Hyprop Investments Limited (JSE:HYP) News - Condensed consolidated interim results for the six months ended 31 December 2021 ("HY2022")

HYPROP INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/005284/06)
JSE share code: HYP ISIN: ZAE000190724
Bond issuer code: HYPI
(Approved as a REIT by the JSE)
("Hyprop" or "the Company" or "the Group")


CONDENSED CONSOLIDATED
INTERIM RESULTS
for the SIX MONTHS ended 31 DECEMBER 2021 ("HY2022")


Balance sheet strengthened

- Total borrowings reduced by circa R1 billion since
  June 2021;
- R876 million of equity raised via the 2021 financial
  year dividend reinvestment plan;
- Net proceeds from the sale of Atterbury Value Mart
  and Delta City Belgrade applied to debt; and
- Fully consolidated LTV ratio reduced from 45.8% at
  30 June 2021 to 41.5%, and see-through LTV ratio
  reduced from 37.2% at 30 June 2021 to 34%.

Improved trading and financial performance

- 21% growth in like-for-like half year
  distributable income;
- Positive growth in footfall, tenant turnover and
  trading density across all portfolios; and
- Tenant turnover and trading density in the SA
  portfolio reached pre-Covid-19 levels in
  December 2021.

Significant progress on the Hystead liquidity event
via the disposal of Hystead's assets

- Hyprop to acquire the four remaining Hystead assets
  for €193 million, subject to shareholder approval;
- Disposal of Delta City in Belgrade, Serbia completed;
- Conditional sale and purchase agreement concluded
  for Delta City in Podgorica, Montenegro; and
- Euro equity debt to be reduced by €185 million.


                                                         Unaudited 6            Unaudited 6         Audited 12
                                                              months                 months             months
                                                    31 December 2021       31 December 2020       30 June 2021
Net operating income (R'000)                                 477 724                408 234            889 711 
Headline earnings per share (cents)                            200.1                  114.6              327.7
Basic earnings / (loss) per share (cents)                      271.1                  (42.9)            (297.4)
Distributable income per share (cents)                         146.5                  160.6              336.5
Net asset value per share (Rand)                               58.97                  74.48              62.96


Dividend declaration

Until market conditions stabilise the board anticipates
declaring an annual dividend on publication of the
Group's year-end results, having regard to the JSE's
minimum distribution requirements applicable
to REITs, capital expenditure and other cash flow
requirements, and the objective of strengthening the
balance sheet. The Board will review the dividend
payment frequency and pay-out ratio as market
conditions evolve.

Outlook and prospects

Hyprop remains focused on creating safe
environments and opportunities for people to
connect and have authentic and meaningful
experiences, thereby creating long-term sustainable
value for all stakeholders.
There are signs that the global impact of Covid-19
is reducing, and that economies are re-opening
after two years of Covid-19 restrictions. We are
optimistic that in time trading conditions will return
to pre-Covid levels, indications of which are evident in
the trading metrics of all of our portfolios in HY2022.
As a consequence, current conditions offer attractive
opportunities for new investments.
We are confident that the Group's strategy and key
priorities remain relevant, more so after a prolonged
Covid-19 environment. We will continue to focus on
the following:

Group:

- Implementing the Hystead transaction and the
  sale of Delta City, Podgorica as part of the Hystead
  liquidity event;
- Further strengthening the balance sheet and
  reducing the Euro equity debt using the proceeds of
  the Hystead disposals;
- Incurring only essential capital expenditure;
- Conducting annual portfolio reviews to ensure that
  we retain the core assets and recycle assets that do
  not accord with our long-term strategy; and
- Implementing ESG initiatives.

South Africa:

- Pursuing the centre repositioning strategies in line
  with Hyprop's Golden Thread principles; and
- Exploring development and redevelopment
  opportunities within the portfolio.

