Mauritius-based Grit Real Estate Income Group, which claims to have delivered a robust operational performance, has decided to withhold dividends for the second consecutive year due to the impact COVID-19-related concessions and valuation reversions have had on the group’s financial position.
Grit – which has listings in London and Mauritius – released its results for the full year ended June 30 on Friday and reported a 37.7% drop in distributable earnings per share for the period to $5.97 cents (2020: $9.58 cents).
“As a result of ongoing Covid-19 related uncertainties during the reporting period, valuation declines were experienced across the property portfolio, resulting in the value of total income-producing properties dropping from US$823.5 million in the prior financial year to US$801.9 million, resulting in a total return per share decline of 11.3% (2020:15.8% decline),” Grit was quoted as telling South Africa’s MoneyWeb in a statement.
“We cancelled or suspended several announced pipeline acquisitions to protect balance sheet capacity and have negotiated a temporary extension of the Group’s LTV (loan-to-value) and ISCR (interest service coverage ratio) covenants,” Grit CEO, Bronwyn Knight said.
The group’s cost-cutting exercise reportedly also included a 10% pay reduction for its board and senior management, which saw it reduce administrative costs by 13%, ultimately shaving off about $4 million from the balanced sheet.
“In line of all coming to the party to say, our shareholders are going to suffer because we can’t pay distribution and we want to reduce our LTV – we all need to be taking pain simultaneously,” Knight said.
Original article at MoneyWeb