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Redefine frugal after buying portfolio

2 May 2017

Redefine International, the Western-European focused real estate investment trust, says it is holding on to its cash and bedding down its German shopping acquisition before plunging back into a competitive retail market.

The group also adjusted its dividend policy in the six months to February, cutting its payout in favour of keeping cash for acquisitions.

Redefine International declared a dividend of 1.3p a share for the reporting period after declaring a dividend of 1.625p for the six months to February 2016. It achieved earnings of £23.8m for the six months to February compared with £23.1m for the matching period in 2016.

The company said earlier in 2017 it would pay out a lower proportion of its income as dividends to comply with UK shareholders' demands.

The dual-listed company has to juggle demands of its South African and international investors, with JSE investors seeking income growth and investors on the London Stock Exchange preferring net-asset value appreciation.

It believes that using a European Public Real Estate Association distribution metric is a method of doing so.

"We wanted to be more fiscally conservative in a low-growth UK environment," said deputy CE Stephen Oakenfull.

Adopting this earnings measure, adjusted only for necessary company-specific adjustments, allows for a closer alignment between earnings and operating cash flow.

CE Mike Watters said that Redefine International would consider more acquisitions once it had bedded down its recent purchase of the rest of the German Leopard retail property portfolio that it did not own for €49m. "The disposals achieved during the period, in addition to the selective reinvestment of proceeds, illustrate our commitment to improving the overall quality of the portfolio.

"Simultaneously, we have strengthened our capital structure, underpinning sustainable shareholder value and enhanced long-term growth prospects," said Watters.

"Our first-class asset management team continues to identify new opportunities to create value and sustain high occupancy levels, supporting our ability to deliver superior income-led total returns in this historic low-interest rate environment," he said.

Source: Business Day

Source: I-Net Bridge

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