Eastern Europe:

- Retaining the dominance of the centres through
  active asset management initiatives and leveraging
  the Group's SA expertise; and
- Securing rights to extend the two Croatian centres
  to meet growing tenant demand.

Sub-Saharan Africa:

- Ensuring value creation through active asset
  management;
- Concluding the sale of the Ghanaian portfolio; and
- Revisiting exit options for Ikeja City Mall should the
  sale to Actis not be implemented.

Non-tangible assets:

- Extracting value from the newly developed SOKO
  digital platform;
- Exploring opportunities to roll-out further SOKO
  districts; and
- Completing the NIKA software development and
  roll-out in the SA portfolio.

Assuming implementation of the Hystead
transaction, the EE portfolio will represent 32% of
the Group's total investment property and circa 32%
of net property income, diversifying the Group's
geographic exposure and reducing reliance on the
SA economy, which continues to underperform, and
which faces structural headwinds.

Inflation is at concerning levels in the economies of
many of our trading partners and the inflationary
pressures have been exacerbated by the
consequences of Russia's unfortunate invasion of
Ukraine. Higher inflation in the economies in which
we operate will put pressure on consumers, which
will in turn affect our tenants and the affordability of
rentals. Furthermore, for a number of years our South
African properties have been subject to increases in
property rates and utility costs at levels significantly
higher than both the consumer price index and the
levels at which we are able to recover the increases
from our tenants. While our repositioning strategies
are appropriate to a low rental growth environment,
a combination of low rental growth and excessive
external cost pressures will reduce our margins.
The Group is closely monitoring events in the Ukraine
and assessing the risks to the EE portfolio.

Basis of preparation

The condensed consolidated financial statements
for the six months ended 31 December 2021
were prepared in accordance with the JSE Listings
Requirements for condensed consolidated results, the
requirements of the Companies Act of South Africa
and International Financial Reporting Standards
(IFRS) (including specifically the SAICA Financial
Reporting Guides as issued by the Accounting
Practices Committee and Financial Pronouncements
as issued by the Financial Reporting Standards
Council and IAS 34 Interim financial reporting). All
amendments to standards that are applicable to
Hyprop for its financial year beginning 1 July 2021
have been considered.
The accounting policies applied in these condensed
consolidated financial statements are the same as
those applied in the Group's consolidated financial
statements for the year ended 30 June 2021.

17 March 2022

Corporate information

Directors G.R. Tipper*# (Chairman), M.C. Wilken (CEO), B.C. Till (CFO), A.W. Nauta (CIO), A.A. Dallamore*#, L. Dotwana*#, K.M. Ellerine*, Z. Jasper*#, N. Mandindi*#,
T.V. Mokgatlha*#, B.S. Mzobe*#, S. Noussis*#, S. Shaw-Taylor*#. 

*Non-executive  #Independent

Registered office Second Floor, Cradock Heights, 21 Cradock Avenue, Rosebank, 2196 Transfer secretaries Computershare Investor Services Proprietary Limited,
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 Company secretary Fundiswa Nkosi Sponsor Java Capital, 6th Floor, 1 Park Lane, Wierda Valley, Sandton, 2196 
Investor relations Lizelle du Toit e. lizelle@hyprop.co.za

This short-form announcement is the responsibility of the directors and is only a summary of the information contained in the full announcement.
The full announcement has been released on SENS and is available on the JSE website https://senspdf.jse.co.za/documents/2022/jse/isse/HYPE/HY2022.pdf and on the Company website at
http://www.hyprop.co.za/results/interims-2022/pdf/booklet.pdf. Copies of the full announcement may also be requested by emailing Lizelle du Toit at lizelle@hyprop.co.za or at the Company's
registered office or at the office of the sponsor, at no charge, during office hours from Friday, 18 March 2022 to Friday, 25 March 2022. Any investment decision should be based on the full
announcement published on the Company's website.

www.hyprop.co.za
Date: 17-03-2022 02:11:00
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