Attacq full year NAV per share rises 24%

Capital growth fund Attacq limited, which made an entry on the JSE last year October, today said its net asset value per share (NAVPS) increased by 24% to R14.77 for the year ended June 2014.

The results were marginally higher than prior year NAVPS of R11.91. Its Net rental income increased by 55.4% year-on-year.

Attacq does not pay distributions but offers investors the prospect of capital growth. Its gearing reduced to 34% at 30 June 2014 and 63% of its total external interest-bearing debt was fixed.

With a market capitalisation of over R14 billion, the company which has a 25% interest in development group Atterbury Holdings, secured full ownership of its local retail assets during the financial period under review. This includes super regional centres of MooiRivier Mall, the Eikestad Mall Precinct, Brooklyn Mall and Garden Route Mall.

It also completed five buildings at the Waterfall development, increasing its gross assets by 44.5% to over R18.4 billion. The prime development saw the opening of a Cell C Campus, Group 5 head office, new distribution centre for MBT Technologies, two buildings in the Maxwell Office Park and Waterfall Corner shopping centre.

Meanwhile Attacq has secured in principle approval for the proposed development of a new 40 000m2 office premises at Waterfall for accounting and auditing firm PricewaterhouseCoopers (PwC).

The property group also has exposure to property assets in other African countries such as Ghana and Zambia as well as to international markets like Europe.

Speaking at the announcement of the results, Morne Wilken, CEO of Attacq said: “We internalised the asset management, sold down on our non–core assets at a premium to NAV and simplified our structure. We further consolidated our international portfolio with an increased shareholding of 47,2% in MAS Real Estate Inc.”

Progressing its international investment strategy after the close of its half-year period, Attacq followed its rights and invested R1.3 billion in the MAS private placement which closed on 11 March 2014 in order to maintain its stake of 47.2% in the enlarged issued share capital of MAS.

Hyprop Investments Limited and Attacq Limited have restructured their investment in African Land Investments ("African Land"), whereby Hyprop, through its wholly-owned subsidiary, Hyprop Mauritius, will hold 50% in Manda Hill, African Land's only asset. Atterbury Africa, a joint venture between Hyprop, Attacq and the Atterbury Group, will hold the balance. It was further decided to merge the management teams of Africa Land Investments and Atterbury Africa whilst internalising the asset management.

The new merged entity was rebranded to Att Africa. Kevin Teeroovengadum, previously from Actis, was elected as CEO and Renier Van Rensburg as the Financial Director.

Attacq holds a 31.25% shareholding in Att Africa, which has two completed Malls; Manda Hill and Accra Mall as well as three malls under construction: West Hills 27 500sqm, which will be completed in Oct 2014, Achimota 13 400sqm and Kumasi 27 000sqm.

During the year to June Attacq increased its effective shareholding in Attacq Waterfall Investment Company (AWIC), the company that holds the development rights in the Waterfall Estate, to 85.9 percent and broke ground on the R4.1 billion Mall of Africa, which will have more than 120 000m2 of retail space when launched in April 2016.

Analysts Comment

In mid-afternoon trade Attacq was testing the R20.10 level, which equated to a premium of about 40% to the NAV of R14.77/share, begging the question whether the stock is overvalued.

Analysts said investors are clearly prepared to pay for the management team’s ability to unlock value from its assets over time. However, Meago Asset Managers director Jay Padayachi believed the stock is "one for the long term, with better short-term value available elsewhere’’.

Propects

Looking ahead, Wilken confirmed that Attacq’s operational focus remains achieving sustainable capital growth for shareholders through the ongoing roll out of Waterfall, the successful completion of its existing development pipeline and the implementation of its diversification strategy into African and international markets.