Source - DGAP Regulatory

Grit Real Estate Income Group (GR1T)
Full year audited results for the year ended 30 June 2023

31-Oct-2023 / 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")

 

 

 

FULL YEAR AUDITED CONSOLIDATED RESULTS FOR THE YEAR ENDED 30 JUNE 2023

 

The board of Directors (the “Board”) of 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$ and Euro denominated long-term leases with high quality multinational tenants, today announces its audited consolidated results for the financial year ended 30 June 2023.

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

“The financial year to 30 June 2023 was a transitory year for the Group characterised by disposals of non-core assets, reducing debt and debt refinancing risks and substantial progress on the acquisition of a majority interest in GREA, the Group’s development associate. GREA successfully delivered the award-winning Precinct office park and Artemis Curepipe Hospital developments in the year and is on time and on budget on the ENEO Tatu City call centre facility, expected to be completed mid 2024.

Global interest rate volatility provided headwinds to our strong property portfolio operating performance, where a 5.7% increase in net operating income (excluding properties sold) was impacted by significantly rising finance costs. Our focus will remain on sustainably growing distributable income and enhancing capital growth while continuing to target key portfolio metrics such as lowering the LTV, vacancy and cost factors and further strengthening the balance sheet and liquidity position through focused asset recycling initiatives.”

Financial & Portfolio highlights as at 30 June 20231

 

30 June 2023

30 June 2022

Increase/ (Decrease)

IFRS diluted earnings / (loss) per share

(US$4.90) cps

US$2.62 cps

(US$7.52) cps

Adjusted EPRA earnings per share2

US$0.72 cps

US$3.13 cps

(US$2.41) cps

Distributable earnings per share3

US$4.29 cps

US$5.08 cps

(US$0.79) cps

Dividend per share

US$2.0 cps

US$4.50 cps

(US$2.5) cps

Contractual rental collected

101.3%

92.8%

+8.5%

EPRA NRV per share2

US$72.8 cps

US$79.4 cps

(US$6.6cps)

Total Income Producing Assets4

US$862.0m

US$856.7m

US$5.3m

Group LTV

44.3%

46.7%

(2.4%)

Weighted average cost of debt

8.4%

7.1%

1.3%

Portfolio highlights

 

 

 

Property net operating income from ongoing operations5

US$52.0m

US$49.2m

+5.7%

EPRA cost ratio (including associates)6

13.3%

13.0%

+0.3ppt

EPRA portfolio occupancy rate7

93.6%

95.3%

(1.7ppt)

WALE8

4.4 yrs.

4.8 yrs.

(0.4 yrs.)

Revenue earned from multinational tenants9

85.3%

85.6%

(0.3ppt)

Income in hard currency10

94.5%

91.5%

+3.0ppt

Grit proportionately owned lettable area ("GLA")

298,962m2

366,926m2

(67,964m2)

Weighted average annual contracted rent escalations

3.0%

5.4%

(2.4ppt)

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 are derived from IFRS are shown in notes 11 to 13 (unaudited).

3

Distributable earnings per share is an APM derived from IFRS and shown in note 12 (unaudited).

4

Includes controlled Investment properties with Subsidiaries, Investment Property owned by Associates and Joint Ventures, Deposits paid on Investment properties and other investments, property plant and equipment, intangibles, and related party loans – Refer to Chief Financial Officer's Statement for reconciliation.

5

Property net operating income (“NOI”) from continuing operations is an APM and is derived from IFRS NOI adjusted for the results of associates and joint ventures, excluding the impact of disposals of BHI and LLR. A full reconciliation is provided in the Chief Financial Officers Statement 

6

Based on EPRA cost to income ratio calculation methodology shown in note 13.

7

Property occupancy rate based on EPRA calculation methodology (Includes associates and excludes direct vacancy cost). Please see calculation methodology shown in note 13.

8

Weighted average lease expiry (“WALE”).

9

Forbes 2000, Other Global and pan African tenants.

10

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

Summarised results commentary:

Despite economic headwinds facing the global property industry, Grit’s property portfolio performed well with revenue increasing 1.9% (Revenue from ongoing operations, which excludes the impact of BHI and LLR, grew 7.3%). NOI (excluding properties sold) grew 5.7% and the Group collected 101.3% of contractual revenue over the period.

The value of the property portfolio declined by 4.5%, predominantly as a result of asset disposals which offset the increased interest in Gateway Real Estate Africa (“GREA”). Excluding the impacts of this corporate activity, the ongoing property portfolio experienced a 0.8% (US$5.9 million) decline in fair value against a backdrop of global economic uncertainty, once again demonstrating relative stability in the portfolio. 

High interest rates impacted the group with cash WACD increasing from 7.1% to 7.97% for the year. Our hedging policy protected us from a large part of the c3.6% increase in base rates over the year. Notwithstanding the hedges, group finance costs increased by US$11.3 million, representing a 46.5% increase as compared to the prior year (which includes the full year impact of the Orbit acquisitions and the developments completed during the year). The US$100.0 million notional interest rate hedge that expired in October 2023 has been replaced – please refer to post balance sheet events below.

In line with the Grit 2.0 strategy, asset management fee income within the subsidiaries grew to US$1.4 million (an increase of 219% from the prior year comparative of US$0.48 million). Additionally, the insourcing of property management services in Ghana and Kenya resulted in net savings of US$0.16 million (with the current years fees of US$0.11 million ending during the year). Grit’s proportionate share of on-going asset management and development management fee income from APDM (treated as a joint venture for the financial year) amounted to US$3.1 million for the year.

Administrative expenses increased by 40.3% due to a combination of high inflationary pressures, onboarding costs surrounding the increased investment in APDM and GREA, the full year impact of the income generating Kenyan office and the Group’s investment towards future growth (in the setup costs of Bora Africa). The administrative expenses as a percentage of total income producing assets amounted to 2.4%. This is higher than the medium-term objective of 1.8%, which the Group aims to achieve through cost reduction initiatives and an expected increase in the asset base as a result of the acquisition of GREA.

Taking the above into account, Adjusted EPRA earnings dropped by 77.0% to US$0.72cps. Distributable income dropped 15.6% to US$4.29cps as the company continues to obtain significant VAT credits. The 8.3% reduction in EPRA NRV to US$72.8cps was driven by a combination of property valuations (US$1.05cps), provisions and write offs against property projects (US$1.56cps) and transaction costs related to the GREA acquisition and US$306m syndicated loan (US$0.71cps).

During the financial year over US$90.0 million of cash was utilised in support of the Group’s strategic objectives of debt reduction and increased ownership in GREA and APDM. While the Board understands the importance of dividends to our shareholders, it has elected against declaring a second half dividend. Total dividend for the year amounts to US$2.00 cps following the interim dividend of US$2.00cps declared for the six months ended 31 December 2022 (46.6% pay-out of distributable earnings). Should sufficient progress be made on implementing the new GREA dividend policy and dividend normalisation from recently completed GREA developments, the Board will consider either a special dividend or an increased H1 dividend.

The Group continued to reduce debt levels with a net reduction of US$28.3 million in the financial year. Group LTV dropped by 2.4% to 44.3%.

Corporate highlights – execution on strategy

The Board targeted US$160 million of asset disposals by 31 December 2023 and has made significant progress towards this target with the disposal of interests in BHI and LLR, at near book value. Capital was redeployed to debt reduction and to the acquisition of GREA and APDM – please refer to post balance sheet events below.

The Group unveiled its Grit 2.0 strategy and focus areas post the acquisition of GREA and APDM, which includes higher targeted fee income strategies and the pursuit of a capital light strategy through industry focused substructures.

The Group won several high-profile industry awards for a number of GREA delivered developments and for the innovative Sustainability linked debt refinance concluded in October 2022.

Notable Post balance sheet events

On the 26th of July 2023 the Group announced the conclusion of the final phase in the acquisition of a majority interest in GREA and APDM from Gateway Africa Real Estate Limited and Prudential Impact Investments Private Equity LLC, which resulted in the Group owning a direct interest of 51.48% in GREA and 78.95% in APDM. The transaction became unconditional, and the share transfer was lodged following receipt of the Mauritius Prime Minister’s Office consent, which was the final condition precedent. Although the share transfer took place after the end of the financial year, beneficial ownership of the 51.48% was attained on 30 June 2023 and as such the Group treated GREA as a joint venture in preparing its financial statements for the year ended 30 June 2023. The required final amendments to the Shareholders Agreement (which upon signature will result in control over GREA and therefore allow for the full consolidation of GREA and APDM - please refer to The Basis of Presentation 1.2 Critical Judgements and Estimates), are expected imminently. On the 3rd of October 2023 GREA issued shares to APDM in terms of the Managers Incentive Program and from this date the Group, through its shareholding in APDM, holds a combined direct and indirect interest of 54.22%.

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 two industrial land assets were transferred to the newly established entity. Bora is a wholly owned subsidiary of Grit and has therefore resulted in no change to existing beneficial interests. 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.

On 16 October 2023, interest rate hedges over US$100.0 million notional against LIBOR rates above 1.58% to 1.85%, matured. The Group concluded a new US$100.0 million notional interest rate hedge from this date, with a new two-year collar and cap instrument providing protection against rates above 4.75% on SOFR rates while allowing savings up to 3.00% SOFR rate. The Group has therefore maintained its overall hedged position at US$200 million.

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

 

 

Cavendish Capital Markets Limited – UK Financial Adviser

 

William Marle/Teddy Whiley (Corporate Finance)

+44 20 7220 5000

Pauline Tribe (Sales)

+44 20 3772 4697

 

 

Perigeum Capital Ltd – SEM Authorised Representative and Sponsor

 

Shamin A. Sookia

+230 402 0894

Kesaven Moothoosamy

+230 402 0898

 

 

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 multinational 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 both income and capital growth.

The Company holds its primary listing on the main market of the London Stock Exchange (LSE: GR1T) and a dual currency trading secondary listing on the Stock Exchange of Mauritius (SEM: DEL.N0000 (USD) / DEL.C0000 (MUR)).

Further information on the Company is available at http://grit.group/.

Directors:

Peter Todd (Chairman), Bronwyn Knight (Chief Executive Officer) *, Leon van de Moortele (Chief Financial Officer) *, David Love+, Sir Samuel Esson Jonah+, Catherine McIlraith+, Jonathan Crichton+, Cross Kgosidiile and Lynette Finlay+.

(* 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 Ltd

UK Transfer secretary: Link Market Services Limited

Mauritian Sponsoring Broker: Capital Markets Brokers Ltd

 

This notice is issued pursuant to the FCA Listing Rules and 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 on Tuesday, 31st October 2023 at 2:00pm Mauritius / 10:00am UK / 12:00pm South Africa via the Investor Meet Company platform, with the presentation being open to all existing and potential shareholders, and can be accessed at the following link: https://www.investormeetcompany.com/grit-real-estate-income-group-limited/register-investor

A playback of the webcast will be accessible on-demand within 48 hours via the Company website: https://grit.group/financial-results/

CHAIRMAN’S STATEMENT

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, especially with Africa rapidly urbanising, and focuses on impact, energy efficiency and carbon reduction in its activities. In addition to environmental responsibility, 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 programmes. More information on Grit’s Environmental, Social and Governance initiatives is available in the Responsible Business Committee’s report.

Robust operational performance and record development activity

Operationally and strategically, 2023 was a challenging yet productive year and was characterised by disposals of non-core assets and substantial progress on the acquisition of a controlling interest GREA. Global interest rate volatility offset the strong performance from the property portfolio, where net operating income from ongoing operations increased 5.7%. We enjoyed good leasing and cash collections while GREA successfully delivered the Precinct office park, the first 5-star green rated development in the Indian Ocean region, and the Artemis Curepipe Hospital in Mauritius.

We aim to enhance our income and protect value through the active management of our high-quality portfolio. We are well positioned to deliver the Grit 2.0 strategy which is underpinned by long-term structural African demand drivers and the need for high quality real estate and infrastructure.

Macroeconomic factors impacting property valuations

A significant adjustment in global interest rates during the year caused a sharp increase in our overall cost of capital and impacted property yields across the global real estate sector. Our higher quality assets, underpinned by strong tenant covenants, are more resilient in the face of potentially weaker leasing markets which has largely been recognised by the valuers in our year-end property valuations. However, there remains near term uncertainty on market yields and valuations which is only expected to moderate once peak interest rates are reached.

The corporate accommodation and light industrial sectors experienced some valuation pressure which contributed to a negative 0.8% movement in fair values on the property portfolio, offsetting gains on completed developments. We expect growth sectors to stabilise, and given the favourable long-term African fundamentals, should continue to see considerable investment over the medium term.

A high-quality, diverse, and resilient platform

We benefit from having built a business focused on quality real estate assets with strong ESG credentials, long leases to a resilient and diverse customer base that comprise more than 85% of strong multinational and investment grade tenants. Revenue from ongoing operations grew by 7.3% in the financial year to 30 June 2023, with contractual lease escalations, which are predominantly inflation-linked, helping to offset the impacts of rising interest rates in the portfolio. We notably collected 101.3% (FY22: 92.8%) of the value of contracted revenue. In the financial year we reduced exposures to the hospitality sector and now have 33 assets across 7 sectors with 94.5% of our leases in hard currency. This provides 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 fee generation from our professional services.

Capital recycling

In the prior financial year, the Board set an asset recycling target of 20% of the value of the property portfolio, equivalent to approximately US$160 million worth of property assets, by 31 December 2023. I am pleased to report that we have already achieved gross property disposals of US$135.2 million and are making good progress on further disposals which are hoped to be announced in late 2023 or early 2024. Given the success of the current disposal programme, the Board is considering extending the targets, including co-investors into sub-structures, and will make further announcements in due course.

Notable disposals in the financial year included the disposal of the minority interest in 3 hotels to Beachcomber Hotels International and the exit of the Group’s remaining 25.1% in Letlole la Rona, a listed Botswanan property company.

Proceeds from asset recycling have principally been applied towards Group debt reduction and to the increased shareholding in GREA and APDM. Since acquiring an increased interest in APDM and GREA, Grit has combined and integrated the professional teams and continues to drive operating efficiencies through the establishment of a centralised treasury programme, shared professional services and integration of other head office support functions.   

Grit 2.0 strategy

At a capital markets day hosted in May 2023, we unveiled the Grit 2.0 strategy, which set our vision for the Group post the acquisition of GREA and APDM. We described the Group as “moving from income to impactful income”, which is underpinned by the value we create in new developments and with our various professional services.

Post the acquisition, the Group will continue to deploy its resources within the following principal strategic areas:

1.

Owning and managing a well-diversified portfolio of high-quality real estate assets across the African continent (excluding South Africa) – which are resilient to macro-economic challenges.

2.

Pursuing limited risk-mitigated real estate developments for existing and target tenants, predominantly focused on the industrial, embassy accommodation and data centres sectors, driving accelerated NAV growth into the future. Development exposure will not exceed more than 20% of Group gross asset value, and upon completion, will be included in the income producing portfolio of the Group thereby underpinning future income growth – leading to an expectation of enhanced yield and income upon completion of the developments.

3.

Generation of additional fee income from real estate, facilities, and development management services to both internal clients and to third party clients and co-investors – expected to result in enhanced income, with a contribution to earnings for the year of US$4.7 million.

Grit’s strategy is to organise the Group’s real estate assets into logical sector groupings and to pursue development activities, wherever possible, through GREA, and focusing on the following:

1.

Developing industrial and logistics assets across Africa which are then held as investments or sold to other investors; and

2.

The establishment of a substructure that holds our diplomatic housing portfolio across the African continent for the US Government, other countries and multinational companies which are either held as investments or sold to investors. 

The Group has made substantial progress in recapitalising GREA and have obtained shareholders’ Investment Committee approval for the cash injection of US$48.5 million. While a number of administrative processes need to be concluded, the Board is confident that the targeted date of drawdown of December 2023 will be met. The capital injection will initially be utilised to temporarily reduce debt and associated financing costs before being deployed towards the Group’s pipeline in due course.

The Group has made significant progress in sourcing funding for growth projects, with the targeted issuance of financing instruments in Bora to the IFC, a division of the World Bank. The IFC board approved transaction is set to close imminently providing additional growth capital for Bora to fund industrial and impact focused acquisitions and developments.

Financial results

The financial results to 30 June 2023 have been impacted by the corporate actions, rising interest rates and sluggish property valuations. EPRA NRV per share declined 8.3% to US$72.8cps (versus prior year NRV of US$79.4cps) predominantly due to property valuations, write offs and provisions against delayed property projects and transaction costs related to the GREA acquisition and the syndicated loan.

Grit’s LTV improved from 46.7% in the prior financial year to 44.3%, predominantly from debt reductions related to asset disposals and active decisions by management to reduce the more expensive facilities in the face of rising interest rates. LTV is expected to fall further upon the planned consolidation of GREA.

