Financial Results Presentation for the year ended 28 February 2019
Table of Contents 3 4 5 1 2 Welcome Spear Highlights Financial Active Asset & Capital & Introduction to Date FY 2019 Performance FY 2019 Management 9 7 6 8 Portfolio Subsequent Outlook Questions Overview Transactions Financial Results Presentation for the year ended 28 February 2019
Welcome & 1 Introduction 1 Financial Results Presentation for the year ended 28 February 2019
To be the leading Western Cape- focused REIT and to consistently Mission grow our distribution per share Statement ahead of infmation and within the top quartile of our peer group. 2 Financial Results Presentation for the year ended 28 February 2019
Spear 2 to Date 3 Financial Results Presentation for the year ended 28 February 2019
Spear to Date Asset value: R3.81 billion Asset value: Market cap: R1.98 billion R3.37 billion Asset value: Market cap: R3.13 billion R1.82 billion Market cap: Asset value: R1.58 billion R1.45 billion Market cap: Asset value: R942 million R1.4 billion Market cap: R800 million % Growth % Growth % Growth % Growth Asset value: Asset value: Asset value: Asset value: 3.6% 116% 7.6% 12.95% Market cap: Market cap: Market cap: Market cap: 15% 68% 14.5% 9.17% List on the JSE Period end Period end Interim period Period end 11/11/2016 28/02/2017 28/02/2018 31/08/2018 28/02/2019 4 Financial Results Presentation for the year ended 28 February 2019
Highlights 3 FY 2019 5 Financial Results Presentation for the year ended 28 February 2019
Highlights 2019 Financial Year - Portfolio Snapshot Assets 30 R9 465/m 2 21.62% R127 m R3.8 bn Average Asset Value Average Number of Asset Value property Growth property value properties valuation Letting 8.07% 402 652 m 2 98% 30 months R85 /m 2 /pm Average GLA Occupancy WALE Average rental in-force including rates escalations Capital 25.07% R82.5m R1.98 bn R152.8 m 188 m Market Cap Acquisition Capital raised Shares in issue Market Cap growth issues 6 Financial Results Presentation for the year ended 28 February 2019
Highlights 2019 Financial Year - Financial Performance Distribution 86.42 10.09% 41.73 cents 44.69 cents 21.59% cents FY2019 FY2019 Interim FY2019 Final Net Cost to Distribution distribution distribution Income Distribution growth per share Tangible net asset value (TNAV) 4.6% R11.67 R12.12 4.7% TNAV net TNAV net TNAV growth distribution TNAV distribution growth Debt 64.5% 25 months 9.01% 9.05% 39.58% Fixed debt Average debt Average cost Average fjxed LTV ratio expiry of debt cost of debt 7 Financial Results Presentation for the year ended 28 February 2019
Spear Total Return SEA vs SAPY Total return (TR) Annualised 150% 34% Spear (TR) 13.69% 140% -6% -2.79% SAPY (TR) 130% 120% 110% 100% 90% 80% 10-Nov-16 10-Aug-17 10-Aug-18 10-Feb-19 10-Dec-16 10-Jan-17 10-Feb-17 10-Mar-17 10-Apr-17 10-May-17 10-Jun-17 10-Jul-17 10-Sep-17 10-Oct-17 10-Nov-17 10-Dec-17 10-Jan-18 10-Feb-18 10-Mar-18 10-Apr-18 10-May-18 10-Jun-18 10-Jul-18 10-Sep-18 10-Oct-18 10-Nov-18 10-Dec-18 10-Jan-19 Assumptions: SEA Indexed Total Return Invested in 1 000 SEA shares at listing at R9.00 per share and reinvested all your SAPY Indexed Total Return dividends in SEA at the closing price on the payment date of each dividend. 8 Financial Results Presentation for the year ended 28 February 2019
Financial 4 Performance FY 2019 9 Financial Results Presentation for the year ended 28 February 2019
Summary Income Statement Consolidated and Group Audited Group Audited Feb-19 Feb-18 separate statement of R’000 R’000 comprehensive income Property revenue 426 122 304 055 Other income 8 607 12 540 for the year ended 28 February 2019 Total revenue 434 729 316 595 Property operating and management expenses (139 200) (87 422) Net property-related income 295 529 229 173 Administrative expenses (22 668) (17 530) Net property operating profjt 272 861 211 643 Fair value adjustment — Investment properties 111 702 252 535 Depreciation (2 943) (441) Annual listing fees (261) (314) Spear REIT Limited Share-based payment expense (6 456) (455) Profjt from operations 374 903 462 968 and its subsidiaries Net fjnance cost (100 111) (76 044) - Finance costs (109 202) (82 297) - Finance income 9 091 6 253 Profjt before taxation 274 792 386 924 Taxation (245) (695) Profjt for the year 274 547 386 229 Attributable to: Equity owners of the parent 270 389 383 186 Non-controlling interest 4 158 3 043 Total comprehensive income for the year 274 547 386 229 Distribution per share (cents) 86.42 78.50 Interest cover ratio (times) 2.65 2.56 10 Financial Results Presentation for the year ended 28 February 2019
