of exchange. All valuations have been undertaken in accordance with the RICS Valuation Standards that were in eect at the relevant valuation date and are further compliant with International Valuation Standards and International Financial Reporting Standards. All of the investment properties except for DH1 Elevation and DH3 Rosslyn Grove were internally valued using Director’s valuation. The discounted cash flow method was used for all buildings and all land parcels were valued using the comparable method.

3. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

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

 

 

 

As at

31 Dec 2023

As at

30 Jun 2023

Name of joint venture

Country 

% Held

US$'000

US$'000

Kafubu Mall Limited1

Zambia

50.00%

9,468

12,531

Cosmopolitan Shopping Centre Limited1

Zambia

50.00%

27,370

27,495

CADS Developers Limited1

Ghana

50.00%

4,187

4,482

Africa Property Development Managers Ltd1

Mauritius

78.95%

31,653

29,073

Gateway Real Estate Africa Ltd1

Mauritius

51.48%

124,192

123,513

Carrying value of joint ventures

 

 

196,870

197,094

 

 

 

 

 

1

The percentage of ownership interest during the period ended 31 December 2033 did not change.

All investments in joint ventures are private entities and do not have quoted prices available.

Reconciliation to carrying value in joint ventures

 

Kafubu Mall Limited

Africa Property Development Managers Ltd

Gateway Real Estate Africa Ltd

CADS Developers Limited

Cosmopolitan Shopping Centre Limited

Total

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

Balance at the beginning of the year

12,531

29,073

123,513

4,482

27,495

197,094

Profit / (losses) from associates and joint ventures

1,487

2,580

735

(240)

816

5,378

Revenue

538

-

2,757

300

1,211

4,806

Property operating expenses and construction costs

(87)

-

(266)

(60)

(232)

(645)

Admin expenses and recoveries

(7)

(2,764)

711

(3)

(4)

(2,067)

Other income

-

4,911

-

-

-

4,911

  Net impairment charge on financial assets

-

-

445

-

-

445

Unrealised foreign exchange gains/(losses)

-

468

(395)

(1)

33

105

Transaction costs

-

2

-

-

-

2

Interest income

-

-

1,398

-

1

1,399

Finance charges

(4)

(67)

(1,617)

(482)

-

(2,170)

Fair value movement on investment property

1,074

-

(1,325)

6

(157)

(402)

Fair value adjustment on other financial asset

-

-

-

-

-

-

Current tax

(27)

-

6

-

(36)

(57)

Deferred tax

-

30

(979)

-

-

(949)

Repayment of proportionate shareholders loan

(386)

-

-

(55)

(941)

(1,382)

Consolidation elimination

-

-

(56)

-

-

(56)

Foreign currency translation differences

(4,164)

-

-

-

-

(4,164)

Carrying value of joint ventures- 31 December 2023

9,468

31,653

124,192

4,187

27,370

196,870

4. OTHER LOANS RECEIVABLE

 

As at

31 Dec 2023

As at

30 Jun 2023

 

US$'000

US$'000

African Property Investments Limited

21,034

21,034

Drift (Mauritius) Limited 2

8,966

8,637

Drift (Mauritius) Limited 3

-  

2

Pangea 2 Limited

6

6

IFRS 9 - Impairment on financial assets (ECL)

(8,674)

(8,674)

As at period end

21,332

21,005

 

 

 

Classification of other loans:

 

 

Non-current assets

21,332

21,005

Current assets

-  

-

As at period end

21,332

21,005

5. TRADE AND OTHER RECEIVABLES

 

As at

31 Dec 2023

As at

30 Jun 2023

 

US$'000

US$'000

Trade receivables

13,961

12,733

Total allowance for credit losses and provisions

(4,695)

(5,682)

IFRS 9 - Impairment on financial assets (ECL)

(1,494)

(1,496)

IFRS 9 - Impairment on financial assets (ECL) Management overlay on specific provisions

(3,201)

(4,186)