Interest rates have remained higher, and for longer, than we initially anticipated introducing increased risks to the Group’s financial performance in the near term. These risks are covered in more detail in the Chief Financial Officer’s report below but has influenced the Board’s assessment of liquidity risks when assessing current dividend levels.

Dividends

During the financial year the Group had a number of cash requirements to support the Board’s strategic objectives and capital projects. The group successfully increased its shareholding in GREA (US$56.4 million), repaid overall quantum of debt by US$35.1 million and funded the upfront debt costs of the US$306 million syndicated loan (US$7.4 million). The bulk of the capital for these strategic and risk mitigating actions were funded from the asset recycling program that generated US$86.8 million, while US$12.0 million was funded from operational cashflows. The current transition from cash generative assets sold in the year to assets within the increased GREA portfolio, has resulted in a temporary disruption of normalised dividend flows from underlying properties that are expected to normalise by the end of the year. The current volatility of interest rates and continuing inflationary pressures combined with the rising tensions in the Middle East have additionally heightened the macro-economic risks faced by the Group. While we understand the importance of dividends to our shareholders, the Board has elected against declaring a second half dividend. Therefore the total dividend for the year amounts to US$2.00 cps following the interim dividend of US$2.00cps declared for the six months ended 31 December 2022. The full year distribution represents an 46.6% pay-out of distributable earnings.

A number of initiatives, including the implementation of a formal GREA dividend policy, normalisation of dividends from recently completed GREA portfolio assets and proceeds from further asset recycling, are expected to largely replenish the operational cashflows utilised to close the strategic objectives discussed above. The Board will consider either a special dividend later this year or an increased H1 dividend dependant on the progress it makes on all, or some, of these initiatives.

Changes to the Board

In February 2023 Nomzamo Radebe resigned off the Board. We thank Nomzamo for her valuable input she added to the Board.

We welcomed Lynette Finlay to the Board in March 2023 as an independent non-executive director. Lynette brings a wealth of property market experience, and we look forward to further engagements with her.

Outlook

Management and the Board will continue to focus on ongoing reduction in LTV, the asset recycling programme, and the expansion of Grit’s investments in specialist development focused investment vehicles. The Board has identified a cost optimisation programme on Group administrative expenses, targeting a sustainable US$4.0 million reduction by December 2024.

Grit 2.0 positions the Group for growth, and with strong current cash collection, increased leasing activity, resilient assets and the potential for stronger NAV and fee income growth, the Board affirms the total return target of between 13% and 15% per annum over the medium term.

Peter Todd

Chairman

CHIEF EXECUTIVE’S STATEMENT

Grit continues to refine its strategy, and as part of Grit 2.0, is looking to increasingly pursue risk mitigated and pre-leased developments and asset management activities that generate fees to compliment the sustainable property income we enjoy from our existing high quality property portfolio. Our vision statement summarises our key focus and activities:

“We are a family of Partnerships,

Setting the Global Benchmark in Africa for

Developing Smart Business Solutions &

Impact Real Estate that goes Beyond Buildings!”

In addition to sound property fundamentals, a significant catalyst for Grit’s growth continues to be our focus on strong, transparent counterparty and stakeholder relationships. This ability and know-how are what differentiates Grit and allows us to deliver smart real estate solutions on the African continent.

We identified a number of key focus areas at the start of the year and are pleased to provide the following key highlights for the period:

We delivered a strong portfolio performance including leasing and vacancy management, strong cash collections and growth in operational earnings from ongoing operations;

We strengthened the Group balance sheet, including reductions in debt balances and Group loan to value and extended debt maturities through the US$306 million sustainability linked syndicated facility;

Good progress on the GREA and APDM acquisitions, with beneficial ownership of 51.48% of GREA being obtained on 30 June 2023 and transfer of shares completed shortly after the financial year end;

Acceleration in our asset recycling strategy with significant disposals that included three Beachcomber hotels and the remaining stake in Letlole la Rona concluded during the financial year;

Significant progress in our move towards a low carbon economy and achieving our 25% building efficiency improvement target by 2025.

Key operational trends

Good leasing activity

During the year, we signed leases over 9,006 m2 of GLA in our investment property portfolio with significant activity in the office, retail, light industrial and corporate accommodation sectors, with pleasing results in the Anfa Mall and Ghana office portfolio. Although we increased our shareholding in GREA to 51.48%, the Group has been operationally controlling the completed assets since April 2022 by undertaking property management and leasing activities on their behalf via Group companies.

Balance sheet improving

In October 2022 we concluded a US$306 million multi-jurisdictional sustainability linked syndicated debt facility across Mozambique, Zambia, Kenya, Ghana, and Senegal, which was the largest of its kind in the real estate sector in Sub Sahara Africa (ex-South Africa).

Interest bearing borrowings were subsequently reduced by US$28.3 million to US$396.7 million in the financial year through a combination of utilising cashflows raised from asset disposals and from redirecting cash generated from operations towards debt reductions. The Group’s reported LTV dropped to 44.3% (from 46.7% in FY2022) and is further expected to reduce upon the consolidation of GREA.

Accelerating fee income generation

Grit's proportionate fee income generation in the year accelerated as the first evidence of the Grit 2.0 fee income strategies started materialising. While the underlying portfolio continues to be delivered, the fixed asset management fee income component will increase steadily over time while the development management fees are expected to be linked to business activity and available growth capital and might vary year to year, with current year performance being bolstered by one off incentive fees earned by APDM on the delivery of its minimum return hurdles.

Significant liquidity redeployment

Strong cash collections of 101.3% (FY22: 92.8%) continued to support the Group’s liquidity position.

Additionally, proceeds from the disposals of the remaining 25.1% interest in Letlole la Rona and the 44.2% interest in three hotels operated by Beachcomber Hotels International were applied towards both debt reductions and towards the completion of the final phases of the GREA and APDM acquisitions (where US$58.3m was deployed towards phases two and three of the acquisition).

Operational update

Grit’s current portfolio consists of 33 assets located across 11 countries and 7 sector classes. The Group’s portfolio has a 6.4% EPRA vacancy rate (FY2022: 4.7%) impacted by mix changes in the portfolio post asset disposals, and a weighted average lease expiry (WALE) of 4.4 years (FY2022: 4.8 years). More than 85% of income is underpinned by a wide range of blue-chip multinational tenants across a variety of sectors and has a weighted average contracted lease escalation of 3.0% per annum (FY2022: 5.4% per annum). Most rents are collected monthly, of which 94.5% (FY2022: 91.5%) are collected in US Dollar, Euro or pegged currencies.

Office

The global work-from-home phenomenon has been less relevant in Africa and has had limited impact on our office tenants. Office sector valuations in Mozambique remained resilient while the Ghanaian office market continues to be faced with macroeconomic headwinds despite positive leasing activity in the financial year, driven mainly by international tenants.

Corporate accommodation

The valuation of the VDE Housing Estate in Mozambique reduced to US$50.2 million (FY2022: US$55.2 million), with valuers applying conservative leasing assumptions post the current lease maturity in May 2024. The acquisition of GREA allows the Group to accelerate its provision of diplomatic housing through a strong pipeline of secured opportunities similar to the recently completed developments in both Kenya and Ethiopia, where the Group has enjoyed good valuation performance in this financial year.

Light industrial

The continent remains undersupplied for good-quality industrial property.

As part of the Grit 2.0 strategy the Group is consolidating its industrial assets into a single focused entity called Bora Africa. Bora is expected to generate both rental and capital value growth. The core income generating asset base and strong development pipeline of Bora Africa is expected to provide co-investment opportunities to our real estate partners and other equity funders.

Medical

Although a relatively small exposure for the Group at present, the GREA team successfully completed the Artemis Curepipe hospital in Mauritius in May 2023 at a total cost of US$18.6 million.

Retail assets

The occupancy rates of our retail assets have steadily improved since the height of the pandemic at the end of 2021. However, this sector is still targeted for further asset disposals. Our strategy of focusing mainly on smaller malls with non-discretionary food and service retailers have yielded positive results and we are encouraged by new tenant activity.

Vacancies at AnfaPlace Mall have also experienced an improving trend. This increasing footfall could bode well for the significant number of turnover linked leases currently in place.

Hospitality assets

Our hospitality portfolio now comprises two hotels post the sale of the interest in BHI – one in Mauritius and one Club Med resort in Senegal, the refurbishment of which, will be completed in November 2023, before embarking on the expansion project which is due for completion in late 2024.

Update on acquisitions and development pipeline

The acquisition of a majority stake in GREA was completed shortly after the financial year end. Control over GREA and its asset manager, Africa Property Development Managers (“APDM”), is pivotal to Grit’s ambitions. These include further diversifying its asset base into defensive, high-growth real estate sub-sectors and growing fee income whilst creating positive and sustainable impacts and value to the local people and communities we serve across Africa.

The finalisation of the amendments to the shareholders agreement are expected shortly, which will result in control and the consolidation of GREA and APDM into the results of Grit from that date.

Summary of GREA developments and projects

Name

Completion date

Anchor tenant

OBO Kenya (embassy accommodation)

August 2022

US Embassy

The Precinct, Mauritius (office)

May 2023

Grit, Dentons, W17

Artemis Curepipe Hospital, Mauritius

May 2023

Falcon Group

Eneo, Tatu City, Kenya

Q2 2024

CCI

Artemis Coromandel Hospital, Mauritius

Q2 2025

Falcon Group

OBO Mali (embassy accommodation)

Q2 2025

US Embassy

ESG strategy

The Group’s sustainability efforts focus on community impact, the empowerment of women, energy efficiency and carbon reduction.

The Board remains committed to a five-year target of a 25% reduction in carbon emissions and a 25% improvement in our building efficiency against 2019 base figures and has made significant progress in the achievement of these targets. In addition to environmental responsibility, the Group prides itself on achieving more than 40% of women in leadership positions at Grit, more than 65% localised employees and significant support to numerous local communities through extensive CSR and upliftment programmes. 

We have made significant progress in our move toward a low carbon economy based on global best practice.

The Group integrated report provides more details on our approach, our strategy, and our achievements against these targets.

Prospects

The Group has some compelling pipeline opportunities in impact real estate investing. The year-ended 30 June 2023 has been a transitionary year for the Group with significant corporate actions and asset recycling. Our focus will remain on sustainably growing dividends and enhancing capital growth. This will be done while continuing to target key portfolio metrics such as lowering the LTV, vacancy, cost factors, maintaining collections and further strengthening the balance sheet and liquidity position through focused asset recycling initiatives.

The Board have identified a cost optimisation programme on Group administrative expenses and are a targeting a sustainable US$4.0 million reduction by December 2024. Although rising global interest rates continue to be a headwind for earnings our focus remains on the long-term sustainable debt strategy and managing the weighted average cost of debt alongside achieving our contractual lease escalations. The GREA acquisition and recapitalisation as well as the completion of the IFC financing instrument into Bora Africa positions us well for the Grit 2.0 strategy and for increased focus on selective impact investing in sectors such as light industrial, diplomatic housing, medical and data centre.

Bronwyn Knight

Chief Executive Officer

CHIEF FINANCIAL OFFICER’S STATEMENT

Presentation of financial statements

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 11 to 13. 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. In the absence of the requirement for Distributable Reserves in the domicilium countries of the group, Distributable Earnings is utilised to determine the maximum amount of operation earnings that would be available for distribution as dividend to shareholders in any financial period. This factors the various company specific nuances of operating across a number of diverse jurisdictions across Africa and the investments’ legal structures of externalising cash from the various 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 12 “Distributable earnings”.

The Group made substantial progress in the current financial year toward disposal of assets accounted for as associates, and with the anticipated consolidation of GREA and APDM, expects to present largely consolidated asset results going forward.

IFRS Income statement to distribution reconciliation

Audited IFRS

30 June 2023

Unaudited Extracted from Associates

30 June 2023

Unaudited

Grit Proportionate Income statement

30 June 2023

 

Unaudited

Non-Controlling Interest

Unaudited

Grit Economic Interest Income Statement

30 June 2023

Unaudited

Distributable Earnings

 30 June 2023

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

Gross property income

56,249

12,538

68,787

(9,286)

59,501

59,587

Property operating expenses

(9,624)

(1,798)

(11,422)

2,784

(8,638)

(9,609)

Net property income

46,625

10,740

57,365

(6,502)

50,863

49,978

Other income

286

22,241

22,527

(3,343)

19,184

18,799

Administrative expenses

(22,578)

(7,400)

(29,978)

4,104

(25,874)

(21,419)

Net impairment charge on financial assets

(3,868)

(1,581)

(5,449)

(59)

(5,508)

-

Profit from operations

20,465

24,000

44,465

(5,800)

38,665

47,358

Fair value adjustment on investment properties

(4,108)

(1,005)

(5,113)

1,023

(4,090)

-

Fair value adjustment on other financial liability

3,625

1,948

5,573

(79)

5,494

-

Fair value adjustment on other financial asset

264

-

264

-

264

-

Fair value adjustment on derivative financial instruments

(3,085)

-

(3,085)

-

(3,085)

-

Share-based payment expense

(354)

(7,474)

(7,828)

-

(7,828)

-

Share of profits from associates and joint ventures

14,300

(14,300)

-

-

-

-

Loss on disposal of investment in subsidiary

(3,240)

-

(3,240)

-

(3,240)

-

Loss on disposal of interest in associate

(3,543)

-

(3,543)

-

(3,543)

-

Impairment of loans and other receivables

-

(71)

(71)

(658)

(729)

-

Loss on derecognition of loans and other receivables

(3,735)

-

(3,735)

(280)

(4,015)

-

Foreign currency losses

(2,241)

(1,640)

(3,881)

416

(3,465)

-

Loss on extinguishment of loans

(1,166)

(25)

(1,191)

114

(1,077)

-

Loss on disposal of property, plant, and equipment

(888)

-

(888)

-

(888)

-

Other transaction costs

(2,156)

-

(2,156)

-

(2,156)

-

Profit before interest and taxation

14,138

1,433

15,571

(5,264)

10,307

47,358

Interest income

4,096

5,527

9,623

(40)

9,583

9,582

Finance charges

(39,582)

(6,088)

(45,670)

5,585

(40,085)

(36,554)

(Loss) / Profit before taxation

(21,348)

872

(20,476)

281

(20,195)

20,386

Taxation

(4,225)

(487)

(4,712)

1,276

(3,436)

(3,113)

(Loss) / Profit after taxation

(25,573)

385

(25,188)

1,557

(23,631)

17,273

NCI of associates through OCI

 

(385)

(385)

385

-

-

(Loss) / Profit after taxation and after NCI of associates

(25,573)

-

(25,573)

1,942

(23,631)

17,273

VAT credits

 

 

 

 

 

3,312

Distributable earnings

 

 

 

 

 

20,585

Financial and Portfolio summary

The Grit Proportionate Income Statement is further split to produce a Grit Property Portfolio Revenue2, Operating expenses2 and NOI 2 analysis by sector. Grit’s Property Portfolio revenue has increased by 1.9% after the reduction of revenue from disposed assets. Revenue from ongoing operations increased 7.3% from prior year on annual contractual lease escalations and the start of leasing operations on a number of buildings within the GREA portfolio between January 2023 and May 2023. Net operating income on ongoing operations increased by 5.7% over the twelve-month period to 30 June 2023.