Distribution Reconciliation Reconciliation between R’000 Earnings (profjt attributable to owners of the parent) earnings and distributable 270 389 Adjusted for: earnings Fair value adjustments to investment properties (111 702) Straight-lining of leases adjustment (7 812) for the year ended 28 February 2019 Equity-settled share-based payment reserve 6 456 Antecedent dividend 4 443 Total distribution 161 774 Interim distribution * (R'000) 77 358 Number of shares for the period 185 388 709 Interim distribution per share (cents) 41.73 Distributable Final distribution (R'000) 84 416 Reconciliation Number of shares for the period 188 888 709 Final distribution per share (cents) 44.69 YTD distribution cents total Cents Interim distribution 41.73 * Interim distribution was declared 18 October 2018 Final distribution 44.69 YTD distribution cents total 86.42 and paid 12 November 2018 11 Financial Results Presentation for the year ended 28 February 2019
Summary Balance Sheet Consolidated and Group Audited Group Audited Feb-19 Feb-18 separate statement R’000 R’000 of fjnancial position ASSETS Non-current assets 3 808 427 2 975 850 for the year ended 28 February 2019 Current assets 108 291 251 488 Total assets 3 916 718 3 227 338 EQUITY AND LIABILITIES Total attributable to owners 2 295 532 1 917 318 Non-controlling interest 54 155 54 155 Shareholders' interest 2 349 687 1 971 473 Non-current liabilities 1 335 853 1 053 434 Current liabilities 231 178 202 431 Spear REIT Limited Total liabilities 1 567 031 1 255 865 Total equity and liabilities 3 916 718 3 227 338 and its subsidiaries Number of ordinary shares in issue 188 888 709 165 190 689 Gearing ratio (%) 39.58 38.48 Tangible net asset value per share (Rands) 12.12 11.57 Tangible net asset value per share net of distribution (Rands) 11.67 11.16 12 Financial Results Presentation for the year ended 28 February 2019
Funding LTV Average Cost of Funding Funding Maturity 39.58% 9.01% 24 BPS 10% 12% FY2023 FY2020 R156 m R186 m R1.522 bn R1.522 bn 25-month average maturity Cost Cost 9% 9.05% 35.43% 64.57% 44% 34% 24 26 months months Variable Fixed FY2022 FY2021 R539 m R983 m R667 m R513 m 13 Financial Results Presentation for the year ended 28 February 2019
Active Asset 5 & Capital Management 14 Financial Results Presentation for the year ended 28 February 2019
Active Asset & Capital Management - Acquisitions & Disposals DISPOSED DISPOSED 142 Bree Street Tyger Manor R150 m R75 m 3% yield 8% yield ACquIRED DEBT SETTLED ACquIRED DEBT SETTLED R48 m R26 m No. 2 Estuaries Talana Close R98 m R52.8 m 9.22% yield 9.16% yield DISPOSED CAPITAL RAISED FY18 CAPITAL RAISED 5 non-core assets R118 m Cash R109 m R34 m reserves 8.6% yield ACquIRED ACquIRED ACquIRED ACquIRED No. 1 Waterhouse Island Business Park Blackheath Park Northgate Park Place R24 m R110.5 m R313 m R114.5 m 9.31% yield 10.43% yield 9.26% yield 12.2% yield (balance in debt funding) 15 Financial Results Presentation for the year ended 28 February 2019
Portfolio 6 Overview 16 Financial Results Presentation for the year ended 28 February 2019
Top 5 Properties by Value Total Value Total GLA Portfolio R1.92 bn 178 073 m 2 50.39% Mega Park, 2 Long Street, Sable Square, UES DoubleTree by Northgate Park, Bellville Cape Town Century City Hilton, Woodstock Brooklyn Value (R’000) Value (R’000) Value (R’000) Value (R’000) Value (R’000) 426 034 416 400 322 139 314 302 441 022 Sector Sector Sector Sector Sector Commercial Mixed Use Mixed Use Commercial Industrial GLA (m 2 ) GLA (m 2 ) GLA (m 2 ) GLA (m 2 ) GLA (m 2 ) 25 115 31 100 18 761 17 002 86 095 Total Value (%) Total Value (%) Total Value (%) Total Value (%) Total Value (%) 11.18% 10.93% 8.46% 8.25% 11.58% Valuation (R/m 2 ) Valuation (R/m 2 ) Valuation (R/m 2 ) Valuation (R/m 2 ) Valuation (R/m 2 ) 16 963 13 389 17 171 18 486 5 123 17 Financial Results Presentation for the year ended 28 February 2019
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