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Company Data
 
STANLIB FAHARI I-REIT
http://www.stanlibkenya.com
Par Value:                  
Closing Price:           8.42
Total Shares Issued:          180972300.00
Market Capitalization:        1,523,786,766
EPS:             0.83
PE:                 10.145
 

Stanlib Fahari I Reit FY 2018 results through 31st December 2018 vs. 31st December 2017
FY Rental and related income 309.763210m vs. 279.433136m +10.854%
FY Straight lining of lease income 22.486262m vs. [8.743959m] +357.163%
FY Revenue 332.249472m vs. 270.689177m +22.742%
FY Interest income 56.433877m vs. 99.852345m -43.383%
FY Property expenses [108.850390m] vs. [96.292615m] +13.041%
FY Fund operating expenses [130.221511m] vs. [135.632948m] -3.990%
FY Property expenses [108.850390m] vs. [96.292615m] +13.041%
FY Operating expenses [239.071901m] vs. [231.925563m] +3.081%
FY Fair value adjustment to investment property 65.606465m vs. 22.012769m +198.038%
FY Straight lining of lease income [22.486262m] vs. 8.743959m -357.163%
FY Increase/ [decrease] in fair value of investment property 43.120203m vs. 30.756728m +40.198%
FY Net profit for the year 193.491759m vs. 171.126409m +13.069%
Basic Earnings per unit 1.07 vs. 0.95 +12.632%
Headline Earnings per unit 0.83 vs. 0.78 +6.410%
Distributable earnings per unit 0.71 vs. 0.82 -13.415
Total Assets 3.852621474b vs. 3.761627663b +2.419%
Fair value of investment property 3.262953647b vs. 2.379739909b +37.114%
Investment securities 83.809515m vs. 529.000000m -84.157%
Equity 3.723943826b vs. 3.666181292b +1.576%
Cash and cash equivalents at end of period 302.822720m vs. 688.190218m -55.997%

Business review
Financial highlights
Net earnings grew by 13% to KShs 193.5 mln in 2018 2017 KShs 171.1 mln. This favourable result was mainly due to an increase in fair value gain on revaluation of investment property.
The portfolios market valuation was bolstered by the contribution of a modern 3 screen cinema at Greenspan Mall which is due to come on stream in Q2 2019 underpinned by a 10 year lease.
Recent successful renewal of key tenant leases has also boosted the malls future cash flows and expiry profile and will counter the challenge of vacancies in the portfolio.
Despite the increase in net profit, distributable earnings declined by 14% to KShs 127.9 mln 2017 KShs 149.1 mln as a result of a temporary increase in vacancies as well as tax leakages in the form of irrecoverable withholding tax at property subsidiary company level.
The long anticipated legislation to exempt REIT owned subsidiaries is expected to curb the tax leakages going forward.
Interest income declined substantially in line with the utilisation of excess cash to purchase an A grade three storey office building situated in Lavington. The transaction was completed on 29 May 2018 with rental income accruing from that date.
Robust debt collection and tenant engagement processes are yielding the desired outcome tenant arrears declined significantly and remained within target at end of 2018.
Property development in progress
Construction work to install a three screen cinema with about 100 seats each at Greenspan Mall is nearing completion and the tenant is expected to begin operating from Q2 2019. This development will strengthen the malls entertainment offering and is expected to increase foot traffic, benefit existing and future tenants and increase rental income.
Distribution
Despite the slight decline in distributable earnings, the distribution remains flat year on year. Having considered the cash flow requirements and availability of funds, the REIT Manager has recommended and the Trustee has approved a first and final distribution of KShs. 135,729,225 in relation to the year ended 31 December 2018 2017 KShs. 135,729,225. The distribution amounts to 75 cents per unit 2017
75 cents per unit and is payable by no later than 30 April 2019.