Sector

Revenue FY2023

Reported

Revenue FY2023

Change in ownership3

Revenue FY2023

Ongoing operations

Revenue FY2022

Restated4

Revenue FY2022

Change in ownership3

Revenue FY2022

Ongoing operations

Change in Revenue

Reported

Change in Revenue Ongoing operations

Rental Collection1 FY2023

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

%

%

%

Retail

19,074

110

18,964

18,310

-

18,310

4.2%

3.6%

95.0%

Hospitality

9,164

3,889

5,275

12,510

7,481

5,029

(26.7%)

4.9%

136.2%

Office

18,163

1,078

17,085

16,577

-

16,577

9.6%

3.1%

98.0%

Light industrial

6,229

-

6,229

3,797

-

3,797

64.1%

64.1%

105.3%

Corp Accommodation

14,147

460

13,687

13,620

-

13,620

3.9%

0.5%

96.1%

Medical

53

11

42

-

-

-

100.0%

100.0%

100.0%

Data Centre

803

135

668

364

-

364

120.6%

83.5%

15.9%

LLR portfolio

1,588

1,588

-

2,788

2,788

-

(43.0%)

(100.0%)

N/A

Corporate

1,444

-

1,444

1,389

-

1,389

4.0%

4.0%

N/A

TOTAL

70,665

7,271

63,394

69,355

10,269

59,086

1.9%

7.3%

101.3%

Subsidiaries

56,249

1,001

55,248

51,937

-

51,937

8.3%

6.4%

 

Associates

12,538

5,810

6,728

16,613

10,269

6,344

(24.5%)

6.1%

 

SUBTOTAL

68,787

6,811

61,976

68,550

10,269

58,281

0.3%

6.3%

 

GREA Associates

1,878

460

1,418

805

-

805

133.2%

76.1%

 

TOTAL

70,665

7,271

63,394

69,355

10,269

59,086

1.9%

7.3%

 

 

Sector

NOI

FY2023

Reported

NOI FY2023

Change in ownership3

NOI FY2023

Ongoing operations

NOI

FY2022

Restated4

NOI FY2022

Change in ownership3

NOI FY2022

Ongoing operations

Change in NOI

Reported

Change in NOI

 Ongoing operations

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

%

%

Retail

12,363

70

12,293

11,952

-

11,952

3.4%

2.9%

Hospitality

9,164

3,889

5,275

12,510

7,481

5,029

(26.7%)

4.9%

Office

16,139

870

15,269

14,664

-

14,664

10.1%

4.1%

Light industrial

5,995

-

5,995

3,692

-

3,692

62.4%

62.4%

Corp Accommodation

11,545

439

11,106

11,558

-

11,558

(0.1%)

(3.9%)

Medical

53

11

42

-

-

-

100.0%

100.0%

Data Centre

148

118

30

324

-

324

(54.3%)

(90.7%)

LLR portfolio

1,455

1,455

-

2,507

2,507

-

(42.0%)

(100.0%)

Corporate

2,023

-

2,023

2,000

-

2,000

1.2%

1.2%

TOTAL

58,885

6,852

52,033

59,207

9,988

49,219

(0.5%)

5.7%

Subsidiaries

46,625

870

45,755

43,281

-

43,281

7.7%

5.7%

Associates

10,740

5,543

5,197

15,181

9,988

5,193

(29.3%)

0.1%

SUBTOTAL

57,365

6,413

50,952

58,462

9,988

48,474

(1.9%)

5.1%

GREA Associates

1,520

439

1,081

745

-

745

104.0%

45.1%

TOTAL

58,885

6,852

52,033

59,207

9,988

49,219

(0.5%)

5.7%

Notes

1

Rental Collections represents the amount of cash received as a percentage of contractual income. Contractual income is stated before the effects of any rental deferment and concessions provided to tenants.

2

Grit adjusted property portfolio Revenue, Operating expenses and Net Operating Income are unaudited alternative performance measurements

3

Change in ownership relate to the impact of the disposal of BHI and LLR as well as the impact of the change in the Group’s proportionate share in GREA from 26.29% to 35.01% during the financial year. On 30 June the Groups interest increased to 51.4%, with the resulting effect expected to be observed in the 30 June 2024 financial period.

4

Prior year comparatives have been restated to reflect a change in accounting policy following clarification by the IFRS Interpretation Committee ("IFRIC") in October 2022 of how lessor should account for the forgiveness of lease payments. Details of the restatement and impact on prior year comparatives are set out in note 2.3 'Changes in accounting policies'

The retail sector benefitted from lower vacancies, Covid-19 recovery and from favourable foreign exchange impacts, particularly on the Zambian portfolio during the year.

The hospitality sector NOI declined as a result of the disposal of the Beachcomber properties during the year. NOI from ongoing operations grew 4.9% predominantly driven by EBITDA linked rental growth at Tamassa and rentals on development capex being levied at the Club Med Skirring Resort.

The office sector NOI growth was predominantly attributable to the increased shareholding in Capital Place (50% to 70% from 30 June 2022) and a one-off termination fee relating to Commodity House Phase 1 of US$0.8m. The remainder of the portfolio was broadly flat over the prior year.

The light Industrial sector NOI growth substantially related to the full year impact of the Orbit Complex contributing c.US$2.5m to the year-on-year movement.

Corporate accommodation sector and NOI growth predominantly related to new leasing income generated from DH1 Ethiopia and DH3 Kenya completed during the year. The diplomatic housing portfolio positive trends were offset by lower rentals achieved in the VDE Housing Complex and additional costs being incurred across the portfolio.

Cost control

The financial year-ended 30 June 2023 was a transitionary year for the Group, one in which significant inflationary pressure and investment for future growth and positioning ahead of GRIT 2.0 resulted in a 40.3% increase in ongoing administrative expenses. A substantial contributor to the increase were inflationary pressures experienced in items including insurance, travel, accommodation and staff costs. Additionally, the Group invested for growth, with the staff compliment increasing during the year and the opening of a new representative office in Kenya. The property management team added to the headcount growth with new staff in Ethiopia to manage the diplomatic housing projects.

Ongoing administrative costs as a percentage of total income producing assets equate to 2.4%, increasing from 1.7% in the prior year and against management medium term admin cost ratio target of 1.8%. The group has set a target of reducing overall administrative costs by US$4.0 million by December 2024. This will be achieved through increased integration and efficient use of the Grit and APDM staff compliment, further digitisation of business processes, initiatives surrounding insurance requirements and a more targeted marketing spend that will underpin the growth of assets under management and the generation of other fee income streams in line with the Grit 2.0 strategy.

Administrative costs for the year included a number of once off items related to the office move to the Precinct and additional costs related to the completion of phase 2 and 3 of the GREA / APDM acquisition.

Administrative expenses

 30 June 2023 

30 June 2022

Movement

Movement

 

US$'000

US$'000

US$'000

%

Comparable administrative costs relating to the Group (excluding APDM recharges)

21,787

16,944

4,843

28.6%

Bora representative office setup costs

532

-

532

100.0%

APDM employee costs recharged to Group

259

-

259

100.0%

Administrative expenses - IFRS

22,578

16,944

5,634

33.3%

Less: Transaction costs

(1,706)

(2,071)

365

(17.6%)

Total administrative expenses

20,872

14,873

5,999

40.3%

Fee income

1,348

480

868

180.8%

As an offset to the increased administrative costs, asset management fees of the subsidiaries grew to US$1.4 million (an increase of 180.8% from the prior year comparative of US$0.48 million). Additionally, the insourcing of property management in Ghana and Kenya resulted in net savings of US$0.16 million (with the current years fees of US$0.11 million ending during the year). These figures are expected to grow in line with the number of new projects delivered in the medium term and will be significantly bolstered through the deployment of the IFC funding instrument and GREA recapitalisation.

Material finance costs increases

The continued rise in global interest rates have driven the Group’s cash weighted average cost of debt up to 8.0% at 30 June 2023 and including the full year impact of the Orbit acquisition, resulted in a 46.5% increase in net finance costs for the year. The increase in ongoing 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 also has hedging instruments in place amounting to US$200.0 million to mitigate the impact of interest fluctuations. Although base rates increased by c3.6% over the year, our WACD increased by 1.3% as a result of these hedges.

The additional US$11.3 million charge to income resulted in a significant impact on the financial results for the year. The reported net finance charge includes an amortisation of loan issuance costs and the impact of hedging activities.

Net finance costs

30 June 2023

30 June 2022

Movement

Movement

 

US$’000

US$’000

US$’000

%

Finance costs as per statement of profit or loss

39,582

26,151

13,431

51.4%

Less: Interest income as per statement of profit or loss

(4,096)

(1,935)

(2,161)

111.7%

Net finance costs - IFRS

35,486

24,216

11,270

46.5%

Interest rate risk exposure and management

The exposure to interest rate risk at 30 June 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

269,147

222,633

46,514

-

-

State Bank of Mauritius

35,361

10,000

24,336

1,025

-

Investec Group

34,722

3,152

31,570

-

-

Nedbank Group

15,635

15,635

-

-

-

Maubank

712

-

712

-

-

Housing Finance Corporation

4,369

-

-

-

4,369

NCBA Kenya

17,500

17,500

-

-

-

Private Equity

4,725

-

-

-

4,725

International Finance Corporation

16,100

16,100

-

-

-

TOTAL EXPOSURE – IFRS

398,271

285,020

103,132

1,025

9,094

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

177,237

63,986

103,132

1,025

9,094

Notes

1

PLR – Mauritius Prime Lending Rate

Management monitor and manage the business relative to the cash WACD which is the net finance costs before loan cost amortisation and adjusted for the effects of the hedges. Including the impact of hedges and back-to-back partner loans, the Group is 78.24% 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 new protection level above 4.75% against SOFR 3-month rates.

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

All debt

Cash WACD

WACD

Movement vs current WACD

At 30 June 2023 (including hedges)

7.97%

8.43%

 

At 31 October 2023 (including hedges)

9.09%

9.55%

0.00%

+50bps

9.30%

9.76%

+21bps

+25bps

9.19%

9.65%

+10bps

-50bps

8.88%

9.34%

(21bps)

-100bps

8.55%

9.01%

(54bps)

-200bps

7.84%

8.30%

(125bps)

Asset recycling

During the year the Group continued with its asset recycling strategy and disposed of a minority interest (44.42%) in 3 hotels to Beachcomber Hotels International and the complete exit of the Group’s remaining 25.1% in Letlole la Rona, a listed Botswanan property company. The impact on the financial results of the Group of these disposals are summarised below.

Disposal of Leisure Property Northern (Mauritius) Limited

The Group disposed of its whole equity interests in Leisure Property Northern (Mauritius) Limited ("LPNL"), the legal beneficial owner of Beachcomber Hospitality Investments Ltd ("BHI") and a wholly owned subsidiary of the Group during the year. At the beginning of the financial year, Grit via LPNL owned 44.42% of BHI. The following transactions occurred during the year which resulted in the disposal of LPNL and BHI.

In November 2022, BHI declared a €32.6 million dividend whereby shareholders had the option to elect to receive the dividend in cash or additional shares in BHI in proportion to their current shareholding. The Group elected a cash payout whereas New Mauritius Hotel (“NMH”), the other shareholder of BHI, elected to convert the dividend payout into additional BHI shares. Following the increase in shareholding of NMH in BHI, the Group interests in the associate decreased from 44.42% to 27.01%.

In May 2023, the Group disposed of its wholly owned subsidiary LPNL (which held 27.01% of BHI at the time of disposal). Following the disposal of LPNL and the de-consolidation of LPNL in Grit's book, LPNL merged with BHI so that BHI is the only surviving legal entity that remains in operation.

Following the disposal, the New Mauritius Hotels option to acquire all of the equity held by LPNL in BHI, expired and the call option liability that was previously recorded was reversed.

 

The net impact of the disposal of the LPNL and BHI on the results of the Group during the year is summarised as follows

US$’000

Assets disposed

 

Investments in associates

51,298

Cash and cash equivalents

1

Total assets disposed

51,299

 

 

Liabilities disposed

 

Interest-bearing borrowings

(19,404)

Trade and other payables

(28)

Total liabilities disposed

(19,432)

 

 

Net assets disposed

31,867

Consideration received

28,880

Loss on sale of subsidiary

(2,987)

Reclassification of cumulated other comprehensive income movement from foreign currency translation reserve to profit or loss

(75)

Total loss on sale of interest in subsidiary

(3,062)

Fair value adjustment through profit or loss on reversal of call option held by New Mauritius Hotels

2,472

Net impact of disposal on profit or loss in the current year

(590)

Disposal of equity interest in Letlole La Rona Limited

During the year, Grit Services Limited a wholly owned subsidiary of the Group disposed of its entire equity interests of 25.10% in Letlole La Rona Limited on the Botswana Stock Exchange for a cash consideration. The disposal of shares has been completed in tranches. The number of shares disposed of and the trading price at the different disposal dates were as follows:

Number of shares disposed

Trading price per share

Percentage interest

 

BWP

%

19,000,000

3.48

6.79%

19,768,068

3.51

7.06%

12,600,000

3.16

4.50%

18,911,932

2.50

6.75%

70,280,000

 

25.10%

The net impact of the disposal of the interest in Letlole La Rona Limited on the results of the Group during the year is summarised as follows, with the largest contributor to the loss on disposal being the crystallisation of foreign currency translation differences that were recognised during the period in which the investment was held, and which arose due to the movement in the Botswana Pula against the US Dollar during the investment period.

 

US$’000

Fair value of consideration received

16,853

Less: Carrying amount of Investment in associate to be disposed

17,105

Loss on disposal of interest in associate

(252)

Reclassification of cumulative foreign currency translation reserve to profit or loss

(3,291)

Total loss on disposal of investment in associate

(3,543)

Utilisation of proceeds from disposal of assets

The proceeds on the disposal of the above-mentioned assets had largely been used to partially fund the acquisition of GREA and the settlement of debt.

Portfolio performance

Income producing assets increased by 0.6% during the year under review. The increase in investment properties is largely driven by capital expenditure incurred during the year along with the acquisition of the remaining 50% interest in Buffalo Mall, which resulted in the asset being consolidated in the Group results at 30 June 2023. The acquisition of a further 25.19% interest in GREA along with an increase of 1% interest in APDM was offset by the consolidation of Buffalo Mall as described above as well as the impact of the disposal of the entire shareholding in Beachcomber Hospitality Investments as well as LLR during the year. Other loans receivable decreased through partial repayments received from partners during the year.

Composition of income producing assets

2023

2022

 

US$'m

US$'m

Investment properties

628.8

604.5

Investment property included within ‘Investment in associates’

197.1

203.8

 

825.9

808.3

Deposits paid on investment properties

5.9

8.2

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

30.2

40.2

Total income producing assets

862.0

856.7

Property valuations

Reported property values based on Grit’s proportionate share of the total property portfolio (including joint ventures and GREA associates) decreased by 4.5% in the period and were principally impacted by “Asset Recycling” related to the disposal of stakes in BHI and LLR (both accounted for as associates) offset to an extent by increased stakes in the GREA assets (reflected in their various sectors) as a result of Grit’s increased interest in GREA (which moved from 26.29% to 51.48%). Additions predominantly related to capex deployed to various development projects in GREA as well as the Bollore property. Fair value loss on the portfolio amounted to US$5.9m, equating to -0.8% on the like-for-like portfolio.

Sector

Opening Property Value

Forex movement

Asset recycling

Development assets completed in the year

Additions

Change in ownership

Other

Fair value movements

Closing Property Value

Total Valuation

Movement

 

US$’000

US$’000

US$’000

US$’000

US$’000

US$’000

US$’000

US$’000

US$’000

%

Retail

197,417

1,330

-

-

371

12,322

720

551

212,711

7.7%

Hospitality

164,603

9,235

(100,057)

-

2,244

-

8

3,959

79,992

(51.4%)

Office

195,823

-

-

11,728

-

5,032

940

1,921

215,444

10.0%

Light industrial

80,414

-

-

-

7,899

-

655

(9,518)

79,450

(1.2%)

Data Centres

6,839

-

-

-

-

6,555

338

658

14,390

110.4%

Medical

-

(140)

-

5,633

-

4,626

-

2,108

12,227

100.0%

Corporate Accommodation

145,884

(520)

-

-

1,998

16,824

(793)

(5,621)

157,772

8.1%

LLR portfolio

20,946

(6,187)

(14,909)

-

-

-

-

150

-

(100.0%)

GREA under construction

13,214

715

-

(17,361)

14,506

5,167

159

(159)

16,241

22.9%

Total

825,140

4,433

(114,966)

-

27,018

50,526

2,027

(5,951)

788,227

(4.5%)

Subsidiaries

604,474

4,401

-

-

10,531

11,769

1,710

(4,108)

628,777

4.0%

Associates

203,770

552

(114,966)

-

15,088

22,576

89

(1,005)

126,104

(38.1%)

SUBTOTAL

808,244

4,953

(114,966)

-

25,619

34,345

1,799

(5,113)

754,881

(6.6%)

GREA Associates

16,896

(520)

-

-

1,399

16,181

228

(838)

33,346

97.4%

TOTAL

825,140

4,433

(114,966)

-

27,018

50,526

2,027

(5,951)

788,227

(4.5%)

Interest bearing borrowings movements

As at 30 June 2023, the Group had a total of US$398.3 million in interest bearing borrowings outstanding as compared to a total of US$425.1 million that was outstanding at the end of the comparative period. The reduction in these balances were largely driven by the settlement of interest-bearing borrowings amounting to US$19.4 million held in Leisure Property Northern (Mauritius) Limited, which was disposed during the year as well as a US$10.0 million repayment made on the loan facility that the Group holds with the State Bank of Mauritius Limited (other loans settled during the period amounted to US$5.6 million). During the year the Group acquired the remaining 50% interest in Buffalo Mall Naivasha Limited and due to the consolidation of this entity at 30 June 2023 the interest-bearing borrowings that relate to this entity amounting to US$4.4 million was included in the Group balance as at that date.

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

30 June 2023

30 June 2022

 

US$’000

US$’000

Balance at the beginning of the year

425,066

410,588

Proceeds of interest bearing-borrowings

324,459

58,513

Loan reduced through disposal of subsidiary

(19,404)

(6,624)

Loan acquired through asset acquisition

4,369

6,011

Loan issue costs incurred

(7,355)

(4,386)

Amortisation of loan issue costs

3,368

2,765

Foreign currency translation differences

3,561

(14,836)

Interest accrued

2,798

751

Debt settled during the year

(340,127)

(27,716)

As at 30 June

396,735

425,066

For more meaningful analysis, a further breakdown is provided below to better reflect debt related to non-consolidated associates. At 30 June 2023, the Group had a total of US$457.3 million in interest bearing borrowings outstanding, comprised of US$398.3 million in subsidiaries (as reported in IFRS balance sheet) and US$59.0 million proportionately consolidated and held within its associates.