Trade receivables – net

9,266

7,051

Accrued Income

2,531

2,603

Loan interest receivable

75

-

Deposits paid

16

77

VAT recoverable

9,271

10,293

Purchase price adjustment account

961

961

Deferred expenses and prepayments

6,717

3,695

IFRS 9 - Impairment on other financial assets (ECL)

(3,470)

(3,470)

Rental guarantees receivable

-

52

Sundry debtors

466

764

Other receivables

16,567

14,975

As at period end

25,833

22,026

 

 

 

Classification of trade and other receivables:

 

 

Non-current assets

3,500

3,448

Current assets

22,333

18,578

As at period end

25,833

22,026

6. PREFERENCE SHARE CAPITAL

 

As at

31 Dec 2023

As at

30 Jun 2023

 

US$'000

US$'000

Opening balance

31,596

29,558

Preference shares dividend accrued

1,019

2,038

As at period end

32,615

31,596

7. PERPETUAL PREFERENCE NOTES

 

As at

31 Dec 2023

As at

30 Jun 2023

 

US$'000

US$'000

Opening balance

26,827

25,741

Preferred dividend accrued

1,779

3,529

Preferred dividend paid

-

(2,443)

As at period end

28,606

26,827

Perpetual Preference Note

The Group, through its wholly owned subsidiary, Grit Services Limited, has issued perpetual preference note to two investors Ethos Mezzanine Partners GP Proprietary Limited and Blue Peak Private Capital GP. The total cash proceeds received from the two investors for the issuance of the perpetual note amounted to US$31.5million.

Included below are salient features of the notes:

The Note has a cash coupon of 9% per annum and a 4% per annum redemption premium. The Group at its sole discretion may elect to capitalise cash coupons.

Although perpetual in tenor, the note carries a material coupon step-up provision after the fifth anniversary that is expected to result in economic maturity and redemption by the Group on or before that date.

The Note may be voluntarily redeemed by the Group at any time, although there would be call-protection costs associated with doing so before the third anniversary.

The Note, if redeemed in cash by the Group, can offer the noteholders an additional return of not more than 3% per annum, linked to the performance of Grit ordinary shares over the duration of the Note.

The noteholders have the option to convert the outstanding balance of the note into Grit equity shares. If such option is exercised by the noteholders, the number of shares to be issued shall be calculated based on a pre-defined formula as agreed between both parties in the note subscription agreement.

The Group has classified eighty-five percent of the instrument as equity because for this portion of the instrument, the Group always will have an unconditional right to avoid delivery of cash to the noteholders. The remaining fifteen percent of the instrument has been classified as debt and included as part of interest-bearing borrowings. The debt portion arises because the note contains terms that can give the noteholders the right to ask for repayment of fifteen percent of the outstanding amount of the notes on the occurrence of some future events that are not wholly within the control of the Group. The directors believe that the probability that those events will happen are remote but for classification purposes, because the Group does not have an unconditional right to avoid delivering cash to the noteholders on fifteen percent of the notes, this portion of the instrument has been classified as liability.

The accrued dividend on the equity portion of the note has been recognised as a deduction into equity, that is a reduction of retained earnings.

8. INTEREST-BEARING BORROWINGS

The following debt transactions were concluded during the period under review:

Increase in the Grit Services Limited corporate facility with NCBA Bank Kenya amounting to c. US$12.0 million used as an equity bridge.

Refinance of Tamassa by Mara Delta Properties Mauritius Limited, through State Bank of Mauritius amounting to c.US$13.2 million.

 

Partial settlement of State Bank of Mauritius corporate facility held by Grit Real Estate Income Group Limited amounting to c.US$10.0 million.

Maubank facility held by Freedom Asset Management Limited of US$0.7 million was settled during the period.

US$3.1 million was settled on the RCF facility held by Girt Services Limited and linked to the SBSA led syndication during the period.

Amortisation of the Investec facility linked to AnfaPlace Mall amounting to US$1.1 million.