Stanlib Fahari I Reit FY 2017 results through 31st December 2017 vs. 31st December 2016
FY Rental and related income 279.433136m vs. 248.572436m +12.415%
FY Straight lining of lease income [8.743959m] vs. 89.004050m -109.824%
FY Revenue 270.689177m vs. 337.576486m -19.814%
FY Interest income 99.852345m vs. 111.209231m -10.212%
FY Other income 101.606067m vs. 137.856149m -26.296%
FY Property expenses [96.292615m] vs. [94.631625m] +13.779%
FY Fund operating expenses [135.632948m] vs. [180.422344m] -24.825%
FY Property expenses [96.292615m] vs. [84.631625m] +13.779%
FY Operating expenses [231.925563m] vs. [265.053969m] -12.499%
FY Fair value adjustment to investment property 22.012769m vs. 8.000000m +175.160%
FY Straight lining of lease income 8.743959m vs. [89.004050m] +109.824%
FY Increase/ [decrease] in fair value of investment property 30.756728m vs. [81.004050m] +137.969%
FY Operating profit 171.126409m vs. 129.374616m +32.272%
FY Finance costs vs. [23.374328m]
FY Net profit for the year 171.126409m vs. 106.000288m +61.440%
Basic Earnings per unit 0.95 vs. 0.59 +61.017%
Headline Earnings per unit 0.78 vs. 0.89 -12.360%
Distributable earnings per unit 0.82 vs. 0.54 +51.852%
Total Assets 3.761627663b vs. 3.715011411b +1.255%
Fair value of investment property 2.379739909b vs. 2.345995950b +1.438%
Investment securities 529.000000m vs. 733.035734m -27.834%
Equity 3.666181292b vs. 3.585541033b +2.249%
Cash and cash equivalents at end of period 688.190218m vs. 440.186650m +56.341%

Stanlib I REIT FY17 Results via Kestrel
Property expense ratio remained flat at 34%
Rental income increased by 12% y/y to Kes 279.4m. 2 assets were acquired mid-year in 2016 so accounted for only 6 months of rental in 2016 vs full year in 2017.
Interest income declined from Kes 111m to Kes 99.8m.
FV gain increased to KES 22m from Kes 8m. Op profit Kes 171.1m in 2017 vs 128.4m. One off REIT costs did not recur in 2017.
Rent escalation on commercial property (ex Greenspan) is 12.5% every 2 years.
The commercial property was funded from cash balances, REIT was under invested in property per CMA regulations prior to this and had sought exemption. 33% of assets was held in cash.
Total property portfolio return was 8.5% vs 8.9% in 2016. Tenant debtors is Kes 42m (excl. provisions), all related to Greenspan mall
Lease expiry profile is staggered and healthy.
Average vacancy rate is 6.5%, all at Greenspan mall (the mall itself has a vacancy rate of 8.1%)
Setting up a cinema at Greenspan mall. 3 screen 3D cinema with total capacity of 300 people. 6,416 sq ft, 10 year lease term, 11.7% yield from cinema vs 7.5% from the mall on average.
Stanlib bought a new commercial building at a price of Kes 850m. Low rise grade A commercial property. 41,300 sq ft, 100% let. 73.8m annual rent, escalation of 15% every 2 years.

Stanlib Fahari I-Reit FY 2017 results through 31st December 2017 vs. 31st December 2016
FY Rental and related income 279.433136m vs. 248.572436m +12.415%
FY Straight lining of lease income [8.743959m] vs. 89.004050m -109.824%
FY Revenue 270.689177m vs. 337.576486m -19.814%
FY Interest income 99.852345m vs. 111.209231m -10.212%
FY Other income 101.606067m vs. 137.856149m -26.296%
FY Property expenses [96.292615m] vs. [94.631625m] +13.779%
FY Fund operating expenses [135.632948m] vs. [180.422344m] -24.825%
FY Property expenses [96.292615m] vs. [84.631625m] +13.779%
FY Operating expenses [231.925563m] vs. [265.053969m] -12.499%
FY Fair value adjustment to investment property 22.012769m vs. 8.000000m +175.160%
FY Straight lining of lease income 8.743959m vs. [89.004050m] +109.824%
FY Increase/ [decrease] in fair value of investment property 30.756728m vs. [81.004050m] +137.969%
FY Operating profit 171.126409m vs. 129.374616m +32.272%
FY Finance costs vs. [23.374328m]
FY Net profit for the year 171.126409m vs. 106.000288m +61.440%
Basic Earnings per unit 0.95 vs. 0.59 +61.017%
Headline Earnings per unit 0.78 vs. 0.89 -12.360%
Distributable earnings per unit 0.82 vs. 0.54 +51.852%
Total Assets 3.761627663b vs. 3.715011411b +1.255%
Fair value of investment property 2.379739909b vs. 2.345995950b +1.438%
Investment securities 529.000000m vs. 733.035734m -27.834%
Equity 3.666181292b vs. 3.585541033b +2.249%
Cash and cash equivalents at end of period 688.190218m vs. 440.186650m +56.341%