 

30 June 2023

30 June 2022

 

Debt in Subsidiaries

Debt in associates

Total

 

Debt in Subsidiaries

Debt in associates

Total

 

 

US$’000

US$’000

US$’000

%

US$’000

US$’000

US$’000

%

Standard Bank Group

269,147

28,881

298,028

65.18%

183,496

6,516

190,012

40.30%

Bank of China

-

-

-

0.00%

76,405

-

76,405

16.21%

State Bank of Mauritius

35,361

2,769

38,130

8.34%

57,659

16,375

74,034

15.70%

Investec Group

34,722

-

34,722

7.59%

36,129

-

36,129

7.66%

Absa Group

-

14,157

14,157

3.10%

7,913

3,057

10,970

2.33%

ABC Banking Corporation

-

-

-

0.00%

7,121

-

7,121

1.51%

Afrasia Bank Limited

-

21

21

0.00%

-

-

-

0.00%

Nedbank Group

15,635

7,772

23,407

5.12%

21,820

286

22,106

4.69%

Mauritius Commercial Bank

-

-

-

0.00%

-

7,774

7,774

1.65%

Maubank

712

-

712

0.16%

3,345

-

3,345

0.71%

First National Bank

-

-

-

0.00%

-

9,013

9,013

1.91%

Housing Finance Corporation

4,369

-

4,369

0.96%

-

2,316

2,316

0.49%

Bank of Gaborone

-

-

-

0.00%

-

727

727

0.15%

SBI (Mauritius) Ltd

-

2,078

2,078

0.45%

-

-

-

0.00%

Cooperative Bank of Oromia

-

3,303

3,303

0.72%

-

-

-

0.00%

NCBA Bank Kenya

17,500

-

17,500

3.83%

10,700

-

10,700

2.27%

Private Equity

4,725

-

4,725

1.03%

4,725

-

4,725

1.00%

International Finance Corporation

16,100

-

16,100

3.52%

16,100

-

16,100

3.41%

TOTAL BANK DEBT

398,271

58,981

457,252

100.00%

425,413

46,064

471,477

100.00%

Interest accrued

7,725

 

 

 

4,927

 

 

 

Unamortised loan issue costs

(9,261)

 

 

 

(5,274)

 

 

 

As at 30 June

396,735

 

 

 

425,066

 

 

 

Capital commitments

Upcoming capital commitments in the current financial year include:

Club Med Senegal redevelopment: EUR27.1 million up to January 2025; and

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

Net Asset Value and EPRA Net Realisable Value

Further reconciliations and details of EPRA earnings per share and other metrics are provided in notes 11 to 13.

Net asset value evolution

Unaudited

Unaudited

 

US$'000

US$'cps

IFRS NAV as reported

336,301

70.1

Derivative financial instruments

(1,862)

(0.4)

Deferred Tax on Properties

46,873

9.7

EPRA NRV at 30 Jun 2022

381,312

79.4

Portfolio valuations

(5,113)

(1.1)

Other fair value adjustments

(873)

(0.2)

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

(20,680)

(4.3)

Dividend attributable to NCI

(2,397)

(0.5)

Cash profits

17,267

3.6

Movement through FCTR

4,802

1.1

Dividend paid

(19,188)

(4.0)

Movement other equity instruments

(5,568)

(1.2)

EPRA NRV Before Dilution

349,562

72.8

Effect of treasury shares

94

0.0

EPRA NRV at 30 Jun 2023

349,656

72.8

Deferred Tax on Properties

(48,217)

(10.0)

Derivatives

(789)

(0.2)

IFRS NRV at 30 Jun 2023

300,650

62.6

Going Concern

The Directors’ assessment of the Group’s and Company’s ability to continue as a going concern is required when approving the financial statements. As such the Directors have modelled a ‘base case’ and a ‘severe but plausible downside’ of the Group’s and Company’s expected liquidity and covenant position for a going concern assessment period through to March 2025, a period of at least 12 months following the approval of these accounts. The Directors considered the existing structure of the group, where GREA is accounted for as a joint venture, and also the forecasts under a scenario where GREA is controlled and therefore consolidated which is the stated intention of the group

The process involved a thorough review of the Group’s risk register, an analysis of the trading performance both pre and post year-end, extensive discussions with the independent property valuers, a review of the operational indicators within the Group and economic data available in the countries in which the Group operates. All of this has been done in the context of the continued global market instability, previous experience of the African real estate sector and best estimates of expectations in the future.

Base Case model

The base case reflects the Directors’ best expectations of the position going forward. It was modelled on board approved forecasts over the relevant period with amendments to reflect current changes in the business. The base case scenario includes the Group’s and Company’s financial projections and the following key assumptions:

1.

Management has modelled the proceeds of both the IFC funding instrument (US$30 million) as well as the recapitalisation of GREA (with a cash injection of US$48.5 million) to be closed from November 2023.

 

a.

The initial deployment of the IFC instrument shall be utilised to acquire a sale and lease back asset with a value of at least US$15 million (which is a requirement of the IFC instrument) with the remaining balance being undrawn; and

 

b.

The US$48.5 million recapitalisation of GREA is to fund new development projects and to unlock the fee income strategies of the Group as contemplated under “Grit 2.0”. The proceeds of the GREA recapitalisation shall initially be applied to reduce debt in the short term, through the shared Treasury policy, before being deployed towards the Group’s pipeline in due course. The applicable development fee income surrounding the deployment of the cash has been included in the model. As the cash is targeted to be received in December 2023, the Directors have applied significant judgement on the inclusion of the US$48.5 million capital injection in GREA. The judgement that the cash will be received from the capital injection has been made on the basis that this has been approved by the Board of GREA and by the investment committee of the third-party investor. For these reasons the Directors have concluded that they have obtained sufficient evidence that the cash will be received in due course. The Group is not compelled to inject cash of its own as part of the recapitalisation of GREA.

2.

Modelling the Company’s contractual lease income, which at 30 June 2023 had a weighted average lease expiry of 4.4 years and applying the applicable contractual lease escalations (which averaged 3.0% in the current period);

3.

Expected take up of vacancies from ordinary letting activities, updated for any leases concluded post year end;

4.

Debt is refinanced in the ordinary course of business, based on the Group’s historical ability to refinance debt as required;

5.

Hedging contracts with a nominal value of US$200 million, which are more fully described in the CFO statement and have been concluded post year end, are included in the model;

6.

Base interest rates increase to 5.38% (in the case of US Dollar SOFR base rates) and 3.92% (in the case of Euro base rates) before retracing to 3.91% and 1.85% respectively by March 2025;

7.

Depreciation of the various African currencies versus the US Dollar, most notably the Zambian Kwacha depreciating by 19.4% and the New Mozambique Metical depreciating by 21.3% over the period, with the Euro appreciating by 4.2% over the period;

8.

Property valuations that assume constant discount and exit capitalisation rates to those applied by the independent valuers for the year ended 30 June 2023, while applying the cashflows and currency impacts mentioned above;

9.

Drive in Trading guarantee settlement paid in March 2024 of US$17.5 million;

10.

Further progress towards, and extension of, the Company’s stated asset disposal strategy whose proceeds are deployed to reduce debt facilities and to fund future pipeline opportunities; and

11.

Administrative expense reductions of c.$4.6 million during FY24 and FY25.

Severe but plausible downside model

The severe but plausible downside scenario is initially applied to Grit on a standalone basis and then includes additional overlays of consolidated GREA scenarios to reflect the intention of the Directors to obtain control over GREA. A summary of the key assumption overlays to the Base Case made in the severe but plausible scenario are as follows:

1.

As the IFC agreement has not yet been signed by the financial statement date, the initial utilisation of the funds has therefore not been assumed. The funds from the GREA recapitalisation have been assumed to be held in debt facilities as the projects to which they will be allocated have not yet reached sufficient finality (most specifically binding pre-let agreements and specific project debt funding) reducing the Group’s interest costs and improving liquidity. Any fee income related to these projects have also not been modelled. As the cash is targeted to be received in December 2023, the Directors have applied significant judgement on the inclusion of the US$48.5 million capital injection in GREA. The judgement that the cash will be received from the capital injection has been made on the basis that this has been approved by the Board of GREA and by the investment committee of the third-party investor. For these reasons, the Directors have concluded that they have obtained sufficient evidence that the cash will be received in due course;

2.

Base interest rates are assumed to continue to increase to levels higher than those assumed in the base case, with base rates staying higher for longer and at levels increasing to c1.25% higher than the base case scenario and then maintaining this average over the measurement period. The resultant assumed rates are: 

 

SOFR base rates increase to a maximum of 6.31% up to June 24 before rate retracting 5.16% in March 2025;

 

3 month Euribor rates increase to 5.05% before retracting to 4.55% in June 2024 and 3.48% in March 2025;

3.

All debt facilities that mature during the period to December 2024 are assumed to be repaid on the current maturity date; while those beyond this date, specifically the US$306 million sustainability linked syndicated loan facility maturing in 2027, the SBM Euro 22.3 million and Nedbank US$8 million facilities maturing in April 2025, are assumed to be refinanced in the ordinary course;

4.

Further depreciation of currencies versus the US Dollar, most notably the Euro depreciating by 4.0% over the period and movements in various African currencies of up to 22.8%;

5.

Only contractual preference share coupons are paid;

6.

The ongoing refurbishment of the Club Med Cap Skirring Resort in Senegal is reduced to the contractually obligated spend; and

7.

Administrative expense reductions of c.US$4.6 million during FY24 and FY25.

Given the Group’s stated intention to consolidate GREA, further overlays in the severe but plausible downside scenario are applied to GREA and include:

1.

Interest rate and currency sensitivities, as above, are applied to GREA debt, and debt facilities that mature during the period are assumed to be repaid on the current maturity date;

2.

Delays and cancellations to targeted asset disposals are modelled;

3.

Potential delays of current development projects underway have been factored in by up to 6 months; and

4.

Future projects are ceased, with no additional fee income generation from these projects or related asset management services.

Where potential risks to covenants have been identified, the Group has received specific condonements from its financiers should the scenario modelled come to pass. This includes Interest Cover Ratio covenant condonements and Loan to Value covenant condonements during the going concern period for risks identified at the December 2024 measurement period.

Under both the base case and the severe but plausible scenario, along with certain remedies within management’s control, which include actions like cuts in dividends, the Company is able to meet its liquidity and covenant positions through to March 2025. The Board has therefore concluded that it is appropriate to prepare the financial statements on the going concern basis and have concluded that there is no material uncertainty in forming that view, noting the significant judgement made in connection with the GREA capital raise.

Leon van de Moortele

 

Chief Financial Officer

 

31 October 2023

 

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 categories and existing mitigating actions and are satisfied that they remain appropriate to manage the relevant risks.

STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS

The responsibility statement has been prepared in connection with the Groups 2023 Integrated Annual Report, extracts of which are included within this announcement.

The Directors are responsible for preparing financial statements for each financial year which give a true and fair view, in accordance with applicable Guernsey law and International Financial Reporting Standards, of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing those financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;

make judgements and estimates that are reasonable and prudent;

state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors confirm that they have complied with the above requirements in preparing the financial statements.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with The Companies (Guernsey) Law, 2008. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

So far as the directors are aware, there is no relevant audit information of which the Company’s auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the Company’s auditors are aware of that information.

Directors’ confirmations

The Directors consider that the Integrated Report and Accounts, taken as a whole, is fair, balanced, and understandable and provides the information necessary for shareholders to assess the Group’s position, performance, business model and strategy.

Each of the Directors, whose names and functions are listed in pages 98 to 99 confirm that, to the best of their knowledge:

the Group and Company financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board; the Financial Pronouncements as issued by Financial Reporting Standards Council, the LSE and SEM Listings Requirements and the requirements of the Companies (Guernsey) Law 2008, give a true and fair view of the assets, liabilities, financial position and loss of the Group and profit of the Company; and

the Strategic report includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that it faces.

The financial statements on pages 172 to 272 were approved by the Board of Directors and signed on its behalf by:

On behalf of the Board

Bronwyn Knight

Leon van de Moortele

Chief Executive Officer

Chief Financial Officer

CONSOLIDATED STATEMENT OF INCOME

 

 

Audited for the year ended

30 June 2023

Audited for the year ended

30 June 2022

Restated

 

Notes

US$'000

US$'000

Gross property income

 

56,249

51,937

Property operating expenses

 

(9,624)

(8,656)

Net property income

 

46,625

43,281

Other income

 

286

80

Administrative expenses

 

(22,578)

(16,944)

Net impairment charge on financial assets

 

(3,868)

(5,301)

Profit from operations

 

20,465

21,116

Fair value adjustment on investment properties

 

(4,108)

20,080

Contractual receipts from vendors of investment properties

2

-

(297)

Total fair value adjustment on investment properties

 

(4,108)

19,783

Fair value adjustment on other financial liability

 

3,625

(11,315)

Fair value adjustment on other financial asset

 

264

(371)

Fair value adjustment on derivative financial instruments

 

(3,085)

4,501

Share-based payment expense

 

(354)

(1,238)

Share of profits from associates and joint ventures

3

14,300

20,611

Loss on disposal of investment in subsidiary

3

(3,240)

(2,051)

Loss on disposal of interest in associate

 

(3,543)

(573)

Impairment of loans and other receivables

 

-

(3,101)

Loss on derecognition of loans and other receivables

 

(3,735)

-

Foreign currency losses

 

(2,241)

(5,412)

Loss on extinguishment of borrowings

 

(1,166)

-

Loss on disposal of property, plant, and equipment

 

(888)

-

Other transaction costs

 

(2,156)

-

Profit before interest and taxation

 

14,138

41,950

Interest income

 

4,096

1,935

Finance costs

 

(39,582)

(26,151)

(Loss) / profit for the year before taxation

 

(21,348)

17,734

Taxation

 

(4,225)

(6,621)

(Loss) / profit for the year after taxation

 

(25,573)

11,113

(Loss) / profit attributable to:

 

 

 

Equity shareholders

 

(23,631)

10,443

Non-controlling interests

 

(1,942)

670

 

 

(25,573)

11,113

Basic and diluted (losses) / earnings per ordinary share (cents)

10

(4.90)

2.62

 

 

 

 

 

1

Prior year comparatives have been restated to reflect a change in accounting policy following clarification by the IFRS Interpretation Committee ("IFRIC") in October 2022 of how lessor should account for the forgiveness of lease payments. Details of the restatement and impact on prior year comparatives are set out in note 2.3 'Changes in accounting policies'

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

Audited for the year ended

30 June 2023

Audited for the year ended

30 June 2022

Restated1

 

US$'000

US$'000

(Loss) / profit for the year

(25,573)

11,113

Retirement benefit obligation

86

154

Exchange differences on translation of foreign operations2

1,790

(5,445)

Share of other comprehensive expense of associates and joint ventures2

(43)

(4,173)

Other comprehensive income / (expense) that may be reclassified to profit or loss

1,833

(9,464)

 

 

 

Total comprehensive (expense) / income relating to the year

(23,740)

1,649

 

 

 

Attributable to:

 

 

Equity shareholders

(22,109)

2,587

Non-controlling interests

(1,631)

(938)

 

(23,740)

1,649

 

1

Prior year comparatives have been restated to reflect a change in accounting policy following clarification by the IFRS Interpretation Committee ("IFRIC") in October 2022 of how lessor should account for the forgiveness of lease payments. Details of the restatement and impact on prior year comparatives are set out in note 2.3 'Changes in accounting policies'

2

In the current year, the Group has restated its comparative figures in its statement of comprehensive income in order to split the exchange differences on translation of foreign operations between exchange differences arising from the operations of its subsidiaries and its shares of other comprehensive (expense)/income from associates and joint ventures.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

 

Audited as at

30 June 2023

Audited as at

30 June 2022

 

Notes

US$'000

US$'000

Assets

 

 

 

Non-current assets

 

 

 

Investment properties

2

628,777

604,474

Deposits paid on investment properties

2

5,926

8,309

Property, plant and equipment

 

4,490

2,087

Intangible assets

 

433

670

Other investments

 

-

1

Investments in associates and joint ventures

3

197,094

206,997

Related party loans receivable

 

92

515

Other loans receivable

5

21,005

-

Derivative financial instruments

 

91

-

Trade and other receivables

4

3,448

4,615

Deferred tax asset

 

12,578

12,544

Total non-current assets

 

873,934

840,212

 

 

 

 

Current assets

 

 

 

Trade and other receivables

4

18,578

29,055

Current tax receivable

 

3,389

1,881

Related party loans receivable

 

751

298

Other loans receivable

5

-

37,908

Derivative financial instruments

 

