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Unaudited Interim Results, Cash Dividend and Notice of Financial Assistance for the six months ended 30 Sep 2025
Burstone Group Limited
Approved as a REIT by the JSE
Incorporated in the Republic of South Africa
Registration number: 2008/011366/06
Share code: BTN
Bond code: BTNI
ISIN: ZAE000180915
Income tax reference number: 9332/719/16/1
("Burstone" or "the Group")
UNAUDITED INTERIM RESULTS, CASH DIVIDEND AND NOTIFICATION OF FINANCIAL ASSISTANCE
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2025
The board of directors of Burstone ("the Board") is pleased to announce the results for the six months ended 30 September 2025.
OVERVIEW FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2025
1H26 Distributable income per share ("DIPS") increased by 3.0% to 51.07 cents (1H25: 49.53 cents), supported by:
- Strong underlying real estate performance;
- Growing fee income from the funds and asset management business; and
- A reduction in total operating overheads of 5.5%
Overall DIPS performance was partially offset by:
- Marginally dilutive South African asset sales in FY25; and
- The impact of funding capital expenditure, deployment into Australian investments, deferred consideration and transactional cash
flow timing
Real estate investment
South Africa:
- Strong LFL Base NOI growth of 5.3%
- Improved vacancy of 4.7% (FY25: 6.7%)
- Improved negative reversions of 2.5% (1H25: negative 8.4%)
- Significant solar roll out: 8MW (c. 60% increase) in solar generation within the next 12 months
Europe:
- Stable performance delivering LFL earnings in line with prior year
- Strong positive rental reversions of 16.3% and indexation of 2.6%, offset by increased vacancy within the portfolio to 14.8% as the strategic
partnership prioritises capturing maximum estimated rental value ("ERV") growth over short-term vacancy
Australia:
- Total investment income from real estate of R14m (1H25: nil) as asset management initiatives take effect and positive rental reversions
are captured
Funds and asset management
- 2% increase in third party GAV
- Fee income increased 70.6% to R58m and now represents 14.1% (1H25: 8.5%) of Group DIPS
South Africa:
- Remain committed to SA Core Plus platform
- Seeding platform with c. R5bn of retail and industrial assets
- Platform LTV of 40%
Europe:
- The successful completion of the Blackstone transaction last year represented the achievement of a key milestone for Burstone
- Burstone's 20% co-investment and retained management mandate provides long-term alignment and earnings potential as the platform
matures and performs in line with expectation
- Assessing opportunities to establish additional 3rd-party fund platforms, expanding its capital partnerships
Australia:
- Third party equity under management ("EUM") increase to A$668m (7% increase from FY25)
- Fee income of R4m (1H25: R2m), expected to accelerate in 2H26
- A$170m of new equity commitments from Australian capital partners to support platform growth will increase third-party GAV by c. 11%
Balance sheet highlights
- The Group's pro-forma LTV at the reporting date was 39.0% (FY25: 36.3%) encompassing the effects of solar-related capital expenditure,
further deployment for offshore investments, offset by SA asset disposals.
- The Group will continue to target a leverage ratio of below 35% with a medium-term LTV outlook of between 34% and 36%, supported by continued
capital recycling predominantly through SA asset sales.
- R0.5bn of SA assets pending transfer.
- A further c. R1.0bn to c. R1.5bn earmarked for sale within the next 18 months creates co-investment capacity to support R10bn of third-party
GAV potential.
- The Group has significant liquidity as it holds R1.3 billion in undrawn committed available facilities and cash, excluding proceeds from disposals that
have yet to be completed.
- Net asset value ("NAV") has decreased by 2.1% to R11.53ps (FY25: R11.78ps) largely as a result of mark-to market, amortisation and foreign exchange.
Property-related valuations for the period have remained relatively flat, with nominal fair value gain recognised in respect of the various portfolios.
FINANCIAL INFORMATION
Unaudited Reviewed
30 September 30 September
2025 2024 Movement
Revenue (ZAR'000) 1 009 529 1 007 533 0.2%
Operating profit (ZAR'000) 504 114 663 943 (24.1%)
Distributable earnings per share (cents) 51.07 49.53 3.0%
Net asset value per share (ZAR) 11.53 13.95 (17.0%)
Basic earnings/(loss) per share (cents) 22.24 (101.71) 123.95
Diluted earnings per share (cents) 22.27 (100.72) 122.99
Headline earnings per share (cents) 17.84 (89.65) 107.49
Headline earnings per diluted share (cents) 17.86 (88.77) 106.63
PROSPECTS AND GUIDANCE
The Group continues to execute its strategy, transitioning from a traditional property owner to a fully integrated international real estate investor,
funds and asset management business. The Group's performance reaffirms Burstone's progress over the past year in achieving operational stability
and scaling its funds and asset management business across its respective regions.
As a result, earnings momentum is building as underlying real estate performance strengthens and funds management growth gains traction.