 

 

 

As at

31 Dec 2023

As at

30 Jun 2023

 

US$'000

US$'000

Non-current liabilities

355,149

318,453

Current liabilities

56,562

78,282

 As at period end

411,711

396,735

 

 

 

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

 

 

United States Dollars

290,985

294,114

Euros

121,011

103,132

Mauritian Rupees

863

1,025

 

412,859

398,271

Interest accrued

7,424

7,725

Unamortised loan issue costs

(8,572)

(9,261)

As at period end

411,711

396,735

 

 

 

Movement for the period

 

 

Balance at the beginning of the year

396,735

425,066

Proceeds of interest bearing-borrowings

40,691

324,459

Loan reduced through disposal of subsidiary

-

(19,404)

Loan acquired through asset acquisition

-

4,369

Loan issue costs

(936)

(7,355)

Amortisation of loan issue costs

1,625

3,368

Foreign currency translation differences

1,759

3,561

Interest accrued

(301)

2,798

Debt settled during the year

(27,862)

(340,127)

As at period end

411,711

396,735

Analysis of facilities and loans in issue

 

 

 

As at

31 Dec 2023

As at

30 Jun 2023

Lender

Borrower

Initial facility

US$'000

US$'000

Financial institutions

 

 

 

 

Standard Bank South Africa

Commotor Limitada

US$140.0m

140,000

140,000

Standard Bank South Africa

Zambian Property Holdings Limited

US$70.4m

64,400

64,400

Standard Bank South Africa

Grit Services Limited

€33m

30,752

31,698

Standard Bank South Africa

Grit Services Limited

US$3.6m

-

3,633

Standard Bank South Africa

Capital Place Limited

US$6.2m

6,200

6,200

Standard Bank South Africa

Casamance Holdings Limited

€6.5m

7,295

7,198

Standard Bank South Africa

Grit Accra Limited

US$6.4m

8,400

8,400

Standard Bank South Africa

Casamance Holdings Limited

€7.0m

-

7,618

Standard Bank South Africa

Casamance Holdings Limited

Eur 11m

11,088

-

Standard Bank South Africa

Grit Services Limited

US$ 1.8m

1,837

-

Total Standard Bank Group

 

 

269,972

269,147

State Bank of Mauritius

Mara Delta Properties Mauritius Limited

€12m

13,273

-

State Bank of Mauritius

Mara Delta Properties Mauritius Limited

€22.3m

24,666

24,336

State Bank of Mauritius

Grit Real Estate Income Group Limited

Equity Bridge US$20.0m

-

10,000

State Bank of Mauritius

Mara Delta Properties Mauritius Limited

RCF Mur 72m

863

1,025

Total State Bank of Mauritius

 

 

38,802

35,361

Investec South Africa

Freedom Property Fund SARL

€36.0m

33,938

31,571

Investec South Africa

Freedom Property Fund SARL

US$8.7m

-

2,722

Investec Mauritius

Grit Real Estate Income Group Limited

US$0.5m

-

430

Total Investec Group

 

 

33,938

34,723

Maubank Mauritius

Freedom Asset Management

€4.0m

-

711

Total Maubank

 

 

-

711

Nedbank South Africa

Warehously Limited

US$8.6m

8,635

8,635

Nedbank South Africa

Grit Real Estate Income Group Limited

US$7m

7,000

7,000

Nedbank South Africa

Capital Place Limited

US$6.2m

-

-

Total Nedbank South Africa

 

 

15,635

15,635

NCBA Bank Kenya

Grit Services Limited

US$30m

29,484

17,500

Total NCBA Bank Kenya

 

 

29,484

17,500

Ethos Private Equity

Grit Services Limited

US$2.4m

2,475

2,475

Blue Peak Private Equity

Grit Services Limited

US$2.2m

2,250

2,250

Total Private Equity

 

 

4,725

4,725

International Finance Corporation

Stellar Warehousing and Logistics Limited 

US$16.1m

16,100

16,100

Total International Finance Corporation

 

 

16,100

16,100

Housing Finance Corporation

Buffalo Mall Naivasha Limited

US$4.85m

4,204

4,369

Total Housing Finance Corporation

 

 

4,204

4,369

Total loans in issue

 

 

412,860

398,271

plus: interest accrued

 

 

7,424

7,725

less: unamortised loan issue costs

 

 

(8,573)

(9,261)

As at period end

 

 

411,711

396,735

Fair value of borrowings is not materially different to their carrying value amounts since interest payable on those borrowings are either close to their current market rates or the borrowings are of short-term in nature.

