Resilient warns of shrinking dividend

Resilient, the company at the centre of the biggest sell-off in listed property shares in more than two decades, has blamed a weak local economy for its shrinking dividends.

Resilient, the company at the centre of the biggest sell-off in listed property shares in more than two decades, has blamed a weak local economy for its shrinking dividends.

Resilient, which owns local shopping centres and has interests in listed real estate securities with offshore exposure, warned its dividend will shrink for the second consecutive financial year. “Economic conditions in SA remain challenging,” the company said.

Since listing in 2002, Resilient managed to grow its dividend annually, often to a degree well beyond its peers. But this run was broken with restated financial results for the year to June 2018, in which its dividend per share fell 12.8%.

This was because of the effects of removing the crossholding with Fortress and restructuring its BEE trusts.

Resilient’s distribution is forecast to be 530c-550c per share for the 2019 financial year, it said in releasing half-year results to December. The total dividend for the year to June 2018 was 565.44c per share.

Resilient and sister property funds Fortress, Nepi Rockcastle and Lighthouse Capital lost more than R100bn of market value in 2018.

Domestic sales grew 4.7% during the six-month reporting period, which was in line with growth for the comparable six months to December 2017.

It said 6.4% of its contracted rental income was exposed to the troubled retailer Edcon at the end of December 2018.

Ahmed Motara, a portfolio manager at Stanlib, said the results suggest that Resilient is in a healthy state and that a fall in its dividend payout had been expected given its restructuring.

“Operationally and from a balance sheet perspective, this is a company in good health. Resilient owns one of the better retail portfolios in SA. Its loanto-value is low at 25%, so it isn’t heavily indebted and its vacancies are low,” he said.