1,828

1,862

Cash and cash equivalents

 

9,207

26,002

Total current assets

 

33,753

97,006

Total assets

 

907,687

937,218

 

 

 

 

Equity and liabilities

 

 

 

Total equity attributable to ordinary shareholders

 

 

 

Ordinary share capital

 

535,694

535,694

Treasury shares reserve

 

(16,306)

(16,212)

Foreign currency translation reserve

 

(389)

(5,191)

Accumulated losses

 

(218,349)

(177,990)

Equity attributable to owners of the Company

 

300,650

336,301

Preference share capital

6

31,596

29,558

Perpetual preference notes

7

26,827

25,741

Non-Controlling interests

 

(25,456)

(22,224)

Total equity

 

333,617

369,376

 

 

 

 

Liabilities

 

 

 

Non-current liabilities

 

 

 

Redeemable preference shares

 

12,849

12,840

Proportional shareholder loans

 

35,733

26,716

Interest-bearing borrowings

8

318,453

242,091

Lease liabilities

 

3,335

545

Derivative financial instruments

 

1,425

-

Related party loans payable

 

7,195

1,205

Deferred tax liability

 

51,933

49,592

Total non-current liabilities

 

430,923

332,989

 

 

 

 

Current liabilities

 

 

 

Interest-bearing borrowings

8

78,282

182,975

Lease liabilities

 

1,265

864

Trade and other payables

 

46,366

31,411

Current tax payable

 

717

763

Derivative financial instruments

 

1,284

-

Related party loans payable

 

-

1

Other financial liabilities

 

13,358

16,983

Bank overdrafts

 

1,875

1,856

Total current liabilities

 

143,147

234,853

Total liabilities

 

574,070

567,842

Total equity and liabilities

 

907,687

937,218

CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

Audited as at

30 June 2023

Audited as at

30 June 2022

 

Notes

US$'000

US$'000

Net cash generated from operating activities

 

32,551

11,293

Acquisition of, and additions to investment properties

 

(7,582)

(38,996)

Deposits paid on investment properties

 

-

(2,500)

Additions to property, plant, and equipment

 

(267)

(117)

Additions to intangible assets

 

(28)

-

Additions of interests in joint ventures

 

(56,408)

(39,613)

Proceeds from disposal of interest in subsidiary

 

28,880

-

Proceeds from disposal of interest in associates and joint ventures

 

16,853

3,347

Acquisition of subsidiary, net of cash acquired

 

127

1,121

Dividends and interest received from associates and joint ventures

 

22,426

3,985

Proportional shareholder loan repayments from associates and joint ventures

 

2,684

10,031

Interest received

 

1,728

668

Proceeds from disposal of property, plant, and equipment

 

200

49

Related party loans receivable repaid

 

427

-

Related party loans receivable granted

 

-

(765)

Settlement of other financial liabilities

 

-

(639)

Deposits received

 

13,776

6,500

Related party loans payable paid

 

(2,000)

-

Related party loans payable received

 

-

467

Other loans receivable repaid by partners

 

6,092

-

Net cash generated from / (utilised in) investing activities

 

26,908

(56,462)

Proceeds from the issue of ordinary shares

 

-

54,488

Proceeds from the issue of perpetual preference note

 

-

31,500

Perpetual preference notes issue expenses

 

-

(1,606)

Perpetual note dividend paid

 

(2,443)

(1,265)

Share issue expenses

 

-

(7,943)

Ordinary dividends paid

 

(20,175)

(10,535)

Proceeds from interest-bearing borrowings

 

324,459

53,788

Settlement of interest-bearing borrowings

 

(340,127)

(27,716)

Finance costs

 

(39,662)

(26,497)

Proportional shareholder loans repaid

 

(4,750)

(1,967)

Proceeds from proportional shareholder loans

 

9,589

5,576

Buy back of own shares

 

(94)

-

Payment of premium on derivative instrument

 

(433)

-

Payments of leases

 

(1,415)

(429)

Net cash (utilised in) / generated from financing activities

 

(75,051)

67,394

Net movement in cash and cash equivalents

 

(15,592)

22,225

Cash at the beginning of the year

 

24,146

2,314

Effect of foreign exchange rates

 

(1,222)

(393)

Total cash and cash equivalents (including overdrafts) at the end of the year

 

7,332

24,146

The Group has reclassified cash flows arising on cash movement on proportional shareholder loans, previously categorised as investing activities, to financing activities. The reclassification does not affect the Group’s total cash and cash equivalents or its overall financial position. Proportional shareholder loans, inherently by virtue of how the Group structures its acquisitions, form part of the Group’s capital structure. To align the presentation of proportional shareholder loans which is a financial liability on the face of the statement of financial position, the Group believes that the classification of the cash movements in the cash flow statements under financing activities is more representative.

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 interest

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 2021

463,842

(18,406)

1,495

-

(176,073)

25,481

-

(17,935)

278,404

Profit for the year

-

-

-

-

10,443

-

-

670

11,113

Other comprehensive (expense) / income for the year

-

-

(8,010)

-

154

-

-

(1,608)

(9,464)

Total comprehensive (expense) / income

-

-

(8,010)

-

10,597

-

-

(938)

1,649

Share based payments

-

-

-

-

138

-

-

-

138

Antecedent dividend reserve

(3,659)

-

-

3,659

-

-

-

-

-

Ordinary dividends declared

-

-

-

(3,659)

(7,903)

-

-

-

(11,562)

Treasury shares

-

(2,906)

-

-

-

-

-

-

(2,906)

Disposal of treasury shares

-

5,100

-

-

-

-

-

(3,600)

1,500

Ordinary shares issued

83,454

-

-

-

-

-

-

-

83,454

Perpetual preference notes issued

-

-

-

-

-

-

26,775

-

26,775

Preferred dividend accrued on perpetual notes

-

-

-

-

(1,837)

-

572

-

(1,265)

Share issue expenses relating to issue of perpetual notes

-

-

-

-

-

-

(1,606)

-

(1,606)

Preferred dividend accrued on preference shares

-

-

-

 

(4,077)

4,077

-

-

-

Share issue expenses

(7,943)

-

-

-

-

-

-

-

(7,943)

Non-controlling interests on acquisition of subsidiary other than business combination

-

-

-

-

-

-

-

1,414

1,414

Reclassification of foreign currency translation reserve on sale of subsidiary

-

-

906

-

-

-

-

-

906

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

-

-

418

-

-

-

-

-

418

Dividends distributable to non-controlling shareholders

-

-

-

-

1,165

-

-

(1,165)

-

Balance as at 30 June 2022

535,694

(16,212)

(5,191)

-

(177,990)

29,558

25,741

(22,224)

369,376

 

 

 

 

 

 

 

 

 

 

Balance as at 1 July 2022

535,694

(16,212)

(5,191)

-

(177,990)

29,558

25,741

(22,224)

369,376

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 associate

-

-

-

-

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 associate with own equity

-

-

-

-

(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

535,694

(16,306)

(389)

-

(218,349)

31,596

26,827

(25,456)

333,617

NOTES TO THE FINANCIAL STATEMENTS

1. Summary of significant accounting policies

The principal accounting policies applied in the preparation of these separate and consolidated financial statements are set out below. Grit was incorporated in Mauritius and redomiciled to Guernsey as a PLC, while the place of effective management remains in Mauritius.

1.1 Basis of preparation

The Group and Company financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board; the Financial Pronouncements as issued by Financial Reporting Standards Council, the LSE and SEM Listings Requirements and the requirements of the Companies (Guernsey) Law 2008. This approach is consistent to prior years and no applicable new standards or amendments were applied to the Company during the current financial year. The financial statements have been prepared on the going-concern basis and were approved for issue by the board on 30 October 2023.

These full year audited consolidated results for the year ended 30 June 2023 do not include all the information required for full annual statements and should be read in conjunction with the 2023 Integrated Annual Report of Grit Real Estate Income Group Limited.

Going Concern

The Directors' assessment of the Group's and Company’s ability to continue as a going concern is required when approving the financial statements. As such the Directors have modelled a 'base case' and a 'severe but plausible downside' of the Group's and Company’s expected liquidity and covenant position for a going concern assessment period through to March 2025, a period of at least 12 months following the approval of these accounts. The Directors considered the existing structure of the group, where GREA is accounted for as a joint venture, and also the forecasts under a scenario where GREA is controlled and therefore consolidated which is the stated intention of the group

The process involved a thorough review of the Group's risk register, an analysis of the trading performance both pre and post year-end, extensive discussions with the independent property valuers, a review of the operational indicators within the Group and economic data available in the countries in which the Group operates. All of this has been done in the context of the continued global market instability, previous experience of the African real estate sector and best estimates of expectations in the future.

Base Case model

The base case reflects the Directors’ best expectations of the position going forward. It was modelled on board approved forecasts over the relevant period with amendments to reflect current changes in the business. The base case scenario includes the Group’s and Company’s financial projections and the following key assumptions:

1.

Management has modelled the proceeds of both the IFC funding instrument (US$30 million) as well as the recapitalisation of GREA (with a cash injection of US$48.5 million) to be closed from November 2023.

 

a.

The initial deployment of the IFC instrument shall be utilised to acquire a sale and lease back asset with a value of at least US$15 million (which is a requirement of the IFC instrument) with the remaining balance being undrawn; and

 

b.

The US$48.5 million recapitalisation of GREA is to fund new development projects and to unlock the fee income strategies of the Group as contemplated under “Grit 2.0”. The proceeds of the GREA recapitalisation shall initially be applied to reduce debt in the short term, through the shared Treasury policy, before being deployed towards the Group’s pipeline in due course. The applicable development fee income surrounding the deployment of the cash has been included in the model. As the cash is targeted to be received in December 2023, the Directors have applied significant judgement on the inclusion of the US$48.5 million capital injection in GREA. The judgement that the cash will be received from the capital injection has been made on the basis that this has been approved by the Board of GREA and by the investment committee of the third-party investor. For these reasons the Directors have concluded that they have obtained sufficient evidence that the cash will be received in due course. The Group is not compelled to inject cash of its own as part of the recapitalisation of GREA.

2.

Modelling the Company’s contractual lease income, which at 30 June 2023 had a weighted average lease expiry of 4.4 years and applying the applicable contractual lease escalations (which averaged 3.0% in the current period);

3.

Expected take up of vacancies from ordinary letting activities, updated for any leases concluded post year end;

4.

Debt is refinanced in the ordinary course of business, based on the Group’s historical ability to refinance debt as required;

5.

Hedging contracts with a nominal value of US$200 million, which are more fully described in the CFO statement and have been concluded post year end, are included in the model;

6.

Base interest rates increase to 5.38% (in the case of US Dollar SOFR base rates) and 3.92% (in the case of Euro base rates) before retracing to 3.91% and 1.85% respectively by March 2025;

7.

Depreciation of the various African currencies versus the US Dollar, most notably the Zambian Kwacha depreciating by 19.4% and the New Mozambique Metical depreciating by 21.3% over the period, with the Euro appreciating by 4.2% over the period;

8.

Property valuations that assume constant discount and exit capitalisation rates to those applied by the independent valuers for the year ended 30 June 2023, while applying the cashflows and currency impacts mentioned above;

9.

Drive in Trading guarantee settlement paid in March 2024 of US$17.5 million;

10.

Further progress towards, and extension of, the Company’s stated asset disposal strategy whose proceeds are deployed to reduce debt facilities and to fund future pipeline opportunities; and

11.

Administrative expense reductions of c.$4.6 million during FY24 and FY25.

Severe but plausible downside model

The severe but plausible downside scenario is initially applied to Grit on a standalone basis and then includes additional overlays of consolidated GREA scenarios to reflect the intention of the Directors to obtain control over GREA. A summary of the key assumption overlays to the Base Case made in the severe but plausible scenario are as follows:

1.

As the IFC agreement has not yet been signed by the financial statement date, the initial utilisation of the funds has therefore not been assumed. The funds from the GREA recapitalisation have been assumed to be held in debt facilities as the projects to which they will be allocated have not yet reached sufficient finality (most specifically binding pre-let agreements and specific project debt funding), reducing the Groups interest costs and improving available liquidity. Any fee income related to these projects have also not been modelled. As the cash is targeted to be received in December 2023, the Directors have applied significant judgement on the inclusion of the US$48.5 million capital injection in GREA. The judgement that the cash will be received from the capital injection has been made on the basis that this has been approved by the Board of GREA and by the investment committee of the third-party investor. For these reasons the Directors have concluded that the cash will be received in due course;

2.

Base interest rates are assumed to continue to increase to levels higher than those assumed in the base case, with base rates staying higher for longer and at levels increasing to c1.25% higher than the base case scenario and then maintaining this average over the measurement period. The resultant assumed rates are: 

 

SOFR base rates increase to a maximum of 6.31% up to June 24 before rate retracting 5.16% in March 2025;

 

3 month Euribor rates increase to 5.05% before retracting to 4.55% in June 2024 and 3.48% in March 2025;

3.

All debt facilities that mature during the period to December 2024 are assumed to be repaid on the current maturity date; while those beyond this date, specifically the US$306 million sustainability linked syndicated loan facility maturing in 2027, the SBM Euro 22.3 million and Nedbank US$8 million facilities maturing in April 2025, are assumed to be refinanced in the ordinary course;

4.

Further depreciation of currencies versus the US Dollar, most notably the Euro depreciating by 4.0% over the period and movements in various African currencies of up to 22.8%;

5.

Only contractual preference share coupons are paid;

6.

The ongoing refurbishment of the Club Med Cap Skirring Resort in Senegal is reduced to the contractually obligated spend; and

7.

Administrative expense reductions of c.US$4.6 million during FY24 and FY25.

Given the Group’s stated intention to consolidate GREA, further overlays in the severe but plausible downside scenario are applied to GREA and include:

1.

Interest rate and currency sensitivities, as above, are applied to GREA debt, and debt facilities that mature during the period are assumed to be repaid on the current maturity date;

2.

Delays and cancellations to targeted asset disposals are modelled;

3.

Potential delays of current development projects underway have been factored in by up to 6 months; and

4.

Future projects are ceased, with no additional fee income generation from these projects or related asset management services.

Where potential risks to covenants have been identified, the Group has received specific condonements from its financiers should the scenario modelled come to pass. This includes Interest Cover Ratio covenant condonements and Loan to Value covenant condonements during the going concern period for risks identified at the December 2024 measurement period.

Under both the base case and the severe but plausible scenario, along with certain remedies within management’s control, which include actions like cuts in dividends, the Company is able to meet its liquidity and covenant positions through to March 2025. The Board has therefore concluded that it is appropriate to prepare the financial statements on the going concern basis and have concluded that there is no material uncertainty in forming that view, noting the significant judgement made in connection with the GREA capital raise.

Functional and presentation currency

The consolidated financial statements are prepared and are presented in United States Dollars (US$) which is also the functional and presentational currency of the Company. Amounts are rounded to the nearest thousand, unless otherwise stated. Some of the underlying subsidiaries and associates have different functional currencies other than the US$ which is predominantly determined in the country 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, 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. Alternative Performance Measures are not a substitute for, nor necessarily superior to, statutory measures.

1.2 Critical Judgements and estimates

The preparation of financial statements in conformity with IFRS requires the use of accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The estimates and assumptions relating to the fair value of investment properties in particular, have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities in the subsequent financial year. Fair value adjustments do not affect the determination of distributable earnings but have an effect on the net asset value per share presented on the statement of financial position to the extent that such adjustments are made to the carrying values of assets and liabilities.

Judgements

Amongst others, some principal areas where such judgements have been applied are:

African Property Development Managers Ltd (“APDM)” as a joint venture

The Group had previously acquired an equity interest of 77.95% in ADPM. Further during the current financial year, the Group has acquired an additional equity interest of 1% bringing the total shareholding of the Group in ADPM to 78.95%. The Group has concluded that even though it holds a majority shareholding in ADPM, it does not have control of the latter because it is currently not satisfying the power criteria of control. The design of ADPM is such that decisions about the relevant activities need to be approved by the investment committee of the company. For a decision to be approved, seventy five percent of the members present need to vote in favour of the decision. Currently the Group has the right to appoint four members to the investment committee. The Public Investment Corporation SOC ('PIC') who holds 21.05% of APDM has the right to appoint two members. Given the seventy five percent threshold requirement to pass any resolution, the Group and PIC will have to unanimously agree to any decision before those are formally enacted by management. Therefore, neither the Group nor PIC on their own control ADPM. Because of the unanimous consent required by both the significant shareholders of ADPM, the Group has classified the investment in ADPM as an investment in joint venture.

