Attacq Limited lifts full-year profit

Attacq Limited, previously Atterbury Investment Holdings, on Monday reported annual profit grown to R728.8 million for the year ended June 30 compared with a profit of R559 million the previous year.

Attacq Limited, previously Atterbury Investment Holdings, on Monday reported annual profit grown to R728.8 million for the year ended June 30 compared with a profit of R559 million the previous year.

Attacq which is soon to be listed on the JSE, said diluted earnings per share from continuing and discontinued operations amounted to 162c compared with 118c the previous comparative period. However‚ the company posted a diluted headline loss per share of 10.6c compared with a profit of 13.8c per share.

The company said rental income and property expenses year on year movement were distorted due to discontinued operations being excluded and reflected separately. The continuing operations on a like-for-like basis reflected a 15.5% increase in rental income. General property expenses increased by 19.5%.

Attacq manages a diversified portfolio of property assets‚ comprising‚ as at 30 June 2013‚ 18 operational properties‚ 10 properties under development‚ infrastructure and land rights and other investments with a total asset value of R13.35bn.

With assets of R13.35bn‚ Attacq is one of the biggest and most eagerly awaited property listings to come to the JSE in many years.

The company‚ which owns the development rights at Waterfall City near Midrand and stakes in prime shopping centres such as Brooklyn Mall in Pretoria and Garden Route Mall in George‚ is expected to list at an initial market capitalisation of R8.5bn.

Attacq is the JSE’s 14th property listing in three years‚ with most of the new counters having come to the bourse with market capitalisations below R2bn.

Attacq CE Morne Wilken said the fund‚ in its unlisted guise as Atterbury Investment Holdings‚ had delivered an average compound return of 20.62% to shareholders since inception eight years ago. The fund had traded over the counter until now and has an existing shareholder base of 570.

Analysts expect the company to comfortably reach its R800m private placement target‚ given that Attacq is differentiating itself in a number of ways from existing property stocks.

The offering‚ at R15 per share‚ to select investors closes on Wednesday.

Unlike most of its listed peers‚ Attacq is unique in that it is a pure capital growth play. The stock will not pay out any dividends in the first few years after listing.

“Attacq’s share placement should be well supported. Property investors have been waiting a while for a large listing and Attacq is providing this opportunity‚” Momentum Asset Management head of property Nesi Chetty said.

He said the focus of the company would be to reinvest earnings into developments so it would not list as a real estate investment trust (Reit)‚ which is obliged to pay out at least 75% of its earnings via income distributions.

Mr Chetty said much of Attacq ’s future capital growth upside lay in the unlocking of Waterfall’s development potential over the next 10-15 years.

The group recently broke ground on the premises of the R3bn Mall of Africa‚ which will anchor Waterfall City. “Investors should therefore expect a lot of the focus to be on capital appreciation rather than income.”

Meago Asset Management director Jay Padayatchi said the premium of about 25% to NAV that Attacq was expected to list at was probably justified if one factored in an increase in property values between the June year-end and the listing date.

“In addition‚ Attacq has a strong management team with an enviable track record and access to one of the most desirable real estate developments in Gauteng.”

It was also announced on Monday that Attacq would consolidate its European property interests in AltX-listed MAS Real Estate‚ an offshore property play focused on Germany‚ Switzerland and the UK.

Attacq has sold its stakes in two funds listed on the Euro MTF Market of the Luxembourg Stock Exchange for EUR34.2m (R468m) in a share swap arrangement to MAS. The deal will nearly double Attacq’s stake in MAS from 23.9% to 47.3%.