9. GROSS PROPERTY INCOME

 

Six months ended

31 Dec 2023

Six months ended

31 Dec 2022

 

US$'000

US$'000

Contractual rental income

23,752

22,600

Retail parking income

878

856

Straight-line rental income accrual

166

186

Other rental income (Lease incentives)

(260)

(58)

Gross rental income

24,536

23,584

Asset management fees

717

526

Recoverable property expenses

3,176

2,804

Total gross property income

28,429

26,914

10. INTEREST INCOME

 

Six months ended

31 Dec 2023

Six months ended

31 Dec 2022

 

US$'000

US$'000

Interest on loans to partners

1,400

1,653

Interest on loans to related parties

53

7

Interest on property deposits paid

61

-

Other Interest

-

78

Total interest income

1,514

1,738

11. FINANCE COSTS

 

Six months ended

31 Dec 2023

Six months ended

31 Dec 2022

 

US$'000

US$'000

Interest-bearing borrowings - financial institutions

16,429

15,061

Early settlement charges

-

46

Amortisation of loan issue costs

1,625

2,307

Preference share dividends

499

462

Interest on lease liabilities

164

16

Interest on loans to proportional shareholders

913

275

Interest on bank overdraft

61

43

Total finance costs

19,691

18,210

 

 

12. Segmental reporting

Consolidated segmental analysis

The Group reports on a segmental basis in terms of geographical location and type of property. Geographical location is split between Botswana, Senegal, Morocco, Mozambique, Zambia, Kenya, Ghana and Mauritius. In terms of type of property, the Group has investments in the hospitality, retail, office, light industrial and corporate accommodation sectors.

 

Senegal

Morocco

Mozambique

Zambia

Kenya

Ghana

Mauritius

Total

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

Geographical location 31 December 2023

 

 

 

 

 

 

 

 

Reportable segment profit and loss

 

 

 

 

 

 

 

 

Gross rental income

1,079

4,075

13,274

2,809

2,701

1,734

2,592

28,264

Straight-line rental income accrual

23

85

(138)

-

308

(112)

(1)

165

Gross property income

1,102

4,160

13,136

2,809

3,009

1,622

2,591

28,429

Property operating expenses

-

(2,149)

(2,310)

(333)

(238)

(196)

273

(4,953)

Net property income

1,102

2,011

10,826

2,476

2,771

1,426

2,864

23,476

Other income

-

-

26

-

-

-

82

108

Administrative expenses

(98)

(172)

(565)

(12)

(79)

(247)

(6,756)

(7,929)

Net impairment (charge) / credit on financial assets

-

961

27

-

(9)

-

-

979

Profit / (loss) from operations

1,004

2,800

10,314

2,464

2,683

1,179

(3,810)

16,634

Fair value adjustment on investment properties

(2,905)

(6,245)

(9,733)

(118)

(1,346)

(150)

543

(19,954)

Fair value adjustment on other financial liability

-

-

-

-

-

-

(235)

(235)

Fair value adjustment on derivatives financial instruments

-

-

-

-

-

-

(4,041)

(4,041)

Share based payment expense

-

-

-

-

-

-

(100)

(100)

Share of profits / (losses) from associates and joint ventures

-

-

-

2,303

-

(240)

3,315

5,378

Loss on derecognition of loans and other receivables

-

-

-

-

-

-

1

1

Foreign currency gains / (losses)

(18)

(500)

20

76

(491)

(61)

(1,525)

(2,499)

Other transaction costs

-

-

(4)

-

-

-

(563)

(567)

Profit / (loss) before interest and taxation

(1,919)

(3,945)