Gateway Real Estate Africa Ltd (“GREA”) as a joint venture

The Group has continued the announce plan to acquire a majority stake in GREA during this financial year. An additional shareholding of 25.19% has been acquired in GREA by the Group which brings the total shareholding in GREA to 51.48%. The increase in shareholding has also entitled the Group the right to appoint two additional directors on GREA board of directors in addition to the one director that the Group was already entitled to appoint. The design of GREA is such that its relevant activities are directed by its board of directors. Under the current shareholder agreement, for a decision to be approved, seventy five percent of the directors present need to vote in favour of the decision. With the Group being entitled to appoint three out the seven directors of the board, the Group will need the support of the PIC, who is entitled to appoint two directors for any decision to be approved. Therefore, neither the Group nor the PIC on their own has control over GREA. The Group and PIC will have to unanimously agree to any decision before those are adopted by GREA. Because of the unanimous consent required by both the Group and PIC, the investment in GREA has been classified as an investment in joint venture by the Group. Previously the Group had classified the investment in GREA as an investment in associate. However, with now the exit of Gateway Africa Real Estate Limited ("GWP") and Prudential Impact Investments Private Equity LLC ("Prudential") being finalized, the only remaining shareholders in the structure are Grit and PIC and they both have joint control as explained above.

Recapitalisation of GREA

The Directors’ have applied significant judgement with regards to the recapitalisation of GREA. Both the GREA and Grit Board’s have approved a recapitalisation of not less than US$48.5 million. Significant progress has been made in this regard, including the approval of the investors’ respective Investment Committees. While a number of processes remain in progress, they have been carefully considered and having obtained the necessary confirmation, are deemed to be administrative in nature. The Board has obtained sufficient comfort that the process shall be completed either on, or close to the targeted date of December 2023. Further details are included in the Going Concern section in Note 1.1.

Estimates

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 relevant reporting date. Further details of the valuation method are included in note 2.

1.3 Changes in accounting policies

Restatement – IFRIC Agenda Decision – Forgiveness of lease payments

In October 2022, the International Financial Reporting Interpretations Committee (IFRIC) issued a final agenda decision regarding 'Lessor forgiveness of lease payments (IFRS 9 and IFRS 16),' providing clarification on lessor accounting for concessions, specifically rental forgiveness, granted to tenants. The IFRIC clarified that when rent receivables are overdue and subsequently forgiven, lessors are required to apply the expected credit loss (ECL) and de-recognition principles outlined in IFRS 9. This entails recognizing an income statement charge upon the recognition of the loss allowance and writing off the gross carrying amount of the rent receivable against the loss allowance upon forgiving the rent receivable. Historically, the Group accounted for such rental forgiveness using the lease modification requirements of IFRS 16, recording them as lease incentives assets and spreading them as a reduction of rental income over the lease term of the respective tenant to whom the rent forgiveness was granted.

The agenda decision further clarified that forgiveness of future rent not yet due qualifies as lease modifications under IFRS 16. The impact of this forgiveness should be recognized as a reduction of rental income on a straight-line basis over the lease term, consistent with our Group's existing treatment. In light of the clarification provided by the IFRIC Agenda decision, the Group reviewed its accounting policy concerning rental forgiveness for past due amounts.

As a result of this review, the Group has retrospectively applied the requirements of IFRS 9 to the past due rent receivables that were forgiven. The implementation of this change has resulted to a restatement of the comparative figures for June 30, 2022, impacting key income statement line items such as Gross property income, Net property income, Impairment of financial assets, Profit from operations and fair value adjustments on investment properties. However, it is important to note that the total profit for the year remains unchanged.

The application of the IFRIC clarification did not have any impact on the balance sheet of the Group as lease incentives are incorporated within the carrying value of investment properties already. Therefore, any movement in lease incentives will result in an equal and opposite movement in investment property (through fair value adjustment) to avoid double counting for an asset (lease incentive asset) which is already embedded in the investment properties valuations.

The following table shows the financial statement line items which have been impacted in the Group Income statement for the prior years.

 

 

30 June 2022

Reported

30 June 2022

Restatement

30 June 2022

Restated

Extract of group income statement

 

US$’000

US$’000

US$’000

Gross property income

 

50,766

1,171

51,937

Net operating income

 

42,110

1,171

43,281

Net impairment on financial assets

 

(4,217)

(1,084)

(5,301)

Profit from operations

 

21,029

87

21,116

Fair value adjustment on investment properties

 

20,167

(87)

20,080

Total fair value adjustments on investment properties

 

19,870

(87)

19,783

 

 

 

30 June 2021

Reported

30 June 2021

Restatement

30 June 2021

Restated

Extract of group income statement

 

US$’000

US$’000

US$’000

Gross property income

 

49,217

1,828

51,045

Net operating income

 

40,674

1,828

42,502

Net impairment on financial assets

 

(7,119)

(3,698)

(10,817)

Profit from operations

 

19,857

(1,870)

17,987

Fair value adjustment on investment properties

 

(51,441)

1,871

(49,570)

Total fair value adjustments on investment properties

 

(51,297)

1,871

(49,426)

 

2. INVESTMENT PROPERTIES

The following movements in the portfolio occurred in the year

1.

Transfer from associate on step up to subsidiary - The Group acquired an additional 50% equity shareholding in Buffalo Mall Naivasha Limited during the year which has now stepped up from an associate to a subsidiary.

2

Capital expenditure and construction costs incurred in the Club Med Cap Skirring Resort as well as on the Orbit complex.

 

Summary of valuations by reporting date

Most recent independent valuation date

Valuer (for the most recent valuation)

Sector

Country

Audited

as at

30 June 2023

Audited

as at

30 June 2022

 

 

 

 

 

US$'000

US$'000

Commodity House Phase I

30 June 2023

REC

Office

Mozambique

54,094

52,346

Commodity House Phase II

30 June 2023

REC

Office

Mozambique

19,727

19,264

Hollard Building

30 June 2023

REC

Office

Mozambique

20,847

21,012

Vodacom Building

30 June 2023

REC

Office

Mozambique

53,362

51,906

Zimpeto Square

30 June 2023

REC

Retail

Mozambique

3,303

3,395

Bollore Warehouse

30 June 2023

REC

Light industrial

Mozambique

10,770

10,410

Anfa Place Mall

30 June 2023

Knight Frank

Retail

Morocco

73,357

71,532

Tamassa Resort

30 June 2023

AESTIMA

Hospitality

Mauritius

54,674

48,827

VDE Housing Compound

30 June 2023

REC

Corporate accommodation

Mozambique

50,238

55,180

Imperial Distribution Centre

30 June 2023

Knight Frank

Light industrial

Kenya

20,210

21,620

Mara Viwandani

30 June 2023

Knight Frank

Light industrial

Kenya

2,330

2,792

Buffalo Mall

30 June 2023

Knight Frank

Retail

Kenya

11,036

-

Mall de Tete

30 June 2023

REC

Retail

Mozambique

13,675

13,804

Acacia Estate

30 June 2023

REC

Corporate accommodation

Mozambique

73,120

73,809

5th Avenue

30 June 2023

Knight Frank

Office

Ghana

16,066

16,010

Capital Place

30 June 2023

Knight Frank

Office

Ghana

20,470

19,320

Mukuba Mall

30 June 2023

Knight Frank

Retail

Zambia

60,040

56,933

Orbit Complex

30 June 2023

Knight Frank

Light industrial

Kenya

39,470

38,926

Tatu Warehouse – TIP1

30 June 2023

Knight Frank

Light industrial

Kenya

6,670

6,666

Club Med Cap Skirring Resort

30 June 2023

Knight Frank

Hospitality

Senegal

25,318

20,722

Total valuation of investment properties directly held by the Group

 

628,777

604,474

Deposits paid on Imperial Distribution Centre Phase 2

 

 

 

 

2,376

2,259

Deposits paid on Capital Place

 

 

 

 

3,550

3,550

Deposits paid on Gateway Real Estate Africa Ltd

 

 

 

 

-

2,500

Total deposits paid on investment properties

 

5,926

8,309

Total carrying value of investment properties including deposits paid

 

634,703

612,783

 

 

 

 

 

 

 

Investment properties held within associates and joint ventures – Group share

 

 

Buffalo Mall – Buffalo Mall Naivasha Limited (50%)

30 June 2023

Knight Frank

Retail

Kenya

-

6,116

Kafubu Mall  Kafubu Mall Limited (50%)

30 June 2023

Knight Frank

Retail

Zambia

12,865

11,965

CADS II Building  CADS Developers Limited (50%)

30 June 2023

Knight Frank

Office

Ghana

12,300

15,100

Cosmopolitan Shopping Centre  Cosmopolitan Shopping Centre Limited (50%)

30 June 2023

Knight Frank

Retail

Zambia

27,570

27,199

Canonniers, Mauricia and Victoria Resorts and Spas – Beachcomber Hospitality (0.00%) (30 June 2022 -44.42%)

-

-

Hospitality

Mauritius

-

95,055

Letlole La Rona Limited (0.00%) (30 June 2022 - 25.1%) – 19 Investment properties

-

-

Light industrial

Botswana

-

14,662

Letlole La Rona Limited (0.00%) (30 June 2022 - 25.1%) – 1 Investment property

-

-

Hospitality

Botswana

-

155

Letlole La Rona Limited (0.00%) (30 June 2022 - 25.1%) – 2 Investment properties

-

-

Retail

Botswana

-

4,160

Letlole La Rona Limited (0.00%) (30 June 2022 - 25.1%) – 1 Investment property

-

-

Office

Botswana

-

1,003

Letlole La Rona Limited (0.00%) (30 June 2022 - 25.1%) – 1 Investment property

-

-

Corporate accommodation

Botswana

-

966

Gateway Real Estate Africa Ltd (51.48%) (30 June 2022 - 26.29%) consisting of:

-

 

 

 

 

 

- DH4 Bamako

30 June 2023

Directors’ valuation

Corporate accommodation

Mali

8,038

5,733

- African Data Centres Phase 1

30 June 2023

Knight Frank

Data Centre

Nigeria SEZ

14,388

6,839

- Falcon Curepipe Clinic

30 June 2023

AESTIMA

Medical

Mauritius

12,179

3,076

- Coromondal Hospital

30 June 2023

Directors’ valuation

Medical

Mauritius

352

-

- The Precinct

30 June 2023

AESTIMA

Office

Mauritius

17,039

4,390

- Adumuah Place

30 June 2023

Directors’ valuation

Office

Ghana

1,539

873

- Eneo Tatu City - CCI

30 June 2023

Directors’ valuation

Office

Kenya

8,969

-

- Metroplex Shopping Centre

30 June 2023

Directors’ valuation

Retail

Uganda

10,865

6,478

Total of investment properties acquired through associates and joint ventures

126,104

203,770

 

 

 

 

 

 

 

Total portfolio

 

 

 

 

760,807

816,553

Valuation policy and methodology for investment properties held by the Group, associates, and joint ventures

Investment properties are valued at each reporting date by independent professional reputable valuation experts who have sufficient expertise in the jurisdictions where the properties are located. All valuations that are performed in the functional currency of a group entity that is not United States Dollars are converted to United States Dollars at the effective closing rate of exchange. All valuations have been undertaken by the Royal Institute of Chartered Surveyors' ("RICS's"), accredited and registered valuers, in accordance with the version of the RICS Valuation Standards that were in effect at the relevant valuation date and are further compliant with International Valuation Standards. Market values presented by the Group have also been confirmed by the respective valuers to be fair value in terms of IFRS.

In respect of the majority of the Mozambican investment properties, independent valuations were performed at 30 June 2023 by REC Chartered Surveyors (2022: REC Chartered Surveyors) using the discounted cash flow method (2022: discounted cash flow method). AESTIMA has been utilised in FY23 to comply with the financiers list of approved valuers.

In respect of the Mauritian investment properties (including Mauritian investment properties held by associates), independent valuations were performed at 30 June 2023 by AESTIMA Ltd (2022: Knight Frank Chartered Surveyors) using the discounted cash flow method (2022: discounted cash flow method).

The remainder of the portfolio including investment properties held by associates was independently valued at 30 June 2023 by Knight Frank Chartered Surveyors (2022: Knight Frank Chartered Surveyors), using the discounted cash flow method with the exception of freehold land which is valued by comparable method.

The discounted cash flow method is based on estimated rental values with consideration given to the future earnings potential and applying an appropriate capitalisation rate and/or discount rate to the property and country. The capitalisation rates (equivalent yield) applied to the Group’s valuations of investment properties at 30 June 2023 ranged between 7.25% and 10.00%. The discount rates applied to the Group valuations that were performed at 30 June 2023 using the discounted cash flow method ranged between 9.25% and 12.00%.

In the current year the valuations include the right of use of land, lease incentives and certain furniture and fittings.

There have been no material changes to the information used and assumptions applied by the registered valuer.

The fair value adjustments on investment property are included in the income statement.

The Directors consider that the deposit payments and capital expenditure which are carried at cost approximate their fair value at the relevant reporting date.

3. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

 

 

 

Audited as at

30 June 2023

Audited as at

30 June 2022

 

 

 

US$’000

US$’000

The following entities have been accounted for using the equity method:

Name of joint venture

Country of incorporation and operation

% held

 

 

Kafubu Mall Limited1

Zambia

50.00%

12,531

11,761

Cosmopolitan Shopping Centre Limited1

Zambia

50.00%

27,495

27,173

CADS Developers Limited1

Ghana

50.00%

4,482

6,974

Africa Property Development Managers Ltd2

Mauritius

78.95%

29,073

14,247

Gateway Real Estate Africa Ltd3

Mauritius

51.48%

123,513

-

Carrying value of joint ventures

 

 

197,094

60,155

 

 

 

 

 

Name of associate

Country of incorporation and operation

% held

 

 

Letlole La Rona Limited4

Botswana

0.00%

-

17,353

Buffalo Mall Naivasha Limited5

Kenya

0.00%

-

3,753

Gateway Real Estate Africa Ltd3

Mauritius

51.48%

-

55,866

Beachcomber Hospitality Investments Limited4

Mauritius

0.00%

-

69,870

Carrying value of associates

 

 

-

146,842

 

 

 

 

 

Joint ventures

 

 

197,094

60,155

Associates

 

 

-

146,842

Total carrying value of associates and joint ventures

 

 

197,094

206,997

 

1

The percentage of ownership interest for 2023 did not change.

2

The Group interest has increased from 77.95% to 78.95% following an additional acquisition made during the year..

3

The Group interest has increased from 26.29% to 51.48% following acquisition made during the year. The status of the investment in light of these acquisitions changed from an investment in associate to an investment in joint venture.

4

The associate status changed to an investment in subsidiary following the acquisition of the remaining share capital that the Group did not own previously. Figures are included in the associate note for comparative purposes. The Group previously owned 50% of Buffalo Mall Naivasha Limited.

5

The Group has disposed of its entire interests in the associates during the current financial year.

All investment in associates are private entities and do not have quoted prices available with the exception of Letlole La Rona Limited who is a listed entity on the Botswana Stock Exchange, but which has been disposed during the year.

Set out below is the summarised financial information of each of the Group’s associates together with a reconciliation of the financial information to the carrying amount of the Group’s interests in each associate. Where an interest in an associate has been acquired in a reporting period the results are shown for the period from the date of such an acquisition.

Each of the acquisitions referred to below have given the Group access to high quality African real estate in line with the Group’s strategy.

Where associates and joint ventures have non-coterminous financial reporting dates, the Group uses management accounts to incorporate their results into the consolidated financial statements.

