Exemplar raises dividend as it looks towards life after troubled Eskom

Rural and township mall investor Exemplar REITail raised its dividend by a fifth as it looks to reduce its reliance on municipal utilities and power from troubled Eskom.

“The Exemplar portfolio continues to strengthen despite the current market challenges,” CEO Jason McCormick said in a statement. “Our key focus areas remain the continued strengthening of our balance sheet, further reducing our reliance on municipal utilities and closing out a number of development and acquisition opportunities currently on the table,” he said.

The company, valued at R3.9bn on the JSE, has continued installing solar power to lower property operating costs, with almost a quarter of the power consumed in its portfolio sourced from rooftop photovoltaic (PV) systems.

Many businesses are investing in alternate power sources as SA’s energy crisis continues with no end in sight. The portfolio of the real estate investment trust (Reit), valued at R8.24bn, consists of 26 retail assets, including Mall of Thembisa, with a gross lettable area (GLA) of 407,942m², about the size of 57 soccer pitches. The company declared a final dividend of 72.4c per share for its year to end February to bring the full-year total to 141.1c, amounting to a payout of R492.1m.

Net asset value (NAV) per share rose 11.8% to R13.74. The overall vacancy rate stood at 3.35%. Gross profit, rental income and recoveries minus property operating costs improved by just more than a quarter to R692.5m.

Operating profit, generated from a company’s core operations, rose 18.5% to R696.9m. In terms of cash flow, net cash generated from operating activities fell more than four-fifths to R18.6m on higher financing costs and the higher dividend.