597

4,725

846

728

(6,415)

(5,383)

Interest income

-

-

-

-

-

-

1,514

1,514

Finance costs

(105)

(1,693)

(7,906)

-

(1,721)

(919)

(7,347)

(19,691)

Profit / (loss) for the year before taxation

(2,024)

(5,638)

(7,309)

4,725

(875)

(191)

(12,248)

(23,560)

Taxation

-

(161)

2,318

(82)

489

(71)

40

2,533

Profit / (loss) for the year after taxation

(2,024)

(5,799)

(4,991)

4,643

(386)

(262)

(12,208)

(21,027)

Reportable segment assets and liabilities

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

 

Investment properties

28,585

67,302

289,176

59,936

78,559

36,265

55,956

615,779

Deposits paid on investment properties

-

-

-

-

-

-

4,799

4,799

Property, plant and equipment

-

(2)

136

-

6

18

3,936

4,094

Intangible assets

-

-

-

-

-

-

308

308

Other investments

-

-

-

-

-

-

3

3

Investment in associates and joint ventures

-

-

-

36,838

-

4,186

155,846

196,870

Related party loans receivable

-

-

-

-

-

-

129

129

Other loans receivable

-

-

-

-

-

-

21,332

21,332

Trade and other receivables

-

3,500

-

-

-

-

-

3,500

Deferred tax

-

1,470

7,201

-

590

2,312

1,603

13,176

Total non-current assets

28,585

72,270

296,513

96,774

79,155

42,781

243,912

859,990

Current assets

 

 

 

 

 

 

 

 

Trade and other receivables

1,248

1,457

4,703

-

7,205

762

6,958

22,333

Current tax receivable

-

14

1,030

-

927

1,314

300

3,585

Related party loans receivable

-

-

-

-

-

-

882

882

Derivative financial instruments

-

-

-

-

-

-

18

18

Cash and cash equivalents

184

789

3,094

183

188

105

2,233

6,776

Total assets

30,017

74,530

305,340

96,957

87,475

44,962

254,303

893,584

Liabilities

 

 

 

 

 

 

 

 

Total liabilities

1,518

51,761

193,890

6,785

36,955

40,716

252,838

584,463

Net assets

28,499

22,769

111,450

90,172

50,520

4,246

1,465

309,121

 

 

 

 

Other Investments

Hospitality

Retail

Office

Light industrial

Corporate Accommodation

Corporate

Total

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

Type of property 31 December 2023

 

 

 

 

 

 

 

 

Reportable segment profit and loss

 

 

 

 

 

 

 

 

Gross property income

-

2,977

8,080

7,675

3,089

5,892

716

28,429

Property operating expenses

-

-

(2,997)

(1,153)

(122)

(1,055)

374

(4,953)

Net property income

-

2,977

5,083

6,522

2,967

4,837

1,090

23,476

Other income

-

-

-

-

-

26

82

108

Administrative expenses

-

(265)

(274)

(366)

(120)

(259)

(6,645)

(7,929)

Net impairment (charge) / credit on financial assets

-

-

1,007

(2)

(26)

-

-

979

Profit/(loss) from operations

-

2,712

5,816

6,154

2,821

4,604

(5,473)

16,634

Fair value adjustment on investment properties

-

(2,365)

(7,252)

(2,083)

(1,248)

(7,006)

-

(19,954)

Fair value adjustment on other financial liability

-

-

-

-

-

-

(235)

(235)

Fair value adjustment on derivatives financial instruments

-

-

-

-

-

-

(4,041)

(4,041)

Share based payment expense

-

-

-

-

-

-

(100)

(100)

Share of profits / (losses) from associates and joint ventures

3,315

-

2,303

(240)

-

 

-

5,378

Loss on derecognition of loans and other receivables

-

-

-

-

-

-

1

1

Net impairment (charge) / credit on financial assets

-

-

28

6

-

-

(34)

-

Foreign currency gains / (losses)

-

(568)

(467)

(89)

(443)

46

(978)

(2,499)

