Delta to apply for lifting of trading suspension on publication of half-year results ended 31 August 2020

Posted On Tuesday, 01 June 2021 12:28 Published by
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Delta Property Fund, a specialist black-managed and substantially black-owned REIT with a significant sovereign underpin said that it will apply to the JSE for the reinstatement of trade in its shares on the main board of the exchange, following the publication of its half-year results for the six months ended 31 August 2020.

Sibongile_Masinga_Bongi

“The results for the six months ended 31 August 2020 mark a period of significant changes for Delta. These include the appointment of new members to the board of directors to drive a step-change in the Group’s performance, the appointment  of a new interim executive leadership team, as well as two separate independent forensic investigations into irregularities which resulted in the withdrawal and reissue of the financial statements for the year ended 29 February 2020,” commented interim CEO Bongi Masinga.

As the 2020 Financial Statements have a bearing on and are used as a comparative basis for the Company’s Interim results, Delta was not in a position to release the interim results within the three month period end. As a consequence of the withdrawal of the 2020 Financial Statements, the JSE suspended trading in the shares of Delta on 15 December 2020.

On Friday last week the Company issued a SENS announcement saying that due to the significant time and resources expended by Delta and its auditor, BDO on the re-issue of the Company’s audited financial statements for the year ended 28 February 2020 and the preparation of the Interim Results, it now expects to publish its 2021 Financial Statements by 30 June 2020.

“Our immediate objective of stabilising the Company and the senior team has been met, and the recruitment process for a permanent CEO is progressing well,” commented Ms Masinga.

Despite corporate governance challenges and considerable macro-economic headwinds during the reporting period, which included the hard economic lockdowns to curb the spread of the coronavirus, Delta’s portfolio proved defensive, supported by its sovereign underpin.

Collections for the review period averaged 80.8% with relatively minimal rental relief of R11 million granted to support smaller retail tenants.  Administrative expenses for the period increased by 15.0% mainly as a result of increased legal expenses and the consolidation of the Group’s asset manager, DPAM which resulted in the elimination of the asset management fee and concomitant replacement with the salary expenses as well as related accounting expenses.

Finance costs decreased significantly by 20.2% due to the reduction in the repo rate during the period. The weighted average all-in cost of funding reduced to 8.2% (2019: 10.0%) with the interest cover ratio of 1.89 times (2019: 1.73 times).

Loan to value (“LTV”), although high, decreased to 54.1% (Feb 2020: 55.7%), benefiting from cash generated by operations and repayment of debt facilities. The conclusion of disposals together with capital expenditure on the portfolio is envisaged further improve the LTV in the short to medium term, with our long-term strategy still targeting an LTV of below 40%.

Delta’s distributable income per share amounted to 16.3 cents for the six months ended 31 August 2020 (31 August 2019: 30.33 cents per share).

Following the solvency and liquidity test which takes into consideration the working capital cash flow forecast, incorporating the expected working capital requirements, capital expenditure requirements and contracted tenant installations relating to historic lease renewals, the Board resolved not to declare an interim distribution.

Last modified on Tuesday, 01 June 2021 12:36

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