Arrowhead pointing at Rebosis to extract value

LISTED property fund Arrowhead, with a diverse portfolio valued at R5.6 billion, plans to continue to look for opportunities to extract value from some of its investments.

Chief financial officer Imraan Suleman said yesterday that this would particularly apply to Arrowhead’s 16.42 percent investment in listed Rebosis, which was currently valued at R800 million.Suleman said Arrowhead reduced its 10.6 percent shareholding in Dipula Income Fund to 8.6 percent by disposing of 1.8 million shares valued at R15.5m.

Arrowhead was initially planning to dispose of its entire stake in Dipula, but Suleman said it intended to retain the remaining stake in the medium term. He said there were various options to extract value from its shareholding in Rebosis.

He stressed Arrowhead was committed to extracting value from its investment and this would not be influenced by the speculation surrounding some companies in the sector.

Arrowhead reported a 15 percent decline in total dividends for the year to September to 74.10 cents from 87.52c in the previous year.

The fund said South African dividend growth in the sector came under significant pressure last year as the macroeconomic environment deteriorated, resulting in weakened income distributions from Arrowhead’s property portfolio and listed investments.

Arrowhead said Rebosis’s earnings were significantly below expectations and its recently released results did not include any guidance about forward earnings.

It said its dividend a share would be enhanced by about 7c a share to 65c if it retained the stake in Rebosis and Rebosis’ dividend a share for its financial year to August next year was about 51.7c per Rebosis B-share.

Suleman said vacancies in the property portfolio started the year at 12.1 percent but finished at 7.9 percent against a 13 percent forecast.

Arrowhead shares closed 5.76 percent higher on the JSE yesterday at R4.22.