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2015 IN PERSPECTIVE
FINANCIAL DIRECTOR’S REPORT
continued
Investments in sub-Saharan Africa (excluding SA)
Distributable earnings from investments in sub-Saharan Africa
(excluding SA) increased by 20,8% to R42,4 million, in part due to
income from Manda Hill (Lusaka, Zambia – effective December 2013)
and West Hills Mall (Accra, Ghana – effective November 2014). Income
from our investments in sub-Saharan Africa (excluding SA) benefited
from exchange gains of R2,3 million.
Approved funds for investment in sub-Saharan Africa (excluding
SA) total R5 billion (includes amounts invested to date). Investment
opportunities in other sub-Saharan countries, including Nigeria and
Kenya, are being considered.
Net asset value
Net asset value (NAV) per share at 30 June 2015 increased by 17,1%
to R89,04 (2014: R76,02). This was due in part to an increase in the
independent valuation of the investment property portfolio.
Non-accrual for the final dividend (in accordance with IFRS and industry
best practice) added R2,80 to NAV per share. On a like-for-like basis
(excluding the effect of non-accrual of final dividend), growth in NAV
per share was 13,4%.
At 30 June 2015, the closing share price of R121,00 represented a
premium of 35,9% to NAV per share.
Borrowings
30 June
2015
Rm
30 June
2014
Rm
Bank debt
4 250
4 902
South Africa
2 327
3 509
USD (Rand equivalent)
2 193
1 393
Debt capital market (DCM)
2 172
2 297
Corporate bonds
1 800
1 600
Commercial paper
372
697
Cash and cash equivalents
(138)
(125)
Net borrowings
6 554
7 074
Loan to value (%)
22,9
26,6
Net borrowings reduced after repaying South African bank facilities
from the proceeds of non-core asset sales.
At 30 June 2015, interest rates were fixed for 94,5% (2014: 71,4%) of
borrowings, at a weighted average rate of 7,1% (2014: 7,5%), for an
average 5,2 years (2014: 4,2 years).
During the year, Hyprop extended a number of interest rate swaps at
only marginal additional cost, resulting in an average fixed rate maturity
profile of over five years.
The ratio of debt with fixed interest rates increased during the year, in
part due to debt repayments (without breaking any interest rate swaps),
and due to fixing the US Dollar (USD) debt incurred to restructure the
interest in Manda Hill, Zambia.
Investments in sub-Saharan Africa (excluding SA) are financed with USD
funding. An increase in the ratio of USD funding to total debt to 33,5%
(up from 19,7% at 30 June 2014) effectively reduces the overall cost of
funding.
Debt capital market funding at 30 June 2015 was 32% of total debt
(2014: 32%).
The loan-to-value ratio, at 22,9%, is below Hyprop’s ideal range of
30% to 40%. Higher loan-to-value levels depend largely on corporate
activity, particularly acquisitions. In the absence of significant
acquisitions, it is unlikely that the loan-to-value ratio will reach
these levels.
14
Hyprop Investments Limited
Integrated Report 2015