Reconciliation to carrying value in associates and joint ventures

 

Letlole La Rona Limited

Kafubu Mall Limited

Beachcomber Hospitality Investments Limited

Africa Property Development Managers Ltd

Gateway Real Estate Africa Ltd

CADS Developers Limited

Cosmopolitan Shopping Centre Limited

Buffalo Mall Naivasha Limited

Total

 

US$’000

US$’000

US$’000

US$’000

US$’000

US$’000

US$’000

US$’000

US$’000

Opening Balance 1 July 2022

17,353

11,761

69,870

14,247

55,866

6,974

27,173

3,753

206,997

(Sold)/Acquired during the period

(17,105)

-

(51,298)

248

64,631

-

-

-

(3,524)

Profit / (losses) from associates and joint ventures

1,263

1,832

2,611

14,578

(5,321)

(1,999)

2,178

(842)

14,300

- Revenue

1,588

1,085

3,890

-

1,717

1,321

2,400

281

12,282

- Property operating expenses and construction costs

(161)

(186)

-

-

(271)

(34)

(389)

(129)

(1,170)

- Admin expenses and recoveries

(60)

(19)

(25)

(4,358)

696

(9)

(16)

(4)

(3,795)

- Other income

-

-

-

19,3851

-

-

-

-

19,385

- Net impairment charge on financial assets

28

-

-

-

(2,218)

-

-

(18)

(2,208)

- Unrealised foreign exchange gains/(losses)

110

-

(264)

(8)

(1,430)

10

(5)

(53)

(1,640)

- Fair value adjustment on other investments

 

 

 

 

(738)

-

-

-

(738)

- Impairments

-

-

-

-

(71)

-

-

-

(71)

- Gain on bargain purchase from acquisition of additional equity interest

-

-

-

77

-

-

-

-

77

- Transaction costs

-

-

-

2

1

-

-

-

3

- Loss on extinguishment of loans

-

-

-

-

-

(25)

-

-

(25)

- Share based payment expense

-

-

-

-

(7,474)

-

-

-

(7,474)

- Interest income/ (costs)

235

1

-

 

3,020

-

2

-

3,258

- Finance charges

(429)

(5)

(848)

(71)

(1,276)

(728)

-

(296)

(3,653)

- Fair value movement on investment property

150

1,034

(1,496)

-

2,325

(2,704)

309

(623)

(1,005)

-Fair value adjustment on other financial asset

-

-

1,948

-

-

-

-

-

1,948

- Current tax

(198)

(78)

(263)

(485)

(357)

-

(123)

-

(1,504)

- Deferred tax

 

 

(331)

36

1,141

170

-

-

1,016

- Other movement in profit or loss

-

-

-

-

(386)

-

-

-

(386)

Dividends and interest paid to Group

(105)

-

(21,898)

-

-

(423)

-

-

(22,426)

Other equity movement

-

-

-

-

7,474

-

-

-

7,474

Repayment of proportionate shareholders loan

-

(758)

-

-

-

(70)

(1,856)

-

(2,684)

Consolidation elimination

-

-

-

-

(89)

-

-

-

(89)

Foreign currency translation differences

(1,406)

(304)

715

-

952

-

-

-

(43)

Associate step up to subsidiary

-

-

-

-

-

-

-

(2,911)

(2,911)

Carrying value of associates and joint ventures

-

12,531

-

29,073

123,513

4,482

27,495

-

197,094

 

1

Comprised of a management incentive plan income of US$ 16.6 million, recorded at fair value, representing a 10% free-carry in GREA vested during the year, in addition to US$ 2.7 million in Asset and Development Management fees.

Investments in the year ended 30 June 2023

Additional equity interest acquired in Gateway Real Estate Africa Limited

The Group has continued its announced plan to acquire a controlling stake in Gateway Real Estate Africa Ltd (“GREA”) during this financial year. In total, the Group has acquired an additional 25.19% in GREA, and the shareholding of the Group has increased from 26.29% to 51.48%. The acquisition has been performed into tranches with more details included in the table below.

Following the series of transactions, the Group obtained joint control of GREA and continues to account for GREA using the equity method. The increase of the investment in GREA has been split notionally between goodwill and the additional interest in the fair value of the net identifiable assets of the associate acquired. The notional goodwill arising on the acquisition of the additional 25.19% in GREA amounted to US$ 11.88 million. The notional goodwill element has been included in the carrying amount of the investment in joint venture. The total notional goodwill element embedded in the carrying amount of the joint venture as of 30 June 2023 is US$14.17 million which is made up of US$2.29 million goodwill on acquisition of the additional 6.31% in GREA in the financial year 2022 and US$11.88 million arising on the acquisition of the 25.19% in GREA during the financial year 2023.

The table below includes the consideration paid by the Group (Both in own equity shares and cash), fair value of the net identifiable assets acquired, and the notional goodwill recorded by the Group.

 

Note

Tranche 1

Tranche 2

Total

 

 

US$’000

US$’000

US$’000

Fair value of consideration paid in cash

 

19,440

38,852

58,292

Fair value of own equity instruments transferred

2

-

5,971

5,971

Transaction costs

 

-

368

368

Less: Group share of the fair value of net identifiable assets acquired

 

(17,683)

(35,060)

(52,743)

Notional goodwill

 

1,757

10,131

11,888

 

 

 

 

 

Additional equity interest acquired in GREA by Group

1

8.72%

16.47%

25.19%

 

1.

The 8.72% additional shareholding in GREA was acquired from Gateway Africa Real Estate Limited (“GWP”).

The 16.47% additional shareholding in GREA was acquired from the following entities:

 

13.62% shareholding has been acquired from GWP.

 

2.85% shareholder has been acquired from Prudential Impact Investments Private Equity LLC (“Prudential”).

2.

For the GREA shares acquired from Prudential representing a 2.85% shareholding, the Company entered into an agreement with one of its shareholders, Long Island Property Investments ("LIPI") during the year, to facilitate the transfer of 15.7 million Grit shares to Prudential on behalf of the Company. LIPI had previously subscribed to the Company's shares during the December 2021 capital raise but had not fully met the payment obligations outlined within the Promissory Note.

In the prior financial statements, the Group had recognized an amount receivable from LIPI, which was presented as part of the listing receivables within trade and other receivables. The Group enforced its legal rights under the Promissory Note and via a tri-partite agreement between the parties (the Company, LIPI, and Prudential). LIPI agreed to transfer 15.7 million Grit shares to Prudential when the share price was trading at US$0.38 per share, equivalent to a total value of US$5.97 million.

The actual transfer of the 15.7 million Grit shares to Prudential by LIPI and the acquisition of the 2.85% stake in GREA from Prudential by the Company were contingent upon obtaining approval from the Prime Minister's Office (PMO). As of 30 June, 2023, such approval had not been granted. However, it is important to note that all legally binding agreements were fully executed and signed by the Company, LIPI, and Prudential before the end of the financial year. As a result, none of the parties could lawfully retract from the agreed shares transfer as of 30 June 2023, without being in breach of their contractual obligations.

This position is supported by a legal opinion obtained from the Company's legal counsel. Therefore, considering that all the necessary documents to legally execute the transactions were signed before June 30, 2023, and given evidence from previously submitted applications to the PMO for similar transactions which were approved, the Group has determined that it is appropriate to account for the 2.85% increase in shareholding in GREA in the current financial year.

The Group has also determined that the appropriate recording of the transaction would not be as per the legal form of the transaction where LIPI directly transferred Grit shares to Prudential. Therefore, the transaction has been recorded in substance as Grit having effectively re-acquired and transferred its own equity instruments to Prudential for the acquisition of the 2.85% GREA shareholding. The difference between the fair value of the Grit shares transferred and the sum initially recorded in and subsequently removed from the treasury reserve has been accounted for in equity, resulting in a reduction of retained earnings.

The table below summarises the impact of this transaction on Group equity.

 

US$’000

Number of GRIT shares transferred to acquire an additional 2.85% in GREA

15,714

Price per share in US$

0.38

Fair value of GRIT shares

5,971

Less: GRIT shares re-acquired and transferred from treasury reserve

(6,855)

Difference recorded in equity (retained earnings)

(884)

Reversal of expected credit loss on the LIPI promissory notes (recorded in Profit or Loss)

2,700

Net impact of the transaction on the Group equity

1,816

During the year, the Group incurred transaction costs amounting to US$ 2.1 million, which were associated with fund-related commitments that the Group had towards GREA. The transaction costs incurred arose as a consequence of temporal misalignments between the capital calls issued by GREA and the timing of fund transfers from Grit to GREA.

Additional equity interest acquired in Africa Property Development Managers Ltd

An additional equity interest of 1% has been acquired by the Group in Africa Property Development Managers Ltd ("ADPM") in the year. The equity stake of the Group has increased from 77.95% to 78.95%. A cash consideration of US$ 0.25 million has been paid for the additional 1%.

 

US$’000

Fair value of consideration paid in cash

248

Less: Group share of the fair value of net identifiable assets acquired

(325)

Gain on acquisition of additional interest

(77)

The excess of the Group's share of the net identifiable assets over the cost the additional investment has been included as income in the determination of the Group's share of profit during the period.

Additional equity interest acquired in Buffalo Mall Navaisha Limited

During the year, the Group has acquired an additional equity interest of 50% in Buffalo Mall Navaisha Limited ('Buffalo Mall'). The Group now considers Buffalo Mall to be a subsidiary. The additional 50% acquisition has been finalized on 30th June 2023. Prior to 30 June 2023, Buffalo Mall was treated as an associate and therefore has been equity accounted. On the 30th of June 2023, the investment status has changed from associate to subsidiary and therefore the Group consolidated Buffalo Mall in its consolidated financial statements.

Disposal of equity interest in Letlole La Rona Limited

During the year, Grit Services Limited a wholly-owned subsidiary of the Group has disposed of its entire equity interests of 25.10% in Letlole La Rona Limited on the Botswana Stock Exchange. The disposal of shares has been completed in tranches. The number of shares disposed of and the trading price at the different disposal dates were as follows:

Number of shares disposed

Trading price per share

Percentage interest

 

BWP

%

19,000,000

3.48

6.79%

19,768,068

3.51

7.06%

12,600,000

3.16

4.50%

18,911,932

2.50

6.75%

70,280,000

 

25.10%

All of the disposal proceeds have been received in cash as at year-end. The impact of the disposal on profit or loss of the Group is summarised below:

 

US$’000

Fair value of consideration received

16,853

Less: Carrying amount of Investment in associate to be disposed

(17,105)

Loss on disposal of interest in associate

(252)

Reclassification of cumulative foreign currency translation reserve to profit or loss

(3,291)

Total loss on disposal of investment in associate

(3,543)

 

Disposal of Leisure Property Northern (Mauritius) Limited

The Group has disposed of its whole equity interests in Leisure Property Northern (Mauritius) Limited ("LPNL"), the legal beneficial owner of Beachcomber Hospitality Investments Ltd ("BHI") and a wholly owned subsidiary of the Group during the year. BHI owns three hotels in Mauritius which are the Cannoniers, Mauricia and Victoria Hotels. At the beginning of this financial year, Grit via LPNL owns 44.42% of BHI. The following transactions have occurred during the year which resulted in the complete disposal of LPNL and BHI during the year.

In November 2022, BHI has declared a dividend amounting to €32.6million. The dividends declared were scrip dividend where the shareholders had the option to elect to receive the dividend in cash or additional shares in BHI in proportion to their current shareholding. The Group has elected for a cash payout whereas New Mauritius Hotel (“NMH”), the other shareholder of BHI has elected to convert the dividend payout into additional BHI shares. Following the increase in shareholding of NMH in BHI, the Group interests in the associate has decreased from 44.42% to 27.01%.

In May 2023, the Group has disposed of its wholly owned subsidiary LPNL (Which held 27.01% of BHI at the time of disposal). Following the disposal of LPNL and the de-consolidation of LPNL in Grit's book, LPNL has merged with BHI so that BHI is the only surviving legal entity that will remain in operation.

Following the disposal of LPNL the option that New Mauritius Hotels held to acquire all of the equity held by LPNL in BHI expired and the call option liability that was previously recorded in the records of the Group was reversed.

 

The net impact of the disposal of the LPNL and BHI on the results of the Group during the year is summarised as follows

US$’000

Assets disposed

 

Investments in associates

51,298

Cash and cash equivalents

1

Total assets disposed

51,299

 

 

Liabilities disposed

 

Interest-bearing borrowings

(19,404)

Trade and other payables

(28)

Total liabilities disposed

(19,432)

 

 

Net assets disposed

31,867

Consideration received

28,880

Loss on sale of subsidiary

(2,987)

Reclassification of cumulated other comprehensive income movement from foreign currency translation reserve to profit or loss

(75)

Total loss on sale of interest in subsidiary

(3,062)

4. TRADE AND OTHER RECEIVABLES

 

Audited as at

30 June 2023

Audited as at

30 June 2022

 

US$'000

US$'000

Trade receivables

12,733

10,298

Total allowance for credit losses and provisions

(5,682)

(4,782)

IFRS 9 – Impairment on financial assets (ECL)

(1,496)

(1,965)

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

(4,186)

(2,817)

Trade receivables - net

7,051

5,516

Accrued income

2,603

1,934

Deposits paid

77

57

VAT recoverable

10,293

12,186

Purchase price adjustment account

961

963

Deferred expenses and prepayments

3,695

1,781

Listing receivables

-

9,900

Deferred rental

-

853

Rental guarantee receivable

52

640

Dividends receivable

-

506

Sundry debtors

764

798

Cash balance held in escrow account

-

4,548

Other receivables

18,445

34,166

IFRS 9 – Impairment on other financial assets (ECL)

(3,470)

(6,012)

Other receivables - net

14,975

28,154

Trade and other receivables at the end of the period

22,026

33,670

 

 

 

Classification of trade and other receivables:

 

 

Non-current assets

3,448

4,615

Current assets

18,578

29,055

Trade and other receivables at the end of the period

22,026

33,670

5. OTHER LOANS RECEIVABLE

 

Audited as at

30 June 2023

Audited as at

30 June 2022

 

US$'000

US$'000

Ndola Investments Limited1

-

5,130

Kitwe Copperbelt Limited1

-

5,640

Syngenta Limited1

-

19,133

African Property Investments Limited1

21,034

-

Healthcare assets

-

231

Drift (Mauritius) Limited2

8,637

8,211

Drift (Mauritius) Limited3

2

2,071

Pangea 2 Limited

6

6

IFRS 9 – Impairment on financial assets (ECL)

(8,674)

(2,514)

Other loans receivable at period end

21,005

37,908

 

 

 

Classification of other loans receivable:

 

 

Non-current assets

21,005

-

Current assets

-

37,908

Other loans receivable at period end

21,005

37,908

 

1

In April 2017 Bank of China provided the Group with a term loan credit facility of $77.0 million for 5 years. The Group has now re-financed this borrowing facility through the loan syndication with Standard Bank of South Africa. At inception of the facility, the Group has advanced loans amounting in total up to 50% of the $77.0 million facility to the other investors in the Zambian investments namely to Ndola Investments Limited ("Ndola"), Kitwe Copperbelt Limited ("Kitwe") and Syngenta Limited ("Syngenta"). Each of these loans at inception had a 5-year term. During the year, the Group has entered in an agreement with African Property Investments Limited ("API") who is the parent company of Ndola, Kitwe, and Syngenta. Ndola, Kitwe, and Syngenta have ceded and assign their rights and obligations in respect of the initial facility to API. As from the 20th of December 2022, the Group has a loan receivable from API of US$21 million. The term of the loan is 4.5 years as from the 20th of December 2022. Interest is charged at a fix margin of 5.80% per annum plus a compounded daily SOFR rate.

2

Project pre-funding 1 - Maputo Housing Project - Loan bears interest at 3-month SOFR plus 6.50%, repayable within 24 months or such other time as agreed in writing between the parties. This loan has been fully provided for at 30 June 2023.

3

Project pre-funding 2 - Tete Housing Project - Loan bears interest at 3-month SOFR plus 6.50% and was repayable within 24 months or such other time as agreed in writing between the parties.

In the opinion of the directors, the carrying values of the above loan’s receivable approximate their fair values at each reporting date.

6. PREFERENCE SHARE CAPITAL

 

Audited as at

30 June 2023

Audited as at

30 June 2022

 

US$'000

US$'000

Opening balance

29,558

25,481

Preference share dividend accrued

2,038

4,077

Preference share capital at period end

31,596

29,558

During the financial year 2021, the group issued 25,481,240 class B preference shares each at a par value of US$1 through DIF 1 Co Limited, a wholly owned indirect subsidiary of the group to Gateway Real Estate Africa Limited, an associate of the group. The class B shares shall not carry any voting rights. The class B preference shares are entitled to a dividend at a fixed rate of 8% per annum. However, the terms of the instrument are such that the group does not have a contractual obligation to settle the preferred dividend unless shareholder loan capital, interest or ordinary shares dividends are paid to the holding company of DIF1 Co Limited that is Grit Services Limited. The preference dividends however if unpaid are cumulative until such point in time that they are settled. The preference shares are also redeemable at the option of DIF1 Co Limited only. The preference shares have been classified as equity instruments in the group consolidated financial statements as the group does not have a contractual obligation to deliver cash to settle the instruments both in terms of the principal and the preferred dividend portion.  As of 30 June 2023, the cumulative preferred dividend accrued on the preference shares amounted to US$6.11million. Neither the principal nor the preferred dividend have been paid as of 30 June 2023.

7. PERPETUAL PREFERENCE NOTES

 

Audited as at

30 June 2023

Audited as at

30 June 2022

 

US$'000

US$'000

Opening balance

25,741

-

Issue of perpetual preference note classified as equity

-

26,775

Preferred dividend accrued

3,529

1,837

Preferred dividend paid

(2,443)

(1,265)

Less: Incremental costs of issuing the perpetual preference note

-

(1,606)

Perpetual preference note balance at period end

26,827

25,741

The perpetual preference note carries a preferred dividend at a rate of 9% which is payable half yearly and 4% is accrued to the note.

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 an 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 redeem 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.

On recognition of the perpetual preference note, the Group has classified eighty five percent of the instrument that is US$26.8million as equity because for this portion of the instrument the Group at all times will have an unconditional right to avoid delivery of cash to the noteholders. The remaining fifteen percent of the instrument that is US$4.7million 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 note 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 deduction into equity i.e.) reduction of retained earnings.

The incremental costs directly attributable to issuing the equity portion of the note has been recorded as a deduction in equity i.e.) in the same equity line where the equity portion of the instrument has been recorded so that effectively the equity portion of the instrument is recorded net of transaction costs. There were no transaction costs recorded during the year relating to this instrument (30 June 2022: US$1.6million).