H1 Rental and related income 137.969452m vs. 120.855334m +14.161%
H1 Straight lining of lease income [2.674906m] vs. 88.625294m -103.018%
H1 Other income 52.850748m vs. 87.346054m -39.493%
H1 Operating Expenses [112.546133m] vs. [160.844428m] -30.028%
H1 Increase/ [decrease] in fair value of investment property 2.674906m vs. [88.625294m] +103.018%
H1 Operating profit 78.274067m vs. 47.356960m +65.285%
H1 Finance costs vs. [22.955567m]
H1 Net profit for the period 78.274067m vs. 24.401393m +220.777%
Basic EPS 0.43 vs. 0.13 +230.769%
Headline EPS 0.42 vs. 0.49 -14.286%
Distributable EPS 0.43 vs. 0.13 +230.769%
Total Assets 3.694459035b vs. 3.677967790b +0.448%
Total Equity 3.573328950b vs. 3.515729819b +1.638%
Net Asset Value per share 19.75 vs. 19.43 +1.647%
Cash and cash equivalents at the end of the period 393.999343m vs. 363.138822m +8.498%
No interim dividend

Company Commentary

currently owns 3 properties [a shopping centre and two semi office light industrial buildings] valued at 2.4b.
The REIT as delivered growth of 221% in earnings for the 6 month period ended 30th June 2017
currently ungeared

FY Revenue 337.576486m
FY Rental and related income 248.572436m
FY Straight lining of lease income 89.004050m
FY Interest income 111.209231m
FY Other income 137.856149m
FY Fund operating expenses [180.422344m]
FY Operating expenses [265.053969m]
FY Increase in fair value of investment income [81.004050m]
FY Operating profit 129.374616m
FY Finance costs [23.374328m]
FY Net profit for the period 106.000288m
Basic Earnings per unit 0.59
Headline Earnings per unit 0.89
Distribution earnings per unit 0.54
Investment property 2.439729976b
Total assets 3.715011411b
Cash and cash equivalents at end of period 440.186650m

Commentary

Net Asset value per Unit 19.81
Dividend 0.50 a share

Conclusions

I will have to dig deeper but the Discount to NAV is noteworthy.

STANLIB Fahari I REIT 7 months results through 30th June, 2016

Revenue 117.939894m
Other income 77.882552m
Operating expenses [113.675700m]
Operating profit 82.146746m
Finance costs [22.982868m]
Profit before Tax 59.163878m
Total comprehensive income for the period 53.009839m
EPS 0.293
Headline EPS 0.232
Investment property 2.417755551b
Total assets 3.689666182b
Equity 3.531975591b
Cash and cash equivalents at the end of the period 1.111781269b
Units Issued 180,972,300
Average Price Over the last 5 Weeks
Average Price Over the last 5 Months
No. Of Shares Traded Over the last 5 Weeks
No. Of Shares Traded Over the last 5 Months
Market Capitalization Over the last 5 Weeks
Market Capitalization Over the last 5 Months
Data Source: Nairobi Stock Exchange
Trading Day: 22 Aug 2019
 
Downloads
 
  29-MAR-2019 ::  Full Year Results & Notice of AGM
  Audited Results for the Year Ended 31 Dec 2018 and Notice of AGM.

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