Finance team’s focus is helping Redefine grow, says CFO Ntobeko Nyawo


Redefine Properties CFO Ntobeko Nyawo unpacks the company’s recent results, which are looking positive despite high interest rates and low disposable income.

Redefine Properties has released its interim results for the six months period ended 29 February 2024 and, despite a high-interest and low-disposable income environment, have reported a 6.1 percent increase in distributable income to R1.7 billion.

CFO Ntobeko Nyawo says the group was able to sustain its operating profit margin at 76.5 percent. One of his highlights was the finance team’s ability to proactively manage liquidity risk, which, according to Ntobeko, “continues to steer balance sheet strength in this constrained environment”.

Redefine’s retail sector continues to perform relatively well, he adds, as it is driven by the demand for essentials, value and apparel. According to the company’s results, year-on-year trading densities grew by 4.8 percent, indicating opportunities for rental growth. “The continued positive operational metrics both in South Africa and Poland are also driving organic growth, easing the impact of the high interest rate environment,” Ntobeko says.

He explains that the finance team’s primary focus is efficiently sourcing capital that drives the R4.2 billion liquidity strength in its balance sheet. This has meant being highly strategic about where it allocates capital, focusing on recycling non-core assets to fund expansion activities into Polish logistics and self-storage markets and South Africa’s township markets. “Notably, we refinanced the Mlociny facility with €145 million (R2.9 billion) and raised debt for the R1.8 billion acquisition of the Mall of the South.”

Ntobeko says the group’s healthy debt maturity profile has helped its liquidity position, with no more than 18 percent of facilities coming up for maturity between 2025 and 2027. These, he adds, can comfortably be refinanced.

“When interest rates are high, it’s imperative to adequately hedge and protect ourselves. Approximately 76.7 percent of the group’s debt is hedged; during this time, we are hedged for an average term of 1.5 years, and the short, dated tenures seek to avoid baking in long-term pain of higher rates.”

Another focus area is the improvement of “loan-to-value” (LTV) ratio to within the company’s medium target range of 38 percent to 41 percent.

Ntobeko adds that Redefine’s disciplined approach to capital allocation, proactive risk management, and strategic expansion positions it well to seize opportunities and deliver long-term value to stakeholders in the current operating environment.

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