Other transaction costs

-

-

-

(3)

-

(1)

(563)

(567)

Profit/(loss) before interest and taxation

3,315

(221)

428

3,745

1,130

(2,357)

(11,423)

(5,383)

Interest income

-

-

-

-

-

-

1,514

1,514

Finance costs

-

(1,866)

(1,982)

(8,817)

(1,434)

(6)

(5,586)

(19,691)

Profit / (loss) for the year before taxation

3,315

(2,087)

(1,554)

(5,072)

(304)

(2,363)

(15,495)

(23,560)

Taxation

-

(58)

(268)

493

753

1,515

98

2,533

Profit / (loss) for the year after taxation

3,315

(2,145)

(1,822)

(4,579)

449

(848)

(15,397)

(21,027)

Reportable segment assets and liabilities

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

 

Investment properties

-

84,540

154,336

182,514

78,388

116,001

-

615,779

Deposits paid on investment properties

-

-

-

-

-

-

4,799

4,799

Property, plant and equipment

-

-

3

9

-

127

3,955

4,094

Intangible assets

-

-

37

-

-

-

271

308

Other investments

-

-

-

-

-

-

3

3

Investment in associates and joint ventures

155,846

-

36,838

4,186

-

-

-

196,870

Related party loans receivable

-

-

-

-

-

-

129

129

Other loans receivable

-

-

-

-

-

-

21,332

21,332

Trade and other receivables

-

-

3,500

-

-

-

-

3,500

Deferred tax

-

1,525

3,947

4,591

1,003

2,032

78

13,176

Total non-current assets

155,846

86,065

198,661

191,300

79,391

118,160

30,567

859,990

Current assets

 

 

 

 

 

 

 

 

Trade and other receivables

-

1,630

1,619

910

7,630

3,811

6,733

22,333

Current tax receivable

-

196

483

1,807

898

45

156

3,585

Related party loans receivable

-

-

-

-

-

-

882

882

Derivative financial instruments

-

-

-

-

-

-

18

18

Cash and cash equivalents

-

226

1,189

1,120

153

1,878

2,210

6,776

Total assets

155,846

88,117

201,952

195,137

88,072

123,894

40,566

893,584

Liabilities

 

 

 

 

 

 

 

 

Total liabilities

-

59,327

67,425

199,467

33,049

30,148

195,047

584,463

Net assets

155,846

28,790

134,527

(4,330)

55,023

93,746

(154,481)

309,121

Major customers

Rental income stemming from the Total Group represented approximately 10.2% of the Group’s total contractual rental income for the period, with Vulcan 9.7%, the US Embassy 8.8%, Vodacom Mozambique 6.7 %, and Tamassa Lux 5.0 %, making up the top 5 tenants of the Group.

13. Basic and diluted earnings per ordinary share

 

Attributable earnings

Weighted average number of shares

Cents per share

 

Six months ended

31 Dec 2023

Six months ended

31 Dec 2022

Six months ended

31 Dec 2023

Six months ended

31 Dec 2022

Six months ended

31 Dec 2023

Six months ended

31 Dec 2022

 

US$'000

US$'000

Shares '000

Shares '000

US Cents

US Cents

Earnings per share - Basic

(18,542)

4,741

482,144

482,373

(3.85)

0.98

Earnings per share - Diluted

(18,542)

4,741

482,144

482,373

(3.85)

0.98

14. sUBSEQUENT EVENTS

On 16 February 2024, shareholders approved the disposal of interests in Bora Africa and Acacia Estates to GREA which will form part of Grit’s equity contribution to the GREA US$100 million recapitalisation that is expected to conclude in March 2024. The disposal of properties at or close to book value achieves the Board’s strategy of additional asset recycling and further reinforces the Group’s audited net asset value. By concluding the GREA Capital Raise with these proceeds, the Group (including GREA) receives a cash injection of US$48.5 million from the PIC’s subscription at NAV. This equity will be initially utilised to reduce the Group’s more expensive debt, whilst over the medium term is expected to be invested by GREA, upon careful capital allocation assessment, into risk mitigated and accretive development projects that are expected to meaningfully contribute to ESG impact, accelerated NAV growth and fee income generation to the Group as is contemplated under the Grit 2.0 strategy.