Renewed focus on strategic operational alignment across geographies will yield cost efficiencies over the short- to medium-term. Balance sheet
strength remains critical to support Burstone's growth ambitions and fund platform scalability.
Real estate investment
South Africa:
- South African portfolio is expected to continue to deliver similar LFL Base NOI growth for 2H26, underpinned by improved reversions and vacancy
across the portfolio
- Solar deployment pipeline of c. 8MW to be added to the portfolio within the next 12 months at compelling yields
- c. R1.0 billion to R1.5 billion planned asset sales over the next 18 months
Europe:
- Burstone's 20% co-investment in the approximately EUR1 billion PEL portfolio is expected to generate LFL earnings similar to the first half in
2H26 amidst rental growth and positive reversions
Australia:
- The current investments into initially low-yielding assets will offer strong reversionary potential as asset and capital management initiatives
take effect
Funds and asset management
Europe:
- Burstone aims to leverage its European footprint to expand its industrial and logistics exposure across key European markets
- The Group continues evaluating additional opportunities to launch new fund platforms that will attract third party capital, building on its proven track
record in the logistics and light industrial sectors, while leveraging the Group's existing European operations
Australia:
- The additional A$170 million of equity from TPG will accelerate growth of the business
- This expanded commitment underscores the strength of Irongate's performance, its disciplined investment strategy, and the confidence of global
partners in Burstone's scalable, capital-efficient platform model
Balance sheet
The Group's balance sheet remains well positioned, providing flexibility to capitalise on future growth opportunities.
Capital optimisation remains a core focus for the business. In addition to creating balance sheet "firepower" through continued SA asset sales,
Burstone is exploring multiple funding avenues, including additional funds management platforms/strategies and the introduction of new limited
partner ("LP") capital to co-invest alongside Burstone across all markets.
Group outlook
Burstone remains committed to FY26 DIPS growth of between 2% and 4%, with the upper range, contingent on successful capital deployment.
While the macroeconomic environment remains uncertain, management's prudent execution and disciplined approach continue to support
measured growth expectations.
ADDITIONAL INFORMATION: KEY FINANCIAL DATA
Six months ended Year ended
30 September 2025 31 March 2025
Group information
Group GAV R42.4bn R41.7bn
Third-party GAV R23.8bn R23.4bn
Pro-forma LTV (gearing)* 39.0% 36.3%
Total Group net debt (ZAR and Euro) R6.8bn R6.2bn
Debt maturity (years) (pre-refinancing) 2.6 3.0
Interest cover ratio 2.8x 3.1x
Hedge percentage on total Group debt 80% 95%
Weighted average all-in cost of funding (ZAR and Euro) 6.8% 7.1%
South African property portfolio
Number of properties 57 58
Asset value R13.5bn R13.2bn
Base like-for-like NOI growth 5.3% 0.2%
Cost to income (excl. bad debts) 25.3% 23.9%
GLA (m2) 854 500 845 345
Vacancy (by GLA) 4.7% 6.7%
WALE (years) 3.2 3.0
In-force escalations 6.5% 6.8%
Average reversions on renewals and new leases (2.5%) (4.6%)
% of space expiring let 93.1% 89.5%
PEL European property portfolio
Asset value EUR1.0bn EUR1.0bn
Like-for-like earnings growth Flat 1.1%
Vacancy (by GLA) 14.8% 6.1%
Average positive reversions on renewals and new leases 16.3% 14.8%
Indexation 2.6% 3.2%
* Reported LTV of 40.9% has been adjusted to include proceeds from sales of South African assets which have been agreed and all conditions met at the
balance sheet date, but are still awaiting transfer.
1H26 INTERIM DIVIDEND
The Board seeks to maintain a dividend payout policy that supports its long-term strategy. For the six months ending 30 September 2025, the Board
has resolved to apply a payout ratio of 90%, declaring a dividend of 45.95989cps (1H25: 44.58034cps) an increase of 3.0% from 1H25.
The issued share capital of the Company at the dividend declaration date amounted to 804 918 444. The distribution will be made from income reserves.
Tax implications for South African resident shareholders
Dividends received by or accrued to South African tax residents must be included in the gross income of such shareholders and will not be exempt
from income tax in terms of the exclusion to the general dividend exemption contained in section 10(1)(k)(i)(aa) of the Income Tax Act because they
are dividends distributed by a REIT. These dividends are, however, exempt from dividend withholding tax ("Dividend Tax") in the hands of South African
resident shareholders provided that the South African resident shareholders have provided to the CSDP or broker, as the case may be, in respect of
uncertificated Shares, or the Group, in respect of certificated Shares, a declaration by the beneficial owner (in such form as may be prescribed by the
Commissioner) that the dividend is exempt from dividends tax in terms of section 64F and a written undertaking (in such form as may be prescribed
by the Commissioner) to forthwith inform the CSDP, broker or the Group, as the case may be, should the circumstances affecting the exemption
change or if the beneficial owner ceases to be the beneficial owner.
