Vukile Property Fund (VKE) H2 2024 earnings summary

Executive summary

• Achieved strong operational and financial performance, outperforming guidance with 6.7% FFO per share growth and 10.5% dividend growth, driven by robust results in both South Africa and Spain.

• Portfolio is 100% retail-focused, with 61% of assets in Spain and the remainder in South Africa, totaling ZAR 40.3 billion in assets.

• Maintained a blue-chip tenant mix, defensive portfolio positioning, and strong rand-hedge.

• Strategic asset recycling included exiting non-core investments and increasing stakes in high-performing assets like Lar España and Castellana.

• Focused on customer centricity, active asset management, and prudent financial management.

Financial highlights

• Dividend per share increased by 10.5% to 124.2 cents; FFO per share up 6.7% to 154.2 cents year-over-year.

• Net operating income in South Africa grew by 5.4% year-over-year; Castellana's normalized NOI increased by 11% (excluding FX impact).

• Net asset value per share rose by 5.2% to ZAR 21.55, supported by property revaluations and a 47% increase in Lar España's share price.

• Group loan-to-value (LTV) reduced to 40.7%, with ZAR 5.3 billion in liquidity (ZAR 2.4 billion cash, ZAR 2.9 billion undrawn facilities).

• Raised ZAR 1.7 billion from share issuances and secured green and sustainability-linked funding post year-end.

Outlook and guidance

• Forecasting FFO per share growth of 2%-4% and dividend per share growth of 4%-6% for the next year.

• Guidance assumes 5–7% NOI growth across direct property portfolios, higher funding costs, and stable trading conditions.

• Dividend payout ratio to remain within 80%-85%, ensuring tax neutrality and sufficient retained cash for CapEx.

• DRIP (dividend reinvestment plan) to be offered for FY24 final dividend to support future acquisitions.

• Pipeline includes accretive acquisitions in Spain and potential expansion into Portugal and Western Europe, focusing on community and convenience malls.