15. CAPITAL COMMITMENTS

Club Med Senegal redevelopment EUR20.5 million for the period up to January 2026. 

Drive in Trading guarantee settlement US$17.5 million by March 2024.

16. EPRA financial metrics

16a. EPRA earnings

Basis of Preparation

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

The Directors have chosen to disclose:

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

EPRA net asset value to assist in comparisons with similar businesses in the real estate sector. EPRA net asset value is a definition of net asset value as set out by the European Public Real Estate Association. EPRA net asset value represents net asset value after adjusting for net impairment on financial assets (ECL), fair value of financial instruments, and deferred tax relating to revaluation of properties (collectively the "EPRA net asset value adjustments"). The reconciliation for EPRA net asset value is detailed in the table below;

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

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

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

 

UNAUDITED
31 Dec 2023

UNAUDITED
31 Dec 2023

UNAUDITED
31 Dec 2022

UNAUDITED
31 Dec 2022

 

$'000

Per Share (Diluted)
(Cents Per Share)

$'000

Per Share (Diluted)
(Cents Per Share)

EPRA Earnings

2,813

0.59

2,202

0.46

Total Company Specific Adjustments

2,151

0.44

2,737

0.56

Adjusted EPRA Earnings

4,964

1.03

4,939

1.02

Total Company Specific Distribution Adjustments

4,990

1.04

7,400

1.54

TOTAL DISTRIBUTABLE EARNINGS AVAILABLE TO EQUITY PROVIDERS

9,954

2.07

12,339

2.56

 

 

 

 

 

 

UNAUDITED
31 Dec 2023

UNAUDITED
31 Dec 2023

AUDITED
30 Jun 2023

AUDITED
30 Jun 2023

 

$'000

Per Share (Diluted)
(Cents Per Share)

$'000

Per Share (Diluted)
(Cents Per Share)

EPRA NRV

327,161

68.12

349,656

72.80

EPRA NTA

309,372

64.41

335,918

69.94

EPRA NDV

275,848

57.43

300,650

62.60

 

 

 

 

 

Distribution shares

UNAUDITED
31 Dec 2023

 

Shares '000

Weighted average shares in issue

495,092

Less: Weighted average treasury shares for the year

(15,381)

Add: Weighted average shares vested shares in long term incentive scheme

573

EPRA SHARES

480,284

Less: Vested shares in consolidated entities

(573)

DISTRIBUTION SHARES

479,711

 

Grit presents European Real Estate Association (EPRA) earnings and other metrics which is non-IFRS financial information.

 

UNAUDITED
31 Dec 2023

 

US$'000

EPRA Earnings Calculated as follows:

 

Basic Loss attributable to the owners of the parent

(18,542)

Add Back:

 

 - Fair value adjustment on investment properties

19,954

 - Fair value adjustments included under income from associates

403

 - Change in value on other financial asset

235

 - Change in value on derivative financial instruments

4,041

 - Goodwill written-off

340

 - Acquisition costs not capitalised

562

 - Deferred tax in relation to the above

(1,201)

 - Non-controlling interest included in basic earnings

(2,979)

EPRA EARNINGS

2,813

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

0.59

Company specific adjustments

 

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

2,552

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

(476)

 - Profit or loss on disposal of property, plant and equipment

1

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

34

 - Impairment of loan and other receivables

71

 - Non-controlling interest included above

(278)

 - Deferred tax in relation to the above

247

Total Company Specific adjustments

2,151

ADJUSTED EPRA EARNINGS

4,964

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

1.03

 

COMPANY SPECIFIC ADJUSTMENTS TO EPRA EARNINGS

1.

Unrealised foreign exchange gains or losses

 

The foreign currency revaluation of assets and liabilities in subsidiaries gives rise to non-cash gains and losses that are non-cash in nature. These adjustments (similar to those adjustments that are recorded to the foreign currency translation reserve) are added back to provide a true reflection of the operating results of the Group.