If resident shareholders have not submitted the above-mentioned documentation to confirm their status as South African residents, they are advised
to contact their CSDP, or broker, as the case may be, to arrange for the documents to be submitted prior to the date determined by the regulated
intermediary, or if no date is determined, by the date of payment of the dividend.
Tax implications for non-resident shareholders
Dividends received by non-resident shareholders from a REIT will not be taxable in South Africa as income and instead will be treated as ordinary
dividends which are exempt from income tax in terms of the general dividend exemption in section 10(1)(k)(i) of the Income Tax Act. It should be noted
that up to 31 December 2013 dividends received by non-residents from a REIT were not subject to Dividend Tax. With effect from 22 February 2017,
any dividend received by a non-resident from a REIT are subject to Dividend Tax at 20%, unless the rate is reduced in terms of any applicable
agreement for the avoidance of double taxation ("DTA") between South Africa and the country of residence of the non-resident shareholder.
Assuming Dividend Tax will be withheld at a rate of 20%, the net dividend amount due to non-resident shareholders is 36.76791cps. A reduced
dividend withholding rate in terms of the applicable DTA may only be relied on if the non-resident shareholder has provided the following forms to
their CSDP or broker, as the case may be, in respect of uncertificated shares, or the Group, in respect of certificated shares:
- A declaration by the beneficial owner (in such form as may be prescribed by the Commissioner) that the dividend is subject to a reduced rate
as a result of the application of the DTA; and
- A written undertaking (in such form as may be prescribed by the Commissioner) to forthwith inform, the CSDP, broker or the Group, as the
case may be, should the circumstances affecting the reduced rate change or if the beneficial owner ceases to be the beneficial owner.
If applicable, non-resident shareholders are advised to contact the CSDP, broker or the Group, as the case may be, to arrange for the
above-mentioned documents to be submitted prior to the date determined by the regulated intermediary, or if no date is determined,
by the date of payment of the dividend, if such documents have not already been submitted.
Salient dates relating to the interim dividend
Declaration of dividend Wednesday, 19 November 2025
Last day to trade in order to receive distribution (cum-dividend) Tuesday, 9 December 2025
Shares trade ex-dividend Wednesday 10 December 2025
Record date for shareholders to receive dividend Friday, 12 December 2025
Dividend payment date Monday, 15 December 2025
Shares may not be dematerialised or rematerialised between Wednesday, 10 December 2025 and Friday, 12 December 2025, both days inclusive.
The above dates and times are subject to change. Any change will be released on SENS.
FINANCIAL ASSISTANCE
Notice in terms of section 45(5) of the Companies Act No. 71 of 2008, as amended
Shareholders are advised that at the annual general meeting of the Group held on 2 September 2025, shareholders approved and passed a special
resolution in terms of section 45 of the Companies Act No. 71 of 2008, as amended ("the Act") authorising the Group to provide financial assistance to
among others, related or inter-related companies of the Group.
Shareholders are hereby notified that in terms of S45(5)(b) of the Companies Act No. 71 of 2008, as amended, the board of directors of the Company
authorised the issue of guarantees and suretyships to third parties for finance and other facilities granted by those third parties to wholly-owned
subsidiaries of the Company during the period 1 April 2025 to 30 September 2025.
The board has confirmed that, after considering the reasonable foreseeable financial circumstances of the Company, it is satisfied that immediately
after providing such financial assistance, the Company would satisfy the solvency and liquidity test, as contemplated in terms of section 4 of the Act,
and that the terms under which such financial assistance was given were fair and reasonable to the Company.
On behalf of the board
Moss Ngoasheng (Independent Non-Executive Chairman), Andrew Wooler (Group Chief Executive)
19 November 2025
FURTHER INFORMATION
The directors of Burstone are responsible for the preparation and fair presentation of this short-form announcement and its contents.
This short-form announcement is only a summary of the information contained in the full announcement and does not contain full or complete details.
Any investment decision should be based on the full viewed announcement which can be accessed from Wednesday, 19 November 2025, using the
following JSE link:
https://senspdf.jse.co.za/documents/2025/jse/isse/BTNE/H1FY26.pdf
Alternatively, the full announcement is available on the Group's website:
https://www.burstone.com/investor-relations/latest-announcements
The full announcement is also available at the Group's registered offices for inspection at no charge, during office hours. Copies of the full
announcement may be requested by contacting Investor Relations on: investorrelations@burstone.com
LINK TO RESULTS CALL
The Group will host a presentation on the interim results via webcast today at 14:00 (SA time). A virtual question and answer session will be
accommodated during the presentation.
The webcast can be accessed at: https://www.burstone.com/investor-relations/latest-announcements
For further information please contact:
Myles Kritzinger (CFO)
E-mail: investorrelations@burstone.com
Johannesburg
19 November 2025
Debt and Equity Sponsor
Investec Bank Limited
Date: 19-11-2025 11:47:00
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