Dipula Income Fund Limited, a South African Real Estate Investment Trust (REIT) listed on the Johannesburg Stock Exchange (JSE), has declared a final gross dividend for the fiscal year after a period of robust performance. The company's strategic financial management and asset optimization have positioned it for this positive announcement.
The REIT reported a successful fiscal year ending August 31, 2023, marked by an increase in property values within its R9.8 billion portfolio of diversified rental assets. Dipula's focus on revamping properties and investing in renewable energy solutions was funded by the disposal of non-core assets which generated R190 million (USD1 = ZAR18.1209) at a yield of 9%.
Despite facing rising interest rates that resulted in a 14.1% hike in net finance costs, Dipula maintained solid financial health. This pressure on finances led to a 6.9% dip in distributable earnings, which totaled R514 million. To counteract these challenges and enhance liquidity, the company underwent a capital restructure in June 2022, which successfully increased liquidity by over 200% for the fiscal year 2023.
In response to the end of the fiscal year, Dipula launched an ambitious R3.8 billion debt syndication program aimed at diversifying its funding sources and reducing funding margins. The company also secured leases worth R1 billion in rental income during the year, contributing to high occupancy levels across its properties.
As part of its commitment to sustainability and responsible corporate governance, Dipula completed its first Environmental, Social, and Governance (ESG) benchmarking and gap analysis in the fiscal year 2023. The company is now finalizing a strategic energy plan that includes solar and backup power solutions, with implementation scheduled for early 2024.
Today, Dipula declared a final gross dividend (number 23) of 25.41793 cents per share. The dividends are considered 'qualifying distributions' under section 25BB of the Income Tax Act. Shareholders should note that these dividends will be transferred to their Central Securities Depository Participant (CSDP) or broker accounts on Monday, December 11, 2023.
The declaration revealed tax implications for both resident and non-resident shareholders. Residents must include these dividends in their gross income but may be exempt from dividend withholding tax under certain conditions. Non-residents are subject to a dividend withholding tax of 20%, which may be reduced according to any applicable Double Taxation Agreement (DTA).
The cum dividend trading deadline is set for Tuesday, December 5, 2023, followed by an ex-dividend trading period from Wednesday, December 6 to Friday, December 8, during which no share dematerialization or rematerialization will occur.
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