- Omnia flooded SENS early in the morning with no fewer than three announcements. The easiest one was that Ralph Havenstein will be retiring as Chairperson, replaced by Tina Eboka as Chairperson-designate who has been on the board for over six years. Another short announcement gave investors what they wanted to hear: a meaty dividend! A final dividend of 275 cents and a special dividend of 525 cents have been declared. The total of 800 cents per share is over 10% of the current share price and will be paid on 1st August. The third announcement was the story behind the numbers, with the results for the year ended 31 March 2022. I wrote about it in detail in this feature article, including an important section about the dispute with SARS.
- As Real Estate Investment Trusts (REITs) go, Stor-Age is one of the most dependable. The self-storage asset class has been resilient during the pandemic, bringing some stability to an incredibly volatile set of opportunities in the market. With results released for the year ended March 2022, the fund has posted a solid set of numbers. Investors need to form a view on the interest rate exposures and the impact of inflation when assessing Stor-Age. I’ve written on the company in detail in this feature article.
- City Lodge Hotels has released a voluntary operational update and trading statement. The group achieved 47% occupancy in South Africa with all its local hotels finally being open. In March, that number increased to 58%. This was mainly driven by strong weekend and leisure occupancies, with increased business travel. Occupancies were down to 49% in April, negatively impacted by the weather. May increased to 52% in South Africa and 49% for the group, which was in line with pre-Covid occupancies in May 2019. In wonderful news for staff, salary reductions were suspended from May 2022, so there is some degree of normality returning. Looking beyond South Africa, the pending disposal of the East African operations is imminent and the long stop date has been extended to the end of June 2022. Those proceeds to be used to repay debt. City Lodge has had positive monthly cash flows since February 2022 and has access to R223 million of liquidity in short- and long-term facilities. The group is busy refinancing R600 million in debt to allow for facilities that expire in the next 13 months. City Lodge has guided an improvement of at least 75% in headline earnings per share (HEPS) for the year ended June 2022. As the prior period was a loss, this implies that the base expectation is to make another loss (albeit a much smaller one). The share price is down nearly 26% this year.
- MAS is a real estate company focused on Central and Eastern Europe (CEE). The company holds properties in Romania, Bulgaria and Poland and has a development pipeline with its joint venture partner Prime Kapital. MAS has released a trading update and pre-closing statement, which includes some really bullish commentary on Romania’s GDP growth and its immediate prospects. MAS highlights that its properties have triple-net leases that allow for full indexation to base rents, which means inflation can be passed on. The group also points out that most of its debt has fixed interest rates. The properties proposed to be acquired from the joint venture have debt that is fully hedged via interest rate caps for the next seven years. Footfall in May 2022 exceeded pre-Covid levels and sales per square metre are way ahead of pre-Covid levels, helped along by inflation. The share price is down 5.9% this year.
- Fortress REIT has issued a firm intention announcement regarding the exchange of Fortress A shares for new Fortress B shares through a scheme of arrangement. The proposal is designed to give Fortress A shares an 80% share of distributions and Fortress B shares the remaining 20%. The company believes that a simplified strategy is preferable in this market and that collapsing everything into a single share class significantly reduces the risk of loss of REIT status by not meeting distribution requirements. The announcement notes “divergent views” on a fair swap ratio among shareholders and there are some in the market who feel that the board is bullying them with the threat of loss of REIT status. An independent expert will need to be appointed to issue an opinion on this scheme. I don’t envy whoever will be appointed on this one. I also don’t envy the independent directors.
- Gemfields has announced a record ruby auction result based on the aggregate outcome of seven mini-auctions held in Bangkok in recent weeks. The rough rubies are from the Montepuez Ruby Mining (MRM) operation in Mozambique, which is 75% owned by Gemfields and 25% by a Mozambican partner. Importantly, the records tumbled for the total auction result and the per-carat revenue, so this is a volume and pricing story. The group does caution that 24% of the total weight offered in the auction was not sold. Revenue for the first half of the year is now $181 million (driven by this auction and two emerald auctions), which is almost double the previous record of $93 million in the first half of 2018. Gemfields has noted that second-half revenues are unlikely to match a “remarkable” first half of the year.
- Afine Investments, the REIT that invests in petrol stations, is buying properties in an entity that has a related party among its shareholders. For the deal to go ahead, an independent expert needed to opine that the terms are fair to shareholders of Afine. AcaciaCap Advisors was appointed to give this opinion and has determined that the deal is fair, so no shareholder approval is required for the transaction to go ahead.
- Orion Minerals has not yet finalised its capital raising transaction, so the voluntary suspension of trading in securities will remain in place until Wednesday. This is an Australian Securities Exchange (ASX) rule, as Orion’s primary listing is in the land down under.
- The mandatory offer by Glenrock to the shareholders of Universal Partners has now closed. Only holders of 1.12% of Universal Partners shares accepted the offer, which doesn’t surprise me given the offer price. Glenrock now holds 35.3% of the shares in issue.
- Equites Property Fund is hosting a site visit and presentation in the UK and has made the presentation relating to the site visit available on the website. It is full of useful information on the UK portfolio and you can download it at this link.
- A couple of directors of Dipula Income Fund have bought B ordinary shares in the company. The amounts are small though (just over R200k across both directors) so I’m not sure how much importance can be placed on this.
- There’s also been a fairly small acquisition of shares in Hammerson plc by the alternate director to Des de Beer. The total value is £21.4k which equates to around R420k.
- A director of Raubex has bought shares in the company to the value of R357k. There has been quite a bit of buying by directors recently, which is a strong signal.
- A director of EPP, which is now a subsidiary of Redefine, has bought shares in Redefine worth over R1 million.