8. INTEREST-BEARING BORROWINGS

 

Audited as at

30 June 2023

Audited as at

30 June 2022

 

US$'000

US$'000

Non-current liabilities

318,453

242,091

Current liabilities

78,282

182,975

Total as at 30 June

396,735

425,066

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

 

 

United States Dollars

294,114

319,687

Euros

103,132

104,357

Mauritian Rupees

1,025

1,369

 

398,271

425,413

Interest accrued

7,725

4,927

Unamortised loan issue costs

(9,261)

(5,274)

Total as at 30 June

396,735

425,066

Movement for the year

 

 

Balance at the beginning of the year

425,066

410,588

Proceeds of interest bearing-borrowings

324,459

58,513

Loan reduced through disposal of subsidiary

(19,404)

(6,624)

Loan acquired through asset acquisition

4,369

6,011

Loan issue costs incurred

(7,355)

(4,386)

Amortisation of loan issue costs

3,368

2,765

Foreign currency translation differences

3,561

(14,836)

Interest accrued

2,798

751

Debt settled during the year

(340,127)

(27,716)

Total as at 30 June

396,735

425,066

Analysis of facilities and loans in issue

 

 

 

Audited as at

30 June 2023

Audited as at

30 June 2022

Lender

Borrower

Initial facility

US$'000

US$'000

Standard Bank South Africa

Commotor Limitada

US$140.0m

140,000

140,000

Standard Bank South Africa

Zambia Property Holdings Limited

US$70.4m

64,400

-

Standard Bank South Africa

Grit Services Limited

€33.0m

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

-

Standard Bank South Africa

Casamance Holdings Limited

€6.5m

7,198

-

Standard Bank South Africa

GRIT Accra Limited

US$6.4m

8,400

-

Standard Bank South Africa

Casamance Holdings Limited

€7.0m

7,618

-

Standard Bank South Africa

Zambia Property Holdings Limited

US$16.4m

-

16,405

Standard Bank South Africa

Grit Services Limited

RCF - €26.5m

-

27,091

Total Standard Bank Group

 

 

269,147

183,496

Bank of China

Zambian Property Holdings Limited

US$77.0m

-

76,405

Total Bank of China

 

 

-

76,405

State Bank of Mauritius

Leisure Property Northern (Mauritius) Limited

€9.0m

-

9,467

State Bank of Mauritius

Leisure Property Northern (Mauritius) Limited

€3.2m

-

3,366

State Bank of Mauritius

Mara Delta (Mauritius) Properties Limited

€22.3m

24,336

23,457

State Bank of Mauritius

Grit Real Estate Income Group Limited

Equity Bridge US$20.0m

10,000

20,000

State Bank of Mauritius

Mara Delta Properties Mauritius Limited

RCF MUR 72m

1,025

1,369

Total State Bank of Mauritius

 

 

35,361

57,659

Investec South Africa

Freedom Property Fund SARL

€36.0m

31,571

32,950

Investec South Africa

Freedom Property Fund SARL

US$15.7m

2,722

2,722

Investec Mauritius

Grit Real Estate Income Group Limited

US$0.5m

430

457

Total Investec Group

 

 

34,723

36,129

ABSA Bank Ghana Limited

Grit Accra Limited

US$9.0m

-

7,913

Total ABSA Group

 

 

-

7,913

Maubank Mauritius

Grit Real Estate Income Group Limited

€3.2m

-

1,837

Maubank Mauritius

Freedom Asset Management

€4.0m

711

1,508

Total Maubank

 

 

711

3,345

ABC Banking Corporation

Grit Services Limited

Equity bridge US$8.5m

-

2,440

ABC Banking Corporation

Casamance Holdings Limited

€6.4m

-

4,681

Total ABC Banking Corporation

 

 

-

7,121

Nedbank South Africa

Warehousely Limited

US$8.6m

8,635

8,635

Nedbank South Africa

Capital Place Limited

US$6.2m

-

6,200

Nedbank South Africa

Grit Real Estate Income Group Limited

US$7.0m

7,000

6,985

Total Nedbank South Africa

 

 

15,635

21,820

NCBA Bank Kenya

Grit Services Limited

US$6.5m

-

6,542

NCBA Bank Kenya

Grit Services Limited

US$4.1m

-

4,158

NCBA Bank Kenya

Grit Services Limited

US$6.5m

6,500

-

NCBA Bank Kenya

Grit Services Limited

US$11.0m

11,000

-

Total NCBA Bank Kenya

 

 

17,500

10,700

Ethos Mezzanine Partners GP Proprietary Limited

Grit Services Limited

US$2.4m

2,475

2,475

Blue Peak Holdings S.A.R.L

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$4.2m

4,369

-

Total Housing Finance Corporation

 

 

4,369

-

Total loans in issue

 

 

398,271

425,413

plus: interest accrued

 

 

7,725

4,927

less: unamortised loan issue costs

 

 

(9,261)

(5,274)

As at year end

 

 

396,735

425,066

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. Subsequent events

On the 26th of July 2023 the Group announced the conclusion of the final phase in the acquisition of a majority interest in GREA and APDM from Gateway Africa Real Estate Limited and Prudential Impact Investments Private Equity LLC, which resulted in the Group owning a direct interest of 51.48% in GREA and 78.95% in APDM. The transaction became unconditional, and the share transfer was lodged following receipt of the Mauritius Prime Minister’s Office consent, which was the final condition precedent. Although the share transfer took place after the end of the financial year, beneficial ownership of the 51.48% was attained on 30 June 2023 and as such the Group treated GREA as a joint venture in preparing its financial statements for the year ended 30 June 2023. The required final amendments to the Shareholders Agreement (which upon signature will result in control over GREA and therefore allow for the full consolidation of GREA and APDM - please refer to The Basis of Presentation 1.2 Critical Judgements and Estimates), are expected imminently. On the 3rd of October 2023 GREA issued shares to APDM in terms of the Managers Incentive Program and from this date the Group, through its shareholding in APDM, holds a combined direct and indirect interest of 54.22%.

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 two industrial land assets were transferred to the newly established entity. Bora is a wholly owned subsidiary of Grit and has therefore resulted in no change to existing beneficial interests. The International Finance Corporation, a division of the World Bank, has approved a US$30 million financing instrument issued by Bora Africa to fund future pipeline and impact led real estate acquisitions.

On 16 October 2023, interest rate hedges over US$100.0 million notional 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 two-year collar and cap instrument providing protection against rates above 4.75% on SOFR rates while allowing savings up to 3.00% as rate retract.

10. EARNINGS PER SHARE

 

Audited as at

30 June 2023

Audited as at

30 June 2022

 

US$'000

US$'000

Basic and diluted (losses) / earnings

(23,631)

10,443

 

 

 

Reconciliation of weighted average number of shares in issue (net of unvested treasury shares)

 

 

 

30 June 2023

Shares

30 June 2022

Shares

 

'000

'000

Ordinary shares in issue at start of year

495,093

331,236

Unvested treasury shares at start of year

(12,702)

(10,114)

Total shares issue at start of year

482,391

321,122

Effect of shares issued in the year

-

79,986

Effect of treasury shares acquired in the year 

(141)

(2,924)

Effect of treasury shares disposed in the year

-

879

Weighted average number of shares at end of year - basic

482,250

399,063

Dilutive effect of awards issued

-

276

Weighted average number of shares at end of year - diluted

482,250

399,339

Basic & diluted earnings per share (cents)

(4.90)

2.62

11. EPRA FINANCIAL METRICS - UNAUDITED

Non-IFRS measures

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 realisable value, adjusted profit before tax and funds from operations (collectively "Non-IFRS Financial Information").

EPRA Earnings

 

Unaudited
30 June 2023

Unaudited
30 June 2023

Unaudited
30 June 2022

Unaudited
30 June 2022

 

US$'000

Per Share (Diluted)
(Cents Per Share)

US$'000

Per Share (Diluted)
(Cents Per Share)

EPRA Earnings

(4,656)

(0.97)

6,332

1.59

Total Company Specific Adjustments

8,092

1.69

6,150

1.54

Adjusted EPRA Earnings

3,436

0.72

12,482

3.13

Total company specific distribution adjustments

17,149

3.57

7,662

1.95

Total distributable earnings before profits withheld

20,585

4.29

20,144

5.08

Distributable earnings withheld

(10,989)

(2.29)

(2,300)

(0.58)

Total distribution

9,596

2.00

17,844

4.50

 

 

 

 

 

EPRA NRV

349,656

72.80

381,312

79.4

EPRA NTA

335,918

69.94

 366,783

76.3

EPRA NDV

300,650

62.60

 336,301

70.0

 

 

 

Shares

Distribution shares

 

‘000

Weighted average shares in issue

 

495,093

Less: Weighted average treasury shares for the year

 

(15,381)

Add: Weighted average shares vested in long term incentive scheme

 

573

EPRA SHARES

 

480,285

Less Non-entitled shares

 

-

Less Vested shares in consolidated entities

 

(573)

DISTRIBUTION SHARES

 

479,712

 

 

 

Unaudited

30 June 2023

EPRA EARNINGS

Notes

US$'000

Basic loss attributable to the owners of the parent

 

(23,631)

Add Back:

 

 

Fair value adjustment on investment properties

 

4,108

Fair value adjustment on investment properties under income from associates

 

1,005

Fair value adjustment on other investments

 

(1)

Fair value adjustment on other financial assets and liabilities

 

(5,837)

Fair value adjustment on derivative financial instruments

 

3,085

Changes in fair value of financial instruments and associated close-out costs

 

3,735

Loss on sale of subsidiary

 

3,240

Loss of sale of associates

 

3,543

Impairment of loan

 

71

Goodwill written off

 

677

Deferred tax in relation to the above

 

1,785

Acquisition costs not capitalised

 

4,162

Non-controlling interest above

 

(598)

EPRA EARNINGS

 

(4,656)

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

 

(0.97)

Company specific adjustments

 

 

Unrealised foreign exchange gains or losses (non-cash)

1

3,881

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

2

(149)

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

3

67

Impairment of loan and other receivables

4

4,541

Profit on sale of property, plant, and equipment

5

888

Non-controlling interest included above

6

(295)

Deferred tax in relation to the above

7

(841)

Total Company specific adjustments

 

8,092

ADJUSTED EPRA EARNINGS

 

3,436

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

 

0.72

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 in order to provide a better reflection of underlying property performance. The add back excludes specific provisions against tenant accounts.

5

Corporate restructure costs

 

Corporate restructure costs are one off in nature related to corporate actions by the company and not underlying performance of the portfolio.

6

Non-Controlling interest

 

Any Non-Controlling interest related to the company specific adjustments.

7.

Other deferred tax (non-cash)

 

Any deferred tax directly related to the company specific adjustments.

12. COMPANY DISTRIBUTION CALCULATION - UNAUDITED

 

 

Unaudited

30 June 2023

 

Notes

US$'000

Adjusted EPRA Earnings

 

3,436

 

 

 

Company specific distribution adjustments:

 

 

VAT credits utilised on rentals

1

3,312

Listing and set up costs under administrative expenses

2

438

Depreciation and amortisation

3

1,364

Share based payments

4

7,828

Dividends (not consolidated out)

 

(385)

Right of use imputed leases

 

280

Amortisation of capital funded debt structure fees

 

4,708

Deferred tax in relation to the above

 

186

Non-controlling interest non distributable

 

(582)

Total Company Specific distribution adjustments

 

17,149

TOTAL DISTRIBUTABLE EARNINGS (BEFORE PROFITS WITHHELD)

 

20,585

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

 

4.29

FULL YEAR DIVIDEND PER SHARE (cents)

 

2.00

 

 

 

Reconciliation to amount payable

 

US$ cents per share

Total distributable earnings to Grit shareholders before profits withheld (cents)

 

4.29

Profits withheld (cents)

 

(2.29)

Interim dividends already paid (cents)

 

(2.00)

FINAL DIVIDEND PROPOSED (cents)

 

0.00

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 obtained 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.

13. EPRA FINANCIAL METRICS – UNAUDITED

Glossary

Measure

Rationale

EPRA EARNINGS

Earnings from operational activities.

A key measure of a company’s underlying operating results and an indication of the extent to which current dividend payments are supported by earnings.

EPRA NAV / NRV

Net Asset Value adjusted to include properties and other investment interests at fair value and to exclude certain items not expected to crystallise in a long-term investment property business model.

Adjusts IFRS NAV to provide stakeholders with the most relevant information on the fair value of the assets and liabilities within a true real estate investment company with a long-term investment strategy.

EPRA NET INITIAL YIELD (NIY)

Annualised rental income based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the market value of the property, increased with (estimated) purchasers’ costs.

A comparable measure for portfolio valuations. This measure should make it easier for investors to judge themselves, how the valuation of portfolio X compares with portfolio Y.

EPRA ‘TOPPED-UP’ NIY

This measure incorporates an adjustment to the EPRA NIY in respect of the expiration of rent-free periods (or other unexpired lease incentives such as discounted rent periods and step rents).

A comparable measure for portfolio valuations. This measure should make it easier for investors to judge themselves, how the valuation of portfolio X compares with portfolio Y.

EPRA VACANCY RATE

Estimated Market Rental Value (ERV) of vacant space divided by ERV of the whole portfolio.

A 'pure' (%) measure of investment property space that is vacant, based on ERV.

EPRA COST RATIOS

Administrative & operating costs (including & excluding costs of direct vacancy) divided by gross rental income.

A key measure to enable meaningful measurement of the changes in a company’s operating costs.

The EPRA NAV metrics are EPRA Net Reinstatement Value (NRV), EPRA Net Tangible Assets (NTA) and EPRA Net Disposal Value (NDV)

 

EPRA NRV

Unaudited

30 Jun 2023

EPRA NTA

Unaudited

30 Jun 2023

EPRA NDV

Unaudited

30 Jun 2023

 

US$'000

US$'000

US$'000

IFRS Equity attributable to shareholders

300,650

300,650

300,650

i) Hybrid instruments

 

 

 

Preference shares

 

 

 

Diluted NAV

300,650

300,650

300,650

Add

 

 

 

Revaluation of IP (if IAS 40 cost option is used)

 

 

 

Revaluation of IPUC (if IAS 40 cost option is used)

 

 

 

Revaluation of other non-current investments

 

 

 

Revaluation of tenant leases held as leases

 

 

 

Revaluation of trading properties

 

 

 

Diluted NAV at fair value

300,650

300,650

300,650

Exclude*:

 

 

 

Deferred tax in relation to fair value gains of Investment properties

48,217

44,311

-

Fair value of financial instruments

789

789

-

Goodwill as a result of deferred tax

-

-

-

Goodwill as per the IFRS balance sheet

-

(9,832)

-

Intangibles as per the IFRS balance sheet

 

 

 

Include*:

 

 

 

Fair value of fixed interest rate debt

 

 

 

Revaluation of intangibles to fair value

 

 

 

Real estate transfer tax

 

 

 

NAV

349,656

335,918

300,650

Fully diluted number of shares

480,285

480,285

480,285

NAV per share (cents per share)

72.80

69.94

62.60

 

Shares '000

Shares '000

Shares '000

Total shares in issue

495,093

495,093

495,093

Less: Treasury shares for the period

(15,381)

(15,381)

(15,381)

Add: Share awards and shares vested shares in long term incentive scheme

573

573

573

EPRA SHARES

480,285

480,285

480,285

EPRA Vacancy rate

EPRA Vacancy Rate

UNAUDITED

30 June 2023

UNAUDITED

30 June 2022

 

US$’000

US$’000

Estimated rental value of vacant space

A

324

236

Estimated rental value of the whole portfolio

B

5,048

5,070

EPRA Vacancy Rate

A/B

6.4%

4.7%

OTHER NOTES

The audited consolidated financial statements for the year ended 30 June 2023 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority, International Financial Reporting Standards ("IFRS"), the LSE and SEM Listing Rules, the Financial Pronouncements as issued by Financial Reporting Standards Council. The accounting policies are consistent with those of the previous annual financial statements with the exception of the change in accounting policy and the significant judgment disclosed in note 1.

The Group is required to publish financial results for the year ended 30 June 2023 in terms of Listing Rule 12.14 of the SEM and the LSE Listing Rules. The Directors are not aware of any matters or circumstances arising subsequent to the year ended 30 June 2023 that require any additional disclosure or adjustment to the financial statements. These audited consolidated financial statements were approved by the Board on 30 October 2023.

PricewaterhouseCoopers have issued their unqualified audit opinion on the Group's financial statements for the year ended 30 June 2023. Copies of the audited consolidated financial statements for the year ended 30 June 2023, 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: FR
TIDM: GR1T
LEI Code: 21380084LCGHJRS8CN05
Sequence No.: 281488
EQS News ID: 1760983

 
End of Announcement EQS News Service

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