2.

Straight-line leasing (non-cash rental)

 

Straight-line leasing adjustment and amortised lease incentives under IFRS relate to non-cash rentals over the period of the lease. This inclusion of such rental does not provide a true reflection of the operational performance of the underlying property and are therefore removed from earnings.

3.

Amortisation of intangible asset (right of use of land)

 

Where a value is attached to the right of use of land for leasehold properties, the amount is amortised over the period of the leasehold rights. This represents a non-cash item and is adjusted to earnings.

4

Impairment on loans and other receivables

 

Provisions for expected credit loss are non-cash items related to potential future credit loss on non- property operational provisions and is therefore added back to provide a better reflection of underlying property performance. The add back excludes and specific provisions for against tenant accounts.

5

Non-Controlling interest

 

Any non-controlling interest related to the company specific adjustments.

6.

Other deferred tax (non-cash)

 

Any deferred tax directly related to the company specific adjustments.

 

16b. Company distribution calculation

 

UNAUDITED
31 Dec 2023

 

US$'000

Adjusted EPRA Earnings

4,964

Company specific distribution adjustments

 

 - VAT Credits utilised on rentals

3,176

 - Listing and set-up costs under administrative expenses

5

 - Depreciation and amortisation

834

 - Share based payments

100

 - Dividends

(205)

 - Right of use imputed leases

238

 - Amortisation of capital funded debt structure fees

1,625

 - Deferred tax in relation to the above

(848)

 - Non-controlling interest included above

65

Total company specific distribution adjustments

4,990

TOTAL DISTRIBUTABLE EARNINGS (BEFORE PROFITS WITHELD)

9,954

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

2.07

DIVIDEND PER SHARE (cents share)

1.50

AVAILABLE FOR FUTURE DISTRIBUTIONS (cents per share)

0.57

 

 

COMPANY DISTRIBUTION NOTES IN TERMS OF THE DISTRIBUTION POLICY

1.

VAT credits utilised on rentals

 

In certain African countries, there is no mechanism to obtain refunds for VAT paid on the purchase price of the property. VAT is recouped through the collection of rentals on a VAT inclusive basis. The cash generation through the utilisation of the VAT credit obtain on the acquisition of the underlying property is thus included in the operational results of the property.

2.

Listing and set-up costs under administrative expenses

 

Costs associated with the new listing of shares, setup on new companies and structures are capital in nature and is added back for distribution purposes.

3.

Depreciation and amortisation

 

Non-cash items added back to determine the distributable income.

4.

Share based payments

 

Non-cash items added back to determine the distributable income.

5.

Retirement fund & PRGF

 

Non- cash item held as a provision.

6.

Amortisation of capital funded debt structure fees

 

Amortisation of upfront debt structuring fees.

OTHER NOTES

The abridged unaudited consolidated financial statements for the six months period ended 31 December 2023 (“abridged unaudited consolidated financial statements”) have been prepared in accordance with the measurement and recognition requirements of International Financial Reporting Standards (“IFRS”), the FCA Listing Rules and the SEM Listing Rules. The accounting policies are consistent with those of the previous annual financial statements.

The Group is required to publish financial results for the six months ended 31 December 2023 in terms of SEM Listing Rule 15.36A and the FCA Listing Rules. The Directors are not aware of any matters or circumstances arising subsequent to the period ended 31 December 2023 that require any additional disclosure or adjustment to the financial statements. These abridged unaudited consolidated financial statements were approved by the Board on 27 February 2024.

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

Forward-looking statements

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

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

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

Any forward-looking statements and the assumptions underlying such statements are the responsibility of the Board of directors and have not been reviewed or reported on by the Company’s external auditors.



Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.


ISIN: GG00BMDHST63
Category Code: IR
TIDM: GR1T
LEI Code: 21380084LCGHJRS8CN05
Sequence No.: 306373
EQS News ID: 1846669

 
End of Announcement EQS News Service

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